TaxTMI 
TaxTMI 
2003 (12) TMI 72
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....nd within 22 days, the said anti-dumping duty has been suspended by the impugned notifications with a view to unduly favour a Chinese producer at the cost of violating the statutory Rules which permits only a periodic review. Secondly, the new shipper review has been initiated without even conducting any preliminary investigation to ascertain as to whether the conditions precedent for invoking the new shipper review under Rule 22 have been fulfilled or not and thirdly, by permitting clearance of the subject goods during the new shipper review without payment of anti-dumping duty serious injury would be caused to the domestic industry including the Petitioners. 2.Before dealing with the facts of the case, it would be appropriate to briefly refer to the history and the law relating to anti-dumping duty. 3.The concept of global economy though mooted by some countries in the year 1947, it gathered momentum in the year 1994 when Comprehensive General Agreement on Tariffs and Trade (GATT, 1994) was arrived at by as many as 118 member countries. Thereafter, the World Trade Organisation (W.T.O.) was established on 1st January, 1995 by 104 members nations of GATT. With the formation of th....
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....ent to impose transitional product specific safeguard duty on imports from the Peoples' Republic of China. Section 9 deals with the countervailing duty on subsidized articles. Sections 9A, 9AA, 9B and 9C deal with anti-dumping duty on dumped articles. 6.Generally, a product is said to have been 'dumped' if it is introduced into the commerce of another country at less than the normal value of the product and it causes/threatens material injury to the established domestic industry of that country. In order to offset or prevent dumping, Article VI of the GATT provides that the importing country may levy anti-dumping duty on any product not greater than the margin of dumping. To illustrate, if a camera is exported from China to India, whose export price at the ex-works level is US $ 100/- and the domestic selling price of the camera within China at Ex-works level is US $ 125/-, then the export price being less than the domestic selling price, it is said that China is dumping the camera into India with dumping margin of US $ 25/- and under Section 9A of the CTA, anti-dumping duty to the extent of US $ 25 can be levied. 7.Pending determination of margin of dumping, in relation to any a....
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....ndings. Rule 21 provides for refund of anti-dumping duty if the final anti-dumping duty levied is less than the provisional anti-dumping duty levied. 9.If a product is subject to anti-dumping duties, then under Rule 22, the designated authority is empowered to carry out periodical review to determine the individual margin of dumping for any exporter or producer in the exporting country who had not exported the product to India during the period of investigation and who are not related to any of the exporters or producers in the exporting country who are subject to the anti-dumping duties on the product. Rule 22 which is relevant for the present petition reads as under : "22.Margin of dumping, for exporters not originally investigated. - (1) If a product is subject to anti-dumping duties, the designated authority shall carry out a periodical review for the purpose of determining individual margins of dumping for any exporters or producers in the exporting country in question who have not exported the product to India during the period of investigation, provided that these exporters or producers show that they are not related to any of the exporters or producers in the exporting co....
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....bject goods originating in/or exported from U.A.E. and China have been exported to India below the normal value, resulting in dumping, (b) the Indian industry had suffered material injury, (c) the injury has been caused cumulatively by the imports from the subject countries. By the said preliminary findings, the DA recommended imposition of provisional anti-dumping duty, pending final determination on all imports of subject goods originating in or exported from U.A.E. and China. Accordingly, by a Notification No. 50 of 2002 issued on 2nd May, 2002, the Government of India in exercise of its powers under Section 9A(2) of the CTA levied provisional anti-dumping duty on the subject goods originating in or exported from China and U.A.E. at the rate to be calculated at the difference between US $ 13.62 per square metre and the landed value of such imported subject goods in US $ per square metre. The provisional anti-dumping duty levied under the said Notification was to be effective up to 1st November, 2002. 11.During the pendency of the investigation and determination of the margin of dumping, the Respondent No. 4 ('Nanhai' for short) producer/new shipper from China made an applicatio....
