MANU/DSTX/0025/2015

Ministry : Ministry of Finance

Department/Board : Service Tax

Instructions From File No. : 137/46/2015-Service Tax

Date : 18.08.2015

To

All Principal Chief Commissioners of Central Excise
All Chief Commissioners of Central Excise/ Service Tax
Principal Directors General of Goods & Services Tax/
Systems/Central Excise Intelligence
Director General of Audit
All Principal Commissioners of Central Excise/Service Tax
All Commissioners of Central Excise/Service Tax
All Principal Commissioners/Commissioners LTU
Joint Secretary TRU-1/TRU-II/Review
Commissioner Central Excise/ Service Tax/Legal/PAC

Clarification regarding the provisions of Section 73, 76 and 78 of the Finance Act, 1994 and Section 11AC of the Central Excise Act, 1944 after amendments made vide Finance Act, 2015.

Consequent to the amendments made to section 73, 76 and 78 of the Finance Act, 1994 and section 11AC of the Central Excise Act, 1944, vide Finance Act, 2015 with effect from 14.05.2015, field formations have sought certain clarifications with regard to detections made during audit, investigation or scrutiny. Keeping in mind the need to reduce litigation as well as paperwork and compliance formalities. I am directed to convey the following clarifications.

2.0 Issuance of a Show Cause Notice (SCN)

Doubt: Does a SCN have to be issued in a case involving the extended period of limitation, where the assessee pays the tax/duty, interest and 15% penalty as prescribed?

2.1 In a case involving the extended period of limitation, if an assessee pays the service tax/central excise duty, interest and penalty equal to 15% of the tax/duty and makes a request in writing that a written SCN may not be issued to them, then in such cases the SCN can be oral and the representation (if he desires) against it also oral. In other words, an assessee can request for an informed waiver of a written SCN. The Supreme Court in the case of Commissioner of Customs, Mumbai versus Virgo Steels reported in 2002(141) E.L.T 598 (S. C.) has held that:

"14. From the ratio laid down by the Privy Council and followed by this Court in the above cited judgments, it is clear that even though a provision of law is mandatory in its operation if such provision is one which deals with the individual rights of person concerned and is for his benefit, the said person can always waive such a right.

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