The Chennai Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that the show cause notice (SCN) is the foundation without which no proceedings shall commence.
The Bench of P. Dinesha (Judicial Member) and Vasa Seshagiri Rao (Technical Member) has observed that the non-issuance of SCN is a serious issue; the same is required to be issued when the Revenue does not propose to entertain the refund claim of the claimant. It’s a different matter altogether if the application for refund is accepted and refund is granted, in which event, no such SCN is required.
The appellant/assessee has contended that when the application for refund was filed, the revenue ought to have issued SCN, which is the condition precedent, in conformity with the principles of natural justice. It is the right of every claimant to know the mind of the department, when an application for refund is filed, the intention of the department would be shown in the show cause notice if the department does not accept the refund claim made in the application.
The tribunal noted that SCN is the foundation without which no proceedings shall commence. Calling for a personal hearing, as indicated by the Adjudicating Authority would not take the place of SCN nor would it cure the blunder of non- issuance of the same and nor would it undo the blunder since personal hearing which follows the SCN, is the second stage of meeting with the principles of natural justice.
Hence, the tribunal held that the Adjudicating Authority has been very casual in taking very lightly the request of the applicant for non- issuance of SCN and dismissing the same in a very casual manner, by seriously prejudicing the principles of Natural Justice.
The tribunal held that any order that follows such an incurable irregularity thereafter would only be a castle in the air, lacking seriously the very foundation and hence, the same is to be held as unsustainable, unenforceable and contrary to the established principles of law and arbitrary.
Case Details
Case Title: M/s.Rasi Seeds Private Limited Versus The Commissioner of GST & Central Excise
Case No.: Service Tax Appeal No. 41773 of 2014
Date: 01.01.2025
Counsel For Appellant: Radhika Chandrasekar
Counsel For Respondent: Harendra Singh Pal
