TaxTMI 
TaxTMI 
2018 (10) TMI 601
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....ping duty on Ductile Iron Pipes originating in or exported from the Peoples Republic of China, has been rejected. 3. Before we advert to the facts of the case as they unfold and to the grounds of challenge in the petition to the order dated 17/05/2018, by which the application of the petitioner for extension of the anti-dumping duty for a further period had been rejected, the relevant legal provisions need to be reproduced which are as under: "SECTION 9A . Anti- dumping duty on dumped articles. - (1) Where any article is exported by an exporter or producer from any country or territory (hereinafter in this section referred to as the exporting country or territory) to India at less than its normal value, then, upon the importation of such article into India, the Central Government may, by notification in the Official Gazette, impose an antidumping duty not exceeding the margin of dumping in relation to such article. Explanation. For the purposes of this section, - (a) "margin of dumping", in relation to an article, means the difference between its export price and its normal value; (b) "export price", in relation to an article, means the price of the artic....
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....idumping duty or by import of such article in an unassembled or disassembled form or by changing the country of its origin or export or in any other manner, whereby the antidumping duty so imposed is rendered ineffective, it may extend the antidumping duty to such article or an article originating in or exported from such country, as the case may be.] (2) The Central Government may, pending the determination in accordance with the provisions of this section and the rules made thereunder of the normal value and the margin of dumping in relation to any article, impose on the importation of such article into India an anti-dumping duty on the basis of a provisional estimate of such value and margin and if such anti-dumping duty exceeds the margin as so determined :- (a) the Central Government shall, having regard to such determination and as soon as may be after such determination, reduce such anti-dumping duty; and (b) refund shall be made of so much of the antidumping duty which has been collected as is in excess of the anti-dumping duty as so reduced. (2A) Notwithstanding anything contained in sub-section (1) and sub-section (2), a notification issued under sub-section (....
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....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 outcome of such a review for a further period not exceeding one year. (6) The margin of dumping as referred to in subsection (1) or sub-section (2) shall, from time to time, be ascertained and determined by the Central Government, after such inquiry as it may consider necessary and the Central Government may, by notification in the Official Gazette, make rules for the purposes of this section, and without prejudice to the generality of the foregoing, such rules may provide for the manner in which articles liable for any anti-dumping duty under this section may be identified, and for the manner in which the export price and the normal value of, and the margin of dumping in relation to, such articles may be determined and for the assessment and collection of such anti-dumping duty. (6A) Th....
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....129C of the Customs Act, 1962 (52 of 1962) shall apply to the Appellate Tribunal in the discharge of its functions under this Act as they apply to it in the discharge of its functions under the Customs Act, 1962 (52 of 1962). (5) Every appeal under sub-section (1) shall be heard by a Special Bench constituted by the President of the Appellate Tribunal for hearing such appeals and such Bench shall consist of the President and not less than two members and shall include one judicial member and one technical member. 3.1 The Relevant Rules i.e. the Customs Tariff Identification, Assessment And Collection of Anti Dumping Duty on Dumped Articles for Determation Of Injury) Rules, 1995 read as under: 3. Appointment of designated authority. - (1) The Central Government may, by notification in the Official Gazette, appoint a person not below the rank of a Joint Secretary to the Government of India or such other person as that Government may think fit as the designated authority for purposes of these rules. (2) The Central Government may provide to the designated authority the services of such other persons and such other facilities as it deems fit. 4. Duties of the designated ....
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.... that there is sufficient evidence regarding - (i) dumping, (ii) injury, where applicable; and (iii) where applicable, a casual link between such dumped imports and the alleged injury, to justify the initiation of an investigation. Explanation. - For the purpose of this rule the application shall be deemed to have been made by or on behalf of the domestic industry, if it is supported by those domestic producers whose collective output constitute more than fifty per cent of the total production of the like article produced by that portion of the domestic industry expressing either support for or opposition, as the case may be, to the application. (4) Notwithstanding anything contained in sub-rule (1) the designated authority may initiate an investigation suo moto if it is satisfied from the information received from the Commissioner of Customs appointed under the Customs Act, 1962 (52 of 1962) or from any other source that sufficient evidence exists as to the existence of the circumstances referred to in clause (b) of sub-rule (3). (5) The designated authority shall notify the government of the exporting country before proceeding to initiate an investigation. 6.....
