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2023 (12) TMI 696 - DELHI HIGH COURT100% EOU - Fixation of wastage norms for the downstream products of the Petitioners - seeking waiver of requirement of data "certified by Excise" or, in the alternative; direct the Ministry of Commerce to collect data afresh after affording reasonable time to the Petitioners to restart the process of production of downstream products - influence on the process of fixation of wastage norms - seeking to keep the Petitioners' Settlement Application in abeyance till the fixation of wastage norms by the Respondent No. 2. HELD THAT:- The importance of fixation of the Wastage Norms has been highlighted by the respondents themselves when they state that the nature of the EOU Scheme necessitates the Government to closely monitor the consumption of input and the production process in the EOU Unit, and with this intent, the detailed guideline for determining the ratio of input to its output has been provided - Para 9.30(b) of the Handbook of Procedure also mandates that the Wastage Norms in respect of the items not covered by the Appendix 41 are to be fixed by the BOA. Para 6.8(e) of the Chapter 6 of the FTP 2004-2009 also states that with respect to the items not covered by the norms notified by the Duty Exemption Scheme, Development Commissioner may fix ad-hoc norms, which would be valid for a period of six months, and within this period, final norms shall be fixed by the BOA. It is apparent that the function and the duty of the BOA is to fix the Wastage Norms. The BOA cannot refuse to exercise this jurisdiction and this power merely because it is of the opinion that the product for which such norms are requested to be determined, would not be commercially viable, or due to the high quantity of wastage, such products should not be allowed in the EOU. The power vested in the BOA is coupled with a duty inasmuch as it is required for giving full effect of EOU Scheme, and without such norms, the Scheme itself would be difficult to implement. It is, therefore, mandatory for the BOA to fix the Wastage Norms, when requested or applied for - In the present case, the Norms Committee refused to determine the Wastage Norms on the ground that the products sought to be manufactured by the petitioner would result in high quantity of wastage of raw materials. The Norms Committee further opined that such activities would not be commercially viable and, in any case, should not be allowed in the EOU. Commercial viability - HELD THAT:- It is for the petitioner to decide whether the production of the products in question is commercially viable to it or not. The commercial viability of the products cannot be a ground for the BOA to refuse to exercise the jurisdiction and duty vested in it - Similarly, whether such products can be and should be allowed under EOU Scheme, is a matter of policy, which is to be determined by the concerned Ministry. The Impugned Report of the Norms Committee dated 08.05.2015 is set aside - the Committee shall re-consider and fix the Wastage Norms for the products applied for by the petitioner, in accordance with the law - petition disposed off.
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