TaxTMI 
TaxTMI 
2018 (8) TMI 180
X X X X Extracts X X X X
X X X X Extracts X X X X
....ong with TA (AT) (Compt.) No. 15 of 2017, Old Appeal No. 53/2016, TA (AT) (Compt.) No. 16 of 2017, (Old Appeal No. 54/2016) Along with TA (AT) (Compt.) No. 25 of 2017, Old Appeal No. 64/2016, TA (AT) (Compt.) No. 17of 2017 (Old Appeal No. 55/2016) Along with TA (AT) (Compt.) No. 30 of 2017 Old Appeal No. 72/2016, TA (AT) (Compt.) No. 18 of 2017 (Old Appeal No. 57/2016) Along with TA (AT) (Compt.) No. 19 of 2017 Old Appeal No. 58/2016, TA (AT) (Compt.) No. 20 of 20 Old Appeal No. 59/2016 Along with TA (AT) (Compt.) No. 21 of 2017 Old Appeal No. 60/2016, TA (AT) (Compt.) No. 23 of 2017, (Old Appeal No. 62/2016) Along with TA (AT) (Compt.) No. 24 of 2017 Old Appeal No. 63/2016, TA (AT) (Compt.) No. 28 of 2017 (Old Appeal No. 68/2016) Along with TA (AT) (Compt.) No. 29 of 2017 Old Appeal No. 69/2016 For The Appellants : Mr. C.A. Sundaram, Senior Advocate and Mr. Ramji Srinivasan, Senior Advocate assisted by Ms. Nisha Kaur Uberoi, Ms. Soumya Hariharan, Mr. Gautam Chawla, Ms Atreyee Sarkar, Ms. Ankita Gulati, Mr. Apoorv Tripathi and Ms Harshita Parmar, Advocates, Mr. Gopal Subramanium with Mr. Ramji Srinivasan, Senior Advocates assisted by Mr. Harman Singh Sandhu, Mr. Tushar Bhard....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rted the matter against the 'CMA' and other Cement Manufacturing Companies. 2. The Commission, on hearing, initially passed an order on 20th June, 2012, held that the Opposite Parties are in contravention of Section 3(3)(a) & (b) of the Competition Act, 2002 imposed penalty and directed the Opposite Parties to cease and desist from indulging in such activity. The CMA was ordered to disengage and disassociate from its wrong prices. 3. The aforesaid order of the Commission was appealed before the 'Competition Appellate Tribunal' (hereinafter referred to as "COMPAT"), which by its judgment dated 11th December, 2015, set aside the said order and remanded the matter to the Commission with following observations: "99. The Commission shall hear the advocates/ representatives of the appellants and BAI and pass fresh order in accordance with law. We hope and trust that the Commission shall pass fresh order as early as possible but within a period of three months from the date, which may be notified after receipt of this order. 100. The parties shall be free to advance all legally permissible arguments. They may rely upon the documents, which formed part of the record of the Jt. DG or....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ained other than as a result of a concerted practice (i.e. the "but for" test). 10. According to Appellants, the globally accepted standard is that circumstantial evidence is not sufficient to establish a conclusion where the circumstances are merely consistent with such conclusion based on concerted action, but equally could also be the result of competitive processes, or where they give equal support to inconsistent conclusions. 11. Learned Senior Counsel placing reliance on decisions of the Hon'ble Courts of the United States and of the Foreign Courts, which we will discuss at appropriate stage submitted that legal test (under Indian law, EU law, and US law) should have been applied by the Commission to evaluate whether there are other plausible reasons as advanced by the Cement Companies, could have given rise to the alleged parallelism, such as inherent market transparency of the commodity product like cement, its natural cycles of fluctuation in demand, seasonality, and the general tendency of smaller producers to swiftly and intelligently adapt their prices / output in reaction to larger producers' market behaviour. 12. According to Appellants, the investigation condu....
