3

2. The records reveal that the appellant, as a domestic industry, had filed an application before the designated authority under the provisions of the Customs Tariff Act 1975⁴

and the Customs Tariff (Identification, Assessment and Collection of Anti-Dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995⁵

for imposition of anti-dumping duty on imports of the subject goods from the subject countries, alleging dumping and consequent injury. The designated authority issued a public notice dated 01.10.2019 for initiation of anti-dumping investigation under rule 6(1) to determine the existence, degree and effect of alleged dumping and to consider recommendation for imposition of anti-dumping duty, if any. The period of investigation for the purpose of anti-dumping duty was from 01.04.2018 to 30.06.2019 and the injury investigation period was from April 2015 to March 2018. Oral hearings were conducted and the parties that attended the oral hearings were advised to file written submissions on the views expressed orally, followed by rejoinders, if any. As contemplated under rule 16, the essential facts of the investigation were disclosed to the known interested parties by a disclosure statement dated 17.08.2020. The interested parties, including the appellant, filed comments to the disclosure statement. Thereafter, the designated authority notified the final findings on

25.08.2020.

3. The conclusion drawn by the designated authority in the final findings are as follows:

"M. Conclusion

93. Having regard to the contentions raised, information provided, and submissions made by the interested parties

4. the Tariff Act

5. the 1995 Anti-Dumping Rules

4

and facts available before the Authority as recorded in these final findings and on the basis of the above analysis, the Authority concludes that:

I. The product under consideration has been exported to India from the subject countries below its normal value, resulting in dumping.

II. The domestic industry has suffered material injury due to dumping of the product under consideration from the subject countries.

III. The material injury has been caused by the dumped imports from the subject countries."

4. Accordingly, the following recommendation was made by the designated authority:

"N. Recommendation

94. The Authority notes that the investigation was initiated and notified to all interested parties and adequate opportunity was given to the exporters, importers and other interested parties to provide positive information on the aspect of dumping, injury and causal link. Having initiated and conducted the investigation into dumping, injury and causal link in terms of the provisions laid down under the Rules and having established positive dumping margin as well as material injury to the domestic industry caused by such dumped imports, the Authority is of the view that imposition of definitive anti-dumping duty is required to offset dumping and injury. The Authority, therefore, considers it necessary to recommend imposition of anti-dumping duty on imports of subject goods from the subject countries in the form and manner described hereunder.

95. In terms of provision contained in Rule 4(d) & 17(i)(b) of the Rules, the Authority recommends imposition of anti-dumping duty equal to the lesser of margin of dumping and the margin of injury, so as to remove the injury to the domestic industry. Accordingly, definitive anti-dumping duty equal to the amount mentioned in Column 7 of the duty table below is recommended to be imposed for five (5) years from the dated of the Notification to be issued by the Central Government, on all imports of subject goods originating in or exported from subject countries."

(emphasis supplied)

5. Rule 18 provides that the Central Government may, within three months of the date of publication of final findings by the designated authority, impose by notification in the Official Gazette, upon importation into India of the article covered by the final findings, anti-

5

dumping duty not exceeding the margin as determined by the designated authority.

6. An Office Memorandum dated 14.12.2020 was then issued by the Government of India to convey its decision not to impose anti- dumping duty and it is reproduced below:

"F.No. 354/122/2020-TRU

Government of India Ministry of Finance Department of Revenue Tax Research Unit Room No. 156, North Block, New Delhi, the 14^th December, 2020 Office Memorandum

Subject: Final Findings in anti-dumping investigation concerning imports of "Choline Chloride in all forms" originating in or exported from China PR, Malaysia and Vietnam.

The undersigned has been directed refer to the Final Findings Notification No. 6/18/2019-DGTR dated 25.08.2020 and to state that it has been decided by the Central Government not to impose anti-dumping duty on imports of "Choline Chloride in all forms", classified under customs tariff heading 2309 90 10, 2309 90 20, 2309 90 90 and 2923 10 00 and originating in or exported from China PR, Malaysia and Vietnam."

(emphasis supplied)

7. Shri Basava Prabhu Patil, learned senior counsel assisted by Ms. Reena Khair and Shri Rajesh Sharma made the following submissions:

(i) The designated authority, after following the procedure prescribed in the rules, made a recommendation in the final findings dated 25.08.2020 to the Central Government for imposition of anti-dumping duty, but the Central Government in an arbitrary manner and by a non reasoned order declined to impose anti-dumping duty;

(ii) The powers exercised by the Central Government are quasi-judicial powers, as was observed by the Supreme

6

Court in Reliance Industries Ltd. vs. Designated Authority ⁶

and it is well-settled that a quasi-judicial decision which has civil consequences, must disclose reasons. However, the Central Government, without even providing any opportunity of hearing to the domestic industry, refused to impose anti-dumping duty and the order also does not give reasons as to why the Central Government refused to impose anti-dumping duty. In support of this contention, reliance has been placed on the decisions of the Supreme Court in Shri Sitaram Sugar Company Limited and Another vs. Union of India and Others ⁷

, S.N. Mukherjee vs. Union of India ⁸

and Indian Railway Construction Co. Ltd. vs. Ajay Kumar⁹; and

(iii) While exercising discretion under rule 18, the Central Government has necessarily to take into consideration the purpose for which anti-dumping duty is imposed, the provisions of the Tariff Act and the 1995 Anti-Dumping Rules as also the fact that the designated authority, after undertaking the elaborate procedure contemplated under the rules and after hearing all the interested parties, had made a positive recommendation to the Central Government for imposing anti-dumping duty.

