IMRAN TRADERS VS MINISTRY OF COMMERCE

2006 P T D 1446

[Lahore High Court]

Before Ali Nawaz Chowhan, J

IMRAN TRADERS

Versus

MINISTRY OF COMMERCE

Writ Petitions Nos. 708, 707, 706, 748, 749, 750, 751 and 582 of 2006, heard on 20th Mara, 2006.

Anti Dumping Duties Ordinance (LXV of 2000)---

----Ss. 24 & 27---General Agreement on Tariffs and Trade, 1994, Art.6---Constitution of Pakistan (1973), Art.199---Constitutional petition---Anti-Dumping duty, levy of---Object---Investigation---Power of Commission---Petitioners were importers of porcelain/ceramic tiles---Grievance of petitioners was that Government of Pakistan was contemplating to impose dumping duty against the tiles imported by them---Petitioners contended that the investigation had commenced in respect of their goods without following the provisions of S.27 of Anti-Dumping Duties Ordinance, 2000---Validity---Anti-Dumping Duties Ordinance, 2000, was inspired by Art.6 of General Agreement on Tariffs and Trade, 1994,. with a purpose of imposing duties to offset injurious dumping in public interest---Anti-dumping duty was only levied on the basis of investigation, which was envisaged by S.24 of Anti-Dumping Duties Ordinance, 2000---Commission could suo motu initiate investigation upon receipt of sufficient evidence and it might be also proceeded for the purposes of investigation and anti-dumping measures on application made by a third country---Authorities had fully assured that the provisions of :Anti-Dumping Duties Ordinance, 2000, would be fully followed and everybody would be notified if the investigation was to commence---Merely because the Commission was in receipt of certain information, did not mean that it had either suo motu or under S.24 of Anti-Dumping Duties Ordinance, 2000, or on application of a third party had initiated investigation because only such proceedings in investigation would be valid where the requirements of S.27 of Anti-Dumping Duties Ordinance, 2000, had been met as a prelude and not otherwise---No investigation having taken place, the petitioner should not be apprehensive of any adverse action under Anti-Dumping Duties Ordinance, 2000---Petition was disposed of accordingly.

Shafqat Mahmood Chohan for Petitioner.

Sikandar Bashir assisted by Mazhar Bangash, Legal Advisor for Respondent.

Date of hearing: 20th March, 2006.

JUDGMENT

ALI NAWAZ CHOWHAN, J.---This judgment shall dispose of the following Writ Petitions: 708 of 2006, 707 of 2006, 706 of 2006, 748 of 2006, 749 of 2006, 750 of 2006, 751 of 2006 and 582 of 2006.

2. The petitioners are importers of Porcelain/Ceramic Tiles and Sanitary wares. These goods are being imported from abroad including China to meet the requirements of the people of Pakistan. It is said that the sweep of the import is not beyond 20%. That the local producers are not producing enough of such goods and, therefore, even the, import to the extent mentioned above was unable to meet the current needs of the country.

3. The petitioners learnt through news published 'in Chinese newspaper that the Government of Pakistan was contemplating to impose dumping duty against the tiles being imported into Pakistan.

4. Not only this, they also received a notice from China reflecting such a situation and asking these importers to provide them information in this connection. There has been exchange of letters between parties involved in this import as well as between the Ministry of Commerce on this subject.

5. As bit-by-bit the information came to the private parties, their doubts were re-enforced about the imposition 'of the duty under the Anti-Dumping Duties Ordinance, 2000.

6. They have come to this Court stating that as the matter was not being clarified and was kept obscured, they apprehended the imposition of duty under this law. That the respondents be given directions not to impose such duty without first adherence to the procedural aspects reflecting in this law.

7. The National Tariff Commission as a respondent appeared before this Court to state that petitioners were unnecessarily apprehensive regarding the imposition of the duty. They, submitted their written comments, which read as follows:--

"(2) Respondent No.2 is a body corporate established under the National Tariff Commission Act, 1990. Respondent No.2 is responsible for conducting anti-dumping investigations and subsequent imposition of anti-dumping duties, where required, under the Anti-Dumping Duties Ordinance, 2000 (the "Ordinance") and the Anti-Dumping Duties Rules, 2001 (the "Rules") framed thereunder. The Ordinance and the Rules lay down a procedure for investigation to be followed before the imposition of anti-dumping duties (Brief summary of the stages involved in an investigation is annexed at annexure A).

(2) Respondent No.2 has not initiated any investigation on imports of tiles from China. The Writ Petition is misconceived and premature.

