TMI Blog2022 (9) TMI 1171X X X X Extracts X X X X X X X X Extracts X X X X ..... that is, whether cessation of countervailing duty would lead to continuation or recurrence of subsidisation and injury. These pre-requisites are required to be satisfied at the time of imposing as well as discontinuing the countervailing duty. In M/S. KUMHO PETROCHEMICALS CO. LTD., FAIRDEAL POLYCHEM LLP VERSUS UNION OF INDIA AND OTHERS [ 2014 (7) TMI 732 - DELHI HIGH COURT] , the Delhi High Court held in relation to the anti-dumping duty that the procedural requirements included finding of causal link between dumping and inquiry to domestic inquiry. It was held that the injury is to be determined on objective examination of positive evidence of extent of dumping assessed through loss of market share of domestic inquiry in comparison to dump imports on the effective prices of said goods. In para 14 of the decision, the High Court delineated as to what was the comprehensive procedural requirements relating to investigation. The enabling power not to continue the anti-dumping duty/countervailing duty available under the provision, would not obliterate the requirement for the Countervailing Authorities to disregard or overlook the statutory requirement of fulfiling condition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thority. The Notification No.1/2022-Customs (CVD) dated 01.02.2022 issued by respondent no.1 rescinding the countervailing duty is hereby quashed and set aside - Respondent no.2 shall immediately proceed in respect of Sunset review process in relation to the continuance or otherwise of the countervailing duty already commenced as per Notification dated 08.10.2021. - R/SPECIAL CIVIL APPLICATION NO. 4495 of 2022 WITH CIVIL APPLICATION (FOR JOINING PARTY) NO. 1 of 2022 - - - Dated:- 2-9-2022 - HONOURABLE MR. JUSTICE N.V.ANJARIA AND HONOURABLE MR. JUSTICE BHARGAV D. KARIA MR MIHIR JOSHI, SR. ADVOCATE ASSISTED BY MS GARGI R VYAS FOR THE PETITIONER MR DEVANG VYAS, ADDL. SOLICITOR GENERAL WITH MR. JASH THAKKAR, FOR THE RESPONDENT MR ARJUN M JOSHI FOR THE APPLICANTS IN CIVIL APPLICATION JUDGMENT PER : HONOURABLE MR. JUSTICE N.V.ANJARIA The crisp questions of law arising for consideration in this Special Civil Application, are as under: (i) Whether in the midst of Sunset review investigation in respect of continuance of countervailing duty, already initiated and kept undecided, during the currency of the period of original Notification imposing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owers under Sub-section (1) and Sub-section (6) of the Customs Tariff Act, 1975 read with Rules 20 and 22 of the Customs Tariff (Identification, Assessment and Collection of countervailing duty on Subsidized Articles and for Determination of Injury) Rules, 1995. Basic Facts 3. The facts and related aspects necessary for comprehending the controversy, as also in order to appreciate the rival contentions raised, may be set out. 3.1 Petitioner no.1, a Public Limited Company, is engaged in the business of manufacturing Cold Rolled Stainless Steel Strips/Coils. Petitioner no.2 is the share-holder and Director of petitioner no.1 Company. 3.1.1 The product in the manufacturing of which the petitioner Company is engaged is used for architecture, building and construction; also in automobile, railway and transport, processed engineering and for consumer durable including household utensils. The product is stated to be highly capital intensive product. It is stated by the petitioner that the product in which it has been dealing in, public, private, medium, small and marginal enterprises have invested around Rs.450000 crores. 3.1.2 Respondent no.1 is the Department of Revenu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th the provisions of the Act and countervailing Rules, Sunset Review was initiated for investigation concerning imports of Flat Rolled Products of Stainless Steel , originating in or exported from China PR. The Association called All India Stainless Steel Cold Rolled Association supported the request for extension of countervailing duty. Upon the representations by the domestic industry, the respondent no.2 initiated Sunset Review investigation. 3.1.6 The petitioner stated that while initiating investigations, the respondent no.2 had specifically noted that there was sufficient evidence that cessation of existing countervailing duty was likely to lead to continuation or recurrence of subsidy. It was stated that having satisfied itself on the basis of the prima facie evidence regarding likelihood of continuation or recurrence of subsidy and injury, the Sunset Review process was started in accordance with Section 9 of the Act read with Rule 24 of the countervailing duty Rules. Such process for Sunset Review was commenced by issuing Notification dated 08.10.2021. 3.1.7 It is further case of the Petitioners that while respondent no.2 called for relevant information from the st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relating to type of subsidies, which are permissible as per the Agreement of Subsidies and Countervailing Measures ('ASCM'). 