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....ian industry had suffered material injury and accordingly recommended anti-dumping duty on all export of subject goods from China at 8.28 US $ per square metre. The DA recommended anti-dumping duty on RAK Ceramics from U.A.E. at 0.74 US $ per square metre and all other exporters from U.A.E. at 5.54 US $ per square metre. The Central Government accepted the final findings of the DA and by a Notification No. 73/2003, dated 1st May, 2003 levied final anti-dumping duty on subject goods under Section 9A(1) of the CTA read with Rules 18 and 20 of the 1995 Rules as follows : China - All exporters 8.28 US $ per square metre. U.A.E. - RAK Ceramics 0.74 US $ per square metre. All others 5.54 US $ per square metre. 13.In the meanwhile, on publication of final findings, Nanhai, by their Advocate's letter dated 15th March, 2003 submitted their second new shipper review application dated 28th February, 2003 to the DA once again stating therein that they had not exported goods to India during the period of investigation from April, 2000 to March, 2001, that they are not related to any other exporter or producer from China who may have exported the subject goods to India and that the price at ....
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....ssessment basis with such security and guarantee as the Customs Authorities deem fit. Challenging the said Notification dated 23rd May, 2003 initiating new shipper review and the Notification dated 1st July, 2003 suspending the anti-dumping duty on the subject goods produced by Nanhai during the new shipper review the present petition is filed. We have permitted M/s. NITCO Tiles Limited, who are the importers of the subject to be impleaded as interveners. 15.Mr. Hidaytullah, learned Senior Advocate, appearing for the Petitioners submitted that the impugned Notification dated 23rd May, 2003 and 1st July, 2003 have been issued in mala fide exercise of power on the following grounds :- (a) within 22 days of levying final anti-dumping duty on 1st May, 2003, the impugned Notification initiating new shipper review has been issued on 23rd May, 2003 with undue haste. (b) Rule 22 provides for periodical review and not review within 22 days of levying final anti-dumping duty. (c) When the initiation of first new shipper review was terminated on the ground that the....
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....month waiting for the Central Government to issue Notification, whereas the first application was disposed of within 11 days of receiving Government letter dated 11th December, 2002. (i) Rule 22 permits new shipper review only if the exporter has not exported the subject goods to India during the period of investigation. In the present case no such declaration has been made by Prestige, the Exporter. (j) In the absence of a declaration by Prestige, that they are not related to the known Exporters in China, who might have exported the goods, the initiation of review is bad in law. (k) There is no declaration by Nanhai that they are not related to any Exporter or Producer in U.A.E. (l) In the absence of a declaration filed by Prestige as required under Rule 22, the DA without holding any preliminary enquiry could not have said that the conditions of Rule 22 are complied with. Thus according to the learned Counsel, there is voluminous evidence on record which conclusively establishes that the impu....
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....ords "Prompt" and "Periodic" given in Black's Law Dictionary - 5th Edition, which reads as under :- "Periodic" means : "Recurring at fixed intervals, to be made or done, or to happen, at successive periods separated by determined intervals of time, as periodic payments of interest on a bond, or periodic alimony payments". "Promptly" means : "promptly quickly, at once, straight away, directly, right away, immediately, without delay or hesitation, unhesitatingly, swiftly, speedily, readily, instantly, instantaneously, punctually, expeditiously". Accordingly it was submitted that the periodic review under Rule 22 could only be at fixed intervals and not within 22 days of levying anti-dumping-duty. 19.Referring to Article 9.5 of GATT, 1994 which calls for new shipper review on prompt and accelerated basis, it was submitted that when the Indian legislation has consciously departed from the language used in GATT, 1994 and the legislature has chosen the words "periodic review" instead of "prompt review", proper meaning must be given to the words used in the legislation. It was submitted that before initiating the new shipper review, the DA must investigate as to whether the applicat....
