TaxTMI 
TaxTMI 
2021 (11) TMI 200
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....ietnam [the subject Countries], even though the designated authority, in its final findings notified on 25.08.2020, had recommended imposition of anti-dumping duty for a period of five years. The relief claimed in this appeal is for setting aside the Office Memorandum dated 14.12.2020 issued by the Ministry of Finance, Department of Revenue, Tax Research Unit in connection with the final findings dated 25.08.2020 notified by the designated authority. This memorandum states that the Central Government has decided not to impose any anti-dumping duty on the imports of the subject goods originating in or exported from the subject countries. A further relief that has been claimed is for issuance of a direction to the Central Government to issue a notification for imposition of anti- dumping duty, based on the recommendation made by the designated authority. 2. The records reveal that the appellant, as a domestic industry, had filed an application before the designated authority under the provisions of the Customs Tariff Act 1975 [the Tariff Act] and the Customs Tariff (Identification, Assessment and Collection of Anti-Dumping Duty on Dumped Articles and for Determination of Inj....
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.... conducted the investigation into dumping, injury and causal link in terms of the provisions laid down under the Rules and having established positive dumping margin as well as material injury to the domestic industry caused by such dumped imports, the Authority is of the view that imposition of definitive anti-dumping duty is required to offset dumping and injury. The Authority, therefore, considers it necessary to recommend imposition of anti-dumping duty on imports of subject goods from the subject countries in the form and manner described hereunder. 95. In terms of provision contained in Rule 4(d) & 17(i)(b) of the Rules, the Authority recommends imposition of anti-dumping duty equal to the lesser of margin of dumping and the margin of injury, so as to remove the injury to the domestic industry. Accordingly, definitive anti-dumping duty equal to the amount mentioned in Column 7 of the duty table below is recommended to be imposed for five (5) years from the dated of the Notification to be issued by the Central Government, on all imports of subject goods originating in or exported from subject countries." (emphasis supplied) 5. Rule 18 provides that t....
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.... In support of this contention, reliance has been placed on the decisions of the Supreme Court in Shri Sitaram Sugar Company Limited and Another vs. Union of India and Others [(1990) 3 SCC 223] , S.N. Mukherjee vs. Union of India [(1990) 4 SCC 594] and Indian Railway Construction Co. Ltd. vs. Ajay Kumar [(2003) 4 SCC 579]; and (iii) While exercising discretion under rule 18, the Central Government has necessarily to take into consideration the purpose for which anti-dumping duty is imposed, the provisions of the Tariff Act and the 1995 Anti-Dumping Rules as also the fact that the designated authority, after undertaking the elaborate procedure contemplated under the rules and after hearing all the interested parties, had made a positive recommendation to the Central Government for imposing anti-dumping duty. 8. Shri Rakesh Kumar, learned authorised representative of the Department appearing for the Central Government, however, supported the decision taken by the Central Government and made the following submissions: (i) The present appeal would not be maintainable under section 9C of the Tariff Act; (ii) It is the dis....
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.... to again inform respondent no's. 3, 4, 5 and 6 by email as well as by speed post that the appeal would be listed for hearing on 18.12.2021. The office has reported that speed post was sent to the said respondents on 10.09.2021 and the said respondents were also informed by email on 09.09.2021. However, no one has appeared on behalf of respondent no's 3, 4, 5 and 6. 12. The submissions advanced on behalf of the appellant, the designated authority and the Central Government have been considered. 13. The first issue that arises for consideration is as to whether the present appeal would be maintainable under section 9C of the Tariff Act. It would, therefore, be necessary to reproduce section 9C(1) of the Tariff Act and it is as follows: "9C. APPEAL (1) An appeal against the order of determination or review thereof regarding the existence, degree and effect of any subsidy or dumping in relation to import of any article shall lie to the Customs, Excise and Service Tax Appellate Tribunal constituted under section 129 of the Customs Act, 1962 (52 of 1962) (hereinafter referred to as the Appellate Tribunal)." 14. A perusal of the aforesaid sect....
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....the injury where applicable, to the domestic industry after considering the principles laid down in the Annexure III to rules. (2) The final finding, if affirmative, shall contain all information on the matter of facts and law and reasons which have led to the conclusion and shall also contain information regarding- (i) the names of the suppliers, or when this is impracticable, the supplying countries involved; (ii) a description of the product which issufficient for customs purposes; (iii) the margins of dumping established and a full explanation of the reasons for the methodology used in the establishment and comparison of the export price and the normal value; (iv) Considerations relevant to the injury determination; and (v) the main reasons leading to the determination." 17. Rule 18, as noticed above, provides that the Central Government may, within three months of the date of publication of the final findings by the designated authority under rule 17, impose by notification in the official gazette an anti-dumping duty. 18. It is, therefore, clear that a discretion is ves....
