TaxTMI 
TaxTMI 
2018 (8) TMI 180
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.... 2017, (Old Appeal No. 52/2016), Along 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. ....
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..... The DG after detailed investigation, reported 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....
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....r, the evidence must show that the conduct of the parties cannot be explained 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&....
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....i) all the attendees of the contentious high powered committee meetings; and (ii) all 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 co....
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.... Vistas Private Limited ("Nuvoco") Month wise prices Invoiced Prices 10 Binani Cement Limited ("Binani") End of month price Price for Grade 43 Cement 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 a....
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....un volatility in demand, prices that consumers are willing to pay will depend on their immediate needs (especially given the fact that cement cannot be stored). Therefore, cost increases can 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 ....
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....ice and demand and supply, an analysis of the variables over a longer period of time (instead of a month-to-month comparison) is required, using a statistical technique such as a regression analysis. 27. Learned Senior Counsel 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 o....
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.... Commission to credibly demonstrate that the price increase in early 2011 resulted from collusion, the Commission must at least demonstrate that demand-and-supply dynamics in early 2011 were very different from previous years so that a price increase in early 2011 was not in line with normal market dynamics. Revealingly, the Commission has not attempted to carry out such 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 ....
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....ur is in line with market forces in a commodity industry, which is characterized by seasonality and a limited shelf life of the product. 38. Learned Senior Counsel for the Ambuja Cements Limited also highlighted the plus factors and submitted that mere parallelism cannot be decisive of cartelization. It was submitted that plus factors such as, capacity additions, production trends, capacity utilization, dispatch levels, and profit margins, all of which not established in the case of Ambuja Cements Limited as explained below. 39. Learned Senior Counsel highlighted the plus facts of Ambuja Cement Limited as follows: A. Capacity addition and production 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 T....
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....ustries like cement, a minimum of 30% to 40% return on capital employed ("ROCE") is required to give a reasonable return and to conserve some funds for future expansion. Therefore, it is clear that Ambuja Cements Limited has neither engaged in profiteering nor earned abnormal profits. 49. The other grievances of the Appellants are that the Commission has failed to define the relevant market, which is required to be determined in view of the decision of the Hon'ble Supreme Court. 50. Alternative arguments was also advanced on the question of penalty on the ground that only for the period November 2010, January and February, 2011, certain deficiencies were detected. Submissions on behalf of ACC Limited 51. Mr. Gopal Subramaniam, learned Senior Counsel appearing 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 ....
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....#39; are contrary to the Commission's own findings. The Commission's Economics Division concludes, inter alia, that: a) ACC Limited exhibited behaviour independent of other cement manufacturers (both OPs and non-OPs) in the States of Tamil Nadu, Haryana, Punjab, Chandigarh, Rajasthan, Maharashtra, West Bengal, Odisha, Madhya Pradesh; b) In some States, market players exhibited behaviour completely different from all other market players in that state, with no positive correlation existing (e.g. India Cements in Uttar Pradesh); c) Prices are target driven. Companies aim to sell a certain quantum of cement in a budget year, and price movements depend on such targets over and above the opportunities to charge higher prices during high demand and charge low prices during low demand; d) Desired 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 pr....
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....ssarily move together. Therefore, all arguments/factors in relation to production parallelism will also apply to dispatch parallelism. 59. Parallelism in production is consistent with competitive behaviour. Any parallelism in production is expected in an industry faced with seasonal demand fluctuations, as producers respond similarly to reduced or increased demand. The factors causing seasonality in the cement industry include: a) Local climatic factors. The nature of cement is such that it cannot set and dry in wet weather. Construction activity, and consequently the demand for cement, reduces substantially during wet weather, and picks up when the weather is dry and warm. Thus, the South West monsoon, the North East monsoon and winter precipitation in north India reduces demand whenever they occur in any given State. b) Local cultural factors. Major festivals cause both demand and supply changes: (i) demand would reduce from the construction sector, as labourers would take time off to return to their native places to celebrate with their families; and (ii) supply is expected to reduce as workers in the cement plants also go home. The sum total of both these e....
