Full Judgment Text
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 19
CASE NO.:
Appeal (civil) 773 of 2001
PETITIONER:
Rishiroop Polymers Pvt. Ltd.
RESPONDENT:
Designated Authority & Additional Secretary
DATE OF JUDGMENT: 23/03/2006
BENCH:
ASHOK BHAN & G.P. MATHUR
JUDGMENT:
J U D G M E N T
With
Civil Appeal Nos. ......1703....... of 2006
(Arising out of SLP) Nos. 22905-22906 of 2003
Korea Kumho Petrochemicals Co.Ltd. ....Appellant
- Versus -
Union of India & Ors. ....Respondents
Civil Appeal Nos. 7159-7161 of 2004
Punit Resins Ltd. ....Appellant
- Versus -
Union of India & Ors. ....Respondents
Civil Appeal No. 7162 of 2004
Korea Kumho Petrochemicals Co. Ltd. ....Appellant
- Versus -
Ministry of Finance & Ors. ...Respondents
Bhan, J.
Leave granted in Special Leave Petition (Civil
) Nos. 22905 - 22906 of 2003.
This judgment shall dispose of Civil Appeal No.
773 of 2001 against the final Order No. 22 of 2000-
AD in Appeal No. C/330/97-AD dated 2.2.2000 passed
by the Customs, Excise & Gold (Control) Appellate
Tribunal, New Delhi [ for short "the Tribunal" ];
Civil Appeals arising out of SLP ) Nos. 22905 -
22906 of 2003 against the final order No. 10/03-AD
and Misc. Order No. 9/03-AD dated 13.6.2003 passed
by the Customs, Excise and Service Tax Appellate
Tribunal, New Delhi in Appeal No. C/586/2001-AD
with C/Misc./100/2002-AD; Civil Appeal Nos. 7159-
7161 of 2004 against the final order Nos. 14-
16/2004-NB(A) dated 1.7.2004 passed by the Customs,
Excise and Service Tax Appellate Tribunal, New
Delhi in Appeal Nos. C/260/2002-AD, C/596/2002-AD
and C/687/2002-AD; and Civil Appeal No. 7162 of
2004 against the final order No. 17/2004-NB(A)
dated 1.7.2004 passed by the Customs, Excise and
Service Tax Appellate Tribunal, New Delhi [ for
short "the Tribunal" ] in Appeal No. C/14/2003-AD.
These appeals are interconnected and pertain
to the same cause of action. Civil Appeal No. 773
of 2001 is against the final order imposing anti-
dumping duty for a period of five years, Civil
Appeals arising out of SLP) Nos. 22905-22906 of
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 19
2003 are directed against the orders passed in "Mid
Term Review" and Civil Appeal Nos. 7159-7162 of
2004 are against the order passed for continuance
of anti-dumping duty in the "Sunset Review" for
another period of five years.
Common facts giving rise to the cause of action
and the litigation are as follows:
Before adverting to the issues raised in these
appeals it will be relevant to mention the
historical background of the relevant statute and
the Rules. Keeping in tune with the changing
international economic scenario, the Government of
India adopted the path of liberalization in its
fiscal/economic policies. The focus changed from a
closed economic setup to an open one. This shift
in the focus invited foreign capital, goods,
products etc., in now open Indian market. This
resulted in stiff competition for the domestic
industry which had to now compete with the foreign
products both in terms of price as well as its
quality. Although, the said process of
liberalization had its positive side, i.e., making
available foreign products to the domestic users,
but it was also seen as having negative impact,
which if not regulated properly, would have
resulted in adversely affecting the domestic
industry, thereby sometimes leading to closure of
the same and/or retarding its growth leading to an
economic crisis.
Though committed to the liberalization, the
Government of India also simultaneously took enough
speedy measures to ensure a level field playing for
the domestic as well as foreign producers. The
concern of the Government in this regard was
translated into various amendments which were made
in the Customs Tariff Act, 1975 [ for short "the
Tariff Act" ] from time to time. During the year
1995 amendments were made to the Tariff Act.
Section 9 (A), which is the charging section, was
introduced whereby it became permissible for the
Central Government to impose Anti-Dumping duty on
importation of foreign articles which were found to
be dumped in India at a price which was lower than
the normal price of such imported goods in their
country of manufacture/origin. It defines the
margin of profit, normal value and export price.
It also provides for duration of levy of anti-
dumping duty, its review from time to time as well
as its continuance for a further period of five
years, , if the cessation of duty is likely to lead
to continuance or recurrence of dumping and injury.
This duty is over and above any other duty in
force.
