# l S.C.R. 117 MIS. ALKALI MANUFACTURERS ASSN. OF INDIA v. DESIGNATED AUTHORITY, D.A.D.A.S. & ORS

- **Citation:** [2016] 1 S.C.R. 117
- **Court:** Supreme Court of India
- **Decided:** 2016-01-07
- **Case number:** Civil Appeal No. 2242 OF 2006
- **Bench:** Dipak Misra, Shiva Kirti Singh
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/l-s-c-r-117-mis-alkali-manufacturers-assn-of-india-v-designated-authority-d-a-d-30896
- **Pages:** 20

## Headnote

Customs Tariff Act, 1995 - s. 9A - Anti-dumping duty on
dumped articles - Customs Tariff (Identification, Assessment and
Collection of Anti-Dumping Duty on Dumped Articles and for
Determination of Injury) Rules, 1995 -
r. 5 - Petition before the
Designated Authority (DA) on behalf of domestic industry -
Allegation that dumping of caustic soda originated in and exported
from People's Republic of China and Korea - Anti-dumping
investigation - Preliminary finding that caustic soda had been
dumped into India except from one exporter from Korea, HCC at D
less than its normal value - Issuance of Notification imposing
preliminary anti-dumping duty - Appeal before tribunal challenging
determination of DA on anti-dumping duty and imposition of antidumping duty - Tribunal holding that in HCC's case cost was
correctly determined by DA taking chlorine as a co-product and
separating its manufacturing cost during the process of manufacture
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of caustic soda at the stage of separation of chlorine and caustic
soda on the basis of value of production and the same principle
should have been adopted by DA in the case of domestic industry -
On appeal, held: Tribunal has the jurisdiction to appreciate the
evidence in entirety and arrive at a conclusion and that having not
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been done and the entire judgment having been based on the
application of HCC's case and price rise in the price of chlorine,
order passed by the tribunal set aside - Tribunal directed to decide
the matter afresh.
Allowing the appeals, the Court
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HELD: 1.1 The tribunal observed that for arriving at
dumping in relation to an article, the Designated Authority is
required to make a fair comparison between the export price
and the normal value; and that the comparison is required to be
made at the same level of trade at ex-factory level and in respect
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118
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[2016] 1 S.C.R.
of sales made at as nearly possible the same time, relying on the
decision rendered in HCC's case where the DA had compared
the ex-factory export price and normal value and determined the
margin of dumping. The tribunal opined that the margin of
dumping in HCC is different from the margin of dumping from
other non-cooperative exporters from Korea. The tribunal held
that in case of HCC, cost was correctly determined by the DA
taking the chlorine as co-product and separating its manufacturing
cost during the process of manufacture of caustic soda at the
stage of separation of chlorine and caustic soda on the basis of
the volume of production. The same principle should have been
adopted by the DA in case of domestic industry and therefore,
identical treatment was not given to domestic manufacturers and
HCC. The tribunal opined that DA should have apportioned the
cost up to point of separation on reasonable and equitable basis
and he should have taken caustic soda and chlorine as co-product
up to the stage of separation the common cost should have been
allocated on the basis of volume of production. In case of HCC,
the DA has done that and thus, two different methods could not
be adopted for costing of the same product for comparison with
cost of HCC. [Para 12, 13] [126-H; 127-A-F]
1.2 Except HCC, the other exporters did not cooperate.
However, it was the obligation of the complainant to establish
that there was an injury to the domestic industry. For the said
purpose, the endeavour was made to establish before the DA
that it was a by-product and it succeeded in the said attempt. The
tribunal, on being approached by the 7'" respondent, set aside
the order and the notification. The reversal took place on two
counts, namely, the principle determined in HCC's case, and that
the cost of chlorine was substantial during the said period and,
therefore, it deserved to be treated as a co-product as per the
1967 Rules. The approach of the tribunal is fallacious. It observed
that HCC's case is absolutely different. In such a situation, it should
G not have mechanically adopted the said

## Text

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[2016] l S.C.R. 117
MIS. ALKALI MANUFACTURERS ASSN. OF INDIA
A
v.
DESIGNATED AUTHORITY, D.A.D.A.S. & ORS.
(Civil Appeal No. 2242 OF 2006 etc.)
JANUARY 07, 2016
B
[DIPAK MISRA AND SHIVA KIRTI SINGH, JJ.]
