Full Judgement
Automotive Tyre Manufacturers Association Vs The Designated Authority & Ors.
JUDGMENT
D.K. JAIN, J.:
1. This batch of civil appeals under Section 130E of the Customs Act,1962 (for short "the Act") arises out of a common judgment and order, dated9th September 2005, passed by the Customs, Excise and Service Tax Appellate Tribunal (for short "the Tribunal) whereby the appeals filed by the appellants herein, have been dismissed and the levy of anti-dumping duty, imposed under Section 9A of the Customs Tariff Act, 1975 (for short "the Tariff Act") vide Notification 36/2005-Cus dated 27th April 2005 has been affirmed.
2. As common questions of law are involved in all the appeals and even the background facts are identical, these are being disposed of by this common judgment. However, to appreciate the controversy and the rival stands thereon, we shall refer to the facts in Civil Appeal No. 949 of 2006 as illustrative:
The appellant in this appeal viz. Automotive Tyre Manufacturers Association (for short "ATMA"), is an association representing domestic tyre manufacturing units, who import Nylon Tyre Cord Fabric (for short "NTCF") from various countries, including China, as one of their basic raw materials for manufacture of tyres. Sometime in 2003, the Association of Synthetic Fibre Industry (for short "ASFI"), respondent No. 3 herein, filed an application under the Customs Tariff (Identification, Assessment & Collection of Anti-Dumping Duty on Dumped Articles & for Determination of Injury) Rules, 1995 (for short "the 1995 Rules") before the Designated Authority (here in after referred to as "the DA") inter-alia, praying for imposition of anti-dumping duty under Section 9A of the Act, on imports of NTCF from China. In their application, ASFI had specifically contended that China being a non-market economy country, normal value of the export price from that country had to be determined as per the principle contemplated in para 7 of Annexure I to the 1995 Rules.
3. Taking cognizance of the application, on 29th October 2003, the D A initiated investigation by issuing notification in terms of Rules 5 and 6 of the1995 Rules, indicating the period of investigation from 1st April 2002 to 30thJune 2003. After conducting investigations, the DA recorded preliminary findings and issued public notice in that behalf on 30th June 2004, vide Notification No. 14/20/2003-DGAD, recommending imposition of provisional anti-dumping duty at the rate of US $ 0.69 per Kg on NTC Foriginating in and exported from China. The recommendations made in the preliminary findings were accepted by the Central Government, and provisional anti-dumping duty was, accordingly, imposed vide Notification No. 72/2004-Cus, published on 26th July 2004. It would be of some significance to note here that the 2nd proviso to Rule 13 of the 1995 Rules postulates that the levy of provisional duty, in the first instance, can be for a period of six months, which may be extended by a further period of three months on the request of exporters representing a significant percentage of the trade involved.
4. Being aggrieved, one of the constituent members of ATMA viz.Apollo Tyres Ltd. filed Writ Petition No. SCA/8747/2004 before the Gujarat High Court, challenging the preliminary findings mainly on the ground that the investigation proceedings were in violation of the principles of natural justice and the procedure prescribed by the 1995 Rules. The said writ petition was dismissed by the High Court on 20th July 2004, observing thus: "we do not think it fit to entertain this petition at this stage, when the interested parties including exporters and importers are provided an opportunity to submit their views and are also assured of oral hearing."
5. The DA granted a public hearing to all the parties on 1stSeptember 2004. However, on 1st November 2004, the officer functioning as the DA, who had conducted the investigations in the instant case was transferred, and a new officer took over as the DA. On6th January 2005, the appellants herein, in particular ATMA and Ningbo Nylon, a Chinese exporter, requested the newly appointed DA to grant afresh public hearing, before finalizing his report/recommendations.
6. On 12th January 2005, the DA sent the disclosure statement to all the parties concerned. On 17th January 2005, the appellants wrote a letter of protest to the DA, inter alia, contending that their submissions were not examined; the newly appointed DA had failed to grant them a public hearing and some of the new submissions made by the domestic industry formed part of the record.
7. One of the constituent members of ATMA viz. J.K. Industries Ltd. filed a Civil Writ Petition (No.548 of 2005) before the High Court of Rajasthan at Jodhpur challenging the investigation proceedings, preliminary findings and the disclosure statement. On 25th January2005, the High Court admitted the said writ petition and granted ad-interim stay restraining the DA from issuing final findings in terms of the disclosure statement.
8. Thereafter, on 16th February 2005, the High Court modified the earlier interim stay order dated 25th January 2005 to the extent that the DA was allowed to proceed to record the final findings but the same had to be placed in a sealed cover.
9. On 9th March 2005, the DA issued final findings, vide notification No. 14/20/2003-DGAD, recommending the imposition of anti-dumping duty on NTCF originating from China at the rate of US $0.54 per Kg to US $ 0.81 per Kg.
10. AFSI, respondent no. 3 herein, filed SLP (C) No. 6878-6879 of2005 challenging the orders of the High Court of Rajasthan dated 25thJanuary 2005 and 16th February 2005. This Court granted leave in the said SLP, and set aside the said interim orders.