3.3.1 The Supreme Court in S S Enterprise Vs. Designated Authority [2005 185 ELT 375 (SC)] observed in relation to the anti-dumping duty thus, which would also apply to countervailing duty, ..The imposition of dumping duty is under Section 9A of the Customs Tariff Act 1975 and the Rules and is the outcome of the General Agreement on Tariff and Trade (GATT) to which India is a party. The purpose behind the imposition of the duty is to curb unfair trade practices resorted to by exporters of a particular country of flooding the domestic markets with goods at rates which are lower than the rate at which the exporters normally sell the same or like goods in their own countries so as to cause or be likely to cause injury to the domestic market. The levy of dumping duty is a method recognized by GATT which seeks to remedy the injury and at the same time balances the right of exporters from other countries to sell their products within the country with the interest of the domestic markets. Thus the factors to constitute 'dumping', is (i) a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e based on facts and not merely on allegations of remote possibility or conjecture. It outlines the factors which the investigating authorities may consider to determine the injury, which may be imminent and clearly forceable judging by the factors (i) nature of the subsidy or subsidies in question and the trade effects likely to arise therefrom; (ii) a significant rate of increase of subsidized imports into the domestic market indicating the likelihood of substantially increased importation; (iii) sufficient freely disposable, or an imminent, substantial increase in, capacity of the exporter indicating the likelihood of substantially increased subsidized exports to the importing Member's market, taking into account the availability of other export markets to absorb any additional exports; (iv) whether imports are entering at prices that will have a significant depressing or suppressing effect on domestic prices, and would likely increase demand for further imports; and (v) inventories of the product being investigated. 3.4.3 Article 19 speaks about imposition and collection of countervailing duty. The countervailing duty may be imposed upon determination of the existence an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Statutory provisions 3.5 The Central Government legislated on the lines of aforementioned international agreement. Section 9 and section 9-A in the Customs Tariff Act, 1975 came to be enacted and the rules regarding imposition of countervailing duty and anti-dumping duty came to be framed. 3.5.1 Section 9 of the Act is in respect of countervailing duty on subsidised articles. The entire provision is extracted hereinbelow. Countervailing Duty on Subsidized Articles.- (1) Where any country or territory pays, bestows, directly or indirectly, any subsidy upon the manufacture or production therein or the exportation therefrom of any article including any subsidy on transportation of such article, then, upon the importation of any such article into India, whether the same is imported directly from the country of manufacture, production or otherwise, and whether it is imported in the same condition as when exported from the country of manufacture or production or has been changed in condition by manufacture, production or otherwise, the Central Government may, by notification in the Official Gazette, impose a countervailing duty not exceeding the amount of such subsidy. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arlier, cease to have effect on the expiry of five years from the date of such imposition : Provided that if the Central Government, in a review, is of the opinion that the cessation of such duty is likely to lead to continuation or recurrence of subsidization and injury, 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 countervailing duty may continue to remain in force pending the outcome of such a review for a further period not exceeding one year. (7)The amount of any such subsidy as referred to in sub-section (1) or subsection (2) shall, from time to time, be ascertained and determined by the Central Government, after such inquiry as it may consider necessary and the Central Government may, by notification in the Official Gazette, make rules for the identification of such article and for the assessment and collection of any countervailing duty imposed upon the importation thereof under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... countervailing duty or an anti-dumping duty has been imposed on any article to prevent injury or threat of an injury to the domestic industry of a third country exporting the like articles to India; (c) the Central Government may not levy - (i) any countervailing duty under section 9, at any time, upon receipt of satisfactory voluntary undertakings from the Government of the exporting country or territory agreeing to eliminate or limit the subsidy or