Financial Daily from THE HINDU group of publications
Tuesday, Mar 30, 2004
SAIL, Essar move High Court for probe into steel dumping
New Delhi , March 29
THE Government-owned Steel Authority of India Ltd (SAIL) and the private sector Essar Steel have moved the Delhi High Court seeking its directive to the Directorate of Anti-Dumping (DoAD) under the Department of Commerce for initiating investigations on dumping of hot rolled (HR) steel into India by producers in South Africa, the European Union, Australia and a few other countries.
The three other primary producers, namely Tata Steel, Ispat and JVSL have chosen not to be parties to the writ.
If the court issues the directive, it will offer the Government a window of opportunity to impose a pre-emptive anti-dumping duty, thereby making imports expensive.
The two companies filed the writ petition even as the DoAD had rejected an application filed by the two companies seeking anti-dumping duty on such imports on grounds that the domestic industry is already enjoying protection in the form of floor price mechanism and customs duty.
The petition has been filed stating that the DoAD decision to reject their application was illegal, untenable, opposed to the principle of natural justice as well as opposed to national interest. The DoAD had rejected the petition without even undertaking a preliminary investigation.
If the DoAD had rejected the petition after undertaking a preliminary investigation, then the next step would have been to move the CEGAT. But since the investigation was not carried out at all, now it is only the court that can direct the Government to act.
The move, according to sources, is a pre-emptive step. "Once the Government initiates a preliminary investigation on whether dumping is happening or not, there is a provision to impose certain pre-emptive anti-dumping duty.
"Now that the rupee is appreciating, duties have been brought down and international steel prices are showing downward trends, the landed cost of steel will reduce. So a pre-emptive duty could prevent these foreign companies from exploiting the Indian market," said an official from one of the companies.
And if that happens, it will be the secondary producers who will be deprived from the benefit of importing cheap steel from the international market. And so the secondary producers have swung into action.
The court admitted the petition filed by the two primary producers earlier this month. The secondary producers came to know about this move a few days later. Most of the companies that have been importing these high-grade HR steels in bulk are cold rollers and members of the Cold Rolled Steel Manufacturers Association.
After coming to know that such a writ has been accepted, the association has moved the court seeking to be a party in the case.
According to a CORSMA spokesman, "the DoAD decision strictly adheres to the laid down rules and regulations. Moreover, there is a severe shortage in the domestic market for which the Government has already imposed restrictions on exports."
"The situation is so bad that apart from SAIL and Essar, the other three primary producers, namely Tata Steel, Ispat and JVSL are importing high grade HR steel. That is why they are not party to the writ.
"CORSMA has, therefore, decided to intervene in the case and pray to Delhi HC to reject the writ petition by SAIL and Essar in the national interest to promote industrial growth," the spokesman said.
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