TaxTMI 
TaxTMI 
2024 (5) TMI 383
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....learned advocate Mr. Paresh Dave for the respondent No. 6 and the applicant in Civil Application No. 1 of 2020 as well as learned advocate Mr. Harsheel Shukla for the respondent No. 1. 2. Having regard to the controversy involved in this petition, with the consent of the learned advocates for the respective parties, the petition is taken up for final hearing. 3. Rule returnable forthwith. Learned advocates Mr. Paresh Dave and Mr. Harsheel D. Shukla waives service of notice of rule on behalf of the respective respondents. 4. By this petition under Article 226 of the Constitution of India, the petitioner has challenged the Notification No. 03/2020-Customs (ADD) dated February, 2, 2020 issued by respondent No. 1 - Union of India, Ministry of Finance, Department of Revenue, Government of India, whereby Notification No. 28/2016-Customs (ADD) dated 5th July, 2016 and Notification No. 28/2019 - Customs (ADD) dated 24th July, 2019 are rescinded and thereby Anti-Dumping Duty (For short "ADD") imposed on Purified Terephthalic Acid (here-in-after referred to as "PTA" or the "Product") originating in or exported from the People's Republic of China, Iran, Indonesia, Malaysia, Taiwan, K....
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....resaid preliminary findings of respondent no. 2 on the aforesaid product originating in or exported from People's Republic of China, Iran, Indonesia, Malaysia and Taiwan. 13. Respondent no. 2 on conclusion of investigation filed final findings vide Notification dated June 9, 2016 confirming the preliminary findings and recommended imposition of ADD against import of PTA from China PR, Indonesia, Iran, Malaysia and Taiwan. 14. Respondent No. 1 on the basis of aforesaid final findings of respondent no. 2 issued Notification No. 28/2016 - Customs (ADD) dated July 5, 2016 imposed anti-dumping duty on PTA including its variants originating in, or exported from the People's Republic of China, Iran, Indonesia, Malaysia and Taiwan. 15. Petitioner Nos. 1 and 2 filed an application to initiate the sunset review in the matter of continuation of ADD on the imports of PTA originating in or exported from Korea RP and Thailand and pursuant to such application, respondent no. 2 issued Notification No. 7/36/2018-DGTR dated October 31, 2018 initiating sunset review in the matter of continuation of anti-dumping duty on imports of PTA originating in or exported from Korea RP and Thailand. ....
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....ed February 2, 2020 issued by the Respondent No. 1; b) This Hon'ble Court be pleased to issue a writ of mandamus or a writ, order or direction in the nature of mandamus so as to direct the Respondent No. 1 to revive the Notifications No. 28/2016-Customs (ADD), dated the 5th July, 2016 and 28/2019-Customs (ADD), dated the 24th July." 21. Learned Senior Advocate Mr. Mihir Joshi appearing with learned advocate Ms. Gargi Vyas for the petitioner submitted that the impugned notification is issued by respondent No. 1 arbitrarily and without following the due process of law whereby rescinding the Notification No. 28/2016-Customs (ADD) dated July 5, 2016 by which anti-dumping duty was imposed on import of PTA from People's Republic of China, Iran, Indonesia, Malaysia and Taiwan and Notification No. 28/2019-Customs (ADD) dated July 24, 2019 by which anti-dumping duty was imposed on PTA from Korea RP and Thailand after detailed investigation and determination made by respondent no. 2 in terms of Section 9A of the Act and the Rules. 22. It was submitted that as per the said notification ADD imposed would be effective for a period of five years from the date of publication of....
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....he review process would be illegal and Designated Authority is required to conduct sunset review and on the basis of such investigation and final findings on conclusion of such sunset review after giving an opportunity of hearing to all concern, the Central Government may pass appropriate order exercising powers under section 9A of the Act. 29. Learned Senior Advocate Mr. Joshi submitted that India is a signatory to the Marrakesh Agreement establishing the World Trade Organization in 1994. Pursuant to this, it has implemented the Agreement on Implementation of Article VI of the GATT 1994 referred to as the Anti-Dumping Agreement (ADA). In terms of Article 18.4 of the Agreement, each Member country is required to ensure the conformity of its laws, regulations and administrative procedures with the provisions of the Agreement. As a consequence, Sections 9A, Section 9AA, Section 9B and Section 9C of the Act were enacted. 30. It was submitted that Section 9A(5) of the Act mandates that ADD shall be levied for a period of five years, unless revoked earlier. Notification No. 28/2016 Customs (ADD), dated the July 5, 2016 and Notification No. 28/2019 Customs (ADD), dated the July 24,....
