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TMI Blog2007 (10) TMI 62X X X X Extracts X X X X X X X X Extracts X X X X ..... teel, which has been disputed by the intervenor. 3. India has effectuated measures to protect the domestic industry following the principles laid down in the General Agreement on Tariffs and Trade, 1994 (GATT for brevity) whereby the member countries agreed on certain principles to be followed for imposition of anti-dumping duties, countervailing duties and safeguard measures. Member countries of the World Trade Organisation were party to this agreement. The legislature effected statutory amendments to the Customs Tariff Act, 1973 which were effectuated with effect from 1st January, 1995 to bring the statute in line with the provisions of Article 6 of GATT, 1994. Dumping, in simple language, takes place when an exporter sells a product to India at a price less than the price prevailing in its domestic market. Though dumping per se has been held not to be condemnable. However, if such dumping causes or threats to cause material injury to the domestic industry of India, the statute has prescribed certain measures to be taken. There is no dispute that the Designated Authority has been duly nominated by the Central Government in compliance with the requirements of the statute. 4. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ral Board of Excise and Customs to arrange for details of imports of the subject goods from the subject countries/territory. 8. In compliance of the statutory rules, it appears that the authority also provided copies of the petition to the known exporters and embassies of the subject countries/territory. A questionnaire to elicit relevant information was sent to several exporters under the subject countries in accordance with Rule 6(iv). The delegations of the European Union; embassies of the subject countries in India were informed in accordance with rules 6(ii) with the request to advise the exporters/producers of their countries/territories to respond to the questionnaire within a prescribed time. The authority also appears to have sent copies of the letters, non-confidential petition and questionnaire to all these persons with specific individual request. 9. So far as the exporters were concerned, the authority sent a questionnaire calling for necessary information in accordance with rule 6(4) to several known exporters. 10. There is no dispute that the authority made available to all concerned, the non-confidential version of the evidence presented by various interested per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in India consequent upon the import of said article from the specified countries. The Designated Authority is also empowered to recommend the amount of anti dumping duty equal to the margin of dumping or less which, if levied, would remove the injury to the domestic industry and the date of its commencement. Rule 5 lays down the procedure which the Designated Authority is required to follow which requires a determination as to whether the application has been made to it or on behalf of the domestic industry and examination of the accuracy and adequacy of the evidence provided in the application. The application contains a deeming provision that the application shall be deemed to have been made by or on behalf of the domestic industry if it is supported by those domestic producers whose collective output constitutes more than 50% of the total production of the like article produced by that portion of the domestic industry. 14. The principles governing the investigation have been provided in rule 6 which reads thus :- '6. Principles governing investigations.- (1) The Designated Authority shall, after it has decided to initiate investigation to determine the existence, degree and e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ested party or its representative to present the information relevant to the investigation orally but such oral information shall be taken into consideration by the Designated Authority only when it is subsequently reproduced in writing. (7) The Designated Authority shall make available the evidence presented to it by one interested party to the other interested parties, participating in the investigation. (8) In a case where an interested party refused access to, or otherwise does not provide necessary information within a reasonable period, or significantly impedes the investigation, the Designated Authority may record its findings on the basis of the facts available to it and make such recommendations to the Central Government as it deems fit under such circumstances.' 15. The rules envisage participation of interested persons or their representatives in the investigations who are permitted to place not only oral information but all documentary information for the consideration of the Designated Authority. The evidence presented by one interested party is required to be made available to the other interested party under rule 6(7). 16. Sub rule 2 of rule 7 enables the Designa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... weeping powers have been conferred on the Designated Authority to arrive at a fair result based on the assessment of the accuracy of the supplied information. It is empowered to carry out investigation in the territory of other specified countries. Rule 10 requires the authority to arrive at a considered view of the normal value export price and margin of dumping. Rule 11 requires the Designated Authority to arrive at a determination of the material injury thereof to any established industry in India. 20. In order to determine the injury to domestic industry thereof the Designated Authority is required to ascertain the existence of a causal link between the dumped imports and effect, if any, on the price in the domestic market for like articles and the consequential effect of such imports on domestic producers of such articles in accordance with the principles set out in the annexures to the rules. Rule 12 enables the Designated Authority in an appropriate case to record preliminary findings with regard to the export price the normal value and the margin of dumping and in respect of imports from specific countries to record a further finding regarding injury to the domestic indust ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... awal of the notification no. 31/1999; calculation of landed price based on the minimum floor price for import of the product; statement giving break up of imports of products concerned from the non subject countries for 1998-99, 1999-2000 and 2001-02 and a note on the causal link between the dumped imports and injury to the domestic industry. 