SC upholds HC ruling against Centre on anti-dumping

The Supreme Court today dismissed the government's petition challenging the order of the Madras High Court, which had set aside the anti-dumping duty imposed by it on import of refrigerant gas from China and Japan by the air conditioning and refrigeration industry.

A bench comprising justices Dalveer Bhandari and Deepak Verma dismissed the petition filed by the central government over levy of anti-dumping on Chloroflouro Carbon Gas.

Passing an order, on January 6, high court had observed that the Designated authority of the Ministry of Commerce had passed the order without properly hearing the importers.

The court had said "matter requires re-appreciation by an unbiased authority to be nominated/appointed by the government of India".

It was challenged by the government and a Gurgaon-based domestic producer SRF before the apex court.

During the proceedings, senior advocate Rohinton Nariman appearing for Chennai-based Refex Refrigerants, one of the importer, submitted that the order to levy anti-dumping was passed by the designated authority without giving a proper chance to represent their submissions.

He further said that the high court had rightly observed that there was violation of natural justice as the government official passed order without even going into the merits of the case.

The government had imposed duty after some domestic industry including SRF complained that the Chennai-based firm was importing cheap gas and was dumping cheap Chloroflouro Carbon Gas imported from countries like China and Japan.

Based on the complain, an investigation was launched and a provisional anti-dumping duty was imposed on February 19, 2010.

This was challenged by the importers before high court and a single member bench stayed the provisional anti-dumping duty on May 12, 2010 and asked the the designated authority to pass order on anti-dumping after hearing the importers.

However, the Designated Authority passed final order on May 21, 2010 again without properly hearing their submissions, the importers said.

Later, importer challenged it before a division bench of the high court, which said that despite the order of the high court, the Designated Authority had not complied with the requirements of the rules of natural justice.

"In fact, the allegations of bias are also not specifically denied by the Designated Authority, Ministry of Commerce and Industry, Department of Commerce (Directorate General of Anti-Dumping and Allied Duties)," the high court had said.

The Madras High Court had further directed the Centre to appoint another officer in the place of the Designated Authority for this case, within four weeks and to conduct enquiry and pass orders within six weeks.

Countries initiate an anti-dumping probe to see whether their domestic industries have been hurt because of cheap imports.

As a counter-measure, they impose duties under the multilateral regime of the WTO.

The duty also ensures fair trading practices and creates a level-playing field for domestic producers vis-a-vis foreign producers and exporters resorting to dumping.

Unlike safeguard duty, which is levied in a uniform way, anti-dumping duty varies from product to product and country to country.