TMI Blog2020 (10) TMI 598X X X X Extracts X X X X X X X X Extracts X X X X ..... o force of the Ammonium Nitrate Rules, to apply for a licence and to comply with the Rules. In fact, the proviso to Rule 5 was deleted by a subsequent amendment with effect from 27.09.2018. Even otherwise, on facts, the time limits in the proviso do not apply - the undisputed position is that the Appellant imported 740 MT of ammonium nitrate under bill of entry No.2704255 dated 24.09.2015 from Korea. Thus, it is clear that the import of ammonium nitrate was subsequent to the rejection of the application for a licence. Consequently, there is no doubt that the Appellant violated Rule 6(4)(a) of the Ammonium Nitrate Rules which prohibits a person from importing ammonium nitrate without a valid licence and without complying with the conditions of such licence. The ammonium nitrate having the chemical formula NH4NO3 or any combination containing more than 45% of ammonium nitrate by weight shall be deemed to be an explosive as per the Explosives Act. This position emerges from the notification dated 21.07.2011 of the Ministry of Commerce and Industry which was issued under Section 17 of the Explosives Act. Keeping in mind the fact that ammonium nitrate is an explosive in any combinati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lant. The said writ petition was dismissed by order dated 12.11.2019, which is challenged in this intra-court appeal. 3. The present writ appeal arises under the following facts and circumstances. The Appellant applied for and was granted a P3 licence by the Chief Controller of Explosives/the second Respondent herein on 03.12.2014 for the storage and sale of ammonium nitrate. Thereafter, the Appellant filed an application dated 05.08.2015 for the grant of a P5 licence. The P5 licence is required to import ammonium nitrate. The application for the P5 licence was rejected by the Chief Controller of Explosives by order dated 19.08.2015 on the ground that the Appellant is a trader and, therefore, it is not in the interest of national security to grant the licence. 4. After the rejection of the application for the P5 licence, the Appellant imported 740 MT of ammonium nitrate under Bill of Entry No.2704255 dated 24.09.2015 from Korea. The said consignment was detained by the Customs Authorities at the Chennai Sea Port. By letter dated 11.02.2016, the Chief Controller of Explosives informed the Principal Commissioner of Customs that the consignment of ammonium nitrate was imported b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was set aside and the matter was remanded to the first Respondent for fresh consideration on merits. Pursuant thereto, the order dated 02.11.2018 was issued by the first Respondent. In the said order dated 02.11.2018, the first Respondent recorded that in spite of the rejection of the application for a P5 licence on 05.08.2015, the Appellant imported ammonium nitrate through the Chennai Sea Port on 24.09.2015. This amounts to a violation of Rules 4 (6)(4)(a) of the Ammonium Nitrate Rules. In addition, the first Respondent also took note of the information regarding alleged supply of ammonium nitrate by the Appellant to stone quarry units. On that basis, the appeal was rejected. The order dated 02.11.2018 was challenged in the writ petition and upon dismissal thereof, the present appeal was filed. 7. We heard the learned counsel for the Appellant, Mr.S.Baskaran; the learned counsel for the first and second Respondents, Ms.Sunita Kumari; and the learned counsel for the third and fourth Respondents, Mr.Rajnish Pathiyil. 8. The learned counsel for the Appellant narrated the facts leading to the filing of the present appeal. His first contention was that the Appellant holds ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... port licence to a trader. In this regard, she also submitted that the P5 licence had not been granted till date to a trader. 11. With regard to the Ammonium Nitrate Rules, she pointed out that Rule 5 stipulates that no licence would be granted unless all the relevant provisions under the Rules and all the conditions contained in the licence forms annexed to the Rules are complied with. Rule 6(4) specifies that no person shall import or export any ammonium nitrate except under and in accordance with the conditions of the licence under the Rules. In the case at hand, the undisputed position is that the Appellant imported 740 MT of ammonium nitrate on 24.09.2015 from Korea. Such import was subsequent to the rejection of the application for a P5 licence. The appellate authority duly considered the fact that the Appellant had imported the consignment without a licence and that such import was in violation of Rules 4 and 6(4)(a) of the Ammonium Nitrate Rules. In addition, she contended that the appellate authority adverted to the fact that specific information had been received that the Appellant had sold ammonium nitrate to stone quarrying units and to fire cracker manufacturing unit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ammonium Nitrate except under and in accordance with the conditions of license granted under these rules. 