Cenvat credit defence within show cause notice scope defeats revenue challenge to the relief granted.

Credit-related relief was upheld because the assessee had expressly raised the Cenvat credit defence in reply to the show cause notice, and the adjudicating and appellate authorities only dealt with that pleaded contention. As the finding remained within the scope of the notice and proceedings, the authorities did not exceed their jurisdiction, and no infirmity was found in the impugned orders. The revenue's challenge therefore failed.

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Issues: Whether the adjudicating and appellate authorities exceeded the scope of the show cause notice by granting credit-related relief based on the assessee's defence, and whether the revenue's appeal against the resulting order had merit.

Analysis: The respondents had raised, in their reply to the show cause notice, the specific defence that if they were treated as separate units and duty was confirmed on one unit's clearances, the duty paid would be available as Cenvat credit to the other unit. The adjudicating authority accepted that contention, and the appellate authority affirmed it. Since the relief formed part of the defence taken in answer to the notice, the authorities did not travel beyond the notice while dealing with the matter.

Conclusion: The credit-related finding was within the scope of the proceedings and no infirmity was found in the impugned orders; the revenue's challenge failed.

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