By T.D. Satish
In the Indian context, the scheme of anti-dumping provisions under the Customs Tariff Act, 1975 (“the Act”) and the Anti-Dumping Rules (“AD Rules") [see end note 1] broadly divide the proceedings into two forms – original investigation and reviews. The procedure followed by the Designated Authority, Anti-Dumping (“DA”) in a review is more or less similar to that followed in original investigation as the DA examines dumping and injury de-novo in a review in addition to examining likelihood of recurrence of dumping and injury. In view of similarity of procedure followed, the DA considers the time limit in both the proceedings as same, even though the anti-dumping provisions provide for different time periods for both kind of proceedings.
Section 9A (5) of the Act and Rule 23(1B) of the AD Rules provides that anti-dumping duty once imposed shall be in force for a period not exceeding five years from the date of imposition. The Designated Authority may also initiate and conduct a mid-term review before the expiry of the five year period, say after two years or three years from the date of imposition of Anti-dumping Duty, wherein duty may be continued, modified or revoked as the case may be. In case of sunset review, the DA is required to initiate the review before the expiry of existing anti-dumping duty. In such a case, second proviso to Section 9A(5) empowers the Central Government to extend the levy of 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.
Rule 23(1) of the Anti-Dumping Rules is pari-materia to Article 11.1 of ADA, which provides that “an anti‑dumping duty shall remain in force only as long as and to the extent necessary to counteract dumping which is causing injury.”
Article 11.1 does not impose independent obligations upon Members, but rather, establishes the general principle that duties may only continue to be imposed so long as they remain necessary, which principle is operationalized in Articles 11.2 and 11.3 [see end note 2]. Articles 11.2 and 11.3 which relate to mid-term reviews and sunset reviews respectively, are similar to Rule 23(1A) and 23(1B) of the Anti-Dumping Rules respectively. Thus, in terms of interpretation by WTO Panel, the general principle enshrined in Rule 23(1) has to be read in conjunction with Rules 23(1A) and 23(1B), as the case may be.
It is interesting to note that though the law-makers introduced Rules 23(1A) and 23(1B) in 2011 by suitably modifying Rule 23(1), they omitted to amend Rule 23(2), which had reference to Rule 23(1). Resultantly, Rule 23(2) which was framed with respect to old Rule 23(1) continues to apply to new Rule 23(1) only but not to recently introduced Rule 23(1A) and Rule 23(1B). Resultantly, though the time limit prescribed under Rule 23(2) should have been applicable to all types of review covered under Rules 23(1A) and 23(1B), however, in the absence of specific mention of both the rules, Rule 23(2) is only applicable to new Rule 23(1), which does not even mention the term “review”.
Given the inadvertent omission on the part of the legislators to amend Rule 23(2) suitably, there is now an anomaly as explained above subsisting in the Anti-Dumping Rules with regard to time limit applicable to reviews. The present article examines the relevance of Rule 23(2) considering the rule as it should have been
and the pari-materia provisions under Rule 23(3), that are to apply in case of reviews.
Time-limits in reviews – The law
Unlike original investigations, where the time limit under Rule 17 prescribed is positively worded; in case of reviews (Mid-Term Review or SSR), Rule 23(2) of Anti-Dumping Rules is negatively worded by providing that such reviews shall be concluded within a period “not exceeding
twelve months from the date of initiation of such review”.
The scheme of the anti-dumping duties and proceedings as a whole also substantiates the same considering the fact that the extension of period of anti-dumping duty during the pendency of sunset review is also for “one” year under the second proviso to Section 9A(5). Considering the fact that the Central Government may also take a substantial time to take a decision on the recommendation of the DA, Rule 23(2) requires that the reviews shall be concluded within a period not exceeding twelve months from the date of initiation of such review.
The importance of adhering to the prescribed time limit of 12 months for completion of review is also buttressed by the communication [see end note 3] from Central Government to the DA, which requires the DA to initiate the sunset review, send the proposal for extension of anti-dumping duty for one year and the conclude the review well in advance, so as to enable the Central Government to take a decision on the recommendations; and in case of affirmative decision, continue the anti-dumping before expiry of extended anti-dumping duty.
Whether time limit in review extendable beyond 12 months?
Rule 23(2) of Anti-Dumping Rules specifically provides for a time limit for completion of review initiated and conducted by the Designated Authority. However, Rule 23(3) also provides that the provisions of, inter-alia, Rule 17 shall be mutatis mutandis applicable in case of review. Rule 17(1) provides the period within which the DA is required to conclude the original investigation
. Rule 23(2) provides the time period for the investigating authorities for the concluding reviews
. Rule 23(2) prohibits any extension of the period to conclude the review. Application of proviso to Rule 17 in case of reviews may result in following issues:
Issue 1: If the proviso to Rule 17(1) is borrowed for the purpose of Rule 23, it would render the provision of Rule 23(2) as redundant. If Rule 17(1) and its proviso are borrowed in-toto for the purpose of Rule 23, then there would not have been any requirement to frame Rule 23(2) for the completion of review separately.
Issue 2: Rule 23(2) is worded negatively and states that the any review shall be concluded within a period ‘not’ exceeding twelve months. Thus, while Rule 17(1) positively specifies a time period of one year because such time period is subject to extension under the proviso, Rule 23(2) on the other hand, stresses on the strictness of the time period available for review by clearly stating that it is shall ‘not’ exceed twelve months. It is settled position in law that if the rule is clear and does not present any ambiguity then such meaning has to be adopted.
