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TMI Blog2022 (12) TMI 830X X X X Extracts X X X X X X X X Extracts X X X X ..... ral Government would be quasi-judicial in nature. The Bench also, in the alternative, held that even if the function performed by the Central Government was legislative, then too the principles of natural justice and the requirement of a reasoned order have to be compiled with since the Central Government would be performing the third category of conditional legislation contemplated in the judgment of the Supreme Court in TATE OF T.N. SECRETARY HOUSING DEPTT. MADRAS VERSUS K. SABANAYAGAM ANR. [ 1997 (11) TMI 520 - SUPREME COURT ]. The inevitable conclusion, therefore, is that 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 as it does not contain reasons nor the principles of natural justice have been compiled with. The matter, therefore, would have to be remitted to the Central Government for taking a fresh decision on the recommendation made by the designated authority for imposition of anti-dumping duty on the import of the subject goods from the subject countries. The office memorandum dated 06.06.2022 is set asid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l Finding issued by Respondent No. 2. b) direct the Respondent No. 1 to submit its records/files wherein reasons, if any, for not imposing the antidumping duty in the present matter, has been recorded. 4. The prayer made in the latter application is as follows: (a-1) To call for records and relevant files, basis which the Respondent no. 1 had decided to not impose anti-dumping duty as recommended by the Respondent no. 2, and after considering the reasons, if any, recorded therein, modify the impugned order issued by the Respondent no. 1 and impose Anti-dumping duty as recommended by the Respondent no. 2. (b-1) Impose the provisional anti-dumping duties in terms of the Sub-section 2 of Section 9A of the Customs Tariff Act, 1975, pending determination in the matter. 5. It transpires from the records that the appellant had filed an application before the designated authority for initiation of antidumping investigation under the provisions of the Tariff Act and the Customs Tariff (Identification, Assessment and Collection of Anti- Dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995 [ the 1995 Anti-Dumping Rules ] on imports of Low Density Poly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erminated against exports of the subject goods from UAE and Qatar in accordance with Rule 14(c) of the Rules. Accordingly, the subject countries comprise of USA, Saudi Arabia, Singapore, and Thailand only. d. The subject goods are being dumped into India from the subject countries i.e. USA, Saudi Arabia, Singapore and Thailand. Considering the normal value and the export price of the product under consideration, the dumping margin has been determined for the subject countries. The dumping margin is positive and significant for subject countries. e. The volume of imports into India declined in 2018-19, as the domestic industry increased capacity. However, during the period of investigation, the imports have increased, in absolute terms as well as in relation to production and consumption. f. The imports of the subject goods from the subject countries are undercutting the prices of the domestic industry. g. The imports have suppressed and depressed the prices of the domestic industry, as the landed price and selling price of the domestic industry declined despite an increase in raw material price. h. The capacity, production and capacity utilization of the dome ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s by the domestic industry or use of naptha. p. The price of imports from other countries is much higher than the price of imports from the subject countries. q. The information on record shows that non-imposition of anti-dumping duty will adversely impact the indigenous production, while imposition of anti-dumping duty will not materially impact the consumers or the downstream industry or the public at large. r. The imposition of the anti-dumping duty will not hamper the availability of the product under consideration but will ensure that the same is available at fair prices. Further, the product under consideration can also be imported from other sources, such as Qatar, UAE, Belgium, Netherlands, Korea RP. s. The impact of duties on the prices of the downstream products would be negligible. t. On the basis of the information provided by the interest parties and the investigation conducted, the Authority is of the view that imposition of the anti-dumping duty will not be against public interest. u. In view of the foregoing, the Authority concludes that the domestic industry has suffered material injury due to the significant dumping of the product under con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Low Density Polyethylene (LDPE) originating in or exported from Saudi Arabia, Singapore, Thailand and USA. 2. In exercise of the powers conferred by sub-sections (1) and (5) of section 9A of the Customs Tariff Act, read with rules 18 and 20 of the Customs Tariff (Identification, Assessment and Collection of Antidumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995, the Central Government, after considering the final findings of the designated authority, has decided not to accept the aforesaid recommendations. Under Secretary (TRU-I) 9. The main contention that has been advanced by Shri Vipin Jain, learned counsel appearing for the appellant assisted by Shri Rajesh Sharma, Ms. Tuhina Sinha and Shri Samarth is that the office memorandum, communicating the decision of the Central Government not to impose anti-dumping duty, despite a recommendation having been made by the designated authority in the final findings to impose anti-dumping duty should be set aside for the reason that the principles of natural justice have been violated and even otherwise the decision is arbitrary, unreasoned and bad in law. The contention advanced by Shri S. Seetharam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of such duty; 16. Rule 5 deals with initiation of investigation to determine the existence, degree and effect of any alleged dumping. 17. Rule 6 deals with the principles governing investigation 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 for making their views known. (2) A copy of the public notice shall be forwarded by the designated authority to the known exporters of the article alleged to have been dumped, the Governm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such circumstances. 18. 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. 