Full Judgment Text
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Reserved on: 03.07.2014
Pronounced on : 11.07.2014
+ W.P.(C) 1851/2014, C.M. NO. 3866/2014 & 3867/2014
M/S. KUMHO PETROCHEMICALS CO. LTD. …..Petitioner
Through: Sh. V. Lakshmikumaran, Sh. S.
Seetharaman, Sh. Atul Gupta, Sh. Lakshmi. N. and
Sh. Aditya Bhattacharya, Advocates.
Versus
UNION OF INDIA AND ORS. ……..Respondents
Through: Sh. Himanshu Bajaj, Central Govt.
Standing Counsel and Sh. M.P. Singh, Advocate
with Sh. J. Gupta, Director.
Ms. Shakshi Aggarwal, Advocate, for Resp. Nos. 1
and 2.
Sh. Sandeep Sethi, Sr. Advocate with Sh. Rajesh
Sharma, Advocate, for Resp. No.3.
+ W.P.(C) 1866/2014, C.M. NO. 3886/2014 & 3887/2014
FAIRDEAL POLYCHEM LLP …..Petitioner
Through: Sh. V. Lakshmikumaran, Sh. S.
Seetharaman, Sh. Atul Gupta, Sh. Lakshmi. N. and
Sh. Aditya Bhattacharya, Advocates.
Versus
UNION OF INDIA AND ORS. ……..Respondents
Through: Sh. Himanshu Bajaj, Central Govt.
Standing Counsel and Sh. M.P. Singh, Advocate
with Sh. J. Gupta, Director.
Ms. Shakshi Aggarwal, Advocate, for Resp. Nos. 1
and 2.
Sh. Rajiv Bansal with Sh. Rajesh Sharma,
Advocates, for Resp. No.3.
CORAM:
HON'BLE MR. JUSTICE S. RAVINDRA BHAT
HON'BLE MR. JUSTICE VIBHU BAKHRU
W.P.(C) 1851/2014 & W.P.(C) 1866/2014 Page 1
MR. JUSTICE S. RAVINDRA BHAT
%
C.M. NO. 3867/2014 (for exemption) IN W.P.(C) 1851/2014
C.M. NO. 3887/2014 (for exemption) IN W.P.(C) 1866/2014
Allowed, subject to all just exceptions.
W.P.(C) 1851/2014, C.M. NO. 3866/2014
W.P.(C) 1866/2014, C.M. NO. 3886/2014
1. This judgment is in respect of writ petitions W.P.(C) 1851/14 and
1866/14. The petitioners calls into question the legality of the Central
Government's decision initiating anti-dumping duty extension
proceedings under Section 9A of the Customs Tariff Act, 1975 (“CTA”)
as well as the validity of notification No. 06/2014-Customs (ADD) by
which anti-dumping duty was levied on Acrylonitrile Butadiene Rubber
("the product"), originating in, or exported from Korea RP. The said
notification sought to amend a previous one, dated 2nd January 2009
(hereafter "the original notification") by which such anti-dumping duty
was levied for five years.
2. The brief facts are that the Central Government, in terms of
provisions of the CTA, held inquiry in accordance with Rules framed
under that enactment; pursuant to the report furnished by the
Designated Authority, the Central Government imposed anti-dumping
duty on the product, by notification issued by the Ministry of Finance
(Department of Revenue), No. 01/2009-Customs, dated 02-01-2009
(and published in the Gazette of India, Extraordinary, Part II, Section 3,
Sub-section (i), by G.S.R. 5(E), dated the 2nd January, 2009). The
W.P.(C) 1851/2014 & W.P.(C) 1866/2014 Page 2
notification in express terms was to be in force for five years, i.e. till 01-
01-2014.
3. The petitioner in W.P.(C) 1851/2014 is a producer and exporter
of the product from Korea RP and the petitioner in W.P. (C)
1866/2014 is an importer of the product from Korea RP. Both
petitioners are aggrieved by the notifications dated 31-12-2013 and
23-1-2014 by Respondent 1. The Respondent No. 1 is the Ministry of
Finance, Union of India. Respondent No. 2 is the Directorate of Anti-
dumping and Allied Duties appointed under Section 9A of the CTA
read with Rule 3 of the Customs Tariff (Identification, Assessment
and Collection of Anti-Dumping Duty on Dumped Articles and for
Determination of Injury), 1995 (hereinafter referred to as "the
Rules"). The Respondent No. 3 is the applicant domestic industry
which filed a request to initiate a sunset review to extend the anti-
dumping duty on import of the product originating in, or exported
from, Korea RP.
4. India is a signatory to the Marrakesh Agreement establishing
the World Trade Organization in 1994. Pursuant to this, she has
implemented the Agreement on Implementation of Article VI of the
GATT 1994 referred to as the Anti-dumping Agreement (hereafter
referred to as "ADA"), which is one of the Agreements that forms part
of the WTO treaty. In terms of Article 18.4 of the ADA, each Member
country is required to ensure the conformity of its laws, regulations
and administrative procedures with the provisions of the ADA. As a
consequence, Sections 9A, Section 9AA, Section 9B and Section 9C
W.P.(C) 1851/2014 & W.P.(C) 1866/2014 Page 3
of the CTA were enacted. The Rules were framed in terms of the
powers conferred by Section 9A (6) of the CTA. Section 9A(1)
empowers the Central Government, by notification in the official
gazette, to impose an anti-dumping duty not exceeding the margin of
dumping i.e. i.e. the difference between the normal value and the
export price, in relation to any article which is exported to India at less
than its normal value. Under Rule 3, the Central Government has
constituted the second respondent to investigate the existence, degree
and effect of any alleged dumping and to submit its final findings in
this regard and also to recommend the amount of anti-dumping duty
which, if levied, would be sufficient to remove injury.
5. In terms of Section 9A(5) of the Act and Rule 23(lB) of the
Rules, such duties are effective only for a period not exceeding five
years from the date of its imposition. The duty automatically expires
five years from the date of imposition unless the second respondent, in
a review initiated before the end of the five year period, concludes that
that the expiry of the said anti-dumping duty is likely to lead to
continuation or recurrence of dumping and injury to the domestic
industry. Such reviews are commonly referred to as "sunset reviews".
6. The petitioner in W.P.(C) 1851/2014 was subjected to the anti-
dumping duty levy in terms of the original notification, urges that the
Central Government could not levy and collect any anti-dumping duty
after 01-01-2014. It urges that if the Central Government were of the
opinion that such course of action was warranted, by virtue of
continuing injury to domestic manufacturers or domestic market on
W.P.(C) 1851/2014 & W.P.(C) 1866/2014 Page 4
account of practices of such exporters, it ought to have issued a
notification in the Gazette in terms of first proviso Section 9A (5)
which enables the extension of such anti-dumping duty levy beyond
five years. Counsel urges that by virtue of operation of Rules 6, 19, 20
and 23, such extension ought to have been notified in the official
Gazette and published before the expiry of the five year period from
the date of the original notification, i.e. 02-01-2009. The petitioner
buttresses this proposition by placing reliance on the second proviso to
Section 9A (5), which states that in the event the Central Government
wishes to continue the levy during the pendency of review/extension
enquiry, which, though initiated before the expiry of the five year
period could not be completed before its expiry, then that too should
be manifested in an express notification, issued before the expiry of
the first notification. If there is such a valid notification, the levy is
valid for a period of one year.
7. The petitioners complain that in the present case, the notice
proposing the review was published on 06-01-2014, after the
expiration of the original notification. Thus, neither the review for
continuing the duty, nor the levy during the pendency of inquiry was
valid. The petitioners also urge that the notification of 23-01-2014,
amending the 2-1-2009 notification so as to make it remain in force till
1-1-2015, was issued without any legal authority. Counsel argued that
once the original notification lapsed on 01-01-2014, there could have
been no question of resorting to the subterfuge of amending such
expired notification. Here it was argued that there is no substantive
W.P.(C) 1851/2014 & W.P.(C) 1866/2014 Page 5
power to amend the terms of the original notification which could
have not been in force for more than one year. Had the Central
Government desired that such tax had to be levied during the
interregnum (when review for continuing the levy was pending) a
specific order should have been made concurrently with the
publication of the extension. Counsel for the petitioners argued here
that mere amendment of the terms of the original notification cannot
legitimately amount to a valid levy. So long as the substantive
provisions of Section 9A (5), particularly its second proviso are not
complied with, the levy, even for an interregnum period would not be
legal.
8. It is argued on behalf of the petitioners that the materials on
record, in the form of RTI query replies, establish beyond doubt that
the initiation of the sunset review in the present case took place on 31-
12-2013, upon an application filed in that regard by the domestic
industry on 11-11-2013. The irrefutable evidence was that though the
initiation was published on 31-12-2013, the Gazette copy was sent for
distribution to Kitab Mahal, a book store, only on 06-01-2014. This
was the earliest point in time for the publication of the sunset review
initiation. That being the case, argued counsel, both the initiation, and
the subsequent notification of 23-01-2014 amending a notification
which ceased to exist, is invalid and the attempt to enforce it as
without authority of law. It was also contended during the hearing that
such amendment was impermissible and could not even be sustained
by recourse to any provision of the General Clauses Act, 1897,
W.P.(C) 1851/2014 & W.P.(C) 1866/2014 Page 6
because the original notification - as it had finite life was temporary
legislation and, therefore, beyond the purview of that Act. In support
of the submission, the counsel relied on the ruling of the Supreme
Court in State of Punjab v Mohar Singh AIR 1955 SC 84 where,
commenting on the applicability of Section 6 of the General Clauses
Act, it was held that:
"the consequences laid down in section 6 of the Act will
apply only when a statute or regulation having the force of
a statute is actually repealed. It has no application when a
statute, which is of a temporary nature, automatically
expires by efflux of time."
Reliance is also placed on the judgment reported as Jindal Oil Mill &
Ors vs Godhra Electricity Co. Ltd AIR 1969 SC 1225.
9. It was contended on behalf of the Union of India, the
Designated Authority as well as the domestic industry applicants, that
the first proviso to Section 9A (5) of the CTA as well as a fair reading
of Rule 6 do not lead to the conclusion that the intention to review and
extend the anti-dumping duty, in the facts of a given case, have to be
necessarily published and made available to all, before the expiry of
the original notification. It was pointed out that in this case, the
extension notification was in fact printed on 31-12-2013 in the Official
Gazette. The compelling inference which the Court should draw,
therefore, is that the requirement of Section 9-A (5) in that regard had
been fulfilled. It was argued that the sunset review proposed by the
impugned notification of 31-12-2013 is mandatory in terms of the
W.P.(C) 1851/2014 & W.P.(C) 1866/2014 Page 7
judgment of this Court, in Indian Metal and Ferro Alloys v.
