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2019 (6) TMI 1249

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..... is stage need not go into the aspect of the tribunal s power to issue direction to the Central Government in exercise of the power u/s.9C(3) for extending the anti dumping duty notification. The vital facts and time-line of the instant case are itself sufficient to indicate that the remedy of appeal in a present case could not have been said to be an efficacious remedy so as to give sufficient opportunity to the petitioner for seeking appropriate relief after availing the opportunity of putting forward their case. The impugned Final Finding recorded in the Notification dated 01.04.2019, cannot be said to be strictly in accordance with the provision of Rule 23 of the Rules, as there is non-advertance to the material placed on record and there is non- compliance with the principle of natural justice as no requisite information was made available and the conclusions are not supported by the material on record - we are left with no other alternative, but to remand back the matter to the concerned authority after quashing and setting aside the same for reconsideration on the aspects which have been mentioned herein above and record its finding, as the extended period of notification .....

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..... what is essentially under challenge is the final findings No.7/18/2018-DGAD dated 01.04.2019 passed by the respondent no.2 - Designated Authority on account of which the application of the petitioner under 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 read with Section 9A(5) of the Customs Tariff Act, 1975 for the purpose of continuation of anti- dumping duty on the imports of Ductile Iron Pipes originating in or exported from China PR was rejected and the Designated Authority held that anti dumping duty on the product need not be continued hereafter. 3. Facts in brief, as could be gathered from the memo of petition, deserve to be set out as under: 3.1 The petitioner had filed an application under Rule 5 of the Customs Tariff (Identification, Assessment and Collection of Anti-Dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995 (hereinafter referred to as the Rules for the sake of brevity) for initiation of anti- dumping investigation into imports of Ductile Iron Pipes (hereinafter referred to as the 'subject goods' .....

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..... w investigation concerning imports of subject goods from the subject country. 3.7 Being aggrieved by the order dated 17.05.2018 passed by the respondent no.2, petitioner filed Special Civil Application No.12368 2018 before this Court praying for a direction to the respondent no.2 to initiate the sunset review investigation. The said petition was allowed vide judgment and order dated 26.09.2018 by setting aside the impugned order dated 17.05.2018, as the same was without reasons and the respondent authority was directed to decide the application requesting a sunset review afresh, in accordance with law, within six months from the date of receipt of the said order and the period of anti dumping duty, which ceases to have effect on and from 09.10.2018 was ordered to be extended. 3.8 The respondent no.2, despite direction of this Court did not initiate the sunset review investigation. Hence, the petitioner was constrained to move Misc. Civil Application in Special Civil Application No.12368 of 2018 on 08.10.2018, praying for an immediate direction to the respondent no.2 to comply with order dated 26.09.2018 passed by this Court in Special Civil Application No.12368 of .....

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..... port of the Subject Goods from the Subject Country. 14.09.2007 The respondent no.1 accepted the recommendations of the respondent no.2 and imposed definitive anti-dumping duty vide Custom Notification No.103/2007 dated 14.09.2007. 07.09.2012 The respondent vide Initiation Notification No.15/1006/2012-DGAD dated 07.09.2012 initiated the first sunset review investigation concerning imports of the Subject Goods from the Subject Country. 04.09.2013 The respondent no.2 vide its final findings no.15/1006/2012-DGAD dated 04.09.2013 recommended continuation of anti-dumping duty for a further period of 5 years. 10.10.2013 Respondent no.1 accepted the recommendation of Page No.71- 72 Respondent no.1 vide its Custom Notification No.23/2013-Customs (ADD) dated 10.10.2013 and continued imposition of anti-dumping duty for a further period of 5 years till 09.10.2018. March 2018 .....

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..... d the second sunset review investigation concerning imports of the Subject Goods from the Subject Country. 09.10.2018 The respondent no.1 also complied with such directions and issued Customs Notification No.51/2018-Customs (ADD) dated 09.10.2018 extending duties by only 6 months viz. till 09.04.2019. 25.01.2019 The respondent no.2 conducted an oral hearing on 25.01.2019 whereby the petitioner was asked to present its case and make its submissions. 08/09.03.2019 The respondent no.2 visited the premises of the petitioner to conduct an on-the-spot verification of the documents and information submitted by the petitioner and issued its verification report. 19.03.2019 The respondent no.2 issued the disclosure statement in terms of Rule 16 of Anti-dumping Rules. 25.03.2019 The petitioner submitted its comments on the disclosure statement. 01.04.2019 The responden .....

