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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 ..... minutes of the meeting as well as the decision of the Central Government allocating pet-coke. 3. The necessary facts are that the Director General of Foreign Trade (DGFT) determined the criteria for the allocation of imported raw pet-coke (RPC) and allocated imported RPC among various entities. On 18.07.2018, the Central Ministry of Environment, Forest and Climate Change ("MoEF"), officers of the Environment Pollution (Prevention and Control) Authority for NCR and the Ministry of Petroleum and Natural Gas ("MPNG") decided in principle that import of pet-coke be ought to be restricted only to industries using it as a feedstock or as part of their manufacturing process and not as fuel. This court - seized of the public interest litigation ("PIL") in M.C. Mehta v. Union of India [W.P. No 13029/1985] (hereafter "M.C. Mehta Case") directed implementation of the minutes of the meeting of 18.07.2018 by its order dated 26.07.2018. The MoEF issued an office memorandum further to this court's order dated 10.09.2018, prescribing guidelines for regulation and monitoring of the import of RPC. Importers were obliged to obtain consent and registration issued by the concerned State Pollution Boa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mmendation on Calciner Industry. The Calciner industry should be allowed to import pet coke as its industry uses it for feedstock and not for fuel. This import is required as anode grade petcoke is not available in sufficient quantities in the country." 4. On 09.10.2018, based on the EPCA report, this court made an order directing that RPC import cannot exceed 1.4 MMTPA and that it could be used as feedstock for producing CPC. The figure of 1.4 MMTPA was based on the production capacity of calciners given by each one of them. This became the basis of an order by this court dated 09.10.2018. As a consequence, on the same day, a notification Notification No 42/2015-20 was issued by DGFT amending the foreign trade policy in relation to the import of RPC. The amendment allowed the import of RPC for cement, calcium carbide, gasification, limekiln and graphite industries for use as feedstock or in the manufacturing process on an actual user basis. The regulation and monitoring of these imports were to be supervised on the basis of guidelines issued by the MoEF on 10.09.2018. The DGFT thereafter proceeded to allocate specific quantities of RPC out of a total import quantity of 1.4 mill ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... & 1847/2019 [filed on behalf of Rain CII Carbon (Vizag) Ltd.], I.A. No. 164303 (filed on behalf of Saket Agarwal), I.A. No. 12291/2019 (filed on behalf of Sanvira Industries Ltd.) and I.A. No. 13210/2019 (filed on behalf of Goa Carbon Ltd.). The same are hereby dismissed." 7. On 22.03.2019, a second public notice, in regard to allocation was issued. Sanvira had requested for enhancement of allocation to it, based on its claim of enhanced capacity to the extent of 1,30,000 MTPA. This application for enhancement was rejected by DGFT, which also rejected a similar application for increased capacity by the contesting respondent, Rain CII. The relevant part of the rejection order, dated 22.04.2019 is extracted below: "7. The committee also observed that M/s Rain (CII) has drawn attention to DGFT's Office Memorandum No. 01 /93/180/03/AM-1 O/PC-2(A)/P-12485 dated 5th December, 2018. The Committee decided that in view of the order of the Hon'ble Supreme Court dated 28.1.2019 (as detailed in para. 5 in this minutes), the above communication dated 5th December, 2018 is infructuous. 8. In case of M/s Sanvira Industries Ltd. also, the Committee noted that the additional capacity ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to considered or not is baseless. The Committee was of the view that the prayer before the Hon'ble Supreme Court (as in Para 1) was "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. To which the Hon'ble Supreme Court in its order dated 28.01.2019 directed that "the order passed by this Court is clear. This Court has set the outer limit for import of Raw Pet Coke cannot exceed 1.4 MT per annum in total. In view of the aforesaid, prayers made on the basis of expansion etc. are totally misconceived and cannot be entertained. No further orders are required to be passed on these I.As. The same are hereby dismissed." M/s Rain Cll (Vizag) Ltd. had prayed before the Hon'ble Supreme Court is clear neither the limit of 1.4 Million MT can be enhanced nor the expansion of the capacity by the calciners can be entertained. The Committee, therefore, did not approve M/s Sanvira Industries representation who