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2016 (1) TMI 287 - DELHI HIGH COURT

2016 (1) TMI 287 - DELHI HIGH COURT - 2016 (334) E.L.T. 241 (Del.) - Imposition of anti-dumping duty on Acrylonitrile Butadiene Rubber (NBR) imported from Korea RP. - Levy of anti-dumping duty on imports of Phenol. - Method and procedure - Period of review - Held that:- India is a signatory to Article VI of GATT and the said Agreement of 1994. In pursuance of the same, amendments were made in the said Act (customs Tariff Act, 1975) in 1995 and, inter alia, new section 9A was inserted. The said r .....

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aning that is consistent with the provisions of the said Agreement. Furthermore,if there be any difference between the language employed in the said rule and a corresponding provision of the said Agreement, the former is to be construed in the same sense as that of the said Agreement.

Now, Article 11.4 of the said Agreement inter alia stipulates that the review contemplated under Article 11 shall be carried out expeditiously and shall “normally” be concluded within 12 months of the da .....

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visions of rule 23(2) in harmony with Article 11.4, rule 23(2) would have to be read as – any review initiated under sub-rule (1) shall “normally” be concluded within a period not exceeding twelve months from the date of initiation of such review. And, when the first proviso of rule 17(1) is applied (with necessary changes) to the case of a review it becomes immediately clear that the period of 12 months can be further extended by the Central Government in its discretion by 6 months but only if .....

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so to rule 17(1) can be pressed into service for extending the time of 12 months for concluding a review under rule 23(2) because of the mutatis mutandis prescription in rule 23(3). As such, the writ petitions are liable to be dismissed and they are dismissed - Decided against the appellants. - WP (C) 2310, 2011, 3454 /2015 and CM Nos. 4139/2015(stay), 14336/2015(stay)& 21950/2015(stay), CM Nos.4141/2015(stay), 7722-7727/2015 (impleadment), 14269, 21951 /2015(stay), CM Nos.6167/2015(stay), 13132 .....

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and WPC 3454/2015. The first two writ petitions are concerned with the imposition of anti-dumping duty on Acrylonitrile Butadiene Rubber (NBR) imported from Korea RP. The third writ petition is concerned with the issue of anti-dumping duty on imports of Phenol. 2. In the first two writ petitions concerning NBR, the challenge, inter alia, is to the Office Memorandum No. 354/179/2002-TRU (Pt.V) dated 24.12.2014 issued by the respondent No. 1. There is also a prayer seeking the quashing of proceed .....

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irtue of rule 23(2) of the Customs Tariff (Identification, Assessment and Collection of Anti-Dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995 (hereinafter referred to as the said rules ), a review when initiated in terms of sub-rule (1) of rule 23 has to be concluded within a period not exceeding 12 months from the date of initiation of such review. In all these writ petitions the factual position is that the reviews have not been concluded within the period of 12 mon .....

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domestic industry), the Designated Authority initiated a sunset review investigation to review the need for continued imposition of anti-dumping duties in force in respect of NBR, originating in or exported from Korea RP and to examine whether the expiry of such duty was likely to lead to continuance or recurrence of dumping and injury to the domestic industry. On 01.12.2014, the Designated Authority, expressing his inability to issue the final findings by 31.12.2014 (ie., the date on which the .....

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ifying the final findings concerning imports of NBR originating in or exported from Korea RP. On 30.06.2015, the Designated Authority gave his final findings and was of the view that the anti-dumping measure was required to be extended and recommended the imposition of anti-dumping duty as specified therein. This was followed by a Notification dated 04.09.2015 issued by the Central Government imposing anti-dumping duty on NBR as specified in the table therein. 5. We may point out at this junctur .....

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designated authority was right or wrong on merits but whether the designated authority had the jurisdiction to proceed with the review beyond the period of 12 months from the initiation of the review In other words, the challenge, which went to the root of the matter, was to the extension of 6 months granted by the Central Government. According to the petitioners, the review had mandatorily to be concluded within the said 12- month period and no extension of that period was permitted in law. On .....

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2 months stipulated in rule 23(2) for a review could also, in like manner, be extended by 6 months. 6. We are not called upon to examine the order of review on merits. We are also not going into the issue as to whether special circumstances existed or not for the grant of the extension. We are also not examining the question as to whether the Central Government exercised its discretion in a legal and valid manner or not. We are only required to examine the issue as to whether the provision of ex .....

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ed that the said rule 23 is based on and is completely aligned with Article 11 of the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 (hereinafter referred to as the said agreement ) where, according to the learned counsel for the petitioners, the period for completion of review proceedings is restricted to 12 months from the date of initiation thereof. Reliance was placed on a recent Supreme Court decision in Commissioner of Customs, Bangalore v. G.M .....

