Custom, Excise & Service Tax Tribunal
Indian Steel Association vs -Designated Authority Directorate ... on 20 December, 2022
Author: Dilip Gupta
Bench: Dilip Gupta
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
NEW DELHI
PRINCIPAL BENCH
ANTI DUMPING APPEAL NO. 51196 OF 2022
(Arising out of Office Memorandum vide F. No. CBIC-190354/59/2021-TO(TRU-I)-
CBEC dated 05.01.2022, Government of India, Ministry of Finance, Department of
Revenue, Tax Research Unit)
Indian Steel Association .....Appellant
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, New Delhi-110 001
3. Steel Authority of India Limited
17th Floor, Scope Minar, Laxmi Nagar
Distt. Centre, Delhi-110092
4. JSW Steel Limited
Regd. Office: JSW Centre,
Bandra Kurla Complex, Bandra (East).
Mumbai - 400 051
5. JSW Steel Coated Product Limited
Regd. Office: JSW Centre,
Bandra Kurla Complex, Bandra (East)
Mumbai 400 051
6. Arcelor Mittal Nippon Steel India Limited
2nd Floor, Birla Centurion,
Century mms Compound Pandurang Budhkar
Marg, worn. Mumbai 400030
Maharashtra
7. Tata Steel Limited
Regd. Office Bombay House 24 Homi
Mody Street Mumbai 400 001
8. Tata Steel BSL Limited
Regd Office: Ground Floor Mira
Corporate Suites Plot No. 1 & 2
Mathura Road Ishwar Nagar
New Delhi-110065
9. Embassy of China PR
50-D, Shantipath, Chanakyapuri,
New Delhi, Delhi-110021
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AD/51196/2022
10. Embassy of Ukraine
C6/5, Block C, Vasant Vihar,
New Delhi, Delhi 110057
11. Embassy of Japan
Plot No. 4 & 5, Shantipath,
Chanakyapuri, New Delhi, Delhi 110021
12. Embassy of Korea RP
9, Chandragupta Marg,
Chanakyapuri Extension, Chanakyapuri,
New Delhi, Delhi 110021
13. Japan Iron and Steel Federation
3-2-10, Nihonbashi-Kayabacho,
Chuo-Ku, Tokyo 103-0025, Japan
14. Nippon Steel Corporation
6-1, Marunouchi 2-Chome, Chiyoda-Ku,
Tokyo 100-8071, Japan
15. JFE Steel Corporation
2-2-3 Uchisaiwaicho, Chiyoda-Ku,
Tokyo, Japan
16. Kobe Steel Ltd.
Address of Head Office: 9-12,
Kita-Shinagawa 5-Chome,
Shinagawa-Ku, Tokyo
141-8688 Japan
17. Honda Trading Corporation
Akihabara UDX South Wing 18F,
4-14-1 Sotokanda, Chiyoda-Ku,
Tokyo 101-8622, Japan
18. Kanematsu Corporation
2-1, Shibaura 1-chome, Minato-ku,
Tokyo 105-8005, Japan
19. Marubeni-Itochu Steel Inc.
Nihonbashi 1-chome Bldg., 4-1
Nihonbashi 1-chome, Chuo-ku,
Tokyo, 103-8247,
Japan
20. Metal One Corporation
JP Tower, 7-2, Marunouchi
2-chome, Chiyoda-ku, Tokyo
100-7032, Japan
21. Nippon Steel Trading Corporation
Nittetsu Bussan Bldg., 5-27, Akasaka
8-chome, Minato-ku, Tokyo,
107-8527, Japan
22. Sumitomo Corporation Global Metals Co. Ltd.
Otemachi Place East Tower,
3-2 Otemachi 2-chome, Chiyoda-ku,
Tokyo 100-8601, Japan
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AD/51196/2022
23. Tetsusho Kayaba Corporation
Registered Office: 7-24-17 Matsue,
Edogawa-ku, Tokyo 132-0025, Japan
24. Toyota Tsusho Corporation
2-3-13, Konan, Minato-ku,
Tokyo, 108-8208, Japan
25. JFE Shoji Corporation
Otemachi Financial City North
Tower, 9-5, Otemachi 1-Chome,
Chiyoda-ku, Tokyo 100-8070, Japan
26. Ohmi Industries Limited
3-11-10 Minamisemba, Chuo-ku, Osaka, Japan
27. Young Steel Co. Ltd.
4FL, 301 Shimbashi BLDG 3-1-9, Shinbashi,
Minato-Ku, Tokyo, Japan
28. Nissan Trading Co. Ltd.
91-1 Kawakami-cho, Totsuka-ku,
Yokohama, Kanagawa 244-0805, Japan
29. Rajasthan Prime Steel Processing
Centre Pvt. Ltd.
