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TMI Blog2021 (11) TMI 200X X X X Extracts X X X X X X X X Extracts X X X X ..... sal link between dumped imports and the injury to the domestic industry as also the magnitude of injury and injury margin. The designated authority had, after a detailed analysis, arrived at a conclusion that anti- dumping duty was required to be imposed and accordingly made a recommendation to the Central Government. It was, therefore, necessary for the Central Government to have examined all the relevant aspects necessary for deciding whether anti-dumping duty was required to be imposed or not and deal with the findings recorded by the designated authority, if the Central Government was to take a view different from the view expressed in the recommendation made by the designated authority. Recording of reasons, therefore, is a must if the Central Government decides not to follow the recommendation made by the designated authority. It is also necessary for the Central Government to record reasons in such a situation because an appeal lies to the Tribunal against the determination made by the Central Government. It is not possible to sustain the decision taken by the Central Government, contained in the Office Memorandum dated 14.12.2020, not to impose anti- dumping duty despite a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dumping duty on imports of the subject goods from the subject countries, alleging dumping and consequent injury. The designated authority issued a public notice dated 01.10.2019 for initiation of anti-dumping investigation under rule 6(1) to determine the existence, degree and effect of alleged dumping and to consider recommendation for imposition of anti-dumping duty, if any. The period of investigation for the purpose of anti-dumping duty was from 01.04.2018 to 30.06.2019 and the injury investigation period was from April 2015 to March 2018. Oral hearings were conducted and the parties that attended the oral hearings were advised to file written submissions on the views expressed orally, followed by rejoinders, if any. As contemplated under rule 16, the essential facts of the investigation were disclosed to the known interested parties by a disclosure statement dated 17.08.2020. The interested parties, including the appellant, filed comments to the disclosure statement. Thereafter, the designated authority notified the final findings on 25.08.2020. 3. The conclusion drawn by the designated authority in the final findings are as follows: "M. Conclusion 93. Having regard to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the final findings, anti-dumping duty not exceeding the margin as determined by the designated authority. 6. An Office Memorandum dated 14.12.2020 was then issued by the Government of India to convey its decision not to impose anti- dumping duty and it is reproduced below: "F.No. 354/122/2020-TRU Government of India Ministry of Finance Department of Revenue Tax Research Unit Room No. 156, North Block, New Delhi, the 14th December, 2020 Office Memorandum Subject: Final Findings in anti-dumping investigation concerning imports of "Choline Chloride in all forms" originating in or exported from China PR, Malaysia and Vietnam. The undersigned has been directed refer to the Final Findings Notification No. 6/18/2019-DGTR dated 25.08.2020 and to state that it has been decided by the Central Government not to impose anti-dumping duty on imports of "Choline Chloride in all forms", classified under customs tariff heading 2309 90 10, 2309 90 20, 2309 90 90 and 2923 10 00 and originating in or exported from China PR, Malaysia and Vietnam." (emphasis supplied) 7. Shri Basava Prabhu Patil, learned senior counsel assisted by Ms. Reena Khair and Shri Rajesh Sharma made the foll ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emicals Limited [2020 (373) E.L.T. 740 (S.C.)] and the decision of the Gujarat High Court in Alembic Ltd. vs. Union of India [2013 (291) E.L.T. 327 (Guj.)]; (iii) Superior public interest is a ground to refuse imposition of anti-dumping duty and in this contention, reliance has been placed on the decisions of the Supreme Court in Sales Tax Officer vs. Shree Durga Oil Mills [1998 (97) E.L.T. 202 (S.C.)], Kasinka Trading vs. Union of India [1994 (74) E.L.T. 782 (S.C.)] and Union of India vs. V.V.F. Ltd. [2020 (372) E.L.T. 495 (S.C.)]; and (iv) The recommendations made by the designated authority do not create any rights and, therefore, are not binding on the Central Government. In support of this contention, reliance has been placed on the decision of the Delhi High Court in Eveready Industries India Ltd. vs. Union of India [2019 (367) E.L.T. 53 (Del.)]. 9. Learned senior counsel for the appellant, in response to the submissions advanced by learned authorised representative appearing for the Department that the present appeal would not be maintainable under section 9C of the Tariff Act, submitted that since the appeal has been filed against an order of determination regarding t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of any article. 