Telangana High Court
M/S. Rain Ch Carbon Vizag Ltd vs Office Of The Additional Director ... on 2 May, 2025
* THE HONOURABLE SRI JUSTICE N.V. SHRAVAN KUMAR
+ WRIT PETITION No.7538 of 2025
% Dated 02-05-2025
Between:
# M/s. Rain CII Carbon (Vizag) Limited and another
... Petitioners
and
$ Office of the Additional Director General of Foreign Trade,
Hyderabad and others.
.... Respondents
! Counsel for the Petitioners : Mr. Sai Sanjay Suraneni
^ Counsel for the respondents : Gadi Praveen Kumar
Deputy Solicitor General of India
< GIST : ---
>HEAD NOTE : ---
? Cases referred: :
1. (1990) 4 Supreme Court Cases 594
2. (2021) 6 Supreme Court Cases 771
3. (2022) 16 Supreme Court Cases 176
NVSK, J
2 W.P. No.7538 of 2025
THE HONOURABLE SRI JUSTICE N.V. SHRAVAN KUMAR
WRIT PETITION No.7538 of 2025
ORDER:
This writ petition is filed with the following prayer:
"(i) Declaring the action of Respondent
No.1/Regional Authority, Additional Director
General of Foreign Trade, Hyderabad in issuing
the Rejection Letter dated 05.02.2025 bearing File
No. 09AX04000927AM25 and Deficiency Letter
dated 15.01.2025 bearing File No.
09AX04000927AM25 as being arbitrary, illegal
besides being violative of the Petitioners' rights
under Articles 14, 19 and 300 of the Constitution
of India, the Foreign Trade (Development and
Regulation Act), 1992, Foreign Trade Policy, 2023,
DGFT Notification 68/2023 dated 07.03.2024,
CAQM Order dated 15.02.2024 and the Hon'ble
Supreme Court's order dated 10.10.2023 in
W.P. (C) No.13029/1985, M.C. Mehta v. Union of
India, and consequently quash the Rejection
Letter dated 05.02.2025 bearing File
No.09AX04000927AM25 and Deficiency Letter
dated 15.01.2025 bearing File No.
09AX04000927AM25; and
(ii) Declare that raw pet coke (RPC) imports
by the Petitioners for supply of calcined pet coke
(CPC) to SEZ units in India are entitled to the
grant of Advance Authorisation under the Foreign
Trade Policy, 2023; and
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(iii) Direct the Respondents to grant
Advance Authorisation to the Petitioners against
their Application for Grant of Advance
Authorisation dated 31.12.2024 bearing File No.
09AX04000927AM25; and
(iv) Direct the Respondents to permit the
Petitioners to supply CPC to SEZ units in India in
terms of the order dated 15.02.2024 issued by the
Commission for Air Quality Management in
National Capital Region and Adjoining Areas read
with the Hon'ble Supreme Court's order dated
10.10.2023 in W.P. (C) No.13029/1985, M.C.
Mehta v. Union of India; and
(v) In the alternative and without prejudice
to the above prayers, declare the actions of the
Respondents in issuing the DGFT Notification
No.68/2023 dated 07.03.2024, if and insofar as it
purports to prohibit the supply of CPC by
domestic calciners to SEZ units as being illegal
arbitrary, illegal besides being violative of the
Petitioners' rights under Articles 14 & 19 of the
Constitution of India; and consequently quash the
DGFT Notification No.68/2023 dated 07.03.2024,
if and insofar as it purports to prohibit the supply
of CPC by domestic calciners to SEZ units; and
(vi) Pass such other Order or Orders as the
Hon'ble Court may deem fit and proper in the
facts and circumstances of the case."
2. The Petitioner No.1 is a company incorporated under the
provisions of the Companies Act, 1956. On account of its export
volumes, the petitioner's company had been granted accreditation as a
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Four-Star Export House. The petitioner Company is engaged in the
business of calcined petroleum coke (hereinafter referred to as 'the
CPC') manufacturing CPC from Raw Petroleum Coke (hereinafter
referred to as "the RPC"). The petitioner Company had applied for
issuance of Advance Authorisation for its manufacturing unit located
in the domestic tariff area (DTA") in the Visakhapatnam Port, which
has been in operations since 1998 with a CPC production capacity of
0.5 million Tonnes Per Annum ("TPA") and a power co-generation
facility of 49 MW.
3. The Petitioner No.2 holds 425 shares of Rain Industries Limited.
4. Respondent No.1, Office of the Additional Director General of
Foreign Trade, Hyderabad Regional Authority, (Additional DGFT)
("Regional Authority"), is inter alia responsible for administering the
Advance Authorisation scheme under the Foreign Trade Policy
(hereinafter referred to as "the FTP") for Hyderabad and
Vishakhapatnam.
5. The Respondent No.2, Directorate General of Foreign Trade
("DGFT"), is the office through which the Central Government
exercises its powers of regulation of foreign trade under the Foreign
Trade (Development and Regulation) Act, 1992 ("FTDR Act") and the
Foreign Trade Policy, 2023 (FTP").
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6. Respondent No.3, Union of India, Department of Commerce
through the Ministry of Commerce and Industry is responsible for
development and implementation of foreign trade policies.
7. The case of the petitioners, in nutshell, as stated in the affidavit,
is that they are India's leading manufacturer and exporter of anode-
grade CPC and are dependent on imported RPC required for the
manufacture of anode-grade CPC. The requisite quantity of RPC is
not available in India. The Hon'ble Supreme Court permitted the
import of RPC by calciners up to 1.4 MMT per annum vide order dated
09.10.2018. Thereafter, RPC import quota was periodically allocated
by the DGFT to calciners including the Petitioners' DTA Unit every
financial year. The Hon'ble Supreme Court vide order dated
10.10.2023 in the PIL Proceedings, directed the Commission for Air
Quality Management (CAQM) to take a fresh look into all issues
pertaining to petroleum coke, after considering the pleas of various
persons including the Petitioners. Pursuant to the said directions, the
CAQM issued an order inter alia permitting the import of a total of 1.9
MMT RPC by CPC manufacturers for financial year 2024-25 (higher
than permitted by the Hon'ble Supreme Court's order dated
09.10.2018). Pertinently, the CAQM Order specifically permitted
exports by domestic calcining units to SEZ Units. The relevant
paragraph of the CAQM Order is extracted herein below for reference:
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"I. Import of RPC and CPC by
Calciners/Aluminium Industry
i. Import of total 1.9 MMT RPC for CPC
Manufacturers and 0.5 MMT CPC for Aluminium
Industry respectively shall be permitted during
2024-25 and l.9 MMT RPC for Calciners and 0.8
MMT CPC for Alunminium Industry respectively
from 2025-26 onwards, strictly subject to the
following conditions:
a. ....
b. Import of pet coke (CPC/RPC) shall
be permitted to cater entirely to the domestic
needs of aluminium industry and other industries,
for the processes as permitted under various
regulations / statutes and export of calcined pet
coke through such calcining units shall be
discouraged. However, "deemed exports" to SEZ
units would be permitted;
c. ....
[Emphasis supplied]"
8. In compliance with the CAQM Order, the DGFT amended the
Import Policy condition permitting the import of RPC subject to the
terms and conditions of the CAQM Order. The relevant clauses of the
DGFT Notification are extracted below:
"Revised Policy Condition:
Total import of 1.9 Million MTs of Raw
Petroleum Coke (RPC) for manufacturing Calcined
Petroleum Coke (CPC) and 0.5 Million MTs of CPC
for Aluminium Industry respectively shall be
permissible during 2024-25, and 1.9 Million MTs
of RPC for manufucturing CPC manufacturing and
0.8 Million MTs of CPC for Aluminium Industry
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respectively shall be permissible from 2025-26
onwards, subject to the following conditions:
i. Import of RPC & CPC shall be permitted only as
feedstock / raw material and under no
circumstances shall be used as fuel.
ii. Import of RPC and CPC shall be permitted to
cater entirely to the domestic needs of aluminium
industry, for the processes as permitted under the
relevant regulations/statutes.
iii. Import of RPC by Calciners shall be on Actual
User basis and shall not be transferred to any
other unit(s) including SEZ unit(s). Export of
CPC by Calciners shall not be permitted.
iv. All other conditions as mentioned in the
Commission for Air Quality Management in NCR &
Adjoining Areas Order No.- F.
