TaxTMI 
TaxTMI 
2023 (1) TMI 600
X X X X Extracts X X X X
X X X X Extracts X X X X
....bal, Sr. Advocate with Mr. Ashish Prasad, Ms. Mukta Dutta, Mr. Abhishek Shivpuri, Mr. Vinay Tripahi, Mr. Vinemra Kopariha, Advocates for Sanvira Mr. T V S Raghavendra Sreyas, Ms.Gayatri Gulati, Mr. Siddharth Vasudev, Advocates for R-4 Mr. Shubhranshu Padhi, Mr. Vishal Bansal, Advocates for R-5 JUDGMENT 1. At the outset, it is imperative to set out the description of each of these matters. LPA Nos. 25/2021, 70/2021 and 71/2021 have been filed by the Appellants challenging the common Judgment dated 15.01.2021 passed by the learned Single Judge, disposing W.P.(C) Nos. 3709/2020, 3773/2020 and 3773/2020, respectively. 2. W.P.(C) 5749/2021 has been filed by the Petitioners challenging the Minutes of Meeting dated 10.05.2021, Public Notices dated 31.03.2021 and 17.04.2020 issued by the DGFT as well as Letter dated 04.05.2020 issued by Andhra Pradesh Pollution Control Board (hereafter, "APPCB"). 3. W.P.(C) 6258/2022 has been filed by the Petitioners challenging the Minutes of Meeting dated 09.03.2022, Public Notice dated 10.02.2022 issued by the DGFT as well as Letter and Report dated 08.10.2020 and 03.10.2018 issued by APPCB. 4. On account of the similarity in the present ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nt to Respondent No. 3 to operate its unit in Vishakhapatnam for manufacturing CPC up to a quantity of 2,00,000 MTPA. The Consent to Operate (hereafter, "CTO") was granted in terms of Sections 25 of the Water (Prevention and Control of Pollution) Act, 1974 read with Section 21 of the Air (Prevention and Control of Pollution) Act, 1981 and Rule 6 of the Hazardous & Other Wastes (Management and Transboundary Movement) Rules, 2016, which mandates an industrial unit discharging effluents and emissions to seek a CTO from the concerned State Pollution Control Board (hereafter, "SPCB"), (in this case the APPCB). b. On 18.07.2018, it was resolved in a meeting held between the Ministry of Environment, Forest and Climate Change (MoEFCC), Ministry of Petroleum and Natural Gas, officers of the Environment Pollution (Prevention and Control) Authority for NCR (hereafter, "EPCA") and Respondent No. 2, that import of pet coke ought to be restricted only to industries using the same as feedstock or as part of their manufacturing process and not as fuel. Para 1.10 of the MOM dated 18.07.2018 is reproduced hereunder: - "1.10 EPCA stated that based on extensive discussion between MoE....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 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 purpose of trading shall not be permitted. (5) Authorised importers of Petcoke shall furnish opening and closing stock of imported Petcoke to the concerned SPCB/ PCC on a quarterly basis. (6) The SPCBs/ PCCs shall develop an electronic record system for uploading of consents, registration and record of use of imported Petcoke by industrial units, as mentioned 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 on receipt 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." As per the afore stated guidelines, the Appellant and Respondent No. 3 were bound to obtain consent and registration issued by the concerned SPCB / Pollution Control Committee (PCC) and it was o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ding to this estimation, the 6 industries, with combined production capacity of 1.17 million tonnes require 1.36 million tonnes of imported petcoke to produce l million tonnes of calcined pet coke annually. The industry has also informed EPCA that it meets S02, NOx and particulate emission standards, as stipulated by CPCB. A.1.2 EPCA Recommendation 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." xxx g. On 09.10.2018, the Hon'ble Supreme Court, taking cognizance of the EPCA Report, passed an Order directing that the import of RPC shall not exceed 1.4 MMTPA in terms of the EPCA Report and the same could be used as feedstock for producing CPC. It is pertinent to mention here that the figure of 104MMTPA was arrived at taking into account the production capacity of the caliners given by the caliners themselves. The report dated 06.10.2018 became the basis of the Order dated 09.10.2018 of the Apex Court. h. Pursuant to the Order dated....
