MANU/DE/2602/2007 Equivalent Citation: 2007(122)ECC121, 2007(148)ECR121(Delhi), 2008(222)ELT161(Del) IN THE HIGH COURT OF DELHI Writ Petition (Civil) Nos.

70-71/2004 Decided On: 09.10.2007 Appellants: Essar Steel Limited and Anr. Vs. Respondent: Union of India (UOI) Hon'ble Gita Mittal, J. Judges:

Counsels: For Appellant/Petitioner/Plaintiff: Krishan Venegopal and Prasad Vijay Kumar, Advs Meenakshi Arora, Jay Savla and Reena Bagga, Advs Subject: Customs Acts/Rules/Orders: Customs Tariff Act, 1995 - Section 14; Customs Tariff Act, 1973; Customs Tariff (Amendment) Act, 1975 Section 9A and 9A(5); Foreign Trade (Development and Regulation) Act, 1962 - Section 5; Companies Act - Section 237; Income Tax Act - Section 132, 132(5), 132(11) and 132(12); Constitution of India - Article 226; Customs Tariff (Identification, Assessment and Collection of Anti Dumping Duty on Dumped Article and for Determination of Injury) Rules, 1995 - Rules 4, 5, 5(5), 6, 6(4), 6(7), 6(8), 7, 7(2), 10, 11, 12, 14, 17(1) and 18(2) Case Note: Customs - Anti-Dumping - Termination of Investigation - Section 14(b) of the Customs Tariff Act, 1995 - Rules 5, 6(ii), 6(iv), 14 Customs Tariff (Identification, Assessment of Anti Dumping Duty on Dumped Article and for Determination of Inquiry) Rules, 1995 - Petitioner manufacturer of steel and steel products complained that certain countries dumping their products in India causing injury to domestic industry - Designated Authority conducted investigations - Investigation was terminated by office Order - Hence, present petition Petitioner contended that Designated Authority committed a patent error of taking into account undumped imports from the subject countries - Further it was contended that finding was based on facts available under Rule 6(8) - Whether the investigation can be terminated in the course of investigation - Whether the impugned Order dated 27th August 2003 was vocative of principle of natural justice - Held, applicable Rules postulate that the enquiry may be terminated unless the countries which individually count for less than three per cent of the imports of the like project, collectively count for more than seven per cent of the import of the like project - Authority entitled to terminate the investigation if it determines that the injury where applicable is negligible - As per Sub-rule "b" of Rule 14 the Designated Authority may terminate the enquiry in the course of an investigation if there was no sufficient evidence of dumping, or injury where applicable, to justify continuation of the investigation - Impugned order not vocative of principles of natural justice as Petitioners were given adequate opportunity to place entire material on record by designated authority - Petition dismissed Ratio Decidendi: "If the Designated Authority during the course of investigation comes to the conclusion that there is no dumping or injury to the domestic industries, then it may terminate the enquiry."

JUDGMENT Gita Mittal, J. 1. By this writ petition the petitioners have laid a challenge to the order dated 27th August, 2003 passed by the Designated Authority in exercise of its powers under Section 14(b) of the Customs Tariff Act, 1995 and Customs Tariff (Identification, Assessment and Collection of Anti Dumping Duty on Dumped Article and for Determination of Injury) Rules, 1995 whereby the Designated Authority in the Directorate of AntiDumping in the Ministry of Commerce, New Delhi informed the petitioners of its decision to terminate antidumping investigation into imports of Hot rolled coils, Sheets, Plates and Strips originating in or exported from South Africa, Rumania, Venezuela, Saudi Arabia, European Union, Australia, Canada and Singapore. 2. Both the petitioners are stated to be engaged in the manufacture and production of steel and steel products. The Steel Authority of India, the petitioner No. 2 has claimed that it produces approximately 50% of India's steel, which has been disputed by the intervenor. 3. India has effectuated measures to protect the domestic industry following the principles laid down in the General Agreement on Tariffs and Trade, 1994 (GATT for brevity) whereby the member countries agreed on certain principles to be followed for imposition of anti-dumping duties, countervailing duties and safeguard measures. Member countries of the World Trade Organisation were party to this agreement. The legislature effected statutory amendments to the Customs Tariff Act, 1973 which were effectuated with effect from 1st January, 1995 to bring the statute in line with the provisions of Article 6 of GATT, 1994. Dumping, in simple language, takes place when an exporter sells a product to India at a price less than the price prevailing in its domestic market. Though dumping per se has been held not to be condemnable. However, if such dumping causes or threats to cause material injury to the domestic industry of India, the statute has prescribed certain measures to be taken. There is no dispute that the Designated Authority has been duly nominated by the Central Government in compliance with the requirements of the statute. 20. In order to determine the injury to domestic industry thereof the Designated Authority is required to ascertain the existence of a causal link between the dumped imports and effect, if any, on the price in the domestic market for like articles and the consequential effect of such imports on domestic producers of such articles in accordance with the principles set out in the annexures to the rules. Rule 12 enables the Designated Authority in an appropriate case to record preliminary findings with regard to the export price the normal value and the margin of dumping and in respect of imports from specific countries to record a further finding regarding injury to the domestic industry. 26. So far as the issue of the volume of imports from the subject countries is concerned, it is necessary to advert to Annexure II of the Customs Tariff (Anti Dumping Duty) Rules 1995 dealing with principles for determination of injury which reads thus: The Designated Authority while determining the injury or threat of material injury to domestic industry or material retardation of the establishment of such an industry hereinafter referred to as ``injury'` and casual link between dumped imports and such injury, shall inter alia, take following principles under consideration: (i) A determination of injury shall involve an objective examination of both (a) the volume of the dumped imports and the effect of the dumped imports on prices in the domestic market for the like article and (b) the consequent impact of these imports on domestic producers of such products. (ii) While examining the volume of dumped imports, the said authority shall consider whether there has been a significant increase in the dumped imports, either in absolute terms or relative to production or consumption in India. With regard to the effect of the dumped imports, on prices as referred to in Subrule (2) of Rule 18 the Designated Authority shall consider whether there has been a significant price under cutting by the dumped imports as compared with the price of like product in India, or whether the effect of such imports is otherwise to depress prices to a significant degree or prevent price increase which otherwise would have occurred, to a significant degree.