Gujarat High Court Says No Anti-Dumping Duty On Penicillin Imports
Date : January 10, 2012
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In a ruling that can have a far-reaching impact on local drug manufacturing units, a Gujarat high court bench refused to entertain a petition challenging the Central Government’s decision not to impose anti-dumping duty on penicillin imports.
A bench approved of the decision of the Union Finance Ministry which does not want to impose anti-dumping duty on penicillin imports. The Union Ministry argued that anti-dumping duty on penicillin imports would lead to antibiotic drugs becoming very expensive.
China and Mexico are the main countries from where local drug manufacturers import penicillin for manufacture of antibiotics.
Vadodara-based Alembic Limited had challenged the Union government’s decision arguing that not imposing duty on penicillin imports hurts local drug manufacturers and manufacturers of penicillin.
Alembic had argued that local drug manufacturers who import penicillin for the manufacture of antibiotics suffer a lot because of the heavy duty they have to pay on penicillin imports. Alembic further contended that leading local manufacturers of penicillin were losing their business to overseas players who have come to dominate the Indian market.
However, the Union government objected to Alembic’s contention. Counsel for Central customs and excise department which was a party in the case, said that they told the court that the ultimate consumers will not benefit even if duty is imposed on imports.
“The court upheld our contention that, for the sake of local drug manufacturers, the interest of the general public should not be ignored. The price of antibiotics might increase if local units manufacture only 15 to 20 percent of the total demand for penicillin. The scarcity could lead to creation of cartels and a hefty increase in the price of life-saving drugs,” she said.
Incidentally, earlier the Union Chemicals & Fertilizers Ministry had recommended imposition of anti-dumping duty on import of penicillin. The Counsel for Central Customs and Excise Department said that while delivering the order, the bench observed that the authority of the Union Finance Ministry was superior to that of the Ministry of Chemicals & Fertilizers.
The bench further said that they are not inclined to interfere in the legislative decision taken by the Union finance ministry in the interest of the general public.
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