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TMI Blog2022 (4) TMI 759X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 26.08.2019 in WP(C) No.6568/2017 in paragraphs 149 to 163 of the judgment as regards the concept 'domestic industry' as defined in Rule 2(b) of the Anti Dumping Rules 1995 (in short ADR 1995), and the discussions and conclusions in paragraphs 164 and 165 of the judgment as regards as to whether the evaluation of the non-injurious price in terms of the United States Dollar (for short, the 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). 3. Dr. Ashok Saraf learned senior counsel for the review petitioner at the outset urges upon that although the review had been instituted on several grounds as stated in the review petition, but only two grounds are being insisted upon for the purpose of hearing of this petition. The first ground urged upon is that even after the successive amendments to the definition of 'domestic industry' under Rule 2(b) of the ADR 1995 it is clear enough to understand that an importer of the like article is expressly excluded from the purview of being included in the definition of 'domestic industry'. The second ground urged upon is that the non-injurio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al value, margin of dumping etc., and it does not cover non-injurious price. 6. With regard to the contention that the term 'domestic industry' does not include the producers who are related to the exporter or importers of the dumped article or themselves are importers thereof, Dr. Ashok Saraf by referring to the amended Rule 2(b) of the ADR 1995 submits that removal of the word 'only' from the definition has no meaning and it has to be understood that a superfluous word had been removed. A further submission is raised that if the expression 'rest of the producers' in the definition also includes the importers, the exception provided in the definition providing for an exclusion of such producers who are related to the exporters or importers of the dumped article or themselves are importers thereof, would become redundant. It is also a submission that the quantity of the dumped article imported by an otherwise 'domestic industry' is not of material consideration and had it been so the definition of the 'domestic industry' itself would have contained such provision. 7. As the judgment under review had accepted a discretion to be vested on the designated authority to even include a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g for the respondents in the Union of India, per contra, contends that the evolution of the definition of domestic industry in Rule 2(b) of the ADR 1995 through the successive amendments would make it explicit that even as regards such domestic producers of the dumped article who indulges in an import of the article to certain extent, a discretion is available with the designated authority to include such domestic producers within the meaning of 'domestic industry' under Rule 2(b) of the ADR 1995. 11. To substantiate the contention, Ms. Madhavi Divan learned senior counsel refers to the definition of domestic industry, as it stood earlier. By referring to the earlier definition of 'domestic industry', which for the sake of convenience is referred as the first version, it is the submission of the learned senior counsel Ms. Madhavi Divan that the word 'shall' appearing in the first version definition signifies the absence of any discretion with the authorities to include any producers who are related to the exporters or importers or are themselves importers of the dumped article and further the expression 'be deemed' appearing in the first version definition creates a legal fiction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs as the domestic industry. But, in contradistinction for the producers who are related to the exporters or importers or are themselves are importers of the dumped articles the expression 'may' is used, meaning thereby that a discretion is vested on the authority to interpret or not such producers to be 'domestic industry'. 16. A submission is made that when two different words of import are used in a statute in two consecutive provisions the conclusion thereof would be that the two words would have different connotations and that it would be difficult to maintain that the two different words are used in the same sense. For the purpose reference is made to the pronouncement of the Supreme Court in Rajendra K Bhutta Vs. MHA DA reported in 2020(13) SCC 208. Accordingly, it is the submission that the two expressions 'shall' and 'may' used in the two definitions of 'domestic industry' as per the amendments would have to be understood to carry two different meanings and both can neither be given the same meaning nor can be said to have been used interchangeably. 17. By giving stress to the commonality of the provisions of the term 'domestic industry' under Rule 2(b) of the ADR 1995, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be in terms of INR and not USD. If for determining the ADD, there is a requirement of the non-injurious price being available in terms of USD, the appropriate procedure would be to convert the non-injurious price determined in terms of INR to USD as per the rate of exchange that may be available on the day of the sale or transaction for which the ADD is to be determined. 20. Ms. Madhavi Divan, learned senior counsel for the authorities under the Union of India contends that the authorities follow the principle of lesser duty rule between the margin of dumping and the margin of injury, whichever is lesser. The margin of dumping is the difference between the export price of the dumped article and its normal value in the Country of export. As both the components for determining the margin of dumping are in terms of USD, therefore, the margin of injury is also required to be in terms of USD. As the non-injurious price would be a component for the purpose of arriving at the margin of injury, therefore, the non-injurious price is also required to be determined in terms of USD. 21. Mr. Pragyan Sharma, learned counsel for the intervener GFSC adopts the argument put forth by Ms. Madhavi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... authority to decide whether importers can also be included as 'domestic industry', without taking into consideration the clear and exclusive meaning of 'domestic industry' defined under Rule 2(b) of the ADR 1995, as amended, would be unacceptable, and the judgment to be per-incuriam. The contention per contra of the respondents in the Union of India being that the evolution of the definition of domestic industry in Rule 2(b) of the ADR 1995 through successive amendments would make it explicit that even such domestic producers of the dumped article who also indulges in an import of the article to certain extent, a discretion is available with the designated authority to include such domestic producers within the meaning of 'domestic industry', we propose to decide the issue by making an endeavour to understand the concept of 'domestic industry' as defined under Rule 2(b) of the ADR 1995, as amended. 