Customs, Excise and Gold Tribunal - Delhi
H And R Jhonson (India) Ltd. vs Designated Authority Ministry Of ... on 19 May, 2005
Equivalent citations: 2005(185)ELT125(TRI-DEL)
ORDER
R.K. Abichandani, J. (President) Brief facts
1. This appeal has been filed under Section 9C of the Customs Tariff Act, 1975, challenging the final findings of the Designated authority given on 30.1.2004 and the Notification No. 80/2004-Cus. Dated 28.7.2004 accepting the recommendation that o anti-dumping duty be imposed on imports of vitrified/porcelain titles falling under Chapter 69 of the Tariff Act, produced by M/s. Nanhai Shagyuan Oulin Construction Co. Ltd. China PR (now known as M/s. Foshan Qualin Construction Ceramic Ltd.) and exported from M/s. Prestige General Trading, Dubai, UAE, After the Notification of the final findings was issue on 4.2.2003 in which the Designated Authority came to the conclusion that vitrified/porcelain tiles were exported by UAE and China PR to India below the "normal value", resulting in dumping, that the domestic industry had suffered material injury, and that, the injury had been caused cumulatively by the imports from the subject countries, and recommended imposition of anti-dumping duty on all imports of vitrified/porcelain tiles from these countries in order to remove the injury to the domestic industry, at the rates of US$ 8.28 per sq. mtr. in respect of exporters/producers from china PR and US$ 0.74 for M/s. PAK Ceramics of UAE, and US$ 5.54 for other exporters/producers of UAE.
1.1 An application (bearing the dated 28.3.2003), came to be made for initiation for New Shipper Review by Nanhai Shaguyan Qualin Construction Ceramic Co. Ltd. (hereinafter referred to as Nanhai Construction Ceramic Co. Ltd. (hereinafter referred to as Nanhai) producer from China PR, which was forwarded to the Designated Authority by the advocate of Nanhai under his letter dated 15.3.2003 (the application bearing the date 28.3.2003). After this application was forwarded, Customs Notification No. 73/2003 dated 1.5.2003 was issued under Section 9A(1) of the Tariff Act, on the basis of the final findings dated 4.2.2003. The Public Notice came to be issued in respect of initiation of new shipper review on 23.5.2003. Due to the pendency of these proceedings, Customs Notification No. 98/2003 dated 1.7.2003 exempting Nanhai from payment of anti-dumping duty till the review was completed was issued under the proviso to Rule 22(2) of the Customs Tariff (identification, Assessment and Collection of Anti-dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1955 (hereinafter referred to as the Rules of 1995). It was made clear in paragraph 3 of the Notification that in case of recommendation of anti-dumping duty after completion of the said review by the Designated Authority, the importer shall be liable to pay the amount of such anti-dumping duty recommended on review and imposed on all imports into India of vitrified/porcelain tiles from Nanhai the producer from China and M/s. Prestige General Trading (hereinafter referred to as Prestige), UAE as exporter from Dubai, from the date of initiation of the said review.
2. For the purpose of the review proceedings under Rule 22 the Designated Authority made "investigation" for the period from 1.7.2002 to 30.6.2003 for the purpose of determination of dumping. After taking into consideration the views of the interested parties at/after the initiation and their examination including the views of domestic industry, producer Nanhai of China and exporter Prestige of UAE, the Designated Authority came to a finding that the exporter/producer had not exported the product under consideration during the period of investigation, as the production of vitrified/porcelain tiles was started in April 2002, much after the period of investigation (which obviously referred to investigation prior to the notification which was issued under Section 9A(1) of the Act) and declared that they were not elated to any of the exporter or producer in the exporting country who were subject to the anti-dumping duties. It was observed that during the investigation, the Authority did not find any evidence of relationship with any of the exporters and producers in China PR who are subject to anti-dumping duty. It was, therefore, held that the investigation was initiated in line with provisions of Rule 22 of the said rules which was in conformity with Article 9.5 of the WTO Anti-Dumping Agreement. The designated authority after dealing with the contentions raised by the interested parties arrived at the ex factory "normal value" of the products, calculated ex-factory export price during the period of that investigation, worked out the dumping margin, and made recommendations to the effect that the export price of vitrified/porcelain tiles exported to India produced by Nanhai of China PR (now known as Foshan Qulian Construction Ceramic Ltd.) and exported from Prestige of Dubai, UAE was above its normal value during the period of investigation and therefore, no anti-dumping duty be imposed on the imports of vitrified/porcelain tiles falling under Chapter 69 of the Customs Tariff Act, 1975. By the impugned Notification No. 28/2004 dated 28.7.2004 the Central Government, in exercise of the powers conferred by sub-section (1) read with sub-section (5) of Section 9(A) of the said Act read with Rules 18, 20 and 22 of the Rules of 1995, on the basis of the said final findings of the designated authority amended the Notification No. 73/2003 dated 1.5.2003 by inserting a proviso that no antidumping duty shall be imposed on the imports into India of subject goods produced by Nanhai of China and exported by Prestige, UAE. The amendment was made effective from the date of the issue of the notification ordering provisional assessment i.e. 1.7.2003.
Arguments on behalf of the Appellants:
3. It was contended by the learned Senior Advocate appearing on behalf of the appellant that there were five conditions precedent for initiating review under Rule 22 of the said Rules of 1995. These were:-
(i) Definitive anti-dumping duties must be in place before a review under Rule 22;
(ii) Review of the ADD was required to be 'periodical' as envisaged under Rule 22;
(iii) Exporter of the exporting country had to make the application for New Shipper Review;
(iv) Country of export was relevant for determining the 'normal value', 'export price' and the 'dumping margin'; and
(v) Exporter/producer in the country of export was required to show that he was not "related" nor did he export during the period of investigation.
