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CASE NO.: Appeal (civil)  774-775 of 2001

PETITIONER: Rishiroop Polymers Pvt. Ltd.

RESPONDENT: Designated Authority & Additional Secretary & Ors.

DATE OF JUDGMENT: 23/03/2006

BENCH: ASHOK BHAN & G.P. MATHUR

JUDGMENT: J U D G M E N T

Bhan, J.

The present appeals have been filed with the  leave of the Court against the final order No.  21/2000-AD and Corrigendum Miscellaneous Order  No.1/2000-AD in C/322/99-AD with C/Stay/1383/99-AD  dated 2nd February, 2000 and 3rd February, 2000  passed by the Customs, Excise & Gold (Control)  Appellate Tribunal, New Delhi (for short "the  Tribunal").  By the order dated 2nd of February,  2000, the Tribunal rejected the appeals filed by  the appellant except to the extent that it held  that variable anti-dumping duty greater than  dumping margin could not be imposed.  The order  dated 3rd of February, 2000 is merely a Corrigendum  correcting the clerical mistake in the order  No.21/2000-AD dated 2nd February, 2000.    

The appellant \026 Rishiroop Polymers Private  Limited is the authorised exclusive Intending  Agents and Representatives of Messrs Korea Kumho  Petrochemials Company Limited (KKPC), Republic of  Korea for the sale of their products, namely,  Styrene Butadiene Rubber (SBR) and other products.   The appellant has been authorised by KKPC under an  authorization dated 6th May, 1998 to appear and  plead on their behalf.  The present appeals have  been filed by the appellant in its capacity as an  interested/aggrieved party and as also the  representatives of KKPC.   

Synthetics and Chemicals Limited (respondent  no.3 herein) filed an Anti Dumping Petition on 9th  of September, 1997 before the Designated Authority  appointed under the Customs Tariff Act, 1975 (for  short "the Tariff Act") against the imports of SBR  originating in or exported from Japan, Korea,  Turkey, Taiwan, USA, Germany and France.  It was  alleged therein that the import of SBR from the  subject countries was causing injury to the  domestic industry manufacturing SBR in India.   Respondent No.3 furnished details regarding the  normal value of the products in the subject  countries and the margin of dumping.  It w\as  alleged that as a result of the dumped imports of  SBR  the domestic industry, namely, Respondent  No.3, was incurring heavy losses on its SBR

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activity.  It was further alleged that in spite of  the  cost of production in the subject countries,  exporters from there were reducing their export  price consistently which has forced the domestic  industry to reduce its selling price of various  grades of SBR.  That the selling price realised by  the domestic industry is so low that it is unable  to recover even the cost of production.  That the  dumped materials had retarded the growth of  domestic industry in spite of installation of new  plant and machinery.  The expansion programme could  not be commissioned as the dumped imports  threatened to cause injury for future also due to  sufficient freely disposable production capacity in  the subject countries.

The Designated Authority, on the basis of the  application filed by Respondent No.3, initiated  anti-dumping investigation against the subject  countries concerning imports of SBR classified  under custom sub-heading 4002.19 of Schedule I of  the Tariff Act, originating in or exported from the  subject countries.  The period of investigation was  fixed by the Designated Authority for 17 months,  i.e., from 1st April, 1996 to 31st August, 1997.

The Designated Authority on the basis of the  material collected, published its preliminary  findings as per Notification dated 21st January,  1999.  By the said Notification anti-dumping duties  were imposed on different grades of SBR originating  from the subject countries.  The Designated  Authority further invited details and comments from  all interested parties including the exporters from  the subject countries.  The Designated Authority  submitted its final findings which were accepted by  the Government of India, Ministry of Commerce and  accordingly issued a Notification of final  findings.  By the said final findings, the  Authority had concluded that: (a)     SBR had been exported from Japan, Korea  R.P., Turkey, Taiwan, USA, Germany and  France to India below its normal value  resulting in dumping of SBR; (b)     The domestic industry has suffered  material injury; (c)     Causal link between dumping and injury  was established. By Gazette Notification No. 421, the Ministry  of Finance, issued a Notification No.107/00-Cus  dated 24th August, 1999 in exercise of powers  conferred by sub-section (2) of the Tariff Act,   notifying the final anti-dumping duty on the basis  of the recommendations in the final findings dated  2nd of June, 1999.