SPL-1(A), Tapukara Industrial Area,
Khushkhera, Distt-Alwar, Rajasthan 301707
30. Metal One Corporation India Pvt. Ltd.
Sood Tower, 1st Floor, 25,
Barakhamba Road, New Delhi - 11000
31. Nippon Steel Trading India Pvt. Ltd.
409, 4th Floor, DLF South Court,
District Centre Saket, New Delhi-110017
32. TT Steel Service India Pvt. Ltd.
Plot No. 28 to 45 GIDC-Mandal
Industrial Estate (Japanese Industrial Zone)
Vithalapur Village Mandal
Taluka Ahmedabad District 382-120
33. JFE Shoji India Private Limited
Plot No. F42, Ranjangaon
Industrial Aream MIDC Village, Karegaon
Taluka Shirur, Pune, MH 412220
34. Steel Center Co. Ltd.
Urban Net Kanda Building.,
6th floor, 3-6-2 Uchikanda,
Chiyoda-ku, Tokyo, 101-0047, Japan
35. Nippon Steel Pipe India Pvt. Ltd.
Plot no. SP2, 100 to 103, Japanese
Zone, Neemrana Dist. Alwar, Rajasthan
36. NST Wire and Welding Co. Ltd.
11-10, Nihonbashi Koamicho,
Chuo-ku, Tokyo Iwao Yamato Building
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AD/51196/2022
37. POSCO, Korea RP
POSCO Center, 440, Teheran-ro,
Gangnam-gu, Seoul, 06194, Korea
38. POSCO Asia Company Limited
Rm. 5306, Central Plaza, 18 Harbour
Road, Wanchai, Hong Kong
39. POSCO International Corporation
165, Convensia-Street, Yeonsu-gu,
Incheon, Korea
40. Samsung C&T Corporation
123, Olympic-ro 35-gil,
Songpa-gu, Seoul,
Republic of Korea
41. POSCO Maharashtra Steel Pvt. Ltd
7th Floor, World Trade Centre Pune,
1-Kharadi, Opp. Eon Free Zone,
MIDC, Knowledge Park, Pune, Maharashtra
42. POSCO India Processing Center Pvt. Ltd.
512, 5th Floor, Park Centra, Tower-A,
Near 32 Milestone, NH-8,
Sector-30, Gurgoan, 12201, India
43. POSCO India Processing Center Pvt. Ltd.
A-9, Talegaon MIDC, Navlakh Umbre,
Talegaon, Pune, Maharashtra 410507, India
44. Hyundai Steel Company, Korea RP
12 Heolleung-Ro, Seocho-Gu, Seoul, Korea
45. Dongkuk Industries Co. Ltd.
92 Da-dong, Chung-Ku, Seoul, Korea
46. Hyundai Corporation
25, Yulgok-ro 2-gil, Jongno-gu, Seoul, Republic of Korea
47. IONC Steel Co. Ltd.
#1105, 559, Dalseo, Dalseo-Gu Daegu
48. Kowon Trading Corp.
RM1007, 217 Saechang-Ro,
Yongsan-Gu, Seoul, Korea
49. GS Global Corporation
GS Tower, 508, Nonhyeon-ro,
Gangnam-gu, Seoul 06141, Korea
50. POS-Hyundai Steel Mfg. (I) Pvt. Ltd.
7, Bishop Wallers Avenue (West)
