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

Provided that the Central Government may, in its discretion in special,,,Circumstances extend further the aforesaid period of one year by six months:

Provided further that in those cases where the designated __,,. -..,....~

authority has suspended the investigation on the acceptance of a price undertaking as provided in rule 15 and subsequently resumes the same on violation of the terms of the said undertaking, the period for which investigation was kept under suspension shall not be taken into account while calculating the period of said one year,

(b) recommending the amount of duty which, if levied, G , _> would remove the injury where applicable, to the domestic industry.

(2) The final finding, if affirmative, shall contain all ....,. information on the matter of facts and law and H

252 SUPREME COURT REPORTS [2011] 1 S.C.R.

A reasons which have led to the conclusion and shall also contain information regarding- ~~

(i) the names of the suppliers, or when this is impracticable, the supplying countries involved; B (ii) a description of the product which is sufficient for customs purposes; ,_

(iii) the margins of dumping established and a full + _explanation of the reasons for the methodology c used in the establishment and comparison Qf the export price and the normal value;

(iv) Considerations relevant to the injury determination; and D (v) the main reasons leading to the determination. .__.____ (3) The designated authority shall determine an individual margin of dumping for each known exporter or producer concerned of tha article under investigation:

Provided that in casks where the number of exporters, producers, importers or types of articles involved are so large as to make such determination impracticable, it may ~~

limit its findings either to a reasonable number of interested parties or articles by using statistically valid samples based on information available at the time of selection, or to the largest percentage of the volume of the exports from the country in question which can reasonably be investigated, and any selection, of exporters, producers, or types of articles, made under this proviso shall preferably be made in consultation with and with the consent of the exporters, producers or importers concerned: _..._ H Provided further that the designated authority shall,

AUTOMOTIVE TYRE MANUFACTURERS ASSOCIATION v. 253 DESIGNATED AUTHORITY [D.K. JAIN, J.] determine an individual margin of dumping for any exporter A --·~ or producer, though not selected initially, who submit necessary information in time, except where the number . of exporters or producers are so large that individual examination would be unduly burdensome and prevent the timely completion of the investigation. B (4) The designated authority shall issue a public notice ,,,._ recording its final findings.

20. Commencement of duty. - (1) The anti-dumping duty levied under rule 13 and rule 18 shall take effect from the c date of its publication in the Official Gazette.

(2) Notwithstanding anything contained in sub-rule (1)-

(a) where a provisional duty has been levied and where D /j,_, the designated authority has recorded a final finding of injury or where the designated authority has recorded a final finding of threat of injury and a further finding that the effect of dumped imports in the absence of provisional duty would have led to injury, the anti-dumping duty may be levied from the date of imposition of provisional duty; E

(b) in the circumstances referred to in sub-section (3) of -···..,...- section 9A of the Act, the anti-dumping duty may be levied retrospectively from the date commencing ninety days prior to the imposition of such provisional duty: F Provided that no duty shall be levied retrospectively on imports entered for home consumption before initiation of the investigation:

> Provided further that in the cases of violation of price G ' undertaking referred to in sub-rule (6) of rule 15, no duty shall be levied retrospectively on the imports which have entered for home consumption before the violation of the terms of such undertaking. H

254 SUPREME COURT REPORTS [2011] 1 S.C.R.

A Provided also that notwithstanding anything contained in the foregoing proviso, in case of violation of such undertaking, the provisional duty shall be deemed to have been levied from the date of violation of the undertaking or such date as the Central Government may specify in B each case.

21. Refund of duty. - (1) If the anti-dumping duty imposed by the Central Government on the basis of the final finding~ of the ·investigation conducted by the designated authority is higher than the c provisional duty already imposed and collected, the differential shall not be collected from the importer.

. (2) If, the anti-dumping duty fixed after the conclusion of the investigation is lower than the provisional duty already imposed and collected, the differential shall be refunded to tt:ie importer.

(3) If the provisional duty imposed by the Central Government is withdrawn in accordance with the provisions of sub-rule (4) of rule 18, the provisional duty already imposed and collected, if any, shall be refunded to the importer."

