TaxTMI 
TaxTMI 
2022 (7) TMI 1199
X X X X Extracts X X X X
X X X X Extracts X X X X
.... veering around "rate of duty" and its continued imposition, and therefore, an appeal against the impugned order would lie, if at all, with the Supreme Court, under the provisions of Section 130E(b) of the 1962 Act. Background: 4. Before proceeding further, it may be relevant to etch out the broad contours of the matter. 5. The record shows, that the appellant no.1 had via a notification dated 24.02.2006 initiated anti-dumping investigations concerning Ductile Iron Pipes [in short "DI Pipes"] originating in or exported from the People's Republic of China [hereafter referred to as "China"]. 6. Once the investigation was completed, appellant no.1 issued a final finding notification dated 23.08.2007, recommending imposition of antidumping duty [hereafter referred to as "ADD"] concerning DI Pipes originating in or exported from China. 7. Resultantly, appellant no.2 i.e., the Union of India (UOI), through the Ministry of Finance, issued a notification dated 14.09.2007, in line with the final findings returned by appellant no.1 via its notification dated 23.08.2007. 8. The first sunset review investigation concerning ADD imposed on imports of DI Pipes originating in or exported fro....
X X X X Extracts X X X X
X X X X Extracts X X X X
....y appellant no.1. 17. Based on an application i.e., misc. civil application no. 1 of 2018 in R/special civil application no. 12368 of 2018, moved by the respondent no. 1 (whereby, in substance, a direction was sought vis-à-vis appellant no.1, and the concerned Ministry, to the effect that they comply with the Court's order), as prayed, a specific order was passed on 08.10.2018 that compliance should be made. 18. It is at this stage, that appellant no.1 approached the Supreme Court, by way of a Special Leave Petition (SLP) i.e., SLP no. 7724-7725/2019. 18.1 On 15.03.2019, notice was issued, both in the SLP, as well as the interlocutory application accompanying the same. 19. During the pendency of the SLP, appellant no.1 carried out a sunset review and thus concluded, that continuation of ADD was not warranted. 19.1 This conclusion was arrived at by appellant no.1 via its final finding notification dated 01.04.2019. 20. The record shows, that respondent no.1 filed a fresh action i.e., R/Special civil application no. 6896/2019 in the Gujarat High Court. 20.1 The Gujarat High Court via order dated 03.05.2019, in the first instance, extended the validity of the ADD notific....
X X X X Extracts X X X X
X X X X Extracts X X X X
....was an aspect relating to the rate of duty, reference was made to Section 9A(1), read with clauses (a), (b) and (c),as also sub-section (5) and (6) of the Customs Tariff Act, 1975 [in short "CTA"]. 31. Besides the aforesaid provisions, reference was also made to Rule 4 of the 1995 Rules, to demonstrate the duties conferred on the Designated Authority [in short "DA"] i.e., appellant no.1. 31.1 In particular, emphasis was laid on the factors, that the DA would have to bear in mind, while making a recommendation to the Central Government, concerning the amount of ADD that could be imposed to remove the injury, having regard to the maximum amount fixed by the margin of dumping, the date of commencement, and the need to review continuance of ADD. 32. Our attention was also drawn to Rule17 of the 1995Rules, to demonstrate what all should form part of the final finding arrived at by the DA i.e., appellant no.1 33. Beside this, reference was also made to Rules 18 and 23 of the 1995 Rules, which concern the levy of ADD by the Central Government, and its review by the DA. 34. The argument was, that under Rule 17(1)(b), the DA recommends imposition of ADD, which is then, crystallized by ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n (5) of Section 9Aof the CTA (which adverts to sunset review), provides for the extension of the period of imposition of ADD for a further five years, it shows that review is intrinsically relatable to the imposition of the duty. 42. Sub-section (6) of Section 9A empowers the Central Government to frame rules, which may provide for how articles liable for imposition of ADD is to be identified, and the methodology by which export price, normal value and the margin of dumping of such articles is to be determined for assessment and collection of ADD. 43. In other words, the aforementioned provisions indicate, that sunset review is related to the determination of issues concerning the rate of duty or value of goods for the purposes of assessment. 44. In support of his submissions, Mr Ramesh Singh placed reliance on the judgment of a Division Bench of this Court in Commissioner of Service Tax v. ERNST & Young P. Ltd. (2014) 72 VST 51. 45. On the other hand, Mr Kirtiman Singh, who appears on behalf of the appellants, in rebuttal, contended that it is a settled legal position, that an appeal from the order of the Tribunal would be maintainable under Section 130E of the 1962 Act, as l....
