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TMI Blog2005 (4) TMI 76X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is. 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 proceedi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. - HON'BLE RAJESH BALIA AND DINESH MAHESHWARI, JJ. For the Appellant : S. Ganesh, Sr. Adv., Rajendra Mehta and Arun Bhansali, Advs. For the Respondent : Mohan Parasaran, Addl. Solicitor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed dumping of NTCF by exporters from China PR. The exporters also filed objections to initiation of anti dumping investigation itself. The ASFI representing the domestic industry of NTCF manufacturers also made its submission. 6. Notwithstanding submission of the detailed objections by ATMA as well as by the exporters as to maintainability of the application, it is alleged by the petitioner that Designated Authority neither called for any information from ASFI nor from ATMA nor from the exporters of the article subject of investigation to India. It was also alleged that Designated Authority did not supply any material/data on which reliance has been placed by the domestic industry and which in the submission of the petitioner was in public domain. No confidentiality could be claimed about it. 7. The petitioner also brought to the notice that applicant ASFI had previously also filed an application before the Designated Authority praying for imposition of Anti Dumping Duty on the alleged imports of the very same article viz. NTCF from Indonesia, Korea, Thailand and Taiwan. On finding causal connection between the exports from the named countries to India with injury to domestic indus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h of this Notification. Any other interested party may also make known its views within forty days from the date of publication of these findings. (c) The Authority would provide opportunity to all interested parties for oral submissions. (d) The Authority would disclose essential facts before announcing the final findings. 12. After the preliminary findings were notified comments/objections were invited from all interested parties. 13. From the procedure adopted by the Designated Authority, as it appears from the material on record, oral hearing was held on 1st September, 2004 before Shri Abhijit Sen Gupta, then the Designated Authority. A complaint was made vide letter dated 3-9-2004 that request for inspection of public file to enable them to file effective reply was made. However, the approval of Designated Authority was not received until then. By reiterating their earlier submission made before the Designated Authority, a number of objections to preliminary finding were submitted. After oral hearing took place on 1-9-2004, on 10-9-2004 the written submissions were submitted on behalf of one of the exporters M/s. Ningbo Nylon Company Ltd., China and Automotive Tyre Manufacture ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deration of a Designated Authority which would form the basis of final findings. It was clarified that the reproduction of facts thereunder is neither acceptance nor rejection of any fact/argument, and that most of the issues brought out in the preliminary findings were not repeated for the sake of brevity. 21. Apart from this, significantly it was stated in the letter that Arguments raised by interested parties after the Notification of the preliminary findings and thereafter at the time of oral hearing are reflected in this Disclosure Statement to the extent they are considered relevant to this investigation. 22. It was also clarified that notwithstanding all facts given in this disclosure (including facts given on a confidential basis), the Designated Authority would consider all replies given, on merits in order to arrive at a final determination. 23. It further invited comments from all interested parties by 24th January, 2005 pointing out that the anti-dumping investigations are time bound and no request for extension of time shall be entertained. 24.It is stated by the petitioner that vide letter dated 17-1-2005, it was urged before the Designated Authority that several basi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h oral hearing, the present petition was filed on 24th January, 2005 making the following prayers : A. Issue a writ of Certiorari or in the nature thereof or any other Writ, Order or Direction, quashing and setting aside the investigation proceedings for imposition of Antidumping duty on NTCF originating in or exported from China P.R., initiated at the behest of Respondent No. 4. B. Issue a writ or Certiorari or in the nature thereof or any other Writ, Order or Direction, quashing and setting aside Preliminary Findings dated 30-6-2004 (Annex. P-4) issued by Respondent No. 3 recommending imposition of provisional Anti-dumping duties; C. Issue a writ of Certiorari or in the nature thereof or any other Writ, Order or Direction, quashing and setting aside the Notification dated 26-7-2004 bearing No. 72.2004-Custom (Annexure P-4A) issued by respondent No. 2 notifying Anti dumping duty on NTCF originating in or exported from China P.R. into India; D. Issue a writ of Certiorari or in the nature thereof or any other Writ, Order or Direction, quashing and setting aside the Disclosure Statement dated 12-1-2005 (Annexure P-11); 28. Two separate replies have been submitted to the writ petition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ods are permitted to be removed. The petitioners are licensed to have such bonded warehouse at its factory at Kankroli since 1977 and the license for the appointed warehouse at Kankroli has been renewed upto year 2005. Such licence has been issued by Assistant Commissioner, Central Excise, Udaipur within the State of Rajasthan. Relevant material about these facts have been placed on record. Contentions about territorial jurisdiction : 30. The respondents have submitted firstly