New Delhi: State-run oil marketing company Bharat Petroleum Corporation Ltd (BPCL) has received a demand order of ₹1,816.65 crore from the Commissioner of Central Tax and Central Excise, Kochi, the company informed in a stock exchange filing on Monday.
Break-up of the Tax Demand
According to the filing, the total demand includes:
- Excise duty: ₹476.94 crore
- Interest: ₹1,339.70 crore
- Penalty: ₹95,000
The order was disclosed to the BSE as part of regulatory compliance.
BPCL to Challenge Order
BPCL said it is currently analysing the order and will file an appeal before the Customs, Excise and Service Tax Appellate Tribunal (CESTAT).
Background of the Dispute
The litigation relates to 19 Show Cause Notices (SCNs) issued by the Central Excise Department for the period September 2004 to May 2010, which were pending adjudication. The adjudicating authority passed the order on February 21, 2026.
A significant portion of the demand pertains to the pre-merger period of Kochi Refineries Ltd (KRL), covering September 2004 to August 2006.
Key Issue in Valuation
The adjudicating authority ruled that BPCL and KRL were related parties, and therefore the Refinery Gate Price could not be used for excise valuation. The department’s valuation method under the Central Excise Valuation Rules, 2000 was upheld.
Post-merger, BPCL’s Kochi refinery followed Rule 7 (highest quantity depot price), but the department applied the highest value of the entire fortnight to all clearances under Rule 11 read with Rule 7.
Market Reaction
Shares of BPCL rose 1.83% to ₹372.55 at the close of trading, before the announcement of the excise duty demand.