THE DESIGNATED AUTHORITY AND ORS. versus M/S. THE ANDHRA PETROCHEMICALS LIMITED on 1 September 2020

[2020] 7 S.C.R.

ATHE DESIGNATED AUTHORITY AND ORS.

v.

M/S. THE ANDHRA PETROCHEMICALS LIMITED

(Civil Appeal No. 3046-3048 of 2020)

BSEPTEMBER 01, 2020

[ARUN MISHRA, VINEET SARAN ANDS. RAVINDRA BHAT, JJ.]

Customs Tariff (Identification, Assessment and Collection ofAnti-dumping Duty on Dumped Article and for Determination ofCInjury) Rules, 1995 – 2(b) and 2(d) – Customs Tariff Act, 1975 –s.9A – The Respondent asserted that there was dumping of Butanolby Saudi Arabia and sought imposition of anti-dumping duty – TheDesignated Authority (DA) in its findings did not consider itappropriate to recommend levy of Anti-Dumping duty on the subjectDgoods from Saudi Arabia and terminated the investigation – VariousWrit Petitions were filed by respondent before the High Court fromtime to time – Before the High Court, the respondent contended thatit was a producer of 2-EH which is a ‘like article’ to 2-PH and INAand it satisfied the criteria u/r. 2(b) r/2. r. 2(d) of the Rules, 1995 tofile for imposition of anti-dumping duty – The first writ petitionEfiled by the respondent was allowed by the High Court and directedfresh evaluation – However, DA declined to initiate anti-dumpinginvestigation vide its order dated 05.03.2018 – In second writpetition, by order dated 28.08.2018 the High Court set aside theorder dated 05.03.2018 and directed the DA to take steps forFinitiating investigation to determine the anti-dumping in respect ofimport of INA – Pursuant thereto, the DA issued notices and alsosought updated data from the respondent as its initial applicationwas in 2016 – Another writ petition was filed by the respondentagainst the said order – In view of certain observations by the HighCourt, the DA was constrained to issue notice of investigation andGit also enlarged the period of investigation – By order dated22.07.2019, the High Court initiated suo motu contempt petitionproceedings against DA for disobedience of its order dated28.08.2018 and also ordered the replacement of the incumbent DA– According to the High Court, the action of DA seeking to enlargeHthe period of investigation in the second remand order when it did not find any such necessity in relation to the first remand orderclearly indicated its lack of bonafides – Before the Supreme Court,it was contended that DA acted within the framework of the lawand the consideration of contemporaneous if not the latest data isa pre-condition for launch of valid investigation by the DA – Held:The DA, no doubt, follows a prescribed quasi-judicial procedurewhere a determination on whether to impose or not to impose anti-dumping duty takes place – In the instant case, DA having regardto Para 5.9 of the Manual of Operation for Trade RemedyInvestigations (Period of Investigation and Injury Investigationperiod) required the respondent to furnish relatively contemporarydata – Such action cannot be termed as arbitrary – The impugnedorders were plainly erroneous in chastising the DA – Thus, theimpugned orders of the High Court dated 28.08.2018, 22.07.2019and the order directing replacement of the incumbent DA are setaside.

Judicial Review – Findings of Designated Authority – TheConstitution arms the High Courts and this court with powers underArticles 226 and 32 – At the same time, barring exceptional featuresnecessitating intervention in an ongoing investigation triggered bya complaint by the concerned domestic industry, judicial reviewshould not be exercised virtually as a continuous oversight of theDA’s functions – Supreme Court has cautioned more than once,that judicial review is to be exercised in a circumspect manner,especially where final findings are rendered by the DA – Anti-dumping.

Allowing the appeals, the Court

Conclusion

Allowing the appeals, the Court

HELD: 1. Section 9A of the Customs Tariff Act, 1975 andthe procedure prescribed by the Customs Tariff (Identification,Assessment and Collection of Anti-dumping Duty on DumpedArticle and for Determination of Injury) Rules, 1995, clearlydisclose an intent that investigations should be completed withinpre-determined time limits and the levy itself (which can bespecific to foreign exporter or country – or combination ofboth-) cannot be more than five years – which may, after duereview in accordance with prescribed procedure, before expiryof the said period, be extended by another period not more thanfive years. These timelines are crucial; the DA is duty bound to A

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Afollow them. The analysis of the particular market behaviour bythe allegedly offending foreign Exporters, involves sifting of agreat deal of evidence, such as manufacturing capacity, financialabilities, overall capacity of the country in the like field, prices,and the margin of acceptable delinquent behaviour, as well asdomestic capacity, efficiency, etc, while determining if an injuryBexists, the margin of such injury and its likely duration. Thejudgment of this court in Union of India v. Kumho Petrochemicalshas noticed that as a signatory to GATT and the MarrakeshAgreement, the Anti-Dumping Rules (ADA) are to be assimilatedinto domestic laws. The provision of Article 5.10 of the MarrakeshCAgreement is strict with respect to the timeline for taking upand conclusion of investigation. Article 10 empowers states tolevy duties, with retrospective effect, only for a limited period(90 days subject to fulfilment of prescribed conditions) “prior tothe date of application of provisional measures, when the authoritiesdetermine for the dumped product in question that:..” This has beenDgiven effect to by Rules 17 and 20 of the Rules of 1995. [Para 29][1176-B-F]

