By Our Correspondent
NEW DELHI/BHUBANESWAR: Arcelormittal Nippon Steel India Limited, JSW Steel, Brahmani River Pellets Limited, Rashmi Metaliks Ltd, Rashmi Group, Shri Jagannath Steel Power Ltd, Ardent Steel Limited, PK Ahluwalia, Shri Mahavir Ferro Alloys Pvt Ltd, Arcelormittal Nippon Steel India Limited, Ironide Minerals Pvt Ltd, ESSAR Power Limited and Altrade Minerals ( P ) Ltd were among 61 iron exporting firms that under scanner of Supreme Court following a PIL filed by Advocate Manoharlal Sharma bearing no Writ Petition(s)(Crl) No(s).334 /2020. The copy of the 53 page PIL filed by Sharma in Supreme Court is available with www.indianewsdiary.com.
The Supreme Court has sought responses from the Centre and 61 iron exporting firms on a PIL seeking a direction to the CBI to register an FIR and probe the alleged duty evasion by them in exporting iron ore to China since 2015. A bench headed by Chief Justice S A Bobde took note of the submissions of lawyer and PIL petitioner M L Sharma that the companies be prosecuted for alleged evasion of export duty by declaring wrong tariff code to export the iron ore under the Foreign Trade (Development and Regulation) Act, 1992. The bench, which permitted the petitioner lawyer to argue in person the PIL, was told that iron ore smuggling to China has been taking place as these companies have been exporting them without paying 30 percent export duty.
The PIL said the Ministries of Commerce and Finance control and regulate the export policies and decide as to under which Harmonized System (HS) Codes each good will be exported.It said the government had set up a firm with the name of KIOCL to use low grade iron ore and export them under the duty free Tariff HS code 26011210 which is exclusively prescribed for KIOCL.
The PIL said under Foreign Trade (Development and Regulation) Act, 1992, tariff HS CODE NO. 26011100 was prescribed to export ‘all other kind of iron ore’ subject to payment of export duty at the rate of 30 per cent. The firms were wrongly allowed to export iron ore using the tariff code being used by KIOCL and as a result crores of rupees have been cheated by them, it said.
The ministries of commerce and finance, customs department and 61 companies have been hand-in-glove and the firms have been smuggling millions tons of iron ore @ iron ore pellets to China in violation of various laws by using Tariff HS Code 26011210 instead of 26011100 and evading 30 per cent export duties since 2015 till date, the PIL said.
It alleged violation of the Customs Act, the COFEPOSA, the Foreign Trade (Development and Regulation) Act and certain penal provisions relating to cheating and forgery and sought a court-monitored and time-bound CBI probe against the companies.
Be further pleased to issue writ of mandamus to respondent no.1 & 2 (ministries) to issue show cause notice to the all smugglers/ accused persons…to impose and recover Rs 7,08,000 crores penalties, jointly & severally, from exporters.., the plea said. It said export duty evasion on iron ore export to China has been continuing since 2015 and the Centre, on being told about this, did not issue even show cause notice to them and refused to stop said smuggling.
The PIL said Ministry of Commerce and Finance control and regulate export policies and control export of various goods within prescribed Harmonized System (HS) Codes for each goods. Custom departments,who control and charge export duty as per used HS Code Number, are worked under Ministry of commerce &Ministry of Finance. Companies whose directors, chairman, C.E.O. , Knowingly and deliberately having hand with the officials and others, have been smuggling millions tons of Iron Ore @ Iron Ore Pellets to China contra to the FDRA-92 declaring/usingTariff HS Code 26011210 instead of 26011100 & evading 30% export dutiessince 2015 till date.
Ministry of commerce r (established and run Federation of Indian Export Organization for Short “FIEO”) have also declared name of the 54 Indian companies, (annexed P-13) who have been supplying Iron Ore Pellets via HS code 26011210. It’s an admitted fact by the Ministry of commerce That respondent no.4 to 65have been supplying/ smuggling regularlyIron Ore Pelletsunder HS code 26011210 declaring wrong HS code for evading 30% export duty. It informed to the all concerned state and central government authorities via letter dt.14.09.2020 (P-9) and another letter / legal notice dt. 20.09.2020 (P-10)about the impugned smuggling of the Iron Ore pellets to China with request for action , penalty and prosecution. Petitioner filed a criminal complaint dt.9.10.2020 (P-12) to the C.B.I. But till date no action is done.
