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2022 (4) TMI 759 - HC - CustomsLevy of Anti-Dumping Duty - scope of domestic industry - whether the evaluation of the non-injurious price in terms of the United States Dollar (USD) at the exchange rate as it prevailed in the year 2012 would be acceptable in law or it should be determined in terms of Indian Rupees (INR)? - non-injurious price to be determined in terms of INR and not USD? - Whether producers related to the exporter or importer of the dumped articles are excluded from the definition of 'Domestic Industry'? - HELD THAT - The initial definition of domestic industry by providing for an exception that such producers who are related to the exporters or importers of the alleged dumped article or are themselves importers thereof shall be deemed not to form a part of domestic industry , explicitly excludes such producers from being included as a domestic industry and no discretion is vested upon the authority to include such producer. The mandatory nature of the provision for such exclusion flows from the definition itself that such producers can be deemed not to form a part of the domestic industry . In the instant case the amendment incorporated by the Notification No. 44/1999 dated 15.07.1999 in the definition of the expression 'domestic industry' do not indicate any element of obligation on the part of the authority to also include the domestic producers related to the exporters or importers of the dumped article or the importers themselves as a domestic industry . In fact by the amendment the earlier obligation as per the initial definition had been withdrawn. In such situation the only interpretation of the expression 'domestic industry' as provided in the Notification No. 44/1999 dated 15.07.1999 would be that a discretion has been vested upon the authorities to also include such producers who are related to the exporters or importers of the dumped article or the importers themselves to be included within the meaning of domestic industry. In the instant case, by the amendment brought in by the Notification dated 01.12.2011, by omitting the word only , the element of exclusion of the producers related to the exporters or importers of the dumped article or the importers themselves of the dumped article, brought in by the word only in the pre-amended definition of domestic industry, stands removed. In other words, the permissibility to even include producers related to the exporters or importers of the dumped article or the importers themselves of the dumped article, is now being brought in. In the instant case it cannot be understood that inclusion of the word only in the definition of domestic industry as per the notification dated 27.02.2010 had led to an absurdity or anomaly or unless material - intrinsic or external - is available to consider it to be superfluous. The word only gave a definite meaning to exclude the producers related to the exporters or importers of the dumped article or the importers themselves from the purview of domestic industry . A removal of the word only by the amendment contained in the notification dated 01.12.2011 would therefore have to be construed that such removal had withdrawn the effect of exclusion of such producers and therefore, it cannot be understood that a superfluous word had been removed. Thus, it is the considered view of the Court that the amendment brought in to the definition of domestic industry by the notification dated 01.12.2011 in Rule 2(b) of the ADR 1995 do bring in a discretion upon the authorities to include the producers related to the exporters or importers of the dumped article or the importers themselves in the concept of domestic industry . But again because of the nature and implications of the successive amendments, we have to understand that such discretion may not be an absolute discretion but would be a circumstantial discretion to be determined on case to case basis. Whether non-injurious price is to be determined in terms of INR or USD? - HELD THAT - The concept of non-injurious price is with reference to Rule 17(1)(b) of the ADR 1995 which provides for the designated authority to submit a final finding to the Central Government recommending the amount of duty, which, if levied, would remove the injuries where applicable to the domestic industry. As the non-injurious price would be directly relatable to the ADD that may be levied and the ADD not to exceed the margin of dumping where margin of dumping is the difference between export price and its normal price and where both export price and normal value are ordinarily in terms of USD, therefore, it cannot be but accepted that for the purpose for which the non-injurious price is determined the same would have to be in terms of USD - on a reading of the provisions of Section 9 A(5) of the Act of 1975 which provides that the ADD which may be imposed, unless revoked earlier, shall cease to have its effect on the expiry of 5 years from the date of such imposition, conjointly with the provisions of 9A(1) which provides for imposition of ADD in the event an article is imported to India at a value less than its normal value in the exporting country, makes it discernible that an ADD if levied and not revoked earlier would have its effect for a period of five years. A look at the principles for determination of the non-injurious price makes it discernible that the input parameters for determining the non injurious price in respect of the domestic producers are all calculated and maintained in INR. The output of such exercise by taking into account the input parameters resulting in the non injurious price would therefore also have to be in terms of INR. Once the non injurious price upon undertaking the aforesaid exercise is arrived at, and the same is in INR, whenever the authorities are required to utilize the non injurious price arrived at for the purpose of determining the margin of dumping as well as to arrive at the ADD to be levied, the same can always be done by converting the determination made in INR to USD or the basis of the prevailing rate of exchange - If due to the change in exchange rate, there is also a corresponding change in the absolute value of the non-injurious price in terms of INR as because it had been determined in terms of USD, and the determination of the non-injurious price is based upon input parameters which are in terms of INR as per the principles provided in Annexure-III to the ADR 1995, any such change in the absolute value of the non-injurious price in terms of INR due to change in the exchange rate, would also have the effect of a deemed change in the input parameters for determining the non-injurious price. It would be more appropriate to have the non-injurious price determined in terms of INR by following the procedure and principles for determination provided in Annexure-III to the ADR 1995 and thereupon convert it to USD by applying the rate of exchange prevailing on the date when the non-injurious price so determined is required to be acted upon by the authorities for arriving at the ADD that may be levied. Such a procedure adopted would also be consistent with the provisions of Article 2.4.1 of the GATT-ADA. Application disposed off.
