Directorate General of Trade Remedies v. Jindal Saw

16. The Court, in effect, allowed the imposition of ADD, till such time the sunset review was carried out by appellant no.1.

17. Based on an application i.e., misc. civil application no. 1 of 2018 in R/special civil application no. 12368 of 2018, moved by the respondent no. 1 (whereby, in substance, a direction was sought vis-à-vis appellant no.1, and the concerned Ministry, to the effect that they comply with the Court’s order),as prayed, a specific order was passed on 08.10.2018 that compliance should be made.

18. It is at this stage, that appellant no.1 approached the Supreme Court, by way of a Special Leave Petition (SLP) i.e., SLP no. 7724-7725/2019. 18.[1] On 15.03.2019, notice was issued, both in the SLP, as well as the interlocutory application accompanying the same.

19. During the pendency of the SLP, appellant no.1 carried out a sunset review and thus concluded, that continuation of ADD was not warranted. 19.[1] This conclusion was arrived at by appellant no.1 via its final findingnotification dated 01.04.2019.

20. The record shows, thatrespondent no.1 filed a fresh action i.e.,R/Special civil application no. 6896/2019 in the Gujarat High Court. 20.[1] The Gujarat High Court via order dated 03.05.2019, in the first instance, extended the validity of the ADD notification by 45 days, commencing from 09.05.2019, and thereafter via judgment dated 20.06.2019 quashed the final finding notification dated 01.04.2019 issued by appellant no.1.Apart from this, the Court also went on to direct extension of the ADD.

21. The Supreme Court, finally,via judgment dated 28.08.2019 in civil appeal no. 6678/2019, set aside the judgment dated 20.06.2019 passed by the Gujarat High Court. However, while doing so, the Supreme Court granted liberty to the respondents to prefer an appeal in the matter.

22. Respondent no.1, taking advantage of the liberty given by the Supreme Court, lodged an appeal with the Tribunal, which, as alluded to hereinabove, was disposed of via the impugned order.

23. Given the fact, that the Supreme Court had quashed the Gujarat High Court judgment, appellant no.1 via a notification dated 28.09.2019 rescinded the notification dated 10.10.2013, whereby the imposition of ADD continued to remain operable.

24. In the first instance, the appeal was listed before the Court on 19.11.2020, when it was adjourned to 07.12.2020, as the concerned bench could not convene. 24.[1] On 07.12.2020, a coordinate bench of this Court, while issuing notice in the appeal,stayed the operation of the impugned order passed by the Tribunal, albeit till the next date of hearing.

25. This order i.e., the order dated 07.12.2020 has continued to remain in operation up until now.

26. The record shows, that objection concerning the maintainability of the appeal, was raised on behalf of the respondents on 15.03.2022 and reiterated on 07.04.2022.

27. It is in this backdrop, that the appellants have approached thisCourt and the issue concerning maintainability of the appeal has come up for consideration. Submissions of the counsel:

28. Mr Ramesh Singh, learned senior counsel, who appears on behalf of the respondents, in support of his preliminary objectionto the maintainability of appeal, advanced the following contentions.

29. A bare perusal of Section 130 of the 1962 Act would show, that any question relating to the determination of the rate of duty or value of goods,is excluded from the purview of the said provision.[1] 29.[1] An appeal concerning the aforesaid aspects will lie only with the Supreme Court, under Section 130E(b) of the 1962 Act.

30. In support of the plea, that the decision taken to not continue with the imposition of ADD was an aspect relating to the rate of duty, reference was made to Section 9A(1), read with clauses (a), (b) and (c),as also sub-section (5) and (6) of the Customs Tariff Act, 1975 [in short “CTA”].[2]

31. Besides the aforesaid provisions, reference was also made to Rule 4 of the 1995 Rules,to demonstrate the duties conferred on the Designated Authority [in short “DA”] i.e., appellant no.1. See section 130(1) of the 1962 Act. See section 9A(1), section 9A(5) and section 9A(6) of the CTA. 31.[1] In particular, emphasis was laid on the factors, that the DA would have to bear in mind, while making a recommendation to the Central Government,concerning the amount of ADD that could be imposed to remove the injury, having regard to the maximum amount fixed by the margin of dumping, the date of commencement, and the need to review continuance of ADD.[3]

32. Our attention was also drawn to Rule17 of the 1995Rules, to demonstrate what all should form part of the final finding arrived at by the DA[4] i.e., appellant no.1

33. Beside this, reference was also made to Rules 18 and 23 of the 1995 Rules, which concern the levy of ADD by the Central Government, and its review by the DA.

