Exemption for unwrought copper upheld; demand fails when a new denial ground is raised beyond the show cause notice.

Imported unwrought copper fell within Notification No. 4/97-C.E. because the entry covered both unrefined copper and unwrought copper, and the narrower interpretation adopted in adjudication could not stand when the Revenue had not challenged the contrary appellate finding. The demand also failed because the show cause notice alleged only that the goods were refined copper and outside the notification; it did not raise non-fulfilment of Condition No. 22. A demand cannot be sustained on a ground not set out in the notice, so the duty demand was set aside in favour of the assessee.

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Issues: (i) Whether imported unwrought copper was entitled to the benefit of Notification No. 4/97-C.E. dated 01.03.1997. (ii) Whether the demand could be sustained on the basis of Condition No. 22 of the notification when the show cause notice proceeded only on the ground that the goods were refined copper and not unrefined copper.

Issue (i): Whether imported unwrought copper was entitled to the benefit of Notification No. 4/97-C.E. dated 01.03.1997.

Analysis: The notification entry covered unrefined copper as well as unwrought copper, and the appellate finding had already rejected the narrower interpretation adopted in adjudication. In the absence of any appeal or cross-objection by the Revenue against that finding, the interpretation of the entry stood in favour of the assessees.

Conclusion: The benefit of the notification was available to the imported copper, in favour of the assessee.

Issue (ii): Whether the demand could be sustained on the basis of Condition No. 22 of the notification when the show cause notice proceeded only on the ground that the goods were refined copper and not unrefined copper.

Analysis: The show cause notice proposed denial of exemption only on the footing that the goods were refined and therefore outside the notification entry. It did not allege non-fulfilment of Condition No. 22. The later reliance on that condition introduced a new basis of denial beyond the scope of the notice.

Conclusion: The demand could not be sustained on Condition No. 22, in favour of the assessee.

Final Conclusion: The appeals succeeded and the duty demand was set aside on the grounds accepted in favour of the assessees.

Ratio Decidendi: A demand based on a ground not set out in the show cause notice cannot be sustained, and an exemption entry must be construed in accordance with the scope of the appellate finding when the Revenue has not challenged that finding.

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