# AUTOMOTIVE TYRE MANUFACTURERS ASSOCIATION v. THE DESIGNATED AUTHORITY & ORS

- **Citation:** [2011] 1 S.C.R. 198
- **Court:** Supreme Court of India
- **Decided:** 2011-01-07
- **Case number:** CIVIL APPEAL NO. 949 OF 2006
- **Bench:** O.K. Jain, H.L. Datiu
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/automotive-tyre-manufacturers-association-v-the-designated-authority-ors-27427
- **Pages:** 68

## Headnote

Customs Tariff (Identification, Assessment and
Collection of Anti-Dumping Duty on Dumped Articles and for
C Determination of Injury) Rules, 1995:
Rules 4, 5, 6, 10 11 and 17 r/w s. 9 of Tariff Act -
Investigation and findings by Designated Authority as to
existence, degree and extent of alleged dumping,
D determination of normal value, export price and margin of
dumping and determination of injury -HELD : DA performs
quasi-judicial functions under the Tariff Act read with Rules
and is bound to act judicially -While determining the .
existence, degree and effect of the alleged dumping the DA
determines a '/is' between the persons supporting the levy of
E duty and those opposing the said levy -Customs Tariff Act,
1975 -s.9-C.
Rules 4, 5, 6, 10, 11
and 17 - Investigation as to
existence, degree and extent of alleged dumping and final
F finding thereon - Opportunity of oral hearing - HELD: In view
of the elaborate procedure prescribed in r. 6 which the DA is
obliged to adhere to, while conducting the investigation, duty
to follow the principles of natural justice is implicit in the
existence of power conferred on him 'under the Rules - The
G procedure prescribed in the Rules imposes a. duty on DA to
afford to all the parties, who have filed objectionand adduced
evidence, a personal hearing before taking a final decision
in the matter - Even written arguments are no substitute for
an oral hearing - In the instant case, the entire matter had
H
198
AUTOMOTIVE TYRE MANUFACTURERS ASSOCIATION v. 199
DESIGNATED AUTHORITY
.
been collected by the predecessor of the DA, but the final
A
findings in the form of an order were recorded by the
successor DA who had no occasion to hear the appellants -
The final order of the new DA offends the basic principle of
natural justice and, as such, is quashed - Consequently, the
decision of the Tribunal is set aside and the notification dated
B
27.4.2006 is quashed - Administrative Law - Principles of
natural justice - Oral hearing - Doctrines - Audi alteram
~
partem.
Customs Tariff Act, 1975:
c
s.9-A - Anti dumping duty - Refund of- HELD: In view
of the fact that importers and its constituent members have
passed on the burden of levy on third persons, they cannot
claim refund of the anti-dumping duty levied - Doctrine of
unjust enrichment is attracted - Customs Tariff (Identification,
D
_ _,.__
Assessment and Collection of Anti-Dumping Duty on
Dumped Articles and for Determination of Injury) Rules, 1995.
Words and Phrases:
"Natural justice" - Connotation of.
E
The domestic tyre manufacturing units, represented
-"'.
by the appellant (ATMA), imported Nylon Tyre Cord Fabric
(NTCF) from various countries, including China, as one
of their raw materials for manufacture of tyres. In 2003,
F
respondent no. 3, the Association of Synthetic Fibre
Industry (ASFI), filed an application under the Customs
Tariff (Identification, Assessment and Collection of AntiDumping Duty on Dumped Articles and for Determination
~
of Injury) Rules, 1995 before the Designated Authority
G
(DA), inter alia, praying for imposition of anti-dumping
duty u/s 9A of the Customs Tariff Act, on imports of NTCF
from China. The DA issued the notification in terms of
Rules 5 and 6 of the 1995 Rules indicating the period of
investigation from 1.4.2002 to 30.6.2003. After conducting
H
200
SUPREME COURT REPORTS
[2011] 1 S.C.R.
A investigation, the DA recorded preliminary findings and
issued a public notice by Notification dated 30.6.2004,
recommending imposition of provisional anti-dumping
.duty on NTCF originating in and exported from China.
Accordingly, the Central Government, by Notification
B dated 26.7.2004 imposed the provisional anti-dumping
duty. The DA granted a public hearing to all the parties
on 1.9.2004. However, on 1.11.2004 the said DA was
transferred and a new officer took over as the DA, who
sent the disclosure statement to all the parties concerned
c on 12.1.2005. The DA then issued final findings by
Notification dated 9.3.2005, r

## Text

_Characters 0–39,547 of 127,281. This is a partial read: ask again with offset=39547 for what follows._

[2011) 1 S.C.R. 198
A
AUTOMOTIVE TYRE MANUFACTURERS ASSOCIATION
B
v.
THE DESIGNATED AUTHORITY & ORS.
{CIVIL APPEAL NO. 949 OF 2006 ETC.)
JANUARY 7, 2011
[O.K. JAIN AND H.L. DATIU, JJ.]
