Gujarat High Court
Messrs J And H Minerals Pvt. Ltd. Through ... vs Union Of India on 17 January, 2025
Author: Bhargav D. Karia
Bench: Bhargav D. Karia
NEUTRAL CITATION
C/SCA/5753/2022 ORDER DATED: 17/01/2025
undefined
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 5753 of 2022
================================================================
MESSRS J AND H MINERALS PVT. LTD. THROUGH DIRECTOR JAY
TARUNKUMAR SHAH & ANR.
Versus
UNION OF INDIA & ANR.
================================================================
Appearance:
MR PARESH M DAVE(260) for the Petitioner(s) No. 1,2
MR ANKIT SHAH(6371) for the Respondent(s) No. 1
MS HETVI H SANCHETI(5618) for the Respondent(s) No. 2
================================================================
CORAM:HONOURABLE MR. JUSTICE BHARGAV D. KARIA
and
HONOURABLE MR.JUSTICE D.N.RAY
Date : 17/01/2025
ORAL ORDER
(PER : HONOURABLE MR. JUSTICE BHARGAV D. KARIA)
1. Heard learned advocate Mr.Paresh M. Dave
for the petitioners, learned advocate Mr.Ankit
Shah for the respondent No.1 and learned
advocate Ms.Hetvi H. Sancheti for the
respondent No.2.
2. By way of this petition under Articles 226
and 227 of the Constitution of India, the
petitioners have prayed for the following
reliefs :
NEUTRAL CITATION
C/SCA/5753/2022 ORDER DATED: 17/01/2025
undefined
"(A) That Your Lordships may be pleased
to issue a Writ of Mandamus or any
other appropriate writ, direction or
order holding that Notification
No.26/2015-2020 dated 21st August, 2018
(Annexure-"F") is ultra vires Articles
14 and 19(1)(g) of the Constitution of
India; and accordingly, this
Notification may be struck down as such
as regards restriction on export of
Abrasives Grains-Natural Garnet
classified under CTH 25132030;
(B) That Your Lordships may be pleased
to issue a Writ of Mandamus or any
other appropriate writ, order or
direction holding and declaring that
Notification No.26/2015-2020 dated 21st
August, 2018 (Annexure-"F") is
applicable only to Abrasives Grains -
Natural Garnet classified under CTH
25132030, procured and mined from beach
sands and teri sands, and that the
restriction on exports only through
State Trading Enterprise, viz. IREL
NEUTRAL CITATION
C/SCA/5753/2022 ORDER DATED: 17/01/2025
undefined
imposed under this Notification
No.26/2015-2020 is not applicable to
Abrasives Grains/Natural Garnet
procured and mined from desert areas of
State of Rajasthan."
3. At the outset, learned advocate Mr.Paresh
Dave for the petitioners, under instructions,
submitted that the petitioners are not
pressing prayer A but only press prayer B.
4. The brief facts of the case are as under :
4.1. The petitioner No.1 started the
business of exporting Natural Garnet around
the year 2014 and the petitioner No.2 from
August, 2014.
4.2. The petitioners are regular exporters
of Natural Garnet. The Natural Garnet is
having been given the ITC (HC) Code 25132030
NEUTRAL CITATION
C/SCA/5753/2022 ORDER DATED: 17/01/2025
undefined
in the Tariff Item HS Code i.e. classification
of export and import items under Chapter 25 of
the Custom Tariff Rates and Exemptions
pursuant to the Foreign Trade Policy (FTP),
2015-2020.
4.3. It is the case of the petitioners that
the Directorate of Mines and Geology,
Government of Rajasthan has granted lease for
mining Garnets in the State of Rajasthan where
deposit of Natural Garnet is found and the
petitioners procure and purchase Garnet from
the traders for the export purpose.
4.4. It is the case of the petitioners that
the petitioners have never purchased Garnet
from any other person or agency but Garnet is
always procured and purchased from the
Rajasthan based traders who have purchased
Natural Garnet from any of the persons or
NEUTRAL CITATION
C/SCA/5753/2022 ORDER DATED: 17/01/2025
undefined
agencies who are having the license to mine
the Garnet in the State of Rajasthan.
4.5. The petitioners are aggrieved by the
Notification No.26/2015-2020 dated 21st
August, 2018 issued by the Director General of
Foreign Trade, Ex-officio Additional
Secretary, Government of India in exercise of
the powers conferred by Section 3 of the
Foreign Trade (Development and Regulation)
Act, 1992 read with paragraph Nos.1.02 and
2.01 of the Foreign Trade Policy (FTP), 2015-
2020 as amended from time to time amending the
export policy of "Beach Sand Minerals" in
Chapter 26 of Schedule 2 of ITC (HS)
Classification of Exports and Import items.
4.6. As per the aforesaid Notification, the
entries in the "Note" of Chapter 26 of
NEUTRAL CITATION
C/SCA/5753/2022 ORDER DATED: 17/01/2025
undefined
Schedule 2 of ITC (HS) Classifications of
Exports and Imports Items, 2018 have been
substituted as under :
"NOTE:
1. Export off Rare Earth compounds
classified as Beach Sand Minerals
(BSM) , namely [Ilmenite, Rutile,
Leucoxene (Titanium bearing
mineral), Zircon, Garnet,
Sillimanite and Monazite (Uranium
and Thorium)], shall be regulated in
Schedule 2 of ITC(HS)
Classification.
