By TIOL News Service

CHENNAI, DEC 29, 2014: PROVISIONAL Anti Dumping duty on Aluminium Alloy Wheels imported from China/Korea/Thailand was imposed vide Notification No 15/2014 Cus ADD dated 11.04.2014. As per Rule 17(1) of the Anti Dumping Rules, the Designated Authority shall within one year from the date of initiation of investigation submit the final findings to the Central Government. This one year period is extendable up to six months by the Central Government. In this case, the investigation was initiated on 10.12.2012 one year period expired on 09.12.2013. It was extended by three months upto 09.03.2014. The Designated Authority again requested for another extension on 03.03.2014. After more than a month and a half, the Government of India passed an order dated 30.4.2014 granting extension of time retroactively from 09.03.2014 up to 09.6.2014, in terms of the first proviso to Rule 17(1). The Petitioners challenge the same on the ground that such extension after expiry of last date (09.03.2014) is invalid.

Also the Designated Authority issued an electronic mail to all the parties on 29.5.2014 calling upon them to appear for a personal hearing at 5 pm on 30.5.2014. The Petitioners replied that the time granted was totally insufficient to reach Delhi for attending the personal hearing and requested postponement of the hearing at least by a day. However, the Designated Authority proceeded to finalise the issue. Pending Writ Petitions filed, the Designated Authority passed an order just in time, and kept it in a sealed cover. Thereafter, the respondents filed counter affidavits in the writ petitions and they were taken up for final hearing. The Petitioners allege violation of principles of natural justice as the hearing notice was received only the previous day after office hours and they could not attend the hearing.

After dealing extensively with the meaning and scope of the expression “extend” used in Rule 17 and various case laws, the High Court held:

Keeping the scheme of Section 9-A in mind, if we come to the Rules, it could be seen that the Rules were issued in exercise of the powers conferred by Sub-section (6) of Section 9-A read with Sub-section (2) of Section 9-B. It is only in the Rules that a time limit is prescribed for the determination of two things, namely (a) whether or not the article under investigation is being dumped in India, and (b) the amount of duty that is required to be levied for the purpose of removing the injury, where applicable to the domestic industry.

The Parent Act or the superior legislation does not prescribe any time limit for the conclusion of an enquiry. It is only the subordinate legislation, namely the Rules, that stipulates a time limit for the completion of the investigation and for the recording of the final findings.

The primary object of this legislation is to levy additional duties upon articles of import. Sections 9-A, 9-B and 9-C were inserted, with a view to neutralise the effect of articles of foreign origin being brought into India at less than their normal value. The only prescription with regard to any time limit, contemplated by the Act, is to be found in Sub-section (5) of Section 9-A. No time limit is prescribed therein either for the initiation of an investigation or for the recording of final findings. As a matter of fact, any delay in the recording of final findings, actually enures to the benefit of the person on whom anti-dumping duty is levied, since the levy comes into effect only from the date of issue of the notification. If we keep this fundamental aspect in mind, it will be clear that the time limit of one year prescribed under Rule 17(1) and the procedure prescribed in the first proviso thereto, is not intended to confer any benefit upon the importer in India or the exporter from outside the territory of India.

No right is created or gets vested in the importer, upon the expiry of the period stipulated in Rule 17(1). Similarly, no right which is vested in the importer is taken away by the extension of the period for conclusion of investigation. If a right is created in the importer, upon the expiry of the period of one year stipulated in Rule 17(1), then the extension of the period granted post facto, may infringe upon such a right. An inconclusive investigation, will never confer any right upon the person against whom the investigation is made. It will be a different story if the investigation is concluded and a finding in favour of the importer is recorded, since in such cases a right accrues.