48. Thus, the first and foremost question for adjudication is the nature of proceedings before the DA appointed by the F Central Government under Rule 3 of the 1995 Rules for conducting investigations for the purpose of levy of anti- dumping duty in terms of Section 9A of the Act. To put it differently, the question is whether the decision of the DA is legislative, administrative or quasi-judicial in character? G However, for the purpose of the present case, we shall confine our discussion only to the question as to whether the function of the DA is administrative or quasi-judicial in character as Mr. ·Rawal, learned counsel appearing for the DA had finally conceded before us that it is not legislative in nature. H

AUTOMOTIVE TYRE MANUFACTURERS ASSOCIATION v. 255 DESIGNATED AUTHORITY [D.K. JAIN, J.)

49. More often than not, it is not easy to draw a line demarcating an administrative decision from a quasi-judicial decision. Nevertheles~. the aim of both a quasi-judicial function as well as an administrative function is to arrive at a just decision. In AK. Kraipak & Ors. Vs. Union of India & Ors. 62, this Court had observed that the dividing line between an administrative power and a quasi-judicial power is quite thin and is being gradually obliterated. 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) the person or persons on whom it is conferred; (iii) the c framework of the law conferring that power; (iv) the consequences ensuing from the exercise of that power and (v) the manner in which that power is expected to be exercised.

50. The first leading case decided by this Court on the point was Khushaldas S. Advani (supra). In that case, while dealing with the question whether the governmental function of requisitioning property under Section 3 of the Bombay Land Requisition Ordinance, 1947 was an administrative or quasi- judicial function, Das J. (as His Lordship then was), while concurring with the majority, in his separate judgment, upon reference to a long line of cases expressing divergent views, deduced the following principles, which could be. applied for determining the question posed in para 48 supra:

"(i) that if a statute empowers an authority, not being a F Court in the ordinary sense, to decide disputes arising out of a claim made by one party under the statute which claim is opposed by another party and to determine the respective rights of the contesting parties who are opposed to each other, there is a lis and prima facie, and G in the absence of anything in the statute to the contrary it is the duty of the authority to act judicially and the decision of the authority is a quasi-judicial act; and

62Copy pinpoint62. (1969) 2 sec 262. H

256 SUPREME COURT REPORTS (2011] 1 S.C.R.

A (ii) that if a statutory authority has power to do any act which will prejudicially affect the subject, then, although there are not two parties apart from the authority and the contest is between the authority proposing to do the act and the subject opposing it, the final determination of the authority 8 will yet be a quasi-judicial act provided the authority is required by the statute to act judicially."

51. In Jaswant Sugar Mills Ltd., Meerut Vs. Lakshmi Chand & Ors. 63 , a Constitution Bench of this Court had observed that: c "Often the line of distinction between decisions judicial and administrative is thin: but the principles for ascertaining the true character of the decisions are well-settled. A judicial decision is not always the act of a judge or a tribunal invested with power to determine questions of law or fact: it must however be the act of a body or authority invested by law with authority to determine questions or disputes . affecting the rights of citizens and under a duty to act judicially. A judicial decision always postulates the existence of a duty laid upon the authority to act judicially. Administrative authorities are often invested with authority or power to determine questions, which affect the rights of citizens. The authority may have to invite objections to the course of action proposed by him, he may be under a duty to hear the objectors, and his decision may seriously affect the rights of citizens but unless in arriving at his decision he is required to act judicially, his decision will be executive or administrative. Legal authority to determine questions affecting the rights of citizens, does not make the determination judicial: it is the duty to act judicially which invests it with that character............................................................... . ........ ~ ...................................................................To

63Copy pinpoint63. 1963 Supp (1) SCR 242.

AUTOMOTIVE TYRE MANUFACTURERS ASSOCIATION v. 257 DESIGNATED AUTHORITY [D.K. JAIN, J.]

make a decision or an act judicial, the following criteria A -:-.............. must be satisfied:

( 1) it is in substance a determination upon investigation • of a question by the application of objective standards to facts found in the light of pre-existing legal rule; B

. ,,,_ (2) it declares rights or imposes upon parties obligations affecting their civil rights; and

(3) that the investigation is subject to certain procedural attributes contemplating an opportunity of presenting its c case to a party, ascertainment of facts by means of evidence if a dispute be on questions of fact, and if the dispute be on question of law on the presentation of legal argument, and a decision resulting in the disposal of the matter on findings based upon those questions of law and D /~, fact."

