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TMI Blog2011 (12) TMI 355X X X X Extracts X X X X X X X X Extracts X X X X ..... The petitioner had filed an application before the Designated Authority ('DA' for short) alleging dumping of Penicillin-G Potassium originating in or exported from China PR and Mexico as also of 6-Amino Penicillin Acid (6- APA for short) originating in or exported from China PR. DA on the basis of such an application of the petitioner, issued a public notice dated 22.7.2009 initiating Anti-dumping duty investigations concerning imports of Penicillin-G and 6- APA to determine the existence, degree and effect of alleged dumping and to recommend the amount of Anti-dumping duty, which, if levied, would be adequate to remove the injury to the domestic industry. 2.2 Following the principles and procedure provided in the Customs Tariff (Identification, Assessment and Collection of Anti-Dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995(here-in-after referred to as 'the Rules'), the DA issued preliminary findings vide its notification dated 11.1.2010 recommending imposition of provisional Anti-dumping duty concerning imports of Penicillin-G originating in or exported from China PR and Mexico and 6- APA originating in or exported from China PR. The Central Govern ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... usal link and conclusion on causal link for Pen-G and 6APA 111. The Authority conducted an analysis of the performance of the domestic industry vis a vis subject gods over the injury period. It is noted that the performance of the domestic industry has materially deteriorated during the injury period. The causal link between dumped imports and the injury to the domestic industry is established on the following grounds: (i) There is significant correlation between the prices offered by the domestic industry and Foreign Producers from subject countr (ies). It is further noted that even when the domestic industry has been offering sub-optimal prices and lowering its prices, it is also loosing sales. Thus, decline in sales volumes is a direct consequence of dumped imports from the subject country (ies); (ii) It is further noted that decline in sales volumes has resulted in reduction in the selling prices. Further, to keep its plant running, it is selling the both the subject goods at prices significantly below its cost of production. As a direct consequence, the profits of the domestic industry declined so rapidly that the domestic industry went into a situation of financial loss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y to the domestic industry. On the contrary, imposition of anti-dumping measures would remove the unfair advantages gained by dumping practices, would prevent the decline of the domestic industry and help maintain availability of wider choice to the consumers of the subject goods. J Recommendations 115. The Authority notes that the investigation was initiated and notified to all interested parties and adequate opportunity was given to the exporters, importers and other interested parties to provide positive information on the aspect of dumping, injury and causal link. Having initiated and conducted a investigation into dumping, injury and causal links between dumping and injury to the domestic industry in terms of the Rules laid down and having established positive dumping margin as well as material injury to the domestic industry caused by such dumped imports, the Authority is of the view that imposition of duty is required to offset dumping and injury. Therefore, Authority considers it necessary and recommends imposition of definitive anti-dumping duty on imports of subject goods from the subject countries in the form and manner described hereunder. 116. Having regard to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he derivative, viz. 7 ADCA , Cephalexin etc. then the Chinese exporters may export value added APIs to India, resulting into closing of many manufacturing unit of antibiotic in India. There may be shortage in the availability of antibiotic in the country and the prices of finished product may increase, ultimately affecting the common man. Large number of downstream users, mainly SMEs who converts these intermediates into formulations, will adversely be affected. Imposition of such duty may render the operation of a much larger community of downstream users unviable.' 