Inovyn Sverige Ab vs The Designated Authority & Anr
2016 Latest Caselaw 4267 Del

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*      IN THE HIGH COURT OF DELHI AT NEW DELHI
4.
+                   W.P.(C) 4749/2016
       INOVYN SVERIGE AB                          ..... Petitioner
                    Through: Mr Akhil Sibal, Mr Ashish Gupta, Mr
                    Pradeep Chandra and Mr J. Mitra, Advocates.

                         versus

       THE DESIGNATED AUTHORITY & ANR           ..... Respondents
                    Through: Mr Raghav Kapoor, Advocate along
                    with Ms Suparna Srivastava, CGSC and Ms
                    Shreya Sinha, Govt. Pleader

      CORAM:
       JUSTICE S. MURALIDHAR
       JUSTICE VIBHU BAKHRU
                       ORDER

       %               02.06.2016
Dr. S. Muralidhar, J.:

1. This writ petition has been filed by INOVYN Sverige AB, questioning the decision conveyed to it by the Designated Authority (DA), Directorate General of Anti-Dumping and Allied Duties, by letter dated 7th March, 2016 requiring the Petitioner, which had applied for change of name in the Final Findings dated 4th April 2014 issued by the DA, to file an application for the mid-term Review in the prescribed format and also provide the supporting data/documents. The prayer is that the DA should be directed to consider the Petitioner's application dated 18th December, 2015 in an expeditious and time-bound manner.

2. The Petitioner INOVYN Sverige AB, is a company incorporated under

the laws of Sweden. Prior to 1st July 2015, the Petitioner was operating under the name of "INEOS Sverige AB". The Petitioner produces PVC Suspension Resin and exports it to India.

3. The Petitioner participated in the investigation conducted by the DA into the dumping of PVC Suspension Resin. In the Final Findings dated 4th April, 2014 the DA recommended a duty of US Dollars 39.65/MT on the imports of PVC Suspension Resin manufactured by the Petitioner. Although in the petition there is a detailed discussion of the circumstances under which the Final findings came to be rendered by the DA, for the purposes of the present petition it is sufficient to note that during the pendency of the above investigation by the DA, on 16th September, 2013, INEOS AG and SOLVAY SA (a Belgium based entity) decided to acquire joint control of a newly established joint venture (JV), Inovyn, by way of a transfer of assets.

4. In compliance with Regulation 139/2004 of 20th January, 2004 (EC) on the control of concentrations between undertakings, the aforementioned parties, notified the European Commission of their proposal to establish a newly created joint venture to be named "the Inovyn JV". However, the actual approval of the new JV under the EU Merger Regulations by the European Commission took place only on 8 th May, 2014, i.e., subsequent to the Final findings given by the DA on 4th April, 2014. It is stated that the creation of the Inovyn JV involved, inter alia, the transfer of the entire share capital of the Petitioner to Inovyn JV. Consequent thereto, the Petitioner‟s name was changed from Ineos Sverige AB to 'Inovyn Sverige AB'. The Petitioner has placed on record a certificate issued by the Swedish

Companies Registration Office on 2nd July 2015 taking note of the change in name from INEOS AG to Inovyn Sverige AB.

5. In the present petition, the Petitioner has categorically stated in para 13 that "despite the change of name of the Petitioner, the cost of production, sources for procurement of raw material, production facilities, sales channels and cost of sales for sale, both within the EU market and the Indian market continued to remain the same." The relevant documents to show the address, the company registration number, VAT number of the Petitioner remain the same have been enclosed with the petition.

6. The Petitioner states that on account of change of name it could not avail the benefit of the definitive determination of Anti-Dumping Duty in its favour in the Final findings dated 4th April 2014. As a result it did not export PVC Suspension Resin to India after the change of name.

7. A joint application was filed by the Petitioner along with Inovyn Chlor Vinyls Ltd. before the DA on 18th December, 2015 certain seeking change of its name in the Final findings. It is stated that along with the said application, the Petitioner placed on record documents to show that despite the change of its name etc. the Petitioner continued to remain the same. The Petitioner states that it kept following up the matter and even met the officials of the DA on 2nd February, 2016 to explain the background of the application and the urgency involved in considering the request for change of name. According to the Petitioner, during such meeting the officers of the DA suggested that the Petitioner should seek a Mid-Term Review instead of

filing an application for change of name. The Petitioner then filed a written submission on 15th February, 2016 seeking to explain why a Mid-Term Review was not maintainable in the facts and circumstances of the case. Thereafter, the impugned letter dated 7th March, 2016 was sent by the DA to the Petitioner directing it to file a Mid-Term Review. The said letter reads as under:

"Sir,

With reference to the subject stated above, on preliminary scrutiny of the application, the following are observed:

i. You are required to file an application or the Mid Term review in the prescribed format.

ii. Also provide the supporting data/documents.

