HC admits petition on sugar export fraud

The Mumbai High Court has admitted a writ petition alleging inaction by the Union and the Maharashtra governments in recovering Rs 201 crore owed by the co-operative sugar factories, which diverted to the local market nearly six lakh metric tonnes of sugar meant for exports.

The writ petition said the sugar factories evaded excise duty of Rs 51 crore and unduly benefited from an incremental domestic price of Rs 150 crore.

The petition was filed by Shiv Sena's member in the state legislative council Kanhaiyalal Gidwani.

Gidwani said, "The Chief justice C K Thakker has directed the Union and the state governments to submit their replies in an affidavit in four weeks on what action has been taken against the errant sugar mills."

Gidwani's petition said, "Various sugar mills in Maharashtra (in fiscal years 2000-01 and 2001-02), in collusion with some exporters, obtained release orders for large quantities of sugar for export.

"A report on the factory-wise inspection revealed that a large amount of excise duty had been evaded and it was yet to be recovered from the errant mills."

The petition said in the fiscal years 2000-01 and 2001-02, the directorate of sugar, New Delhi, had issued export release orders for 7,53,052 metric tonne while only 1,50,000 metric tonne was actually exported.

The remaining six lakh mertic tonne was diverted to the domestic market.

"The office of the chief commissioner, central excise and customs informed me (Gidwani) through a letter that 26 sugar mills in Maharashtra could not furnish proof of export of sugar and may have diverted the same to the local market. The commissioner of sugar also submitted a report detailing the loss caused by 45 defaulting sugar mills. However, all along it appears that investigations and recoveries of the excise dues have been effected very reluctantly and at a tardy pace.

"The Maharashtra government has failed to initiate suitable action against the defaulting sugar mills despite receipt of directions from the Union government," the writ petition said.