IMPORTANT POINTS
Purpose of Section 9A of the Custom Tariff Act is not protectionism but to prevent unfair trade practices.
When domestic law is amended to ratify an International Treaty, terms of the Treaty would be legitimate aid to construction of such domestic law construction of which should be consistent with the provisions of the Treaty. A treaty provision embodied in domestic statute would not be controlled by the domestic law but construed on its own terms. However where India is not a signatory to the International Treaty but it is made applicable, in case of conflict between such treaty and domestic law, domestic law will prevail.
There can be no levy of anti-dumping duty in the “gap” or interregnum period between the lapse of the provisional duty and the imposition of the final duty.

Headnote:(a) Custom Tariff Act – Section 9A – Purpose of Section 9A is not protectionism but to prevent unfair trade practices. (Para 14)
       (2005) 3 SCC 337; (2006) 10 SCC 368 – Relied upon
       (b) Interpretation of statute – Amendment in domestic law to ratify an International Treaty – Terms of the Treaty – Legitimate aid to construction of such domestic law – The construction should be consistent with the provisions of the Treaty – A treaty provision embodied in statutes of member nations should be construed uniformly in all the member nations – Such provisions would therefore not be controlled by the domestic law but construed on its own terms – Should be interpreted in a purposive and not a narrow literal manner – However, in a case where India is not a signatory to the International Treaty but it is made applicable – In case of conflict between such treaty and domestic law, domestic law will prevail. (Para 23)
       [1976] 1 All ER 920; [1979] 3 All ER 897; [1982] 2 All ER 402; [1982] 3 All ER 1141; [1997] 1 All ER 193; (1996) 5 SCC 647; (2001) 4 SCC 516; (2005) 3 SCC 337 – Relied upon
       (c) Custom Tariff Act – Section 9A (1) and (3) – Anti-dumping duty – Normally to be imposed with prospective effect – Except in case of massive dumping in a relatively short time requiring levy of retrospective duty – Such levy cannot be for a period beyond 90 days. (Para 24)
       (d) Customs Tariff (Identification, Assessment and Collection of Anti-Dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995 – Rule 13, 20 and 21 r/w clause 7.4, WTO Agreement – Anti dumping duty not to exceed margin of dumping – Further, such duty cannot imposed before expiry of 60 days from date of public notice to initiate investigation – Second, such duty cannot remain in force for a period of more than six months – These time periods are mandatory – Cannot be exceeded by even a single day. (Para 31)
       (e) Customs Tariff (Identification, Assessment and Collection of Anti-Dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995 – Rule 17 r/w Clause 5.10 and 10.6, WTO Agreement – Final finding within one year of initiation of investigation – Provision for retrospective levy of duty not commencing beyond 90 days of imposing provisional duty. (Para 32)
       (f) Customs Tariff (Identification, Assessment and Collection of Anti-Dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995 – Rule 20 r/w clause 10.2, WTO Agreement – Focus only on commencement of anti-dumping duties – Rule 19 mentioned in Rule 20 is draftman’s mistake – What is referred is rule 18 – Under sub-rule (1) provisional anti-dumping duty takes effect on and from date of its publication in official gazette – Sub-rule (2)(a) enables levy of a final anti-dumping duty incorporating the provisional anti-dumping duty in the manner provided by Rule 13 – There can be no levy of anti-dumping duty in the “gap” or interregnum period between the lapse of the provisional duty and the imposition of the final duty. (Para 34, 35, 36)
       (g) Customs Tariff (Identification, Assessment and Collection of Anti-Dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995 – Rule 20 (2)(a) r/w section 9A(2) and (6) – Contention of Revenue that final anti-dumping duty would take effect from the date of imposition of the provisional duty, which would necessarily include the “gap” period i.e. the period between the lapse of the provisional duty and the imposition of the final duty – Such interpretation would render sub-rule (2)(a) ultra vires Section 9A because any duty levied by a final duty notification during the interregnum period would necessarily amount to a retrospective levy of duty which is not permissible u/s 9A(2) and (6) – Such interpretation would render sub-rule (2)(a) ultra vires Section 9A. (Para 41)
       (1971) 1 SCC 337; (1972) 2 SCC 560 – Referred
       Civil Appeal No. 5119 of 2012 (Bom.) – Not correct
       (h) Customs Tariff (Identification, Assessment and Collection of Anti-Dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995 – Rule 21(1) r/w Rule 20(2)(a), clause 10.3 of the WTO Agreement and section 9A, Custom Tariff Act – Final anti dumping duty more than provisional anti dumping duty – Difference for the interregnum period to be refunded to the assessee – In a case other way round, shortfall cannot be recovered. (Para 43, 44, 45, 46)
       Facts of the case:
       All these appeals raise a common question of law relating to anti-dumping duty.
       The question of law arising in these appeals is whether anti-dumping duty imposed with respect to imports made during the period between the expiry of the provisional anti-dumping duty and the imposition of the final anti-dumping duty is legal and valid.
       On 6th August, 2001 a public notice was issued by the Designated Authority initiating proceedings in regard to the import of Vitrified/Porcelain tiles originating in or exported from the People’s Republic of China and the United Arab Emirates. The Designated Authority issued preliminary findings on 3rd December, 2001. Following the preliminary findings, the Union Government imposed, by a notification dated 2nd May, 2002, a provisional antidumping duty under Section 9A(2) of the Customs Tariff Act read with Rules 13 and 20 of the Antidumping Rules. The Designated Authority rendered its final findings on 4th February, 2003 and while concluding that material injury had resulted to the domestic industry recommended the imposition of antidumping duty. The Union Government issued a notification on 1st May, 2003 imposing a final antidumping duty with effect from the date of the imposition of the provisional antidumping duty i.e. 2nd May, 2002.
       Finding of the Court:
       View taken by the Bombay High Court cannot be acceded to.
       Result: Appeal by assesses allowed. Appeal by Revenue dismissed.

