Apcotex Industries Limited Vs Union of India (CESTAT Delhi)
Conclusion- Where the Central Government formed a prima facie opinion that the final findings of the designated authority recommending imposition of anti-dumping duty were not required to be accepted then tentative reasons had to be recorded and conveyed to the domestic industry so as to give an opportunity to the domestic industry to submit a representation by following the principles of natural justice.
Held – In the present case, it was not in dispute that the final findings of the designed authority were published on 12.05.2021. In all the appeals except twelve appeals, an office memorandum was issued by the notifying that the Central Government, after examining the recommendation, had decided not to impose anti-dumping duty. In twelve app, assessee had stated that such an office memorandum was not issued.The issue that arose for consideration was whether a presumption could be drawn that the Central Government had taken a decision not to impose anti-dumping duty as a decision was not taken within three months by the Central Government from the date of publication of the final findings by the designated authority. On a consideration of the provisions of the Tariff Act and the 1995 Anti-Dumping Rules, it was clear that a presumption could safely to be drawn that the Central Government by keeping silent for a long period of time should be deemed to have taken a decision not to impose anti-dumping duty and such cases would also fall in the category of those cases where an office memorandum had actually been issued conveying the decision of the Central Government not to impose anti-dumping duty. The inevitable conclusion, therefore, that followed from the aforesaid discussion was that the decision taken by the Central Government not to impose anti-dumping duty despite a recommendation having been made by the designated authority for imposition of anti-dumping duty, could not be sustained and the matter would have to be remitted to the Central Government for taking a fresh decision on the recommendation made by the designated authority. The matter was remitted to the Central Government to reconsider the recommendation made by the designated authority in the light of the observations made above.
FULL TEXT OF THE CESTAT DELHI ORDER
All these appeals have been filed by the domestic industry raising a concern that despite recommendations made by the designated of 2021, 51926 of 2021, 52100 of 2021, 52101 of 2021, 50017 of 2022, 50060 of 2022 and 50271 of 2022.
2. It also needs to be noted that the Anti-Dumping Appeal filed by Sterlite Technologies Ltd. relates to imposition of safeguard duty under section 8B of the Tariff Act. The Director General (Safeguard) had issued a notification containing the final findings for imposition of safeguard duty, but the Department of Revenue, Tax Research Unit issued an office memorandum notifying that the Central Government, after examining the recommendation, decided not to impose safeguard duty.
3. To appreciate the issues raised in these appeals, it would be necessary to relate facts concerning of the two appeals filed by M/s. Apcotex Industries Limited and Sterlite Technologies Ltd.
Apcotex Industries Limited
4. Apcotex Industries had filed an application before the designated authority on 31.03.2020 for initiation of anti-dumping investigation under the provisions of the Tariff Act and the Customs Tariff (Identification, Assessment and Collection of Anti-Dumping Duty on Dumped Articles and for Determination of Injury) Rules, 19952 for imposition of anti-dumping duty on imports of the subject goods from the subject countries, alleging dumping and consequent injury. The designated authority issued a public notice dated 26.05.2020 for initiation of anti-dumping investigation under rule 6(1) of the 1995 Anti-Dumping Rules to determine the existence, degree and effect of alleged dumping and to consider recommendation for imposition of anti-dumping duty, if any. The period of investigation for the purpose of anti-dumping duty was from 01.07.2019 to 31.03.2020 and the injury investigation period was from 01.04.2016 to 30.06.2019. Oral hearings were conducted and the parties that attended the oral hearings were advised to file written submissions on the views expressed orally, followed by rejoinders, if any. As contemplated under rule 16, the essential facts of the investigation were disclosed to the known interested parties by a disclosure statement dated 22.07.2021. The interested parties, including the appellant, filed comments to the disclosure statement. Thereafter, the designated authority notified the final findings on 12.05.2021. The relevant portions of the conclusion drawn by the designated authority in the final findings are as follows:
“176. After examining various submissions of the interested parties with regard to product under consideration, confidentiality, adequacy and accuracy of the application, questionnaire responses, selection of period of investigation, dumping margin determination, injury to the domestic industry, other factors allegedly causing injury to the domestic industry, the Authority notes that it has appropriately dealt with the issues raised in relevant paragraphs of these findings. After examining the submissions made by the interested parties and issues raised therein and considering the facts available on record, the Authority concludes that:
(a) The Applicant constitutes domestic industry under Rule 2(b) of the Rules and considers that the application satisfied the criteria of standing in terms of Rule 5(3) of the Rules.
(b) xxxxxxxxx
(c) xxxxxxx
(d) The Authority has calculated dumping margin on weighted average basis for all the responding exporters.
(e) xxxxxx
(f) xxxxxx
(g) xxxxxx
(h) Considering the normal value and export price for subject goods, the dumping margins for the subject goods from subject countries have been determined, and the margins are
(i) he Domestic Industry has suffered material injury. The examination of the imports of the subject product and the performance of the domestic industry clearly shows that the volume of dumped imports from subject countries has increased in both absolute and relative The imports from the subject countries are undercutting the prices of the domestic industry. The imports from the subject countries are depressing the prices of the domestic industry. The production, sales, capacity utilization and market share of the domestic industry has declined in the POI. The performance of the domestic industry has significantly deteriorated in respect of profits, cash profits and return on capital employed. The domestic industry has suffered financial losses, cash losses and negative return on investments in the POI.
177. The Authority notes that the investigation was initiated and notified to all interested parties and adequate opportunity was given to the domestic industry, exporters, importers and other interested parties to provide positive information on the aspect of dumping, injury and causal link. Having initiated and conducted the investigation into dumping, injury and causal link in terms of the provisions laid down under the Anti-Dumping Rules, the Authority considers it necessary and recommends the imposition of anti-dumping duty on imports of subject goods from the subject countries.
