Rain CII Carbon (Vizag) Ltd. v. Union of India & Ors.

6. Petro Carbon N Chemicals Pvt Ltd, plant in Haldia, West Bengal The industry cannot use domestic pet coke as that grade called anode grade - is not readily available. The structure of the pet coke in India is different therefore, import becomes essential. The industry also provided EPCA with details of the quantity required by the industry (see Annexure 1). According to this estimation, the 6 industries, with combined production capacity of 1.17 million tonnes require 1.36 million tonnes of imported petcoke to produce l million tonnes of calcined pet coke annually. The industry has also informed EPCA that it meets S02, NOx and particulate emission standards, as stipulated by CPCB. A.1.[2] EPCA Recommendation on Calciner Industry The calciner industry should be allowed to import pet coke as its industry uses it for feedstock and not for fuel. This import is required as anode grade petcoke is not available in sufficient quantities in the country." g. On 09.10.2018, the Hon’ble Supreme Court, taking cognizance of the EPCA Report, passed an Order directing that the import of RPC shall not exceed 1.[4] MMTPA in terms of the EPCA Report and the same could be used as feedstock for producing CPC. It is pertinent to mention here that the figure of 104MMTPA was arrived at taking into account the production capacity of the caliners given by the caliners themselves. The report dated 06.10.2018 became the basis of the Order dated 09.10.2018 of the Apex Court. h. Pursuant to the Order dated 09.10.2018, a notification was issued by the Directorate General of Foreign Trade (“DGFT”)bearing No. 42/2015-20 amending the Foreign Trade Policy in relation to import of RPC. The said amendment allowed the import of RPC for cement, lime kiln, calcium carbide, gasification and graphite industries for use as a feed stock or in the manufacturing process on actual user basis. The regulation and monitoring of these imports of RPC was to be done as per the guidelines of the MoEFCC dated 10.09.2018. i. After the Order of the Hon’ble Supreme Court dated 09.10.2018, Respondent No. 2 has been allocating a specific quantity of RPC out of the total import quota of 1.[4] million MT that may be imported by each of the eligible calciners on the basis of their production capacities. To allocate the quota to respective eligible calciners, the Respondent No. 2 issues a public notice every financial year inviting applications for RPC allocation. j. On 26.11.2018, Public Notice No. 50/ 2015-20 (hereafter, “First Public Notice”) was issued by the Ministry of Commerce and Industry which stipulated the manner in which the Respondent No. 2 would be allocating the quota of RPC to eligible CPC manufacturing industries, within the given ceiling limit. The same reads as under:- "(iii)All eligible entities desiring to avail quota as mentioned above, may apply for import license in ANF 2M to DGFT (Exim Facilitation Committee) Udyog Bhavan, New Delhi – 110011 with copy to concerned jurisdictional Regional Authority of DGFT along with capacity of the unit and a valid consent certificate from State Pollution Control Board (SPCB)/ Pollution Control Committee (PCC), in the name of user industrial units indicating the quantity permitted for import and its usage on a monthly and yearly basis." i. On 27.12.2018, the DGFT, in furtherance of the First Public Notice, sought to initiate the process of allocating RPC. The manner in which such allocation was made was subjected to contest by the Appellant and Respondent No. 3. Respondent No. 3 had contested that its production capacity was actually 330,000 MT and that the same was not taken into account for providing its requisite allocation. The Committee disposed of such representations on the grounds that equal opportunity of allocation of imported RPC ought to be extended to all industries that require RPC. It was further observed that: -

j. Soon thereafter, Respondent No. 3, being aggrieved by such calculation, filed an Application before the Hon’ble Supreme Court, being I.A. No. 12291 of 2019 in the PIL Proceedings, wherein Respondent No. 3 placed on record the following: - “6. Thereafter the Applicant set out to set up the project in three phases as detailed below:

(I) Phase I: In the Phase I of the proje[4], the Applicant set up a manufacturing unit at a cost of Rs. 320 crores with capacity to produce 200,000 MTPA CPC. The Applicant received Consent to Operate ("CTO") for this unit from the APPCB on 22.04.2017 vide Consent Order No.

APPCB / VSP / VSP / 305 /HO/ CFO/2017 and commenced commercial operations. The Applicant currently employs 190 people and provides indirect employment to another 300 people.

(ii) Phase II: In September 2017 the Applicant initiated Phase II expansion i.e., to expand capacity from 200,000 MTPA to 330,000 MTPA. Phase Ii expansion was completed in October 2018. The Applicant received Consent to Operate ("CTO") this unit from the APPCB on 29.11.2018 vide Consent Order No. APPCB/VSP/VSP/305/HO/CFO/2018. The Applicant has incurred capital expenditure of Rs. 120 crores towards Phase II.

(iii) Phase III: The Applicant has already completed substantive portion of the civil works for Phase III expansion, i.e. expansion of capacity from 330,000MTPA to the total approved capacity of 4601000MTPA, and expects to commission Phase III by October 1 November 2019. Pertinently, investment in installation of utilities and infrastructure in PhaseI and Phase II have already been scaled to enable Phase III expansion. The Applicant expects to incur total capex of Rs. 120 crores on Phase III, Phase III will create additional employment of 50people and indirect employment of over 100people. xxx

11. The brief facts leading to the filing of the present Application is set out below: (xxii)Vide Public Notice No. 50/2015-2020 dated26.11.2018 thereafter, the DGFT set out the procedure for allocation of quota for import of (i)CPC (0.[5] Million MT per annum) for the Aluminium Industry and (ii) RPC (1.[4] Million MT per annum)for the CPC manufacturing industry. The Public notice inter alia provided that imports would be subject to guidelines laid down by the MOEF& CC issued vide O.M No. Q-18011/54/2018-CPA dated10.09.2018 and that the annual quantity limitation on import would be operated on fiscal year basis. Accordingly, of the total quantity permitted for import per annum by this Hon'ble Court, only half would be available for import during the remaining period of the financial year (October to March). By the Public Notice the DGFT further directed that applications for allotment of quota were required to be submitted to the DGFT by 7.12.2018 and reiterated that inter-alia, the production capacity of the applicant as certified by the SPCB/PCC was to be furnished. A copy of the Public Notice No. 50/2015-2020 dated 26.11.2018 issued by the DGFT is annexed hereto as Annexure A-19 (Pages 248-250) (iv)The Applicant received CTO for its Phase II expansion on 29.11.2018 and thus had SPCB certification for total production capacity of 330,000 MTPA of CPC before the deadline for applications.

