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TMI Blog2023 (6) TMI 859X X X X Extracts X X X X X X X X Extracts X X X X ..... the relevant provisions of the Tariff Act, the 1995 Anti-Dumping Rules and the decisions of the Supreme Court and the High Courts observed that the function performed by the Central 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 STATE OF T.N. SECRETARY HOUSING DEPTT. MADRAS VERSUS K. SABANAYAGAM ANR. [ 1997 (11) TMI 520 - SUPREME COURT] . The inevitable conclusion, therefore, that follows 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 complied with. The matter, therefore, would have to be remitted to the Central Government for taking a fresh decision on the recommendat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... um dated 28-10-2022 is set aside and the matter is remitted to the Central Government to reconsider the recommendation made by the designated authority in the final findings - appeal allowed by way of remand. - Application No. AD/ Misc./50699/2022 in Appeal No. AD/52241/2022 - Final Order No. 51220/2022 - Dated:- 23-12-2022 - MR. DILIP GUPTA, PRESIDENT, P.V. SUBBA RAO, MEMBER (T) AND MS. RACHNA GUPTA, MEMBER (J) Mr. Vipin Kumar Jain, Mr. Rajesh Sharma, Ms. Tuhina Sinha, Mr. Nikhil Sharma, Mr. Sparsh Bhargava, Ms. Radhika Sharma, Ms. Suhani Chanchlani, Mr. Ameet Singh, Ms. Bhavana Varsha, Advs. and Mr. Nagendra Yadav, A.R., for the Appearing Parties. ORDER The grievance raised by the appellant, which is a domestic industry, is that despite a recommendation having being made by the designated authority in the final findings notif ied on 29-7-2022 for imposition of anti-dumping duty under section 9A of the Customs Tariff Act 1975 , the Central Government did not issue the notification for imposition of anti-dumping duty. The main relief, therefore, that has been claimed in the appeal is that the office memorandum dated 28-10-2022 issued by the Ministry of Finance, De ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i-dumping duty on the import of the subject goods from the subject countries and, thereafter, Central Government issued a notification on 30-8-2017 for imposition of anti-dumping duty for a period of five years. 4. In view of a duly substantiated application filed by the domestic industry before the expiry of the aforesaid period of five years, the designated authority initiated a sunset review investigation by a notification dated 10-2-2022 to review the need for continued imposition of duties in force in respect of the subject goods from the subject countries and to examine whether the expiry of such duty was likely to lead to continuance or recurrence of dumping and injury to the domestic industry. Pending the investigation, a notification dated 30-5-2022 was issued extending the duties upto 31-10-2022. The period of investigation for the purpose of the review was from October 2020 to September 2021 and the injury analysis period was from 2018 to 2021 and the period of investigation. 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 contempl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 50-60% exports by KKPC, European Union and Thailand producers respectively to third countries are at dumped prices. (xii) It is noted that 30-40% of exports of the responding producer to third countries are at prices which are lower than the export price to India. Similarly, 30-40% of exports in case of in case of European Union and 10-20% exports in case of Thailand are at prices below Indian prices. (xiii) There is persistent practice of dumping of the subject goods in other jurisdictions as evidenced from duties imposed and/or continuation of duties from other jurisdictions, and it is highly likely that the imports from the subject countries would increase on the event of cessation of duties. (xiv) The fact that the dumped imports continued even after imposition of duties shows a strong likelihood that if the duties are revoked the imports will increase at a much higher rate. (xv) The Authority accordingly concludes that there is likelihood of continuation/recurrence of dumping and injury to the domestic industry in the event of cessation of duties. (xvi) The user industry has not been able to establish any adverse impact of duties on them. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of investigation and the price effects would have been higher if anti-dumping duty had not been imposed. The designated authority also found that there were significant imports from the subject countries below the selling price of the domestic industry which would have a likely depressing effect on the prices of the domestic industry on cessation of duties. The authority, therefore, concluded that there was a likelihood of continuation/recurrence of dumping and injury to the domestic industry in the event of cessation of duties. The designated authority, therefore, made a recommendation to the Central Government to continue anti-dumping duty on the import of the subject goods from the subject countries. 