2. Keeping the imperative of completion of investigationwithin a pre-determined timeline, the guidelines contained in theManual of Operation for Trade Remedy Investigations (Period ofEInvestigation and Injury Investigation period) as to thecontemporaneousness of the data necessary to carry out theinvestigation, assume importance. [Para 30][1177-A]

3. The rationale for these guidelines is self-evident: anyinvestigation carried out for past periods would in all likelihood,Fresult in minimal levy. For instance, if in 2020, investigation isinitiated for the period 2013-14, with the object of determininganti-dumping, even if injurious behavior is found, the levy can beonly of limited duration. Further, to levy duty for the period afterfindings are rendered, the POI would yield stale results, andGcannot justify levy for later periods. Keeping this in mind, theDA, apparently in the present case, having regard to Para 5.9required respondent to furnish relatively contemporary data. Suchan action cannot be termed as arbitrary. In this court’s opinion, H

the impugned orders were plainly erroneous in chastising theDA, and even directing his replacement, for what appears to behis adherence to prescribed procedure. [Para 31][1177-E-G]

4. Access to judicial review is a valuable right conferredupon citizens and persons aggrieved; the Constitution arms theHigh Courts and this court with powers under Articles 226 and32. At the same time, barring exceptional features necessitatingintervention in an ongoing investigation triggered by a complaintby the concerned domestic industry, judicial review should notbe exercised virtually as a continuous oversight of the DA’sfunctions. This court has cautioned more than once, that judicialreview is to be exercised in a circumspect manner, especiallywhere final findings are rendered by the DA. [Para 32][1178-A-B]

S&S Enterprise v. Designated Authority (2005) 3 SCC337 : [2005] 2 SCR 255; Reliance Industries Ltd. v.Designated Authority (2006) 10 SCC 368 : [2006] 6Suppl. SCR 1; Directorate General of Anti-Dumping v.Sandik International (2018) 13 SCC 402; Associationof Synthetic Fibre Industries v. Apollo Tyres Ltd (2010)13 SCC 733 – relied on.

Tata Chemicalsv.Union of India, (2008) 17 SCC180 : [2008] 5 SCR 320; Automotive Tyre ManufacturersAssociation v. The Designated Authority (2011) 2 SCC258 : [2011] 1 SCR 198; Union of India v. KumhoPetrochemicals (2017) 8 SCC 307 : [2017] 4 SCR 324;Ref Commr. of Customs v. G.M. Exports, (2016) 1 SCC91 : [2015] 14 SCR 848 – referred to.

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[2020] 7 S.C.R.

CIVIL APPELLATE JURISDICTION: Civil Appeal Nos.B3046-3048 of 2020.

From the Judgment and Orders dated 28.08.2018, 05.08.2019 and22.07.2019 of the High Court for the State of Telangana at Hyderabadin W.P. No. 11116 of 2018 and in W.P. No. 2639 of 2019 respectively.

K. K. Venugopal, Attorney General, Sanjay Jain, ASG, MukulCRohtagi, Sr. Adv., D. L. Chidananda, Chinmayee Chandra, Ankur Talwar,Mrs. Anil Katiyar, Y. Raja Gopala Rao, S. Das, Y. Vismai Rao, Advs. forthe appearing parties.

The Judgment of the Court was delivered by

S. RAVINDRA BHAT, J.D

1. Leave granted. With consent, the appeals were heard finally.The present appeals by special leave impugns three orders of theTelangana High Court, dated 28.08.2018, 22.07.2019 and 05.08.2019respectively. These were in the context of the respondent/writ petitioners’(hereafter “Andhra Petro”) challenge to orders of the DesignatedEAuthority (hereafter “DA”), which related to the question of impositionof anti-dumping duty.

2. The facts are that Andhra Petro applied to the CentralGovernment, seeking imposition of anti-dumping duty on imports of normalButanol or N-butyl alcohol originating in and exported into India fromFSaudi Arabia. Butanol is a basic organic chemical and a primary alcohol;it is an excellent solvent for acid-curable lacquers and baking finishes. Alarge part of normal Butanol is converted into derivatives for use assolvents in coating industries. This application resulted in the initiation ofinvestigation by the designated authority into the import of the subjectGarticles from Saudi Arabia, by notification dated 02.09.2016.

3. Andhra Petro furnished import data for the period of threemonths. The period of investigation was from April, 2015 to March,2016. The Designated Authority granted a public/oral hearing to interestedparties on 23.06.2017 followed by written submissions. Andhra PetroHalso attended the hearing and filed detailed submissions on 30.06.2017.

It alleged that the information given was not only for the period ofinvestigation but also for the entire injuryperiod, 2012-13 to 2014-15.Andhra Petro admitted that dumping from Saudi Arabia occurred in thelast three months of the period of investigation, i.e., January to March,2016, and that there were no imports from Saudi Arabia in the first ninemonths of the period of investigation, i.e., from April to December, 2015.It claimed that dumping of the same product also took place from Malaysia,Singapore, South Africa, the USA and the European Union. The periodof investigation by the Designated Authority covered investigation inrespect of imports from these exporting territories too. The applicationfurther claimed that though imports from Saudi Arabia started only inJanuary, 2016, the volume of such dumped imports was significant enoughto cause material injury to the domestic industry. This was to the extentof capturing 39% of the market share in India.

