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2023 (2) TMI 492 - HC - CustomsSeeking provisional release of seized goods - allegation of evasion of Anti-dumping duty - Imposition of anti-dumping duty equal to the lesser of the margin of dumping and the margin of injury - adjudicating authority has merely communicated the conditions for the provisional release without considering any features of quasi-judicial order - Power of Commissioner of Customs to make an extension of period under Section 110A of the Customs Act - Non-speaking orders without any reasons for extension of time - HELD THAT - The Court has perused, in detail, the material which has been produced as also the notification issued by the Government of India, Ministry of Commerce and Industry, Department of Commerce, Directorate of General of Trade Remedies of 28.09.2021 with the subject of anti-dumping investigation concerning imports of Decor Paper originating in or exported from China PR - It appears that it speaks of the Kingdecor being a limited liability company. It also says that the legal statute of the Kingdecor has not changed in the last three years. It has directly exported MT of Product Under Consideration (PUC) to India and MT through two different related traders namely Xianhe Company Limited and Zhejiang Xianhe New Material Sales Company Limited, China PR. The Kingdecor company has claimed the adjustments on account of the ocean freight, insurance, inland transportation, port and other related expenses, credit cost and bank charges. The net export price at ex-factory level for Kingdecor (Zhejiang) Co. Ltd. has been determined and is shown in the dumping margin table. It is quite clear that the anti-dumping duty recommended by the authority is 116 USD per MT so far as the producer Kingdecor (Zhejiang) Co. Ltd. from China in relation to the decor paper. This comes under the heading 48059100 and 48022090 - it has made quite clear that XH and KD series of paper type for different markets and different customers have been made by them. It is not being questioned that in notification dated 28.09.2021, there is a specific reference of Xianhe as a producer of decorative base paper, however, it had not been provided the information as a producer but, only as an exporter. Xianhe has stated that it produces the Speciality Paper. The product under consideration is only a Speciality Paper and clarification is required on how the product produces by the company is different from the subject goods. Xianhe stated that it does not have any joint venture, however Kingdecor is a joint venture of Xianhe and Schattdecor AG. The entire emphasis is on that the item code of the paper manufactured by the Kingdecor (Zhejiang) Co. Limited is with alphabet KD , the item code of the paper manufactured by the Xianhe Co. Ltd. is starting with XH and the item manufactured by M/s. Zhejiang Xianhe New Materials Sales Co. Ltd. China also stats with XH . It is M/s. Saraf Sales Corporation which has acted as an agent. It is the note itself which is showing that the goods were traded and supplied by M/s. Kingdecor. It is the producer which is important to known and there has been a specific declaration given based on the Kingdecor s own letter - This being the case with the petitioner having already paid the anti-dumping duty at the rate of 116 USD per metric ton, with a further amount of Rs. 88,22,040/- where the differential duty amount has been paid. The petitioner is hereby directed to furnish the bond of entire amount of goods of Rs. 25,00,00,000/- before the authority and shall also disclose properties of company and its directors before this Court on oath and also give an undertaking of not to part with the same till this inquiry is completed in above mentioned four weeks period - respondent no.4 is directed to release the goods and the operation of seizure order passed by the respondent no.3 under Section 110 of Customs Act is hereby quashed and set aside. Respondent authority shall release the goods as soon as the petitioner furnish bond of Rs. 25,00,00,000/-. Petition disposed off.
Issues Involved:
1. Misdeclaration of producer's source and payment of anti-dumping duty. 2. Validity of detention and seizure of raw materials. 3. Provisional release of seized goods. 4. Compliance with procedural requirements under the Customs Act. 5. Alleged violation of fundamental rights. 6. Requirement of a reasoned order for provisional release and extension of time for issuing a show cause notice. Detailed Analysis: 1. Misdeclaration of Producer's Source and Payment of Anti-Dumping Duty: The petitioner, a Private Limited Company engaged in decor paper printing, imported raw materials from Kingdecor (Zhejiang) Company Limited. The respondent alleged that the raw materials were not produced by Kingdecor but by Xianhe Co. Ltd., necessitating a higher anti-dumping duty of USD 542 per metric ton instead of USD 116 per metric ton. The petitioner contested this claim, providing documentation that the raw materials were indeed from Kingdecor, which produces both "XH" and "KD" series paper types. The court noted that the anti-dumping duty for Kingdecor was USD 116 per metric ton as per the notification dated 28.09.2021. 2. Validity of Detention and Seizure of Raw Materials: The raw materials were detained and subsequently seized under Section 110 of the Customs Act on the grounds of misdeclaration and evasion of anti-dumping duty. The initial valuation of the raw materials was Rs. 17,87,55,684/-, later corrected to Rs. 28,07,58,462/-. The court observed that the inquiry by the respondent was incomplete and directed that the inquiry be completed within four weeks. 3. Provisional Release of Seized Goods: The petitioner requested the provisional release of the seized goods, which was initially approved subject to a bond of Rs. 24,41,31,320/- and a bank guarantee of Rs. 11,00,00,000/-. The petitioner argued for a reduced guarantee amount corresponding to the anti-dumping duty of Rs. 88,22,040/-. The court directed the petitioner to furnish a bond of Rs. 25,00,00,000/- and disclose the properties of the company and its directors, following which the goods were to be released. 4. Compliance with Procedural Requirements under the Customs Act: The court examined the procedural compliance under Section 110 and Section 110A of the Customs Act. It was noted that the extension of time for issuing a show cause notice was granted without specific reasons, which was deemed arbitrary. The court emphasized the need for a reasoned order when extending the time period for issuing a show cause notice. 5. Alleged Violation of Fundamental Rights: The petitioner claimed a violation of fundamental rights due to the seizure and the conditions imposed for provisional release. The respondent countered that no fundamental or legal rights were violated. The court did not find a direct violation of fundamental rights but focused on procedural fairness and reasonableness in the actions of the respondent. 6. Requirement of a Reasoned Order for Provisional Release and Extension of Time for Issuing a Show Cause Notice: The court highlighted the necessity for a reasoned order when granting provisional release and extending the time for issuing a show cause notice. It referenced the Apex Court's decisions emphasizing the importance of providing reasons to ensure transparency and fairness in administrative actions. The court found the orders for provisional release and extension of time to be lacking in this regard. Conclusion: The court directed the respondent to complete the inquiry within four weeks and ordered the provisional release of the goods upon the petitioner furnishing a bond of Rs. 25,00,00,000/-. The seizure order was quashed, and the court emphasized the need for reasoned orders in future proceedings. The petition was disposed of with the clarification that other contentions of the parties were kept open for appropriate proceedings.
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