caselaws
Supreme Court of India
Steel Authority Of India Ltd vs Designated Authority, … on 17 April, 2017Author: R Gogoi
Bench: Ranjan Gogoi, Ashok Bhushan
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO.241 OF 2017
STEEL AUTHORITY OF INDIA LTD. …APPELLANT
VERSUS
DESIGNATED AUTHORITY,
DIRECTORATE GENERAL OF ANTI-DUMPING
& ALLIED DUTIES & Ors. …RESPONDENTS
JUDGMENT
RANJAN GOGOI, J.
1. Order on the admission of this appeal has been kept pending to enable
the Court to ascertain the true sweep and purport of the appellate power of
this Court under Section 130E(b)of the Customs Act, 1962 (as amended). The
language of the above provision of the Act having indicated a very broad
and expansive appellate jurisdiction, the precise contours thereof were
felt necessary to be determined and the admissibility of the present appeal
tested on the aforesaid basis.
2. It may be worthwhile at the very outset to delve into the history of
the taxation regime under the Act to notice the changes that had occurred
from time to time.
3. Against the assessment of customs duty made by different assessing
authorities under the Act, viz., Deputy Collector of Customs/Collector of
Customs, initially, an executive appellate remedy before the Collector of
Customs and before the Central Board of Customs Excise and Customs,
depending on the authority which has passed the initial order of
assessment, was provided. There was a power of suo motu revision with the
Board as well as a revisional jurisdiction to be exercised on an
application by an aggrieved person. The Central Government under Section
131 (originally enacted) and under Section 129DD (Substituted by Act 21 of
1984) was also vested with a revisional jurisdiction.
4. By the Finance Act No.2 of 1980, a quasi- judicial authority, namely,
Customs Excise and Gold (Control) Appellate Tribunal (CEGAT) was
constituted to hear appeals against orders of the Collector as well as the
orders of the Board. The said Tribunal came to be known as Customs, Excise
and Service Tax Appellate Tribunal (CESTAT), with the introduction of levy
of service tax. The CEGAT and its successor CESTAT were constituted as
specialized quasi-judicial appellate bodies to decide all issues relating
to duty assessment under the Customs Act. There was no provision of appeal
to the jurisdictional High Court against the order of the appellate
tribunal. However, under Section 130 of the Act a Reference jurisdiction
was vested in the High Court on a question of law not relating to the
determination of any question having a relation to the rate of duty of
customs or to the value of the goods for the purpose of assessment. Under
Section 130A, introduced by the Finance Act, 1980, a Reference jurisdiction
was also conferred in the Supreme Court in case the Appellate Tribunal was
of the opinion that on account of a conflict in the decisions of the High
Courts on the same question of law, a reference to the Supreme Court is
necessary. Under Section 130E(a) an appeal was provided to the Supreme
Court from any judgment of the High Court delivered on a Reference, where
the High Court certified the case to be a fit one for appeal to the Supreme
Court. Under Section 130E(b) against any order passed by the Appellate
Tribunal relating, among other things, to the determination of any question
having a relation to the rate of duty of customs or to the value of goods
for purposes of assessment, an appeal was also provided to the Supreme
Court. Section 130F of the Customs Act, 1962 provided that the provisions
of Civil Procedure Code, 1908 relating to appeals to the Supreme Court
shall, so far as may be, apply in the case of appeals under Section 130 as
they apply in the case of appeals from decrees of a High Court.
5. An amendment though not of any significant consequence, made in the
year 1999 may also be noticed. The reference jurisdiction of the High
Court under Section 130 which was to be exercised at the instance of the
Appellate Tribunal was continued in respect of orders passed, under Section
129B, by the Appellate Tribunal on or before 1.7.1999. However, under
Section 130A substituted by the Finance Act (No.27) of 1999 the Reference
jurisdiction in respect of orders passed by the Appellate Tribunal on or
after 1.7.1999 was to be exercised by the High Court on an application made
to it seeking a reference.
