TaxTMI 
TaxTMI 
2024 (5) TMI 287
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....August 2022, whereby, in exercise of powers conferred in sub-sections (1) and (5) of Section 9A of the Customs Tariff Act, 1975 (for the shorts, "the Act") read with Rules 18, 20 and 23 of the Customs Tariff (Identification, Assessment and Collection of Anti-dumping Duty on Dumped Articles and for Determination of Injury), Rules, 1995 (for short, "the Rules"), the respondent No. 1 Central Government has decided not to accept the findings of the Designated Authority in respect of levy of anti-dumping duty with regard to Textured Toughened (Tempered) Glass. The final findings of the Designated Authority were submitted to the Central Government in respect of sunset review investigation for levy of anti-dumping duty concerning the imports of Textured Tempered Coated and Uncoated Glass originating in or exported from China PR. [3] The petitioner company has set up a company at village Govali, District Bharuch for manufacturing sheet glass and various varieties of glass in the year 1994. [4] The petitioner commenced commercial production of a special variety of glass namely "Textured Toughened (Tempered) Glass with a minimum 90.5% transmission and having thickness not exceeding 4.2....
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.... dumping of the subject goods from China still continued and such dumping was likely to increase when anti-dumping duty would cease after five years, the petitioner made an application under Rule 23(1B) of the Rules read with Section 9A(5) of the Act to extend the period for levy of anti-dumping duty because cessation of the same for subject goods was likely to lead to continuation or recurrence of dumping and injury to the domestic industry. [8] The Designated Authority issued a Notification dated 7th June 2021 initiating sunset review investigation and invited response, objections and submissions with data and evidence from all the interested parties. [9] The Designated Authority conducted investigation pursuant to the sunset review investigation Notification during the months of August, September, 2021 to April 2022 allowing hearing to all the interested parties, who all participated in the investigation and submitted their evidence, data etc. [10] The Designated Authority published the final findings on 13th May 2022 by issuing a Notification wherein it concluded that the subject goods continued to be exported from China to India at prices below the normal value, resul....
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....ication No. 38/2017-Cus (ADD) dated 18th August 2017 has come to an end on 18th August 2022 and the petitioner company, which is a domestic manufacturing company of the subject goods, is without any protection from large scale dumping of the subject goods from China PR. [13.2] It was submitted that the subject goods continued to be exported to India at a price below normal value resulting into continued dumping and the domestic industry had been consistently suffering losses due to price effect of the dumped import from China PR and also imports coming from related company of one of the Chinese company in Malaysia. [13.3] It was, therefore, submitted that respondent No. 1 has unreasonably and arbitrarily decided not to accept the recommendations of the Designated Authority resulting into grave injury and irrepairable loss to be suffered by the petitioner as a result of the continued dumping of the subject goods and the petitioner would not be in a position to sustain and continue their manufacturing activity in respect of the subject goods without protection of the anti-dumping duty for nullifying the margin of dumping to a certain extent in respect of imports of the subject ....
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....ject goods, the respondent No. 1 could not have issued a memorandum by not accepting the recommendations of the Designated Authority without assigning any reason. [13.6] Learned advocate Mr. Dave invited the attention of this Court to Rule 3 of the Rules, which provides for appointment of the Designated Authority. It provides that the Central Government by Notification, in Official Gazette, to appoint a person not below the rank of a Joint Secretary to the Government of India or such other person as that the Government may think fit. Referring to Rule 4 of the Rules which stipulates the duties of the Designated Authority, it was submitted that it is the duty of the Designated Authority to submit its findings, provisional or otherwise to the Central Government as to normal value, export price and the margin of dumping in relation to the article under investigation and the injury or threat of injury to an industry established in India and to recommend to the Central Government the amount of antidumping duty and the date of commencement of such duty to review the need for continuance of anti-dumping duty. It was, therefore, submitted that the respondent No. 2 - Designated Authority....
