Supreme Court of India
UNION OF INDIA AND ANOTHERversusM/S. KUMHO PETROCHEMICALS COMPANY LIMITED AND ANOTHER
- Citation
- 2017 INSC 476
- Decided
- 9 June 2017
- Disposal
- Dismissed
- Bench
- A K SIKRI
Holding
Section 9A(5) requires only that a sunset review be initiated before the expiry of the original five‑year period; the second proviso is an enabling provision, so continuation of anti‑dumping duty is not automatic and must be effected by a fresh notification issued before the original notification lapses.
Summary
The case concerned the levy of anti‑dumping duty on imports of Acrylonitrile‑Butadiene‑Rubber (NBR) from Korea. The original notification imposing the duty was extended by a five‑year notification dated 02‑01‑2009, which expired on 01‑01‑2014. A third sunset‑review was initiated on 31‑12‑2013, and the Government issued a notification on 23‑01‑2014 extending the duty for another year under the second proviso of Section 9A(5) of the Customs Tariff Act, 1975. Writ petitions challenged (i) whether the initiation date of the sunset review should be the date of Gazette publication (06‑01‑2014) and (ii) whether a notification could validly amend a non‑existent earlier notification. The High Court held that public notice was not a statutory requirement and that the 23‑01‑2014 amendment was invalid. The Supreme Court affirmed that Section 9A(5) only requires the review to be initiated before expiry, does not mandate Gazette publication, and that the second proviso is merely enabling – continuation of duty requires a fresh notification issued before the original notification lapses. Consequently, the appeals were dismissed.
Issues considered
- The appropriate date for determining the initiation of a sunset review under Section 9A(5) – whether the date of Gazette publication or the date of the Government's decision.
- Whether a notification issued after the expiry of the original anti‑dumping duty notification can validly amend that expired notification.
- Whether the second proviso to Section 9A(5) creates an automatic continuation of duty or requires a discretionary act of the Central Government.
Legislation cited
Subjects
anti‑dumping dutysunset reviewCustoms Tariff ActSection 9Anotificationpublic noticeWTOGATTenabling provisiontemporary legislationdiscretionary power
Judgment
[2017] 4 S.C.R. 324
A UNION OF INDIA AND ANOTHER
v.
MIS. KUMHO PETROCHEMICALS COMPANY LIMITED AND
ANOTHER
B (Civil Appeal Nos. 8309-8310 of 2017)
JUNE 09, 2017
[A. K. SIKRI AND ASHOK BHUSHAN, JJ.]
Customs Tariff' Act, 1975 - s. 9A(5) - Anti-Dumping Duty -
C Levy of - Sunset review investigation - Relevant date for sunset
review - Import of Acrylonitrile Butadiene Rubber from abroad -
Initiation of first sunset review investigation recommending levy of
anti-dumping duty, thereafter, second sunset review - Subsequently,
initiation of third sunset review investigation on 31.12.13 in respect
of duty imposed on import of rubber - Notification dated 02. 01.2009
D extending period of anti-dumping duty for another five years
effective till 01.01.2014 - On 23.01.2014, issuance of Notification
extending the duty by one year, i.e. 01.01.2015. pending
investigation - Writ petition challenging the Notification dated
23.01.2014 - High Court held that order of continuation of anti-
£ dumping duty, made ajier expiry of the duty period is bad in law;
and that the public notice of initiation need not be published in the
official gazette - On appeal held: Requirement of s. 9A(5) is that
the sunset review is to be initiated before the expiry of the original
period for which the anti-dumping duty prevails - There is no
additional requirement of making it public, before the said expiry
F date - Duty would not automatically get continued after the expiry
of five years simply because review exercise is initiated before the
expiry of the said period - On facts, when Notification dated
02.01.2009 itself had lapsed on the expiry of five years, i.e. on
01.01.2014, and was not in existence on 23.01.2014, amendment
G of non-existing Not(fication did not arise - Amendment was to be
carried out during the lifetime of the Notification dated 02.01.2009-
High Court rightly held that Notification dated 02.01.2009 was in
nature of temporary legislation and could not be amended after it
lapsed.
Dismissing the appeals, the Court
H
324
UNION OF INDIA v. MIS. KUMHO PETROCHEMICALS 325
COMPANY LIMITED
HELD: 1.1 The requirement of Section 9A(5) of the A
Customs Tariff Act, 1975 is that the sunset review is to be initiated
before the expiry of the original period for which the anti-dumping
. duty prevails. There is no additional requirement of making it
public as well, necessarily before the said expiry date. The
conclusion of the High Court that insofar as requirement ofpµblic
8
notice or a Gazette Notification is concerned, no such stipulation
is made in Section 9A(5) and its proviso, is accepted. On the
other hand, Section 9A(l), which deals with imposition of anti-
dumping duty, specifically refers to such an imposition by way of
publication in an Official Gazette. Therefore, as far as initiation of
review is concerned, once a decision is taken by the Government C
on a particular date, that would be the relevant date and not the
date on which it is made public. [Paras 16, 17][344-D-F]
1.4 From the scheme of Section 9A of the Act, it becomes
clear that though the Notification for anti-dumping duty is valid
for a maximum period of five years, the said period can be extended D
further with the issuance of fresh notification. For this purpose,
it is necessary to initiate the review exercise before the expiry
of the original notification, which review is commonly known as
'sunset review'. There may be situations where the sunset review
is undertaken but the review exercise is not complete before
the expiry of the period of original notification. It is because of E
the reason that the exercise of sunset review also demands
complete procedure to be followed, in consonance with the
principles of natural justice that was followed while imposing the
anti-dumping duty in the first instance. To put it otherwise, this
exercise contemplates hearing the views of all stakeholders by F
giving them adequate opportunity in this behalf and thereafter
arriving at a conclusion that the continuation of the anti-dumping
duty is justified, othenvise injury to the domestic industry is likely
to continue or reoccur, if the said anti-dumping duty is removed
or varied. Since this exercise is likely to take some time and may
go beyond the period stipulated in the original notification G
imposing anti-dumping duty, in order to ensure that there is no
vacuum in the interregnum, second proviso to sub-section (5) of
Section 9A of the Act empowers the Central Government to
continue the anti-dumping duty for a further period not exceeding
H
326 SUPREME COURT REPORTS [2017] 4 S.C.R.
·A one year, pending the outcome of such a review. The question,
however, is as to whether this extension to fill the void that may
be created during the pendenl)' of the sunset review is exercised
is automatic, once the decision is taken to have sunset review of
the anti-dumping duty or the continuation of such an anti-dumping
duty has to be by a proper notification. [Para 30][351-D-H; 352-
8
A-B)
1.5 Proviso to sub-section (5) of Section 9A of the Act is an
enabling provision. That is very clear from the language of the
said provision itself: Sub-section (5) of Section 9A gives maximum
life of five years to the imposition of anti-dumping duty by issuing
C a particular notification. Of course, this can be extended by issuing
fresh notification. However, the words 'unless revoked earlier'
in sub-section (5) clearly indicate that the period of five years
can be curtailed by revoking the imposition of anti-dumping duty
earlier. Of course, provision for review is there, and the Central
· D Government may extend the period if after undertaking the
review it forms an opinion that continuation of such an anti-
dumping duty is necessary in public interest. When such a
notification is issued after review, period of imposition gets
extended by another five years. That is the effect of first proviso
to sub-section (5) of Section 9A. However, even as per sub-
E section (5) it is not necessary that in all cases anti-dumping duty
shall be imposed for a full period of five years as it can be revoked
earlier. Li~wise, when a review is initiated but final conclusion
is not arrived at and the period of five years stipulated in the
original notification expires in the meantime, as per second·
F proviso 'the anti-dumping duty may continue to remain in force'.
However, it cannot be said that the duty would automatically get
continued after the expiry of five years simply because review
exercise is initiated before the expiry of the said period. It cannot
be- denied, that issuance of a notification is necessary for
extending the period of anti-dumping duty. Reason is simple. No
duty or tax can be imposed without the authority of 'law'. Here,
such a law has to be in the form of an appropriate notification and
in the absence thereof the duty, which is in the form of a tax,
cannot be extracted as, otherwise, it would violate the provisions
of Article 265 of the Constitution of India. As a fortiorari, it
H
UNION OF INDIA v. MIS. KUMHO PETROCHEMICALS 327
COMPANY LIMITED
becomes apparent that the Government is to exercise its power A
to issue a requisite notification. In this hue, the expression 'may'
in the second proviso to sub-section (5) has to be read as enabling
power which gives discretion to the Central Government to
determine as to whether to exercise such a power or not. [Para
31][352-D-H; 353-A-B]
B
1.6 Once sunset review is initiated, such initiation takes
place only after a substantiated application/request is filed by the
indigenous industry which is examined and a prima facie view is
formed by the Central Government to the effect that such a review
is necessitated as withdrawal of anti-dumping duty or cessation
thereof may be prejudicial to the indigenous industry. Once such C
an opinion is formed and the sunset review is initiated, in all
likelihood the Central Government would make use of second
proviso and issue notification for continuing the said anti-dumping
duty. At the same time, it cannot be said that without any overt
act on the part of the Central Government, there is an automatic D
continuation. The legislature has consciously used the expression
'may' and 'shall' at different places in the same Section, i.e.,
Section 9A. In such a scenario, it has to be presumed that different
expressions were consciously chosen by the Legislature to be
used, and it clearly understood the implications thereof, therefore,
when the word 'may' is used in the same Section in E
contradistinction to the word 'shall' at other places in that very
Section, it is difficult to interpret the word 'may' as 'shall'.
