The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Ahmedabad bench has held that the denial of refund for anti-dumping duty on past clearances, even after it was determined that no dumping had occurred, violates Article 265 of the Constitution of India.
The ruling came in response to an appeal filed by M/s. Century Plyboards I Ltd., a Kolkata-based company, against the rejection of their refund claim for anti-dumping duty.
The appellant was represented by Shri Manish Jain while the respondent revenue was represented by Shri Anand Kumar.
The case revolved around the imposition of anti-dumping duty on phenol originating from Korea, Taiwan, or the United States of America (USA). The Director General of Anti-Dumping (DGAD), in its final findings, recommended the imposition of this duty. Subsequently, Customs Notification No. 30/2008-Cus was issued, acting upon DGAD’s recommendations. Later, in a separate investigation regarding phenol exported from Taiwan or the USA, DGAD found that there was a lower dumping margin and no injury during the period from January 01, 2010, to December 31, 2010. DGAD’s final findings recommended the revocation of the anti-dumping duty.
The Ministry of Finance implemented this recommendation by issuing Notification No. 14/2012-Customs dated 29.02.2012, thereby revoking the anti-dumping duty.
The appellant assessee subsequently filed a refund claim for the anti-dumping duty they had paid during the period from April 2010 to February 2012. The appellant argued that since DGAD had determined that there was a lower dumping margin and no injury during that time, the duty paid should be refundable.
The issue centered on the interpretation of the phrase “except as respects things done or omitted to be done before such rescission,’ as it appeared in Notification No. 14/2012. The authorities had denied the refund claim on the grounds that this phrase implied that the revocation of the anti-dumping duty did not apply to past clearances. However, the appellant contended that this interpretation was flawed and they should be entitled to a refund.
The bench highlighted the judgment of the High Court of Madras in the case of M/s. Vetcare Organics Pvt Ltd. The Madras High Court had examined the same phrase and concluded that it went against the very scheme of anti-dumping laws and was violative of Articles 14 and 265 of the Indian Constitution.
The Madras High Court’s ruling established that once the Designated Authority found no dumping of materials, the government had to withdraw the provisional duty imposed, as stated in Rule 18(4) of the Customs Tariff (Identification, Assessment and Collection of Anti-Dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995. Therefore, preserving the authority to impose or maintain the duty in cases where it was omitted to be done before the rescission of the earlier notification was inconsistent with the law.
The CESTAT, in line with the Madras High Court decision, held that the order denying the refund based on the phrase “except as respects things done or omitted to be done before such rescission” was untenable.
The bench found that this interpretation contradicted the scheme of anti-dumping laws and was in violation of Article 265 of the Indian Constitution.
In result, the two-member bench comprising Shri Raju (Technical Member) and Shri Somesh Arora (Judicial Member) set aside the order and allowed the appeal filed by the appellant.
The bench upheld the principle that once a finding is made by the Designated Authority that there was no dumping and no basis for the imposition of anti-dumping duty, there should be no preservation of authority to impose or maintain such duty for past clearances, in line with the Constitutional mandate and the prevailing anti-dumping laws.
The decision provides clarity and protection for importers who have paid anti-dumping duty in situations where it is later determined that no dumping occurred.
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