TaxTMI 
TaxTMI 
2014 (1) TMI 383
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....mending the said levy equal to the lesser of margin of dumping and margin of injury are under challenge in this appeal by the exporter appellant M/s Sasol Solvents from South Africa. 2. The period of investigation (POI) relating to dumping involved in this appeal was 1st July 2005 to 30th June 2006 and injury investigation covered the period April 2003-March 2004, April 2004-March 2005 and April 2005- March 2006 and the POI. Recommendation for the levy aforesaid was made by DA drawing following conclusions: (a) That the subject goods were exported to India from the subject countries below its normal value; (b) The domestic industry has suffered material injury; and (c) The injury was caused by the dumped imports from subject countries; 3. During currency of levy of definitive antidumping duty by the customs notification aforesaid, sunset review has also been initiated. 4.1. Hindustan Organic Chemicals Ltd. Mumbai and M/s Schenectady Herdiallia Ltd. Mumbai (Renamed as SI Group Ltd.) constituting domestic industry, producing 100% of total production of Acetone in India, made an application dated 27.02.2006 to the Designated Authority alleging dumping of subject goods originatin....
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....on against Russian Exports was terminated by a Notification dated 14.03.2008. 4.5. Following due process of law, the DA, carried out preliminary investigation against exports from subject countries. On the basis of evidence came to its record, the authority found that there was price under cutting and price under selling. Therefore as an interim measure, the authority recommended imposition of provisional antidumping duty in terms of preliminary finding notified on 25/04/2007 as amended by Notification dated 25.05.2007. While recommending the levy of provisional antidumping duty, the DA also indicated the procedure to be followed for detailed investigation subsequently. Based on the preliminary findings, provisional antidumping duty was levied by the Ministry of Finance by Customs Notification No. 77/2007-Cus dated 19/06/2007. 5. Subsequent to levy of provisional antidumping duty, detailed investigation was carried out by the DA. He considered the data/information of the following exporters from the subject countries to determine the dumping and dumping margin as well as to make injury analysis and noted submission of M/s Dow Chemicals to treat it as interested party even though ....
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....d if that concern is excluded from the constitution of domestic industry when imported acetone by SI group were not available for sale in domestic market. 9. Similarly HOCL which was also a complainant domestic producer was a BIFR company being sick and there was complete erosion of funds due to accumulated losses suffered. But the DA considered it proper not to disqualify that company to constitute domestic industry and seek relief under Anti-dumping law. That Authority allowed HOCL to constitute domestic industry for the reason that it shall further sustain injury due to import of subject goods if deprived of the benefit of the trade remedy measure. The objection of appellant to exclude that company from purview of domestic industry did not get appreciation by DA. Both the producers constituted domestic industry. DETERMINATION OF NORMAL VALUE, EXPORT PRICE AND DUMPING MARGIN BY DA 10.1. No exporters of USA and EU responded to the initiation Notification. The DA taking the average price reported in ICIS LOR (US Gulf) and ICIS LOR (EUROPE) for the POI determined normal value of exports for these two countries. 10.2. In so far as normal value relating to exports from Singapore i....
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....oration (FCFC) and M/s Taiwan Chemical Corporation (TPCC). Disregarding sales made by (FCFC) to affiliated parties not made in the ordinary course of business, the DA adopted the sale made to non-affiliated parties and determined normal value of exports of bulk and packed goods from Chinese Taipei making adjustment of various expenses on weighted average basis. 11.1. The ex-factory export price of bulk exports from USA was determined taking data from DGCI&S data bank, allowing necessary adjustments since the exporters from USA were non-cooperating exporters. Similarly the exporters from EU being non-cooperating exporters, the export price of bulk goods from that country was determined in the same manner as that was determined for USA. 11.2. Mitsui & Co. Ltd. of Singapore having provided transactions wise information relating to exports, those data were verified and making permissible adjustments towards certain expenses, Ex-factory price of bulk goods was determined accordingly. Sumitomo Corporation of Singapore having raised invoices on M/s Petrochem Middle East, UAE, transaction wise information provided by the said exporters was considered and export price of bulk goods was de....
