Rajasthan Textile Mills Association v. The Director General of Anti Dumping
2002-05-29
HARBANS LAL, N.N.MATHUR
body2002
DigiLaw.ai
JUDGMENT 1. :- The first petitioner Rajasthan Textile Mills Association is a Society registered under the Societies Registration Act having 37 textile mills as its constituent members. All of them are operating in the State of Rajasthan. The second petitioner i.e. the Indian Spinners Association is also a registered Society having 42 textile mills operating in the State of Rajasthan, Maharashtra, Haryana, Himachal Pradesh etc. The list of the member textile Mills of the first and second petitioners has been given in the Schedule appended to the writ petition. All the constituent Mills of the Association are importers and industrial users of Polyester Stable Fibre, hereinafter referred-to as "PSF". The petitioner Associations have sought direction to quash the initiation notification dated 25th June, 2001 by which anti dumping investigation concerning imports of certain "PSF" originating in or exported from Korea R.P., Malaysia, Taiwan and Thailand was initiated. The petitioners have also challenged the order dated 15.10.2001 passed by the Designated Authority in compliance of the orders of the Karnatak High Court in M/s Madura Coats Limited justifying the initiation of the investigation. The second writ petition being D.B. Civil Writ Petition No. 718/2002 has been filed by the same petitioners seeking direction to quash the preliminary findings of the Designated Authority dated 16.1.2002 recommending levy of provisional anti dumping duty on import of subject goods originating in or exported from the subject Countries. 2. The facts giving rise to the instant writ petitions are that the Association of Synthetic Fibre Industry on behalf of the Indian Domestic PSF Industry filed an application under sub-rule (1) in accordance with sub-rule (2) of Customs Tariff (Identification, Assessment and Collection of Anti Dumping Duty on Dumped Articles and for Determination of Injury) Rules 1995, hereinafter referred-to as 'the Rules of 1995' before the first respondent i.e. the Designated Authority. The applicant respondent Companies namely M/s Reliance Industries Limited and M/s Indo Rama Synthetics (India) Ltd. alongwith the supporting Companies viz; M/s India Polyfibres Ltd., M/s Orissa Polyfibres Limited and M/s'Terene Fibres India (P) Limited claim to have 83% of the total domestic production of the subject goods. According to the applicants, PSF of the description mentioned in the application are being dumped in India from five countries viz; Indonesia, Korea R.P., Malaysia, Taiwan and Thailand. The dumping by these countries has caused serious price depreciation and margin erosion.
According to the applicants, PSF of the description mentioned in the application are being dumped in India from five countries viz; Indonesia, Korea R.P., Malaysia, Taiwan and Thailand. The dumping by these countries has caused serious price depreciation and margin erosion. It is alleged that inspite of the fact that the PSF market in India is showing healthy growth, the domestic industries in the country face with the dumped imports at extremely low price, has no other alternative but to match landed cost of imports/offers from these countries in order to protect its market share. Thus, according to the applicants, the adverse impact of the dumped imports on the domestic industries has been that it has not been able to realise a reasonable selling price which could assure a fair return on its investment. The grievances of the applicant respondents can be summarised as follows : a. The dumping margins from the subject Countries are significant and volume of imports is more than de minimus; b. The total import from the subject Countries of subject goods have significantly increased in absolute terms as also relative to the total PSF imports; c. The applicants had to sell at the lower price to maintain their market share which led to actual losses or extremely low profitability; d. The Indian industry has thus not only suffered material injury on account of dumping from the subject Countries but is also facing threat of material injury to the domestic industry in the foreseeable scenario. 3. The Designated Authority on preliminary scrutiny of the application found certain deficiencies, which were subsequently rectified. The period of investigation as suggested from March, 2000 to November, 2000 was changed to 1.1.2000 to 30th September, 2000. Accordingly, the applicants submitted a revised petition taking 1.1.2000 to 30th September, 2000 as the period of investigation. The Designated Authority on the basis of the evidence submitted prima facie found that there was sufficient evidence of dumping of the subject product from the exporters of the four Countries excludin$. Indonesia. The Designated Authority also found the prima facie evidence with respect to the statement on normal value, export price and dumping margin.
The Designated Authority on the basis of the evidence submitted prima facie found that there was sufficient evidence of dumping of the subject product from the exporters of the four Countries excludin$. Indonesia. The Designated Authority also found the prima facie evidence with respect to the statement on normal value, export price and dumping margin. It was further found that there was significant increase in the market share of the imports of the subject goods from the subject Countries; decline in the sales realization; losses of the negligible profits of the domestic industry and failure of the domestic industry to realise fair and reasonable price from sale of the subject goods. This prima facie indicated collectively and cumulatively that the domestic industry suffered material injury on account of dumping. The Designate Authority also found that huge surplus production in the subject Countries constitutes a threat of material injury to the domestic industries. Thus, the Designated Authority decided to initiate investigation against the alleged dumped imports of certain PSF originating from the four Countries. Accordingly, the Authority issued impugned public notice dated 25th June, 2001 initiating anti dumping investigation concerning import of certain PSF being cleared under Chapter 55 of the Customs Tariff Act, 1975 originating in or exported from Korea R.P., Malaysia, Taiwan and Thailand. The Authority forwarded a copy of the public notice to the Associations of the manufacturers in respective Country of the export and gave them an opportunity to make their views known in writing within a period of forty days from the receipt of the letter. A copy was also forwarded to known importers and the known users of PSF and advised them to submit their views. A request was also made to the Central Board of Excise and Customs to arrange details of import of certain PSF. The Authority in accordance with the provisions of Rule 6(4) sent a questionnaire to elicit the relevant information to the manufacturers in respective Countries of export. 4. One of the textile Mills viz; Madhura Coats Limited and some other Companies challenged the initiation Notification dated 25th June, 2001 by way of petition before the Karnataka High Court. Number of contentions including jurisdiction to initiate a proceeding were raised.
4. One of the textile Mills viz; Madhura Coats Limited and some other Companies challenged the initiation Notification dated 25th June, 2001 by way of petition before the Karnataka High Court. Number of contentions including jurisdiction to initiate a proceeding were raised. A learned Single Judge of the Karnataka High Court disposed-of the writ petition by order dated 6th September, 2001 giving liberty to the petitioners to file objections before the Designated Authority. In compliance of the order of the Karnataka High Court, the Designated Authority considered all the objections filed before him and rejected them by the impugned order dated 15.10.2001. The said order was challenged by way of second writ petition before the Karnataka High Court, which was dismissed by order dated 4.12.2001. While dismissing the writ petition, the learned Single Judge gave liberty to the parties affected to file their response before the Designated Authority within a period of fifteen days from the date of the order. We are told that against the said judgment, a Special Appeal has been admitted by a Division Bench and the same is pending hearing. 5. Before addressing to the factual and legal aspect of the matter, it would be convenient to acquaint with the relevant provisions of the Customs Tariff Act, 1975 (as amended in 1995 and 2000) and the Anti Dumping Rules. These laws are based on Agreement on anti dumping article which is in pursuance of Article VI of GATT (General Agreement on Tariff and Trade), 1994. In the last Century, there was a movement for multilateral conventions to establish a common code concerning the world trade. The most important among them was "GATT" (General Agreement on Tariff & Trade). It was set up in the year 1948 providing the forum for negotiating lower custom duty rates and other trade barriers. The text of General Agreement spelled out important rules, particularly non-discrimination. The unevenness of tariff levels and application of the number of reciprocal advantages induce the member Countries of the "GATT" to devise the new techniques for establishment of new international economic order.Article VI of the GATT, 1994 allows members to apply for anti-dumping measures on imports of a product with an export price below its "normal value", if such imports cause or threaten to cause material injury to a domestic industry.
