Full Judgment Text
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CASE NO.:
Appeal (civil) 774-775 of 2001
PETITIONER:
Rishiroop Polymers Pvt. Ltd.
RESPONDENT:
Designated Authority & Additional Secretary & Ors.
DATE OF JUDGMENT: 23/03/2006
BENCH:
ASHOK BHAN & G.P. MATHUR
JUDGMENT:
J U D G M E N T
Bhan, J.
The present appeals have been filed with the
leave of the Court against the final order No.
21/2000-AD and Corrigendum Miscellaneous Order
No.1/2000-AD in C/322/99-AD with C/Stay/1383/99-AD
dated 2nd February, 2000 and 3rd February, 2000
passed by the Customs, Excise & Gold (Control)
Appellate Tribunal, New Delhi (for short "the
Tribunal"). By the order dated 2nd of February,
2000, the Tribunal rejected the appeals filed by
the appellant except to the extent that it held
that variable anti-dumping duty greater than
dumping margin could not be imposed. The order
dated 3rd of February, 2000 is merely a Corrigendum
correcting the clerical mistake in the order
No.21/2000-AD dated 2nd February, 2000.
The appellant \026 Rishiroop Polymers Private
Limited is the authorised exclusive Intending
Agents and Representatives of Messrs Korea Kumho
Petrochemials Company Limited (KKPC), Republic of
Korea for the sale of their products, namely,
Styrene Butadiene Rubber (SBR) and other products.
The appellant has been authorised by KKPC under an
authorization dated 6th May, 1998 to appear and
plead on their behalf. The present appeals have
been filed by the appellant in its capacity as an
interested/aggrieved party and as also the
representatives of KKPC.
Synthetics and Chemicals Limited (respondent
no.3 herein) filed an Anti Dumping Petition on 9th
of September, 1997 before the Designated Authority
appointed under the Customs Tariff Act, 1975 (for
short "the Tariff Act") against the imports of SBR
originating in or exported from Japan, Korea,
Turkey, Taiwan, USA, Germany and France. It was
alleged therein that the import of SBR from the
subject countries was causing injury to the
domestic industry manufacturing SBR in India.
Respondent No.3 furnished details regarding the
normal value of the products in the subject
countries and the margin of dumping. It w\as
alleged that as a result of the dumped imports of
SBR the domestic industry, namely, Respondent
No.3, was incurring heavy losses on its SBR
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activity. It was further alleged that in spite of
the cost of production in the subject countries,
exporters from there were reducing their export
price consistently which has forced the domestic
industry to reduce its selling price of various
grades of SBR. That the selling price realised by
the domestic industry is so low that it is unable
to recover even the cost of production. That the
dumped materials had retarded the growth of
domestic industry in spite of installation of new
plant and machinery. The expansion programme could
not be commissioned as the dumped imports
threatened to cause injury for future also due to
sufficient freely disposable production capacity in
the subject countries.
The Designated Authority, on the basis of the
application filed by Respondent No.3, initiated
anti-dumping investigation against the subject
countries concerning imports of SBR classified
under custom sub-heading 4002.19 of Schedule I of
the Tariff Act, originating in or exported from the
subject countries. The period of investigation was
fixed by the Designated Authority for 17 months,
i.e., from 1st April, 1996 to 31st August, 1997.
The Designated Authority on the basis of the
material collected, published its preliminary
findings as per Notification dated 21st January,
1999. By the said Notification anti-dumping duties
were imposed on different grades of SBR originating
from the subject countries. The Designated
Authority further invited details and comments from
all interested parties including the exporters from
the subject countries. The Designated Authority
submitted its final findings which were accepted by
the Government of India, Ministry of Commerce and
accordingly issued a Notification of final
findings. By the said final findings, the
Authority had concluded that:
(a) SBR had been exported from Japan, Korea
R.P., Turkey, Taiwan, USA, Germany and
France to India below its normal value
resulting in dumping of SBR;
(b) The domestic industry has suffered
material injury;
(c) Causal link between dumping and injury
was established.