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..... that the present Special Civil Application is maintainable in view of the following grounds: i. It appears from the scheme of Section 9C that it only gives power to the tribunal to confirm, modify or annual the order appealed against. The said power to confirm, modify or annual would have been rendered meaningless if the duties would have been lapsed during the pendency of the Appeal. In terms of the settled law declared by the Hon'ble Supreme Court in the case of Kumho Petrochemicals (Civil Appeal No.008312 of 2017). Further, the procedural requirement of service to all the respondents in and outside India for listing of the Appeal would have left the petitioner with no time by arguing its appeal finally. In any case, the power to grant stay is not specifically conferred. Assuming but not admitting that such power does exist, even then the same was required to be exercised before the expiry of the duty which as aforesaid was not possible in the facts of this case. ii. At the time of filing of the petition, the duties were due to expire within a week and therefore, intervention of the Court was needed to grant interim extension of the duties. However, si .....

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..... failed to disclose to the petitioner methodology adopted in construction of normal value and the dumping margin. The petitioner submitted that the data and figures worked upon the respondent no.2 could not have been kept confidential from the petitioner as respondent no.2 has no right to seek confidentiality under Rule 7 as per Hon'ble Supreme Court decision in the case of Reliance Industries. 6. The petitioner submitted that the respondent no.2 erred in reaching conclusions on export price in the impugned findings. It was submitted that the respondent no.2 himself recorded that the import data was unreliable due to misclassification of import item which apparently in his own words was not a like article. Despite such observations, adjustments were made to this data to reach absurd results on export price and hence the conclusion reached on the basis of such data cannot hold ground. Clearly, the analysis of the respondent no.2 was based on negligible imports in the context of domestic market and that too of dissimilar product which amounts to no imports at all leading to the situation identical to one of 2013. 7. The petitioner submitted that there was st .....

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..... by it, erroneously found such evidences inconclusive to establish the likelihood of the surplus capacities to find their way into India. The petitioner submitted that the legal requirement is only to establish the likelihood or preponderance of probability that the surplus goods are likely to come into country. However, contrary to legal requirement, the respondent no.2 carved out a test that the petitioner must establish beyond any doubt that the surplus capacity would find its way in India. The test applied is contrary to plain meaning of the word, likelihood under the Act and the Rules and is a patent error of law going to the root of the matter. 13. The petitioner submitted that the respondent no.2 failed to appreciate that the improvement in the economic parameters of the petitioner was only on account of the anti- dumping duties in place against the imports of the subject goods. The petitioner refuted the submission of the respondent no.2 that there was no injury being faced by the Domestic Industry. The petitioner submitted that the present case being one related to sunset review of the duties already in place, the absence of current injury becomes irrelevant .....

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..... bmission by any of the Chinese producers/exports. In the absence of cooperation from the Chinese exporters/producers, the Authority determines to construct the normal value on the basis of facts available. 32. The constructed normal value so determined is as Rs.*** per MT (USD *** per MT) Comments The methodology used for the computation of normal value has not been disclosed to the petitioner as against the full disclosure of methodology in the earlier case. Determination of export price 1st (earlier) Sunset review Findings 37. The Authority notes that there are no exports of the subject goods to India from the subject country in the entire injury investigation period including the POI and the post POI. In the absence of exports to India by any of the Chinese exporters including the responding producer/exporter SGPL from China, the Authority has not been able to determine the ex-factory export price for the POI and the post POI period. Present Sunset review Findings 35. The A .....

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..... if the excess capacity is diverted to India, injury to Domestic Industry imminent. Non-participation of Chinese Exporters 1st (earlier) Sunset review Findings 71. All other interested parties who could have given valuable information to the Authority have preferred not to cooperate with the Authority in the present investigations. The Authority notes that the relevant information from the interested parties is more important in sunset review investigations where an assessment of likelihood is required to be made. Present Sunset review Findings No such examination. Comments Despite non-cooperation by Government of China and producers, exporters and importers, adverse inference is drawn against domestic industry for absence of information. Likely export price 1st (earlier) Sunset review Findings 72..... As regards the submission of SGPL that only the weighted average price to rest of the worl .....

