TMI Blog2022 (7) TMI 1199X X X X Extracts X X X X X X X X Extracts X X X X ..... w can be carried out by the DA, either on its own initiative or upon a request being made in that behalf by an interested party under sub-rule (1A) of Rule 23 of the 1995 Rules - sub-rule (1B) of Rule 23 provides, that ADD can be imposed for a period not exceeding five years from the date of its imposition unless the DA comes to a contrary conclusion. Once the investigation is commenced, the DA is obliged to inquire as to the existence, degree and effect of the alleged dumping in relation to the import of the subject article. The investigation, thus, requires the DA to identify the article and also submit findings, provisional or otherwise, to the Central Government concerning the normal value, export price and margin of dumping concerning the article under investigation, and that, such dumped article is causing injury or threatens injury to an industry established in India or would bring about material retardation in the establishment of such an industry in India - clearly, the nature of the inquiry, even in the first instance, when a decision is to be taken concerning the imposition of ADD, requires the DA to keep all the aforesaid facets in mind, before it can recommend to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plicable by virtue of sub-section (8) of section 9A of the CTA. A plain reading of sub-section (2) of section 130 of the 1962 Act would demonstrate, that the appeal to this Court could be preferred either by the Principal Commissioner of Customs or Commissioner of Customs or even other party aggrieved by any order of the Tribunal. The DA, to our minds, would if nothing else, fall within the category of other party . Therefore, this objection is without merit, and hence is rejected. The preliminary objection taken by the respondents, as regards the maintainability of the instant appeal, cannot be sustained - Registry is directed to list the appeal, for further directions, on the date - CUSAA7/2020& CM APPL. 29506/2020 - - - Dated:- 25-7-2022 - HON'BLE MR JUSTICE RAJIV SHAKDHER AND HON'BLE MS JUSTICE TARA VITASTA GANJU Appellants Through: Mr. Kirtiman Singh, CGSC with Srirupa Nag, Advocate Respondents Through: Mr. Ramesh Singh, Sr. Advocate with Mr. Akshay Soni, Mr. Anshuman Sahri, Mr. Sharad Bansali, Advocates for R-1 R-2 [Physical Hearing/Hybrid Hearing (as per request)] RAJIV SHAKDHER, J.: Preface: 1. This matter is at the inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... review investigation, in consonance with the provisions of Rule 23(1B) of the Customs Tariff (Identification, Assessment and Collection of Anti-dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995[in short 1995 Rules ]. 11. Accordingly, appellant no.1via communication dated 04.05.2018 listed the matter before it, for affording an oral hearing to the respondents. 12. After the preliminaries concerning filings were over, appellant no.1 finally heard the matter on 15.05.2018. 12.1 Upon culmination of the hearing, appellant no.1 via order dated 17.05.2018, rejected the application preferred by the respondents, and those who were similarly circumstanced. 13. The conclusion arrived at by appellant no.1 was, that the respondents i.e., the domestic industry had failed to make out a demonstrable case of continued injury, either in terms of volume or price, or other economic parameters, such as sales, production, capacity utilization, profits and cash profits. 14. Besides this, appellant no.1 also concluded, that the claim of the respondents and other applicants, that there was a likelihood of recurrence of the injury, in the event of cessation of ADD ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Supreme Court, lodged an appeal with the Tribunal, which, as alluded to hereinabove, was disposed of via the impugned order. 23. Given the fact, that the Supreme Court had quashed the Gujarat High Court judgment, appellant no.1 via a notification dated 28.09.2019 rescinded the notification dated 10.10.2013, whereby the imposition of ADD continued to remain operable. 24. In the first instance, the appeal was listed before the Court on 19.11.2020, when it was adjourned to 07.12.2020, as the concerned bench could not convene. 24.1 On 07.12.2020, a coordinate bench of this Court, while issuing notice in the appeal, stayed the operation of the impugned order passed by the Tribunal, albeit till the next date of hearing. 25. This order i.e., the order dated 07.12.2020 has continued to remain in operation up until now. 26. The record shows, that objection concerning the maintainability of the appeal, was raised on behalf of the respondents on 15.03.2022 and reiterated on 07.04.2022. 27. It is in this backdrop, that the appellants have approached this Court and the issue concerning maintainability of the appeal has come up for consideration. Submissions of the couns ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ad to continuation or recurrence of dumping or injury to the domestic industry. 