TaxTMI 
TaxTMI 
2021 (1) TMI 966
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.... of the Directorate General of Foreign Trade (DGFT) to the extent that it allocates additional Raw Petroleum Coke (RPC) in favour of M/s Sanvira Industries for production capacity in excess of 2,00,000 Metric Tonnes (MT). 2. These petitions have a checkered history of orders passed by the Supreme Court as also by this Court and therefore, at the outset, a reference to these would be essential for understanding the underlying disputes. 3. The Supreme Court by its order dated 26.07.2018 passed in WP(C) 13029/1985, M.C. Mehta v. Union of India & Ors., directed the implementation of the decision taken in paragraph 1.10 of the Minutes of Meeting dated 18.07.2018 held between the Ministry of Environment, Forest and Climate Change alongwith Officers of the Ministry of Petroleum and Natural Gas and Environment Pollution (Prevention and Control) Authority for NCR (EPCA) as also with the DGFT, which stated as under: "1.10 EPCA stated that based on extensive discussion between MoEFCC, MoPNG and DGFT, a regime for regulating import of pet coke had been suggested by DGFT, which is also compliant with WTO norms. EPCA stressed that this regulatory framework should be immediately....
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....oned above and the said Boards/ Committees shall share this data with the Central Pollution Control Board on a quarterly basis. This data shall be published on the Central Pollution Control Board website onreceipt from the SPCB/ PCC. These Guidelines shall come into force from the date of publication of Office Memorandum by Ministry of Environment, Forest and Climate Change." (Emphasis supplied) 5. Various applications were filed, including on behalf of the petitioners and M/s Sanvira Industries before the Supreme Court seeking certain clarifications. A report dated 06.10.2018 was filed therein by the EPCA making the following recommendations for the Calciner Industry: "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 feed stock in the manufacturing process and not as a fuel. The calcined petcoke is sold to the Aluminum industry for feedstock in smelting process. These are 28 calciners in the country, of which 6 are port based and entirely dependent on....
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....urt orders, the Ministry of Commerce and Industry issued a Public Notice dated 26.11.2018 for making the allocation for the period 2018-19 inter-alia requiring the following documents to be submitted: "(iii) All eligible entities desiring to avail quota as mentioned above, may apply for import license in ANF 2M to DGFT (Exim Facilitation Committee) UdyogBhavan, New Delhi - 110011 with copy to concerned jurisdictional Regional Authority of DGFT along with capacity of the unit and a valid consent certificate from State Pollution Control Board (SPCB)/ Pollution Control Committee (PCC), in the name of user industrial units indicating the quantity permitted for import and its usage on a monthly and yearly basis." (Emphasis supplied) 9. Pursuant thereto, the DGFT proceeded to make the allocation of RPC. The petitioner(s), however, made representation against the said allocation. The representation was also made by M/s Sanvira Industries pointing out that their current production capacity was 3,30,000 MT which was not taken into account for making allocation. The representations were disposed of by observing that the allocation of RPC cannot be restricted only to the applic....
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....anufacturing units and issue appropriate directions to the Directorate General of Foreign Trade; (d) Enhance the annual import limit on Raw Petroleum Coke for Calcined Pet Coke manufacturing units beyond 1.4 million MT if deemed necessary taking into account allocation to the Applicant as per prayer(a) and (b) above; (e) Consider removing quantitative restriction on the import of Raw Petroleum Coke by the Calcined Pet Coke manufacturing units." 11. In the application, M/s Sanvira Industries inter-alia contended that its project was to be implemented in three phases; Phase-I was for production capacity of 2,00,000 MT for which the consent to operate was received by it from the Andhra Pradesh Pollution Control Board (APPCB) on 22.04.2017. It was contended that under Phase-II, the capacity was expected to be expanded to 3,30,000 MT per annum and was completed in October, 2018 for which the consent to operate was obtained on 29.11.2018 from APPCB. In Phase-III, the capacity was to be increased to 4,60,000 MT per annum and was expected to be completed by October/November, 2019. In the application, M/s Sanvira Industries made the following submissions: "15. ....
