SC notice to RIL on excise dept's plea
SC soughts reply from RIL on a plea by tax authorities which alleged that the Mukesh Ambani-led company evaded excise duty on a sales promotion scheme.
By PTI |
NEW DELHI: The Supreme Court has sought a reply from Reliance Industries on a plea by tax authorities which alleged that the Mukesh Ambani-led company evaded excise duty on a sales promotion scheme announced for distributors and agents of its textile brand Vimal in 1999.
A bench headed by Justice S H Kapadia issued a notice to the company on excise department's petition alleging RIL's failure to pay excise duty on the extra amount of one per cent collected as incentive on the invoice value from customers.
The department challenged the Customs Excise & Service Tax Appellate Tribunal's judgement that dismissed its appeal saying the dealers had sought help from the company to manage the scheme. The department sought the apex court's direction to decide whether the incentive of one per cent on the invoice value can be included in the value of goods for the purpose of calculating excise duty.
RIL, which had valid central excise registeration under the Central Excise Tariff Act 1985 and availed modified value-added tax (MODVAT) credit facility, had announced a one-year incentive scheme for retailers with effect from January 1, 1999. It had collected one per cent value under the head "Vimal Millennium Fortune Scheme" from its customers so as to buy gifts on their behalf, the department said.
Alleging that the company had failed to pay excise duty on such extra amount charged by it, the department had issued showcause notice asking RIL why excise duty of more than Rs 28.53 lakh between January to March 1999 and June to November 1999 should not be recovered and penalty with interest should not be imposed on it.
A bench headed by Justice S H Kapadia issued a notice to the company on excise department's petition alleging RIL's failure to pay excise duty on the extra amount of one per cent collected as incentive on the invoice value from customers.
The department challenged the Customs Excise & Service Tax Appellate Tribunal's judgement that dismissed its appeal saying the dealers had sought help from the company to manage the scheme. The department sought the apex court's direction to decide whether the incentive of one per cent on the invoice value can be included in the value of goods for the purpose of calculating excise duty.
RIL, which had valid central excise registeration under the Central Excise Tariff Act 1985 and availed modified value-added tax (MODVAT) credit facility, had announced a one-year incentive scheme for retailers with effect from January 1, 1999. It had collected one per cent value under the head "Vimal Millennium Fortune Scheme" from its customers so as to buy gifts on their behalf, the department said.
Alleging that the company had failed to pay excise duty on such extra amount charged by it, the department had issued showcause notice asking RIL why excise duty of more than Rs 28.53 lakh between January to March 1999 and June to November 1999 should not be recovered and penalty with interest should not be imposed on it.
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