Gujarat High Court
Reaghan vs Union on 2 July, 2012
Bench: Bhaskar Bhattacharya, J.B.Pardiwala
Gujarat High Court Case Information System
Print
SCA/4250/2012 16/ 16 JUDGMENT
IN
THE HIGH COURT OF GUJARAT AT AHMEDABAD
SPECIAL
CIVIL APPLICATION No. 4250 of 2012
With
CIVIL
APPLICATION No. 5083 of 2012
In
SPECIAL
CIVIL APPLICATION No. 4250 of 2012
With
CIVIL
APPLICATION No. 5084 of 2012
In
SPECIAL
CIVIL APPLICATION No. 4250 of 2012
For
Approval and Signature:
HONOURABLE
THE ACTING CHIEF JUSTICE
MR.BHASKAR
BHATTACHARYA
AND
HONOURABLE
MR.JUSTICE J.B.PARDIWALA
=========================================================
1
Whether
Reporters of Local Papers may be allowed to see the judgment ?
2
To be
referred to the Reporter or not ?`
3
Whether
their Lordships wish to see the fair copy of the judgment ?
4
Whether
this case involves a substantial question of law as to the
interpretation of the constitution of India, 1950 or any order
made thereunder ?
5
Whether
it is to be circulated to the civil judge ?
=========================================================
REAGHAN
FASHIONS PVT LTD & ANR.
Versus
UNION
OF INDIA & ANR.
=========================================================
Appearance
:
MR
PARESH M DAVE for Petitioners.
MR PS CHAMPANERI for Respondents.
MR
MIHIR THAKORE, SR. ADVOCATE and MR MIHIR JOSHI, SR. ADVOCATE FOR
APPLICANTS IN THE CIVIL
APPLICATIONS.
=========================================================
CORAM
:
HONOURABLE
THE ACTING CHIEF JUSTICE MR.BHASKAR BHATTACHARYA
and
HONOURABLE
MR.JUSTICE J.B.PARDIWALA
Date
: 02/07/2012
CAV
JUDGMENT
(Per : HONOURABLE THE ACTING CHIEF JUSTICE MR.BHASKAR BHATTACHARYA)
1. By this application under Article 226 of the Constitution of India, the writ-petitioners have prayed for issue of writ of Prohibition or any other appropriate writ, permanently prohibiting the respondents, their servants and agents from taking action including issue of any notification under the Customs Tariff Act, 1975 [the Act, hereafter] on the basis of and pursuant to Notification dated February 24, 2012 issued by the respondent no. 2 which is annexed at annexure "E" to the writ-application.
2. The writ-petitioner No.1 is a Private Limited Company (hereafter referred to as the petitioner). The writ-petitioner No.2 is a Director of the petitioner.
3. The case made out by the writ-petitioners may be summed up thus:
3.1 The Petitioner is engaged in the business of trading of subject goods and manufacture of Woven fabrics like sarees, dupattas, dress materials, scarves, etc. The main input for the manufacture of such goods by the petitioner is Viscose Filament Yarn, which is the subject matter of the impugned Final Findings dated 24th February 2012 being annexure 'E' to the writ-application.
3.2 The Anti Dumping Duty proceedings were initiated on 7th April 2005 for Viscose Filament Yarn originating in or exported from China PR and culminated in the passing of Final Findings dated 4th April 2006 and imposition of Reference-Price-Based-Duties by way of issue of Notification No. 45/2006-Customs dated 24th May 2006.
3.3 The Respondent No. 2 thereafter initiated a Midterm Review under Rule 23 of the Customs Tariff (Identification, Assessment and Collection of Anti-Dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995 (hereinafter referred to as the Rules) on 23rd May 2008 and concluded the said review by way of issue of Final Findings dated 22nd May 2009. While recording such findings, the respondent No. 2 specifically recorded that it considered it appropriate to recommend separate benchmark for different deniers of the product under consideration having regard to the objective of Midterm Review, arguments of the interested parties and legal provisions in that regard. A corrigendum dated 17th June 2009 was accordingly issued by the respondent No. 2 to amend the duty table. The respondent No. 1 by way of issue of Notification No. 81/2009-Customs dated 13th July 2009 accepted the said recommendations of the respondent No. 2.
3.4 The Respondent No.2, vide Public Notice dated 25th February 2011 initiated Sunset Review Investigations by recording the following observations:
"In view of the order of the Hon'ble Delhi High court in the matter of Indian Metal and Ferro Alloys Ltd V/s Designated Authority, Writ Petition (Civil) No. 16893 of 2006 and in accordance with Section 9A(5) of the Act, read with Rule 23 of the AD Rules, the Authority hereby initiates a sunset review investigation to review the need for continued imposition of the duties in force in respect of the subject goods and to examine whether the cessation of such duty is likely to lead to continuation or recurrence of dumping and injury."
