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Cement firms get a week's grace to pay 10% of penalty

Source : BUSINESS_STANDARD
Last Updated: Wed, Jun 12, 2013 20:35 hrs
A labourer unloads cement sacks from the wagon of a train at a yard in Kolkata

The Supreme Court today refused to give interim relief to cement manufacturers in their appeal against the interim penalty imposed on them on cartelisation charges, confirmed for now by the Competition Appellate Tribunal (CAT).

The CAT had told the companies to pay 10 per cent of the total Rs 6,300-crore penalty imposed by the Competition Commission of India (CCI) by June 16; it posted their main appeal for August. The manufacturers appealed against this to the SC, which decided to only extend the deadline for payment from June 16 till June 24. However, the court insisted on their complying with the CAT's interim order.



The order was imposed by CCI against 11 cement majors (including ACC, UltraTech and Ambuja) and their association. The apex court refused to lift the penalty order or reduce the rate, despite long arguments over two days by senior counsel Abhishek Singhvi for UltraTech Cement and Ranjit Kumar for Jaiprakash Associates.

According to the modified order, the amounts shall be deposited with the tribunal and kept in a separate fixed deposit with a nationalised bank. The deposit shall be renewable after six months. The amounts deposited, with interest, shall be dealt with by the tribunal at the time of the disposal of the appeals of the cement companies.

The SC bench of judges Gyan Sudha Misra and S J Mukhopadhyaya, in the order narrating the arguments of the cement companies, said if the penalty was removed, it would amount to allowing the appeals of the companies. They did not go into the merits of the case pending before the tribunal.

The case was originally filed by the Builders Association of India before the CCI, alleging cartelisation by the cement companies. The director general (investigation) of the CCI found evidence of formation of a cartel by big cement companies, with capacity utilisation held down to control prices. The penalty was calculated on the basis of the annual turnover of the companies in question, over a certain period. The finding was challenged in the appellate tribunal, which passed the order to pay the interim penalty as stated.

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