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..... t was specifically recorded that the price of export was abnormal. It was also recorded in paragraph 35 of impugned Final Findings (page 58 of petition) by respondent no.2 that the importer statics of the this item points to either misclassification of the import item or it not being the like article. Likely export price and dumping margin 1st (earlier) Sunset review Findings 74. The likely ex-works export price of the exports from China PR is determined by the Authority by making appropriate adjustments to the likely net export price on account of inland freight and insurance, commission, port expenses, bank charges and VAT adjustment. After making these adjustments, the likely adjusted ex-factory export price determined is as US$*** per MT. Likely Dumping Margin during POI. US$ (per MT) Normal Value *** Net Export Price *** .....

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..... is seen, there is every likelihood that if the anti-dumping duties are revoked, the percentage of dumped as well as injurious exports to India are likely to increase and take away major portion of the India demand. Further, even if the export behaviour and production capacity of the only responding interested party SGPL is seen, it is noted that as per the information available with the Authority, the known capacity of SGPL is 17,00,000 MT and the production during the POI is only 3,25,367 MT. This leaves surplus capacity of 13,74,633 MT with SGPL alone which is almost double the demand in India. This available surplus capacity can be utilised by SGPL for likely exports to India at the minimum dumped and injurious export price to the world so determined above. (Emphasis Added) Present Sunset review Findings No such examination. Comments The procedure and conclusions reached in the context of Surplus Capacity in earlier Final Findings are not followed in impugned Final Findings. In fact, a diagonally opposite stance has been taken by the Designated Authority despite exactly .....

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..... thority determines that if the existing duties are removed, there is every likelihood of the subject goods coming to India at dumped prices which are further likely to cause injury to the domestic industry. Present Sunset review Findings No such examination. Comments Despite similar facts and circumstances, a contradictory approach taken by the Authority in the impugned Final Findings. Likely price undercutting and price underselling 1st (earlier) Sunset review Findings 80. Having regard to the contentions raised, information provided and submissions made by the interested parties and facts available before the Authority and on the basis of above analysis including analysis of likelihood of continuation of dumping and injury, the Authority determines that : (i) The constructed Normal Value and the likely net export price to India clearly indicate the likelihood of dumping from China PR if the existing duties are allowed to be revoked. (ii) The likel .....

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..... Despite submission of information regarding likely price undercutting and likely price underselling, no such procedure is followed in impugned Final Findings. 5. In support of aforesaid contentions, learned counsel for the petitioner has relied upon the following Judgments: (i) In case of Nirma Limited Vs. Union Of India, reported in 2017 (358) E.L.T. 146 (Guj.). Special emphasis was given to paragraph nos.38 to 38.2; (ii) Decision of this Court rendered in Special Civil Application No. 12368 of 2018 dated 26.09.2018; (iii) Order dated 8.10.2018 passed by this Court in Misc. Civil Application No.1 of 2018 in Special Civil Application No. 12368 of 2018. 6. Learned counsel for the respondents mainly contended that in terms of Section 9(C) of the Customs Tariff Act, 1975, the alternative remedy in form of Appeal to CISTAT is available and therefore, this Court may not go into the nitty- grity of the facts incorporated in the Final Findings and that the Final Findings is rendered by the respondent no. 2 - Designated Authority after affording full opportunity and in consonance with the provisions o .....

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..... out by the designated authority and has questioned merit of investigation by raising certain contentions and questioning certain data. The Hon'ble High Court under article 226 of the Constitution of India may not go into such questions but the same can be considered by the Hon'ble Tribunal as the Division Bench of the Hon'ble Tribunal consist of one judicial member and one technical member who can examine the technical aspects of the final findings in a better way as the purpose behind constitution of division bench having a technical member is to see that even technical aspects also can be examined throughly. 6. In support of submission about availability of alternative remedy and hence the petition may not be entertained, the respondents are relying upon following judgments. 1. 2018 (362) ELT 994 (DEL) Jindal Polyfilms Ltd. V/s. Designated Authority . Para 35 to 42 are relied on by the respondent. 2. UTOKUMPU OYJ. Vs. Union of India Para 15 to 23 are relied on by the respondent. In view of aforesaid judgments a petition under article 226 is not maintainable and the petitioner should be relegated to alternative remedy. .....