5.1 It is further stated that Penicillin-G being a basic raw material for making anti-biotic is covered under the Essential Commodities Act besides being under the Price Control. The imposition of of Anti-dumping duty would lead to increase in the price of Penicillin-G and 6- APA and which in turn would lead to increase in prices of medicines. In that view of the matter, requirement of imposition of Anti-dumping duty was not found to be in the public interest. It is further stated that Section 9A of the Customs Tariff Act empowers the Central Government to levy tariff, but does not cast a mandatory obligation to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ance or upkeep of any religious, charitable or public institution or service of a like nature or for suitable maintenance of any family of a descendant from a former Ruling Chief. In this background, Apex Court held and observed that the word 'may' in sub- rule(3) of Rule 5 must be interpreted as mandatory when the condition precedent, namely, the existence of a religious, charitable or public institutions which ought to be continued or of the descendants of a ruling Chief, is established. b) Ramji Missar and another v. State of Bihar reported in AIR 1963 Supreme Court 1088, wherein it was observed that 'though the word 'may' might connote merely an enabling or permissive power in the sense of the usual phrase 'it shall be lawful', it is also capable of being construed as referring to a compellable duty, particularly when it refers to a power conferred on a Court or other judicial authority.' c) L. Hirday Narain v. Income-Tax Officer, Bareilly reported in AIR 1971 Supreme Court 33, wherein it was observed that 'if a statute invests a public officer with authority to do an act in a specified set of circumstances, it is imperative upon him to exercise his authority in a manner ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lis between the domestic industry on the one hand and the importer of foreign goods from the foreign supplier on the other. The determination of the recommendation of the DA and the Government notification on its basis is subject to an appeal before the CESTAT . This also makes it clear that the proceedings before the DA are quasi-judicial.' In this regard, counsel also drew out attention to decision of the Division Bench of this Court in case of Meghani Organics Ltd. and Anr . v. Union of India (UOI) and ors . reported in 261 ELT 440, wherein the Bench relying on and referring to the case of Reliance Industries Ltd. (supra), observed as under : "15. The first and foremost issue is in relation to maintainability of petition at this interim stage. The main challenge is against levy of provisional anti-dumping duty which, inter alia , affects the petitioners. It is true that it is not a stage at which Court could go into validity of preliminary findings / imposition of duty. If final duty is not levied, the petitioners will be entitled to refund of anti-dumping duty already paid and if it is imposed, they could appeal to CESTAT or approach this Court or Hon'ble Supreme Court. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Government of India had imposed the antidumping duty for a period of five years. Under Section 9A (1), the said initial imposition of antidumping duty is ordinarily contemplated to be continued and remain in effect for a full period of five years, at the end of which it would be subject to sunset review, the possible consequence of which would be the extension of the operation of the period of anti-dumping duty for another period of five years. This is subject to the provisions of sub-rule (1) of Rule 23 of the Anti-Dumping Rules, under which the Designated Authority is empowered to review the anti-dumping duty imposed from time to time. Having regard to the scheme of the above mentioned provisions of the statute, once antidumping duty has been initially imposed, it would be ordinarily continued for five years unless on a review it is found by the Designated Authority that there has been such a significant change in the facts and circumstances, that it is considered necessary either to withdraw or modify appropriately the anti-dumping duty which has been imposed. It is, therefore, clear that unless the Designated Authority suo motu or the applicant for review is in a position t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e country cannot escape from poverty, unemployment and other social evils unless there is industrialization. It was also known to them that a country cannot be really independent in modern times unless it is industrialized. Hence, the Industrial Policy Resolution was adopted by the Indian government in the early 1950s and encouragement was given to the growth of heavy industry and other industries so that India may become economically independent and a prosperous nation. 10. The result was that an industrial base was created in India after independence and this has definitely resulted in some progress. The purpose of Section 9A can, therefore, easily be seen. The purpose was that our industries which had been built up after independence with great difficulties must not be allowed to be destroyed by unfair competition of some foreign companies. Dumping is a well-known method of unfair competition which is adopted by the foreign companies. This is done by selling goods at a very low price for some time so that the domestic industries cannot compete and are thereby destroyed, and after such destruction has taken place, prices are again raised. 11. The purpose of Section 9A is, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... powers under the Customs Tariff Act can also not be a subject-matter of judicial review by the MRTP Commission. 