4. Andhra Petro asserted that the exports from Saudi Arabia intoIndia were not casual exports but were made with the intention of grabbingthe Indian market. Such exports into India from Saudi Arabia wereundercutting and depressing the prices of the domestic industry to asignificant extent, according to it, and performance of the domesticindustry during the period, January to March, 2016, was adverse in termsof profits and returns on investments. The following parameters, per thepetitioner company, demonstrated the causal link between the said exportsand the injury caused. The dumped imports from the subject countryentered the Indian market in the period Jan-Mar 2016 [last 3 months ofthe period of investigation (“POI”)] in such significant volumes thatimprovement in volume parameters seen in the performance of thedomestic industry in the first 9 months of the POI (Apr-Dec 2015), wascompletely wiped off. There was significant difference between theprices offered by the domestic industry and the foreign producer. Thus,the domestic industry was unable to raise the prices above the costs asa result of dumping of the product in the country.

5. The domestic industry was able to increase its sales at the costof sub-optimal prices in the first 9 months of the POI (Apr-Dec 2015).However, the sales volumes declined drastically in the period Jan-Mar2016 (last 3 months of the POI) even when the domestic industry offeredstill lower prices as fresh dumping from Saudi Arabia started in thisperiod. Nevertheless, it was alleged that the imports were significantlyundercutting the domestic prices. Resultantly, the price undercutting was AB

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Acreating price pressure on the domestic industry, and the reduction inprofits directly resulted in deterioration in returns on capital employedand cash flow. Thus, deterioration in profits, return on capital employedand cash flow was due to the dumped imports.

6. In the investigation proceedings, Andhra Petro submitted itsBwritten submissions on 27.10.2017, pursuant to the second oral publichearing held on 24.10.2017 owing to the change in the incumbent holdingthe office of the Designated Authority. It also filed rejoinder submissionson 01.11.2017. In terms of Rule 16 of the Customs Tariff (Identification,Assessment and Collection of Anti-dumping Duty on Dumped Articleand for Determination of Injury) Rules, 1995 (hereafter the “RulesCof 1995”), the Designated Authority disclosed essential facts underconsideration, which would form the basis for his final conclusion underthe Disclosure Statement dated 14.11.2017. Andhra Petro filed itscomments on such statement, on 21.11.2017. The Designated Authorityissued the Final Findings, by Notification dated 28.11.2017, terminatingDthe investigation under Rule 14(b) of the Rules of 1995.

7. The Designated Authority recorded the following findings:

(i) Period of last 3 months of POI of exports of subject goodsfrom Saudi Arabia was insufficient to evaluate injury to thedomestic industry as material injury determination would requireEdata on imports and domestic industry’s sales for a longer duration.

(ii) The short period of production especially commercial productionof just one month also constrained determination of arepresentative and realistic normal value for cooperating producers/exporters.F(iii) Causal link between imports from Saudi Arabia and injury tothe domestic industry could not be conclusively established on thebasis of three months of export period.

(iv) The Authority did not consider it appropriate to recommendlevy of Anti-Dumping Duty on the subject goods from Saudi ArabiaGand terminated the investigation under Rule 14(b) of Anti-DumpingRules.

8. Andhra Petro approached the Telangana High Court,complaining that its two applications, dated 18.10.2016 and 02.12.2016had not been duly considered in accordance with provisions of theH

Customs Tariff Act, 1975, especially Rules 2(b) and 2(d) of the Rules of1995. This writ petition was allowed by order dated 09.02.2018, directingthe Designated Authority to consider the applications dated 18.10.2016and 02.12.2016 afresh, after evaluation of the entire information placedbefore him in accordance with the provisions of the Customs Tariff Act,1975 and the Rules of 1995, more particularly Rules 2(b) and 2(d) of theRules of 1995 and pass appropriate orders within a time frame. Furtherto these directions, the Designated Authority passed an order dated05.03.2018 declining to initiate anti-dumping investigation. This orderwas impugned by Andhra Petro in another writ petition (WP 11116/2018,hereafter “the second writ petition”) before the Telengana High Court.

9. Before the High Court, Andhra Petro now contended that itwas a producer of 2-EH which is a “like article” (as defined under Rule2(d) of the Rules of 1995), to 2-PH and INA. It contended that it satisfiedthe criteria under Rule 2(b) read with Rule 2(d) of the Rules of 1995 tofile a petition for imposition of anti- dumping duty concerning imports ofthe said alcohols on behalf of the domestic industry. It was furthercontended that in spite of a specific direction of this Court dated09.02.2018 passed in WP 25988/2017, the Designated Authority did notdetermine whether the dumped products cause injury to the domesticindustry in the commercial competition with like articles made in Indiaand passed the impugned order declining to initiate anti-dumpinginvestigation.