Detailed rules covering the application of such measures, which take the form of either duties or undertakings on pricing by the exporter were negotiated during the Tokyo Round. The agreement was substantively revised during the Uruguay Round, emerging of W.T.O. as successor to GATT with effect from January, 1995. The WTO Agreement provides for greater clarity and more detailed rules in relation to the method of determining whether a product is dumped, including the calculation of a "constructed" normal value where no direct comparison with prices on the domestic market of the exporting country is possible. It sets out procedure to be followed in initiating and conducting anti-dumping investigations, as well as additional criteria to be taken into account in determining whether dumped imports cause material injury to a domestic industry. Pursuant to Article 18.5 of the Agreement and a decision of the Committee on Anti-Dumping Practices, the member Countries were required to notify their anti-dumping legislation to the Committee by 15th March, 1995. The obligation to notify legislation is a continuing one. With a view to bring Indian legislation on countervailing and anti-dumping actions into conformity with the W.T.O. Agreement on subsidies and countervailing measures and implementation of Article VI of the GATT 1994, the Customs Act, 1975 was amended by Customs Tariff (Amendment) Act, 1995. 6. Section 9A of the Customs Tariff Act, 1975 provides for levy of anti-dumping duty on the dumped articles. Where any article is exported from any 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.Section 9A of the Act of 1975 reads as follows "Section 9A. Anti-dumping duty on dumped articles.-(1) Where any article is exported from any country or territory (hereinafter 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.
Explanation.-For the purposes of this section, (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 my 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, means (i) the comparable price, in the ordinary course of trade, for the like article meant 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 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 either (a) comparable representative price of the like article when exported from the exporting country or territory or 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 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 merely transshipped through the country of export or such article is not produced in the country of export or there is no comparable price in the country of export, the normal value shall be determined with reference to its price in the country of origin. 7.
7. Section 9A empowers the Central Government to levy anti- dumping duty. Thus, dumping occurs when the export price of the goods imported in India is less than the normal value of the like articles sold in the domestic market of the exporter. Sub-section (1) of Section 9A empowers the Central Government to levy anti-dumping duty on the occurrence of dumping. It is levied on article exported from any country upon importation of such article in India, when the export price of the goods imported is less than the normal value of the like articles sold in the domestic market of the exporter. The normal value is the comparable price at which the goods under complaint are sold, in the ordinary course of trade, in the domestic market of the exporting country or territory. If the normal value cannot be determined by means of domestic sales, the Act provides for the following two alternative methods : (i) Comparable representative export price to an appropriate third country, or (ii) Cost of production in the country of on n with reasonable addition for administrative, selling and general costs and for profits. The sales of the Like product in the domestic market of the exporting country or sales to a third party at prices below per unit (fixed and variable) costs of production plus administrative, selling and general costs are treated as not being in the ordinary course of trade by reason or price and may be disregarded in determining normal value. This is done when the Authority determines that such sales are made within an extended period of time in substantial quantities and are at prices which do not provide for the recovery of all' costs within a reasonable period of time. Similarly, if the "export price" of the goods imported into India is the price paid or payable for the goods by the first independent buyer. The Export price of the goods allegedly dumped into India means the price at which it is exported to India. It is generally the CIF value means the adjustments on account of ocean freight, insurance, commission etc. so as to arrive at the value at ex-factory level.
The Export price of the goods allegedly dumped into India means the price at which it is exported to India. It is generally the CIF value means the adjustments on account of ocean freight, insurance, commission etc. so as to arrive at the value at ex-factory level. If there is no export price or the export price is not reliable 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. The margin of dumping refers to the difference between the Normal Value of the like article and the export price of the product under consideration., Margin of dumping is normally established on the basis of : (i) a comparison of weighted average Normal Value with a weighted average of prices of comparable export transactions; or (ii) comparison of normal values and export prices on a transaction to transaction basis. A Normal Value established on a weighted average basis may be compared to prices of individual export transactions if the Designated Authority finds a pattern of export prices that differ significantly amount different purchasers, regions, time period etc. It is significant to note that the alternative method of comparing the normal values and export prices is a major change introduced after the Uruguay Round. The margin of dumping is generally expressed as a percentage of the export price. 8. LEVY OF ANTI DUMPING DUTY - PROVISIONALLY : SECTION 9A. (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 an anti duping 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 such much of the anti-dumping duty which has been collected as is in excess of the anti-dumping duty as so reduced.
LEVY OF ANTI DUMPING DUTY RETROSPECTIVELY : (3) If the Central Government, in respect of the dumped article under inquiry, if of the opinion that (i) there is a history of dumping which cause injury or that the importer was, or should have been, aware that the exporter practises 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 the imported article dumped and other circumstances is likely to seriously undermine the remedial effect of the anti-dumping 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 anti-dumping 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 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. ANTI DUMPING DUTY IN ADDITION TO OTHER DUTY: (4) The anti-dumping duty chargeable under this section shall be in addition to any other duty imposed under this Act or 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 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: 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.
POWER TO MAKE RULES PROVIDING MANNER OF LEVY OF ANTI DUMPING DUTY: (6) The margin of dumping as referred to in sub-section (1) or sub-section (2) shall, from time to time, be ascertained and 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 rule 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 anti-dumping duty. (7) Every notification issued under this section shall, as soon as may be after it is issued, be laid before each House of Parliament. APPLICABILITY OF CUSTOMS ACT IN RELATION TO NON-LEVY, SHORT LEVY, REFUND & APPEALS: (8) The provisions of the Customs Act 1962 (52 of 1962) and the rules and regulations made thereunder, relating to non-levy, short levy, refunds and appeals shall, as far as may be, apply to the duchargeable under this section as they apply in relation to duties leviable under that Act. Sub-section (2) of Section 9A empowers the Central Government to levy provisional duty not exceeding the margin of dumping on the basis of the preliminary finding given by the Designated Authority. In case, there is a history of dumping, the Central Government can levy duty retrospectively as provided under sub-section (2). Sub-section (4) makes it clear that anti-dumping duty shall be in addition to the other duty. Sub-section (5) provides the life of five years to anti-dumping duty, unless on review, the time is extended by the Central Government. Sub-section (6) empowers the Central Government to frame the rules providing the manner of levy of anti dumping duty. 9. Section 9AA provides for refund of anti dumping duty in certain cases. Section 9B prohibits levy of duty under Section 9 or Section 9A in certain cases. Section 9C provides remedy of appeal against the order of determination or review thereof regarding the existence, degree and effect of any subsidy or dumping in relation to import of any article before the CEGAT. 10.
Section 9B prohibits levy of duty under Section 9 or Section 9A in certain cases. Section 9C provides remedy of appeal against the order of determination or review thereof regarding the existence, degree and effect of any subsidy or dumping in relation to import of any article before the CEGAT. 10. The Central Government in exercise of powers conferred by sub-section (6) of Section 9A and sub-section (2) of Section 9B of the Customs Tariff Act, 1975 and in supersession of Customs Tariff (Identification, Assessment and Collection of Duty or Additional Duty on Dumped Articles and for Determination of Injury) Rules 1985, has framed the rules in the name of Customs Tariff (Identification, Assessment and Collection of Anti Dumping Duty on Dumped Articles and for Determination of Injury) Rules 1995, hereinafter referred-to as "the Rules of 1995", providing a detailed procedure in the matter of levy of anti dumping duty. Rule 2 is the definition clause. It interalia provides the definition of the expression "domestic industry" and "interested party" as follows:2.
Rule 2 is the definition clause. It interalia provides the definition of the expression "domestic industry" and "interested party" as follows:2. Definitions: (b) "domestic industry" means the domestic producers as a whole engaged in the manufacture of the like article and any activity connected therewith or those whose collective output of the said article constitutes a major proportion of the total domestic production of that article except when such producers are related to the exporters or importers of the alleged dumped article or are themselves importers of the alleged dumped article or are themselves importers thereof in which case such producers may be deemed not to form part of domestic industry: Provided that in exceptional circumstances referred to in sub-rule (3) of Rule 11, the domestic industry in relation to the article in question shall be deemed to compromise two or more competitive markets and the producers within each of such market a separate industry, if (i) the producers within such a market sell all or almost all of their production of the article in question in that market; and (ii) the demand in the market is not in any substantial degree supplied by producers of the said article located elsewhere in the territory; Explanation.- For the purposes of this clause, (i) producers shall be deemed to be related to exporters or importers only if, (a) one of them directly or indirectly controls the other; or (b) both of them are directly or indirectly controlled by a third person; or (c) together they directly or indirectly control a third person, subject to the condition that there are grounds for believing or suspecting that the effect of the relationship is such as to cause the producers to behave differently from non-related producers. (ii) a producer shall be deemed to control another producer when the former is legally or operationally in a position to exercise restraint or direction over the latter.