53. It is thus seen that the provisions relating to anti-dumping contained in the Customs Tariff Act do not in any way affect the power or jurisdiction of the MRTP Commission. The Import Control Act and the Customs Tariff Act on the one hand and the MRTP Act on the other operate in different independent fields and the authority under one has no jurisdiction over the other. In other words, their paths do not cross each other. While the provisions of Anti-dumping Act are concerned with the levy of anti-dumping duty, the MRTP Act in the present case would be concerned with the agreements between the parties which relate to the restrictive trade practices. Therefore, it would be incorrect to say that the incorporation of the anti-dumping provisions ousts the jurisdiction of the MRTP Commission to inquire and pass orders, inter alia, with regard restrictive trade practice in India.' 9.3 He submitted that the Apex Court in case of Reliance Industries Ltd . (supra) did not notice earlier decision of three Judge Bench in case of Haridas Exports (supra). Counsel drew our attent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alone has to decide." 9. Learned counsel Shri Seetharaman appearing for respondent no.10 also opposed the petition contending that it is not mandatory on the Central Government to impose Anti-dumping duty. The Rules only make enabling provision for such purpose. Counsel submitted that imposition of Anti-dumping duty is legislative in nature. No direction therefore, can be issued to the Central Government for framing of law. Counsel submitted that our country has accepted enabling regime. He therefore, submitted that in Rule 18 what is provided is the enabling provision allowing Central Government to impose Anti-dumping duty. There is no mandate that in every case, where recommendation is made by DA, such duty must follow. 10.1 Reliance was placed on decision of the Apex Court in case of Reliance Industries Ltd. (supra). Counsel submitted that the three Bench Judgement in case of Haridas Exports (supra)was not noticed. Counsel pointed out that in case of Automotive Tyre Manufacturers Asson . (supra),the Apex Court noted this divergence of opinion between the earlier Bench. However, in facts of the case, said aspect was not required to be gone into. 10.2 In support of his content ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... corresponding entry in the second column thereof and no dealer shall charge sales tax on the sale of goods which. are declared tax free under this section." Till August 31, 1966, Indian made foreign liquor was ill Schedule B. But on that date the Government of Punjab in exercise of its powers conferred under proviso to s. 5 deleted Indian made foreign liquor from Schedule B and included the same in Schedule A to that Act. Thus the sale of the said liquor became exigible to sales tax. This was the law in force in Punjab when re-organization took place. Hence Simla and other areas which were formerly parts of the State of undivided Punjab continued to be governed by that law even after reorganization. Our attention has not been drawn to any provision in that Act empowering the Government to exempt any assessee from payment of tax' Therefore it is clear that appellant was liable to pay the tax imposed under the law. What the appellant really wants is I mandate from the court to the competent authority to delete the concerned entry from Schedule A and include the same, in Schedule B. We shall not go into the question whether "he Government of Himachal Pradesh on its own authority wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whether to impose Anti-dumping duty. We would be deliberating on whether the findings and recommendations of the DA are binding to the Union of India and also whether the act of Union of India of imposition of Anti-dumping duty can be stated to be a legislative function. 11. First taking the question of duties and powers of DA, we note that Section 9A of the Customs Tariff Act, which was introduced by the amendment of 1995, makes provision with respect to Anti-dumping duty on dumped articles. Section 9A reads as under : "9A .(1) Where any article is exported from any country or territory (hereafter in this section referred to as the exporting 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 .- For the purposes of this section,- (a) 'margin of dumping' in relation to an article, means the difference between its export price and its normal value; (b) 'export price', in relation to an article, means the price of the article exported from t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rgin and if such anti-dumping duty exceeds the margin as so determined ,- (a) the Central Government shall, having regard to such determination and as soon as may be after such determination, reduce such anti-dumping duty; and (b) refund shall be made of so much of the antidumping duty which has been collected as is in excess of the anti-dumping duty as so reduced. (2A) Notwithstanding anything contained in subsection (1) and sub-section (2), a notification issued under sub-section (1) or any anti-dumping duty imposed under subsection (2), shall not apply to articles imported by a hundred per cent. Export oriented undertaking unless ,- (i) specifically made applicable in such notification or such imposition, as the case may be, or (ii) the article imported is either cleared as such into the domestic tariff area or used in the manufacture of any goods that are cleared into the domestic tariff area, and in such cases anti-dumping duty shall be levied on that portion of the article so cleared or so used as was leviable when it was imported into India. Explanation. - For the purposes of this section, the expressions "hundred per cent. export -oriented undertaking", "free tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... necessary and the Central Government may, by notification in the Official Gazette, make rules for the purposes of this section, and without prejudice to the generality of the foregoing such rules may provide for the manner in which articles liable for any anti-dumping duty under this section may be identified and for the manner in which the export price and the normal value of and the margin Refund of Antidumping duty in certain cases of dumping in relation to, such articles may be determined and for the assessment and collection of such anti-dumping duty. (6A) The margin of dumping in relation to an article, exported by an exporter or producer, under inquiry under sub- section(6) shall be determined on the basis of records concerning normal value and export price maintained, and information provided by such exporter or producer; (7) Every notification issued under this section shall, as soon as may be after it is issued, be laid before each House of Parliament. (8) The provisions of the Customs Act, 1962 and the rules and regulations made thereunder, 1relating to, the date for determination of rate of duty, non-levy, short levy, refunds, interest, appeals, offences and penal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r sub- section(6) of Section 9A and sub-section(2) of Section 9B of the Customs Tariff Act, the Union of India has promulgated Customs Tariff (Identification, Assessment and Collection of Anti-dumping duty on Dumped Articles and for Determination of Injury) Rules 1985. Rule 2(c) of the Rules define term 'interested party' as under : "9A .(1) Where any article is exported from any country or territory (hereafter in this section referred to as the exporting 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 .- For the purposes of this section,- (a) 'margin of dumping' in relation to an article, means the difference between its export price and its normal value; (b) 'export price', in relation to an article, means the price of the article exported from the exporting country or territory and in cases where there is no export price or where the export price is unreliable because of association or a compensatory arrangement between the exporter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n, reduce such anti-dumping duty; and (b) refund shall be made of so much of the antidumping duty which has been collected as is in excess of the anti-dumping duty as so reduced. (2A) Notwithstanding anything contained in subsection (1) and sub-section (2), a notification issued under sub-section (1) or any anti-dumping duty imposed under subsection (2), shall not apply to articles imported by a hundred per cent. Export oriented undertaking unless ,- (i) specifically made applicable in such notification or such imposition, as the case may be, or (ii) the article imported is either cleared as such into the domestic tariff area or used in the manufacture of any goods that are cleared into the domestic tariff area, and in such cases anti-dumping duty shall be levied on that portion of the article so cleared or so used as was leviable when it was imported into India. Explanation. - For the purposes of this section, the expressions "hundred per cent. export -oriented undertaking", "free trade zone" and "special economic zone" shall have the meanings assigned to them in Explanations 2 to sub-section (f) of section 3 of Central Excise Act, 1944. (3) If the Central Government, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ules may provide for the manner in which articles liable for any anti-dumping duty under this section may be identified and for the manner in which the export price and the normal value of and the margin Refund of Antidumping duty in certain cases of dumping in relation to, such articles may be determined and for the assessment and collection of such anti-dumping duty. (6A) The margin of dumping in relation to an article, exported by an exporter or producer, under inquiry under sub- section(6) shall be determined on the basis of records concerning normal value and export price maintained, and information provided by such exporter or producer; (7) Every notification issued under this section shall, as soon as may be after it is issued, be laid before each House of Parliament. (8) The provisions of the Customs Act, 1962 and the rules and regulations made thereunder, 1relating to, the date for determination of rate of duty, non-levy, short levy, refunds, interest, appeals, offences and penalties shall, as far as may be, apply to the duty chargeable under this section as they apply in relation to duties leviable under that Act.' Section 9C of the Customs Tariff Act provides