Bombay High Court
Import vs M/S. Samarth Industries on 15 December, 2011
Bench: Dr. D.Y. Chandrachud, A.A. Sayed
Dmt 1 customs appeals 18-09 & ors
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGNAL CIVIL JURISDICTION
CUSTOMS APPEAL NO. 18 OF 2009
The Commissioner of Customs
(Import), Mumbai. ig .. Appellant..
versus
M/s. Samarth Industries. .. Respondent.
WITH
CUSTOMS APPEAL NO. 46 OF 2008
The Commissioner of Customs
(Import), Mumbai. .. Appellant..
versus
M/s. Abhinav Ceramics. .. Respondent.
WITH
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CUSTOMS APPEAL NO. 49 OF 2008
The Commissioner of Customs
(Import), Mumbai. .. Appellant..
versus
M/s. Nitco Tiles Ltd., .. Respondent.
WITH
CUSTOMS APPEAL NO. 50 OF 2008
The Commissioner of Customs
(Import), Mumbai. .. Appellant..
versus
M/s. Harsh International. .. Respondent.
..........
Mr. Pradeep S. Jetly for the Appellants in all Appeals.
Mr. V. Sridharan, Sr. Adv. with Mr. Prakash Shah and
Mr. Jas Sanghavi i/by PDS Legal for Respondents.
WITH
WRIT PETITION NO. 2143 OF 2005
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Nandlal B. Surekha. .... Petitioner.
Versus
The Union of India & Ors. .... Respondents.
Mr. V. Sridharan, Sr. Adv. with Mr. Prakash Shah and
Mr. Jas Sanghavi i/by PDS Legal for Petitioner.
Mr. A.S. Rao for Respondents.
ig WITH
WRIT PETITION NO. 4027 OF 2004
Shreyas Trading Co. & Anr. .... Petitioners.
Versus
The Union of India & Ors. .... Respondents.
Mr. D.B. Shroff, Sr. Adv. with Mr. Karl Shroff, Mr. RAK Nazam -
Es- Sani i/by Mr. V.P. Sawant for the Petitioners.
Mr. V.H. Kantharia for Respondents.
.....
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CORAM : DR.D.Y.CHANDRACHUD &
A. A. SAYED, JJ.
15 DECEMBER 2011.
ORAL JUDGMENT : (PER DR.D.Y.CHANDRACHUD, J.)
This order will govern the Appeals and the Writ
Petitions under Article 226, which have been heard together.
Learned Counsel stated that the facts in all these matters and,
the questions of law raised are similar. Hence, we propose to
dispose of this batch of cases by a common judgment. For
the sake of convenience, the facts in Customs Appeal 18 of
2009 are discussed.
2. This Appeal by the Commissioner of Customs is
against an order of the Customs Excise & Service Tax Appellate
Tribunal dated 1 August 2007. The Tribunal has held, inter
alia, that no Anti-dumping duty can be levied on imports made
Dmt 5 customs appeals 18-09 & ors
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during the period of the expiry of a provisional anti-dumping
levy and the levy of a final anti-dumping duty under Rule 21
of the Customs Tariff (Identification, Assessment and Collection
of Anti-dumping Duty on Dumped Articles and for
Determination of Injury) Rules, 1995 ("the Anti-Dumping
Rules"). The Appeal by the Revenue was admitted on 6 April
2009. The following substantial questions of law, as modified
to elucidate the submissions urged, arise :
(1) Whether the CESTAT, Mumbai was justified in
setting aside the Anti-Dumping Duty imposed with
respect to imports made by the Respondents during
the period between the expiry of the provisional
anti dumping duty and the imposition of a final
anti dumping duty;
(2) Whether the CESTAT, Mumbai was justified in law
in not granting the differential Anti-Dumping Duty
arising out of final findings in view of the
Dmt 6 customs appeals 18-09 & ors
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provisions of Section 9A(3) of Customs Tariff Act,
1975;
(3) Whether the CESTAT, Mumbai was justified in law
in not appreciating that a provisional assessment
under Section 18 of the Customs Act, 1962 can be
resorted to for the purpose of levy and collection of
Anti-Dumping Duty ;
(4) Whether the CESTAT, Mumbai was justified in law
in not appreciating that Section 28 of Customs Act,
1962 can be pressed into service for collection of
Anti-Dumping Duty ;
(5) Whether the CESTAT, Mumbai was justified in law
in deviating from the Order passed by the Principal
Bench (Anti-Dumping Branch), New Delhi of the
Tribunal in the case of M/s. Nitco Tiles Ltd."