3.5 The Petitioner alleges that based on specific language of Section 9A(5) of Act and Rule 23 of the Rules read with a decision of the Supreme Court in the case of RISHIROOP POLYMERS, it was under a bona fide impression that the object and purpose of sunset review proceedings were only to determine after examination of certain factors whether the period of imposition needed to be extended for a further duration of five years. According to the petitioner, it was also under the impression that the change in duties could only be sought through a midterm review and not in a sunset review under Section 9A (5) of the Act.
3.6 The petitioner contends that all the interested parties were specifically put to notice for sunset review proceedings under Section 9A (5) of the Act, the scope of which is limited by law only to "extend the period" of the anti-dumping duties already imposed. The issue of the notice dated 25th February 2011, according to the petitioner, never put any party to notice that the Designated Authority was proposing to change, vary or enhance the duty already imposed vide Notification No. 81/2009-Customs dated 13th July 2009.
3.7 It may be mentioned here that immediately thereafter, Rule 23 was amended vide Notification No. 15/2011-Customs (NT) dated 1st March 2011 providing for variation of duties in a midterm review in terms of Rule 23(1A). A provision for sunset review under Rule 23(1B) was also added to provide for the procedure for initiation of a sunset review. However, Rule 23(1B) did not provide for any variation of anti-dumping duty apparently in view of the fact that no such power had been envisaged under the provisions of the Act itself.
3.8 In the meantime, the duties imposed vide Notification No. 45/2006-Customs dated 24th May 2006 were to expire on 23rd May 2011 in terms of Section 9A(5) of the Act. As the proceedings initiated by the Designated Authority were not likely to be concluded before 23rd May 2011, the respondent No. 1 issued Notification No. 38/2011-Customs dated 9th May 2011 and extended the duty during the pendency of the proceedings till 24th February 2012.
3.9 The sunset review proceedings impugned in this writ-application were concluded by the recording of Final Findings dated 24th February 2012 in terms of Rule 17 of the Rules. The respondent No. 2, while dealing with the issues raised in the present writ-petition, concluded that there were significant differences within the product under consideration, particularly, in terms of its weight and price and therefore, anti-dumping duty in terms of reference price or fixed duty would not be appropriate in this case. It was further noted that lighter deniers are significantly costlier and considering the specific facts and merits of this case, the Authority considered that ad valorem form of duty would be the most suited in the instant matter.
3.10 As regards the contention that the Authority has power only to extend the period and that the duties cannot be enhanced, the Authority reiterated its view that it did not concur with the said contention and considered that a proper reading of the relevant rules and regulations on the subject enabled the Authority to modify the duties as well based on the facts and merits of each case.
4. Mr. Soparkar, the learned senior advocate appearing on behalf of the petitioners, strenuously contended before us that the impugned findings recorded by the respondent No.2 were contrary to the Act and the Rules and were required to be set aside as those were arrived at without taking into consideration the powers conferred under Section 9A (5) of Act and Rule 23 of the Rules. According to Mr. Soparkar, the respondent No.2 committed a jurisdictional error in recommending variation in duties as he failed to appreciate that Section 9A(5) of the Act provides only for extension of the period beyond the initial period of 5 years. A plain reading of the first proviso to Section 9A (5), according to Mr. Soparkar, clearly indicates that the Central Government may extend the period for a further period of 5 years subject to fulfillment of certain conditions. Thus, Mr. Soparkar contended that the powers of the Authority are limited to the question of extension of the period and the scope of this provision cannot be enlarged to include the power of variation of the anti-dumping duty already in existence at the point of extension of the period.
5. Mr. Thakore, the learned senior advocate appearing on behalf of the applicants, in the Civil Application and Mr. Champaneri, the learned Assistant Solicitor General appearing on behalf of the Revenue, opposed the aforesaid contentions of Mr. Soparkar and contended that the provisions contained in section 9A(5) of the Act authorizes the Designated Authority also to vary the amount of anti-dumping duty which necessarily means either enhancement or reduction of the duty. In addition to the aforesaid point, they further contend that the writ-application is required to be dismissed on the ground of existence of efficacious alternative remedy against the aforesaid recommendation before the Tribunal. Mr. Thakore and Mr. Champaneri also pray for dismissal of the writ-application on the above grounds.
6. Before we enter into the merits of the matter, we first propose to deal with the preliminary objections raised by the learned counsel for the respondents regarding the maintainability of the writ-application on the ground of existence of the efficacious alternative remedy.
7. It is true that the order impugned is an appealable one and the appeal lies before the Tribunal below. It is, however, a settled law that notwithstanding existence of alternative remedy, a writ-application is also maintainable if the alternative remedy is not efficacious or in a case where the authority which passed the order has done so in excess of its jurisdiction which can be decided on a plain interpretation of the statute involved. Moreover, the fact that there exists an alternative remedy is a relevant consideration at the time of entertaining of the application but once the writ-application has been entertained and parties have filed affidavits, the question of existence of alternative remedy becomes academic.
