2022 (11) TMI 1096 - AT - Customs

Non-Levy of antidumping duty (ADD) - injury to domestic industry - Recommendation made by the designated authority - articles exported by the exporters or producers to India at less than its normal value - violation of principles of natural justice - contention advanced on behalf of the respondents is that the appeals are not maintainable under section 9C of the Tariff Act and that the exercise of power by the Central Government under section 9A of the Tariff Act read with rule 18 of the 1995 Anti-Dumping Rules is legislative in nature and so neither the principles of natural justice are required to be complied with nor a reasoned order is required to be passed. Maintainability of appeal - whether an appeal would lie to the Tribunal in a case where the decision of the Central Government not to impose any anti-dumping duty is conveyed through an office memorandum, despite a positive recommendation made by the designated authority in the final findings for imposing antidumping duty? HELD THAT - The expression 'in respect of' is of wide connotation than the word 'in', making an order of determination as regards the existence, degree and effect of any subsidy or dumping amenable to an appeal to the Tribunal under section 9C of the Tariff Act - It would be seen that prior to 01.08.2019, an appeal would lie to the Tribunal under section 9C of the Tariff Act against the order of determination regarding the existence, degree and effect of any subsidy or dumping in relation to import any article. There is, therefore, no difference in the meaning of the expression 'in respect of or 'regarding', and an order of determination concerning the existence, degree and effect of any subsidy or dumping would give a cause for filing an appeal before the Tribunal. The designated authority performs functions under the Tariff Act on behalf of the Central Government and not as an independent authority. Section 9(C) of the Tariff Act does not restrict the right of appeal to specific category of orders, except that the orders should determine the existence, degree and effect of subsidy or dumping in relation to imports of articles in India. The provisions of section 9(C) of the Tariff Act conferring right to appeal have to be read in a manner that it effectuates the legislative purpose in a reasonable, practical and liberal manner since it is remedial and the right to appeal should not be restricted or denied unless such a construction is unavoidable. The right to appeal should not be denied, unless the Statute so specifically states nor should it be read so as to frustrate the purpose of providing an appellate remedy in relation to orders determining existence, degree and effect of any subsidy or dumping of articles imported into India as the expression 'in respect of is of wide connotation - It is true that right of appeal is a statutory right, as has also been contended by the learned counsel for the respondents, but as discussed above, section 9C of the Tariff Act provides for an appeal to the Tribunal if the Central Government takes a decision not to impose anti-dumping duty, even though the designated authority had made a recommendation in its final findings for imposition of anti-dumping duty. It is, therefore, not possible to accept the contention of the learned counsel for the respondents that an appeal would not lie to the Tribunal under section 9C of the Tariff Act against the decision of the Central Government, contained in the office memorandum, not to impose anti-dumping duty. Is the determination by the Central Government legislative in character or quasi-judicial in nature? - HELD THAT - Even if it is assumed that the Central Government exercises legislative powers when it imposes anti-dumping duty or has taken a decision not to impose anti-dumping under section 9A of the Tariff Act, it would still be a piece of conditional legislation falling under the third category of conditional legislations. This is for the reason that in the scheme of the Tariff Act and the 1995 Anti-Dumping Rules, the Central Government has necessarily to examine all the relevant factors prescribed in the Tariff Act and the Rules for coming to a conclusion whether anti-dumping duty has to be levied or not. It cannot be that it is only the designated authority that is required to follow the procedure prescribed under the Tariff Act and the Rules framed thereunder for making a recommendation to the Central Government, for while taking a decision on the recommendation made by the designated authority in the final findings the Central Government would have to examine whether the designated authority has objectively considered all the relevant factors on the basis of the evidence led by the parties - There is a clear lis between the domestic industry on the one hand and the foreign exporter and importers on the other hand since the domestic industry desires anti-dumping duty to be imposed for which purpose investigation is carried out by the designated authority, but the foreign exporters and importers resist the imposition of anti-dumping duty. For exercise of such power, a detail procedure has been provided in the Tariff Act, the 1995 Anti Dumping Rules or the 1997 Safeguard Rules. The Rajasthan High Court in JK. INDUSTRIES LTD. VERSUS UNION OF INDIA 2005 (4) TMI 76 - HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR also held that the nature of delegated legislation as contemplated under section 9A of the Tariff Act squarely falls in the third category of conditional legislative function pointed out by the Supreme Court in K. Sabanayagam 1997 (11) TMI 520 - SUPREME COURT , as a result of which the excise has to be undertaken not on a subjective satisfaction of the delegatee but objectively on facts. While examining the validity of notifications issued by the Food (Health) Authority under section 7(iv) of the Prevention of Food Adulteration Act, 1954 by which the manufacture, sale, storage and distribution of pan masala and gutka were banned for different periods, the Supreme Court, after referring to its earlier decision in K. Sabanayagam, emphasized that in the third category of conditional legislation, the satisfaction of the delegatee must necessarily be based on objective consideration, irrespective of whether the exercise of such power is judicial or quasi-judicial in nature. The authority has to objectively consider the relevant factual data pressed into service by one side, which can be rebutted by the other side adversely affected. While the exercise of the legislative function of framing Rules is not appealable before the Tribunal, the second function of making a determination is expressly made appealable under section 9C of the Tariff Act. The function of making a determination in individual cases by applying the broad legislative framework and policy already set out in the Statute is not at all legislative in character, but clearly a quasi-judicial function requiring the Central Government to follow the principles of natural justice by affording an opportunity to the party likely to be adversely. Principles of Natural Justice and Reasoned Order - HELD THAT - In Jubilant Ingrevia Limited 2021 (11) TMI 200 - CESTAT NEW DELHI a similar office memorandum was issued conveying the decision of the Central Government not to impose anti-dumping duty. The Tribunal observed that though a discretion is vested with the Central Government to accept or not accept the final findings of the designated authority, but such a discretion has to be exercised in a judicious manner by a reasoned order in accordance with the principles of natural justice, more particularly because an appeal would lie to the Tribunal against the determination made by the Central Government. In view of the judgments of the Supreme Court in K. Sabanayagam, 1997 (11) TMI 520 - SUPREME COURT , and the decision of the Tribunal in Jubilant Ingrevia Limited, 2021 (11) TMI 200 - CESTAT NEW DELHI it has to be held that reasons have to be recorded by the Central Government when it proceeds to form an opinion not to impose any anti-dumping duty despite a positive recommendation made by the designated authority in the final findings for imposition of anti-dumping duty. If the Central Government forms a prima facie opinion that the final findings of the designated authority recommending imposition of anti-dumping duty are not required to be accepted then tentative reasons have to be recorded and conveyed to the domestic industry so as to give an opportunity to the domestic industry to submit a representation. Though the Tariff Act and the 1995 Anti-Dumping Rules or the 1997 Safeguard Rules do not provide for such an opportunity to be provided to the domestic industry, but the principles of natural justice would require such an opportunity to be provided. Non communication of the decision of the Central Government on the recommendation made by the designated authority - HELD THAT - Section 9A of the Tariff Act provides that where any article is exported by an exporter or producer from any country or territory to India at less than its normal value, then, upon the importation of such article into India, the Central Government may, by notification in the Official Gazette, impose anti-dumping duty not exceeding the margin of dumping in relation to such article - In the present case, it is not in dispute that the final findings of the designed authority were published on 12.05.2021. In all the appeals except twelve appeals, reference of which is given in the first paragraph of this order, an office memorandum was issued by the notifying that the Central Government, after examining the recommendation, had decided not to impose anti-dumping duty. In twelve appeals, the appellants have stated that such an office memorandum was not issued. Learned counsel appearing for the Central Government has also not stated or placed such an office memorandum. Thus, the decision taken by the Central Government not to impose anti-dumping duty despite a recommendation having been made by the designated authority for imposition of anti-dumping duty, cannot be sustained and the matter would have to be remitted to the Central Government for taking a fresh decision on the recommendation made by the designated authority. Anti-Dumping Appeals are disposed off.