8. Shri Rakesh Kumar, learned authorised representative of the Department appearing for the Central Government, however,

6. 2006 (202) E.L.T. 23 (S.C.)

7. (1990) 3 SCC 223

8. (1990) 4 SCC 594

9. (2003) 4 SCC 579

7

supported the decision taken by the Central Government and made the following submissions:

(i) The present appeal would not be maintainable under section 9C of the Tariff Act;

(ii) It is the discretion of the Central Government under rule 18 to impose or not to impose anti-dumping duty even if the designated authority had made a recommendation to the Central Government for imposition of anti-dumping duty. In support of this contention, reliance has been placed on the decision of the Supreme Court in

Designated Authority vs. Andhra Petrochemicals Limited¹⁰ and the decision of the Gujarat High Court in

Alembic Ltd. vs. Union of India¹¹;

(iii) Superior public interest is a ground to refuse imposition of anti-dumping duty and in this contention, reliance has been placed on the decisions of the Supreme Court in

Sales Tax Officer vs. Shree Durga Oil Mills¹², Kasinka Trading vs. Union of India¹³ and Union of India vs. V.V.F. Ltd.¹⁴; and

(iv) The recommendations made by the designated authority do not create any rights and, therefore, are not binding on the Central Government. In support of this contention, reliance has been placed on the decision of the Delhi High

10. 2020 (373) E.L.T. 740 (S.C.)

11. 2013 (291) E.L.T. 327 (Guj.)

12. 1998 (97) E.L.T. 202 (S.C.)

13. 1994 (74) E.L.T. 782 (S.C.)

14. 2020 (372) E.L.T. 495 (S.C.)

8

Court in Eveready Industries India Ltd. vs. Union of India¹⁵.

9. Learned senior counsel for the appellant, in response to the submissions advanced by learned authorised representative appearing for the Department that the present appeal would not be maintainable under section 9C of the Tariff Act, submitted that since the appeal has been filed against an order of determination regarding the existence, degree and effect of dumping in relation to import of any article, the appeal would be maintainable under section 9C of the Tariff Act. In support of this contention, reliance has been placed on the decision of the Supreme Court in Saurashtra Chemicals Ltd. vs. Union of India¹⁶ and the decision of the Delhi High Court in Jindal Poly Film Ltd. vs. Designated Authority¹⁷.

10. Shri Amit Singh, learned counsel has made submissions on behalf of the designated authority.

11. Respondent no's. 3, 4, 5 and 6 have not put in appearance despite the fact that copies of the appeal were forwarded to them by the appellant as also the office of the Tribunal. By an order dated 6.09.2021, the office was directed to again inform respondent no's. 3, 4, 5 and 6 by email as well as by speed post that the appeal would be listed for hearing on 18.12.2021. The office has reported that speed post was sent to the said respondents on 10.09.2021 and the said respondents were also informed by email on 09.09.2021. However, no one has appeared on behalf of respondent no's 3, 4, 5 and 6.

15. 2019 (367) E.L.T. 53 (Del.)

16. 2000 (118) E.L.T. 305 (S.C.)

17. 2018 (362) E.L.T. 994 (Del.)

9

12. The submissions advanced on behalf of the appellant, the designated authority and the Central Government have been considered.

13. The first issue that arises for consideration is as to whether the present appeal would be maintainable under section 9C of the Tariff Act. It would, therefore, be necessary to reproduce section 9C(1) of the Tariff Act and it is as follows:

"9C. APPEAL

(1) An appeal against the order of determination or review thereof regarding the existence, degree and effect of any subsidy or dumping in relation to import of any article shall lie to the Customs, Excise and Service Tax Appellate Tribunal constituted under section 129 of the Customs Act, 1962 (52 of 1962) (hereinafter referred to as the Appellate Tribunal)."

14. A perusal of the aforesaid section would indicate that an appeal would lie to the Tribunal against the order of determination regarding the existence, degree and effect of any dumping in relation to import of any article. It has, therefore, to be seen whether the decision of the Central Government not to impose anti-dumping duty, as contained in the Office Memorandum dated 14.12.2020, is an order of determination regarding the existence, degree and effect of dumping in relation to import of any article.

15. To examine this, it would be pertinent to refer to the relevant provisions of rules 4, 5 and 6 of the 1995 Anti-Dumping Rules. Rule 4 provides that it shall be the duty of the designated authority to investigate, in accordance with the rules, as to the existence, degree and effect of any alleged dumping in relation to import of any article. Rule 5 provides that the designated authority shall initiate an investigation to determine the existence, degree and effect of any alleged dumping only upon receipt of a written application by or on

10

behalf of the domestic industry. Rule 6 provides that the designated authority shall, after it has decided to initiate investigation to determine the existence, degree and effect of any alleged dumping of any article, issue a public notice notifying its decision.

16. Rule 17 deals with final findings and the relevant portions are reproduced below:

"17. Final findings. -

(1) The designated authority shall, within one year from the date of initiation of an investigation, determine as to whether or not the article under investigation is being dumped in India and submit to the Central Government its final finding -

(a) as to, -

(i) the export price, normal value and the margin of dumping of the said article;

(ii) whether import of the said article into India, in the case of imports from specified countries, causes or threatens material injury to any industry established in India or materially retards the establishment of any industry in India;

(iii) a causal link, where applicable, between the dumped imports and injury;

(iv) whether a retrospective levy is called for and if so, the reasons therefor and date of commencement of such retrospective levy:

(b) Recommending the amount of duty which, if levied, would remove the injury where applicable, to the domestic industry after considering the principles laid down in the Annexure III to rules.

