Excise dept detects errors in Tata Chem's books

Central Excise officials from Rajkot investigated Tata Chemicals' (TCL) Mithapur-based works.

The company, engaged in manufacturing soda-ash and salt, wrongly availed the central excise value added tax (CENVAT) credit worth Rs 23 crore on the raw materials used in manufacturing of end products.

"The company purchased pet-coke used in producing and manufacturing process of soda ash and salt and had availed CENVAT credit on the same. According to the common inputs norms for excisable and exempted products, if any company avails CENVAT credit to produce exempted products, it has to return the availed credit," said Ashok Mahida, additional commissioner.

This apart the company has to maintain separate account if it is using CENVAT credit availed product as common input or raw material.

Soda ash is an excisable product whereas salt is an exempted product, therefore it's mandatory for the company to maintain separate accounts which it failed to, said Mahida.

In case if company fails to maintain separate book of accounts, it has to pay 10 per central excise taxes on the value of the exempted goods cleared from company's premises. In case of TCL, the company is liable to pay such dues, said Bhaskar Nair, assistant commissioner.

"During the interrogation, officials recovered tax evasion of Rs 21 crore which the company will have to pay once we issue show cause notice to them," added Nair.

Soda-ash being an excisable product cannot be used without paying excise duty, henceforth tax evasion worth Rs 1.90 crore has been detected for last five years, said J P Vaidya, superintendent.

However, the officials are in process to issue showcause notice to TCL, for paying due taxes of Rs 23 crore availed wrongly vide CENVAT credit by the company, said Vaidya.