Therefore, it is difficult to read the word 'may' as 'shall'. [Para
32] [353-C-F]
1. 7 The anti-dumping duty may continue, pending the F
outcome of the review, for a further period not exceeding one
year. Thus, maximum period of one year is prescribed for this
purpose which implies that the period can be lesser as well. The
Government is, thus, to necessarily form an opinion as to for how
much period it wants to continue the anti-dumping duty pending G
outcome of such a review. Moreover, since the maximum period
is one year, if the review exercise is not completed within one
year, the effect of that would be that after the lapse of one year
there would not be any anti-dumping duty even if the review is
pending. In that eventuality, it is only after the review exercise is
H
328 SUPREME COURT REPORTS [2017] 4 S.C.R.
A complete and the Central Government forms the opinion that
the cessation of such a duty is likely to lead to continuation or
recurrence of clumping and injury, it would issue a notification
extending the period of imposition of duty. Therefore, there may
be a situation where even when the power is exercised under
second proviso and duty period extended by full one year, the
B
review exercise could not be completed within that period. In
that situation, vacuum shall still be created in the interregnum
beyond the period of one year and till the review exercise is
complete and fresh notification is issued. This situation belies
the argument that extension under second proviso is to be treated
c as automatic to avoid the hiatus or vacuum in between. [Para
33 J[353-G-H; 354-A-C]
1.8 The High Court held that once the earlier Notification
by which anti-clumping duty was extended by five years, i.e. up to
January 01, 2014, expired, the Central Government was not
D empowered to issue any Notification after the said date, namely,
on January 23, 2014, inasmuch as there was no Notification in
existence the period whereof could be extended. The High Court,
in the process, also held that the Notification extending anti-
clumping duty by five years, i.e. up to January 01, 2014 was in the
nature of temporary legislation and validity thereof could be
E extended, in exercise of powers contained in second proviso to
sub-section (5) of Section 9A of the Act only before January 01,
2014. There is no infirmity in the said approach of the High Court
in interpreting the second proviso to Section 9A(5) in the light of
Article 11.1, 11.2 and 11.3 of the Agreement for Implementation
F and Article VI of the GATT, commonly known as 'Implementation
Agreement'. [Paras 36, 37)[355-B-E]
1.9 Two things which follow from the reading of the Section
9A(5) of the Act are that not only the continuation of duty is not
automatic, such a duty during the period of review has to be
G imposed before the expiry of the period of five years, which is
the life of the Notification imposing anti-dumping duty. Even
othenvise, Notification dated January 23, 2014 amends the earlier
Notification dated January 02, 2009, which is clear from its
language. However, when Notification dated January 02, 2009
itself had lapsed on the expiry of five years, i.e. on January 01,
H
UNION OF INDIA v. MIS. KUMHO PETROCHEMICALS 329
COMPANY·LJMITED
2014, and was not in existence on January 23, 2014 question of A
amending a non-existing Notification did not arise at all. As a
sequitur, amendment was to be carried out during the lifetime of
the Notification dated January 02, 2009. The High Court, thus,
rightly remarked that Notification dated January 02, 2009 was in
the nature of temporary legislation and could not be amended
8
after it lapsed. [Para 40}[356-E-HJ
Rishiroop Polymers (P) Ltd. v. Designated Authority and
Additional Secretary [2006) 3 SCR 252 : (2006) 4 SCC
303 - distinguished.
Fibre Boards Private Limited, Bangalore v. c
Commissioner of Income Tax, Bangalore [2015) 8 SCR
906 : (2015) 10 sec 333 - held inapplicable.
Reliance Industries v. Designated Authorities [2006] 6
Suppl. SCR 1 : (2006) 10 SCC 368; B. K. Srinivasan &
Ors. v. State of Karnataka & Ors. [1987) 1 SCR 1054 D
: (1987) 1 SCC 658; Union of India & Ors. v. Ganesh
Das Bhojraj [2000) 1 SCR 1081 : (2000) 9 SCC 461;
Union of India v. Param Industries Ltd. 2015 (321) ELT
192 (SC); Automotive Tyre Manufacturers Association
v. Designated Authority & Ors. [2011] l SCR 198 :
(2011) 2 SCC 258; N. Nagendra Rao & Co. v. State of E
A.P. (1994) 3 Suppl. SCR 144 : (1994) 6 sec 205;
Dinkar Anna Patil and Another v. State of Maharashtra
and Others [1998) 2 Suppl. SCR 564 : (1999) l SCC
354; Suh-Committee on Judicial Accountability i: Union
of India and Another (1991) 4 SCC 699; Life Insurance F
Corporation of India v. Escorts Ltd. [1985] 3 Suppl.
SCR 909 : (1986) 1 SCC 264; Babu Varghese F. Bar
Council of Kera/a [1999) 1 SCR 1121 : (1999) 3 SCC
422; Harivansh Lal Mehra v. State of Maharashtra
[1971] Suppl. SCR 113 : (1971) 2 SCC 54 - referred
to. G
Case Law Reference
[2006] 6 Suppl. SCR 1 referred to Para 9
[1987] 1 SCR 1054 referred to Para 13
H
330 SUPREME COURT REPORTS [20 l 7] 4 S.C.R.
A [2000) 1 SCR 1081 referred to Para 14
2015 (321) ELT 192 (SC) referred to Para 14
[2011] 1 SCR 198 referred to Para 15
[2006] 3 SCR 252 distinguished Para 34
B [2015] 8 SCR 906 held inapplicable Para 34
[1994) 3 Suppl. SCR 144 referred to Para 25
[1998) 2 Su1lpl. SCR 564 referred to Para 25
(1991) 4 sec 699 referred to Para 25
c [1985] 3 Suppl. SCR 909 referred to Para 27
[1999] 1 SCR 1121 referred to Para 29
[1971] Suppl. SCR 113 referred to Para 29
CIVIL APPELLATE JURISDICTION: Civil Appeal Nos.
8309-8310 of 20 l 7.
D
From the Judgment and Order dated 11.07.2014 ofthe High Court
of Delhi at New Delhi in WP (C)No. 1851 of2014and WP No. 1866 of
2014
WITH
E Civil Appeal No. 8312, 8313, 8314 and 8311 of2017.
Ms. Pinky Anand, ASG, Basava Prabhu Patil, Sr. Adv.,
Ms. Madhavi Divan, Ms. Rash mi Malhotra, Arij it Prasad, Vijay Prakash,
HemantArya, B. Krishna Prasad, V. Lakshmikumaran, Darpan Bhuyan,
Ankit Sharma, Bhargava Mansanta, Anil Dutt, M. P. Devanath,
F Ms. Reena Khair, Rajesh Sharma, Ms. Rita Jha, Ms. Shreya Dahiya,
E. C. Agrawala, Sanjay Sharawat, Ashish Chandra, Ms. Tanvi Praveen,
Ab hay Kumar and Devashish Bharuka, Advs. for the appearing parties.
The Judgment of the Court was delivered by
A. K. SIKRI, J. l. On the demand raised by the indigenous
G industry, original/ordinmy investigation concerning imports ofAcrylonitrile
Butadiene Rubber (hereinafter referred to as the 'product') was taken
up sometime in March 1996 for the purpose of levy of anti-dumping duty
on the said import from Korea RP and Germany. The primary finding to
this effect came to be published on July 17, 1997 whereby the Designated
H Authority recommended definitive anti-dumping duty. That resulted into
UNION OF INDIA v. M/S. KUMHO PETROCHEMICALS 33 l
COMPANY LIMITED [A. K. SIKRI, J.]
issuance ofNotification dated July 30, l 997 by the Central Government A
whereby anti-dumping duty was imposed under Section 9A of the
Customs Tariff Act, 1975 (for short, the 'Acf) on the said product.
Before the expiry of five years period during which anti-dumping duty
remains operative, the first sunset review investigation was initiated by
the Authority which recommended continued levy ofanti-dumping duty.
