Custom, Excise & Service Tax Tribunal
Reliance Industries Limited vs -Designated Authority Directorate ... on 23 December, 2022
Author: Dilip Gupta
Bench: Dilip Gupta
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
NEW DELHI
PRINCIPAL BENCH
ANTI DUMPING APPEAL NO. 52241 OF 2022
(Arising out of Office Memorandum F. No. 190354/133/2022-TRU dated 28.10.2022,
and Final Finding Notification F. No. 7/31/2021-DGTR dated 29th July 2022)
M/s. Reliance Industries Limited .....Appellant
Maker Chambers - IV, Nariman Point
Mumbai 400 021, India
VERSUS
1. The Union of India
Through the Secretary,
Ministry of Finance,
Department of Revenue,
North Block, New Delhi-110001
2. Designated Authority, Directorate
General of Trade Remedies
Department of Commerce & Industry
Parliament Street, Jeevan Tara Building,
4th Floor, New Delhi-110 001
3. M/s. Apollo Tyres Limited
Apollo House, Plot No-7, Sector-32
Institutional Area, Gurgaon, Pin-122001
4. Automotive Tyre Manufactures' Association
PHD House, 4th Floor, Siri Institutional Area,
Opp. Asian Games Village
New Delhi - 110 016
5. M/s. CEAT Limited
463, Dr. Annie Besant Road,
Near Old Passport Office, Worli,
Mumbai, Maharashtra, 400 030
6. M/s. JK Tyre & Industries Limited
3, Bahadur Shah Zafar Marg,
New Delhi - 110001
7. M/s. MRF Limited
No. 114 Greams Road,
Chennai 600 006
8. The Russia Federation
H5VP+7VP, Shantipath, Chanakyapuri
New Delhi - Delhi 110021
9. China Embassy
50-D, Shantipath, Chanakyapuri,
New Delhi, Delhi 110021
10. European Commission
5/5, Shantiniketan
New Delhi-110021, India
2
AD/52241/2022
11. Ms Shandong Yanggu Huatai International
Co. Ltd., China PR
No. 399 Qinghe West Road, Yanggu County
Shandong Province China 252300
12. Ms Shandong Derek New Material Co. Ltd.
6 Mingyuan Rd, Hekau District, Dongying,
Shandong, China, 257200
13. Bridgestone India Private
Plot No. A43, Phase-II, MIDC
Chakan, Village Sawardari, Taluka Khed, Dist.
Pune, Maharashtra 410501, India
14. Rishiroop Polymers Private Limited
65, Atlanta Building, Jamnalal Bajaj Road,
Vinay K Shah Marg, Nariman Point, Mumbai, Maharashtra 400021
15. Indian Synthetic Rubber Pvt. Ltd.
1st Floor, Tower 3, M/s. India Glycols Limited,
Noida-Greater Noida Exp, Sector 126,
Noida, Uttar Pradesh 201304
16. Bangkok Synthetics Co., Ltd.
175 Sathorn City Tower, 22nd Floor
South Sathorn Road, Tungmahamek,
Sathorn, Bangkok - 10120
17. POSCO International, European Union
Lurgiallee 16 Frankfurt am Main, D-60439
Germany
18. POSCO International Corporation, Korea RP
165, Convensia-Street, Yeonsu-gu,
Incheon, Korea (06235) 26F, 134, Teheran-ro
Gangnam-gu,
Seoul, South Korea 21998
19. Kumho Petrochemical Co. Ltd., Korea RP
East Wing 10-14th Floor, Signature
Towers Seoul, 100 Cheonggyecheon-ro,
Jung-gu, Seoul, South Korea 04542
20. Embassy of Thailand
56N, Nyaya Marg, Chanakyapuri,
New Delhi, Delhi 110021
21. Embassy of Korea RP
Chandragupta Marg, Chanakyapuri Extension,
Chanakyapuri, New Delhi, Delhi 110021
22. Embassy of European Union ......Respondents
5/5, Shantiniketan
New Delhi-110021, India
WITH
ANTI DUMPING MISCELLANEOUS APPLICATION NO. 50699 OF 2022
(filed by the appellant)
3
AD/52241/2022
APPERANCE
Mr. Vipin Kumar Jain, Mr. Rajesh Sharma, Ms. Tuhina Sinha and Mr. Nikhil
Sharma, Advocates for the appellant
Mr. Sparsh Bhargava, Ms. Radhika Sharma & Ms. Suhani Chanchlani,
Advocates for the Respondent No.13.
