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Commissioner of Customs, Bangalore Versus M/s. G.M. Exports & Others

2015 (9) TMI 1162 - SUPREME COURT

Levy of anti dumping duty - Provisional assessment - Whether anti-dumping duty imposed with respect to imports made during the period between the expiry of the provisional anti-dumping duty and the imposition of the final anti-dumping duty is legal and valid - Held that:- On a correct reading of the said sub-rule, therefore, the final anti-dumping duty only incorporates the provisional anti-dumping duty within itself, but in the manner provided by Rule 13. Thus, it is clear that such incorporati .....

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d in the same sense though not in the same form in sub-rule (2)(a). The same result therefore as is envisaged in clause 10.2 is achieved by the said construction – that is anti-dumping duty may be levied retroactively for the period for which provisional measures have been applied. The said construction is in consonance with the principles already laid down earlier in this judgment in that the WTO Agreement is intended to be applied by the various signatory nations in a uniform manner. This can .....

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ving at the aforesaid finding. Further, the High Court fails to give due importance in its judgment to Rules 13 and 21. We have already seen how Rule 21(1) envisages precisely the situation spoken of by the High Court, and yet states that, in the circumstances mentioned therein, despite dumping and material injury to the domestic industry, differential duty cannot be collected from the importer. In fact, the High Court goes on to say that the expression “imposed and collected” in Rule 21, not be .....

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r JUDGMENT R. F. Nariman, J. 1. Leave granted in S.L.P. (Civil) No. 13028 of 2012 and S.L.P. (Civil) No. 27811 of 2012. 2. Seven appeals are before us; some of them are from the Bombay High Court judgment dated 15.12.2011 and the Kerala High Court judgment dated 15.07.2009. Others are appeals against a Karnataka Tribunal (Bangalore) judgment and a Bombay Tribunal judgment, which follows the Bombay High Court judgment referred to above. Since all these appeals raise a common question of law of so .....

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t to imports made during the period between the expiry of the provisional anti-dumping duty and the imposition of the final anti-dumping duty is legal and valid. 4. It is necessary in this case to begin at the very beginning. The General Agreement on Tariffs and Trade (GATT) in Article VI first laid down how, conceptually, anti-dumping duties were to be imposed. The relevant part of Article VI reads as under:- Article VI Anti-dumping and Countervailing Duties 1. The contracting parties recognize .....

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he price of the product exported from one country to another (a) is less than the comparable price, in the ordinary course of trade, for the like product when destined for consumption in the exporting country, or, (b) in the absence of such domestic price, is less than either (i) the highest comparable price for the like product for export to any third country in the ordinary course of trade, or (ii) the cost of production of the product in the country of origin plus a reasonable addition for se .....

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the provisions of paragraph 1. 5. In pursuance of the said Article VI, various member nations entered into a World Trade Organisation Agreement to implement Article VI, in 1994. The said agreement is referred to as Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade, 1994 , and in its material aspects, which are important in order to decide the question raised in these appeals, states as follows:- Members hereby agree as follows: PART I Article 1 Principles An .....

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ion after the time when the decision taken under paragraph 1 of Article 7 and paragraph 1 of Article 9, respectively, enters into force, subject to the exceptions set out in this Article. 10.2 Where a final determination of injury (but not of a threat thereof or of a material retardation of the establishment of an industry) is made or, in the case of a final determination of a threat of injury, where the effect of the dumped imports would, in the absence of the provisional measures, have led to .....

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ursed or the duty recalculated, as the case may be. 10.6 A definitive anti-dumping duty may be levied on products which were entered for consumption not more than 90 days prior to the date of application of provisional measures, when the authorities determine for the dumped product in question that: (I) there is a history of dumping which caused injury or that the importer was, or should have been, aware that the exporter practises dumping and that such dumping would cause injury, and (ii) the i .....

