TaxTMI 
TaxTMI 
2026 (3) TMI 974
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....uent Circular No. 1076/02/2020-Cx dated 19 November 2020 stipulating issuance of a notice in regard to a pre-show cause consultation. 3. The facts lie in a narrow compass:- The petitioner is a company, inter alia, engaged in running two non-air-conditioned rooftop restaurants at Andheri and Lower Parel in Mumbai. It is the petitioner's case that on 01 July 2012, the Government granted exemption to restaurants having air-conditioning and a licence to serve liquor vide Notification No. 25/2012-ST (at serial no. 19). Thereafter, by a further notification dated 01 March 2013 bearing No. 03/2013-ST, the earlier Notification No. 25/2012-ST (supra) was amended and the condition regarding licence to serve liquor was omitted. It is the petitioner's contention that indisputedly the petitioner's restaurants do not have air-conditioning or central heating during any period of the year. 4. It is the petitioner's case that there was a clarificatory Circular No. 173/8/2013-ST dated 07 October 2013 issued by the CBEC wherein it was clarified that services provided by non-air-conditioned or non-centrally air-heated restaurants are exempt from service tax. 5. It is on such backdrop, the pet....
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....to holding pre-show cause notice consultations. Clause 4 of the said circular reads thus:- "4. Due to the above change in monetary limits of adjudication and to lend clarity on this issue, it is hereby clarified that "Pre-show cause notice consultation with assessee, prior to issuance of SCN in case of demands of duty is above Rupees 50 Lakhs (except for preventive/ offence related SCN's), is mandatory and shall be done by the Show Cause Notice issuing authority." 8. It is therefore his submission that the circulars, which are binding on the Department, have been completely overlooked while issuing the impugned show cause notice. Mr. Raichandani submits that a similar issue had fell for consideration before this Court in a batch of writ petitions in Rochem Separation Systems (India) Pvt. Ltd. Versus The Union of India & Ors. 2025 (10) TMI 68 - Bombay High Court, wherein the coordinate Bench of this Court, considering the position in law in regard to the said circulars as well as several decisions of different High Courts, quashed and set aside similar actions on the part of the Department. He therefore submits that on this ground alone, the petition deserves to be allow....
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....s C.A could appear on or after 07.01.2021 only i.e. 7 days after the last date of issuance of SCN. Therefore, ratio of the cited case law is not applicable to the present case." 10. It is Mr. Adik's contention to the effect that once sufficient notice was issued to the petitioner by issuance of summons, hence it was not necessary for respondent no. 2 to issue a notice for a pre-show cause consultation, prior to issuing the impugned show cause notice to the petitioner. 11. On such premise, we have heard the learned counsel for the parties and perused the record. 12. At the outset, we may observe that the provisions of the Central Excise Act, 1944, stand attracted being made applicable by the provisions of the Section 83 of the CGST Act. In the present circumstances, since the issue concerns a demand of service tax, Section 37B of the Central Excise Act becomes relevant, which provides for "Instructions to Central Excise Officers", making it mandatory for such officers to observe and follow the directions of the Board. Section 37-B reads thus:- "37B. Instructions to Central Excise Officers.--The Central Board of Excise and Customs constituted under the Central Board....
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.... made thereunder, shall be deemed to have been served on the date on which the decision, order, summons or notice is tendered or delivered by post [or courier referred to in sub-section (1)] or a copy thereof is affixed in the manner provided in sub-section (1).]" 14. The CBEC in exercise of the powers conferred under Section 37-B, issued a Master Circular dated 10 March 2017, the contents of which have been noted hereinabove, providing for a mandatory requirement of a pre-show cause notice consultation. This position has been reiterated in the subsequent Circular dated 19 November 2020 (supra). Thus, there is substance in the contentions as urged on behalf of the petitioner that such legal requirements could not have been forgone. In the present case, it is quite clear that the mandate of the said circular has been completely breached, as no notice for a pre-show cause consultation was issued by Respondent No. 2 prior to the issuance of the impugned show cause notice. Clearly, in view of the mandatory nature of the circulars, a notice requiring pre-show cause consultation was an essential prerequisite. The contentions as urged on behalf of the respondents that a prior intimatio....