By Lakshmi Neelakantan
The provisions relating to anti-dumping measures
under the Customs Tariff Act 1975 (“Act”) and the Customs Tariff (Identification, Assessment & Collection of
Anti-Dumping Duty on Dumped Articles and for Determination of Injury) Rules,
1995 (“AD rules”) provide for different time periods for different stages of
proceedings. This article seeks to analyze whether the time period for completing a mid-term or sunset review can be
extended beyond the statutory time period of 12 months, and whether such
extension is in consonance with the Act and AD Rules.
Legal Framework of
Time Period for Investigations and Reviews
Rule 17(1) of the AD Rules provides a period of one year to the
Designated Authority to conclude the original anti-dumping investigation. The
proviso to Rule 17(1) empowers the Central Government to extend further the
period of one year by six months to conclude the investigation in the event
that “special circumstances” exist. Rule 18 of AD Rules provides for the levy
of duty based upon the recommendation issued by the Designated Authority.
Mid-term reviews are dealt with under Rule 23(1A) of AD Rules. Rule 23(1A)
states that the Designated Authority shall review the need for continued
imposition of anti-dumping duty and upon completing such review, the Designated
Authority shall recommend to the Central Government for its withdrawal, where
it comes to a conclusion that the injury to the domestic industry is not likely to continue or recur if the
anti-dumping duty is removed or varied and is therefore no longer warranted.
The scope of a sunset review is somewhat different and is dealt with
under Section 9A(5) of the Act read with Rule 23(1B) of AD Rules. Section 9A
(5) of the Act states that anti-dumping duty shall cease to have effect on the
expiry of five years from the date of imposition of such duty, unless it is
revoked earlier. The first proviso to Section 9A(5) of the Act affirms that if
the Central Government is of the opinion that cessation of the duty is likely
to lead to continuation or recurrence of dumping and injury, then such duty may
be extended for a further period of five years.
Rule 23(1B) of the AD Rules provides that anti-dumping duty, once
imposed, shall be effective for a period not exceeding five years, unless the Designated Authority comes to a
conclusion on a review initiated before 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. Therefore, in a sunset review, the
question that arises for consideration is whether the expiry of the anti-dumping duty in existence is likely to
lead to continuation or recurrence of dumping and injury to the domestic
industry. On the other hand, in a mid-term review, the question that
arises for consideration is whether
the injury to the domestic industry is not likely to continue or recur if the
anti-dumping duty is removed or varied and is therefore no longer warranted.
It is important to note that the second proviso to Section 9A(5) of the
Act provides that the Central Government may extend the levy of the
anti-dumping duty for a period of one year, if the sunset review is not
concluded before the expiry of five years from the date of imposition of the
duty. With regard to both mid-term and sunset reviews which are conducted
pursuant to Rule 23 of the AD Rules, Rule 23(2) is negatively worded and provides
that such reviews shall be concluded within a period not exceeding twelve
months from the date of initiation of such review.
It may be recalled that Rule 17(1) of AD Rules read with the first
proviso to Rule 17(1) provides that the Designated Authority shall, within one
year from the date of initiation of an investigation submit its findings to the
Central Government, unless the Central Government in its discretion extends
further this period of one year by six months. Rule 23(2), which lays down
timelines for reviews, provides that reviews shall be concluded within a period
not exceeding twelve months from the date of initiation of such review.
Interestingly, Rule 23(3) borrows certain other provisions from AD Rules,
such as Rules 6, 17, 19, 20 including Rule 17 which is applicable mutatis mutandis in case of a review.
Therefore, a preliminary question that arises is whether the discretionary
extension of the time period by six months which is provided in the proviso to Rule 17(1), becomes applicable to the
twelve month time period for conducting reviews laid down in Rule 23(2), due to
the mutatis mutandis reference in
Rule 23(3). A reading of Rule 23(3) suggests that the time period for
concluding an investigation under Rule 17(1) may not be applicable to the time
period for concluding a review in Rule 23(2).
One possible reason in support of this interpretation is that the expression
mutatis mutandis means “all necessary
changes having been made; with the necessary changes”[see end note 1].
Therefore, the rule of mutatis mutandis
may be more in the nature of a rule of ‘adaptation’ as opposed to a simple rule
of ‘adoption’. Hence, Rule 17 is required to be borrowed for the purpose of
Rule 23 with necessary changes but in as much as the specific timeline for the
review as provided by Rule 23(2), Rule 17 may not be applicable.
As far as a sunset review is concerned, the following reasons support the
interpretation of Rules 23(1B) and (2) that the time period for completing the
same cannot be extended beyond 12 months:
(i) First, the extension of the period of anti-dumping
duty during the pendency of sunset review is for a period of “one year”
under the second proviso to Section 9A(5) of the Act. It is relevant to
note that if a duty is not extended before expiry, then it amounts to
reviving a dead duty which is not in consonance with Section 9A(5) of the
Act and Rule 23(1B) of AD Rules. Bearing in mind this fact, the purpose of
a sunset review (determining the
likelihood of continuation or recurrence of dumping and injury) would be
better served if the review was completed well in advance of the date of
expiry of the duty. Furthermore, the Central Government may take some time
to take a decision on the recommendation of the Designated Authority. In
order to ensure that the Ministry of Finance gets sufficient time to
consider the recommendation of the Designated Authority so that duty can
be levied if need be, before the expiry of the existing duty, the sunset
review may have be completed well in time. Probably, Designated Authority
may complete the sunset review before expiry of 9 months from the date of
completion of five year period leaving three months to the Ministry of
Finance for taking a final decision.
In any case, if the Designated Authority takes 12 months to
complete the investigation, it will leave no time for the Finance Ministry
to consider the recommendations and impose the duty before expiry of 12
months. That being the case, the
question of extending the period for completing the review beyond 12
months does not arise.
(ii) Second, it can also be seen from the wording of the
above provisions that the time periods laid down in Rules 17(1) and 23(2)
of AD Rules are mandatory in nature. Any relaxation in the time period
will disturb the legitimate expectations of interested parties and
prejudice their economic interests.
(iii) Third, in case sufficient evidence exists for
non-continuation of anti-dumping duty in a sunset review, the Designated
Authority makes the appropriate recommendation in time and the duty may be
withdrawn accordingly at the earliest. In case the time period for
concluding the investigation is allowed to be extended, the collection of
anti-dumping duty may be carried out without due justification.
As far as a mid-term review is concerned, it is essential to note that
its primary objective of ascertaining the change in circumstances, which
necessitates the modification of removal of duty, may not be served if the time
period is extended and it is not possible to correctly ascertain the change in
circumstances after the lapse of an inordinately long time period.
It can be seen that the practice of the Designated Authority and Ministry
of Finance with respect to extension of time period for reviews is required to
be corrected. This issue is extremely critical both from the standpoint of the
exporter as well as the domestic industry. When the time
period for completing a review is extended, it prejudices the exporter to the
extent that it distorts market conditions.
Equally, such extension of time period deprives the domestic industry of
protection for a period of six months when the review is being conducted by the
Designated Authority and an additional three months for the Ministry of Finance
to take a final decision about the continuation of duty.
Perhaps, it will be appropriate for the Designated Authority to issue a
public notice clarifying the timelines applicable for completing a sunset
review as well as a midterm review.
[The author is an Associate,
International Trade Team, Lakshmikumaran & Sridharan, New Delhi
- Black's Law Dictionary (9th