An order of the Calcutta high court's division bench into the iron ore export scam of railways has opened up the possibility of railways getting thousands of crores from a few hundred companies that had misused its facilities.
In its order last week, division bench of the high court came down heavily on companies that evaded the full freight charges, by falsely claiming that the iron ore they moved through railways was meant for domestic consumption. In reality, the iron ore thus transported at one-fifth of the full freight rates was exported, mostly to China. The bench was hearing an appeal filed by Rashmi Metaliks Limited against the railways asking it to pay Rs 660 crore for the evasion.
A single bench of the high court had earlier upheld the railway's policy that had been challenged by Rashmi Metaliks and a group of other companies accused of evasions.
Ever since the evasion was detected by the vigilance wing of Kolkata-based South Eastern Railway in 2011, the case has been under the scanner of the Central Vigilance Commission, the CAG, CBI and other agencies. A CAG audit has estimated the recoverable to railways at Rs 17,000 crore, an amount that can change the fortunes of a cash-strapped government transporter.
Though detected in 2011, the evasion is suspected to have carried on because the companies continued to pay lower tariff, meant only for domestic consumption, for exports.
The division bench has said that railways should not grant any kind of concession without conducting an inquiry about the end use of domestic iron ore. It has ordered that Rashmi Metaliks must pay railway export rate for every consignment even if the same is declared by them to be meant for manufacturing of steel within India. The rate of freight movement for domestic purposes is only one-fifth of the rate that exporters must pay.
"We can neither permit a dishonest businessman to enjoy any concessional rate by giving false, incorrect and misleading declaration on affidavit regarding the end use of such iron ore nor allow such dishonest business concerns to be unduly enriched by giving false declaration about the end use," the court order said.
The order also said that "for recording such satisfaction about the end use of iron ore as for the declaration given by the consignor/consignee, the Railway authority may not only verify the documents to be submitted by the consignor/consignee...but also may take inspection at the factory site for ascertaining the actual end use of such iron ore by the consignee."
The petitioners had taken the stand that the railways do not have to enter their factory premises and verify whether iron ore taken by them for domestic purpose was really being put into manufacturing of iron and steel products.
Source: The Times of India
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