(ii) a producer shall be deemed to control another producer when the former is legally or operationally in a position to exercise restraint or direction over the latter. (C) "interested party" includes (i) an exporter or a foreign producer or the importer of an article subject to investigation for being dumped in India, or a trader or business association a majority of the members of which are producers, exporters or importers of such an article; (ii) the Government of the exporting country; and (iii) a producer of the like article in India or a trade and business association a majority of the members of which produce the like article in India;" 11. It, is thus evident that the expression "domestic industry" means the Indian producers of like goods as a whole or those producers whose collective output constitutes a major proportion of total Indian production. Producers who are related to exporters or importers or themselves imports the allegedly dumped goods, may be deemed not to form part of the domestic industry. Similarly, "interested parties" to an anti-dumping investigation include: (i) the domestic industry on whose complaint the proceedings are initiated; (ii) The exporters or the foreign producers of the like articles subject to investigation; (iii) The importers of the same article allegedly dumped into India; (iv) The Government of the exporting country/countries. (v) The trade or business associations of the domestic producers/ importers/user industries of the dumped product. 12. Rule 3 provides for appointment of the Designated Authority. The Central Government may, by notification in the Official Gazette, appoint a person not below the rank of a Joint Secretary to the Government of India or such other person as the Central Government deems fit as the designated authority for purposes of these rules. In the instant case, the second respondent i.e. the Designated Authority is appointed under the said rules. He functions in the Ministry of Commerce of the Government of India. 13. Rule 4 imposes certain duties on the designated authority. The rule is extracted as follows: "4. Duties of the designated authority.
In the instant case, the second respondent i.e. the Designated Authority is appointed under the said rules. He functions in the Ministry of Commerce of the Government of India. 13. Rule 4 imposes certain duties on the designated authority. The rule is extracted as follows: "4. Duties of the designated authority. (1) It shall be the duty of the designated authority in accordance with these mes (a) to investigate as to the existence, degree and effect of any alleged dumping, in relation to import of any article; (b) to identify the article liable for anti-dumping duty; (c) to submit its findings, provisional or otherwise to Central Government as to (i) normal value, export price and the margin of dumping in relation to the article under investigation and (ii) the injury or threat of injury to an industry established in India or material retardation to the establishment of an industry in India consequent upon the import of such article from the specified countries. (d) to recommend the amount of anti-dumping duty equal to the margin of dumping or less, which if levied, would remove the injury to the domestic industry, and the date of commencement of such duty; and (e) to review the need for continuance of anti-dumping duty." 14. Rule 5 is the most relevant provision in the present context. The said rule provides the procedure for initiation of investigation. The rule reads thus- "5. Initiation of investigation. (1) 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. (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 (a) dumping, (b) injury, where applicable, and (c) where applicable, a causal link between such dumped imports and alleged injury.
(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 (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 (1) unless (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 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 evidence regarding - (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 percent 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 (1) the designated authority may initiate an investigation suo motu if it is satisfied from the information received from the Commissioner of Customs appointed under the Customs Act, 1962 (52 of 1962) or from any other source that sufficient evidence exists as to the existence of the circumstances referred to in clause (b) of sub- rule (3). (5) The designated authority shall notify the Government of the exporting country before proceeding to initiate an investigation." 15. After the decision is taken to the initiate the investigation, the Designated Authority proceeds in the manner provided under Rule 6, which reads as follows: 6. Principles governing investigations.
(5) The designated authority shall notify the Government of the exporting country before proceeding to initiate an investigation." 15. After the decision is taken to the initiate the investigation, the Designated Authority proceeds in the manner provided under Rule 6, which reads as follows: 6. Principles governing investigations. (1) The designated authority shall after it has decided to initiate investigation to determine the existence, degree- and effect of any alleged dumping of any article, issue a public notice notifying its decision and such public notice shall, inter alia, contain adequate information of the following: (i) the name of the exporting country or countries and the article involved; (ii) the date of initiation of the investigation; (iii) the basis on which dumping is alleged in the application; (iv) a summary of the facts on which the allegation of injury is based; (v) the address to which representations by interested parties should be directed; and (vi) the time-limits allowed to interested parties for making their views known. (2) A copy of the public notice shall be forwarded by the designated authority to the known exporters of the article alleged to have been dumped, the Governments of the exporting countries concerned and other interested parties. (3) The designated authority shall also provide a copy of the application referred to in sub-rule (1) of Rule 5 to (i) the known exporters or to the concerned trade association where the number of exporters is large, and] (ii) the governments of the exporting countries; Provided that the designated authority shall also make available a copy of the application to any other interested party who makes a request therefor in writing. (4) The designated authority may issue a notice calling for any information, in such form as may be specified by it, from the exporters, foreign producers and other interested parties and such information shall be furnished by such persons in writing within thirty days from the date of receipt of the notice or within such extended period as the designated authority may allow on sufficient cause being shown. Explanation: For the purpose of this sub-rule, the notice calling for information and other documents shall be deemed to have been received one week from the date on which it was sent by the designated authority or transmitted to the appropriate diplomatic representative of the exporting country.
Explanation: For the purpose of this sub-rule, the notice calling for information and other documents shall be deemed to have been received one week from the date on which it was sent by the designated authority or transmitted to the appropriate diplomatic representative of the exporting country. (5) The designated authority shall also provide opportunity to the industrial users of the article under investigation, and to representative consumer organisation in cases where the article is commonly sold at the retail level, to furnish information which is relevant to the investigation regarding dumping, injury where applicable, and casualty. (6) The designated authority may allow an interested party or its representative to present the information relevant to the investigation orally but such oral information shall be taken into consideration by the designated authority only when it is subsequently reproduced in writing. (7) The designated authority shall make available the evidence presented to it by one interested party to the other interested parties, participating in the investigation. (8) In a case where an interested party refuses access to, or otherwise does not provide necessary information within a reasonable period or significantly impedes the investigation, the designated authority -may record its finding on the basis of the facts available to it and make such recommendations to the Central Government as it deems fit under such circumstances." Rule 7 of the Rules of 1995 provides for Confidential information which reads as follows: 7. Confidential information.- (1) Notwithstanding anything contained in sub-Hiles (2), (3) and (7) of rule 6, sub-rule (2) of rule 12, sub-rule (4) of rule 15 and sub-rule (1) 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. (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.
(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 (2), 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." Rule 8 provides for the accuracy of the information. Rule 9 provides for investigation in the territory of other specified countries. Rule 10 provides for the impact and for determination of normal value, export price and margin of dumping, which reads as under: "10. Determination of normal value, export price and margin of dumping.- An article shall be considered as being dumped if it is exported from a country or territory to India at a price less than its normal value and in such circumstances the designated authority shall determine the normal value, export rice and the margin of dumping taking into account, inter alia, the principles laid down in Annexure 1 to these rules." Rule 11 provides for impact and determination of injury to the domestic industry by dumping of imported goods which reads as follows: "11. Determination of injury. - (1) In the case of imports from specified countries, the designated authority shall record a further finding that import of such article into India causes or threatens material injury to any established industry in India or materially retards the establishment of any industry in India. (2) The designated authority shall determine the injury to domestic industry, threat of injury to domestic industry, material retardation to establishment of domestic industry and a causal link between dumped imports and injury, taking into account all relevant facts, including the volume of dumped imports, their effect on price in the domestic market for like articles and the consequent effect of such imports on domestic producers of such articles and in accordance with the principles set out in Annexure II to these rules.