Dmt 7 customs appeals 18-09 & ors
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2. The learned Counsel appearing on behalf of the
Revenue has submitted - and this position is not disputed by
learned Counsel appearing on behalf of the Respondent that
the first question of law will be dispositive of the issues that
arise in the appeals filed by the Revenue. Counsel appearing
on behalf of the Revenue states that the second question of
law is not pressed. As regards the third and fourth questions,
it is now common ground between Counsel appearing on
behalf of the Revenue and Counsel appearing on behalf of the
Respondents that in view of the provisions of Section 9A(8) of
the Customs Tariff Act, 1975, the view which has been taken
by the Tribunal is unsustainable. Sub-section (8) of Section 9A
was substituted with effect from 1 January 1995 by the Finance
Act (No.2), 2009 to provide that the provisions of the Customs
Act, 1962 and the Rules and Regulations made thereunder
including those relating to the date for the determination of
the rate of duty, assessment, non-levy, short levy, refunds,
interests, appeals, offences and penalties shall, as far as may be,
apply to the duty chargeable under the Section as they apply
Dmt 8 customs appeals 18-09 & ors
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in relation to the duty leviable under that Act. In view of the
amended provisions of Section 9A (8), the third and fourth
questions would have to be answered in the negative. The
fifth question of law is consequential and relates to the first.
3. On 6 August 2001 a public notice was issued by
the Designated Authority initiating proceedings in regard to the
import of Vitrified/Porcelain tiles originating in or exported
from the People's Republic of China and the United Arab
Emirates. The Designated Authority issued preliminary findings
on 3 December 2001. Following the preliminary findings, the
Union Government imposed by a notification dated 2 May 2002
a provisional anti-dumping duty under Section 9A(2) of the
Customs Tariff Act read with Rules 13 and 20 of the Anti-
dumping Rules. The Designated Authority rendered its final
findings on 4 February 2003 and while concluding that an
injury had resulted, recommended the imposition of anti-
dumping duty. The Union Government issued a notification on
1 May 2003 imposing a final anti-dumping duty from the date
Dmt 9 customs appeals 18-09 & ors
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of the imposition of the provisional anti-dumping duty i.e. 2
May 2002. The question before the Court is as to whether the
Central Government was within its jurisdiction in imposing a
final anti-dumping duty between 2 November 2002 and 30 April
2003. This, according to the Respondents, is the gap period
when the provisional duty had come to an end and until a
final notification was issued by the Union Government on 1
May 2003.
4. The principal issue which falls for determination in
these proceedings is whether the levy of a final anti-dumping
duty will cover the entire period from the date of the issuance
of the provisional anti-dumping duty as contended by the
Revenue or whether, as the Respondents submit, no duty can
be levied for the period after the expiry of the imposition of
the provisional duty until the final anti-dumping duty has
taken effect.
5. The Customs Tariff Act, 1975 ("the Act") was
Dmt 10 customs appeals 18-09 & ors
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amended by substituting Sections 9, 9A and 9B by the Customs
(Amendment) Ordinance, 1994. The Ordinance came into force
on 1 January 1995. The Ordinance was replaced by an Act.
6. Sub-section (1) of Section 9A provides for an anti-
dumping duty on dumped articles. Under the provision,
where any article is exported from any country or territory to
India at less than its normal value, then, upon the importation
of such article in India, the Central Government is empowered
by a notification in the Official Gazette, to impose an anti-
dumping duty not exceeding the margin of dumping in relation
to such article. The expression 'margin of dumping' is defined
in Explanation (a) to mean the difference between the export
price and the normal value of the article. Bereft of detail, the
export price in relation to an article means the price of the
article exported from the exporting country. The 'normal
value' means the comparable price in the ordinary course of
trade for a similar article when meant for consumption in the
exporting country.
Dmt 11 customs appeals 18-09 & ors
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7. Sub-section (2) of Section 9A empowers the Central
Government to impose an anti-dumping duty on the basis of a
provisional estimate of the normal value and the margin of
dumping pending a final determination in accordance with the
provisions of the section. Sub-section (2) of Section 9A is as
follows:
"(2) The Central Government may, pending the
determination in accordance with the provisions of
this section and the rules made thereunder of the
normal value and the margin of dumping in
relation to any article, impose on the importation
of such article into India an anti-dumping duty on
the basis of a provisional estimate of such value
and margin and if such anti-dumping duty exceeds
the margin as so determined :-
(a) the Central Government shall, having
Dmt 12 customs appeals 18-09 & ors
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regard to such determination and as soon as
may be after such determination, reduce such
anti-dumping duty; and
(b) refund shall be made of so much of the
anti-dumping duty which has been collected
as is in excess of the anti-dumping duty as so
reduced."
8. Under sub-section (3) of Section 9A, the Central
Government is empowered by a notification in the Gazette to
levy an anti-dumping duty retrospectively even from a date
prior to the imposition of the anti-dumping duty under sub-
section (2) but not beyond the ninety days from the date of the
notification where in the opinion of the Central Government
two conditions are satisfied :
"(i) there is a history of dumping which caused
injury or that the importer was, or should have
Dmt 13 customs appeals 18-09 & ors
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been, aware that the exporter practices dumping
and that such dumping would cause injury; and
(ii) the injury is caused by massive dumping of
an article imported in a relatively short time which
in the light of the timing and the volume of
imported article dumped and other circumstances is
likely to seriously undermine the remedial effect of
the anti-dumping duty liable to be levied."