Mr. Ameet Singh and Ms. Bhavana Varsha, Advocates for the DGAD
Mr. Nagendra Yadav, Authorised Representative for the Government
CORAM: HON'BLE MR. JUSTICE DILIP GUPTA, PRESIDENT
HON'BLE MR. P.V. SUBBA RAO, MEMBER (TECHNICAL)
HON'BLE MS. RACHNA GUPTA MEMBER (JUDICIAL)
Date of Hearing: 13.12.2022
Date of Decision: 23.12.2022
FINAL ORDER NO. _51220/2022__
JUSTICE DILIP GUPTA:
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 notified on 29.07.2022 for
imposition of anti-dumping duty under section 9A of the Customs Tariff
Act 19751, 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, Department of Revenue,
Tax Research Unit conveying the decision of the Central Government
not to impose anti-dumping duty proposed in the final findings of the
designated authority be set aside and a direction be issued to the
Central Government to issue a notification for imposition of anti-
dumping duty, based on the recommendation made by the designated
authority. The reliefs that have been claimed by the appellant in the
appeal are:
1. the Tariff Act
4
AD/52241/2022
"(i) Quash and set aside, decision taken by the Ministry of
Finance vide office memorandum No. 190354/133/2022-TRU
dated 28th October 2022 not to accept the Final Finding
Notification F. No. 7/31/2021-DGTR dated 29th July 2022;
(ii) Pass an order extending the anti-dumping duty for a further
period of three year, as recommended by Respondent No. 2
vide Final Finding Notification No. 7/31/2021-DGTR dated
29th July or alternatively, direct the Respondent No. 1 to
extend the anti-dumping duty and issue necessary
notification; and
(iii) In case the matter is being remitted to Respondent No. 1,
since the review has not concluded, CESTAT should direct
that anti-dumping may continue to remain in force pending
the outcome of such a review for a further period not
exceeding one year in terms of second proviso to Section
9A(5) and also direct the Respondent no. 1 to implement the
remand order before expiry of the said one year's period."
2. An Application bearing no. 50699 of 2022 has also been filed by
the appellant with the following prayers:
"a) extend the anti-dumping duty for a period of 1 year, in
terms of the second proviso to Section 9A (5) of the
Customs Tariff Act, 1975;
b) direct the Respondent no. 1 to submit its records/files
wherein reasons, if any, for not extending the anti-dumping
duty in the present matter, has been recorded."
3. It transpires from the records that the appellant had earlier filed
an application before the designated authority for initiation of anti-
dumping investigation under the provisions of the Tariff Act and the
5
AD/52241/2022
Customs Tariff (Identification, Assessment and Collection of Anti-
Dumping Duty on Dumped Articles and for Determination of Injury)
Rules, 19952 on imports of Styrene Butadiene Rubber3 originating in or
exported from European Union, Korea RP and Thailand 4 . The final
findings were notified by the designated authority on 12.07.2017 for
imposition of anti-dumping duty on the import of the subject goods
from the subject countries and, thereafter, Central Government issued
a notification on 30.08.2017 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 10.02.2022 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
30.05.2022 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 contemplated under rule 16, the essential facts of
the investigation were disclosed to the known interested parties by a
2. the 1995 Anti-Dumping Rules
3. the subject goods
4. the subject countries
6
AD/52241/2022
disclosure statement dated 19.07.2022. The interested parties,
including the appellant, filed comments to the disclosure statement.