take other measures concerning its effect, or the exporter agreeing to revise the price of the article and if the Central Government is satisfied that the injurious effect of the subsidy is eliminated thereby; (ii) any anti-dumping duty under section 9A, at any time, upon receipt of satisfactory voluntary undertaking from any exporter to revise its prices or to cease exports to the area in question at dumped price and if the Central Government is satisfied that the injurious effect of dumping is eliminated by such action. (2) The Central Government may, by notification in the Official Gazette, make rules for the purposes of this section, and without prejudice to the generality of the foregoing, such rules may provide for the m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be framed by the Central Government in exercise of powers conferred by subsection( 7) of Section 9 and sub-section(2) of section 9B of the Customs Tariff Act, 1975. 3.7.1 Having a bird's eyeview of the rules and pinpointing the relevant, under Rule 3, the Central Government appoints designated authority which is respondent no.2 DGTR herein. Rule 4 deals with the duties of the designated authority, rule 5 is about the decision as to country of original and Rule 6 refers to initiation of investigation. Rule 7 contains the principles governing the investigation, Rules 8 and 9 are about confidential information and accuracy of information respectively, whereas Rule 10 is about investigation in the territory of the other specified countries, Rule 11 mentions about nature of subsidy and rule 12 states about calculation of the amount of countervailing duty. 3.7.2 Rule 13 refers to the determination of injury and Rule 14 mentions about designated authority to proceed satisfactorily with conduct of investigation and to record preliminary findings, Rule 15 is about levy of provisional duty and Rule 16 is termination of investigation, Rule 17 speaks of suspension or termination ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w.:] 3.7.4 It would be seen from the above Rules that the designated authority will undertake the process of investigation, shall thereupon, on ascertainment of continuance of subsidy and injury, domestic market to recommend the Central Government, if the recommendation is for withdrawal of duty, it would lead to revocation of the notification and withdrawal of duty. In the alternative, the Central Government may extend the duty for further period of five years. 3.7.5 It is noticeable that Rule 13 of the Rules mentions about determination of injury and for determining of injury, principle are set out to be taken into account by the designated authority. 3.7.6 Such principles listed at Annexure-I to the Rules contemplate extensive inquiry into different aspects, extracted below. (1) A determination of injury for purposes of rule 13 shall be based on positive evidence and involve an objective examination of both (a) the volume of the subsidized imports and the effect of the subsidized imports on prices in the domestic market for like products and (b) the consequent impact of these imports on the domestic producers of such products. (2) With regard to the volume of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lar import. 3.8.2 Therefore, whatever legal principles are enunciated by the courts in the context of the scheme of the provisions and the judgments are rendered in relation to the anti-dumping duty, and theywould apply in their reasoning and ratio, mutatis mutandis to the countervailing duty. Contentions of petitioners 4. Proceeding to consider the rival contentions canvassed, the learned senior counsel for the petitioners Mr. Mihir Joshi with learned advocates Ms. Gargi Vyas and Mr. Arjun M. Joshi highlighted the concept of countervailing duty to submit that the provisions of Section 9 and 9A of the Act are pursuant to GATT and based on ASCM and that India being a signatory to the treaty has bound herself to the manner in which it can impose, modify, suspend or revoke the countervailing duty. It was submitted that as per the scheme of the Act read with the GATT agreement, respondent no.1 does not have any inherent or suo motu powers to impose, modify or withdraw the countervailing duty in absence of recommendations of respondent no.2. 4.1 It was submitted that the designated authority, respondent no.2 has to follow the procedure contemplated in section 9(6) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e recurrence of subsidy and injury, the decision regarding the imposition or withdrawal has to be taken. 4.1.4 Learned senior advocate for the petitioners then referred to section 21 of the General Clauses Act to submit that respondent no.1 does not have the benefit of section 21 for the reason that cessation or amendment to earlier notification could be done only following the procedure in the same manner to the procedure adopted while imposing the duty. For the purpose of the proposition that section 21A of the General Clauses Act would come into aid of the authority, learned senior advocate pressed into service the decisions of the Supreme Court including in State of Bihar vs. D.N. Ganguly [AIR 1958 SC 1018, paras 9-11 and 14]. 