# UNION OF INDIA AND ANOTHER v. MIS. KUMHO PETROCHEMICALS COMPANY LIMITED AND ANOTHER

- **Citation:** [2017] 4 S.C.R. 324
- **Court:** Supreme Court of India
- **Decided:** 2017-06-09
- **Case number:** Civil Appeal Nos. 8309-8310 of 2017
- **Bench:** A. K. Sikri, Ashok Bhushan
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/union-of-india-and-another-v-mis-kumho-petrochemicals-company-limited-and-31971
- **Pages:** 34

## Headnote

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and that the public notice of initiation need not be published in the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 02.01.2009High Court rightly held that Notification dated 02.01.2009 was in
nature of temporary legislation and could not be amended after it
lapsed.
H
Dismissing the appeals, the Court
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 antidumping 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

## Text

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A
B
[2017] 4 S.C.R. 324
UNION OF INDIA AND ANOTHER
v.
MIS. KUMHO PETROCHEMICALS COMPANY LIMITED AND
ANOTHER
(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 02.01.2009High Court rightly held that Notification dated 02.01.2009 was in
nature of temporary legislation and could not be amended after it
lapsed.
H
Dismissing the appeals, the Court
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 antidumping 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
8
duty has to be by a proper notification. [Para 30][351-D-H; 352A-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 antidumping 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
E
F
H
to sub-section (5) of Section 9A. However, even as per subsection (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·
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
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]
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
B
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
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
E
32] [353-C-F]
F
1. 7 The anti-dumping duty may continue, pending the
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
B
c
second proviso and duty period extended by full one year, the
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
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 anticlumping duty by five years, i.e. up to January 01, 2014 was in the
E
F
nature of temporary legislation and validity thereof could be
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
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.
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
: (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
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
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.
Case Law Reference
[2006] 6 Suppl. SCR 1
[1987] 1 SCR 1054
referred to
Para 9
referred to
Para 13
c
D
E
F
G
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, San jay 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 of Acrylonitrile
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
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
petitions holding thatthe orderofcontinuation ofanti-dumping duty, made
after expiry of the duty period, is bad in law. However, another contention
E
F
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
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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
B the second issue about the initiation of anti-dumping duty. This part is
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.
E
F
G
H
3. As mentioned above, after the second sunset review,
Notification dated January 02, 2009 was issued extending the period of
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
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:
"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,
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 of the 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
A
B
c
D
E
F
G
H
SUPREME COURT REPORTS
[2017] 4 S.C.R.
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
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
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,
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.
(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
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
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
UNION OF INDIA v. MIS. KUMHO PETROCHEMICALS
335
COMPANY LIMITED [A. K. SIKRI, J.]
practices dumping and that such dumping would cause injury;
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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
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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
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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
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.
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.
(6) The margin of dumping as referred to in subsection ( l) or subsection (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
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without prejudice to the generality of the foregoing such rules
may provide for the manner in which articles liable for any antidumping 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.
(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:
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
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may be after it is issued, be laid before each House of Parliament.
(8) The provisions of the Customs Act, l 962 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
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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
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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
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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
"To be published in Part-I Section-I of the Gazette of India
Extraordinary
F NO 15/29/2013-DGAD
Government oflndia
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Department of Commerce & Industry
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(Directorate General of Anti-Dumping & Allied Duties)
Udyog Bhavan, New Delhi - 110011
Dated the 31" December, 2013
NOTIFICATION
INITIATION
Subject: Sunset Review (SSR) Anti-dumping Investigation
concerning imports of Acrylonitrile Butadiene Rubber (NBR),
originating in or exported from Korea RP.
xx
xx
xx
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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
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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 I ihood 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
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
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,
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
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Ministry ofFinance
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(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
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
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,
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,
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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 subB
sections ( 1) and (5) of section 9A of the Customs Tariff Act, 1975
(51of1975) read with rule 23 of the 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
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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
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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
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
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:
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(I) After the second sunset review investigation, Notification dated
January 02, 2009 was issued extending the anti-dumping duty
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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,
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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
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?
(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.
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.
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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
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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
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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
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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
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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
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before the DA are quasi-judicial, and it is well settled that a quasijudicial 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: I 990 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
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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."
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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.