TaxTMI 
TaxTMI 
TaxTMI 
2010 (6) TMI 204
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....Tariff Act, 1975 (hereinafter referred to as "the Act") and were subject to levy of antidumping duty initially by Notification No. 15/2002-Customs dated 08.02.2002 and that was extended upto and inclusive of 11.04.2007 vide Notification No. 22/2006 - Customs dated 2.3.2006 number GSR 128 (E) dated 02.03.2006 of Govt. of India, in the Ministry of Finance (Department of Revenue). During currency of the levy, a review was initiated by the Designated Authority (hereinafter referred to as "DA") in terms of Notification No. 15/9/2005 - DGAD dated 20.12.2005 and such review ended by final finding notified vide Notification No. 15/9/2005 - DGAD dated 18.6.2007, giving rise to issuance of the impugned Notification, under challenge before Tribunal in the present appeal. ARGUMENT FOR AND ON BEHALF OF DOMESTIC INDUSTRIES 2. Learned Counsel appearing on behalf of Appellant Association of Synthetic Fibre Industries challenged the notification as to whether proviso to Section 9A (5) of the Customs Tariff Act, 1975 empowers the Central Government to 'extend the period' of the duties already in place or the Central Government can also vary the duties under this sub-section; and whether individual....
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....ned, that is expressly limited to the power to 'extend the period'. There is no scope to read Section 9A (1) into section 9A (5) as the former deals with power of imposition whereas the latter is restricted in its scope of power to extend the duration. Such interpretation is also borne out of the fact that the criteria for exercise of powers under Section 9A (1) and Section 9A (5) are distinctly different. Therefore, even from a practical point of view, a variation of duty in the course of a sunset review will lead to unscrupulous practices which will vitiate the very objective of anti-dumping duties. It is for this reason also, the scope of Section 9A (1) and Section 9A (5) have to be read strictly in the terms of the express language of the statute. 2.3. The issue in this appeal is whether the Central Government can vary the anti-dumping duty in a review proceeding under Section 9A (5) when the review is limited to the extension of the period of duties already imposed under Section 9A (1). It has been held by the Hon'ble Delhi High Court in Kalyani Steels Ltd Vs Revenue Secretary MoF 2008 (224) ELT 47 (Del) that the procedure of Rule 23(3) can be borrowed in the absence of any s....
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....or determining the dumping margin in case of sunset review. While the Designated Authority or the Central Government has no power to create a deemed Export price on the basis of export price to third countries when there are no exports to India, the Designated Authority has apparently taken recourse to the provisions of Section 9A (1) (c) (ii) (a) which allows the that Authority to determine the normal value in circumstances where there are no domestic sales of the exporter. There is no legal or logical basis to use this provision for computation of normal value for creating a deemed export price to India. 2.7. It was also submitted on behalf of appellant that even in terms of the definition of export price under Section 9A (1) (b), the scope of constructing the export price is envisaged only for a situation where the actual exports to India have taken place. The power to construct the export price under this clause is only for the limited situations where the exports to India have indeed taken place but the prices are not reliable for certain reasons. The said clause also provides for a construction of export price in a situation where there is no export price (e.g. the goods may....
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....he same as is applicable to the residual category of non-cooperating exporters. 2.9. Learned Counsel for appellant stressed that the approach adopted by the Designated Authority in the instant case is completely opposite to the categorical stand taken and the understanding made in the case as extracted in the preceding para above. Therefore, the plea of various alternatives and options available to the Designated Authority are baseless without any authority of law and is factually misleading. 2.10.The appellant further submitted that while there is no denial that the Designated Authority in terms of Section 9A(5) is required to examine the likelihood of continuation or recurrence of dumping and injury, the exercise does not envisage the determination of likely dumping margin as has been done by the Designated Authority in this specific case. Drafters of the Agreement on Anti-dumping as well as Indian legislation have been careful in not permitting the determination of likely export price or likely dumping margin as such as a power could lead to imaginary or arbitrary dumping margins which would form the basis for actual anti-dumping duties. Considering the legal position, even t....
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....s required to be ascertained on the basis of a price at which exports are likely to be made. In other words, the basis used for ascertaining likelihood, the likely price at which exports are likely to be made received weightage and consideration of Designated Authority. (F). Designated Authority determined the export price and dumping margin within the ambit of law by a likelihood analysis rationally. In absence of exports of subject goods during the period if Investigation (POI), the D.A. examined the likelihood of recurrence of dumping if the duties were to be removed. (G). In order to see whether there was a likelihood of dumping, the D.A. has looked at the behavior of export prices to other countries. The D.A. examined whether there would have been dumping, had the exporter exported the goods to India at or about the same prices at which it had exported to other countries. By doing this analysis, the Authority came to the conclusion that the exporter was likely to dump the goods into India. (H). The Authority has determined a dumping margin at which the exporter is likely to dump the goods. It was considered that the dumping margin found in the original investigation could ....
