-••v $~ * IN THE HIGH COURT OF DELHI AT NEW DELHI 32 + W.P.(C) 606/2010 & CM 1509/2010 M/s. MARBLE ART & ORS. Petitioners Through:Mr. S. Ganesh, Sr. Advocatewith Mr. Manoj, Advocate. versus UNION OF INDIA & ORS. Respondents Through:Mr. A.S. Chandhiok,ASG with Mr. Atul Nanda, Ms. Rameeza Hakeem, Mr. Gaurav Gupta, Mr. Sumeer Sodhi, Ms. Malika Gahlot, Ms. Sugandha and Mr. Sanjay Bhardwaj, Advocate for R-1 to 3. CORAM: HON'BLE DR. JUSTICE S. MURALIDHAR ORDER % 04.02.2010 CM No.1509/2010 For the reasons stated therein, the prayer for bringing additional facts and documents on record is allowed. Application stands disposed of. WP(C) No.606/2010 1. The Petitioner No.l is a registered partnership firm engaged in the production of marble articles for the export market. It is a 100% export- oriented unit (EOU) registered with the Development Commissioner at the Noida Special Economic Zone. The Petitioners 2 and 3 are the partners of Petitioner No.l. It is stated that the Petitioners were conducting a domestic tariff area (DTA) sales alongside exports since 1999. This included DTA clearances of rejected goods, surplus goods, waste, scrap etc. It is stated that sales made were of processed products WP(C) No.606/2010 Page1 of 7 Signing Date:13.08.2024 17:03:45 Certify that the digital and physical file have been compared and the digital data is as per the physical file and no page is missing. Signature Not Verified 1.e., raw materials imported by the Petitioners which was thereafter transformedby the Petitionersinto finishedproducts. 2. In terms of Para 6.8(a) of the Foreign Trade Policy (FTP) 2004-09 which came into force on 1^' April 2004, goods up to 50% of the FOB value of exports couldbe sold on paymentof concessionalrate of duty in the DTA subjectto fiilfilmentof positiveNet ForeignExchangeEarnings (NFE). The ceiling included sale of rejects as well as sale of waste scrap/remnants and by-products. Sale of finished products in the DTA could be made against the payment of full duty provided they were freely importable under the policy. Sale of by-products and sale of waste beyond entitlement was permissible on payment of full duty. 3. On 30'*^ August2005 a policycircularwas issuedand consequentlyon 31^' August 2005 a notificationwas issued by the Director General of Foreign Trade (DGFT) amending Para 6.8 (a) and 6.8 (h) of FTP 2004- 09. As a result EOUs were prevented from making DTA sales of the finished marble made from imported rough marble with immediate effect. 4. Aggrieved by the aforementioned circular/amended Para 6.8(a) and Para 6.8(h) of the FTP a large number of EOUs, including the Petitioner No.l, filed writ petitions in the various High Courts as well as the Supreme Court. These were consolidated and finally heard and disposed of by a judgment of the Supreme Court in Hindustan Granites v. Union WP(C)No.606/2010 Page2 of7 of India (2007) 12 SCC 178. While dismissingthe challenge to the circular and notification by the 100% EOUs, the Supreme Court, inter alia, notedthat the amendedpolicystoppedthe procurementof domestic roughmarbleblocksfor achievingNFE of 100%EOUs. 5. Inthepresentpetition,it is soughtto be contendedthatthejudgmentof the Supreme Court in Hindustan Granites v. Union of India was restricted to examining the validity of the policy circular and notification which amended Paras 6.8(a) and 6.8(h) of the FTP 2004-09. According to the Petitioners, the judgment in Hindustan Granites v. Union of India did not deal with the question of retrospectivity of the aforementioned notification. In other words, it was not clear whether the EOUs could make sales in the DTA of the accrued entitlements and the vested rights prior to the notificationcominginto force. It is statedthat the Petitioners had earned DTA sale permissions against export entitlements which were issued prior to the date of the notification. 6. A reading of the judgment of the Supreme Court in Hindustan Granites v. Union of India shows that on 10'^ January 2007 an interlocutory order was passed by the Supreme Court, the full text of which is set out in para 20 of the final judgmentdated 3'^'^ April 2007. That order dated 10^ January 2007 notes the contentionof one of the EOUs that "they have accumulated wastes which they are entitled to sell in DTA under the unamended policy". It was contended that "they have fulfilled the benchmark of net foreign exchange earnings and, therefore, WP(C]No.606/2010 Page3 of 7 ^7 they were entitledto sell the accumulatedwastes in the domesticmarket (DTA) under Para 6.8(h) on paymentof full duty". The SupremeCourt then permitted the EOUs to make a representation"giving facts and figuresregardingthe quantityof wastewhichhas accumulatedand it will be open to DGFT if possibleto decidethe questionregardingsale of the said waste in the DTA". 