6. The aforesaid position was again altered in the year 2003. Against an
order passed by the Appellate Tribunal on or after 1.7.2003 (not being
order relating to determination of any question having a relation to the
rate of duty of customs or to the value of goods for purposes of
assessment) an appeal was provided to the High Court if the High Court is
to be satisfied that the case involves a substantial question of law.
Simultaneously, under Section 130A, the Reference Jurisdiction of the High
Court was continued in respect of orders passed by the Tribunal on or
before 1.7.2003. Such reference jurisdiction remained circumscribed as
before, as already noticed.
7. Under the 2003 Amendment, as against an order passed by the High
Court in appeal or on a reference, an appeal to the Supreme Court continued
to be provided [Section 130(E)a]. Section 130E(b) remained and continued to
provide that against an order passed by the Appellate Tribunal relating
among other things determination of any question having a relation to the
rate of duty of customs or to the value of goods for purposes of
assessment, appeal shall lie to the Supreme Court. Section 130F was
retained on similar terms as before.
8. By the National Tax Tribunal Act, 2005, a National Tax Tribunal was
constituted under Section 5 thereof to hear appeals from “every order
passed in appeal by the Income Tax Appellate Tribunal and the Central
Excise and Service Tax Appellate Tribunal if the National Tax Tribunal is
satisfied that the case involves substantial question of law” (Section 15).
Under Section 23 of the National Tax Tribunal Act, 2005 on and from the
notified date all proceedings including appeals and references under direct
taxes, and indirect taxes pending before all High Courts stood stand
transferred to the National Tax Tribunal. Section 24 provided for an
appeal to the Supreme Court against any decision or order of the National
Tax Tribunal. With the enactment of the National Tax Tribunal Act, 2005
provisions contained in Section 130A, B, C, D of the Customs Act, 1962 were
repealed and the corresponding changes were also brought in Section 130E of
the said Act. Section 130F continued to remain in the same form.
9. However, the aforesaid repeal effected by the National Tax Tribunal
Act, 2005 would not be very relevant for the present inasmuch as the
National Tax Tribunal Act, 2005 has been invalidated by this Court in the
case of Madras Bar Association Vs. Union of India and Another[1].
Therefore, it is, the provisions of the Customs Act, 1962 as prevailing
prior to the enactment of the National Tax Tribunal, 2005 which is
presently holding the field.
10. What is required to be noticed at this stage is that under the Customs
Act, 1962, (as amended), against an order of the appellate tribunal on a
question not relating to duty or to classification of goods, an appeal lies
to the High Court on a substantial question of law. A reference, again, on
a question of law, may also be made to the High Court in respect of similar
orders of the appellate tribunal (not relating to determination of duty or
classification of goods) passed on or before 1.7.2003. At the same time, a
direct appeal to the Supreme Court against an order of the appellate
tribunal on a question relating to the rate of duty or classification of
goods has also been provided for. No conditions, restrictions or
limitations on the availability of the appellate remedy before the Supreme
Court is envisaged in the main Section [130E(b)] though under Section 130F
conditions to the exercise of the appellate power seem to have been
imposed, the precise application of which is the determination i.e.
required to be made by us.
11. Sections 130, 130E and 130F of the Customs Act, 1962 as on date being
the relevant provisions in the context enumerated above may now be noticed.
“Section 130. Appeal to High Court. –
(1) An appeal shall lie to the High Court from every order passed in appeal
by the Appellate Tribunal on or after the 1st day of July, 2003 (not being
an order relating, among other things, to the determination of any question
having a relation to the rate of duty of customs or to the value of goods
for purposes of assessment), if the High Court is satisfied that the case
involves a substantial question of law.
(2) Commissioner of Customs or the other party aggrieved by any order
passed by the Appellate Tribunal may file an appeal to the High Court and
such appeal under this sub-section shall be –
filed within one hundred and eighty days from the date on which the order
appealed against is received by the Commissioner of Customs or the other
party;
(b) accompanied by a fee of two hundred rupees where such appeal is filed
by the other party;
(c) in the form of a memorandum of appeal precisely stating therein the
substantial question of law involved
(2A) The High Court may admit an appeal after the expiry of the period of
one hundred and eighty days referred to in clause (a) of sub-section (2),
if it is satisfied that there was sufficient cause for not filing the same
within that period.