15. To examine this, it would be pertinent to refer to the relevant provisions of rules 4, 5 and 6 of the 1995 Anti-Dumping Rules. Rule 4 provides that it shall be the duty of the designated authority to investigate, in accordance with the rules, as to the existence, degree and effect of any alleged dumping in relation to import of any article. Rule 5 provides that the designated authority shall initiate an investigation to determine the existence, degree and effect of any alleged dumping only upon receipt of a written application by or on behalf of the domestic industry. Rule 6 provides that the designated authority shall, after it has decided to initiate investigation to determine the existence, degree and effect of any alleged dumping of any article, issue a public notice notifying its decision. 16. Rule 17 deals with final findings and the relevant portions are reproduced below: "17. Final findings. - (1) The designated authority shall, within one year from the date of initiation of an investigation, determine as to whether or not the article under investigation is being dumped in India and submit to the Central Government its final finding - (a) as to, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d conclusion finds support from the decision of the Supreme Court in Saurashtra Chemicals. In this case the designated authority had made an affirmative recommendation for imposition of anti-dumping duty. It is against the said recommendation of the designated authority that an appeal was filed before the Tribunal under section 9C of the Tariff Act. The Tribunal held that the appeal was not maintainable. A Special Leave Petition was filed before the Supreme Court against this order of the Tribunal. The Supreme Court held that as the order of the designated authority was purely recommendatory and an appeal lies to the Tribunal against the determination, which determination had yet to be made by the Central Government, there was no error in the order passed by the Tribunal holding that the appeal was not maintainable. The Supreme Court, therefore, dismissed the Special Leave Petition. The order of the Supreme Court is reproduced below: "We see no reason whatsoever to entertain these special leave petitions. It is perfectly clear now that we have seen the provisions of the Act that the order of the Designated Authority is purely recommendatory. The appeal that lies is against the de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... view of the two tier procedure in the form of objective and reasoned recommendation to be followed by further examination and issue of notification in the Gazette, an act of delegated legislation, which is necessary to impose and levy any tax including Anti-dumping duty. Designated Authority has been empowered to investigate as to the existence, degree and effect of any alleged dumping in relation to import of articles and recommend to the Central Government when required the quantum of Anti-dumping duty equal to the margin of the dumping or less, specific date of the commencement and to review continuance of Anti-dumping duty. The Designated Authority so appointed acts for and on behalf of the Central Government. It has been bestowed with the powers vested and conferred on the Central Government under the CT Act. The Designated Authority, when it performs the functions under the CT Act, it is acting for and on behalf of the Central Government and not as an independent and a distinct third party. Designated Authority is no different from the Central Government. 28. If the aforesaid position is clear, then it is not difficult to appreciate and interpret the provisions for appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petitioner that the "order of determination" would mean notification imposing Anti-dumping [duty] and not a negative final finding of the Designated Authority under Rule 17, which is not recommendatory but the final determination, is erroneous and bad in law. In case of negative determination the finding of the Designated Authority is binding, it gives no discretion to the Central Government. Thereupon, the determination becomes the determinative order in the sense that no Anti-dumping duty can be imposed. 37. Negative finding of the Designated Authority does not require a notification, a legislative act, ergo the said final finding gets stamped and approved by the Statute itself as binding decision of the Central Government. 38. Therefore, in this context of the statutory provisions we would reject the argument of the petitioner that Section 9C postulates an appeal only against "order of determination" in the form of notification imposing Anti- dumping duty and not against the negative final finding of the Designated Authority. To say that in case of negative findings the Designated Authority in its order of determination goes into the question of existence, degree and effect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cation in the Official Gazette, impose an anti -dumping duty not exceeding the margin of dumping in relation to such article." 25. The function performed by the Central Government under section 9A of the Tariff Act is quasi-judicial in nature and not legislative. This is what was observed by the Supreme Court in Reliance Industries and the observations are as follows: "38. We do not agree with the Tribunal that the notification of the Central Government under Section 9A is a legislative Act. In our opinion, it is clearly quasi-judicial. The proceedings before the DA is to determine the lis between the domestic industry on the one hand and the importer of foreign goods from the foreign supplier on the other. The determination of the recommendation of the DA and the Government notification on its basis is subject to an appeal before the CESTAT. This also makes it clear that the proceedings before the DA are quasi-judicial." 