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....tions in cases where the article is commonly sold at the retail level, to furnish information which is relevant to the investigation regarding dumping, injury where applicable, and causality. (6) The designated authority may allow an interested party or its representative to present the information relevant to the investigation orally but such oral information shall be taken into consideration by the designated authority only when it is subsequently reproduced in writing. (7) The designated authority shall make available the evidence presented to it by one interested party to the other interested parties, participating in the investigation. (8) In a case where an interested party refuses access to, or otherwise does not provide necessary information within a reasonable period, or significantly impedes the investigation, the designated authority may record its findings on the basis of the facts available to it and make such recommendations to the Central Government as it deems fit under such circumstances. 7. Confidential information- (1) Notwithstanding anything contained in sub-rules (2), (3) and (7) of rule 6, sub-rule (2) of rule 12, sub-rule (4) of rule 15 and sub-r....
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....imports and injury, taking into account all relevant facts, including the volume of dumped imports, their effect on price in the domestic market for like articles and the consequent effect of such imports on domestic producers of such articles and in accordance with the principles set out in Annexure II to these rules. (3) The designated authority may, in exceptional cases, give a finding as to the existence of injury even where a substantial portion of the domestic industry is not injured, if- (i) there is a concentration of dumped imports into an isolated market, and (ii) the dumped articles are causing injury to the producers of all or almost all of the production within such market. 12. Preliminary findings. - (1) The designated authority shall proceed expeditiously with the conduct of the investigation and shall, in appropriate cases, record a preliminary finding regarding export price, normal value and margin of dumping, and in respect of imports from specified countries, it shall also record a further finding regarding injury to the domestic industry and such finding shall contain sufficiently detailed information for the preliminary determinations on....
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....g is eliminated: Provided further that the designated authority shall complete the investigation and record its finding, if the exporter so desires, or it so decides. (2) No undertaking as regards price increase under clause (ii) of the sub-rule (1) shall be accepted from any exporter unless the designated authority had made preliminary determination of dumping and the injury. (3) The designated authority may, also not accept undertakings offered by any exporter, if it considers that acceptance of such undertaking is impractical or is unacceptable for any other reason. (4) The designated authority shall intimate the acceptance of an undertaking and suspension or termination of investigation to the Central Government and also issue a public notice in this regard. The public notice shall, contain inter alia, the non-confidential part of the undertaking. (5) In cases where an undertaking has been accepted by the designated authority the Central Government may not impose a duty under subsection (2) of section 9A of the Act for such period the undertaking acceptable to the designated authority remains valid. (6) Where the designated authority has accepted any undertaki....
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....the period of said one year, (b) recommending the amount of duty which, if levied, would remove the injury where applicable, to the domestic industry. (2) The final finding, if affirmative, shall contain all information on the matter of facts and law and reasons which have led to the conclusion and shall also contain information regarding- (i) the names of the suppliers, or when this is impracticable, the supplying countries involved; (ii) a description of the product which is sufficient for customs purposes; (iii) the margins of dumping established and a full explanation of the reasons for the methodology used in the establishment and comparison of the export price and the normal value; (iv) Considerations relevant to the injury determination; and (v) the main reasons leading to the determination. (3) The designated authority shall determine an individual margin of dumping for each known exporter or producer concerned of the article under investigation: Provided that in cases where the number of exporters, producers, importers or types of articles involved are so large as to make such determination impracticable, it may limit i....
