The Hindu Business Line : 4 sugar mills issued show-cause notice for excess sales

The Centre has issued show-cause to four mills in western Uttar Pradesh (UP) that have been found to have sold sugar in excess of the free sale quotas (FSQ) allocated to them.

"We have sent show-cause to four mills and they have been given three weeks' time to reply to the notices," a top Food Ministry official told Business Line. He, however, refused to divulge the names, while confirming that all the four were mills based in western UP. "It is a sensitive matter and I cannot say anything more," he added.

The Ministry had only last month sent teams to inspect the stocks position of about a dozen mills in western UP. The inspection involved detailed physical verification of stocks at the factories and perusing excise records to report any discrepancy vis-à-vis the information being submitted to the Sugar Directorate.

The mills included the factories of Bajaj Hindusthan, Triveni Engineering & Industries, Simbhaoli Sugar Mills, Agauta Sugar & Chemicals, Mawana Sugars, Dhampur Sugar, Shakumbari Sugar & Allied Industries (Jagran Group), SBEC Sugar (U.K. Modi Group), Sir Shadilal Enterprises and Tikaula Sugar Mills.

Under the Sugar Control Order, the Centre decides how much sugar a mill can sell in the open market during any particular month. Mills are not allowed to dispose of or even remove sugar from their bonded godowns without an FSQ release order from the Directorate.

"The mills to whom the notices have been sent sold excess sugar during the festival period last month. They wanted to make the maximum out of the peak festival demand in the Delhi market and dispose of stocks before the start of the new crushing season," the official said. In UP, mills begin crushing operations from early November.

In the event of factories selling less than the FSQ releases, the unsold quantity is automatically converted into levy sugar at lower rates for the public distribution system. In case of excess sales — as it has apparently happened now — the Government can invoke Section 7 of the Essential Commodities Act. This provides for imprisonment of not less than three months and extendable to seven years, besides imposition of fines.