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....s passed accepting the final recommendations of the Designated Authority, the same cannot be challenged before the CESTAT. It was, therefore, submitted that the Central Government, in the impugned Office Memorandum, without assigning any reason or ground, not accepting the final recommendations of the Designated Authority, has deprived the petitioner from challenging the same before the CESTAT. [13.8] Referring to and relying upon the above case law, it was submitted that the matter may be remanded back to the respondent No. 1 to give an opportunity of hearing to the petitioner and thereafter, to pass a detailed reasoned order for not accepting the recommendations of the Designated Authority. [14] On the other hand, learned senior advocate Mr. S. N. Soparkar with learned advocate Ms. Gargi Vyas appearing for respondent No. 3 and advocate Mr. Ankit Shah appearing for the respondent No. 1 - Union of India submitted that there are two steps for levy of anti-dumping duty under the provisions of the Act and the Rules and the first step involves a quasi-judicial process wherein the Designated Authority provides full opportunity to all the interested parties to present their side of....
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....to levy of anti-dumping duty or not, it is a settled law that the principles of natural justice have no role to play. Reference was made to the decision of the Hon'ble Supreme Court in the case of Balco Employees Union (Regd) vs. Union of India and others reported in 2002 (2) SCC 333. Reliance was also placed on the decision of the Hon'ble Supreme Court in the case of Indian Express Newspaper (Bombay) (P) Ltd. vs. Union of India reported in 1985 (1) SCC 641, wherein it is held that subordinate legislation cannot be questioned on the ground of violation of principles of natural justice. Reliance was placed on the decision of the Hon'ble Supreme Court in the case of the Designated Authority vs. M/s. The Andhra Petrochemicals Limited reported in (2020) (373) ELT 740 (SC) and the decision of this Court in the case of Alembic Ltd vs. Union of India reported in (2013) (291) ELT 327 (Guj), wherein it is held that the Designated Authority follows a prescribed quasi-judicial procedure, where a determination on whether to impose or not to impose anti-dumping duty takes place. However, the proceeding culminates with a recommendation; the Central Government finally decides whether to impose su....
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....tive activity. It was, therefore submitted that the Central Government is required to ascertain various other factors and to strike a balance between the competing interests of different segments of economy to ensure pubic welfare at large and thus, to come to a conclusion whether despite such recommendations by the Designated Authority, anti-dumping duty should be imposed or not. Such a decision by the Central Government is not amenable to appeal. Reliance was placed on the decision of the Hon'ble Delhi High Court in the case of Eveready Industries Ltd vs. Union of India reported in (2019) (367) ELT 53 (Del). [14.7] Reliance placed on the WTO Agreement which does not put restrictions on whether the procedure to impose anti-dumping duty should be one step process or otherwise and in view of the provisions of Section 9A of the Act and the Rules, India has adopted two step process that involves quasi-judicial function resulting into recommendations of imposition of anti-dumping duty or not by the Designated Authority and the legislative / policy making function that by the Central Government to impose antidumping duty or not taking all the relevant facts and factors and into accou....
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....ecision is taken by the respondent No. 1 in view of the settled legal position. [14.10] Learned Senior Advocate Mr. Soparkar submitted that in view of the stand taken by the respondent No. 1 and the noting placed on record, no interference may be made and the petition deserves to be dismissed. In support of his submissions, reliance was placed on the following decisions: Sr. No. Particulars 1 Jindal Poly Film Ltd vs. Designated Authority and another reported in 2018 SCC Online (Del) 2 Balco Employees and others vs. Union of India and others reported in (2002) 2 SCC 333 3 Indian Express Newspapers (Bombay) Pvt Ltd and others vs. Union of India and others reported in (1985) 1 SCC 641 4 Reliance Industries Ltd vs. Designated Authority and others reported in (2006) 10 SCC 368 5 Delegated Authority and others vs. Andhra Petrochemicals Ltd reported in (2020) 10 SCC 209 6 Alembic Ltd vs. Union of India reported in 2011 SCC Online Guj 7686 7 Shri Sitaram Sagar Co. Ltd. vs. Union of India reported in (1990) 2 SCC 223 8 Union of India vs. Cynamide India Ltd reported in (1987) 2 SCC 720 9 Eveready Industries India Ltd vs. Union of....
