Wastage norm fixation under the EOU scheme cannot be refused on commercial viability grounds or excise objections.

The policy scheme for EOU units required fixation of wastage norms for products not covered by notified norms, and the Development Commissioner's power was limited to ad hoc norms for a restricted period. The Norms Committee could not decline to fix norms merely because it considered the petitioner's downstream marble products commercially unviable or likely to generate high wastage, since commercial viability was a matter for the entrepreneur and permission under the EOU scheme was a policy question for the competent Government. The report was also vitiated by reliance on the Excise Department's input despite earlier directions that the matter proceed without such objections. The refusal was unsustainable, and the report was liable to be set aside.

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Issues: Whether the Norms Committee could refuse to fix wastage norms for the petitioner's downstream marble products on the ground that the products were not commercially viable and generated high wastage, and whether the impugned report was vitiated by reliance on the Excise Department's input despite earlier directions.

Analysis: The applicable policy framework required the Board of Approvals to fix wastage norms for items not covered by the notified norms, with the Development Commissioner empowered only to make ad hoc norms for a limited period. The fixation of wastage norms was therefore part of the statutory and policy scheme governing EOU units and could not be declined merely because the authority considered the proposed product line commercially unviable or likely to involve substantial wastage. The question whether a product is commercially viable is for the entrepreneur, while the question whether a product should be permitted under the EOU scheme is a matter of policy for the competent Government, not for the Norms Committee. The report was also found to have been influenced by the Excise Department, contrary to the earlier direction that fixation of norms should proceed unhindered by that department's objections.

Conclusion: The refusal to fix wastage norms on the stated grounds was unsustainable, and the impugned report was liable to be set aside. The Committee was directed to reconsider and fix the wastage norms in accordance with law and the earlier directions.

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