TaxTMI 
TaxTMI 
2005 (5) TMI 350
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...., UAE. After the Notification of the final findings was issued on 4-2-2003 in which the Designated Authority came to the conclusion that vitrified/porcelain tiles were exported by UAE and China PR to India below the "normal value", resulting in dumping, that the domestic industry had suffered material injury, and that, the injury had been caused cumulatively by the imports from the subject countries, and recommended imposition of anti-dumping duty on all imports of vitrified/porcelain tiles from these countries in order to remove the injury to the domestic industry, at the rates of US$ 8.28 per sq. mtr. in respect of exporters/producers from China PR and US$ 0.74 for M/s. RAK Ceramics of UAE, and US$ 5.54 for other exporters/producers of UAE. 1.1 An application (bearing the date 28-3-2003), came to be made for initiation for New Shipper Review by Nanhai Shanguyan Qualin Construction Ceramic Co. Ltd. (hereinafter referred to as Nanhai) producer from China PR, which was forwarded to the Designated Authority by the advocate of Nanhai under his letter dated 15-3-2003 (the application bearing the date 28-3-2003). After this application was forwarded, Customs Notification No. 73/....
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....ich was in conformity with Article 9.5 of the WTO Anti-Dumping Agreement. The designated authority after dealing with the contentions raised by the interested parties arrived at the ex factory "normal value" of the products, calculated ex-factory export price during the period of that investigation, worked out the dumping margin, and made recommendations to the effect that the export price of vitrified/porcelain tiles exported to India produced by Nanhai of China PR (now known as Foshan Qulian Construction Ceramic Ltd.) and exported from Prestige of Dubai, UAE was above its normal value during the period of investigation and therefore, no anti-dumping duty be imposed on the imports of vitrified/porcelain tiles falling under Chapter 69 of the Customs Tariff Act, 1975. By the impugned Notification No. 28/2004, dated 28-7-2004 the Central Government, in exercise of the powers conferred by sub-section (1) read with sub-section (5) of Section 9(A) of the said Act read with Rules 18, 20 and 22 of the Rules of 1995, on the basis of the said final findings of the designated authority amended the Notification No. 73/2003, dated 1-5-2003 by inserting a proviso that no anti-dumping duty shall....
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.... from UAE and not from China, and therefore, the producer of China could not have made the New Shipper Review application. He submitted that the language of Rule 22 precluded the designated authority from exercising any suo motu power. According to him, the expression "periodical review" in Rule 22, was consciously used and review undertaken just 22 days after the notification, was not a periodical review. He submitted that the words "periodical" was used in Rule 22 to mean periodic i.e. at regular time intervals. He argued that the exporter from the UAE, who never made an application under Rule 22, did not "show" that he was not related to the exporter/producer of the country of export. He submitted that power of review under Rule 22 cannot be exercised if there is no application by an appropriate person which in the present case was Prestige of Dubai and not Nanhai of China, because, Prestige of UAE Dubai had bought the goods from the producer. He also argued that physical exportation by the Dubai exporter was shown, and therefore, there was no warrant for initiating any review under Rule 22 in respect of either the exporter or the producer as none of the requirements under Rule ....
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....background of the totality of the circumstances. All the terms and conditions should be properly appreciated and a mere description that a personal was a selling agent was not conclusive. (b) Hallsbury's Laws of England, Fourth Edition, Volume 1(2), wherein the decision of W.T. Lamb & Sons v. Goring Brick Co. Ltd. [1932] 1KB 710 at 717 (Court of Appeal) was cited to place reliance on the following excerpt from Para 2, Page 5 :- "In addition to meaning a person employed to create contractual relations between two parties, the word 'agent' is used in at least two other senses. Thus it is often used in business in a non-legal sense to refer to a distributor, as in the case of the appointment of a 'sole-selling agent', 'exclusive agent' or 'authorized agent'. The relation so established between the appointor and appointee is usually that of 'vendor' and purchaser and no contractual relationship is established between the appointor of the agent and third parties by the sale of goods by the so-called agent to those third parties." (c) Black's Law Dictionary defining the meaning of 'Periodic'- Recurring at fixed intervals to be made....
