Full Judgment
2. The brief facts of the case are that the appellants are engaged in the manufacture inter alia, of animal food supplement and Veterinary Drugs for which purpose necessary licence has been obtained under the Drugs Control Act some of the drugs manufactured by the appellants are exported under the Quantity Based Advance Licence (QBAL) Scheme under DEEC Scheme. For the purpose of export of finished products viz. Chloro Hydroxy Quinoline 60% and Halquinol BPC they have imported 8 Hydroxy Quinoline 98% from China on six occasions under seven Bills of entry during the period from 30.12.1996 to 5/1997. The final products were exported between the period 15.11.1996 & 19.6.1997 and the obligations under the QBAL was fulfilled. Show cause notices were however issued by the Assistant Commissioner Proposing to demand anti dumping duty in terms of Notification No. 80/96-Cus dt 16.10.1996 and the Asstt.
Commissioner passed the order confirming the anti-dumping duty under six different orders in original and on appeal before the Commissioner(Appeals), the Commissioner confirmed the duty demanded in respect of six Bills of entry and allowed duty exemption in respect of one imported under Bill of entry No. 10942 dt 30.4.1997 which was made after issue of Notification 41/97, with direction to re-work out the quantum of duty and also to consider the prayer of the party for draw back. The appellants have come in appeal against the order in Appeal on the following grounds: (1) Para 47 of the Exim Policy for 1992-1997 expressly permitted free import of all raw materials, components, consumables, etc. when imported in terms of advance licence.
(2) There is difference between Exim Policy 1992-1997 and 1997-2002 which clearly shows that before 1.4.1997, anti dumping duty cannot be levied on goods which are imported against an advance licence.
(3) A specific exemption notification is not necessary when para 47 of the EXIM Policy grants exemption from all duties on raw materials, components, consumable etc. imported against advance licence. Further, issuance of Notification No. 41/97 was only a ministerial act and even in the absence of a specific Notification anti dumping duty cannot be levied.
(4) The Commissioner (Appeals) erred in distinguishing the Judgment of the HonTDle Supreme Court in the case of UOI v. Suksha Internatinal and so also his reliance in the case of Hemrqj Gordhandas reported in 1978 (2) ELT J 350. The commissioner has also not appreciated the scope of Section 9B of the Customs Act, 1962.
3. Shri Arvind P. Datar, learned Senior Counsel for the appellants while reiterating the grounds of appeal has invited our attention to Notification No. 80/96 and submitted that this Notification has levied anti-dumping duty on 8 Hydroxy Quinoline 98% (8 HQ for short). He has pleaded that vide Notification No. 27/'97 dated 1.4.1997 anti-dumping duty was based on final enquiry and the anti-dumping duty was confirmed on the goods. He has also invited our attention to Notification No.5/2001-Cus dated 22.1.2001 in terms of which the reviewing authority in its meeting in review published in the Gazette of India, Extraordinary, part I, Section I dated 29.11.2000 has come to the conclusion that the goods viz. 8 HQ imported from China has not caused any injury to the domestic industry in India during the period of investigation and the domestic industry has not suffered any material injury from imports of the goods from China. By the said Notification, Notification No.27/97-Cus dated 1st April 77 was also rescinded. He has also submitted that Notification 80/96 has levied anti-duping duty on 8 HQ. He has submitted the EXIM Policy 1992-1997 completely exempted all inputs and makes it clear that all imports will be duty free if imported on the basis of quantity based Advance licence. He has pleaded that the goods imported are meant for manufacture of the final product and they have exported the final product and have followed the input-out ratio and no domestic sales have been effected and hence no injury has been caused to the domestic industry. He has also pleaded that paras 47 8b 48 of the Chapter VII dealing with Duty Exemption Scheme become redundant if exemption of duty is not allowed to the importation in question. He has also invited our attention to the Judgment in the following cases: (1) Hon"ble High Court of Calcutta in the matter of Suttons & Sons (India) Put. Ltd. v. 17OI wherein it was held that in case of inconsistency between two statutory notifications, they should be harmoniously construed.
