2005 (4) TMI 76 - HC - Customs

Levy of Anti-dumping duty - Role and Authority of the Designated Authority - Territorial jurisdiction - Writ restraining imposition - Investigation - business of manufacture of tyres - Notification dated 26-7-2004 issued by Central Government imposing provisional Anti Dumping Duty on import of NTCF from China - whether it is an independent levy under the Act of 1975 otherwise than the Customs duty as imposed under the Act of 1962 or is a specie of customs duty. HELD THAT - If we view the facts of the present case, then it is discernible that so far as the imposition of provisional Anti Dumping Duty by Notification dated 4th July, 2004 is concerned, the legislative instrument, the Notification imposing Provisional Duty has come into existence and it has affected the petitioner also as it became subject to Anti Dumping Duty as importer and was also effected as industrial user of the subject article. Therefore, so far as challenge to recording and publication of preliminary findings by the Designated Authority is concerned on imposition of provisional Anti Dumping Duty on that basis, cannot be said to be premature nor can it be said that in respect of it cause of action has not arisen. However, there is no dispute about the circumstances existing today that the maximum period for provisional Anti Dumping Duty could have remained in force has almost reached its end and the provisional Anti Dumping Duty is not going to be continuing cause. The levy of Provisional Duty is also not the final but is subject to the decision of the Central Government ultimately to impose Anti Dumping Duty after receiving the final findings. The preliminary finding of the Designated Authority merges into the final findings. Final findings become subject to remedial proceedings if the Central Government notifies the imposition of Duty. If no Duty is levied, the Duty already paid becomes refundable without determining the liability of preliminary findings. If the Duty is imposed, the amount adjustable against final levy cannot be refunded until challenged appropriately and the same are set aside. Our conclusion in this aspect of the matter is that the enquiry by the Designated Authority , notwithstanding the elaborate procedure it has to follow, is not in the nature of a judicial or quasi judicial enquiry because it is not aimed at determining the rights of any of the parties who participate in the enquiry. It does not decide a lis between all or any of them. It remains an auxiliary limb of the State in its legislative manifestation to gather necessary information, consider the various interests involved and draw inference therefrom to provide a foundation for exercise of legislative function of imposing a tax in an objective manner. It merely place its conclusion before the Central Government for taking its own decision. The whole exercise by itself does not result in any adverse effect on the interest of any of the parties appearing before it. It does not enter into any adversarial litigation. Therefore, unless the legislative instrument comes into existence on issue of Notification by the Central Government, on implementation of which, its civil or evil consequences reach the petitioner, no cause of action arises for initiating a lis. We are of the view that the essential functions which the Central Government exercises u/s 9A read with Rule 13 and Rule 18 of Anti Dumping Rules, 1995 are legislative in character. Since the imposition is authorised by law only on the basis of certain facts to be found to exist to reach a conclusion about dumping of article by exporters from foreign country or territory, and injury to the domestic industry. The functions of the Designated Authority remains of collecting information from different sources which include submissions of the interested parties engaged in the exportation, importation or manufactures and user of the article under investigation and by considering all the informations coming from all the sources, the findings are recorded to be transmitted to Central Government for its consideration in deciding whether to impose Anti Dumping Duty, and if so to what extent, in order to remove the injury to domestic industry or to eliminate the threat of retarding of establishing of domestic industry. Such findings are not reached by the Designated Authority in exercise of any legislative power vesting in it for the purpose of deciding any litigious contentions between the various interests or to adjudicate or decide upon rights of any party to lis. Therefore, until the legislative instrument comes into existence and the civil consequences thereof reaches the petitioner through its implementation, no cause of action can arise for which the petition can be maintained. Therefore, the comparative harm to the petitioner at this stage is negligible, than the harm that may be irretrievably caused if the proceedings before the Designated Authorities are thwarted at this stage. In our opinion challenge to that part of the cause of action at this juncture not only suffers from delay but in the facts and circumstances of the case, it is not the stage at which this court ought to exercise its discretion for enquiring into the validity of reaching the preliminary findings and imposition of Provisional Duty as it being subject to the final findings and imposition of the duty. If it is not so levied, the petitioner becomes entitled to the refund of Anti Dumping Duty already paid or recovered from him under the provisions of parent Act as well as the Rules framed thereunder. Therefore, neither the petitioner is under a continued injury nor it is advisable to express any opinion on the merit of the issue relating to initiation of proceedings and the determination of preliminary findings at this stage, lest it may affect the final findings too keeping in view that the last date for reaching final finding is shortly at hand, to be precise on 28-4-2005. Interfering with the ongoing proceedings at such a close quarter to its final leg, would irretrievably allow the current proceedings to lapse. But on the other hand, even if, the ultimate final findings supports imposition of Anti Dumping Duty and Central Government decides to impose such duty, the petitioner will not be remedy-less. He still will have a right to challenge the final findings and consequently Notification imposing Anti Dumping Duty founded thereon by way of appeal to CESTAT or approaching High Courts/Supreme Court, as the case may be. On no duty being ultimately levied or lesser duty is imposed, then too, the petitioner shall not suffer, as he will be entitled to claim refund of said sum as envisaged under Section 9BB. Therefore, we decline to go into the merits of challenge to the initiation of the proceedings and challenge to provisional Anti Dumping Duty. So far as the relief claimed by the petitioner which is indirectly aimed at preventing the Central Government from exercising its power, which is legislative in character, by quashing the proceedings before the Designated Authority which may otherwise be amenable to be reviewed in appeal if the Designated Authority records a finding recommending levy of Anti Dumping Duty until the Central Government finally decides to levy Anti Dumping Duty within three months of the publication of such final findings, no cause of action arises even to file an appeal for withholding the proceedings before the Designated Authority either by issue of a writ of prohibition, certiorari or mandamus. To summarise we hold that this court has territorial jurisdiction to entertain this petition and we decline to sustain the preliminary objection to entertain this petition on the ground of delay and laches. Demonstrably, the petitioner is an interested party and on this ground we hold that the petitioner has necessary locus standi to raise grievance about the matters relating to the findings recorded by the Designated Authority and the procedure adopted by him. We have not expressed any final opinion whether assumption or non-assumption of jurisdiction to initiate investigation by Designated Authority can provide a cause of action to challenge the same. But assuming it to be so, in our view so far as the subject-matter of the petition concerning challenge to initiation of investigation and the determination of preliminary findings resulting in imposition of Provisional Anti Dumping Duty, it is not a fit case for exercise of extra-ordinary jurisdiction at this stage of the proceedings before the Designated Authority. We further hold that the levy of Anti Dumping Duty is a legislative function to be exercised by Central Government and investigation by Designated Authority is in aid of said legislative function. Therefore, the cause of action to challenge the continued proceedings relating to investigation, which may ultimately lead to final findings and levy of Anti Dumping Duty, has not arisen so far to restrain the Designated Authority from continuing and completing the proceedings within the period of limitation. Accordingly, the petition fails and is hereby dismissed. No order as to costs.