Customs Tariff (Identification, Assessment and
Collection of Anti-Dumping Duty on Dumped Articles and for
C Determination of Injury) Rules, 1995:
Rules 4, 5, 6, 10 11 and 17 r/w s. 9 of Tariff Act -
Investigation and findings by Designated Authority as to
existence, degree and extent of alleged dumping,
D determination of normal value, export price and margin of
dumping and determination of injury -HELD : DA performs
quasi-judicial functions under the Tariff Act read with Rules
and is bound to act judicially -While determining the .
existence, degree and effect of the alleged dumping the DA
determines a '/is' between the persons supporting the levy of
E duty and those opposing the said levy -Customs Tariff Act,
1975 -s.9-C.
Rules 4, 5, 6, 10, 11
and 17 - Investigation as to
existence, degree and extent of alleged dumping and final
F finding thereon - Opportunity of oral hearing - HELD: In view
of the elaborate procedure prescribed in r. 6 which the DA is
obliged to adhere to, while conducting the investigation, duty
to follow the principles of natural justice is implicit in the
existence of power conferred on him 'under the Rules - The
G procedure prescribed in the Rules imposes a. duty on DA to
afford to all the parties, who have filed objectionand adduced
evidence, a personal hearing before taking a final decision
in the matter - Even written arguments are no substitute for
an oral hearing - In the instant case, the entire matter had
H
198
AUTOMOTIVE TYRE MANUFACTURERS ASSOCIATION v. 199
DESIGNATED AUTHORITY
.
been collected by the predecessor of the DA, but the final
A
findings in the form of an order were recorded by the
successor DA who had no occasion to hear the appellants -
The final order of the new DA offends the basic principle of
natural justice and, as such, is quashed - Consequently, the
decision of the Tribunal is set aside and the notification dated
B
27.4.2006 is quashed - Administrative Law - Principles of
natural justice - Oral hearing - Doctrines - Audi alteram
~
partem.
Customs Tariff Act, 1975:
c
s.9-A - Anti dumping duty - Refund of- HELD: In view
of the fact that importers and its constituent members have
passed on the burden of levy on third persons, they cannot
claim refund of the anti-dumping duty levied - Doctrine of
unjust enrichment is attracted - Customs Tariff (Identification,
D
_ _,.__
Assessment and Collection of Anti-Dumping Duty on
Dumped Articles and for Determination of Injury) Rules, 1995.
Words and Phrases:
"Natural justice" - Connotation of.
E
The domestic tyre manufacturing units, represented
-"'.
by the appellant (ATMA), imported Nylon Tyre Cord Fabric
(NTCF) from various countries, including China, as one
of their raw materials for manufacture of tyres. In 2003,
F
respondent no. 3, the Association of Synthetic Fibre
Industry (ASFI), filed an application under the Customs
Tariff (Identification, Assessment and Collection of AntiDumping Duty on Dumped Articles and for Determination
~
of Injury) Rules, 1995 before the Designated Authority
G
(DA), inter alia, praying for imposition of anti-dumping
duty u/s 9A of the Customs Tariff Act, on imports of NTCF
from China. The DA issued the notification in terms of
Rules 5 and 6 of the 1995 Rules indicating the period of
investigation from 1.4.2002 to 30.6.2003. After conducting
H
200
SUPREME COURT REPORTS
[2011] 1 S.C.R.
A investigation, the DA recorded preliminary findings and
issued a public notice by Notification dated 30.6.2004,
recommending imposition of provisional anti-dumping
.duty on NTCF originating in and exported from China.
Accordingly, the Central Government, by Notification
B dated 26.7.2004 imposed the provisional anti-dumping
duty. The DA granted a public hearing to all the parties
on 1.9.2004. However, on 1.11.2004 the said DA was
transferred and a new officer took over as the DA, who
sent the disclosure statement to all the parties concerned
c on 12.1.2005. The DA then issued final findings by
Notification dated 9.3.2005, recommending the imposition
of anti-dumping duty on NTCF originating from China.
The Central Government accepted the final findings of the
DA and issued Notification dated 27.4.2005 levying antiD dumping duty at different rates. Writ petitions were filed
before the Kerala High Court, which by its order dated
12.7.2005, disposing of the writ petitions, directed the
incumbent DA to grant hearing on the issues raised in the
writ petitions and issue orders modifying the final
findings to the extent required. The order of the High
E Court was challenged before the Supreme Court, which,
suspending the operation of the judgment of the High
Court, directed the parties to pursue the remedy before
the Customs, Excise and Service Tax Appellate Tribunal
u/s 9C of the Act. The Tribunal, ultimately, dismissed the
F appeals and confirmed the levy of anti-dumping duty in
terms of Notification dated 27.4.2005, holding 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,
G therefore, the persons affected had no right to be heard
before imposition of the duty.
In the instant appeals, during the course of hearing,
it was conceded that the function of DA was not
H legislative in nature and, thus, the contentions of the
AUTOMOTIVE TYRE MANUFACTURERS ASSOCIATION v. 201
DESIGNATED AUTHORITY
parties boiled down to the questions: (1) "whether the
A
function of the DA is administrative or quasi-judicial in
character"; and (2) "whether or not the decision of the
DA dated 9th March, 2005, returning the final findings in
terms of Rule 17 of the 1995 Rules is in breach of the
principles of natural justice, resulting in vitiating the
B
subject notification under Rule 18 of the said Rules."
