Gujarat High Court
Dcw Limited vs Union Of India on 12 April, 2018
Author: S.R.Brahmbhatt
Bench: S.R.Brahmbhatt, A.G.Uraizee
C/SCA/5798/2018 ORDER
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 5798 of 2018
With
R/SPECIAL CIVIL APPLICATION NO. 5808 of 2018
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DCW LIMITED
Versus
UNION OF INDIA
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COMMON APPEARANCE :
MR MIHIR JOSHI, SENIOR ADVOCATE with
MR RAJESH SHARMA, ADVOCATE with
MR GAURAV MATHUR, ADVOCATE with
MR ABHISHEK SHAH,ADVOCATE for
SINGHI AND CO(2725) for the PETITIONER(s) No. 1,2
for the RESPONDENT(s) No. 1,2,3
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CORAM:HONOURABLE MR.JUSTICE S.R.BRAHMBHATT
and
HONOURABLE MR.JUSTICE A.G.URAIZEE
Date : 12/04/2018
COMMON ORAL ORDER
(PER : HONOURABLE MR.JUSTICE S.R.BRAHMBHATT) 1.00. Draft Amendments in both the petitions are allowed. The same shall be carried out.
2.00. Both these petitions contain identical challenge to the order dated 5/4/2018 passed by the respondent No.2 on the application of the petitioners dated 29/1/2018 seeking Sunset Review in respect of the existing Anti-Dumping Duty so as to continue protection available to domestic industry against the alleged dumping of products - Soda-Ash, from Turkey and Russia.
Page 1 of 16 C/SCA/5798/2018 ORDER3.00. The Original Notification imposing Anti-Dumping Duty had been issued on 18/4/2013 and therefore, as per the provisions of section 9(A) of Customs Tariff Act, 1975 ("the Act" for short), the same shall not be continued after the period of five years which is getting over by 17/4/2018. The relevant provisions of the Act and the Rules called Customs Tariff (Identification, Assessment and Collection of Anti- Dumping Duty on Dumped Articles and for Determination of Injury Rules, 1995 ("the Rules" for short) provide for review at the end of the period, which is called Sunset Review either by the designated authority's own motion or on the strength of the substantiated application made by the domestic industry seeking continuation of protection in the form of Anti-Dumping Duty.
4.00. Mr.Mihir Joshi, learned Senior Advocate appearing on behalf of the respective petitioner invited attention of the Court to the application dated 29/1/2018 with greater emphasis upon page 339 - normal value in case of Russia, page 340 - export price, page 341 - dumping margin, page 342 - volume effect of dumped imports, page and price effect of dumped imports, page 343 - price suppression / depression, page 344, profitability, return on investment and cash profits, page 346 - conclusion on injury, page 347 - dumping margin determined in all previous investigations relating to the product, page 348, export orientation of producers in subject countries, page 349 - vulnerability of the domestic industry, page 350 conclusion on likelihood of dumping and injury and various other documents.
4.01. Mr.Mihir Joshi, learned Senior Advocate appearing Page 2 of 16 C/SCA/5798/2018 ORDER on behalf of the respective petitioner also drew attention of the Court to the provisions of Rule 23(1B) of the Rules read with section 9A(5) which for the sake of convenience is reproduced as under :-
"9A(5). Refund of anti-dumping duty in certain cases:-
The anti-dumping duty imposed under this section shall, unless revoked earlier, cease to have effect on the expiry of five years from the date of such imposition :
Provided that if the Central Government, in a review, is of the opinion that the cessation of such duty is likely to lead to continuation or recurrence of dumping and injury, it may, from time to time, extend the period of such imposition for a further period of five years and such further period shall commence from the date of order of such extension.
Provided further that where a review initiated before the expiry of the aforesaid period of five years has not come to a conclusion before such expiry, the anti-dumping duty may continue to remain in force pending the outcome of such a review for a further period not exceeding one year."