52. Having examined the scheme of the Tariff Act read with the 1995 Rules on the touchstone of the aforenoted principles, particularly the first principle enunciated in Khusha/das S. Advani (supra), we have no hesitation in coming to the conclusion that this is an obvious case where the DA exercises quasi-judicial functions and is bound to act judicially. A cursory -· -oor- look at the relevant Rules would show that the DA determines the rights and obligations of the 'interested parties' by applying objective standards based on the material/infcnnation/evidence presented by the exporters, foreign producers and other 'interested parties' by applying the procedure arid 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 upon the receipt of a written application by or on behalf of the domestic industry; sub-rule (4) thereof empowers the DA to initiate an investigation suo motu on the basis of information received from the Commissioner of Customs or from any other source. When the DA has decided to initiate an investigation, H

258 SUPREME COURT REPORTS [2011) 1 S.C.R.

• A Rule 6 requires that a public notice shall be issued to all the interested parties as mentioned in Rule 2(c) of the 1995 Rules, --.- as also to industrial users of the product, and to the representatives of the consumer organizations in cases when the product is commonly sold at the retail level. It is manifest B that while determining the existence, degree and effect of the alleged dumping, the DA determines a '/is' between persons supporting the levy of duty and those opposing the said levy. -i..

53. Further, it is also clear from the scheme of the Tariff Act and the 1995 Rules that the determination of existence, c effect and degree of alleged dumping is on the 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 injury to the domestic industry and, D (iii) a causal link between the dumped imports and the injury. _._ __ Rule 10 of the said Rules lays down the criteria for the determination of i.he 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 E 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. (See: S&S Enterprise Vs. Designated Authority & F Ors. 64). It is evident that the determination of injury is premised on an objective examination of the material submitted by the parties. Moreover, under Rufe 6(7) of the 1995 Rules, the DA is required to make available the evidence presented to it by one party to other interested parties, participating in the G 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 "contain sufficiently detailed information for the preliminary determinations on dumping and injury and shall refer to the matters of fact and law which have

64Copy pinpoint64. c2oos) 3 sec 337.

AUTOMOTIVE TYRE MANUFACTURERS ASSOCIATION v. 259 DESIGNATED AUTHORITY [D.K. JAIN, J.]

,_,,.._ led to arguments being accepted or rejected." A similar stipulation is found in relation to the final findings recorded by the DA under Rule 17(2) of the 1995 Rules. Above all, Section 9C of the Tariff Act provides for an appeal to the Tribunal against the order of determination or review thereof regarding the existence, degree and effect of dumping in relation to imports of ~ny article, which order, obviously has to be based ,,,,_ on the de~ermination and findings of the DA. The cumulative effect of all these factors leads us to an irresistible conclusion that the DA performs quasi-judicial functions under the Tariff Act read with the 1995 Rules. c

54. Having come to the conclusion that the DA is entrusted with a quasi-judicial function, the next question for consideration is whether or not the decision of the DA dated 9th March 2005, returning the final findings in terms of Rule 17 of th~ 1995 Rules is in breach of the principles of natural justice, resulting in D --~- vitiating the subject notification under Rule 18 of the. said Rules?

55. It is trite that rules of "natural justice" are not embodied rules. The phrase "natural justice" is also not capable of a precise definition. The underlying principle of natural justice, evolved under the common law, is to check arbitrary exercise of power by the State or its functionaries. Therefore, the principle -~ implies a duty to act fairly i.e. fair play in action. In A.K. Kraipak (supra), it was observed that the aim of rules of natural justice is to secure justice or to put it negatively to prevent miscarriage of justice.

