Holding that a statute based on an international treaty should be interpreted in the light of the objectives of the treaty, the Madras High Court interpreted Anti Dumping Duty Rules in the light of General Agreement on Trade and Tariffs 1994(GATT).
Thus, the High Court read into time limit for 'New Shipper Review' under Rule 22 of Customs Tariff (Identification, Assessment and Collection of Anti-Dumping Duty on dumped articles and for Determination of Injury) Rules, 1995 (“ADD Rules”), for which no express time limit was otherwise provided. The Rules are framed in exercise of powers under Section 9A of the Customs Tariff Act, 1975, which provide for imposition of anti dumping duty
The judgment was delivered by a Division Bench of Justices S Manikumar and Subramonium Prasad in a writ appeal filed by Saint Gobain India Pvt Ltd against anti dumping duty imposed on imports of glass from Pakistan
The Centre had issued a notification on December 11, 2014 fixing the anti-dumping duty at US dollar 123.6 per metric tonne for import of float glass from Pakistan. This was done under Rule 17 of ADD Rules, which deals with original investigation of anti-dumping. The investigation under this rule has to be completed within a period of one year from the date of initiation, which can be extended further by a period of six months.
Rule 22 of the ADD deals with 'New Shipper Review', by which it is investigated whether any other exporter, who was not subjected to original investigation under Rule 17, has dumped goods into India. The purpose of the investigation is to verify whether margin duty of dumping should be imposed on those exporters, who have exported to India after the period of original investigation.
Tariq Glass Industries Limited in Lahore, Pakistan, filed an application to review the duty fixed for export of its float glass.
The application was considered under rule 22 of the ADD by the authority concerned which decided to initiate the new shipper review with regard to the import of the glass from Tariq and the period of investigation was fixed between July 1, 2015, and March 31, 2016.
However, the investigation by Directorate General of Anti-Dumping and Allied Duties, under the Union Ministry of Commerce, did not get over by March 2016.
Following this, Saint Gobain, a manufacturer in India, submitted various representations contending that the final notification should not be issued since the time-limit for the review was over. It also questioned the jurisdiction of the designated authority to continue the probe beyond the time-limit.
However, on April 10, 2017 the Union Ministry of Commerce issued the notification after rejecting the application of Saint Gobain, imposing anti dumping margin duty at the rate of 23.54 USD per MT.
Aggrieved, Gobain had approached the high court and a single judge on November 6, 2017 upheld the government notification. The single judge, Justice T S Sivagnanam, held that Rule 22 did not specifically mention any time limit. Holding that the time limit under Rule 17 should be read into Rule 22 would mean that Court is rewriting the Rules, held Justice T S Siavganam.
Conclusions of Division Bench.
In the appeal filed by Saint Gobain against the single judge's judgment, the Division Bench examined the ADD Rules in the light of GATT.
It was noted that the process of investigation in case of original investigation and in case of investigation under Rule 22 is the same. Though Rule 22 is called periodical review, it actually is a fresh look at those exporters, who have not exported during the period, when the original investigation was going on.
Article 9.5 of GATT deals with Imposition and Collection of Anti Dumping Duties. Rule 9.5 deals with the situation as specified in Rule 22. A perusal of Clause 9.5 of GATT and the reply given by India during international deliberations would show that Review under Article 22 has to be done on an accelerated basis compared to the original review.
The Hon'ble Supreme Court in the decision Commissioner of Customs, Bangalore Vs. G.M.Exports and Ors has categorically held that "when India is a signatory nation to an International treaty, and a statute is made to enforce a treaty obligation, and if there be any difference between the language of such statute and a corresponding provision of the treaty, the statutory language should be construed in the same sense as that of the treaty, for the reason that in such cases what is sought to be achieved by the International treaty is a uniform International Code of Law which is to be applied by the Courts of all the signatory nations in a manner that leads to the same result in all the signatory nations".
It was also noted that the CETSTAT Principal Bench had ruled in H & R Johnson (India) Limited Vs. Designated Authority that fixing longer period for new shipper review than original investigation "would be like spreading a red carpet to manipulations by projecting figures during the prospective period of review so tailored as to bring about a dumping margin favourable to the new shipper who can then be a conduit pipe for flowing exports of other exporters and producers whose exports would otherwise have been subjected to the existing anti-dumping duty".
"A perusal of the Clause 9.5 of GATT and the stand of the Country to specific questions posed to it would indicate that the Government had expressed categorically that the procedure under Rule 22 would be an accelerated review definitely to indicate that it should take lesser time compared to the original investigation. Viewed in this light, the Courts would have to read into Rule 22. The period within which the exercise under Rule 22 should be completed. The Court cannot interpretate Rule 22 in such a way that there is no time period fixed for the purpose of carrying out the exercise in Rule 22", observed the Court, upon undertaking purposive interpretation of the Rule.
"Keeping in view the spirit of GATT, to which India is a signatory and the stand which India has taken in answering various questions. If the time taken in review under 22 is longer than the original investigation, then this would allow the foreign exporter to dump its goods into India, on the basis of provisional assessment, to the detriment of the Indian Domestic Industry. The exporter can manipulate his prices and create documents, if the period for investigation, under Rule 22 is not shorter than the original investigation and the very purpose of imposing Anti-Dumping duty will be lost", noted the judgment of Division Bench authored by Justice Subramonium Prasad.
The Court ruled that time limit for completing the New Shippers Review must be read into Rule 22 of ADD Rules. The appeals were allowed and the duty imposed was set aside.