Nirma Limited Vs Saint Gobain Glass India Limited and ors - Citation 926927 - Court Judgment

Judgment:

P.JYOTHIMANI,J.

1. While W.A.Nos.193, 194, 189, 195 and 307 of 2012 arise from the order of the learned Judge dated 23.12.2011 in W.P.No.23515 of 2011 filed by the first respondent in W.A.Nos.193, 194, 195 of 2012 and 189 of 2012, who is the appellant in W.A.No.307 of 2012, namely Saint Gobain Glass India Limited, Sriperambathur, W.A.No.337 of 2012 arises from the order of the learned Judge dated 1.12.2011 in W.P.No.4602 of 2011 filed by the Saint Gobain Glass India Limited, Sriperambathur.

2.1. The facts leading to the filing of these appeals are as follows. The said writ petitioner has challenged a notification dated 2.9.2011 issued by the Directorate General of Anti-Dumping and Allied Duties, New Delhi, who has been arrayed as third respondent in W.A.Nos.193, 194 and 189 of 2012, second respondent in W.A.Nos.307 and 337 of 2012 and has filed W.A.No.195 of 2012.

2.2. Under the notification which was originally challenged, the appellant in W.A.No.195 of 2012, namely the Directorate General of Anti-Dumping and Allied Duties, New Delhi the Designated Authority, has given a preliminary finding in respect of investigation regarding the import of Soda Ash originating in or exported from China PR, European Union, Kenya, Iran, Pakistan, Ukraine and USA. The said notification was issued based on the Customs Tariff Act, 1975 (for brevity, "the Act") and the Customs Tariff (Identification, Assessment and Collection of Anti-Dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995 (for brevity, "the Rules").

2.3. The Designated Authority has considered the application of Alkali Manufacturers Association of India (for 5th respondent in W.As.193 and 194 of 2012, Appellant in W.A.189 of 2012, and 4th respondent in W.As.195, 307 and 337 of 2012). The said association has made application on behalf of the domestic industry alleging dumping of Soda Ash from the countries as stated above. The Designated Authority thereafter issued a public notice to all the known exporters, apart form notifying the embassy of the subject countries in India; sent questionnaires to elicit relevant information from various known exporters, including GHCL Limited appellant in W.A.No.194 of 2012, who filed the said appeal on obtaining leave of this Court, apart from various known importers and users of the subject goods in India, in accordance with Rule 6(4) of the Rules, which includes Saint Gobain Glass India Limited, the appellant in W.A.No.307 of 2012.

2.4. Under the original impugned order challenged in W.P.No.23515 of of 2011, which is a preliminary finding given by the Designated Authority, the issue considered was in respect of the material, namely Disodium Carbonate, commonly known as Soda Ash, produced through synthetic route and natural route and in two forms Light Soda Ash and Dense Soda Ash. Earlier the issue was examined by the Designated Authority and the investigation was concluded against China.

2.5. The Designated Authority examined the fact that Soda Ash is an essential ingredient in the manufacture of detergents, soaps, cleaning compounds, sodium based chemicals, float glass, container and specialty glasses, silicates and other industrial chemicals; and is widely used in textiles, paper, metallurgical industries and desalination plants and the said Soda Ash is classified under Chapter 28 of the Act under subheading No.2836.20. According to the domestic industry, light and dense Soda Ash are one product. That apart, it was claimed that natural and synthetic Soda Ash is also one product. However, there was a contra argument by some other parties.

2.6. While referring to the term "like article" under Rule 2(d) of the Rules, the claim of the applicant - Alkali Manufacturers Association of India was that there was no difference in the subject goods produced by the domestic industry and that imported from the subject countries. Certain interested parties have questioned the competency and standing of the applicant, who has made the representation to the Designated Authority. Therefore, a jurisdictional issue was also raised regarding the eligibility of the applicant companies to be treated as "domestic industry", with reference to an order passed by the Delhi High Court, wherein the Delhi High Court has held that the Authority concerned would also decide about the jurisdictional issue within a stipulated time. The Designated Authority has also relied upon another interim order passed by this Court on 29.4.2011, wherein this Court while modifying its earlier order dated 25.2.2011, has directed the Designated Authority to proceed with the investigation and pass orders on the jurisdictional aspects separately.

2.7. It was pursuant to the same, the Designated Authority has conducted an enquiry and heard the submissions made by the interested parties and also the domestic industry. Number of interested parties have also contested before the Designated Authority the standing of the applicant to file such application. The Designated Authority while considering as to whether the applicant companies have constituted "domestic industry" within the meaning of the Rules, has also taken note of Rule 5(3) of the Rules which states that the Designated Authority shall not initiate investigation pursuant to an application unless it determines on the basis of an examination of the degree of support for, or opposition to the application expressed by domestic producers of the like product, that the application has been made by or on behalf of the domestic industry; and further provides that there shall not be any investigation initiated by the Designated Authority if the domestic producers expressly supporting the application account for less than 25% of the total production of the like article by the domestic industry; and that while examining the Designated Authority has to be satisfied that there is evidence regarding (i) dumping, (ii) injury, where applicable, (iii) where applicable, a casual link between such dumped imports and alleged injury, to justify the initiation of an investigation.

2.8. The Designated Authority has also taken note under the impugned preliminary finding that investigation can be initiated only when it is established that the application has been filed by or on behalf of domestic industry. It has also taken note of the fact that no investigation can be initiated if the domestic producers expressly supporting the application account for less than 25% of the total production of the like article by the domestic industry. It also took note of the Rule that the application shall be deemed to have been made by or on behalf of the domestic industry, if it is supported by those domestic producers whose collective output constitute more than 50% of the total production of the like article produced by that portion of the domestic industry expressing either support for or opposition, as the case may be, to the application. The Designated Authority noted that 25% and 50% conditions are required to be applied on production of the domestic industry as a whole and there has been a clear distinction between "domestic producer" and "domestic industry".

2.9. It was in that regard the Designated Authority has taken note of the term "domestic industry" defined under Rule 2(b) of the Rules, which stood prior to 15.7.1999, wherein while defining domestic industry it meant as domestic producers as a whole engaged in the manufacture of the like article and any activity connected therewith and the domestic industry shall deem to include such producers who are related to the exporters or importers of the alleged dumped articles, without discretion to the Designated Authority. Thereafter, there was an amendment by giving discretion to the Designated Authority regarding the inclusion of the producers who are related to the exporters or importers of the alleged dumped articles. The Designated Authority under the impugned notification has also taken note of the latest amendment brought to the term "domestic industry" in the year 2009, wherein while defining "domestic industry" when discretion has been retained in respect of the rest of the producers, the word "only" was used.

2.10. The Designated Authority, while construing the changes which have taken place under the impugned notification, has taken note of the situation that some domestic producers may not support an anti-dumping application because they themselves are importing the product, or they are related to an importer or exporter of the product and such conduct would result in eliminating competition through unfair practice of dumping and, therefore, vesting of such discretion with the Designated Authority could exclude such related entities, who may seek to thwart an attempt by the remaining domestic producers to seek redressal of injury caused to them on account of dumping by filing an anti-dumping application and seeking suitable relief.

2.11. It was taking note of every facet of the issue, under the original impugned notification, the Designated Authority by discussing the various parameters relating to the domestic industry in respect of the production, capacity and capacity utilization of the domestic industry; sales of domestic industry; profitability; inventories; employment and wages, productivity; magnitude of dumping; growth; and ability to raise funds, has concluded provisionally that the dumped imports of the subject goods from the subject countries have increased in absolute terms as also in relation to production and consumption of the subject goods in India. It was also found that the imports of the subject goods from subject countries are significantly undercutting the prices of domestic industry and such imports are causing significant price suppression. It was also found that the performance of the domestic industry has deteriorated in terms of capacity utilization, profit, cash flow, return on investment and inventories, which is significant and material and, therefore, concluded that the domestic industry has suffered material injury.

2.12. After calculating the magnitude of injury and injury margin, it was concluded that the subject goods have entered the Indian market from the subject countries below associated normal values, resulting in dumping of the subject goods; that dumping margins of the subject goods imported from the each of the subject countries are above de-minimis; that domestic industry has suffered material injury in respect of the subject goods; and that the material injury to the domestic industry has been caused due to dumped imports of the subject goods from the subject countries. Therefore, the Designated Authority under the impugned order was of the view that imposition of provisional anti-dumping duty is required to offset dumping and injury, pending completion of the investigation. Thus, under the original impugned order, the further investigation was directed based on the preliminary findings.

3.1. It was the said impugned order which was challenged by the appellant in W.A.No.307 of 2012 M/s.Saint Gobain Glass India Limited, who is the manufacturer of architectural and automotive glass, which requires Soda Ash as one of the inputs, being imported by them. The said notification was challenged on the assumption that anti-dumping duties are likely to be recommended by the Designated Authority and the clearance of goods will be possible only after complying with such direction regarding the payment of anti-dumping duties on Soda Ash.

3.2. The case of the writ petitioner was that Alkali Manufacturers Association of India (For 5th respondent in W.As.193 and 194 of 2012, Appellant in W.A.189 of 2012, and 4th respondent in W.As.195, 307 and 337 of 2012) has filed an application for and on behalf of M/s.GHCL Limited, M/s.DCW, M/s.Nirma and M/s.Saurashtra Chemicals Limited (SCL), who are all producers of Soda Ash in India, seeking initiation of anti-dumping investigation on import of Soda Ash by the writ petitioner.

3.3. It was also the case of the writ petitioner that Nirma Limited has itself imported alleged dumped article from U.S.A. and is related to a supplier in U.S.A; that SCL is related to an importer of alleged dumped article, namely Nirma Limited; GHCL is related to exporter of alleged dumped article from Romania; Tata Chemicals has related producers in Kenya, U.S. and Europe; and DCW Limited accounting for 4.28% of total domestic production is neither related nor importer of the alleged dumped article.

3.4. The case of the writ petitioner was that while construing the term "domestic industry", the proper meaning of Rule 2(b) of the Rules has not been considered by the Designated Authority and according to the writ petitioner, by virtue of the latest amendment the discretion of the Designated Authority has been taken away. It was the case of the writ petitioner that the Designated Authority has proceeded with a pre-determined mind; that no adequate opportunity has been given before passing the notification, which is against the proper data; that Alkali Manufacturers Association of India could not have been treated as a domestic industry in view of the amendment brought in to Rule 2(b) of the Rules dated 27.2.2010, by which discretion has been taken away; that the Designated Authority has erred in treating Nirma Limited, SCL and GHCL as eligible domestic industry; that in the application filed by Alkali Manufacturers Association of India, three (SCL, Nirma Limited and GHCL) out of the four producers (SCL, Nirma Limited, DCW and GHCL) are related to the exporters, importers or are self-importers and, therefore, SCL, Nirma Limited and GHCL could not have been construed as domestic industry in terms of the amendment to Rule 2(b) of the Rules and only rest of the producers, namely DCW, could form part of domestic industry provided it accounted for a major proportion of the total domestic production. Therefore, according to the writ petitioner, the Designated Authority has acted unreasonably and arbitrarily.

