TaxTMI 
TaxTMI 
2021 (1) TMI 1305
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..... JUDGMENT (UJJAL BHUYAN, J.): Facts and reliefs sought for in the two writ petitions being identical, those were heard together and are being disposed of by this common judgment and order. 2. We have heard Mr. Rohan Shah, learned counsel for the petitioner in Writ Petition (L) No. 4058 of 2020 and Mr. Darius Shroff, learned senior counsel for the petitioner in Writ Petition (L) No. 4079 of 2020; Mr. Pradeep S. Jetly, learned senior counsel for respondent Nos. 1, 2 and 3 in Writ Petition (L) No. 4058 of 2020 and for respondent Nos. 1 and 2 in Writ Petition (L) No. 4079 of 2020; and Ms. Meenakshi Arora, learned senior counsel for respondent No. 4 in Writ Petition (L) No. 4058 of 2020 and for respondent No. 3 in Writ Petition (L) No. 4079 of 2020. 3. Both the writ petitions have been filed under Article 226 of the Constitution of India assailing the legality and validity of the final findings dated 01.09.2020 rendered by the Special Secretary and Designated Authority, Directorate General of Trade Remedies, Department of Commerce, Ministry of Commerce & Industry, Government of India in Case No.(OI) 14 / 2019. 4. By the said findings, the Designated Authority has recommended imp....
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....ically acknowledged Expanded Polymer Systems as an interested party. 5.6. Responding to the non-disclosure statement, Expanded Polymer Systems filed its written submissions on 21.08.2020 itself. It was pointed out that the product imported by Expanded Polymer Systems and the goods manufactured by Manali Petrochemicals are not like article; technology involved in the manufacturing process of the two are different; besides there being significant variations in the characteristics of the two products. It was also contended that no injury was caused to Manali Petrochemicals by the import of the product. It had continued to show robust growth, return on capital employed and profitability. Another contention of Expanded Polymer Systems was that there is no causal link between the increased imports and purported serious injury to Manali Petrochemicals. Levy of anti-dumping duty would have serious and social repercussions on the economy. Attempt by Manali Petrochemicals for levy of anti-dumping duty on the product is an abuse of the anti-dumping duty provisions to perpetuate a monopoly; Manali Petrochemicals being the only company manufacturing the product. Various materials and evidence ....
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....by an email dated 07.09.2020 drew the attention of respondent No. 1 to the fact that even though it was treated as an interested party in various correspondences related to the proceedings, it was not shown or included as an interested party in the impugned final findings. However, no response has been received to this email. 5.11. Indian Polyurethane Association which represents about 500 members including the petitioner - Expanded Polymer Systems submitted a representation on 28.09.2020 to respondent No. 2 giving reasons as to why anti-dumping duty as recommended by respondent No. 1 should not be imposed on the product under consideration on imports from the subject countries in the larger public interest. 5.12. Assailing the impugned final findings recorded by respondent No. 1, the present writ petition has been filed by Expanded Polymer Systems seeking the following reliefs:- (i) to set aside and quash the final findings dated 01.09.2020; (ii) for a direction to respondent No. 2 not to issue any notification on the basis of the final findings dated 01.09.2020; and (iii) for a direction to respondent No. 2 to grant an opportunity of hearing to the petitioner before takin....
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.... During the course of the investigation, respondent No. 1 issued a disclosure statement purportedly disclosing essential facts of investigation but petitioner Dow Chemical has contended that in the disclosure statement, respondent No. 1 (Designated Authority) had failed to consider and appreciate, rather excluded, several factors consistently highlighted by Dow Chemical from consideration. It is stated that Dow Chemical together with respondent Nos. 4, 5 and 6 had highlighted the factum of non-disclosure of essential facts under consideration. 6.6. In response to the disclosure statement, Dow Chemical along with respondent Nos. 4, 5 and 6 pointed out various factors which impeded their right to provide meaningful submissions including computations and workings used by the Designated Authority for arriving at the figures of normal value, export price and landed value. The methodology used was not informed to the petitioner. Another aspect highlighted by the petitioner was insufficient time provided by the Designated Authority to file comments under disclosure statement. Besides, it was highlighted that no such levy of anti-dumping duty was sought for by Manali Petrochemicals on imp....
