Delhi High Court
Forech India Ltd. vs The Designated Authority & Ors. on 31 May, 2018
Equivalent citations: AIRONLINE 2018 DEL 818
Author: Najmi Waziri
Bench: S. Ravindra Bhat, Najmi Waziri
$~
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Judgment reserved on: 22.03.2018
% Judgment delivered on: 31.05.2018
+ W.P. (C) 4810/2014
FORECH INDIA LTD. ..... Petitioner
versus
THE DESIGNATED AUTHORITY & ORS. .... Respondents
+ W.P. (C) 4886/2014
KUMHO PETROCHEMICAL CO. LIMITED ..... Petitioner
versus
THE DESIGNATED AUTHORITY & ORS. ..... Respondent
+ W.P. (C) 1749/2017, CM APPL.7796/2017
KUMHO PETROCHEMICAL CO. LTD. ..... Petitioner
versus
THE DESIGNATED AUTHORITY & ORS. ..... Respondents
Advocates appeared in this case:
For the petitioners: Mr. S. Seetharaman with Mr. Ankur Sharma and Mr. Dharpan
Bhuyan, Advocates.
For the Respondents: Mr. Sandeep Sethi, Sr. Advocate with Ms. Reena Khair, Mr.
Rajesh Sharma, Ms. Rita Jha and Ms. Shreya Dahiya.
Mr. Anil Soni, CGSC with Mr. Naginder Benipal, Advocate in W.P.
(C) 4810 & 4886/2014.
Mr. Kirtiman Singh, CGSC with Mr. Prateek Dhanda and Mr. Waize
Ali Noor, Advocates for respondents in W.P.(C) 1749/2017.
WP(C) Nos. 4810/2014, 4886/2014 & 1749/2017 Page 1 of 24
CORAM:
HON'BLE MR. JUSTICE S. RAVINDRA BHAT
HON'BLE MR. JUSTICE NAJMI WAZIRI
NAJMI WAZIRI, J
1. The Government of India had imposed Anti-Dumping Duty on imports
of rubber chemicals known as PX-13 (6PPD) originating in or exported from
China PR and Korea PR for a period of five years. The levy expired on
04.05.2013. Four days prior thereto on 30.04.2018 Sunset Review proceedings
were initiated by the respondents, on a petition by the Domestic Industry,
which had contended that continuation of Anti-Dumping Duty for a further
period of five years would be necessary. As of 05.05.2013 there was no levy
of Anti-Dumping Duty in force dated 05/07/2013. After a gap of 60 days from
the date of expiry of the levy, the Central Government by Customs
Notification No. 17/2013 retrospectively revived the Anti-Dumping Duty with
effect from 05.05.2013 and extended it till 04.05.2014. The Sunset Review
concluded with the declaration of the Final Findings on 29.04.2014.
According to the petitioners, since the Final Findings were published in the
Official Gazette only on 28.07.2014, the latter date would be reckoned as its
notified date. The Anti-Dumping Duty levied during the Sunset Review period
ended on 04.05.2014. By Customs Notification no. 35/2014 dated 24.07.2014,
the Government of India re-imposed the Anti-Dumping Duty for another term
of five years. There was a gap of 80 days or a levy-free period between the
expiry of Anti-Dumping Duty which was applicable during the Sunset Review
period, and a fresh levy as a result of Final Findings. The petitioner has
challenged: i) the extension of Anti-Dumping Duty for the one year pending
WP(C) Nos. 4810/2014, 4886/2014 & 1749/2017 Page 2 of 24
the Sunset Review, as well as ii) for the five years pursuant to the Sunset
Review determination.
2. The petitioners contend that in view of the decision of this Court in
Kumho Petrochemicals Co. Ltd. vs Union of India 2014 (306) ELT 3 (Del)
the notification for extension of Anti-Dumping Duty for another year on the
conclusion of the Sunset Review, can be done within the period of five years,
the said duty cannot be extended after such expiry. The petitioner relies upon
the terms of section 9A(5) of the Customs Tariff Act, 1975 (in short, the
"Act") and Rules 18 and 23 of the Customs Tariff (Identification, Assessment
and Collection of Anti-Dumping Duty on Dumped Articles and For
Determination of Injury) Rules, 1975 (in short, the "Rules"). They contend
that India‟s commitment under the Agreement on Implementation of Article
VI of the General Agreement on Tariffs and Trade, 1994 (hereinafter referred
to an the "Implementation Agreement") is sacrosanct and domestic law i.e. the
aforesaid Act and Rules have been adopted in the light of the International
Treaty Obligation, hence, the Rules would have to be interpreted in harmony
with the Treaty language so as to give effect to the government‟s commitments
in the Treaty1. Article 11 of the aforesaid Implementation Agreement makes
provision for Duration and Review of Anti-Dumping Duties and Price
Undertakings. Article 11(4) thereof lays down the time limit for a Sunset
Review. It reads as under:
".. Any such review shall be carried out
expeditiously and shall normally be concluded within 12
months of the date of initiation of the review..."
