The Commerce and Industry Ministry on Tuesday 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.

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

The cement companies charged with cartelisation are —— ACC, Ambuja Cements, Ultratech, Jaypee Cements, Grasim Cements now, Ultratech Cements, Lafarge India, JK Cement, India Cements, Madras Cements, Century Cements and Binani Cements.

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

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, 2013, 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 and 15 per cent.

(This article was published on December 18, 2012)
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