New Delhi: A massive scam of illegal iron ore export from Karnataka worth Rs 40,000 crore by several unlicensed private parties has been unearthed by the Law Ministry, citing a loophole in a 2014 government notification exploited by them to go in for the exports without paying a single rupee as export duty for the past over six years.
The Congress on Thursday swooped over a report by Dr RS Shrinet of the Law Ministry, submitted to the government on September 10 asking it to "take appropriate action as per law" in what is estimated to be the loss of around Rs 12,000 crore to the exchequer in export duty.
The private parties did not pay 30% duty on the iron ore export under the notification dated 29.09.2014, allowing duty-free export if the ore is converted into pellets, though the Law Ministry found they were not entitled to the benefit extended through the notification.
The Law Ministry report notes that the duty-free export of pellets was allowed only to Kundremukh Iron Ore Company Limited (KIOCL), a Government of India undertaking under the Steel Ministry having own iron ore mine in Chikamangaluru district and a pellet manufacturing plant at Mangalore. The iron ore pellets are not available in the open market as KIOCL is the only company licensed to produce them and hence a probe is likely to find out how the private parties were able to lay hands on the pellets to export them to make bumper profits.
A cap on the export of only the iron ore with less than 64% concentration of Iron (Fe) was in vogue for a long time to ensure sufficient supply of the high-quality iron ore is available for the growth of the indigenous steel plants. The Metals & Minerals Trading Corporation of India (MMTC), a government undertaking, was the only PSU allowed to export iron ore and it too required the government's permission if the ore exceeded the cap.
Only KIOCL having a pellet plant was allowed to export the pellets but required to pay 30% duty which was changed in the 2014 notification to allow it to export the pellets manufactured by it free instead of "STE" of the export duty levied till then. The Law Ministry unearthed the scam when the Steel Ministry sought its opinion on "what is the effect of the word 'free', substituted for the word 'STE' and who are entitled to export the pellets without paying any duty."
Congress spokesman Pawan Khera, who released the documents at a Press conference here on Thursday, said this is Modi-made iron ore export scam of Rs 12,000 crore by the same Prime Minister Modi who talks of "Make in India" but he is caught selling India and notification issued by his government in 2014 soon after coming to power exposes the BJP-Corporate nexus in the way the government helped some private players in the mining industry.
He said the private players have not been reprimanded or questioned as they continue to flourish by exporting the iron ore pellets and so much so that even the private firms having own captive mines for internal use have seized the opportunity of exporting the iron ore pellets, in collusion with the ministry officials, who are to ensure that they do not sell any part of the iron ore dug up except for own use.
Khera said the iron ore is an essential national resource whose theft by a select private company has been allowed by the government. He said these private players are liable to pay a penalty of Rs 2 lakh crore for the gross illegality under the Foreign Trade Development and Regulation Act, 1992, but they won't be touched because they have the patronage of the government.
He wanted the government to explain why high-quality iron ore with greater than 64% iron concentration allowed to be exported contrary to earlier practice, release the detailed list of the private firms exporting iron ore without permission since 2014 and what action has been initiated against the Steel Ministry officials who allowed the illegal export as pellets. He also wanted to know whether the stakeholders were kept in the loop while removing the export duty on the iron ore pellets.
"The people have lost trust in this government. Governance is not done by selling country’s pride. This expose once again proves that for Narendra Modi, it is corporate first and India last," Khera added.