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....(1) and Section 9A(5) of the Act only under two situations - (a) material change in circumstance; and (b) expiry of period. The changed circumstance could relate to one or more factors which led to imposition of duty. Further, such material change in circumstances can be examined and established only by Respondent no. 2, and that too after following the procedure prescribed under the Rules. However, there is no such evidence of changed circumstance before respondent No. 1 warranting withdrawal of duty before its life. It was submitted that respondent No. 2 has not conducted any "review" to establish any changed circumstance warranting withdrawal of duty and therefore, the aforesaid mandatory conditions were not satisfied while issuing the impugned Notification. It was submitted that respondent No. 1 having failed to do so, its attempt to revoke and rescind the ADD through the impugned Notification is without authority of law; and is contrary to the terms of sub-section 1 and 5 of Section 9A of the Act read with Rule 23 of the Rules and has taken away valuable rights conferred onto the petitioners through notification levying duties. 34. It was submitted that respondent No. 1 has....
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.... likely to continue or recur if the said ADD is removed. It was submitted that this critical factor appears to have been entirely ignored by respondent No. 1 while issuing the impugned Notification, as there is not even a whisper of any consideration of whether the injury to the Domestic Industry is likely to continue or recur on account of the rescinding the subsisting ADD. 38. It was submitted that Section 9A of the Act and its related provisions do not in any manner provide for or contemplate the availability of products at "competitive prices" as being an essential ingredient for consideration, in relation to the levy or continuation of ADD. Section 9A of the Act mandates the various provisions and the procedures to deal with dumping, imported goods entering India at dumped prices (goods being sold in India at a price lower than the price at which they are sold in the domestic market of the foreign exporter), which cause material injury to the domestic Indian industry. It was submitted that the entire framework of provisions and procedure have no reference to "competitive prices" being available to the domestic user industry. It was submitted that to rescind a levy of ADD on....
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....A of the Act, respondent No. 1 lacks legal authority to impose ADD without a recommendation from Respondent No. 2 and in the like manner, despite powers conferred under General Clauses Act and/or Section 9A of the Act, respondent No. 1 lacks legal authority to revoke any subsisting ADD without a recommendation from Respondent No. 2. 42. Relying upon the decision in case of Nazir Ahmed v. King Emperor, AIR 1936 PC 253, it was submitted that in the said case, the Privy Council declared that "Where a power is given to do a certain thing in a certain way, the thing must be done in that way or not at all." It was submitted that this salutary rule has been universally followed in numerous later judgments by the Hon'ble Supreme Court in case of Rao Shiv Bahadur Singh v. State of V.P. reported in AIR 1954 SC 322; in case of State of U.P. v. Singhara Singh reported in AIR 1964 SC 358; in case of Meera Sahni v. Lieutenant Governor of Delhi & Ors. reported in 2008 (9) SCC 177 and in case of Shin-Etsu Chemical Co. Ltd. v. Aksh Optifibre Lid. & Anr. reported in (2005) 7 SCC 2341. 43. Relying upon the judgment in case of Reliance Industries Ltd. Versus Designated Authority reported in ....
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.... of imposition of anti-dumping duties, the duration of such duties, and requires Designated Authorities to periodically review the continuing need for Anti-Dumping duties and price undertakings. 45. It was submitted that the Hon'ble Supreme Court in case of Automotive Tyre Manufacturers v. Designated Authority (2011) 2 SCC 258, held that the functions of respondent No. 2 are quasi-judicial in nature. It therefore, has to conform to principles of natural justice. 46. It was submitted that the nature and scope of the exercise by respondent No. 2 and respondent No. 1 Central Government was lucidly explained by Hon'ble Supreme Court in case of Reliance Industries v. Designated Authorities(supra). 47. It was submitted that respondent No. 2 in its final findings published vide Notification No. 14/8/2015-DGAD, dated the June 9, 2016, had come to following conclusion thus conferring valuable rights onto the domestic industry, which could not have been upturned without following due process of law and investigation - i. the subject goods have been exported to India from subject countries below its normal value, resulting in dumping, ii. the domestic indust....
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....n of definitive ADD on imports of subject goods, originating in or exported from the subject countries and imported into India, in order to remove injury to the domestic industry. Respondent No. 1, after considering the aforesaid final findings of respondent No. 2 in exercise of the powers conferred by sub-sections (1) and (5) of section 9A of the Act, read with rules 18, 20 and 23 of the Rules imposed ADD vide Notifications No. 28/2019-Customs (ADD), dated the July 24, 2019 on PTA, originating in, or exported from, the Korea RP and Thailand and imported into India. 51. It was submitted that respondent No. 1 had imposed ADD after detailed investigation by Respondent No. 2 and only after satisfying that imposition of ADD was in public interest and having imposed ADD in public interest, respondent No. 1 could not have revoked the same without conducting review. There can be no information or evidence which can establish that imposition or existence of ADD was causing significant hardship to public at large. On the contrary, Respondent No. 2 has come to a conclusion that impact of ADD on the consumer was bare minimal and thus, the statement that duty is being withdrawn in greater p....