10. The Central Government, which filed its return, to the Writproceeding argued that Andhra Petro produced only 2-EH, not INA and2-PH, and as it filed the combined application for all the said products,the Designated Authority rejected the request of the petitioner. The lettersproduced by Andhra Petro to show that 2-EH, INA and 2-PH are ‘likearticles’, were not issued by any independent/recognised agency/sourceand hence they could not be considered. It was further stated that thoughseveral opportunities were given to Andhra Petro seeking clarificationsas to how the acyclic alcohols i.e., 2-EH, INA and 2-PH are ‘like articles’when it does not produce INA and 2-PH, it did not submit any clarification,and it filed a combined application for imposition of anti-dumping dutyfor all three products.

11. The High Court disposed of the second writ petition on28.08.2018 making the following observations and directions:

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SUPREME COURT REPORTS

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A“7. In spite of specific direction of this Court in W.P.No.25988of 2017 dated 09.02.2018, the second respondent has notdealt with the applications of the petitioner afresh in trueletter and spirit of the said order and passed the impugnedorder. The second respondent, relying upon the order of theCustoms, Excise and Gold (Control) Appellate Tribunal, NewBDelhi in Appeal No.C/411/2000 dated 11.04.2001 whereby itheld that Normal Hexanol is not one manufactured orproduced by domestic industry, passed the impugned orderstating that it is decided not to initiate anti-dumpinginvestigation concerning imports of INA, 2-PH and 2-EHCoriginating in or exported from Saudi Arabia, EU andSingapore, excluding 2-EH having carbon No.8 from EU.While passing the impugned order, the second respondentignored the final findings dated 29.07.2003 and the order ofthe Customs, Excise and Service Tax Appellate Tribunal(CESTAT) dated 13.04.2006 in the case of AndhraDPetrochemicals Ltd. Vs. Designated Authority 2006 (201) ELT481 (Tri.-Del.) with regard to dealing of ‘like articles’ and toaccept 2-EH supplied by the domestic industry is ‘like article’to 2-PH and INA imported from subject countries. Thepetitioner is the producer of 2-EH which is a ‘like article’ toE2-PH and INA and it falls within the ambit of Rule 2(b) readwith Rule 2(d) of the Rules of 1995. Rules 2(b) and 2(d) ofthe Rules of 1995 read as under.

“2(b) ‘domestic industry’ means the domestic producers as awhole engaged in the manufacture of the like article and anyFactivity connected therewith or those whose collective outputof the said article constitutes a major proportion of the totaldomestic production of that article except when suchproducers are related to the exporters or importers of thealleged dumped article or are themselves importers thereof inwhich case such term ‘domestic industry’ may be construedGas referring to the rest of the producers:

Provided that in exceptional circumstances referred to in sub-rule (3) of Rule 11, the domestic industry in relation to thearticle in question shall be deemed to comprise two or morecompetitive markets and the producers within each of suchHmarket a separate industry, if –

(i) the producers within such a market sell all or almost all oftheir production of the article in question in that market; and(ii) the demand in the market is not in any substantial degreesupplied by producers of the said article located elsewherein the territory.”

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2(d) ‘like article’ means an article which is identical or alikein all respects to the article under investigation for beingdumped in India or in the absence of such an article, anotherarticle which although not alike in all respects, hascharacteristics closely resembling those of the articles underinvestigation.”

8. The second respondent has not considered the issue whetherthe imported products and the domestic products aretechnically and commercially substitutable and has not cometo a conclusion on ‘like article’. This action of the secondrespondent becomes absolutely ignoring the order of this Courtdated 09.02.2018 in W.P. No. 25988 of 2017 and theimpugned order is one without application of mind. There isno cogent reason pushing the petitioner to file repeatedapplications and the second respondent cannot pass ordersin a routine and casual manner, in spite of sufficient materialavailable with him.

9. In the light of the above, this writ petition is allowed, settingaside the order of the second respondent dated 05.03.2018.The second respondent is directed to take steps for initiatinginvestigation to determine the anti-dumping in respect of importof INA having carbon No.9 from European Union andSingapore and 2-PH having carbon No.10 from EuropeanUnion, in accordance with law, as expeditiously as possible.Pending miscellaneous petitions, if any, shall also standclosed. No order as to costs.”

12. Pursuant to the High Court’s directions, the DA issued noticeson 28.09.2018, 24.10.2018 and 03.12.2018. After noticing that AndhraPetro’s initial application was in 2016 (i.e.18.10.2016 and 02.12.2016),the DA issued letters seeking updated data from Andhra Petro. However, A

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AAndhra Petro filed WP No.2639/2019 before the High Court against theDA’s letters of 28.09.2018, 24.10.2018 and 03.12.2018. The DA filed itsreply before the High Court, contending inter alia that first, the HighCourt’s order dated 28.8.2018 did not prohibit it from calling for updateddata and had directed it (DA) to initiate investigation in accordance withlaw; second, that it sought updated data to evaluate and comply with theBHigh Court’s order fairly; and lastly that Andhra Petro was silent on thefact that the data filed by it was 30 months old.