34. The argument was, that under Rule 17(1)(b), the DA recommends imposition of ADD, which is then,crystallized by the Central Government under Rule 18, having regard to the fact that ADD cannot exceed the margin of dumping, as determined by the DA under Rule 17.[5]

35. It was thus contended, thata conjoint reading of Rules 17 and 18 of the 1995 Rules would show, that it concerns issues relating to imposition, as well as quantification of ADD.

36. Emphasis was laid on the language of Rule 23(1B),to demonstrate, that the decision concerning the extension ofimposition of ADD is dependent upon a determination being made,on whether the expiry of ADD would lead to continuation or recurrence of dumping or injury to the domestic industry. See Rule 4(d) and Rule 4(e) of the 1995 Rules. See Rule 17(2) of the 1995 Rules. See Rule 18(1) of the 1995 Rules. 36.[1] The contention was, that the impugned order has been passed,bearing in mind the parameters provided in Rule 23(1B), read with Rules 17 and 18 of the 1995 Rules.

37. Furthermore, Mr Ramesh Singh relied upon the impugned order passed by the Tribunal, and the decision of the DA, to demonstrate that they were inextricably connected to the imposition of ADD. 37.[1] According to Mr Ramesh, while the Tribunal,via the impugned order,had remittedthe matter to the DA for re-determination of the quantum of ADD which ought to be imposed, if so necessary, with the condition that till such time a decision is made, the ADD already in force would continue to prevail, the DA, which had taken a converse decision, held that “continuation of anti-dumping is not warranted.”

38. Thus, the submission before us was, that since both the impugned order, as well as the order of DA concerns the determination of the rate of duty (i.e., ADD) no appeal would lie to this Court.

39. It was contended, that a holistic view of the aforementioned provisions of the 1962 Act,1995 Rules and CTAwould show, that the second sunset review carried out by appellant no.1/DA,as to whether cessation of duty was likely to lead to continuation or recurrence of dumping or injury, was an aspect, which concerned the rate of duty and, hence, an appeal, as alluded to above, would lie only with the Supreme Court.

40. It was also contended, that the quantum of ADD can range between “nil” duty andcould go upto the upper limitprescribed under Section 9A(1),the upper limit being the difference between the export price and the normal value, which is nothing but the dumping margin calculated quathe dumped goods.

41. It was stressed, that since the first proviso appendedto sub-section (5) of Section 9Aof the CTA (which adverts to sunset review),provides for the extension of the period of imposition of ADD for a further five years, it shows that review is intrinsically relatable to the imposition of the duty.

42. Sub-section (6) of Section 9A empowers the Central Government to frame rules,which may provide for how articles liable for imposition of ADD is to be identified, and the methodology by which export price, normal value and the margin of dumping of such articles is to be determined for assessment and collection of ADD.

43. In other words, the aforementioned provisions indicate, that sunset review is related to the determination of issues concerning the rate of duty or value of goods for the purposes of assessment.

44. In support of his submissions, Mr Ramesh Singh placed reliance on the judgment of a Division Bench of this Court inCommissioner of Service Tax v. ERNST& Young P. Ltd. (2014) 72 VST 51.

45. On the other hand, Mr Kirtiman Singh,who appears on behalf of the appellants, in rebuttal, contended that it is a settled legal position, that an appeal from the order of the Tribunal would be maintainable under Section 130E of the 1962 Act, as long as it has a “direct and proximate relation/nexus” to the rate of duty. 45.[1] This argument is based on the decisions rendered by the Supreme Court in Navin Chemicals Mfg. and Trading Co. Ltd. v. Collector of Customs (1993) 4SCC 320,Steel Authority India Ltd. v. Designated Authority, Directorate General of Anti-Dumping and Allied Duties &Ors.(2017) 13 SCC 1 and Rishiroop Polymers Pvt. Ltd. &Anr v. Designated Authority, Directorate General of Anti-Dumping and Allied Duties and Ors. (2013) 294 ELT 547

46. Accordingly, as a logical sequitur to the aforesaid submission, it was argued that the judgment rendered in ERNST and Young would have no application.

