Court orders continuation of Anti-dumping Duty until Sun Set Review conclusion. Government to issue notification promptly.

The Court directed that the Anti-dumping Duty (ADD) initiated in 2012 would continue until the conclusion of the Sun Set Review (SSR) initiated by the Central Government, with a maximum period of one year as per the Customs Tariff Act. The ADD would cease if the SSR concluded earlier. The Court ordered the Central Government to issue a notification in line with this decision immediately. The case was disposed of, with the main writ petition scheduled for further hearing.

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Issues Involved:
1. Challenge to the order declining to initiate a Sun Set Review (SSR) concerning continuation of Anti-dumping Duty (ADD).
2. Whether the continuation of ADD should be directed pending the outcome of the SSR.
3. Interpretation of the second proviso to Section 9A(5) of the Customs Tariff Act, 1975 regarding the continuation of ADD during SSR.

Issue-wise Detailed Analysis:

1. Challenge to the order declining to initiate a Sun Set Review (SSR) concerning continuation of Anti-dumping Duty (ADD):

The petitioner challenged the order dated 22nd August 2017 by the Designated Authority (DA) in the Directorate General of Anti-Dumping & Allied Duties, which declined to initiate an SSR on the continuation of ADD on imports of 'Metronidazole' from China. The DA's decision was based on several observations: significant imports by the applicant, lack of evidence of injury to the domestic industry (DI), and insufficient evidence to conclude a likelihood of injury if ADD were to lapse. The DA concluded that there was no significant rate of increase in dumped imports, no substantial increase in the capacity of the exporter, no price suppression or depression impact, and inadequate data on the stock in hand with Chinese exporters.

2. Whether the continuation of ADD should be directed pending the outcome of the SSR:

The petitioner argued that under the second proviso to Section 9A(5) of the Customs Tariff Act, 1975, if an SSR is initiated before the expiry of the ADD and has not concluded, the ADD should remain in force pending the outcome of the review for up to one year. The petitioner cited the Supreme Court decision in Union of India v. Kumho Petrochemicals Company Limited to support this contention. The Court, in its interim order on 25th August 2017, directed the respondents to initiate the SSR by 29th August 2017 and stated that the proceedings would be subject to the final outcome of the writ petition. The petitioner emphasized that the cessation of ADD would significantly harm the domestic industry, as evidenced by detailed statistics and previous findings by the DA.

3. Interpretation of the second proviso to Section 9A(5) of the Customs Tariff Act, 1975 regarding the continuation of ADD during SSR:

The Court considered the Supreme Court's observations in Kumho, which clarified that the continuation of ADD during an SSR is not automatic and requires a proper notification by the Central Government. The Court noted that the petitioner approached the Court before the actual cessation of the ADD and had made a prima facie case for the continuation of ADD. The Court found that the DA's conclusions did not account for detailed statistics provided by the petitioner, such as the potential price undercutting and the unutilized capacity of Chinese exporters. The Court emphasized that the balance of convenience favored the petitioner, as the loss to the domestic industry from the cessation of ADD could not be compensated if the SSR later justified the continuation of ADD.

Conclusion:

The Court directed that the ADD initiated by Notification No. 40/2012 dated 31st August 2012 would continue till the conclusion of the SSR initiated by the Central Government, subject to a maximum period of one year as stipulated in the second proviso to Section 9A(5) of the Customs Tariff Act, 1975. The continuation of ADD would cease if the SSR concluded earlier. The Court ordered the Central Government to issue a consequential notification in terms of this order immediately. The application was disposed of, and the main writ petition was listed for further hearing on 6th September 2017.

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