New ground cannot be raised in appeal when Revenue never challenged earlier finding on Rule 9 benefit.

The Revenue could not contest denial of the benefit under the third proviso to Rule 9 of the Central Excise Rules, 1944 on the basis of alleged non-fulfilment of condition No. 1, because that ground had not been raised before the Collector (Appeals). The first appellate authority had already accepted fulfilment of conditions Nos. 1 and 2, and the Revenue did not challenge that finding by appeal. A new objection could not be introduced for the first time in the present appeal, so the assessee retained the benefit of the third proviso to Rule 9.

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Issues: Whether the Revenue could challenge denial of the benefit of the third proviso to Rule 9 of the Central Excise Rules, 1944 on the ground of non-fulfilment of condition No. 1 when no appeal had been filed before the Collector (Appeals) on that issue.

Analysis: The first appellate authority had already accepted fulfilment of conditions Nos. 1 and 2, and the Revenue had not appealed against that finding. In the present appeal, the Revenue sought to rely on non-fulfilment of condition No. 1 for the first time. Such a contention could not be entertained at this stage because it had not been raised in the appeal before the Collector (Appeals).

Conclusion: The Revenue's challenge failed as the new ground regarding condition No. 1 could not be raised for the first time in this appeal; the benefit under the third proviso to Rule 9 remained available to the assessee.

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