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....tinuation or recurrence of dumping and injury to the domestic industry. (2) Any review initiated under sub-rule (1) shall be concluded within a period not exceeding twelve months from the date of initiation of such review. (3) The provisions of rules 6, 7, 8, 9/10, 11, 16, 17, 18, 19, and 20 shall be mutatis mutandis applicable in the case of review. 2 Annexure- I (See Rule 8) Principles governing the determination of normal value, export price and margin of dumping The designated authority while determining the normal value, export price and margin of dumping shall take into account inter alia, the following principles - 1. The elements of costs referred to in the context of determination of normal value shall normally be determined on the basis of records kept by the exporter or producer under investigation, provided such records are in accordance with the generally accepted accounting principles of the exporting country, and such records reasonably reflect the cost associated with production and sale of the article under consideration. 2. Sales of the like product in the domestic market of the exporting country or sales to a third country at prices below per....
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....es in the domestic market of the country of origin of the same general category of article; (ii) the weighted average of the actual amounts incurred and realized by other exporters or producers subject to investigation in respect of production and sales of the like article in the domestic market of the country of origin; or (iii) any other reasonable method, provided that the amount for profit so established shall not exceed the profit normally realized by the exporters or producers on sales of products of the same general category in the domestic market of the country of origin. 5. The designated authority, while arriving at a constructed export price, shall give due allowance for costs including duties and taxes, incurred between importation and resale and for profits. 6. (i) While arriving at margin of dumping, the designated authority shall make a fair comparison between the export price and the normal value. The comparison shall be made at the same level of trade, normally at the ex-factory level, and in respect of sales made at as nearly as possibly the same time. Due allowance shall be made in each case, on its merits, for differences which affect pri....
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....ny reliable information made available at the time of selection. Accounts shall be taken within time limits, where appropriate, of the investigation made in any similar matter in respect of any other market economy third country. The parties to the investigation shall be informed without any unreasonable delay the aforesaid selection of the market economy third country and shall be given a reasonable period of time to offer their comments. 8. (1) The term "non-market economy country" means any country which the designated authority determines as not operating on market principles of cost or pricing structures, so that sales of merchandise in such country do not reflect the fair value of the merchandise, in accordance with the criteria specified in sub-paragraph (3) (2) There shall be a presumption that any country that has been determined to be, or has been treated as, a non-market economy country for purposes of an anti-dumping investigation by the designated authority or by the competent authority of any WTO member country during the three year period preceding the investigation is a nonmarket economy country. Provided, however, that the non-market economy country or the....
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....such an industry, hereinafter referred to as "injury" and casual link between dumped imports and such injury, shall inter alia, take following principles under consideration- (i) A determination of injury shall involve an objective examination of both (a) the volume of the dumped imports and the affect of the dumped imports on prices in the domestic market for like article and (b) the consequent impact of these imports on domestic producers of such products. (ii) While examining the volume of dumped imports, the said authority shall consider whether there has been a significant increase in the dumped imports, either in absolute terms or relative to production or consumption in India. With regard to the affect of the dumped imports on prices as referred to in subrule (2) of rule 18 the designated authority shall consider whether there has been a significant price under cutting by the dumped imports as compared with the price of like product in India, or whether the effect of such imports is otherwise to depress prices to a significant degree or prevent price increase which otherwise would have occurred, to a significant degree. (iii) In cases where imports of a product from....
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....hall be assessed in relation to the domestic production of the like article when available data permit the separate identification of that production on the basis of such criteria as the production process, producers' sales and profits. If such separate identification of that production is not possible, the effects of the dumped imports shall be assessed by the examination of the production of the narrowest group or range of products, which includes the like product, for which the necessary information can be provided. (vii) A determination of a threat of material injury shall be based on facts and not merely on allegation, conjecture or remote possibility. The change in circumstances which would create a situation in which the dumping would cause injury must be clearly foreseen and imminent. In making a determination regarding the existence of a threat of material injury, the designated authority shall consider, inter alia, such factors as: (a) a significant rate of increase of dumped imports into India indicating the likelihood of substantially increased importation; (b) sufficient freely disposable, or an imminent, substantial increase in, capacity of the ex....
