TaxTMI 
TaxTMI 
2019 (9) TMI 539
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....rea, European Union, South Africa, Tiwan, Thailand and USA^The Subject Countries. The Designated Authority initiated anti-dumping investigation on imports of the PUI on 19 February, 2016 and issued the final findings on 18 August, 2017 recommending extension of existing anti-dumping duty imposed by customs notification dated 11 December 2015 also on the PUI from the date of notification to be issued by the Ministry of Finance. The Ministry of Finance issued the consequent notification dated 24 October 2017 and imposed anti-dumping duty on the PUI also from the date of publication of the notification. The Appellant is aggrieved by the final findings notified by the Designated Authority and the consequent notification no. 52/2017 issued by the Ministry of Finance to the extent anti-dumping duty has been imposed on the PUI from the date of publication of the notification on 24 October, 2017 and not retrospectively from the date of initiation of the anti-circumvention proceedings on 19 February, 2016. 2. The Domestic Industry had earlier filed an application under Rule 5 of the Customs Tariff (Identification, Assessment and Collection of Anti-Dumping Duty on Dumped Articles and for ....
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.... characteristics of the product earlier subjected to anti-dumping duty except for the width. The findings of the Designated Authority on this issue are reproduced below: "The Product under Investigation alleged to be circumventing the anti-dumping duties is Cold-rolled Flat products of stainless steel of the same description as the Product under Consideration defined above but having widths above those described and covered under the scope of the Product under Consideration. These products i.e. product under investigation are also classifiable under Chapter 72 of the Customs Tariff Act, 1975 under the same sub-heading 7219.31, 7219.32, 7219.33, 7219.34, 7219.35 and 7219.90 even though the Customs classification is indicative only and not binding on the scope of the investigation. The Authority notes that the product under investigation which is the subject matter of the alleged circumvention has all the essential and basic characteristics of the product subject to anti-dumping duties. The only difference is in terms of its width." 6. The Designated Authority, then determined the circumvention. After examination of the submissions made by the producers / exporters / impo....
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....erested parties who have been found to be circumventing the anti-dumping duties. In any case, the Authority needs to appreciate that extension of anti-dumping duties would not have any impact of genuine users in view of the specific exemption proposed by the Authority. Only those traders / users / importers who are involved in the act of circumvention shall be prevented from "gaining" from their malpractices. It is humbly submitted that such unscrupulous parties cannot be given any concession of any sort by the DGAD. iii. Attention is also invited to Rule 27 wherein it may be seen that while the law uses the term "may" for the date of levy, the apparent discretion is no longer available as soon as the condition precedent i.e., the existence of circumvention, is proved. The discretion, if any, also cannot be used arbitrarily. In any case, there is no reason whatsoever not to impose the duties from the date of initiation of the investigation in the facts and circumstances of this case." (emphasis supplied) 9. The other interested parties also submitted their post disclosure comments. 10. The Designated Authority examined and analysed the submissions made by the part....
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....ntions of the Domestic Industry and the interested parties, the Designated Authority concluded as follows: "Having examined the contentions of the Domestic Industry and various interested parties and on the basis of the analysis as above, the Authority concludes that: i. The Authority notes that imports of PUI i.e. "Cold-rolled Flat products of stainless steel of width greater than 1250 mm of all series not further worked than Cold rolled (cold reduced) with a thickness of up to 4 mm (width tolerance of +30 mm for Mill Edged and +4 mm for Trimmed Edged)", excluding: • Grades AISI 420 high carbon, 443, 441, EN 1.4835, 1.4547, 1.4539, 1.4438, 1.4318, 1.4833 and EN 1.4509. • Product supplied under India Patent No. 223848 in respect of goods comprising Low Nickel containing Chromium - Nickel Manganese-Copper Austenitic Stainless Steel and representing Grades YU 1 and YU 4, produced and supplied by M/s. Yieh United Steel Corp (Yusco) of Chinese Taipei (Taiwan)" have increased post levy of anti-dumping duty. ii. The value addition in converting PUI to PUC is less than the prescribed threshold in the Rule. iii. The PUI....
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....ate agencies." 13. The Central Government, thereafter, issued the notification dated 24 October, 2017 that was published in the Gazette of India Extraordinary on 11 December 2015. The Central Government imposed anti-dumping duty as specified in the Table on the import of subject goods from the date of publication in the Official Gazette upto 10 December, 2020. 14. Ms Meenakshi Arora, learned Counsel for the Domestic Industry submitted:- (i) In the context of retrospective levy, the Domestic Industry in the comments dated 16 August, 2017 to the disclosure statement had expressly pleaded for imposition of retrospective levy of anti-circumvention duties on following grounds: a. The Domestic Industry continued to suffer for 18 months since initiation of investigation because of established malpractice of circumvention of anti-dumping duties by exporters/importers etc. b. Imposition of prospective anti-dumping duty will only result in promoting the ulterior motive of imports/exporters to delay the extension of duties to PUI by delaying the investigation. The unscrupulous exporters/importers responsible for malpractice for circumvention will stand to furt....
