The Central Excise Department today said its has slapped a show-cause notice on Philips Electronics for allegedly evading excise duty to the tune of Rs 22 crore.
Central Excise Commissioner (Chandigarh) H K Thakur also said two-wheeler major TVS Motors, which has a plant in Nalagarh in Himachal Pradesh, has not paid National Calamity Contingent Duty (NCCD) amounting to Rs 10 crore, thus evading tax payment.
Confirming the company getting a show-cause notice, a spokesperson of Philips Electronics, however, said, "Prima facie the issue raised is debatable and not a case of any evasion of duty/taxes."
"In the spirit of being transparent and open about our transactions, we will fully co-operate with the tax authorities and will revert with our response within the 30 days period as specified in the notice," the spokesperson added.
Chennai-based TVS Motors did not respond to queries.
"We have slapped a show-cause notice on Philips Electronics for evading duty of Rs 22 crore by wrongly claiming tax credit," Thakur told reporters here.
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The department in its investigation found that the company had utilised service tax credit against the excise duty in contravention of the central excise law.
"The company has used the service tax credit arising out of trading activities against the payment of excise duty for manufacturing activity which is not permissible under the law," the Commissioner said.
Philips Electronics has a manufacturing facility in Mohali.
He said that the company had already deposited tax amounting to Rs 4 crore with the department.
Besides, the department has also found TVS Motor has not paid National Calamity Contingent Duty (NCCD) amounting to Rs 10 crore. "We found in our investigation that the company has not been paying NCCD for the last two years, thus evading tax payment," Thakur said.
He said that the companies enjoying area-based exemptions in Himachal Pradesh are required to pay NCCD (1 per cent on value basis).
The Centre in 2001 has made mandatory for companies engaged in the business of two-wheelers, telephone, motor vehicle, filament yarn, tobacco and petroleum products, to pay NCCD.
As part of its anti-evasion measures, the department has discovered tax evasion of Rs 84 crore in the region comprising Punjab, HP, Jammu and Kashmir and Chandigarh, during period of April-September this fiscal.