“That cause of Action arose to the petitioner on 8.10.2020 as well as on 9.10.2020 when despite being informed by the Petitioner, respondent no.1,2 &3, (central & State Ministry, agencies) and RESPONDENT NO.3 C.B.I. did not issue show cause notice to the respondents no.4 to 16 and others against the smuggling of Iron Ore Pellets to China since 2015 till date and did stope said smuggling and also did not impose/recover 5times penalties aboutRs. 7,08,000 croresfrom them under FTDRA-92 couple with further penalties and prosecution under Custom Act-1961&COFEPOSA-1974. It’s a clear violation of Art 21& 14, denial to apply criminal law/ actionagainst the above said high profile smuggler companies which is a serious financial injuries to the consolidated fund of India and citizen of India,” it said.
Companies have been supplying Iron Ore @Iron Ore Pellets declaring/ using HS Code 26011210. Federation of Indian Export Organisations at New Delhi is a part of Ministry of commerce who have issued a list, filed P-13 &e-mail filed P-14 a declaration of export under HS code name of these above mentioned firms to supply Iron Ore pellets under HS code 26011210. Therefore R-1 admission need not to be proved that r-4 to 65 has been evading to pay 30% export duty by declaring falsely wrong HS code 26011210 which is a duty-free HS code specially prescribed for KIOCL only.v Therefore, it’s a clear case of smuggling under a planned conspiracy misusing of HS code 26011210 liable to be prosecuted as per law, it said.
Because bare reading of Schedule-2 it is clear that HS code 26011210 is prescribed exclusively for KIOCL. Other than KIOCL no entity can use HS Code 26011210 for the export of Iron Ore pellets. Iron Ore pellets @ Iron ore come under HS code 26011100 subject to 30% export duty.
Because declaring wrong detail in export clearance to evade import/ export duty is an offence amount of smuggling under Custom Act and respondent companies 4 to 65 and others , their directors, chairman, C.E.O. and other concerned employees are liable to be prosecuted under Custom Act, COFEPOSA-74 and are also liable to pay penalty u/s7 of the FTDRA-92 which is 5 times value of the smuggled goods.Because Ministry of commerce knowingly and deliberately issued Press note dt.8.10.2020 which is clearly amount of protection to the smuggling and denial to take action under Custom Act r.w. COFEPOSA which is arbitrary, illegal and unconstitutional violated Art 21 r.w. Art.14 and is a protection of smuggler, an offence of abatement u/s 107 of IPC, it said.
Because bare reading notification of 2014 (P-4)amendment in entry no.104 Tariff HS Code 26011210 it is exclusively for KIOCL as follow;“Effect of this notification:“KIOCL Limited (formerly known as Kudremukh Iron Ore Company Limited) has been permitted to export its own manufactured Iron Ore pellets either by itself or through any entity authorized by them for the purpose.”Because for evasion of 30% export duty respondent no.4 to 14 & Others declared wrong entry “HS Code 26011210”in stead of 26011100 for export of Iron Ore@ Iron Ore Pellets.Declaration of a material in wrong entry isa smuggling under 113 (d) &(h-i) of the Custom act and is liable to be prosecuted u/s 135(d) of the. Custom Act.
Because export of Iron ore is restricted goods under Tariff HS Code 260111.To evade 30% Export duty accused persons exported Iron Ore using Tariff HS Code 26011210 which is duty freeHS Code, exclusively provided for KIOCL. It’s an offence of smuggling u/s 2(39) of Custom Act attract COFEPOSA and s. 11 foreign Act, recovery of penalty 5 times of the value of exported goods. Because word “all iron Ore” include pellets also and is subject of Schedule-II entry no. 102 of foreign Act which says that Export of “All Iron Ore of Fe content upto 64%” is allowed free by other then MMTC under HS CODE 260111 subject to pay 30% export duty under tariff upon HS CODE 26011100. Pellets is anIron Ore and is restricted to be exported under HS Code 260111 only.According to Entry no.102HSCode “all Iron Ore with above 64% Fe”is allowed to be exported byMMTC. Hence export of any kind of Iron Ore come under HS CODE 260111 only. Because under second schedule of The Foreign Act Iron Ore above 64% Fe is a restricted goods and can be exported by MMTC only under Tariff HS CODE 260211100. Respondent accused persons Exported Iron Ore (64-72%Fe) under disguise of Chips -Pellets (64-72% Fe) by using Tariff HS Code 26011210 exclusively prescribed only for KIOCLsince 1992. It’s a clear violation of the export Policy and law which attract 5-timepenalty upon exported goods value u/s 11 of the Foreign Act and Imprisonment up to 7 years couple with further recovery of three-time penalty upon value of evaded export duty under the Custom Act.
