Mumbai, April 11: Tata Chemicals ' the chemicals, fertilisers and food additives manufacturer ' has been slapped with an excise demand of Rs 557 crore by the Central Excise Haldia Commissionerate.
The order, which covers the period from September 1, 1999 to September 30, 2005, demands excise duty of Rs 278.35 crore and a penalty for a similar amount.
Tata Chemicals isn’t fazed by the excise demand and plans to contest the issue. It is confident that its stand will be upheld. TCL’s confidence stems from the legal advice that it has received and it does not expect any liability on this account.
In a notice issued to stock exchanges today, Tata Chemicals said the excise department had claimed that the company was using neutral filter cake (NFC) and spent sulphuric acid (SSA), which were generated during the manufacture of an excisable product sodium tripolyphosphate (STPP), as an input for the manufacture of non-excisable products (di ammonium phosphate and single super phosphate). Tata Chemicals denied the excise department’s assertion.
“The company produces excisable products that include sodium tripolyphosphate and sulphonic acid and non-excisable products that include di ammonium phosphate (DAP) and single super phosphate (SSP). During the production of excisable products, waste is generated namely NFC and SSA. The manufacturing processes as well as raw materials used for excisable & non-excisable products are totally different,” it explained.
Tata Chemicals contended that the order passed by the commissioner was “unsustainable in law and similar kind of order issued have been settled by various judicial pronouncements in favour of the manufacturers/companies”.
The company posted a net profit of Rs 98 crore in the third quarter of this year, up from Rs 97 crore in the corresponding period last year on an income (net of excise) of Rs 1,258 crore.
TCL was in the news when its subsidiary signed definitive agreements with the selling shareholders, that included Wayland Investments Ltd and Barclays Bank Ltd, for the acquisition of a 63.5-per cent stake in the UK-based Brunner Mond Group UK (BM), for a total consideration of about Rs 508 crore.
The Brunner Mond Group manufactures soda ash and sodium bicarbonate, and has manufacturing locations in three countries ' the UK, the Netherlands and Kenya. The acquisition made TCL one of the leading producers of soda ash in the world. It also resulted in making TCL as one of the most diversified companies with manufacturing facilities in three continents and markets spread in many countries even as a presence was also carved in the low-cost natural soda ash segment.