Section 9 (A) of the Tariff Act reads as under:
"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 than its
normal value, then, upon the
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 19
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.
Explanation. - For the purposes of
this section, -
(a) "margin of dumping", in relation
to an article, means the difference
between its export price and its
normal value;
(b) "export price", in relation to an
article, means the price of the
article exported from the exporting
country or territory and in cases
where there is no export price or
where the export price is unreliable
because of association or a
compensatory arrangement between the
exporter and the importer or a third
party, the export price may be
constructed on the basis of the price
at which the imported articles are
first resold to an independent buyer
or if the article is not resold to an
independent buyer, or not resold in
the condition as imported, on such
reasonable basis as may be determined
in accordance with the rules made
under sub-section (6);
(c) "normal value", in relation to an
article, means -
(i) the comparable price, in the
ordinary course of trade, for the like
article when meant for consumption in
the exporting country or territory as
determined in accordance with the
rules made under sub-section (6); or
(ii) when there are no sales of the
like article in the ordinary course of
trade in the domestic market of the
exporting country or territory, or
when because of the particular market
situation or low volume of the sales
in the domestic market of the
exporting country or territory, such
sales do not permit a proper
comparison, the normal value shall be
either -
(a) comparable representative price of
the like article when exported from
the exporting country or territory to
an appropriate third country as
determined in accordance with the
rules made under sub-section (6); or
(b) the cost of production of the said
article in the country of origin along
with reasonable addition for
administrative, selling and general
costs, and for profits, as determined
in accordance with the rules made
under sub-section (6):
Provided that in the case of import of
the article from a country other than
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 19
the country of origin and where the
article has been merely transhipped
through the country of export or such
article is not produced in the country
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 is 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 articles imported
by a hundred per cent export-oriented
undertaking or a unit in a free trade
zone or in a special economic zone.
Explanation:- For the purposes of this
section, the expressions "hundred per
cent export-oriented undertaking",
"free trade zone" and "special
economic zone" shall have the meanings
assigned to them in Explanation 2 to
sub-section (1) of section 3 of the
Central Excise Act, 1944 (1 of 1944).
(3) If the Central Government, in
respect of the dumped article under
inquiry, is of the opinion that -
(i) there is a history of dumping
which caused injury or that the
importer was, or should have been,
aware that the exporter practices
dumping and that such dumping
would cause injury; and
(ii) the 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 imported
article dumped and other
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 5 of 19
circumstances is likely to
seriously under-mine the remedial
effect of the anti-dumping duty
liable to be levied,
the Central Government may, by
notification in the Official Gazette,
levy anti-dumping duty retrospectively
from a date prior to the date of
imposition of anti-dumping duty under
sub-section (2) but not beyond ninety
days from the date of notification
under that sub-section, and
notwithstanding anything contained in
any law for the time being in force,
such duty shall be payable at such
rate and from such date as may be
specified in the notification.
(4) The anti-dumping duty chargeable
under this section shall be in
addition to any other duty imposed
under this Act or any other law for
the time being in force.
(5) The anti-dumping duty imposed
under this section shall, unless
revoked earlier, cease to have effect
on the expiry of five years from the
date of such imposition:
Provided that if the Central
Government, in a review, is of the
opinion that the cessation of such
duty is likely to lead to continuation
or recurrence of dumping and injury,
it may, from time to time, extend the
period of such imposition for a
further period of five years and such
further period shall commence from the
date of order of such extension :
Provided further that where a review
initiated before the expiry of the
aforesaid period of five years has not
come to a conclusion before such
expiry, the anti-dumping duty may
continue to remain in force pending
the outcome of such a review for a
further 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.
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 6 of 19
(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, the date for determination of rate
of duty, non-levy, short levy,
refunds, interest, appeals, offences
and penalties shall, as far as may be,
apply to the duty chargeable under
this section as they apply in relation
to duties leviable under that Act."
[emphasis supplied]
Method of determination of the injury and the
procedure to be followed is provided in Section 9B
of the Tariff Act, relevant portion of which is
extracted below:
"9B. No levy under section 9 or
section 9A in certain cases. - (1)
Notwithstanding anything contained in
section 9 or section 9A: \027
(a) ..........
(b) the Central Government shall not
levy any countervailing duty or anti-
dumping duty -
(i) under section 9 or section 9A by
reasons of exemption of such
articles from duties or taxes
borne by the like article when
meant for consumption in the
country of origin or exportation
or by reasons of refund of such
duties or taxes;
(ii) under sub-section (1) of each of
these sections, on the import
into India of any article from a
member country of the World
Trade Organisation or from a
country with whom Government of
India has a most favoured nation
agreement (hereinafter referred
as a specified country), unless
in accordance with the rules
made under sub-section (2) of
this section, a determination
has been made that import of
such article into India causes
or threatens material injury to
any established industry in
India or materially retards the
establishment of any industry in
India; and
(iii) ......................