2. Other minerals under code 2617
are freely exportable, except those
which have been notified as
prescribed substances and controlled
under Atomic Energy Act, 1962".
3. A new entry at Sl. No. 98A is
inserted in Chapter 26 of Schedule 2 of
ITC (HS) Classification of Export &
NEUTRAL CITATION
C/SCA/5753/2022 ORDER DATED: 17/01/2025
undefined
Import Items 2018 as follows:
S.No Tariff Unit Item Export Policy Policy
Items HS Description Condition
Code
98A 2508 5031 Kg Beach Sand STE (State Export
2508 5032 Minerals Trading through
2508 5039 [Ilmenite, Enterprise) Indian
2612 1000 Rutile,Leucoxe Rare
2612 2000 ne(Titanium Earths
2614 0010 bearing Limited
2614 0020 mineral), (IREL)
2614 0031 Zircon,
2614 0039 Garnet,
2614 0090 Sillimanite
2615 1000 and Monazite
2513 2030 (Uranium and
Thorium)]
4. Effect of this Notification:
Export of Beach Sand Minerals have
been brought under STE and shall be
canalized through Indian Rare Earths
Limited (IREL). Beach sand minerals,
permitted anywhere in the export
policy, will now be regulated in terms
of policy under at SI. No. 98A of
Chapter 26 of Scheduled 2 Export
NEUTRAL CITATION
C/SCA/5753/2022 ORDER DATED: 17/01/2025
undefined
Policy."
4.7. The said Notification further
stipulates the effect of this Notification in
paragraph No.4 thereof, whereby, it is
stipulated that export of Beach Sand Minerals
have been brought under STE and shall be
canalized through Indian Rare Earths Limited
(IREL). Beach Sand Minerals, permitted
anywhere in the export policy are to be
regulated as per the said Notification.
4.8. In view of the aforesaid Notification,
the petitioners are now required to canalize
the export through IREL. The main grievance of
the petitioners are that the exports made by
the petitioners of the Natural Garnet
purchased by them from the traders from the
State of Rajasthan cannot be considered as
Beach Sand Minerals (BSM) and therefore, the
said Notification would not be applicable so
NEUTRAL CITATION
C/SCA/5753/2022 ORDER DATED: 17/01/2025
undefined
far as the export of the Natural Garnet by the
petitioners requiring the petitioners to
canalize the exports through IREL.
5.1. Learned advocate Mr.Paresh M. Dave for
the petitioners submitted that the Natural
Garnet is classified in Chapter 25 of the ITC
(HS) Code as 25132030 whereby, the standard
rate of duty is prescribed at 10%. It was
submitted that the Beach Sand Minerals i.e.
BSM would not cover the Natural Garnet
purchased by the petitioners from the traders
of the State of Rajasthan. Reference was made
to the World Book Encyclopedia which explains
what is Garnet as under :
"Garnet is any of a group of hard,
glassy minerals. This group of silicate
minerals includes six major types: al-
mandine, andradite, grossularite,
NEUTRAL CITATION
C/SCA/5753/2022 ORDER DATED: 17/01/2025
undefined
pyrope, spessartite, and uvarovite.
Garnets are composed of silica and such
elements as aluminum, calcium, iron,
magnesium, and manganese. They range in
color from red, brown, and - black to
various shades of yellow and green.
Crystals of. garnet are found in all
types of rock, but chiefly in
metamorphic varieties (see Metamorphic
rock). Some garnet crystals are used in
making jewelry. One well-known gemlike
type is the red pyrope, which is often
sold as an imitation ruby. Most other
garnets are used as abrasives for
grinding and polishing. Garnets are
found throughout the world. Those of
gemlike quality are mined chiefly in
central Europe, Russia, and South
Africa."
NEUTRAL CITATION
C/SCA/5753/2022 ORDER DATED: 17/01/2025
undefined
5.2. Referring to the above explanation, it
was submitted that the Garnet is a silicate
mineral which includes six major types i.e.
almandine, andradite, grossularite, pyrope,
spessartite, and uvarovite being composition
of silica and such elements as aluminum,
calcium, iron, magnesium, and manganese. It
was submitted that the Natural Garnet
purchased by the petitioners for export
purpose from the traders of State of Rajasthan
does not include any of the minerals which
would be covered by the Atomic Minerals as per
the Atomic Energy Act, 1962 and as per the
Note No.1 to Chapter 26, prior to the
substitution by the impugned Notification,
rare earth compounds were freely exportable
except such rare earth compounds which contain
Uranium and Thorium which are prescribed
substances and controlled as per the
NEUTRAL CITATION
C/SCA/5753/2022 ORDER DATED: 17/01/2025
undefined
provisions of the Atomic Energy Act, 1962.
Reference was made to the definition of Beach
Sand Minerals as per the Atomic Minerals
Concession Rules, 2016 (for short 'the Rules,
2016') which defines 'Beach Sand Minerals' as
under :
"(c) Beach Sand Minerals" means economic
heavy minerals found in the teri or beach
sands, which include ilmenite, rutile,
leucoxene, garnet, monazite, zircon and
sillimanite."