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....s little change in production during this period. Submissions on behalf of Jaiprakash Associates Ltd. 61. Mr. Amit Sibal, learned Senior Counsel appearing on behalf of Jaiprakash Associates Ltd. submitted that the Appellant expanded its production in the year 2008-09 and 2009-10 by commissioning new units in Haryana, Uttar Pradesh, Gujarat, Madhya Pradesh, Himachal Pradesh and Uttarakhand, increasing its installed capacity from 7 million tons in 2007-08 to 19.10 million tons by the end of 2009-10. 62. It was also submitted that the Commission has wrongly relied upon the DG's calculation of the Appellant's capacity utilisation in 2009-10 as 57.7%. This figure is not at all indicative of the actual capacity utilisation by the Appellant. Instead of using pro-rated capacity, the DG has taken the figures for the installed capacity of the whole year. When calculated correctly, the actual capacity utilisation for 2009-2010 is 81.7%, which is much higher that the DG's calculation which has been relied upon by the Commission. 63. According to learned Senior Counsel, when a new plant is installed, the ramp up of the capacity utilization to optimum level takes considerable time du....
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....d counsel for the Appellant further submitted that normally cartels exist when there are entry barriers in the market. However, in the instant case there is no evidence to suggest existence of any entry barriers. This is evident from the fact that during the period 2007-08 and 2010-11, ten new large players entered the market with a total capacity of 12.3 MT. further, market share of Cement manufactures has also seen frequent changes. It was also submitted that the Mandatory Tests laid down under Section 19(3)(a)(b) & (c) were not conducted before arriving at finding of cartelisation. 69. The Appellant has also taken plea that there was a substantial increase in installed capacity which was increased during the period 2007-2011 from 179.1 MT to 286.38 MT i.e. almost 50% increase. Further, ten players doubled their capacity from 20.4MT to 46.20MT. 70. According to learned counsel for the Appellant, increase in profit margin is one of the indicators of cartel. The data on record shows that there is decrease in pre-tax and post-tax margins of major Cement manufactures during the years 2007-2011. 71. It was submitted that the Commission relied on the existence and the role ....
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.... various Cement Companies on real time basis. This is fundamentally erroneous on all counts. The data provided by CMA is notional price of cement based on the relevant Cement Companies enquiring from the retail vendors. This does not contain the actual data of each of the Companies. The data does not show any discreet changes in price of any of the companies. v. Cheery Picking with respect to CMA Meeting: There have been seven CMA meetings during the period under consideration by the Commission. The Commission by selectively picking three meetings has reached a finding that there must have been an agreement among the cement manufacturers. According to Appellant, this finding is patently erroneous for the following reasons: * Picking three out of seven meetings is in fact a case of cherry picking. In fact, the price fell after four meetings and went up after three meetings. Thus, showing no discernible pattern. * In any case, the finding that the price went up after the CMA meetings is itself wrong. Commission has taken the average monthly price. It does not show the price before and after the meetings. Further, Commission has used retail price in....
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....udy in the interest of economy growth and development of the cement industry; for various regulators for policy issues, e. Thus, for enhancing the efficiency of production, supply, distribution and storage and control of cement. 76. Reliance has been placed on the decision in "Maple Flooring Manufacturer's Association vs United states, 268 US 563 (1925)" in which the majority decision upheld, that trade associations or combinations of persons or corporations which openly and fairly gather and disseminate information as to the cost of their product, the volume of production, the actual price which the product has brought in past transactions, stocks of merchandise on hand, approximate cost of transportation from the principal point of shipment to the points of consumption as did these defendants and who, as they did, meet and discuss such information and statistics without, however, reaching or attempting to reach any agreement or any concerted action with respect to prices or production or restraining competition, do not thereby engage in unlawful restraint of commerce. 77. Further, according to learned counsel CMA cannot be construed as a common platform for col....
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....One of the questions arises for consideration is whether the activity of the Appellants and CMA amounts to 'cartel' as defined in Section 2(b) and (c) respectively of the Competition Act, 2002. 82. "Agreement" is defined in Section 2(b) of the Competition Act, 2002, which includes any arrangement or understanding or action in concert and reads as follows: "2(b) "agreement" includes any arrangement or understanding or action in concert, − (i) whether or not, such arrangement, understanding or action is formal or in writing; or (ii) whether or not such arrangement, understanding or action is intended to be enforceable by legal proceedings; [(ba) "Appellate Tribunal" means the Competition Appellate Tribunal established under sub-section (1) of section 53A;]" 83. Section 2(c) defines 'cartel' which includes an association of producers, sellers, distributers etc. as quoted below: "2(c) "cartel" includes an association of producers, sellers, distributors, traders or service providers who, by agreement amongst themselves, limit control or attempt to control the production, distribution, sale or price of, or trade in goods or provisi....