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.... the circumstances of the case were considered, and, (iv) how the period from 24th July 2019 to 1" February 2020 was considered a lapse of a reasonable period to justify a withdrawal of the subsisting anti-dumping duty. 54. Relying upon the judgment of the Hon'ble Delhi High Court in the case of Indian Metal and Ferro Alloys ltd. Versus Designated Authority reported in [2008 (224) ELT. 375 (Del.), it was submitted that it is well settled that in examining a review as to the continued imposition of ADD, the Domestic Industry should not be placed in a status quo ante with respect to imposition of the anti-dumping duty. In the present case, the Domestic Industry would be placed in a status quo ante consequent to the revocation of the ADD by way of the impugned Notification. The product is a highly capital-intensive product, wherein public and private sector companies have invested Rs. 25,000 Crores. While recommending extension of ADD, respondent No. 2 found that the return on capital employed earned by the industry was even below a level required to service the funds. It was submitted that while the country needed effort and action to reinvest the earnings to enhance ....
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....mers had not improved their performance, the reasons for the same were entirely different and were not linked to imposition of ADD. 58. It was submitted that respondent No. 1 has taken a narrow view in considering only immediate consumers' interest and has completely ignored the larger public interest. Public interest is a much wider term encompassing therein the interests of domestic producers of the Product, its consumers, the raw material suppliers, and public at large. While revoking the ADD, respondent No. 1 has considered only the interests of immediate consumers and therefore conclusion for revoking of duty should be considered insufficient and arbitrary. In any event, there was no verifiable evidence showing adverse impact of the ADD earlier imposed and respondent no. 1 could not have acted on mere allegations. 59. It was submitted that ADD can be imposed only if the investigation establishes that dumping caused injury. Similarly, revocation can be justified only if it is established that such imposition is no longer necessary and the same is also not be in public interests after conducting investigation. It was submitted that Consumer Industry will always be look....
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.... for revocation of ADD under section 9A(5) of the Act, the Central Government is not required to initiate release proceedings to Designated Authority. It was submitted that Section 9A(5) of the Act provides that ADD imposed under this section shall unless revoked earlier ceases to have effect on expiry of five years from the date of imposition. It was therefore, submitted that the Central Government is having not only the power but obligation to revoke the ADD during the period of five years at any time. 62. It was submitted that if review is always initiated by the Designated Authority then recommendation of Designated Authority may have to be awaited but if no review is initiated and Central Government found that ADD should not be continued in public interest then same can be revoked at any time by rescinding the notification issued for levy of ADD. 63. It was submitted that it is open for the Central Government not to accept the recommendation of DA as held in case of Alembic Ltd. v. Union of India reported in 2013 (291) E.L.T. 327 (Guj.) then it is also open for the Central Government to undertake its own exercise to examine the material data and take appropriate decision....
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....e recommendation is received, it is for the Central Government to examine the implication of imposition of ADD, taking into account overall public and economic interest of the country and also balancing the interests of the domestic (manufacturing) industry and the user industry if a duty is imposed. It was therefore, submitted that it is the Central Government alone that is empowered to impose ADD in discharge of its sovereign function. 68. Reliance was placed on the decision of Hon'ble Supreme Court in case of The Designated Authority versus M/s The Andhra Petrochemicals Limited (Judgment dated 1^st September, 2020 in Civil Appeal No. 3046-3048 of 2020), wherein Hon'ble Apex Court held as under: "32. Access to judicial review is a valuable right conferred upon citizens and persons aggrieved; the Constitution arms the High Courts and this court with powers under Articles 226 and 32. At the same time, barring exceptional features necessitating intervention in an ongoing investigation triggered by a complaint by the concerned domestic industry, judicial review should not be exercised virtually as a continuous oversight of the DA's functions. This court has cautioned ....
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....ing garments) which are currently having low capacity utilization of 60-65%. reportedly due to non-availability of PTA. It was mentioned that revocation of ADD on PTA will unshackle the man-made fibre (MMF) value chain and enable it to realize a greater share in world MMF apparel market and generate new jobs and employment in the sector. 15. I say and submit that the Ministry of Textiles is the nodal Ministry responsible for development of Textile Industry in India and it engages and consults the industry widely. The proposal of the Ministry of Textile based on their own analysis of the sector was naturally an outcome of these industry, wide consultations. Meanwhile, in its report forwarded to this Ministry in January, 2020, the IMG also suggested revocation of Anti-Dumping duty on PTA as way forward to give a fillip to the domestic MMF industry. The IMG report mentions that while the capacity utilization of PTA producers is around 90%, that of user industry (spinning) is merely 65%. The raw material is available at high cost for downstream (fibre) manufacturers. The IMG report also stated that as compared to investment of Rs. 25.000 or by PTA manufacturers which are emplo....