13. Apparently, in view of certain observations made during theproceedings by the High Court, the DA felt constrained to issue a noticeof investigation on 09.07.2019 which inter alia, stated as follows:C

“8. The writ petition was listed on 3.7.2019 wherein theHon’ble High Court advised the law officer representingthe Authority that requesting the industry to file fullydocumented application as per the prescribed proformaavailable on the website including all data related to recent,Dupdated, period of injury and POl etc., is in violation ofthe orders passed by the Hon’ble High Court dated28.8.2018 in WP No.11116/2017 and therefore was inclinedto initiate suo moto contempt proceedings and directingthe Designated Authority to appear before the Hon’bleEHigh Court. The Hon’ble Court granted one weeks’ timeand posted the matter on 9.7.2019.

9. In view of the above, the Authority hereby initiates anAD investigation into the alleged dumping and consequentinjury to the domestic industry in terms of rule 5 of ADFrules to determine the existence, degree and effect ofalleged dumping and to consider recommending the amountof anti-dumping duty which if levied, would be adequateto remove the injury to the domestic industry.”

14. Para 12 of the notice read as follows:

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“The Petitioner has filed data for the period January 2016to December 2016. In view of the High Court’s order, theAuthority initiates the investigation by prima facieevaluating dumping and injury based on the data providedby the applicant. However, to investigate further the POIis proposed to be considered, as 1.4.2018 to 31.3.2019 to H

evaluate dumping, injury and causality of injury to thepetitioner due to alleged dumping.”

15. Later, on the same date, a corrigendum was issued and para12 was amended by adding the following in the last line:

“The injury investigation period will however cover theperiods April 2015-March’ 2016, April 16-March 2017,April 2017-March 2018 and the period of investigation.”

16. By the first impugned order, the High Court initiated suo motucontempt proceedings after recounting the previous litigation and itsdirections, in those petitions. It noted that the DA, after disposal of thefirst petition, undertook the exercise only in relation to the period ofinvestigation sought by Andhra Petro without enlarging it (i.e. the period);this led to the order of the DA rejecting the application on 5 March,2018, and the filing of the second writ petition, which led to the secondremand. The High Court said that the notification (dated 09-07-2019)therefore, “cannot be countenanced” and further observed that:

“The action of the Designated Authority in seeking to enlargethe period of investigation pursuant to the second remandorder when it did not find any such necessity in relation tothe first remand order clearly indicates its lack of bonafides,if not worse, and its intent to tamper with judicial orders.

9. Further, the tone and tenor of the language used in para 8of the Initiation Notification dated 09.07.2019, set out supra,clearly demonstrate the Designated Authority’s disrespecttowards the Court. It is indeed shocking to note that theDesignated Authority thinks that the High Court is advisingit in the scheme of things! Further, having termed the directionof this Court to be mere advice, the Designated Authority thenproceeded to brush it aside.

10. In these circumstances, we deem it appropriate to initiatesuo motu contempt proceedings against Sri Sunil Kumar,Additional Secretary & Designated Authority, DirectorateGeneral of Trade Remedies, Department of willful anddeliberate disobedience to the order dated 28.08.2018 in W.P.No.11116 of 2018, as indicated supra, and for his utter lackof respect towards the Court. Registry is directed to take A

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Anecessary steps in this regard and place the suo motu contemptcase before this Court after numbering the same.”

17. Close on the heels of the order (dated 22.07.2009) initiatingsuo motu contempt, the High Court, by the second impugned orderdisposed of the writ petition [W.P.(C) 2639/2019]. The Court observedBinter alia as follows:

“2. We may note at this stage that the matter arises under theCustoms Tariff (Identification, Assessment and Collection ofAnti-dumping Duty on Dumped Article and for Determinationof Injury) Rules, 1995. After filing of this writ petition, wewere informed that Mr. Sunil Kumar, the present AdditionalSecretary & Designated Authority, Directorate General ofTrade Remedies, Department of Commerce and Industry,Government of India, issued Initiation Notification dated09.07.2019, demonstrating that the apprehension of thepetitioner company was not without foundation. In the lightof this development, this Court was constrained to initiatesuo motu contempt proceedings against the said authority byname.

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3. That being so, we are of the opinion that it would not beproper for the said authority to undertake the necessaryEexercise pursuant to the order dated 28.08.2018 passed inW.P. No.11116 of 2018. We are informed that there are threeofficers, viz. Mr. Mithileshwar Thakur, Mr. Satish Kumar andMs. Shubhra, all of the rank of Additional Director Generalin the Department, who would be competent to take up theFexercise pursuant to the aforesaid order.

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4. Sri K. Lakshman, learned Assistant Solicitor General forIndia, would inform this Court that the designated authoritywould have to be appointed by the Union of India.

5. We accordingly dispose of the writ petition directing theUnion of India, the third respondent herein, to choose one ofthe aforestated officers and appoint him/her as the designatedauthority to do the needful and undertake the exercisepursuant to the order dated 28.08.2018 passed in W.P.No.11116 of 2018. This exercise shall be completedexpeditiously by the Union of India and in any event, not G

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later than two weeks from the date of receipt of a copy of thisorder. Pending miscellaneous petitions, if any, shall standclosed in the light of this final order. No order as to costs.”

