2023 (1) TMI 600 - HC - Customs

Determination of criteria for allocation of imported Raw Pet Coke - allocation of such imported RPC among various entities engaged in the business of using the imported RPC to produce Calcine Pet Coke - Appellant is aggrieved by the alleged excess allocation of RPC to Respondent No. 3, which the Appellant contends, has been made in excess of stipulated parameters - whether there was any actual change in the public notices on the basis of which the allocation was made? - HELD THAT - Under the first Public Notice dated 26.11.2018, the importer had to apply for the import license to the DGFT along with the capacity of the unit and a valid consent certificate from the SPCB/PCC in the name of user industrial units indicating the quantity permitted for import and its usage on a monthly and yearly basis. It is pertinent to mention here that when Respondent No.3 made an attempt to seek for increase in their import on the basis of their increase in production capacity, the same was rejected by the competent authority. This Public Notice has to be read in consonance with the Judgment of the Apex Court and cannot be permitted to do violence with the Orders of the Apex Court in M.C. MEHTA VERSUS UNION OF INDIA ORS. 2018 (11) TMI 1352 - SUPREME COURT . On 22.03.2019, as per the second Public Notice, the eligible quantity desiring to avail quota of the total import of raw pet coke were to apply for the import license along with their capacity of the unit and a valid consent certificate from SPCB/PCC in the name of user industrial units indicating the quantity permitted for import and its usage on a monthly and yearly basis. This notice is more or less identical to the first Public Notice dated 22.11.2018 - The Appellant attempted to move the DGFT for the increase in their quota based on the increase in their production capacity which was rejected by the DGFT by Order dated 22.04.2019 on the ground that any change in the quota would be violative of the order of the Apex Court. The reasoning of the learned Single Judge that the public notice dated 17.04.2020 makes a distinction between the certificate in the first part and the consent to operate in the second part and if both, the certificate and the consent to operate, were of the same document then there was no necessity to mention both in two parts of the public notice and, therefore, the certificate, granted by the Andhra Pradesh Pollution Control Board, stating that the Respondent No.3 had, as on 09.10.2018, the installed capacity for manufacture of calcined petroleum coke of 3.3 Million Metric Tonnes is reasonable, is contrary to the entire scheme as envisaged by the Apex Court - The certificate dated 04.05.2020 issued by the State Pollution Control Board only certifies that the installed capacity of Respondent No.3, as on 09.10.2018, for manufacture of calcined petroleum coke, was 3.3 Million Metric Tonnes per annum and is obviously immaterial. Even though the public notice dated 17.04.2020 is not under challenge but this Court cannot be a party to any interpretation that will have the effect of upsetting the rationale of the Apex Court in fixing 1.4 Million Metric Tonnes of raw petroleum coke which, as stated earlier, was based on the permissible capacity as on 09.10.2018. In case, now, the production capacity has increased and its proportionate share has been increased, the DGFT has to bring this fact to the knowledge of the Apex Court and only the Apex Court can alter the figures. The learned Single Judge has, therefore, erred in coming to a conclusion that inter se allocation could have been changed by the DGFT more so because the DGFT has in its previous Minutes of Meetings rejected the claim of various applicants including Respondent No.3 for increasing their share of allocation as per their production capacities. Even though the capacity may have been increased by the order dated 29.11.2018, the permission to produce more than 2 Lakh Metric Tonne was not there on 09.10.2018, which is evident from the order dated 22.04.2017, which restricted Respondent No.3 from producing more than 2 Lakh Metric Tonnes of calcine pet coke. The Respondents are directed to re-draw the allocation of Raw Petroleum Coke to the various calciners - Application allowed.

Summary

Issues Involved:
1. Validity of the allocation of Raw Pet Coke (RPC) to M/s Sanvira Industries.
2. Compliance with Supreme Court orders and policy framework regarding RPC import.
3. Consideration of production capacity for RPC allocation.
4. Impact of public notices and minutes of meetings on RPC allocation.

Issue-wise Detailed Analysis:

1. Validity of the allocation of Raw Pet Coke (RPC) to M/s Sanvira Industries:
The appeals challenge the allocation of RPC to M/s Sanvira Industries, arguing that the allocation exceeded the stipulated parameters. The core contention is that the allocation was made for a production capacity of 330,000 MT, which was not valid as per the consent to operate (CTO) dated 09.10.2018, which only allowed 200,000 MT.

2. Compliance with Supreme Court orders and policy framework regarding RPC import:
The judgment examines the compliance with various orders of the Supreme Court and policy guidelines issued by the Ministry of Environment, Forest and Climate Change (MoEFCC) and Directorate General of Foreign Trade (DGFT). The Supreme Court, in its order dated 09.10.2018, capped the total import of RPC at 1.4 million MT per annum. The allocation was based on the production capacities of calciners as on 09.10.2018. The DGFT public notices and minutes of meetings were scrutinized to ensure they adhered to this cap and the stipulated guidelines.

3. Consideration of production capacity for RPC allocation:
The court analyzed whether the production capacity of M/s Sanvira Industries as certified by the Andhra Pradesh Pollution Control Board (APPCB) on 09.10.2018 was correctly considered. The court found that the CTO dated 22.04.2017 allowed a production capacity of 200,000 MT, and any increase in capacity certified after 09.10.2018 could not be considered for RPC allocation. The judgment emphasized that the Supreme Court's cap on RPC import was based on the production capacities as on 09.10.2018.

4. Impact of public notices and minutes of meetings on RPC allocation:
The judgment scrutinized the public notices and minutes of meetings issued by the DGFT, particularly the third public notice dated 17.04.2020 and the minutes of the meeting dated 03.06.2020. It was found that the allocation to M/s Sanvira Industries was increased based on a certificate indicating a production capacity of 330,000 MT, which was not valid as per the cut-off date of 09.10.2018. The court held that the DGFT's decision to allocate RPC based on increased capacity was contrary to the Supreme Court's orders and the policy framework.

Conclusion:
The court set aside the allocation of additional RPC to M/s Sanvira Industries and directed the DGFT to reallocate the RPC in accordance with the observations made in the judgment, adhering to the production capacities as on 09.10.2018. The judgment ensures compliance with the Supreme Court's cap on RPC import and the established policy framework.