Full Judgment
2. Shri Sudhir Malhotra, Learned Advocate, submitted that all the 3 appellants fabricate bodies on chassis which fall under Heading 87.02 of the Schedule to the Central Excise Tariff Act; that during the relevant period the Appellant cleared the impugned goods under Heading 87.02 on payment of Central Excise duty availing partial exemption under Notification No. 162/86-CE dated 1.3.86; that the show cause notices were issued to them for denying the benefit of the said notification on the ground that they had not furnished evidence regarding payment of Central Excise duty or appropriate Customs duty on chassis; that the Dy. Commissioner, under Order-in-Original No. 408 to 429/2000 dated 24.10.2000 dropped the demand of duty against the Appellants holding that they had rightly paid the duty; that the Commissioner Central Excise reviewed the said Order-in-Original and directed the Dy. Commissioner to filed appeals before the Commissioner (Appeals) on the ground that the bodies fabricated on chassis are classifiable under Heading 87.07 in view of the decision of the supreme Court in the case of CCE v. Ram Body Builders, 1997 (94) ELT 442 (SC) and the decision of the Punjab & Haryana High Court in the case of Darshan Singh Pavitar Singh v. UOI, 1988 (34) ELT 631 (P&H). The learned Advocate, further, submitted that Order-in-Review has been passed beyond that ambit of sow cause notice which is bad in law; that it was not the case of the department in the show cause notice that the impugned gods are classifiable under heading 87.07 and not under Heading 87.02; that it has been held by the Appellant Tribunal in the case of CCE v. Swastic Coaters P. Ltd. - 1999 (107) ELT 533 (T) that review proceedings cannot go beyond the ground taken in show cause notice and urged the fresh ground.
3. Countering the arguments Shri Randhir Singh, learned D.R., submitted that in Ram Body Builders case the Supreme Court had held that the body fabricated on the chassis are classifiable under heading 87.07 and as the Notification No. 162/86 provides concessional rate of duty to motor vehicles falling under Heading 87.02 only, the said benefit is not available to the Appellants; that once the Supreme Court has laid down the bodies as classifiable under heading 87.07 the department is justified in filing the appeal before the Commissioner (Appeals) against Order-in-Original dropping the demand.
4. We have considered the submissions of both the sides. It has not been denied by the Revenue that the show Cause notice were issued to all the Appellant for demanding duty on the ground that they had not furnished the proof regarding payment of Central Excise duty on the chassis which was the condition precedent for availing the benefit of Notification No. 162/86 as amended by Notification No. 89/90-CE dated 20.3.90. It was not alleged in the show cause notices, issued to the Appellants, that the bus body fabricated by them on the chassis are classifiable under heading 87.07. The Adjudicating Authority after considering the submissions and the material available on record had dropped the demand against all the Appellant. Now the department is making out a completely new case by filing the appeal before the Commissioner (Appeals) as the grounds of appeal are relating to the classification of the impugned product. It is settled law that a new case cannot be made in appeal proceedings. It is not open to the Commissioner to travel beyond the scope of show cause notice and order filing of an appeal, pleading a ground, which is not specified as a ground for raising demand in the show cause notice. This was the view expressed by the Tribunal in the case of Swastic Coaters Pvt. Ltd. (Supra). Accordingly the impugned Order confirming the demand of duty against the Appellant on an entirely new ground cannot be sustained.
We, therefore, set aside the impugned orders and allow the appeals.