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....eement, between enterprises or persons referred to in sub-section (3) engaged in identical or similar production or trading of goods or provision of services, which has the effect of eliminating or reducing competition for bids or adversely affecting or manipulating the process for bidding." 86. Thereby it is clear that Sub-section (3) of Section 3 relates to all agreements entered into between enterprises or associations of enterprises or persons or association 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 of similar trade of goods or provision of services, which- (a) directly or indirectly determines purchase or sale prices; (b) limits or controls production, supply, markets, technical development, investment or provision of services etc. will be presumed to have an appreciable adverse effect on competition. 87. The Competition Law seeks to protect the competition process but not an individual competitor. Violations, if alleged must be based upon demonstrable economic effects rather than upon formalistic line drawing. The main iss....
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.... of the excise duty concession. All attempts have been made to establish that pre-budget ruling cement prices (Feb 07) have been lower than the inflation adjusted prices prevailing in 1995 (April 95)-lower by Rs. 12 to Rs. 48 per bag. All members would reiterate that improvement in the GDP has improved in all sectors of economy and cement is no exception. However, Cement industry has been ploughing back the profits in creation of additional capacities, which is the need of hour. The cement industry is producing at the optimal level of more than 95% and to meet the growing demand for cement in the XI Plan period (2007-08 to 2011-12), the cement companies have planned for addition of adequate capacity, which would require huge investment. Forced Price Reduction resulting in reduction on margin would adversely affect capacity materialization in time. " 90.3. Meeting of CMA dated 26th March, 2009, they discussed the issues related to supply of cement, which reads as follows: " Minutes of the 92nd Meeting of the Managing Committee of Cement Manufacturers' Association held on 26.03.2009 in New Delhi 7 (a) Supply of Cement in the State of Uttar Pradesh Secretary G....
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....g in each of the markets (Minimum and Maximum) for the relevant period. CMA, traditionally, has been collecting this information from representatives of certain Cement Companies. 10.1.3 In addition, CMA has also been required to furnish Wholesale Prices to Economic Adviser, Ministry of Commerce and Industry as on the last working day of each month by the 10th of the following month. For this, the companies have been designated by DIPP itself after a meeting of Cement Companies and CMA in Feb.2009. This is the information, which is used by DIPP for working out Wholesale Price Index (WPI). 10.1.4 President further informed that in view of the recent developments, the Stations covered by ACC Ltd. and Ambuja Cements Ltd. would have to be served by some other representatives of the Cement Companies who have a presence in each one of these places. 10.1.5 President requested Members to come forward and voluntarily take this up on a regular basis so that a system and procedure is put in place for collection of this information. The concerned Companies were also requested to send the names of their Nominated representatives to CMA, with their contact numbers, e-ma....
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....ies which could be nothing else but acts of cartelization. 90.8. Further, while the CMA had been directed by the DIPP to collect information relating to indicative retail price ranges in 34 centres across India on a weekly basis and wholesale price index from 10 centres and submit it to the Government, the CMA chose to have the information collected at a retail level for 34 centres from various cement companies among themselves (Leaders in their respective areas). Effectively therefore, while it was never intended that the cement companies should have access to details such as prices, production capacity etc. of its competitors but it is the very same competitors who were collecting the said information from other competitors. 91. It was vehemently urged by the learned counsel for the Appellant that CMA was collecting prices of cement for transmission to the concerned authorities in the Government. However, CMA was also sharing this data with its members, is apparent from decisions taken in its meetings, as noticed above. 92. From the proceedings of CMA and the High Power Committee, it is clear that the information collected by individual cement companies provided clear op....
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....t requires that the definition be drawn in deliberately wide terms. It covers an understanding as well as an agreement, and an informal as well as a formal arrangement, which leads to cooperation to purchase shares to acquire control of a company. This is necessary, as such arrangements are often informal, and the understanding may arise from a hint. The understanding may be tacit, and the definition covers situations where the parties act on the basis of a "nod or a wink". Unless persons declare this agreement or understanding, there is rarely direct evidence of action in concert, and the Panel must draw on its experience and common sense to determine whether those involved in any dealings have some form of understanding and are acting in co-operation with each other ". 96. The test of proof balance of probabilities or strict proof was considered by the Hon'ble COMPAT in "M/s. International Cylinder (P) Ltd. v. Competition Commission of India & Ors.− Appeal No. 21/2012" wherein Appellate Tribunal held: "30. The burden in this behalf cannot be equated with the burden in the criminal cases where the prosecution has to prove all allegation beyond the reasonable doub....