X X X X Extracts X X X X
X X X X Extracts X X X X
....l the CMA members. It is alleged that the Commission has attempted to carve out an alleged cartel within an alleged cartel, without any justification. To carve out a species from the genus that it belongs to, it must be established that the species in question has certain specific and unique characteristics that distinguish it from the rest of the species in the genus. However, such assessment was not done by the Commission or the DG in the instant case. The data collected by the DG for five other small cement companies i.e., J.K. Lakshmi, Birla Corporation, Shree Cements, OCL and Prism Cement ("Other Source Companies"), but nowhere in the discussion was such data even referred to, nor were such Other Source Companies treated as part of the alleged cartel, despite having similar price movement as the Cement Companies. 16. According to the Appellant, the Commission cannot (i) treat some of the CMA members as being part of the alleged cartel without showing that the other members acted differently (when in point of fact, the records disclose that they did not), and (ii) selectively identify some companies who attended the CMA high powered committee ('HPC') meetings as having alleged....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ement According to him, the Commission mixed state-average prices together with city-average prices in its parallelism analysis (only three Cement Companies had provided State-wise prices). In other words, the DG and the Commission have not paid attention to standard competition law principles and failed to distinguish between different relevant product markets (wholesale/retail level), different geographic markets (state/city) and different variables (actual prices/depot prices). 19. Further, according to the Appellants, there is no data which indicates price changes immediately after CMA meetings, i.e. the material on record does not show that there was an actual increase in price following a meeting. 20. Further, according to learned counsel, the prices change every week and there is no data on record to show what the price difference was in the week following the High Powered Committee meeting. Merely taking an average price would include periods before the High Powered Committee meeting and well after the High Powered Committee meeting and therefore cannot indicate in any manner that the agreement sought to be established was arrived at the High Powered Committee meeting. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....an be passed on to consumers in the short-run only when demand is high. However, in the long-run, cost increases can gradually be incorporated into prices. 25. According to economic theory, market price is determined by the interaction between demand and supply. If demand is greater than supply, there is a situation of excess demand which leads to an increase in price. However, if demand is less than supply, there is excess supply in the market, which leads to a decrease in price. Therefore, there is always a mismatch between demand and supply in the market on a day-to-day or month-to-month basis, as a result of which prices increase or decrease or remain constant. Further, supply is also affected by various factors including production, dispatch, stock in hand and other unforeseen factors (e.g. labour strikes, availability of railway rakes, storage capacity, etc.). More so, in the case of cement, which by its very nature has a very short shelf life and therefore, constant decisions have to be taken by manufacturers based on reasonable prediction of the supply to decide on their quantum of production. 26. In response to the alleged unusual production and price trends identified ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....unsel for the Ambuja Cements Limited also explained the reasons for lower production in one or other month, such as November, 2010 as follows: For November 2010, the decision of the Ambuja Cements Limited to produce less cement can be explained as a rational decision being based on the following business considerations: The production changes for 2007-2010 for Ambuja Cements Limited, were as follows: S.No. Year October November a. 2007 +19% -7% b. 2008 +5% +1% c. 2009 +8% +1% d. 2010 +18% -18% The abovementioned data suggests that in years when there are large changes (i.e. increase) in production in October (2007 and 2010), it was observed that production is much lower in November. On the other hand, in years when production only increased slightly in October (2008 and 2009), production increased in November. Comparing the production figures across the four years from 2007 to 2010, it was observed that November is generally a lean month in terms of production of cement every year for Ambuja Cements Limited, regardless of whether or not Diwali falls in that month (even though Diwali was in November 2010). In all years (2007-2010), November production was....