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....scrupulous importers and exporters who, because of their pricing behaviour, cause injury to the Domestic Industry. To ensure that the object and purpose of levy is not frustrated through such circumventing methodologies, the legislature like other members of WTO introduced section 9A(1A) and Rules 25 to 28 in the 1995 Rules to prevent and control such circumvention. Once the circumvention has been established, and the Designated Authority recommends imposition of anti-dumping duty on PUI, it is obliged to exercise the powers and recommend retrospective levy of the same.; and (vii) Where a power is conferred to prevent circumvention and illegal overreach of anti-dumping duties, the duty to exercise such power for larger public purpose and benefit cannot be avoided. 15. Shri Naresh Thakkar, learned counsel for the Importer Outu Kumpu Oyi, however, submitted:- (i) It is the prerogative of the Central Government under section 9A (1A) of the Tariff Act to extend or not to extend the anti-dumping duty in cases of circumvention where the anti-dumping duty is being rendered ineffective. If the intention of the law was that in all cases of circumvention, anti-dumping du....
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.... Rules were to be accepted, then this would make part of Rule 27(3) otiose which cannot be permitted in law. Thus, Rule 27(1) of the 1995 Rules is required to be given a meaning in the context of its setting.; (v) The submission of the Domestic Industry that "may" is required to be read as "shall" in Rule 27(1) of the 1995 Rules and "Designated Authority is obliged to impose duty retrospectively" simply falls foul of the provision, as the Designated Authority does not have the power to levy duty at all, let alone levy it retrospectively. If this were to be accepted, then the entire Rule 27(3) of the 1995 Rules would become redundant.; (vi) It is settled law that the word "may‟ clearly indicates vesting of discretion. For this proposition reliance can be placed on the decision of the Madras High Court in ALM Enterprises vs Commissioner of Customs (Imports), Chennai 2017 (353) ELT 289 (Mad). It is also settled law that circumvention and evasion cannot be equated and for this proposition reliance can be placed on the decision of the Tribunal in Samay Electronics (P) Ltd. vs CC (Import) (General) Mumbai 2015 (328) ELT 238 (Tri-Mumbai). The Supreme Court in Commi....
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....which in the light of the timing and the volume of imported article dumped and other circumstances is likely to seriously undermine the remedial effect of the anti-dumping duty liable to be levied, the Central Government may, by notification in the Official Gazette, levy anti-dumping duty retrospectively from a date prior to the date of imposition of anti-dumping duty under sub-section (2) but not beyond ninety days from the date of notification under the sub-section, and notwithstanding anything contained in any law for the time being in force, such duty shall be payable at such rate and from such date as may be specified in the notification." 20. Section 9A (6) of the Tariff Act deals with margin of dumping for which the Central Government make rules and is reproduced below: "9A (6) The margin of dumping as referred to in sub-section (1) or sub-section (2) shall, from time to time, be ascertained and determined by the Central Government, after such inquiry as it may consider necessary and the Central Government may, by notification in the Official Gazette, make rules for the purposes of this section, and without prejudice to the generality of the foregoing, such rules....
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....duty is imported into India through exporters or producers or country not subject to anti-dumping duty, such exports shall be considered to circumvent the anti-dumping duty in force if the exporters or producers notified for the levy of anti-dumping duty change their trade practice, pattern of trade or channels of sales of the article in order to have their products exported to India through exporters or producers or country not subject to anti-dumping duty. Explanation- For the purposes of this sub-rule, it shall be established that there has been a change in trade practice, pattern of trade or channels of sales if the following conditions are satisfied, namely :- a) absence of a justification, economic or otherwise, other than imposition of anti-dumping duty; b) evidence that the remedial effects of the anti-dumping duties are undermined in terms of the price and or the quality of like products. Rule 26. Initiation of investigation to determine circumvention - 1) Except as provided herein below, the designated authority may initiate an investigation to determine the existence and effect of any alleged circumvention of the anti-dumping ....
