AI Drafter 
TaxTMI 
TaxTMI 
2017 (9) TMI 67
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....k brand, USB flash drives in different capacities. These appeals are against final finding dated 19/12/2014 of the Designated Authority (DA), Directorate General of Anti Dumping and Allied Duties, Ministry of Commerce and Industry and Notification No.22/2015-CUS (ADD) dated 22/05/2015 of Department of Revenue, Ministry of Finance. The Customs notification imposed Anti Dumping Duty (ADD) on USB flash drives originating in or exported from Peoples Republic of China and Taiwan (subject countries) and imported into India. 2. All the 4 appellants, alongwith the appeals, filed applications for condonation of delay in filing these appeals. It is submitted that though in view of the facts of the case, there is no delay in filing these appeals, still the applications are filed as abundant caution and to explain the background for the intervening period, before filing these appeals. The applicants submitted that one of them (SDI) had filed a writ-petition No.744/2015 challenging the final finding of the DA. The Hon'ble Delhi High Court vide their order dated 18/03/2015 quashed the said final finding. The DA and the Domestic Industry (DI) filed SLPs before the Hon'ble Supreme Court. The Ho....
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....es of 3.0 specification. These products are not produced by the DI and, as such, no ADD can be imposed on them ; (b) while examining the scope of products to be covered for ADD investigation, the DR failed in properly appreciating the difference between various types of USB flash drives based on storage capacity and also technological specification for transfer of data. The concept of "like article" has not been properly appreciated during the investigation and finding by the DA. ADD was imposed on USB flash drives of above 64 GB capacity without arriving at dumping margin and injury margin for those items ; (c) the DA did not furnish transaction by transaction import data to the appellants and this has vitiated the entire proceedings in view of denial of natural justice. Reliance was placed on the decision of Apex court in Union of India Vs. Meghmani Organics Ltd. and ors. reported in (2016) 10 SCC 28. The data analysis by the DA contained wide variety of products and the classification of these products were also made under different tariff headings. In such situation, it is important for the DA to disclose the methodology in refining the data and arriving at the volume of ....
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.... Regarding the treatment of "like goods" the learned Counsel submitted that clear finding has been recorded by the DA regarding the scope of investigation and how he considered all the USB flash drives are of similar nature, irrespective of the different levels of storage capacity. The learned Counsel supported the findings of the DA and the custom notification for imposition of ADD on the subject goods. 8. The learned Counsel for the DA submitted that all the issues now raised by the appellants have already been dealt with elaborately by the DA. The appellants are mainly contesting the scope of subject goods for investigation and alleged incorrectness in the data which formed basis of such analysis. The DA initiated the investigation after prima facie satisfied that there is a case for investigation concerning import of subject goods. At the stage of prima facie satisfaction, the full accuracy of data is not subjected to thorough scrutiny. However, during the course of investigation, the data submitted by the applicants are verified and the DA also obtained data from DGCIS who is maintaining official data of import of various commodities into India. Regarding non-disclosure of ....
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..... A perusal of the final finding shows that these appellants did file questionnaire response and participated in the proceedings by the DA. The DA did examine each one of their status by considering the nature of activity carried out by them and the inter-connectivity in business dealing among the appellants. Rebutting the challenge on locus-standi of the appellant, the learned Counsel for the appellants did submit that Section 9C of the Customs Tariff Act did not specify that the appeal should be by producer or exporter of impugned goods only. Even otherwise by their participation in the proceedings before the DA and they being seriously affected by the imposition of ADD, claimed to have a locus to contest the said findings. 12. We note that the very status of these appellants were part of the findings by the DA. The position of the appellants were examined in connection with determination of normal price, injury margin and other analysis made by the DA. He held that the data provided by appellant in Ireland cannot be taken for considering of normal price etc. as Ireland is not a subject country of investigation. Regarding the status of appellants in China it was observed that ....
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....ash drive even storage of 64 MB was sufficient for a USB flash drive to be marketed. Now, we are in a situation where flash drives are regularly marketed with very huge storage space of 32 GB, 64 GB. As noted already, the technology is dynamic, we find no reason to make a distinction based on storage capacity to consider USB flash drives into two categories. It is also to be noted that the inter-changability of higher capacity flash drives, if available on competitive price, for low capacity usage also cannot be ruled out. It is not incorrect on the part of the DA to consider such dynamic change in technology and potential threat of like products while examining the case for ADD levy. Similar reasoning can be adopted in respect of flash drives with 3.0 specification. The advancement in technology and the possibility of inter-changeable use and threat to USB flash drive of 3.0 specification, also requires consideration. This aspect has been examined at length by the DA and he recorded the following findings :- "12. The various submissions made by the interested parties with regard to the scope of PUC and domestic like article and considered relevant by the Authority are exa....
