Judgment:
1. This appeal is directed against Order-in-Appeal No. 1553/87-BCH, dated 27-3-1987 Collector of Customs (Appeals), Bombay.
2. The appellants imported flapper valve steel hardened and tempered.
This was assessed to duty under C.T.H. 71.15(1) of Customs Tariff as high carbon steel strips. The appellants filed refund claim with Assistant Collector on the ground that goods imported are classifiable under C.T.H. 73.12. Assistant Collector rejected the refund claim.
During the course of their appeal before the Collector (Appeals) they changed the stand they had taken earlier and claimed that goods were correctly classifiable under C.T.H. 73.15(1) but instead of being assessed at the tariff rate the goods ought to have been given benefit of concessional rate of duty under exemption Notification No. 111/82.
Ld. Advocate submits that additional/alternate plea can always be taken at the appellate stage and their appeal cannot be rejected as has been done by the Collector (Appeals) only on the ground that such plea was not taken at the original stage. He cited number of cases in support of his contention like 1991 (53) E.L.T. 437 : 1991 (56) E.L.T. 853 : 1992 (57) E.L.T. 369 (S.C.).
3. Ld. D.R. while reiterated the departmental arguments submits that the appellants ought to have been diligent in making the claim at the original stage itself. In case if exemption onus was on them to prove they are entitled to exemption. Since this claim was not made before the Assistant Collector at the original stage the adjudicating authority at that stage could not have or his own gone out of the way to give them relief on the ground they had not pressed into service.
4. We have heard both sides. It is true that they claimed refund on the ground only that the goods were classifiable under C.T.H. 73.12 instead of 73.15(1). The plea for exemption was not taken at the original stage. Even during the appeal before the Collector (Appeals) this plea was not taken. This plea, however, was taken during the course of hearing before Collector (Appeals). Collector (Appeals) erred in holding that since the point was not a subject matter of the original order it cannot be taken up in the appeal. In case of Shri Rama Machinery Corporation (P) Ltd. v. C.C. reported in 1992 (57) E.L.T. 369 (S.C.) the Hon'ble Apex Court held that the assessee is entitled to claim classification of goods under different heading and the alternate ground in regard to classification is claimable at the Tribunal stage.
In that case the main contention urged was that the appellants should have been permitted to raise alternate ground and that the goods in question should have been classified under Item 68 and not under Item 26AA. The Apex Court observed that it was originally contended that the appellants was not chargeable to excise duty at all. It was therefore entitled to put forward an alternate contention before the Tribunal that even if dutiable it was dutiable under Item 68 and not under Item 26AA.5. Since alternate plea has been raised before us which was also urged before the Collector (Appeals) we are of the view, following the ratio of the Hon'ble Apex Court decision that alternate grounds ought to have been allowed to be taken, the matter would have to go back by way of remand. In view of this we set aside the impugned order and remand the matter to the Assistant Commissioner for de novo decision on the claim relating to the exemption Notification after observing the principles of natural justice. Appeal is allowed by way of remand.