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....e stage where an agreement properly so-called has been concluded, amounts to cooperation between them has been knowingly substituted for the risks of competition. 100. Information exchange can constitute a concerted practice if its reduces strategic uncertainty in the market thereby facilitating collusion, that is to say, if the data exchanged is strategic. In European Union Law, the aforesaid proposition has been shown in the guidelines on the applicability of Article 101 of the Treaty on the functioning of the European Union to horizontal co-operation agreements while explained. 101. In India the horizontal agreements if directly or indirectly determines purchase or sale prices, in effect will attracts Section 3(3)(a). If it limits or controls production, supply, markets, technical development, investment or provision of services it will attracts Section 3(3)(b). Once agreement is noticed and any one or other ingredients of Section 3(3)(a) or Section 3(3)(b) is found, the automatic presumption will be that such agreement has an adverse Anti-competitive effect on competition. 102. Anti-competition effect factors noticed in Section 19(3) (a) to (c) relates to creation o....
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....ed, it is clear that there are absolute change in price of Appellants in each state which would show clearly that the Appellants without any reason or justification grossly hiked the prices totally departing from their normal trends over the previous years. B) Price Charts A perusal of the table as handed over to the bench on 11th October, 2017 shows a Region/State wise break of the range of percentage change in prices (2007-2011). The same reflects on the Range of Percentage change in the month of October over September (2007-2011) for the Southern States and for the month of February over January (2007-2011) for Central, Northern and Eastern States highlighting the unprecedented trend for the percentage increase in the prices which was not the case in the previous years for the corresponding months. For instance, in Southern States (T.N, Kerala, AP and Karnataka), the percentage change in the month of October 2010 over September 2010 went upto 29.93%. The increase continued upto Feb 2011. In Western, Eastern and Central/ Northern Indian states the percentage increase in February, 2011 over January 2011 was more than in any of the previous months of the year or o....
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....p; (in tonnes) Company 2009 2010 October November Remarks October November Remarks ACC 103327 88425 Decrease 120695 115481 Decrease Shree 701611 708686 Increase 869064 655290 Decrease Ultra 275423 249253 Decrease 490792 348675 Decrease India Cements 316365 300175 Decrease 305757 261469 Decrease ACL 149654 152995 Increase 173758 132051 Decrease Birla 206659 185529 Decrease 234887 200098 Decrease Madhya Pradesh Company 2009 2010 October November Remarks October November Remarks ACC 196936 180052 Decrea....
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.... dispatches shows that in the months of November and December 2010-11 over 2009-10, production in absolute terms actually fell by (-5.43) and (-3.41%). Similarly, the dispatch during the same periods actually fell by (-6.33%) and (-4.90 %) thus showing that in fact the dispatches fell even more than the fall in production. (Note: Data taken from CMA and Ministry of Statistics). Cement Production and Dispatches Month Cement Production Cement Dispatches In Absolute %age change in 10-11 over 09-10 In Absolute %age change in 10-11 over 09-10 2010-11 2009-10 2010-11 2009-10 April 14.70 13.40 9.70 14.44 13.26 8.90 May 14.47 13.28 8.96 14.18 13.06 8.58 June 13.77 13.19 4.40 13.81 13.32 3.68 July 13.23 13.01 1.69 13.30 12.73 4.48 August 12.85 12.51 2.72 12.81 12.39 3.39 September 12.67 11.83 7.10 12.68 11.74 8.01 October 14.87 12.39 20.02 14.58 12.22 19.31 November 11.84 12.52 -5.43 11.69 12.48 -6.33 December 13.59 14.07 -3.41 13.60 14.30 ....
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....he 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 installed capacity Total Installed capacity excluding ACC Ltd. and ACL as on 31.03.2011 234.30 MMT Total Installed capacity including ACC Ltd. and ACL as on 31.03.2011 286.38 MMT Actual available capacity excluding ACC Ltd. and ACL as on 31.03.2011 224.41 MMT Capacity utilisation excluding ACC Ltd. and ACL on 31.03.2011 168.29 MMT % Capacity utilisation excluding ACC Ltd. and ACL on actual available capacity of 224.41 MMT as on 31.03.2011 75% % Capacity utilisation including ACC Ltd. and ACL on reported installed capacity of 286.38 MMT as on 31.03.2011 73% c) Capacity Utilization was quite low during 2010-11 even when the available capacity is taken as on 31st March, 2010 and capacity additions for the current year are not considered. d) The fact that low capacity utilization was witnessed by the companies is apparent even from th....