(2) The final finding, if affirmative, shall contain all information on the matter of facts and law and reasons which have led to the conclusion and shall also contain information regarding-

(i) the names of the suppliers, or when this is

impracticable, the supplying countries involved;

(ii) a description of the product which issufficient for customs purposes;

(iii) the margins of dumping established and a full explanation of the reasons for the methodology used in the establishment and comparison of the export price and the normal value;

(iv) Considerations relevant to the injury determination; and

(v) the main reasons leading to the determination."

11

17. Rule 18, as noticed above, provides that the Central Government may, within three months of the date of publication of the final findings by the designated authority under rule 17, impose by notification in the official gazette an anti-dumping duty.

18. It is, therefore, clear that a discretion is vested in the Central Government to either impose anti-dumping duty or not impose anti- dumping duty. In the present case, an Office Memorandum dated 14.12.2020 was issued in connection with the final findings of the designated authority notified on 25.08.2020 and it states that the Central Government has decided not to impose anti-dumping duty on imports of subject good from the subject countries. There is, therefore, no manner of doubt that the Central Government had made a determination regarding the existence, degree and effect of dumping in relation to import of any article. An appeal would clearly lie to the Tribunal under section 9C of the Tariff Act.

19. The aforesaid conclusion finds support from the decision of the Supreme Court in Saurashtra Chemicals. In this case the designated authority had made an affirmative recommendation for imposition of anti-dumping duty. It is against the said recommendation of the designated authority that an appeal was filed before the Tribunal under section 9C of the Tariff Act. The Tribunal held that the appeal was not maintainable. A Special Leave Petition was filed before the Supreme Court against this order of the Tribunal. The Supreme Court held that as the order of the designated authority was purely recommendatory and an appeal lies to the Tribunal against the determination, which determination had yet to be made by the Central Government, there was no error in the order passed by the Tribunal holding that the

12

appeal was not maintainable. The Supreme Court, therefore, dismissed the Special Leave Petition. The order of the Supreme Court is reproduced below:

"We see no reason whatsoever to entertain these special leave petitions. It is perfectly clear now that we have seen the provisions of the Act that the order of the Designated Authority is purely recommendatory. The appeal that lies is against the determination and that determination has to be made by the Central Government. For this reason, we decline to exercise jurisdiction under Article 136 of the Constitution of India and dismiss the special leave petitions."

(emphasis supplied)

20. In Jindal Poly Film, the Delhi High Court examined whether an appeal could be filed before the Tribunal under section 9C of the Tariff Act against the recommendation made by the designated authority not to impose any anti-dumping duty. The Delhi High Court examined the provisions of section 9C of the Tariff Act and observed that it refers to 'order of determination', as to the existence, degree and effect of any alleged dumping in relation to import of any article, which are exactly the areas of investigation and form the essence of the duties to be performed and order to be passed by the designated authority. In the case of negative opinion, the order passed is an 'order of determination' as it is the final order and no further 'determination' is required to be undertaken by the Central Government except a consequential order of withdrawal of provisional duty, if imposed, within 45 days of the final findings of the designated authority in terms of rule 18(4). The Delhi High Court also observed that the right to appeal should not be forfeited or abandoned unless the statute so states and can be inferred on reasonable and practical interpretation. The relevant paragraphs of the judgement of the Delhi High Court are reproduced below:

13

"27. The CT Act uses the expression "Central Government'' and does not use the expression "Designated Authority". The term "Designated Authority" is not defined in the CT Act and not referred to in the Sections to CT Act. The expression

"Designated Authority" is to be found and defined in the Rules. As noticed above, the Designated Authority is a person not below the rank of the Joint Secretary to the Government of India or such other person as Government thinks fit and designated as a "Designated Authority" by notification in the Official Gazette. No doubt, the Rules do postulate and use the expression "Central Government" in contrast and to differentiate Central Government from the Designated Authority, albeit it is clear to us that the Designated Authority is nothing but part and parcel of the Central Government. The term "Designated Authority" has been used in the Rules for clarity in view of the two tier procedure in the form of objective and reasoned recommendation to be followed by further examination and issue of notification in the Gazette, an act of delegated legislation, which is necessary to impose and levy any tax including Anti-dumping duty. Designated Authority has been empowered to investigate as to the existence, degree and effect of any alleged dumping in relation to import of articles and recommend to the Central Government when required the quantum of Anti-dumping duty equal to the margin of the dumping or less, specific date of the commencement and to review continuance of Anti-dumping duty. The Designated Authority so appointed acts for and on behalf of the Central Government. It has been bestowed with the powers vested and conferred on the Central Government under the CT Act. The Designated Authority, when it performs the functions under the CT Act, it is acting for and on behalf of the Central Government and not as an independent and a distinct third party. Designated Authority is no different from the Central Government.

28. If the aforesaid position is clear, then it is not difficult to appreciate and interpret the provisions for appeal under Section 9C, which refers to the "order of determination" as to existence, degree and effect of any alleged dumping in relation to import of an article, which are exactly the areas of investigation and form the essence of the duties performed and the order passed by the Designated Authority. The role of the Designated Authority can, therefore, clearly be connected with the power and role of the Central Government under the main enactment i.e. CT Act read with the mandate of the Rules. In case of negative opinion or termination of proceedings, the order passed is the "order of determination", as it is the final order passed by the Central Government and no further

"determination" is required and necessary, except consequential order of withdrawal of provisional duty if imposed within 45 days of the final findings by the Designated Authority in terms of sub-rule (4) to Rule 18 of the Rules.