X X X X Extracts X X X X
X X X X Extracts X X X X
....h an analysis. Further, the Commission has also not carried out a comparison of prices prior to and post the alleged meetings on 3rd January 2011 and 24th February 2011 (and 4th March 2011), to establish that prices rose after the said CMA meetings. 32. In relation to Ambuja Cements Limited prices, in the month of November 2010, prices decreased in 12 out of the 18 states (as assessed by the Commission compared to the previous month (October 2010). Also, there is price decrease in all States during December 2010 as shown below: S. No State Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 1. ANDHRA PRADESH 174 220 238 238 243 255 2. CHANDIGARH 232 240 238 230 239 267 3. CHHATTISGARH 186 211 205 181 191 217 4. DELHI 233 245 236 226 227 258 5. GUJARAT 177 196 215 217 221 248 6. HARYANA 238 246 238 230 239 267 7. HIMACHAL PRADESH 273 274 274 274 277 296 8. JAMMU & KASHMIR 248 258 257 254 260 287 9. JHARKHAND 252 265 255 234 242 261 10. KERALA 234 295 309 309 304 313 11. MADHYA PRADESH 211 214 218 211 211 237 12. MAHARASHTR....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 40. Contrary to the allegation of suppression of supplies, Ambuja Cements Limited has added 75 lakh tonnes of capacity between 2007 and 2010, and there has been increase in Ambuja Cements Limited overall production from 2007 till 2010. 41. The table below shows capacity additions by Ambuja Cements Limited across different regions. (2007 and 2010) (in lakh tonnes) Region ACL 2007 2010 Capacity Addition North 74 104 30 East 32 43 11 West 69 103 34 Total 175 250 75 Year Production (million Tons) Change in Production 2007 16.87 2008 17.75 5% 2009 18.84 6% 2010 20.13 7% 2011* 9.14 B. Dispatch 42. There has been no suppression of dispatched by Ambuja Cements Limited, as their dispatches never fell below 99.94% of production. 43. The Commission has failed to note that Ambuja Cements Limited total dispatches in 2010-11 were 20093 MT, which was 7% higher than the total dispatches in 2009-10 i.e. 18833 MT. 44. Further, Ambuja Cements Limited total dispatches in October- December 2010 i.e. 4994 MT were 5% higher than total dispatches in October-December 2009 i.e. 4734 MT. C.....
X X X X Extracts X X X X
X X X X Extracts X X X X
....aring on behalf of the ACC Limited submitted that ACC Limited has rebutted each of the presumptive conclusions of the Commission arrived at in the impugned order, inter alia, as under: a) Capacity utilization of the cement plants of ACC Limited (an average of 92.2% for 2007-2010) has been substantially higher than that of the industry average of 73%; b) Dispatches were directly related to the demand in the marketplace based on orders placed by distributors; c) ACC Limited actual data (in terms of production, prices, capacity utilization, dispatches etc.) for the period between May 2009 and March 2011 was at variance with the "big picture" trend sought to be drawn by the Commission relying on the Cement Manufacturers' Association data (which does not include ACC Ltd. or Ambuja data); d) The Commission's own Economics Division concluded that the cement companies were behaving independently and these concrete findings have not been addressed by the Commission at all; and e) ACC Limited did not attend any meeting of the high powered committee (HPC) of the Cement Manufacturers Association (CMA) as alleged by the Commission. Without prejudice to this fact, ACC Limited price....
X X X X Extracts X X X X
X X X X Extracts X X X X
....and actual prices are based on market feedback; e) Among top firms the identity of the price leader is not known, as all the top companies have been independently taking price decisions; f) Price change data reveals that the price movements are sequential and not simultaneous; and g) Firms under observation have taken these price decisions independently at various points of time. 54. It was submitted that the Commission has completely skirted these issues, which demonstrates the shaky foundations on which the impugned order is based and the fact that a closer look at the data does not bear out any collusive conduct. 55. According to learned Senior Counsel for ACC Limited, January- March is a period of increasing demand. In most States, demand picks up in the first quarter of the calendar year due to the absence of rain and any major festivals, which leads to a price increase in this period every year. In most cases, the price increases in 2011 are actually lower than price changes in previous years. The following table shows percentage of ACC Limited price changes over the previous calendar month for various states in January and February 2011. State January Fe....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... supply is expected to reduce as workers in the cement plants also go home. The sum total of both these effects would be to reduce production. In this regard, the periods surrounding major festivals like Diwali, Navaratri, Durga Puja, Christmas and New Year face reduced demand. c) Other factors. The month of February has only 28 days (or 29, in leap years), which makes it as much as 10 per cent shorter than months like January and March, which have 31 days each. Thus, it is only natural that aggregate demand in February would be lower than in January or March even if the demand on any given day is the same. d) ACC specific factors. There were a series of significant disruptions to ACC Limited production in mid-2010 such as refractory failure in the Madhukkrai plant and significant power failure at the Gaga plant in August 2010; machinery breakdown and power failure issues in August and September 2010. These led to reductions in supply in mid-2010 during the disruptions, leading to reduced production. Subsequently, as the disruptions were resolved by the end of September 2010, supply would have increased in the following months as the production process returned to normal, showi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tilization to optimum level takes considerable time due to the teething problems encountered in the initial period. The Commission has not taken this fact into account or made any adjustments to provide a stabilisation period for these plants whilst calculating and assessing the average capacity utilisation. As per the DG report itself, in its first year of production a plant is only able to produce 50% of its installed capacity. The Commission has wrongly relied upon the figure of 75.27% of 2010-11 even though if ramp up is taken into account, the correct capacity utilisation for 2010-11 will be 93.1%. extracts of the comments to the DG Report filed by the Appellant before the Commission dated 14th February, 2012 on capacity utilisation and ramp up time of new plants. 64. It was further submitted that the increase in the Appellant's production in 2010-11 over 2009-10 has been 38%. There has been maximum increase in capacity of the Appellant and it is only due to the gestation periods that the plants require for stabilisation that the capacity utilisation has not been the maximum possible. 65. It is also contended that the Appellant has recorded the largest increase in dispatches....
