Bombay High Court
Mahle Anand Thermal Systems Private ... vs The Union Of India Through Joint ... on 10 August, 2022
Author: K.R. Shriram
Bench: K.R. Shriram
Digitally
signed by
MUGDHA M
MUGDHA PARANJAPE
M Date:
PARANJAPE 2022.08.19
12:37:19 1 432-WP 604-21.doc
+0530
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO.604 OF 2021
MAHLE ANAND Thermal Systems Private Limited ... Petitioner
Vs.
The Union of India, Through Joint Secretary,
Ministry of Commerce, Department of Commerce
& Ors. ... Respondents
-------
Mr. Sriram Sridharan for Petitioner.
Mr. Pradeep Jetly, Senior Advocate a/w. Mr. J.B. Mishra and Ms. Sangeeta
Yadav for Respondents.
-------
CORAM : K.R. SHRIRAM &
A.S. DOCTOR, JJ.
DATED : 10th AUGUST 2022
P.C. :
1. Petitioner is a company registered under the Companies Act, 1956 and engaged inter alia in the manufacture of heat exchangers including radiators, charge air coolers, condensers, oil coolers, heater cores, evaporators, heat ventilation and air conditioning (HVAC) systems and parts of automobiles. Petitioner used to import the following products from China PR for use and manufacture of the above products :-
a) Aluminium Manganese - Silicon based alloy, Clad Aluminium foil classifiable under Heading 76.07 of the Customs Tariff; and Mugdha 1 of 12
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b) Aluminium Manganese - Silicon based alloy, Unclad or non-clad Aluminium foil under Heading 76.07 of the Customs Tariff.
2. Petitioner has approached this Court challenging the insistence of Respondent No.4, The Commissioner of Customs (Nhava- Sheva) for payment of anti-dumping duty on import of unclad/non-clad aluminium foil from China PR.
3. Respondent No.5, the Directorate General of Trade Remedies (DGTR) had initiated an investigation vide Notification dated 15 th December, 2015 with respect to levy of anti-dumping duty on import of aluminium foil from China PR on a Petition filed by the domestic industry. During the investigation, various exporters as well as importers represented their case before Respondent No.5, so also Petitioner as an interested party. It was specifically requested by Petitioner to exclude clad as well as unclad or non-clad aluminium foils which are meant for use in automobile industry from the scope of the investigation because these goods were not produced or manufactured in India and hence, there will be no question of injury to the domestic industry. Based on the representations, domestic industry agreed to exclude both clad as well as unclad/non-clad aluminium foils from the purview of the investigation Mugdha 2 of 12 3 432-WP 604-21.doc itself since the said imported goods were not manufactured in India. As stated in the Petition, these goods have been exempted from levy of safeguard duty vide Notification dated 19 th June, 2009. The investigation culminated into issuance of Final Findings dated 10 th March, 2017, copy whereof is annexed at Exhibit 'B' to the Petition, by Respondent No.5 with respect to levy of additional anti-dumping duty on import of aluminium foil from China PR. The Final Findings also record the acceptance of the domestic industry to exclude the following products from scope of the investigation :
"Aluminium - Manganese - Silicon based and/or clad Aluminium
- Manganese - Silicon based alloys, whether clad or unclad: with post brazing yield strength greater than 35 MPA, falling under tariff heading 7607 for use in heat exchangers including radiators, charge air coolers, condensers, oil coolers, heater cores, evaporators, heat ventilation and air conditioning (HVAC) systems and parts thereof"
4. Thereafter, the Central Government through Ministry of Finance, Department of Revenue issued a Notification No.23 of 2017 dated 16th May, 2017 levying anti-dumping duty on the import of aluminium foil from China PR. This Notification excluded certain goods from levy of anti-dumping duty in light of the findings dated 10 th March, 2017 referred to earlier issued by Respondent No.5. One of the goods excluded from levy of anti-dumping duty is as under :-
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"Note :
'Aluminium Foil' for the purpose of this notification means "Aluminium Foil whether or not printed or backed with paper, paper board, plastics or similar packing materials of a thickness ranging from 5.5 micron to 80 micron."
The description of goods does not include the imports of the following :-
(i) ...
(ii) ...
(vii) Clad with compatible non-clad Aluminium Foil : Clad
with compatible non-clad Aluminium Foil is a corrosion- resistant aluminium sheet formed from aluminium surface layers metallurgically bonded to high-strength aluminium alloy core material for use in engine cooling and air conditioner systems in automotive industry; such as radiator, condenser, evaporator, intercooler, oil cooler and heater' from levy of ADD."