But, in the case on hand, no right got created or accrued in favour of the petitioner, upon the expiry of either the original period, namely 09.12.2013, or upon the expiry of the period of first extension, namely 09.3.2014. This is also not a case where the retroactive extension ordered on 30.4.2014, sought to take away any vested right created in favour of the petitioner during the period from 09.3.2014 to 30.4.2014. If an order of extension does not either take away any vested right or extinguish any right sought to be created by efflux of time, such an extension cannot be assailed, on the sole ground that it was not granted, during the life of the thing itself. If the initiation of any investigation does not infringe upon any right, the continuance of the same also cannot. As a corollary, the abrupt termination of an investigation would not create any right that may get defeated upon the resumption of the investigation.

Therefore, it is clear that if the condition imposed by the provision of law to do a certain thing within a time frame is upon an authority (such as the Designated Authority in this case) and the consequences of the failure of that authority to comply with the condition, is to fall upon someone else (such as the persons in the domestic market) who have no control over the authority which is to perform the duty, then the provision of law cannot be construed as mandatory, but only directory.

Another simple test to determine whether a time limit stipulated in a rule is directory or mandatory, is to see whether there is any indication in the Rule itself about the consequences of non compliance with the same. If a statutory provision contains a prescription and also stipulates the consequences of non compliance with the condition, it would normally be taken to be mandatory. If the consequences of non compliance are not indicated, then, the provision has to be seen only as directory.

If the Parent legislation uses a word or expression, to mean something, the subordinate legislation cannot be taken to use the very same word or expression, to mean a different thing. The word "extension" used in the first proviso to Section 9-A(5), gives an indication that if an order of extension is passed after sunset review, the extended period will commence only from the date of the order of extension. By specifically providing for a situation, under the second proviso, where a sunset review commences "before the expiry of the period of five years", but fails to conclude before the said date, the interpretation to be given to the word extension is made as clear as a crystal. Therefore, the extension granted under the first proviso to Rule 17(1), after the expiry of the original period, was perfectly valid.

With regard to violation of principles of natural justice, the High Court held:

At the outset, there can be no two opinions about the fact that the notice of personal hearing granted by the Designated Authority to the petitioner as well as others, was completely insufficient. The notice for personal hearing was admittedly issued by electronic mail on 29.5.2014, calling upon the parties to appear on 30.5.2014, which happened to be a Friday. The Designated Authority could have, in his discretion adjourned the personal hearing to Monday, namely 02.6.2014. Yet, he did not do so.

It appears that a very crucial distinction has been lost sight of at all levels. An investigation by a Designated Authority under the Rules in question, is not like ( i ) a criminal charge, (ii) a domestic enquiry against an employee, or (iii) a quasi judicial proceeding where what is at stake is individualistic. An investigation by a Designated Authority, as seen from (a) GATT 1994, (b) the amended provisions of the Customs Tariff Act, 1975, and (c) the Customs Tariff (Identification, Assessment and Collection of Anti-Dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995, is in the nature of a multi-party assessment of the socio economic conditions that come to the fore when a product is imported into India.

All the information collected by the Designated Authority in the course of investigation, cannot and need not be shared with all the parties to the investigation. Whenever a party to an investigation claims confidentiality, the Designated Authority is obliged to accede to the same. The other parties cannot claim that there was violation of natural justice. Therefore, the dosage of the medicine of natural justice, to be administered to different patients, vary from case to case. In the case on hand, the dosage was adequate and the petitioner cannot ask for more. Hence the second contention of the petitioner is also liable to be rejected.

With regard to the challenge to the preliminary findings by the DGAD, the High Court held:

Insofar as the first two writ petitions are concerned, they relate to preliminary findings and the imposition of provisional duty. Their fate depends upon what the final order of the Designated Authority is going to be. The preliminary finding and the imposition of provisional duty will ultimately merge with the final findings, which have now been recorded by the Designated Authority and kept in a sealed cover. The moment the sealed cover is opened, the first two writ petitions will automatically become infructuous , in whichever way the final finding has gone. Therefore, the first two writ petitions are dismissed with the observation that the preliminary finding and the provisional duty challenged in those writ petitions will merge with the final findings.

(See 2014-TIOL-2399-HC-MAD-CUS)