"23. Review. - [(1) Any anti-dumping duty imposed under the provisions of section 9A of the Act, shall remain in force, so long as and to the extent necessary, to counteract dumping, which is causing injury.Page 3 of 16 C/SCA/5798/2018 ORDER
(1A) The designated authority shall review the need for the continued imposition of any anti-dumping duty, where warranted, on its own initiative or upon request by any interested party who submits positive information substantiating the need for such review, and a reasonable period of time has elapsed since the imposition of the definitive anti-dumping duty and upon such review, the designated authority shall recommend to the Central Government for its withdrawal, where it becomes 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 or varied and is therefore no longer warranted.
(1B) Notwithstanding anything contained in sub-rule (1) or (1A), any definitive anti-dumping duty levied under the Act, shall be effective for a period not exceeding five years from the date of its imposition, unless the designated authority comes to a conclusion on a review initiated before that period on its own initiative or upon a duly substantiated request made by or on behalf of the domestic industry, within a reasonable period of time prior to the expiry of that period, that expiry of the said anti-dumping duty is likely to lead to continuation or recurrence of dumping and injury to the domestic industry] (2) Any review initiated under sub-rule (1) shall be concluded within a period not exceeding twelve months from the date of initiation of such review.Page 4 of 16 C/SCA/5798/2018 ORDER
(3) The provisions of rules 6, 7, 8, 9, 10, 11, 16, 17, 18, 19 and 20 shall be mutatis mutadis applicable in the case of review."
4.02. Mr.Mihir Joshi, learned Senior Advocate appearing on behalf of the respective petitioner emphasised upon "substantiated request made by or on behalf of the domestic industry, within a reasonable period of time prior to the expiry of that period, that the expiry of the said anti-dumping duty is likely to lead to continuation or recurrence of dumping and Injury to the domestic industry."
4.03. Thus, as it was urged on behalf of the respective petitioner that the application dated 29/1/2018 fulfilled the basic requirement of moving the designated authority for urging it to initiate Sunset review by producing cogent and substantive material which required to be viewed in a proper perspective by the authority to satisfy themselves that there exists a requirement of Sunset Review.
4.04. Mr.Mihir Joshi, learned Senior Advocate appearing on behalf of the respective petitioner invited attention of the Court to the impugned order dated 5/4/2018 and indicated therefrom that the respondent has, in fact, incorrectly concluded de-hors the facts and material on record for rejecting the prayer for initiating Sunset Review. The respondent No.2, in fact, was not required to pronounce upon the recurrence of injury at the stage when it was merely called upon to appreciate the substantiated request for initiating Sun- set Review application moved by and on behalf of the Page 5 of 16 C/SCA/5798/2018 ORDER domestic industry.
4.05. Mr.Mihir Joshi, learned Senior Advocate appearing on behalf of the respective petitioner reiterated at the cost of repetition that the principle of determination of injury and para (vii) thereof to indicate that the authority has not adverted thereto in a proper prospective.
4.06. Mr.Mihir Joshi, learned Senior Advocate appearing on behalf of the respective petitioner invited attention of the Court to the decision of the Hon'ble Supreme Court in the case of Union of India and another Versus Kumho Petrochemicals Company Limited and another, reported in (2017) 8 SCC 307 and laid special emphasis upon the situation which is likely to be created on account of the lapse of time in issuing Notification. Emphasis was laid on paragraph Nos.39, 40 and 43 of the aforesaid decision. The relevant paragraph No.43 of the aforesaid decision deserves to be set out, which reads as under :-
"43. Two things which follow from the reading of Section 9-A(5) of the Act are that not only the continuation of duty is not automatic, such a duty during the period of review has to be imposed before the expiry of the period of five years, which is the life of the notification imposing anti- dumping duty. Even otherwise, Notification dated 23-1-2014 amends the earlier Notification dated 2-1-2009, which is clear from its language, and has been reproduced above. However, when Notification dated 2-1-2009 itself had lapsed on the expiry of five years i.e. on 1-1-2014, and was not in existence on 23-1-2014 question of amending a non-existing notification does not arise at Page 6 of 16 C/SCA/5798/2018 ORDER all. As a sequitur, amendment was to be carried out during the lifetime of the Notification dated 2-1-2009. The High Court, thus, rightly remarked that the Notification dated 2-1-2009 was in the nature of temporary legislation and could not be amended after it lapsed."
