TaxTMI 
TaxTMI 
2024 (5) TMI 82
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....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 therein to the extent it seeks to impose safeguard duty pursuant t....
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....ssed 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 Court in the case of Shree Chamundi Mopeds Ltd v. Church of South India Trust Association, (1992) 3 SCC 1. It is sub....
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....e 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 respondents had erroneously held that the support of ISMA would be a relevant component in determining whether the said producers constitute a major share of the total produ....
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....econd 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 tariff gets affected, the consumer interest comes in and the public interest gets affected. Reliance is placed on the judgment of the Apex Court in the case of All India Power Engineer Federation and others v. Sasan Power Limited and ....
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....g 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 finding and the impugned notification are otherwise illegal. 6. Learned Additional Solicitor General, in his usual lucid style, countered the submissions of learned counsel for the petitioners and put forth the following submissions: (i) Section 8B of the Customs Tariff Act, 1975 [for brevity, "t....
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....s 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 conclusion that the authority concerned was acting within the scope of its powers and had some material, however meagre, on which it could reasonably base its opinion, the Courts should not and will not interfere. (viii) In support of the proposition that the principles of natural justice is not required when the act is legislative in nature, reliance....
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....ry 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 special economic zone unless,- (i) specifically made applicable in such notifications or such impositions, as the case may be; or (ii) the article imported is either cleared as such into the domestic tariff area or used in the manufacture of any goods that are cleared into the domestic tariff area and in such cases safeguard duty shall be levied on that portion of the article so cleared or so used as was leviable when ....
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....le 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 if it is satisfied after conducting such enquiry, as it deems fit, that the article imported into India is in such increased quantities and under such conditions so as to cause or threatening to cause serious injury to the domestic industry. 12. The said section is circumscribed by a proviso. The proviso to the said section puts an embargo on the power of the Central Government under Section 8B(1) of the Act of 1975 from imposing a safeguard duty on an article originating from a developing country so long as the share of imports of that art....
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.... 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 key challenge faced by the Government of India in this has been that while India has done away with protectionism in the economic liberalization of 1990's, other countries like China had already developed industrial capacities far exceeding those of India. Moreover, with India joining the World Trade Organisation, India became bound by the norms of the WTO with some concessions meant for the developing world. 22. Challenge by China was mounted to a similar duty imposed by USA before the WTO, but the WTO has found the duty to be lawful. Moreover, while India ha....
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....stry. 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% of the market, ISMA had also supported the said industries. There were also other small manufactures supporting them. Though the support of ISMA would not have been a clinching factor, the same is also a fact relevant for consideration by the second respondent. 27. It is not that the decision of the authority while arriving at the final finding was not based on some substance. It has discussed about various materials before it and has delved into detail. In writ jurisdiction under Article 226 of the Constitution of India, we cannot sit as an appellate authority over th....
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....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 safeguard duty on 30.7.2018, during the subsistence of the order of interim injunction prohibiting the respondents from issuing the notification. The Supreme Court stayed the interim order of injunction passed by the Orissa High Court on 10.9.2018. 33. At the first instance, during the subsistence of the interim order of injunction, the first respondent ought not to have issued the impugned notification imposing safeguard duty. The interim order of injunction was in force up to 10.9.2018. The impugned notification cannot be operative during the subsistence of the interim order of inj....
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.... 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 during the subsistence of the prohibitory order, even after the prohibitory order was stayed by the superior court still the notification would be inoperative, cannot be comprehended. 41. The notification issued is legislative in character. The executive exercised the powers of delegated legislation. The notification, during the subsistence of the interim order of injunction, is certainly inoperative, but on and from the date the stay was granted by the Apex Court to the prohibitory order passed by the Orissa High Court, the notification will become operative and binding upon the parties. The Central ....