Shillong, Sept 16: The state government has failed to realize Rs 36.12 crore of Meghalaya Minor Mineral Reclamation (MMMR) Fund from cement companies on utilization of limestone from non-leased areas, the CAG report revealed.

In compliance, the State Government notified the Meghalaya Minor Mineral Reclamation Fund (MMMRF) and the amount to be credited in the MMMRF would be 10 % of the state proceeds.

Collection of money for MMMRF was to be done at the time of collection of royalty by the DFO.

As per government’s directives, the Forest Department is responsible for collection of MMMRF contribution on limestone.

Further, the High Court of Meghalaya in its judgment dated June 30, 2015 prohibited all mining activities in the state and instructed to create a fund for reclamation in the interest of sustainable development.

The purpose of this reclamation fund would be to undertake activities directed towards rectifying the damage caused to the environment due to mining activities.

The CAG in its report said the records of the State Mining Department showed that out of 15 cement companies operation in the state, 12 cement companies had leases for limestone from leased areas. Three other cement companies, however did not have any leases for limestone mining and were entirely dependent on limestone procured from local suppliers.

Audit observed from the records available in the Directorate of Mineral Resources that eight cement companies procured 34.26 lakh MT of limestone from local suppliers between July 2015 and March 2018 on which contribution to MMMRF amount to Rs 20.56 crore was payable.

The companies did not submit this information on the quantity of limestone procured from local suppliers (non-leased areas) to the Forest Department. The DFO also did not obtain periodic information from the cement companies on purchase of limestone and did not issue demand notice for realisation of the mandated MMMRF fund.

“Thus, in absence of a proper mechanism for periodic exchange of information between the Forest and Mining Departments, the cement companies evaded payment of MMMRF on locally procured limestone. Consequently, contribution to MMMRF amounting to Rs 20.56 crore remained unrealized,” the report said.

Audit observed from the records of the Mining Department that two cement companies submitted to the Mining Department (May 2017 and July 2017) that they had encountered the limestone stocks during the site development for cement plants.

The Mining Department allowed the companies (July 2017 and May 2018 ) to utilise this limestone (25.93 lakh MT) on payment of royalty with a further instruction not to carry on such mining in future without obtaining prior concurrence.

Audit observed that the permission granted to cement companies for extraction of limestone for utilisation was in violation of the Meghalaya High Court judgement.

Further, since the extraction of limestone took place in the areas, where the Mining Department had not granted the lease for limestone mining, the necessary approval should have been obtained from the Forest Department. However, based on the end-use of such limestone extracted in cement plants, the Forest Department did not take any action.

Thus MMMRF contribution of Rs 15.56 crore on this quantity of limestone, incidentally mined, by the two cement companies from non-leased areas, was not collected by the Forest Department.

“Therefore, due to lack of clarity on the part of the Government in issuing instructions to both Forest and Mining departments and in absence of mechanism for coordination between these departments, the MMMRF amounting to Rs 36.12 crore, in respect to limestone extracted from non-leased areas was not collected from the cement companies,” the CAG said.

The cases were reported to the Forest and Environment Department, Government of Meghalaya between November 2017 and November 2018.

The DFO, Jowai in his reply (January 2019) for the audit observation, stated that he had asked the cement companies to furnish the details of quantity of limestone procured from local suppliers. Further for the audit observation in respect of one company, he stated that the matter was referred to Divisional Mining Officer (DMO) Jowai, since such extracted limestone was to be consumed in cement plants (thus a major mineral).

However the approval in this regard and status of payment of royalty was not intimated by the DMO to the DFO. In respect of the other company’s the DFO had sought the details of status of assessment from the DMO and the company. However, detailed status of assessment was yet to be received by the DFO.

In this regard, the CAG has observed that the Mining Department while granting permission to the cement companies to utilise limestone had instructed the companies to pay the royalty only, no instructions were issued to remit the due MMMRF also.

“Even the royalty was not paid by the cement companies to the D MO (August 2018). Thus, due to duality of administrative control on limestone mining, the revenue in the form of MMMRF could not be realised (January 2019),” it said.

Audit has noticed non-realisation of contribution to environmental reclamation fund on locally procured limestone by cement companies on verification of the records of one unit out of 27 unit offices in the state. The Department should internally examine similar issues in other unit offices also, it asserted.

Further, the CAG recommended that the Mining Department and Forest Department should periodically exchange information of the extracted quantity of minerals from their respective area of jurisdiction to avoid any scope of leakage of revenue. The Government of Meghalaya should issue clear instruction to this effect.