2000 Supreme(SC) 1127

2000(5) Supreme 242
SUPREME COURT OF INDIA
(From Central Excise Customs and Gold (Control) Appellate Tribunal, New Delhi)
B.N. Kirpal & N. Santosh Hegde, JJ.
Designated Authority Anti-Dumping Directorate Ministry of Commerce -Appellant
versus
M/s. Haldor Topsoe A/S. etc. -Respondents
Civil Appeal No. 487 of 2000
(With CA No. 4109/2000 @ SLP (C) No. 5361 of 2000)
Decided on 20-7-2000
Counsel for the Parties :
For the Appearing Parties : Harish N. Salve, Solicitor General, Joseph Vellapally, Sr. Advocate, K.C. Kaushik, Jaideep Gupta, P. Parmeswaran, Rahul P. Dave, Jagjit S. Chhabra, A.P. Singh, R.S. Suri, Ms. P.S. Shroff, Ms. Monica Sharma, A.K. Roy, V. Lakshmikumaran, R. Parthasarthy, V. Balachandran, Ashok Mathur, Ms. A.K. Verma, B.A. Ranganathan, Ambhoj Kumar Sinha, Sangram Patnaik, S.B. Upadhyay, Pawan Upadhyay, P.K. Jain, Advocates.

VERY IMPORTANT POINTS
1. For extending time limit for completion of enquiry into allegation of dumping under Section 19-A the concerned party need not be heard; concerned party not entitled to any prior notice for extension of time.
2. In proceedings for anti-dumping investigation an Investigating Authority has discretion to reject the material produced by one of the party to the proceeding in regard to the alternatives enumerated in Section 9A(1)(c)(ii)(a) and (b) and prefer any other material to establish the normal value.
3. Different injury margins for same catalyst based on different end-user is permissible for purpose of imposing anti-dumping duty under Section 9-A of the Customs Tariff Act.

Headnote:(i) Customs Tariff (Amendment) Act, 1995-Section 9-A-Anti-dumping duty-Normal value-Determination of-Export of catalysts from Denmark-Preliminary finding holding that export amounted to dumping-Proposed anti-dumping duty challenged-Public hearing for final determination of normal value-Failure of respondent to provide necessary in regard to export price to other third countries-Normal value determined by Designated Authority on best judgment assessment relying on comparable export price of another exporter-Justified-Investigating Authority has discretion to reject material produced by one party to proceedings and prefer any other material to establish normal value-Anti-dumping duty is not exporter specific or manufacturer specific-Material considered by Authority referable to exporter from Germany -Denmark and Germany members of European Union forms single unit for purpose of anti-dumping duty-Export price of like catalysts from Germany would be comparable price for purpose of determining normal value.

       From the provisions of Section 9-A(1)(c) and Rules 6 and 8 it is clear that the statute itself has given sufficient guidelines to the Authority to be adopted in the process of determining the normal value . To some extent, these guidelines have been placed in a preferential sequence. For example, if acceptable material is available in regard to the comparable price in the ordinary course of trade in the exporting county or territory itself then the normal value will have to be determined on that basis, if such material in regard to comparable price is not available then the Authority has been given a choice under Section 9A(1)(c)(ii)(a) and (b). The said choice is between the comparable representative export price and cost of production in the country of origin of the goods. The question, therefore, for our consideration is whether an Investigating Authority has any discretion to reject the material produced by one of the party to the proceeding in regard to the alternatives enumerated in Section 9A(1)(c)(ii)(a) and (b) and prefer any other material to establish the normal value. As noticed above while the Authority proceeded on the basis that it had the discretion to reject the evidence produced by the respondent, the Tribunal held that the Authority had no such discretion in view of the fact anti-dumping duty is exporter specific. (Para 14)