(2) AIR 1958 SC 255, in the case of Venkataramana Devaru and Ors. v. State of Mysore regarding rule of harmonious construction when there are two provisions in one enactment.
(3) UOI v. Suksha International 8t Nutan Oems and Anr. wherein it was held that interpretation unduly restricting the scope of beneficial provision to be avoided so that it may not take away with one hand what the policy gives the other.
While concluding the argument the earned Counsel has pleaded that no anti dumping duty is to be levied in the instant case and he prayed for setting aside the impugned order and allowing the appeal.
4. Shri VTK Nayanar, learned JCDR on the other hand defended the impugned order. He has invited our attention to Section 9A (2), (4) and (5) of the Customs Tariff Act, 1975 by which the Central Govt. has been empowered to impose anti-dumping duty not exceeding the margin of dumping in relation to such article, by Notification in the official Gazette. He has also invited our attention to para 13 of the Customs Tariff (Identification, Assessment and collection of anti dumping duty on dumped articles and for determination of injury), Rules 1995 and submitted that para 13 of the said Rules should be read in conjunction with Section 9A(2). He has further invited our attention to Notification No. 41/97 dated 30.4.1997 by which anti-dumping duty has been exempted. Since this Notification has come into force with effect from 30.4.1997, importation involved prior to issue of this Notification shall have to be dealt with in accordance with the provisions of the Act and the rules as applicable at the material time.
He has further submitted that in terms of Notification No. 5/2001 dated 22.1.2001, which rescinded Notification No. 27/97, it is clearly stated that "except as respects things done or omitted to be done before such rescission". He has submitted that my this Notification is not clarificatory in nature. He has also pleaded that para 47 of the EXIM Policy is not covered by any Notification. He has further invited our attention to the Judgment of the Hon"ble High Court of Judicature at Madras in the case of South India Surgical Co. Ltd. v. Asst Collector of Customs, Madras-II wherein it is held that while EXIM Policy gives DGFT a final say as to the licence and the item for which the licence is granted, the same is not binding on the Customs department in the matter of classification of goods for assessment of duty.
5. We have carefully considered the rival submissions and gone through the case records and the various Notifications noted above and also the provisions of the Policy as well as Section 9A of the Customs Tariff Act. We observe that in the instant case, the importation was made during the period between 31.12.1996 and 25.2.1997 and are therefore covered by the EXIM Policy for the year 1992-1997. The earned Counsel for the appellants heavily relied upon para 47 & 48 under heading "Duty Exemption Scheme" under chapter VIII of the Import Policy in question.
No doubt para 48 clearly states that import against advance licence will be duty free. In the instant case, the question posed before us is anti-dumping has been rightly levied in respect of the input/raw material viz. 8. Hydroxy quinoline 98% (98 - HQ for short) imported by the appellants for manufacture of the final product viz. Animal Feed and Veterinary drugs. By Notification No. 80/96 dated 16.10.1996, the Central Govt. has levied anti-dumping duty on 8 HQ. Levy of duty on 8 HQ was confirmed based on final enquiry by the Central Govt. by issue of Notification No. 27/97 dated 1.4.1997. This Notification was issued on the final finding arrived at by the Central Govt. that: (a) 8 HQ originating in or exported from the Peoples Republic of China has been exported to India below its normal value; (c) the injury has been caused to the domestic industry by the exports originating from or exported from People's Republic of China.
However, by Notification No. 41/97 dated 30.4.1997, exemption was granted from levy of anti-dumping duty subject to the condition that exempt article shall not be disposed of or utilized in any manner except for utilization in discharge of export obligation or for replenishment of article so utilized and the article so replenished shall not be sold or transferred to any other person. So far as the appellants are concerned, they have fulfilled the export obligations.