178. In terms of provision contained in Rule 4(d) of the Rules, the Authority recommends imposition of ADD equal to the lesser of margin of dumping and the margin of injury, so as to remove the injury to the Domestic Industry. Taking into account the factual matrix of the case, and having regard to information provided, and submissions made by interested parties, it is considered appropriate to recommend benchmark/reference form of anti-dumping duties. The Authority recommends imposition of definitive antidumping duties on import of subject goods originating in or exported from subject countries from the date of notification to be issued in this regard by the Central government, as the difference between the landed value of subject goods and the reference price indicated in column 7 of the table below, provided the landed value is less than the value indicated in column 7. No benchmark/reference price has been recommended for JSR Corporation, as injury margin for this producer is negative.”
(emphasis supplied)
5. An office memorandum dated 20.07.2021 was then issued by the Ministry of Finance to convey the decision of the Central Government not to impose anti-dumping duty. It is reproduced below:
“Government of India
Ministry of Finance
(Department of Revenue)
Tax Research Unit
Room No. 146(G), North Block
New Delhi, dated the 20th July, 2021
OFFICE MEMORANDUM
Subject: Anti-Dumping Investigation concerning imports of “Acrylonitrile Butadiene Rubber (NBR)” originating in or exported from China PR, European Union (EU), Japan and Russia – reg
The undersigned is directed to refer to your email dated 13th May, 2021 and the subject Final Findings issued by the Directorate General of Trade Remedies vide Final Findings No. 6/18/2020-DGTR dated the 12th May, 2021 in the subject antidumping investigation and to inform that the Central Government has decided not to impose the antidumping duty on imports of „Acrylonitrile Butadiene Rubber (NBR)‟ originating in or exported from China PR, European Union (EU), Japan and Russia, proposed in the said Final Findings.
Technical Officer, TRU”
(emphasis supplied)
Sterlite Technologies Ltd
6. The records reveal that the appellant, as a domestic industry, had filed an application before the Director General (Safeguard) under provisions of the Tariff Act, 1975 and the Customs Tariff (Identification and Assessment of Safeguard Duty) Rules, 19973 for imposition of safeguard duty on imports of the subject goods from the subject countries. A public notice dated 23.09.2019 was issued for initiation of safeguard investigation. Oral hearing were conducted and the parties that attended the whole hearings were asked to file written submissions on the view expressed orally. The interested parties, including the appellant, filed comments and thereafter preliminary
findings were issued on 06.11.2019 recommending immediate imposition of provisional safeguard duty. The final finding were thereafter issued on 28.01.2020 confirming the preliminarily findings that the increased imports were causing serious injury to the domestic industry and recommendation was made for imposition of the safeguard duty of ten percent for a period of one year on the import of subject goods. The conclusions drawn in the final findings are as follows:
“53.1 During the period of investigation there was an overall deterioration in the functioning of the DI, which is indicative of the serious injury and threat of serious injury in future. The parameter-wise finding of the serious injury suffered by the DI on account of enhanced imports of the PUC is summarized as under:
(a) The volume of imports of the PUC have increased significantly during POI mainly in 2018-19 and Q1 of 20 19-20.
(b) The imports in Q2 and Q3 of 2019-20 are at comparable level of 2016-17 and 2017-18 in terms relative to production.
(c) The DI’s market share has declined, whereas the market share of imports has increased.
(d) The increased imports of the PUC have substituted for the market share of DI;
(e) The capacity utilization has decreased significantly in POI despite increase in demand;
(f) The Domestic sales of the DI has declined significantly during the most recent period with their lost market been taken over by the imports;
(g) The DI was earning profit in 2017-18 are in significant losses during 2018-19 and Post POI:
(h) The inventories of the PUC have increased significantly;
(i) There is significant price underselling and price suppression due to imports of PUC.
(j) On an overall basis, DI has suffered serious injury during POI due to increased imports.”
7. An office memorandum dated 18.11.2020 was then issued by the Ministry of Finance to convey the decision of the Central Government not to impose safeguard duty. It is reproduced below:
“Ministry of Finance
Department of Revenue
Tax Research Unit
***
Room No. 146-G, North Block,
New Delhi, dated the 18th November, 2020
OFFICE MEMORANDUM
Subject: Minutes of the Board of Safeguard on Preliminary Findings in respect of Safeguard investigation concerning import of Single Mode Optical Fibre-reg.
The undersigned is directed to refer to the Final Findings dated 21st August, 2020 issued by the Directorate General Trade Remedies in the case of Safeguard investigation concerning import of „Single Mode Optical Fibre‟ vide F.No.22/5/2019 dated 21.8.2020.
2. In this regard, the undersigned is directed to state that the Central Government has examined the recommendation of Designated Authority and a decision has been taken to not accept the recommendation to impose safeguard duty @10% on imports of “Single Mode Optical Fibre” falling under customs tariff heading 9001 10 00.
Deputy Commissioner/OSD
Tax Research Unit”
(emphasis supplied)
8. The main contention that has been advanced by the learned counsel appearing for the appellants is that the office memorandums, communicating the decision of the Central Government not to impose anti-dumping duty/safeguard duty, despite a recommendation having been made by the designated authority in the final findings to impose anti-dumping duty/safeguard duty, deserve to be set aside for the reason that the principles of natural justice have been violated and even otherwise the decision is arbitrary, unreasoned and bad in law. The contention advanced on behalf of the respondents is that the appeals are not maintainable under section 9C of the Tariff Act and that the exercise of power by the Central Government under section 9A of the Tariff Act read with rule 18 of the 1995 Anti-Dumping Rules is legislative in nature and so neither the principles of natural justice are required to be complied with nor a reasoned order is required to be passed.
