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Central Board of Excise and Customs turns down textiles ministry
December, 08th 2010

In a setback to the jute industry, the Central Board of Excise and Customs (CBEC) has turned down a proposal made by the Union Ministry of Textiles (MOT) to restrict about 450 odd sugar mills across the country from packing sugar in plastic bags replacing jute bags during the current Rabi season.

This is despite the recent decision of the Cabinet Committee on Economic Affairs (CCEA) which had ruled out any dilution in the Jute Packaging Materials Act (JPMA) of 1987 that makes it mandatory for packing of 100 per cent of food grains and sugar produced in India in jute bags.

In a recent correspondence to Sujit Gulati, Joint Secretary (Jute), MOT, the Excise Commissioner, Ajay Jain said that there are no provisions kept in the Central Excise Act of 1944 to enforce such powers by excise officers on sugar mills.

On the contrary, the sugar mills always arrange for packing their produce under a self removal procedure where the units themselves clear the goods without the presence of any excise officer.

The Excise Act has a provision to monitor the movement and packing of goods other than only collecting levy and duty from the sugar millers.

Industry sources said there are a few sugar mills even run by jute mill owners of West Bengal outside the state.

They make more profits from sugar than jute mills. They have also been found guilty of flouting the JPMA provisions but are yet to be booked.

The Textile Ministry had approached the CBEC and Food Ministry to stop the sugar mills from packing their produce in synthetic and plastic bags after it received complaints from the Indian Jute Mills Association (IJMA), the jute owners body.

MOT said that sugar is an excisable commodity and therefore it is quite normal that the Excise Department had the full authority of not issuing gate passes if sugar is not packed in jute bags before being despatched from the sugar mills. Allowing sugar to be packed in non jute bags, mostly synthetic bags, are a sure violation of the JPMA and the CCEA decision.

The Food Ministry however said that the issue was solely under the domain of the Jute Commissioner (JC), considered to be the custodian of jute industry.

Sources revealed that the Jute Commissioner (JC) has pleaded helplessness in such a matter, citing reasons of a lack of infrastructure. This time also after IJMA's complaints, the JC has started a nominal action asking for specification and markings on A Twill bags which are meant for packing sugar.

Every year, the jute industry supplies around 0.3 million tonnes of jute bags to sugar mills valued at around Rs 1500 crore.

The 66 odd operational jute mills (52 in West Bengal) produce around 1.6 million tonnes of jute goods having a business turnover of Rs 8000 crore.

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