TaxTMI 
TaxTMI 
2016 (2) TMI 477
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....t, DA issued a notification initiating anti-dumping investigation covering the period from 01.04.2001 to 31.03.2003. The interested parties were required to place their views in writing before the said authority and after causing a preliminary inquiry, the findings were sent to the known exporters, importers and embassies of the two countries and exporters in the other countries to furnish their views to the DA. Opportunity of public hearing was afforded to the interested parties on 18.02.2003 and the parties were asked to submit their written submissions. On 14.07.2003, the DA issued a disclosure statement under Rule 16 of the Anti-Dumping Rules. The appellant in Civil Appeal No. 2242 of 2006 filed its comments on the disclosure statement before the DA and requested the said authority to disclose the reasons in detail for the determination of the preliminary findings recorded on 21.09.2002. Be it stated, the DA had notified its preliminary findings stating that the caustic soda had been dumped into India except from one exporter from Korea, M/s. Hanwha Chemical Corporation at less than its normal value as a result of which the Indian manufacturers of caustic soda had suffered inju....
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....ould have taken into consideration the price of each individual transaction for comparison of normal value and the export price. It was also urged that the methodology adopted by the DA for arriving at the cost of production was not disclosed although the authority was required to disclose all the reasons for arriving at the conclusion. 4. The stand of the appellant was resisted by the contesting respondents. On behalf of the DA, reliance was placed on Cost Accounting Records (Caustic Soda) Rules, 1967 (for short, "1967 Rules") as amended from time to time and, on that basis it was put forth that 'chlorine' was determined as a by-product. It was also contended that the DA had applied the correct methodology and hence, no fault could be found with the determination. The assail to the erroneous procedure being adopted by the DA was seriously resisted before the tribunal. 5. The tribunal considering the submissions raised by the parties came to hold that the main duty of the DA is to determine existence degree and effect of alleged dumping in relation to import of any article and to submit its finding provisionally or finally to the Central Government regarding normal va....
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....nd that the Designated Authority in his final finding has observed that the authority for the purpose of final finding considered the adjustment as claimed by the customer on discount adjustment in terms of sale as per NALCO tender and adjustment of previous transaction sale to M/s Tricon. Thus addition of $4.57/MT was correctly done. Thus, Designated Authority has correctly determined the export price for caustic soda and it was normatted for other exporters from Korea. This normatted export price was taken and normal value was determined on the basis of published figures of domestic sale in Chlor Alkali Magazine. The domestic industry has raised various points with regard to M/s Hanwha Chemical Corporation like insufficient/dismal disclosure, incorrect cost of production data, lack of information of affiliation, illegal adjustment of US $5 PMT claimed citing NALCO tender and issue of contract and physical export. The Designated Authority had examined and verified at the plant site corporate office of M/s Hanwha's Chemical Corporation relevant cost record, financial records and production records for determining the cost components, domestic sale price, export price, pricing p....
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....uitable basis. He should have taken caustic soda and chlorine as co-product and up to the stage of separation the common cost should have been allocated on the basis of volume of production. In case of M/s Hanwha Chemical Corporation the Designated Authority has done this. Therefore, two different methods cannot be adopted for costing of the same product for comparison with cost of M/s Hanwha Chemical Corporation. A uniform practice should have been adopted for both." 7. The aforesaid view persuaded the tribunal to hold that the non-injurious price was not correctly determined by the DA and, accordingly, set aside the Notification No. 142 of 2003 dated 23.09.2003 and the final findings of the DA on non-injurious price and injury margin and remanded the matter to the DA for fresh determination of non-injurious price and injury margin by reasonable and equitable distributing the cost of production between the chlorine and caustic soda and issue findings afresh in accordance with law. The tribunal finally held thus:- "22.2 We are, therefore, of the view that the non-injurious price was not correctly determined by the Designated Authority. In case of M/s. Hanwah Chemical Co....
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....rtance" for the joint products. The learned counsel further urged that the tribunal has been carried away by the data of international prices presented by the importers which show that the chlorine prices in the international market were substantial whereas the thrust of the matter to be decided for treating chlorine as a joint product under paragraph 12 of the Schedule III to the 1967 Rules as the chlorine was equal economic importance to the concerned Indian company. The submission of Mr. Patil is that the DA has committed a grave error by by-passing the generally accepted accounting principles in India as well as specific provisions of law that the recognized accounts have to be maintained for a particular product and that has led to the eventual determination. Learned counsel would criticise that the order of the tribunal is not clear and it is solely based on earlier determination in M/s. Hanwha Chemical Corporation's case. 10. In Civil Appeal No. 3481 of 2006 preferred by the DA, apart from raising the similar grounds, it has also been urged that the DA on appropriate consideration and also considering the ambit and sweep of the 1967 Rules has determined chlorine as a ....