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es as the withholding of appraisement or assessment as may be necessary to collect anti-dumping duties retroactively, as provided for in paragraph 6, once they have sufficient evidence that the conditions set forth in that paragraph are satisfied. 10.8 No duties shall be levied retroactively pursuant to paragraph 6 on products entered for consumption prior to the date of initiation of the investigation. 18.4 Each Member shall take all necessary steps, of a general or particular character, to ens .....

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d Act which reads as under:- Section 9A. Anti - dumping duty on dumped articles (1) Where any article is exported by an exporter or producer from any country or territory (hereafter in this section referred to as the exporting country or territory) to India at less than its normal value, then, upon the importation of such article into India, the Central Government may, by notification in the Official Gazette, impose an anti-dumping duty not exceeding the margin of dumping in relation to such art .....

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price may be constructed on the basis of the price at which the imported articles are first resold to an independent buyer or if the article is not resold to an independent buyer, or not resold in the condition as imported, on such reasonable basis as may be determined in accordance with the rules made under sub-section (6); (c) normal value , in relation to an article, means- (i) the comparable price, in the ordinary course of trade, for the like article when destined for consumption in the ex .....

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e of the like article when exported from the exporting country or territory to an appropriate third country as determined in accordance with the rules made under sub-section (6); or (b) the cost of production of the said article in the country of origin along with reasonable addition for administrative, selling and general costs, and for profits, as determined in accordance with the rules made under sub- section(6): Provided that in the case of import of the article from a country other than the .....

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y altering the description or name or composition of the article subject to such anti-dumping duty or by import of such article in an unassembled or dissembled form or by changing the country of its origin or export or in any other manner, whereby the anti-dumping duty so imposed is rendered ineffective, it may extend the anti-dumping duty to such article or an article originating in or exported from such country, as the case may be. (2) The Central Government may, pending the determination in a .....

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uty; and (b) refund shall be made of so much of the antidumping duty which has been collected as is in excess of the anti-dumping duty as so reduced. (2A) Notwithstanding anything contained in sub-section (1) and sub-section (2), a notification issued under sub-section (1) or any anti-dumping duty imposed under sub-section (2), unless specifically made applicable in such notification or such imposition, as the case may be, shall not apply to articles imported by a hundred per cent export-oriente .....

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s a history of dumping which caused injury or that the importer was, or should have been, aware that the exporter practices dumping and that such dumping would cause injury; and (ii) the injury is caused by massive dumping of an article imported in a relatively short time which in the light of the timing and the volume of imported article dumped and other circumstances is likely to seriously undermine the remedial effect of the antidumping duty liable to be levied, the Central Government may, by .....

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addition to any other duty imposed under this Act or under any other law for the time being in force. (5) The anti-dumping duty imposed under this section shall, unless revoked earlier, cease to have effect on the expiry of five years from the date of such imposition: Provided that if the Central Government, in a review, is of the opinion that the cessation of such duty is likely to lead to continuation or recurrence of dumping and injury, it may, from time to time, extend the period of such imp .....

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m time to time, be ascertained and determined by the Central Government, after such inquiry as it may consider necessary and the Central Government may, by notification in the Official Gazette, make rules for the purposes of this section, and without prejudice to the generality of the foregoing such rules may provide for the manner in which articles liable for any anti-dumping duty under this section may be identified and for the manner in which the export price and the normal value of and the m .....

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the margin of dumping for such exporter or producer shall be determined on the basis of facts available.; (7) Every notification issued under this section shall, as soon as may be after it is issued, be laid before each House of Parliament. (8) The provisions of the Customs Act, 1962, (52 of 1962) and the rules and regulations made thereunder, including those relating to the date for determination of rate of duty, assessment, non-levy, short levy, refunds, interest, appeals, offences and penalt .....

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s.- In these rules, unless the context otherwise requires- (e) provisional duty means an anti dumping duty imposed under sub-section (2) of section 9A of the Act; 5. Initiation of investigation. - (1) Except as provided in sub-rule (4), the designated authority shall initiate an investigation to determine the existence, degree and effect of any alleged dumping only upon receipt of a written application by or on behalf of the domestic industry. (2) An application under sub-rule (1) shall be in th .....

