Maruti Udyog has paid Rs 20 crore to the Central Excise as pre-deposit against its appeal for stay in connection with the Rs 49.95-crore excise violation case.
According to sources in the revenue department, the money was deposited by Maruti Udyog on Wednesday. The last date for deposit of the money according to a Delhi High Court ruling was July 31.
In the case, which was adjudicated in December 1993, the Adjudicating Authority (excise) had alleged that Maruti Udyog had indulged in fraudulent use of Modvat amounting to excise duty evasion.
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In response, Maruti had filed for an appeal for stay in the Central Excise and Gold Control Appellate Tribunal (Cegat).
Cegat, in its ruling in 1996-end, had directed Maruti Udyog to deposit Rs 20 crore with the department before its appeal for stay could be taken up for hearing.
Subsequently, Maruti filed for an exparte stay in the Delhi High Court. However, the court had confirmed Cegat's decision and had fixed July 31 as the last date for the payment of the pre-deposit.
The case against Maruti Udyog involves its joint venture partner Bharat Seats which has also been accused of excise violations by the department.
The Adjudicating Authority had ruled that Bharat Seats had indulged in excise violations to the tune of Rs 25 crore along with a penalty of Rs 5 crore. According to sources, the company has already obtained a stay from the courts.
According to government sources, Maruti Udyog had been endorsing gate passes (similar to invoices) for seats parts which was not actually received by it but directly shifted to Bharat Seat located in the same premises. Hence, Maruti was able to get Modvat credit on the basis of these passes though it was not physically receiving the goods in its factory.
Sources also reveal that these part seats are exempted from excise duty payments if consumed captively according to the excise notification number 80/90. Hence, duty was also not paid on these part seats.
Complete seatings were also exempted from excise duty payments through a second notification. However, Bharat Seats duty reliefs on these parts led to serious violations to the tune of Rs 31.5 crore.
The case against Maruti Udyog involves its joint venture partner Bharat Seats which has also been accused of excise violations by the department to the tune of Rs 25 crore along with a penalty of Rs 5 crore