Delhi High Court
Rain Cii Carbon (Vizag) Ltd. And ... vs Union Of India And Anr. on 15 March, 2019
$~2
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ W.P.(C) 1784/2019 & CM Nos. 8349/2019 & 8350/2019
RAIN CII CARBON (VIZAG) LTD. AND ANR...... Petitioners
Through: Mr P. Chidambaram, Sr.
Advocate, Mr Sandeep Sethi,
Sr. Advocate with Mr Jafar
Alam and Ms Shivani
Khandekar, Advocates.
versus
UNION OF INDIA AND ANR. ..... Respondents
Through: Mr Praveen Kumar Jain with
Ms Rashmi Kumari, Advocates
and Mr Nirmal Kumar, DDG.
CORAM:
HON'BLE MR. JUSTICE VIBHU BAKHRU
ORDER
% 15.03.2019
VIBHU BAKHRU, J
1. The petitioner has filed the present petition impugning the
decision of the Directorate General of Foreign Trade (DGFT), as
recorded in the minutes dated 08.02.2019 (hereafter „the impugned
minutes‟), insofar as it relates to apportionment of unutilised quota of
Raw Pet Coke (hereafter „RPC‟) amongst various applicants including
the petitioner.
2. Petitioner no.1 (hereafter „the petitioner‟) is, inter alia, engaged
in the manufacture of Clacined Pet Coke (hereafter „CPC‟). The
petitioner requires RPC as a feed stock for manufacturing CPC.
3. The import of CPC has now been restricted to 1.4 million
metric tonne in terms of the order dated 09.10.2018 passed by the
Supreme Court in various applications filed in M.C. Mehta v. Union
of India: W.P.(C) 13029/1985. The relevant extract of the said order
is set out below:-
"2. Use of anode grade pet coke in CPC manufacturing
units
[IA NO. 109181/2018 (APPLN. FOR DIRECTIONS ON
BEHALF OF RAIN CII CARBON (VIZAG LTD.), IA
NO. 109742/2018 (APPLNS. FOR DIRECTIONS ON
BEHALF OF GOA CARBON LTD.), IA NO.
109783/2018 (APPLNS. FOR DIRECTIOSN ON
BEAHFL OF SANVIRA INDUSTRIES LTD.), IA NO.
109791/2018 (APPLNS. FOR DIRECTIONS ON
BEAHFL OF KALINGA CALCINER LTD.), IA O.
109784/2018 (APPLNS. FOR DIRECTIONS ON
BEHALF OF PETRO CARBON AND CHEMICALS
PVT. LTD.), IA NOS. 125492 AND 125493/2018
(APPLNS. FOR IMPLEADMENT AND DIRECTIONS
ON B/O INDIA CARBON LTD.)]"
These applications have been filed by several entities and
the CPCB has given a Report dated 4th October, 2018 in
which it is stated as follows:
"i. Raw Petroleum Coke is feed stock for
producing calcinated petroleum coke which is a
raw material for anode making in aluminium
industries. Therefore, calcinations of Raw
Petroleum Coke is a pre-requisite to produce
anode grade calcined pet coke having sulphur
content less than 3.5%.
ii. As per BIS guidelines, calciners are permitted
to use high sulphur containing raw petroleum
coke for making CPC having sulphur content less
than 3.5%. There still be emission of S02 in high
concentration (para 1 of results) which needs to
be treated in Flue gas desulphurisation system
having efficiency of sulphur removal more than
90%.
The views expressed by the CPCB have been
considered by the Ministry of Environment, Forest and
Climate Change which is in agreement with the CPCB.
It is stated by learned amicus curiae that the views
expressed by the CPCB are also acceptable to EPCA.
Consequently, raw pet coke (domestic and imported) can
be used as a feedstock for producing calcined pet coke.
We make it clear that the imported raw pet coke for this
purpose cannot exceed 1.4 MT per annum in total.
Applications stand disposed of."
4. It is not disputed that prior to the aforesaid order, RPC could be
freely imported by manufacturers in India. Since the restrictions were
imposed in October 2018, the respondents have proportionately
restricted the import of RPC at 0.7 million MT for the period October,
2018 to March, 2019.
