The Central Board of Indirect Taxes and Customs (CBIC) has issued clarifications on holding of Pre-Show Cause Notice Consultation in regard to Central Excise duty vide Circular No. 1076/02/2020-CX dated 19th November,2020.
The circular stated that 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 the instructions dated 13.10.2016 and Master Circular dated 10.03.2017.
The clarification states 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.
It has now been clarified vide Circular No. 1076/02/2020-CX dated 19th November,2020 that in view of change in monetary limits of adjudication 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”.
It may be noted here that with issuance of above Circular, the instructions F.No.1080/11/DLA/CC Conference/2016/ 1208 dated 08.07.2016 stand rescinded.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.
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Frah Saeed is a law graduate specializing in the core field of indirect taxes and is the Co-founder of taxwallah.com. She has authored many publications on GST and is into full-time consultancy on GST to big corporates. She as a part of taxwallah.com heads a team comprising of Chartered Accountants and Advocates and plays a key role in our mission to disseminate GST knowledge to all.
