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2019 (4) TMI 145 - HC - CustomsJurisdiction - power to review - Imposition of ADD - imports of AA Dry Cell Batteries from the People s Republic of China and Vietnam - Section 9C of the Customs Tariff Act. Whether the Designated Authority s negative Final findings recommending no anti dumping duty on the ground of it not being in accord with the disclosure statement published by it, can in the circumstances of this case, be interfered with in judicial review? Held that - Supreme Court judgments, and several decisions of High Courts, have clarified that the Designated Authority is only an investigating authority whose findings are recommendatory in nature. It is only when the recommendation is followed by a notification imposing anti dumping duty that a lis arises; this appears to be clear from the three judge decision in Tata Chemicals v Union of India 2008 (3) TMI 17 - SUPREME COURT . No doubt, every DA adopts and is duty bound to adopt (in consonance with GATT provisions as well as the rules) a quasi-judicial procedure, whereby opportunity is granted to the concerned parties and those likely to be affected, culminating in reasoned final findings. Supreme Court in Automotive Tyre Manufacturers Association v. the Designated Authority Ors 2011 (1) TMI 7 - SUPREME COURT OF INDIA has held that the DA exercises quasi-judicial functions and is bound to act judicially. The DA determines the rights and obligations of the interested parties by applying objective standards based on the material/information/evidence presented by the exporters, foreign producers and other interested parties by applying the procedure and principles laid down in the 1995 Rules. While determining the existence, degree and effect of the alleged dumping, the Designated Authority determines a lis between persons supporting the levy of duty and those opposing the said levy. According to Rule 4(1) (d) of the Rules, the duty of the Designated Authority is to recommend the amount of anti-dumping duty, which if levied, would remove the injury to the domestic industry. Section 9A of the Customs Tariff Act enables only the Central Government to impose anti-dumping duty. The Customs Tariff Act and the Rules thereunder thus make it clear that the Designated Authority s findings are mere recommendations intended to assist the Central Government. This court is conscious of the separate roles that the Designated Authority and the Central Government perform in deciding whether or not to impose anti-dumping duty. The Central Government is restricted from imposing anti-dumping duty in certain circumstances. One such circumstance is outlined in Section 9B (1)(b)(ii) of the Act. Section 9B(1)(b)(ii) prevents the Central Government from levying anti-dumping duty on any article imported into India from a member of the World Trade Organisation (WTO) or from a most favoured nation, unless a determination has been made that import of such article causes or threatens material injury to any established industry in India. In the present case, 01.04.2014 to 31.03.2015 was chosen as the period of investigation- initiated on 20.10.2015. By Rule 17 necessarily the DA had to furnish its report. On 27.09.2016, DA issued the Impugned Final Findings wherein it recommended against the imposition of anti-dumping duty. The proviso enables the Central Government, in the exercise of its discretion to extend that period by a maximum of six months. In the event that the DA had decided to impose anti-dumping duty, the Central Government, according to Rule 18(1) would be obligated to impose antidumping duty within three months of the Designated Authority s final finding. In case of an adverse finding, even the provisional duty (if imposed earlier) has to be revoked within forty-five days of publication of the final findings. In the facts of the case, if the petitioners contentions were to be accepted, the window period for the DA to have reconsidered the matter after judgment, under Article 226 would have been between 27.9.2016 and 20 April 2017. Even if, arguendo anti-dumping duty were justified, the matter would necessarily have to be remanded back before the DA for reconsideration. Anti-dumping duty will only be imposed once both the DA and the Central Government agree that it is warranted. However, as the period of investigation is from 01.04.2014 to 31.03.2015, all determinations will only concern this 12-month period. Petition dismissed.
Issues Involved:
1. Legality of the Designated Authority's (DA) final findings. 2. Contradictions between the DA’s disclosure statement and final findings. 3. Jurisdiction and scope of judicial review under Article 226. 4. Role and discretion of the Central Government in imposing anti-dumping duties. 5. Compliance with the Customs Tariff Act and WTO agreements. Detailed Analysis: 1. Legality of the Designated Authority's (DA) final findings: The petitioner, Eveready, challenged the DA's final findings dated 27.09.2016, which recommended against the imposition of anti-dumping duties on imports of AA Dry Cell Batteries from China and Vietnam. The DA concluded that the dumped imports did not cause material injury to the domestic industry, as the domestic industry realized much higher selling prices compared to their non-injurious price and the landed price of the subject goods, earning huge profits. The DA's findings were based on an investigation period from 01.04.2014 to 31.03.2015. 2. Contradictions between the DA’s disclosure statement and final findings: Eveready argued that the DA's disclosure statement had established dumping, injury, and a causal link, but the final findings contradicted this by concluding no material injury. The petitioner highlighted that the DA's disclosure statement noted significant price undercutting, increased inventory levels, and a decline in capacity utilization and production despite increased demand. However, the final findings stated that the domestic industry made huge profits, and there was no price impact on the domestic industry due to higher net sales realization than the landed price and non-injurious price. 3. Jurisdiction and scope of judicial review under Article 226: The court emphasized that the DA acts in a quasi-judicial capacity, and its findings are recommendatory and not binding on the Central Government. The court can intervene under Article 226 if the DA oversteps the bounds of law or renders perverse findings. However, the DA's findings must be based on an objective examination of the material submitted by the parties, and the DA is required to follow the principles of natural justice. 4. Role and discretion of the Central Government in imposing anti-dumping duties: The Central Government has the discretion to accept or reject the DA's recommendations. Section 9A(1) of the Customs Tariff Act and Rule 18(1) of the Customs Tariff (Identification, Assessment, and Collection of Anti-dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995, use the word "may," indicating that the Central Government is not obligated to impose anti-dumping duties based on the DA's recommendations. The court cited several judgments to support this view, including Tata Chemicals v. Union of India and Alembic Ltd. v. Union of India. 5. Compliance with the Customs Tariff Act and WTO agreements: The court noted that the Customs Tariff Act and the Rules align with the WTO agreements, specifically Article 11.3 of the Anti-Dumping Agreement, which mandates a review of the need for continued imposition of anti-dumping duties within five years. The DA's role is to determine the existence, degree, and effect of dumping, while the Central Government considers additional factors, including public interest, before deciding on the imposition of duties. Conclusion: The court found no merit in the petition, stating that the DA had considered all relevant factors and followed the legal requirements in its final findings. The court emphasized that it could not act as an economic analyst and that any interference under Article 226 must be based on procedural irregularity or illegality, which was not demonstrated in this case. The petition was dismissed, and the court upheld the DA's recommendation against the imposition of anti-dumping duties.
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