A show cause notice raising a demand of Rs. 252 crore has been served on confectionery major Cadbury India Limited for alleged excise duty evasion.
The notice, seeking recovery, was issued yesterday by Directorate General of Central Excise Intelligence after its investigation found that the firm has wrongfully claimed 'area-based exemption' for its new unit at Baddi in Himachal Pradesh, official sources said.
A Cadbury India spokesperson said it will respond to the show cause notice in consultation with its legal advisers.
"We are in the process of reviewing the contents of the show-cause notice from the Excise Department and will respond to it in consultation with our legal advisers. A show cause is a matter of form in any such enquiry," the spokesperson said in an email response to PTI query.
"A compliant and ethical corporate culture, which includes adhering to laws and regulations in the countries in which we operate, is integral to our success.
"To that end, we have been fully cooperating with the authorities on this enquiry. Since the process is currently under way, it will be inappropriate on our part to discuss the details at this time," he added.
As per central government norms, the area-based exemption for new industrial units of firms in Himachal Pradesh provide full exemption from excise duties for specified goods for a period of 10 years. However, for availing this the unit should have been established before March 2010 to claim such benefit.
During its investigation, the officials found that the company claimed excise duty exemption for its new unit in Sandoli village in Baddi, relating to a period even before it came into existence, the sources said.