Duty evasion notice slapped on MUL

By Sandeep Dikshit

NEW DELHI, JULY 7. The Excise Department has slapped a Rs. 200- crore duty evasion show-cause notice on the country's premier car-maker, Maruti Udyog Limited (MUL).

With the serving of the notice, the Excise Department is understood to have cast its net wider. It has ordered a fresh scrutiny of balance sheets of all those companies who are availing the benefit of Central Value Added Tax credit on duty paid on the purchase of inputs and capital goods.

Initially, the probe will be confined to the Delhi Commissionerate of Excise and could be extended to car manufacturers in other parts of the country.

If the charge is proved, the fine would be equal to the amount of duty evasion, plus interest on the amount from the day on which duty evasion was detected. This could be a blow to Maruti which has already incurred a net loss of Rs. 250 crores in the previous fiscal because of difficult market conditions and is on the threshold of disinvestment.

But Maruti officials have denied the charge and said they would contest it. They said the notice was served to arrest the flagging trend in excise collections.

According to an investigation by the Excise Department, the excise duty liability on finished products is met from Modvat credit available to the company on inputs and capital goods.

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