2011 (1) TMI 713 - HC - Customs

Court sets aside orders, directs new unbiased officer, fresh enquiry, strict adherence to Customs Tariff Act

SRF LTD. Versus REFEX REFRIGERANTS LTD.

The court set aside the orders passed by the designated authority due to procedural irregularities and bias. The Government of India was directed to ... Provisional anti-dumping duty - According to the petitioner, the complainant himself is an importer and therefore, he does not fall within the fold of a ‘domestic industry’ so as to maintain the complaint - in view of the fact that serious disputed questions of fact regarding the stature of the complainant, which will have the impact of cutting the root, are involved in the matter, we set aside the orders date 19-4-2010 and 21-5-2010 passed by the third respondent and direct the first respondent/Government of India to-appoint/nominate another officer in the place of the third respondent to act as a Designated Authority for this case, within a period of four weeks from the date of receipt of a copy of this order. Issues Involved:1. Allegations of dumping by the petitioner.2. Provisional anti-dumping duty imposition.3. Allegations of bias and procedural irregularities by the designated authority.4. Status of the complainant as a domestic industry or importer.5. Compliance with principles of natural justice.Detailed Analysis:1. Allegations of Dumping by the Petitioner:The complainant alleged that the petitioner was dumping 1,1,1,2-Tetraflouoroethane (R.134a) originating from China and Japan into the Indian market, thereby harming the domestic industry. This led to the initiation of an anti-dumping investigation by the designated authority under the Customs Tariff Act, 1975, and the related rules.2. Provisional Anti-Dumping Duty Imposition:Based on the preliminary findings dated 19-2-2010, the designated authority recommended provisional anti-dumping duties on the imports from China and Japan. This led the petitioner to file W.P. No. 6952 of 2010, seeking to direct the authorities to consider their representations and grant a personal hearing. A learned single judge directed the designated authority to consider the petitioner's objections and provide a personal hearing, while also staying the implementation of the provisional order pending a final decision.3. Allegations of Bias and Procedural Irregularities:The petitioner alleged bias and a pre-determined mindset by the designated authority, leading them to file W.P. No. 10709 of 2010, seeking the recusal of the designated authority and the appointment of an impartial officer. Despite an interim stay granted by a learned single judge on 12-5-2010, the designated authority proceeded to pass an order on 21-5-2010, which was seen as a violation of the principles of natural justice and the stay order. The court noted that the designated authority, being a quasi-judicial body, should have adhered to the stay order and not proceeded further without clarification.4. Status of the Complainant as a Domestic Industry or Importer:The petitioner contended that the complainant was also an importer and thus did not qualify as a 'domestic industry' under the relevant rules. This was a complex factual question that could not be resolved based solely on the affidavits and documentary evidence presented. The court recognized the need for a detailed factual inquiry to ascertain the complainant's status.5. Compliance with Principles of Natural Justice:The court highlighted the importance of adhering to the principles of natural justice, especially in quasi-judicial proceedings. The designated authority's actions, including bypassing the stay order and proceeding with the investigation, were found to be in violation of these principles. The court cited the Supreme Court's judgment in Ranjit Thakur v. Union of India, emphasizing that any judgment resulting from bias or lack of impartiality is a nullity.Conclusion:The court set aside the orders dated 19-4-2010 and 21-5-2010 passed by the designated authority due to procedural irregularities and bias. The Government of India was directed to appoint a new, unbiased officer to act as the designated authority within four weeks. This new authority was instructed to conduct the enquiry afresh, adhering strictly to the Customs Tariff Act, 1975, and the related rules, and to pass orders within six weeks. The preliminary report dated 19-2-2010 was not to be given effect until the new enquiry was completed. The court also directed the Registrar Judicial to inform the Supreme Court about the disposal of these matters, as requested by the Supreme Court in its order dated 13-12-2010.