5.3. Reference was also made to part-B of
the First Schedule of the Mines and Minerals
(Development and Regulation) Act, 1957 (for
short 'the Act, 1957') having the heading
"Atomic Minerals" and item 12 thereof, which
refers to the Beach Sand Minerals which is the
same as per the aforesaid definition. It was
NEUTRAL CITATION
C/SCA/5753/2022 ORDER DATED: 17/01/2025
undefined
therefore submitted that the word "Teri" as
per the aforesaid definition is required to be
considered. Reliance was placed on the Journal
of Minerals and Materials Characterization &
Engineering, Volume 8, No.2, page Nos.149-159
wherein, the article "Recovery of Ilmenite and
Other Heavy Minerals from Teri Sands (Red
Sands) of Tamil Nadu, India" is placed on
record. It was submitted that in the said
Article, the Teri sand is explained as under :
"Inland red 'Teri' sands of southeast
India have formed from weathering in
situ of coastal dune sands. The term
Teri, which means red, is derived from
Tamil, a regional language in south
India. Teri sands are very lean placer
deposits for heavy mineral
concentration. The beach and in land
placer deposits exhibit a considerable
variation in mineralogy and chemical
composition depending on the location.
The flowsheets for their beneficiation
NEUTRAL CITATION
C/SCA/5753/2022 ORDER DATED: 17/01/2025
undefined
are therefore variable in detail. The
literature reveals that lot of research
work carried out on Teri sands but most
of the publications restricted to
resource evaluation, geology,
geochemistry, mineralogy etc. The
general practice to recover Total Heavy
Minerals from such a lean beach sand
deposit containing 2-5% THMs is first
concentrated to 20-30% THMs on cone
concentrators. This product is then fed
to spirals, which gave a concentrate of
more than 80% THMs."
5.4. Reliance was placed on the description
of Teri(geology) in Wikipedia wherein, Teri is
explained as under :
"Teri or Teri dune complex is a coastal
landscape peculiar to some parts of
Tamil Nadu mainly in southeastern
India. The landscape consists of
sediments dating to the Quaternary
NEUTRAL CITATION
C/SCA/5753/2022 ORDER DATED: 17/01/2025
undefined
Period and made of marine deposits with
aeolianite and characteristic red sand
and silt dunes. These red soils are
thought to have originated in the
Pleistocene. Robert Bruce Foote
hypothesized that these dunes were
created by the action of winds
(aeolian) lifting the fine silt
fraction from further east. These dunes
are oriented along the axis running
parallel to the coast and between the
latitudes of 8°00' to 9°30' N and
longitudes 77°18' to 79°00' E. The
soils also have calcium deposits
replacing the old roots of vegetation.
The soil is rich in ilmenite and the
red colour is derived from hematite
originating from garnet."
NEUTRAL CITATION
C/SCA/5753/2022 ORDER DATED: 17/01/2025
undefined
5.5. It was further submitted that the
Beach Sand Minerals as per the definition in
the Rules, 2016 refer to the minerals found in
the Teri and the beach sand found on the beach
near the seashore and not in the rocks in the
dessert of the State of Rajasthan. It was
therefore submitted that the impugned
Notification No.26/2015-2020 will apply only
to the minerals which are found in Teri and
beach sand and not to the minerals which are
found at any other place.
5.6. Learned advocate Mr.Paresh Dave
submitted that the genesis of the impugned
Notification is the litigation before the
Hon'ble Madras High Court wherein, Public
Interest Litigation being W.P. No. 1592 of
2015 was filed for illegal Beach Sand Minerals
in the coastal Districts of Tamil Nadu
NEUTRAL CITATION
C/SCA/5753/2022 ORDER DATED: 17/01/2025
undefined
wherein, the Hon'ble Madras High Court has
passed various orders. Reliance was placed on
the order dated 21.01.2019 in the said PIL
wherein, the Hon'ble Court has held that the
said litigation covers not only "Monazite" but
also all other Beach Sand Minerals with regard
to the alleged illegal mining, transportation
etc,.
5.7. Reference was also made to the
affidavit-in-reply filed on behalf of the
respondent wherein, it is stated that the
Government by way of change in the Policy has
amended the Mines and Minerals (Development
and Regulation) Act, 1957 and the Atomic
Minerals Concession Rules, 2016 was introduced
in view of the aforesaid Public Interest
Litigation by virtue of which, mining of the
Beach Sand Minerals fell within the ambit of
the Government Public Sector Undertakings. It
NEUTRAL CITATION
C/SCA/5753/2022 ORDER DATED: 17/01/2025
undefined
was submitted that the impugned Notification
is therefore regularising the Beach Sand
Minerals through State Trading Enterprise
(IREL) and not the Natural Garnets exported by
the petitioners purchased from the traders of
the State of Rajasthan.
