2012 (10) TMI 832 - HC - Customs

Definition of the term Domestic Industry - anti dumping duty on Soda Ash - held that - between 1999 and 2010 in respect of the producers who are related to the exporters or importers of the dumped articles, or who are themselves importers, the term domestic industry was liberally construed by giving discretion to the Designated Authority treating such persons as forming part of the domestic industry. In the amendment which was brought in with effect from 27-2-2010, on a reading, it is clear that the first portion of the definition of the domestic industry, which relates to the domestic producers as a whole whose collective output constitutes the major portion of the total domestic production, remains intact. Insofar as it relates to the producers who are related to the exporters or importers of the dumped article or who are themselves importers of the dumped articles, the law-makers made it very clear that while construing them as domestic industry, the Designated Authority may be construed as referring to the rest of the producers only . The term may be construed as referring to the rest of the producers only on a bare and literal interpretation, in our view, should be construed only in respect of the producers who are related to exporters or importers, or producers who are themselves importers, and simply because the term only is construed, it cannot be taken to the first portion of the definition. The word only under Rule 2(b) of the Rules need not be concentrated much and in our view it has no significance as such. While it is true that the international agreements like WTO and GATT may not be the absolute and only source for interpreting the Indian Law, so long as there is no contradiction between the definition of the agreement in the international law and the terms of the Indian Law, there is absolutely no prohibition for this Court to take note of the terms of the international agreements for the purpose of better appreciation of the term. The term domestic industry , as it was amended on 27-2-2010, has not taken away the discretionary power of the Designated Authority and the Designated Authority is entitled to proceed further. As elicited above, under Rule 5(3)(a) proviso, there is a prohibition against the Designated Authority not to investigate when the domestic producers expressly supporting the application account for less than 25% of the total production of the like article by the domestic industry. But under the first portion of the term domestic industry defined under Rule 2(b) of the Rules, elicited above, it is very clear that the collective output of the entire manufacture put together totally must constitute the major proportion of the total domestic production. While so, on the admitted fact that M/s. DCW Limited is the only producer of Soda Ash in the country, even though it has produced only 4%, by a combined reading of Rule 2(b) and Rule 5(3) proviso, M/s. DCW Limited must be considered as a domestic industry. The writ petition against the preliminary finding published by the Designated Authority is maintainable

Summary

Issues Involved:
1. Maintainability of the writ petition filed by M/s. Saint Gobain Glass India Limited.
2. Construction of the term "domestic industry" as per Rule 2(b) of the Rules.
3. Validity of the application by M/s. DCW Limited as a domestic producer.

Detailed Analysis:

Point (i): Maintainability of the Writ Petition
The court held that the writ petition filed by M/s. Saint Gobain Glass India Limited is maintainable. The learned Judge reasoned that the very jurisdiction of the Designated Authority in initiating proceedings was challenged, making the writ petition valid despite the preliminary nature of the finding. The court cited the Supreme Court decision in Union of India v. Tantia Construction (P) Ltd., emphasizing that the existence of an alternative remedy does not bar the High Court from entertaining a writ petition under Article 226 of the Constitution of India. The court also noted that an appeal under Section 9C of the Act is only tenable against a final determination, not a preliminary finding, as supported by the Division Bench decision of the Gujarat High Court in Meghani Organics Ltd. v. Union of India.

Point (ii): Construction of the Term "Domestic Industry"
The court examined the definition of "domestic industry" under Rule 2(b) of the Rules, which has undergone various amendments. Initially, the term excluded producers related to exporters or importers of dumped articles. However, the 1999 amendment changed "shall" to "may," giving the Designated Authority discretion to include such producers. The 2010 amendment added the word "only," interpreted by the learned Judge to remove this discretion. The court disagreed, stating that the term "only" should not restrict the Designated Authority's discretion. The court emphasized that the Rules are economic legislation aimed at preventing anti-dumping, aligning with the WTO Agreement, and should be interpreted to allow the Designated Authority discretion. The court cited various judgments, including Grasim Industries Ltd. v. Collector of Customs and B. Premanand v. Mohan Koikal, to support a purposive and progressive interpretation.

Point (iii): Validity of the Application by M/s. DCW Limited
The court addressed whether M/s. DCW Limited, with only 4% of total production, could maintain an application under the Rules. The learned Judge had construed Rule 2(b) and Rule 5(3) proviso to mean that M/s. DCW Limited's 4% production should be treated as 100% since it was the only producer. The court agreed, stating that the combined reading of Rule 2(b) and Rule 5(3) proviso supports this interpretation, allowing M/s. DCW Limited to be considered a domestic industry and maintain the application.

Conclusion:
1. The writ petition against the preliminary finding is maintainable.
2. The 2010 amendment to the term "domestic industry" did not remove the discretionary power of the Designated Authority.
3. M/s. DCW Limited is entitled to maintain the application for investigation under the Rules.

Judgments:
- W.A. Nos. 193, 194, 189, and 195 of 2012 are allowed.
- W.A. No. 307 of 2012 is dismissed.
- W.A. No. 337 of 2012 is dismissed.