It was submitted that the application in the present case was made by Nanhai before the issuance of the final notification imposing the anti-dumping duty under Section 9A(1) of the Act. The earlier application which was in similar terms had met an abrupt end in view of the letter dated 11.12.2002 of the Central Government. It was contended that the second application by the same producer i.e. Nanhai should have met the same fate, because, the final findings made earlier than the second application wee only recommendatory. The application for review under Rule 22 was, therefore, non-est, as there was no anti-dumping duty imposed on the date when that application was made. He pointed out, by reading both the applications of Nanhai, that they were identical and submitted that an identically worded second application was entertained though there was no change in circumstances after the first application was disposed of. The learned counsel argued that the purchase order, which was attached to the application and on the strength of which the review power under Rule 22 was invoked, clearly indicated that Prestige, the UAE trader, had purchased the goods from the producer, Nanhai of China. He, therefore, submitted that exports in reality, were made from UAE and not from China, and therefore, the producer of China could not have made the New Shipper Review application. He submitted that the language of Rule 22 precluded the designated authority from exercising any suo moto power. According to him, the expression "periodical review" in Rule 22, was consciously used and review undertaken just 22 days after the notification, was not a periodical review. He submitted that the words "periodical" was used in Rule 22 to mean periodic i.e. at regular time intervals. He argued that the exporter from the UAE, who never made an application under Rule 22, did not "show" that he was not related to the exporter/producer of the country of export. He submitted that power of review under Rule 22 cannot be exercised if there is no application by an appropriate person which in the present case was Prestige of Dubai and not nanhai of China, because, Prestige of UAE Dubai had bought the goods from the producer. He also argued that physical exportation by the Dubai exporter was shown, and therefore, there was no warrant for initiating any review undue Rule 22 in respect of either the exporter or the producer as none of the requirements under Rule 22 were satisfied. The learned Senior Advocate for the appellant then argued that the entire proceedings were vitiated because the domestic industry was denied a fair opportunity to defend itself due to all the vital evidence supplied by the New Shipper being treated as confidential. He submitted that the designated authority was requested to supply the non-confidential version of the documents, but, even the non-confidential information was not supplied in sufficient detail. He pointed ut from the record, various communications addressed to the designated authority seeking information on matters which ought not to have treated as confidential. He argued that the information which by its nature is not confidential cannot be treated as confidential and the designated authority must use its discretion under Rule 7 of the said rules, and not mechanically accept the stand taken by the party supplying the evidence. Referring to Rule 7, he submitted that the expression "not being satisfied as to its confidentiality", clearly indicated that the designated authority was not required to blindly accept the desire of the party submitting evidence to treat it as confidential, and was required to apply its mind and on objective material decide whether such information should be treated as confidential or not. He argued that this was more so because the determination under Rule 7 was subject to a judicial review, by a full-fledged judicial Tribunal, which was akin to a judicial review undertaken by a High Court. It was submitted that the party should given reasons to satisfy the designated authority as to why the information for which the confidentiality is claimed, is not to be disclosed. In short, he submitted that there was non-application of mind by the Designated authority on the confidentiality issue.
3.1 In support of his contentions, the learned Senior Advocate relied on the following decisions and material:
(a) Decision of the Supreme Court in Snow Wile Industrial Corporation v. Collector of Central Excise, reported in 1989 (41) ELT 360 (SC), was cited to point out that in paragraph 7 of the judgment the Supreme Court had observed that it was well settled that whether there was an agreement for sale or an agreement of agency, must depend upon the facts and the circumstances and the terms of each case to be judged in the background of the totality of the circumstances. All the terms and conditions should be properly appreciated and a mere description that a personal was a selling agent was not conclusive.
(b) Hallsbury's Laws of England, Fourth Edition Valume 1(2), wherein the decision of W.T. lamb & Sons v. Goring Brick Co. Ltd. (1932) 1KB 710 at 717 (Court of Appeal) was cited to placed reliance on the following excerpt from para 2, page 5:-
"In addition to meaning a person employed to create contractual relations between two parties, the word 'agent' is used in at least two other senses. Thus it is often used in business in a non-legal sense to refer to a distributor, as in the case of the appointment of a 'sole-selling agent', 'exclusive agent' or 'authorized agent'. The relation so established between the appointor and appointee is usually that of 'vendor' and purchaser and no contractual relationship is established between the appointor of the agent and third parties by the sale of goods by the so-called agent to those third parties."
(c) Black's law dictionary defining the meaning of 'Periodic'-Recurring at fixed intervals to be made or done, or to happen at successive periods separated by determined intervals of time, periodic payments of interest on a bond or periodic alimony payments.
(d) Stroud's Judicial Dictionary defining "Periodic Payments"-"apportionable under the Appointment Act 170(section 35), section 2, 'must be payments periodically, that is, at fixed times from some antecedent obligation, and not at variable periods at the discretion of individuals' (per Selborne C. Jones v. Ogle 8 Ch.192)"
(e) The Shorter Oxford English Dictionary defining "periodic"- "coming round at certain intervals; " of pertaining, or proper to the revolution of a heavenly body in its orbit,".
(f) Complete Wordfinder defining "Periodic"- Appearing or occurring at regular intervals.
(g) The Random house dictionary defining "Periodic" -(i) recurring at intervals of time and (ii) occurring or appearing at regular intervals Arguments on behalf of the Designated authority
4. The learned counsel appearing for the designated authority contended that no pre-authenticated enquiry was contemplated under Rule 22 of the said Rules like the one contemplated under Rule 5 for initiating investigation. Therefore, before initiation of review it was not determined in the present case, whether the new shipper-producer/exporter was "related" within the meaning of Rule 22. He, however, contended that at no point of time, the domestic industries raised the question whether the new shipper/producer/exporter was not so "related". He pointed out that notice was sent to all the interested parties including seven exporters of China and UAE. The notice was widely circulated to about 26 interested parties. The officers had visited China and verified the existence of the producer and examined their record. They also verified that they were manufacturers of the product. On confidentiality aspect, he submitted after verifying the record that no formal decision was taken by the designated authority. Confidentiality was claimed by the parties and such claim of confidentiality was straightway accepted. He, however, submitted that no prejudice had been caused to any interested party since the public notices as well as the non-confidential summaries carried all the required information.
