Aniruddha Bose, J. - (1.) IN the year 2008, a new rate system was adopted by the Railway authorities for transportation of iron ore, in the Rates Circular No. 24 of 2008, issued on 12 May 2008. It was provided, inter alia, in this Rates Circular: - "4. The classification of Iron Ore destined for domestic consumption is Class 170. Accordingly following footnote should be inserted below the Commodity Head "Mines and Ores" at S. No. 13 of the IRCA Goods Tariff No. 45 Pt. I (Vol. 11) Iron Ore Domestic will be charged at Class -170 and Iron Ore for other than domestic consumption will be charged at Class -200X" The same Circular also laid down certain conditions which were to be fulfilled for availing the rate specified for "Iron ore Domestic", which was to be charged as per class 170. "Iron Ore for other than domestic consumption", carried a much higher freight rate. There has been subsequent variation of the conditions and also manner of classification of the said item in two successive Rate Circulars, No. 30 of 2008 and 36 of 2009. I shall refer to these circulars later in this judgment.
(2.) SUCH freight rates are fixed in relation to individual commodities in terms of Sections 30 and 31 of the Railways act, 1989 (the 1989 Act), which provides: - "30. Power to fix rates. (1) The Central Government may, from time to time, by general or special order fix, for the carriage of passengers and goods, rates for the whole or any part of the railway and different rates may be fixed for different classes of goods and specify in such order the conditions subject to which such rates shall apply. (2) The Central Government may, by a like order, fix the rates of any other charges incidental to or connected with such carriage including demurrage and wharfage for the whole or any part of the railway and specify in the order the conditions subject to Which such rates shall apply. 31. Power to classify commodities or alter rates. The Central Government shall have power to - (a) classify or reclassify any commodity for the purpose of determining the rates to be charged for the carriage of such commodities; and (b) increase or reduce the class rates and other charges." These Rates Circulars have been issued by the Railway Board constituted under the provisions of the Indian Railway Board Act, 1905 (the 1905 Act). The power of the Central Government in terms of Sections 30 and 31 of the 1989 Act has been vested in the Railway Board by a Statutory Order bearing No. 990 issued on 31 March, 1999 under Section 2 of the 1905 Act. A copy of the said notification as also the copy of the Rates Circular No. 24 of 2008 have been produced before this Court on behalf of the first respondent in course of hearing.
(3.) THE Rates Circular No. 30 of 2008, which had been issued replacing Rates Circular No. 24 was subsequently superseded by the Rates Circular no. 36 of 2009, by the Railway Board under memorandum No. TCR/1078/2007/3 dated 1 June 2009. As per this circular, Iron Ore was to be charged at the rate specified against class 180. This Circular in substance raised the freight rate for iron ore. The same Circular also introduced a distance based charge, applying a progressive rate -reduction method, postulating lower charge for longer distance. Iron Ore meant for domestic consumption, however, was to be charged at a flat rate as per class 180, subject to fulfilment of certain conditions specified therein. So far as the present proceeding is concerned, Rates Circular No. 36 of 2009 is relevant and this Circular stipulates: - "RATES CIRCULAR NO. 36 OF 2009 GOVERNMENT OF INDIA (BHARA T SARKAR) MINISTRY OF RAILWAYS (RAIL MANTRALAYA) RAILWAY BOARD No. TCR/1078/2007/3. New Delhi, dated 01.06.2009 The Chief Commercial Managers, All Indian Railways. Sub: Classification of Iron Ore In supersession of Rates Circular no. 24 & 30 of 2008 and 25 & 34 of 2009, Sanction of the Central Government is hereby accorded to the following. 1. Iron Ore will be charged at Class 180 for train load movement. Besides, following Distance Based Charge will be levied on this traffic. The aforesaid Charge will be leviable on base freight rate mentioned in the Goods Tariff and shall form part of Normal Tariff Rate (NTR). In certain cases the NTR for a particular distance may become less than that for the lower distance. In order to ensure that the NTR per tonne over longer lead is not less than the NTR per tonne over shorter lead, NTR for each distance slab should not be less than the highest NTR in the lower slab. 2. Notwithstanding Para 1 above, traffic of Iron Ore meant for domestic consumption for manufacture of Iron and Steel as well as Cement will be charged at Class 180 without levy of Distance Based Charge prescribed in Para 1 above, subject to fulfillment of conditions laid down in Para 3 of this circular. 3. Following conditions must be complied with while booking as well as while granting delivery of Iron Ore traffic for domestic consumption in terms of Para 2 above. (A) Iron ore traffic booked to private sidings (including assisted sidings) of Iron and Steel manufacturing Units (including integrated steel plants and mini steel plants etc) and Cement Units: Following procedure will be followed for registration of indents and issue of Railway Receipts, submission of documents and effecting delivery. I. 'One Time' submission of documents Certified copies of documents as prescribed below should be submitted by the manufacturing unit (consignee) to the Senior Divisional Commercial Manager of the division in which the loading takes place. a) Industrial Entrepreneur Memorandum (IEM) or certificate from Joint Plant Committee under Ministry of Steel indicating the licensed capacity of the plant or a copy of the Memorandum of Understanding (MOU) between the Plant and the associated Ministry (in case of Public Sector Undertakings only); b) Consent For Operation (CFO) from Pollution Control Board for the current financial year or a copy of the application addressed to the concerned PCB for renewal of CFO for the current year duly acknowledged by the PCB together with a CFO for any of the preceding years not more than three years old; c) Factory license for the current financial year or copy of the application addressed to the Inspector of Factories of the concerned state government duly acknowledged by the addressee together with a copy of the factory license for any of the preceding years not more than three years old; d) Certificate of registration under Contract Labor Act or an affidavit under oath certifying that this registration is not legally required to be done by the unit under the provisions of the Contract Labor Act. e) Central Excise Registration Certificate f) Monthly Excise Return for the month prior to the current month. II Periodic Submission' of