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TMI Blog2024 (11) TMI 417X X X X Extracts X X X X X X X X Extracts X X X X ..... duty during the period of review has to be imposed before the expiry of the period of five years, which is the life of the Notification imposing antidumping duty. Even otherwise, Notification dated January 23, 2014 amends the earlier Notification dated January 2, 2009, which is clear from its language, and has been reproduced above. However, when Notification dated January 2, 2009 itself had lapsed on the expiry of five years, i.e., on January 1, 2014, and was not in existence on January 23, 2014 question of amending a non- existing Notification does not arise at all. The demand of ADD for the period commencing on 08.12.2014 and ending on 31.08.2015 cannot be sustained. As regards the prior period (14.11.2014 to 07.12.2014), no break-up of either ADD liability or penalty has been provided. Therefore, interference with the impugned OIO in W.P. No.768 of 2018 is warranted. As regards the prior period (14.11.2014 to 7.12.2014), a conclusion can be drawn only after deciding on the other objections of the petitioner. Development Commissioner did not have jurisdiction to issue SCN I for the period July 2011 to August 2014 or SCN II for the period 14.11.2014 to 31.08.2015 - As regards jur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... detailed consideration of evidence. In the impugned OIOs, there is detailed consideration and analysis followed by conclusions. Hence, it is inappropriate to consider and determine this issue in exercise of summary and discretionary jurisdiction under Article 226 especially when a statutory remedy is prescribed. Since interim protection was granted when these writ petitions were filed and these cases were pending for about 7 years, it is just and necessary to grant leave to the petitioner to file a statutory appeal on merits within a specified time line. - Honourable Mr. Justice Senthilkumar Ramamoorthy For the Petitioner : Mr. Satish Parasaran, Sr. Advocate, assisted by Mr. Karthik Sundaram For the Respondents : ARL. Sundaresan, ASG assisted by Mr. A.P. Srinivas for R1, and Mr. B. Rabu Manohar for R2. COMMON ORDER FACTUAL BACKGROUND: By these writ petitions, the petitioner assails the Orders-in- Original (OIOs), both dated 30.12.2024 and issued by the first respondent, demanding Anti-Dumping Duty (ADD) of Rs. 146,72,95,243/- and Rs. 189,76,79,197/-, respectively, along with interest and penalty applicable thereto. 2. The petitioner-company, Huawei Telecommunications (India) Com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s from its purview components imported on a standalone basis. 4. Initially, the petitioner imported SDH equipment directly from Huawei, China. In respect thereof, ADD was demanded under the ADD Notification. The petitioner paid ADD of Rs. 52,15,09,653/- along with interest of Rs. 1,67,16,885 under protest for the period from September 2010 to December 2010 in April 2011. This continued until June 2011. From July 2011, the Flextronics SEZ unit imported goods described by the petitioner as stand-alone parts/components from Huawei, China. After being populated at the said SEZ unit, assembled PCBAs were purchased by the petitioner and entered the DTA under bills of entry after clearing the goods by paying customs duty. Show cause notices and preceding writ petitions: 5. Against this backdrop, Show Cause Notice dated 1.12.2014 (SCN-I) regarding levy of ADD for the period July, 2011 to August, 2014, Show Cause Notice dated 28.10.2015 (SCN-II) regarding levy of ADD for the period 14.11.2014 to 31.08.2015 and Show Cause Notice dated 15.7.2017 (SCN-III) regarding levy of ADD for the period i) 01.09.2015 to 7.12.2015; and ii) 26.4.2016 to 2.12.2016 were issued to the petitioner. Four writ pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the Development Commissioner, the Specified Officer, and the Authorized Officer of the SEZ were restrained from demanding ADD for the said period holding that the ADD Notification cannot be extended after it elapsed. The writ appeal (W.A. 1498/2018) preferred by the Principal Commissioner of Customs against the order dated 6.10.2017 in WP 22770/2017 was dismissed by holding that the validity of the ADD Notification cannot be extend after its expiry. As regards the prayer for refund made in WP 22771 of 2017, the petitioner was directed to pursue the application for refund before the authority. Current Proceedings: OIO No.689/2017 passed by the respondent and emanating from SCN-II has been stayed by interim order dated 11.1.2018 (WP No. 768/2018) SCN dated 15.7.2017 (SCN-III) 1) 1.9.2015 to 7.12.2015 2) 26.4.2016 to 2.12.2016 In the common order dated 6.10.2017 in W.P. 22770/2017 and W.P. 22771/2017, WP 22770 was allowed by setting aside the demand for the period from 1.09.2015 to 7.12.2015. Counsel and their contentions: Petitioner's Contentions: 6. Oral arguments on behalf of the petitioner were advanced by learned senior counsel, Mr. Satish Parasaran, assisted by Mr Karth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ustoms Act, he pointed out that the power of recovery can be exercised only by a customs officer and not by authorized officers under the SEZ Act. Since the Development Commissioner is not a proper officer of customs under section 2(34) of the Customs Act, he submitted that the issuance of SCNs was without jurisdiction. 