2025 (7) TMI 729 - HC - Customs

Anti-dumping duty challenge dismissed for lack of jurisdiction, sunset review upheld under Section 130E

M/s. PT. South Pacific Viscose Versus The Union of India, The Directorate General of Trade Remedies, The Association of Man-Made Fibre

Madras HC dismissed writ petitions challenging anti-dumping duty levy under Notification No.43/2016-Customs (ADD). Court held it lacked jurisdiction as ... Jurisdiction - forum shopping - Challenge to levy of Anti-Dumping Duty pursuant to Notification No.43/2016-Customs (ADD) dated 08.08.2016 - unilateral alteration of the Product under Consideration (PUC) by the domestic industry - Violation of Section 2A(5) of the Customs Tariff Act, 1975 and Rule 23 of the Anti-Dumping Rules - HELD THAT:- As per the decision of the Hon'ble Supreme Court in Kusum Ingots and Alloys Ltd. v. Union of India, [2004 (4) TMI 342 - SUPREME COURT (LB)], even in a given case, when the original authority is constituted at one place and the appellate authority is constituted at another, a Writ Petition would be maintainable at both the places - The Hon'ble Supreme Court observed that order of the appellate authority constitutes a part of cause of action and therefore a Writ Petition would be maintainable in the High Court within whose jurisdiction it is situate having regard to the fact that the order of the appellate authority is also required to be set aside and as the order of the original authority merges with that of the appellate authority. In the present case, not only all the respondents are outside the jurisdiction of this High Court but also the Appellate Tribunal which has passed the impugned order. A reading of Section 130E of the Customs Act, 1962 indicates that a statutory appeal is maintainable only before the Hon'ble Supreme Court against Order of the Appellate Tribunal herein, among other things, pertaining to determination of any question having a relation to the rate of duty of customs or value of the goods for the purpose of assessment - these Writ Petitions are liable to be dismissed as only the Hon'ble Supreme Court has jurisdiction to interfere with the impugned Final Orders. Even if these Writ Petitions were entertained as Civil Miscellaneous Appeal under Section 130 of the Customs Act, 1962 as per the Appellate Side Rules, they are liable to be dismissed in view of the embargo under Section 130(1) of the Customs Act, 1962. There is a specific embargo on this Court from entertaining a statutory appeal under Section 130 of the Customs Act, 1962 in respect of “rate of duty” of customs and “valuation”. Since in the present case, the 1st Sunset Review was initiated by the 2nd Respondent/Designated Authority on 22.07.2015, 3 days before the expiry of the five year period under Notification No.76/2010-Customs (ADD) dated 26.07.2010, the levy continued vide Notification No. 37 of 2015 Customs (ADD) dated 06.08.2015 cannot be held to be contrary to the law settled by the Delhi High Court as affirmed by the Hon’ble Supreme Court in Kumho Petrochemicals Company Limited Vs. Union of India [2017 (6) TMI 526 - SUPREME COURT] - Merely because there was a hiatus of 11 days between 25.07.2015 and 06.08.2015 i.e., between the end of the 1st five years period under Notification No.76/2010-Customs (ADD) dated 26.07.2010 and levy imposed for a further period of one year vide Notification No.37 of 2015 Customs (ADD) dated 06.08.2015 pending Final Finding of the 2nd Respondent/Designated Authority which was initiated on 22.07.2015, will not mean, that the levy continued vide Notification No.37 of 2015 Customs (ADD) dated 06.08.2015 was without the authority of law and contrary to Art.265 of the Constitution of India. Petition dismissed. Issues Presented and Considered1. Whether the Final Orders dated 19.05.2022 passed by the Principal Bench of CESTAT, New Delhi in various Anti-Dumping Appeals, including those filed by the Petitioner and others, are liable to be quashed.2. Whether the initiation and conduct of the Sunset Reviews by the Designated Authority and the consequent Notifications issued by the Central Government extending or rescinding Anti-Dumping Duties (ADD) on Viscose Staple Fibre (VSF) imported from Indonesia and other countries were in accordance with law.3. Whether the levy and extension of Anti-Dumping Duty notifications, particularly Notification No.37/2015-Customs (ADD) dated 06.08.2015 and Notification No.43/2016-Customs (ADD) dated 08.08.2016, were valid despite gaps between expiry and re-imposition.4. Whether the alteration of the Product Under Consideration (PUC) by the domestic industry during Sunset Reviews without providing opportunity to other stakeholders violated principles of natural justice and statutory provisions.5. Whether the Writ Petitions filed before the Madras High Court challenging orders passed by the Appellate Tribunal at New Delhi are maintainable or barred by jurisdiction and statutory remedies.6. Interpretation and applicability of Section 9A(1) and Section 9A(5) of the Customs Tariff Act, 1975, especially the provisos relating to the imposition, extension, and cessation of Anti-Dumping Duties.7. Whether the decisions of the Hon'ble Supreme Court and