Arguments on behalf of the Contesting Respondents
5. The learned counsel appearing for the respondents New Shippers and the importer, supporting the final findings and the impugned notification submitted that the New Shipper Review was provided for in Rule 22 in consonance with the International Agreements and Understandings and was designed to safeguard the interests of those who were not dumping goods in India by their exports. he submitted that during the course of the investigation under Rule 5 before the imposition of the anti-dumping duty under Section 9A(1), no Chinese exporter had co-operated and the designated authority had taken the information submitted by the domestic industry as a gospel truth. He submitted that the period under consideration for the purpose of New Shipper Review under Rule 22 was from 1.7.2002 to 30.6.2003, and the designated authority had given wide publicity by issuing a public notice to the proposed review. A large number of transactions both domestic as well as exports that had taken place during the period of investigation under review were brought to the notice of the designated authority. He submitted that the New Shippers had claimed confidentiality under Rule 7 of the said Rules by their letter dated 16.8.2003 to which they were entitled, and non-confidential version containing sufficient information was supplied to the interested parties. According to him, the designated authority rightly treated the information as confidential in consonance with the provisions of Rule 7. He submitted that the material supplied to the domestic industry was sufficient for it to defend itself on the subject matter of review. He submitted that the information about domestic sales was supplied to the designated authority to enable it to determine the individual margins. The learned counsel argued that the quantity of export by the applicant New Shipper was more than 15 lac sq. mtrs. of tiles which was more than significant to merit a review. He submitted that even between. July 2002 and 23rd May 2003 when the review was initiated, the New Shipper had exported large quantities of its product to India. The large exports between 1.7.2002 to 30.6.2003 during the period of investigation showed that New Shipper was a genuine producer/exporter of the product in question. The learned counsel further argued that the material was exported from China and not from Dubai, as per the Bill of Lading of China. The New Shipper, Nanhai was the exporter through UAE person Prestige. The country of export being China, it cannot be said that the producer Nanhai could not have applied for review under Rule 22. Referring to the relevant provisions of the Tariff Act and the Rules of 1995 the learned counsel argued that the applicant under Rule 22, was only required to make a "self declaration" to the effect that, the applicant was not "related" to any exporter/producer in the country of export. The fact that the applicant was not so "related" was never challenged despite the fact that in the application, the New Shipper made a clear assertion that it was not a "related" person within the meaning of Rule 22. He submitted that Rule 22 did not contemplate any formal application unlike Rule 5(1), and the designated authority could have, as he did, validly acted upon the review application pending on the date of Notification issued under Section 9A(1) of the Act. The learned counsel further argued that periodic review contemplated by Rule 22 was meant to ensure that cases of genuine new exporters would be promptly taken up for review so that they are not put to disadvantage unjustly. The review under Rule 22 could, according to the learned counsel, be taken up as and when necessary in consonance with the principle underlying the GATT, of encouraging free trade. There was a clear finding reached, according to him, by the designated authority, that it did not find any evidence of relationship. He contended that there were no pre-conditions under Rule 22 as wee sought to be urged, and even in the absence of a formal application the designated authority can review a New Shipper's case and can give relief to an innocent "new shipper" who did not indulge in dumping. It was also contended that the expression "anti-dumping duty" in Rule 22(1) included even a provisional anti-dumping duty which could be imposed under Section 9A(2) of the said Act and therefore, the application of the New Shipper was validly made after the imposition of anti-dumping duty under Section 9A(2). The learned counsel then argued that when an information is by law or custom treated as confidential and it is so claimed, the designated authority will be bound to treat it as such. Only when information is accessible in the public domain, it may not be treated as confidential. He finally argued that even if initiation of the review was faulty that will not vitiate the material gathered, which showed that there was no dumping done by the applicant.
5.1 In support of his submissions, the learned counsel placed reliance on the following decisions and material:-
(a) Decision of the Supreme Curt in Pratap Singh and Anr. v. Director of Enforcement, Foreign Exchange Regulation Act and Ors. reported in (1985) 3 Supreme Court cases 72, was cited for the proposition that illegality of the search does not vitiate the evidence collected during such illegal search.The only requirement is that the court or the authority before which such material or evidence seized during the search and shown to be illegal is placed, has to be cautious and circumspect in dealing with such evidence or material.
(b) For pointing out that there was no periodicity, as sought to be suggested, for the exercise of the review power under Rule 22, the learned Counsel referred to the New Shipper Review Notification dated 27.04.2004 in respect of the review done at the instance of M/s. Yusua Battery Guangdong Company Ltd., China PR, pointing out therefrom that where anti-dumping duty was imposed by notification published on 2.1.2002, a New Shipper Review was entertained by initiating it under Notification dated 27.08.2002. In that case, as observed in paragraph 7 of the notification, the authority has received a request to initiated a New Shipper review of Notification dated 7.2.2001 pursuant to Rule 22 of the Anti-Dumping Rules from M/s. Yusua Battery Guangdong Company Ld., China PR which claimed that it was not related to any of the exporting producers subjected to anti-dumping measures in force with regard to the product concerned and had claimed it had not exported goods during the original period of investigation. The Authority had, prima facie, examined the evidence submitted by the Chinese producer concerned and considered it sufficient to justify initiation of review in accordance the provisions of Rule 22. It was pointed out from para 22 of the notification that the trader having exported the product under consideration, had neither joined in the petition, nor had certified that it had not exported the material in the past period of investigation, nor had it certified that it was not related to any producer/exporter who exported in the earlier POI. In fact, the trader had exported the material in the past POI and was related to a producer who had exported the material in the past POI. Without any application the trader introduced itself at the stage of questionaire response, that too without any letter of authorization, and certification. In the final findings, the Authority concluded that M/s. Yusua batter Guangdong Company Ltd. producer from China and M/s. Yusua Corporation of Japan had exported to India the product above its normal value during the period of investigation and dumping margin was de-minimis. The Authority did not, therefore, recommend anti-dumping measures as the anti-dumping margin was de-minimis.
(c) CFR Title 19, Part 351.214 was cited to point out that in the context of New Shipper Review it was provided in the U.S.A. that a request for a New Shipper Review must contain a certificate that the person requesting a review did not export subject merchandise to the United States and was not affiliated with any exporter or producer. He submitted on the strength of this provision that only certification was required and the new Shipper Reviews was not required to adduce any detailed evidence about his relationship. It was sufficient for him to certify that the was not "related" to any exporter/producer within the meaning of Rule 22.
(d) Referring to the replies given to the questions posed by the United States concerning the Notifications provided by the Government of India in the context of anti-dumping methodology, from the World Trade Organization (WTO) Document -G/ADP/W/291 / G/SCM/W/299 dated 27.2.1996, he pointed out that in answer to Question Nos. 12 & 13 India stated that Rule 22 of Anti-Dumping Rules provides for reviews of New Shippers and procedures for such reviews. Rule 22(1) states that reviews will be carried out for new exporters or producers who demonstrate that they are not related to the exporters or producers already subject to anti-dumping duties. He also pointed out that in answer to Question No. 14 referring to the expression "periodical review" in their reply India stated that no specific time-frame for new shippers review is provided. However, "periodical reviews" implies accelerated reviews.
