TaxTMI 
TaxTMI 
2019 (4) TMI 145
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....y", and "subject countries"). 2. Eveready is a domestic manufacturer of the subject goods and a member of the domestic industry on whose behalf the application for initiation of anti-dumping investigations was filed. The first respondent (Union Department of Revenue, Ministry of Finance hereafter "the Union" or "the Central Government"), determines whether or not to accept the recommendations of the DA. The Central Government may, within three months of the date of publication of final findings by the Designated Authority, impose by notification in the Official Gazette, anti-dumping duty on the goods originating in or exported from the countries in respect of which suspected dumping activities are confirmed by the DA. The latter (DA) carries out anti-dumping investigations and recommends whether or not to impose anti-dumping duties to the Central Government. It has, in the present case, issued the impugned final findings. The third respondent is Godrej & Boyce Mfg. Co. Ltd (hereafter "Godrej") an interested party in the anti-dumping investigations, who was impleaded in the present proceedings through C.M. No. 39592 of 2017. Brief Facts 3. The facts, in brief, are that in 2....
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....he subject goods from the subject countries and earned huge profits. Having concluded as above, the Authority is of the view that imposition of antidumping duty, on the imports of the subject goods, originating in or exported from the subject countries, is not required." 5. Following this, no Gazette Notification imposing anti-dumping duty was issued by the Union. 6. On 01.11.2016, the Petitioner filed a representation before Respondent No. l. However, the Union, in its reply to an RTI application dated 23.12.2016, stated that: "In the instant case the DGAD has not recommended imposition of Anti-Dumping duty on imports of AA Dry Cell Batteries originating in or exported from China PR and Vietnam. As there is no further action lying at our end the final findings of the DGAD are put up for perusal and information please." 7. The Petitioner then challenged the impugned final findings before the Customs, Excise & Service Tax Appellate Tribunal, Principal Bench, New Delhi ("CESTAT" or "Appellate Tribunal"), under Section 9C of the Customs Tariff Act, 1975 ("Customs Tariff Act"). The Appellate Tribunal, by Order dated 20.07.2017("Impugned Order"), dismissed the appeal, statin....
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....tion of the anti-dumping duty in May 2013, the imports increased significantly in the current Period of Investigation and caused injury to the domestic industry as established from the detailed analysis in the disclosure statement. ii) Demand for the product under consideration has increased during the POI. However, despite increase in demand, the $hare of the domestic industry in the domestic market has substantially declined while the share of the imports from the subject country has significantly increased. (para 43) iii) Capacity utilization of the domestic industry over the injury period declined despite increase in demand, in the face of increase in imports from the subject countries. Production of the domestic industry has increased up to 2013-14, but declined in the POI, whereas demand during the same period has increased significantly. (para 48) iv) Inventory level of the domestic industry has increased. (para 58) v) Presence of dumped imports has resulted in decline in capacity utilization, production and sales, despite increase in demand. (para 79) vi) Imports are undercutting the prices of the domestic industry. Import price is much lower than the level o....
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..... Or it may be due to lack of wide spread marketing network by the domestic industry. (b) the DA noted that the landed price of imports is below the selling price of the domestic industry, resulting in price undercutting. This may be due to the fact that majority of the imports from the subject countries, especially from China, are low value products. (c) The threat of injury was not substantiated by information provided by the domestic industry pertaining to the injury period and the POI of the present investigation. (d) Despite dumping, huge amount of profit is made by the domestic industry with significantly high ROCE position. (e) The landed value of imports is lower than the selling price of the domestic industry. Therefore, Indian price cannot be interpreted as attractive for exports by the subject countries. (f) Net sales realization of the domestic industry is more than the landed price and also the non-injurious price of the domestic industry. Therefore there was no price impact on the domestic industry. (g) Since the domestic industry is able to sell at prices higher than the landed prices and still then make huge profits, the huge volume of imports may ....
