The central excise department on Thursday gave dyeing and knitted fabric processing industry to clear dues of crores of rupees as excise duty time till February 1, after erring industrialists raised a hue and cry over officials' action to initiate the process of sealing their properties.
High drama was witnessed at PVM enterprises in Focal Point area after central excise officials visited the premises in order to seal the company's premises and the management objected to the move.
The department teams also went to Kuddu industries on Rohan Road to recover the dues.
Managements of both objected that they were awaiting the Supreme Court order on an appeal filed by the industry.
Seeing the mood of officials, district BJP president Praveen Bansal and leaders of associations representing the industry also reached PVM enterprises. Heavy police force was deployed at the industry.
"PVM enterprises has to pay central excise duty worth Rs. 1.6 crore while Kudu industries is also a defaulter of excise duty worth lakhs of rupees," sources revealed.
Sources in the department said the industry had got enough time to deposit the due central excise duty, but it failed to do so. The department had now initiated the process to recover the same by sealing the properties.
"With the purpose of making sure that all other defaulters start paying the excise duty dues, it has been decided that the department will start the process of recovery from big players in the industry," the sources disclosed.
"The officials can seal the properties, including the machinery in use, to recover the excise duty," the sources revealed.
However, the move by the department caused panic among the industry and many industrialists who were busy in the foundation-stone laying ceremony of the sewage treatment plant at Bahadur K Road had to rush to these two units.
President of the Ludhiana dyeing industries' association Ashok Makkar said the department was harassing the industry even as they had filed an appeal in this connection in the Supreme Court. The department should have not taken any action until the SC gave its order.
It had been learnt that after the central board of excise and customs issued a circular for recovering pending excise duty from different firms on January 1 this year. The Ludhiana commissionerate of the central excise department had issued show-cause notices to as many as 82 dyeing and manmade process knitted fabrics processing units in this connection. Of these, 61 units are based in Ludhiana while 21 are based in Amritsar.
These industries have to deposit amount worth Rs. 32 crore as excise duty for period from 2012 onwards. The dues are on account of wrongly availed excise duty exemption.
The Custom Excise and Service Tax Appellate Tribunal (CESTAT) while hearing to an appeal by these units on November 12, 2009, had ruled that these units would have to deposit the central excise duty at the rate of 16% basic excise duty (BED) plus 8% additional excise duty (AED). These units were availing excise duty exemption and were paying the same at the rate of 12% BED and 8% AED. The department had served show-cause notices to these units for submitting the duty with the original rate, the sources added.