Excise dept issues notices to pesticide manufacturers

MUMBAI, January 10: The Mumbai Zonal unit of the Directorate of Anti-Evasion, Central Excise, has issued Show Cause Notices (SCNs) to 38 pes...

MUMBAI, January 10: The Mumbai Zonal unit of the Directorate of Anti-Evasion, Central Excise, has issued Show Cause Notices (SCNs) to 38 pesticide manufacturing units for allegedly making wrong declarations regarding the classification of their products.

In a nationwide action, SCNs have been served on these companies for duty payable, collectively, to the tune of Rs 120 crore.

The major names that figure in the list are United Phosphorus, Ankleshwar unit (Rs 18 crore), Excel India Limited, Bhavnagar (Rs 18 crore), Ghardia Chemicals, Dombivali (Rs 11 crore), Mitsu Industries, Vapi (Rs 9.3 crore), Rallis India, Ankleshwar (Rs 8.87 crore), Searle India, Ankleshwar/Bharuch (Rs 6.25 crore), Hoechst (Rs 1.6 crore) and Cynamid (Rs 1.5 crore). As per the budget announcements in July 1996, excise duty on concentrated technical grade pesticides was 18 per cent, while that for formulations was 10 per cent. The companies had been allegedly declaring technical grade pesticides as ready-to-use formulations, thus taking advantage of an eight percent difference in the duty tariffs of the two categories of the product. Besides, in March 1997, the duty on formulations was further reduced to eight per cent.

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The alleged evasion is now calculated on the differential. The department has issued SCNs in respect of the differential for the three months, from July ’96 to September ’96, and the various excise commissionerates are enforcing the duty payable on subsequent clearances.

In fact, to enforce the 18 per cent duty on current clearances, seizures have been effected in some commissionerates. Goods worth over Rs six crore were seized from the unit of one Meghmani Organics in Ahmedabad, to make the manufacturers fall in line.