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Govt on the mat over palm oil tariff value

G. Chandrashekhar

MUMBAI, Aug. 9

THE recent publication of customs notification fixing tariff values for crude palm oil, refined palm oil and refined palmolein is turning curious, even as the Government may be forced to go on the defensive if challenged over the date of actual publicati on.

While the notification 36/2001 is dated August 3, a Friday, many contend that its actual publication was much later, probably Monday, August 6 when it was available to the public. It is argued that the effective date on which the tariff value system for palm oils should come into effect shall not be August 3, but later.

Copies of purported communication from the Centre to some of the customs houses (available with Aug. 9 Business Line) make interesting revelation. From New Delhi, the notification was faxed to some customs houses much beyond the normal working hours on F riday and to at least one major port-based customs house on Monday, August 6 alongwith a covering letter signed by a Director of the Central Board of Excise and Customs (CBEC).

If the customs houses themselves had received the notification rather late in the day on August 3, there was no way edible oil importers and the general public would have had access to it on the date of the notification, some argue. Strangely, the notifi cation which appeared on CBEC Web site on April 5, disappeared the following day.

A number of importers in western and southern parts of the country have sought legal opinion about the effective date of the notification and are readying themselves to challenge the Government in the courts.

There is also widespread belief in trade circles that some influential importers had prior knowledge of the Government decision and had ensured rapid clearance of cargo last week under normal assessment, fearing burden of higher payment under the tariff value. Reacting to suspected insider information and some players taking advantage, a senior person in the trade ironically commented that ``the Government was after all transparent!''.

Should the suspicion of leakage of fiscal changes be true, it does not speak well about the internal working of CBEC and the Ministry of Finance. It may be worth investigating if there was unusually large clearance of edible oil consignments last week, p articularly a day or two prior to August 3.

Meanwhile, hectic lobbying by some influential importers has reportedly started in New Delhi. Some groups are said to have already camped in the capital to get the effective date of the notification postponed so that low-priced contracts could be cleared without applying the tariff value. Marketmen believe a major group went short (sold goods without adequate stocks or purchase cover) in a rising market and is currently in a serious financial quandary.

Interestingly, bankers financing edible oil importers have turned a worried lot over reports of investigations into irregularities in imports of edible oils. Searches by the Directorate of Revenue Intelligence have yielded incriminating documents which a re being examined. Some foreign banks with exposure to the trade have turned jittery fearing default by some importers who are their customers.