11. Ultimately, on 21st April, 2005, the High Court of Rajasthan dismissed the writ petition filed by JK Industries Ltd. observing that: "such findings are not reached by the Designated Authority in exercise of any legislative power vested in it for the purpose of deciding any litigatious contentions between the various interests or to adjudicate or to decide upon rights of any party to lis." Aggrieved by the said order, JK Industries preferred SLP (C) 11061 of 2005before this Court. The said SLP was dismissed on 13th May 2005 in view of the alternative remedy available to the appellant. The Court, inter alia, observed that: "However, we clarify that the following observations made in the impugned judgment by the Division Bench of the High Court- "investigation by the Designated Authority is in aid of legislative function"-shall not come in the way of the hearing 6 by the Appellate Authority of any judicial review sought for thereafter by either party."
12. The Central Government accepted the final findings of the D A,and issued Notification No. 36/2005-Cus dated 27th April 2005levying anti-dumping duty at different rates varying from US $ 0.54per Kg to US $ 0.81 per Kg on NTCF w.e.f. 26th July 2004.
13. M/s. Apollo Tyres filed W.P. No. 19896 of 2005 before the High Court of Kerala for quashing the final findings of the DA. The High Court observed that since the petitioners had been represented by ATMA before the DA, ATMA should approach the High Court. Thereafter, ATMA filed W.P. No.20587 of 2005 before the HighCourt.
14. By a common order dated 12th July 2005, the High Court of Kerala disposed of both the writ petitions, directing the incumbent DA to grant hearing on the issues raised in the writ petition, and issue orders modifying the final findings to the extent required.
15. ASFI filed S.L.P. (C) No. 15704-15705 of 2005 before this Court challenging the said order of the High Court of Kerala. This Court disposed of the SLP vide order dated 12th August 2005,suspending the operation of the judgment of the High Court of Kerala, and directing the parties to pursue the remedy before the Tribunal under Section 9C of the Act.
16. As afore-mentioned, the Tribunal has dismissed the appeals, preferred by ATMA, Apollo Tyres, J.K. Tyres, ASFI and NingboNylon and confirmed the levy of anti-dumping duty in terms of Notification No. 36/2005-Cus. Dealing with the main grievance of the appellants viz. denial of an opportunity of hearing and thus, violation of the principles of natural justice, the Tribunal has held that:-
i. an anti-dumping duty has all the characteristics of a tax as it is imposed under statutory power without the tax-payers consent, and its payment is enforced by law, therefore, issuance of the notification by the Central Government in the Official Gazette under Rule 18 of the 1995Rules read with Section 9A(1) of the Tariff Act imposing anti-dumping duty upon importation of the subject article in India is purely a legislative function;
ii. the process of imposing anti-dumping duty which is legislative in nature does not decide any existing dispute or `lis' inter-parties; it only determines whether imposition of anti-dumping duty is called for in relation to dumped imports and if so, at what rate, on the basis of the information collected from the exporters-importers and a large number of other interested parties;
iii. there can never be a `lis' between the State and its citizens in the matter of exercise of legislative power to impose tax as there is no "right-duty" relationship between the Central Government imposing anti-dumping duty under the Tariff Act and the 1995 Rules, and the exporters or importers who are given an opportunity to give information under the Rules and that the principles of natural justice are not applicable to a legislative process for enactment of law and the persons affected have no right to an opportunity to be heard before the enactment;
iv. if, however, the Parliament, in its wisdom, for an impost like the anti-dumping duty, which arises due to and has nexus with the interest of domestic industry, provides a mechanism for taking into consideration the views of those who will be affected and the other interested parties, that will not amount to vesting in them a right to be heard personally, arising as a consequence of the principles of natural justice, against taking legislative action of imposing anti-dumping duty and fixing its rate for the subject article and
v. in cases where investigative procedure leading to determination of the rates of taxes is undertaken by the Parliament, through its agencies, as per its rules of business, there will be absolutely no scope for any judicial tribunal to examine whether any procedural irregularity was committed by not consulting any particular section of the public likely to be adversely affected by such law. This is precisely why legislative enactments are not generally made subject to the principles of natural justice, as doing so may lead to a finding of irregularity of procedure which is prohibited by the constitutional scheme of law making. It is settled law that there is no right to be heard before the making of legislation, whether primary or delegated, unless specifically provided by the Statute.
17. Thus, the Tribunal held that the imposition of anti-dumping duty being legislative in character, the principles of natural justice were not applicable to the proceedings before the DA and, therefore, persons affected had no right to be heard before the imposition of duty.