Issues Involved:
1. Definition and inclusion of 'domestic industry' under Rule 2(b) of the Anti-Dumping Rules, 1995 (ADR 1995). 2. Determination of 'non-injurious price' in terms of Indian Rupees (INR) or United States Dollars (USD). Issue-Wise Detailed Analysis: 1. Definition and Inclusion of 'Domestic Industry': The review petition challenges the judgment dated 26.08.2019, specifically paragraphs 149 to 163, regarding the definition of 'domestic industry' under Rule 2(b) of the ADR 1995. The petitioner contends that the definition clearly excludes importers of the like article from being considered as part of the 'domestic industry'. The petitioner argues that the judgment erroneously allowed discretion to the designated authority to include importers within the definition of 'domestic industry', referencing the Madras High Court decision in Nirma Limited vs. Saint Gobain Glass India Limited. The respondents argue that successive amendments to Rule 2(b) have evolved to include discretion for the designated authority to consider importers as part of the 'domestic industry'. The amendments from 1999, 2010, and 2011 shifted the language from 'shall' to 'may', indicating a discretionary power. The court analyzed the legislative intent behind these amendments, concluding that the removal of the word 'only' in the 2011 amendment reintroduced discretion to include importers under certain circumstances. The court held that the amendments to Rule 2(b) reflect an evolving legislative intent to align with Article 4.1 of the General Agreement on Tariffs and Trade-Anti Dumping Agreement (GATT-ADA), which also provides discretion to include importers within the domestic industry. The court concluded that the discretion to include importers is not absolute but circumstantial, to be determined on a case-by-case basis. 2. Determination of 'Non-Injurious Price': The review petition also challenges paragraphs 164 and 165 of the judgment regarding the determination of the 'non-injurious price'. The petitioner argues that the 'non-injurious price' specific to a domestic industry should be computed in INR and not USD. The petitioner references Clause 2.4.1 of Article VI of the GATT-ADA, which mandates currency conversion at the exchange rate on the date of sale. The respondents counter that the 'non-injurious price' must be in USD to align with the margin of dumping, which is calculated in USD. The court examined the principles for determining the 'non-injurious price' as outlined in Annexure-III to Rule 17(1) of the ADR 1995, noting that all input parameters are in INR. The court concluded that while the 'non-injurious price' should be determined in INR, it can be converted to USD at the prevailing exchange rate when required for calculating the Anti-Dumping Duty (ADD). The court emphasized that determining the 'non-injurious price' in INR and converting it to USD when necessary would avoid inconsistencies due to exchange rate fluctuations over the five-year period during which the ADD is effective. This approach aligns with Article 2.4.1 of the GATT-ADA. Conclusion: The court recalled and modified the discussions and conclusions in paragraphs 149 to 163 and 164 to 165 of the judgment dated 26.08.2019. The definition of 'domestic industry' under Rule 2(b) of the ADR 1995 now includes a circumstantial discretion to include importers. The 'non-injurious price' should be determined in INR and converted to USD when necessary for calculating ADD. Other aspects of the judgment remain unchanged. The review petition was given final consideration as indicated.
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