29. It is in this context, we would observe that while interpreting a provision conferring right to appeal, we have to read the said provision to effectuate the legislative purpose in a reasonable, practical and liberal manner as was held by the Supreme Court in Commissioner Of Income Tax, A.P v. Ashoka Engineering Co., (1992)

194 ITR 645. Similarly, in Gopi Lal v. CIT, (1967) 65 ITR 477, the Punjab and Haryana High Court has held that statute pertaining to right to appeal should be given a liberal construction since it is remedial and the right to appeal should

14

not be restricted or denied unless such a construction is unavoidable. Thus, the right to appeal conferred should not be forfeited or abandoned unless the statute so states and can be inferred on reasonable and practical interpretation.

xxxxxxxxxxx

36. Section 9C does not state and provide that an appeal is maintainable against customs notification. However, it refers to and states that an appeal would lie against the

"order of determination" regarding existence, degree and effect of dumping. The words "existence, degree and effect of dumping" are significant. The final finding of the Designated Authority in the said aspect can be in positive i.e. when it recommends imposition of Anti-dumping duty or may be in negative when it finds and holds that no Anti-dumping [duty] should be imposed. Upon negative finding by the Designated Authority no further action is contemplated and required by the Central Government. Contention of the petitioner that the "order of determination" would mean notification imposing Anti-dumping [duty] and not a negative final finding of the Designated Authority under Rule 17, which is not recommendatory but the final determination, is erroneous and bad in law. In case of negative determination the finding of the Designated Authority is binding, it gives no discretion to the Central Government. Thereupon, the determination becomes the determinative order in the sense that no Anti-dumping duty can be imposed.

37. Negative finding of the Designated Authority does not require a notification, a legislative act, ergo the said final finding gets stamped and approved by the Statute itself as binding decision of the Central Government.

38. Therefore, in this context of the statutory provisions we would reject the argument of the petitioner that Section 9C postulates an appeal only against "order of determination" in the form of notification imposing Anti- dumping duty and not against the negative final finding of the Designated Authority. To say that in case of negative findings the Designated Authority in its order of determination goes into the question of existence, degree and effect of dumping, yet no appeal would lie, would be incongruous and clearly contradictory.

39. No doubt right to appeal is creature of the Statute as held in Baradakanta Mishra v. Mr. Justice Gatikrushna Misra, Chief Justice of Orissa High Court, (1975) 3 SCC 535 and in D.N Taneja v. Bhajan Lal ., (1988) 3 SCC 26, but in the present case the right to appeal is certainly conferred. We are determining scope and ambit of the right to appeal under Section 9C of the CT Act.

40. The aforesaid reasoning would also take care and negate the argument that the "order of determination" referred to in Section 9C must be interpreted as the determination made by the Central Government on the question of imposition of duty and not the determination or decision of the Designated Authority which has given a negative opinion on imposition of duty. The Designated Authority when it acts and performs functions of the Central Government, is no different and distinct from the Central Government."

15

(emphasis supplied)

21. It is, therefore, clear from the aforesaid discussion and the decisions of the Supreme Court that the present appeal would be maintainable under section 9C of the Tariff Act.

22. The contention advanced on behalf of the appellant regarding the determination made by the Central Government not to impose anti-dumping duty now needs to be examined.

23. The main submission advanced by the learned senior counsel for the appellant is that the determination made by the Central Government, as communicated in the Office Memorandum dated 14.12.2021, deserves to the set aside for the sole reason that it is not only arbitrary and against the principles of natural justice, but the order does not even disclose any reason as to why the Central Government decided to reject the recommendation made by the designated authority for imposition of anti-dumping duty and determine that anti-dumping duty was not required to be imposed.

24. Section 9A(1) of the Tariff Act deals with anti-dumping duty on dumped articles and it is reproduced below:

"9A. ANTI-DUMPING DUTY ON DUMPED ARTICLES

(1) Where any article is exported by an exporter or producer from any country or territory (hereinafter 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, impose an anti -dumping duty not exceeding the margin of dumping in relation to such article."

25. The function performed by the Central Government under section 9A of the Tariff Act is quasi-judicial in nature and not legislative. This is what was observed by the Supreme Court in

Reliance Industries and the observations are as follows:

16

"38. We do not agree with the Tribunal that the notification of the Central Government under Section 9A is a legislative Act. In our opinion, it is clearly quasi-judicial. The proceedings before the DA is to determine the lis between the domestic industry on the 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 the CESTAT. This also makes it clear that the proceedings before the DA are quasi-judicial."

26. Learned authorised representatives appearing for the Department, however, placed reliance upon a decision of the Gujarat High Court in Alembic Ltd., and submitted that the function performed by the Central Government is legislative in nature. A perusal of paragraphs 27 and 28 of the judgment of the High Court leaves no manner of doubt that the issue as to whether the Central Government performs legislative functions or quasi-judicial functions was not decided and only for the purpose of the petition it was accepted that the Central Government exercises quasi-judicial powers.

27. It is, therefore, not possible to accept the contention of the learned authorised representatives appearing for the Central Government that the functions performed by the Central Government under section 9A of the Tariff Act are legislative in nature.