3. Section 9A(5) of the Act reads as under:
1 Commissioner of Customs vs G.M. Exports (2016) 1 SCC 91.
WP(C) Nos. 4810/2014, 4886/2014 & 1749/2017 Page 3 of 24
" 9A. Anti-dumping duty on dumped articles.-
.. .....
... .....
5. The anti-dumping duty imposed under this section shall,
unless revoked earlier, cease to have effect on the expiry of five
years from the date of such imposition:
Provided that if the Central Government, in a review, is of the
opinion that the cessation of such duty is likely to lead to
continuation or recurrence of dumping and injury, it may, from
time to time, extend the period of such imposition for a further
period of five years and such further period shall commence
from the date of order of such extension:
Provided further that where a review initiated before the expiry
of the aforesaid period of five years has not come to a conclusion
before such expiry, the anti-dumping duty may continue to
remain in force pending the outcome of such a review for a
further period not exceeding one year... ....".
4. Section 23 of the Rules reads as under:
" 23.Review.-
(1) The designated authority shall, from time to time, review
the need for the continued imposition of the anti-dumping
duty and shall, if it is satisfied on the basis of information
received by it that there is no justification for the continued
imposition of such duty recommend to the Central
Government for its withdrawal.
(2) Any review initiated under sub-rule (1) shall be concluded
within a period not exceeding twelve months from the date
of initiation of such review.
(3) The provisions of rules 6, 7, 8, 9, 10, 11, 16, 17, 18, 19, and
20 shall be mutatis mutandis applicable in the case of
review....."
5. What is to be seen from the above is that a Sunset Review has to be
concluded within one year from the date of its initiation. Under second proviso
of section 9A(5) of the Act, the levy of Anti-Dumping Duty can be allowed to
WP(C) Nos. 4810/2014, 4886/2014 & 1749/2017 Page 4 of 24
continue to remain in force for a period not exceeding one year, pending the
outcome of the Sunset Review. The petitioners contend that on the outer limit,
the Anti-Dumping Duty can be for a period of six years i.e. the original five
years plus one more year, provided the Sunset Review is initiated during the
period of initial five years and the extension in the sixth year is made prior to
the expiry of the five years levy. The petitioners relied upon Kumho
Petrochemicals (supra) which inter alia, held:
"....24. This court holds that the petitioners' submission
that a notification under Section 9A (1) issued after review is in
the nature of temporary legislation, is merited. A statute is
ordinarily perpetual, in the sense that no time is fixed for its
duration. In that sense Section 9A is perpetual. However, that
provision is merely enabling; it authorizes a levy of anti-
dumping duty upon proof of injury, and upon fulfilment of other
conditions. Once notified, the levy has effect - in terms of the
notification and Section 9A (5) for five years. That levy is
consequently, temporary as the duration is finite. In these
circumstances, Section 6 of the General Clauses Act, which
provides that notifications, bye-laws etc. validly made under a
repealed law can continue to be in force, would have no
application. This position was clarified by the Supreme Court
in District Mining Officer and others v. Tata Iron and Steel Co.
& Anr. AIR 2001 SC 3134, where the question as to what is a
"temporary statute", was examined and it was observed that:
"19...... A Statute can be said to be either perpetual or
temporary. It is perpetual when no time is fixed for its duration
and such a statute remains in force until its repeal which may be
express or implied. But a Statute is temporary when its duration
is only for a specified time and such a Statute expires on the
expiry of the specified time, unless it is repealed earlier
.....Admittedly, to a temporary Statute, the provisions of Section
6 of the General Clauses Act, 1897 will have no application .....A
temporary Statute even in the absence of a saving provision
like Section 6 of the General Clauses Act may not be construed
dead for all purposes and the effect of expiry is essentially one of
WP(C) Nos. 4810/2014, 4886/2014 & 1749/2017 Page 5 of 24
the construction of the Act....."
25. In the light of the above position, this Court holds that
what follows is that the levy of anti-dumping duty ended on 01-
01-2014, with the lapse of the original notification. The second
proviso to Section 9A (5) precluded the Central Government
from continuing the levy beyond that period or date, except to
the extent its conditions were fulfilled, i.e. if the levy of the duty
were to have been notified before such date. In such cases, the
power under the second proviso to Section 9A(5), after expiry of
the date of the original notification, is unavailable. The
notification in the present case states that:
"3. Notwithstanding anything contained in
paragraph 2, this notification shall remain in force
upto and inclusive of the 1st day of January, 2015,
with respect to anti-dumping duty on Acrylonitrile
Butadiene Rubber originating in, or exported from
Korea RP, unless revoked earlier".
Neither does Section 9A (1) nor Section 9A (5) permit the
extension of anti-dumping duty once the main period of five
years lapses, as held earlier. The Central Government is not
arguing that it had the benefit of Section 21 of the General
Clauses Act- for the simple reason that extension or amendment
of an earlier notification can be only after following the
procedure adopted while issuing the main notification. In the
present case, the amendment is retrospective, as it were, and
made effective from 2009. It was in fact made after the lapse of
the first period...".