X X X X Extracts X X X X
X X X X Extracts X X X X
....was further observed that: - "6. The Committee examined the SPCB certificates of all the nine 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 Consent to Operate (CTO) certificates. The Committee also noted that consumption requirement is not indicated in SPCB certificates of all industries. For the sake of uniformity, the Committee decided to consider the allocation of RPC in proportion to the production capacities of the applicants as indicated in SPCB certificates. As in some of the SPCB certificates, production capacity of CPC was indicated in TPD (Tonnes Per Day); to bring uniformity, production capacity was arrived at by multiplying the capacity with 350 days." j. Soon thereafter, Respondent No. 3, being aggrieved by such calculation, filed an Application before the Hon'ble Supreme Court, being I.A. No. 12291 of 2019 in the PIL Proceedings, wherein Respondent No. 3 placed on record the following: - "6. Thereafter the Applicant set out to set up the project in three phases as detailed below: (I) Phase I: In th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....quota were required to be submitted to the DGFT by 7.12.2018 and reiterated that inter-alia, the production capacity of the applicant as certified by the SPCB/PCC was to be furnished. A copy of the Public Notice No. 50/2015-2020 dated 26.11.2018 issued by the DGFT is annexed hereto as Annexure A-19 (Pages 248-250) (iv) The Applicant received CTO for its Phase II expansion on 29.11.2018 and thus had SPCB certification for total production capacity of 330,000 MTPA of CPC before the deadline for applications. (v) The Applicant duly applied for allocation of import quota of RPC vide its application to DGFT dated6.12.2018 and requested for allocation of 183,746MT of RPC for 2H2018-19 based on its current certified production capacity of 330,000 MTPA and permitted import and usage. (vi) Against such application, the Application was granted a meagre allotment of 99548 MT of RPC for the period ending on 31.03.2019. From a perusal of the Minutes of Meeting held on 12.12.18 at the DGFT, it appeared that inter-alia, the following were considered at the time of allotment of RPC from the import limit fixed by this Hon'ble Court for calciners: (a)....
X X X X Extracts X X X X
X X X X Extracts X X X X
....allocation under protest and recorded its objections to DGFT by its Objections dated 17.01.2019. The Applicant has also sought clarification as to whether its current Cl2rtiflcdcapacity of 330,000 MTPA would be considered for the next quarter starting from 1.4.2019. The Applicant has not received any response to its letter dated 17.01.2019 till date. Copy of the Applicants Objections dated 17.01.2019 is annexed hereto as Annexure A-24 (Pages 305-307). 12. It is submitted that the following facts in particular, emerging from the above background may kindly be noted: (i) This Hon'ble Court was pleased to permit the use and import of RPC by CPC manufacturing units after noting the views expressed by the CPCB as regards inter-alia, need for treatment of S02emission by calciners in FGD system, and observing that the same had also been considered and accepted by both, the MoEF & CC as well as the EPCA. That the permission to import RPC was given pursuant to CPCB's views is clear from the following extract of order dated 9.10.2018 passed by this Hon'ble Court: "The views expressed by the CPCB have been considered by the Ministry of Environment, Fores....
X X X X Extracts X X X X
X X X X Extracts X X X X
....arch 2020 and thereafter 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 vs 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." k. On 28.01.2019, the Hon'ble Supreme Court dismissed I.A. No. 12291 of 2019 in the PIL Proceedin....
X X X X Extracts X X X X
X X X X Extracts X X X X
....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 Courtdated09.10.2018. The Hon'ble Supreme Court in its order dated 28.1.2019whiledisposing off the I.A. No. 168847/2018, 1451/2019& 1847/2019 (filed on behalf of Rain carbon); I.A.No.12291 /2019(filed on behalf of Sanvira Ind. Ltd.) andI.A.No.164303 (filed on behalf of Saket Agarval) and I.A.No.13210/2019 (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. xxxx 7. In case of M/s Sanvira ind....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e allocation of RPC for CPC manufacturing on grounds open to it under law in Writ Petition." (emphasis supplied) n. On 08.07.2019, the Hon'ble Supreme Court dismissed I.A. No.73242/2019, observing that no clarification was required in respect of the Orders passed earlier. o. On 06.12.2019, W.P(C) No. 4485/2019 was disposed of by this Court directing the Respondents to consider the petition as a representation. While doing so, the Ld. Single Judge agreed with the contentions of Respondent No. 3 stating that the Order dated 09.10.2018 passed by the Hon'ble Supreme Court set an outer limit on import of RPC and did not decide on production capacity and corresponding allocation for ant industry. The Order reads as follows: - "7. I have considered the submissions made by the learned counsels for the parties. A perusal of the Impugned Minutes of Meeting dated 22.04.2019of the respondent no. 1, also clearly shows that the installed capacity as on09.10.2018 has to be considered by the respondent no. 1 for making allocation of RPC. The Minutes, however, do not show the consideration of documents that have been referred to hereinabove by the leaned senior counsel....