By Gazette Notification No. 421, the Ministry
of Finance, issued a Notification No.107/00-Cus
dated 24th August, 1999 in exercise of powers
conferred by sub-section (2) of the Tariff Act,
notifying the final anti-dumping duty on the basis
of the recommendations in the final findings dated
2nd of June, 1999.
The appellant being aggrieved, filed appeals
before the Tribunal against the final findings
dated 2nd of June, 1999. In the Memorandum of
Appeals, grounds were taken, inter alia, as to the
issues of normal value dumping margin, injury
causal link in the context of domestic industry and
like articles. During the course of arguments, as
noted by the Tribunal in paragraph 4 of its order,
counsel appearing for the appellant did not urge
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any ground other than that domestic industry has
not suffered injury on account of import of SBR
from the subject countries and that there was no
causal link between the injury and import from the
subject countries. Accordingly, the Tribunal did
not go into the question as to whether the fixation
of normal value and dumping margin of articles
imported from the subject countries was correct or
not. The Tribunal also did not go into the
question as to whether the normal selling price
fixed by the Designated Authority was correct. The
Tribunal by the impugned order rejected the appeals
except to the extent that variable anti-dumping
duty greater than the dumping margin could not be
imposed. As opposed to the variable duty imposed
by the final findings, the Tribunal imposed fixed
duties. Tribunal imposed fixed duty in respect of
1500 and 1700 series of SBR imported from Korea
Kumho. By a Corrigendum Miscellaneous Order No.
1/2000-AD (which was certified on 16th of February,
2000 and communicated to the appellant on 21st
February, 2000), anti-dumping duty was also
imposed in respect of the 1900 series of SBR.
The submission of the counsel appearing for the
appellant that the Designated Authority while
assessing injury to the domestic industry in case
of certain parameters, had taken into consideration
the data relating to the year immediately preceding
the period of investigation was rejected by the
Tribunal by observing, thus:
"...... Even though data for 1994-95
was also noted in the work-sheet,
assessments were made based on the
data relating to the year 1995-96
only. Compared to 1995-96 there was
noticeable increase in stock of
various grades of SBR with the
domestic industry; that there was
considerable increase of imports from
subject countries; there was loss in
the profitability on the manufacture
of SBR and in relation to average
realization. On going through those
data we are convinced that the
domestic industry suffered drastic
decline in all the relevant parameters
during the period of investigation
compared to those of the immediately
preceding financial year, namely,
1995-96.
(emphasis
supplied)
Another finding recorded by the Tribunal was
that "the Designated Authority wanted to impose
anti-dumping duty on all grades of Styrene
Butadiene Rubber irrespective of whether it is put
under Heading 3903 or 4002. But while concluding
the final finding, anti dumping duty has been
imposed on SBR falling under sub-heading 4002.19
only. This is a clerical omission which is
required to be corrected. Thus, we make it clear
that Anti Dumping duty is on all grades of SBR,
whether falling under sub-heading 4002 or 3903.
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Customs Authorities have to impose duty on all
types of SBR, irrespective of their
classification."
Learned Counsel appearing for the appellant did
not put a challenge to the finding recorded by the
Tribunal as regards the causal link between injury
suffered by the domestic industry on account of
import of SBR from the subject countries.
Learned counsel appearing for the appellant put
forth three-fold submissions. Firstly, that the
Designated Authority while assessing injury to the
domestic industry in case of certain parameters,
had taken into consideration the data relating to
the year immediately preceding the period of
investigation whereas the Tribunal in para 12 of
the impugned order has held that the injury
assessment by the Designated Authority was based on
the data relating to the year 1995-96 only.
According to him, finding recorded by the Tribunal
was factually incorrect. The second submission
relates to the imposition of duty on products
falling under Tariff Entry 3903.90 by the Tribunal.
It was submitted that against the finding recorded
by the Designated Authority that the products in
question fell under heading 4002.19, neither the
Union of India nor Respondent No.3 or any other
interested party had filed appeal or objections to
the finding recorded by the Designated Authority;
that the Tribunal had come to this conclusion suo
motu and hence this portion of the order was liable
to be set aside. The third and the last argument
deals with the point that the Tribunal has
converted the duty imposed in US dollar term from
the rupee value term without there being any
appeals/prayer either by the Union of India or any
other interested party.