10. His third contention was that the clearance of goods from an SEZ to the DTA is not an import either under section 2(o) of the Foreign Trade Development and Regulation Act, 1992 (the FTDRA) or under section 2(e) of the SEZ Act. Consequently, he contended that the Development Commissioner did not have the jurisdiction to issue the show cause notices under section 21(1) of the SEZ Act read with section 14(1) of the FTDRA. On both these jurisdictional grounds, he submitted that no findings were recorded by the Principal Commissioner in spite of this Court directing him to adjudicate on the question of jurisdiction by common order dated 02.12.2016 in W.P.Nos.22873 of 2014 and W.P.No.33904 of 2014. Other contentions including on merits 11. Learned senior counsel next submitted that stand-alone components are outside the scope of the ADD Notification. In spite of raisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y to the principles of natural justice as discussed by the Supreme Court in Oryx Fisheries (P) Ltd. v. UOI, 2011 (26) ELT 422 (SC) and Seimens Ltd v. State of Maharashtra, 2007 (207) ELT 168 (SC). iv) Kranti Associates Pvt Ltd v. Masood Ahmed Khan , 2011 (273) ELT 345 (SC) holds that the pretence of reasons or rubber-stamp reasons is not to be equated with a valid decision-making process v) A writ petition will lie where the proceedings initiated by a quasi-judicial authority are without authority: Harbanslal Sahnia and Anr v Indian Oil Corporation Ltd Ors (2003) 2 SCC 107 vi) A writ petition would lie where principles of natural justice were violated: Whirlpool Corporation v Registrar of Trademarks, Mumbai, (1988) 8 SCC 1 and UOI v. Tantia Construction Pvt. Ltd., (2011) 5 SCC 697 . vi) M/s. Raza Textiles Ltd, Rampur v The Income Tax Officer, Rampur, AIR 1973 SC 1362 lays down that a quasi-judicial authority cannot confer jurisdiction upon itself by determining a jurisdictional fact wrongly and that the question whether a jurisdictional fact has been rightly decided or not is a question for determination by the High Court. vii) The Development Commissioner is not a proper officer o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the ADD Notification and that disputed questions of fact are involved in adjudicating as to whether the imports by Flextronics SEZ are excluded from the purview of the ADD Notification. Consequently, he contended that this aspect can only be raised in statutory appeal and not under Article 226 of the Constitution. 19. In support of the contention regarding the availability of an alternative remedy to the petitioner, the respondents relied on the following precedents: i) M/s Siddhi Vinayak Syntex Pvt Ltd vs Union of India-2017(352) E.L.T. 455(Guj) ii) M/s Rational Business Corporation Pvt Ltd vs Union of India 2017 (346) E.L.T. 247 (P H); iii) M/s Srao International Fright system vs Commissioner of Customs, Chennai VIII 2016(334) E.L.T. 289(MAD); iv) M/s Viahsl Lubetech Corporation vs Additional Commissioner of Customs -2016(342) E.L.T. 201 (MAD); v) M/s British India Steam Navigational Company PVT Ltd vs Additional CC Calcutta 1999(110) E.L.T. 266(SC). Discussion, analysis and conclusion: ADD levy from 08.12.2014 to 31.8.2015 in the OIO challenged in W.P.No. 768 of 2018 20. The impugned OIO challenged in W.P. No. 768 of 2018 levies ADD from 14.11.2014 to 31.08.2015. The first i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, the ADD demanded in the show cause notice dated 28.10.2015, for the period from 08.12.2014 to 31.08.2015 has to be held to be without jurisdiction. Hence, the second issue is answered in favour of the petitioner. 21. While the matter was being heard by the Principal Commissioner, the above mentioned common order was issued. The order was also placed before the authority, and this fact is recorded in paragraph 33 of the impugned order at internal page 77 thereof. There is, however, nothing to indicate that the order was considered. In view thereof, the demand of ADD for the period commencing on 08.12.2014 and ending on 31.08.2015 cannot be sustained. Subsequently, by judgment dated 17.02.2022, the common order dated 06.10.2017 was affirmed in writ appeal. In the operative part of the order impugned in W.P. No.768 of 2018, a consolidated sum of Rs,146,72,95,243 was imposed as ADD for the period commencing on 14.11.2014 and ending on 31.08.2015. Out of this period, by virtue of the common order of this Court, the ADD claim could not have been made for for the period commencing on 08.12.2014 and ending on 31.08.2015. As regards the prior period (14.11.2014 to 07.12.2014), no break-u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r shall be heard by the jurisdictional Customs Officer. Thus the transfer of the files to the jurisdictional customs officer was by consensus between the rival parties. 