Mangalore Refinery under lens for alleged excise duty evasion

Mangalore Refinery and Petrochemicals Limited (MRPL), a subsidiary of Oil and Natural Gas Corporation, has come under the scanner of central revenue authorities for alleged excise duty evasion of at least Rs 10 crore.
The Directorate General of Central Excise Intelligence here has started a probe in the case and sought certain clarification from the Mangalore-based MRPL, official sources said today.
The case relates to alleged wrong classification of mixed xylene -- a clear colourless aromatic hydrocarbon liquid having sweet odour -- produced by it, they said.
Mixed xylenes are extracted or distilled from reformate, a stream derived from the refining of high-octane motor gasoline. It is mainly used in paints as solvents, in pesticides, tile adhesive, printing, packaging and construction chemical, among others.

The company was allegedly paying 12.5 per cent duty on it by declaring the product as organic chemical. It should have instead declared it as mineral oil which attracts 14 per cent levy, the sources said.
When contacted, a senior MRPL official said the company is in the process of obtaining expert professional opinion on the matter.

"As far as MRPL is concerned, the classification of mixed xylene had been done under Central Excise Tariff Act after deliberation and intimation to the central excise authorities concerned nearly ten years back. The applicable duty also has been paid regularly since the said intimated classification.

"In response to the recent inquiry from central excise department, the matter of prior intimation has been brought to the notice of the authorities by the company. Further, the company is also in the process of obtaining expert professional opinion on the matter," he said.
Sources said the alleged evasion by MRPL is of at least Rs 10 crore.