2015 (1) TMI 23 - HC - Customs

Levy of anti dumping duty - Extension of time period for completing the investigation by the DGAD in terms of first proviso to Rule 17 (1) of the Customs Tariff (Identification, Assessment and Collection of Anti-dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995 - Whether the Government can extend the period of investigation retrospectively after expiry of the last date - Held that - No right is created or gets vested in the importer, upon the expiry of the period stipulated in Rule 17(1). Similarly, no right which is vested in the importer is taken away by the extension of the period for conclusion of investigation. If a right is created in the importer, upon the expiry of the period of one year stipulated in Rule 17(1), then the extension of the period granted post facto, may infringe upon such a right. An inconclusive investigation, will never confer any right upon the person against whom the investigation is made. It will be a different story if the investigation is concluded and a finding in favour of the importer is recorded, since in such cases a right accrues. In the case on hand, no right got created or accrued in favour of the petitioner, upon the expiry of either the original period, namely 09.12.2013, or upon the expiry of the period of first extension, namely 09.3.2014. This is also not a case where the retroactive extension ordered on 30.4.2014, sought to take away any vested right created in favour of the petitioner during the period from 09.3.2014 to 30.4.2014. If an order of extension does not either take away any vested right or extinguish any right sought to be created by efflux of time, such an extension cannot be assailed, on the sole ground that it was not granted, during the life of the thing itself. If the initiation of any investigation does not infringe upon any right, the continuance of the same also cannot. As a corollary, the abrupt termination of an investigation would not create any right that may get defeated upon the resumption of the investigation. Another simple test to determine whether a time limit stipulated in a rule is directory or mandatory, is to see whether there is any indication in the Rule itself about the consequences of non compliance with the same. If a statutory provision contains a prescription and also stipulates the consequences of non compliance with the condition, it would normally be taken to be mandatory. If the consequences of non compliance are not indicated, then, the provision has to be seen only as directory. - If the Parent legislation uses a word or expression, to mean something, the subordinate legislation cannot be taken to use the very same word or expression, to mean a different thing. The word extension used in the first proviso to Section 9-A(5), gives an indication that if an order of extension is passed after sunset review, the extended period will commence only from the date of the order of extension. By specifically providing for a situation, under the second proviso, where a sunset review commences before the expiry of the period of five years , but fails to conclude before the said date, the interpretation to be given to the word extension is made as clear as a crystal. Therefore, I am of the view, on the first issue that the extension granted under the first proviso to Rule 17(1), after the expiry of the original period, was perfectly valid. Violation of principle of natural justice - whether the final order passed by the Designated Authority on 09.06.2014 which is kept in the sealed cover, is in violation of the principles of natural justice or not - Held that - An investigation by a Designated Authority under the Rules in question, is not like (i) a criminal charge, (ii) a domestic enquiry against an employee, or (iii) a quasi judicial proceeding where what is at stake is individualistic. An investigation by a Designated Authority, as seen from (a) GATT 1994, (b) the amended provisions of the Customs Tariff Act, 1975, and (c) the Customs Tariff (Identification, Assessment and Collection of Anti-Dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995, is in the nature of a multi-party assessment of the socio economic conditions that come to the fore when a product is imported into India. Sub-rule (1) of Rule 6 obliges the Designated Authority to issue a public notice, not only containing the particulars of the articles involved, but also containing the name of the exporting country, the date of initiation of investigation, the basis on which dumping is alleged and a summary of factors on which the allegation of injury is based. What is provided for in the anti-dumping rules is (i) a public notice and a public hearing, just as the ones contemplated for environment impact assessment, in contrast to an inquiry that is individualistic and adversarial, (ii) the participation of various sections of the international (not just national) community, including the foreign governments, foreign exporters, domestic industrial houses, domestic importers and consumer organisations, (iii) the collection of information rather than of evidence in the strict sense of the term, (iv) the maintenance of confidentiality of the information furnished by the participants, if they wish to have such confidentiality, and (v) even the circulation of information known as disclosure of information under Rule 16, so that the participants in the investigation are informed in advance of the essential facts that would form the basis for the ultimate decision. Therefore, there is no use in contending that the newly appointed Designated Authority ought to have given a personal hearing. Public notices were issued in terms of Rule 6 and an opportunity of hearing was granted to several persons. Most of those persons were represented either by consultants or by eminent lawyers at Delhi. I have already furnished the list of persons who participated in the proceedings and the consultants/solicitors who represented them before the Designated Authority. Except the petitioner herein, none other participant in the public hearing has complained about the denial of an opportunity of hearing. The grant of a request for adjournment need not necessarily form part of the principles of natural justice. If an adjournment could prove fatal to a case, a quasi judicial authority can always deny the request for adjournment. If the adjournment of a case by one day would make the case infructuous and make one party the winner by default, the adjudicating authority should reject such request. Such rejection would not be a violation of the principles of natural justice. Therefore, I am unable to accept the contention that there was a violation of the opportunity of hearing in this case. Even in respect of notices to be issued for the hearing by the Designated Authority, Article 12 of the aforesaid Agreement contains detailed provisions. These provisions also make it abundantly clear that what is contemplated is not an oral hearing, in the strict sense of the term. Therefore, the entire Scheme of GATT 1994 and the provisions of the Act and the Rules, focus on (i) public notices, (ii) collection of information, (iii) interpretation of the information, and (iv) the recording of findings regarding dumping. Hence, the principles of natural justice as applicable to investigation/inquiries against individuals, may not have a strict application to the investigation under the Anti-dumping Rules. - interpretation is also fortified by the fact that all the information collected by the Designated Authority in the course of investigation, cannot and need not be shared with all the parties to the investigation. Whenever a party to an investigation claims confidentiality, the Designated Authority is obliged to accede to the same. The other parties cannot claim that there was violation of natural justice. Therefore, the dosage of the medicine of natural justice, to be administered to different patients, vary from case to case. In the case on hand, the dosage was adequate and the petitioner cannot ask for more. Hence the second contention of the petitioner is also liable to be rejected. - Decided against assessee.