(3) Where the High Court is satisfied that a substantial question of law
is involved in any case, it shall formulate that question.
(4) The appeal shall be heard only on the question so formulated, and the
respondents shall, at the hearing of the appeal, be allowed to argue that
the case does not involve such question:
Provided that nothing in this sub-section shall be deemed to take away or
abridge the power of the Court to hear, for reasons to be recorded, the
appeal on any other substantial question of law not formulated by it, if it
is satisfied that the case involves such question.
(5) The High Court shall decide the question of law so formulated and
deliver such judgment thereon containing the grounds on which such decision
is founded and may award such cost as it deems fit.
(6) The High Court may determine any issue which –
has not been determined by the Appellate Tribunal; or
(b) has been wrongly determined by the Appellate Tribunal, by reason of a
decision on such question of law as is referred to in sub-section (1).
(7) When an appeal has been filed before the High Court, it shall be heard
by a bench of not less than two Judges of the High Court, and shall be
decided in accordance with the opinion of such Judges or of the majority,
if any, of such Judges.
(8) Where there is no such majority, the Judges shall state the point of
law upon which they differ and the case shall, then, be heard upon that
point only by one or more of the other Judges of the High Court and such
point shall be decided according to the opinion of the majority of the
Judges who have heard the case including those who first heard it.
(9) Save as otherwise provided in this Act, the provisions of the Code of
Civil Procedure, 1908 (5 of 1908) relating to appeals to the High Court
shall, as far as may be, apply in the case of appeals under this section.”
“Section 130E. Appeal to Supreme Court. – An appeal shall lie to the
Supreme Court from –
any judgment of the High Court delivered –
in an appeal made under section 130; or
(ii) on a reference made under section 130 by the Appellate Tribunal
before the 1st day of July, 2003;
(iii)on a reference made under section 130A,
in any case which, on its own motion or on an oral application made by or
on behalf of the party aggrieved, immediately after passing of the
judgment, the High Court certifies to be a fit one for appeal to the
Supreme Court; or
any order passed before the establishment of the National Tax Tribunal by
the Appellate Tribunal relating, among other things, to the determination
of any question having a relation to the rate of duty of customs or to the
value of goods for purposes of assessment.”
“Section 130F. Hearing before Supreme Court. –
(1) The provisions of the Code of Civil Procedure, 1908 (5 of 1908),
relating to appeals to the Supreme Court shall, so far as may be, apply in
the case of appeals under section 130E as they apply in the case of appeals
from decrees of a High Court:
Provided that nothing in this sub-section shall be deemed to affect
the provisions of sub-section (1) of section 130D or section 131.
(2) The costs of the appeal shall be in the discretion of the Supreme
Court.
(3) Where the judgment of the High Court is varied or reversed in the
appeal, effect shall be given to the order of the Supreme Court in the
manner provided in section 130D in the case of a judgment of the High
Court.”
12. The history of the customs duty regime traced out above would go to
show that after constitution of the Appellate Tribunal, the proceedings of
which were/are deemed under the Act to be judicial proceedings, the duty of
determining the correctness of questions relating to rate of duty or
classification of goods has been primarily cast by the Act on the Tribunal.
The Reference jurisdiction of the High Court up to the time of the
amendment made in the year 2003 and the Appellate jurisdiction of the High
Court thereafter is in respect of questions not relatable to the rate of
duty or classification of goods. An appeal also lies to the Supreme Court
against the order or the judgment of the High Court either in exercise of
the appellate or reference jurisdiction [Section 130E(a)]. At the same
time, a direct appeal lies to the Supreme Court against an order passed by
the appellate tribunal relating to the question of duty or classification
of goods [Section 130E(b)]. Section 130F has weathered all amendments and
make the provisions of the Code of Civil Procedure relating to an appeal to
the Supreme Court applicable to appeals under Section 130 of the Act. The
question, therefore, would be whether the provisions of Section 130F would
be applicable to both sets of appeals that may be filed before Supreme
Court, namely, against orders of the High Court as well as those of the
appellate tribunal.
