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2017 (11) TMI 624 - HC - CustomsADD - Initiation of Sunset Review - continuation of the notification issued by the Central Government of the anti-dumping duty - imports of Cellophane Transparent Film (CTF) - import from China - extension of the imposition of the ADD during the pendency of the SSR in terms of the second proviso to Section 9A (5) of the CTA - The case of the Petitioners before the DA was that the very fact that there were no known imports of the subject good from Israel while the ADD notification was in force indicated that there was a likelihood of dumping and injury in the event of revocation of duty. Whether the DA was justified in declining to initiate the SSR in the cases where ADD was in place and declined to initiate the investigation where the SGD was in place? - Held that - it is plain that the DA can initiate the SSR either on its own initiative or upon the request of an interested party. In all these cases, there was a request by the interested party, namely the Domestic Industry, for initiation of the SSR for the ultimate purpose of continuing the ADD. Rule 23 (1A) further requires such party to submit positive information substantiating the need for such review and upon such review, the DA shall recommend to the Central Government the withdrawal of the ADD where it comes to a conclusion that injury to the domestic industry is not likely to continue or recur if the said ADD is removed or varied and is, therefore, no longer warranted. This is an instance where the DA decides not to continue the ADD. Rule 6 sets out the principles governing the investigations. That procedure, however, envisages that the DA shall, after it has decided to initiate investigation to determine the existence, degree and effect of any alleged dumping of articles, issue a public notice notifying its decision and such public notice shall, inter alia, contain adequate information on the following. Rule 6 (1), therefore, does envisage the DA first deciding to initiate investigation. As already noticed, in Rule 23 (3) of the ADD Rules, Rule 6 will mutatis mutandis apply to an SSR. On this interpretation, the Court is therefore inclined to agree with the learned counsel for the Respondents that it is indeed a two-stage process where the DA has to first be satisfied that it requires to initiate an SSR and after it so decides then it proceeds to issue a public notice and then the entire procedure as envisaged in Rules 6 to 11 and 16 to 20 would then apply - The Court is, therefore, unable to accept the submission put forth on behalf of the Petitioners that there is no two-staged procedure involved in this determination and that once a request for initiating an SSR is made, the DA is left with no option but to go through the entire process of following the procedure under Rules 6 to 11 and 16 to 20 and only thereafter, comes to a conclusion as to whether the ADD requires to be continued. This, therefore, answers the first question. Even if it is held that an SSR had to be initiated, whether the DA is justified in not issuing a notification extending the ADD or the SD, as the case may be? - Held that - Merely because it is possible to take another view based on the same material which was placed before the DA does not mean that the Court will interfere with the ultimate decision reached by the DA. It is trite that while the scope of a judicial review will extend to examining the process of the decision-making in order to ensure that it is in conformity with the ADD Rules and the general principles of natural justice, the Court will not, in exercise of its jurisdiction under Article 226 of the Constitution, sit in appeal over the decision of the DA on merits, unless the decision is shown to be either mala fide or so utterly perverse and shocking to the judicial conscience that no reasonable person could have arrived at such a conclusion. That threshold has not been met by any of the Petitioners. While the Court does agree that it is ultimately the public interest and the purposes and objects for which the ADD provisions have been introduced in the CTA that have to govern the decision-making exercise, the Court would not like to interfere with such a decision arrived at by the DA unless it is shown to be utterly perverse and shocking to the judicial conscience. From the Court s point of view, if the Court failed to take a decision one way or the other on whether the SSR should be initiated, then precious time would be lost as a result of judicial delays. That was perhaps what weighed with the Court when, on 11th January 2017, it decided by an extraordinary interim order, to direct the DA to initiate SSR. This was, of course, subject to the final outcome of the writ proceedings - If these writ petitions are not dealt with within a short time period, then they may all be rendered infructuous. This is the danger that exists in such matters. Some procedure will have to be devised to ensure that the entire exercise is completed much before the expiry of the initial ADD notification. How that should be done has to be left to the authorities to determine and perhaps that would require a further refining of the existing ADD Rules and Safeguard Rules. The Court, however, would not like to opine any further on this aspect. Extension of notification imposing ADD - Held that - considering the question of extending the notification imposing the ADD is not an easy task to perform at the interim stage with all the relevant materials that are placed before the Court. Where the Petitioners are compelled to approach the Court at virtually the last minute , the Court has to proceed on the basis of the materials placed before it by the Petitioners without the benefit of the detailed reports and analysis undertaken by the DA. It is in those circumstances, like for instance in the case of ADL the Petitioner in W.P. (C) 7464 of 2017 , that the Court had passed an interim order directing that the ADD should be continued - having had the benefit of the reports of the DA, the Court is now satisfied that the DA was not in error in declining to initiate the SSR. Consequently, regardless of whatever stage the SSR has reached, it will have to now be terminated by virtue of the Court not agreeing with any of the Petitioners in these cases. Likewise, the Court s interim order by which the ADD was asked to be continued will also hereby stand terminated. The consequential refunds would be made available to the persons who in fact paid the ADD, without passing on the burden, in accordance with law. Petitions dismissed - decided against petitioner.