JUDGMENT

R.F. Nariman, J.

1. Leave granted in S.L.P. (Civil) No. 13028 of 2012 and S.L.P. (Civil) No. 27811 of 2012.

2. Seven appeals are before us; some of them are from the Bombay High Court judgment dated 15.12.2011 and the Kerala High Court judgment dated 15.07.2009. Others are appeals against a Karnataka Tribunal (Bangalore) judgment and a Bombay Tribunal judgment, which follows the Bombay High Court judgment referred to above. Since all these appeals raise a common question of law of some complexity relating to anti-dumping duty, the said appeals have been bunched together and are being disposed of together. It may also be stated that the preponderant view, that is the view of both the Bombay and Kerala High Courts and the Bombay Tribunal, is in favour of the construction suggested by revenue. Only the Karnataka Tribunal (Bangalore) has decided in favour of the assessee.

3. The question of law which arises in the instant appeals is whether anti-dumping duty imposed with respect to imports made during the period between the expiry of the provisional anti-dumping duty and the imposition of the final anti-dumping duty is legal and valid.

4. It is necessary in this case to begin at the very beginning. The General Agreement on Tariffs and Trade (GATT) in Article VI first laid down how, conceptually, anti-dumping duties were to be imposed. The relevant part of Article VI reads as under:-

“Article VI

Anti-dumping and Countervailing Duties

1. The contracting parties recognize that dumping, by which products of one country are introduced into the commerce of another country at less than the normal value of the products, is to be condemned if it causes or threatens material injury to an established industry in the territory of a contracting party or materially retards the establishment of a domestic industry. For the purposes of this Article, a product is to be considered as being introduced into the commerce of an importing country at less than its normal value, if the price of the product exported from one country to another.

(a) is less than the comparable price, in the ordinary course of trade, for the like product when destined for consumption in the exporting country, or,

(b) in the absence of such domestic price, is less than either

(i) the highest comparable price for the like product for export to any third country in the ordinary course of trade, or

(ii) the cost of production of the product in the country of origin plus a reasonable addition for selling cost and profit.

Due allowance shall be made in each case for differences in conditions and terms of sale, for differences in taxation, and for other differences affecting price comparability.

2. In order to offset or prevent dumping, a contracting party may levy on any dumped product an anti-dumping duty not greater in amount than the margin of dumping in respect of such product. For the purposes of this Article, the margin of dumping is the price difference determined in accordance with the provisions of paragraph 1.”

5. In pursuance of the said Article VI, various member nations entered into a World Trade Organisation Agreement to implement Article VI, in 1994. The said agreement is referred to as “Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade, 1994”, and in its material aspects, which are important in order to decide the question raised in these appeals, states as follows:-

“Members hereby agree as follows:

PART I

Article 1

Principles

An anti-dumping measure shall be applied only under the circumstances provided for in Article VI of GATT 1994 and pursuant to investigations initiated and conducted in accordance with the provisions of this Agreement. The following provisions govern the application of Article VI of GATT 1994 in so far as action is taken under anti-dumping legislation or regulations.”

“Article 10

Retroactivity

10.1 Provisional measures and anti-dumping duties shall only be applied to products which enter for consumption

Click Here to Read the rest of this document

2015 Supreme(SC) 900

Cases Referred (5)