Partly allowing the appeals, the Court
HELD:
1.1 For determining whether a power is an
administrative power or a quasi-judicial power, regard
must be had to: (i) the nature of the power conferred; (ii)
c
the person or persons on whom it is conferred; (iii) the
framework of the law conferring that power; (iv) the o
consequences ensuing from the exercise of that power;
and (v) the manner in which that power is expected to be
exercised. [para 49] [255-8-C]
Province of Bombay vs. Khushaldas S. Advani & Ors.
1950 SCR 621 = 1950 AIR 222; Jaswant Sugar Mills Ltd.,
Meerut Vs. Lakshmi Chand & Ors. 1963 Supp (1) SCR 242
- relied on.
A.K. Kraipak & Ors. Vs. Union of India & Ors. 1970 (1)
SCR 457 = 1969 (2) SCC 262 - referred to
E
F
1.2 Keeping in view the scheme of the Tariff Act read
with the 1995 Rules and the principles, particularly, the
first principle enunc!:1ted in Khusa/das S. Advani's case,
this is an obvious case where the DA exercises quasijudicial functions and is bound to act judicially. A cursory G
look at the relevant Rules would show that the DA
determines the rights and obligations of the 'interested
parties' and by applying objective standards based on
the material/information/evidence presented by the
H
202
SUPREME COURT REPORTS
[2011] 1 S.C.R.
A exporters, foreign producers and other 'interested parties'
by applying the procedure and principles laid down in the
1995 Rules. Rule 5 of the 1995 Rules provides that the
DA shall initiate an investigation so as to determine the
existence, degree and effect of any alleged dumping
s upon the receipt of a written application by or on behalf
of the domestic industry. When the DA has decided to
initiate an investigation, Rule 6 requires that a public
notice shall be issued to all the interested parties as
mentioned in Rule 2(c), as also to industrial users of the
c product and to the representatives of the consumer
organisations in cases when the product is commonly
sold at the retail level. It is manifest that while determining
the existence, degree and effect of the alleged dumping,
the DA determines a '/is' between persons supporting the
0 levy of duty and those opposing the said levy. [para 52]
[257-E-H; 258-A-B]
1.3 Further, it is also clear from the scheme of the
Tariff Act and the 1995 Rules that the determination of
existence, effect and degree of alleged dumping is on the
E basis of criteria mentioned in the Tariff Act and 1995
Rules, and an anti-dumping duty cannot be levied unless,
on the basis of the investigation, it is established that
there is: (i) existence of dumped imports; (ii) material
inju..Y to the domestic industry and, (iii) a causal link
F between the dumped imports and the injury. Rule 10 of
the Rules lays down the criteria for the determination of
the normal value, export price and margin of dumping,
while Rule 11 deals with the determination of injury, which
according to Annexure II to the 1995 Rules, is based on
G positive evidence and involves an objective examination
of both: (a) the volume and the effect of the dumped
imports on prices in the domestic market for like
products, and (b) the consequent impact of these imports
on domestic producers of such products. It is evident
H that the determination of injury is premised on an
•
AUTOMOTIVE TYRE MANUFACTURERS ASSOCIATION v. 203
DESIGNATED AUTHORITY
objective examination of the material submitted by the
A
'-"r
parties. [para 53) [258-C-G)
S&S Enterprise Vs. Designated Authority & Ors. 2005 (2)
SCR255 = 2005 (3 ) sec 337 - relied on
1.4 Moreover, under Rule 6(7) of the 1995 Rules, the
B
••
DA is required to make available the evidence presented
to it by one party to other interested parties, participating
+
in the investigation. It is also pertinent to note that Rule
12 of the 1995 Rules which deals with the preliminary
findings, explicitly provides that such findings shall c
"contain sufficiently detailed information for the
preliminary determinations on dumping and injury and
shall refer to the matters of fact and law which have led
to arguments being accepted or rejected." A similar
stipulation is found in relation to the final findings
D
recorded by the DA under Rule 17(2) of the 1995 Rules.
[para 53) [258-F-H; 259-A]
1.5 Above all, Section 9C of the Tariff Act provides for
an appeal to the Tribunal against the order of
E
determination or review thereof regarding the existence,
degree and effect of dumping in relation to imports of any
article, which order, obviously has to be based on the
determination and findings of the DA. The cumulative
effect of all these factors leads to an irresistible
F
conclusion that the DA performs quasi-judicial functions
under the Tariff Act read with the 1995 Rules and is
bound to act judicially. [para 53] [259-A-C]
2.1 It is trite that rules of "natural justice" are not
embodied rules. The phrase "natural justice" is also not G
'_,....!.-
capable of a precise definition. The underlying principle
of natural justice, evolved under the com"!lon law, is to
check arbitrary exercise of power by the State or its
functionaries. Therefore, the principle implies a duty to
H
-
204
SUPREME COURT REPORTS
[2011] 1 S.C.R.