Designated Authority, 2008 (224) ELT 375 Del.
10. Learned counsel argued that whenever sunset review is
initiated, apart from the requirement of commencing it before the
expiration of the original period, there is also an element of
invariability in the imposition of the duty, which would be concededly
valid for one year, pending such sunset review, under second proviso
to Section 9A (5). It was argued that this is to be inferred from the fact
that the initiation itself is a ground for extending the duty for such
period, since the degree of injury prevailing is presumed to exist. This
is because there is no requirement of any form of inquiry into the
injury; the inquiry which is undertaken prior to the imposition of the
duty through the first notification is deemed sufficient and the injury
deemed to continue. However, if the sunset review inquiry is not
closed by one year, the duty would lapse. As a result, argue counsel
for the respondents, the notification of 23-01-2014 - which sought to
amend the original notification- is valid, and cannot be set aside.
Relevant provisions
11. It is necessary to, at this stage, set out the relevant statutory
provisions under which the anti-dumping duty, which is the subject
matter of these proceedings, was imposed. Section 9A of the CTA
contemplates levy of anti-dumping duty on dumped articles. It reads
as follows:
W.P.(C) 1851/2014 & W.P.(C) 1866/2014 Page 8
"(1) Where 7[any article is exported by an exporter or
producer] from any country or territory (hereinafter in this
section referred to as the exporting country or territory) to
India at less than its normal value, then, upon the
importation of such article into India, the Central
Government may, by notification in the Official Gazette,
impose an anti-dumping duty not exceeding the margin of
dumping in relation to such article.
Explanation. - For the purposes of this section, -
(a) "margin of dumping", in relation to an article, means the
difference between its export price and its normal value;
(b) "export price", in relation to an article, means the price
of the article exported from the exporting country or
territory and in cases where there is no export price or
where the export price is unreliable because of association
or a compensatory arrangement between the exporter and
the importer or a third party, the export price may be
constructed on the basis of the price at which the imported
articles are first resold to an independent buyer or if the
article is not resold to an independent buyer, or not resold
in the condition as imported, on such reasonable basis as
may be determined in accordance with the rules made under
sub-section (6);
(c) "normal value", in relation to an article, means -
(i) the comparable price, in the ordinary course of trade, for
the like article when5[destined for consumption] in the
exporting country or territory as determined in accordance
with the rules made under sub-section (6); or
(ii) when there are no sales of the like article in the ordinary
course of trade in the domestic market of the exporting
country or territory, or when because of the particular
market situation or low volume of the sales in the domestic
market of the exporting country or territory, such sales do
not permit a proper comparison, the normal value shall be
either -
W.P.(C) 1851/2014 & W.P.(C) 1866/2014 Page 9
(a) comparable representative price of the like article when
exported from the exporting country or1[territory to] an
appropriate third country as determined in accordance with
the rules made under sub-section (6); or
(b) the cost of production of the said article in the country of
origin along with reasonable addition for administrative,
selling and general costs, and for profits, as determined in
accordance with the rules made under sub-section (6):
Provided that in the case of import of the article from a
country other than the country of origin and where the
article has been merely transshipped through the country of
export or such article is not produced in the country of
export or there is no comparable price in the country of
export, the normal value shall be determined with reference
to its price in the country of origin.
(1A) xxx
(2) The Central Government may, pending the
determination in accordance with the provisions of this
section and the rules made thereunder of the normal value
and the margin of dumping in relation to any article, impose
on the importation of such article into India an anti-
dumping duty on the basis of a provisional estimate of such
value and margin and if such anti-dumping duty exceeds the
margin as so determined: -
(a) the Central Government shall, having regard to such
determination and as soon as may be after such
determination, reduce such anti-dumping duty; and
(b) refund shall be made of so much of the anti-dumping
duty which has been collected as is in excess of the anti-
dumping duty as so reduced.
(2A) xxx
(3) If the Central Government, in respect of the dumped
article under inquiry, is of the opinion that -
W.P.(C) 1851/2014 & W.P.(C) 1866/2014 Page 10
(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
circumstances is likely to seriously under-mine the remedial
effect of the anti-dumping duty liable to be levied, the
Central Government may, by notification in the Official
Gazette, levy anti-dumping duty retrospectively from a date
prior to the date of imposition of anti-dumping duty under
sub-section (2) but not beyond ninety days from the date of
notification under that sub-section, and notwithstanding
anything contained in any law for the time being in force,
such duty shall be payable at such rate and from such date
as may be specified in the notification.
(4) The anti-dumping duty chargeable under this section
shall be in addition to any other duty imposed under this Act
or any other law for the time being in force.
(5) The anti-dumping duty imposed under this section shall,
unless revoked earlier, 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 dumping 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 anti-dumping duty may
continue to remain in force pending the outcome of such a
review for a further period not exceeding one year.
W.P.(C) 1851/2014 & W.P.(C) 1866/2014 Page 11
(6) The margin of dumping as referred to in sub-section (1)
or sub-section (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 purposes of this section, and without
prejudice to the generality of the foregoing, such rules may
provide for the manner in which articles liable for any anti-
dumping duty under this section may be identified, and for
the manner in which the export price and the normal value
of, and the margin of dumping in relation to, such articles
may be determined and for the assessment and collection of
such anti-dumping duty.
(6A) The margin of dumping in relation to an article,
exported by an exporter or producer, under inquiry under
sub-section (6) shall be determined on the basis of records
concerning normal value and export price maintained, and
information provided, by such exporter or producer:
Provided that where an exporter or producer fails to
provide such records or information, the margin of dumping
for such exporter or producer shall be determined on the
basis of facts available.]
(7) Every notification issued under this section shall, as
soon as may be after it is issued, be laid before each House
of Parliament.
[(8) The provisions of the Customs Act, 1962 (52 of 1962)
and the rules and regulations made thereunder, including
those relating to the date for determination of rate of duty,
assessment, non-levy, short levy, refunds, interest, appeals,
offences and penalties shall, as far as may be, apply to the
duty chargeable under this section as they apply in relation
to duties leviable under that Act.]”
12. Section 9C of the CTA provides for an appeal against the order
passed under Section 9A to the Customs, Excise and Service Tax
W.P.(C) 1851/2014 & W.P.(C) 1866/2014 Page 12
Appellate Tribunal constituted under Section 129 of the Customs Act,
1962 (52 of 1962) (hereinafter referred to as the Appellate Tribunal).
The Rules (of 1995) prescribe an elaborate procedure for
identification, assessment and collection of anti-dumping duty on
dumped articles. The Rules, relevant for the present petition, reads as
under:
"6. Principles governing investigations. –
(1) The designated authority shall, after it has decided to
initiate investigation to determine the existence, de-gree and
effect of any alleged dumping of any article, issue a public
notice notifying its decision and such public notice shall,
inter alia, contain adequate informa-tion on the following :-
(i) the name of the exporting country or countries and the
article involved;
(ii) the date of initiation of the investigation;
(iii) the basis on which dumping is alleged in the
application;
(iv) a summary of the factors on which the allegation of
injury is based;
(v) the address to which representations by interested
parties should be directed; and
(vi) the time-limits allowed to interested parties for making
their views known, .
(2) A copy of the public notice shall be forwarded by the
designated au-thority to the known exporters of the article
alleged to have been dumped, the Governments of the
exporting countries concerned and other interested parties.
(3) The designated authority shall also provide a copy of
the application referred to in sub-rule (1) of Rule 5 to -
W.P.(C) 1851/2014 & W.P.(C) 1866/2014 Page 13
(i) the known exporters or to the concerned trade
association where the number of exporters is large, and
(ii) the governments of the exporting countries:
Provided that the designated authority shall also make
available a copy of the application to any other interested
party who makes a request therefor in writing.
(4) The designated authority may issue a notice calling for
any informa-tion, in such form as may be specified by it,
from the exporters, foreign produc-ers and other interested
parties and such information shall be furnished by such
persons in writing within thirty days from the date of receipt
of the notice or within such extended period as the
designated authority may allow on sufficient cause being
shown.
Explanation: For the purpose of this sub-rule, the notice
calling for infor-mation and other documents shall be
deemed to have been received one week from the date on
which it was sent by the designated authority or transmitted
to the appropriate diplomatic representative of the
exporting country.
(5) The designated authority shall also provide opportunity
to the indus-trial users of the article under investigation,
and to representative consumer organisations in cases
where the article is commonly sold at the retail level, to
furnish information which is relevant to the investigation
regarding dumping, in-jury where applicable, and causality.
(6) xxx
(7) xxx
(8) In a case where an interested party refuses access to, or
otherwise does not provide necessary information within a
reasonable period, or significantly impedes the
investigation, the designated authority may record its
find-ings on the basis of the facts available to it and make
W.P.(C) 1851/2014 & W.P.(C) 1866/2014 Page 14
such recommendations to the Central Government as it
deems fit under such circumstances.
23. Review.--
(1) Any anti-dumping duty imposed under the provision of
section 9A of the Act, shall remain in force, so long as and
to the extent necessary, to counteract dumping, which is
causing injury.
(1A) The designated authority shall review the need for the
continued imposition of any anti-dumping duty, where
warranted, on its own initiative or upon request by any
interested party who submits positive information
substantiating 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), any definitive anti-dumping duty levied under the Act,
shall be effective for a period not exceeding five years from
the date of its imposition, unless the designated authority
comes to a conclusion, on a review initiated before that
period on its own initiative or upon a duly substantiated
request made by or on behalf of the domestic industry,
within a reasonable period of time prior to the expiry of that
period, that the expiry of the said anti-dumping dity is likely
to lead to continuation or recurrence 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.
W.P.(C) 1851/2014 & W.P.(C) 1866/2014 Page 15
(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."
13. Section 9A was introduced pursuant to India's treaty obligations
under the GATT. As is apparent from its provisions and those
prescribed by the Rules, anti-dumping measures may be imposed if an
investigation conducted in conformity with the procedural
requirements, reveals (a) the existence of dumped imports; (b) that the
dumped imports are resulting in material injury to a domestic industry;
and (c) that there is a causal link between the dumped imports and the
injury. (http://www.wto.org/english/tratop_e/adp_e/adp_info_e.htm).