was seeking allocation fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion was again challenged by Sanvira, by filing WP No. 1858/2020 before the Delhi High Court. On 17.04.2020, DGFT had issued a public notice, which indicated the procedure for allocation of quota for the import of PET coke (RPC and CPC); it inter alia stated that: ii. "The annual quantity limitation in import will be operated on fiscal year basis. * Accordingly, the total quantity permitted for import per annum by the Hon'ble Supreme Court and available for import is (i) Calcined Pet Coke for use as Calcined Pet coke in Aluminium Industry is 0.5 Million MT and (ii) Raw Pet Coke for CPC manufacturing industry is 1.4 Million MT. This is available for all industrial units in these two sectors including the petitioners. iii. All eligible entities desiring to avail quota as mentioned above, may apply for import license as per procedure mentioned in Trade Notice No. 49 dated 15th March, 2019 along with State Pollution Control Board Certificate (SPCB)/ Pollution Control Committee (PCC) indicating capacity of the unit as on 9.10.2018 (Hon'ble Supreme Court Order in Writ Petition No. 13029/1985 ) and also valid consent certificate from SPCB/ PCC, In the name of user industrial u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed an application for quantity of 4,88,000 MT of RPC in addition to an application for the DTA unit. It was noted that the CTO from Andhra Pradesh Pollution Control Board had been obtained vide their Consent Letter dated 6.3.2020. The Committee noted that since the CTO does not specify the installed capacity as on 9th October 2018, the Committee accordingly decided to not consider the request for allocation of quota. xxx 6. The Committee examined the SPCB certificates of all the applicants for RPC imports. On examination, Committee observed that the SPCBs have adopted varying conversion rates for calculating the requirement of RPC for producing CPC. In their CTO certificates, the Committee also noted that consumption requirement is not indicated in SPCB certificates of all the firms. To bring uniformity, the Committee decided to allocate RPC by adopting following criteria: i. The production capacity of the applicant is to be calculated on annual basis. Wherever, SPCB certificates shows production figures in TPD, the annual production capacity is to be arrived at by multiplying the capacity with 350 days (average operational days for the unit) to bring uniformity. ii. The prod ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce dated 17.04.2020. The Division Bench, in its impugned judgment, held that on 09.10.2018, when this court passed the order, every calciner had given its capacity. The total capacity of all the calciners put together came to 11,72,750 MTPAs and the production and the total import that was necessary for the calciners to continue producing pet coke from raw pet coke was assessed as 1.4 MMTPA. This was based entirely on the total production capacity. On 09.10.2018, Sanvira's recognition to increase its capacity from 2,00,000 Metric Tonnes to 3,30,000 MT had not been placed, rather the consent to operate dated 22.04.2017 restricted Sanvira to produce only 200000 MT of pet coke. The impugned judgment held that Sanvira's increased capacity (of 1,30,000 MT) was granted only on the basis of an agenda item placed before the APPCB on 29.11.2018 and that though Sanvira could produce 3,30,000 MTs, that did not automatically lead to the inference that they were entitled to an increase in their share of the total import permissible by the orders of this court, dated 09.10.2018. The court also held that the fixation of 1.4 MMTs per annum was on the basis of the total capacity of each of the calc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncrease after 09.10.2018 would not be taken into consideration. This consistent stand was reflected in the EPCA's minutes of the meeting prior to 03.06.2020. In fact, even the GOI defended the rejection of Sanvira's request, barely five weeks before the impugned allocation by contending before the High Court that Sanvira was abusing the judicial process by repeatedly requesting the same relief. Having regard to these facts, there is no change of circumstances - much less new development or new facts which could have persuaded the committee as held by the Single Judge. There was in fact no change in the criteria. On behalf of Rain CII, it was highlighted that all facts pertaining to the alleged increase in capacity prior to 09.10.2018 i.e. the issuance of the CTO, the fact that inspection had been conducted by Sanvira's creditors i.e. State Bank of India on 28.09.2018, were all mentioned in the previous requests for enhancement and even