8
It resulted into another Notification dated October l 0, 2002. As per this
Notification, the anti-dumping duty was to remain in force till October
10, 2007. Just before that, on October 08, 2007, second sunset review
investigation was initiated by the Authority, which resulted in
recommendation dated October 04, 2008 for continued imposition of
anti-dumping duty on imports of the product from Koreal RP. On the C
basis of this recommendation, another Notification dated January 02,
2009 was issued by the Central Government, which was to remain in
force till January 01, 2014. On December 3 l, 2013, that is one day
before the aforesaid Notification was to lapse, third sunset review
investigation in respect of duty imposed on the imports of the subject D
product from Korea RP was initiated. Pursuant to the initiation of the
said sunset review investigation, the Central Government issued
Notification No. 6/2014-Customs dated January 23, 2014 thereby
extending the validity of duty by one year, i.e. up to January 0 l, 20 l 5,
pending investigation. This was done in exercise of powers contained in
second proviso to sub-section (5) ofSection 9A of the Act. The aforesaid E
Notification dated January 23, 2014 came to be challenged by filing writ
petitions by M/s. Kumho Petrochemicals Company Limited (respo1~dent
No. I herein), who is a purchaser and exporter of the product from Korea
RP, as well as by Fairdeal Polychem LLP (an importer of product from
Korea RP). The High Court has, vide impugned judgment dated July 11,
2014, decided both the writ petitions. It has partly allowed these writ
F
petitions holding thatthe orderofcontinuation ofanti-dumping duty, made
after expiry of the duty period, is bad in law. However, another contention
of the two writ petitioners, namely, the initiation of the anti-dumping duty
investigation was also bad in law on the ground that public notice of
initiation was not published in the Official Gazette before January 0 l, G
2014, i.e., before the expiry of the anti-dumping duty at the end of five
years period, has not been accepted by the High Court. Repelling this
argument, it is held by the High Court that public notice of initiation need
not be published in the Official Gazette and that public notice is not a
pre-requisite for initiation of an investigation, which can be issued within
H
332 SUPREME COURT REPORTS [2017] 4 S.C.R.
A a proximate period of time after its initiation. Union of India and
Automotive Manufacturers Association in India felt aggrieved by that
part of the judgment whereby extension of anti-dumping duty has been
allowed to be bad in law. Their appeals challenge that part of the order.
On the other hand, writ petitioners are not satisfied with the outcome of
the second issue about the initiation of anti-dumping duty. This part is
B
challenged by these two writ petitioners. Mis. Omnova Solution (Pvt.)
Limited is the other appellant which is also a domestic industry'and has
challenged the orders by filing two writ petitions thereby supporting the
stand of Union of India and Manufacturers Association. ft is for this
reason all these appeals are heard analogously, which we propose to
C decide by this common judgment.
2. Few dates which are material to appreciate the controversy
and the stand which is taken by the respective parties need to be
recapitulated. Since we are concerned with the validity of initiation of
the third sunset review as well as Notification dated January 23, 2014
D vide which earlier Notification was amended and extended for a period
of one year under Section 9A of the Act, we will mention those dates
which revolve around the aforesaid controversy.
3. As mentioned above, after the second sunset review,
Notification dated January 02, 2009 was issued extending the period of
E anti-dumping duty for another five years, i.e. till January 0l,2014. On
December 31, 2013, a day before the period of the aforesaid Notification
was to expire, third sunset review was initiated. However, notification
dated December 31, 2013 was made available only on January 06, 2014,
i.e. after the expiry of original Notification. Thereafter, Notification
dated January 23, 2014 was issued amending the earlier Notification
F dated January 02, 2009 so as to make it remain in force till January 0 l,
2015. This power of interim measure, pending review exercise is
enshrined in second proviso to Section 9A(5) of the Act.
4. Entire scheme of anti-dumping is contained in Section 9A of
the Act which reads as under:
G
"9A. (I) Where any article is exported by an exporter or producer
from any country or territory (hereafter in this section referred to
as the exporting country or territory) to India at less than its normal
value, then, upon the importation of such article into India, the
Central Government may, by notification in the Official Gazette,
H
UNION OF INDIA v. M/S. KUMHO .PETROCHEMICALS 333
COMPANY LIMITED [A. K. SIKRI, J.]
impose an anti-dumping duty not exceeding the margin of dumping A
in relation to such article.
Explanation. - For the purposes of this section, -
(a) "margin of dumping" in relation to an article, means the
difference between its export price and its normal value;
B
(b) "export price", in relation to an article, means the price of the
article exported from the exporting country or territory and in
cases where there is no export price or where the export price is
unreliable because of association or a compensatory arrangement
between the exporter and the importer or a third party, the export
price may be constructed on the basis of the price at which the C
imported articles are first resold to an independent buyer or ifthe
article is not resold to an independent buyer, or not resold in the
condition as imported, on such reasonable basis as may be
determined in accordance with the rules made under sub-section
W; D
(c) "normal value", in relation to an article, means -
(i) the comparable price, in the ordinary course of trade, for the
like article when destined for consumption in the exporting country
or territory as determined in accordance witli the rules made under
sub-section (6); or E
(ii) when there are no sales of the like article in the ordinary course
of trade in the domestic market ofthe exporting country or territory,
or when because of the particular market situation or low vo:ume
of the sales in the domestic market of the expmiing country or
territory, such sales do not permit a proper comparison, the normal F
value shall be either -
(a) comparable representative price of the like article when
exported from the exporting country or territory to an
appropriate third country as determined in accordance with
the rules made under sub-section'(6); or G
(b) the cost of production of the said article in the count~y of
origin along with reasonable addition for administrative, selling
and general costs, and for profits, as determined in accordance
with the rules made under subsection(6):
H
334 SUPREME COURT REPORTS [2017] 4 S.C.R.
A Provided that in the case of import of the article from a country
other than the country of origin and where the article has been
merely transhipped through the country of export or such article
is not produced in the country of export or there is no
comparable price in the country of expo1t, the normal value
shall be determined with reference to its price in the country
B
oforigin.
(2) The Central Government may, pending the determination in
accordance with the provisions of this section and the rules made
thereunderof the nonnal value and the margin of dumping in relation
to any aiticle, impose on the impo1tation of such article i11to India
c an anti-dumping duty on the basis of a provisional estimate of
such value and margin and if such anti-dumping duty exceeds the
margin as so determined, -
(a) the Central Government shall, having regard to such
determination and as soon as may be after such determination,
D reduce such anti-dumping duty; and
(b) refund shall be made of so much of the antidumping duty
which has been collected as is in excess of the anti-dumping
duty as so reduced.
E (2A) Notwithstanding anything contained in subsection (I) and
sub-section (2 ), a notification issued under sub-section (I) or any
anti-dumping duty imposed under subsection (2), unless
specifically made applicable in such notification or such imposition,
as the case may be, shall \lOt apply to articles imported by a hundred
per cent. export oriented undertaking or a unit in a free trade zone
F or in a special economic zone.
Explanation. - For the purposes of this section, the expressions
"hundred per cent. export-oriented undertaking", "free trade zone"
and "special economic zone" shall have the meanings assigned to
them in Explanations 2 to sub-section (f) of section 3 of Central
G Excise Act, 1944.
(3) If the Central Government, in respect of the dumped article
under inquiry, is of the opinion that-
( i) there is a history of dumping which caused injury or that the
importer was, or should have been, aware that the exporter
H
UNION OF INDIA v. MIS. KUMHO PETROCHEMICALS 335
COMPANY LIMITED [A. K. SIKRI, J.]
practices dumping and that such dumping would cause injury; A
and
(ii) the injury is caused by massive dumping of an article imported
in a relatively short time which in the light of the timing and the
volume of imported article dumped and other circumstances is
likely to seriously undermine the remedial effect of the B
antidumping duty liable to be levied,
the Central Government may, by notification in the Official Gazette,
levy anti-dumping duty retrospectively from a date prior to the
date of imposition of anti-dumping duty under sub-section (2) but
not beyond ninety days from the date of notification under that C
sub-section, and notwithstanding any thing contained in any other
law for the time being in force, such duty shall be payable at such
rate and from such date as may be specified in the notification.
(4) The anti-dumping duty chargeable under this section shall be
in addition to any other duty imposed under this Act or under any o
other law for the time being in force.
(5) The anti-dumping duty imposed under this section shall, unless
revoked earlier, cease to have effect on the expiry of five years
from the date of such imposition:
Provided that if the Central Government, in a review, is of the E
opinion that the cessation of such duty is likely to lead to
co:itinuation or recurrence of dumping and inj wy, it may, from
time to time, extend the period of such imposition for a further
period of five years and such further period shall commence from
the date of order of such extension.
F
Provided further that where a review initiated before the expi1y
of the aforesaid period of five years has not come to a conch:sion
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.
