Marico Ltd, a leading consumer goods company, announced a legal victory after the Supreme Court of India dismissed an appeal filed by the Commissioner of Central Excise (CCE) in a long-standing excise duty dispute. The case revolved around classifying pure coconut oil for tax purposes between 2005 and 2007, a matter under contention since 2009.
Marico share price closed 0.32% higher at ₹642 on the BSE on December 19, 2024, with a market capitalisation of ₹83,017.04 crore. The total traded volume stood at 0.15 lakh shares, resulting in a turnover of ₹98.60 lakh.
The dispute originated when the CCE sought to classify pure coconut oil as “hair oil,” which would have imposed a hefty excise duty of ₹66.77 crore on Marico and its job workers. However, the job workers had categorised the oil as “edible,” qualifying it for exemption from excise duty under the then-prevailing tax regime.
In an earlier ruling, the Customs Excise and Service Tax Appellate Tribunal (CESTAT) sided with the job workers, classifying the coconut oil as edible and exempt from duty. This prompted the CCE to challenge the tribunal’s decision in the Supreme Court.
In a decisive ruling, the Supreme Court upheld the CESTAT’s judgment, affirming that the coconut oil was indeed edible and dismissing the CCE’s appeal. The judgment brings clarity to the tax classification of the product for the disputed period and eliminates the legal uncertainty surrounding the issue.
Marico emphasised that the favourable outcome has no material impact on its financial position or statements, as no penalties or compensation were imposed in the judgment.
Marico posted a consolidated net profit of ₹433 crore, up from ₹360 crore in the same period last year. Marico’s total income rose to ₹2,746 crore, up from ₹2,514 crore a year ago.
Revenue from operations climbed to ₹2,664 crore, compared to ₹2,476 crore in the corresponding quarter of the previous year. Quarterly expenses increased to ₹2,194 crore, up from ₹2,038 crore in the prior year.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.
Published on: Dec 20, 2024, 9:20 AM IST
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