9. In order to examine these submissions it would be useful to first examine the relevant provisions of the Tariff Act, the 1995 Anti-Dumping Rules and the 1997 Safeguard Rules.
10. Anti-dumping duty is imposed by the Central Government under section 9A of the Tariff Act. It provides that where any article is exported by an exporter or producer from any county to India at less than its normal value, then, upon the importation of such article into India, the Central Government may, by notification in the Official Gazette, impose an anti-dumping duty not exceeding the margin of dumping in relation to such article. The margin of dumping, the export price and the normal price have all been defined in section 9A(1) of the Tariff Act.
11. Sub-section (5) of section 9A provides that anti-dumping duty imposed shall, unless revoked earlier, cease to have effect on the expiry of five years from the date of such imposition.
12. Sub-section (6) of the section 9A of the Tariff Act provides that the margin of dumping has to be ascertained and determined by the Central Government, after such enquiry as may be considered necessary and the Central Government may, by notification in the Official Gazette, make rules for the purpose of this section.
13. Section 9C of the Tariff Act deals with Appeal and sub-section (1) of section 9C is reproduced below:
“9C. Appeal
(1) An appeal against the order of determination or review thereof shall lie to the Customs, Excise and Service Tax Appellate Tribunal constituted under section 129 of the Customs Act, 1962 (52 of 1962) (hereinafter referred to as the Appellate Tribunal), in respect of the existence, degree and effect of-
(i) any subsidy or dumping in relation to import of any article; or
(ii) import of any article into India in such increased quantities and under such condition so as to cause or threatening to cause serious injury to domestic industry requiring imposition of safeguard duty in relation to import of that article.”
14. Section 8B of the Tariff Act deals with power of Central Government to apply safeguard measures and the relevant portion is reproduced below:
“8B. Power of Central Government to apply safeguard measures.
(1) If the Central Government, after conducting such enquiry as it deems fit, is satisfied that any article is imported into India in such increased quantity and under such conditions so as to cause or threaten to cause serious injury to domestic industry, it may, by notification in the Official Gazette, apply such safeguard measures on that article, as it deems appropriate.
(2) The safeguard measures referred to in sub-section (1) shall include imposition of safeguard duty, application of tariff-rate quota or such other measure, as the Central Government may consider appropriate, to curb the increased quantity of imports of an article to prevent serious injury to domestic industry:
Provided that no such measure shall be applied on an article originating from a developing country so long as the share of imports of that article from that country does not exceed three per cent or where the article is originating from more than one developing country,then, so long as the aggregate of the imports from each of such developing countries with less than three per cent. import share taken together, does not exceed nine per cent. of the total imports of that article into India:
Provided further that the Central Government may, by notification in the Official Gazette, exempt such quantity of any article as it may specify in the notification, when imported from any country or territory into India, from payment of the whole or part of the safeguard duty leviable thereon.
xxxxxxxxx
(7) The safeguard duty imposed under this section shall be in addition to any other duty imposed under this Act or under any other law for the time being in force.
(8) The safeguard measures applied under this section shall, unless revoked earlier, cease to have effect on the expiry of four years from the date of such application:
Provided that if the Central Government is of the opinion that the domestic industry has taken measures to adjust to such injury or threat thereof and it is necessary that the safeguard measures should continue to be applied, it may extend the period of such application:
Provided further that in no case the safeguard measures shall continue to be applied beyond a period of ten years from the date on which such measures were first applied.”
15. In exercise of the powers conferred by sub-section (6) of section 9A and sub-section (2) of the section 9B of the Tariff Act, the Central Government framed the 1995 Anti-Dumping Rules.
16. The duties of the designated authority are contained in rule 4 and the relevant portion is reproduced below:
“4. Duties of the designated authority.-
xxxxxxxxxxx
(d) to recommend to the Central Government-
(i) the amount of anti-dumping duty equal to the margin of dumping or less, which if levied, would remove the injury to the domestic industry, after considering the principles laid down in the Annexure III to these rules; and
(ii) the date of commencement of such duty;”
17. Rule 2 deals with initiation of investigation to determine the existence, degree and effect of any alleged dumping.
18. Rule 6 deals with the principles governing investigation and it is reproduced below:
“6. Principles governing investigations.-
(1) The designated authority shall, after it has decided to initiate investigation to determine the existence, degree and effect of any alleged dumping of any article, issue a public notice notifying its decision and such public notice shall, inter alia, contain adequate information on the following:-
(i) the name of the exporting country or countries and the article involved;
(ii) the date of initiation of the investigation;
(iii) the basis on which dumping is alleged in the application;
(iv) a summary of the factors on which the allegation of injury is based;
(v) the address to which representations by interested parties should be directed; and
(vi) the time-limits allowed to interested parties for making their views known.
(2) A copy of the public notice shall be forwarded by the designated authority to the known exporters of the article alleged to have been dumped, the Governments of the exporting countries concerned and other interested parties.
(3) The designated authority shall also provide a copy of the application referred to in sub-rule (1) of Rule 5 to –
(i) the known exporters or to the concerned trade association where the number of exporters is large, and
(ii) the governments of the exporting countries: Provided that the designated authority shall also make available a copy of the application to any other interested party who makes a request therefor writing.
(4) The designated authority may issue a notice calling for any information, in such form as may be specified by it, from the exporters, foreign producers and other interested parties and such information shall be furnished by such persons in writing within thirty days from the date of receipt of the notice or within such extended period as the designated authority may allow on sufficient cause being shown.