4.1.5 Learned senior advocate for the petitioners in order to buttress the submission that the powers exercise by respondent no.1 under the Act in relation to countervailing duty is quasi-judicial, relied on the decision of the Supreme Court in Saurastra Chemicals Ltd. Vs. Union of India [2000 (118) ELT 305 (SC)] as also in Tata Chemicals Ltd. Vs. Union of India [(2008) 17 SCC 180, paragraph 4 and 5]. Yet another decision in PTC India Ltd. Vs. Gener ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ublic interest.' 4.2.1. Learned Additional Solicitor General Mr. Devang Vyas assisted by learned advocate Mr. Jash Thakkar, on behalf of the respondents, raised the following further submissions, (i) The impugned decision is taken in public interest and keeping in view the development of nation and the economic interest. (ii) It is in the realm of policy making powers of the Government. (iii) The Central Government has exercised its sovereign power in issuing the impugned notification. (iv) The policy decision cannot be said to be in contravention of statutory provisions. (v) While taking policy decision, which is a complex process, number of factors and inputs from various quarters are taken into account. (vi) As per the statutory scheme, imposition of any tax duty or revocation notification in that regard is the prerogative of the Central Government. Such decisions are taken after taking into consideration the various factors as is done in the present case. (vii) The decision taken was part of budgetary provision and allocation and was approved by the highest authority. (viii) The decision was also laid before the Parliament and the same received ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he power under sub-section(6) of Section 9 of the Act by mode of subordinate legislation, that is, by issuing necessary notification. (g) Such powers flow from the provisions of Section 9(6) of the Act read with Rules 20 and 22 of the anti-subsidy Rules even if there is no recommendation from the DGTR. 4.2.3 Learned Additional Solicitor General for the respondents in order to substantiate his submission that in policy matters, the court would not interfere relied on decision of the Supreme Court in Small Scale Industries Manufacturers Association Vs. Union of India [(2021) 8 SCC 511]. By pressing into service, another decision of the Apex Court in Sales Tax Officers and Another Vs. Shree Durga Oil Mills and Another [(1998) 1 SCC 572], it was submitted that the promissory estoppel would not apply. From Arun Kumar Agarwal Vs. Union of India [(2013) 7 SCC 1], it was submitted that in the matters of economic issues, the court will not interfere as it does not possess expertise. The decision in Everyday Industries India Limited Vs. Union of India and Another [(2019) SCC Online Del 7865], Sankar Ram Co.Vs. Kasi Naicker and Others [(2003) 11 SCC 699] and M.Ahammedkutty Ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Vs. G.M. Exports and Ors. [(2016) 1 SCC 91] surveyed various decisions to summarise the following principles - 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 foster respect for international law and treaty obligations. As a result, rules of international law which are not contrary to domestic law are followed by the courts in this country. This is a situation in which there is an international treaty to which India is not a signatory or general rules of international law are made applicable. It is in this situation that if there happens to be a conflict between domestic law and international law, domestic law will prevail. (2) In a situation where India 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 tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Notification dated 1.2.2022 rescinding the countervailing duty was in exercise of sovereign power by the Government. Thereby, it was sought to be suggested that once the sovereign power is exercised by the Central Government, the rescinding of the duty was justified, at whatever stage it was done. 6.1.1 The submissions were based on the misconception of sovereign power of the state and the attributes of sovereignty. 6.1.2 The concept of sovereignty is an all time assertion of authority by the nation country to the outside world. The concept of sovereignty is in its essence that the country is independent in its all actions, decisions, reactions and in taking its own stand as a nation before the outside world. It signifies that the State will have the final authority to make or enact laws of the governance in all spheres. 