7. An office memorandum dated 28-10-2022 was then issued by the Ministry of Finance to convey the decision of the Central Government not to impose anti-dumping duty. It is reproduced below : F. No. CBIC-190354/133/2022-TRU Government of India Ministry of Finance Department of Revenue (Tax Research Unit) Room No. 156, North Block, New Delhi, dated 28th October, 2022 OFFICE MEMORANDUM Subject : Final Findings in the matter of sun set review of Anti-D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ciples of natural justice were not required to be complied with. It is for this reason that the Learned Authorized representative submitted that a reasoned order was not required to be passed by the Central Government for not accepting the recommendations made by the designated authority. 10. In order to examine these submissions it would be useful to first examine the relevant provisions of the Tariff Act and the 1995 Anti-Dumping Rules. 11. Anti-dumping duty is imposed by the Central Government under section 9A of the Tariff Act. It provides that where any article is exported by an exporter or producer from any country 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 an anti-dumping duty not exceeding the margin of dumping in relation to such article. The margin of dumping, the export price and the normal price have all been defined in Section 9A(1) of the Tariff Act. 12. Sub-section (5) of Section 9A provides that anti-dumping duty imposed shall, unless revoked earlier, cease to have effect on the expiry of five years from the date of such impositio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n sub-rule (1) of Rule 5 to- (i) the known exporters or to the concerned trade association where the number of exporters is large, and (ii) the governments of the exporting countries : Provided that the designated authority shall also make available a copy of the application to any other interested party who makes a request therefor in writing. (4) The designated authority may issue a notice calling for any information, in such form as may be specified by it, from the exporters, foreign producers and other interested parties and such information shall be furnished by such persons in writing within thirty days from the date of receipt of the notice or within such extended period as the designated authority may allow on sufficient cause being shown. Explanation. - For the purpose of this sub-rule, the notice calling for information and other documents shall be deemed to have been received one week from the date on which it was sent by the designated authority or transmitted to the appropriate diplomatic representative of the exporting country. (5) The designated authority shall also provide opportunity to the industrial users of the article under investigati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cles and the consequent effect of such imports on domestic producers of such articles and in accordance with the principles set out in Annexure II to these rules. (3) The designated authority may, in exceptional cases, give a finding as to the existence of injury even where a substantial portion of the domestic industry is not injured, if- (i) there is a concentration of dumped imports into an isolated market, and (ii) the dumped articles are causing injury to the producers of all or almost all of the production within such market. 20. Rule 17 deals with final findings. It is reproduced below : 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, - (i) the export price, normal value and the margin of dumping of the said article; (ii) whether import of the said article into India, in the case of imports from specified countries, causes or threatens material injury to any industry established in India or materially retards ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l would be maintainable against the decision of the Central Government contained in the office memorandum not to impose anti-dumping duty. 27. The Bench also examined whether the determination by the Central Government was legislative in character or quasi-judicial in nature and after examining the relevant provisions of the Tariff Act, the 1995 Anti-Dumping Rules and the decisions of the Supreme Court and the High Courts observed that the function performed by the Central 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 State of Tamil Nadu v. K. Sabanayagam and another, [1998] 1 SCC 318. The relevant observation of the Bench in Apcotex Industries Ltd. are as follows : 75. Thus, even if it is assumed that the Central Government exercises legislative powers when it imposes anti-dumping duty or has taken a de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g Rules such as the Anti Dumping Rules 1995 or the 1997 Safeguard Rules, which function is clearly legislative. The second function is the making of a determination under rule 18 of the Anti-Dumping Rules 1995 or Rule 12 of the 1997 Safeguard Rules, which function is quasi judicial in nature. 