Media reports carried allegations that the company was not paying due excise duty on its production of Mixed Xylene, a raw material used in a variety of manufacturing industries, quoting tax officials.
MRPL said a team from Directorate General of Central Excise Intelligence, New Delhi had visited the company and enquired about the classification of the compound.
However, tax officials raised the objection that Mixed Xylene should have been classified under Chapter 27, for which the duty is 14% instead of Chapter 29 under which duty is 12.5%
¨Since inception the oil company has classified this product under Central Excise Tariff Chapter 29. This was done after deliberations with the Central Excise Authorities. And MRPL has from time to time charged and collected from the customers the excise duty at applicable rate and paid the same to the excise department,¨ said the oil company.
MRPL started manufacturing the product “Mixed Xylene” since year 2007 and started evacuation of Mixed Xylene in domestic market from November 2008 onwards.
MRPL further said that it did not stand to profit from paying a lower excise duty, as was being alleged.
¨The excise duty is recovered from the customers and paid to the Government and MRPL does not lose or gain by either of the duty structure.”
It added that the duty paid on this compound is allowed to be deduced from the excise duty payable on the final product.
¨Since 2007, MRPL has regularly filed monthly central excise returns wherein mixed xylene is classified as intimated to the central excise department on 8th February 2007.These records have also been audited by central excise department from time to time and at no point of time any objection / observation has been raised regarding mixed xylene classification, till now.¨
¨MRPL is in touch with the investigating wing of Central Excise & the local Central Excise department on the subject to resolve the matter,¨ it added.