Supreme Court: Importer Disentitled to Proportionate Increase in Import of Raw Pet-Coke as CTO was issued After Court’s Order Fixing Total Import Limit

Supreme Court: Importer Disentitled to Proportionate Increase in Import of Raw Pet-Coke as CTO was issued After Court’s Order Fixing Total Import Limit

The Supreme Court has upheld the restrictions on the import and allocation of Raw Petroleum Coke (RPC).

The bench comprising of Justices S. Ravindra Bhat and Dipankar Datta, dismissed the appeal challenging the allocation criteria for RPC and affirmed the concerns raised by the Environment Pollution Control Authority (EPCA) regarding the environmental impact of calcined petroleum coke (CPC) usage.

The Court remarked that the Andhra Pradesh Pollution Control Board (APPCB) had issued the ‘Consent to Operate’ CTO for the additional quantity after the Supreme Court’s order dated 9 October, 2018, where it had fixed the outer limit for import of RPC based on the total production capacity of the entities existing on the said date.

The appeal challenged the decision of a Division Bench of Delhi High, wherein the Court rejected a demand for increased allocation based on an increased manufacturing capacity. The Division Bench held that when this court passed the order, every calciner had given its capacity. This was based entirely on the total production capacity. The total limit of import of 1.4 MMTPA was based on the total production capacity as on 9 October, 2018 which had been fixed by the Court on the basis of the capacity disclosed by the calciners themselves.

The appellant, Sanvira Industries claimed to be involved in the manufacturing of Calcined Petroleum Coke (CPC). On 18 July 2018, the Central Ministry of Environment, Forest and Climate Change (MoEF), officers of the Environment Pollution (Prevention and Control) Authority for NCR and the Ministry of Petroleum and Natural Gas (MPNG) decided that import of pet-coke ought to be restricted only to industries using it as a feedstock or as part of their manufacturing process and not as fuel.

On 9 October, 2018, an order was passed directing that RPC import cannot exceed 1.4 MMTPA and that it could be used as feedstock for producing CPC. The figure of 1.4 MMTPA was based on the production capacity of calciners given by each one of them.

On 22 March, 2019, the Appellant had requested for an increased allocation, based on its claim of enhanced capacity to the extent of 1,30,000 MTPA. This application for enhancement was rejected which also rejected a similar application for increased capacity by the contesting respondent, Rain CII.

On 4 May, 2020, the Andhra Pradesh State Pollution Control Board (APSPCB) issued a letter stating that as per its record, based on inspection of Sanvira’s unit, the latter’s capacity for manufacture of calcinated petroleum coke was 3,30,000 MT per annum and the power generation capacity was 16 MW.

The Court noted that the Court had fixed the outer limit of import of RPC at 1.4 MTPA, based on the assessment by EPCA which evaluated the requirements of various industries and units, engaged in the production of diverse commodities and raw materials (such as steel, aluminium, cement, clinker and those of calciners).

The Court said that it was clear that the CTO mentioned the Sanvira’s capacity at 2,00,000 TPA and Sanvira’s position was that the CTO for an additional 1,30,000 TPA was granted on 29 November, 2018 and that the application for such capacity was made on 29 October, 2018.

The bench further noted the record that the APPCB issued the CTO for the quantity of 3,30,000 TPA only for 23 December, 2019. The Court referred to the Order of the Union Ministry dated 13 February, 2020 which stated that any capacity added by the procedures after the Order of the Court dated 9 October, 2018 would not be taken into consideration while allocating the RPC.

The bench observed that, “The Division Bench noted, correctly that the annual 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 this court on the basis of the capacity disclosed by all the calciners. The certificate dated 04.05.2020 issued by the APPCB merely certified that the installed capacity of Sanvira, as on 09.10.2018, for manufacturing calcined petroleum coke, was 3,30,000 Metric Tonnes per annum in terms of the CTO. In these circumstances, the clarification of APPCB, that as on a particular date, the production capacity was 3,30,000 MTPA was of no consequence, because it was the CTO that was considered all along, in all previous meetings. Therefore, the findings and conclusions of the Division Bench cannot be faulted.”

Moreover, the Court said that the certificate dated 4 May, 2020, issued by the APPCB merely certified that the installed capacity of Sanvira, as on 9 October, 2018, for manufacturing calcined petroleum coke, was 3,30,000 MTPA in terms of the CTO.

Thus, the Court was of the view that the impugned decision of the Division Bench was correct and there were no infirmities in the said decision. Therefore, the Court dismissed the appeals.