TaxTMI 
TaxTMI 
2006 (8) TMI 334
X X X X Extracts X X X X
X X X X Extracts X X X X
.... withdrawal of anti-dumping duty on imports of acrylic fibre originating in or exported from the subject countries, namely, U.K., Germany, Bulgaria and Brazil. 2.1 On the basis of a written application from the International Rayon and Synthetic Fibres Committee (CIRFS), Brussels on behalf of the exporters from U.K. and Germany for review of anti-dumping duty imposed on imports of the subject goods (acrylic fibre) due to changed circumstances with regard to injury, supported by European Commission (EC), a mid-term review of anti-dumping duty imposed on imports of acrylic fibre originating in or exported from U.K. Germany, Brazil and Bulgaria into India was initiated by the designated authority by its notification dated 3rd September, 2004 under Rule 23 of the Customs Tariff (Identification, Assessment and Collection of Anti-Dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995. 2.2 The original investigation concerning imports of acrylic fibre from the subject countries was initiated on 28th August, 2001, the preliminary findings were issued by the designated authority on 7-12-2001 and provisional duty was imposed by notification dated 31-12-20....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e) which showed domestic price of acrylic fibre prevailing in April 2003-March 2004 in different regions in Europe, the designated authority, after making an adjustment, worked out normal value at US $ 1731.85 PMT. In the same way normal value was worked out at US $ 1627.35 PMT for Brazil by relying on average domestic price of acrylic fibre for USA as reported in the said journal. The constructed normal value in respect of Bulgaria was determined at US $ 1449 PMT on the basis of the information furnished by the domestic industry regarding estimate of cost of production in Bulgaria taking into account the international price of major raw material acrylonitrile and other chemicals and by making necessary corrections. 4.1 The export price on the basis of DGCI&S data relating to imports of acrylic fibre from various countries was worked out at US$ 1846.12 PMT for U.K., US $ 1498.13 PMT for Germany and US $ 1161.36 PMT for Bulgaria. As per DGCI&S data there were no exports from Brazil during the period of investigation. 4.2 On the basis of the determinations of normal price and the export price, the margin of dumping was worked out at minus 6.19% for U.K. (i.e. no dumpi....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... that the price of acrylic fibre exported from U.K. was invariably higher and thus there was no likelihood of dumping from U.K. The volume of imports from Bulgaria had shown declining trend except for the year 2002-03. There were no exports from Brazil since 2001-02 and there was no evidence of any significant build-up of surplus capacity of exports from Brazil. The authority did not foresee any likelihood of dumping from Brazil. As regards likelihood of recurrence of injury, it was found that dumping continued during the review investigation from Germany and Bulgaria but there was no perceptible adverse impact on the prices of the domestic industry and the general state of the domestic industry in respect of various essential parameters. It was observed that almost all the parameters showed improved performance and there was no material injury to the domestic industry by continued dumping from Bulgaria and Germany. The demand of the product had remained constant during the injury analysis period and based on the available information, it could not be concluded that dumping would intensify, should the anti-dumping duty be removed. It was held that the authority did not find any lik....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ports. It was also argued that the landed price of the subject goods Rs. 7,80,913/- PMT, was lower than the non-injurious price of Rs. 803,300/-. Thus, the domestic imports continued to come at a price much lower than the non-injurious price, thereby implying continuance and likelihood of "injury" to the domestic industry, because the said injury margin was lower than the dumping margin of imports from Bulgaria. Arguments on behalf of the respondent-Designated authority : 6. The learned Counsel appearing for the respondent-designated authority submitted that the quantity imported from Bulgaria of 300 MTs was insignificant and there was no material injury or threat of injury caused by such a low volume of imports from Bulgaria. It was submitted that the designated authority has correctly found that there was no injury because on cumulative assessment there was no price undercutting by the dumped imports from the countries which were under investigation for review purpose. He submitted that though there was dumping from Germany, it was only to the extent of 1.37% which was insignificant. Moreover, there was no price undercutting by dumped imports from Germany. As regards U....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s, other than the dumped imports is also required to be examined by the designated authority. The likelihood of injury, inter alia, entails enquiry of the factor whether imports are entering at a price that will have a significant impact on domestic prices and was likely to increase demand for further imports. 8.1 The relevant economic factors and indices having a bearing on the state of industry, as enumerated in Paragraph (iv) of Annexure II, include :- (a) Sales (b) Profits (c) Output (d) Market share (e) Productivity (f) Return on investment, or utilization of capacity (g) Factors affecting domestic prices (h) Magnitude of the margin of dumping (i) Actual and potential negative effects on cash flow (j) Inventories (k) Employment (l) Wage (m) Growth (n) Ability to raise capital investments. 