Summary

Issues Involved:
1. Territorial jurisdiction of the High Court.
2. Locus standi of the petitioner.
3. Delay and laches in filing the petition.
4. Prematurity of the writ petition.
5. Nature of the investigation by the Designated Authority.
6. Whether the investigation was initiated in accordance with the law.
7. Right to a fresh oral hearing.

Summary:

Territorial Jurisdiction:
The court held that it has territorial jurisdiction to entertain the petition. The petitioner, an importer and user of the article under investigation, has its bonded warehouse in Rajasthan where the liability to pay customs duty arises when goods are removed from the bonded warehouse. Therefore, a part of the cause of action arises in Rajasthan.

Locus Standi:
The petitioner, as an importer and industrial user of the subject article, has the necessary locus standi to challenge the findings recorded by the Designated Authority and the procedure adopted by him. The petitioner is recognized as an "interested party" u/r 2(c) of the Anti Dumping Rules, 1995.

Delay and Laches:
The court overruled the objection of delay and laches, noting that the petition was triggered by the denial of a fresh oral hearing by the successor Designated Authority. The petition was filed within a reasonable time after the alleged procedural lapse.

Prematurity:
The court held that the petition is not premature as it challenges the preliminary findings and the imposition of provisional Anti Dumping Duty, which affects the petitioner. However, the court refrained from interfering at this stage, as the final findings were imminent, and the petitioner would have the opportunity to challenge the final findings and the Notification imposing Anti Dumping Duty, if issued.

Nature of the Investigation:
The court concluded that the investigation by the Designated Authority is not judicial or quasi-judicial but is in aid of the legislative function of the Central Government. The Designated Authority's role is to collect information and make recommendations, not to adjudicate rights. The imposition of Anti Dumping Duty is a legislative act, and the cause of action arises only when the Notification is issued and implemented.

Initiation of Investigation:
The court did not express a final opinion on whether the initiation of the investigation was valid but noted that the petitioner could have challenged it at the threshold. The court declined to interfere at this late stage, as the investigation was nearing completion.

Right to Fresh Oral Hearing:
The court did not delve into the merits of the contention regarding the right to a fresh oral hearing but allowed the petitioner to raise this issue if the occasion arises in the future.

Conclusion:
The petition was dismissed, with the court holding that it has territorial jurisdiction and that the petitioner has the necessary locus standi. The objections of delay and laches were overruled, but the court declined to interfere at this stage, noting that the cause of action to challenge the continued investigation had not yet arisen. The petitioner was allowed to raise all grounds in future proceedings if the final findings and Notification imposing Anti Dumping Duty are issued.