1. M/s. Haldar Topsoe A.S. Copenhagen, Denmark thereafter referred to as HTAS are the appellants. They challenge the final finding of the Designated Authority appointed under Rule 3 of Customs Tariff (Identification, Assessment and Collection of Anti-Dumping Duty on Dumped Articles and for Determination of Injury) Rules 1995, hereinafter referred to as Rules, published in Ministry of Commerce Notification dated 5-1-1998. By the said finding the Designated Authority determined that there was dumping in respect of catalysts originating in or imported from Denmark and recommended imposition of Anti-dumping duty on six Catalysts exported by the appellant. Ministry of Finance accepted the recommendations and issued notification levying anti-dumping duties on six Catalysts. These Catalysts are used in fertiliser and petroleum refining plants.
2. Proceedings under the Rules were initiated against the appellant on receipt of applications from M/s. United Catalysts India Ltd., hereinafter referred to as UCIL and M/s. Projects and Development India Ltd., hereinafter referred to as PDIL. These two industries alleged dumping by the appellant of six types of Catalysts : 3. Designated Authority issued public notice initiating Anti-dumping investigation on import of the above catalysts from Denmark on 6-9-1996. Questionnaire was served on the appellant for eliciting information on 10-9-1996. Appellant furnished reply to the questionnaire. On 7-5-1997 Designated Authority published preliminary finding holding that six catalysts were imported and classified under Tariff Item 38.15 as also under 98.01 and hence dumping margins are to be determined separately for each of the Tariff Heading. Accordingly, it recommended different rates of Anti-dumping duty. Ministry of Finance thereupon by Notification No. 56/97, dated 26-6-1997 imposed provisional anti-dumping duty valid upto 19-12-1997. Appellant challenged the provisional determination made by the Designated Authority. Public hearing was held on 8-7-1997. There was change in the person of the Designated Authority. So another public hearing was held on 2-1-1998. Thereafter Designated Authority published its final finding by notification dated 5-1-1998. This finding is under challenge.
4. Learned Counsel representing the appellant raised following points for our consideration. The first point was that the Designated Authority ought to have determined whether the catalysts in question were being dumped in India, within one year from the date of initiation of investigation. This having not been done, the final order is invalid and unsustainable. Secondly, it was urged that the designated Authority erred in fixing the normal value of the catalysts. The method adopted by the authority is contrary to the provisions contained in the Act and Rules. Third contention was that the authority did not properly find out the injury margin. All relevant aspects were not taken into consideration while fixing the fair selling price of the catalysts manufactured by domestic industry. Lastly, it was urged that for same catalysts two anti-dumping margins should not have been fixed depending on the end-use to which the imported article is put. We shall proceed to deal with these points hereinbelow.
5. Rule 17 of the Rules mandates that the Designated Authority should determine whether the article under investigation is being dumped in India or not within one year from the date of initiation of the investigation. This time limit can be extended by the Central Government for a further period of six months. To grant this extension there must be existence of circumstances of exceptional nature. In the instant case, Designated Authority initiated action on the application submitted by domestic industry on 6-9-1996. One year period fixed in Rule 17 has to be calculated from that date. The period of one year expired on 5-9-1997. Final order was issued only on 5-1-1998. It means the Designated Authority took one year and four months from the date of initiation of the proceedings for passing the final order. On the basis of the preliminary finding, Ministry of Finance issued Notification No.56/97, dated 20-6-1997 imposing provisional anti-dumping duty valid up to 19-12-1997. Till the date of expiry of that notification, Designated Authority did not issue the final order. On this basis, it was contended by the learned Counsel representing the appellant that the final order issued by the Designated Authority on 5-1-1998 is without jurisdiction.
6. Files of the Designated Authority which were placed before us show that prior to the expiry of one year fixed under Rule 17, request was made to the Central Government for extending the time. By letter dated 4-9-1997 further time was asked for by the Designated Authority. That request was granted by office memorandum dated 13-10-1997 whereunder period for submission of final finding was extended up to and inclusive of 5-12-1997. Since the Designated Authority could not pass the final order within the extended period, further extension was again sought for by letter dated 28-11-1997 Government of India then extended the period by another one month expiring on 5-1-1998. Within that extended period the final order has been issued by the Designated Authority.