23. Pursuant to the order of this Court, the Principal Commissioner of Customs examined whether the Development Commissioner had the jurisdiction to issue the show cause notice and recorded the following findings in the impugned OIO in W.P. No.769 of 2018. Identical findings were also recorded in the impugned OIO in W.P. No.768 of 2018: 36. I find that the Notice has been issued under Section 30 of the SEZ Act, 2005 inter alia the provisions of Foreign Trade Development Regulation Act (FTDR), and the Customs Act. The Special Economic Zone Act, 2005 (SEZ Act, 2005) and Special Economic Rules, 2006 (SEZ Rules, 2006) are independent Act/Rules incorporated exclusively for governing the Functions of SEZ Zones. Sub Section (a) of Section 30 of the SEZ Act, 2005 clearly provides for levy of ADD duty on the goods cleared from SEZ; and the demand has been issued under Section 30 of SEZ Act, 2005 in addition to the Customs Provisions; 37. I find that the SEZ Act and the Rules Provides from collection of applicable customs dut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thereto. Therefore, it has no bearing on the validity of the show cause notices. 26. I deal with the second contention on jurisdiction next. As a result of the amendment of Rule 47 of the SEZ Rules by the introduction of sub-rule (5), with effect from 05.08.2016, jurisdictional customs, central excise and other tax authorities were empowered to deal with refunds, demands, adjudications, etc. arising out of operations under the SEZ Act. By Circular No.11/2017-Cus, a clarification was provided with regard to the amendment. In respect of adjudication, it was stated therein as follows: All pending demands shall be adjudicated by the appropriate authority as prescribed under the Customs, Central Excise, Service Tax or GST laws and the rules made there under including demands issued prior to 05.08.2016 because the act of adjudication is prospective in nature. The conclusion that follows from the amendment and clarification thereto is that jurisdiction is vested in the jurisdictional officer of the customs, central excise, GST departments, as the case may be, to issue show cause notice and adjudicate refunds, demands, adjudications arising out of operations under the SEZ Act on or after ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ved from a SEZ into a DTA. 28. In sum, as regards jurisdiction, the SEZ Act clearly envisages the imposition of ADD on goods removed from a SEZ to a DTA. On and from 5.08.2016, the jurisdiction to issue show cause notices and adjudicate the matter has been vested in the jurisdictional customs officers. As the administrative head of the SEZ, who is empowered to take all steps to discharge his functions under the SEZ Act under section 12(1) of the SEZ Act, the Development Commissioner issued the show cause notices. Section 30 of the SEZ Act was in the statute when the show cause notices were issued. If the contention of the petitioner on jurisdiction were to be accepted, neither the Development Commissioner nor customs officers could have issued the show cause notices prior to 5.08.2016. This contention cannot be countenanced. Hence, all the jurisdictional objections are rejected and the findings in the impugned OIOs thereon are upheld. Issues regarding written submissions 29. The petitioner contended that interference with the impugned orders is called for because the written submissions of the respondents were not provided to the petitioner before the conclusion of proceedings and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with eventual broadband/ cellular equipment. Product under consideration will also include Ada Drop Multiplexers (ADM) (For SDH Application only), Multiple Add Drop Multiplexers (MADM) (For SDH Application only), and Digital Cross Connect (DXC) (For SDH Application only), Populated Circuit Boards (For SDH Application Only) and parts/components imported as a part of equipment, so long they are imported along with the equipment or its assemblies / sub-assemblies. The Product under consideration will also include Software meant for SDH, which is an integral part of these equipments, which may be bought either as a part of the equipment or separately. However components/ parts imported on a standalone basis are outside the purview of Product under Consideration. 31. From the above extracts, it is clear that the determination whether the relevant goods were stand-alone components or SDH equipment in some form is a determination involving disputed questions of fact. Likewise, the determination as to whether ADD was imposed because the business model of the petitioner involved circumvention of the ADD Notification would also involve detailed examination of disputed questions of fact. Such ..... X X X X Extracts X X X X X X X X Extracts X X X X
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