Summary

Issues Involved:

1. Retroactive Extension of Investigation Period
2. Violation of Principles of Natural Justice

Issue-wise Detailed Analysis:

Issue No. (i): Retroactive Extension of Investigation Period

The first issue concerns whether the Government of India was entitled to extend the period of investigation retroactively from 09.03.2014 by a notification dated 30.04.2014. The petitioner argued that Rule 17(1) of the Customs Tariff Rules obliges the Designated Authority to determine the existence of dumping within one year from the initiation of the investigation, with a possible extension of six months. The petitioner contended that the term "extend" implies that the extension must be granted while the original period is still valid, and cited several legal precedents supporting this interpretation.

In response, the respondents argued that procedural time limits should not override substantial rights and that post facto approvals can validate actions. The court examined various precedents, including the Supreme Court's decisions in U.P. Avas Evam Vikas Parishad v. Friends Co-op. Housing Society Ltd. and Ashok Kumar Das v. University of Burdwan, which supported the validity of post facto extensions in certain contexts.

The court concluded that the time limits prescribed in subordinate legislation like the Customs Tariff Rules are generally directory, not mandatory. It was noted that the Customs Tariff Act, 1975, does not prescribe any time limit for the conclusion of an investigation, and any delay in recording final findings benefits the importer as the anti-dumping duty takes effect only from the date of notification. The court further emphasized that no right is created or vested in the importer upon the expiry of the investigation period, and thus, the retroactive extension granted on 30.04.2014 was valid.

Issue No. (ii): Violation of Principles of Natural Justice

The second issue concerns whether the Designated Authority's action of granting less than 24 hours' notice for a personal hearing and rejecting the request for adjournment violated the principles of natural justice. The petitioner argued that the newly appointed Designated Authority did not provide a sufficient opportunity for a personal hearing, relying on the Supreme Court's decision in Automotive Tyre Manufacturers Association v. The Designated Authority, which held that a personal hearing is crucial for adhering to natural justice principles.

The respondents contended that the investigation involved multiple parties, including foreign exporters, domestic manufacturers, and consumer organizations, and that many were represented by consultants or solicitors in Delhi. The court noted that public notices and hearings were issued as per Rule 6, and most parties participated without complaint. The court also distinguished between individualistic inquiries and public investigations, where broad participation and written submissions are prioritized over personal hearings.

The court concluded that the principles of natural justice were adequately met through public notices and written submissions, and the Designated Authority's refusal to adjourn the hearing did not constitute a violation. The court emphasized that the investigation under the Anti-dumping Rules is akin to a public hearing involving multiple stakeholders, and strict adherence to personal hearing norms is not always required.

Conclusion:

The court dismissed the third and fourth writ petitions challenging the extension notification and the communication of the Ministry of Commerce, respectively. The first two writ petitions challenging the preliminary findings and the imposition of provisional duty were also dismissed, with the observation that these would merge with the final findings recorded by the Designated Authority. Consequently, all connected miscellaneous petitions were dismissed.