(3) The designated authority may, in exceptional cases, give a finding as to the existence of injury even where a substantial portion of the domestic industry is not injured, if (i) There is a concentration of dumped imports into as isolated market, and (ii) the dumped articles are causing injury to the producers of all or almost all of the production within such market." Under Rule 12, the Designated Authority is required to give a preliminary finding. The rule reads as follows: "12. Preliminary findings.- (1) The designated authority shall proceed expeditiously with the conduct of the investigation and shall, in appropriate cases, record a preliminary finding regarding export price, normal value and margin of dumping and in respect of imports from specified countries, it shall also record a further finding regarding injury to the domestic industry and such finding shall contain sufficiently detailed information for the preliminary determination on dumping and injury and shall refer to the matters of fact and law which have led to arguments being accepted or rejected. It will also contain: (i) the names of the suppliers, or when this is impracticable, the supplying countries involved; (ii) a description of the article which is sufficient for customs purposes; (iii) the margins of dumping established and a full explanation of the reasons for the methodology used in the establishment and comparison of the export price and the normal value; (iv) considerations relevant to the injury determination; and (v) the main reasons leading to the determination. (2) The designated authority shall issue a public notice recording its preliminary findings." After receipt of the preliminary findings, the Central Government may, on the basis of the preliminary finding of the Designated Authority, levy a provisional duty not exceeding the margin of dumping under Rule 13.Rule 14 provides for termination of investigation. Rule 15 provides for suspension or termination of investigation on price undertaking. Rule 16 casts a duty on the Designated Authority to inform all interested parties of the essential facts under consideration which form the basis for its decision before giving its final finding. Lastly, Rule 17 provides for final findings of the Designated Authority. Rule 18 provides for levy of duty based on such final finding. 16.
Rule 16 casts a duty on the Designated Authority to inform all interested parties of the essential facts under consideration which form the basis for its decision before giving its final finding. Lastly, Rule 17 provides for final findings of the Designated Authority. Rule 18 provides for levy of duty based on such final finding. 16. Thus, on receipt of an application in prescribed proforma providing requisite information by or on behalf of the domestic industry, the Designated Authority appointed under Rule 3 of the Rules of 1995 on being satisfied that there is sufficient evidence in the application with regard to the dumping, material injury and causal link, may initiate the investigation by a public notice. The Designated Authority can also initiate investigation suo motu, if he is satisfied with the conditions provided under Rule 5(1)(a) and (b). Thereafter, the investigation is conducted in accordance with the elaborate procedure provided under the rule, wherein the adequate opportunity is given to all interested parties to present their case with due regard to the principles of natural. justice. The process of investigation interalia envisages declaration of preliminary finding under Rule 12. On the basis of the preliminary finding recorded by the Designated Authority, the Central Government may impose a provisional duty not exceeding the margin of dumping. Subsequent to the preliminary findings, the Designated Authority provides the adequate opportunity of written as well as oral submissions to all the interested parties and after detailed verification, disclosure etc., the investigation is finalised. After the Designated Authority makes its final recommendation in accordance with Rule 17, the Central Government may levy anti dumping duty not exceeding the margin of dumping. 17. The findings of the Designated Authority are in the nature of recommendations and it is not obligatory on the Central Government to accept the same. A remedy of appeal against the decision of the Central Government is provided under Section 9C of the Act of 1975 before the CEGAT. 18. Mr. N.M. Lodha, learned Senior Central Government Standing Counsel has raised number of preliminary objections with respect to maintainability of the writ petition. The objection is as to non-maintainability of the joint writ petition in disregard to Rule 375 (4) of the Rajasthan High Court Rules. Another objection pertains to latches i.e. delay in filing the writ petition. The third objection pertains to conduct.
The objection is as to non-maintainability of the joint writ petition in disregard to Rule 375 (4) of the Rajasthan High Court Rules. Another objection pertains to latches i.e. delay in filing the writ petition. The third objection pertains to conduct. It is submitted that the instant writ petition has been filed at the instance of MIs Madura Coats Limited having failed before the Karnataka High Court. It is vehemently argued that the writ petition is premature inasmuch as so far as the first writ petition is concerned, only a decision has been taken to initiate investigation. In the second writ petition, the challenge is to preliminary finding, which is recommendatory in nature. It is submitted that the investigation is still in progress and the final finding is yet to be recorded under Rule 17. The last objection is that the petitioner has a remedy by way of appeal before the CEGAT under Section 9C of the Act of 1975. 19. Mr. K. Venugopal learned counsel appearing for the domestic industry has supported preliminary objections. It is submitted that the preliminary finding of the Designated Authority is in the nature of recommendation to the Central Government. It is for the Central Government to accept or not to accept the finding. It is submitted that levy of provisional duty under Rule 13 of the Rules of 1995 is the legislative activity intended to protect the domestic PSF industries and any judicial interference with the process of such levy will disturb the time schedule provided under the Rules and may also cause irreparable damage to the domestic PSF industry. It is also submitted by Mr. Venugopal that since the levy of excise duty provisional or final is on the exporter, as such, the user industry has no locus to maintain the writ petition challenging the initiation notification or the preliminary finding. Mr. Venugopal has placed reliance on a decision of the Apex Court in (1) Saurashtra Chemicals Ltd. V. Union of India reported in 2000 (118) E.L.T. 305 (S.C.) . The brief order of the Apex Court is extracted as follows: "We see no reason whatsoever to entertain these special leave petitions. It is perfectly clear now that we have seen the provisions of the Act that the order of the Designation Authority is purely recommendatory.
The brief order of the Apex Court is extracted as follows: "We see no reason whatsoever to entertain these special leave petitions. It is perfectly clear now that we have seen the provisions of the Act that the order of the Designation Authority is purely recommendatory. The appeal that lies is against the determination and that determination has to be made by the Central Government. For this reason, we decline to exercise jurisdiction under Article 136 of the Constitution of India and dismiss the special leave petitions." 20. Learned counsel has also relied on an unreported decision of the Delhi High Court dated 7.8.97 rendered in the case of the Indian Express Newspaper v. Union of India. In the said case, the preliminary finding on anti dumping investigation concerning imports of newspaper prints was challenged. The maintainability of the writ petition was objected on the similar grounds. The Court held thus "We are not impressed by the several submission so forcefully advanced by the learned counsel for the petitioners. (In our opinion, the petitions are pre-mature. The petitioners are at liberty to raise their contentions whatever they may be before the Designated Authority who is still seized of the investigation and is admittedly holding a hearing today. Inspite of the preliminary finding having been submitted to the Central Govt. imposition of duty, whether provisional or otherwise, would not follow as a matter of course or routine.) The Central Government may or may not impose duty. If the Central Government may decide on favour of imposing duty, whether provisional or otherwise, the petitioners would have the remedy available to them under the law. It cannot be lost signt of that the imposition of provisional duty is guided by the paramount consideration of protecting the domestic newsprint industry and eliminating dumping. Tampering with the process midway, may delay the imposition of provisional duty, which if warranted otherwise would itself amount to causing an injury not capable of being repaired at all." 21. Learned counsel has also invited our attention to the order of the Karnataka High Court dated 4th December, 2001 rendered in Madura Coats Limited v. Directorate General "Writ Petition Nos. 41593 to 41596/2001, wherein the learned judge held that the High Court will normally not disturb the finding of Designated Authority.
Learned counsel has also invited our attention to the order of the Karnataka High Court dated 4th December, 2001 rendered in Madura Coats Limited v. Directorate General "Writ Petition Nos. 41593 to 41596/2001, wherein the learned judge held that the High Court will normally not disturb the finding of Designated Authority. The learned Judge having looked into the finding of the Designated Authority with respect to the impugned initiation notification, observed as follows : "The designated authority in its order dated 15.10.2001, commencing from para 59 onwards states, that the applicants have a standing to file an application and further says in its order, that based on the confidential and non-confidential evidence produced before it, the matter requires to be examined. This opinion requires to be framed (sic formed ?) by the designated authority based on the evidence made available and produced before it by the applicants. This Court normally in exercise of its judicial review would disturb the opinion of the designated authority or the Central Government. This Court only looks into whether the opinion formed by the designated authority is in consonance with the provisions of the Act and the Rules framed thereunder. This Court also will not interfere with the opinion formed by the designated authority or the Central Government unless that opinion is either wholly arbitrary or unreasonable or no reasonable person would come to such a conclusion or if it is in violation of statutory provisions. In my opinion, in the instant case, the designated authority rightly and correctly understanding the scope of Sections 9A and 9B and also Rule 5(1) to 5 (5) of the Rules, has initiated investigation proceedings on the application filed by the domestic industries. In my opinion, the designated authority has not committed any error and has not violated any of the statutory provisions, which calls for my interference." 22. Dr. Abhishek Manu Singhvi, Senior Advocate appearing for the petitioners, submitted that the High Court has power to issue in a fit case a writ prohibiting executive quasi judicial authority from acting without jurisdiction. It is argued that a statutory authority cannot enlarge the scope on jurisdictional fact. It is contended that when the jurisdiction of the authority depends upon a preliminary finding of fact, the High Court can independently determine upon its independent judgment as to whether the finding is correct or not.