The determination of injury is dependent upon objective examination
based on positive evidence of the extent of dumping (assessed through
a loss of market share of the domestic industry in comparison to the
dumped imports) and the effect on prices of the same good in the
domestic market (assessed by whether there is a drop in prices or a
preclusion of a price increase), and the consequent impact of such
imports on the domestic industry like a decline in market shares,
profits, etc. A finding in regard to the causal link between the dumping
and injury to the domestic industry is the essential pre-requisite for
imposing an anti-dumping duty.
14. The broad and comprehensive procedural requirements relating
to investigations focus on the sufficiency of petitions to ensure that
unmerited investigations are not initiated, time periods for the
completion of investigation, and access to information to all interested
parties, along with reasonable opportunities to present their views and
W.P.(C) 1851/2014 & W.P.(C) 1866/2014 Page 16
arguments. Other requirements concern the offering, acceptance, and
administration of price undertakings by exporters in lieu of the
imposition of anti-dumping measures. The Rules further provide for
the timing of the imposition of anti-dumping duties, the duration of
such duties, and require Designated Authorities to periodically review
the continuing need for anti-dumping duties and price undertakings.
Anti-dumping proceedings are initiated based on an application made
by or on behalf of the concerned domestic industry to the Designated
Authority in the Department of Commerce for an investigation into
alleged dumping of a product into India. The interested parties to an
anti-dumping investigation include the domestic industry on whose
complaint the proceedings are initiated; the exporters or the foreign
producers of the like articles subject to investigation; the importers of
the same article allegedly dumped into India; the Government of the
exporting country/countries and the trade or business associations of
the domestic producers/importers/user industries of the dumped
product.
15. The Designated Authority is expected generally to initiate
proceedings for anti-dumping action on the basis of a petition received
from the domestic industry alleging dumping of certain goods and the
injury caused to it by such dumping. However, Rule 5(4) provides
for suo motu initiation of anti-dumping proceedings by the Designated
Authority on the basis of information received from the Collector of
Customs appointed under the Customs Act, 1962 or from any other
source. In such circumstances, the Authority initiates the anti-dumping
W.P.(C) 1851/2014 & W.P.(C) 1866/2014 Page 17
investigation on its own without any complaint/petition filed in this
regard provided the Authority is satisfied that sufficient evidence
exists as to the existence of dumping, injury and causal link between
the dumped imports and the alleged injury. After initiation of the suo
motu investigation, the same procedure, as the one based on a petition
as mentioned in the Rules, is followed. The remedy against dumping
is not always in the form of anti-dumping duty. The investigation may
be terminated or suspended after the preliminary findings, if the
exporter concerned furnishes an undertaking to revise his price to
remove the dumping or the injurious effect of dumping as the case
may be. No anti-dumping duty is recommended on such exporters
from whom price undertaking has been accepted (Rule 15). An interim
relief in the form of a provisional anti-dumping duty, pending the
finalization of investigation proceedings, can also be provided to the
affected domestic industry. Such provisional duty not exceeding the
margin of dumping may be imposed by the Central Government on
the basis of the preliminary finding recorded by the Designated
Authority. The provisional duty can be imposed only after the expiry
of 60 days from the date of initiation of investigation and will remain
in force only for a period not exceeding 6 months, extendable to nine
months under certain circumstances (Rule 13). Rule 21 provides that if
the final duty levied is less than the provisional duty which has already
been levied and collected, the differential amount already collected as
provisional duty shall be refunded. If the final duty imposed is more
than the provisional duty already imposed and collected, the difference
shall not be collected. If the provisional duty is withdrawn, based on
W.P.(C) 1851/2014 & W.P.(C) 1866/2014 Page 18
the final findings of the Designated Authority, then the provisional
duty already collected shall be refunded.
16. The scheme of Section 9A and the Rules does not permit levy
of anti-dumping duty on retrospective basis. The only exception where
anti-dumping duty can also be levied on a retrospective basis is in case
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 the injury 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 circumstances is likely to seriously undermine the
remedial effect of the anti-dumping duty liable to be levied. Even
here, the anti-dumping duty cannot be levied retrospectively beyond
90 days from the date of issue of notification imposing duty (Section
9A (3)).
Analysis and findings
17. In the present case, the first- original notification of 02-01-
2009- was preceded by an inquiry in terms of the Act and Rules. There
is no controversy about its validity for the first period of five years.
The petitioners’ argument are two-fold, i.e. that a fair reading of
Section 9A (5) second proviso with Rules mandate that a valid sunset
review should be initiated and publicly made aware to the concerned
parties, before the expiry of five years and secondly, that the extension
of the anti-dumping duty for a further one year period, till 01-01-2015,
through the notification of 23-01-2013, is without authority of law.
W.P.(C) 1851/2014 & W.P.(C) 1866/2014 Page 19
18. The decision in Automotive Tyre Manufacturers v Designated
Authority (2011) 2 SCC 258, establishes that the functions of a
designated authority, which determines the existence of dumping and
extent of injury, are quasi-judicial. It therefore, has to conform to
principles of natural justice:
" the elaborate procedure prescribed in Rule 6 of 1995
Rules, which the DA is obliged to adhere to while
conducting investigations, we are convinced that duty to
follow the principles of natural justice is implicit in the
exercise of power conferred on him under the said Rules."
19. In this case, the facts indicate that the initiation or
commencement of the sunset review is under dispute. The petitioner
argues that Rule 6 mandates the publication - which in effect means
the making available of the notification to the concerned party- of the
decision to initiate the sunset review, before the expiry of the original
period. Rule 6 (1) inter alia, requires that "The designated authority
shall, after it has decided to initiate investigation to determine the
existence, degree and effect of any alleged dumping of any article,
issue a public notice notifying its decision…" Rule 6 (2) states that a
copy of the public notice "shall be forwarded by the designated
authority to the known exporters of the article alleged to have been
dumped …" Although Rule 6 applies for investigations when anti-
dumping investigations are undertaken in the first instance, sub-Rule
(3) of Rule 23 which deals with the procedure for sunset review states
that:
W.P.(C) 1851/2014 & W.P.(C) 1866/2014 Page 20
"(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."
20. Superficially the petitioners' argument, based on a joint reading
of Rule 6 and 23 is attractive. However, it ignores that Section 9-A (5)
and its proviso do not mandate a public notice or a Gazette notification
as a precondition for the initiation of sunset inquiry. The reference to
publication by an official Gazette is, significantly, in Section 9-A (1)
which talks of imposition of anti-dumping duty. That levy can be
imposed after the conclusion of inquiry under Section 9-A (6) of the
Act. The only reference to initiation of sunset review before the expiry
of the period mentioned in the original notification is in the second
proviso to Section 9-A (5). The procedural steps outlined in the Rules,
especially Rule 6(1) and 6 (2) are prerequisites for holding inquiry to
determine the extent of injury in the first instance, i.e. while deciding
whether to impose anti-dumping duty or not, in the first instance. Even
this rule nowhere states that the notice or notification should be
published in the official Gazette. The reason for this is not far to seek;
at that stage the designated authority calls for all those interested to
participate and give their views in a proceeding that is likely to
culminate in an adverse report. It is only after the report is accepted
and the Central Government decides to levy the duty that the
requirement of publishing the notification levying the duty in the
official Gazette, operates. The rationale for a public notice, followed
by individual notices to foreign exporters and governments is the
likelihood of their interests being affected by any investigation to
W.P.(C) 1851/2014 & W.P.(C) 1866/2014 Page 21
determine dumping effects on articles exported by them. Rule 23(3)
states that provisions of Rule 6 would apply "mutatis mutandis". It
does not in any manner make the publication of notice initiating the
sunset review or making available of the public notice or individual
notice, a precondition for initiation of the inquiry under first proviso to
Section 9-A (5). As long as the initiation is shown to have been before
the expiry, and public notice is made available within a proximate
period from that date, the inquiry should be held valid. The
consequence of holding that an initiation would not be valid unless
notice in that regard is made available individually, or to the public,
before expiration of the period of the original notification would be
that even without a mandatory requirement in the enactment or the
rules, a consequence not envisioned in the statute would be deemed.
The only consequence provided in the statute is that contemplated by
second proviso to Section 9-A (5) i.e. invalidity of a levy during
pendency of the sunset review, unless it is imposed before the expiry
of the original levy. Courts cannot stretch the operation or effect of a
restricted consequence in the manner sought to be urged. This court is
supported in this view by the settled proposition that the effect of a
proviso should be confined to what it expressly provides (Ram Narain
Sons P. Ltd v Asst Commissioner of Sales Tax 1955 (6) STC 627 (SC).
In Binani Industries v Commissioner of Commercial Taxes (2007) 6
VST 783 it was held that:
"The normal function of a proviso is to except something out
of the enactment or to qualify something enacted therein
which but for the proviso would be within the purview of the
W.P.(C) 1851/2014 & W.P.(C) 1866/2014 Page 22
enactment. As was stated in Mullins v. Treasurer of Survey
[1880 (5) QBD 170, (referred to in Shah Bhojraj Kuverji
Oil Mills and Ginning Factory v. Subhash Chandra Yograj
Sinha (AIR 1961 SC 1596) and Calcutta Tramways Co. Ltd.
v. Corporation of Calcutta (AIR 1965 SC 1728); when one
finds a proviso to a section the natural presumption is that,
but for the proviso, the enacting part of the section would
have included the subject matter of the proviso. The proper
function of a proviso is to except and to deal with a case
which would otherwise fall within the general language of
the main enactment and its effect is confined to that case. It
is a qualification of the preceding enactment which is
expressed in terms too general to be quite accurate. As a
general rule, a proviso is added to an enactment to qualify
or create an exception to what is in the enactment and
ordinarily, a proviso is not interpreted as stating a general
rule. "If the language of the enacting part of the statute does
not contain the provisions which are said to occur in it you
cannot derive these provisions by implication from a
proviso." Said Lord Watson in West Derby Union v.
Metropolitan Life Assurance Co. (1897 AC 647)(HL).
Normally, a proviso does not travel beyond the provision to
which it is a proviso. It carves out an exception to the main
provision to which it has been enacted as a proviso and to
no other. (See A.N. Sehgal and Ors. v. Raje Ram Sheoram
and Ors. (AIR 1991 SC 1406),Tribhovandas Haribhai
Tamboli v. Gujarat Revenue Tribunal and Ors. (AIR 1991
SC 1538) and Kerala State Housing Board and Ors. v.