4.1. The said writ petition was contested by Alkali Manufacturers Association of India to the effect that the writ petition is premature, since the impugned notification is only a preliminary recommendation and there is no determination made so far by the Government of India; that the Designated Authority before coming to the preliminary conclusion has given sufficient opportunity to all the interested parties and in fact written submissions have been made; that such recommendation has to be considered by the Central Government and the affected parties can always raise their objections before the Government, which alone can impose the duty; and that under Section 9C of the Act, an appeal lies to the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) against the final levy of duty.

4.2. It was the case of Alkali Manufacturers Association of India that when the preliminary investigation has shown that material injury to the domestic industry has been caused due to dumped imports of the subject goods from the subject countries, any delay in imposition of duties will defeat the very purpose of preliminary investigation; that even after the interim duties are imposed eventually if the Designated Authority comes to a conclusion that the duties are not liable to be imposed, the writ petitioner is entitled to refund as per the express provisions of the Act; and that the finding of the preliminary investigation is not binding on the Government and is only preliminary in nature and, therefore, the writ petition is not maintainable.

4.3. Insofar as it relates to the term "domestic industry" as defined under Rule 2(b) of the Rules, the source for such definition is WTO Agreement on Anti-Dumping, to which India was a party and it was in accordance with the term used in the WTO Agreement, the definition has been made. The 2010 amendment was brought in with the sole intention to align the Indian Law with the WTO provisions, as explained in the explanatory notes to the notification dated 27.2.2010.

5. The learned Judge, in the impugned judgment, has rejected the reasoning of the Designated Authority in treating M/s.GHCL, M/s.Nirma Limited and M/s.SCL as having minimum import, so as to bring them within the definition of "domestic industry". It was also held by the learned Judge that the percentage of export by the associates of M/s.GHCL has no relevance in the matter of considering the scope of Rule 2(b) of the Rules and so also the import by M/s.Nirma Limited for its own captive consumption, or for that matter, its related exporter having a minimum export. On the construction of Rule 5(3) proviso read with Rule 2(b) of the Rules, it was held by the learned Judge that M/s.DCW Limited is the only "domestic producer", thus qualifying the proviso to invest the Designated Authority with all the required jurisdiction to proceed further in the matter. Thus, in effect, the learned Judge while accepting the contention of the petitioner on the interpretation of Rule 2(b) of the Rules, held that there is no discretion with the Designated Authority to bring in an excluded category within the meaning of "domestic industry", but agreed with the notification based on the definition that M/s.DCW Limited is a domestic industry and it fully satisfies the requirement of Rule 5(3)(a) proviso on its production of 4% constituting it as 100%, and consequently rejected the writ petition in that regard.

6. Ergo, the appellant in W.A.No.193 of 2012 M/s.Nirma Limited, on leave from this Court has filed the appeal on the ground that it is virtually prevented from participating in the investigation due to the finding given by the learned Judge on the construction of the word "domestic industry" under Rule 2(b) of the Rules by taking away the discretion of the Designated Authority, resulting in the impediment caused to the said appellant in not bringing forth its grievance.

7. Likewise, M/s.GHCL, which was also found to have minimum import and therefore cannot be brought within the definition of the word "domestic industry" as per the impugned order of the learned Judge, has filed W.A.No.194 of 2012 on leave from this Court.

8. M/s.Alkali Manufacturers Association of India, which has given representation on behalf of all the four companies, namely M/s.GHCL, M/s.Nirma Limited, M/s.SCL and M/s.DCW Limited, has also filed W.A.No.189 of 2012 in respect of the finding given by the learned Judge under the impugned order regarding the term "domestic industry" by taking away the discretion of the Designated Authority.

9. The Designated Authority has also filed W.A.No.195 of 2012 on the ground that the word "domestic industry" under Rule 2(b) of the Rules has to be read in accordance with the WTO Agreement as well as GATT, being its main source, and therefore, the finding of the learned Judge that M/s.GHCL, M/s.Nirma Limited and M/s.SCL have minimum imports and hence are not eligible to be treated as a domestic industry cannot be accepted and the discretion of the Designated Authority is totally taken away, which is against the very idea of the said Rule.

10. Similarly, the writ petitioner has filed W.A.No.307 of 2012 challenging the portion of the impugned order of the learned Judge whereby the learned Judge even though has found that M/s.DCW Limited, which forms part of Alkali Manufacturers Association of India, has the production capacity of 4%, has held that it is deemed to have constituted 100% by construing Rule 5(3) proviso along with the definition of "domestic industry" under Rule 2(b) of the Rules and therefore M/s.DCW Limited constitutes the domestic industry and the Designated Authority has jurisdiction to proceed further, contending inter alia that when once it is found that the production of M/s.DCW Limited is only 4%, there is no reason to come to a conclusion that it constitutes 100%; that while it was correctly found by the learned Judge on the construction of Rule 2(b) of the Rules regarding domestic industry, it is unwarranted to refer to Rule 5(3)(a) proviso along with the definition Rule for the purpose of conferring jurisdiction on the Designated Authority, apart from many other grounds.

11. Likewise, the said writ petitioner, who has earlier filed W.P.No.4602 of 2011 against a notification dated 20.8.2010 by the Designated Authority, which writ petition came to be closed by the learned Judge under the impugned order dated 1.12.2011 on the ground that a subsequent preliminary finding has been given by the Designated Authority on 2.9.2011, which is the subject matter of W.P.No.23515 of 2011, has also filed W.A.No.337 of 2012.

12.1. Assailing the order of the learned Judge insofar as it relates to the construction of the word "domestic industry" by holding that the Designated Authority has no discretionary power, Mr.Krishnan Venugopal, learned Senior Counsel appearing for the appellant in W.A.No.193 of 2012 - M/s.Nirma Limited, Gujarat, has submitted that the regulation itself is in terms of the WTO Agreement and, therefore, the construction shall be in accordance with the understandings in the WTO Agreement, which is the actual source of the anti-dumping regulation.

12.2. By referring to the Act, particularly Section 9A of the Act which enables the Central Government by notification to impose anti-dumping duty on dumped articles, he would submit that an appeal lies against such order of the Central Government to the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) under Section 9C of the Act and, therefore, the writ petition filed by M/s.Saint Gobain Glass India Limited against the preliminary finding is not maintainable.

12.3. While referring to the definition of the word "domestic industry" under Rule 2(b) of the Rules which underwent various amendments by using the word "only" at the end, which was the reason for the learned Judge to come to a conclusion that by such word a restriction on the discretion of the Designated Authority has been imposed, and the subsequent deletion of the said word "only" itself on 1.12.2011, it is his submission that the intention has been consistently to give discretion to the Designated Authority.

12.4. He would also submit that as per the Rules framed in accordance with Section 9A and 9B of the Act, Rule 4 of the Rules while contemplating the duty of the Designated Authority, has only directed the Designated Authority to submit his findings, provisional or otherwise to the Central Government or to recommend the Central Government about the amount of anti-dumping duty and even for initiation of investigation by the Designated Authority, as contemplated under Rule 5(2) of the Rules, the application filed shall be supported by evidence regarding dumping, injury and casual link between the dumped imports and alleged injury. The Rules also contemplate a suo motu power on the part of the Designated Authority when it obtains sufficient evidence from any other source by way of information to initiate investigation. It is under Rule 12 of the Rules, the Designated Authority after conducting enquiry and on determining the injury, has to record the preliminary finding regarding the export price, normal value and margin of dumping and it shall also record a further finding regarding injury to the domestic industry with detailed information and it is thereafter under Rule 13 of the Rules, the Central Government imposes provisional duty. That is followed by a final finding to be submitted by the Designated Authority under Rule 17 of the Rules recommending the amount of duty which, if levied, would remove the injury where applicable to the domestic enquiry and the final levy has been made by the Central Government again under Rule 18 of the Rules and the levy of final duty by the Central Government, according to the learned Senior Counsel, is a legislative function which shall be effected within three months from the date of the final finding given by the Designated Authority under Rule 17 of the Rules.

12.5. It is his submission that the definition of the word "domestic industry" has to be construed in accordance with the object of the regulation. There is no provision under the Rules preventing the domestic industry from complaining. He would also submit that as per the amendment effected to the term "domestic industry" under Rule 2(b) of the Rules in the notification dated 27.2.2010, the word "construed" has to be read along with "only". Therefore, such a deeming fiction is made applicable only in cases where the producers are related to the importers or exporters of the alleged dumping article or themselves imported thereof and hence, the term "only" cannot be taken in a restrictive sense, which, according to him, would be against the basic object of the Rule itself.

12.6. He would refer to the finding of the learned Judge under the impugned order that when once it is admitted that the purpose of Section 9A of the Act is to maintain level playing field and to prevent dumping, while allowing healthy competition, and it was to prevent unfair trade practices, the 1995 Amendment came into existence pursuant to Article VI of the General Agreement on Tariffs and Trade, 1994 (GATT), the term "domestic industry" has to be understood based on the object and purpose of the Rule.

12.7. According to the learned Senior Counsel, the amendment made with effect from 1.12.2011 by deleting the word "only" thereby reiterating the discretion on the Designated Authority only shows that the intention is to make the Rules in accordance with and in order to implement the Treaty, which is the international obligation of the Government. He would also submit that by use of the word "only" if it is construed so as to fully exclude all the exporters, then the very object and purpose of the Rule would be obliterated and that would be improper and incorrect interpretation of the Rule. According to him, even otherwise the term "only" brought in the amendment of the year 2010 cannot have any retrospective effect.

12.8. He would submit that the intention of the amendment was only to bring it in consonance with WTO Anti-Dumping Agreement by referring to a communication of the Commerce Secretary, Government of India dated 12.10.2011, wherein he has clearly stated that when originally the term "domestic industry" used the word "shall" thereby totally taking away the discretionary power of the Designated Authority, which has subsequently become "may" and therefore the subsequent amendment in addition to "may" if adds the word "only" that cannot be construed restrictively, especially when in the subsequent amendment brought in with effect from 1.12.2011, the term "only" itself has been taken away. In this regard, he would rely upon the judgments in Zile Singh v. State of Haryana, (2004) 8 SCC 1; Ashok Pal Singh v. Uttar Pradesh Judicial Services Association, (2010) 12 SCC 635; Ashok Lanka v. Rishi Dikshit, (2006) 9 SCC 90; CIT v. Shelly Products, (2003) 5 SCC 461.