It is argued that a statutory authority cannot enlarge the scope on jurisdictional fact. It is contended that when the jurisdiction of the authority depends upon a preliminary finding of fact, the High Court can independently determine upon its independent judgment as to whether the finding is correct or not. In support of the submission, he has relied upon number of decisions of the Apex Court. 23. In (2) Bengal Immunity Company V. State of Bihar, reported in AIR 1955 SC 661 , the writ petition was filed under Article 226 of the Constitution challenging the notice issued under Section 13 of the Bihar Sales Tax Act by the Superintendent, Commercial Taxes calling upon the Company to apply for registration and to submit returns showing its turnover for the specified period. The reason for issuing the notice as recited in the notice was that on information which had come to his possession the Superintendent was satisfied that the Company was liable to pay tax but had nevertheless wilfully failed to apply for registration under the Act. The writ petition was dismissed by the High Court on the ground of it being premature and it was observed that the petitioner should have responded to the notice instead of rushing to the court. The Apex Court did not agree with the view expressed by the High Court. It was observed that the High Court ignored the fact that the notice called upon the Company to forthwith get it registered as a dealer and to submit a return and to deposit the tax in a treasury, shall place upon it considerable hardship, harassment and liability. The Court observed thus: "It is, therefore, not reasonable to expect the person served with such an order or notice to ignore it on the ground that it is illegal, for he can only do so at his own risk and peril. This Court has said in the last mentioned case that a person placed in such a situation has the right to be told definitely by the power legal authority exactly where he stands and what he may or may not do." 24. In (3) Calcutta Discount Co.
This Court has said in the last mentioned case that a person placed in such a situation has the right to be told definitely by the power legal authority exactly where he stands and what he may or may not do." 24. In (3) Calcutta Discount Co. Ltd. V. Income tax Officer reported in AIR 1961 SC 372 , the Company applied to the High Court for issuing a writ under Article 226 of the Constitution quashing the notice issued under Section 34 of the Income Tax Act on the ground that the amendment to the said provision was not retrospective and, as such, the assessment for a particular year, has became barred. The writ petition was dismissed by the High Court. It was contended before the Supreme Court that the notice was without jurisdiction inasmuch as the condition precedent for the assumption of jurisdiction under Section 34 of the Act was not satisfied. The Court observed that the High Court has power to issue in a fit case an order prohibiting an executive authority from acting without jurisdiction more particularly in a case where such an action is likely to subject a person to lengthy proceedings and unnecessary harassment. The Court observed, thus: "When the Constitution confers on the High Courts the power to give relief, it becomes the duty of the Courts to give such relief in fit cases and the courts would be failing to perform their duty if relief is refused without adequate reasons. In the present case, we can find no reason for which relief should be refused." 25. The Apex Court in (4) Raja Anand Brahma Shah V. The State of Uttar Pradesh reported in AIR 1967 SC 1081 , has observed as follows: "It is well established that where the jurisdiction of an administrative authority depends upon a preliminary finding of fact the High Court is entitled, in a proceeding of writ of certiorari to determine, upon its independent judgment, whether or not that finding of fact is correct." 26. In (5) Vatticherukuru Village Panchayat V. Nori Venkatarama Deekshithulu reported in 1991 Supp (2) SCC 228, the Court observed that the jurisdiction of a tribunal created under statute may depend upon fulfilment of some condition precedent or upon existence of some particular fact.
In (5) Vatticherukuru Village Panchayat V. Nori Venkatarama Deekshithulu reported in 1991 Supp (2) SCC 228, the Court observed that the jurisdiction of a tribunal created under statute may depend upon fulfilment of some condition precedent or upon existence of some particular fact. The Court further observed that a tribunal cannot by a wrong decision with regard to collateral fact, give itself a jurisdiction, which it would not otherwise have had. 27. Dealing with the question of alternate remedy, the Apex Court in Raja Anand's case (supra) held that the existence of alternate remedy is always not a sufficient reason for refusing a party quick relief by a writ or order prohibiting an authority acting without jurisdiction or continuing such action. It is not necessary to trace all the judgments on the point involved. Suffice it to refer the decision of the Apex Court in (6) Whirlpool Corporation v. Registrar of Trade Marks reported in JT 1998 (7) SC 243, wherein the Court on review of almost all the cases on the point, reiterated three well established exceptions wherein writ jurisdiction does not operate bar, inspite of existence of statutory remedy. The Court held thus: "15. Under Article 226 of the Constitution, the High Court, having regard to the facts of the case, has a discretion to entertain or not to entertain a Writ Petition. But the High Court has imposed upon itself certain restrictions one of which is that if an effective and efficacious remedy is available, the High Court would not normally exercise its jurisdiction. But the alternative remedy has been consistently held by this Court not to operate as a bar in at least three contingencies, namely, where the Writ Petition has been filed for the enforcement of any of the Fundamental Rights or where there has been a violation of the principle of natural justice or where the order or proceedings are wholly without jurisdiction or the vires of an Act is challenged." 28. In (7) Rohtas Industries Ltd. v. S.D. Agarwal reported in AIR 1969 SC 707 , the appointment of Inspector to investigate the affairs of the Company and to report thereon under Section 237(b) came up for consideration. Before appointment of inspector under Section 237(b) by the Central Government, certain pre-conditions were also required to be satisfied as provided under Section 235.
Before appointment of inspector under Section 237(b) by the Central Government, certain pre-conditions were also required to be satisfied as provided under Section 235. On examining the provisions of Section 235 and 236, the Court found that the investigation required was of serious nature. The writ petition was opposed by the Government on the ground that the report of the Inspector being of recommendatory nature, was not binding. Further finding of the Inspector being finding of fact, no interference was called for by the High Court in exercise of powers under Article 226 of the Constitution of India. The High Court dismissed the writ petition holding that the opinion formed by the Central Government under Section 237 (b) of the Companies Act is not open to judicial review being conclusive. The Apex Court observed that an investigation should not be ordered except on satisfactory grounds as the appointment of inspector is likely to receive much less publicity as a result of which the reputation and prospects of the Company may be adversely affected. 29. Similarly in the case of (8) Barium Chemicals Ltd. V. Company Law Board reported in AIR 1967 SC 295 dealin with the provisions of Section 237(b), the Apex Court observed that thou gi the power under Section 237 (b) is discretionary but the first requirement for its existence is the honest formation of the opinion that the investigation is necessary. The Court further observed that "the formation of opinion is subjective but the existence of circumstances relevant to the inference as the sine qua non for action must be demonstrable. If the action is questioned on the ground that no circumstances leading to an inference of the kind contemplated by the section exists, the action might be exposed to interference unless the existence of the circumstances is made out. Since the existence of "circumstances" is a condition fundamental to the making of an opinion, the existence of the circumstances, if questioned, has to be proved at least prima facie. It is not sufficient to assert that the circumstances exist and give no clue to what they are because the circumstances must be such as to lead to conclusion of certain definiteness." 30.