24. Noteworthy is the statement made on behalf of the petitioner in para 5 of this letter dated 18th of June, 2002 wherein it was stated thus :- "5. We would like to state that in the subject petition, United Kingdom and Netherlands are among the subject countries covered for investigation. Since these two countries are part of the European Union, as per the practice followed by the DGAD, the investigation may include European Union as a whole i.e. all countries, which fail under the ambit of European Union." Having so stated and having called upon the Designated Authority to include the European Union as a whole, that is all countries who fall within its ambit, it is certainly not open to the petitioner to object to the respondents having included the entire European Union in its considerations and deliberations. No objection appears to ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s on prices in the domestic market for the like article and (b) the consequent impact of these imports on domestic producers of such products. (ii) While examining the volume of dumped imports, the said authority shall consider whether there has been a significant increase in the dumped imports, either in absolute terms or relative to production or consumption in India. With regard to the effect of the dumped imports, on prices as referred to in sub-rule (2) of rule 18 the Designated Authority shall consider whether there has been a significant price under cutting by the dumped imports as compared with the price of like product in India, or whether the effect of such imports is otherwise to depress prices to a significant degree or prevent price increase which otherwise would have occurred, to a significant degree. 27. Clause (iii) of Annexure II further provides that in a case where imports of a product from more than one country are being simultaneously subjected to anti dumping investigation the Designated Authority will cumulatively assess the effect of such imports only when it determines that the margin of dumping established in relation to the imports from each country is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nted to dumping; the findings of the authority as to whether the imports from these countries made the volume requirement under the rules and whether the imports amounted to dumping of the articles, cannot be faulted on any legally tenable grounds. 31. The submissions of the petitioner fail to consider that even if there maybe dumping of like articles, it cannot mandatorily be subject to enquiry and investigation by the Designated Authority. Such anti dumping investigation can be commenced only if the dumped imports meet the prescribed percentage and cause injury under the rules. 32. At this stage it is noteworthy that the Designated Authority has not excluded the de minimis volume of imports from the subject countries from its computation of the total volume of imports as evidenced from the tabulation set out in the notification. There is substance in the contention of the respondent no. 1 that there is a typing error in noting the total volume of imports at 136850 metric tonnes whereas the same actually read 150542 metric tonnes. This is manifested by the tabulation of the Authority. 33. So far as the price effect of the imports is concerned, the Designated Authority has consi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the domestic market. Such imports, therefore, obviously had no impact on the domestic demand and prices. However, it is evident that duty free imports which were occupying a share of the input market of the country could negatively impact of the sales of the domestic industry. There is thus force in the submission on behalf of the respondents that injury, if any, to the domestic industry was required to be examined taking into account the landed value of the subject goods after including the custom duties and that such domestic prices were effected by the level of protection given by way of custom duties. 37. Ms. Meenakshi Arora, learned counsel appearing for intervenor submits that this respondent had pointed out during the investigations itself that the products under consideration which had been complained of by the petitioner and selected by the Designated Authority were not a homogeneous class. The petitioners had clubbed hot rolled coils silicon grade, sheets, plates and strips and boiler quality plate on the grounds that they were produced by the domestic industry in India or that they had been clubbed together as the production process for these items was the same ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. 41. The petitioners have made a grievance with regard to the submissions made on behalf of the respondents that even if the imports of Germany were left out of consideration still it would have no impact on the findings of the Designated Authority. In the light of the detailed reasoning given by the Designated Authority and the letter dated 18th June, 2002 addressed by the petitioner, this objection is wholly devoid of any merit. I find that the submission of the respondents are based on material already placed before the Designated Authority. 42. On a detailed consideration of the value of the dumped imports from the different countries and their volume, the Designated Authority has concluded that there was no price effect on the price of the articles in this country from which it could be concluded that there was no material injury to the value of the goods or threat of injury or retardation in the development of the domestic industry. 43. Mr. K. Venugopal learned counsel appearing for the petitioners has urged at length that the enquiry having commenced and the Designated Authority having considered the imposition of a price undertaking had clearly indicated a finding of d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... el as well as for second and defective items of steel to provide a shield for the domestic industry against dumping of products in the domestic market by foreign suppliers and international competition. 49. M/s Essar Steel Limited had apparently made an application for levy of anti-dumping duty of hot rolled coils, steel coils, strips, sheets and plates originating and exported from South Africa, Japan, Saudi Arabia, China and Australia on the ground of their resulting in injury to the domestic industry. This petition was disposed of by an order dated 8th February, 1999 by the Designated Authority holding that the petition had been examined and it was not possible to initiate anti dumping proceedings since the floor price was in operation on the merits of the subject goods. 