TaxTMI 
TaxTMI 
2007 (6) TMI 326
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....msp;By the earlier Notification dated 21-11-2003, the designated authority had notified its final findings recommending definitive anti-dumping duty on the imports of borax decahydrates originating in or exported from Turkey and China PR and the duty was imposed on the subject goods by Notification dated 7-1-2004. Thereafter, the producer Isletnelerie Genel, Mudurlugu (ETI Maden for short) of Turkey and the exporter Boro Chemi International DTE Ltd., Singapore, filed the request under Rule 23 of the Customs Tariff (Identification, Assessment and Collection of Duty or Additional Duty on Dumped Articles and for Determination of Injury) Rules, 1995, for a mid-term review. The application was made after about 13 months of the initial imposition of duty. According to the applicants, the CIF export price to India of the subject goods had increased and the landed value was higher than the reference price fixed. Customs duty on Borax decahydrate (BDH) had been reduced from 30% to 20% and that the normal value had come down significantly. The designated authority initiated the review proceedings by the Notification dated 21-11-2003. The investigation was carried out for the purpose of mid t....
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.... normal value was not true because as per Appendix 2A of the Questionnaire, the average price for the domestic market in Turkey was indexed at 0.88 in the years 2002 and 2003, and it was shown to have come down only to 0.86 in 2004, the designated authority held that the average rate shown for the years 2002 and 2003 was based on the average exchange rate as prevailed during those years. It was observed that in the original investigation, the designated authority had taken the view that since there was significant fluctuation in the exchange rate, the sale price of transactions in the domestic market should be converted into U.S. Dollars at the exchange rate applicable on the date of the transaction. It was found that all the domestic sales invoices of the subject goods in the country of export also carried the invoice amount in U.S. Dollars based on the exchange rate of the particular day of the sale. On this very basis, the 'normal value' was determined in the initial imposition which resulted in the dumping margin of 12.44%. It was held that the same methodology was adopted for determining the domestic price for the period of review which had significantly fallen than the domest....
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....duction of the subject goods. The designated authority also carried out 80:20 test to determine whether less than 20% of the total sales were below the costs in terms of volume. It was found that more than 20% of total sales made in the domestic market were below cost. The authority, therefore, took into consideration only the profitable transaction for determination of the normal value for the co-operating exporter. Keeping in view the price in US Dollars at which the subject goods were sold by the producer and the weighted average normal value during the period of investigation, the authority worked out the sales price at the ex-factory level for the domestic sales; and after making adjustments towards the handling charges and inland freight which was duly verified, the weighted average normal value at ex-factory level was worked out. 6. Examining the contentions of the domestic industry in connection with the export price, it was held that ocean freight, marine insurance, margin of Boro Chemi International, Singapore, inland freight in Turkey, port handling and port charges, had been reduced from the export price to arrive at the price at the ex-factory level. It was found....
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.... of Boro Chemi International, Singapore from the year 2003. Boro Chemi India was manufacturing boric acid powder and had its manufacturing unit in India. It was found that apart from a solitary transaction, Boro Chemi India did not appear to have dealt with the subject product, i.e., borax decahydrate during the period of investigation. It was held that Boro Chemi India was not concerned with the subject goods apart from a couple of transactions as discussed in Paragraph 16 of the final findings. 8. The export price for ETI Maden through the exporter Boro Chemi International, Singapore was established on the basis of the prices actually paid or payable for the product when sold to India. After taking into consideration the exports of the subject goods to India during the period of investigation in terms of U.S. Dollars and considering the adjustments made towards discounts, transport, insurance, handling, loading and other expenditure, to arrive at ex-factory export price the weighted net export price at factory level was worked out by the designated authority. The dumping margin was determined in accordance with the said rules on the basis of a comparison of weighted average....
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....nst the export price to India which was 0.87(indexed). The quantity of exports to other countries was found almost seven times more than the exports to India. The export price to other countries charged by the producer ETI was also higher than the export price to India by about 19%. It was also verified and found that the Indian exporters had resold the product to other customers and in India at a significantly higher price than the price at which they had imported it. It was, therefore, held that the export price to India was not artificially high, but it was the normal course of trade to India reflecting the ability of the domestic market to absorb still higher prices. The authority concluded that no dumping margin for the subject goods had been established with regard to imports from Turkey and that there was no likelihood of continued dumping of the subject goods from Turkey. It was held that continued imposition of anti-dumping duty on the subject goods from Turkey was not necessary to off set dumping and injury to the domestic industry. It was further held that there was no justification for continuation of the duty against Turkey. Therefore, a recommendation for revocation o....
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.... the invoices issued by Boro Chemi International, Singapore on the Indian customers. Since the export price was available, there was no question of determining any constructed export price, as sought to be contended on behalf of the appellant-domestic industry. 11. It was argued by the learned Counsel for the appellant that the determination of export price was not appropriate because various costs such as expenses incurred by Boro Chemi India, bank charges incurred by ETI Turkey and reasonable profit of Boro Chemi, Singapore had not been taken into account. It, however, appears from the record, that Boro Chemi India was not involved in the sales or after sales service of the product in India. The contention of the domestic industry that deductions should have been made of the expenses incurred by Boro Chemi India, bank charges incurred by the Turkish producer and reasonable profit of Singaporean exporter, while determining the export price, is misconceived. It transpires from the record that, the entire actual profit margin of Boro Chemi International, Singapore, the exporter, which was worked out at 18.6%, had been deducted in arriving at the ex-factory price. Moreover, the....