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....ribunal has opined that the margin of dumping in M/s. Hanwha Chemical Corporation is different from the margin of dumping from other non-cooperative exporters from Korea. After so observing, the tribunal has held that in case of M/s. Hanwha Chemical Corporation cost has been correctly determined by the DA taking the chlorine as co-product and separating its manufacturing cost during the process of manufacture of caustic soda at the stage of separation of chlorine and caustic soda on the basis of the volume of production. The same principle should have been adopted by the DA in case of domestic industry and therefore, identical treatment was not given to domestic manufacturers and HCC. 13. Thereafter, the tribunal has adverted to the issue of NIP and in that context has opined that DA should have apportioned the cost up to point of separation on reasonable and equitable basis and he should have taken caustic soda and chlorine as co-product up to the stage of separation the common cost should have been allocated on the basis of volume of production. Thereafter, it has been observed that in case of HCC, the DA has done that and hence, two different methods cannot be adopted for cos....
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....made under sub-section (6); or (b) the cost of production of the said article in the country of origin along with reasonable addition for administrative, selling and general costs, and for profits, as determined in accordance with the rules made under sub- section(6): Provided that in the case of import of the article from a country other than the country of origin and where the article has been merely transhipped through the country of export or such article is not produced in the country of export or there is no comparable price in the country of export, the normal value shall be determined with reference to its price in the country of origin. (1A). Where the Central Government, on such inquiry as it may consider necessary, is of the opinion that circumvention of anti-dumping duty imposed under sub-section (1) has taken place, either by altering the description or name or composition of the article subject to such anti- dumping duty or by import of such article in an unassembled or dissembled form or by changing the country of its origin or export or in any other manner, whereby the anti-dumping duty so imposed is rendered ineffective, it may extend the....
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.... ninety days from the date of notification under that sub-section, and notwithstanding anything contained in any other law for the time being in force, such duty shall be payable at such rate and from such date as may be specified in the notification. (4) The anti-dumping duty chargeable under this section shall be in addition to any other duty imposed under this Act or under any other law for the time being in force. (5) The anti-dumping duty imposed under this section shall, unless revoked earlier, cease to have effect on the expiry of five years from the date of such imposition: Provided that if the Central Government, in a review, is of the opinion that the cessation of such duty is likely to lead to continuation or recurrence of dumping and injury, it may, from time to time, extend the period of such imposition for a further period of five years and such further period shall commence from the date of order of such extension. Provided further that where a review initiated before the expiry of the aforesaid period of five years has not come to a conclusion before such expiry, the anti-dumping duty may continue to remain in force pending the ou....
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.... of any alleged dumping only upon receipt of a written application by or on behalf of the domestic industry. (2) An application under sub-rule (1) shall be in the form as may be specified by the designated authority and the application shall be supported by evidence of - (a) dumping (b) injury, 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 ....
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....rkets. Thus the factors to constitute 'dumping', are (i) an import at prices which are lower than the normal value of the goods in the exporting country; (ii) the exports must be sufficient to cause injury to the domestic industry." 17. In Reliance Industries Ltd. v. Designated Authority and others (2006) 10 SCC 368 this Court has observed thus:- "The result was that an industrial base was created in India after independence and this has definitely resulted in some progress. The purpose of Section 9-A can, therefore, easily be seen. The purpose was that our industries which had been built up after independence with great difficulties must not be allowed to be destroyed by unfair competition of some foreign companies. Dumping is a well-known method of unfair competition which is adopted by the foreign companies. This is done by selling goods at a very low price for some time so that the domestic industries cannot compete and are thereby destroyed, and after such destruction has taken place, prices are again raised. The purpose of Section 9-A is, therefore, to maintain a level playing field and prevent dumping, while allowing for healthy competition. The ....
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.... dwelt upon the issue with regard to the concept, i.e., "Equal Economic Importance". The Equal Economic Importance, as is canvassed, is the price almost similar to the main product, i.e. caustic soda. Mr. Patil, learned senior counsel, would contend that it would depend upon the realization of amount from sales. It is submitted by him that the appellant had received 82% from sales of caustic soda and 18% from the sale of Chlorine subject to certain variations. 20. Mr. Bagaria, learned senior counsel, has put forth that the amount reflected in the accounts may be correct for the purpose of accounting as provided under the Companies Act, 1956 and other purposes but the words "Equal Economic Importance" being not defined in Paragraph 12 to Schedule III of the 1967 Rules, it has to be determined on the facts of each case. Learned counsel would contend that the use of chlorine and its commercial use should have gone into by the tribunal. Elaborating the same, it is contended that the Chlorine can be used for some other production. 21. In our considered opinion, the tribunal should have dwelled upon the said facet before it recorded the finding whether it is a co-product or a by-pr....