It is not sufficient to assert that the circumstances exist and give no clue to what they are because the circumstances must be such as to lead to conclusion of certain definiteness." 30. Thus, in Barium Chemical's case (supra), the Court arrived at the conclusion that the existence of circumstances suggesting that the Company's business was being conducted as laid down in sub-clause (i) or the persons mentioned in sub-clause (ii) were guilty of fraud or misfeasance or other misconduct towards the Company or towards any of its member was the condition precedent for the Government to form the required opinion. The Court further observed that if the existence of those conditions is challenged, the Courts are entitled to examine whether those circumstances were existing when the order was made. There are series of decisions on the point for our guidance but it is neither necessary nor desirable to traverse all the cases, as broad principles which govern the decision with respect to the preliminary objections can be conveniently culled out. There can be no doubt that following the normal rule, the finding of the Designated Authority initiating investigation and recording of preliminary finding does not call for interference in a petition under Article 226 of the Constitution, more particularly looking to the object and the nature of the proceedings, it would not be proper to tamper with the investigation midway, except in three contingencies referred-to above. Under the Scheme of the Rules of 1995, the Designated Authority acquires jurisdiction to initiate investigation only on satisfaction that there exists evidence in the application with regard to dumping, material injury and causal link. At this stage i.e. under Rule 5, the Designated Authority is required to examine the accuracy and adequacy of evidence produced in the application. Thus, in a case where there is a challenge to the initiation of investigation on the ground of jurisdictional error, the petition under Article 226 of the Constitution of India is maintainable. However, a writ Court entertaining a petition challenging the initiation notification will not be holding a roving enquiry but will confine to the existence of evidence provided in the application i.e. filing of valid application by the domestic industry and satisfaction of the Designated Authority as to sufficiency of evidence in the application with regard to dumping, material injury and causal link. 31.
31. As far as the challenge to preliminary finding is concerned, it being recommendatory in nature, the normal rule is that no interference should be made by a writ Court under Article 226 of the Constitution. However, as the Rule 6 provides an opportunity to the industrial users as well as interested parties or its representatives to present an information relevant to the investigation, the limited interference is called for to satisfy if the preliminary finding has been recorded after following the statutory provision. It is of-course true that it is for the Central Government to levy or not to levy a provisional duty on the basis of the preliminary finding but as laid down by the Apex Court in Raja Anand Brahma Shah's case (supra) that where the jurisdiction of an administrative authority depends upon a preliminary finding of fact, the High Court is entitled in a proceeding of writ of certiorari to determine upon its independent judgment whether or not that finding of fact is correct. Once an anti-dumping duty is levied, though it may be provisional, it may adversely affect the trade or business of the parties like the petitioner. Though, there is provision for refund of anti-dumping duty but that in itself is not sufficient as the injury which may be caused to a trade or business, cannot be compensated by refund of the amount recovered as duty on anti-dumping. 32. As regards the alternate remedy, it is well established that the High Court would not normally exercise its jurisdiction except in a case where there has been a violation of the principles of natural justice or where the order or the proceedings are wholly without jurisdiction. 33. As regards the locus, suffice is to say that the petitioner industry falls within the definition of the interested party. They are entitled to present the information during investigation under Rule 6. The consequence of levy of anti-dumping duty either on the basis of the preliminary finding or the final finding, may inflict injury to the interested party. Though, the preliminary and final finding are only recommendatory in nature and it is for the Central Government to accept or not to accept but still such findings are bound to influence the decision making process.
Though, the preliminary and final finding are only recommendatory in nature and it is for the Central Government to accept or not to accept but still such findings are bound to influence the decision making process. The possibility of provisional levy being used by indigenous manufacturer to hike the price or the artificial increase in price making the article uncompetitive, adversely affecting the competitiveness of the interested party or industrial user, can not be ruled out. In addition to the conflicting interest of the parties, the consequence may cause large injury to rest of the citizenry. It will be travesty of justice, if in such a matter of serious consequence, even limited judicial review is refused, on the ground of writ petition being premature or existence of alternate remedy or locus. There can be no harm, if the writ Court keeping in mind urgency of the matter spares some time in the larger public interest and grants limited judicial review. 34. It is contended by Dr. Abhishek Manu Singhvi, learned counsel appearing for the petitioner that the impugned initiation notification is patently without jurisdiction inasmuch as it has been issued without satisfying the existence of the conditions precedent as required under sub-rule (2) of Rule 5 i.e. satisfaction of the Designated Authority as to the accuracy, adequacy and sufficiency of evidence provided in the application with regard to dumping, injury and causal link. It is also submitted that the very foundation of the application for initiation of investigation is the evidence regarding dumping of subject goods but in the instant case in absence of any evidence regarding the normal value, no evidence of dumping could ever be considered. According to the petitioner the applicants have furnished a constructed normal value in their application which is based on estimate of cost of production and fair margin in the exporting countries. According to the learned counsel in the absence of any evidence regarding the normal value and/or export price, there is really no evidence regarding dumping and, therefore, there could not be any further examination or satisfaction regarding the injury or causal link. It is also submitted that the application contains no evidence regarding the injury to the domestic PSF industry. It is also submitted that the applicants' own data shows that it is not a domestic industry.
It is also submitted that the application contains no evidence regarding the injury to the domestic PSF industry. It is also submitted that the applicants' own data shows that it is not a domestic industry. It is pointed out that the domestic industry has command market share which is not declining. The import of PSF from the subject countries has declined and continued to be less than 2% of the total domestic production of the PSF in India. The sales volume of the applicants has increased significantly. It is also submitted that there is no evidence of causal link between the alleged dumped imports and the alleged injury to the domestic industry. It is submitted that the third respondent is the largest producer of the key raw material. 35. In the counter filed by the department supported by the affidavit of Mr. Siddartha, Director, Ministry of Commerce and Industries, Government of India, it is averred that a preliminary scrutiny of application submitted to the Designated Authority in writing by M/s Association of Synthetic Fibres Industry representing the Indian Domestic PSF Industry alleging dumping of certain PSF originating in or exported from Indonesia, Korea R.P., Malaysia, Taiwan and Thailand, was made. Certain deficiencies were pointed out which were subsequently rectified. The applicants in their application suggested the period of investigation as March, 2000 to November, 2000. The November data was considered most recent data available on the subject, while the March data was included in the POI as the customs duty on PSF which was reduced form 35% to 20% w.e.f. 1.3.2000. Since the duties became effective immediately after the presentation of budget, the applicants considered that the real effect of the injury would be captured if the POI starts from 1.3.2000. It was added that the importers as well as the exporters from the subject countries were fully aware of the reduction of duties as the same were brought down due to Indo-US and Indo-EU MOU. The Designated Authority considered the said view and instead suggested that the POI be revised emphasising that the POI should be on quarterwise basis as that would help in making appropriate analysis. While considering the proposed POI, due regard was given to the various draft recommendations of the WTO's Committee on anti dumping practices. Accordingly, the applicants submitted revised petition taking 1.1.2000 to 30.9.2000 as the "period of investigation".
While considering the proposed POI, due regard was given to the various draft recommendations of the WTO's Committee on anti dumping practices. Accordingly, the applicants submitted revised petition taking 1.1.2000 to 30.9.2000 as the "period of investigation". The application was found to be property documented. The Designated Authority on examining the application filed by the domestic industry found the same complete in all respect as per the application proforma to constitute a well documented application. Necessary evidence, additional information/verification as prescribed in the proforma was also sought and received in accordance with the requirements of the Rules. Thus it was ensured that the requirement of Rules 5(1) and (2) were fully adhered-to and the domestic industry complied with all its obligation under the Rules. 36. We have considered the contention raised carefully. As far as the objection as to the applicant being a domestic industry and as such no locus to file the application, is concerned, the Designated Authority has considered the same in para 3 of the initiation notification. He has found that there is an unsubstantiated and misdirected allegation that the application viz; Reliance Industries, has admitted that they are importers on Te basis of response to query at S.No.6 of the proforma. The Designated Authority found that there is no such indication of admission in response to query at S.No.6. The Designated Authority also found that the applicants have the support of unit accounting for more than 83% of the production during investigation. Thus, there is no substance in the contention raised by the petitioner on the question of standing or locus of the applicants in filing the application before the Designated Authority. 37. The main thrust of the contention of learned counsel for the petitioner is the lack of jurisdiction on the ground that the evidence available was inadequate and inaccurate for issuing the initiation notification. Rule 5 (3) (b) of the Anti Dumping Rules requires the Designated Authority, before it initiates an investigation to examine the accuracy and adequacy of the evidence provided in the application with regard to dumping, injury and causal link.