that this Court has no territorial jurisdiction to entertain this petition because no part of cause of action relating to lis, subject matter of these proceedings arose or arises in the territory of Rajasthan. The investigation has taken place at Delhi. The goods are imported from China. The import takes place at the point when goods enter the territorial waters of India or at best are unloaded where the land territory of India commences. The Company has its registered office at Calcutta. All these facts have taken place out of Rajasthan State. Therefore, merely because the petitioner has a factory premises at Kankroli within the State of Rajasthan and it carries on its business of manufacture and sale of tyr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so. It was also urged that petitioner as an industrial user is also a necessary party to proceedings relating to finding about injury to domestic industry and causal linked in the dumping and such injury. The injury which the petitioner is likely to suffer as a result of dumping also arises in Rajasthan. Since, essential part of investigation is to determine the fact of injury to domestic industry likely to be caused on account of import and causal connection between the two forms a part of cause of action, the petitioner has rightly invoked the jurisdiction of this Court. Conclusion : 32. We have given our careful consideration to the rival contentions and are of the opinion that the preliminary objection on the basis of territorial jurisdiction cannot be sustained in the facts of the present case. 33. Under Section 12 of the Customs Act of 1962, all custom duties are levied at such rate as has been specified under the Customs Tariff Act, 1975 which has replaced Indian Tariff Act, 1934 or any other law for the time being in force on goods imported into or exported from India. Section 12 makes importing or exporting of goods itself a taxing event and the liability to pay the duty o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Thus, clearly the machinery provision for quantification and calculation of Duty shall become operative when the bill of entry is presented before Competent Authority while seeking permission to remove goods from the bonded warehouse under proper authorisation or is otherwise deemed to be improperly removed under Section 72. Therefore, in the case where imported goods are removed without payment of Duty to a bonded warehouse, the place where such warehouse is situated, the liability to pay the tax would arise and levy shall be at the place where bonded warehouse is situated, from where the goods are to be removed. 38. In M/s. Priyanka Overseas (Pvt) Ltd. v. UOI [1991(51) E.L.T. 185 (S.C.) = AIR 1991 SC 583], it has been laid down that the rate has to be determined on the basis of rate applicable on date on which the goods are actually removed from the warehouse. 39. The facts of the case and the ratio laid down by the Supreme Court clearly establishes that Section 15(1)(b) read with Section 68 is an integral part of the process of determining the liability to be discharged by the assessee where the goods are removed to the bonded warehouse without payment of duty. Therefore in a ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... action will consist of export, which emanates from a foreign country, import in India and the injury to domestic country. Such injury is measured in terms of injury to manufacturers of similar article in India and to the industrial users of article under investigation. This position of necessity interests to be heard as affected parties is apparent from definition of interested parties in Rule 2(c) and mandatory requirement to offer opportunity to industrial users and/or to representative consumer organisation where article is commodity ordinarily sold at retail level under Rule 6(5) of the Rules of 1955. 43. Therefore, part of cause of action to be investigated arises (i) at place from where export to India takes place from a foreign country or territory; (ii) at place where import in Indian territory takes place; and (iii) at a place where injury to domestic industry is caused viz. where like articles as under investigation are manufactured in India and/or at a place where the article under investigation is put to industrial use. This is apart from the place where investigation is initiated and proceeded with. 44. Applying the aforesaid test, if we look at the facts of the prese ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it is trite to say that a legislation is not confined to a statute enacted by Parliament or the legislature of a State, it would include delegated legislation and subordinate legislation or an executive order made by the Union of India, State or any other statutory authority. For determining the question of territorial jurisdiction in such cases, the test laid down by the Supreme Court in following terms :- A parliamentary legislation when it receives the assent of the President of India and is published in the official gazette, unless specifically excluded, will apply to the entire territory of India. A passing of a legislation gives rise to a cause of action, a writ petition questioning the constitutionality thereof can be filed in any High Court of the country. It is not so done because a cause of action will arise only when the provisions of the Act or some of them which were implemented shall give rise to civil or evil consequences to the petitioner. Article 265 ordains that no tax shall be levied and collected except by authority of law. 53. It is well settled that the expression 'law' in the context of Article 265 means an Act of legislature. . While imposition has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted at Kankroli were placed on record. The petitioner has asked for quashing of Notification dated 26-7-2004 also. 58. In view of the above position, it cannot be said that any part of cause of action relating to lis in the writ petition did not arise in Rajasthan. 