Indian Express reported that Mr Mallikarjun Kharge minister of Railway cited Karnataka High Court’s order which upheld railway’s position in having different tariff for domestic, export cargo.

In another blow to iron ore pellet producers, Mr Mallikarjun Kharge has shot down commerce and industry minister Mr Anand Sharma’s proposal to levy normal freight on iron ore pellets headed for exports, saying pellets should be accorded similar treatment as meted out to ore exports.

Mr Sharma had written to Mr Kharge recently saying since pellets are value added products, they should be accorded a different treatment and distance based charge, as levied by the Railways for export bound iron ore, should not be applicable to pellets. But Mr Kharge is mindful of CAG’s recent report which pegged Railways’ revenue loss of nearly INR 4,300 crore between 2008 and 2012 due to improper documentation on dual pricing for transportation of iron ore.

Also the MB Shah Commission on enquiry into illegal mining has detected massive freight evasion by iron ore exporters, who have allegedly furnished manipulated excise certificates to show that their cargo was meant for domestic use.

Accordingly, the commission has asked it to entrust the CBI to investigate the matter. The Railways said that it has served notice to 14 such firms to recover an amount of over INR 8,000 crore.

Mr Kharge argues that pellets are beneficiated or processed form of iron ore used for manufacturing end products like steel and cement. So whether it is export bound pellets or iron ore transported to be converted into pellets for exports should be accorded similar treatment. Iron ore exports already attract an export duty of 30%.

Mr Kharge referred to observations by the Karnataka High Court in October 2012 in response to a petition by Kudremukh Iron Ore Company Limited, in which the court upheld the Railways’ position in implementing different tariff for domestic and export bound cargo.