Anti-dumping duty - Notification No.5 of 2016, dated 22.02.2016 being substitutive in nature is to be held as retrospective: High Court
By TIOL News Service
CHENNAI, JULY 12, 2018: DEFINITIVE anti-dumping duty on import of All Fully Drawn or Fully Oriented Yarn/Spin Draw Yarn/Flat Yarn of Polyester (non-textured and non-POY) [subject goods] falling under sub-heading 5402 47 00 of the First Schedule to the Customs Tariff Act, 1975 originating in, or exported from, the People's Republic of China, Thailand and Vietnam was imposed by notification 124/2009-Cus dated 11 November 2009. This ADD was levied for a period of five years from the date of imposition of the provisional anti-dumping duty i.e. from 26th March 2009.
Later, it was extended till 25th March 2015 by notification 18/2014-Cus dated May 9, 2014.
A review was initiated in the matter of continuation of anti-dumping duty of the subject goods by the designated authority vide notification 15/3/2014-DGAD dated 24 March 2014 and vide final findings published vide notification 15/3/2014-DGAD dated 22 nd September 2015, it was concluded that dumping and consequent injury to the domestic industry is likely to continue and, therefore, it was recommended to impose anti-dumping duty on the subject goods.
Accordingly, anti-dumping duty was imposed on the subject goods for a period of five years from the date of publication of the impugned notification 51/2015-Cus(ADD) dated 21 October 2015.
Interestingly, in the Table annexed to the notification, whereas the description of the subject goods continued as earlier, the heading was truncated to 5402.
And, it is here that the dispute began.
The petitioner's case is that they are dealing with products which are classifiable under Heading 5402 2090 falling under the head "other" and the tariff description of Customs Heading 5402 20 falling under the said head is "High tenacity yarn of Polyester".
The petitioner has challenged the order in original dated 22.03.2016 confirming the assessment of the Bill of Entry under CTH 5402 2090 by including anti-dumping duty as per Customs Notification No.51/2015-Customs (ADD), dated 21.10.2015 and consequently rejecting the claim of the petitioner/importer that anti-dumping duty is not applicable for the subject goods.
The petitioner brings to the notice of the High Court the aforesaid developments that began in the year 2009 leading to the imposition and continuation of anti-dumping duty on the subject goods and as to how because of the confusion, the goods imported by the petitioner were un-necessarily dragged into the vortex of the notification 51/2015-Cus(ADD) dated 21 October 2015 and they were saddled with Anti-dumping duty.
Incidentally, by Notification No.5/2016-Cus.(ADD), dated 22.02.2016 the following amendment was carried out in the notification 51/2015-Cus(ADD) -
In the said notification, in the Table, in column (2), for the entry "5402", wherever it occurs, the entry "5402 47" shall be substituted.
The petitioner, therefore, submits that the aforesaid amendment operates retrospectively and hence their contention is correct.
The Revenue counsel with the support of some case laws submitted that since the subject Bills of Entry for which the refund claims are filed, are all dated prior to 22.02.2016, the amendment will not be applicable to these Bills of Entry.
Furthermore, the writ petitions should not be entertained as the petitioner had appeal remedy and there is no question of law involved.
To the submission by the counsel for the Revenue that no question of law is involved, the High Court held -
"14. Since the court has been called upon to adjudicate the effect of the notification, there is substantial question of law involved and, therefore, the court deems it proper not to relegate the petitioner to avail the appeal remedy as the scope of interpretation of the notification as to whether it is retrospective or not by an appellate authority is very limited."
The High Court noted that the result of the writ petitions would depend upon the interpretation to the Notification No.5 of 2016, dated 22.02.2016, as to whether it is prospective or retrospective.
Emphasizing upon usage of the word "substituted" in the amending notification, the High Court relied upon the apex court decision in Zile Singh v. State of Haryana reported in 2004 (8) SCC 1 (followed in Gold Coin Health Food Private Limited - 2008-TIOL-152-SC-IT and further observed -
++ In the absence of retrospective operation having been expressly given (in notification) the courts are entitled to construe the provision and answer the question whether the legislature had an intention to give the statute retrospective operation.
++ The legal principles deducible from the above decisions (in Fosroc Chemicals (India) Pvt. Limited - 2014-TIOL-1609-HC-KAR-CX, Shyam Sunder & Others v. Ram Kumar & Another AIR 2001 SC 2472, Government of India v. Indian Tobacco Association - 2005-TIOL-109-SC-CUS is that if subsequent act amends an earlier one in such a way as it incorporates itself or a part of itself into the earlier, the act must be construed as 'retrospective'. This is so, because, the word "substituted" would mean 'to put one in the place of another' or 'to replace'. Thus, on account of such substitution whatever consequences which have to follow would naturally be applicable to the assessee by such substitution. Thus, notification dated 22.02.2016 in Notification No.51 of 2016-Cus (ADD) having substituted Entry 5402 47 in the notification dated 21.10.2015 bearing Notification No.51 of 2015, it would mean that the Entry in the Notification dated 21.10.2015 shall be 5402 47 for all purpose and it shall be so with effect from 21.10.2015.
Concluding that the Notification No.5 of 2016, dated 22.02.2016 being substitutive in nature is to be held as retrospective, the Petition was allowed.
The respondent was directed to consider and sanction refund claim made by the petitioner as expeditiously as possible, preferably, within a period of three months.
+ The order-in-original dated 22.03.2010 is held to be not sustainable. Accordingly, the same is set aside.
+ Consequently, it is held that the petitioner, who has imported products classifiable under Chapter Heading - CTH 5402 2090, is not liable for payment of anti-dumping duty on the subject goods.