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....eme Court, over a period of 40 years, consistently struck down legislation which was economic in nature as such legislation did not, according to the Court, square with property rights. As a result, a large number of minimum wage laws, maximum hours of work in factories laws, child labour laws, etc. were struck down. The result, as is well known, is that President Roosevelt initiated a court-packing plan in which he sought to get authorization from Congress to 22 appoint additional judges to the Supreme Court, who would have then overruled the Lochner line of precedents. As it turned out, that became unnecessary as Justice Roberts switched his vote so that a 5:4 majority from 1937 onwards upheld economic legislation. It is important to note that the dissents of Justice Holmes and Justice Brandeis now became the law. 18. Holmes, J. had, in his dissent in Lochner v. New York, 198 U.S. 45 (1905), stated: (SCC OnLine US SC paras 48-49 : US pp. 75-76) "48. This case is decided upon an economic theory which a large part of the country does not entertain. If it were a question whether I agreed with that theory, I should desire to study it further and long before making u....
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....y opinion tends to become a law. I think that the word liberty in the Fourteenth Amendment is perverted when it is held to prevent the natural outcome of a dominant opinion, unless it can be said that a rational and fair man necessarily would admit that the statute proposed would infringe fundamental principles as they have been understood by the traditions of our people and our law. It does not need research to show that no such sweeping condemnation can be passed upon the statute before us. A reasonable man might think it a proper measure on the score of health. Men whom I certainly could not pronounce unreasonable would uphold it as a first instalment of a general regulation of the hours of work. Whether in the latter 24 aspect it would be open to the charge of inequality I think it unnecessary to discuss. 19. Similarly, in New State Ice Co. v. Liebman, 285 U.S. 262 (1932), Justice Brandeis echoed Justice Holmes as follows: ― "48. The discoveries in physical science, the triumphs in invention, attest the value of the process of trial and error. In large measure, these advances have been due to experimentation. In those fields experimentation has, for two ....
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.... Process Clause was used by this Court to strike down laws which were thought unreasonable, that is, unwise or incompatible with some particular economic or social philosophy. In this manner, the Due Process Clause was used, for example, to nullify laws prescribing maximum hours for work in bakeries, Lochner v. New York, 198 U. S. 45 (1905), outlawing yellow dog contracts,― Coppage v. Kansas, 236 U. S. 1 (1915), setting minimum wages for women, Adkins v. Children's Hospital, 261 U. S. 525 (1923), and fixing the weight of loaves of bread, Jay Burns Baking Co. v. Bryan, 264 U. S. 504 (1924). This intrusion by the judiciary into the realm of legislative value judgments was strongly objected to at the time, particularly by Mr. Justice Holmes and Mr. Justice Brandeis. Dissenting from the Court's invalidating a state statute which regulated the resale price of theatre and other tickets, Mr. Justice Holmes said, 'I think the proper course is to recognize that a state Legislature can do whatever it sees fit to do unless it is restrained by some express prohibition in the Constitution of the United States or of the State, and that Courts should be careful not to extend such p....
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....nion, etc. v. Northwestern Iron & Metal Co., 335 U.S. 525 (1949)]. We conclude that the Kansas Legislature was free to decide for itself that legislation was needed to deal with the business of debt adjusting. Unquestionably, there are arguments showing that the business of debt adjusting has social utility, but such arguments are properly addressed to the legislature, not to us. We refuse to sit as a 'super legislature to weigh the wisdom of legislation,' [DayBrite Lighting, Inc., v. Missouri, 342 U.S. 421, 423 (1923)] and we emphatically refuse to go back to the time when courts used the Due Process Clause 'to strike down state laws, regulatory of business and industrial conditions, because they may be unwise, improvident, or out of harmony with a particular school of thought' [Williamson v. Lee Optical Co., 348 U.S. 483, 488 (1955)]. Nor are we able or willing to draw lines by calling a law 'prohibitory' or 'regulatory.' Whether the legislature takes for its textbook Adam Smith, Herbert Spencer, Lord Keynes, or some other is no concern of ours. The Kansas debt adjusting statute may be wise or unwise. But relief, if any be needed, lies not with us, but with the body constituted t....
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.... legislature after all has the affirmative responsibility. The courts have only the power to destroy, not to reconstruct. When these are added to the complexity of economic regulation, the uncertainty, the liability to error, the bewildering conflict of the experts, and the number of times the judges have been overruled by events - self-limitation can be seen to be the path to judicial wisdom and institutional prestige and stability.' The Court must always remember that legislation is directed to― practical problems, that the economic mechanism is highly sensitive and complex, that many problems are singular and contingent, that laws are not abstract propositions and do not relate to abstract units and are not to be measured by abstract symmetry'; 'that exact wisdom and nice adaption of remedy are not always possible' and that 'judgment is largely a prophecy based on meagre and uninterpreted experience'. Every legislation, particularly in economic matters is essentially empiric and it is based on experimentation or what one may call trial and error method and therefore it cannot provide for all possible situations or anticipate all possible abuses. There may be crudi....
