TaxTMI 
TaxTMI 
2019 (4) TMI 396
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....tion 9A 'margin of dumping', in relation to an article, means the difference between its export price and its normal value. 'Export Price' is defined under Clause (b) of the Explanation and 'normal value' is defined under Clause (c) thereof. Generally, normal value in relation to an article, as defined in Clause (c) means the comparable price, in the ordinary course of trade, for a like article when destined for consumption in the exporting country or territory. When there are no sales of the like article in the ordinary course of trade in the domestic market of the exporting country, or when such sales do not permit a proper comparison because of the market situation or low volume of sales in such domestic market, the normal value is either the comparable representative price of the like article when exported from the exporting country to an appropriate third country or the cost of production of the said article in the country of origin along with reasonable addition for administrative, selling and general costs, and profit. Section 9A(3) empowers the Central Government, if it is of the opinion that there is a history of dumping in respect of the dumped article under inquiry which....
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....ntral Government may appoint a person not below the rank of a Joint Secretary to the Government of India or such other person as it may think fit as the designated authority for the purposes of the rules. Rule 4 sets out the duties of the designated authority : '4. Duties of the designated authority. - (1) It shall be the duty of the designated authority in accordance with these rules - (a) to investigate as to the existence, degree and effect of any alleged dumping in relation to import of any article; (b) to identify the article liable for anti-dumping duty; (c) to submit its findings, provisional or otherwise to Central Government as to - (i) normal value, export price and the margin of dumping in relation to the article under investigation, and (ii) the injury or threat of injury to an industry established in India or material retardation to the establishment of an industry in India consequent upon the import of such article from the specified countries. (d) to recommend to the Central Government - (i)&....
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.... 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. 3. Rule 6 details the principles governing investigations. Under Rule 6(1) the designated authority shall, after it has decided to initiate an investigation to determine the existence, degree of effect of any alleged dumping of any article, issue a public notice notifying its decision, containing adequate information on various parameters me....
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....stic industry affected, at whose instance the investigation was initiated; (b) it is satisfied in the course of an investigation, that there is not sufficient evidence of dumping or, where applicable, injury to justify the continuation of the investigation; (c) it determines that the margin of dumping is less than two per cent of the export price; (d) it determines that the volume of the dumped imports, actual or potential, from a particular country accounts for less than three per cent of the imports of the like product, unless, the countries which individually account for less than three per cent of the imports of the like product, collectively account for more than seven per cent of the import of the like product; or (e) it determines that the injury where applicable, is negligible.' 4. The final findings are to be rendered by the designated authority in terms of Rule 17 leading to levy of duty based thereon, if warranted, by the Central Government under Rule 18. It may be noted that under Rule 17, the designated authority is required within one year from the date ....
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.... in transactions under consideration, and (ii) such sales are at prices which do not provide for the recovery of all costs within a reasonable period of time. The said prices will be considered to provide for recovery of costs within a reasonable period of time if they are above weighted average per unit costs for the period of investigation, even though they might have been below per unit costs at the time of sale.' 6. Annexure-II deals with 'Principles for determination of Injury', while Annexure III deals with 'Principles for determination of Non-injurious Price'. 7. These, broadly, are the parameters of the statutory scheme obtaining under the Rules of 1995. 8. The grievance of Andhra Pradesh Petrochemicals Limited, the petitioner company, is with regard to the Final Findings dated 28-11-2017 recorded by the Designated Authority, Directorate General of Anti-Dumping and Allied Duties, Ministry of Commerce and Industry, Department of Commerce, Government of India, terminating the investigation undertaken by him under the Rules of 1995. A direction is sought to set aside the said findings and to direct the said designated authority to r....
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....nto India were not casual exports but were made with the intention of grabbing the Indian market. Such exports into India from Saudi Arabia were undercutting and depressing the prices of the domestic industry to a significant extent, according to it, and performance of the domestic industry during the period, January to March, 2016, was adverse in terms of profits and returns on investments. The following parameters, per the petitioner company, demonstrated the causal link between the said exports and the injury caused. • The dumped imports from the subject country entered the Indian market in the period Jan.-Mar., 2016 (last 3 months of the POI) in such significant volumes that improvement in volume parameters seen in the performance of the domestic industry in the first 9 months of the POI (Apr.-Dec., 2015), was completely wiped off. • There was significant difference between the prices offered by the domestic industry and the foreign producer. Thus, the domestic industry was unable to raise the prices above the costs as a result of dumping of the product in the country. • Even when the domestic industry offered sub-optimal prices, it was lo....
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....rity does not consider it appropriate to recommend levy of Anti-Dumping Duty on the subject goods from Saudi Arabia and terminated the investigation under Rule 14(b) of AD Rules.' 12. The petitioner company raised the following grounds in relation to these impugned final findings : (1) Having examined the petition and found sufficient prima facie evidence of dumping of the subject goods, causing injury to the domestic industry and a causal link between the dumping and the injury, it was incorrect on the part of the designated authority to hold that as the imports from Saudi Arabia occurred only in the last three months of the investigation, it was not sufficient to evaluate the injury to the domestic market. (2) The designated authority was not justified in fixing the period of investigation when the imports were only in the last three months of such period and it could have sought extension of the investigation period either at the initial stage or subsequently, if it found that the three months period was not sufficient. (3) There is no mandate in the rules that imports must be during the ent....
