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2022 (5) TMI 1399 - HC - Service TaxValidity of SCN and audit notes issued - mandatory pre-show cause notice contemplated under the Master Circular No.1053/02/2017 dated 10.03.2017 not issued - principles of natural justice - HELD THAT:- The contention regarding absence of DIN raised by the petitioner is not significant and the learned counsel for the petitioner did not persist with the said argument and rightfully so. The respondents have pointed out that audit notes have been issued with the DIN, but containing an extra digit by a mistake. On a perusal of the audit notes issued as Ext.P1 and Ext.P2, it is noticed that the presence of DIN in the said documents cannot be disputed, but by an inadvertent mistake, an additional digit was erroneously added to the said DIN. The said extra digit does not ipso facto make the document null and void on the ground of absence of DIN. By master circular No.1053/02/2017 dated 10.03.2017, issued by the Central Board of Excise and Customs, it is mandatory to issue a pre-show cause notice for consultation, prior to issue of a show cause notice, in cases involving demands of duty above Rs.50,00,000/- - the pre-show cause notice consultation is made mandatory from 21.12.2015 onwards, which is regarded as an important step towards trade facilitation and promoting voluntary compliance and also to reduce the necessity of issuing show cause notices. A master circular issued by the department is binding upon its officers. The contention of the respondents, that the requirement of consultation contemplated therein is not binding upon Department as it is not a statutory requirement, cannot be countenanced. A circular issued by the department is binding upon the department and its officers. It is trite law that circulars are binding upon the department but not on the assessee or Courts. The issuance of Ext.P7 show cause notice without following the mandatory requirement of pre-show cause consultation is arbitrary and against the circulars - Petition allowed.
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