for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i-dumping duty on Dumped Articles and for Determination of Injury) Rules 1985. Rule 2(c) of the Rules define term 'interested party' as under : "(c) 'interested party' includes - (i) an exporter or a foreign producer or the importer of an article subject to investigation for being dumped in India, or a trader or business association a majority of the members of which are producers, exporters or importers of such an article; (ii) the government of the exporting country; and (iii) a producer of the like article in India or a trade and business association a majority of the members of which produce the like article in India;' Rule 3 pertains to appointment of designated authority and reads as under : 'RULE 3. Appointment of designated authority. - (1) The Central Government may, by notification in the Official Gazette, appoint a person not below the rank of a Joint Secretary to the Government of India or such other person as that Government may think fit as the designated authority for purposes of these rules. (2) The Central Government may provide to the designated authority the services of such other persons and such other facilities as it deems fit.' Rule 4 pertains ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty to the known exporters of the article alleged to have been dumped , the Governments of the exporting countries concerned and other interested parties. (3) The designated authority shall also provide a copy of the application referred to in sub- rule(1) of Rule 5 to - (i) the known exporters or to the concerned trade association where the number of exporters is large, and (ii) the governments of the exporting countries : Provided that the designated authority shall also make available a copy of the application to any other interested party who makes a request therefor in writing. (4) The designated authority may issue a notice calling for any information, in such form as may be specified by it, from the exporters, foreign producers and other interested parties and such information shall be furnished by such persons in writing within thirty days from the date of receipt of the notice or within such extended period as the designated authority may allow on sufficient cause being shown. Explanation : For the purpose of this sub-rule, the notice calling for information and other documents shall be deemed to have been received one week from the date on which it was sent by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of DA. Rule 14 pertains to termination of investigation and reads as under: 'RULE 14. Termination of investigation. - The designated authority shall, by issue of a public notice, terminate an investigation immediately if - (a) it receives a request in writing for doing so from or on behalf of the domestic industry affected, at whose instance the investigation was initiated; (b) it is satisfied in the course of an investigation, that there is not sufficient evidence of dumping or, where applicable, injury to justify the continuation of the investigation; (c) it determines that the margin of dumping is less than two per cent of the export price; (d) it determines that the volume of the dumped imports, actual or potential, from a particular country accounts for less than three per cent of the imports of the like product, unless, the countries which individually account for less than three per cent of the imports of the like product, collectively account for more than seven per cent of the import of the like product; or (e) it determines that the injury where applicable, is negligible.' Rule 15 pertains to suspension or termination of investigation upon undertaking wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (7) The designated authority shall, suo moto or on the basis of any request received from exporters or importers of the article in question or any other interested party, review from time to time the need for the continuance of any undertaking given earlier.' Rule 17 pertains to final findings that may be published by DA and reads as under : 'Final findings. - (1) The designated authority shall, within one year from the date of initiation of an investigation, determine as to whether or not the article under investigation is being dumped in India and submit to the Central Government its final finding - (a) as to, - (i) the export price, normal value and the margin of dumping of the said article; (ii) whether import of the said article into India, in the case 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 casual 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: Provided that the Central Go ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s are so large that individual examination would be unduly burdensome and prevent the timely completion of the investigation. (4) The designated authority shall issue a public notice recording its final findings. Rule 18 pertains to levy of duty and reads as under : 'RULE 18 Levy of duty. - (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 finding, anti-dumping duty not exceeding the margin of dumping as determined under rule 17. (2) In cases where the designated authority