Robot (Obstacle Avoidance and Path Planning) problem?!

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Hello, I have a non holonomic robot, "Seekur Jr." I set up the navigation stack, and I am using TrajectoryPlannerROS as a base local planner, with DWA set to true. The path planning works fine but I would like to enhance it more. As you can see in the video the re-planned path by the robot after it sees the obstacle doesn't consider the dimensions of the robot. It doesn't directly avoid the obstacle and it keeps on rotating to decide on the path. I have been tuning the parameters and I think the problem is there but am not sure which one is directly connected to this issue. Please guide me on this issue. I'd be glad and thankful to your suggestions.

http://www.youtube.com/watch?v=u35uZr...