(2) The Central Government may, by
notification in the Official
Gazette, make rules for the
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 7 of 19
purposes of this section, and
without prejudice to the
generality of the foregoing, such
rules may provide for the manner
in which any investigation may be
made for the purposes of this
section, the factors to which
regard shall be at in any such
investigation and for all matters
connected with such
investigation."
Under the scheme a provisional levy of duty is
contemplated which is preceded by preliminary
findings regarding dumping and the consequent
injury to the domestic industry. Under Section 9
(c) an appeal is provided against the determination
or review thereof. This appeal is regarding the
existence, degree and effect of any dumping in
relation to any article by the designated authority
from time to time.
In exercise of the power under the Tariff Act,
the Customs Tariff (Identification, Assessment and
Collection of Anti-dumping Duty on Dumped Articles
and for Determination of Injury) Rules, 1995 [ for
short "the Rules" ] were framed. Rule 2 (b)
defines the "domestic industry" to mean:
"(b) "domestic industry" means the
domestic producers as a whole engaged
in the manufacture of the like article
and any activity connected therewith
or those whose collective output of
the said article constitutes a major
proportion of the total domestic
production of that article except when
such producers are related to the
exporters or importers of the alleged
dumped article or are themselves
importers thereof in which case such
producers may be deemed not to form
part of domestic industry.
Provided that in exceptional
circumstances referred to in sub-rule
(3) of Rule 11, the domestic industry
in relation to the article in question
shall be deemed to comprise two or
more competitive markets and the
producers within each of such market a
separate industry, if -
(i) the producers within such a market
sell all or almost all of their
production of the article in
question in that market; and
(ii) the demand in the market is
not in any substantial degree
supplied by producers of the said
article located elsewhere in the
territory;
Explanation. - For the purposes of
this clause, -
(i) producers shall be deemed to be
related to exporters or importers
only if, -
(a) one of them directly or
indirectly controls the
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 8 of 19
other; or
(b) both of them are directly
or indirectly controlled by a
third person; or
(c) together they directly or
indirectly control a third
person subject to the
condition that are grounds
for believing or suspecting
that the effect of the
relationship is such as to
cause the producers to behave
differently from non-related
producers.
(ii) a producer shall be deemed to
control another producer when the
former is legally or operationally
in a position to exercise
restraint or direction over the
latter."
Under Rule 3, the Central Government by a
notification can appoint a person not below the
rank of Joint Secretary of the Government of India
or such other person which the Government of India
may think fit as designated authority for the
purpose of said Rules. Under Rule 4, it is the
duty of the designated authority to investigate as
to the existence, degree and effect of any alleged
dumping in relation to any import of any article
and also to identify the article liable for anti
dumping. The designated authority is also
empowered to recommend to the Central Government as
regards normal value, export price, margin of
dumping and also give its findings on injury or
threat of injury to the domestic industry. The
date on which the duty is commenced is also to be
recommended by the designated authority. The
designated authority is also further empowered to
review the need for continuance of any anti-dumping
duty under Rule 23.
As per the procedure contemplated under Rule 5,
the designated authority initiates an investigation
regarding the existence, degree and effect of any
alleged dumping, upon receipt of a written
application by or on behalf of the domestic
industry containing all relevant data, figures and
details supported by evidence of dumping, injury
and also the causal link between such dumped
articles and the alleged injury. Over and above,
under sub-clause 4 of Rule 5 of the Rules, the
designated authority also has a suo motu power to
initiate investigation, if it is satisfied from the
information received from the Collector of Customs
or from any other source regarding the dumping.
The designated authority is also required to notify
the Government of the exporting countries before
proceeding/initiating any investigation.
If the decision is taken by the designated
authority to initiate investigation, a detailed
exercise involving participation by the domestic
industry, the exporter, importer and all other
interested parties, begins. Other interested
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 9 of 19
parties, who are likely to be affected by the duty
are also heard and objections are invited from them
within a period of 30 days. The representative of
consumer organizations also sometimes are heard,
depending on the situation. Under Rule 11 of the
Rules, the designated authority is required to
determine the injury to the domestic industry,
threat of injury to domestic industry, material
retardation to the establishment of the domestic
industry, a causal link between the dumped imports
and the injury. This is done by taking into
account all relevant factors including the volumes
of dumped imports, their effect on the price in the
domestic market. The principles on which the
determination are done is indicated in Annexure II
to the Rules. Rule 11 reads:
"11. Determination of injury. - (1) In
the case of imports from specified
countries, the designated authority
shall record a further finding that
import of such article into India
causes or threatens material injury to
any established industry in India or
materially retards the establishment
of any industry in India.
