The Central Board of Indirect Taxes and Customs (CBIC) has declared the decree on the issuance of Show Cause Notice ( SCNs) and adjudication method in the pre GST system.
The Audit has figured out that Draft SCNs have been found unsettled for issuance. There is an immoderate delay in adjudication. Its orders have not been declared under the certain period of later accomplishment of personal hearings. Periodical review of call furniture has not been completed. But in specific cases, the files/records concerning adjudication have not been built prior to the Audit Party.
As per the introduction of GST law, Board has frequently expressed its aim and resolve that it is of most crucial to dispose of the legacy matters belonging to Central Excise and Service Tax system as fast as possible. On this concern, the Board has notified instructions from time to time-related to the disposal of legacy difficulties like the issuance of show cause notice, adjudication of SCNs, the review of call bookcases, etc. But in terms of observations of Audit, Board aspires that the directions must strictly stick to. Once the inquiry is done / analysis is completed and draft show cause notice is completed, SCN must be declared without any delay, without waiting for the last date of issuance of SCN.
Notice is invited to sub-section (11) of section 11A OF Central Excise Act, 1944 read with sub-section (4B) of section 73 of the Finance Act, 1994 which specify that SCNs declared in normal cases should be fixed under 6 months in the term of Central Excise (CE) & Service Tax (ST), and SCNs announced indulging extended time should be decided under two years combining to CE and one year relating to ST where it is likely to do so. Board ask that the time limits specified in the applicable act must be stick to.
“It has been pointed out that in contravention to the Board’s D.O letter dated March 04, 1992, there are instances where prior approval is not taken from the Commissioner before transferring the case to Callbook. In this regard, the instructions issued by Board vide above mentioned D.O letter dated March 04, 1992, are reiterated. The cases must be transferred to the call book only with the approval of the Commissioner as stipulated earlier. A comprehensive one-time review of all cases may also be carried out in this regard and necessary action taken,the CBIC notified.”
“In this regard reference is invited to Circular dated April 29, 1988, issued from F.No. 240/15/88-CX.7 wherein it has been communicated that the files leading to the passing of adjudication/appellate orders need not be made available to the audit parties of the Accountant General. It may be seen that the above-mentioned Circular was issued keeping in view the basic premise that audit parties cannot question the decision taken by the judicial or quasi-judicial authority. The said circular thus needs to be read in a proper context that sharing of records with audit parties does not interfere with the judicial/quasi-judicial proceedings. The audit parties may require the production of the records for ensuring that due procedure is followed or otherwise. Therefore, the request of the Audit for production of records must be acceded to, the CBIC added.”
