The finance ministry has amended the Anti-dumping Rules to discourage those who try to get around them. Provisions have also been made to determine and refund amounts collected in excess of the margin of dumping.
The duty is levied to protect domestic producers from predatory pricing policies by foreign exporters. The idea is to make the imports expensive enough to deny the advantage of dumping or offset the material injury that dumped imports cause. Although the duty is meant to be exporter-specific, the notifications, issued after due investigations and recommendations by the ‘Designated Authority’, usually specify the product, country of origin, exporting country and duty amount to be levied. Some importers try to circumvent the duty by importing the dumped goods in unassembled form or by changing the nomenclature, or by routing the goods through third countries where cosmetic processes are carried out.
In the case of Jama Corporation [2011 (265) ELT 106 (Tri.Mumbai)], the Customs alleged the importer had imported injection moulding machines covered under the classification 84771000 by describing these as footwear manufacturing machinery under 8453. In the case of Samay Electronics [2009 (235) ELT 284 (Tri.Mumbai), the Customs found the imports were compact fluorescent lamps in semi-knocked down condition that required only soldering, inspection and testing. In a similar case [2009 (234) ELT 370 (AAR)] of imports of flashlights/torches in semi/completely knocked down condition, the importer, Paradise International, tried to seek an Advance Ruling, after the Customs had initiated proceedings. In the case of Surabhi Supreme Marbles & Granites [2007 (219) ELT 377 (Tri.Bang)] earth bricks were brought to Sri Lanka, where processes such as cleaning, calibration, polishing, squaring, finishing and sorting were carried out before importing into India. All these cases related to Chinese goods that attracted anti-dumping duty.
The latest amendments say any assembly, finishing or completion of dumped goods imported in unassembled, unfinished or incomplete form that gives less than 35 per cent value addition is to be considered circumvention of anti-dumping duty in force. Similarly, if any dumped article is subject to any alteration of the description, name or composition, even in minor form, regardless of change in classification, the process will amount to circumvention. Also, for dumped goods imported through third countries, any change in trade practice, trade pattern or channels of trade will amount to circumvention. These changes are intended to deter importers from undermining the remedial effects of anti-dumping duty.
The Anti-dumping Rules say if the final duty is higher than the provisional one, the importer need not pay the difference but if it is lower, he can ask to refund the excess paid. Also, if duty is withdrawn after final findings, what had been levied on the basis of provisional findings may be refunded. The latest amendments say if the importer claims he has paid any anti-dumping duty in excess of the margin of dumping, at his request, the Designated Authority can investigate, determine and recommend the amount to be refunded. The procedures, time limits, etc, for refund are prescribed in the new Rules for refund of duty paid in excess of the actual margin of dumping. These refunds will also be subject to the bar of unjust enrichment, as usual.
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