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....tioner (who, in any case, have enjoyed a position of dominance as beneficiaries of ADD levy for a major part of the last 23 years, its removal had the potential to generate employment for millions of people. Under the circumstances, the balance of public interest clearly was in revocation of ADD on PTA 17. It is also submitted that petitioner has incorrectly argued that the revocation of ADD on PTA is contrary to the objective of Atmanirbhar Bharat set by the Hon'ble Prime Minister. The downstream user industry contributes to higher value addition, production, investment and employment, clearly reflected in the inputs received from the administrative Ministry and the IMG headed by NITI Ayog. Therefore, contrary to the petitioner's argument, the revocation of ADD on critical input like ITA supports domestic production of value-added downstream goods, and furthers the objectives of Atmanirbhar Bharat. 18. I say and submit that taking into account all relevant factors it was decided, as part of Budget exercise, 2020-21, to revoke the anti-dumping duty on the import of PTA, including its variants MTA and QTA, imposed vide notification No. 28/2016-Customs (ADD)....
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....and therefore, power to impose ADD includes power to revoke it also which is unfettered and the Act does not impose restrictions on its exercise. It was submitted that imposition of ADD or continuation of ADD cannot be demanded by the domestic industry as a matter of legal right as ADD is only a mechanism meant to provide relief to domestic industry against dumping and injury resulting therefrom. It was submitted that it is for the Central Government to take a decision in discharge of its sovereign function, taking all relevant factors, constituting the public interest, whether or not to impose or continue an existing ADD through consultative process within the Government. It was therefore, submitted that the legality of the action of Government in supervening public interest, specifically in taxation matter has been upheld by the Apex Court in number of judicial pronouncements as under : "In its judgment dated 15 December, 1997 in the matter of Sales Tax Officer and Anr. Versus M/s Shree Durga Oil Mills & Anr, the Hon'ble Supreme Court stated that- "Moreover withdrawal of notification was done in public interest. The Court will not interfere with any action t....
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....ar greater latitude available to the executive than other matters. Court cannot sit in judgment over the wisdom of policy of the Legislature or the executive." 74. It was therefore, submitted that reliance placed by the petitioner on decision of this Court in case of Realstrips Limited and others (supra) would not be applicable in facts of the case, as the Central Government after considering the various factors as enumerated in affidavit in reply filed on behalf of respondent No. 3-Ministry of textile, the Central Government has taken a conscious decision to revoke ADD on subject goods which are stated in paragraph No. 6 of the reply as under: "6. Without prejudice to the afore referred preliminary contention, following factual matrix of the matter as well as provision of law, would go to show that the petitioner is not entitled to any relief whatsoever claimed in the petition. A. Share of MMF in world textiles fibre consumption has been increasing steadily over the years. The global consumption pattern is in favour of synthetics (polyester, rayon, acrylic) and blends. In contrast with the global consumption pattern, in India, the domestic market has been domi....
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....he MMF segment since cotton has a limited capacity to grow given various constraints. The world production of PSF and PFY is estimated at 55.04 mn tons. Share of China is 71% (38.93 mn tons) and that of India, the second largest producer, 7% (3.9 mn tons). Share of PSF in MMF production in India is 53% and in global fibre production (69,400 mn kg), 25%. E. R-2 i.e. Directorate General of Trade Remedies (DGTR) initiated a Sun-set review investigation to examine the need for continuing the existing anti-dumping duty on PTA originating in or exported from China PR, EU, Korea RP and Thailand. This was based on a petition filed by two Petitioners, domestic manufacturers of PTA i.e. M/s. Reliance Industries Ltd. and M/s. MCPI Pvt. Ltd. for continuing the duty. The third producer of PTA in India, namely Indian Oil Corporation Ltd. neither supported nor opposed the applications. M/s. PTA Users Association requested that the anti-dumping duty on PTA be revoked in the overall interest of promoting the growth of the MMF textile industry. F. To enable the textile sector to grow from its current market size, man-made fibre manufacturing base in India needs to be grown. Polyest....
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....ication dated 20.12.2019, for abolition of anti-dumping duty on PTA. I. Announcement in Union Budget 2020-21 In the Union Budget 2020-21, it was recognized that "Chemicals are crucial feed stocks for downstream users. PTA, for example, is a critical input for textile fibres and yarn. It's easy availability at competitive prices is desirable to unlock immense potential in textile sector which is a significant employment generator. Therefore, in the larger public interest, Anti-Dumping duty on PTA has been abolished." J. Implications for Textile Sector: Removal of ADD on PTA will lead to an estimated cost saving for PTA users depending upon the country of origin. MMF manufacturers will now be able to procure raw material at globally competitive prices and in turn provide Man-Made Fibre/Filament to downstream industry at competitive prices. PTA manufacturers enjoyed the benefit of anti-dumping on PTA for a good part of the last 23 years. The ADD on import of PTA was initially imposed vide notification No. 85/97-Customs dated 21.11.1997, and has been levied for major part of the period since then in one form or the other on import of PTA from different exporters a....
