Finolex Industries Ltd

The matter relating to disallowance of ISD credit transferred through TRAN‑1 was earlier disputed before the Hon’ble Bombay High Court, which remanded it back to the jurisdictional officer; the company subsequently filed a follow‑up letter with the officer and, based on its assessment and prevailing law, reasonably expected a favorable outcome with no material impact on its financial position, operations, or other activities. The proceedings have now been conclusively resolved, as the Joint Commissioner of CGST, Pune II Commissionerate has dropped the demand order (Order No. ZD2712250096877 dated 02‑12‑2025).

The order was passed disallowing TRAN-1 credit under Section 73 of the CGST Act 2017 to pay tax of Rs.3,15,63,781/- along with penalty of Rs.31,56,378/- under Section 122(2) and interest as applicable under Section 50(3)of the CGST Act 2017.

The Company is in the process of availing the amnesty scheme for interest and penalty. Based on its assessment and the prevailing legal framework, the Company reasonably expects a favorable outcome. Accordingly, there is no material impact on the financial position, operations, or other activities of the Company. The said case has now been closed. Order for closure of proceedings has been received. Ref No- ZD270725097319R , Date: 22/07/2025

The order was passed for the tax demand of Rs.1,25,29,080/- (which was already paid by the Company and appropriated against the demand) and levied a penalty of Rs.12,52,908/- under Section 73(9) and interest of Rs.26,56,851/- under Section 50 of the Central Goods and Services Tax Act, 2017 (CGST Act, 2017).

The Company has paid the tax dues and filed an application under amenesty scheme for interest and penalty. The said case has now been closed. Order for closure of proceedings has been received. Reference No: ZD240325105467L, Date: 27/03/2025

The order was passed for the tax demand of Rs.29,488 /- (Rupees Twenty Nine Thousand Four Hundred and Eighty Eight Only) along with applicable interest under Section 73(9) of the Central Goods and Services Tax Act, 2017 (CGST Act, 2017) and levied a penalty of Rs.20,000/- (Rupees Twenty Thousand Only) under the provision of Section 122(2)(a) read with Section 73(1) of the State Goods and Services Tax Act, 2017 (SGST Act, 2017) and Integrated Goods and Services Tax

The Company has filed an appeal before CESTAT against this order. Based on the Company’s assessment and prevailing law, the Company reasonably expects a favorable outcome and there is no material impact of the same on financial, operations or other activities of the Company.

A. Notice – I DGCEI/MZU/I&S‘C’/30-74/2012/10593/2279 dated 20.11.2013: 2010-11 to August 2013 - Ordered a tax demand of Rs.59,62,857/- (Rupees fifty Nine Lakh Sixty Two Thousand Eight Hundred and Fifty Seven Only) on the Input Credit amount of Rs.3,96,97,519/- (Rupees Three Crore Ninety Six Lakh Ninety Seven Thousand Five Hundred and Nineteen Only) and interest as applicable on the tax demand; - Ordered for recovery of interest of Rs.38,61,104/- (Rupees Thirty Eight Lakh Sixty One Thousand One Hundred and Four Only) on the delayed payment of due of Rs.3,37,34,632/- (Rupees Three Crore Thirty Seven Lakh Thirty Four Thousand Six Hundred and Thirty Two Only); - Further, imposed a penalty equivalent to the amount of demand (excluding Cenvat credit already reversed) of Rs.3,96,97,519/- (Rupees Three Crore Ninety Six Lakh Ninety Seven Thousand Five Hundred and Nineteen Only) under Rule 15(2) of the Cenvat Credit Rules, 2004 read with Section 11 AC of the Central Excise Act, 1944; & - Further, as per the said Order, if the Company pays the balance confirmed demand of Rs.59,62,887/- (Rupees Fifty Nine Lakh Sixty Two Thousand Eight Hundred and Eighty Seven only) along with requisite interest for short payment and interest for delayed payment within 30 days from the date of receipt of this order, penalty shall stand reduced to 25% i.e., Rs.99,24,380/- (Rupees Ninety Nine Lakh Twenty Four Thousand Three Hundred and Eighty Only). The benefit shall be given provided the reduced penalty amount is also paid within 30 days. B. Notice – II: F. No. V(39)15-265/ADJ/COMMR.KOP/14 dated 20.09.2014: September 2013 to June 2014 - Ordered a tax demand of Rs.2,10,189/- (Rupees Two Lakh Ten Thousand One Hundred and Eighty Nine Only) on the Input Credit amount of Rs.17,43,395/- (Rupees Seventeen lakh forty three thousand three hundred and Ninety Five only) and interest as applicable on the tax demand; - Ordered for recovery of interest of Rs.7,254/- (Rupees Seven Thousand Two Hundred and Fifty Four Only) on the delayed payment of Rs.15,33,206/- (Rupees Fifteen Lakh Thirty Three Thousand Two Hundred and Six Only); - Imposed a penalty equivalent to the amount of demand (excluding Cenvat Credit already reversed) of Rs.17,43,395/- (Rupees Seventeen Lakh Forty Three Thousand Three Hundred and Ninety Five Only) under Rule 15(1) of the Cenvat Credit Rules, 2004; & - Further, as per the said Order, if the Company pays the balance confirmed demand of Rs.2,10,189/- (Rupees Two Lakh Ten Thousand One Hundred and Eighty Nine Only) along with requisite interest for short payment and interest for delayed payment within 30 days from the date of receipt of this order, penalty shall stand reduced to 25% i.e. Rs.4,35,849/- (Rupees Four Lakh Thirty Five Thousand Eight Hundred and Forty Nine Only). The benefit shall be given provided the reduced penalty amount is also paid within 30 days.

The Company had submitted its reply against Show Cause Notice (SCN) No. ZD230525033163U dated 28‑05‑2025. However, the reply was not accepted by the adjudicating officer, pursuant to which a DRC‑07 order was issued raising a demand aggregating to ₹45,998, comprising tax of ₹14,112, interest of ₹17,774, and penalty of ₹7,056. The said amount has been paid under protest to avoid escalation of the matter and additional costs of litigation. The case is currently pending issuance of the closure order by the GST authorities.

The order has been passed for a tax demand of ₹14,112/-, along with interest of ₹17,774/- and a penalty of ₹14,112/- under Section 74 of the Central Goods and Services Tax Act, 2017 (CGST Act, 2017). Reason: The demand has arisen due to the duplicate generation of an e-way bill for a single invoice.