9. The ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s. The market determines the prices of factors of production in the same way in which it determines the prices of consumer goods. In a market economy the relationship between the price of a good and the quantity supplied depends on the cost of making it. Prices are considered to be determined simultaneously by cost and demand considerations. Any price determined on a market is the necessary outgrowth of the interplay of the forces operating, i.e., demand and supply. Whatever, the market situation which generated this price may be, with regard to it, the price is always adequate, genuine and real. It cannot be a higher price if no bidder ready to offer a higher price turns up, and it cannot be lower, if no seller ready to deliver at a lower price turns up. Only appearance of such people ready to buy or sell can alter prices. It is the very essence of prices that they are the offshoot of the actions of individuals and groups of individuals acting on their behalf. Prices are generated by the market processes and are the pith of market economy and there is no such thing as prices outside the market, nor can prices be constructed synthetically. They are the resultant of a certain conste....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed to or dependent on the amount of capital employed by the entrepreneur. Profit and loss depend upon the success or failure of the entrepreneur to adjust production to the demand of consumers. The amount of money to be invested in every branch of profit-seeking industrial venture is regulated by the behaviour of consumers. Production for profit is necessarily for use, as profits can only be earned by providing the consumer with those things, which they most urgently want to use. A fortiori, when consumers get diverted to buying dumped imports at prices lower than the non-injurious price, the domestic industry can hold them back only at injurious price levels that would deny them reasonable profit. This would be relevant on the aspect of injury so long the injury margin is lower than the dumping margin, otherwise of course, dumping margin will alone be relevant where it is lower than the injury margin. 11. Admittedly, the non-injurious price (NIP) for the subject goods was fixed by the designated authority for both the investigations undertaken for the purpose of mid-term review at Rs. 80.033 per kg. In the determination of non-injurious price for the domestic industry, the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed imports from multiple countries, the effect may be considered of all the imports as one entity. This practice is referred to as cumulation. The key factor in cumulation is that it is not required that imports from each country need to be found to be individually causing "material" injury. Cumulation of imports may occur only when it is determined that it is appropriate, in light of the conditions of competition between the imported products and the like domestic product. Cumulative assessment of the effect of imports of a product from more than one country under anti-dumping duty investigation is permissible only if :- (i) margin of dumping established in relation to the imports from each country is more than 2 per cent expressed as a percentage of export price. (ii) volume of the imports from each country is more than three percent of the import of like article or they collectively account for more than seven percent of the total imports of like article. (iii) cumulative assessment of the effect of imports is appropriate in light of the conditions of competition between the imported article and the like domest....
X X X X Extracts X X X X
X X X X Extracts X X X X
....dumped imports from a country is to be examined in its comparison with the volume of domestic production. If the volume of dumped imports is wholly insignificant in its comparison with the volume of domestic production and also insignificant in the context of the volume of consumption, it may render the issue of price undercutting causing injury meaningless. For example, a volume of 100 MTs as against the volume of domestic production of 1,00,000 MTs in the POI will cause an injurious dumping only to a degree limited to 100 MTs of sale of domestic product and thenceabove, for the rest of the domestic sales, there will be no dumped imports to cut below the sale price. Therefore, the injurious effect of small quantity of dumped imports (small in comparison with the domestic production and also the consumption), on the domestic industry when examined on an objective basis may have no deleterious effect on the performance of the domestic industry and it cannot be said to be causing material injury. However, in the same instance if the consumption in domestic market is around 100 MTs only then the price undercutting by the dumped imports of even 100 MTs can pose a threat of material inj....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n made thereunder by which the earlier notification dated 12-9-2002 imposing anti-dumping duty on the imports of acrylic fibre (below 1.5 Denier, 1.65 DS) originating in or exported from Italy was rescinded, thereby withdrawing the anti-dumping duty earlier imposed. In this matter also the mid-term review was initiated at the instance of the International Rayon and Synthetic Fibres Committee (CIRFS), Brussel on behalf of the exporter from Italy for review of anti-dumping duty imposed on the imports of subject goods on account of changed circumstances with regard to injury. The designated authority has rightly held that there was sufficient information for initiating the mid-term review. It was held that CIRFS had furnished positive information regarding the changed circumstances of absence of price undercutting and resultant injury to the domestic industry. The authority had, prima facie, examined the veracity of the information before initiating the review and observing that absence of price undercutting was also one of the significant parameters in the injury examination, held that the review was undertaken in accordance with Rule 23 of the said Rules and Article 11.2 of the Anti....