Union Of India Ministry Of Finance … vs M/S Kumho Petrochemicals Co. … on 9 June, 2017 – Case Summary
In the case of Union of India Ministry of Finance vs M/S Kumho Petrochemicals Co. on 9 June 2017, the Supreme Court of India was presented with a complex issue involving the imposition of anti-dumping duties. The case revolved around the import of Acrylonitrile Butadiene Rubber (referred to as ‘the product’) from Korea RP and Germany, which was subject to an anti-dumping duty under Section 9A of the Customs Tariff Act, 1975.
Facts of the Case
The case began when the indigenous industry raised a demand, leading to an investigation concerning the import of the product in March 1996. The investigation aimed to levy an anti-dumping duty on the said import. The initial findings led to the publication of a definitive anti-dumping duty on July 17, 1997. This resulted in the issuance of a Notification on July 30, 1997, by the Central Government, imposing an anti-dumping duty on the product under Section 9A of the Customs Tariff Act, 1975.
The anti-dumping duty was operative for a period of five years, after which a sunset review investigation was initiated. This led to the continuation of the anti-dumping duty, resulting in another Notification dated October 10, 2002. This process was repeated in 2007 and 2008, with the anti-dumping duty extended until January 01, 2014.
On December 31, 2013, a third sunset review investigation was initiated. However, the Notification was made available only on January 06, 2014, after the expiry of the original Notification. Consequently, a Notification dated January 23, 2014, was issued, extending the validity of the duty by one year.
Issues Raised
The case raised two primary issues. The first was whether the date of December 31, 2013, or January 06, 2014, should be considered for determining the initiation of the sunset review. The second issue was whether the Notification issued after the expiry date of the original Notification was without any legal authority and therefore null and void.
Court’s Observations
The court observed that the Central Government is empowered to initiate a sunset review and investigate whether it is necessary to continue the levy of anti-dumping duty. The court also noted that the nature of the proceedings before the Designated Authority (DA) are quasi-judicial, and it is well settled that a quasi-judicial decision, or even an administrative decision which has civil consequences, must be in accordance with the principles of natural justice.
The court further observed that the nature of the exercise to be undertaken by the Central Government in a ‘sunset review’ is somewhat different from the initial exercise to determine whether anti-dumping duty is to be levied at all or not. When it comes to review, the focus would be on the issue as to whether withdrawal of anti-dumping duty would lead to continuation or recurrence of dumping as well as injury to the domestic industry.
The court’s judgement in this case provided a detailed analysis of the legal provisions related to anti-dumping duties and the process of sunset review. It also highlighted the importance of adhering to the principles of natural justice in the decision-making process.