2010 (3) TMI 310 - HC - Customs

Court allows challenge to Customs Tariff Rules, rejects anti-dumping duty claims. Pursue remedy under Customs Tariff Act.

The court ruled that the challenge to the validity of the Customs Tariff Rules, 1995 (prayer clause (a)) would be entertained. However, the challenges to ... Anti-dumping duty- challenge to Custom Tariff (Identification, Assessment and collection of anti-Dumping Duty on Dumped Article and Determination of injury) Rules, 1955 being ultra vires Article 14 of Constitution of India. Jurisdiction of Tribunal- preliminary objection of availability of alternative remedy and that Tribunal can look into validity of rules. Reliance placed on L. Chandrakumar’s case for Tribunals created under law. Article 323A and 323B contemplate establishment of Tribunals created under law. Article 323A and 323B contemplate establishment of Tribunals under statute which provide for such establishment and did not create them. Such Tribunal having independent statutory existence have power to test constitutional validity of statutory provisions. No power prima facie, conferred on Appellate Tribunal established under section 129 of custom act to decide validity of rules. Petition before High Court maintainable. Issues Involved:1. Validity of final findings and customs notification imposing anti-dumping duty.2. Constitutionality of the Customs Tariff Rules, 1995.3. Maintainability of the writ petition in light of available alternative remedy under Section 9-C of the Customs Tariff Act, 1975.Issue-wise Detailed Analysis:1. Validity of Final Findings and Customs Notification Imposing Anti-Dumping Duty:The petition challenges the final findings No.14/2/2007/DGAD dated 26th August 2009, and the consequent customs Notification No. 116/2009 dated 8th October 2009, issued by the Ministry of Finance. The petitioners sought the withdrawal or cancellation of these findings and notification and an injunction against the collection of anti-dumping duty imposed by the notification. The court noted that the petitioners had an alternative remedy available under Section 9-C of the Customs Tariff Act, 1975. The court emphasized that the investigation of facts, such as the determination of the margin of dumping, export price, normal value, and injury, is not suitable for writ jurisdiction and should be addressed through the appellate mechanism provided under the Act.2. Constitutionality of the Customs Tariff (Identification, Assessment and Collection of Anti-dumping Duty on Dumped Articles and Determination of Injury) Rules, 1995:The petitioners contended that these Rules were ultra vires to Article 14 of the Constitution of India. The court acknowledged that the Appellate Tribunal under Section 129 of the Customs Act does not have the power to decide the validity of these Rules. The court referenced the Supreme Court's decision in L. Chandrakumar v. Union of India, which clarified that Tribunals could test the constitutional validity of statutory provisions and rules, but their decisions are subject to scrutiny by a Division Bench of the High Court. The court concluded that the challenge to the validity of the Rules must be entertained by the High Court in its writ jurisdiction.3. Maintainability of the Writ Petition in Light of Available Alternative Remedy:The respondents raised a preliminary objection regarding the maintainability of the writ petition, arguing that an alternative remedy under Section 9-C of the Customs Tariff Act was available. The court agreed with this objection, citing precedents from the Supreme Court, including NITCO Tiles Ltd. v. Gujarat Ceramic Floor Tiles Mfg. Assn., H & R Johnson (India) Ltd. v. Union of India, and Assistant Collector of Central Excise, West Bengal v. Dunlop India Ltd. The court emphasized that Article 226 of the Constitution should not be used to bypass statutory procedures unless there are extraordinary circumstances. The court found no such extraordinary circumstances in this case and directed the petitioners to exhaust their alternative appellate remedy.Order:The court ruled that the challenge to the validity of the Rules (prayer clause (a)) would be entertained. However, the challenges related to the final findings and customs notification (prayer clauses (b) and (c)) were rejected, and the petitioners were directed to pursue their alternative remedy through the appellate authority. The court granted three weeks for the petitioners to file an appeal before the Appellate Authority and noted that the prayer for interim relief did not survive.