- To fraudulently obtain area-based exemption benefits, the company allegedly “paid bribes, misrepresented facts, and manipulated documents”
- Following a preliminary investigation, a First Information Report was filed
- According to sources, Cadbury India, in cooperation with Central Excise officials, obtained excise benefits worth Rs 241 crore for its 5 Star and Gems manufacturing plant in Himachal
The Central Bureau of Investigation has filed a case against Cadbury India Private Limited (now known as Mondelez Foods Private Limited), accusing it of corruption. Cadbury has been charged with corruption and misrepresentation of evidence in order to fraudulently obtain area-based tax benefits in Baddi, Himachal Pradesh, according to the department. According to one of the leading news channels of the country, the CBI searched the accused’s homes in five locations across Haryana and Himachal Pradesh today and discovered incriminating materials.
Cadbury India, in collusion with Central Excise officials, allegedly obtained excise benefits worth Rs 241 crore for its 5 Star and Gems manufacturing unit in Himachal Pradesh, according to agency sources.
According to sources, the suspected irregularities occurred between 2009 and 2011.
Following a preliminary investigation, a First Information Report was filed. According to the department, the company “paid bribes, misrepresented facts, and manipulated documents to fraudulently obtain area-based tax exemption benefits (Central Excise and Income Tax) in Baddi, Himachal Pradesh, knowing fully well that they were not entitled to such benefits.”
According to the CBI, the company proposed to build a unit in Baddi in 2007 in order to obtain a 10-year extension on excise duty and income tax exemption.
Instead of constructing a separate unit, Cadbury India chose to expand the existing unit to take advantage of the tax exemption. Bournvita was manufactured in this facility, which was constructed in 2005.
The company received a licence for the second unit in July 2010, four months after the exemption deadline.
The Central Bureau of Investigation Agency said, “The above facts revealed that the second unit of CIL did not meet the prescribed requirements for tax exemption, but obtained tax exemption to the tune of 241 crore by bribing then-Central Excise officials Nirmal Singh and Jaspreet Kaur via middlemen.”
The CBI in their preliminary investigation alleges that, “In order to obtain the same, several members of the company’s executive board, along with key managers, agreed to jointly alter documents, engage intermediaries to route bribes, and cover up all those facts that had emerged during the internal investigation.”
Meanwhile, Mondelez announced that the “potentially protracted litigation” has been resolved through an amnesty scheme established by the Indian government to resolve tax disputes.
Mondelez Foods Private Limited said in a statement, “The company resolved a potentially lengthy legal battle in 2019 under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019, an amnesty scheme established by the Indian government to resolve tax disputes.”
Cadbury India went on to say, “This decision was made in the interest of putting an end to protracted litigation to enable us to focus on what we do best, growing our business in India. We have yet to receive any formal communication from the authorities on the subject.”