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producers of the like product, that the application has been made by or on behalf of the domestic industry : Provided that no investigation shall be initiated if domestic producers expressly supporting the application account for less than twenty five per cent of the total production of the like article by the domestic industry, and (b) it examines the accuracy and adequacy of the evidence provided in the application and satisfies itself that there is sufficient evidence regarding - (i) dumping .....

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c industry expressing either support for or opposition, as the case may be, to the application. (4) Notwithstanding anything contained in sub-rule (1) the designated authority may initiate an investigation suo motu if it is satisfied from the information received from the Collector of Customs appointed under the Customs Act, 1962 (52 of 1962) or from any other source that sufficient evidence exists as to the existence of the circumstances referred to in clause (b) of sub-rule (3). (5) The design .....

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c industry, threat of injury to domestic industry, material retardation to establishment of domestic industry and a causal link between dumped imports and injury, taking into account all 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 and in accordance with the principles set out in Annexure II to these rules. (3) The designated authority may, in .....

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d a preliminary finding regarding export price, normal value and margin of dumping, and in respect of imports from specified countries, it shall also record a further finding regarding injury to the domestic industry and such finding shall contain sufficiently detailed information for the preliminary determinations on dumping and injury and shall refer to the matters of fact and law which have led to arguments being accepted or rejected. It will also contain:- (i) the names of the suppliers, or .....

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its preliminary findings. 13. Levy of provisional duty - The Central Government may, on the basis of the preliminary findings recorded by the designated authority, impose a provisional duty not exceeding the margin of dumping: Provided that no such duty shall be imposed before the expiry of sixty days from the date of the public notice issued by the designated authority regarding its decision to initiate investigations: Provided further that such duty shall remain in force only for a period not .....

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margin of dumping of the said article; (ii) whether import of the said article into India, in the case of imports from specified countries, causes or threatens material injury to any industry established in India or materially retards the establishment of any industry in India; (iii) a causal link, where applicable, between the dumped imports and injury; (iv) whether a retrospective levy is called for and if so, the reasons therefor and date of commencement of such retrospective levy: Provided t .....

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e period of said one year, (b) recommending the amount of duty which, if levied, would remove the injury where applicable, to the domestic industry. (2) The final finding, if affirmative, shall contain all information on the matter of facts and law and reasons which have led to the conclusion and shall also contain information regarding- (i) the names of the suppliers, or when this is impracticable, the supplying countries involved; (ii) a description of the product which is sufficient for custo .....

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number of exporters, producers, importers or types of articles involved are so large as to make such determination impracticable, it may limit its findings either to a reasonable number of interested parties or articles by using statistically valid samples based on information available at the time of selection, or to the largest percentage of the volume of the exports from the country in question which can reasonably be investigated, and any selection, of exporters, producers, or types of artic .....

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of the investigation. (4) The designated authority shall issue a public notice recording its final findings. 18. Levy of duty. - (1) The Central Government may, within three months of the date of publication of final findings by the designated authority under rule 17, impose by notification in the Official Gazette, upon importation into India of the article covered by the final finding, anti-dumping duty not exceeding the margin of dumping as determined under rule 17. (2) In cases where the desi .....

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between the weighted average normal value of the selected exporters or producers and the export prices of exporters or producers not individually examined: Provided that the Central Government shall disregard for the purpose of this sub-rule any zero margin, margins which are less than 2 per cent expressed as the percentage of export price and margins established in the circumstances detailed in sub-rule (8) of rule 6. The Central Government shall apply individual duties to imports from any exp .....

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give an undertaking pursuant to rule 15 and such undertaking has not been promptly given and in such cases duty shall not be levied only on the articles of specific producers which supply the area in question. (4) If the final finding of the designated authority is negative that is contrary to the evidence on whose basis the investigation was initiated, the Central Government shall, within forty-five days of the publication of final findings by the designated authority under rule 17, withdraw t .....