18. The learned Attorney General for India contends that both theimpugned orders are unsustainable. It is urged that while issuing thenotification on 09.07.2019, the DA acted within the framework of thelaw. The Attorney General highlighted the importance of Rule 5(3) ofthe Customs Tariff (Identification, Assessment and Collection of Anti-dumping duty on Dumped Article and for Determination of Injury) Rules,1995 as well as the relevant part of the Standard Operating Procedure(SOP) and submitted that consideration of contemporaneous if not thelatest data is a per-condition for the launch of valid investigation by theDA.

19. It is submitted that the DA is duty bound to satisfy itself, uponbeing presented with evidence with respect that it adequately establishesdumping injury and causal link. Hence, adducing recent data for thepurpose of evaluation of such parameters is essential. Highlighting thatthe Standard Operating Procedure (SOP), especially para 5.9, has beenconsistently adopted in this regard, it was further stated that this methodof investigation is in consonance with the WTO’s jurisprudence as wellas the recommendation of the Committee on Anti-Dumping Practices inthe WTO.

20. It is submitted that the question of whether any goods fallwithin the term “like article” is a technical one that is to be substantiatedby relevant data. In these circumstances, the position adopted by theDA requiring the furnishing of such relevant data can never be contraryto law, much less the subject of issuing suo motu proceedings. It wasargued lastly that the choice of an officer acting as DA is left to thediscretion of the Central Government and the circumstance that theincumbent to that office sought to “enlarge the period of investigation”was not a justifiable reason for directing his removal and substitutionwith another. The learned Attorney General submitted that whether anyarticle or goods fulfill or do not fulfill the description of “like article” arematters falling within the exclusive domain of the DA, who is a quasi-judicial authority exercising statutory powers. He urged that the Courtcannot lightly direct the substitution of one official with another on theassumption that non-inclusion of some goods in the expression “likearticle” was mala fide. The learned AG urged the Court to review the ABC

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Aimpugned order on the two specific grounds, i.e. that the so-called“enlarged period” is contrary to law and consequently that non-inclusionof articles other than those notified, too was not justified. These fallwithin the exclusive domain of the DA and could not be interfered within proceedings under Article 226 of the Constitution.

B21. Mr. Mukul Rohatgi, learned senior counsel appearing for AndhraPetro argued that the impugned orders do not call for interference. Itwas argued that the DA, despite repeated directions, failed to appreciatethe submission by Andhra Petro, that the material on record disclosingthat 2-Ethyl Hexanon (2-EH) supplied by the domestic industry is anarticle like 2-Propytheptyl Alcohol (2-PH) and Isononanol (INA)Cimported from the concerned countries. It is urged that commerciallyand technically, the two products can fall within the description of “likeproduct” relatable to 2-Ethyl Hexanol offered by Andhra PetrochemicalsLimited. Therefore, for a valid initiation of investigation, AndhraPetrochemicals Limited satisfied the criteria enumerated under Rule 2(8).D

22. It was contended that the DA failed to appreciate that as longas the product is imported, duty can be imposed on all types of goods,provided such type of goods is in commercial competition with a likearticle. Highlighting that the domestic producer in terms of Rule 2(8)should be engaged in the manufacture of like articles to enable the filingEof a complaint and seeking imposition of anti-dumping duty upon thedumped article, learned counsel submitted that the two products in questionwere kept out of the investigation. Mr. Rohatgi argued that the scope ofthe term “like article” includes those which have closely resemblingcharacters with the one in question.F23. It was submitted that the deliberate and persistent omission ofthe DA to comply with the High Court’s directions was contumaciousand invited stringent action, meted out by the impugned order. LearnedSenior Counsel highlighted that so far as the period of investigation wasconcerned, in none of the previous proceedings did the DA ever disclosethat data other than the period mentioned in the complaint too requiredGinclusion for the purposes of investigation. Not having done that in the 1“Section 9A. Anti-dumping duty on dumped articles. —

(1) Where any article is exported by an exporter or producer from any country orterritory (hereinafter in this section referred to as the exporting country or territory) toIndia at less than its normal value, then, upon the importation of such article into India,Hthe Central Government may, by notification in the Official Gazette, impose an anti- earlier proceedings, the DA was precluded from insisting that a periodor periods other than what were the subject of complaint too had to beincluded and relevant data for that end had to be given. The approach ofthe DA likewise in regard to the question of “like article” is contrary tolaw.

Analysis & Conclusions

24. The relevant provision, i.e. Section 9A of the Customs TariffAct is extracted in the footnote below[1]. Section 9C of the Customs TariffAct provides for an appeal to the Customs, Excise and Service Tax AppellateTribunal (CESTAT) against an order “of determination or review thereofregarding the existence, degree and effect of any subsidy or dumping inrelation to import of any article.”

25. This court, in S&S Enterprise v. Designated Authority[2],observed that “the purpose behind the imposition of the duty is tocurb unfair trade practices resorted to by exporters of a particularcountry of flooding the domestic markets with goods at rates whichare lower than the rate at which the exporters normally sell thesame or like goods in their own countries so as to cause or be likelyto cause injury to the domestic market.” It was noted that levy ofanti-dumping duty is a move to remedy injury, recognized by GATT thatbalances dumping duty not exceeding the margin of dumping in relation to such article.

