Modvat credit dispute: new grounds cannot be raised on appeal when they were never decided by lower authorities.

Revenue could not assail Modvat credit on the new ground that cables were ineligible capital goods, because the dispute before the lower authorities was limited to whether a fresh declaration was required after 23-7-1996. The appellate authority had allowed credit on the footing that a declaration once filed need not be repeated. Since eligibility of wires and cables as capital goods was not the subject matter of the orders under challenge, that question could not be introduced for the first time in appeal. The Revenue's objection therefore failed and the appeal was rejected.

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Issues: Whether Revenue could challenge the grant of Modvat Credit on a ground that the assessee's cables were not eligible capital goods, when the lower authorities had decided the matter only on the question whether a fresh declaration under the relevant rule was required.

Analysis: The dispute before the adjudicating authority and the appellate authority was confined to the need for a fresh declaration after 23-7-1996. The appellate authority allowed credit on the basis that a declaration once filed did not have to be filed repeatedly. The question whether wires and cables were eligible for Modvat Credit as capital goods was not the subject matter of the orders under challenge. An appeal cannot be entertained on a completely new ground that was not considered by the lower authorities.

Conclusion: The Revenue's objection failed and the appeal was rejected.

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