10 May 2019
Delhi HC quashes proceedings since Pre-Notice Consultation was mandatory for Demands above Rs. 50 Lakhs
AMADEUS INDIA PVT. LTD. versus PRINCIPAL COMMISSIONER, CENTRAL EXCISE, SERVICE TAX AND CENTRAL TAX COMMISSIONERATE
A two-judge bench of the Delhi High Court, while annulling the Service Tax proceedings, held that since the demand is above Rs. 50 lakhs, a pre-notice consultation was mandatory as per the Master Circular issued by the Central Board of Excise and Customs (CBEC). The Petitioner provides computer data processing software, which is used by travel agents and ticket booking entities in the Airline industry. In consequent to a search conducted by the Anti-evasion Unit of the Service Tax Commisionerate, the department said that the said services are subject to Service Tax. A show cause notice was issued by the department alleging that the tax was not paid on taxable services rendered by the Petitioner.
The petitioner claimed that as per a Master Circular issued by the CBEC on 10th March, 2017, a pre-show cause notice consultation was mandatory in cases involving demand of duty above Rs. 50 Lakhs.
A reminder was again sent by the Petitioner on 13th November, 2018. When no response was received, the petitioner approached the High Court for relief.
The bench comprising of Justice S Muralidhar and Justice Prateek Jalan found that it was necessary in terms of para 5.0 of the Master Circular for the Respondent to have engaged with the Petitioner in a pre SCN consultation, particularly, since in the considered view of the Court neither of the exceptions specified in para 5.0 were attracted.