New Delhi: The Supreme Court has issued notice to the Centre, the Central Board of Excise & Customs (CBEC) and others on a petition filed by softdrinks major Hindustan Coca-Cola Beverage (P) Ltd against the department’s notice asking the firm pay excise duty of about Rs2.20 crore.
A Bench headed by Justice S H Kapadia, while issuing notice to the ministry of finance, the Central Board of Excise & Customs, the commissioner of Central Excise and others, also stayed the Gauhati High Court’s judgment that dismissed the softdrinks major’s plea challenging the department’s notice.
After acquiring a plant at Jorhat in Assam in November 1998, the softdrinks major had undertaken substantial expansion there, for which it claimed to have become entitled to excise exemption in accordance with a central government order of 1989.
The order said that all goods manufactured in units located in Assam and other North-Eastern states were exempt from excise duty equivalent to the amount paid by the manufacturer from the current account maintained under the Central Excise Rules, 1944.
It is entitled to duty refund from the account current under the notification, the softdrinks major said, adding that there was no need for it to first utilise the excise credit received on the purchase of inputs (called set-off) and then pay the balance in cash.
Hindustan Coca-Cola Beverage (P) Ltd (HCCBL) said that the High Court had erred in holding that the manufacturer ought to have utilised the credit available before paying duty.
HCCBL senior counsels Harish Salve and Sparsh Bhargava said that the High Court failed to appreciate that a requirement to necessarily avail of credit was brought in by a Notification in August 2003, and thus the excise order, passed in June 2003, was not valid.