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2019 (9) TMI 539

..... g in or exported from China PR, Japan, Korea, European Union, South Africa, Tiwan, Thailand and USA - validity of imposition of ADD on the PUI from the date of publication of the notification on 24 October, 2017 and not retrospectively from the date of initiation of the anti-circumvention proceedings on 19 February, 2016 - Rule 5 of the Customs Tariff (Identification, Assessment and Collection of Anti-Dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995. HELD THAT:- Section 9A (1) of the Tariff Act empowers the Central Government to impose anti-dumping duty. Section 9A (1A) of the Tariff Act deals with circumvention of anti-dumping duty. It provides that if the Central Government is of the opinion that circumvention of anti-dumping duty has taken place whereby the anti-dumping duty imposed has been rendered ineffective by altering the description or the composition of the article, then it may extend the anti-dumping duty to such article. In exercise of the powers conferred under section 9A (6) of the Tariff Act, the Central Government framed Rules called the 1995 Rules. Rule 25 deals with circumvention of anti-dumping duty, while Rule 26 deals with initiatio .....

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..... ble arbitrary exercise of quasi judicial power. It is seen that the Designated Authority, without examining whether the anti-dumping duty should be levied retrospectively from the date of initiation of the investigation, recommended that the anti-dumping duty will be applicable from the date of its notification by the Central Government. The Central Government issued the Notification No. 52/2017 that was published in the Gazette of India, Extraordinary on 24 October, 2017 imposing anti-dumping duty from the date of publication in the Gazette. The matter, therefore, needs to be remitted to the Designated Authority to record a specific finding as to whether the anti circumvention duty should be levied retrospectively from the date of initiation of the investigation - Appeal allowed by way of remand. - Anti Dumping Appeal No. 50291 of 2018, 50334 of 2018 - Final Order No. 51204-51205/2019 - 12-9-2019 - HON BLE MR. JUSTICE DILIP GUPTA, PRESIDENT, HON BLE MR. C.L. MAHAR, MEMBER (TECHNICAL) AND HON BLE MS. RACHNA GUPTA, MEMBER (JUDICIAL) Ms. Meenakshi Arora, Senior Advocate, Shri Jitendra Singh And Ms. Roshni Singh, Advocate for the Appellant Mr. Ameet Singh, Mr.Rakesh Kumar, Mr.Naresh T .....

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..... ovisional anti-dumping duty on 22 April 2009. 3. The Domestic Industry, before the expiry of the period of five years for which period the anti-dumping duty was levied, filed an application for a sunset review of the anti-dumping duty and based on the substantiated application filed by the Domestic Industry, a sunset review of the anti-dumping investigation was initiated by notification dated 17 April 2014. The Designated Authority gave its final findings on 12 October 2015 recommending the extension of anti-dumping duty for another five years. This was accepted by the Central Government by notification dated 11 December 2015. 4. The Domestic Industry, thereafter filed an application under Rule 26 of 1995 Rules for initiation of anti-circumvention investigations for the PUI and the Designated Authority initiated anti-dumping investigation into imports of the PUI from the Subject Countries by notification dated 19 February 2016. The product alleged to have been circumventing anti-dumping duty was Cold-rolled Flat stainless steel of the same description as the product under the notification dated 11 December 2015 but having width more than the width of the product described and cover .....

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..... hat the volume of imports of the product covered by the notification dated 11 December 2015 from non Subject Countries remained more or less the same during the period of investigation. 7. Thereafter, in terms of the provisions of the Rule 16 of the 1995 Rules, the Designated Authority informed all interested parties of the essential facts under consideration which formed the basis for its decision. 8. The Domestic Industry filed post disclosure comments. It was emphasised that anti-dumping circumvention duty should be imposed from the date of initiation of the investigation on 19 February, 2016 in terms of Rule 27 of the 1995 Rules, otherwise the motive of the importers to delay the imposition of duty would be achieved. The relevant portion of the post disclosure comments on this aspect are as follows: i. Domestic Industry requests the Authority to recommend the anti-circumvention duties from the date of initiation of the investigation in terms of the Rule 27. The Authority would like to appreciate that good 18 months have lapsed since the initiation of the investigation while the Domestic Industry continued to suffer because of the established malpractice of circumvention of the .....

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..... holds that undermining of anti-dumping duty on PUC by circumvention due to imports of PUI not intended to be used as PUI is in fact undermining the remedy provided by the Authority to provide a level playing field to PUC. The issue of Dumping, Injury and Casual Link on PUC has already been settled in the original investigation and thereafter in Sunset Review investigations. - The Authority therefore holds that genuine use of PUI imports as PUI only without slitting needs to be exempted from AD Duties. Many interested parties have also argued that PUC and PUI are not like article and that is why PUI remained excluded in original investigation. The Authority therefore reiterates that by allowing PUI for use as PUI only such issues are also addressed as any use of imported PUI for PUC or Non PUC / PUI purpose by the importers / users only needs to be saddled with extension of existing AD Duties on PUC to PUI. Therefore, the primary objective of this investigation is to ensure that the interested parties are not negating or diluting the effect of the anti-dumping duties imposed by the Central Government by indulging in any kind of circumvention of duties. Further the Rules relating to .....

