CESTAT can Examine the Correctness of Assertions made in the Final Finding issued by Designated Authority: Delhi HC [Read Order]

Finance Act - Delhi High Court - taxscan

In Hindustan Liver Ltd v. Union of India, the Delhi High Court held that the CESTAT, under section 9 of the Customs Tariff Act, is empowered to examine the correctness of the assertions made in the disclosure statement and the Final Finding issued by the Designated Authority.

In the instant case, the petitioners challenged the Final Finding dated 6th March 2017 issued by the Director General of Anti-Dumping and Allied Duties recommending levy of anti-dumping duty on imports of LAB from Qatar, Iran and China in exercise of the powers under the Customs Tariff Act, 1975 read with the Customs Tariff (Identification, Assessment and Collection of Anti-Dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995.

While admitting the petition, the bench noticed that the petitioners have an alternative remedy by way of approaching CESTAT under section 9 of the Customs Tariff Act against the final findings of the Designated Authority.

The petitioners pointed out that the Gujarat High Court in the case of Nirma Ltd. v. Union of India, while quashing the Disclosure Statement and the Final Findings, rejected the objection to the maintainability of the petition.

Rejecting the above contention, the division bench comprising of Justice S. Muralidhar and Justice Chander Shekhar observed that “the Court is unable to be persuaded to agree with the above conclusion reached by the DB of the Gujarat High Court. The reasons that weighed with the Gujarat High Court to conclude that it will not be possible for the party aggrieved to challenge the disclosure statement before the CESTAT is unable to be discerned from the above passage. If the Final Finding can be appealed against before the CESTAT, there is no reason why the CESTAT cannot examine the correctness of the assertions made in the disclosure statement which constitutes the very foundation of the entire exercise leading up to the Final Finding by the DA.”

Analyzing the scope of the appellate power of the CESTAT u/s 9 C of the CTA, the bench said that there is nothing to indicate that the CESTAT would be precluded from examining the validity of the disclosure statement issued under Rule 16 of the Rules. “It is like saying that an appellate Court which is in exercise of its powers under Section 96 of the Code of Civil Procedure 1908 (CPC) judicially reviewing a decree and judgment in a suit would be precluded from examining the correctness of the assertions made in a plaint or a written statement. In the context of the proceedings before the DA, the disclosure statement would be comparable to a plaint. Consequently, the Court is not persuaded that the grounds urged in the writ petition cannot be urged before the CESTAT. It is not without significance that the Gujarat High Court makes no reference in the above passage in Nirma Ltd. v. Union of India (supra) to Section 9 C of the CTA.

Dismissing the petition on ground that alternative remedy is available to the petitioners, the bench said that “The question is not whether this Court can entertain the present writ petition. The question is whether, in the facts and circumstances, it should? The power under Article 226 of the Constitution is an extraordinary one and should not be exercised in a routine manner especially when the Petitioner has an efficacious and adequate alternative statutory remedy available. Otherwise, the Court would be supplanting the functioning of the statutory appellate authority tasked specifically with reviewing the correctness of the orders of the subordinate statutory authorities.”

Read the full text of the Judgment below.

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