Customs Tariff Act, 1995 - s. 9A - Anti-dumping duty on
dumped articles - Customs Tariff (Identification, Assessment and
Collection of Anti-Dumping Duty on Dumped Articles and for
Determination of Injury) Rules, 1995 -
r. 5 - Petition before the
Designated Authority (DA) on behalf of domestic industry -
Allegation that dumping of caustic soda originated in and exported
from People's Republic of China and Korea - Anti-dumping
investigation - Preliminary finding that caustic soda had been
dumped into India except from one exporter from Korea, HCC at D
less than its normal value - Issuance of Notification imposing
preliminary anti-dumping duty - Appeal before tribunal challenging
determination of DA on anti-dumping duty and imposition of antidumping duty - Tribunal holding that in HCC's case cost was
correctly determined by DA taking chlorine as a co-product and
separating its manufacturing cost during the process of manufacture
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of caustic soda at the stage of separation of chlorine and caustic
soda on the basis of value of production and the same principle
should have been adopted by DA in the case of domestic industry -
On appeal, held: Tribunal has the jurisdiction to appreciate the
evidence in entirety and arrive at a conclusion and that having not
F
been done and the entire judgment having been based on the
application of HCC's case and price rise in the price of chlorine,
order passed by the tribunal set aside - Tribunal directed to decide
the matter afresh.
Allowing the appeals, the Court
G
HELD: 1.1 The tribunal observed that for arriving at
dumping in relation to an article, the Designated Authority is
required to make a fair comparison between the export price
and the normal value; and that the comparison is required to be
made at the same level of trade at ex-factory level and in respect
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of sales made at as nearly possible the same time, relying on the
decision rendered in HCC's case where the DA had compared
the ex-factory export price and normal value and determined the
margin of dumping. The tribunal opined that the margin of
dumping in HCC is different from the margin of dumping from
other non-cooperative exporters from Korea. The tribunal held
that in case of HCC, cost was correctly determined by the DA
taking the chlorine as co-product and separating its manufacturing
cost during the process of manufacture of caustic soda at the
stage of separation of chlorine and caustic soda on the basis of
the volume of production. The same principle should have been
adopted by the DA in case of domestic industry and therefore,
identical treatment was not given to domestic manufacturers and
HCC. The tribunal opined that DA should have apportioned the
cost up to point of separation on reasonable and equitable basis
and he should have taken caustic soda and chlorine as co-product
up to the stage of separation the common cost should have been
allocated on the basis of volume of production. In case of HCC,
the DA has done that and thus, two different methods could not
be adopted for costing of the same product for comparison with
cost of HCC. [Para 12, 13] [126-H; 127-A-F]
1.2 Except HCC, the other exporters did not cooperate.
However, it was the obligation of the complainant to establish
that there was an injury to the domestic industry. For the said
purpose, the endeavour was made to establish before the DA
that it was a by-product and it succeeded in the said attempt. The
tribunal, on being approached by the 7'" respondent, set aside
the order and the notification. The reversal took place on two
counts, namely, the principle determined in HCC's case, and that
the cost of chlorine was substantial during the said period and,
therefore, it deserved to be treated as a co-product as per the
1967 Rules. The approach of the tribunal is fallacious. It observed
that HCC's case is absolutely different. In such a situation, it should
G not have mechanically adopted the said principle. It followed a
general principle of the rise in price but did not dwell upon the
issue with regard to the concept of "Equal Economic
Importance". The Equal Economic Importance, is the price
almost similar to the main product, i.e. caustic soda. [Para 19]
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[134-G-H; 135-A-C]
MIS. ALKALI MANUFACTURERS ASSN. OF INDIA v.
119
DESIGNATED AUTHORITY, D.A.D.A.S.
1.3 The tribunal should have dwelled upon the said facet
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before it recorded the finding whether it is a co-product or a byproduct. It is because the "Equal Economic Importance" has to
be considered on a rational and pragmatic basis. It is the duty of
the tribunal to see whether the DA had considered the said aspects
or proceeded on hypothetical basis. The tribunal has the
B
jurisdiction to appreciate the evidence in entirety and arrive at a
conclusion and that having not beeu done and the entire judgment
having been based ou the application of HCC's case and the price
rise in the price of chlorine thus, the judgment and order passed
by the tribunal are set aside and the tribunal is directed to decide
the matter afresh keeping in view the observations made. [Paras
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21, 22] [135-F-H; 136-A]
S&S Enterprise v. Designated Authority and others 2005
(2) SCR.255:2005 (3) SCC 337; Reliance Industries
Ltd. v. Designated Authority and others 2006 ( 6) Suppl.
SCR 1:2006 (10) SCC 368; Commissioner of Customs,
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Bangalore v. Mis G.M. Exports & others 2015 (1)
SCALE 169 - referred to.
2005 (2) SCR 255
Case Law Reference
Referred to
2006 (6) Suppl. SCR 1
2015 (1) SCALE 169
Referred to
Referred to
Para 16
Para 17
Para 18
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2242
of2006
From the Judgment and OrderNo. 26-28/2005-AD dated
23.12.2005 of the Customs Excise & Service Tax Appellate Tribunal,
New Delhi in Appeal No. C/521/03-AD.