X X X X Extracts X X X X
X X X X Extracts X X X X
....h a finding of cartelization. However, the Commission with respect to CMA is completely different if not opposite. The Commission considered the CMA meeting as a basis to state that the conduct of the Appellants/Cement Companies needs to be investigated. The Commission does the exact opposite and after carrying out economic analysis, not having found any actual evidence of agreement relies on the factum of existence of CMA meetings to reach the conclusion of cartelization. Apart from the fact that the findings of the Commission are inherently contrary and contradictory. They are erroneous for obvious reasons which are as follows:- i. Right to Assemble: All industries and persons have a right to form an association as guaranteed by the Constitutional right, no adverse inference can be drawn from the fact that the Cement Manufacturers had formed an association and used to hold meetings. ii. No Price Discussed in Meeting The Commission have quoted Minutes of Meeting of the CMA extensively. However, a bare perusal of the same shows that none of the minutes of the Meetings show any discussion on price. The issues discussed at the CMA meetings related to the industry like impos....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed with factory gate price and at the most wholesale price. Parties, in particular UltraTech has provided discreet price changes over a period of both before and after the CMA meeting and the same do not disclose any pattern. 72. It was further contended that there was failure to define relevant market as argued in their other cases. Further, according to learned counsel for the Appellant price parallelism alone cannot be the basis of coming to the conclusion of anti-competitive behaviour. Submissions on behalf of Cement Manufacturers Association: 73. Mr. Ramji Srinivasan, learned Senior Counsel appearing on behalf of Cement Manufacturers Association ('CMA' for short) submitted that CMA was collecting cement prices (minimum and maximum) on a weekly basis as were earlier collected by DCCI. Though CMA sought clarification after the enactment from the DIPP, but no effort was made to seek legal advice or clarification after notification of the provision of the Competition Act. The collection of prices by CMA either at the behest of the Ministry or otherwise in itself is not anti-competitive unless such information is shared with or disseminated/published to cement companies. 74. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d that the CMA has maintained the minutes of all meetings. Further, there is no finding or allegation that CMA has recorded the minutes wrongly or manipulated its minutes. Without such finding, it is unjust to condemn the CMA to act as a platform of collusion for any anticompetitive activity. Submissions on behalf of Respondent No.1 (CCI) 79. Mr. Salman Khurshid, learned Senior Counsel appearing on behalf of the Commission while opposing the appeals submitted that the Appellants are habitual offenders. 80. It was also submitted that the Cement industry is the second largest profit-making industry in the country after Mining and the Cement prices in India are the second highest in the world after Japan. Keeping in mind the aforementioned fact, Holcim Group has been penalised and held guilty of acts of anti-competitive activities all over the world. It was also highlighted that "Lafarge India", a subsidiary of the French building materials major 'Lafarge', has already been fined in the years 1994, 2002 and 2008, for committing irregularities in different jurisdictions. Further, it was contended that CMA and some of the Appellants have also been found to have been engaged....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of Certain Agreements, Abuse of Dominant Position and Regulation of Combination". Section 3 deals with 'Anti-competitive agreements', whereas Section 4 prohibits the 'abuse of dominant position'. 85. In the present case, as the Commission held the action of the part of the Appellants in violation of Section 3(3)(a) & (b). Therefore, it is desirable to refer to the said provision, relevant of which reads as follows: "3. Anti-competitive agreements.- (1) No enterprise or association of enterprises or person or association of persons shall enter into any agreement in respect of production, supply, distribution, storage, acquisition or control of goods or provision of services, which causes or is likely to cause an appreciable adverse effect on competition within India. (2) Any agreement entered into in contravention of the provisions contained in sub-section (1) shall be void. (3) Any agreement entered into between enterprises or associations of enterprises or persons or associations of persons or between any person and enterprise or practice carried on, or decision taken by, any association of enterprises or association of persons, including cartels, engaged in identical or....