Ramapriya Hotels (P)Ltd. and Ors. (1994 (5) SCC 672)."
21. If the court were to accept the petitioners' argument about the
compelling nature of the requirement that for a sunset review to be
valid, not only should it be shown to be initiated before the expiration
of the period of the original notification, but also that the public notice
in that regard should be shown to be issued and made available before
the period, it would be doing violence to the statute. Apart from the
W.P.(C) 1851/2014 & W.P.(C) 1866/2014 Page 23
consequence spelt out in second proviso to Section 9A (5), there is none
other. The reference to Rule 6, mutatis mutandis in Rule 23 merely
alerts the reviewing authority that it has to follow the procedure, and
comply with natural justice. As long as it is shown that the initiation is
done within the time, and public notice issued within proximate time,
the sunset review is valid. There could be cases, where the initiation
might be within time, but public notice is unreasonably delayed; in such
instances, it could be argued that the inquiry is vitiated. In the present
case, there is no dispute that the initiation took place on 22-12-2013; the
notice was published in the Official Gazette on 31-12-2013 though it
could be made available on 06-01-2014. Consequently the initiation of
the sunset review was valid and proper. The petitioners' first challenge
to the legality of the initiation therefore, fails.
22. The next issue is the legality of the levy pending sunset review.
The second proviso to Section 9A (5) is conclusive on this aspect.
Whilst the need for a sunset review has been described as compelling
and mandatory in a decision of this Court (Indian Metals & Ferro
Alloys Ltd v Designated Authority 2008 (224) ELT 375 Del, based on
the Supreme Court ruling in Reliance Industries v Designated Authority
2006 (10) SCC 368), the court had this to say:
" …the first proviso to Section 9A(5) of the Act casts an
obligation on the Central Government to ensure that for the
protection of the domestic industry (for the reasons given by
the Supreme Court) withdrawal of anti-dumping duty should
not lead to continuation or recurrence of dumping as well
injury to the domestic industry. In other words, the Central
Government has to ensure that the status quo ante is not
restored, for that would then mean that the Designated
W.P.(C) 1851/2014 & W.P.(C) 1866/2014 Page 24
Authority would have to conduct, all over again, a fresh
investigation under Rule 5 of the Rules and the subsequent
statutory procedures would also have to be repeated. It is,
therefore, not only to protect the domestic industry but to
avoid repetitive exercises that a review is mandated by the
Act and the Rules.
28. The key words in Section 9A(5) of the Act are contained
in the first proviso thereto, namely, 'the cessation of such
duty is likely to lead to continuation or recurrence of
dumping and injury'. It is possible that imposition of anti-
dumping duty may control the problem, insofar as the
domestic industry is concerned, during the five-year period
when the anti-dumping duty is exigible, but the problem may
recur after the anti-dumping duty is withdrawn. If this is
coupled with injury to the domestic industry, then the anti-
dumping duty should continue. It is for this reason that a
proper assessment, through a review, is necessary to
determine whether anti-dumping duty should continue or
not."
It could have been argued that Section 9A and the notification published
is a one-time measure; however, the need for review was contemplated
in Article 11.1, 11.2 and 11.3 of the agreement for implementation of
Article VI of GATT ("Implementation Agreement"). The said
provisions read as follows:
"11.1 An anti-dumping duty shall remain in force only as
long as and to the extent necessary to counteract dumping
which is causing injury.
11.2 The authorities shall review the need for the continued
imposition of the duty, where warranted, on their own
initiative or, provided that a reasonable period of time has
elapsed since the imposition of the definitive anti-dumping
duty, upon request by any interested party which submits
positive information substantiating the need for a review.
W.P.(C) 1851/2014 & W.P.(C) 1866/2014 Page 25
Interested 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-dumping duty shall be terminated on a
date not later than five years from its imposition (or from
the date of the most recent review under paragraph 2 if that
review has covered both dumping and injury, or under this
paragraph), unless the authorities determine, in a review
initiated before that date on their own initiative or upon a
duly substantiated request made by or on behalf of the
domestic industry within a reasonable period of time prior
to that date, that the expiry of the duty would be likely to
lead to continuation or recurrence of dumping and injury.
The duty may remain in force pending the outcome of such a
review."
It is clear that Section 9A (5) has echoed Articles 11.1, 11.2 and 11.3. In
the context of the present discussion, it is pertinent that the
Implementation Agreement makes the imposition of duty during
pendency of sunset review discretionary ("The duty may remain in
force pending the outcome of such a review."). Likewise, second
proviso to Section 9A (5) states 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 a review for a further
period not exceeding one year".
W.P.(C) 1851/2014 & W.P.(C) 1866/2014 Page 26
23. The respondents' contention that continuing the anti-dumping
duty during pendency of the sunset review is more or less automatic, is
thus, belied by the terms of the Implementing Agreement, which was
enacted in the second proviso. It consequently does not follow as a
sequitur that whenever a sunset review is initiated under Section 9A (5),
first proviso, the duty existing as on that date, would continue. This
inference is obvious because, in the first instance, the original levy has a
life of only five years. Thus, the legality of such levy is supported - by
virtue of Section 9A (5) only for that duration. If the respondents wish
to continue the levy for a period beyond that, during pendency of sunset
review (which might not be concluded by the time the first period
expires) they have to issue a notification, before the expiry of that
period. It needs to be underlined here that but for the second proviso,
there can be no legal extraction, during the sunset review, if the
proceeding extends beyond the first five year period. In other words, the
second proviso truly carves out an exception and makes the levy which
otherwise would be invalid, on account of the operation of the main
part, i.e. Section 9A (5), valid if its conditions are fulfilled.
24. This court holds that the petitioners' submission that a
notification under Section 9A (1) issued after review is in the nature of
temporary legislation, is merited. A statute is ordinarily perpetual, in the
sense that no time is fixed for its duration. In that sense Section 9A is
perpetual. However, that provision is merely enabling; it authorizes a
levy of anti-dumping duty upon proof of injury, and upon fulfillment of
other conditions. Once notified, the levy has effect - in terms of the
notification and Section 9A (5) for five years. That levy is
W.P.(C) 1851/2014 & W.P.(C) 1866/2014 Page 27
consequently, temporary as the duration is finite. In these
circumstances, Section 6 of the General Clauses Act, which provides
that notifications, bye-laws etc. validly made under a repealed law can
continue to be in force, would have no application. This position was
clarified by the Supreme Court in District Mining Officer and others v.
Tata Iron and Steel Co. & Anr AIR 2001 SC 3134, where the question
as to what is a "temporary statute", was examined and it was observed
that:
"19......... A Statute can be said to be either perpetual or
temporary. It is perpetual when no time is fixed for its
duration and such a statute remains in force until its repeal
which may be express or implied. But a Statute is temporary
when its duration is only for a specified time and such a
Statute expires on the expiry of the specified time, unless it
is repealed earlier ..........Admittedly, to a temporary Statute,
the provisions of Section 6 of the General Clauses Act,
1897 will have no application .........A temporary Statute
even in the absence of a saving provision like Section 6 of
the General Clauses Act may not be construed dead for all
purposes and the effect of expiry is essentially one of the
construction of the Act......."
25. In the light of the above position, this Court holds that what
follows is that the levy of anti-dumping duty ended on 01-01-2014,
with the lapse of the original notification. The second proviso to
Section 9A (5) precluded the Central Government from continuing the
levy beyond that period or date, except to the extent its conditions
were fulfilled, i.e. if the levy of the duty were to have been notified
before such date. In such cases, the power under the second proviso to
W.P.(C) 1851/2014 & W.P.(C) 1866/2014 Page 28
Section 9A(5), after expiry of the date of the original notification, is
unavailable. The notification in the present case states that
“3. Notwithstanding anything contained in paragraph
2, this notification shall remain in force upto and inclusive
st
of the 1 day of January, 2015, with respect to anti-dumping
duty on Acrylonitrile Butadiene Rubber originating in, or
exported from Korea RP, unless revoked earlier”.
Neither does Section 9A (1) nor Section 9A (5) permit the extension of
anti-dumping duty once the main period of five years lapses, as held
earlier. The Central Government is not arguing that it had the benefit of
Section 21 of the General Clauses Act- for the simple reason that
extension or amendment of an earlier notification can be only after
following the procedure adopted while issuing the main notification. In
the present case, the amendment is retrospective, as it were, and made
effective from 2009. It was in fact made after the lapse of the first
period.
26. Long ago, in Nazir Ahmed v King Emperor , AIR 1936 PC 253,
the Privy Council declared that "[W]here a power is given to do a
certain thing in a certain way, the thing must be done in that way or not
at all." This salutary rule has been universally followed in numerous
later judgments, including those of the Supreme Court ( Rao Shiv
Bahadur Singh v. State of V.P. AIR 1954 SC 322; State of U.P. v.
Singhara Singh AIR 1964 SC 358 Meera Sahni vs. Lieutenant
;
Governor of Delhi & Ors. 2008 (9) SCC 187 and Shin-Etsu Chemical
Co. Ltd. vs. Aksh Optifibre Ltd. & Anr. reported in (2005) 7 SCC 234).
The imperative nature of second proviso to Section 9A (5) leaves no
room for doubt that in case the Central Government wishes to extend
W.P.(C) 1851/2014 & W.P.(C) 1866/2014 Page 29
the levy during the sunset review period, it has to comply with the terms
of that provision and do so, before expiration of the original period -
which in this case was 01-01-2014. Not having done so, its attempt to
levy the duty through the later notification of 23-01-2014 is without
authority of law; it is contrary to the terms of proviso to Section 9A
(5).The attempt to recover any amounts as duty, therefore, violates
Article 265 of the Constitution of India.
27. In view of the above findings, it is held that the initiation of
sunset review is valid and legal; however the levy of anti-dumping duty
through the impugned notification of 23-01-2014 is without authority of
law. The said notification is declared illegal and hereby set aside. The
petitioners are entitled to refund of the amounts paid till date. The writ
petitions partly succeed and are allowed to the above extent; there shall
be no order on costs.