Thus, as could be seen from the records now made available to this Tribunal, the Central Govt, extended the period beyond one year fixed under Rule 17 of the Rules. Learned Counsel representing the appellant raised a contention that the extension of time granted by the Central Govt, was illegal because the said extension was given without hearing the appellant who was the party aggrieved in the case. Power of the Central Govt, to extend the period of one year by six months can be exercised only on existence of circumstances of exceptional nature. For deciding whether there existed exceptional circumstances to grant extension of time, a notice should have been given to the affected party against whom the allegation of dumping his produce in India was made. The Central Govt, having given extension without issuing notice to the appellant, it was contended, acted in violation of the principles of natural justice and hence the order is to be set aside.
In support of this argument, learned Counsel brought to our notice a Constitution Bench decision of the Supreme Court in /./. Rao., Asstt.
Collector of Customs v. Bibhuti Bhushan Bagh, 1989 (42) E.L.T. 338.
That decision related to the scope and ambit of the proviso to Section 110(2) of the Customs Act which gives power to the Collector of Customs to extend the period within which the order of confiscation could be passed. The proviso to that Section stated that on sufficient cause being shown, period of six months fixed in the main Section can be extended by the Collector for a further period not exceeding six months. The question that came up for consideration was whether the Collector of Customs while extending the period of six months should afford an opportunity of being heard to the person, from whom the goods were seized. Their Lordships took the view that in cases falling under the said proviso, notice must be issued to the person from whose possession the goods have been seized about the proposal to extend the period of six months. The said notice, according to their Lordships, should be issued before the expiry of the original period fixed by the Section. This principle stated by their Lordships, according to the learned Counsel, must apply on all fours to the Central Govt, while exercising the powers under the proviso to Rule 17, because that proviso requires existence of circumstances of exceptional nature. The existence of such circumstances is a condition precedent for the Central Govt, to exercise jurisdiction to grant extension. For deciding that aggrieved party should have been given notice. The notice not having been issued by the Central Govt., the extension granted, it is contended, is illegal.
7. There is nothing on record to show that Central Govt, issued any notice to the appellant herein before granting the extension of the time fixed by Rule 17. Even so, the action of the Central Govt, is not one which can be gone into by us in exercise of the appellate jurisdiction conferred on this Tribunal under Section 9C of the Customs Tariff Act, hereinafter referred to as the Act. As that section now stands, we are not to examine the correctness or otherwise of the action of the Central Govt. For the same reason, we hold that the decision in Gemini Metal Works v. The Union of India, 1985 (22) E.L.T.27 (Mad.) cannot also be of any assistance to the appellant. The jurisdiction of this Tribunal is limited to those conferred by Section 9C of the Act. Since this Tribunal is the creation of that statute and its jurisdiction is confined to those that are specifically conferred on it thereunder, we are not in a position to upset the order of the Designated Authority on the ground that the Central Govt, granted extension without complying with the principles of natural justice.
8. On getting the period fixed under Rule 17 extended, the Designated Authority proceeded with the enquiry. Appellant took part in the enquiry. They were heard in person. They submitted argument notes.
After having taken part in the proceedings, they cannot be allowed to turn round and question the jurisdiction of the authority when the decision has gone against them. They cannot be allowed to blow hot and cold at the same breath. In these circumstances, we do not find our way to interfere with the final order of the Designated Authority on the ground that the said order was passed after the expiry of one year fixed by Rule 17 of the Rules.
9. Section 9A of the Act, inter alia, states that 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 Govt, may by notification in the official gazette impose an anti-dumping duty not exceeding the margin of dumping in relation to such article. This provides for the maximum limit of anti-dumping duty that can be imposed on an imported article. For finding out this maximum, the Designated Authority should find the normal value of that article in the country from where it is exported. When the export price of that article is less than the normal value, the difference is the dumping margin and anti-dumping duty cannot exceed this margin.