8. Having regard to the fact that Mr. Soparkar has restricted his submission on the pure question of jurisdiction of the respondent No.2 to enhance the anti-dumping duty at the sunset stage, we entertained the writ-application for deciding that pure question of law and after filing of affidavits, we do not find any reason to dismiss the same on the ground of existence of alternative remedy of the petitioners.
9. We, therefore, overrule the preliminary objections raised by the learned counsel for the respondents and propose to enter into merits.
10. The only question that falls for determination in this writ-application is whether section 9A (5) of the Act authorizes the respondent No.2 to vary the amount of anti-dumping duty by increasing the same at the sunset stage.
11. In order to appreciate the aforesaid question, it will be profitable to refer to the provisions of Section 9A (5) of the Act and Rule 23 of the Rules, which are quoted below:
Section 9A of the Act reads as under:
9A. Anti-dumping duty on dumped articles.
(1) Where any article is exported by an exporter or producer from any country or territory (hereinafter in this section referred to as the exporting country or territory) 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.
Explanation.-For the purposes of this section,-
(a). "margin of dumping", in relation to an article, means the difference between its export price and its normal value;
(b). "export price", in relation to an article, means the price of the article exported from the exporting country or territory and in cases where there is no export price or where the export price is unreliable because of association or a compensatory arrangement between the exporter and the importer or a third party, the export price may be constructed on the basis of the price at which the imported articles are first resold to an independent buyer or if the article is not resold to an independent buyer, or not resold in the condition as imported, on such reasonable basis as may be determined in accordance with the rules made under sub-section(6);
(c). "normal value", in relation to an article, means-
the comparable price, in the ordinary course of trade, for the like article when destined for consumption in the exporting country or territory as determined in accordance with the rules made under sub-section (6); or when there are no sales of the like article in the ordinary course of trade in the domestic market of the exporting country or territory, or when because of the particular market situation or low volume of the sales in the domestic market of the exporting country or territory, such sales do not permit a proper comparison, the normal value shall be either-
(a). comparable representative price of the like article when exported from the exporting country or territory to an appropriate third country as determined in accordance with the rules made under sub-section (6);
or
(b). the cost of production of the said article in the country of origin along with reasonable addition for administrative, selling and general costs, and for profits, as determined in accordance with the rules made under sub-section (6):
Provided that in the case of import of the article from a country other than the country of origin and where the article has been merely transshipped through the country of export or such article is not produced in the country of export or there is no comparable price in the country of export, the normal value shall be determined with reference to its price in the country of origin.
(1A) Where the Central Government, on such inquiry as it may consider necessary, is of the opinion that circumvention of anti-dumping duty imposed under sub-section (1) has taken place, either by altering the description or name or composition of the article subject to such anti-dumping duty or by import of such article in an unassembled or disassembled form or by changing the country of its origin or export or in any other manner, whereby the anti-dumping duty so imposed is rendered ineffective, it may extend the anti-dumping duty to such article or an article originating in or exported from such country, as the case may be.
(2) The Central Government may, pending the determination in accordance with the provisions of this section and the rules made thereunder of the normal value and the margin of dumping in relation to any article, impose on the importation of such article into India an anti-dumping duty on the basis of a provisional estimate of such value and margin and if such anti-dumping duty exceeds the margin as so determined:-
(a). the Central Government shall, having regard to such determination and as soon as may be after such determination, reduce such anti-dumping duty; and
(b). refund shall be made of so much of the anti-dumping duty which has been collected as is in excess of the anti-dumping duty as so reduced.
(2A) Notwithstanding anything contained in sub-section [1] and sub-section[2], a notification issued under sub-section [1] or any anti-dumping duty imposed under sub-section [2], shall not apply to articles imported by a hundred per cent, export-oriented undertaking unless,--
(i). specifically made applicable in such notifications or such impositions, as the case may be; or
(ii). the article imported is either cleared as such into the domestic tariff area or used in the manufacture of any goods that are cleared into the domestic tariff area, and in such cases anti-dumping duty shall be levied on that portion of the article so cleared or so used as was leviable when it was imported into India.
Explanation.-- For the purposes of this sub-section, the expression "hundred per cent export-oriented undertaking" shall have the meaning assigned to it in Explanation 2 to sub-section [1] of section 3 of the Central Excise Act, 1944 [1 of 1944].