6. The petitioners argue that Customs Notification No. 17/2013 purporting
to extend the levy of Anti-Dumping Duty retrospectively from 05.05.2013 to
04.05.2014 is without any authority of law because such a levy could have
been made only till 04.05.2013 i.e. there should have been a continuity of the
duty for it to be extended. Once the original levy expired on 05.05.2013, it
could not be revived and extended retrospectively. The parent notification was
Notification no. 133/08 - Customs dated 12.12.2008. Para 2 of the said
WP(C) Nos. 4810/2014, 4886/2014 & 1749/2017 Page 6 of 24
Notification fixed the date of its expiry by specifying the date from which
Anti-Dumping Duty came into force. The relevant part reads as follows:
"... The anti-dumping duty imposed under this notification
shall be levied with effect from the date of imposition of the
provisional antidumping duty, that is, the 5th May, 2008, and
shall be payable in Indian currency..."
7. The precise date of expiry of the duty was further re-affirmed by
Customs Notification No. 92/2011 dated 20.09.2011, which was issued after
conclusion of the Mid-Term Review. The said notification inter alia, reads:
"... The anti-dumping duty imposed under this notification
shall be effective from the date of publication of this
notification in the Official Gazette and up to and inclusive of
4th May, 2013 and will be paid in Indian currency..."
8. Therefore, on 5th May 2013 when there was no Anti-Dumping Duty,
there was nothing to extend under section 9A(5) of the Act. The purported
exercise of extension of duty under section 9A(5) of the Act was a hollow
exercise. A duty cannot be extended when none existed on the date of
extension. The duty purported to be extended had already died in law and the
dead levy could not be revived by the impugned Notification no. 17/2013. In
support of this contention, the petitioners have relied upon the following
judgments for the proposition that, an extension can be granted only before the
expiry of the term of an existing right, authority or levy.
(i) Babu Verghese & Ors. vs Bar Council of Kerala & Ors. AIR 1999 SC
1281;
(ii) Nippon Steel Corporation vs Union of India (2011) 46 PTC 122 (Del);
(iii) Tarsem Kumar vs Collector of Central Excise, Chandigarh AIR 1972
P&H 444;
WP(C) Nos. 4810/2014, 4886/2014 & 1749/2017 Page 7 of 24
(iv) Vazir Glass Works vs. Maharashtra General Kamgar Union & Ors. AIR
1996 SC 1282; and
(v) Ambalikarthikeyan vs Collector of Customs & Central Excise 2000 (125)
ELT 50, which held:
".... No question of extension of time can arise after the
time has expired. When the time expires, the person from
whose possession the goods were seized, gets the right for the
return of the goods. The extension can only be before that
right accrues..."
9. In view of the aforesaid, it is argued that the Customs Notification No.
17/2013 should be treated as non-est, in the face of the record, and should be
set aside because it sought to extend a duty which did not exist in the first
place and otherwise sought to revive one, which is not permissible under
section 9A(5) of the Act. The petitioners relied upon the judgment in Nazir
Ahmed vs King Emperor AIR 1936 PC 253, where the Privy Council held
that: "where a power is given to do a certain thing in a certain way, the thing
must be done in that way or not at all". It is argued that once the levy of duty
under Notification no. 17/2013 becomes non-est, the subsequent levy,
purportedly imposed after 80 days of completion of the Sunset Review period,
too would be without any authority of law, since that too did not have the
continuity between the original levy with the extended levy under the Sunset
Review and the purported further levy for five years in terms of the Final
Findings in the Sunset Review.
10. The respondents have argued that the petition for Sunset Review was
filed in January, 2013 with the Period of Investigation (POI) being October,
2011 till September, 2012. Subsequently on 09.04.2013, the applicant had
filed revised application with POI as January, 2012 to December, 2012.
WP(C) Nos. 4810/2014, 4886/2014 & 1749/2017 Page 8 of 24
Nevertheless, this was deemed to be filed within time. The Final Findings
held that only the updated petition i.e. seeking a change in the POI was filed
later. It was argued that if the petition is received within less than three
months time, before date of expiry of the duty, the decision whether to
consider the same lies with respondent no.1 i.e. the Designated Authority. It
is for him to take a decision as to whether or not to entertain such a petition. It
is contended that sometimes when the "investigating team" of the DGAD is
unable to examine the petition, or the petition may not contain all the
necessary information required for the initiation of the Sunset Review or it
may require supplementary or additional information to decide the merits of
the case, and the Domestic Industry is given opportunity to respond to such
requirements. It is argued that, the officers handling the case, typically handle
a number of other assignments simultaneously, therefore, they may not be able
to immediately attend to an application from the Domestic Industry. Thus, the
three months time has been prescribed while taking in consideration all such
exigencies. It is contended that the petition was received within the prescribed
time, after the required updates and the Designated Authority accepted the
petition, and after analysing the information, he came to the conclusion that a
case was made out for initiation of a Sunset Review. Hence, the time went
beyond the time limit fixed in the Trade Notice but the Designated Authority
has the discretion to allow it. It is further argued that neither the Act nor the
Rules have provided the three months time period as condition precedent for
initiation of Sunset Review initiation.