10. It was conceded before us on all sides that anti-dumping duty is exporter specific and exporting county specific. This means that the normal value of the article of the specific exporter in the country from which it is exported should be the basis for finding out the dumping margin. If that specific exporter exports his produce at a price lower than his normal value in that country, then that difference and that difference alone can be the maximum limit of the anti-dumping duty. For finding out the anti-dumping duty that can be imposed on an exporter, the normal value of the article in the country of export and its export price should be found out.
11. Clause C of Section 9A defines normal value. Sub-clause (i) of Clause C states that normal value means the comparable price in the ordinary course of trade for the like article meant for consumption in the exporting country or territory as determined in accordance with the Rules. The comparable price in the ordinary course of trade mentioned in this Sub-clause can only be the comparable price for the like article manufactured by the same exporter against whom investigation is undertaken by the Designated Authority. Price of the like article of any other manufacturer cannot be the basis for finding out the normal value for assessing the dumping margin or normal value. When such comparable price for the like article of the same manufacturer is not available, then Sub-clause (ii) of Clause C comes into operation. This Sub-clause contains two alternatives. The first alternative is comparable representative price of the like article when exported from the exporting country or territory to an appropriate country. When particular manufacturer/exporter who is stated to be dumping his produce in India has no sales of like article in the domestic market, then the representative price of that article when he exports to an appropriate country, can be the basis for finding the normal value.
Normal value of the article can also be assessed as per the second alternative provided therein, namely, the cost of production of the article in the country of origin along with reasonable addition for administrative selling and general cost and for profits.
12. A proper understanding of Clause C of Section 9A shows that for finding out the normal value, Designated Authority has got three options before it. The first and the foremost option is to find out the comparable price for the like article in the ordinary course of trade when meant for consumption in the exporting country or territory of the same manufacturer or exporter. If the exporter is not having a domestic market in the exporting country, then his price of the article to an appropriate third country can be the basis. In the absence of such an export price to an appropriate third country, then the third alternative that is permissible is to find out the cost of production of the said article in the country of origin incurred by the exporter and add to it administrative, selling and general cost and profits.
Since the anti-dumping duty is exporter specific or manufacturer specific, price of similar article manufactured by other exporters/manufacturers cannot be the basis for finding out the normal value.
13. In the instant case, the Designated Authority was enquiring into the extent of anti-dumping duty that can be imposed on the six catalysts exported from Denmark to India. Appellant before us, the manufacturer of these catalysts in Denmark, had no domestic market for them in Denmark. There was no material to establish their export price of these articles to appropriate third countries. Nor was there any evidence before the Designated Authority to find out the manufacturer's export price of these articles to other European countries forming part of the European Union. Appellant furnished cost of production of these catalysts in the country of origin, namely, Denmark. Designated Authority did not go into the question as to whether the details furnished by the appellant were correct or not.
14. For finding out the normal value of the six catalysts with which we are concerned in this case, the list price of like catalysts manufactured by another manufacturer, namely, M/s. Sud-Chemie of Germany was taken into consideration. On the basis of the list price of Sud-Chemie, Designated Authority found out the normal value. This action of the Designated Authority is clearly in violation of the specific provisions contained in Section 9A(c) of the Act. When the anti-dumping duty is exporter specific and country specific, price of the catalysts manufactured by Sud-Chemie in Germany should not have been relied on by the Designated Authority.
15. Appellant in their representation dated 14-7-1997 filed before the Designated Authority specifically averred that Sud-Chemie sold the individual catalysts 30% to 52% lower man the list price. They stated "the average price of these five catalysts sold by Sud-Chemie AG, Germany's Belgian subsidiary was around 44% lower than Sud-Chemie's 1995 European Price List". This averment made by the appellant before the Designated Authority was never looked into by that authority while passing the final order. It is common knowledge that in commercial transactions many discounts are given to customers and the actual sale price falls far below that shown in the price list Designated Authority erred in relying on the price shown in this price list of Sud-Chemie AG of Germany to find out the normal value of the catalysts exported by the appellant from Denmark on this count also.
