Commerce ministry to take up cement cos penalty issue with CCI.

NEW DELHI: The Commerce and Industry Ministry today said it will take up with the Competition Commission of India (CCI) the issue of cement companies "getting penalised" for idle excess capacity.

"On the issue of getting penalised for idle excess capacity, your explanation that it is the result of a sluggish demand due to economic slowdown has merit. I will certainly raise this issue at appropriate levels and also with the Competition Commission of India (CCI)," Minister of State for Commerce and Industry S Jagathrakshakan said.

He was speaking at a Cement Manufacturers' Association (CMA) function here.

On June 21 this year, the fair trade regulator CCI had slapped Rs 6,307 crore penalty on 11 cement makers. Industry body CMA was also fined Rs 73 lakh.

The cement companies charged with cartelisation are -- ACCBSE -0.17 %, Ambuja CementsBSE 1.63 %, Ultratech, Jaypee Cements, GrasimBSE 0.04 % Cements now, UltratechBSE 0.14 % Cements, Lafarge India, JK Cement, India Cements, Madras CementsBSE -0.70 %, Century Cements and Binani Cements.

Later in another report on July 30, CCI also imposed a fine of Rs 397.51 crore on Shree CementsBSE 0.40 %.

The cement producers along with their association CMA have challenged CCI's findings before the Competition Appellate Tribunal.

The tribunal has started hearing and during the last proceedings on December 6 asked the cement firms to raise their common issues on January 29, 2012, the next date of hearing.

On concerns over cheap imports, Jagathrakshakan said, the issue of zero duty on import of cement will be taken up with the Finance Ministry. Also, he said, the issue of higher state levies would be addressed.

"On tax front, I share your concern about higher state levies, royalties and zero import duty. As you are aware these issues pertain to the state governments and to the Ministry of Finance, I will certainly take it up with them," he said.

At present, there is no duty on cement imports which affects the interest of domestic players. As far as state-level taxes are concerned, they range between 12 per cent to 15 per cent.

On other demands related to cut in excise duty and extension of zero duty on Export Promotion Capital Goods Scheme (EPCG) to the sector, Jagathrakshakan said, these demands are also being considered by his Ministry.

"At this point, I can only say that in the next Budget you may expect good news on some of these fronts," he said.

Presently, imports of products under the EPCG scheme attract over three per cent duty. The industry also wants the government to rationalise excise duty rate from 12 per cent to about 6-8 per cent.


Source : economictimes.indiatimes.com