Explanation: For the purpose of this sub-rule, the notice calling for information and other documents shall be deemed to have been received one week from the date on which it was sent by the designated authority or transmitted to the appropriate diplomatic representative of the exporting country.
(5) The designated authority shall also provide opportunity to the industrial users of the article under investigation, and to representative consumer organizations in cases where the article is commonly sold at the retail level, to furnish information which is relevant to the investigation regarding dumping, injury where applicable, and causality.
(6) The designated authority may allow an interested party or its representative to present the information relevant to the investigation orally but such oral information shall be taken into consideration by the designated authority only when it is subsequently reproduced in writing.
(7) The designated authority shall make available the evidence presented to it by one interested party to the other interested parties, participating in the investigation.
(8) In a case where an interested party refuses access to, or otherwise does not provide necessary information within a reasonable period, or significantly impedesthe investigation, the designated authority may record its findings on the basis of the facts available to it and make such recommendations to the Central Government as it deems fit under such circumstances.”
19. Rule 10 deals with determination or normal value, export price and margin of dumping and it is reproduced below:
“10. Determination of normal value, export price and margin of dumping-
An article shall be considered as being dumped if it is exported from a country or territory to India at a price less than its normal value and in such circumstances the designated authority shall determine the normal value, export price and the margin of dumping taking into account, inter alia,the principles laid down in Annexure I to these rules.”
20. Rule 11 deals with determination of injury and it is reproduced below:
“11. Determination of injury. –
(1) In the case of imports from specified countries, the designated authority shall record a further finding 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.
(2) The designated authority shall determine the injury to domestic industry, threat of injury to domestic industry, material retardation to establishment of domestic industry and a causal link between dumped imports and injury, taking into account all relevant facts, including the volume of dumped imports, their effect on price in the domestic market for like articles and the consequent effect of such imports on domestic producers of such articles and in accordance with the principles set out in Annexure II to these rules.
(3) The designated authority may, in exceptional cases, give a finding as to the existence of injury even where a substantial portion of the domestic industry is not injured, if-
(i) there is a concentration of dumped imports into an isolated market, and
(ii) the dumped articles are causing injury to the producers of all or almost all of the production within such market.”
21. Rule 17 deals with final findings. It is reproduced below:
“Final findings.-
(1) The designated authority shall, within one year from the date of initiation of an investigation, determine as to whether or not the article under investigation is being dumped in India and submit to the Central Government its final finding –
(a) as to, –
(i) the export price, normal value and the margin of dumping of the said article;
(ii) whether import of the said article into India, in the case of imports from specified countries, causes or threatens material injury to any industry established in India or materially retards the establishment of any industry in India;
(iii) a casual link, where applicable, between the dumped imports and injury;
(iv) whether a retrospective levy is called for and if so, the reasons therefor and date of commencement of such retrospective levy:
xxxxxxx
(b) Recommending the amount of duty which, if levied, would remove the injury where applicable, to the domestic industry after considering the principles laid down in the Annexure III to rules.”
22. Rule 18 deals with levy of duty and the relevant portion is reproduced below:
“18. Levy of duty.-
(1) The Central Government may, within three months of the date of publication of final findings by the designated authority under rule 17, impose by notification in the Official Gazette, upon importation into India of the article covered by the final finding, anti-dumping duty not exceeding the margin of dumping as determined under rule 17.”
23. Annexure-I to the 1995 Anti-Dumping Rules deals with the principles governing the determination of normal value, export price and margin of dumping. It provides that the designated authority while determining the normal value, export price and margin of dumping shall take into account the principles contained in clauses (1) to (8) of the Annexure.
24. Annexure-II to the 1995 Anti-Dumping Rules deals with the principles for determination of injury. It provides that the designated authority while determining the injury or threat of material injury to domestic industry or material retardation of the establishment of such an industry, and causal link between dumped imports and such injury, shall inter alia, take the principles enumerated from (i) to (vii) of Annexure II under consideration.
25. Annexure-III to the 1995 Anti-Dumping Rules deals with the principles for determination of non-injurious price.
26. Rule 4 of the 1997 Safeguard Rules that have been framed by the Central Government under section 8B (5) of the Tariff Act deals with the duties of the Director General. While rule 5 deals with initiation of investigation, rule 6 deals with the principles governinz investigations. Rule 8 deals with determination of serious injury or threat of serious injury and it is reproduced below:
“8. Determination of serious injury or threat of serious injury. – The Director General shall determine serious injury or threat of serious injury to the domestic industry taking into account the following principles, namely:-
(1) In the investigation to determine whether increased imports have caused or are threatening to cause serious injury to a domestic industry, the Director General shall evaluate all relevant factors of an objective and quantifiable nature having a bearing on the situation of that industry, in particular, the rate and amount of the increase in imports of the article concerned in absolute and relative terms, the share of the domestic market taken by increased imports, changes in the level of sales, production, productivity, capacity utilization, profits and losses, and employment.
(2) The determination referred to in paragraph (1) shall not be made unless the investigation demonstrates, on the basis of objective evidence, the existence of the causal link between increased imports of the article concerned and serious injury or threat thereof. When factors other than increased imports are causing injury to the domestic industry at the same time, such injury shall not be attributed to increased imports. In such a cases, the Director General may refer the complaint to the authority for anti-dumping or countervailing duty investigations, as appropriate.”
27. Rule 11 deals with final findings and is reproduced below:
“11. Final findings. – (1) The Director General shall, within 8 months from the date of initiation of the investigation or within such extended period as the Central Government may allow, determine whether,-
(a) the increased imports of the article under investigation has caused or threatened to cause serious injury to the domestic industry, and
(b) a causal link exists between the increased imports and serious injury or threat of serious injury.
