In Python 3.3+:
from subprocess import STDOUT, check_output
output = check_output(cmd, stderr=STDOUT, timeout=seconds)
output is a byte string that contains command’s merged stdout, stderr data.
check_output raises CalledProcessError on non-zero exit status as specified in the question’s text unlike proc.communicate() method.
I’ve removed shell=True because it is often used unnecessarily. You can always add it back if cmd indeed requires it. If you add shell=True i.e., if the child process spawns its own descendants; check_output() can return much later than the timeout indicates, see Subprocess timeout failure.
The timeout feature is available on Python 2.x via the subprocess32 backport of the 3.2+ subprocess module.