26. Learned authorised representatives appearing for the Department, however, placed reliance upon a decision of the Gujarat High Court in Alembic Ltd., and submitted that the function performed by the Central Government is legislative in nature. A perusal of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... manifestly unjust or oppressive or outrageous or directed to an unauthorised end or do not tend in some degree to the accomplishment of the objects of delegation, courts might well say, "Parliament never intended to give authority to make such rules; they are unreasonable and ultra vires". per Lord Russel of Killowen, C.J. in Kruse v. Johnson. 51. A repository of power acts ultra vires either when he acts in excess of his power in the narrow sense or when he abuses his power by acting in bad faith or for an inadmissible purpose or on irrelevant grounds or without regard to relevant considerations or with gross unreasonableness. See Associated Provincial Picture Houses Ltd. v. Wednes-bury Corporation, [1948] 1 K.B. 223. In the words of Lord Macnaghten in Westminster Corporation v. London and North Western ' Railway [1905 AC 426, 430: 93 LT 143],: " ..... It is well settled that a public body invested with statutory powers such as those conferred upon the Corporation must take care not to exceed or abuse its powers. It must keep within the limits of the authority commit- ted to it. It must act in good faith. And it must act reasonably. The last proposition is i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e extent and nature of reasons would depend on particular facts and circumstances. However, what is necessary is that reasons should be clear and explicit so as indicate that the authority has given due consideration to the points of controversy. The Supreme Court also observed that the need for recording of reasons is greater in a case where the order is passed at the original stage. The appellate or revisional authority need not give separate reasons if the appellate or revisional authority agrees with the reasons contained in the order under challenge. The relevant paragraphs are reproduced below: "35. The decisions of this Court referred to above indicate that with regard to the requirement to record reasons the approach of this Court is more in line with that of the American Courts. An important consideration which has weighed with the Court for holding that an administrative authority exercising quasi-judicial functions must record the reasons for its decision, is that such a decision is subject to the appellate jurisdiction of this Court under Article 136 of the Constitution as well as the supervisory jurisdiction of the High Courts under Article 227 of the Constitution an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... revisional authority, if it affirms such an order, need not give separate reasons if the appellate or revisional authority agrees with the reasons contained in the order under challenge." (emphasis supplied) 30. In Hindustan Tin Works (P) Ltd. vs. Employees [(1979) 2 SCC 80: 1979 SCC (L&S) 53] , the Supreme Court made the following observations: "In the very nature of things there cannot be straightjacket formula forwarding relief of back wages. All relevant consideration will enter the verdict. More or less, it would be a motion addressed to the discretion of the Tribunal. Full back wages would be the normal rule and the party objecting to it must establish the circumstances necessitating departure. At that stage the Tribunal will exercise its discretion keeping in view all the relevant circumstances. But the discretion must be exercised in a judicial and judicious manner. The reason for exercising discretion must be cogent and convincing and must appear on the face of the record. When it is said that something is to be done within the discretion of the authority, that something is to be done according to the rules of reason and justice, according to law and not humour. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t for sustaining the litigants‟ faith in the justice delivery system. (j) Insistence on reason is a requirement for both judicial accountability and transparency. (k) If a Judge or a quasi-judicial authority is not candid enough about his/her decision making process then it is impossible to know whether the person deciding is faithful to the doctrine of precedent or to principles of incrementalism. (l) Reasons in support of decisions must be cogent, clear and succinct. A pretence of reasons or "rubber-stamp reasons‟ is not to be equated with a valid decision making process. (m) It cannot be doubted that transparency is the sine qua non of restraint on abuse of judicial powers. Transparency in decision making not only makes the judges and decision makers less prone to errors but also makes them subject to broader scrutiny. (See David Shapiro in Defence of Judicial Candor (1987) 100 Harward Law Review 731-737). (n) Since the requirement to record reasons emanates from the broad doctrine of fairness in decision making, the said requirement is now virtually a component of human rights and was considered part of Strasbourg Jurisprudence. See (1994) 19 EHRR 553, at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uch enquiry as may be considered necessary and the Central Government may, by notification in the official gazette, make rules for the purpose of this section. The Central Government, as noticed above, has framed the 1995 Anti Dumping Rules. The duties of the designated authority and initiation of investigation are contained in rules 4 and 5. The principles governing investigation are contained in rule 6 and it is reproduced below: "6. Principles governing investigations.