5.8. It was further submitted that by
Notification dated 20th February, 2019, the
Central Government has amended the Sections
and Rules which earlier allowed the private
companies to mine rare earth minerals found in
the sand of the coast and all cases of Beach
Sand Minerals and other placer deposits in
association with monazites were notified
irrespective of the monazite grade. It was
submitted that in the said Notification, rare
earth minerals were depicted as mixture on the
coasts of Tamil Nadu, Andhra Pradesh, Kerala
NEUTRAL CITATION
C/SCA/5753/2022 ORDER DATED: 17/01/2025
undefined
and Odisha which include Ilmenite, Rutile,
Leucoxene, Zircon, Garnet, Sillimanite and
Monazite which are Atomic Minerals which can
be processed to yield Thorium in nuclear fuel
which can further be enriched to Uranium, a
component to nuclear warheads.
5.9. It was submitted that Natural Garnet
obtained from the traders of the State of
Rajasthan for export purpose has nothing to do
with Beach Sand Minerals which may include the
Garnet, but the Natural Garnet to be exported
by the petitioners till the date of such
Notification could not have been brought
within the regulation to be canalized through
State Trading Expertise IREL.
5.10. Learned advocate Mr.Paresh Dave also
placed reliance upon the Test Certificate
issued by the Central Glass & Ceramic Research
NEUTRAL CITATION
C/SCA/5753/2022 ORDER DATED: 17/01/2025
undefined
Institute in respect of the products being
Abrasive Grains/Natural Garnet exported by the
petitioners and the Beach Sand to show the
difference between the components thereof.
Reference was also made to the letter dated
26.11.2019 of IREL wherein, the reply was
given under the Right to Information Act
relying on the Notification dated 11.07.2016
wherein, Ministry of Mines has defined Beach
Sand Minerals to be economic heavy minerals to
be found in the teri or beach sands which
include ilmenite, rutile, leucoxene, garnet,
monazite, zircon and sillimanite. It was
further stated in the said reply that at
present Beach Sand Minerals are winned in the
State of Odisha, Kerala and Tamil Nadu. It was
therefore submitted that Beach Sand Minerals
referred to in the impugned Notification
should only refer to the Beach Sand Minerals
NEUTRAL CITATION
C/SCA/5753/2022 ORDER DATED: 17/01/2025
undefined
found in the State of Odisha, Kerala and Tamil
Nadu.
5.11. Learned advocate Mr.Paresh Dave
referred to the ITC (HS) Classification of
Export and Imports Items contained in Chapters
25 and 26 read with Chapters 25 and 26 of the
Schedule 2 of the Export Policy to submit that
by the impugned Notification, Serial No.98A
has been introduced in Chapter 26 of Schedule
2 of ITC (HS) Classification which includes
the entries ITC (HS) Code from Chapter 25 and
Chapter 26 both, having item description Beach
Sand Minerals which includes Ilmenite, Rutile,
Leucoxene (Titanium bearing mineral), Zircon,
Garnet, Sillimanite and Monazite (Uranium and
Thorium).
5.12. It was therefore submitted that the
NEUTRAL CITATION
C/SCA/5753/2022 ORDER DATED: 17/01/2025
undefined
item description in the impugned Notification
in Serial No.98A pertains to the items of the
various ITC (HS) Code which are part of the
Beach Sand Minerals only. It was therefore
submitted that the Natural Garnet being
exported by the petitioners shall not be
covered within the scope of Beach Sand
Minerals which may contain various ITC (HS)
Codes as stated in the impugned Notification
from Chapter 25 and Chapter 26. It was
submitted that the Beach Sand Minerals include
Garnet, the ITC (HS) Code 25132030 is also
mentioned in the Notification but as the goods
exported by the petitioners being Natural
Garnet and not being Beach Sand Minerals, such
inclusion of the Code in the impugned
Notification would not cover the goods
exported by the petitioners.
NEUTRAL CITATION
C/SCA/5753/2022 ORDER DATED: 17/01/2025
undefined
6.1. On the other hand, learned advocate
Mr.Ankit Shah for the respondent-Authority
submitted that the impugned Notification is a
policy decision of the Central Government
whereby, separate Entry No.98A is introduced
for the purpose of regulation of the exports
of the Beach Sand Minerals being canalized
through State Trading Enterprise IREL. It was
submitted that the impugned Notification is
issued in exercise of the powers conferred as
per the provisions of Section 3 of the Foreign
Trade (Development and Regulation) Act, 1992
read with paragraph Nos.1.02 and 2.01 of the
Foreign Trade Policy (FTP), 2015-2020 as
amended from time to time. It was submitted
that Chapter 26 of Schedule 2 of the ITC (HS)
Classification of Export and Import Items has
been amended by substituting the Note of the
said Chapter. It was submitted that the Note
NEUTRAL CITATION
C/SCA/5753/2022 ORDER DATED: 17/01/2025
undefined
No.1 was substituted regarding the export of
rare earth compounds which are now classified
as Beach Sand Minerals to be regulated in
terms of Serial No.98A of Chapter 26 Schedule
2 of the ITC (HS) Classification which
includes Teriff Item HS Code 25132030 which
covers the goods exported by the petitioners.
It was therefore submitted that the export of
the Natural Garnet is not prohibited but it is
now regulated to be canalized through State
Trading Enterprise IREL.