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....ufacture the 3.0 port USB, depending upon the demand in the market. The import of 3.0 port USB is minimal during the POI as the demand for the same is yet to pick up in the Indian market. The imports of 3.0 port USB flash drives constituted only 0.37% of the total imports of the subject goods during the POI. iv. The opposite interested parties claimed that there is significant difference in cost of both the varieties of USB. But, as reported by domestic industry, often the price of 3.0 port USB in Indian market is lower than the other varieties. The landed price of imports shows that the consumers were getting the material at comparable prices indicating direct competition between 2.0 and 3.0 products. Commercial substitutability is also visible between 2.0 and 3.0 products as the price difference between 2.0 and 3.0 products is not significant. On the basis of relied upon imports data, the Authority notes that during the POI the import price of USB Flash Drives of 3.0 port and 2.0 port per piece is US$ *** and US$ *** respectively. Nonetheless, in a situation of dumping, the cost and price does not matter much. What matters is whether both the varieties of USBs are technically ....
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....SB Flash Drives, flash drives that meet the 3.0 USB specification and USBs with differentiated features such as the SanDisk Dual Drive and the SanDisk Connect Wireless Flash Drive, the Authority notes that all these varieties are technically and commercially substitutable in the sense of being flash drives and as per the Anti-dumping Rules it is not obligatory on the part of the domestic industry to manufacture all the substitutable varieties of a PUC. x. As regards the contention that Circuits/Chip on board (COB) are merely intermediate products, which in themselves are not exported to India by any of the identified exporters and therefore, the subsequent inclusion of the volume of COB by the petitioner is without any legal basis, the Authority notes that the import data relied upon in the present investigation reported imports of COB based flash drives from the subject countries during the POI. The Authority further notes that COB or Chip on Board based flash drives for short is a type of flash memory that looks very similar to other types of flash drives. What makes COB based flash drives different than a traditional flash drive for example is that instead of having the contr....
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....efore they are different from each other, the Authority notes that UFDs are basically data saving devices differentiated by their style, design, size, capacity etc. Such differences do not make them different from each other as they are technically and commercially substitutable and functionally alike. xvii. As regards the contention that the UFDs of different storage capacities differ with regard to the raw material i.e. NAND used, the Authority notes that NAND determines the capacity of memory of the UFDs, but do not make them different from each other as they are technically and commercially substitutable and functionally alike. xviii. As regards the contention that costs and prices of the product under consideration vary significantly with changes in storage capacity and therefore they cannot be considered as alike, the Authority notes that the cost and price difference between capacity to capacity USBs is reasonable. Considering the functional substitutability, keeping aside some capacity USBs out of the purview of anti-dumping measures would encourage the exporters to dump the same and replace the domestic industry's products in the market. xix. As regards the conten....
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....eaning and scope of Rule 2(d) of the Anti-dumping Rules. 14. As already noted by us, the DA has examined at length the points raised by the interested parties and on careful consideration, for the reasons recorded earlier in this order, we find no merit in the objections raised by the appellants regarding treatment of scope of products under consideration by the DA. 15. The next point is relating to violation of principles of natural justice by the DA by not providing transaction by transaction import data to the appellant. In this connection, we have already taken note of the submissions made by the learned Counsel for the DA. The appellants strongly contended that the DI gave different type of data at different times and there were huge inconsistencies in this data indicating the volume of import as projected by the DI during the investigation is totally unreliable. We note that the DA had examined this issue. It is apparent that the DI submitted different sets of import data before the DA. This aspect was examined by the DA. He recorded that import data from DGCIS has been relied upon in the present investigation. As already noted that transaction level data could not be m....
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....amply revealed the presence of dumping, injury and causal link. Moreover, the present final finding is self explanatory in this regard. ........... ix. As regards the contention of the interested parties that the detailed transaction-by-transaction import statistics obtained from DGCI&S and relied upon by the Authority has not been provided, the Authority notes that the assessed volume and value of the imports of the subject goods relying upon the imports data obtained from DGCI&S have been declared in this finding. The transaction-by-transaction import data, as claimed by the interested parties cannot be made available being confidential in nature and containing information concerning name of the importers, IE Code No. of the importers, Bill of Entry No. of the importers, Port of import, date of import, etc. In terms of Rule 6(7) of Anti-dumping Rules, "The designated authority shall make available the evidence presented to it by one interested party to the other interested parties, participating in the investigation," and in terms of the said provisions, the non-confidential information presented to it by the interested parties participating in the present investigation hav....