Tata Chem gets excise notice of Rs 556 cr

The central excise department has slapped a notice on Tata Chemicals demanding Rs 556.70 crore for alleged evasion of duty. This includes a penalty on delay in paying the duty.

The Commissioner of Central Excise at Haldia in West Bengal has demanded from the company the amount, a combination of duty and penalty, for the period between September 1, 1999 and September 30, 2005.

The company informed the Bombay Stock Exchange that it "would contest the issue before an appropriate forum and has also been legally advised that its stand will be upheld". Accordingly, the company did not expect any liability on this account, it informed the bourse.

The company was of the view that the order passed by the commissioner was unsustainable in law and similar issues had been settled by various judicial pronouncements in favour of companies, it added in its notice to the exchange.

Sources close to the development said the bone of contention was the use of two products "" neutral filter cake (NFC) and spent sulphuric acid (SSA) "" as raw material for production of di-ammonium phosphate (DAP) and single super phosphate (SSP).

NFC and SSA, generated during the process of production of an excisable product called sodium tri-poly phosphate (STPP), are used for manufacturing non-excisable products DAP and SSP.