Now, Cadbury gets Rs5,700-crore tax notice over ‘ghost’ plant

India's tax authorities have slapped confectioner Cadbury with a hefty bill of Rs5,700 crore ($92 million) after the company was accused of claiming excise benefits on a "phantom" factory.

The tax authorities said Cadbury, owned by US-based food and beverages giant Mondelez International after its takeover by Kraft, provided inaccurate information when claiming an excise tax exemption linked to a factory in the northern Indian state of Himachal Pradesh.

The directorate general of central excise Intelligence is now demanding this amount from the company in unpaid taxes plus interest.

The chocolate maker says it completed an expansion of the factory in 2009, while the authorities claimed the expansion was portrayed as a new facility, eligible for tax exemption.

Many Indian media outlets reported rather misleadingly the company sought tax benefits for a "phantom" factory that officially did not exist.

Indian tax officials launched a probe against the company in 2011 (See: India launches tax probe into Kraft's $19.6-bn Cadbury acquisition), and issued a show-cause notice to the firm demanding about Rs2,500 crore against excise duty evasion. The company has contested the demand.

Meanwhile, Cadbury denied any wrongdoing in the case and said it will challenge the decision in court.

"The issue is one of interpretation, and it will be inappropriate on our part to discuss the details externally at this time since the matter is sub-judice and in the legal domain," the company said in a statement.

"The company is examining the order and will challenge the same in appeal, as we firmly believe that we have correctly claimed exemption of excise duty. We also firmly believe that our executives acted in good faith and within the law in the decision to claim excise benefit in respect of our plant."