2. You are requested to provide the aforesaid information/data/documents within two weeks to enable the authority to process your application further."

8. In the above circumstances, the present petition has been filed.

9. Mr Akhil Sibal, learned counsel for the Petitioner, submitted that the DA failed to consider the application filed by the Petitioner together with the documents which amply demonstrated that there was only a change of name of the Petitioner, which did not require it to seek a Mid-Term Review. He submitted that even without examining the documents and forming any opinion regarding the impact of such change of name on the Final findings, the DA mechanically required the Petitioner to go in for a Mid-Term Review, which apart from being wholly unnecessary in the facts and

circumstance of the case, would also be time consuming. It would further delay the Petitioner availing the benefit of the Final findings and the consequent notification by the Central Government. Mr. Sibal referred to the decision in Rishiroop Polymers (P) Ltd. v. The Designated Authority and Additional Secretary (2006) 4 SCC 303 where the Supreme Court explained the limited nature of the enquiry in a mid-term Review.

10. Mr. Raghav Kapoor, learned counsel for the Respondent, on the other hand, sought to explain that even when there was a request for change of name of an entity mentioned in the Final findings, there was only one procedure prescribed under the law. He referred to the format application for a mid-term Review of anti-dumping duty. Among the reasons for seeking a mid-term Review are "change in the legal status of the domestic producer(s) or exporter(s)" and "other relevant factors that may be relevant". A mere change of name of an entity is not mentioned as one of the reasons. It is contended by Mr Kapoor that there is no other procedure prescribed in the law for effecting any change in the Final Findings. Secondly, it is submitted that there is a possibility that in respect of the change in name objections may be raised by other interested parties and without notice being issued to them, which can happen only in a mid-term Review, the change of name cannot be effected in the Final Findings. Thirdly, it is submitted that the DA cannot be certain that although what is asked for is a mere change in the name, it would not affect the determination of duty in the Final Findings. Reference is made to an order dated 23rd November, 2009 passed by the DA in some other case where the request for amendment of the Final Findings on account of change of name of some of the entities mentioned therein was

ordered by way of mid-term Review. It is submitted that no prejudice would be caused to the Petitioner in a mid-term Review.

11. The above submissions have been considered. The exercise of the DA undertaking an investigation into the likely injurious effect of import of any category of goods on the domestic industry is in exercise of the powers under Section 9-A of the Customs Tariff Act, 1975 („CTA‟) read with Section 9B (2) thereof. The Customs Tariff (Identification, Assessment and Collection of Anti-Dumping Duty on dumped articles and for Determination of injury) Rules 1995 (hereinafter the „Rules‟) provide for a detailed procedure on various aspects of the determination of injury, rendering of the preliminary and Final Findings by the DA and for review. Rule 18 of the Rules provides that the Central Government may within three months from the date of the publication of the Final Findings by the DA under Rule 17 impose the anti-dumping duty. The amount of the duty has to be adequate to remove the injury to the domestic industry.

12. Rule 23 of the Rules talks of review of the need for the continued imposition of the anti-dumping duty and reads as under:

"23. Review (1) The Designated Authority shall, from time to time, review the need for the continued imposition of the anti-dumping duty and shall, if it is satisfied on the basis of information received by it that there is no justification for the continued imposition of such duty recommend to the Central Government for its withdrawal.

(2) Any review initiated under sub-rule (1) shall be concluded within a period not exceeding twelve months from the date of initiation of such review.

(3) The provisions of Rules 6,7,8,9,10,16,17,18,19 and 20 shall be mutatis mutandis applicable in the case of review".

13. The review undertaken from time to time during the period for which the anti-dumping duty has been imposed, is termed as a „mid-term Review‟. Since in the present case the Petitioner has been asked by the DA to go for a mid-term Review, for something as simple as a change of name of an entity mentioned in the Final Findings rendered on 4th April 2014, it is necessary to examine the scope of a mid-term Review.

14. In the first place, it required to be noticed that in terms of Rule 23(1) the review is essentially for examining the need for the continued imposition of the anti-dumping duty. The DA will have to form an opinion "on the basis of information received by it that there is no justification for the continued imposition of such duty". Under Rule 23 (2), the DA has twelve months from the date of initiation of such review to complete the exercise.