G
(6) The margin of dumping as referred to in subsection ( l) or sub-
section (2) shall, from time to time, be ascertained and detern:ined
by the Central Government, after such inquiry as it may consider
necessary and the Central Government may. by notification in the
Official Gazette, make rules for the purposes of this section, and
H
336 SUPREME COURl' REPORTS [2017] 4 S.C.R.
A without prejudice to the generality of the foregoing such rules
may provide for the manner in which articles liable for any anti-
dumping duty under this section may be identified and for the
manner in which the export price and the normal value of and the
margin of dumping in relation to, such articles may be determined
and for the assessment and collection of such anti-dumping duty.
B
(6A) The margin of dumping in relation to an article, exported by
·an exporter or producer, under inquiry under subsection (6) shall
be determined on the basis of records concerning normal value
and export price maintained, and information provided, by such
exporter or producer:
c
Provided that where an exporter or producer fails to provide such
records or information, the margin of dumping for such exporter
or producer shall be determined on the basis of facts available.;
(7) Every notification issued under this section shall, as soon as
D may be after it is issued, be laid before each House of Parliament.
(8) The provisions of the Customs Act, l962 and the rules and
regulations made thereunder, including those relating to the date
for determination of rate of duty, assessment, non-levy, short levy,
refunds,. interest, appeals, offences and penalties shall, as far as
E may be, apply to the duty chargeable under this section as they
apply in relation to duties leviable under that Act."
5. We are concerned with sub-section (5) of Section 9A of the
Act which lays down that anti-dumping duty imposed under the said
provision, unless revoked earlier, ceases to have effect on the expiry of
F five years from the date of such imposition. It means that such a
notification has maximum life of 5 years. Thus, in normal course,
Notification dated January 02, 2009 would have come to an end on
January 0 I, 2014. However, first proviso to sub-section ( l) of Section
9A of the Act empowers the Central Government to extend the period
of such imposition for a further period of five years after undertaking a
G review. Second proviso stipulates that where a review is initiated before
the expiry of the aforesaid period of five years, but the Authority has not
come to a conclusion before such expiry, the anti-dumping duty may
continue to remain in force for a further period not exceeding one year.
This second proviso, thus, is to provide a stopgap arrangement to take
H care of those contingencies where review exercise, though initiated
UNION OF INDIA v. M/S. KUMHO PETROCHEMICALS 337
COMPANY LIMITED [A. K. SIKRI, J.]
earlier, could not be concluded during the currency of anti-dumping duty A
period specified in the notifications. It is in exercise of this power
contained in second proviso to sub-section (5) of Section 9A of the Act
that Notification dated January 23, 2014 was issued extending the validity
by another year, pending outcome of the sunset review.
6. At th is juncture, we shall reproduce relevant texts ofNotification B
dated December 31, 2013 vide which sunset review was initiated, as
well as Notification dated January 23, 2014 vide which earlier Notification
dated January 02, 2009 was amended by extending its validity by anrither
year:
Notification dated December 31, 2013 c
"To be published in Part-I Section-I of the Gazette of India
Extraordinary
F NO 15/29/2013-DGAD
Government oflndia
Department of Commerce & Industry D
(Directorate General of Anti-Dumping & Allied Duties)
Udyog Bhavan, New Delhi - 110011
Dated the 31" December, 2013
NOTIFICATION E
INITIATION
Subject: Sunset Review (SSR) Anti-dumping Investigation
concerning imports of Acrylonitrile Butadiene Rubber (NBR),
originating in or exported from Korea RP.
F
xx xx xx
2 ... Second sunset review investigations were initiated b~' the
Authority on 8tl' October 2007 and the Authority recommended
continued imposition of anti dumping duty on imports of the subject
goods from Korea RP vide Notification No. 15/6/2007 dated 41h G
October 2008 and imposed by Finance vide Custom Notification
No. 0 l/2009-Customs dated 2"d January 2009.
3. Whereas, Mis Omnova Solutions (India) Pvt. Ltd. have now
H
338 SUPREME COURT REPORTS [2017] 4 S.C.R.
A filed a duty substantiated application before the Authority, as the
domestic industry of the subject goods in India, in accordance
with the Act and the Rules, alleging like Iihood of continuation or
recurrence of dumping of the subject gods, originating in or
exported from Korea RP and consequent i1tjury to the domestic
industry and have requested for review, continuation and
B
enhancement of the anti-dumping duties imposed on the imports
of the subject goods, originating in or expmied from Korea RP.
xx xx
Initiation of Sunset Review
c 7. In view of the duly substantiated application filed and in
accordance with Section 9A(5) of the Act, read with Rule 23 of
the Anti-dumping Rules, the Authority hereby initiates a sunset
review investigation to review the need for continued imposition
of anti dumping duties in force in respect of the subject goods,
D originating in or exported from the subject country and to examine
whether the expiry of such duty is likely to lead to continuation or
recurrence of dumping and injury to the domestic industry."
Notification dated Januarv 23, 2014
"Government of India
E Ministry ofFinance
(Depmiment of Revenue)
Notification No. 06/2014-Customs (ADD)
New Delhi, dated the 23'ct January, 2014
G.S.R. 48(E). - Whereas, the designated authority vide notification
F
No. 15/29/2013-DGAD dated the 31" December 2013, published
in the Gazette oflndia, Extraordinary, Part I, Section I, dated the
31" December 2013, has initiated review, in terms of sub-section
(5) of section 9A of the Customs Tariff Act, 1975 (51 of 1975)
read with rule 23 of the Customs Tariff (Identification, Assessment
G and Collection of Anti dumping Duty on Dumped Atiicles and for
Determination oflnjury) Rules, 1995, in the matter of continuation
of anti-dumping duty on 'Acrylonitrile Butadiene Rubber',
originating in, or exported from Korea RP, imposed vide notification
of the Government oflndia in the Ministry ofFinance (Department
of Revenue), No. 0112009-Customs, dated the 2"ct January, 2009,
H
UNION OF INDIA v. M/S. KUMHO PETROCHEMICALS 339
COMPANY LIMITED [A. K. S!KRI, J.]
published in the Gazette oflndia, Extraordinary, Part II, Section 3, A
sub-section (i), vide G.S.R. 5(E), dated the 2"0 January, 2009, and
has requested for extension of anti-dumping duty for a futiher
period of one year, in terms of sub-section (5) of section 9Aofthe
said Customs Tariff Act;
Now, therefore, in exercise of the powers conferred by sub- B
sections ( 1) and (5) of section 9A of the Customs Tariff Act, 1975
(51of1975) read with rule 23 ofthe Customs Tariff(ldentification,
Assessment and Collection of Anti-dumping Duty on Dumped
Articles and for Determination oflnjury) Rules, 1995, the Central
Government hereby makes the following amendment in the C
notification of the Government oflndia in the Ministty ofFinance
(Department of Revenue), No. 01/2009-Customs, dated the 2""
January, 2009, published in the Gazette of India, Extraordinary,
Pati II, Section 3, sub-section (i), vide G.S.R. S(E), dated the 2"d
January, 2009, namely:
In the said notification, after paragraph 2, the following shall be D
inserted, namely:-
"3. Notwithstanding anything contained in paragraph 2, this
notification shall remain in force upto and inclusive of the I"
day of January, 2015, with respect to anti-dumping duty on
.Aerylonitrile Butadiene Rubber originating in, or exported from E
Korea RP, unless revoked earlier."
[F.No. 354/179/2002-TRU (Pt.V)]
(Raj Kumar Digvijay)
Under Secretary to the Government of India"
7. Having noted the material dates, the relevant text of the F
Notifications as well as the statutory scheme provided under Section 9A
of the Ac;t, we may now formulate the two questions that arise for
consideration in these appeals:
(I) After the second sunset review investigation, Notification dated
January 02, 2009 was issued extending the anti-dumping duty G
that was imposed by the initial Notification. This Notification
was valid for a period of five years, i.e. up to January 01,
2014. Though, the third sunset review was initiated and
notification dated 31" December, 2013 was issued which was
before the expiry of five years period, i.e. January 0 I, 2014,
H
340 SUPREME COURT REPORTS [2017] 4 S.C.R.
A according to the writ petitioners, this Notification proposing
the review was made public only on January 06, 2014. As per
them, the date ofreckoning would, therefore, be publication of
the Notification, namely, January 06, 2014, which has to be
taken into consideration for setting into motion the sunset review.
Since it happened after the expiry of original Notification, the
B
exercise of undertaking sunset review was impermissible.
Therefore, the first question is:
Whether the date of December 31, 2013 or it is January 06,
2014, which would be the relevant date for determining initiation
of the sunset review?
c
(2) Amendment Notification dated January 23, 2014, amending
Notification dated January 02, 2009 by allowing it to remain in
force till January 01, 2015 was issued after the original
Notification had expired on January 01, 2014.
D The question is: Whether such a Notification issued after
the expiry date of the original Notification is without any legal
authority and is, therefore, null and void?
8. We now proceed to discuss and answer these questions in
seriatim.
