On 14 September 2007, anti-dumping duty was imposed on imports of ductile iron pipes. These duties were extended pursuant to a sunset review, up to 9 October 2018. Before the expiry of anti-dumping duty, Electrosteel Castings Limited, Jindal Saw Limited and Srikalahasti Pipes Limited filed an application for initiation of a second sunset review. The Directorate General of Trade Remedies (DGTR) did not initiate the review and held that the domestic industry had failed to establish continued injury or likelihood of recurrence of dumping and injury. The respondents challenged this order before the Gujarat High Court, which directed the DGTR to initiate the sunset review and make a new decision regarding continuation or cessation of anti-dumping duty, in accordance with the law, within six months. Further, the Court extended the imposition of duty until the conclusion of the sunset review.
Following that, the DGTR filed a special leave petition before the Supreme Court against the High Court judgment. Meanwhile, on 1 April 2019, the DGTR completed the sunset review and issued final findings, concluding that continuation of duty was not warranted. The respondents approached the Gujarat High Court regarding the final findings issued by the DGTR. The Gujarat High Court quashed these findings and directed the DGTR to extend the anti-dumping duty.
The Supreme Court – vide judgment dated 28 August 2019 – set aside the judgment of Gujarat High Court and granted the respondents the right to appeal. On appeal before the Customs Excise and Service Tax Appellate Tribunal, the Court set aside the final findings issued by the DGTR and found that continuation of anti-dumping duty was warranted. The DGTR, thereafter, filed an appeal with the Delhi High Court.
The legal question for the High Court was whether the present appeal is maintainable before the High Court and whether an appeal from the order of the Tribunal would be maintainable, as long as it has a "direct and proximate relation/nexus" to the rate of duty.
The Delhi High Court considered only the issue of maintainability. The respondents claimed that the appeal was not maintainable, as it concerns "rate of duty" and its continued imposition; therefore, the appeal was only possible before the Supreme Court under section 130E(b) of the Customs Act 1962. The respondents also contended that whether cessation of duty was likely to lead to continuation or recurrence of dumping or injury was an aspect that had a direct and proximate nexus to the rate of duty and, hence, an appeal would lie only with the Supreme Court, not with the High Court. The respondents further insisted that only the principal commissioner or the commissioner of customs could file an appeal under section 130(2) of the Customs Act, and not the designated authority, namely the DGTR.
The Delhi High Court held that, while the Customs Act 1962 is concerned with the imposition of customs duty to generate revenue for the State, the Customs Tariff Act 1975 covers the imposition of trade remedial measures with the purpose of shielding the domestic industry from injury in unfair trade practices. Therefore, a comparison could not be made between the two. The High Court further held that a sunset review requires determination of whether withdrawing the duty is likely to lead to a continuation or a recurrence of dumping and/or injury to the domestic industry, and whether there is a need for the continuation of duty.
As regards the contention that the designated authority was not allowed to file an appeal, the High Court held that an appeal can be lodged by the principal commissioner of customs or the commissioner of customs or even "other party" aggrieved by any order of the Tribunal. Thus, the "designated authority" (the DGTR) in the present case would fall within the category of "other party".
The High Court held that the issue in this case was not directly concerned with the rate of duty, but only with whether withdrawing that duty was likely to lead to a continuation or a recurrence of dumping and/or injury to the domestic industry.
Therefore, the respondents' preliminary objection (that the appeal was not maintainable) was rejected. The matter will now be considered regarding the remaining issues.
For further information on this topic please contact Aastha Gupta, Salil Arora or Nikhil Sharma at TPM Solicitors & Consultants by telephone(+91 11 4989 2200) or email ([email protected], [email protected] or [email protected]). The TPM Solicitors & Consultants' website can be accessed at www.tpm.in.