Anti-dumping duty on the imports of certain rubber chemicals from China PR and Korea RP was originally recommended by the Designated Authority vide final findings dated 1st October 2008 and was implemented vide Customs Notification dated 12th December 2008. Sunset review investigation was initiated by Designated Authority on 30th April 2013 and the anti-dumping duties were extended vide Customs Notification No. 35/2014 dated 24th July 2014 pursuant to the recommendation of the Designated Authority in the sunset review vide Final Findings dated 29th.
Delhi High Court vide its Judgment dated 31st May 2018 in the case of Forech India Ltd. v. Union of India, 2018 (361) ELT 671 (Del.) set aside the Initiation Notification dated 30th April 2013, Final Findings dated 29th April 2014 and Customs Notification No. 35/2014 dated 24th July 2014. The High Court observed that there were two gaps in the continuation of anti-dumping duty pursuant to the sunset review. Both, Customs Notification No. 17/2013 extending the duty for one year pending the sunset review and Customs Notification No. 35/2014 extending the anti-dumping duty for another five years upon the conclusion of sunset review, were issued after the previous anti-dumping duty had already expired.[See endnote 1] The Court also observed that the initiation of sunset review was illegal.
Appeal/SLP was filed against this decision before the Supreme Court of India by the domestic industry of rubber chemicals i.e. NOCIL Ltd. Supreme Court admitted the SLP by issuing notice but no interim relief or stay was granted by it vide its order dated 9th July 2018.
In the meanwhile, domestic industry filed an application before the Designated Authority requesting to initiate the second sunset review. There was no customs notification in force imposing anti-dumping duty on the subject product as the same had already been set aside by the Delhi High Court and therefore application for second sunset review for extension of duty was not correct. However, the Designated Authority examined the application of the domestic industry and eventually rejected the application of the domestic industry by stating that the information provided by the domestic industry in the application does not support the claim of the domestic industry that it is suffering injury or that there is likelihood of injury to the domestic industry. No sunset review investigation was initiated by the Designated Authority.
This decision of the Designated Authority was challenged before the Gujarat High Court by the Domestic Industry. Domestic Industry requested the High Court that the rejection of application of the Domestic Industry by the Authority was incorrect because the domestic industry had provided all the relevant information and that the Designated Authority should initiate sunset review investigation to examine full facts and evidence regarding likelihood of dumping and injury. Gujarat High Court agreed with the request of the Domestic Industry and has issued its judgment on 3rd July 2019. The High Court vide its judgment in NOCIL Ltd. v. Union of India & Others, C/SCA/4461/2019, directed the Designated Authority to initiate sunset review and Ministry of Finance to extend the anti-dumping duty, pending the outcome of the sunset review.
Sunset review of anti-dumping duty – Legal provisions
Anti-dumping duties in force can be extended only if Customs Notification levying anti-dumping is in existence. Section 9A(5) provides as under:
“(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”
First proviso of Section 9A(5) of the Customs Tariff Act provides for the extension of anti-dumping duty for a further period of five years if there is likelihood of continuation or recurrence of dumping and injury. It provides:
“Provided that if the Central Government, in a review, is of the opinion that the cessation of 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 years and such further period shall commence from the date of order of such extension”
Rule 23(1B) of the Customs Tariff (Identification, Assessment and Collection of Anti-Dumping Duty on Dumped Articles and for Determination of injury) Rules, 1995 as amended from time to time (hereinafter also referred to as “Anti-dumping Rules, 1995”) provide the maximum duration of anti-dumping duty once imposed and also possibility of sunset review to examine need for continuation of anti-dumping duty for a further period. Rule 23(1B) of the Anti-dumping Rules, 1995 provides as under:
“Notwithstanding anything contained in sub-rule (1) or (1A), any definitive anti-dumping duty levied under the Act, shall be effective for a period not exceeding five years from the date of its imposition, unless the designated authority comes to a conclusion, on a review initiated before that period on its own initiative or upon a duly substantiated request made by or on behalf of the domestic industry, within a reasonable period of time prior to the expiry of that period, that the expiry of the said anti-dumping duty is likely to lead to continuation or recurrence of dumping and injury to the domestic industry”
Thus, it is clear from Section 9A(5) of the Customs Tariff Act r/w Rule 23(1B) of the Anti-dumping Rules, 1995, that sunset review can be initiated only when the anti-dumping duty is in force on the import of the subject goods. If no anti-dumping duty is in force on the import of subject goods, the domestic industry is required to request for initiation of fresh anti-dumping investigation in accordance with Section 9A(1) of the Customs Tariff Act r/w Rule 5 of the Anti-dumping Rules, 1995.
The judgment of Gujarat High Court has created a very unusual situation for the Designated Authority and Ministry of Finance. Gujarat High Court has directed the Designated Authority to initiate the sunset review and Ministry of Finance to extend the Customs Notification No. 35/2014 for a further period (one year or less) pending such sunset review. If these directions are implemented, it will be contrary to the decision of the Delhi High Court in Forech India Ltd. & Ors. Needless to say, the issue is required to be appropriately resolved by the Supreme Court.