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....h Court examined the provisions of section 9C of the Tariff Act and observed that it refers to 'order of determination', as to the existence, degree and effect of any alleged dumping in relation to import of any article, which are exactly the areas of investigation and form the essence of the duties to be performed and order to be passed by the designated authority. In the case of negative opinion, the order passed is an 'order of determination' as it is the final order and no further 'determination' is required to be undertaken by the Central Government except a consequential order of withdrawal of provisional duty, if imposed, within 45 days of the final findings of the designated authority in terms of rule 18(4). The Delhi High Court also observed that the right to appeal should not be forfeited or abandoned unless the statute so states and can be inferred on reasonable and practical interpretation. The relevant paragraphs of the judgement of the Delhi High Court are reproduced below: "27. The CT Act uses the expression "Central Government'' and does not use the expression "Designated Authority". The term "Designated Authority" is not defined in the CT Act and not refer....
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....andate of the Rules. In case of negative opinion or termination of proceedings, the order passed is the "order of determination", as it is the final order passed by the Central Government and no further "determination" is required and necessary, except consequential order of withdrawal of provisional duty if imposed within 45 days of the final findings by the Designated Authority in terms of sub-rule (4) to Rule 18 of the Rules. 29. It is in this context, we would observe that while interpreting a provision conferring right to appeal, we have to read the said provision to effectuate the legislative purpose in a reasonable, practical and liberal manner as was held by the Supreme Court in CIT v. Ashoka Engineering Company, (1992) 194 ITR 645. Similarly, in Gopi Lal v. CIT, (1967) 65 ITR 477, the Punjab and Haryana High Court has held that statute pertaining to right to appeal should be given a liberal construction since it is remedial and the right to appeal should not be restricted or denied unless such a construction is unavoidable. Thus, the right to appeal conferred should not be forfeited or abandoned unless the statute so states and can be inferred on reasonable ....
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....e and ambit of the right to appeal under Section 9C of the CT Act. 40. The aforesaid reasoning would also take care and negate the argument that the "order of determination" referred to in Section 9C must be interpreted as the determination made by the Central Government on the question of imposition of duty and not the determination or decision of the Designated Authority which has given a negative opinion on imposition of duty. The Designated Authority when it acts and performs functions of the Central Government, is no different and distinct from the Central Government." (emphasis supplied) 21. It is, therefore, clear from the aforesaid discussion and the decisions of the Supreme Court that the present appeal would be maintainable under section 9C of the Tariff Act. 22. The contention advanced on behalf of the appellant regarding the determination made by the Central Government not to impose anti-dumping duty now needs to be examined. 23. The main submission advanced by the learned senior counsel for the appellant is that the determination made by the Central Government, as communicated in the Office Memorandum dated 14.12.2021,....
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....cial powers. 27. It is, therefore, not possible to accept the contention of the learned authorised representatives appearing for the Central Government that the functions performed by the Central Government under section 9A of the Tariff Act are legislative in nature. 28. A Constitution Bench of the Supreme Court in Shri Sitaram Sugar Mills Ltd. observed that any arbitrary action, whether in the nature of legislative or administrative or quasi-judicial exercise of power, is liable to attract the prohibition of article 14 of the Constitution. The relevant portion of the judgment is reproduced below: "46. Any arbitrary action, whether in the nature of a legislative or administrative or quasi-judicial exercise of power, is liable to attract the prohibition of Article 14 of the Constitution. As stated in E.P. Royappa v. State of Tamil Nadu & Anr., [1974] 2 SCR 348, "equality and arbitrariness are sworn enemies; one belongs to the rule of law in a republic while the other, to the whim and caprice of an absolute monarch." Unguided and unrestricted power is affected by the vice of discrimination: Mrs. Maneka Gandhi v. Union of India & Anr., [1978] 1 SCC 248 at 2....
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.... further the purpose of the legislation which confers the powers, since the Authority has to act in accordance with and within the limits of that legislation, its order can also be challenged if it is beyond those limits or is passed on grounds extraneous to the legislation or if there are no grounds at all for passing it or if the grounds are such that no one can reasonably arrive at the opinion or satisfaction requisite under the legislation. In any one of these situations it can well be said that the authority did not honestly form its opinion or that in forming it, it did not apply its mind to the relevant facts".. In Renusagar [(1988) 4 SCC 59: AIR 1988 SC 1737], [1988] 4 SCC 59, 104, Mukharji, J., as he then was, states: "The exercise of power whether legislative or administrative will be set aside if there is manifest error in the exercise of such power or the exercise of the power is manifestly arbitrary. Similarly, if the power has been exercised on a non-consideration or non- application of mind to relevant factors the exercise of power will be regarded as manifestly erroneous. If a power (whether legislative or administrative) is exercised on the basis ....