A act fairly Le. fair play in action. [para 55] [259-E]
A.K. Kraipak & Ors. Vs. Union of India & Ors. 1970 (1)
SCR 457 = 1969 (2) SCC 262; and Mohinder Singh Gill &
Anr. Vs. The Chief Election Commissioner, New Delhi & Ors.
1978 (2) SCR 272 = 1978 (1) SCC 405; and Swadeshi
8 Cotton Mills Vs. Union of India 1981 (2) SCR 533 = 1981
(1) sec 664 - relied on.
2.2 It is well settled that unless a statutory provision,
either specifically or by necessary implication excludes
C the application of principles of natural justice, because
in that event the Court would not ignore the legislative
mandate, the requirement of giving reasonable
opportunity of being heard before an order is made, is
generally read into the provisions of a statute, particularly,
D when the order has adverse civil consequences which
obviously cover infraction of property, personal rights
and material deprivations for the party affected. The
principle holds good irrespective of whether the power
conferred on a statutory body or Tribunal is
E administrative or quasi-judicial. It is equally trite that the
concept of natural justice can neither be put in a straitjacket nor is it a general rule of universal application.
Undoubtedly, there can be exceptions to the said
doctrine. The question whether the principle has to be
F applied or not is to be considered bearing in mind the
express language and the basic scheme of the provision
conferring the power; the nature of the power conferred
and the purpose for which the power is conferred and the
final effect of the exercise of that power. It is only upon a
G consideration of these matters that the question of
application of the said principle can be properly
determined. [Para 58] [261-F-H; 262-A-C]
H
Union of India Vs. Col. J.N. Sinha & Anr. (1970) 2 SCC
458 - relied on
+
AUTOMOTIVE TYRE MANUFACTURERS ASSOCIATION v. 205
DESIGNATED AUTHORITY
2.3 In light of the legal position and the elaborate
A
procedure prescribed in Rule 6 of 1995 Rules, which the
DA is obliged to adhere to while conducting
investigations, duty to follow the principles of natural
justice is implicit in the exercise of power conferred on
him under the said Rules. In so far as the instant case is
B
concerned, though it was sought to be pleaded on behalf
of the respondents that the incumbent DA had issued a
-r
common notice to the Advocates for ATMA and Ningbo
Nylon, for oral hearing on 9.3.2005, however, there is no
document on record indicating that pursuant to ATMA's c
letter dated 24.1.2005, notice for oral hearing was issued
to them by the incumbent DA. Moreover, the alleged
opportunity of oral hearing on 9.3.2005, being in relation
to the price undertaking offer by Ningbo Nylon, cannot
be likened to a public hearing contemplated under Rule
0
_
__.__
6(6) of the 1995 Rules. [para 59] [262-D-G]
2.4 The procedure prescribed in the 1995 Rules
imposes a duty on the DA to afford to all the parties, who
have filed objections and adduced evidence, a personal
hearing before taking a final decision in the matter. Even
E
written arguments are no substitute for an oral hearing.
A personal hearing enables the authority concerned to
"""'-1"
watch the demeanour of the witnesses etc. and also clear
up his doubts during the course of the arguments.
However, as held in Gullapalli, if one person hears and
F
. other decides, then personal hearing becomes an empty
formality. In the instant case, admittedly, the entire
material had been collected by the predecessor of the
DA; he had allowed the interested parties and/or their
• _.._
representatives to present the relevant information before
G
him in terms of Rule 6(6), but the final findings in the form
of an order were recorded by the successor DA, who had
no occasion to hear the appellants. The final order
passed by the new DA offends the basic principle of
natural justice. Thus, the impugned notification having
H
206
SUPREME COURT REPORTS
[2011] 1 S.C.R.
A been issued on the basis of the final findings of the DA,
who failed to follow the principles of natural justice,
---·
cannot be sustained. Since the recommendation of the
DA stands vitiated on account of non-compliance with
the basic principle of audi alteram partem, the decision
B of the Tribunal is set aside and the Notification No.36/
2005-Cus., dated 27.4. 2005, is quashed. [para 59, 61 and
64] (262-F-H; 263-A-C-E; 265-B-C]
Gul/apa/li Nageswara Rao & Ors. Vs. Andhra Pradesh
c State Road Transport Corporation & Anr. AIR 1958 SC 308
- relied on.
3.1 As regards the refund of the duty already paid and
collected, it is trite law that in~the case of indirect taxes
like central excise duties and customs duties, the tax
D collected by. the State without the authority of law, shall
not be refunded to the petitioner unless he alleges and
establishes that he has himself borne the burden of the
said duty and that he has not passed on the burden of
duty to a third party. In such a situation, the doctrine of
E unjust enrichment comes into play. (para 61] (263-E-H]
Mafatlal Industries Ltd. & Ors. Vs. Union of India & Ors.
1996 (10) Suppl. SCR 585 = 1997 (5) SCC 536 - followed.
--r·
3.2 In the instant case, the DA, during the sunset
F review (Notification No.14120/2008-DGAD dated 31.3.2009)
had recorded a clear finding to the effect that the Chinese
exporters had been underselling below the non-injurious
price to the tune of 25-20% during the period of
investigation. It is, therefore, manifest that the burden of
G anti-dumping duty had been absorbed by the exporters.
