Show Cause Notices to EOUs – Don’t bother the Board!
CBEC had vide Circular No.122/95-Cus dated 28.11.95 instructed that Board had to be informed before issue of Show Cause Notices to EOUs on matters involving interpretations of statutory provisions or the policy provisions or the scope of notifications, demi officially.
Later by Letter F. No. 307/14/2000-FTT, dated 2-8-2002, Board observed that
“after receipt of Audit objection, protective Demand-Cum-Show cause notices have not been issued to the units functioning under EOU/EPZ/EHTP/STP schemes. In some cases, the grounds for not issuing Demand-Cum-Show cause notices are stated to be Board’s Circular No. 122/95.”.
So Board reviewed the instructions and directed that
it is reiterated that on receipt of the Audit objection, Demand-Cum-Show cause notice should be issued promptly in all cases, that is to say even in cases where the Audit’s point of view is not found agreeable or the matter involves interpretation of provisions and scope of exemption notification, etc. This will help prevent demands getting time-barred.
Now the Board has again reviewed the position and observed that even routine matters involving interpretation of statutory provisions or the policy provisions or the scope of notification are being referred to the Board and issuance of Show Cause Notices are being deferred for want of clarification on these issues. This has resulted in various Commissionerates making references to the Board on frivolous issues about the dispute not being adjudicated in timely manner. The field formations are required and empowered to interpret statutory provisions or the policy provisions or the scope of notification in their due discharge of official duties including enforcement of law.
So now Board wants only cases involving divergence of practice or change in the practice or existing system of assessment to be referred to the Board Demi-officially by the Chief Commissioner / Director General only.
In any case, Board is not all that famous for clarity. Our Guest Column now raises an important query as to what is the education cess payable by the EOUs. Will Board clarify this or will the Commissioners?
CBEC Circular No. 4/2005 dated 31.1.2005