2006 (3) TMI 142 - SC - Customs

Supreme Court upholds injury assessment based on 1995-96 data, restores duty imposition under Chapter 40 in rupee terms.

The Supreme Court partially allowed the appeals, confirming the injury assessment based on 1995-96 data, restoring the Designated Authority's decision to ... Whether the Designated Authority wanted to impose anti-dumping duty on all grades of Styrene Butadiene Rubber irrespective of whether it is put under Heading 3903 or 4002? Held that:- The findings recorded by the Designated Authority in para 7 of its order clearly indicate that the Designated Authority did not intend to cover SBR which was being imported under sub-heading 3903.90 for the purpose of imposing duty; what the Designated Authority held was, that if the goods were being imported by wrongly classifying them under sub-heading 4002.19, then the Customs Authorities are at liberty and expected to classify the goods correctly. It was held by the Designated Authority that while giving the import statistics, Respondent No. 3 had submitted information in respect of Customs Heading 4002.19 only; that Chapter 39 covers 'Plastic and Articles thereof' whereas Chapter 40 covers 'Rubber and Articles thereof' Styrene Butadiene Rubber, as the name suggests, is a synthetic rubber and would be covered under Chapter 40 and not 39; that as per note no. 2(h) of Chapter 39, synthetic rubbers and articles thereof, which are covered under Chapter 40, do not fall under Chapter 39. The Designated Authority had recorded a firm finding that 'Elastomer Resin KHS 68' was not covered for the purpose of imposing duty. The finding recorded by the Designated Authority was categorical and not a clerical omission, as has been observed by the Tribunal. It was not correct on the part of the Tribunal to hold on its own motion that 'this is a clerical omission which is required to be corrected.' Finding recorded by the Tribunal in this respect deserves to be set aside. We do so. Finding recorded by the Designated Authority in this respect is restored. Dealing with the penultimate argument, it may be stated that the Designated Authority had imposed the duty in rupee value but the Tribunal converted the same in US dollar terms, without there being any prayer for such conversion by either of the parties. Learned counsel appearing for the Department conceded that the Tribunal was not justified in converting the anti-dumping duty in US dollar terms and, after taking instructions, stated that he has no objection to the setting aside of the order passed by the Tribunal in imposing anti-dumping duty in terms of US dollars and to the restoration of the order passed by the Designated Authority in imposing the anti-dumping duty in rupee terms. Appeal partly allowed. Issues Involved:1. Assessment of injury to the domestic industry.2. Imposition of anti-dumping duty on products under specific tariff headings.3. Conversion of duty from rupee terms to US dollar terms.Issue-wise Detailed Analysis:1. Assessment of Injury to the Domestic Industry:The Tribunal and the Designated Authority assessed the injury to the domestic industry based on data from the year 1995-96, despite noting data from 1994-95 in the work-sheet. The appellant contended that this assessment was factually incorrect. However, the Tribunal confirmed that the assessment was indeed based on 1995-96 data, showing a significant increase in SBR stock and a loss in profitability for the domestic industry. The Supreme Court, after reviewing the confidential records, upheld the Tribunal's findings, confirming that the domestic industry suffered a drastic decline during the investigation period compared to the preceding financial year.2. Imposition of Anti-Dumping Duty on Products Under Specific Tariff Headings:The Designated Authority initially imposed anti-dumping duties on SBR under sub-heading 4002.19. The Tribunal, however, extended this duty to include sub-heading 3903.90, citing a clerical omission. The Supreme Court found that the Designated Authority did not intend to cover SBR under 3903.90 for duty imposition, as Chapter 39 pertains to 'Plastic & Articles Thereof,' while Chapter 40 pertains to 'Rubber & Articles Thereof.' The Designated Authority's firm finding was that SBR, a synthetic rubber, falls under Chapter 40. The Supreme Court set aside the Tribunal's finding, restoring the Designated Authority's original decision.3. Conversion of Duty from Rupee Terms to US Dollar Terms:The Tribunal converted the anti-dumping duty from rupee terms to US dollar terms without any party's request. The Department's counsel conceded that this conversion was unjustified. The Supreme Court agreed, setting aside the Tribunal's order and restoring the Designated Authority's imposition of duty in rupee terms.Conclusion:The Supreme Court partially allowed the appeals, confirming the injury assessment based on 1995-96 data, restoring the Designated Authority's decision to impose duties under Chapter 40 only, and reverting the duty imposition back to rupee terms. No costs were awarded.