- (1) The designated authority shall, after it has decided to initiate investigation to determine the existence, degree and effect of any alleged dumping of any article, issue a public notice notifying its decision and such public notice shall, inter alia, contain adequate information on the following:- (i) the name of the exporting country or countries and the article involved; (ii) the date of initiation of the investigation; (iii) the basis on which dumping is alleged in the application; (iv) a summary of the factors on which the allegation of injury is based; (v) the address to which representations by interested parties should be directed; and (vi) the time-limits allowed to interested parties ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stigation, the designated authority may record its findings on the basis of the facts available to it and make such recommendations to the Central Government as it deems fit under such circumstances." 34. Rule 10 deals with determination or normal value, export price and margin of dumping and it is reproduced below: "10. Determination of normal value, export price and margin of dumping- An article shall be considered as being dumped if it is exported from a country or territory to India at a price less than its normal value and in such circumstances the designated authority shall determine the normal value, export price and the margin of dumping taking into account, inter alia, the principles laid down in Annexure I to these rules." 35. Rule 11 deals with determination of injury and is reproduced below: "11. Determination of injury. - (1) In the case of imports from specified countries, the designated authority shall record a further finding that import of such article into India causes or threatens material injury to any established industry in India or materially retards the establishment of any industry in India. (2) The designated authority shall determine the injur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uted to any factor, other than the dumped imports and whether there was a causal link between dumped imports and the injury to the domestic industry as also the magnitude of injury and injury margin. It is after an analysis of the aforesaid factors that the designated authority arrived at a conclusion that: I. The product under consideration has been exported to India from the subject countries below its normal value, resulting in dumping. II. The domestic industry has suffered material injury due to dumping of the product under consideration from the subject countries. III. The material injury has been caused by the dumped imports from the subject countries. 42. The designated authority, therefore, in such circumstances recommended the imposition of anti-dumping duty. 43. The final findings of the designated authority were communicated to the Central Government. The Office Memorandum dated 14.12.2020 mentions, in connection with the final findings dated 25.08.2020, that the Central Government has decided not to impose anti-dumping duty. No reasons have been recorded as to why the Central Government decided not to impose anti-dumping duty. No doubt a discretion vested with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taken into consideration by the Central Government in not recommending imposition of anti-dumping duty, but reasons have to be provided for so holding. The decision of the Central Government contained in the Office Memorandum also does not state that superior public interest is a reason for not imposing anti-dumping duty. It is, therefore, not open to the respondents to take this plea in this appeal. The decisions of the Supreme Court in Shree Durga Oil Mills, Kasinka Trading and V. V. F. Ltd. would, therefore, have no application to the facts of the present case. 46. Thus, for all the reasons stated above, it is not possible to sustain the decision taken by the Central Government, contained in the Office Memorandum dated 14.12.2020, not to impose anti- dumping duty despite a recommendation having been made by the designated authority for imposition of anti-dumping duty. The matter would, therefore, have to be remitted to the Central Government to take a fresh decision on the recommendation made by the designated authority. 47. Though rule 18 provides that the Central Government has to take a decision within three months of the date of publication of final findings by the design ..... X X X X Extracts X X X X X X X X Extracts X X X X
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