Show-Cause Against Gtc On Excise Duty Evasion

The central excise authority has issued showcause notices against the Golden Tobacco Company (GTC) for alleged duty evasion to the tune of Rs 350 crore.

Separate notices have been issued to the company, managing director J P Khaitan, franchisee firms of GTC scattered across the country and the persons heading these outfits.

The figure determining the extent of evasion pertains to all cases booked against the firm in 1995 and part of 1996. The cases are filed against GTC and a host of its franchisees. Investigation into the cases had led to the arrest of J P Khaitan from Chennai in the last quarter of 1996.

 

The case has now been referred to the adjudicating officer in the central excise department. Official sources feel it will take some time before the case is resolved.

"It is a huge case and involves a lot of paper work. A host of franchisee companies are involved.

The authorities are in possession of a lot of evidence. It has not been decided when the adjudicating authority will give its verdict. Logically this will be when all the information and data is finally compiled," a source pointed out.

The question of the company appealing to the Customs Excise and Gold (Control) Appellate Tribunal (Cegat) will arise only if the conclusions of the adjudicating official are found adverse by the firm, the source added.

The showcause pertains to the clandestine removal of goods which is a common mode adopted by tobacco companies for evading excise duty. Most tobacco firms came under fire from the excise department last year.

The largest case pertains to the Rs 799-crore excise evasion by ITC. The matter is pending with the Cegat. Besides, the S L Duggar-owned New Tobacco Company (NTC) had been raided by excise authorites leading to the arrest of the owner, S L Duggar.