12.9. To substantiate his contention that the Rules are to be interpreted in accordance with WTO Agreement, he would rely upon the judgments in Haridas Exports v. All India Float Glass Manufacturers' Association, (2002) 6 SCC 600; S & S Enterprise v. Designated Authority, (2005) 3 SCC 337; Gramophone Co. of India Ltd. v. Birendra Bahadur Pandey, (1984) 2 SCC 534.

12.10. He would also refer to a Handbook on Anti-Dumping Investigations of the World Trade Organization published by the Cambridge University Press and also note by the WTO and submit that even though the terms of such agreements may not be binding, for the limited purpose of interpretation of the words the same can be used. Therefore, according to the learned Senior Counsel, if the term "only" is to be construed restrictively taking away the discretionary power of the Designated Authority, the same will not only be against the purport of the WTO, which is the basis for the Anti-Dumping Rules, India being one of the members, but also the same will be against the interest of the country as a whole.

12.11. According to the learned Senior Counsel, by holding that the domestic industry like M/s.Nirma Limited is not entitled to maintain the application by such restrictive interpretation, the learned Judge under the impugned order has committed a serious error.

13.1. Mr.P.S.Raman, learned Senior Counsel appearing for M/s.Alkali Manufacturers Association of India, to which the said four industries were the members, would submit that originally when a notification was issued on 20.8.2010 initiating anti-dumping investigation on imports of Soda Ash originating in or exported from China PR, etc., the same was challenged by the writ petitioner by filing W.P.No.4602 of 2011 on the ground that the Association, including few of its members (who are themselves importers), cannot be termed as a "domestic industry", in which this Court has passed an order on 26.4.2011 dismissing the miscellaneous petition holding that it is only in the preliminary stage and it was subsequently after making hearings as per the provisions of the Rules, preliminary finding has been given by the Designated Authority holding that the Designated Authority as per Rule 2(b) of the Rules is vested with discretion to exclude or include any domestic manager, rejecting the points raised by the writ petitioner that the term "only" imported in the amendment of the year 2010 to the word "domestic industry" will not take away the discretion.

13.2. He would state that prior to 15.7.1999 there was no discretion to the Designated Authority and that was vested on 15.7.1999 and in 2010 amendment when the term "may" was retained, only because the term "only" was added towards the end that cannot be said to qualify the term "may" and this being a delegated legislation the term must be construed by keeping in mind the very object of the Rules which is based on the WTO Agreement.

13.3. By relying upon the decision in Reliance Industries Limited v. Designated Authority, (2006) 202 ELT 23, the learned Senior Counsel would submit that the Designated Authority must be informed with all particulars like dumping cost, injury, etc., so as to enable the Designated Authority to come to a proper conclusion.

13.4. He would also refer to the letter of the Commerce Ministry, Government of India, to submit that by going into the object, as it is seen in the notes, the term "only" cannot take away the discretionary power of the Designated Authority. He would rely upon the judgments in CIT v. Tata Iron and Steel Co. Ltd., (1998) 2 SCC 366; Union of India v. Tata Iron and Steel Co. Ltd., (1976) 2 SCC 123; and Saru Smelting (P) Ltd. v. CST, 1993 Supp (3) SCC 97.

13.5. He would take this Court to the various publications for the better understanding of the entire issue and ultimately submit that there must be purposive interpretation by relying upon the decisions in K.P.Varghese v. ITO, (1981) 4 SCC 173; Grasim Industries Ltd. v. Collector of Customs, (2002) 4 SCC 297; B.Premanand v. Mohan Koikal, (2011) 4 SCC 266; and District Mining Officer v. Tata Iron and Steel Co., (2001) 7 SCC 358.

14.1. Mr.Satish Parasaran, learned counsel appearing for the appellant in W.A.No.194 of 2012, namely M/s.GHCL, while reiterating the contentions raised by M/s.Krishnan Venugopal and P.S.Raman, learned Senior Counsel, would submit that imposing of duty is not the object of the Rules. Duty is only to compensate the anti-dumping. The basic idea is that the competition in the domestic market should not be prevented by anti-dumping activity from foreign countries.

14.2. He submitted that the intention of the Legislature is always to be gathered from the words used by it, giving to the words their plain, normal, grammatical meaning and in this regard, he relied on the judgment in Mahadeolal Kanodia v. The Administrator-General of West Bengal, AIR 1960 SC 936. He would also place reliance on the judgment of the Supreme Court in Jolly George Varghese and Another v. The Bank of Cochin, AIR 1980 SC 936.

14.3. It is his submission that this being not a fiscal law but a economic legislation, the term "domestic industry" should be construed liberally, by relying upon the decisions in State of Maharashtra v. Mohd. Yakub and others, (1980) 3 SCC 57, apart from Carew & Co. Ltd. v. Union of India, (1975) 2 SCC 791.

14.4. The term "only" cannot be construed to take away the discretion, for which he has relied upon the decision in Chief Controlling Revenue Authority v. Maharashtra Sugar Mill Ltd., AIR 1950 SC 218. He would also submit that the Act being a remedial legislation, the definition cannot be imported or borrowed from the Customs Act.

15.1. It is the contention of Mr.M.Ravindran, Additional Solicitor General of India appearing for the Designated Authority, Directorate General of Anti-Dumping and Allied Duties, Ministry of Commerce & Industry appellant in W.A.No.195 of 2012 that the writ petition is not maintainable and the same is premature. He would rely upon the decision in Designated Authority (Anti-Dumping Directorate) v. Haldor Topsoe A/S, (2000) 6 SCC 626.

15.2. It is his submission that while in the period between 1947 to 1994 heavy industries were with the Government, due to the economic development, multi-national companies have been allowed by the Government. The World Trade Organization, to which India happens to be a member, came into effect from 1994 and the concept of anti-dumping was introduced in the interest of all the member nations and, therefore, after notifying the same by the Government, for the purpose of construction of various terms of the Rules, the Government of India is entitled to apply the basic principles based on which WTO as well as the GATT were entered. He would rely upon the judgments in Reliance Industries Ltd. v. Designated Authority, (2006) 10 SCC 368 and Bhanumati v. State of U.P., (2010) 12 SCC 1 in this regard.

16.1. Per contra, it is the contention of Mr.Arvind P.Datar, learned Senior Counsel appearing for the original writ petitioner that when once it is clear that the impugned order of the learned Single Judge is not perverse, simply because a different view is possible in respect of one of the issues, there is no necessity to interfere and his submission is that the interpretation must be literal in sense. He would submit that the writ petition against the impugned preliminary order is maintainable for the reason that jurisdiction issue has been raised. The preliminary finding given by the Designated Authority is the basis for further investigation and when once the said basis itself, according to the writ petitioner, is without jurisdiction, certainly the petitioner is entitled to challenge the preliminary finding itself.

16.2. While supporting the finding given by the learned Judge in respect of the construction of Rule 2(b) of the Rules, the learned Senior Counsel would submit that by applying the literal interpretation, the term "only" specifically added by the law-makers makes it abundantly clear that the intention was to restrict the discretionary power of the Designated Authority in order to avoid the abuse of process.

16.3. According to him, the excluded category remains already excluded and the discretion of the Designated Authority is restricted only in respect of the rest of the producers.

16.4. It is his submission that the Act is a fiscal statute because its idea is to impose and levy tax and anti-dumping duty should be treated as tax and if so, the interpretation must be strict in nature.

16.5. It is his submission that even if it is accepted that the term "only" which has been added in the end of the definition of "domestic industry" is excluded, it does not mean that M/s.Nirmal Limited, M/s.SCL and M/s.GHCL can come within the definition, since they are in the excluded category.

16.6. He has also submitted that while the learned Judge has correctly construed the provision of Rule 2(b) of the Rules, an error has been committed in correlating it with Rule 5(3) of the Rules so as to accept the application of M/s.DCW Limited, which has got the output admittedly of 4% and that can never be equated to that of 100%.

17.1. Mr.Vijayanarayanan, learned Senior Counsel appearing for the writ petitioner, who has filed W.A.No.307 of 2012 and also W.A.No.337 of 2012 in respect of another portion of the order closing the earlier writ petition in W.P.No.4602 of 2011, would submit that the WTO concept cannot protect the Indian market. The concept is that the market must be free and fair between the nations. To substantiate his contention that the writ petition is maintainable, he would rely upon the decision in 2011 (183) ECR 145 (SC).

17.2. He would submit that inasmuch as the finding in the preliminary order by the Designated Authority is quash-judicial in nature, one cannot say that any error in the same cannot be questioned. He would rely upon the decision in Mohtesham Mohd. Ismail v. Enforcement Directorate, (2007) 8 SCC 254.

17.3. It is his submission that the Designated Authority, who is quasi judicial authority, cannot file appeal against the order of the learned Single Judge, since the Designated Authority is not a person aggrieved, as the lis is between the two parties and the quasi-judicial authority cannot be a party to the lis.

18. We have heard the learned counsel for the appellants as well as the respondents, gone through the impugned judgment of the learned Judge and given our anxious thought to the issues involved.

19. On an overall reading of the entire papers, including the impugned order of the learned Judge, the following three points are to be answered in this appeals:

(i)the maintainability of the writ petition filed by M/s.Saint Gobain Glass India Limited;

(ii)the construction of the term "domestic industry" as per Rule 2(b) of the Rules, which has undergone various amendments, as to whether by the amendment dated 27.2.2010, the discretionary power of the Designated Authority in respect of the domestic producers is taken away; and

(iii)as to whether the finding of the learned Judge in respect of M/s.DCW Limited, which is forming part of Alkali Manufacturers Association of India, being a domestic producer, even though admittedly having 4% of the production, could be presumed to have 100% production so as to enable it have a jurisdiction to make representation to the Designated Authority, is correct in law.

Point (i)

20. Regarding the first issue in respect of the maintainability aspect of the writ petition in W.P.No.23515 of 2011, the learned Judge in the impugned order has held that inasmuch as the very jurisdiction of the Designated Authority in initiating proceedings is challenged in the writ petition, it cannot be held that the writ petition is not maintainable.

