By TIOL News Service

NEW DELHI, JANUARY 2016: IT is the case of the petitioners that by virtue of rule 23(2) of the Customs Tariff (Identification, Assessment and Collection of Anti-Dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995, a review when initiated in terms of sub-rule (1) of rule 23 has to be concluded within a period not exceeding 12 months from the date of initiation of such review.

In all these writ petitions, the reviews have not been concluded within the period of 12 months from the dates of their initiation.

Consequently, the petitioners seek the quashing of the review proceedings and all steps pursuant thereto.

Provisions of rule 23 are extracted below -

"RULE 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) x x x

(1B) x x x

(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.

(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."

The respondents took the preliminary objection that the order of review is an appealable order under section 9C of the Customs Tariff Act, 1975 & the petitioners had an alternative remedy and, therefore, the writ petitions were not maintainable.

According to the petitioners, the review had mandatorily to be concluded within the said 12-month period and no extension of that period was permitted in law.

On the other hand, the respondents contended that by virtue of rule 23(3), the provisions of, inter alia , rule 17 were made applicable mutatis mutandis in the case of a review. And, since the first proviso to rule 17(1) permitted the Central Government, in its discretion in special circumstances, to extend the period of 1 year for submission of final findings by the designated authority by a further 6 months, applying the said proviso mutatis mutandis to a review, the period of 12 months stipulated in rule 23(2) for a review could also, in like manner, be extended by 6 months.

Rule 17(1) is extracted below -

"RULE 17. Final findings.-(1) The designated authority shall, within one year from the date of initiation of an investigation, determine as to whether or not the article and the investigation is being dumped in India and submit to the Central government its final finding-

x x x

Provided that the Central government may, in its discretion in special circumstances, extend further the aforesaid period of one year by six months:”

The High Court noted that the plea of alternative remedy does not come in the way in exercise of its jurisdiction under article 226 of the Constitution of India.

The petitioners submitted that the ‘rule' of mutatis mutandis is one of adaptation and not of adoption; that rule 17 is to be read with necessary changes as specifically provided in rule 23(2) and, therefore, since no extension is provided for in rule 23(2), that part of rule 17 which permits extension of time would not apply.

The respondents argued that by virtue of the provisions of rule 23(3), rule 17 has been incorporated in rule 23 which includes rule 23(2). Thus the first proviso to rule 17(1) would clearly apply, mutatis mutandis , to rule 23(2). Consequently, the initial period of 12 months laid down in rule 23(2) for concluding a review can be extended by 6 months by the Central government, by reading the first proviso to rule 17(1) into rule 23(2), submitted the counsel for the respondent.

As regards the argument of the petitioners which was founded on Article 11 of the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994, the respondents contended that Article 11.4 of the Agreement uses the term "normally" when it refers to the period of 12 months from the date of initiation during which the review ought to be concluded; that this in itself signifies that the period can be extended beyond 12 months.

The counsel for the interveners (domestic industry) supported the contentions raised by the respondents and submitted that the apex court decision in G.M. Exports (2015-TIOL-209-SC-CUS), rather than supporting the case of the petitioners, set the controversy at rest in favour of the interpretation that the period of 12 months could be extended by a further period of 6 months because such an interpretation was in line with the said WTO Agreement.

After extracting the relevant provisions and the meaning of the expression mutatis mutandis as appearing in the Black's Law Dictionary & as examined by the apex court on various occasions, the High Court inter alia observed thus -

+ While rule 17 deals with ‘final findings' of the designated authority on the conclusion of the investigation initiated under rule 5, rule 23 is concerned with the ‘review' of the need for the continued imposition of any anti-dumping duty. By virtue of rule 23(3), many of the provisions relatable to the initial investigation and its aftermath have been specifically made applicable mutatis mutandis to a review also.

+ Not all the provisions applicable in the case of an investigation have been made applicable in the case of a review because those provisions are not relevant in the case of a review.

+ So, only those provisions pertaining to investigation, final findings and levy of duty etc., which are relevant to a case of review have been made applicable mutatis mutandis. Rule 17, which includes the first proviso to rule 17(1), is one such provision.

+ Rule 23 and sub-rule (3) thereof, in particular, does not manifest an intention to give primacy to rule 23(2) over the first proviso to rule 17(1). On the contrary, from rule 23(3), which immediately follows rule 23(2), the clear intention appears to be to make all the provisions of, inter alia, rule 17, which are applicable in the case of an investigation, to also apply with adaptation (with necessary changes) to the case of a review under rule 23. The scheme of review is substantially similar to the scheme of investigation.

+ Rule 17 of the said rules would apply to a case of review under rule 23 "as it is with certain changes in points of detail". Consequently, the extension by six months permissible under the first proviso to rule 17(1) would also apply to the case of a review as it does to an investigation. And, that is the discernible intention behind rule 23(3).

Adverting to the decision of the Supreme Court in G.M. Exports (2015-TIOL-209-SC-CUS), the High Court further observed that the conclusions outlined in the said case would come into play.

Inasmuch as -

+ Article 11.4 of the said Agreement inter alia stipulates that the review contemplated under Article 11 shall be carried out expeditiously and shall "normally" be concluded within 12 months of the date of initiation of the review. Rule 23(2) of the said rules is modelled on Article 11.4 of the said Agreement. Thus, while construing rule 23(2) if any ambiguity is noticed, the same can be resolved by having recourse to Article 11.4.

+ The use of the word "normally" in Article 11.4 is of great significance. It means that the review under Article 11 is to be completed expeditiously and "normally" within 12 months but that is not an inflexible period. Considered in this light, and to bring the provisions of rule 23(2) in harmony with Article 11.4, rule 23(2) would have to be read as - any review initiated under sub-rule (1) shall "normally" be concluded within a period not exceeding twelve months from the date of initiation of such review. And, when the first proviso of rule 17(1) is applied (with necessary changes) to the case of a review it becomes immediately clear that the period of 12 months can be further extended by the Central Government in its discretion by 6 months but only if special circumstances exist.

The High Court, therefore, concluded that the Central Government has the power to grant an extension of 6 months for concluding a review.

The Writ Petitions were dismissed.

(See 2016-TIOL-46-HC-DEL-CUS)