SC rules that anti-dumping duty cannot be levied during the period between the expiry of a provisional duty notification and imposition of final duty

We are pleased to release a Tax Alert that gives an update on the decision of the Supreme Court (SC) in batch of appeals, regarding the levy of Anti-dumping duty (duty). The issue before the SC was whether duty imposed w.r.t. imports made during the period between the expiry of the notification levying provisional duty and the subsequent issuance of notification imposing the final duty, was legal and valid.

 

SC held that neither sub-section (2) nor (6) of section 9A of the Customs Act authorises the Central Government, either expressly or implicitly, to make rules and/or to levy duty with retrospective effect.

 

The word “levied” under Rule 20 of Anti-Dumping Duty Rules has to be read as levied in accordance with Rule 13 which provides for the “levy” of provisional duty. Under proviso to Rule 13, such levy cannot be for a period exceeding 6 months.

 

Further, Rule 20 (2) (a) enables the levy of a final duty from the date of imposition of a provisional duty so as to convert the provisional measure into a final measure. Accordingly, it is clear that such imposition can only be during the period upto which the provisional duty is levied and not beyond.

 

SC ruling provides relief to importers who paid anti-dumping duty during the interim period and where notification imposing final duty had been delayed beyond the stipulated period. Such importers can now claim refund of duty so paid for intervening period. The modus-operandi to claim such refund will however need to be analysed.