Remand proceedings and natural justice require fresh duty demands to stay within the notice and be served on all affected noticees.

In remand proceedings, the adjudicating authority must decide all surviving issues within the scope of the original show cause notice and any duly notified addendum; it cannot confine itself to one quantification method if the remand left the substantive demand open. A material enlargement of the basis of demand must also be put to all affected noticees, because fresh allegations affecting co-noticees require notice and an opportunity of hearing. The order was therefore set aside for procedural infirmity and the matter was remanded for fresh adjudication in accordance with the remand directions and natural justice.

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Issues: (i) Whether the adjudicating authority, in remand proceedings, could confirm the duty demand on a basis different from or in addition to the basis set out in the original show cause notice and its addendum; (ii) Whether the impugned order was vitiated for want of notice to all co-noticees on the fresh basis adopted in the addendum and for denial of natural justice.

Issue (i): Whether the adjudicating authority, in remand proceedings, could confirm the duty demand on a basis different from or in addition to the basis set out in the original show cause notice and its addendum.

Analysis: The remand order had left all subsisting issues open, except confiscation of the seized goods, and directed fresh adjudication after notifying the input-output ratio on which the demand had to be quantified. The original notice itself had not been extinguished and the addendum only enlarged the basis of quantification. In such a situation, the adjudicating authority was required to consider the sustainability of the demand on the basis of the original notice as well as the addendum, and was not confined to a single quantification method. The authority misdirected itself in treating the CPW ratio as the only permissible basis.

Conclusion: The demand could not be confined to one basis alone, and the adjudicating authority was bound to decide the matter within the full scope of the remand and the enlarged notice.

Issue (ii): Whether the impugned order was vitiated for want of notice to all co-noticees on the fresh basis adopted in the addendum and for denial of natural justice.

Analysis: The addendum introducing the CPW-based quantification was issued only to the company, though the penal exposure of the other noticees could be affected by the fresh basis adopted against the company. A material enlargement of the case against the noticees required notice to all persons likely to be affected, and the proceedings had to satisfy the requirements of natural justice. Since the co-noticees were not given notice of the fresh allegation, the order suffered from procedural infirmity.

Conclusion: The impugned order was vitiated by denial of natural justice to the co-noticees.

Final Conclusion: The impugned order was set aside and the matters were sent back for fresh adjudication in accordance with the remand directions and after giving all noticees an opportunity of hearing.

Ratio Decidendi: In remand proceedings, the adjudicating authority must decide all surviving issues within the scope of the original notice and any duly notified addendum, and any material enlargement of the basis of demand must be put to all affected noticees before adjudication.

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