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that the power of extension of time prescribed in the first proviso to rule 17(1) cannot apply to review proceedings as rule 23(2) clearly mandates that the review shall be concluded within a period not exceeding 12 months from the date of initiation of the review. 8. It was also submitted that the rule of mutatis mutandis is one of adaptation and not of adoption. Reliance was placed on the following decisions:- 1. Ashok Service Centre v. State of Orissa: (1983) 2 SCC 82; 2. Janba v. Gopikabai: .....

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n incorporated in rule 23 which includes rule 23(2). Thus the first proviso to rule 17(1) would clearly apply, mutatis mutandis, to rule 23(2). Consequently, the learned counsel for the respondents submitted, the initial period of 12 months laid down in rule 23(2) for concluding a review can be extended by 6 months by the Central government, by reading the first proviso to rule 17(1) into rule 23(2). 11. In respect of the argument of the petitioners which was founded on Article 11 of the said Ag .....

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e of the petitioners, set the controversy at rest in favour of the interpretation that the period of 12 months could be extended by a further period of 6 months because such an interpretation was in line with the said WTO Agreement. He also referred to some decisions of the Customs Excise and Service Tax Appellate Tribunal (CESTAT) but, as they are not binding on us, we need not consider them. 13. It would now be appropriate to set out the relevant provisions of the said Act, the said rules and .....

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ion and Subsequent Investigation 5.1 Except as provided for in paragraph 6, an investigation to determine the existence, degree and effect of any alleged dumping shall be initiated upon a written application by or on behalf of the domestic industry. xxxxx xxxxx xxxxx xxxxx xxxxx 5.10 Investigations shall, except in special circumstances, be concluded within one year, and in no case more than 18 months, after the initiation. Article 11 Duration and Review of Anti-dumping Duties and Price Undertak .....

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sted parties shall have the right to request the authorities to examine whether the continued imposition of the duty is necessary to offset dumping, whether the injury would be likely to continue or recur if the duty were removed or varied, or both. If, as a result of the review under this paragraph, the authorities determine that the anti-dumping duty is no longer warranted, it shall be terminated immediately. 11.3 Notwithstanding the provisions of paragraphs 1 and 2, any definitive anti-dumpin .....

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y to lead to continuation or recurrence of dumping and injury. The duty may remain in force pending the outcome of such a review. 11.4 The provisions of Article 6 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. 11.5 The provisions of this Article shall apply mutatis mutandis to price undertakings accepted under Art .....

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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 aforesaid period of five years has not come to a conclusion before such expiry, the anti-dumping duty may continue to remain in force pending the outcome of such review for a further period not exceeding one year. Rules 17 and 23 of the said rules, .....

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tries, causes or threatens material injury to any industry established in India or materially retards the establishment of any industry in India; (iii) a causal 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: Provided that the Central government may, in its discretion in special circumstances, extend further the aforesaid period of one year by six mo .....

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the need for such review, and a reasonable period of time has elapsed since the imposition of the definitive anti-dumping duty and upon such review, the designated authority shall recommend to the Central Government for its withdrawal, where it comes to a conclusion that the injury to the domestic industry is not likely to continue or recur, if the said anti-dumping duty is removed or varied and is therefore no longer warranted. (1B) Notwithstanding anything contained in sub-rule (1) or (1A), an .....

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ecurrence of dumping and injury to the domestic industry. (2) 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. (3) The provisions of Rules 6, 7, 8, 9, 10, 11, 16, 17, 18, 19 and 20 shall be mutatis mutandis applicable in the case of review. (underlining added) 14. While rule 17 deals with final findings of the designated authority on the conclusion of the investigation initiated under rule 5, rule 2 .....

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mation stipulates that - Except in cases referred to in sub-rule (8) of rule 6, the designated authority shall during the course of investigation satisfy itself as to the accuracy of the information supplied by the interested parties upon which its findings are based. This rule applies to an investigation but, it has also been made applicable mutatis mutandis to a review. Thus, when we read rule 8 in the context of a review, we shall have to read the expression during the course of investigation .....

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in the case of a review, have not been made applicable under rule 23(3) to a review. So, only those provisions pertaining to investigation, final findings and levy of duty etc., which are relevant to a case of review have been made applicable mutatis mutandis. Rule 17, which includes the first proviso to rule 17(1), is one such provision. 16. The learned counsel for the petitioners had laid great stress on the use of the expression - mutatis mutandis. A reference was made to Black s Law Dictiona .....

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to as RSIDC] in the context of the expression mutatis mutandis. In Ashok Service Centre(supra), the Supreme Court observed as under: 17. Section 3(2) of the Act which makes the provisions of the principal Act mutatis mutandis applicable to the levy of additional tax is a part of the charging provision of the Act and it does not say that only those provisions of the principal Act which relate to assessment and collection of tax will be applicable to the proceedings under the Act. Before consideri .....