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..... in China PR. b. The investigation authority needs to determine the likely export price to India on the basis of export prices of the subject goods from China PR to an appropriate third country such as Vietnam, Sri Lanka and Turkey. c. 70% of the quantities exported from China PR to other countries are at an injurious price and around 83% of the quantities sold to other countries are at dumped prices, thereby proving beyond an iota of doubt that there is every likelihood that at these prices, if the excess capacity is diverted to India, injury to the domestic industry is imminent. d. Producers of the subject goods in China PR have significant excess capacities. The total capacity, for producing the subject goods, of around 34 producers in China PR is around 72,70,000 MT. This is more than 3 times the capacity of the domestic industry in India and 4.6 times and 4.2 times the demand and production of the subject goods in India. If such quantities are diverted to India at the likely prices, injury to the domestic industry is imminent. The legal requirement in this regard is to only establish the likelihood or preponderance of probability that the surpl .....

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..... extent that in para 35 of Affidavit in reply a table also was produced showing comparison between two investigations herein below the table is not produced but has been referred but everything else is reproduced as it is. 35. The respondent no.2 however submits that the facts and circumstances in the subject sunset review investigation when compared to that in the previous sunset review investigation are not entirely similar. There are key difference between the facts and circumstances of the previous sunset review investigation and that of the impugned sunset review investigation as elaborated below: a. Firstly, at the time of the previous sunset review investigation, anti-dumping duties against the subject imports were in force for five years. At the time of the impugned sunset review investigation, anti-dumping duty was in force for more than 10 years. This would have greatly reduced the proclivity for exporters from China PR to export the subject goods to India. b. Secondly, in the previous sunset review investigation, the economic parameters of the domestic industry had not improved, were weak. However, in the current sunset review investigati .....

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..... imposing anti-dumping duty of the subject matter for a period of 5 years; (iii) On 07.09.2012,the respondent vide Initiation Notification No.15/1006/2012-DGAD initiated the first sunset review investigation concerning imports of the Subject Goods from the Subject Country. (iv) On 04.09.2013, the respondent no.2 vide its final findings No.15/1006/2012-DGAD recommended continuation of anti-dumping duty for a further period of 5 years. (v) On 10.10.2013, the respondent no. 1 vide its Custom Notification No.23/2013-Customs (ADD) continued imposition of anti-dumping duty for a further period of 5 years till 09.10.2018. (vi) In March, 2018, the petitioner once again approached the respondents with a duly substantiated application for initiation of second sunset review investigation under Rule 23(1B) of the Rules. (vii) The petitioner further submitted additional evidences/submissions on 14.05.2019 to prove that the cessation of the existing anti-dumping duties would lead to the continuation/recurrence of dumping and injury from the subject country. (viii) The details of the submissions, as gathered from the written submi .....

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..... bove, it may be note that: (i) It may be seen from the above that if the goods start flowing into India at landed value based on export price to other countries, the Domestic Industries will certainly start suffering losses. The calculation submitted by the Domestic Industry on the basis of the actual transaction-wise data clearly reveals that more than 70% of the quantities exported from China to other countries are at a price which would support Domestic Industry's contention that the Chinese goods would land into India at a price which would have a positive injury margin. (ii) Similarly, the calculations submitted by the Domestic Industry reveals that around 83% of the quantities sold to other countries are at dumped prices. This proves beyond an iota of doubt that there is every likelihood that at these prices, if the excess capacity is diverted to India, injury to Domestic Industry is imminent. 16. In view of the above, it is amply clear that the dumping margin as well as the injury margin are likely to be positive without any doubt if the anti-dumping duties are not extended. In such a scenario, withdrawal of anti-dumping duties will certa .....

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..... The importer's questionnaire was sent to the following known importers/users/user associations of the subject goods in India for necessary information within the prescribed time in accordance with Rule 6(4) of the Rules: 1. Pratibha Industries Limited 2. J V Gokal Co. Pvt. Limited 3. Gammon India Limited 4. Larsen Toubro Limited 5. SPML India Limited ix. None of the above-mentioned importers/users/user associations or any other interested party responded tot he questionnaire or the initiation notification. x. The investigation was carried out for the period starting from 1st January 2017 to 31st December 2017 (12 months), i.e., the period of investigation (POI). The examination of trends in the context of injury analysis covered the period 2014-15, 2015-16, 2016-17 and the POI. xi. The Authority kept a non-confidential version of the petition and other submissions presented by various interested parties from time to time in the form of a public file maintained by the Authority and kept the same open for inspection by the interested parties as per Rule 6(7) of the Rules. xii. .....