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dumped imports in the absence of provisional duty would have led to injury, the anti-dumping duty may be levied from the date of imposition of provisional duty; (b) in the circumstances referred to in sub-section (3) of section 9A of the Act, the antidumping duty may be levied retrospectively from the date commencing ninety days prior to the imposition of such provisional duty: Provided that no duty shall be levied retrospectively on imports entered for home consumption before initiation of the .....

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r such date as the Central Government may specify in each case. 21. Refund of duty. - (1) If the anti-dumping duty imposed by the Central Government on the basis of the final findings of the investigation conducted by the designated authority is higher than the provisional duty already imposed and collected, the differential shall not be collected from the importer. (2) If, the anti-dumping duty fixed after the conclusion of the investigation is lower than the provisional duty already imposed an .....

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how the question which has to be determined by this judgment arose. On 6th August, 2001 a public notice was issued by the Designated Authority initiating proceedings in regard to the import of Vitrified/Porcelain tiles originating in or exported from the People s Republic of China and the United Arab Emirates. The Designated Authority issued preliminary findings on 3rd December, 2001. Following the preliminary findings, the Union Government imposed, by a notification dated 2nd May, 2002, a provi .....

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.e. 2nd May, 2002. The question before the Court is as to whether the Central Government was within its jurisdiction in imposing a final antidumping duty between 2nd November, 2002 and 30th April, 2003. This, according to the assessees, is the gap period when the provisional duty had come to an end by efflux of six months until a final notification was issued by the Union Government on 1st May, 2003. 9. The stage is now set for setting out the arguments of the learned counsel both for the revenu .....

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er construction would defeat the object and purpose of imposing a final anti-dumping duty after the Designated Authority has found, post investigation, that there is dumping of goods and material injury to the domestic industry as a result. Thus, despite dumping and material injury being present, no anti-dumping duty would be leviable in the interregnum period which would be wholly subversive of the object sought to be achieved; that is, saving the domestic industry from unfair trade practices o .....

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ng to learned counsel, levied in Rule 20(2)(a) obviously does not include collection as has been held in several Supreme Court judgments and therefore, levy would not include collection for which reason Rule 20 has to be read on its own without reference to the consequence that is found in Rule 21. She further argued that it is true that laws that are made in pursuance of international treaties ought to be construed in accordance with such treaties, but where the Indian law deviates from the tre .....

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n the light of the WTO Agreement, and so interpreted would necessarily be interpreted as meaning only the period for which the provisional duty is levied, and not beyond. It has been argued with some vehemence that this also follows from a reading of clause 18.4 of the Agreement and a reading of the Central Government s own website which was referred to us in the course of arguments stating that the anti-dumping rules are in consonance with the WTO Agreements on anti-dumping. Further, it has bee .....

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therefore if Rule 20 were to be read in the manner suggested by revenue, it would be ultra vires the parent statute. It was further argued that the levy of anti-dumping duty is not automatic and is only levied by the Central Government taking into account a series of complex economic factors. This being so, the continuity of such levy can only be for the period indicated in the provisional duty levy notification and not beyond. It was also argued that, on a true construction of Rule 20(2)(a), t .....

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od of six months of the levy of provisional duty beyond six months and until the notification imposing the final anti-dumping duty. 12. Two earlier judgments of this Court have stated as to what exactly was the object sought to be achieved by the introduction of Section 9A of the Customs Tariff Act read with the Anti-Dumping Rules. But before we come to these judgments, it is important to refer to our basic law, and in particular Article 51(c) of the Constitution of India, which reads as follows .....

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ariff Act, 1975 and the Rules and is the outcome of the General Agreement on Tariff and Trade (GATT) to which India is a party. The purpose behind the imposition of the duty is to curb unfair trade practices resorted to by exporters of a particular country of flooding the domestic markets with goods at rates which are lower than the rate at which the exporters normally sell the same or like goods in their own countries so as to cause or be likely to cause injury to the domestic market. The levy .....

