CCI by its order dated August 31, 2016 has re-imposed penalties on 11 cement manufacturers and Cement Manufacturers Association (CMA) for violation of Section 3(3)(a) and 3(3)(b) of the Act. The CCI had earlier imposed a penalty under Section 27 of the Act in the same case through its order dated 20 June 2012. However, the COMPAT set aside the CCI order on 11 December 2015 with the direction that the CCI shall hear the parties afresh and pass fresh order in accordance with law.
The Information, filed by the Builder Association of India alleged cartelization by cement manufacturers on account of increased prices of cement bags despite fall in production costs, reduction in capacity utilization, non-passing of reduced costs to customers by cement manufacturers.
Along the lines of the earlier order, the CCI has again concluded that the cement manufacturers violated Section 3(3)(a) and 3(3()(b) of the Act by acting in concert and fixing cement prices and limiting and controlling the production and supply in the market. The CCI imposed a penalty of 0.5 times the net profits for 2009-10 and 2010-11 in case of cement manufacturers and 10% of the total receipts for two years on CMA.
The earlier cement order was covered as a special feature in our Competition Law Bulletin Vol. IV No. 1 covering April- June 2012 and can be read here
(Source: CCI Order dated August 31, 2016. For full text see CCI website)
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