6.2. Reference was also made to paragraph
No.4 of the said Notification which stipulates
the effect of the Notification for canalizing
of the export of the rare earth compounds
which includes Ilmenite, Rutile, Leucoxene
(Titanium bearing mineral), Zircon, Garnet,
Sillimanite and Monazite (Uranium and Thorium)
NEUTRAL CITATION
C/SCA/5753/2022 ORDER DATED: 17/01/2025
undefined
now termed as Beach Sand Minerals. It was
therefore submitted that irrespective of the
place of origin of the items which are now
described as Beach Sand Minerals in the
aforesaid Notification, export of such items
shall be regulated by canalizing through IREL.
It was therefore submitted that the definition
of the Beach Sand Minerals given in the Rules,
2016 or in the Schedule II, Part B of the
Act, 1957 will have to be considered from the
point of view of the classification which is
made by the impugned Notification which
includes all the minerals which are included
in the item description having Tariff Item HS
code to be classified as "Beach Sand
Minerals".
6.3. It was further submitted that Tariff
Item HS Code stated in the impugned
NEUTRAL CITATION
C/SCA/5753/2022 ORDER DATED: 17/01/2025
undefined
Notification are from Chapters 25 and 26 of
the ITC HS Classification of Export and Import
pertains to Salt, Sulphur, Earths, Stone,
Plastering Material, Lime and Cement whereas,
Chapter 26 pertains to Ores, Slag and Ash and
items mentioned in the impugned Notification
refers to the various items which are forming
part of the Atomic Minerals to be classified
as Beach Sand Minerals.
6.4. It was further submitted that as per
the objective stated in the Journal for export
of goods, the Central Government is empowered
to regulate the exports through State Trading
Enterprises as laid down in the Indian Trade
Classification (Harmonized System) i.e. ITC HS
of exports and imports. In view of the
aforesaid impugned Notification, such ITC HS
NEUTRAL CITATION
C/SCA/5753/2022 ORDER DATED: 17/01/2025
undefined
is now amended by inserting SI No.98A which is
a policy decision and would govern all the
types of minerals covered by the ITC HS Code
to be exported through State Trading
Enterprise IREL.
6.5. In support of his submissions,
reliance was placed on the decision of the
Hon'ble Apex Court in case of M/s Jain
Exports Private Limited and Another Versus
Union of India and Others reported in (1988)
3 SCC 579 to submit that irrespective of the
source of the procurement of the minerals
which are covered by the ITC HS Code in the
impugned Notification, the same would be
classified as Beach Sand Minerals as in the
said case, the Hon'ble Apex Court has held
that whether the Coconut Oil specified in
paragraph 5 of Appendix 9 would cover both
NEUTRAL CITATION
C/SCA/5753/2022 ORDER DATED: 17/01/2025
undefined
edible and non-edible and merely because the
petitioner of the said case imported the
Coconut Oil for industrial purpose being non-
edible Coconut oil, would not make any
difference as the imports of the Coconut Oil
was to be canalized through State Trading
Enterprise. It was therefore submitted that in
the facts of the present case also whether the
Natural Garnet is obtained from the beach of
the Tamil Nadu, Odisha or any other coast line
or from State of Rajasthan would not make any
difference for the export to be canalized
through State Trading Enterprise as such
export shall be classified as Beach Sand
Minerals only.
6.6. It was therefore submitted that the
definition given in the Rules, 2016 or in the
Schedule II, Part B of the Act, 1957 would not
NEUTRAL CITATION
C/SCA/5753/2022 ORDER DATED: 17/01/2025
undefined
make any difference for the purpose of
implementing the impugned Notification qua the
items covered by the ITC HS Codes as per the
impugned Notification to be exported through
IREL only.
7. Having heard the learned advocates for the
respective parties and considered the
submissions made, it would be germane to refer
to the impugned Notification which is the
central point of the controversy as to whether
the Natural Garnet exported prior to the said
Notification by the petitioners would be
covered by it or not:
"Notification No 26/2015-2020
New Delhi, Dated: 21 August, 2018
Subject: Export policy of Beach Sand
Minerals (BSM) in Chapter 26 of
Schedule 2 of ITC(HS) Classification of
NEUTRAL CITATION
C/SCA/5753/2022 ORDER DATED: 17/01/2025
undefined
Export and Import Items 2018 -
regarding.
S.O.(E) In exercise of the powers
conferred by Section 3 of the Foreign
Trade (Development & Regulation) Act,
1992 (No.22 of 1992), read with
paragraph 1.02 and 2.01 of the Foreign
Trade Policy (TP), 2015-2020, as amended
from time to time, the Central
Government hereby, with immediate
effect, makes amendment in export policy
of 'Beach Sand Minerals' in Chapter 26
of Schedule 2 of ITC(HS) Classification
of Export and Import Items.
2. The existing entries in the 'Note'
of Chapter 26 of Schedule 2 of ITC(HS)
Classification of Export and Import
Items 2018 are substituted as under:
"NOTE:
1. Export off Rare Earth compounds
classified as Beach Sand Minerals
(BSM) , namely [Ilmenite, Rutile,
NEUTRAL CITATION
C/SCA/5753/2022 ORDER DATED: 17/01/2025
undefined
Leucoxene (Titanium bearing
mineral), Zircon, Garnet,
Sillimanite and Monazite (Uranium
and Thorium)], shall be regulated in
Schedule 2 of ITC(HS)
Classification.