S. RAVINDRA BHAT
(JUDGE)
VIBHU BAKHRU
(JUDGE)
JULY 11, 2014
W.P.(C) 1851/2014 & W.P.(C) 1866/2014 Page 30
Reserved on: 03.07.2014
Pronounced on : 11.07.2014
+ W.P.(C) 1851/2014, C.M. NO. 3866/2014 & 3867/2014
M/S. KUMHO PETROCHEMICALS CO. LTD. …..Petitioner
Through: Sh. V. Lakshmikumaran, Sh. S.
Seetharaman, Sh. Atul Gupta, Sh. Lakshmi. N. and
Sh. Aditya Bhattacharya, Advocates.
Versus
UNION OF INDIA AND ORS. ……..Respondents
Through: Sh. Himanshu Bajaj, Central Govt.
Standing Counsel and Sh. M.P. Singh, Advocate
with Sh. J. Gupta, Director.
Ms. Shakshi Aggarwal, Advocate, for Resp. Nos. 1
and 2.
Sh. Sandeep Sethi, Sr. Advocate with Sh. Rajesh
Sharma, Advocate, for Resp. No.3.
+ W.P.(C) 1866/2014, C.M. NO. 3886/2014 & 3887/2014
FAIRDEAL POLYCHEM LLP …..Petitioner
Through: Sh. V. Lakshmikumaran, Sh. S.
Seetharaman, Sh. Atul Gupta, Sh. Lakshmi. N. and
Sh. Aditya Bhattacharya, Advocates.
Versus
UNION OF INDIA AND ORS. ……..Respondents
Through: Sh. Himanshu Bajaj, Central Govt.
Standing Counsel and Sh. M.P. Singh, Advocate
with Sh. J. Gupta, Director.
Ms. Shakshi Aggarwal, Advocate, for Resp. Nos. 1
and 2.
Sh. Rajiv Bansal with Sh. Rajesh Sharma,
Advocates, for Resp. No.3.
CORAM:
HON'BLE MR. JUSTICE S. RAVINDRA BHAT
HON'BLE MR. JUSTICE VIBHU BAKHRU
W.P.(C) 1851/2014 & W.P.(C) 1866/2014 Page 1
MR. JUSTICE S. RAVINDRA BHAT
%
C.M. NO. 3867/2014 (for exemption) IN W.P.(C) 1851/2014
C.M. NO. 3887/2014 (for exemption) IN W.P.(C) 1866/2014
Allowed, subject to all just exceptions.
W.P.(C) 1851/2014, C.M. NO. 3866/2014
W.P.(C) 1866/2014, C.M. NO. 3886/2014
1. This judgment is in respect of writ petitions W.P.(C) 1851/14 and
1866/14. The petitioners calls into question the legality of the Central
Government's decision initiating anti-dumping duty extension
proceedings under Section 9A of the Customs Tariff Act, 1975 (“CTA”)
as well as the validity of notification No. 06/2014-Customs (ADD) by
which anti-dumping duty was levied on Acrylonitrile Butadiene Rubber
("the product"), originating in, or exported from Korea RP. The said
notification sought to amend a previous one, dated 2nd January 2009
(hereafter "the original notification") by which such anti-dumping duty
was levied for five years.
2. The brief facts are that the Central Government, in terms of
provisions of the CTA, held inquiry in accordance with Rules framed
under that enactment; pursuant to the report furnished by the
Designated Authority, the Central Government imposed anti-dumping
duty on the product, by notification issued by the Ministry of Finance
(Department of Revenue), No. 01/2009-Customs, dated 02-01-2009
(and published in the Gazette of India, Extraordinary, Part II, Section 3,
Sub-section (i), by G.S.R. 5(E), dated the 2nd January, 2009). The
W.P.(C) 1851/2014 & W.P.(C) 1866/2014 Page 2
notification in express terms was to be in force for five years, i.e. till 01-
01-2014.
3. The petitioner in W.P.(C) 1851/2014 is a producer and exporter
of the product from Korea RP and the petitioner in W.P. (C)
1866/2014 is an importer of the product from Korea RP. Both
petitioners are aggrieved by the notifications dated 31-12-2013 and
23-1-2014 by Respondent 1. The Respondent No. 1 is the Ministry of
Finance, Union of India. Respondent No. 2 is the Directorate of Anti-
dumping and Allied Duties appointed under Section 9A of the CTA
read with Rule 3 of the Customs Tariff (Identification, Assessment
and Collection of Anti-Dumping Duty on Dumped Articles and for
Determination of Injury), 1995 (hereinafter referred to as "the
Rules"). The Respondent No. 3 is the applicant domestic industry
which filed a request to initiate a sunset review to extend the anti-
dumping duty on import of the product originating in, or exported
from, Korea RP.
4. India is a signatory to the Marrakesh Agreement establishing
the World Trade Organization in 1994. Pursuant to this, she has
implemented the Agreement on Implementation of Article VI of the
GATT 1994 referred to as the Anti-dumping Agreement (hereafter
referred to as "ADA"), which is one of the Agreements that forms part
of the WTO treaty. In terms of Article 18.4 of the ADA, each Member
country is required to ensure the conformity of its laws, regulations
and administrative procedures with the provisions of the ADA. As a
consequence, Sections 9A, Section 9AA, Section 9B and Section 9C
W.P.(C) 1851/2014 & W.P.(C) 1866/2014 Page 3
of the CTA were enacted. The Rules were framed in terms of the
powers conferred by Section 9A (6) of the CTA. Section 9A(1)
empowers the Central Government, by notification in the official
gazette, to impose an anti-dumping duty not exceeding the margin of
dumping i.e. i.e. the difference between the normal value and the
export price, in relation to any article which is exported to India at less
than its normal value. Under Rule 3, the Central Government has
constituted the second respondent to investigate the existence, degree
and effect of any alleged dumping and to submit its final findings in
this regard and also to recommend the amount of anti-dumping duty
which, if levied, would be sufficient to remove injury.
5. In terms of Section 9A(5) of the Act and Rule 23(lB) of the
Rules, such duties are effective only for a period not exceeding five
years from the date of its imposition. The duty automatically expires
five years from the date of imposition unless the second respondent, in
a review initiated before the end of the five year period, concludes that
that the expiry of the said anti-dumping duty is likely to lead to
continuation or recurrence of dumping and injury to the domestic
industry. Such reviews are commonly referred to as "sunset reviews".
6. The petitioner in W.P.(C) 1851/2014 was subjected to the anti-
dumping duty levy in terms of the original notification, urges that the
Central Government could not levy and collect any anti-dumping duty
after 01-01-2014. It urges that if the Central Government were of the
opinion that such course of action was warranted, by virtue of
continuing injury to domestic manufacturers or domestic market on
W.P.(C) 1851/2014 & W.P.(C) 1866/2014 Page 4
account of practices of such exporters, it ought to have issued a
notification in the Gazette in terms of first proviso Section 9A (5)
which enables the extension of such anti-dumping duty levy beyond
five years. Counsel urges that by virtue of operation of Rules 6, 19, 20
and 23, such extension ought to have been notified in the official
Gazette and published before the expiry of the five year period from
the date of the original notification, i.e. 02-01-2009. The petitioner
buttresses this proposition by placing reliance on the second proviso to
Section 9A (5), which states that in the event the Central Government
wishes to continue the levy during the pendency of review/extension
enquiry, which, though initiated before the expiry of the five year
period could not be completed before its expiry, then that too should
be manifested in an express notification, issued before the expiry of
the first notification. If there is such a valid notification, the levy is
valid for a period of one year.
7. The petitioners complain that in the present case, the notice
proposing the review was published on 06-01-2014, after the
expiration of the original notification. Thus, neither the review for
continuing the duty, nor the levy during the pendency of inquiry was
valid. The petitioners also urge that the notification of 23-01-2014,
amending the 2-1-2009 notification so as to make it remain in force till
1-1-2015, was issued without any legal authority. Counsel argued that
once the original notification lapsed on 01-01-2014, there could have
been no question of resorting to the subterfuge of amending such
expired notification. Here it was argued that there is no substantive
W.P.(C) 1851/2014 & W.P.(C) 1866/2014 Page 5
power to amend the terms of the original notification which could
have not been in force for more than one year. Had the Central
Government desired that such tax had to be levied during the
interregnum (when review for continuing the levy was pending) a
specific order should have been made concurrently with the
publication of the extension. Counsel for the petitioners argued here
that mere amendment of the terms of the original notification cannot
legitimately amount to a valid levy. So long as the substantive
provisions of Section 9A (5), particularly its second proviso are not
complied with, the levy, even for an interregnum period would not be
legal.
8. It is argued on behalf of the petitioners that the materials on
record, in the form of RTI query replies, establish beyond doubt that
the initiation of the sunset review in the present case took place on 31-
12-2013, upon an application filed in that regard by the domestic
industry on 11-11-2013. The irrefutable evidence was that though the
initiation was published on 31-12-2013, the Gazette copy was sent for
distribution to Kitab Mahal, a book store, only on 06-01-2014. This
was the earliest point in time for the publication of the sunset review
initiation. That being the case, argued counsel, both the initiation, and
the subsequent notification of 23-01-2014 amending a notification
which ceased to exist, is invalid and the attempt to enforce it as
without authority of law. It was also contended during the hearing that
such amendment was impermissible and could not even be sustained
by recourse to any provision of the General Clauses Act, 1897,
W.P.(C) 1851/2014 & W.P.(C) 1866/2014 Page 6
because the original notification - as it had finite life was temporary
legislation and, therefore, beyond the purview of that Act. In support
of the submission, the counsel relied on the ruling of the Supreme
Court in State of Punjab v Mohar Singh AIR 1955 SC 84 where,
commenting on the applicability of Section 6 of the General Clauses
Act, it was held that:
"the consequences laid down in section 6 of the Act will
apply only when a statute or regulation having the force of
a statute is actually repealed. It has no application when a
statute, which is of a temporary nature, automatically
expires by efflux of time."
Reliance is also placed on the judgment reported as Jindal Oil Mill &
Ors vs Godhra Electricity Co. Ltd AIR 1969 SC 1225.
9. It was contended on behalf of the Union of India, the
Designated Authority as well as the domestic industry applicants, that
the first proviso to Section 9A (5) of the CTA as well as a fair reading
of Rule 6 do not lead to the conclusion that the intention to review and
extend the anti-dumping duty, in the facts of a given case, have to be
necessarily published and made available to all, before the expiry of
the original notification. It was pointed out that in this case, the
extension notification was in fact printed on 31-12-2013 in the Official
Gazette. The compelling inference which the Court should draw,
therefore, is that the requirement of Section 9-A (5) in that regard had
been fulfilled. It was argued that the sunset review proposed by the
impugned notification of 31-12-2013 is mandatory in terms of the
W.P.(C) 1851/2014 & W.P.(C) 1866/2014 Page 7
judgment of this Court, in Indian Metal and Ferro Alloys v.