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(5) The anti-dumping duty imposed under this section shall, unless revoked earlier,cease to have effect on the expiry of five years from the date of such imposition:

Provided that if the Central Government, in a review, is of the opinion that the cessationof such duty is likely to lead to continuation or recurrence of dumping and injury, it may,from time to time, extend the period of such imposition for a further period of five yearsand such further period shall commence from the date of order of such extension:

Provided further that where a review initiated before the expiry of the aforesaid periodof five years has not come to a conclusion before such expiry, the antidumping duty maycontinue to remain in force pending the outcome of such a review for a further periodnot exceeding one year.

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A

B

C

D

E

F

G

H

A“the right of exporters from other countries to sell theirproducts within the country with the interest of the domesticmarkets.” Thus the factors to constitute ‘dumping’, are (i) animport at prices which are lower than the normal value of thegoods in the exporting country; (ii) the exports must besufficient to cause injury to the domestic industry.”B

26. Reliance Industries Ltd. v. Designated Authority[3] explainedthat industries built after independence with great difficulty should notbe allowed “to be destroyed by unfair competition of some foreigncompanies. Dumping is a well-known method of unfair competitionwhich is adopted by the foreign companies.” The Court also saidCthat,”The purpose of Section 9-A is, therefore, to maintain a levelplaying field and prevent dumping while allowing for healthycompetition.”

27. The DA, no doubt, follows a prescribed quasi-judicial procedurewhere a determination on whether to impose or not to impose anti-Ddumping duty takes place (through a report).[4 ]However, this proceedingculminates with a recommendation; the Central Government finallydecides whether to impose such a duty, the extent of such duty, and itsduration.[5] Under Rule 4, the DA is duty bound to conduct i) investigationof the existence, degree and effect of any alleged dumping in relationEto imports of any article ; (ii) identify the article(s) on which anti-dumpingduty is to be imposed; (iii) submit findings, provisional or otherwise toCentral Government; (iv) determine the normal value, export price andthe margin of dumping in relation to the article under investigation; and(v) determine the injury or threat of injury to an industry established inIndia or material retardation to the establishment of an industry in IndiaFconsequent upon the import of article from specified countries. Themeaning of dumping is defined by Rule 10.[6] Rule 17, which speaks ofthe findings of the DA, obliges that authority to make its final findings 3 (2006) 10 SCC 368G4 Tata Chemicals v. Union of India, (2008) 17 SCC 180; Automotive Tyre ManufacturersAssociation v. the Designated Authority (2011) 2 SCC 258

5 Rule 17 which speaks of “recommendation” by the DA. Also, the power to levy duty isdiscretionary, evident from Rule 18 which leaves it to the Central Government to levyanti-dumping duty, by following the prescribed methods 6 Rule 10 reads as follows:

“10. Determination of normal value, export price and margin of dumping. – AnHarticle shall be considered as being dumped if it is exported from a country or territory “not later than one year from the initiation of investigation” througha report that outlines the export price, normal value and margin of dumping,whether import of the article into India from specified countries causesmaterial injury, or threatens injury, or materially retards the establishmentof any industry in India, the causal link between the dumped import, etc.The proviso to Rule 17 (1) empowers the Central Government in its“discretion in special circumstances” to extend further the said periodof one year by six months, within which the investigation is to becompleted.

28. Rule 20 is important, and reads as follows:

“20. Commencement of duty. - (1) The anti-dumping dutylevied under rule 13 and rule 19 shall take effect from thedate of its publication in the Official Gazette.

(2) Notwithstanding anything contained in sub-rule (1) - (a)where a provisional duty has been levied and where thedesignated authority has recorded a final finding of injuryor where the designated authority has recorded a final findingof threat of injury and a further finding that the effect ofdumped imports in the absence of provisional duty would haveled to injury, the anti-dumping duty may be levied from thedate of imposition of provisional duty; (b) in the circumstances referred to in sub-section (3) of section9A of the Act, the antidumping duty may be leviedretrospectively from the date commencing ninety days priorto the imposition of such provisional duty: Provided that noduty shall be levied retrospectively on imports entered for homeconsumption before initiation of the investigation:

Provided further that in the cases of violation of priceundertaking referred to in sub-rule (6) of rule 15, no dutyshall be levied retrospectively on the imports which haveentered for home consumption before the violation of the termsof such undertaking.

Provided also that notwithstanding anything contained in theforegoing proviso, in case of violation of such undertaking, to India at a price less than its normal value and in such circumstances the designatedauthority shall determine the normal value, export price and the margin of dumpingtaking into account, inter alia, the principles laid down in Annexure I to these rules.”

A

B

C

D

E

F

G

H

Athe provisional duty shall be deemed to have been levied fromthe date of violation of the undertaking or such date as theCentral Government may specify in each case.”