documents Certified copies of following documents should be submitted by the manufacturing unit (consignee) to the Senior Divisional Commercial Manager of the division in which the loading takes place. a) The company will need to submit copies of the relevant Monthly Excise Returns on a quarterly basis. In case of new plants not having any earlier monthly excise return, the unit should furnish a certificate from the excise department mentioning non -commencement of production in lieu of the monthly excise return. b) Failure in submission of any of the prescribed excise related document will result in summary disqualification from eligibility under Para 3(A). III Submission of Affidavits The manufacturing unit will be required to submit an affidavit (only once together with the documents submitted "one Time') on non -judicial stamp paper of Rs. 100/ - in the format given below certifying that only iron ore for domestic consumption will be received in their siding. "It is certified under oath that all consignments of iron ore received at - - - - -siding is meant for domestic consumption at the manufacturing unit - - - - - - -located at - - - - - - -with Factory registration no - - - - - - - - -and Cenvat no - - - - - - -. It is also certified that the iron ore received at - - - - - - - - - -will not be exported out of India under any circumstances. However, if at any stage, Iron Ore received at this siding is intended to be used wholly or partially for export purposes, the company undertakes to advise the concerned Senior Divisional Commercial Manager well in time before receipt of such consignment in their siding." IV Issue of Railway Receipt Railway receipt will be issued only in the name the consignee in respect of whom the prescribed documents have been submitted by the consignor to Railways under provisions of Para 3(A). Delivery of such consignments will only be made to the consignee mentioned on the railway receipt. Non conformity with these conditions will result in charging freight at Class 180 plus Distance Based Charge and recovery of undercharges will be made. V Procedure for manufacturing units receiving iron ore for domestic consumption as well as for export On receipt of an advice as prescribed in the text of the affidavit in Para 3(A) III that Iron ore booked to such sidings is to be used wholly or partially for export, provisions of Para 3(B) will apply for each rake booked thereafter. VI Submission of Indemnity Note The consignee must also furnish a stamped indemnity note (only once together with the documents submitted "one Time') to indemnify the railway against misdeclaration of export iron ore as domestic iron ore for non payment of Distance Based Charge or any other misuse of rules prescribed by Railways from time to time. (B) Iron ore traffic booked to terminals other than private sidings (including assisted sidings) of Iron and Steel manufacturing Units as well as Cement Units: Following procedure will be followed for registration of indents and issue of Railway Receipts, submission of documents and effecting delivery for each rake independently. It may be noted that no 'One Time' submission of documents is permitted in this category of traffic. I Registration of Indents; (a) At the time of registration of each indent, consignor will make an endorsement in the forwarding note declaring that the consignment is meant for domestic consumption within India. (b) At the time of registration of each indent, consignor will furnish certified copies of all the documents mentioned in Para 3(A) I as well as a copy of the Monthly Excise Return for the month prior to the current month for each rake. These documents should be submitted by the consignor on behalf of the consignee. (c) Conditions (a) and (b) above will also be required to be fulfilled by consignors whose indents have already been registered. II Submission of Affidavit by consignor before issue of Railway Receipt Consignors will give an affidavit on non -judicial stamp paper of Rs. 100/ - which should inter alia include the following averment. "It is certified under oath that the consignments of iron ore registered under Indent No - - - -dated - - - - - - -, invoice no - -and RR no - - - - - - -at - - - - - - - -Goods Shed/siding and loaded on date - - - -in wagon nos. - - - - - - - - -is meant for domestic consumption at the manufacturing unit - - - - - - -located at - - - - - - -with Factory registration no - - - - - - - - -and Cenvat no - - - - - - -. It is also certified that this consignment is not meant for export out of India and this consignment will not be exported out of India under any circumstances." III Submission of Affidavit by consignee before taking delivery After arrival of the consignment at the destination terminal, consignee will be given delivery of the consignment only after he furnishes an affidavit on non -judicial stamp paper (for each rake) which should inter alia include the following averments. "It is certified under oath that the consignments of iron ore received on date - - - -with RR no - - - -in wagon nos. - - - - - - - - -at - - - - - -Goods shed/siding is meant for domestic consumption at the manufacturing unit - - - - - - -located at - - - - - -with Factory registration no - - - - - - - - -and Cenvat no - - - - - - -It is also certified that this consignment is not meant for export out of India and this consignment will not be exported out of India under any circumstances." IV Issue of Railway Receipt Railway receipt will be issued only in the name the consignee in respect of whom the prescribed documents have been submitted by the consignor to Railways under provisions of Para 3(B). Delivery of such consignments will only be made to the consignee mentioned on the railway receipt. Non conformity with these conditions will result in charging freight at Class 180 plus Distance Based Charge and recovery of undercharges will be made. V Furnishing of Indemnity Note by consignee The consignee must also furnish a stamped indemnity note to indemnify the railway against mis -declaration of export iron ore as domestic iron ore for non payment of Distance Based Charge or any other misuse of rules prescribed by Railways from time to time. 4. Other Conditions a) Under provisions of Para 3, railway receipt will be issued only in the name of the consignee in respect of whom the prescribed documents have been submitted by the consignor to Railways. b) Delivery of such consignments will only be made to the consignee mentioned on the railway receipt. c) If conditions at 4(a) and (b) above are not complied with, freight will be realized at Class 180 plus Distance Based Charge, by raising undercharges wherever necessary. CGS of destination terminal must keep a close watch on compliance of these instructions.;