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....drawal of duty will cause injury to the domestic industry, it may recommend any amount upto the margin of dumping to remove the injury for continued protection of the domestic industry. Therefore, the D.A is not barred to recommend the amount of anti-dumping duty different from the amount of duty imposed at the time of initial imposition of definitive antidumping duty. The D.A has therefore, correctly recommended the anti-dumping duty in the present case. The purpose of review will be frustrated if D.A is prohibited to recommend higher or lower anti dumping duty than the original definitive anti-dumping duty consequent upon review of the entire situation in a sunset review. TRIBUNAL'S FINDING AND DECISION: 4. Heard both sides and perused the Records. This appeal is to adjudicate whether definitive antidumping duty imposed prior to sunset review can be varied in that review and whether in absence of export during period of review dumping margin of the exporter can be determined in a sunset review. While the appellant asserts no variation of duty and no determination of dumping margin possible in absence of export by the exporter, the D. A. holds otherwise. Rival submissions of bot....
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....ation to an article has been defined to mean the price of the article exported from the exporting country. The levy is calculated on the "margin of dumping". The duration of levy of anti dumping duty, is 5 (five) years. That is subject to its review from time to time as well as its continuance is for a further period of five years, if the cessation of duty is likely to lead to continuance or recurrence of dumping and injury and this duty is over and above any other duty in force. 7. Under the scheme of law, a provisional levy of duty is contemplated which is preceded by preliminary findings regarding dumping and the consequent injury to the domestic industry. Method of determination of the injury and the procedure to be followed is provided in Section 9B of the Act. An Authority called as "Designated Authority" initiates investigation regarding the existence, degree and effect of any alleged dumping, upon receipt of a written application by or on behalf of the domestic industry containing all relevant data, figures and details supported by evidence of dumping, injury and also the causal link between such dumped articles and the alleged injury. Such authority also has a suo motu po....
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....relevant facts, including the volume of dumped imports, their effect on price in the domestic market for like articles and the consequent effect of such imports on domestic producers of such articles in accordance with the principles set out in para (iv)Annexure-II of the 1995 Rules, which reads as under: "(iv) The examination of the impact of the dumped imports on the domestic industry concerned, shall include an evaluation of all relevant economic factors and indices having a bearing on the state of the industry, including natural and potential decline in sales, profits, output, market share, productivity, return on investments or utilisation of capacity; factors affecting domestic prices; the magnitude of the margin of dumping; actual and potential negative effects on cash flow, inventories, employment, wages, growth, ability to raise capital investments." 10. Initial imposition of anti-dumping duty u/s 9A (1) of the Act remaining in force for 5 (five) years may necessitate to extend its terms of levy if the Central Government is of opinion that cessation thereof is likely to lead to continuation or recurrence of dumping and injury. Exercise of such power is subject to the pro....
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....der all the criteria or parameters of Para (iv) of Annexure-II to the 1995 Rules. There is no bar in law to prevent the D. A. to diagnose the problem afresh by appropriate analysis in a review proceeding to achieve the object of the statute and protect interest of the domestic industry. Review is envisaged by law to take stock of the situation developed subsequent to the levy of definitive antidumping duty so as to decide the tenure of the levy as to whether the same is extendable and whether to vary or vacate the levy. 13. Scope of the review which is subject matter of challenge in this appeal is governed by aforesaid provisions of law. The Designated Authority has to reach to the satisfaction that there is justification for continued imposition of such duty or cessation thereof on the information received by it. By its very nature, the review inquiry whether sun set review or interim one, shall extend to examine whether the conditions which existed at the time of imposition of anti-dumping duty have under gone change to such an extent that there is either justification for continued imposition of the duty with or without variation or no longer need for continuation thereof. The ....
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....tal and necessary to make the exercise of those powers fully effective. In Domat's Civil Law (Cushing's edition), volume 1, at page 88, it has been stated: "It is the duty of the judges to apply the laws, not only to what appears to be regulated by their express dispositions, but to all the cases where a just application of them may be made, and which appear to be comprehended either within the consequences that may be gathered from it." Maxwell on Interpretation of Statutes, eleventh edition, contains a statement at page 350 that "where an Act confers a jurisdiction, it impliedly also grants the power of doing ail such acts, or employing such means, as are essentially necessary to its execution. Cui jurisdictio data est, ea quoque concessa esse videntur, sine quibus jurisdictio explicari non potuit" An instance is given based on Ex parte Martin that "where an inferior court is empowered to grant an injunction, the power of punishing disobedience to it by commitment is impliedly conveyed by the enactment, for the power would be useless if it could not be enforced." 16. The principles governing the powers conferred by an enabling statute had been laid down by authorities and ment....