5. The minutes of the meeting held on 08.02.2019 (impugned
minutes) includes a tabular statement indicating the manner in which
the allocation of RPC was made amongst various manufactures. The
said table is set out below:-
In MTs
S. Name of the Capacit Quantit Half of Quantity Quantity Request of
No Firm y y the Allocated Surrendere the firm
. applied Annual d
for Productio
Import n Capacity
on or
before 1st
October,
1. Rain CII 5,11,00 3,52,14 2,55,000 2,53,338.6 Nil They are
Carbon 0 5 5 short by
(Vizag) Ltd. 99,461.35
MTs and
due to
adding the
92,482 MT
of August
imports, it
has caused
further
shortfall for
them of
total
1,91,943.35
MTs
2. Sanvira 2,00,00 1,83,74 1,00,000 99,154.07 Nil Proportiona
Industries 0 6 l share of
Ltd. any
relinquishe
d quota
3. Goa Carbon 3,08,00 2,07,90 1,54,000 1,52,697.2 Nil Nil
4. Kalinga 46,200 42,000 23,100 22,904.59 2904.59 Nil
Calciner
Ltd.
5. India 54,000 37,800 27,000 26,771.60 Nil Nil
Carbon Ltd.
6. Petro 93,744 1,40,61 46,872 46,757.49 Nil 10,000 to
Carbon and 6 11,000 MT
Chemicals
(P) Ltd.
7. Amritesh 24,000 16,800 12,000 11898.48 4198.48 Nil
Industries
(P) Ltd.
8. Brahmaputr 1,00,00 50,000 50,000 49,577.03 49,577.030 Nil
a Carbon 0
Ltd.
9. Neo Carbon 75,000 50,000 37,500 37,182.77 16836.561 Nil
(P) Ltd.
Total Surrendered Quantity 73,516.661
6. It is apparent from the above that 73,516.661 metric tonnes of
RPC remained unutilised on account of certain manufacturers deciding
to not import the said material.
7. In view of the further headroom available, the respondents
decided to allocate the surrendered quantity to the three manufacturers
(the petitioner, Sanvira Industries Ltd. and Petro Carbon and
Chemicals Pvt. Ltd.) whose demand for allocation could not be fully
satisfied.
8. The petitioner is, essentially, aggrieved with the manner in
which the excess surrendered quantity has been allocated. The relevant
extract of the impugned minutes, indicating the manner in which
additional quantity has been allocated to the three manufacturers
whose demands were not fully met, is set out below:-
"6. It accordingly decided to allocate the available
quota amongst these three applicants not exceeding their
half of the annual production capacity and made
allocation to them as given below. The Committee also
observed that since no request has been received for
allocation of CPC, hence no allocation is to be made from
the surrendered quantity of CPC.
In MTs
S. Name of the Capacity Quantity Half of the Quantity Additional
No. Firm applied for Annual Allocated quantity
Import Production on allocated
Capacity on 27.12.2018 out of the
or before 1st Surrendered
October, Quota MTs
1. Rain CII 5,11,000 3,52,145 2,55,000 2,53,338.65 2,55,000 -
Carbon (Vizag) 2,53,338.65
Ltd. = 1,661.35
2. Sanvira 2,00,000 1,83,746 1,00,000 99,154.07 1,00,00 -
Industries Ltd. 99,154.07 =
845.93
3. Petro Carbon 93,744 1,40,616 46,872 46,475.49 46,872 -
and Chemicals 46,475.49 =
(P) Ltd. 396.51
9. Mr Chidambaram, learned senior counsel appearing for the
petitioner submitted that the respondents have erred in pegging the
additional quantity to half of the annual production capacity of various
manufacturers without considering that the RPC, which is a raw
material for producing CPC, is required in a larger quantity than the
final product manufactured by the manufacturer. He submitted that
there would be no rationale in limiting the allocated quantity to the
output capacity (production capacity) of a manufacturing unit, as that
would mean that there would still be sufficient unutilised capacity
available with the manufacturers.
