Volkswagen Group Faces Rs 73 Crore Central Excise & Customs Evasion

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Nagpur : Swedish bus maker Scania Commercial Vehicles India Private Ltd is facing cases of evasion of Customs and Central Excise duties and penalties. The Directorate of Revenue Intelligence (DRI) and other government departments have reportedly calculated the evasion at Rs. 37.20 crore and levied a penalty of Rs 35.81 crore for a total liability of Rs 73.01 crore on the Volkswagen Group-owned company.

Scania, which operates Green Buses in the city, has appealed against the sanctions with the Customs, Excise and Service Tax Appellate Tribunal’s (CESTAT) Mumbai, Hyderabad and Bangalore benches. All the appeals are pending. Recently, the company shut down its ethanol-run and premium bus building manufacturing unit in Karnataka.

DRI started the proceedings on the company in 2016 and 2017 for which Scania filed appeals in 2017 and 2018. Evasion of duty/taxes and penalty related to customs amounts to Rs. 54.98 crore, Rs. 6.56 crore of sales tax and Rs. 11.46 crore of excise.

“We do not have any information on any new action being taken by DRI on us. We have cases pending in the CESTAT benches in Bengaluru, Hyderabad and Chennai as part of taxation appeals but no decision has been made on these cases,” the company said in a statement.

According to sources in the Nagpur Municipal Corporation and former employees of the company, the DRI action was one of the reasons behind Scania shutting down its unit and also keeping the existing and proposed projects in Goa, Thane, Nagpur and other cities on hold.

However, Scania denied it. “The reason is lack of volumes in the premium segment. We continue to run our bus chassis manufacturing and truck chassis manufacturing facility as earlier from Narasapura,” the company added.

As per sources from various departments and information available from the company’s former employees, the DRI has found Scania’s claim of running Narasapura plant and importing all materials for its buses as ‘completely knocked down’ (CKD) unit was wrong.

“The DRI found that the company’s units and manner of importing materials was actually ‘semi knocked down’ (SKD) unit. Duties and taxes are higher for SKD than CKD. Also, the company has given wrong and withheld information about importing fuels for the buses,” they said.

Scania has reportedly manufactured around 1,000 buses at its Narasapura plant.

As per information available on CESTAT’s website, Scania has filed three appeals with Bangalore bench, one each with Mumbai and Hyderabad bench. Media could not find any appeal in Chennai bench.

Source : TOI

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