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names, offices, and the like. Housman v. Waterhouse [191 App Div850 : 182 NYS 249, 251] . In Bouvier's Law Dictionary (3rd Revision, Vol. II), the expression mutatis mutandis is defined as [T]he necessary changes. This is a phrase of frequent practical occurrence, meaning that matters or things are generally the same, but to be altered when necessary, as to names, offices, and the like . Extension of an earlier Act mutatis mutandis to a later Act brings in the idea of adaptation, but so far .....

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ipal Act is not correct. The Act only levied some extra sales tax in addition to what had been levied by the principal Act. The nature of the taxes levied under the Act and under the principal Act was the same and the legislature expressly made the provisions of the principal Act mutatis mutandis applicable to the levy under the Act. The additional sales tax was in the nature of a surcharge over and above what was due and payable by an assessee under the principal Act. The Act, though it had a l .....

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r one in preference to the provisions of the principal Act wherever the Act has manifested an intention to modify the principal Act…… (underlining added) 17. On the strength of these observations, it was contended by the learned counsel for the petitioners that the application of, inter alia, rule 17 mutatis mutandis to a case of review under rule 23 does entail the concept of adaptation, but so far only as it is necessary for the purpose and subject to the express provisions made .....

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provisions of, inter alia, rule 17, which are applicable in the case of an investigation, to also apply with adaptation (with necessary changes) to the case of a review under rule 23. 18. Let us now consider the decision in Janba (supra). The question before the Supreme Court was indicated in the first paragraph of the said judgment thus: The question involved in this appeal is with regard to the interpretation of Section 50(1) of the Bombay Tenancy and Agricultural Lands (Vidarbha Region) Act, .....

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d to make an offer to the landlord stating the price at which he is ready to purchase the land and such price shall not exceed 12 times the rent payable by him. It is the contention of the appellant tenant that as the respondent landladies were widows, his right to purchase the land is postponed under Section 41(2) of the Tenancy Act till their disability ceases. As against this, the High Court of Bombay by impugned judgment dated 5-7-1985 in Special Civil Application No. 792 of 1975 held that S .....

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act but subject to the provisions of Section 42 to 44 (both inclusive) a tenant other than an occupancy tenant shall, in the case of land held by him as a tenant, be entitled to purchase from the landlord the land held by him as a tenant and cultivated by him personally. (2) Where the landlord is of the following category, namely- (a) a minor, (b) a widow, (c) *** (d) a person subject to any physical or mental disability, such tenant shall be entitled to purchase the landlord's interest unde .....

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created by a landlord (not being a landlord within the meaning of Chapter III-A) in any area after the date specified in sub-section (1) of Section 49-A, every tenant holding land under such tenancy and cultivating it personally shall be entitled to purchase within one year from the commencement or as the case may be, the restoration of the tenancy so much of such land as he may be entitled to purchase under Section 41 and the provisions of Section 41 to 44 (both inclusive) shall mutatis mutandi .....

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n section 50 would not get supplanted by the postponement by two years as provided in section 41. The Supreme Court noted that the scheme of Section 50 was different from Section 41. It held that, while section 41 talked of purchase of the land by a tenant and carved out an exception as provided in sub-section (2) in favour of a landlord of specified categories (minor, widow or person subject to physical disability), under Section 50 no such exception has been carved out in favour of a landlord .....

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lly provides that provisions of Sections 41 to 44 would mutatis mutandis apply and, therefore, sub-section (2) of Section 41 would automatically apply and the right of the tenant to purchase the land is postponed till the period prescribed therein is over. 15. This submission, in our view, cannot be accepted firstly, because Section 50 only provides that the tenant would be entitled to purchase so much of such land as he may be entitled to purchase under Section 41 and to such purchase the provi .....

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question of postponing such purchase as provided under Section 41(2). Sub-section (2) cannot be made applicable in case of purchase under Section 50, as it does not pertain to the purchase but it is with regard to postponement of such purchase . This is consistent with other provisions, namely, Sections 46 and 49-A. Under Section 46 deemed purchase is provided from 1-4-1961 except in those cases where the tenant was a minor, a widow, a serving member of the armed forces or a person subject to an .....

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50 shall stand transferred to and vest in such tenant and from that date he shall be the full owner of such land, if such land is cultivated by him personally. Exception is carved out in favour of the landlord belonging to any of the categories specified in sub-section (2) of Section 38 i.e. in favour of a minor, a widow or a person subject to any physical or mental disability. No such exception is carved out under Section 50. Secondly, Section 50 specifically provides that every tenant holding .....