21. Even though it has been the contention of the members of Alkali Manufacturers Association of India that at the stage of preliminary finding there is no finality and unless and until the Government of India ultimately passes order imposing the levy and thereafter gives final finding a writ petition is not maintainable, and there is an appellate remedy available, as correctly held by the learned Judge, mere existence of an alternative remedy cannot be said to be an absolute bar for the High Court for entertaining a writ petition under Article 226 of the Constitution of India. In the decision rendered by the Supreme Court in Union of India v. Tantia Construction (P) Ltd., (2011) 5 SCC 697, the Supreme Court after analyzing the various decisions about the maintainability of the writ petition in the presence of an alternative remedy, has held that alternative remedy is a rule of discretion and not a matter of compulsion. The operative portion of the said decision is as follows:

"33. Apart from the above, even on the question of maintainability of the writ petition on account of the arbitration clause included in the agreement between the parties, it is now well established that an alternative remedy is not an absolute bar to the invocation of the writ jurisdiction of the High Court or the Supreme Court and that without exhausting such alternative remedy, a writ petition would not be maintainable. The various decisions cited by Mr Chakraborty would clearly indicate that the constitutional powers vested in the High Court or the Supreme Court cannot be fettered by any alternative remedy available to the authorities. Injustice, whenever and wherever it takes place, has to be struck down as an anathema to the rule of law and the provisions of the Constitution.

34. We endorse the view of the High Court that notwithstanding the provisions relating to the arbitration clause contained in the agreement, the High Court was fully within its competence to entertain and dispose of the writ petition filed on behalf of the respondent Company. We, therefore, see no reason to interfere with the views expressed by the High Court on the maintainability of the writ petition and also on its merits."

22. Moreover, against the preliminary finding it cannot be said that there is an effective remedy available as per Section 9C of the Act. The power of imposing anti-dumping duty on dumped articles emanates from Section 9A of the Act which contemplates that when any article is exported by an exporter or producer to India from any country at less than its normal value, on such importation in India, the Government of India is entitled by notification to impose anti-dumping duty not exceeding the margin of dumping in relation to the article.

23. While Section 9B of the Act contemplates certain circumstances wherein no such levy can be imposed, Section 9C of the Act provides an appeal to the Customs Excise and Service Tax Appellate Tribunal constituted under Section 129 of the Customs Act, 1962 against the order of determination or review regarding the existence, degree and effect of any subsidy or dumping in relation to import. Section 9C of the Act is as follows:

"Section 9C. Appeal. (1) An appeal against the order of determination or review thereof regarding the existence, degree and effect of any subsidy or dumping in relation to import of any article shall lie to the Customs, Excise and Service Tax Appellate Tribunal constituted under section 129 of the Customs Act, 1962 (52 of 1962) (hereafter referred to as the Appellate Tribunal).

(1A) An appeal under sub-section (1) shall be accompanied by a fee of fifteen thousand rupees.

(1B) Every application made before the Appellate Tribunal,-

(a) in an appeal under sub-section (1), for grant of stay or for rectification of mistake or for any other purpose;

(b) for restoration of an appeal or an application, shall be accompanied by a fee of five hundred rupees.

(2) Every appeal under this section shall be filed within ninety days of the date of order under appeal:

Provided that the Appellate Tribunal may entertain any appeal after the expiry of the said period of ninety days, if it is satisfied that the appellant was prevented by sufficient cause from filing the appeal in time.

(3) The Appellate Tribunal may, after giving the parties to the appeal an opportunity of being heard, pass such order thereon as it thinks fit, confirming, modifying or annulling the order appealed against.

(4) The provisions of sub-section (1), (2), (5) and (6) or section 129C of the Customs Act, 1962 shall apply to the Appellate Tribunal in the discharge of its functions under this Act as they apply to it in the discharge of its functions under the Customs Act, 1962.

(5) Every appeal under sub-section (1) shall be heard by a Special Bench constituted by the President of the Appellate Tribunal for hearing such appeals and such Bench shall consist of the President and not less than two members and shall include one judicial member and one technical member."

24. It is in accordance with the powers conferred under Section 9A(6) of the Act, which confers a rule making power to the Central Government in order to ascertain and determine the manner in which the article liable for any anti-dumping duty is to be identified or the manner in which the export price and the normal value of, and the margin of dumping in relation to such article is to be determined for assessment and collection of such anti-dumping duty, the Central Government has framed the Customs Tariff (Identification, Assessment and Collection of Anti-Dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995 by notification issued on 1.1.1995.

25. Apart from the definition of the word "domestic industry", which has been defined under Rule 2(b) of the Rules, which will be subsequently dealt by us, at this stage regarding the decision of the maintainability of the writ petition and the availability of the alternative remedy of appeal, suffice it to refer to some of the provisions of the Rules. Rule 3 of the Rules enables the Central Government to appoint Designated Authority, whose duties are mentioned in Rule 4 of the Rules, which is as follows:

"Rule 4. Duties of the designated authority.- It shall be the duty of the designated authority in accordance with these rules-

(a) to investigate as to the existence, degree and effect of any alleged dumping in relation to import of any article;

(b) to identify the article liable for anti-dumping duty;

(i) normal value, export price and the margin of dumping in relation to the article under investigation; and

(ii) 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 such article from the specified countries;

(d) to recommend to the Central Government-

(i) 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, after considering the principles laid down in the Annexure III to these rules; and

(ii) the date of commencement of such duty;

(e) to review the need for continuance of anti-dumping duty."

26. A reading of the said Rule makes it ample clear that it vests a power on the Designated Authority to investigate, identify and submit its finding provisional or otherwise, to the Central Government as to the normal value and injury, apart from recommending to the Central Government about the amount of anti-dumping duty and the date of commencement of such duty.

27. The Designated Authority, after preliminary investigation, has to record a preliminary finding regarding the export price, normal value and the margin of dumping and also record further finding regarding the injury to the domestic industry with detailed information for the preliminary determination on dumping and injury and such preliminary finding is to be issued by way of a public notice by the Designated Authority, as it is seen in Rule 12 of the Rules, which is as follows:

"Rule 12. Preliminary findings. - (1) The designated authority shall proceed expeditiously with the conduct of the investigation and shall, in appropriate cases, record a preliminary finding regarding export price, normal value and margin of dumping, and in respect of imports from specified countries, it shall also record a further finding regarding injury to the domestic industry and such finding shall contain sufficiently detailed information for the preliminary determinations on dumping and injury and shall refer to the matters of fact and law which have led to arguments being accepted or rejected. It will also contain:-

(i) the names of the suppliers, or when this is impracticable, the supplying countries involved;

(ii) a description of the article which is sufficient for customs purposes;

(iii) the margins of dumping established and a full explanation of the reasons for the methodology used in the establishment and comparison of the export price and the normal value;

(iv) considerations relevant to the injury determination; and

(v) the main reasons leading to the determination.

2. The designated authority shall issue a public notice recording its preliminary findings."

28. It is thereafter on the basis of the preliminary finding, which was the subject matter of challenge of W.P.No.23515 of 2011, the Central Government imposes levy of provisional duty and thereafter, on further investigation, the Designated Authority gives a final finding and it is in the final finding, as it is seen under Rule 17 of the Rules, a determination is made in the form of recommendation by the Designated Authority and thereafter, the Central Government issues levy within a period of three months of the date of publication of final findings by the Designated Authority, as it is seen in Rule 18 of the Rules which is as follows:

"Rule 18. Levy of duty. - (1) The Central Government may, within three months of the date of publication of final findings by the designated authority under rule 17, impose by notification in the Official Gazette, upon importation into India of the article covered by the final finding, anti-dumping duty not exceeding the margin of dumping as determined under rule 17:

(2) In cases where the designated authority has selected percentage of the volume of the exports from a particular country, as referred to sub-rule (3) of rule 17, any anti-dumping duty applied to imports from exporters or producers not included in the examination shall not exceed -

(i) the weighted average margin of dumping established with respect to the selected exporters or producers or,

(ii) where the liability for payment of anti-dumping duties is calculated on the basis of a prospective normal value/ the difference between the weighted average normal value of the selected exporters or producers and the export prices of exporters or producers not individually examined:

Provided that the Central Government shall disregard for the purpose of this sub-rule any zero margin, margins which are less than 2 per cent expressed as the percentage of export price and margins established in the circumstances detailed in sub-rule (8) of rule 6. The Central Government shall apply individual duties to imports from any exporter or producer not included in the examination who has provided the necessary information during the course of the investigation as referred to in the second proviso to sub-rule (3) of rule 17.

(3) Notwithstanding anything contained in sub-rule (1), where a domestic industry has been interpreted according to the proviso to sub-clause (b) of rule 2, a duty shall be levied only after the exporters have been given opportunity to cease exporting at dumped prices to the area concerned or otherwise give an undertaking pursuant to rule 15 and such undertaking has not been promptly given and in such cases duty shall not be levied only on the articles of specific producers which supply the area in question.

(4) If the final finding of the designated authority is negative that is contrary to the evidence on whose basis the investigation was initiated, the Central Government shall, within forty-five days of the publication of final findings by the designated authority under rule 17, withdraw the provisional duty imposed, if any."

29. On a reading of Section 9C of the Act, elicited above, it is clear that an appeal lies only after the determination, which comes only after the final finding given by the Designated Authority under Rule 17 of the Rules and levy of duty by the Central Government under Rule 18 of the Rules, and therefore, it is clear that from the preliminary finding, which is impugned in the writ petition, it cannot be said that there is an alternative remedy of appeal available.

