New Delhi : The government has moved the Supreme Court accusing Hindustan Coca Cola Beverages of under- stating the retail price of its aerated drinks and thus evading duty between June-December 1999.

A bench headed by Justice Ashok Bhan has admitted the plea filed by the excise department, which claimed to have found HCCB, maker of Coca Cola, Limca, Fanta and Thums Up, selling the products to retailers at Rs 10 per 300 ml bottle as against Rs 9 declared by it for excise assessment purposes.

Although the Commissioner and Deputy Commissioner of (Appeals) upheld the department's contention and imposed a penalty of Rs 1.65 lakh on the company for the said period, appellate tribunal CESTAT had reversed the findings of the lower authorities on an appeal by the company.

Appealing against the CESTAT order, the department submitted before the apex court that the sectoral tribunal had totally ignored Explanation I to Section 41 of the Central Excise Act, which clearly prohibited collection of any extra money in any form from the distribution chain and retaining the same without including it in the maximum retail price.

"The respondent had fixed the retail sale price as Rs 9, whereas it had altered the price and declared it at Rs 10. Therefore... altered MRP would have to be the MRP for assessment purposes," the petition said.

Solicitor General GE Vahanvati and Devadatt Kamat said the company had been paying excise duty at the rate of 40 per cent on the MRP printed on the containers, less the amount of abatement at the rate of 50 per cent.