TaxTMI 
TaxTMI 
2013 (12) TMI 1246
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....vied was country specific and on the basis specified in the said table. 2. Notices were returned back un-served on Respondent at sl. No. 9, 22, 23, 26, 31, 49 and 50 with postal remarks thereon. Appellant and Ministry of Finance, the Designated Authority and Domestic Industry only participated as respondents in this appeal hearing. 3. At the outset, in view orders dated 31.05.2007, 22.11.2007, 24.4.2008 passed by the Tribunal recording that civil appeal No. CA-2242 of 2006 being pending before Apex Court on the issue whether chlorine and caustic soda are to be treated as co-products or chlorine is to be treated as by-product against order of Tribunal passed against Notification No 168/2003-Cus dated 14.11.2003 levying definitive antidumping duty on the subject goods and Tribunal having decided to wait for apex court decision on the above civil appeal, enquiry was made from both sides as to whether this bench shall proceed to hear the present appeal or wait till decision of apex court. Ld. Advocate appearing for the appellant categorically submitted that he shall not press any ground on the above issue pending before apex court and withdrew the ground stated in para (U), (V), (W),....
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....and April 2003- March 2004 on the subject goods originating in or exported form the subject countries to opine whether continuation of the definitive antidumping duty notified vide Customs Notification dated 14.11.2003 would be necessary to off-set dumping and whether the injury would likely to continue or recur if the duty is removed or varied. It may be stated that this midterm review was fourth investigation against subject goods as tabulated by the DA in Para 65 of the final finding. ARGUMENTS ON BEHALF OF APPELLANT 7.1. Being aggrieved by customs notification No.72/06-Cus dated 10.7.2006 notifying continuation of the levy recommended by the DA by notification dated 02.06.2006, the appellant came in appeal before Tribunal. Claiming to be an industrial user of the subject goods the appellant has challenged the levy of Anti-Dumping duty on the subject goods on the ground of erroneous composition of producers of Domestic Industry in mid-term review and due to change of composition of producers of Domestic Industry, injury analysis was made faulty; dumping margin as well as injury margin calculated was erroneous and in absence of injury and likelihood of injury, as well as causal....
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....2004 for proper compliance by the domestic industry as well as interested parties in respect of the matters specified in the said trade notices. Since the Designated Authority determines a lis between parties supporting levy of anti-dumping duty and those opposing, the said authority should act in accordance with law as has been held by Apex Court in judgement of ATMA - 2011 (9263) ELT 481 (S.C.). To submit so, para 52 and para 53 of the judgement was placed stressing that Designated Authority performs quasi-judicial function under Customs Tariff Act 1975. Natural justice is to be followed as has been held in para 55 to 59 of the judgement. The Authority should not have changed composition of domestic industry but should have taken the industry as a whole. 7.5 Inviting attention to page 25 of the paper-book it was submitted that changed circumstances resulting no injury to the domestic industry warranted mid term review. So also when the domestic supply was insufficient compared to the demand of the subject goods, continuance of levy of anti-dumping duty was unwarranted. It was further submitted that the appellant justified in the written submission that the composition of domesti....
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.... export from Taiwan soon after levy of definitive antidumping duty and record of DGCI&S established no export during POI. 7.9. It was further submitted on behalf of appellant that when there was no export from Taiwan there was no dumping margin. That need not be determined and in absence of such determination there is no question of imposition of Anti-dumping duty in mid term review. There was also no situation for calculating dumping margin and injury margin in absence of export from Taiwan. Accordingly calculation of dumping margin and injury margin is unsustainable following the decision in the case of B.P. Foam, reported in 2011 (270) ELT 715 (Tri.-Del.) 7.10. It was further submitted that export price of Taiwan should not have been determined and third country export price cannot be taken as basis. DA has followed inconsistent practice in this regard which is established from a sunset review notified on 22.7.2009 revealing inconsistent practice (Para 69, 70 & 71). Similarly another sunset review notification dated 17.1.2012 also shows such practice of Designated Authority (Para 29 & 30 page 143). So also notification dated 10.4.2012 reveals similar position (refer page 169, ....
