Plea For CBI Probe Into Alleged Iron Ore Smuggling to China : Supreme Court To Hear In March
“Since 2020, iron ore exporters are using a duty-free tariff code exclusively reserved for a central public sector undertaking to evade 30 per cent export duty,” Advocate Manohar Lal Sharma and petitioner-in-person, claimed before the Supreme Court on Tuesday, while seeking a probe by the Central Bureau of Investigation into the alleged duty evasion by 61 companies at the time...
“Since 2020, iron ore exporters are using a duty-free tariff code exclusively reserved for a central public sector undertaking to evade 30 per cent export duty,” Advocate Manohar Lal Sharma and petitioner-in-person, claimed before the Supreme Court on Tuesday, while seeking a probe by the Central Bureau of Investigation into the alleged duty evasion by 61 companies at the time of exporting iron ore to China. A division bench comprising Justices Ravindra Bhat and Dipankar Datta directed the matter to be listed on a ‘non-miscellaneous’ day in the last week of March.
The petitioner has accused the ministries of commerce and finance, the customs department, and the iron ore exporting firms of being hand-in-glove and ‘smuggling’ millions of tonnes of iron ore to China by allowing the companies to use the duty-free Harmonized System (HS) code reserved for KIOCL Limited, which is a public company owned by the steel ministry. HS code is a standardised numerical method to classify export trade products by customs authorities around the world. Under the Foreign Trade (Development and Regulation) Act, 1992, another HS code has been prescribed for the export of ‘all other kinds of iron ore’, which is subject to the payment of export duty at the rate of 30 per cent by the exporting firm. The petitioner has claimed that the unlawful use of the KIOCL’s HS code by other exporting firms has resulted in severe loss to the public exchequer, to the tune of crores of rupees. “The single point that has to be decided by this court is whether the duty-free HS code can be used by any company other than the one it was intended for,” Sharma explained.
According to the petitioner, not only have the Customs Act, 1962, the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974, and the Foreign Trade Act been violated, but the conduct of the recalcitrant companies also attract penal provisions relating to cheating and forgery. Therefore, a direction has been sought to institute a court-monitored and time-bound investigation by the Central Bureau of Investigation. The petitioner has also highlighted the non-action of the state and its instrumentalities, who he has claimed, refused to stop the smuggling of iron ore to China.
In January 2021, the Supreme Court issued notice in the petition and sought responses from the union ministries and the bureau, as well as the 61 exporting firms implicated by the petitioner-in-person.
Case Title
Manohar Lal Sharma v. Union of India & Ors. | Writ Petition (Criminal) No. 334 of 2020