A 3-judge bench of the Supreme Court consisting of Justice Arun Mishra (since retired), Vineet Saran and S.Ravindra Bhat have in the judgment of the case – The Designated Authority (DA) & Others v. M/s the Andhra Petrochemicals Ltd., delivered on September 1, 2020, affirmed that access to judicial review is a valuable right conferred upon citizens and persons aggrieved; the Constitution arms the High Courts and the Supreme Court with powers under Articles 226 and 32.
The Supreme Court has balanced it comments on judicial review by adding a rider to its comments, stating that At the same time, barring exceptional features necessitating intervention in an ongoing investigation triggered by a complaint by the concerned domestic industry judicial review should not be exercised virtually as a continuous oversight of the Designated Authority (DA)’s functions. The Supreme Court has cautioned more than once, that judicial review is to be exercised in a circumspect manner, especially where the final findings are rendered by the DA. Directorate General of Anti-Dumping v. Sandi International (2018) 13 SCC 402; Association of Syntehtic Fibre Industries v. Apollo Tyres Ltd. (2010) 13 SCC 733.
In the judgment of the case-Reliance Industries Ltd. V. Designated Authority (DA) (2006) 10 SCC 368, it has been explained that industries built after independence with great difficulty should not be allowed " to be destroyed by unfair competition of some foreign companies. Dumping is a well-known method of competition, which is adopted by the foreign companies." The Court has also said that “The purpose of section 9-A of the Customs Tarff Act is, therefore, to maintain a level playing field and prevent dumping while allowing for healthy competition."
The DA, no doubt, follows a prescribed quasi-judicial procedure, where a determination on whether to impose or not to impose anti-dumping duty takes place (through a report)-Tata Chemicals v. Union of India (2008) 17 SCC 180, Automotive Tyers Manufacturers’ Association v. The D.A.(2011)2 SCC 258.However, this proceeding culminates with a recommendation; the Central Govt. finally decides whether to impose such a duty, the extent of such duty and its duration.
Under Rule 4, the DA is duty bound to conduct i) investigation of the existence, degree and effect of any alleged dumping in relation to imports of any article; (ii) identify the article(s) on which anti—dumping duty is to be imposed; (iii) submit findings provisional or otherwise to Central Govt.;(iv) determine the normal value , export price and the margin of dumping in relation to the article under investigation; and (v) determine the injury or threat of injury to an industry established in India or material retardation to the establishment of an industry in India consequent upon the import of article from specified countries.
Section 9-A of the Customs Tariff Act, and the procedure prescribed by the Rules of 1995,clearly disclose an intent that investigations should be completed within pre-determined time limits and the levy itself (which can be specific foreign exporter or country- or combination of both-) cannot be more than five years- which may, after due review in accordance with prescribed procedure , before expiry of the said period, be extended by another period of not more than five years.
These timelines are crucial; the DA is duty bound to follow them. The analysis of the particular market behaviour by the allegedly offending foreign exporters, involves sifting of great deal of evidence, such as manufacturing capacity, financial abilities, overall capacity of the country in the like field, prices and the margin of acceptable delinquent behavior , as well as domestic capacity, efficiency ,etc., while determining if an injury exists, the margin of such injury and its likely duration.
The judgment of the Supreme Court in Union of India v. Kumho Petrochemicals – (2017) 8 SCC 307 has noticed that as a signatory to the GATT and the Marrakesh Agreement, the anti- dumping rules are to be assimilated into domestic laws. The article 5.10 of Marrakesh Agreement is strict with respect to the timeline for taking up and conclusion of investigation within 12 to 18 months.Article10 empowers States to levy duties, with retrospective effect, only for a limited period (90 days subject to fulfillment of prescribed conditions) “prior to the date of application of provisional measures, when the authorities determine for the dumped product in question that’...his has been given effect to by Rules 17 and 20 of the Rules of 1995.
Keeping the imperative of completion of investigation within a pre-determined time-line, the guidelines contained in the Manual of operation for Trade Remedy Investigations (Period of Investigation and Injury Investigation period) as to the contemporaneousness of the data necessary to carry out the investigation, assume importance.
The rationale for these guidelines is self-evident: Any investigation carried out for past periods would be in all liklihood, result in minimal levy. For instance, if in 2020, investigation is initiated for the period 2013-14, with the object of determining anti-dumping, even if injurious behavior is found, the levy can be only of limited duration. Further, to levy duty for the period after findings are rendered, the POI would yield stale results, and cannot justify levy for later periods. Keeping this in mind, the DA, apparently, in the present case, having regard to Para 5.9 required Andhra Petro to furnish relatively contemporary data. Such an action cannot be termed as arbitrary. In this Court’s opinion, the impugned orders were plainly erroneous in chastising the DA, and even directing his replacement, for what appears to be his adherence to prescribed procedure.
The appeals in this case by special leave were filed to challenge the three impugned orders passed by Telangana High Court on August28, 2018, July 22, 2019 and August 5, 2019 respectively. These orders were in the context of respondent –writ petitioners’ –Andhra Petro’s challenge to the orders of the Designated Authority (DA), which related to the question of imposition of anti-dumping duty.
The SC is of the opinion that the impugned orders, that is, the order of August 28, 2018, issuing specific directions for ant-dumping investigation into article imported from EU; the order of July 22, 2019 (initiating contempt proceeding against the DA) and the order of August 5, 2019 have to be set aside. The first two orders are accordingly set aside. The third order of August 5, 2019, has been set aside , to the extent of its direction for replacement of the incumbent Designated Authority (DA).