28. A Constitution Bench of the Supreme Court in Shri Sitaram Sugar Mills Ltd. observed that any arbitrary action, whether in the nature of legislative or administrative or quasi-judicial exercise of power, is liable to attract the prohibition of article 14 of the Constitution. The relevant portion of the judgment is reproduced below:

"46. Any arbitrary action, whether in the nature of a legislative or administrative or quasi-judicial exercise of power, is liable to attract the prohibition of Article 14 of the Constitution. As stated in E.P. Royappa v. State of Tamil Nadu & Anr., [1974] 2 SCR 348, "equality and arbitrariness are sworn enemies; one belongs to the rule of law in a republic while the other, to the whim and caprice of an absolute monarch."

Unguided and unrestricted power is affected by the vice of

17

discrimination: Mrs. Maneka Gandhi v. Union of India & Anr., [1978] 1 SCC 248 at 293-294. The principle of equality enshrined in Article 14 must guide every state action, whether it be legislative, executive, or quasi- judicial: Ramana Dayaram 'Shetty v. The International Airport Authority of India & Ors., [1979] 3 SCR 1014 at 1042; Ajay Hasia & Ors. v. Khalid Mujib Sehravardi & Ors.. [1981] 1 SCC 722 and D.S. Nakara & Ors. v. Union of India

47. Power delegated by statute is limited by its terms and subordinate to its objects. The delegate must act in good faith, reasonably, intra vires the power granted, and on relevant consideration of material facts. All his decisions, whether characterised as legislative or administrative or quasi-judicial, must be in harmony with the Constitution and other laws of the land. They must be "reasonably related to the purposes of the enabling legislation". See Leila Mourning v. Family Publications Service. If they are manifestly unjust or oppressive or outrageous or directed to an unauthorised end or do not tend in some degree to the accomplishment of the objects of delegation, courts might well say, "Parliament never intended to give authority to make such rules; they are unreasonable and ultra vires". per Lord Russel of Killowen, C.J. in Kruse v. Johnson.

51. A repository of power acts ultra vires either when he acts in excess of his power in the narrow sense or when he abuses his power by acting in bad faith or for an inadmissible purpose or on irrelevant grounds or without regard to relevant considerations or with gross unreasonableness. See Associated Provincial Picture Houses Ltd. v. Wednes-bury Corporation, [1948] 1 K.B. 223. In the words of Lord Macnaghten in Westminster Corporation v. London and North Western ' Railway¹⁸,:

" ..... It is well settled that a public body invested with statutory powers such as those conferred upon the Corporation must take care not to exceed or abuse its powers. It must keep within the limits of the authority commit- ted to it. It must act in good faith. And it must act reasonably. The last proposition is involved in the second, if not in the first.....".

In The Barium Chemicals Ltd. & Anr. v. The Company Law Board & Ors., [1966] Supp. SCR 311, this Court states:

" ..... Even if (the statutory order) is passed in good faith and with the best of intention to further the purpose of the legislation which confers the powers, since the Authority has to act in accordance with and within the limits of that legislation, its order can also be challenged if it is beyond those limits or is passed on grounds extraneous to the legislation or if there are no grounds at all for passing it or if the grounds are such that no one can reasonably arrive at the opinion or satisfaction requisite under the legislation. In any one of these situations it can well be said that the authority did not honestly form its opinion or

18. 1905 AC 426, 430: 93 LT 143

18

that in forming it, it did not apply its mind to the relevant facts"..

In Renusagar¹⁹, [1988] 4 SCC 59, 104, Mukharji, J., as he then was, states:

"The exercise of power whether legislative or administrative will be set aside if there is manifest error in the exercise of such power or the exercise of the power is manifestly arbitrary. Similarly, if the power has been exercised on a non-consideration or non- application of mind to relevant factors the exercise of power will be regarded as manifestly erroneous. If a power (whether legislative or administrative) is exercised on the basis of facts which do not exist and which are patently erroneous, such exercise of power will stand vitiated".

52. The true position, therefore, is that any act of the repository of power, whether legislative or administrative or quasi-judicial, is open to challenge if it is in conflict with the Constitution or the governing Act or the general principles of the law of the land or it is so arbitrary or unreasonable that no fair minded authority could ever have made it"

(emphasis supplied)

29. Another Constitution Bench of the Supreme Court in S. N. Mukherjee, examined whether there is a necessity to record reasons when the decision is subject to appellate jurisdiction. The Supreme Court observed that the requirement of reasons to be recorded should govern decisions of an authority exercising quasi-judicial functions, irrespective of the fact whether the decision is subject to appeal, revision or judicial review but the extent and nature of reasons would depend on particular facts and circumstances. However, what is necessary is that reasons should be clear and explicit so as indicate that the authority has given due consideration to the points of controversy. The Supreme Court also observed that the need for recording of reasons is greater in a case where the order is passed at the original stage. The appellate or revisional authority need not give

19. (1988) 4 SCC 59: AIR 1988 SC 1737

19

separate reasons if the appellate or revisional authority agrees with the reasons contained in the order under challenge. The relevant paragraphs are reproduced below:

"35. The decisions of this Court referred to above indicate that with regard to the requirement to record reasons the approach of this Court is more in line with that of the American Courts. An important consideration which has weighed with the Court for holding that an administrative authority exercising quasi-judicial functions must record the reasons for its decision, is that such a decision is subject to the appellate jurisdiction of this Court under Article 136 of the Constitution as well as the supervisory jurisdiction of the High Courts under Article 227 of the Constitution and that the reasons, if recorded, would enable this Court or the High Courts to effectively exercise the appellate or supervisory power. But this is not the sole consideration. The other considerations which have also weighed with the Court in taking this view are that the requirement of recording reasons would (i) guarantee consideration by the authority; (ii) introduce clarity in the decisions; and (iii) minimise chances of arbitrariness in decision making. In this regard a distinction has been drawn between ordinary Courts of law and tribunals and authorities exercising judicial functions on the ground that a Judge is trained to look at things objectively uninfluenced by considerations of policy or expediency whereas an executive officer generally looks at things from the standpoint of policy and expediency.

