Decision Of CG Not To Impose Anti-Dumping Duty, Quasi-Judicial In Nature; Principles Of NJ Must Be Followed: CESTAT

The New Delhi bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has reiterated that the decision taken by the Central Government to not impose anti-dumping duty under Section 9A of the Customs Tariff Act, 1975, is quasi-judicial in nature and not legislative, and thus, the requirement of a reasoned order must be compiled with. The Tribunal ruled that the decision taken by the Central Government, vide its Office Memorandum dated 06.06.2022, to not impose anti-dumping duty on imports of Low Density Polyethylene from certain countries, including Qatar, Saudi Arabia and Singapore, despite a positive recommendation made by the designated authority, cannot be sustained since it did not contain any reasons. The bench of Justice Dilip Gupta (President), P.V. Subba Rao (Technical Member) and Rachna Gupta (Judicial Member) noted that the designated authority, after detailed analysis, had concluded that the domestic industry had suffered material injury due to significant dumping of the said product from the given countries. The CESTAT thus struck down the Office Memorandum, remitting the matter back to the Central Government for taking a fresh decision on the recommendation made by the designated authority. The appellant- Chemical and Petrochemicals Manufactures Association (CPMA), is a domestic Industry, who filed an application before the Designated Authority, Directorate General of Trade Remedies, for initiation of anti-dumping investigation under the Customs Tariff Act, 1975 and the Anti-Dumping Rules, 1995, on imports of Low Density Polyethylene originating in or exported from Qatar, Saudi Arabia, Singapore, Thailand, United Arab Emirates (UAE) and the United States of America (USA). The designated authority made a recommendation to the Central Government to impose anti-dumping duty, noting that the domestic industry had suffered material injury due to the said imports. By an Office Memorandum dated 06.06.2022, issued by the Ministry of Finance, the Central Government notified its decision not to impose anti-dumping duty. Against this, the appellant filed an appeal before the CESTAT, seeking to set aside the said Office Memorandum. The appellant sought a direction to the Central Government to issue a notification imposing anti-dumping duty, based on the recommendations made by the designated authority. The appellant-CPMA, submitted before the Tribunal that the Office Memorandum, communicating the decision of the Central Government to not impose anti-dumping duty, despite a recommendation having been made by the designated authority, was arbitrary and that it violated the principles of natural justice. The Union of India argued that the appeal was not maintainable under Section 9C of the Tariff Act. It contended that the Central Government’s power to impose anti-dumping duty under Section 9A of the Tariff Act read with Rule 18 of the 1995 Anti-Dumping Rules, is legislative in nature and thus, the principles of natural justice are not required to be complied with, nor is a reasoned order required to be passed. Referring to its decision in M/s. Apcotex Industries Limited versus Union of India & Ors. (2022), the Tribunal reiterated that an appeal under Section 9C of the Tariff Act would be maintainable against the Central Government’s decision to not impose anti-dumping duty. The CESTAT in M/s. Apcotex Industries Limited (2022) had ruled that the power exercised by the Central Government to impose anti-dumping duty or the decision taken by it to not impose anti-dumping duty under Section 9A of the Tariff Act, is quasi-judicial in nature and not legislative. It added that even if it was assumed that the Central Government exercises legislative powers when it takes a decision not to impose anti-dumping duty, it would still be a piece of conditional legislation and thus, the principles of natural justice and the requirement of a reasoned order would have to be compiled with. Thus, the Central Government must record reasons when it proceeds to form an opinion not to impose any anti-dumping duty despite a positive recommendation made by the designated authority, the Tribunal observed. It further noted that the Gujarat High Court in Realstripes Ltd. versus Union of India (2022) had held that the notification issued by the Central Government, rescinding the countervailing duty, is amenable to judicial review since it is quasi-judicial in nature. Thus, the CESTAT concluded that the decision taken by the Central Government to not impose anti-dumping duty despite a positive recommendation of the designated authority, cannot be sustained, since it did not contain any reasons and nor were the principles of natural justice complied with. The Tribunal remitted the matter back to the Central Government for taking a fresh decision on the recommendation made by the designated authority for imposition of...

Decision Of CG Not To Impose Anti-Dumping Duty, Quasi-Judicial In Nature; Principles Of NJ Must Be Followed: CESTAT

Parina Katyal

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Decision Of CG Not To Impose Anti-Dumping Duty, Quasi-Judicial In Nature; Principles Of NJ Must Be Followed: CESTAT

Parina Katyal

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