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TMI Blog2019 (9) TMI 539X X X X Extracts X X X X X X X X Extracts X X X X ..... anti-dumping duty. It provides that if the Central Government is of the opinion that circumvention of anti-dumping duty has taken place whereby the anti-dumping duty imposed has been rendered ineffective by altering the description or the composition of the article, then it may extend the anti-dumping duty to such article. In exercise of the powers conferred under section 9A (6) of the Tariff Act, the Central Government framed Rules called the 1995 Rules. Rule 25 deals with circumvention of anti-dumping duty, while Rule 26 deals with initiation of investigation to determine circumvention. Rule 27 deals with determination of circumvention. It provides that Designated Authority, upon determination that circumvention of anti-dumping duty exists, may recommend imposition of anti-dumping duty to imports of articles found to be circumventing an existing anti-dumping duty and such levy may apply retrospectively from the date of initiation of the investigation under Rule 26. Sub-Rule (3) of Rule 27 provides that the Central Government may, pursuant to the recommendations made by the designated authority, extend the anti-dumping duty to imports of article from the date of initiation of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g as to whether the anti circumvention duty should be levied retrospectively from the date of initiation of the investigation - Appeal allowed by way of remand. X X X X Extracts X X X X X X X X Extracts X X X X ..... ti-circumvention investigations for the PUI and the Designated Authority initiated anti-dumping investigation into imports of the PUI from the Subject Countries by notification dated 19 February 2016. The product alleged to have been circumventing anti-dumping duty was Cold-rolled Flat stainless steel of the same description as the product under the notification dated 11 December 2015 but having width more than the width of the product described and covered under the said notification. According to the Domestic Industry, the PUI, which was the subject matter of the alleged circumvention, had all the essential and basic characteristics of the product earlier subjected to anti-dumping duty with the only difference being in terms of its width. 5. On the basis of the submissions made by the producers / exporter / importers and the submissions made by the Domestic Industry, the Designated Authority found that the PUI had all the essential basic characteristics of the product earlier subjected to anti-dumping duty except for the width. The findings of the Designated Authority on this issue are reproduced below: "The Product under Investigation alleged to be circumventing the anti-dump ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e relevant portion of the post disclosure comments on this aspect are as follows: i. "Domestic Industry requests the Authority to recommend the anti-circumvention duties from the date of initiation of the investigation in terms of the Rule 27. The Authority would like to appreciate that good 18 months have lapsed since the initiation of the investigation while the Domestic Industry continued to suffer because of the established malpractice of circumvention of the anti-dumping duties carried out by the exporting producers / exporters. ii. Domestic Industry submits that if the Authority recommends only prospective anti-circumvention duties, the motive of importers / exporters to delay the extension of duties by blocking the investigation will be achieved. It is submitted that in such a situation the decision of the Authority will only be partially effective and in fact, would amount to an undue favour to the interested parties who have been found to be circumventing the anti-dumping duties. In any case, the Authority needs to appreciate that extension of anti-dumping duties would not have any impact of genuine users in view of the specific exemption proposed by the Authority. Onl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owing PUI for use as PUI only such issues are also addressed as any use of imported PUI for PUC or Non PUC / PUI purpose by the importers / users only needs to be saddled with extension of existing AD Duties on PUC to PUI. Therefore, the primary objective of this investigation is to ensure that the interested parties are not negating or diluting the effect of the anti-dumping duties imposed by the Central Government by indulging in any kind of circumvention of duties. Further the Rules relating to circumvention do not have explicit provisions of either Rule 11 or Annexure II for anti-circumvention investigation. Keeping this in view, the Authority is of the view that the large scale shift of volumes to PUI at prices much lower than the effective prices of PUC has rendered the existing Anti-Dumping Duties on PUC largely ineffective." 11. On the basis of the contentions of the Domestic Industry and the interested parties, the Designated Authority concluded as follows: "Having examined the contentions of the Domestic Industry and various interested parties and on the basis of the analysis as above, the Authority concludes that: i. The Authority notes that imports of PUI i.e. "C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is slit for a combination of PUI and below PUI size or below PUI sizes, it will be liable for applicable AD Duty. (For example a 1800 mm piece being slit into a 1400 mm and a 400 mm piece or a 2200 mm piece is slit into 1400 mm and 800 mm or a 1400 mm piece being slit into 600, 500 and 300 mm sizes). vi. For the cases falling under (iii) (a) and / or (iii) (b) above, the importer will give a legally enforceable undertaking to the concerned Custom Authorities. v. The Ministry of Finance may put in place an appropriate monitoring mechanism to monitor the genuineness of the usage of the PUI so imported for categories falling under (iii) (a) and / or (iii) (b) above without payment of AD Duty on the basis of aforesaid undertaking by its appropriate agencies." 