2005 (2) TMI 140 - SC - Customs

Whether there has been a significant increase in the dumped imports while examining the volume of dumped imports? Whether there has been a significant price under cutting by the dumped imports in order to assess the effect on the prices in the domestic market i.e. an increase in quantity and a decrease in the export prices? Held that - After collecting such evidence and information which pertain to the ingredients of dumping the Designated Authority is required in appropriate cases to record a preliminary finding regarding export price normal value and margin of dumping and the injury to the domestic industry under Rule 12. If the Designated Authority is of the opinion on the basis of its preliminary finding that there has been dumping which has caused injury to the domestic industry it may make a preliminary determination of the margin of dumping. On the basis of the preliminary finding the Central Government may under Rule 13 levy provisional duty. It is at this stage that Rule 14 comes into operation when the investigation is yet to be completed finally and the final findings published under Rule 17. As we hold that it was incumbent on the Respondent No. 1 to have closed the investigation under Rule 14(d) once it came to the conclusion that the volume of dumped imports was less than 3% of the total imports it is sufficient to upset the finding of the Tribunal and the Respondent No. 1 to set aside the anti-dumping duty imposed on the appellant. In the circumstances it is unnecessary to decide on the further challenge raised by the appellant on the basis of violation of Rule 16. Appeal allowed.

Summary

Issues:
Interpretation of Rule 14(d) regarding anti-dumping duty investigation termination based on import volume.
Applicability of de minimis rule in determining dumping margin and import volume.
Distinction between volume and price in anti-dumping investigations.
Significance of 'like article' definition in determining import volume threshold for investigation termination.

Analysis:
The judgment addressed the issue of interpreting Rule 14(d) concerning the termination of anti-dumping duty investigations based on import volume. The appellant imported lead acid batteries from Bangladesh, and the Designated Authority continued the investigation despite the import volume being less than 3% of total imports, citing the value of imports as exceeding the de minimis limit. The Court found this interpretation incorrect and contrary to the purpose of imposing dumping duty, which aims to prevent unfair trade practices causing injury to domestic markets.

The Court highlighted the de minimis rule's application, stating that a negligible quantity of imports would not suffice to cause injury. The Agreement on Implementation of Article VI of the GATT, 1994 emphasized the prompt termination of investigations when the volume of dumped imports is negligible. The judgment clarified that the de minimis rule considers a dumping margin less than 2% for price and less than 3% of total imports for quantity as insignificant for legal action.

Moreover, the judgment underscored the distinction between volume and price in anti-dumping investigations. The Rules mandate considering the volume of dumped imports and their impact on prices in the domestic market. The 'like article' definition was crucial in determining the import volume threshold for investigation termination, ensuring that only comparable articles are included in the assessment.

The Court emphasized that the investigation should have been promptly closed against Bangladesh as the import volume was below 3% of total imports of the 'like article.' The Designated Authority's failure to terminate the investigation under Rule 14(d) was deemed erroneous, leading to the setting aside of the anti-dumping duty imposed on the appellant. The judgment concluded by allowing the appeal and overturning the decisions of the Tribunal and the Designated Authority.