50. After the disposal of this petition, another application seeking initiation of anti dumping investigation was filed by the Steel Authority of India Limited on 6th January, 1999. This inquiry was terminated on 10th July, 2000 by the Designated Authority pointing out that the applicants had failed to provide data on all India basis to assess volume of total imports from the subject countries and also f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to remove the protection provided by fixation of the floor price, the decision of the Government was assailed before the High Court of Calcutta and the manufacturers were fully protected by the interim orders. 55. The petitioners have approached the Designated Authority in April 2002 under the Customs Tariff Act, 1975 for investigation into their allegations of dumping. Such complaint was disposed of by the order dated 27th August, 2003 passed by the Designated Authority who upon investigation found that there was no case of injury to the domestic industries. 56. In this background the Division Bench of the High Court of Calcutta held that so far as the petitioners before it were concerned, their basic prayer relating to non-disposal of their request for investigation into dumping activities also stood disposed of. The court extensively noticed the conclusions drawn by the Designated Authority in the order dated 27th August, 2003 wherein the authority had held that the present petitioners had not been able to provide sufficient evidence of injury to the domestic industry from the imports of the subject goods to justify continuation of the enquiry. 57. The Division Bench also not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Section 9A(5) the petitioners would have had a right to anti dumping duties for a period of five years from the date of imposition of the duties subject only to an interim review by the Designated Authority. It has been pointed out that the writ petition was filed on 27th November, 2004 before the expiry of the period of 18 months for investigation and that the respondents have delayed adjudication. My attention has been drawn to the decision of the Apex Court reported at 1975 4 SCC 568 (para 6) Director, Income Tax Vs. Puran Mal; 1980 1 SCC 370 (para 13) Commissioner of Income Tax Vs. National Taj Traders and 1995 1 SCC 642 (paras 19 and 20) Bombay Metropolitan Region Development Authority Vs. Gokak Patel Volkart Ltd. and Ors. 62. I find that the principles in this behalf were authoritatively laid down by the Apex Court in 1975 4 SCC 568 Director of Income Tax (Investigation) Vs. Puranmal. A similar question had arisen before the Apex Court with regard to an order made by the authority under Section 132(5) of the Income Tax and wherein also appeals stands prescribed. A similar objection that the period statutorily prescribed being over no order directing the authority to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the matter afresh after giving the aggrieved party a reasonable opportunity of putting forward its case. Otherwise, it would mean that where a court quashes an order because the principles of natural justice have not been complied with it should not while passing that order permit the Tribunal or the authority to deal with it again irrespective of the merits of the case. A Division Bench of the Punjab High Court in C.I.T. Vs. Ramesh Chander took the view that what the notified authority could do under Section 132(12) a court could do in writ proceedings. Though the observation was obiter we consider that it is correct." 63. The principles laid down by the Apex Court in this judgment were reiterated by the Apex Court in the subsequent pronouncement in Commissioner of Income Tax Vs. National Taj Traders and BMRDA Vs. Gokak Patel Volkart Ltd. and Ors. In the Bombay Metropolitan Region Development Authority Vs. Gokak Patel Volkart Ltd. and Ors. reported at (1995) 1 SCC 642 placing reliance on the pronouncement in Puranmal (supra) the court laid down the principles succinctly thus :- "19. It is well settled that when the statute lays down the period of limitation for passin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... persons before the Designated Authority. Furthermore on a consideration of the matter the Designated Authority had found that the applicable price of the subject product was higher than the price undertaking which had been suggested by the domestic industry and was being considered. In any case the prima facie view cannot be held to be a final view of the Designated Authority which would be based on a consideration of the entire material placed before it. 67. Ms. Meenakshi Arora learned counsel appearing for intervenor has placed reliance on the pronouncement of the Apex Court reported at 2005 (2) SCALE 395 Shenyang Mastsushita S. Battery Co. Ltd. Vs. M/s Exide Industries Ltd. and Ors. in support of this submission. Perusal of this judgment would show that the court was not concerned with consideration of any finding on this aspect of the matter. The observation has been made by the court having regard to the facts and circumstances of the case alone. 68. It has been vehemently urged at great length by learned counsel for the petitioners that the Designated Authority had gravely erred in not segregating data relating to imports which had not been dumped. As a result the com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... panies Act had come up for consideration in this pronouncement of the Apex Court. The Apex Court thus recognised the permissibility of the scrutiny by a court as to existence of some circumstances within limited parameters and not as to the sufficiency thereof. The court noticed that the subject matter of a legislation has an important bearing on the interpretation of a provision. It is well settled that when something is to be done which is within the discretion of the authorities, then that something is to be done according to the rules of reason and justice and not according to private opinion. Discretion necessarily implies good faith in discharging a public duty. There is always a perception within which a statute is intended to operate. It is to be done according to law and is to be legal and regular and not arbitrary, vague or fanciful. The power is to be exercised by the authority in good faith. As was held by Lord Denning M.R. in Associated Provincial Pictures Houses Ltd. Vs. Wednesbury Corporation (1948) 1 KB 223 CA 'that a person entrusted with the discretion must direct himself properly in law. He must call his own attention to the matters which he is bound to con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt in 1970 (1) SCC 764 Messers. Mahabir Prasad Santosh Kumar Vs. State of U.P. and Ors.; AIR 1990 SC 1984 S. N. Mukherjee Vs. UOI. These judgments recognised the duty cast on all quasi judicial and administrative authorities to give reasons for their decisions. The submission is that the Designated Authority failed to record reasons for its findings. 