Gujarat HC quashes notification rescinding anti-dumping duty on Purified Terephthalic Acid from seven countries without proper review

Gujarat HC quashed notification rescinding anti-dumping duty on Purified Terephthalic Acid from China, Iran, Indonesia, Malaysia, Taiwan, Korea and Thailand. Court held revocation without Designated Authority's recommendation and sunset review was illegal, following precedent in Realstrips Limited case. Original ADD notification revived with duty continuing until sunset review completion by July 2024. Designated Authority directed to immediately initiate sunset review process per statutory provisions.

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Issues Involved:
1. Legality of Notification No. 03/2020-Customs (ADD) dated February 2, 2020.
2. Requirement of sunset review for revocation of Anti-Dumping Duty (ADD).
3. Compliance with statutory provisions and rules for revocation of ADD.
4. Public interest considerations in revocation of ADD.

Summary:

1. Legality of Notification No. 03/2020-Customs (ADD) dated February 2, 2020:
The petitioner challenged the Notification No. 03/2020-Customs (ADD) dated February 2, 2020, issued by the Central Government, which revoked the Anti-Dumping Duty (ADD) on Purified Terephthalic Acid (PTA). The petitioner argued that the notification was issued arbitrarily and without following due process of law, violating Section 9A of the Customs Tariff Act, 1975, and related rules.

2. Requirement of sunset review for revocation of ADD:
The petitioner contended that ADD imposed should be effective for five years unless revoked earlier through a "review" conducted by the Designated Authority (DA) under section 9A(5) of the Act and Rule 23 of the Rules. The petitioner argued that the Central Government's action of revoking ADD without adopting the mandatory review procedure was arbitrary and illegal.

3. Compliance with statutory provisions and rules for revocation of ADD:
The court held that the Central Government could not issue the notification rescinding ADD without a recommendatory exercise by the DA and without waiting for such recommendations. The court emphasized that the procedure and exercise contemplated in Section 9A(5) and (6) of the Act read with Rule 23 and 24 of the Rules are mandatory and cannot be bypassed. The court noted that the Central Government acted without the foundational aspects and jurisdictional facts to issue the notification.

4. Public interest considerations in revocation of ADD:
The Central Government justified the revocation of ADD on the grounds of public interest, stating that the revocation would benefit the downstream textile industry by making PTA available at competitive prices. However, the court found that the Central Government's action was not in compliance with the statutory provisions and rules, and the decision to revoke ADD without following the due process was arbitrary and illegal.

Conclusion:
The court quashed and set aside Notification No. 03/2020-Customs (ADD) dated February 2, 2020, and directed the Designated Authority to immediately initiate the sunset review process for the continuance or otherwise of the ADD already levied as per Notification No. 28/2019-Customs (ADD) dated July 24, 2019. The court further directed that the original Notification No. 28/2019-Customs (ADD) dated July 24, 2019, shall revive, and ADD shall become leviable on the product in question. The sunset review process shall be completed in accordance with the statutory provisions and rules.

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