36. Reasons, when recorded by an administrative authority in an order passed by it while exercising quasi- judicial functions, would no doubt facilitate the exercise of its jurisdiction by the appellate or supervisory authority. But the other considerations, referred to above, which have also weighed with this Court in holding that an administrative authority must record reasons for its decision, are of no less significance. These considerations show that the re- cording of reasons by an administrative authority serves a salutary purpose, namely, it excludes chances of arbitrariness and ensures a degree of fairness in the process of decision-making.

The said purpose would apply equally to all decisions and its application cannot be confined to decisions which are subject to appeal, revision or judicial review. In our opinion, therefore, the requirement that reasons be recorded should govern the decisions of an administrative authority exercising quasi-judicial functions irrespective of the fact whether the decision is subject to appeal, revision or judicial review. It may, however, be added that it is not required that the reasons should be as elaborate as in the decision of a Court of law. The extent and nature of the reasons would depend on particular facts and circumstances. What is necessary is that the reasons are clear and explicit so as to indicate that the authority has given due consideration to the points in controversy. The need for recording of reasons is greater in a case where the order is passed at the original stage. The appellate or revisional authority, if it affirms such an order, need not give separate reasons if the appellate or revisional authority agrees with the reasons contained in the order under challenge."

(emphasis supplied)

20

30. In Hindustan Tin Works (P) Ltd. vs. Employees ²⁰

, the Supreme Court made the following observations:

"In the very nature of things there cannot be straightjacket formula forwarding relief of back wages. All relevant consideration will enter the verdict. More or less, it would be a motion addressed to the discretion of the Tribunal. Full back wages would be the normal rule and the party objecting to it must establish the circumstances necessitating departure. At that stage the Tribunal will exercise its discretion keeping in view all the relevant circumstances. But the discretion must be exercised in a judicial and judicious manner. The reason for exercising discretion must be cogent and convincing and must appear on the face of the record. When it is said that something is to be done within the discretion of the authority, that something is to be done according to the rules of reason and justice, according to law and not humour. It is not to be arbitrary, vague and fanciful but legal and regular (see Susannah Sharp v. Wakefleld, (1891) AC 173, 179)."

(emphasis supplied)

31. In Kranti Associates Pvt. Ltd. vs. Masood Ahmed Khan 21 , the Supreme Court, after referring to the earlier decisions that hold that a quasi judicial authority must record reasons in support of its conclusion because reasons assure that the discretion has been exercised by the decision maker on relevant grounds and by disregarding irrelevant considerations, also observed that recording of reasons operates as a valid restraint on any possible arbitrary exercise of quasi judicial power. In paragraph 51 of the judgement, the Supreme Court summarised the position of law and the said paragraph is reproduced below:

"51. Summarizing the above discussion, this Court holds:

(a) In India the judicial trend has always been to record reasons, even in administrative decisions, if such decisions affect anyone prejudicially.

(b) A quasi-judicial authority must record reasons in support of its conclusions.

(c) Insistence on recording of reasons is meant to serve the wider principle of justice that justice must not only be done it must also appear to be done as well.

20. (1979) 2 SCC 80: 1979 SCC (L&S) 53

21. 2011 (273) ELT 345 (SC)

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(d) Recording of reasons also operates as a valid restraint on any possible arbitrary exercise of judicial and quasi-judicial or even administrative power.

(e) Reasons reassure that discretion has been exercised by the decision maker on relevant grounds and by disregarding extraneous considerations.

(f) Reasons have virtually become as indispensable a component of a decision making process as observing principles of natural justice by judicial, quasi-judicial and even by administrative bodies.

(g) Reasons facilitate the process of judicial review by superior Courts.

(h) The ongoing judicial trend in all countries committed to rule of law and constitutional governance is in favour of reasoned decisions based on relevant facts. This is virtually the Life blood of judicial decision making justifying the principle that reason is the soul of justice.

(i) Judicial or even quasi-judicial opinions these days can be as different as the judges and authorities who deliver them. All these decisions serve one common purpose which is to demonstrate by reason that the relevant factors have been objectively considered. This is important for sustaining the litigants" faith in the justice delivery system.

(j) Insistence on reason is a requirement for both judicial accountability and transparency.

(k) If a Judge or a quasi-judicial authority is not candid enough about his/her decision making process then it is impossible to know whether the person deciding is faithful to the doctrine of precedent or to principles of incrementalism.

(l) Reasons in support of decisions must be cogent, clear and succinct. A pretence of reasons or „rubber-stamp reasons"

is not to be equated with a valid decision making process.

(m) It cannot be doubted that transparency is the sine qua non of restraint on abuse of judicial powers. Transparency in decision making not only makes the judges and decision makers less prone to errors but also makes them subject to broader scrutiny. (See David Shapiro in Defence of Judicial Candor (1987) 100 Harward Law Review 731-737).

(n) Since the requirement to record reasons emanates from the broad doctrine of fairness in decision making, the said requirement is now virtually a component of human rights and was considered part of Strasbourg Jurisprudence. See (1994) 19 EHRR 553, at 562 para 29 and Anya v. University of Oxford, 2001 EWCA Civ 405, wherein the Court referred to Article 6 of European Convention of Human Rights which requires, "adequate and intelligent reasons must be given for judicial decisions".