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....etitioner is not able to sustain even after enjoying the benefit of anti-dumping duty on PTA at the cost of other user industry for such a long period, then introspection by the company is in order and warranted. It was submitted that the Government cannot allow ADD for indefinite period, keeping in view the larger public interest. The raw material was available at high cost for downstream (fibres) manufacturers. It was further submitted that as compared with international (FOB) price of Rs. 47.6/kg, the domestic price of PTA is Rs. 57.9/kg (BCD 5%, Cess on BCD 4% and avg. ADD Rs. 3.7/kg). 77. It was therefore, submitted that a comparison with User Industry (Spinners and downstream segment) reveals that as compared to investment of Rs. 25,000 crore by PTA manufacturers, total downstream industry (fibre, spinning, fabric, garmenting) has made far greater investments valued at Rs. 4,02,500 crore. As regards employment, the PTA manufacturers have an employment of only 6,000 persons as contrasted with 15mn people employed by the user industry. Capacity of PTA producers is 90% as opposed to 65% of the user industry (spinning) and their margins are 15% as opposed to declining margins ....
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....23 in sunset review investigation. 81. It was submitted that vide Notification No. 82/2000-Customs dated 30th May, 2000, ADD had been imposed against Spain only for a period of five years and thereafter the provisional duty was imposed vide notification No. 36/2014-Customs (ADD) dated July 25, 2014 and final ADD vide Notification No. 23/2015-Customs (ADD) dated May 27, 2015 on imports from Korea RP and Thailand and thereafter, ADD was imposed upon the subject countries in 2016 provisionally and finally since 2019. Therefore, the contention that ADD has been levied since 1997 for major part of period since then in one or other form is factually not correct and respondent No. 3 is trying to mislead this Court. 82. It was submitted that ADD is imposed to offset any unfair price discrimination by the exporters and the purpose of anti-dumping duty is not to protect the domestic industry, but to correct price distortion and establish fair play. Therefore, anti-dumping duty may continue as long as there is continued dumping, or likelihood of dumping and consequent injury to the domestic industry. It was pointed out that in the facts of the present case, anti-dumping duties were impo....
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....ors for reduction in prices which has no relation with the imposition of ADD, respondent No. 3 has failed to appreciate the proven fact that PTA producers in the other countries are engaged in dumping of the subject goods as a result of which the imports are entering in the Indian market at injurious and unfair prices. 87. Having heard the learned advocates for the respective parties and considering the facts emerging from the record, the issue raised in this petition with regard to revocation of ADD on subject goods during the five years without initiating sunset review is no more res integra in view of decision of this Court in similar facts in case of Realstrips Limited and others (supra), wherein in case of levy of countervailing duty under the Act having pari-materia provisions for levy of ADD, this Court after considering the case laws cited by both the sides answered the question that rescinding the notifications of levy of countervailing duty was irregular and illegal exercise and such notification rescinding the countervailing duty could not have been issued when the exercise in law is required to be undertaken pursuant to the commencement of process of sunset review no....
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....s imposed upon the imported products when the exporting country dumps such products in the Indian market at a lower price to the detriment to the domestic industry. Recognised by GATT, 1994 3.3 India is a signatory to agreement on Implementation of Article VI of the General Agreement On Tariffs And Trade 1994, known as GATT Agreement. Under this agreement, the member countries have agreed to abide by the set of Rules relating to type of subsidies, which are permissible as per the Agreement of Subsidies and Countervailing Measures ('ASCM'). 3.3.1 The Supreme Court in S & S Enterprise Vs. Designated Authority [2005 185 ELT 375 (SC)] observed in relation to the anti-dumping duty thus, which would also apply to countervailing duty, "..The imposition of dumping duty is under Section 9A of the Customs Tariff Act 1975 and the Rules and is the outcome of the General Agreement on Tariff and Trade (GATT) to which India is a party. The purpose behind the imposition of the duty is to curb unfair trade practices resorted to by exporters of a particular country of flooding the domestic markets with goods at rates which are lower than the rate at which ....
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....on of injury for the purpose of Article VI of GATT shall be based on positive evidence and involving objections, examining (a) The volume of subsidies, imports and effect of subsidies, imports on the prices in the domestic market for like products; (b) The consequent impact of this imports on domestic industry on such products. 3.4.2 Article 15 is regarding determination or injury, Articles 15.7 says that determination of threat of material injury shall be based on facts and not merely on allegations of remote possibility or conjecture. It outlines the factors which the investigating authorities may consider to determine the injury, which may be imminent and clearly forceable judging by the factors, (i) nature of the subsidy or subsidies in question and the trade effects likely to arise therefrom; (ii) a significant rate of increase of subsidized imports into the domestic market indicating the likelihood of substantially increased importation; (iii) sufficient freely disposable, or an imminent, substantial increase in, capacity of the exporter indicating the likelihood of substantially increased subsidized exports to the importing Member's ma....