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....s *** *** *** *** *** *** *** *** 65.38% South Africa M/s Sasol Solvents *** *** *** *** *** *** *** 24.50% 24.50% Non-cooperating Exporters *** *** *** *** *** *** *** *** 35.68% Chinese Taipei M/s Formosa Chemicals *** *** *** *** *** *** *** *** 14.43% M/s Taiwan Prosperity *** *** *** *** *** *** *** *** 13.84% Non-cooperating exporters *** *** *** *** *** *** *** 38.78% USA Non-cooperating exporters *** *** *** *** *** *** *** *** 80.57% European Union Non-cooperating exporters *** *** *** *** *** *** *** *** 86.83% INJURY ANALYSIS AND CUMULATIVE ASSESSMENT BY DA 13.1. Considering submissions of domestic industries and cooperating exporter as well as importer, the Designated Authority made Volume Effec....
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.... in 2004-05 and 55.22% during POI.[Emphasis supplied] 13.3. Price underselling and price undercutting was examined by Designated Authority in Para 74 in respect of the import of subject goods from subject countries as tabulated below: Unit 2003-04 2004-05 2005-06 July'05 to June'06 Selling price-DI Rs/MT Trend Indexed 100 131 119 113 Customs Duty % 25 20 14.79 14.17 Landed Value USA Rs/MT 32723 48653 38394 37553 Price Undercutting Rs/MT *** *** *** *** Price Undercutting % *** *** *** 1-10% NIP *** *** Price Underselling 5-15 Europe Rs/MT 33244 47052 43764 37763 Price Undercutting Rs/MT *** *** *** Price Undercutting % NIP *** Price Underselling% Price Underselling 1-10 5-15*** were confidential in nature for which not depicted by DA. 13.4. On examination of injury Parameters i.e. profit and actual and potential effects on the cash flow, return on investment and....
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.... domestic industry. 14.4. Appellant further submitted that while antidumping investigation related to Acetone, Phenol was excluded from the purview of subject goods in the investigation which was unwarranted. When SI Group was importing Phenol there was no need to exclude the Phenol from the purview of investigation since that importer was considered by DA as producer of the domestic industry. 14.5. It was further argued on behalf of appellant that the constitution of the domestic industry was erroneous when the goods produced by the producers were different. The appellant relied on the decision in Thai Acrylic Fibre Co. Ltd. Vs. Designated Authority - 2010 (253) ELT 564 (Tri.-Del.) and particularly placing reliance on para-22 of the reported decision and para-56 and para-57 of the final findings appearing in para-81 of the appeal folder it was submitted by the appellant that since SI group imported Acetone under Duty Exemption Scheme and HOCL being a sick company, they cannot be domestic industry. 14.6. SI Group having imported subject goods had no right to complain of dumping individually because duty free imports should be excluded for the purpose of injury analysis. The Auth....
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.... of the WTO Agreement was relied upon to submit that an application for investigation should contain certain particulars. When that was lacking, there should not have been any investigation. The designated authority initiated investigation against exports from South Korea differently which has caused prejudice to the appellant. Reliance was placed on Para 323 of page 381 of the Panel report in Guatimala case in this regard. 14.11. On the above grounds it was prayed by appellant that the appeal may be allowed quashing the final finding of DA as well as customs Notification levying anti dumping duty. CONTENTION OF REVENUE 15.1. On behalf of the Department of Revenue, Ministry of Finance it was submitted by its representative that existence, degree and effect of dumping and injury was determined by proper investigation by DA and that having been done, neither his recommendations nor the Customs Notification can be set aside following the decision of Hon'ble High Court of Gujarat in the case of 2013 (291) ELT 327 (Guj.). 15.2. When both producers were manufacturing 100% of the domestic output, they had right to complain when there was dumping of subject goods and they suffered inju....
