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TMI Blog2019 (5) TMI 669X X X X Extracts X X X X X X X X Extracts X X X X ..... rior to issuing the impugned show cause notice (SCN) dated 4th September 2018, the Office of the Principal Commissioner, Central Excise, Service Tax and Central Tax Commissionerate, Delhi South (the Respondent herein) ought to have held a pre-notice consultation with the Petitioner in terms of para 5.0 of 'Master Circular' dated 10th March, 2017 issued by the Central Board of Excise and Customs ('CBEC')? 2. The facts in brief are that the Petitioner provides, inter alia, computer data processing software, which is used by travel agents and ticket booking entities in the Airline industry. The question whether the services provided by the Petitioner is amenable to service tax engaged the attention of the Customs Excise Services Tax Appellate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gned SCN was issued by the Respondent to the Petitioner, inter alia, alleging that tax was not paid on taxable services rendered by the Petitioner. The SCN specified the quantum of tax that was required to be paid by the Petitioner as Rs. 99,45,64,411/-. The Petitioner was also asked to show cause why penalty under Section 76 of the Finance Act, 1994 read with Section 174 of the Central Goods & Services Tax Act, 2017 (CGST Act) should not be levied, in addition to the recovery of interest under Section 75 of the Finance Act, 1994. 6. On 3rd October 2018, the Petitioner drew the attention of the Respondent to the Master Circular dated 10th March, 2017 read with an instruction dated 21st December, 2015 issued by the CBEC in terms of which a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wed in proper spirit, would lead to elimination of a large number disputes leaving only a few contentious matters in which mutual agreement is not reached. Such disputes would follow other legal channels." 10. Further, the TARC was of the view that the tax officers should not be allowed to resort to coercive actions for recoveries during the consultation process. The TARC recommended that only those officers competent to issue notices should engage in such consulation; they should adopt 'an open and receptive attitude and give full consideration to tax payer's points of view first before formulating their own opinion.' This exercise was to narrowed down the issues and confine the notice only 'in respect of unreserved issues'. Further the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... what is urged before the Court by the Respondent is that since the SCN was preceded by a search that was conducted in the business premises of the Petitioner, and the Petitioner also rendered itself liable for penal action 'for suppression of facts and contravention of various statutory provisions with intent to evade payment of due service tax' and other incidental levies, the SCN partakes of the character of an 'offence related' SCN and therefore falls within the exceptions carved out under para 5.0 of the Master Circular. 14. The above submission runs contrary to the very object of para 5.0 which is to narrow down the scope of the dispute by engaging the Assessee on specific areas where the Respondent may require information/clarificat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion was taken by the Respondent in the light of para 5.0 of the Master Circular not to undertake the pre-notice consultation. After going through the notes in file, Mr. Harpreet Singh stated that there was no noting in the file to that effect. In other words, it appears that the Respondent completely ignored the Master Circular before proceeding to issue the impugned SCN. 16. The mandatory character of the Master Circular can be traced to Section 83 of the Finance Act, 1994 which makes Section 37 B of the Central Excise Act, 1944 applicable in relation to service tax. In terms Section 37 B of the Central Excise Act, 1944 instructions issued by the CBEC would be binding on the officers of the Department. 17. The legal position in this reg ..... X X X X Extracts X X X X X X X X Extracts X X X X
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