We do not find much substance in the submission
relating to the first point. The Tribunal in its
order has noted that even though data for the year
1994-95 was also noted in the work-sheet,
assessment was based on the data relating to the
year 1995-96 only. In order to satisfy ourselves,
we sent for the original confidential file. After
going through the same, we find that though data
for 1994-95 was noted by the Designated Authority
in the work-sheet, but the assessment was made on
the basis of the data relating to the year 1995-96
only. Compared to 1995-96 there was considerable
increase in the stock of various grades of SBR with
the domestic industry. There was a loss in the
profitability in the manufacture of SBR in relation
to the average realization. Having gone through
the confidential records produced before us and the
data for the years 1995-96 and 1996-97, we are
satisfied that the domestic industry suffered
drastic decline in all the relevant parameters
during the period of investigation compared to
those of the immediately preceding Financial Year
1995-96. We find no justification to take a view
other than what has been taken by the Designated
Authority and the Tribunal. Accordingly, the
findings recorded by the Designated Authority as
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well as by the Tribunal on this point are
confirmed.
Coming to the second point, it may be noted
that the subject under consideration by the
Designated Authority was "Styrene Butadiene
Rubber". Chapter 40 of the Tariff Act deals with
"Rubber and Articles thereof". Tariff entries
40.01 and 40,02 read as follows:
Tariff Entry 40.01
"Natural Rubber, balata, gutta percha,
Guayule, chicle and similar natural
gums, in primary forms or in plates,
sheets or strip."
Tariff Entry 40.02
"Synthetic rubber and factor derived
from oils, in primary forms or in
plates, sheets of strip; mi\xtures of
any product of heading No.40.01 with
any product of this heading, in
primary forms or in plates, sheets or
strip."
Tribunal after noticing the following
observations of the Designated Authority in para 7
of its order:
"The Authority thus holds that whereas
it is not justified to cover all items
falling under the sub-heading 3903.90,
for the purpose of imposing anti-
dumping duty in present case the
anti-dumping duty however is payable
on Styrene Butadiene Rubber of
specified series as stated, even if it
is sought to be cleared under any
other heading of the Custom Tariff
Act. The Custom Authority is at
liberty and expected to classify the
goods correctly, if the goods offered
for clearance are not classified
correctly."
held \that the Designated Authority wanted to
impose anti-dumping duty on all grades of SBR
irrespective of whether it fell under heading 39.03
or 40.02. The Designated Authority imposed the
anti-dumping duty on the SBR falling in sub-
heading 4002.19 only which was a clerical omission
and required to be corrected. Accordingly, the
Tribunal held that anti-dumping duty was liable to
be imposed on all grades of SBR falling under sub-
heading 4002.19 or 3903.90. That the Customs
Authorities have to impose duty on all types of SBR
irrespective of their classification. After going
through the order of the Designated Authority and
the Tribunal, we are of the opinion that the
Tribunal has quoted and relied upon the observation
of the Designated Authority in paragraph 7
reproduced above, out of context. The Designated
Authority in paragraph 5 of its order observed,
thus:
"The Authority observes that items
falling under 3903.90 are not product
under consideration and SBR in 1000
series is not produced by the
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petitioner and thus are not product
under consideration."
Para 7 of the final finding of the Designated
Authority reads thus:
"The Authority observes that, in the
preliminary findings it was inter-alia
held that product under consideration
in the present investigation is
Styrene Butadiene Rubber (SBR)
originating in or exported from the
subject countries classified under
Custom sub-heading 4002.19 of the
Custom Tariff Act which was explained
at para 5 of the preliminary findings
dated 21st January, 1999. The
Authority had inter alia held that
product under consideration is SBR of
1500 series, 1700 series and 1900
series under Custom sub-heading
4002.19 of Custom Tariff Act. None of
the interested parties has raised any
argument in this regard and therefore
the Authority confirms it preliminary
findings in this regard.
