Alternate customs exemption claim can be raised on appeal; rejection for prior omission was held erroneous.

An alternate claim for customs exemption may be raised at the appellate stage even if it was not included in the original refund or adjudication claim. The appellate rejection of such a plea solely on the ground of omission before the original authority was held erroneous, because an assessee can advance an alternate ground on classification or consequential relief in appeal. The matter therefore required fresh examination of the exemption claim after giving the assessee due opportunity, and the dispute was remanded for de novo consideration in observance of natural justice.

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Issues: Whether an alternate claim for exemption under the customs exemption notification could be raised at the appellate stage even though it was not taken before the original adjudicating authority.

Analysis: The appeal originally proceeded on the question of tariff classification, but the exemption plea was subsequently raised before the appellate authority and was also urged before the Tribunal. The rejection of that plea merely because it had not formed part of the original refund claim was held to be erroneous. Relying on the settled principle that an assessee may raise an alternate ground on classification or consequential relief at the appellate stage, the matter required fresh consideration on the exemption claim after affording due opportunity.

Conclusion: The alternate exemption ground was permitted to be raised, the impugned order was set aside, and the matter was remanded for de novo decision after observance of natural justice.

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