56. In Mohinder Singh Gill (supra), upon consideration of several cases, Krishna Iyer, J. in his inimitable style observed thus: ~ G "48. Once we understand the soul of the rule as fairplay in action - and it is so - we must hold that it extends to both the fields. After all, administrative power in a democratic set-up is not allergic to fairness in action and discretionary executive justice cannot degenerate into H

260 SUPREME COURT REPORTS [2011] 1 S.C.R. • A unilateral injustice. Nor is there ground to be frightened of delay, inconvenience and expense, if natural justice gains access. For fairness itself is a flexible, pragmatic and relative concept, not a rigid, ritualistic or sophisticated abstraction. It is not a bull in a china shop, nor a bee in B one's bonnet. Its essence is good conscience in a given situation: nothing more - but nothing less. The 'exceptions' to the rules of natural justice are a misnomer or rather are but a shorthand form of expressing the idea that in those exclusionary cases nothing unfair can be c inferred by not affording an opportunity to present or meet a case. Text-book excerpts and ratios from rulings can be heaped, but they all converge to the same point that audi a/teram partem is the justice of the law, without, of course, making law lifeless, absurd, stultifying, self-defeating or plainly contrary to the common sense of the situation." D . 57. In Swadeshi Cotton Mills Vs. Union of lndia65 , R.S. Sarkaria, J., speaking for the majority in a three-Judge Bench, lucidly explained the meaning and scope of the concept of "natural justice". Referring to several decisions, His Lordship E observed thus:

"Rules of natural justice are not embodied rules. Being means to an end and not an end in themselves, it is not possible to make an exhaustive catalogue of such rules. F But there are two fundamental maxims of natural justice viz. (i) audi alteram partem and (ii) nemo judex in re sua. The audi alteram partem rule has many facets, two of them being (a) notice of the case to be met; and (b) opportunity to explain. This rule cannot be sacrificed at the altar of administrative convenience or celerity. The general G principle-as distinguished from an absolute rule of uniform application-seems to be that where a statute does not, in terms, exclude this rule of prior hearing but contemplates a post-decisional hearing amounting to a full

65Copy pinpoint65. (1981) 1 sec 664.

AUTOMOTIVE TYRE MANUFACTURERS ASSOCIATION v. 261 DESIGNATED AUTHORITY [D.K. JAIN, J.]

review of the original order on merits, then such a statute A . >-.Jo... would be construed as excluding the audi alteram partem rule at the pre-decisional stage. Conversely if the statute conferring the power is silent with regard to the giving of a pre-decisional hearing to the person affected and the administrative decision taken by the authority involves civil ·s consequences of a grave nature, and no full review or appeal on merits against that decision is provided, courts ._._ will be extremely reluctant to construe such a statute as excluding the duty of affording even a minimal hearing, shorn of all its formal trappings and dilatory features at the c pre-decisional stage, unless, viewed pragmatically, it would paralyse the administrative process or frustrate the need for utmost promptitude. In short, this rule of fair play must not be jettisoned save in very exceptional circumstances where compulsive necessity so demands. D -~- The court must make every effort to salvage this cardinal rule to the maximum extent possible, with situational modifications. But, the core of it must, however, remain, namely, that the person affected must have reasonable opportunity of being heard and the hearing must be a genuine hearing and not an empty public relations exercise. n . ·..,.- (Emphasis supplied by us)

58. It is thus, well settled that unless a statutory provision, either specifically or by necessary implication excludes 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 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 administrative or H

262 SUPREME COURT REPORTS [2011] 1 S.C.R.

• A quasi-judicial. It is equally trite that the concept of natural justice can neither be put in a strait-jacket nor is it a general rule of universal application. Undoubtettly, there can be exceptions to the said doctrine. As stated above, the question whether the principle has to be 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 consideration of these matters that the question of application of the said principle can be properly determined. (See: Union of India Vs. Col. J.N. Sinha & Anr. 66 .)

