Customs, Excise and Gold Tribunal - Delhi
Vinati Organics Ltd. vs Designated Authority on 18 August, 2000
Equivalent citations: 2000(71)ECC848, 2001(127)ELT629(TRI-DEL)
ORDER
K. Sreedharan, President
1. Appellants herein are the manufacturers of Iso-Butyl Benzene (hereinafter referred to as IBB) in India. IBB is used in the manufacture of drugs. On 30-8-1993, appellants collectively styled as "Isobutyl Benzene Manufacturers Association" applied for Antidumping investigation against imports of IBB from China. On 30-8-1994 a provisional Anti-dumping duty of Rs. 13,089 per tonne was recommended. On 27th July, 1995 a final Anti-dumping duty of Rs. 10,634 was recommended by the Designated Authority. Above recommendations, for provisional Antidumping duty and final Anti-dumping duty were duly notified by the Government of India in the Ministry of Commerce. On 1-11-1996, appellant No. 1 filed an application for a mid-term review on the ground that the Antidumping duty imposed was not sufficient enough to prevent injury to the domestic industry. Pursuant to that application the Designated Authority, after further investigation into the entire situation, recommended an enhanced duty of Rs. 12,465 PMT. The enhanced Anti-dumping duty was notified by the Central Government on 26-6-1998. Thus, the final Anti-dumping duty imposed on IBB as per recommendation dated 27-7-1995 stood replaced by final duty recommended on 27-3-1998.
2. Clause (5) of Section 9A of the Customs Tariff Act, as amended by Act 6 of 1995 provides that Anti-dumping duty imposed shall "cease to have effect on the expiry of five years from the date of such imposition unless revoked earlier". As the period of 5 years provided by this clause was about to expire, a sunset review was undertaken to see whether continued imposition of Anti-dumping duty is called for or not. On 30th July, 1999 appellant No. 2 filed an application for Sunset Review of Anti-dumping duty on IBB. In that application prayer was made for the extension of Anti-dumping duty for a further period of 5 years. The Designated Authority was asked to consider the injury as well as threat of injury to the domestic industry on account of the import of IBB. Designated Authority initiated a sunset review as per Notification dated 2-9-1999. The period of investigation was fixed as from 1st April 1998 to 31st March, 1999. Designated Authority sent questionnaires to known exporters/producers of IBB in China and to the Chinese Embassy in New Delhi. No Chinese producers/exporters cooperated in the enquiry. Indian Importers of IBB from China also took part in the enquiry. After enquiry the Designated Authority came to the conclusion that it is appropriate to discontinue Antidumping duty imposed on imports of IBB originated in or exported from China PR as per Notification dated 28th March, 2000. Pursuant to that recommendation of the Designated Authority, Government of India issued Notification dated 28-5-2000 withdrawing Anti-dumping duty on IBB imported from China. Appellants challenge the notification by which Anti-dumping duty has been withdrawn.
3. Main argument advanced by the Learned Counsel representing the appellant, the domestic industry, was that neither the Designated Authority nor the Government of India in the Ministry of Commerce examined the possibility of recurrence of dumping and injury to the domestic industry in case of withdrawal of the duty imposed as per earlier notification. According to the Learned Counsel while recommending Anti-dumping duty, the Designated Authority categorically found -
(a) IBB originating in or exported from China PR has been exported to India below its normal value;
(b) domestic industry would suffer material injury in case the Antidumping duty in force is removed; and
(c) the injury to the domestic industry would be caused from imports from China PR in case the Anti-dumping duty in force is removed.
These findings, according to the Learned Counsel were strictly in terms of the provisions contained in the Customs Tariff (Identification, Assessment and Collection of Anti-dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995 (hereinafter referred to as the Rules). In the final findings after the sunset review, the Designated Authority observed -
(a) IBB originating in or exported from China PR has been exported to India below its normal value;
(b) domestic industry has not suffered any material injury from imports of Iso-Butyl Benzene from China PR during the period of investigation.
(c) No injury has been caused to domestic industry by the imports of Iso-Butyl Benzene originated in or exported from China PR.