(3) Respondent No.2 received an anti-dumping application under section 20 of the Ordinance on behalf of the domestic industry through Master Tiles and Ceramics Limited on February 23, 2006 (Application) No anti-dumping application regarding

ceramic tiles was received before this date and, therefore, the respondents to Pakistan Sanitary Merchants and Manufacturers Association (PSMMA) referred to in the title Writ Petition represented the correct position. The Respondent No.2 is also under a duty not to publicize an application until it has made a decision to initiate and investigation under Rule 4 of the Rules.

(4) In compliance with section 21 of the Ordinance, upon receipt of the Application the Respondent No.2 gave notice to the Government of China on February 24, 2006 of receipt of the Application alleging dumping of ceramic tiles (copy of the letter notifying the receipt of the Application is annexed at Annexure B).

(5) In compliance with section 23 of the Ordinance, Respondent No.2 is presently examining the accuracy and adequacy of the evidence provided in the Application to determine whether there is sufficient evidence to justify the initiation of an investigation. It? is only when Respondent No.2 is satisfied???????? that (a) an

application under section 20 has been made by or on behalf of the domestic industry; and (b) there is sufficient evidence of dumping and injury within the meaning of the Ordinance, Respondent No.2 shall??????????? initiate an investigation. Respondent

No.2 also has the option to reject the application as soon as it is satisfied that there is no sufficient evidence of either dumping or of any injury to justify initiation of an investigation. The Respondent No.2 is required to normally make this decision within a period of 45 days as required by Rule 5 of the Anti-Dumping Duties Rules, 2001 (Rules) and in the present case this period will expire on April 9, 2006. Also, as aforesaid, under Rule 4 of the Rules. Respondent No. 2 is obliged not to publicize an application unless a decision has been made to initiate an investigation. The Respondent No.2 has therefore, not publicized the receipt of the application.

(6) It is only upon the initiation of the investigation that Respondent No.2 is required, under section 27 of the Ordinance, to. give notice to all exporters, importers and any representative associations of importers or exporters know to Respondent No.2 to be concerned, as well as representatives of the exporting country, the application and other interested parties known to Respondent No.2 to have an interest therein and publish a copy of such notice in the official Gazette and in at least one issue each of a daily newspaper in the English language and a daily newspaper in the Urdu language having wide circulation in Pakistan.

(7) Respondent No.2, after initiation of an investigation, is further obliged under section 28 of the Ordinance of provide any interested party the full text of the written application (non-confidential) received under subsection (i) of section 20 of the Ordinance."

8. Verbally it was said that the law shall be followed in letter and spirit.

9. The Anti-Dumping Duties Ordinance, 2000 was inspired ,by Article 6 of the General Agreement on Tariff and Trade, 1994, with a purpose of imposing duties to offset. injurious dumping in the public interest.

10. At the end of Second World War, a number of international negotiations were set in motion for creating institutional structures for the conduct of international relations in the post-war world. In this connection, a conference had been held in Havana, Cuba in 1947 called as the United Nations Conference on Trade and Employment. A Charter after the end of the conference was adopted. But as the United States did not ratify it, the Havana Charter remained a stillborn child.

11. However, keeping in view the productive discussion which had taken place at Havana and while taking an aberration from the politics involved in connection with its ratification, a group of countries engaged themselves in tariff negotiations and in the same year (1947) agreed on substantial tariff reductions.

12. Pending the enforcement of the Havana Charter, a mechanism was required for the implementation and protection of the tariff concessions negotiated in 1947. This led to the birth of the General Agreement on Tariffs and Trade commonly called as GATT.

13. Its provisional status shall continue until the Havana Charter is adopted.

14. Pakistan is a signatory along with other 22 countries to the Protocol of Provisional Application of GATT and a law was required which has now come about.

15. GATT since its inception provided a structure for the global process of steady and trade liberalization through eight "rounds" of multilateral trade negotiations sponsored by its Contracting Parties, covering progressively larger volumes of international trade. This process evolved with its own dynamics, through the initial years of the Cold War, the emergence to independence of many developing countries, the creation of the European Communities, the rise of new and important trading countries, the transition of many countries to market economies, the increasing globalization of the world economy, and into the consolidation of the multilateral trading system through the establishment of the World Trade Organization.

16. This process of trade liberalization achieved the reduction of tariff rates on industrial products in developed countries from an average of around forty per cent to less than four per cent; the practical elimination of quantitative restrictions; the development and strengthening of clear rules for the administration of different trade policy measures (such as safeguards, subsidies, anti-dumping duties, technical barriers to trade); and development of procedures to resolve disputes. The eighth GATT round the Uruguay Round, carried this liberalization forward. It also initiated a process of reform of agricultural support and protection, established and launched a process for reintegration of the textiles and clothing section into GATT, established multilateral rules in new areas of international economic interaction (such as trade in services and protection of intellectual property rights); and established a solid institutional and legal basis for the multilateral trading system through the creation of the World Trade Organization and its greatly strengthened dispute settlement system.