WITH
C.A.No.3481 of2006
Lawyer S. Knit & Co., B. Krishna Prasad, Praveen Kumar,
Vishwajit Singh, Suresh A. Shroff & Co. for the appearing parties.
The Judgment of the Cour'. was delivered by
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DIPAK MISRA, J. :
The appellant in Civil Appeal No. 2242
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[2016] l S.C.R.
of 2006, namely, Mis. Alkali Manufacturers Association of India, filed a
petition under Rule 5 of the Customs Tariff (Identification, Assessment
and Collection of Anti-Dumping Duty on Dumped Articles and for
Detennination of Injury) Rules, 1995 (for short, "Anti-Dumping Rules")
before the Designated Authority (DA) on behalf of the domestic industry
alleging dumping of caustic soda originated in and exported from People's
Republic of China and Korea. On the basis of the said petition/complaint,
DA issued a notification initiating anti-dumping investigation covering
the period from 01.04.2001 to 31.03.2003. The interested parties were
required to place their views in writing before the said authority and
after causing a preliminary inquiry, the findings were sent to the known
exporters, importers and embassies of the two countries and exporters
in the other countries to furnish their views to the DA. Opportunity of
public hearing was afforded to the interested parties on 18.02.2003 and
the parties were asked to submit their written submissions. On 14.07 .2003,
the DA issued a disclosure statement under Rule 16 of the Anti-Dumping
Rules. The appellant in Ci vii Appeal No. 224 2 of 2006 filed its comments
on the disclosure statement before the DA and requested the said
authority to disclose the reasons in detail for the detennination of the
preliminary findings recorded on 21.09.2002. Be it stated, the DA had
notified its preliminary findings stating that the caustic soda had been
dumped into India except from one exporter from Korea, Mis. Hanwha
Chemical Corporation at less than its normal value as a result of which
the Indian manufacturers of caustic soda had suffered injury. The DA
provisionally recommended imposition of anti-dumping duty as the
difference between $353.20 per MT and landed price of imports on
every exporter from Korea except Mis. Hanwha Chemical Corporation
(HCC) and the difference between $362.34 and landed price of imports
on all exports from China. Regard being had to the preliminary findings,
the Ministry of Finance had issued Notification No. 142 of 2002 on
26.12.2002 imposing preliminary anti-dumping duties. After hearing the
interested parties and issuance of the disclosure statement, the DA issued
its final findings in which it detennined that the dumping margin for all
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exporters from Korea was 37.30%, except for HCC for which it
determined a dumping margin of (-)4.2% (de minimis), and the dumping
margin for all exporters from China was 84.05%, except for Chlor
Shanghai for which it determined a dumping margin of 41.7%. The said
order was passed on 04.08.2003 and a final Notification No. 142 of
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2003 was issued by the Central Government on 23.09.2003.
MIS. ALKALI MANUFACTURERS ASSN. OF INDIA v.
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DESIGNATED AUTHORITY, D.A.D.A.S. [DIPAK MISRA, J.]
2. Being aggrieved by the aforesaid Notification, the appellant in
Civil Appeal No. 2242 of 2006 filed an appeal before the Customs, Excise
and Service Tax Appellate Tribunal, Principal Bench, New Delhi (for
short, "the tribunal") challenging the determination of the DA on antidumping duty. Two other companies, namely, Mis. National Aluminum
Company Ltd. and Mis. Hindustan Lever Limited also preferred appeals
challenging the imposition of anti-dumping duty on import of caustic soda.
3. Before the tribunal, it was contended by the complaint/appellant
that the findings of the DA on the imports made from HCC
recommending the anti dumping margin is de minimis (minus 4.2%) is
not based on the correct appreciation of the facts and the normal value
and the export price of sodium hydroxide (caustic soda) had not been
correctly worked out in case of HCC as the data provided by the said
Corporation was not correct. The said contention was elaborated on
many a score which included that the export price as defined in Section
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9A of the Customs Tariff Act, 1995 (for short, "Act") had not been
correctly determined; that the DA could not have worked out export
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price at ex-factory level as deduction allowed for arriving at the exfa,ctory price was without checking the records of HCC inasmuch as no
appropriate response was given to the questionnaire; that the DA should
have taken into consideration the price of each individual transaction for
comparison of normal value and the export price. It was also urged that
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the methodology adopted by the DA for arriving at the cost of production
was not disclosed although the authority was required to disclose all the
reasons for arriving at the conclusion.