18. Hence the present appeals. Submissions made on behalf of the appellants:
19. Mr. S.K. Bagaria, learned senior counsel appearing on behalf of ATMA, piloting the arguments on behalf of the appellants, referring to various provisions of the Tariff Act and 1995 Rules strenuously urged that the functions discharged by the DA are quasi-judicial in nature. Relying on the decisions of this Court in Province of Bombay Vs. Khushaldas S.Advani & Ors.1; Shri Radheshyam Khare & Anr. Vs. The State of Madhya Pradesh & Ors.2; Shivji Nathubhai Vs. Union of India & Ors.3;Shankarlal Aggarwala & Ors. Vs. Shankarlal Poddar & Ors.4 S.K.Bhargava Vs. Collector, Chandigarh & Ors.5, Jaswant Sugar Mills Ltd.,Meerut Vs. Lakshmi Chand & Ors.6; Sahara India (Firm), Lucknow Vs.Commissioner of Income Tax, Central-I & Anr.7, learned counselcontended that if a statute empowers an authority, not being a Court in the ordinary sense, to decide disputes arising out of a claim made by one party and disputed by another, on the basis of some objective standards, and is required by the terms of the statute to act judicially, then such authority discharges quasi-judicial functions. Learned counsel submitted that such attributes are in-built in the scheme of the Tariff Act and the 1995 Rules, in as much as:-
i. there are interested parties, some opposing the levy and some supporting the levy;
ii. there is a lis between these interested parties;
iii. Rule 6(1) of the 1995 Rules mandates that the DA has to issue a public notice to all interested parties, and their responses to the same are elicited;
iv. evidence and information is collected, and the evidence presented by one interested party is made available to the other interested parties in terms of Rule 6;
v. a public hearing is conducted, and all the information presented orally has to be subsequently reduced into writing as per Rule6(6);
vi. Rule 12 and 17 provide that the DA is required to determine all matters of facts and law by adjudicating on the material placed before the said authority and record reasons leading to the final determination on the existence, degree and effect of dumping and
vii. Section 9C of the Tariff Act contemplates an appeal to the Tribunal on all aspects of the determination by the DA viz. the existence, degree and effect of dumping. Learned counsel then urged that since the said Section provides for a remedy of appeal on all the facets of determination, the Tribunal has no option but to examine all aspects viz. existence, degree and effect of dumping on the basis of the material placed before the DA, in order to confirm, modify or annul the orders appealed against. Commending us to the decision of a Constitution Bench of this Court in PTC India Limited Vs. Central Electricity
Regulatory Commission8, learned counsel contended that whenever a particular statute provides for an appeal against the decision of an authority, then orders/decisions of that authority are quasi-judicial in nature. In order to buttress the argument, learned counsel also commended us to two publications of the Government of India viz. "Anti-Dumping and Anti-Subsidy Measures" and "Anti-Dumping, A Guide" wherein the Government has accepted that the functions of the DA are quasi-judicial in nature. Learned counsel argued that even the procedure adopted by the D A leads to the inescapable conclusion that it discharges quasi-judicial functions in as much as the DA grants all interested persons an opportunity to make oral submissions. Relying on the decision of this Court in Designated Authority (Anti-Dumping Directorate), Ministry of Commerce Vs. Haldor Topsoe A/S9, learned counsel contended that it is a settled practice that if during the course of investigations, the DA conducting the public hearings is transferred, the new DA grants a fresh hearing before making the final order.
20. Learned counsel urged that in light of the observations made by this Court in Reliance Industries Ltd. Vs. Designated Authority & Ors.10 and J.K. Industries Vs. Union of India (SLP (C) No.11061 of 2005), it is fallacious to contend that the functions discharged by the DA are legislative in nature. Learned counsel submitted that in Tata Chemicals Limited (2)Vs. Union of India & Ors.11 and Tata Chemicals Limited Vs. Union of India & Ors.12, this Court has also held that an appeal before the Tribunal is maintainable against the determination by the DA together with the Customs Notification. Learned counsel contended that even if the DA's functions are held to be in exercise of conditional legislation, it would be of the nature as mentioned in the third category of cases highlighted in State of T.N. Vs. K.Sabanayagam & Anr.13 and Godawat Pan Masala Products I.P. Ltd. &Anr. Vs. Union of India & Ors.14, in as much as the levy of duty would depend on the satisfaction of the DA on objective facts placed by one party seeking benefits, and even in such a situation principles of natural justice are required to be complied with.
21. Learned counsel urged that at this stage the respondents cannot be allowed to contend that no prejudice was caused to the appellants due to non-grant of hearing, as the DA did not take this stand either in the disclosure statement or in the final findings. Further, the respondents have not submitted any counter-affidavit in this behalf. Commending us to the decision of this Court in Mohinder Singh Gill & Anr. Vs. The Chief Election Commissioner, New Delhi & Ors.15, learned counsel contended that the validity of an order has to be judged by the reasons mentioned therein, and cannot be supplemented by fresh reasons in the form of affidavits or otherwise. Learned counsel contended that despite several requests, the incumbent DA did not grant hearing to ATMA. Learned counsel complained that after the issuance of disclosure statement, a specific request for personal hearing was made vide letter dated 24th January, 2005but the DA did not even make a reference to the said request in his final order. According to the learned counsel, non-consideration of the request for hearing by itself has caused grave and serious prejudice to the appellants.
22. Learned counsel asserted that even if it is held that the functions of the DA are administrative in nature, the principles of natural justice would still have to be complied with as the decision of the DA entails far-reaching civil consequences. In support, reliance was placed on the decisions of this Court in Mohinder Singh Gill (supra); Maneka Gandhi Vs. Union of India &Anr.16 ; Sahara India (supra); SBP & Co. Vs. Patel Engineering Ltd. &Anr.17 and C.B. Gautam Vs. Union of India & Ors.
