Excise adjudication cannot rely on unpleaded grounds; demand fails when the notice and finding proceed on different bases.

An excise adjudication cannot travel beyond the specific allegations in the show cause notice. Where the notice alleged that goods were not initially removed or cleared after payment of duty, the adjudicating authority could not sustain demand by instead relying on a different factual basis, namely that the goods had been removed earlier and were returned only later so as to attract the one-year limit under Rule 173H. A quasi-judicial order founded on an unpleaded ground is unsustainable, and the duty demand and related order were set aside.

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Issues: Whether the demand and confirmation of duty could be sustained when the adjudicating authority rested its finding on a ground not specifically alleged in the show cause notice.

Analysis: The show cause notice proceeded on the allegation that the goods were not initially removed or cleared after payment of duty and therefore could not be received under Rule 173H. The adjudicating authority, however, concluded that the goods had been initially removed in November 1995 and were received only in April and May 1997, thereby invoking the one-year limitation under Rule 173H. That basis was not specifically set out in the notice. A quasi-judicial order must remain confined to the charge actually made in the show cause notice, and a finding founded on a different and unpleaded ground cannot be sustained.

Conclusion: The order was beyond the scope of the show cause notice and could not be upheld; the appeal succeeded in favour of the assessee.

Final Conclusion: The duty demand and related order were set aside, with consequential relief available according to law.

Ratio Decidendi: An adjudication under excise law cannot travel beyond the specific allegations in the show cause notice, and a finding resting on an unnotified ground is unsustainable.

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