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....ation. Arguments on behalf of the Contesting Respondents : 5. The learned Counsel appearing for the respondents New Shippers and the importer, supporting the final findings and the impugned notification submitted that the New Shipper Review was provided for in Rule 22 in consonance with the International Agreements and Understandings and was designed to safeguard the interests of those who were not dumping goods in India by their exports. He submitted that during the course of the investigation under Rule 5 before the imposition of the anti-dumping duty under Section 9A(1), no Chinese exporter had co-operated and the designated authority had taken the information submitted by the domestic industry as a gospel truth. He submitted that the period under consideration for the purpose of New Shipper Review under Rule 22 was from 1-7-2002 to 30-6-2003, and the designated authority had given wide publicity by issuing a public notice to the proposed review. A large number of transactions both domestic as well as exports that had taken place during the period of investigation under review were brought to the notice of the designated authority. He submitted that the New Shippers h....
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....r review so that they are not put to disadvantage unjustly. The review under Rule 22 could, according to the learned Counsel, be taken up as and when necessary in consonance with the principle underlying the GATT, of encouraging free trade. There was a clear finding reached, according to him, by the designated authority, that it did not find any evidence of relationship. He contended that there were no pre-conditions under Rule 22 as were sought to be urged, and even in the absence of a formal application the designated authority can review a New Shipper's case and can give relief to an innocent "new shipper" who did not indulge in dumping. It was also contended that the expression "anti-dumping duty" in Rue 22(1) included even a provisional anti-dumping duty which could be imposed under Section 9A(2) of the said Act and therefore, the application of the New Shipper was validly made after the imposition of anti-dumping duty under Section 9A(2). The learned Counsel then argued that when an information is by law or custom treated as confidential and it is so claimed, the designated authority will be bound to treat it as such. Only when information is accessible in the public domain, ....
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....it certified that it was not related to any producer/exporter who exported in the earlier POI. In fact, the trader had exported the material in the past POI and was related to a producer who had exported the material in the past POI. Without any application the trader introduced itself at the stage of questionnaire response, that too without any letter of authorization, and certification. In the final findings, the Authority concluded that M/s. Yusua Battery Guangdong Company Ltd. producer from China and M/s. Yusua Corporation of Japan had exported to India the product above its normal value during the period of investigation and dumping margin was de-minimis. The Authority did not, therefore, recommend anti-dumping measures as the anti-dumping margin was de-minimis. (c) CFR Title 19, Part 351.214 was cited to point out that in the context of New Shipper Review it was provided in the U.S.A. that a request for a New Shipper Review must contain a certificate that the person requesting a review did not export subject merchandise to the United States and was not affiliated with any exporter or producer. He submitted on the strength of this provision that only....
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....es and the New Shipper Review was the review which was to be undertaken as and when the issue was raised. (f) From the World Trade Organization document dated 27-2-1966 (G/ADP/W/291/G/SCM/W/299) he pointed out that in answer to Question No. 4 India reiterated that it intended to deal with new comers reviews expeditiously and that the term "periodical reviews" implied accelerated reviews. 6. Anti-dumping duties are a statutory mechanism to increase the cost of selling a foreign product in the domestic market place that was originally sold for export to India at the price less than the product is sold in the domestic market of the exporting country. If foreign sales for export are less than "normal value" and result in economic injury to the domestic industry, then, anti-dumping duties are assessed to level the playing field. Section 9A(1) of the Customs Tariff Act, 1975, is attracted when any article is exported from any country or territory to India at less than its 'normal value' as defined in Clause (c) of the Explanation to Section 9A(1). It fixes the upper limit of anti-dumping at the 'margin of dumping', as defined in Clause (a) of the ....
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....duty. 6.4 The said Rules of 1995 are framed under sub-section (6) of Section 9A and sub-section (2) of Section 9B of the said Act. Rule 5 of the said Rules lays down as to how the investigation to determine the existence, degree and effect of any alleged dumping shall be initiated. The principles governing investigations are enumerated in Rule 6 which requires issuance of a public notice notifying the decision of the designated authority to initiate investigation and containing adequate information on the matters enumerated therein. The designated authority has the power to call for any information from the exporters, foreign producers and other interested parties under sub-rule (4), which is required to be furnished by such persons within 30 days from the date of receipt of the notice. Sub-rule (7) of Rule 6 provides that the designated authority shall make available the evidence presented to it by one interested party to the other interested parties participating in the investigation. Rule 7 relates to confidential information. Since it falls for our interpretation, it is reproduced hereunder :- "7. Confidential information. - (1) Notwithstanding anything containe....