9. Under sub-section (5), the anti-dumping duty
imposed unless revoked earlier, ceases to have effect on the
expiry of five years from the date of imposition. Sub-section
(6) of Section 9A stipulates that the margin of dumping is to
be ascertained and determined by the Central Government
after such inquiry as it may consider necessary. The Central
Government is empowered to make rules for the purpose of
the section. The Rules may provide for the manner in which
articles liable to be subject to anti-dumping duty may be
Dmt 14 customs appeals 18-09 & ors
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identified, the manner in which the export price and the
normal value of and the margin of dumping in relation to such
articles may be determined and for the assessment and
collection of anti-dumping duty. As now substituted, sub-
section (8) of Section 9A provides that the provisions of the
Customs Act and the Rules and Regulations made thereunder
shall, as far as may be, apply to the duty chargeable under the
Section as they apply in relation to the duty leviable under
that Act.
10. In exercise of the powers conferred by Section 9A,
the Union Government notified with effect from 1 January
1995, the Customs Tariff (Identification, Assessment and
Collection of Anti-dumping Duty on Dumped Articles and for
Determination of Injury) Rules, 1995. A Designated Authority is
constituted by Rule 3. Under Rule 4 the Designated Authority
is, inter alia, vested with the duty (i) to investigate as to the
existence, degree and effect of any alleged dumping in relation
to import of any article; (ii) to identify the articles liable for
Dmt 15 customs appeals 18-09 & ors
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anti-dumping duty; (iii) to submit findings, provisional or
otherwise, to the Central Government inter alia as regards the
normal value, export price and the margin of dumping and as
regards the injury or threat of injury to an industry established
in India or material retardation to the establishment of an
industry in India consequent upon the import of the article;
(iv) to recommend the amount of anti-dumping duty equal to
the margin of dumping or less, which if levied, would remove
the injury to the domestic industry and the date of
commencement of such duty; and (v) to review the need for
continuance of anti-dumping duty. Under Rule 12, the
Designated Authority has to render, in appropriate cases, a
preliminary finding regarding export price, normal value and
margin of dumping, and in respect of imports from specified
countries, to also record a further finding regarding injury to
the domestic industry. Rule 13 provides for the levy of
provisional duty. Under that Rule, the Central Government
may on the basis of the preliminary findings recorded by the
Designated Authority, impose a provisional duty not exceeding
Dmt 16 customs appeals 18-09 & ors
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the margin of dumping. Under the first proviso to Rule 13, no
such duty can be imposed before the expiry of sixty days
from the date of a public notice issued by the Designated
Authority regarding its decision to initiate investigations.
Under the Second proviso to Rule 13, the provisional duty is to
remain in force only for a period not exceeding six months
which can upon the request of exporters representing a
significant percentage of the trade involved be extended to
nine months. Rule 17 empowers the Designated Authority to
issue final findings within one year from the date of initiation
of an investigation. The Designated Authority is required to
determine as to whether the article under investigation is being
dumped in India. The final finding determines :
(i) the export price, normal value and the margin of
dumping of the article;
(ii) whether the import of the article in India, in the
case of imports from specified countries, causes or
Dmt 17 customs appeals 18-09 & ors
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threatens material injury to any industry established
in India or materially retards the establishment of
any industry in India;
(iii) a causal link, where applicable, between the
dumped imports and injury; and
(iv) whether a retrospective levy is called for and if so,
the reasons therefor and the date of commencement
of such retrospective levy.
The Central Government is empowered in its discretion to
extend the aforesaid period of one year by six months.
11. Under Rule 18, the Central Government is, within
three months from the date of publication of final findings by
the Designated Authority, empowered to impose by notification
in the Official Gazette, an anti-dumping duty, upon importation
in India of the article covered by the final finding, not
Dmt 18 customs appeals 18-09 & ors
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exceeding the margin of dumping determined under Rule 17.
Under sub-rule (4) of Rule 18, if the final finding of the
Designated Authority is negative that is contrary to the
evidence on the basis of which the investigation was initiated,
the Central Government is under an obligation to withdraw the
provisional duty imposed within forty-five days of the
publication of final findings.
12. The controversy in the present case turns upon the
interpretation of Rule 20 and it would, therefore, be necessary
to extract the provision in its entirety.
"20. Commencement of duty.- (1) The anti-dumping
duty levied under rule 13 and rule 19 shall take
effect from the date of its publication in the Official
Gazette.
(2) Notwithstanding anything contained in sub-
rule (1) -
Dmt 19 customs appeals 18-09 & ors
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(a) where a provisional duty has been levied and
where the designated authority has recorded
a final finding of injury or where the
designated authority has recorded a final
finding of threat of injury and a further
finding that the effect of dumped imports in
the absence of provisional duty would have
led to injury, the anti-dumping duty may be
levied from the date of imposition of
provisional duty;
(b) in the circumstances referred to in sub-
section (3) of section 9A of the Act, the anti-
dumping duty may be levied retrospectively
from the date commencing ninety days prior
to the imposition of such provisional duty;
Provided that no duty shall be levied
Dmt 20 customs appeals 18-09 & ors
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retrospectively on imports entered for home
consumption before initiation of the investigation;
Provided further that in the cases of violation
of price undertaking referred to in sub-rule (6) of
rule 15, no duty shall be levied retrospectively on
the imports which have entered for home
consumption before the violation of the terms of
such undertaking.
