AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2019 (6) TMI 800
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....bags etc. out of plastic waste/scrap. The Letter of Approval was amended from time to time permitting the petitioner firm to manufacture reprocessed plastic agglomerates out of the waste and scrap, and also permitting the petitioners recycling/re-conditioning of old and used clothing. 2.1 Till 2005-2006, the petitioner firm was extensively involved in both the businesses of re-cycling of plastic waste/scrap as well as in the production of textile products from used clothing. However, thereafter, the Ministry was conducting a detailed examination of continuation and functioning of plastic re-cycling units and therefore, the Letter of Approval was extended only for a short period of time awaiting the outcome of the said examination by the Ministry. During such period, extension was granted only for a period of six months. Accordingly, the Letter of Approval granted to the petitioner in the meantime was extended from time to time for short periods. Since the Letter of Approval for recycling and reprocessing plastic out of waste and scrap was not being extended in a routine manner, but was temporarily extended intermittently, the petitioners found it difficult to continue their busin....
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....t any reason. 2.4 Pursuant to the said communications, the third respondent - Development Commissioner once again forwarded the proposal for renewal before the Board of Approval under letter dated 28.12.2014 and recommended that the case of the petitioner was fit for renewal. Thereafter, several meetings were held by the Board of Approval wherein extension and renewal was granted to two units, viz., M/s R. R. Vibrant Polymers Ltd., a unit in Kandla SEZ and M/s Plastic Processors and Exports, a unit in Noida SEZ, which were otherwise lying defunct and dormant for eight to fifteen years. 2.5 As the case of the petitioner was not taken up despite recommendation made by the third respondent, the petitioner addressed various letters and emails both to the second as well as third respondents for taking up the case of the petitioner for renewal. Despite specific recommendation made by the third respondent vide letter dated 28.10.2014 and various reminders addressed by the petitioner, its case was not taken up by the Development Commissioner for almost forty five months. Finally, the case was posted before the second respondent for consideration in its meeting held on 3.7.2017. However....
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....ction and also contrary to the specific directions issued by this court for reconsideration of its case. It was submitted that when the petitioner's case was placed back before the Board of Approval pursuant to the direction issued by this court and the Board of Approval was directed to reconsider the petitioner's case to examine the similarity with other existing units which were granted renewal despite being non-operational for a long period, the Board of Approval was bound to reconsider the petitioner's case from that angle; but the Board of Approval has not only acted without jurisdiction but also unreasonably and arbitrarily in not following the direction issued by this court. 3.1 The attention of the court was invited to the report of the Development Commissioner, to submit that after due verification of the facts on a specific direction of the Board of Approval, the Development Commissioner had reported that the case of another units, viz., M/s R.R. Vibrant Polymers Ltd., KASEZ was similar and the report from the Development Commissioner, Noida also confirmed that the unit of M/s Plastic Processors and Exporters Pvt. Ltd. remained closed for a long period of fifteen years ....
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....ons of the SEZ law also show the intention of the legislature not to proliferate the business of plastic scrap import. 4.2 It was submitted that pursuant to the order dated 9.5.2018 passed by this court, the report of the Development Commissioner, KASEZ was called for and on the basis of his report, the petitioners' case was considered in the 84th meeting of the Board of Approval held on 12.9.2018, whereafter the matter was deferred for further deliberations. It was submitted that thereafter, the petitioners' case was considered on 5.10.2018 and in view of the policy to phase out units of plastic waste and scrap recycling, the Board of Approval, in the interest of the environment, has not acceded to the request of the petitioners for renewal of Letter of Approval for extension of recycling of plastic waste and scrap. It was submitted that the decision taken by the Board of Approval being a conscious policy decision not to encourage revival of such closed units, the same is just, legal and proper, and does not warrant interference. It was reiterated that the Board of Approval has taken the decision taking into consideration the larger Government policy of phasing out such units an....
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....phase out these units of plastic waste and scrap recycling which could have negative impact on the environment. Further, as per Hazardous and Other Wastes (Management and Transboundary Movement) Rules, 2016, the import of solid plastic waste i.e. the raw material used by the plastic recycling units has been banned in Domestic Tariff Area. These units being in SEZ are exempted. However, the business model of these units have adverse effect on environment. The Board noted that the past trend of operations of these units indicates that they used the provisions of SEZ Rules, 2006 to clear goods to DTA to a large extent to show positive NFE which is not in consonance with the overall aims of SEZ policy that seeks to boost actual exports. Moreover, certain norms prescribed by the Department of Commerce for exports have prohibited in the DTA, and function in the SEZ, that for without an adequate nexus to exports, which is the paramount rationale of the SEZs. The Board noted that considering the overall policy of phasing out such units in the interest of environment, there should not be any further repetition of the decisions which have been taken on the earlier referred cases, contr....