(e) Referring to a similar document of the WTO (G/ADP/W/287/G/SCM/W/295 dated 26.2.1996 in the context of Rule 7, it was pointed out that in answer to Question No. 20 in their reply, India stated that the provisions of Rule 7(2) imply that the Designated authority in exercise of its discretion shall require the parties to supply non-confidential summaries and that Rule 7(3) governs admissibility of such information. From the said document, he pointed out that for Question Nos. 36 & 37 in their reply, India stated that the designated authority intended to deal with the new shipper reviews expeditiously, and that the term "periodic review" implies accelerated reviews. He pointed out that in answer to Question No. 38 in their reply India stated that Rule 16 of the Anti-Dumping Rules required the designated authority, before giving it's final findings, to inform all interested parties the essential facts under consideration which form the basis for its decision. It implies that the interested parties will have the opportunity to comment. From these replies, the learned counsel wanted to emphasize that the international community was satisfied about the provisions made in the India Rules and the New Shipper Review was the review which was to be undertaken as and when the issue was raised.
(f) From the World Trade Organization document dated 27.2.1996 (G/ADP/W/291 / G/SCM/W/299) he pointed out that in answer to Question No. 4 India reiterated that it intended to deal with new comers reviews expeditiously and that the term "periodical reviews" implied accelerated reviews.
6. Anti-Dumping duties are a statutory mechanism to increase the cost of selling a foreign product in the domestic market place that was originally sold for export to India at the price less than the product is sold in the domestic market of the exporting country. If foreign sales for export are less than "normal value" and result in economic injury to level the playing field. Section 9A (1) of the Customs Tariff Act, 1975, is attracted when any article is exported from any country or territory to India at less than it's 'normal value' as defined in clause (c) of the Explanation to Section 9A(1). It fixes the upper limit of anti-dumping at the 'margin of dumping', as defined in clause (a) of the Explanation so as to mean the difference between the export price and its normal value.
6.1 The price of the article exported to India will be considered to be the export price of that article under clause (b) of the Explanation. It is only when, (i) there is no export price i.e. the article is not priced or, (ii) the price of the article exported is unreliable because of association or a compensatory arrangement between the exporter and the importer or the exporter and third party, that the export price of the article may be reconstructed. Therefore, when the price of the article exported is reliable there can arise no occasion to reconstruct the export price.
6.2 In case where the price of the article exported to India is unreliable and requires to be constructed, it is required to be done on the basis of the price at which the imported articles are first re-sold to an independent buyer in the same condition. Thus, re-sale price of the subject articles to an independent buyer will be the constructed export price of that article. Until this exercise of reconstruction is adopted and it is found that the imported article is not re-sold to any independent buyer or not re-sold in the condition as imported, there is no need to reconstruct the export price by resorting to the rules made under sub-section (6) of Section 9. Ordinarily, it should be possible for the authorities to construct the export price of the article on the basis of the price at which they are re-sold unless the imports are for the consumption of the importer himself and not for re-sale.
6.3 Finding out a "normal price", as defined by clause (c) of the Explanation would, however, required a detailed exercise to ascertain the comparable price. The comparable price is the price at which the like article is sold for consumption in the country of export itself. The comparable price will have to be determined in accordance with the rules made under sub-section (6) of Section 9A, for ascertaining and determining the margin of dumping, as referred in sub-section (1) or (2) such rules may provide for the manner of identifying the articles for the purpose of the anti-dumping duty and the manner of determining the "export price", the "normal value" and the "margin of dumping", in relation to such identified articles as also for the assessment and collection of such anti-dumping duty.
6.4 The said Rules of 1995 are framed under sub-section (6) of Section 9A and subsection (2) of Section 9B of the said Act. Rule 5 of the said Rules lays down as to how the investigation to determine the existence, degree and effect of any alleged dumping shall be initiated. The principles governing investigations are enumerated in Rule 6 which requires issuance of a public notice notifying the decision of the designated authority to initiate investigation and containing adequate information on the matters enumerated therein. The designated authority has the power to call for any information from the exporters, foreign producers and other interested parties under sub-rule (4), which is required to be furnished by such persons without 30 days from the date of receipt of the notice. Sub-rule (7) of Rule 6 provides that the Designated Authority shall make available the evidence presented to it by one interested party to the other interested parties participating in the investigation. Rule 7 relates to confidential information. Since it falls for our interpretation, it is reproduced hereunder:-
"7. Confidential information:-(1) Notwithstanding anything contained in sub-rules (2), (3) and (7) of rule 12, sub-rule (4) of rule 15 and sub-rule (4) of rule 15 and sub-rule-rule (4) of rule 17, the copies of applications received under sub-rule (1) of rule 5, or any other information provided to the Designated authority on a confidential basis by any party in the course of investigation, shall, upon the Designated authority being satisfied as to its confidentiality be treated as such by it and no such information shall be disclosed to any other party without specific authorisation of the party providing such information. (emphasis added) (2) The Designated authority may require the parties providing information on confidential basis to furnish non-confidential summary thereof and if, in the opinion of a party providing such information, such information is not susceptible of summary, such party may submit to the Designated authority a statement of reasons why summarisation is not possible.
(3) Notwithstanding anything contained in sub-rule (20), if the Designated authority is satisfied that the request for confidentiality is not warranted or the supplier of the information is either unwilling to make the information public or to authorise its disclosure in a generalised or summary form, it may disregard such information."
