2023 (1) TMI 1426 - AT - Customs

Central Government's failure to issue anti-dumping duty notification within three months constitutes presumed decision not to impose duty

M/s. SRF LIMITED Versus Union of India, Designated Authority, Directorate General of Trade Remedies, M/s Sinochem Environmental Protection Chemicals (Taicang) Co. Ltd., M/s Shaanxi Sinochem Lantian New Chemical Material Co. Ltd., M/s Shandong Dongyue Chemical Co. Ltd., GM/s Zhejiang Sanmei Chemical Ind. Co. Ltd., M/s Zhejiang Quhua Fluor-chemistry Co. Ltd., M/s Zhejiang Quzhou Lianzhou Refrigerants Co. Ltd., M/s Sinochem Lantian Trading Co. Ltd., M/s Sinochem Xi'an Jincool New Chemical Materials Co. Ltd., M/s Sinochem Lantian Fluoro Materials Co. Ltd., M/s Sinochem Modern Environmental Protection Chemical (Xi'an) Co. Ltd.

CESTAT NEW DELHI held that Central Government's failure to issue anti-dumping duty notification within three months of designated authority's final ... Non-Imposition of anti-dumping duty u/s 9A of the Customs Tariff Act 1975 - Central Government did not issue the Notification for imposition of anti-dumping duty within three months from the date the final findings were notified by the designated authority Whether Central Government has taken a decision not to impose anti-dumping duty? - HELD THAT:- It has to be presumed that the Central Government has taken a decision not to impose antidumping duty despite a recommendation having been made by the designated authority for imposition of anti-dumping duty. This presumption also finds support from the fact that the Central Government issued a notification dated 06.01.2022, after the final findings were submitted by the designated authority on 08.10.2021, rescinding the notification dated 11.07.2016 earlier issued by the Central Government imposing anti-dumping duty for a period of five years and then extending it upto and inclusive of 10.01.2022 by a notification dated 24.01.2021. The matter has, therefore, to be remitted to the Central Government for taking a decision on the recommendation made by the designated authority. Maintainability of appeal u/s 9C - 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 vs. Union of India and 38 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. In Balaji Amines Ltd. vs. The Union of India [2022 (12) TMI 985 - CESTAT NEW DELHI] Bench also held that an appeal under section 9C of the Tariff Act would be maintainable even if the Central Government does not issue a notification for imposition of anti-dumping duty for a long period of time after the designated authority has made a recommendation for imposition of anti-dumping duty. Whether the Central Government exercises legislative power? - The Bench in Apcotex Industries [2022 (11) TMI 1096 - CESTAT NEW DELHI] 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 compiled with since the Central Government would be performing the third category of conditional legislation contemplated in the judgment of State of Tamil Nadu vs. K. Sabanayagam and another [1997 (11) TMI 520 - SUPREME COURT] held that reasons have to be recorded by the Central Government when it proceeds to form an opinion not to impose any anti-dumping duty despite a positive recommendation made by the designated authority in the final findings for imposition of anti-dumping duty. Principles of natural justice and reasoned order - Reasons have to be recorded by the Central Government when it proceeds to form an opinion not to impose any anti-dumping duty despite a positive recommendation made by the designated authority in the final findings for imposition of anti-dumping duty. The matter, therefore, would have to be remitted to the Central Government for taking a decision on the recommendation made by the designated authority for imposition of anti-dumping duty on the import of the subject goods from the subject countries. Provisional Assessment - Though the present appeal is being disposed of but a decision has yet to be taken by the Central Government in the light of the observations made in the order. It is, therefore, considered appropriate to pass a similar order, as was passed by the High Court, which will remain operative till a decision is taken by the Central Government on the recommendation made by the designated authority for imposition of anti-dumping duty. The directions are as follows: (i) The provisional assessment of imports concerning the subject goods from the subject countries will be made for the time being; (ii) It is, however, made clear that the aforesaid direction will not create any equities in favour of the domestic industry; and (iii) This direction will not have any impact on the decision to be taken by the Central Government pursuant to the directions issued for reconsideration of the recommendation made by the designated authority. Conclusion - The matter is remitted to the Central Government to consider the recommendation made by the designated authority in the final findings dated 08.10.2022 in the light of the observations made above. The directions contained in paragraph 42 of this order shall continue to operate till such time as a decision is taken by the Central Government. The appeal is allowed to the extent indicated above. Issues Involved:1. Whether the Central Government has taken a decision not to impose anti-dumping duty.2. Maintainability of the appeal under section 9C of the Customs Tariff Act.3. Whether the Central Government exercises legislative or quasi-judicial power.4. Compliance with principles of natural justice and requirement of a reasoned order.5. Provisional assessment of imports.Detailed Analysis:1. Whether the Central Government has taken a decision not to impose anti-dumping duty:The appellant contended that despite the designated authority's recommendation for the imposition of anti-dumping duty on the subject goods from China, the Central Government did not issue the necessary notification within the stipulated three months. The Tribunal noted that the Central Government's silence and subsequent issuance of a notification on 06.01.2022 rescinding the previous anti-dumping duty implied a decision not to impose such a duty. The Tribunal concluded that a presumption could be drawn that the Central Government decided not to impose anti-dumping duty, and the matter should be remitted to the Central Government for reconsideration of the designated authority's recommendations.2. Maintainability of the appeal under section 9C of the Customs Tariff Act:The Tribunal examined the maintainability of the appeal under section 9C and referenced previous decisions, including Apcotex Industries Limited, where it was held that an appeal is maintainable against the Central Government's decision not to impose anti-dumping duty. The Tribunal reaffirmed that the appeal is maintainable even if the Central Government does not issue a notification for a long period after the designated authority's recommendation.3. Whether the Central Government exercises legislative or quasi-judicial power:The Tribunal analyzed whether the Central Government's role in imposing anti-dumping duty is legislative or quasi-judicial. It concluded that the function is quasi-judicial, requiring adherence to principles of natural justice and a reasoned order. The Tribunal cited the Supreme Court's judgment in State of Tamil Nadu vs. K. Sabanayagam, which categorized such functions as conditional legislation requiring a detailed examination of relevant factors.4. Compliance with principles of natural justice and requirement of a reasoned order:The Tribunal emphasized that the Central Government must record reasons when forming an opinion not to impose anti-dumping duty, despite a positive recommendation from the designated authority. It highlighted that the principles of natural justice necessitate providing the domestic industry an opportunity to submit representations if the Government forms a prima facie opinion against the imposition of duty.5. Provisional assessment of imports:The Tribunal addressed the appellant's request for provisional assessment of imports, similar to the interim measures ordered by the Delhi High Court in related cases. The Tribunal directed that provisional assessment of imports concerning the subject goods be made until the Central Government decides on the designated authority's recommendations. This provisional measure ensures that importers are aware of the potential imposition of anti-dumping duty, without creating any equities in favor of the domestic industry or affecting the merits of the Central Government's final decision.Conclusion:The Tribunal remitted the matter to the Central Government to reconsider the designated authority's recommendations in light of the Tribunal's observations. The directions for provisional assessment will remain in effect until the Central Government reaches a decision. The appeal was allowed to the extent indicated, and the Tribunal directed the Department to ensure compliance with the order across relevant zones.