NCLAT Upholds CCI Order on BSM Export Ban

New Delhi, Sep 23 (PTI) Appellate tribunal NCLAT on Tuesday upheld a CCI order which rejected a petition against restrictions on the export of beach sand minerals (BSM).

A two-member NCLAT bench upheld the CCI order, which had dismissed the plea of Beach Mineral Producers Association against a notification dated August 21, 2018, bringing export of BSMs under State Trading Enterprise and Indian Rare Earths Ltd (IREL). The notification designated State Trading Enterprise and IREL as the canalising agent for BSM exports.

The association had claimed that the notification had placed IREL in a dominant position and skewed the level-playing field. However, CCI in its order dated July 25, 2019, dismissed the petition.

BSM, also called placer deposits, contains ilmenite, rutile, garnet, monazite, zircon, sillimanite and leucoxene. They have multiple uses, such as sand blasting, creating welding flux, manufacture of refractories, extracting rare earth components, atomic power etc.

While, Monazite, a thorium ore, is used for strategic purposes and for extracting rare earth components.

Beach Mineral Producers Association had challenged the CCI order before NCLAT, which is an appellate authority over the orders passed by the fair trade regulator.

The National Company Law Appellate Tribunal (NCLAT) observed that the notification does not stop the appellants to do business with foreign buyers but only says such exports need to be channelised through IREL (India) in view of material being related to the 1st Schedule of Mines and Minerals (Development and Regulation) Act, 1957.

"Secondly, we find the provisions of Section 4 of the Act shall not be applicable in the present case," said NCLAT.

Section 4 of the CCI Act, 2002 says no government enterprise or group shall abuse its dominant position. However, it also exempts if that is relatable to the sovereign functions of the Government including all activities carried on by the departments of the Central Government dealing with atomic energy, currency, defence and space.

"Thus to our mind the learned CCI has rightly closed the information under the provisions of section 26(2) of the Act as vide the appeals, the appellant proposed to challenge the notification dated 21.08.2018, which in fact is a policy issue and this being not a forum to seek orders qua its quashing," said NCLAT.