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....ity of the unit and a valid consent certificate from SPCB/PCC in the name of the user industrial units indicating the quantity permitted for import and its usage on a monthly and yearly basis." (Emphasis supplied) 14. In a Meeting held on 22.04.2019, the DGFT thereafter proceeded to make allocation of the RPC quota. In the Minutes, with respect to the submission of M/s Sanvira Industries for allocation of RPC based on the additional capacity of 3,30,000 MT. The Committee observed as under: "5. M/s. Rain CII Carbon (Vizag) Ltd. has submitted additional requirement of4,88,000 MT of RPC for its AP SEZ Visakhapatnam Plant, which is yet to be operational. Similarly, M/s. Sanvira Ltd. has also submitted its requirement for meeting the additional capacity of 1,30,000 MT. In this regard, the Committee noted that the request for additional requirement of Raw Pet Coke by these two applicants had been set aside by the Hon'ble Supreme Court, vide Order of the Supreme Court dated 09.10.2018. The Hon'ble Supreme Court in its order dated 28.1.2019 while disposing off the I.A. No.168847/2018, 1451/2019 & 1847/2019 (filed on behalf of Rain carbon); I.A. No.12291 /2019(filed o....
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....tioner and pass a speaking order thereon, within a period of four weeks from today. While taking such decision, the respondent no. 1 shall also grant an opportunity of hearing to the petitioners." 19. The representation of M/s Sanvira Industries, was, however, rejected by the respondents vide its order dated February, 2020 observing as under: "6. In the Meeting held on 22.4.2019, both the representations of M/s. Sanvira Industries Ltd. was considered by the Committee. The Committee observed that the contention of M/s. Sanvira Industries Ltd. that The Hon'ble Supreme Court's order dated 28.01.20l9 merely Slates that outer limit for import of RPC had already been fixed and any prayer seeking enhancement of that limit cannot been tertained and that the said order made no observation, as to whether the enhanced production capacity of the existing calciners were to be considered or not is baseless. The Committee was of the view that the prayer before be Hon'ble Supreme Court(as in Para 1) was "for 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 acco....
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....or allocation of RPC for its additional capacity cannot be acceded to. 9. The Committee while considering the submission of the M/s Sanvira Industries Ltd. was of the view that i. The capacity of each applicant was decided on the basis of consent to operate available with the firm on 9.10.2018 i.e. the date on which the Hon'ble Supreme Court passed the order. The firm was not having consent to operate on 9.10.2018. Any other criteria for deciding the capacity will be a highly contentious issue and will be fraught with endless interpretations. ii. That the firm had challenged the Minutes of Meeting dated 22.4.2019 regarding allocation of RPC in Hon'ble Supreme Court and the 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." 20. M/s Sanvira Industries challenged the above decision/order before this Court by way of WP(C) 1858/2020. This Court, vide its order dated 18.02.2020, did not grant any interim relief to M/s Sanvira Industries. 21. During the pendency of the above petition, the respondents, thereafter proceeded to issue a Publ....
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....nt to be converted to input/raw material requirement by taking industry average conversion 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." 23. It is the above allocation which is in challenge in the present petition. 24. The learned senior counsels for the petitioner(s) submit that the claim of additional RPC allocation made by M/s Sanvira Industries on the basis of its alleged additional installed/production capacity of 3,30,000 MT had been rejected by the Supreme Court in its order dated 28.01.2019 while dismissing its application. There was, therefore, no basis for taking this alleged additional production capacity into account while m....
