TMI Blog2019 (9) TMI 539X X X X Extracts X X X X X X X X Extracts X X X X ..... ping 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 initiation of investigation to determine circumvention. Rule 27 deals with determination of circumvention. It provides that 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 and such levy may apply retrospectively from the date of initiation of the investigation under Rule 26. Sub-Rule (3) of Rule 27 provides that the Central Government may, pursuant to the recommendations made by the designated authority, extend the anti-dumping duty to imports of article from the date of initiation of the investigation under Rule 26 or such date as may be recommended by the Designated Authority. In the instant case, after the Designated Authority informed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... way of remand. - Anti Dumping Appeal No. 50291 of 2018, 50334 of 2018 - Final Order No. 51204-51205/2019 - Dated:- 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 Thacker, Mr.Vivek Sharma, Mr.Abhishek, Mr. Akhil Sacher, Mr. Vineet Sinha, Advocates And Authorised Representative for the Department ORDER JUSTICE DILIP GUPTA Appellant No. 1 M/s. Jindal Stainless Limited and Appellant No. 2 M/s Jindal Stainless (Hisar) Ltd, which shall be referred to as the Domestic Industry, initiated anti-circumvention investigation of Cold-rolled Flat products of width not covered under customs notification dated 11 December 2015 PUI originating in or exported from China PR, Japan, Korea, European Union, South Africa, Tiwan, Thailand and USA The Subject Countries . The Designated Authority initiated anti-dumping investigation on imports of the PUI on 19 Febru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 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 covered under the said notification. According to the Domestic Industry, the PUI, which was the subject matter of the alleged circumvention, had all the essential and basic characteristics of the product earlier subjected to anti-dumping duty with the only difference being in terms of its width. 5. On the basis of the submissions made by the producers / exporter / importers and the submissions made by the Domestic Industry, the Designated Authority found that the PUI had all the essential basic characteristics of the product earlier subjected to anti-dumping duty except for the width. The findings of the Designated Aut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 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 anti-dumping duties carried out by the exporting producers / exporters. ii. Domestic Industry submits that if the Authority recommends only prospective anti-circumvention duties, the motive of importers / exporters to delay the extension of duties by blocking the investigation will be achieved. It is submitted that in such a situation the decision of the Authority will only be partially effective and in fact, would amount to an undue favour to the interested parties who have been found to be circumventing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 circumvention do not have explicit provisions of either Rule 11 or Annexure II for anti-circumvention investigation. Keeping this in view, the Authority is of the view that the large scale shift of volumes to PUI at prices much lower than the effective prices of PUC has rendered the existing Anti-Dumping Duties on PUC largely ineffective. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rm 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 to monitor the genuineness of the usage of the PUI so imported for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (iii) The Designated Authority has a power under 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, Text ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (iii) The Designated Authority merely recommends to the Central Government and it is the Central Government which decides whether or not to accept the recommendation and from which date to impose the anti-dumping 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 Gover ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nment may, by notification in the Official Gazette, impose an anti-dumping duty not exceeding the margin of dumping in relation to such article. ----------- 18. Section 9A (1A) of the Tariff Act that was inserted by Finance Act, 2011 with effect from 8 April, 2011 deals with circumvention of anti-dumping duty and is as follows: 9A (1A) Where the Central Government, 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 re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... embled, finished or completed in India or in such country, such assembly, finishing or completion shall be considered to circumvent the anti-dumping duty in force if,- a) the operation started or increased after, or just prior to, the anti-dumping investigations and the parts and components are imported from the country of origin or country of export notified for purposes of levy of anti-dumping duty, and; b) the value consequent to assembly, finishing or completion operation is less than thirty-five percent of the cost of assembled, finished 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty in force. 4) The designated authority may initiate an investigation to determine the existence and effect of any alleged circumvention of the anti-dumping duty in force where it is satisfied that imports of the article circumventing an anti-dumping duty in force are found to be dumped: Provided that, the designated authority shall notify the government of the exporting country before proceeding to initiate such an investigation. 5) The provisions regarding evidence and procedures under rule 6 shall apply mutatis mutandis to any investigation carried out under this rule. 6) Any such investigation shall be concluded within 12 months and in no case more than 18 months of the date of initiation of investigation for reasons to be recorded 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 co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 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. The relevant portion of the post disclosure comments have been reproduced in paragraph 8 of this order. It was pointed out that the motive of the importers/ exporters would be achieved if the Designated Authority recommends prospective anti-circumvention duty. The Designated Authority examined and analysed the submissions made by the parties but what is noticed is that there is no discussion at all in final findings of the Designated Authority about this specific submission made by the Domestic Industry in the post disclosure comments that the Designated Authority should recommend anti-circumvention duty from the date of initiation of the investigation in terms of the provisions of Rule 27 of the 1995 Rules. 24. Though elaborate submissions were made by 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. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ries Ltd v/s Designated Authority and other (2006) 10 SCC 368. The Supreme Court observed that the nature of proceedings before the Designated Authority are quasi judicial and reasons have to be recorded by the designated in support of its findings. The observations are: 38. We are of the opinion that the nature of the proceedings before the DA are quasi-judicial, and it is well-settled that a quasijudicial 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. 39. 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 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case, vitiate the order itself. Such rule being applicable to the administrative authorities certainly requires that the judgment of the Court should meet with this requirement with higher degree of satisfaction. The order of an administrative authority may not provide reasons like a judgment but the order must be supported by the reasons of rationality. The distinction between passing of an order by an administrative or quasi-judicial authority has practically extinguished and both are required to pass reasoned orders. In the case of Siemens Engineering and Manufacturing Co. of India Ltd. v. Union of India and Anr. [AIR 1976 SC 1785], the Supreme Court held as under :- 6.......If courts of law are to be replaced by administrative authorities and tribunals, as indeed, in some kinds of cases, with the proliferation of Administrative Law, they may have to be so replaced, it is essential that administrative authorities and tribunals should accord fair and proper hearing to the persons sought to be affected by their orders and give sufficiently clear and explicit reasons in support of the orders made by them. Then alone administrative authorities and tribuna ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... countries committed to rule of law and constitutional governance is in favour of reasoned decisions based on relevant facts. This is virtually the Life blood of judicial decision making justifying the principle that reason is the soul of justice. (i) Judicial or even quasi-judicial opinions these days can be as different as the judges and authorities who deliver them. All these decisions serve one common purpose which is to demonstrate by reason that the relevant factors have been objectively considered. This is important for sustaining the litigants‟ faith in the justice delivery system. (j) Insistence on reason is a requirement for both judicial accountability and transparency. (k) If a Judge or a quasi-judicial authority is not candid enough about his/her decision making process then it is impossible to know whether the person deciding is faithful to the doctrine of precedent or to principles of incrementalism. (l) Reasons in support of decisions must be cogent, clear and succinct. A pretence of reasons or rubber-stamp reasons‟ is not to be equated with a valid decision making process. (m) I ..... X X X X Extracts X X X X X X X X Extracts X X X X
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