Write petitions challenging continued ADD application on VSF imports from Indonesia dismissed

In a recent decision, the Madras High Court dismissed a series of writ petitions filed by PT South Pacific Viscose, challenging the continued application of anti-dumping duty (ADD) on imports of Viscose Staple Fiber (VSF) from Indonesia. The core of the challenge revolved around an eleven-day gap between the expiration of the original ADD notification and its subsequent extension.

Indonesian exporter PT South Pacific Viscose  initiated these writ petitions to contest orders issued by the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) and notifications from the Directorate General of Trade Remedies (DGTR) and the Union of India, all of which extended the ADD.

Counsel for the petitioner argued, based on the Supreme Court's ruling in Kumho Petrochemicals, ADD cannot be extended once the original levy expires. They highlighted the eleven-day interval between the initial levy's expiration on July 25, 2015, and the extension issued on August 6, 2015, asserting this rendered the extension invalid. The petitioner's counsel further contended that the sunset review and subsequent notifications violated the Customs Tariff Act of 1975, as ADD can only be extended if it is active at the time of extension. Additionally, they argued that altering the scope of the product under consideration during the sunset review without providing an opportunity to respond breached principles of natural justice.

Conversely, counsel for the respondents, including the Union of India and DGTR, maintained that the sunset review had been initiated prior to the expiration of the initial five-year period. They argued that the extension of ADD was legally valid under Section 9A(5) of the Customs Tariff Act, asserting that minor procedural gaps did not invalidate the levy. They also distinguished the Kumho Petrochemicals case, stating it did not preclude continuation when a review is initiated before expiry, even if the notification is issued later.

A division bench, comprising Justice R. Suresh Kumar and Justice C. Saravanan, observed that the sunset review had indeed commenced before the original levy's expiration and concluded that the eleven-day gap did not invalidate the ADD extension. The court also found the petitioner's reliance on the Kumho Petrochemicals ruling to be misplaced, clarifying that the decision applied only when the review itself was initiated after the levy's expiry. Furthermore, the court noted that the petitioner should have approached the Delhi High Court or the Supreme Court under Section 130E of the Customs Act, given that the case pertained to the rate of duty, and deemed writ petitions an inappropriate remedy in such circumstances.

The court ultimately ruled that the continuation of ADD on VSF imports from Indonesia was valid, despite the eleven-day gap between expiry and extension, and consequently dismissed the writ petitions filed by PT South Pacific Viscose.