2000 (7) TMI 77 - SC - Customs

Whether an Investigating Authority has any discretion to reject the material produced by one of the party to the proceeding in regard to the alternatives enumerated in Section 9A(1)(c)(ii)(a) and (b) and prefer any other material to establish the normal value? Whether the material considered by the Authority for determining the normal value being material referable to an exporter from Germany, the same cannot be a comparable price for the purpose of determining the normal value of the respondents catalysts which is exported from Denmark? Whether the Authority erred in fixing two different injury margins for the same catalyst base on different end-users of the said catalyst which, according to the respondent, is impermissible in law? Whether the Authority was statutorily bound to have completed its investigation within a period of one year form the date of initiation of such investigation? Held that - From a careful reading of Section 9A of the Tariff Act and Rule 6 of the Rules, it is clear that the statute has nowhere put such a restriction on the Investigating Authority. On the contrary, a perusal of the said provisions clearly shows the normal value will have to be determined with reference to comparable price, the word comparable price in the context can only be with reference to the price of similar articles sold under similar circumstances irrespective of the manufacturer. By holding anti-dumping duty to be exporter specific, the tribunal could not have restricted the scope of the investigation only to materials to be produced by a party against whom an investigation is being conducted. Such an interpretation of the statute is wholly contrary to the very scheme of the statute. Therefore, any argument which restricts the discretion of the Authority in the area of appreciation of evidence on the ground that the anti-dumping duty is manufacturer specific, will have to be rejected. The European Union is a territory for the purpose of Section 9A of the Act and the export price of like catalysts from Germany which is also a part of that territory viz., European Union would be a comparable price for the purpose of determining the normal value of the respondent s catalysts. The Authority while determining the margin of dumping has come to a definite conclusion that the argument of the exporter that its export price has been more or less the same irrespective of tariff had under which the catalyst was imported, was incorrect and the Authority has further found different dumping margins based on clearances under the two different tariff heads. Section 9A(1) contemplates levy of an anti-dumping duty not exceeding the margin of dumping in relation to such article. If that be so then when the Authority on an investigation of facts comes to the conclusion that by virtue of two different customs duties there have been two different dumping margins in regard to the subject catalyst based on customs clearances, ipso facto, anti-dumping duty which is relatable cost of import also changes. Therefore, the contention of the respondent that there cannot be two anti-dumping duties in regard to the same catalyst, cannot be countenanced. In the instant case, the investigation was completed within the stipulated period after obtaining the necessary extension form the Central Government. The decisions relied upon by the respondent, in our opinion, have no bearing on the facts of this case since in those cases the proceedings were quasi-criminal in nature where application of principles of natural justice was inherent, unlike the present case where the application of principles of natural justice is limited to the provisions already made in the statute. Appeal allowed.

Issues Involved:
1. Time-barred investigation by the Authority.
2. Methodology for determining the normal value of catalysts.
3. Determination of injury margin and fair selling price.
4. Fixing of two dumping margins based on end-use of imported articles.

Issue-wise Detailed Analysis:

1. Time-barred Investigation:
The respondent argued that the investigation by the Authority was barred by time. The Tribunal rejected this contention, holding that the Central Government had extended the time to complete the inquiry upon the Authority's request. The Tribunal noted that it had no jurisdiction to question the extension granted by the Central Government, especially since the respondent had participated in the proceedings during the extended period without objection.

2. Determination of Normal Value:
The respondent contended that the Authority erred in fixing the normal value of the catalysts by adopting a methodology contrary to the provisions of the Statute. The Tribunal concluded that anti-dumping duty is exporter and exporting country specific. It outlined three options for determining the normal value under Section 9A(1)(c) of the Tariff Act:
- Comparable price in the exporting country.
- Export price to an appropriate third country.
- Cost of production in the country of origin plus administrative, selling, and general costs and profits.

The Tribunal found fault with the Authority for relying on the list price of another manufacturer (M/s. Sud Chemie of Germany) to determine the normal value, which violated Section 9A(1)(c). The Supreme Court disagreed with the Tribunal, stating that the statute does not restrict the Investigating Authority to only the material produced by the party under investigation. The Authority has the discretion to rely on any comparable price of similar articles sold under similar circumstances, irrespective of the manufacturer.

3. Determination of Injury Margin:
The respondent argued that the Authority did not properly determine the injury margin nor consider the fair selling price of the catalysts manufactured by domestic industries. The Tribunal accepted this contention, finding that the Authority's reliance on the list price of M/s. Sud Chemie was incorrect. The Supreme Court, however, upheld the Authority's findings, stating that the respondent's failure to provide necessary information justified the Authority's reliance on the best judgment assessment.

4. Fixing Two Dumping Margins:
The respondent challenged the Authority's decision to fix two dumping margins based on the end-use of the imported catalysts. The Tribunal accepted this argument, stating that the Authority's action was incorrect. The Supreme Court disagreed, noting that the Authority had determined different dumping margins based on the import duty applicable to the catalysts, which varied depending on whether the import was under a project import basis or for other purposes. The Supreme Court held that the Authority was justified in fixing two different injury margins based on different customs duties.

Conclusion:
The Supreme Court set aside the Tribunal's order and upheld the Authority's findings. The Court found that the Authority acted within its discretion and followed the statutory guidelines in determining the normal value and injury margin. The appeals were allowed with costs.

← Previous Next →