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.... Court would be least fitted to pronounce. The Court would not have the necessary competence and expertise to adjudicate upon such an economic issue. The Court cannot possibly assess or evaluate what would be the impact of a particular immunity or exemption and whether it would serve the purpose in view or not. There are so many imponderables that would enter into the determination that it would be wise for the Court not to hazard an opinion where even economists may differ. The Court must while examining the constitutional validity of a legislation of this kind, be resilient,― not rigid, forward looking, not static, liberal, not verbal and the Court must always bear in mind the constitutional proposition enunciated by the Supreme Court of the United States in Munn v. Illinois [94 US 13] , namely, 'that courts do not substitute their social and economic beliefs for the judgment of legislative bodies'. The Court must defer to legislative judgment in matters relating to social and economic policies and must not interfere, unless the exercise of legislative judgment appears to be palpably arbitrary. The Court 32 should constantly remind itself of what the Supreme Court ....
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....e process of rationalization of the infirmities in the economy can be put in serious jeopardy and, therefore, it is necessary that while dealing with economic legislations, this Court, while not jettisoning its jurisdiction to curb arbitrary action or unconstitutional legislation, should interfere only in those few cases where the view reflected in the legislation is not possible to be taken at all. * * * 30. Before we conclude there is another matter which we must advert to. It has been brought to our notice that Section 45-S of the Act has been challenged in various High Courts and a few of them have granted the stay of provisions of Section 45-S. When considering an application for staying the operation of a piece of legislation, and that too pertaining to economic reform or change, then the courts must bear in mind that unless the provision is manifestly unjust or glaringly unconstitutional, the courts must show judicial restraint in staying the applicability of the same. Merely because a statute comes up for examination and some arguable point is raised, which persuades the courts to consider the controversy, the legislative will should not normally be put un....
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....veyed various decisions to summarise the following principles - "23. A conspectus of the aforesaid authorities would lead to the following conclusions: (1) Article 51(c) of the Constitution of India is a Directive Principle of State Policy which states that the State shall endeavour to foster respect for international law and treaty obligations. As a result, rules of international law which are not contrary to domestic law are followed by the courts in this country. This is a situation in which there is an international treaty to which India is not a signatory or general rules of international law are made applicable. It is in this situation that if there happens to be a conflict between domestic law and international law, domestic law will prevail. (2) In a situation where India is a signatory nation to an international treaty, and a statute is passed pursuant to the said treaty, it is a legitimate aid to the construction of the provisions of such statute that are vague or ambiguous to have recourse to the terms of the treaty to resolve such ambiguity in favour of a meaning that is consistent with the provisions of the treaty. (3) In a situation....
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....suance of Notification dated 1.2.2022 rescinding the countervailing duty was in exercise of sovereign power by the Government. Thereby, it was sought to be suggested that once the sovereign power is exercised by the Central Government, the rescinding of the duty was justified, at whatever stage it was done. 6.1.1 The submissions were based on the misconception of sovereign power of the state and the attributes of sovereignty. 6.1.2 The concept of sovereignty is an all time assertion of authority by the nation country to the outside world. The concept of sovereignty is in its essence that the country is independent in its all actions, decisions, reactions and in taking its own stand as a nation before the outside world. It signifies that the State will have the final authority to make or enact laws of the governance in all spheres. 6.1.3 There would be no gainsaying that when the Parliament enacts laws, it exercises the sovereign power. The Customs Tariff Act, 1975 and the Rules of 1995 are themselves the product of a sovereign exercise by our Parliament. The authority of the provisions in the enactment not only binds the subjects it governs, but also bind....