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....and ancillary for doing all such acts or employing all such means as are reasonably necessary to make the grant effective. Thus the Designated Authority by its power to assess injury may suggest variation of the anti-dumping duty from the original levy, taking all the relevant material facts and factors into consideration following injury determination procedure laid down in Annexure II to the 1995 Rules while analyzing the injury caused or likely to be caused to the domestic industry. 18.1 While the law relating to sun set review and powers of D. A. are summarily explained as above, fact findings made by D.A. as revealed by record are as under: (A). The Appellant M/s Association of Synthetic Fibre Industries on behalf of domestic producers namely M/s Arfees Industries Ltd., M/s Appollo Fibres Ltd/, M/s Central India Polyesters Ltd., M/s Century Enka Ltd., M/s Filatex Industries Ltd., M/s Garden Silk Mills Ltd/, M/s Indo Rama Synthetics (India) Ltd M/s JBF Ltd., M/s Modern Petrofils Ltd., M/s Nakoda Textiles Industries Ltd. M/s Recron Synthetics Ltd and M/s Welspun Syntex Ltd filed application along with the prima facie evidence before the Designated Authority to continue the an....
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....eased in the same proportion as compared to the cost of production of the subject goods of the domestic industry implying that the domestic industry has suffered price suppression on account of dumped imports from subject countries. (F). The Authority had also examined the grievance of domestic industry that the domestic industry was suffering on account of the price underselling from the sale of subject goods. Such aspect being an important indicator to assess the injury, the DA worked out the Non-injurious price for the product under consideration and compared the same with the landed value to arrive at the extent of price underselling. (G), Between 2001-2002 and POI, the dumped imports from subject countries as percent of total import of subject goods was found to be decreased to 11% of the imports made in the base year. However, while examining the price effect i.e. whether the dumped imports have significantly undercut the price of the subject goods in India, the Authority found that the landed value of the subject goods from subject countries was lower than the selling price of the domestic industry indicating that the dumped imports from subject countries have undercut the....
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....l the other years were significant and substantial not only as a share of total imports but also in relation to total demand and domestic production and lower level of imports during the period of investigation as compared to other years was only due to the fact that the exporters from the subject countries have consciously and strategically reduced the exports with a view to avoid re-imposition of anti-dumping duties, also received consideration of D.A. The significant and substantial imports from the subject countries in the previous years prior to POI and lower imports in POI gave a clear and strong indication about the likely future behavior of the exporters form subject countries. Dumped imports from the subject countries in all probability appeared to surge in case anti-dumping duty is ceased to continue and it was also appreciated that the domestic industry would continue to be injured. (J). The aspects that weighed consideration of the DA was that though the imposition of anti-dumping duty might affect the price levels of the products manufactured using the subject goods and consequently might have some influence on relative competitiveness of these products; fair competit....
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....ion of the levy. It appears that what industrial economy demanded was imposition of appropriate rate of antidumping duty in consequence of sunset review. Domestic industry's application for sunset review to continue the levy was acceptable to the Government of India. Enquiry reveals that the Authority has tried to strike a balance between the expected import and consequence thereof by injury analysis. No cogent reason was shown by Appellants to suggest that the variation duty shall cause injury to the domestic industry and that was un-remedied in sunset review. Neither the course of enquiry nor the subject matter of enquiry was proved to be defective or the enquiry done under haste and hurry. Result of enquiry does not appear to be irrational when that was arrived done following course of natural justice, due process of law and convention followed in the WTO regime. Preponderance of probability in determining injury remained unchallenged without leading any contrary evidence or assigning any cogent reason. Similarly nothing could be demonstrated that the Authority made baseless enquiry or the enquiry done was to defeat the interest of domestic industry. Result of enquiry is therefo....
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....d, the anti-dumping duty would be in force and hence, the current level of dumping may be non-existent or minimal. The exporters under investigation may also sell at a non-dumped price during this period knowing fully well that a sunset review would be in progress. Hence, the criteria under Section 9A (1) that the anti-dumping duty should not exceed the dumping margin would have no practical application for continuance of the duty under Section 9A (5). There is also no such warrant in law under the said Section 9A (5) to do so. 15. However, we find no such difficulty in determining the non injurious price to the domestic industry, that is the price at which the domestic producers would not suffer any injury. Moreover, India has also adopted the lesser duty rule like the EC (and unlike the US) under which the anti-dumping duty is pegged at a level with reference to the non-injurious price to remove the injury rather than hike it to the full extent of the dumping margin. Hence, determination of the current injury level is a practical option before the D.A., while the requirement under Section 9A (5) is a likelihood determination for the future. 16. Thus we find that while the requi....