2015 (9) TMI 1162 - SC - Customs

Levy of anti dumping duty - Provisional assessment - Whether anti-dumping duty imposed with respect to imports made during the period between the expiry of the provisional anti-dumping duty and the imposition of the final anti-dumping duty is legal and valid - Held that - On a correct reading of the said sub-rule, therefore, the final anti-dumping duty only incorporates the provisional anti-dumping duty within itself, but in the manner provided by Rule 13. Thus, it is clear that such incorporation can only be the period upto which the provisional duty can be levied and not beyond. Thus understood, it is clear that both literally, and in keeping with the object sought to be achieved that is the making of laws in conformity with the WTO Agreement, there can be no levy of anti-dumping duty in the gap or interregnum period between the lapse of the provisional duty and the imposition of the final duty. Such interpretation makes it clear that clause 10.2 of the WTO Agreement is reproduced in the same sense though not in the same form in sub-rule (2)(a). The same result therefore as is envisaged in clause 10.2 is achieved by the said construction that is anti-dumping duty may be levied retroactively for the period for which provisional measures have been applied. The said construction is in consonance with the principles already laid down earlier in this judgment in that the WTO Agreement is intended to be applied by the various signatory nations in a uniform manner. This can only be done by construing the language of Section 9A read with the Rules in the same sense as that of the WTO Agreement. If Rule 20(2)(a) were to be construed in the fashion suggested by the High Court, it would be ultra vires Section 9A for the reasons already given by us. Further, the object and purpose of Section 9A is to impose an anti-dumping duty in consonance with the WTO Agreement, which Section 9A gives full effect to. These basic points have been missed by the High Court in arriving at the aforesaid finding. Further, the High Court fails to give due importance in its judgment to Rules 13 and 21. We have already seen how Rule 21(1) envisages precisely the situation spoken of by the High Court, and yet states that, in the circumstances mentioned therein, despite dumping and material injury to the domestic industry, differential duty cannot be collected from the importer. In fact, the High Court goes on to say that the expression imposed and collected in Rule 21, not being there in Rule 20(2)(a), cannot therefore be imported into the said sub-rule, so that levied cannot mean imposed and collected . - Decided in favour of assessee.

Summary

Issues Involved:
1. Legality and validity of anti-dumping duty imposed during the gap period between the expiry of provisional duty and the imposition of final duty.

Detailed Analysis:

Issue 1: Legality and Validity of Anti-Dumping Duty During the Gap Period

Background and Context:
The appeals before the Supreme Court arose from judgments of the Bombay High Court, Kerala High Court, and various Tribunals, raising a common legal question: whether anti-dumping duty imposed on imports during the period between the expiry of provisional anti-dumping duty and the imposition of final anti-dumping duty is legal and valid. The General Agreement on Tariffs and Trade (GATT) and the Agreement on Implementation of Article VI of GATT, 1994, were foundational to the discussion, alongside India's Customs Tariff Act and Anti-Dumping Rules.

Arguments by Revenue:
The revenue argued that Rule 20 of the Anti-Dumping Rules should be interpreted to mean that final anti-dumping duty takes effect from the date of imposition of provisional duty, including the gap period. They contended that this interpretation aligns with the purpose of anti-dumping laws to protect domestic industries from unfair trade practices. They also argued that the term "levied" in Rule 20(2)(a) should be read literally and not be conflated with "collection."

Arguments by Assessees:
The assessees argued that Rule 20(2)(a) should be interpreted in line with the WTO Agreement, which does not allow for the imposition of anti-dumping duty during the gap period. They contended that the term "levied" includes "collection" and that any retrospective imposition of duty during the gap period would be ultra vires the parent statute, Section 9A of the Customs Tariff Act. They also argued that the levy of anti-dumping duty is not automatic and must consider complex economic factors, which cannot be extended beyond the provisional period.

Supreme Court's Analysis:
1. Interpretation of Section 9A and Anti-Dumping Rules:
- Section 9A(1) refers to final anti-dumping duty imposed prospectively unless specified otherwise in Section 9A(3), which allows retrospective imposition under specific circumstances.
- Section 9A(2) and (6) do not authorize retrospective imposition of anti-dumping duty, contrasting with Section 9A(3).

2. Harmonious Construction of Rules 13, 20, and 21:
- Rule 13 limits the provisional anti-dumping duty to a maximum of six months, extendable to nine months.
- Rule 20 focuses on the date of commencement of duty, stating that duties take effect prospectively from the date of publication.
- Rule 21(1) ensures that if the final duty is higher than the provisional duty, the differential cannot be collected, indicating a balance between protecting domestic industries and facilitating international trade.

3. Conformity with WTO Agreement:
- The Court emphasized that domestic laws implementing international treaties should be interpreted to align with treaty obligations, ensuring uniform application across signatory nations.
- Article 10.2 of the WTO Agreement allows for retroactive collection of definitive duties only for the period during which provisional measures were applied, not beyond.

4. Ultra Vires Consideration:
- Interpreting Rule 20(2)(a) to allow for duty during the gap period would render it ultra vires Section 9A, as it would amount to retrospective imposition not authorized by the statute.

Conclusion:
The Supreme Court concluded that the final anti-dumping duty cannot be imposed during the gap period between the expiry of the provisional duty and the imposition of the final duty. The interpretation aligns with the WTO Agreement and ensures that the domestic law conforms to international obligations. The appeals by the assessees were allowed, and the revenue's appeal was dismissed. The Court clarified that its decision only addressed the specific issue of duty imposition during the gap period, leaving other points of contention unaffected.