2018 (6) TMI 265 - HC - Customs

Court sets aside Anti-Dumping Duty extension, emphasizing procedural compliance.

The court ruled in favor of the petitioners, setting aside the Initiation Notification, Final Finding, and Customs Notifications related to the extension ... Validity of Notifications - Extension of ADD - extension of Anti-Dumping Duty for the one year pending the Sunset Review - extension of Anti-Dumping Duty for the five years pursuant to the Sunset Review determination - 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? - Would a separate notification be required extending the levy of Anti-Dumping Duty before expiry of the original five year period? - Would a notification of levy of anti-dumping duty for another five years after the expiry of the Sunset-Review Period be valid? Held that:- 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 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. The N/N. 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 - 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. 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. 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. 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 - Petition allowed. Issues Involved:1. Extension of Anti-Dumping Duty during the Sunset Review period.2. Validity of retrospective revival of Anti-Dumping Duty.3. Compliance with statutory timelines for initiating and concluding Sunset Review.4. Authority to impose Anti-Dumping Duty after the original levy period.Detailed Analysis:1. Extension of Anti-Dumping Duty during the Sunset Review period:The petitioners challenged the extension of Anti-Dumping Duty for one year pending the Sunset Review and for five years following the Sunset Review determination. According to section 9A(5) of the Customs Tariff Act, the anti-dumping duty, unless revoked earlier, ceases after five years. However, if a review is initiated before the expiry of the five-year period, the duty may continue for a further period not exceeding one year pending the review's outcome. The petitioners argued that the duty could only be extended if the review was initiated within the original five-year period and the extension was made before the expiry of the initial levy. The court agreed with this interpretation, referencing the case of Kumho Petrochemicals Co. Ltd. vs Union of India, which held that the levy of anti-dumping duty cannot be extended beyond its original period unless a new notification is issued before the expiry date.2. Validity of retrospective revival of Anti-Dumping Duty:The petitioners contended that the retrospective revival of Anti-Dumping Duty through Customs Notification No. 17/2013 was without legal authority. The original levy expired on 04.05.2013, and the retrospective revival was notified on 05.07.2013, 60 days after the expiry. The court held that a duty that has expired cannot be revived retrospectively. The original notification's expiry date was reaffirmed by subsequent notifications, and once the duty lapsed, it could not be extended or revived.3. Compliance with statutory timelines for initiating and concluding Sunset Review:The court emphasized the importance of adhering to the statutory timelines specified in the Act and the Trade Notice No. 2/2011, which required the Sunset Review petition to be filed at least 90 days before the expiry of the levy. The Domestic Industry filed the petition in January 2013, but the revised application was only submitted on 09.04.2013, less than 90 days before the expiry date. The court found that the revised application effectively constituted a new petition, which should have been rejected for not meeting the 90-day requirement. The court also noted that the Designated Authority's discretion to accept late petitions should be exercised judiciously and not based on sympathetic considerations.4. Authority to impose Anti-Dumping Duty after the original levy period:The court ruled that the imposition of Anti-Dumping Duty for another five years following the Sunset Review was invalid because it was not issued within the period of the original five-year levy or the extended one-year period. The first proviso of section 9A(5) of the Act allows for the extension of the duty for a further five years if the Central Government concludes that cessation would lead to continued dumping and injury. However, this extension must occur within the existing duty period. The court found that there were two breaks in the duty's continuity, making the extensions invalid.Conclusion:The court set aside the Initiation Notification No. 15/1/2013 dated 30.04.2013, the Final Finding dated 29.04.2013, and the Customs Notifications Nos. 17/2013 and 35/2014 issued on 05.07.2013 and 24.07.2014, respectively. The judgment underscores the necessity of strict adherence to statutory timelines and procedural requirements in the imposition and extension of Anti-Dumping Duties.