By TIOL News Service

NEW DELHI, JULY 16, 2014: WHAT DDT has been shouting from the roof top all these years has come true. We are referring to the Central government notifications seeking to continue anti-dumping duty on goods well after the original notifications have outlived their shelf life.

In many of the DDT episodes, it was mentioned -

Of course as long as the Government's irresponsible right to resurrect dead notifications is not questioned, there is hardly any need for monitoring - they can merrily continue!

A couple of importers questioned this lackadaisical manner of issuance of notifications seeking to continue imposition of anti-dumping duty well after the original notification was dead and gone.

Read further -

Pursuant to the report furnished by the Designated Authority,the Central Government imposed anti-dumping duty on Acrylonitrile Butadiene Rubber originating in, or exported from Korea RP, by notification No. 01/2009-Customs, dated 02.01.2009. The notification in express terms was to be in force for five years, i.e. till 01.01.2014.

By amending notification 06/2014-Cus., (ADD), Dated: January 23, 2014, the following paragraph was inserted in notification 01/2009-Customs, dated the 2nd January, 2009

"3. Notwithstanding anything contained in paragraph 2, this notification shall remain in force upto and inclusive of the st day of January, 2015, with respect to anti-dumping duty on Acrylonitrile Butadiene Rubber originating in, or exported from Korea RP, unless revoked earlier".

Claim by the petitioner

The petitioner 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, 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. It is urged 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).

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 02.01.2009 notification so as to make it remain in force till 01.01.2015, was issued without any legal authority. In as much as 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.

It is argued 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; the Gazette copy was sent for distribution to Kitab Mahal, a book store, only on 06.01.2014. That being the case, 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.

Submissions by Revenue

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 judgment of this Court, in Indian Metal and Ferro Alloys v. Designated Authority - 2007-TIOL-682-HC-Del-AD.

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, the notification of 23.01.2014 - which sought to amend the original notification- is valid, and cannot be set aside.

Analysis and findings by the High Court

Notification of extension

+ 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 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.

+ 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.

+ 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.

Legality of the extension of levy notification

++ It is clear that Section 9A (5) has echoed Articles 11.1, 11.2 and 11.3 of the agreement for implementation of Article VI of GATT.

++ The 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".

++ 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.

++ 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.

++ 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 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.

++ 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 Section 9A(5) after expiry of the date of the original notification, is unavailable.

++ Neither does Section 9A(1) nor Section 9A(5) permit the extension of anti-dumping duty once the main period of five years lapses.

++ The imperative nature of second proviso to Section 9A (5) leaves no room for doubt that in case the Central Government wishes to extend 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.

++ 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.

(See 2014-TIOL-1130-HC-DEL-AD)