(2) The designated authority shall
determine the injury to domestic
industry, threat of injury to domestic
industry, material retardation to
establishment of domestic industry and
a causal link between dumped imports
and injury, taking into account all
relevant facts, including the volume
of dumped imports, their effect on
price in the domestic market for like
articles and the consequent effect of
such imports on domestic producers of
such articles and in accordance with
the principles set out in Annexure II
to these rules.
(3) The designated authority may, in
exceptional cases, give a finding as
to the existence of injury even where
a substantial portion of the domestic
industry is not injured, if -
(i) there is a concentration of dumped
imports into an isolated market, and
(ii) the dumped articles are causing
injury to the producers of all or
almost all of the production within
such market."
After the initiation of investigation, followed
by the preliminary findings, if any, Rules
contemplate giving of the final findings by the
designated authority under Rule 17 of the Rules.
Such a final finding is to be given within a period
of one year from the date of the investigation.
The parameters are given in Rule 17. Rule 18 of
the Rules provides that the Central Government may,
within three months of the date of publication of
the final findings by the designated authority
under Rule 17, impose anti-dumping duty. The amount
of the duty has to be an amount adequate to remove
injury to the domestic industry. Apart from this,
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 10 of 19
other guidelines have also been provided for in
Rule 18, which have to be considered while deciding
the levy of the quantum of duty. Rule 23 provides
for the review of levy and exemption of duty from
time to time. The same reads:
"23. Review. - (1) The designated
authority shall, from time to time,
review the need for the continued
imposition of the anti-dumping duty
and shall, if it is satisfied on the
basis of information received by it
that there is no justification for the
continued imposition of such duty
recommend to the Central Government
for its withdrawal.
(2) Any review initiated under sub-
rule (1) shall be concluded within a
period not exceeding twelve months
from the date of initiation of such
review.
(3) The provisions of rules 6, 7, 8,
9/10, 11, 16, 17, 18, 19, and 20 shall
be mutatis mutandis applicable in the
case of review."
Civil Appeal No. 773 of 2001.
This appeal is directed against the final
order of the Tribunal upholding the final order
passed by the Designated Authority under Rule 17,
recommending levy of anti-dumping duty consequent
upon which, the Central Government imposed anti-
dumping duty under Rule 18.
Appellant is the sole agent of Acrylonitrile
Butadiene Rubber [ for short " NBR" ] as
manufactured by Korea Kumho Petrochemicals Limited
[ for short "KKPC" ]. The subject goods are oil
resistance rubber and are of various grades like:
KOSYN KNB 35 L
KOSYN KNB 35 LL
KOSYN KNB 35 LM
KOSYN KNB 35 LH
KOSYN KNB 0230
KOSYN KNB 0230 L
KOSYN KNB 0230 H
The subject goods are being imported into India for
near about a decade. The appellant’s entire
activities/trading activities and earning is from
the sale of the subject goods as are imported from
time to time in lawful manner subject to the policy
laid by the concerned authorities.
The subject anti-dumping duty proceedings
relate to NBR which is the commercially known name
of the said type of goods. Broadly speaking NBR is
a synthetic rubber mainly used in the manufacture
of other rubber articles such as oil seals, hoses,
automobile product, rice dehusking rolls etc.. NBR
is a generic term. It has various grades and
physical forms. Various grades have different
purposes and are put to use as raw material for the
production of various types of finished products.
The rubber industry in India is a vital
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 11 of 19
industry and has a bearing on the economic health
of the country. The industry caters to a number of
critical requirements including those of
agriculture, defence, aviation and automobile
sectors, among others. It provides employment,
directly or indirectly to a large number of people
in small, medium and large scale sector units,
which are affected by adverse development in the
industry.
Gujarat Apar Polymers Ltd. (GAPL), the name of
which has been changed to M/s Apar Industries
imited, hereinafter
referred to Respondent No. 3, (amendment was
allowed vide this Court’s Order dated 19.1.2001
passed in I.A.No. 3), are the manufacturers of some
grades of NBR. Respondent No. 3 by means of
complaint dated 3.11.1995 addressed to the
Additional Secretary being the designated authority
under Section 9 of the Tariff Act in the Ministry
of Commerce, stated that the import of bales of the
said consignment from Germany is causing injury to
its productions. Proceedings were initiated by the
Public Notice dated 1.3.1995 against export of NBR
from Germany and Korea. The period of
investigation was 1.10.1994 to 31.3.1995.
