Will contest Rs570-crtax demand over Baddi unit: Cadbury
Sanjeev Sharma
Tribune News Service
New Delhi, April 6
Mondelez India (formerly Cadbury) today said it will appeal against the order of the excise department to levy a tax demand of Rs 570 crore and maintained that it was right in claiming exemption for its Baddi plant in Himachal Pradesh.
Cadbury India Limited, a subsidiary of Mondelez International Inc, had changed its name to Mondelez India Foods Limited. The name comes from “monde” for world and “delez” for delicious. The change in name of Cadbury was in line with the gradual changeover of the name of all subsidiaries of Mondelez International globally. It manufactures well-known chocolate brands such as Cadbury Dairy Milk, 5 Star, Gems, Bournville, Perk, Celebrations, Choclairs, Halls, Bournvita, Tang and Oreo.
A Mondelez spokesperson said in a statement: “The company is examining the Commissioner’s 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 in Baddi”.
Mondelez added: “As a company, we promote a compliant and ethical corporate culture which includes adhering to all laws and regulations of the country we work in”.
The chocolate MNC said the issue related to the applicability of excise exemption in respect of Unit II of the Baddi plant, which has been manufacturing products since 2009. “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”, Mondelez added.
The excise department had raised a demand of over Rs 570 crore against Cadbury India for allegedly evading excise duty by fraudulently taking exemption for one of its factories in Baddi.
The Directorate General of Central Excise Intelligence (DGCEI) had in 2011 initiated a probe against Cadbury India for allegedly misusing “area-based exemption” for its new unit in Baddi in Himachal Pradesh even before it came into existence.
The DGCEI had slapped a show-cause notice on the firm demanding about Rs 250 crore for excise duty evasion, they said.
The demand was contested and the central excise office of Chandigarh had late last month issued an assessment-cum-demand notice to Cadbury India (now Mondelez India Foods) upholding the demands raised by the DGCEI. It has demanded from the firm Rs 574 crore towards alleged excise duty evasion.