E QUESTION NO.I
9. It is not in dispute that in terms of Section 9A(5) of the Act,
anti-dumping duty is effective for a period not exceeding five years from
the date of its imposition. The Government is empowered to revoke the
duty imposed even before the expiry of five years. In any case, such a
F duty admittedly ceases to be operative after five years from the date of
imposition. At the same time, the Central Government is empowered to
initiate review, called 'sunset review', and to investigate and decide as
to whether it is necessary to continue the levy of anti-dumping duty. As
in the case of original Notification imposing such a duty, the Central
G Government is to satisfy itself that if the period ofanti-dumping duty is
not extended, it is likely to lead to continuation or recurrence of dumping
and injury to the domestic industry. The nature of exercise to be
undertaken by the Central Government in a 'sunset review' is so.mewhat
different from the initial exercise to determine whether anti-dumping
duty is to be levied at all or not. When it comes to review, the focus
H
UNION OF INDIA v. M/S. KUMHO PETROCHEMICALS 34 l
COMPANY LIMITED [A. K. SIKRI, J.]
would be on the issue as to whether withdrawal of anti-dumping duty A
would lead to continuation or recurrence of dumping as well as injury to
the domestic industry. The nature and scope of this exercise is lucidly
explained by this Court in Reliance Industries v. Designated
Aut/10ritie.~ 1 in the following manner:-
"38. We are of the opinion that the nature of the proceedings B
before the DA are quasi-judicial, and it is well settled that a quasi-
judicial decision, or even an administrative decision which has
civil consequences, must be in accordance with the principles of
natural justice, and hence reasons have to be disclosed by the
Authority in that decision vide S.N. Mukherjee v. Union of
India [( l 990) 4 sec 594: I990 sec (Cri) 669: 1991 sec (L&S) c
242: (1991) 16ATC445].
39. We do not agree with the Tribunal that the notification of the
Central Government under Section 9-A is a legislative act. In our
opinion, it is clearly quasi-judicial. The proceedings before the
DA are to determine the !is between the domestic industry on the D
one hand and the importer of foreign goods from the foreign
supplier on the other. The determination of the recommendation
of the DA and the government notification on its basis is subject
to an appeal before CESTAT. This also makes it clear that the
proceedings before the DA are quasi-judicial." E
10. It is a common case that such a sunset review is to initiate
before the expiry of five years period mentioned in the Notification. In
the present case, no doubt, the Notification which is passed initiating
sunset review is dated December 3 1, 2013. Though we have reproduced
relevant portion of this Notification, a perusal of the entire Notification F
reveals that it is a detailed Notification running into almost fifteen pages
wherein history of original investigation concerned the imports of the
product in question from Korea RP and Germany is traced out leading to
the findings that were arrived at by the Authority on the basis of which
anti-dumping duty was imposed on the subject goods vide Notification
dated July 30, 1997. This Notification thereafter deals with the second G
sunset review which led to passing offurther Notification dated January
02, 2009. Thereafter, it mentions that Mis. Omnova Solution (Pvt.)
Limited had filed a duly substantiated application on November l l, 2013
before the Authority alleging likelihood ofcontinuation of recurrence of
1
(2006) 10 sec 368
H
342 SUPREME COURT REPORTS [2017) 4 S.C.R.
A dumping of the subject goods, originating in or exported from Korea RP,
and a consequent injury to the domestic market and requested for another
review. The Notification thereafter deals with the situation of domestic
industry, product in question and satisfaction of the Authority that a case
was made out for initiation of sw1set review investigation to review the
B need for continued imposition of anti-dumping duty in force in respect of
the product in question. The Notification thereof calls upon the interested
parties to submit relevant information in the prescribed form and manner
and furnish their views to the Authority for its consideration. Thus, a
detailed exercise was done taking into account all the relevant factors in
forming the opinion that the sunset review was desirable.
c 11. Though the Notification is dated December 31, 20 l3 and
published on the same date, it was sent for distribution to Kitab Mahal
Book Store on January 06, 2014. The validity would depend upon the
issue as to whether December 31, 2013 is the date of reckoning or it is
only January 06, 2014.
D 12. The High Court has answered the question in favour of the
Government and against the writ petitioners on the ground that Section
9A(5) of the Act and its proviso do not mandate a public notice or a
Gazette Notification as a pre-condition for initiation of sunset review
investigation. The reference to publication by Official Gazette is,
E significantly, in Section 9A( I) which talks of imposition of anti-dumping
duty. ,
13. Questioning the aforesaid approach of the High Court, it was
argued by the learned counsel for the writ petitioners that this view was
contrary to the judgment of this Court in B.K. Srinivasa11 & Or.~. v.
F State of Karnataka & Ors. 2 wherein it was held as under:
"15 .... Where the parent statute is silent, but the subordinate
legislation itself prescribes the manner of publication, such a mode
of publication may be sufficient, if reasonable. If the subordinate
legislation does not prescribe the mode of publication or if the
G subordinate legislation prescribes a plainly unreasonable mode, of
publication, it will take effect only when it is published through the
customarily recognised official channel, namely, the Official
Gazette or some other reasonable mode of publication ... "
'(1987) 1sec658
H
UNION OF INDIA v. MIS. KUMHO PETROCHEMICALS 343
COMPANY LIMITED [A. K. SIKRI, J.]
14. It was argued that the aforesaid principle was reiterated in A
the case of U11ion of India & Ors. v. Ganesh Das Blwjraf. On the
basis of this principle contained in the aforesaid judgments, it was submitted
that even if the provisions of the statute, i.e. Section 9A, were silent
about the publication of the Notification, concerned Rules, namely, the
Customs Tariff (Identification, Assessment and Collection of Anti-
8
dumping Duty on Dumped Articles and for Determination of Injury)
Rules, 1995 were to be followed. It was argued that Rule 6( I) of the
said Rules required issuance of public notice of initiation of investigation
and, thus, having regard to the dicta laid down in the aforesaid judgments
prescribing a mode of publication, publication by 'extraordinarily
recognised Official Gazette', namely the Official Gazette; had to be C
resorted to and since it was made available to public only on January 06,
2014, that date has to be treated as the relevant date when the Notification
came into force, having reg~d to the ratio of judgment in Union of
I11dia v. Param Industries Ltd.4
15. Rule 6 of the aforesaid Rules deals with principles governing D
investigations. Sub-rule ( 11) thereof mentions that whenever Designated
Authority has decided to initiate investigation to determine the existence,
degree and effect of any alleged dumping of any article, it shall issue a
public notice underlying its decision and also mention the particulars/
information which shall be provided in the said public notice. This Rule
thereafter narrates the procedure which is to be followed which inclu!!.«s E
providing opportunity to the industrial user ofthe aiticle under investigation
and the respective consumer organisation in cases where. the article is
commonly sold atthe retail level, to furnish information which is relevant
to the investigation regarding dumping/injury where applicable, and
casualty. The High Court is right that it is in this specific context that the F
said Rule mentions about issuance of public notice underlying its decision
to initiate the investigation. Rule 23 deals with review, i.e. review to see
the need for the continued imposition of anti-dumping duty and inter
a/ia mentions that provisions of Rule 6 shall be mutatis mutandis
applicable in the case of review, meaning thereby the procedure which
is mentioned in Rule 6 shall be followed while undertaking review as G
well. Rule 6, thus, encompasses the principles of natural justice that are
to be applied by the Designated Authority while undettaking the exercise
'(20001 9 sec 461
4
2015 (321) ELT 192 (SC)
H
' .
344 SUPREME COURT REPORTS [2017] 4 S.C.R.
A of investigations qua imposition of dumping duty. Such a purport of
Rule 6 of the rules is recognised in the case of Automotive Tyre
Manufacturers Associatio11 v. De!i'ig11atedAutltori(v & Ors. 5, namely,
the Designated Authority is to conform to the principles ofnaturaljustice,
as can be seen from the following discussion in the said judgment:
B "82. the elaborate procedure prescribed in Rule 6 of 1995 Rules,
which the DA is obliged to adhere to while conducting
investigations, we are convinced that duty to follow the principles
of natural justice is implicit in the exercise of power conferred on
him under the said Rules."
c 16. First proviso to Section 9A(S) of the Act, when read along
with Rule 6 of the Rules, 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. Requirement of Section 9A(S) of the
Act is that the sunset review is to be initiated before the expiry of the
D original period for which the anti-dumping duty prevails. There is no
additional requirement of making it public as well, necessarily before the
said expiry date.
17. We, thus, agree with the conclusion of the High Court that
insofar as requirement of public notice or a Gazette Notification is
E concerned, no such stipulation is made in Section 9A(S) and its proviso.
· On thepther hand, Section 9A(l), which deals with imposition ofanti-
dumping duty, specifically refers to such an imposition by way of
publication in an Official Gazette. Therefore, as far as initiation of review
is concerned, once a decision is taken by the Government on a particular
F date, that would be the relevant date and not the date on which it is
made public.