(o) In all common law jurisdictions judgments play a vital role in setting up precedents for the future. Therefore, for development of law, requirement of giving reasons for the decision is of the essence and is virtually a part of "Due Process".

32. What transpires from the aforesaid decisions of the Supreme Court is that:-

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(i) Requirement to record reasons should govern decisions of an authority exercising quasi-judicial functions, though the extent and nature of the reasons would depend on the particular facts and circumstances;

(ii) Reasons should be clear and explicit so as to indicate that the authority has given due consideration to the points of controversy. Discretion, when vested in an authority, has to be excised in a judicious manner and the reasons for exercising discretion must be cogent and convincing and must appear on the face of the record. Discretion must also be exercised in accordance with the rules of reason and justice and should not be arbitrary, vague and fanciful;

(iii) The principle of equality enshrined in article 14 of the Constitution must guide every State action while exercising quasi-judicial powers;

(iv) The power, if exercised on non consideration or non application of mind to relevant factors, will be regarded as erroneous exercise of power; and

(v) An authority has to act in accordance with and within the limits of the legislation with confers power on the authority to act.

33. Anti-dumping duty is imposed by the Central Government under section 9A of the Tariff Act. It provides that when any article is exported by an exporter or producer from any county 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

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Gazette, impose an anti-dumping duty not exceeding the margin of dumping in relation to such article. The margin of dumping, the export price and the normal price have all been defined in section 9A(1) of the Tariff Act. Sub-section (6) of the section 9A of the Tariff Act provides that the margin of dumping has to be ascertained and determined by the Central Government, after such enquiry as may be considered necessary and the Central Government may, by notification in the official gazette, make rules for the purpose of this section. The Central Government, as noticed above, has framed the 1995 Anti Dumping Rules. The duties of the designated authority and initiation of investigation are contained in rules 4 and 5. The principles governing investigation are contained in rule 6 and it is reproduced below:

"6. Principles governing investigations.-

(1) The designated authority shall, after it has decided to initiate investigation to determine the existence, degree and effect of any alleged dumping of any article, issue a public notice notifying its decision and such public notice shall, inter alia, contain adequate information on the following:-

(i) the name of the exporting country or countries and the article involved;

(ii) the date of initiation of the investigation;

(iii) the basis on which dumping is alleged in the application;

(iv) a summary of the factors on which the allegation of injury is based;

(v) the address to which representations by interested parties should be directed; and

(vi) the time-limits allowed to interested parties for making their views known.

(2) A copy of the public notice shall be forwarded by the designated authority to the known exporters of the article alleged to have been dumped, the Governments of the exporting countries concerned and other interested parties.

(3) The designated authority shall also provide a copy of the application referred to in sub-rule (1) of Rule 5 to -

(i) the known exporters or to the concerned trade association where the number of exporters is large, and

(ii) the governments of the exporting countries:

Provided that the designated authority shall also

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make available a copy of the application to any other interested party who makes a request therefor in writing.

(4) The designated authority may issue a notice calling for any information, in such form as may be specified by it, from the exporters, foreign producers and other interested parties and such information shall be furnished by such persons in writing within thirty days from the date of receipt of the notice or within such extended period as the designated authority may allow on sufficient cause being shown.

Explanation: For the purpose of this sub-rule, the notice calling for information and other documents shall be deemed to have been received one week from the date on which it was sent by the designated authority or transmitted to the appropriate diplomatic representative of the exporting country.

(5) The designated authority shall also provide opportunity to the industrial users of the article under investigation, and to representative consumer organizationsin cases where the article is commonly sold at the retail level, to furnish information which is relevant to the investigation regarding dumping, injury where applicable, and causality.

(6) The designated authority may allow an interested party or its representative to present the information relevant to the investigation orally but such oral information shall be taken into consideration by the designated authority only when it is subsequently reproduced in writing.

(7) The designated authority shall make available the evidence presented to it by one interested party to the other interested parties, participating in the investigation.

(8) In a case where an interested party refuses access to, or otherwise does not provide necessary information within a reasonable period, or significantly impedesthe investigation, the designated authority may record its findings on the basis of the facts available to it and make such recommendations to the Central Government as it deems fit under such circumstances."

34. Rule 10 deals with determination or normal value, export price and margin of dumping and it is reproduced below:

"10. Determination of normal value, export price and margin of dumping-

An article shall be considered as being dumped if it is exported from a country or territory to India at a price less than its normal value and in such circumstances the designated authority shall determine the normal value, export price and the margin of dumping taking into account, inter alia, the principles laid down in Annexure I to these rules."

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35. Rule 11 deals with determination of injury and is reproduced below:

"11. Determination of injury. -

(1) In the case of imports from specified countries, the designated authority shall record a further finding that import of such article into India causes or threatens material injury to any established industry in India or materially retards the establishment of any industry in India.

(2) The designated authority shall determine the injury to domestic industry, threat of injury to domestic industry, material retardation to establishment of domestic industry and a causal link between dumped imports and injury, taking into account all relevant facts, including the volume of dumped imports, their effect on price in the domestic market for like articles and the consequent effect of such imports on domestic producers of such articles and in accordance with the principles set out in Annexure II to these rules.