Designated Authority, 2008 (224) ELT 375 Del.
10. Learned counsel argued that whenever sunset review is
initiated, apart from the requirement of commencing it before the
expiration of the original period, there is also an element of
invariability in the imposition of the duty, which would be concededly
valid for one year, pending such sunset review, under second proviso
to Section 9A (5). It was argued that this is to be inferred from the fact
that the initiation itself is a ground for extending the duty for such
period, since the degree of injury prevailing is presumed to exist. This
is because there is no requirement of any form of inquiry into the
injury; the inquiry which is undertaken prior to the imposition of the
duty through the first notification is deemed sufficient and the injury
deemed to continue. However, if the sunset review inquiry is not
closed by one year, the duty would lapse. As a result, argue counsel
for the respondents, the notification of 23-01-2014 - which sought to
amend the original notification- is valid, and cannot be set aside.
Relevant provisions
11. It is necessary to, at this stage, set out the relevant statutory
provisions under which the anti-dumping duty, which is the subject
matter of these proceedings, was imposed. Section 9A of the CTA
contemplates levy of anti-dumping duty on dumped articles. It reads
as follows:
W.P.(C) 1851/2014 & W.P.(C) 1866/2014 Page 8
"(1) Where 7[any article is exported by an exporter or
producer] from any country or territory (hereinafter in this
section referred to as the exporting country or territory) to
India at less than its normal value, then, upon the
importation of such article into India, the Central
Government may, by notification in the Official Gazette,
impose an anti-dumping duty not exceeding the margin of
dumping in relation to such article.
Explanation. - For the purposes of this section, -
(a) "margin of dumping", in relation to an article, means the
difference between its export price and its normal value;
(b) "export price", in relation to an article, means the price
of the article exported from the exporting country or
territory and in cases where there is no export price or
where the export price is unreliable because of association
or a compensatory arrangement between the exporter and
the importer or a third party, the export price may be
constructed on the basis of the price at which the imported
articles are first resold to an independent buyer or if the
article is not resold to an independent buyer, or not resold
in the condition as imported, on such reasonable basis as
may be determined in accordance with the rules made under
sub-section (6);
(c) "normal value", in relation to an article, means -
(i) the comparable price, in the ordinary course of trade, for
the like article when5[destined for consumption] in the
exporting country or territory as determined in accordance
with the rules made under sub-section (6); or
(ii) when there are no sales of the like article in the ordinary
course of trade in the domestic market of the exporting
country or territory, or when because of the particular
market situation or low volume of the sales in the domestic
market of the exporting country or territory, such sales do
not permit a proper comparison, the normal value shall be
either -
W.P.(C) 1851/2014 & W.P.(C) 1866/2014 Page 9
(a) comparable representative price of the like article when
exported from the exporting country or1[territory to] an
appropriate third country as determined in accordance with
the rules made under sub-section (6); or
(b) the cost of production of the said article in the country of
origin along with reasonable addition for administrative,
selling and general costs, and for profits, as determined in
accordance with the rules made under sub-section (6):
Provided that in the case of import of the article from a
country other than the country of origin and where the
article has been merely transshipped through the country of
export or such article is not produced in the country of
export or there is no comparable price in the country of
export, the normal value shall be determined with reference
to its price in the country of origin.
(1A) xxx
(2) The Central Government may, pending the
determination in accordance with the provisions of this
section and the rules made thereunder of the normal value
and the margin of dumping in relation to any article, impose
on the importation of such article into India an anti-
dumping duty on the basis of a provisional estimate of such
value and margin and if such anti-dumping duty exceeds the
margin as so determined: -
(a) the Central Government shall, having regard to such
determination and as soon as may be after such
determination, reduce such anti-dumping duty; and
(b) refund shall be made of so much of the anti-dumping
duty which has been collected as is in excess of the anti-
dumping duty as so reduced.
(2A) xxx
(3) If the Central Government, in respect of the dumped
article under inquiry, is of the opinion that -
W.P.(C) 1851/2014 & W.P.(C) 1866/2014 Page 10
(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
circumstances is likely to seriously under-mine the remedial
effect of the anti-dumping duty liable to be levied, the
Central Government may, by notification in the Official
Gazette, levy anti-dumping duty retrospectively from a date
prior to the date of imposition of anti-dumping duty under
sub-section (2) but not beyond ninety days from the date of
notification under that sub-section, and notwithstanding
anything contained in any law for the time being in force,
such duty shall be payable at such rate and from such date
as may be specified in the notification.
(4) The anti-dumping duty chargeable under this section
shall be in addition to any other duty imposed under this Act
or any other law for the time being in force.
(5) The anti-dumping duty imposed under this section shall,
unless revoked earlier, 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 dumping 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 anti-dumping duty may
continue to remain in force pending the outcome of such a
review for a further period not exceeding one year.
W.P.(C) 1851/2014 & W.P.(C) 1866/2014 Page 11
(6) The margin of dumping as referred to in sub-section (1)
or sub-section (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 purposes of this section, and without
prejudice to the generality of the foregoing, such rules may
provide for the manner in which articles liable for any anti-
dumping duty under this section may be identified, and for
the manner in which the export price and the normal value
of, and the margin of dumping in relation to, such articles
may be determined and for the assessment and collection of
such anti-dumping duty.
(6A) The margin of dumping in relation to an article,
exported by an exporter or producer, under inquiry under
sub-section (6) shall be determined on the basis of records
concerning normal value and export price maintained, and
information provided, by such exporter or producer:
Provided that where an exporter or producer fails to
provide such records or information, the margin of dumping
for such exporter or producer shall be determined on the
basis of facts available.]
(7) Every notification issued under this section shall, as
soon as may be after it is issued, be laid before each House
of Parliament.
[(8) The provisions of the Customs Act, 1962 (52 of 1962)
and the rules and regulations made thereunder, including
those relating to the date for determination of rate of duty,
assessment, non-levy, short levy, refunds, interest, appeals,
offences and penalties shall, as far as may be, apply to the
duty chargeable under this section as they apply in relation
to duties leviable under that Act.]”
12. Section 9C of the CTA provides for an appeal against the order
passed under Section 9A to the Customs, Excise and Service Tax
W.P.(C) 1851/2014 & W.P.(C) 1866/2014 Page 12
Appellate Tribunal constituted under Section 129 of the Customs Act,
1962 (52 of 1962) (hereinafter referred to as the Appellate Tribunal).
The Rules (of 1995) prescribe an elaborate procedure for
identification, assessment and collection of anti-dumping duty on
dumped articles. The Rules, relevant for the present petition, reads as
under:
"6. Principles governing investigations. –
(1) The designated authority shall, after it has decided to
initiate investigation to determine the existence, de-gree and
effect of any alleged dumping of any article, issue a public
notice notifying its decision and such public notice shall,
inter alia, contain adequate informa-tion on the following :-
(i) the name of the exporting country or countries and the
article involved;
(ii) the date of initiation of the investigation;
(iii) the basis on which dumping is alleged in the
application;
(iv) a summary of the factors on which the allegation of
injury is based;
(v) the address to which representations by interested
parties should be directed; and
(vi) the time-limits allowed to interested parties for making
their views known, .
(2) A copy of the public notice shall be forwarded by the
designated au-thority to the known exporters of the article
alleged to have been dumped, the Governments of the
exporting countries concerned and other interested parties.
(3) The designated authority shall also provide a copy of
the application referred to in sub-rule (1) of Rule 5 to -
W.P.(C) 1851/2014 & W.P.(C) 1866/2014 Page 13
(i) the known exporters or to the concerned trade
association where the number of exporters is large, and
(ii) the governments of the exporting countries:
Provided that the designated authority shall also make
available a copy of the application to any other interested
party who makes a request therefor in writing.
(4) The designated authority may issue a notice calling for
any informa-tion, in such form as may be specified by it,
from the exporters, foreign produc-ers and other interested
parties and such information shall be furnished by such
persons in writing within thirty days from the date of receipt
of the notice or within such extended period as the
designated authority may allow on sufficient cause being
shown.
Explanation: For the purpose of this sub-rule, the notice
calling for infor-mation and other documents shall be
deemed to have been received one week from the date on
which it was sent by the designated authority or transmitted
to the appropriate diplomatic representative of the
exporting country.
(5) The designated authority shall also provide opportunity
to the indus-trial users of the article under investigation,
and to representative consumer organisations in cases
where the article is commonly sold at the retail level, to
furnish information which is relevant to the investigation
regarding dumping, in-jury where applicable, and causality.
(6) xxx
(7) xxx
(8) In a case where an interested party refuses access to, or
otherwise does not provide necessary information within a
reasonable period, or significantly impedes the
investigation, the designated authority may record its
find-ings on the basis of the facts available to it and make
W.P.(C) 1851/2014 & W.P.(C) 1866/2014 Page 14
such recommendations to the Central Government as it
deems fit under such circumstances.
23. Review.--
(1) Any anti-dumping duty imposed under the provision of
section 9A of the Act, shall remain in force, so long as and
to the extent necessary, to counteract dumping, which is
causing injury.
(1A) The designated authority shall review the need for the
continued imposition of any anti-dumping duty, where
warranted, on its own initiative or upon request by any
interested party who submits positive information
substantiating 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), any definitive anti-dumping duty levied under the Act,
shall be effective for a period not exceeding five years from
the date of its imposition, unless the designated authority
comes to a conclusion, on a review initiated before that
period on its own initiative or upon a duly substantiated
request made by or on behalf of the domestic industry,
within a reasonable period of time prior to the expiry of that
period, that the expiry of the said anti-dumping dity is likely
to lead to continuation or recurrence 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.
W.P.(C) 1851/2014 & W.P.(C) 1866/2014 Page 15
(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."
13. Section 9A was introduced pursuant to India's treaty obligations
under the GATT. As is apparent from its provisions and those
prescribed by the Rules, anti-dumping measures may be imposed if an
investigation conducted in conformity with the procedural
requirements, reveals (a) the existence of dumped imports; (b) that the
dumped imports are resulting in material injury to a domestic industry;
and (c) that there is a causal link between the dumped imports and the
injury. (http://www.wto.org/english/tratop_e/adp_e/adp_info_e.htm).