6.5 Under Rule 8 the Designated authority is required to satisfy itself as to the accuracy of information supplied by the interested parties upon which it's findings are based, except in cases referred to in sub-rule (8) of rule 6 i.e. where any interested party refuses access to or otherwise does not provide necessary information within a reasonable period, or significantly impedes the investigation. Under Rule 9 the Designated authority may carry out investigation in the territories of other countries, if the circumstances of the case so warrant; provided that the Designated authority obtains the consent of the person concerned and notifies the representatives of the concerned government which does not object to such investigation. Rule 13 provides for levy of provisional duty which is defined in Rule 2 (e) of Section 9A to mean an anti-dumping duty imposed under sub-section (2) of the Act. Such provisional duty shall remain in force only for a period not exceeding six months or to an extended period of nine months. Final findings are required to be given by the Designated authority within one year from the date of initiation of investigation, as required by Rule 17. Such final finding, if affirmative, shall contain all information on the matter of facts and law and reasons which have led to the conclusion, and also other information as required by sub-rule (2) of Rule 17. The Central Government, within three months of the publication of the final findings by the designated authority, may impose the duty, by notification in the Official Gazette, as required by Rule 18. Such duty shall be levied only after the exporters have been given opportunity to cease exporting at dumped prices to the area concerned or otherwise give an undertaking pursuant to rule 15, as provided by sub-rule (3) of Rule 18. The anti-dumping duty levied under Rules 13 and 18 takes effect from the date of its publication in the Official Gazette, as 6.6 Rule 22 relates to the power of the designated authority to carry out a review of margin of dumping for exporters not originally investigated. Since the main controversy has centered around the interpretation of Rule 22 it is reproduced below-
"22. Margin of dumping, for exporters not originally investigated-
(1) If a product is subject to anti-dumping duties, the Designated authority shall carry out a periodical review for the purpose of determining individual margins of dumping for any exporters or producers in the exporting country in question who have not exported the product to India during the period of investigation provided that these exporters or producers show that they are not related to any of the exporters or producers in the exporting country who are subject to the anti-dumping duties on the product.
(2) The Central Government shall not levy anti-dumping duties under sub-section (1) of section 9A of the Act on imports from such exporters or producers during the period of review as referred to in sub-rule (1) of this rule:
Provided that the Central Government may resort to provisional assessment and may ask a guarantee from the importer if the Designated authority so recommends and if such a review results in a determination of dumping in respect of such products or exporters, it may levy duty in such cases retrospectively from the date of the intimation of the review."
Rule 23 also relates to review but of a different kind. It is a review by the designated authority from time to time as to the need for the continued imposition of the antidumping duty and the designated authority may recommend to the Central Government for withdrawal of the anti-dumping pursuant to such review.
7. It was contended for the Respondents New Shipper/Importer that an application under Rule 22 could be made even before the definitive imposition of anti-dumping duties under section 9A (I) when provisional anti-dumping duty is imposed under section 92(2) and therefore, the application made by Nanhai of China prior to the issuance of notification imposing anti-dumping duty under Section 9A (I) but after the provisional anti-dumping duty under Section 9A (I) but after the provisional antidumping duty was imposed under Section 9A (2) was validly made when the product was subject to anti-dumping duty within the meaning of Rule 22(I) which applies, "if a product is subject to anti-dumping duty ... " the scheme of the said Rules of 1995 indicates levy of provisional duty under Rule 13 read with Rule 2 (e), the life of which is only six months which can be extended to nine months under the 2nd provision to Rule 13. After the final findings are reached under Rule 17, the Central Government, within three months of the date of publication of final findings, may impose by Notification in Official Gazette upon importation of the article covered by the final findings, anti-dumping duty not exceeding the margin of dumping determined under Rule 17. The anti-dumping duty so imposed under Rule 18, may be levied from the date of provisional duty imposed under Rule 13. If the anti-dumping duty is lower than the provisional duty collected, the differential duty is required to be refunded to the importer under Rule 21(2). Rule 22 (1), therefore operates when the product is already subjected to anti-dumping duty under Rule 18 and the exporters/producers in the exporting country are already subjected to anti-dumping duty on the product.
7.1 The anti-dumping duty levied under rule 13 (provisional) and rule 18 takes effect from the date of publication. The imposition of provisional duty is anterior to and distinct from the anti-dumping duty properly so-called. During the currency of provisional duty there cannot arise any question of exercising the power of review which comes into play only when the product is subjected to anti-dumping duty. We consider that the term "provisional duty" is consistently used where the intention is to refer to the measures imposed before the end of the investigation process. In our view, the rules which are in conformity with the Anti-Dumping Agreement clearly distinguish between provisional measures and anti-dumping duties which term consistently refers to definitive measures. Thus, in our view, the meaning of the expression "anti-dumping duties" in rule 22 is clear, it refers to the imposition of definitive anti-dumping measures at the end of the investigative process and not provisional duty under Section 9A (2) of the said Act.
7.2 In the present case, the earlier application of Nanhai was terminated on the ground that the notification of anti-dumping duty was not yet issued and antidumping duty was not imposed under Rule 18. The subsequent application on the basis of which the review was initiated under Rule 22 though made before the notification imposing the anti-dumping duty was made after the final findings were notified under Rule 17. When the application was taken up for consideration, the notification under Rule 18 was already in force and the anti-dumping duty was already imposed on the product in question. Therefore, the question whether the new shipper was entitled to review under Rule 22 did arise for consideration after the product was subjected to anti-dumping duty. Rule 22 does not specify when the new exporter/producer could make an application and did not preclude the designated authority, unlike under Rule 5(I), from taking up the second application of Nanhai for consideration after the notification was issued under Rule 18.
7.3 Under Rule 22, there is an obligation on the designated authority to carry out a periodical review after the product is subjected to anti-dumping duty. The purpose of such review is to determine individual margins of dumping for any exporters or producers in the exporting country in question who have not exported the product to India during the period of investigation. For getting their individual margins of dumping determined, these exporters or producers must show that they are not related to any exporters or producers in the exporting country who are subject to anti-dumping duty on the product. The 'periodical review" under Rule 22 thus differ from the review, from to time, of the need for the continue imposition of the antidumping duty under Rule 23 which may lead to its withdrawal when there remains no justification for its continuance. The designated authority can periodically exercise that power coupled with duty, as and when the occasion to determine such individual margins of dumping arise. Ordinarily, however, when an application is moved under Rule 22, an obligation to undertake the periodical review arises. The "period of investigation" would be a period much prior to the imposition of the anti-dumping duty. Therefore, the proximity of the time, when application under Rule 22 is made, would not be judged by reference to the date of the notification imposing the antidumping duty for contending that the application is made rather too soon to make a periodical review possible. In a periodic review the designated authority has to review the situation in the context of the exporters and producers who were not in picture during the period of investigation under Rule 5 relatable to the notification under Section 9A(I) but have entered the field later. Such review may lead to determination of different margins of dumping in respect of exporters and importers under review, if the investigation so warrants.
