TaxTMI 
TaxTMI 
2024 (5) TMI 82
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....volve common questions of law and to avoid rigmarole are decided by the common judgment. 2. It is propitious to refer to the prayers made in these writ petitions, which read thus: (i) In W.P. No. 20476 of 2018, the petitioner seeks issuance of a writ of certiorari to call for the records in the impugned notification No.1/2018 (SG), dated 30.07.2018 issued by the first respondent therein and quash the same as illegal, arbitrary, without authority of law and in complete contravention of the order dated 23.07.2018 of the High Court of Orissa in Writ Petition No. 12817 of 2018. (ii) In W.P. No. 20477 of 2018, the petitioner seeks issuance of a writ of certiorari to call for the records in the impugned final findings no. F.No.22/1/2018-DGTR, dated 16.7.2018 issued by the second respondent therein and quash the same as illegal, arbitrary, unconstitutional, without authority of law and in contravention of the Customs Tariff Act read with the Safeguard Duty Rules. (iii) In W.P. No. 20478 of 2018, the petitioner seeks issuance of a writ of certiorari to quash the order of self assessment vide impugned BOE No.7474159, dated 2.8.2018 issued by respondents 3 to 5 ....
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....nder: (i) The impugned notification is null and void and in defiance of the order of injunction passed by the Orissa High Court under its order dated 23.7.2018. Under the said order, the Orissa High Court prohibited the Union of India from issuing any notification under Rule 12 of the Customs Tariff (Identification and Assessment of Safeguard Duty) Rules, 1997 [for brevity, "the Rules of 1997"] without the leave of the court. In violation of the said injunction order, the Union of India proceeded to issue the notification dated 30.7.2018 levying safeguard duty under the aegis of Rule 12 of the Rules of 1997. The impugned notification, being in flagrant violation of the interim orders of the Orissa High Court, is non-est, null and void. (ii) The subsequent order of the Supreme Court dated 10.9.2018, whereby the Supreme Court directed that the interim order dated 23.7.2018 in I.A.No.10566 of 2018 passed by the High Court and further proceedings in W.P. (C) No.12817 of 2018 shall remain stayed, does not have the effect of reviving the impugned notification which is non-est, illegal and thereby a stillborn legislation. Reliance is placed on the judgment of the Apex Co....
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.... the imports made even after the order was passed by the Apex Court staying the order of the Orissa High Court. (ix) The initiation of investigation by the second respondent is predicated upon the existence of "serious injury" or "threat of serious injury" to the domestic industry. The existence of domestic industry, at whose behest the second respondent had assumed jurisdiction to conduct the entire investigation culminating in the recommendation of whether or not to levy safeguard duty, was a fundamental jurisdictional fact. Such jurisdictional fact has been erroneously assumed by the respondents on an erroneous application of law and fact as also a misapplication of law relating to anti-dumping to the proceedings under safeguard duty. (x) The second respondent held that two industries, i.e., Indosolar Limited and Jupiter Solar Power Limited, collectively account for 38% of the total domestic production in the Domestic Tariff Area (DTA). Further, the respondents held that support of ISMA rendered through the resolution of its Managing Committee with no opposition qualifies the two applicant units meeting the requirement of major share of Indian industry. The res....
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....ons were raised before the second respondent and specific instances were pointed out, where in the past, when the demand - manufacturing capacity gap was much lower, the levy was not held to be in public interest. The second respondent has ignored that the domestic demand was 28.46 times the capacity of the domestic industry. However, in the most perverse manner, the second respondent ignored the final finding and relied upon a 2009 finding in the case of Oxo, even though in that case, the capacity of domestic industry was 50% of demand, unlike the present case, where the domestic industry is only meeting 3.5%. (xiv) The second respondent also erroneously relied upon the 2013 order in the case of Sodium Nitrate. In that case, it was held that capacity of the domestic industry was adequate even though the utilization had reduced. However, in the present case, the capacity was certainly not adequate and the utilization had also increased from 48% to 85%. (xv) The aspect of public interest is vitiated on the ground that any increase in duties would translate into a direct increment to the power tariff thereby impacting the consumers at large. The moment electricity t....
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....ithdrawal of DCRS (14 Dec 2017 pursuant to mutual agreement between India and USA to demonstrate compliance with WTO Appellate Body's report on 16 Sep 2016 against India) is subsequent to the period of investigation 2014-15 to 2017-18 (up to September 2017 i.e. H1) during which imports had already happened. (b) DGTR's conclusion that India's commitments under the Paris Agreement led to India setting up a target of 100 GW solar grid connectivity is incorrect and does not qualify as an unforeseen development because India adopted the JNNSM pursuant to commitments under the UNFCCC and revised the solar grid connectivity target to 100 GW in 2015 under the JNNSM and not Paris Agreement, which was more than a year before India ratified the Paris Agreement in Oct 2016. (xxi) DGTR investigation period is 2014-2015 to 2017-2018, i.e., ten years after 2005. The imports increased not because of the GATT obligation, but because India adopted JNNSM in 2010 and subsequently demand for solar modules picked up in India. Indian manufacturing capacity was less than 10% of the demand in India, so the balance demand had to be met by imports. (xxii) The final find....
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.... and domestic production, to the disadvantage of the latter. This has hampered the DI's ability to compete and make and sell the PUC. The total domestic sales, the domestic demand, the imports, the domestic sales by the applicants/DI; and domestic sales by other Indian producers were all considered and a comparative study was made. (v) The domestic industry had made significant investment to cater to the domestic market and for backward integration. It must be protected against the sudden and sharp surge in imports. Further, the safeguard duty is not a quantitative restriction. (vi) The Court would not sit as an appellate authority over the decision taken by the second respondent and the notification issued by the government. (vii) Reliance is placed on the judgment of the Apex Court in the case of Narayan Govind Gavate and others v. State of Maharashtra and others, (1977) 1 SCC 133, to substantiate the submission that in case of formation of a subjective opinion, the presumption is in favour of the regularity of the order. The test would only be whether the authority concerned was acting within the scope of his power. Once the court comes to the conclusi....