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ffect is the judgment of Reliance Industries Ltd. v. Designated Authority and others, (2006) 10 SCC 368: The result was that an industrial base was created in India after independence and this has definitely resulted in some progress. The purpose of Section 9-A can, therefore, easily be seen. The purpose was that our industries which had been built up after independence with great difficulties must not be allowed to be destroyed by unfair competition of some foreign companies. Dumping is a well- .....

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rman economist Friedrich List in his famous book 'National System of Political Economy' published in 1841) but to prevent unfair trade practices. The 1995 Amendment to Section 9A was apparently made in pursuance to Article VI of the General Agreement on Tariffs and Trade 1994 (GATT 1994) which permitted anti-dumping measures as an instrument of fair competition. The concept of anti-dumping is founded on the basis that a foreign manufacturer sells below the normal value in order to destab .....

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n The Jade The Eschersheim Owners of the motor vessel Erkowit v. Owners of the ship Jade, [1976] 1 All ER 920, the House of Lords stated: As the Act was passed to enable Her Majesty s government to give effect to the obligations in international law which it would assume on ratifying the convention to which it was a signatory, the rule of statutory construction laid down in Salomon v. Customs and Excise Commissioners [1966] 3 All ER 871 and Post Office v. Estuary Radio Ltd. [1967] 3 All ER 633 i .....

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ant husband. The purpose for which the Recognition Act was passed is declared by the preamble to be with a view to the ratification by the United Kingdom of the Recognition Convention and for other purposes. Where Parliament passes an Act amending the domestic law of the United Kingdom in order to enable this country to ratify an international treaty and thereby assume towards other states that are parties to the treaty an obligation in international law to observe its terms, it is a legitimate .....

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l ER 633. [at page 903] 17. In Garland v. British Rail Engineering Ltd., [1982] 2 All ER 402, the same Rule was set out with an addition - that not only should municipal law carry out treaty obligations, but it should also not be inconsistent with the terms of a treaty. This was put by the House of Lords in the following words:- My Lords, even if the obligation to observe the provisions of article 119 were an obligation assumed by the United Kingdom under an ordinary international treaty or conv .....

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e reasonably capable of bearing such a meaning, as intended to carry out the obligation, and not to be inconsistent with it. [at page 415] 18. Another interesting aspect was brought out by the House of Lords in The Hollandia s case [1982] 3 All ER 1141, and that is that a treaty provision embodied in a statute needs to be construed uniformly in all the member nations who are its signatories, and should therefore not be controlled by domestic precedents but should be construed on its own terms on .....

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tatute law. But since they form part of an international convention which must come under the consideration of foreign as well as English courts, it is, as Lord Macmillan said of the Hague Rules themselves in Stag Line Ltd. v. Foscolo, Mango and Co. Ltd.[1932] A.C. 328 at 350, [1931] All ER Rep 666 at 677 - desirable in the interests of uniformity that their interpretation should not be rigidly controlled by domestic precedents of antecedent date, but rather that the language of the rules should .....

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age No.1145] 19. In Sidhu and others v. British Airways plc Abnett (known as Sykes) v. British Airways plc, [1997] 1 All ER 193, the same thought was echoed in the following words:- I believe that the answer to the question raised in the present case is to be found in the objects and structure of the convention. The language used and the subject matter with which it deals demonstrate that what was sought to be achieved was a uniform international code, which could be applied by the courts of all .....

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an accepted proposition of law that the rules of Customary International Law which are not contrary to the municipal law shall be deemed to have been incorporated in the domestic law and shall be followed by the Courts of Law. To support we may refer to Justice H.R. Khanna's opinion in Addl. Distt. Magistrate Jabalpur v. Shivakant Shukla [(1976) 2 SCC 521 : AIR 1976 SC 1207], Jolly George Varghese v. Bank of Cochin [(1980) 2 SCC 360 : AIR 1980 SC 470] and Gramophone Co. of India Ltd. v. Bire .....