59. Both the part of causes arising in Rajasthan have direct nexus to the lis which is being proceeded with and are relevant for determining territorial jurisdiction of Court. 60. We have reached above conclusion about place where part of cause of action arises relating to befalling of injury resulting from import of article under investigation and the place of invoking machinery provision for assessing and recovering duty under the statutory provision covers within the territory of State of Rajasthan. We have no hesitation in coming to the conclusion that this Court has territorial jurisdiction to entertain the petition challenging the validity of proceedings under Rules of 1995, without prejudice to end conclusions that may be reached on the merit of other contentions raised in this petition. The preliminary objection as to want of territorial jurisdiction of Rajasthan High Court to entertain the present writ petition, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ef in the ground of locus. 66. We may notice that Rule 2(c) of the Rules of 1995 define the term interested party which reads as under : Rule 2(c) interested party includes :- (i) an exporter or a foreign producer or the importer of an article subject to investigation for being dumped in India, or a trader or business association a majority of the members of which are producers, exporters or importers of such an article; (ii) the Government of the exporting country; and (iii) a producer of the like article in India or a trade and business association a majority of the members of which produce the like article in India;.... 67. Apparently, an importer of the subject article as well as an association of importers of subject article, apart from the exporter, foreign producer, domestic producer and manufacturer or association of manufacturers of subject article has been specifically recognised as a person interested. There is no dispute about the fact that the petitioner is an importer of subject article. He has been statutorily recognised as interested party to investigation. His locus, therefore, cannot be doubted, in a lis relating to investigation under Rules of 1995. 68. The fact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... liminary objection as to lack of locus of the petitioner is overruled. Delay and Laches : 73. The respondents have contended that the petition is grossly belated. The petitioner challenges the initiation of investigation because condition precedents for initiation of investigation under Rule 5 of the Rules of 1995 have not been complied with. Specifically, it has been urged that conditions precedent under sub-rule (3) which has been couched in negative expression viz. the Designated Authority shall not initiate investigation pursuant to a complaint under sub-rule (1) unless......... Therefore, the condition prescribed must exist before assumption of jurisdiction by the Designated Authority to initiate proceedings. The proceedings were initiated in October, 2003. 74. Coming to other ground of challenge to publication of preliminary findings on 30th June, 2004 in furtherance of which Notification imposing provisional Anti Dumping Duty was issued on 26-7-2004. 75. The petition has been submitted on 24-1-2005 more than one year after initiation of proceedings and 6 months after publication of preliminary finding. At the time of commencement of hearing 9 months, maximum period upto whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mping of the commodity in India by the exporters and results in material injury to the domestic industry and it recommends the rate of anti-dumping duty which would remove the injury to the domestic industry, still no liability can arise until the Central Government accepts the recommendation with or without modification and the imposing duty Notification is published. It was urged by the learned counsel for the respondents that the findings recorded by the Designated Authority are recommendatory in nature and not binding on the Central Government. It is within the Central Government ultimately to act or not to act on such findings and recommendations. In this connection, it is further submitted that after the Central Government issues Notification levying Anti Dumping Duty, aggrieved interested party may avail the remedy of appeal to CESTAT wherein all the findings are open to be reviewed both on procedural as well as substantive aspect. 81. On this premise, it was urged that the petition is pre mature as no present cause of grievance arises for the petitioner and ultimately if the Designated Authority finds it to be a case of dumping needing imposition of anti dumping duties, and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the stage of preliminary findings is a matter of discretion to be exercised by the Court in the totality of the facts and circumstances of the case and considering comprehensively the attending circumstances. In the Rajasthan Textile Association Case, the Court has declined to interfere in the matter. Therefore, the present petition cannot be said to be pre mature as the preliminary findings and the levy of provisional Anti Dumping Duty is also the subject matter of challenge in the petition. Secondly, because the petitioner is challenging the very validity of proceedings which are pursued by the Designated Authority inter alia on the ground that it suffers from violation of fundamental and mandatory requirement of Rules 1995 which vitiates the whole enquiry and it cannot be allowed to be continued and completed, with such obvious breaches of statutory provisions which vitiates the entire proceedings. Its continuance will be in derogation of principles of fair procedure. It was also urged that the very initiation of enquiry is void because of non compliance of conditions precedent required to be fulfilled before initiation of investigation under Rule 5 of the Rules 1995. Theref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly required to be followed with written submission about such oral information. In the absence of subsequent written submission, the information submitted orally cannot be taken into consideration. Conclusion : 85. The question whether the petition is pre mature is integrally linked with the question whether a cause of action has arisen for the petitioners to challenge the preliminary findings, Notification imposing Provisional Duty and whether the oral hearing is necessary part of the procedure to be followed by the Designated Authority in the manner in which it is urged by the learned counsel for the petitioner, are questions which cannot be considered in isolation. Therefore, we propose to consider these questions together. 