Centre spikes cane levy plea

The Centre has rejected Parle Biscuits' demand for exemption from the statutory levy obligation of 10 per cent of its total sugar produce.

The government communicated its decision through a compliance affidavit filed in the Delhi High Court.

The government through its counsel, Pushkar Sood, informed the court that the Food Ministry had declined the manufacturer's demand for waiving off of the statutory levy obligation of 10 per cent.

According to him, chief director (sugar) R P Bhagria had held that the company did not hold a letter of Intent or industrial license issued under Section 11 (1) of the Industrial (Development and Regulation) Act 1951 and thus was not covered under the Incentive Scheme of 1997 and had to sell 10 per cent of its sugar produce to the government at notified levy prices.

Following the affidavit filed by the chief director (sugar), Justice S Ravindra Bhat also dismissed the contempt petition filed by the company on August 2 against the government for non-compliance of the court order.

Earlier, the court on April 17 had directed the government to dispose off the representation by a speaking order within four weeks.

To fulfill its "very high" need for sugar, the leading biscuit manufacturer in the country had set up a sugar manufacturing plant near Persendi (Mumbai) for backward integration of its main product, biscuit.

It had stated that it intended to use complete production for its captive consumption for biscuit manufacturing and, therefore, should be exempted from the system of release mechanism being operated by the government.

The company had argued that it didn't fall within the ambit of the Essential Commodities Act as it was not producing sugar for selling purposes and was covered under the Incentive Scheme-1997.

Parle had also said that it should be exempted from the operation of regulated release mechanism and allowed to use the sugar without subjecting it to non-levy (free sale) release orders being issued by the government on month to month basis.

However, the company's representation was not considered as its factory was not in existence in records of the directorate of sugar.

It may be noted that the factory is recognised only when it reports its first production to the directorate and applies for issue of the code number/short name.