16. One contention by the respondents including the Designated Authority is that Denmark is a constituent of European Union, various countries including Germany form part of Union and so territories covered by all the constituent members of European Union must be taken as one territory coming within the purview of that word used in Section 9A(c). In this view of the matter, it was argued, the price of like article in Germany can be taken to be the normal value in the exporting territory. Even conceding for arguments sake that such an extended view can be taken, on the facts of this case, Designated Authority could not have adopted the price in the domestic market of Germany for the simple reason that the proceedings were not in relation to goods originating from Germany. This we say because anti-dumping is country specific. No proceedings have been initiated in relation to the catalysts exported from Germany or for that matter from any country forming part of the European Union. So the price list of Sud-Chemie in relation to similar catalysts manufactured by them in Germany has no relevance for deciding the present issue.
17. UCIL, one of the petitioners before the Designated Authority, is admittedly a member of internationally reputed Sud-Chemie/UCI group. It is their own case that their R&D department has strong links with the R&D department of Sud-Chemie AG of Germany and UCI of USA, their collaborators. Along with the application for initiating action in this case UCIL produced many graphs showing the difference in the price quoted by Sud-Chemie, HTAS and UCIL. Curiously enough, no data is given as to how many contracts were concluded in favour of HTAS on account of their quoting lower price. This raises serious doubts about the relevance of the data relied upon by the Designated Authority. Merely on account of the price quoted by HTAS which is lower than the one given by Sud-Chemie or UCIL, one cannot jump to a conclusion that HTAS was dumping their produce in India if their offers did not fructify into contracts.
18. Before imposing anti-dumping duty, Designated Authority has to find out the normal selling price of goods manufactured in India and the landed value of the exporter who is stated to dump the goods in India.
To find out the fair selling price of domestic produce, Designated Authority resorted to their own method of costing. Fair selling price of both petitioners UCIL and PDIL were assessed. PDIL, a public sector undertaking had gone sick way back in 1991 and had gone to BIFR for revival. So the cost of production of such a sick unit has been found to be far greater than the cost of production of UCIL. In finding out the optimum fair selling price, the Designated Authority took an average of the price of UCIL and PDIL. That optimum price is, in fact, much more than the actuals of UCIL. The catalysts manufactured by UCIL when used in domestic fertiliser industry will be deemed as exports and benefits extended to them. The fair selling price now fixed by the Designated Authority does not take these export benefits into account.
Therefore, the fair selling price fixed by the Authority remains high.
19. Designated Authority has found two dumping duties on each of the catalysts depending on the use to which these are put to on import.
This action of the Designated Authority has come under very serious attack by the appellant. Learned Counsel representing UCIL did not try to support this action of the Designated Authority. The argument advanced by the Designated Authority was that depending on the end-use each catalyst was having two different export prices. Consequently, they warranted two anti-dumping duties. We are not able to uphold the action of the Designated Authority. During the relevant period duty rates varied depending upon whether the importer was a fertiliser unit or refinery; while the forther enjoyed total exemption, the latter was subjected to a lower rate of duty than the duty for imports under Chapter 38. Thus, there were three effective rates and not two taken into account by the Authority. The fair selling price and injury margins worked out were incorrect for this reason too.
20. Learned Counsel representing the appellant advanced an argument that in case this Tribunal finds that the Designated Authority went wrong in finding the normal value and the fair selling price of catalysts, the order impugned has to be set aside. According to learned Counsel, this Tribunal has no jurisdiction to remit the matter to the Designated Authority for de novo consideration. Power of remand has to be specifically conferred on the Tribunal. In the absence of such conferment of power, Tribunal has no jurisdiction to remand the matter to the Designated Authority for de novo consideration. In support of this argument, learned Counsel proceeded to say that in case the issue now before us is remanded, the enquiry will relate to the period 1993-94. The appellant has got the right to move for review of the order passed by the Designated Authority and in that case, that authority will consider transactions of recent times. That will be better for the appellant and the parties to these proceedings. They can only have a stale matter reagitated in case of the remand. This legal position was convassed on behalf of the appellant.
