Millennium Post

How Railways failed to recover freight from iron ore firms

The Railway ministry’s enforcement department has failed to recover freight evaded by several iron ore firms to the tune of Rs 1603.03 crore. The South Eastern Railways has sent seven demand notices to companies based in West Bengal, including the Kolkata-based Rashmi group, which has been accused of evading freight amounting to Rs 660 crore.

In fact, the CBI has filed two cases against Rashmi group and officials of Railways and Central Excise. This group came under the scanner for alleged freight evasion and cornering huge number of railway rakes through submission of fabricated excise documents. The Railways said the Rashmi group stated that it transports iron ore for domestic purpose, while it has actually been transporting it for export. Demand notices by the ministry have also been sent to Rashmi Cement, of Rs 255 crore and Rs 45 lakh, against the evaded freight between 2008 and 2011 and the applicable mis-declaration penalty. Rashmi Ispat, listed as one of the companies in the group, has been asked to pay Rs 77.28 crore penalty for the same period.

While Ramsarup Lohha Udyog from West Midnapore and Gagan Ferrotech from Burdwan have been given notices for over Rs 34.60 crore and Rs 47.42 crore respectively, Neo Metaliks Ltd from Burdwan district has been showcaused for Rs 54.26 crore and MB Ispat Corporation Limited from Bankura district with Rs 149.46 crore. Haldia Steel in Durgapur has been served a notice of Rs 48.19 crore.

Incidentally, the ministry has overlooked the neighbouring East Coast Railway, that also transported huge amount of iron ore.
The CAG, in East Coast Railway, has unearthed freight evasion worth Rs 1,795 crore. Still, not a single demand notice has been sent by that zone.
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