59. In light of the aforenoted legal position and the elaborate procedure prescribed in Rule 6 of 1995 Rules, which the DA is obliged to adhere to while conducting investigations, we are convinced that 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 concerned, though it was sought to be pleaded on behalf of the respondents that the incumbent DA had issued a common notice to the Advocates for ATMA and Ningbo Nylon, for oral hearing on 9th March 2005, however, there is no document on record indicating that pursuant to ATMA's letter dated 24th January 2005, notice for oral hearing was issued to them by the incumbent DA. Moreover, the alleged opportunity of oral hearing on 9th March, 2005, being in relation to the price undertaking offer by Ningbo Nylon, cannot be likened to a public hearing contemplated under Rule 6(6) of the 1995 Rules. 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 written arguments are no substitute for an oral hearing. A personal hearing enables the authority concerned to watch the demeanour of the witnesses etc. and

66Copy pinpoint66. (1970) 2 sec 458.

AUTOMOTIVE TYRE MANUFACTURERS ASSOCIATION v. 263 DESIGNATED AUTHORITY [D.K. JAIN, J.] also clear up his doubts during the course of the arguments. A - ~_),.. Moreover, it was also observed in Gul/apal/i (supra), if one person hears and other decides, then personal hearing becomes an empty formality. In the present case, admittedly, the entire material had been collected by the predecessor of the DA; he had allowed the interested parties and/or their B representatives to present the relevant information before 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 herein. In our opinion, the final order passed by the new DA offends the basic principle of natural justice. Thus, the impugned notification having been issued on the basis c of the final findings of the DA, who failed to follow the principles of natural justice, cannot be sustained. It is quashed accordingly.

60. For the view we have taken above, we deem it D .~ unnecessary to deal with the other contentions urged on behalf of the parties on the merits of the levy.

61. This brings us to the question of relief. In view of our finding that the recommendation of the DA stands vitiated on account of non-compliance with the basic principle of audi alteram partem, the appeals must succeed. However, the . -~ question for consideration is whether the appellants will be entitled to the refund of the duty already paid and coll~cted. It is trite law that in the case of indirect taxes like centralexcise duties and customs duties, the tax collected by the State without the authority of law, shall not be refunded to the petitioner unless he alleges and establishcc; 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 unjust G >- enrichment comes into play. On the doctrine of unjust enrichment, in Mafatlal Industries Ltd. & Ors. Vs. Union of India & Ors. 67 , a decision by a bench comprising of nine learned

a1. (1997) s sec 536. H

264 SUPREME COURT REPORTS (2011) 1 S.C.R. • A Judges of this Court, B.P. Jeevan Reddy, J., speaking for the majority, had observed thus: -"""--·-

"The doctrine of unjust enrichment is a just and salutary doctrine. No person can seek to collect the duty from both ends. In other words, he cannot collect the duty from his B purchaser at one end and also collect the same duty from the State on the ground that it has been collected from him contrary to law. The power of the court is not meant to be ~ exercised for unjustly enriching a person. The doctrine of unjust enrichment is, however, inapplicable to the State. c State represents the people of the country. No one can speak of the people being unjustly enriched."

62. In the instant case, the DA, during the Sunset Review (Notification No.14/20/2008-DGAD dated 31st March, 2009) D 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 anti-dumping duty had been absorbed by the exporters. The said finding of fact E attained finality in as much as it had not been assailed by any of the interested parties. In light of the fact that the importers viz. ATMA and its constituent members have passed on the burden of the levy to third person(s), it follows that members of ...,, - ATMA cannot claim refund of the anti-dumping duty levied in terms of the Notification No.36/2005-Cus. In any event, ATMA F 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.

63. In any case, we are of the opinion that the appellants G cannot claim refund of duty already levied in as much as they -4.. have not specifically chall~nged 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 to H

AUTOMOTIVE TYRE MANUFACTURERS ASSOCIATION v. 265 DESIGNATED AUTHORITY [D.K. JAIN, J.] domestic industry remain unchallenged. In that view of the A · ·~ matter, particularly when the existence of dumping has not been put in issue, we are of the opinion that 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. B

64. In the result, the appeals are allowed to the extent mentioned above; the decision of the Tribunal is set aside and Notification No.36/2005-Cus., dated 27th April 2005, is .. I quashed. However, considering the facts and circumstances of the case, the parties are left to bear their own costs. c R.P. Appeals partly allowed.