5. Thereafter, the designated authority notified the final findings on
29.07.2022. The relevant portions of the conclusion drawn and the
recommendations made by the designated authority in the final
findings are as follows:
"N. CONCLUSION & RECOMMENDATIONS
144. Having regard to the contentions raised, information
provided, submission made and facts available before the
Authority as recorded above and on the basis of the above
analysis of the likelihood of continuation or recurrence of
dumping and injury to the domestic industry, the Authority
concludes that:
i. The applicant constitutes domestic industry under
Rule 2(b) of the Rules and the application
satisfies the requirements under the rules.
ii. There is continued dumping of the subject
goods from Korea RP and European Union,
despite duties being in force. The dumping
and injury margins are positive.
iii. The volume of dumped imports have
increased in absolute terms despite
imposition of duties.
iv. The imports are undercutting the price of
the domestic industry in the period of
investigation and the price effects would
have been higher in the absence of existing
duties.
v. Production, capacity utilisation, sales of the
domestic industry have increased during the POI.
vi. The subject imports are neither suppressing nor
depressing the prices of the domestic industry.
The domestic industry's performance has
improved in the period of investigation because of
the anti-dumping duty in place.
vii. Dumping of the subject goods has continued.
viii. Producers from Thailand and European Union
have unutilized capacities.
7
AD/52241/2022
ix. There are significant imports from the
subject countries below the selling price and
cost of sales of the domestic industry which
are likely to cause suppressing/depressing
effect on the prices of the domestic industry
on cessation of duties.
x. It is noted that 70-80%, 30-40% and 70-80%
production has been utilised for export purpose
by KKPC, European Union and Thailand producers
respectively.
xi. It is noted that 60-70%, 50-60% and 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. It is noted
that the continuation of anti-dumping duties on
the imports of the subject goods would be in the
interest of domestic producers of the subject
goods in India.
8
AD/52241/2022
xvii. The product under consideration has a very low
share in the total cost of tyre and therefore, the
impact of duties on the end product will be
negligible.
xviii. There is healthy competition in the Indian market
and continuation of anti-dumping duty would not
deprive the user industry of any requirements.
145. The Authority notes that the investigation was initiated
and notified to all interested parties and adequate
opportunity was given to the domestic industry, exporters,
importers and other interested parties to provide
information on the aspects of likelihood of
continuation/recurrence of dumping and injury.
146. Having concluded that there is likelihood of
continuation/recurrence of dumping and injury if the
existing anti-dumping duties are allowed to cease,
the Authority is of the view that continuation of duty
is required on the import of PUC from the subject
countries. The Authority examined as to what quantum of
duty be recommended which would mitigate the
dumping/injury on account of likelihood analysis as
conducted above. The volume of dumped and injurious
imports from subject countries to India and to the rest of
the world have been considered.
147. Under the aforesaid circumstances, the
Authority considers it appropriate to recommend
continuation of existing quantum of anti-dumping
duty on the imports of the subject goods from the
subject countries which would address and mitigate
the likelihood of dumping and injury from the subject
countries. The Authority, thus, considers it necessary to
recommend continuation of existing definitive anti-dumping
duty imposed vide Notification No. 43/2017-Customs (ADD)
dated 30th August 2017......"
(emphasis supplied)
6. It would be seen from the aforesaid final findings that it was on
the basis of a detailed analysis carried out by the designated authority
that the designated authority found as fact that the there was
9
AD/52241/2022
continued dumping of the subject goods to India from the subject
countries despite anti-dumping duty being in force and that the
dumping and injury margin was positive. The designated authority also
found as a fact that the imports were undercutting the price of the
domestic industry in the period 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-Dumping Investigation concerning imports of "Styrene Butadiene Rubber" originating 10 AD/52241/2022 in or exported from European Union, Korea RP and Thailand-reg The undersigned is directed to refer to final findings on the above subject issued vide notification F. No. 7/31/2021-DGTR, dated the 29th July, 2022, wherein it was recommended continuation of anti-dumping duty on imports of "Styrene Butadiene Rubber" originating in or exported from European Union, Korea RP and Thailand.
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, 20 and 23 of the Customs Tariff (Identification, Assessment and Collection of Anti- dumping 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.
Technical Officer (TRU-I)"
8. 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 Nikhil Sharma 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.
9. The contention advanced by Shri Sparsh Bhargava learned counsel for the respondent no. 13 assisted by Ms. Radhika Sharma and Ms. Suhani Chanchlani and other learned counsel for the respondents, is that the appeal is not maintainable under section 9C 11 AD/52241/2022 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. The learned authorized representative appearing for the Central Government contended, as had also been submitted in the earlier similar anti dumping appeals, that the present appeal is not maintainable and since the exercise of power by the Central Government was legislative in nature, the principles 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
AD/52241/2022
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 imposition.