47. In support of this plea, reliance was placed by Mr Kirtiman Singh on the following judgments:

1. Commissioner of Custom, ICD, New Delhi v. Chandra Prabhu International Ltd. 2014 SCC OnLine Del 1064

2. Jaiswal Neco Ltd. V. Commissioner of Customs, Visakhapatnam (2015) 17 SCC 769 47.[1] Furthermore, Mr Kirtiman Singh submitted, that a perusal of the impugned order would show, that the Tribunal has remitted the matter to appellant no.1 to re-determine the quantum of ADD if found necessary, and in the meanwhile, continue the ADD presently imposed.The instant appeal has been filed to assail this direction of the Tribunal. The proposed question of law, which has been framed in the instant appeal, veers around the issue as to whether or not there is a need to continue to ADD for another five years, having regard to the facts subsisting in the instant case. In other words, was there a likelihood of dumping and injury being caused to the domestic industry, in case ADD was discontinued? Thus, the Tribunal, in the appeal preferred by respondent no.1, was not concerned with the appropriate rate of ADD to be imposed on the subject goods i.e., DI Pipes. 47.[2] Therefore, the findings returned by the Tribunal did not concern the rate of duty, but, whether or not there was a likelihood of recurrence of dumping and injury if goods which originated in or were exported from Chinaentered into the country. Consequently, the preliminary objection raised by the respondents is not sustainable.

48. In rejoinder, Mr Ramesh Singh attempted to distinguish the judgments rendered by the Supreme Court in Naveen Chemicalsand Steel Authority of India. 48.[1] Insofar as the judgment rendered in Naveen Chemicals was concerned, it was contended, that the said judgment was noticed by a Division Bench of this Court in ERNST and Young, as also in a judgment, once again, by a Division Bench of this Court, in Commissioner of Service Tax v. M/s Delhi Gymkhana Club Ltd., 2009 SCC OnLine Del 2629. It was thus contended, that this Court has distinguished the judgment of the Supreme Court rendered in Naveen Chemicals.

49. Likewise, the submission was that the judgment rendered by this Court in Chandra Prabhuand the judgment of the Bombay High Court in Rishiroopwould have no application to the facts, arising in the instant case. 49.[1] Insofar as the judgment in Rishiroop was concerned, it was stated that the said judgment concerned maintainability of a writ petition,in the context of availability of a remedy by way of an appeal to the writ petitioner under Section 9-C of the CTA. This judgment, thus, was not concerned with the issue arising in the instant case.

50. While concluding the rejoinder, Mr Ramesh Singh had also suggested that the appeal is not maintainable, as it is not preferred either by the Principal Commissioner of Customs or the Commissioner of Customs. Analysis and Reasons:

51. Having heard the submissions advanced by both sides and perused the record, to our minds, it becomes incumbent on us tobroadly set out the scope of the provisions relating to ADD, which are found subsumed in the CTA, the 1995 Rules, and the 1962 Act.

52. It is necessary to bear in mind, that ADD is conceptuallydifferent from customs duty, although, amongst other things, the rates at which customs duty is to be levied under the Act are provided in the first and second schedule appended to the CTA.

53. CTA, inter alia, provides for levy of additional duty (equal to excise duty for the time being leviable on like articles produced or manufactured in India), countervailing duty (CVD); safeguard duty and ADD.This is apparent on a bare perusal of Sections 3, 8(B), and 9(A) of the said Act i.e., CTA. 53.[1] Thus, while the 1962 Act is broadly concerned with the imposition of customs duty to generate revenue for the State, the duties embedded in the CTA, to which reference is made hereinabove, are in the nature of “trade remedial measures.” ADDfalls in this genre. These are protective measures (not in the sense of being protectionist) taken by a country, in consonance with the WTO agreements to shieldits domestic industry from the injury that may be causedon account of goods being imported to the country at export prices, which are lower thanthe normal value prevalent in their home country.ADD is imposed to correct trade distortions triggered by the employment of unfair trade practices. Likewise, CVD acts as a counterforce to export subsidies extended by the country from which goods are exported. Similarly, Safeguard Duties are imposed to counter the exponential surge in the import of a particular product into the country.