29. Section 9A of the Customs Tariff Act and the procedureprescribed by the Rules of 1995, clearly disclose an intent thatBinvestigations should be completed within pre-determined time limits andthe levy itself (which can be specific to foreign exporter or country – orcombination of both-) cannot be more than five years – which may,after due review in accordance with prescribed procedure, before expiryof the said period, be extended by another period not more than fiveyears. These timelines are crucial; the DA is duty bound to follow them.CThe analysis of the particular market behaviour by the allegedly offendingforeign exporters, involves sifting of a great deal of evidence, such asmanufacturing capacity, financial abilities, overall capacity of the countryin the like field, prices, and the margin of acceptable delinquent behaviour,as well as domestic capacity, efficiency, etc, while determining if anDinjury exists, the margin of such injury and its likely duration. The judgmentof this court in Union of India v. Kumho Petrochemicals[7] has noticedthat as a signatory to GATT and the Marrakesh Agreement, the Anti-Dumping Rules (ADA) are to be assimilated into domestic laws. Theprovision of Article 5.10 of the Marrakesh Agreement is strict withrespect to the timeline for taking up and conclusion of investigation.[8]EArticle 10 empowers states to levy duties, with retrospective effect,only for a limited period (90 days subject to fulfilment of prescribedconditions) “prior to the date of application of provisional measures,when the authorities determine for the dumped product in questionthat:..”[9] This has been given effect to by Rules 17 and 20 of the RulesFof 1995[10]

7 (2017) 8 SCC 307.

8 Article 5.10 reads as follows:

“5.10 Investigations shall, except in special circumstances, be concluded within oneyear, and in no case more than 18 months, after their initiation.’’

9 Article 10.6, Marrakesh Agreement.

G10 Ref Commr. of Customs v. G.M. Exports, (2016) 1 SCC 91at page 118, where it wasobserved that:

“32.Under Rule 17, the Designated Authority is given one year from the date of initiationof an investigation to come out with its final findings. This is extendable by the CentralGovernment only in special circumstances, and only by a further period of 6 months,and no more (Clause 5.10 of the WTO Agreement). Significantly, the Designated Authority,in its final finding, may also provide for a retrospective levy of duty, the reasonsH

30. Keeping the imperative of completion of investigation within apre-determined timeline, the guidelines contained in the Manual ofOperation for Trade Remedy Investigations (Period of Investigationand Injury Investigation period) as to the contemporaneousness ofthe data necessary to carry out the investigation, assume importance.The relevant provisions of the Manual are extracted below:

“5.9 The POI proposed in the application should be as latestas possible, and in any case not more than six months old ason date of initiation. If the proposed POI is more than sixmonths old, then applicant may be asked to furnish revisedapplication with fresh data.

5.10 The POI should normally be twelve months. As far aspossible attempt should be made to identify POI as per thefinancial year, as it will make analysis easier and moreaccurate. An attempt should be made to select POI in such away that at least one complete financial year is included inthe POI to ensure availability of audited details at least for apart period of POI. It is always desirable to add period interms of quarters (as the financial results are prepared quarterwise only) instead of any odd number of months as it may bedifficult for other interested parties to submit their auditedfigures for such odd period.”

31. The rationale for these guidelines is self-evident: anyinvestigation carried out for past periods would in all likelihood, result inminimal levy. For instance, if in 2020, investigation is initiated for theperiod 2013-14, with the object of determining anti-dumping, even ifinjurious behavior is found, the levy can be only of limited duration. Further,to levy duty for the period after findings are rendered, the POI wouldyield stale results, and cannot justify levy for later periods. Keeping thisin mind, the DA, apparently in the present case, having regard to Para5.9 (quoted above) required Andhra Petro to furnish relativelycontemporary data. Such an action cannot be termed as arbitrary. Inthis court’s opinion, the impugned orders were plainly erroneous inchastising the DA, and even directing his replacement, for what appearsto be his adherence to prescribed procedure.

therefor, and the date of commencement of such retrospective levy. This is obviouslyreferable to Section 9-A(3), which reproduces Clause 10.6 of the WTO Agreement. Thereasons must be the reasons mentioned in the said sub-section, and, as mentioned in thesaid sub-section, such retrospective levy cannot commence beyond 90 days from thedate of the notification imposing provisional duty.”

AB

CDEF

G

H

A32. Access to judicial review is a valuable right conferred uponcitizens and persons aggrieved; the Constitution arms the High Courtsand this court with powers under Articles 226 and 32. At the same time,barring exceptional features necessitating intervention in an ongoinginvestigation triggered by a complaint by the concerned domestic industry,judicial review should not be exercised virtually as a continuous oversightBof the DA’s functions. This court has cautioned more than once, thatjudicial review is to be exercised in a circumspect manner, especiallywhere final findings are rendered by the DA.[11]

33. For the foregoing reasons, this court is of the opinion that theimpugned orders, i.e., the order dated 28.08.2018 issuing specificCdirections for anti-dumping investigation into articles imported from EU;the order dated 22.07.2019 (initiating contempt proceedings against theDA) and the order dated 05.08.2019 have to be set aside. The first twoorders are accordingly set aside. The third order (dated 05.08.2019), tothe extent that it directs the replacement of the incumbent DA, is set aside. The appeals are allowed in the above terms, without order onDcosts.

Ankit Gyan

Appeals allowed.

E

F

G

11 Directorate General of Anti-Dumping v Sandik International (2018) 13 SCC 402;HAssociation of Synthetic Fibre Industries v Apollo Tyres Ltd (2010) 13 SCC 733.