15. In Rishiroop Polymers (P) Ltd. v. DA (supra), the Supreme Court examined the scope of a mid-term Review in terms of Rule 23(1) of the Rules. It explained in para 36 of the decision as under:

"....the scope of the review inquiry by the Designated Authority is limited to the satisfaction as to whether there is justification for continued imposition of such duty on the information received by it. By its very nature, the review inquiry would be limited to see as to whether the conditions which existed at the time of imposition of anti- dumping duty have altered to such an extent that there is no longer justification for continued imposition of the duty. The inquiry is limited to the change in the various parameters like the normal value, export price, dumping margin, fixation of non-injury price and injury

to domestic industry. The said inquiry has to be limited to the information received with respect to change in the various parameters. The entire purpose of the review inquiry is not to see whether there is a need for imposition of anti-dumping duty but to see whether in the absence of such continuance, dumping would increase and the domestic industry suffers".

16. It is therefore seen that the purpose of a mid-term Review is to examine whether the conditions which existed at the time of initial imposition of anti- dumping duty have "altered to such an extent that there is no longer justification for continued imposition of anti-dumping Duty". When an entity mentioned in the Final Findings comes forward to say that there is a change in its name and not in its legal status, the question is whether the DA would be justified in such circumstances to require such entity to go in for a mid-term Review?

17. The only justification advanced before this Court by learned counsel for the DA is that there is no other procedure available for dealing with such a request. The Court is unable to appreciate the above approach of the DA. If one examines the format application for a mid-term Review, it requires the applicant to mention some changed circumstances which would justify such mid-term Review. While a change in the legal status of the domestic producer or exporter is one of the changes contemplated, a mere change in name is not. The Petitioner has repeatedly asserted that its legal status has not changed. All that has happened is a change in its name. There was no occasion, therefore, for the DA to presume that such a change of the name of the Petitioner as appearing in the Final Findings would somehow prejudice the other interested parties and that a mid-term Review has to be undertaken

to examine if this change in name has resulted in a changed circumstance justifying the mid-term Review.

18. In the present case it was incumbent on the DA to have first examined whether, on the basis of the documents submitted by the Petitioner, the change in its name has altered or impacted the basis for the imposition of the anti-dumping Duty in terms of the Final Findings dated 4th April 2014. In order to come to such conclusion there has to be preliminary level examination, with the participation, if necessary, of the Petitioner. From the certificate issued by the Swedish Companies Registration Office on 2nd July 2015 it appears that the only change was in its name. A mere change of name cannot alter the legal status of the entity. For instance, if a company is a party before a Court in a litigation and the name of the company has undergone a change in terms of the Companies Act then the Court would on an application by the party concerned permit the amendment to the memo of parties and to the cause title of the case. This is a routine exercise. After all the Court cannot examine if such a change in name is justified since that takes place with the approval of the Registrar of Companies. Likewise here the Swedish Companies Registration Office has recorded the change in the name of the Petitioner and has issued a certificate to that effect. This has happened subsequent to the Final Findings. This fact has to be taken note of by the DA and nothing more. The consequential change of the name of the Petitioner as recorded in the Final Findings should not ordinarily require an elaborate exercise of a mid-term Review.

19. The question is not so much about the prejudice caused to the Petitioner

by the mid-term Review but whether in fact it is called for at all. A mid-term Review would undoubtedly not get over in a short time. It would undoubtedly further delay the availing of the benefit of the anti-dumping duty notification by the Petitioner. The Court suggests that the DA must issue a further set of instructions to account for the need to make routine clerical corrections in the Final Findings or for that matter in any other Findings rendered by the DA particularly where such corrections are occasioned by changes that take place after the issuance of the Findings or notification as the case may be. The contingency of change in name is one such.

20. The failure to devise a procedure for dealing with such contingencies cannot constitute a valid reason to compel the initiation of a mid-term Review to effect changes that are of a routine nature and which do not affect the basis of the Findings. It is made clear, however, that if on examination of application made by such entity together with relevant documents the DA is of the view that such change in name affects the basis of the Findings, then it may, for reasons to be recorded, order a mid-term Review.

21. In the present case the impugned communication issued to the Petitioner gives no reason whatsoever for requiring the Petitioner to go in for a mid- term Review. It is also silent on whether the application made by the Petitioner on 18th December 2015 with the enclosed documents was examined by the DA. Accordingly, the said decision as communicated by means of the impugned letter dated 7th March, 2016 of the DA is hereby set aside.

22. A direction is now issued to DA to examine the Petitioner‟s application dated 18th December 2015 and the enclosed documents and take a decision, in writing, after hearing the Petitioner, if considered necessary, within a period of four weeks from today. The said decision shall be communicated to the Petitioner forthwith. If aggrieved by such decision, it will be open to the Petitioner to seek further remedies in accordance with law.

23. The writ petition is allowed in the above terms with no orders as to costs.

S. MURALIDHAR, J

VIBHU BAKHRU, J JUNE 02, 2016 MK/mg