Show cause notice limits adjudication: new classification disputes cannot be introduced without factual foundation.

An adjudicating authority is bound by the scope of the show cause notice and cannot decide a matter on a classification issue not alleged in it. Where the notice challenged only denial of exemption under the relevant notifications and did not dispute classification, the dispute remained confined to exemption. The authority could not travel beyond the notice or rely on a new classification foundation absent from the notice and appeal grounds. The classification issue was therefore not available at that stage, and the order was unsustainable to the extent it exceeded the notice. The departmental appeal failed, leaving the assessee's relief undisturbed.

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Issues: Whether the adjudicating authority could go beyond the scope of the show cause notice and decide the matter on a classification issue not put in dispute.

Analysis: The notice proposed only denial of exemption under the relevant notifications and did not allege wrong classification of the goods. The dispute before the appellate authority therefore centred on exemption, not classification. An adjudicating authority is bound by the terms of the notice and cannot travel outside it to decide a new issue, especially where the relevant factual foundation is absent from the notice and the grounds of appeal.

Conclusion: The classification issue could not be raised or relied upon at that stage, and the order was unsustainable to the extent it went beyond the show cause notice. The appeal was dismissed.

Final Conclusion: The departmental appeal failed because the adjudication had exceeded the jurisdiction of the show cause notice, leaving the assessee's relief undisturbed.

Ratio Decidendi: An adjudicating authority cannot travel beyond the scope of the show cause notice, and a new classification dispute cannot be introduced where the notice and appeal do not lay its factual foundation.

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