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.... generic sense 6.3 Proceeding to examine the emptiness in the next submission canvassed by learned Additional Solicitor General that impugned notification rescinding the countervailing duty is in the realm of policy, it is trite that it will not be permissible for the State to implement any purported policy decision when the policy decision is a product to be preceded by statutory exercise for taking such decision, without acting in accordance with provisions of law. 6.3.1 Examining the line of decisions on this count, in K.K. Bhalla Vs. State of M.P. [(2003) 6 SCC 581], the question was regarding grant of lease of land on concessional terms under the MP Nagar Niyam, 1975. The proposal for the said purpose could be made only by the Development Authority and power of the State Government was limited for grant of previous approval thereto and to ultimate grant of lease on concessional terms. It was ruled that none of the relevant provisions enable the State to usurp the jurisdiction of the Development Authority. 6.3.2 The principle was propounded that the statutory authority cannot act contrary to the scheme framed by them or contrary to the purpose for whi....
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....ich culminates into the Notification, in which the countervailing authorities have to follow the codified procedure. It is an outcome of quasi-judicial exercise. It involves investigation of facts and determination of jurisdictional elements. 6.3.6 When the decision is arrived at after complying with the mandatory statutory provisions, it becomes a statutory decision. It is not a policy decision so simply stated. The judicial review would extend to such decision on the ground that the action of decision or notification issued thereunder is vitiated by non-compliance of statutory requirements. (d) Laying before the Parliament 6.4 There was yet another attempt to submit on part of the respondent that in respect of the impugned Notification, judicial review would not be permissible. Section 7(3) of Customs Tariff Act initially referred to by learned Additional Solicitor General, which contains the provision about laying the Notification issued under Section 7(2) before each house of the Parliament and will come into effect upon approval of the Parliament after modification etc., if any. This Section deals with the Notification in respect of customs duty, whi....
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....t the rules and regulations. (b) Laying subject to negative resolution.-In this process the rules come into effect as soon as they are placed on the table of the House but shall cease to have effect if annulled by a resolution of the House. (c) Laying subject to affirmative resolution.- This technique may take two shapes - (i) that the rules shall have no effect or force unless approved by a resolution of each House of Parliament; (ii) that the rules shall cease to have effect unless approved by an affirmative resolution. In both these processes, it is the duty of the government to move a resolution. (d) Laying in draft subject to negative resolution.-Such a provision provides that when any Act contains provision for this type of laying the draft rules shall be placed on the table of the House and shall come into force after forty days from the date of laying unless disapproved before that period. (e) Laying in draft subject to an affirmative resolution.- In this type of laying the instruments or draft rules shall have no effect unless approved by the House." 6.4.6 Section 9(8) of the Act, as noted above, provi....
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....fixation under Section 62 when made appealable under section 111, it is rendered quasi-judicial. 6.5.2 In National Thermal Power Corp. Vs. Madhya Pradesh State Electricity Board [(2011) 15 SCC 580], the similar view was expressed that though price fixation is of legislative character, but since an appeal is provided under Section 111 of the Act, it becomes quasi-judicial. 6.5.3 In Reliance Industries Vs. Designated Authorities [(2006) 10 SCC 368], it was held, We do not agree with the Tribunal that the notification of the Central Government under Section 9A is a legislative Act. In our opinion, it is clearly quasi-judicial. The proceedings before the DA is to determine the lis between the domestic industry on the one hand and the importer of foreign goods from the foreign supplier on the other. The determination of the recommendation of the DA and the Government notification on its basis is subject to an appeal before the CESTAT. This also makes it clear that the proceedings before the DA are quasi-judicial. (para 39) 6.5.4 Under Section 9-C of the Customs Tariff Act, appeal lies against the order of determination or review of the countervailing ....
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.... section 9 of the Act, such inquiry is necessary before the recommendation is made by the designated authority and thereafter, which may end up notification by the Central Government. 7.1.2 The Supreme Court discussed the nature of quasi-judicial exercise and about the quasi-judicial function, in Indian National Congress Vs. Institute of Social Welfare [(2002) 5 SCC 658]. It was observed in para 24 that, "the legal principle as to when an act of statutory authority would be a quasi-judicial act, is that where (a) a statutory authority empowered under a statute to do any act (b) which would prejudicially affect the subject (c) although there is no lis or two contending parties and the contest is between the authority and the subject and (d) the statutory authority is required to act judicially under the statute, the decision of said authority is quasi-judicial." 7.1.3 The Apex Court in Indian National Congress (supra) was considering the question whether while exercising powers under Section 29A of the Representation of People Act, 1951, while registering a political party, the Election Commission exercises quasi-judicial power o....