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....held on 05.03.2020 whereafter Expanded Polymer Systems filed its written submission. On 25.06.2020 i.e., after 281 days of initiation of investigation, a new Designated Authority Shri. Bidyut Behari Swain was appointed in place of the earlier Designated Authority Shri. Bhupinder Singh Bhalla. Thereafter fresh personal hearing was granted by the new Designated Authority on 15.07.2020 which was attended by the petitioner. Petitioner again filed fresh written submission on 20.07.2020. Designated Authority thereafter issued disclosure statement on 21.08.2020 which was served on the petitioner. Designated Authority asked the interested parties to offer their comments latest by 27.08.2020. In the disclosure statement, Designated Authority noted that the petitioner had not substantiated its claim on the issue of 'like article' besides not furnishing any technical or consumer evidence. Therefore, in its written submissions submitted on 27.08.2020 which was duly acknowledged, petitioner provided detailed technical and consumer evidence along with other materials. Designated Authority issued an email on 27.08.2020 at 14:31 hours stating that the non-confidential version of section IV....
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....20 to respondent No. 2 providing detailed reasons as to why anti-dumping duty should not be levied on the product on being imported from the subject countries. He submits that the Association has raised various issues including the economic changes caused by the pandemic and the resultant lock-down; how any levy of anti-dumping duty would be against the larger public interest; and misuse of anti-dumping duty provisions by Manali Petrochemicals for over 18 years thereby trying to insulate itself from any competition. Mr. Shah submits that inspite of petitioner - Expanded Polymer Systems filing objections and written submissions besides providing enough evidence and materials controverting the claim of Manali Petrochemicals, in the impugned findings it has not been included by the Designated Authority as an interested party which itself is indicative of the hurried and biased approach of the Designated Authority. 9. While supporting the stand of Mr. Shah, Mr. Shroff, learned senior counsel appearing for the petitioner - Dow Chemical has assailed the impugned findings on the following grounds:- (1) Non-disclosure of essential facts in the disclosure statement; In this connection, h....
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....of Article VI of General Agreement on Tariffs and Trade, 1994 which mandates that disclosures should take place in sufficient time for the parties to defend their interest. (4) The disclosure statement and the impugned findings display arbitrariness on the part of the Designated Authority and his biased attitude. Manali Petrochemicals had also sought sunset review investigation against imports of the product from Singapore. The period of investigation in both the investigations was the same; applicant in both the investigations was the same and the product under consideration was also the same. In the investigation pertaining to Singapore, conclusion of the Designated Authority was that the entire injury is attributable to exports from Singapore. It was thereafter the present investigation was initiated but the impugned findings make no mention of the injury factors attributable to imports from Singapore. (5) Designated Authority has not conducted verification in accordance with the practice and procedure as prescribed; (6) Computation of landed value is in contravention of law; 9.1. Apart from the above, Mr. Shroff has pointed out that there are inherent contradictions in t....
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....duced in writing. Besides, anti-dumping investigations are time bound and must be completed within a period of one year from initiation. It is submitted that when the first oral hearing was conducted on 04.03.2020, petitioner i.e., Expanded Polymer Systems did not participate in the same though it participated in the second oral hearing on 15.07.2020 which was necessitated due to change in the Designated Authority. However, it had filed only a brief written submission on 20.07.2020 without providing any evidence and without substantiating the submissions made. Forwarding of disclosure statement does not mean that parties can lead fresh evidence again before the Designated Authority as is being contended by the petitioner. On 27.08.2020, petitioner sought to give fresh evidence for the first time. Designated Authority could not have allowed the petitioner to place new evidence on record for the first time, that too, just 21 days before the investigation completion date. Reasonable opportunity of hearing does not mean that investigation carried out by the Designated Authority can be continued ad infinitum beyond the statutory time frame for conclusion of investigation. 11.3. On the ....
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....s to be carried out within a definite time-frame. There are enough checks and balances within the statutory framework to rule out any mischief. 11.7. Regarding the writ petition filed by Dow Chemical, she submits that the same is not maintainable as it is pleading a case on behalf of respondent Nos. 4, 5 and 6. In fact, the writ petition appears to be collusive. She has also raised questions about the manner in which Dow Chemical has been operating. According to her, every time a duty is levied against a country, Dow Chemical starts selling from a related producer in another country. 11.8. Finally, she submits that issues raised by the petitioner are questions of fact which may not be gone into by the Writ Court under Article 226 of the Constitution of India. That apart, section 9C of the Act provides for appeal against the impugned findings of the Designated Authority before the CESTAT. Such appeal is an effective and efficacious remedy to a person who feels aggrieved by such recommendation. When petitioners have an adequate and efficacious alternative remedy, the Writ Court may not invoke its extra- ordinary jurisdiction to determine a lis centering around levy of anti-dumping ....