[Provided also that notwithstanding anything
contained in the foregoing proviso, in case of
violation of such undertaking, the provisional duty
shall be deemed to have been levied from the date
of violation of the undertaking or such date as the
Central Government may specify in each case.]"
Rule 21 provides for refund of duty and is as
follows :
Dmt 21 customs appeals 18-09 & ors
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"21. Refund of duty. - (1) If the anti-dumping
duty imposed by the Central Government on the
basis of the final findings of the investigation
conducted by the designated authority is higher
than the provisional duty already imposed and
collected, the differential shall not be collected
from the importer.
(2) if, the anti-dumping duty fixed after the
conclusion of the investigation is lower than the
provisional duty already imposed and collected, the
difference shall be refunded to the importer.
(3) If the provisional duty imposed by the
Central Government is withdrawn in accordance
with the provisions of sub-rule (4) of rule 18, the
provisional duty already imposed and collected, if
any, shall be refunded to the importer."
Dmt 22 customs appeals 18-09 & ors
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13. On behalf of the Appellants, it has been submitted
by learned Counsel that :
(i) The issue which arises before the Court is not res
integra but is covered by a decision of a Division
Bench of the Kerala High Court in Commissioner of
Customs vs. Akash Trading Co. 1;
(ii) Under sub-section (2) of Section 9A the Central
Government is empowered, pending the
determination in accordance with the provisions of
the Section of the normal value and the margin of
dumping to impose an anti-dumping duty on the
basis of a provisional estimate of such value and
margin ;
(iii) Under Rule 13 which provides for the levy of a
1 2010 (253) E.L.T. 734 (Ker.)
Dmt 23 customs appeals 18-09 & ors
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provisional duty, the Central Government is
empowered to impose a provisional duty on the
basis of the preliminary findings recorded by the
Designated Authority, albeit for a period of six
months;
(iv) Upon the publication of the final findings by the
Designated Authority, the Central Government may
impose an anti-dumping duty not exceeding the
margin of dumping as determined under Rule 17;
(v) Both, the provisional duty and the final anti-
dumping duty, take effect from the publication in
the Official Gazette under Rule 20 (1);
(vi) However, Rule 20(2) which overrides sub-rule (1)
stipulates that in certain circumstances the anti-
dumping duty may be levied from the date of the
imposition of the provisional duty. Once the
Dmt 24 customs appeals 18-09 & ors
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conditions which are spelt out in Rule 20(2)(a) are
fulfilled, the date of commencement of the
definitive anti-dumping duty has to be the date of
imposition of the provisional anti-dumping duty and
the definitive duty will remain in force for a period
of five years. The definitive anti-dumping duty
would cover the period of five years commencing
from the provisional anti-dumping duty without any
break or hiatus. Any other construction would
defeat the object and purpose of imposing a
definitive anti-dumping duty after investigation has
found that the statutory requirements for the
imposition have been duly fulfilled.
(vii) In the present case, there is a finding by the
Designated Authority that the conditions which
have been provided for in Rule 20(2)(a) were
fulfilled. Hence, the levy of the final anti-dumping
duty would take effect from the date of the
Dmt 25 customs appeals 18-09 & ors
.
imposition of the provisional duty and would cover
the entire period without any break.
14. On the other hand, it has been urged on behalf of
the Respondents that :
(i) Rule 20(2)(a) should be interpreted in the light of
the WTO agreement particularly clause 10.2 thereof
since the object of enacting the provisions of
Section 9A was to enforce the obligations cast
upon India as a member of the World Trade
Organisation;
(ii) Even if there is a deviation in the language used
in the rules from the words of the WTO
agreement, if one of the meanings of Rule 20(2)(a)
is consistent with the WTO agreement, that must
be preferred;
Dmt 26 customs appeals 18-09 & ors
.
(iii) The word "levied" in the context of Rule 20(2)(a)
means the period for which the provisional duty
was imposed and collected;
(iv) On the date when the imports took place, there
was no liability to pay provisional duty because the
period of six months had expired. The final duty
has been imposed later and is, therefore,
retrospective. Subordinate legislation cannot be
retrospective unless the statute under which it is
enacted authorises retrospectivity. If a construction
which does not make a subordinate legislation
retrospective is available, that must be preferred;
(v) When the Act was enacted, Parliament had before
it both, the provisions of the Ordinance and the
Rules which were brought into force on 1 January
1995. Consequently, Parliament must be attributed
with an intent to enforce the obligations contained
Dmt 27 customs appeals 18-09 & ors
.
in the WTO agreement;
(vi) The expression "pending" in Section 9A(2) refers to
the condition for the exercise of the power and not
the duration for which a provisional duty can be
imposed;
(vii) Alternatively, it has been urged that if the
contention which is urged on behalf of the
Revenue is accepted, that would result in a
situation where the definitive anti-dumping duty is
rendered retrospective. The Customs Tariff Act,
1975 does not authorise the imposition of a
retrospective duty which must, therefore, be held to
be ultra vires. (This submission has been urged in
support of the Petitions under Article 226).
The rival submissions now fall for determination.
Dmt 28 customs appeals 18-09 & ors
.