13. Sub-section (6) of the section 9A of the Tariff Act provides that the margin of dumping has to be ascertained and determined by the Central Government, after such 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.
14. In exercise of the powers conferred by sub-section (6) of section 9A and sub-section (2) of the section 9B of the Tariff Act, the Central Government framed the 1995 Anti-Dumping Rules.
15. The duties of the designated authority are contained in rule 4 and the relevant portion is reproduced below:
"4. Duties of the designated authority.-
xxxxxxxxxxx
(d) to recommend to the Central Government-
(i) the amount of anti-dumping duty equal to the margin of dumping or less, which if levied, would remove the injury to the domestic industry, after considering the principles laid down in the Annexure III to these rules; and
(ii) the date of commencement 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.- 13
AD/52241/2022 (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 Governments of the exporting countries concerned and other interested parties.
(3) The designated authority shall also provide a copy of the application referred to in 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 14 AD/52241/2022 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 investigation, and to representative consumer organizations in cases where the article is commonly sold at the retail level, to furnish information which is relevant to the investigation regarding dumping, injury where applicable, and causality.
(6) The designated authority may allow an interested party or its representative to present the information relevant to the investigation orally but such oral information shall be taken into consideration by the designated authority only when it is subsequently reproduced in writing.
(7) The designated authority shall make available the evidence presented to it by one interested party to the other interested parties, participating in the investigation.
(8) In a case where an interested party refuses access to, or otherwise does not provide necessary information within a reasonable period, or significantly impedes the investigation, 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."
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-15
AD/52241/2022 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 and injury, taking into account all relevant facts, including the volume of dumped imports, their effect on price in the domestic market for like articles 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: 16
AD/52241/2022 "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 the establishment of any industry in India;
(iii) a casual link, where applicable, between the dumped imports and injury;
(iv) whether a retrospective levy is called for and if
so, the reasons therefor and date of
commencement of such retrospective levy:
xxxxxxx
(b) Recommending the amount of duty which, if levied, would remove the injury where applicable, to the domestic industry after considering the principles laid down in the Annexure III to rules."
21. Rule 18 deals with levy of duty and the relevant portion is reproduced below:
"18. Levy of duty.-
(1) The Central Government may, within three months of the date of publication of final findings by the designated authority under rule 17, impose by notification in the Official Gazette, upon importation into India of the article covered by the final finding, anti-
dumping duty not exceeding the margin of dumping as determined under rule 17."
22. Annexure-I to the 1995 Anti-Dumping Rules deals with the principles governing the determination of normal value, export price and margin of dumping. It provides that the designated authority while 17 AD/52241/2022 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 very Bench in M/s. Apcotex Industries Limited vs. Union of India and 38 others5 and it was held that the appeal 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,
5. Anti-Dumping Appeal No. 51491 of 2021 decided on 30.08.2022 18 AD/52241/2022 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 vs. K. Sabanayagam and another 6 . The relevant observation of the Bench in Apcotex Industries Limited 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 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 pointed out by the Supreme Court in K. Sabanayagam. 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
6. (1998) 1 SCC 318 19 AD/52241/2022 relevant 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 judgments that the Central Government, while acting as a delegated legislative body, performs two distinct and separate functions in the context of the levy of anti- dumping and safeguard duty. The first is the function of framing 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 20 AD/52241/2022 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.
*****
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 impose any anti-dumping duty despite a positive recommendation made by the designated authority in the final findings for imposition of anti-dumping duty."
(emphasis supplied)
28. The Bench also examined the requirements of compliance of the principles of natural justice and a reasoned order and held as followed:
"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 impose any anti-dumping duty despite a positive recommendation made by the designated authority in the final findings for imposition of anti-dumping duty."