54. Therefore, if one were to simplistically equate trade remedial measures such as ADD with a duty imposed under the 1962 Act, it would result in missing the wood for the trees.

55. Insofar as anti-dumping is concerned, both CTA and the 1995 Rules provide for a mechanism for initiating an investigation, albeit in the prescribed manner, provided the affected party i.e., the complainant meets the requisite parameters, as provided in the CTA and the attendant rules.

56. Ordinarily, an investigation concerning anti-dumping is triggered to determine the existence, degree and effect of alleged dumping,based upon a written application submitted by or on behalf of the domestic industry.[6] 56.[1] The only exception to this route,is provided in sub-rule (4) of Rule 5.This provision enables the DA to initiate suo motu investigation, based on the See Rule 5(1) of the 1995 Rules. information received by the Commissioner of Customs appointed under the Act or from any other source,upon sufficient evidence being made available about subsistence of circumstances referred to in clause (b) of sub-rule (3) of Rule 5 i.e., that there is dumping, injury (where applicable) and causal link, where applicable, between such dumped imports and alleged injury to justify initiation of the investigation.[7]

57. The applicant, who wishes to trigger an investigation, should meet the threshold provided in clause (a) of sub-rule (3) of Rule 5 and the explanation appended thereto. In other words, the applicants or those supporting the applicants seeking investigation should account for not less than 25% of the total production of the like article by the domestic industry.[8] 57.[1] The explanation to this said sub-rule provides, that the application shall be deemed to have been made by or on behalf of the domestic industry if it is supported by those domestic producers whose collective output constitutes more than 50% of the total production of the like articles produced by that portion of the domestic industry. This applies to those who either support or oppose the application, seeking an investigation into the allegation of dumping.

58. The DA, while investigating the allegations made about dumping is required to cause an enquiry, as indicated hereinabove,vis-a-vis aspects concerning, (i) the existence, degree and effect of the alleged dumping in relation to the imported article[9],(ii) identify the article liable for ADD,10

(iii) submit findings, provisional or otherwise with respect to: normal value, export price and margin of dumping in relation to the article under investigation11, (iv) the injury or threat of injury to an industry established in India or material See Rule 5(3)(b) of the 1995 Rules. See Rule 5(3)(a) of the 1995 Rules. See Rule 4(a) of the 1995 Rules. See Rule 4(b) of the 1995 Rules. See Rule 4(c)(i) of the 1995 Rules. retardation to the establishment of an industry in India consequent upon import of such article from specified countries.12 58.[1] Lastly, the DA is required to recommend to the Central Government, the amount of ADD, equal to the margin of dumping or less, which if levied, would remove the injury to the domestic industry.In considering this aspect, the DA is required to bear in mind, the principles incorporated in Annexure III to the 1995 Rules.13

59. Furthermore, the DA is also required to indicate the date of commencement of imposition of ADD.14

60. Last but not least,the DA is also required to review, in consonance with the provisions of the CTA and 1995 Rules, the need for continuance of ADD.15

61. The DA is obligated to conduct its investigations expeditiously, and in appropriate cases, shall record preliminary findings concerning the aspects referred to above.16 61.[1] Based on the preliminary findings, the Central Government “may” impose a provisional duty, not exceeding the margin of dumping.17

62. The DA is required to submit its final findings,within one year of initiation of the investigation, bearing in mind the aspects referred to in clauses (a)(i) to (iii) of sub-rule (1) of Rule 17, which is broadly reflective of the parameters referred to under Rule 4(a) to (c) of the 1995 Rules.

63. Besides this, in the final findings, the DA can also recommend a levy of ADD albeit retrospectively,and the date from which such levy would be See Rule 4(c)(ii) of the 1995 Rules. See Rule 4(d)(i) of the 1995 Rules. See Rule 4(d)(ii) of the 1995 Rules. See Rule 4(e) of the 1995 Rules; Section 9A(5) of CTA. See Rule 12(1) of the 1995 Rules. See Rule 13 of the 1995 Rules. imposed.In case the DA recommends that ADD should be levied retrospectively, the same is required to be backed with reasons.18

64. The first proviso to Rule 17 confers a discretion onthe Central Government, in special circumstances, to extend the period of investigation by a further period of six months.