78. So far as the pronouncement of the Apex Court in S.N. Mukherjee Vs. UOI AIR 1990 SC 1984 is concerned, the issue before the court was the requirement of recording reasons in findings and sentence of the court martial and an order passed by the confirming authority which is concerned with confirmation of the finding and sentence. The court extensively considered the principles which would govern exercise of a particular power by an administrative authority including exercise of judicial or quasi judicial functions. In this behalf the Apex Court had observed thus :- "35. ......In our opinion, therefore, the requirement that reasons be recorded should govern the decisions of an administrative authority exercising quasi-judicial functions irrespective of the fact whether the decision is subject to appeal, revision or judicial r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the dispute to its solution. Satisfactory decision of a disputed claim may be reached only if it be supported by the most cogent reasons that appeal to the authority. Recording of reasons in support of a decision on a disputed claim by a quasi-judicial authority ensures that the decision is reached according to law and is not the result of caprice, whim or fancy or reached on grounds of policy or expediency. A party to the dispute is ordinarily entitled to know the grounds on which the authority has rejected his claim. If the order is subject to appeal, the necessity to record reasons is greater, for without recorded reasons the appellate authority has no material on which it may determine whether the facts were properly ascertained, the relevant law was correctly applied and the decision was just." 80. In the instant case the order dated 27th August, 2003 passed by the Designated Authority is a considered and reasoned decision which give reasons for its findings. In the light of the principles laid down by the Apex Court in the afore-noticed judicial pronouncements, it certainly cannot be held that the same does not meet the requirements of law so far as giving of reasons i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of July 2003. No prejudice could possibly have been suffered by the petitioners merely because such data furnished by them was not kept in the public file. No other person has objected to the same. 83. The petitioners have repeatedly complained that the Designated Authority violated principles of natural justice for the reason that it did not disclose the information relating to sales realisation and other information of the petitioners to the petitioners themselves. As noticed herein the Designated Authority made available information which was in the public domain in the public file. The petitioners were well aware of all information which have been furnished by them to the Designated Authority. Furthermore the Designated Authority has relied upon the floor price which had been fixed by the respondent no. 1 which had continued to bind all parties by virtue of the interim orders passed by the High Court of Judicature at Calcutta in the earlier writ petition filed by the petitioners. For this reason the objection taken by the petitioners is misconceived. 84. I find that the Designated Authority has repeatedly noticed that the petitioner has clubbed several items and products with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tioners, that is the Steel Authority of India Limited and M/s Essar Steel India Limited, there are other major producers of steel namely the Tata Iron and Steel Company; Jindal Vijaynagar Steel Limited; the Ispat Industries Limited and the Lloyds Steel Limited. According to the intervenor additionally, there are 20 secondary producers of steel in the relevant year 2001-02 who produced 0.676 million tonnes of steel as per the data published by the Joint Plant Committee constituted by the Ministry of Steel. Against the total production of steel in the country of 36.18 million tonnes in the year 2003-04, the petitioner no. 2 is stated to have produced only 8.57 million tonnes equivalent to approximately 24% of the total steel manufactured. 88. So far as the losses which have been claimed by the petitioners are concerned, the respondents vehemently contended that the same were incurred due to mis-utilisation and diversion of funds resulting in sharp escalation of their project cost and heavy burden of interest charges, higher consumption of energy and other inputs vis a vis global standards and unhealthy competition between the domestic HR coil producers. 89. The respondents have com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Coils, sheets, galvanized sheets, tin plates and pipes in India as well as abroad varied primarily because of lack of demand. However the domestic prices of HR coils have since sharply escalated by over 100% from Rs.12000/- per tonne in March, 2002 to Rs.26,000/- per tonne in March, 2004, ex steel plant, excluding custom and other taxes. As on the date of filing its counter affidavit on 24th May, 2004, the respondent no.2 has pointed out that the current prices of the domestic producers were also higher by around Rs.4500/- per tonne vis a vis the global price of USD 410 (approximately Rs.22,000/-) per tonne FOB. It is noteworthy that these figures do not relate to the period of investigation. 92. It has further pointed out that there was no injury to the domestic producers from the imports of HR coils for the reason that the domestic producers were protected by the custom duty of 25% and an additional SAD at the rate of 4%; that bulk of the imports of HR coils were under the 'advance license scheme' for export production and thus had no impact on the domestic demand and prices; and that hot rolled steel coil producers in India were protected during the period of investigati ..... X X X X Extracts X X X X X X X X Extracts X X X X
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