Distilleries of Bajaj Hind, Dhampur sealed in UP

Font Size

Print

Feedback

Email

Discuss

Related Articles

IDBI Fortis Life Insurance to break even by 2015US want India to raise FDI cap in defenceSatyam close to finalising payback deal

Lucknow: Five distillery units of some from the country’s leading sugar companies like Bajaj Hindustan and Dhampur Sugar have been sealed by the excise department of Uttar Pradesh for alleged smuggling of molasses, a critical raw material for the liquor industry. But the sugar industry has said the step was totally unwarranted.

“The government’s move is purely political and the closures are entirely unwarranted, especially because the excise department has deputed a staff on duty at every distillery. Where is the scope of any sort of discrepancy at our end,” said an industry insider.

Other than Bajaj Hindustan and Dhampur Sugar the other companies whose units have been sealed are Upper Ganges Sugar and Industries Ltd, Biswa Group and Superior Group. The move has come at a difficult time for the industry as the sugarcane crushing season has just began in the state.

The shares of Bajaj Hindustan closed at Rs 62.55, down 5.5%, and Dhampur Sugar was at Rs 18, down 2.70% at the BSE on Friday, while that of Upper Ganges Sugar and Industries closed at 37.10, down 1.72%. The other two companies are unlisted.

The state excise department said smuggling of molasses, especially from distilleries in western Uttar Pradesh is depriving it of not only revenues but is also creating a artificial molasses scarcity in the market.Speaking to FE, Sudhir Bogade, Excise Commissioner and Molasses Controller says, “Smuggling of molasses, especially in Western UP distilleries is rampant, especially in captive units, leading to a shortage of molasses in the market. And since Rs 10 lakh excise revenue is involved in every quintal of molasses, the government’s revenue target is drastically affected if even a single quintal goes missing. It is the state’s loss, and therefore has to be totally accounted for,” he says, adding that an account has to be maintained for every quintal, “whether the molasses is being used for IMFL or country-made liquour.”