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....estments by a person resident outside India), in the Special Economic Zone for its development, operation and maintenance; (d) granting of approval or rejecting of proposal for providing infrastructure facilities in a Special Economic Zone or modifying such proposals; (e) granting, notwithstanding anything contained in the Industries (Development and Regulation) Act, 1951 (65 of 1951), a licence to an industrial undertaking referred to in clause (d) of section 3 of that Act, if such undertaking is established, as a whole or part thereof, or proposed to be established, in a Special Economic Zone; (f) suspension of the letter of approval granted to a Developer and appointment of an Administrator under sub-section (1) of section 10; (g) disposing of appeals preferred under sub-section (4) of section 15; (h) disposing of appeals preferred under sub-section (4) of section 16; (I) performing such other functions as may be assigned to it by the Central Government. (3) The Board may, if so required for the purposes of this Act or any other law for the time being in force relating to Special Economic Zones, by notification, decide as to whether a particular activity ....
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....making body but only an implementing one. 11. As a necessary corollary, it follows that for the purpose of phasing out units involved in recycling of scrap and plastic waste, there has to be a policy of the Central Government in this regard. Furthermore, such policy has to be in writing. In the facts of the present case, there is no material on record to show that the Central Government has framed any policy for phasing out units involved in recycling of scrap and plastic waste. 12. On behalf of the respondents, strong reliance has been placed upon sub-rule (4) of rule 18 of the SEZ Rules, it may, therefore, be germane to refer to the said rule, which to the extent the same is relevant for the present purpose, reads thus: "18. Consideration of proposals for setting up of Unit in a Special Economic Zone.- xxxx (4) No proposal shall be considered for: - (a) Recycling of plastic scrap or waste: Provided that extension of Letter of Approval for an existing Unit shall be decided by the Board:" 13. It is the case of the respondents that rule 18 of the SEZ Rules bars setting up of any new unit for recycling of plastic waste. However, the proviso thereto empowers the Boar....
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....t no. 3, the petitioner from time to time addressed various letters and e-mails to the respondents no. 2 & 3 for taking up petitioner's case for renewal. Despite recommendation by the respondent no. 3 and though according to the petitioner, the case was similar to the case of other SEZ units, its unit was not granted renewal. Surprisingly, the respondent no. 2 during the said meeting held on 3rd July 2017 rejected the proposal of the petitioner without assigning any reasons. Admittedly, the petitioner was granted Letter of Permission [LoP] under the erstwhile Import-Export Policy dated 15th May 1996 for manufacturing of all types of plastic bags-Garbage collection/carry/ shopping bags, etc., and subsequently, on a request having been made by the petitioner-unit, the said LoA was also amended/broad banded to include recycling activity of worn and used clothing on 27th September 2001, after conversion of the said Free Trade Zone [FTZ] into SEZ unit with effect from 1st November 2000 and thereafter, their five-year block period was recasted from 1st November 2000 to 31st October 2005. Rule 18 of the SEZ Rules, 2006 empowers the Board of Approval which is an inter-ministerial body c....
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....o carry out inspection of the unit and furnish a factual report after checking the records of the Unit and similar cases pointed out by this court in its order dated 8.5.2018. In compliance of such direction, the Development Commissioner submitted a report dated 11.7.2018, the relevant part whereof reads thus: "4. As per directions of the BoA to DC KASEZ to carry out inspection of the Unit and furnish a factual report, the Development Commissioner along with the Joint Development Commissioner and other officials of KASEZ visited the unit on 22.06.2018. During inspection of the unit, some old machinery for recycling of plastic waste and scrap such as Agglomerate Machine, Generator in covered condition etc. were found in their allotted Plot No.419-B, which are lying idle due to non-operation of the plastic business and non-renewal of their LoA. 5. Further, it is noticed from the records available with this office that the said Unit has already ordered additional new machinery like Agglomerate Machine, Blade Sharping Machine, Steel trays for collection, Extra electric motor (Heavy Duty), Electric cable, Diesel Generator set (250 KVA) at a cost of Rs. 66.80 lakhs for recycling of....