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TMI Blog2023 (7) TMI 116X X X X Extracts X X X X X X X X Extracts X X X X ..... to this court, that 1.4 MMT ought to be the cap for imported RPC. From all the facts, it is evident that Sanvira kept on contending that its capacity was 3,30,000 MTPA. The minutes of the meeting dated 13.02.2020, also allude to the previous attempts by Sanvira, to have its capacity increased, as on 09.10.2018 in an effort to secure more allocation. All such contentions were rejected. In this background, the view expressed by the single judge, that the principle for allocation was changed somewhat in the public notice, dated 17.04.2020, is not tenable. This court is of the considered opinion that the view expressed by the impugned judgment is correct. Barring the fact that a clarification was issued on 04.05.2020, by the APPCB, there was no change in circumstance; the material document to be considered was the CTO, which for the relevant period (i.e. as on 09.10.2018) was 2,00,000 MT per annum, for Sanvira. Even according to it, the claim for enhancement was made later, and the CTO for the increased capacity was issued on 26.12.2019 - there is no infirmity with the findings and conclusions of the Division Bench, in the impugned judgment. Appeal dismissed. - S. RAVINDRA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0.2018 filed a report before this court with regard to the import of RPC for aluminium, calciner, and steel industries in the context of restrictions imposed on the import of RPC. This was pursuant to litigation in M.C. Mehta Case. The EPCA recommended that the total import requirement of RPC was 1.4 million tonnes per annum ( MTPA ) and Sanvira s capacity was taken as 2,00,000 MTPA. The EPCA report stated inter alia as follows: A.1.1 Calciners This industry imports different grades of pet coke and then upgrades this produce to produce calcined pet coke through removal of moisture, volatile matter and by changing the crystalline structure. The pet coke is used as a feedstock in the manufacturing process and not as a fuel. The calcined pet coke is sold to the aluminium industry for feedstock in smelting process. These are 28 calciners in the country, of which 6 are port based and entirely dependent on imported raw pet coke. These 6 calciners, manufacture 72 percent of the calcined pet coke produced in the country. The 6 companies are as follows: 1. Rain CII Carbon, plant based in Vizag, Andhra Pradesh. 2. Sanvira Industries, plant based in Vizag, Andhra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stries, stipulating the manner in which DGFT would allocate the quota of RPC to eligible CPC manufacturing units within the given ceiling limit. According to this, eligible units wishing to avail of quota had to apply for an import license with a copy to the jurisdictional regional authority of DGFT along with the capacity of the unit as well as the consent certificate from the State Pollution Control Board in the name of the industrial unit user indicating the quantity permitted for import and its use. On 27.12.2018, the DGFT, in furtherance of the first public notice initiated the process for allocating RPC. Its allocation became the subject matter of controversy by Sanvira as well as Rain CII, the respondent contesting in these proceedings. Sanvira contended that its production capacity was 330,000 MTPA which was not taken into account while providing allocation. The Committee disposed of all these representations, not acceding to the request. Aggrieved, Sanvira, filed an application, being I.A. No. 12291/2019 in the proceedings in M.C. Mehta s Case before this court. The application specifically contended that in September 2017, Sanvira initiated Phase-2 expansion to expand the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted by the Committee. 8. The decision not to increase capacity, dated 22.04.2019 was challenged before the Delhi High Court in writ proceedings, by Sanvira by way of WP(C) No 4485/2019. On 29.04.2019, at Sanvira s request, the writ petition was adjourned to enable it to secure necessary clarification from this court. For this purpose, Sanvira filed another application IA 73242/2019 reiterating that its capacity had been wrongly recorded as 200,000 MTPA whereas it ought to be 330,000 MTPA. It was contended in that application that: (xiii) It is most humbly submitted that the issue that a total production capacity of 330,000 MTPA of CPC had been installed by the Applicant prior to order dated 9.10.2018 passed by this Hon'ble Court was not ,.pleaded before this Hon 'ble Court in the Applicant's IA No.12291 of 2019 as such contention had earlier never been raised by the DGFT. 9. On 08.07.2019, this court rejected Sanvira s application (I.A. No. 73242/2019) in the following terms: INTERLOCUTORY APPLICATION NO. 73242/2019 (APPLNS. FOR DIRECTIONS ON B/0 SANVIRA INDUSTRIES LTD.) Our order is clear. No further clarification is required. This applicat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... applicant was decided on the basis of Consent to Operate certificate available with the firm on the date of passing of order dated 09.10.2018 by the Hon'ble Supreme Court in WP No.13029 of 1985. The firm was not having Consent to Operate on 09.10.2018 for their plant and accordingly it was not considered by the Committee which decided the allocation of pet coke amongst all eligible applicants. 8. M/s Sanvira Industries Ltd. after filing the W.P.