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....he findings concluded that despite dumping, "huge amount of profit is made by the domestic industry with significantly high ROCE position. "The petitioners rely on a table to show that the return on investments earned by the domestic industry over the POI to say that the DA granted 22% return on capital employed for the purpose of determination of NIP and Designated Authority has repeatedly held that this 22% return on capital employed represents reasonable return. The factual basis for stating that the domestic industry has earned huge profits, is contested and it is submitted that the ROI of the domestic industry is below 22%. On one hand the DA considered consistently in more than 500 investigations that 22% return on capital employed is reasonable and is required to be considered in order to determine NIP of the domestic industry, the DA has determined NIP considering 22% return on capital employed, on the other hand, the DA has now held that the domestic industry had earned huge profits. 15. Learned counsel states that the DA in a large number of investigations held that the comparison of NIP with NSR is irrelevant. The DA consistently held that the purpose of NIP determina....
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....es practicing this law. If other Investigating Authorities are making determination without NIP law, it is only because NIP comparison with NSR is entirely immaterial. More importantly, the final findings is contradictory on this account because DA at one place found price effect, and held otherwise at other place. Relevant part of the final findings are as follows: "Para 53 - From the above information, the Authority notes that the landed price of imports (including basic customs duty) is below the selling price of the domestic industry, resulting in price undercutting. This may be due to the fact that majority of the imports from the subject countries, especially from China, are low valve products. 54. It is noted that the price underselling effect of the dumped imports from China PR is significant. This may be again due to the fact that majority of the imports from the subject countries, especially from China, are low value products..." 18. It is argued that the DA failed to consider its own position taken in another case and its own arguments before the Tribunal, that too just few days before the decision in that case. This is a clear case of contradictory and discrimi....
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....low: "...The Authority notes that demand for the product under consideration has marginally increased during the POI as compared to the base year. While the domestic industry holds significant share in the market throughout the injury period including the POI, the rest of the suppliers including the subject countries contribute to the market minimally. From the aforesaid data, the only concern appear to be the increase of the market share of the subject countries from1.23% in the base year to 12.87% in the POI, whereas the market share of the domestic industry has declined from 89.87% during the base year to 82.97%during the POI. But, this trend needs to be analyzed with reference to the production capacity of the domestic industry and their actual production during the injury period including the POI. As per the information given in the relevant Para of this finding, the domestic industry has increased its production capacity throughout the injury period. It increased its production capacity from 2150400 thousand pcs in the base year to 2418400 thousand pcs in the POI. Bit, despite demand in the domestic market more than its capacity, it neither increased its production in line....
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.... Market Share China % 16.78 47.10 71.20 69.76 Vietnam % 4.59 9.18 10.11 29.93 Subject Countries % 21.37 56.28 81.31 99.70 Other Countries % 78.63 43.72 18.69 0.30 Total % 100.00 100.00 100.00 100.00 ********** ******** Capacity, Production, Capacity, utilization and Sales Volume 50. As noted from the table below, there is an enhancement of capacity of the domestic industry in the period 2012-13 and 2013-14 in line with increase in demand, put during POI, the domestic industry abstained from increasing its capacity further despite increasing demand. Production of the domestic industry has increased up to 2013-14, but declined in the POI, whereas demand during the same period has increased significantly. This is the situation despite the domestic industry realising a better price than the landed price. Particulars UOM 2011-12 2012-13 2013-14 POI Installed capacity 000 Pcs 21,50,400 23,09,400 24,18,400 24,18,40....
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....310-320 Vietnam Landed price of imports Rs./'000Pcs 2,305 2,396 2,770 2,739 Net Sales Realisation Rs./'000Pcs *** *** *** *** Price Undercutting Rs./'000Pcs *** *** *** *** Price Undercutting % *** *** *** *** Price Undercutting % Range 30-40 30-40 20-30 50-60 Subject countries as a whole Landed price of imports Rs./'000Pcs 2,606 2,912 1,321 1,527 Net Sales Realisation Rs./'000Pcs *** *** *** *** Price Undercutting Rs./'000Pcs *** *** *** *** ********** ******** Magnitude of dumping 61. The Authority notes that the dumping margin of the imports from subject countries is more than de-minimus and substantial. Growth 62. The Authority notes that the domestic industry has shown negative growth interms of production and sales. However, profit has shown significant improvement. Growth UOM 201112 2012-13 2013-14 POI Production % - 3.24 1.14 -2.25 Domestic Sales % - -0.61 2.78 -2.46 Selling Pric....