7.4 The words "periodical review" in rule 22(I) have to be viewed in the context of the words "provided that these exporters or producers show.....". and the nature of review which is confined to determining individual margins. Therefore, the review power is initiated to relieve the new exporters who may not in fact be dumping the product that is already subject to the anti-dumping duty which applied even in case where the exporter/producer did not dump the product in the Indian market. The periodicity of view under Rule 22 is linked with the new shipper's seeking initiation of review by showing that such new shippers were eligible to seek the review. Case of only those who did not export the product to India during the period of investigation under Rule 5 are required to be reviewed for determining their individual dumping margins if they are not 'related'. Rule 22 does not specify and periodic cycle for exercise of the power to review such cases since the frequency of review will depend upon whenever the designated authority is moved by the exporter or producer of the exporting country for such review.
7.5 The nature of review under rule 22 is case specific with a defined purpose of determining individual margins for such exporter/producer, and no full-fledged investigation, as is required before imposing the anti-dumping duty, is contemplated by rule 22. The proceedings under Rule 22 are initiated after it is shown to the designated authority that the applicant-producer/exporter is "related" person to any such producer/exporter in the exporting country. The applicant-exporter/producer has to demonstrate before the designated authority that such exporter/producer is not related to any exporter/producers in the exporting country who exported during the period which was the subject matter of the investigation under Rule 5. The word "related" is not confined to familiar relations but would encompass other relations through whom the anti-dumping duties already imposed might be circumvented, for example, by creating a "shell" company or appointing a sole agent for the product. The word "show" is not meant to prescribe just a formality of a bare assertion by the applicant that the applicant is not "related" but is meant to incorporate in rule 22 an anti-circumvention measure by alerting the designated authority to examine first whether potentially circumventing relationship exists. The requirement on the part of the new shippers to show that they are not "related" is a corresponding obligation on the part of the designated authority to verify that there is no circumvention of antidumping duty being attempted by invoking the review.
7.6 The expression "provided these exporters or producers show that they are not related to any of the exporters/producers in the exporting country" in rule 22, clearly implies that the designated authority has to first be satisfied that the applicant-exporter/producer is not so "relate". The designated authority should be conscious of the possibility of the abuse of the "New Shipper" rules. An exporter subject to a high-dumping duty may set up a new "shell" company in the exporting country to act as a 'new shipper', and in some cases, also a "shell' company in India to act an importer. Such new shipper may, by moving an application under rule 22 request the designated authority to undertake a 'New Shipper Review' of its export sales price after shipping a few orders to Indian market as a new shipper. The undertaking of such review under rule 22 would qualify the importer for the privilege of being subjected to provisional duty and a guarantee under the proviso to rule 22(2), in lieu of making a cash-deposit of high anti-dumping duty rate. This privilege continues while the detailed investigation proceeds. In the interim period, such "new shipper" may then ship a large volume of product. At the same time, other shippers may attempt to counterfeit the new shipper's identity by submitting counterfeit invoices in order to take advantage of the privileges under the proviso to rule 22(2). While the investigation under rule 22 goes on, the shippers or importers can operate for several months and avid the requirement of anti-dumping duty deposit. When the designated authority completes the investigation it publishes the final results of the review formed on the basis of review of sales for export and import activity over the period. If the new shipper cannot substantiate that it qualifies for lower anti-dumping rate than the anti-dumping duty imposed, the anti-dumping duty will be collected on all the previous entry transactions from such new shipper. Subsequently, the shipper or importer or both may disappear never having any intention of paying the antidumping duty increases. Many times there would be a revenue short fall inadequately secured by the provisional duty or guarantee under the provision to rule 22(2) and the deposit of anti-dumping duty which but for the initiation of review would have been made. In such cases, the Government may have to write off the uncollectible debt. all parties lose. The domestic industry that sought to be protected, the law abiding exporters/producer of the exporting country and the legitimate importers in India, all continue to be injured by these fraudulent trade practice. all the while, those who illegally export and import obviously benefit. We have referred to this real possibility of the abuse of the provisions of rule 22 just to emphasis the role that the designated authority has to play while exercising its power of review under rule 22. The designated authority must rule out any possibility of abuse by an adequate investigation into the genuineness of the 'new sippers' and their not being related to the exporters or producers in the exporting country who are subject to the anti-dumping duty on the product. The very initiation of review under rule 22 for determining the individual margins of the new exporters/producers would depend upon their showing that they are not "related". This is clear from the words ".......... Provided that these exporters or producers show that they are not related....."
Therefore, until they show that they are not "related", the designated authority will normally not initiate the review. Having regard to the possibility of abuse of the "New Shipper" review rule, the designated authority is bound to consider whether the new shipper seeking review under rule 22 is "related" or not.
7.7 The learned senior advocate for the appellant argued that the real exporter was Prestige of Dubai, UAE to whom porcelain tiles were to be sold under the purchase order by Nanhai for export from China to the importer in India. Therefore, it was necessary for the purpose of Rule 22 for the designated authority to determine whether the UAE exporter Prestige was related to any producer/exporter in the country of export. He submitted that the real exporter was Prestige of UAE because the goods were to be sold to it under the purchase order.
7.8 There appears to be no prior decision taken by the designated authority under rule 22 before initiating the review by issuance of the public notice dated 23.5.2003. In the said notice, it is made clear t the outset, whole describing the "subject" of the notice, that the review was initiated at the instance of the producer, Nanhai of China and the exporter, Prestige of Dubai. The period of review was 1.7.2002 to 30.6.2003. In paragraph 4 of the notice it is stated :
"EXPORTER INVOLVED
4. The present investigations relate to exports of Vitrified/Porcelain Tiles M/s. Nanhai Shangyuan Qulian Construction Ceramics Co. Ltd. China, producer with M/s. Prestige General Trading Dubai, UAE as exporter to India (hereinafter also referred to as the Petitioner)".
Thus, the review was undertaken in respect of both, the producer Nanhai and the exporter Prestige. The seems to have been done in view of the statement made in the letter dated 15.3.2003 sent on behalf of Nanhai to the designated authority forwarding the application dated 28.2.2003 requesting the initiation of a "New Shipper Review" under Rule 22, in para 4 of which it was stated; "since the goods are being manufactured by a producer in China and exported through a trader in Dubai, we request that the initiation and determination may be for the producer/exporter combination, i.e. M/s. Nanhai Shangyuan Qulian Construction Ceramics Co. Ltd. Guanggong, China (Producer) and M/s. Prestige General Trading, Dubai (Exporter).