4. The stand of the appellant was resisted by the contesting
respondents. On behalf of the DA, reliance was placed on Cost
Accounting Records (Caustic Soda) Rules, 1967 (for short, "1967 Rules")
as amended from time to time and, on that basis it was put forth that
'chlorine' was determined as a by-product. It was also contended that
the DA had applied the correct methodology and hence, no fanlt could
be found with the determination. The assail to the erroneous procedure
being adopted by the DA was seriously resisted before the tribunal.
5. The tribunal considering the submissions raised by the parties
came to hold that the main duty of the DA is to determine existence
degree and effect of alleged dumping in relation to import of any article
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and to submit its finding provisionally or finally to the Central Goverrunent
regarding normal value, export price and margin of dumping in relation
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to the article under investigation and the injury or threat of injury to an
industry established in India or material retardation to the establishment
of industry in India consequent upon imports of such articles from
specified countries and to recommend levy of anti-dumping duty equal
to the margin of dumping or less which if levied would remove the injury
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to the domestic industry and the date of commencement of such duty.
The tribunal addressed the issue whether the allegation that in the case
of HCC the normal value and export price had not been correctly
determined as a consequence of which higher anti-dumping duty on HCC
had been imposed and proceeded to hold thus:-
"19.l In case of Mis Hanwha Chemical Corporation, caustic soda
was exported from Korea to India. The order for export was
obtained by Mis Tricon who had filed the tender with Mis NALCO
and whose tender was accepted. Mis Tricon for exporting caustic
soda to Mis NALCO India placed order on Mis Hanwha
Corporation to supply the goods to Mis NALCO and Mis Hanwha
Corporation in tum obtained the goods from Mis Hanwha Chemical
Corporation. We find that in this case the goods were exported
from Korea to India irrespective of the fact that the tender was in
the name of Mis Tricon, USA. Therefore, Designated Authority
has to determine a definite CIF export price at which the goods
were exported from Korea to India. When the CIF export price is
available from Korea to India then it has to be taken as the export
price. To reach the ex-factory export price, the deduction of ocean
freight, ocean insurance, port charges, commission paid to the
middleman namely Mis Hanwha Corporation and inland freight
and inland insurance, etc. has to be deducted to reach the exfactory price for export. This has been done, therefore, there is
no relevance of taking into consideration the SGA expanses of
Mis Hanwha Corporation. We also find that deduction of $5 per
DMT was also not permitted by the Designated Authority for
caustic soda produced by diaphram technology as there is no
difference in caustic soda when manufactured by membrain
technology or diaphrarn technology. It is immaterial whether Mis
Hanwha Chemical Corporation and Mis Hanwha Corporation
were running in loss, we have only to see whether the export
price has been correctly determined or not. We find that the
Designated Authority in his final finding has observed that the
authority for the purpose of final finding considered the adjustment
MIS. ALKALI MANUFACTURERS ASSN. OF INDIA v.
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DESIGNATED AUTHORITY, D.A.D.A.S. [DIPAK MISRA, J.]
as claimed by the customer on discount adjustment in terms of A
sale as per NALCO tender and adjustment of previous transaction
sale to Mis Tricon. Thus addition of $4.57 /MT was correctly done.
Thus, Designated Authority has correctly determined the export
price for caustic soda and it was normatted for other exporters
from Korea. This normatted export price was taken and normal
value was determined on the basis of published figures of domestic
sale in Chlor Alkali Magazine. The domestic industry has raised
various points with regard to Mis Hanwha Chemical Corporation
like insufficient/dismal disclosure, incorrect cost of production data,
lack of information ofaffiliation, illegal adjustment of US $5 PMT
claimed citing NALCO tender and issue of contract and physical
export. The Designated Authority had examined and verified at
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the plant site corporate office of M/s Hanwha's Chemical
Corporation relevant cost record, financial records and production
records for determining the cost components, domestic sale price,
export price, pricing policy and transfer pricing to Mis Tricon.
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The English version of balance sheet was also prodded to domestic
industry apart from other non-confidential information as and when
asked for.
19.2 The Designated Authority has observed that the investigation
is not NALCO's centric although NALCO consumes sizable
quantity, but the consumption of NALCO just 6 to 7 per cent of
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Indian demand, therefore, the investigation covers all other of
imports whether by NALCO or others."