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....d be likely to lead to continuation or recurrence of subsidization and injury. The duty may remain in force pending the outcome of such a review. 21.4 The provisions of Article 12 regarding evidence and procedure shall apply to any review carried out under this Article. Any such review shall be carried out expeditiously and shall normally be concluded within 12 months of the date of initiation of the review. 21.5 The provisions of this Article shall apply mutatis mutandis to undertakings accepted under Article 18. Statutory provisions 3.5 The Central Government legislated on the lines of aforementioned international agreement. Section 9 and section 9-A in the Customs Tariff Act, 1975 came to be enacted and the rules regarding imposition of countervailing duty and Anti-Dumping duty came to be framed. 3.5.1 Section 9 of the Act is in respect of countervailing duty on subsidised articles. The entire provision is extracted hereinbelow. "Countervailing Duty on Subsidized Articles.- (1) Where any country or territory pays, bestows, directly or indirectly, any subsidy upon the manufacture or production therein or the exportation therefrom of an....
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....fficial Gazette, levy countervailing duty from a date prior to the date of imposition of countervailing duty under sub-section (2) but not beyond ninety days from the date of notification under that Sub-section and notwithstanding anything contained in any law for the time being in force, such duty shall be payable from the date as specified in the notification issued under this sub-section. (5) The countervailing duty chargeable under this section shall be in addition to any other duty imposed under this Act or any other law for the time being in force. (6) The countervailing duty imposed under this section shall, unless revoked earlier, cease to have effect on the expiry of five years from the date of such imposition : Provided that if the Central Government, in a review, is of the opinion that the cessation of such duty is likely to lead to continuation or recurrence of subsidization and injury, it may, from time to time, extend the period of such imposition for a further period of five years and such further period shall commence from the date of order of such extension: Provided further that where a review initiated before the expiry of the ....
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....een made that import of such article into India causes or threatens material injury to any established industry in India or materially retards the establishment of any industry in India; and (iii) under sub-section (2) of each of these sections, on import into India of any article from the specified countries unless in accordance with the rules made under sub-section (2) of this section, a preliminary findings has been made of subsidy or dumping and consequent injury to domestic industry; and a further determination has also been made that a duty is necessary to prevent injury being caused during the investigation : Provided that nothing contained in sub-clauses (ii) and (iii) of clause (b) shall apply if a countervailing duty or an anti-dumping duty has been imposed on any article to prevent injury or threat of an injury to the domestic industry of a third country exporting the like articles to India; (c) the Central Government may not levy - (i) any countervailing duty under section 9, at any time, upon receipt of satisfactory voluntary undertakings from the Government of the exporting country or territory agreeing to eliminate or limit the sub....
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.... in the present controversy. 3.6.3 Proviso to sub-section (6) of section 9 says that if the Central Government in review is of the opinion that the cessation of the duty is likely to lead to continuation or recurrence of subsidisation and injury, the Central Government may extend the period of duty for further five years. Section provides that where the review initiated before the expiry of five years, which period is not over, before such expiry, the countervailing duty may continue to remain in force for further period not exceeding one year pending the outcome of such review. Prevalent Rules 3.7 The Customs Tariff (Identification, Assessment and Collection of countervailing duty on Subsidised Articles and for Determination of Injury) Rules, 1995, came to be framed by the Central Government in exercise of powers conferred by sub-section(7) of Section 9 and sub-section(2) of section 9B of the Customs Tariff Act, 1975. 3.7.1 Having a bird's eye-view of the rules and pinpointing the relevant, under Rule 3, the Central Government appoints designated authority which is respondent no. 2 DGTR herein. Rule 4 deals with the duties of the designated ....
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.... domestic industry within a reasonable period of time prior to the expiry of that period, that the expiry of the said countervailing duty is likely to lead to continuation or recurrence of subsidisation and injury to the domestic industry, make recommendation for extending the period of such imposition in accordance with provisions of section 9 of the Act. (4) Any review initiated under sub-rule (1) shall be concluded within a period not exceeding twelve months from the date of initiation of such review. [Provided that notwithstanding anything contained in rule 19, such review shall be completed at least three months prior to expiry of the countervailing duty under review. [(5) Subject to sub-rule (4), the provisions of rules 7,8,9,10,11,12,13,18,19,20,21 and 22 shall apply mutatis mutandis in case of review.:]" 3.7.4 It would be seen from the above Rules that the designated authority will undertake the process of investigation, shall thereupon, on ascertainment of continuance of subsidy and injury, domestic market to recommend the Central Government, if the recommendation is for withdrawal of duty, it would lead to revocation of the notification....
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....ctual and potential decline in output, sales, market share, profits, productivity, return on investments, or utilization of capacity; factors affecting domestic prices; actual and potential negative effects on cash flow, inventories, employment, wages, growth, ability to raise capital investments and, in the case of agriculture, whether there has been an increased burden on government support programmes." 3.8 It would be seen that the contents of the relevant provisions of the Act and the Rules above are on the lines and conceptually match the different corresponding Articles in the agreement-ASCM on subsidy and countervailing measures. 3.8.1 Section 9 is with regard to countervailing duty on subsidised articles. Section 9-A is in respect of Anti-Dumping duty on dumped articles. Both are measures to protect the domestic "exported market force". Both sections contain similar provisions with similar import. 3.8.2 Therefore, whatever legal principles are enunciated by the courts in the context of the scheme of the provisions and the judgments are rendered in relation to the anti-dumping duty, and they would apply in their reasoning and ratio, mutatis mutandi....