Mylapore, Chennai-600 004, India
51. Hyundai Steel Anantapur Private Limited
SY No. 134-151, 189-195 Ammavaro
Palli, Yerramachi Village, Penukonda,
Anantapur District, Andhra Pradesh-10
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AD/51196/2022
52. Hyundai Steel India Pvt. Ltd.
Address: 49, Sengadu Village,
Sriperumbudur-Manavala Nagar
Via, Kancheepuram Dt-602 002
53. Hyundai Motor India Ltd.
Plot No. H-1, SIPCOT Industrial Park,
Irrungattukottai, Sriperumbudur Taluk,
Kanchipuram District, Tamil Nadu
54. Hyundai Steel Pipe India Pvt. Ltd.
49, Sengadu Village, Sriperumbudur-
Manavala Nagar, Sriperumbudur Taluk,
Kanchipuram
55. Kia Motors India Pvt. Ltd.
Sy. No. 151-2, NH-44,
Erramanchi Village, Penukonda (M)
Anantapur (Dist), Andhra Pradesh-515164
56. LG International Corp
LG Gwanghwamun Building, 58
Saemunan-ro, Jongno-gu, Seoul (03184)
57. Steel Users Federation of India
52B, Plot No. 56, Ashok Chambers,
Devji Ratansy Marg, Masjid (E),
Mumbai, Maharashtra 400009
58. Consumer Electronics and Appliances
Manufacturers Association (CEAMA)
F-4/23, 4th Floor, Wave 1st Silver Tower,
Sector 18, Noida, Uttar Pradesh 201301
59. Skoda Auto Volkswagen India
E1, MIDC Industrial Area (Phase III)
Village Nigoje Mhalunge Kharabwadi,
Tal: Khed, Chakan, Maharashtra 410501
60. Renault Nissan Automotive India Pvt. Ltd.
Oragadam Industrial Corridor,
Chennai, Tamil Nadu 600089
61. PHA India Pvt. Ltd.
C 16 & C 25, Sipcot Industrial Park,
Irungattukottai, Sriperumbudur, Tamil Nadu 602117
62. Myoung Shin India Automotive Pvt. Ltd.
#496/2, Mannur Village,
Valarpuram Post, Sri Perumbudur Taluk,
Kancheepuram Dist., Tamil Nadu-602 105
63. Society of Indian Automobile Manufacurers (SIAM)
Core 4-B, 5th Floor, India Habitat Centre,
Lodhi Road, New Delhi-110003, India
64. Ysi Automotive Pvt. Ltd.
No. 112, Singadivakkam Village,
Enathur, Siruvedal, Tamil Nadu 631561
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AD/51196/2022
65. Hwashin Auto India Pvt. Ltd.
412 Eonha-ding, Yeongcheon-si,
Gyeongsangbuk-do, 770-280
66. P&A Corporation ......Respondents
#601, Ace-Gwanggyo Tower 3.77,
Changyoung-daero 256beon-gil,
Yeongtong-gu,
Suwon-si, Gyeonggi-do, Korea, 16229
APPERANCE
Shri Dhruv Gupta and Shri Bhargav Mansatta, Advocates for the appellant
Shri Abhay Chattopadhyay, Shri Udit Jain and Shri Naghm Ghei, Advocates
for the Respondent Nos. 18,19, 20, 21
Shri Ameet Singh and Ms. Nidhi Rekhari, Advocate for the Designated
Authority
Shri Rakesh Kumar, Authorised Representative for the Revenue
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: 23.11.2022
Date of Decision: 20.12.2022
FINAL ORDER NO. _51200/2022_
JUSTICE DILIP GUPTA:
The grievance raised by the appellant, which is an association of
steel producers in India, is that despite a recommendation having
being made by the designated authority in the final findings notified on
14.09.2021 for continuation of anti-dumping duty under section 9A of
the Customs Tariff Act 1975 1, the Central Government did not issue
the notification for continuation of anti-dumping duty. The relief,
therefore, that has been claimed in the appeal is that the office
memorandum dated 05.01.2022 issued by the Ministry of Finance,
1. the Tariff Act
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AD/51196/2022
Department of Revenue, Tax Research Unit conveying the decision of
the Central Government not to impose anti-dumping duty proposed
in the final findings be set aside and a direction be issued to the
Central Government to issue a notification for continuation of anti-
dumping duty, based on the recommendation made by the designated
authority.