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....tioner - Dow Chemical is the importer of the product and had participated in the investigation. Petitioner has not claimed any relief against respondent Nos. 4, 5 and 6 who have been added as proforma supporting parties. They have filed letter of support on 07.10.2020 authorizing the petitioner to refer to and rely upon data and information that pertains to the said respondents and relates to determination of dumping margin or injury margin. Petitioners and respondent Nos. 4, 5 and 6 have all acted together before the Designated Authority. Question of any collusion does not arise. All relevant facts have been disclosed in the writ petition. Full and complete disclosures were also made before the Designated Authority. He submits that when there is clear violation of the principles of natural justice, the Writ Court would certainly invoke its jurisdiction as in such a case the alternative remedy would not be efficacious; besides it would be a jurisdictional issue. 14. Submissions made by learned counsel for the parties have been duly considered. Also perused the materials on record and considered the judgments cited at the bar. Historical background and statutory framework 15. The....
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....determines that the effect of the dumping or subsidization, as the case may be, is such as to cause or threaten material injury to an established domestic industry, or is such as to retard materially the establishment of a domestic industry. Of course, under sub-paragraph (b), the contracting parties may waive off the requirement of sub-paragraph (a) so as to permit a contracting party to levy an anti-dumping or countervailing duty on the importation of any product for the purpose of offsetting dumping or subsidization which causes or threatens material injury to an industry in the territory of another contracting party exporting the product concerned to the territory of the importing contracting party. 15.3. Paragraph 7 says that there shall be a presumption that a system for stabilization of domestic price or of the return to domestic producers of a primary commodity, independently of the movements of export prices, which results at times in the sale of the commodity for export at a price lower than the comparable price charged for the like commodity to buyers in the domestic market would not result in material injury if it is determined by consultation amongst the contracting p....
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....ng to the domestic producers as a whole of the like products or to those of them whose collective output of the products constitutes a major proportion of the total domestic production of those products. 16.4. Initiation and subsequent investigation is the subject of article 5. Article 5.1 says that except as provided for in paragraph 6, an investigation to determine the existence, degree and effect of any alleged dumping shall be initiated upon a written application by or on behalf of the domestic industry. Such an application shall include evidence of (a) dumping, (b) injury and (c) a causal link between the dumped imports and the alleged injury. Simple assertion unsubstantiated by relevant evidence cannot be considered sufficient to meet the requirements of the said article. What information should be provided by the applicant is mentioned (article 5.2). Article 5.3 says that the authorities shall examine the accuracy and adequacy of the evidence provided in the application to determine whether there is sufficient evidence to justify initiation of an investigation. Further, as per article 5.4, an investigation shall not be initiated unless the authorities have determined on the....
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....ticle 6.6, the authorities shall satisfy themselves as to the accuracy of the information supplied by the interested parties. Requirement of article 6.9 is that the authorities shall, before a final determination is made, inform all interested parties of the essential facts under consideration which form the basis of the decision. Such disclosure should take place in sufficient time for the parties to defend their interest. 16.6. Article 9 deals with imposition and collection of anti-dumping duties. As per article 9.1, the decision whether or not to impose an anti-dumping duty in cases where all requirements for the imposition have been fulfilled, and the decision whether the amount of the anti-dumping duty to be imposed shall be the full margin of dumping or less, are decisions to be made by the authorities of the importing member. Article 9.3 clarifies that the amount of anti-dumping duty shall not exceed the margin of dumping. 16.7. Article 10 makes it clear that anti-dumping duty shall only be applied to products which enter for consumption after the decision taken under article 9.1 comes into force. 16.8. Article 11 speaks about duration and review of anti-dumping duties. I....
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.... paragraph 8 of article 6. 17. Following the above agreement, section 9A was inserted in the Customs Tariff Act, 1975, India being a signatory to GATT and the above agreement. Section 9A of the Customs Tariff Act, 1975 (already referred to as 'the Act') was originally inserted by the Customs Tariff (Second) Amendment Act, 1982 and substituted by the Customs Tariff (Amendment) Act, 1995 with effect from 01.01.1995. The 1995 amendment to section 9A was apparently made in pursuance to Article VI of the General Agreement on Tariffs and Trade, 1994 which permitted anti-dumping measures as an instrument of fair competition. Section 9A deals with anti-dumping duty on dumped articles. Sub-section (1) makes it clear that where any article is exported by an exporter or a producer from any country or territory to India at less than its normal value, then, upon the importation of such article into India, the central government may by notification in the Official Gazette impose an anti-dumping duty not exceeding the margin of dumping in relation to such article. Explanation to sub-section (1) defines the expressions 'margin of dumping', 'export price' and 'normal value'. Sub-section (2) says t....
