Deepak Nitrite Limited v. Union of India and Anr

1. In all these petitions, the challenge is to the vires of Annexure-III to the Customs Tariff(Identification, Assessment and Collection ofAnti Dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995 ('ADD Rules'). The further prayer is that the guidelines for determination of non-injurious price for domestic industry as contained in Annexure-III to the ADD Rules is required to be read down in amanner that permits the Central Government to determine the non-injurious price by taking into account the actual cost ofproduction.

2. Apreliminary objection is raised by learned counsel appearing for the Union ofIndia regarding the maintainability ofthese petitions mview ofthe judgment of the Supreme Court in L. Chandra Kumar v. Union ofIndia (1997) 3see 261. Attention of this Court is drawn to the following para (SCC para 93) ofthe said judgment: "93. Before moving on to other aspects, we may summarise our conclusions on the jurisdictional powers of these Tribunals. The Tribunals are competent to hear matters where the vires of statutory provisions are questioned. However, in discharging this duty, they cannot act as substitutes for the High Courts and the Supreme Court which have, under our constitutional setup, been specifically entrusted with such an obligation. Their function in this respect is only W.P.(C) Nos. 6430/2011, 7918/2011,145/2013,2453/2013,3782/2013, 4345/2013 Page3of[6] ->1 supplementary and all such decisions ofthe Tribunals will be subject to scrutiny before a Division Bench ofthe respective High Courts. The Tribunals will consequently also have the power to test the vires ofsubordinate legislations and rules. However, this power of the Tribunals will be subject to one important exception. The Tribunals shall not entertain any question regarding the vires of their parent statutes following the settled principle that a Tribunal which is a creature of an Act cannot declare that very Act to be unconstitutional. In such cases alone, the concerned High Court may be approached directly. All other decisions of these Tribunals, rendered in cases that they are specifically empowered to adjudicate upon by virtue of their parent statutes, will also be subject to scrutiny before aDivision Bench oftheir respective High Courts. We may add that the Tribunals will, however, continue to act as the only courts of first instance in respect ofthe areas oflaw for which they have been constituted. By this, we mean that it will not be open for litigants to directly approach the High Courts even in cases where they question the vires of statutory legislations (except, as mentioned, where the legislation which creates the particular Tribunal is challenged) by overlooking the jurisdiction ofthe concerned Tribunal." (emphasis supplied)

3. It was urged by Mr. Sandeep Sethi, learned Senior Counsel, that these petitions have been pending in this Court for some years now and therefore, the Court should hear and decide the issue itself rather than relegating the petitioners to the Customs, Excise and Service Tax Appellate Tribunal ('CESTAT').

4. In reply, Mr. Kirtiman Singh, learned counsel appearing for the Respondent Union ofIndia, refers to the specific line in the above para in h. Chandra Kumar (supra), which states; "It will not, therefore, be open for litigants to directly approach the High Courts even in cases where they question the vires of statutory legislations (except where the legislation W.P.(C) Nos. 6430/2011, 7918/2011,145/2013, 2453/2013,3782/2013, 4345/2013 Page4of[6] 5"^ which creates the particular Tribunal is challenged) by overlooking the jurisdiction ofthe Tribunal concerned."

5. It is then urged by Mr. Sethi, that under Section 9C ofthe Customs Tariff Act, 1975 (CTA) the only jurisdiction conferred on the CESTAT is to entertain appeals arising from the decisions of the Designated Authority under the ADD Rules and nothing else. In short, his submission was that, since the CESTAT is a statutory body with restricted powers and jurisdiction, as delineated under the CTA it cannot be conferred with powers ofdeclaring subordinate legislation ultra vires.

6. The court is unable to accept the above submission. The power ofthe CESTAT to consider challenge to the vires ofasubordinate legislation flows not from the CTA but the decision of the Supreme Court in L. Chandra Kumar {supra). In the said judgment the Supreme Court discussed the powers of the Administrative Tribunals (ATs) constituted under the Administrative Tribunals Act, 1985 ('ATA). Itwas noticed by the Supreme Court that while ATs were constituted under Article 323A of the Constitution of India in order to hear service matters, other Tribunals were constituted under Article 323B ofthe Constitution ofIndia. Article 323B (2) (b) envisages the creation of Tribunals to adjudicate on issues concerning import and export across customs frontiers. There can be no manner of doubt that the CESTAT is one such Tribunal described under Article 323B (2) (b) ofthe Constitution ofIndia. In relationto both types ofTribunals, the above observations of the Supreme Court in L. Chandra Kumar (supra) would hold good. The answer to the submission of Mr. Sethi is that the W.P.(C) Nos. 6430/2011, 7918/2011,145/2013, 2453/2013,3782/2013, 4345/2013 Page5of[6] power of the CESTAT to examine the vires "of Annexure III to the ADD Rules flows from the judgment ofthe Supreme Court in L. Chandra Kumar (supra) which is binding on all authorities under Article 141 of the Constitution.

7. For the aforementioned reasons, the Court declines to entertain the petitions, with liberty to the Petitioners to approach the CESTAT for the relief sought in these petitions, in accordance with law.

8. The petitions andthe pending applications are accordingly dismissed with the above observations.

S. MURALIDHAR, J.

PRATHIBA M. SINGH, J. SEPTEMBER 04, 2017 srb