2020 (9) TMI 139 - SC - Customs

Seeking levy of Anti Dumping Duty - Designated Authority (DA) terminated the investigation on the ground that appellant failed to prove any injury to Domestic industries - HC directed the DA to initiate investigation - Contempt proceedings initiated against the DA for failure to make necessary inquiry / investigation - HC has also issued directions for replacement of DA - normal Butanol or N-butyl alcohol - scope of the term like article - Rule 14(b) of the Rules of 1995. HELD THAT - Section 9A of the Customs Tariff Act and the procedure prescribed by the Rules of 1995 clearly disclose an intent that investigations should be completed within pre-determined time limits and the levy itself (which can be specific to foreign exporter or country or combination of both-) cannot be more than five years which may after due review in accordance with prescribed procedure before expiry of the said period be extended by another period not more than five years. These timelines are crucial; the DA is duty bound to follow them. The analysis of the particular market behaviour by the allegedly offending foreign exporters involves sifting of a great deal of evidence such as manufacturing capacity financial abilities overall capacity of the country in the like field prices and the margin of acceptable delinquent behaviour as well as domestic capacity efficiency etc while determining if an injury exists the margin of such injury and its likely duration. Keeping the imperative of completion of investigation within a pre-determined timeline the guidelines contained in the Manual of Operation for Trade Remedy Investigations (Period of Investigation and Injury Investigation period) as to the contemporaneousness of the data necessary to carry out the investigation assume importance - The rationale for these guidelines is self-evident any investigation carried out for past periods would in all likelihood result in minimal levy. For instance if in 2020 investigation is initiated for the period 2013-14 with the object of determining anti-dumping even if injurious behavior is found the levy can be only of limited duration. Further to levy duty for the period after findings are rendered the POI would yield stale results and cannot justify levy for later periods. Keeping this in mind the DA apparently in the present case having regard to Para 5.9 required Andhra Petro to furnish relatively contemporary data. Such an action cannot be termed as arbitrary. In this court s opinion the impugned orders were plainly erroneous in chastising the DA and even directing his replacement for what appears to be his adherence to prescribed procedure. Access to judicial review is a valuable right conferred upon citizens and persons aggrieved; the Constitution arms the High Courts and this court with powers under Articles 226 and 32. At the same time barring exceptional features necessitating intervention in an ongoing investigation triggered by a complaint by the concerned domestic industry judicial review should not be exercised virtually as a continuous oversight of the DA s functions. This court has cautioned more than once that judicial review is to be exercised in a circumspect manner especially where final findings are rendered by the DA. This court is of the opinion that the impugned orders issuing specific directions for anti-dumping investigation into articles imported from EU the order initiating contempt proceedings against the DA and order for replacement of DA have to be set aside - appeal allowed.

Issues Involved:
1. Imposition of anti-dumping duty on imports of normal Butanol from Saudi Arabia.
2. Determination of the period of investigation and the sufficiency of data provided.
3. Classification of "like articles" under the Customs Tariff (Identification, Assessment and Collection of Antidumping Duty on Dumped Article and for Determination of Injury) Rules, 1995.
4. Compliance with High Court directions by the Designated Authority (DA).
5. Initiation of suo motu contempt proceedings against the DA.

Detailed Analysis:

1. Imposition of Anti-Dumping Duty on Imports of Normal Butanol from Saudi Arabia:
The appeals challenged the Telangana High Court orders related to the imposition of anti-dumping duty on imports of normal Butanol from Saudi Arabia. Andhra Petro sought the imposition of such duty, claiming significant market share capture and material injury to the domestic industry due to dumping from Saudi Arabia. The Designated Authority (DA) conducted an investigation but concluded that the short period of imports (last three months of the period of investigation) was insufficient to evaluate material injury, leading to the termination of the investigation without recommending the imposition of anti-dumping duty.

2. Determination of the Period of Investigation and Sufficiency of Data Provided:
The DA's investigation covered imports from April 2015 to March 2016. Andhra Petro admitted that dumping from Saudi Arabia occurred only in the last three months of this period. The DA found this short period insufficient to establish a causal link between imports and injury to the domestic industry. The High Court directed the DA to reconsider the applications afresh, but the DA again declined to initiate an anti-dumping investigation, leading to further legal challenges.

3. Classification of "Like Articles" under the Customs Tariff Rules, 1995:
Andhra Petro contended that it produced 2-EH, which is a "like article" to 2-PH and INA, thus satisfying the criteria under Rule 2(b) read with Rule 2(d) of the Rules of 1995. The DA, however, rejected this claim, stating that Andhra Petro produced only 2-EH and not INA and 2-PH. The High Court found that the DA did not adequately consider whether the imported products and domestic products were technically and commercially substitutable, leading to a direction for the DA to initiate an investigation into the imports of INA and 2-PH.

4. Compliance with High Court Directions by the Designated Authority (DA):
The High Court found that the DA did not comply with its directions to reconsider the applications in true letter and spirit. The DA's subsequent actions, including seeking updated data from Andhra Petro, were viewed as non-compliant with the High Court's order. The High Court initiated suo motu contempt proceedings against the DA for willful and deliberate disobedience of its order.

5. Initiation of Suo Motu Contempt Proceedings Against the DA:
The High Court initiated suo motu contempt proceedings against the DA for failing to comply with its directions and for showing disrespect towards the Court. The DA's actions, including enlarging the period of investigation and seeking updated data, were seen as lacking bona fides and intent to tamper with judicial orders.

Conclusion:
The Supreme Court set aside the High Court's orders, including the initiation of suo motu contempt proceedings and the direction to replace the incumbent DA. The Court emphasized the importance of following prescribed procedures and timelines in anti-dumping investigations and highlighted the need for judicial review to be exercised circumspectly. The appeals were allowed without any order on costs.

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