Modvat credit denial cannot rest on grounds beyond the show cause notice; later invoice objections were rejected.

Modvat credit could not be denied on grounds beyond those stated in the show cause notice, and the Revenue could not expand the notice at the appellate stage to rely on invoice defects not originally alleged. The notice was limited to the claim that the dealer was unregistered, while the later attempt to invoke missing invoice particulars under subsequent notifications and a Board circular was impermissible. The circular also supported a lenient approach where the dealer was later registered and the invoices pre-dated the relevant registration change. The order restoring credit was therefore upheld.

---

---

Issues: Whether Modvat credit could be denied on the ground that invoices were issued by an unregistered dealer and whether the Revenue could enlarge the show cause notice to challenge the invoices on additional grounds.

Analysis: The denial of credit was founded in the notice only on the allegation that the dealer was not registered. The Revenue sought to go beyond that limited allegation by contending that the invoices were invalid because they did not contain all particulars required by later notifications and the Board circular. A ground not stated in the notice cannot be expanded at the appellate stage to sustain denial of credit on a wider basis. The accepted position under the circular also supported leniency where the dealer was subsequently registered, and the invoices had been issued before the relevant change in the registration requirement.

Conclusion: The challenge to Modvat credit on the additional grounds failed, and the order restoring the credit was upheld.

---