No.160014/16/2021-MERC/Pet Coke-35 dated
15.02.2024 should also be complied with."
9. As per the Notification No.68/2023 dated 07.03.2024 issued by
the DGFT, the Petitioners have applied for and received Advance
Authorisation (hereinafter referred to as 'the AA') on 14.05.2024,
13.08.2024 and 28.10.2024 against the import of 81,000 MT, 55,500
MT and 35,000 MT of RPC for the manufacture and export of 54,000
MT, 37,000 MT and 23,333 MT of CPC respectively to the Vedanta
SEZ. Thereafter, the petitioners made their Fourth application for
Advance Authorisation on 31.12.2024 for import of 54,900 MT of RPC
for manufacture and export of 36,600 MT of CPC to the Vedanta SEZ
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Unit. However, this time around, the Regional Authority issued a
Deficiency Letter on 15.01.2025 stating:
"1. As per DGFT Notification No.68/2023
dt.07.03.02024, the revised policy condition 06 (b)
(iii), import of RPC by calciners shall be on Actual
use basis and shall not be transferred to any other
unit(s) including SEZ unit(s). Exports of CPC by
calciners are not permitted."
10. As aforesaid, the CAQM Order expressly permits exports by
domestic calciners to SEZ units. Accordingly, the Petitioners
responded to the Deficiency Letter on 20.01.2025. The relevant
portion of the Petitioner's response dated 20.01.2025 is extracted
herein below:
"...
4.1 At the outset, we would like to inform
you that RCCVL DTA Unit ("DTA Unit") received
the allocation of Raw Petroleum Coke ("RPC") from
the Director General of Foreign Trade (DGFT) as
per revised policy condition 6(b)(ii) in Notification
No.68/2023 dated 07.03.2024 issued under the
guidelines prescribed by Commission for Air
Quality Management (CAQM) order dated
15.02.2024 under the aegis of the Hon'ble
Supreme Court of India (hereinafter referred as
"CAQM Order" (Annexure-1).
4.2 Accordingly, the DTA Unit has been
importing/procuring the RPC on 'Actual User
Basis' and not transferring any RPC to any other
unit(s) including the SEZ Unit(s).
4.3. Furthermore, RCCVL DTA plant is not
exporting any Calcined Petroleum Coke ("CPC")
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outside India to comply with revised policy
condition No.6 (b) (iii) of aforesaid notification
stating that 'Export of CPC by calciners shall not
be permitted.
4.4. In this regard, we would like to submit
that the DGFT Notification No.68/2023 revised
policy condition 06(b)(vi) clearly states that
"All other conditions as mentioned in the
Commission for Air Quality Management in NCR
and Adjoining Areas Order No.F No.
160014/I6/2021 MERD/PetCoke-35 dated
15.02.2024 should also be complied with".
4.5. The Commission for Air Quality
Management ("CAQM") in NCR and Adjoining
Areas Order on Page 8 clearly states in the policy
condition No.10.1.i.b that "... However, "deemed
exports" to SEZ Units would be permitted."
As such, it can be kindly noted that the CPC
export sales to the SEZ Unit located in India is
permitted by both the CAQM and DGFT.
4.6. Accordingly, the aforesaid application
for Advance Authorisation is meant for importing
RPC, manufacturing CPC and to be supplied to
Vedanta SEZ Unit, which is a 'Deemed Export' and
categorically permitted by the said CAQM Order.
4.7. Based on above CAQM and DGFT
Guidelines, your good office has earlier issued the
Advance Authorisation to RCCVL DTA Unit for
importing RPC and then for processing and
supplying such manufactured CPC to Vedanta
SEZ unit vide Authorisation No.0911008243 dated
28.10.2024. (Annexure-11), which is a 'Deemed
Export."
NVSK, J
11. In the light of the above, the petitioners requested the Regional
Authority to grant Advance Authorisation against its application dated
31.12.2024. On 05.02.2025, the Regional Authority rejected the
Petitioners' Application for Advance Authorisation on the following
grounds:
"Your Application has been rejected due to
the following reasons.:
1. Exports to SEZ units are covered under
physical/direct exports wherein a Bill of Exports is
generated, whereas deemed exports are defined in
Para 7.02 of FTP 2023, which does not cover
exports to SEZ units as deemed exports.
2. As per DGFT Notification No.68/2023
dt.07.03.02024, the revised policy condition
06(b)(iii) import of RPC by calciners shall be on
Actual use basis and shall not be transferred to
any other unit(s) including SEZ unit(s). Export of
CPC by calciners shall not be permitted."
12. Questioning the impugned rejection order dated 05.02.2025,
the petitioners filed the present writ petition.
13. The grounds urged in writ affidavit it is submitted that the
Regional Authority has erroneously refused to grant Advance
Authorisation to the Petitioners vide Rejection Letter dated 05.02.2025
stating that the domestic calciners cannot supply CPC to SEZ units,
and wrongly refuses Advance Authorisation to the petitioners' RPC
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import on that basis. Further, the Regional Authority does not have
the authority or jurisdiction to take a view of the term "deemed
exports" that is contrary to the letter and purpose of the CAQM Order.
By virtue of Clause 4.05(c)(i) read with Clause 4.03(a) of the FTP,
imports incorporated in goods supplied to SEZ units are entitled to
Advance Authorisation. Further, by Clause 7.02(A)(a) of the FTP,
goods supplied against Advance Authorisation are "deemed exports."
Thus, under the FTP, RPC imported to manufacture CPC to be
supplied to an SEZ unit is a "deemed export" even for the purpose of
the FTP. It is further urged that the Rejection Letter neither considers
nor gives reasons for refusing to give effect to the CAQM Order, which
specifically permits the domestic calciners to supply CPC to SEZ units
manufactured using imported RPC.
COUNTER OF RESPONDENTS:
14. On behalf of the respondents, the Joint Director General of
Foreign Trade, Hyderabad, Telangana, while denying the writ
averments, filed counter affidavit, inter alia, stating that a writ petition
filed under Article 226 of Constitution of India is not maintainable in
view of the availability of alternative remedies by way of revision
provided under Section 16 of the FT (D&R) Amendment Act, 1992 read
with FT (D&R) Amendment Act, 2010 and by way of filing an
application under Para 2.58 of FTP, which is extracted hereunder:
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"Para 2.58 Interpretation of Policy - (a) The
decision of DGFT shall be final and binding on all
matters relating to interpretation of Policy, or
provision in Handbook of Procedures, Appendices
and Aayat Niryat Forms or classification of any
item for import/export in the ITC (HS)."
15. In support of this contention, reliance was placed on the
following judgments. PHR Invent Educational Society v. UCO Bank
and Others, (2024), Arc Private Limited vs. Vishwa Bharati Vidya
Mandir & Ors., (2022) 5 SCC 345, Federal Bank Ltd. vs. Sagar
Thomas & Ors., (2003) 10 SCC 733, State Bank of India vs.
Arvindra Electronics (P) Ltd., 2022 SCC Online SC 1522, United
Bank of India vs. Satywati Tondon & Others, (2010) 8 SCC 110,
Authorized Officer, State Bank of Travancore & Another vs.
Mathew K.C., (2018) 3 SCC 85, Varimadugu OBI Reddy vs. B.
Sreenivasulu & Others, (2023) 2 SCC 168.
16. It is further submitted that in similar situations, the
companies/firms have availed the remedy of review under Section 16
of FTDR Act, 1992 before the Director General of Foreign Trade, New
Delhi and the reviewing authority has de nova considered the review
application.