(2)(a) The Director General shall also give its recommendation regarding amount of duty which, if levied, would be adequate to prevent or remedy serious injury and to facilitate positive adjustment.
(b) the level of tariff rate quota, if imposed as a measure, may be determined having regard to the following conditions, namely:-
(i) maintaining traditional trade flow of the article over the representative period;
(ii) the existing and likely demand supply scenario in the country; and Any other condition that may be considered
relevant:
Provided that the tariff rate quota applied shall not reduce the quantity of imports below that level of the recent period, which shall be the average of imports in the last three years for which statistics are available, unless a different level is deemed necessary to prevent or remedy serious injury;
(c) tariff rate quota may be global or country specific;
(d) specific tariff rate quota may be allocated to counties with substantial interest, considering the proportion of the share of imports of the article concerned into the country during a representative period, and having regard to all relevant factors which may have or are likely to affect the trade in the article;
(e) in a case where the tariff rate quota is country specific, a residual tariff rate quota shall be provided for all other countries and in case the countries with specific tariff rate quota exhaust their specific tariff rate quotas, such countries may use the residual tariff rate quota available;
(f) any unused tariff rate quota may be carried forward and added to the tariff rate quota for the progressive liberalisation adequate to facilitate.
(3) The Director General shall also make his recommendations regarding the duration of levy of (measure):
Provided that where the period recommended is more than one year, the Director General shall also recommend progressive liberalisation adequate to facilitate [* * *] adjustment.
(4) The final findings if affirmative, shall contain all information on the matter of facts and law and reasons which have led to the conclusion.
(5) The Director General shall issue a public notice recording his final findings.
(6) The Director General shall send a copy of the public notice regarding his final findings to the Central Government in the Ministry of Commerce and in the Ministry of Finance.”
28. Rule 12 deals with levy of measure and it is reproduced below:
“12. Levy of measure. – (1) The Central Government may, impose by a notification in the Official Gazette, upon importation into India of the product covered under the final finding, a safeguard duty not exceeding the amount which has been found adequate to prevent or remedy serious injury and to facilitate positive adjustment.
(2) It the final finding of the Director General is negative, that is contrary to the prima facie evidence on whose basis the investigation was initiated, the Central Government shall within thirty days of the publication of final findings by the Director General under rule 11, withdraw the provisional duty imposed, if any.”
29. It is keeping in mind the aforesaid legal provisions that the submissions advanced by the learned counsel for the appellants and the learned counsel for the private respondents, as also the learned authorised representatives appearing for the respondent Union of India have to be considered.
Maintainability of appeal under section 9C of the Tariff Act
30. The submission advanced on behalf of the respondents is that an appeal under section 9C of the Tariff Act shall lie only against an order of determination or review thereof, in respect of the existence, degree and effect of any subsidy or dumping in relation to import of any article or import of any article into India in such increased quantities and under such condition so as to cause or threatening to cause serious injury to domestic industry requiring imposition of safeguard duty in relation to import of that article. Learned counsel underlined the significance of the aforesaid bold portion and submitted that the expression has been deliberately used by the Parliament in section 9C, unlike section 128 of the Customs Act 1962, wherein an appeal lies against any decision or order. The submission is that in view of the provisions of section 9A of the Tariff Act read with the provisions of the 1995 Anti-Dumping Rules, the power to investigate and determine the existence, degree and effect of any dumping in relation to import of any article vests with the designated authority and, therefore, by corollary, the final findings issued by the designated authority would constitute an “order of determination in respect of the existence, degree and effect of any dumping” in relation to import of any article. In support of this submission, learned counsel placed reliance upon the decision of the Delhi High Court in Jindal Poly Film Ltd. vs. Designated Authority 4 . Learned counsel, therefore, submitted that the office memorandum issued by the Central Government can at best be described as an order or decision not to impose duty and it cannot in any manner be treated as an “order of determination in respect of the existence, degree and effect of any dumping”. Learned counsel also submitted that the issuance of the office memorandum, which is an inter-departmental communication conveying the decision of Central Government in the Ministry of Finance not to impose anti-dumping duty, is not envisaged under the provisions of the Tariff Act or the 1995 Anti-Dumping Rules. Thus, section 9C of the Tariff Act cannot possibly contemplate an appeal against an order which does not flow from any of the provisions of the Tariff Act or the 1995 Anti-Dumping Rules. Learned counsel also submitted that the final findings are in the nature of recommendation and anti-dumping duty can be imposed only by the Central Government by issuance of a notification. The notification only would, therefore, gives a cause of action for filing an appeal before the Tribunal. According to the learned counsel, the actual challenge by the domestic industry or the importers/exporters is to the determination contained in the final findings issued by the designated authority since the reasoning as to the existence, degree and effect of dumping is only found in the final findings of the designated authority and in an appeal before the Tribunal, the challenge is always made to the final findings of the designated authority. Learned counsel pointed out that the consequential notification is also challenged, which in the process gets set aside or modified, only to make the appellate remedy effective for the appellant. It is for this reason that the learned counsel submitted that it is only the final findings issued by the designated authority, acting on behalf the Central Government under section 9A (6) read with the 1995 Anti-Dumping Rules, that constitute an “order of determination in respect of existence, degree and effect of any alleged dumping”.