65. Clause (b) of sub-rule (1) of Rule 17 mandates,that the DA's recommendation contained in its final findings should advert to the amount of duty, which if levied,would remove the injury where applicable, to the domestic industry.

66. It is based on such recommendation, that the Central Government “may” impose ADD on articles covered by the DA’s final findings,with the limitation that the ADD cannot exceed the margin of dumping determined by the DA under Rule 17.19

67. The review,concerning the imposition of ADD, is provided in sub-section (5) of Section 9A of the CTA, read with Rule 23 of the Rules. The review can be carried out by the DA, either on its own initiative or upon a request being made in that behalf by an interested party under sub-rule (1A) of Rule 23 of the 1995 Rules. 67.[1] Upon such occurrence, the DA may recommend to the Central Government, that ADD may be withdrawn, where it concludes that injury to the domestic industry is not likely to continue or recur if ADD is removed or varied and therefore is not warranted.20 67.[2] Consistent with the aforesaid position, sub-rule (1B) of Rule 23 provides, that ADD can be imposed for a periodnot exceeding five years from the date of its imposition unless the DA comes to a contrary conclusion. See Rule 17(1)(a)(iv) of the 1995 Rules. See Rule 18(1) of the 1995 Rules. See Rule 23 (1A) of the 1995 Rules.

68. Thus, clearly, before a decision is taken concerning whether or not ADD should be imposed, the investigation can be commenced by the DA only if the applicant i.e., the complainant meets the prescribed threshold, as discussed above, provided in the first proviso to Rule 5(3) of the 1995 Rules read with the explanation appended thereto. It is only when the applicant/complainant, which ordinarily represents the domestic industry, meets the prescribed threshold, that an investigation can be triggered by the DA. The exceptions to this are: information received from the Commissioner of Customs appointed under the Act or from other sources concerning the existence of circumstances referred to in Rule 5(3)(b) of the 1995 Rules i.e., there is dumping which is causing injury to the domestic market and there is a causal link between the dumped imports and the alleged injury.21 It is only in such a situation, which is exceptional, that a suo motu investigation can be ordered by the DA.

69. Therefore, the foundation of an investigation, whether based on a complaint preferred by the representations of the domestic industry or information received otherwise, is the subsistence of evidence concerning aspects referred to hereinabove i.e., dumping, injury and the causal link between the dumped goods and the alleged injury.

70. Once the investigation is commenced, the DA is obliged to inquire as to the existence, degree and effect of the alleged dumping in relation to the import of the subject article. The investigation, thus, requires the DA to identify the article and also submit findings, provisional or otherwise, to the Central Government concerning the normal value, export price and margin of dumping concerning the article under investigation, and that, such dumped article is causing injury or threatens injury to an industry established in India or would bring about material retardation in the establishment of such an industry in India. See Rule 5(4) of the 1995 Rules.

71. Therefore, clearly, the nature of the inquiry, even in the first instance, when a decision is to be taken concerning the imposition of ADD, requires the DA to keep all the aforesaid facets in mind, before it can recommend to the Central Government, the amount of ADD which is to be imposed in a given case. It is, to our minds, a decision, which is industry-specific, being a remedial measure, that, the Central Government may take to preserve the interests of the domestic industry. 71.[1] The ADD, being a trade remedial measure, in contradiction to the imposition of customs duty, has leeway with regard to the quantum or the rate at which anti-dumping duty may be imposed by the Central Government. The Central Government, based on the recommendation of the DA, as reflected in its final findings, can decide upon the imposition of the rate or quantum of ADD to be imposed, bearing in mind the cap stipulated under the provisions of CTA and the Rules.22 71.[2] Thus, the ADD that the Central Government can impose, cannot exceed the margin of dumping ascertained by the DA, which is the difference between the export price and the normal value of the dumped goods.

72. At the stage of sunset review, when ADD is already operable, the DA has to conclude,whether the injury is likely to continue or recur if ADD is removed or varied. In other words, the decision to withdraw ADD, while carrying out sunset review, concerns itself with only the impact it would have on the injury suffered by the domestic industry i.e., would it continue or recur.

