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Illegal Procurement of Coal: Will Govt Penalise Cement Cos?

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By H H Mohrmen

The NGT Committee report came down heavily on the cement companies and coke plants operating from the state for using banned coal transported during the time when the coal ban by NGT was in operation. The illegal procurement of the mineral has not only deprived the Government of royalty due to the state, but it also indicates a blatant violation of the court order by the companies. Royalty is the tax from both major and minor minerals that is shared by the state and the respective district councils.

Not only royalty, but the companies have also defaulted in paying VAT/GST and since the coal is bought illegally for the production of cement or coke during that particular time, the companies have also deceived the Government by not paying the taxes due on the coal bought by the companies. The illegal procurement of coal by the cement and the coke companies raises a very pertinent question as to whether the State Government will continue to deal with erring companies with velvet gloves and whether the Income Tax authorities will allow them to go scot free even if they had defaulted in paying taxes that are due to the government which amounts to crores of rupees!

The truth came to light in the report of the Committee constituted by NGT which reported that the nine cement plants in the state had used 39,36,684 MT (metric tonnes) of coal from 2014-15 to 2018-19 which they have illegally procured from local suppliers. The NGT committee led by justice (retired) BP Katakey reported the amount payable by the defaulting companies as royalty to the State Government and the respective Autonomous District Councils on the about 40 lakh MT of coal bought during the audited period amounts to Rs. 256.72 crore. As per the report the State Government is also due to receive Rs. 190.92 crore which should go to the Meghalaya Environment Protection and Restoration Fund (MEPRF) on the mentioned quantity of illegally acquired coal.

This is a huge amount of money and the question is whether the State Government will simply turn its blind eye to illegal acts and deny the state the Rs. 447.64 crore that is due to the public exchequer and allow the cement and coke companies to go scot free. What about our tax man or the central taxation department? Are we going to compromise on the VAT/GST which amounts to Rs. 157.46 crore defaulted by these companies by way of purchasing illegal coal during the period of the ban? These companies committed two offences. First, they have violated the court order which also amounts to contempt of court by illegally procuring coal which was banned. Secondly, the companies did not pay royalty, taxes and other dues to the Government on the illegal consignment.

The report also reiterated that the plants did not participate in the auction of 38,000 MT of coal made by the State Government which had conducted an open auction of seized coal available near the cement plants. As per records none of the cement companies participated in the auction. The coal used was therefore illegally purchased by the cement and coke companies from the coal produced in the State, the mining and transportation of which was banned by the NGT.

The State Government’s soft corner for the cement companies is also obvious from the fact that although the Meghalaya State Pollution Control Board has as per National Air Monitoring Program installed units to measure air quality in at least ten strategic locations in different parts of the state but for reasons best known to the MSPCB none has been installed in any location in the Narpuh area. The MSPCB has almost on a regular basis released the air quality index recorded from these ten locations but no report has ever been issued with regards to the AQI in the Narpuh area despite the eleka having many cement plants. If air quality test units were installed in the different industrial areas, why is none installed in any part of Narpuh? Are the lives of the people in the area so insignificant that the MSPCB does not consider it important to ensure that they have clean air to breathe? Obviously the government considers the profit of the companies to be more important than the lives of the people otherwise what is preventing it from testing the air quality in the area and therefore ensure that people enjoy good quality air.

The cement companies continue to be the Government’s favourite business entity in spite of some companies defaulting even in paying the Meghalaya Energy Company Ltd its dues for supplying electricity to the cement plants. And now when not even three months have lapsed since the MSPCB organised a failed public hearing for the proposed expansion of mining lease for limestone mining by Star cement at Brichyrnot, the Board has again notified a new date for the same hearing on January 30, 2020. It may be mentioned that the proposed hearing which was due to be held in October last year had to be cancelled because of the public protests against the hearing, but the Board’s decision to reorganise the hearing on behalf of the cement company raises many questions.

Why is the Board in a hurry to grant mining lease to the cement plant? Why can’t it wait for even six months to fix the date of the next hearing? Is there something than what meets the eye with regards to cement plants and limestone mining? The cement companies in the Narpuh area in particular had promised to bring development to the area, but what development are we talking about when the water is polluted and the air people breathe is not even tested despite having more than eight cement plants in one single area. None of the cement plants has even provided health care centres for the people in the area. The only health centre even in Lumchnong is a Government run health centre. The nine cement companies cannot even come up with a modern hospital equipped with state of the art technology in the area. For education, the youths of the area still have to travel to places like Khliehriat, Jowai, Shillong or Silchar for higher education.

The companies have also promised to provide seventy percent of jobs for the local people in their units but everybody knows that it is an empty promise. This was brought to light several times in the past by many pressure groups in the district. If at all the local people are employed it is alleged that they are only engaged in lower grade posts. The other question is also about the companies’ corporate social responsibility (CSR). The government is yet to make public as to where and how much the different companies have contributed their CSR fund. Who and how has the public benefited from the different companies CSR?

The other pertinent question is what benefit has the State and the local people gained from the presence of the cement companies in the area? These companies have not only plundered our environment but now they have hoodwinked the state and deprived it of its revenue and avoided paying its dues to the state. The different cement companies are taking the state and its people for a ride. Now it remains to be seen if the companies will finally pay their dues to the State.

So what is the Government’s next course of action if the companies refuse to pay the royalty, tax and the environment funds? Will the Government and the Taxation Department continue to turn their Nelson’s eye to the illegal activities and deny the revenue due to the them? But what can one expect from a two-faced MDA government? The Conrad led Government’s double standards in dealing with the ecologically sensitive areas is obvious when on one hand he is talking about developing Nokrek biosphere reserve and turning it into carbon neutral tourist spot while on the other hand encouraging the cement companies to mine limestone close to the Narpuh Wildlife Sanctuary. If this is not hypocrisy then what is? And the CM has the gumption to agree to inaugurate the Lukha festival when the Government has murdered the river twice over!

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