Alternative classification plea may be raised where consistent with the original stand; Tribunal refusal led to remand.

The Supreme Court held that an assessee could raise an alternative classification plea before the Tribunal where it was not inconsistent with the original stand. In a dispute over additional duty under Section 3 of the Customs Tariff Act, 1975 and excise classification of imported scrap, the alternative contention that the goods were classifiable under Item 68 rather than Item 26AA had to be considered because it concerned the correct duty treatment. The Tribunal's refusal to entertain that plea prevented determination of a material classification issue, so its order was set aside and the matter remanded for fresh consideration.

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Issues: Whether the assessee could be permitted to raise before the Tribunal the alternative contention that the goods, even if dutiable, were classifiable under Item 68 and not under Item 26AA, and whether the Tribunal's refusal warranted remand.

Analysis: The dispute concerned additional duty under Section 3 of the Customs Tariff Act, 1975 and the excise classification of the imported scrap. The assessee had originally contended that no excise duty was payable, and the alternative plea as to the proper tariff item was raised when the Tribunal decided the matter. The alternative ground was not inconsistent with the original stand and involved the correct classification for excise purposes. The refusal to permit that plea prevented adjudication of a material classification issue.

Conclusion: The assessee was entitled to raise the alternative classification contention. The Tribunal's order was set aside and the matter was remanded to consider whether the goods were dutiable under Item 68 and not under Item 26AA.

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