Alternate exemption claim may be raised on appeal and considered on merits, with remand for fresh adjudication.

An alternate exemption claim can be raised at the appellate stage even where the original refund claim was confined to classification, and the appellate forum should consider it if urged before it. A ground not pressed before the original authority is not barred from appellate consideration merely for that reason. On that basis, the proper course was remand for fresh adjudication of the exemption claim on merits.

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Issues: Whether an alternate claim for exemption could be raised at the appellate stage and, if so, whether the matter required remand for fresh adjudication.

Analysis: The refund claim before the original authority was confined to classification, and the exemption plea was not pressed at that stage. The appellate authority erred in holding that a ground not raised in the original order could not be taken in appeal. An assessee may raise an alternate contention on classification or exemption at the appellate stage, and such a plea ought to be considered when it is urged before the appellate forum. Since the alternate exemption claim had been raised before the appellate authority, the proper course was to permit its consideration on merits.

Conclusion: The alternate exemption plea was admissible at the appellate stage, and the matter was rightly sent back for fresh decision on that claim.

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