IMO, the problem with this approach is that, although correct in law, it does not provide any reasoning.
The starting point is that the authority's employee, the CEO, has already issued a PCN in circumstances where the law does not allow.
But they did.
So, simply saying 'it's not correct' is unlikely to win the day at the NTO stage.
I suggest you provide reasons. These might cause them to think, challenge received wisdom and give proper consideration, but if not then at least you have a template for an appeal.