Tribunal Upholds Anti-Dumping Duty Decision on Foreign Exporter and Domestic Industry Appeals

The Tribunal dismissed both Anti-Dumping Appeal No. 53285 of 2018 filed by the foreign exporter and Anti-Dumping Appeal No. 53586 of 2018 filed by the Domestic Industry. The Tribunal upheld the Designated Authority's findings on various issues including the computation of landed value, necessity for continuation of anti-dumping duty, alleged monopoly and abuse of dominant position, non-disclosure of "Non-Injurious Price" calculation sheet, impact of insignificant imports, and likelihood of continuation or recurrence of dumping and injury. The Tribunal also affirmed the treatment of the foreign exporter as non-cooperative and imposition of residual duty.

---

---

Issues Involved:
1. Validity of the application filed by the Domestic Industry for initiation of sunset investigation.
2. Computation of landed value by considering the Preferential Rate of Duty under the ASEAN Agreement.
3. Necessity for continuation of anti-dumping duty considering the profits and Return on Capital Employed of the Domestic Industry.
4. Alleged monopoly and abuse of dominant position by the Domestic Industry.
5. Non-disclosure of "Non-Injurious Price" calculation sheet.
6. Impact of insignificant imports on the Domestic Industry.
7. Findings on the likelihood of continuation or recurrence of dumping and injury.
8. Modification of the rate of duty based on current margin and injury margin.
9. Examination of the causal link between dumped imports and injury to the Domestic Industry.
10. Treatment of the foreign exporter as non-cooperative and the imposition of residual duty.

Detailed Analysis:

1. Validity of the Application Filed by the Domestic Industry:
The appellant contended that the application for sunset investigation was not duly substantiated. However, this ground was not raised in the memorandum of appeal, and no leave was sought to introduce it. The Designated Authority had recorded that a duly substantiated application was filed by the Domestic Industry, and thus, this contention was dismissed.

2. Computation of Landed Value by Considering the Preferential Rate of Duty:
The appellant argued that the Designated Authority incorrectly computed the landed value by considering the Preferential Rate of Duty (Nil Rate) under the ASEAN Agreement. The Tribunal upheld the Designated Authority’s method, noting that the applicable customs duty was indeed "nil" under the ASEAN Treaty, and the appellant failed to show that any basic duty of customs was paid on the subject goods.

3. Necessity for Continuation of Anti-Dumping Duty Considering Profits and Return on Capital Employed:
The appellant claimed that the Domestic Industry was earning superlative profits and had a Return on Capital Employed in excess of 22%. The Tribunal noted that the profitability of the company as a whole is not relevant, and only the product under consideration should be examined. It was found that the capital employed was 13%, below the benchmark of 22%, and profits were below 10%, which cannot be termed as "superlative."

4. Alleged Monopoly and Abuse of Dominant Position by the Domestic Industry:
The appellant alleged that the Domestic Industry was a monopoly and was exploiting its dominant position. The Tribunal found that there were eight producers of the subject goods in India, with the Domestic Industry holding 52.19% market share and the remaining producers holding 47.37%. Thus, the Domestic Industry was not a monopoly, and the appellant failed to substantiate claims of exploitation.

5. Non-Disclosure of "Non-Injurious Price" Calculation Sheet:
The appellant argued that non-disclosure of the "Non-Injurious Price" calculation sheet resulted in a denial of natural justice. The Tribunal upheld the confidentiality provisions, noting that disclosing the Domestic Industry's confidential cost of production to a foreign exporter would breach rule 7 of the 1995 Rules. The Gujarat High Court’s decision in Nirma Ltd. was distinguished as it involved disclosure to the party providing the information, not to a foreign exporter.

6. Impact of Insignificant Imports on the Domestic Industry:
The appellant contended that insignificant imports could not have caused injury warranting an extension of duties. The Tribunal noted that in a sunset review, the volume of imports is not a relevant consideration; the focus is on the likelihood of continuation or recurrence of dumping and injury.

7. Findings on the Likelihood of Continuation or Recurrence of Dumping and Injury:
The Tribunal examined the Designated Authority's findings and upheld that there was a likelihood of recurrence of dumping and injury. Factors such as the surplus capacities of the foreign exporter, the small quantity of exports made at dumped prices, and the attractiveness of the Indian market were considered.

8. Modification of the Rate of Duty Based on Current Margin and Injury Margin:
The appellant argued for a modification of the duty rate based on current margins. The Tribunal noted that in a sunset review, the current level of dumping is not as relevant as the likelihood of continuance or recurrence of dumping. The criteria under section 9A(1) of the Tariff Act do not apply to continuance of duty under section 9A(5).

9. Examination of the Causal Link Between Dumped Imports and Injury:
The appellant contended that the Designated Authority did not examine the causal link. The Tribunal held that in a sunset review, the causal link is not required to be re-established as it was already established during the original investigation. This view was supported by the WTO Appellate Body’s report in United States-Anti-Dumping Measures.

10. Treatment of the Foreign Exporter as Non-Cooperative and Imposition of Residual Duty:
The Domestic Industry argued that the foreign exporter should be treated as non-cooperative and residual duty should be imposed. The Tribunal found that the Designated Authority had exercised discretion appropriately by recording findings based on available facts and there was no perversity in this exercise of discretion.

Conclusion:
Both Anti-Dumping Appeal No. 53285 of 2018 filed by the foreign exporter and Anti-Dumping Appeal No. 53586 of 2018 filed by the Domestic Industry were dismissed.

---