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....er producers and/or exporters are subjected to anti-dumping duties. Referring to R.K. Jain's publication (Safeguards Countervailing & Anti-Dumping Measures - 2nd Edition) it was submitted that in determining whether the activity is a genuine commercial activity or an effort to circumvent the anti-dumping duty has to be examined very carefully before arriving at a decision. 21.The next submission of the Counsel was that in the first as well as the second application for review, it was stated by Nanhai that they would be selling goods to Prestige who would be exporting the same to India. At no stage Prestige who has only a Post Office Box Number and no address in Dubai has filed application under Rule 22. However, contrary to the application, the subject goods have been directly exported by Nanhai to NITCO, a consumer in India. The price of the goods to be sold by Nanhai to Prestige ranges from US $ 2.75 to US$ 5.90. It was submitted that even if the FOB price is to be taken for import into India it is apparent that there is gross dumping because the margin of dumping imposed under the Notification dated 1st May, 2003 is US $ 8.28 for China and US $ 5.54 for U.A.E. It was submitted ....
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....ances, Mr. Rana submitted that the DA was justified in initiating the new shipper review within 22 days of levying the final anti-dumping duty and the Central Government was justified in suspending the anti-dumping duty on the subject goods produced by Nanhai and permitting clearance of their goods on provisional assessment with such security or guarantee as the Customs authorities deemed fit. 23.Mr. Rana further submitted that by suspending the anti-dumping duty during the period of new shipper investigation, no prejudice is caused to the Petitioners because the clearance of the goods is subject to provisional assessment and on investigation if the anti-dumping duty is levied, then the Importer of the said goods is liable to pay the duty with retrospective effect from the day of initiation of new shipper review. Mr. Rana submitted that on account of provisional clearance of the subject goods on initiation of new shipper review, if any prejudice is caused to the domestic industry, it cannot be helped because suspension of the anti-dumping duty during the period of investigation is a statutory requirement. Mr. Rana relied upon the judgment in the case of Walter v. Howe reported in ....
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....2) while adopting the arguments of Mr. Rana submitted that the DA has initiated the new shipper review on being prima facie satisfied that the new shipper has complied with all the conditions set out in Rule 22. He submitted that there was no reason to disbelieve the statements made in the application filed by Nanhai that it had not exported during the period of investigation and that it is not related to any of the known Exporters in China. Accordingly, Mr. Desai submitted that the Notifications issued for initiating the new shipper review and suspending the duty during the pendency of the new shipper investigation are in accordance with law. 26.Mr. Shreedharan, learned Counsel, appearing on behalf of Nanhai, from China and Prestige from U.A.E. (Respondent Nos. 4 and 5) submitted that the plain and unambiguous words used in Rule 22 are that during the period of investigation under new shipper review, the Revenue cannot levy anti-dumping duty. He submitted that the contention of the Petitioners that even during such investigation, the anti-dumping duty must be collected from the new shipper amounts to rewriting the section in a way which will destroy the very purpose for which Rul....
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....ing duty in respect of import of subject goods of the new shipper till the investigation is completed by the DA. On completion of investigation and determination of the dumping margin, the anti-dumping duty can be levied with retrospective effect from the date of initiation of new shipper review. He submitted that this is the practice followed in U.S.A. as well as European Union and that is also in conformity with Article 9.5 of GATT, 1994. 28.As regards the allegations of the Petitioners that there is nothing to show that the DA was prima facie satisfied before initiating new shipper review, Mr. Shreedharan submitted that there is no such averment made in the petition. After the initiation, of new shipper review the domestic industries including the Petitioners were called upon to give their say in the matter. The Petitioners accordingly made three representations and in none of those representations it was stated that there was no prima facie satisfaction on the part of the DA before initiating the new shipper review. He submitted that both the requirements contained in Rule 22 set out hereinabove were fulfilled in the present case and there is no statutory requirement to find o....