13. The language used by the legislature in Section 130F of the Act
prescribing the contours of the jurisdiction of the Supreme Court while
hearing appeals either against the decision of the High Court in its
appellate or reference jurisdiction or while hearing an appeal against the
order of the appellate tribunal has been same and has remained unchanged
throughout the legislative history of Chapter XV of the Act (dealing with
appeals) commencing with the amendment brought about by the Finance Act of
1980. The provisions of the Civil Procedure Code 1908 relating to appeals
to the Supreme Court from a decree of a High Court, as far as may be, has
been made applicable to all appeals to the Supreme Court under Section 130E
of the Act. Section 130F of the Act, all along, has dealt with both sets of
appeals that would lie to the Supreme Court, namely, against an order of
the High Court in exercise of its appellate or reference jurisdiction, as
the case may be, or against the order of the appellate tribunal. If that be
so, there is no reason why the appellate power of the Supreme Court under
Section 130E(b) against the order of the appellate tribunal should be
construed in a manner different from the contours of the appellate power
under Section 130E(a) against the order of the High Court.
14. The provisions of the Civil Procedure Code relating to the appeals to
the Supreme Court against decrees of the High Court are contained in
Section 109 of the Civil Procedure Code which is in the following terms:
“109. When appeals lie to the Supreme Court.-
Subject to the provisions in Chapter IV of Part V of the Constitution and
such rules as may, from time to time, be made by the Supreme Court
regarding appeals from the Courts of India, and to the provisions
hereinafter contained, an appeal shall lie to the Supreme Court from any
judgment, decree or final order in a civil proceeding of a High Court, if
the High Court certifies—
(i) that the case involves a substantial question of law of general
importance; and
(ii) that in the opinion of the High Court the said question needs to be
decided by the Supreme Court.”
15. Chapter IV of Part V of the Constitution contains the provisions in
Articles 132, 133, 134 and 134A which contemplate appeals to the Supreme
Court from any judgment or decree or final order of the High Court in
exercise of its civil, criminal or any other jurisdiction provided the High
Court certifies that the case involves (i) a substantial question of law as
to the interpretation of the Constitution, (ii) a substantial question of
law of general importance which in the opinion of the High Court needs to
be decided by the Supreme Court.
16. Chapter IV of Part V of the Constitution expressly limits the
appellate jurisdiction of the Supreme Court to what has been noticed above.
The power of the Supreme Court to grant special leave to appeal under
Article 136 is an exception, the scope of which is not in issue and hence
need not detain the Court. Article 138 of the Constitution confers power on
the Union Parliament to confer further jurisdiction in the Supreme Court
with regard to any of the matters in the Union List or any matter as the
Government of India and the Government of a State may by special agreement
confer, subject to enactment of a law to such effect by the Union
Parliament. It is under the provisions of Article 138 that the statutory
power of appeal under different statutory regimes has been conferred on the
Supreme Court of India. Article 138 of the Constitution could not and does
not deal with the scope of the appellate power that a statutory enactment
made by the Union Parliament may confer on the Supreme Court. Rather, it
deals with the range of the subjects to which the jurisdiction of the
Supreme Court may be extended/enlarged by Parliament. Therefore, while
construing the extent of the appellate jurisdiction to be exercised by the
Supreme Court under a statutory enactment, the role of the Supreme Court as
envisaged by the Constitution cannot altogether be lost sight of
particularly when different statutes like the Electricity Act, 2003;
Companies Act 2013, National Green Tribunal Act, 2010, Telecom Regulatory
Authority of India Act, 1997, by way of illustration, expressly limit the
appellate power of the Supreme Court to determination of substantial
questions of law (Section 100 CPC). To our minds the position should be no
different in construing the provisions of Section 130E(b) of the Act though
it omits to specifically mention any such limitation.