23. Relying heavily on the decision of a Constitution Bench of this Courtin Gullapalli Nageswara Rao & Ors. Vs. Andhra Pradesh State Road Transport Corporation & Anr.19, learned counsel contended that the final determination by the new DA without granting a hearing to the appellants is bad in law in as much as it is well settled that the principles of natural justice mandate that the authority who hears, must also decide. Learned counsel urged that the hearing granted by the new DA to the Advocates of NingboNylon, the Chinese Exporter, is of no consequence in so far as the Indian Tyre Manufacturers were concerned, particularly when the hearing granted to Ningbo Nylon was confined to their offer of price undertaking, which otherwise is a confidential hearing not akin to the public hearing, which was requested by ATMA.
24. In relation to the levy of anti-dumping duty during the interregnum period between 26th January, 2005 to 26th April, 2005, Mr. Bagaria contended that the provisions of the Tariff Act or the Rules made there under do not contemplate the power to levy duty retrospectively, save and except as provided in Section 9A(3) of the Tariff Act. Relying on the decisions of this Court in The Cannanore Spinning and Weaving Mills Ltd. Vs. Collector of Customs and Central Excise, Cochin & Ors.20; Hukam Chand Etc. Vs. Union of India & Ors.21; Orissa State Electricity Board & Anr. Vs.Indian Aluminum Co. Ltd.22; Regional Transport Officer, Chittoor & Ors.Vs. Associated Transport Madras (P) Ltd. & Ors.23; Mahabir Vegetable Oils (P) Ltd. & Anr. Vs. State of Haryana & Ors.24 and Bakul Cashew Co.& Ors. Vs. Sales Tax Officer, Quilon & Anr.25, learned counsel contended that if no power has been conferred upon the delegatee by the parent Act to levy tax or duty retrospectively, the delegatee cannot confer upon itself any such power by making any such Rule nor can it exercise any such power or levy duty or tax retrospectively. Section 9A(3) of the Tariff Act only provides for the levy of duty retrospectively prior to the date of issuance of notification levying provisional duty and the instant case, is therefore, not covered under Section 9A(3). Learned counsel urged that Section 9A (3)makes it manifest that wherever the legislature intended to confer the power to levy duty retrospectively, it has specifically provided for the same.
25. Learned counsel then contended that the submission of the respondents that the levy of anti-dumping duty is in continuation for the period of five years commencing from the levy of provisional duty is contrary to the scheme and provisions of the Tariff Act. It was submitted that it is manifest from the plain language of Section 9A, the charging provision, that the levy of anti-dumping duty is not automatic. Therefore, the continuity of the levy, in terms of the Section itself, is only for the period of notification and nothing more and there could be continuity only when the final notification is issued before the expiry of the provisional duty covered under the provisional notification. However, if the Government allows the period of levy of the provisional duty to expire, and issues the final notification thereafter, there can be no levy during the interregnum period.
26. Emphasising that provisional anti-dumping duty being a short-term measure, which in terms of Rule 13 of the 1995 Rules can remain in force only for a period not exceeding six months, extendable by a further period of three months under the circumstances mentioned in the said Rule, learned counsel pointed out that since in the instant case, there was no such extension, the period for levy of provisional duty expired on 25th January,2005. Furthermore, in S&S Enterprise Vs. Designated Authority & Ors.26,this Court had observed that the imposition of anti-dumping duty under Section 9A of the Tariff Act, is the result of the General Agreement on Tariff and Trade and, therefore, the levy of provisional duty should be in accordance with Rule 13 of the 1995 Rules and Article 7.4 of the agreement on Tariffs and Trade, 1994 (for short "the WTO Agreement"), which contemplates that the provisional duty shall be limited to as short a period as possible, and, in fact, provides for the outer limit for the imposition of provisional duty.
27. Learned counsel contended that in the instant case, the provisional levy was finalized and validated by paragraph 2 of the final anti-dumping duty notification dated 27th April, 2005, and by virtue of the said paragraph the provisional duty was merely replaced by the final duty. Rule 20(2)(a) of the 1995 Rules uses the expression "where a provisional duty has been levied" and "in absence of provisional duty", thereby making it clear that the final measure merely validates the provisional duty already levied. The use of the said expression also establishes that Rule 20(2)(a) applies only when the provisional duty had in fact been levied, and therefore the said Rule has no application to the interregnum period.
This position is also clarified by Rule 21 of the 1995 Rules which provides that if final duty is higher than the provisional duty already imposed and collected, the differential shall not be collected from the importer, and if it is lower, the differential shall be refunded to the importer, argued the learned counsel. Learned counsel asserted that the scheme of Rules 20 and 21 also makes it clear that no additional liability can be fastened for the periods prior to the date of final levy over and above the provisional duty for the period during which such provisional levy was in force. Learned counsel thus, argued that if Rule20(2)(a) is construed as conferring any power on the Central Government to levy duty retrospectively, the Rule itself would become ultra vires the Act, and such construction which maintains the validity of the provision should be preferred. Commending us to the decisions of this Court in State of Madhya Pradesh & Anr. Vs. Dadabhoy's New Chiri Miri Ponri HillColliery Co. Pvt. Ltd.27 and Yudhishter Vs. Ashok Kumar28, learned counsel submitted that reading down of a legislation to maintain its validity is an accepted principle of law.