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....reaty obligation, and if there be any difference between the language of such statute and a corresponding provision of the treaty, the statutory language should be construed in the same sense as that of the treaty. This is for the reason that in such cases what is sought to be achieved by the international treaty is a uniform international code of law which is to be applied by the courts of all the signatory nations in a manner that leads to the same result in all the signatory nations. 5.2.2 While applying the domestic legislation, which has originated with reference to the international treaty, the application of the provisions has to conform the principles agreed in the treaty. In G.M. Exports (supra), it was observed, "48. We have already held that this would fly in the face of all the judgments referred to in paragraphs 15 to 22 hereinabove, and principles (3) and (4) of paragraph 23 of this judgment which speak of how domestic legislation must be construed when it is made in furtherance of an international treaty. In particular, in the facts of these cases, it would also ignore the effect of Article 18.4 of the WTO Agreement, which expressly states that all ....
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....wer it could disregard and discard the mandates in the statute which is enacted by itself in exercise of such power, on the other hand to assert that there is an independent power in the nature of sovereign power to act de hors the governing statute. It is absurd to suggest that the State will disregard its own laws to act independent of legal requirements, thereby acting sovereign. (b) No public interest in abstract 6.2 Emphasis was laid by learned Additional Solicitor General that the Notification in question rescinding the countervailing duty was issued in public interest. According to him various inputs were taken into account before issuing the Notification. There is a hollowness in the submission inasmuch as while no facts or details were given as to how the public interest is made to subserve, on the other hand the abstract plea and general concept of public interest would be irrelevant. 6.2.1 When the countervailing duty was imposed, it was by following the procedure in law, undertaking the investigation to determine the aspects of subsidy and injury as provided. This itself was an exercise in public interest. The case of the petitioner is that th....
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....judicial in nature. Even when the review process was undertaken under sub-section (6) and (7) of 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 par....
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....n the scheme of imposition etc., of countervailing duty, the investigation and inquiry is contemplated in the similar way. In Reliance Industries (supra), the Supreme Court in terms observed that the notifications regarding countervailing duty are quasi-judicial notifications. Analysis and Judicial Decisions 7.2 Having finally noticed that the countervailing duty notifications under the Act are quasi-judicial exercise and that these notifications are amenable to appeal and the challenge, and are also subject to judicial review in the writ jurisdiction also, the essential aspects of the provisions concerning the controversy may be analysed, also with reference to the judicial decisions in that regard. 7.2.1 As noted above, the notification levying the countervailing duty once issued under Section 9(1) of the Act, has an expiry period from the date of imposition, unless revoked earlier. It also provides that respondent No. 1 may extend the period further, if it is of the opinion that "the cessation of such duty is likely to lead to continuation or recurrence of subsidy and injury". 7.2.2 Two important pre-requisites are postulated by the first prov....
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....01 which were directed against the final findings recorded by the Designated Authority based on which the Government of India had imposed the antidumping duty for a period of five years. Under Section 9A(1), the said initial imposition of Anti-Dumping duty is ordinarily contemplated to be continued and remain in effect for a full period of five years, at the end of which it would be subject to Sunset review, the possible consequence of which would be the extension of the operation of the period of anti-dumping duty for another period of five years. This is subject to the provisions of sub-rule (1) of Rule 23 of the Anti-Dumping Rules, under which the Designated Authority is empowered to review the anti-dumping duty imposed from time to time. (para 37) 7.3.2 The followings observations are to be pertinently noticed, "Having regard to the scheme of the above mentioned provisions of the statute, once Anti-Dumping duty has been initially imposed, it would be ordinarily continued for five years unless on a review it is found by the Designated Authority that there has been such a significant change in the facts and circumstances, that it is considered necessary either t....
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....view exercises is necessary before expiry of original notification which review is commonly known as Sunset review. "There may be situations where the Sunset review is undertaken but the review exercise is not complete before the expiry of the period of original notification. It is because of the reason that the exercise of Sunset review also demands complete procedure to be followed, in consonance with the principles of natural justice that was followed while imposing the Anti-Dumping duty in the first instance. To put it otherwise, this exercise contemplates hearing the views of all stakeholders by giving them adequate opportunity in this behalf and thereafter arriving at a conclusion that the continuation of the Anti-Dumping duty is justified, otherwise injury to the domestic industry is likely to continue or reoccur, if the said anti-dumping duty is removed or varied. Since this exercise is likely to take some time and may go beyond the period stipulated in the original notification imposing anti-dumping duty, in order to ensure that there is no vacuum in the interregnum, second proviso to sub-section (5) of Section 9A of of the Act empowers the Central Government to c....