5. It is Petitioner's case that based on the said exclusion in the Notification No.23/2017, Respondent No.4, the Commissioner of Customs, JNPT assessed all the imports of clad aluminium foil from China PR without payment of anti-dumping duty. The consignments of unclad or non-clad alluminum foils, however, were subjected to levy of anti- dumping duty by Respondent No.4 on the ground that exclusion (vii) quoted above was only limited to clad aluminium foil, even though, both clad as well as unclad/non-clad aluminium foil were excluded from the scope of the investigation from Respondent No.5. Petitioner's representation and explanation that both clad as well as unclad/non-clad Mugdha 4 of 12 5 432-WP 604-21.doc aluminium foil were expressly excluded from the scope of the investigation and final findings of Respondent No.5 at the request of the domestic industry itself as there was no injury caused to the domestic market went unheeded. This is despite a clarification issued by Respondent No.5 by a letter dated 1st February, 2018 in effect confirming the stand of Petitioner. Paragraphs 4, 5, 6 and 7 of the said letter dated 1 st February, 2018 reads as under :-
"4. In the aforesaid final findings read with the customs notification, eight (8) exclusions have been granted from the product scope. The exclusion (vii) as given in the aforesaid notification is worded as follows :-
Clad with compatible non clad Aluminium Foil : Clad with compatible non clad Aluminium Foil is a corrosion-resistant aluminium sheet formed from aluminium surface layers metallurgically bonded to high-strength aluminium alloy core material for use in engine cooling and air conditioner systems in automotive industry; such as radiator, condenser, evaporator, intercooler, oil cooler and heater.
5. The aforesaid exclusion was granted as the domestic industry had admitted that it could not produce the above products, namely i) clad aluminium; and ii) compatible unclad aluminium. This is also recorded in the final findings at several places, extracts of which are given below:
ii. Exclusion accepted by the domestic industry :
c. Clad with Non Clad Aluminium - 'Aluminium - Manganese - Silicon based and/or clad Aluminium - Manganese - Silicon based alloys, whether clad or unclad : with post brazing yield strength greater than 35 MPA, falling under tariff heading 7607 for use in heat exchangers including radiators, charge air coolers, condensers, oil coolers, heater cores, evaporators, heat ventilation and air conditioning (HVAC) systems and parts thereof.
d. Some interested parties require clad with compatible non clad aluminium foil which is used in heat exchangers used specifically only in radiators in vehicles and engines in Mugdha 5 of 12
6 432-WP 604-21.doc cooling systems. This is excluded by petitioner.
6. Further, Para 79 clearly mention that the following is excluded from the scope of PUC.
Aluminium - Manganese - Silicon based and/or clad Aluminium - Manganese - Silicon based alloys, whether clad or unclad: with post brazing yield strength grater than 35 MPA, falling under tariff heading 7607 for use in heat exchangers including radiators, charge air coolers, condensers, oil coolers, heater cores, evaporators, heat ventilation and air conditioning (HVAC) systems and parts thereof.
7. The Final Finding is Comprehensive and the exclusion is candidly mentioned in relevant portions of the Final Findings."
6. As Respondent No.4 continued to levy anti-dumping duty on consignments of unclad or non-clad aluminium foil, Petitioner had no choice but to pay the duty under protest/issue bank guarantees and to clear the goods. It is also averred in the Petition that Petitioner's imports of the same products from other ports, namely, ICD Talegaon, ICD Patparganj, Delhi Airport and Mumbai Seaport were cleared without the Customs Department insisting on levy of anti-dumping duty.
7. No reply has been filed though the Petition has been served more than a year ago and time was granted on 11 th February, 2021 to file reply by 31st March, 2021.
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8. Considering the nature of the dispute, with the consent of the parties, we decided to dispose this Petition at this stage itself.
9. Section 9(A) of the Customs Tariff Act, 1975 provides for anti- dumping duty on dumped articles. Section 9(B) of the Customs Tariff Act, 1975 provides for situations where no levy under Section 9(A) can be imposed. Section 9(B) reads as under :-
"9B. No levy under section 9 or section 9A in certain cases (1) Notwithstanding anything contained in section 9 or section 9A, -
(a) no article shall be subjected to both countervailing duty and anti-dumping duty to compensate for the same situation of dumping or export subsidization;
(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) under sub-section (2) of each of these sections, on import into India of any article from the specified countries unless in accordance with the rules made under sub-section (2) of this section, a preliminary finding has been made of subsidy or dumping and consequent injury to domestic industry; and a further determination has also been made that a duty is necessary to prevent injury being caused during the investigation:
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PROVIDED that nothing contained in sub-clauses (ii) and
(iii) of clause (b) shall apply if a countervailing duty or an anti-dumping duty has been imposed on any article to prevent injury or threat of any injury to the domestic industry of a third country exporting the like articles to India;
(c) the Central Government may not levy -
(i) any countervailing duty under section 9, at any time, upon receipt of satisfactory voluntary undertakings from the Government of the exporting country or territory agreeing to eliminate or limit the subsidy or take other measures concerning its effect, or the exporter agreeing to revise the price of the article and if the Central Government is satisfied that the injurious effect of the subsidy is eliminated thereby;
(ii) any anti-dumping duty under section 9A, at any time, upon receipt of satisfactory voluntary undertaking from any exporter to revise its prices or to cease exports to the area in question at dumped price and if the Central Government is satisfied that the injurious effect of dumping is eliminated by such action.