       From a careful reading of Section 9A of the Tariff Act and Rule 6 of the Rules, it is clear that the statute has nowhere put such a restriction on the Investigating Authority. On the contrary, a perusal of the said provisions clearly shows the normal value will have to be determined with reference to comparable price, the word "comparable price" in the context can only be with reference to the price of similar articles sold under similar circumstances irrespective of the manufacturer. By holding anti dumping duty to be exporter specific, the tribunal could not have restricted the scope of the investigation only to materials to be produced by a party against whom an investigation is being conducted. Such an interpretation of the statute is wholly contrary to the very scheme of the statute. It is to be noticed that the statute has given much wider power to the Investigating Authority than what is understood by the Tribunal which is evident from the language of Section 9A(1)(c)(i) of the Tariff Act and Rule 6(8) of the Rules. As noticed hereinabove, Rule 6(8) of the Rules specifically empowers the Authority to record its findings on the basis of the facts available to it in cases where an interested party refuses access to or otherwise does not provide the necessary information to it. That apart, the use of the words "sale of like articles" and "comparable representative price of the like articles" in Section 9A(1)(c) referred to hereinabove, also indicates that the statute intended that while determining the normal value, the Authority has the discretion to rely on such material as is available before it which reflects the comparable value of the articles concerned; meaning thereby that the Authority is not bound to look into the material which is produced by the interested party. Therefore, any argument which restricts the discretion of the Authority in the area of appreciation of evidence on the ground that the anti-dumping duty is manufacturer specific, will have to be rejected. (Paras 15 & 16)

       In the instant case, the Authority has come to the specific conclusion that the respondent has preferred not to disclose the details of its export price of the concerned catalysts to an appropriate third country, even though the same was available with the respondent. It has also noted that the reasons advanced by the respondent, for not furnishing the information are not worthy of acceptance. The Authority has further observed that by withholding the necessary information which the respondent was bound to have disclosed under the statute, the respondent has not cooperated with the investigation and has caused impediments in determination of the normal value. In these circumstances, we are of the opinion that the Authority was justified in proceeding to determine the normal value of the subject catalysts on the basis of best judgment assessment as contemplated under Rule 6(8) of the Rules. (Para 17)

       The use of the word territory in Section 9A(1)(c) indicates that the Statute empowered the Authority while determining the normal value to take into consideration the comparable price of the like article in the exporting country or territory. The placement of this word territory after the word country indicates that the Legislature intended to use the word territory with reference to a larger geographical area than the exporting country which geographical area or territory has some commercial similarity with the exporting country and the exporting country is a part of the said territory, though not in the political sense but in the economic sense of that word. It is a well-known fact that the European Union was formed with an object of creating a common market among its member States. The treaty forming the European Union commonly known as the Treaty of Rome provided for elimination of commercial/customs barriers to facilitate free movement of goods, workers, services and capital among the member-States and the establishment of a common tariff and commercial policy towards non-members. To achieve these objects, the said Treaty also provides for common policies in agriculture, competition and transportation. It also provides for the harmonisation of the member-State laws generally to the extent required for the proper functioning of the common market. There are an European Union legislations applicable in such fields as environment, worker and consumer protection, gender equality; corporate law and securities regulation, and taxation. (See Legal Problems of International Economic Relations, 3rd Edition, page 188). They also have a common anti-dumping law. In such circumstances, we hold that the European Union is a "territory" for the purpose of Section 9A of the Customs Tariff Act and the export price of like catalysts from Germany which is also a part of that territory viz., European Union would be a comparable price for the purpose of determining the normal value of the respondent s catalysts. (Para 18)

       The entire exercise before the Authority would have been simplified if only the respondent had produced its export price of its catalyst to an appropriate third country which information was available with it, which, if furnished, could have established the actual normal value of their catalysts. When it failed to do so for no valid reason, the Authority was compelled to rely on other material available to it and resort to the best judgment valuation. In such a situation we are of the opinion that the complaint of the respondent against the material relied upon by the Authority cannot be countenanced. (Para 18)

       (ii) Customs Tariff (Amendment) Act, 1995-Section 9-A-Anti-dumping duty-Export of catalyst, ZODS catalyst and LTS catalyst, from Denmark-Different injury margins for same catalyst based on different end-users-Permissible.