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..... No. 61/2015-Customs (ADD) dated 11 December 2015. iii. a) The PUI which is imported by an importer for end use in the same form without slitting (except to the extent of tolerances as mentioned in the Custom Notification No. 61/2015-Customs (ADD) dated 11 December 2015) will not be liable for payment of the applicable AD Duty as per Custom Notification No. 61/2015-Customs (ADD) dated 11 December 2015. b) Further in case a PUI is slitted into 2 or more PUI only i.e. sizes above 1250 mm (with permissible tolerances), it will not be subjected to any anti-dumping duty (for example a 2600 mm piece slit into two 1300 mm size pieces). c) However if PUI is slit for a combination of PUI and below PUI size or below PUI sizes, it will be liable for applicable AD Duty. (For example a 1800 mm piece being slit into a 1400 mm and a 400 mm piece or a 2200 mm piece is slit into 1400 mm and 800 mm or a 1400 mm piece being slit into 600, 500 and 300 mm sizes). vi. For the cases falling under (iii) (a) and / or (iii) (b) above, the importer will give a legally enforceable undertaking to the concerned Custom Authorities. v. The Ministry of Finance may put in place an appropriate monitoring mechanism t .....

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..... r Rule 27 of the 1995 Rules to recommend anti-dumping duty on imports of articles found to be circumventing and existing anti-dumping duty retrospectively from the date of initiation of investigation and so the Designated Authority erred in not recommending anti-dumping duty from the date of initiation of the anti-circumvention proceedings.; (iv) The exporters/importers had devised a novel method to overcome and overreach the anti-dumping duties on the PUC by importing PUI and by slitting. Thus, the product was rendered as PUC and thereby over reached the imposition of anti-dumping duty and frustrating the object and purpose of levy of anti-dumping duty on PUC. ; (v) While reading Rule 27 (1), of the 1995 Rules, the word may used therein with reference to retrospectively has to be constructed as shall . In support of this contention reliance has been placed on the following decisions: a. State of Uttar Pradesh Vs. Jogendra Singh (1964) 2 SCR 197 : AIR 1963SC1618 b. Official Liquidator Vs. Dharti Dhan (P) Ltd. (1977) 2 SCC 166. c. Shri Rangaswami, Textile Commissioner and others. Vs. Sagar Textile Mills (P) Ltd and another (1977) 2 SCC 578; (vi) The object and purpose of the anti-du .....

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..... g duty by issuance of a Notification. In this context the word may used in Rule 27(1) of the 1995 is extremely critical. If the word may has to be read as shall , then the Designated Authority would be seen to be giving a command to the Central Government. This would fall foul to the entire scheme and would no longer be in the realm of a recommendation.; (iv) It is for the Central Government to decide whether the anti-dumping duty is to be extended from the date of initiation of the investigation under Rule 26 or such date as recommended by the Designated Authority. If these two dates were always to be same, there would be no requirement for the latter part of Rule 27(3) (i.e. or such date as may be recommended by the Designated Authority). This part of the provision is for a reason, as the Designated Authority may recommend anti-dumping duty either prospectively or retrospectively. Resultantly, under Rule 27(3) it is for the Central Government to decide, after considering the recommendation, whether duty is to be imposed from the date of initiation of the investigation under Rule 26 or such date as may be recommended by the Designated Authority. If the argument of the Domestic Ind .....

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..... overnment, on such inquiry as it may consider necessary, is of the opinion that circumvention of anti-dumping duty imposed under sub-section (1) has taken place, either by altering the description or name or composition of the articles subject to such anti-dumping duty or by import of such article in an unassembled or disassembled form or by changing the country of its origin or export or in any other manner, whereby the anti-dumping duty so imposed it rendered ineffective, it may extend the anti-dumping duty to such article or an article originating in or exported from such country, as the case may be. 19. Section 9A (3) of the Tariff Act deals with retrospective levy of anti-dumping duty and is reproduced below:- 9A (3) If the Central Government, in respect of the dumped article under inquiry, is of the opinion that- (i) there is a history of dumping which caused injury or that the importer was, or should have been, aware that the exporter practices dumping and that such dumping would cause injury; and (ii) the injury is caused by massive dumping of an article imported in a relatively short time which in the light of the timing and the volume of imported article dumped and other .....

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..... d or complete article. Explanation I - Value means the cost of assembled, complete or finished article less value of imported parts or components. Explanation II - For the purposes of calculating the value‟, expenses on account of payments relating to intellectual property rights, royalty, technical know-how fees and consultancy charges, shall not be taken into account. 2. Where an article subject to anti-dumping duty is imported into India from country of origin or country of export notified for the levy of anti-dumping duty after being subjected to any process involving alteration of the description, name or composition of an article, such alteration shall be considered to circumvent the anti-dumping duty in force if the alteration of the description or name or composition of the article subject to anti-dumping duty results in the article being altered in form or appearance even in minor forms regardless of the variation of tariff classification, if any. 3. Where an article subject to anti-dumping duty is imported into India through exporters or producers or country not subject to anti-dumping duty, such exports shall be considered to circumvent the anti-dumping duty in for .....

