SC seeks reply from Centre, 61 firms on PIL alleging duty evasion in iron ore exports to China

New Delhi: The Supreme Court has sought responses from the Centre and 61 iron exporting firms including Essar Steel and Jindal Steel & Power 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.

"Issue notice," said the bench which also comprised Justices Justices A S Bopanna and V Ramasubramanian.

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 per cent 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".

Besides the Union ministries and the CBI, the top court has issued notices to 61 firms including Brahmani River Rellets Ltd, Rashmi Metaliks Ltd, Jindal Saw Ltd, Essar Power (Orissa) Ltd and JSW Steel Ltd.