Issues Involved:
1. Initiation of Sunset Review (SSR) by the Designated Authority (DA) under Section 9A of the Customs Tariff Act, 1975 (CTA) read with Rule 23 of the Customs Tariff (Identification, Assessment and Collection of Anti-Dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995 (ADD Rules). 2. Continuation of the notification issued by the Central Government of the anti-dumping duty (ADD), pending the conclusion of the SSR. 3. Decision of the Central Government not to continue the safeguard duty (SGD) under Section 8B (4) read with Rules 16 and 18 of the Customs Tariff (Identification and Assessment of Safeguard Duty) Rules, 1997 (Safeguard Rules). Detailed Analysis: 1. Initiation of Sunset Review (SSR): Facts and Arguments: - The petitions questioned the DA's decision not to initiate SSR for various products, arguing that the DA failed to consider the likelihood of recurrence of dumping and injury. - Petitioners provided detailed substantiations, including data on imports, financial parameters, and the potential impact of ceasing ADD. - The DA declined to initiate SSR, citing reasons such as no significant imports during the investigation period, improved conditions of the domestic industry, and lack of sufficient data to support the likelihood of injury. Court's Analysis: - The Court examined whether the DA followed the procedure outlined under Section 9A (5) of the CTA read with Rule 23 of the ADD Rules. - It was noted that the DA can initiate SSR on its own or upon request by an interested party, provided the request is substantiated. - The Court agreed with the Respondents that it is a two-stage process: the DA must first decide whether to initiate SSR and then conduct the review. - The Court found that the DA had followed due process, including sending questionnaires to the Petitioners for further information. Conclusion: - The Court held that the DA's decision not to initiate SSR was justified as it was based on a detailed analysis of the data provided by the Petitioners. - The decision was not found to be arbitrary or based on irrelevant considerations. 2. Continuation of Anti-Dumping Duty (ADD): Facts and Arguments: - Petitioners argued that the ADD should continue pending the outcome of the SSR, citing the second proviso to Section 9A (5) of the CTA. - They relied on the Supreme Court's decision in Union of India v. Kumho Petrochemicals Company Limited, which suggested that the Central Government would likely continue ADD if SSR is initiated. Court's Analysis: - The Court referred to the decision in Kumho, which clarified that the continuation of ADD is not automatic and requires a proper notification by the Central Government. - The Court noted that the DA's decision to not extend ADD was based on a thorough analysis of the data and circumstances. Conclusion: - The Court found no grounds to interfere with the DA's decision not to extend ADD pending the SSR. - The interim orders directing the continuation of ADD were vacated. 3. Continuation of Safeguard Duty (SGD): Facts and Arguments: - VVF (India) Limited challenged the Central Government's decision not to continue SGD on fatty alcohols. - The Petitioners argued that there was a surge in imports from ASEAN countries, adversely affecting their business. Court's Analysis: - The Court examined the provisions of the Safeguard Rules and the CTA, noting that SGD is applied uniformly on all imports irrespective of their source. - The Court found that the DA had conducted a detailed analysis and concluded that the continuation of SGD was not warranted. Conclusion: - The Court upheld the DA's decision not to continue SGD, finding it to be based on relevant considerations and a detailed analysis. Orders and Final Judgment: - All the writ petitions were dismissed. - Interim orders directing the initiation of SSR and continuation of ADD were vacated. - The Court directed that any ADD collected during the interim period be refunded to the importers in accordance with the law.
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