Show cause notice confines fiscal adjudication; demand based on extraneous grounds was unsustainable and set aside.

An adjudicating authority must confine a fiscal demand to the allegations and evidentiary basis set out in the show cause notice; it cannot confirm liability on a different basis or on assumptions not part of the original charge. Here, the notice rested on shortages worked out by dip measurement, but the confirmed demand was computed on manual weighment reports for another period and on extraneous grounds. Because the order travelled beyond the notice, the demand and penalty were unsustainable and the impugned order was set aside with consequential relief.

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Issues: Whether the adjudicating authority could sustain a duty demand by proceeding on a basis not alleged in the show cause notice and whether such an order was liable to be set aside.

Analysis: The demand in the notice was founded on shortages worked out by dip measurement, whereas the confirmed demand was quantified on the basis of manual weighment reports for a different period and on assumptions not forming part of the original charge. The governing principle is that adjudication must remain confined to the allegations and basis set out in the show cause notice; an authority cannot travel beyond the notice while determining liability.

Conclusion: The demand and penalty could not be sustained because the adjudicating authority had proceeded beyond the show cause notice.

Final Conclusion: The appeal succeeded and the impugned order was set aside with consequential relief according to law.

Ratio Decidendi: An adjudicating authority cannot confirm a fiscal demand on a basis not contained in the show cause notice, and any order founded on such extraneous grounds is unsustainable.

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