2019 (2) TMI 1392 - HC - Customs

Limit for import of RPC for the manufacture of CPC - limit of import of RPC restricted to 0.7 Million MT for the period between October, 2018 and March, 2019 - manufacture of Calcined Pet Coke (CPC) - feed stock of RPC required for manufacturing CPC - Held that - In order to implement the directions passed by the Supreme Court in M.C. MEHTA VERSUS UNION OF INDIA ORS. 2018 (11) TMI 1352 - SUPREME COURT , stating that RPC could be used as a feedstock for producing CPC, but had clarified that imported RPC for this purpose cannot exceed 1.4 Million Metric Tonnes (MT), the DGFT issued a Public Notice (Public Notice NO. 50/2015- 2020) dated 26.11.2018, and also in exercise of the powers under Section 5 of the Foreign Trade (Development Regulation) Act 1992, notifying the procedure to implement the quantitative restrictions imposed on the import of RPC. The said procedure, inter alia, provided that the quantitative restrictions as directed would be implemented on a fiscal year basis, that is, the fiscal year from 01.04.2018 to 31.03.2019 would be considered to implement the overall annual import limit of 1.4 Million MT of RPC. Since more than six months of the Financial Year 2018-19 had already expired as on 09.10.2018, it was further decided to limit the import of RPC to 0.7 Million MT for the period between October, 2018 and March, 2019. The quantitative limit for the import of RPC was incorrectly noted at 0.52 Million MT and the same was rectified by a Public Notice dated 06.12.2018 - The respondents are required to implement the quantitative restrictions on the import of RPC and the decision to implement the same on a fiscal year basis cannot be faulted. There is no reason for the respondents to adjust the RPC imported prior to 30.08.2018 against the allocation for the latter half of the Financial Year 2018-19. It is relevant to bear in mind that the respondents are only implementing the quantitative limit of 1.4 Million MT as directed by the Supreme Court. Admittedly, even if the RPC imported prior to 30.08.2018 is considered, and further import of 0.7 Million MT is fixed for the period between October, 2018 and March, 2019, the total quantity of RPC imported during the Financial Year 2018-19 would be within the overall annual cap as fixed by the Supreme Court. The present petition is allowed to the extent that the RPC already imported by the petitioner prior to 30.09.2018 shall not be considered against the allocation for the period October, 2018 to 31.03.2019.

Summary

Issues Involved:
1. Impugning the Minutes of the Meeting held on 12.12.2018.
2. Impugning the letter dated 01.02.2019 sent by the DGFT.
3. Allocation and adjustment of Raw Pet Coke (RPC) import quotas.
4. Implementation of Supreme Court's order on RPC import limits.

Issue-wise Detailed Analysis:

1. Impugning the Minutes of the Meeting held on 12.12.2018:
The petitioner challenged the Minutes of the Meeting held on 12.12.2018, which involved officials from the Directorate General of Foreign Trade (DGFT), the Ministry of Environment, Forest and Climate Change, the Ministry of Petroleum and Natural Gas, and the Indian Oil Corporation. The meeting decided on the allocation of RPC quotas among manufacturers based on their production capacity, adhering to the Supreme Court's directive that the import of RPC for producing Calcined Pet Coke (CPC) cannot exceed 1.4 Million Metric Tonnes (MT) per annum. The Committee decided to allocate the available quantity (7 Lakh MT) proportionately to the manufacturers’ production capacity for the period between October 2018 and March 2019.

2. Impugning the letter dated 01.02.2019 sent by the DGFT:
The petitioner also contested the letter dated 01.02.2019 from the DGFT, which informed the petitioner that eleven consignments of RPC cleared by customs would be adjusted against the quota allocated for the period between October 2018 and March 2019. The petitioner argued that these consignments were imported and cleared for home consumption before the Supreme Court's directive on 09.10.2018 and should not be adjusted against the latter half of the fiscal year's quota.

3. Allocation and adjustment of Raw Pet Coke (RPC) import quotas:
The petitioner was aggrieved by the decision to restrict the import of RPC to 0.7 Million MT for the period between October 2018 and March 2019 and the adjustment of RPC imported before October 2018 against this allocation. The Supreme Court had clarified that the total import of RPC for producing CPC should not exceed 1.4 Million MT per annum. The DGFT issued a Public Notice on 26.11.2018, implementing this quantitative restriction on a fiscal year basis, limiting the import to 0.7 Million MT for the remaining half of the fiscal year 2018-19.

4. Implementation of Supreme Court's order on RPC import limits:
The respondents implemented the Supreme Court's directive by capping the RPC import at 0.7 Million MT for October 2018 to March 2019. The petitioner contended that the imports made before October 2018 should not be adjusted against this cap. The Court found merit in the petitioner’s argument, noting that there was no rationale for adjusting the RPC imported before October 2018 against the latter half's allocation. The Court emphasized that the total RPC imported during the fiscal year 2018-19 would remain within the overall annual cap of 1.4 Million MT set by the Supreme Court.

Conclusion:
The Court concluded that the decision to adjust the RPC imported before October 2018 against the allocation for October 2018 to March 2019 was unsustainable and set it aside. The petition was allowed to the extent that the RPC imported before 30.09.2018 would not be considered against the allocation for the period from October 2018 to 31.03.2019.