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TMI Blog2010 (3) TMI 201X X X X Extracts X X X X X X X X Extracts X X X X ..... rcumstances it is not possible to hold that the Respondents were in contempt of this Court’s order dated 11th November 2009 when they communicated the decision of rejection to the Petitioner by the letter dated 16th November 2009. There is no merit in the contempt petition and it is dismissed as such. - 13091 of 2009, 14083 of 2009 and 43 of 2010 - - - Dated:- 4-3-2010 - S. Muralidhar, J. S/Shri Jayant Bhushan, Sr. Advocate with Mohit Chaudhary and Gautam Talukdar, Advocates, for the Petitioner. S/Shri A.S. Chandhiok, A.S.G. with Sachin Dutta and Manikya Khanna, Advocates, for the Respondent. [Judgment]. - The petitioner, an importer of rough marble blocks/slabs, challenges in this writ petition a circular dated 23rd October 2009 as well as notification dated 15th October 2009 issued by the Director General of Foreign Trade ('DGFT') imposing a condition that for the purposes of securing an import licence the Petitioner would have to install a gang saw machine in its unit. 2. The Petitioner is a sister concern of the Litoller Group which was a pioneer in importing Italian marble into India. The petitioner was issued an import license for the import of marble slabs/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... importers of these items in preceding years. II. Total import of rough marble blocks subject to a ceiling of 1.3 lakh MT per licensing year. The entitlement of individual firms to be worked out on the basis of the turnover of the preceding year. III. The last date for receiving applications 1st October of each licensing year. IV. Monthly returns regarding the imports to be filed with the Regional Licensing Authority. V. All applications forwarded through Chemicals and Allied Products Export Promotion Council who will certify the turnover of the applicant before sending it to DGFT (HQrs). 6. In September 2005 the Government introduced floor prices for import of processed marble products i.e. tiles, slabs etc. at US$ 2700 per cubic meter. This was similar to the price fixed on processed marble during SIL period. The Domestic Tariff Area ('DTA') sale of marble by 100% Export Oriented Units ('EOUs') was banned during this period. This ban was imposed to address complaints that the 100% EOUs were diverting imported marble into the domestic market thereby adversely affecting the domestic mining industry and the livelihood of a large number of workers. The 100% EOUs protested t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1, is inequitable and hence needs to be changed. (ii) with a view to liberalizing imports of rough marble blocks/slabs while protecting the domestic industry, Secretary, DOC will in consultation with Secretary, M/o Mines and Secretary, M/o MSME, review the current restrictions on marble imports and formulate an alternative arrangement. The following two options may be considered in this regard. (1) Remove quantitative restrictions on imports and allow imports freely under OGL but at higher floor prices. (2) Continue the present quantitative restriction system, but grant licences without restriction on the number of importers so as to do away with monopoly of a few and prescribe suitable objective criteria for granting the same." 10. Thereafter, the Secretary, Commerce held a meeting on 22nd October 2007 with the Secretary, Ministry of Mines and Ministry of MSME. Regarding option at (1) above, the unanimous view was that "if the import of rough marble blocks is brought under OGL, then the domestic mining would be definitely adversely impacted. It was the consensus view that the import of rough marble blocks needs to be kept on the restricted list and not under OGL." It was r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ddition to the conditions imposed in the Circular dated 30th June 2008. For the eligibility and entitlement of the unit, the applicants would have to enclose certificates issued by the State Industry Department (District Industry Center) ('DIC') as to the number of gang saws established by the unit. The DIC certificate had to state that the unit has been in operation since prior to 31st March 2001. The list of equipments/capital goods set up by the applicant showing processing equipment for marble slabs/tiles as per the balance sheet, duly certified by a Chartered Accountant ('CA') or the year 2000-01 was also required to be enclosed. The certificate of the CA would also show the figures of indigenous sales turnover of marble slabs/tiles for the years 2004-05, 2005-06, 2006-07. 14. Another policy circular was issued on 8th August 2008 stipulating therein the sales turnover as criteria for granting import license. It is stated the Petitioner fulfilled all the above conditions as well and therefore, its import licence was continued. On 20th August, 2008 the ceiling for total import of rough marble blocks was increased from 1.10 lakh MT to 1.4 lakh MT for the year 2008-09. 15.1 On ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... listed in their licence i.e. artificial/agglomerated stones. On 29th September, 2009 with reference to the Policy Circular 12(RE-08)/2004-09, dated 27-6-08, another 25% quota of the quantity granted for the year 2008-09 was permitted. 