2019 (7) TMI 348 - HC - Customs

Gujarat High Court Orders Sunset Review in Anti-Dumping Case

The Court held that the Gujarat High Court had jurisdiction to entertain the petition due to the petitioner's manufacturing unit being located in Gujarat. ... ADD - Rejection of initiation sunset review for continuation of existing anti-dumping duty - extension for a further period of 5 years - imports of certain rubber chemicals viz.MBT, CBS, TDQ, PVI and TMT and PX-13 (6PPD) from China PR and Korea RP - rejection of application for sunset review based on absence of current injury - HELD THAT:- The competent authority has rejected the application for sunset review based on absence of current injury. This assumption is not proper. Impact of likelihood of injury is required to be looked into by the Designated Authority. Further one of the grounds is regarding the gap of demand and supply in the country. This is also not proper. Where gap of demand and supply exists, the imports are inevitable but that is not a justification for imports coming into India at unfair and dumped prices. In view of the information made available by the petitioner to the authority, it is clearly found that there is continuous dumping, in the present case and, therefore, the demand and supply gap is not the basis for allowing such import. It also appears from record that respondent no.2- authority has failed in appreciating the material and accompanying documents to the substantive application, on likelihood test and its parameters and has not considered essential facts such as (a) surplus capacities in exporting countries (b) inventories diverted to India at dumped prices, (c) volumes of export by exporting countries to other countries and (d) price attractiveness of the Indian market. The Court needs to be mindful of the fact that in any manner the exercise that is required to be undertaken is in light of the final statutory limit to complete the sunset review, as in any case, anti-dumping duty cannot exceed and continued after the statutory period of limitation is over, as provided under Section 9A (5) - Therefore, the Court is of the view that when the Court has elaborately discussed herein above, mere remand of the matter may consume avoidable time and that may affect the very process of sunset review as in that process the authority also will have to give sufficient time to all the concerned for putting forward their viewpoints and material to substantiate them. If sunset review is ordered, no harm is likely to cause to either side and it can be brought to its logical conclusion after complying with the provisions of law. While rejecting the application for sunset review, without appreciating the material placed in substantive application, the authority has rejected the petition at the threshold. It clearly transpires from the record that the authority has not considered various Rules regarding necessity of ascertaining the likelihood of continuation or recurrence of the dumping and injury to the domestic industries as would be seen from Rule 23 - the only requirement is substantive application or request on behalf of the domestic industries and only prima facie view is sufficient to initiate sunset review. In the present case, though the petitioner has provided sufficient prima facie information justifying initiation of investigation, the authority has not considered it in proper perspective. It is also pertinent to note that information relating to foreign producers and other interested parties could be made available only after investigation is initiated. In absence of initiation of any investigation, this information may not be available with the authority and with the petitioner. As there is sufficient and substantive material available for initiation of sunset review, the impugned order dated 24.12.2018 is set aside - respondent-authority is hereby directed to initiate sunset review and also suitably extend anti-dumping duty in accordance with the provisions of law - Petition allowed. Issues Involved:1. Territorial Jurisdiction2. Compliance with Section 9A(5) of the Customs Tariff Act and Rule 23(1B) of the Rules3. Examination of Material Evidence4. Likelihood of Injury and Dumping Continuation5. Procedural Lapses by Designated AuthorityIssue-wise Detailed Analysis:1. Territorial Jurisdiction:The petitioner argued that the Gujarat High Court has jurisdiction to entertain the petition since the petitioner's manufacturing unit is located in Gujarat. The respondent contended that the petition should be filed in Delhi or Mumbai. The Court held that since the manufacturing operations and potential injury are related to the factory in Gujarat, the cause of action arises within the jurisdiction of the Gujarat High Court.2. Compliance with Section 9A(5) of the Customs Tariff Act and Rule 23(1B) of the Rules:The petitioner filed an application for the initiation of a sunset review under Section 9A(5) read with Rule 23(1B), arguing the need for continuation of anti-dumping duty. The Court noted that the Designated Authority must initiate a review if a substantiated application is received, to ascertain the likelihood of continuation or recurrence of dumping and injury. The Authority's refusal to initiate the review was deemed a misreading of the law.3. Examination of Material Evidence:The petitioner provided extensive evidence demonstrating continued dumping and potential injury, including surplus capacities in exporting countries, significant exports at dumped prices, and price attractiveness of the Indian market. The Court found that the Designated Authority failed to consider this material adequately, particularly the recent decline in import prices and the surplus capacities in exporting countries.4. Likelihood of Injury and Dumping Continuation:The Court highlighted that the Designated Authority's decision was based on the absence of current injury, which is not the correct test for a sunset review. The Authority should have assessed the likelihood of recurrence of injury if the duties were lifted. The Court found that the petitioner had provided sufficient prima facie evidence to justify the initiation of a sunset review.5. Procedural Lapses by Designated Authority:The Court observed that the Designated Authority did not follow the procedural requirements under the Rules, such as calling for information from exporters and conducting a thorough examination of the evidence. The Authority's conclusion that current imports were necessary to fulfill the demand and supply gap, and that there was no likelihood of injury, was found to be perfunctory and not based on a proper assessment of the material provided by the petitioner.Conclusion:The Court set aside the impugned order dated 24.12.2018 and directed the Designated Authority to initiate a sunset review and extend the anti-dumping duty in accordance with the law. The Court emphasized the need for a thorough and fair examination of the evidence provided by the petitioner and adherence to the procedural requirements under the Customs Tariff Act and the Rules.