17. It is further submitted that the Hon'ble Supreme Court vide its
Order dated 10.10.2023 in WP(C) No.13029 of 1985 titled as
M. C. Mehta vs. Union of India & Ors., delegated certain issues
related to pet coke, to the CAQM (Commission For Air Quality
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Management), inter alia observing that "a holistic view would have to
be taken as to the distribution of the Pet Coke available in the country
and the Pet Coke required to be imported and how both of them should
be distributed inter se the industries." The Commission vide its Order
dated 25.10.2023 accordingly constituted an inter-ministerial
Sub-Committee which deliberated the issues in detail relating to the
distribution of the Pet Coke available in the country and the Pet Coke
required to be imported. With regard to the issue of future import of
RPC and CPC in the country for domestic use, availability of RPC in
the country and total demand of CPC, the following observations were
made:
i. The conversion of RPC to CPC, is
associated with substantial air pollution load
(S02 emissions) therefore the sulphur content in
calcined pet coke is required to be reduced to 3.5%
as against 7-8% sulphur content in fuel grade raw
pet coke.
ii. Export of domestically manufactured
CPC, by processing of imported RPC by such
calciners, which substantially enhances harmful
emissions and the air pollution load in the country,
thus needs to be strongly discouraged; Therefore
purpose of import of RPC is restricted primarily to
fulfil only the domestic demand of CPC.
18. It is submitted that the Commission, accordingly, in compliance
of the directions of the Hon'ble Supreme Court and the observations
and recommendations made by the inter-ministerial subcommittee
directed as under:
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"Import of pet coke (CPC/RPC) shall be permitted
to cater entirely to the domestic needs off
aluminium industry and other industries, for the
processes as permitted under various regulations
/ statutes and export of calcined pet coke through
such calcining units shall be discouraged."
19. It is submitted that based on the directions issued by CAQM
vide its order dated 14.02.2024 a notification dated 07.03.2024 was
issued by DGFT, notifying amendment in import policy condition for
raw pet coke and calcined pet coke under Chapter 27 of Schedule-1
(Import Policy) of ITC (HC) 2022 with immediate effect.
20. It is submitted that from a perusal of the DGFT Notification, it
permits export by domestic calcining units to SEZ units whereas,
Clause 6(b)(i) and (iii) provides as follows:
"i. Import of RPC and CPC shall be
permitted to cater entirely to the domestic needs
of aluminium industry, for the processes as
permitted under the relevant regulations
/statutes.
ii. Import of RPC by Calciners shall be on
Actual User basis and shall not be transferred to
any other unit(s) including SEZ unit(s). Export of
CPC by Calciners shall not be permitted."
21. It is further submitted that the import product mentioned in the
head 'Input Details' is raw pet coke and the export product as
mentioned in the Head 'Export Product' is calcined petroleum coke
and noted that the Custom Notification Number as selected under
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head 'Basic Details' of the application is 'Notification No.21/2023-Cus
dated 1-4-2023 Advance Authorisation for physical exports', which is
opted only for making physical exports and not deemed exports.
Whereas, the CAQM order dated 15-02-2024 mentions that 'deemed
exports to SEZ is permitted' and not physical exports. It is further
submitted that based on the application for advance authorization, it
seems that the firm has opted only for the physical exports of CPC.
Since, physical export of CPC is not permitted, therefore, the
application of the petitioner stood rejected and no person can claim an
authorization as a right and the grant or renewal of the same can be
rejected by DGFT or by the Regional Authority, by specifying valid
reasons for such rejection.
22. It is further submitted that 'authorisation is not a right' and the
earlier authorisations granted to the petitioners are in the process of
being reviewed with the appropriate authority. The CAQM order
expressly permits 'deemed exports' to SEZ units, whereas, as per FTP
and SEZ act, supplies made to the SEZ units are only exports, i.e.
physical exports and not deemed exports. A Special Economic Zone
(SEZ) is considered a "foreign territory" for the purpose of trade
operations and customs duties, meaning that goods entering SEZ are
treated as if they are entering a foreign country. Respondents further
refer to Section 2(m)(ii) of SEZ Act, 2005, which reads as under:
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Section 2 (m) (ii) of SEZ Act, 2005, export means:
"(m) "export" means (i) supplying goods, or providing services,
from the Domestic Tariff Area to a Unit or Developer;'
Definition of "Unit" under 2 (zc) of SEZ Act, 2005, provides
as follows:
'(zc) "Unit" means a Unit set up by an entrepreneur in a Special
Economic Zone and includes an existing Unit, an Offshore Banking
Unit and a Unit in an International Financial Services Centre, whether
established before or established after commencement of this Act:'
Thus, it can be deduced from the above provision of SEZ Act, 2005
that any goods supplied from any DTA i.e. Domestic Tariff Area
(where the petitioner firm is located) to any unit in a SEZ is to be
considered as export i.e. physical export.
23. It is further submitted that as far as 'Deemed export' is
concerned, Para 7.02 of FTP provides as follows:
7.02 Categories of Supply
Supply of goods under following categories (a) to (c) by a
manufacturer and under categories (d) to (g) by main / sub-
contractors shall be regarded as Deemed Exports':
A. Supply by manufacturer:
(a) Supply of goods against Advance Authorisation / Advance
Authorisation for annual requirement / DFIA.
(b) Supply of goods to EOU/ STP /EHTP/BTP.
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(c) Supply of capital goods against EPCG Authorisation.
Exports made to SEZ are not covered under the meaning of
deemed exports as per FTP.
24. It is submitted that the petitioners are trying to build
connection between advance authorisation, physical export and SEZ
and intentionally misinterpreting the provisions. Further reference
was taken to:
a. Para 4.05 (c) (1) of FTP, clearly states that advance
authorization shall be issued for physical exports which also includes
exports to SEZ. Meaning thereby that, supply to SEZ is considered as
physical exports and not deemed exports.
b. Para 7.02 (A) (a) of FTP provides that, exports will be
considered as deemed exports if in case, exports/supplies of the goods
are made against Advance authorization/Advance authorization for
annual requirement/DFIA. Meaning thereby that if supplies are made
to the company holding advance authorization or has obtained
advance authorization, then it is considered as deemed exports.
25. It is further submitted that the two provisions of the Foreign
Trade Policy deal with exports under Advance Authorization (AA) but
classify them differently based on the nature of the recipient.
While Para 4.05(c) (i) considers supplies to SEZs as physical exports,
Para 7.02(A)(a) treats supplies to Advance Authorization holders as
deemed exports. Thus, the petitioner is not eligible to claim AA as a
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right as on cumulative reading of CAQM order and FTP provisions,
the firm is not doing any deemed export to SEZ unit.
26. It is further submitted that the Act itself provides the following
efficacious remedies. For reference Section 16 of the Act is extracted:
"Section 16 Review: The Central
Government, in the case of any decision or order
made by the Director General, or the Director
General in the case of any decision or order made
by any officer subordinate to him, may on its or
his own motion or otherwise, call for and examine
the records of any proceedings, for the purpose of
satisfying itself or himself, as the case may be, as
to the correctness, legality or propriety of such
decision or order and make such orders thereon
as ay be deemed fit:
Provided that no decision or order shall be
varied under this section so as to prejudicially
affect any person unless such person -
(a) has, within a period of two years from
the date of such decision or order, received a
notice to show cause why such decision or order
shall not be vaired; and
(b) has been given a reasonable opportunity
of making representation and, if he so desires, of
being heard in his defence.'
Remedy by way of application under Para 2.58 of FTP :
Para 2.58 Interpretation of Policy - (a) The
decision of DGFT shall be final and binding on all
matters relating to interpretation of Policy, or
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provision in Handbood of Procedures, Appendices
and Aayat Niryat Forms or classification of any
item for import / export in the ITC (HS).'
Further, replying to the grounds urged, respondents submit as
follows:
27. That as per the DGFT notification dated 07-03-2024, Import of
RPC by Calciners shall be on actual user basis and shall not be
transferred to any other unit(s) icluding SEZ unit(s). Export of CPC by
calciners shall not be permitted. Further, the CAQM order expressly
permits 'deemed exports' to SEZ units, whereas, as per FTP and SEZ
Act, supplies made to the SEZ units are only exports, i.e. physical
exports and not deemed exports.
28. That the respondents have not refused the authorisation
erroneously but based on the explanations and that the impugned
order is reasoned order.
29. That the DGFT is empowered to issue Notification under Section
3(2) of the FT & (DR) Act, 1992 (as amended) which provides that the
Central Government may, by order published in the official Gazette,
make provision for prohibiting, restricting or otherwise regulating, the
import or export of goods or services or technology.
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30. Section 5 of the FT (D&R) Act, 1992 (as amended) reads as
under:
"The Central Government may from time to
time formulate and announce by notification in
the Official Gazette the export and import policy
and may also in the like manner amend that
policy".