has selected percentage of the volume of the exports from a particular country, as referred to sub-rule (3) of rule 17, any anti-dumping duty applied to imports from exporters or producers not included in the examination shall not exceed - (i) the weighted average margin of dumping established with respect to the selected exporters or producers or, (ii) where the liability for payment of anti-dumping duties is calculated on the basis of a prospective normal value/ the difference between the weighted ave ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by issuing notification in the Official Gazette to impose Anti-dumping duty not exceeding the margin of dumping when it is found that any article is exported to India at less than its normal value. Explanation to sub- section(1) explains various terms such as margin of dumping, export price and normal value. Sub- section(4) of Section 9A provides that Anti-dumping duty shall be in addition to any other duty imposed under the Act. Sub-section (5) of Section 9A provides that such imposition of Anti-dumping duty shall remain effective for a period of five years unless revoked earlier. Proviso to sub-section (5) however, empowers the Central Government to extend such period from time to time for a further period of five years. Sub-section (6) of Section 9A provides that margin of dumping shall be ascertained and determined by the Central Government after such inquiry as it may consider necessary under Section 9A of the Customs Tariff Act. Thus the power to impose Anti-dumping duty lies with the Central Government even when the margin of dumping required to be ascertained is to be determined by the Central Government in tune with the Rules that may be framed in this regard. In esse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on that there is no sufficient evidence of dumping or injury to the industry justify the continuation of the investigation. Rule 15 authorises the DA to suspend or terminate the investigation, if the exporter gives undertaking in writing to revise the prices so that no exports of the articles are made at dumped prices or to revise the price so that injurious effect of dumping is eliminated. Rule 23 requires the DA from time to time to review the need for continued imposition of the Anti-dumping duty. 17. Thus while undertaking investigation into the question of dumping, DA not only ascertains various factors such as normal value of article, margin of dumping, injury or threat to the domestic industry etc. but also enjoys independent powers to either terminate the investigation or suspend the investigation under certain circumstances. Such decisions of the DA are not subject to further Government approval or control. 18. Combined effect of such statutory provisions would convince us to come the conclusion that DA under Rule 3 of the Rules acts for and on behalf of the Government while carrying out the investigation to determine the existence, degree and effect of any alleged dum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt disagreed with the view of the Tribunal with respect to character of notification issued by Central Government under Section 9A of the Act. 22. In case of Meghani Organics Ltd. and Anr . (supra), this Court followed the Apex Court decision in case of Reliance Industries Ltd. (supra). It was however, the case where the petitioner had prayed for direction to quash the Anti-dumping duty proceedings initiated by the DA. The respondents had argued that act of the Government is legislative in character and writ petition therefore, would not lie. Question before the Court that came up for consideration was whether the proceedings before the DA are quasi judicial in nature. It was in this background that the Court relied on and referred to the decision of the Apex Court in case of Reliance Industries Ltd. (supra). This decision of Gujarat High Court therefore, cannot be seen as laying down the proposition that Central Government while issuing notification under Section 9A exercises quasi judicial functions. 23. We have already noticed that the divergence of opinion between the decision of the Apex Court in case of Reliance Industries Ltd. (supra) and in case of Haridas Exports (supr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i-dumping duty under Section 9A of the Act exercises legislative functions. In essence, by issuance of notification, what is sought to be done is collection of duty. It is true that such duty is not imposed for revenue collection, nevertheless, it partakes the character of compulsory extraction of tax. Whatever be the purpose, it still essentially is in nature of duty. We may recall that Article 265 of the Constitution provides that no tax shall be levied or collected except by authority of law. Any argument that Notification imposing Anti-dumping duty is not a piece of legislation may open a contention that very collection of such duty is without authority of law. We may also notice that under Section 9C of the Customs Tariff Act, an appeal is provided against order of determination or review regarding the existence, degree and effect of any subsidy or dumping in relation to import of any article. Essentially therefore, what would be in appeal under sub- section(1) of Section 9C would be the order of determination or review of effect of any dumping and not the notification issued by the Central Government. Of-course, if the notification is based on any determination which is found ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng duty not exceeding margin of dumping as determined in Rule 17. 