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.... into any other information that it requires. It was bound to disclose relevant information to satisfy that the dumping margin was rightly determined taking the normal value and export price of subject goods correctly. When there was no likelihood of injury or recurrence thereof, the Authority should have withdrawn the levy. 7.15. It was lastly argued that for the aforesaid reasons, there was no causal link between dumping and injury claimed by domestic industry and calculation of dumping margin as well injury was erroneous. ARGUMENT OF DOMESTIC INDUSTRY 8.1 On behalf of domestic industry it was argued that the mid term review is not the original investigation for levy of anti dumping duty but only a process followed after definitive antidumping duty is imposed to ascertain whether Cessation of levy of Anti-dumping duty is likely to lead to continuation or recurrence of dumping and injury. Therefore, the argument of composition of producers to ascertain status of domestic industry does not merit consideration looking to object of first proviso to section 9A (5) of the Act. Law does not warrant re-examination of composition of the producers of domestic industry in review exercise....
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....eria before the other, that has not expressly indicated a hierarchy or sequencing, between the two definitions. Indeed the test provided by the provision has used the term or rather than the terms that would indicate a hierarchy, such as first 'or' if not, then. The use of the term or indicates the flexibility. This grants liberty to DA with respect to definition of the domestic industry. The authority has a choice in the manner indicated above. Inherent flexibility in the rule means that the DA is not required to first admit to identify every domestic producer before it can define the domestic industry as those producers whose output constitutes a major proportion of total domestic production. The domestic industries vary widely from investigation to investigation and what would be easier in one situation may not be in another. Therefore the DA in the present case applying the output criteria has not committed any error to define domestic industry. Considering total domestic production the concept of domestic industry was adopted by the DA in the present mid term review taking those producers producing major proportion of the total domestic production of the subject goods. It ....
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....le laid down in the case of Lubrizol India (Pvt.) Ltd. vs. D.A. -2005 (187) ELT 402 (Tri. Delhi) by the Tribunal, so far as criteria of 'major proportion' in the context of Rule 2(b) defining domestic industry is concerned that would mean the share which means significant or important share. Such an interpretation when permissible in law, the share of the producers in the total domestic production being more than 50% in the present appeal, that was undoubtedly significant and important to constitute domestic industry. The expression major proportion of total domestic production cannot be viewed from the angle of solving a mathematical sum involving comparative measurements of size of different parts of a whole. The phrase is used in the context of the production of domestic producers and calls for broad interpretation so as to take in its sweep collective outputs that constitute a significant or important share of the total domestic production of the subject goods by the producers engaged in the manufacture or engaged in an activity connected with the manufacture of such article, as contemplated by Rule 2 (b). 8.7 According to learned Advocate for domestic industry, the Normal V....
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....y realization of export price to third countries. Considering such prices as basis, the resultant landed price of imports was considered to be significantly below the selling prices in India. That was also below the non injurious price (NIP). One of the Taiwanese exporters had committed as high as 1.5 lac MT supplies against single tender which was indicative of its surplus capacity and export potential. Export price from Taiwan to third countries were not only significantly below the normal value but also the prevailing prices in India and non injurious price. 8.11 It was also submitted by the ld. Advocate for the Domestic Industry that following the ratio laid down by the Tribunal in the case of Virchow Laboratories Ltd. vs. Ministry of Finance 2002 (214) ELT 60 (Trib. Delhi) the importer has no right to contend that normal value was not properly determined by DA. 8.12 It was further submitted that the appellant importers and exporters failed to demonstrate that withdrawal of anti dumping duty would not lead to likelihood of injury to the domestic industry and continued imposition of the duty was unnecessary to offset dumping. Producers in Taiwan were found to have shipped good....
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....midterm review is to examine whether dumping and injury is likely to continue or recur if the duty is removed or withdrawn. Therefore, dumping having resulted in injury to the domestic industry, the appeal should fail. 8.16 Domestic industry placed reliance on the decision of Hon'ble High Court of Delhi in the case of Kalyani Steels Ltd. vs. Revenue Secretary, M.F. -2008 (224) ELT 47 (Del.) to submit that power conferred on the D.A. in terms of first proviso to section 9A(5) of the Act to make Sunset Review does not take away his power to make midterm review. His arena of powers extends to review of both kinds to be conducted in the same manner. D.A. does not make original investigation in a review proceeding for the distinguished object of each other. It was further submitted that even in the panel reports it is the view abroad that possibility or recurrence of dumping is essential consideration in review. 8.17 It was plea of domestic industry that analysis of different parameters relating to injury prescribed by the 1995 Rules established that domestic industry was yet to achieve financial stability which was struggling to get reasonable return considering investment made in ca....