31. Eventually it is submitted that DGFT is well within its power to
issue the Notification and the rejection order dated 05.02.2025 is a
reasoned order as per Foreign Trade Policy, 2023 and the writ petition
is liable to be dismissed.
SUBMISSIONS:
32. The learned Senior Counsel Sri P.Chidambaram, representing
the learned counsel Sri Sai Sanjay Suraneni, appearing for the
petitioners, would submit that the impugned rejection letter dated
05.02.2025 is ex facie contrary to the CAQM order and the DGFT
Notification. The CAQM order gives express permission for deemed
exports to SEZ Units. The DGFT Notification was issued to give effect
to the CAQM Order. The reasons given by the Regional Authority are
that supply by domestic units to SEZ units are not deemed exports
under the FTP. Under Chapter 4 of the FTP, which deals with
Advance Authorisation, Clause 4.03 states that imports of goods that
are physically incorporated into goods exported are entitled to
Advance Authorisation. Clause 4.05(c)(i) specifically includes in
relation to imports intended for manufacturing physical exports to
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SEZ units as being eligible for Advance Authorisation. Learned Senior
Counsel refers to Chapter 4 of the Foreign Trade Policy, 2023, which
is extracted for reference.
"[4] Duty Exemption/Remission Schemes
4.00 Objective
Schemes under this Chapter enable duty free
import of inputs for export production, including
replenishment of inputs or duty remission.
4.01 Schemes
(a) Duty Exemption Schemes.
The Duty Exemption schemes consist of the
following:
Advance Authorisation (AA) (which will
include Advance Authorisation for Annual
Requirement).
Duty Free Import Authorisation (DFlA).
....
4.03 Advance Authorisation
(a) Advance Authorisation is issued to allow duty
free import of input, which is physically
incorporated in export product (making normal
allowance for wastage). In addition, fuel, oil,
catalyst which is consumed / utilized in the
process of production of export product, may also
be allowed.
(b) ...
4.05 Eligible Applicant/ Export/ Supply
(a) Advance Authorisation can be issued either to
a manufacturer exporter or merchant exporter
tied to Supporting manufacturer.
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(b) ...
(c) Advance Authorisation shall be issued for:
(i) Physical export (including export to SEZ)
(ii) ...."
33. Learned Senior Counsel submit that under Chapter 7 of the
FTP, which deals with "deemed exports," Clause 7.02 A (a) states that
goods that are entitled to Advance Authorization are to be treated as
deemed exports. Thus, the Petitioners' RPC imports being physically
incorporated into the CPC and physically exported to the Vedanta SEZ
unit are squarely entitled to be granted Advance Authorisation and
refers to the relevant provisions of Chapter 7 of the Foreign Trade
Policy, 2023, which are extracted hereunder:
"[7] Deemed Exports
7.00 Objective
To provide a level-playing field to domestic
manufacturers and to promote Make in India,
in certain specified cases, as may be decided by
the Government from time to time.
7.01 Deemed Exports
(i) "Deemed Exports" for the purpose of this
FTP refer to those transactions in which goods
supplied do not leave country, and payment for
such supplies is received either in Indian rupees
or in free foreign exchange. Supply of goods as
specified in Paragraph 7.02 below shall be
regarded as "Deemed Exports" provided goods are
manufactured in India.
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7.02 Categories of Supply
Supply of goods under following categories
(a) to (c) by a manufacturer and under categories
(d) to (g) by main / sub-contractors shall be
regarded as Deemed Exports':
A. Supply by manufacturer:
(a) Supply of goods against Advance
Authorisation / Advance Authorisation for annual
requirement / DFIA.
(b) Supply of goods to EOU / STP / EHTP /
BTP.
(c) Supply of capital goods against EPCG
Authorisation."
34. The learned Senior Counsel further submitted that earlier the
Regional Authority has permitted the petitioner No.1 to export CPC
manufactured by it to SEZ Units and granted Advance Authorisations
to the Petitioners on 14.05.2024, 13.08.2024 and 28.10.2024.
As such, there is no justification for a sudden change in the opinion or
policy from its earlier decision to grant Advance Authorisations to the
Petitioners by its rejection letter dated 05.02.2025. Pertinently, the
Petitioners' incoming shipments under its RPC import allocation quota
for Financial Year 2024-25, are expected to arrive in the month of
March. In accordance with the Petitioners Restricted Licence dated
05.04.2024, along with the Amended Licence dated 24.12.2024,
the Petitioners are only authorized to import its allocated quota of RPC
on or before 31.03.2025. Therefore, the Petitioners seek urgent
intervention of this Court in order to enable them to import their
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allocated RPC quota under their Restricted Licence before 31.03.2025,
against Advance Authorisation which it is rightfully entitled to under
the FTP. Even in the event that the Petitioners import the incoming
consignments of RPC against the payment of import duties,
the Petitioners will not be able to utilize the imported RPC, as the
Petitioners would be unable to supply CPC to the Vedanta SEZ unit on
account of the Rejection Letter. The Vedanta SEZ unit is one of the
major purchasers of the CPC manufactured by the Petitioners. Thus,
if the Petitioners are unable to sell CPC to the Vedanta SEZ unit,
it would result in heavy losses to the Petitioners and result in the
shutting down of their calcining and power co-generation plants for an
extended period, as there are no other CPC consumers in India of the
same size as the Vedanta SEZ unit.
35. Learned Senior Counsel would further submit that earlier the
Petitioners filed W.P. (C) No.2557 of 2025 before the Delhi High Court
that was dismissed by order dated 07.03.2025 on the grounds of lack
of territorial jurisdiction.
36. The learned Senior Counsel further submits that the order of
CAQM dated 15.02.2024 is based on the delegation of certain issues
related to pet coke passed by the Hon'ble Supreme Court vide order
dated 10.10.2023 and the impugned order dated 05.02.2025 is clearly
a miscarriage of justice. In support of his submissions placed reliance
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in the case of S.N. Mukherjee Vs. Union of India 1.
The relevant paras 39 and 40 are extracted hereunder:
"39. The object underlying the rules of natural
justice "is to prevent miscarriage of justice" and
secure "fair play in action". As pointed out earlier
the requirement about recording of reasons for its
decision by an administrative authority exercising
quasi-judicial functions achieves this object by
excluding chances of arbitrariness and ensuring a
degree of fairness in the process of decision-
making. Keeping in view the expanding horizon of
the principles of natural justice, we are of the
opinion, that the requirement to record reason can
be regarded as one of the principles of natural
justice which govern exercise of power by
administrative authorities. The rules of natural
justice are not embodied rules. The extent of their
application depends upon the particular statutory
framework whereunder jurisdiction has been
conferred on the administrative authority.
With regard to the exercise of a particular power
by an administrative authority including exercise
of judicial or quasi-judicial functions the
legislature, while conferring the said power,
may feel that it would not be in the larger public
interest that the reasons for the order passed by
the administrative authority be recorded in the
order and be communicated to the aggrieved party
and it may dispense with such a requirement.
It may do so by making an express provision to
that effect as those contained in the
Administrative Procedure Act, 1946 of U.S.A. and
the Administrative Decisions (Judicial Review) Act,
(1990) 4 Supreme Court Cases 594
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1977 of Australia whereby the orders passed by
certain specified authorities are excluded from the
ambit of the enactment. Such an exclusion can
also arise by necessary implication from the
nature of the subject matter, the scheme and the
provisions of the enactment. The public interest
underly-ing such a provision would outweigh the
salutary purpose served by the requirement to
record the reasons. The said requirement cannot,
therefore, be insisted upon in such a case.
40. For the reasons aforesaid, it must be
concluded that except in cases where the
requirement has been dispensed with expressly or
by necessary implication, an administrative
authority exercising judicial or quasi-judicial
functions is required to record the reasons for its
decision.
