Supreme Court Issues Notice On Union's Appeal Against CETSTAT Order Allowing Vedanta's Plea To Levy Anti-Dumping Duty On Aluminium Imports

The Supreme Court on August 30 issued notice to the respondent Vedanta Limited in a Special Leave Petition filed by the Union of India against the judgment passed by the Customs Excise Service Tax Appellate Tribunal(CESTAT) in an anti-dumping appeal case.

Brief facts

As per brief facts, Vedanta filed an application for an anti-subsidy investigation on Aluminium Primary Foundry Alloy Ingot originating in or exported from Malaysia to the Designated Authority, which issued a public notice under the Customs Tariff (Identification, Assessment and Collection of Countervailing Duty on subsided Articles and for Determination of Injury), Rules, 1995. 

The Designated Authority on January 31, 2022 recommended the imposition of definitive countervailing duty on the goods from Malaysia. Pursuant to this, the Central Government decided not to impose the proposed countervailing duty under an office memorandum dated May 23, 2022 issued by the Ministry of Finance. 

Aggrieved by this, Vedanta preferred an appeal before the CESTAT. On May 23, 2022, CESTAT set aside the office memorandum and directed the Central Government to reconsider the recommendations of the Designated Authority.

CESTAT Order 

As per the order of the CESTAT, the decision of the Central Government not to impose countervailing duty is 'quasi-judicial' in nature and it did not give any reasons for not imposing the duty despite detailed findings of the Designated Authority. Therefore, violating principles of natural justice. 

The order also stated that a provisional assessment of the imports of the goods will be made for the time being, without creating any equities in favour of the domestic industry, until the Central Government reconsiders its decision.

This has been appealed by the Union of India before the Supreme Court.

Arguments of Union

In the SLP, the Union Government argues that it is well-settled law that the Central Government is not bound by the final findings of the Designated Authority. It has the discretion to not levy countervailing duty despite the recommendations suggesting the country.

The Union referred to the findings of the Supreme Court in Saurashtra Chemicals Ltd. vs Union Of India (2000), and submitted that the findings of the Designated Authority are purely recommendatory in nature. 

Further, a reference was made to The Designated Authority vs M/S The Andhra Petrochemicals Limited (2020) and it was argued that the power to levy duty is discretionary evident from Rule 18 of the Anti-Dumping Rules. The Rules leave it to the Central Government to levy anti-dumping duty.

The Union also argued that the Central Government has the power and authority to impose or not impose anti-dumping duty and where it decides to impose anti-dumping duty, the determination of the margin of dumping can be lower (even nil). But cannot exceed the margin determined by the Designated Authority as held in Jindal Poly Film Ltd vs Designated Authority & Anr (2018) by the Delhi High Court.

Lastly, it was also submitted that the proceedings before the Designated Authority are only quasi-judicial but the decision of the Central Government to impose or not impose countervailing duty is purely legislative and not quasi-judicial.

On April 13, 2023, the Supreme Court issued interim measures directing the Union of India to levy provisional anti-dumping duty under Section 9A(2) of the Customs Tariff Act, 1975. However, it subsequently suspended the interim measures and kept in abeyance on a plea by the Union.

Case Details: UNION OF INDIA Versus VEDANTA LIMITED AND ORS Diary No. 28883-2023