Rashtriya Chemicals and Fertilizers Receives Supreme Court Order Regarding Tax Dispute
Rashtriya Chemicals and Fertilizers Limited (RCF) announced on March 25, 2026, that the Hon'ble Supreme Court of India has set aside orders issued by the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT), West Zonal Bench, Mumbai. The ruling pertains to appeals filed by RCF concerning show cause notices and CESTAT orders related to the period of 1996 to 2005.The Supreme Court's order, dated March 24, 2026, addresses the original orders of January 27, 2010, and February 4, 2010, along with the subsequent CESTAT order.
The dispute relates to an excise demand for tax, interest, and penalty associated with the diversion of naphtha, excluding its use for fertilizer production. The financial implications of this ruling, as quantified, amount to Rs 32.94 crore, which includes a tax demand of Rs 9.66 crore, interest of Rs 18.61 crore, and a penalty of Rs 4.67 crore.
Details of the ruling are summarized below:
| Particulars | Details |
|---|---|
| Authority | Hon'ble Supreme Court of India |
| Period Involved | 1996 to 2005 |
| Nature of Action | Set aside impugned orders-in-original and CESTAT order |
| Date of Order | March 24, 2026 |
| Nature of Violation | Excise Demand for diversion of Naphtha |
| Financial Impact | Rs 32.94 crore (tax: Rs 9.66 crore, interest: Rs 18.61 crore, penalty: Rs 4.67 crore) |
The information was received by RCF at 8:00 PM on March 24, 2026, and was downloaded from the Supreme Court of India's website. J. B. Sharma, Executive Director (Legal & Company Secretary) of RCF, confirmed the development.
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