Refund rejection cannot rest on a ground absent from the show cause notice; notice remains the foundation of proceedings.

Refund claims under Notification No. 9/2009-ST, as amended, could not be rejected on limitation where the show cause notices alleged only non-establishment of authorised use and non-fulfilment of documentary conditions. A refund or demand order must be confined to the grounds set out in the notice, because the notice is the foundation of the proceedings. Rejection on a new ground introduced at adjudication was therefore unsustainable, and the impugned orders were set aside with the refund appeals allowed.

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Issues: Whether rejection of refund claims on the ground of limitation, when limitation was not alleged in the show cause notices, could be sustained.

Analysis: The refund claims under Notification No. 9/2009-ST, as amended by Notification No. 15/2009-ST, were rejected by the lower authorities on limitation. The show cause notices, however, proceeded on different grounds, namely non-establishment of use of services for authorised operations and non-fulfilment of documentary conditions. Since the demand or rejection must be supported by the allegations made in the show cause notice, a new ground cannot be introduced at the adjudication stage when it was not put to the assessee in the notice.

Conclusion: The rejection of the refund claims on limitation, being beyond the scope of the show cause notices, was unsustainable.

Final Conclusion: The impugned orders were set aside and the refund appeals were allowed.

Ratio Decidendi: A refund or demand order cannot rest on a ground not alleged in the show cause notice, since the notice is the foundation of the proceedings.

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