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2016 (10) TMI 380 - SUPREME COURT

2016 (10) TMI 380 - SUPREME COURT - TMI - Levy of Anti dumping duty - Interpretation of rule 7 - confidentiality of information - Whether the interpretation placed upon Rule 7 of the Rules is correct insofar as it diminishes the rule of confidentiality statutorily provided for under Rule 7? - the decision in the case of Reliance Industries Ltd. v. Designated Authority & Others [2006 (9) TMI 180 - SUPREME COURT OF INDIA] referred to - Held that: - Reliance Industries case did not go into the deta .....

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case of the concerned parties, the DA must not disclose the information which are already held by him to be confidential by duly accepting such a claim of any of the parties providing the information. While taking precautions not to disclose the sensitive confidential informations, the DA can, by adopting a sensible approach indicate reasons on major issues so that parties may in general terms have the knowledge as to why their case or objection has not been accepted in preference to a rival cl .....

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ential information if it is of the view that the information is really not confidential and still the concerned party does not agree to its being made public. In such a situation the information cannot be made public but has to be simply ignored and treated as non est. - Petition disposed off. - Civil Appeal No. 1679/2010 and 3498-3500 of 2004 with SLP(C) No. 14099/2015 SLP(C) No. 14524/2015 - Dated:- 7-10-2016 - J. CHELAMESWAR, SHIVA KIRTI SINGH AND ABHAY MANOHAR SAPRE JJ. Mr. Arvind Kumar .....

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ial leave petition against a judgment of the Delhi High Court, the Division Bench on January 27, 2009 in the case of Designated Authority, Ministry of Commerce and Industry & Anr. v. Indian Metals & Ferro Alloys Limited (2009) 2 SCC 510 noticed that in the context of interpretation of anti-dumping provisions of the Customs Tariff Act, 1975 (in short the Act ) and the Customs Tariff (Identification, Assessment and Collection of Anti-Dumping Duty on Dumped Articles and for Determination of .....

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ivision Bench recorded its views that Reliance Industries case needed a fresh look and two questions needed to be dealt with by a larger Bench. Since the first question, as per submissions of all the parties is no longer relevant on account of subsequent amendment of the Act, we take note of only the other relevant question requiring answer by this Bench. The question reads thus: Whether the interpretation placed upon Rule 7 of the Rules is correct insofar as it diminishes the rule of confidenti .....

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of the Rules as flowing from the case of Reliance Industries Ltd. (supra). Mr. Yashank Adhyaru, learned senior advocate appearing for the appellants in Civil Appeal No. 1679 of 2010 has argued that appeal as the lead matter. According to him the view taken in the Reliance Industries case whittles down the effect of Rule 7 and unless we re-state the law differently, the Designated Authority (hereinafter referred to as the DA ) will be forced to disclose materials which are otherwise protected by .....

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ndia. (1990) 4 SCC 594 4. To the contrary, as we shall notice hereinafter, a stand has been taken by the counsels appearing for the parties who have made complaints of dumping, that Rule 7 has been correctly understood and interpreted in Sterlite Industries Ltd. (supra) casting duty upon the DA to examine and decide on case to case basis whether information supplied is required to be kept confidential or not. The whole of the paragraph 3 of that judgment has been highlighted to submit that it is .....

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particularly sub-section (2) of Section 9B of the Act. Section 9A clarifies as to when an article exported from any country or territory to India at less than its normal value may be subjected to an anti-dumping duty not exceeding the margin of dumping in relation to such article. By the aid of explanation, margin of dumping has been clarified as the difference between the export price and the normal value of an article. The meaning of export price and normal value require some factual investiga .....

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the assessment and collection of such anti-dumping duty. Section 9B (1) states the circumstances and situation when an article shall not be subjected to countervailing duty or anti-dumping duty under Sections 9 and 9A. However, sub-section (2) of Section 9B empowers the Central Government to frame the rules under which an investigation may be made for the purpose of Section 9B to meet exceptional situation contemplated by Section 9B(1)(b)(ii). 6. The Central Government framed and notified the r .....