2. It transpires from the record that an application had been filed
before the designated authority on behalf of the domestic industry for
initiation of sunset review investigation under the provisions of the
Tariff Act and the Customs Tariff (Identification, Assessment and
Collection of Anti-Dumping Duty on Dumped Articles and for
Determination of Injury) Rules, 1995 2 on imports of Cold Rolled/cold
reduced flat products of iron or Non-Alloy Steel, or other Alloy Steel of
all width and thickness-not clad, plated or coated 3 originating in or
exported from China PR, Japan, Korea RP and Ukraine4. The designated
authority, thereafter, issued a public notice dated 31.03.2021 to review
the need for continued imposition of anti-dumping duty in respect of
the subject goods, originating in or exported from the subject countries
and to examine whether the expiry of said anti-dumping duty is likely
to lead to continuation or recurrence of dumping and injury to the
domestic industry. The period of investigation for the purpose of anti-
dumping duty was from 01.04.2019 to 30.09.2020 and the injury
investigation period was from April 2016 to March 2019 and the period
of investigation. Oral hearings were conducted and the parties that
attended the oral hearings were advised to file written submissions on
2. the 1995 Anti-Dumping Rules
3. the subject goods
4. the subject countries
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AD/51196/2022
the views expressed orally, followed by rejoinders, if any. As
contemplated under rule 16, the essential facts of the investigation
were disclosed to the known interested parties by a disclosure
statement dated 03.09.2021. The interested parties, including the
appellant, filed comments to the disclosure statement.
3. Thereafter, the designated authority notified the final findings on
14.09.2021. The relevant portions of the conclusion drawn and the
recommendation by the designated authority in the final findings are as
follows:
"O. CONCLUSION
198. After examining the submissions made by the
interested parties and the issues raised therein and
considering the facts available on record, the Authority
concludes that:
*****
vii. The Authority conducted an elaborate likelihood analysis and noted as follows:
a) The basic customs duty on import of product under consideration has been reduced from 12.5% to 7.5% from 1st February 2021.
b) There are huge surplus capacities for product under consideration available with the producers/exporters in the subject countries as evidenced from the independent reports available on record and also from information provided by participating producers/exporters from the subject countries.
c) Examination of information regarding export price to third countries provided by participating producers/exporters from subject countries shows that significant exports to third countries are at dumped prices.
d) Many countries have imposed and continued trade remedy measures on imports of cold rolled flat steel originating from the subject countries.
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AD/51196/2022
e) Examination of information regarding export price to third countries provided by participating producers/exporters from subject countries shows that significant exports to third countries are at prices below the export price to India, which shows that Indian market is more price attractive to exporters from subject countries.
f) Historical trend of global steel prices show that steel prices are cyclical in nature and there is likelihood of injury to the domestic industry due to imports at low price when there is decline in global steel prices. viii. Assessment conducted by the Authority leads to the conclusion that there is a likelihood of continuation/recurrence of dumping and injury to the domestic industry in the event of revocation of duty. ix. The Authority has considered whether continuation of anti-dumping duty would have adverse public interest. The Authority notes that there is healthy competition in the Indian market and continuation of anti-dumping duty would not lead to monopolistic or oligopolistic situation in the Indian market for the subject goods.
x. Reference price-based duty that is in force and that is recommended by the Authority in the present sunset review would ensure that users and importers of product under consideration are not penalised when imports into India are above non injurious price.
P. RECOMMENDATIONS
211. The Authority notes that the sunset review was initiated and notified to all interested parties and adequate opportunity was given to the domestic industry, exporters, importers/users and other interested parties to provide information on the aspects of dumping, injury and the causal link and likelihood of continuation or recurrence of dumping and injury. Having initiated and conducted the sunset review into dumping, injury and causal link and likelihood of continuation or recurrence of dumping and injury in 10 AD/51196/2022 terms of provisions laid down under the Rules, the Authority is of the view that continued imposition of anti-dumping duty is required on subject goods from subject countries.
212. The Authority notes that producers/exporters from China PR. Ukraine, Korea RP and Japan participated in the original investigation. However, producers/exporters from China PR and Ukraine have not participated in the present sunset review investigation. In such a scenario, the Authority deems appropriate to prescribe duty table afresh as given hereinbelow.