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....o de-minimus criteria. Even for a likelihood determination under a review which is prospective in nature there cannot be any objection of cumulation of imports to determine likelihood of injury. The DA has very rightly made cumulation of various injury factors in respect of imports from EU (excluding France) Indonesia, Chinese Taipei even though there were no exports from Taiwan during POI. 8.21 Domestic industry further submitted that there was no ground in the memo of appeal of appellant to plead that there was erroneous determination of NIP and injury margin. Tribunal although granted 4 weeks time to the appellant to file application to bring out such ground, nothing was done by the appellant even after expiry of the said time. Therefore, appellant was barred to plead on any ground on the above aspect and Tribunal should not entertain such ground. To submit so, domestic industry relied on Apex Court judgement in the case of National Textile Corporation V. Naresh Kumar Badrikumar Jagad and ors -AIR 2012 SC 264: (2011) 12SCC 695, where it was held that additional ground is not entertainable at the belated stage. 8.22 The Designated Authority took all facts into consideration whi....
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....said premises it was prayed by the domestic industry that the appeal is liable to be dismissed when withdrawal of the levy is unwarranted. ARGUMENT ON BEHALF OF DA 9.1 Repelling all the contentions of appellant, learned Advocate for DA submitted that upon filing of application by the appellant for review before DA, request was made to the Central Bard of Excise and Customs (CBEC) and Director General of Commercial Intelligence and Statistics (DGCI&S), Kolkata to provide details of imports of subject goods made to India for the period of investigation (POI) to determine dumping and margin and import figures relating to preceding three years were obtained for injury analysis. 9.2 The D.A. provided copies of the non-confidential version of the application to the known producers and/or exporters and the Embassy/territory of the subject countries in accordance with Rules 6(3) of the 1995 Rules. Copy of non-confidential application was also provided to other interested parties wherever and whenever requested. Entire information was available in public record for inspection by appellant. Nothing specific was pleaded by appellant before DA at any time alleging claim of excess confidenti....
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....injury to the domestic industry is likely to continue or recur. While concluding so, the DA recommended the Central Government to remove the injury to the domestic industry prescribing the levy equal to the margin of dumping or the margin of injury whichever was lower. 9.8 To determine the levy, value of import was compared with the weighted average non-injurious price (NIP) of the domestic industry determined for the period of investigation. In terms of para 48 to 98 of the finding various injury parameters were examined. 9.9 Cumulative assessment of the injury to the Domestic Industry by the export of subject goods from subject countries was made and volume effect as well as price effect on the Domestic Industry was analysed. The price under cutting due to import resulted with under cutting margin in the range of 10% to 48% during the period of investigation. Similarly, the price under selling margin was worked out to be 17% to 56% during that period. Various injury parameters as prescribed by the 1995 Rules were taken into consideration to make injury analysis. 9.10 It was further submitted by DA that it was conscious that price under selling was an important indicator of the....
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.... causal link between dumping and injury. Therefore, DAs enquiry was transparent and its findings are flaw less as well as lawful which were made following principles of natural justice and following the law of the land as well as ratio laid down by Apex Court and Tribunal in various decisions on the subject. That does not call for any interference. It was accordingly prayed that appeal may be dismissed. ARGUMENT OF DEPT. OF REVENUE MINISTRY OF FINANCE. 10.1 On behalf of Dept. of Revenue it was argued that levy of anti dumping duty is a trade remedy measure which is not in the nature of taxation. The levy prohibits dumping to provide level playing field in world trade protecting domestic industry. The DA is authorised under law to carry out investigation when dumping and injury is complained by domestic industry. Review is done to determine likelihood of dumping and injury. In this case, Dept. of Revenue of Ministry of Finance examining recommendation of DA in midterm review considered proper to notify continuation of the levy. 10.2 Central Government making an overall assessment of health of domestic industry notified extension of tenure of levy rightly. The DA while making re....
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....lt scope of review prescribed by Rule 23 of 1995 Rules, as under: 12.1 In a review investigation under Rule 23, the authority is required to examine whether injury was likely to continue or recur if duty were removed. Therefore, the impact of various determinations made in the review investigation was required to be viewed in their overall context to find out whether there was no justification for the continued imposition of the duty. The factors which may be relevant for initiation of the anti-dumping duty proceedings under Rule 5, such as identification of the article under consideration and the situation where investigation may be required to be terminated as per Rule 14, would not govern the issue of deciding whether there is no justification for continued imposition of duty because, they have a bearing on imposition of duties rather than on the impost being continued. Section 9A (5) contemplates revocation of anti-dumping duty even earlier than the period of its expiry after five years from the date of imposition. Therefore, it contemplates not only a sunset review, but also a mid-term review and as per the first pr....
