No anti-dumping duties without prior inquiry, says Federal Court

 

Bench rules customs department acted unlawfully by imposing the maximum anti-dumping duty under the residual ‘Others’ category without first conducting a fresh statutory review of Suriwong International Sdn Bhd.

The Federal Court ruled that the customs department acted unlawfully in imposing more than RM2.2 million in anti-dumping duties on imports of cellulose fibre cement products manufactured by a Thai company.

PUTRAJAYA:

The Federal Court has ruled that the government cannot unilaterally impose anti-dumping duties under a residual category without first conducting a proper investigation in accordance with the statutory framework.

The apex court made the ruling after allowing an appeal by Suriwong International Sdn Bhd, holding that the customs department acted unlawfully in imposing more than RM2.2 million in anti-dumping duties on imports of cellulose fibre cement products manufactured by a Thai company.

Delivering the unanimous judgment of a three-member bench, Justice Vazeer Alam Mydin Meera said the customs department could not rely on the residual “Others” category under the Customs (Anti-Dumping Duties) Order 2014 to impose the maximum anti-dumping duty of 31.14% without first complying with the procedures prescribed under the Countervailing and Anti-Dumping Duties Act 1993 (CADD Act).

He said the statutory scheme governing anti-dumping duties required a rigorous investigative process before any duty could be imposed, adding that subsidiary legislation must be interpreted consistently with the purpose and framework of its parent Act.

“The process leading to the imposition of anti-dumping duty must be stringent, and the provisions of the CADD Act must be mandatorily complied with.

“Any failure or misstep in according a fair process to affected parties has, in the past, attracted judicial intervention,” Vazeer said in the unanimous judgment delivered yesterday.

Justice Abu Bakar Jais, who chaired the bench, and Justice Rhodzariah Bujang concurred with the decision. The court also ordered the government to pay RM100,000 in costs to Suriwong.

Vazeer said anti-dumping duties could only be imposed after establishing, through positive evidence, that dumping had occurred and caused injury to the domestic industry, as required under both the CADD Act and Malaysia’s obligations under the General Agreement on Tariffs and Trade (GATT).

The judge noted that the Thai exporter, TPI Polene Public Ltd, was not among the companies specifically named in the 2014 anti-dumping order and had not participated in the investigation that led to its issuance.

Also, Suriwong only began importing the products several years after that investigation had concluded.

Vazeer said Section 28B of the CADD Act entitled exporters who did not participate in the original investigation to an expedited review so that an individual anti-dumping duty rate could be determined before any duty was imposed.

“There ought to have been a separate inquiry pursuant to Section 28B of the CADD Act,” he said.

“The respondents cannot impose anti-dumping duty on a blanket basis on the import of a product based on a previous or one-off preliminary determination of dumping and injury that took place some three years before TPI Polene exported the products to Malaysia.”

The court therefore answered the principal leave question in Suriwong’s favour, holding that the customs department had no legal basis to impose the maximum duty simply because the exporter fell within the generic “Others” category.

Having found the imposition of the duty unlawful, the Federal Court said it was unnecessary to determine whether the finance minister was obliged to provide reasons for refusing Suriwong’s application for remission of the duty.

The court set aside the decisions of both the High Court and the Court of Appeal, and declared the bill of demand dated Oct 27, 2020, issued by the Kedah customs department under the Customs Act 1967 and the Goods and Services Tax Act 2014, to be null and void.

Suriwong had challenged the customs department’s demand for RM2,195,184.28 in anti-dumping duties after the department concluded, following an audit, that the company had used the wrong Harmonised System tariff code when importing cellulose fibre cement products from TPI Polene between 2016 and 2019.

Lawyers Gurdial Singh Nijar, Abraham Au, Joshua Kevin, Leng Wie Mun and Reuben Ong represented Suriwong. Senior federal counsel Rahazlan Affendi Abdul Rahim and Farah Shuhada Ramli, together with federal counsel Ahmad Ilham Haridz Padli, appeared for the government. - FMT