36.1 The contention was, that the impugned order has been passed, bearing in mind the parameters provided in Rule 23(1B), read with Rules 17 and 18 of the 1995 Rules. 37. Furthermore, Mr Ramesh Singh relied upon the impugned order passed by the Tribunal, and the decision of the DA, to demonstrate that they were inextricably connected to the imposition of ADD. 37.1 According to Mr Ramesh, while the Tribunal, via the impugned order, had remitted the matter to the DA for re-determination of the quantum of ADD which ought to be imposed, if so necessary, with the condition that till such time a decision is made, the ADD already in force would continue to prevail, the DA, which had taken a converse decision, held that continuation of anti-dumping is not warranted. 38. Thus, the submission before us was, that since both the impugned order, as well as the order of DA concerns the determination of the rate of duty (i.e., ADD) no appeal would lie to this Court. 39. It was contended, that a holistic view of the aforementioned provisions of the 1962 Act,1995 Rules and CTA would show, that the secon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6. Accordingly, as a logical sequitur to the aforesaid submission, it was argued that the judgment rendered in ERNST and Young would have no application. 47. In support of this plea, reliance was placed by Mr Kirtiman Singh on the following judgments: 1. Commissioner of Custom, ICD, New Delhi v. Chandra Prabhu International Ltd. 2014 SCC OnLine Del 1064 2. Jaiswal Neco Ltd. V. Commissioner of Customs, Visakhapatnam (2015) 17 SCC 769 47.1 Furthermore, Mr Kirtiman Singh submitted, that a perusal of the impugned order would show, that the Tribunal has remitted the matter to appellant no.1 to re-determine the quantum of ADD if found necessary, and in the meanwhile, continue the ADD presently imposed. The instant appeal has been filed to assail this direction of the Tribunal. The proposed question of law, which has been framed in the instant appeal, veers around the issue as to whether or not there is a need to continue to ADD for another five years, having regard to the facts subsisting in the instant case. In other words, was there a likelihood of dumping and injury being caused to the domestic industry, in case ADD was discontinued? Thus, the Tribunal, in the appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le appended to the CTA. 53. CTA, inter alia, provides for levy of additional duty (equal to excise duty for the time being leviable on like articles produced or manufactured in India), countervailing duty (CVD); safeguard duty and ADD. This is apparent on a bare perusal of Sections 3, 8(B), and 9(A) of the said Act i.e., CTA. 53.1 Thus, while the 1962 Act is broadly concerned with the imposition of customs duty to generate revenue for the State, the duties embedded in the CTA, to which reference is made hereinabove, are in the nature of trade remedial measures. ADD falls in this genre. These are protective measures (not in the sense of being protectionist) taken by a country, in consonance with the WTO agreements to shield its domestic industry from the injury that may be caused on account of goods being imported to the country at export prices, which are lower than the normal value prevalent in their home country. ADD is imposed to correct trade distortions triggered by the employment of unfair trade practices. Likewise, CVD acts as a counterforce to export subsidies extended by the country from which goods are exported. Similarly, Safeguard Duties are imposed to counter t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dumping in relation to the imported article ,(ii) identify the article liable for ADD, (iii) submit findings, provisional or otherwise with respect to: normal value, export price and margin of dumping in relation to the article under investigation , (iv) the injury or threat of injury to an industry established in India or material retardation to the establishment of an industry in India consequent upon import of such article from specified countries. 58.1 Lastly, the DA is required to recommend to the Central Government, the amount of ADD, equal to the margin of dumping or less, which if levied, would remove the injury to the domestic industry. In considering this aspect, the DA is required to bear in mind, the principles incorporated in Annexure III to the 1995 Rules.13 59. Furthermore, the DA is also required to indicate the date of commencement of imposition of ADD. 60. Last but not least, the DA is also required to review, in consonance with the provisions of the CTA and 1995 Rules, the need for continuance of ADD. 61. The DA is obligated to conduct its investigations expeditiously, and in appropriate cases, shall record preliminary findings concerning the aspects ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts the prescribed threshold, as discussed above, provided in the first proviso to Rule 5(3) of the 1995 Rules read with the explanation appended thereto. It is only when the applicant/complainant, which ordinarily represents the domestic industry, meets the prescribed threshold, that an investigation can be triggered by the DA. The exceptions to this are: information received from the Commissioner of Customs appointed under the Act or from other sources concerning the existence of circumstances referred to in Rule 5(3)(b) of the 1995 Rules i.e., there is dumping which is causing injury to the domestic market and there is a causal link between the dumped imports and the alleged injury. It is only in such a situation, which is exceptional, that a suo motu investigation can be ordered by the DA. 69. Therefore, the foundation of an investigation, whether based on a complaint preferred by the representations of the domestic industry or information received otherwise, is the subsistence of evidence concerning aspects referred to hereinabove i.e., dumping, injury and the causal link between the dumped goods and the alleged injury. 70. Once the investigation is commenced, the DA is o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t in the possibility of either the injury caused to the domestic industry continuing or recurring. 74. Mr Ramesh Singh s contentions, to the contrary, do not impress us, as they proceed on, perhaps, an erroneous basis, that ADD is a revenue earning measure, like customs duty. 75. A trade remedial measure such as ADD has several nuances. 75.1 A good illustration of the same is found in Rule 15, which, inter alia, authorizes the DA to suspend or terminate the investigation, if the exporter of the article in question furnishes an undertaking to revise the prices so that exports of the said article are not made at dumped prices , or where imports are made from specified countries, the exporter of the concerned goods undertakes to revise the prices, so that the injurious effect of dumping is eliminated. No such provision is available qua customs duty in the 1962 Act. 76. Mr Ramesh Singh, in support of his submissions, that the instant appeal wasnot maintainable, placed considerable reliance on the judgement of the Division Bench of this Court in ERNST and Young. This was a judgement, wherein the Court was called upon the rule on the interplay between the provisions of sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the Supreme Court had stated that questions relating to rate of duty and valuation for the purpose of assessment as defined in the Explanation to sub-section (5) to section 129D of the Customs Act, would include question relating to classification of goods under the tariff, whether or not they are covered by exemption notification; whether value for the purpose of assessment should be enhanced or reduced, etc. It was further observed that statutory definition accords to the meaning given to the expression above. For the purpose of present controversy, we are inclined to ignore and not take into consideration the Explanation to section 129D or sub-section (5) to section 35E. However, in spite of the said position, we do not think that the decision in the case of Delhi Gymkhana Club Ltd., [2009] 25 VST 285 (Delhi) is required to be referred to a larger Bench. Determination of any question relating to rate of tax would necessarily directly and proximately involve the question, whether activity falls within the charging section and service tax is leviable on the said activity. The said determination is integral and an important injunct to the question of rate of tax. In case se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... will the withdrawal lead to continuation or recurrence of injury. 79.1 This exercise, in our opinion does not concern itself directly with the rate of duty, as is contended on behalf of the respondents. The DA is required to conclude, whether the trade remedial measure, which was put in place in the first instance, had worked or not, and whether withdrawal of the measure would lead to the continuation or recurrence of unfair trade practice, (which is what dumping conceptually involves) leading to trade distortion in the domestic market. 80. It may also be helpful to read the decision in ERNST and Young along with the earlier decision in Delhi Gymkhana, where the revenue had issued show cause notices, demanding service tax from the respondent club for providing space to its members for setting up mandaps. 80.1 The Division Bench ruled, once again relying on the judgement in Naveen Chemicals, that the issue was one, which related to chargeability to tax, and thus the rate of duty to be imposed would essentially fall for consideration. 81. As indicated above, one cannot but agree with the ratio of judgements of the coordinate benches in ERNST and Young and Delhi Gymkhana. ..... 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