86. This will necessitate to view the nature of function that is discharged by the Designated Authority, the nature of proceedings before the Designated Authority and also the nature of levy of Anti Dumping Duty and the scheme unfolded in the Act of 1975 and Rules 1995 laying down the procedure which the Designated Authority during investigation has to adhere to before the duty can be imposed in terms of Section 9A of the Custom Tariff Act, 1975. Scheme of pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... developed nations and economist favouring barrier free trade, seek advice of Adam Smith in his celebrated work The Wealth of Nations that 'never attempt to make at home what it will cost more to make than to buy.' This advise has been refined to contend that 'if foreign country can supply us with commodity cheaper than we ourselves can make it, better buy it from them which some part of the produce of our own industry, employed in a way in which we have some advantage.' This argument is marketed as theory of comparative advantage. Even the most ardent votaries of free trade founded on market economic principles do not favour unfair trade. Subsidising home product and dumping imports in buyer territory are recognised by most as unfair trade which hurt competitive market which is considered essential bedrock of free trade. 92. During the Tokyo run of multi-national Trade Deliberations at Geneva from 1973 to 1979, all measures to counter unfair trade through subsidies, and countervailing measures and Anti Dumping Rules were drafted laying down the detail rules to provide unification and certainty in the implementation of article VI of the GATT. India was signatory to b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Anti Dumping Duty that it has determined what is the margin on dumping in relation to such article. This is so, because margin of dumping provides maximum ceiling of the rate at which duty can be imposed without this bench mark being before the Central Government, the power cannot be exercised. Thus, the determination of export price, normal price and the margin of dumping prior to the Central Government exercises its authority have to be determined. 95. Significantly, the determination of these essentials have not been left to the subjective satisfaction of the Central Government but it has to be determined by an independent agency. It has taken care to define what is meant by export price, normal price and margin of dumping which provides that Central Government may pending the determination in accordance with the provisions of Section 9A and the Rules made thereunder of the normal value and the margin of dumping in relation to any article, impose on the importation of such article into India an anti-dumping duty on the basis of a provisional estimate of such value and margin and if such anti-dumping duty exceeds the margin so determined, it also obligates the Central Governm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rned. Section 9B which was inserted along with 9A imposes certain restrictions and enables the Central Government to grant certain exemptions in the matter of countervailing duties under Section 9 and Anti Dumping Duty under Section 9A. Section 9C is in consonance with article 13 of the GATT 1994 in providing an appeal against the order of determination or review thereof regarding the existence, degree and effect of any subsidies or dumping in relation to import of any article lies to the Customs and Excise Service Tax Appellate Tribunal constituted under Section 129 of the Customs Act. It also provides for the limitation and the procedure for filing and hearing of such appeal. It provides for Constitution of Special Bench presided over by the President of the Appellate Tribunal and that the Bench shall consist of the President and not less than two members which shall include one judicial member and one technical member. 96. Thus, a specialised Bench of Tribunal well equipped with the legal acumen and technical expertise of the experienced Presiding Officer is to hear the appeal against the determination made for the purpose of levy of Anti Dumping Duty. 97. The scheme of Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relative methodology to achieve that object delineated under the Rules of 1995. 100. Rule 3 of the Rules of 1995 envisages appointment of the Designated Authority for the purpose of the determination of facts necessary to find whether there is dumping and if so, what is the margin of dumping and it provides that the Central Government may provide to the Designated Authority, the services of such persons and such other facilities as it deems fits. 101. Thus, the function to find facts, both as a preliminary finding or final finding relevant for imposition of Anti Dumping Duty is vested in the Designated Authority who is not below the rank of the Joint Secretary to the Government of India and does not envisage it to be a body of persons or a multi personnel Tribunal, though in order to assist the Designated Authority, the Central Government is to provide the services of other persons as are necessary for the purpose of carrying on investigation and other facilities as may be required to hold the investigation expeditiously and in accordance with the procedure stated in that rules. 