X X X X Extracts X X X X
X X X X Extracts X X X X
....h direct/or indirect evidence. 88. 'Market power' has not been defined in the Act but as per Section 3 Anti-competitive agreements require an actual or likely appreciable adverse effect on competition. 89. Some concerted acts/ agreements, which may result into horizontal price-fixing agreement i.e. directly or indirectly determines purchase or sale prices or limits or controls production, supply, markets, technical development, investment or provision of services, it will not be legal as in terms of Section 3(3), it shall be presumed to have an appreciable adverse effect on competition. 90. If the behaviour factors of the Appellants are seen, the following facts emerge: Exchange of Data: The most significant and clinching evidence that the Appellants were in fact, acting in concert was the fact that the Companies using the platform of CMA met at regular intervals, discussed pricing and sensitive information relating to production, capacity, dispatch etc. with each other All competitive restraints and competition policies were given a total go by the Appellant cement companies. 90.1. Sections 3 and 4 of the Competition Act, 2002 came into force on 20th May, 2009, though the Com....
X X X X Extracts X X X X
X X X X Extracts X X X X
....o reasonable levels within 4 weeks' time, failing which he would be obliged to resort to recommending. withdrawal of CVD and SAD on Cement Imports and also reintroduction of Ban on Cement Exports. Shri Rahul Kumar, COO (Cement), Jaiprakash Associates Ltd. informed Secretary (DIPP) that while the growth of cement supplies during the period April- Oct '08 was only 2.6% over the corresponding period of the previous year, the sudden spurt in demand during Nov.08 to Jan 09 was 24%. Shri Rahul Kumar, further apprised CMA after attending the Meeting taken by Chief Secretary, Govt. of UP in Lucknow on 17.03.2009 where the cement manufacturing cement to UP were also resent and on behalf of Jaypee Cement that it was agreed by Jaypee to supply cement to the Govt. Departments during the month of March 2009 at the rate of Rs. 245/-per bag. The UP Govt. was satisfied and orders were being placed for supply of cement. The other suppliers also similar(ly) responded by offering similar special rates for Govt. supplies and assuring to meet the requirements." Similarly, on 18th December, 2008, there were discussions on dissemination of data which were circulated to the cement companie....
X X X X Extracts X X X X
X X X X Extracts X X X X
....u -do- Simla -do- UltraTech Cement Ltd. Mumbai Retail Cement Price (Already being given by Grasim Inds. Ltd.) Ahmedabad -do- Wholesale Price Nagpur -do- Pune -do- Rajkot -do- Baroda -do- Surat -do- India Cements Ltd. Goa Retail Cement Price 10.1.7 As regards the following stations, it was decided that Jaiprakash Associates Ltd. may furnish the information for Retail Cement Price and also Wholesale Cement Price. Faizabad Retail Cement Price Bhopal -do- Wholesale Price 10.1.8 It was also decided that other Members may also contribute in the exercise for collecting the prices giving maximum and minimum range in whichever market they are comfortable for supplying the price details." Clause 10.1.1 of the aforesaid meetings shows that the CMA contribute in the exercise for collecting the prices giving maximum and minimum range in whichever market they are comfortable for supplying the price details. 90.5. From the perusal of the minutes of the High Power Committee meetings held on 3rd January, 2011, 24th February, 2011 and 4th March, 201....