21. Powers of this Tribunal are enumerated in Section 129B of the Customs Act, 1962. As per that Section, this Tribunal can pass orders confirming, modifying or annulling the decision impugned before it or may refer the case back to the authority which passed the order impugned before it. While referring the case back to the lower authority, such directions as this Tribunal may think proper for fresh adjudication can also be given. The lower authority can also be directed to take additional evidence, if necessary. Such wide powers of the Tribunal under Section 129B of the Act are not envisaged under Clause (3) of Section 9C of the Customs Tariff Act, 1975. Section 9C(1) states that an appeal against the order of the Designated Authority shall lie to this Tribunal under Section 129 of the Customs Act, 1962.
Clause (3) of that Section limits the jurisdiction of this Tribunal when it enacts : "The Appellate Tribunal may, after giving the parties to the appeal an opportunity of being heard, pass such orders thereon as it thinks fit confirming, modifying or annulling the order appealed against." Apart from the three types of orders mentioned in this clause, namely, confirming, modifying or annulling the order of the appellate authority, no other power that is conferred on this Tribunal under Section 129B is mentioned there. This restricted appellate power conferred on this Tribunal supports the argument that this Tribunal is not to remand the matter to the Designated Authority for fresh adjudication or decision. On account of the nature of the dispute involved and on account of the fact that an early decision on the issues is called for, the legislature in its wisdom took away the power of remand. Questions relating to the international trade have to be decided as expeditiously as possible and it is not to hang on before the Designated Authority and the appellate Tribunal for unduly long periods. Taking into consideration these aspects of the matter, we are inclined to take the view that in anti-dumping matters, this Tribunal is not to remand the issue to the Designated Authority for de novo consideration and decision. Accordingly, we now proceed to consider the merits of the case.
22. We have already recorded that the basis (list price of Sud-Chemie) adopted by the Designated Authority for ascertaining the normal value of the catalysts was erroneous and that normal value should have been based on the cost of production ( duly certified by Price Water House) supplied by the appellants. When the cost of production is taken as the normal value, the position is that two varieties (out of the six) of catalysts had been exported below the normal value. These are Zinc Oxide Desulphurisation Catalyst (ZODS) and Low Temperature Shift Catalyst (LTS). As the other catalysts have been exported above the normal value no dumping exists in their imports and no anti-dumping duty is leviable on their imports. Therefore, the finding of the Designated Authority that there is dumping of these four catalysts is required to be set aside. Consequently, the recommendation for imposing anti-dumping duty on these four catalysts also has to be set aside. We do so.
23. With regard to the two catalysts which have been dumped, the submission made on behalf of the appellant is that the Designated Authority has found, on consideration of relevant data relating to export price and fair selling price of domestic produce, that there is no injury to domestic industry from the import of ZODS catalysts.
Therefore, no interference is called for with this finding. With regard to LTS catalyst, it has been submitted that as the sale was below normal value and as the Designated Authority has determined that injury has been caused to domestic industry, imposition of anti-dumping duty was legally correct. However, the quantum of duty recommended is excess of the dumping margin, which warrants modification of the order. As to the extent of modification, the submission on behalf of the appellant is that the dumping margin works out only to 15% and the anti-dumping duty should not exceed this. As against this quantification, it has been indicated on behalf of the Designated Authority that when the landed cost is taken into account and compared with the fair selling price, injury margin of Rs. 118.00 per litre is obtained as against the injury margin of Rs. 52.61 per litre for import under Chapter 38 determined in the Final Finding Order.
24. Anti-dumping investigation is to determine whether there is dumping and, if so, the quantum of anti-dumping duty that can be imposed taking into account the injury-margin. As noted earlier in this order, the maximum anti-dumping duty permissible is the quantum of dumping.
Therefore, the anti-dumping duty imposed cannot exceed the dumping margin even in cases where the injury margin is more than the dumping margin. LTS catalyst is such a case, when the above injury margin as indicated on behalf of the Designated Authority is taken into account.
We find that the difference between the normal value (cost of production + margin of profit at 5%) and export price in the instant ] is DKK. 4.12 per litre, which worked out to Rs. 22.82 per litre. This amount being the dumping margin, the duty imposed by way of anti-dumping duty could not exceed this amount, even when the injury margin was higher. Accordingly, we hold that duty at the rate of Rs. 22.82 per litre was required to be imposed in respect of imports of Low Temperature Shift Catalyst (LTS) originating in or exported from Denmark.