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CASE NO.: Transfer Case (civil)  165 of 2006

PETITIONER: M/s Hindustan Granites

RESPONDENT: Union of India & Ors

DATE OF JUDGMENT: 10/01/2007

BENCH: Arijit Pasayat & S. H. Kapadia

JUDGMENT: JUDGMENT I.A. 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.  24 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.         By order dated 29.9.2006, the said writ petitions stood transferred to  this Court.         Having 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.

       DGFT 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.  In 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.  (C) 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  

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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. The 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.

       On 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 stayed.

       Stand over to 31.1.2007.