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2020 (2) TMI 482 - HC - CustomsImposition of Anti-Dumping duty - determination of the rates thereof - import of melamine - Notification F. No.14/35/2010-DGAD dated 01.06.2012 and from China as per Notification No.15/17/2014-DADD dated 05.12.2015 - principles of natural justice - HELD THAT - The intervener GSFC had not filed the bills of entry for home consumption but had filed it for the purpose of warehousing and that the bills of entry for home consumption were directly filed by its small customers, who are referred as consumers, the designated authority by exercising its discretionary power had arrived at a conclusion that even though the intervener GSFC had imported and sold the subject articles, its focus had not turned to imports and the company is not behaving like an importer trader and its focus continues to be that of a producer engaged in its own production - Accordingly a conclusion was arrived that the intervener GSFC is a domestic industry within the meaning of Rule 2(b) of the ADR Rules 1995. The said conclusion of the designated authority can be found from paragraph 15 to paragraph 20 of the Notification dated 01.02.2012. As regards the determination of normal value of melamine in China as per the notification dated 05.12.2015, the designated authority arrived at its conclusion that China being a non-market economy, the export price and the normal value were determined in terms of the 2nd proviso of paragraph-7 of Annexure-1 to the ADR 1995. In paragraph-32 of the said notification, it has been stated that the constructed normal value of melamine in China at ex-factory level was determined as USD per MT (Rs. per MT) and that the export price from China was determined as USD per MT(Rs. per MT) - it is determinable that the designated authority had followed a procedure for determining the normal value of melamine in the exporting country China, as well as the non-injurious price of melamine for the domestic industry in India, but the procedure so adopted and also the normal value and non-injurious price would remain confidential and would not be made available. The reason for keeping the normal value and the non-injurious price confidential is that they were arrived at on the basis of the information provided by the domestic industry and therefore, it is confidential under Rule-7 of the ADR 1995. Whether the information provided by the intervener GSFC in their application under Rule 5(1) of ADR 1995 and at other stages would be held to be confidential under Rule 7 to the extent that even the normal value, export price and non injurious price determined by the designated authority would not be disclosed in the course of the proceedings held by it as well as in the final findings? - HELD THAT - Reading the whole of the provisions of Rule 7 including Rule 7(3) and the provisions of Rule 16 of the ADR 1995, we are of the view that the stand taken by the designated authority as well as by the respondents that the normal value, export price, margin of dumping and the non injurious price arrived at in the final findings are confidential in nature and that it cannot be disclosed to anyone at any stage, are unacceptable. Whether the principles of natural justice had been violated by the designated authority? - HELD THAT - As the normal value, export price, margin of dumping and the non injurious price as determined by the Designated Authority which formed the basis for the decision to impose the ADD and determine the rates thereof, was not informed to the petitioners prior to the opportunity of hearing being given, we are of the view that in the instant case, the principles of natural justice had been violated. Whether the procedure adopted by the designated authority in arriving at a decision to impose ADD and to determine the rates thereof conform to the procedure prescribed under the ADR 1995? - HELD THAT - On a conjoint reading of Rule 6(8) and 8 of ADR 1995, the inference thereof would be that if any information is provided by the interested parties, the designated authority is required to arrive at its satisfaction as regards the accuracy of such information and only upon arriving at such satisfaction, it may either accept or reject by providing its own reasons. But without undertaking such exercise to satisfy itself as regards its accuracy, it would be incorrect on the part of the designated authority to discard such information without even making an attempt to consider it and satisfy itself as regards its accuracy. - Only upon such information provided by the interested party being rejected on being not satisfied, the designated authority may record its findings on the basis of other facts available before it. Whether the procedure adopted by the designated authority in arriving at the final findings is discriminatory and arbitrary? - HELD THAT - Considering the procedure adopted by the designated authority in not making all the possible efforts to arrive at a correct determination as regards the normal value, export price and the margin of dumping as well as the non-injurious price, more particularly, in discarding such information that may be provided by the interested parties without even arriving at a satisfaction as to its correctness, we are of the view that the procedure adopted would not only be contrary to the provisions of Rules 6(8) and 8 of the ADR 1995, but would also be discriminatory and arbitrary. Whether the intervener GSFC in view of its imports of melamine can still be considered to be a domestic industry? - HELD THAT - In the facts and circumstance of the present case whether the intervener GSFC would continue to remain a domestic industry in spite of being indulging in import to a certain extent, in our view a discretion is required to be exercised by the designated authority and in doing so such discretion should neither lead to arbitrariness nor it violate the provisions of Article 14 of the Constitution of India. Whether the evaluations of the ADD in terms of USD at an exchange rate as it prevailed in the year 2012 from countries under the European Union, Iran, Indonesia and Japan and at an exchange rate as it prevailed in the year 2015 from the Peoples Republic of China, as well as the determination of the normal value, export price, margin of dumping and the non-injurious price in terms of USD at its exchange rate as indicated above had brought in a situation which would be inconsistent with the factual situation that may be caused due to subsequent fluctuations in the exchange rate? - HELD THAT - Without going much deeper into the question whether the determinations and evaluations made in terms of USD at an exchange rate as it prevailed in the year 2012 for imports from countries under European Union, Iran, Indonesia and Japan and at an exchange rate, as it prevailed in the year 2015 from China had created any inconsistent