7.9 It is, therefore, clear that the new shipper review was initiated at the instance of the producer/exporter combination and therefore, the designated authority was required to ascertain whether any one of them did not export during the relevant period of investigation and whether any of them was "related" to any other exporter/producer of the country of export who had exported the product during the period of investigation that preceded the notification under Section 9A(1). If they qualified for consideration under rule 22, the designated authority was required to determine their individual margin of dumping. Rule 22 does not require any prior application of a new shipper to initiation a review. Initiation of review is different from initiation of an investigation under Rule 5, the purpose of which is to determine existence, degree and effect of any alleged dumping. There is an express requirement under Rule 5(1), that the initiation of investigation shall be done, "only upon receipt of written application by or on behalf of the domestic industry". Therefore, the imposition of anti-dumping duty under Section 9A(1) is itself dependent upon the domestic industry applying in writing to initiate the statutory proceedings. Albeit, the designated authority can also initiate an investigation suo moto under Rule 5(4) of the Rules. The procedural requirement of a written application, however, is not incorporated in rule 22 for initiating a review for determining individual margins of the new shoppers. Therefore, even if the designated authority has initiated the review application on the basis of the application dated 15.3.2003 of the producer, Nanhai, the review proceedings will not be vitiated on the ground that the initiation was bad as the review application was made before the issuance of the Notification Nos. 73/03 dated 1.5.2003 imposing anti-dumping duty under Section 9A(1). The contention that review proceedings were void ab initio is therefore, misconceived.
8. The contention that the words 'periodic review' in rule 22 precluded consideration of the application of Nanhai of a review within 22 days of the notification under Section 9A(1) of the Act is equally misconceived for the simple reason that the words "periodical" which is used in the sense of periodic (and not journal or magazine) as per its common parlance) only the means, in the context of the provisions of rule 22, that the review can be undertaken intermittently. There are not time intervals intended by this expression and it only means that as and when the occasion arises to determine the individual margins, the designated authority may intermittently undertake a review. The review for determining individual margin, by its very nature, is case specific and does not require any full fledged investigation of the nature covered by rule 5. This is why it was left to the designated authority when to undertake the review, without prescribing any time intervals.
9. There can be no dispute over the proposition that the designated authority is required to undertake an exercise to ascertain whether the new producer/exporter was related to any producer/exporter of the country of export, as contemplated by rule 22. The designated authority has to consciously consider whether the new shipper was related to any producer or exporter who exported the product, "during the period of investigation" earlier made under rule 5. The new shipper is required to show that he is not related to ay such producer/exporter. The word "related" is to be understood in the context of the possibility of circumvention by the exporter/producer of the country of export subject to the anti-dumping duty, who might resort to the device of a "shell" company or simply of changing the business-name of the concern. The designated authority has to lift the veil of the producer/exporter concerned and detect the circumvention attempt, it any. In the present case, the designated authority had relied on the application of Nanhai dated 28.2.2003 for initiation of review, in which it was stated that the producer Nanhai was independent company and was not related to any other exporter or producer from China who may have exported the goods of India. In that letter there was no statement that Prestige of UAE was also not so related. Having regard to the fact that initiation of new shipper review was in respect of both, the producer Nanhai of China, and Exporter Prestige of Dubai, the designated authority was required to ascertain the position of both under rule 22(1), as to whether they had shown that they were not so related to any other exporter or producer in the country of export which was China form where the goods were exported directly to India. The designated authority seems to have overlooked this requirement and did not examine whether the exporter Prestige was so "related". Moreover, the entire exercise had bee, with respect, casual and though it may not vitiate the initiation of review, the reliance merely on the bare assertion of the new shipper-producer for holding that the new producers/shippers were not related as the authority "did not find any evidence of relationship", shows that the authority was oblivious of the importance of the anti-circumvention aspect that is ingrained in rule 22 when it requires the designated authority to exercise the review power only when it is "shown" that the "new shipper" is not so "relate". The domestic industry, however, has not been able to assail this finding by reference to any cogent material on record. In our view, notwithstanding that no prior determination was made on the relationship aspect before initiating the review under rule 22, the new shipper could have shown at any stage of the review proceedings that no inhibiting relationship existed and it was equally open for the domestic industry to sow, it id exist. No such fresh exercise is called for at this appellate stage in the facts of the case, nor is it attempted with any seriousness. The material gathered during the review proceedings continues to be validly collected for the purpose of all determinations, and the proceedings, in our view, are not void ab initio, as was sought to be contended on behalf of the appellant.
10. It was contended by the learned senior advocate for the appellant that the approach of the designated authority to mechanically accept the claims of confidentiality of all vital evidence of the new shipper, without reaching the requisite satisfaction has prevented the domestic industry to adequately defend itself and even to find out whether the new producer/exporter were related to any other producer/exporter, as contemplated by rule 22. It was submitted that the balance-sheets of the new shipper Nanhai, which were withheld on the ground of confidentiality, would have enabled the appellant to find out whether there were subsidiaries who exported the product during the period of investigation for imposition of anti-dumping duty. The relevant record would have shown, according to him, the product capacity on the basis of which the genuineness of the purchase order could have been verified. The contract copy which was specifically mentioned in answer to question No. 3 of the questionnaire ("Provide sale negotiation process and how you sell the goods in your home market and export to India"). was not supplied. It could have shown whether Prestige was a wholesale agent of Nanhai or had become the owner of the goods. The confidentiality barrier was put up ignoring the transparency provisions of the rules and thee was total non-application of mind on the part of the designated authority, according to the learned senior counsel.
10.1 Every application or information contemplated by rule 7 is not, by itself, required to be treated as confidential merely because it is provided to the designated authority on a confidential basis by any party in the course of investigation. It is only when the designated authority is satisfied as to its confidentiality that such information is required to be treated as confidential. Therefore, the designated authority is not required to mechanically treat the information provided by a party as confidential merely because that party has desired it to be kept confidential. The designated authority has to be satisfied about the confidentiality of the information on the basis of various factors such as the nature of information and whether such type of information is by law, custom, usage, or practice treated as confidential in the field to which the information relates (e.g. industrial sector, service sector etc.). If in the field to which the information relates, its disclosure is not treated as confidential, either under the law or by custom, usage or practice of the trade or industry, then the claim to confidentiality is ill founded and will not be accepted by the designated authority. However, in the areas where confidentiality of information, having regard to its nature and content, is accepted by law, custom, usage or practice, (e.g. about "know how" as in the filed of intellectual property), the designated authority will be satisfied about the confidentiality. Confidentiality, however, is not a mere tool to deny disclosure of information provided during investigation in order to kill all transparency provisions of the rules and create a handicap for the opposing parties. Any claim to treat the information as confidential must be bonafide and germane to the rights and legitimate interests of the party wanting to treat the information it provided as confidential.