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....pact of exchange, rate fluctuations on the determination of the dumping margin. Referring to Appendix 2A to the questionnaire answered by the exporter, it was submitted that if a weighted exchange rate was adopted, the dumping margin would still be about 9%. It was submitted that there was no reason why the US dollar had been adopted and not other currency such as Euro or Pound for conversion purposes. It was submitted that different dumping margins will appear if the normal value weighted average was to be converted into US dollar and then compared transaction-wise export price. On the basis of para 6 of Annexure-I to the Rules, it was argued that the conversion was required to be made of export price into local currency and not of local currency to any third currency. From Appendix 2A of the response of the producer to the questionnaire, it was sought to be pointed out that the minor changes in the export price and the normal value reflected from the indexed figures mentioned therein, did not justify reduction of margin of dumping from 12.4% to -1.38%. 12.1 In this context, we may note that, in the original investigation, while working out the anti-dumping margin of 12.44%,....
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....ormal value. When such comparison requires a conversion of currencies, it should be made by using the rate of exchange on the date of sale. In the present case, the requisite data showing the rate of exchange between US Dollar and the local currency Lira, prevailing on the dates of domestic transactions, appeared in the invoices; and the export price was in US Dollars. Since conversion of currencies (Lira and US Dollar) was done on the basis of the rate of exchange on the date of sale, the designated authority rightly adopted the same for a fair comparison between the export price and the normal value, particularly when the earlier dumping margin (12.44%) was worked out on the same footing for the original period of investigation pursuant to which the duty was initially imposed. 13.2 In the present case, the invoices indicate the rate of exchange on the date of invoice. Normally, the rate of sale contemplated in paragraph 6(iii) of Annexure 1 to the Rules would be the date of contract, purchase order, order confirmation, or invoice, whichever establishes material terms of sale. The invoices of the domestic sale in Turkey issued by the producer ETI incorporated the material te....
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....rred to Bandirma Boron Works for use in the manufacture of BPH and Borax decahydrate. In the context of the objections raised by the domestic industry and its contention that the authority must verify the cost of production of the major input and the allegation that the same raw material was being sold in the domestic market or exported at a higher price, the designated authority verified the cost of production of tincal concentrate, and after physical 'on-site' verification by its team, determined that raw material tincal was not being supplied to any affiliate but produced by the same company which was selling the goods in the domestic market. It was also verified that only a miniscule percentage of tincal concentrate was sold in the domestic market, and that too, to the consumers like universities and for research and development purposes. The rest of the tincal was used in their plant for production of other Boron products. On verification of the record, it was found by the designated authority that tincal consumed and captively produced in the manufacture of borax decahydrates was valued at actual cost of production. The authority also verified the actual cost of production of....
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....mined the lasting nature of the change in the selling behaviour of Boro Chemi International. Additional evidence was sought to be relied upon to show that after the withdrawal of the duties, the landed export prices had fallen significantly, supporting the contention that there was likelihood of recurrence of dumping. 15.1 In the present case, the designated authority has, on the basis of the material on record, concluded that there was no likelihood of recurrence of dumping. Ordinarily, when there is no dumping margin and the exports are at un-dumped price, and there are no circumstances to indicate likelihood of recurrence of dumping, there would be no justification for continuance of the anti-dumping duty. The designated authority, on examination of the relevant record found that there were significant exports of the subject goods to countries other than India during the period of investigation and in the preceding two years. The domestic sales in Turkey had marginally increased during the second-half of the POI and the domestic market remained very high throughout the POI and two years prior to that. The facts indicated that the domestic demand for the subject goods in Tu....
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....o be examined with reference to exports to third country and such examination is required to be done on country specific basis and not on the basis of global average. 16.1 In this context, the learned counsel appearing for the exporter submitted that if there was no dumping margin, duty was required to be withdrawn and there would be no warrant for imposing anti-dumping duty under Section 9A in the absence of a dumping margin. It was also argued that there was no need to examine likelihood or recurrence of dumping in a mid term review unlike in a sun set review under Section 9A(5) of the Act. He submitted that determination of likelihood of recurrence of dumping and injury which was to be considered in a sun-set review under Section 9A(5) when the period of five years of imposition is to expire, cannot be done in cases of mid term review under Rule 23, which did not contain such language and merely provided that the designated authority shall review the need for the continued imposition of duties and if it is satisfied, on the basis of the information received by it, that there is no justification for continued imposition thereof he shall recommend its withdrawal. 16.2 ....
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.... than the period of its normal duration of five years. It is, however, clear that even for such earlier revocation the review has to be undertaken, and it is in this context that, the provisions of Rule 23 assume significance. As noted above, sub-section (6) of Section 9 in its opening part contemplates ascertaining and determining the margin of dumping from time to time. Rule 23(1) enables the designated authority to undertake review from time to time as regards the need for the continued imposition of anti-dumping duty. Reviewing the need for continuance of anti-dumping duty is one of the duties of the designated authority as per clause (e) of Rule 4(1) of the said Rules. Rule 23 employs the expression, "continued imposition of anti-dumping duty" and, if there is no justification for such continued imposition, it contemplates withdrawal of duty. The need for the continued imposition of duty will also cover a situation where the question of earlier revocation is required to be considered during the currency of the period of five years of the impost. The satisfaction of the designated authority that there is no justification for the continued imposition of such duty has to be reach....