Cadbury India Ltd has been slapped a notice for a demand of over Rs 250 crore in excise duty allegedly evaded by it by claiming exemption for a ‘ghost’ production unit.

The Directorate-General of Central Excise Intelligence has issued the show-cause notice after its investigation found that the firm misused ‘area-based exemption’ for its new unit in Baddi, Himachal Pradesh even before it came into existence, official sources said.

A Cadbury India spokesperson said it will respond to the show-cause notice in consultation with its legal advisers.

“We are in the process of reviewing the contents of the show-cause notice from the Excise Department and will respond to it in consultation with our legal advisers. A show-cause is a matter of form in any such enquiry,” the spokesperson said in an email response to PTI query.

“A compliant and ethical corporate culture, which includes adhering to laws and regulations in the countries in which we operate, is integral to our success. To that end, we have been fully cooperating with the authorities on this enquiry.

“Since the process is currently under way, it will be inappropriate on our part to discuss the details at this time,” he said.

Under central government norms, the area-based exemption for new industrial units of firms in Himachal Pradesh provides full exemption from excise duties for specified goods for a period of 10 years.

However, for availing itself of this benefit, the unit should have been established before March 2010.

During investigation, the officials found that the company claimed excise duty exemption for its new unit in Sandoli village in Baddi relating to a period even before it came into existence, the sources said. (PTI)