CBIC issues clarification on issuance of pre-show cause notice under Excise and Service Tax laws

CBIC vide Circular No. 1079/03/2021-CX dated 11 November 2021 has clarified that the requirement for issuance of pre-Show Cause Notice consultation is case specific rather than being formation specific. Earlier, vide a Board's instruction, a concept of pre-show cause notice consultation in Excise and Service Tax was introduced wherein it had been clarified that pre-show cause notice consultation with the Principal Commissioner and Commissioner will be mandatory prior to issue of Show Cause Notice ('SCN') in the case of demand of duty above Rs. 50 Lakhs. Further, vide Circular No.1076/02/2020-CX dated 19 November 2020, it was clarified that pre-SCN consultation with assessee, prior to issuance of SCN in case of demand of duty is above Rs.50 Lakhs shall be mandatory and would be required to be adhered by the authority issuing SCN.

In connection thereto, the DGGI had sought clarification of relevance of aforementioned Circulars and instructions for DGGI formations. In respect thereto, it has been clarified that pre-SCN consultation shall not be mandatory for those cases booked under the Central Excise Act or under Finance Act for recovery of duties or taxes not levied or paid or short levied or short paid or erroneously refunded by reason of fraud, collusion, wilful mis-statement, suppression of facts, contravention of any specified provision.

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The information provided in this update is intended for informational purposes only and does not constitute legal opinion or advice. Readers are requested to seek formal legal advice prior to acting upon any of the information provided herein. This update is not intended to address the circumstances of any particular individual or corporate body. There can be no assurance that the judicial/ quasi judicial authorities may not take a position contrary to the views mentioned hereinrra quis.