2021 (1) TMI 966 - HC - Customs

Allocation of additional Raw Petroleum Coke (RPC) in favour of M/s Sanvira Industries for production capacity in excess of 2,00,000 Metric Tonnes (MT) - it is the assertion of the petitioners that the decision to consider the Production Capacity of M/s Sanvira Industries as 3.30 lakh MT for purposes of allocation of RPC is contrary to the orders of the Supreme Court - HELD THAT - Not only was the RPC allocated to industries whose installed capacity had not been taken into account in the EPCA Report dated 06.10.2018, but even for the petitioner-Rain CII Carbon, Production Capacity was taken as 5.11 lakh MT as against 5 lakh MT taken in the Report while determining the quantity of 1.4 million MT for import of RPC. On the issue as to whether on account of the orders dated 28.01.2019 or 08.07.2019 of the Supreme Court, SANVIRA INDUSTRIES LIMITED AND ANR. VERSUS DIRECTORATE GENERAL OF FOREIGN TRADE AND ANR. 2019 (12) TMI 1300 - DELHI HIGH COURT Production Capacity could not have been taken as 3.30 lakh MT, I again do not find any merit in the submissions made by the learned senior counsels for the petitioners. While under the Public Notices dated 26.11.2018 and 22.03.2019, the applicant was to produce documents showing its Production capacity, in the Public Notice dated 17.04.2020, only a Certificate from the State Pollution Control Board indicating capacity of the unit as on 09.10.2018 could suffice. No other document for supporting claim of Production Capacity as on 09.10.2018 could have been taken into account in terms of the Public Notice dated 17.04.2020. The Consent to Operate from the State Pollution Control Board is required for establishing or operating any industrial plant or operation. As noted hereinabove, DGFT in its Public Notice(s) has required the eligible entity to produce valid Consent to Operate in support of their application for allocation of RPC. While, by the Public Notices dated 26.11.2018 and 22.03.2019, the Consent to Operate was taken as the sole document showing the production capacity of the unit as also the allocation to which it is entitled, a departure was made in the Public Notice dated 17.04.2020 inasmuch as now apart from a Consent to Operate, the industrial unit was also to provide a certificate of its production capacity as on 09.10.2018 issued by the relevant State Pollution Control Board. M/s Sanvira Industries had produced both the documents, that is, a certificate showing the production capacity as on 09.10.2018 issued by the APPCB as also the Consent to Operate. The submission of the learned senior counsels for the petitioners that certificate mentioned in the first part to the condition of the Public Notice dated 17.04.2020 is the Consent to Operate, also cannot also be accepted. Clearly, the Public Notice dated 17.04.2020 makes a distinction between a certificate in the first part and the Consent to Operate in the second part. If both, the certificate and the Consent to Operate, were the same document, clearly there would have been no necessity of making a separate mention of the certificate and the Consent to Operate in the two parts of the same Clause of the Public Notice. The Public Notice has to be read in a reasonable manner, excluding any superfluity. It cannot be said that there is no application of mind by the Committee and no reasons recorded while making such allocation in favour of M/s Sanvira Industries - petition dismissed.

Summary

Issues Involved:
1. Legality of the allocation of additional Raw Petroleum Coke (RPC) to M/s Sanvira Industries.
2. Compliance with Supreme Court orders regarding RPC import limits.
3. Validity of the production capacity certificate issued by the State Pollution Control Board (SPCB).
4. Interpretation of Public Notices by the Directorate General of Foreign Trade (DGFT).

Detailed Analysis:

1. Legality of the Allocation of Additional Raw Petroleum Coke (RPC) to M/s Sanvira Industries:
The petitions challenged the allocation of additional RPC to M/s Sanvira Industries based on its production capacity exceeding 2,00,000 MT. The DGFT's allocation was based on a certificate issued by the Andhra Pradesh Pollution Control Board (APPCB) indicating a production capacity of 3,30,000 MT as of 09.10.2018. The petitioners argued that the additional capacity should not have been considered as it was not operational by the cut-off date.

2. Compliance with Supreme Court Orders Regarding RPC Import Limits:
The Supreme Court, in its orders dated 09.10.2018, 28.01.2019, and 08.07.2019, set a limit of 1.4 million MT per annum for the import of RPC. The Court did not specify the allocation among different industries but emphasized that the total import should not exceed this limit. The DGFT's allocation considered the production capacity certified by the SPCBs, which the petitioners argued was contrary to the Supreme Court's orders.

3. Validity of the Production Capacity Certificate Issued by the State Pollution Control Board (SPCB):
The petitioners contended that the certificate issued by APPCB, certifying M/s Sanvira Industries' capacity as 3,30,000 MT as of 09.10.2018, was invalid as the Consent to Operate for this capacity was obtained only on 29.11.2018. The DGFT, however, relied on the certificate for allocation, as required by the Public Notice dated 17.04.2020, which mandated a certificate from the SPCB indicating the production capacity as of 09.10.2018.

4. Interpretation of Public Notices by the Directorate General of Foreign Trade (DGFT):
The Public Notices dated 26.11.2018, 22.03.2019, and 17.04.2020 were central to the case. The earlier notices required the capacity of the unit and a valid Consent Certificate from SPCB/PCC, while the notice dated 17.04.2020 required a certificate from the SPCB indicating the capacity as of 09.10.2018 and a valid Consent Certificate. The DGFT's interpretation allowed the use of the SPCB's certificate for determining production capacity, which the petitioners argued was inconsistent with previous practices and the Supreme Court's orders.

Judgment Summary:
The Court dismissed the petitions, upholding the DGFT's allocation of RPC based on the certificate issued by the APPCB. The Court found no merit in the petitioners' arguments that the allocation was contrary to the Supreme Court's orders or that the certificate was invalid. The Court noted that the Supreme Court had only set the total import limit and did not decide on the production capacities of individual industries. The Court also held that the Public Notice dated 17.04.2020, which required a certificate from the SPCB indicating the production capacity as of 09.10.2018, was valid and not challenged by the petitioners. The Court concluded that the DGFT's allocation process was consistent with the Public Notice and the Supreme Court's orders.