Stiff excise rap for Old Spice makers

PANAJI, Sept 16: Colfax Laboratories, manufacturers of the Old Spice and Blue Stratos range of aftershave lotion, has been ordered to pay Rs 7.5 crore as excise duty and submit a bank guarantee for another Rs 11.20 crore. The Panaji bench of the Bombay High Court, which passed the order on Tuesday, has given Colfax Laboratories eight weeks to make the payment.

The order follows litigation between the Government of Goa and the company over payment of excise duty. Colfax was granted a licence to manufacture aftershave lotion under the provisions of the Medicinal and Toiletry Preparations Act, 1955. However, in January 1985, the company managed to convince the commissioner of excise that the aftershave lotion was a medicinal preparation and secured a reduction in excise tariffs.

However, on March 13, 1991, the Excise Department issued notices to the company to pay excise duty to the tune of Rs 92.44 lakh. This was challenged by the company in a writ petition filed before the Bombay High Court. Subsequently,the department issued another notice to Colfax, demanding Rs 17.77 crore as excise duty.

Following continued litigation, the court in 1997 appointed R I Jaiprakash as commissioner to hear the Colfax case. He also passed an order directing the company to pay Rs 18.5 crore as excise.