Granites Vs. Union of India &
Ors  Insc 29 (10 January 2007)
Pasayat & S. H. Kapadia
Nos. 1 & 2 in T.C.(C) No. 165/2006 with I.A. Nos. 2, 4, 5, 6, 7 & 10 in
T.P. (C) No. 579/2006 and S.L.P. (C) No. _______ of 2006 (CC No. 9881/06) O R D
E R Ban on DTA sales by 100% EOU under OGL licence and limiting the issuance of
licences to those applicants who have imported crude marble between 1999-2001
under SIL scheme vide impugned policy circulars Nos.
dated 30.8.2005, No. 34 dated 30.11.2005 and notification Nos. 23 and 24 dated
31.8.2005 (hereinafter referred to as the impugned new policy) was the subject
matter of challenge vide writ petitions filed in various High Courts.
order dated 29.9.2006, the said writ petitions stood transferred to this Court.
regard to the arguments advanced before us and in view of the fact that the
entitlement of Domestic Users for financial year 2005-06 is going to lapse on
31.3.2007 the following interim order is passed.
would be entitled to grant licences to the applicants who are so entitled under
policy circular No. 24 dated 30.8.2005. To that extent our order dated
29.9.2006 stands vacated.
T.P. (C) No. 579/06 filed by the Director General of Foreign Trade it has been
inter alia stated that on account of representations received from the traders
and the material (including complaints) gathered by DGFT, the impugned new
policy came to be enacted. This was after detailed discussions with the Trade.
The broad features of the new policy and the reasons for enacting the policy
are given in paragraphs 15, 16 and 17 of T.P.
No. 579/06. However, it appears that the requisite material was not supplied to
the affected 100% EOUs. who have complained before us that the changes have
been made in FTP vide the impugned policy without giving any opportunity to the
affected Units. At this stage we may point out that learned Solicitor General
of India stated before us that the impugned policy decision is taken on certain
material (including complaints/ representations received) which he is prepared
to disclose to the concerned EOUs. Accordingly, we direct DGFT to supply the
material in its possession to the affected EOUs., who have filed the writ
petitions, on or before 15.1.2007. The said petitioners (EOUs.) who have filed
writ petitions in the High Court shall thereafter make representations to the
DGFT within 10 days on and from the receipt of the material (including
complaints) from DGFT. Thereafter, DGFT will decide the matter in accordance with
law. We make it clear that it will be open to DGFT to equitably work out the
matter, if possible. One point, however, needs to be mentioned. It is stated on
behalf of M/s Hindustan Granites that they have accumulated wastes which they
are entitled to sell in DTA under the unamended policy. It is contended on
behalf of M/s Hindustan Granites that they have fulfilled the benchmark of Net
Foreign Exchange earnings and, therefore, they were entitled to sell the
accumulated wastes in the domestic market (DTA) under para 6.8 (h) on payment
of full duty. On this point, M/s Hindustan Granites can also make the
representation giving facts and figures regarding the quantity of waste which
has accumulated and it will be open to DGFT if possible to decide the question
regarding sale of the said waste in the DTA.
question as to whether the impugned circulars/notifications constitutes a
change in the policy or whether it is a matter of detail within the existing
policy is the question which will be decided on the next date of hearing when
we will examine the merits of the case.
receiving the report from DGFT, we shall hear the matter on merits on the next
occasion. In the meantime, the ban on EOU Units undertaking DTA sales shall
continue to remain in operation. Consequently, interim order of the Rajasthan
High Court dated 26.10.2005 in DB Civil Writ Petition No. 5811/05 shall remain
over to 31.1.2007.