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....e 26 or such date as may be recommended by the designated authority." 22. It would be seen that section 9A (1) of the Tariff Act empowers the Central Government to impose anti-dumping duty. Section 9A (1A) of the Tariff Act deals with circumvention of anti-dumping duty. It provides that if the Central Government is of the opinion that circumvention of anti-dumping duty has taken place whereby the anti-dumping duty imposed has been rendered ineffective by altering the description or the composition of the article, then it may extend the anti-dumping duty to such article. In exercise of the powers conferred under section 9A (6) of the Tariff Act, the Central Government framed Rules called the 1995 Rules. Rule 25 deals with circumvention of anti-dumping duty, while Rule 26 deals with initiation of investigation to determine circumvention. Rule 27 deals with determination of circumvention. It provides that Designated Authority, upon determination that circumvention of anti-dumping duty exists, may recommend imposition of anti-dumping duty to imports of articles found to be circumventing an existing anti-dumping duty and such levy may apply retrospectively from the date of initiation....
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....e supplemented by fresh reasons in the shape of affidavit or otherwise. Otherwise, an order bad in the beginning may, by the time it comes to court on account of a challenge, get validated by additional grounds later brought ,out. We may here draw attention to the observations of Bose J. in Gordhandas Bhanji (1) "Public orders, publicly made, in exercise of a statutory authority cannot be construed in the light of explanations subsequently given by the officer making the order of what he meant, or of what was in Ms mind, or what he intended to, do. Public orders made by public authorities are meant to have public effect and are intended to effect the actings and conduct of those to whom they are addressed and must be construed objectively with reference to the language used in the order itself." Orders are not like old wine becoming better as they grow older." 26. It will, therefore, not be appropriate to examine the order on the basis of reasons not contained in the final findings recorded by Designated Authority. The reasons contained in the order can only be seen, but as noticed above, no reasons are contained in final findings as to why the anti-circumvention duty a....
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....y by which the DA has arrived at its decision and made its recommendation, the parties to the proceedings cannot effectively exercise their right to appeal either before the Tribunal or this Court. This is contrary to the view taken by the Constitution Bench of this Court in S.N. Mukherjee's case." (emphasis supplied) 29. In Asstt. Commr. Commercial Tax Department v/s. Shukla & Brothers 2010 (254) ELT 6 (SC), the Supreme Court, again observed that the proceedings before the Designated Authority are quasi judicial in nature and reasons have to be recorded by the Designated Authority. The Supreme Court noticed that NIP computed by the Designated Authority was much lower than that computed by the Appellant but reasons for such variance and detailed conclusion had not been disclosed by the Designated Authority to the Appellant. It is for this reason that the Supreme Court observed that in the absence of knowledge of the consequences, grounds, reasons and methodology by which the Designated Authority arrived at this decision, the party to the proceedings cannot exercise its right of appeal, either before the Tribunal or before the Supreme Court. The observations of the Supreme....
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.... reasons in support of its conclusion because reasons assure that the discretion has been exercised by the decision maker on relevant grounds and by disregarding irrelevant considerations, also observed that recording of reasons operates as a valid restraint on any possible arbitrary exercise of quasi judicial power. In paragraph 51 of the judgement, the Supreme Court summarised the position of law and the said paragraph is reproduced below: "51. Summarizing the above discussion, this Court holds: (a) In India the judicial trend has always been to record reasons, even in administrative decisions, if such decisions affect anyone prejudicially. (b) A quasi-judicial authority must record reasons in support of its conclusions. (c) Insistence on recording of reasons is meant to serve the wider principle of justice that justice must not only be done it must also appear to be done as well. (d) Recording of reasons also operates as a valid restraint on any possible arbitrary exercise of judicial and quasi-judicial or even administrative power. (e) Reasons reassure that discretion has been exercised by the decision maker on relevant grou....
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....(o) In all common law jurisdictions judgments play a vital role in setting up precedents for the future. Therefore, for development of law, requirement of giving reasons for the decision is of the essence and is virtually a part of "Due Process". 31. Thus, it is clear from the aforesaid decisions of the Supreme Court that the principles of natural justice not only require the Designated Authority to grant an opportunity to the party to show cause but the order passed by the Designated Authority should also give reasons for arriving at conclusions and any violation of these two facets can vitiate the order. In the present case, the final findings do not give any reason. 32. It is seen that the Designated Authority, without examining whether the anti-dumping duty should be levied retrospectively from the date of initiation of the investigation, recommended that the anti-dumping duty will be applicable from the date of its notification by the Central Government. The Central Government issued the Notification No. 52/2017 that was published in the Gazette of India, Extraordinary on 24 October, 2017 imposing anti-dumping duty from the date of publication in the Gazette. The matter,....