6. After so holding, the tribunal opined that in case of HCC cost
had been correctly determined by the DA taking the chlorine as a coproduct and separating its manufacturing cost during the process of
manufacture of caustic soda at the stage of separation of chlorine and
caustic soda on the basis of the value of production and the same principle
should have been adopted by the DA in case of domestic industry. The
tribunal opined that the identical treatment was not given to the domestic
manufacturers and HCC. After so holding, the tribunal proceeded to
deal with the non-injurious price and opined thus :-
"22. While determining the non-injurious price for the like article
for the domestic industry, the Designated Authority has used the
actual verified cost of production of the subject goods to determine
optimum cost of production for domestic industry taking into
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account the normatted base consumption norm of all the
participating domestic industry and the actual price of raw material
which are consumed for production of caustic soda during the
period of investigation. We find that Cost Accounting Records
(Caustic Soda) Rules 1967 as amended from 1999 provide for
maintenance of proper books of accounts containing particulars
in Schedule III and proforma "A" and "B" mentioned in the said
schedule annexed to the rules relating to utilization of materials
labour and other items of cost as far as these are applicable to
caustic soda in any form. We find that during the POI, the cost of
chlorine was varying and it has been treated as a bye-product by
the Designated Authority. When cost of chlorine is substantial
then it should not be taken as bye-product but it should be
treated as a co-product as per para 12 of Annexure-III to Cost
Accounting Records (caustic soda) Rule 1967. In such a situation,
DA should have apportioned the cost upto point of separation on
reasonable and equitable basis. He should have taken caustic soda
and chlorine as co-product and up to the stage of separation the
common cost should have been allocated on the basis of volume
of production. In case of Mis Hanwha Chemical Corporation the
Designated Authority has done this. Therefore, two different
methods cannot be adopted for costing of the same product for
comparison with cost of Mis Hanwha Chemical Corporation. A
uniform practice should have been adopted for both."
7. The aforesaid view persuaded the tribunal to hold that the
non-injurious price was not correctly determined by the DA and,
accordingly, set aside the Notification No. 142 of2003 dated 23.09.2003
and the final findings of the DA on non-injurious price and injury margin
and remanded the matter to the DA for fresh determination of noninjurious price and injury margin by reasonable and equitable distributing
the cost of production between the chlorine and caustic soda and issue
findings afresh in accordance with law. The tribunal finally held thus:-
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"22.2 We are, therefore, of the view that the non-injurious price
was not correctly determined by the Designated Authority. In case
of Mis. Hanwah Chemical Corporation, the appellant had
separated the cost of production between Caustic soda and
Chlorine at the point of separation of the Chlorine and Caustic
soda. The same principle should be applied for domestic industry
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for reasonable and equitable distribution of cost of production
MIS. ALKALI MANUFACTURERS ASSN. OF INDIA v.
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DESIGNATED AUTHORITY, D.A.D.A.S. [DIPAK MISRA, J.]
between chlorine and caustic soda. Since this has not been done
A
and this has lead to incorrect fixation of non-injurious price, and
consequently anti-dumping duty.
23. We, therefore, set aside the impugned notification No. 142/
2003-Cus dated 23rd September, 2003 and the final findings of
the DA on non-injurious price and injury margin. We remand the
case to the designated Authority for a fresh determination of noninjurious price and injury margin by reasonably and equitably
distributing the cost of production between chlorine and caustic
soda and issue final finding afresh on that basis in accordance
with law and in the light of this judgment."
8. We have heard Mr. Basava Prabhu Patil, learned senior
counsel for the appellant in Civil Appeal No. 2242 of 2006, Mr. Yashank
Adhyaru, learned senior counsel for the appellant-Designated Authority
in Civil Appeal No. 3481 of2006, and Mr. S.K. Bagaria, learned senior
counsel for respondent no. 7.
9. Mr. Basava Prabhu Patil, learned senior counsel, assailing the
judgment and order passed by the tribunal has urged that the tribunal
was not justified in comparing the normal value of a foreign exporter
with the NIP of Indian producers and further there was no warrant to
direct the DA to determine cost of production for foreign exporters and
of Indian producers following the same methodology when the foreign
exporters and Indian producers adopt and apply different accounting
practices as permissible in their respective countries; that the tribunal
has applied the principle laid down in HCC case though in the said case,
the normal value and the value of export price was the same and there
was really no dumping; that the tribunal has grossly erred by treating
chlorine as a co-product or a joint-product along with caustic soda without
taking note of the accounts of the company which has been maintained
on the basis of the generally accepted accounting principles; that the
tribunal has really not kept itself alive to the language employed in Para
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12 of Schedule III to the 1967 Rules which lays down the concept of
"Equal Economic Importance" for the joint products. The learned counsel
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further urged that the tribunal has been carried away by the data of
international prices presented by the importers which show that the
chlorine prices in the international market were substantial whereas the
thrust of the matter to be decided for treating chlorine as a joint product
under paragraph 12 of the Schedule III to the 1967 Rules as the chlorine
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was equal economic importance to the concerned Indian company. The
submission of Mr. Patil is that the DA has committed a grave error by
by-passing the generally accepted accounting principles in India as well
as specific provisions of law that the recognized accounts have to be
maintained for a particular product and that has led to the eventual
determination. Learned counsel would criticise that the order of the
tribunal is not clear and it is solely based on earlier determination in Mis.