in the two applications filed before this Court. Having regard to all these circumstances, the issuance of the certificate or letter by the APPCB almost two years after 09.10.2018, certifying that the second phase of Sanvira's expansion had increased ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by an office memorandum - through the MOEF, GOI. The relevant guidelines are extracted below: "1. Guidelines for Regulation and Monitoring of Imported Petcoke in India As per notification of Director General of Foreign Trade (DGFT) dated 17.08.2018, imported of Petcoke for use as fuel is prohibited. However, import of Petcoke is allowed for the following industries namely, cement, lime kiln, calcium carbide and gasification for use a feedstock or in the manufacturing process only on actual user basis as per the conditions stipulated below: (1) Petcoke importing industries namely, cement, like kiln, calcium carbide and gasification shall obtain the consent of and registration with the concerned State Pollution Control Boards (SPCB) / Pollution Control Committees (PCC). (2) Consent issued by the concerned SPCB /PCC shall clearly specify the quantity permitted for import and its use on a per month and per annum basis. (3) Only registered industrial units with valid consent from SPCBs/PCCs as per clause (1) shall be permitted to directly import pet coke and consignment shall be in the name of user industrial units for their own use only. (4) Import of pet coke for the purp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... py of loan sanction letter dated 03.01.2018 issuing by EXIM Bank is annexed hereto and marked as Annexure A-4 (Pages 30-56). (c) By March 2018, the Applicant had installed the first furnace of 40,000TPA and had a total installed capacity of 240,000 MTPA. Minutes of the consortium of Bank meeting dated 05.05.2018 and 13.08.2018 which note that 240,000 MTPA capacity was operational since 01.08.2018 are annexed hereto and Marked as Annexure A-S (Pages 57 -6) and Annexure A-6 (Pages 62-67). Report dated 17.04.2018 of the Lender Engineer appointed by the Bank Consortium which notes that Applicant had erected and commissioned additional CPC capacity of 40,000 MT as of 28.02.2018 is annexed hereto and marked as Annexure A-7 (Pages* 68-71). (d) By June 2018, the Applicant had a total installed production capacity of 330,000 MTPA having completed Installation of furnaces (which comprise of the CPC production facility). Power plant related works were at the final stages of completion. Progress Report dated 30.06.2018 submitted to 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on a proportionate basis. One of the criteria adopted by the committee was that the additional capacity added by the applicants after the Supreme Court's order dated 09.10.2018 will not be taken into consideration while allocating RPC. In the meeting held on 05.04.2019 for considering allocation of 1.4 million MT of Raw Pet Coke, the committee observed that M/s Rain CII Carbon (Vizag) Ltd. and M/s Sanvira Industries Ltd. had submitted additional requirement of 4,88,000 MT and 1,30,000 MT of RPC respectively. The committee further observed that M/s Rain CII Carbon (Vizag) Ltd. and M/s Sanvira Industries Ltd. were also both petitioners before the Supreme Court of India in IA Nos. 1451 of 2019 and 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 am ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. The relevant part of that notice reads as follows: "All eligible entities desiring to avail quota as mentioned above may apply for import license as per procedure mentioned in Trade Notice No. 49 dated 15th March 2019 along with State Pollution Control Board Certificate (SPCB)/ Pollution Control Committee (PCC) indicating capacity of the unit as on 9.10.2018 (Hon'ble Supreme Court Order in Writ Petition No. 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 d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roaching the Supreme Court." 27. Despite the above statement, the Minutes of the meeting dated 03.06.2020, treated the letter of 04.05.2020 (by APPCB) as if Sanvira's original capacity was 3,30,000 MTPA, ignoring the consistent position, whereby its claims to that effect were rejected about five times previously. Keeping this background, the single judge concluded as follows: "37. A reading of the above Public Notices would show the marked departure made in the Public Notice dated 17.04.2020. While in terms of the Public Notices dated 26.11.2018 and 22.03.2019, the eligible entities were to produce "capacity of the unit and 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 co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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