Responses were filed by the interested parties.
Normal value was determined on the basis of
weighed average ex-factory selling price in the
domestic market. By taking into consideration the
cumulative effect of imports from both the
countries, the designated authority came to the
conclusion that the injury was suffered by the
domestic industry and as such gave a preliminary
finding dated 30.12.1996 imposing anti-dumping
duty. Thereafter, the designated authority
confirmed its preliminary finding dated 30.12.1996.
Union of India, accepted the final finding and
issued a notification dated 17.7.1997 As per
findings, duty was slightly enhanced in so far as
Germany was concerned and partially reduced in so
far as the export from Korea was concerned.
Section 9A provides that where any article is
exported 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.
Export price in relation to an article has been
defined to mean the price of the article exported
from the exporting country and the normal price
has been defined to mean the comparable price, in
the ordinary course of trade, for the like article
when meant for consumption in the exporting
country. The designated authority after
considering the entire data of facts came to the
conclusion that the article NBR exported to India
from Korea and Germany was not de minis as the
difference in price in the local market (India) and
the price at which it was sold in the country of
export was more than 2% and further the total
quantity exported from Korea was more than 3% of
the total imports. That the injury was caused to
the domestic industry. In so far as causal link
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 12 of 19
was concerned, it was held that because of the NBR
exported to the country a material injury had been
caused to the domestic industry. In determining
whether the material injury to the domestic
industry was caused by the dumped goods, the
authority took into consideration the following
facts:
"a) The imports of the product from
the subject countries cumulatively
increased significantly in absolute
terms and relative to the production
and consumption of the product in
India. The share of the subject
countries in the total imports also
increased significantly. As a direct
consequence, the domestic industry
lost market to a significant level,
which it would have otherwise gained;
b) The substantial imports of NBR
from the subject countries force the
domestic industry to sell its produce
at unremunerative prices, resulting in
financial losses;
c) The trend of various parameters
indicating injury to the domestic
industry establish that the reasons
for the same are the imports from the
subject countries.
In final conclusion the authority recorded the
following findings:
"-- NBR originating in or exported
from Germany and Korea RP has been
exported to India below its normal
value;
-- The domestic industry has suffered
material injury;
-- The injury has been caused to the
domestic industry by the exports
originating in or exported from
Germany and Korea RP."
In appeal, as noted by the Tribunal in para 5,
the counsel for the appellant had confined his
arguments on the point of injury, causal link and
cumulation of imports from Korea and Germany while
assessing injury. The Tribunal, after considering
the submissions of the respective learned counsels
for the parties, rejected the submissions raised on
behalf of the appellant and held that the material
injury to the domestic industry had been caused due
to dumping and there was a causal link between
them. The submission made by the counsel for the
appellant that the injury, if any, caused to the
domestic industry has been caused because of the
extensive and voluminous of export from Japan, was
rejected by holding that the present complaint
pertains to the exports from Korea and Germany
only. In so far as Japan is concerned, proceedings
were initiated at the instance of Respondent No. 3
for the export made from Japan and an anti-dumping
duty has already been imposed on the export made
from Japan to India.
In para 14 of the impugned order, the Tribunal
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 13 of 19
has converted the anti-dumping duty in US dollar
terms on its own volition even though there was no
prayer by the appellant or a cross appeal/objection
by any other party.
Learned counsel for the appellant did not press
his arguments regarding the injury to the domestic
industry, causal link and cumulation of imports
from Germany and Korea for injury assessment during
the course of arguments before us. The only
argument pressed before us is regarding the
conversion of anti-dumping duty from US Dollar
terms by the Tribunal on its own volition even
though there was no prayer by the appellant or a
cross appeal/objection by the respondent. Another
aspect highlighted by the learned counsel for the
appellant is relating to violation of para (iv) of
Annexure II of the Rules while assessing injury.
Shri A. Sharan, learned Addl. Solicitor General
of India, after taking instruction from the Union
of India conceded that the Tribunal erred in
converting the anti-dumping duty in US Dollar terms
in the absence of any appeal or cross appeal by the
respondent. He conceded that the order passed by
the Tribunal in converting the anti-dumping duty in
US Dollar terms be set aside and order of the
designated authority in imposing the anti-dumping
duty in rupee term be restored. It is so ordered.