10. The aforesaid contention is merited.
11. It is apparent that the manner in which the distribution of the
excess quantity has been distributed, is manifestly irrational. This is so
because the respondents have allocated quantities for making up the
shortfall with reference to the production capacity of the applicants
and not their requirements to meet their production capacity.
Admittedly, the production capacity of the manufacturers of CPC is
significantly lower than the input (RPC) required to exhaust the said
capacity.
12. It is also apparent that the manner in which the surrendered
quantity is distributed also does not exhaust the surrendered quantity.
A aggregate of 73,516.661 MT of RPC has been surrendered out of
which only 2903.79 MT of RPC has been allocated to the three
applicants. As noticed above, RPC can be freely imported but its
overall import has been restricted to 1.4 Million MT per annum (0.7
Million MT for the period October, 2018 to March, 2019) by virtue of
the order of the Supreme Court. There is, thus, no reason not to permit
manufacturers from importing RPC up to the aforesaid limit.
13. It is apparent from the impugned minutes that the respondents
have made the allocation with the object to facilitate the manufacturers
to produce CPC to the extent of their production capacity. However,
this object is plainly not served since the input required for meeting
the production capacity is much larger.
14. In this context, Mr Jain, learned counsel appearing for the
respondents pointed out that there are different proportions of input
and output for different manufacturers and, therefore, the respondents
would not be able to approportionate the excess quantity in that ratio.
In the present case, this situation could be easily addressed by
examining the quantity applied for by each applicant and the quantity
allocated. Plainly, if the quantity applied for is within the overall limit
of the imports permitted by the Supreme Court, there could be no
impediment in respondents allocating quantity to that level.
15. In this view, it would be apposite if the shortfall is determined
on the basis of the quantity applied for and the quantity allocated and
not the production capacity of each applicant. A tabular statement
indicating the shortfall in respect of the three applicants is as under:-
In MTs
S. Name of the Quantity Quantity Shortfall
No. Firm applied for Allocated
Import on
27.12.2018
1. Rain CII 3,52,145 2,53,338.65 98806.35
Carbon (Vizag)
Ltd.
2. Sanvira 1,83,746 99,154.07 84591.93
Industries Ltd.
3. Petro Carbon 1,40,616 46,475.49 94140.51
and Chemicals
(P) Ltd.
16. In the present case, there are only three applicants who had
applied for distribution of the utilised quantity and the shortfall in their
cases.
17. Since, it is apparent that the endeavour of the respondents was
to allocate the unutilised quantity on the basis of the shortfall, it would
be apposite for the respondents to allocate the same on the basis of the
shortfall, as indicated above, subject to the limit that the total allocated
quantity does not exceed the half yearly input capacity. It is pointed
out that the input output ratio in the case of the petitioner is
approximately 1.5:1, as is apparent from the letter dated 13.11.2018
issued by the Andhra Pradesh Pollution Control Board. The said letter
indicates that the petitioner‟s intake capacity has been determined as
7,05,600 MT, which is approximately one and a half times the annual
production capacity of 5,11,000 MT. It is, thus, clear that even if the
excess quantity is distributed in the ratio of shortfall as determined on
the basis of the quantity of RPC applied and allocated, the total
quantity allocated would be below the quantum of RPC required by
the petitioner to exhaust its half yearly production capacity. Similarly,
the respondent may verify that quantity allocated to other two
applicants also does not exceed their intake capacity to meet their half
yearly production capacity.
18. This Court had considered remanding the matter to the
respondents to consider a rational method of apportioning the
surrendered quantity, but it would not be apposite to do, so as only
fifteen days remain for the manufacturers to import the balance
quantity. Further, the rationale for distributing the surrendered
quantity based on the shortfall is evident from the impugned minutes.
19. In the circumstances, the allocation as made in the impugned
minutes, is set aside and the respondents are directed to re-compute
the allocation of the aforesaid basis; that is on the basis of shortfall
between the quantity of RPC applied for and the quantity allocated.
20. The petition is disposed of in the aforesaid terms. All pending
applications are also disposed of.
21. Order dasti under the signature of the Court Master.
VIBHU BAKHRU, J
MARCH 15, 2019
MK/RK