(emphasis supplied)
29. The Bench thereafter observed:
"84. In view of the aforesaid decision of the Supreme Court in Punjab National Bank, the 21 AD/52241/2022 submission advanced by learned counsel for the appellant deserves 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 & other(s) vs. Union of India & other(s) 7 . 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 the countervailing duty is of legislative character and amounts of exercise of legislative power by the Central Government and therefore, not amenable to judicial review. 6.5.1 The submission is devoid of substance, if we examine the decisions on this score.*****"
31. After considering the decisions of the Supreme Court in PTC India Ltd. vs. Central Electricity Regulatory Commission 8 , National Thermal Power Corp. vs. Madhya Pradesh State
7. R/Special Civil Application No. 4495 of 2022 decided on 02.09.2022
8. (2010) 4 SCC 603 22 AD/52241/2022 Electricity Board 9 and Reliance Industries vs. Designated Authorities10, 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 vs. Institute of Social Welfare11, held that the notification issued by the Central Government would be quasi- judicial in nature.
33. The inevitable conclusion, therefore, that follows from the aforesaid discussion 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 recommendation made by the designated authority for imposition of anti-dumping duty on the import of the subject goods from the subject countries.
9. (2011) 15 SCC 580
10. (2006) 10 SCC 368
11. (2002) 5 SCC 658 23 AD/52241/2022
34. The second prayer made in the appeal is that the Tribunal should pass an order extending the anti-dumping duty for a period of three years as recommended by the designated authority in terms of the first proviso to section 9A(5) of the Tariff Act, or in the alternative a direction may be issued to the Central Government to extend the anti- dumping duty and issue the necessary notification.
35. The third relief that has been claimed in this appeal is that in case the matter is remitted to the Central Government, the Tribunal should direct that anti-dumping duty may continue to remain in force pending the outcome of such a review for a further period not exceeding one year in terms of the second proviso to section 9A (5) of the Tariff Act and also direct the Central Government to implement the order passed by the Tribunal before the expiry of the period of one year.
36. The first relief that has been claimed in the application that the Tribunal should extend the anti-dumping duty for a period of one year in terms of the second proviso to section 9A (5) of the Tariff Act is similar to the third relief claimed in the appeal.
37. The second relief that has been claimed in the application is that a direction may be issued to the Central Government to submit records/files wherein reasons, if any, have been recorded for not extending the anti-dumping duty.
38. The learned counsel for the appellant pointed out that even though the Tribunal had on 27.10.2021 in Jubilant Ingrevia and on 30.08.2022 in Apcotex Industries remanded the matter to the Central Government to take a fresh decision on the recommendations made by the designated authority in the final findings for imposition of 24 AD/52241/2022 anti-dumping 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 vs. McMillan & Co.12 and on the decision of a Full Bench of the Madras High Court in State of Tamil Nadu vs. Arulmurugan and Company13.
39. Alternatively, learned counsel submitted that if the Tribunal is of the view that matter should be remanded to the Central Government for reconsideration on the aspect of whether or not anti-dumping duty is to be extended under the first proviso to section 9A (5) of the Tariff Act, anti-dumping duty, as imposed by the original notification, may be directed to be continued under the second proviso to section 9A (5) of the Tariff Act as in the present case there is no dispute that the sunset review was initiated prior to expiry of the original five years period and, in fact, an extension of duty till 30.10.2022 under the second proviso was also made by the Central Government. Learned
12. AIR 1958 SC 207
13. (1982) 51 STR(FB) 25 AD/52241/2022 counsel pointed out that prior to the expiry of the said extended period, the impugned office memorandum was issued on 28.10.2022, deciding not to extend the duty. The submission, therefore, is that if the Tribunal is of the view that matter is required to be sent back to the Central Government for re-determination, the anti-dumping duty, as initially imposed, may be continued till the completion of review by the Central Government. In this regard, it has also been submitted that a gap in duty would not be an hindrance in either continuation of duty for one year under the second proviso to section 9A (5) of the Tariff Act as held by the Supreme Court in Union of India vs. Kumho Petrochemicals Company Limited14 or its extension for three years under the first proviso to section 9A (5) of the Tariff Act as held by the Delhi High Court in Forech India Ltd. vs. Designated Authority15. In this connection, learned counsel further submitted that in view of the principle of restitution, the order passed by the Tribunal under section 9C of the Tariff Act confirming, modifying or annulling the order appealed against has to necessarily relate back to the date of the original order (i.e office memorandum) as was held by the Supreme Court in Mekha Ram and others vs. State of Rajasthan 16 ; Priyanka Overseas Pvt. Ltd. vs. Union of India 17 ; and Kuil Fireworks Industries vs. CCE18.