30. The said view of ours is fortified by a Division Bench decision of the Gujarat High Court in Meghani Organics Ltd. v. Union of India, 2011 (267) E.L.T. 440 (Guj.), wherein the Division Bench has also taken a stand that a preliminary finding given by the Designated Authority is recommendatory in nature and appeal would not be tenable under Section 9C of the Act against the said preliminary finding, with the operative portion as follows:

"16. This leads to an another issue as to whether an appeal lies to C.E.S.T.A.T. against levy of provisional anti-dumping duty, and if yes, whether this Court should entertain the present petition when an alternative remedy in the form of an appeal is available to the petitioners. In support of this contention, Mr. Joshi relied on the decision of this Court in Surfaces Plus v. Union of India 2004 (173) ELT 127 (Guj.) wherein, while considering an issue as to whether an appeal lies against preliminary finding, the Court held that against preliminary finding, which is of a recommendatory nature, an appeal would not be tenable under Section 9C of the Act. The preliminary finding which is of a recommendatory nature is required to be considered by the Central Government under Rule 13 for the purpose of deciding the question of imposing provisional anti-dumping duty and the Central Government is required to issue notification for imposing anti-dumping duty. Such notification of imposing duty has not been issued so far by the Central Government. On the basis of these observations, the submission of Mr. Joshi is that since the Central Government has already issued notification in June, 2009, the petitioners could avail an alternative remedy of filing appeal before C.E.S.T.A.T. We are not much impressed by this argument. Section 9C deals with appeal which says that an appeal against the order of determination or review thereof regarding the existence, degree and effect of any subsidy or dumping in relation to import of any article shall lie to the customs, Excise and Service Tax Appellate Tribunal constituted under Section 129 of the Customs Act, 1962. Section 9A(2) of the Act states that 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. Thus, the provisional anti-dumping duty is levied pending determination and appeal lies only on determination. Moreover, Rule 17 of the Rules deals with final finding. It says that the Designated Authority shall, within one year from the date of initiation of an investigation, determine as to whether or not the article under investigation is being dumped in India and submit to the Central Government its final finding (a) as to (i) the export price, normal value and the margin of dumping of the said article, (ii) whether import of the said article into India, in the case of imports from specified countries, causes or 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, (iv) whether a retrospective levy is called for and if so, the reasons therefore and date of commencement of such retrospective levy. This exercise is yet to be undertaken by the Designated Authority. Hence, no appeal lies against the levy of provisional anti-dumping duty and this Court is well within its power to entertain this petition since there being no alternative remedy available to the petitioners despite the fact that they are being saddled with the liability of provisional anti-dumping duty."

31. In any event, all the respective counsel have mainly focussed their attention on the merits of the case about the definition of the term "domestic industry", which is the crux of the issue, and therefore we do not want to differ from the finding of the learned Judge regarding the maintainability of the writ petition. Accordingly, we hold that the writ petition against the preliminary finding published by the Designated Authority is maintainable, especially when the writ petitioner has chosen to raise the point of jurisdiction. The said point is answered accordingly.

Point (ii)

32. The next issue which comes to the fore is as to who is a domestic industry. This issue gains importance due to the reason that the initiation of the investigation by the Designated Authority itself begins only on the receipt of written application by or on behalf of the domestic industry, except when such investigation is started by the Designated Authority suo motu regarding the determination of the existence, degree and effect of the alleged dumping. Rule 5 of the Rules, which is as follows:

"Rule 5. Initiation of investigation. - (1) Except as provided in sub-rule (4), the designated authority shall initiate an investigation to determine the existence, degree and effect of any alleged dumping only upon receipt of a written application by or on behalf of the domestic industry.

(2) An application under sub-rule (1) shall be in the form as maybe specified by the designated authority and the application shall be supported by evidence of -

(a) dumping

(b) injury, where applicable, and

(3) The designated authority shall not initiate an investigation pursuant to an application made under sub-rule (1) unless -

(a) it determines, on the basis of an examination of the degree of support for, or opposition to the application expressed by domestic producers of the like product, that the application has been made by or on behalf of the domestic industry:

Provided that no investigation shall be initiated if domestic producers expressly supporting the application account for less than twenty five per cent of the total production of the like article by the domestic industry, and

(b) it examines the accuracy and adequacy of the evidence provided in the application and satisfies itself that there is sufficient evidence regarding -

(i) dumping,

(ii) injury, where applicable; and

(iii) where applicable, a casual link between such dumped imports and the alleged injury,

to justify the initiation of an investigation.

Explanation. - For the purpose of this rule the application shall be deemed to have been made by or on behalf of the domestic industry, if it is supported by those domestic producers whose collective output constitute more than fifty per cent of the total production of the like article produced by that portion of the domestic industry expressing either support for or opposition, as the case may be, to the application.

(4) Notwithstanding anything contained in sub-rule (1) the designated authority may initiate an investigation suo moto if it is satisfied from the information received from the Commissioner of Customs appointed under the Customs Act, 1962 (52 of 1962) or from any other source that sufficient evidence exists as to the existence of the circumstances referred to in clause (b) of sub-rule (3).

(5) The designated authority shall notify the government of the exporting country before proceeding to initiate an investigation.",

contemplates that the domestic industry is to make application so as to enable the Designated Authority to initiate investigation with sufficient proof of dumping, injury, where applicable, and the link between such dumped imports and alleged injury. Of course, under Rule 5(3) of the Rules, the Designated Authority is not entitled to proceed with the investigation unless it determines based on the degree of support or opposition to the application by the domestic producers of the like product, and the application has been made on behalf of or by the domestic industry. It also provides for further restriction on the Designated Authority from investigating if domestic producers supporting the application account for less than 25% of the total production of the like article by the domestic industry. Therefore, for the purpose of initiating the proceeding by way of investigation against anti-dumping, the applicant must prove that it is a domestic industry. It is in this context the term "domestic industry" assumes importance.

33. Sections 9A and 9C of the Act, which were introduced by the Customs Tariff (Amendment) Act, 1995 enabling the imposition of anti-dumping duty on dumped articles, were inserted by the Parliament pursuant to the General Agreement on Tariffs and Trade, 1994, which is based on the WTO Agreement, India being one of its signatory, as it was observed by the Full Bench of the Supreme Court in Haridas Exports v. All India Float Glass Manufacturers' Association, (2002) 6 SCC 600. The Supreme Court while dealing with the Monopolies and Restrictive Trade Practices Act, 1969, has observed as follows:

"9. It was submitted that Article 18.1 of the WTO Agreement on Implementation of Article VI of GATT, 1994, provides that no specific action against dumping of exports from another member can be taken except in accordance with the provisions of GATT, 1994 as interpreted by this Agreement . The remedy against the practice of dumping /export of goods at predatory prices has been expressly agreed upon internationally under the General Agreement on Tariffs and Trade (GATT) to which India is a signatory. The Agreement deals with anti-dumping duties and provides mechanism to implement it.

10. In pursuance of GATT, 1994, Parliament for the first time inserted provisions Sections 9-A to 9-C in the Customs Tariff Act vide the Customs Tariff (Amendment) Act, 1995, 6 of 1995 which replaced the provisions of Sections 9, 9-A and 9-B earlier inserted in the Customs Tariff Act under Act 52 of 1982. The Statement of Objects and Reasons to the Bill clearly states that the Bill seeks to amend the Customs Tariff Act to bring the provisions of the Customs Tariff Act in conformity with the provisions of Article VI of GATT, 1994, and the agreements on subsidies and countervailing measures. Even the preamble of the Customs Tariff (Amendment) Act, 1995, 6 of 1995 also provides that the provisions of Sections 9, 9-A and 9-B of the Customs Tariff Act, 1975, have been replaced by the new Sections 9, 9-A and 9-B to reflect the changes in the domestic law, consequent upon coming into effect of the Agreement on Anti-Dumping (i.e. an Agreement on Implementation of Article VI of GATT, 1994) under the Uruguay Round on 1-1-1995."

34. The purpose of Section 9A of the Act and the Rules has been held to be progressive in nature made pursuant to the General Agreement on Tariffs and Trade, 1994, as held by the Supreme Court in Reliance Industries Limited v. Designated Authority, (2006) 202 ELT 23, the relevant portion of the said judgment is as under:

"11. The result was that an industrial base was created in India after independence and this has definitely resulted in some progress. The purpose of Section 9A can, therefore, easily be seen. The purpose was that our industries which had been built up after independence with great difficulties must not be allowed to be destroyed by unfair competition of some foreign companies. Dumping is a well-known method of unfair competition which is adopted by the foreign companies. This is done by selling goods at a very low price for some time so that the domestic industries cannot compete and are thereby destroyed, and after such destruction has taken place, prices are again raised.

12. The purpose of Section 9A is, therefore, to maintain a level-playing field and prevent dumping, while allowing for healthy competition. The purpose is not protectionism in the classical sense (as proposed by the German economist Friedrich List in his famous book 'National System of Political Economy' published in 1841) but to prevent unfair trade practices. The 1995 Amendment to Section 9A was apparently made in pursuance to Article VI of the General Agreement on Tariffs and Trade 1994 (GATT 1994) which permitted anti-dumping measures as an instrument of fair competition.

13. The concept of anti-dumping is founded on the basis that a foreign manufacturer sells below the normal value in order to destabilize domestic manufacturers. Dumping, in the short term, may give some transitory benefits to the local customers on account of lower priced goods, but in the long run destroys the local industries and may have a drastic effect on prices in the long run."

The Supreme Court, in the said case, has also held that as a nation we must aim to create India as a modern and powerful State and the industrialization must come in to put an end to the concept of "India is a rich country with poor people", as follows:

"Before parting with this case, we would like to state that our national aim must be to create India as a modern, highly industrialized, powerful state. The real world today is cruel and harsh. It respects power, not poverty or weakness, and power comes from a high level of industrialization. Hence, if we wish to get respect in the comity of nations, we must make India a modern, powerful, highly industrialized state. The truth is that today India is poor. As Rajni Palme Dutt wrote in his book 'India', 'India is a rich country with poor people'. We are rich in raw materials, rich in industrial skills, we have outstanding scientists, engineers, technicians and managers. Despite all this we are a poor nation. Hence, if we want to command respect in the comity of nations, we must rapidly industrialize and make India a powerful, modern, highly industrialized nation. It is industrialization alone which can generate the wealth which we require for the welfare of our people and for progress. Hence our national aim must be rapid industrialization as that is the solution to our country's problems. Industrialization will also provide large scale employment to our people, and will help the growth of science and technology, which is absolutely essential to our progress."

35. By going through the object of the Rules framed in accordance with Section 9A of the Act with the intention of preventing anti-dumping, which is in the economic welfare of the country, we can safely construe the Rules as an economic legislation rather than a fiscal law. The law is well settled that the fiscal law should be construed strictly, while the economic legislation must be construed with an intention of developing the domestic industry. In State of Maharashtra v. Mohd. Yakub and others, (1980) 3 SCC 57, the Supreme Court has held while dealing with the Customs Act, 1962 regarding the power of confiscation and considering the object that the anti-social activities like smuggling will affect the foreign exchange, that a narrow interpretation to enable a culprit to escape is not permissible. It is relevant to extract the following passage:

"14. Now, let us apply the above principles to the facts of the case in hand. The intention of the accused to export the silver from India by sea was clear from the circumstances enumerated above. They were taking the silver ingots concealed in the two vehicles under cover of darkness. They had reached close to the sea-shore and. had started unloading the silver there near a creek from which the sound of the engine of a sea-craft was also heard. Beyond the stage of preparation, most of the steps necessary in the course of export by sea, had been taken. The only step that remained to be taken towards the export of the silver was to load it on a sea-craft for moving out of the territorial waters of India. But for the intervention of the officers of law, the unlawful export of silver would have been consummated. The calendestine disappearance of the sea-craft when the officers intercepted and rounded up the vehicles and the accused at the creek, reinforces the inference that the accused had deliberately attempted to export silver by sea in contravention of law.

