Marico Ltd, a consumer goods company, has successfully defended its position in a prolonged excise duty dispute after the Supreme Court of India dismissed an appeal filed by the Commissioner of Central Excise (CCE) against the company and its job workers.
The dispute, which dates back to 2009, revolves around the classification of pure coconut oil for excise duty purposes for the period between 2005 and 2007. The CCE had initially sought to classify the coconut oil under the category of hair oil, which would have subjected Marico to an excise duty of Rs 66.77 crore. However, the job workers involved in the case classified the oil as edible, which was exempt from excise duty under the applicable regime.
The Customs Excise and Service Tax Appellate Tribunal (CESTAT) had previously ruled in favor of the job workers, prompting the CCE to challenge the decision in the Supreme Court. In a favorable verdict for Marico, the Supreme Court upheld the CESTAT’s decision, reaffirming that the coconut oil should be classified as edible oil and dismissing the CCE’s appeal. This ruling clarifies the tax classification for the relevant period and resolves the legal uncertainty surrounding the matter.
Marico stated that the outcome of this litigation does not have a material impact on its financial position or statements, and no penalty or compensation was imposed as part of the judgment.
In other news, Marico reported a 20.3 percent increase in its consolidated net profit, reaching Rs 433 crore for the quarter ending September 2024, compared to Rs 360 crore in the same period last year. Total income for the quarter rose to Rs 2,746 crore, up from Rs 2,514 crore a year ago. Revenue from operations grew by 7.6 percent to Rs 2,664 crore from Rs 2,476 crore in the same quarter last year. The company’s EBITDA saw a modest increase of 5 percent.