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....ed with the Court in taking this view are that the requirement of recording reasons would (i) guarantee consideration by the authority; (ii) introduce clarity in the decisions; and (iii) minimise chances of arbitrariness in decision making. In this regard a distinction has been drawn between ordinary Courts of law and tribunals and authorities exercising judicial functions on the ground that a Judge is trained to look at things objectively uninfluenced by considerations of policy or expediency whereas an executive officer generally looks at things from the standpoint of policy and expediency. 36. Reasons, when recorded by an administrative authority in an order passed by it while exercising quasi- judicial functions, would no doubt facilitate the exercise of its jurisdiction by the appellate or supervisory authority. But the other considerations, referred to above, which have also weighed with this Court in holding that an administrative authority must record reasons for its decision, are of no less significance. These considerations show that the re- cording of reasons by an administrative authority serves a salutary purpose, namely, it excludes chances of arbitrariness a....
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....med Khan [2011 (273) ELT 345 (SC)], the Supreme Court, after referring to the earlier decisions that hold that a quasi judicial authority must record 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 ....
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....29 and Anya v. University of Oxford, 2001 EWCA Civ 405, wherein the Court referred to Article 6 of European Convention of Human Rights which requires, "adequate and intelligent reasons must be given for judicial decisions". (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". 32. What transpires from the aforesaid decisions of the Supreme Court is that:- (i) Requirement to record reasons should govern decisions of an authority exercising quasi-judicial functions, though the extent and nature of the reasons would depend on the particular facts and circumstances; (ii) Reasons should be clear and explicit so as to indicate that the authority has given due consideration to the points of controversy. Discretion, when vested in an authority, has to be excised in a judicious manner and the reasons for exercising discretion must be cogent and convincing and must appear on the face of the record. Discretion must also be exercised in accordance wit....
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....jury is based; (v) the address to which representations by interested parties should be directed; and (vi) the time-limits allowed to interested parties for making their views known. (2) A copy of the public notice shall be forwarded by the designated authority to the known exporters of the article alleged to have been dumped, the Governments of the exporting countries concerned and other interested parties. (3) The designated authority shall also provide a copy of the application referred to in sub-rule (1) of Rule 5 to - (i) the known exporters or to the concerned trade association where the number of exporters is large, and (ii) the governments of the exporting countries: Provided that the designated authority shall also make available a copy of the application to any other interested party who makes a request therefor in writing. (4) The designated authority may issue a notice calling for any information, in such form as may be specified by it, from the exporters, foreign producers and other interested parties and such information shall be furnished by such persons in writin....
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....y. - (1) In the case of imports from specified countries, the designated authority shall record a further finding that import of such article into India causes or threatens material injury to any established industry in India or materially retards the establishment of any industry in India. (2) The designated authority shall determine the injury to domestic industry, threat of injury to domestic industry, material retardation to establishment of domestic industry and a causal link between dumped imports and injury, taking into account all relevant facts, including the volume of dumped imports, their effect on price in the domestic market for like articles and the consequent effect of such imports on domestic producers of such articles and in accordance with the principles set out in Annexure II to these rules. (3) The designated authority may, in exceptional cases, give a finding as to the existence of injury even where a substantial portion of the domestic industry is not injured, if- (i) there is a concentration of dumped imports into an isolated market, and (ii) the dumped articles are causing injury to t....
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....ted authority, therefore, in such circumstances recommended the imposition of anti-dumping duty. 43. The final findings of the designated authority were communicated to the Central Government. The Office Memorandum dated 14.12.2020 mentions, in connection with the final findings dated 25.08.2020, that the Central Government has decided not to impose anti-dumping duty. No reasons have been recorded as to why the Central Government decided not to impose anti-dumping duty. No doubt a discretion vested with the Central Government to either accept or not accept the final findings of the designated authority, but that discretion was required to be exercised in a judicious manner by a reasoned order in accordance with the principles laid down by the Supreme Court in S. N. Mukherjee, Shri Sitaram Sugar Mills Ltd., Hindustan Tin Works and Kranti Associations. Recording of reasons assumes more importance in the present case, because of the fact that the Tariff Act and the 1995, Anti-Dumping Rules under which such a discretion is required to be exercised by the Central Government, themselves provide for a detailed analysis of host of factors for imposition of anti-dumping duty. The d....