TMI Blog2019 (5) TMI 669X X X X Extracts X X X X X X X X Extracts X X X X ..... A pointed question was posed by the Court to Mr.Harpreet Singh whether prior to issuing the impugned SCN, a decision 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. 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 instruc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Tribunal ( CESTAT ) Principal Bench in Acquired Services Pvt. Ltd. v. Commissioner of Service Tax (2014) 36 STR 1148 (TRI-10). The CESTAT held that the services provided by AIPL to overseas entities did not constitute either business auxilliary serv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ioner as ₹ 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 pre-show cause notice consultation was mandatory in cases involving demand of duty above ₹ 50 Lakhs. A reminder was again sent by the Petitioner on 13th November, 2018. When no response was received, the pres ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llow 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 points on which agreement has been reached should not be contested any further by either party. 11. The above recommendations were accepted and the CBEC issued t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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/clarification from the Assessee regarding alleged evasion of service tax. In the context of the present case, in relation to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otice 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 regard is well-settled. Illustratively a reference may be made to the decision in State of T ..... X X X X Extracts X X X X X X X X Extracts X X X X
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