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TMI Blog2005 (6) TMI 299X X X X Extracts X X X X X X X X Extracts X X X X ..... it from Indonesia to India. The authority designated under the Customs Tariff (Identification, Assessment and Collection of Anti-dumping Duty on Dumped Articles and for Determination of Injury Rules, 1995 (hereinafter referred to as the Rules of 1995), on a written application received on behalf of the domestic industry alleging dumping of POY originating in or exported from Indonesia, Taiwan, Thailand and Malaysia initiated the anti-dumping investigation concerning imports of POY by issuing a public notice on 10-11-2000, in the Gazette of India, Extraordinary, as required by the Rules. Thereafter, the Designated Authority issued a public notice dated 30-3-2001 in the Gazette of India, Extraordinary, publishing its preliminary findings, a copy of which was forwarded to the known interested parties who were requested to furnish their views. It appears that on 9-11-2001, the appellant offered a price undertaking envisaged by Rule 15 of the Rules of 1995. It also appears that in October 2001, the officers investigating, had visited Indonesia to examine the correctness of the objections raised by the appellant against the preliminary finding. Thereafter, on 10-12-2001, the Designated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the domestic industry relied upon the decision of the Supreme Court in National Insurance Co. Ltd., Chandigarh v. Nicolletta Rohtagi and Others reported in (2002) 7 SCC 456, for the proposition, emanating from Paragraph 27 of the judgment, that the right of appeal is not an inherent right or common law right, but it is a statutory right and if the law provides that an appeal can be filed on limited grounds, the grounds of challenge cannot be enlarged on the premise that the insured or the persons against whom a claim has been made have not filed any appeal. 3.2 He also placed reliance on the decision of this Tribunal in Altek Lammertz Needles Ltd. v. Designated Authority, D.G. of Anti-dumping reported in 2000 (115) E.L.T. 266 (T) rendered in the context of the provisions of Section 9C of the Act, in which the Tribunal held in Para 9 of the order that, as per Clause (1) of Section 9C of the Act, an appeal against the order of determination regarding the existence, degree and effect of any subsidy or dumping in relation to import of an article shall lie to this Tribunal. It was held that only two categories of orders are appealable before the Tribunal and that if the Designated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been received, the views and counter views were referred to in the disclosure of essential facts under the communication dated 10-12-2001. He submitted that, the Designated Authority never informed the appellant about the non-acceptance of the undertaking and its non-acceptance suddenly appeared in the final findings published under Rule 17, with a cryptic observation that the price undertaking was not accepted. He contended that the stage of offering price undertaking was an important stage which cast a duty on the Designated Authority to apply its mind to the nature of the undertaking and find out whether the revised price offered for export thereunder eliminated the effect of dumping. He stated that the officers of the Designated Authority had visited Indonesia on 8/9-10-2001 and they had inspected the records of the appellant. He argued that the rate at which anti-dumping duty has been imposed on the appellant exactly tallied with the revised prices offered by the appellant in its undertaking and, therefore, there was no reason for the Designated Authority to impose anti-dumping duty instead of accepting the price undertaking offered by them. He submitted that as per the schem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ven by the Designated Authority for non-acceptance of the undertaking are valid and the appellants did not have any legal right to get its undertaking accepted. It was also submitted for the domestic industry that the undertaking was not valid and satisfactory. It was submitted on the basis of Rule 15 that, it was left to the discretion of the Designated Authority to proceed with the investigation and give final findings notwithstanding the offer of a price undertaking by any exporter. It was, therefore, submitted that it was not incumbent on the part of the Designated Authority to have communicated any decision on the price undertaking before making of the final findings. It was submitted that the notification of final findings amply communicated the rejection of the price undertaking on the ground that it was not acceptable. Reasoning : 7. The said Rules of 1995, framed under Section 9A(6) of the said Act prescribe the procedure for ascertaining and determining the margin of dumping, manner in which articles liable for anti-dumping duty may be identified, the manner in which the export price and normal value of, and the margin of dumping in relation to such articles may be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nated Authority the Central Government may not impose a duty under sub-section (2) of section 9A of the Act for such period the undertaking acceptable to the Designated Authority remains valid. (6) Where the Designated Authority has accepted any undertaking under sub-rule (1), it may require the exporter from whom such undertaking has been accepted to provide from time to time information relevant to the fulfilment of the undertaking and to permit verification of relevant data : Provided that in case of any violation of an undertaking, the Designated Authority shall, as soon as may be possible, inform the Central Government of the violation of the undertaking and recommend imposition of provisional duty from the date of such violation in accordance with the provisions of these rules (7) The Designated Authority shall, suo motu or on the basis of any request received from exporters or importers of the article in question or any other interested party, review from time to time the need for the continuance of any undertaking given earlier." 8. The learned Counsel for the respondents have raised a preliminary objection to the effect that no appeal lies under Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9C in appeal, because, an order of determination of margin of dumping of an article would necessarily be an order made in the context of the "existence, degree and effect" of dumping. An investigation into the "existence" of dumping calls for ascertaining the 'export price' and 'normal value' of the article and finding out the difference, if any, to determine the 'margin of dumping'. The "degree" of dumping is reflected by the margin of dumping judged by the quantum element of dumping that is, whether it is voluminous so as to cause material injury to the domestic industry or de minimis. The "effect" of dumping has reference to the impact of dumping on the domestic industry in the context of injury caused by the volume of dumping of the article under enquiry. 