CENVAT credit adjudication must stay within the show cause notice, with factual verification supporting remand.

Adjudication on CENVAT credit must remain confined to the allegations in the show cause notice, and the revenue authority cannot decide matters beyond that scope. Where entitlement to credit depends on factual verification of input use in fabrication of plant and machinery, the matter may be remanded for fresh consideration. The Tribunal set aside the impugned order and directed reconsideration of the credit claim afresh on the basis of the Chartered Engineer's certificate, duty-paying documents, the show cause notice, and the principles of natural justice.

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Issues: (i) Whether the adjudicating authority could travel beyond the allegations contained in the show cause notice while deciding entitlement to CENVAT credit; (ii) Whether the matter required remand for fresh consideration of the CENVAT credit claim on the basis of the Chartered Engineer's certificate and duty-paying documents.

Issue (i): Whether the adjudicating authority could travel beyond the allegations contained in the show cause notice while deciding entitlement to CENVAT credit.

Analysis: The Tribunal held that the first appellate authority was incorrect in permitting adjudication on matters not alleged in the show cause notice. It reiterated that the revenue authority cannot go beyond the charges set out in the notice and that the adjudication must remain within that framework.

Conclusion: The adjudicating authority cannot go beyond the scope of the show cause notice.

Issue (ii): Whether the matter required remand for fresh consideration of the CENVAT credit claim on the basis of the Chartered Engineer's certificate and duty-paying documents.

Analysis: The Tribunal found that the dispute turned on factual verification of the utilization of inputs in fabrication of plant and machinery, and that such verification was better undertaken by the adjudicating authority. It therefore directed reconsideration of the credit claim afresh, with due regard to the Chartered Engineer's certificate, supporting duty-paying documents, the show cause notice, and the principles of natural justice.

Conclusion: The matter was remanded for fresh adjudication within the scope of the show cause notice.

Final Conclusion: The impugned order was set aside and the appeals were disposed of by remand, leaving the assessee's entitlement to CENVAT credit to be reconsidered afresh by the adjudicating authority.

Ratio Decidendi: Adjudication must remain confined to the allegations in the show cause notice, and where factual verification is necessary, remand for fresh consideration may be ordered with observance of natural justice.

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