(v) The Applicant duly applied for allocation of import quota of RPC vide its application to DGFT dated[6].12.2018 and requested for allocation of 183,746MT of RPC for 2H2018-19 based on its current certified production capacity of 330,000 MTPA and permitted import and usage.

(vi) Against such application, the Application was granted a meagre allotment of 99548 MT of RPC for the period ending on 31.03.2019. From a perusal of the Minutes of Meeting held on 12.12.18 at the DGFT, it appeared that inter-alia, the following were considered at the time of allotment of RPC from the import limit fixed by this Hon'ble Court for calciners: (a) Nine applications for import of RPC were received by 07.12.2018; (b) The available quantity would be divided proportionately in relation to the production capacity of the applicants;

(c) While the production capacity of applicants who had filed applications before this Hon'ble Court was taken from the record placed before this Hon'ble Court, for the other three applicants, their Pollution Certificates were considered; and

(d) The principle of proportionality was applied with respect to all 9 applicants having considered their total half yearly capacity and total available quantity. Copy of the minutes of meeting dated 12.12.2018of DGFT is annexed hereto as Annexure A-20 (Pages 251-254)

(vii) As such allotment to the Applicant was significantly lower than the Applicant's demonstrated historical import level, did not consider its APPCB approved current production capacity and forced the Applicant to run at 44% of its installed capacity, on19.12.2018, the Applicant filed a representation before the DGFT requesting it to review its allocation methodology. Copy of the said representation dated 19.12.2018 to DGFT is279annexed hereto as Annexure- A-21 (Pages 255-259)

(viii) Thereafter during its meeting on 27.12.2018 the

DGFT considered the representation filed by the Applicant along with representations made by other calciners and further reduced the allocation to the Applicant to 99,154.07 MT arbitrarily taking into account production capacities as on 01.10.2018even though consideration of such date as the cutoff date was neither directed by this Hon'ble Court, nor by the MoEF guidelines dated 10.09.2018 not by the DGFT itself under any of its previous advisories. Copy of the minutes of the meeting of the DGFT on 27.12.2018 is annexed hereto as Annexure- A-22 (Pages 260-263).

(ix) By a representation dated 11.01.2019 to EPCA, the Applicant also requested EPCA to consider necessary steps to ensure that a fully compliant unit operating the best in class environment safeguards and servicing the economy by reducing the aluminium industry's dependence on import of CPC was not forced to shut it operations. Copy of the said representation dated 11.01.2019 to EPCA280is annexed hereto as Annexure A-23 (Pages 264-304).

(x) Being left with no option, the Applicant has received such allocation under protest and recorded its objections to DGFT by its Objections dated 17.01.2019. The Applicant has also sought clarification as to whether its current Cl2rtiflcdcapacity of 330,000 MTPA would be considered for the next quarter starting from 1.4.2019. The Applicant has not received any response to its letter dated 17.01.2019 till date. Copy of the Applicants Objections dated 17.01.2019 is annexed hereto as Annexure A-24 (Pages 305-307).

12. It is submitted that the following facts in particular, emerging from the above background may kindly be noted:

(i) This Hon'ble Court was pleased to permit the use and import of RPC by CPC manufacturing units after noting the views expressed by the CPCB as regards inter-alia, need for treatment of S02emission by calciners in FGD system, and observing that the same had also been considered and accepted by both, the MoEF & CC as well as the EPCA. That the permission to import RPC was given pursuant to CPCB's views is clear from the following extract of order dated 9.10.2018 passed by this Hon'ble Court: "The views expressed by the CPCB have been considered by the Ministry of Environment, Forest and Climate Change which is in agreement with the CPCB. It is stated by /earned amicus curiae that the views expressed by the CPCB are also acceptable to EPCA. Consequently, raw pet coke (domestic and imported) can be used as a feedstock for producing calcined pet coke."

(ii) Under Office Memorandum dated

10.09.2018issued by the MoEF & CC applicants would be entitled to import of RPC on the basis of certification by SPCB/PCC as regards the quantity permitted for import and its use on a per month and per annum basis. No criteria was set out for disregarding certified requirement if the applicant met all other eligibility conditions.

(iii) The annual requirement of 1.[4] million of 1'1T of

RPC for the calcining industry was projected by EPCA in its Report No. 91 basis the current RPC import requirement of 6 calciners only who were entirely dependent on imports.

(iv) EPCA noted in its Report No. 91 that current expansions could require an additional 0.[7] million MT RPC imports per annum thereby envisaging are vision of the projected import requirement.

(v) Remaining 22 calciners out of a total of 28 calciners operate on domestic RPC and they were not considered in the projected requirement of L4million MT of imported RPC.

