New Delhi: The state and the taxpayer are losing crores of railway revenue to freight evasion even though CNN-IBN had first reported on the freight evasion scam in September 2011. CNN-IBN has now accessed seven demand notices sent to companies in West Bengal, including the Rashmi group, which was accused of evading freight rates to the tune of Rs 660 crore.
The Railways says that the Rashmi group evades freight rates by stating that it transports iron ore for domestic purpose, while it actually transports it for export.
The South Eastern Railway has sent a demand notice to Rashmi Cement of Rs 255 crore and Rs 45 lakh against evaded freight between 2008 and 2011 and the applicable mis-declaration penalty.
Another company of the same group, Rashmi Ispat, has been asked to pay Rs 77.28 crore penalty for the same period. Neo Metaliks Ltd from Burdwan district has been show-caused for Rs 54.26 crore and MB Ispat Corporation Limited from Bankura district with Rs 149.46 crore. 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. Haldia Steel in Durgapur has been served a notice of Rs 48.19 crore.
The total demand by only one zone, South Eastern Railway, counting the notice of Rs 660 crore served earlier to Rashmi Metallic Limited in 2011, now stands at more than 1600 crore.
The extensive investigation done by Railway Vigilance, the CVC and the CBI over the past two years have shown that the practice of taking iron ore in the name of domestic manufacturing and then exporting is rampant among many rail-transporters. The question is what about evasion in other zones? For example, the CAG report on Railways for 2011-12 had unearthed iron-ore freight evasion worth Rs 1,795 crore related to the East Coast Railways.
The questions that arise are:
- Why is the Indian Railways not going after all the other evaders in other zones?
- Why is it not investigating 2011-12, when freight differential was at the maximum?
- Why has a special commission not been constituted to go after these evaders in all zones?