Show cause notice limits adjudication: liability cannot rest on unalleged hired-labour or collusion theories.

A demand under central excise could not be sustained where the show cause notice proceeded on the basis that another noticee was the manufacturer and alleged only suppression and misdeclaration, but the adjudication order relied instead on a hired labour theory and collusion not pleaded in the notice. Because the goods were manufactured and exported under Central Excise supervision, and the notice did not allege that the appellant was the manufacturer or involved in collusion, liability could not be fastened on enlarged grounds. An adjudication order cannot travel beyond the show cause notice, so the demand and recovery were set aside.

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Issues: Whether duty demand and recovery of the refund amount could be sustained against the appellant when the show cause notice described the other noticee as the manufacturer, and whether the adjudication order could proceed on a hired labour or collusion theory not alleged in the notice.

Analysis: The show cause notice proceeded on the footing that ASPL was the manufacturer of the goods and alleged only suppression and misdeclaration. The adjudicating authority, however, travelled beyond the notice by treating ASPL as hired labour and by introducing a collusion-based theory to fasten liability on the appellant. Since the goods were manufactured and exported under the supervision of the Central Excise officers, and the notice did not specifically allege that the appellant was the manufacturer or that there was collusion, the demand could not be sustained on the enlarged grounds adopted in adjudication. An order that goes beyond the show cause notice cannot be upheld against the noticee.

Conclusion: The demand and recovery against the appellant were not sustainable and the appeal was allowed.

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