AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2021 (11) TMI 200
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....gh 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 Injury) Rules, 1995 [the 1995 Anti-Dumping Rul....
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....d 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 the Central Government may, within three months of the date of publication of final findings by the designat....
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....f 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 discretion of the Central Government under rule 18 to impose or not to impose anti-dumping duty even if the designated authority had made a recommendation to the Central Government f....
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....id 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 section would indicate that an appeal would lie to the Tribunal against the order of determination regarding the existence, degree and effect of any dumping in relation to import of any article. It has, therefore, to be see....
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.... 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 vested in the Central Government to either impose anti-dumping duty or not impose anti- dumping duty. In the present case, an Office Memorandum dated 14.12.2020 was issued in connection with the final findings of the designated authority notified on 25.08.2020 and it states that the Central Government has decided not to impose....
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....d 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 referred to in the Sections to CT Act. The expression "Designated Authority" is to be found and defined in the Rules. As noticed above, the Designated Authority is a person not below the rank of the Joint Secretary to the Government of India or such other person as Government thinks fit and designated as a "Designated Authority" by notification in ....
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....gs 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 and practical interpretation. xxxxxxxxxxx 36. Section 9C does not state and provide that an appeal is maintainable against customs notification. However, it refers to and states that an appeal would lie against the "order of determination" regarding existence, degree and effect of dumping. The words "existence, degree and effect of dumping" are si....
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....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, deserves to the set aside for the sole reason that it is not only arbitrary and against the principles of natural justice, but the order does not even disclose any reason as to why the Central Government decided to reject the recommendation made by the designated authority for imposition of anti-dumping duty and determine that anti-dumping duty was not required to be imposed. 24. Section 9A(1) of t....
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....r 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 293-294. The principle of equality enshrined in Article 14 must guide every state action, whether it be legislative, executive, or quasi- judicial: Ramana Dayaram 'Shetty v. The International Airport Authority of India & Ors., [1979] 3 SCR 1014 at 1042; Ajay Hasia & Ors. v. Khalid Mujib Sehravardi & Ors.. [1981] 1 SCC 722 and D.S. Nakara & Ors. v. Union of India 47. Power delegated by statute is limited by its term....
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.... 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 of facts which do not exist and which are patently erroneous, such exercise of power will stand vitiated". 52. The true position, therefore, is that any act of the repository of power, whether legislative or administrative or quasi-judicial, is open to challenge if it is in conflict with the Constitution or the governing Act or the general principles of the law of the land or it is so arbitrary or unreasonable that no fair minded authority could ever have made it" (emphasis supplied....
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....utive 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 and ensures a degree of fairness in the process of decision-making. The said purpose would apply equally to all decisions and its application cannot be confined to decisions which are subject to appeal, revision or judicial review. In our opinion, therefore, the requirement that reasons be recorded should govern the decisions of an administrative authority exercising quasi-judicial functions irrespective of the fact whether the decision is subject to appeal, revision or judicial review. It may, however, be added that....
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....osition 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 grounds and by disregarding extraneous considerations. (f) Reasons have virtually become as indispensable a component of a decision making process as observing principles of natural justice by judicial, quasi-judicial and even by administrative bodies. (g) Reasons facilitate the process of judicial review by superior Courts. (h) The ongoing judicial trend in all countries comm....
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....hority 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 with the rules of reason and justice and should not be arbitrary, vague and fanciful; (iii) The principle of equality enshrined in article 14 of the Constitution must guide every State action while exercising quasi-judicial powers; (iv) The power, if exercised on non consideration or non application of mind to relevant factors, will be regarded as erroneous exercise of power; and (v) An authority has to act in accordance with and within the limits of the legislation with confers power on the authority to act. 33. Anti-dumping duty is imposed by the Central Government under section 9A of the Tariff Act. It provides that when any ....
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....s: 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 writing within thirty days from the date of receipt of the notice or within such extended period as the designated authority may allow on sufficient cause being shown. Explanation: For the purpose of this sub-rule, the notice calling for information and other documents shall be deemed to have been received one week from the date on which it was sent by the designated authority or transmitted to the appropriate diplomatic representative of the exporting country. (5) The designated authority shall also provide opportunity to the industrial users of the article under investigation, and to representative consumer organizationsin cases where the article is commonly sold at the retail level, to furnish information which is relevant to the investigation regarding dumping....
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.... (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 the producers of all or almost all of the production within such market." 36. Rule 17 deals with final findings and rule 18 deals with levy of duty. 37. Annexure-I to the 1995, Anti-Dumping Rules deals with the principles governing the determination of normal value and export price and margin of dumping. It provides that the designated authority while determining the normal value, export price and margin of dumping shall take into account the principles contained in clauses (1) to (8) of the Annexure. 38. Annexure-II to the said Rules deals with the principles for determination of injury. It provides that the designated authority while determining the injury or threat of material injury to domestic industry or material retardation of the establishment of such an industry, and causal link between dumped imports and such injury, shall inter al....
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....rtance 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 designated authority had, after a detailed analysis, arrived at a conclusion that anti- dumping duty was required to be imposed and accordingly made a recommendation to the Central Government. It was, therefore, necessary for the Central Government to have examined all the relevant aspects necessary for deciding whether anti-dumping duty was required to be imposed or not and deal with the findings recorded by the designated authority, if the Central Government was to take a view different from the view expressed in the recommendation made by the designated authority. Recording of reasons, therefore, is a must if the Central Government decides not to follow the recommendation made by the designated authority. It is also necessary for the Central Government to record reasons in such a situation because an appeal lies to the Tribunal against the determination made by the Central Government. 44. ....