Dgae Quizzes Hind Lever On Tea Brands

The Directorate General of Anti-Evasion (DGAE) has questioned Hindustan Lever Ltd's (HLL) classification of Lipton Tiger or popular tea mixture (PTM) and Red Label or premium tea recipe (PTR) brands.

A show-cause notice issued by the DGAE said, HLL has willfully misled the Central Excise department by declaring PTM and PTR as tea and thus wrongly classifying them attracting lower rate of excise duty. HLL's evasion stands at Rs 6.47 crore, it said.

The department has also asked why under Section 11A(2) of the Central Excise Tariff Act, 1985, an interest of 20 per cent should not be charged on the amount and a penalty equal to the amount of duty determined to be payable under the Act should not be imposed on them.

 

Meanwhile, HLL yesterday said that it has been given time till May 30 to respond to the DGAE notice.

"HLL will reply within the specified time. The company believes that PTM and PTR were correctly classified, and do not attract excise duty," said Debasis Ray, corporate communications manager, HLL, in a press communique.

The DGAE has demanded to know why "land, building, plant machinery, materials, conveyance etc used in connection with the manufacture, production, storage, removal or disposal of offending goods, should not be confiscated under the provisions of Rule 173Q(Z) of the Rules".

According to sources in the DGAE, Central Excise, Mumbai, the notices have been issued to S Choudhary, factory manager, HLL, Kanhan, Nagpur, and Rajesh Bagga, head, legal (foods), Bangalore, over the classification issue.