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....on pipes which was initially imposed in September 2007 is in force upto 9/10/2018. 4.2 The petitioner - Jindal Saw Ltd, alongwith one Electrosteel Casting Ltd (ECL), Srikalahasti Pipes Ltd (SPL) filed an Application for Sunset Review of Anti-Dumping Duty imposed against the imports of Ductile Iron Pipes. They in all were 54% stake holders in the Indian Market. The Application for Review was filed under Rule 23(1B) of The Rules. The Rule provides that a Review can be filed, on its own initiative or upon a duly substantiated request made by or on behalf of the domestic industry, that the expiry of anti-dumping and its removal is likely to lead to continuation or recurrence of dumping and injury to domestic industry and therefore the same may be further extended. On such a review being filed within a reasonable period of time prior to the expiry of that period when the duty period is to expire, the designated authority shall conclude the review within a period not exceeding twelve months from the date of initiation of such review. 4.3 Since the extended duty period of the anti-dumping duty imposed by the Notification dated 10/10/2013 is to expire on 9/10/2018, by virtue of which....
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.... which was satisfied in the present context. • Though during the cessation of dumping as a result of the enforcement of anti-dumping duty, the imports were negligible and were therefore not causing injury to the domestic market, the applicant explained the effect it would have lest the duty is withdrawn. • In accordance with the prescribed rules, basis for constructing normal value was produced and the same is reproduced hereunder: " Constructed Normal Value Basis for constructing normal value: a) The raw material cost for DI Pipes is calculated on the basis of the weighted cost of raw material of the domestic industry. We reckon that the manufacturers' cost in the subject country will be similar to the cost incurred in the domestic industry. b) The utility and consumables cost has been taken on the basis of the cost incurred by the domestic industry. c) The depreciation, labor cost and other costs for the above subject country is taken based on the cost incurred by the domestic industry. A profit margin of 5% is added to cost to arrive at the normal value Normal Value Calculation :- Production Normal Value ....
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.... 40502 42451 53638 It may be seen from the above that the prices of Chinese exports to India are completely out of sync as compared to the prevailing prices in India and their prices to similarly placed countries. In view therefore, any comparison of the landed value with selling price and cost of the Domestic Industry will not only reflect an incorrect picture but would also be grossly misleading. Domestic Industry is unable to appreciate that when the domestic producers are offering their products in the range of Rs. **** to **** per MT, then why would any prudent customer buy the Chinese products in price in the vicinity of Rs. 154000 per MT. It is absolutely inconceivable that any customer would buy the imported products at virtually more than **** times the prices offered by the Indian producers. The only conclusion that can be drawn is that the Chinese prices to India cannot be relied upon for any analysis. It is also important to note that the Indian producers have sufficient capacities to cater to the complete demand in India and, therefore, there are no supply side constraints. Further, it is also important to note that the FOB price from Chin....
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....eview when made on a duly substantiated application, the designated authority is to consider the need for continuance of the anti-dumping duty. When the earlier provisions of Rule 4 are read in context, it would suggest that the parameters for imposing the duty would have to be gone into to decide continuance thereof, which if the impugned order is read, suggest complete absence of examination of such parameters. 5.6 Rule 6 of the Rules provides for principles governing investigation, which a designated authority is mandated to follow. Rules 10 and 11 provide that an article shall be considered as being dumped if it is exported from a country or territory to India at a price less than its normal value and in such circumstances the designated authority shall determine the normal value,export price and margin of dumping. Similarly, the designated authority shall record a finding that the import of such article causes or threatens material injury or materially retards any establishment and also shall determine the injury to domestic market etc taking into account relevant facts. The procedure thereof has been laid out in Annexure 1 and Annexure 2 of the Rules. In the decision makin....
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....eview has been rejected. It is open for the court to issue directions for initiating Sunset Review and also issue interim directions for issuing a notification for extending and continuing anti-dumping duty. In the case on hand, Mr Joshi submitted that if such interim or final directions were not issued, the notification of anti-dumping duties would cease to be effective from 9/10/2018 and therefore the domestic market would be seriously affected, in the event of cessation of anti-dumping duty. Looking at the manner and the method in which the impugned order is made, this Court should exercise such powers and interim directions ought to be issued that the anti-dumping duty be extended and the Sunset Review be initiated, while quashing the order. That the perfunctory manner in which the decision is arrived is evident from the fact that on an additional application made on 14.05.2018, within three days a decision is taken on 17.05.2018 to refuse initiation of investigation on the application. 5.11 Mr. Joshi submitted that the petitioner, cannot approach the CESTAT, under Section 9C of the Act by way of appeal as such an appeal can only be filed against an order of determination or....