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....within one year from the date of initiation of investigation, as required by Rule 17. Such final finding, if affirmative, shall contain all information on the matter of facts and law and reasons which have led to the conclusion, and also other information as required by sub-rule (2) of Rule 17. The Central Government, within three months of the publication of the final findings by the designated authority, may impose the duty, by notification in the Official Gazette, as required by Rule 18. Such duty shall be levied only after the exporters have been given opportunity to cease exporting at dumped prices to the area concerned or otherwise give an undertaking pursuant to rule 15, as provided by sub-rule (3) of Rule 18. The anti-dumping duty levied under Rules 13 and 18 takes effect from the date of its publication in the Official Gazette, as required by Rule 20. 6.6 Rule 22 relates to the power of the designated authority to carry out a review of margin of dumping for exporters not originally investigated. Since the main controversy has centred around the interpretation of Rule 22 it is reproduced below - "22. Margin of dumping, for exporters not originally investigat....
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.... three months of the date of publication of final findings, may impose by Notification in Official Gazette upon importation of the article covered by the final findings, anti-dumping duty not exceeding the margin of dumping determined under Rule 17. The anti-dumping duty so imposed under Rule 18, may be levied from the date of provisional duty imposed under Rule 13. If the anti-dumping duty is lower than the provisional duty collected, the differential duty is required to be refunded to the importer under Rule 21(2). Rule 22(1), therefore operates when the product is already subjected to anti-dumping duty under Rule 18 and the exporters/producers in the exporting country are already subjected to anti-dumping duty on the product. 7.1 The anti-dumping duty levied under Rule 13 (provisional) and Rule 18 takes effect from the date of publication. The imposition of provisional duty is anterior to and distinct from the anti-dumping duty properly so-called. During the currency of provisional duty there cannot arise any question of exercising the power of review which comes into play only when the product is subjected to anti-dumping duty. We consider that the term "provisional dut....
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....der Rule 23 which may lead to its withdrawal when there remains no justification for its continuance. The designated authority can periodically exercise that power coupled with duty, as and when the occasion to determine such individual margins of dumping arise. Ordinarily, however, when an application is moved under Rule 22, an obligation to undertake the periodical review arises. The "period of investigation" would be a period much prior to the imposition of the anti-dumping duty. Therefore, the proximity of the time, when application under Rule 22 is made, would not be judged by reference to the date of the notification imposing the anti-dumping duty for contending that the application is made rather too soon to make a periodical review possible. In a periodic review the designated authority has to review the situation in the context of the exporters and producers who were not in picture during the period of investigation under Rule 5 relatable to the notification under Section 9A(1) but have entered the field later. Such review may lead to determination of different margins of dumping in respect of exporters and importers under review, if the investigation so warrants. 7.4&e....
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....rcumventing relationship exists. The requirement on the part of the new shippers to show that they are not "related" is a corresponding obligation on the part of the designated authority to verify that there is no circumvention of anti-dumping duty being attempted by invoking the review. 7.6 The expression "provided these exporters or producers show that they are not related to any of the exporters/producers in the exporting country" in Rule 22, clearly implies that the designated authority has to first be satisfied that the applicant-exporter/producer is not so "related". The designated authority should be conscious of the possibility of the abuse of the "New Shipper" rules. An exporter subject to a high-dumping duty may set up a new "shell" company in the exporting country to act as a 'new shipper', and in some cases, also a "shell" company in India to act an importer. Such new shipper may, by moving an application under Rule 22 request the designated authority to undertake a 'New Shipper Review' of its export sales price after shipping a few orders to Indian market as a new shipper. The undertaking of such review under Rule 22 would qualify the importer for the privilege....
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....exporters/producers would depend upon their showing that they are not "related". This is clear from the words "..........provided that these exporters or producers show that they are not related........". Therefore, until they show that they are not "related", the designated authority will normally not initiate the review. Having regard to the possibility of abuse of the "New Shipper" review rule, the designated authority is bound to consider whether the new shipper seeking review under Rule 22 is "related" or not. 7.7 The learned Senior Advocate for the appellant argued that the real exporter was Prestige of Dubai, UAE to whom porcelain tiles were to be sold under the purchase order by Nanhai for export from China to the importer in India. Therefore, it was necessary for the purpose of Rule 22 for the designated authority to determine whether the UAE exporter Prestige was related to any producer/exporter in the country of export. He submitted that the real exporter was Prestige of UAE because the goods were to be sold to it under the purchase order. 7.8 There appears to be no prior decision taken by the designated authority under Rule 22 before initiating....
