Tejas Networks under lens for duty evasion

The Central Excise Department has issued a showcause notice to Bangalore-based telecom equipment firm Tejas Networks on charges of evading duty. According to official papers available with Business Standard, the alleged evasion may cost Tejas about Rs 14 crore, which includes the value of the tax evaded (close to Rs 6 crore), an equal amount towards penalty and close to Rs 2 crore towards interest.

The department has alleged that Tejas’ manufacturing unit in Pondicherry had been shipping out telecom optical transmission equipment without including the value of the software embedded in the transaction value of the equipment. This, according to the department, has resulted in a tax evasion of close to Rs 6 crore between December 2002 and 2006.

The company was collecting the value of the software from its customers through a separate commercial invoice.

A Tejas Networks spokesperson, in reply to an email query by Business Standard, confirmed that the Pondicherry unit of the company had received a notice from the Excise department.