Classification beyond show cause notice cannot sustain demand when remand authority introduces a new tariff heading without notice.

An adjudicating authority in remand proceedings cannot sustain a demand on a new classification that was not proposed in the show cause notice. Here, the remand was limited to determining the correct classification under Heading 5907 after considering Chapter Note 5(c) to Chapter 59, but the authority shifted the goods to Chapter 54 without notice to the assessee. That new basis was beyond the notice and beyond the remand directions, and the appellate authority merely affirmed it mechanically. The classification adopted in the impugned order was therefore unsustainable, and the demand founded on it was set aside in favour of the assessee.

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Issues: Whether the demand and classification could be sustained when the adjudicating authority, in remand proceedings, travelled beyond the show cause notice and fixed a new classification under Chapter 54 without notice to the assessee.

Analysis: The matter had been remanded only to determine the correct classification under Heading 5907 after considering Chapter Note 5(c) to Chapter 59 of the Central Excise Tariff Act, 1985. The adjudicating authority instead concluded that the goods were not classifiable under Chapter 5907 and, without putting the assessee on notice, shifted the classification to Chapter 54. The appellate authority also mechanically affirmed that view. Since the new basis of classification was never proposed in the show cause notice and the assessee had no opportunity to meet that case, the adjudication was held to be impermissibly beyond the scope of the notice and beyond the remand directions.

Conclusion: The classification adopted in the impugned order could not be sustained and the demand based on it was set aside in favour of the assessee.

Ratio Decidendi: An adjudicating authority cannot, in remand proceedings, sustain a demand on a new classification or ground that travels beyond the show cause notice and was not put to the noticee.

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