New grounds cannot be raised in appeal when no show cause notice covered the exemption dispute or factual objection.

A new factual and legal ground cannot be introduced for the first time in appeal where it was not raised in the original proceedings. The refund claim had already been examined and allowed on the basis of documents sought through the deficiency memo, and no show cause notice alleged that the goods were not food stuff or otherwise outside the exemption notifications. Because that objection was absent from the adjudication stage, the Revenue could not later challenge the refund on that basis in appeal, and the belated ground was held impermissible.

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Issues: Whether the Revenue could raise a new ground in appeal that the transported goods were not covered by the exemption notifications when no show cause notice had been issued on that basis.

Analysis: The refund claim had been examined and allowed by the lower authorities on the basis of the documents called for in the deficiency memo. No show cause notice was issued alleging that the goods were not food stuff, and that objection was not part of the original dispute before the adjudicating authorities. The Revenue sought to introduce a fresh factual and legal contention for the first time in appeal, which was impermissible at that stage.

Conclusion: The new ground could not be raised in appeal. The Revenue's challenge had no merit.

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