ANDHRA PETROCHEMICALS LIMITED Vs. UNION OF INDIA

JUDGEMENT

(1.) The Customs Tariff Act, 1975 (for brevity, 'the Act of 1975') was enacted by the Parliament to consolidate and amend the law relating to Customs Duties. Section 9 thereof deals with countervailing duty on subsidized articles. Section 9A of the Act of 1975 deals with anti-dumping duty on dumped articles. Sub-Section (1) thereof states that where any article is exported by an exporter or producer from any country or territory to India at less than its normal value, then, upon the importation of such article into India, the Central Government may, by notification in the Official Gazette, impose an anti-dumping duty not exceeding the margin of dumping in relation to such article. Clause (a) in the Explanation to this sub-section states that for the purposes of Section 9A 'margin of dumping', in relation to an article, means the difference between its export price and its normal value. 'Export Price' is defined under Clause (b) of the Explanation and 'normal value' is defined under Clause (c) thereof. Generally, normal value in relation to an article, as defined in Clause (c) means the comparable price, in the ordinary course of trade, for a like article when destined for consumption in the exporting country or territory. When there are no sales of the like article in the ordinary course of trade in the domestic market of the exporting country, or when such sales do not permit a proper comparison because of the market situation or low volume of sales in such domestic market, the normal value is either the comparable representative price of the like article when exported from the exporting country to an appropriate third country or the cost of production of the said article in the country of origin along with reasonable addition for administrative, selling and general costs, and profit. Section 9A(3) empowers the Central Government, if it is of the opinion that there is a history of dumping in respect of the dumped article under inquiry which causes injury or that the importer was or should have been aware that the exporter practices dumping and that such dumping would cause injury and 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 the imported article dumped and other circumstances is likely to seriously undermine the remedial effect of the anti-dumping duty liable to be levied, to levy anti-dumping duty retrospectively by way of a notification in the Official Gazette from a date prior to the date of imposition of the anti-dumping duty but not beyond ninety days earlier than the date of notification. Sub-section (6) provides that the margin of dumping 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 Section 9A and such rules may provide for the manner in which articles liable for any anti-dumping duty may be identified, and the manner in which the export price, the normal value and the margin of dumping in relation to such articles may be determined apart from assessment and collection of such anti-dumping duty. Section 9B stipulates certain cases in which no levy under Section 9 or Section 9A can be made. Sub-section (2) thereof empowers the Central Government to make rules for the purposes of Section 9B which provide for the manner in which an investigation is to be made, the factors to which regard should be had in any such investigation and for all matters connected with such investigation. Broadly, Section 9B provides that no article shall be subjected to both countervailing duty and anti-dumping duty to compensate for the same situation of dumping or export subsidization.

(2.) The Customs Tariff (Identification, Assessment and Collection of Anti-dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995 (for brevity, 'the Rules of 1995') were framed by the Central Government in exercise of power under Sections 9A, 9B and 9B(2) of the Act of 1975. The Rules of 1995 came into force on 01.01.1995 and superseded the earlier Rules of 1985. Rule 2 deals with definitions of various terms and phrases used in the said rules. Rule 3 deals with appointment of the designated authority and states that the Central Government may appoint a person not below the rank of a Joint Secretary to the Government of India or such other person as it may think fit as the designated authority for the purposes of the rules. Rule 4 sets out the duties of the designated authority:

(3.) Rule 6 details the principles governing investigations. Under Rule 6(1) the designated authority shall, after it has decided to initiate an investigation to determine the existence, degree of effect of any alleged dumping of any article, issue a public notice notifying its decision, containing adequate information on various parameters mentioned in clauses (i) to (vi) thereunder. Rule 7 deals with confidential information provided to the designated authority. Rule 8 requires the designated authority to satisfy itself as to the accuracy of information supplied, upon which its findings are based. Rule 9 entitles the designated authority to carry out investigation in the territories of other countries, if the circumstances of the case warrant. Rule 10 deals with determination of normal value, export price and margin of dumping and provides that 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 the Rules. Rule 11 mandates that the designated authority shall determine the injury to the domestic industry, threat of injury to the domestic industry, material retardation to establishment of domestic industry and a causal link between dumped imports and injury, taking into account all relevant facts. In exceptional cases, the designated authority is also empowered to give a finding as to the existence of injury even where a substantial portion of the domestic industry is injured, if there is a concentration of dumped imports into an isolated market and such dumped articles are causing injury to the producers of all or almost all of the production within such market. Rule 12 requires the designated authority to proceed expeditiously with the conduct of the investigation and 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. On the strength of such preliminary findings, the Central Government is empowered under Rule 13 to levy provisional duty. Rule 14 deals with situations where the designated authority is entitled to terminate an investigation. This Rule reads as under: