The Hindu : Business : Rs. 803 crore excise relief for ITC

Online edition of India's National Newspaper
Saturday, Sep 11, 2004

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Business

Rs. 803 crore excise relief for ITC

By Our Legal Correspondent

NEW DELHI, SEPT. 10. The Supreme Court which granted Rs. 803 crores excise duty relief yesterday to Indian Tobacco Company (ITC) Limited, today maintained its judgment by quashing the orders passed by the Customs, Excise and Gold (Control) Appellate Tribunal (CEGAT) rejecting the plea of the tobacco company.

A Bench headed by Justice Ruma Pal yesterday pronounced the judgment allowing the appeals filed by ITC against the orders of the CEGAT but withdrew its judgment within minutes taking a serious view of the unsigned order having been taken out of the court though it was given to counsel only to have a look at it.

Justice Ruma Pal told counsel yesterday that she was reserving the judgment again and indicated that the consequences of counsel's action would be `very costly.' But today Justice Ruma Pal and Justice P. Venkatarama Reddi pronounced the judgment allowing ITC's appeals and dismissing the appeals filed by the Commissioner of Central Excise Though on Thursday afternoon the counsel gave it in writing tendering apology and explaining the circumstances in which the order was inadvertently taken out along with the case bundle, there was no mention about it in today's order.

The revenue department had alleged that the ITC had colluded with retailers in selling cigarettes at a price higher than the maximum retail price printed on the package and levied excise duty on the effective price.

However, ITC maintained that it was not permissible to levy the duty on the basis of MRP. On the allegation that retailers were compelled to sell the goods at a higher price because of the low margin, ITC said they could refrain from selling the goods.

The government and the company filed appeals to the Supreme Court, against those portions of the CEGAT order, that went against them. With the apex court allowing the ITC appeals, the company had won the major legal battle and obtained the relief of Rs. 803 crores.

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