6.1.3 There would be no gainsaying that when the Parliament enacts laws, it exercises the sovereign power. The Customs Tariff Act, 1975 and the Rules of 1995 are themselves the product of a sovereign exercise by our Parliament. The authority of the provisions in the enactment not only binds the subjects it governs, but also binds the authorities functio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s in the next submission canvassed by learned Additional Solicitor General that impugned notification rescinding the countervailing duty is in the realm of policy, it is trite that it will not be permissible for the State to implement any purported policy decision when the policy decision is a product to be preceded by statutory exercise for taking such decision, without acting in accordance with provisions of law. 6.3.1 Examining the line of decisions on this count, in K.K. Bhalla Vs. State of M.P. [(2003) 6 SCC 581], the question was regarding grant of lease of land on concessional terms under the MP Nagar Niyam, 1975. The proposal for the said purpose could be made only by the Development Authority and power of the State Government was limited for grant of previous approval thereto and to ultimate grant of lease on concessional terms. It was ruled that none of the relevant provisions enable the State to usurp the jurisdiction of the Development Authority. 6.3.2 The principle was propounded that the statutory authority cannot act contrary to the scheme framed by them or contrary to the purpose for which they were supposed to act under the Scheme. The Supreme Court held th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have to follow the codified procedure. It is an outcome of quasi-judicial exercise. It involves investigation of facts and determination of jurisdictional elements. 6.3.6 When the decision is arrived at after complying with the mandatory statutory provisions, it becomes a statutory decision. It is not a policy decision so simply stated. The judicial review would extend to such decision on the ground that the action of decision or notification issued thereunder is vitiated by non-compliance of statutory requirements. (d) Laying before the Parliament 6.4 There was yet another attempt to submit on part of the respondent that in respect of the impugned Notification, judicial review would not be permissible. Section 7(3) of Customs Tariff Act initially referred to by learned Additional Solicitor General, which contains the provision about laying the Notification issued under Section 7(2) before each house of the Parliament and will come into effect upon approval of the Parliament after modification etc., if any. This Section deals with the Notification in respect of customs duty, which provision is not applicable here. Therefore the entire reliance on Section 7(3) was miscon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the House but shall cease to have effect if annulled by a resolution of the House. (c) Laying subject to affirmative resolution.- This technique may take two shapes - (i) that the rules shall have no effect or force unless approved by a resolution of each House of Parliament; (ii) that the rules shall cease to have effect unless approved by an affirmative resolution. In both these processes, it is the duty of the government to move a resolution. (d) Laying in draft subject to negative resolution.-Such a provision provides that when any Act contains provision for this type of laying the draft rules shall be placed on the table of the House and shall come into force after forty days from the date of laying unless disapproved before that period. (e) Laying in draft subject to an affirmative resolution.- In this type of laying the instruments or draft rules shall have no effect unless approved by the House. 6.4.6 Section 9(8) of the Act, as noted above, provides only for placing the notification before each house of the Parliament. There is no further requirement or condition. In the provision of laying of such nature, the underlying idea and intention of the legi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xpressed that though price fixation is of legislative character, but since an appeal is provided under Section 111 of the Act, it becomes quasi-judicial. 6.5.3 In Reliance Industries Vs. Designated Authorities [(2006) 10 SCC 368], it was held, 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. (para 39) 6.5.4 Under Section 9-C of the Customs Tariff Act, appeal lies against the order of determination or review of the countervailing duty before the Customs, Excise and Service Tax Appellate Tribunal, constitution under Section 129 of the Customs Act, 1962. In view of this, the Notification necessarily takes a quasi-judicial colour. In Tata Chemicals Ltd. Vs. Union of Indi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bout the quasi judicial function, in Indian National Congress Vs. Institute of Social Welfare [(2002) 5 SCC 658]. It was observed in para 24 that, the legal principle as to when an act of statutory authority would be a quasi-judicial act, is that where (a) a statutory authority empowered under a statute to do any act (b) which would prejudicially affect the subject (c) although there is no lis or two contending parties and the contest is between the authority and the subject and (d) the statutory authority is required to act judicially under the statute, the decision of said authority is quasi-judicial. 