The appellant being aggrieved, filed appeals  before the Tribunal against the final findings  dated 2nd of June, 1999.  In the Memorandum of  Appeals, grounds were taken, inter alia, as to the  issues of normal value dumping margin, injury  causal link in the context of domestic industry and  like articles.  During the course of arguments, as  noted by the Tribunal in paragraph 4 of its order,  counsel appearing for the appellant did not urge

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any ground other than that domestic industry has  not suffered injury on account of import of SBR  from  the subject countries and that there was no  causal link between the injury and import from the  subject countries.  Accordingly, the Tribunal did  not go into the question as to whether the fixation  of normal value and dumping margin of articles  imported from the subject countries was correct or  not.  The Tribunal also did not go into the  question as to whether the normal selling price   fixed by the Designated Authority was correct.  The  Tribunal by the impugned order rejected the appeals  except to the extent that variable anti-dumping  duty  greater than the dumping margin could not be  imposed.  As opposed to the variable duty imposed  by the final findings, the Tribunal imposed fixed  duties.  Tribunal imposed fixed duty in respect of  1500 and 1700 series of SBR imported from Korea  Kumho.  By a Corrigendum Miscellaneous Order No.  1/2000-AD (which was certified on 16th of February,  2000 and  communicated to the appellant on 21st  February, 2000), anti-dumping duty  was also  imposed in respect of the 1900 series of SBR.

The submission of the counsel appearing for the  appellant that the Designated Authority while  assessing injury to the domestic industry in case  of certain parameters, had taken into consideration  the data relating to the year immediately preceding  the period of investigation was rejected by the  Tribunal by observing, thus: "...... Even though data for 1994-95  was also noted in the work-sheet,  assessments were made based on the  data relating to the year 1995-96  only.  Compared to 1995-96 there was  noticeable increase in stock of  various grades of SBR with the  domestic industry; that there was  considerable increase of imports from  subject countries; there was loss in  the profitability on the manufacture  of SBR and in relation to average  realization.  On going through those  data we are convinced that the  domestic industry suffered drastic  decline in all the relevant parameters  during the period of investigation  compared to those of the immediately  preceding financial year, namely,  1995-96.                                 (emphasis  supplied)

Another finding recorded by the Tribunal was  that "the Designated Authority wanted to impose  anti-dumping duty on all grades of Styrene  Butadiene Rubber irrespective of whether it is put  under Heading 3903 or 4002.  But while concluding  the final finding, anti dumping duty has been  imposed on SBR falling under sub-heading 4002.19  only.  This is a clerical omission which is  required to be corrected.  Thus, we make it clear  that Anti Dumping duty is on all grades of SBR,  whether falling under sub-heading 4002 or 3903.  

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Customs Authorities have to impose duty on all  types of SBR, irrespective of their  classification."

Learned Counsel appearing for the appellant did  not put a challenge to the finding recorded by the  Tribunal as regards the causal link between injury  suffered by the domestic industry on account of  import of SBR from the subject countries.

Learned counsel appearing for the appellant put  forth three-fold submissions.  Firstly, that the  Designated Authority while assessing injury to the  domestic industry in case of certain parameters,  had taken into consideration the data relating to  the year immediately preceding the period of  investigation whereas the Tribunal in para 12 of  the impugned order has held that the injury  assessment by the Designated Authority was based on  the data relating to the year 1995-96 only.   According to him, finding recorded by the Tribunal  was factually incorrect.  The second submission  relates to the imposition of duty on products  falling under Tariff Entry 3903.90 by the Tribunal.   It was submitted that against the finding recorded  by the Designated Authority that the products in  question fell under heading 4002.19, neither the  Union of India nor Respondent No.3 or any other  interested party had filed appeal or objections to  the finding recorded by the Designated Authority;   that the Tribunal had come to this conclusion suo  motu and hence this portion of the order was liable  to be set aside.  The third and the last argument  deals with the point that the Tribunal has  converted the duty imposed in US dollar term from  the rupee value term without there being any  appeals/prayer either by the Union of India or any  other interested party.