37. The learned Senior Counsel submitted that the counter affidavit
has been filed by the respondent No.1 on authorisation on behalf of
the respondents No.2 and 3. Since the counter affidavit has been filed
comprehensively on behalf of all the respondents, there is no scope to
file review. Further, in terms of the Section 16 of the FT (D&R)
Amendment Act, 1992, no notice or show-cause notice was issued
from the date of rejection decision. Hence, the petitioner has rightly
invoked to challenge the rejection order under Article 226 of the
Constitution of India by way of filing the present writ petition. It is
further submitted that the power under Article 226 of the Constitution
to issue writs can be exercised not only for the enforcement of
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fundamental rights, but for any other purpose as well. In this regard,
the learned Senior Counsel placed reliance in the case of Radha
Krishan Industries Vs. State of Himachal Pradesh and others 2.
Relevant Para No.27 is extracted hereunder:
"27. The principles of law which emerge are
that:
27.1. The power under Article 226 of the
Constitution to issue writs can be exercised not
only for the enforcement of fundamental rights,
but for any other purpose as well.
27.2. The High Court has the discretion not to
entertain a writ petition. One of the restrictions
placed on the power of the High Court is where an
effective alternate remedy is available to the
aggrieved person.
27.3. Exceptions to the rule of alternate
remedy arise where : (a) the writ petition has been
filed for the enforcement of a fundamental right
protected by Part III of the Constitution; (b) there
has been a violation of the principles of natural
justice; (c) the order or proceedings are wholly
without jurisdiction; or (d) the vires of a legislation
is challenged.
27.4. An alternate remedy by itself does not
divest the High Court of its powers under Article
226 of the Constitution in an appropriate case
though ordinarily, a writ petition should not be
entertained when an efficacious alternate remedy
is provided by law.
(2021) 6 Supreme Court Cases 771
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27.5. When a right is created by a statute,
which itself prescribes the remedy or procedure
for enforcing the right or liability, resort must be
had to that particular statutory remedy before
invoking the discretionary remedy under Article
226 of the Constitution. This rule of exhaustion of
statutory remedies is a rule of policy, convenience
and discretion.
27.6. In cases where there are disputed
questions of fact, the High Court may decide to
decline jurisdiction in a writ petition. However,
if the High Court is objectively of the view that the
nature of the controversy requires the exercise of
its writ jurisdiction, such a view would not readily
be interfered with."
38. The learned Senior Counsel would further submit that Chapter
4 deals with Duty Exemption / Remission Schemes wherein Clause
4.03 deals with Advance Authorisation. Clause 4.03 (a) reads that "(a)
Advance Authorisation is issued to fallow duty free import of input,
which is physically incorporated in export product (making normal
allowance for wastage). In addition, fuel, oil, catalyst which is
consumed / utilized in the process of production of export product, may
also be allowed."
39. Clause 4.05 deals with Eligible Applicant / Export / Supply:
Clause 4.05 (c) reads that "Advance Authorisation shall be issued for:
(i) Physical export (including export to SEZ)."
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40. The learned Senior Counsel has drawn the attention of this
Court to Chapter 7, which deals with Deemed Exports. Clause 7.01 (i)
and (ii) reads that "(i) 'Deemed Exports' for the purpose of this FTP refer
to those transactions in which goods supplied do not leave country, and
payment for such supply is received either in Indian rupees or in free
foreign exchange. Supply of goods as specified in Paragraph 7.02
below shall be regarded as "Deemed Exports" provided goods are
manufactured in India. (ii) 'Deemed Exports' for the purpose of GST
would include only the supplies notified under Section 147 of the
CGST/SGST Act, on the recommendations of the GST Council.
The benefits of GST and conditions applicable for such benefits would
be as specified by the GST Council and as per relevant rules and
notification.
41. Clause 7.02 deals with Categories of Supply, which reads that
"Supply of goods under following categories (a) to (c) by a manufacturer
and under categories (d) to (g) by main / sub-contractors shall be
regarded as 'Deemed Exports": A. Supply by manufacturer: (a)
Supply of goods against Advance Authorisation / Advance
Authorisation for annual requirement / DFIA. (b) Supply of goods to
EOU / STP / EHTP / BTP. (c) Supply of capital goods against EPCG
Authorisation."
SUBMISSIONS OF LEARNED ASSISTANT SOLICITOR GENERAL OF INDIA
42. The learned Assistant Solicitor General of India Sri B.Narasimha
Sharma appearing for the respondents submitted that the
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respondents have fully complied with the provisions of the law and
followed principles of natural justice and rejection letter is in
accordance with law. He has drawn the attention of this Court to the
Para No.15 of the Counter wherein it is categorically stated that "With
regard to Paras 20-21 it is contented that 'AUTHORIZATION IS NOT A
RIGHT'. That, Para 2.13 of Foreign Trade Policy, 2023 clearly provides
the following: "No person can claim an Authorisation as a right
and DGFT or RA shall have power to refuse to grant or renew the
same in accordance with provisions of FT (D&R) Act, Rules made
there under and FTP". Furthermore, the earlier authorizations
granted to the petitioners are in the process of being reviewed with the
appropriate authority." It is further submitted that the petitioners'
claim as SEZ, which is to be treated as deemed exports is contrary to
Clause 7.02 of Chapter 7 of Foreign Trade Policy as referred by the
learned Senior Counsel for the petitioners. In support of his
contention, had placed reliance in the case of Sandoz Private
Limited Vs. Union of India and others 3. The relevant Paras No.38 to
41 are extracted hereunder:
"38. That brings us to Chapter 8 of FTP.
The heading of Chapter 8 is "Deemed Exports".
The original Para 8.1 specified that deemed
exports refer to those transactions in which goods
supplied do not leave country and payment for
such supplies is received either in Indian rupees
or in free foreign exchange. By way of amendment,
it further provided that the supply of specified
(2022) 16 Supreme Court Cases 176
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goods (noted in Para 8.2) shall be regarded as
deemed exports provided goods are manufactured
in India.
39. The original Para 8.1 reads thus:
"8.1. Deemed exports.--"Deemed exports"
refer to those transactions in which goods
supplied do not leave country, and payment for
such supplies is received either in Indian rupees
or in free foreign exchange."
40. Para 8.1, after amendment, in 2012-2013
reads thus:
"8.1. Deemed exports.--"Deemed Exports"
refer to those transactions in which goods
supplied do not leave country, and payment for
such supplies is received either in Indian rupees
or in free foreign exchange. Supply of goods as
mentioned in Para 8.2 below shall be regarded as
"Deemed Exports" provided goods are
manufactured in India."
(amendment emphasised)
41. Para 8.2 of Chapter 8 specifies the
categories of supplies which can be regarded as
deemed exports. Clause (b) thereof is applicable to
the present appeals. Relevant extract of original
Para 8.2 is as under:
"8.2. Categories of supply.--Following
categories of supply of goods by main/sub-
contractors shall be regarded as "Deemed Exports"
under FTP, provided goods are manufactured in
India:
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(a) ***
(b) Supply of goods to EOU/STP/EHTP/BTP;"
Para 8.2, after amendment, in 2012-2013 reads
thus:
"8.2. Categories of supply.--Following
categories of supply of goods by main/sub-
contractors shall be regarded as "Deemed
Exports":
(a)-(c) ***
(d) Supply of goods to EOU/STP/EHTP/BTP;"
In other words, only the specified categories of
supplies are regarded as deemed exports. In that,
import of goods, as specified in Para 8.2(b) from
DTA supplier to the EOU is regarded as deemed
exports."
43. The learned Additional Solicitor General submits that the
respondents have followed the due process of law while passing
rejection order dated 05.02.2025 and eventually prayed to dismiss the
writ petition.
ADDITIONAL AFFIDAVIT OF PETITIONER:
44. The petitioners have filed an additional affidavit on 07.04.2025
and submitted that as per Minutes of Meeting dated 27.03.2024 and
by email dated 28.11.2024, petitioner No.1 was allotted in two
tranches a total of 7,05,600 MT of RPC import quota for Financial
Year 2024-25. In the said Minutes dated 27.03.2024 it is stated that
RPC import by calciners was permitted to cater "entirely to the
domestic needs of aluminium industry (including Vedanta SEZ). In
the said Meeting it is highlighted that the respondents had clearly
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understood that the CAQM order permitted RPC import for the
purpose of manufacture of CPC for supply to (i) domestic aluminium
industry and (ii) the Vedanta SEZ as well.
