Commissioner of Custom Bangalore vs. G.M Exports and Ors.: 2015(6)ABR 802

BY: Akshita Goyal & Vishakha Jaswani

HON’BLE JUDGES :- A.K. Sikri and Rohinton Fali Nariman, JJ


The case discuss about the interpretation of law and the language of the statute. The case is a S.L.P. (Civil) in supreme court. Article 51 of Indian Constitution which is a Directive Principle of State Policy is referred to understand the implication of international treaty and obligation. The supreme court have interpreted and elaborated the section of Customs Tariff Act, 1975 along with they have explained the rules of anti- dumping duty in accordance with the WTO agreement. They have explained every rule anti-dumping duty in connection with the WTO agreement to which India is a signatory member. They have also answered the question of law when India is not a signatory member to an international treaty and when it is a signatory member. The judges have interpreted the rules and statutes as well the implication on section 9A and said rules and also have explained the reasoning and jurisprudence behind it. The judges have also pointed out how these rules are to be read in accordance with the WTO agreement.

Explanation of the case


In this case the supreme court have clubbed seven appeals as all of them  have common question of law and out of which some appeals are against the judgments of Bombay high court and Kerala high court whereas rest others are the appeal on Karnataka Tribunal (Bangalore) judgment and a Bombay Tribunal judgment.

A public notice was issued by the Designated Authority in which they have initiated proceedings for the import of Vitrified/Porcelain tiles in India which were exported from the countries like the People’s Republic of China and the United Arab Emirates. Then the preliminary findings were issued and after that central government had imposed provisional anti-dumping duty by a notice dated 2nd May, 2002 under section 9A(2) of the Customs Tariff Act, 1975 read with Rules 13 and 20 of the Anti-dumping Rules. It was further concluded in its final findings that it is causing material injury to the domestic industry and major variation in prices. The central government issued a notice on 1st May, 2003 imposing a final anti-dumping duty and the date of effect of the imposition of the provisional anti-dumping duty i.e. 2nd May, 2002. As the question is that the final anti-dumping duty between 2nd November, 2002 and 30th April, 2003 imposed is within the jurisdiction of central government which is the gap period as during this time the provisional duty has come to an end and there is a time period of six months until a final notification was issued by the central government on 1st May, 2003.

The procedural Background

The Bombay and Kerala High Courts and the Bombay Tribunal were in the favour of the contentions of revenue whereas only Karnataka Tribunal (Bangalore) was in the favour of the Assessee.

Revenue’s contention 

The side of the revenue contented that final anti-dumping duty should take effect from the date of imposition of the provisional duty, which also includes gap period of six months in this case. The gape period is the period is the time period between the end of the provisional anti- dumping duty and the imposition of the final anti – dumping duty. It was found that dumping of goods was there which has resulted into material injury to the domestic industry. Thus she says that if no anti dumping duty is levied for the gap period then the whole purpose of this act will not be served. As this will not save domestic industry from the unfair trade practices of the foreign exporter that have flooded the markets with the price lower than the price of the domestic industry.

She also interpreted that rule 20 also of anti-dumping duty are to be levied from the date of imposition of provisional duty which would include the “gap” period.

She also argued that the word levied in rule 20(2)(a) does not mean collection as taking the support of  many supreme court judgement. And rule 21 has to be read independently and not with rule 20 as its consequence. She says if there is conflict between international and Indian law, then Indian law shall prevails as they are made in pursuance to that treaty.

To support her argument she has referred to Article 10 of the WTO agreement and rule 20(2)(a) of anti- dumping duties that both of them deviates and the rule shall prevail and duty should be imposed during the gap period.

 Assessee’s contention

He argued that that rule 20(2)(a) should be read in accordance with Article 10 of the WTO agreement and the interpretation should be that the provisional duty is levied for that period only and not beyond.

He stated that the central government itself has placed on its website about reading of the anti-dumping rules which should in accordance with the WTO agreements on anti-dumping and this is given in clause 18.4 of the agreement.

Interpreting rule 20(2)(a) which was made to show the validity of imposition of  provisional duty and nothing more than that. This rule was made in consonance with rule 13 and 21 and if not read harmoniously then it will not serve its purpose wholly.

