Show cause notice limits in Modvat credit disputes: factual transgression found, but no substantial question of law arose.

The dispute concerned Modvat credit and whether the adjudicating authority exceeded the scope of the show cause notice by examining eligibility for credit when the notice only alleged non-declaration. The Court accepted that, on the facts relating to the goods in Annexure B, the authority went beyond the basis of the proceedings and transgressed the notice. It held that the controversy turned on the particular factual record and appreciation of the notice and adjudication order, and therefore did not give rise to any substantial question of law. The reference was not answered on merits.

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Issues: Whether any substantial question of law arose for answer in the reference, or whether the dispute turned on the factual appreciation of the show cause notice and the adjudication order.

Analysis: The reference arose from a challenge to the adjudication of Modvat credit and the scope of the show cause notice. The Court noted that the Tribunal's conclusion rested on the factual position that, in relation to the goods covered by Annexure B, the notice alleged non-declaration, while the adjudicating authority went further and examined eligibility for credit despite the declaration being on record. On those facts, the Court agreed that the authority had transgressed the notice and acted beyond the basis of the proceedings. The Court further held that the matter depended on the peculiar facts emerging from the record and did not raise any substantial question of law requiring an answer.

Conclusion: No substantial question of law arose, and the reference was not answered on merits.

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