(3) If the Central Government, in respect of the dumped article under inquiry, is of the opinion that -
(i). there is a history of dumping which caused injury or that the importer was, or should have been, aware that the exporter practices dumping and that such dumping would cause injury; and
(ii). the injury is caused by massive dumping of an article imported in a relatively short time which in the light of the timing and the volume of imported article dumped and other circumstances is likely to seriously undermine the remedial effect of the anti-dumping duty liable to be levied, the Central Government may, by notification in the Official Gazette, levy anti-dumping duty retrospectively from a date prior to the date of imposition of anti-dumping duty under sub-section (2) but not beyond ninety days from the date of notification under that sub-section, and notwithstanding anything contained in any law for the time being in force, such duty shall be payable at such rate and from such date as may be specified in the notification.
(4) The anti-dumping duty chargeable under this section shall be in addition to any other duty imposed under this Act or any other law for the time being in force.
(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.
(6) The margin of dumping as referred to in sub-section (1) or sub-section (2) shall, from time to time, be ascertained and determined by the Central Government, after such inquiry as it may consider necessary and the Central Government may, by notification in the Official Gazette, make rules for the purposes of this section, and without prejudice to the generality of the foregoing, such rules may provide for the manner in which articles liable for any anti-dumping duty under this section may be identified, and for the manner in which the export price and the normal value of, and the margin of dumping in relation to, such articles may be determined and for the assessment and collection of such anti-dumping duty.
(6A) The margin of dumping in relation to an article, exported by an exporter or producer, under inquiry under sub-section (6) shall be determined on the basis of records concerning normal value and export price maintained, and information provided, by such exporter or producer:
Provided that where an exporter or producer fails to provide such records or information, the margin of dumping for such exporter or producer shall be determined on the basis of facts available.
(7) Every notification issued under this section shall, as soon as may be after it is issued, be laid before each House of Parliament.
(8) The provisions of the Customs Act, 1962 (52 of 1962) and the rules and regulations made thereunder, including those relating to the date for determination of rate of duty, assessment, non-levy, short levy, refunds, interest, appeals, offences and penalties shall, as far as may be, apply to the duty chargeable under this section as they apply in relation to duties leviable under that Act.
Rule 23 of the Rules reads as under:
23. Review.
(1) Any anti-dumping duty imposed under the provision of section9A of the Act, shall remain in force, so long as and to the extent necessary, to counteract dumping, which is causing injury.
(1A) 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.
(1B) Notwithstanding anything contained in sub-rule (1) or (1A), 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 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.
(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.
12. After hearing the learned counsel for the parties and after going through the provision contained in Section 9[A] of the Act, it appears that the said provision authorizes the Central Government to impose an anti-dumping duty by issue of notification in the Official Gazette to the extent indicated therein. It further appears that duration of such imposition should be for the period of 5 years from the date of imposition unless revoked earlier with a power conferred upon the Central Government to extend the said period for further period of five years as provided in the proviso to Section 9[A] [5]. As pointed earlier, while extending the period in exercise of power conferred under sub-section [5], the respondent no.2 has recommended the variation of the anti-dumping duty originally imposed in addition to the proposal of extension of the period. We are unable to accept the contention of Mr. Soparkar, the learned Senior Advocate appearing on behalf of the petitioners, that while considering the question of extension of the period by imposition in terms of sub-section [5] of Section 9[A], the Central Government has no power to vary the amount of duty initially imposed. As provided in Section 21 of the General Clauses Act, 1897, where, by any Central Act or Regulations, a power to issue notifications, orders, rules or bye-laws is conferred, then, that power includes a power exercisable, in the like manner and subject to the like sanction and conditions [if any], to add to, amend, vary or rescind any notifications, orders, rules or bye-laws so issued.
13. Such being the position, at the time of considering the question of extension of the period of imposition of anti-dumping duty for a further period, there is no bar in proposing variation of the original amount of anti-dumping duty imposed initially in terms of Section 9[A] of the Act.
14. We, therefore, find no substance in the only contention raised by Mr. Soparkar in support of this writ-application.
15. In view of what has been stated above, we find no merit in this writ-application and the same is dismissed. Interim order granted earlier stands vacated. We make it clear that we have not, otherwise, gone into the question whether in the facts of the present case, variation of anti-dumping duty in the changed circumstances was justified or not as we have restricted our scrutiny to the only question whether Section 9[A] of the Act authorizes the Central Government to vary the amount of anti-dumping duty originally imposed during its tenure of operation or the extended tenure of operation in terms of Section 9[A] [5] of the Act.
16. In view of the dismissal of the main writ-application, connected Civil Applications filed for variation of interim order have become infructuous and those are disposed of accordingly.
[BHASKAR BHATTACHARYA, ACTING C.J.] mathew [J.B.PARDIWALA.
J.] FURTHER ORDER:-
After this order is pronounced, the learned advocate appearing on behalf of the petitioners prays for stay of operation of the order.
In view of what has been stated above, we find no reason to stay our order. The prayer is refused.
[BHASKAR BHATTACHARYA, ACTING C.J.] mathew [J.B.PARDIWALA.
J.] Top