Hanwha Chemical Corporation's case.
10. In Civil Appeal No. 3481 of 2006 preferred by the DA, apart
from raising the similar grounds, it has also been urged that the DA on
appropriate consideration and also considering the ambit and sweep of
the 1967 Rules has determined chlorine as a by-product and there was
no justifiable reason on the part of the tribunal to dislodge the same. Mr.
Yashank Adhyaru, learned senior counsel appearing for the DA would
seriously urge that it was not a fit case on the part of the tribunal to remit
the matter to the DA to determine the NIP as it was not necessary to do
so, for undoubtedly it was a by-product but not a co-product.
11. Mr. Bagaria, learned senior counsel appearing for the
respondent no. 7, per contra, would contend that voluminous documents
were filed by the said respondent as the appellant before the tribunal,
and accordingly the tribunal had applied the principle in Mis. Hanwha
Chemical Corporation's case and taken note of the market price of
Chlorine at the relevant time and, therefore, the judgment and order
passed by the tribunal are absolutely impeccable and do not warrant any
kind of interference by this Court in appeal. It is further propounded by
him that the determination of "Equal Economic Importance'', as envisaged
in paragraph 12 of Schedule III to the 1967 Rules having not been defined,
cannot be restricted or confined to the sale price as reflected in the
books of accounts of a domestic company but there has to be other
permissible enquiry, regard being had to the commercial use. To bolster
the said submission, he has read out few passages from the monograph
issued by the Institute of Costing Work Accounts of India.
12. To appreciate the aforesaid submissions in proper perspective,
we have carefully scrutinized the judgment rendered by the tribunal. On
a perusal of the same, we find that after narrating the facts and noting
the submissions, the tribunal has observed that the DA has not taken into
account many an aspect while determining the NIP, for it has taken into
consideration certain obsolete concepts. The tribunal has observed that
MIS. ALKALI MANUFACTURERS ASSN. OF INDIA v.
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DESIGNATED AUTHORITY, D.A.D.A.S. [DIPAK MISRA, J.]
for arriving at dumping in relation to an article, the DA is required to
A
make a fair comparison between the export price and the normal value.
It has also stated that the comparison is required to be made at the same
level of trade at ex-factory level and in respect of sales made at as
nearly possible the same time. In this context, it has placed reliance, on
the decision rendered in Mis. Hanwha Chemical Corporation's case
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where the DA had compared the ex-factory export price and normal
value and determined the margin of dumping. The tribunal has opined
that the margin of dumping in Mis. Hanwha Chemical Corporation is
different from the margin of dumping from other non-cooperative
exporters from Korea. After so observing, the tribunal has held that in
case of Mis. Hanwha Chemical Corporation cost has been correctly
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determined by the DA taking the chlorine as co-product and separating
its manufacturing cost during the process of manufacture of caustic
soda at the stage of separation of chlorine and caustic soda on the basis
of the volume of production. The same principle should have been adopted
by the DA in case of domestic industry and therefore, identical treatment
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was not given to domestic manufacturers and HCC.
13. Thereafter, the tribunal has adverted to the issue of NIP and
in that context has opined that DA should have apportioned the cost up
to point of separation on reasonable and equitable basis and he should
have taken caustic soda and chlorine as co-product up to the stage of
separation the common cost should have been allocated on the basis of E
volume of production. Thereafter, it has been observed that in case of
HCC, the DA has done that and hence, two different methods cannot be
adopted for costing of the same product for comparison with cost of
HCC.
14. To appreciate the factual score in proper perspective, we may
profitably refer to Section 9A of the Act which reads as follows:-
"Section 9A. Anti-dumping duty on dumped articles
(1) Where any article is exported by an exporter or producer
from any country or territory (hereafter in this section referred to
as the exporting country or territory) to India at less than its normal
value, then, upon the importation of such article into India, the
Central Government may, by notification in the Official Gazette,
impose an anti- dumping duty not exceeding the margin of dumping
in relation to such article.