(C) 4485/2019 CM No.31904/2019 before the Delhi High Court, filed IA No.73242/2019, before the Hon'ble Supreme Court inter alia praying to challenge the Minutes of Meeting dated 22.04.2019 regarding allocation of RPC. The said application was disposed of by the Hon'ble Supreme Court observing our order is clear. No further clarification is required. This application is disposed of. In view of the above directions of the Hon'ble Supreme Court, where the minutes of the meeting dated 22.04.2019 has been challenged by the calciners earlier, the Hon'ble Supreme Court has reiterated that no further clarification is required. Therefore, the EFC decided that the request petitioner for allocation of RPC for its additiona ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the documents mentioned at (iii) above must reach on or before 5th May 2020. Application fee shall be paid in accordance with the procedure as in Appendix 2K of Appendices Aayat Niryat Forms and deposited online along with the application. v. If documents received are found in order, application will be considered in Exim Facilitation Committee. (EFC) for import of restricted items and the concerned jurisdictional RA will grant authorization. The import license/ authorization will be valid till 31.03.2021 only for the purpose of imports. vi. If, after obtaining permission/ license, importer cannot utilize/ import the entire quantity for which the license has been issued, the applicant shall Intimate the same to DGFT at [email protected] and [email protected] on or before 31.12.2020 in order to facilitate distribution of the unutilized quota to other applicants who had applied initially.. Sanvira responded to the public notice, by applying on 21.04.2020, contending that its production capacity had increased to 3,30,000 MT as in September, 2018. Sanvira also moved an application [CM Appl. No. 10528/2020 in WP (C) No. 1858/2020] seeking a direction that i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nversion rate i.e. 1:1.36 (as mentioned in the EPCA report). iii. The additional capacity added by the applicants after the Hon'ble Supreme Court's order dated 9.10.2018 is not taken into consideration; iv. The quota be divided on a proportionate basis as per the following formula:- Quota allocated = Total Quota available for allotment multiplied by the demand of applicant divided by the Total demand for all applicants v. In cases where requested quantity is lower than eligible quantity, the surplus on their heads are redistributed among others proportionately. 13. Rain CII challenged the increased allocation to Sanvira, in its writ petition. A learned single judge, after considering the pleadings and submissions of the parties, sought to distinguish the various public notices issued by the GOI, and was of the opinion that this court s orders did not preclude the allocation of a different quantum as the orders were only indicative of the total quantity that could be imported. The single judge considered the previous orders of the committee and said that it placed reliance on the orders of this court and also clarified that production capacity had be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the raw pet coke without affecting the capacity given under the EPCA Report did not mean that the total permissible capacity was variable for the reason that the inter se allocation was made only on the allocation of the capacity essentially on the six calciners. The reasoning made in the judgment of the single judge that the public notice dated 17.04.2020 distinguishes between the certificate in the first part and the consent to operate in the second part and if both, the certificate and consent to operate, were of the same document, then there was no need to mention both in the two parts of the public notice and thus granting of certificate by APPCB was reasonable, was held to be contrary to the entire scheme as envisaged by this court. The total limit of import of 1.4 MMTPA was based on the total production capacity as on 09.10.2018 which had been fixed by the court on the basis of the capacity disclosed by the calciners themselves. 15. It is argued on behalf of Sanvira and the GOI, which are in appeal, by special leave that the impugned judgment is in error and that the judgment of the single judge is correct. It is argued that there was a change of criteria adopted in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iew expressed by the Division Bench in the impugned order was reasonable. 18. The facts reveal that the order of this court had fixed the outer limit of import of RPC at 1.4 million tonnes per annum. This was based on the assessment by EPCA which evaluated the requirements of various industries and units, engaged in the production of diverse commodities and raw materials (such as steel, aluminium, cement, clinker and those of calciners). The EPCA took into consideration the availability of appropriate grade domestic pet-coke, the overall impact on the environment and climate, of such essentially polluting feed based on this detailed examination, reported to this court, that 1.4 MMT ought to be the cap for imported RPC. 19. The EPCA which examined the issue elaborately raised the concern that RPC is a highly polluting fuel in its report (No. 91) to this court: EPCA concern is that pet coke is a highly polluting fuel and therefore, after months of deliberations there has been an agreement to control the import of this fuel. The exemptions given to industries should not negate the efforts being made to control the usage of this fuel in the country. This is all the more ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Authorised importers of Petcoke shall furnish opening and closing stock of imported Petcoke to the concerned SPCB/ PCC on a quarterly basis. 