It is alleged that the company in conspiracy with Excise officials availed excise exemption benefits of Rs 240 crores (appox) for its new manufacturing unit in Himachal Pradesh.
The Central Bureau of Investigation (CBI) has registered a case against Cadbury India Limited (now Mondolez Foods Pvt Ltd) and Central Excise tax officials for allegedly fraudulently obtaining a licence of chocolate factory in Himachal Pradesh in 2009-2010.
It is alleged that the company in conspiracy with Excise officials availed area based (excise) exemption benefits of Rs 240 crores (appox) for its new manufacturing unit in Himachal Pradesh. The CBI sleuths carried out searches on Wednesday at nearly half a dozen locations in Mumbai, Punjab (Mohali) and Himachal Pradesh.
A case has been registered against the company and Excise officials on charges of cheating and under relevant provisions of the Prevention of Corruption Act.
As per CBI’s FIR, a preliminary enquiry (PE) was conducted by CBI’s Anti Corruption Bureau in Shimla on the allegation that Mondolez Foods Private Limited (formerly known as Cadbury India) have paid bribes, misrepresented facts and manipulated records to fraudulently avail area based exemption benefits (Central Excise & Income tax) in Baddi, Himachal Pradesh knowing fully well that they were not entitled to avail area based tax exemption benefits.
The FIR adds “for availing the same, some members of the executive board of the company along with key managers, collectively decided to manipulate records, engage intermediaries to route bribes and cover-up all those evidence that had surfaced during the internal investigation.
It was revealed during the PE that M/s Cadbury India Ltd had setup a manufacturing unit in the name and style of M/s Cadbury India Ltd at Baddi for manufacturing of Malt based Food (Bournvita) and had started commercial production from May 19, 2005.
In the year 2007, M/s Cadbury India Ltd proposed to expand production by creating a unit for 5 star and gems as Unit II on the land acquired from M/s Barmalt in 2007 in Baddi to avail the exemption from excise duty and income tax for additional ten years.
CBI’s FIR says that its preliminary enquiry has revealed that M/s Cadbury India Ltd decided to expand the production capacity in its existing unit rather than a separate unit and avail tax exemption from May 19, 2005 i.e the date of first commercial production of the existing unit only. Accordingly, the company vide its letter dated January 22, 2007 addressed to Director of Industries, government of Himachal Pradesh applied for amalgamation of its two units wherein it was intimated that the company had decided to set up its second facility as a composite unit with the already existing unit in the name of M/s Cadbury India Ltd. The Directorate of Industries granted approval for merger on March 7, 2008.
The FIR adds “however enquiry has further revealed that M/s Cadbury vide letter dated June 30, 2009 addressed to Assistant Commissioner of Central Excise Shimla division filed a declaration intimating that their new factory located in the name and style of M/s Cadbury India had commenced commercial production and they would avail Excise duty exemption which was no longer relevant in the light of amalgamation of the two units taken on record by Directorate of Industries and communicated to the company on March 7, 2008”.
The FIR goes on to say that the company again applied for de-amalgamation i.e for establishing a separate unit in the name of M/s Cadbury India Ltd.
The CBI has alleged that the company was “not entitled for the availed exemption”. The FIR also accuses Excise officials for conspiring with the company officials in grant of illegal exemptions and not conducting proper verification of the declarations made by the company.