9. Section 9C only determines the jurisdiction of the Appellate Tribunal to examine the validity of the order of determination regarding the 'existence, degree or effect' of dumping of the article and does not specify the possible grounds on which it can be challenged. The challenge against such order of determination is to be judged on the anvil of statutory provisions governing the exercise of the power. If the power ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ause, by a satisfactory and valid price undertaking assuring revised prices in the context of the preliminary determinations on dumping and injury made against such exporter, the exports by such exporter at the revised prices will put an end to dumping so far as such exporter is concerned and, there will not be any "degree" or "effect" of dumping, as dumping by such exporter will cease to "exist". 12. The undertaking as regards the price increase can be accepted by the Designated Authority only after the preliminary determination of dumping and injury as laid down in Rule 15(2). Acceptance or rejection of an undertaking is, therefore, a matter which will have a direct bearing on the existence, degree and effect of dumping by exporter giving such undertaking because, if accepted the revised prices will eliminate dumping and its degree and effect, leaving no scope for the imposition of any anti-dumping duty on such exporter in the order of determination. We are, therefore, of the view that the order of determination can be challenged by the appellant on the ground that the price undertaking was rejected arbitrarily and contrary to the Rules. The preliminary objection against th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... final determination of dumping in the final findings under Rule 17, though it may be open for the Central Government to consider the same in its wider powers under Section 9B(1)(c)(ii) of the said Act. 13.3 To allow sufficient time for a complete analysis, price undertakings should be offered as early as possible after the preliminary determination of dumping. In some countries, guidelines prescribe, 45 or 60 days' period after the preliminary determination for offering such price undertakings. 14. While considering the acceptance of price undertaking offered by an exporter the following aspects would be relevant for deciding whether it should be accepted or not : (a) whether the injury caused by dumping can be eliminated; (b) whether there exist effective measures to monitor its fulfilment; (c) whether such acceptance is consistent with public interest; (d) whether there exists any possibility of circumvention of the undertaking in any way; and (e) any other relevant factor that the Designated Authority may consider necessary to examine. 14.1 Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s exercise to be undertaken by the Designated Authority and a validly given undertaking cannot be brushed aside casually. 15. In the present case, the price undertaking was filed by the appellant on 9-11-2001. In the said price undertaking, it was stated that it was offered by the appellant to the Designated Authority in respect of POY which was the subject matter of a dumping investigation initiated on 10-11-2001 and the preliminary findings notified by the authority on 30-3-2001. In clause 3 of the price undertaking, it was stated that the company agreed not to sell the subject goods for export to India at prices lower than the prices stipulated in the grid in Appendix A. In clause 4, the company agreed not to circumvent this undertaking in any way including the shipment of the subject goods to India through a subsidiary, branch agent or other company, or by the direct shipment of the subject goods to India from a country other than Indonesia. The company also agreed to provide on the undertaking invoice and/or the commercial invoice submitted to meet the Authority's invoicing requirements, the information described in Appendix B, as stated in clause 5. It also agreed to pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tigation. Interested parties were asked to comment on the same latest by 20-12-2001. In the said disclosure statement it was stated in Paragraph 2.4.1 as under : "2.4.1. M/s. Polysindo has indicated their interest in having a price undertaking with the authority." 15.4 The Designated Authority is required under the Rules to take a decision on the question of acceptance of the undertaking. The admitted facts disclose that the price undertaking was not rejected on the ground of delay in offering it. The procedure for consideration of the price undertaking was started by the Designated Authority and there was no objection raised against it even by the domestic industry on the ground of delay. We are, therefore, not called upon to decide the issue of delay in the filing of the undertaking, which, having regard to the nature of the investigation proceedings, ought to be offered within a reasonable time from the date of preliminary determination in the absence of any statutorily laid down time limit as has been done in some nations which have prescribed under their rules time limits of 45 or 60 days. 15.5 Admittedly the order rejecting the price undertaking of the appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceptable." 16. Thus the Designated Authority, on consideration of the price undertaking offered by the appellant, merely held that the price undertaking was not acceptable, without mentioning any reason for rejection in the final findings presumably by placing reliance on the office note of the Director. The said office note did not indicate why was it "not practicable" to accept the undertaking nor did it refer to any defect in its "form" nor to any "circumstance" that called for its non-acceptance. Merely because there were "very divergent views on the issue by both the interested parties" the price undertaking cannot be rejected without considering it on merits and making a determination as to the effect of such undertaking on dumping provisionally attributed to such exporter. The office note concluded the consideration of the undertaking by simply stating that the "Authority may consider the issue at the time of next review". It is clear to us, and even the learned Counsel for the Designated Authority has submitted, that no decision on the merits of the price undertaking was taken. The learned Counsel for the Designated Authority however, submitted that the Authority foun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... challenged thereunder as it has a direct bearing on the order of the determination regarding existence, degree and extent of dumping. 18. In the present case when the price undertaking was offered on 9-11-2001, it was not rejected on the ground of delay as noted above, and the Designated Authority proceeded to invite comments of the interested persons who also never objected to it on the ground of delay. The investigating agency that visited Indonesia for ascertaining the facts came back with the calculations which admittedly matched with the revised prices which were offered later by the exporter in the price undertaking. Admittedly, the revised prices in the undertaking tallied with the extent of anti-dumping duty which came to be imposed on this importer. There was, therefore, every reason to consider the price undertaking of this exporter on merits along with the objections raised against it. There was nothing indicated to show how the acceptance of the undertaking was not practicable. The Designated Authority, therefore, ought to have given a decision on merits on the acceptance or otherwise of the price undertaking offered by the appellant before issuing the notificati ..... X X X X Extracts X X X X X X X X Extracts X X X X
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