17. On 15th October 2009 a notification was issued by the DGFT introducing two new eligibility criteria to replace the earlier criteria. It appears that with this notification the Government did away with the dual policy of permitting not only the existing importers to import marble but also encourage the domestic manufacturers to import marble. 18. On 23rd October 2009 within eight days of the earlier issued notification dated 15th October 2009, the DGFT issued another notification amending the earlier notification by stipulating the following conditions: "(i) Serial No. 2 (C) 1 (a) of the DGFT Notification No. 15 dated 15th October 2009, shall be substituted as under: (a) units who have installed marble gang saw machine (except 100% EOUs and units in SEZ). However, the marble gang saw machine shall be in the name of the applicant only. No gang saw on lease basis shall be considered for the purpose of allocation of import entitlement. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h November 2009 this Court passed the following order: "Learned counsel for the respondents will take instructions on the averments made in paragraph XVI of the writ petition for extension of time. Till the next date of hearing, the respondents will not reject the application filed by the Petitioner. List on 17th November 2009. Dasti." 22. It must be recalled that the statement made by the Petitioner in para XVI of the writ petition was that the conditions stipulating the ownership by the unit of the gang saw machine was introduced on 23rd October 2009 giving barely seven days' time prior to the closing date of 2nd November 2009 for submitting the application. Therefore, it was not possible on the part of the Petitioner to comply with the said condition. 23. Thereafter, the case came up for hearing on 17th November 2009 this Court was informed by learned counsel for the Respondents that 164 persons had been granted licenses and the Petitioner's request had been rejected. The following order was then passed by this Court: "Counsel for the respondents states that 164 persons have been granted licenses and the petitioner's request has been rejected. Issue notice to show ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... c market, then it makes little sense to require an importer like the Petitioner to install a gang saw machine. It is further submitted that the pattern of the earlier circulars issued by the DGFT show that even while they were encouraging domestic manufacturers to also import marble directly, those who were purely importers were not totally excluded. It is also pointed out that a gang saw machine requires a minimum of four months for installation. Therefore, some lead time had to be given for setting up such a machine. The conditions imposed by the impugned circulation dated 23rd October 2009 of the DGFT was therefore impractical and unrealistic. Mr. Bhushan pointed out that for an importer like the petitioner, who did not further process the rough marble or the slabs but sold them validly in the market in the same form in which they were imported, a gang saw machine was of no use. He was further critical of the ceiling imposed on the maximum quantity of marble that could be processed on the first and subsequent gang saw machines. According to him, with such a restriction, the gang saw machine would remain idle for most of the time thus not serving the purpose and resulting in avoi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fulfilled for the 2010-11 quota. 31. As regards fixing the maximum output of 3000 PMT for the first gang saw and 1500 MTs for every subsequent gang saw, it is submitted that such a cap would result in an equitable distribution to all the eligible processors based on their turnover and the number of gang saw machines made operational by them. These gang saw machines are used for processing both imported as well as locally available marble blocks and slabs. If so used the machines would not be kept idle. It is pointed out that number of eligible applicants has increased from about 30 prior to the 2008 policy to around 140 (117 domestic processors plus 23 erstwhile SIL imports) under the 2008 policy. This has further increased to 158 (domestic processors) under the unified policy of 2009-10. It is further pointed out in the written synopsis of arguments that of the 29 erstwhile SIL category applicants, including the Petitioner who had applied in October 2009, 23 were found eligible having fulfilled the gang saw requirement. 32. Mr. Chandiok places reliance on the decisions of the Supreme Court in Deputy Assistant Iron Steel Controller v. L. Manickchand - (1972) 3 SCC 324, Liber ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a further transition to a unified policy where all applicants are required to satisfy uniform criteria. The important aspect here is that this change did not happen overnight. Everyone in the marble trade, whether as importer or as a domestic manufacturer, was in the full know of the various policy changes. The frequency of policy changes, the number of circulars and notifications over a short span bear testimony to hectic behind-the scene lobbying by the two broad categories of marble traders, i.e. importers and domestic manufacturers, and even their sub-groups. Therefore, it is not possible to accept the contention that the change brought about by the impugned circular and notification took the petitioner and other similarly placed importers of marble by surprise. 