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....ounded on the basis that a foreign manufacturer sells below the normal value in order to destabilize domestic manufacturers. Dumping, in the short term, may give some transitory benefits to the local customers on account of lower priced goods but in the long run destroys the local industries which may have a drastic effect on future prices. Therefore, purpose of section 9A is to maintain a level-playing field and prevent dumping while allowing for healthy competition. The purpose is not protectionism but to prevent unfair trade practices. 17.2. While section 9AA provides for refund of anti-dumping duty in certain cases, section 9B clarifies that no article shall be subjected to both countervailing duty and anti-dumping duty to compensate for the same situation of dumping or export subsidization. As per sub-section (2) of section 9B, the central government is empowered to make rules providing for the manner in which investigation may be made and the factors to be taken into consideration while making such investigation. 17.3. Section 9C deals with appeal. As per sub-section (1), an appeal against the order of determination or review thereof regarding the existence, degree and effe....
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....ate Tribunal may, after giving the parties to the appeal an opportunity of being heard, pass such order thereon as it thinks fit, confirming, modifying or annulling the order appealed against. (4) The provisions of sub-sections (1), (2), (5) and (6) or Section 129-C of the Customs Act, 1962 shall apply to the Appellate Tribunal in the discharge of its functions under this Act as they apply to it in the discharge of its functions under the Customs Act, 1962. (5) Every appeal under sub-section (1) shall be heard by a Special Bench constituted by the President of the Appellate Tribunal for hearing such appeals and such Bench shall consist of the President and not less than two members and shall include one judicial member and one technical member." 18. In exercise of the powers conferred by sub-section (6) of section 9A and sub-section (2) of section 9B of the Act, the central government has made the Customs Tariff (Identification, Assessment and Collection of Anti- dumping Duty on Dumped Articles and for Identification of Injury) Rules, 1995 (already referred to as "the Anti-dumping Duty Rules"). 18.1. Rule 2 defines various words and expressions used in the Act and in the Anti....
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....e investigation. 18.6. Rule 7 deals with confidential information. If the Designated Authority is satisfied with the confidentiality of the application or any other information provided to it on a confidential basis by any party in the course of the investigation, no such information shall be disclosed to any other party without specific authorization of the party providing such information. 18.7. As per rule 8, the Designated Authority shall during the course of the investigation satisfy himself as to the accuracy of the information supplied by the interested parties upon which his findings are based. 18.8. While determination of normal value, export price and margin of dumping are dealt with in rule 10, determination of injury is dealt with in rule 11. Since these two provisions are relevant, those are extracted hereunder:- "10. Determination of normal value, export price and margin of dumping.- An Article shall be considered as being dumped if it is exported from a country or territory to India at a price less than its normal value and in such circumstances the Designated Authority shall determine the normal value, export price and the margin of dumping taking into account,....
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....ase of imports from specified countries, causes or threatens material injury to any industry established in India or materially retards the establishment of any industry in India; (iii) a causal link, where applicable, between the dumped imports and injury; (iv) whether a retrospective levy is called for and if so, the reasons therefor and date of commencement of such retrospective levy; and - secondly, (b) recommending the amount of duty which, if levied, would remove the injury where applicable, to the domestic industry. Once final findings are recorded, the Designated Authority shall issue a public notice. 18.12. As per the scheme of rule 18, more particularly sub-rule (1), the central government may, within three months of the date of publication of final findings by the Designated Authority under rule 17, impose by notification in the Official Gazette upon importation into India of the article covered by the final findings, anti-dumping duty not exceeding the margin of dumping as determined under rule 17. 18.13. From a reading of rule 18(1), we find that the word 'may' has been used while conferring jurisdiction on the central government to levy anti-dumpin....