11. The Petitioners contend that before a decision to extend the Anti-
Dumping Duty, the Government of India is required to undertake an elaborate
investigation and at least come to a prima facie view on the basis of
WP(C) Nos. 4810/2014, 4886/2014 & 1749/2017 Page 9 of 24
information furnished in the Sunset Review application that such extension is a
matter of course but it is not a matter of right for the Domestic Industry, to be
extended such protection. Rule 23(1B) requires the Designated Authority to
consider the petition received for review and extension of Anti-Dumping Duty
within a reasonable period of time prior to the expiry of that period. It is
argued that such a reasonable period is for consideration of the application and
process the same for the Sunset Review. The period has been prescribed
through Trade Notice No. 2/2011 dated 06.06.2011 which stipulates that the
Sunset Review should be filed 90 days prior to the date of expiry of the Anti-
Dumping Duty. It is argued that the Domestic Industry had sought initiation
of Sunset Review in January 2013 with POI of October, 2011 to September,
2012. Subsequently, on 09.04.2013 the applicant had filed a revised
application with POI as January, 2012 to December, 2012; therefore, the
respondent no.1 felt that the application was filed within 90 days before expiry
of the Anti-Dumping Duty on 04.05.2013.
12. The respondents refer to their own decisions in which the 90 day period
was diluted; such as the case of "duplicate iron pipes" and "pre-sensitised
offset printing plates". It contends that:
"...... The trade notice merely informs the parties
concerned, that it is reasonable if the petition is filed 3
months period to the expiry. It does not mean that if the
petition is filed with less than three months, the Respondent
no.1 would be duty bound to reject such petition merely on
grounds of delay. Therefore, in this regard in the present
case, dumping from Korea continues in much bigger
proportion. Further, the domestic industry is suffering
significant material injury. Therefore, the domestic industry
in any case could have filed a fresh petition. The injury
being suffered by the domestic industry is considered
sympathetically, as against the time limits prescribed under
WP(C) Nos. 4810/2014, 4886/2014 & 1749/2017 Page 10 of 24
the rules. Should the present petition be rejected on such
procedural grounds, the injury to the domestic industry
would aggravate and therefore rejection of the present
petition on procedural grounds would defeat the very
purpose for which anti dumping law has been enacted
containing legal provisions for extension of anti dumping
duty in order to protect the domestic industry..."
13. The import of the aforesaid statement in the counter affidavit filed by
respondent no.1 is that it tries to bring in elements for disregarding the
Government‟s own Trade Notice No. 2/2011 which had fixed a specific time
limit for filing a Sunset Review petition. The aforesaid reasons for taking a
lenient view with respect to the Domestic Industry are not envisaged in the
Trade Notice and cannot be read as a part of the latter. Special concession or
sympathetic consideration for the Domestic Industry for any party, by an
adjudicating authority cold lend to suspicion of bias. Sympathy is an abysmal
pit in adjudicatory proceedings, cannot become the basis for decision making.
Sympathy is like an „abysmal pit‟ in adjudicatory proceedings; it cannot be a
permissible basis for decision making. For aforesaid process to be perceived to
be as a fair process leading to the decision must appear to be transparent.
Wherever discretionary power exists in an authority, it must be exercised
judiciously and must be based on cogent reasons.
14. If the strict timelines specified in the Statute or in the respondents‟
Trade Notice is to be tinkered with or is stretchable, then the sympathetic,
accommodative and lenient view would also be accepted by all parties
including the exporters. Leniency and sympathy of this nature would lend to
chaos and the mockery of the requirement to adhere to the timelines, which is
an overriding feature of the Anti-Dumping Duty regime. The Sunset Review
is not simply an application by the Domestic Industry seeking continuance of
WP(C) Nos. 4810/2014, 4886/2014 & 1749/2017 Page 11 of 24
the levy for a further period of five years. It is a petition to be supported by
corroborative data showing the dynamics of trade of the product concerned
vis-à-vis, local production, imports of goods, demand, supply, size of the
industry, its projected growth, profitability, injury etc, to prove that the
continuance of the Anti-Dumping Duty would be necessary. Such application,
complete in all respects is to be filed at least 90 days before the expiry of the
levy. The 90 days are meant basically for the Designated Authority to assess
the data, to conclude and form a prima facie view as to whether continuance of
the duty would be necessary. If such an opinion is formed, and the Sunset
Review is initiated, then the duty is extendable for another period of only 12
months from the date on which the Anti-Dumping Duty is scheduled to come
to an end. The Sunset Review is an extensive exercise seeking data from all
parties concerned and verification of the same and grant of hearing to the
parties, publication of final findings, etc. It is in this regard that the timeline
of 90 days in terms of Trade Notice would have to be strictly adhered to unless
otherwise modified. It does not provide any leeway to the Designated
Authority to extend the three month period.
