CAG raps government over short levy of mining dues

The Comptroller and Auditor General of India (CAG) has rapped the state government for short levy of mining dues totaling Rs 110.74 crore, payable by mining companies who deal with excavation of iron ore, coal, chromite and bauxite, in its report for the 2012-13 fiscal.

National Aluminium Company (Nalco) came out as the company with biggest dues, calculated at Rs 46.52 crore. The company paid bauxite royalty at the rate of average alumina content, while as per provision in the mining rules, it had to pay royalty based on highest alumina content of the excavated mineral, the report said.

"After audit reported the matter (in July 2014), the government stated (in October 2014) that DDM Koraput raised demand of Rs 46.52 crore on the lessee towards differential dues of royalty", the Central auditor said in its report for revenue sector of government published recently.

The cases of short levy of mining dues varied from excess mining to error in determining royalty.

CAG said, the steel and mines department should have recovered Rs 33.02 crore from Mahanadi Coalfields Ltd (MCL) since it was evident that there were excess production of 600,000 tonne coal beyond the approved mining plan in 2012-13.

The state government said, the coal miner had upgraded its mining plan later during the financial year and denied that the additional 600,000 tonne could not be classified as excess mining. But CAG said, the upgradation was meant for the following year and should not be applied for the year under scrutiny as per mining laws.

However, in another case related to MCL, the state government conceded that there was short levy of Rs 4.99 crore, due to mistake in assessing grades of coal. "The government has stated that steps are being taken to realise the demanded amount", the auditor said in the report.

CAG detected that a chromite mines lease holder tried to hide some low grade ore extracted by it in order to pay less royalty. "The assessing officer while assessing royalty on chrome ore for 2012-13 ignored the quantity of chrome ore shown as tailing loss by the lessee for levy of royalty. This resulted in short realisation of royalty of Rs 8.07 crore", it observed.

Similarly, in case of iron ore mining, the steel and mines department failed to detect grades of ore extracted by state-run Odisha Mining Corporation (OMC) and hence, got Rs 5.94 crore less royalty during 2012-13.

The government did not reply to the query sent by the auditor in both these matters until November 2014, it added.