28. Learned counsel then submitted that even if it is assumed that the Government has the power to levy anti-dumping duty retrospectively, even then the conditions precedent for making such retrospective levy as mentioned in Rule 17(1)(a) and Rule 20(2)(a), which respectively require the DA, to record: (i) a finding as to whether retrospective levy is called for and if so, the reasons thereof and the date of commencement of such levy and (ii)a specific finding to the effect that the dumped imports would have, in the absence of the provisional duty, led to injury, were not satisfied. Relying on the decision of this Court in Bhavnagar University Vs. Palitana Sugar Mill(P) Ltd. & Ors.298 Mr. Bagaria submitted that when a statutory authority is required to discharge its functions in a particular manner, such functions must be discharged in that manner alone or not at all. Learned counsel urged that Section 9A which is the charging Section must be construed strictly, andwhen the said Section itself makes the levy of duty contingent upon the existence of notification, there can be no scope for invoking any concept of continuity in the absence of a notification.
29. Learned counsel urged that Section 9A(5) of the Tariff Act does not have any application in the instant case as the anti-dumping duty referred to in that Section is the final duty, and not the provisional duty. The position is also clarified by the first and second proviso to the said sub-Section, in as much as the first proviso refers to the extension of "such imposition" by five years, and such extension can only be in relation to the final levy, while second proviso relates to the extension of final levy for a further period of one year when the review is initiated before the expiry of five years. Learned counsel urged that the fact that the outer time limit of five years is only contemplated in relation to the final duty and not the provisional duty is also evident from Article 11.3 of the WTO Agreement. Learned counsel contended that the outer limit for the levy of provisional duty cannot be set at naught by an alleged theory of continuity.
30. Learned counsel contended that in light of the decision of this Court in Shenyang Matsushita S. Battery Co. Ltd. Vs. Exide Industries Ltd. & Ors.30, the DA is required to construct normal value after sequentially applying the different methods mentioned in paragraph 7 of Annexure I of the 1995 Rules, and only if construction by the first two methods is not possible, reliance can be placed on the third method. Learned counsel contended that in the instant case, the domestic industry had premised their application on the assumption that normal value can be constructed on the basis of any of the methods, and therefore, it resorted to the last method viz. the price paid or payable in India. This erroneous approach was adopted by the DA in the Initiation Notification dated 29th October, 2003. The appellants objected to the same in their submissions before the DA, and the same was ignored by the DA in its preliminary findings, and thereafter, in the disclosure statement. Learned counsel contended that the method followed by the DA is clearly in violation of the requirements of paragraph 7of the Annexure I of the 1995 Rules in as much as it did not undertake any selection process for selecting market economy third country, it did not invite any comments and it did not give any opportunity to the parties in that regard.
31. Ms. Meenakshi Arora, learned counsel appearing on behalf of NingboNylon adopting the same line of arguments, submitted that the hearing granted to Ningbo Nylon by the new DA on 9th March 2005, was only for the purpose of Ningbo Nylon's price undertaking, and the same cannot be equated with the public hearing envisaged under Rule 6(6) of the1995 Rules, in as much as: (i) Section 9B(1)(c)(iii) makes it clear that the price undertaking is in the nature of an agreement between a specific exporter and the Central Government wherein the exporter agrees to revise its price in a manner that the injurious effect of dumping is eliminated; (ii)confidential information has to be considered to ascertain the injurious effect of dumping and (iii) in terms of Rule 7, the hearing relating to price undertaking is confidential, and the same does not relate to all the aspects of investigation or to all the parties before the DA. Learned counsel thus, urged that even if it is assumed that the second hearing granted to counsel for Ningbo Nylon was in the nature of a public hearing in terms of Rule 6(6),the same cannot be considered as an effective opportunity as it is inconceivable for any counsel to participate in any meaningful discussion unless accompanied by the representative of the concerned exporter. Furthermore, the notice for hearing on 9th March 2005, given on 7th March,2005 could not be considered as an adequate opportunity keeping in view the time difference between India and China. Submissions made on behalf of the Respondents:
32. Mr. Harin P. Raval, learned Additional Solicitor General, appearing on behalf of the DA, defending the decision of the Tribunal, contended that since the 1995 Rules were in the nature of a "super special legislation", having economic policy overtones, this Court should adopt a policy of judicial deference. Commending us to the decision of this Court in Reserve Bank of India Vs. Peerless General Finance and Investment Co. Ltd. &Ors.31, learned counsel urged that while interpreting a legislation, the Courts should have regard to both the text and context of the legislation, and in light of the fact that the 1995 Rules contemplate adjustment of India's international trade policy measures, allowing a great deal of leeway in terms of policy operation, any judicial interpretation of the 1995 Rules must accord with this object of these Rules.