31. Learned counsel for the appellants however, submitted that the office memorandum clearly conveys the decision of the Central Government not to impose any anti-dumping duty and, therefore, an appeal would lie under section 9C of the Tariff Act, for it is an order of determination in respect of the existence, degree and effect of any subsidy or dumping in relation to import of any article. The determination which is required to be made, in terms of section 9C of the Tariff Act, is by the Central Government and the word „determination‟ qualifies the word „order‟ thereby restricting the right of appeal to those orders which are determinative and final. In the case of a negative opinion, the recommendation of the designated authority is a determinative opinion or order. In the case of a positive opinion, however, the final findings of the designated authority is neither determinative nor final, and no appeal lies against such order. In this connection reliance has been placed on the judgment of the Supreme Court in Saurashtra Chemicals Ltd. Union of India5.
32. Learned counsel for the appellants also placed reliance upon the judgment of the Delhi High Court in Jindal Poly Film and submitted that if the Central Government accepts the recommendation of the designated authority, a notification is issued for the imposition of antidumping duty, which is a composite determinative order in respect of the existence, degree, and effect of dumping, against which an appeal lies to the Tribunal, but if the Central Government decides to reject the recommendation, then there is no occasion to issue a notification, and an office memorandum is issued containing the determinative order on the aforesaid aspects. The aforesaid notification and the office memorandum are thus orders in respect of the existence, degree and effect of dumping, subject to appeal under section 9C of the Act. In this connection learned counsel for the appellants also placed reliance upon the judgments of the Supreme Court in Association of Synthetic Fibre Industry vs. J.K Industries Ltd.6 and Designated Authority vs. Sandisk International Ltd7.
33. Learned counsel for the appellants also submitted that if the contention of the respondents that no appeal lies against an office memorandum and an appeal can only be filed only against positive determination is accepted, then the provisions of appeal would be available only to foreign importers when the Central Government decides to impose anti-dumping duty, and would not be available to the domestic industry when the Central Government decides not to impose anti-dumping duty. This would clearly be against the purpose and object the Tariff Act, which is to shield the domestic industry where any article is exported by an exporter or producer to India at less than its normal value.
34. Learned counsel for the appellant, therefore, submitted that the office memorandum contains the final order of determination passed by the Central Government, after due consideration of the recommendation made by the designated authority in the final findings and, therefore, an appeal would lie to the Tribunal under section 9C of the Tariff Act.
35. The submissions advanced by the learned counsel for the appellants and the learned counsel for the respondents on the maintainability of the appeal under section 9C of the Tariff Act have been considered.
36. The issue that arises for consideration is as to whether an appeal would lie to the Tribunal in a case where the decision of the Central Government not to impose any anti-dumping duty is conveyed through an office memorandum, despite a positive recommendation made by the designated authority in the final findings for imposing antidumping duty. It has also to be considered whether an appeal would lie to the Tribunal in a case where despite a positive recommendation made by the designated authority for imposition anti-dumping duty, the Central Government does not take any decision, which decision has to be taken under rule 18 of the 1995 Anti-Dumping Rules within a period of three months from the date of publication of the final findings by the designated authority.
37. It would, therefore, be necessary to examine section 9C of the Tariff Act. It provides that an appeal against the order or determination shall lie to the Tribunal, in respect of the existence, degree and effect of any subsidy or dumping in relation to import of any article. Sub-section (1) of section 9A of the Tariff Act provides that where any article is exported by an importer or producer from any country or territory to India at less than its normal value, then, upon the importation of such article into India, the Central Government may, by notification in the official Gazette impose an anti-dumping duty not exceeding the margin of dumping in relation to such article. „Margin of dumping‟ means the difference between the export price of the article and the normal value. Sub-section (6) of section 9A of the Tariff Act provides that the margin of dumping, as referred to in sub‑section (1), shall be ascertained and determined by the Central Government, after such enquiry as it may consider necessary and the Central Government may, by notification in the Official Gazette, make rules for the purposes of the section. Such rules may provide for the manner in which the export price, the normal value and the margin of dumping in relation to such articles can be determined and for the assessment and collection of such anti-dumping duty. As noticed above, the 1995 Anti-Dumping Rules have been framed by Central Government in exercise of such powers and these rules confer upon the designated authority power to not only initiate an investigation to determine the existence, degree and effect of any alleged dumping but also contain the principles governing investigations for determination of normal value, export price and the margin of dumping. The said Rules also contemplate determination of injury.
38. The final findings are submitted by the designated authority to the Central Government after determining as to whether or not the article under investigation is being dumped in India. The final findings contain the export price, normal value and the margin of dumping. It is, thereafter, that under rule 18 the Central Government may, within three months of the date of publication of the final findings by the designated authority, impose by notification in the Official Gazette, upon importation in India of the article covered by the final findings, anti-dumping duty not exceeding the margin of dumping determined under rule 17.
39. A perusal of section 9C of the Tariff Act, as amended on 08.2019, would show that an appeal would lie to the Tribunal against the order of the determination in respect of the existence, degree and effect of any subsidy or dumping in relation to import of any article. The word „determination‟ qualifies the word „order‟. Thus, an appeal would lie only against such orders which are determinative and final in respect of the existence, degree and effect of any subsidy or dumping in relation to import of any article.
40. It would be useful to examine the meaning of the expression in respect of occurring in section 9C of the Tariff Act. It is defined in P Ramanatha Aiyar’s-The Law Lexicon 3rd Edition as follows:
“In respect of. Seeing that; as regards.
The expression “in respect of”is wider in its connotation than word “in” or “on”. Therefore a class of municipal tax, though not a tax on the premises or buildings will never-theless be a tax in respect of the premises or building used for the business. I.T. Commissioner vs. Chunilal, AIR 1968 Pat 364 at 367.”