15. It is important to bear in mind that the penal provisions with which we are concerned have been enacted to suppress the evil of smuggling precious metal out of India. Smuggling is an antisocial activity which adversely affects the public revenues, the earning of foreign exchange, the financial stability and the economy of the country. A narrow interpretation of the word "attempt" therefore, in these penal provisions which will impair their efficacy as instruments for combating this baneful activity has to be eschewed. These provisions should be construed in a manner which would suppress the mischief, promote their object, prevent then subtle evasion and foil their artful circumvention. Thus, construed, the expression "attempt" within the meaning of these penal provisions is wide enough to take in its fold any one or series of acts committed, beyond the stage of preparation in moving the contraband goods deliberately to the place of embarkation, such act or acts being reasonably proximate to the completion of the unlawful export. The inference arising out of the facts and circumstances established by the prosecution, unerringly pointed to the conclusion, that the accused had committed the offence of attempting to export silver out of India by sea, in contravention of law."

36. Under the Customs Tariff (Identification, Assessment and Collection of Anti-Dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995, when a question arose as to whether it is correct for the Designated Authority to compute the volume of exports on the basis of quantity, rather than on the basis of price, interpreting the term "volume" in Rule 14 of the Rules by borrowing the terms as recognized in GATT, the Supreme Court has clarified in S & S Enterprise v. Designated Authority, (2005) 3 SCC 337 that to constitute dumping, there must be an import at price which is lower than the normal value of the goods in the exporting country; and such export must be sufficient to cause injury to the domestic industry and held as follows:

"4. In our opinion, the interpretation of Rule 14(d) by Respondent 1 and the Tribunal is incorrect and contrary to its language. The imposition of anti-dumping duty is under Section 9-A of the Customs Tariff Act, 1975 and the Rules and is the outcome of the General Agreement on Tariff and Trade (GATT) to which India is a party. The purpose behind the imposition of the duty is to curb unfair trade practices resorted to by exporters of a particular country of flooding the domestic markets with goods at rates which are lower than the rate at which the exporters normally sell the same or like goods in their own countries so as to cause or be likely to cause injury to the domestic market. The levy of anti-dumping duty is a method recognised by GATT which seeks to remedy the injury and at the same time balances the right of exporters from other countries to sell their products within the country with the interest of the domestic markets. Thus the factors to constitute dumping are (i) an import at prices which are lower than the normal value of the goods in the exporting country; (ii) the exports must be sufficient to cause injury to the domestic industry."

37. The international law principles, which are evolved by way of conventions and agreements, are not certainly binding on the domestic courts, but nevertheless in the march of community in the international level, even though the national courts are to follow the national laws, when it requires, the national courts are entitled to interpret the principles of international law, if there are no conflicts. That has been settled while deciding an issue under the Copyright Act, 1957 by the Supreme Court in Gramophone Co. of India Ltd. v. Birendra Bahadur Pandey, (1984) 2 SCC 534, wherein the Supreme Court has distinguished between the international law and domestic law and explained as follows:

"4. Lauterpacht in International Law (General Works) refers to the position in Germany, France, Belgium and Switzerland and says it is the same. He quotes what a German court said to meet an argument that the role of customary international law conflicted with Article 24 of the German Code of Civil Procedure. The court had said, The legislature of the German Reich did not and could not intend any violation of generally recognised rules of international law, when enacting Article 24 of the German Code of Civil Procedure . Lauterpacht refers to another German case where the argument that there ought not to be a direct recourse to the law of nations, except insofar as there has been formed a German customary law was rejected with the statement, The contention of the Creditor that international law is applicable only insofar as it has been adopted by German customary law, lacks foundation in law. Such a legal maxim would, moreover, if generally applied, lead to the untenable result that in the intercourse of nations with one another, there would obtain not a uniform system international law but a series of more or less diverse municipal laws . Lauterpacht summarises the position this way:

While it is clear that international law may and does act directly within the State, it is equally clear that as a rule that direct operation of international law is within the State subject to the overriding authority of municipal law. Courts must apply statutes even if they conflict with international law. The supremacy of international law lasts, pro foro interno, only so long as the State does not expressly and unequivocally derogate from it. When it thus prescribes a departure from international law, conventional or customary, Judges are confronted with a conflict of international law and municipal law and, being organs appointed by the State, they are compelled to apply the latter.

5. There can be no question that nations must march with the international community and the municipal law must respect rules of international law even as nations respect international opinion. The comity of nations requires that rules of international law may be accommodated in the municipal law even without express legislative sanction provided they do not run into conflict with Acts of Parliament. But when they do run into such conflict, the sovereignty and the integrity of the Republic and the supremacy of the constituted legislatures in making the laws may not be subjected to external rules except to the extent legitimately accepted by the constituted legislatures themselves. The doctrine of incorporation also recognises the position that the rules of international law are incorporated into national law and considered to be part of the national law, unless they are in conflict with an Act of Parliament. Comity of nations or no, municipal law must prevail in case of conflict. National courts cannot say yes if Parliament has said no to a principle of international law. National courts will endorse international law but not if it conflicts with national law. National courts being organs of the national State and not organs of international law must perforce apply national law if international law conflicts with it. But the courts are under an obligation within legitimate limits, to so interpret the municipal statute as to avoid confrontation with the comity of nations or the well established principles of international law. But if conflict is inevitable, the latter must yield."

Therefore, it is clear that in the event of absence of any contradiction, there is no bar for interpreting the terms, especially the term "domestic industry" which is the crux of the issue, from the WTO Agreement, which can be certainly the source for such interpretation without having any contradiction to the Indian Law definition.

38. Under the WTO Agreement on anti-dumping, to which India is a signatory, the term "domestic industry" was defined as follows:

"4.1 For the purposes of this Agreement, the term "domestic industry" shall be interpreted as referring to the domestic producers as a whole of the like products or to those of them whose collective output of the products constitutes a major proportion of the total domestic production of those products, except that :

(i) when producers are related to the exporters or importers or are themselves importers of the allegedly dumped product, the term "domestic industry" may be interpreted as referring to the rest of the producers;

(ii) in exceptional circumstances the territory of a Member may, for the production in question, be divided into two or more competitive markets and the producers within each market may be regarded as a separate industry if (a) the producers within such market sell all or almost all of their production of the product in question in that market, and (b) the demand in that market is not to any substantial degree supplied by producers of the product in question located elsewhere in the territory. In such circumstances, injury may be found to exist even where a major portion of the total domestic industry is not injured, provided there is a concentration of dumped imports into such an isolated market and provided further that the dumped imports are causing injury to the producers of all or almost all of the production within such market."

Under the said definition, it is made clear that while the general definition of domestic industry agreed upon between the States in international law is domestic producers as a whole of like products whose collective output of the products constitute a major proportion of the total domestic production, but in cases where the producers either are related to the exporters or importers or are themselves importers of the alleged dumped products, the domestic industry is sought to be interpreted with reference to the said rest of the producers who are the producers related to exporters or importers or themselves importers of the dumped products. Therefore, a dual definition has been given under the international agreement for the term "domestic industry" (i) in respect of the domestic purchasers of like product whose production collectively put together constitute a major proportion of the total domestic production; and (ii) in cases where the producers are related to the exporters or importers or when the producers themselves are the importers of the dumped products, in such event the domestic industry must be interpreted in respect of the rest of the producers who are related to the exporters or importers or are themselves importers of the dumped product.

39. As submitted by Mr.P.S.Raman, learned Senior Counsel appearing for Alkali Manufacturers Association of India, the literature from the member countries, who are parties to the WTO Agreement, would show that the community purchasers who are related to the exporters or importers are entitled to be considered by the community authority. The Book "Dumping and Subsidies" relating to the Law and Procedures Governing the Imposition of Anti-dumping and Countervailing Duties in the European Community, by Clive Stanbrook, as referred to by Mr.P.S.Raman, learned Senior Counsel, in this regard has summarized as follows:

"5.1.3. Community producers who are related to exporters/importers or are importers of the product.

Community producers may not wish to support a complaint because they are related to the exporters or importers, or are themselves importers of the allegedly dumped or subsidised product. In such cases it is considered that the remaining Community producers should not be prevented from making a complaint just because they cannot raise the necessary proportion of support. Thus, the rule is modified so that the Community Authorities may treat the Community industry as meaning those producers who are not related to exporters or importers and are not importers themselves of the offending product. The Community Authorities retain a discretion in this matter, which they are entitled to exercise on a case by case basis. Although the text is not clear on the matter, it would seem that the 50 per cent and the 25 per cent rules still apply to the producers left after the exclusion of those who are related to exporters etc. It would make a nonsense to say otherwise, as the following example shows. If 51 per cent of Community production was related to the exporters they would voice their opposition and it would be impossible for the unrelated producers ever to bring an anti-dumping or anti-subsidy complaint. Unlike Regulation (EEC) No.2423/88, Regulation (EC) No.384/96 and Regulation (EC) No.3284/94 provide a definition of "related". Producers are to be considered as related only if there is a controlling relationship between them and there are grounds for suspecting that the effect of the relationship is to cause the Community producer concerned to behave differently from non-related producers. The control relationship between two parties is defined as follows: one of them directly or indirectly controls the other; or both of them are directly or indirectly controlled by a third person; or together they directly or indirectly control a third person.

Control here means that one party is legally or operationally in a position to exercise restraint or direction over another. The definition works in both directions so that a producer would be related to an exporter if the Community producer controlled the exporter or if the exporter controlled the producer.

The question of producers who, though unrelated to exporters, etc., nevertheless import dumped or subsidised products is entirely different. It is an issue that needs to be examined at the time of initiation. After than it is an issue that may be raised because of its effect on the injury assessment. In Paintbrushes from China, the Community Authorities' failure to exclude German producers who sold large volumes of Chinese paintbrushes, led the Advocate General to recommend the annulment of the Regulation. In that case, it would have resulted in the exclusion of the producers in the country where it was alleged the greatest injury had been caused. However, the exclusion of a company does not always work to the benefit of the defendants in anti-dumping cases. In Photocopiers from Japan, the inclusion of Rank Xerox had the effect of lowering the injury threshold level and therefore the duties that were applied.