(vi) No quantitative restriction on import of RPC has been fixed by this Hon'ble Court for the cement, lime and calcium carbide based industries. xxx

15. As stated above, the Applicant had obtained Environmental Clearance way back in 2012 for setting up a CPC manufacturing capacity of 460,000 MT. While Phase I was complete in 2017, Phase II expansion was nearly complete when EPCA presented its Report No. 91and Phase III had been planned to follow soon thereafter. Phase I and Phase II I Accordingly, Respondent No. 3 sought the following reliefs: - "(a) Direct the Directorate General of Foreign Trade to consider the Applicant's full production capacity for the purpose of allocation of Raw Petroleum Coke import quota as certified by certificates granted by the Andhra Pradesh pollution control board; (b) Direct the Directorate General of Foreign Trade to allocate in favour of the Applicant 222,750 MT of Raw Petroleum Coke for the period April 2019 to September 2019, 310,500 MT of Raw Petroleum Coke for the period October 2019 to March 2020 and thereafter 621,000 MT of Raw Petroleum Coke annually on a continuous basis out of the total 1.4Million MT of Raw Petroleum Coke per annum as permitted to be imported by this Hon'ble Court vide order dated 09.10.2018 passed in Writ Petition No.13029 of 195, titled M.C. Mehta vs Union of India &Ors;

(c) Clarify that those calciners who have not so far placed their requirement of imported Raw Petroleum Coke either before the EPCA or before this Hon'ble Court are not eligible for allocation of Raw Petroleum Coke from the restricted Raw Petroleum Coke import quota allowed to Calcined Pet Coke manufacturing units and issue appropriate directions to the Directorate General of Foreign Trade;

(d) Enhance the annual import limit on Raw

Petroleum Coke for Calcined Pet Coke manufacturing units beyond 1.[4] million MT if deemed necessary taking into account allocation to the Applicant as per prayer(a) and (b) above; (e) Consider removing quantitative restriction on the import of Raw Petroleum Coke by the Calcined Pet Coke manufacturing units." k. On 28.01.2019, the Hon’ble Supreme Court dismissed I.A. NO. 12291 of 2019 in the PIL Proceedings, stating that the Order dated 09.10.2018 passed by it is clear, and that the outer limit for import of RPC cannot exceed 1.[4] MT per annum in total. The relevant portion of the Order is reproduced hereunder: - "Heard learned counsel for the parties. I.A. Nos.168838 and 164302 of 2018 (Applications for impleadment) are rejected. The order dated 09.10.2018 passed by this Court is clear. This Court has set the outer limit for import of raw pet coke cannot exceed 1.[4] MT per annum in total. In view of the aforesaid, prayers made on the basis of expansion etc. are totally misconceived and cannot be entertained. No further orders are required to be passed on these I.As. i.e. I.A. Nos.168847/2018, 1451/2019 & 1847/2019 [filed on behalf of Rain CII Carbon (Vizag) Ltd.], I.A. No.164303 (filed on behalf of Saket Agarwal), I.A. No.12291/2019 (filed on behalf of Sanvira Industries Ltd.) and I.A. No.13210/2019 (filed on behalf of Goa Carbon Ltd.). The same are hereby dismissed." l. On 22.03.2019, the Respondents issued a Public Notice (hereafter, “Second Public Notice”) stipulating the criteria for allocation of RPC for the period of 2019-20inter alia stating that the calciners were required to submit a valid CTO, indicating the production capacity of the unit and the quantity permitted for import along with the application for apportionment of RPC out of the Total Import Quota. Relevant portion of the said Notice reads as under: "(iii) All eligible entities desiring to avail quota as mentioned above, may apply for import license in ANF 2M to DGFT along with capacity of the unit and a valid consent certificate from State Pollution Control Board (SPCB) Pollution Control Committee (PCC), in the name of user industrial units indicating the quantity permitted for import and its usage on a monthly and yearly basis. " On 22.04.2019, the DGFT proceeded to make the inter se allocation of the RPC quota. In respect of the submission made by Respondent No. 3 for additional allocation on account of requirement of 3,30,000 MT, the committee observed as follows in its MoM: -

that the request for additional requirement of Raw Pet Coke by these two applicants had been set aside by the Hon'ble Supreme Court, vide Order of the Supreme Courtdated09.10.2018. The Hon'ble Supreme Court in its order dated 28.1.2019whiledisposing off the I.A. NO. 168847/2018, 1451/2019& 1847/2019 (filed on behalf of Rain carbon); I.A.No.12291 /2019(filed on behalf of Sanvira Ind. Ltd.) andI.A.No.164303 (filed on behalf of Saket Agarval) and I.A.No.13210/2019 (filed on behalf of Goa Carbon Ltd) had pronounced that "the order passed by this Court is clear. This Court has set the outer limit for import of raw pet coke cannot exceed 1.[4] MT per annum in total. In view of the aforesaid, prayers made on the basis of expansion etc. are totally misconceived and cannot be entertained. No further orders are required to be passed on these I.A.s. The same are hereby dismissed."The Committee accordingly decided to reject the request for additional quantity of RPC for the additional capacity added by applicants after the Hon'ble Supreme Court's order dated 9.10.2018. xxxx

7. In case of M/s Sanvira industries Ltd. also, the Committee noted that the additional capacity of 1,30,000 MT was created after the Hon'ble Supreme Court's Order dated 9.10.2018 as per the official record. Hence, the request for additional quantity for the new capacity was rejected by the Committee." (emphasis supplied) m. In April, 2019 itself, Respondent No. 3impugned the MoM dated 22.04.2019 before this Court by way of WP(C)4485/2019 wherein an adjournment had been sought in the ground that a clarification was required from the Hon’ble Supreme Court in the matter. The relevant portion of I.A. No.73242/2019 reads as under:- “(xiii) It is most humbly submitted that the issue that a total production capacity of 330,000 MTPA of CPC had been installed by the Applicant prior to order dated 9.10.2018 passed by this Hon’ble Court was not pleaded before this Hon’ble Court in the Applicant’s IA No.12291 of 2019 as such contention had earlier never been raised by the DGFT.