7. In para 21 in Hindustan Granites v. Union ofIndia, it is noticedthat on 7'*^ February 2007 "the Director General of Foreign Trade after hearing the parties and after consideringtheir representationspassed an order rejecting the various representations made by M/s Hindustan Granites Ltd., M/s Abhishek Exports, M/s Pacific Industries Limited, M/s Jain Grani Marmo Pvt. Limited and M/s Marble Art (all 100% EOUs). The said order is also under challenge before us". 8. It is plain to this Court from the above paragraph of the judgment dated 3'"'^ April 2007 of the SupremeCourt that the PetitionerNo.l also made a representation to the DGFT regarding disposal of the accumulated wastes in the DTA under Para 6.8(h) on payment of ftill duty. The rejection of the representationmade by the Petitioner was also challenged before the Supreme Court. In the circumstances, it is not possible for this Court to accept the submission that the judgment of the SupremeCourt in Hindustan Granites only dealt with the questionof the validity of the notification. WP(C} No.606/2010 Page 4 of 7 9. After the judgment of the Supreme Court in Hindustan Granites, the Petitioners wrote to the Commerce Ministry stating that there was nothing in the judgment of the Supreme Court which could be said to militate against their request to allow the DTA sales against prior entitlements, and accordingly sought a written clarification that they may proceed with the DTA sales against past entitlements. It is stated that on 8"^ Februaiy2006 itselfthe CommerceMinistryhad writtento the DGFT clarifying that the notification could not be retrospective. The Development Commissioner had also clarified in December 2005 to the DGFT that the permissions already issued could not be disallowed. However, no clarification as requested by the Petitioners was issued by the Commerce Ministry. In the circumstances, the Petitioners were "constrained" to approach the Supreme Court seeking clarification of its judgmentdated 3'^'^ April 2007 and for an appropriatedirectionthat the notification dated 31^' August 2005 did not bar the Petitioner from making DTA sales in respect of the entitlements accrued to it prior to the said notification coming into force". A copy of the said application seeking clarification/direction filed before the Supreme Court has been enclosed with the petition. It is stated that the above application of the Petitioners was summarily dismissed of the Supreme Court on 29^'' September2009. The orderdated 29^*^ September2009 did not give any reasons. A copy of the said order has also been enclosed. 10. The present writ petition has been filed seeking the very same prayer in respect of which the above application M^as filed by the Petitioners, WP(C)No.606/2010 Page5 of7 7 whichwas dismissedby the SupremeCourton 29^^ September2009. 11. Mr. Ganesh, the learned Senior counsel for the Petitioners sought to urge that the m.ere dismissal of an applicationby the Supreme Court without giving reasons would not prevent this Court in exercise of its jurisdictionunder Article 226 to entertain a substantivewrit petition raising the very same issue which was raised in the above application dismissedby the SupremeCourt. He further contendedthat it was open to this Court to interpret the judgment in Hindustan Granites, and hold that it was confined to examining the validity of the amended Notification dated 31'' August 2005 and fijrther hold that the said Notification was not retrospective. 12. This Court is unable to accept the above submission. As already noticed hereinbefore, the judgment in Hindustan Granites notes that even during the pendency of those cases, the issue of sale by the EOUs of accumulated wastes in the DTA was raised; the Petitioners were permitted to make a representation to the DGFT; the DGFT rejected those representations; and the order of the DGFT was also challenged beforethe SupremeCourt. Afterthe finaljudgmentdated 3*^^ April 2007 the Petitioner went back to the Supreme Court with an application for clarification on the very issue. That application was dismissed. This Court fails to understand how in the above circumstances this Court can possibly entertain another writ petition raising the very point which was raised in the application rejected by the Supreme Court. Unless the Petitioners seek a ftirther clarification from the Supreme Court that the WPlC)No.606/2010 Page 6 of 7 dismissalby it oftheir lA by the order dated 29^^ September2009 will not preventthis Court from examiningthe issue in a substantivepetition under Article 226 of the Constitution, this Court cannot possibly entertain this petition. 13. The writ petition is accordingly dismissed. S. MURALIDHAR, J. FEBRUARY 04, 2010 ak WPIC) No.606/2010 Page 7 of 7