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I of GATT 1994 and pursuant to investigation in accordance with the provisions of the Agreement. Let us take a bird s eye-view of its relevant Articles. Article 5 of the Agreement contains provisions for initiation of investigation and its completion in respect of an alleged dumping. The initiation has to be generally upon a written application by or on behalf of the domestic industry. In special circumstances the DA may initiate an investigation even without a written application provided it ha .....

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rties shall have a full opportunity for the defence of their interests. To this end, the authorities shall, on request, provide opportunities for all interested parties to meet those parties with adverse interests, so that opposing views may be presented and rebuttal arguments offered. Provision of such opportunities must take account of the need to preserve confidentiality and of the convenience to the parties. There shall be no obligation on any party to attend a meeting, and failure to do so .....

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he basis of this information. 6.5 Any information which is by nature confidential (for example, because its disclosure would be of significant competitive advantage to a competitor or because its disclosure would have a significantly adverse effect upon a person supplying the information or upon a person from whom that person acquired the information), or which is provided on a confidential basis by parties to an investigation shall, upon good cause shown, be treated as such by the authorities. .....

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onal circumstances, a statement of the reasons why summarization is not possible must be provided. 6.5.2 If the authorities find that a request for confidentiality is not warranted and if the supplier of the information is either unwilling to make the information public or to authorize its disclosure in generalized or summary form, the authorities may disregard such information unless it can be demonstrated to their satisfaction from appropriate sources that the information is correct. 6.6 XXXXX .....

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vant Rules also. Rule 2 embodies definition of various terms such as domestic industry , interested party etc. Rules 3 and 4 relate to appointment of Designated Authority and its duties. Rule 5 relates to initiation of investigation. Usually it is done upon a written application by or on behalf of the domestic industry but in certain circumstances it may be initiated suo motu by the DA on being satisfied from the information received from the Collector of Customs as to the existence of certain c .....

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and other interested parties. Copy of the application alleging dumping is also to be made available to all concerned as noted above. The DA has power to issue a notice calling for any information in the specified form from the exporters, foreign producers and other interested parties within a time bound schedule. The DA is required to provide opportunity of furnishing relevant information even to the industrial users of the article under investigation and to representative consumer organizations .....

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rovided to the designated authority on a confidential basis by any party in the course of investigation, shall, upon the designated authority being satisfied as to its confidentiality, be treated as such by it and no such information shall be disclosed to any other party without specific authorization of the party providing such information. 2. The designated authority may require the parties providing information on confidential basis to furnish non-confidential summary thereof and if, in the o .....

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m, it may disregard such information. 8. Only to complete the bird s eye view of the Rules, it may be noted that as per Rule 8 the DA has to satisfy itself as to the accuracy of the information supplied by the interested parties if findings are based upon such information. Rule 12 contains details as to how preliminary findings are to be arrived at and a public notice to be issued of such preliminary findings. Provisional duty may be levied on the basis of preliminary findings, by the Central Go .....

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l findings, as the case may be, demonstrate that the findings of the DA recorded after investigation are of immense significance though they look recommendatory in nature. Therefore, the investigation is required to be carried on in a fair manner by issuance of public notice at relevant stages and after informing all interested parties so that they may also have their say. The Central Government appears to have a discretion in the matter of determining the quantum of provisional duty as well as .....

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of confidentiality is restricted to the party who has supplied the information, and that party has also to satisfy the DA that the matter is really confidential. Nowhere in the rule has it been provided that the DA has the right to claim confidentiality, particularly regarding information which pertains to the party which has supplied the same. In the present case, the DA failed to provide the detailed costing information to the appellant on the basis of which it computed NIP, even though the ap .....