Regarding non-consideration of the various
parameters laid down in para (iv) of Annexure II,
it was submitted by him that since this issue had
not been raised before the appellate Tribunal the
appellant cannot be permitted to raise the same for
the first time in this Court as the finding
recorded by the Designated Authority on this score
is essentially a finding of fact based on
appreciation of material placed before it by the
interested parties. After going through the
records, we find that the point regarding the
violation of para (iv) of Annexure II to the Rules
had not been raised either in the memorandum of
appeal before the Tribunal or during the course of
arguments. The point regarding the violation of
parameters laid down in para (iv) of Annexure II to
the Rules has also not been taken in the special
leave petition. The finding recorded by the
designated authority being essentially a finding
of fact having not been questioned before the
Tribunal cannot be permitted to be raised for the
first time in this Court during the course of the
argument. This Court in Shenyang Matsushita S.
Battery Co. Ltd. Vs. Exide Industries Ltd, 2005
(3) SCC 39; and Bhilai Casting (P) Ltd. Vs. CCE,
2005 (10) SCC 492, has held that if a point or
issue had not been raised before the appellate
tribunal then it would not be permitted to be
raised for the first time before this Court. Since
the point regarding non-observation of parameters
laid down in para (iv) of Annexure II to the Rules
had not been raised before the Tribunal either in
the memorandum of appeal or during the course of
arguments before the Tribunal cannot be permitted
to be raised for the first time before us and we
decline to go into the same.
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 14 of 19
For the reasons stated above, this appeal is
accepted only to the limited extent. The finding
recorded by the tribunal in converting the anti-
dumping duty for the period in question from rupee
term to US dollar term without there being any
appeal, counter appeal or objection by the
respondent is set aside. The duty shall be payable
in rupee term, in terms of the order passed by the
designated authority. Except to the extent
indicated above the appeal is dismissed without any
order as to costs.
Civil Appeal Nos. ............. of 2006
(Arising out of SLP) Nos. 22905-22906 of 2003)
The instant appeals relate to the imposition of
anti-dumping duty on the basis of "Mid Term Review"
carried out under Rule 23 of the Rules.
Section 9 A of the Customs Tariff Act, 1975 is
the charging section. It empowers the Central
Government to impose an anti-dumping duty not
exceeding the margin of dumping on an article
exported to India at less than its normal value.
However, this is subject to the provisions of
Section 9B. Section 9B(1)(b)(ii) provides, that
the Central Government shall not levy anti-dumping
duty on articles imported from a specified country
(members of the WTO and those with whom India has a
Most Favoured Nation (MFN) agreement) unless in
accordance with the Rules made under Section 9B(2)
a determination has been made that the import of
such article causes material injury to an industry
in India. In terms of Rule 11 of the Rules framed
under Sections 9A(6) and 9(B)(2), recording of a
finding on material injury is sine qua non for
imposition of the duty. Sub-rule (2) of Rule 11
provides that the Designated Authority shall
determine the injury to domestic industry, threat
of injury to domestic industry, material
retardation to establishment of domestic industry
and a causal link between dumped imports and
injury, taking into account all relevant facts,
including the volume of dumped imports, their
effect on price in the domestic market for like
articles and the consequent effect of such imports
on domestic producers of such articles and in
accordance with the principles set out in Annexure-
II of these Rules, which reads thus:
"(iv) The examination of the impact of
the dumped imports on the domestic
industry concerned, shall include an
evaluation of all relevant economic
factors and indices having a bearing
on the state of the industry,
including natural and potential
decline in sales, profits, output,
market share, productivity, return on
investments or utilisation of
capacity; factors affecting domestic
prices; the magnitude of the margin of
dumping; actual and potential negative
effects on cash flow, inventories,
employment, wages, growth, ability to
raise capital investments. "
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 15 of 19
Rule 23(1) empowers the Designated Authority to
review the need for continued imposition of anti-
dumping duty from time to time and, the Designated
Authority, if satisfied on the basis of the
information received by it that there is no
justification for the continued imposition of such
duty, can recommend to the Central Government for
its withdrawal. Sub rule (2) of these Rules
provides that the review initiated under sub-rule
(1) shall be concluded within a period of not
exceeding 12 months from the date of initiation of
such review. Sub-rule(3) provides that the
provisions of Rules 6, 7, 8, 9, 10, 11, 16, 17, 18,
19 and 20 shall be mutatis mutandis applicable in
the case of review.