2. Other minerals under code 2617
are freely exportable, except those
which have been notified as
prescribed substances and controlled
under Atomic Energy Act, 1962".
3. A new entry at Sl. No. 98A is
inserted in Chapter 26 of Schedule 2 of
ITC (HS) Classification of Export &
Import Items 2018 as follows:
S.No Tariff Unit Item Export Policy
Items HS Description Policy Condition
Code
98A 2508 5031 Kg Beach Sand STE Export
2508 5032 Minerals (State through
2508 5039 [Ilmenite, Trading Indian
2612 1000 Rutile,Leuco Enterpr Rare
2612 2000 xene(Titaniu ise) Earths
NEUTRAL CITATION
C/SCA/5753/2022 ORDER DATED: 17/01/2025
undefined
2614 0010 m bearing Limited
2614 0020 mineral), (IREL)
2614 0031 Zircon,
2614 0039 Garnet,
2614 0090 Sillimanite
2615 1000 and Monazite
2513 2030 (Uranium and
Thorium)]
4. Effect of this Notification:
Export of Beach Sand Minerals have
been brought under STE and shall be
canalized through Indian Rare Earths
Limited (IREL). Beach sand minerals,
permitted anywhere in the export policy,
will now be regulated in terms of policy
under at SI. No. 98A of Chapter 26 of
Schedule 2 Export Policy."
8. On perusal of the above Notification, it
appears that the Notification has inserted
of ITC (HS) Classification of Export and
Pmport Items, 2018. Tariff Items HS Codes
mentioned in this include all the items which
NEUTRAL CITATION
C/SCA/5753/2022 ORDER DATED: 17/01/2025
undefined
are now classified as Beach Sand Minerals
including the Garnet as per the Tariff Item HS
Code 25132030 which is applicable to the
Natural Garnets which were exported by the
petitioners prior to the impugned
Notification. The Note No.1 prior to the
aforesaid impugned Notification reads as
under:
"1. Rare Earth compounds are freely
exportable, but rare earth phosphates,
which contain uranium and thorium are
prescribed substances and are
controlled as per provisions of Atomic
Energy Act, 1962."
9. By the aforesaid Notification, the Note
No.1 in Chapter 26 is now substituted to read
as under:
NEUTRAL CITATION
C/SCA/5753/2022 ORDER DATED: 17/01/2025
undefined
1. Export off Rare Earth compounds
classified as Beach Sand Minerals
(BSM) , namely [Ilmenite, Rutile,
Leucoxene (Titanium bearing
mineral), Zircon, Garnet,
Sillimanite and Monazite (Uranium
and Thorium)], shall be regulated in
Schedule 2 of ITC(HS)
Classification.
10. The Note No.2 which existed earlier
continued as it is, and provides that the
other minerals under code 2617 are freely
exportable, except those which have been
notified as prescribed substances and
controlled under Atomic Energy Act, 1962.
11. Note No.3 has inserted a new entry at SI.
No.98A containing the Tariff Item HS Codes as
under :
NEUTRAL CITATION
C/SCA/5753/2022 ORDER DATED: 17/01/2025
undefined
25085031 Lumps
25085032 Fines (including sand)
25085039 Other
25132030 Natural garnet
26121000 Uranium ores and
concentrates
26122000 Thorium ores and
concentrates
26140010 Ilmenite, unprocessed
26140020 Ilmenite, upgraded
(beneficiated ilmenite
including ilmenite ground)
26140031 Rare earth oxides including
rutile sand
26140039 Other
26140090 Other
26151000 Zirconium ores and
concentrates
12. It appears from the above description of
Tariff Item HS Codes that the Rare Earth
Compounds are now being classified as "Beach
Sand Minerals" by the impugned Notification.
NEUTRAL CITATION
C/SCA/5753/2022 ORDER DATED: 17/01/2025
undefined
13. It would be therefore necessary to refer
to the Rules, 2016 read with provisions of the
Atomic Energy Act, 1962. The Rules, 2016 have
been come into existence in exercise of powers
conferred by Section 11-B of the Act, 1957 and
Rule 2(c) defines Beach Sand Minerals as
under:
"(c) Beach Sand Minerals" means
economic heavy minerals found in the
teri or beach sands, which include
ilmenite, rutile, leucoxene, garnet,
monazite, zircon and sillimanite."
14. The same definition of Beach Sand Minerals
is incorporated in Part B of the First
Schedule to the Act, 1957 at Serial No.12
being part of the Atomic Minerals. Thus, on
conjoint reading of Rules, 2016 read with Part
B of the First Schedule of the Act, 1957, it
NEUTRAL CITATION
C/SCA/5753/2022 ORDER DATED: 17/01/2025
undefined
appears that the same defines Atomic Minerals
including Beach Sand Minerals being economic
heavy minerals found in the teri or beach
sands which include ilmenite, rutile,
leucoxene, garnet, monazite, zircon and
sillimanite.