We do not find much substance in the submission  relating to the first point.  The Tribunal in its  order has noted  that even though data for the year  1994-95 was also noted in the work-sheet,  assessment was  based on the data relating to the  year 1995-96 only.  In order to satisfy ourselves,  we sent for the original confidential file.  After  going through the same, we find that though data  for 1994-95 was noted by the Designated Authority  in the work-sheet, but the assessment was made on  the basis of the data relating to the year 1995-96  only.  Compared to 1995-96 there was considerable  increase in the stock of various grades of SBR with  the domestic industry.  There was a loss in the  profitability in the manufacture of SBR in relation  to the average realization.  Having gone through  the confidential records produced before us and the  data for the years 1995-96 and 1996-97, we are  satisfied that the domestic industry suffered  drastic decline in all the relevant parameters  during the period of investigation compared to  those of the immediately preceding Financial Year  1995-96.  We find no justification to take a view  other than what has been taken by the Designated  Authority and the Tribunal.  Accordingly, the  findings recorded by the Designated Authority as

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well as by the Tribunal on this point are  confirmed.   

Coming to the second point, it may be noted  that the subject under consideration by the  Designated Authority was "Styrene Butadiene  Rubber".  Chapter 40 of the Tariff Act deals with  "Rubber and Articles thereof".  Tariff entries  40.01 and 40,02 read as follows:  Tariff Entry 40.01 "Natural Rubber, balata, gutta percha,  Guayule, chicle and similar natural  gums, in primary forms or in plates,  sheets or strip." Tariff Entry 40.02 "Synthetic rubber and factor derived  from oils, in primary forms or in  plates, sheets of strip; mi\xtures of  any product of heading No.40.01 with  any product of this heading, in  primary forms or in plates, sheets or  strip."

Tribunal after noticing the following  observations of the Designated Authority in para 7  of its order: "The Authority thus holds that whereas  it is not justified to cover all items  falling under the sub-heading 3903.90,  for the purpose of imposing anti- dumping duty  in present case the  anti-dumping duty  however is payable  on Styrene Butadiene Rubber of  specified series as stated, even if it  is sought to be cleared under any  other heading of the Custom Tariff  Act.  The Custom Authority is at  liberty and expected to classify the  goods correctly, if the goods offered  for clearance are not classified  correctly."

held \that the Designated Authority wanted to  impose anti-dumping duty  on all grades of SBR  irrespective of whether it fell under heading 39.03  or 40.02.  The Designated Authority imposed the  anti-dumping duty  on the SBR falling in sub- heading 4002.19 only which was a clerical omission  and required to be corrected.  Accordingly, the  Tribunal held that anti-dumping duty was liable to  be imposed on all grades of SBR falling under sub- heading 4002.19 or 3903.90.  That the Customs  Authorities have to impose duty on all types of SBR  irrespective of their classification.  After going  through the order of the Designated Authority and  the Tribunal, we are of the opinion that the  Tribunal has quoted and relied upon the observation  of the Designated Authority in paragraph 7  reproduced above, out of context.  The Designated  Authority in paragraph 5 of its order observed,  thus: "The Authority observes that items  falling under 3903.90 are not product  under consideration and SBR in 1000  series is not produced by the

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petitioner and thus are not product  under consideration."

