Show-cause notice limits adjudication: demand beyond the notice and on new grounds violates natural justice.

An adjudicating authority cannot confirm a duty demand beyond the scope of the show-cause notice or rely on grounds not specifically put to notice. Where the notice proposed duty on stated grounds, but the adjudication order enlarged the demand and proceeded on additional grounds, the order offended the principles of natural justice. The demand could not be sustained and was set aside in favour of the assessee.

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Issues: Whether the adjudication order could confirm duty demand in excess of the amount and grounds proposed in the show-cause notice.

Analysis: The notice proposed duty demands on two stated grounds, but the impugned order confirmed a larger demand by travelling beyond the quantified proposals and by resting on grounds not specified in the notice. An adjudication which exceeds the scope of the notice and introduces new grounds without notice violates the principles of natural justice.

Conclusion: The order could not be sustained as it confirmed demand beyond the show-cause notice and was therefore set aside in favour of the assessee.

Ratio Decidendi: An adjudicating authority cannot confirm a demand beyond the scope of the show-cause notice or on grounds not put to notice, as such action offends natural justice.

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