Dgir Notice To 40 Soft Drink Bottlers

The Directorate General of Central Excise (anti-evasion) has issued show-cause notices to over forty softdrink bottlers for under-invoicing of bottles to the tune of about Rs 30 crore.

The bottlers include Coke's Delhi franchisees Pearl Drinks Pvt Ltd and Moon Beverages, DKD Bottling units near Jalandhar and Panipat, and Agra Beverages which bottle for Pepsi, the Nagpur-based United Drinks Pvt Ltd which bottles for Coke and the Jammu & Kashmir bottling company, as well as the Pepsi-bottler in Sataria, Uttar Pradesh, which the multinational bought over from the Tata-controlled Taj group

These companies have been found to be supplying crates to the wholesale dealers at rates much higher than the price quoted to the government for excise assessment. The excise department has not accepted the argument put forward by these bottlers that the mark-up in the price is due to freight and crate-rental charges.While multinationals like Coke and Pepsi control the prices at which each softdrink bottle retails in the market, they have no control over the intermediate prices.

 

The violations under Section 4 of the Central Excise Act have been identified to have taken place between 1994 to 1996, when the central excise was charged at an ad valorem rate by the government.

The directorate general is also pursuing earlier cases of under-invoicing by bottlers of aerated drinks before 1994 when specific rates of excise duty prevailed. The average excise rate was about Rs 30 per crate of 24 bottles.

The present rounds of investigation were initiated after the excise department found that most of the bottlers were making an excise declaration of about Rs 30 per crate or less.

Which was half of what ought to be the excise payable at current rate of duties.

Bottlers that have been spared the first round of investigations are those that are paying higher excise duties closer to the expected Rs 50-plus per crate. Meanwhile, the department is monitoring perceived violations under the new fixed-value excise rates introduced by the government in the 1996 Budget.