45. It is further submitted that during the Financial Year 2024-25,
petitioner No.1 imported its entire RPC import quota. Under Advance
Authorisation pertaining to three applications, the petitioner No.1
imported the RPC free of duty. However, the fourth application for
Advance Authorisation to import approximately 54,900 MT of RPC was
rejected and is the subject matter of the dispute in this writ petition.
Further, an Advance Authorisation gives to the importer (petitioner
No.1 herein) two rights i.e. (i) to import free of duty and (ii) to supply
to domestic aluminium industry including the Vedanta SEZ. In view
of the dispute surrounding the fourth application for Advance
Authorisation regarding 54,900 MT of RPC and in view of the fact that
the deadline for import was 31st March, 2025, and the deadline was
approaching, the petitioner No.1 was advised that irrespective of the
pendency of this writ petition, the petitioner No.1 may import 54,900
MT of RPC by paying the duties. In the said circumstances, the
petitioner paid duty of Rs.40,82,84,128/- (Rupees Forty Crore Eighty
Two Lakh Eighty Four Thousand One Hundred and Twenty Eight only)
for import of approximately 54,900 MT of RPC on 29th March, 2025.
46. It is further submitted that if the petitioner No.1 succeeds in the
present writ petition, then would be entitled to refund of duties of
Rs.40,82,84,128/- (Rupees Forty Crore Eighty Two Lakh Eighty Four
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Thousand One Hundred and Twenty Eight only) as well as supply CPC
to the Vedanta SEZ. Pending the writ petition, the petitioner prayed
for an interim order enabling the petitioner to supply the CPC to the
Vedanta SEZ. In support of the case of the petitioner, learned Senior
Counsel for the petitioners made the following submissions:
(i) The first three Advance Authorisations dated 14th May
2024, 13th Augutst, 2024 and 28th October, 2024 allowed
the petitioner No.1 to supply the CPC to Vedanta SEZ and
there is no reason why the same right is being denied to
the last application for Advance Authorisation dated 31st
December, 2024 for 54,900 MT of RPC.
(ii) The Minutes of Meeting dated 27the March, 2024 which
allotted the RPC for the Financial year 2024-25 clearly
mentions that the petitioner No.1 was permitted to supply
to the domestic aluminium industry including the
Vedanta SEZ.
(iii) The Foreign Trade Policy, 2023, Chapter IV, Paragraph
4.05(c) specifically mentions that "Advance Authorisation
shall be issued for: (i) Physical export (including exports to
SEZ)."
(iv) Chapter VII which is relied upon by the respondents
allows supply to other entities in addition to supply to
SEZ. The petitioner No.1 is relying upon supply to SEZ
which is specifically permitted against Advance
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Authorisation under Chapter IV Paragraph 4.05(c) read
with Chapter VII, Paragraph 7.02(A)(a).
47. The learned Senior Counsel refers to the Annexure P-17,
Minutes of the Meeting held on 27.03.2024 for allocation for import of
Raw Petroleum Coke for CPC manufacturing and Calcined Petroleum
Coke for Aluminium Industry for Financial Year 2024-25. In the said
meeting the following officers have attended:
1. Shri SBS Reddy, Addl.DGFT, DGFT
2. Shri Sanjay Manchanda, Advisor, CHT, M/o. P&NG
3. Shri. P. Somakumar, Under Secretary, M/o.P&NG
4. Shri Md.Moin Afaque, Deputy DGFT, DGFT
5. Representative from M/o.EF&CC was not present.
48. In the said meeting, the Committee noted that pursuant to the
recommendations of CAQM issued vide order dated 14.02.2024, DGFT
vide Notification 68/23 dated 07.03.2024 has notified that -
"Total import of 1.9 Million MTs of RPC for manufacturing CPC
and 0.5 Million MTs of CPC for Aluminium Industry respectively shall be
permissible during 2024-25, subject to the following conditions:
i. Import of RPC & CPC shall be permitted only as a
feedstock / raw material and under no circumstances
shall be used as fuel.
ii. Import of RPC and CPC shall be permitted to cater
entirely to the domestic needs of Aluminium industry
(including Vedanta SEZ), for the processes as permitted
under the relevant regulations / statues.
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iii. Import of RPC by Calciners shall be on Actual User basis
and shall not be transferred to any other unit(s) including
SEZ unit(s). Export of CpC by Calciners shall not be
permitted.
iv. Import of CPC by Aluminium Industry shall be on Actual
User basis. Export of Anode by Aluminium Industry shall
not be permitted.
v. All other conditions as mentioned in the Commission for
Air Quality Management in NCR & Adjoining Areas Order
No-F.No.160014/16/2021-MERD/PetCoke-35 dated
14.02.2024 should also be complied with.
49. The learned Senior Counsel further refers to the import
allocation for Raw Pet Coke (RPC) wherein the petitioner No.1 was
allocated to import 4,84,169 MT., and further submits that there are
contractual obligations with the Indian Company and that the 3/4th of
the contractual obligations have been completed and by virtue of that,
the Government has already collected the import duty and now the
CPC remains in godown and that they are duty paid goods. Therefore,
the impugned rejection letter dated 05.02.2025 is against the principle
of promissory estoppel.
50. In the affidavit, copy of the public notice No.49/2023, dated
11.03.2024 was filed issued by the Ministry of Commerce and
Industry Department of Commerce Directorate General of Foreign
Trade for import of calcined petroleum coke for aluminium industry
and raw petroleum coke for CPC manufacturing industry. The said
public notice was issued regarding the procedure for allocation of
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quantities for import of calcined petroleum coke for aluminium
industry and raw petroleum coke for CPC manufacturing industry for
the Financial Year 2024-25.
51. A copy of the debit sheet, of the petitioner's company with
respect to the import restrict licence No.0111014688 dated
05.04.2024; statements/table of petitioner's RPC imports with duty
for the Financial year 2024-25; a copy of the bill entries receipts;
copy of the minutes of meeting for allocation of RPC import quota for
CPC manufacturing and calcined petroleum coke for aluminium
industry for the Financial year 2024025 are filed.
52. Eventually, the petitioners prayed to allow the petitioner No.1 to
finally supply to the Vedanta SEZ pending the writ petition.
It is further submitted that on the contrary, that prejudice will be
caused to the petitioner No.1 if the CPC is allowed to lie in the
warehouse without being supplied to the Vedanta SEZ (which is in
need of the CPC in its aluminium industry_ thereby resulting in heavy
losses to the petitioner No.1.
53. Per contra, the learned Additional Solicitor General refers to the
copy of the authorisation dated 05.04.2024 issued to the petitioner for
import restriction items in the name of petitioner No.1 Company for a
quantity of 484169.0 MT. Further, draws the attention of this Court
to the Licence amendment sheet dated 24.12.2024 wherefrom
conditions are extracted for reference:
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"(1) Import of RPC shall be permitted only as
a feedstock / raw material and under no
circumstances shall be used as fuel.
(2) Import of RPC shall be permitted to cater
entirely to the domestic needs of aluminium
industry, for the processes as permitted under the
relevant regulations / statutes.
(3) Import of RPC by Calciners shall be on
Actual User basis and shall not be transferred to
any other unit(s) including SEZ unit(s). Export of
CPC by Calciners shall not be permitted.
(4) All other conditions as mentioned in the
Commission for Air Quality Management in NCR &
Adjoining Areas Order No.-F.No.160014/16/2021-
MERD/PetCoke-35 dated 15.02.2024 should also
be complied with.
(5) The authorisation is issued with the
validity upto 31.03.2025. Imports must be
completed on or before 31.03.2025 i.e.
consignments must be cleared by Custom
Authorities on or before 31.03.2025."
54. The learned Additional Solicitor General refers to the license
amendment dated 24.12.2024 issued to the petitioners Company for
705600.000 MT, which would validate the authorisation for import is
31.03.2025 with the same conditions and further submits that earlier
consignments issued are also under review.
55. Heard the learned counsel for the parties and perused the
material made available on the record.
