Pan Parag masala under lens for tax evasion worth Rs 20 crore

New Delhi: The manufacturer of ‘Pan Parag’ masala has come under the scanner of revenue department for allegedly evading excise duty worth over Rs 20 crore. A case has been registered against the Baroda manufacturing unit of Pan Parag India Ltd by excise department officials for the alleged evasion, official sources said today. The investigations found that the Baroda unit was producing pan masala instead of ‘flavoured supari’ on eight manufacturing machines. These machines were declared with the local excise office for use of flavoured supari only, they said. [caption id=“attachment_1363315” align=“alignleft” width=“380”]  Reuters[/caption] The firm was allegedly evading excise duty on pan masala, which is higher as compared to flavoured supari, the sources said. The government’s tariff on pan masala is calculated through a compounded levy scheme. Under this, excise duty is charged with respect to production capacity of a manufacturing machine and retail sale price of the product. This unique modus operandi by wrongly declaring the end use of the machines meant for ‘flavoured supari’ to evade excise duty payment was found for the first time by the officials, they said. The evasion is to the tune of Rs 20 crore, the officials said. After the matter came to light, Pan Parag India Ltd has deposited Rs ten crore– Rs six crore cash and rest through post dated cheques–to the revenue department officials, they said. The company did not offer any comment to the calls and emails sent by PTI on the matter. No packaging papers, ingredients or stocks related to manufacturing of flavoured supari were found at the Baroda unit of ‘Pan Parag India Ltd’ during the visit by officials of Delhi Zonal Unit of Directorate General of Central Excise Intelligence (DGCEI), the sources said. Officials also conducted searches at various premises of the firm’s dealers at Kanpur, Baroda, Ahmedabad and Delhi and claimed to have found incriminating documents related to the matter, the sources said. “Pan masala is considered to be most evasion prone commodity and the government is trying to plug any leakage of the revenue. Stringent action will be taken against any such evader,” an excise department official said. The excise duty (a type of tax charged on goods produced within the country), is calculated under ‘Pan Masala Packing Machines (Capacity Determination and Collection of Duty) Rules, 2008, modified in 2010, ranges from Rs 14 lakh to Rs 77 lakh depending upon the price of per packet of pan masala (non-tobacco) and production capacity of machines. Whereas, for flavoured supari, the tariff is charged on the basis of maximum retail price. The duty is calculated at the rate of 2.36 per cent per packet, excluding 35 per cent of abatement given on it. In a related development, the Finance Ministry has yesterday increased excise duty on pan masala and tobacco products including gutka, chewing tobacco, unmanufactured tobacco and filter khaini packed in pouches with the aid of packaging machines under the compounded levy scheme. PTI