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ch may be quoted hereinbelow in extenso: "7. A person surrendered can in no case be kept in custody or be brought to trial in the territories of the High Contracting Party to whom the surrender has been made for any other crime or offence, or on account of any other matters, than those for which the extradition shall have taken place, until he has been restored, or has had an opportunity of returning, to the territories of the High Contracting Party by whom he has been surrendered. This sti .....

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d Article of the Extradition Treaty…. [at para 3] 22. In yet another judgment of this Court, i.e. S&S Enterprise, already referred to, this Court construed Rule 14(d) of the very anti-dumping rules with which we are concerned, in the light of the very agreement on implementation of Article VI of GATT. This Court was asked to compute the volume of exports on the basis of price and not on the basis of quantity. In repelling this contention, this Court referred to Article 5.8 of the Agre .....

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e shall be immediate termination in cases where the authorities determine that the margin of dumping is de minimis, or that the volume of dumped imports, actual or potential, or the injury, is negligible. The margin of dumping shall be considered to be de minimis if this margin is less than 2%, expressed as a percentage of the export price. The volume of dumped imports shall normally be regarded as negligible if the volume of dumped imports from a particular country is found to account for less .....

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umped imports must account for less than 3% of the total imports. To hold otherwise would mean that if the price is lower than 3%, irrespective of the quantity imported, the investigation would be dropped and it would, as submitted by the appellant, lead to the absurd situation that a small number of expensive imports would invite anti-dumping investigation but cheap imports flooding the domestic markets would not. In fact such a situation is exactly what the dumping rules have been framed to pr .....

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is not a signatory or general rules of international law are made applicable. It is in this situation that if there happens to be a conflict between domestic law and international law, domestic law will prevail. (2) In a situation where India is a signatory nation to an international treaty, and a statute is passed pursuant to the said treaty, it is a legitimate aid to the construction of the provisions of such statute that are vague or ambiguous to have recourse to the terms of the treaty to re .....

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ns, and not to be inconsistent with them. (4) In a situation in which India is a signatory nation to an international treaty, and a statute is made to enforce a treaty obligation, and if there be any difference between the language of such statute and a corresponding provision of the treaty, the statutory language should be construed in the same sense as that of the treaty. This is for the reason that in such cases what is sought to be achieved by the international treaty is a uniform internatio .....

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e imposed at a rate that does not exceed the margin of dumping, which only means the difference between the export price and the normal value of such article in international trade. It is clear that sub-section (1) refers to a final or definitive duty, and has to be read with sub-section (3) thereof, which authorises the levy of the final or definitive anti-dumping duty retrospectively in the circumstances mentioned in sub-section (3). The scheme therefore of Section 9A(1) and (3) is that an ant .....

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to levy an anti-dumping duty with retrospective effect. 25. Section 9A(2) speaks of an anti-dumping duty which the Central Government levies on the basis of a provisional estimate, thus referring to a provisional anti-dumping duty. The Section further goes on to say that after a final determination is made in accordance with the Rules, the Central Government may reduce such provisional anti-dumping duty, having regard to the final determination made by the designated authority under the Rules. I .....

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y. 26. It is important to note that neither sub-section (2) nor sub-section (6) authorises the Central Government, either expressly or by necessary implication, to make rules and/or to levy anti-dumping duty with retrospective effect. This is in contrast with sub-section (3) which expressly so authorises the Central Government in the circumstances mentioned in the sub-section. Interpretation of the Anti-Dumping Rules 27. A reading of the Anti-Dumping Rules would show that they have been framed k .....

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material injury to the domestic industry and (iii) where applicable, a causal link between such dumped imports and the material injury - see Rule 5. Such investigation is to be initiated by issue of a public notice under rule 6. Since material injury to an established domestic injury or material retardation of the establishment of any such industry is an important aspect in levying anti dumping duty, the designated authority is to be guided, under Rule 11, by Annexure II of the Rules, paragraphs .....