Thus, the above observations leaves no room for doubt and makes it abundantly clear that the lapse of Notification of anti-dumping even while Sunset Review is not initiated but if the Notification for Anti-Dumping Duty and extension thereof is not issued, then, lapse of time would not permit any further extension and hence, the initiation of Sunset Review is to be simultaneous with an additional Notification for extending and continuing Anti-Dumping Duty has to be issued on or before 17/4/2018.
4.07. Mr.Mihir Joshi, learned Senior Advocate appearing on behalf of the respective petitioner, therefore, invited attention of the Court to similar situation which had arisen before the Delhi High Court wherein the party seeking Sunset Review and continuation of Dumping moved the Delhi High Court challenging similar order of designated authority declining their substantiated request for initiating Sunset Review and the Delhi High Court in such a situation not only did issue directions for initiating Sunset Review but also issued interim direction for issuing Notification for extending and continuing of Anti-Dumping Duty on the strength that the Sunset Review was ordered to be initiated.
4.08. Mr.Mihir Joshi, learned Senior Advocate appearing on behalf of the respective petitioner, in all fairness, thereafter invited attention of the Court to final outcome of the Page 7 of 16 C/SCA/5798/2018 ORDER proceedings which ultimately culminated into rejection of the petition. The relevant paragraphs of the interim order in the case of Aarti Drugs Ltd. Versus Designated Authority, Director General of Anti-Duty and allied Duties, reported in 2017 (354) ELT 161 (Delhi) deserves to be set out in order to appreciate the controversy before the Court, which are reads as under :-
"1. The challenge in the writ petition is to the order dated 22nd August,2017 passed by the Designated Authority ('DA') in the Directorate General of Anti-Dumping & Allied Duties, Ministry of Commerce and Industry, Government of India declining to initiate a Sun Set Review ('SSR') concerning continuation of Anti-Dumping Duty (ADD) on imports of 'Metronidazole' originating in or exported from China to India.
2. When the writ petition was listed for hearing on 25th August,2017, this Court passed the following order:
"1. Notice. Mr.Sanjeev Narula, learned CGSC, accepts more notice for the respondents.
2. The issue raised in the present petition, which is a challenge the decision of the Designated Authority ('DA') declining to initiate a Sun Set Review ('SSR'), is already being considered by this Court in W.P (C) No.146/2017 and batch. In that case, on 11th January,2017, by way of an interim direction, the Court had directed the respondents to initiate SSR in both the petitioner's cases in the course of the day as the period of the original Anti-Dumping Duty Page 8 of 16 C/SCA/5798/2018 ORDER (ADD) notification was expiring on that very day.
The Court further stipulated that, the SSR notification shall clearly state that the proceedings would be subject to the final outcome of the writ petition. The said writ petitions are, in fact, being finally heard by this Court. They are listed for further hearing on 6th September,2017.
3. Considering that the day of expiry of the Anti-Dumping Duty ('ADD') in the present case is 29th August,2017, the Court directs the respondents to initiate the SSR in the petitioner's case not later than 29th August,2017. The SSR notification shall clearly state that the proceedings would be subject to the final outcome of the writ petition. This order is without prejudice to the rights and contentions of the parties and will continue till further orders.
4. As regards the question of continuation of the ADD, Mr.Sandeep Sethi, the learned Senior Counsel for the petitioner, relies on the decision of the Supreme Court in Union of India V/s. Kumho Petrochemicals Company Limited - 2017(351) E.L.T. 65 (S.C.). Learned counsel for the respondents seeks time for instructions.
5. List on 29th August, 2017.
6. Order Dasti under the signature of the Court Master."
3. The present application was listed today to consider whether the ADD that was imposed by the Notification No.40/2012- Customs, dated 30th August,2012 and which expires today, i.e. 29th Page 9 of 16 C/SCA/5798/2018 ORDER August,2017, should be continued as a consequence of this Court having directed the respondents to initiate the SSR.