X X X X Extracts X X X X
X X X X Extracts X X X X
....'ble Supreme Court to enhance the limit of 1.4 Million MT by a specific quantity of 4,88,000 MT which it has expanded through its SEZ unit. Therefore, the orders of 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 for its additional capacity of 1,30,000 MT. 7. The Committee while considering the submission of M/s Sanvira Industries Ltd. was of the view that the capacity of each applicant was decided on the basis of Consent to Operate certificate available with the firm on the date of passing of Order dated 9.10.2018 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. 31904/2019before the Delhi High Court, filed 1A No.73242/2019, before the Hon'ble Supreme Court inte....
X X X X Extracts X X X X
X X X X Extracts X X X X
....(iii) of which stated that all eligible allocatees desirous of availing RPC import, were required to do so by submitting documents in the following terms: - " xxx Conditions and modalities of application for import of Pet coke. xxx 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 units indicating th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Bs 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 production capacity for each applicant 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 app....
X X X X Extracts X X X X
X X X X Extracts X X X X
....T on the basis that its CTO valid as on 09.10.2018 was for 2,00,000 MT only. The additional capacity as certified by the SPCB was granted only on 29.11.2018, which is beyond the cut-off date of 09.10.2018. 5. Mr. Chidambaram assails the Impugned Judgment by pointing out that the Ld. Single Judge has erroneously held that the Hon'ble Supreme Court considered only one prayer while dismissing I.A. No. 12291/2019, whereas the application was dismissed vis-à-vis all prayers made by Respondent No. 3. He maintains that the criteria and convention of allocation of RPC as determined by the MoM dated 03.06.2020 is purportedly the same as that which had been used consistently for previous years as well. It is his submission that the Ld. Single Judge erred in holding that the past practice of allocation and consideration of production capacity stands altered by the Third Public Notice. Merely on account of the requirement of another document, being the production capacity certificate from the SPCB, as required by the Third Public Notice, allocation cannot be increased since the CTO exists only to the extent of 2,00,000 MTPA. 6. He has further submitted that the Ld. Single Judge ha....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the terms of the allocation of imported RPC. However, he has further stated that capacities of other calciners, and not just Respondent No. 3 have also been altered inter se, however, without any challenge. 9. In his view, the policy of the Respondents stands altered by virtue of the Third Public Notice and such modified policy has been applied to all calciners uniformly. It is his submission that previously, allocations, were made on the basis of the CTO certificate only and it was the conscious decision of Respondent Nos. 1 & 2 to introduce Public Notice dated 17.04.2020, whereby the burden of determining the Production Capacity of eligible entities as on 09.10.2018 was put on SPCBs and with that intent, the eligible entities were called upon to produce SPCB Certificates indicating production capacity of the respective units as on 09.10.2018. Accordingly, no interference is warranted with the same as per him. 10. Mr. Sibal has drawn the attention of this Court to the public notice dated 17.04.2020 and states that the said notice makes a distinction between certificate in the first part and the consent to operate in the second part and if both, the certificate and the consen....