-4....·
The said finding of .fact attained finality in as much as it
had not been assailed by any of the interested parties.
In the light of the fact that the importers, viz. ATMA and
its constituent members have passed on the burden of
H the levy to third person(s), it follows that members of
...
AUTOMOTIVE TYRE MANUFACTURERS ASSOCIATION v. 207
DESIGNATED AUTHORITY
ATMA cannot claim refund of the anti-dumping duty A
levied in terms of the Notification No.3612005-Cus. ATMA
and its constituent members have neither pleaded nor
adduced any evidence to show that they had not passed
on the burden of the duty to any other person. In an~·
case, the appellants cannot claim refund of duty already
B
levied in as much as they have not specifically
challenged the findings of the sunset review and,
+
therefore, the findings in relation to the existence of
dumped imports, material injury to domestic industry and
causal link between dumped imports and material injury c
to domestic industry remain unchallenged. In that view
of the matter, particularly, when the existence of dumping
has not been put in issue, refund of the duty to any of
the appellants would be inconsistent with the object and
scheme of the Tariff Act and the 1995 Rules. [para 62, 63]
D
[264-D-H; 265-A-B]
Shri Radheshyam Khare & Anr. Vs. The State of Madhya
Pradesh & Ors. AIR 1959 SC 1440; Shivji Nathubhai Vs.
Union of India & Ors. 1960 SCR 775 = 1960 AIR SC 606;
Shankarlal Aggarwa/a & Ors. Vs. Shankarla/ Poddar & Ors.
E
AIR 1965 SC 507; S.K. Bhargava Vs. Collector, Chandigarh
& Ors. 1998 (2) SCR 1158 =1998 (5) SCC 170; Sahara India
~
(Firm), Lucknow Vs. Commissioner of Income Tax, Central-I
& Anr. 2008 (6) SCR 427 = 2008 (14) sec 151; PTC India
Limited Vs. Central Electricity Regulatory Commission 2010
F
(3) SCR 609 = (2010) 4 SCC 603; Designated Authority (AntiDumping Directorate), Ministry of Commerce Vs. Haldor
Topsoe A/S (2000) 6 SCC 626; Reliance Industries Ltd. Vs.
Designated Authority & Ors. 2006 (6) Suppl. SCR 1=2006
.
__..._
(10) SCC 368 and J.K. Industries Vs. Union of India SLP (C)
G
No.11061 of 2005, Tata Chemicals Limited (2) Vs. Union of
India & Ors. 2008 (5) SCR 320 = 2008 (17) SCC 180; Tata
Chemicals Limited Vs. Union of India & Ors. (2007) 15 SCC
596; State of T.N. Vs. K. Sabanayagam & Anr. 1997 (5)
~uppl. SCR 345 =1998 (1) SCC 318; and Godawat Pan
H
208
SUPREME COURT REPORTS
[2011] 1 S.C.R.
A Masala Products J.P. Ltd. & Anr. Vs. Union of India & Ors.
2004 (3) Suppl. SCR 239 = 2004 (7) SCC 68; Maneka
Gandhi vs. Union of India & Anr. 1978 (2) SCR 621 = 1978
(1) SCC 248; SBP & Co. Vs. Patel Engineering Ltd. & Anr.
2005 (4) Suppl. SCR 688 =2005 (8) SCC 618; and C.B.
B Gautam Vs. Union of India & Ors. 1992 (3) Suppl. SCR
12 = 1993 (1) SCC 78; The Cannanore Spinning and
Weaving Mills Ltd. Vs. Collector of Customs and Central
Excise, Cochin & Ors. (1969) 3 SCC 221; Hukam Chand Etc.
Vs. Union of India & Ors. 1973 (1) SCR 896 = 1972 (2) SCC
c 601; Orissa State Electricity Board & Anr. Vs. Indian
Aluminum Co. Ltd. (1975) 2 SCC 431; Regional Transport
Officer, Chittoor & Ors. Vs. Associated Transport Madras (P)
Ltd. & Ors. 1981 (1) SCR 627 = 1980 (4) SCC 597; Mahabir
Vegetable Oils (P) Ltd. & Anr. Vs. State of Haryana & Ors.
D 2006 (2) SCR 1172 = 2006 (3) SCC 620; and Baku/ Cashew
Co. & Ors. Vs. Sales Tax Officer, Qui/on & Anr. 1986 (1)
SCR 610 =1986 (2) SCC 365; State of Madhya Pradesh &
Anr. Vs. Dadabhoy's New Chiri Miri Ponri Hill Colliery Co. Pvt.
Ltd. 1972 (2) SCR 609 = 1972 (1) SCC 278; Yudhishter
Vs. Ashok Kumar1987 (1) SCR 516 = 1987 (1) SCC 204;
E Bhavnagar University Vs. Palitana Sugar Mill (P) Ltd. & Ors.
2002 (4) Suppl. SCR 517 = 2003 (2) SCC 111; Shenyang
Matsushita S. Battery Co. Ltd. Vs. Exide Industries Ltd. & Ors.
2005 (2) SCR 332 =2005 (3) SCC 39; Reserve Bank of India
Vs. Peerless General Finance and Investment Co. Ltd. & Ors.
