The Madras High Court has upheld a provision in the anti-dumping duty (ADD) rules that fix a time-limit for investigation in connection with the dumping of goods in India by exporters of other countries.
A division bench of Justices S Manikumar and Subramonium Prasad passed the order on writ appeals by Saint Gobain India Private Limited, a manufacturer in India, challenging the notification issued by the Directorate General of Anti-Dumping and Allied Duties of the Union Ministry of Commerce on April 10, 2017 extending the period of review of anti-dumping duty.
The bench said if the time taken for review under the provision (rule 22) was longer than the original investigation, "then it would allow the foreign exporter to dump goods into India, on the basis of provisional assessment, thereby affecting domestic industry".
"Besides, the exporter can manipulate prices and create documents if the period of investigation under the rule was not shorter than the original investigation and the very purpose of imposing anti-dumping duty will be lost," it observed.
The judges said this duty was introduced as the exporters of a country were flooding domestic markets with goods at a rate lower than that of goods normally sold in their country, resulting in a heavy loss to the domestic market.
Referring to GATT, to which India is a party, the judges said the imposition of the duty was a result of the General Agreement on Tariffs and Trade, which recognised the damage caused by dumping of goods by exporters of other countries and sought to remedy it, the judges said.
The GATT aims at balancing the rights of the exporters from other countries and at the same time protect the interest of the domestic markets, they noted.
The Centre had issued a notification on December 11, 2014 fixing the anti-dumping duty at US dollar 123.6 per metric tonne for import of float glass from Pakistan.
Tariq Glass Industries Limited in Lahore, Pakistan, filed an application to review the duty fixed for export of its float glass.
The application was considered under rule 22 of the ADD by the authority concerned which decided to initiate the new shipper review with regard to the import of the glass from Tariq and the period of investigation was fixed between July 1, 2015, and March 31, 2016.
However, the investigation by Directorate General of Anti-Dumping and Allied Duties, under the Union Ministry of Commerce, did not get over by March 2016.
Following this, Saint Gobain, a manufacturer in India, submitted various representations contending that the final notification should not be issued in favour of Tariq since the time-limit for the review was over.
It also questioned the jurisdiction of the designated authority to continue the probe beyond the time-limit.
However, on April 10, 2017 the Union Ministry of Commerce issued the notification after rejecting the application of Saint Gobain.
Aggrieved, Gobain had approached the high court and a single judge on November 6, 2017 upheld the government notification.
Hence, the present appeals were filed challenging the single judge order and the 2017 notification and the related orders.
Allowing the appeals, the bench observed that the GATT agreement is the basis of the ADD rules.
Therefore, the purpose behind that must be the guiding force while interpreting rule 22, which prescribed the time-limit.
It said the single judge had erred in applying the literal rule of interpretation to come to the conclusion that to fix the time-limit as in rule 22 would amount to rewriting the rule.
In this case, the procedure under rule 22 was initiated on September 23, 2015, and it culminated on April 12, 2017, after 18 months -- which is more than the time prescribed in rule 17 and rule 23.
The review is clearly barred by time.
Even in the absence of time-limit fixed in rule 22, a review undertaken under the rule is required to be completed on an accelerated basis, that is, before the time period prescribed in rule 17 or rule 23, the judges said and set aside the notifications and the orders of the single judge.
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