Tribunal remits matter for export price re-determination & dismisses domestic industry appeals. Xinyi Energy appeal partially allowed.

The Tribunal remitted the matter to the designated authority to re-determine the export price of Xinyi Energy, excluding deductions for the alleged liaison office, and to re-determine the normal value considering the Tribunal's observations. The appeals by the domestic industry were dismissed, while the appeal by Xinyi Energy was allowed to the extent indicated. Order pronounced on 20.01.2023.

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Issues Involved:
1. Justification of deductions from the export price of Xinyi Energy on account of a liaison office.
2. Adjustment to the normal value by loading the cost of production.
3. Allegation of Xinyi Energy providing incorrect information and suppression of material facts.

Issue-wise Detailed Analysis:

1. Justification of deductions from the export price of Xinyi Energy on account of a liaison office:
The designated authority initially noted that Xinyi Glass, a related company, had applied for a liaison office in India but had not started operations. The authority initially did not adjust the export price based on this information. However, in the final findings, it concluded that Xinyi Glass was involved in marketing and sales during the investigation period. This conclusion was based on the application for a liaison office, renting an office, website information, and public hearing attendance by a representative. The Tribunal found no fresh evidence post-disclosure to justify this change and noted that the liaison office had not been approved by the Reserve Bank of India during the investigation period. It concluded that the expenses incurred by Xinyi Glass had no bearing on the export price and that the findings of the designated authority on this aspect could not be sustained.

2. Adjustment to the normal value by loading the cost of production:
Xinyi Energy received interest-free advances from its parent company for future expansion, not related to the production and export of goods during the investigation period. The designated authority adjusted the normal value by imputing notional interest costs based on rates in Malaysia, without justifying why the actual interest cost from the loan agreement was not acceptable. The Tribunal found this adjustment unjustified, noting that the loan was from a Hong Kong-based bank and not subject to Chinese laws, and that Hong Kong is not considered a non-market economy.

3. Allegation of Xinyi Energy providing incorrect information and suppression of material facts:
The domestic industry alleged that Xinyi Energy provided incorrect information regarding its marketing activities in India. The Tribunal found that the information provided by Xinyi Energy was factually correct, as it did not have an office in India during the investigation period, and the question did not require disclosure of related entities' offices. The Tribunal also noted that the designated authority did not request specific information about expenses incurred by Xinyi Glass, making rule 6(8) inapplicable. The Tribunal rejected the domestic industry's contention that Xinyi Energy should be declared non-cooperative based on the evidence provided.

Conclusion:
The Tribunal remitted the matter to the designated authority to re-determine the export price of Xinyi Energy excluding deductions for the alleged liaison office and to re-determine the normal value considering the Tribunal's observations. The appeals by the domestic industry were dismissed, while the appeal by Xinyi Energy was allowed to the extent indicated.

Order Pronounced on 20.01.2023.

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