Counsel for the appellant contended that it is
mandatory for the Designated Authority to evaluate
all the relevant economic factors, more
particularly, the factors specifically enumerated
in para (iv) of Annexure-II following the word
"including". According to him, all the listed
parameters have to be evaluated and, in addition,
any other relevant economic factor may also be
considered. He emphasized that the evaluation of
the 14 parameters mentioned in para (iv) of
Annexure-II is mandatory and the Designated
Authority has to consider and record a finding on
each one of them. This is the only point raised by
the learned counsel for the appellant in these
appeals. As against this learned senior counsel
appearing for the respondents contended that the
scope of review inquiry by the Designated Authority
is limited to the satisfaction as to whether there
is justification for "continued imposition of such
duty on the basis of the information received by
it." The inquiry could be at the behest of the
interested party or suo motu by the Designated
Authority.
Before considering the rival submissions
advanced by the counsel for the parties, it may be
stated that the Designated Authority had considered
the appellant to be a non-cooperative exporter and
determined the normal value of NBR produced by it
on "facts available basis". This finding of the
Designated Authority has been confirmed by the
Tribunal in the impugned order. The Tribunal has
further held that in the facts and circumstances of
the present case, the normal value arrived at by
the Designated Authority was not required to be
disturbed in the absence of reliable alternative
basis provided by the appellant.
The Tribunal further observed that in respect
of injury analysis, while the appellants may be
right in maintaining that all the parameters
stipulated in para (iv) of Annexure-II to the Anti-
Dumping Rules were required to be considered by the
Designated Authority, but Annexure-II does not
stipulate a separate injury analysis for a review
investigation, as the parameters mentioned therein
were not a check list. It is not necessary to
faithfully mention each of the criteria and an
appropriate notation against each of them, but a
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 16 of 19
sound appreciation of the situation based on the
relevant criterion.
We have considered the rival submissions put
forth by the counsel for the parties. The Mid Term
Review in the instant case was initiated suo motu
after the domestic industry had withdrawn its
application and the Review initiated at its
instance was closed.
For the purpose of ascertaining whether there
was justification for continued imposition of anti-
dumping duty, all relevant information was asked
for from the domestic industry as well as the
appellant and other interested parties. The
domestic industry supplied all the relevant
material for the continued imposition of the anti-
dumping duty whereas the appellant did not
cooperate with the Designated Authority during the
time of Mid Term Review but it took the stand that
there was no dumping. Though before the Designated
Authority the appellant had not raised a ground
that all the 14 parameters given in para (iv) of
Annexure-II relating to principles of determination
of injury were required to be determined or had not
been taken into account and that only some of the
parameters were considered, in appeal before the
Tribunal, the said ground was raised and findings
were returned against the appellant. Before us it
is submitted that the parameters mentioned in the
Rules read with para (iv) of Annexure-II are
mandatory, and the finding as to the injury to the
domestic industry by the Designated Authority is
perverse.
After going through the entire record with the
assistance of the learned counsel for the parties,
we are of the opinion that the contention raised by
the appellant is clearly contrary to the facts on
record. The Designated Authority in its findings
in the Mid Term Review proceedings has
categorically stated that all the factors have been
taken into consideration while determining
continuance of the anti-dumping duty. That apart,
at the time of arguments, we had the advantage of
going through the original records/documents
(original/confidential file was produced in the
Court) which had been placed before the Designated
Authority, which shows that along with the
information provided in the pro-forma, necessary
information with respect to all the 14 parameters
had been provided by the domestic industry and
considered by the designated authority, after due
corrections. In view of the foregoing
consideration, the argument of the appellant that
all relevant factors have not been considered has
no factual foundation.
Otherwise also, we are of the opinion that
scope of the review inquiry by the Designated
Authority is limited to the satisfaction as to
whether there is justification for continued
imposition of such duty on the information received
by it. By its very nature, the review inquiry
would be limited to see as to whether the
conditions which existed at the time of imposition
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 17 of 19
of anti-dumping duty have altered to such an
extent that there is no longer justification for
continued imposition of the duty. The inquiry is
limited to the change in the various parameters
like the normal value, export price, dumping
margin, fixation of non-injury price and injury to
domestic industry. The said inquiry has to be
limited to the information received with respect to
change in the various parameters. The entire
purpose of the review inquiry is not to see whether
there is a need for imposition of anti-dumping duty
but to see whether in the absence of such
continuance, dumping would increase and the
domestic industry suffer.
