2019 (7) TMI 356 - HC - Customs

Court Quashes Final Finding, Orders Reconsideration

FARMSON PHARMACEUTICALS GUJARAT PVT. LTD. Versus UNION OF INDIA

The court quashed the Final Finding dated 29.01.2019, directing the Designated Authority (DA) to reconsider the matter, comply with principles of natural ... Seeking continuation of anti dumping duty (ADD) on import of Paracetamol from China PR - withdrawal of Anti dumping duty after sunset review - Section 9A(1) of the Customs Tariff Act, 1975 - Inadequate disclosure of essential facts thereby violating the principles of natural justice and denying the domestic industry an opportunity to defend its interests. - alternative remedy in terms of Section 9C of the Act - HELD THAT:- There is no inflexible proposition of law that in no case, the final findings of the Designated Authority can be subject to challenge under Article 226 of the Constitution of India. It is well settled principles of law that in a given case even if there is alternative remedy available, the High Court under Article 226 of the Constitution of India has power to issue necessary order. The petitioners have shown how there is diametrical conclusion reached in the Final Finding from the particulars and objections in the earlier part of Final Finding as well as Disclosure Statement, in his conclusion reached in the Final Finding in its submissions, which have been reproduced hereinabove. On analysis of the same, it appears that while considering the import as insignificant which constituted 98% of the total import and 6% of consumption in India which more than insignificant as defined in Rule 14(d) of the Rules has not been properly considered by respondent No.2 - according to Rule 14(d), the percentage has been given in the import of the like product. Now, admittedly, in view of para-62 at page No.265, the imports are 5.84% which is above the insignificant import as per Rule 14(d). Thus, the observations made by the DA is misreading of the facts and the DA has not properly appreciated this very observation while reaching in the conclusion in Final Finding and this fact is corroborated from the Final Finding itself. Thus, according to Rule 14(d), the percentage has been given in the import of the like product. Now, admittedly, the imports are 5.84% which is above the insignificant import as per Rule 14(d). Thus, the observations made by the DA is misreading of the facts and the DA has not properly appreciated this very observation while reaching in the conclusion in Final Finding and this fact is corroborated from the Final Finding itself. It appears from the Disclosure Statement as well as Final Finding that all the above facts are narrated therein, but without considering those facts and in diametrically opposed to the same, the DA has made conclusion. Thus, the submission of the petitioners that the DA has not properly appreciated the fact and has went beyond the evidence and information examined, is acceptable. It appears from the record that the conclusion arrived at by DA in Final Finding is not based on the observations made by him in Disclosure Statement as well as in Final Finding itself. Thus, there is lack of non-application of mind on the part of the authority concerned. The impugned Final Finding recorded in the Notification No.7/16/2018-DGAD dated 29.01.2019, cannot be said to be strictly in accordance with the provision of Rule 23 of the Rules, as there is nonadvertance to the material placed on record and there is noncompliance with the principle of natural justice as no requisite information was made available and the conclusions are diametrically opposed to the material on record. The respondent no.2 is hereby directed to undertake the exercise of recording its final finding afresh in accordance with the provisions of Rule-23 of the Rules and after affording full opportunity to the parties and complying with the principles of natural justice and respondent no.1 shall appropriately issue notification extending the anti dumping duty on the product in question, till the final findings are rendered. Petition allowed. Issues Involved:1. Inadequate disclosure of essential facts.2. Non-speaking order and failure to address all issues.3. Error in considering import as insignificant.4. Conclusions contrary to facts showing likelihood of injury.5. Current injury not a mandatory pre-condition in sunset review.6. Onus of showing absence of likelihood of dumping and injury.7. Vulnerability of domestic industry due to price sensitivity.8. Effective protection period for domestic industry.9. Violation of principles of natural justice.10. Duration of anti-dumping duty not a ground for termination.Issue-wise Detailed Analysis:1. Inadequate Disclosure of Essential Facts:The petitioners argued that the Designated Authority (DA) failed to disclose essential facts, violating principles of natural justice. They requested specific data and submissions, which were not provided, hindering their ability to defend their interests. The court observed that the DA must disclose all relevant facts used for arriving at its conclusions, as non-disclosure breaches natural justice principles.2. Non-Speaking Order and Failure to Address All Issues:The petitioners contended that the Final Finding was a non-speaking order, not addressing all issues raised. The court noted that the DA must provide a reasoned explanation under Rule 17 of the Anti-Dumping Rules. The Final Finding should reflect the DA's analysis and consideration of all submissions made by the parties.3. Error in Considering Import as Insignificant:The DA considered imports from China as insignificant, constituting 98% of total imports and 6% of consumption in India. The court found this contrary to Rule 14(d) of the Rules, which defines significant import volume. The DA's conclusion was based on a misreading of facts, as 5.84% imports are above the de minimis level.4. Conclusions Contrary to Facts Showing Likelihood of Injury:The petitioners argued that the DA's conclusions contradicted facts showing the likelihood of injury. The court observed that the DA acknowledged surplus capacities in China, significant inventories, and price attractiveness of the Indian market for Chinese exports. Despite these observations, the DA concluded no likelihood of injury, which the court found unreasonable and unsupported by evidence.5. Current Injury Not a Mandatory Pre-Condition in Sunset Review:The court noted that current injury is not a mandatory pre-condition in sunset review investigations under Section 9A(5) of the Act. The focus should be on the likelihood of continuation or recurrence of dumping and injury if the duty ceases.6. Onus of Showing Absence of Likelihood of Dumping and Injury:The petitioners argued that once prima facie evidence of likelihood of dumping and injury is provided, the onus shifts to exporters to show the absence of such likelihood. The court agreed, stating that the DA must consider all evidence and submissions before arriving at a conclusion.7. Vulnerability of Domestic Industry Due to Price Sensitivity:The petitioners highlighted the domestic industry's vulnerability due to price sensitivity. The court observed that the DA must consider the impact of price sensitivity on the domestic industry while determining the likelihood of injury.8. Effective Protection Period for Domestic Industry:The petitioners argued that the domestic industry was effectively protected only for the last five years, not since September 2001. The court noted that the duration of anti-dumping duty is not a relevant parameter for termination. The duty should continue as long as there is a likelihood of dumping and injury.9. Violation of Principles of Natural Justice:The court found that the DA violated principles of natural justice by not providing essential data and submissions to the petitioners. The DA must ensure that all parties have access to relevant information to defend their interests effectively.10. Duration of Anti-Dumping Duty Not a Ground for Termination:The court reiterated that the duration of anti-dumping duty cannot be a ground for its termination. The duty should be extended if there is a likelihood of continuation or recurrence of dumping and injury.Conclusion:The court quashed the impugned Final Finding dated 29.01.2019, directing the DA to reconsider the matter, comply with principles of natural justice, and provide all relevant information to the parties. The DA must record its findings afresh, considering all submissions and evidence, and the anti-dumping duty should be extended until the final findings are rendered.