2023 (6) TMI 798 - AT - Customs

Tribunal sets aside government's decision on anti-dumping duty, emphasizes natural justice principles and reasoning

INDIAN STEEL ASSOCIATION Versus UNION OF INDIA

The Tribunal set aside the Central Government's decision not to impose anti-dumping duty, citing violations of natural justice principles and lack of ... Continuation of anti-dumping duty under Section 9A of the Customs Tariff Act, 1975 - notification for continuation of anti-dumping duty not issued - imports of Hot-Rolled flat products of alloy or non-alloy steel from China PR, Japan, Korea RP, Russia, Brazil and Indonesia - domestic industry suffered material injury and unutilized capacities and surplus production - requirement of compliance of principles of natural justice - HELD THAT:- 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 AND OTHERS VERSUS UNION OF INDIA AND OTHERS [2022 (11) TMI 1096 - CESTAT NEW DELHI] 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. 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 complied 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 T.N. SECRETARY HOUSING DEPTT. MADRAS VERSUS K. SABANAYAGAM & ANR. [1997 (11) TMI 520 - SUPREME COURT]. The Gujarat High Court in REALSTRIPS LIMITED & 1 OTHER (S) VERSUS UNION OF INDIA & 1 OTHER (S) [2022 (9) TMI 1171 - GUJARAT HIGH COURT] 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 (I) VERSUS INSTITUTE OF SOCIAL WELFARE & ORS. [2002 (5) TMI 847 - SUPREME COURT], the Gujarat High Court held that the notification issued by the Central Government would be quasi-judicial in nature. 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 contain reasons nor the principles of natural justice have been complied 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. The matter is remitted to the Central Government to reconsider the recommendation made by the designated authority in the light of the observations made - Appeal allowed by way of remand. Issues Involved:1. Whether the Central Government's decision not to impose anti-dumping duty despite the designated authority's recommendation violates principles of natural justice.2. Whether the decision of the Central Government is arbitrary, unreasoned, and bad in law.3. The maintainability of the appeal under Section 9C of the Customs Tariff Act.4. The nature of the Central Government's function under Section 9A of the Customs Tariff Act and compliance with procedural requirements.Issue-wise Detailed Analysis:1. Violation of Principles of Natural Justice:The appellant argued that the Central Government's decision communicated via the office memorandum dated 4-1-2022, which decided not to impose anti-dumping duty despite the designated authority's recommendation, violated the principles of natural justice. The appellant contended that the decision was arbitrary, unreasoned, and bad in law. The Tribunal noted that the principles of natural justice require that reasons must be recorded by the Central Government when it decides not to impose anti-dumping duty despite a positive recommendation from the designated authority. This ensures transparency and fairness in the decision-making process.2. Arbitrariness and Lack of Reasoning:The Tribunal observed that the Central Government's decision lacked reasoning and was arbitrary. The decision did not provide any justification for deviating from the designated authority's recommendation, which had concluded that the domestic industry suffered material injury and that there was a likelihood of continuation or recurrence of dumping and injury upon cessation of the anti-dumping duties. The Tribunal emphasized that even if the Central Government's function was considered legislative, it still required compliance with principles of natural justice and the issuance of a reasoned order, as it involved conditional legislation.3. Maintainability of the Appeal:The Tribunal examined the maintainability of the appeal under Section 9C of the Customs Tariff Act. It referred to its previous decision in M/s. Apcotex Industries Limited v. Union of India, where it was held that the appeal is maintainable against the Central Government's decision not to impose anti-dumping duty. The Tribunal reiterated that the function performed by the Central Government in this context is quasi-judicial in nature, and therefore, the appeal is maintainable.4. Nature of Central Government's Function and Procedural Compliance:The Tribunal analyzed whether the Central Government's function under Section 9A of the Customs Tariff Act is legislative or quasi-judicial. It concluded that the function is quasi-judicial in nature, requiring the Central Government to follow the principles of natural justice and provide a reasoned order. The Tribunal referred to the Supreme Court's judgment in State of Tamil Nadu v. K. Sabanayagam, which categorized the function as conditional legislation, necessitating procedural compliance. The Tribunal also cited the Gujarat High Court's decision in Realstripes Limited v. Union of India, which supported the view that the issuance of the notification by the Central Government is quasi-judicial and subject to judicial review.Conclusion:The Tribunal set aside the office memorandum dated 4-1-2022 and remitted the matter to the Central Government for reconsideration in light of the observations made. The Tribunal emphasized the need for the Central Government to provide reasons for its decision and comply with the principles of natural justice. The appeal was allowed to the extent indicated.