15. Under Sub-section (1) of Section 9A of the Customs
Tariff Act, 1975 Parliament empowered the Central Government
to impose anti-dumping duty not exceeding the margin of
dumping on an article exported into India by an exporting
country at less than its normal value. In sub-section (2) of
Section 9A Parliament made a provision empowering the Union
Government to impose an anti-dumping duty on a provisional
estimate of the normal value and the margin of dumping. The
duty under sub-section (2) of Section 9A is an interim measure
because it is to be enforced pending the determination in
accordance with the provisions of the Section. The imposition
of a duty under Section 9A (2) is on a provisional estimate. A
provisional estimate is a tentative evaluation which gives way
to and merges in a final determination. The duty under
Section 9A (2) is pending the ultimate determination. An
enabling provision is made by Parliament authorising the
Central Government to impose a duty under Section 9A (2) to
protect the public interest which the statute protects, till a final
determination is made. The enabling provision covers the
Dmt 29 customs appeals 18-09 & ors
.
period until the determination in accordance with the
provisions of the Section is made. Sub-section (3) of Section
9A authorises the levy of an anti-dumping duty even from a
date prior to the imposition of an anti-dumping duty under
sub-section (2) but not beyond ninety days from the date of
the notification under that sub-section. The duty under sub-
section (3) is understood by Parliament to be retrospective
because Parliament has authorised imposition of the duty,
subject to the fulfilment of the requirements of sub-section (3),
from a date even prior to the imposition of a provisional anti-
dumping duty under sub-section (2). At this stage, what merits
emphasis is the legal position that while enacting Section 9A
Parliament expressly contemplated the imposition of (i) A
provisional anti-dumping duty which would be levied pending
the final determination; and (ii) The imposition of a definitive
final anti-dumping duty.
16. The Anti-dumping Rules have been framed by the
Central Government under the statutory authority conferred by
Dmt 30 customs appeals 18-09 & ors
.
sub-section (6) of Section 9A. Under sub-section (6) the Rules
are framed for the purpose of the section. Without prejudice
to the generality of that provision the Rules may provide for
the manner in which articles liable to anti-dumping duty may
be identified, the manner in which the export price and the
normal value and the margin of dumping may be determined
and for the assessment and collection of the anti-dumping
duty. Section 9B however provides an overriding stipulation
in that notwithstanding anything contained in Section 9 or
Section 9A, the Central Government shall not levy any
countervailing duty or anti-dumping duty under sub-section (1)
on the import of any articles into India from a member
country of the WTO or from a country with whom the
Government has a most favoured nation agreement unless in
accordance with the Rules made under sub-section (2) a
determination is made that import of an article into India
causes or threatens a material injury to any established
industry in India or materially retards establishment of industry
in India. Similarly, the Central Government cannot levy
Dmt 31 customs appeals 18-09 & ors
.
countervailing duty or an anti-dumping duty under sub-section
(2) of Section 9A on the import of an article from specified
countries unless in accordance with the Rules a preliminary
finding had been made of dumping and consequent injury to
domestic industry and a further determination has also been
made that a duty is necessary to prevent injury being caused
during the investigation.
17. The relevant provisions of the Act including those
of Section 9A were enacted in order to fulfill the obligations
which were cast upon India as a member of the WTO and
pursuant to the Uruguay Round of Multilateral trade
negotiations. The Statement of objects and reasons adverts to
the background in which the Legislation came to be enacted.
The Statement of objects and reasons accompanying the
introduction of the Bill in Parliament provided that the Final
Act, embodying the results of the Uruguay Round of
Multilateral Trade Negotiations, contains, inter alia new
agreements on anti-dumping, subsidies and countervailing
Dmt 32 customs appeals 18-09 & ors
.
measures. Member countries were required to ensure the
conformity of their laws, regulations and administrative
procedures with those provided in the Final Act. India having
acceded to join the World Trade Organisation with effect from
1 January 1995, the Union Government was required to align
its laws relating to countervailing duty and anti-dumping duty
with the provisions contained in the Final Act. Some of the
changes which were introduced in the Customs Tariff Act, 1975
and brought through the Ordinance included the levy of anti-
dumping and countervailing duties retrospectively in specified
circumstances. Such duties would cease to operate five years
after the date of imposition unless reviewed before their expiry.
18. In addressing the task of statutory interpretation,
certain important precepts have to be borne in mind by the
Court. Where legislation is enacted by Parliament to enable
the Union Government to give effect to its obligations under
an International convention, the language used in the
enactment should be construed, to the extent that this is
Dmt 33 customs appeals 18-09 & ors
.
possible, in the sense in which it has been used in the
international convention which the enactment seeks to enforce
if the words of the enactment are reasonably capable of such a
construction. Lord Diplock, speaking for House of Lords in
the Eschersheim 1 enunciated the principle which under the
common law must govern, thus :
"
As the Act was passed to enable Her
Majesty's Government to give effect to the
obligations in international law which it would
assume on ratifying the Convention to which it was
a signatory, the rule of statutory construction laid
down in Saloman v. Customs and Excise
Commissioners [1967] 2 Q.B. 116 and Post Office v.
Estuary Radio Ltd. [1968] 2 Q.B. 740 is applicable.