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. xx xx xx 82. In view of the judgments of the Supreme Court in K. Sabanayagam, Cynamide India Ltd. and Godawat Pan Masala, and the decision of the Tribunal in Jubilant Ingrevia Limited, it has to be held that reasons have to be recorded by the Central Government when it proceeds to form an opinion not to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ance, if we examine the decisions on this score.** ** ** 31. After considering the decisions of the Supreme Court in PTC India Ltd. v. Central Electricity Regulatory Commission, [2010] 4 SCC 603, National Thermal Power Corpn. v. Madhya Pradesh State Electricity Board [2011] 15 SCC 580 and Reliance Industries v. Designated Authorities [2006] 10 SCC 368 = 2006 (202) E.L.T. 23 (SC), the Gujarat High Court also observed: 6.5.4 Under Section 9-C of the Customs Tariff Act, appeal lies against the order of determination or review of the countervailing duty before the Customs, Excise and Service Tax Appellate Tribunal, constitution under section 129 of the Customs Act, 1962. In view of this, the Notification necessarily takes a quasi-judicial colour. 32. The Gujarat High Court also examined whether quasi-judicial process was involved in issuance of the notification by the Central Government and after analyzing the decision of the Supreme Court in Indian National Congress v. Institute of Social Welfare, [2002] 5 SCC 658, held that the notification issued by the Central Government would be quasi-judicial in nature. 33. The inevitable conclusion, therefore, that follows from th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duty, but the Central Government has not given effect to any of said orders till date since neither it has imposed duties recommended by the designated authority in those cases nor has it passed any reasoned order. It has, therefore, been submitted that instead of remitting the matter to Central Government, the Tribunal may, by taking note of the detailed analysis and reasoned findings arrived at by the designated authority regarding likelihood of continuance of dumping and injury, extend the levy of anti-dumping duty under the first proviso to Section 9A(5) of the Tariff Act. The contention is that the powers of the Tribunal, being an appellate authority, are co-terminus with the powers of the Central Government under Section 9A of the Tariff Act and in this connection reliance has been placed on the decision of the Supreme Court in Commissioner of Income Tax v. McMillan Co., AIR 1958 SC 207 and on the decision of a Full Bench of the Madras High Court in State of Tamil Nadu v. Arulmurugan and Co., (1982) 51 STC 381 (FB) (Mad.). 39. Alternatively, Learned Counsel submitted that if the Tribunal is of the view that matter should be remanded to the Central Government for recon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty or in the alternate, if the Tribunal is of the view that matter needs to be re-examined by the Central Government, the Tribunal may, while remanding the matter, continue the original duty under the second proviso to Section 9A(5) of the Tariff Act till the conclusion of review by the Central Government, or otherwise direct the Central Government to issue an appropriate notification for such continuation. 41. Learned Counsel for the appellant further submitted that since extension of duty (under first proviso) or continuance of duty (under second proviso) would have to be given effect from the date of original office memorandum, a direction for provisional assessment of duty is warranted in the facts of the case so as to ensure that if the Central Government finally decides to extend/continue the levy, such levy can be given effect to from the date of the original office memorandum. 42. It will not be appropriate for the Tribunal, at this stage, to extend the anti-dumping duty on the basis of the final findings of the designated authority in terms of the first proviso to Section 9A(5) of the Tariff Act. The matter is being remitted to the Central Government to take a consid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... designated authority for imposition of anti-dumping duty. The order passed by the Delhi High Court on 5-9-2022 in W.P. (C) 5185/2022 filed by the Union of India against the decision of the Tribunal in Jubilant Ingrevia Ltd. (supra) 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 notification dated 25-8-2020 has recommended the imposition of anti-dumping duty [in short ADD ]. 6. It is also not in dispute that the Government of India has disagreed with the recommendation made by the DA. 7. This decision forms part of the Office Memorandum (OM) dated 14-12-2020. 8. Given this position, we are of the view that as an ad-interim measure, the following direction would suffice, as the need to impose ADD would arise only if the respondent were to succeed in the instant writ petition. (i) The provisional assessment of imports concerning the product in issue will be made for the time being. The importers would, thus, be put to notice of the possibility of ADD bein ..... X X X X Extracts X X X X X X X X Extracts X X X X
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