various High Courts, especially in Union of India Vs. Kumho Petrochemicals Company Limited, were correctly applied or misinterpreted by the parties and the Tribunal.Issue-wise Detailed AnalysisIssue 1 & 5: Jurisdiction and Maintainability of Writ PetitionsLegal Framework and Precedents: The Customs Act, 1962, particularly Sections 130 and 130E, governs appeals against orders of the Appellate Tribunal. The Supreme Court's decisions in Kusum Ingots and Alloys Ltd. v. Union of India and other cases establish that writ petitions challenging orders of the Appellate Tribunal are maintainable only in courts having jurisdiction over the Tribunal or the parties. The doctrine of forum conveniens also applies.Court's Reasoning: The impugned orders were passed by the Principal Bench of CESTAT, New Delhi. None of the respondents or the Tribunal fall within the territorial jurisdiction of the Madras High Court. The Court held that the Petitioner's approach to this Court constituted forum shopping. The appropriate forum was the Delhi High Court or the Supreme Court under Section 130E. The Court relied on the principle that the appellate authority's order forms part of the cause of action, and jurisdiction lies where the appellate authority is situated.Conclusion: The Writ Petitions are not maintainable before the Madras High Court and are liable to be dismissed on grounds of jurisdiction and availability of alternate statutory remedies.Issue 2, 3 & 6: Validity of Sunset Review Initiations, Notifications, and Extensions of Anti-Dumping DutyLegal Framework and Precedents: Section 9A(1) authorizes imposition of Anti-Dumping Duty not exceeding the margin of dumping upon importation. Section 9A(5) provides that such duty shall cease after five years unless extended by the Central Government after a review if cessation would likely lead to continuation or recurrence of dumping and injury. The first proviso allows extension for five years; the second proviso allows continuation for up to one year pending review. Rule 23 of the Anti-Dumping Rules governs sunset reviews.The Supreme Court in Union of India Vs. Kumho Petrochemicals Company Limited clarified that Anti-Dumping Duty notifications are temporary and can only be extended during the lifetime of the original notification. Extensions after expiry without a valid review initiated before expiry are invalid. The continuation of duty is not automatic; issuance of a fresh notification is mandatory. The duty may continue for a maximum of one year pending review, but if review is not completed within that period, duty lapses until fresh notification is issued.Court's Interpretation and Reasoning: The Court examined the timeline of notifications and reviews in the present case. The initial levy was imposed by Notification No.76/2010-Customs (ADD) dated 26.07.2010 for five years, expiring on 25.07.2015. The first Sunset Review was initiated on 22.07.2015, before expiry. The Central Government issued Notification No.37/2015-Customs (ADD) dated 06.08.2015 extending the duty for one year pending review. The final finding was issued on 08.07.2016 recommending continuation for five years, leading to Notification No.43/2016-Customs (ADD) dated 08.08.2016. The Court noted a minor hiatus between expiry and extension notifications but held that such gaps are immaterial if the review was initiated before expiry, consistent with the Supreme Court's ruling in Kumho Petrochemicals.The Court rejected the Petitioner's contention that the gap invalidated the extension, emphasizing that the sunset review's timely initiation legitimizes the extension notwithstanding delays in notification issuance. The Court also referred to decisions like Tangshan Sanyou Group Hong Kong International Trade Co. Ltd. v. Union of India, which upheld continuation when review is validly initiated.Application of Law to Facts: The facts showed that the sunset reviews were initiated timely, and notifications extending or rescinding duties were issued in compliance with statutory provisions and judicial precedents. The final findings of the Designated Authority and notifications by the Central Government were consistent with the legal framework.Treatment of Competing Arguments: The Petitioner argued that the notifications extending duties post-expiry were invalid due to lack of continuity and procedural lapses. The Court found these arguments based on a selective and distorted reading of precedents, emphasizing that the law permits such extensions if the sunset review is initiated before expiry. The Respondents' contentions, supported by Supreme Court rulings, were accepted.Conclusion: The levy and extension of Anti-Dumping Duties through the impugned notifications were valid and lawful. The minor hiatuses did not vitiate the notifications. The Court upheld the continuation and rescission of duties as per the sunset review findings.Issue 4: Alteration of Product Under Consideration (PUC) and Procedural FairnessLegal Framework and Precedents: Section 2A(5) of the Customs Tariff Act and Rule 23 of the Anti-Dumping Rules require that the scope of investigation and product under consideration be clearly defined and that all interested parties be given an opportunity