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....was Rs. 36.24 ps. per kilogram, which is the lowest amongst all the importing countries and significantly lower than the domestic industry. The petitioner company would also assail the finding of the designated authority that the investigation was only for examining the material injury and not for evaluating threat of injury or material retardation to domestic industry and that a reasonable duration of period is warranted for capturing the price of volume trend from Saudi Arabia so as to analyze the impact of factors other than dumped imports to exclusively establish a causal link between dumping and consequential injury. The petitioner company would point out that in terms of Rule 4(1)(c) of the Rules of 1995, the designated authority is required to submit its findings as to the injury or threat of injury to an industry established in India or material retardation to the establishment of an industry in India consequent upon the import of such article from the specified countries and therefore, the designated authority failed to live up to the statutory mandate. Lastly, the petitioner company contended that its own performance and that of the domestic industry improved slightly dur....
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....Rule 14(b) of the Rules of 1995 incorrectly as it has to be read with the opening paragraphs of Annexure II to the Rules to appreciate the full import of the underlying scheme of the provision. According to him, a conjoint reading of the same would require the designated authority to consider the following : (1) The volume and price effect of dumped imports; (2) The consequent impact of these imports on domestic producers of such products; and (3) Causal link between dumped imports and injury. 15. He would further assert that mere calculation of dumping margin and injury margin in the impugned final findings did not establish that there was a causal link between dumping and injury. A clear causal link between dumped imports and material injury suffered by the domestic industry had to be established and there was a clear lack of such causal link in this case. He conceded that the investigation conducted by the designated authority was only for determination of material injury and not for evaluating threat of material injury or material retardation to the domestic industry. He contended that the ....
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....perating foreign producers in Saudi Arabia, being in sufficient volumes when compared with exports to India. The normal value was accordingly determined on the basis of cost of production, selling and general costs as verified, including a reasonable profit margin. As regards the export price for non-cooperating producers and exporters from Saudi Arabia, the normal value was determined at ex-factory level on the basis of best available information by referencing the highest normal value amongst the co-operating producers/exporters as depicted in the dumping margin table set out in page 23 of the final findings. The export prices for the two co-operating producers from Saudi Arabia were determined on the strength of weighted average export price at ex-factory level for the subject goods. The export price for the other producers/exporters from Saudi Arabia was determined on the basis of best available information by referencing the least ex-factory export price amongst the co-operating producers/exporters as depicted in the said dumping margin table. The dumping margin for M/s. Sadara Chemical Company, a co-operating producer from Saudi Arabia, was determined at 85-95% while the dump....
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.... from Saudi Arabia had entered India in significant volume in the last three months of the period of investigation, both in absolute terms and in relation to production and consumption in India. He also noted that these dumped imports were undercutting the prices of the domestic industry in the market. He further noted that dumped imports from Saudi Arabia as well as other countries had adversely impacted the performance of the domestic industry in respect of production, domestic sales, capacity utilization, inventories, market share, profits, cash profits and returns on investment. He noted that performance of the domestic industry had improved when investigations for imposition of anti-dumping duty on other sources were still under process in the first nine months of the period of investigation but the anti-dumping measures were imposed post period of investigation. Performance in respect of the parameters of sales, production and capacity utilization deteriorated in the last quarter of the period of investigation, i.e., January to March, 2016, as fresh imports from Saudi Arabia started. During the first nine months of investigation, the designated authority found that the domest....
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....uary - March, 2016 were the uncorrected prices from 5 countries viz. EU, Malaysia, Singapore, South Africa and the USA which got corrected to a fair level in April, 2016 after levy of AD measures. The prices in January - March, 2016 were therefore not set by producers/exporters from Saudi Arabia but given to them. The export price pattern of exports from Saudi Arabia in a situation where other prevailing prices in India were restored to a fair level can only be evaluated if a larger period beyond Pol was available to consider export pattern/prices from Saudi Arabia. The POI under present investigation therefore constrains a fair and objective assessment of causality between the exports by Saudi Arabia to India and consequential injury to Domestic Industry during the considered POI. (v) Since the investigation is for examining material injury and not for evaluating threat of injury or material retardation to Domestic Industry, a reasonable duration of period is warranted to capture the price and volume trend from Saudi Arabia and to analyse impact of factors other than dumped imports to exclusively establish a causal link between dumping and consequential ....
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....the designated authority shall determine the injury to domestic industry, the threat of injury to domestic injury, the material retardation to establishment of domestic industry and a causal link between the dumped imports and injury, taking into account all relevant factors. The refusal by the designated authority in the case on hand to look into any possible threat of injury or material retardation to the establishment of any industry in India therefore falls short of the statutory mandate. That apart, the specific conclusion of the designated authority was that the investigation had to be terminated in accordance with Rule 14(b) of the Rules of 1995. Rule 14(b) reads as under : '14. Termination of investigation. - The designated authority shall, by issue of a public notice, terminate an investigation immediately if - (a) ......... (b) It is satisfied in the course of an investigation, that there is not sufficient evidence of dumping or, where applicable, injury to justify the continuation of the investigation; (c) .......... (d) .......... (e) &....
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.... did not deem it appropriate to seek such extension. 26. Though the Learned Assistant Solicitor General for India appearing for the respondents would contend that Annexure-I to the Rules of 1995 would indicate that at least six months sales need to be taken into account, we are of the opinion that the argument is misconceived. Annexure-I relates to determination of normal value, export price and margin of dumping and in respect of all these three aspects, the designated authority had no difficulty in determining the normal value, export particulars and margin of dumping in relation to exporters/producers from Saudi Arabia. Further, Clause (2) in Annexure-I speaks of the period of six months in the context of sales made by such exporters/producers of the like product in their domestic market or to a third country for the purpose of determining the normal value and no more. This clause therefore does not indicate any requirement of the dumping being in excess of three months during the period of investigation, as wrongly assumed by the designated authority in its final conclusion. There is no mention of any length of duration being required in the context of the Rules of 1995....