Notification-based duty exemption plea must be heard in appeal; a new legal ground cannot be refused solely for not being raised earlier.

A ground concerning the applicability of a notification and the correct rate of duty raises a question of law and may be examined in appeal even if not urged before the original adjudicating authority. The appellate authority cannot reject such a legal contention merely because it is a new ground, particularly where it affects tax liability for the relevant period. The refusal to consider the notification-based plea was therefore set aside, and the matter was remanded for fresh consideration after hearing the assessee.

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Issues: Whether the appellate authority was justified in refusing to consider the assessee's ground regarding the applicability of Notification No. 213/86 dated 25-3-1986 merely because it had not been raised before the adjudicating authority, and whether the matter required remand for decision on that question.

Analysis: A ground involving the applicability of a notification and the correct rate of duty raises a question of law, and such a plea is not barred merely because it was not urged before the original adjudicating authority. The appellate authority cannot decline to examine a legal contention solely on the footing that it is a new ground, particularly when the issue goes to the tax liability for the relevant period. As the question had not been decided on merits and the assessee had to be heard on that legal issue, the impugned order could not be sustained.

Conclusion: The refusal to consider the notification-based ground was set aside and the matter was remanded to the Collector (Appeals) for fresh consideration after hearing the assessee.

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