Mahindra and Mahindra Ltd gets favorable order on duty appeal

Mahindra and Mahindra Ltd had in the year 2005 announced that it had been served with an order from the Office of the Commissioner of Central Excise (Adjudication), Mumbai for payment of a total of Rs 2160.30 million as differential duty and Rs 880.80 million as penalty under the Central Excise Act.

This was primarily on account of the dispute the Company had with the Excise Department during the years 1991-96 pertaining to classification of Commander range of vehicles as 10-seater under Central Excise Tariff Entry 8702.

The Company in 2009 had further announced about rejection of its appeal by CESTAT (Appellate Authority) and that the Company is in the process of filing the appeal with the Supreme Court. Thereafter the Company paid Rs. 40 crores, under protest, and challenged the matter in the honourable Supreme Court, which directed that a larger bench should be constituted to decide the issue.

The Company announced that in the fresh Adjudication proceedings conducted by the Commissioner, CGST, Nashik, on the directions of Larger Bench of Tribunal & Supreme Court, the Company has received an order, wherein, the proposal in the Show Cause Notices ("SCNs") to demand duty/penalty/interest from the company has been completely dropped.

Thus, the said order has totally discharged the notices and the demand for Rs. 337 crores in its entirety. The Company would be entitled to a refund of Rs 40 crores. The Company is also carrying Contingent liability to the tune of approx. Rs. 781 crores in its books for this case, which can now be deleted. The Company believes that it has strong case on merits should the Central GST and Central Excise department prefer an appeal against the above order of the Commissioner.

Shares of Mahindra & Mahindra Limited was last trading in BSE at Rs. 896.95 as compared to the previous close of Rs. 899.45. The total number of shares traded during the day was 149093 in over 6692 trades.

The stock hit an intraday high of Rs. 911.00 and intraday low of 893.05. The net turnover during the day was Rs. 133875283.00.

Source : Equity Bulls

Keywords

MahindraandMahindra INE101A01026 MandM Cars UtilityVehicles