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....ilarly, magnitude of injury margin is recorded by DA in Para 102 at page 93 of the appeal folder. Therefore, DA has rightly recommended anti dumping duty and that was rightly acted upon by Customs Notification dated 11.3.2008. 16.3. Both the requirements of the levy i.e. dumping and injury followed by causal link being satisfied, domestic Industry had right to complain for protection by the levy. The appeal is, therefore, liable to be dismissed. 16.4. The DA rightly considered the constitution of domestic industry and entertained the complaint against dumping and injury under Rule 2(b) of the 1995 Rules. The import of subject goods by SI group under advance license was for use in manufacture of final goods meant for export without sale thereof in the domestic market; it was not liable to be excluded from constitution of domestic industry having suffered injury being manufacturer of subject goods. Relying on the decision in the case of Gujarat Fertilizers & Chem. Ltd. Vs. Addl. Secy & DA - reported in 2012 (286) ELT 348 (Cal.) (para 13) it was submitted that an importer can also be an applicant as a domestic industry and there is no bar in law to be so. 16.5. Relying on Para 39 o....
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....as nothing wrong to initiate anti dumping investigation in existence of dumping and injury. The DA was justified to initiate investigation properly against exports from subject countries considering the de minimus criteria and to initiate separate investigation against exports of South Korea by a subsequent initiation Notification which is not denied by law. 16.10. Proper consideration of injury Parameters having been made while conducting investigation simultaneously against exports from subject countries, under a single initiation Notification; final finding of DA as well as customs Notification cannot be assailed. It was further argued that even if Koran exports are included for calculation of dumping margin and injury analysis that shall not bring any difference to the investigation result as well as recommendations made by the DA. Rather the injury shall be more since export prices of Korea exports were lower than the normal value and appellants case shall be worse. Therefore appeal is liable to be dismissed in limini. Argument of the appellant that exclusion of South Korea from the purview of investigation has made the investigation erroneous is not tenable without demonstr....
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....in change. So also injury margin remains unaltered. Therefore, the Designated Authority should not be burdened with an academic exercise by remand when it is a proven case of existence of dumping and injury as well as causal link between the dumping and injury. It was also submitted that when non-injurious price (NIP) was determined rightly on the basis of figures of domestic industry, that shall not change in any circumstances or by any means since domestic figure remain unchanged and appellant shall not get any relief. Therefore appeal should be dismissed. 16.15. It was the further argument of the domestic industry that the antidumping duty having been imposed that shall continue to be realised till de novo adjudication order is passed in the event remand is made and the result of de novo order shall also apply from the date of levy of provisional anti dumping duty. Therefore remand is also unwarranted on such ground. Domestic industry relied on the decision in the case of DIT Vs. Puranmall Sons & Others - (1175) 4-SCC 568 and in the case of CIT Vs. National Taj Traders - (1980)-1-SCC-370. Learned Counsel for domestic industry also highlighted that the order of remand made by th....
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....n of subject goods, their locus standi cannot be challenged when dumping and injury was demonstrated by them for their protection by anti dumping levy. Evidence furnished by them being found adequate and their information accurate, trade remedy measure cannot be denied to them. 17.3. It was further submitted on behalf of the DA that following the mandate of Rule 5 of the 1995 Rules, investigation having been initiated and done simultaneously against exports of different countries covered by the Notification dated 07/09/2006, there was no violation of rules of investigation or any prejudice caused to the appellant. 17.4 In November 2006, when total data came from domestic industry for initiation of investigation against exports from South Korea and Russia, Notification dated 12.2.2007 was rightly issued. Appellant was no way prejudiced without appreciating facts and circumstance of each case while dumped goods above de minimus level before Korea reached to that level warranting investigation against its exports. Therefore exclusion of Korean exports from the purview of initiation Notification dated 7.9.2006 was nothing wrong in law. Findings of DA being well founded on good ground....