It would appear that provided that the reason for importing the product is essentially defensive, the Community Authorities will not exclude the producer. There are many cases where the Community Authorities have held that the producer was importing the allegedly offending product simply to try to defend a position in a market increasingly affected by dumping or subsidies. For example, in Copper Sulphate from Yugoslavia, the Community Authorities found that

"the complainant was obliged to make these purchases in an attempt to limit the effect of injury in order to maintain its customer base by preventing the sale of the imported product to the complainant's customers at dumped prices".

The Community Authorities consider it to be a legitimate act of commercial self protection for Community producers to make purchases to"stay on the market with as" full a range of models as possible or even to protect market niches which would have disappeared without sles of the models in question. The Advocate General considered this issue in TEC v. Council, and Silver Seiko v. Council and concluded that filling gaps in product ranges with imports would not disqualify a firm from being part of the Community industry, provided it was only a few models and there were relatively low volumes. The Court of Justice in Gestetner Holdings v. Council and Commission, also took account of the fact that in the case of one producer, it had already tried to market the full range but failed due to the effects of dumping; in the case of another the Court pointed out that the volumes were minimal and only temporary. In Magnetic disks from Hong Kong, the Community Authorities were prepared to accept that imports could be made as long as they are "limited to that necessary to maintain sales by the complainant producers concerned while their own output was temporarily insufficient, at a time of rapid growth". In Large electrolytic aluminium capacitors from Japan, the Community Authorities took into account the fact that the imports were not resold and were used exclusively in the manufacture of other products. Apparently this was necessary to maintain competitiveness. More controversially, they took into account the fact that the company had been an active participant in the complaint. However, article 5(4) Regulation (EC) No.394/96 does not provide automatic exclusion of Community producers in these circumstances.

One of the factors that will be important in this respect will be the balance of the business of the company as between manufacturing and importing. If the company is predominantly in manufacturing and assembly in the Community market with some supplemental business importing products then it is likely to be included. On the other hand, if a Community producer closes down its production and imports instead, or the general emphasis of his business is on imports, he will be excluded. Exclusion will be likely if, on examination it appears that by importing products, a company has "shielded" itself from the effects of dumping. This will also be likely if it appears that producers have in some way participated in the dumping practice or unduly benefited form it. To include such companies would lead to a distorting effect or injury findings.

It appears to be the Community Authorities' practice to exclude a Community producer who imports the product subject to investigation but does not cooperate because in such circumstances, the Community Authorities cannot determine whether the Community producer was acting defensively or for some other reason."

40. Of course, there is lot of other literature, as relied upon by Mr.P.S.Raman learned Senior Counsel, as Anti-Dumping and other Trade Protection Laws of the EC by Kluwer Law International, which deals with "core of business" test; Anti-Dumping and Countervailing Duty Handbook issued by the United States International Trade Commission, which deals with the related parties. It is significant to note that in Canada "domestic industry" is defined as follows:

"'Domestic industry' means, other than for the purposes of determining injury and subject to the provision governing regional markets, the domestic producers as a whole of the like goods or those domestic producers whose collective production of the like goods constitutes a major proportion of the total domestic production of the like goods except that, where a domestic producer is related to an exporter or importer of dumped or subsidized goods, or is an importer of such goods, 'domestic industry' may be interpreted as meaning the rest of those domestic producers."

There are loads of materials available in international law to substantiate the said view.

41. Insofar as it relates to the definition of "domestic industry" in India, the term "domestic industry" has underwent metamorphosis. As elicited by learned Judge in the impugned order, the term "domestic industry" was defined under Rule 2(b) of the Rules prior to the amendment dated 15.7.1999 as follows:

"Rule 2(b) "domestic industry" means the domestic producers as a whole engaged in the manufacture of the like article and any activity connected therewith or those whose collective output of the said article constitutes a major proportion of the total domestic production of that article except when such producers are related to the exporters or importers of the alleged dumped article or are themselves importers thereof in which case such producers shall be deemed not to form part of domestic industry."

Therefore, at that time the law-makers made it very clear that such producers who are related to the exporters or importers of the alleged dumped article, are totally excluded from making any application and, therefore, there was absolutely no discretion in those cases for the Designated Authority.

42. By virtue of the amendment which has come into effect from 15.7.1999, the word "shall" found in the term "domestic industry" under Rule 2(b) of the Rules has been converted as "may". With the result, the amendment to the term "domestic industry" from 15.7.1999 till 27.2.2010 stood as follows:

"2(b) "domestic industry" means the domestic producers as a whole engaged in the manufacture of the like article and any activity connected therewith or those whose collective output of the said article constitutes a major proportion of the total domestic production of that article except when such producers are related to the exporters or importers of the alleged dumped article or are themselves importers thereof in which case such producers may be deemed not to form part of domestic industry."

By taking away the mandatory provision of "shall" and incorporating the word "may", the Designated Authority was vested with a discretion in respect of the producers who are related to the exporters or importers, or who are themselves importers of the dumped article, so as to treat them as domestic industry in order to make them eligible for making application under Rule 5 of the Rules for investigation.

43. By a notification issued by the Government dated 27.2.2010, the term "domestic industry" was again amended and by virtue of the said amendment, while retaining the term "may", the word "construed" came to replace "deemed" and the term "only" was included in the end of the definition. With the result, the definition by virtue of the said amendment regarding domestic industry under Rule 2(b) of the Rules stood as follows:

"2(b) "domestic industry" means the domestic producers as a whole engaged in the manufacture of the like article and any activity connected therewith or those whose collective output of the said article constitutes a major proportion of the total domestic production of that article except when such producers are related to the exporters or importers of the alleged dumped article or are themselves importers thereof in such case the term 'domestic industry' may be construed as referring to the rest of the producers only."

44. The dispute is relating to the said amendment. Before going into the said aspect, one another factor which is admitted is that by virtue of the subsequent notification issued by the Government of India on 1.12.2011, the domestic industry under Rule 2(b) of the Rules again came to be amended, by which the last word "only" came to be removed and, therefore, it is clear that after 1.12.2011 the discretionary power vested with the Designated Authority, which was in existence between 1999 to 2010, came to be restored.

45. The question to be decided is as to whether by the said amendment brought out on 27.2.2010, simply because the term "only" was incorporated in the end of the definition of the word "domestic industry" it has taken away the discretionary power of the Designated Authority in respect of the producers who are related to the exporters or importers or who are importers themselves, relating to whom the term "domestic industry" was construed.

46. The learned Judge, while comparing all the three notifications, has held that by dint of the inclusion of the term "only", the discretion of the Designated Authority to treat the domestic producer, who himself is an importer, as domestic industry, has been taken away and, therefore, the preliminary finding which was the subject matter of challenge in the writ petition insofar as it relates to the exercise of discretionary power by the Designated Authority regarding the producers who are importers came to be set aside.

47. It is not in dispute, as stated above, that between 1999 and 2010 in respect of the producers who are related to the exporters or importers of the dumped articles, or who are themselves importers, the term "domestic industry" was liberally construed by giving discretion to the Designated Authority treating such persons as forming part of the domestic industry. Therefore, it was clear that the domestic industry, which was defined in two-fold (i) in respect of the domestic producers as a whole engaged in the manufacture of a like article whose collective output constitutes the major portion of the total domestic production of that article; and (ii) in respect of the producers who are related to the exporters or importers of the alleged domestic industry or producers who are themselves importers of the dumped articles, and a discretion has been vested with the Designated Authority to decide whether they should form part of the domestic industry.

48. In the amendment which was brought in with effect from 27.2.2010, on a reading, it is clear that the first portion of the definition of the domestic industry, which relates to the domestic producers as a whole whose collective output constitutes the major portion of the total domestic production, remains intact. Insofar as it relates to the producers who are related to the exporters or importers of the dumped article or who are themselves importers of the dumped articles, the law-makers made it very clear that while construing them as domestic industry, the Designated Authority "may be construed as referring to the rest of the producers only".

49. The term "may be construed as referring to the rest of the producers only" on a bare and literal interpretation, in our view, should be construed only in respect of the producers who are related to exporters or importers, or producers who are themselves importers, and simply because the term "only" is construed, it cannot be taken to the first portion of the definition as submitted by Mr.Arvind P.Datar in order to substantiate his contention that the discretionary power of the Designated Authority to take cognizance of the application under Rule 5 of the Rules has been taken away unless and until there is the collective output which constitutes the major proportion. If that submission is accepted, it will not only be against the tenets of the WTO Agreement, but also against the basic purpose of the Rule which is intended to prevent anti-dumping, which is a restrictive trade practice affecting the internal trade market, on the technical ground that required proportion of members has not applied under Rule 5 of the Rules, which, in our view, cannot be construed to be a harmonious interpretation.

50. Moreover, as correctly submitted by the Senior Counsel and counsel appearing for various domestic producers, if the term "only" has been included anywhere else, there would have been scope for such restrictive interpretation. Furthermore, the Rule has been consistent in giving discretion to the Designated Authority for nearly 11 years from 1999 to 2010 and the Government having realized the difficulty has also reverted back to the period between 1999 to 2010 by taking away the term "only" and therefore it is patently clear that the intent of the law-makers is not to restrict the discretionary power of the Designated Authority so as to take cognizance of the application regarding anti-dumping.

51. The word "only" under Rule 2(b) of the Rules need not be concentrated much and in our view it has no significance as such. In fact, under similar circumstance, a Full Bench of the Supreme Court in Grasim Industries Ltd. v. Collector of Customs, (2002) 4 SCC 297 has held while construing the terms "similar" and "other" or "and the like" based on the principle of ejusdem generis, that there is no purpose in concentrating on one word while interpreting the legislature, as follows:

"10. No words or expressions used in any statute can be said to be redundant or superfluous. In matters of interpretation one should not concentrate too much on one word and pay too little attention to other words. No provision in the statute and no word in any section can be construed in isolation. Every provision and every word must be looked at generally and in the context in which it is used. It is said that every statute is an edict of the legislature. The elementary principle of interpreting any word while considering a statute is to gather the mens or sentential legis of the legislature. Where the words are clear and there is no obscurity, and there is no ambiguity and the intention of the legislature is clearly conveyed, there is no scope for the Court to take upon itself the task of amending or alternating the statutory provisions. Wherever the language is clear the intention of the legislature is to be gathered from the language used. While doing so what has been said in the statute as also what has not been said has to be noted. The construction which requires for its support addition or substitution of words or which results in rejection of words has to be avoided. As stated by the Privy Council in Crawford v. Spooner (1846) 6 Moore PC 1 "we cannot aid the Legislature's defective phrasing of an Act, we cannot add or mend and, by construction make up deficiencies which are left there". In case of an ordinary word there should be no attempt to substitute or paraphrase of general application. Attention should be confined to what is necessary for deciding the particular case. This principle is too well settled and reference to few decisions of this Court would suffice. [See: Gwalior Rayons Silk Mfg. (Wvg.) Co. Ltd. v. Custodian of Vested Forests, AIR 1990 SC 1747, Union of India and Anr. v. Deoki Nandan Aggarwal , AIR 1992 SC 96, Institute of Chartered Accountants of India v. Price Waterhouse and Anr., (1997) 6 SCC 312 and Harbhajan Singh v. Press Council of India and Ors., (2002) 3 SCC 722."

