Excise dept claims Rs 557 crore from Tata Chemicals
By Our Corporate Bureau | 11 Apr 2006
The central excise department has raised a duty demand of Rs 278.35 crore and penalty of an equal amount from Tata Chemicals. The commissioner of central excise of Kolkata has passed the order against the company.
The claim relates to the consumption of excisable products in the manufacturing of non-excisable products. The company uses neutral feed cake and spent sulphuric acid, which are by-products generated during the manufacture of an excisable product called sodium tri-poly phosphate or STPP, for the manufacture of di-ammonium phosphate (DAP) and single super phosphate (SSP) which are non-excisable products.
The excise department claims that the company should pay excise duty on neutral feed cake and spent sulphuric acid which are produced while manufacturing an excisable product. The company maintains that the by-products are not excisable as they are used in the manufacture of non-excisable products and the manufacturing processes for excisable and non-excisable products are different.
Tata Chemicals said it is of the view that the order passed by the commissioner is not sustainable under law and similar kind of issues has been settled by various judicial pronouncements in favour of the manufacturers.
The company also said it would contest the order before the appropriate forum and has also been legally advised that its stand would be upheld.