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formation. The use of the term any party in the opening sentence of Rule 7(1) in place of the expression interested party , according to learned counsel, indicates that the DA may receive in course of his suo motu action certain confidential informations and in such a situation if he is satisfied that the confidentiality of such information needs to be protected and should not be disclosed to any other party without specific authorisation, the DA may be justified in his action whereby he himself .....

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y or Agreement and a statute is made to enforce a treaty obligation, then in case of any difference between the language of such statute and a corresponding provision of the Treaty, the statutory language should be interpreted in the same sense as the language of the Treaty. In abstract the proposition is salutary and needs no caveat. Articles 6.2 and 6.5 have already been extracted earlier. In essence, Rules 6 and 7 of the Rules ensure the obligations flowing from Articles 6.2, 6.4 and 6.5. Whi .....

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nfidentiality claimed. No doubt the opening clause of Article 6.5 covers any information which is by nature confidential but the examples indicated therein clearly reveal that such information is required to be kept confidential because if revealed it would give significant advantage to a competitor or would have significant adverse effect upon the person supplying the information or his resource person from whom he acquired the information. The submission that DA is entitled to presume such eff .....

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Rule 7 and to claim as well as accept on information to be confidential. 12. The other reason is provision of appeal under Section 9C of the Act. The appeal provided is against the order of determination or review thereof regarding the existence, degree and effect of any subsidy or dumping in relation to import of any article. It is one thing to use confidential information for the purpose of investigation on account of statutory provisions and not communicating the same. It is quite another, n .....

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easons for an administrative decision/order affecting rights and interests of parties but certainly reasons must exist in the records so as to justify the reasonableness and fairness of the decision if it has adverse effects upon any party. Any court or tribunal exercising judicial review is entitled to call for the records to satisfy itself as to the existence of reasons in appropriate cases involving a challenge to such order. In case the DA is conceded power to gather informations from source .....

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the reasons as to why it is not possible should be supplied for scrutiny. The reasons of confidentiality must be discernible on scrutiny of records by the appellate authority because of mandate of Rule 7(3) that if the claim of confidentiality is not worthy of acceptance, or the supplier of the information is unwilling to make the information public without any good reasons, the DA has to disregard such information. 13. The aforesaid discussion leads to the conclusion that even the relevant pro .....

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tailed discussion of Rule 7. On the basis of para 23 of the judgment it was shown that the two main issues falling for determination were - (1) the correct principles for determination of Non Injurious Price (NIP) of PTA, and (2) the scope of Rule 7 of the Rules. Referring to para 37 of the judgment, he pointed out that the Court had directed for revising NIP by taking the market price of electricity and the actual capacity utilisation during the period of investigation. Since the DA in that cas .....

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out its finding on the data supplied by the appellant itself. In our opinion, there was nothing confidential in the matter, and hence reasons for not accepting the appellant s version should have been stated in the order of the DA. Para 43 has already been extracted earlier. 15. Looking at the contents of Rule 7 and the facts and issues involved in Reliance Industries case, we agree with the submissions of Mr. Patil that fact situation in that case was entirely different and the Court was not ex .....

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ormulated by the court for resolving an issue arising for determination and not in what may logically appear to flow from observations on non issues. Reference in this regard may be made to law enunciated on this point by a Constitution Bench, in paragraph 20 of the judgment in the case of Krishena Kumar v. Union of India & Ors. (1990) 4 SCC 207 In the given facts, the observations in paragraph 43 in the case of Reliance Industries are fully justified and do not require any review. We are in .....

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us to go into the merits of this matter as we propose to send the matter back to CEGAT after laying down certain guidelines. From what has been argued before us, it appears that in pursuance of Rule 7 of the Customs Tariff (Identification, Assessment and Collection of Anti-Dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995, the Designated Authority is treating all material submitted to it as confidential merely on a party asking that it be treated confidential. In our v .....