Notification 27/97 dt. 1.4.1997 which provided for levy of duty on the subject goods on certain conditions as noted above was however, rescinded by the Central Govt. with effect from 22.1.2001 by Notification 5/2001 dated 22.1.2001 which has a saving clause which states "except as respects things done or omitted to be done before such rescission". Therefore, in effect, anti-dumping duty was liable to be levied in respect of all the importation made up to and for 29.4.1997 as the exemption was granted with effect from 30.4.1997. In the case of the appellants, all six importation made were before 30.4.1997 and hence their importation are liable to levy of such duty.
However, in respect of one importation made vide Bill of Entry No.10942 dated 30.4.1997 since the goods were cleared in May 1997, the lower appellate authority has granted the benefit on the strength of Notification No. 41/97. We observe that the thrust of the argument of the earned Counsel for the appellants is that in terms of paras 47 & 48 of the EXIM Policy for the relevant year, duty free import is allowed against advance licence and the appellants have fulfilled the export obligations and hence anti-dumping duty cannot be levied in their case and that paras 47 & 48 of the EXIM policy becomes redundant if duty is demanded. Examining this plea, we note that as rightly pleaded by the learned JDR for the Revenue, in terms of Section 9A of the Customs Tariff Act, 1975, The Central Govt. was empowered to impose anti dumping duty and which duty shall be in addition to any other duty imposed under the said Act. Rule 13 of the Customs Tariff (Identification, Assessment and Collection of Anti-dumping Duty on dumped articles and for determination of injury) Rules, 1995, issued by the Central Govt. in exercise of the powers conferred by Sub-section (6) of Section 9A and Sub-section 9B of the said Act, provided for imposition of levy of provisional anti-dumping duty based on the preliminary findings. It would therefore, be seen this the Central Govt. has the mandate for imposition of anti-dumping duty based on preliminary findings and it was backed by this mandate based on inquiry, that it had issued Notification No. 27/97 dated 1.4.1997 and this Notification was rescinded with effect from 22. 1.1001 with a clause to the effect that "except as respect things done or omitted to be done before such rescission". Therefore, imposition of anti-dumping duty on the goods imported by the appellants for the period from 31.12.1996 to 25.2.1997 covered by the six bills of entry is in order.
The earned Counsel has cited various decisions as noted above in support of his plea regarding need for harmonious construction when there is inconsistency between two statutory notifications. We observe that the case laws cited by the earned Counsel do not come to his rescue as the issues involved in those cases and in the present case are not similar. In the case of Suttons & Sons (India) Put. Ltd. (supra), notifications were issued by two different Ministries whereas in the case before us there is no such situation arose. In the case of AIR 1958 SC 255 (supra) the Hon"ble Apex Court while interpreting the various Articles of the Constitution of India in a matter relating to Temple Entry, has held that when there are two provisions in an enactment, which cannot be reconciled with each other, a harmonious construction should be resorted to This Judgment has no application to the case at hand as that Judgment was in the context of Temple entry.
In the case of UOI v. Suksha International (supra), the Hon"ble Supreme Court had held that interpretation unduly restricting the scope of a beneficial provision to be avoided so that it may not take away with one what the policy gives with other. In that case, the HonTale Apex Court was dealing with a situation where the taxing authority wanted to unduly restrict the scope of the beneficial provisions and it was in those circumstances that the HonTale Apex court has held so. In the case before us, none of those situations has arisen.