31. Sub- rule(1) of Rule 18 uses word 'may'. Unless there are sufficient reasons, it would not be possible for us to read the word 'may' as 'shall'. In comparison to this provision, we may recall that sub- rule(4) of Rule 17 provides that if final finding of the DA is negative, the Central Government shall withdraw the provisional duty if imposed. Thus in such a situation, legislature had left no option - no discretion to the Central Government but to act in accordance with the final findings of the DA and withdraw provisional duty if imposed. Secondly, the Rules give discretion to the Government even while deciding to impose Anti-dumping duty to impose such amount of duty not exceeding the margin of dumping. In other words even if Central Government were to accept the recommendations of DA for imposition of Anti-dumping duty, the extent of such Anti-dumping duty need not necessarily be as recommended by DA. Thirdly, the task to be performed by DA under the said Rules and particularly, while performing duties specified in Rule 4 are specific, to ascertain existence, degree and effect of any alleged dumping and vario ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9A read with the rules and ensure that no such Provisional Duty can be imposed before the expiry of 60 days from the date of public notice issued by the Designated Authority regarding its decision to investigate which itself is founded on due application of his mind to matters detailed in Rule 5. It also ensures that the imposition of Provisional Duty may not continue indefinitely to render the investigation an empty formality by ordaining that the Provisional Duty can remain in force only for a period of 6 months in the first instance but which may upon request of the exporters representing the percentage of the trade involved be extended by the Central Government maximum up to 9 months. Beyond 9 months from the date it is first imposed, Provisional Duty cannot be continued. 187. Effect of final findings recorded under Rule 17 is in the like manner no different. The recording of finding by the Designated Authority does not result in automatic levy and imposition of Anti Dumping Duty under Section 9A nor it becomes imperative for the Central Government to impose such Duty as recommended by the Designated Authority. The matter again rests with the Central Government which is the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the formulations in view of the imposition of anti-dumping duty on the subject goods, triggering burden to antibiotic manufactures. The interest of the domestic industry in this case two units, M/s. Alembic Limited, Vadodara and M/s. Southern Petrochemical Industries Corporation Ltd. should not outweigh the interest of the bulk drug manufactures. The global recession has caused downward performance of the two units instead of the alleged dumping of the products. 12. Penicillin is the basic raw material for many antibiotics and is covered under Essential Commodes Act besides being under Price Control. It has been stated in the representations that imposition of the proposed anti-dumping duties which works out to 38% and 52% increase in the price of Penicillin and 6APA respectively would lead to increase in prices of medicines by more than 100%. The DA has also not ruled out the likely increase on the prices of the products on account of imposition of anti dumping duty on Penicillin and 6- APA in his findings(para51 (a) refers). Further while the total capacity of manufacture of Penicillin by the domestic industry is 4872 thousand BU, the demand is for 15365 thousand BU. In the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... osed rates is bound to increase the cost and hence retail price of these basic drugs. 4. Section 9A of the Customs Tariff Act, which empowers the Central Government to levy anti dumping duty, does not, per se, refer to public interest. At the same time the Central Government is not placed under a mandatory obligation to accept the recommendation of the DA and impose anti dumping duty even when the large public interest dictates otherwise. In the past, in the case of newsprint too a conscious decision was taken not to impose anti dumping duty despite a clear cut finding about the existence of dumping, injury to the domestic industry and a causal link between the two as is the case here. 5. In view of the facts explained about and taking into account all factors, in my opinion it is not advisable to accept the recommendation of DA in this case. Thus, it is proposed not to levy provisional anti dumping duty on Penicillin-G and 6- APA when imported from China PR and Mexico. 