F
G
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Explanation.-For the purposes of this section,-
B
c
(a) "margin of dumping" in relation to an article, means the
difference between its export price and its normal value;
(b) "export price", in relation to an article, means the price of the
article exported from the exporting country or territory and in
cases where there is no export price or where the export price is
unreliable because of association or a compensatory arrangement
between the exporter and the importer or a third party, the export
price may be constructed on the basis of the price at which the
imported articles are first resold to an independent buyer or if the
article is not resold to an independent buyer, or not resold in the
condition as imported, on such reasonable basis as may be
determined in accordance with the rules made under sub-section
(6);
(c) "normal value", in relation to an article, meansD
(i) the comparable price, in the ordinary course of trade, for the
like article when destined for consumption in the exporting country
or territory as determined in accordance with the rules made under
sub-section (6); or
(ii) when there are no sales of the like article in the ordinary course
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of trade in the domestic market of the exporting country or territory,
or when because of the particular market situation or low volume
of the sales in the domestic market of the exporting country or
territory, such sales do not permit a proper comparison, the normal
value shall be eitherF
(a) comparable representative price of the like article when
exported from the exporting country or territory to an appropriate
third country as determined in accordance with the rules made
under sub-section (6); or
(b) the cost of production of the said article in the country of
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origin along with reasonable addition for administrative, selling
and general costs, and for profits, as determined in accordance
with the rules made under sub- section(6):
Provided that in the case of import of the article from a country
other than the country of origin and where the article has been
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merely transhipped through the country of export or such article
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DESIGNATED AUTHORITY, D.A.D.A.S. [DIPAK MISRA, J.]
is not produced in the country of export or there is no comparable
A
price in the country of export, the normal value shall be determined
with reference to its price in the country of origin.
(IA). Where the Central Government, on such inquiry as it may
consider necessary, is of the opinion that circumvention of antidumping duty imposed under sub-section ( 1) has taken place, either
B
by altering the description or name or composition of the article
subject to such anti- dumping duty or by import Of such article in
an unassembled or dissembled form or by changing the country
of its origin or export or in any other manner, whereby the antidumping duty so imposed is rendered ineffective, it may extend
the anti-dumping duty to such article or an article originating in or
exported from such country, as the case may be.
c
(2) The Central Government may, pending the determination in
accordance with the provisions of this section and the rules made
thereunder of the normal value and the margin of dumping in relation
to any article, impose on the importation of such article into India
D
an anti-dumping duty on the basis of a provisional estimate of
such value and margin and if such anti- dumping duty exceeds the
margin as so determined, -
(a) the Central Government shall, having regard to such
determination and as soon as may be after such determination,
reduce such anti-dumping duty; and
(b) refund shall be made of so much of the anti- dumping duty
which has been collected as is in excess of the anti-dumping dnty
as so reduced.
(2A) Notwithstanding anything contained in sub-section (1) and
sub-section (2), a notification issued under sub-section ( 1) or any
anti-dumping duty imposed under sub-section (2), unless
specifically made applicable in such notification or such imposition,
as the case may be, shall not apply to articles imported by a hundred
E
F
per cent export-oriented undertaking or a unit in a free trade zone
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or in a special economic zone.
Explanation. - For the purposes of this section, the expressions
"hundred per cent export-oriented undertaking'', "free trade zone"
and "special economic zone" shall have the meanings assigned to
them in Explanations 2 to sub-section (f) of section 3 of Central
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A
Excise Act, 1944.
B
c
D
E
(3) If the Central Government, in respect of the dumped article
under inquiry, is of the opinion that -
(i) there is a history of dumping which caused injury or that the
importer was, or should have been, aware that the exporter practices
dumping and that such dumping would cause injury; and
(ii) the injury is caused by massive dumping of an article imported
in a relatively short time which in the light of the timing and the
volume of imported article dumped and other circumstances is
likely to seriously undermine the remedial effect of the antidumping duty liable to be levied, the Central Government may, by
notification in the Official Gazette, levy anti-dumping duty
retrospectively from a date prior to the date of imposition of antidumping duty under sub-section (2) but not beyond ninety days
from the date of notification under that sub-section, and
notwithstanding anything contained in any other law for the time
being in force, such duty shall be payable at such rate and from
such date as may be specified in the notification.
(4) The anti-dumping duty chargeable under this section shall be
in addition to any other duty imposed under this Act or under any
other law for the time being in force.
(5) The anti-dumping duty imposed under this section shall, unless
revoked earlier, cease to have effect on the expiry of five years
from the date of such imposition:
Provided that if the Central Government, in a review, is of the
F
opinion that the cessation of such duty is likely to lead to
continuation or recurrence of dumping and injury, it may, from
time to time, extend the period of such imposition for a further
period of five years and such further period shall commence from
the date of order of such extension.
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Provided further that where a review initiated before the expiry
of the aforesaid period of five years has not come to a conclusion
before such expiry, the anti-dumping duty may continue to remain
in force pending the outcome of such a review for a further period
not exceeding one year.