17. Section 130E(b) of the Act provides for a direct appeal to the
Supreme Court against an Order of the appellate tribunal, broadly speaking,
on a question involving government revenue. This seems to be in view of the
fact that the order that would be under appeal i.e. (order of the appellate
tribunal) may go beyond the inter se dispute between the parties and effect
upon a large number of assessees. The issue, in such an event, surely will
be one of general/public importance. Alternatively, the question raised or
arising may require interpretation of the provisions of the Constitution.
Such interpretation may involve a fresh or a relook or even an attempt to
understand the true and correct purport of a laid down meaning of the
Constitutional provisions that may come into focus in a given case. It is
only such questions of importance, alone, that are required to be decided
by the Supreme Court and by the very nature of the questions raised or
arising, the same necessarily have to involve issues of law going beyond
the inter partes rights and extending to a class or category of assessees
as a whole. This is the limitation that has to be understood to be inbuilt
in Section 130E(b) of the Act which, in our considered view, would also be
consistent with the role and jurisdiction of the Supreme Court of India as
envisaged under the Constitution. Viewed from the aforesaid perspective,
the jurisdiction of the Supreme Court under Section 130E(b) of the Act or
the pari materia provisions of any other Statute would be in harmony with
those contained in Chapter IV of Part V of the Constitution.
18. Two decisions of this Court would require a specific notice at this
stage. The first is in the case of Navin Chemicals Mfg. and Trading Co.
Ltd. vs. Collector of Customs[2], where this Court has taken the view
that the expression “determination of any question having a relation to the
rate of duty of customs or, value of goods for purposes of assessment” must
be read as meaning a direct and proximate relationship to the rate of duty
and to the value of goods for purposes of assessment.
The other is the decision of this Court in Collector of Customs, Bombay
vs. Swastic Woollen (P) Ltd. and Ors.[3], where this Court had an occasion
to deal with the ambit of the appellate power under Section 130E of the
Customs Act. The following extract from the judgment in Swastic Woollen
(supra) amply summarize the view of this Court on the above question and
therefore would require to be extracted.
“9. …Whether a particular item and the particular goods in this case are
wool wastes, should be so considered or not is primarily and essentially a
question of fact. The decision of such a question of fact must be arrived
at without ignoring the material and relevant facts and bearing in mind the
correct legal principles. Judged by these yardsticks the finding of the
Tribunal in this case is unassailable. We are, however, of the view that if
a fact finding authority comes to a conclusion within the above parameters
honestly and bona fide, the fact that another authority be it the Supreme
Court or the High Court may have a different perspective of that question,
in our opinion, is no ground to interfere with that finding in an appeal
from such a finding. In the new scheme of things, the Tribunals have been
entrusted with the authority and the jurisdiction to decide the questions
involving determination of the rate of duty of excise or to the value of
goods for purposes of assessment. An appeal has been provided to this Court
to oversee that the subordinate Tribunals act within the law. Merely
because another view might be possible by a competent Court of law is no
ground for interference under Section 130-E of the Act though in relation
to the rate of duty of customs or to the value of goods for purposes of
assessment, the amplitude of appeal is unlimited. But because the
jurisdiction is unlimited, there is inherent limitation imposed in such
appeals. The Tribunal has not deviated from the path of correct principle
and has considered all the relevant factors. If the Tribunal has acted bona
fide with the natural justice by a speaking order, in our opinion, even if
superior Court feels that another view is possible, that is no ground for
substitution of that view in exercise of power under clause (b) of Section
130-E of the Act.”
19. On the basis of the discussion that have preceded, it must therefore
be held that before admitting an appeal under Section 130E(b) of the
Customs Act, the following conditions must be satisfied:
(i) The question raised or arising must have a direct and/or proximate
nexus to the question of determination of the applicable rate of duty or to
the determination of the value of the goods for the purposes of assessment
of duty. This is a sine qua non for the admission of the appeal before this
Court under Section 130E(b) of the Act.
