Facing de-recognition of its special economic zone (SEZ) at Hazira in Gujarat, corporate house Essar has told the government it had invested just Rs 67 crore out of the total project cost of Rs 1,000 crore in its steel facility before it received the SEZ approval.In response to queries from the commerce ministry seeking explanation as to whether it already had a functional unit at Hazira before getting SEZ status, Essar said the investment was a fraction of the overall cost, official sources said."The group said it had invested only Rs 67-68 crore of the total project cost of Rs 1,000 crore in Hazira before SEZ approval was obtained. The facility came up after that," the sources said.The commerce ministry had also asked the business house to explain its position in the wake of the revenue department demanding customs duty and detaining some of the group's officials on charges of violation of SEZ norms. The department had asked the company to pay customs duty for the goods sold in domestic market from its SEZ.Sources said the company has already paid Rs 186 crore as customs duty but maintained it had not violated any norms.An Essar spokesperson was not available for comments.The commerce ministry is carefully studying the response as the action could result in de-recognition of the company's steel facility in Hazira as an SEZ.Under SEZ rules, a developer has to file an affidavit stating that the land area of the zone is vacant and without any kind of industrial activity when the application is filed.
