Modvat credit denial cannot rest on grounds beyond the show cause notice; new objections cannot sustain the order.

Modvat credit denial could not be sustained where the appellate order relied on grounds not alleged in the show cause notice. The notice was confined to non-furnishing of particulars required under Rule 57H(1)(b) concerning inputs in stock, inputs used in cleared final products, and inputs lying in process or unused. The impugned order instead rejected credit on different grounds relating to invoice particulars under Notification No. 15/94 and non-filing of a declaration under Rule 57G. Because the adjudication travelled beyond the case set out in the notice, the order was held unsustainable and set aside.

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Issues: Whether the denial of Modvat credit could be sustained when the impugned order proceeded on grounds not alleged in the show cause notice.

Analysis: The show cause notice proposed denial of Modvat credit on the specific basis that the appellants had not furnished the particulars required under Rule 57H(1)(b) of the Central Excise Rules, 1944 regarding inputs in stock, inputs used in cleared final products, and inputs lying in process or unused. The impugned appellate order, however, denied the credit on different grounds, namely, absence of particulars on the invoices required under Notification No. 15/94 and non-filing of a declaration under Rule 57G of the Central Excise Rules, 1944. Since these grounds were not part of the notice, the order travelled beyond the case set out for adjudication.

Conclusion: The impugned order was beyond the scope of the show cause notice and could not be sustained; the order was set aside and the appeal was allowed.

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