RIL in excise net for Rs 9,500 crore

Showcause notice for non-payment of additional duty.

The Central Excise and Customs Department today issued a showcause notice to Reliance Industries Ltd, asking the company to explain why action should not be taken against it for unpaid duty amounting to Rs 9,500 crore.

The notice has been issued for non-payment of duty on export of petrol, high-speed diesel and aviation turbine fuel from the company's Jamnagar refinery during the five-year period from August 31, 2000 to August 31, 2005. The basis of the notice is an observation made by the Comptroller- and Auditor-General's office in Gujarat.

The CAG has contended that though RIL was exempt from the payment of basic excise duty on export of petroleum products, it has to pay an additional duty on the same.

According to sources, RIL was to pay an additional excise duty at a rate of Re 1 per litre on the exports, which was later raised to Rs 1.50 per litre.

Central excise and Customs sources in Rajkot confirmed that the notice was issued by the department this morning.

"We have issued a notice to the company for the Rs 9,500-crore additional duty on exports made by the company from its Jamnagar refinery," the sources said.

When contacted by Business Standard, an RIL spokesperson said he would not like to comment on the issue.

With good profit margins, RIL has been exporting a sizeable output of petroleum products from its Jamnagar refinery.

According to RIL's annual report for the last financial year, the refining business had a net turnover of Rs 48,183 crore against Rs 39,258 crore in 2003-04. RIL exported 10.2 million tonnes of refining products to 30 countries in 2004-05. Iran in West Asia and Brazil in South America are some of RIL's major markets for diesel and petrol.

The company's exports of petroleum products are expected to jump significantly once the planned expansion of the Jamnagar refinery, to 60 million tonnes, is completed.