Chinese Company Approaches Gujarat HC Against Notification Imposing Anti-Dumping Duty

A Chinese company and its local distributor have moved the Gujarat High Court challenging a notification issued by the Designated Authority of the Ministry of Commerce and Industries imposing anti-dumping duty upon it.

The notification was issued on September 28 by the Designated Authority, after conducting an investigation against eight Chinese companies and its local importers, among others, on an application filed by M/s ITC limited Paperboards and Specialty Papers Division. The ITC had moved the application before the Authority for imposition of anti-dumping duty on the imports of Décor Paper originating in or exported for China PR under Customs Tariff Act, 1975 and the Customs Tariff (Identification, Assessment and Collection of Anti Dumping on Dumped Articles And for Determination Of Injury) Rules, 1995.

When the petition came up for hearing on November 8, the Central Government Counsel sought time to file a reply. Earlier, on October 29, a Bench of Justice SG Gokani and Justice HM Prachchhak issued notices to the Union of India and the Authority, while refusing to grant interim relief to stay the notification.

The petition under Articles 226 and 227 of the Constitution has been filed by Hangzhou Huawang New Material Technology Company Limited and its local distributor Fakirsons Papchem Private Limited. The company is a manufacturer of décor paper and claims that it is one of the top exporter companies in China.

The company has challenged the Notification dated September 28, 2021 issued by the Designated Authority recommending imposition of anti-dumping duty on import of the subject goods originating from China PR. It has raised a contention that the notification will lead to "monopolistic tendencies" by the domestic producers, who want to capture the entire market and thereafter, dictate their own terms and conditions by forming a cartel to increase the price of the product at their own whims and fancies.

The petition mentions that the Authority has issued the notification without jurisdiction, it is a colourable exercise of power not vested with it, violative of principles of natural justice and that the conclusion arrived at and the directions are unsustainable.

"The present petitioner No.1 (Company) had, though, participated in the proceedings before the respondent No.3 (Authority) and had made its submission. It has not taken cognizance of the said submissions and has not dealt with the said submissions at all in the impugned Notification and on the contrary, has proceed to declare the petitioner No.1 as a 'non-cooperating party' and has also thereafter proceeded to impose anti-dumping duty 4-5 times higher than what has been imposed on the other manufacturers in the subject country who are situated in the same province as that of the petitioner No.1," the plea states.

The company further argues that the gross imposition of anti-dumping duty in such a manner will lead to the price of the product becoming 4-5 times higher than the product of other manufacturers, whose products would be available at a considerably lesser rate when they are imported into the country.

"It is rather shocking and surprising that despite having received the submissions from the petitioner No.1, the respondent No.3 has chosen to deliberately ignore the same while dealing with various submissions/objections of various interested parties who were participating in the said proceedings which has led to gross prejudice and travesty of justice since the price of the product if imported into India through the petitioner No.1 would attract anti-dumping duty to the tune of $542 per MT whereas the other manufacturers / producers who are hardly few kilometres away in the same province and manufacturing the same product would be liable to imposition of anti-dumping duty to the extent of only $110 - $116 per MT," the petition says.

"The effect of the impugned Notification is grossly detrimental to the industries, both manufacturers and importers, who are importing the said product, which is used in enormous quantities for the purpose of manufacturing laminates, plywood, MDF, panel board, Décor paper printing, etc. which product is already in shortage as the domestic producer are not in a position to meet with the high demand of the said product "Décor Paper"," the petition asserts.

The petition will come up for hearing on November 16.