Tariff classification and exemption denial cannot rest on a new appellate ground different from the original notice basis.

Tariff classification of superchargers and fuel injection equipment was determined on their own characteristics, not merely by their use with internal combustion engines. The supercharger was treated as an air pump under Heading 84.14, while the fuel injection system was required to be classified by reference to its individual components, including items falling under Headings 84.13 and 84.21. The claim that these goods were parts of main battle tanks in Chapter 87 was not accepted. The text also states the revenue could not deny exemption on a new ground at the appellate stage where the original case proceeded only on a different classification basis, so the exemption denial could not be sustained on that shifted footing.

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Issues: Whether the supercharger and fuel injection equipment were classifiable as parts of main battle tanks in Chapter 87 so as to qualify for exemption under Notification No. 5/98, and whether the denial of exemption could be sustained on a ground different from the one taken in the show cause notice and departmental appeal.

Analysis: The goods were examined on their own characteristics and not treated as engine parts merely because they were used with internal combustion engines. The supercharger was held to be in the nature of an air pump classifiable in Heading 84.14, while the fuel injection system had to be split into its constituent parts and classified on their individual merits, including components falling under Headings 84.13 and 84.21. On that basis, the claim that the goods were classifiable in Chapter 87 as tank parts was not accepted. At the same time, the departmental case proceeded throughout on the specific basis that the goods were classifiable in Heading 84.09, and the exemption was being denied only for that reason. Since the department could not substitute a different basis to support denial of exemption at the appellate stage, the original ground of denial could not be upheld by adopting a new one.

Conclusion: The goods were not accepted as Chapter 87 parts, but the departmental ground for denying exemption failed and could not be replaced by a new case on appeal. The appeal was therefore rejected, and the assessee retained the benefit of the order under challenge.

Final Conclusion: The decision turned on correct tariff classification and on the rule that exemption cannot be denied on a basis different from that originally put forward by the department.

Ratio Decidendi: A revenue authority cannot sustain denial of exemption by setting up a new case at the appellate stage on a ground different from that stated in the notice and original adjudication.

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