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e effects on cash flow, inventories, employment, wages, growth, ability to raise capital investments. (v) It must be demonstrated that the dumped imports are, through the effects of dumping, as set forth in paragraphs (ii) and (iv) above, causing injury to the domestic industry. The demonstration of a causal relationship between the dumped imports and the injury to the domestic industry shall be based on an examination of relevant evidence before the designated authority. The designated authorit .....

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s, developments in technology and the export performance and the productivity of the domestic industry. 28. It will thus be seen that the determination of material injury to domestic industry depends on a series of complex economic factors which are to be segregated from other factors which may also cause injury to the said industry. 29. Under Rule 12, the designated authority is to proceed expeditiously with the conduct of the investigation and shall in appropriate cases record his preliminary .....

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nt to impose provisional anti-dumping duty not exceeding the margin of dumping, with two provisos. First, no such duty can be imposed before the expiry of 60 days from the date of public notice issued by the designated authority regarding its decision to initiate investigations. And second, such duty cannot remain in force for a period of more than six months, which is only extendable on request made by the foreign exporters who represent a significant percentage of the trade involved, to a maxi .....

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d of 6 months, and no more (Clause 5.10 of the WTO Agreement). Significantly, the designated authority, in its final finding, may also provide for a retrospective levy of duty, the reasons therefor, and the date of commencement of such retrospective levy. This is obviously referable to Section 9A(3), which reproduces clause 10.6 of the WTO Agreement. The reasons must be the reasons mentioned in the said sub-section, and, as mentioned in the said sub-section, such retrospective levy cannot commen .....

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at it is concerned only with the date of commencement of duty. Once this is appreciated, it becomes clear that its focus is only on when anti-dumping duties are to commence. In sub-rule (1), it speaks of anti-dumping duties levied under Rule 13 and Rule 19, and states that they shall take effect only prospectively, i.e. from the date of publication in the official gazette. It is clear that Rule 19 is a mistake made by the draftsman of the Rules. Rule 18 is obviously referred to. Thus, under sub- .....

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osition of a provisional duty. It will immediately be noticed that the subject matter of sub-clause (a) does not purport to be the imposition of an anti-dumping duty with retrospective effect. This is because it seeks to give effect to clause 10.2 of the WTO Agreement. As has been argued by learned counsel on both sides, the key to the understanding of the import of sub-clause (a) is the expression where a provisional duty has been levied…. Obviously, the word levied has to be read as lev .....

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ng duty from the date of imposition of a provisional duty so as to convert the provisional measure into a final measure, or so as to take within its ken the provisional anti-dumping duty already imposed. This aspect is succinctly put by A Handbook on Anti-Dumping Investigations by Judith Czako, Johann Human and Jorge Miranda. The learned authors state: L. RETROACTIVE COLLECTION OF DEFINITIVE DUTIES The normal rule for application of definitive duties, set out in Article 10.1 of the AD Agreement, .....

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l measures were applied (and for all practical purposes converts the provisional measure into a definitive measure); and The other involves the collection of definitive duties up to 90 days prior to the date of application of provisional measures, although no definitive duties can be collected on imports that took place before initiation. 36. On a correct reading of the said sub-rule, therefore, the final anti-dumping duty only incorporates the provisional anti-dumping duty within itself, but in .....

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tion makes it clear that clause 10.2 of the WTO Agreement is reproduced in the same sense though not in the same form in sub-rule (2)(a). The same result therefore as is envisaged in clause 10.2 is achieved by the said construction - that is anti-dumping duty may be levied retroactively for the period for which provisional measures have been applied. The said construction is in consonance with the principles already laid down earlier in this judgment in that the WTO Agreement is intended to be a .....

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of 4 months extendable upto a maximum period of 6 months (instead of 6 months and 9 months respectively) so far as the life span of a provisional duty is concerned. Most of Europe and the rest of the world have opted to impose duties upto the margin of dumping depending upon the extent of injury caused to their domestic industry. Interestingly, the European Community Council Regulation No. 1225 of 2009 dated 30.11.2009 on protection against dumped imports from countries not members of the Europe .....

