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The demand notice states that SAIL, the mine lease holder of Bolani mines spreading over an area of 1321.45 hectares, has undertaken production of iron ore from the mining leasehold area in excess of the lower of the approved limits of production under mining plan and consent to operate during 2000-2001 to 2010-2011.
The notice also made clear that the demand is relatable to recovery of price of minerals produced without or beyond the mining plan and consent to operate alone under Section 21 (5) of the MMDR Act, 1957 and does not include recoveries under Section 21 (5) of the said act for violation of EC (environment clearance ) and FC (forest conservation).
Opposing the notice, the Maharatna CPSU stated that for the relevant period (2000-2001 to 2010-2011), it has paid all royalty, rent and taxes to the state government. SAIL has used all iron ore extracted from the mines for the captive use in its steel plans and has never disposed of any part of it by sale or other wise.
It has challenged the demand notice on the ground, among others, that the state (of Odisha) has no legislative or executive competence to levy, impose, and demand the compensation as it has done by the demand notice.
"The demand notice is repugnant to the MMRDA and is void in view of Article 246 (I) and 248 read with List I Entry 54 of the Constitution of India.
The impugned demand notice is wholly arbitrary and ultra vires Article 14 of the Constitution", it said.
The state government has asked SAIL to the pay towards compensation under section 21( 5) of MMDR Act, 1957 for production without/in excess of the mining plan and consent to operate as rationalised by Central empowered committee (CEC) in pursuant to the Supreme court judgment of August 2, 2017.