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(6) The margin of dumping as referred to in sub- section (I) or
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DESIGNATED AUTHORITY, D.A.D.A.S. [DIPAK MISRA, J.]
sub-section (2) shall, from time to time, be ascertained and
A
determined by the Central Government, after such inquiry as it
may consider necessary and the Central Government may, by
notification in the Official Gazette, make rules for the purposes of
this section, and without prejudice to the generality of the foregoing
such rules may provide for the manner in which articles liable for
any anti-dumping duty under this section may be identified and
for the manner in which the export price and the normal value of
and the margin of dumping in relation to, such articles may be
determined and for the assessment and collection of such antidumping duty.
(6A) The margin of dumping in relation to an article, exported by
an exporter or producer, under inquiry under sub- section (6) shall
be determined on the basis of records concerning normal value
and export price maintained, and information provided, by such
exporter or producer:
B
c
Provided that where an exporter or producer fails to provide such
D
records or information, the margin of dumping for such exporter
or producer shall be determined on the basis of facts available.;
(7) Every notification issued under this section shall, as soon as
may be after it is issued, be laid before each House of Parliament.
(8) The provisions of the Customs Act, 1962, (52of1962) and the
rules and regulations made thereunder, including those relating to
the date for determination of rate of duty, assessment, non-levy,
short levy, refunds, interest, appeals, offences and penalties shall,
as far as may be, apply to the duty chargeable under this section
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as they apply in relation to duties leviable under that Act."
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15. As we find the said Section is quite a comprehensive provision
and deals with various facts covering "margin of dumping", "export price",
"normal value", etc. It clearly stipulates that it is an additional duty. The
said duty is to be imposed on various criteria. In this regard, we may
usefully reproduce Rule 5 of the Anti-Dumping Rules. It reads as follows:-
G
"Rule 5. Initiation of investigation. - (I) Except as provided in
sub-rule (4), the designated authority shall initiate an investigation
to determine the existence, degree and effect of any alleged
dumping only upon receipt of a written application by or on behalf
of the domestic industry.
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(2) An application under sub-rule (1) shall be in the form as may
be specified by the designated authority and the application shall
be supported by evidence of -
B
(a) dumping
(b) injury, where applicable, and
(c) where applicable, a causal link between such dumped imports
and alleged injury.
(3) The designated authority shall not initiate an investigation
pursuant to an application made under sub-rule (l) unless -
C
(a) it determines, on the basis of an examination of the degree of
support for, or opposition to the application expressed by domestic
producers of the like product, that the application has been made
by or on behalf of the domestic industry :
Provided that no investigation shall be initiated if domestic
D
producers expressly supporting the application account for less
than twenty five per cent of the total production of the like article
by the domestic industry, and
(b) it examines the accuracy and adequacy of the evidence
provided in the application and satisfies itself that there is sufficient
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evidence regarding -
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(i) dumping,
(ii) injury, where applicable; and
(iii) where applicable, a causal link between such dumped imports
and the alleged injury, to justify the initiation of an investigation.
Explanation. - For the purpose of this rule the application shall be
deemed to have been made by or on behalf of the domestic industry,
if it is supported by those domestic producers whose collective
output constitute more than fifty per cent of the total production
of the like article produced by that portion of the domestic industry
expressing either support for or opposition, as the case may be, to
the application.
( 4) Notwithstanding anything contained in sub-rule ( l) the
designated authority may initiate an investigation suo motu if it is
satisfied from the information received from the Collector of
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DESIGNATED AUTHORITY, D.A.D.A.S. [DIPAK MISRA, J.]
Customs appointed under the Customs Act, 1962 (52of1962) or A
from any other source that sufficient evidence exists as to the
existence of the circumstances referred to in clause (b) of subrule (3).
(5) The designated authority shall notify the government of the
exporting country before proceeding to initiate an investigation."
B
16. Rule 1 I deals with determination of injury. Rule 17 provides
for final findings. To understand the import of the Section and the AntiDumping Rules, we may reproduce a passage from the S&S Enterprise
.v. Designated Authority and others':-
"In our opinion, the interpretation of Rule 14( d) by Respondent
No.I and the Tribunal is incorrect and contrary to its language.
c
The imposition of dumping duty is under Section 9A of the Customs
Tariff Act, 1975 and the Rules and is the outcome of the General
Agreement on Tariff and Trade (GAIT) to which India is a party.
The purpose behind the imposition of the duty is to curb unfair
D
trade practices resorted to by exporters of a particular country of
flooding the domestic markets with goods at rates which are lower
than the rate at which the exporters normally sell the same or like
goods in their own countries so as to cause or be likely to cause
injury to the domestic market. The levy of dumping duty is a method
recognized by GAIT which seeks to remedy the injury and at the
same time balances the right of exporters from other countries to
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sell their products within the country with the interest of the
domestic markets.