 He says that the word levied includes the word “collection” but that does not mean that duty it can be used retrospectively for the gap period. To support this argument he refers to section 9A(2) and (6) which does not permit the imposition of anti dumping duty retrospectively and only section 9A(3) has the power to be acted retrospectively.

Thus no duty can be levied during the gap period as this would ultra vires and government would be indirectly imposing duty which is prohibited directly through the rules provisional duty.

The case was an appeal and high court has missed out various points which was pointed out by supreme court and also said that parliament has not made laws in accordance with WTO agreement.


Whether domestic law will prevail, where India is not a signatory to an international treaty and there happens to be a conflict between domestic and international law?

Whether a narrow literal construction of such a statute is preferred which is made in furtherance of an international treaty to which India is a signatory?

 Whether the statutory language should be construed in the same sense as that of the treaty in a situation where India is a signatory nation to an international treaty and the said statute is made to enforce treaty obligation?

Whether anti-dumping duty imposed with respect to imports made during the period between the expiry of the provisional anti-dumping duty and the imposition of the final anti-dumping duty is legal and valid?


In this case the judges have pointed out the explanation of each rule are and the flaws in the rules. In paragraph 34 it is said that the rule 13 and 19 has prospective effect but anti dumping rules cannot be applied in this manner. Therefore rule 18 comes into picture which specifically talks about the retrospective effect of the said rules. The interpretation of rule 13 should be in consonance with Clause 10.2 of the WTO Agreement. “The WTO agreement is intended to be applied by the various signatory nations in a uniform manner. This can only be done by construing the language of Section 9A read with the Rules in the same sense as that of the WTO Agreement.”[1] No duty would be imposed during the gap period as the duty would have a retrospective effect but the provisional duty is not cover beyond 6 months.


In paragraph 36 it is said by the court that “there can be no levy of anti-dumping duty in the “gap” or interregnum period between the lapse of the provisional duty and the imposition of the final duty.”[2] As rule 13 is in contrast with clause of WTO agreement so it followed but is levied for a period not more than 6 months. The court also said that the duties shall be imposed retrospectively and not prospectively.

In paragraph 38 and 40 the court has laid down inflexible rule that no duty would be imposed in the gap period.

In paragraph 43 rule 21 was explained that “if provisional anti-dumping duty is found to be higher than the final anti-dumping duty, the differential shall be refunded to the importer. If the anti-dumping duty finally imposed is higher than the provisional duty already imposed and collected, the differential shall not be collected from the importer.”[3]

The case was decided in the favour of the assessee in paragraph 45 and 46 by stating that [45] “if it were found that dumping and material injury having been found, yet no anti-dumping duty can be levied.”[4]

[46] “Rule 20 would achieve indirectly what cannot be achieved directly, having regard to the mandatory language contained in Rule 13 second proviso.”[5]


India is a signatory member to WTO agreement and rule for the imposition of dumping duty is under section 9A of the Customs Tariff Act, 1975 and the rules are its outcome. These rules are made and duties are imposed so that it could reduce the unfair trade practices in which exporters are involved and flood the domestic market with same goods at a price lower than the normal selling price at which they sell in their own country which causes injury to the domestic market. This may increase the price in the domestic market as the demand would increase of that good. So these rules set a balance between right of exporters from other country and the sellers of the domestic market. As the import of goods at a price lower than the normal price in the exporting country would exploit the domestic market of the importing country. And if there is large number of import then it may cause material injury to the domestic market which may lead to shut down of industry and the sellers. This will also affect the economic sector of the country which will eventually hamper the growth and development the importing country.

The exporter of other country would firstly sell the goods at lower price so that the domestic industries would not be able to compete with it and are completely destroyed and vanished from the market. Exporting large amount of goods may benefit the people in short run as they are able to purchase the goods at lower prices but in long run it drastically affects the prices because after that these foreign industries would increase their prices and it would be a necessity of the people of that country to buy it at higher prices as the local industries were already destroyed. Also setting up the industry would not be able to compete with the prices of those foreign industries and therefore people would not prefer the products of the domestic industry as they their price is comparatively higher. Also foreign industry would be using better technology and machines to reduce their cost which would adversely affect the domestic market.