102. Rule 4 gives the framework of the duties assigned to the Designated Authority which are : (a) to i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... toms appointed under the Customs Act, 1962 or from any other source that sufficient evidence exists as to the existence of circumstances referred to in clause (b) of sub-rule (3). 107. The sub-rule (3) envisages that Designated Authority does not initiate an investigation in pursuance to an application made under sub-rule (1) without application of mind to the information submitted by the applicant in the parameters of certain norms envisaged under the sub-rule (1). It envisages that if the application has been made by or on behalf of the domestic industry who does not aggregate in total for 25% or more of the total production of the like article, no investigation can be initiated on the basis of complaint made by the domestic industry representing less than 25% of the total production of the article in question. It has further to examine before initiating investigation the fact of dumping, injury where applicable; and where applicable, a causal link between such dumped imports and the alleged injury, to justify the initiation of an investigation. 108. For the present purposes, Rule 6, Rule 12, Rule 13, 14, 16, 17 and 18 are relevant. 109. Rule 6 lays down the principle governing i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hority to record preliminary findings and issue a public notice of it. While for Designated Authority it is a step forward towards concluding the inquiry by recording final findings, it operates for the Central Government an objective material which may lead it to exercise its power to impose Provisional Duty. However, imposition of Provisional Duty is not the part of investigation to be conducted or procedure to be followed by the Designated Authority. For him it is stage for inviting comments and views of those interests which have come forward on such preliminary findings. Rule 14 and 15 concerns the contingencies in which the Designated Authority can terminate the proceedings before reaching final findings. Such contingencies include appropriate voluntary undertaking from exporters to eliminate the margin of dumping by revising prices. 116. Having collected information from all sources and taking views and comments of all interests appearing before it, the Designated Authority has to determine within one year of initiation of investigation, extendable up to 18 months, whether or not the article under investigation is being dumped in India and submit to the Central Government it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... remedies available against the legislative acts. 124. As early as in Province of Bombay v. Kusaldas S. Advani Ors. - 1950 SCR 621, the Supreme Court laid down the principle that the writ of prohibition will lie only against the judicial or quasi judicial proceedings and not against the action of legislative or executive. 125.In Radheshyam Khare Anr. v. The State of Madhya Pradesh Ors. - AIR 1959 SC 107, the Court said that : The law is now well settled that a writ of certiorari will lie to control such a statutory body if it purports to act without jurisdiction or in excess of it or in violation of the principles of natural justice, or commits any error apparent on the face of the records, provided that, on a true construction of the statute creating such body, it can be said to be a quasi-judicial body entrusted with quasi-judicial functions. It is equally well settled that certiorari will not lie to correct the errors of a statutory body which is entrusted with purely administrative functions. 126. In State of Andhra Pradesh Anr. v. T. Gopalkrishnan Murthi Ors. - (1976) 2 SCC 883, the question arose in connection with the framing of Rules under clause (2) of article 229 of the Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ublic authority, executive, administrative and local bodies or any person who is under a duty imposed by the Statute or by common law to do a particular act. If that person or authority refrains from doing the acts or refrains, from wrong motives, from exercising the power which it is his duty to exercise, the court will by order of mandamus order to do what he should do. 130. On the other hand, broadly speaking the difference between writ of certiorari and writ of prohibition lies in the stage at which they can be commanded, object being to control judicial or quasi judicial bodies. The object for which the prohibition and certiorari can be issued and the difference between the two was succinctly pointed out by the Apex Court in Hari Vishnu Kamath v. Ahmad Ishaque Ors. - AIR 1955 SC 233. 131. We may notice here also that the Supreme Court decision in Calcutta Discount Co. Ltd. v. Income-tax Officer - AIR 1961 SC 372 explained under what circumstances, a prohibition lies against the administrative authority. It was a case where the Court held that where condition precedent for issuing notice under Section 34 of IT Act, 1922 (corresponding to Section 148 of IT Act, 1961) do not exis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thorising levy of Anti Dumping Duty under Section 9A, authorised the Central Government by publishing a Notification in the official gazette to impose Anti Dumping duty not exceeding the margin of dumping in relation to such article. 137. The power to impose such duty is not conferred on subjective satisfaction of the Central Government but the power is controlled by existence of certain rational founded facts. 