NITCO TILES LTD. Vs. DESIGNATED AUTHORITY

JUDGEMENT

(1.) FACTS : The appellant -importer has challenged the final findings dated 4 -2 -2003 by the Designated Authority and the impugned notification issued on 1 -5 -2003 under Section 9A(1) of the Customs Tariff Act imposing anti -dumping duty with effect from 2 -5 -2002 and has prayed for holding that the final anti -dumping duty shall have only prospective effect, seeking modification of the notification on that basis.

(2.) ON 6 -8 -2001, the designated authority initiated the investigation on the basis of the petition filed by M/s. SPL Ceramics Ltd., M/s. H and R Johnson India Ltd. and M/s. Murudeshwar Ceramics Ltd. The designated authority notified its preliminary findings by notification dated 3 -12 -2001 with regard to antidumping investigations concerning imports of vitrified/porcelain tiles originating in or exported from China PR and UAE. Public hearing was held on 2 -7 -2002 to hear the interested parties. The authority made the public file available to all interested parties containing non -confidential version of the evidence submitted by various interested parties for inspection upon their request. Disclosure of essential facts, as required by Rule 16 of the Customs Tariff (Identification, Assessment and Collection of Anti -dumping Duties on Dumped Articles and for Determination of Injury) Rules, 1995, was made on 17 -12 -2003. In its final findings, the authority concluded that, vitrified/porcelain tiles were exported to India from UAE and China PR below its normal value resulting in dumping, the Indian industry had suffered material injury, and that the injury had been caused cumulatively by the imports from the subject countries.

(3.) THE provisional duties were levied on 2 -5 -2002, and they were to be effective up to and inclusive of first day of November 2002. The contention raised on behalf of the appellant is that since the provisional duties expired on 1 -11 -2002, and there was no provisional duty in force from 2 -11 -2002, the final duty could not have been levied retrospectively by the notification issued on 1 -5 -2003 imposing such final duty. According to the appellant, it was undisputed that no provisional duties were ever levied for the period starting from 2 -11 -2002 till 30 -4 -2003. As the provisional duty was zero for the that interregnum period, Rule 21(1) would come into operation and the difference between the higher final duty and the lower or zero provisional duty could not be collected for such interregnum period. Since the notification dated 1 -5 -2003 levied anti -dumping duty with effect from the date of provisional duty, the applicability of anti -dumping duty during the "interregnum period" from 2 -11 -2002 to 30 -4 -2003, when there was no provisional duty, was not warranted. Arguments on behalf of the appellant: It has been contended by the learned Senior Advocate appearing for the appellant that on the basis of the existing law the appellant was entitled to clear the goods without any liability to pay anti -dumping duty for the interregnum period. It was submitted that the taxable event for levy of anti -dumping duty was the importation of the goods, and therefore, on importation between 2 -11 -2002 and 30 -4 -2003, on the basis of the law then prevailing, the importer was not liable to pay any anti -dumping duty. The notification dated 1 -5 -2003 issued subsequent to the import, seeks to impose a substantive and new liability or obligation on past transactions, and was, therefore, plainly retrospective. It was contended that Parliament did not confer any power on the delegatee, i.e. the Central Government to impose duties with retrospective effect in respect of such past transactions and therefore, the notification to the extent it operated retrospectively was ultra vires the provision of Section 9A(1) of the Customs Tariff Act, 1975. It was argued that there were no express words in Section 9A authorizing the Central Government to issue notification having retrospective effect, nor was there any indication of necessary implication to that effect. It was argued that in contrast Section 9A(3), by necessary implication, ruled out any other retrospective duty, and that the only retrospective duty that was intended to be imposed was expressly mentioned in Section 9A(3). It was further contended that the validity of the impugned notification having retrospective effect cannot be sustained on the strength of Rule 20(2)(a) of said rules. It was contended that for judging the validity of the impugned notification, Section 9A(6), which conferred rule making power on the Central Government, was of no consequence. Power to frame rules for assessment and collection of duty had no relevance for judging the validity of the retrospective operation of a notification issued under Section 9A(1). It was, therefore, argued that the impugned notification was invalid because it was retrospective. It was then contended that since the Government of India was a signatory to the WTO Agreement, every endeavour should be made to interpret the rules in conformity with the commitments made by the Government of India to the international community. Heavy reliance was placed on Article 10 of the WTO Agreement, and it was submitted that Article 10.2 thereof stipulated that final duty may be levied for the period for which provisional measures had been applied. It was submitted that the purpose of enacting Article 10.2 was to validate or regularize the provisional duty for the period for which it had been applied. It was further submitted that Article 10.4 stipulated that in the case of material retardation and a threat of injury despite the provisional measure, final duty can be prospective only and the provisional levies had to be refunded. It was contended that Articles 10.2 to 10.5 constituted one integral code dealing with different contingencies and situations based on conclusions about the injury aspect. It was submitted that Article 10.1 would prevail and the final duty would be effective from the date of the notification in all other cases. The learned Counsel submitted that Rule 20(1) of the said rules had the same effect as Article 10.1 of the WTO Agreement and that the provisions contained in Articles 10.2 and 10.4 were condensed in Rule 20(2)(a). It was argued that in the absence of any compelling or overriding constraint, the phrase "where a provisional duty has been levied" occurring in Rule 20(2)(a), should be construed in the light of the provisions of the Article 10.2, and so construed it would only mean and refer to the period for which provisional measure had been applied. It was submitted that the said phrase of Article 10.2, namely, "period for which provisional measures had been applied" should be transplanted in Rule 20(2)(a) so as to bring it in tune with Article 10.2 of the WTO Agreement, so that Rule 20(2)(a) would also apply only to a situation where the provisional duty had been imposed and collected and will not apply to a period or a situation where the provisional duty had not been levied. It was also submitted that subordinate legislation cannot have retrospective operation or effect unless the parent statute confers the power on the delegated authority to enact a law to have such retrospective operation either by way of express words or by necessary implication. In support of this contention reliance was placed on the following decisions :