(xiv) Against such arbitrary allocation of RPC import quota by the DGFT, the Applicant was thus constrained to approach the Hon’ble High Court of Delhi vide Writ Petition No.4485 of 2019, praying for a limited direction to DGFT that Applicant’s full production capacity (i.e. the capacity of the Applicant’s plant as completed before 9.10.2018 which received the Consent to Operate on 29.11.2018) be considered while making allocation of import of quota. Copy of writ petition No.4485 of 2019 (without its annexures) is annexed hereto as Annexure A-15 (Pages 132-165)

(xv) It is pertinent to mention that as by earlier decision dated 08.02.2019, the DGFT had arbitrarily imposed a ceiling on the total quota that could be apportioned to any Calciner during the period of October 2018 – March 2019, thereby leaving a substantial portion of the Unutilized Quota unallocated, one of the calciners had approached the Hon’ble Court challenging such decision by way of writ petition bearing number W.P.(C) No.1784 OF

2019. That the Hon’ble High Court was pleaded to set aside the said decision vide order dated 15.03.2019. Copy of order dated 15.03.2019 in writ petition No.1784 of 2019 is annexed hereto and marked as Annexure A-16 (Page 166-174). (a) Pass appropriate directions permitting the Applicant to challenge Minutes of Meeting dated 22.03.2019 issued by the DGFT to finalise allocation of RPC for CPC manufacturing on grounds open to it under law in Writ Petition.” (emphasis supplied) n. On 08.07.2019, the Hon’ble Supreme Court dismissed I.A. No.73242/2019, observing that no clarification was required in respect of the Orders passed earlier. o. On 06.12.2019, W.P(C) No. 4485/2019 was disposed of by this Court directing the Respondents to consider the petition as a representation. While doing so, the Ld. Single Judge agreed with the contentions of Respondent No. 3 stating that the Order dated 09.10.2018 passed by the Hon’ble Supreme Court set an outer limit on import of RPC and did not decide on production capacity and corresponding allocation for ant industry. The Order reads as follows: -

p. In February 2020, the Respondents rejected the representation made pursuant to the Order of this Court in W.P.(C) NO. 4485/2019. While doing so, the Respondents inter alia observed that by virtue of the Order of the Supreme Court dated 28.01.2019 neither the limit of 1.[4] million MT can be enhanced nor the expansion of the capacity by the calciners can be entertained and allocation could only be done to the extent of capacity taken as on 09.10.2018. The Order rejecting the representation states as follows: -

the basis of expansion etc. are totally misconceived and cannot be entertained. No further orders are required to be passed on these I.As. The same are hereby dismissed. M/s Rain CII (Vizag) Ltd. had prayed before the Hon'ble Supreme Court to enhance the limit of 1.[4] Million MT by a specific quantity of 4,88,000 MT which it has expanded through its SEZ unit. Therefore, the orders of the Hon'ble Supreme Court is clear neither the limit of 1.[4] Million MT can be enhanced nor the expansion of the capacity by the calciners can be entertained. The Committee, therefore, did not approve M/s Sanvira Industries representation who was seeking allocation for its additional capacity of 1,30,000 MT.

7. The Committee while considering the submission of M/s Sanvira Industries Ltd. was of the view that the capacity of each applicant was decided on the basis of Consent to Operate certificate available with the firm on the date of passing of Order dated 9.10.2018 by the Hon'ble Supreme Court in WP NO. 13029 of 1985. The firm was not having Consent to Operate on 09.10.2018 for their plant and accordingly it was not considered by the Committee which decided the allocation of pet coke amongst all eligible applicants.

8. M/s Sanvira Industries Ltd. after filing the W.P. (C) 4485/2019 & CM No. 31904/2019before the Delhi High Court, filed 1A No.73242/2019, before the Hon’ble Supreme Court inter-alia praying to challenge the Minutes of Meeting dated 22.4.2019 regarding allocation of RPC. The said application was disposed of by the Hon'ble Supreme Court observing· "Our order is clear. No further clarification is required. This application is disposed of." In view of the above directions of the Hon'ble Supreme Court, where the Minutes of the Meeting dated 22.4.2019 has been challenged by the calciners earlier, the Hon'ble Supreme Court has reiterated that no further clarification is required. Therefore, the EFC decided that the request of petitioner for allocation of RPC for its additional capacity cannot be acceded to.

9. The Committee while considering the submission of the M/s Sanvira Industries Ltd. was of the view that i. The capacity of each applicant was decided on the basis of consent to operate available with the firm on 9.10.2018 i.e. the date on which the Hon'ble Supreme Court passed the order. The firm was not having consent to operate on 9.10.2018. Any other criteria for deciding the capacity will be a highly contentious issue and will be fraught with endless interpretations. ii. That the firm had challenged the Minutes of Meeting dated 22.4.2019 regarding allocation of RPC in Hon'ble Supreme Court and the application was disposed of by the Hon'ble Supreme Court observing ―Our order is Clear. No further clarification is required. This application is disposed of.” (emphasis supplied) q. Respondent No. 3 impugned the aforesaid decision before this Court by way of W.P.(C) No. 1858/2020, wherein an application for directions was also filed by Respondent No. 3 seeking the following reliefs: - “a. allow the instant application and direct DGFT to allocate RPC import quota to the Applicant as per the CTO dated 29.11.2018 or on the basis of any other document which can otherwise be considered as evidence of capacity creation; or b. allow the instant application and direct DGFT to set aside quota proportionate to the Applicants capacity of 130,000 MT (sic 330,000 MT) established prior to09.10.2018, which is not considered by the DGFT and make allocation of such quota subject to outcome of the writ petition.” r. In the interregnum, on 17.04.2020, Respondents issued a Public Notice (hereafter, “Third Public Notice”) for allocation of RPC for 2020-21, Clause 2(iii) of which stated that all eligible allocatees desirous of availing RPC import, were required to do so by submitting documents in the following terms: - " xxx Conditions and modalities of application for import of Pet coke. xxx iii. All eligible entities desiring to avail quota as mentioned above, may apply for import license as per procedure mentioned in Trade Notice No. 49 dated 15th March, 2019 along with State Pollution Control Board Certificate (SPCB)/Pollution Control Committee (PCC) indicating capacity of the unit as on 9.10.2018 (Hon'ble Supreme Court Order in Writ Petition No. 13029/1985) and also valid consent certificate from SPCB/ PCC, in the name of user industrial units indicating the quantity permitted for import and its usage on a monthly and yearly basis." (emphasis supplied) s. This Court, vide its Order dated 02.05.2020, rejected the application seeking directions filed by Respondent No. 3 in W.P.(C) 1858/2020, observing as follows: -

s. Parallelly, pursuant to the Third Public Notice, Respondent No.3 filed a pollution certificate dated 04.05.2020 which is reproduced hereunder: - t. On 03.06.2020, in the meeting held pursuant to the Third Public Notice, allocation was made to Respondent No. 3 to the extent of 3,30,000 MT factoring its additional capacity. The deliberations from the MoM dated 03.06.2020 are reproduced hereunder: -