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....ra 102 of the final findings, recommendation for levy was proper. Magnitude of injury margin was found to be substantial as has been recorded in Para 102 of final finding to recommend appropriate dose of duty Therefore, final findings of DA are unassailable. Similarly Customs Notification having based on sound logic and basis is not liable to be set aside. 17.9. Appellants challenge that there was no cumulation of injury parameters is baseless when export from different countries under common notification for initiation was simultaneously investigated. There was transparency at all levels of investigation and exports by appellant proved dumping with substantial dumping margin and injury margin for which it has no right to challenge lawful action of DA. 17.10. DA rightly terminated investigation against Russia under Rule 14 of 1995 Rules. Appellant fails to show any reason to challenge that the termination was unwarranted. Therefore appeal also fails on this count for which both the Notifications are sustainable. FINDINGS AND CONCLUSION OF TRIBUNAL 18. It is experienced that in the multilateral trading system if dumping takes place, it might result in unfair trade as domestic ....
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....ostponed on the ground of de-minimis level of export. Records of DA demonstrate these facts. Hon'ble High Court of Calcutta in the case of State of Gujarat Fertilisers & Chem. Ltd V. Addl. Secy. & Designated Authority - 2012 (286) ELT 348 (Cal) held that it is incumbent for the Court to see what could be real and rational object for employing the definition of 'domestic' industry and this could be gathered upon reading the object of the Rule 2(b) of the 1995 Rules in the following terms: 13.Bearing aforesaid legal position it is incumbent for this Court to see what could be real and rational object for employing the definition of 'domestic industry' and this could be gathered upon reading the object of the said Rule. The Supreme Court has explained why the aforesaid rule has been framed by the legislature. In case of Reliance Industries Ltd. v. Designated Authority and Others reported in (2006) 10 SCC 368 = 2006 (202) E.L.T. 23 (S.C.) in paragraph 48 it is clearly mentioned the object of framing this Rule. We cannot do better than to reproduce the paragraph 48 of the said report:- &nb....
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....he period as stated at the very outset of this order. The authority issued separate Notification dated 12.2.2007 for initiation of investigation into export from South Korea and Russia against application of domestic industry for that purpose, received in November, 2006. At that time, South Korean exports were above de minimus level. However, DA faced non cooperation of South Korea exporters as result of which it was time consuming to reach the final finding which was ultimately notified against South Korean exports on 9.5.2008 and Customs Notification issued on 10.6.2008. A record relating to investigation into the South Korea exports was examined and nothing found to be discrepant for which action of DA cannot be criticised. 21. We have examined records of DA with respect to investigation into the export of subject goods from subject countries as well as investigation into exports from South Korea and Russia. No departure to the basic rule of investigation was noticed by us from such records. While investigating into exports of South Korea was considered by DA, he also considered export figures and consequence thereof relating to subject countries in the final findings against e....
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....notify Mexico under Article 5.5 of the AD Agreement is inconsistent with that provision. (d) Guatemalas failure to meet the requirements for a public notice of the initiation of an investigation is inconsistent with Article 12.1.1 of the AD Agreement. (e) Guatemala's failure to timely provide the full text of the application to Mexico and Cruz Azul is inconsistent with Article 6.1.3 of the AD Agreement. (f) Guatemala's failure to grant Mexico access to the file of investigation is inconsistent with Articles 6.1.2 and 6.4 of the AD Agreement. (g) Guatemalas failure to timely make Cementos Progresos 19 December 19965 submission available to Cruz Azul until 8 January 1997 is inconsistent with Article 6.1.2 of the AD Agreement. (h) Guatemalas failure to provide two copies of the file of the investigation as requested by Cruz Azul is inconsistent with Article 6.1.2 of the AD Agreement. (i) Guatemalas extension of the period of investigation requested by Cementos Progreso without providing Cruz Azul with a full opportunity for the defence of its interest is inconsistent with Article 6.2 of the AD Agreement. (j) Guatemalas failure to inform Mexico of the inclusion of non-gove....