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Rule 7(3) the Designated Authority can come to the conclusion that confidentiality is not warranted and it may, in certain cases, disregard that information. It must be remembered that not making relevant material available to the other side affects the other side as they get handicapped in filing an effective appeal. Therefore, confidentiality under Rule 7 is not something which must be automatically assumed. Of course in such cases there is need for confidentiality as otherwise trade competito .....

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raph as regards the ill-effect of being too liberal in accepting claims of confidentiality has been echoed in the same vein in paragraph 45 of the Reliance Industries case in following words: 45. In our opinion, excessive and unwarranted claim of confidentiality defeats the right to appeal. In the absence of knowledge of the consequences, grounds, reasoning and methodology by which the DA has arrived at its decision and made its recommendation, the parties to the proceedings cannot effectively e .....

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d from China PR, Taiwan and Republic of Korea during the period of investigation, calendar year 2012. According to him SanDisk duly participated in the investigation, filed objections, comments and submissions and co-operated at every stage of the investigation. His main grievance is that when the reliability of import volume provided by Moser Baer came under question, the DA claimed to have used transaction-wise import data provided by Directorate General of Commercial Intelligence and Statisti .....

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tigation. The DA disregarded the past practice of disclosing such details, especially when SanDisk was prepared for deletion of names of exporters and importers from the import data obtained by the DA. 19. Mr. V. Lakshmikumaran has in his written notes given two instances, one of 2007 and another of 2014 where the DA had disclosed the DGCI&S import data to exporters and importers and had called for comments. According to him DGCI&S had not claimed confidentiality in such matters for good .....

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claim is found acceptable after due scrutiny. 20. Since we are not entering into arena of facts for deciding individual cases, it is not relevant to go deeper into the facts highlighted on behalf of M/s SanDisk International Limited. However, the submission that data available with DGCI&S is available to the public and also under the RTI Act has not been rebutted in reply. 21. Mr. V. Lakshmikumaran has referred to and relied upon judgment of this Court in Designated Authority (Anti-Dumping D .....

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vestigation. The Court held that in the course of investigation the principles of natural justice would have limited application only to the extent indicated in the statute, because elaborate provisions for the same are already provided for. In our view this judgment helps the respondents only to a limited extent that general principles of natural justice need not be imported to govern each and every step during the investigation proceedings. 22. We are in respectful agreement with the above vie .....

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le. That does not appear to be the intention of the statute makers nor it is warranted by the context. The effect of Rule 7 is clear. It permits an exception to the principles of natural justice. In such a situation, even if there had been some ambiguity and requirement of resorting to interpretation, the proper course would be to adopt a construction which would least offend our sense of justice, as discussed and enunciated in the cases of Simms v. Registrar of Probates (1900) AC 323 , Madhav R .....

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unded in Inland Revenue Commissioner v. Rossminster Ltd. (1980) 1 All ER 80 . However, in our view, as already indicated, there are no ambiguities in Rule 7 to require departure from the rule of Literal Construction. 23. Mr. Lakshmikumaran also referred to judgment in the case of Reliance Industries to point out that main issue in that case was decided in favour of Reliance Industries in paragraphs 35, 36 & 37 holding that the Non-Injurious Price (NIP) had been determined wrongly and therefo .....

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s findings. In view of proceedings being quasi-judicial, the DA was rightly held duty bound to disclose its reasons for not accepting the version given by the appellant. Finally Mr. Lakshmikumaran submitted that the observations given by the Court in Reliance Industries case do not require any interference and the appeals filed on behalf of the Union of India and the DA should be dismissed. 24. Mr. Jitendra Singh, advocate, appearing for Meghmani Organics Ltd. in the lead case, reiterated the su .....

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e are of the considered view that the question referred for our answer can be answered in a very straight forward manner by holding that Reliance Industries case did not go into the details of the relevant Rules including Rule 7 but the observations made therein in respect of rule of confidentiality as spelt out in Rule 7 of the Rules does not diminish the scope of Rule 7 as provided. The reasons or findings cannot be equated with the information supplied by a party claiming confidentiality in r .....

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