(1) APPEAL admitted. (2) AFTER hearing both counsel the appeal is disposed of. (3) THE controversy before us relates only to the additional duty payable under S. 3 of the Customs Tariff Act, 1975. The assessee appellant had claimed that no excise duty was payable in respect of the material imported by it on the ground that it was scrap. It appears that the goods have been classified under Item 73.16(I) of the Customs Tariff Act and this has not been specifically challenged by the appellant. However the appellants contention was accepted by the Collector of Customs who held that "since the material imported constituted used and second-hand scrap (even though they be rails) they cannot be deemed to be manufactured for levy of central excise duty". The Department preferred an appeal from the order of the Collector. By the time the tribunal came to decide the appeal it had the benefit of this courts judgment in the case of Khandelwal Metal & Engineering Works v. Union of India - 1985 (Supp.) 1 SCR 750. In view of this decision, the tribunal came to the conclusion that even if the product represented scrap it was liable to excise duty. Faced with this situation the appellant sought to raise a point before the tribunal that in case it was scrap, it would fall under S. 68 of the central Excise Tariff Act and not under Item 26AA. It raised this argument because there is a difference in the duty leviable under the two items. The tribunal, however, refused permission to the assessee to raise this ground and, having come to the conclusion that the goods though scrap are dutiable under the central ExCise Act, allowed the departments appeal. (4) THE assessee has preferred the present appeal. The main contention urged is that the appellant should have been permitted to raise the additional ground that the goods in question should have been classified under Item 68 and not under Item 26AA. We think there is substance in this contention. It was originally contended that the appellant was not chargeable to excise duty at all. It was, therefore, entitled to put forward an alternative contention before the tribunal that, even if dutiable, it was dutiable under Item 68 and not under 26AA. We think there is substance in this contention. It was originally contended that the appellant was not chargeable to excise duty at all. It was, therefore, entitled to put forward an alternative contention before the tribunal that, even if dutiable, it was dutiable under Item 68 and not under 26AA. (5) LEARNED counsel for Union of India submits that the assessee had not disputed the classification of the goods under Tariff Item No. 73 for the purposes of customs duty. We do not see how this can preclude the appellant from raising the present contention. We, therefore, set aside the order of the tribunal and remand the matter so far as this aspect is concerned. The appeal is restored to the file of the tribunal for considering the contention that the goods are dutiable for the purpose of excise duty under Tariff Item 68 and not under Item 26AA. The tribunal will decide the issue on merits. It will be open to the respondent to urge before the tribunal, if so advised, that the classification for purposes of customs duty should also be taken into account in deciding the classification for the purposes of excise duty. The appeal is disposed of accordingly. There will be no order as to costs.