Excise Levy Hits Dwarikesh Sugar With ₹94.7 Million Demand Over Denatured Spirit Fees

Image Source : Dwarikesh Sugar Industries Limited

Dwarikesh Sugar Industries Ltd has received a demand order from the Assistant Excise Commissioner, Government of Uttar Pradesh, directing its Dwarikesh Dham unit to remit ₹94.7 million in statutory fees. The order stems from retrospective levies on denatured spirit transactions between FY 2018–19 and FY 2024–25.

Key Details Of The Excise Directive

The levy is based on ₹1 per bulk liter of denatured spirit (power alcohol) exported or imported during the specified period.
The total payable amount includes ₹79.45 lakh in fees, with the remainder comprising interest and statutory penalties.
The directive follows a Supreme Court ruling dated October 23, 2024, which upheld the state’s authority to impose such fees on denatured alcohol.
The Excise Department clarified that the recovery is retrospective and statutory—not penal in nature.

Company Response And Legal Position

Dwarikesh Sugar is currently reviewing the implications of the order and intends to pursue legal recourse under applicable provisions.
The company maintains that the financial impact is not material and will not affect its operational continuity.
Similar levies have been issued to other units in recent months, indicating a broader regulatory shift in excise enforcement.

Industry Context

The move underscores heightened scrutiny of ethanol and industrial alcohol transactions, especially as sugar mills diversify into biofuel production under India’s ethanol blending program.

Sources: Moneycontrol, Dwarikesh.com, Economic Times, SEBI Filings.