Tariff Classification and Show Cause Notice Rules limit revised duty demands and bar enhancement on remand without authority.

A demand raised on one tariff classification could not be sustained under a different tariff item without a fresh show cause notice. Limitation under Rule 9(2) read with Section 11A applied to issuance of the show cause notice, not to service of the adjudication order described as the written demand. On remand, the authority could not enhance the quantified duty and penalty unless expressly authorised by the remand order. The stated result was that the revised demand, the limitation objection, and the enhancement on remand were all rejected.

---

---

Issues: (i) Whether duty demanded under one tariff item could be adjusted or confirmed under a different tariff item without a fresh show cause notice; (ii) whether, under Rule 9(2) read with Section 11A, the written demand had to be served within the limitation period; (iii) whether the authority on remand could enhance the demand and penalty.

Issue (i): Whether duty demanded under one tariff item could be adjusted or confirmed under a different tariff item without a fresh show cause notice.

Analysis: The demand had been proposed in relation to a particular tariff item, and the later adjudication sought to sustain liability under a different tariff item. A demand founded on one classification cannot be converted into a demand on another classification without proper notice for the revised basis.

Conclusion: The answer is in the negative. The demand could not be shifted to a different tariff item without a fresh notice.

Issue (ii): Whether, under Rule 9(2) read with Section 11A, the written demand had to be served within the limitation period.

Analysis: Rule 9(2) uses the expression "written demand" only after notice under Section 11A. Section 11A provides the machinery for issue of notice and determination of duty. The limitation period governs the issuance of the show cause notice, not the service of the adjudication order described as written demand.

Conclusion: The answer is in the negative. Limitation applied to the show cause notice and not to the written demand order.

Issue (iii): Whether the authority on remand could enhance the demand and penalty.

Analysis: On remand, the authority was bound by the earlier adjudication to the extent it had already crystallised the amount of duty and penalty. In the absence of authority from the remanding order, the liability could not be enlarged beyond the earlier quantified determination.

Conclusion: The answer is in the negative. Enhancement of duty and penalty on remand was impermissible.

Final Conclusion: The appeal succeeded because the revised demand on a different tariff basis, the limitation objection, and the enhancement on remand were all rejected in the assessee's favour.

Ratio Decidendi: A demand must be supported by a proper notice for the classification or basis ultimately relied upon, limitation under Section 11A governs issuance of the show cause notice, and an authority acting on remand cannot enlarge the quantified duty or penalty unless expressly authorised to do so.

---