Illegal coal mining in Meghalaya has come as a boon to cement factories and captive power plants as they allegedly did not have to pay royalty, taxes and other statutory levies, a report by an independent committee of the National Green Tribunal said.
The panel also recommended legal action against the cement factories and power plants that allegedly evaded paying an amount of over Rs 423 crore as royalty and VAT/GST on the illegally mined coal used by them.
The NGT had banned unscientific and unsafe rat-hole mining of coal in Meghalaya in 2014 though it intermittently allowed transportation of already mined coal from time to time.
Rat-hole mining involves digging of narrow tunnels, usually 3-4 feet high, for workers to enter and extract coal. The horizontal tunnels are often termed "rat-holes", as each just about fits one person.
"Illegal rat-hole coal mining in the State of Meghalaya came as a boon to these Cement Manufacturing Plants and Thermal Power Plants as it virtually exempted them from payment of royalty, taxes and other statutory levies payable on more than two-third of the coal consumed by them," the committee, headed by former high court judge Brojendra Prasad Katakey, said in the report submitted to the NGT last month.
Appointed in August last year, the committee is backed by a representative from the Dhanbad-based Indian School of Mines and the Central Pollution Control Board.
"No royalty, taxes and any other statutory levies have been paid to the State of Meghalaya on the illegally mined coal utilized by these Cement Plants and Thermal Plants during the Audit Period resulting in a huge loss to the State exchequer," said the report, a copy of which is with PTI.
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The panel has recommended that the state government, Ministry of Environment and Forest and the Meghalaya State Pollution Control Board initiate legal action against each of the cement factories and the thermal power plants who has used illegally mined local coal after a ban on the rat-hole coal mining since April 2014.
The recommendations were made after the committee found out that the cement companies and its power subsidiaries have purchased illegally mined coal in the name of "slate", a non-fuel mineral, to circumvent the ban imposed by the NGT on illegal rat-hole coal mining, the report said.
It said the panel detected a gap of 39.37 lakh MT between the quantity of coal required to produce the reported quantity of clinker and the electrical power, and the coal purchased from legal sources by these companies "has been met from the illegally mined coal".
"Demand for a huge quantity of illegally mined coal from these plants has also sustained and supported a wide scale illegal rat-hole coal mining in the State of Meghalaya in flagrant violation of a ban imposed by the NGT," it said.
By circumventing the coal mining ban, the cement firms evaded payment of royalty, contribution to the Meghalaya Environment Protection and Restoration Fund (MEPRF), GST, contribution to District Mineral Fund (DMF) and other statutory duties, the report alleged.
Upon scrutiny, the committee found out that the cement companies and their power subsidiaries have allegedly evaded Rs 423.19 crore payable on royalty and VAT/GST, it said.
The panel also came down heavily on the police and the administration for allegedly not taking any action to prevent the use of illegally mined coal by these plants.
Rather, they had tried to regularise and justify the use of illegally mined coal by the firms.
The Meghalaya chief secretary was also directed to review the quantity of clinker and power produced by each cement plant and thermal power plant and the quantity of coal purchased by each of them from legal sources to produce such reported quantities of clinker and/or power.
It was also recommended to the Meghalaya government to realise from the cement companies and their power subsidiaries who used illegally mined coal Rs 400 per tonne of coal and deposit it in the MEPRF.