13. The Central Government, thereafter, issued the notification dated 24 October, 2017 that was published in the Gazette of India Extraordinary on 11 December 2015. The Central Government imposed anti-dumping duty as specified in the Table on the import of subject goods from the date of publication in the Official Gazette upto 10 December, 2020. 14. Ms Meenakshi Arora, learned Counsel for the Domestic Industry submitted:- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f levy of anti-dumping duty on PUC. ; (v) While reading Rule 27 (1), of the 1995 Rules, the word "may" used therein with reference to retrospectively has to be constructed as "shall". In support of this contention reliance has been placed on the following decisions: a. State of Uttar Pradesh Vs. Jogendra Singh (1964) 2 SCR 197 : AIR 1963SC1618 b. Official Liquidator Vs. Dharti Dhan (P) Ltd. (1977) 2 SCC 166. c. Shri Rangaswami, Textile Commissioner and others. Vs. Sagar Textile Mills (P) Ltd and another (1977) 2 SCC 578; (vi) The object and purpose of the anti-dumping law and imposition of duty is to protect Domestic Industry from unfair trade by unscrupulous importers and exporters who, because of their pricing behaviour, cause injury to the Domestic Industry. To ensure that the object and purpose of levy is not frustrated through such circumventing methodologies, the legislature like other members of WTO introduced section 9A(1A) and Rules 25 to 28 in the 1995 Rules to prevent and control such circumvention. Once the circumvention has been established, and the Designated Authority recommends imposition of anti-dumping duty on PUI, it is obliged to exercise the powers an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ys to be same, there would be no requirement for the latter part of Rule 27(3) (i.e. or such date as may be recommended by the Designated Authority). This part of the provision is for a reason, as the Designated Authority may recommend anti-dumping duty either prospectively or retrospectively. Resultantly, under Rule 27(3) it is for the Central Government to decide, after considering the recommendation, whether duty is to be imposed from the date of initiation of the investigation under Rule 26 or such date as may be recommended by the Designated Authority. If the argument of the Domestic Industry on Rule 27(1) of the 1995 Rules were to be accepted, then this would make part of Rule 27(3) otiose which cannot be permitted in law. Thus, Rule 27(1) of the 1995 Rules is required to be given a meaning in the context of its setting.; (v) The submission of the Domestic Industry that "may" is required to be read as "shall" in Rule 27(1) of the 1995 Rules and "Designated Authority is obliged to impose duty retrospectively" simply falls foul of the provision, as the Designated Authority does not have the power to levy duty at all, let alone levy it retrospectively. If this were to be accep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orted from such country, as the case may be." 19. Section 9A (3) of the Tariff Act deals with retrospective levy of anti-dumping duty and is reproduced below:- "9A (3) If the Central Government, in respect of the dumped article under inquiry, is of the opinion that- (i) there is a history of dumping which caused injury or that the importer was, or should have been, aware that the exporter practices dumping and that such dumping would cause injury; and (ii) the injury is caused by massive dumping of an article imported in a relatively short time which in the light of the timing and the volume of imported article dumped and other circumstances is likely to seriously undermine the remedial effect of the anti-dumping duty liable to be levied, the Central Government may, by notification in the Official Gazette, levy anti-dumping duty retrospectively from a date prior to the date of imposition of anti-dumping duty under sub-section (2) but not beyond ninety days from the date of notification under the sub-section, and notwithstanding anything contained in any law for the time being in force, such duty shall be payable at such rate and from such date as may be specified in the noti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duty after being subjected to any process involving alteration of the description, name or composition of an article, such alteration shall be considered to circumvent the anti-dumping duty in force if the alteration of the description or name or composition of the article subject to anti-dumping duty results in the article being altered in form or appearance even in minor forms regardless of the variation of tariff classification, if any. 3. Where an article subject to anti-dumping duty is imported into India through exporters or producers or country not subject to anti-dumping duty, such exports shall be considered to circumvent the anti-dumping duty in force if the exporters or producers notified for the levy of anti-dumping duty change their trade practice, pattern of trade or channels of sales of the article in order to have their products exported to India through exporters or producers or country not subject to anti-dumping duty. Explanation- For the purposes of this sub-rule, it shall be established that there has been a change in trade practice, pattern of trade or channels of sales if the following conditions are satisfied, namely :- a) absence of a justification, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om the date of initiation of the investigation under Rule 26. 2) The designated authority shall issue a public notice recording its findings. 3) The Central Government may, pursuant to the recommendations made by the designated authority, extend the anti-dumping duty to imports of article including imports of such article from the date of initiation of the investigation under rule 26 or such date as may be recommended by the designated authority." 