TMI Blog2006 (9) TMI 180X X X X Extracts X X X X X X X X Extracts X X X X ..... Law is, therefore, a salutary measure which prevents destruction of our industries which were built up after independence under the guidance of our patriotic, modern minded leaders at that time and it is the task of everyone today to see to it that there is further rapid industrialization in our country, to make India a modern, powerful, highly industrialized nation. With the above observations this appeal stands disposed of. - 1294 of 2001 - - - Dated:- 11-9-2006 - Ashok Bhan and Markandey Katju, JJ. [Judgment per : Markandey Katju, J.]. - This Appeal has been filed against the impugned final order dated 29-11-2000 passed by the (CEGAT) Customs, Excise and Gold (Control) Appellate Tribunal, New Delhi. 2. We have heard learned counsel for the parties. 3. The appellant is a multi-product company and has various business activities including manufacture of Pure Terephatalic Acid (for short 'PTA'), which is used for the manufacture of polyester yarn (which in turn is used for manufacture of textiles). Apart from the manufacture of PTA, the appellant, inter alia, has a captive power plant from which it draws electricity. The appellant also draws electricity from the Grid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the domestic manufacturer. The appellants submitted that they had placed the cost of production data in respect of PTA manufactured by them but the designated authority incorrectly determined the non-injurious price at a lower amount and this led to the incorrect finding that there was no causal link between injury to domestic industry and imports from these countries. With regard to the determination of landed value their submission was that the landed value had been determined at an inflated amount and that was the reason for the incorrect determination that the landed value of imports was more than the non-injurious price. 7. Before dealing with the contention of the learned counsel for the parties, we may usefully refer to Section 9A of the Customs Tariff Act, 1975, which was inserted by the Customs Tariff (Second Amendment) Act, 1982. Section 9A was substituted by the Customs Tariff (Amendment) Act, 1995 with effect from 1-1-1995, and now it reads as follows :- "SECTION 9A. Anti-dumping duty on dumped articles. - (1) Where any article is exported from any country or territory (hereinafter in this section referred to as the exporting country or territory) to India at less ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntry of export or there is no comparable price in the country of export, the normal value shall be determined with reference to its price in the country of origin. (2) The Central Government may, pending the determination in accordance with the provisions of this section and the rules made thereunder of the normal value and the margin of dumping in relation to any article, impose on the importation of such article into India an anti-dumping duty on the basis of a provisional estimate of such value and margin and if such anti-dumping duty exceeds the margin as so determined :- (a) the Central Government shall, having regard to such determination 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 anti-dumping duty which has been collected as in excess of the anti-dumping duty as so reduced. (2A) Notwithstanding anything contained in sub-section (1) and sub-section (2), a notification issued under sub-section (1) or any anti-dumping duty imposed under sub-section (2), unless specifically made applicable in such notification or such imposition, as the case may be, shall not apply to article imported by a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er period not exceeding one year. (6) The margin of dumping as referred to in sub-section (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 identified, and for the manner in which the export price and the normal value of, and the margin of dumping in relation to, such articles may be determined and for the assessment and collection of such anti-dumping duty. (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, relating to non-levy, short levy, refunds and appeals shall, as far as may be, apply to the duty chargeable under this section as they apply in relation to duties leviable under the Act". 8. Sub-se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fits to the local customers on account of lower priced goods, but in the long run destroys the local industries and may have a drastic effect on prices in the long run. 14. To levy anti-dumping duty it is essential in terms of Rule 4 and Rule 17 of the Rules to establish : (i) Dumping, which is reflected by a ''Margin of Dumping" - which is undisputed in this case; (ii) "Injury" - which is also undisputed in this case; (iii) Causal Link between dumping and injury to the domestic industry to establish that injury to the domestic industry is caused by dumping. 15. The margin of dumping is the difference between the "Normal Value" (viz. price in the domestic market of the foreign exporter, or if there are no domestic sales, the price at which it is exported to another country or the constructed cost of production) and the "export price" at which goods are exported to India. If goods are exported to India at prices below the "Normal Value", there is a positive dumping margin. 16. On the determination of a positive margin, the DA has to ascertain whether the dumping of goods is causing injury to the domestic industry by analyzing various injury parameter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Injury) Rules, 1995, the DA is required on a complaint regarding dumping to carry out investigations and give his findings with regard to the existence of dumping, injury to the domestic industry and a causal link between the two. Having determined the existence of dumping, injury and causal link, the DA determines the quantum of duty. For this purpose, the DA calculates the NIP for the domestic industry as a whole for the product under consideration, which, as already stated above, is a notional fair selling price. 19. In this connection, we may refer to Rules 10 and 11 of the Anti-Dumping Rules which states as follows : "10. Determination of normal value, export price and margin of dumping. - An article shall be considered as being dumped if it is exported from a country or territory to India at a price less than its normal value and in such circumstances the designated authority shall determine the normal value, export price and the margin of dumping taking into account, inter alia, the principles laid down in Annexure I to these rules. 11. Determination of injury. - (1) In the case of imports from specified countries, the designated authority shall record a further fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ermination of the NIP of PTA; and (2) the scope 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. 