Classification dispute on soft ferrite components fails where Revenue raises a new tariff basis not in the show cause notice.

Soft ferrite components were held classifiable under Heading 85.48, as the assessee's classification had been accepted by both the adjudicating and appellate authorities. The Revenue's attempt to shift the dispute to Heading 85.05 on the basis of Note 2(a) of Section XVI failed because that ground was not raised in the show cause notice, which had proceeded on a different factual footing. A fresh classification case cannot be introduced at the appellate stage, and the concurrent finding on classification was left undisturbed.

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Issues: Whether Soft Ferrite Components were classifiable under Heading 85.48 or under Heading 85.05 of the Central Excise Tariff Act, and whether the Revenue could support the appeal on a new ground not raised in the show cause notice.

Analysis: The product had been classified by the assessee under Heading 85.48 and both the adjudicating authority and the appellate authority had accepted that classification. In the appeal, the Revenue sought to argue for classification under Heading 85.05 on the basis of Note 2(a) of Section XVI, contending that the goods were parts of electro magnets. That ground, however, was not the basis of the show cause notice, which proceeded on the footing that the product was intended to become a permanent magnet after magnetisation. A new case cannot be made out by the Revenue at the appellate stage.

Conclusion: The classification under Heading 85.48 was upheld and the Revenue's appeal was rejected.

Final Conclusion: The assessee retained the favourable classification and the Revenue failed to disturb the concurrent factual and legal findings.

Ratio Decidendi: The Revenue cannot succeed in appeal by advancing a fresh classification basis not set out in the show cause notice, and the concurrent classification finding will not be interfered with absent a valid foundation.

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