Rule 5 (3) (b) of the Anti Dumping Rules requires the Designated Authority, before it initiates an investigation to examine the accuracy and adequacy of the evidence provided in the application with regard to dumping, injury and causal link. The WTO panel report in the case of Guatemala Grey Portland Cement from Mexico, has observed in para 8.35 as follows : "An anti-dumping investigation is a process where certainty on the existence of all the elements necessary in order to adopt a measure is reached gradually as the investigation moves forward. However, the evidence must be such that an unbiased and objective investigating authority could determine that there was sufficient evidence of dumping within the meaning of Article 2 to justify initiation of an investigation." The Panel dealing with the accuracy and adequacy of evidence observed that if the information supplied in the application is all that reasonably available to the applicant as required by Article 5.2, the Investigating Authority is justified in initiating the investigation. At the stage of justification of initiation of investigation, the Designated Authority is not required to hold a detailed inquiry but he has to prima facie satisfy as to whether the application is supported by the evidence in relation to dumping, injury and causal link between the dumped import and alleged injury. A reading of the orders of the Designated Authority dated 25.6.2001 and 15.10.2001 individually or collectively clearly shows that the authority has analysed the information and material on record and on being satisfied of adequacy and accuracy of the evidence issued the impugned initiation notification. The Designated Authority found that the applicants on the basis of data published by the leading consultancy firms made out a case of massive surplus capacity of 14,85,000 M.T. in the four countries mentioned in the application. The growth of consumption taking cumulatively in the said countries was minimal compared to huge excess capacity and huge excess production. The huge surplus capacity over the consumption and huge actual production over the consumption constitute respectively 14,85,000 M.T. per annum and 11,94,000 M.T. per annum. This was 2.56 times and 2.3 times the annualised Indian consumption respectively during the period of investigation. Thus, there is a prima facie evidence of huge over capacity causing material injury to the applicant domestic industry.
This was 2.56 times and 2.3 times the annualised Indian consumption respectively during the period of investigation. Thus, there is a prima facie evidence of huge over capacity causing material injury to the applicant domestic industry. It was found that the capacity would not only affect the Indian industry materially but also obliterate the indian industry in total. In the opinion of the Designated Authority, there was prima fade evidence to show that the indian indus has not only suffered material injury at the hands of the four dumping countries but the dumping continues to be reat of material injury to the indian industry. It was further found that there is import from other countries also but the same is negligible or de-minus, therefore, the imports from other countries did not cause injury to the domestic industry. Thus there is continuous increase in the demand and hence contraction in demand is not possible reason for injury. The applicant claims to have suffered losses from sale of subject goods from the subject countries and has failed to realise the fair price for subject goods due to dumped imports. This has indicated the causal link between the dumping and injury to the domestic industry. The Designated Authority also found that the normal value as claimed by the applicants i.e. the domestic industry on constructed cost of production of the like article with reasonable addition for administrative selling cost and for profits. The Designated Authority found that the price has been determined on the basis of the international price of raw materials and in view of the fact that there are no significant differences in the levels of technology and operations. The Designated Authority has given the figures which we need not refer but suffice it to say that the confirm and justify the claim of domestic industry with regard to the normal value based on the cost of production. Thus the Designated Authority on analysis of the material in the application found that the market share of the subject goods from the subject countries had increased significantly forcing the domestic industry to market their goods at a selling price lower than their cost of production or at negligible profits.
Thus the Designated Authority on analysis of the material in the application found that the market share of the subject goods from the subject countries had increased significantly forcing the domestic industry to market their goods at a selling price lower than their cost of production or at negligible profits. Thus, the Designated Authority prima facie satisfied itself of the existence of evidence to the effect that import of certain PSF originating in or exported from Korea R.P. Malaysia, Taiwan and Thailand constituted dumping and have caused injury to the domestic industry. Thus, in our opinion there is no illegality in the order of initiation of investigation, much less the jurisdictional error. Accordingly the Designated Authority rightly issued a public notice of initiation of investigation dated 25.6.2001 which calls for no interference by this Court in exercise of powers under Articles 226 or 227 of the Constitution of India. 38. At this stage, it is necessary to clarify that the Karnataka High Court by order dated 6.9.2001 on a petition filed by M/s Madura Coats while dismissing the petition, gave liberty to the interested parties to file their objections before the Designated Authority. The objections filed by the interested parties were disposed of by order dated 15.10.2001. Thus, the order dated 15.10.2001 is nothing but a confirmation of notification dated 25.6.2001 in view of the order of the Karnataka High Court. Thus, for all purposes, the date of initiation is 25.6.2001. A writ petition challenging the order dated 15.10.2001 of the Designated Authority has also been rejected by the order of the Karnataka High Court dated 4.12.2001. 39. During the pendency.of the first writ petition, the Designated Authority recorded a preliminary finding under Rule 12 of the Anti Dumping Rules. The same has been challenged by way of second writ petition mainly on the ground that no opportunity was given to the petitioners to furnish relevant information under Rule 6 (5) and further, no opportunity of hearing was given as required by Rule 6 (6). It is further submitted that the Designated Authority did not make available the evidence presented to it by the interested parties participating in the investigation and, therefore, violated the provisions of Rule 6(7). Some of the contentions . which were raised by challenge to the initiation of investigation, have been re-agitated.
It is further submitted that the Designated Authority did not make available the evidence presented to it by the interested parties participating in the investigation and, therefore, violated the provisions of Rule 6(7). Some of the contentions . which were raised by challenge to the initiation of investigation, have been re-agitated. It is vehemently argued that since the domestic industry commands 98% market share and imports of PSF from the subject countries, are merely 2% of the domestic production of the PSF, the same cannot conceivably cause any injury to the domestic industry. It is argued that the domestic industry has been complaining that they have suffered material injury, while the balance sheets of the Reliance Industries and Indo Rama do not support the said contention. At this stage, it will be relevant to re-capitulate the investigation process after the initiation notification under the Anti Dumping Rules. When the Designated Authority is satisfied that there is sufficient evidence in the application with regard to dumping, material injury and causal link, a public notice is issued initiating an investigation to determine the existence and effect of the alleged dumping. The initiation notice contains inter alia adequate information as required under the rules. The Designated Authority forwards a copy of the public notice to the known importers of the article alleged to have been dumped, the Governments of the exporting countries concerned and other interested parties. The Designated Authority also provides a copy of the non-confidential version of the application filed by the domestic industry to the known trade Association, the Governments of the exporting countries and also the other interested parties, who make a request thereof in writing. The Designated Authority as required by sub-rule (2) of Rule 6, issues notice calling for the relevant information in the prescribed form as specified by it from the exporters, foreign producers and other interested parties giving them adequate opportunity to respond. Sub-rule (5) also provides an opportunity to the industrial users to furnish information which is relevant to the investigation regarding the dumping injury where applicable and causal link. Under sub-rule (6), the Designated Authority may allow an interested party or its representative to present the information relevant to investigation orally but such oral information can be taken into consideration only when it is subsequently re-produced in writing.
Under sub-rule (6), the Designated Authority may allow an interested party or its representative to present the information relevant to investigation orally but such oral information can be taken into consideration only when it is subsequently re-produced in writing. Sub-rule (7) casts a duty on the Designated Authority to make available the evidence presented to it by one interested party to other interested parties participating in the investigation. A careful reading of this rule will show that it only contemplates an opportunity of presentation of information relevant to the investigation orally followed by submission in writing. The provision cannot mean to say that all the representations submitted, are required to be considered by the Designated Authority and opportunity of personal hearing is given. In the instant case, it is not the case of the petitioners that the interested party or its representative had presented the oral information followed by a written representation. In the absence of such a case, it cannot be said that there is a violation of Rule 6. Similarly, the requirement of sub-rule (7) cannot be construed as exchange of documents between the parties. If the documents have been kept open in the public file, it is a sufficient compliance of sub-rule (7). Sub-rule (8) provides that in a case where interested parties refuse access during or otherwise, does not provide necessary information within a reasonable period or significantly impedes the investigation, the Designated Authority may record its finding on the basis of facts available to it and make such recommendations to the Central Government, as it deems fit under such circumstances. 40. In the counter filed by the Department submitted by Mr. Siddharth, IAS, Director in the Ministry of Commerce and Industry, has averred that the Authority issued the public notice of initiation of investigation dated 25.6.2001 in the Gazette of India, Extra Ordinary. The Authority forwarded a copy of the public notice to the Association of manufacturers in the respective country of the exporters and also to the known importers and known users of certain PSF and gave them opportunity to make their views known in writing within a period of 40 days from the date .of the letter. A request was also made to the Central Board of Excise and Customs to arrange the details of imports of certain PSF.
