2011 (12) TMI 355 - HC - Customs

Anti-dumping duty - The petitioner had filed an application before the Designated Authority ( DA for short) alleging dumping of Penicillin-G Potassium originating in or exported from China PR and Mexico as also of 6-Amino Penicillin Acid (6- APA for short) originating in or exported from China PR - It is the case of the petitioner that as per Rule 18 of the Rules, Central Government was required to impose Anti-dumping duty in terms of recommendations of DA within three months of the date of publication of final findings - even if Central Government were to accept the recommendations of DA for imposition of Anti-dumping duty, the extent of such Anti-dumping duty need not necessarily be as recommended by DA - several Courts have opined that the recommendations of the DA are not binding on the Government Whether the Central Government had sufficient reasons not to impose duty despite recommendations made by the DA - DA had come to certain conclusions which were not disputed by the Central Government. Insofar as factual findings are concerned, such findings were perhaps not even open to challenge by the Central Government - Held that the Central Government has taken into consideration various factors and come to the conclusion that it is not in public interest to impose Anti-dumping duty - Decided against the petitioner

Issues Involved:
1. Imposition of Anti-dumping duty.
2. Binding nature of the Designated Authority's recommendations.
3. Public interest considerations in imposing Anti-dumping duty.
4. Judicial review of the Central Government's decision.

Detailed Analysis:

1. Imposition of Anti-dumping Duty:
The petitioner sought a writ of mandamus directing the Ministry of Finance to accept the recommendations of the Designated Authority (DA) and the Ministry of Chemicals and Fertilizers to impose Anti-dumping duty on imports of Penicillin-G and 6-Amino Penicillin Acid (6-APA) from China PR and Mexico. The DA had issued preliminary findings recommending the imposition of provisional Anti-dumping duty, followed by final findings supporting the imposition of such duty. However, the Central Government did not impose the duty despite these recommendations, leading the petitioner to file a fresh petition.

2. Binding Nature of the Designated Authority's Recommendations:
The DA concluded that there was sufficient justification for imposing Anti-dumping duty, establishing a causal link between dumped imports and injury to the domestic industry. The DA recommended the imposition of definitive Anti-dumping duty. The petitioner argued that the Central Government was required to impose the duty as per Rule 18 of the Rules within three months of the DA's final findings. However, the Central Government, citing numerous representations and broader public interest considerations, decided not to impose the duty.

3. Public Interest Considerations in Imposing Anti-dumping Duty:
The Central Government considered several factors before deciding against the imposition of Anti-dumping duty:
- Insufficient domestic supply of the subject goods to meet domestic demand.
- Likely impact on the price of formulations and the burden on antibiotic manufacturers.
- Disproportionate impact on a larger community of downstream users and consumers.
- Potential significant increase in the prices of life-saving drugs.
- Risk of Chinese exporters exporting value-added APIs to India, potentially closing many manufacturing units of antibiotics in India.
- The adverse effect on small and medium enterprises (SMEs) converting intermediates into formulations.

The Central Government emphasized that the imposition of Anti-dumping duty would not be in the larger public interest, considering the significant disadvantages to consumers and the potential increase in the prices of essential medicines.

4. Judicial Review of the Central Government's Decision:
The Court examined whether the recommendations of the DA were binding on the Central Government and whether the Central Government had sufficient reasons to refuse the imposition of Anti-dumping duty. It was concluded that the recommendations of the DA are not binding on the Central Government. The Central Government has discretionary powers under Rule 18 of the Rules to impose or not impose Anti-dumping duty, even when recommended by the DA. The Court noted that the Central Government's decision was based on broader public interest considerations, which were additional to the factors considered by the DA. The Court held that the Central Government's decision was not arbitrary and was within its discretionary powers.

Conclusion:
The Court dismissed the petition, concluding that the Central Government's decision not to impose Anti-dumping duty was based on valid public interest considerations and was within its discretionary powers. The recommendations of the DA are not binding on the Central Government, and the decision to impose Anti-dumping duty involves broader considerations beyond the DA's findings. The Court emphasized judicial restraint in matters involving economic and fiscal regulatory measures, allowing the executive greater latitude in policy implementation.

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