In a first instance of its kind
in the country's commodity derivatives market so far, the National Commodity
& Derivatives Exchange (NCDEX) has paid a sum of Rs 1 crore to settle its
traders' dues with warehouse keeper in Ghaziabad, west of Delhi, in Uttar
Pradesh.
With this payment, the delivery
of steel billet from the Ghaziabad-based India International Steel Centre
(IISC), the sole delivery centre for steel billets in North India, has resumed
after a deadlock that lasted over a month.
Faced with IISC denying delivery
of steel billets for the contract expired in October due to unpaid duty for the
past several months, the three clients trading through the Delhi-based little
known commodity broker Nokha Commodities had early last month threatened to
take legal action against the exchange.
“We initially paid the dues of Rs
1 crore which will be recovered from clients later. According to the procedure
prescribed by the exchange, each seller and buyer intending to make/take
physical delivery of steel is required to appoint a C&F agent for
compliances under the Excise and VAT legislation. The terms of appointment are
to be settled by such a participant with the C&F agent. One of the C&F
agents brought it to our notice that several intermediary sellers and buyers
had not paid C&F charges in full,” said Ananda Kumar, chief (corporate
services), NCDEX.
Earlier, 250 tonnes of steel
billets, worth Rs 85 lakh, had remained undelivered even after nearly a month
of contract expiry. Ideally, the delivery should take place within three days,
steel billet being a compulsory delivery contract.
Even though the exchange is not
liable to pay C&F charges as these are to be paid by sellers and buyers
concerned, the exchange stepped in to ensure smooth physical lifting of steel
by members/clients. There is no question of non-payment of excise duty, which
is paid before steel moves from the manufacturer to exchange-accredited
godown/s, Kumar said.
Source: The Business Standard
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