Classification cannot rest on a ground absent from the show cause notice; fresh decision required after fair hearing.

Classification of goods could not be sustained where the adjudication proceeded on a tariff entry different from the one specified in the show cause notice. The notice proposed classification under sub-heading 7326.90, but the order relied on Chapter 84, sub-heading 8416, while also rejecting classification under 7307.10. Since an assessee must be informed of the precise ground for adverse action and given a fair opportunity to meet it, the deviation from the notice vitiated the adjudication. The lower orders were set aside and the matter was remanded for fresh decision after hearing the assessee and allowing evidence.

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Issues: Whether the classification of grate bars could be sustained when the order-in-original rested on a tariff entry different from the one mentioned in the show cause notice, and whether the matter required remand for fresh determination.

Analysis: The notice proposed classification under sub-heading 7326.90, but the adjudication order proceeded to classify the goods under Chapter 84, sub-heading 8416, and rejected the claim for classification under 7307.10. A classification finding cannot be sustained on a basis wholly absent from the show cause notice, since the assessee must be put to notice of the exact ground on which adverse action is proposed. The deviation from the notice vitiated the adjudication, and the appellate affirmation could not cure that defect. Fresh consideration was therefore necessary with opportunity of hearing and evidence.

Conclusion: The classification orders of the lower authorities were set aside and the matter was remanded for fresh decision in accordance with law after giving the assessee an opportunity of hearing and to adduce evidence.

Ratio Decidendi: An adjudication cannot be sustained if it confirms classification on a ground not set out in the show cause notice; the assessee must be informed of the precise basis of proposed classification and given a fair opportunity to meet it.

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