52. Moreover, it is well settled law that while interpreting a statute the basic principle of literal rule of interpretation has to be followed, as it was observed by the Supreme Court in B.Premanand v. Mohan Koikal, (2011) 4 SCC 266. The relevant portion of the said decision is as follows:

"9. It may be mentioned in this connection that the first and foremost principle of interpretation of a statute in every system of interpretation is the literal rule of interpretation. The other rules of interpretation e.g. the mischief rule, purposive interpretation etc. can only be resorted to when the plain words of a statute are ambiguous or lead to no intelligible results or if read literally would nullify the very object of the statute. Where the words of a statute are absolutely clear and unambiguous, recourse cannot be had to the principles of interpretation other than the literal rule, vide Swedish Match AB v. Securities and Exchange Board, AIR 2004 SC 4219."

In the said judgment, the Supreme Court has also referred to an earlier judgment in Gurudevdatta VKSSS Maryadit v. State of Maharashtra, (2001) 4 SCC 534 with approval in paragraph (23), which is as follows:

"23. In Gurudevdatta VKSSS Maryadit v. State of Maharashtra, AIR 2001 SC 1980, this Court observed:

"It is a cardinal principle of interpretation of statute that the words of a statute must be understood in their natural, ordinary or popular sense and construed according to their grammatical meaning, unless such construction leads to some absurdity or unless there is something in the context or in the object of the statute to suggest to the contrary. The golden rule is that the words of a statute must prima facie be given their ordinary meaning. It is yet another rule of construction that when the words of the statute are clear, plain and unambiguous, then the Courts are bound to give effect to that meaning, irrespective of the consequences. It is said that the words themselves best declare the intention of the law-giver. The Courts are adhered to the principle that efforts should be made to give meaning to each and every word used by the legislature and it is not a sound principle of construction to brush aside words in a statute as being inapposite surpluses, if they can have a proper application in circumstances conceivable within the contemplation of the statute."

The same view has been taken by this Court in S. Mehta v. State of Maharashtra, (2001) 8 SCC 257 and Patangrao Kaddam v. Prithviraj Sajirao Yadav Deshmugh, AIR 2001 SC 1121."

53. The law is not 'a brooding omnipotence in the sky' but a pragmatic instrument of social order, as was opined by the Larger Bench of the Apex Court in Carew & Co. Ltd. v. Union of India, (1975) 2 SCC 791. It was further held in that case that if the language of the statute does not admit of the construction sought, wishful thinking is no substitute for that, thereby holding that purposive interpretation is always progressive in nature.

54. While construing a statute the object has to be taken into consideration, as held by the Supreme Court in District Mining Officer v. Tata Iron and Steel Co., (2001) 7 SCC 358 and the purpose of interpretation by the Court was held to be only to expound the law and not to legislate.

55. The golden rule of grammatical construction was laid down by the Supreme Court in one of its earliest judgments in Mahadeolal Kanodia v. The Administrator-General of West Bengal, AIR 1960 SC 936 as follows:

"8. The principles that have to be applied for interpretation of statutory provisions of this nature are well-established. The first of these is that statutory provisions creating substantive rights or taking away substantive rights are ordinarily prospective; they are retrospective only if by express words or by necessary implication the Legislature has made them retrospective; and the retrospective operation will be limited only to the extent to which it has been so made by express words, or by necessary implication. The second rule is that the intention of the Legislature has always to be gathered from the words used by it, giving to the words their plain, normal, grammatical meaning. The third rule is that if in any legislation, the general object of which is to benefit a particular class of persons, any provision is ambiguous so that it is capable of two meanings, one which would preserve the benefit and another which would take it away, the meaning which preserves it should be adopted. The fourth rule is that if the strict grammatical interpretation gives rise to an absurdity or inconsistency such interpretation should be discarded and an interpretation which will give effect to the purpose the Legislature may reasonably be considered to have had will be put on the words, if necessary, even by modification of the language used.

9. In applying these principles to the interpretation of s. 1(2), it is necessary first to consider a contention that has been raised by Mr. Pathak on behalf of the appellant that the phrase "as amended by this Act" qualifies the word "provisions". If this be correct, the meaning of the proviso will be that only those provisions of the Act which have been amended by the Act shall apply and be deemed to have applied always to pending proceedings. This will become meaningless, the argument continues, if the word "amended" is interpreted to include omissions. For it makes no sense to say that a provision which has been omitted shall apply. So, it is argued, the word "amended" should be interpreted to mean only amendment by additions or alterations and not an amendment by omissions. The result of the proviso, the appellant's counsel contends, is to make applicable to pending proceedings the altered provisions in place of old provisions but to say nothing as regards such provisions which have been omitted.

10. We are unable to see how it is possible, unless rules of grammar are totally disregarded to read the words "as amended by this Act" as to qualify the word "provisions". If ordinary grammatical rules are applied there is no escape from the conclusion that the adjectival phrase "as amended by this Act" qualifies the proximate substantive, viz., the Calcutta Thika Tenancy Act, 1949. There is no escape from the conclusion therefore that what the Legislature was saying by this was nothing more or less than that the provisions of the amended Thika Tenancy Act shall apply."

56. A contrary interpretation taken by the learned Judge in the impugned order in this regard, in our considered view, is not only incorrect, but also against the very aim of the Rule, which is intended to prevent anti-dumping to this country, in order to avoid competition in the internal market by the foreign importers who dump their goods for a lesser price, which will certainly paralyze the economy of the country in the course of time. In fact, the basis for international agreement is to have economic sovereignty of the member countries. While so, the restrictive interpretation given by the learned Judge taking away the discretionary power of the Designated Authority cannot be said to be in accordance with Section 9A of the Act as well as the various provisions of the Rules.

57. While it is true that the international agreements like WTO and GATT may not be the absolute and only source for interpreting the Indian Law, so long as there is no contradiction between the definition of the agreement in the international law and the terms of the Indian Law, there is absolutely no prohibition for this Court to take note of the terms of the international agreements for the purpose of better appreciation of the term.

58. We, therefore, hold that the term "domestic industry", as it was amended on 27.2.2010, has not taken away the discretionary power of the Designated Authority and the Designated Authority is entitled to proceed further.

Point (iii)

59. Insofar as it relates to the third issue about the maintainability of the application by M/s.DCW Limited, which is also a member of the Alkali Manufacturers Association of India, it is not in dispute that it is a domestic producer and that its total production is only 4%. It is also not in dispute that M/s.DCW Limited is the only producer of the article. It was in those circumstances, considering that M/s.DCW Limited comes under the main definition of the domestic producer, while construing the total production, the Designated Authority has come to a conclusion that since it was the only producer, 4% production should be treated as 100% and thereby, entertained the application. It was also challenging the same, the writ petition was filed by Saint Gobain Glass India Limited.

60. The learned Judge while agreeing with the view of the Designated Authority, has construed the definition of domestic industry defined under Rule 2(b) of the Rules along with Rule 5(3) of the Rules proviso, and has held that in the context that M/s.DCW Limited was the only producer of Soda Ash in India, 4% production should be construed as 100% and, therefore, directed the Designated Authority to proceed with the enquiry.

61. As elicited above, under Rule 5(3)(a) proviso, there is a prohibition against the Designated Authority not to investigate when the domestic producers expressly supporting the application account for less than 25% of the total production of the like article by the domestic industry. But under the first portion of the term "domestic industry" defined under Rule 2(b) of the Rules, elicited above, it is very clear that the collective output of the entire manufacture put together totally must constitute the major proportion of the total domestic production. While so, on the admitted fact that M/s.DCW Limited is the only producer of Soda Ash in the country, even though it has produced only 4%, by a combined reading of Rule 2(b) and Rule 5(3) proviso, M/s.DCW Limited must be considered as a domestic industry, as correctly found by the learned Judge, and thereby the said industry is entitled to maintain the application for investigation under the Rules.

62. Under such circumstances, we hold as under:

(i)the writ petition against the preliminary finding published by the Designated Authority is maintainable, especially when the writ petitioner has chosen to raise the point of jurisdiction;

(ii)the term "domestic industry", as it was amended on 27.2.2010, has not taken away the discretionary power of the Designated Authority and the Designated Authority is entitled to proceed further; and

(iii)M/s.DCW Limited is entitled to maintain the application for investigation under the Rules.

63. In the result, W.A.Nos.193, 194, 189 and 195 of 2012 are allowed and W.A.No.307 of 2012 is dismissed. No costs. Consequently, M.P.Nos.1 and 2 of 2012 in W.A.No.193 of 2012, M.P.Nos.1 and 2 of 2012 in W.A.No.194 of 2012, and M.P.No.1 of 2012 in W.A.No.189 of 2012 are closed.

We have also no hesitation to hold that the dismissal of the earlier writ petition filed by the writ petitioner in W.P.No.4602 of 2011 due to the reason that subsequent notification has come into existence cannot be said to be incorrect and in that regard, we agree with the learned Judge. Accordingly, W.A.No.337 of 2012 is dismissed. No costs.

Subject	Custom
Court	Chennai High Court
Decided On	Apr-27-2012
Case Number	W.A.Nos.193, 194, 189, 195, 307 and 337 of 2012 W.A.No.193 of 2012:
Judge	P.JYOTHIMANI; M.DURAISWAMY, JJ.
Acts	Customs Tariff Act, 1975 - Section 9C, 9B, 9A; Customs Act, 1962 - Section 129; Customs Tariff (Identification, Assessment and Collection of Anti-Dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995 - Rules 6(4), 2(d), 5(3), 5(2), 17 (3), 12, 13, 18, 3, 4; Constitution of India - Articles 226
Appellant	Nirma Limited
Respondent	Saint GobaIn Glass India Limited and ors.
Appellant Advocate	Mr.Krishnan Venugopal; Mr.Satish Parasaran, Advs
Respondent Advocate	Mr.Arvind P.Datar; Mr.Vijayanarayanan, Advs

Nirma Limited. Vs. Saint GobaIn Glass India Limited and ors. - Court Judgment