Excise panel rejects M&M appeal

Mahindra & Mahindra Ltd. | Automobiles - Passenger Cars | Automobiles | BSE: 500520 | NSE: M&M

11 Dec 2009 Evaluate

The Central Excise and Service Tax Appellate Tribunal has rejected an appeal by farm equipment and utility vehicles major Mahindra & Mahindra against a Rs 304.11-crore excise duty demand following which the company on Thursday said it will move the Supreme Court. The company believes that it has a strong case on merits and would be filing an appeal to the Supreme Court in due course.

The case pertains to payment of differential excise duty of Rs 216.03 crore and penalty of Rs 88.08 crore in connection with the classification of M&M’s Commander range of vehicles as a ten-seater during 1991-1996.

The company claimed that the classification of the Commander range of vehicles was upheld by the CESTAT in an earlier occasion against which the (excise) department had preferred an appeal to the Supreme Court.

While the central excise department had earlier accepted classification of the Commander as the 10-seater under a specified excise tariff category (Central Excise Tariff Entry 8702), it later opposed the same on the ground that the criteria were not met under the Motor Vehicles Act and Rules and demanded differential duty. The Commander was then reclassified under a different category (Tariff Entry 8703) attracting a higher rate of excise duty.

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