33. To start with, learned counsel strenuously urged that the levy of anti-dumping duty as per the procedure laid down in 1995 Rules constitutes a legislative act. Drawing support from the decisions of this Court in Shri Sitaram Sugar Company Ltd. & Anr. Vs. Union of India & Ors.32 and Dalmia Cement (Bharat) Ltd. & Anr. Vs. Union of India & Ors.33, learned counsel stressed that it is a settled principle that price fixation is a legislative function, and the legislature is competent to delegate its power to its agent and authorize it to adjudicate and arrive at findings of fact, which would be conclusive. Learned counsel pleaded that it is again a settled principle of law that principles of natural justice do not apply in case of legislative acts.
In support, reliance was placed on the decisions of this Court in Ramesh Chandra Kachardas Porwal & Ors. Vs. State of Maharashtra & Ors.34;Saraswati Industrial Syndicate Ltd. & Ors. Vs. Union of India35 and P.M. Ashwathanarayana Setty & Ors. Vs. State of Karnataka & Ors.36.Moreover, in relation to the cases involving economic regulation, the Courts have usually adopted a policy of deference as was held by this Court in the State of Gujarat & Anr. Vs. Shri Ambica Mills Ltd., Ahmedabad &Anr.37, asserted the learned counsel. In relation to taxing statutes in particular, larger discretion is accorded in light of their inherent complexity as was held in Jardine Henderson Limited Vs. Workmen & Anr.38 Learned counsel further contended that competence to legislate encompasses the competence to legislate both prospectively and retrospectively as was held in M/s. Krishnamurthi & Co. Etc. Vs. State of Madras & Anr.39 and Empire Industries Ltd. & Ors. Vs. Union of India & Ors.40. Commending us to the decision of this Court in Haridas Exports (supra), learned counsel urged that since in an anti-dumping proceeding, no interest group other than the domestic producers have full legal standing, it is evident that the said proceedings are not adversarial, judicial or quasi-judicial in nature. However, at a later stage of his arguments, the learned counsel candidly conceded that at best the proceedings before the DA could be considered as administrative in nature.
34. Learned counsel urged that it is also well settled that the principles of natural justice will take their color from the context of the statutory provisions under which the issue is to be adjudicated as has been observed in The New Prakash Transport Co. Ltd. Vs. The New Suwarna Transport Co.Ltd.41 and Haryana Financial Corporation & Anr. Vs. Kailash ChandraAhuja42. Learned counsel submitted that the alleged breach of natural justice principles has to be judged in light of the prejudice caused to the party, and public interest, and not merely on technicalities. Learned counsel asserted that in any event in the instant case, the new DA had afforded an opportunity of hearing to the appellants on 7th March, 2005, which they failed to avail of Learned counsel submitted that at the most the present case may be considered as one in which only a "partial hearing" was granted, and, therefore, in such a situation, the appellants were obliged to establish that some prejudice had been caused to them because of lack of proper oral hearing. In support of the argument, reliance was placed on the decision of this Court in State Bank of Patiala & Ors. Vs. S.K. Sharma
Controverting the stand of the appellants that the recommendation of the DA was vitiated because the incumbent DA had not heard the appellants, learned counsel placed heavy reliance on the decision in Osse in and Gelatine Manufacturers' Association of India Vs. Modi Alkalies and Chemicals Limited & Anr.44, wherein despite the fact that hearing was conducted by one authority, and the decision was rendered by another, this Court did not set aside the said decision. Learned counsel emphasised that since in the instant case the appellants have neither established prejudice, nor have they challenged the findings of the DA on injury or in the sunset review, there is no merit in these appeals. Relying on P.M. Aswathanarayana Setty (supra),learned counsel pleaded that having regard to the object of the legislation, this Court should prefer an interpretation that would save the proceedings of the DA. Distinguishing the decision in PTC India Ltd. (supra), counsel submitted that reliance on the said decision by the appellants was misplaced in as much as in the said judgment, the Court itself clarified that its findings shall not be construed as a general principle of law applicable to other enactments and Tribunals. Moreover, the proceedings under Section 62of the Electricity Act, 2003 are adversarial in nature, and therefore they cannot be likened to an anti-dumping investigation in which the only consideration is fairness in trade.
Learned counsel asserted that while the proceedings under the Electricity Act relate to regulation of electricity within the territory of India, anti-dumping investigations, by their very nature, have an international perspective; the decision of the Commission under Electricity Act is binding whereas the findings of the DA are merely recommendatory; while the interests of various groups have to be examined in proceedings under the Electricity Act, no interest group other than the domestic industry has full legal standing in an anti-dumping investigation and that proceedings under the Electricity Act are held by a court of law, but anti-dumping investigation is conducted by governmental agencies through administrative procedures.
35. Mr. Krishnan Venugopal, learned senior counsel appearing on behalf of the ASFI contended that the exact scope and ambit of the principles of natural justice, including the nature of hearing to be accorded must be decided keeping in view the nature and object of the Tariff Act and the 1995Rules, and therefore, the question as to whether the hearing contemplated under the 1995 Rules is oral or by written representation will have an important bearing on the issue as to whether the new DA was required to conduct a fresh public hearing. According to the learned counsel even if the functions of the DA are held to be quasi-judicial in nature, the new DA is not required to hold a fresh public hearing as under Rule 6(6) of the 1995Rules while interested parties are allowed to present information orally, but the DA can take into consideration only that information which is subsequently reproduced in writing and, therefore, the principles enunciated in Gullapalli (supra) are not applicable in the instant case.