Pradesh Pollution Control Board had been obtained vide their Consent Letter dated 6.3.2020. The Committee noted that since the CTO does not specify the installed capacity as on 9th October 2018, the Committee accordingly decided to not consider the request for allocation of quota. xxx

6. The Committee examined the SPCB certificates of all the applicants for RPC imports. On examination, Committee observed that the SPCBs have adopted varying conversion rates for calculating the requirement of RPC for producing CPC. In their CTO certificates, the Committee also noted that consumption requirement is not indicated in SPCB certificates of all the firms. To bring uniformity, the Committee decided to allocate RPC by adopting following criteria: i. The production capacity of the applicant is to be calculated on annual basis. Wherever, SPCB certificates shows production figures in TPD, the annual production capacity is to be arrived at by multiplying the capacity with 350 days (average operational days for the unit) to bring uniformity. ii. The production capacity for each applicant to be converted to input/raw material requirement by taking industry average conversion rate i.e. 1:1.36 (as mentioned in the EPCA report). iii. The additional capacity added by the applicants after the Hon’ble Supreme Court’s order dated 9.10.2018 is not taken into consideration; iv. The quota be divided on a proportionate basis as per the following formula:– Quota allocated = Total Quota available for allotment multiplied by the demand of applicant divided by the Total demand for all applicants v. In cases where requested quantity is lower than eligible quantity, the surplus on their heads are redistributed among others proportionately." u. The Appellant challenged the said allocation by way of W.P.(C) No. 3709 of 2020 before the Ld. Single Judge. On 15.01.2021, the ld. Single Judge passed the Impugned Order dismissing the petition, and upholding the allocation primarily on the grounds that the Supreme Court’s Order of 09.10.2018 merely set an outer limit of 1.[4] MMTPA and did not direct on the inter-se distribution of the imported RPC among the various calciners and accordingly, the policy brought about by the Third Public Notice altered the arrangement of inter-se distribution. Relevant excerpts of the judgment are reproduced hereunder.

3. Mr. P. Chidambaram, ld. Senior Counsel, contends that the Impugned Order and the MoM dated 03.06.2020 are blatantly erroneous for disregarding and ignoring the framework and court orders passed pursuant to such framework. He has taken us through the Orders dated 09.10.2018, 28.01.2019 and 08.07.2019 of the Hon’ble Supreme and it is his submission that by virtue of these Orders, Respondent No. 3 cannot be allocated an import quota in excess of 2,00,000 MT. It is further canvassed that in terms of these Orders, the expanded capacity of Respondent No. 3 is not eligible for allocation out of the fixed limit of 1.[4] MMT. He submits that the Hon’ble Supreme Court considered the capacity that was prevailing as on 09.10.2018, certified by the SPCBs in the CTO which was pegged at 2,00,000 MT for Respondent No. 3. He has brought attention of this Court to the Letter dated 12.09.2018 sent by Respondent No.3. In the said letter, Respondent No.3 has itself stated that their capacity is 2,00,000 MT. He states that as per the table submitted by Respondent No.3 itself, which has been the basis of the EPCA Report dated 06.10.2018, the capacity of the Appellant, Rain CII Carbon (Vizag) Ltd., is 5,00,000 MT and the capacity of Respondent No.3 is 2,00,000 MT. He states that the figure of 1.[4] Million MT has been on the basis of the capacity of the various units as accepted by Respondent No.3 themselves by letter dated 12.09.2018.

4. Mr. Chidambaram buttresses this submission by pointing out the fact that DGFT previously rejected Respondent No.3’s representations for requirement of additional 1,30,000 MT on the basis that its CTO valid as on 09.10.2018 was for 2,00,000 MT only. The additional capacity as certified by the SPCB was granted only on 29.11.2018, which is beyond the cut-off date of 09.10.2018.

5. Mr. Chidambaram assails the Impugned Judgment by pointing out that the Ld. Single Judge has erroneously held that the Hon’ble Supreme Court considered only one prayer while dismissing I.A. No. 12291/2019, whereas the application was dismissed vis-à-vis all prayers made by Respondent No. 3. He maintains that the criteria and convention of allocation of RPC as determined by the MoM dated 03.06.2020 is purportedly the same as that which had been used consistently for previous years as well. It is his submission that the Ld. Single Judge erred in holding that the past practice of allocation and consideration of production capacity stands altered by the Third Public Notice. Merely on account of the requirement of another document, being the production capacity certificate from the SPCB, as required by the Third Public Notice, allocation cannot be increased since the CTO exists only to the extent of 2,00,000 MTPA.

6. He has further submitted that the Ld. Single Judge has erred in inferring that the Orders of the Hon’ble Supreme Court in the PIL Proceedings do not constitute a bar on DGFT to allocate additional to RPC to Respondent No. 3 since it does not restrict DGFT from allocating RPC to any new entrants in the calciner industry. Such an interpretation is untenable in his opinion as it alters the basis of the Supreme Court Order of 09.10.2018 which, the Supreme Court itself has refused to interfere with on two occasions.