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by a simple majority to reject the proposal, within a period of one month after its submission by the Commission. Where provisional duties are in force, a proposal for definitive action shall be submitted no later than one month before the expiry of such duties. The amount of the anti-dumping duty shall not exceed the margin of dumping established but it should be less than the margin if such lesser duty would be adequate to remove the injury to the Community industry. 38. It will be seen from .....

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p period, may exist between the expiration of the end of the provisional measures, even if extended, and the publication of the ITC s final determination (the starting of definitive duties) where the DOC cannot require CBP to collect cash deposits, bonds, or other securities. (The gap period begins the day after the end of the 4- or 6-month period, and ends the day before the ITC s final determination is published). The DOC normally administers this problem in one of two ways. We either send ins .....

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ra vires Section 9A. It has already been seen that sub-section (2) and sub-section (6) of Section 9A do not authorize the imposition of a duty with retrospective effect, in contrast with sub-section (3) thereof. Any duty levied by a final duty notification during the interregnum period would necessarily amount to a retrospective levy of duty for the reason that such period is not covered by the provisional duty notification, being beyond 6 months. This would therefore render sub-rule (2)(a) ultr .....

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d around the expression levied in Rule 20 sub-rule (2)(a), revenue contending, based on two judgments of this Court in N.B. Sanjana, Assistant Collector of Central Excise, Bombay and others v. The Elphinstone Spinning and Weaving Mills Company Ltd., 1971 (1) SCC 337 and Assistant Collector of Central Excise, Calcutta Division v. National Tobacco Co. of India Ltd., (1972) 2 SCC 560, that levy does not include collection . This has been countered by arguments on behalf of the assessees that the wo .....

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2). If provisional anti-dumping duty is found to be higher than the final anti-dumping duty, the differential shall be refunded to the importer. But sub-rule (1) goes a step further and states that if the anti-dumping duty finally imposed is higher than the provisional duty already imposed and collected, the differential shall not be collected from the importer. 44. It is obvious that this Rule has been framed in the interest of international trade. It is well known that export contracts are ent .....

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collected from the importer under Rule 21(1) for the period that the provisional duty notification is in force, during the interregnum period, the full amount of final duty is liable to be recovered from the importer. This would turn Rule 21(1) on its head and result in an absurdity. A simple example will suffice. If provisional duty already imposed and collected is ₹ 50/- per metric ton (PMT), and final duty imposed say one year later with retroactive effect from the date of imposition of .....

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mple demonstrates how the arguments of the revenue would lead to an absurdity such as this. 45. Rule 21(1) also answers the contention of the Revenue that the object of anti-dumping laws would be defeated if it were found that dumping and material injury having been found, yet no anti-dumping duty can be levied. By application of this Rule, it is clear that for the period that the provisional duty notification is in force, the difference of ₹ 50/-, in the example just given, cannot be coll .....

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favour of the latter. 46. We also find force in the submission of learned counsel for the assessees that the revenue s construction of Rule 20 would achieve indirectly what cannot be achieved directly, having regard to the mandatory language contained in Rule 13 second proviso. Here again a simple example would suffice. Say the provisional duty is levied at the rate of ₹ 50/- PMT and comes to an end after 6 months. 6 months later, a final duty is imposed again at the same rate of ₹ .....

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ns now to deal with the impugned judgment of the Bombay High Court. After setting out the contentions of the respective parties and referring to the relevant statutory provisions and the WTO Agreement, the Bombay High Court arrives at a finding that Parliament has made a departure from the language used in the WTO Agreement and the Court must therefore give effect to such departure. 48. We have already held that this would fly in the face of all the judgments referred to in paragraphs 15 to 22 h .....

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rnet website which deals with the law of anti-dumping. 49. The High Court goes on to state that the construction suggested on behalf of the assessee would lead to a manifest absurdity as there would be no reason or justification to hold that the levy of anti-dumping duty must sustain a break during the period between the expiry of the provisional duty notification and the issuance of a notification imposing a final anti-dumping duty. The High Court went on to hold that the object and purpose und .....

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