A request was also made to the Central Board of Excise and Customs to arrange the details of imports of certain PSF. The Authority provided copies of the non-confidential version of the petitioner to the known exporters and the Embassies of the other countries in accordance with Rule 6 (3). The Authority sent a questionnaire to elicit relevant information to the known Association of manufacturers in the respective country of exports from the subject countries in accordance with Rule 6(4). As required by Rule 6(5), the Authority provided adequate opportunity to all the known users of the article under investigation inter alia seeking information relevant to the investigation. 41. Dealing with the contention of violation of principles of natural justice in not giving an opportunity of hearing to the interested parties or the industrial users, in our view, a reading of the scheme under Rule 6 makes it clear that it only provides an opportunity to present the information and nothing more. Under sub-rule (5), the opportunity is provided to the industrial users of the article under investigation to furnish an information, which is relevant to the investigation regarding the dumping, injury where applicable and causal link. Under sub-rule (6), the Authority may allow an interested party or its representative to present information relevant to the investigation orally, which is to be subsequently reproduced in writing. Thus, a discretion is vested in the Authority to permit a person interested to make a submission orally. It is significant to notice that under sub-rule (6) instead of word 'shall', the word 'may' has been used. If the Authority is satisfied with the presentation of the oral information, he may ask him to produce the same in writing. Thus, if a person has been permitted to give an oral information and if he has given the same, the information is further required to be given in writing. Thus, if an oral information is not followed by presentation in writing, then no grievance can be made of violation of principles of natural justice on the ground of non-consideration of oral information. Similarly, no grievance can be made of non-consideration of written submission, if it is not preceded by oral information. The provision while giving opportunity to present relevant information save the Designated Authority from burden of irrelevant representation.
Similarly, no grievance can be made of non-consideration of written submission, if it is not preceded by oral information. The provision while giving opportunity to present relevant information save the Designated Authority from burden of irrelevant representation. A reading of the preliminary finding clearly shows that the submissions of the interested parties or the industrial users have been elaborately discussed by the Designated Authority. All the representations submitted, have been carefully considered by the said Authority. Thus, in our opinion, the Designated Authority has undertaken the exercise and shown fairness more than what is required under the scheme of investigation under Rule 6. As regards sub-rule (7) of Rule 6, the Authority may make available the evidence presented to it by one interested party to other interested party participating in the investigation in the form of inspection of public file. This public file was made available to every interested party, who wanted to inspect it on the date decided as per the mutual convenience. Thus, the Designated Authority has recorded the finding after adhering to both the substantive as well as procedural requirements of the Anti Dumping Rules. 42. As regards the contention to the effect that the imports of PSF from the subject countries are mere 2% of the domestic production of PSF and the same cannot cause injury to the domestic industry, suffice it to say that it is submitted by the learned counsel for the respondents that a small quantity of 2% is used by the importers to negotiate the price thereby resulting the suppressing effect on the price realisation of the domestic industry. There appears to be substance in the submission made by the respondents. In view or this, the contention raised by the learned counsel for the petitioners is rejected. 43. The Designated Authority considering the ex-factory normal value and the ex-factory export price after adjustments on account of ocean freight, marine insurance charges, commission, inland freight and Load Port expenses etc., found the dumping margin on the basis of facts available before it. The Designated Authority comparing the Normal Value and Export Price, accordingly, worked out the dumping margin as follows: US per Kg. KOREA RP (All exporters) M/s. Pen-fibre SDNBHD Malaysia Malaysia (All other exporters) Taiwan (All exporters) M/s. Tuntex (Thailand) Public Co. Ltd. Thailand.
The Designated Authority comparing the Normal Value and Export Price, accordingly, worked out the dumping margin as follows: US per Kg. KOREA RP (All exporters) M/s. Pen-fibre SDNBHD Malaysia Malaysia (All other exporters) Taiwan (All exporters) M/s. Tuntex (Thailand) Public Co. Ltd. Thailand. M/S Teijin Polyester (Thailand) Ltd. M/s. Teijin (Thailand) Ltd. Thailand (All other exporters) Normal Value 1.28 0.9 1.16 1.15 0.8 0.89 0.89 1.2 Export 0.75 0.83 0.82 0.79 0.76 0.88 0.79 0.8 Dumping 70.03% 8.64% 41.02% 46.56% 5.78% 1.75% 13.21% 49.38% For the purpose of fair comparison between Normal Value and Export Price, the Authority took into account the information furnished by the petitioner and some of the exporters and other information available with the Authori ty. The Normal Value and Export Prices determined as detailed above are at ex-factory level. 44. On appreciation of the entire material on record, the Designated Authority concluded the injury and causal link as follows:INJURY (a) the quantum of imports from the subject countries has increased in absolute as well as in relative terms; (b) the market share of the Petitioner Companies has gone down; (c) the domestic industry has been forced to sell at reduced prices that have resulted in losses; (d) imports are significantly depressing the prices of the domestic industry; (e) there has been significant decline in the Sales volume of the Petitioner Company; (f) the domestic industry faces a threat or material injury from the alleged dumped imports. The Authority therefore concludes that the domestic industry has suffered material injury and thereat thereof.CAUSAL LINKDealing with the Causal Link, the Authority held that the increase in market share of imports from Korea R.P. Malaysia, Taiwan and Thailand resulted in decline in the market share of the petitioner domestic industry. In his view, the imports significantly depress the prices of the domestic product forcing the domestic industry to sell at unremunerative prices. Resultantly, the domestic industry incurred losses. On the basis of the 'facts available', it was observed that the imports of the subject goods from "other countries" are below the de-minimis level during the period of investigation. It was further observed that contraction of demand is not apparent and no technological development in the industry or any other such factor which could have resulted in injury to the domestic industry was noticed.
It was further observed that contraction of demand is not apparent and no technological development in the industry or any other such factor which could have resulted in injury to the domestic industry was noticed. To ascertain the extent of anti-dumping duty necessary to remove the injury to the domestic industry, the Authority relied upon reasonable selling price of the subject goods in India for the domestic industry, by considering the optimum cost of production at optimum level of capacity utilisation for the domestic industry. The Designated Authority further observed that since the fair selling price has been worked out on normative basis, injury to the domestic industry on account of other factors, if any, is nullified.On consideration and analysing the entire material, Designated Authority found that the dumped imports of subject goods from the subject countries have caused material injury to the domestic industry. Accordingly, it recommended for the provisional anti dumping duty in respect of imports of certain PSF originating in/or exported from Korea R.P., Malaysia, Taiwan and Thailand. On independent consideration of the entire material and careful consideration of the contentions raised by the learned counsel, which we have dealt-with in preceding paras, the finding of fact recorded by the Designated Authority does not call for interference by us, in exercise of powers under Article 226 and 227 of the Constitution of India. 45. The petitioners have also half-heartedly challenged the validity of sub rule (7) of Rule 6, which pertains to confidentiality of the information. The Rule provides that any information provided to the Designated Authority on a confidential basis by any party shall not be disclosed to any other party without specific authorisation of the party providing the information, if the Designated Authority is satisfied that it is confidential. Any information, which is by nature confidential, for instance the information the disclosure of which would be significant competitive advantage to a competitor or because its disclosure would have a significant adverse effect upon a person supplying the information or upon a person from whim the person acquires the information, is treated as confidential. The evidence relating to the normal value, export price, costing, profitability, specific adjustment in pricing etc. are examples of such information, which is usually accepted by the Authority as confidential. Such a confidentiality being in the larger public interest, we do not find any illegality with the said provision. 46.
The evidence relating to the normal value, export price, costing, profitability, specific adjustment in pricing etc. are examples of such information, which is usually accepted by the Authority as confidential. Such a confidentiality being in the larger public interest, we do not find any illegality with the said provision. 46. Consequently,4c'e find no merit in both the writ petitions and the same are dismissed. There shall be no order as to costs.Petition Dismissed. *******