It is of vital importance to note that in the
initial imposition of duty, the appellant has
accepted the position that determination of injury
by the Designated Authority was proper and in
conformity with the requirements of Annexure-II of
the Anti-Dumping Rules. The appellant did not
challenge the final finding of the Designated
Authority before the Tribunal that parameters
mentioned in para (iv) of Annexure-II had not been
considered or satisfied. We have declined the
permission to the appellant to raise this point
before us in Civil Appeal Nos. 773 and 774 of 2001
which were directed against the final findings
recorded by the Designated Authority based on which
the Government of India had imposed the anti-
dumping duty for a period of five years. Under
Section 9A(1), the said initial imposition of anti-
dumping duty is ordinarily contemplated to be
continued and remain in effect for a full period of
five years, at the end of which it would be subject
to sunset review, the possible consequence of which
would be the extension of the operation of the
period of anti-dumping duty for another period of
five years. This is subject to the provisions of
sub-rule (1) of Rule 23 of the Anti-Dumping Rules,
under which the Designated Authority is empowered
to review the anti-dumping duty imposed from time
to time. Having regard to the scheme of the above
mentioned provisions of the statute, once anti-
dumping duty has been initially imposed, it would
be ordinarily continued for five years unless on a
review it is found by the Designated Authority that
there has been such a significant change in the
facts and circumstances, that it is considered
necessary either to withdraw or modify
appropriately the anti-dumping duty which has been
imposed. It is, therefore, clear that unless the
Designated Authority suo motu or the applicant for
review is in a position to establish clearly that
there has been a significant change in th\e facts
and circumstances relating to each of the basic
requirements or conditions precedent for imposing
duty, the finding given by the Designated Authority
at the time of initial imposition of anti-dumping
duty must be considered to continue to hold the
field.
The final findings recorded by the Designated
Authority at the time of initial imposition of
anti-dumping duty on the existence of injury to the
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 18 of 19
domestic industry must be considered to continue to
remain valid, unless it is proved to be otherwise,
either by the Designated Authority in suo motu
review or by the applicant seeking review. In the
present case, the review had been initiated by the
Designated Authority. Neither the Designated
Authority nor the appellant had placed any material
on record which could possibly displace the
findings given by the Designated Authority at the
stage of initial anti-dumping duty. In the absence
of any new material, the Designated Authority is
not required to apply afresh all parameters or
criteria enumerated in para (iv) of Annexure-II,
which had already been done at the initial stage of
imposition of anti-dumping duty. There is no
material on record to show that there was a change
in the parameters or the criteria relating to the
injury which would warrant withdrawal of anti-
dumping duty. Nevertheless, the Designated
Authority has still analysed the issue of injury in
detail in the Mid Term Review findings and has
considered all the criteria or parameters
enumerated in Annexure-II. There is, therefore, no
merit or substance in the appellant’s contention
regarding non-compliance with Annexure-II.
The Designated Authority in the Mid Term Review
has reduced the anti-dumping duty from US dollar
264 per MT to US dollar 248 per MT. This again
shows that all the relevant material facts had been
taken into consideration by the Designated
Authority while analyzing the injury caused to the
domestic industry.
It would be pertinent to point out, that in the
facts and circumstances of the present case, the
Designated Authority had imposed duty in dollar
terms and in the appeal before the Tribunal or this
Court, the appellant has not challenged this part
of the order of the Designated Authority. Hence,
the same is confirmed.
For the reasons stated herein above, we do not
find any merit in these appeals. Accordingly, they
are dismissed with costs in favour of the Union of
India.
Civil Appeal Nos. 7159-7161 and 7162 of 2004
These appeals relate to continuation of anti-
dumping duty after the expiry of five years for a
further period of five years.
The anti-dumping duty once imposed is valid for
five years unless revoked earlier. Section 9A(5)
empowers the Central Government to extend the
period of such imposition for a further period of
five years, if in a review, it is determined that
the cessation of such duty is likely to lead to
continuation or recurrence of dumping and injury.
Accordingly, a sunset review was conducted. Period
of investigation was from 1st April, 2000 to 31st
March, 2001.
The Designated Authority, after analyzing the
material placed before it, came to the conclusion
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 19 of 19
that the cessation of the duty is likely to lead to
continuation or recurrence of dumping and injury
and therefore it was necessary to continue with
imposition of anti-dumping duty for another five
years.
Aggrieved against the aforesaid order
continuing the imposition of such duty, the
appellant filed appeals before the Tribunal which
were rejected. Against the order of the Tribunal
upholding the above findings of the Designated
Authority, the present appeals have been filed by
the appellant.
The only challenge put forth in the instant
appeals is to the non-evaluation of all the
parameters listed in para (iv) of Annexure-II.
This contention had not been urged either before
the Designated Authority or the Tribunal and,
therefore, cannot be permitted to be urged for the
first time in these appeals. Further, the records
produced before us unambiguously shows that all the
relevant parameters had been considered.
In this view of the matter, we do not find any
merit in these appeals and dismiss the same with
costs in favour of the first respondent, i.e., the
Union of India.