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....orts, prices, and impact on domestic producers. Thus the D.A. has to address the question as to whether the domestic industry is likely to be materially injured again, if duties are lifted. Sunset review entails a likelihood determination in which present levels of dumping is obviously not so relevant as is the likelihood of continuance or recurrence of dumping. Moreover, during the investigation period, the anti-dumping duty would be in force and hence, the current level of dumping may be non-existent or minimal. The exporters under investigation may also sell at a non-dumped price during this period knowing fully well that a sunset review would be in progress. Hence, the criteria under Section 9A (1) that the anti-dumping duty should not exceed the dumping margin would have no practical application for continuance of the duty under Section 9A(5). There is also no such warrant in law under the said Section 9A (5) to do so. [ Emphasis supplied] 11.3 Thus review is an examination of post levy situation to ascertain whether cessation of the levy is likely to lead continuation or recurrence of dumpi....
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....ury, where applicable, and (c) Where applicable, a causal link between such dumped imports and alleged injury. (3) The designated authority shall not initiate an investigation pursuant to an application made under Sub-Rule(1) unless:- (a) It determines, on the basis of an examination of the degree of support for, or opposition to the application expressed by domestic producers of the like product, that the application has been made by or on behalf of the domestic industry: Provided that no investigation shall be initiated if domestic producers expressly supporting the application account for less than twenty five per cent of the total production of the like article by the domestic industry, and (b) it examines the accuracy and adequacy of the evidence provided in the application and satisfies itself that there is sufficient evidence regarding:- (i) dumping, (ii) injury, where applicable; and (iii) where applicable, a causal link between such dumped imports and the alleged injury, to justify the initiation of an investigation. Explanation:- For the purpose of this rule the application shall be deemed to have been made by or on behalf of the domestic industry, if it is suppo....
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....here in the territory; Explanation: - For the purposes of this clause:- (i) Producers shall be deemed to be related to exporters or importers only if,- (a) One of them directly or indirectly controls the other; or (b) Both of them are directly or indirectly controlled by a third person; or (c) Together they directly or indirectly a third person subject to the condition that are grounds for believing or suspecting that the effect of the relationship is such as to cause the producers to behave differently from non-related producers. (ii) a producer shall be deemed to control another producer when the former is legally or operationally in a position to exercise restraint or direction over the latter. [Emphasis supplied] 11.7 There was misconception by the appellant about review and investigation. Levy of definitive anti dumping duty under section 9A (1) of the Act is done carrying out investigation to determine dumping and injury to the domestic industry. But after the levy of definitive anti dumping duty, continuation or cessation thereof is examined by Review exercise. Review is post levy event, mandated by first proviso to section 9A (5) of the Act. It is immaterial whether....
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.... whose collective output of subject goods constitute a major proportion of the total domestic production they have a right to complain dumping and injury. In other words monopoly is ruled out by that Rule. Suo motu investigation by DA under Rule 5 (4) of 1995 Rules is also to protect larger interest of domestic industry. 12.2 Tribunal in the case of Lubrizol India (Pvt) ltd (supra) has held that major proportion means substantial quantity produced which is higher. This criteria reflects larger interest of domestic industry which is envisaged to be protected by law. In the present case, the ratio laid down by Tribunal in Lubrizols case is applicable in view of major proportion of total domestic production was more than 50% and constitution of domestic industry not questionable. 12.3 It flows from the aforesaid discussions that on complaint of domestic industry, anti-dumping investigation is carried out by Designated Authority provided condition of sub rule 3(b) of Rule 5 of 1995 Rules is fulfilled. Suo-moto investigation under sub rule (4) of Rule 5 is also regulated by sub-Rule. So far as the review governed by Rule 23 of 1995 Rules is concerned that does not warrant re-examin....