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on of disability of the landlord. If this contention is accepted, such purchase would be postponed for a period of two years after happening of an uncertain eventuality, namely, a minor landlord becoming a major, a widow ceasing to be the owner or in case of a disabled person, till cessation of the mental or physical disability. That is neither the intention of the legislature nor is it provided. What is provided for is - to such purchase Sections 41 to 44 mutatis mutandis shall apply. (underlin .....

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purchase within one year under section 50 (ie., such purchase ). It is in these circumstances that the postponement of two years provided for in section 41 was not engrafted in section 50. The position in the present petitions is entirely different. As pointed out earlier, rule 23 and sub-rule (3) thereof, in particular, does not manifest an intention to give primacy to rule 23(2) over the first proviso to rule 17(1). On the contrary, from rule 23(3), which immediately follows rule 23(2), the c .....

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manner: II. Mutatis mutandis-Meaning of 17. In Ashok Service Centre v. State of Orissa [(1983) 2 SCC 82 : 1983 SCC (Tax) 90 : AIR 1983 SC 394] this Court held as under: (SCC p. 93, para 17) 17. … Earl Jowitt'sThe Dictionary of English Law (1959) defines mutatis mutandis as with the necessary changes in points of detail . Black's Law Dictionary (Revised 4th Edn. 1968) defines mutatis mutandis as: With the necessary changes in points of detail, meaning that matters or things are ge .....

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r was wrong. We are of the view that it is necessary to read and to construe the two Acts together as if the two Acts are one, and while doing so to give effect to the provisions of the Act which is a later one in preference to the provisions of the principal Act wherever the Act has manifested an intention to modify the principal Act. Similarly, in Prahlad Sharma v. State of U.P. [(2004) 4 SCC 113 : 2004 SCC (L&S) 621] , the phrase mutatis mutandis has been explained as under: (SCC p. 120, .....

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ecision, also, would not come to the aid of the petitioners as rule 17 of the said rules would apply to a case of review under rule 23 as it is with certain changes in points of detail . Consequently, the extension by six months permissible under the first proviso to rule 17(1) would also apply to the case of a review as it does to an investigation. And, that is the discernible intention behind rule 23(3). 24. We are now left to examine the recent decision of the Supreme Court in G.M. Exports (s .....

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e Central Government may, on the basis of the preliminary findings recorded by the designated authority, impose a provisional duty not exceeding the margin of dumping: Provided that no such duty shall be imposed before the expiry of sixty days from the date of the public notice issued by the designated authority regarding its decision to initiate investigations: Provided further that such duty shall remain in force only for a period not exceeding six months which may upon request of the exporter .....

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te of public notice issued by the designated authority regarding its decision to initiate investigations. And second, such duty cannot remain in force for a period of more than six months, which is only extendable on request made by the foreign exporters who represent a significant percentage of the trade involved, to a maximum period of 9 months. The important words used in the second proviso are shall , only , and not exceeding , all of which point to the fact that the time period mentioned in .....

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equest of the exporters representing a significant percentage of the trade involved be extended by the Central Government to nine months . Thus, even though the period of six months is definitive and mandatory, provision has been made for extension, under certain circumstances, upto nine months. Similarly, by applying mutatis mutandis the provisions of the first proviso of rule 17(1) to the case of review under rule 23, the period of 12 months stipulated in rule 23(2) can be extended by 6 months .....

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tis mutandis) from the date of initiation of the review. 25. The decision in G.M. Exports (supra), after examining Article VI of GATT, the said Agreement, Article 51(c) of the Constitution and several earlier decisions of the Supreme Court set out the following conclusions: 23.A conspectus of the aforesaid authorities would lead to the following conclusions: (1) Article 51(c) of the Constitution of India is a Directive Principle of State Policy which states that the State shall endeavour to fost .....

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is a signatory nation to an international treaty, and a statute is passed pursuant to the said treaty, it is a legitimate aid to the construction of the provisions of such statute that are vague or ambiguous to have recourse to the terms of the treaty to resolve such ambiguity in favour of a meaning that is consistent with the provisions of the treaty. (3) In a situation where India is a signatory nation to an international treaty, and a statute is made in furtherance of such treaty, a purposive .....

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tute 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. (underlining added) 26. India is a signatory to Article VI of GATT and the said Agreement .....

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course could be had to the said Agreement as a legitimate aid to construction and any such ambiguity could be resolved in favour of a meaning that is consistent with the provisions of the said Agreement. Furthermore,if there be any difference between the language employed in the said rule and a corresponding provision of the said Agreement, the former is to be construed in the same sense as that of the said Agreement. 27. Now, Article 11.4 of the said Agreement inter alia stipulates that the rev .....

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