None of these findings, according to the Learned Counsel, show that the Designated Authority applied its mind to the threat that may be caused to the domestic industry in case the Anti-dumping duty which is in force is discontinued. On this basis, it was argued by the Learned Counsel that the Designated Authority did not comply with the Rules in conducting final investigation. Since possible threat to the domestic industry and resultant injury that may be caused to them on account of discontinuance of Anti-dumping duty, have not been adverted to according to the Learned Counsel, final finding arrived at by the Designated Authority and the notification that was issued by the Central Government pursuant to that final finding should be quashed.
4. As per decision of the Supreme Court in Saurashtra Chemicals Ltd. v. Union of India, - 2000 (118) E.L.T. 305 (S.C.) appeal to this Tribunal lies against the determination made by the Central Government. Central Government in the instant case by Notification dated 28-5-2000 discontinued Antidumping duty imposed on IBB imported from China. That notification was issued pursuant to final finding arrived at by the Designated Authority which was notified in the Gazette dated 28-3-2000. Rule 23 of the Rules provides for the procedure for review to be conducted by the Designated Authority. Clause (1) of this Rule states that the Designated Authority shall review the need for the continued imposition of Anti-dumping duty and shall recommend to the Central Government for its withdrawal if it is satisfied that there is no justification for the continued imposition of such duty. Clause (3) of that Rule mandate that in the case of review, provisions contained in Rules 6 to 11 and 16 to 20 shall be mutatis mutandis applicable. Rule 11 deals with Determination of Injury. As per this provision Designated Authority should record a finding that import of dumped article into India causes or threatens material injury to any established industry in India. As a result of this provision, Designated Authority was bound to examine whether import of IBB from China PR will threaten material injury to any established industry in India in case the Anti-dumping duty which was in force is discontinued. As a consequence to the imposition of Anti-dumping duty on IBB imported from China domestic industry might not have suffered any injury during the present period of investigation. When Anti-dumping duty is discontinued, import of IBB from China PR is bound to be affected. As a result of that increase, will any threat of material injury to Indian industry recur? Such an examination was not undertaken by the Designated Authority. While issuing notification pursuant to the recommendation, Government of India in the Ministry of Finance also did not apply its mind to this aspect.
5. Clause (5) of Section 9A of the Act states that Anti-dumping duty imposed under this section shall cease to have effect on the expiry of five years from the date of such imposition. This provision is subject to the proviso. The proviso read -
"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."
According to this provision, even though the Anti-dumping duty imposed is to expire on the expiry of five years from the date of its imposition, it can continue beyond the said period if the Central Government comes to the conclusion that discontinuance of the duty may lead to continuation or recurrence of dumping and injury to the domestic industry. Putting it in other words, the Central Government has to form an opinion as to whether discontinuance of the Anti-dumping duty will create a situation wherein injury to domestic industry may recur or not. An enquiry in this line was not undertaken either by the Designated Authority or by the Central Government.
6. Designated Authority which gave its final finding as per notification, dated 28-3-2000 did not advert to the possible recurrence of injury to the domestic industry in case Anti-dumping duty is discontinued The Sunset Review was confined to the period from 1-4-1998 to 31-3-1999. During that period, as a result of the Anti-duping duty in force, import of IBB from China PR was at its minimum. As a result of that restricted import, the domestic industry has not suffered any material injury. This fact alone has been found by the Designated Authority in the final finding on 28-3-2000. A situation that may arise on the discontinuance of Anti-dumping duty was not adverted to by the Designated Authority.
7. Relevant matters which were required to be gone into by the Designated Authority and the Central Government as per Rules were not adverted to or examined by them. A possible injury that may be caused or threat of injury in case of the discontinuance of the Anti-dumping duty was never considered by the Government of India or the Designated Authority. On this short ground the notification issued by the Central Government cannot be said to be one issued in conformity with the provisions contained in the Rules.
8. Learned Counsel representing the importers of IBB from China PR tried to sustain the notification on the ground that the records maintained by the Designated Authority will show that the landed value of IBB was higher than the fair selling price found by the Designated Authority. This argument, though attractive, cannot be of any help to the importers on account of the fact that the landed value happened to be much higher than the fair selling price because of the Anti-dumping duty that was in force. This we say because the Designated Authority has not stated anywhere in the final finding that discontinuance of Anti-dumping duty will not create possibility of any injury being caused to the domestic industry in future.
9. In view of what has been stated above, we allow this appeal and quash the notification issued by the Government of India in the Ministry of Finance on 28-5-2000 discontinuing the levy of Anti-dumping duty on IBB imported from China PR.