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ANALYSIS AND CONCLUSIONS:
56. The Hon'ble Supreme Court in order dated 09.10.2018 in the
case of M.C. Mehta Vs. Union of India and others (Writ Petition
(Civil) No.13029 of 1985) while hearing interlocutory applications,
wherein the Union of India through the Ministry of Environment,
Forests and Climate Change filed and affidavit on 08th October, 2018
regarding use of calcined pet coke (CPC) in Aluminium Industry,
held that the calcined pet coke (CPC) (domestic as well as imported)
can be used as raw-material for anode making in the Aluminium
Industry with the revised BIS specifications.
57. In the said order, the Hon'ble Supreme Court, based on the
report given by the Central Pollution Control Board (CPCB) dated
04.10.2018 observed that as per the BIS guidelines, calciners are
permitted to use high sulphur containing raw petroleum coke for
making CPC having sulphur content less than 3.5%. While recording
the statement of the learned Amicus Curiae the view expressed by the
CPCB are also acceptable to EPCA and accordingly disposed of the
applications observing that the raw pet coke (domestic and imported)
can be used as a feedstock for producing calcined pet coke. In the
said order, the applications filed by the petitioner herein seeking
certain directions, while considering the affidavit dated 23.08.2018
stating that 11 contracts have been entered into on or before
26.07.2018 for the import of Anode grade raw pet coke. Vessels
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pertaining to these 11 contracts have already arrived some time in
August, 2018. The Hon'ble Supreme Court held as under:
"In view of the orders passed, the consignment may be cleared, subject
to the overall limit which is 1.4 MT per annum, as mentioned above"
and accordingly the application was disposed.
58. Further, in the said case, the Hon'ble Supreme Court on
10.10.2023 observed that the Commission for Air Quality
Management (CAQM) should look into the matter afresh keeping in
mind the availability of pet coke in the country and the requirement
for import of pet coke which would depend, thereafter. The Hon'ble
Supreme Court delegated the matter was delegated to the Commission
For Air Quality Management (CAQM) as their job. Further it is also
observed that "it is appropriate that the CAQM bestows consideration
even on this aspect and wherever any interim directions are required,
the Commission itself can pass those directions, uninfluenced by other
orders which may be passed by any other Court."
59. In the said case, the Hon'ble Supreme Court disposed of
I.A. No.115613 of 2021 (Application filed for clarification of order
dated 09.10.2018 on behalf of RAIN CII Carbon (Vizag) Limited)
wherein it was held that "Learned counsel for the applicant submits
that in view of the other aspects being delegated to the Commission, the
facts of the present case be also examined by the Commission itself.
This request is accepted and thus, the reliefs in this application are also
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delegated for consideration before the Commission. The application
stands disposed of."
60. For better appreciation, it is necessary to extract the order dated
15.02.2024 passed by the Commission for Air Quality Management in
National Capital Region and Adjoining Areas. The relevant paras No.3
and 4 and 10 are extracted for reference:
"3. The Hon'ble Supreme Court vide its Order
dated 10.10.2023 in WP(C) No.13029 of 1985
titled as M.C. Mehta Vs. Union of India & Ors.,
delegated certain issues related to pet coke, to the
Commission, inter alia observing that "... a holistic
view would have to be taken as to the distribution
of the Pet Coke available in the country and the Pet
Coke required to be imported and how both of them
should be distributed inter se the industries...".
4. The Commission vide its Order dated
25.10.2023 accordingly constituted a Sub-
Committee comprising members from CAQM,
Ministry of Environment, Forest and Climate
Change (MoEF&CC), Ministry of Petroleum and
Natural Gas (MoPNG), Ministry of Commerce and
Industry (MoC&I), Director General of Foreign
Trade (DGFT) and Central Pollution Control Board
(CPCB) and National Environmental Engineering
Research Institute (NEERI as co-opted Member).
The Sub-Committee deliberated the issues in
detail related to the distribution of the Pet Coke
available in the country and the Pet Coke required
to be imported and made its recommendations to
the Commission.
....
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10. The observations, deliberations and
recommendations made by the Sub-Committee
were shared with the Commission members and
the Commission approved the various
recommendations of the Sub-Committee. The
Commission, accordingly, in compliance of the
directions of the Hon'ble Supreme Court hereby
directs as under:
I. Import of RPC and CPC by Calciners /
Aluminium Industry:
i. Import of total 1.9 MMT RPC for CPC
Manufacturers and 0.5 MMT CPC for Aluminium
Industry respectively shall be permitted during
2024-25 and 1.9 MMT RPC for Calciners and 0.8
MMT CPC for Aluminium Industry respectively
from 2025-26 onwards, strictly subject to the
following directions:
a. Use of pet coke shall be permitted only as
a feedstock / raw material and under no
circumstances to be used as fuel;
b. Import of pet coke (CPC / RPC) shall be
permitted to cater entirely in the domestic needs
of aluminium industry and other industries, for
the processes as permitted under various
regulations / statutes and export of calcined pet
coke through such calcining units shall be
discouraged. However, "deemed exports' to SEZ
units would be permitted;
...."
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61. The Government of India, Ministry of Commerce & Industry
Department of Commerce Directorate General of Foreign Trade,
New Delhi, issued Notification No.68/2023 on 07.03.2024, in respect
of "Amendment in Import Policy condition for Raw Pet Coke and
Calcined Pet Coke under Chapter 27 of Schedule-I (Import Policy) of
ITC (HS) 2022" to Condition No.06(b). Revised Policy Condition reads
as under:
"Total import of 1.9 Million MTs of Raw Petroleum
Coke (RPC) for manufacturing Calcined Petroleum
Coke (CPC) and 0.5 Million MTs of CPC for
Aluminium Industry respectively shall be
permissible during 2024-25, and 1.9 Million MTs
of RPC for manufacturing CPC Manufacturing and
0.8 Million MTs of CPC for Aluminium Industry
respectively shall be permissible from 2025-26
onwards, subject to the following conditions:
i. Import of RPC & CPC shall be permitted only as a
feedstock / raw material and under no
circumstances shall be used as fuel.
ii. Import of RPC and CPC shall be permitted to cater
entirely to the domestic needs of aluminium
industry, for the processes as permitted under the
relevant regulations / statutes.
iii. Import of RPC by Calciners shall be on Actual
User basis and shall not be transferred to any
other unit(s) including SEZ Unit(s). Export of CPC
by Calciners shall not be permitted.
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iv. Import of CPC by Aluminium Industry shall be on
Actual User basis. Export of Anode by Aluminium
Industry shall not be permitted.
v. The RPC/CPC Processing capacity as on the date
of the CAQM Order i.e. 15.02.2024 shall be taken
on record for any pro-rata allocations.
vi. All other conditions as mentioned in the
Commission for Air Quality Management in NCR &
Adjoining Areas Order No-F.No.160014/16/2021-
MERD/PetCoke-35 dated 15.02.2024 should also
be complied with."
62. Subsequently, authorisation for import of restricted item of Raw
Petroleum Coke was granted to the petitioner on 05.04.2024 for
quantity of 4,84,169.0 MTs. Thereafter, the petitioner was granted
advance authorisation on 28.10.2024 to import duty free items for
quantity of 34,999.995 MTs.
63. Similarly on 14.05.2024 another advance authorisation was
granted to the petitioner to import duty free item of Raw Petroleum
Coke for quantity of 81,000.000 MTs., and another advance
authorisation dated 13.08.2024 was granted to the petitioner to
import duty free Raw Petroleum Coke for quantity of 55,500.000 MTs.,
and the petitioner has accordingly given an undertaking for advance
authorisation on 18.04.2024, 09.08.2024, 17.10.2024 and
31.12.2024.
NVSK, J
64. Thereafter, the respondents have issued a deficiency letter dated
15.01.2025 stating that "As per DGFT Notification No.68/2023
dt.07.03.2024, the revised policy condition 06.(b)(iii) import of RPC by
calciners shall be on Actual use basis and shall not be transferred to
any other unit (s) including SEZ unit(s). Export of CPC by calciners shall
not be permitted."
65. In response to the said deficiency letter dated 15.01.2025,
petitioner submitted explanation on 20.01.2025 as under:
"4.1. At the outset, we would like to
inform you that RCCVL DTA Unit ("DTA Unit")
received the allocation of Raw Petroleum Coke
("RPC") from the Director General of Foreign Trade
(DGFT) as per revised policy condition 6(b)(iii) in
Notification No.68/2023 dated 07.03.2024 issued
under the guidelines prescribed by Commission
for Air Quality Management (CAQM) order dated
15.02.2024 under the aegis of the Hon'ble
Supreme Court of India (hereinafter referred to as
"CAQM Order".