15. It is pertinent to note that in the
impugned Notification, export of rare earth
compounds are classified as Beach Sand
Minerals which includes various Tariff Items
HS Codes pertaining to the minerals found in
the teri or beach sand to be considered as
Atomic Minerals, however, the impugned
Notification does not refer to either teri or
beach sand but only refers to the Beach Sand
Minerals or Rare Earth Compounds as per the
Tariff Items HS Codes mentioned in the new
entry at SI. No.98A inserted in Chapter 26 of
NEUTRAL CITATION
C/SCA/5753/2022 ORDER DATED: 17/01/2025
undefined
Schedule 2 of ITC (HS) Classification of
Export and Import Items, 2018. As per the
Tariff Items HS Codes, all types of minerals
mentioned as above for the purpose of exports
are now classified as 'Beach Sand Minerals'
without reference to either teri or beach
sand. The contention of the petitioners is
that the item description even in the
impugned Notification is of paramount
importance as it refers to "Beach Sand
Minerals" which is defined in the Rules, 2016
as well as in the part B of the First Schedule
of the Act, 1957.
16. Reference was made to the Public Interest
Litigation before the Hon'ble Madras High
Court for being the basis of issuance of the
impugned Notification. It appears that on the
basis of the aforesaid Notification it was
contended that the item description in the
NEUTRAL CITATION
C/SCA/5753/2022 ORDER DATED: 17/01/2025
undefined
impugned Notification has to be strictly
construed to include only the minerals which
are found only in teri or beach sand and not
in any other part of India for the purpose of
regulation of export through State Trading
Enterprise.
17. The Hon'ble Apex Court in case of M/s.Jain
Exports Private Limited (Supra) in case of
import of coconut oil other than the
prescribed method of import canalised through
State Trading Enterprise as per the relevant
Import Policy, held that the import was of
non-edible coconut oil and therefore, the said
Policy would not cover the import of the non-
edible coconut oil. The Hon'ble Apex Court
while considering the purport of paragraph
No.5 of Appendix 9 of the Import Policy which
contains only 'Coconut Oil' whether edible or
NEUTRAL CITATION
C/SCA/5753/2022 ORDER DATED: 17/01/2025
undefined
not to be canalised item and not the item
under the open general items in the export
policy of 1980-81, came to the conclusion that
as per the terms of the Import Policy of 1980-
81, "Coconut Oil" in paragraph No.5 of the
Appendix 9 would include both edible and non-
edible oil and therefore, the same is to be
imported through State Trading Corporation of
India only on the basis of the foreign
exchange released by the Government and not
under the open general license.
18. The Hon'ble Apex Court in paragraph No.7
of the said decision has discarded the
contention of the appellant to apply the
change in the Import Policy for the
classification in 1981-82 for specifying
edible and non-edible coconut oil and held
that "if 'Coconut Oil' takes within its fold
NEUTRAL CITATION
C/SCA/5753/2022 ORDER DATED: 17/01/2025
undefined
all varieties of it, it must follow that in
1980-81, all varieties of coconut oil were
included in paragraph 5 of Appendix 9. It is,
in our opinion, unnecessary referred to the
authorities and presidents to support such and
obvious conclusion".
19. In the facts of the present case, the
impugned Notification contains ITC HS Codes
which would be relevant for the purpose of
applying the policy decision of the respondent
-Central Government for regulation of the
exports to be canalised through State Trading
Enterprise and merely, such Tariff Item HS
Codes are classified as 'Beach Sand Minerals'
without reference to teri or beach sand, the
same would not make any difference and
accordingly, the contention raised on behalf
of the petitioners that the Natural Garnet
NEUTRAL CITATION
C/SCA/5753/2022 ORDER DATED: 17/01/2025
undefined
exported by the petitioners prior to the
impugned Notification cannot be covered by the
impugned Notification is without any basis as
the purport of the policy decision of the
Central Government is to regulate the exports
which are forming part of the Atomic Minerals
so as to restrict the export of Minerals which
can lead to production of either Thorium or
Uranium used for various atomic warheads.
20. In case of Akshay N. Patel versus Reserve
Bank of India and Another reported in (2022)
3 SCC 694, the Hon'ble Apex Court while
interfering with the policy decision of the
Reserve Bank of India has held as under :
"64. Regulating the economy is
reflective of the compromise between the
interests of private commercial actors
and the democratic State that represents
and protects the interests of the
NEUTRAL CITATION
C/SCA/5753/2022 ORDER DATED: 17/01/2025
undefined
collective. Scholars across the world
have warned against the judiciary
constitutionalising an unregulated
marketplace61. This Court must be bound
by a similar obligation, in order to
preserve its fidelity to the
Constitution. With the transformation in
the economy, the Courts must also be
alive to the socio-economic milieu. The
right to equality and the freedom to
carry on one's trade cannot inhere a
right to evade or avoid regulation. In
liberalized economies, regulatory
mechanisms represent democratic
interests of setting the terms of
operation for private economic actors.
This Court does not espouse shunning of
judicial review when actions of
regulatory bodies are questioned.
Rather, it implores intelligent care in
probing the bona fides of such action
and nuanced deference to their expertise
in formulating regulations. A casual
invalidation of regulatory action in the
garb of upholding fundamental rights and
freedoms, without a careful evaluation
NEUTRAL CITATION
C/SCA/5753/2022 ORDER DATED: 17/01/2025
undefined
of its objective of social and economic
control, would harm the general
interests of the public.