Summary

Issues Involved:
1. Maintainability of appeal under section 9C of the Tariff Act.
2. Nature of determination by the Central Government under section 9A of the Tariff Act.
3. Principles of natural justice and requirement of a reasoned order.
4. Non-communication of the decision of the Central Government on the recommendation made by the designated authority.

Issue-Wise Detailed Analysis:

1. Maintainability of appeal under section 9C of the Tariff Act:
The Tribunal examined whether an appeal would lie under section 9C of the Tariff Act against the Central Government's decision not to impose anti-dumping duty despite a positive recommendation by the designated authority. The Tribunal concluded that an appeal is maintainable under section 9C, as the decision of the Central Government is an "order of determination in respect of the existence, degree and effect of any subsidy or dumping in relation to import of any article." This interpretation is supported by the wide connotation of the expression "in respect of" and the legislative intent to provide an appellate remedy for decisions determining the existence, degree, and effect of dumping.

2. Nature of determination by the Central Government under section 9A of the Tariff Act:
The Tribunal held that the functions performed by the Central Government under section 9A of the Tariff Act are quasi-judicial in nature and not legislative. This conclusion is based on the Supreme Court's decision in Reliance Industries Ltd. vs. Designated Authority, which held that the determination of the recommendation by the designated authority and the subsequent notification by the Central Government are quasi-judicial acts. The Tribunal also noted that even if the Central Government's functions are considered legislative, they fall under the third category of conditional legislation, requiring objective consideration of relevant factual data and adherence to principles of natural justice.

3. Principles of natural justice and requirement of a reasoned order:
The Tribunal emphasized the necessity for the Central Government to record reasons when deciding not to impose anti-dumping duty despite a positive recommendation by the designated authority. This requirement ensures that the decision is made in a judicious manner and allows for effective appellate review. The Tribunal cited the Supreme Court's decisions in S.N. Mukherjee vs. Union of India and other cases, which mandate that quasi-judicial decisions must be accompanied by clear and explicit reasons indicating due consideration of the points of controversy.

4. Non-communication of the decision of the Central Government on the recommendation made by the designated authority:
The Tribunal addressed the issue of non-communication of the Central Government's decision within the stipulated three-month period under rule 18 of the 1995 Anti-Dumping Rules. It held that a presumption can be drawn that the Central Government has decided not to impose anti-dumping duty if no decision is communicated within this period. Such cases are treated similarly to those where an office memorandum is issued, conveying the decision not to impose anti-dumping duty.

Conclusion:
The Tribunal set aside the office memorandums issued by the Central Government conveying the decision not to impose anti-dumping duty and remitted the matters back to the Central Government for reconsideration in light of the observations made. The Tribunal also directed the Central Government to take a fresh decision on the recommendation made by the designated authority, ensuring adherence to principles of natural justice and providing reasons for the decision.