Liquor producer Radico Khaitan refuted a recent report by the Comptroller and Auditor General of India (CAG), saying the company has complied with all legal requirements including revenue laws of the country.
The CAG report alleges underpayment of excise duty by Radico Khaitan. "Failure of the Assistant Excise Commissioner, Radico Khaitan Limited, Rampur to monitor consumption of input excise material shown in excise records vis-à-vis returns filed in Income Tax Department resulted in not detecting understatement of consumption of input excise material involving excise revenue of ₹1,078.09 crore (including interest of ₹482.34 crore) during the period 2013-14 to 2019-20," the CAG says in its compliance audit report on revenue.
The CAG audit examined the records pertaining to various materials such as molasses, grain and barley malt used to manufacture liquor.
"Audit compared the consumption figures of molasses, grain and barley malt submitted by the assessee through statutory returns to the Income Tax Department (ITD) with the respective quantities depicted in the records of the Assistant Excise Commissioner (AEC), Radico Khaitan Limited, Rampur and noticed variations in the quantities disclosed in the records/returns submitted to the Income Tax Department with those available in State Excise Department. The variations found in the consumed material indicate that the assessee had understated the consumption of inputs items in excise records, involving excise revenue of ₹595.75 crore on which interest of ₹482.34 crore was leviable," the CAG report says.
This resulted in an understatement of consumption of input excise material involving excise revenue amounting to ₹1,078.09 crore to the government.
The CAG says this matter was reported to the government in April 2022 but a response is still awaited.
The auditor suggested the government may analyse the understatement of input excise material by the assesse and take action to recover the excise revenue.
"Appropriate action should be initiated against the assessing officers who failed to discharge their duty and could not detect understatement of consumption of excise material," the report says.
Responding to the allegations, Radico Khaitan, the maker of Magic Moments vodka, says it has not received any notice of any irregularity in the matter.
"Henceforth, we find lack of accuracy in the information presented in these media articles," it says while referring to the "purported" CAG report.
Shares of Radico Khaitan fell 2% in intraday trade on Wednesday to ₹1,225 apiece on the National Stock Exchange (NSE). The stock has dropped 5% in the last two trading sessions. The liquor maker's market capitalisation has slipped to ₹16,469 crore.
On August 3, the company reported a 10% jump in its consolidated net profit at ₹68.26 crore for the quarter ended June as against ₹61.99 crore in the corresponding quarter of the previous financial year. Revenue of the company stood at ₹4,023.31 crore, up 26.3% compared with ₹3,183.80 crore in the year-ago quarter.