138. Before exercising such power it has to be determined that an article is being exported from any foreign country or territory referred to India at less than its normal value and charging of such less price has casual link with material injury caused to domestic industry. Then alone upon the importation of such articles to India, the Central Government may by Notification in the official gazette impose an Anti Dumping Duty not exceeding the margin of dumping in relation to such article. 139. Anti-dumping Duty is in the nature of a tax imposed on determining the existence of certain facts with an object to protect the domestic industry against injury that may be caused to it because of unfair trade practice of exporters from the foreign country in selling their products at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from not issuing a Notification to impose Anti Dumping Duty which it has been authorised under Section 9A of the Act of 1975. 142. The nature of delegation legislation as is contemplated u/s 9A squarely falls in the category of conditional delegation of legislative function which depends not on subjective satisfaction of the delegate but depends on objective facts to be reached before the power can be exercised. As per the principle enunciated in State of T.N. v. K. Subanayagan - AIR 1998 SC 344, the Notification when issued falls in the third category of conditional delegated legislation. 143. However, the purpose of investigation is to find facts objectively for laying foundation for imposing Duty which shall be effective in future and not to adjudicate some existing dispute about past acts, the Designated Authority's function also falls in the category of quasi legislative and not administrative. The distinction was tersely stated by Schwartz in his Administrative Law quoting Scalia, J. from (1988) US 217 in Bowen v. Georgetown University Hospital : a Rule is statement that has legal consequence only for the future and adjudication deals with what the law was, rule making d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... namely the interest of the exporter at less than the normal value at which the article in question is exported to India, and the right of importers to import such goods at that price on one side as players in a barrier free trade, and on the other hand stands interests of domestic industry who are manufacturers of the like product in India who petition that their interests are likely to be injured by the activity of the exports which falls within the precincts of dumping and industrial users or representative consumer organisation. Therefore, the nature of investigation contemplated under Rules of 1995 is quasi judicial. Hence, the petitioner can challenge the initiation of proceedings if it was not warranted under the provisions or can challenge at any time so far relief against the continuance of proceedings which are being conducted in breach of principles of natural justice. 150. Our attention is drawn to the elaborate procedure under the Rules with particular emphasis to Rules 5 and 6 of the Rules of 1995 which we have noticed above in detail. To focus consideration relevant part of Rule 5 and 6 are reproduced herein below :- 5. Initiation of Investigation.- (1) Except as pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an investigation. 6 Principles governing. investigation. - (1) The Designated Authority shall, after it has decided to initiate investigation to determine the existence, degree and effect of any alleged dumping of any article, issue a public notice, notifying its decision and such public notice shall, inter alia, contain adequate information on the following :- (i) the name of the exporting country and the article involved; (ii) the date of initiation of the investigation; (iii) the basis on which dumping is alleged in the application; (iv) a summary of the factors on which the allegation of injury is based; (v) the address to which representations by interested parties should be directed; and (vi) the time limits allowed to interested parties for making their views known. (2) A copy of the public notice shall be forwarded by the Designated Authority to the known exporters of the article alleged to have been dumped. The Governments of the exporting countries concerned and other interested parties. (3) The Designated Authority shall also provide a copy of the application referred to in sub-rule (1) of Rules 5 to - (i) the known exporters or to the concerned trade association where ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... domestic market; and (4) a causal link between such terms imports and alleged injury. 152. It also provides under proviso to Rule 5(3) that no notice of such complaint can be taken note of if the domestic producers expressly supporting the application account for less than 25% of the total production of the like article by the domestic industry and the Designated Authority further examines the accuracy and adequacy of the evidence provided in the application and satisfies itself that there is a sufficient evidence regarding; (1) dumping; (2) injury where applicable; and (3) where applicable causal link between such dumped imports and the alleged injury to justify initiation of investigation. 153. This provision, the petitioner contends, makes it imperative firstly; that the applicants do make an application in specified form supported by evidence, relied on by them and secondly to place before the Designated Authority material that the application is supported by that portion of domestic producers who account for 25% or for more than 25% of the total production of the like article by the domestic industry. Thereafter, it is for the Designated Authority to objectively apply its mind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the establishment of any industry in India; (iii) a causal link, where applicable, between the dumped imports and injury; (iv) whether a retrospective levy is called for and if so, the reasons therefor and date of commencement of such retrospective levy : Provided that the Central Government may, (in its discretion in special circumstances) extend further the aforesaid period of one year by six months: Provided further that in those cases where the Designated Authority has suspended the investigation on the acceptance of a price undertaking as provided in rule 15 and subsequently resumes the same on violation of the terms of the said undertaking, the period for which investigation was kept under suspension shall not be taken into account while calculating the period of said one year. (b) recommending the amount of duty which, if levied, would remove the injury where applicable, to the domestic industry. 