2012 (10) TMI 761 - HC - Customs

Imposition of anti dumping duty on import of Diethyl Thio Phosphoryl Chloride - Personal hearing - natural justice previous Designated Authority was changed Held that - Newly appointed Designated Authority cannot rely on in the hearing given by the previous officer holding the position of Designated Authority - since public hearing was granted by one Officer and the Final Findings were submitted by the another person, the entire procedure was in violation of the principles of natural justice. - In the result, by allowing this petition, the Final Findings dated 6th May 2010 issued by the Designated Authority and the Notification dated 7th July 2010 issued by the Union of India on the basis of such final findings, are set aside.

Summary

Issues Involved:
1. Legality of the procedure followed by the Designated Authority in anti-dumping investigation.
2. Requirement of personal hearing by the newly appointed Designated Authority.
3. Availability of alternative remedy and its impact on the maintainability of the writ petition.
4. Prejudice caused due to the alleged breach of principles of natural justice.

Detailed Analysis:

1. Legality of the Procedure Followed by the Designated Authority:
The petitioners challenged the orders and notifications issued by the Designated Authority under the Customs Tariff (Identification, Assessment & Collection of Anti-Dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995, alleging that the procedure followed was illegal. The Designated Authority initiated an investigation into the dumping of Diethyl Thio Phosphoryl Chloride from China and issued preliminary findings recommending the imposition of provisional anti-dumping duty. The petitioners contested this, leading to a series of legal proceedings, including a judgment by the Gujarat High Court and subsequent appeals to the Supreme Court.

2. Requirement of Personal Hearing by the Newly Appointed Designated Authority:
The crux of the petitioners' argument was that the newly appointed Designated Authority did not grant them a fresh personal hearing after the previous Designated Authority had conducted all prior proceedings. The petitioners cited Rule 6(6) of the Rules and the Supreme Court's decision in Automotive Tyre Manufacturers' Association v. Designated Authority, which emphasized the necessity of personal hearings in quasi-judicial functions. The court noted that the new Designated Authority relied on the materials and notings of the predecessor without granting a fresh hearing, thus violating the principles of natural justice.

3. Availability of Alternative Remedy and Its Impact on the Maintainability of the Writ Petition:
The respondents argued that the petitioners had an alternative remedy available before the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) and that the writ petition should not be entertained. However, the court referenced the Supreme Court's decision in Whirlpool Corporation v. Registrar of Trade Marks, which allows writ petitions to be entertained despite alternative remedies in cases of violation of fundamental rights, breach of natural justice, or lack of jurisdiction. The court concluded that the breach of natural justice in this case justified the maintainability of the writ petition.

4. Prejudice Caused Due to the Alleged Breach of Principles of Natural Justice:
The respondents contended that the petitioners needed to demonstrate actual prejudice caused by the lack of a fresh hearing. The court, however, noted that the petitioners had pointed out several omissions and lacunae in the Disclosure Statement and had consistently demanded a fresh hearing. The court found that the petitioners had suffered prejudice due to the breach of natural justice, as their contentions were not adequately considered by the newly appointed Designated Authority.

Judgment:
The court concluded that the procedure followed by the newly appointed Designated Authority violated the principles of natural justice, as established in the Automotive Tyre Manufacturers' Association case. Consequently, the court set aside the Final Findings dated 6th May 2010 and the Notification dated 7th July 2010 imposing anti-dumping duty. The court clarified that the preliminary findings and the notification issued pursuant to such preliminary findings were not disturbed, as they were still under consideration by the Supreme Court. The court also left the question of refund of duty already collected to be decided by the competent authority in accordance with law.

Stay of Judgment:
The court stayed its judgment until 10th July 2011 to allow the Union of India to approach the Supreme Court.