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..... le within 73030030 and 73030090 of the Customs Tariff Act. The various applications of DI Pipes are in: a. Transmission of raw, portable and sea water at high pressures. b. Distribution of potable water and gas. c. Disposal of domestic and industrial effluents. d. Fire-fighting systems. 15. The Authority notes that this being Sunset review, the scope of the product under consideration remains unchanged. The Authority further holds that the DI pipes manufactured by the domestic industry and those produced in China PR are like articles in terms of Rule 2(d) of the Anti-dumping Rules. ..... Examination by the Authority 24. The Authority notes that the purpose of a sunset review is to examine as to whether there is any likelihood of continuation or recurrence of dumping or injury in the event the anti-dumping duties are revoked and for this purpose all the relevant information is to be examined. 25. The Authority notes that each relevant issue raised in the submissions of the Domestic Industry will be dealt with at appropriate places in this disclosure statement. E. Method .....

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..... he abovementioned criterion is as under: Unit Sri Lanka* Turkey* Vietnam* Quantity MT 11838 7982 28923 FOB Prices USD/MT *** *** *** Exchange Rate USD/INR 66.04 66.04 66.04 FOB Prices RS/MT *** *** *** Commission Rs/MT *** *** *** Bank Charges Rs/MT *** *** *** Port Expenses Rs/MT .....

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..... er for exporting material to India, in order to put normal value and export price at the same level of trade. The export price to be determined is as ₹ 1,19,895 per MT. Particulars Unit To India Constructed Norma Value Rs/MT *** Ex-factory export price Rs/MT 119895 Dumping margin Rs/MT *** Dumping margin % *** Dumping margin Range (75) - (65) G. Assessment of Injury and Examination of Casual Link Assessment of Injury Submissions made by the Domestic Industry 35. Domestic Industry has made following submissions: (i) Since there have been no reliable imports of the subject goods either during the Period of Investigation or the injury invest .....

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..... ce of the part information supplied by the sole respondent, namely, SGPL. The Authority, there- fore, determines the normal value in accordance with para 7 of Annexure 1 to the Rules. . 36. The Authority has relied on the international prices of major raw material along with the consumption norms, conversion cost and SGA of the most efficient domestic producer. Profit @ 5% on the cost of production has been added to arrive at the constructed normal value. By adopting this method, the constructed normal value is determined as US$*** per MT...... Export Price 37. The Authority notes that there are no ex- ports of the subject goods to India from the subject country in the entire injury investigation period including the POI and the post POI. In the absence of exports to India by any of the Chinese exporters including the responding producer/exporter SGPL from China, the Authority has not been able to determine the ex-factory export price for the POI and the post POI period. Dumping Margin 38. Since there are no exports of the subject goods to India from the subject country in the entire injury investigation period including t .....

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..... be considered as the most appropriate by the Authority as China ex- ports 32% of D I Pipes to Saudi Arabia and the significance of water distribution is similar in the two countries. The Authority does not find any merit in this submission made by the Domestic Industry and considers exports to worlds as per the transaction wise data of HS International Inc. (impexpl.com) Sydney, Australia. As regards the submission of SGPL that only the weighted average price to rest of the world should be taken into consideration for the purpose of estimating the likely export price to India, the Authority notes that even if weighted average price of exports from China to globally is above normal value, the same does not mean that dumping from China is unlikely in the event of cessation of anti dumping duty, particularly in a situation where a significant part of these ex- ports are at dumped prices and are likely to cause injury to the domestic industry. Thus, any determination made on the basis of weighted average price of exports could be highly misleading. The facts of the present case in fact have established that even when weighted average price of exports is above normal value, a signifi .....