157. According to the petitioner the elaborate procedure to be followed by the Designated Authority for reaching objective findings in respect of facts required for laying foundation for the Central Government to exercise its power of imposing Anti Dumping Duty, by issuing a Notific ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ediately springs into action and strike down such State action. In fact, the concept of reasonableness and non arbitrariness pervades the entire constitutional scheme and is a golden thread which runs through the whole of the fabric of the constitution. 160. However, the test of arbitrariness and reasonableness is neither like Proverbial Chancellor's foot nor like an unruly horse. It has to be discerned in the context of nature of the public duty to be performed, the object of legislation and purpose of inquiry to be carried, and the effect it has on the interest sought to be protected. This makes it relevant to consider the nature of action impugned and effect emanating therefrom on the interest sought to be protected, which includes consideration of appropriate time of considering the challenge. 161. Fundamental principle which have been applied to different fact situations making out distinction between judicial and quasi judicial acts on the one hand and administrative action on the other while inquiring into challenge to any State action while testing it on the scale of judicial scrutiny may be viewed in brief. 162. May, C.J. in the Irish v. Get - 1878 LR (2) IR 571 observ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns of the Act. The question was whether the order of the Minister was quasi judicial act or a purely administrative one. The provisions of the Act under which the order was made, prescribed certain methods or steps to be taken in discharge of that duty. Before making the draft order, the Minister was to have made elaborate enquiry into the matter and have consulted any local authority who appear to him to be concerned, and with the other departments of the Government. The Minister was required to satisfy himself that it was a sound scheme before he took serious step of issuing a draft order, for the purpose of inviting objections and wherever they are not withdrawn, of having of public enquiry to be held by someone other than the respondent to whom they present reports was for the further information of the respondent final consideration of the soundness of the scheme. Lord Thanterdan opined : I am of the opinion that no judicial duty is laid on the respondents in discharge of these statutory duties and only question is whether he has complied with statutory directions to combine an apposite person to hold the public enquiry and to consider that person's report. 167. Apart from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cation of that lis in accordance with the principle of normal adjudication must result in determination or adjudication of rights of rival parties. On the other hand, if the entire proceedings, though required to be elaborately conducted under the provisions of the Statute does not adjudicate any lis between the two parties or adjudication upon the rights of any of them, but are only for the purpose of laying foundation for the final decision making authority who has to take into consideration, the findings reached through such enquiry in aid of legislative function, and then to decide act or not to act upon it. 171. The subject squarely fall within the precincts of ratio laid in Franklin's case (supra) - (1948) A.C. 87 and this distinction between adjudication and non adjudicatory function has been approved by the Apex Court in Kusaldas S. Advani (supra) - (1950) SCR 621. This distinction does not appear to have so far been obliterated or clouded. 172. If in the light of the aforesaid distinction, we examine the whole gamut of the scheme of imposition of Anti Dumping Duty, the following aspects become clear :- 173. Under Section 9A of the Act of 1975 the levy of Anti Dumping D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arriving at these conceptional values and methodology of objective estimation of such value estimates, which emanate from the statute itself. 181. A comparison of the agreement reached on implementation of article IV of the GATT, 1994 and the Rules of 1995 framed by the Central Government would reveal that the anti dumping rules 1995 have been framed broadly in consonance with the obligations arising under GATT, 1994 which was aimed primarily to minimise and restrict anti-dumping duties which are generally considered as an obstruction to free trade. 182. Be that as it may, it is not the province of the present enquiry to go into the details of the comparison and to what extent the provisions of Rules of 1995 are in line with the GATT, 1994. But it is relevant to notice that article (1) of the GATT, 1994 bares the principle that the provisions made in the succeeding articles are to govern application of Article VI of GATT, 1994 in so far as action is taken under the anti dumping duties. 