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...., the Central Government does not have any independent or inherent power to impose or modify or withdraw the countervailing duty in absence of, and without considering the recommendation in that regard from the Designated Authority. The determination and establishment of the jurisdictional ingredients about the continuation or recurrence of subsidy and injury to domestic industry, which are indispensable and inextricable elements for levy or revocation of the countervailing duty. 7.6 All the above are the essential operational considerations emanating from the statute provisions. Before the Central Government may issue any notification regarding levy of countervailing duty, the procedure prescribed under the Act and Rules regarding the recommendation to be arrived at by the designated authority, is mandatory. These requirements cannot be bypassed. The notifications regarding countervailing duties have to be based on the determination and establishment of ingredients namely 'likelihood of continuance or recurrence of subsidy' and 'injury' which would result for the domestic industry. These are the founding facts before the Central Government can act to issue the notificatio....
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..... In Alembic (supra) the court also held that the powers of the Central Government in issuing the Anti-dumping notification are quasi-judicial and the writ is maintainable. 7.9 It is settled principle as propounded long back in Nazir Ahmed Vs. King Emperor [AIR 1936 PC 253] and universally followed in several judgments including Rao Shiv Bahadur Singh Vs. State of V.P [AIR 1954 SC 322], State of U.P Vs. Singhara Singh [AIR 1964 SC 358] and Shin-Etsu Chemical Company Limited Vs. Aksh Optifibre Limited and Another [(2005) 7 SCC 234], that where power is given in law to do a certain thing in certain way, the thing must be done in that way or not at all. 8. On behalf of the petitioners, learned senior counsel sought to submit that Section 21 of the General Clauses Act, under which power to issue notification would include power to rescind notification, would not apply and would not come to aid. 8.1 Section 21 of the General Clauses Act reads as under.- "21. Power to issue, to include power to add to , amend, vary or rescind, notifications, orders, rules or bye-laws.-Where, by any Central Act or Regulation, a power to issue notifications, orders, rule....
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....nly thereafter. (ii) It was not permissible for the Central Government to issue the Notification rescinding the countervailing duty in absence of any recommendatory exercise and without waiting for such recommendations of the designated authority in accordance with prescribed procedure. The Central Government has no power to issue Notification in the manner issued, in absence of any without waiting for the recommendation by the designated authority. (iii) It is obligatory on part of the Central Government to act and issue Notification only after the procedure laid down and the exercise contemplated in sub-section(6) of Section 9 of the Customs Tariff Act, 1975 read with Rule 24 of the Customs Tariff (Identification, Assessment and Collection of Countervailing Duty on Subsidized Articles and for Determination of Injury) Rules, 1995. (iv) The procedure and exercise contemplated in Section 9(6) and 9(7) of the Customs Tariff Act read with the relevant Rules could not be treated directory. Treating the exercise as per the provision to be directory would amount to negating the whole scheme of the countervailing duty laws and would mean negation thereof. The Ce....
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....writ or order in the nature of mandamus, the applicant has to satisfy that he has a legal right to the performance of a legal duty by the party against whom the mandamus is sought and such right must be subsisting on the date of the petition. The duty that may be enjoined by mandamus may be one imposed by the Constitution, a statute, common law or by rules or orders having the force of law." (para 102) 10.1 In Association of Synthetic Fibre Industry vs. J.K. Industries Ltd. & Ors. [(2005) 11 SCC 482], the Supreme Court observed, "Needless to say, all these steps including the imposition of anti-dumping duty, in the event of the Central Government forming an opinion to do so, would be subject to the result of the writ petition pending in the High Court and the High Court does have power to grant an interim relief at any stage of the proceedings subject to a case in that regard being made out. That is what the law is. The decision of the Central Government in the matter of anti-dumping duty is appealable and also subject to writ jurisdiction on well-settled parameters of constitutional law." (para 8) 90. In view of above discussion, following directions were issu....
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...., the Central Government could not have issued the notification rescinding the ADD in absence of any recommendatory exercise conducted by the Designated Authority and without waiting for such recommendation of the Designated Authority in accordance with the prescribed procedure in the Rules. Therefore, the impugned notification issued by the Central Government is without power in the manner in which it is issued in absence of any recommendation by the Designated Authority. 92. Therefore, the procedure prescribed as per the provisions of the Act and the Rules could not be considered as directory as the same would reduce the entire scheme of levy of ADD as futile exercise to be carried out by treating such procedure as optional, more particularly, when the Designated Authority has recommended for continuation of ADD on the subject product and based upon such final recommendation, Notification No. 28/2019 dated 24th July, 2019 was issued by the Central Government for continuation of the ADD on the subject product to be imported from Thailand and Korea RP. So far as other subject countries are concerned, Notification No. 28/2016 was very much in existence for levy of ADD and the Des....