MINI SHOW CAUSE NOTICE NOW BEFORE PROPER SHOW CAUSE NOTICE

Pre-notice Consultation Procedures for Show Cause Notice Released

Department of Revenue Released the Procedures for Pre-notice Consultation before Issue of Show Cause Notice. This measure was provided by an amendment to Section 28(1)(a) proviso in the Finance Act, 2018 passed by Parliament.

The said proviso states “Provided that before issuing notice, the proper officer shall hold pre-notice consultation with the person chargeable with duty or interest in such manner as may be prescribed”.

The Highlights of the Consultation:

·        Notice to be issued within two months before the expiry of the last date of issue of notice.

·        Reply to be submitted within 15 days of notice failing which proper notice will be issued

·        Hearing will be within 10 days of receipt of submission by importer.

·        No adjournment allowed

·        Consultation to be concluded within 60 days of intention to issue notice.

Pre-notice Consultation Regulations, 2018

[Notification No. 29 /2018- Customs (N.T.) dated 2 April 2018]

In exercise of the powers conferred by clause (e) of sub-section (2) of section 157 read with the proviso to clause (a) of sub-section (1) of section 28 of the Customs Act, 1962 (52 of 1962), the Central Board of Indirect Taxes and Customs hereby makes the following regulations, namely: -

1. Short title and commencement.- (1) These regulations may be called the Pre-notice Consultation Regulations, 2018.

(2) They shall come into effect on the date of their publication in the Official Gazette.

2. Definitions.- In these regulations, unless the context otherwise requires,-

(a) Act” means the Customs Act, 1962 (52 of 1962);

(b) “consultation” means communication of the grounds known to the proper officer for issuance of notice to the person chargeable with duty or interest in order to elicit the response of the person and consideration of the representation of the said person;

(c) notice means a show cause notice referred to in sub-section (1) of section 28 of the Act.

3. Manner of conducting pre-notice consultation.- Pre-notice consultation shall be made in the following manner:-

(1)    Before the notice is issued, the proper officer shall inform, in writing, the person chargeable with duty or interest of the intention to issue the notice specifying the grounds known to the proper officer on which such notice is proposed to be issued and the process of pre-notice consultation shall be initiated as far as possible atleast two months before the expiry of the time limit mentioned in sub-section (3) of section 28 of the Act.

(2)    The person chargeable with duty or interest may, within fifteen days from the date of communication referred to in sub regulation (1), make his submissions in writing on the grounds so communicated:

Provided that if no response is received, from the person to whom the grounds on which notice is proposed to be issued, is received within the specified time, the proper officer shall proceed to issue the notice to the said person without any further communication:

Provided further that while making the submissions, the person chargeable with duty or interest shall clearly indicate whether he desires to be heard in person by the proper officer.

(3)    The proper officer, may if requested, hear the person within ten days of receipt of the submissions referred to in sub-regulation (2) and subject to the provisions of section 28, decide whether any notice is required to be issued or not:

Provided that no adjournment for any reason shall be granted in respect of the hearing allowed under this regulation.

(4)    Where the proper officer, after consultation, decides not to proceed with the notice with reference to the grounds communicated under sub-regulation (1), he shall, by a simple letter, intimate the same to the person concerned.

(5)    The consultation process provided in these regulations shall be concluded within sixty days from the date of communication of grounds as provided in sub-regulation (1).

(6)    Where the proposed show cause notice is in respect of a person to whom a notice on the same issue but for a different period or documents has been issued after pre-notice consultation, the proper officer may proceed to issue the show cause notice for subsequent periods without any further consultation.

[F. No. 450/49/2018 CusIV]