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....ware that 83% of import of subject goods by SI Group under advance license was meant for use in final goods manufactured for export thereof without sales of such subject goods domestically. The DA therefore rightly considered their complaint to redress in accordance with law providing them protection of trade remedy measure. That cannot be said to be faulty and for no good reason advanced by appellant. 24. Rule 5 of 1995 Rules has made provision for initiation of anti dumping investigation. Authority complied with the provisions thereof and made investigation validly in law. Plea of the appellant that initiation of investigation was ab-initio void is without any force, in the absence of any cogent evidence led by appellant to set aside the investigation. Evidence led by domestic industry proved dumping and dumping injury as apparent from the records of the DA for initiation of investigation. Evidence also shows that the exports of subject goods from subject country were above de minimus level. 25. It was contended by the appellant that DA did not disclose the fact of deficiency in the application of the applicant. Such contention has no force since records of DA are public record....
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....d that it is confidential. Any information, which is by nature confidential, for instance the information the disclosure of which would be significant competitive advantage to a competitor or because its disclosure would have a significant adverse effect upon a person supplying the information or upon a person from whom the person acquires the information, is treated as confidential. The evidence relating to the normal value, export price, costing, profitability, specific adjustment in pricing, etc., are examples of such information, which is usually accepted by the Authority as confidential. Such a confidentiality being in the larger public interest, we do not find any illegality with the said provision. 27. When dumping of subject goods due to export from subject countries was proved from the facts and figures on record of DA, working of dumping margin by him in Para 46 of the final finding remained un-rebutted by appellant. Authority brought out dumping margin percentage in respect of export from different countries considering normal value as well as export price, beginning from Para 23 to Para 45 of his final findings. Difficulties experienced by the DA for non cooperation of....
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....spect of each export from each country which is the basis of law in the final finding under respective Notifications. Dumping margin in respect of South Korean exports was calculated in the respective Notification recommending levy of anti dumping duty in respect of its exports taking normal value of subject goods in South Korea and export price of the subject goods from that country. The DA also compared all essential elements of levy in the South Korea Notification taking the figures of the final findings relating to subject countries. 30. Injury margin was calculated by DA taking Non Injurious Price (NIP) into consideration and landed value of the exports. That shall not change either by exclusion or inclusion of any country with exports from other countries for the reason that calculation of NIP is based only on domestic industry figures. Appellant failed to demonstrate truth of its plea that exclusion of South Korean Exports made the injury analysis faulty. Therefore its appeal on this count also fails. Domestic industry, DA and Ministry of Finance was right to argue that even by inclusion of exports from South Korea with the exports of subject countries no relief could be gr....
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....profit making unit from a loss making one to disadvantageously place a healthy producer of domestic industry, since trade remedy measure is meant for the domestic industry as a whole. The advance license enjoyed by SI group not being to import of subject goods for domestic sale the appellant shall not succeed in his plea to deprive that producer from the purview of domestic industry to get trade remedy measure. 34. We have set out material facts noticed from the final findings of D.A. at the very outset to appreciate the factual background of investigation, the basis of investigation as well as necessity for issuance of Customs Notification. None of the findings of the DA appears to be without evidence or legal basis. Therefore, it is not possible to impeach the findings in absence of cogent evidence to the contrary brought to our notice by the appellant. 35. It has been held by the Hon'ble High Court of Madras in the case of Nirma Ltd. (supra) that antidumping law is an economic legislation rather than a fiscal law. It must be construed with intention of developing domestic industry. Fiscal law is construed strictly and economic legislation is construed with intention of develop....
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....njury margin relating to the exports from subject industries has no bearing to the exports of South Korea. Therefore, appellants plea of inclusion of South Korean export was warranted in the investigation of exports from the subject countries has no legs to stand. 39. It was also argued that for exclusion of South Korean export there was failure in cumulation of injury effect since there was no simultaneous investigation. It may be stated that Article 3 of Anti-dumping agreement makes it clear that investigating authority must address certain factors in conducting injury analysis. Such a provision is given due weightage in 1995 Rules (Annexure -II). Injury compasses the concept of material injury to a domestic industry; threat of material injury to a domestic industry or material retardation of the establishment of a domestic industry. The material injury is determined on the basis of positive evidence and involves an objective examination of specific factors prescribed by 1995 Rules. The DA has examined all the factors prescribed by law in respect of subject goods exported from subject countries as well as from South Korea and notified in two different Notifications. 40. Appell....