17. It is an established fact that since the entry into force of the GATT, world trade growth has consistently outpaced growth in world industrial production.

18. It may be mentioned that WTO is another organization which has come about as a sequel to GATT. The GATT rules applied to trade in goods. The WTO Agreement covers trade in goods, trade services and trade-related aspects of intellectual property rights.

19. Whilst the GATT was a multilateral instrument, a series of new agreements were adopted during the Tokyo round on a plurilateral that is, selective basis, causing a fragmentation of the multilateral trading system. The WTO has been adopted, and accepted by its Members, as a single undertaking the agreements which constitute the WTO are all multilateral, and therefore involve commitments for the entire membership of the organization.

20. The Anti-Dumping Duties Ordinance, 2000, has 77 sections. The initial thing is the identification of dumping and section 4 of the Ordinance speaks about it in the following words:--

"Identification of dumping: For the purposes of this Ordinance, an investigated product shall be considered to be dumped if it is introduced into the commerce of Pakistan at a price which is less than its normal value."

21. But Anti-Dumping duty is only levied on the basis of investigation which is envisaged by section 24 of the Anti-Dumping Duties Ordinance, 2000, which reads as follows:--

"Application by or on behalf of domestic industry.---(1) For the purposes of section 20, an application shall be considered to have been made by or on behalf of domestic industry only if it is supported, by those domestic producers whose collective output constitutes more than fifty per cent of the total production of a domestic like product production by that portion of the domestic industry expressing either support for or opposition to the application.

(2) For the purposes of section 23, no investigation shall be initiated when domestic producers expressly supporting an application account for less than twenty five percent of the total production of a domestic like product produced by domestic industry.

(3) In the case of fragmented industries involving an exceptionally large number of producers, the Commission may determine support and opposition for an application submitted under section 20 by using statistically valid sampling techniques."

22. The Commission, however, may suo motu initiate an investigation upon receipt of sufficient evidence and it may be also proceeded for purposes of investigation and anti-dumping measures on an application made by a third country.

23. However, before initiating the investigation, the requirements of section 27 are to be fulfilled. Section 27 reads as follows:--

"Notice of decision to initiate investigation:

(1) When the Commission has decided to initiate an investigation it shall:

(2) give notice to all exporters, importers and any representative associations of importers or exporters known to the Commission to be concerned, as well as representatives of the exporting country, the applicant and other interested parties known to the Commission to have an interest therein; and

(b) Publish a copy of such notice in the official Gazette and in at least one issue each of a daily newspaper in the English language and daily newspaper in the Urdu language having wide circulation in Pakistan.

(2) The notice of initiation of an investigation referred to in subsection (1) shall be in such form and contain such information as may be prescribed and the initiation of investigation shall be effective on the date on which such notice is published in the newspapers as provided for in clause (b) of subsection (1).

24. While conducting the investigation, the Commission may observe confidentiality in respect of informers.

25. According to its section 37, it may make preliminary determination and then proceed further. The Ordinance also provides the provisions for appeal to an appellate tribunal to be constituted as per the provisions of sections 64 to 66. Under the Ordinance, the Commission can also make its rules.

26. What was alleged before this Court is that the investigation had commenced in respect of the aforementioned goods without following the provisions of section 27. But now we have categorical replies that no formal investigation was underway. There. is also an assurance that the provisions of the Ordinance shall be fully followed arid everybody shall be notified if the investigation is to commence.

27. Therefore, merely because the Commission is in receipt of certain information, does not at all mean that it has either suo motu or acting under "section 24 or on the application of a third party .had initiated investigation because only such proceedings- in investigation' would be valid where the requirements of section 27 have been met as a prelude not otherwise.

28. Since it is a new law and it has not been fully introduced, it was essential to give its short history above and dilate on the provisions of the Ordinance. As public will gradually become aware of the Ordinance and its mechanics, the fears and ,apprehensions would be set at rest. These fears are also arising because of the WTO and there is need for educating people about it.

29. As no investigation is taking place, the petitioners should not be apprehensive of any adverse action under the Ordinance. For the time being, the Writ Petitions having borne fruit, are disposed of.

M.H./I-14/L???????????????????????????? ??????????????????????????????????????????????????????????? Order accordingly.