An Anti-dumping duty is levied against the goods originating in or exported from the subject countries. The final findings issued by the Directorate General of Anti-Dumping and Allied Duties (“DGAD”) and the Customs Notification issued by the Central Government contain a ‘duty table’ which sets out the amount of anti-dumping duty for different combinations of producers/exporters from various countries. The duty table has, inter alia, four columns namely, ‘Country of Origin’, ‘Country of Export’, ‘Producer’, ‘Exporter’. The meaning of the terms ‘Country of Origin’ and ‘Producer’ is quite obvious and clear. ‘Country of Origin’ means the country where the goods are manufactured i.e. where they originate and the producer is the person/entity who manufactured the goods. However, number of times doubts have been raised as to what is the meaning of ‘Country of Export’ and ‘Exporter’ and what are the relevant factors that determine the ‘Country of Export’. The article aims to explain the connotation of the term ‘Country of Export’ in context of anti-dumping duty notifications.
In today’s business environment, it is a common practice for manufacturing companies to have extended trading arms (whether related or unrelated) which may be established in different countries for managing the export business. For example, a manufacturing company in China may have a company registered in Singapore for managing its export transactions to India. In such a situation, goods are first sold by the Chinese company to the Singapore company which are then re-sold to the Indian Customers. However, goods are, in most the cases, shipped directly from China to India. Therefore, while the goods are moving directly from China to India, it is only the invoicing/ documentation which takes place via Singapore. This brings us to a question as to which country is the Country of Export in such a scenario, China or Singapore? The Country of Export, in this case, would be China because the country of export is decided on the basis of physical shipment of goods to India irrespective of the physical presence of the exporter on record in that country. It is only the location and physical movement of goods that matters. The location of exporter is irrelevant. This fundamental principle has also been outlined by the CESTAT in Borax Morarji Limited v. Designated Authority [see End Note 1] in which it was held that:
· Para 3: “Admittedly, the producer ETI Maden of Turkey did not export the product itself, but the product was exported from Turkey to India through Boro Chemi International Pvt. Ltd., Singapore. The subject goods, which were exported did not reach India via Singapore, but were directly exported from Turkey to India. Obviously, therefore, the exports were made from Turkey, even though the exporter Boro Chemi International Pvt. Ltd., who was the Area Agent of the producer for Asia was located in Singapore. Even where an exporter is located outside the country of export, he would remain competent to export the goods from the country of export and merely, because he operates from some other country, the export cannot be said to have been made from that other country where the office of the exporter may be located. Even by operating from country other than the country of export, a person can export goods from the country of export and his physical presence in the country of export will not be necessary to effect the exports that he makes from the exporting country, subject of course to the municipal laws of that country.” (emphasis supplied)
· Para 10.1: “....... It is obvious that a person can export goods from a country without himself remaining physically present there…….” (emphasis supplied)
In the above paragraphs, the Hon’ble CESTAT has observed that a person can export the goods from a country without himself remaining physically present there. In other words, the CESTAT observed that there exists no nexus in the location of the exporter and the country of export. The country of export is, therefore, the country from where the goods are shipped to India irrespective of the physical presence of the exporter on record.
Therefore, in the example discussed earlier, if an anti-dumping duty notification is in place against the goods originating in or exported from China, the column ‘Country of Export’ in the duty table will contain China and the column ‘Exporter’ will have the name of the Singapore company which is the exporter on record. Therefore, the goods exported by the Singapore Company will be said to have been exported from China, the country of export.
Let us consider another situation. Suppose an anti-dumping duty is in force against a product originating in or exported from Malaysia. A producer in Vietnam (non-subject country) also manufactures the same product. An exporter (trader), located in Malaysia, purchases the goods from the producer in Vietnam and sells them to customers in India but the goods are shipped directly from Vietnam to the India. In this situation, the country of origin as well as the country of export for the imported goods is Vietnam. Therefore, no anti-dumping duty is leviable because the imported goods are neither originating in nor exported from the subject country i.e. Malaysia. Interestingly, the exporter is located in Malaysia and the import documents bear the name of Malaysian exporter, still the goods will not be liable for anti-dumping duty. In practice, the Customs Authorities might argue that since the exporter is located in Malaysia, the goods will be liable to anti-dumping duty. However, the same will be incorrect in light of the fundamental principle discussed above.
The country of export is determined on the basis of the place from where the goods are physically shipped. The location of exporter is irrelevant. The name of the exporter is mentioned in the duty table of the anti-dumping duty notification because of the Indian practice of giving combination (producer and exporter combination) rate of duty.