15. The application of the Domestic Industry, filed in January, 2013 (oddly
the date is not specified) fixing the Period of Investigation (POI) from
October, 2011 to September, 2012, is the starting point of any complaint. It is
the data collected for this period, that is worked upon to show that the
Domestic Industry continued to be injured by the dumped imported goods or it
posed a threat of injury, if the Anti-Dumping Duty was not continued. The
Domestic Industry had thought it fit to base its case on the data relating to this
period. But in the amended petition dated 09.04.2013, the entire basis of its
application had been recast. The POI was changed from January 2012 to
WP(C) Nos. 4810/2014, 4886/2014 & 1749/2017 Page 12 of 24
December, 2012. In effect, it was a new application. Such a change would be
only on two grounds: (i) either the original application lacked substance; or (ii)
it was replete with such errors that it could not be entertained for initiation of a
Sunset Review. If the Domestic Industry was confident of its case for
initiation of a Review on the basis of the data for the period October, 2011 to
September, 2017, it would not have changed the POI unless an impression was
given to it that its petition made out no case for initiation of Review. That
being the position, it would mean that the Designated Authority did not form a
prima facie view that Anti-Dumping Duty needed to be extended for another
year from the expiry of the first five year period. If the entire basis of
calculation was changed on 09.04.2013, it would be in effect a new application
and could not be treated as an application in terms of Trade Notice. It cannot
be the case that the Domestic Industry be permitted to trawl and process data
for the previous period of levy and keep revising its petition till it is sure that
the petition meets the approval of the Designated Authority. The data first filed
should be with confidence and change of this substratum, if any, should be
filed only within the time specified in the Trade Notice. Hence, for this reason
itself, it ought to have been rejected and there could be no initiation of the
Sunset Review.
16. The questions that arise for determination are: (i) whether with the
initiation of Sunset Review before expiry of the five year levy, there is an
automatic extension of Anti-Dumping Duty for the Sunset Review period; (ii)
would a separate notification be required extending the levy of Anti-Dumping
Duty before expiry of the original five year period, and iii) would a
notification of levy of anti-dumping duty for another five years after the expiry
of the Sunset-Review Period be valid?
WP(C) Nos. 4810/2014, 4886/2014 & 1749/2017 Page 13 of 24
17. Trade Notice 2/2011 issued by the respondents reads as under:
"..... Trade Notice No.2/2011
1. Attention of the Trade and Industry is invited to
Section 9A of the Customs Tariff Act, 1975 as amended and
to Rule 23 of the Customs Tariff (Identification, Assessment
and Collection of Anti-Dumping Duty on Dumped Articles
and for Determination of Injury) Rules, 1995 framed
thereunder, as amended.
2. In the above connection, it is informed that vide
Notification No. 15/2011-Customs (N.T) dated 1st March,
2011 read with the corrigendum dated 6th April, 2011 the
sub-rule (1) of Rule 23 has been substituted by the
following:-
(I) Any anti-dumping duty imposed under the
provision of section 9A of the Act, shall remain in
force, so long as and to the extent necessary, to
counteract dumping, which is causing injury.
(IA) The designated authority shall review the need
for the continued imposition of any anti-dumping
duty, where warranted, on its own initiative or upon
request by any interested party who submits positive
information substantiating the need for such review,
and a reasonable period of time has elapsed since the
imposition of the definitive anti-dumping duty and
upon such review, the designated authority shall
recommend to the Central Government for its
withdrawal, where it comes to a conclusion that the
injury to the domestic industry is not likely to
continue or recur, if the said anti-dumping duty is
removed or varied and is therefore no longer
warranted.
(IB) Notwithstanding anything contained in sub-rule
(I) or (IA), any definitive anti-dumping duty levied
under the Act, shall be effective for a period not
exceeding five years from the date of its imposition,
unless the designated authority comes to a
WP(C) Nos. 4810/2014, 4886/2014 & 1749/2017 Page 14 of 24
conclusion, on a review initiated before that period
on its own initiative or upon a duly substantiated
request made by or on behalf of the domestic industry
within a reasonable period of time prior to the expiry
of that period, that the expiry of the said anti-
dumping duty is likely to lead to continuation or
recurrence of dumping and injury to the domestic
industry.
3. It has been decided that reasonable period of time for the
purpose of sub-rule 23(IB) shall be 90 days prior to the
date of expiry of the anti-dumping duty.
4. In view of the above, all previous instructions and Trade
Notices issued by the Directorate with regard to SSR stand
superseded...."
18. In other words, the Government itself was desirable that the Sunset
Review exercise should be completed before the expiry of the first five year
levy and in any case, the extension of levy should be completed within one
year after the first five years as required under the duty regime. It requires the
Domestic Industry to file the Sunset Review petition before the expiry of the
period for which the Anti-Dumping Duty is in existence. No such application
is to be entertained by the Designated Authority if it is filed in less than 90
days of expiry of the levy. The Designated Authority enjoins upon itself the
timelines for examining the petition to check its deficiencies and errors, and
also accord reasonable time within which time the errors can be cured. Upon
receipt of the application, it is to be examined in 15 days and deficiencies, if
any, are to be removed in five working days from date of such communication
to the applicant. If, the petition is found in order, the Sunset Review initiation
or its rejection is to be communicated within 45 days. It is only in cases of
administrative exigencies, and not because of compulsions of the petitioners or
any other party, that the timelines can be stretched. In the present case, the
WP(C) Nos. 4810/2014, 4886/2014 & 1749/2017 Page 15 of 24
application was effectively filed on 09.04.2013 about 28 days before expiry of
the Anti-Dumping Duty. The same could not have been entertained. It is not
as if the Sunset Review was initiated by the Designated Authority on his own
initiative. If that were so, then the 90 days duration would not strictly apply.