6. We find from the records that the Central Govt. had received written petition from M/s West Bengal Pharmaceutical & Phytochemical Development Corporation Ltd, Calcutta, on behalf of the domestic industry, alleging dumping of 8-HQ originating from the People's Republic of China and the Govt. acted upon the petition and sent out questionnaire to various importers including the appellants herein and it was after receipt of reply from the appellants herein (no other addressee responded) and after conducting preliminary enquiry as indicated in the Gazette of India, Extraordinary, dated 6th September 96, that the Central Govt. came to a conclusion that the importation will affect the domestic industry, and hence it took a conscious decision that in order to ensure that the domestic industry does not suffer when importation is made into the country, antidumping duty should be levied and accordingly, it issued Notification imposing anti dumping duty by issue of specific Notification which is backed by Section 9A of the Customs Tariff Act, 1975 and the rules made there under. When it was found on further enquiry that the imposition of such duty was no longer required, it allowed duty free import with certain conditions as noted above. EXIM Policy is a general policy issued by the Govt. and in terms of para 48, import against advance licence is permitted without payment of basic Customs duty only and not anti-dumping duty. The said para 48 is reproduced below for convenience of reference.
Advance Licence 48. An Advance Licence is granted for the import of inputs without payment of basic customs duty.Such licence shall be issued in accordance with the polic and procedure in force on the date of issue of the licence and shall be subject to the fulfilment of a time-bound export obligation and value addition as may be specified. Advance Licences may be either value based or quantity based.
Licences issued under the Duty Exemption Scheme shall be regulated in freely convertible currency. The FOB value of exports and CIF value of imports in the lice nces shall be specified in freely convertible currenc y. The CIF value shall also be specified in bracket in Indian Rupees at the exchange rate on the date of issue of the licence.
However, in the case of Advance Intermediate Licence and Special Imprest Licence where the payment for the goods supplied is to be received in Indian Rupees,the FOB value shall be specified in Indian Rupees and the CIF value of imports shall be specified in freely con vertible currency of these licences.
Para 47 of the EXIM Policy talks about importation of raw materials etc. required for product to be exported duty free subject to payment of additional customs duty equal to excise duty at the time of import.
Therefore, in terms of the Policy also what is exempted is only the basic Customs duty. The contention of the earned Counsel for the appellants is that imposing anti-dumping duty makes paras 47 & 48 of the EXIM policy redundant and that the provision relating to its imposition is in conflict with the provisions of the EXIM Policy for 1st April 1992--31st March 1997. We note that the larger Bench of the Tribunal in the case of Caprihans India Ltd. v. CC, Bombay has clearly held that Anti-dumping duty levied under Section 9A of the Customs Tariff Act, cannot be considered as duty realised under the Customs Act, 1962. Para 7 of the Judgment of the Larger Bench is reproduced below.
7. Learned Departmental Representative vehemently tried to support the stand taken by the adjudicating officers. According to him refund claims filed after the expiry of six months from the date of deposit of the duty are barred by limitation. In support of this argument he was trying to rely on the provisions contained in Section 27 of the Customs Act. Section 27 deals with claim for refund of duty. Duty mentioned in that section can only be the duty as defined in Section 2(15) of the Customs Act. Section 2(15) defines 'duty' as a duty of customs leviable under this Act, namely, Customs Act, 1962. Anti-Dumping duty levied under Section 9A of Customs Tariff Act cannot be considered as duty realised under Customs Act, 1962. Special provisions have been made under Section 9A for the imposition of duty known as Anti-Dumping Duty.
Section 9A(2) contemplates higher provisional duty being reduced on final fixation and refund becoming payable in such contingency. That specific provision contained in Section 9A(2) is not at all varied or changed by the provisions contained in Section 27 of the customs Act. A special provision contained in Section 9A regarding levy, collection and especial provision contained in Section 9A regarding levy, collection and refunds of anti-dumping duty depending on the change in the provisional and final imposition of duty do not fall within the purview of the provisions contained in Section 27 of the Customs Act contrary views taken by the authorities below are clearly illegal and untenable. In view of the above, we do not find any conflicting provisions involved while imposing anti-dumping duty inasmuch as anti-dumping duty has been levied under the special provisions contained in Section 9A(2) of the Customs Tariff Act, 1975 which is a separate enactment and the two enactment deal with separate nature of duties. In view of the above, the plea of the learned Sr. Counsel that imposing anti-dumping duty on the goods makes paras 47 & 48 of the EXIM policy redundant, has no force. We also note that in the case of one Bill of entry No. 10942 dated 30.4.1997 the lower appellate authority has allowed the benefit since the appellants had cleared the goods in May 1997 by which time the Exemption Notification No. 41/97 has come into force. In view of our discussion and findings as above, we are of the considered opinion that the lower appellate authority has passed a well reasoned order and the order needs to be sustained and no interference is called for at our hands. We, therefore, uphold the same. The appeals fail and are dismissed accordingly. Sd/- Sd/-(Jeet Ram Kait) (S.L. Peeran) Member (T) Member (J) 7. I have gone through the order of my learned brother but I am not in a position to agree with the same. Hence this separate order.