X X X X Extracts X X X X
X X X X Extracts X X X X
....summaries which were circulated every month. 94. It is also important to notice that the non-High Power Committee meetings which ACC Ltd. and Ambuja Cements Ltd. claimed to have attended instead of the HPC meetings held on the same date i.e. 24th February, 2011 and 4th March, 2011 are at the same venue i.e. at Hotel Orchid Mumbai as that of the HPC meetings. All three meetings, they did not choose to attend, are after the information was received by the Committee. 95. In "Technip SA vs. SMS Holding (P) Ltd. & Ors.−(2005) 5 SCC 465" , the Hon'ble Supreme Court went into the "concept of Action in Concert" and observed: "54. The standard of proof required to establish such concert is one of probability and may be established "if having regard to their relation etc., their conduct, and their common interest, that it may be inferred that they must be acting together: evidence of actual concerted acting is normally difficult to obtain, and is not insisted upon". 55. While deciding whether a company was one in which the public were substantially interested within the meaning of Section 23A of the Income Tax Act, 1922 this Court said:- "The test is not whether they have act....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e have highlighted go a long way in that direction and as plus factors." 97. While discussing "presumption of cartel offences" in "Excel Crop Care Ltd. v. Competition Commission of India− (2017) SCC OnLine SC 609", the Hon'ble Supreme Court observed: "41. Sub-section (2) of Section 3 specifically makes such agreements as void. Sub-section (3) mentions certain kinds of agreements which would be treated as ipso factor causing appreciable adverse effect on competition." 50. Thus, onus was on the appellants in view of Section 3 of the Act, and that too heavy onus, to justify the above trend, but they have failed to discharge this burden. We are, therefore, of the opinion that ingredients of Section 3 stand satisfied and the CCI rightly held that provisions of Section 3(3)(a), 3(3)(b) and 3(3)(d) have been contravened by the appellants." 98. The COMPAT in the case of "National Insurance Company Ltd. and Ors. v. Competition Commission of India−MANU /TA/0060/2016" held: "15.2 The presumption under Section 3(3) of the Act takes away the applicability of rule of reason. Bid rigging has been statutorily determined to be anticompetitive. Presumption in a substantive law....
X X X X Extracts X X X X
X X X X Extracts X X X X
....what we noticed and discussed above that in the meeting of CMA, the member Cement Companies since 15th March, 2007 i.e. prior to coming into force of Section 3 was discussing sale price of Cement in their platform which they continued to hold all the time even thereafter till they desisted when the Commission issued notice on 20th August, 2010 under Section 41(2) of the Competition Act, 2002. Only thereafter the member Cement Companies desisted by amending its earlier resolution in its meeting held on 23rd September, 2010. They were openly circulating the sale price of cement of each of the Cement Companies, though they were competitors. The Government of India if called for details of the Companies, the respective companies could have sent it themselves in a sealed cover. But, it was sent to the competitors who were discussing not only the sale price of the cement but also the order issued by one of the company from Government of U.P. From the aforesaid facts based on evidence, there will be one conclusion that there was meeting of minds between the Appellants with regard to the fixation of sale price of cement and for regulating its supply and production. 104. Now the question ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tted by one of the Appellants, it cannot be alleged that the Commission cheery pick datas to show price parallelism. C) Dispatch & Production Coordination: a. For analysis on the Dispatch Trends, data was considered from January 2009 - December 2010 for all the Appellant Cement Companies which showed that in November 2010 there has been a decrease in dispatch by all companies compared to October 2010. b. The table under Para no. 262, Page No. 153 of the impugned order gives a clear picture that while there was an increase or decrease in dispatches for different companies during November 2009 over October 2009, however all companies uniformly had a decrease in supply in November 2010 over October 2010. That even when there was a decrease for some companies in the previous year of 2009, eg. JK, Madras, Lafarge and ACC the decrease in 2009 was very marginal if any. However, the decrease in 2010 was huge and across all companies. c. Lower dispatches in the months of November-December, 2010- 11 in comparison to actual consumption in the corresponding months of 2009-10 coupled with lower capacity utilisation in these months even though there were no demand constraints-given the s....