Melt 1 c. sugar in heavy skillet over low heat, stirring constantly. Heat until melted to a golden brown syrup, stirring constantly. Remove from heat. Add boiling water & stir over low heat until lumps are dissolved. Pour into measuring cup ¼ c. of caramel mixture & add enough cold water to make 1 c. of liquid.
Cream together the softened shortening & remaining sugar until fluffy. Beat in thoroughly eggs. Sift together the flour, baking powder, & 1 tsp. salt. Stir in alternately with caramel mixture. Pour into two 9" layer pans or 13"x9" oblong pan & bake 35 minutes in preheated 350°F oven.
Heat together remaining caramel mixture, cream, & butter to make the burnt sugar frosting. Beat in the powdered sugar, salt, & vanilla extract.