Retrospective levy of definitive Anti-Dumping Duty - Board approves Tribunal (favourable) order
Normally Anti Dumping duty which the Board fondly calls ADD is imposed on a provisional basis and later based on investigations and recommendations of the Designated Authority a final definitive ADD is imposed. The provisional ADD is valid only for a period of six months which may be extended for another three months. The Designated Authority is required to give his findings within one year by which time the provisional ADD must have lapsed. If the DA recommends a definitive ADD and the government imposes it, what happens during the period when three was no ADD, not even a provisional one?
Let us take a live example of a recent case
ADD was imposed provisionally on 02.05.2002 and was to be effective up to first day of November 2002. On 1.5.2003, a notification was issued imposing the final duty w.e.f the date of provisional duty that is 2.5.2002. The appellant's contention before the Tribunal was that the final duty could not have been levied retrospectively by the notification issued on 01.05.2003; it was undisputed that no provisional duties were ever levied for the period starting from 02.11.2002 till 30.04.2003 and therefore the applicability of anti-dumping duty during the “interregnum period” from 02.11.2002 to 30.04.2003, when there was no provisional duty, was not warranted.
The Tribunal was not impressed and it found the contention misconceived
The Tribunal reasoned that if there was no ADD during the intervening period between the lapsing of the provisional ADD and the imposition of the final ADD, it would be a clear licence to dump the products with impunity during that period. The Tribunal further reasoned that "It could not be the intention of the legislature that despite the determinations of margin of dumping and injury reached at the provisional findings which have come to be finally confirmed, there should be allowed a long period of freely injurious dumping so as to destroy the domestic industry for the protection of which the statutory provisions are enacted and the provisional anti-dumping duty was imposed." please see ().
We carried this judgement on 23rd December 2005 and exactly a month later to the date, on 23rd January 2006; Board has issued a circular accepting the Tribunal's order. Of course Board had reasons other than the Tribunal's logic to go by, for one, a favourable opinion from the Law Ministry. The Board has also expressed its solidarity with the Law Ministry when the circular says, in the matters of interpretation of Law or Statute, opinion of the Law Ministry would prevail over any other technical opinion. (What is the great difference between law and statute?)
The Law Ministry examined the issue and opined,
++ It is well settled that the Rules are to be so interpreted as to promote the object of the Act – ut res magis valeat quam pereat (What is this? This concept is explained in today's Greek and Latin.)
++ Further a harmonious reading needs to be given to the various Rules.
++ Furthermore, the Rule cannot limit the operation of the Act. The Act has not created any such limitation as suggested as it would have created a gap between the periods of imposition of anti-dumping duty.
++ Section 9(2) and the word “from” in Rule 20(2) (a) leave no doubt as to the Government’s capacity to impose final anti dumping duty ‘from’ the date of imposition of the provisional duty without any break thereafter.
++ Finally determined anti-dumping duty is payable from the date of imposition of provisional duty even after six months of the provisional duty.
Armed with the Law Ministry's opinion endorsed by the Tribunal, Board clarifies that in cases where finally determined anti dumping duty is imposed with a retrospective effect from the date of imposition of provisional anti-dumping duty, then the final antidumping duty would be payable even for the interregnum period subsequent to the expiry of the provisional duty period.
CIRCULAR NO. , Dated: January 23, 2006