65. In the instant case, the RBI has
demonstrated a rational nexus in the
prohibition of MTTs in respect of PPE
products and the public health of Indian
citizens. The critical links between FTP
and MTTs have been established by the
respondents. Facilitating MTTs in PPE
products between two distinct nations
may prima facie appear as having no
bearing on the availability of domestic
stocks. However, the RBI has carefully
established the connection between the
use of Indian foreign exchange reserves,
MTTs and the availability of domestic
stocks (as noted in Sections C.2 and
C.3). As a developing country with a
sizeable population, RBI's policy to
align MTT permissibility with the FTP
restrictions on import and export of PPE
products cannot be questioned. Thus,
this Court is constrained to defer to
the regulations imposed by RBI and the
NEUTRAL CITATION
C/SCA/5753/2022 ORDER DATED: 17/01/2025
undefined
UOI, in the interests of preserving
public health in a pandemic. This
deference is by no means uncritical. In
fact, one of us (Justice D Y
Chandrachud), in a three-judge Bench of
this Court in Gujarat Mazdoor Sabha v.
State of Gujarat had decried the State's
tenuous claim of a public health
emergency to dilute welfare conditions
in labour laws. This Court had stressed
that balancing individual rights against
measures adopted to combat the public
health crisis must continue to satisfy
the test of proportionality. Justice D Y
Chandrachud noted:
"30. Even if we were to accept the
respondent's argument at its
highest, that the pandemic has
resulted in an internal disturbance,
we find that the economic slowdown
created by the Covid-19 Pandemic
does not qualify as an internal
disturbance threatening the security
of the State. The pandemic has put a
severe burden on existing,
NEUTRAL CITATION
C/SCA/5753/2022 ORDER DATED: 17/01/2025
undefined
particularly public health,
infrastructure and has led to a
sharp decline in economic
activities. The Union Government has
taken recourse to the provisions of
the Disaster Management Act, 2005.
However, it has not affected the
security of India, or of a part of
its territory in a manner that
disturbs the peace and integrity of
the country. The economic hardships
caused by Covid-19 certainly pose
unprecedented challenges to
governance. However, such challenges
are to be resolved by the State
Governments within the domain of
their functioning under the law, in
coordination with the Central
Government. Unless the threshold of
an economic hardship is so extreme
that it leads to disruption of
public order and threatens the
security of India or of a part of
its territory, recourse cannot be
taken to such emergency powers which
are to be used sparingly under the
NEUTRAL CITATION
C/SCA/5753/2022 ORDER DATED: 17/01/2025
undefined
law. Recourse can be taken to them
only when the conditions requisite
for a valid exercise of statutory
power exist under Section 5. That is
absent in the present case.
40. The need for protecting labour
welfare on one hand and combating a
public health crisis occasioned by
the pandemic on the other may
require careful balances. But these
balances must accord with the rule
of law. A statutory provision which
conditions the grant of an exemption
on stipulated conditions must be
scrupulously observed. It cannot be
interpreted to provide a free reign
for the State to eliminate
provisions promoting dignity and
equity in the workplace in the face
of novel challenges to the State
administration, unless they bear an
immediate nexus to ensuring the
security of the State against the
gravest of threats."
NEUTRAL CITATION
C/SCA/5753/2022 ORDER DATED: 17/01/2025
undefined
66. Thus, it is not this Court's
stance that judicial review is stowed in
cold storage until a public health
crisis tides over. This Court retains
its role as the constitutional watchdog
to protect against State excesses. It
continues to exercise its role in
determining the proportionality of a
State measure, with adequate
consideration of the nature and purpose
of the extraordinary measures that are
implemented to manage the pandemic.
Democratic interests that secure the
well-being of the masses cannot be
judicially aborted to preserve the
unfettered freedom to conduct business,
of the few.
67. Therefore, we find that the judgment
dated 8 October 2020 of the Madhya
Pradesh High Court was correct in
holding that Clause 2(iii) of the 2020
MTT Guidelines was a proportionate
measure in ensuring the availability of
sufficient domestic stock of PPE
products. The measure was validly
NEUTRAL CITATION
C/SCA/5753/2022 ORDER DATED: 17/01/2025
undefined
enacted, in pursuance of legitimate
state interest and did not
disproportionately impact the
fundamental rights of the appellant.
Hence, Clause 2(iii) passes muster under
Articles 14, 19(1)(g) and 21. For the
reasons noted in this judgment, we see
no need to interfere."
21. We are therefore, of the opinion that the
impugned Notification is a proportionate means
in regulating the export of Atomic Minerals
which includes Garnet whether found from teri
or anywhere else in pursuance of the
legitimate State interest and did not
disproportionately impact the fundamental
rights of the petitioners.
22. In view of the foregoing reasons, we do
not find any substance to the challenge in the
impugned Notification and petition is
NEUTRAL CITATION
C/SCA/5753/2022 ORDER DATED: 17/01/2025
undefined
accordingly dismissed with no orders as to
cost. Notice is discharged.
(BHARGAV D. KARIA, J)
(D.N.RAY,J)
PALAK
