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2015 (9) TMI 1162 - SUPREME COURT

2015 (9) TMI 1162 - SUPREME COURT - 2015 (324) E.L.T. 209 (SC), (2016) 1 SCC 91 - 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 itse .....

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h interpretation 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 inte .....

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ives full effect to. These basic points have been missed by the High Court in arriving 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 C .....

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J. For the Petitioner : Mr. B. Krishna Prasad For the Respondent : Mr. Rajesh Kumar 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 judgme .....

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ich arises in the instant appeals is 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. 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:- Arti .....

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uced into the commerce of an importing country at less than its normal value, if the 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 pr .....

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icle, the margin of dumping is the price difference determined in accordance with 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, s .....

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and anti-dumping duties shall only be applied to products which enter for consumption 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 .....

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he amount estimated for the purpose of the security, the difference shall be reimbursed 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 e .....

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ent. 10.7 The authorities may, after initiating an investigation, take such measures 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 M .....

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which we are directly concerned is the introduction of a new Section 9A to the said 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, impos .....

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ory arrangement between the exporter and the importer or a third party, the export 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 ordi .....

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r comparison, the normal value shall be either- (a) comparable representative price 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) .....

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ntion of anti-dumping duty imposed under sub-section (1) has taken place, either by 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, .....

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ination and as soon as may be after such determination, reduce such anti-dumping duty; 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 .....

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respect of the dumped article under inquiry, is of the opinion that - (i) there is 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 .....

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notification. (4) The anti-dumping duty chargeable under this section shall be in 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 recurren .....

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e margin of dumping as referred to in subsection (1) or sub-section (2) shall, from 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 identif .....

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d that where an exporter or producer fails to provide such records or information, 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, .....

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the determination of the present controversy are set out hereunder:- 2. Definitions.- 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 beh .....

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the degree of support for, or opposition to the application expressed by domestic 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 applicat .....

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f the total production of the like article produced by that portion of the domestic 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 existe .....

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ustry in India. (2) The designated authority shall determine the injury to domestic 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 prin .....

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ously with the conduct of the investigation and shall, in appropriate cases, record 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 bein .....

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determination. (2). The designated authority shall issue a public notice recording 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 investiga .....

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nment its final finding - (a) as to, - (i) the export price, normal value and the 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, th .....

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ion was kept under suspension shall not be taken into account while calculating the 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 c .....

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er concerned of the article under investigation: Provided that in cases where the 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 reasona .....

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dividual examination would be unduly burdensome and prevent the timely completion 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 exceed .....

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ng duties is calculated on the basis of a prospective normal value/ the difference 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 ru .....

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opportunity to cease exporting at dumped prices to the area concerned or otherwise 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 p .....

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rded a final finding of threat of injury and a further finding that the effect of 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 .....

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hall be deemed to have been levied from the date of violation of the undertaking or 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 con .....

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national v. Commissioner of Customs, Civil Appeal No. 5119 of 2012, which explain 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 find .....

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with effect from the date of the imposition of the provisional antidumping duty i.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 i .....

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l duty and the imposition of the final duty. According to learned counsel, any other 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 t .....

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the mind should not boggle in giving such fiction its logical consequence. According 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 construe .....

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l for the various assessees have argued that Rule 20(2)(a) should be interpreted in 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 ru .....

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contrast, do not allow any imposition, retrospectively, of anti-dumping duty, and 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 a .....

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indirectly what it is prohibited from doing directly - namely, extending the period 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, an .....

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its language. The imposition of dumping duty is under Section 9A of the Customs Tariff 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 count .....

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sufficient to cause injury to the domestic industry. [at para 4] 14. To similar effect 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 t .....

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on. The purpose is not protectionism in the classical sense (as proposed by the German 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 .....

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made in response to an international treaty obligation by a member nation. Thus, in 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 Commissione .....

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instant case, however, this does not help the respondent wife; it helps the appellant 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 t .....

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ommissioners [1966] 3 All ER 871 and Post Office v. Estuary Radio Ltd. [1967] 3 All 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 oblig .....

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he international obligation of the United Kingdom, are to be construed, if they are 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 no .....

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United Kingdom: they are to be treated as if they were part of directly enacted statute 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 domest .....

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t being expressly referred to in the Rules, are not specifically prohibited. [at page 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 achi .....

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ould be no difficulty in accepting them as part of the domestic law. It is almost 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 Co .....

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ins several articles of which Article 7 is rather significant for our purpose, which 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 t .....

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rovisions of Section 21 of the Extradition Act are in consonance with the aforesaid 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 quan .....

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evidence of either dumping or of injury to justify proceeding with the case. There 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 th .....

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ss than 3% of the imports of the like product, it must mean that the quantity of dumped 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. .....

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try. This is a situation in which there is an international treaty to which India 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 sta .....

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her than earlier domestic precedents, being intended to carry out treaty obligations, 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 .....

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ss than its normal value. Such duty can, in the Central Government s discretion, be 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 mentione .....

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of sub-section (3), no other part of Section 9A authorises the Central Government 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 reg .....

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vernment s power to make rules, inter alia, to assess and collect anti-dumping duty. 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 Rul .....

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ritten application by or on behalf of the domestic industry into (i) dumping (ii) 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 .....

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estic prices; the magnitude of the margin of dumping; actual and potential negative 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 examina .....

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restrictive practices of and competition between the foreign and domestic producers, 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 c .....

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ule 13, in line with clause 7.4 of the WTO Agreement, enables the Central Government 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 .....

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the Central Government only in special circumstances, and only by a further period 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 .....

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peals. The first thing to notice about Rule 20 is, as its marginal note states, that 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 .....

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to be retrospectively imposed, that is a retrospective imposition prior to the imposition 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 provisio .....

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ear that all that sub-rule (2)(a) does is to enable the levy of a final anti-dumping 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 .....

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nvolves the collection of definitive duties for the period during which provisional 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-dump .....

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apse of the provisional duty and the imposition of the final duty. Such interpretation 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 alread .....

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Argentina, Mexico and USA therefore have, under the WTO Agreement, only a period 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. .....

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Advisory Committee. The proposal shall be adopted by the Council unless it decides 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 .....

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g is the statement of law:- Therefore, a period of time, known sometimes as the gap 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) .....

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htly differently, the suggested construction by revenue would render Rule 2(a) ultra 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 not .....

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42. One other interesting thing remains. Most of the debate at the Bar was centered 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 collec .....

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10.3 of the WTO Agreement. Rule 21(2) echoes what is already found in Section 9A(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 t .....

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sel for the revenue were right, despite the fact that such differential cannot be 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 .....

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the final duty, the importer becomes liable to pay ₹ 100/- PMT. The said example 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 i .....

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between material injury to the domestic industry and retrospective levy of duty in 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 .....

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on all these counts, the arguments of revenue cannot be countenanced. 47. It remains 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 th .....

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he WTO Agreement, something which the Central Government itself states in its internet 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 .....

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