Because KIOCLhas been established to use Low grade Iron Ore (less 40% Fe) therefore export Tariff in HS Code 2601210 has been reduced to 0%. It’s an export policy for finishing low grade Iron Ore dumped upon all mining site and are rot cause of deadly deceases i.e. cancer, T.B., failure of multiple organs, failure of kidney and lungs. But smugglers misused said HS code, destroy object which is made for life protection to reduce dumped unused Iron ore Lump/ solid west and others ( below 45% Fe) for financial gain and hit indirectly life of the citizen of India and left them die from pollutions due to low gradeIron Ore fine & lumps dumped on Mining sites in all over India. Its also a heinous offence against humanity must be prosecuted accordingly.Because by conversion of shape of Iron Ore lump as chips/ pellets, itdoes not change its chemical/ original identity “Iron Ore”.
Because illegal export of Iron Ore has been going on since 2015 in more than 9 states, i.e. Odisha, West Bengal, Maharashtra, Chhattisgarh, Jharkhand, Karnataka and Rajasthan. Accused persons belong to all these states as well as in New Delhi as well as in China therefore it’s a international crime and can be investigated by the C.B.I. under special S.I.T. to be formed by this Hon’ble Court for fair investigation, arrest and prosecutions of the all involved accused persons. DGFT, Custom office, state and central ministry, secretaries and officers of several ministry are involved in the impugned same.
Because custom act provides prosecution of all persons involved in the illegal export of the restricted goods. All directors of the accused exporter companies, officials, C.E.O. and others including persons residing in their offices at China to handle smuggled goods and transfer of money, are equally responsible for the smuggling under the Custom Act,1962. Because Object of the Export policy is to use low grad Iron Ore, below 40% Fe, therefore in 1976 KIOCL had been established by the government of India as an export-oriented unit for upgradation low grade Iron Ore fine/ lump contents Fe below 40% via concentration/bonification process and to manufacture Pellets (Fe 64% to 72%) out of it to export it through STE which was relaxed in 2014 in favor of KIOCL.
Because wrong declaration of HS code is for the evasion of export duty which come u/s 113 d &(h-i) and is a smuggling within s.2 (39) of the customers act. Supplier companies are smuggler who for evasion of export duty declare wrong HS code i.e. 26011210 instead of 26011100 andevaded 30% export duty upon Iron Ore Pellets. They are smugglers and is liable to be prosecuted u/s 135 (d) of the custom Act r.w. S.11 &12 of the Foreign trade (development & regulation)Act-1992.Because impugned evasion of duty also attracts money laundering act and is liable to be prosecuted accordingly. That the petitioner has not filed any other petition or similar petition in any High court or before this Hon’ble Supreme court for the relief as prayed for.That due to corona scenario unattested affidavit is being filed in support of the present writ petition and attested affidavit will be filed after corona scenario will be over, it added.
The PIL urged the SC to issue writ of mandamus to C.B.I. to register a F.I.R. u/s 135 of the Custom Act 1962, U/s 9 of COFEPOSA 1974, u/s 11 of the Foreign Trade (Development and Regulation) Act-1992 read with S.420 & 120-B, 107 of IPC and PC Act,1988 to arrest all accused persons,( Chairman, C.E.O., directors and agents of the companies& Others ),and to investigate impugned concocted conspiracy of smuggling , duty evasions in violation of export policy, under the supervision of S.I.T framed by this Hon’ble court and to file their report before this Hon’ble court in time bound manner for further action, direction, and prosecution of all involved accused persons in accordance of law in the interest of Justice.
Be further pleased to issue writ of mandamus to concern Ministries to issue show cause notice to the all smugglers / accused persons upon petitioner’s information letters/ legal notice dt.14.09.2020 and 20.09.2020 to impose and recover Rs. 7,08,000 crores penalties,jointly & severally, from the smugglers/exporters( R-4 to R-64) and others couple with further their prosecution for evasion of export duty bydeclaringfraudulently wrong Tariff HS Code 26011210 instead of 26011100for the supply of Iron Ore @IronOre Pellets underthe Foreign Trade (Development and Regulation) Act-1992, Custom Act 1962, Cofeposa-74 r.w. 420, 120-B & 107 of IPC in the interest & justice. Be pleased to direct to provide costto the petitioner in accordance of the Lawin the interest of Justice. Pass such other order or further orders, as this Hon’ble court may deem fit and proper under the facts and circumstances of the case, it added.
