Separate demands in a show cause notice survive quashing of one issue and must still be adjudicated on merits.

Quashing of a show cause notice on the free-supply valuation issue did not extinguish separately raised demands in the same notice. The earlier writ order preserved the Department's liberty only for the free-material component, and that limited relief did not amount to a final adjudication of other heads such as short payment and cess-related liabilities. The adjudicating authority and Tribunal erred in treating the notice as entirely foreclosed. The remaining demands survive and must be decided on merits after giving the respondent an opportunity of hearing.

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Issues: Whether quashing of the show cause notice on the free-supply valuation issue extinguished the entire notice and whether the remaining demands raised in the notice still required adjudication on merits.

Analysis: The earlier writ order had set aside the show cause notice but had also preserved the Department's liberty to proceed in accordance with the law as declared in the valuation dispute concerning free materials. That liberty was confined to the free-supply component and did not amount to a conclusion that all other heads of demand in the notice had been finally adjudicated. The other demands, including those relating to short payment and cess-related liabilities, had not been examined on merits. The adjudicating authority and the Tribunal erred in treating the quashing of the notice as foreclosing every other demand raised therein.

Conclusion: The remaining demands in the show cause notice survive for adjudication and must be decided on merits after affording the respondent an opportunity of hearing.

Final Conclusion: The Department obtained relief to the extent that the impugned order could not stand as a complete bar against adjudication of the other unresolved demands, and the matter was left open for merits-based determination of those issues.

Ratio Decidendi: Quashing of a show cause notice on one distinct issue does not automatically extinguish separately raised demands in the same notice unless those demands have also been conclusively adjudicated or set aside.

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