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.... Central Excise v. Raghuvar (India) Limited reported in 2000 (118) E.L.T. 311. Mr. Shreedharan submitted that in the absence of specific time-limit, the DA was justified in initiating the new shipper review within the reasonable time. The Counsel submitted that in the present case M/s. Nanhai has been seeking review since 6th September, 2002, but the same could not be initiated because the investigation already initiated was not completed by the DA. Therefore, after the investigation was completed and the anti-dumping duty was levied, the DA was justified in initiating the new shipper review. 31.With reference to the contention of the Petitioners that the application of Nanhai dated 28th February, 2003 is non est, Mr. Shreedharan submitted that Rule 22 does not require that at the time of making the application seeking new shipper review, the anti-dumping duty should be in force. He submitted that Rule 22 requires that on the date of initiating new shipper the duty should be in force. In the present case when the new shipper review was initiated on 23rd May, 2003, the anti-dumping duty levied on 1st May, 2003 was already in force and hence, the initiation of new shipper review is ....
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....a reported in 1989 Supp (1) SCC 696 at 723-725 paras 79 and 81-83. 34.Mr. Shreedharan submitted that the grievance of the Petitioners that on account of provisional clearance, the subject goods will be sold in the market at a much lessor price thereby injuring the domestic industry is unfounded. Relying upon the decision of the Apex Court in the case of Mafatlal Industries Limited v. Union of India reported in 1997 (89) E.L.T. 247 (S.C.) at 323-324 para 91, he submitted that when the sword of anti-dumping duty is hanging upon the Importer on account of provisional clearance of the goods, it is unthinkable that the importer would not pass on the duty element to the customer while selling the subject goods in the market. 35.Mr. Shreedharan submitted that the proviso to Rule 22(2) which empowers the Central Government to ask for guarantee at the time of provisional assessment cannot be construed to mean cash payment of duty, especially when Rule 22(2) specifically provide that the Central Government shall not levy anti-dumping duty during the period of investigation. Relying upon the decision of the Apex Court in the case of Director of Education (Secondary) v. Pushpendra Kumar repo....
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....ras 106 to 109). 39.Mr. Dada, learned Senior Advocate, appearing on behalf of the intervenors (importers) submitted that while the anti-dumping investigation (vide notification dated 6th August, 2001) for the period 1-4-2000 to 31-3-2001 was going on, Nanhai by its letter dated 6-9-2002 had approached the DA seeking determination of separate margin of dumping on the subject goods produced by it. However, the same was turned down, firstly, because Nanhai had not exported the subject goods during the period under investigation i.e. 1-4-2000 to 31-3-2001, therefore, the case of Nanhai cannot be investigated, and secondly, under Rule 22 new shipper review could be initiated only after the completion of the investigation and levy of final anti-dumping duty under Section 9A(1) of the C.T.A. Thus, the new shipper who has been requesting the DA to investigate and determine the margin of dumping in respect of his goods since 6th September, 2002 had to wait till completion of investigation and levy of duty on 1st May, 2003. Therefore, the DA was justified in taking up the case of Nanhai for investigation under Rule 22 immediately after the levy of duty. Any further delay in initiating the n....
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.... Union of India reported in 1993 (66) E.L.T. 3 (para 13) and also the decision in the case of D.K. Trivedi v. A.M. Patel reported in AIR 1986 S.C. 1323 (para 47), the Counsel submitted that the power to impose duty includes power to suspend and similarly the power to exempt includes power to modify or withdraw the same. Therefore, on initiation of new shipper review, suspension of anti-dumping duty in respect of the subject goods produced by the new shipper is justified. Counsel relied upon the decision of the Apex Court in the case of Indian Express Newspapers (Bombay) Pvt. Ltd. v. Union of India reported in 1999 (110) E.L.T. 3 (S.C.) and submitted that even if for any reason it is held that the impugned notifications cannot be sustained, then, appropriate orders be passed in the matter so that without any investigation the anti-dumping duty is not required to be paid on the subject goods produced by Nanhai and imported by the intervenors. 42.In rejoinder, Mr. Hidaytullah submitted that the power given to the DA under Rule 22 is a discretionary power based on subjective satisfaction which is reviewable in a writ jurisdiction. He submitted that the DA should have conducted at leas....
