2017 (1) TMI 6 - HC - Customs

Imposition of ADD - re-organization of business - It was contended by the petitioners that the important consideration which appeared to have dominated the mind of the Designated Authority was that Solvay SA which was the non-participating party in the original anti-dumping proceedings had obtained significant interest in the joint venture entity and thus became a significant shareholder in two of the petitioner entities - whether imposition of ADD ON Solvay SA justified? Held that - this Court is of the opinion that the Designated Authority should restrict its enquiry into the genuineness of the transaction whereby Solvay SA is said to have divested itself of the shareholding of the Inovyn JV resulting in restoration of status quo ante as it were on the date of rendering of submission of final report dated 04.04.2014 culminating in the notification dated 13.06.2014. In case the authority concludes that as a matter of fact Solvay SA has no shareholding any longer in the joint venture company which owned 50% or any such significant percentage of shareholding in the petitioner companies it should proceed to grant the request for change of name in the notification and recommend to that effect to the central government so that appropriate changes can be made by way of corrigendum. Petition allowed by way of remand.

Summary

Issues:
1. Rejection of application for apprising the Designated Authority about name change.
2. Determination of anti-dumping duty for petitioner companies.
3. Request to unbundle weighted average injury margin for subsidiaries.
4. Consideration of Solvay SA's shareholding in joint venture entity.
5. Restructuring and divestment of Solvay SA's shareholding in joint venture company.
6. Court's decision on the authority's inquiry and recommendation.

Analysis:
1. The petitioners had earlier complained about the rejection of their application regarding name change to the Designated Authority. The Authority rejected the application citing the formation of a joint venture named Inovyn JV by INEOS and Solvay, and the non-cooperation of Solvay in the original investigation.

2. The four petitioner companies faced investigations for anti-dumping, resulting in the imposition of anti-dumping duty at a specific rate. The Designated Authority determined the duty based on the responses filed by INEOS group of companies and treated them as a single entity, leading to a common duty for the group.

3. The petitioners requested to unbundle the weighted average injury margin for the subsidiaries and recommend duties based on the injury margin computed for them individually. However, the Authority found it legally impermissible to amend the duty table without a review investigation as per the Anti-Dumping Rules.

4. The Designated Authority considered Solvay SA's significant shareholding in the joint venture entity as a reason for not unbundling the injury margin for the subsidiaries. The Authority believed that closer investigation was necessary due to Solvay SA's involvement in the petitioner companies.

5. During the proceedings, it was revealed that Solvay SA had restructured and divested its shareholding in the joint venture company, Inovyn JV. This transaction was approved by the regulatory body, indicating a change in circumstances that needed to be considered by the Authority.

6. The Court, after considering the submissions, directed the Designated Authority to focus on the genuineness of Solvay SA's divestment of shareholding in Inovyn JV. If the Authority confirms the divestment, it should recommend the change of name in the notification to the central government for necessary corrections by way of a corrigendum. The Authority was instructed to complete its inquiry and pass final orders promptly, within two months.

This detailed analysis covers the key issues addressed in the judgment, providing a comprehensive overview of the legal proceedings and decisions made by the Court and the Designated Authority.