Remand beyond the show cause notice is impermissible when appellate proceedings seek to raise new valuation issues indirectly.

A remand application under Section 35E(2) was held not maintainable where the Revenue relied on grounds that travelled beyond the show cause notice and were never part of the original adjudication. The adjudicating authority had considered only the alleged failure to produce sale bills and supporting documents for deductions, while the appellate grounds sought to introduce issues on relationship between service centres/dealers and valuation under Rule 7. Because those matters were outside the original controversy, the Commissioner (Appeals) could not sustain a de novo remand on them, and the remand order was set aside.

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Issues: Whether the Revenue could seek remand on grounds that were outside the scope of the show cause notice and not considered in the adjudication order, and whether the Commissioner (Appeals) was justified in accepting the application under Section 35E(2).

Analysis: The Revenue's grounds before the appellate authority introduced issues relating to alleged relationship between the assessee's service centres/dealers and the assessee, and the form of price lists and valuation under Rule 7, though these matters were not part of the show cause notice. The adjudicating authority had proceeded only on the alleged failure to produce sale bills and supporting documents for deductions. Since the additional grounds were clearly beyond the scope of the notice, they were not issues that arose for determination in the original adjudication. In such circumstances, the Commissioner (Appeals) could not properly sustain a remand for de novo adjudication on matters not forming part of the original controversy.

Conclusion: The application for remand under Section 35E(2) was not maintainable on the grounds raised, and the impugned remand order was liable to be set aside.

Final Conclusion: The appeal succeeded and the assessee obtained relief against the remand order.

Ratio Decidendi: A remand cannot be ordered on grounds that travel beyond the show cause notice and were never part of the original adjudication, as appellate proceedings cannot be used to introduce a new case indirectly.

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