23. As submitted by Ms. Madhavi Divan learned senior counsel, the expression 'domestic industry' was defined under Rule 2(b) of the ADR 1995 as follows: "2(b) "domestic industry" means the domestic producers as a whole engaged in the manufacture of the like article and any activity c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... leged 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'. 25. In the amendment incorporated by the Notification No.44/1999 dated 15.07.1999, the word 'shall' appearing in the initial definition had been replaced by the word 'may' by retaining the earlier definition for all other purpose. 26. In Shyamal Ghosh v. State of West Bengal reported in 2010 (7) SCC 646 in paragraph 71 it had been provided as follows: "If the Legislative intend was to the contra, then the Legislature would have used the expression 'shall' in place of the word 'may'. The word 'may' introduces an element of discretion ......" 27. The aforesaid proposition laid down by the Supreme Court gives a clear indication that if the Legislature uses the expression 'may' in place of the expressi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cle 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. 30. The definition of domestic industry was again amended by the Government notification No. 18/2010 dated 27.02.2010. The amendment brought in by the notification dated 27.02.2010 has the effect that instead of conferring a discretion upon the authorities to 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', it was specifically provided that the 'domestic industry' may be construed as referring to the rest of the producers only. The expression 'rest of the producers' would have to be understood to mean such produce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... where an inclusion of the producers who are related to the exporters or importers of the dumped article or the importers themselves of the dumped articles in the definition of 'domestic industry' is also contemplated under the law. In other words, the absolute exclusion without leaving any discretion upon the authorities to include such producers within the definition of 'domestic industry', after the amendment by the notification of 01.12.2011, brings back certain circumstantial discretion upon the authorities to also include such producers, although it may not be that such discretion would be an absolute discretion on the authorities to include such producers. 34. We understand that the discretion to include the producers who are related to the exporters or importers of the dumped article or the importers themselves of the dumped articles within the definition of 'domestic industry' as per the definition in the notification dated 01.12.2011 would be a narrower discretion than the discretion that was provided in the definition of 'domestic industry' as per the definition in the notification dated 15.07.1999. 35. As the amendments brought in to the definition of 'domestic industr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lexion of the sentence. The omission of the word "only" in Section 2(2) indicates that this sub-section is only an inclusive and clarificatory provision. As stated above, it is not providing that provisions of Part I do not apply to arbitrations which take place outside India. Thus there was no necessity of separately providing that Section 9 would apply." 38. Article 1(2) of the UNCITRAL Model Law provides as extracted:- "(2) The provision of this law, except Articles 8, 9, 35 and 36, apply only if the place of arbitration is in the territory of this State." 39. In the circumstance, the Supreme Court interpreted that the word 'only' was to emphasis that the provisions of that law are to apply if the place of arbitration is in the territory of that State, but the omission of the word 'only' changes the whole complexion of the sentence and indicates that the Subsection is only an inclusive and clarificatory provision. 40. In Ramesh Rout -vs- Rabindranath Rout reported in 2012 1 SCC 762, the Supreme Court had the occasion to examine the meaning and purport of the word 'only' in a given provision. Paragraphs 43 44 and 45 are extracted as below: "43. In Concise Oxford English Di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es 4.1 and 3.1 of the AD Agreement by including in the domestic industry and in the sample producers that were related to the exporters or importers or were themselves importers of the allegedly dumped product. We recall the language of Article 4.1(i), which provides that: "when producers are related to the exporters or importers or are themselves importers of the allegedly dumped product, the term "domestic industry" may be interpreted as referring to the rest of the producers" (footnote deleted, emphasis added). China recognizes that Article 4.1 does not require the exclusion of related producers or importing producers. Nonetheless, China submits that investigating authorities do not have unlimited discretion in determining whether or not to exclude such producers, that the "objective examination" and "positive evidence" requirements of Article 3.1 apply to the decision of investigating authority in such cases, and asserts that the basis of the EU investigating authority's decision not to exclude related producers or importing producers is not supported by the evidence in the record of the investigation." "7.243. It is clear to us, as China acknowledges, that the use of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of this Agreement, the term "domestic industry" shall be interpreted as referring to the domestic producers as a whole of the like products or to those of them whose collective output of the products constitutes a major proportion of the total domestic production of those products, except that: (i) when producers are related to the exporters or importers or are themselves importers of the allegedly dumped product, the term "domestic industry" may be interpreted as referring to the rest of the producers;" 45. The view of the WTO panel is also that there is nothing in Article 4.1 of the GATT-ADA that limits the discretion of the investigating authorities to exclude or not the related or importing domestic producers. The said view of the WTO panel was formed after taking into consideration the arguments of the European Union that such discretion exists and the counter argument of People's Republic of China that such discretion would not be available within the meaning of 'domestic industry'. 