Show cause notice limits in excise adjudication bar duty demands confirmed on an unalleged ground.

A duty demand under Central Excise could not be sustained where the adjudicating authority confirmed liability on a basis not proposed in the show cause notices. The notices proceeded only under Rule 57-S(2)(b), but the demand was ultimately raised by treating the goods as waste and scrap under Rule 57-S(2)(c), without any corresponding allegation in the notices. An adjudication that travels beyond the scope of the notice lacks legal foundation, so the duty demand and consequential penalty were set aside in favour of the assessee.

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Issues: Whether the duty demand and penalty could be sustained when the adjudicating authority confirmed duty on a basis not proposed in the show cause notices, by treating the goods as waste and scrap under Rule 57-S(2)(c) of the Central Excise Rules, 1944.

Analysis: The show cause notices proceeded only on the footing of Rule 57-S(2)(b), whereas the adjudicating authority ultimately demanded duty by treating the material as waste and scrap under Rule 57-S(2)(c). The demand under clause (c) was not put to the appellants in the notices, and there was no departmental case in the notices that waste and scrap of fire bricks had been cleared during the relevant periods. A demand confirmed on a ground wholly outside the notice cannot be sustained in law.

Conclusion: The duty demand and consequential penalty were unsustainable as they travelled beyond the scope of the show cause notices and were therefore set aside in favour of the assessee.

Final Conclusion: The appeals succeeded and the impugned order was quashed without examination of the remaining issues.

Ratio Decidendi: An adjudication cannot sustain a duty demand on a ground not alleged in the show cause notice; a confirmation that travels beyond the notice is without legal foundation.

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