18. As a result, the appeals filed by the writ petitioners in which
the finding of the High Court on the aforesaid question is challenged, are
dismissed as without any merits.
U QUESTION N0.2
19. Ms. Pinky Anand, learned Additional Solicitor General, arguing
against the aforesaid view taken by the High Court, submitted that once
the Central Government decides to hold sunset review and passes an
' (2011) 2 sec zss
H
UNION OF INDIA v. M/S. KUMHO PETROCHEMICALS 345
COMPANY LIMITED [A. K. SIKRI, J.]
order in this behalf, as was done in the present case vide Notification A
dated March 31, 2013, it shows that the Central Government is, prima
facie, satisfied that there is a justification in the request made by the
indigenous industry for continuation of such a duty. Therefore, till this
exercise is complete, necessary consequence has to be to continue anti-
dumping duty and it is for this reason the second proviso to sub-section B
(5) of Section 9A of the Act is added in the statute. Otherwise, it was
argued, the very purpose of this proviso stands defeated.
20. She submitted thatthe word 'may' occurring in the said proviso
should be read as 'shall'. She also pointed out that in the instant case
itself, after the completion of'sunset review exercise', final notification
was issued on September 04, 2015 signifying the continuation of anti- C
dumping duty was justified. On that basis, it was argued that there
should not be a position of hiatus or vacuum in between, which also
justifies the interpretation that the extension under the second proviso is
automatic. For this purpose, learned Additional Solicitor General referred
to the following discussion in the case of Rishiroop Po(vmers (P) Ltd. D
v. Designated Authority and Additional Secretary 6 :
"3 5. After going through the entire record with the assistance of
the learned counsel for the parties, we are of the opinion that the
contention raised by the appellant is clearly contrary to the facts
on record. The Designated Authority in its findings in the Mid- E
Term Review proceedings has categorically stated that all the
factors have been taken into consideration while determining
continuance of the anti-dumping duty. That apart, at the time of
arguments, we had the advantage of going through the original
records/documents (original/confidential file was produced in the
Court) which had been placed before the Designated Authority, F
which shows that along with the information provided in the pro
forma, necessary information with respect to all the 14 parameters
had been provided by the domestic industry and considered by
the Designated Authority, after due corrections. In view of the
foregoing consideration, the argument of the appellant that all G
relevant factors have not been considered has no factual
foundation.
36. Otherwise also, we are of the opinion that the scope of the
review inquiry by the Designated Authority is limited to the
' (2006) 4 sec 303 H
346 SUPREME COURT REPORTS [2017] 4 S.C.R.
A ~satisfaction as to whether there is justification for continued
imposition of such duty on the information received by it. By its
very nature, the review inquiry would be limited to see as to whether
the conditions which existed at the time of imposition of anti-
dumping duty have altered to such an extent that there is no longer
justification for continued imposition of the duty. The inquiry is
B
limited to the change in the various parameters like the normal
value, export price, dumping margin, fixation ofnon-injury price
and injury to domestic industry. The said inquiry has to be limited
to the information received with respect to change in the various
parameters. The entire purpose of the review inquiry is not to see
c whether there is a need for imposition of anti-dumping duty but to
see whether in the absence of such continuance;,dumping would
increase and the domestic industry suffers."
21. The learned Additional Solicitor General also took the aid of
Section 24 of the General Clauses Act, 1897. Section 24 which deals
D with continuation of orders issued under enactments repealed and re-
enacted and reads as under:
"Section 24 - Continuation of orders, etc., issued under enactments
repealed and re-enacted:
Where any [Central Act] or Regulation, is, after the
E commencement of this Act, repealed and re-enacted with or
without modification, then, unless it is otherwise expressly provided
any [appointment notification,] order, scheme, rule, form or bye-
law, [made or] issued under the repealed Act or Regulation, shall,
so far as it is not inconsistent with the provisions re-enacted,
F continue in force, and be deemed to have been [made or] issued
under the provisions so re-enacted, unless and until it is superseded
by any[ appointment notification,] order, scheme, rule, form or bye-
law, [made or] issued under the provisions so re-enacted [and
when any [Central Act] or Regulation, which, by a notification
under section 5 or SA of the Scheduled Districts Act, 1874, ( 14 of
G I 87 4) or any like law, has been extended to any local area, has, by
a subsequent notification, been withdrawn from the re-extended
to such area or any part thereof, the provisions of such Act or
Regulation shall be deemed to have been repealed and re-enacted
in such area or part within the meaning of this Section].
H
'
UNION OF INDIA v. M/S. KUMHO PETROCHEMICALS 347
COMPANY LIMITED [A. K. SIKRI, J.]
22. She also relied upon the judgment in the case of Fibre Boards A
Private Limited, Bangalore v. Commissioner of Income Tax,
Bangalore 7•
23. Mr. Basava Prabhu Patil, learned senior advocate appearing
for domestic industry manufacturing the product in-questi011', supported
the aforesaid submission of the learned Additional Solicitor General. He B
referred to Rule 23(b) of the Rules which, according to him, mandates
the Designated Authority to initiate sunset review either suo moto or
upon receipt of a duly substantiated petition. Duly substantiated petition
implies that the petition should contain sufficient evidence that the
cessation of anti dumping duty is likely to lead to continuation or recurrence
of dumping and consequent i1tjury to the domestic industry. In a situation C
where the Designated Authority has initiated the sunset review
investigation based on duly substantiated petition, it fol lows that the
Designated Authority is primafacie satisfied that the cessation of anti-
dumping duty is likely to lead to dumping and consequent injury to the
domestic industry. Under these circumstances, it is imperative that the D
anti-dumping duty continues to remain in force pending outcome of the
review and there is no room for exercise of any discretion by the Finance
Ministry under the second proviso to Section 9A( 5). If the second proviso
conferred a discretionary power, it would mean that the Finance Ministry
would have to apply its mind anp not act mechanically. However, neither
the second proviso to Section 9A(S) nor Rule 23(1B) of the Rules set E
out any basis or criteria for the Finance Ministry to exercise its discretion
at the stage of initiation of a sunset review.
24. He also submitted that the second proviso to Section 9A(S)
does not contemplate issuance of a notification or order, as is in the case
of an original levy under Section 9A( I), or extension of duty for a further F
period of 5 years consequent to a review under the first proviso to 9A( 5).
This position is borne out by the Rules, where in respect of duty imposed
consequent to a determination in an original or review investigation, a
notification is mandated. The requirement of a notification is found only
in Rule 18, and Rule 23(3) read with Rule 18, both of which deal with G
duties consequent to an investigation. On the other hand, the second
proviso to Section 9A(S) provides only that "that anti-dumping duty
may continue to remain in force pending the outcome of such a
review for a further period not exceeding one year" and there is no
7
(2015) IOSCC333
H
348 SUPREME COURT REPORTS [2017] 4 S.C.R.
A mention of any affirl)lative act by the Central Government or the need
to issue a notification providing for levy of an anti-dumping duty.
Therefore, the proviso does not require any positive act, on the part of
the Central Government. It is the Designated Authority, which has not
concluded, is sufficient for continuation of the duty for a further period
not exceeding one year.
B
25. On the basis of the aforesaid submissions, plea of Mr. Patil
was that the word 'may' has to be read as 'shall' because of the reason
that if interpreted otherwise, it would frustrate the objective of the
provision, as held in N. Nagendra Rao & Co. v. State ofA.P. 8 (para 3)
as well as Dinkar Anna Patil and Anot/1er v. State of Mallaraslltra
c and Others9 (para 26). Mr. Patil also endeavoured to take sustenance
from the judgement of this Court in Suh-Committee Oil Judicial
Accountability v. Union of India a1td Another10 wherein this Court
held that "the enabling words are construed as compulsory whenever
the object of the power is to effectuate the legal right.. ...... " He
D specifically relied upon the discussion contained in paras 85 and 86 which
are to the following effect:
"35. Use of the word 'may' in clause (5) indicates that for the
'procedure for presentation ofaddress' it is an enabling provision
and in the absence of the law the general procedure or that resolved
E by the House may apply but the' investigation and proof' is to be
governed by the enacted law. The word 'may' in clause (5) is no
impediment to this view.
86. On the other hand, if the word 'shall' was used in place of
'may' in clause (5) it would have indicated that it was incumbent
F on the Parliament to regulate even the procedure for presentation
of an address by enacting such a law leaving it no option even in
the matter of its procedure after the misbehaviour or incapacity
had been investigated and found true:
"Sometimes, the legislature uses the word 'may' out of
G deference to the high status of the authority on whom the power
and the obligation are intended to be conferred and imposed."
(See: State of UP. v. Jogendra Singh [( 1964) 2 SCR 197)."