46. Although it is the stand of Ms. Madhavi Divan, learned senior counsel that the interpretation of Article 4.1 of the GATT-ADA by the WTO panel had also been adopted in bringing in the amen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Article 4.1 of the GATT-ADA was adopted in bringing in the amendment by the notification dated 01.12.2011 to be wholly unacceptable. 50. One of the concepts of interpreting a statute or an amendment thereof is to arrive at the intention of the legislature in bringing in such statute or amendment to the statute. In page-12 footnote 48 of the "Principles of Statutory Interpretation" by Justice G P Singh a school of thought that the traditional methodology of interpreting a statute with reference to 'intention of the legislature' should now be replaced by a new methodology of 'attribution of purpose' is provided. The footnote 48 at page-12 is extracted as below: "There is a school of thought that the traditional methodology of interpreting a statute with reference to 'intention of the Legislature' should now, be replaced by a new methodology of 'attribution of purpose'. The following extract from an article in (1970) 33 Modern Law Review, pp. 199, 200 by HARRY BLOOM, explains the new idea: 'In time however, somebody will have to tackle the basic question how long can we sustain the fiction that when the Legislature prescribes for a problem, it provides a complete set of answers; an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rview of being included in the meaning of 'domestic industry', but the later notification of 01.12.2011 by removing the word 'only' again withdraws the exclusion and brings back some kind of discretion to include such producers in the meaning of 'domestic industry' by having the effect of withdrawing the exclusion. From the sequence of such amendments and its effect, it is discernable that a purpose can be attributed to the successive amendments to arrive at that the intention of the legislature is to bring back the inclusion of the exporters or importers of the dumped article or the producers related to the importers themselves within the meaning of 'domestic industry' by providing some discretion to the authorities for the purpose. 52. Although it is the submission of the learned senior counsel Dr. Ashok Saraf that the removal of the word 'only' by the notification dated 01.12.2011 would have to be construed to be a superfluous word being removed, but a word can be understood to be superfluous only when inclusion thereof may lead to an absurdity or anomaly or unless material - intrinsic or external-is available to permit it to be considered to be superfluous. In this resp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the GATT-ADA and submits that whenever any comparison requires a conversion of currencies such conversion should be made using the rate of exchange on the date of the sale or the transaction. Accordingly, in the instant case for determining the non-injurious price, if there is a requirement of conversion of currency, the same accordingly would have to be on the basis of the rate of exchange when the transaction involving the non-injurious price would be undertaken and not on the basis of the rate of exchange as prevailed when the non-injurious price was determined. 56. Clause 2.4.1 of Article VI of the GATT-ADA is extracted below:- "2.4.1 When the comparison under paragraph 4 requires a conversion of currencies, such conversion should be made using the rate of exchange on the date of sale, provided that when a sale of foreign currency on forward markets is directly linked to the export sale involved, the rate of exchange in the forward sale shall be used. Fluctuations in exchange rates shall be ignored and in an investigation the authorities shall allow exporters at least 60 days to have adjusted their export prices to reflect sustained movements in exchange rates during the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. From the said point of view, we are in agreement with Ms. Madhavi Divan learned senior counsel for the Union of India. 60. But 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. In other words, there may not be any change in the determination of the ADD to be levied for a period of five years and in such event it is immaterial that the non-injurious price had been determined in terms of USD, inasmuch a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icient utilization of raw materials. (ii) The best utilization of utilities by the constituents of the domestic industry for the same period to nullify any injury if caused by inefficient utilization of utilities. (iii) The best utilization of production capacities by the constituents of the domestic industry for the same period to nullify any injury if caused by inefficient utilization of production capacities. (iv) The propriety of all expenses grouped and charged to the cost of production may be examined and any extra ordinary or non recurring expenses shall not be charged to the cost of production and the salary and wages paid to the employees may also be reviewed and reconciled with the financial and cost records of the company. (v) To ensure the reasonableness of the amount of depreciation charged to the cost of production, it may be examined that the facilities not deployed for production of the subject goods be identified and excluded. (vi) The expenses identified to be directly allocated and common expenses or overheads may be examined and scrutinized by comparing with the corresponding amounts in the immediate preceding year. (vii) The following expenses shall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ameters for determining the ADD may be served, but it may not be the appropriate and correct reflection of the non-injurious price. If the non-injurious price is determined in terms of USD and is used as a parameter for determining the ADD at any time during the next five years, the variations in the exchange rate that may take place during the intervening five years may bring about a change in the non-injurious price in its absolute value in terms of INR. 65. 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. In other words, a legal fiction of a deemed change would take place in the input parameters but in reality, there would be no such change in the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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