41. It is, therefore, clear that the expression „in respect of‟ is of wide connotation than the word „in‟, making an order of determination as regards the existence, degree and effect of any subsidy or dumping amenable to an appeal to the Tribunal under section 9C of the Tariff Act
42. The provisions of section 9C of the Tariff Act, as they existed prior to 01.08.20 19, are as follows:
“(1) An appeal against the order of determination or review thereof regarding the existence, degree and effect of any subsidy or dumping in relation to import of any article shall lie to the Customs, Excise and Service Tax Appellant Tribunal constituted under section 129 of the Customs Act, 1962 (52 of 1962) (hereinafter referred to as the Appellant Tribunal).”
43. It would be seen that prior to 01.08.20 19, an appeal would lie to the Tribunal under section 9C of the Tariff Act against the order of determination regarding the existence, degree and effect of any subsidy or dumping in relation to import any article. The word „regarding‟ has been defined in Oxford English Reference Dictionary (Indian Edition) as follows:
“regarding /prep.- about, concerning; in respect of.”
44. There is, therefore, no difference in the meaning of the expression „in respect of‟ or „regarding‟, and an order of determination concerning the existence, degree and effect of any subsidy or dumping would give a cause for filing an appeal before the Tribunal.
45. The Delhi High Court in Jindal Poly Film pointed out that the scope and ambit of an appeal under section 9C of the Tariff Act is wide and broad and that section 9C ex facie does not restrict the right to appeal to specific category of orders, except that the order should determine the existence, degree and effect of subsidy or dumping in relation to imports in India. The High Court noted that the designated authority had in affirmative recommended imposition of anti-dumping duty, which question had not attained finality and was required to be considered by the Central Government. Hence, the order passed by the designated authority remained a mere recommendation and had not fructified into final determination. On the other hand, when the designated authority holds and gives a final finding in negative i.e. no anti-dumping duty is required to be imposed, the order of the designated authority is final and no further examination is mandated and required. Negative final finding order is determinative, and not a mere recommendation as in the case of positive finding proposing imposition of anti-dumping duty.
46. The Delhi High Court further pointed out that the Tariff Act uses the expression “Central Government‟‟ and does not use the expression “designated authority” which expression is to be found and defined in the 1995 Anti-Dumping Rules, but the designated authority is nothing but part and parcel of the Central Government. The term “designated authority” has been used in the Rules for clarity in view of the two tier procedure in the form of objective and reasoned recommendation to be followed by further examination and issue of notification in the Gazette which is necessary to impose and levy any tax, including anti-dumping duty. The designated authority acts for and on behalf of the Central Government and has been bestowed with the powers vested and conferred on the Central Government under the Tariff Act. The designated authority, when it performs the functions under the Tariff Act, acts for and on behalf of the Central Government and not as an independent and a distinct third party. The role of the designated authority can, therefore, clearly be connected with the power and role of the Central Government under the main enactment e. the Tariff Act read with the mandate of the 1995 Anti-Dumping Rules.
47. It is in this context that the Delhi High Court observed that a provision conferring right to appeal has to be read in a manner that it effectuates the legislative purpose in a reasonable, practical and liberal manner since it is remedial and the right to appeal should not be restricted or denied unless such a construction is unavoidable. Thus, the right to appeal conferred should not be forfeited or abandoned unless the Statute so states and can be inferred on reasonable and practical interpretation. Section 9C of the Tariff Act should, therefore, be interpreted in a manner that it would effectuate and not frustrate the purpose of the legislation that a party should have a right of appeal against the quasi-judicial determination in relation to orders determining existence, degree and effect of any subsidy or dumping of articles imported into India. Section 9C does not state and provide that an appeal is maintainable only against a customs notification.
48. In this connection it would also be appropriate to refer to the judgment of the Supreme Court in Saurashtra Chemicals and it is as follows:
“We see no reason whatsoever to entertain these special leave petitions. It is perfectly clear now that we have seen the provisions of the Act that the order of the Designated Authority is purely recommendatory. The appeal that lies is against the determination and that determination has to be made by the Central Government. For this reason, we decline to exercise jurisdiction under Article 136 of the Constitution of India and dismiss the special leave petitions.”
(emphasis supplied)
49. In Association of Synthetic Fibre Industry, the Supreme Court observed:-
“The same are directed to be vacated. The Designated Authority may submit its final findings to the Central Government and the same shall also be available for being published by way of notification. The Central Government may take its own decision on such findings in accordance with law. 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.”
50. An anomalous situation would arise if the contention advanced by the learned counsel for the respondents that an appeal under section 9(C) of the Tariff Act would lie only against the final findings of the designated authority is accepted. This is for the reason that in such a situation if a positive recommendation is made by the designated authority and the Central Government decides not to impose antidumping duty, which decision is communicated by issuance of an office memorandum, the domestic industry at whose instance the entire exercise was initiated would have no right to appeal and it will only be the foreign exporters or producers who would have the right to appeal if the Central Government accepts the recommendation of the designated authority and issues a notification for imposition of Anti-Dumping Duty.
51. As noticed above, the designated authority performs functions under the Tariff Act on behalf of the Central Government and not as an independent authority. Section 9(C) of the Tariff Act does not restrict the right of appeal to specific category of orders, except that the orders should determine the existence, degree and effect of subsidy or dumping in relation to imports of articles in India. The provisions of section 9(C) of the Tariff Act conferring right to appeal have to be read in a manner that it effectuates the legislative purpose in a reasonable, practical and liberal manner since it is remedial and the right to appeal should not be restricted or denied unless such a construction is unavoidable. The right to appeal should not be denied, unless the Statute so specifically states nor should it be read so as to frustrate the purpose of providing an appellate remedy in relation to orders determining existence, degree and effect of any subsidy or dumping of articles imported into India as the expression „in respect of‟ is of wide connotation.