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....the Official Gazette, exempt such quantity of any article as it may specify in the notification, when imported from any country or territory into India, from payment of the whole or part of the safeguard duty leviable thereon. (2)The Central Government may, pending the determination under sub-section (1), impose a provisional safeguard duty under this sub-section on the basis of a preliminary determination that increased imports have caused or threatened to cause serious injury to a domestic industry: Provided that where, on final determination, the Central Government is of the opinion that increased imports have not caused or threatened to cause serious injury to a domestic industry, it shall refund the duty so collected: Provided further that the provisional safeguard duty shall not remain in force for more than two hundred days from the date on which it was imposed. (2A) Notwithstanding anything contained in subsection (1) and sub-section (2), a notification issued under sub-section (1) or any safeguard duty imposed under sub-section (2), shall not apply to articles imported by a hundred per cent. export-oriented undertaking or a unit in a spe....
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.... safeguard duty. (6) For the purposes of this section,- (a) "developing country" means a country notified by the Central Government in the Official Gazette for the purposes of this section; (b) "domestic industry" means the producers - (i) as a whole of the like article or a directly competitive article in India; or (ii)whose collective output of the like article or a directly competitive article in India constitutes a major share of the total production of the said article in India; (c) "serious injury" means an injury causing significant overall impairment in the position of a domestic industry; (d) "threat of serious injury" means a clear and imminent danger of serious injury. (7) Every notification issued under this section shall, as soon as may be after it is issued, be laid before each House of Parliament." 10. It is beyond any cavil that the Central Government has the power to issue notification on the basis of the final finding arrived at by the second respondent for imposition of the safeguard duty. 11. Section 8B of the Act empowers the Central Government to impose safeguard duty on an article i....
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....afeguard duty. As referred to in Section 8B(1) of the Act of 1975, if the Central Government upon enquiry comes to the conclusion that there is a serious injury to the domestic industry and/or threat of serious injury exists, then it may impose the safeguard duty. 18. A "serious injury" has been defined under Section 8B(6)(c). Serious injury means an injury causing significant overall impairment in the position of a domestic industry. 19. A "threat of serious injury" as contemplated under Section 8B(6)(d) of the Act of 1975 means a clear and imminent danger of serious injury. 20. The import of solar cells and modules at a lower rate from countries like China and Malaysia was threatening the domestic market. The second respondent while arriving at the final finding has placed reliance on the facts and figures of the various years. Though the demand has increased because of the import at a lower rate, the supply could not be made by the domestic industry. To preserve and encourage the domestic industry is the policy of the government. 21. The Government of India has always endeavoured to promote domestic industry over imports for various fiscal and economic reasons. The k....
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....ease in the demand for the PUC in India in a short period of time has in part fuelled the surge in imports. The same was also unforeseen. The imports of the PUC were taking place at very low prices. There was a sudden and appreciable drop in the landed value of the imported PUC. The immediate impact of this has been that the domestic industry faced a drop in sales realization of their products. The surge in imports at consistently falling landed price changed the competitive relationship between imports and domestic production, to the disadvantage of the domestic industry. This hampered the domestic industry's ability to compete and make and sell the PUC. This change in the competitive relationship was entirely unforeseen. The authority has examined various parameters to assess whether or not the increased imports of the PUC during the POI have caused and / or are threatening to cause serious injury to the Domestic Industry. The total domestic sales, the domestic demand, the imports, the domestic sales by the applicants/DI; and domestic sales by other Indian producers were all considered and a comparative study was made. 26. Though the two domestic industries share only 38% ....
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....cation is a piece of a subordinate legislation, more particularly, when the said notification imposes the safeguard duty not in reference to a particular importer, exporter or a specific country. 30. The said legislation imposing safeguard duty is open to the scrutiny of the court. It can be declared invalid particularly on the grounds that the legislation is in (a) violation of the Constitution of India; (b) violation of the enabling Act; (c) contrary to the other statutory provisions or that it is so arbitrary that it cannot be said to be in conformity with the statute or Article 14 of the Constitution. In the case on hand, the impugned notification cannot be faulted on any of the aforesaid grounds. 31. This leads us to the next contention of the petitioners that the notification was issued during the subsistence of the order of injunction issued by the Orissa High Court and, as such, is non-est, void and inoperative. 32. The final finding was arrived at by the second respondent on 16.7.2018. The interim order of injunction was passed by the Orissa High Court in W.P. (Civil) No.12817 of 2018 on 23.7.2018. The notification was issued by the Central Government imposing saf....
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....urch of South India Trust Association, (1992) 3 SCC 1, the Apex Court observed that the stay of operation of an order only means that the order which has been stayed would not be operative from the date of the passing of the stay order and it does not mean that the said order has been wiped out from existence. 39. In the case of Ravi S.Naik v. Union of India, 1994 Supp (2) SCC 641, the High Court had stayed the operation of the order of disqualification passed by the Speaker. The Apex Court held that the effect of the stay of the order of disqualification was that with effect from 14.12.1990, the declaration that Bandekar and Chopdekar were disqualified from being members of Goa Legislative Assembly was not operative and, on the date of alleged split, it could not be said that they were not members of the Goa Legislative Assembly. 40. In the present case, though the interim order of injunction was in force when the notification was issued, the said order was stayed by the Apex Court on 10.9.2018 and on and from 10.9.2018, the notification would become operative, as the prohibitory order did not exist. The contention of the petitioners that as the notification was issued durin....