4. In the impugned order dated 22nd August,2017, the DA has, after examining the petitioner's application under the Customs Tariff (Identification, Assessment and Collection of Anti-Dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995 ('Anti-Dumping Rules'), observed prima facie as under:
"(a) The subject goods has been imported in significant amounts by the applicant during the POI;
(b) The information and data provided in the application regarding injury; threat of injury;
and casual link between dumped import and injury and taking into account other relevant factors, including the volume of dump imports, their effect on the price, etc. in accordance with the principles set out in Annexure-II of the Rules do not evidence any injury to the DT;
(c) sufficient evidence has not been provided to conclude that there was a likelihood of injury recommencing if the existing Anti-Dumping duty is allowed to lapse."
13. In the present case, however, the petitioner representing the domestic industry has approached the Court prior to the actual cessation of the Add under the original notification which is why the Court has placed the matter for hearing today itself. There is Page 10 of 16 C/SCA/5798/2018 ORDER no delay in the petitioner approaching the Court. The impugned order is dated 22nd August,2017 and the present petition was filed immediately thereafter and heard first on 25th August,2017.
14. Having, by an interim order, directed the initiation of the SSR subject to the final outcome of the writ petition, the question that arises is whether again by an ad interim order, the Court should direct the continuation of ADD. The Court is conscious that under Section 9A of the CTA, it is the Central Government that has to take a call whether it wants to initiate the SSR and again whether it wants to continue the ADD. However, that very decision of the Central Government taken in the context of Section 9A of the CTA is undoubtedly subject to judicial review.
15. The question that then arises is whether the petitioner having made out a prima facie case which weighted with the Court to persuade it to direct the initiation of the SSR as an interim measure, can be refused the consequential relief of continuation of ADD in the circumstances that the petitioner points out.
16. On a perusal of the impugned order dated 22nd August,2017, the Court finds that the conclusions reached by the DA, which have been summarized hereinbefore, do not prima facie appear to have accounted for the detailed statistics placed before the DA by the petitioner some of which have been referred to earlier by the Court. In particular, the possibility of the undercutting of the price at which the produce may be sold by the domestic industry has not been adverted to by the DA. Also, the present annual capacity of the entities in China PR which are utilized Page 11 of 16 C/SCA/5798/2018 ORDER and which far exceed the Indian demand of 2200 MT per year does not appear to have been discussed by the DA.
17. The other ground, viz, that petitioner having itself imported the product, cannot be considered to be a domestic industry appears to be contrary to the DA's own conclusion in the earlier SSR which th culminated in the Final Findings dated 4 April,2006.
18. It appears to the Court that the factors that should weigh with the Central Government both for the initiation of the SSR and for continuation of ADD cannot be said to be unconnected. The Court is satisfied that a prima facie case does exist in favour of the petitioner for continuation of the ADD.
19. Also of some significance is the question of balance of convenience. Mr.Seth is right in his submission that the loss that the domestic industry might suffer on account of the cessation of the ADD cannot possibly be compensated if later it is held that the SSR ought to have been initiated by the Central Government and the ADD ought to have been continued. In this context, it must be understood that the continuation of the ADD is not for an indefinite period. Even in terms of the 2nd Proviso to Section 9A(5) of the CTA, the ADD can continue only for a period extending one year pending the outcome of the SSR. The hiatus that might be caused as a result of the SSR not coming to a conclusion and there being a possibility of further continuation of the ADD has been touched upon by the Supreme Court in its decision in Kumho.
20. Further, as far is the present case is concerned, Page 12 of 16 C/SCA/5798/2018 ORDER the Court is satisfied that the balance of convenience in directing continuation of the ADD pending the conclusion of the SSR subject, of course, to the outer limit of one year as stipulated in the 2nd proviso to Section 9A(5) of the CTA, is in favour of the petitioner. The Court would like to add that, by way of balancing the equities, in the event ultimately it is found that the decision of the Central Government not to initiate the SSR was correct, the ADD collected from the importers of the product from China PR during the period of the SSR can be refunded to such importers.