10.2 If on consideration of the relevant factors having bearing on the aspect whether the information ought to be treated as confidential, the designated authority reaches satisfaction about its confidentiality then, and then alone, the embargo against disclosure will operate. Therefore, if the designated authority, on consideration of the relevant aspect comes to a satisfaction that there is no element of confidentiality in the nature and contents of the information provided by a party and that the claim to confidentiality is baseless then the designated authority will not treat the information "as such", that is, provided on confidential basis. In such an event, there would be no need to ask the party providing such information on confidential basis to furnish a non-confidential summary thereof, and sub-rules (2) and (3) of rule 7 will have no application since the designated authority is not satisfied about the claim to confidentiality. Therefore, the information which is by nature confidential or is provided by any party to investigation on confidential basis will be treated as confidential upon good cause shown to the authority. It is, however, clear that the requests of confidentiality cannot be arbitrarily rejected. The requirement under rule 7 to protect confidential information indicates that the investigating authority might need to rely on such information in making determinations relevant to the provisions of the Act and the Rules. Rule 7 contains a mechanism that allows parties to provide the investigation authority with such information for the purpose of making their determinations, while ensuring that the information is not used for other purposes. It would be contradictory to suggest that the rule creates some mechanism (in consonance with the international agreement) for the protection of confidential information, but precludes reliance thereon by the authority for making its determinations. Since the exercise by the designated authority is a process adopted for making statutory determinations. once the information given by a party to the authority is validly treated as confidential, there will be no right in other parties to challenge the determination on the ground of violation of principles of natural justice. The process of determinations of anti-dumping duty and related matters is not an adjudicatory process of resolving disputes between the parties, but a statutory process for determining imposition of anti-dumping duty on those who are liable to pay. For the purpose of transparency, there is an obligation on the authority to require the parties to furnish non-confidential summaries which shall be in sufficient detail to permit a reasonable understanding of the substance of the information submitted in confidence. This is an important element incorporated in rule 7 (2) which reflects the balance struck by the rules between the need to protect the confidentiality of certain information, on the one hand, and the need to ensure that all parties have a full opportunity to defend their interests, on the other. The transparency required under the rules which obligates the authority to explain its determination in a public notice is subject to the need to have regard to the requirement for the protection of confidential information under rule 7. Confidentiality of the information limits the manner in which the authority explains and supports its determinations in a public notice. Therefore, the designated authority may rely on confidential information in making determinations while respecting its obligation to protect the confidentiality of that information.
11. In the present case, the designated authority has not even cared to pass any formal order in the matter of confidentiality and has merely accepted the version of the parties providing evidence without applying his mind as to whether the information supplied deserved to be treated as confidential or not. We have ascertained from the learned counsel appearing for the designated authority, on the basis of the record with him, that despite the objection raised by the appellant (letter dated 12.1.2004 at annexure 20 addressed to the designated authority that the responses of the exporter new shipper did not fulfil the requirement of anti-dumping law and procedure), the designated authority did not at all direct himself to consider whether the information supplied by the new shippers ought to have been treated confidential, and, which of the information supplied should be so treated, and, if it was to be treated " as such", whether the non-confidential summary of such information contained sufficient detail to permit a reasonable understanding of the substance of the information submitted in confidence. since the very outcome of the proceedings can be effected if the information which is not required under the law to be treated as confidential is so treated, we are left with no option but to require the designated authority to reconsider the proceedings in the light of the confidentiality issue, as discussed above. This Tribunal is purely a judicial Tribunal and in exercise of its appellate power of judicial review under section 9C(3), may pass. after giving the parties an opportunity of being heard, such orders thereon as it thinks fit, confirming, modifying or annulling the order appealed against. The exercise under rule 7 required to be undertaken by the designated authority is for the purpose of enabling the designated authority to reach its own subjective satisfaction. since confidentiality issue would be required to be decided in respect of all the information for which it is claimed, it will not be appropriate for this Tribunal to embark upon a detailed exercise in its appellate jurisdiction for substituting its satisfaction of the designated authority. It is clear to us from the wordings of sub-section (3) of Section 9C that while making any final order the tribunal has all the powers to issue such orders as it thinks fit to issue in connection with the order impugned. This wide power of judicial review conferred under the said provision is in consonance with the following article 13 of the Agreement on implementation of article 11 of general Trade Agreement on trade & Tariffs:-
"Article 13 -Judicial Review -Each Member whose national legislation contains provisions on anti-dumping measures shall maintain judicial, arbitral or administrative tribunals or procedures for the purpose, inter alia, of the prompt review of administrative actions relating to final determinations and reviews and determinations within the meaning of the Article 11. Such tribunals or procedures shall be independent of the authorities responsible for the determination or review in question."
This Tribunal is is statutorily constituted under section 129 of the Customs Act with appellate jurisdiction under Section 129A. Under sub-section (6) of section 129C the Tribunal has power to regulate its own procedure and the procedure of benches thereof of in all mattes arising out of the exercise of its powers or of the discharge of its functions. therefore, the tribunal and its procedures are independent of the authorities responsible for final determinations for judicial review in question, as contemplated by the above Article 13. In fact, the union of India or the concerned Ministry would be a party in the proceedings before the tribunal, as in the present case, and will be amenable to the jurisdiction of this Tribunal. Therefore, by the very judicial nature of its functions and the powers conferred on it, this Tribunal is independent of the governmental authorities responsible for final determinations. The tribunal having such wide judicial powers to make the appellate orders of the nature contemplated by Section 9C (3) would have for the effective exercise of it's appellate power of judicial review, the necessary power to remand the matter to the designated authority for its reconsideration on the aspect of the confidentiality issue, in the light of the observations made in the judgment.
FINAL ORDER
12. The impugned final findings of the designated authority-dated 30th June 2004 and the notification No. 80/2004 dated 28th July 2004 are, therefore, hereby set-aside, and the respondent designated authority is directed to examine the confidentiality of information under rule 7 and make "Final findings" afresh in the matter after hearing the interested parties on the basis of the material already on record, within three months from today. The appeal is accordingly allowed.