If there be any difference between the language of
the statutory provision and that of the
corresponding provision of the Convention, the
1 1976 WLR 430
Dmt 34 customs appeals 18-09 & ors
.
statutory language should be construed in the same
sense as that of the Convention if the words of the
statute are reasonably capable of bearing that
meaning.
...............
Accordingly if the language used in the English list
is capable of more than one meaning that meaning
is to be preferred that is consistent with the
language used to describe the corresponding claim
in the Scottish list."
Under Article 51 (c) of the Constitution which forms part of
the Directive Principles, the State shall endeavour to foster
respect for international law and treaty obligations in the
dealings of organised peoples with one another. When the
State seeks to enforce an international agreement by enacting
legislation on the subject, the Court must of course give a
contextual meaning to the language used. Even as a matter
of first principle, as noted in the judgment of Justice Bhagwati
Dmt 35 customs appeals 18-09 & ors
.
in Union of India v. Sakalchand Himatlal Sheth 1, the words
used in a statute cannot be read in isolation; their colour and
content are derived from their context. While placing a
contextual interpretation on the words used, the Court
nonetheless has a duty to fulfill the primary task which is to
construe the meaning of the language used by Parliament in a
statute. The Court when it construes the terms of a statutory
enactment is bound to give effect to the meaning of the words
used by Parliament. Where Parliament has made a departure
from the language used in an International Convention, the
Court which has to elucidate the meaning of the words used
by Parliament cannot ignore the content and meaning of those
words.
19. The agreement on implementation of Article 6 of
the General Agreement on Tariffs and Trade, 1994 provides that
an anti-dumping measure shall be applied only under the
circumstances provided in Article 6 and pursuant to the
1 (1977) 4 SCC 193
Dmt 36 customs appeals 18-09 & ors
.
investigation initiated and conducted in accordance with the
provisions of the agreement. Article 2 provides for the
determination of dumping; Article 3 provides for determination
of injury; Article 5 provides for the initiation and subsequent
investigation; and Article 7 provides for provisional measures.
Article 7.1 stipulates that provisional measures may be applied
only if (i) an investigation has been initiated following which a
public notice giving affected parties an opportunity to submit
their information and evidence has been issued; (ii) a
preliminary affirmative determination has been made of
dumping and of subsequent injury to the domestic industry
and (iii) the authorities concerned judge such measures
necessary to prevent injury being caused during the
investigation. Under Article 7.2 provisional measures may take
the form of a provisional duty or, preferably, a security equal to
the amount of the anti-dumping duty provisionally estimated,
being not greater than the provisionally estimated margin of
dumping. Under Article 7.4 the application of provisional
measures is to be limited to as short a period as possible, not
Dmt 37 customs appeals 18-09 & ors
.
exceeding four months or, upon the request of the exporters
representing a significant percentage of the trade involved, not
exceeding six months and nine months respectively. Article 10
is titled 'retroactivity'. Article 10.2 provides that where a final
determination of injury (but not of a threat thereof or of a
material retardation of the establishment of an industry) is
made or, in the case of a final determination of a threat of
injury, where the effect of the dumped imports would, in the
absence of the provisional measures, have led to a
determination of injury "anti-dumping duties may be levied
retroactively for the period for which provisional measures, if
any, have been applied." Article 10.3 provides that if the
definitive anti-dumping duty is higher than the provisional
duty paid or payable, or the amount estimated for the purpose
of the security, the difference shall not be collected.
20. Parliament in India enacted Section 9A(2) to
provide for the imposition of an anti-dumping duty on the
basis of a provisional estimate of the normal value and the
Dmt 38 customs appeals 18-09 & ors
.
margin of dumping, pending a determination in accordance
with the provisions of the section. Rule 13 empowers the
Central Government to impose a provisional duty not
exceeding the margin of dumping on the basis of the
preliminary findings recorded by the Designated Authority.
Under the second proviso to Rule 13, the provisional duty is to
remain in force only for a period not exceeding six months
which can be extended by the Union Government to nine
months on a request of the exporters representing a significant
percentage of the trade. Once a final finding has been
recorded by the Designated Authority, under Rule 17, the
Central Government is empowered under Rule 18 to impose
anti-dumping duty not exceeding the margin of dumping
within three months of the date of publication of final findings
by the designated authority. While under sub-rule (1) of Rule
20 it is stipulated that anti-dumping duty shall take effect from
the date of its publication in the Official Gazette, sub-rule (2)
contains a non-obstante provision and which overrides sub-rule
(1). Under clause (a) of sub-rule (2) the anti-dumping duty
Dmt 39 customs appeals 18-09 & ors
.
may be levied from the date of imposition of provisional duty
in a situation where a provisional duty has been levied and
where the designated authority has recorded a final finding of
injury or where the designated authority has recorded a final
finding of threat of injury and a further finding that the effect
of dumped imports in the absence of provisional duty would
have led to injury.
21. The construction which has been suggested on
behalf of the Respondents would lead to a manifest absurdity.