15. The learned counsel for the Appellant relied upon the proviso to Rule 5 to contend that the Ammonium Nitrate Rules are not applicable until the expiry of one year from the date of publication of rules. The said Rule 5 is as under: 5. Pre-requisite for grant of licence:-- No Licence shall be granted unless all the relevant provisions laid down under these rules and all conditions contained in the license forms under Part-2 of Schedule II annexed to these rules are complied with. Provided that all the existing manufacturers, converters, users, transporters, stevedores, sellers, possessors, importers and exporters shall apply for licence within six months and shall comply with the provisions of these rules within a period of one year from the date of publication of these rules. 16. On examining Rule 5, it is clear that an existing importer is entitled to apply for a licence within six months from the date of entry into force of the Ammonium Nitrate Rules and to comply with the provisions of the Rules within one year from the date of publication thereof. In the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trate Rules, we do not find any provision that prohibits the grant of licence to a trader. However, it needs to be borne in mind that ammonium nitrate is an explosive. The learned counsel for the first and second Respondents pointed out that the import licence has not been granted to any trader so far on the ground of national security. She explained that ammonium nitrate is used in the manufacture of explosives and, therefore, it would be difficult to track the end use and end users of ammonium nitrate if traders are permitted to import ammonium nitrate for sale to their customers. Upon perusal of Rules 34 and 35 of the Ammonium Nitrate Rules, we find that Rule 34 provides that the District Authority shall verify the antecedents of the applicant including the genuineness of the purpose before granting a no objection certificate. Under Rule 35, the License Issuing Authority is empowered to conduct an enquiry and grant a licence only upon being satisfied with the documents received. Rule 34(2)(a) and 35 read as follows: 34(2)(a) On receipt of the application for issue of no objection certificate or grant of License, the District Authority shall verify the antecedents of the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 2) Import license under Explosives Rules, 2008 is granted only to the respective users not to the traders, other than import of Marine Distress Signals. By the aforesaid practice of granting export license to the explosives manufactures and import license to the respective users, export/import of explosives has become a level playing field for every manufacturer user in the country and it was well accepted by the industry. Further regulating monitoring mechanism of export/import of explosives becomes effective and no issues related to security threats cropped up in the transaction of explosives during export import, so far. Ammonium Nitrate Rules, 2012: a) The Explosives Rules, 2008 and Ammonium Nitrate Rules, 2012 framed under Explosives Act 1884 are sharing equal importance in terms of National Security. The national internal and external security concern becomes more crucial, when Ammonium Nitrate is allowed for import by traders for domestic sale and for export by traders. b) In view of the above, the same policy adopted for export import of explosives under Explosives Rules, 2008 is being extended to the export import of Ammonium Nitrate was grante ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es, 2008 were granted to users only and not to traders. The Explosive Rules, 2008 and Ammonium Nitrate Rules, 2012 framed under the Explosives Act, 1984 are of equal importance in terms of national security . Therefore, PESO had decided not to grant licence to any trader for import of ammonium nitrate. A licence in P-5 Form was required to import ammonium nitrate, which M/s Sri Amman Chemicals did not possess. Despite refusal to grant import license by CCE. Nagpur on 19th August, 2015, the Appellant had imported the aforesaid AN consignment of 740 MT through Chennai Port on a later date i.e., 24 September. 2015 which amounts to violation of Rules 4 6(4)(a) of the Ammonium Nitrate Rules. 2012: Bill of Lading is prepared in advance and is not a valid document evidencing date of dispatch from the country of export. Moreover, as per written submission by the appellant vide their letter dated 27/1/2015, due to slackness of their staff they could not intimate their supplier in Korea for not dispatching the consignment and it was dispatched from Korea on 9th September, 2015 and arrived at Chennai port on 24 September. 2015. The explanation offered by the Appellant is not sati ..... X X X X Extracts X X X X X X X X Extracts X X X X
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