X X X X Extracts X X X X
X X X X Extracts X X X X
...., it was contended, that the said judgment was noticed by a Division Bench of this Court in ERNST and Young, as also in a judgment, once again, by a Division Bench of this Court, in Commissioner of Service Tax v. M/s Delhi Gymkhana Club Ltd., 2009 SCC OnLine Del 2629. It was thus contended, that this Court has distinguished the judgment of the Supreme Court rendered in Naveen Chemicals. 49. Likewise, the submission was that the judgment rendered by this Court in Chandra Prabhu and the judgment of the Bombay High Court in Rishiroop would have no application to the facts, arising in the instant case. 49.1 Insofar as the judgment in Rishiroop was concerned, it was stated that the said judgment concerned maintainability of a writ petition, in the context of availability of a remedy by way of an appeal to the writ petitioner under Section 9-C of the CTA. This judgment, thus, was not concerned with the issue arising in the instant case. 50. While concluding the rejoinder, Mr Ramesh Singh had also suggested that the appeal is not maintainable, as it is not preferred either by the Principal Commissioner of Customs or the Commissioner of Customs. Analysis and Reasons: 51. Having heard ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... behalf of the domestic industry. 56.1 The only exception to this route, is provided in sub-rule (4) of Rule 5.This provision enables the DA to initiate suo motu investigation, based on the information received by the Commissioner of Customs appointed under the Act or from any other source, upon sufficient evidence being made available about subsistence of circumstances referred to in clause (b) of sub-rule (3) of Rule 5 i.e., that there is dumping, injury (where applicable) and causal link, where applicable, between such dumped imports and alleged injury to justify initiation of the investigation. 57. The applicant, who wishes to trigger an investigation, should meet the threshold provided in clause (a) of sub-rule (3) of Rule 5 and the explanation appended thereto. In other words, the applicants or those supporting the applicants seeking investigation should account for not less than 25% of the total production of the like article by the domestic industry. 57.1 The explanation to this said sub-rule provides, that the application shall be deemed to have been made by or on behalf of the domestic industry if it is supported by those domestic producers whose collective output cons....
X X X X Extracts X X X X
X X X X Extracts X X X X
....le 17 confers a discretion on the Central Government, in special circumstances, to extend the period of investigation by a further period of six months. 65. Clause (b) of sub-rule (1) of Rule 17 mandates, that the DA's recommendation contained in its final findings should advert to the amount of duty, which if levied, would remove the injury where applicable, to the domestic industry. 66. It is based on such recommendation, that the Central Government "may" impose ADD on articles covered by the DA's final findings, with the limitation that the ADD cannot exceed the margin of dumping determined by the DA under Rule 17. 67. The review, concerning the imposition of ADD, is provided in sub-section (5) of Section 9A of the CTA, read with Rule 23 of the Rules. The review can be carried out by the DA, either on its own initiative or upon a request being made in that behalf by an interested party under sub-rule (1A) of Rule 23 of the 1995 Rules. 67.1 Upon such occurrence, the DA may recommend to the Central Government, that ADD may be withdrawn, where it concludes that injury to the domestic industry is not likely to continue or recur if ADD is removed or varied and therefore is no....
X X X X Extracts X X X X
X X X X Extracts X X X X
....efore it can recommend to the Central Government, the amount of ADD which is to be imposed in a given case. It is, to our minds, a decision, which is industry-specific, being a remedial measure, that, the Central Government may take to preserve the interests of the domestic industry. 71.1 The ADD, being a trade remedial measure, in contradiction to the imposition of customs duty, has leeway with regard to the quantum or the rate at which anti-dumping duty may be imposed by the Central Government. The Central Government, based on the recommendation of the DA, as reflected in its final findings, can decide upon the imposition of the rate or quantum of ADD to be imposed, bearing in mind the cap stipulated under the provisions of CTA and the Rules. 71.2 Thus, the ADD that the Central Government can impose, cannot exceed the margin of dumping ascertained by the DA, which is the difference between the export price and the normal value of the dumped goods. 72. At the stage of sunset review, when ADD is already operable, the DA has to conclude, whether the injury is likely to continue or recur if ADD is removed or varied. In other words, the decision to withdraw ADD, while carrying out ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ext, that matters concerning exigibility to tax, were required to be dealt with by the Supreme Court, under Section 35L(b) of the CE Act. 76.2 Before this Court, the appellant i.e., the Commissioner of Service Tax [hereafter referred to as "revenue"] argued to the contrary. The revenue, thus, propounded a narrow construction of the exclusionary part, incorporated in section 35G(1) of the CE Act. The Court, however, repelled this view, and in our view rightly so, as according to it, the issues concerning chargeability and classification are matters, which were related to the rate of duty or value of goods for the purposes of assessment. 76.3 It was observed, that if service tax could not be levied or imposed under the charging provision, no tax would be payable. Such determination would have a direct or proximate nexus to the rate of tax, which would include nil tax, as the activity itself would not be chargeable to tax. In reaching this conclusion, the Court inter alia examined the ratio of the judgement of the Supreme Court in Naveen Chemicals, which adverted to the direct and proximate test, while ascertaining whether the issue was related to the determination of the rate of du....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... a particular or specific provision. This will be a reasonable and appropriate interpretation and will not cause or result in confusion or ambiguity regarding the appellate forum. The line between exagibility and rate of tax as propounded can be rather thin and superfluous in the present statutory context." 78. At the risk of repetition, it needs to be stated that on a close perusal of the issue, which arose for consideration in ERNST and Young, the Court, quite correctly, concluded that issues relating to chargeability and classification would be aspects, which have a direct and proximate nexus with the determination of issues relating to the rate of tax or value of goods for the purposes of assessment. 78.1 This is so, as noticed above, if the Court were to conclude, that the activity did not fall within the four corners of the concerned statute, no tax/duty would be leviable. Likewise, if an activity or the subject goods are so classified to fall in an entry, different from the one which the revenue propounds, more often than not, it would impact the rate of duty. Such a situation may also arise when one is dealing with an exemption notification. Its impact may lead to a situa....