In that case, the oral hearing was preceded by written objections and representations, while under the Tariff Act and Rules, the sequence is reversed in as much as in proceedings before the DA, parties present oral information followed by reproduction of that information in writing, argued the learned counsel. Commending us to the decisions in General Manager, Eastern Railway & Anr. Vs. Jawala Prosad Singh45; Madhya Pradesh Industries Ltd. Vs. Union of India & Ors.46; J.A. Naiksatam Vs. Prothonotary & Senior Master, High Court of Bombay & Ors.47; R Vs. Immigration Appeal Tribunal & Anr.48and Selvarajan Vs. Race Relations Board49, learned counsel contended that as per the prescribed procedure an opportunity to place the relevant information on record in writing is sufficient compliance with the principles of audialteram partem. To buttress his stand, reliance was placed on the decisions of this Court in Gramophone Company of India Ltd. Vs. Birendra Bahadur Pandey & Ors.50;
M/s. Tractor export, Moscow Vs. M/s Tarapore & Company & Anr..51 and Jolly George Varghese & Anr. Vs. The Bank of Cochin.52. It was also contended that since Sections 9A to 9C were introduced in the Tariff Act in order to comply with India's WTO obligations, the interpretation of these provisions should be consistent with the provisions of the treaty. It was urged that having submitted written submissions on 10th September, 2004 pursuant to the public hearing on 1st September, 2004, as also the rejoinder, the appellants cannot complain of violation of the principles of natural justice, more so when the DA had also afforded opportunities to counsel of the appellants on two occasions i.e. 25th January, 2005 and 7th March, 2005, to appear before him but the appellants failed to appear on both the occasions. It was asserted that in any event the principles enunciated in Gullapalli (supra) not applicable to the instant case, in as much as the role of the DA is merely recommendatory.
36. It was argued that the decision of a two judge Bench in Reliance Industries (supra), relied upon on behalf of the appellants, is per incuriam in light of the decision of the three judge Bench decision in Haridas Exports(supra), which was not even noticed in Reliance Industries (supra).
37. As regards the decision in PTC India (supra), inter-alia, holding that whenever an appeal is provided against an order, the determination becomes quasi-judicial, it was submitted that as the said observations were made in the context of the Electricity Act, which is entirely different in purport and scope from the Tariff Act read with the 1995 Rules, the ratio of the said decision has no bearing on the facts of the present case. Learned counsel stressed that one of the attributes of a quasi-judicial authority is that it must render a binding decision, and if its decision is merely advisory, deliberative, investigatory or conciliatory in character, which has to be confirmed by another authority before it becomes binding, then such a body is administrative in character, as was observed by this Court in Union of India Vs. Mohan Lal Capoor.53, which is the case here, as the role of the DA merely recommendatory. In support, reliance was placed on the decision of this Court in Tata Chemicals (2) (supra).
38. Relying on the decisions of this Court in P. Sambamurthy & Ors. Vs.State of Andhra Pradesh & Anr.54; Union of India Vs. K.M. Shankarappa and B.B. Rajwanshi Vs. State of U.P. & Ors.56, learned counsel urged that it is a settled principle of law that the executive cannot sit in judgment over the decision of a quasi-judicial body, and since the Central Government has the power to alter or annul the recommendations of the DA, even logically the DA cannot be held to be a quasi-judicial authority. Learned counsel pleaded that a rigid application of the principles of natural justice in such a situation would defeat the purpose of the administrative enquiry conducted by the DA which is conducted with a view to elicit information from a broad spectrum of interested persons, as was held in Jayantilal Amrit Lal Shodhan Vs. F.N.Rana & Ors.
39. Learned counsel contended that there are certain peculiar features of the investigation conducted by the DA which make it manifest that the DA is not a quasi-judicial authority. Firstly, in light of the fact that there are numerous interested parties and many competing economic interests are involved in an anti-dumping investigation, it is fallacious to assume that the proceedings are in the nature of a simple lis between two parties. Secondly, the suo motu power invested in the DA to conduct investigations is in furtherance of his policy-making role in the nation's international trade regime. Thirdly, under Rule 7, the DA is required to keep certain information confidential, and this procedure whereby the parties do not know what information is being taken into account by the DA while making the determination is alien to quasi-judicial proceedings. Fourthly, the information collected by the DA is not required to be sworn on affidavit or otherwise and the witnesses do not testify on oath. Moreover, Rule 6(8) of the 1995 Rules empowers the DA to take into account unverified information, which procedure is inconsistent with the DA being classified as a quasi-judicial authority. Fifthly, the procedure of "sampling" contemplated under Rule 17(3) allows the DA to limit its findings to a reasonable number of interested parties or to articles using a statistically valid sample, and based on this, the DA can fix a country-wise margin of dumping which will apply to all exporters, a procedure unknown to quasi-judicial proceedings.
40. Learned counsel contended that even if it is assumed that the DA discharges quasi-judicial functions and the principles of natural are held to be applicable to the proceedings before it, still it is not sufficient to merely allege breach of natural justice, and actual prejudice must be demonstrated, as was held in Haryana Financial Corporation (supra) and Managing Director, ECIL, Hyderabad & Ors. Vs. B. Karunakar & Ors.58. It was asserted that in the present case, the appellants have failed to demonstrate any prejudice to them with reference to any material placed by them before the DA.