24. As regards the first contention, learned counsel for the appellant, Mr. Joseph Vellapally, submitted that while computing the NIP of PTA, the DA ought to have taken the transfer price (market value) of electricity and other inputs captively produced by it. Learned counsel for the appellant submitted that it is not the actual cost of production of electricity by the appellant which has to be seen in this connection, but the market price of electricity which has to be seen. In other words, the cost of inputs has to be seen not for an individual industrial unit which captively produces it, but the market price of the inputs is to be seen in order to calculate the NIP. Learned counsel further submitted that the DA has not given any reasoning for coming to its conclusion for its NIP. The Disclosure Statement issued by the DA does not state as to what was the element of cost being disallowed and what was the reason for doing so. It is submitted that there was no requirement in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... puts and not their actual cost of captive production. This is because the entire investigation, analysis, recommendation and imposition are for the product under consideration for the whole domestic industry and not for the individual companies and inputs captively manufactured which may be involved in the production and sales of the goods. 29. The approach adopted by the DA, in our opinion, will lead to a situation where an artificial discrimination will be created between the integrated and non-integrated companies to the peril of the smaller plants with no backward integration (backward integration means a factory which also produces its own raw materials etc). In such situations, the result will be that the companies with no backward integration will suffer adversely. In our opinion, this was neither envisaged under the law nor can be considered as a desired result. The Antidumping legislation is meant for protection of the domestic industries as a whole against unfair practice of dumping, irrespective of whether they are backwardly integrated or not. 30. In our opinion there has to be a single NIP for a product as envisaged by the Rules, and not several NIPs for the same p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the domestic industry as a whole. 32. The purpose of imposition of duty is both to redress injury and to prevent material retardation of the establishment or growth of that industry [vide S. 9B(1)(b)(ii), Rules 11, 17(a)(ii) and Annexure II]. In the present case by fixing an NIP based upon specific advantages in the matter of electricity that the appellant-company processed, and permitting dumping of the PTA into India, the DA has ensured that no other company can set up PTA manufacturing facilities without also being in a position to generate its own electricity at a price less than the price of electricity generally available in the domestic market. This, in our opinion, is surely not tenable, as it will result in discrimination. 33. In our opinion the DA has clearly ignored the purpose for which the NIP is computed. The DA has failed to appreciate that once dumping and injury is established, the existence of an unfair trade practice by the exporters is undisputed and a restrictive view in computing an unduly low NIP would lead to granting a premium to the erring exporters at the cost of the domestic industry, which is suffering injury. 34 In our opinion, the DA's determin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he actual capacity utilization during the period of investigation. In our opinion, this has led to an unusual reduction in the fixed expenses per unit and a consequent reduction in the NIP. This again is clearly untenable. 36. In our opinion, the NIP needs to be revised by taking the market price of electricity and the actual capacity utilization during the period of investigation. Further, the DA should be directed not to misuse Rule 7, by keeping confidential its findings and that too from the person who has supplied the information to it. 37. We are of the opinion that the nature of the proceedings before the DA are quasi-judicial, and it is well-settled that a quasi-judicial decision, or even an administrative decision which has civil consequences, must be in accordance with the principles of natural justice, and hence reasons have to be disclosed by the authority in that decision vide S.N. Mukherjee v. Union of India, 1990 (4) SCC 594. 38. We do not agree with the Tribunal that the notification of the Central Government under Section 9A is a legislative Act. In our opinion, it is clearly quasi-judicial. The proceedings before the DA is to determine the lis between the do ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n is either unwilling to make the information public or to authorize its disclosure in a generalized or summary form, it may disregard such information". 42. In our opinion, Rule 7 does not contemplate any right in the DA to claim confidentiality. Rule 7 specifically provides that the right 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 the NIP, even though the appellant was the sole producer of the product under consideration, in the country. In our opinion this was clearly illegal, and not contemplated by Rule 7. 43. In this connection, this Court in Sterlite Industries (India) Ltd. v. Designated Authority, 2003 (158) E.L.T. 673 observed thus : "In our view, it is not necessary for us to go into the merits of this matter as we propose to send the matte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this judgment may not benefit the appellant for the past period, we have thought it necessary to lay down the law in this connection since the Anti-Dumping Law operates continuously and on a day-to-day basis and hence its principles have to be clarified. The Anti-dumping Law is extremely important for the country's industrial progress and hence there should be total transparency and fairness in its implementation. 46. Before parting with this case, we would like to state that our national aim must be to create India as a modern, highly industrialized, powerful state. The real world today is cruel and harsh. It respects power, not poverty or weakness, and power comes from a high level of industrialization. Hence, if we wish to get respect in the comity of nations, we must make India a modern, powerful, highly industrialized state. The truth is that today India is poor. As Rajni Palme Dutt wrote in his book 'India', 'India is a rich country with poor people'. We are rich in raw materials, rich in industrial skills, we have outstanding scientists, engineers, technicians and managers. Despite all this we are a poor nation. Hence, if we want to command respect in the comity of nations ..... X X X X Extracts X X X X X X X X Extracts X X X X
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