2018 (12) TMI 175 - HC - Customs

continuation of Anti Dumping Duty (ADD) - Time limit for completing the New Shippers Review - Continuation of investigation - Validity of Initiation notification and Orders of the Designated Authority, dated 10/4/2017 and 12/4/2017 - validity of notification dated 16.6.17 - principle argument was that the authorities had no jurisdiction to continue the investigation beyond a period of eighteen months, from the date of initiation, for the simple reason that New Shippers Review, which deals with only one exporter could not exceed the time period, which is prescribed for investigation, under Rule 17 of the ADD Rules which is the period for investigation, for all exporters. Held that - The imposition of Anti-Dumping Duty was the outcome of the General Agreement on Tariffs Trade, 1994, to which India is a party. The purpose behind the imposition of the duty was to curb the unfair trade practices resorted to by the exporters of a particular country of flooding the Domestic Markets with goods, at the rate which are lesser than the rate at which the exporters normally sell the same in their own countries which is the effect of causing injury to the domestic market. Section 9 A was therefore, brought in, to maintain a level playing field and prevent dumping the goods into India while allowing the healthy competition. It is also not in dispute that Rule 22 would deal with much lesser number of exporters. Rule 23 (1-A) provides that Designated Authority shall review the need for continued imposition of Anti Dumping Duty either upon a request by interested party, who submits positive information, substantiating the need of such review or when the reasonable period of time has elapsed since the imposition of the definitive Anti Dumping Duty and upon such review, the Designated Authority has to recommend to the Central Government for its withdrawal, where it comes to a conclusion that the injury to the domestic industry is not likely to continue or recur, if the said Anti Dumping Duty is removed, and is not warranted. The period for conducting the review is specified as twelve months. A perusal of the above would show that the period of twelve months (not exceeding 18 months) is provided for the original investigation, a period of 12 months is provided, under Rule 23, but no period has been specified for Rule 22, which is for exporters, who have not been originally investigated because they did not export the goods in question into India. It is to be noted that both under investigation conducted under Rule 17 and 23, the number of exporters are much more compared to the exporters who are scrutinized under Rule 22. The period taken for these assessment cannot exceed the original investigation - Learned counsel for the appellant is justified in contending that if the time taken in review under 22 is longer than the original investigation, then this would allow the foreign exporter to dump its goods into India, on the basis of provisional assessment, to the detriment of the Indian Domestic Industry. The exporter can manipulate his prices and create documents, if the period for investigation, under Rule 22 is not shorter than the original investigation. The agreement to which India is a signatory, is the basis of the ADD, and therefore, the purpose behind that must be the guiding force while interpreting Rule 22. The learned Single Judge erred in applying the literal Rule of Interpretation, to come to a conclusion that to fix the time limit in Rule 22 would amount to rewriting the Rule. In our opinion, the Rule of purpose of interpretation should have been applied - Keeping in view the spirit of GATT, to which India is a signatory and the stand which India has taken in answering various questions. If the time taken in review under 22 is longer than the original investigation, then this would allow the foreign exporter to dump its goods into India, on the basis of provisional assessment, to the detriment of the Indian Domestic Industry. The exporter can manipulate his prices and create documents, if the period for investigation, under Rule 22 is not shorter than the original investigation and the very purpose of imposing Anti-Dumping duty will be lost. The time limit for completing the New Shippers Review must be read into Rule 22 of ADD - In the present case, the procedure under Rule 22, was initiated on 23/9/2015 and it culminated on 12/4/2017, after 18 months, which is more than the time prescribed in Rule 17 and Rule 23. The new Shippers review initiated by Notification dated 23/9/2015, and culminating in final finding dated 10/4/2017, is clearly barred by time. Even in the absence of time limit fixed in rule 22, a review undertaken under Rule 22 is required to be completed on an accelerated basis i.e., definitely before the time period prescribed in Rule 17 or Rule 23. Appeal allowed.

Summary

Issues Involved:
1. Jurisdiction to Continue Investigation Beyond Prescribed Time Limit.
2. Interpretation of Rule 22 of the ADD Rules.
3. Applicability of Time Limits from Rule 17 and Rule 23 to Rule 22.
4. Maintainability of Writ Petitions.
5. Availability of Alternate Remedy Under Section 9C of the Customs Tariff Act.

Issue-wise Detailed Analysis:

1. Jurisdiction to Continue Investigation Beyond Prescribed Time Limit:
The appellants challenged the initiation and continuation of a New Shipper Review investigation beyond the prescribed time limit. They argued that the investigation should not exceed 18 months, as stipulated under Rule 17 of the ADD Rules for normal investigations. The court found that the New Shipper Review initiated on 23/09/2015 and concluded on 12/04/2017 exceeded this time limit, making it barred by time. The court emphasized that the review under Rule 22 should be completed on an accelerated basis, definitely before the time period prescribed in Rule 17 or Rule 23.

2. Interpretation of Rule 22 of the ADD Rules:
The court analyzed whether Rule 22, which deals with determining individual margins of dumping for exporters not originally investigated, should include a time limit for completing the investigation. The court noted that Rule 22 does not explicitly prescribe a time limit, unlike Rule 17 and Rule 23. However, considering the purpose of the General Agreement on Tariffs and Trade (GATT) and India's obligations under it, the court concluded that the time limit must be read into Rule 22 to ensure an accelerated review process.

3. Applicability of Time Limits from Rule 17 and Rule 23 to Rule 22:
The court examined whether the time limits prescribed in Rule 17 (one year, extendable by six months) and Rule 23 (twelve months) should apply to Rule 22. The court held that, given the nature of New Shipper Reviews and the need for an expedited process as per GATT Article 9.5, the time limits from Rule 17 and Rule 23 should be applied to Rule 22. This ensures that the review process does not extend beyond the time required for normal investigations, thus preventing foreign exporters from manipulating prices and flooding the domestic market with dumped goods.

4. Maintainability of Writ Petitions:
The court addressed the maintainability of the writ petitions, considering the availability of an alternate remedy under Section 9C of the Customs Tariff Act. The court concluded that the writ petitions were maintainable as they raised substantial questions of law regarding the interpretation and scope of Rule 22 of the ADD Rules. The appellate authority under Section 9C would be bound by the literal rule of construction and could not undertake the necessary interpretative exercise.

5. Availability of Alternate Remedy Under Section 9C of the Customs Tariff Act:
The respondents argued that the appellants should have availed the alternate remedy under Section 9C of the Customs Tariff Act. The court acknowledged this argument but emphasized that the writ petitions involved significant legal questions that warranted judicial review. Therefore, the availability of an alternate remedy did not preclude the court from entertaining the writ petitions.

Conclusion:
The court allowed the writ appeals, setting aside the judgment of the learned Single Judge and the Tribunal. It held that the New Shipper Review initiated on 23/09/2015 and concluded on 12/04/2017 was barred by time, as the review should have been completed within the time limits prescribed for normal investigations under Rule 17 and Rule 23. The court emphasized the need for an accelerated review process under Rule 22 to prevent unfair trade practices and protect the domestic industry.