F 1987 (2) SCR 1 = 1987 (1) SCC 424; Shri Sitaram Sugar
Company Ltd. & Anr. Vs. Union of India & Ors. 1990 (1) SCR
909 = 1990 (3) SCC 223; Dalmia Cement (Bharat) Ltd. &
Anr. Vs. Union of India & Ors. 1996 (1)
Suppl.
SCR 825 = 1996 (10) SCC 104, Ramesh Chandra
G Kachardas Porwa/ & Ors. Vs. State of Maharashtra & Ors.
1981 (2) SCR 866 = 1981 (2) SCC 722; Saraswati Industrial
Syndicate Ltd. & Ors. Vs. Union of India 1975 (1) SCR
956 = 1974 (2) SCC 630 and P.M. Ashwathanarayana Setty
& Ors. Vs. State of Karnataka & Ors. 1988 (3) Suppl.
H
SCR 155 = 1989 (1) Suppl. SCC 696; The State of Gujarat
+
AUTOMOTIVE TYRE MANUFACTURERS ASSOCIATION v. 209
DESIGNATED AUTHORITY
& Anr. Vs. Shri Ambica Mills Ltd., Ahmedabad & Anr. (1974)
A
4 SCC 656; Jardine Henderson Limited Vs. Workmen & Anr.
(1962) Supp 3 SCR 582; Mis. Krishnamurthi & Co. Etc. Vs.
State of Madras & Anr. 1973 SCR 54= (1973) 1 SCC 75;
Empire Industries Ltd. & Ors. Vs. Union of India & Ors. 1985
(1) Suppl. SCR 292 = 1985 (3) SCC 314; The New Prakash
B
Transport Co. Ltd. Vs. The New Suwarna Transport Co. Ltd.
1957 AIR 232 = 1957 SCR 98; Haryana Financial
Corporation & Anr. Vs. Kai/ash Chandra Ahuja 2008 (10)
SCR 222 = 2008 (9) SCC 31; State Bank of Patia/a & Ors.
Vs. S.K. Sharma 1996 (3) SCR 972 = 1996 (3) SCC 364; c
Ossein and Gelatine Manufacturers' Association of India Vs.
Modi Alkalies and Chemicals Limited & Anr. 1989 (3)
SCR 815 = 1989 (4) SCC 264; General Manager, Eastern
Railway & Anr;. Vs. Jawala Prasad Singh 1970 (3) SCR 271 =
1970 (1) SCC 103; Madhya Pradesh Industries Ltd. Vs.
D
Union of India & Ors. (1966) 1 SCR 466; J.A. Naiksatam Vs.
Prothonotary & Senior Master, High Court of Bombay & Ors.
2004 (5) Suppl. SCR 287= 2004 (8) sec 653; R Vs.
Immigration Appeal Tribunal & Anr. (1988] 2 All ER 65;
Selvarajan Vs. Race Relations Board (1976] 1 All ER 12;
E
Gramophone Company of India Ltd. Vs. Birendra Bahadur
Pandey & Ors. 1984 (2) SCR 664 =1984 (2) SCC 534; Mis.
Tractoroexport, Moscow Vs. Mis Tarapore & Company & Anr..
1970 (3) SCR 53 = 1969 (3) SCC 562; Jolly George
Varghese & Anr. Vs. The Bank of Cochin 1980 (2) SCR -
913 = 1980 (2) SCC 360; Union of India Vs. Mohan Lal F
Capoor (1973) 2 SCC 836; P. Sainbamurthy & Ors. Vs. State
of Andhra Pradesh & Anr. (1987) 1 SCC 362; Union of India
Vs. K.M. Shankarappa 2000 (5) Suppl. SCR 117 = 2001
(1) SCC 582; and B.B. Rajwanshi Vs. State of U.P. & Ors.
1988 (3) SCR 469 =1988 (2) SCC 415; Jayantilal Amrit Lal G
Shodhan Vs. F.N. Rana & Ors 1964 (5) SCR 294; Managing
Director, ECIL, Hyderabad & Ors. Vs. B. · Karunakar & Ors.
1993 (2) Suppl. SCR 576 = 1993 (4) SCC 727; Union of
India & Anr. Vs. Cynamide India & Anr. 1987 (2) SCR 841 =
H
210
SUPREME COURT REPORTS
[2011] 1 S.C.R. -
A 1987 (2) SCC 720; Shri Sita Ram Sugar Company Limited
& Anr. Vs. Union of India & Ors. 19~0 (1) SCR 909 = 1990
---·
(3) SCC 223; and Viveka Nand Sethi Vs. Chairman, J&K
Bank Ltd. & Ors. 2005 (3) SCR 1095 = 2005 (5) sec 337 -
cited.