The determination of injury is dependent upon objective examination
based on positive evidence of the extent of dumping (assessed through
a loss of market share of the domestic industry in comparison to the
dumped imports) and the effect on prices of the same good in the
domestic market (assessed by whether there is a drop in prices or a
preclusion of a price increase), and the consequent impact of such
imports on the domestic industry like a decline in market shares,
profits, etc. A finding in regard to the causal link between the dumping
and injury to the domestic industry is the essential pre-requisite for
imposing an anti-dumping duty.
14. The broad and comprehensive procedural requirements relating
to investigations focus on the sufficiency of petitions to ensure that
unmerited investigations are not initiated, time periods for the
completion of investigation, and access to information to all interested
parties, along with reasonable opportunities to present their views and
W.P.(C) 1851/2014 & W.P.(C) 1866/2014 Page 16
arguments. Other requirements concern the offering, acceptance, and
administration of price undertakings by exporters in lieu of the
imposition of anti-dumping measures. The Rules further provide for
the timing of the imposition of anti-dumping duties, the duration of
such duties, and require Designated Authorities to periodically review
the continuing need for anti-dumping duties and price undertakings.
Anti-dumping proceedings are initiated based on an application made
by or on behalf of the concerned domestic industry to the Designated
Authority in the Department of Commerce for an investigation into
alleged dumping of a product into India. The interested parties to an
anti-dumping investigation include the domestic industry on whose
complaint the proceedings are initiated; the exporters or the foreign
producers of the like articles subject to investigation; the importers of
the same article allegedly dumped into India; the Government of the
exporting country/countries and the trade or business associations of
the domestic producers/importers/user industries of the dumped
product.
15. The Designated Authority is expected generally to initiate
proceedings for anti-dumping action on the basis of a petition received
from the domestic industry alleging dumping of certain goods and the
injury caused to it by such dumping. However, Rule 5(4) provides
for suo motu initiation of anti-dumping proceedings by the Designated
Authority on the basis of information received from the Collector of
Customs appointed under the Customs Act, 1962 or from any other
source. In such circumstances, the Authority initiates the anti-dumping
W.P.(C) 1851/2014 & W.P.(C) 1866/2014 Page 17
investigation on its own without any complaint/petition filed in this
regard provided the Authority is satisfied that sufficient evidence
exists as to the existence of dumping, injury and causal link between
the dumped imports and the alleged injury. After initiation of the suo
motu investigation, the same procedure, as the one based on a petition
as mentioned in the Rules, is followed. The remedy against dumping
is not always in the form of anti-dumping duty. The investigation may
be terminated or suspended after the preliminary findings, if the
exporter concerned furnishes an undertaking to revise his price to
remove the dumping or the injurious effect of dumping as the case
may be. No anti-dumping duty is recommended on such exporters
from whom price undertaking has been accepted (Rule 15). An interim
relief in the form of a provisional anti-dumping duty, pending the
finalization of investigation proceedings, can also be provided to the
affected domestic industry. Such provisional duty not exceeding the
margin of dumping may be imposed by the Central Government on
the basis of the preliminary finding recorded by the Designated
Authority. The provisional duty can be imposed only after the expiry
of 60 days from the date of initiation of investigation and will remain
in force only for a period not exceeding 6 months, extendable to nine
months under certain circumstances (Rule 13). Rule 21 provides that if
the final duty levied is less than the provisional duty which has already
been levied and collected, the differential amount already collected as
provisional duty shall be refunded. If the final duty imposed is more
than the provisional duty already imposed and collected, the difference
shall not be collected. If the provisional duty is withdrawn, based on
W.P.(C) 1851/2014 & W.P.(C) 1866/2014 Page 18
the final findings of the Designated Authority, then the provisional
duty already collected shall be refunded.
16. The scheme of Section 9A and the Rules does not permit levy
of anti-dumping duty on retrospective basis. The only exception where
anti-dumping duty can also be levied on a retrospective basis is in case
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 the injury 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 circumstances is likely to seriously undermine the
remedial effect of the anti-dumping duty liable to be levied. Even
here, the anti-dumping duty cannot be levied retrospectively beyond
90 days from the date of issue of notification imposing duty (Section
9A (3)).
Analysis and findings
17. In the present case, the first- original notification of 02-01-
2009- was preceded by an inquiry in terms of the Act and Rules. There
is no controversy about its validity for the first period of five years.
The petitioners’ argument are two-fold, i.e. that a fair reading of
Section 9A (5) second proviso with Rules mandate that a valid sunset
review should be initiated and publicly made aware to the concerned
parties, before the expiry of five years and secondly, that the extension
of the anti-dumping duty for a further one year period, till 01-01-2015,
through the notification of 23-01-2013, is without authority of law.
W.P.(C) 1851/2014 & W.P.(C) 1866/2014 Page 19
18. The decision in Automotive Tyre Manufacturers v Designated
Authority (2011) 2 SCC 258, establishes that the functions of a
designated authority, which determines the existence of dumping and
extent of injury, are quasi-judicial. It therefore, has to conform to
principles of natural justice:
" the elaborate procedure prescribed in Rule 6 of 1995
Rules, which the DA is obliged to adhere to while
conducting investigations, we are convinced that duty to
follow the principles of natural justice is implicit in the
exercise of power conferred on him under the said Rules."
19. In this case, the facts indicate that the initiation or
commencement of the sunset review is under dispute. The petitioner
argues that Rule 6 mandates the publication - which in effect means
the making available of the notification to the concerned party- of the
decision to initiate the sunset review, before the expiry of the original
period. Rule 6 (1) inter alia, requires that "The designated authority
shall, after it has decided to initiate investigation to determine the
existence, degree and effect of any alleged dumping of any article,
issue a public notice notifying its decision…" Rule 6 (2) states that a
copy of the public notice "shall be forwarded by the designated
authority to the known exporters of the article alleged to have been
dumped …" Although Rule 6 applies for investigations when anti-
dumping investigations are undertaken in the first instance, sub-Rule
(3) of Rule 23 which deals with the procedure for sunset review states
that:
W.P.(C) 1851/2014 & W.P.(C) 1866/2014 Page 20
"(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."
20. Superficially the petitioners' argument, based on a joint reading
of Rule 6 and 23 is attractive. However, it ignores that Section 9-A (5)
and its proviso do not mandate a public notice or a Gazette notification
as a precondition for the initiation of sunset inquiry. The reference to
publication by an official Gazette is, significantly, in Section 9-A (1)
which talks of imposition of anti-dumping duty. That levy can be
imposed after the conclusion of inquiry under Section 9-A (6) of the
Act. The only reference to initiation of sunset review before the expiry
of the period mentioned in the original notification is in the second
proviso to Section 9-A (5). The procedural steps outlined in the Rules,
especially Rule 6(1) and 6 (2) are prerequisites for holding inquiry to
determine the extent of injury in the first instance, i.e. while deciding
whether to impose anti-dumping duty or not, in the first instance. Even
this rule nowhere states that the notice or notification should be
published in the official Gazette. The reason for this is not far to seek;
at that stage the designated authority calls for all those interested to
participate and give their views in a proceeding that is likely to
culminate in an adverse report. It is only after the report is accepted
and the Central Government decides to levy the duty that the
requirement of publishing the notification levying the duty in the
official Gazette, operates. The rationale for a public notice, followed
by individual notices to foreign exporters and governments is the
likelihood of their interests being affected by any investigation to
W.P.(C) 1851/2014 & W.P.(C) 1866/2014 Page 21
determine dumping effects on articles exported by them. Rule 23(3)
states that provisions of Rule 6 would apply "mutatis mutandis". It
does not in any manner make the publication of notice initiating the
sunset review or making available of the public notice or individual
notice, a precondition for initiation of the inquiry under first proviso to
Section 9-A (5). As long as the initiation is shown to have been before
the expiry, and public notice is made available within a proximate
period from that date, the inquiry should be held valid. The
consequence of holding that an initiation would not be valid unless
notice in that regard is made available individually, or to the public,
before expiration of the period of the original notification would be
that even without a mandatory requirement in the enactment or the
rules, a consequence not envisioned in the statute would be deemed.
The only consequence provided in the statute is that contemplated by
second proviso to Section 9-A (5) i.e. invalidity of a levy during
pendency of the sunset review, unless it is imposed before the expiry
of the original levy. Courts cannot stretch the operation or effect of a
restricted consequence in the manner sought to be urged. This court is
supported in this view by the settled proposition that the effect of a
proviso should be confined to what it expressly provides (Ram Narain
Sons P. Ltd v Asst Commissioner of Sales Tax 1955 (6) STC 627 (SC).
In Binani Industries v Commissioner of Commercial Taxes (2007) 6
VST 783 it was held that:
"The normal function of a proviso is to except something out
of the enactment or to qualify something enacted therein
which but for the proviso would be within the purview of the
W.P.(C) 1851/2014 & W.P.(C) 1866/2014 Page 22
enactment. As was stated in Mullins v. Treasurer of Survey
[1880 (5) QBD 170, (referred to in Shah Bhojraj Kuverji
Oil Mills and Ginning Factory v. Subhash Chandra Yograj
Sinha (AIR 1961 SC 1596) and Calcutta Tramways Co. Ltd.
v. Corporation of Calcutta (AIR 1965 SC 1728); when one
finds a proviso to a section the natural presumption is that,
but for the proviso, the enacting part of the section would
have included the subject matter of the proviso. The proper
function of a proviso is to except and to deal with a case
which would otherwise fall within the general language of
the main enactment and its effect is confined to that case. It
is a qualification of the preceding enactment which is
expressed in terms too general to be quite accurate. As a
general rule, a proviso is added to an enactment to qualify
or create an exception to what is in the enactment and
ordinarily, a proviso is not interpreted as stating a general
rule. "If the language of the enacting part of the statute does
not contain the provisions which are said to occur in it you
cannot derive these provisions by implication from a
proviso." Said Lord Watson in West Derby Union v.
Metropolitan Life Assurance Co. (1897 AC 647)(HL).
Normally, a proviso does not travel beyond the provision to
which it is a proviso. It carves out an exception to the main
provision to which it has been enacted as a proviso and to
no other. (See A.N. Sehgal and Ors. v. Raje Ram Sheoram
and Ors. (AIR 1991 SC 1406),Tribhovandas Haribhai
Tamboli v. Gujarat Revenue Tribunal and Ors. (AIR 1991
SC 1538) and Kerala State Housing Board and Ors. v.
