Rejection of value by Central Excise Officer and its determination thereon [Rule 4] :

(a) Central Excise Officer empowered to verify the value adopted by the service provider: The Central Excise Officer shall have the power to satisfy himself as to the accuracy of any information furnished or document presented for valuation. In other words, where there are adequate reasons warranting verification of the value adopted by the service provider for payment of service tax, rule 4 specifically enables verification of records in such cases. The provisions contained in rule 3 shall not restrict or put to question such power of the Central Excise Officer.

(b) Issue of show cause notice (SCN): A show cause notice (SCN) shall be issued to the service provider, if the Central Excise Officer is satisfied that the value determined by such service provider is not in accordance with the provisions of the Act or these rules. Such show cause notice will specify the value of taxable service fixed by the Central Excise officer.

(c) Provision of opportunity of being heard and determination of value of taxable service: The Central Excise Officer shall provide a reasonable opportunity of being heard, to the service provider. Thereafter, he shall determine the value of such taxable service for the purpose of charging service tax in accordance with the provisions of the Act and these rules.