The clear meaning of Rule 20(2)(a) is to authorise the levy of
the anti-dumping duty from the date of the imposition of
provisional duty. This follows a finding by the Designated
Authority either that there has been an injury or a finding of a
threat of injury coupled with the finding that in the absence of
a provisional duty, the dumped imports would have caused an
injury. Once the levy of an anti-dumping duty under Rule
20(2)(a) relates back to the date of the imposition of provisional
duty, there would be no reason or justification to hold that the
Dmt 40 customs appeals 18-09 & ors
.
levy of the anti-dumping duty must sustain a break during the
period between the expiry of the provisional duty and the
issuance of a notification imposing a final anti-dumping duty.
If this construction were to be adopted, imports which were
made during the period between the expiry of the provisional
duty and the levy of the final anti-dumping duty would go
unchecked notwithstanding the fact that the Designated
Authority has found, upon investigation, injury or a threat of
injury coupled with a further finding that in the absence of
provisional duty, the dumped imports could have led to an
injury. Such a construction would militate against the object
and purpose underlying the conferment of power upon the
Union Government under Section 9A to impose an anti-
dumping duty not exceeding the margin of dumping.
22. The submission which has been urged on behalf of
the Respondents is that clause (a) of sub-rule (2) of Rule 20
begins with the words "where a provisional duty has been
levied". Learned Counsel submitted that the word "levied"
Dmt 41 customs appeals 18-09 & ors
.
in Rule 20(2)(a) must mean a levy which is imposed and
collected and not merely a levy which is imposed. On this
foundation it was urged that since no levy has been collected
during the gap period following the expiry of the provisional
levy, a provisional duty has not been levied within the meaning
of Rule 20(2)(a) and hence the anti-dumping duty cannot cover
the gap period. We are unable to accept the submission.
The word "levy" must receive a construction consistent with
the context in which it is used. Rule 4(1)(d) for instance
authorises the Designated Authority to recommend the amount
of anti-dumping duty equal to the margin of dumping or less,
which if levied, would remove the injury to the domestic
industry, and the date of the commencement of the duty. The
marginal note to Rule 13 speaks of levy of provisional duty
while the substantive part empowers the Central Government
on the basis of the preliminary findings of the Designated
Authority to impose a provisional duty not exceeding the
margin of dumping. Rule 18 which again speaks of levy of
duty, authorises the Central Government upon the publication
Dmt 42 customs appeals 18-09 & ors
.
of final findings by the Designated Authority to impose an
anti-dumping duty. When Rule 20(2)(a) refers to a situation
where "a provisional duty has been levied" the rule adverts to
the levy under sub-section (2) of Section 9A read with Rule 13.
Sub-section (2) of Section 9A refers to the imposition of an
anti-dumping duty on the basis of a provisional estimate of the
normal value and the margin of dumping. Under Rule 13, the
Central Government can impose a provisional duty not
exceeding the margin of dumping. In this context, when Rule
20(2)(a) speaks of the levy of the anti-dumping duty from the
date of the imposition of a provisional duty, the rule refers to
the date with effect from which the provisional duty was
imposed. The initial words of clause (a) only require that the
provisional duty ought to have been levied before the anti-
dumping duty may be levied from the date of the imposition
of a provisional duty. The fact that the provisional duty had
come to an end upon the expiry of a period of six months
makes no difference to the provisions of Rule 20(2)(a) for the
simple reason that the anti-dumping duty, once the conditions
Dmt 43 customs appeals 18-09 & ors
.
specified in the rule are fulfilled, relates back to the date of
the imposition of the provisional duty.
23. Under Rule 20 if the anti-dumping duty which is
imposed by the Central Government on the basis of the final
findings of the Designated Authority is higher than the
provisional duty already imposed and collected, the differential
is not to be collected from the importer. However, if the anti-
dumping duty is lower than the provisional duty already
imposed and collected, the differential is to be refunded to the
importer. Rule 21 has carefully used the expression
"provisional duty already imposed and collected" something
which is not present in Rule 20(2)(a). Consequently, in
interpreting the provisions of Rule 20(2)(a), the Court must be
guided by the normal and ordinary meaning of the words used
which is that the anti-dumping duty may be levied from the
date from which the provisional duty was imposed.
24. Learned Counsel appearing on behalf of
Dmt 44 customs appeals 18-09 & ors
.
Respondents sought to place reliance on a decision of a
Division Bench of this Court in Krishnakant Sakharam Ghag vs.
Union of India 1 . In that case it was contended on behalf of
the Petitioner that the provisions of Section 12 of the Central
Excise Act, 1944 did not empower the Central Government to
import the recovery provisions contained in Customs Act, 1962.
Section 12 provided that the Central Government may by a
notification in the Gazette declare that any of the provisions of
the Customs Act, 1962 relating to the levy of an exemption
from customs duty shall be applicable with such modifications
and alterations as are considered necessary in regard to the
like matters in respect of duties imposed under Section 3. In
that context, the Division Bench held that the natural meaning
of the word 'levy' is to collect and even judicially the word
'levy' has been construed to mean the determination of
liability as well as the collection of tax. The Division Bench,
therefore, rejected the contention of the Petitioner there that
when Section 12 of the Excise Act empowers the Central
1 2006 (206) E.L.T. 1117 (Bom.)
Dmt 45 customs appeals 18-09 & ors
.