7. Per contra, Mr. Amit Sibal, ld. Senior Counsel appearing on behalf of Respondent No. 3 submits, at the outset, that the capacity of Respondent NO. 3 as on 09.10.2018 was 330000 MTPA and the same has been certified by APPCBL, which is an expert body. It has been argued that in terms of the criteria forallocation laid down in the public notices of 17.04.2020 and 31.03.2021, Respondent No. 3 was required to possess, (i) the certificate of the SPCB certifying capacity of the unit as on 09.10.2018 and (ii) a valid CTO certificate of SPCB to operate such unit. Mr. Sibal submits that the said criteria have been fulfilled by Respondent No. 3 and the DGFT has examined the requisite documents before allocating the import quota to Respondent No. 3.

8. Mr. Sibal has further contended that the Order dated 09.10.2018 passed by the Hon’ble Apex Court allows calciners to import RPC subject to an outer limited of 1.[4] MTPA without any further directions on how such restricted quota was to be allocated. It is stated that I.A. No. 1847/2019 was filed before the Hon’ble Supreme Court seeking enhancement of outer limit of 1.[4] MMTPA on import of RPC on account of the additional requirement incurred by Respondent No. 3 for its SEZ Plant and by way of the Order dated 28.01.2019, the Hon’ble Supreme Court considered and dismissed only this specific prayer. It is his contention that there was no consideration by the Hon’ble Supreme Court on the issues of inter se allocation of import quota or production capacities of calciners. This, in his view, is manifest from the fact that allocation of import quota is not restricted to the 6 calciners. He has highlighted that 3 industries in the domestic category have received allocations but were not a part of the 6 names under the import list of the EPCA Report. As per him, the case of the Appellant essentially revolves around the EPCA Report being a binding instrument dictating the terms of the allocation of imported RPC. However, he has further stated that capacities of other calciners, and not just Respondent No. 3 have also been altered inter se, however, without any challenge.

9. In his view, the policy of the Respondents stands altered by virtue of the Third Public Notice and such modified policy has been applied to all calciners uniformly. It is his submission that previously, allocations, were made on the basis of the CTO certificate only and it was the conscious decision of Respondent Nos. 1 & 2 to introduce Public Notice dated 17.04.2020, whereby the burden of determining the Production Capacity of eligible entities as on 09.10.2018 was put on SPCBs and with that intent, the eligible entities were called upon to produce SPCB Certificates indicating production capacity of the respective units as on 09.10.2018. Accordingly, no interference is warranted with the same as per him.

10. Mr. Sibal has drawn the attention of this Court to the public notice dated 17.04.2020 and states that the said notice makes a distinction between certificate in the first part and the consent to operate in the second part and if both, the certificate and the consent to operate, were the same document, clearly there would not have been any necessity to make a separate mention of the certificate and the consent to operate in two parts of the same clause of the public notice.

11. Learned ASG has supported the minutes of meeting dated 03.06.2020. He states that the Apex Court was not concerned with the policy of allocation. He has adopted the arguments of Mr. Sibal in stating that the Apex Court was dealing with the issue of pollution and not with the issue of inter se allotment of raw petroleum coke amongst the various calciners. He further stated that the decision of the Committee that the production capacity which had been determined on the basis of the certificate of the State Pollution Control Board indicating the capacity of the unit as on 09.10.2018 is a valid criteria and the burden of determining the production capacity of the eligible entities as on 09.10.2018 was put on the State Pollution Control Boards and it was for that reason that the calciners were called upon to produce the State Pollution Control Board certificates indicating the production capacity of the respective units as on 09.10.2018. He submits that it was a deliberate departure from the earlier practice and the insistence of the Appellants to adhere to earlier two notices cannot be accepted.

12. Heard learned Counsel for the parties and perused the material on record.

13. The Appellants have chosen to assail the Judgment dated 15.01.2021 by which the learned Single Judge has upheld the Minutes of Meeting dated 03.06.2020 allocating raw pet coke to Respondent No.3 to the extent of[3],11,247 MT on the basis of their production capacity of 3,30,000MT and consequentially reducing the allocation of pet coke, broadly, on the grounds that the learned Single Judge has erred in arriving at a conclusion that what has been fixed by the Apex Court is the outer limit of 1.40 Million MT and has not dealt with the internal distribution of the import pet coke to the various consumers of raw pet coke and, therefore, the internal distribution could be altered by the DGFT on the basis of increase in capacity.

14. As pointed out by Mr. Chidambram, Ld. Senior Counsel for the Appellant, it is evident from the e-mail dated 12.09.2018, sent by Respondent No.3 to the EPCA that Respondent No.3 has itself stated that their capacity is 2,00,000 MT. It is also evident that the table submitted therein has been the basis of the EPCA Report dated 06.10.2018, which has been later given force by virtue of the Order of the Supreme Court dated 09.10.2018. We find force in the submission of Mr. Chidambaram. As on 12.09.2018 the production capacity of the Appellant was 2,00,000 MT. This is fortified by the CTO Order of the APPCB dated 22.04.2017.

15. A perusal of the said Order dated 22.04.2017 shows that the APPCB has granted consent to manufacture calcine petroleum coke to the Appellant to a maximum of 2,00,000 MTPA. A perusal of the said order further shows that Respondent No.3 was directed not to increase the production capacity mentioned in the order. The Appellant was thus restricted from increasing their production capacity beyond 2,00,000 MTPA as per the consent to operate.

16. The material on record also states that Respondent No.3 had applied for increasing their capacity from 2 Lakh Metric Tonnes to 3.30 Lakh Metric Tonnes but a renewed CTO recognizing and allowing operation of the unit at the capacity of 3,30,000 MT was only granted vide the APPCB’s order dated 29.11.2018. The said CTO Order is, therefore, after the Judgment of the Apex Court passed on 09.10.2018 wherein the Apex Court had accepted the recommendations of the EPCA for permission of 1.[4] Million Metric Tonnes per annum. The finding of the learned Single Judge that the Apex Court has only capped the total imports and had not taken any decision on the internal distribution of raw pet coke cannot be accepted.

17. As stated earlier, the distribution was based on the total capacity as on 09.10.2018, and, therefore, any change in the increase in the capacity will ultimately have the effect of altering the total import which the Apex Court has not permitted to increase despite repeated attempts on the part of the Appellant and Respondent No.3.