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 366239 316538 Decrease Tamil Nadu Company 2009 2010 October November Remarks October November Remarks ACC 79212 78652 Decrease 79452 68483 Decrease Ultra 169795 153401 Decrease 184430 121582 Decrease India Cements 365833 334334 Decrease 343304 239878 Decrease Gujarat Company 2009 2010 October November Remarks October November Remarks ACL 565768 615864 Decrease 721665 576275 Decrease Jaypee 2888 9322 Increase 121584 103533 Decrease Ultra 430472 412498 Decrease 466749 397585 Decrease Andhra Pradesh Company 2009 2010 October November Remarks October November Remarks India 425797 465583 Decrease 449985 317488 Decrease Ultra 250027 276440 Increase 347702 287377 Decrease Madras 147632 148362 Increase 112957 104343 Decrease e. The trends in Production when compared with the related demand sectors also shows that while the Construction Industry grew considerably during the period 2010-11 as compared to 2009- 10, the growth in cement production and dispatch only grew marginally in comparison. f. Another interesting fact is when th....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... MMT Growth in % Capacity utilisation in % 2005-06 157.35 -- 141.81 -- 90 2006-07 165.64 5.26 155.64 9.75 94 2007-08 179.1 8.12 168.31 8.14 94 2008-09 205.96 14.99 181.61 7.90 88 2009-10 246.75 19.80 205 12.87 83 2010-11 286.38 16.06 210.85 2.85 73 a. Comparison of the years 2008-09 with 2009-10 and 2010-11 would show that (a) while the installed capacity was the highest in 2009-10 and thereafter in 2010-11 thus signifying a continuous increase in demand and the market, the growth in production however fell from 12.87% in 2009-10 to merely 2.85% in 2010-11 over 2009-2010. (b) Capacity utilization fell from 83% in 2009-10 to 73% in 2010-11. (c) Further the argument that it takes time for functional stability etc. and the nameplate capacity argument gets blurred considering that despite an increase in capacity in the previous year the production increased substantially which was not the case in the year 2010-11. b) The following table also further reiterates the fact that even post exclusion of ACC and ACL, the capacity utilization was only 75%. Capacity utilisation based on available and i....
X X X X Extracts X X X X
X X X X Extracts X X X X
....87 78 Feb. 17.40 19.16 13.93 14.78 82 78 Mar. 18.55 19.53 15.97 16.82 88 87 Total 199.21 224.41 160.75 168.29 83 76 g) Even if Diwali was to be made the benchmark - As it was 17th October 2009 and 7th November 2010 and the trends of one month prior to such event are considered, i.e. November of 2010 to be compared with October of 2009 - then also it is clear that the month of Diwali in 2009 saw an increase in production over the previous month and the month after Diwali in 2009 saw a further increase in production. On the other hand, in 2010 the month of Diwali saw a huge reduction from 14.7 to 11.84 MMT while the month of December, i.e. after Diwali saw a marginal increase only. The Appellant cement companies reduced production and dispatch exhibited their coordinated behaviour resulting in limit over supplies and production which was violative of Section 3(3)(b) of the Competition Act. While concluding it is relevant to state that the test to be adopted for proving a cartel under Competition law in India as well as globally is one of 'balance of probabilities' as distinguished from 'beyond reasonable doubt' as envisaged under criminal l....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of services; (f) promotion of technical, scientific and economic development by means of production or distribution of goods or provision of services. 33. The word 'market' used therein has reference to 'relevant market'. As per sub-section (5) of Section 19, such relevant market can be relevant geographic market or relevant product market. The factors which are to be kept in mind while determining the relevant geographic market are stipulated in sub-section (6) of Section 19 and the factors which need to be considered while determining the relevant product market are prescribed in sub-section (7) of Section 19. These two sub-sections read as under: "19.(6) The Commission shall, while determining the relevant geographic market', have due regard to all or any of the following factors, namely:- (a) regulatory trade barriers; (b) local specification requirements; (c) national procurement policies; (d) adequate distribution facilities; (e) transport costs; (f) language; (g) consumer preferences; (h) need for secure or regular supplies or rapid aftersales services. (7) The Commission shall, while determining the relevant product m....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... reasonable market definition, the question of the most appropriate market definition can even be left open. The relevant market within which to analyse market power or assess a given competition concern has both a product dimension and a geographic dimension. In this context, the relevant product market comprises all those products which are considered interchangeable or substitutable by buyers because of the products' characteristics, prices and intended use. The relevant geographic market comprises all those regions or areas where buyers would be able or willing to find substitutes for the products in question. The relevant product and geographic market for a particular product may vary depending on the nature of the buyers and suppliers concerned by the conduct under examination and their position in the supply chain. For example, if the questionable conduct is concerned at the wholesale level, the relevant market has to be defined from the perspective of the wholesale buyers. On the other hand, if the concern is to examine the conduct at the retail level, the relevant market needs to be defined from the perspective of buyers of retail products. 38. It is to be borne in ....