213. The Authority recommends continuation of anti-dumping duty on the imports of the subject goods described in Col. 3 of the duty table below originating in or exported from the subject countries for a period of 5 years from the date of notification to be issued in this regard by the Central Government.*****"
(emphasis supplied)
4. It would be seen from the aforesaid final findings that on the basis of a detailed analysis carried, the designated authority found as fact that huge surplus capacities for the prodcut under consideration was available with the producers/exporters in the subject country and that since significant exports of the subject goods from the subject country to third countries were at dumped prices, the Indian market would be more attractive to the exporters from the subject country.
The designated authority ultimately concluded that there was a likelihood of continuation/recurrence of dumping and injury to the domestic industry in the event of revocation of duty and, therefore, made a recommendation to the Central Government for continuation of anti-dumping duty on the import of the subject goods from the subject country for a period of five years.11
AD/51196/2022
5. An office memorandum dated 05.01.2022 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-190354/59/2021-TO(TRU-I)-CBEC Government of India Ministry of Finance Department of Revenue (Tax Research Unit) *** Room No. 146(G), North Block, New Delhi, dated 5th January, 2022 OFFICE MEMORANDUM Subject: Final Findings-Anti-Dumping Investigation concerning imports of "Cold Rolled/cold reduced flat steel products of iron or Non-Alloy Steel, or other Alloy Steel of all width and thickness-not clad, plated or coated" originating in or exported from China PR, Japan, Korea RP and Ukraine-reg The undersigned is directed to refer to final findings on the above subject issued vide notification F. No. 7/6/2021-DGTR, dated the 14th September, 2021, wherein it was recommended to impose definitive anti- dumping duty on imports of "Cold Rolled/cold reduced flat steel products of iron or Non-Alloy Steel, or other Alloy Steel of all width and thickness-not clad, plated or coated"
originating in or exported from China PR, Japan, Korea RP and Ukraine.
2. In exercise of the powers conferred by sub- sections (1) and (5) of section 9A of the Customs Tariff Act, read with rules 18 and 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 aforesaid final findings of the designated authority, has decided not to accept the aforesaid recommendations.
Technical Officer (TRU-I)"
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AD/51196/2022
6. The main contention that has been advanced by Shri Dhruv Gupta, learned counsel appearing for the appellant assisted by Shri Bhargav Mansatta is that the office memorandum, communicating the decision of the Central Government not to continue anti-dumping duty, despite a recommendation having been made by the designated authority in the final findings to continue anti-dumping duty should be set aside for the reason that the principles of natural justice have been violated and even otherwise the decision is arbitrary, unreasoned and bad in law. The contention advanced by Shri Abhay Chattopadhyay learned counsel for the respondents assisted by Shri Udit Jain, Shri Naghm Ghei and other learned counsel for the respondents, is that the appeal is not maintainable under section 9C 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.
7. 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.
8. 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 13 AD/51196/2022 price and the normal price have all been defined in section 9A(1) of the Tariff Act.
9. 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. The first proviso, however, provides 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.
10. 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.
11. 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.
12. 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 14 AD/51196/2022 principles laid down in the Annexure III to these rules; and
(ii) the date of commencement of such duty;"
13. Rule 5 deals with initiation of investigation to determine the existence, degree and effect of any alleged dumping.
14. Rule 6 deals with the principles governing investigation and it is reproduced below:
"6. Principles governing investigations.-
(1) The designated authority shall, after it has decided to initiate investigation to determine the existence, degree and effect of any alleged dumping of any article, issue a public notice notifying its decision and such public notice shall, inter alia, contain adequate information on the following:-
(i) the name of the exporting country or countries and the article involved;
(ii) the date of initiation of the investigation;
(iii) the basis on which dumping is alleged in the application;
(iv) a summary of the factors on which
the allegation of injury is based;
(v) the address to which representations
by interested parties should be directed;
and
(vi) the time-limits allowed to interested parties for making their views known.
(2) A copy of the public notice shall be forwarded by the designated authority to the known exporters of the article alleged to have been dumped, the 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-
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AD/51196/2022
(i) the known exporters or to the concerned
trade association where the number of
exporters is large, and
(ii) the governments of the exporting
countries: Provided that the designated authority shall also make available a copy of the application to any other interested party who makes a request therefor in writing.