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..... o conclude that the Chinese producers have substantial production capacities. These capacities are in themselves more than the total production capacity of the domestic industry. The importance of such huge production capacities and exports by the Chinese producers/exporters cannot be ignored. 80. Having regard to the contentions raised, information provided and submissions made by the interested parties and facts available before the Authority and on the basis of above analysis including analysis of likelihood of continuation of dumping and injury, the Authority determines that: i. The constructed Normal Value and the likely net export price to India clearly indicate the likelihood of dumping from China PR if the existing duties are allowed to be revoked. (ii) The likely export prices from China PR clearly indicate the likelihood of injury to the Domestic Industry in the form of price undercutting as shown below. Likely Under Cutting During POI US$ (per MT) NSR *** Landed Value (Likely) .....

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..... ht of the aforesaid indisputable aspects set-out hereinabove. The position of law in respect of the remedies on final findings is now clear. The decisions of Supreme Court in respect of Jindal Poly Films Ltd., Vs. Designated Authority reported in 2018 (362) E.L.T. 994 (Del.) and OUTOKUMPU OYJ Vs. Union of India (Supra) have been cited for contending that the alternative remedy in terms of Section-9C of the Act may persuade this Court in not interfering with the final findings. The judgments cited at the bar are of Delhi High Court and there cannot be any dispute to the proposition that the final finding in fact is amounting to determination or review regarding the existence, degree and effect of any dumping in relation to import of any article and hence, it may not have to await the formal order by the Central Government of accepting the same and issuing notification based thereupon. The learned counsel for the petitioner resisted the submission qua alternative remedy by inviting court s attention to the provision of Section-9C of the Act, which reads as under. SECTION 9C. Appeal. - ( 1) An appeal against the order of determination or review thereof regarding the e .....

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..... is to the final findings on sunset review which does not require any issuance of further notification, if the final findings are in negative then, the provision of Section-9C(3) does not envisaged any further positive direction to the Union of India or the Central Government for extending the anti dumping duty notification. 10. The learned counsel for the petitioner further submitted that Section-9C of the Act even if is said to be an alternative remedy, but the same cannot be an alternative remedy so efficacious as to relegate the petitioner in a given case to the tribunal. The efficacy of the remedy is required to be adjudged in the light of the circumstances of a matter. In the instant case, looking to the time factors and the authorities reluctance in issuing even the requisite notification for commencing the sunset review and the fact that the anti dumping duty extension was come to an end on 09.04.2018 and the impugned final findings were rendered on 01.04.2019 leaving only 7 to 8 days time for availing the remedy in itself would be an indication that the appellate remedy as sought to be canvassed under Section-9C cannot be said to be efficacious remedy. 1 .....

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..... . 13. The annexures to the submissions clearly indicate that how and in what manner the designated authority has jumped to the conclusion without the conclusion being supported by the material on record. The Court has already set-out herein above the relevant abstracts which speaks for itself which would rather clearly indicate that the designated authority failed in dealing with the contentions and submissions raised by the petitioner. The Court is mindful of the fact that the Court need not examine the matter as if an appellate authority over the findings recorded by the designated authority but in case if the findings recorded without following the proper procedure as envisaged under Rules especially Rules-6, 7, 8, 10, 11. The petitioner's counsel has successfully demonstrated that the designated authority has failed in clearly indicating that how determination of normal value is arrived at. The likelihood of dumping and injury have not been dealt with. The surplus capacity in China has not been adverted to at all and the confidentiality though not claimed has affected the entire process. The counsel for the petitioner successfully established that the non-advertenc .....

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..... e of recording its final finding afresh in accordance with the observations made herein above strictly in accordance with the provisions of Rule-23 of the Rules and after affording full opportunity to the parties and complying with the principles of natural justice and respondent no.1 shall appropriately issue notification extending the anti dumping duty on the product in question, till the final findings are rendered. 17. At this stage, it is required to be noted that as per the provisions of Section-9A(5) the extendable period of anti dumping duty is 09.10.2019. In that view of the matter, the respondent no.2 shall complete the process of rendering final findings latest by 15.09.2019 and the respondent no.1 shall extend the anti dumping duty by suitable period in accordance with the provision of Section-9A and the Rules so as to prevent the entire exercise becoming infructuous. 18. In view of the aforesaid discussion, the impugned final findings dated 01.04.2019 are hereby quashed and set aside. The petition is allowed. 19. Shri Desai, learned counsel for the respondents makes a request for staying of the order for four weeks to approach the Supreme Cou .....

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