(ii) The question raised must involve a substantial question of law which
has not been answered or, on which, there is a conflict of decisions
necessitating a resolution.
(iii)If the tribunal, on consideration of the material and relevant facts,
had arrived at a conclusion which is a possible conclusion, the same must
be allowed to rest even if this Court is inclined to take another view of
the matter.
(iv) The tribunal had acted in gross violation of the procedure or
principles of natural justice occasioning a failure of justice.
20. The above parameters, which by no means should be considered to be
exhaustive, may now be applied to the case of the parties before us to
decide the primary question indicated at the outset of the present order,
namely, whether this appeal deserves to be admitted.
21. The appellant which is a public sector undertaking is engaged in the
manufacture of steel in the regular course of its business. The appellant
uses graphite electrodes which it gets imported from China. Against such
imports from China, on the basis of the final report of the Designated
Authority acting under the Anti Dumping Rules, namely, the Customs Tariff
(Identification, Assessment and Collection of Anti-Dumping Duty on Dumped
Articles and for Determination of Injury) Rules, 1995, the Union of India
by a Notification dated 13.02.2015 has imposed anti-dumping duty upon the
import of graphite electrodes of all diameters from specific importers
operating within the Republic of China for a period of five years. This
Notification was challenged by the appellant before the appellate tribunal
(CESTAT). On behalf of the appellant it was urged before the learned
Tribunal that the Designated Authority had determined the normal value of
graphite electrodes within China in an impermissible manner and that there
has been application of excessive confidentiality in the report of the
Designated Authority. No challenge to the validity of any provision of the
Anti Dumping Rules which sets out the procedure for determination of the
margin of dumping was laid before the Appellate Tribunal.
22. The learned Tribunal, on due consideration, came to the conclusion
that the report of the Designated Authority neither suffers from any
excessive imposition of confidentiality nor from the alleged non-
consideration of any of the grounds urged on behalf of the appellant. The
tribunal further held that the Designated Authority had followed an
acceptable method of determining the normal value of electrodes within
China by comparing individual work undertaken by an exporter vis-à-vis the
export price imposed and that there was no infirmity in the matter of such
determination.
23. Specifically, the final findings of the Designated Authority disclose
that to determine the margin of dumping the said authority undertook an
exercise to find out the normal value of graphite electrodes in the
Republic of China and then proceeded to compare the same with the export
price of the product. The Designated Authority on conclusion of an arduous
determination process came to the conclusion that the margin of dumping
varies from one exporter to the other and the percentage thereof varies
from 20 to 95 per cent. The Designated Authority also found that the
demand for graphite electrodes from the domestic industries had increased
by 37% during the period of investigation (2009-2012) whereas the demand
from particular exporters in China had increased by 177 per cent during the
same period. The Designated Authority further found that during the period
of investigation the production of graphite electrodes by the domestic
industry had decreased whereas the import of the same from China had
increased substantially and, therefore, the domestic industries are
suffering material injury due to dumping of graphite electrodes from
exporters within China. It is on the basis of the aforesaid findings that
the Designated Authority had recommended that anti-dumping duty be imposed
which found manifestation in the Gazette Notification dated 13.2.2015.
24. The above narration clearly disclose that the findings recorded by
the learned appellate tribunal on the basis of which the appeal of the
present appellant has been dismissed are findings of fact arrived at on due
consideration of all relevant materials on record. If that is so, on the
ratio of the decision of this Court in the case of Swastic Woollen (supra)
we will have no occasion to have a re-look into the matter in the exercise
of our appellate jurisdiction under Section 130E(b) of the Act.
25. The appeal, consequently, is dismissed by refusing admission.
…………….,J.
(RANJAN GOGOI)
…………….,J.
(ASHOK BHUSHAN)
NEW DELHI
APRIL 17, 2017.
———————–
[1]
[2] (2014) 10 SCC 1
[3]
[4] (1993) 4 SCC 320
[5]
[6] AIR 1988 SC 2176
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