21. As can be seen, the consent issued by the concerned SPCB or the PCC had to clearly state what was the capacity or quantity permitted for import by the concerned unit. In the present case, it is not disputed that the Consent to Operate (CTO) issued by APPCB in Sanvira s favor recorded the total capacity at 2,00,000 TPA. The copy of this CTO dated 24.04.2017 has been placed on record, which states as follows: S. No. Product Quantity 1. Calcined Petroleum Coke 2,00,000 TPA 2. Generation of Electricity 08 MW Interestingly, the same CTO also records as follows: 10. The industry shall not increase the capacity beyond the permitted capacity mentioned in this order. 22. If one sees the disputes in terms of these facts, what is clear is that the CTO mentions Sanvira s capacity at 2,00,000 TPA. Sanvira s position is that the CTO for an additional ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the Lenders by the Applicant is annexed hereto and marked as Annexure A-8 annexed (Pages 72-75). The report also indicates that the Applicant had spent the entire sanctioned loan amount of Rs. 50 Crores by 30.06.2018. (e) By September 2018, the Applicant had also completed power plant expansion (except for turbine Installation). Turbine and ACC were the final stages of completion, Progress Report dated 30.09.2018 submitted to the Lenders by the Applicant is annexed hereto and marked as Annexure A-9 (Pages 76-79) Site Inspection Report dated 28.09.2018 of State Bank of India reporting the progress of capacity addition from 200,000 MTPA to 330,000 MTPA is annexed hereto and marked as Annexure A-10 (Pages 80-82). (f) On 27.11.2018 the APPCB issued consent to operate the additional capacity. Copy of Consent Order dated 29.11.2018 issued by the APPCB is annexed hereto as Annexure A-11 (Pages 83-87). 23. It is a matter of record that the APPCB issued the CTO for the quantity of 3,30,000 TPA only for 23.12.2019, the concerned Order APPCB/VSP/VSP/305/HO/CFO/2019. The relevant part of the CTO (dated 26.12.2019) reads as follows: This consent order is valid fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1229/2019 in the W.P.(C) 13029/1985, where the prayer before the Hon'ble Supreme Court was- a. to enhance/increase the import limit of 1.4 Million MT of RPC by an additional amount of 488,000 MT per annum for manufacturing CPC at the Applicant's SEZ Unit and accordingly direct the DGFT and other authorities, including the Ministry of Commerce, to allocate this additional RPC to the Applicant. b. to enhance/increase the import limit of 0.5 million MT of CPC by an additional amount of 3 70,000 MT per annum for blending purposes at the Applicant's SEZ Unit, subject to the condition that the Applicant exports CPC of equivalent quality of its CPC imports and accordingly direct DGFT and other authorities, including Ministry of Commerce, to allocate this additional CPC to the Applicant; and c. to direct the Development Commissioner, APSEZ to grant an extension of the Letter of Approval for the SEZ Unit being set up by the Applicant in the Andhra Pradesh Special Economic Zone, a sought by the Applicant vide letter/application dated 31October, 2018; and d. pass such further/orders as in the facts and circumstances of this case be deemed fit and proper. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 13029/1985) and also 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. Interestingly, even as on that day, i.e. 17.04.2020, there was no confirmation by the APPCB that Sanvira s unit had the capacity it claimed (3,30,000 MT annually). The CTO for that capacity had been issued only on 26.12.2019. As on that day, there was nothing to show that the earlier CTO stood amended with effect from the date it was issued (i.e. 24.02.2017), or any date prior to 09.10.2018. In such background, Sanvira wrote to APPCB, on 21.04.2020 seeking a clarification : To The Environmental Engineer Andhra Pradesh Pollution Control Soard Regional Office, Visakhapatnam Andhra Pradesh Dear Sir, 21 04 2020 Sub: Request to certify installed capacity of Sanvira Industries limited as on 09.10.2018 as 330, 000 MTPA of Calcined Petroleum Coke Sanvira Industries Limited had completed line-2 expansion (130,000 MTPA) of its Calcined Petroleum Coke (CPC) production facility by September 2018 thus taking Its total production capacity from 200,000 MTPA to 330 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a valid consent certificate from SPCB/PCC , in terms of Public Notice dated 17.04.2020, the eligible entities were to produce State Pollution Control Board Certificate indicating capacity of the unit as on 09.10.2018 and also valid consent certificate from SPCB/PCC . Therefore, 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. 28. The reasoning of the impugned judgment is that there was no distinction (contrary to the conclusion of the single judge) regarding the public notice dated 17.04.2020 -between the certificate in the first part and the consent to operate in the second part. The Division Bench noted, correctly that the annual total limit of import of 1.4 Million Metric Tonnes was based on the total production capacity as on 09.10.2018 which had been fixed by this cou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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