Government to apply the provisions of the Customs Act, 1962
relating to levy, this should not include provisions for recovery
or collection of tax. The decision of the Division Bench in
fact emphasises that the meaning of a statutory term must
receive meaning in the context in which the words are used.
In the context in which the words are used in Rule 20(2)(a),
an anti-dumping duty can be levied from the date of
imposition of a provisional duty where the provisional duty has
been levied, subject to the fulfilment of the other requirements.
'Where a provisional duty has been levied' reflects a situation
where, a duty was imposed in exercise of powers conferred by
sub-section (2) of Section 9A read with Rule 13.
25. The argument of retrospectivity is similarly lacking
in substance. Sub-section (2) of Section 9A empowers the
Central Government to impose a duty on the basis of the
provisional estimate pending a determination in accordance
with the provisions of the Section. Parliament, when it
enacted sub-section (3) of Section 9A, considered that the levy
Dmt 46 customs appeals 18-09 & ors
.
of an anti-dumping duty, prior to the date of imposition of the
provisional duty under sub-section (2) would be retrospective
and, therefore, confined the duration of the imposition of such
a duty to a period of not more than ninety days from the date
of the notification issued under sub-section (2). The imposition
of an anti-dumping duty following the final finding of the
Designated Authority, with effect from the date on which the
provisional duty was imposed, cannot be regarded as
retrospective. What Rule 20(2)(a) does is to empower the
Central Government to impose an anti-dumping duty with
effect from the date of the imposition of the provisional duty.
The final anti-dumping duty on the imposition relates back to
the imposition of the provisional duty. This cannot be
regarded as retrospective in nature or character.
26. During the course of the hearing, we have perused
the judgment of the Kerala High Court in Commissioner of
Customs vs. Akash Trading Co. 1. In that case the issue which
1 2010 (253) E.L.T. 734 (Ker.)
Dmt 47 customs appeals 18-09 & ors
.
was raised by the Revenue was whether the Respondent was
liable to pay anti-dumping duty on the import of Compact
Florescent Lamps from the Peoples Republic of China and
Hong Kong based on a final notification issued by the Central
Government. A provisional anti-dumping duty was imposed
by a notification dated 20 December 2001 under sub-section (2)
of Section 9A read with Rules 13 and 20. The Respondents
had effected import after the expiry of six months from the
date of the issuance of the notification imposing the
provisional duty. Demands for duty were made against the
Respondents. The First Appellate Authority and the Tribunal
held that anti-dumping duty was not payable by the
Respondents on the ground that the notification imposing a
provisional duty had expired by the time the imports were
made by the Respondents. Allowing the appeal filed by the
Commissioner of Customs, the Division Bench of the Kerala
High Court held as follows :-
"Rule 20(2)(a) gives authority to the Government to
Dmt 48 customs appeals 18-09 & ors
.
levy anti-dumping duty with effect from the date of
imposition of provisional duty. In fact, in our view,
the contention of the respondents and assumption
of the Tribunal, that levy under Annexure B
notification is retrospective is not correct because
provision for levy of anti-dumping duty with
retrospective effect is contained in Section 9A(3)
read with Rule 20(b) of the Rules, whereas
Annexure B is issued under Section 9A(5) read with
Rule 20(2)(a) of the Rules. In this case, there is no
retrospective levy because retrospective levy can be
only for period prior to the issue of notification
providing for provisional anti-dumping duty. Once
an order under Section 9A(2) is issued imposing
duty provisionally then the question of
retrospectivity does not arise and only Rule 20(2)(a)
applies which authorises the Government to levy
anti-dumping duty from the date of introduction of
provisional duty which is the case here.
Dmt 49 customs appeals 18-09 & ors
.
......................
once provisional anti-dumping duty is levied for
any goods, any subsequent import of such goods
will attract anti-dumping duty if final orders
provide for levy with effect from the date of
provisional order. We are therefore of the view
that the Tribunal went wrong in holding that anti-
dumping duty cannot be levied or collected from
the respondents after expiry of Annexure A
notification."
We are in respectful agreement with the view of the Kerala
High Court.
27. For these reasons, we are of the view that the
Appeals by the Revenue would have to be allowed. The first
Question of Law which has been formulated, shall accordingly
stand answered in the negative. The second Question of Law
has not been pressed on behalf of the Revenue. The Third and
Dmt 50 customs appeals 18-09 & ors
.
the Fourth Questions of Law wold have to be answered in the
negative having regard to the substituted provisions of Sub-
section (8) of Section 9A of the Customs Tariff Act, 1975. The
fifth Question of Law shall stand answered in terms of the
decision of the first Question of Law. The Appeals are,
accordingly, allowed in these terms. There shall be no order as
to costs. As far as the Writ Petitions are concerned, for the
reasons already indicated, Sub Rule (2) of Rule 21 of the Anti-
dumping Rules is not ultra vires the provisions of Section 9A(1)
. Similarly, the notification dated 1 May 2003 is not ultra vires
the provisions of Section 9A (1). Both the Petitions shall
therefore stand dismissed. No order as to costs.
(Dr. D.Y. Chandrachud, J.)
(A. A. Sayed, J.)