18. At this juncture, it is apposite to highlight that Respondent No. 3 had placed the complete facts pertaining to its grievance before the Hon’ble Supreme Court in I.A. No.12291/2019 in filed in the PIL Proceedings, the relevant portion of which has been quoted above. The said application was rejected by the Apex Court by an order dated 28.01.2019.

19. The abovementioned facts demonstrate that the prayer of Respondent No.3 for increasing the share of import of raw pet coke on the basis that it had increased its production capacity from 2,00,000 MT to 3,30,000MThaving been rejected, is an indicator that the Apex Court was not inclined to disturb the existing situation which is the total amount of import of 1.[4] Million MT which was based on the production capacity of the various units which has been placed before the EPCA Meeting dated 06.10.2018. The learned Single Judge, therefore, failed to appreciate this factor in the Judgment impugned herein. The conclusion of the learned Single Judge that the competent authority had relied on the certificate issued by the APPCB while allocating the production capacity of the Respondent No.3 at 3.[3] Million Metric Tonnes cannot be accepted.

20. The issue, therefore, which has to be considered is as to whether there was any actual change in the public notices on the basis of which the allocation was made. Under the first Public Notice dated 26.11.2018, the importer had to apply for the import license to the DGFT along with the capacity of the unit and a valid consent certificate from the SPCB/PCC in the name of user industrial units indicating the quantity permitted for import and its usage on a monthly and yearly basis. It is pertinent to mention here that when Respondent No.3 made an attempt to seek for increase in their import on the basis of their increase in production capacity, the same was rejected by the competent authority. This Public Notice has to be read in consonance with the Judgment of the Apex Court and cannot be permitted to do violence with the Orders of the Apex Court.

21. On 22.03.2019, as per the second Public Notice, the eligible quantity desiring to avail quota of the total import of raw pet coke were to apply for the import license along with their capacity of the unit and a valid consent certificate from SPCB/PCC in the name of user industrial units indicating the quantity permitted for import and its usage on a monthly and yearly basis. This notice is more or less identical to the first Public Notice dated 22.11.2018. Pursuant to the said notice, Respondent No.3 was granted allocation of 99,154.07 MT on the basis of production capacity of 2 Lakh Metric Tonnes. Also, there was no increase in the share of RPC of the total 1.[4] Million Metric Tonne as permitted by the Apex Court. The Appellant attempted to move the DGFT for the increase in their quota based on the increase in their production capacity which was rejected by the DGFT by Order dated 22.04.2019 on the ground that any change in the quota would be violative of the order of the Apex Court. The relevant portion of the order has been quoted above.

22. The Appellant moved the Apex Court by filing I.A. No.73242/2019 seeking clarification of the order dated 09.10.2018, which was rejected vide Order dated 08.07.2019 on the grounds that order dated 10.08.2018 does not require any clarification. This shows that the second attempt by the Appellant to get an order from the Apex Court to acknowledge that their production capacity has increased and thereby their share in the import should be increased also stood rejected. It is pertinent to mention here that the said order of the DGFT has also been challenged before this Court by filing W.P.(C) 4485/2019 and this Court by its order dated 06.12.2019 had directed that the writ petition be treated as a representation and directed the DGFT to pass orders. The said direction was complied with and the representation was rejected by the DGFT by its order dated 13.02.2020 as has been quoted above.

23. The said order was challenged in W.P.(C) 1858/2020 by Respondent No.3 and an application was filed for direction wherein Respondent No. 3 sought that DGFT be allowed to allocate to Respondent No. 3 on the basis of the CTO dated 29.11.2018 or any other document which was evidence of its capacity of 3,30,000 MT.

24. Curiously, the Government had supported the order passed by the DGFT rejecting the claim of M/s Sanvira Industries for increase in their share in the total import of raw pet coke by stating that Respondent no.3 had made multiple efforts to reopen the case but the Apex Court has rejected the attempts of Respondent No.3. It is also pertinent to mention that the day the learned Single Judge by the Order dated 02.05.2020 rejected the claim of direction made by the Appellant challenging the Order dated 13.02.2020 passed by the DGFT, which has been passed in compliance of the Order dated 06.12.2019 passed by the learned Single Judge in W.P.(C) 4458/2019.In the said order, it was pointed out that the third Public Notice dated 17.04.2020 had been brought out calling for calciners to apply for quota within the total import of raw pet coke out of 1.[4] Million Metric Tonnes.

25. In the Public Notice dated 17.04.2020, the eligible entity desiring to avail quota for import licenses were to make file their applications along with State Pollution Control Board certificates indicating the capacity of the unit as on 09.10.2018 and also a valid consent certificate from the SPCB/PCC.

26. Based on the said certificates, the DGFT in its Minutes of Meeting dated 03.06.2020 increased the allocation of raw pet coke out of the total limit of 1.[4] Million Metric Tonnes to Respondent No.3 at 3,11,247 MT for a production capacity of 3,30,000 MT and has proportionately reduced the allocation for the Appellant from 553574.23 MT in the previous allocations to 4,81,961 MT in the Minutes of Meeting dated 03.06.2020.

27. A perusal of the said Minutes of Meeting dated 03.06.2020 shows that the increase has been accepted on the basis of the request of Respondent No.3. It is in this context that it must be examined whether there was any change in the method of allocation that was to have been followed by Respondent No. 2 in the three Public Notices.

