Show-cause notice requirement clarified: brief voluntary payment letter may precede formal show-cause; assistant collector adjudicates. A departmental letter stating reasons and allowing a short voluntary payment period may precede formal show-cause action for disallowing Modvat credit; Assistant Collectors will decide show-cause notices unless evasion of duty is involved, in which case penal provisions must be invoked and the Collector will adjudicate. For imposing penalties under Rule 173Q, the value of inputs for which credit was wrongly availed must be taken into account, since such inputs are to be treated as manufactured by the receiving factory under Rule 57F(ii).