Significant legal and practical developments in trade remedy investigation

15/12/2022 08:53 - 55 Views

As stated above, the Designated Authority (DA) conducts trade remedy investigation, and the Ministry of Finance in its discretion may accept the recommendation imposing definitive duty. The decision of the Ministry of Finance is statutorily appealable to the CESTAT. However, determination or imposition orders are also amenable to judicial review by the tribunals, high courts and the Supreme Court of India (India's highest court).

 

From January 2021 to December 2021, the DGTR issued 34 final findings in the original anti-dumping investigations and recommended levy of duty in 32 original investigations. However, the Ministry of Finance only accepted 15 recommendations and levied definitive duties. The recommendations to levy duty were rejected in the remaining 17 final findings. During this period, the DGTR issued 21 anti-dumping expiry review final findings and recommended continued imposition of duty in 19 final findings. The Ministry of Finance, however, only accepted four positive expiry review recommendations and decided not to implement duty recommended by the DGTR in the remaining 15. Similarly, in the countervailing duty investigation, the Ministry of Finance accepted only one recommendation and decided not to accept the recommendation in other two investigations. The sole safeguard investigation concluded by the DGTR from January 2021 to December 2021 also resulted in no levy of duty. As per legal provisions, the Ministry of Finance issues a notification when recommendation to levy duty is accepted. In the event of non-acceptance of a recommendation, the Ministry of Finance normally issues an office memorandum that is an interdepartmental communication addressed to the DGTR.

 

Since the Ministry of Finance did not accept positive recommendations in a majority of findings, numerous Indian producers filed a statutory appeal before the CESTAT impugning the decision not to accept the DGTR recommendation to levy definitive duty. On this critical issue, the CESTAT in its judgment titled Jubilant Ingrevia Limited v. Union of India & Ors held that the Office Memorandum issued by the Ministry of Finance not accepting the DGTR recommendation is a non-speaking order and is unsustainable. The CESTAT extended relief to the Indian producer and remitted the matter to the Ministry of Finance for a fresh decision.

 

In All India Laminated Fabrics Manufactures Association v. Designated Authority & Ors, the domestic industry filed an appeal before the CESTAT against decision of the DA recommending withdrawal of anti-dumping duty. The appellant specifically submitted that the DA committed an error in rejecting the market research report submitted by the domestic industry for evaluation of likelihood analysis. In reply, the DA submitted that the market report was not considered since the complete information and credentials of the market research report were not made available by the appellant during the investigation. In line with the appellate body decision in US – Corrosion-Resistant Steel Sunset Review, the tribunal rejected the claim of the appellant and held that the DA was justified in not placing reliance on the unauthenticated report. Based on overall evaluation of the economic parameters, the CESTAT upheld the final findings recommending discontinuation of duty.

 

In one of its cases, the DGTR in an ongoing investigation concerning solar cells and modules rejected as many as 63 questionnaire responses filed by the foreign producers. In this investigation, the DA had not extended the timeline for filing responses despite multiple extension requests and rejected questionnaire responses filed after the stipulated time prescribed by the DGTR. Consequently, numerous foreign producers filed writ petitions before the High Court. The High Court in its judgment titled Shanghai JA Solar Technology Co Ltd & Ors v. Union of India granted relief to the foreign exporters and directed the DGTR to accept belated responses filed by the petitioners. 

 

As the world witnessed global supply chain issues during the pandemic, the government took multiple steps to boost trade and the economy. In 2022, the Ministry of Finance suspended trade remedy measures on an array of steel products. The Ministry has also imposed export duty on steel products to boost domestic supply. To promote domestic manufacturing and self-reliance across various sectors, the government also enhanced the scope of product linked incentive (PLI) scheme. This scheme was launched to promote manufacturing to promote employment and import substitution. The scheme offers benefits to various sectors, including mobile manufacturing, speciality materials, active pharmaceutical ingredients, medical devices, solar modules, speciality steel, advanced chemistry cell batteries and auto components, among other things.

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