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....er 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 law [Please refer to M/s International Cylinder (P) Ltd. and Ors. v. Competition Commission of India, 2014 Comp LR184 (CompAT). In the present case, even if the strictest standard was to be adopted, there is no doubt that the Appellants have violated both sections 3(3)(a) and (b) of the Competition Act and deserve to be punished as such. 105. Even if we go into the question of dispatch and production coordination, the fact that th....
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....s 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 market, have due regard to all or any of the following factors, namely:- (a) physical characteristics or end-use of goods; (b) price of goods or service; (c) consumer preferences; (d) exclusion of in-house production; (e) existence of specialised producers; (f) c....
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....ion. 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 mind that the process of defining the relevant market starts by looking into a relatively narrow potential product market definition. The potential product market is then expanded to include those substituted products to which buyers would turn in th....
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....i Ambuja ACC india Cement Ultratech Madras Coment Change Prices Change Price Change Provided are (Rs./Bag) Average Retail Change Prices of average price for cach month Cement Change Jan-07 210.00 194.34 208.00 Feb-07 211.00 5.24 221.00 2.79 199.76 218.00 4.81 Mar-07 7.11 226.00 4.52 231.00 7.77 215.28 225.00 3.21 Apr-07 0.00 226.00 1.73 235.00 0.13 215.55 227.00 0.89 May-07 1.77 230.00 0.00 235.00 2.51 220.96 230.00 1.32 Jun-07 2.61 236.00 2.98 242.00 2.27 225.97 235.00 2.17 Jul-07 2.97 243.00 1.24 245.00 2.28 231.12 240.00 2.13 Aug-07 0.41 244.00 4.08 255.00 0.98 233.39 245.00 2.08 Sep-07 1.23 247.00 0.00 255.00 1.47 236.81 250.00 2.04 Oct-07 0.00 247.00 0.00 255.00 0.24 237.38 250.00 0.00 Nov-07 -0.40 246.00 0.00 255.00 -0.26 236.77 246.00 -1.60 Dec-07 0.81 248.00 4.39 254.00 -0.09 236.55 248.00 0.81 Jan-08 2.02 253.00 4.33 26....
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....0 7.41 261.00 5.70 252.85 250.00 6.38 Apr-10 7.00 275.00 6.42 282.00 7.28 280.00 12.75 285.10 275.00 10.00 May-10 -1.45 271.00 -0.71 280.00 -3.21 271.00 -6.72 265.93 265.00 -3.64 Jun-10 -4.43 259.00 -4.64 267.00 4.43 259.00 -6.70 248.11 254.00 -4.15 Jul-10 -10.04 233.00 -5.99 251.00 -9.27 235.00 -10.75 221.43 235.00 -7.48 Aug-10 -5.15 221.00 -5.98 236.00 4.26 225.00 -0.09 221.23 220.00 -6.38 Sep-10 5.88 234.00 4.66 247.00 4.99 232.26 250.00 13.64 Oct-19 26.07 295.00 19.84 296.00 27.46 296.04 295.00 18.00 Nov-10 4.75 309.00 5.41 312.00 -0.44 294.73 290.00 -1.69 Dec-10 0.00 309.00 -1.60 307.00 0.16 295.21 290.00 0.00 Jan-11 -1.62 304.00 0.65 309.00 0.51 296.71 295.00 1.72 Feb-11 2.96 313.00 1.29 313.00 1.30 300.57 300.00 1.69 Document 3 Tamil Nadu Month ACC India Cement Madras Ultra Tech Cement Change Price Change Avera....
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.... 0.16 Jun-09 -0.39 258.00 -0.36 277.00 -0.78 255.00 271.18 -0.04 Jul-09 -3.10 250.00) -1.08 274.00 -0.78 253.00 272.00 0.30 Aug-09 0.00 250.00 -1.82 269.00 -1.98 248.00 271.96 -0.01 Sep-09 -6.00 235.00 -2.23 263.00 -2.42 242.00 264.86 -2.61 Oct-09 -0.85 233.00 -2.66 256.00 -2.89 235.00 263.02 -0.69 Nov-09 -4.72 222.00 -10.94 228.00 -8.51 215.00 236,16 -10.21 Dec-09 -2.70 216.00 -10.53 204.00 -2.33 210,00 222.17 -5.92 Jan-10 1.39 219.00 11.27 227,00 8.57 228.00 227.38 2.35 Feb-10 4.11 228.00 0.44 228.00 3.07 235.00 227.93 0.24 Mar-10 4.39 238.00 7.89 246.00 4.26 245.00 249.77 9.58 Apr-10 6.72 254.00 10.16 271.00 10.20 270.00 271 81 8.82 May-10 2.36 260.00 -6.27 254.00 -4.44 258.00 271 39 -0.15 Jun-10 -4.62 248.00 -7.09 236.00 -6.20 242.00 237.13 -12.62 Jul-10 -13.31 215.00 -11.86 208.00 -13.22 210.00 208.54 -12.06....