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....pacities were in excess of its own demands. 7. Having considered the submissions of the learned advocates for the respective parties, the issue that arises for our consideration is, whether the impugned order dated 17.5.2018 refusing to initiate a Sunset Review, on an application made by the petitioner, stands the test of it being so passed within the prescribed legal parameters. 8. On facts, as is evident from the Notification dated 10/10/2013, that for the first time, anti-dumping duty on ductile pipes was imposed by a notification dated 14/09/2007. The Central Government had extended the anti-dumping duty on the subject goods i.e. ductile pipes originating in or exported from China for a further period of five years vide a notification dated 10/10/2013. This was done on an assessment of facts in exercise of powers under sub-sections (91) and (5) of Section 9 of the Customs Tariff Act, 1975 read with Rules 18 and 23 of the Customs and Tariff (Identification, Assessment and Collection of Anti-dumping Duty of Dumped Articles for Determination of Injury) Rules, 1995. 8.1 Section 9A provides for imposition of anti-dumping duty and also stipulates that it shall remain in fore....
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....her provides that shall also provide a copy of the application to the known exporters or to the concerned trade associations where the number of exporters is large and the government of the exporting countries. The designated authority may issue notice calling for information from the exporters, foreign producers and other interested parties. 10.1 Rule10 provides that an article shall be considered as dumped if it is exported from a country or territory to India at a price less than the normal value and the margin of dumping, the designated authority shall determine the normal value, export price and the margin of dumping taking into consideration principles laid out in Annexure I. 10.2 Rule 11 provides that in order to determine injury the designated authority shall record a further finding that the import of such article causes or threatens to cause material injury to any established industry or materially retards the establishment of such industry. All relevant facts will be taken into account including the volume of dumped imports, their effect on price and their effect in accordance with principles set out in Annexure II. In an appropriate case the designated authority c....
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....on as the examination of application had prima facie shown improvement of various economic parameters over the injury period and apparently there was no material injury to the domestic industry. 3. Whereas, the petitioners availed the opportunity of oral hearing before the Designated Authority on 15.05.2018 to present their case and make their submissions. The petitioner during the hearing made the following submissions: a) Significant exports have been made by subject country China to Vietnam, Sri Lanka and Turkey at fairly low prices (FOB prices Rs. 36616/MT, Rs. 37973/MT, and Rs. 34367/MT respectively). Even after adjustment of ocean freight, insurance, landing charges etc. the constructed landed value to India would be around Rs. 42451/MT, Rs. 44520/MT and Rs. 40502/MT respectively which are below the domestic selling price (Rs. 45,163/MT) of subject goods by the Domestic Industry in India and therefore in the event of cessation of duty, there is likelihood of subject goods getting diverted to India and hurting local industry. b) Producers in the subject countries have significant capacity (75, 20,000 MT), which is 336% of Indian capacity of 22,35,000 MT and 477% of....
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....hority notes as under: i. The argument that there is likelihood of subject goods exported to Sri Lanka, Turkey and Vietnam getting diverted to India and hurting local industry on the premise that constructed landed value(s) are below the current selling price of the subjects by the Domestic Industry is not entirely valid on the following grounds: a) There is only marginal difference between the domestic selling price and the landed value constructed from the Sri Lankan prices. b) The exports to Vietname, Sri Lanka and Turkey taken together constitute only 27% of exports of the subject goods from China. c) Similarly, the constructed landed value to India of Rs. 42451/Mt, Rs. 44520/Mt and Rs. 40502/MT is based on average export prices for Vietnam, Sri Lanka and Turkey respectively whereas the price attractiveness would depend on volume of only those individual transactions which have values lower than the domestic selling price. ii. The submission made by the petitioner regarding surplus capacities also is incomplete/inconclusive because it neither takes into account domestic demand in China PR nor the exports of hte PUC from China to the rest of the world. In fact, th....