situation because of the subsequent fluctuations in the exchange rate, we merely express our concern that what would be the effect of such fluctuation on the evaluation of the landed price of the imported article in India and also on the amount of ADD imposed, if the evaluation of the landed price and the determination of the ADD is made in terms of USD pegged at an exchange rate in the given years when it was so evaluated and determined, in a situation where the landed price of the imported article as well as the total amount of ADD imposed in terms of INR keeps on fluctuating with every fluctuation of the exchange rate of USD - A simple analysis would indicate that if there is an increase in the exchange rate of USD, the landed price of the imported article would increase in terms of INR, which may reduce the margin of dumping requiring a lower imposition of ADD. But at the same time instead of the ADD being lowered, it being determined in terms of USD its total imposition in terms of INR would increase. The designated authority may take a closer look at the aforesaid aspect and take its own decision so as to render the imposition of the ADD in consistent with the provisions of Section 9A(1) of the CTA 1975. Maintainability of writ petition - HELD THAT - The propositions as regards the maintainability of the writ petition in a situation where an alternative remedy is available in the form of an appeal had been culled out. Amongst the relevant circumstances whose presence may justify the entertainment of a writ petition under Article 226 of the Constitution of India in spite of the existence the provision for an appeal, are violation of the principles of natural justice, procedure adopted by the authorities is discriminatory and arbitrary, the question of law requires an interpretation, a constitutional issue is also involved and the pleadings are complete and the issues raised can be decided on the basis of affidavits, etc. - the procedure adopted by the respondent authorities including the designated authority did also include the question of violation of the principles of natural justice, it being discriminatory and arbitrary, there is also a question of violation of Article 14 of the Constitution, as well as interpretation of the relevant provisions of Rules 7, 6(8), 8 and 16 of the ADR 1995, which are questions of law. Further, the pleadings of the parties were complete and the issues raised can be determined even on the basis of affidavits without there being the requirement of any determination of fact. The writ petition would be maintainable in spite of the provisions of Section 9C of CTA 1975. Petition disposed off.
Issues Involved:
1. Imposition of Anti-Dumping Duty (ADD) on Melamine: Legality and procedure of imposing ADD on melamine imported from various countries. 2. Confidentiality of Information: Whether the information provided by the domestic industry (GSFC) can be kept confidential. 3. Principles of Natural Justice: Whether the principles of natural justice were followed by the designated authority. 4. Procedure and Arbitrariness: Whether the procedure adopted by the designated authority was in conformity with the prescribed rules and whether it was arbitrary. 5. Definition of Domestic Industry: Whether GSFC can be considered a domestic industry despite importing melamine. 6. Evaluation in USD Terms: Impact of evaluating ADD in terms of USD at exchange rates prevailing in previous years. Detailed Analysis: 1. Imposition of Anti-Dumping Duty (ADD) on Melamine The petitioners challenged the imposition of ADD on melamine imported from the European Union, Indonesia, Iran, Japan, and China. They argued that the designated authority did not follow the prescribed procedure under the Customs and Tariff Act, 1975 (CTA 1975) and the Anti-dumping Duty on Dumped Articles and for Determination of Injury Rules, 1995 (ADR 1995). The court examined whether the normal value, export price, and margin of dumping were correctly determined and whether the ADD was justified. 2. Confidentiality of Information The court found that the designated authority treated the normal value, export price, margin of dumping, and non-injurious price as confidential based on information provided by GSFC. However, the court held that Rule 7 of ADR 1995 is not declaratory and requires the designated authority to be satisfied about the confidentiality of specific information. The court concluded that the confidentiality clause cannot be stretched to cover the essential facts under Rule 16, which must be disclosed to interested parties. 3. Principles of Natural Justice The court held that the principles of natural justice were violated because the essential facts, including the normal value, export price, margin of dumping, and non-injurious price, were not disclosed to the petitioners before the opportunity of hearing was given. The court emphasized that an opportunity of hearing without informing the reasons for the decision is no hearing under the law. 4. Procedure and Arbitrariness The court found that the designated authority did not make all possible efforts to determine the normal value, export price, and margin of dumping accurately. The authority discarded the information provided by the interested parties without proper consideration and relied solely on the information provided by GSFC. The court held that this procedure was discriminatory and arbitrary, violating Rules 6(8) and 8 of ADR 1995. 5. Definition of Domestic Industry The court examined whether GSFC, which also imports melamine, can be considered a domestic industry. The court held that the definition of domestic industry under Rule 2(b) of ADR 1995 excludes producers who are also importers of the alleged dumped article. The court found that the designated authority's discretion to include GSFC as a domestic industry was exercised arbitrarily and violated Article 14 of the Constitution of India. 6. Evaluation in USD Terms The court expressed concern about the impact of evaluating ADD in terms of USD at exchange rates prevailing in previous years. The court noted that fluctuations in the exchange rate could create inconsistencies in the evaluation of the landed price of the imported article and the amount of ADD imposed. The court suggested that the designated authority take a closer look at this aspect to ensure consistency with Section 9A(1) of CTA 1975. Conclusion: The court directed the designated authority to review the imposition of ADD on melamine imported from China and follow the prescribed rules, including disclosing essential facts to interested parties. The court emphasized the need for a balanced approach that protects domestic industries without being arbitrary or discriminatory. The writ petition was found maintainable despite the availability of an appellate remedy under Section 9C of CTA 1975.
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