Show-cause notice quashed for lacking specific allegations and factual inquiry on job-worker capital goods valuation.

A show-cause notice must disclose a specific legal infraction with adequate particulars and a factual foundation before proceedings can be sustained. Here, the notice failed to explain why moulds and dies cleared to a job worker attracted liability, and no inquiry was made into their use, the quantity of capital goods in the job worker's hands, or whether amortised cost formed part of assessable value. In the absence of supporting investigation and concrete allegations, the notice was found to be ill-founded and was quashed.

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Issues: Whether the show-cause notice, lacking concrete allegations and supporting inquiry, was liable to be quashed.

Analysis: The notice did not set out a specific infraction of law with adequate particulars. Though moulds and dies had been cleared to a job worker and the Department had knowledge of the challan, no further inquiry was made into their use, the quantity of capital goods in the job worker's hands, or whether amortised cost formed part of the assessable value. In the absence of such factual foundation and evidentiary enquiry, the notice did not disclose a sustainable basis for proceeding.

Conclusion: The show-cause notice was held to be ill-founded and liable to be quashed, and the appeal succeeded.

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