(2) 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 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."
10. The portion which is relevant to the Petition at hand is Sub- clause (iii) of Clause (b) of Sub-section (1) of Section 9(B). This provides that the Central Government shall not levy any anti-dumping duty under Sub-section (2) of Section 9(A) on import into India of any article from the specified countries unless in accordance with the rules made under Sub-section (2) of Section 9(A), a preliminary finding has been made of subsidy or dumping and consequent injury to domestic industry, and a Mugdha 8 of 12 9 432-WP 604-21.doc further determination has also been made that a duty is necessary to prevent injury being caused during the investigation. As could be seen from the averments in the Petition as well as the Rules, the finding has to be given by the Directorate General of Anti-Dumping and Allied Duties in the Department of Commerce, Ministry of Commerce and Industry, Government of India. In such a preliminary finding to be made, before anti-dumping duty is levied by the Government of India the following pre- conditions have to be met :-
(a) it has to be an import into India;
(b) of an article from a specified country;
(c) there has to be a preliminary finding of subsidy or dumping given in the country of export;
(d) that such a subsidy or dumping would result in consequent injury to domestic industry; and
(e) a further determination that a duty is necessary to prevent injury being caused during the investigation.
11. Therefore, unless these pre-conditions are complied with, the Central Government shall not levy any anti-dumping duty. Admittedly, there is no such preliminary finding for clad or unclad or non-clad Mugdha 9 of 12 10 432-WP 604-21.doc aluminium foil. On the contrary, the report issued by the Directorate General of Anti-Dumping and Allied Duties on 10 th March, 2017, provides the following exclusions have been accepted by the domestic industry :-
"c. Clad with non clad Aluminium - 'Aluminium - Manganese -
Silicon based and/or clad Aluminium - Manganese - Silicon based alloys, whether clad or unclad : with post brazing yield strength greater than 35 MPA, falling under tariff heading 7607 for use in heat exchangers including radiators, charge air coolers, condensers, oil coolers, heater cores, evaporators, heat ventilation and air conditioning (HVAC) systems and parts thereof.
d. Some interested parties require clad with compatible non clad aluminium foil which is used in heat exchangers used specifically only in radiators in vehicles and engines in cooling systems. This is excluded by petitioner."
12. Of course, in the Notification issued being Notification No.23 of 2017 the description of the goods not included in the goods on which anti-dumping duty is leviable is worded as under :-
"(vii) Clad with compatible non-clad Aluminium Foil : Clad with compatible non clad Aluminium Foil is a corrosion-resistant aluminium sheet formed from aluminium surface layers metallurgically bonded to high-strength aluminium alloy core material for use in engine cooling and air conditioner systems in automotive industry; such as radiator, condenser, evaporator, intercooler, oil cooler and heater."
13. Subsequently, there is a clarification issued by the Directorate General of Anti-Dumping and Allied Duties on 1 st February, 2018 which is Mugdha 10 of 12 11 432-WP 604-21.doc quoted earlier. Therefore, it is quite clear that clad as well as clad with compatible non-clad or unclad aluminium foil has been excluded from anti-dumping duty. Respondent No.4 therefore was not justified in insisting on payment of anti-dumping duty for clearance of unclad or non- clad consignment of aluminium foil, more so, when the same product is allowed to be imported from other ports without insisting on payment of levy of anti-dumping duty.
14. In view of the above, we allow the Petition in terms of prayer clauses (a1) and (e) and the same read as under :-
"(a1) that this Hon'ble Court be pleased to issue a writ of Mandamus or a writ in the nature of Mandamus or any other writ, order or direction under Article 226 of the Constitution of India declaring that levy and collection of ADD on unclad or non-clad aluminium foils for automobile industry imported from China PR in terms of Notification No.23/2017-Cus.(ADD) dated 16.05.2017, is incorrect and contrary to Section 9A read with 9B(b)(iii) of the Customs Tariff Act, 1975 and read with paragraph(s) 9(ii)(c), 12, 31, 79 and 136(xlix) of Final Findings dated 10.03.17.
(e) that this Hon'ble Court be pleased to issue a writ of Mandamus or a writ in the nature of Mandamus or any other writ, order or direction under Article 226 of the Constitution of India ordering and directing the Respondents by themselves, their officers, subordinates, servants and agents to forthwith grant refund of Anti-
dumping Duty paid by the Petitioner under protest on import of unclad/non-clad aluminium foil from China PR in terms of Notification No.23/2017-Cus. (ADD) dated 16.05.2017 during the period from August 2017 to December 2018;"
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15. Petition disposed with no order as to costs.
16. Respondent No.4 to refund all amounts paid by Petitioner with applicable interest in accordance with law/return all bank guarantees submitted by Petitioner duly cancelled within eight weeks of receiving a copy of this order.
(A.S. DOCTOR, J.) ( K.R. SHRIRAM, J.)
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