8. The facts and details of arguments of the case are already noted in the order proposed by my learned brother. In terms of the provisions of Anti-dumping duty Act, the duty was proposed by Notification No.27/97-Cus. dated 1.4.1997 which was later rescinded and once the notification was rescinded, the effect is that duty already collected under the Anti-dumping duty Act does not survive and therefore the question of not refunding the same does not arise. The method of levy of Antidumping duty is that initially, the department issues notification proposing imposition of anti-dumping duty after due enquiry in terms of Rule 4 of the Designated Authority. The proposed duty is either confirmed or it is withdrawn in terms of Customs Tariff (Identification, Assessment and Collection of Anti-dumping Duty on Dumped articles and for Determination of Injury) issued under Sub-section (6) of Section 9A and Sub-section (2) of Section 9B of the Customs Tariff Act, 1975. In the present case, the authority was duly satisfied that the anti-dumping duty is not required to be imposed and hence the same was withdrawn by a notification No. 5/2001-Cus dated 22.1.2001. Once this notification has been issued and earlier notification proposing anti-dumping duty has been withdrawn, therefore, question of imposing or collecting antidumping duty till the date of this notification does not survive and hence the appellant's contention is required to be accepted by allowing the appeals. The impugned order is not legal and proper and for that reason same is set aside by allowing the appeals. Ordered accordingly.
Sd/- Sd/- (Jeet Ram Kait) (S.L. Peeran) Member (T) Member (J) 9. In view of points of difference arisen in the matter between Members, the following question is referred to Third Member for determining the same: Whether the appeals are required to be dismissed as held by Member (Technical) for the reasons given in his order".
Whether the appeals are required to be allowed as held by Member (Judicial) for the reasons given in his order".
Sd/- Sd/- (Jeet Ram Kait) (S.L. Peeran) Member (T) Member (J) 10. I have heard the above difference of opinion at Madras on 11.2.2004. At the request of the earned Counsel for the appellant, the matter was adjourned to 5.3.2004 for further hearing at Delhi. By a letter dated 2.3.2004, earned Counsel for the appellant sought adjournment of the case to 19th March 2004. The request for adjournment was also mentioned on 5.3.2004 by the Counsel Shri V. Swaminathan. He was informed that further adjournment was not convenient and the appellant's Counsel may file written submissions before 11.3.2004.
Pursuant to this written submissions dated 11.3.2004 have been received by fax.
11. The reference made to the third Member is whether the appeals are required to be dismissed or allowed for the reasons mentioned in the separate orders recorded by the Members who constituted the Division Bench. During the hearing on 11.2.2004, learned Senior Counsel representing the appellant pointed out that the learned Member (Judicial) had considered only one of the issue raised, apparently because he felt that a decision on that issue would be sufficient to dispose of the appeal. It was also mentioned that a Restoration of mistake application had been filed at Chennai on the issue of non consideration of other points and that application is pending.