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....8.00 1.66 255.60 Oct- 0.38 266,00 0.00 275.00 0.00 248.00 -0.23 255.09 Nov-08 0.38 267.00 0.00 275.00 -0.81 246.00 0.08 255.29 Dec-08 -1.87 262.00 0.00 275.00 -2.44 240.00 -1.08 252.54 Document 6 Moeth ACC India Cement Madras Ultra Tech cement Jan-09 0.00 262.00 000 275.00 0.00 240.00 0.13 252.86 Feb-09 -0.76 260.00 0.00 275.00 0.00 240.00 -0.14 252.50 Mar-09 0.00 260.00 0.00 275.00 0:00 240.00 0.70 250 72 Apr-09 154 264.00 0.00 275.00 0.00 240.00 1.19 253.71 May-09 0.00 264.00 0.00 275.00 083 238.00 048 254.92 Jun-09 0.00 264.00 0.00 275.00 -0.84 236.00 1.27 258.16 Jul-00 -0.38 263.00 0.00 275.00 -0.85 234.00 0.63 259.79 Aug-09 -1.52 259.00 -5.45 260.00 0.00 234.00 2.57 253.12 Sep-00 -1.93 254.00 0.77 258.00 3.85 225.00 425 242.37 Out-09 -2.76 247.00 -2.71 251.00 -6.67 210.00 435 231.X3 240.00 Nov-09 -7.2....
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.... 213.00 100 210.00 31631 -0.04 Nov-07 M 21700 0.00 213.00 125.00 2000 217.01 0.12 Elec-07 21700 01 213.00 11:00 225.00 208.00 217.04 0.00 Jan-08 317.00 047 21400 225 00 217.54 0.37 Feb- 138 220.00 21400 225.00 20.00 215 017 0.11 Ma 220.00 447 213.00 8.00 225.00 208.00 218.00 -0.02 App-at 845 221.00 41 21600 225.00 192 212.00 217 -0.06 May-0 041 322.00 0.00 216.00 444 224.00 212.00 217M -0.01 Jun 045 221.00 093 218.00 45 223.00 216.00 21939 0.70 236 226.00 229 223.00 0.001 22300 120 00 1.69 Aug-08 1.37 23100 29 229.00 240 229.00 A91 2279 2.18 Sep- 087 132.00 44 328.00 2431 00 3100 23 -0.56 Oct-08 1.29 2200 000 401 225.0 -0.74 Noe- 411 228 00 044 22100 235 00 92 216.00 225.04 0.01 Dec-08 26) 222 00 214 424 225.00 2.T 210.00 219.22 -2.59 No. of Companies Document 8 M Antga ACC India Co....
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..../OPs and Non-OPs (2008-2011) Table 1: OPS Month-on-month percentage price changes across OPs and Non-OPs (2007) ACL ACC Company CENTURY TEXTILES INDIA CEMENTS JAYPEE CEMENTS LAFARGE MADRAS CEMENTS ULTRATECH CCI 256 5% 213 0% January February March April May June July August September October November December 0% 1% 0% 0% 7% 0% 0% 6%6 0% 0% 1% 116 1% 0% 1% 0% 0% 6% 0% 0% 0% 2% 0% 4% 0% -1% -1% 8% 0% 0% 1563 1% 0% 0% 0% 0% 7% 1% -1% 456 1% 1% -1% 1% 2% 2% 8% 0% 1% 1% 1% -1% 0% 1% 0% 3% 6% 2% 1% 2% 3% 14/1 8% 0% -1% 1% 7% 0% 0% 0% 1% 1% 0% 1% 0% 0% 7% 1% 1% 2% 4% 2% 2% 0% CHETTINAD CEMENTS 296 2% 8% 6% 1% 2% 25 3% 3% 2% -1% Non-OPs KESORAM INDUSTRIES -1% 1% 4% 6% 35 0% -1% 7% 196 -1% -2% MANGALAM CEMENTS -1% 0% 3% 6% 0% 0% RAIN COMMODITIES LTD 2% 0% 1% 3% -1% 3% 0% 1% 0% 3% 8% 1% ....