40. The submissions advanced by the learned counsel for the appellant, therefore, are that the Tribunal may direct for extension of anti-dumping duty in the light of the recommendations made by the
14. 2017 (351) E.L.T. 65 (S.C.)
15. 2018 (361) E.L.T. 671 (Del.)
16. Civil Appeal No. 2229-2234 of 2022 decided on 29.03.2022
17. 1991 (51) E.L.T. 185 (S.C.)
18. 1997 (95) E.L.T. 3 26 AD/52241/2022 designated authority 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 considered decision on the recommendation made by the designated authority and it will be for the Central Government to take an appropriate decision in this regard. However, as sufficient time has lapsed since recommendation was made by the designated authority it is expected that the Central Government will take a decision at an early date.
43. It will also not be appropriate to direct for levy of anti-dumping duty under the second proviso to section 9A(5) of the Tariff Act. The appellant may, if so advised, move the Central Government for this 27 AD/52241/2022 relief and it will be for the Central Government to take a decision. It is made clear that the Tribunal has not expressed any opinion on merits on this issue.
44. Regarding the second prayer made in the application that the Central Government should submit the records/files containing reasons for not imposing anti-dumping duty, it is seen the Central Government has not taken a stand that reasons are contained in the files. In fact, the stand of the Central Government is based only on the office memorandum dated 28.10.2022 wherein the Under Secretary has informed that the Central Government, after considering the final findings of the designated authority, has decided not to accept the aforesaid recommendation. This is the only communication that has been relied upon by the learned authorized representative for the Central Government 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.
45. 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 Limited vs. Union of India and 5 others19 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.
19. Anti-Dumping Appeal No. 50461 of 2021 decided on 27.10.2021 28 AD/52241/2022
46. The Tribunal had in Jubilant Ingrevia, 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 notification dated 25.08.2020 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 being imposed, albeit as per law, if, as noticed above, the respondent were to succeed in the instant writ petition.
(ii) It is, however, made clear that the aforesaid direction will not create any equities in favour of the respondent.
(iii) Furthermore, this direction will not have an impact on the merits of the writ petition. 9. CM No.15389/2022 29 AD/52241/2022 is disposed of in the aforesaid terms. 10. List the matter on 02.03.2023."
47. A similar interim order was passed by the Delhi High Court in W.P(C) No. 6758/2022 on 05.09.2022 in the writ petition filed by the Union of India to assail the decision of the Tribunal rendered in Association of Synthetic Fibre Industry vs. Union of India and 4 others20, in which also a similar office memorandum was set aside.
48. Though the present appeal is being disposed of, but a decision has yet to be taken by the Central Government in the light of the observations made in the order. It is, therefore, considered appropriate to pass an order, as was passed by the Delhi High Court, which will remain operative till a decision is taken by the Central Government on the recommendation made by the designated authority for imposition of anti-dumping duty. The directions are as follows:
(i) The provisional assessment of imports concerning the subject goods from the subject countries will be made for the time being;
(ii) It is, however, made clear that the aforesaid direction will not create any equities in favour of the domestic industry; and
(iii) This direction will not have any impact on the decision to be taken by the Central Government pursuant to the directions issued for reconsideration of the recommendation made by the designated authority.
20. Anti-Dumping Appeal No. 51049 of 2021 decided on 01.11.2021 30 AD/52241/2022
49. Thus, for all the reasons stated above, the office memorandum 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 in the light of the observations made above at an early date but within three months. The directions contained in paragraph 48 of this order shall continue to operate till such time as a decision is taken by the Central Government. The appeal is allowed to the extent indicated above. The Miscellaneous Application also stands disposed of in terms of the observations made above. The learned authorized representative appearing for the Department shall send a copy of this order to all the concerned zones where the imports of the subject goods are likely to be made.
(Order Pronounced on 23.12.2022) (JUSTICE DILIP GUPTA) PRESIDENT (P.V. SUBBA RAO) MEMBER (TECHNICAL (RACHNA GUPTA) MEMBER (JUDICIAL) Shreya, Rekha, JB