4.2. Accordingly, the DTA Unit has been
importing / procuring the RPC on 'Actual User
Basis' and not transferring any RPC to any other
unit(s) including the SEZ Unit(s).
4.3. ....
4.4. ....
4.5. The Commission for Air Quality
Management ("CAQM") in NCR and Adjoining
Areas Order on Page 8 clearly states in the policy
condition No.10.I.i.b that "... However, "deemed
exports" to SEZ Units would be permitted." As
NVSK, J
such, it can be kindly noted that the CPC export
sales to the SEZ Unit located in India is permitted
by both the CAQM and DGFT.
4.6. Accordingly, the aforesaid
application for Advance Authorisation is meant for
importing RPC, manufacturing CPC and to be
supplied to Vedanta SEZ Unit, which is a 'Deemed
Export' and categorically permitted by the said
CAQM Order.
...."
66. Thereafter, the respondents have issued the impugned rejection
letter dated 05.02.2025 without discussing the explanation given by
the petitioner on 20.01.2025 and has referred the revised policy
conditions in DGFT Notification dated 07.03.2024. However, has not
considered the Clause 6(b) that all the conditions as mentioned in the
Commission for CAQM dated 15.02.2024 should also be complied
with. While referring to the orders passed respondent No.1, Office of
the Additional Director General of Foreign Trade, Hyderabad, did not
refer to the order of the Commission for CAQM that deemed export to
SEZ units would be permitted.
67. At this juncture, it is necessary to refer to Chapter 4 of Foreign
Trade Policy, 2023, which deals with Duty Exemption/Remission
Schemes. For the facility, the relevant Clause 4.05 is extracted for
reference.
NVSK, J
"4.05 Eligible Applicant / Export/Supply
(a) Advance Authorisation can be issued either
to a manufacturer exporter or merchant exporter
tied to supporting manufacturer.
(b) ....
(c) Advance Authorisation shall be issued for:
(i) Physical export (including export to
SEZ)
(ii) Intermediate supply; and/or
(iii) Supply of goods to the categories
mentioned in paragraph 7.02 (b)
(c), (d), (e), (f) and (g) of this FTP.
(iv) ...."
68. It is pertinent to note that in the Notification No.68/2023, dated
07.03.2024 the authorisation for restricted imports, condition No.3
that "Import of RPC by Calciners shall be on Actual User basis and
shall not be transferred to any other unit(s) including SEZ unit(s).
Export of CPC by Calciners shall not be permitted" is contrary to the
orders passed by the CAQM, dated 15.02.2024 and also to Clause VI
of the Notification dated 07.03.2024 and the Minutes of the Meeting
held on 27.03.2024 for allocation for import of raw petroleum coke for
CPC manufacturing and Calcined Petroleum Coke for Aluminium
Industry for the Financial Year 2024-25 wherein at para
5 (ii) & (v) of the said meeting, which is relevant to the petitioner's case
is extracted for reference.
NVSK, J
"5. Committee noted that pursuant to the
recommendations of CAQM issued vide Order
dated 14.02.2024, DGFT vide Notification 68/23
dated 07.03.2024 has notified that -
Total import of 1.9 Million MTs of RPC for
manufacturing CPC and 0.5 Million MTs of CPC
for Aluminium Industry respectively shall be
permissible during 2024-25, subject to the
following conditions:
i. Import of RPC & CPC shall be permitted only as a
feedstock / raw material and under no
circumstances shall be used as fuel.
ii. Import of RPC and CPC shall be permitted to cater
entirely to the domestic needs of Aluminium
industry (including Vedanta SEZ), for the
processes as permitted under the relevant
regulations / statues.
iii. Import of RPC by Calciners shall be on Actual
User basis and shall not be treansferred to any
other unit(s) including SEZ unit(s). Export of CPC
by Calciners shall not be permitted.
iv. Import of CPC by Aluminium Industry shall be on
Actual User basis. Export of Anode by Aluminium
Industry shall not be permitted.
v. All other conditions as mentioned in the
Commission for Air Quality Management in NCR &
Adjoining Areas Order No- F.No.160014/16/2021-
MERD/PetCoke-35 dated 14.02.2024 should also
be complied with."
NVSK, J
69. In view of the facts that the respondents earlier permitted the
petitioner to export the CPC manufactured by it to SEZ Units and
granted advance authorisations to the petitioners on 14.05.2024,
13.08.2024 and 28.10.2024, and in view of the preceding analysis
there is no justification in issuing DGFT Notification No.68/2023
dated 07.03.2024 to the extent of revising the policy conditions i.e.
06(b)(iii) import of RPC by calciners and the said revised policy is not
in consonance to the CAQM order dated 15.02.2024 passed in
pursuance to the Hon'ble Supreme Court order in M.C. Mehta in W.P.
(Civil) No.13029 of 1985 and the Minutes of the Meeting held on
27.03.2024, which is again in consonance to interpretation of policy
under Chapter-II of General Provisions Regarding Imports and Exports
of Foreign Trade Policy, 2023.
70. For reference, Clause 2.58 Interpretation of Policy is extracted
hereunder:
"2.58 Interpretation of Policy
(a) The decision of DGFT shall be final and binding
on all matters relating to interpretation of Policy,
or provision in Handbook of Procedures,
Appendices and Aayat Niryat Forms or
classification of any item for import / export in the
ITC (HS).
(b) A Policy Interpretation Committee (PIC) may be
constituted to aid and advice DGFT. The
composition of the PIC would be as follows:
(i) DGFT : Chairman
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(ii) All Additional DGFTs in Headquarters ;
Members
(iii) All Joint DGFTs in Headquarters looking
after Policy matters : Members
(iv) Joint DGFT (PRC/PIC) : Member Secretary
(v) Any other person / representative of the
concerned Ministry / Department, to be
co-opted by the Chairman."
71. Further, it is also to be noted that the impugned rejection letter
dated 05.02.2025 has been issued without considering the
explanation dated 20.01.2025 given by the petitioner to the deficiency
letter dated 15.01.2024. As such, it is not a reasoned order.
In the case on hand, the change in the policy would cause genuine
hardship and would have adverse impact on trade of the petitioner's
company.
72. Further, since earlier the petitioner was granted three advance
authorisations and the same are under review before the respondents'
authority, this Court is of the considered opinion to pass the following
directions.
73. In the light of the orders passed by the CAQM dated
15.02.2024, pursuant to the order dated 10.10.2023 passed by the
Hon'ble Supreme Court in the case of M.C. Mehta in W.P. (Civil)
No.13029 of 1985 and the Minutes of the Meeting held on 27.03.2024
the Deficiency Letter dated 15.02.2024 is contrary to the CAQM Order
and the DGFT Notification which implements the CAQM Order.
NVSK, J
The petitioner has efficacious remedy of review under Section 16 of
the Foreign Trade (Development and Regulation Act), 1992.
74. In view of the same, the impugned rejection letter dated
05.02.2025 bearing File No.09AX04000927AM25 and the Deficiency
Letter dated 15.01.2024 bearing File No.09AX04000927AM25 are
hereby set aside and the matter is remitted to the respondents
authority for fresh consideration with respect to the petitioner's case
to the extent of granting entitlement to advance authorisation under
Foreign Trade Policy, 2023. The DGFT shall give personal hearing for
petitioners' grievance.
75. For the aforesaid reasons and since the petitioners have already
paid the duty on RPC on 29.03.2025, the respondents are directed to
permit the petitioner to supply CPC to Vedanta SEZ.
76. It is also made clear that the petitioner's eligibility for advance
authorisation is subject to the result of the review, which is already
underway for the earlier Advance Authorisation pending to be decided
by the respondents/appropriate authority.
77. Accordingly, with the above observations, this writ petition
stands disposed of. There shall be no order as to costs.
NVSK, J
As a sequel, miscellaneous applications, if any pending,
shall stand closed.
________________________________
JUSTICE N.V. SHRAVAN KUMAR
Date: 02.05.2025
Note: L.R. copy be marked.
B/o.
LSK
