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2003 Supreme(AP) 1432

Andhra Pradesh High Court
Judges : DEVENDER GUPTA, G.ROHINI
Indian Ammonium Nitrate Manufacturers association Mumbai - Appellant
Versus
Union of India, Ministry of Law, Justice and company Affairs - Respondent
Decided On : 12-01-03

Headnote:

Constitution of India – Article 226 – India Companies act, 1956 –Section 25 – Provisions of Customs act, 1962 – Customs Tariff Act and Fertiliser (Control) Order, 1985 – Section 28 – Essential Commodities Act – Section 19 and 25 – Criminal Procedure Code, 1973 – Illegal sale – Association claims – Deputy managing – Clandestine imports of ammonium – Writ Petition by way of Public interest Litigation has been filed by two petitioner first petitioners – Claims to be an association of Indian Ammonium Nitrate manufacturers – It is not a registered association but it is claimed that application has already been moved for registration under Section 25 of India Companies act, 1956 which is said to be still pending –Association claims that one of its objects is to safeguard interest of Ammonium nitrate manufacturers in India – Second petitioner claims himself of be promoter of first petitioner and is also Deputy managing Director of Deepak Fertiliser and petrochemicals Corporation company engaged in manufacture and sale of fertilisers and ammonium nitrate in country – Held, Courts more particularly filed as PIL by persons having business rivalry and who are highly interested – On technical aspects of matter, Respondents 13 and 16 in their detailed counter-affidavits have demonstrated that the stand of the petitioners is not true and as a business rivalry and under some misapprehension, the petitioners have approached this court – Two companies namely Deepak Fertiliser and petrochemicals Corporation Ltd. and smartchem Technologies Ltd manufacture low-density prilled ammonium nitrate – They do not manufacture high-density prilled ammonium nitrate and since the products manufactured by them is priced higher and they are unable to compete fairly with alternative product available globally at a commercially competitive price, an effort appears to have been made by them to exert pressure on importers so that they may purchase more expensive low-density ammonium nitrate produced by them rather than purchase cheaper high-density ammonium nitrate for their purpose – Petition is ordered.

DEVINDER GUPTA, C. J.

( 1 ) THIS Writ Petition by way of Public interest Litigation has been filed by two petitioner first petitioners. Claims to be an association of Indian Ammonium Nitrate manufacturers. It is not a registered association, but it is claimed that application has already been moved for registration under Section 25 of the India Companies act, 1956 which is said to be still pending. The Association claims that one of its objects is to safeguard the interest of Ammonium nitrate manufacturers in India. Second petitioner claims himself of be the promoter of first petitioner and is also Deputy managing Director of Deepak Fertiliser and petrochemicals Corporation Ltd. , a company engaged in the manufacture and sale of fertilisers and ammonium nitrate in the country.

( 2 ) THE petitioners are aggrieved by the alleged inaction on the part of the respondent 1 to 12 failing to prevent the alleged clandestine imports of ammonium nitrate of explosive grade in bulk. Petitions have alleged that respondent 13 to 15 and other importers and explosive manufacturers are importing ammonium nitrate of Explosive grade in bulk clandestinely by declaring the same to be a Fertiliser Grade, which is in breach of directions issued by the Andhra pradesh Pollution Control Board. They are also violating the provisions of Customs act, 1962 read with Customs Tariff Act and the Fertiliser (Control) Order, 1985, issued under the Essential Commodities Act.

( 3 ) PETITIONERS claim that the Fertiliser control Order, 1985 (hereinafter referred to as the Order ) exhaustively defines which substances are fertilisers. Part a of Schedule i thereto specifies Calcium Ammonium nitrate having a concentration of Nitrogen of either 25% or 26% to be fertilizer. Therefore, ammonium Nitrate having such concentration of nitrogen alone can be considered to be of Fertilizer Grade. The indian Standard Specification for Ammonium nitrate for Explosive (1st Revision) adopted by the Indian Standard Institution specifies that Ammonium Nitrate having a concentration of Nitrogen of 34. 5% or above is of Explosive Grade. The A. P. Pollution Control Board (hereinafter referred to as the board ), vide its letter dated 8th april, 2002 issued directions for regulating the import of hazardous chemicals in the light of the acknowledged health hazards in transporting, unloading, handing and storing ammonium Nitrate of Explosive Grade in bulk. According to the petitioner, the directions issued by the Board would amount to imposing a prohibition on the import of explosive Grade Ammonium Nitrate in bulk.

( 4 ) THE petitioner has alleged that with a view to circumvent the directions issued by the Board and to clandestinely continue the import of Ammonium Nitrate of Explosive grade in bulk into the country, the importers/ explosive manufacturers are mis-declaring consignments of Ammonium Nitrate of explosive Grade in bulk to be of Fertilizer grade. Despite the fact that the supporting shipping documents presented under cover of Bill of Entry make it abundantly clear that the said consignment are in fact of ammonium Nitrate of Explosive Grade in bulk, respondent 1 to 12 have failed to perform their statutory duties in preventing such mis-declaration and in prohibiting the import of such prohibited consignment into the country.

( 5 ) IT is further alleged that the Customs tariff Act clearly prescribes the rate of duty payable on products classifiable as fertilizers. This is born out both by the chapter heading (Fertilizer) and Chapter sub-heading ("mineral or Chemical Fertiliser, nitrates" ). Since the consignments are of ammonium Nitrate Explosive Grade (having concentration of Nitrogen of 34%), the declaration of Respondents 13 to 15 that they are fertilizers is contrary to the provisions of Customs Act read with customs Tariff Act. Thus the imports of ammonium Nitrate of Explosive Grade in bulk under the guise of Ammonium Nitrate of explosive Grade in bulk under the guise of ferti



























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