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..... in writing by the designated authority. Rule 27. Determination of circumvention- 1) The designated authority, upon determination that circumvention of anti-dumping duty exists, may recommend imposition of anti-dumping duty to imports of articles found to be circumventing an existing anti-dumping duty or to imports of article originating in or exported from countries other than those which are already notified for the purpose of levy of the anti-dumping duty and such levy may apply retrospectively from the date of initiation of the investigation under Rule 26. 2) The designated authority shall issue a public notice recording its findings. 3) The Central Government may, pursuant to the recommendations made by the designated authority, extend the anti-dumping duty to imports of article including imports of such article from the date of initiation of the investigation under rule 26 or such date as may be recommended by the designated authority. 22. It would be seen that section 9A (1) of the Tariff Act empowers the Central Government to impose anti-dumping duty. Section 9A (1A) of the Tariff Act deals with circumvention of anti-dumping duty. It provides that if the Central Government i .....

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..... learned Counsel for the parties on this specific issue and these submissions have been noted, but it will not be appropriate for the Tribunal to examine this issue in the first instance as it is the Designated Authority which has to first record a specific finding. 25. It is a settled law that the impugned order has to be judged on the basis of the reasons given in the order and the order cannot be supported by fresh reasons advanced during the course of hearing of the Appeal. In this connection reliance can be placed on the decision of the Supreme Court in Mohinder Singh Gill and another Vs. Chief Election Commissioner, New Delhi (1978) 1 SCC 405. The observations are: 8. The second equally relevant matter is that when a statutory functionary makes an order based on certain grounds, its validity must be judged by the reasons so mentioned and cannot be supplemented by fresh reasons in the shape of affidavit or otherwise. Otherwise, an order bad in the beginning may, by the time it comes to court on account of a challenge, get validated by additional grounds later brought ,out. We may here draw attention to the observations of Bose J. in Gordhandas Bhanji (1) "Public orders, pu .....

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..... gn 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. 40. In the present case, the NIP computed by the DA was much lower than that computed by the Appellant, and the reasons for such variance and detailed calculations were not disclosed by the DA to the Appellant. No good reasons were given for reducing the cost price of electricity supplied by the Appellant produced in its captive power plant. This was clearly illegal. ... ... ... 45. In our opinion, excessive and unwarranted claim of confidentiality defeats the right to appeal. In the absence of knowledge of the consequences, grounds, reasoning and methodology by which the DA has arrived at its decision and made its recommendation, the parties to the proceedings cannot effectively exercise their right to appeal either before the Tribunal or this Court. This is contrary to the view taken by the Constitution Bench of this Court in S.N. Mukherjee's case. (emphasis supplied) 29. In Asstt. Commr. Commercial Tax Department v/s. Shukla & Brot .....

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..... m. Then alone administrative authorities and tribunals exercising quasi-judicial function will be able to justify their existence and carry credibility with the people by inspiring confidence in the adjudicatory process. The rule requiring reasons to be given in support of an order is, like the principle of audi alteram partem, a basic principle of natural justice which must inform every quasi-judicial process and this rule must be observed in its proper spirit and mere pretence of compliance with it would not satisfy the requirement of law. ... (emphasis supplied) 30. In Kranti Associates Pvt. Ltd. Vs. Masood Ahmed Khan 2011 (273) ELT 345 (SC), reported in the Supreme Court after referring to the earlier decisions that hold that a quasi judicial authority must record reasons in support of its conclusion because reasons assure that the discretion has been exercised by the decision maker on relevant grounds and by disregarding irrelevant considerations, also observed that recording of reasons operates as a valid restraint on any possible arbitrary exercise of quasi judicial power. In paragraph 51 of the judgement, the Supreme Court summarised the position of law and the said paragra .....

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..... rrors but also makes them subject to broader scrutiny. (See David Shapiro in Defence of Judicial Candor (1987) 100 Harward Law Review 731-737). (n) Since the requirement to record reasons emanates from the broad doctrine of fairness in decision making, the said requirement is now virtually a component of human rights and was considered part of Strasbourg Jurisprudence. See (1994) 19 EHRR 553, at 562 para 29 and Anya v. University of Oxford, 2001 EWCA Civ 405, wherein the Court referred to Article 6 of European Convention of Human Rights which requires, adequate and intelligent reasons must be given for judicial decisions . (o) In all common law jurisdictions judgments play a vital role in setting up precedents for the future. Therefore, for development of law, requirement of giving reasons for the decision is of the essence and is virtually a part of Due Process . 31. Thus, it is clear from the aforesaid decisions of the Supreme Court that the principles of natural justice not only require the Designated Authority to grant an opportunity to the party to show cause but the order passed by the Designated Authority should also give reasons for arriving at conclusions and any violation .....

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