The Authority notes that petitioner is
claiming that SBR is also being
cleared under custom chapter 39 Entry
no.3903.90 (polymers of styrene in
primary forms) and therefore the anti-
dumping duty should be imposed under
this head also. On the contrary it is
argued by exporter and importer that
chapter 39 relates to plastic and does
not cover SBR and therefore duty
should not be imposed on products
covered under chapter 39 Entry no.
3903.90. The Authority observes that
chapter 39 covers "Plastic & Articles
Thereof" whereas chapter 40 covers
"Rubber & Articles Thereof" Styrene
Butadiene Rubber as the name suggest
is a synthetic rubber and is covered
under chapter 40. It is also observed
that as per note no. 2(h) of chapter
39, the synthetic rubbers and articles
thereof which are covered under
chapter 40, do not fall under chapter
39. It is also observed that while
giving the import statistics, the
petitioner had submitted information
in respect of custom heading
No.4002.19 only. While submitting the
evidence that SBR 1900 series is also
being imported under chapter 39, the
Authority observes that the items
cleared under chapter 39 is "Elastomer
Resin KHS 68" and thus is not under
the nomenclature of "Synthetic
Rubber". In view of this, the
Authority does not find justification
to cover item falling under sub-
heading 3903.90 for the purpose of
imposing anti-dumping duty.
However, the Authority agrees with the
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argument of the petitioner to the
extent that product under
consideration is styrene butadiene
rubber of specified series as stated
irrespective of custom heading. The
Authority thus holds that whereas it
is not justified to cover all items
falling under the sub-heading 3903.90
for the purpose of imposing anti-
dumping duty in present case the anti-
dumping duty however is payable on
Styrene Butadiene Rubber of specified
series as stated even if it is sought
to be cleared under any other heading
of the Custom Tariff Act. The Custom
Authority is at liberty and expected
to classify the goods correct if the
goods offered for clearance are not
classified correctly."
(Emphasis supplied)
The findings recorded by the Designated
Authority in para 7 of its order clearly indicate
that the Designated Authority did not intend to
cover SBR which was being imported under sub-
heading 3903.90 for the purpose of imposing duty;
what the Designated Authority held was, that if the
goods were being imported by wrongly classifying
them under sub-heading 4002.19, then the Customs
Authorities are at liberty and expected to classify
the goods correctly. It was held by the Designated
Authority that while giving the import statistics,
Respondent No.3 had submitted information in
respect of Custom Heading 4002.19 only; that
Chapter 39 covers "Plastic and Articles thereof"
whereas Chapter 40 covers "Rubber and Articles
thereof" Styrene Butadiene Rubber, as the name
suggests, is a synthetic rubber and would be
covered under Chapter 40 and not 39; that as per
note no. 2(h) of Chapter 39, synthetic rubbers and
articles thereof, which are covered under Chapter
40, do not fall under Chapter 39. The Designated
Authority had recorded a firm finding that
"Elastomer Resin KHS 68" was not covered for the
purpose of imposing duty. The finding recorded by
the Designated Authority was categorical and not a
clerical omission, as has been observed by the
Tribunal. It was not correct on the part of the
Tribunal to hold on its own motion that "this is a
clerical omission which is required to be
corrected." Finding recorded by the Tribunal in
this respect deserves to be set aside. We do so.
Finding recorded by the Designated Authority in
this respect is restored.
Dealing with the penultimate argument, it may
be stated that the Designated Authority had imposed
the duty in rupee value but the Tribunal converted
the same in US dollar terms, without there being
any prayer for such conversion by either of the
parties. Learned counsel appearing for the
Department conceded that the Tribunal was not
justified in converting the anti-dumping duty in US
dollar terms and, after taking instructions, stated
that he has no objection to the setting aside of
the order passed by the Tribunal in imposing anti-
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dumping duty in terms of US dollars and to the
restoration of the order passed by the Designated
Authority in imposing the anti-dumping duty in
rupee terms.
Accordingly, these appeals are allowed partly
to the extent indicated above. No costs.