(4) The designated authority may issue a notice calling for any information, in such form as may be specified by it, from the exporters, foreign producers and other interested parties and such information shall be furnished by such persons in writing within thirty days from the date of receipt of the notice or within such extended period as the designated authority may allow on sufficient cause being shown.
Explanation: For the purpose of this sub-rule, the notice calling for information and other documents shall be deemed to have been received one week from the date on which it was sent by the designated authority or transmitted to the appropriate diplomatic representative of the exporting country.
(5) The designated authority shall also provide opportunity to the industrial users of the article under 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 16 AD/51196/2022 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 impedesthe 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."
15. Rule 10 deals with determination or normal value, export price and margin of dumping and it is reproduced below:
"10. Determination of normal value, export price and margin of dumping-
An article shall be considered as being dumped if it is exported from a country or territory to India at a price less than its normal value and in such circumstances the designated authority shall determine the normal value, export price and the margin of dumping taking into account, inter alia, the principles laid down in Annexure I to these rules."
16. 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 17 AD/51196/2022 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."
17. Rule 17 deals with final findings. It is reproduced below:
"Final findings.-
(1) The designated authority shall, within one year from the date of initiation of an investigation, determine as to whether or not the article under investigation is being dumped in India and submit to the Central Government its final finding-
(a) as to, -
(i) the export price, normal value and the margin of
dumping of the said article;
(ii) whether import of the said article into India, in
the case of imports from specified countries, causes or threatens material injury to any industry established in India or materially retards 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, 18 AD/51196/2022 to the domestic industry after considering the principles laid down in the Annexure III to rules."
18. 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."
19. 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 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.
20. 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.
21. Annexure-III to the 1995 Anti-Dumping Rules deals with the principles for determination of non-injurious price.
22. It is keeping in mind the aforesaid legal provisions that the submissions advanced by the learned counsel for the appellant and 19 AD/51196/2022 the learned counsel for the private respondents, as also the learned authorized representatives appearing for the respondent Union of India have to be considered.
23. 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.
24. The Bench also examined whether the determination by the Central Government was legislative in character or quasi-judicial in nature and after examining the relevant provisions of the Tariff Act, the 1995 Anti-Dumping Rules and the decisions of the Supreme Court and the High Courts observed that the function performed by the Central Government would be quasi-judicial in nature. The Bench also, in the alternative, held that even if the function performed by the Central Government was legislative, then too the principles of natural justice and the requirement of a reasoned order have to be compiled with since the Central Government would be performing the third category of conditional legislation contemplated in the judgment of the Supreme Court in State of Tamil Nadu vs. K. Sabanayagam and another6. The relevant observation 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
5. Anti-Dumping Appeal No. 51491 of 2021 decided on 30.08.2022
6. (1998) 1 SCC 318 20 AD/51196/2022 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 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 21 AD/51196/2022 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 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)
25. 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 22 AD/51196/2022 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)
26. The Bench thereafter observed:
"84. In view of the aforesaid decision of the Supreme Court in Punjab National Bank, the 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)
27. Learned authorized counsel for the appellant has also placed a decision of the Gujarat High Court in Realstripes Limited & 1 other(s) vs. Union of India & 1 other(s)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
7. R/Special Civil Application No. 4495 of 2022 decided on 02.09.2022 23 AD/51196/2022 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.*****"
28. 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 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."
29. 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, the Gujarat High Court held that the notification issued by the Central Government would be quasi-judicial in nature.
30. 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
8. (2010) 4 SCC 603
9. (2011) 15 SCC 580
10. (2006) 10 SCC 368
11. (2002) 5 SCC 658 24 AD/51196/2022 contain reasons nor the principles of natural justice have been compiled with and the matter would have to be remitted to the Central Government for taking a fresh decision on the recommendation made by the designated authority.
31. Thus, for all the reasons stated above, the office memorandum dated 05.01.2022 is set aside and the matter is remitted to the Central Government to reconsider the recommendation made by the designated authority in the light of the observations made above. The appeal is allowed to the extent indicated above.
(Order Pronounced on 20.12.2022) (JUSTICE DILIP GUPTA) PRESIDENT (P.V. SUBBA RAO) MEMBER (TECHNICAL (RACHNA GUPTA) MEMBER (JUDICIAL) Shreya