8
(1994) 6 SCC205
" (1999) 1 sec 354
10
(1991)4 sec 699
H
UNION OF INDIA v. M/S. KUMHO PETROCHEMICALS 349
COMPANY LIMITED [A. K. SIKRI, J.]
Indeed, when a provision is intended to effectuate a right - here A
it is to effectuate a constitutional protection to the Judges under
A1ticle 124(4)-even a provision as in Article 124(5) which may
otherwise seem merely enabling, becomes mandatory. The
exercise of the powers is rendered obligatory. In Frederic Guilder
Julius v. Right Rev. the Lord Bishop of Oxford; the ReE Thomas B .
Thellusson Carter [(1879-80) SAC 214, 244] Lord Blackburn
said:
" ... The enabling words are constmed as compulsory whenever
the object of the power is to effectuate a legal right."
26. Without prejudice to the aforesaid contention, Mr. Patil also C
argued the matter from another perspective as well. He contended that
even if such a Notification was necessary, there was no requirement
that Notification had to be issued before the expiry of the period specified
in the original notification. According to him, there is no time limit
prescribed in the language of the second proviso to Section 9A(S) to
issue a Notification to extend the anti-dumping duty for a further period D
of one year. In the absence of any prescription that such extension of
anti-dumping duty must be before expiry of existing anti-dumping duty,
the same cannot be imposed. The word "continue" cannot be read to
mean "continue without interruption". The word continue can mean
both continuation with or without interruption and considering that the E
Act specifically permits initiation ofinvestigations prior to expiry of duty,
it follows that the word "continue" under the Act would include
continuation with a break.
27. ln support of this contention, he relied upon the decision ofa
Constitution Bench of this Court in Life Insurance Corporatio11 ofIndia. F
v. Escorts Ltd. u that in the absence of expression such as "prior" or
"previous", it cannot be contended that extension ought to have been
granted before the expiry of the original period. He submitted that when
a statute enacted in the national economic interest comes up for
consideration, the traditional norms of statutory interpretation must yield
to broader notions of national interest and that, therefore, the Court has G
to interpret the statute in tune with the national interest that the statute
sought to sub-serve. Para 63 reads as follows:
11 (1986) 1 sec 264
H
350 SUPREME COURT REPORTS [20 l 7] 4 S.C.R.
·A "63. We are conscious that the word "prior" or "previous" may
be implied if the contextual situation or the object and design of
the legislation demands it, we find no such compelling circumstances
justifying reading any such implication into Section 29(1) of the
Act."
B 28. Building on the aforesaid edifice, the learned counsel proceeded
further to argue that in the instant case, Notification dated January 23,
2014 was in fact issued. According to him, such a Notification is valid
and should be treated as effective from January 02, 2014, or else, in any
case from January 23, 2014 when a Notification was issued.
c 29. Mr. V. Lakshmikumaran, Advocate appearing on the other
side, attempted to justify the order of the High Court on this aspect with
the reasons which the High Court has assigned in support of its conclusion.
His argument was that the High Court was right in holding that second
proviso to Section 9A(S) was only an enabling provision and there could
D not be automatic extension of anti-dumping duty simply because the
'sunset review' exercise was initiated by the Government. He further
submitted thatthe word 'may' cannot and should not be read as 'shall' in
this case. He pointed out that same provision, i.e., Section 9A had used
the words 'may' and 'shall' at different places. Whereas sub-section
(I) contained the expression 'may', sub-section (5) used the expression
E 'shall', while second proviso was enacted with the stipulation 'may'.
Likewise, Rule 23(!B) of the Rules used the expression 'shall'. From
this, argument of Mr. Lakshmikumaran was that Legislature was fully
conscious as to which provision was to be made mandatory and which
provision was directory in nature. He also argued that Section 9A was
added in the Act by way of amendment after the Indian Government
.F became signatory to the agreement for implementation of Article VI of
GATT, popularly known as 'implementation agreement'. It is in the said
implementation agreement, need for review was contemplated in Articles
11.1, l I .2 and 11.3 of the implementation agreement which prov is ions
categorically provided that "the duty may remain in force pending the
G outcome of such a review" which means it was not obligatory that such
a duty has to necessarily remain in force during the period when the
sunset review is to be undertaken. Since, the implementation agreement
uses the expression 'may' for continuation of duty pending the outcome
of sunset review, same expression was used in second proviso to Section
9A(5) of the Act. He also submitted that second proviso uses the language
H
UNION OF INDIA v. M/S. KUMHO PETROCHEMICALS 35 l
COMPANY LIMITED [A. K. SIKRI, J.]
'the anti-dumping duty' may continue to remain in force pending the A
outcome of such a review for a further period not exceeding one year.
Laying stress on the words 'for a further period not exceeding one year',
he argued that it was not necessary that the duty has to be extended for
a full period of one year and such a period can be shorter one as well,
i.e., less than a year. This would itself suggest that a Notification is
B
mandated to prescribe the actual period which, in no case, can be more
than one year. He also put emphasis on the word 'continue' in the
aforesaid expression to argue that it would mean that there should be no
discontinuance. Predicated on this, submission of Mr. Lakshmikumaran
was that once the period prescribed by the original Notification expires,
the right to exercise power under second proviso also comes to an end C
inasmuch as any notification issued after the expiry, and with a gap,
would not be a case of anti-dumping duty 'continues to remain in force'.
The learned counsel referred to two judgments in support of his arguments,
viz. (i) Babu Varghese v. Bar Council of Kera/a 11 and Hariva11slt Lal
Meltra v. State of Maltarashtra 13 •
D
30. From the scheme of Section 9A of the Act, it becomes clear
that though the Notification for anti-dumping duty is valid for a maximum
period of five years, the said period can be extended further with the
issuance of fresh notification. For this purpose, it is necessary to initiate
the review exercise before the expiry of the original notification, which
review is commonly known as 'sunset review'. There may be situations E
where the sunset review is undertaken but the review exercise is not
complete before the expiry of the period of original notification. It is
because of the reason that the exercise of sunset review also demands
complete procedure to be followed, in consonance with the principles of
natural justice that was followed while imposing the anti-dumping duty F
in the first instance. To put it otherwise, this exercise· contemplates
hearingthe views ofall stakeholders by giving them adequate opportunity
in this behalf and thereafter arriving at a conclusion that the continuation
of the anti-dumping duty is justified, otherwise injury to the domestic
industry is likely to continue or reoccur, ifthe said anti-dumping duty is
removed or varied. Since this exercise is likely to take some time and G
may go beyond the period stipulated in the original notification imposing
anti-dumping duty, in order to ensure that there is no vacuum in the
interregnum, second proviso to sub-section (5) of Section 9A of the Act
12
(1999) 3 sec 422
1
' (197 I J 2 sec 54
H
352 SUPREME COURT REPORTS [2017] 4 S.C.R.
A empowers the Central Government to continue the anti-dumping duty
for a further period not exceeding one year, pending the outcome of
such a review. The question, however, is as to whether this extension to
fill the void that may be created during the pendency of the sunset review
is exercised is automatic, once the decision is taken to have sunset review
B of the anti-dumping duty or the continuation of such an anti-dumping
duty has to be by a proper notification. As noted above, the High Court
has held that second proviso is only an enabling provision and, therefore,
power vested in the Central Government under the said proviso has to
be specifically exercised, without which the anti-dumping duty cannot
continue to remain in force with the lapse of original notification.
c 31. After giving due consideration to the arguments advanced by
the learned counsel for the parties, we are inclined to agree with the
High Court that proviso to sub-section (5) of Section 9A of the Act is an
enabling provision. That is very clear from the language of the said
provision itself. Sub-section (5) of Section 9A gives maximum life of
D five years to the imposition of anti-dumping duty by issuing a particular
notification. Of course, this can be extended by issuing fresh notification.
However, the words 'unless revoked earlier' in sub-section (5) clearly
indicate that the period of five years can be curtailed by revoking the
imposition of anti-dumping duty earlier. Of course, provision for review
is there, as mentioned above, and the Central Government may extend
E the period if after undertaking the review it forms· an opinion that
continuation of such an anti-dumping duty is necessary in public interest.
When such a notification is issued after review, period of imposition gets
extended by another five years. That is the effect of first proviso to
sub-section (5) of Section 9A. However, what we intend to emphasise
F here is that even as per sub-section (5) it is not necessary that in all
cases anti-dumping duty shall be imposed for a full period of five years
as it can be revoked earlier. Likewise, when a review is initiated but
final conclusion is not arrived at and the period of five years stipulated in
the original notification expires in the meantime, as per second proviso
'the anti-dumping duty may continue to remain in force'. However, it
G cannot be said that the duty would automatically get continued after the
expiry of five years simply because review exercise is initiated before
the expiry of the aforesaid period. It cannot be denied, which was not
even disputed before us, that issuance of a notification is necessary for
extending the perio? of anti-dumping duty. Reason is simple. There no
H
UNION OF INDIA v. J/s.
