SSI exemption cannot be denied on a new appellate ground beyond the show cause notice and original order.

Denial of SSI exemption cannot rest on a new ground introduced for the first time in appeal when that basis was neither alleged in the show cause notice nor adopted in the adjudication order. The assessee had claimed exemption under Notification No. 9/2000-C.E., while the original dispute concerned only the manner of availing the concession. Because the Commissioner (Appeals) relied instead on the supplier's brand name, a ground outside the notice and original order, the appellate denial was not sustainable. The exemption was therefore upheld in favour of the assessee.

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Issues: Whether the denial of SSI exemption on a ground not raised in the show cause notice or in the adjudication order was permissible.

Analysis: The assessee claimed exemption under Notification No. 9/2000-C.E. while the department disputed only the manner of availing the concession. The Commissioner (Appeals) introduced a fresh ground, namely use of the supplier's brand name, which was neither alleged in the show cause notice nor formed the basis of the adjudication order. A new basis for denial cannot be introduced at the appellate stage when it travels beyond the notice and the original order.

Conclusion: The denial of the exemption on the new ground was not sustainable and the issue is answered in favour of the assessee.

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