21 July 2014

Anti-dumping duty – Extension after expiry of original notification, not valid

Anti-dumping duty cannot be extended by amending notification issued after expiry of the original notification imposing definitive ADD. The Delhi High Court in its judgement dated 11-7-2014 has set aside the notification issued by Central Board of Excise & Customs (CBEC) which extended the levy, due to non-completion of sunset review, after the original notification had expired. The challenge to the initiation of sunset review, on grounds of non-communication through the gazette before the expiry of the levy, was however not upheld by the court in a case involving imports of Acrylonitrile Butadiene Rubber from Korea RP.


No automatic extension of ADD

Observing that Section 9A(5) of the Customs Tariff Act, 1975 echoes Articles 11 of the WTO’s Anti-dumping Agreement, it was held that imposition of anti-dumping duty during pendency of review proceedings is discretionary. Department’s contention that continuation of anti-dumping duty during pendency of the sunset review is more or less automatic was hence rejected by the court also noting that the life of the original levy is only five years.


Extension of expired levy not valid

Interpreting the second proviso to Section 9A(5) as carving out an exception while making the invalid levy as valid if it’s conditions are fulfilled, the court held that if the authorities wish to continue the levy for a period beyond prescribed five years, during pendency of sunset review, they have to issue a notification before the expiry of five year period. It was found that power to continue with the ADD under said section is not available after expiry of the original notification. Section 6 of the General Clauses Act, providing for continuation of notifications issued under repealed Act, was found to be not applicable in the present case.


Communication of initiation of sunset review – Unreasonable delay

Plea of invalidity of initiation of sunset review, since the same was not communicated before the expiry of the original levy, was however rejected by the court in the circumstances of the case, holding that 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 is valid. It was noted that though Rule 23(3) holds that provisions of Rule 6 are applicable mutatis mutandis to review investigations, it does not make publication/making available of public notice a precondition for initiation of sunset review. The Court in this regard also observed that even Rule 6 does not state that the notice should be published in the official gazette and Section 9A(5) of the Customs Tariff Act, 1962, relating to initiation of review, does not mandate a gazette notification for such review. It was however held that the inquiry can be argued as vitiated if the public notice for initiation of review is unreasonably delayed.


Browse articles