28. As indicated earlier, on 09.10.2018, that is the date on which the Apex Court passed the order, every calciner had given its capacity. The total capacity of all the calciners put together came to 11,72,750 Metric Tonnes and the production and the total import that was necessary for the calciners to continue producing pet coke from raw pet coke was assessed as 1.[4] Million Metric Tonnes as stated earlier. It is reiterated that the same was completely based on the production capacity. On 09.10.2018, the recognition to Respondent No.3 to increase its capacity from 2 Lakh Metric Tonnes to 3.30 Lakh Metric Tonnes had not been placed, rather the consent to operate dated 22.04.2017 restricted Respondent No.3 to produce only 2 Lakh Metric Tonnes of pet coke. The consent to operate for the additional capacity of 1,30,000 MT was granted only on the basis of an agenda item placed before the Andhra Pradesh Pollution Control Board on 29.11.2018. Although Respondent No.3 can produce 3.30 Lakh Metric Tonnes, it does not automatically lead to an inference that they are entitled to an increase in their share of the total import permissible by the orders of the Apex Court dated 09.10.2018.

29. The Apex Court as stated earlier had fixed 1.[4] Million Metric Tonnes only on the basis of the total capacity of each of the calciner. The fact that there have been minor adjustments or a few more persons have been permitted to get a share of the raw pet coke without affecting the capacity as given under the EPCA Report does not mean or does not lead to an inference that the total permissible capacity was variable for the reason that the inter se allocation was made only on the allocation of the capacity basically on the six calciners. The fact that certain other persons also have been given a portion of the total import of 1.[4] Million Metric Tonnes does not take away the basis of the Judgment of the Apex Court which was primarily based on the total capacity of the calciners i.e., Rain CII Carbon, Sanvira Industries Ltd., Goa Carbon Ltd., Kalinga Calciners Pvt. Ltd., India Careon Ltd., Petro Carbon N Chemicals Pvt. Ltd.

30. The reasoning of the learned Single Judge that the public notice dated 17.04.2020 makes a distinction between the certificate in the first part and the consent to operate in the second part and if both, the certificate and the consent to operate, were of the same document then there was no necessity to mention both in two parts of the public notice and, therefore, the certificate, granted by the Andhra Pradesh Pollution Control Board, stating that the Respondent No.3 had, as on 09.10.2018, the installed capacity for manufacture of calcined petroleum coke of 3.[3] Million Metric Tonnes is reasonable, is contrary to the entire scheme as envisaged by the Apex Court. As stated earlier, the total limit of import of 1.[4] Million Metric Tonnes was based on the total production capacity as on 09.10.2018 which had been fixed by the Apex Court on the basis of the capacity disclosed by the calciners themselves. A State Pollution Control Board can only indicate the permissible limit of production of calcined petroleum coke, which for the Respondent No.3 was only 2,00,000 Metric Tonnes. As stated earlier, the consent to produce 3.[3] Million Metric Tonnes of coke was given only after November, 2018 which is after 09.10.2018 and, therefore, the same could not have been considered by the Apex Court. The certificate dated 04.05.2020 issued by the State Pollution Control Board only certifies that the installed capacity of Respondent No.3, as on 09.10.2018, for manufacture of calcined petroleum coke, was 3.[3] Million Metric Tonnes per annum and is obviously immaterial. Even though the public notice dated 17.04.2020 is not under challenge but this Court cannot be a party to any interpretation that will have the effect of upsetting the rationale of the Apex Court in fixing 1.[4] Million Metric Tonnes of raw petroleum coke which, as stated earlier, was based on the permissible capacity as on 09.10.2018.

31. In case, now, the production capacity has increased and its proportionate share has been increased, the DGFT has to bring this fact to the knowledge of the Apex Court and only the Apex Court can alter the figures. The learned Single Judge has, therefore, erred in coming to a conclusion that inter se allocation could have been changed by the DGFT more so because the DGFT has in its previous Minutes of Meetings rejected the claim of various applicants including Respondent No.3 for increasing their share of allocation as per their production capacities. Even though the capacity may have been increased by the order dated 29.11.2018, the permission to produce more than 2 Lakh Metric Tonne was not there on 09.10.2018, which is evident from the order dated 22.04.2017, which restricted Respondent No.3 from producing more than 2 Lakh Metric Tonnes of calcine pet coke.

32. Resultantly, LPA Nos.25/2021, 70/2021 & 71/2021 are allowed and the Judgment dated 15.01.2021, passed by the learned Single Judge in W.P(C) No.3709/2020, 3790/2020 & 3773/2020 is set aside. Consequently, Minutes of Meeting dated 03.06.2020, allocating additional raw petroleum coke to M/s Sanvira Industries is set aside. Respondents No.1 & 2 are directed to take a decision in the matter of re-allocation of raw petroleum coke to various calciners in light of the observations made by this Court in this Order.

33. W.P.(C) 5749/2021 has been filed by the Petitioners challenging the Minutes of Meeting dated 10.05.2021, Public Notices dated 31.03.2021 and 17.04.2020 issued by the DGFT as well as Letter dated 04.05.2020 issued by Andhra Pradesh Pollution Control Board.

34. W.P.(C) 6258/2022 has been filed by the Petitioners challenging the Minutes of Meeting dated 09.03.2022, Public Notice dated 10.02.2022 issued by the DGFT as well as Letter and Report dated 08.10.2020 and 03.10.2018 issued by APPCB.

35. A perusal of the Minutes of Meetings dated 10.05.2021 and 09.03.2022 shows that the allotment to M/s Sanvira Industries has been made on the basis of enhanced capacity to produce 3.30 Lakh Metric Tonnes. As held hereinabove, this allotment has the effect of upsetting the rationale of the Order dated 09.10.2018 passed by the Apex Court while fixing the quantity of import of Raw Petroleum Coke at 1.[4] Million MT. As stated earlier, the said figure has been arrived at on the basis of permissible capacity of each of the calciners as on 09.10.2018.

36. In view of the fact that LPA Nos.25/2021, 70/2021 & 71/2021 are allowed, W.P. (C) Nos. 5749/2021 & 6258/2022 are also allowed and the Respondents are directed to re-draw the allocation of Raw Petroleum Coke to the various calciners in accordance with the observations made by this Court in this Order. Pending application(s), if any are disposed of.

SATISH CHANDRA SHARMA, C.J. SUBRAMONIUM PRASAD, J JANUARY 10, 2023 hsk/sik