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....one, "only upon receipt of written application by or on behalf of the domestic industry". Therefore, the imposition of anti-dumping duty under Section 9A(1) is itself dependent upon the domestic industry applying in writing to initiate the statutory proceedings. Albeit, the designated authority can also initiate an investigation suo motu under Rule 5(4) of the Rules. The procedural requirement of a written application, however, is not incorporated in Rule 22 for initiating a review for determining individual margins of the new shippers. Therefore, even if the designated authority has initiated the review application on the basis of the application dated 15-3-2003 of the producer, Nanhai, the review proceedings will not be vitiated on the ground that the initiation was bad as the review application was made before the issuance of the Notification Nos. 73/2003, dated 1-5-2003 imposing anti-dumping duty under Section 9A(1). The contention that review proceedings were void ab initio is, therefore, misconceived. 8. The contention that the words 'periodic review' in Rule 22 precluded consideration of the application of Nanhai of a review within 22 days of the notification under S....
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....1), as to whether they had shown that they were not so related to any other exporter or producer in the country of export which was China from where the goods were exported directly to India. The designated authority seems to have overlooked this requirement and did not examine whether the exporter Prestige was so "related". Moreover, the entire exercise has been, with respect, casual and though it may not vitiate the initiation of review, the reliance merely on the bare assertion of the new shipper-producer for holding that the new producers/shippers were not related as the authority "did not find any evidence of relationship", shows that the authority was oblivious of the importance of the anti-circumvention aspect that is ingrained in Rule 22 when it requires the designated authority to exercise the review power only when it is "shown" that the "new shipper" is not so "related". The domestic industry, however, has not been able to assail this finding by reference to any cogent material on record. In our view, notwithstanding that no prior determination was made on the relationship aspect before initiating the review under Rule 22, the new shipper could have shown at any stage of....
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....y is not required to mechanically treat the information provided by a party as confidential merely because that party has desired it to be kept confidential. The designated authority has to be satisfied about the confidentiality of the information on the basis of various factors such as the nature of information and whether such type of information is by law, custom, usage, or practice treated as confidential in the field to which the information relates (e.g. industrial sector, service sector etc.). If in the field to which the information relates, its disclosure is not treated as confidential, either under the law or by custom, usage or practice of the trade or industry, then the claim to confidentiality is ill founded and will not be accepted by the designated authority. However, in the areas where confidentiality of information, having regard to its nature and content, is accepted by law, custom, usage or practice, (e.g. about "know how" as in the field of intellectual property), the designated authority will be satisfied about the confidentiality. Confidentiality, however, is not a mere tool to deny disclosure of information provided during investigation in order to kill all t....
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....y treated as confidential, there will be no right in other parties to challenge the determination on the ground of violation of principles of natural justice. The process of determinations of anti-dumping duty and related matters is not an adjudicatory process of resolving disputes between the parties, but a statutory process for determining imposition of anti-dumping duty on those who are liable to pay. For the purpose of transparency, there is an obligation on the authority to require the parties to furnish non-confidential summaries which shall be in sufficient detail to permit a reasonable understanding of the substance of the information submitted in confidence. This is an important element incorporated in Rule 7(2) which reflects the balance struck by the rules between the need to protect the confidentiality of certain information, on the one hand, and the need to ensure that all parties have a full opportunity to defend their interests, on the other. The transparency required under the rules which obligates the authority to explain its determination in a public notice is subject to the need to have regard to the requirement for the protection of confidential information unde....
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....unal to embark upon a detailed exercise in its appellate jurisdiction for substituting its satisfaction for the satisfaction of the designated authority. It is clear to us from the wordings of sub-section (3) of Section 9C that while making any final order the Tribunal has all the powers to issue such orders as it thinks fit to issue in connection with the order impugned. This wide power of judicial review conferred under the said provision is in consonance with the following Article 13 of the Agreement on implementation of Article 11 of General Trade Agreement on Trade & Tariffs :- "Article 13 - Judicial Review - Each Member whose national legislation contains provisions on anti-dumping measures shall maintain judicial, arbitral or administrative tribunals or procedures for the purpose, inter alia, of the prompt review of administrative actions relating to final determinations and reviews and determinations within the meaning of the Article 11. Such Tribunals or procedures shall be independent of the authorities responsible for the determination or review in question." (emphasis added) This Tribunal is statutorily constituted under Section 129 of the Customs Act with appella....