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....t be necessary to delve into the details of the above four parameters including the modalities for their determination, suffice it to say that the above four parameters are to be evaluated for the period of investigation considered in the investigation. Discussions and Deliberations 21. Having surveyed the statutory framework as above, we may now advert to the impugned final findings dated 01.09.2020. In the introductory portion of the final findings, it is mentioned that Manali Petrochemicals had filed an application before the Designated Authority under the Act read with the Anti-dumping Duty Rules for imposition of anti-dumping duty on the imports of Flexible Slabstock Polyol from the Kingdom of Saudi Arabia and the United Arab Emirates. On the basis of sufficient prima facie evidence submitted by Manali Petrochemicals, a public notice dated 18.09.2019 was published in the Gazette of India initiating the investigation. While detailing the procedure followed in the investigation, it is mentioned that the period of investigation was from 01.04.2018 to 31.03.2019 (12 months) though the injury investigation period covered three years i.e., 2015-16, 2016-17, 2017- 18 plus the perio....
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....Finding of the Designated Authority on this aspect is as under:- "12. In view of the above, the Authority holds that the production by the applicant constitutes 100% of total Indian production of the like product and that the application satisfies the requirements of 'standing' under Rule 5 of the AD Rules and constitutes 'Domestic Industry' (DI) in terms of Rule 2(b) of the AD Rules." 21.3. On the claim of confidentiality, the Designated Authority held that on being satisfied he had accepted confidentiality claims wherever warranted and accordingly those were not disclosed to other interested parties. However, he has stated that wherever possible, parties providing information on confidential basis were directed to provide sufficient non-confidential version of the information filed on confidential basis. 21.4. In so far normal value, export price and determination of dumping margin are concerned, it is stated that Designated Authority considered the views of the domestic industry and of the interested parties whereafter normal value, export price and dumping margin were determined and disclosed in the form of a table. Designated Authority observed that the dumping margins are....
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....s might effect the price level of the product in India but asserts that fair competition in the Indian market will not be reduced by anti-dumping measures. Thereafter Designated Authority concluded by recording his findings as under:- "a. The product under consideration has been exported to India from the subject countries below its associated normal value, thus resulting in dumping. b. The Domestic Industry has suffered material injury due to dumping of the product under consideration from the subject countries. c. The material injury has been caused by the dumped imports from the subject countries." 21.10. After recording the findings as above, Designated Authority took the view that imposition of definitive anti-dumping duty is required to offset dumping and injury and that the authority therefore considers it necessary to recommend imposition of anti-dumping duty on imports of the subject good from the subject countries whereafter the following recommendations have been made:- "109. In terms of provision contained in Rule 17(1)(b) read with Rule 4(d) of the Rules, the Authority recommends imposition of anti-dumping duty equal to the lesser of margin of dumping and the ....
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....le. Sub- section (2) thereof is illustrative. It says that such an appeal shall be filed within 90 days of the date of order under appeal, though extendable if the appellant satisfies the CESTAT that it was prevented by sufficient cause from filing the appeal in time. Admittedly, in both the petitions the challenge is to the final findings dated 01.09.2020 of the Designated Authority. As per the final findings, Designated Authority has concluded that the product under consideration has been exported to India from the subject countries below its normal value, thus resulting in dumping. Domestic industry has suffered material injury due to dumping and the material injury has been caused by the dumped imports. On the basis of such conclusions, Designated Authority has recommended to the central government that anti-dumping duty should be levied on the product imported from the subject countries. It has recommended that imposition of anti-dumping duty should be equal to the lesser of margin of dumping and the margin of injury, so as to remove the injury to the domestic industry. 26. Stricto sensu, the final findings of the Designated Authority is a recommendation. Such a recommendatio....
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....he intricacies of the above factors. 28. It is not that a Writ Court under Article 226 of the Constitution of India would shy away from determining such questions even if those are complex in the face of violation of the principles of natural justice but the moot point is that having regard to the nature of the lis and the complexities involved, Court is of the view that the aggrieved party should exhaust the remedy provided by the statute because the remedy of appeal provided will be adjudicated by a specialized body competent to deal with such intricate commercial disputes. 29. In the course of the hearing, we also found that in Designated Authority Vs. Sandisk International Limited, (2018) 13 SCC 402, Supreme Court set aside the judgment of the Delhi High Court which had interfered with the final findings of the Designated Authority. Noting that there are seriously disputed questions, it was held in the facts of the said case that the High Court was not justified in exercising its writ jurisdiction and in setting aside the final findings of the Designated Authority; rather the High Court should have asked the petitioner to await issuance of the final notification and to challe....