But since it was on a petition by the Domestic Industry, there could be no
concession in the timelines, least of all a sympathetic concession. The reasons
and the grounds for sympathetic consideration staked in the respondents‟
affidavit cannot be a ground for extension of the time schedules, in the realm
of international trade regime. The transparency that envisaged the statute must
be respected. The Act, the Rules and the Implementing Agreement sanction a
legal regime for protective measures but not for protectionism.
19. The Supreme Court by judgment dated 09.06.2017 in Union of India &
Anr. vs Kumho Petrochemicals (Civil Appeal Nos. 8309-9310/2017) held:
"...... 30) From the scheme of Section 9A of the Act, it
becomes clear that 12 (1999) 3 SCC 422 13 (1971) 2 SCC 54
though the Notification for anti-dumping duty is valid for a
maximum period of five years, the said period can be extended
further with the issuance of fresh notification. For this
purpose, it is necessary to initiate the review exercise before
the expiry of the original notification, which review is
commonly known as „sunset review‟. There may be situations
where the sunset review is undertaken but the review exercise
is not complete before the expiry of the period of original
notification. It is because of the reason that the exercise of
sunset review also demands complete procedure to be
followed, in consonance with the principles of natural justice
that was followed while imposing the anti-dumping duty in the
first instance. To put it otherwise, this exercise contemplates
hearing the views of all stakeholders by giving them adequate
opportunity in this behalf and thereafter arriving at a
conclusion that the continuation of the anti-dumping duty is
WP(C) Nos. 4810/2014, 4886/2014 & 1749/2017 Page 16 of 24
justified, otherwise injury to the domestic industry is likely to
continue or reoccur, if the said anti-dumping duty is removed
or varied. Since this exercise is likely to take some time and
may go beyond the period stipulated in the original
notification imposing anti-dumping duty, in order to ensure
that there is no vacuum in the interregnum, second proviso to
sub-section (5) of Section 9A of the Act empowers the Central
Government to continue the anti-dumping duty for a further
period not exceeding one year, pending the outcome of such a
review. The question, however, is as to whether this extension
to fill the void that may be created during the pendency of the
sunset review is exercised is automatic, once the decision is
taken to have sunset review of the anti-dumping duty or the
continuation of such an anti-dumping duty has to be by a
proper notification. As noted above, the High Court has held
that second proviso is only an enabling provision and,
therefore, power vested in the Central Government under the
said proviso has to be specifically exercised, without which
the anti-dumping duty cannot continue to remain in force with
the lapse of original notification.
31) After giving due consideration to the arguments advanced
by the learned counsel for the parties, we are inclined to agree
with the High Court that proviso to sub-section (5) of Section
9A of the Act is an enabling provision. That is very clear from
the language of the said provision itself. Sub-section (5) of
Section 9A gives maximum life of five years to the imposition
of anti-dumping duty by issuing a particular notification. Of
course, this can be extended by issuing fresh notification.
However, the words „unless revoked earlier‟ in sub-section (5)
clearly indicate that the period of five years can be curtailed
by revoking the imposition of anti-dumping duty earlier. Of
course, provision for review is there, as mentioned above, and
the Central Government may extend the period if after
undertaking the review it forms an opinion that continuation
of such an anti-dumping duty is necessary in public interest.
When such a notification is issued after review, period of
imposition gets extended by another five years. That is the
effect of first proviso to sub-section (5) of Section 9A.
WP(C) Nos. 4810/2014, 4886/2014 & 1749/2017 Page 17 of 24
However, what we intend to emphasise here is that even as per
sub-section (5) it is not necessary that in all cases anti-
dumping duty shall be imposed for a full period of five years
as it can be revoked earlier. Likewise, when a review is
initiated but final conclusion is not arrived at and the period
of five years stipulated in the original notification expires in
the meantime, as per second proviso „the anti-dumping duty
may continue to remain in force‟. However, it cannot be said
that the duty would automatically get continued after the
expiry of five years simply because review exercise is initiated
before the expiry of the aforesaid period. It cannot be denied,
which was not even disputed before us, that issuance of a
notification is necessary for extending the period of anti-
dumping duty. Reason is simple. There no duty or tax can be
imposed without the authority of „law‟. Here, such a law has
to be in the form of an appropriate notification and in the
absence thereof the duty, which is in the form of a tax, cannot
be extracted as, otherwise, it would violate the provisions of
Article 265 of the Constitution of India. As a fortiorari, it
becomes apparent that the Government is to exercise its power
to issue a requisite notification. In this hue, the expression
„may‟ in the second proviso to sub-section (5) has to be read
as enabling power which gives discretion to the Central
Government to determine as to whether to exercise such a
power or not. It, thus, becomes an enabling provision.
