FIR against Cadbury’s Baddi unit officials, others for fraud

Ambika Sharma

Tribune News Service

Solan, March 18

The Central Bureau of Investigation (CBI) has filed a case of criminal conspiracy and cheating under Sections 120-B and 420 of the IPC against two officials of the then Central Excise Department, Baddi, seven company officials, two consultants as well as against M/s Cadbury India Ltd now M/s Mondelez Foods Pvt Ltd for fraudulently claiming excise benefits worth Rs 241 crore between 2009 and 2011 for a ghost unit in the Baddi industrial area.

An inquiry was conducted by the CBI, Anti-Corruption Bureau, Shimla, on the allegation that Mondelez Foods Pvt Ltd, formerly known as Cadbury India Ltd, has paid bribes, misrepresented records to fraudulently avail area-based exemption benefits like Central Excise and Income Tax in Baddi for which they were not eligible.

‘Excise benefits worth Rs241 cr claimed’

• Had ‘fraudulently claimed excise benefits worth Rs241 crore between 2009 and 2011 for a ghost unit in Baddi’
• An inquiry was conducted by the CBI on the allegation that Mondelez Foods Pvt Ltd, formerly known as Cadbury India Ltd, paid bribes, misrepresented records to fraudulently avail area-based exemption benefits for which they were not eligible

Some members of the executive board of the company along with key managers collectively manipulated records, engaged intermediaries to route bribes and cover up evidence that had surfaced during an internal investigation. The inquiry revealed that the company had started commercial production from May 19, 2005, from Sandholi village in Baddi. In 2007, they decided to expand their production by creating a unit for ‘5 Star’ and ‘Gems’ as Unit-II on land acquired from M/s Barmalt in Baddi to avail tax exemptions for additional 10 years.

According to the FIR, the company decided to expand the production capacity in its existing unit rather than setting up a separate unit and availed exemption from May 19, 2005, which was the date of commercial production of its first unit. The company applied for amalgamation of its two units before the director of industries on January 22, 2007 and this merger was permitted on March 7, 2008.

They, however, informed the assistant commissioner of Central Excise, Shimla Division, that their new factory had commenced commercial production and they would avail Excise Duty exemption from June 29, 2009.

The company’s unit-II did not fulfil the laid conditions for availing area-specific tax exemptions. In order to avail the exemption, the factory should have been incorporated before the cut-off date of March 31, 2010, but it had applied for a factory licence on March 29, 2010 and it was issued on July 28, 2010.

The factory officials connived with the officials of central excise to prove that unit-II was eligible for tax exemptions where various rules were also flouted.

The matter was also investigated by the Director General of Central Excise Intelligence who rejected the factory’s claim and imposed a penalty of Rs 241 crore for wrongful claim of excise benefits.

Those booked by the CBI include the then superintendent, Central Excise (CE), Baddi, Nirmal Singh, the then inspector CE, Jaspreet Kaur, Manager, Human Resource (HR) Bhawna Dogra, the then assistant manager (HR) Subhash Sharma, Finance Manager Varun Ramanan, the then Factory Manager Sanjay Karup, the then Vice-President (Finance and Compliance) Vikram Arora, the then Director (Finance) Rajesh Garg, the then Director (supply chain) Jaiboy Phillips, two consultants Sumit Sharma and Deepak Chandel as well as the company.