B
Case Law Reference:
1950 SCR 621
relied on
para 19 and 50
+
1959 SC 1440
cited
para 19
c
1960 SCR 775
cited
para 19
AIR 1965 SC 507
cited
para 19
1998 (2) SCR 1158
cited
para 19
D
[1963] Supp. 1 S.C.R. 242 relied on
para 19 and 51
2008 (6) SCR 427
cited
para 19
2010 (3) SCR 609
cited
para 19
E
(2000) 6 sec 626
cited
para 19
2006 (6) Suppl. SCR 1
cited
para 20
SLP (C) No.11061 of 20Q5 cited
para 20
2008 (5) SCR 320
cited
para 20
F
c2001) 15 sec 596
cited
para 20
1997 (5) Suppl. SCR 345
cited
para 20
2004 (3) Suppl. SCR 239
cited
para 20
G
1978 (2) SCR 272
cited
para 21
....._,
1978 (2) SCR 621
cited
para 22
2005 (4j Suppl. SCR 688
cited
para 22
H
1992 (3) Suppl. SCR 12
cited
para 22
AUTOMOTIVE TYRE MANUFACTURERS ASSOCIATION v. 211
DESIGNATED AUTHORITY
AIR 1958 SC 308
relied on
para 23
A
·--
(1969) 3 sec 221
cited
para 24
1973 (1) SCR 896
cited
para 24
(1975) 2 sec 431
cited
para 24
B
1981 (1) SCR 627
cited
para 24
__....
2006 (2) SCR 1172
cited
para 24
1986 (1) SCR610
cited
para 24
2005 (2 ) SCR 255
relied on
para 26 and 53 c
1972 (2) SCR 609
cited
para 27
1987 (1) SCR 516
cited
para 27
2002 (4) Suppl. SCR 517
cited
para 28
D
2005 (2 ) SCR 332
cited
para 30
1987 ( 2) SCR 1
cited
para 32
1990 (1) SCR 909
cited
para 33
E
1996 (1) Suppl. SCR 825
cited
para 33
_,,..
1981 (2) SCR 866
cited
para 33
/
975 ( 1) SCR 956
cited
para 33
·F
1988 ( 3) Suppl. SCR 155 cited
para 33
(1974) 4 sec 656
cited
para 33
(1962) Supp 3 SCR 582
cited
para 33
'~
1973 SCR 54
cited
para 33
G
1985 ( 1 ) Suppl. SCR 292 cited
para 33
1957 SCR 98
cited
para 34
2008 (10 ) SCR 222
cited
para 34
H
212
SUPREME COURT REPORTS
(2011] 1 S.C.R.
A
1996 ( 3) SCR 972
cited
para 34
1989 ( 3) SCR 815
cited
para 34
1970 ( 3) SCR 271
cited
para 35
B
(1966) 1 SCR 466
cited
para 35
2004 (5 ) Suppl. SCR 287
cited
para 35
[1988) 2 All ER 65
cited
para 35
[1976] 1 All ER 12
cited
para 35
c
1984 ( 2) SCR 664
cited
para 35
1970 ( 3 ) SCR 53
cited
para 35
~·
1980 ( 2 ) SCR 913
cited
para 35
D
(1973) 2 sec 836
cited
para·37
(1987) 1 sec 362
cited
para 38
2000 (5) Suppl. SCR 117
cited
para 38
E
1988 ( 3) SCR 469
cited
para 38
[1964) 5 SCR 294
cited
para 38
1993 (2) Supp\ SCR 576
cited
para 40
F
1987 (~) SCR 841
cited
para 43
1990 (1) SCR 909
cited
para 43
2005 (3 ) SCR 1095
cited
para 43
1970 (1) SCR 457
referred to
para 49
G
1981 ( 2) SCR 533
relied on
para 57
(1970) 2 sec 458
relied on
para 58
1996 (10) Suppl. SCR 585 followed
para 61
H
/AUTOMOTIVE-,TYRE MANUFACTURERS ASSOCIATION v. 213
DESIGNATED AUTHORITY
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 949
A
·-
of 2006.
From the Judgment & Order dated 9.9.2005 of the
Customs, Excise and Service Tax Appellate Tribunal, New Delhi
in Appeal No. C/601/05-AD and final Order No. 19/05-AD.
B
WITH
C.A. No. 8012 of 2010 .
.:
C.A. No. 2007 of 2006.
c
C.A. No. 2115 of 2006.
H.P. Raval, Ld. ASG, S.K. Bagaria, V. Shekhar and Harish
Chandra, Meenakshi Arora, Sharad Bhansali, Jitendra Singh,
Saurabh S. Sinha, Poli Kataki, Nitya Bagaria, P.K. Manohar,
D
Shalinder Saini, Shweta Verma, Anriudh Sharma, A.K. Sharma,
Anil Katiyar, G. Umapathy, Rajesh Sharma, Rakesh K. Sharma,
Rashmi Malhotra, Sunita Rani Singh and B.K. Prasad for the
Respondents.
The Judgment of the Court was delivered by
E
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, dated 9th September 2005,
passed by the Customs, Excise and Service Tax Appellate
F
Tribunal (for short "the Tribunal) whereby the appeals filed by
the appellants herein, have been dismissed and the levy of antidumping duty, imposed under Section 9A of the Customs Tariff
Act, 1975 (for short "the Tariff Act") vide Notification 36/2005u-
Cus dated 27th April 2005 has been affirmed.
G
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
H
214
SUPREME COURT REPORTS
[2011] 1 S.C.R.