After independence, in India there was necessity to stabilize the economy of the county and being self sufficient which could only be possible by setting up their own industry which was the only way of progress. Dumping of goods i.e. exporting goods from other county would create unfair competition between the foreign companies and the newly build up companies. As these new companies was set up with great difficulties and if they are destroyed due to flooding of goods from foreign country and other unfair trade practices then the financial and economic stability of the country would have never been possible. Therefore Customs Tariff Act, 1975 was introduced to solve the purpose of preventing dumping and unfair competition and promote healthy competition in the market. Thus the 1995 Amendment to Section 9A was made in accordance to Article VI of the General Agreement on Tariffs and Trade 1994. The anti- dumping duties were introduced because foreign industries destabilises the domestic industries by selling at lower price.

All the statutes and corresponding rules formed in a country are to be in consonance with international treaty. The language used in the international treaty and convention is structured in a general form for application for the uniformity of international code and is applied in all courts. They are not formed on domestic law of any of the specific country. The language of the code is sought to achieve the universal goal. “If there is difference between the language of the provision of the convention and the statutory provision, then the language of the statutory provision should be construed in the same sense as that of the convention if the words of the statute are reasonably capable of bearing that meaning.” [6]The parliament should amend the domestic law so that the country could ratify an international treaty. “In case of ambiguity or obscurity is to be resolved in favour of that meaning that is consistent with the provisions of the treaty.”[7]The rules are made not only to serve the international treaty obligation but also are made consistent with the terms of the treaty. It is suggested that these rules and statutes should have broad principles rather than the narrow meaning so that it can be applied generally and does not rigidly control the domestic laws. There shall be no difficulty in amending the domestic law as the signatory member has already ratified and accepted it and can be used in the court of law.  

The duty imposed cannot be prospective effect because if the market is flooded it large dumping in short period of time then the remedy through anti- dumping will not be able to serve the purpose so it is required to be levied retrospectively but for a limited period of time. The government has decided it to be 90 days. Different counties who are signatory nation have made their domestic laws differently and decided the time period differently depending on their extent of injury but in consonance with the laws of WTO agreement.


The anti dumping rules are formulated in accordance with the WTO agreement. If there is threat to the domestic industry then these rules are applicable. The threat could be dumping i.e. excessive flooding of the foreign goods at low price which may cause material injury to the domestic industry. The courts have focused on the volume of the exports on the basis of price and not on quantity when the imports are not sold on dumping prices. The courts have also focused on the trade restrictive practices to curb unfair competition. The material injury is based on the complex economic factor and has to be differentiated it from the other factors.

The anti dumping rules are formulated in the favour of the international trade because the foreign industries have entered into the contract before these duties are imposed. Therefore importer does not bear the loss if final duty is higher than the provisional duty. This principle is followed to form a balance between domestic industry and international trade. Therefore, international trade is favoured in international laws.

The court have only decided upon the anti dumping duty cannot be levied during the gap period i.e. the period between the expiry of the provisional duty and imposition of the final duty and discussed the interpretation of various provision of statutes and rules of the anti – dumping duties.


If India is not a signatory member of an international treaty or convention, then those rules of the international laws are applicable and can be followed in the court which is not in contrast with domestic laws. In case of conflict domestic law will prevail.
If India is a signatory member an international treaty or convention and the domestic laws is passed in consonance of the treaty, then any vague or ambiguous terms of the provision should be in favour in the essence of the provision of the treaty.
If India is a signatory member an international treaty or convention and the domestic laws is made in furtherance of such treaty, then the broad and purposive principles would be considered as the intention is to fulfil the treaty obligations and not make law inconsistent to it.
If India is a signatory member an international treaty or convention and the domestic laws is made to enforce a treaty obligation and there is difference in the language between the two then statutory language should be construed in the same sense as that of the treaty so that it can be applied uniformly in the courts of all the signatory member.


[1] Commissioner of Customs, Bangalore v. G.M. Exports and Ors., 2015(6)ABR802.

[2] Ibid.

[3] Ibid.

[4] Ibid.

[5] Ibid.

[6] Ibid.

[7] Ibid.

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