2017 (11) TMI 1495 - HC - Customs

Proceedings to levy Anti-dumping duty - Exclusion of the party from the proceedings - power to initiate proceedings under Rule 5 of the Customs Tariff (Identification, Assessment and Collection of Anti-dumping duty on dumped articles and for determination of injury) Rules 1995 - whether the direction as sought for by the petitioner/Association to direct the first respondent to proceed to determine his jurisdiction to initiate proceedings under Rule 5 of the Anti-Dumping Rules as sought for in their representation/application should be issued? Held that - The apprehension of the petitioner/Association appears to be without any basis. This is so because of the manner in which Rule 12 of the Customs Tariff Rules is worded. In terms of Sub-rule (1) of Rule 12 of the Customs Tariff Rules, the Designated Authority shall proceed with the conduct of the investigation and in appropriate cases, record a preliminary finding regarding export price, normal value and margin of dumping. To determine these three factors, essentially the first respondent has to go into the aspect as to who are the domestic industry and whether any of them are related to the exporters or importers. If at the inception of an enquiry by a Tribunal or an authority, a challenge has been made to the jurisdiction, the Tribunal/authority has to take a decision as to whether or not to act and give a ruling on the preliminary or collateral issue, but such ruling is not a conclusion. Above all, the rules are clear, especially Rule 12 of the Customs Tariff Rules and there is no necessity for this Court to issue any direction to the first respondent to decide the matter in a particular manner nor it would be right in doing so, as he is cast with a statutory duty to determine the injury based on relevant consideration, which undoubtedly would mean as to whether the fifth respondent has to be excluded from the proceedings or not. Petition disposed off.

Issues Involved:
1. Quashing the notification initiating Anti-dumping investigation.
2. Determining the jurisdiction of the Designated Authority under Rule 5 of the Customs Tariff Rules.

Issue-wise Detailed Analysis:

1. Quashing the Notification Initiating Anti-dumping Investigation:

The petitioners, comprising an association and an individual textile mill, sought a writ of certiorari to quash the notification dated 02.02.2017, which initiated an Anti-dumping investigation on imports of Non-dyed Polyester Staple Fiber (PSF) from China PR, Indonesia, Malaysia, and Thailand. The petitioners argued that the imposition of anti-dumping duties would have severe financial impacts on their members who import PSF for manufacturing purposes. They claimed locus standi as interested parties due to their significant stake in the matter.

The petitioners contended that the first respondent (Designated Authority) initiated the investigation without proper data beyond March 2015 and without addressing the jurisdictional issue raised by the petitioners. They alleged that the initiation was based on misconstruction of domestic industry norms and requested that the jurisdiction issue be decided upfront.

The respondents, including the Additional Solicitor General, argued that the petitioners had no locus standi to maintain the writ petitions as they had already applied to be heard before the Designated Authority. They asserted that the issues raised could be addressed by the authority and that the initiation notification contained only a prima facie finding, not a conclusion.

The court, after considering the submissions, clarified that the apprehension of the petitioners was unfounded. It emphasized that Rule 12 of the Customs Tariff Rules mandates the Designated Authority to proceed with the investigation and record preliminary findings regarding export price, normal value, and margin of dumping. The court noted that the first respondent's impugned notification contained only a prima facie view and not a conclusive determination about the fifth respondent's eligibility as part of the domestic industry.

2. Determining the Jurisdiction of the Designated Authority under Rule 5:

The petitioners sought a writ of mandamus directing the first respondent to determine its jurisdiction to initiate proceedings under Rule 5 of the Customs Tariff Rules. They argued that the Designated Authority should address the jurisdictional issue before proceeding further with the investigation.

The court referred to Section 9A and Section 9B of the Customs Tariff Act, which deal with anti-dumping duties and the rules for their imposition. It highlighted Rule 2(b) and Rule 5 of the Customs Tariff Rules, which define domestic industry and outline the initiation of investigations. The court explained that the Designated Authority must determine whether the complaint is by the domestic industry and if any producers are related to exporters or importers.

The court acknowledged the petitioners' concern about the alleged relationship between the fifth respondent and a Malaysian company, but it clarified that the Designated Authority must determine the export price, normal value, and margin of dumping. The court emphasized that the first respondent must consider objections from all interested parties while recording preliminary findings under Rule 12.

The court cited precedents, including Vodafone International Holdings BV v. Union of India and Kiran Chit Fund v. A. Bal Reddy, to illustrate that jurisdictional issues can be decided as a preliminary matter. However, it noted that the Designated Authority has a statutory duty to determine the injury based on relevant considerations, including whether the fifth respondent should be excluded from the proceedings.

Conclusion:

The court disposed of W.P.No.17926 of 2017, directing the first respondent to hear all interested parties, including the petitioners, and proceed in accordance with the law. Consequently, W.P.Nos.17927 and 17937 of 2017 were closed, and no costs were imposed. The court emphasized that the Designated Authority must determine jurisdictional issues and other relevant factors during the investigation process.

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