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....as impact thereof. Probability of continuation and recurrence of dumping and injury was determined by an objective analysis by the DA. Appellant fails in its contention that the DA has not considered the domestic industry as a whole. Reliance on the judgment of Apex Court in Reliance Industrys case (supra) was misplaced since that judgment related to cost of power used by Reliance Industry from its Captive Power Plant to determine its cost of production while all other producers of domestic industry had no such facility. That did not represent market price of power. In the present case, larger interest of the domestic industry as a whole entered into consideration of DA. Therefore appeal fails on this count. EXTENT OF INQUIRY BY DA 13 To examine the continuation or recurring of dumping and injury by the export of subject goods and causal link thereof, DA sent export questionnaire to all known producer/exporter for the purpose of determination of normal value in accordance with section 9A(1)(c) of the Act. None of the exporter/producers from Indonesia and EU (Excluding France) made response to the same. Only Formosa Plastic Corporation (FPC) from Chinese Taipei responded. Taiwane....
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....er than the actual prices claimed by Formosa Plastic Corporation (FPC). Therefore, DA followed chlor Alkali Market Report statistics to determine normal value of the subject goods of these two countries. Similarly export price of these two countries was determined on the basis of transaction wise imports provided by DGCI & S. There was export of 3745 MTS of subject goods from Indonesia and 165 MT from EU (exche. diary France). Accordingly ex-factory export price was determined for all exporters/producers therefrom. Such determination being rational, nothing could be challenged by the appellant and appellant fails in its contention as to erroneous determination of normal value and export price. Tribunal in the case of AIIGMA V. Designated Authorty -2000 (119) ELT 333 (Tri - Del) and D P Foam (P) Ltd. V. Designated Authority has held that appellant importer do not have an inherent right to question the determination of the normal value. LIKELIHOOD OF DUMPING, INJURY AND CUMULATIVE ASSESSMENT 15.1 The Domestic Industry submitted before Designated Authority that FPC was undertaking significant expansion to the tune of 466000 M.T. (evidence from Website of FPC). That guided the DA to ....
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....ion, the designated authority will cumulatively assess the effect of such imports, only when it determines that (a) the margin of dumping established in relation to the imports from each country is more than two percent expressed as percentage of export price and the volume of the imports from each country is three percent of the import of like article or where the export of individual countries less than three percent, the imports collectively accounts for more than seven percent of the import of like article and (b) cumulative assessment of the effect of imports is appropriate in light of the conditions of competition between the imported article and the like domestic articles. [Emphasis supplied] 15.4 In the above decision, Tribunal in Para 17 also held as under: 17. This is a case of sunset review. The imports from the subject 3 countries, namely China PR, Chinese Taipei and Korea RP, which were already subject to anti-dumping duty, had ho doubt come down to less than 7% in the POL But as recorded by the D.A., imports from other countries (such as USA and Singapore), which were also simultaneously subje....
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....ped imports from Korea and China during the base year and subsequently faced injury due to dumped import from Indonesia Chinese Taipei and EU (excluding France). Only due to imposition of definitive anti-dumping duty, performance of domestic industry improved establishing that injury was sustained by domestic industry resulting in decline in the return on investments year to year as stated above. 15.8 Actual and potential increase in dumped import and its impact on market share of the domestic industry was examined by Designated Authority in para 67 of the final finding. It was found that the decline in the export was due to levy of definitive anti-dumping duty. Price under cutting was examined by the DA in para 71 of the final finding and he found that under cutting margin was ranging from 10% to 48% during the period of investigation indicating that dumped imports were cheaper compared to domestic product. Similarly price under selling was examined by the authority in para 72 of the final finding and recorded that the under selling margin was ranging from 17% to 56% during POI. This indicated serious injury to domestic industry. 15.9 The non-injurious price calculated by DA rem....
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....ing relevant information. It was noticed that all possible steps were taken by D.A. to place the information on public domain without any suppression or concealment. The Economic law practice firm representing the appellant, inspected public file on 18.7.2005. So also copy of non-confidential version of representation of domestic industry was obtained by the said representative on 05.11.2005. Therefore, when public record reveals such transparency, action of DA is not challengeable on the ground of claim of excessive confidentiality. The plea of claiming of excessive confidentiality by D.A. is baseless when public record was open for inspection. 16.2 The profitability and NIP determination figures of domestic producers were not liable to be exposed as such disclosure shall be threat to their survival. No man of ordinary prudence and diligence will disclose his trade secret, cost of production and the know-how he uses, so as to protect himself. Producers of domestic industry are not an exception to such commercial expediency. It is established from record that the D.A. acted within the frame work of law making every material fact available on public record meant for inspection. 16....