35. The minutes of the meeting of the COS held on 11th September 2007 is instructive as to the background and the reasons for the change in the policy. There were divergent views expressed by the Secretaries of different Departments/Ministries. Some of them were in favour of liberalization of import of marble whereas others favoured retaining the restrictions on its import. This led to the decision to have a further ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned has to keep in view various factors which may have impact on imports of other items of relatively greater priority in the larger interest of the over-all economy of the country which has to be the supreme consideration; and an applicant has no absolute vested right to an import licence in terms of the policy in force at the time of his application because from the very nature of things at the time of granting the licence the authority concerned may often be in a better position to have a clearer over-all picture of the various factors having an important impact on the final decision on the allotment of import quota to the various applicants." 38. It was observed in Liberty Oil Mills v. Union of India (SCC p. 477): "6..... The import policy of any country, particularly a developing country, has necessarily to be tuned to its general economic policy founded upon its constitutional goals, the requirements of its internal and international trade, its agricultural and industrial development plans, its monetary and financial strategies and last but not the least the international political and diplomatic overtones depending on 'friendship, neutrality or hostility with other count ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed for mutual respect and supremacy in their respective field." (emphasis supplied) 40. In Secretary to Govt. of Madras v. P.R. Sriramutu the Supreme Court observed (SCC p. 358): "15. As pointed out earlier with reference to the decisions of this Court the State enjoys the widest latitude where measure of economic regulations are concerned. These measures for fiscal and economic regulation involve an evaluation of diverse and quite often conflicting economic criteria, adjustment and balancing of various conflicting social and economic value and interests. It is for the State to decide what economic and social policy it should pursue. It is settled law that in view of the inherent complexity of the fiscal adjustments, the Courts give a large discretion to the legislature in the matter of its references of economic and social policies and effectuate the chosen system in all possible and reasonable ways. If two or more methods of adjustment of an economic measure are available, the legislative preference in favour of one of them cannot be questioned on the ground of lack of legislative wisdom or that the method adopted is not the best or there are better ways of adjusting the co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it would hurt business interests of a party, does not justify invalidating the policy. In tax and economic regulation cases, there are good reasons for judicial restraint, if not judicial deference, to judgment of the executive. The Courts are not expected to express their opinion as to whether at a particular point of time or in a particular situation any such policy should have been adopted or not. It is best left to the discretion of the State." 43. As far as the present case is concerned, it is not possible to hold that the transition from the dual policy to a unified policy was either arbitrary or irrational. The decision-making process itself appears to be a well deliberated one where matters were considered at different levels. The Respondents were faced with an unenviable task of accommodating several competing interests. How these should in fact be resolved should be left to the Respondents. The court cannot be expected to sit in appeal over the decision of the government to introduce a requirement for eligibility for grant of an import licence and opine that one criterion is more appropriate than the other. 44. This court finds that no case of mala fides or unreasona ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uld be evaluated by the policy maker. It will be for the Respondents to consider if they need to make further policy/criteria changes which will cater to the needs of persons like the petitioner who sell the imported marble as such in the domestic market. Likewise, the question: if in fact a gang saw machine can process up to 8000 MT of marble, then why restrict the limit on the first one to 3000 and the subsequent ones to 1500 MT? This court cannot take upon itself the task of determining if the policy needs to be changed depending on the answer to these questions. It is only called upon to examine if the policy as it presently stands meets the tests of reasonableness. This court does not find it possible to conclude to the contrary. Conclusion 47. The writ petition is accordingly dismissed with costs of Rs. 10,000/- which will be paid by the Petitioner to the Respondents within a period of four weeks from today. The application is disposed of. Contempt Case (C) No. 43 of 2010 48. The question that arises in the present contempt petition is whether the Respondents have wilfully disobeyed the order dated 11th November 2009 passed by this court whereby they were directed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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