6. The proposal in para 5 above may please be approved.' This proposal was approved by the Finance Ministry making following observations: "I agree with US(TRU). As pointed out by him, these are large cons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e instant case, DSM Anti Infectives is the producer of 6- APA in India. However, the company has itself imported significant 6- APA from the subject country. Further, the company is related to exporter of 6- APA in China. Thus, the producer is related to exporter and the related company is itself an importer of the subject goods in India. With this significant import from subject country along with the fact that they are related to exporter from subject country, it is considered appropriate not to consider their claim for being domestic industry in the subject investigations. Hence, having regard to the provisions under Rule 2(b) and the facts on record, the DA has held that M/s. DSM Anti Infectives cannot be considered as eligible domestic producer and its production is required to be excluded for the purpose of determination of domestic industry. The DA has therefore, held that production of Alembic commands a major proportion in Indian production. Alembic Ltd. therefore constitutes domestic industry in respect of 6- APA within the meaning of the Rules. (d) On the issue of likely increase in prices of subject goods and downstream goods following the imposition of duty, it is not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7. After the publication of the final findings, this office has received numerous representations including VIP references against the imposition of anti-dumping duty on the subject goods as under : (i) Representation dated 11-1-11 and 22-02-11 from Bulk drug manufactures association (India) (ii) Representation dated 11-01-11 from Virchow petrochemical private limited. (iii) Representation dated 12-01-11 from Otsuka chemical (India) pvt. Limited. (iv) Representation dated 20-01-11 from Unimark remedies ltd. (v) Representation dated 24-01-11 from Alembic, the petitioner. (vi) Letter dated 15-02-11 from Mr. Anantha Venkatarmai Reddy, M.P . (vii) Letter dated 18-02-11 from Mr. Brijbhushan sharan singh , M.P . (viii) Representation dated 15-02-11 Lakshmi Kumaran & Sridharan 8. The points raised by the various parties are in consonance with their stand taken before the Designated Authority and can be broadly summarized as under : i . Technical/legal lacuna in anti-dumping investigation or modalities of anti-dumping investigation. ii. Insufficient domestic production to meet demands of penicillin G and 6 APA iii. Additional cost burden on the user Bulk Drug Manufacturers wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing duty on Penicillin and 6- APA in his findings. 10.2 In this regard while the total capacity of manufacture of Penicillin by the domestic industry is 4872 thousand BU, the demand is for 15365 thousand BU. In the case of 6APA , the total capacity of manufacture of 6- APA by the domestic industry is 600 thousand BU, against the demand of 4931 thousand BU. 11. Hence, in the present case, the requirement of imposition of anti-dumping duty does not hold ground on the touchstone of larger public interest. Hence in view of the facts and circumstances mentioned at Para 9 to 10 above, it is proposed not to accept the final findings of the DA.' This was weighted by various authorities such as Secretary(Revenue) and others before the same was placed before the Hon'ble Finance Minister for approval. Such approval was granted on 29.3.2011. Accordingly once again a draft letter was placed for approval on 3.5.2011 and ultimately final decision was taken. From the above, it can be seen that the Central Government after taking note of relevant factors decided that it would not be in public interest to impose Anti-dumping duty despite the recommendations made by the DA. 35. We are conscious ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ises Limited and another reported in (2011) 1 Supreme Court Cases 640, decision of the Central Government by which Sugar Industry was de-licensed under the Industries(Development and Regulation) Act, 1951 came up for consideration before the Apex Court. Examining challenge to the judgement of the High Court quashing such an order of the Government, the Apex Court observed that it is settled law that in areas of economics and commerce, there is far greater latitude available to the executive than other matters. Court cannot sit in judgement over the wisdom of policy of the Legislature or the executive. It was observed as under : "39. We should not be understood to have meant that the judiciary should never interfere with administrative decisions. However, such interference should be only within narrow limits e.g. when there is clear violation of the statute or a constitutional provision, or there is arbitrariness in the Wednesbury sense. It is the administrators and legislators who are entitled to frame policies and take such administrative decisions as they think necessary in the public interest. The Court should not ordinarily interfere with policy decisions, unless clearly illeg ..... X X X X Extracts X X X X X X X X Extracts X X X X
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