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Rubber trade urges rethink on import entry routes

Mohan Padmanabhan

KOLKATA, Nov. 22

AFTER the recent verdict by the Bombay High Court, setting aside all restrictions on import of natural rubber (NR) under Advance Licence, the rubber goods sector is of the view that there ought to be a rethink by Government at least on the decision to allow rubber imports through Kolkata and Visakhapatnam ports only. Both these ports are far removed from the rubber consuming centres.

In a recent communication, Mr M.F. Vohra, Chairman of Capexil, has urged the Rubber Board to re-examine the ban on natural rubber import (by paying duty) through any seaport in India other than Kolkata and Visakhapatnam. Capexil, which has rubber products as a major item on its basket, has urged the Board to also look into the issue of rubber cess, which was being levied selectively.

Mr M.F. Vohra, Chairman of Capexil, and a major exporter himself of rubber products, told Business Line that while natural rubber imports were being restricted, and made difficult for Indian industry to procure, natural rubber exports, at a price of $750 per tonne, was being allowed through the Kochi port. The import restrictions in an open economy, according to him, displayed a clear bias against industry which uses natural rubber and exports more than Rs 2,200 crore worth of rubber manufactured goods, earning valuable foreign exchange for the country.

He said against an average annual natural rubber production of 6.5 lakh tonnes in the country, imports have been a minuscule 20,000 tonnes, which should have no impact as such on domestic prices. Asked on the situation post facto, the court order lifting natural rubber curbs under AL, he said representations were being made to concerned authorities to allow duty-free imports of natural rubber for export production in the wake of the landmark judgement by the court.

On a petition by an SSI rubber manufacturer, challenging the DGFT circular restricting duty-free import of NR, especially when statutory provisions of the prevailing import policy specifically permits duty-free import of NR under Advance Licence, the High Court held that ``the action on the part of DGFT in purporting to prohibit duty free import of natural rubber is totally in breach of the policy decision taken by the Central Government, and, therefore, the circulars and the public notice issued by DGFT to prohibit import of natural rubber under Advance Licence must be held to be null and void, without jurisdiction and liable to be quashed and set aside''.

Citing the verdict by the Supreme Court in the case of University of Kashmir & others vs Mohammed Yasin & others (1974), the high court further held that the "...the impugned circulars and the public notice amending the Hand Book of Procedures, in fact, amount to amend the policy by an authority other than the Central Government which is not permissible in law. Hence, the impugned circulars and the public notice issued by the DGFT being without authority of law, are liable to be quahwed and set aside''.

On the issue of cess, Mr Vohra said, as per the Rubber Act, a cess of Rs 1.50 per kg has to be collected on all rubber produced in India. He said on a simple reading of the Act, it is apparent that the Rubber Board has no authority to waive this cess. Mr Vohra, in his capacity as chairman of Capexil, has urged Mr S.M.Desalphine, Chairman of Rubber Board, to take corrective action to collect cess on the natural rubber already exported from India as also the quantities that may be exported in the future.

On the domestic price front, he said the much needed Indian RSS 4 grade natural rubber was still commanding a price of Rs 37 per kg, far in excess of the minimum support price of Rs 32, as already announced. Prices of NR in the international market, Mr Vohra observed, were still quite high. Describing the scenario as a happy one for the planters, he urged the Rubber Board chairman to recommend (to Government) removal of all restrictions now hurting the industry badly. Mr Vohra expressed the hope that the Board would take up these issues at its next meeting, scheduled to be held on November 30, 2002.

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