to comment on changes. Principles of natural justice mandate that no party be denied the right to be heard.Court's Reasoning: The Petitioner contended that the domestic industry unilaterally narrowed the PUC during sunset reviews, excluding various types of VSF without affording other parties an opportunity to comment, violating procedural fairness and statutory provisions. The Court noted these submissions but did not find sufficient merit to interfere, particularly as the Appellate Tribunal had examined the issue and directed re-examination where necessary.Key Findings: The Court observed that the Appellate Tribunal had allowed the designated authority to reexamine the issue of cessation of duty and injury in light of the altered PUC. The Court did not find conclusive evidence of violation of procedural fairness warranting interference at writ stage.Conclusion: No interference was warranted on this ground in the writ jurisdiction. The issue was left to be addressed in the statutory proceedings before the Designated Authority and Tribunal.Issue 7: Interpretation and Application of Supreme Court DecisionsLegal Framework and Precedents: The Supreme Court decisions in Union of India Vs. Kumho Petrochemicals Company Limited, Automotive Tyre Manufacturers Association Vs. Designated Authority, and others provide authoritative interpretation of Sections 9A(1) and 9A(5) of the Customs Tariff Act, 1975, emphasizing the temporary nature of Anti-Dumping Duty notifications, the necessity of timely sunset reviews, and the requirement of fresh notifications for extensions.Court's Interpretation and Reasoning: The Court carefully examined the Petitioner's reliance on these decisions and found that the Petitioner had selectively quoted and misapplied the law. The Court reiterated that the key principle is that sunset reviews must be initiated before expiry of the original notification for extensions to be valid. The Court held that the present case complied with these requirements and thus the impugned notifications and orders were consistent with the Supreme Court's rulings.Application of Law to Facts: The Court found that the initiation of sunset reviews before expiry and the subsequent issuance of notifications extending or rescinding duties were in conformity with the legal principles laid down by the Supreme Court.Conclusion: The Petitioner's arguments based on the Supreme Court's decisions were rejected as misconceived and incorrect.Significant Holdings'Sub-section (5) of Section 9-A gives maximum life of five years to the imposition of anti-dumping duty by issuing a particular notification. Of course, this can be extended by issuing fresh notification. However, the words 'unless revoked earlier' in sub-section (5) clearly indicate that the period of five years can be curtailed by revoking the imposition of anti-dumping duty earlier. ... However, it cannot be said that the duty would automatically get continued after the expiry of five years simply because review exercise is initiated before the expiry of the aforesaid period. It cannot be denied ... that issuance of a notification is necessary for extending the period of anti-dumping duty.''The anti-dumping duty may continue, pending the outcome of the review, for a further period not exceeding one year. ... If the review exercise is not completed within one year, the effect of that would be that after the lapse of one year there would not be any anti-dumping duty even if the review is pending.''A minor hiatus between expiry of the original notification and issuance of extension notification is immaterial if the sunset review is initiated before the expiry of the original notification.''Writ Petitions challenging orders of the Appellate Tribunal are not maintainable before a High Court outside the Tribunal's territorial jurisdiction, especially when statutory remedies under the Customs Act exist.''Alteration of Product Under Consideration during sunset reviews must comply with statutory provisions and principles of natural justice, but such issues are to be addressed in statutory proceedings rather than writ jurisdiction.'Final Determinations on Each Issue1. The Writ Petitions filed before the Madras High Court challenging the CESTAT orders are dismissed on grounds of jurisdiction and availability of alternate statutory remedies.2. The initiation of Sunset Reviews and issuance of notifications extending or rescinding Anti-Dumping Duties on Viscose Staple Fibre were valid and in accordance with law, as the reviews were initiated before expiry of the original notifications.3. Minor gaps between expiry and extension notifications do not invalidate the levy of Anti-Dumping Duty where the sunset review was timely initiated.4. The Petitioner's challenge to unilateral alteration of Product Under Consideration lacked sufficient merit for interference at this stage.5. The Supreme Court's decisions in Kumho Petrochemicals and related cases were correctly applied by the Tribunal and the Central Government in the present case; the Petitioner's contrary submissions were rejected.6. The impugned Final Orders of the Appellate Tribunal dated 19.05.2022 are upheld, and the Writ Petitions are dismissed accordingly.