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2024 Supreme(Mad) 2132
IN THE HIGH COURT OF JUDICATURE AT MADRAS
SENTHILKUMAR RAMAMOORTHY, J.
M/s. Huawei Telecommunications (India) Company Pvt. Ltd – Appellant
Versus
The Principal Commissioner of Customs Chennai VII – Respondent
W.P.Nos. 768 & 769 of 2018 & WMP Nos. 933 & 934 of 2018
Decided on : 06-11-2024
Advocate Appeared:
For the Appellant :Mr. Satish Parasaran, Sr. Advocate, assisted by Mr. Karthik Sundaram
For the Respondents: ARL. Sundaresan, ASG assisted by Mr.A.P. Srinivas and Mr. B. Rabu Manohar
The court ruled that Anti-Dumping Duty cannot be levied after the expiry of the notification, and jurisdictional objections raised by the petitioner were upheld, allowing for a statutory appeal.
Headnote:(A) Constitution of India - Article 226 - Writ petitions challenging Orders-in-Original demanding Anti-Dumping Duty (ADD) - Petitioner contended that the orders disregarded prior common orders and lacked jurisdiction - Court held that the ADD demand for certain periods was unsustainable due to prior rulings and jurisdictional issues - Petitioner granted leave to file statutory appeal against the orders. (Paras 20-32)
(B) Jurisdiction - Development Commissioner’s authority to issue show cause notices - Court found that the Development Commissioner acted within jurisdiction as per SEZ Act provisions - Jurisdictional objections raised by the petitioner were rejected. (Paras 22-24)
(C) Natural Justice - Court noted that the impugned orders were not vitiated by the alleged failure to provide written submissions in time, as the orders were detailed and comprehensive. (Paras 28-29)
Facts of the case:
The petitioner challenged the imposition of ADD on goods imported from SEZ to DTA, asserting that the orders were contrary to previous court rulings and lacked jurisdiction. (Paras 1-5)
Findings of Court:
The court found that the ADD demand for certain periods was invalid and upheld the jurisdiction of the Development Commissioner to issue show cause notices. (Paras 20-24)
Issues: The main issues were the validity of the ADD demand for specific periods and the jurisdiction of the Development Commissioner to issue show cause notices. (Paras 20-24)
Ratio Decidendi: The court ruled that the ADD demand was unsustainable for certain periods based on prior rulings and upheld the jurisdiction of the Development Commissioner under the SEZ Act. (Paras 20-24)
Result: Writ petitions disposed of; ADD demand set aside for certain periods.
ORDER :
Prayer in W.P. No. 768 of 2024: Writ petition filed under Article 226 of the Constitution of India to issue a writ of Certiorari or a writ in the nature of Certiorari, or any other appropriate Writ, Order or direction, calling for the records of the Order bearing order-in-original no. 689/2017-AIR, and, dated 30.12.2017 issued by the Respondent no. 1 and quash the same.
Prayer in W.P. No. 769 of 2024: Writ petition filed under Article 226 of the Constitution of India to issue a writ of Certiorari or a writ in the nature of Certiorari, or any other appropriate Writ, Order or direction, calling for the records of the Order bearing order-in-original no. 688/2017-AIR, and, dated 30.12.2017 issued by the Respondent no. 1 and quash the same.
Factual Background:
By these writ petitions, the petitioner assails the Orders-in-Original (OIOs), both dated 30.12.2024 and issued by the first respondent, demanding Anti-Dumping Duty (ADD) of Rs. 146,72,95,243/- and Rs. 189,76,79,197/-, respectively, along with interest and penalty applicable thereto.
2. The petitioner-company, Huawei Telecommunications (India) Company Pvt. Ltd. (‘petitioner’), is engaged in the business of manufacture and sale of telecom related equipment in India. The Special Economic Zone (SEZ) unit of Flextronics Technologies (India) Pvt. Ltd. ('Flextronics SEZ unit’) imported the goods, described by the petitioner as stand-alone parts/components, into India from Huawei, China. After the PCBAs were populated using Surface Mounting Technology (STM) at the abovementioned SEZ unit, they were procured in a domestic tariff area (DTA)by the petitioner. Since the goods were moved from a SEZ to a DTA, bills of entry were filed and the goods were cleared after paying customs duty. The PCBAs were then used for further assembly of telecommunication equipment in the petitioner's DTA unit and sold to the petitioner's customers in India.
Notification 125/2010:
3. After receiving an application from the domestic industry represented by a manufacturer, Tejas Network Ltd. (Tejas), alleging that the Synchronous Digital Hierarchy Transmission equipment (SDH equipment), originating in or exported from the People's Republic of China and Israel were being dumped in the Indian market causing them material injury, the Directorate General of Anti-dumping and Allied Duties (DGAD) conducted Anti-Dumping investigations concerning the import of these SDH equipment. Pursuant to its investigations, the DGAD, in its preliminary findings, recommended the imposition of ADD on the imports of these goods vide notification No.14/2/2009-DGAD dated 07.09.2009; and provisional anti-dumping duties were imposed on this basis vide Notification No. 132/2009- Customs dated 8.12.2009 issued by the Ministry of Finance (Department of Revenue). Subsequently, the DGAD issued its final findings and recommendations through its notification No.14/2/2009-DGAD dated 19.10.2010 ('DGAD Final Findings'). On the basis of the recommendations, by notification no. 125/2010- Customs dated 16.12.2010 (the ADD Notification), ADD was imposed for a period of five years beginning from the date of imposition of the provisional duty, i.e., 8.12.2009 - 7.12.2014. Note 1 to the said Notification clarifies the meaning of product under consideration (PUC). It includes inter alia SDH equipment, Populated Circuit Boards (PCB) (for application in SDH), parts or components imported as a part of equipment or its assemblies or sub-assemblies but excludes from its purview components imported on a stand-alone basis.
4. Initially, the petitioner imported SDH equipment directly from Huawei, China. In respect thereof, ADD was demanded under the ADD Notification. The petitioner paid ADD of Rs. 52,15,09,653/-along with interest of Rs.1,67,16,885 under protest for the period from September 2010 to December 2010 in April 2011. This continued until June 2011. From July 2011, the Flextronics SEZ unit imported goods described by the petitioner as stand-alone part