22. It would be seen that section 9A (1) of the Tariff Act empowers the Central Government to impose anti-dumping duty. Section 9A (1A) of the Tariff Act deals with circumvention of anti-dumping duty. It provides that if the Central Government is of the opinion that circumvention of anti-dumping duty has taken place whereby the anti-dumping duty imposed has been rendered ineffective by altering the description or the composition of the article, then it may extend the anti-dumping duty to such article. In exercise of the powers conferred under section 9A (6) of the Tariff Act, the Central Government framed Rules called the 1995 Rules. Rule 25 deals with circumvention of anti-dumping duty, while Rule 26 deals with initiation of investi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction reliance can be placed on the decision of the Supreme Court in Mohinder Singh Gill and another Vs. Chief Election Commissioner, New Delhi (1978) 1 SCC 405. The observations are: "8. The second equally relevant matter is that when a statutory functionary makes an order based on certain grounds, its validity must be judged by the reasons so mentioned and cannot be supplemented by fresh reasons in the shape of affidavit or otherwise. Otherwise, an order bad in the beginning may, by the time it comes to court on account of a challenge, get validated by additional grounds later brought ,out. We may here draw attention to the observations of Bose J. in Gordhandas Bhanji (1) "Public orders, publicly made, in exercise of a statutory authority cannot be construed in the light of explanations subsequently given by the officer making the order of what he meant, or of what was in Ms mind, or what he intended to, do. Public orders made by public authorities are meant to have public effect and are intended to effect the actings and conduct of those to whom they are addressed and must be construed objectively with reference to the language used in the order itself." Orders are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en for reducing the cost price of electricity supplied by the Appellant produced in its captive power plant. This was clearly illegal. ... ... ... 45. In our opinion, excessive and unwarranted claim of confidentiality defeats the right to appeal. In the absence of knowledge of the consequences, grounds, reasoning and methodology by which the DA has arrived at its decision and made its recommendation, the parties to the proceedings cannot effectively exercise their right to appeal either before the Tribunal or this Court. This is contrary to the view taken by the Constitution Bench of this Court in S.N. Mukherjee's case." (emphasis supplied) 29. In Asstt. Commr. Commercial Tax Department v/s. Shukla & Brothers 2010 (254) ELT 6 (SC), the Supreme Court, again observed that the proceedings before the Designated Authority are quasi judicial in nature and reasons have to be recorded by the Designated Authority. The Supreme Court noticed that NIP computed by the Designated Authority was much lower than that computed by the Appellant but reasons for such variance and detailed conclusion had not been disclosed by the Designated Authority to the Appellant. It is for this reason tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mere pretence of compliance with it would not satisfy the requirement of law. ..." (emphasis supplied) 30. In Kranti Associates Pvt. Ltd. Vs. Masood Ahmed Khan 2011 (273) ELT 345 (SC), reported in the Supreme Court after referring to the earlier decisions that hold that a quasi judicial authority must record reasons in support of its conclusion because reasons assure that the discretion has been exercised by the decision maker on relevant grounds and by disregarding irrelevant considerations, also observed that recording of reasons operates as a valid restraint on any possible arbitrary exercise of quasi judicial power. In paragraph 51 of the judgement, the Supreme Court summarised the position of law and the said paragraph is reproduced below: "51. Summarizing the above discussion, this Court holds: (a) In India the judicial trend has always been to record reasons, even in administrative decisions, if such decisions affect anyone prejudicially. (b) A quasi-judicial authority must record reasons in support of its conclusions. (c) Insistence on recording of reasons is meant to serve the wider principle of justice that justice must not only be done it must also appear to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Oxford, 2001 EWCA Civ 405, wherein the Court referred to Article 6 of European Convention of Human Rights which requires, "adequate and intelligent reasons must be given for judicial decisions". (o) In all common law jurisdictions judgments play a vital role in setting up precedents for the future. Therefore, for development of law, requirement of giving reasons for the decision is of the essence and is virtually a part of "Due Process". 31. Thus, it is clear from the aforesaid decisions of the Supreme Court that the principles of natural justice not only require the Designated Authority to grant an opportunity to the party to show cause but the order passed by the Designated Authority should also give reasons for arriving at conclusions and any violation of these two facets can vitiate the order. In the present case, the final findings do not give any reason. 32. It is seen that the Designated Authority, without examining whether the anti-dumping duty should be levied retrospectively from the date of initiation of the investigation, recommended that the anti-dumping duty will be applicable from the date of its notification by the Central Government. The Central Government is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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