73. This decision, in our opinion, at least at the stage of review, is not ratecentric. The impact of the decision taken by the DA to recommend (as in this case) withdrawal of ADD, is pivoted on its conclusion, as to whether or not such a decision will result in the possibility of either the injury caused to the domestic industry continuing or recurring. See Section 9A(1) of CTA; Rules 13 and 18(1) of the 1995 Rules.

74. Mr Ramesh Singh’s contentions, to the contrary, do not impress us, as they proceed on, perhaps, an erroneous basis, that ADD is a revenue earning measure, like customs duty.

75. A trade remedial measure such as ADD has several nuances. 75.[1] A good illustration of the same is found in Rule 15, which, inter alia, authorizes the DA to suspend or terminate the investigation, if the exporter of the article in question furnishes an undertaking to revise the prices so that exports of the said article are not made at dumped prices23, or where imports are made from specified countries, the exporter of the concerned goods undertakes to revise the prices, so that the injurious effect of dumping is eliminated.24 No such provision is available qua customs duty in the 1962 Act.

76. Mr Ramesh Singh, in support of his submissions, that the instant appeal wasnot maintainable, placed considerable reliance on the judgement of the Division Bench of this Court in ERNST and Young. This was a judgement, wherein the Court was called upon the rule on the interplay between the provisions of section 35G and 35L of the Central Excise Act, 1944 [in short “CE Act”] and section 83 of the Finance Act, 1994. 76.[1] The provisions of sections 35G and 35L of the CE Act are parimateria with the provisions of section 130 and section 130E(b) of the 1962 Act. Under section 35G of the CE Act, an appeal lies to the High Court from every order passed in appeal by the Appellate Tribunal, if it involves a substantial question law under section 35G(1), 25 save and exceptwhen the order concerns "determination of any question having a relation to the rate of duty of excise or the value of goods of the purposes of assessment”. The appeal, thus, relating to the rate of duty or the value of goods for the purposes of assessment, under section 35L(b) of the CE Act lies to the Supreme Court. It is in this context, that See Rule 15 (1)(i) of the 1995 Rules. See Rule 15 (1)(ii) of the 1995 Rules. See Section 35G(1) of the CE Act. matters concerning exigibility to tax, were required to be dealt with by the Supreme Court, under Section 35L(b) of the CE Act. 76.[2] Before this Court, the appellant i.e., the Commissioner of Service Tax [hereafter referred to as “revenue”] argued to the contrary. The revenue, thus, propounded a narrow construction of the exclusionary part, incorporated in section 35G(1) of the CE Act. The Court, however, repelled this view, and in our view rightly so, as according to it, the issues concerning chargeability and classification are matters, which were related to the rate of duty or value of goods for the purposes of assessment. 76.[3] It was observed, that if service tax could not be levied or imposed under the charging provision, no tax would be payable. Such determination would have a direct or proximate nexus to the rate of tax, which would include nil tax, as the activity itself would not be chargeable to tax. In reaching this conclusion, the Court inter alia examined the ratio of the judgement of the Supreme Court in Naveen Chemicals, which adverted to the direct and proximate test, while ascertaining whether the issue was related to the determination of the rate of duty or value of goods for the purposes of assessment.

77. Besides this, reference was also made to the judgement of another Division Bench of this Court, rendered in Delhi Gymkhana. The Court captured the essence of these judgements in para 17 and 18. For the sake of convenience, the said paragraphs are extracted hereunder: - “17. On reading of the said paragraph, it is lucid and clear that the Supreme Court had stated that questions relating to rate of duty and valuation for the purpose of assessment as defined in the Explanation to sub-section (5) to section 129D of the Customs Act, would include question relating to classification of goods under the tariff, whether or not they are covered by exemption notification; whether value for the purpose of assessment should be enhanced or reduced, etc. It was further observed that statutory definition accords to the meaning given to the expression above. For the purpose of present controversy, we are inclined to ignore and not take into consideration the Explanation to section 129D or sub-section (5) to section 35E. However, in spite of the said position, we do not think that the decision in the case of Delhi Gymkhana Club Ltd., [2009] 25 VST 285 (Delhi) is required to be referred to a larger Bench. Determination of any question relating to rate of tax would necessarily directly and proximately involve the question, whether activity falls within the charging section and service tax is leviable on the said activity. The said determination is integral and an important injunct to the question of rate of tax. In case service tax is not to be levied or imposed and cannot be imposed under the charging section, no tax would be payable. The said determination would be direct or proximate to the issue of rate of tax, which will include nil tax, when no tax is chargeable.