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....der, inter alia, such factors as: (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 exporter indicating the likelihood of substantially increased dumped exports to Indian markets, taking into account the availability of other export markets to absorb any additional exports; (c) whether imports are entering at prices that will have a significant depressing or suppressing effect on domestic prices, and would likely increase demand for further imports; and (d) inventories of the article being investigated. b) Excess Production Capacities in the subject country:- 68. On the basis of information provided by the domestic industry, in the earlier sunset review final findings issued on 20th May, 2013, at Para 66, the Authority had held as follows: "66. The domestic industry in its submissions has claimed that the producers in China are having significant surplus capacities as compared to the demand of subject goods in the domestic market. Domestic industry submitted t....
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....fered by the domestic industry. vi. Petitioners request the authority to recommend benchmark form of duties in the present case since the product was earlier attracting benchmark form of duty. Moreover, while the he imports have been reported at significantly different prices, costs of production do not have significant variations. Therefore, it would be appropriate to have benchmark form of duty. vii. The duty should be imposed in terms of US$. RECOMMENDATIONS 79. The Authority notes that the investigation was initiated and notified to all interested parties and adequate opportunity was given to the exporters, importers and other interested parties to provide positive information on the aspect of dumping, injury and causal link. Having initiated and conducted the present investigation into dumping, injury and causal link in terms of the Antidumping Rules, the Authority is of the view that the dumped imports have not caused material injury to the domestic industry in view of the facts that the domestic industry has realized much higher selling price as compared to their non-injurious price and also the landed price of the subject goods from the subject count....
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....ed authority. - (1) It shall be the duty of the designated authority in accordance with these rules: ... (d) to recommend the amount of anti-dumping duty equal to the margin of dumping or less, which if levied, would remove the injury to the domestic industry, and the date of commencement of such duty; and.. .............. ........... 10. Determination of normal value, export price and margin of dumping. - 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 the margin of dumping taking into account, inter alia, the principles laid down in Annexure I to these rules. 11. Determination of injury. -(1) In the case of imports from specified countries, the designated authority shall record a further finding that import of such article into India causes or threatens material injury to any established industry in India or materially retards the establishment of any industry in India. (2) The designated author....
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....the essential facts under consideration which form the basis for its decision. 17. Final findings. - (1) The designated authority shall, within one year from the date of initiation of an investigation, determine as to whether or not the article under investigation is being dumped in India and submit to the Central Government its final finding - (a) as to, - (i) the export price, normal value and the margin of dumping of the said article; (ii) whether import of the said article into India, in the case of imports from specified countries, causes or threatens material injury to any industry established in India or materially retards the establishment of any industry in India; (iii) a casual link, where applicable, between the dumped imports and injury; (iv) whether a retrospective levy is called for and if so, the reasons therefor and date of commencement of such retrospective levy: Provided that the Central Government may,in its discretion in special circumstances extend further the aforesaid period of one year by six months: Provided further that in those cases where the designated authority has suspended the investigation on the accep....
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....g its final findings. 18. Levy of duty. - (1) The Central Government may, within three months of the date of publication of final findings by the designated authority under rule 17, impose by notification in the Official Gazette, upon importation into India of the article covered by the final finding, anti-dumping duty not exceeding the margin of dumping as determined under rule 17. (2) In cases where the designated authority has selected percentage of the volume of the exports from a particular country, as referred to sub-rule (3) of rule 17, any antidumping duty applied to imports from exporters or producers not included in the examination shall not exceed - (i) the weighted average margin of dumping established with respect to the selected exporters or producers or, (ii) where the liability for payment of anti-dumping duties is calculated on the basis of a prospective normal value/ the difference between the weighted average normal value of the selected exporters or producers and the export prices of exporters or producers not individually examined: Provided that the Central Government shall disregard for the purpose of this sub-rule any zero margin, m....
