Holding

The Supreme Court held that the Designated Authority’s categorical finding that anti‑dumping duty applies only to SBR classified under sub‑heading 4002.19 is correct, and the Tribunal’s finding of a clerical omission extending the duty to heading 3903.90 and its conversion of duty into US dollars were erroneous and set aside.

Summary

Synthetics and Chemicals Ltd filed an anti‑dumping petition alleging that imports of Styrene Butadiene Rubber (SBR) from several countries were injuring the domestic industry. The Designated Authority (DA) investigated, classified the imports under custom sub‑heading 4002.19, and recommended anti‑dumping duties which the Government imposed. Rishiroop Polymers Pvt. Ltd., representing a Korean exporter, appealed to the Customs, Excise and Gold (Control) Appellate Tribunal, which upheld the duties but also held that, as a clerical omission, the duty should apply to all grades of SBR including those under heading 3903.90 and converted the duty into US‑dollar terms without a request. The Supreme Court examined whether the domestic industry suffered injury, whether the Tribunal correctly interpreted the DA’s finding on the scope of duty, and whether the conversion to US dollars was permissible. The Court confirmed the DA’s finding of injury, held that the DA’s finding that duty applies only to SBR under 4002.19 was categorical and not a clerical error, set aside the Tribunal’s extension to heading 3903.90 and its conversion of duty into dollars, and restored the DA’s order in rupee terms. The appeals were allowed in part.

Issues considered

Did the domestic industry suffer material injury and a causal link with dumped imports of SBR, justifying anti‑dumping duty?
Whether the Tribunal erred in holding that the Designated Authority intended the anti‑dumping duty to apply to all grades of SBR, including those classified under heading 3903.90, as a clerical omission.
Whether the Tribunal could, on its own motion, convert the anti‑dumping duty from rupee to US‑dollar terms without a prayer from the parties.
Whether a variable anti‑dumping duty greater than the dumping margin could be imposed.

Legislation cited

Customs Tariff Act, 1975s. (2)

Subjects

anti‑dumping dutycustoms classificationinjury assessmentclerical omissiontribunal jurisdictionSBRconversion of dutyvariable dutydumping margin

Judgment

A RISH IROOP POLYMERS PVT. LTD.
v.
DESIGNATED AUTHORITY AND ADDL. SECRETARY AND ORS.

MARCH 23, 2006

B [ASHOK BHAN AND G.P. MA THUR, JJ.]

Customs Tariff Act 1975-Schedule /, Sub-headings 3903.90 and
4002.19-Anti-dumping Dut)i on Foreign Articles-Interference by Tribunal-
C Scope of--Designated Authority (DA) initiating anti-dumping investigation
concerning import of SBR classified under Tariff Entry 4002.19 and
recommending imposition of anti-dumping duty thereon-Government issuing
a notification imposing duty-DA recording a firm finding that SBR falling
under heading 3903. 90 not covered for the purpose of imposing duty-Held,
Tribunal erred in holding on its own motion that DA wanted to impose duty
D on all grades of SBR falling under sub-heading 4002 or 3903 --Tribunal's
finding that anti-dumping duty leviable on SBR falling under sub-heading
3903, set aside.

Respondent 3 filed an Anti Dumping Petition before the Designated
Authority (DA) against the imports of SBR alleging therein that the import
E of SBR from the subject countries was causing injury to the domestic
industry manufacturing SBR in India. He furnished details regarding the
normal value of the products in the subject countries and the margin of
dumping. DA initiated anti dumping investigation against the subject
countries concerning imports of SBR classified under custom sub-heading
F 4002.19 of schedule I during 1.4.1996 to 31.8.1997. DA ultimately
recommended imposition of anti dumping duty. Government accepted the
findings and issued a notification imposing anti dumping duty on import
of SBR falling under Tariff Entry 4002.19.

Appellant's appeals to the Tribunal were rejected except to the extent
G of holding that variable anti-dumping duty greater than the dumping
margin not be imposed. However Tribunal opined that a fixed duty on all
grades of SBR falling under sub-heading 4002.19 as well as 3903.90 be
imposed as confining of imposition of anti-dumping duty by DA only to
SBR falling under Heading 4002.19 was a clerical omission requiring
-
correction.
H 276
RISHIROOP POLYMERS PVT. LTD. r. DESIGNATED AUTHORITY AND ADDI. SECTY 277
Appellant preferred appeals to this Court. A
Party allowing the appeals, the Court

HELD: I. Having gone through the confidential records produced
before the Court and the data for the years 1995-96 and 1996-97 the court
was satisfied that the domestic industry suffered drastic decline in all the B
relevant parameters during the period of investigation compared to those
of the immediately preceding Financial Year 1995-96. The Court found
no justification to take a view other than what had been taken by the
Designated Authority and the Tribunal. Accordingly, the findings recorded
by the Designated Authority as well as by the Tribunal on this point are C
confirmed. (282-C-D)

2. Tribunal after noticing the observations of the Designated
Authority in para 7 of its order 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. However the findings recorded by D
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 E
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 F
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 G
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. ·
(282-G; 283-B; 284-G, H; 285-A-C) H
278 SUPREME COURT REPORTS [2006] 3 S.C.R.

A CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 774-775 of
2001.

From the Final Order No. 21/2000-AD and Corrigendum Misc. Order
No. 112000-AD in C/332/99-AD with C/Stay/1383/99-AD dated 2.2.2000 of
the Customs, Excise and Gold (Control) Appellate Tribunal, New Delhi.
B
R. Parthasarathy, S. Seetharaman, Jay Savla and Ms. Reena Bagga for
the Appellant.

K. Radhakrishnan, Rudreshwar Singh, T.A. Khan, P. Parrneswaran,
Amit Tiwari, V.K. Verma, L.P. Asthana, Arun K. Sinha, Rakesh Singh,
C Ms. Mausmi Saikia and Mukesh Sinha for the Respondents.

Ajit Kumar Sinha and V. Balachandran for the Applicant/Intervenor

The Judgment of the Court was delivered by

D 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
E 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.

F The appellant 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
G 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
H
RISHIROOP POLYMERS PVT LTD. '· DESIGNATED AUTHORITY AND ADDI. SECTY. [BHAN. J.] 279

Act") against the imports of SBR originating in or exported from Japan, A
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 ~ubject countries
and the margin of dumping. It was alleged that as a result of the dumped B
imports ofSBR the domestic industry, namely, Respondent No.3, was incurring
heavy losses on its SBR 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 C
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.
D
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 E
Authority for 17 months, i.e., from !st 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 ofSBR originating from the subject countries. The Designated Authority F
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: G
(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;
·H
(c) Causal link between dumping and injury was established.
280 SUPREME COURT REPORTS (2006] 3 S.C.R.

A By Gazette Notification No. 421, the Ministry of Finance, issued a
Notification No. I07 /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.
B 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 a/ia, as to the issues of normal value dumping
margin, injury causal link in the context of domestk industry and like articles.
During the course of arguments, as noted by the Tribunal in paragraph 4 of
C its order, counsel appearing for the appellant did not urge 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
D 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
E 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 offebruary,
2000 and communicated to the appellant on 21st February, 2000), anti-
dumping duty was also imposed in respect of the 1900 series of SBR.
F 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:
G
" ...... 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
H loss in the profitability on the manufacture of SBR and in relation to
RI SHI ROOP POLYMERS PVT.LTD.''· DESIGNATED AUTHORITY AND ADDI SECT\' [BHAN, J.] 281
average realization. On going through those data we are convinced A
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)
B
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 c
Dumping duty is on all grades of SBR, whether falling under sub-heading
4002 or 3903. 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 D
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 E
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 Tribunpl in para 12 of the impugned order has
held that the injury assessment by tl\e 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 F
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; G
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.
H
282 SUPREME COURT REPORTS (2006] 3 S.C.R.

A 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
B 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
C 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 well as by
D 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
E 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."

F Tariff Entry 40.02

"Synthetic rubber and factor derived from oils, in primary forms or
in plates, sheets of strip; mixtures of any product of heading No.40.01
with any product of this heading, in primary forms or in plates, sheets
or strip."
G
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
H imposing anti-dumping duty in present case the anti-dumping duty
RI SHI ROOP POLYMERS PVT.LTD., .. DESIGNATED AUTHORITY AND ADDI. SECTY. (BHAN. J.) 283
however is payable on Styrene Butadiene Rubber of specified series A
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 B
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 C
or 3903.90. That the Customs Authorities have to i~pose 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: D
"The Authority observes that items falling under 3903.90 are not
product unde; consideration and SBR in I 000 series is not produced
by the petitioner and thus are not product under consideration."

Para 7 of the final finding of the Designated Authority reads thus: E
"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 F
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 G
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 H
284 SUPREME COURT REPORTS (2006] 3 S.C.R.

A 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.
B lt 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
c 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 jailing under sub-heading 3903.90 for the
purpose of imposing anti-dumping duty.
D
However, the Authority agrees with the 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
E anti-dumping duty in present case the anti-dumping duty however is
payable on Styrene Butadiene Rubber of specified series as slated
even if it is sought to be cleared under any other heading of the
Custom Tar/ff. Act. The Custom Authority is at liberty and expected
to classifY the goods correct if the goods offered for clearance are
F nut 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
G 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
H Custom Heading 4002.19 only; that Chapter 39 covers "Plastic and Articles
RISHIROOP POLYMERS PVT.LTD."· DESIGNATED AUTHORITY AND ADDI SECTY. [BHAN. J.] 285

thereof' whereas Chapter 40 covers "Rubber and Articles thereof' Styrene A
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 B
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. C

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 D
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-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 tenns. E
Accordingly, these appeals are allowed partly to the extent indicated
above. No costs.

v.s.s. Appeals allowed.