19. Rule 11 deals with determination of injury and it 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 injury to domestic industry, threat of injury to domestic industry, material retardation to establishment of domestic industry and a causal link between dumped imports ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... margin of dumping. It provides that the designated authority while determining the normal value, export price and margin of dumping shall take into account the principles contained in clauses (1) to (8) of the Annexure. 23. Annexure-II to the 1995 Anti-Dumping Rules deals with the principles for determination of injury. It provides that the designated authority while determining the injury or threat of material injury to domestic industry or material retardation of the establishment of such an industry, and causal link between dumped imports and such injury, shall inter alia, take the principles enumerated from (i) to (vii) of Annexure II under consideration. 24. Annexure-III to the 1995 Anti-Dumping Rules deals with the principles for determination of non-injurious price. 25. It is keeping in mind the aforesaid legal provisions that the submissions advanced by the learned counsel for the appellant and the learned counsel for the private respondents, as also the learned authorized representatives appearing for the respondent Union of India have to be considered. 26. The maintainability of the appeal under section 9C of the Tariff Act was examined at length by this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elevant factors on the basis of the evidence led by the parties. This would be more clear from the provisions of section 9A(6) of the Tariff Act which provide that the margin of dumping, which is a relevant factor, has to be ascertained and determined by the Central Government, after such inquiry as it may consider necessary. Rules may have been framed by the Central Government under which the designated authority has to carry out a meticulous examination, but nonetheless when the Central Government has to take a decision on the recommendation made by the designated authority in the final findings such factual aspects cannot be ignored. 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. ***** 78. It will be evident from the aforesaid judgme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be accepted. Thus, 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. (emphasis supplied) 30. Learned authorized counsel for the appellant has also placed a decision of the Gujarat High Court in Realstripes Limited 1 other(s) vs. Union of India 1 other(s) [ R/Special Civil Application No. 4495 of 2022 decided on 02.09.2022 ]. The High Court repelled the contention advanced on behalf of the Central Government that the issuance of the notification was legislative in character and the relevant observations are as follows: 6.5 It was another submission in vain on behalf of respondents seeking to assert that notification rescinding t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... herein reasons, if any, for not imposing the anti-dumping duty have been recorded. Paragraph 7 of the application is reproduced below: 7. The applicant submits that the appellate proceeding before the CESTAT is a continuation the proceedings carried out by the Respondent No. 1 2. As such, being the first appellate authority, this Hon ble Tribunal interalia has the power under Section 9A(2) read with Rule 41 to impose provisional levy. Under Section 9A(2), a provisional levy can be imposed, pending (final) determination, on the basis of a provisional estimate of normal value and dumping margin. In the present facts, the Respondent no. 2 has, after conducting elaborate investigation, issued its final conclusion on the normal value and dumping margin, as well as injury margin and has accordingly recommended imposition of anti-dumping duty, which was, however, not acceded to by the Respondent no. 1. The Applicant has in the present appeal challenged the said decision of the Respondent no. 1. As such, pending the final determination to be made by this Hon ble Tribunal in the present matter, the applicant prays that power under sub-section 2 of Section 9A to impose the provisional ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emorandum). In this regard, learned counsel placed reliance on the decisions of the Supreme Court in Mekha Ram and others vs. State of Rajasthan [ Civil Appeal No. 2229-2234 of 2022 decided on 29.03.2022 ], Priyanka Overseas Pvt. Ltd. vs. Union of India [ 1991 (51) E.L.T. 185 (S.C.) ] and Kuil Fireworks Industries vs. CCE [ 1997 (95) E.L.T. 3 ]. 37. Learned counsel also submitted that though rule 20(1) of the 1995 Anti-Dumping Rules provides that a levy of anti-dumping duty should take effect from the date of its publication in the Official Gazette, but this would be applicable only in respect of notifications issued consequent to the final findings of the designated authority and not to notifications issued for levy of duty consequent to an order of the Tribunal modifying or annulling the earlier decision. According to the learned counsel, levy of duty in such an event would come into effect from the date of original determination made by the Central Government i.e. the date of the office memorandum, otherwise the statutory remedy of an appeal before the Tribunal would be rendered ineffective. 38. Learned counsel also submitted that considering the settled legal principle of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to defend the order. In any case, the matter is being remitted to the Central Government to reconsider the recommendation made by the designated authority in the light of the observations made in the order. 42. In the end, learned counsel for the appellant also urged that the Tribunal may protect the interest of the appellant in the same manner as was protected by the Delhi High Court in the writ petition filed by the Union of India against the decision of the Tribunal in Jubilant Ingrevia. 43. The Tribunal had also set aside a similar office memorandum issued by the Under Secretary conveying the decision of the Central Government not to impose anti-dumping duty despite a recommendation made by the designated authority for imposition of anti-dumping duty. The order passed by the Delhi High Court on 05.09.2022 in W.P(C)5185/2022 filed by the Union of India against the decision of the Tribunal in Jubilant Ingrevia, is reproduced below: W.P.(C) 5185/2022 CM No.15389/2022[Application filed on behalf of the petitioner seeking interim relief] 5. The respondent before us is the domestic industry. It is not in dispute that the Designated Authority [in short DA ] via notifica ..... X X X X Extracts X X X X X X X X Extracts X X X X
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