Ramapriya Hotels (P)Ltd. and Ors. (1994 (5) SCC 672)."
21. If the court were to accept the petitioners' argument about the
compelling nature of the requirement that for a sunset review to be
valid, not only should it be shown to be initiated before the expiration
of the period of the original notification, but also that the public notice
in that regard should be shown to be issued and made available before
the period, it would be doing violence to the statute. Apart from the
W.P.(C) 1851/2014 & W.P.(C) 1866/2014 Page 23
consequence spelt out in second proviso to Section 9A (5), there is none
other. The reference to Rule 6, mutatis mutandis in Rule 23 merely
alerts the reviewing authority that it has to follow the procedure, and
comply with natural justice. As long as it is shown that the initiation is
done within the time, and public notice issued within proximate time,
the sunset review is valid. There could be cases, where the initiation
might be within time, but public notice is unreasonably delayed; in such
instances, it could be argued that the inquiry is vitiated. In the present
case, there is no dispute that the initiation took place on 22-12-2013; the
notice was published in the Official Gazette on 31-12-2013 though it
could be made available on 06-01-2014. Consequently the initiation of
the sunset review was valid and proper. The petitioners' first challenge
to the legality of the initiation therefore, fails.
22. The next issue is the legality of the levy pending sunset review.
The second proviso to Section 9A (5) is conclusive on this aspect.
Whilst the need for a sunset review has been described as compelling
and mandatory in a decision of this Court (Indian Metals & Ferro
Alloys Ltd v Designated Authority 2008 (224) ELT 375 Del, based on
the Supreme Court ruling in Reliance Industries v Designated Authority
2006 (10) SCC 368), the court had this to say:
" …the first proviso to Section 9A(5) of the Act casts an
obligation on the Central Government to ensure that for the
protection of the domestic industry (for the reasons given by
the Supreme Court) withdrawal of anti-dumping duty should
not lead to continuation or recurrence of dumping as well
injury to the domestic industry. In other words, the Central
Government has to ensure that the status quo ante is not
restored, for that would then mean that the Designated
W.P.(C) 1851/2014 & W.P.(C) 1866/2014 Page 24
Authority would have to conduct, all over again, a fresh
investigation under Rule 5 of the Rules and the subsequent
statutory procedures would also have to be repeated. It is,
therefore, not only to protect the domestic industry but to
avoid repetitive exercises that a review is mandated by the
Act and the Rules.
28. The key words in Section 9A(5) of the Act are contained
in the first proviso thereto, namely, 'the cessation of such
duty is likely to lead to continuation or recurrence of
dumping and injury'. It is possible that imposition of anti-
dumping duty may control the problem, insofar as the
domestic industry is concerned, during the five-year period
when the anti-dumping duty is exigible, but the problem may
recur after the anti-dumping duty is withdrawn. If this is
coupled with injury to the domestic industry, then the anti-
dumping duty should continue. It is for this reason that a
proper assessment, through a review, is necessary to
determine whether anti-dumping duty should continue or
not."
It could have been argued that Section 9A and the notification published
is a one-time measure; however, the need for review was contemplated
in Article 11.1, 11.2 and 11.3 of the agreement for implementation of
Article VI of GATT ("Implementation Agreement"). The said
provisions read as follows:
"11.1 An anti-dumping duty shall remain in force only as
long as and to the extent necessary to counteract dumping
which is causing injury.
11.2 The authorities shall review the need for the continued
imposition of the duty, where warranted, on their own
initiative or, provided that a reasonable period of time has
elapsed since the imposition of the definitive anti-dumping
duty, upon request by any interested party which submits
positive information substantiating the need for a review.
W.P.(C) 1851/2014 & W.P.(C) 1866/2014 Page 25
Interested 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-dumping duty shall be terminated on a
date not later than five years from its imposition (or from
the date of the most recent review under paragraph 2 if that
review has covered both dumping and injury, or under this
paragraph), unless the authorities determine, in a review
initiated before that date on their own initiative or upon a
duly substantiated request made by or on behalf of the
domestic industry within a reasonable period of time prior
to that date, that the expiry of the duty would be likely to
lead to continuation or recurrence of dumping and injury.
The duty may remain in force pending the outcome of such a
review."
It is clear that Section 9A (5) has echoed Articles 11.1, 11.2 and 11.3. In
the context of the present discussion, it is pertinent that the
Implementation Agreement makes the imposition of duty during
pendency of sunset review discretionary ("The duty may remain in
force pending the outcome of such a review."). Likewise, second
proviso to Section 9A (5) states 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 a review for a further
period not exceeding one year".
W.P.(C) 1851/2014 & W.P.(C) 1866/2014 Page 26
23. The respondents' contention that continuing the anti-dumping
duty during pendency of the sunset review is more or less automatic, is
thus, belied by the terms of the Implementing Agreement, which was
enacted in the second proviso. It consequently does not follow as a
sequitur that whenever a sunset review is initiated under Section 9A (5),
first proviso, the duty existing as on that date, would continue. This
inference is obvious because, in the first instance, the original levy has a
life of only five years. Thus, the legality of such levy is supported - by
virtue of Section 9A (5) only for that duration. If the respondents wish
to continue the levy for a period beyond that, during pendency of sunset
review (which might not be concluded by the time the first period
expires) they have to issue a notification, before the expiry of that
period. It needs to be underlined here that but for the second proviso,
there can be no legal extraction, during the sunset review, if the
proceeding extends beyond the first five year period. In other words, the
second proviso truly carves out an exception and makes the levy which
otherwise would be invalid, on account of the operation of the main
part, i.e. Section 9A (5), valid if its conditions are fulfilled.
24. This court holds that the petitioners' submission that a
notification under Section 9A (1) issued after review is in the nature of
temporary legislation, is merited. A statute is ordinarily perpetual, in the
sense that no time is fixed for its duration. In that sense Section 9A is
perpetual. However, that provision is merely enabling; it authorizes a
levy of anti-dumping duty upon proof of injury, and upon fulfillment of
other conditions. Once notified, the levy has effect - in terms of the
notification and Section 9A (5) for five years. That levy is
W.P.(C) 1851/2014 & W.P.(C) 1866/2014 Page 27
consequently, temporary as the duration is finite. In these
circumstances, Section 6 of the General Clauses Act, which provides
that notifications, bye-laws etc. validly made under a repealed law can
continue to be in force, would have no application. This position was
clarified by the Supreme Court in District Mining Officer and others v.
Tata Iron and Steel Co. & Anr AIR 2001 SC 3134, where the question
as to what is a "temporary statute", was examined and it was observed
that:
"19......... A Statute can be said to be either perpetual or
temporary. It is perpetual when no time is fixed for its
duration and such a statute remains in force until its repeal
which may be express or implied. But a Statute is temporary
when its duration is only for a specified time and such a
Statute expires on the expiry of the specified time, unless it
is repealed earlier ..........Admittedly, to a temporary Statute,
the provisions of Section 6 of the General Clauses Act,
1897 will have no application .........A temporary Statute
even in the absence of a saving provision like Section 6 of
the General Clauses Act may not be construed dead for all
purposes and the effect of expiry is essentially one of the
construction of the Act......."
25. In the light of the above position, this Court holds that what
follows is that the levy of anti-dumping duty ended on 01-01-2014,
with the lapse of the original notification. The second proviso to
Section 9A (5) precluded the Central Government from continuing the
levy beyond that period or date, except to the extent its conditions
were fulfilled, i.e. if the levy of the duty were to have been notified
before such date. In such cases, the power under the second proviso to
W.P.(C) 1851/2014 & W.P.(C) 1866/2014 Page 28
Section 9A(5), after expiry of the date of the original notification, is
unavailable. The notification in the present case states that
“3. Notwithstanding anything contained in paragraph
2, this notification shall remain in force upto and inclusive
st
of the 1 day of January, 2015, with respect to anti-dumping
duty on Acrylonitrile Butadiene Rubber originating in, or
exported from Korea RP, unless revoked earlier”.
Neither does Section 9A (1) nor Section 9A (5) permit the extension of
anti-dumping duty once the main period of five years lapses, as held
earlier. The Central Government is not arguing that it had the benefit of
Section 21 of the General Clauses Act- for the simple reason that
extension or amendment of an earlier notification can be only after
following the procedure adopted while issuing the main notification. In
the present case, the amendment is retrospective, as it were, and made
effective from 2009. It was in fact made after the lapse of the first
period.
26. Long ago, in Nazir Ahmed v King Emperor , AIR 1936 PC 253,
the Privy Council declared that "[W]here a power is given to do a
certain thing in a certain way, the thing must be done in that way or not
at all." This salutary rule has been universally followed in numerous
later judgments, including those of the Supreme Court ( Rao Shiv
Bahadur Singh v. State of V.P. AIR 1954 SC 322; State of U.P. v.
Singhara Singh AIR 1964 SC 358 Meera Sahni vs. Lieutenant
;
Governor of Delhi & Ors. 2008 (9) SCC 187 and Shin-Etsu Chemical
Co. Ltd. vs. Aksh Optifibre Ltd. & Anr. reported in (2005) 7 SCC 234).
The imperative nature of second proviso to Section 9A (5) leaves no
room for doubt that in case the Central Government wishes to extend
W.P.(C) 1851/2014 & W.P.(C) 1866/2014 Page 29
the levy during the sunset review period, it has to comply with the terms
of that provision and do so, before expiration of the original period -
which in this case was 01-01-2014. Not having done so, its attempt to
levy the duty through the later notification of 23-01-2014 is without
authority of law; it is contrary to the terms of proviso to Section 9A
(5).The attempt to recover any amounts as duty, therefore, violates
Article 265 of the Constitution of India.
27. In view of the above findings, it is held that the initiation of
sunset review is valid and legal; however the levy of anti-dumping duty
through the impugned notification of 23-01-2014 is without authority of
law. The said notification is declared illegal and hereby set aside. The
petitioners are entitled to refund of the amounts paid till date. The writ
petitions partly succeed and are allowed to the above extent; there shall
be no order on costs.
S. RAVINDRA BHAT
(JUDGE)
VIBHU BAKHRU
(JUDGE)
JULY 11, 2014
W.P.(C) 1851/2014 & W.P.(C) 1866/2014 Page 30