183. We shall presently notice that merely finding by the Designated Authority the facts leading to conclusion that a case of dumping and specific injury in domestic industry is made out by itself, d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 186. The expression used under Rule 13 enabling the Central Government to exercise its power of imposing a Provisional Duty is couched in enabling manner as the expression 'may' has been used, communicating that issue of a public notice on preliminary finding by the Designated Authority does not mean necessarily that the Central Government shall impose a Provisional Duty as a matter of course. It operates as a safeguard against subjective imposition of Provisional Duty envisaged in sub-section (2) of Section 9A read with the rules and ensure that no such Provisional Duty can be imposed before the expiry of 60 days from the date of public notice issued by the Designated Authority regarding its decision to investigate which itself is founded on due application of his mind to matters detailed in Rule 5. It also ensures that the imposition of Provisional Duty may not continue indefinitely to render the investigation an empty formality by ordaining that the Provisional Duty can remain in force only for a period of 6 months in the first instance but which may upon request of the exporters representing the percentage of the trade involved be extended by the Central Government ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has an agreement of most favoured nation, etc. 190. The Central Government is also not to levy such duty if the Government of country from which the export of subject commodity originates, gives a satisfactory voluntary undertaking agreeing to eliminate or limit the subsidy or take other measures concerning its effect, or the exporters agree to revise the price of the article, which satisfies the Central Government that it will eliminate the injurious effects of subsidy or dumping as the case may be. 191. These are all matters to be considered by the Central Government before it decides to impose Anti Dumping Duty on the basis of finding recorded by the Designated Authority and recommendations made by it. The period within which such consideration has to take place is 3 months from the publication of final findings under Rule 18. 192. The prescription of a period of three months under Rule 18 of the Anti Dumping Duty Rules of 1995 or for that matter Rule 20 of Countervailing Duty Rules of 1995 is an indication that on receipt of finding from the Designated Authority, Government is not to act in a mechanical manner to issue Notification imposing the duty, but has to consider all re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... writ is not to be confused with right to get the desired direction on merit. Whether court will interfere in a given case, is a matter of discretion to be exercised by the Court which depends in each case on its own facts and circumstances. 198. It has to be seen from the aforesaid gamut that ultimate authority rests with the Central Government to impose or not to impose Anti Dumping Duty after the necessary determination about the facts referred to in Section 9A are found by the Designated Authority in the manner prescribed under Rules and preliminary finding and final findings are published under Rule 12 and Rule 17 respectively. 199. It can be said, therefore, safely that merely determination of preliminary finding and its publication or determination of the final findings and its publication cannot result in affecting rights of anybody. In fact, the entire scheme reveals that the duty of the Designated Authority is not to determine any lis or dispute between the exporters or importers or domestic industry but it has duty to find certain facts by eliciting information from all sources on which depends its conclusion whether exportation and importation of the subject article resu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that no mandamus can be issued to enact or not to enact any legislative instrument whether by parent or subordinate or delegate legislative authority. 204. This will also be the result if we look at the scheme of the rules that until Notification is issued, no adverse effect falls on the prospective tax payers because no consequence, civil or evil reaches the importers merely from the recording of the findings and its publication, preliminary or final, until the Central Government in exercise of its legislative functions decides to issue Notification under Rule 13 or rule 18 as the case may be. 205. Therefore, 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 exercis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ernment exercises under Section 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 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. 214. 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 Cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y time frame. But petition seeking a prayer at this stage when even extended period to complete the investigation is expiring a few days from now. Had the petitioner come at earliest time, pointing out the non-existence of the pre-conditions, it would have been open for the Designated Authority to review the proceedings in accordance with law by first determining the pre-conditions and to complete the proceedings within the period envisaged under the Rules. 218. The petitioner having not done so, cannot be permitted to upset the whole cart at this late stage by falling back on the defects which could have been raised at the initial stage. 219. We make it clear that by any observations made in the writ petition we have not expressed any opinion on the merit of the contention of the petitioner or the non-petitioner relating to any defect in procedure or about the non-existence of the condition precedent for initiating the proceedings or the essentials of hearing envisaged under the Anti Dumping Rules. The petitioner is free to agitate all these grounds if the occasion so arises. 220. We also need not go into the question at this juncture on the issue of nature of the oral hearing and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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