Issue 3: Rule 23(3) borrows certain other rules from the AD Rules such as Rules 6, 17, 19, 20 including Rule 17 which are applicable mutatis mutandis in case of review. However, by specifically inserting a provision prescribing a time limit in case of reviews, the requirement under Rule 17 in as much as it relates to period available for the conclusion of the investigation will not be applicable for conclusion of a review.
The term “mutatis mutandis”, which means “All necessary changes having been made; with the necessary changes”
[see end note 4] used in Rule 23(3) of the Anti-Dumping Rules does not mean to apply the borrowed rules to amend
the substantial provisions in the rule which borrowed. The term is to be understood as the rule of ‘adaptation’ and not a rule of ‘adoption’ [see end note 5]. Thus, Rule 17 is required to be borrowed for the purpose of Rule 23 with necessary changes and read in conjunction with Rule 23(2), which will make it clear that with the specific timeline for the review provided under Rule 23(2), Rule 17 will not be applicable.
Practice adopted by India
The Designated Authority invariably extends the time limit beyond 12 months in case of review proceedings despite Rule 23(2) specifically prohibiting to do so. The DA has continuously adopted proviso to Rule 17(1) to justify extension of time in case of review. Even the Tribunal in Grauer & Weil (I) Ltd.
v. Designated Authority
[see end note 6] held that time limit in case of a review may be extended. However, the Tribunal in that case did not go into the time limit prescribed under Rule 23(2) of the Anti-Dumping Rules as well as whether the term ‘mutatis mutandis’ in Rule 23(3) allowed borrowing of extension of time under proviso to Rule 17(1) of the Anti-Dumping Rules.
The practice adopted by the DA to extend the time limit by wholly borrowing proviso to Rule 17(1) of Anti-Dumping Rules, is contrary to its practice. In case of a sunset review, the DA ‘mutatis mutandis’
applies other provisions by suitably modifying them but in case of time limit, the proviso to Rule 17(1) is applied as it is, without any change. For example, though Rule 17(1) (b) provides that the anti-dumping duty to be imposed should be equivalent to the lesser of dumping margin or injury margin, however, contrary to the aforesaid rules, on several occasions, the Designated Authority has recommended continued imposition of anti-dumping duty, irrespective of the dumping margin or injury margin so determined in the review.[see end note 7], [see end note 8]. The Designated Authority in these cases, in light of the specific provision under Rule 23(1B) overcame the application of Rule 17(1)(b) while recommending anti-dumping duty.
Perhaps the only way by which DA extends the time period in case of review is by considering that Rule 23(3) will be applicable to all kind of reviews. Thus once Rule 17(1) is applied mutatis mutandis, its proviso also gets applied, which is linked to Rule 17(1). But this interpretation is also debatable as it will give way to new questions such as (i) whether with Rule 17(1), its proviso may also be borrowed; (ii) If both may be borrowed, then whether Rule 23(2) have any significance; and (iii) If time limit under Rule 17(1) may not be borrowed, then whether only its proviso may be borrowed and be read with Rule 23(2)?
Effect & Conclusion
Anti-Dumping provisions mandate that unless there is dumping by exporters leading to injury to the established industry in India, there cannot be any anti-dumping duty imposed. Review proceedings require that in case sufficient evidence exists for non-continuation of anti-dumping duty in a sunset review or for termination/reduction of anti-dumping duty in a mid-term review, the DA is required to make appropriate recommendation in time so that the duty may be terminated/reduced accordingly at the earliest. In other words, if the period to conclude the review is allowed to be extended, collection of anti-dumping duty will continue illegally in an unjustified manner for longer period, though there may not be a need for anti-dumping duty.
Even in case of domestic industry, if the review is extended for a further period of six months and if the existing anti-dumping duty lapses, there would not be an anti-dumping duty protection to the domestic industry after the end of one year as it would break the continuity of the anti-dumping duty, prejudicing the continuation of duty in case of likelihood of continuation of dumping and injury, for a further period of five years.
As said earlier, by not amending Rule 23(2) at the time of amendment of Rule 23(1), Rule 23(2) is stricto-sensu
not applicable to Rules 23(1A) and (1B). However, if both the rules are read in conjunction with Rule 23(1), it will be clear that Rule 23(2) is applicable in case of Rules 23(1A) and (1B) as well. The issue thus remains open ended, which may only be clarified upon a suitable amendment to the rules. Until then, the time limit for reviews in India will remain a hotly contested topic.
[The author is a Senior Associate, International Trade Team, Lakshmikumaran & Sridharan, New Delhi]
Customs Tariff (Identification, Assessment and Collection of Anti-Dumping Duty on Dumped Articles and for Determination of Injury) Rules 1995.
United States - Anti-Dumping Measures on Certain Shrimp from Viet Nam, (DS-429) Panel Report
Office Memorandum F. No. 354/179/2002-TRU (Pt-V) dated August 4, 2014
Black's Law Dictionary (9th ed. 2009)
University of Cochin v. Dr. N. Raman Nair & Ors. (1975) 3 SCC 628
2011 (271) E.L.T. 112 (Tri. - Del.)
Acrylonitrile Butadiene Rubber imported from Korea (2008)
Nonyl Phenol originating in or exported from Chinese Taipei