(3) The designated authority may, in exceptional cases, give a finding as to the existence of injury even where a substantial portion of the domestic industry is not injured, if-

(i) there is a concentration of dumped imports into an isolated market, and

(ii) the dumped articles are causing injury to the producers of all or almost all of the production within such market." 36. Rule 17 deals with final findings and rule 18 deals with levy of duty.

37. Annexure-I to the 1995, Anti-Dumping Rules deals with the principles governing the determination of normal value and export price and margin of dumping. It provides that the designated authority while determining the normal value, export price and margin of dumping shall take into account the principles contained in clauses (1) to (8) of the Annexure.

38. Annexure-II to the said Rules deals with the principles for determination of injury. It provides that the designated authority while determining the injury or threat of material injury to domestic industry or material retardation of the establishment of such an industry, and causal link between dumped imports and such injury, shall inter alia,

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take the principles enumerated from (i) to (vii) of Annexure II under consideration.

39. Annexure-III to the 1995, Anti-Dumping Rules deals with the principles for determination of non-injurious price.

40. It, therefore, clearly transpires that a very elaborate procedure has been prescribed for determining whether anti-dumping duty has to be imposed or not.

41. A perusal of the final findings of the designated authority shows that the designated authority had examined the market economy treatment, normal value, export price and determination of dumping margin after taking into consideration the submissions made by the domestic industry and the other interested parties. It also examined whether injury cost to the domestic industry can be attributed to any factor, other than the dumped imports and whether there was a causal link between dumped imports and the injury to the domestic industry as also the magnitude of injury and injury margin. It is after an analysis of the aforesaid factors that the designated authority arrived at a conclusion that:

I. The product under consideration has been exported to India from the subject countries below its normal value, resulting in dumping.

II. The domestic industry has suffered material injury due to dumping of the product under consideration from the subject countries.

III. The material injury has been caused by the dumped imports from the subject countries.

42. The designated authority, therefore, in such circumstances recommended the imposition of anti-dumping duty.

43. The final findings of the designated authority were communicated to the Central Government. The Office Memorandum

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dated 14.12.2020 mentions, in connection with the final findings dated 25.08.2020, that the Central Government has decided not to impose anti-dumping duty. No reasons have been recorded as to why the Central Government decided not to impose anti-dumping duty. No doubt a discretion vested with the Central Government to either accept or not accept the final findings of the designated authority, but that discretion was required to be exercised in a judicious manner by a reasoned order in accordance with the principles laid down by the Supreme Court in S. N. Mukherjee, Shri Sitaram Sugar Mills Ltd., Hindustan Tin Works and Kranti Associations. Recording of reasons assumes more importance in the present case, because of the fact that the Tariff Act and the 1995, Anti-Dumping Rules under which such a discretion is required to be exercised by the Central Government, themselves provide for a detailed analysis of host of factors for imposition of anti-dumping duty. The designated authority had, after a detailed analysis, arrived at a conclusion that anti- dumping duty was required to be imposed and accordingly made a recommendation to the Central Government. It was, therefore, necessary for the Central Government to have examined all the relevant aspects necessary for deciding whether anti-dumping duty was required to be imposed or not and deal with the findings recorded by the designated authority, if the Central Government was to take a view different from the view expressed in the recommendation made by the designated authority. Recording of reasons, therefore, is a must if the Central Government decides not to follow the recommendation made by the designated authority. It is also necessary for the Central Government to record reasons in such a situation because an appeal

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lies to the Tribunal against the determination made by the Central Government.

44. The submission made on behalf of the respondents that since a discretion is vested with the Central Government to either accept or not accept the recommendation made by the designated authority, it is not necessary for the Central Government to give reasons, in view said decision of the Supreme Court in Andhra Petrochemicals Ltd. and the decision of the Gujarat High Court in Alembic Ltd., cannot be accepted. These two decisions only emphasise that a discretion is vested in the Central Government but do not hold that the Central Government is not required to give reasons, if it decides not to agree with the recommendation made by the designated authority.

45. The respondents also contend that superior public interest can be a ground to refuse imposition of anti-dumping duty. No doubt this factor can be taken into consideration by the Central Government in not recommending imposition of anti-dumping duty, but reasons have to be provided for so holding. The decision of the Central Government contained in the Office Memorandum also does not state that superior public interest is a reason for not imposing anti-dumping duty. It is, therefore, not open to the respondents to take this plea in this appeal. The decisions of the Supreme Court in Shree Durga Oil Mills, Kasinka Trading and V. V. F. Ltd. would, therefore, have no

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designated authority for imposition of anti-dumping duty. The matter would, therefore, have to be remitted to the Central Government to take a fresh decision on the recommendation made by the designated authority.

47. Though rule 18 provides that the Central Government has to take a decision within three months of the date of publication of final findings by the designated authority, but as the matter is being remitted to the Central Government for taking a fresh decision, this limitation would not apply, as was observed by the Tribunal in M/s S.

I. Group India Private Limited vs. Designated Authority, Directorate General of Antidumping and Allied Duties²².

48. The Office Memorandum dated 14.12.2020 is, accordingly, set aside and the matter is remitted to the Central Government to reconsider the recommendation made by the designated authority in the light of the observations made above. The appeal would, therefore, have to allowed and is allowed to the extent indicated above. (Pronounced on 27.10.2021)

(JUSTICE DILIP GUPTA)

PRESIDENT

(MS. SULEKHA BEEVI C.S.)

MEMBER (JUDICIAL)

(P.V. SUBBA RAO)

MEMBER (TECHNICAL)

JB

22. Anti-dumping Appeal No. 50430 of 2019 decided on 21.02.2020