Calcined Petroleum Coke Supply By Domestic Calciners To SEZ Units Permissible Under FTP 2023 And CAQM Order: Telangana HC [Read Order]
Telangana High Court quashed DGFT’s rejection and held that CPC supply by domestic calciners to SEZ units is permissible under FTP 2023 and the CAQM order
In a recent ruling, the Telangana High Court held that the supply of Calcined Petroleum Coke (CPC) by domestic calciners to Special Economic Zone (SEZ) units is permissible under the Foreign Trade Policy, 2023 and the order of the Commission for Air Quality Management (CAQM). The court quashed the rejection order issued by the Directorate General of Foreign Trade (DGFT) and directed fresh consideration of the petitioner’s case.
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Rain CH Carbon (Vizag) Ltd, C H Durga, the petitioners, challenged the rejection of their application for Advance Authorisation to import Raw Petroleum Coke (RPC) for the manufacture and supply of CPC to Vedanta SEZ.
The Regional Authority of DGFT had issued a deficiency letter and later a rejection order stating that under Notification No. 68/2023, RPC imports must be on an actual user basis and CPC exports by calciners to SEZ units were not permitted.
The petitioner’s counsel argued that the rejection was contrary to the CAQM order dated 15 February 2024, which expressly permitted deemed exports to SEZ units. They submitted that earlier Advance Authorisations had been granted for the same purpose and the sudden change of stance had caused severe hardship. They relied on relevant provisions of FTP 2023, which treat supply to SEZ units as permissible under Advance Authorisation.
The respondents’ counsel argued that authorisation is not a right and DGFT has the power to refuse or review such applications. They further argued that supplies to SEZ units are to be treated as physical exports and not deemed exports under the FTP, and that the rejection order was consistent with the policy conditions.
The Division Bench comprising Justice N.V. Shravan Kumar observed that the DGFT rejection order was issued without considering the petitioner’s explanation dated 20 January 2025 and without properly addressing the CAQM order that permitted deemed exports to SEZ units. The court explained that earlier Advance Authorisations had been granted for similar supplies and the sudden reversal of position was not justified.
The court held that the rejection order dated 5 February 2025 and the deficiency letter dated 15 January 2025 were unsustainable. The matter was remitted to the DGFT for fresh consideration, with a direction to provide the petitioner a personal hearing.
Since the petitioner had already paid duty for RPC imports on 29 March 2025, the Court directed the authorities to permit supply of CPC to Vedanta SEZ in the meantime. The writ petition was disposed of without costs.
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