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HC on Tata royalty row

Ranchi, March 12: Jharkhand High Court has upheld the state government’s decision to charge royalty from Tata Steel for using processed mineral and washed coal from leased areas in Ramgarh.

Today’s decision of the high court will beef up state coffers by approximately Rs 400 crore in royalty dues from November 2000.

Tatas had objected to the decision of the state government to charge royalty on the entire coal procured from the captive mine of West Bokaro Colliery spread over 13,007 bighas in various villages of Ramgarh district.

The state government felt that since the coal was processed in the washery plants within the leased areas, Tatas was liable to pay royalty as per the provisions of the Mineral Concession Rules and MMDR Act. Tatas claimed that the coal produced from the captive coal mine was for its sole use. The company also owned two washery plants within the leased area where the raw coal produced from the mine was washed to improve quality before being sent to its steel plant in Jamshedpur.

Tatas had objected to the decision of the state government to charge royalty on the entire coal procured from the captive mine. The government felt that since the coal was processed in the washery plants within the leased areas, Tatas was liable to pay royalty as per the provisions of the Mineral Concession Rules and MMDR Act.

Tatas claimed it was only liable to pay royalty on the tonnage of washed coal, when it was removed from the washers and not on the raw coal mined.

In their 87-page judgement, the court of Chief Justice R. Banumathi and Justice Aparesh Kumar Singh upheld the decision of the state government and observed that the steel company was liable to pay royalty on the raw coal mined.

The court held that the processed mineral, namely, clean coal which was the mineral removed from the leasehold area to the petitioner's steel plant at Jamshedpur.

The rest of the products, namely middlings, tailings and rejects, were either consumed at the company’s power plants or sold to outside consumers.

Therefore, the bench held that Tata Steel was liable to pay the royalty on the raw coal mined.


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