2017 (3) TMI 633 - HC - Customs

Imposition of ADD - Cold Rolled Stainless Steel Sheets and Coils (CRSS) - import from China Korea EU South Africa Taiwan Thailand and USA - anti circumvention investigation - Held that - In the case of anti-circumvention proceedings u/s 9A (1A)-the procedure for which is prescribed in Rules 25-28 of the Anti-Dumping Rules the object is entirely different. Section 9A (1A) contemplates enquiry into whether there is circumvention of anti-dumping duty imposed u/s 9A (1) either by alteration of the article s description or its composition or by its import in an unassembled or disassembled form . However in the case of an anti-dumping investigation the methodology adopted is geared to see if there is injury on account of the dumping practice. The nature of materials considered during those investigations focused on all those elements that make up the injury. However in circumvention proceedings the trajectory of the inquiry is altogether different. It is whether given the existence of ADD (and the established existence of injury) there is any behavior in the form of import of other products which can be adapted or altered for use as the product or articles that are subject to ADD. Whilst the decisive nature of the observations of the DA in past instances is facially compelling for a court to hold that there should not be a fresh inquiry yet one cannot be oblivious to the nuanced nature of the circumvention procedure. The power to resort to it should be based on objective material. In the present case the information which the respondents rely upon is the stagnancy in demand of the article which is subject to ADD and the pattern of increase in import of CRSS that is wider than 1250 mm. The Petitioners argument that the subject matter of the previous orders and observations are the same in circumvention proceedings is unpersuasive to this court. A superficial analysis no doubt could lead one to conclude it to be so; however for doing that this court would have to assume that reduction of size from 1250 mm width to lower than that is not a process of assembling or making of a new article. Petition dismissed - decided against petitioner.

Summary

Issues Involved:
1. Challenge to Notification dated 19.02.2016 initiating investigation into alleged circumvention of anti-dumping duty on Cold Rolled Stainless Steel Sheets and Coils (CRSS) of width 600 mm to 1250 mm.
2. Validity of inclusion/exclusion of CRSS of width above 1250 mm in anti-dumping investigations.
3. Jurisdiction and authority of the Designated Authority (DA) in initiating anti-circumvention investigations.
4. Allegations of circumvention by importing CRSS of width above 1250 mm and slitting them down to widths subject to anti-dumping duty.
5. Examination of the technical and commercial feasibility of slitting CRSS of width above 1250 mm.

Detailed Analysis:

1. Challenge to Notification dated 19.02.2016:
The Petitioner contested the Notification dated 19.02.2016, which initiated an investigation into the alleged circumvention of anti-dumping duty on CRSS of width 600 mm to 1250 mm from various countries. The petitioner argued that the Designated Authority (DA) had previously examined and excluded CRSS of width above 1250 mm from the scope of anti-dumping duty, and the current investigation was arbitrary and without jurisdiction.

2. Validity of Inclusion/Exclusion of CRSS of Width Above 1250 mm:
The DA had previously excluded CRSS of width above 1250 mm from the scope of anti-dumping duty in its final findings dated 24.11.2009 and subsequent reviews. The exclusion was based on the technical and commercial infeasibility of slitting wider CRSS into narrower widths. The petitioner argued that this exclusion should remain in effect and that the current investigation into circumvention was unwarranted.

3. Jurisdiction and Authority of the DA in Initiating Anti-Circumvention Investigations:
The DA defended its jurisdiction to carry out anti-circumvention investigations under Rule 25 of the Anti-Dumping Rules. The DA argued that the circumvention investigation was justified based on evidence that CRSS of width above 1250 mm was being imported and then slit into narrower widths to circumvent the anti-dumping duty. The DA's authority to initiate such investigations was supported by the Supreme Court's decision in Rishiroop Polymers [2006 (196) ELT 385 (S.C.)].

4. Allegations of Circumvention by Importing CRSS of Width Above 1250 mm:
The petitioner argued that the DA's findings in previous investigations had already addressed the issue of circumvention and concluded that it was commercially unfeasible to slit wider CRSS into narrower widths. The petitioner contended that the current investigation was based on the same facts and grounds previously considered and rejected by the DA.

5. Examination of the Technical and Commercial Feasibility of Slitting CRSS of Width Above 1250 mm:
The DA had previously noted that slitting wider CRSS into narrower widths required significant investment and was not commercially viable for small and medium-scale users. The petitioner argued that this finding should preclude further investigation into circumvention. However, the DA initiated the current investigation based on evidence of increased imports of wider CRSS and the possibility of circumvention.

Conclusion:
The court concluded that the DA had the authority to initiate anti-circumvention investigations based on objective material. The court noted that the nature of the inquiry in circumvention proceedings was different from that in anti-dumping investigations. The court found no merit in the petition and dismissed it, reserving all rights and contentions of the parties. The court emphasized that its observations should not be construed as an expression on the merits of the case, including the justification for initiating circumvention proceedings.