Para 7 of the final finding of the Designated  Authority reads thus: "The Authority observes that, in the  preliminary findings it was inter-alia  held that product under consideration  in the present investigation is  Styrene Butadiene Rubber (SBR)  originating in or exported from the  subject countries classified under  Custom sub-heading 4002.19 of the  Custom Tariff Act which was explained  at para 5 of the preliminary findings  dated 21st January, 1999.  The  Authority had inter alia held that  product under consideration is SBR of  1500 series, 1700 series and 1900  series under Custom sub-heading  4002.19 of Custom Tariff Act.  None of  the interested parties has raised any  argument in this regard and therefore  the Authority confirms it preliminary  findings in this regard. The Authority notes that petitioner is  claiming that SBR is also being  cleared under custom chapter 39 Entry  no.3903.90 (polymers of styrene in  primary forms) and therefore the anti- dumping duty  should be imposed under  this head also.  On the contrary it is  argued by exporter and importer that  chapter 39 relates to plastic and does  not cover SBR and therefore duty  should not be imposed on products  covered under chapter 39 Entry no.  3903.90.  The Authority observes that  chapter 39 covers "Plastic & Articles  Thereof" whereas chapter 40 covers  "Rubber & Articles Thereof" Styrene  Butadiene Rubber as the name suggest  is a synthetic rubber and is covered  under chapter 40.  It is also observed  that as per note no. 2(h) of chapter  39, the synthetic rubbers and articles  thereof which are covered under  chapter 40, do not fall under chapter  39.  It is also observed that while  giving the import statistics, the  petitioner had submitted information  in respect of custom heading  No.4002.19 only.  While submitting the  evidence that SBR 1900 series is also  being imported under chapter 39, the  Authority observes that the items  cleared under chapter 39 is "Elastomer  Resin KHS 68" and thus is  not under  the nomenclature of "Synthetic  Rubber".  In view of this, the  Authority does not find justification  to cover item falling under sub- heading 3903.90 for the purpose of  imposing anti-dumping duty. However, the Authority agrees with the

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argument of the petitioner to the  extent that product under  consideration is styrene butadiene  rubber of specified series as stated  irrespective of custom heading.  The  Authority thus holds that whereas it  is not justified to cover all items  falling under the sub-heading 3903.90  for the purpose of imposing anti- dumping duty in present case the anti- dumping duty however is payable on  Styrene Butadiene Rubber of specified  series as stated even if it is sought  to be cleared under any other heading  of the Custom Tariff Act.  The Custom  Authority is at liberty and expected  to classify the goods correct if the  goods offered for clearance are not  classified correctly."                                                 (Emphasis supplied) The findings recorded by the Designated  Authority in para 7 of its order clearly indicate  that the Designated Authority did not intend to  cover SBR which was being imported under sub- heading 3903.90 for the purpose of imposing duty;  what the Designated Authority held was, that if the  goods were being imported by wrongly classifying  them under sub-heading 4002.19, then the Customs  Authorities are at liberty and expected to classify  the goods correctly.  It was held by the Designated  Authority that while giving the import statistics,  Respondent No.3 had submitted information in  respect of Custom Heading 4002.19 only; that  Chapter 39 covers "Plastic and Articles thereof"  whereas Chapter 40 covers "Rubber and Articles  thereof" Styrene Butadiene Rubber, as the name  suggests, is a synthetic rubber and would be  covered under Chapter 40 and not 39;  that as per  note no. 2(h) of Chapter 39, synthetic rubbers and  articles thereof, which are covered under Chapter  40, do not fall under Chapter 39.  The Designated  Authority had recorded a firm finding that  "Elastomer Resin KHS 68" was not covered for the  purpose of imposing duty.  The finding recorded by  the Designated Authority was categorical and not a  clerical omission, as has been observed by the  Tribunal.  It was not correct on the part of the  Tribunal to hold on its own motion that "this is a  clerical omission which is required to be  corrected."  Finding recorded by the Tribunal in  this respect deserves to be set aside.  We do so.   Finding recorded by the Designated Authority in  this respect is restored.

Dealing with the penultimate argument, it may  be stated that the Designated Authority had imposed  the duty in rupee value but the Tribunal converted  the same in US dollar terms, without there being  any prayer for such conversion by either of the  parties.   Learned counsel appearing for the  Department conceded that the Tribunal was not  justified in converting the anti-dumping duty in US  dollar terms and, after taking instructions, stated  that he has no objection to the setting aside of  the order passed by the Tribunal in imposing anti-

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dumping duty in terms of US dollars and to the  restoration of the order passed by the Designated  Authority in imposing the anti-dumping duty in  rupee terms.

Accordingly, these appeals are allowed partly  to the extent indicated above.  No costs.