CJI raises concern over flouting of mining rules

New Delhi: Voicing concern over violation of mining rules, Chief Justice of India S.H. Kapadia on Sunday suggested that there should be a price regulatory mechanism for mineral exports as several private companies in the states were flouting norms and depriving government of huge royalty.

Speaking at an international seminar on “Global Environment and Disaster Management: Law and Society” in New Delhi, Justice Kapadia said there should not just be a monitoring mechanism in charge of appraisal of mining in India but also one for pricing.

“Today, what we find, at least for over a period of last six years, that all mining plans are there but at the state level they are being flouted for some reasons. I don’t want to go for the reasons but we do not have machinery to supervise even those mining plants even for norms laid down for environment protection,” Justice Kapadia said.

He insisted that the biggest problem in the mining sector is the pricing of the minerals which are exported.

“Take the case of royalty. Time has come when the excavated minerals should be auctioned or should have price discovery mechanism. You have cross-border arms length pricing but we do not have domestic arms length pricing. The result is under invoicing,” Justice Kapadia said.

He maintained that minerals sold abroad went for a huge profit margin because there is “no exemplar” to gauge ad valorem prices when the excavated material is being exported.

He insisted that there is a huge difference between the domestic prices and the price at which it is sold abroad.

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