32) We are conscious of the fact that once sunset review is
initiated, such initiation takes place only after a substantiated
application/request is filed by the indigenous industry which is
examined and a prima facie view is formed by the Central
Government to the effect that such a review is necessitated as
withdrawal of anti-dumping duty or cessation thereof may be
prejudicial to the indigenous industry. Once such an opinion
is formed and the sunset review is initiated, in all likelihood
the Central Government would make use of second proviso
and issue notification for continuing the said anti-dumping
duty. At the same time, it cannot be said that without any overt
act on the part of the Central Government, there is an
automatic continuation. The learned counsel for respondent
WP(C) Nos. 4810/2014, 4886/2014 & 1749/2017 Page 18 of 24
rightfully pointed out that the legislature has consciously used
the expression „may‟ and „shall‟ at different places in the
same Section, i.e. Section 9A of the Act. In such a scenario, it
has to be presumed that different expressions were
consciously chosen by the Legislature to be used, and it
clearly understood the implications thereof, therefore, when
the word „may‟ is used in the same Section in
contradistinction to the word „shall‟ at other places in that
very Section, it is difficult to interpret the word „may‟ as
„shall‟. Therefore, it is difficult to read the word „may‟ as
„shall‟. Our conclusion gets strengthened when we keep in
mind following additional factors:
33) The anti-dumping duty may continue, pending the outcome
of the review, for a further period not exceeding one year.
Thus, maximum period of one year is prescribed for this
purpose which implies that the period can be lesser as well.
The Government is, thus, to necessarily form an opinion as to
for how much period it wants to continue the anti-dumping
duty pending outcome of such a review. Moreover, since the
maximum period is one year, if the review exercise is not
completed within one year, the effect of that would be that
after the lapse of one year there would not be any anti-
dumping duty even if the review is pending. In that eventuality,
it is only after the review exercise is complete and the Central
Government forms the opinion that the cessation of such a
duty is likely to lead to continuation or recurrence of dumping
and injury, it would issue a notification extending the period
of imposition of duty. Therefore, there may be a situation
where even when the power is exercised under second proviso
and duty period extended by full one year, the review exercise
could not be completed within that period. In that situation,
vacuum shall still be created in the interregnum beyond the
period of one year and till the review exercise is complete and
fresh notification is issued. This situation belies the argument
that extension under second proviso is to be treated as
automatic to avoid the hiatus or vacuum in between....
......
WP(C) Nos. 4810/2014, 4886/2014 & 1749/2017 Page 19 of 24
39) India is a signatory to the Marrakesh Agreement
establishing the World Trade Organization in 1994. Pursuant
to this, it has implemented the Agreement on Implementation
of Article VI of the GATT 1994 referred to as the Anti-
dumping Agreement (ADA), which is one of the Agreements
that forms part of the WTO treaty. In terms of Article 18.4 of
the ADA, each Member country is required to ensure the
conformity of its laws, regulations and administrative
procedures with the provisions of the ADA. As a consequence,
Sections 9A, Section 9AA, Section 9B and Section 9C of the
Act were enacted.
40) Two things which follow from the reading of the Section
9A(5) of the Act are that not only the continuation of duty is
not automatic, such a duty during the period of review has to
be imposed before the expiry of the period of five years, which
is the life of the Notification imposing anti-dumping duty.
Even otherwise, Notification dated January 23, 2014 amends
the earlier Notification dated January 02, 2009, which is clear
from its language, and has been reproduced above. However,
when Notification dated January 02, 2009 itself had lapsed on
the expiry of five years, i.e. on January 01, 2014, and was not
in existence on January 23, 2014 question of amending a non-
existing Notification does not arise at all. As a sequitur,
amendment was to be carried out during the lifetime of the
Notification dated January 02, 2009. The High Court, thus,
rightly remarked that Notification dated January 02, 2009 was
in the nature of temporary legislation and could not be
amended after it lapsed......"
20. Applying the said principle to the facts of the present case, it is seen that
the Notification no. 17/2013 issued 60 days after the expiry of the levy of
Anti-Dumping Duty under the first five year period, would be non-est because
it sought to extend a levy which had lapsed on 04.05.2013. The second
proviso to section 9A(5) of the Act is an enabling provision granting the
Central Government the authority to continue Anti-Dumping Duty pending the
outcome of the Sunset Review for a further period not exceeding one year.
WP(C) Nos. 4810/2014, 4886/2014 & 1749/2017 Page 20 of 24
The essential requirements for such continuation are: (i) the Sunset Review
ought to have been initiated before the expiry of the five year period of levy of
Anti-Dumping Duty; (ii) the inquiry has not concluded within the said period;
(iii) a prima facie view is formed by the Government that continuance of the
Anti-Dumping Duty would be necessary, and (iv) such extended period would
not exceed one year from the date on which the first five years expires. The
phrase "may continue to remain in force", assumes that there is a levy which
exists and its continuance i.e. its carrying forward - without a break in its
existence, is necessary. The moment the levy comes to an end or there is a
break in its continuance, it cannot be revived in the Sunset Review exercise.
Extending the levy is like stretching the fabric of the levy to cover the
extended period for another year. In the present case, the original levy came to
an end on 04.05.2013. The levy had a limited life and unless fresh life was
infused in it before its predetermined expiry date, it could not be deemed to
have been extended. Infusion of fresh life into the levy for a period of one
year requires a fresh notification, in addition to the notification for initiation of
the Sunset Review. That not being so, in the present case the levy under
impugned Notification is without authority, hence it has to be and is set aside.