X X X X Extracts X X X X
X X X X Extracts X X X X
....dent that the table submitted therein has been the basis of the EPCA Report dated 06.10.2018, which has been later given force by virtue of the Order of the Supreme Court dated 09.10.2018. We find force in the submission of Mr. Chidambaram. As on 12.09.2018 the production capacity of the Appellant was 2,00,000 MT. This is fortified by the CTO Order of the APPCB dated 22.04.2017. 15. A perusal of the said Order dated 22.04.2017 shows that the APPCB has granted consent to manufacture calcine petroleum coke to the Appellant to a maximum of 2,00,000 MTPA. A perusal of the said order further shows that Respondent No.3 was directed not to increase the production capacity mentioned in the order. The Appellant was thus restricted from increasing their production capacity beyond 2,00,000 MTPA as per the consent to operate. 16. The material on record also states that Respondent No.3 had applied for increasing their capacity from 2 Lakh Metric Tonnes to 3.30 Lakh Metric Tonnes but a renewed CTO recognizing and allowing operation of the unit at the capacity of 3,30,000 MT was only granted vide the APPCB's order dated 29.11.2018. The said CTO Order is, therefore, after the Judgment of the....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... mention here that when Respondent No.3 made an attempt to seek for increase in their import on the basis of their increase in production capacity, the same was rejected by the competent authority. This Public Notice has to be read in consonance with the Judgment of the Apex Court and cannot be permitted to do violence with the Orders of the Apex Court. 21. On 22.03.2019, as per the second Public Notice, the eligible quantity desiring to avail quota of the total import of raw pet coke were to apply for the import license along with their capacity of the unit and a 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. This notice is more or less identical to the first Public Notice dated 22.11.2018. Pursuant to the said notice, Respondent No.3 was granted allocation of 99,154.07 MT on the basis of production capacity of 2 Lakh Metric Tonnes. Also, there was no increase in the share of RPC of the total 1.4 Million Metric Tonne as permitted by the Apex Court. The Appellant attempted to move the DGFT for the increase in their quota based on the increase in their productio....
X X X X Extracts X X X X
X X X X Extracts X X X X
....o avail quota for import licenses were to make file their applications along with State Pollution Control Board certificates indicating the capacity of the unit as on 09.10.2018 and also a valid consent certificate from the SPCB/PCC. 26. Based on the said certificates, the DGFT in its Minutes of Meeting dated 03.06.2020 increased the allocation of raw pet coke out of the total limit of 1.4 Million Metric Tonnes to Respondent No.3 at 3,11,247 MT for a production capacity of 3,30,000 MT and has proportionately reduced the allocation for the Appellant from 553574.23 MT in the previous allocations to 4,81,961 MT in the Minutes of Meeting dated 03.06.2020. 27. A perusal of the said Minutes of Meeting dated 03.06.2020 shows that the increase has been accepted on the basis of the request of Respondent No.3. It is in this context that it must be examined whether there was any change in the method of allocation that was to have been followed by Respondent No. 2 in the three Public Notices. 28. As indicated earlier, on 09.10.2018, that is the date on which the Apex Court passed the order, every calciner had given its capacity. The total capacity of all the calciners put together cam....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e Respondent No.3 had, as on 09.10.2018, the installed capacity for manufacture of calcined petroleum coke of 3.3 Million Metric Tonnes is reasonable, is contrary to the entire scheme as envisaged by the Apex Court. As stated earlier, the 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 the Apex Court on the basis of the capacity disclosed by the calciners themselves. A State Pollution Control Board can only indicate the permissible limit of production of calcined petroleum coke, which for the Respondent No.3 was only 2,00,000 Metric Tonnes. As stated earlier, the consent to produce 3.3 Million Metric Tonnes of coke was given only after November, 2018 which is after 09.10.2018 and, therefore, the same could not have been considered by the Apex Court. The certificate dated 04.05.2020 issued by the State Pollution Control Board only certifies that the installed capacity of Respondent No.3, as on 09.10.2018, for manufacture of calcined petroleum coke, was 3.3 Million Metric Tonnes per annum and is obviously immaterial. Even though the public notice dated 17.04.2020 is not under challenge but this Cou....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t has the effect of upsetting the rationale of the Order dated 09.10.2018 passed by the Apex Court while fixing the quantity of import of Raw Petroleum Coke at 1.4 Million MT. As stated earlier, the said figure has been arrived at on the basis of permissible capacity of each of the calciners as on 09.10.2018. 36. In view of the fact that LPA Nos.25/2021, 70/2021 & 71/2021 are allowed, W.P. (C) Nos. 5749/2021 & 6258/2022 are also allowed and the Respondents are directed to re-draw the allocation of Raw Petroleum Coke to the various calciners in accordance with the observations made by this Court in this Order. Pending application(s), if any are disposed of. ============= Document 1 Summary 28 operating calciners in India. Total capacity of 2.06 million MT of CPC 6 calciners are entirely dependant on imports. Total capacity of "1.17 million MT. Operating at 85%. Easy to regulate 22 cakiners operate on domestic GPC. Capacity of 0.9 million MT. Operating only at 45% due to shortage of domestic GPC Aluminum industry is primarily dependant on the import based calciners Total current GPC import requirement is "1.4 million MT (expansions not considered) Current ex....