22 Sep 2023
The Supreme Court has issued an interim order directing the Union government to impose a provisional Anti Dumping Duty (ADD) on imports of Low-Density Polyethylene (LDPE) from foreign countries. This decision comes despite opposition from the additional solicitor general Vikramjeet Banerjee. The order was issued in response to a petition filed by the Chemical and Petrochemical Manufacturer Association (CPMA), which sought the imposition of ADD due to the government's failure to take action against dumping of LDPE, which has caused harm to the domestic LDPE industry in India.
The CPMA's petition highlighted that despite interim orders granted by various high courts in similar matters directing provisional assessment, the government has not implemented them, even after the apex court confirmed such orders by dismissing the government's challenge.
The bench, comprising Justices Krishna Murari and Sanjay Karol, directed the imposition of ADD under Section 9A (2) of the Customs Tariff Act, 1975, at the rate determined by the Directorate General of Trade Remedies (DGTR) in its Final Finding, which was issued through a gazette notification on March 31, 2022. However, the bench made it clear that the levy of ADD shall be subject to final adjudication in these proceedings.
ADD is a trade measure used to protect domestic industries from unfair competition due to imports that are priced lower than the normal value or production cost, known as "dumping". The LDPE industry in India has been facing challenges due to dumping of LDPE from foreign countries at prices lower than the normal value, causing harm to domestic LDPE manufacturers. The DGTR had conducted an investigation and issued a final finding confirming the dumping and recommending the imposition of ADD to address the adverse impact on the Indian Industry.
The CPMA, in its petition to the Supreme Court, argued that the government's failure to impose ADD despite the DGTR's determination was detrimental to the interests of the domestic LDPE Manufacturers and sought the court's intervention. The Supreme Court, in its interim order, directed the Union government to impose ADD on LDPE imports from foreign countries at the rate determined by the DGTR in its Final Finding, despite the opposition from the additional solicitor general.
This interim order is expected to provide temporary relief to the domestic LDPE manufacturers who have been facing challenges due to unfair competition from dumped imports. However, the final adjudication on the matter will determine the long-term implications of the ADD imposition.
The LDPE industry is crucial in India, with applications in packaging, agriculture, healthcare, automotive, and construction sectors. The imposition of ADD is expected to level the playing field for the domestic LDPE manufacturers, enabling them to compete fairly with imported LDPE Products.
The CPMA has welcomed the Supreme Court's interim order and expressed hope that the Union government will implement the ADD as per the court's directive. The LDPE Manufacturers in India are optimistic that the imposition of ADD will help in curbing the influx of dumped LDPE imports.