7.1.3 The Apex Court in Indian National Congress (supra) was considering the question whether while exercising powers under Section 29A of the Representation of People Act, 1951, while registering a political party, the Election Commission exercises quasi judicial power or not. It was held that in view of the requirement under the provisions of Section 29A that the Commission is to give decision only after making an inquiry, the Commission acts quasi judicially and the decision rendered by it is a quasi judicial order. 7.1.4 The Supreme Court observed that what distingui ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the Act are quasi-judicial exercise and that these notifications are amenable to appeal and the challenge, and are also subject to judicial review in the writ jurisdiction also, the essential aspects of the provisions concerning the controversy may be analysed, also with reference to the judicial decisions in that regard. 7.2.1 As noted above, the notification levying the countervailing duty once issued under Section 9(1) of the Act, has an expiry period from the date of imposition, unless revoked earlier. It also provides that respondent no.1 may extend the period further, if it is of the opinion that the cessation of such duty is likely to lead to continuation or recurrence of subsidy and injury . 7.2.2 Two important pre-requisites are postulated by the first proviso of Section 9(6) of the Act. They are, (a) a review being conducted by respondent no.2, and (b) subsequent formation of an opinion by respondent no.1 on the basis of the review, that is, whether cessation of countervailing duty would lead to continuation or recurrence of subsidisation and injury. These pre-requisites are required to be satisfied at the time of imposing as well as discontinuing the counterva ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsequence of which would be the extension of the operation of the period of anti-dumping duty for another period of five years. This is subject to the provisions of sub-rule (1) of Rule 23 of the Anti-Dumping Rules, under which the Designated Authority is empowered to review the anti-dumping duty imposed from time to time. (para 37) 7.3.2 The followings observations are to be pertinently noticed, Having regard to the scheme of the above mentioned provisions of the statute, once anti- dumping duty has been initially imposed, it would be ordinarily continued for five years unless on a review it is found by the Designated Authority that there has been such a significant change in the facts and circumstances, that it is considered necessary either to withdraw or modify appropriately the anti-dumping duty which has been imposed. It is, therefore, clear that unless the Designated Authority suo motu or the applicant for review is in a position to establish clearly that there has been a significant change in th\e facts and circumstances relating to each of the basic requirements or conditions precedent for imposing duty, the finding given by the Designated Authority at the time o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llowed while imposing the anti-dumping duty in the first instance. To put it otherwise, this exercise contemplates hearing the views of all stakeholders by giving them adequate opportunity in this behalf and thereafter arriving at a conclusion that the continuation of the anti-dumping duty is justified, otherwise injury to the domestic industry is likely to continue or reoccur, if the said anti-dumping duty is removed or varied. Since this exercise is likely to take some time and may go beyond the period stipulated in the original notification imposing anti-dumping duty, in order to ensure that there is no vacuum in the interregnum, second proviso to subsection (5) of Section 9A of of the Act empowers the Central Government to continue anti-dumping duty for a further period not exceeding one year, pending the outcome of such a review. (para 30) 7.4.2 The Supreme Court agreed with the High Court that the proviso to sub-section (5) of section 9-A of the Act is an enabling provision, which gives maximum life for five years to the imposition of anti-dumping duty by issuing a particular notification, which can of course be extended by issuing fresh notification. 7.4.3 However, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e above are the essential operational considerations emanating from the statute provisions. Before the Central Government may issue any notification regarding levy of countervailing duty, the procedure prescribed under the Act and Rules regarding the recommendation to be arrived at by the designated authority, is mandatory. These requirements cannot be bypassed. The notifications regarding countervailing duties have to be based on the determination and establishment of ingredients namely likelihood of continuance or recurrence of subsidy and injury which would result for the domestic industry. These are the founding facts before the Central Government can act to issue the notification. These facts are to be established through statutory procedure contemplated in the provisions of the Act and the Rules, as explained above. 