The Central Board of Indirect Taxes and Customs (CBIC) notified the clarifications on holding of Pre-Show Cause Notice Consultation.
The Board has received the references from the field formations seeking clarification on who will hold pre show cause notice consultation with the assessee concerned in cases where the show cause notices are to be issued by the Audit Commissionerates in terms of of the instructions dated October 13, 2016 and Master Circular dated March 10, 2017.
In this regard, the Board directed that Master Circular had mentioned the principle of pre-show cause notice consultation enunciated. The details of the procedure where the show cause notice issuing authority and adjudicating authority are different, was not mentioned therein. However, the same had already been clarified vide Instruction no.1080/11/DLA/CC Conference/2016 dated October 13, 2016
“It may further be noted that vide Circular F.No.1049/37/2016-CX dated 29.09.2016, the Board had revised the monetary limit for adjudication of demands of duty/tax or recovery of CENVAT Credit by different adjudicating authorities. As per these changed monetary limits, cases involving duty/tax or recovery of CENVAT Credit of above Rupees fifty lakh but not exceeding Rupees two crores are to be adjudicated by the Additional Commissioner/Joint Commissioner, and cases involving duty/tax or recovery of CENVAT Credit above Rupees two crores are to be adjudicated by the Commissioner,” the Board said.
Due to the change in monetary limits of adjudication and to lend clarity on this issue, the Board clarified that “Pre show cause notice consultation with the assessee, prior to issuance of SCN in case of demands of duty is above Rupees 50 Lakhs (except for preventive/offense related SCN’s), is mandatory and shall be done by the Show Cause Notice issuing authority.”
“The instructions F.No.1080/11/DLA/CC Conference/2016/ 1208 dated 08.07.2016 stand rescinded. Further, this clarification shall have an overriding effect on all Circulars/Instructions issued on the subject to the extent that they are in conflict,” the CBIC said.
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