Countervailing duty rescission without designated authority recommendation invalidated; rescission quashed and sunset review reinstated immediately

Validity of rescission of countervailing duty turned on statutory procedural preconditions: a review by the designated authority and formation of opinion by the Central Government that cessation would cause continuation or recurrence of subsidisation and injury, which must exist when imposing or discontinuing duty. Rescission issued without the designated authority's recommendation and prior completion of the sunset review lacked the foundational jurisdictional facts and was quashed. The sunset review process already commenced must be completed before any lawful revocation of the countervailing duty.

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Issues Involved:
1. Whether the Central Government could issue a Notification rescinding the countervailing duty during an ongoing Sunset review investigation.
2. Whether the Central Government could issue such Notification without a recommendation from the designated authority.
3. Whether the Central Government was obligated to follow the recommendatory procedure laid down in Sub-section (6) of Section 9 of the Customs Tariff Act, 1975, read with Rule 24 of the Customs Tariff Rules.
4. The interpretation of the words "unless revoked earlier" in sub-section (5) of section 9 of the Act.
5. Whether the determination of "continuation or recurrence of subsidization" and "injury" is a condition precedent for rescinding the countervailing duty.

Detailed Analysis:

Issue 1: Issuance of Notification During Ongoing Sunset Review
The Court held that the Central Government's issuance of Notification dated 01.02.2022, rescinding the countervailing duty, was irregular and illegal. The Notification could not have been issued during the ongoing Sunset review investigation, which must be completed before any decision to continue, withdraw, or rescind the duty.

Issue 2: Issuance of Notification Without Recommendation
The Court ruled that the Central Government could not issue the Notification rescinding the countervailing duty without any recommendatory exercise from the designated authority. The Central Government has no power to act unilaterally without waiting for the recommendation by the designated authority.

Issue 3: Obligation to Follow Recommendatory Procedure
It was obligatory for the Central Government to act and issue any Notification only after following the procedure laid down in Sub-section (6) of Section 9 of the Customs Tariff Act, 1975, read with Rule 24 of the Customs Tariff Rules. The procedure and exercise contemplated in these provisions are mandatory and cannot be treated as optional.

Issue 4: Interpretation of "Unless Revoked Earlier"
The words "unless revoked earlier" in section 9(6) of the Act do not grant the Central Government unfettered power to revoke the countervailing duty without following the statutory procedure. The revocation must be preceded by the ascertainment of essential ingredients, including a recommendation from the designated authority.

Issue 5: Determination of "Continuation or Recurrence of Subsidization" and "Injury"
The Court emphasized that the determination of "continuation or recurrence of subsidization" and "injury" is a sine qua non before issuing a Notification to rescind the duty. These are jurisdictional facts that must be established through the statutory procedure.

Conclusion and Directions:
1. The Notification dated 01.02.2022 rescinding the countervailing duty is quashed and set aside.
2. The designated authority must immediately proceed with the Sunset review process.
3. The review process must be completed in accordance with statutory provisions and rules.
4. The designated authority must make necessary recommendations to the Central Government, which can then take appropriate action.
5. The original Notification dated 07.09.2017 is revived, and the countervailing duty becomes leviable.
6. The Sunset review initiated must be completed as per law.
7. The levy of countervailing duty shall continue in the interregnum until the review process is completed and a decision is taken.

Further Order:
The Court rejected the request to suspend the implementation of the judgment and order for eight weeks. The reasons assigned in the judgment do not support granting a stay.

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