Excise adjudication cannot go beyond the show cause notice, and new appellate grounds outside it fail.

An excise adjudication cannot travel beyond the grounds stated in the show cause notice, and an appellate challenge cannot succeed on a new basis outside the original notice and order-in-original. Here, the appeal memorandum did not raise relationship or the applicability of proviso (iii) to Section 4(1)(a) of the Central Excise Act, 1944; the only plea was that additional consideration flowed from buyer to manufacturer. The record showed that the notice and original adjudication were founded solely on alleged relationship between the parties, and the new ground was not shown to have been raised before the Collector (Appeals). The appeal was dismissed for lack of merit.

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Issues: Whether the Department could succeed in appeal on a ground not raised in the show cause notice, and whether the adjudication of the price list could travel beyond the grounds stated in the notice.

Analysis: The appeal memorandum did not raise the question of relationship or the applicability of proviso (iii) to Section 4(1)(a) of the Central Excise Act, 1944. The only contention urged in the appeal was that additional consideration flowed from the buyer to the manufacturer, but the record showed that the show cause notice and the order-in-original were founded only on the alleged relationship between the parties. The adjudication of a price list cannot extend beyond the grounds set out in the show cause notice, and the new ground was not shown to have been raised before the Collector (Appeals).

Conclusion: The appeal had no merit and was dismissed.

Ratio Decidendi: An excise adjudication cannot proceed on a ground not contained in the show cause notice, and an appellate challenge cannot succeed on a new basis outside the scope of the notice and original adjudication.

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