Show cause notice principle bars customs demand shifted from valuation grounds to classification grounds, with drawings classified independently.

Customs demand could not be sustained on a ground different from the show cause notice: the notice proceeded under Rule 9(1)(b)(iv) of the Customs Valuation Rules, but the adjudicating authority rejected that basis and instead denied Project Import treatment and classified drawings and designs as machinery. A duty demand cannot be upheld on a footing not put to notice. Since the goods were not assessed as part of Project Import, they had to be classified independently on their own merits, and drawings and designs were correctly classifiable under Heading 49.06. The demand was therefore unsustainable and was set aside, with consequential relief.

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Issues: Whether the customs demand could be sustained by excluding drawings and designs from Project Import benefits and classifying them as machinery under Heading 8479.89, despite the show cause notice being founded on Rule 9(1)(b)(iv) of the Customs Valuation Rules, 1988 and the adjudicating authority rejecting that basis.

Analysis: The show cause notice proposed addition of the value of drawings and designs under Rule 9(1)(b)(iv) of the Customs Valuation Rules, 1988. The adjudicating authority, however, recorded that Rule 9(1)(b)(iv) and Rule 9(1)(e) did not apply, yet confirmed demand on an entirely different footing by denying Project Import treatment to the drawings and designs and classifying them as machinery. A demand cannot be upheld on a ground wholly different from the one put to notice. If the value of the drawings and designs was to be included with the machinery, they had to be treated under the Project Import heading; if not, they had to be assessed independently on their own classification merits. Drawings and designs were correctly classifiable under Heading 49.06.

Conclusion: The demand was unsustainable and was set aside; the appeal was allowed with consequential relief.

Final Conclusion: The customs authorities could not sustain the levy by shifting from the valuation basis in the notice to a different classification basis, and the goods were held eligible for independent classification as drawings and designs.

Ratio Decidendi: A duty demand cannot be sustained on a ground not proposed in the show cause notice, and where imported drawings and designs are not assessed as part of Project Import, they must be classified independently according to their proper tariff heading.

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