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.... considered the submissions made by the learned counsels for the parties. 27. The first issue to consider is the effect of the three orders passed by the Supreme Court. As noted herein above, it is the assertion of the petitioners that the decision to consider the Production Capacity of M/s Sanvira Industries as 3.30 lakh MT for purposes of allocation of RPC is contrary to the orders of the Supreme Court. On the other hand, the respondents assert that the Supreme Court had merely fixed the limit of 1.4 million MT for import of RPC and did not decide upon the installed capacity of various parties or their entitlement to the RPC. 28. I am in agreement with the submissions made by the learned ASG and the learned senior counsels for M/s Sanvira Industries. The Supreme Court in its order dated 09.10.2018 merely allowed use of RPC (domestic and imported) as a feedstock for producing calcinated pet coke, making it clear that the imported RPC for this purpose cannot exceed 1.4 MT per annum in total. The Supreme Court did not decide on the Production Capacity of any industry nor their respective entitlement to such imported RPC. This is also evident from the Minutes of Meeting dated 2....
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....020 andt hereafter 621,000 MT of Raw Petroleum Coke annually on a continuous basis out of the total 1.4Million MT of Raw Petroleum Coke per annum as permitted to be imported by this Hon'ble Court vide order dated 09.10.2018 passed in Writ Petition No.13029 of 195, titled M.C. Mehta v. Union of India & Ors; (c) Clarify that those calciners who have not so far placed their requirement of imported Raw Petroleum Coke either before the EPCA or before this Hon'ble Court are not eligible for allocation of Raw Petroleum Coke from the restricted Raw Petroleum Coke import quota allowed to Calcined Pet Coke manufacturing units and issue appropriate directions to the Directorate General of Foreign Trade; (d) Enhance the annual import limit on Raw Petroleum Coke for Calcined Pet Coke manufacturing units beyond 1.4 million MT if deemed necessary taking into account allocation to the Applicant as per prayer (a) and (b) above; (e) Consider removing quantitative restriction on the import of Raw Petroleum Coke by the Calcined Pet Coke manufacturing units." (Emphasis supplied) 32. No doubt, M/s Sanvira Industries made averments and prayer regarding additional ....
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....acity of the unit and a valid consent certificate from SPCB/PCC in the name of the user industrial units indicating the quantity permitted for import and its usage on a monthly and yearly basis. All eligible entities desiring to avail quota as mentioned above, may apply for import license in ANF 2M to DGFT along with capacity of the unit and a valid consent certificate from SPCB/PCC in the name of the user industrial units indicating the quantity permitted for import and its usage on a monthly and yearly basis. 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 15^th March, 2019 along with State Pollution Control Board Certificate indicating capacity of the unit as on 09.10.2018 and also valid consent certificate from SPCB/PCC in the name of the user industrial units indicating the quantity permitted for import and its usage on a monthly and yearly basis. 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 22.0....
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....filed on behalf of Goa Carbon Ltd) had pronounced 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.A.s. The same are hereby dismissed." The Committee accordingly decided to reject the request for additional quantity of RPC for the additional capacity added by applicants after the Hon'ble Supreme Court's order dated 9.10.2018." 40. A reading of the above would show that the Committee rejected the plea of M/s Sanvira Industries on account of dismissal of its application by the Supreme Court and more importantly, because it found that "as per the official record" the additional capacity of 1.30 lakh MT had been created by M/s Sanvira Industries after the order dated 09.10.2018 of the Supreme Court. 41. M/s Sanvira Industries had challenged the above finding before this Court by way of a Writ Petition, being WP(C) 4485/2019. This Court vide its order dated 06.12.2019, disposed of the said petition, ....
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....of this Court wrongly so), it also clarified that the Production Capacity had been determined on basis of "Consent to Operate" as "any other criteria for deciding the capacity will be highly contentious issue and will be fraught with endless interpretation." 45. The learned ASG has submitted that it was for this reason that in the Public Notice dated 17.04.2020, the burden of determining the Production Capacity of eligible entities as on 09.10.2018 was put on the State Pollution Control Boards and with that intent, the eligible entities were called upon to produce State Pollution Control Board Certificates indicating production capacity of the respective units as on 09.10.2018. 46. This being a deliberate departure from the earlier practice, the reliance of the petitioners on the earlier practice and mode of allocation as a challenge to the impugned allocation, cannot be accepted. 47. As far as the submissions of the learned senior counsels for the petitioners based on Section 21 of the Air (Prevention and Control) Act, 1981 and Section 25 of the Water (Prevention and Control of Pollution) Act, 1974 are concerned, I again find no merit in the same. 48. Section 21 of the....
