2014 (7) TMI 732 - HC - Customs

Court Invalidates Anti-Dumping Duty Levy During Sunset Review: Refund Ordered

M/s. Kumho Petrochemicals Co. Ltd., Fairdeal Polychem LLP Versus Union of India And Others

The court found the initiation of the sunset review valid as it occurred before the expiration of the original notification. However, the court deemed the ... Levy of anti-dumping duty beyond five years - retrospective amendment - Validity of anti-dumping duty extension proceedings under Section 9A of the Customs Tariff Act, 1975 ('CTA') - sunset review - Acrylonitrile Butadiene Rubber originating in, or exported from Korea RP - petitioners complain that in the present case, the notice proposing the review was published on 06-01-2014, after the expiration of the original notification. Thus, neither the review for continuing the duty, nor the levy during the pendency of inquiry was valid. - Held that:- If the court were to accept the petitioners' argument about the compelling nature of the requirement that for a sunset review to be valid, not only should it be shown to be initiated before the expiration of the period of the original notification, but also that the public notice in that regard should be shown to be issued and made available before the period, it would be doing violence to the statute. - the initiation took place on 22-12-2013; the notice was published in the Official Gazette on 31-12-2013 though it could be made available on 06-01-2014. Consequently the initiation of the sunset review was valid and proper. The petitioners' first challenge to the legality of the initiation therefore, fails. - Decided against the assessee. Legality of the levy pending sunset review - Held that:- the power under the second proviso to Section 9A(5), after expiry of the date of the original notification, is unavailable. - 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 - The imperative nature of second proviso to Section 9A (5) leaves no room for doubt that in case the Central Government wishes to extend the levy during the sunset review period, it has to comply with the terms of that provision and do so, before expiration of the original period. Not having done so, its attempt to levy the duty through the later notification of 23-01-2014 is without authority of law; it is contrary to the terms of proviso to Section 9A (5).The attempt to recover any amounts as duty, therefore, violates Article 265 of the Constitution of India. - the initiation of sunset review is valid and legal; however the levy of anti-dumping duty through the impugned notification of 23-01-2014 is without authority of law. - petitioner is entitled to get refund - Decided in favor of assessee. Issues Involved:1. Legality of the Central Government's decision to initiate anti-dumping duty extension proceedings.2. Validity of Notification No. 06/2014-Customs (ADD) levying anti-dumping duty on Acrylonitrile Butadiene Rubber from Korea RP.3. Compliance with procedural requirements for initiating and notifying the sunset review.4. Authority to levy anti-dumping duty during the pendency of the sunset review.Detailed Analysis:1. Legality of the Central Government's decision to initiate anti-dumping duty extension proceedings:The petitioners challenged the legality of the Central Government's decision to extend anti-dumping duty under Section 9A of the Customs Tariff Act, 1975 ('CTA'). The Central Government held an inquiry and imposed anti-dumping duty on Acrylonitrile Butadiene Rubber by a notification dated 02-01-2009, which was to be in force for five years till 01-01-2014. The petitioners argued that the Central Government could not levy and collect any anti-dumping duty after 01-01-2014 without issuing a notification in the Gazette before the expiry of the original notification, as required by Section 9A (5) and the Rules.2. Validity of Notification No. 06/2014-Customs (ADD) levying anti-dumping duty on Acrylonitrile Butadiene Rubber from Korea RP:The petitioners contended that the notification dated 23-01-2014, which amended the original notification to extend the anti-dumping duty till 01-01-2015, was issued without legal authority. They argued that once the original notification lapsed on 01-01-2014, there could be no amendment to an expired notification. The respondents argued that the sunset review was initiated before the expiry of the original notification and that the extension notification was valid.3. Compliance with procedural requirements for initiating and notifying the sunset review:The petitioners argued that the initiation of the sunset review was invalid as the notice proposing the review was published on 06-01-2014, after the expiration of the original notification. They relied on Rule 6 and Rule 23 of the Customs Tariff (Identification, Assessment and Collection of Anti-Dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995, which mandate that the initiation of the sunset review should be published and made available to concerned parties before the expiry of the original notification. The respondents contended that the initiation of the sunset review was valid as it was printed in the Official Gazette on 31-12-2013.4. Authority to levy anti-dumping duty during the pendency of the sunset review:The petitioners argued that the levy of anti-dumping duty during the pendency of the sunset review was invalid as the second proviso to Section 9A (5) requires an express notification to be issued before the expiry of the original notification. The respondents argued that the continuation of anti-dumping duty during the sunset review is mandatory and that the notification of 23-01-2014 was valid.Findings:1. Initiation of Sunset Review:The court found that the initiation of the sunset review was valid as the initiation took place on 31-12-2013, and the notice was published in the Official Gazette on 31-12-2013, though it was made available on 06-01-2014. The court held that the initiation was within the time and that public notice issued within a proximate period from that date was valid.2. Levy of Anti-Dumping Duty During Pendency of Sunset Review:The court held that the levy of anti-dumping duty during the pendency of the sunset review was invalid. The second proviso to Section 9A (5) requires that a notification for the continuation of the levy must be issued before the expiry of the original notification. The notification of 23-01-2014, which sought to amend the original notification, was issued after the lapse of the original notification and was without authority of law. The court held that the Central Government's attempt to levy the duty through the later notification was contrary to the terms of the proviso to Section 9A (5) and violated Article 265 of the Constitution of India.Conclusion:The court declared the notification of 23-01-2014 illegal and set it aside. The petitioners were entitled to a refund of the amounts paid till date. The writ petitions were partly allowed to the extent of declaring the impugned notification illegal and granting a refund.