A shall refer to the facts in Civil Appeal No. 949 of 2006 as
illustrative:
r'
The appellant in this appeal viz. Automotive Tyre
Manufacturers Association (for short "ATMA"), is an association
8 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
C 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 (hereinafter referred to as "the
D 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
E principle contemplated in para 7 of Annexure I to the 1995
Rules.
3. Taking cognizance of the application, on 29th October
2003, the DA initiated investigation by issuing notification in
F terms of Rules 5 and 6 of the 1995 Rules, indicating the period
of investigation from 1st April 2002 to 30th June 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
G Kg on NTCF originating in and exported from China. The
~
H
recommendations made in the preliminary findings were
accepted by the Central Government, and provisional antidumping duty was, accordingly, imposed vide Notification No.
72/2004-Cus, published on 26th July 2004. It would be of some
AUTOMOTIVE TYRE MANUFACTURERS ASSOCIATION v. 215
DESIGNATED AUTHORITY [D.K. JAIN, J.]
significance to note here that the 2nd proviso to Rule 13 of the
A
·~
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.
B
4. Being aggrieved, one of the constituent members of
ATMA viz. Apollo Tyres Ltd. filed Writ Petition No. SCN8747/
2004 before the Gujarat High Court, challenging the preliminary
findings mainly on the ground that the investigation proceedings c
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,
D
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
E
1st September 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. On 6th January 2005, the appellants
herein, in particular ATMA an.d Ningbo Nylon, a Chinese
F
exporter, requested the newly appointed DA to grant a fresh
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 l13tter of protest to the DA, inter alia,
G
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.
H
216
SUPREME COURT REPORTS
[2011) 1 S.C.R.
A
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 January 2005, the High Court
B 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
c
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
D 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. 68786879 of 2005 challenging the orders of the High Court of
E Rajasthan dated 25th January 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.
F 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
G
the various interests or to adjudicate or to decide upon
...._,..
rights of any party to fis."
Aggrieved by the said order, JK Industries preferred SLP
(C) 11061 of 2005 before this Court. The said SLP was
dismissed on 13th May 2005 in view of the alternative remedy
H
AUTOMOTIVE TYRE MANUFACTURERS ASSOCIATION v. 217
DESIGNATED AUTHORITY [D.K. JAIN, J.]
!
available to the appellant. The Court, inter a/ia, observed that:
A
,_
"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 by the Appellate Authority of any judicial review
B
sought for thereafter by either party."
12. The Central Government accepted the final findings of
the DA, and issued Notification No. 36/2005-Cus dated 27th
April 2005 levying anti-dumping duty at different rates varying c
from US $ 0.54 per 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
D
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 High Court.
14. By a common order dated 12th July 2005, the High
E
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.
F
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
G
~--t
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
Ningbo Nylon and confirmed the levy of anti-dumping duty in
H
218
SUPREME COURT REPORTS
[2011] 1 S.C.R.
A terms of Notification No. 36/2005-Cus. Dealing with the main
grievance of the appellants viz. denial of an opportunity of
he~ring 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
B 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 1995
Rules read with Section 9A(1) of the Tariff Act imposing antidumping duty upon importation of the subject article in India is
c purely a legislative function; (ii) the process of imposing antidumping duty which is legislative in nature does not decide any
existing dispute or '/is' 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
0
information collected from the exporters-importers and a large
number of other interested parties; (iii) there can never be a
'/is' 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 antiE 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
F Parliament, in its wisdom, for an impo~t l.i~e the anti-dumping
duty, which arises due to and has nexu$' ~ith the interest of
domestic industry, provides a mechaniSin 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
G 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
H Parliament, through its agencies, as per its rules of business,
+
AUTOMOTIVE TYRE MANUFACTURERS ASSOCIATION v. 219
DESIGNATED AUTHORITY [D.K. JAIN, J.]
there will be absolutely no scope for any judicial tribunal to
A
·-
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 !ead to a finding of irregularity
B
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 antic
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.
D
...........
18. Hence the present appeals.
Submissions made on behalf of the appellants:
19. Mr. S.K. Bagaria, learned senior counsel appearing
E
on behalf of ATMA, piloting the arguments on behalf of the
appellants, referring to various provisions of the Tariff Act and
.--y
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 F
Madhya Pradesh & Ors.2; Shivji Nathubhai Vs. Union of India
& Ors. 3; Shankarla/ Aggarwala & Ors. Vs. Shankarlal Poddar
& Ors4• S.K. Bhargava Vs. Collector, Chandigarh & Ors. 5,
Jaswant Sugar Mills Ltd., Meerut Vs. Lakshmi Chand & Ors. 6;
4-· 1. AIR 1950 SC 222.
G
2. AIR 1959 SCR 1440.
3. AIR 1960 SC 606.
4. AIR 1965 SC 507.
5. AIR (1998) 5 sec 110.
6. [1963] Supp. 1 S.C.R. 242.
H
220
SUPREME COURT REPORTS
[2011] 1 S.C.R.
A Sahara India (Firm), Lucknow Vs. Commissioner of Income
Tax, Central-/ & Anr.