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....ection 9A(1) of the CTA for the purpose of determining individual margin of dumping for any exporters or producers in the exporting country. Although, GATT, 1994 calls for new shipper review on prompt and accelerated basis, the Indian legislation has authorised the DA to initiate new shipper review on periodic basis. The term 'periodic review' is neither defined under the CTA nor under the 1995 Rules. In general parlance the word 'periodic' means 'at fixed interva1s'. Thus, periodic review under Rule 22 means review at regular intervals and not as and when applications are made seeking new shipper review. 44.By new shipper review the individual margin of dumping is determined for exporters who were not originally investigated. In other words, the basic purpose for providing new shipper review is to see that in a global economy the exporters whose margin of dumping has not been determined are not burdened with the anti-dumping duty levied by the importing country. Unlike the general review provided under Ru1e 23, initiation of periodic review under Rule 22 for determination of individual margin depends upon the applications made for new shipper review. If there are no applications ....
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....ing duty and only thereafter entertained the application of the new shipper. Under the circumstances, merely because the application for new shipper review was made before the levy of final anti-dumping duty it cannot be said that the said application was invalid or that the DA had no jurisdiction to entertain that application even after the levy of anti-dumping duty. Therefore, merely because the application for new shipper review was made before the levy of final anti-dumping duty, it cannot be said that the initiation is bad or mala fide. 46.Another grievance of the Petitioners is that since Prestige had not applied for new shipper review and the Prestige had not declared that it had not exported the subject goods to India and is not related to the exporters who might have exported the subject goods to India, the initiation of new shipper review is bad in law. For determining the margin of dumping what is relevant is the ex-factory export price and the ex-factory sale price or the normal value of the subject goods in the domestic market for domestic consumption. If the export price is lower than the normal value, than it amounts to dumping. Therefore, determination of the norma....
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....to the anti-dumping duties on the product. The new shipper who is seeking review, apart from making a declaration in the application that he fulfils the above conditions set out in Rule 22, cannot be expected to adduce any evidence that he had not exported the goods during the period of investigation or that he is not related to the exporters in the exporting country who are subject to anti-dumping duty on the product. For prima facie satisfaction though the DA is not required to conduct a detailed enquiry before initiating new shipper review, it cannot be said that the statements made by the new shipper must be accepted as gospel truth. It will be open to the DA to look into the evidence collected at the time of original investigation or any other material that is available to him to prima facie ascertain the veracity of the statements made by the new shipper. If there is material evidence to contradict the statements made in the application, then the DA can refuse to initiate new shipper review. In the present case, on the date of initiation of new shipper review, there was no material on record to show that the statements made by Nanhai were not correct. Neither in the petition ....
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....n the date of initiation of new shipper review there was prima facie evidence suggesting that the new shipper was dumping his goods into India. In this view of the matter, we are of the opinion, that in the facts of the present case seeking a guarantee instead of provisional anti-dumping duty is justified. 49.The contention of the Petitioners that if the goods of the new shipper are allowed to be dumped into India, then it would cause grave prejudice to the domestic industry including the Petitioners is not well founded. Because, as stated hereinabove, there is no prima facie material on record to show that there is dumping. The fact that the price of the new shipper is less than the anti-dumping duty levied under Section 9A(1) of the CTA cannot a ground to levy anti-dumping duty on the new shipper. It is the margin of dumping which is relevant for levying anti-dumping duty. In the present case, there is no prima facie material to show that the goods of the new shipper are dumped into India. The margin of dumping can be ascertained only after the detail investigation. In a free market economy, the domestic industry cannot complain about the competitive price of the exporter. Howev....