18. If the reasoning given by the Revenue is to be accepted, it will lead to anomaly and substantial confusion. All assessments necessarily have to determine and decide the rate of tax after determining and deciding whether or not activity is chargeable or tax can be levied. Assessments against the assessee would, decide the rate of tax applicable once it is held that the activity is chargeable to tax under the Finance Act. The words “rate of tax” in relation to rate of tax would include the question whether or not the activity is exigible to tax under a particular or specific provision. This will be a reasonable and appropriate interpretation and will not cause or result in confusion or ambiguity regarding the appellate forum. The line between exagibility and rate of tax as propounded can be rather thin and superfluous in the present statutory context.”

78. At the risk of repetition, it needs to be stated that on a close perusal of the issue, which arose for consideration in ERNST and Young, the Court, quite correctly, concluded that issues relating to chargeability and classification would be aspects, which have a direct and proximate nexuswith the determination of issues relating to the rate of tax or value of goods for the purposes of assessment. 78.[1] This is so, as noticed above, if the Court were to conclude, that the activity did not fall within the four corners of the concerned statute, no tax/duty would be leviable. Likewise, if an activity or the subject goods are so classified to fall in an entry, different from the onewhich the revenue propounds, more often than not, it would impact the rate of duty. Such a situation may also arise when one is dealing with an exemption notification. Its impact may lead to a situation, where the assessee may either become the beneficiary of a concessional rate of duty, or even a nil rate of duty.

79. However, this is not the situation that arises for consideration in the instant case. The second sunset review, that the DA has carried out, relates to the ascertainment of whether or not withdrawing ADD would be injurious to the domestic industry i.e., will the withdrawal lead to continuation or recurrence of injury. 79.[1] This exercise, in our opinion does not concern itself directly with the rate of duty, as is contended on behalf of the respondents. The DA is required to conclude, whether the trade remedial measure, which was put in place in the first instance, had worked or not, and whether withdrawal of the measure would lead to the continuation or recurrence of unfair trade practice, (which is what dumping conceptually involves) leading to trade distortion in the domestic market.

80. It may also be helpful to read the decision in ERNST and Youngalong with the earlier decision inDelhi Gymkhana, where the revenue had issued show cause notices, demanding service tax from the respondent club for providing space to its members for setting up mandaps. 80.[1] The Division Bench ruled, once again relying on the judgement in Naveen Chemicals, that the issue was one, which related to chargeability to tax, and thus the rate of duty to be imposed would essentially fall for consideration.

81. As indicated above, one cannot but agree with the ratio of judgements of the coordinate benches in ERNST and Young and Delhi Gymkhana. That said, the ratio of those cases cannot be applied, in our opinion, to the instant case. 81.[1] Before we conclude, there is one last aspect that is required to be dealt with. As noticed above, Mr Ramesh Singh had also raised an objection with regard to the tenability of the appeal on the ground that it was not preferred by the Principal Commissioner or Commissioner of Customs as provided in section 130(2) of the 1962 Act. It is required to be borne in mind, that the provisions of the 1962 Act and the rules and regulations made thereunder become applicable by virtue of sub-section (8) of section 9A of the CTA. A plain reading of sub-section (2) of section 130 of the 1962 Act would demonstrate, that the appeal to this Court could be preferred either by the Principal Commissioner of Customs or Commissioner of Customs or even “other party” aggrieved by any order of the Tribunal. The DA, to our minds, would if nothing else, fall within the category of “other party”. Therefore, this objection is without merit, and hence is rejected. Conclusion:

82. Therefore, for the foregoing reasons, in our view, the preliminary objection taken by the respondents, as regards the maintainability of the instant appeal, cannot be sustained.

83. Accordingly, the Registry is directed to list the appeal, for further directions, on the date fixed in the matter i.e., 25.07.2022.

RAJIV SHAKDHER,J TARA VITASTA GANJU,J JULY25, 2022/aj Click here to check corrigendum, if any