KUMHO PETROCHEMICALS 353
COMPANY LIMITED [A. K. SIKRI, J.]
duty or tax can be imposed without the authority of' law'. Here, such a A
law has to be in the form of an appropriate notification and in the absence
thereof the duty, which is in the form of a tax, cannot be extracted as,
otherwise, it would violate the provisions ofArticle 265 of the Constitution
of India. As a fortiorari, it becomes apparent that the Government is to
exercise its power to issue a requisite notification. In this hue, the B
expression 'may' in the second proviso to sub-section (5) has to be read
as enabling power which gives discretion to the Central Government to
determine as to whether to exercise such a power or not. It, thus,
becomes an enabling provision.
32. We are conscious of the fact that once sunset review is
initiated, such initiation takes place only after a substantiated application/ c
request is filed by the indigenous industry which is examined and a prima
facie view is formed by the Central Government to the effect that such
a review is necessitated as withdrawal of anti-dumping duty or cessation
thereof may be prejudicial to the indigenous industry. Once such an
opinion is formed and the sunset review is initiated, in all likelihood the D
Central Government would make use of second proviso and issue
notification for continuing the said anti-dumping duty. At the same time,
it cannot be said that without any overt act on the pait of the Central
Government, there is an automatic continuation. The learned counsel
for respondent rightfully pointed out that the legislature has consciously
used the expression 'may' and 'shall' at different places in the same E
Section, i.e., Section 9A of the Act. In such a scenario, it has to be
presumed that different expressions were consciously chosen by the
Legislature to be used, and it clearly understood the implications thereof,
therefore, when the word 'may' is used in the same Section in
contradistinction to the word '.shall' at other places in that very Section, F
it is difficult to interpret the word 'may' as 'shall'. Therefore, it is difficult
to read the word 'may' as 'shall'. Our conclusion gets strengthened
when we keep in mind following additional factors:
33. The anti-dumping duty may continue, pending the outcome of
the review, for a further period not exceeding one year. Thus, maximum G
period of one year is prescribed for this purpose which implies that the
period can be lesser as well. The Government is, thus, to necessarily
form an opinion as to for how much period it wants to continue the anti-
dumping duty pending outcome of such a review. Moreover, since the
maximum period is one year, if the review exercise is not completed
H
354 SUPREME COURT REPORTS [2017] 4 S.C.R.
A within one year, the effect of that would be that after the lapse of one
year there would not be any anti-dumping duty even if the review is
pending. In that eventuality, it is only after the review exercise is complete
and the Central Government forms the opinion that the cessation of
such a duty is likely to lead to continuation or recurrence of dumping and
injury, it would issue a notification extending the period of imposition of
B
duty. Therefore, there may be a situation where everi when the power
is exercised under second proviso and duty period extended by full one
year, the review exercise could not be completed within that period. ln
that situation, vacuum shall still be created in the interregnum beyond
the period of one year and till the review exercise is complete and fresh
c notification is issued. This situation belies the argument that extension
under second proviso is to be treated as automatic to avoid the hiatus or
vacuum in between.
34. Judgment in the case of Risltiroop Polymers (P) Ltd. has no
application to the issue whi.ch we are dealing with, namely, interpretation
D of second proviso to sub-section (5) of Section 9A. The said judgment
only deals with the nature of review exercise that has to be undertaken
and mentions that the entire purpose for the review investigation is not
to see whether there is a need for imposition of anti-dumping duty but to
see whether in the absence of such continuance, dumping would increase
and the domestic industry suffers. In fact, even in the instant case,
E review exercise was completed much after the expiry of one year from
the date when the earlier notification, on completion of five years term,
came to an end. Likewise, the reliance on Section 24 of the General
Clauses Act, 1897 is also of no consequence. This provision concerns
with the orders, etc. which have already been issued under some
F enactments and in the meantime those enactments are repealed or re-
enacted. In those situations, Section 24 of the General Clauses Act
provides that such orders and regulations issued under the old Act would
remain in force so far as they are not inconsistent with the provisions of
the re-enacted Act. Such a provision again has no relevance with the
issue which we are dealing with. Since judgment in the case of Fibre
G Boards Private Limited, Bangalore concerns with the interpretation
of Section 24 of the General Clauses Act, that also would be of no help.
35. With this, we advert to the second facet of the argument,
namely whether it was permissible for the Central Government to issue
Notification dated January 23, 2014 thereby extending the va:idity of
H
UNION OF INDIA v. M/S. KUMHO PETROCHEMICALS 355
COMPANY LIMITED [A. K. SIKRI, J.]
duty by one year, i.e. after the period of earlier Notification came to an A
end on January OJ, 2014? If so, whether this Notification would take
effect from January 0 I, 2014 or January 23, 2014?
36. As noticed above, the High Court has held that once the earlier
Notification by which anti-dumping duty was extended by five years,
i.e. up to January 0 l, 20 14, expired, the Central Government was not B
empowered to issue any Notification after the said date, namely, on
January 23, 2014, inasmuch as there was no Notification in existence.
the period whereof could be extended. The High Court, in the process,
has also held that the Notification extending anti-dumping duty by five
years, i.e. up to January 0 l, 2014 was in the nature of temporary legislation
and validity thereof could be extended, in exercise of powers contained C
in second proviso to sub-section (5) of Section 9A of the Act only before
January 01, 2014.
37. We do not find any infirmity in the aforesaid approach of the
High Court in interpreting the second proviso to Section 9A(5) of the
Act. The High Court has rightly interpreted the aforesaid provision in D
the light of Article 11.1, 11.2 and 11.3 of. the Agreement for
Implementation and Article VI of the GATT, commonly known as
'Implementation Agreement'. These clauses read as under:
"11.1 An anti-dumping duty shall remain in force only as long as
and to the extent necessary to counteract dumping which is causing E
injury.
11.2 The authorities shall review the need for the continued
imposition of the duty, where warranted, on their own initiative or,
provided that a reasonable period of time has elapsed since the
imposition of the definitive anti-dumping duty, upon request by F
any interested party which submits positive information
substantiating the need for a review. Interested parties shall have
the right to request the authorities to examine whether the
continued imposition of the duty is necessary to offset dumping
whether the injmy would be likely to continue or recur ifthe duty G
were removed or varied, or both. If, as a result of the review
under this paragraph, the authorities determine that the anti-
dumping duty is no longer warranted, it shall be terminated
immediately.
11.3 Notwithstanding the provisions of paragraphs I and 2, any H
356 SUPREME COURT REPORTS [2017] 4 S.C.R.
A definite anti-dumping duty shall be terminated on a date not later
than five years from its imposition (or from the date of the most
recent review under paragraph 2 if that review has covered both
dumping and injury, or under this paragraph), unless the authorities
determine, in a review initiated before that date on their own initiate
or upon a duly substantiated request made by or on behalf of the
B
domestic industry within a reasonable period of time prior to that
date, that the expiry of the duty would be likely to lead to
continuation of recurrence of duping and injury. The duty may
remain in force pending the outcome of such a review."
38. Obviously, sub-section (5) of Section 9A is in tune with the
c aforesaid Articles of Implementation Agreement and is to be interpreted
in that hue.
39. India is a signatory to the Marrakesh Agreement establishing
the World Trade Organization in 1994. Pursuant to this, it has implemented
the Agreement on Implementation of Article VJ of the GATT 1994
D referred to as the Anti-dumping Agreement (ADA), which is one of the
Agreements that forms part of the WTO treaty. In terms of Article 18.4
of the ADA, each Member country is required to ensure the conformity
of its laws, regulations and administrative procedures with the provisions
of the ADA. As a consequence, Sections 9A, Section 9AA, Section·9B
E and Section 9C of the Act were enacted.
40. Two things which follow from the reading of the Section 9A(S)
of the Act are that not only the continuation of duty is not automatic,
such a duty during the period of review has to be imposed before the
expiry of the period of five years, which is the life of the Notification
F imposing anti-dumping duty. Even otherwise, Notification dated January
23, 2014 amends the earlier Notification dated January 02, 2009, which
is clear from its language, and has been reproduced above. However,
when Notification dated January 02, 2009 itself had lapsed on the expi1y
of five years, i.e. on January 01, 2014, and was not in existence on
January 23, 2014 question of amending a non-existing Notification does
G not arise at all. As a sequitur, amendment was to be carried out during
the lifetime of the Notification dated January 02, 2009. The High Court,
thus, rightly remarked that Notification dated January 02, 2009 was in
the nature of temporary legislation and could not be amended after it
lapsed.
H
UNION OF INDIA v. M/S. KUMHO PETROCHEMICALS 357
COMPANY LIMITED [A. K. SIKRI, J.]
41. For this reason, plea taken by the Union of India and the A
domestic industry in their appeals has to fail. Consequently, their appeals
are also dismissed.
Nidhi Jain Appeals dismissed.
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