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....f the exports from the country in question which can reasonably be investigated. ............ ........ ........ Article 11 Duration and Review of Anti-Dumping Duties and Price Undertakings 11.1 An anti-dumping duty shall remain in force only as long as and to the extent necessary to counteract dumping which is causing injury. 11.2 The authorities shall review the need for the continued imposition of the duty, where warranted, on their own initiative or, provided that a reasonable period of time has elapsed since the imposition of the definitive anti-dumping duty, upon request by any interested party which submits positive information substantiating the need for a review.(21) Interested parties shall have the right to request the authorities to examine whether the continued imposition of the duty is necessary to offset dumping, whether the injury would be likely to continue or recur if the duty were removed or varied, or both. If, as a result of the review under this paragraph, the authorities determine that the anti-dumping duty is no longer warranted, it shall be terminated immediately. 11.3.....
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.... Authority determines a "lis" between persons supporting the levy of duty and those opposing the said levy. 27. Rule 10 of the said Rules prescribes the criteria for the determination of the normal value, export price and margin of dumping, while Rule 11 deals with the determination of injury which according to Annexure II to the 1995 Rules is based on positive evidence and involves an objective examination of both: (a) the volume and the effect of the dumped imports on prices in the domestic market for like products; and (b) the consequent impact of these imports on domestic producers of such products. It is evident that the determination of injury is premised on an objective examination of the material submitted by the parties. Moreover, under Rule 6(7) of the 1995 Rules, the DA is required to make available the evidence presented to it by one party to other interested parties, participating in the investigation. The court also held that the DA is obliged to adhere to the Rules while conducting investigations and is duty bound to follow the principles of natural justice in the exercise of power conferred on it; the DA also has to afford to all the parties, who have filed....
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....ernment to disagree with the Designated Authority's recommendation. 32. In Alembic Ltd. v. Union of India, 2013 (291) ELT 327 (Guj.), for instance, the Central Government, after taking note of relevant factors, decided that it would not be in public interest to impose anti-dumping duty, despite the recommendations made by the Designated Authority. The Court was of the opinion that the Designated Authority, under Rule 3,acts for and on behalf of the Government, to determine the existence, degree and effect of any alleged dumping and that in that view of the matter, its findings with respect to such issues may not be open to question by the Central Government. However, the Court clarified, this did not mean that even the recommendations of the Designated Authority are binding on the Central Government. In explaining its rationale, the court reasoned as follows: "We are conscious that DA had come to certain conclusions which were not disputed by the Central Government. Insofar as factual findings are concerned, such findings were perhaps not even open to challenge by the Central Government. ... However, in the present case, we are of the opinion that the Central Government....
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....article into India causes or threatens material injury to any established industry in India or materially retards the establishment of any industry in India;" 34. The Andhra Pradesh High Court, in Vuppalamritha Magnetic Components Limited v. Union of India 2010 (256) ELT 487 (A.P.), has interpreted this section as requiring the Central Government to decide regarding material injury. The Designated Authority is not made mention of. The Central Government is thus found to be at liberty to impose antidumping duty, even in the absence of a positive finding by the Designated Authority. 35. The combined effect of the statutory provisions contained in the Act and the rules shows that the DA - under Rule 3 of acts for and on behalf of the Government while carrying out the investigation to determine the existence, degree and effect of the alleged dumping. In that view of the matter, the findings of the designated authority with respect to such issues may not be open to question by the Central Government. In the opinion of this court, when it is not open to the Central Government to question the final findings recorded by the designated authority - on account of a negative recommendati....
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....rlier) has to be revoked within forty-five days of publication of the final findings. 39. In the facts of the case, if the petitioners' contentions were to be accepted, the "window period" for the DA to have reconsidered the matter after judgment, under Article 226 would have been between 27.9.2016 and 20 April 2017. Even if, arguendo anti-dumping duty were justified, the matter would necessarily have to be remanded back before the DA for reconsideration. Anti-dumping duty will only be imposed once both the DA and the Central Government agree that it is warranted. However, as the period of investigation is from 01.04.2014 to 31.03.2015, all determinations will only concern this 12-month period. 40. On the merits of the decision, the court notices that the DA in this case, considered all the facts relevant for it to decide whether there was incidence of dumping of the subject goods. The DA noted that the domestic industry is offering product of different varieties and types with different price ranges. Similarly, the Chinese batteries are also being sold in the market at different price ranges. Therefore, the prices of the domestic industry were found to be comparable with the....