52. It is true that right of appeal is a statutory right, as has also been contended by the learned counsel for the respondents, but as discussed above, section 9C of the Tariff Act provides for an appeal to the Tribunal if the Central Government takes a decision not to impose anti-dumping duty, even though the designated authority had made a recommendation in its final findings for imposition of anti-dumping duty.
53. It is also not possible to accept the contention of the learned counsel for the respondents that since an appeal is not specifically provided under section 9C of the Tariff Act against an office memorandum containing the decision of the Central Government not to impose anti-dumping duty, the appeal filed by the domestic industry would not be maintainable. This is for the reason that the decision of the Central Government not to impose anti-dumping duty is in respect of the existence, degree and effect of any subsidy or dumping in relation to import of articles into India.
54. The contention advanced by the learned counsel for the respondents that since a notification is not issued by the Central Government when it decides not to impose anti-dumping duty, it would mean that the domestic industry cannot file an appeal before the Tribunal under section 9C of the Tariff Act cannot also be accepted. It is the decision of the Central Government that would give a cause to a domestic industry to file an appeal since that decision is in respect of the existence, degree and effect of any subsidy or dumping in relation to import of any article.
55. There are two options that can be exercised by the Central Government when it receives a recommendation in the final findings of the designated authority for imposition of anti-dumping duty. It can either accept the recommendation and issue the notification for imposition of anti-dumping duty, in which case the foreign producers of the article or the importers of such article can file an appeal to the Tribunal to challenge the notification or the Central Government can take a decision not to accept the recommendation of the designated authority and an office memorandum is issued conveying the decision of the Central Government. In this latter situation there is no reason as to why the domestic industry should be denied the right to file an appeal to the Tribunal against this decision of the Central Government since it would be in respect of the existence, degree and effect of any subsidy or dumping in relation to import of the article. The determination contemplated in rule 18 of the 1995 Anti-Dumping Rules would include a negative determination as well as a „nil‟ Further, the determination of the “existence, degree and effect” of dumping or subsidy or surge in imports, includes determination of non existence of dumping, subsidy or surge in imports.
56. This precise issue as to whether an appeal would be maintainable under section 9C of the Tariff Act was examined by the Tribunal in Jubilant Ingrevia Limited Union of India8 and it was held:
“18. It is, therefore, clear that a discretion is vested in the Central Government to either impose anti-dumping duty or not impose anti-dumping duty. In the present case, an Office Memorandum dated 14.12.2020 was issued in connection with the final findings of the designated authority notified on 25.08.2020 and it states that the Central Government has decided not to impose anti-dumping duty on imports of subject good from the subject countries. There is, therefore, no manner of doubt that the Central Government had made a determination regarding the existence, degree and effect of dumping in relation to import of any article. An appeal would clearly lie to the Tribunal under section 9C of the Tariff Act.”
57. It is, therefore, not possible to accept the contention of the learned counsel for the respondents that an appeal would not lie to the Tribunal under section 9C of the Tariff Act against the decision of the Central Government, contained in the office memorandum, not to impose anti-dumping duty.
Is the determination by the Central Government legislative in character or quasi-judicial in nature
58. Section 9A of the Tariff Act provides that where any article is exported by an exporter or producer from any country to India at less than its normal value, then, upon the importation of such article into India, the Central Government may, by notification in the Official Gazette, impose an anti-dumping duty not exceeding the margin of dumping in relation to such article. Under sub-section (6) of section 9A, the margin of dumping has to be ascertained and determined by the Central Government, after such inquiry as it may consider It also empowers the Central Government to make rules for the purposes of this section. The Central Government has framed the 1995 Anti-Dumping Rules which contain an elaborate procedure regarding the principles governing investigation; the determination of normal value, export price and margin of dumping; the determination of injury; the disclosure of information; and the recording of final findings. Rule 18 provides that the Central Government may, within three months, impose upon importation into India of the article covered by the final findings, anti-dumping duty not exceeding the margin of dumping as determined under rule 17.
59. The contention of the learned counsel for the appellants is that the functions performed by the Central Government under section 9A of the Tariff Act read with rule 18 of the 1995 Anti-Dumping Rules are quasi–judicial in nature, while that of learned counsel appearing for the respondents is that the said functions are legislative in character.
60. This issue was considered by the Supreme Court in Reliance Industries Ltd. Designated Authority9 and it was held that the functions performed by the Central Government are quasi-judicial in nature and not legislative. The observations are as follows:
“37. We are of the opinion that the nature of the proceedings before the DA are quasi-judicial, and it is well-settled that a quasi-judicial decision, or even an administrative decision which has civil consequences, must be in accordance with the principles of natural justice, and hence reasons have to be disclosed by the authority in that decision vide S.N. Mukherjee v. Union of India, 1990 (4) SCC 594.
38. 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.”
(emphasis supplied)
61. The aforesaid view was reiterated by the Supreme Court in Union of India Kumho Petrochemicals Company Ltd.10.
62. Learned counsel for the respondents, however, placed reliance upon a three judge bench decision of the Supreme Court in Haridas Exports All India Float Glass MFRS. Association11 and pointed out that this decision was rendered by the Supreme Court prior to the decision of the two judge bench decision of the Supreme Court in Reliance Industries, but it was not placed. Learned counsel, therefore, contended that in view of the decision of the Supreme Court in Haridas Exports, the functions performed by the Central Government under section 9A of the Tariff Act are legislative in nature and in support of this contention, learned counsel also placed reliance upon the decision of the Gujarat High Court in Alembic Ltd. vs. Union of India12.