21. Likewise the second notification imposing Anti-Dumping Duty for a
period of five years too cannot be sustained because it has to be issued within
the period of first five years or in the extended one year period of Sunset
Review in which the earlier existing duty has been extended. The first proviso
of section 9A(5) of the Act stipulates that in a Sunset Review when the Central
Government is of the opinion that cessation of such duty is likely to lead to
continuation or recurrence of dumping or injury, it may extend the period of
levy for a further period of five years. The degree of levy would be to the
WP(C) Nos. 4810/2014, 4886/2014 & 1749/2017 Page 21 of 24
extent necessary to offset the injury. In other words, there would have to be a
duty in existence for it to be extended. In the present case there was cessation
of duty on 05.05.2013 and again on 05.05.2014, therefore, there was no duty
on two dates which could have been extended.
22. The protective regime of Anti-Dumping Duty is to provide a level
playing field to the Domestic Industry from the injurious effects of dumped
goods upon the Domestic Industry. Such protection is to be continued till such
time that the Government deems it necessary (by assessing data every five
years or in a Mid-Term Review) for enabling the Domestic Industry to
compete against unfair international trade practices. The moment the
protection comes to an end or is allowed to lapse, the hitherto protected
Domestic Industry is exposed to the dynamic forces and full impact of
unrestrained international trade. The nature and extent of the injury from
dumped goods to the Domestic Industry, would be different and indeed to a
greater degree in an unprotected regime vis-à-vis a regime of Anti-Dumping
Duty levy. Such levy is imposed to the extent that it offsets the injury. The
assessment in a Sunset Review of a market condition is under a protected
regime. The moment the protection ends and free trade is permissible, the
impact of free trade and the injury to the Domestic Industry would be of a
different degree. There was cessation of levy for 60 days from 05.05.2013 and
for 80 days from 05.05.2014. The Domestic Industry would subsequently
have been subjected to the world of unhindered international trade without
protection. Therefore, the nature of injury suffered in this period would have
to be assessed for the correct levy of Anti-Dumping Duty. The assessment of
injury in the protected environment of Sunset Review would not reflect true
nature of injury as may have been suffered by the Domestic Industry when the
WP(C) Nos. 4810/2014, 4886/2014 & 1749/2017 Page 22 of 24
regime of levy was non-existent for 60 days and 80 days as mentioned above.
Assuming that the injury assessed during the protected regime was of a lesser
degree, a corresponding lesser percentage of duty would be imposed on the
import of dumped goods. This levy, ostensibly a protection to the Domestic
Industry, would not do justice to the Domestic Industry. Instead it would continue
to insidiously injure and harm the Domestic Industry for a period of five years;
This would be more disruptive to fair trade instead of being an ameliorative and
corrective measure. For the unprotected period of 60 days and 80 days a fresh
exercise may be warranted to assess the extent of injury to the Domestic Industry.
In view of the aforesaid cessation of duty for two long phases, there could be no
imposition of Anti-Dumping Duty for a further period of five years under the first
proviso of Section 9A(5) of the Act.
23. The respondents argue that there is no delay in the Customs Notification
No. 35/2014 dated 24.07.2014 as it was notified within the three months period
provided under Rule 18A(1) of the Rules. The Court would note that under Rule
18A(1), the Central Government may within three months from the date of
publication of the Final Findings impose Anti- Dumping Duty by Notification in
the Official Gazette, however, this three month period is not a stand-alone
authorization to the Government. It has to be harmoniously read with the strict
timeline fixed in the statute under section 9A(5) of the Act. The Act embodies
the commitment of the Government of India under Article 11(4) of the
Implementation Agreement. The Rule cannot override the Act. The Act has
fixed a period for completion of Sunset Review within one year from the date of
expiry of the initial five year levy and it is in this one year period that the
Government must form a view that the cessation of duty would lead to
continuation or recurrence of dumping and injury. Therefore, it is only within this
period that it may extend i.e. without breaking the continuity of the
WP(C) Nos. 4810/2014, 4886/2014 & 1749/2017 Page 23 of 24
previous duty or its modified version, for a further period of five years. The
thread of the existing duty has to continue from the initial five year levy to the
one year extended period of Sunset Review to the proposed five year period.
There should be no break in between. However, in the present case, there are
two breaks. Therefore, Rule 18(1) does not and cannot be read to lend any
authority or power to the Central Government to issue Customs Notification
No. 35/2014. It is illegal and, accordingly, set aside. The period of three
months under Rule 18(1) can be read only in the case of original notification
for Anti-Dumping Duty and not for the Sunset Review.
24. In view of the above, the petitions are allowed. Accordingly, Initiation
Notification No. 15/1/2013 dated 30.04.2013, Final Finding dated 29.04.2013
and the Customs Notification Nos. 17/2013 and 35/2014 issued on 05.07.2013
and 24.07.2014 are set aside.
NAJMI WAZIRI, J.
S. RAVINDRA BHAT, J May 31, 2018 kk WP(C) Nos. 4810/2014, 4886/2014 & 1749/2017 Page 24 of 24