21. Accordingly, the Court directs that the ADD that was initiated by Notification No.40/2012, dated 31st August, 2012 will continue till the conclusion of the SSR initiated by the Central Government on the direction of this Court by the order dated 25th August,2017. Needless to state that the continuation of the ADD will be only till such time, the SSR continues and in any event will not exceed the one year period stipulated in the 2nd Proviso to Section 9A(5) of the CTA. In other words, if the SSR concludes earlier than 1 year, obviously, the ADD will not continue beyond that. The consequential notification in terms of this order will be issued by the Central Government today itself."
5.00. The Court was of the prima facie view that let the advance copy of the present petitions be served upon the learned Standing Counsel for the Union of India at least so that some instructions may be obtained in respect of the prayers made in these petitions. Accordingly, hearing was postponed to 2:30 PM i.e. after Lunch and Mr.Parth Bhatt, learned Page 13 of 16 C/SCA/5798/2018 ORDER Standing Counsel appeared on behalf of the Union of India and urged before the court that if the hearing is postponed for a further period of sometime today itself, he may try to receive instructions from the concerned authority. Accordingly, hearing was postponed. However, at the fag-end of the day, Mr.Bhatt, learned Standing Counsel reported that despite his attempts he could not receive any instructions from the concerned authority.
5.01. We have gone through the application dated 29/1/2018 and noted the contentions based thereupon and we have also perused the order impugned which prima facie satisfies us to observe that Mr.Mihir Joshi, learned Senior Advocate appearing on behalf of the respective petitioner is justified in submitting that the respondent No.2 prima facie appeared to have undertaken the basic task of assessing the material and has recorded at a place that there exist some increase in import and dumping but the factum of profit without taking into consideration the relevant factors have weighed with him in rejecting the application.
5.02. We have no doubt in our mind qua availability of judicial review of such a decision and hence when judicial review is warranted, it is also required to be seen to it that the same exercise may not result into empty formality or futility and create an irretrievable situation. The Court is also mindful of the fact that court by granting relief would be directing the authorities to continue Anti-Dumping Duty and to initiate Sunset Review proceeding without there being any opportunity of being heard to the otherside, but at the sametime, looking to the dearth of time and when the Page 14 of 16 C/SCA/5798/2018 ORDER petitioners cannot be held to be in any way contributory in passage of time, as they have approached the Court within time, it becomes Court's duty to see to it that balance of convenience is struck so as to avert any irreparable injury to eitherside. We, therefore, are inclined to make some orders as it was made by the Division Bench of the Delhi High Court in the aforesaid decision in similar situation and grant ad-interim relief in terms of para 23(A-1).
6.00. RULE, returnable on Under the circumstances, 19/4/2018. In the meantime, there shall be ad- interim relief in terms of para 23(A-1), which reads as under :-
"23.(A-1). Pending admission and final hearing of this Petition, this Hon'ble Court be pleased to direct the Respondent No.2 to initiate Sunset Review investigation under the provisions of Section 9A(5) of the Act read with Rule 23(1B) of the Rules on or before 16.04.2018 and further direct the Respondent No.1 to issue an appropriate notification in terms of 2nd proviso to Section 9A(5) of the Act for extension/continuation of the Duty imposed by way of Customs Notification dated 18.04.2013 for a period not exceeding 1 year pending the outcome of Sunset Review before the expiry of the period of original notification, that is, on or before 17.04.2018."Page 15 of 16 C/SCA/5798/2018 ORDER
For safeguarding the interest of those who are likely tobe affected by this order, we direct the concerned respondents to make it explicitly clear to all the concerned that, the Notification/s that may be issued pursuant to our this order would be subject to result of these petitions and will entail the refund of duty that may be levied in case of failure of the petitioners in these petitions.
As this order is passed without there being any opportunity of being heard to the concerned, it goes without saying that it would be open to the respondents and those who are likely to be affected by this order to approach this Court even before the returnable date for vacation and/or modification of the same.
Direct Service is Permitted.
Sd/-
(S.R.BRAHMBHATT, J) Sd/-
(A.G.URAIZEE, J) Rafik...
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