12. The view taken by the learned Judicial Member is that consequent to the withdrawl of Anti Dumping duty through Notification No. 5/2001-Cus dated 22.1.201 "question of imposing or collecting Anti Dumping duty till the date of this notification does not survive and hence the appellant's contention is required to be accepted by allowing the appeals". This view does not appear to be legally correct, inasmuch as Notification No. 5/2001-Cus dated 22.1.2001 was issued upon review of duty imposed based on a final findings. Rule 21 of Customs Tariff (Identification Assessment and Collection of Anti Dumping Duty on Dumped Articles and for Determination of Injury) Rule 1995 makes this position clear. Sub-rule 3 of Rule 21 states that "if the provisional duty imposed by the Central Government is withdrawn in accordance with the provisions of the Sub-Rule (4) of Rule 18, the provisional duty already imposed and collected, if any, shall be refunded to the importer". The position is different when (upon a review) a final duty is withdrawn. This is made clear by Sub-section (5) of Section 9A of Customs Tariff (Amendment) Act 1995 which reads as under: (5) The anti-dumping duty imposed under this section shall, unless revoked earlier, cease to have effect on the expiry of five years from the date of such imposition.
Provided that if the Central Government, in a review, is of the opinion that the cessation of such duty is likely to lead to continuation or recurrence of dumping and injury, it may, from time to time, extend the period of such imposition for a further period of five years and such further period shall commence from the date of order of such extension: Provided further that where a review initiated before the expiry of the aforesaid period of five years has not come to a conclusion before such expiry, the anti-dumping the outcome of such a review for a further period not exceeding one years.
13. In the present case provisional duty was levied under Notification No. 80/96-Cus dated 16.10.1996 on the subject goods. Subsequently notification No. 27/97 dated 1.4.1997 confirmed the duty based on final findings. Therefore, the period of validity of that notification is covered by Sub-section 5. In this legal position, I am of the opinion that the view taken by learned Member (Judicial) about the effect of Notification No. 5/2001-Cus dated 21.1.2001 is not legally correct. The withdrawal of the Anti Dumping duty w.e.fi 22.1.2001 in no way affected the levy and collection of Anti Dumping duty under Notification No.27/97 dated 1.4.1997 Similarly, any duty not or short recovered during the validity of that notification shall also be recoverable.
14. During the hearing before me and in the written submissions, the earned Counsel for the appellants has stressed that the appeal cannot be disposed of without considering the other points raised by the appellants, like imports under Advance Licence (for export production) being exempt from duty and the case being revenue neutral Inasmuch as the appellant would be entitled to drawback of Anti Dumping duty. The appellant has already filed an ROM application on this issue. That ROM application is for the consideration of the Bench that passed the order. Therefore, I am not going into these additional points, even though the written submissions point out that this Tribunal has taken a view in the case of Vineet Electrical Industries Pvt. Ltd. v. CCE & C, BBSR-I reported in 2001 (136) ELT 784 that new points can be raised in a reference before third Member and that Member can consider them also.
I, however, do not consider that the present case is covered by that decision, inasmuch as all these points which has not been considered by the learned Member (Judicial) had been raised before the Division Bench and to that extent these are not new points raised before the third Member.
15. Having recorded my findings as above, on the point referred to the third Member, I return the appeals back to the Division Bench.
In terms of the Third Member's opinion, the appeal is disposed off in terms of para 13 of the Order, as follows: In the present case, the provisional duty was levied under notification No. 80/96-Cus dated 16.10.1996 on the subject goods.
Subsequently, Notification No. 27/97 dated 1.4.1997 confirmed the duty based on final findings. Therefore, the period of validity of the Notification is covered by Sub-section 5. In view of this legal position, the opinion taken by Member(Judicial) about the effect of Notification No. 5/2001-Cus dated 21.1.2001 is not legally correct.
The withdrawal of the Anti Dumping duty w.e.f. 22.1.2001 in no way affected the levy and collection of Anti Dumping duty under Notification No. 27/97 dated 1.4.1997. Similarly, any duty not or short recovered during the validity of that notification shall also be recoverable.
Sd/- Sd/- (Jeet Ram Kait) (S.L. Peeran)