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....ulfilled: Provided further that before cancelling a consent or refusing a further consent under the first provision, a reasonable opportunity of being heard shall be given to the person concerned.] (5) Every person to whom consent has been granted by the State Board under sub-section (4), shall comply with the following conditions, namely:- (i) the control equipment of such specifications as the State Board may approve in this behalf shall be installed and operated in the premises where the industry is carried on or proposed to be carried on; (ii) the existing control equipment, if any, shall be altered or replaced in accordance with the directions of the State Board; (iii) the control equipment referred to in clause (i) or clause (ii) shall be kept at all times in good running condition; (iv) chimney, wherever necessary, of such specifications as the State Board may approve in this behalf shall be erected or re-erected in such premises; and (v) such other conditions as the State Board, may specify in this behalf; and (vi) the conditions referred to in clauses (i), (ii) and (iv) shall be complied with within su....
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....the discharge of sewage; or (c) begin to make any new discharge of sewage: Provided that a person in the process of taking any steps to establish any industry, operation or process immediately before the commencement of the Water (Prevention and Control of Pollution) Amendment Act, 1988 (53 of 1988), for which no consent was necessary prior to such commencement, may continue to do so for a period of three months from such commencement or, if he has made an application for such consent, within the said period of three months, till the disposal of such application. (2) An application for consent of the State Board under sub-section (1) shall be made in such form, contain such particulars and shall be accompanied by such fees as may be prescribed. (3) The State Board may make such inquiry as it may deem fit in respect of the application for consent referred to in sub-section (1) and in making any such inquiry shall follow such procedure as may be prescribed. (4) The State Board may- (a) grant its consent referred to in sub-section (1), subject to such conditions as it may impose, being- (i) in cases referred to in clauses ....
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....onths of the making of an application in this behalf complete in all respects to the State Board. (8) For the purposes of this section and sections 27 and 30,- (a) the expression "new or altered outlet" means any outlet which is wholly or partly constructed on or after the commencement of this Act or which (whether so constructed or not) is substantially altered after such commencement; (b) the expression "new discharge" means a discharge which is not, as respects to nature and composition, temperature, volume, and rate of discharge of the effluent substantially a continuation of a discharge made within the preceding twelve months (whether by the same or a different outlet), so however that a discharge which is in other respects a continuation of previous discharge made as aforesaid shall not be deemed to be a new discharge by reason of any reduction of the temperature or volume or rate of discharge of the effluent as compared with the previous discharge." 50. A reading of the above provisions would clearly show that the Consent to Operate from the State Pollution Control Board is required for establishing or operating any industrial plant or operation....
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....09.10.2018 would suffice for making allocation of RPC in its favour. 54. The reliance of the petitioners on the assertion made by M/s Sanvira Industries in its application before the Supreme Court regarding setting up of additional production capacity also cannot be of any assistance to the petitioners in the present petitions. In this regard, it is to be noted that the validity of the certificate issued by the APPCB certifying the production capacity of M/s Sanvira Industries as on 09.10.2018 is not in challenge before this Court. In fact, the application being CM No.18125/2020 was filed in WP(C) 3709/2020 by the DGFT seeking implementation of APPCB in the present petition. This application was, however, opposed by the petitioners contending therein, that in absence of a challenge to the certificate issued by the APPCB, APPCB could not be added as party respondent in the present petition. This Court taking note of the said submission, dismissed the application vide its order dated 10.08.2020, observing as under: "7. The petitioners being dominuslitis, are entitled to implead whom they consider to be necessary and proper party in the petition. The effect of non-impleadm....