7.6.1 The recommendations of the designated authority would contain the findings on these facts and aspects. They are the jurisdictional facts. They are the foundations for the Central Government to take a decision and to issue the notification. The jurisdictional facts cannot be bypassed. 7.6.2 The words 'unless revoked earlier' in section 9(6) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... [(2005) 7 SCC 234], that where power is given in law to do a certain thing in certain way, the thing must be done in that way or not at all. 8. On behalf of the petitioners, learned senior counsel sought to submit that Section 21 of the General Clauses Act, under which power to issue notification would include power to rescind notification, would not apply and would not come to aid. 8.1 Section 21 of the General Clauses Act reads as under.- 21. Power to issue, to include power to add to , amend, vary or rescind, notifications, orders, rules or bye-laws.-Where, by any Central Act or Regulation, a power to issue notifications, orders, rules, or bye-laws is conferred, then that power includes a power, exercisable in the like manner and subject to the like sanction and conditions (if any) to add to, amend, vary or rescind any notifications, orders, rule or bye-laws so issued. 8.2 The provision contemplates that wherever power is conferred to issue notification etc., such power would include the power to rescind the Notification as well. Such power, the provision says, is exercisable in the like manner and subject to the like sanction and conditions (if any) . What wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... laid down and the exercise contemplated in sub-section(6) of Section 9 of the Customs Tariff Act, 1975 read with Rule 24 of the Customs Tariff (Identification, Assessment and Collection of Countervailing Duty on Subsidized Articles and for Determination of Injury) Rules, 1995. (iv) The procedure and exercise contemplated in Section 9(6) and 9(7) of the Customs Tariff Act read with the relevant Rules could not be treated directory. Treating the exercise as per the provision to be directory would amount to negating the whole scheme of the countervailing duty laws and would mean negation thereof. The Central Government cannot treat the procedure in the Act and the Rules as optional on the spacious grounds. (v) The determination that 'cessation of such duty is likely to lead to continuation or recurrence of subsidisation and injury' is sine qua non in the scheme of the provisions before notification to rescind the duty could be issued. The establishing the ingredient 'continuance or recurrence of subsidization' by the exporting counter, and 'injury to the domestic industry' are the founding facts, in the nature of jurisdictional facts. 10. The Supreme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -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. (para 8) 11. As the court has held herein that the Notification dated 1.2.2022 of respondent No.1 rescinding the countervailing duty stand illegal having been issued dehors the scheme of the provisions of Customs Tariff Act, 1975 and the applicable rules without undertaking the exercise in mandatory provisions of law and it is unilateral decision impressible in law as taken without waiting for recommendation of designated authority and thereby violating the jurisdictional requirements. It is therefore liable to be set aside. 11.1 The sequator would be that it would revive the effect of original notification dated 7.9.2017. The countervailing duty would become leviable. 11.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te action and/or decision in accordance with law at its end. (v) As the Notification dated 01.02.2022 is set aside, the original Notification dated 07.09.2017 shall revive and countervailing duty shall become leviable on the product in question. (vi) The Sunset review initiated by Notification dated 08.10.2021 shall be completed in accordance with law. (vii) Since the review process pursuant to Notification dated 08.10.2021 is underway, and is required to be completed by Respondent no.1- designated authority as per the directions No.(ii), (iii) and (vi) herein, in the interregnum, that is from the date of the Notification dated 01.02.2022, till the respondent no.1 takes appropriate decision in review, the levy of countervailing duty shall continue. Rule is made absolute in the aforesaid terms. Civil Application does not survive as the counsel for the applicants were heard. It is accordingly disposed of (N.V.ANJARIA, J) (BHARGAV D. KARIA, J) FURTHER ORDER At this stage, learned advocate Mr. Siddharth Dave, appearing on behalf of learned Additional Solicitor General, Mr. Devang Vyas requested that the implementation of the judgment and order may b ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
