Background
Facts
Decision
Comment
According to section 9A of the Customs Tariff Act 1975 and rule 23 of the Customs Tariff (Identification, Assessment and Collection of Anti-Dumping Duty on Dumped Articles and Determination of Injury) Rules 1955 (the Anti-Dumping Rules), the designated authority shall conduct a sunset review investigation before the expiry of the anti-dumping duty levied on imports of a product (anti-dumping duties are usually levied for a period of five years). The Anti-Dumping Rules also allow the central government to extend anti-dumping duties in force for a period not exceeding one year while the sunset review investigation is ongoing.
In Union of India v Kumho Petrochemicals Company Limited, the Supreme Court dealt with a situation in which the central government had extended an anti-dumping duty, after the expiry of the original notification that had levied the anti-dumping duty. The Supreme Court held that once the original notification levying the anti-dumping duty expires, the central government cannot issue any notification that extends such duties.
This article discusses the February 2022 decision in Principal Commissioner of Customs, Chennai v Huawei Telecommunications (India), in which the High Court dismissed the appeal filed by Huawei based on the Supreme Court decision in Union of India v Kumho Petrochemicals Company Limited.
Anti-dumping duties were imposed on imports of synchronous digital hierarchy transmission equipment (the subject goods), from China and Israel (the subject countries) vide Notification No. 125/2010-Customs, dated 16 December 2010. The duties were imposed for a period of five years, from 8 December 2009 to 7 December 2014.
The Ministry of Finance vide Notification No. 01/2015-Customs (ADD), dated 5 January 2015, extended the duties by one year until 7 December 2015. Thereafter, pursuant to the sunset review investigation concerning anti-dumping duty levied on imports of subject goods from subject countries, the Ministry of Finance vide Notification No. 15/2016-Customs (ADD), dated 26 April 2016, extended the anti-dumping duties until 25 April 2021.
A show-cause notice was issued to Huawei Telecommunications (India) for the period from 1 September 2015 to 7 December 2015. Huawei filed a writ petition against such show-cause notice before the High Court of Madras, in order to quash the notice and preclude the customs authorities from levying any anti-dumping duty beyond 7 December 2014. A bench comprising of a single judge allowed the writ petition. The principal commissioner of customs, Chennai VII, filed an intra-court appeal challenging the order of the single judge before the division bench.
The judge held that notification dated 16 December 2010, imposing antidumping duty from 8 December 2009 until 7 December 2014, had lapsed on 7 December 2014. Therefore, the extension notification dated 5 January 2015, issued after this period had lapsed was not sustainable, and no anti-dumping duty could be demanded from Huawei based on such a notification.
After taking into consideration the issues raised, the division bench decided to dismiss the appeal. The Bench noted that a similar issue had already been decided in Union of India v Kumho Petrochemicals Company Limited, in which the Supreme Court had observed that once the earlier notification (by which the anti-dumping duty was imposed for five years) expired, the government cannot issue any notification after that date.
The High Court dismissed the appeal based on the decision in Union of India v Kumho Petrochemicals Company Limited. Accordingly, once the anti-dumping duty expires, it cannot be revived. However, the government has amended the Anti-Dumping Rules vide Notification No. 10/2021, dated 1 February 2021. As per the amended provision, any review initiated should be completed three months prior to the expiry of the anti-dumping duty. This amended provision shall ensure that any notification issued pursuant to sunset reviews continuing duties are issued before the expiry of the duty in force. Therefore, the judgment would now be applicable only in respect to notifications issued prior to the amendment.
For further information on this topic please contact Salil Arora or Aastha Gupta at TPM Solicitors & Consultants by telephone (+91 11 4989 2200) or email ([email protected] or [email protected]). The TPM Solicitors & Consultants' website can be accessed at www.tpm.in.