41. In response to the challenge against the retrospective levy of anti-dumping duty during the interregnum period between 26th January, 2005 to27th April, 2005, Mr. Venugopal submitted that in absence of the stay granted by the Rajasthan High Court on 25th January, 2005, the Central Government could have, under the second proviso to Rule 13, extended the provisional duty for a further period of nine months from 25th January, 2005.Learned counsel further urged that under Rule 20(2)(a), the DA after recording a finding of actual injury, was empowered to recommend imposition of anti-dumping duty from the date of the imposition of the provisional duty. Learned counsel submitted that the appellant's contention that Rule 20(2)(b) is ultra vires the Tariff Act as the power to levy anti-dumping duty retrospectively is found in sub-section (3) of Section 9A of the Tariff Act is misconceived as an anti-dumping investigation relates to a past period known as the "period of investigation", and therefore, there is no question of retrospectively.
42. Mr. Venugopal also pleaded that the present appeals had in fact been rendered infructuous as the original final findings by the DA are no longer inexistence in view of the fact that a sunset review has been conducted by the DA, pursuant to which the Central Government has revised the levy of duty vide its notification dated 31st March, 2009, which has not been put in issue by the appellants.
43. Mr.C.S. Vaidyanathan, learned senior counsel appearing on behalf of ASFI, urged that the 1995 Rules are a complete code in themselves; Rule 6provides the framework within which the DA has to operate, and therefore, the applicability of principles of natural justice is limited to those areas thatare provided under the 1995 Rules. Learned counsel contended that anti-dumping investigation conducted by the DA is administrative in nature, whereas the imposition of anti-dumping duty is legislative in character. Relying on the decisions of this Court in Keshav Mills (supra); Ramesh Chandra Kachardas Porwal (supra); Union of India & Anr. Vs. CynamideIndia & Anr.59; Shri Sita Ram Sugar Company Limited & Anr. Vs. Union of India & Ors.60; State Bank of Patiala (supra) and Viveka Nand Sethi Vs.Chairman, J&K Bank Ltd. & Ors.61, learned counsel submitted that there is no straight jacket formula to apply the principles of natural justice, and the effect of the alleged breach of natural justice has to be considered while determining the remedial action. It was asserted that there was no pre judice caused to the appellants due to the alleged breach of natural justice, and therefore, there was no merit in the appellants' claim. It was urged that if this Court were to conclude that there has been a violation of the principles of natural justice, it would be appropriate to remand the matter back to the DA for de novo adjudication from the stage the procedural irregularity had intervened.
44. Commending us to the definition of the term "determination" as contained in the Webster's Dictionary and the Oxford Dictionary, learned counsel submitted that the use of the said term in Section 9C of the Tariff Act, when understood in the context of the 1995 Rules, leads to the incontrovertible conclusion that it is the determination by the DA that is made appealable, and not the notification levying anti-dumping duty. Therefore, it is manifest that the imposition of duty is legislative in nature. Discussion:
45. Before addressing the contentions advanced on behalf of the parties, it will be necessary and expedient to survey the relevant statutory provisions under which the levy, questioned in these appeals, has been imposed. Section 9A of the Tariff Act contemplates levy of anti-dumping duty on dumped articles. It reads as follows:
9A. Anti-dumping duty on dumped articles.- (1) Where any article is exported from any country or territory (hereinafter in this section referred to as the exporting country or territory) to India at less than its normal value, then, upon the importation of such article into 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. Explanation.- For the purposes of this section,-
a. "margin of dumping", in relation to an article, means the difference between its export price and its normal value;
b. "export price", in relation to an article, means the price of the article exported from the exporting country or territory and in cases where there is no export price or where the export price is unreliable because of association or a compensatory arrangement between the exporter and the importer or a third party, the export price may be constructed on the basis of the price at which the imported articles are first resold to an independent buyer or if the article is not resold to an independent buyer, or not resold in the condition as imported, on such reasonable basis as may be determined in accordance with the rules made under sub-section (6); 3
c. "normal value", in relation to an article, means –
(i) the comparable price, in the ordinary course of trade, for the like article when meant for consumption in the exporting country or territory as determined in accordance with the rules made under sub-section (6); or
(ii) when there are no sales of the like article in the ordinary course of trade in the domestic market of the exporting country or territory, or when because of the particular market situation or low volume of the sales in the domestic market of the exporting country or territory, such sales do not permit a proper comparison, the normal value shall be either-
comparable representative price of the like article when exported from the exporting country or territory to an appropriate third country as determined in accordance with the rules made under sub-section (6); or (b) the cost of production of the said article in the country of origin along with reasonable addition for administrative, selling and general costs, and for profits, as determined in accordance with the rules made under sub-section (6):Provided that in the case of import of the article from a country other than the country of origin and where the article has been merely transshipped through the country of export or such article is not produced in the country of export or there is no comparable price in the country of export, the normal value shall be determined with reference to its price in the country of origin.(2) The Central Government may, pending the determination in accordance with the prov