       Held : It was next contended by the respondent before us that the Authority erred in fixing two different injury margins for the same catalyst based on different end-users of the said catalyst which, according to the respondent, is impermissible in law This argument has also found favour with the tribunal. In this regard, we note that the Authority has come to the conclusion that the catalysts in question were imported to this country under two different tariff items based on its end-user for which the import was made. It is noticed that when the catalyst concerned was imported under a project import basis, the same was cleared under Chapter 98 of the Act at "NIL" rate of customs duty and if imported for any other purpose, the same was cleared under Chapter 38 at the prevailing duty. Thus there is a difference in import duty based on the user factor. In this background, the Authority came to the conclusion that the landed value of the subject catalyst will vary with the applicable customs duty and consequently there will be difference between the cost of import and the margins of dumping would also vary. The Tribunal did not give any specific reason why the two different margins cannot be made applicable based on different import duties applicable to the concerned catalysts. (Para 21)

       The margin of dumping is defined to mean the difference between its export price and its normal value. The Authority while determining the margin of dumping has come to a definite conclusion that the argument of the exporter that its export price has been more or less the same irrespective of tariff head under which the catalyst was imported, was incorrect and the Authority has further found different dumping margins based on clearances under the two different tariff heads. Section 9A(1) contemplates levy of an anti-dumping duty not exceeding the margin of dumping in relation to such article. If that be so then when the Authority on an investigation of facts comes to the conclusion that by virtue of two different customs duties there have been two different dumping margins in regard to the subject catalyst based on customs clearances, ipso facto, anti-dumping duty which is relatable cost of import also changes. Therefore, the contention of the respondent that there cannot be two anti dumping duties in regard to the same catalyst, cannot be countenanced. (Para 22)

       (iii) Customs Tariff (Amendment) Act, 1995-Section 9-A-Customs Tariff Rules-Rule 17-Anti-dumping duty-Time limit for completion of investigation into allegation of dumping-Extension of time limit-Concerned parties need not be heard before extending time-Concerned party not entitled to any prior notice for extension of time.

       In the instant case it was contended that the investigation in question was initiated by the preliminary notification of 6th of September, 1996 and the same concluded only by a Notification of 5th January, 1998 and though there was an extension granted by the Government of India under proviso to Rule 17, the same having been granted without notice to the respondent, the extension is in violation of principles of natural justice and consequently the final determination made by the authority being beyond the period of one year specified by the Rules, the same is liable to be quashed on the ground of limitation.

       Held : Under Rule 37 of the Rules, the Authority had to complete the investigation within a period of one year but this period is extendable by a further period of six months by the Central Government in circumstances of exceptional nature. The tribunal on investigation of the concerned files produced by the Central Government came to the conclusion that on an application made by the Authority, the Central Government had extended the time within the limit prescribed under proviso to Rule 17 of the Rules and the final finding was submitted to the Central Government by the Authority within such extended period. This decision in question is an administrative decision based on exigencies of the case. The statute governing the investigation into dumping by an Authority has provided an elaborate procedure and wherever the concerned parties are entitled to notice, it has specifically provided for the same. In the absence of any such requirement to issue notice in proviso to Rule 17, we are of the opinion that the contention of the respondent that it is entitled to any notice prior to the exercise of the power under the proviso to Rule 17 by the Central Government, is devoid of any merit. In the instant case, the investigation was completed within the stipulated period after obtaining the necessary extension from the Central Government. Further the respondent, though, was aware of the extension granted to the Authority by the Central Government, did not object to the same when the proceedings before the Authority continued after the extension of time and having suffered an adverse order cannot be permitted to raise this question subsequently at an appellate stage. (Paras 23 and 25)