TaxTMI 
TaxTMI 
2019 (6) TMI 864
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....nd Collection of Anti-Dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995." The Final Findings were published in the Gazette of India - Extra Ordinary dated 19 July 2017 and the notification issued by the Ministry of Finance was published in the Gazette of India - Extra Ordinary dated 25 August 2017. 2. It transpires that the designated authority had earlier initiated an anti-dumping investigation against the import of Sodium Nitrite by a notification dated 4 November 1999. The final findings were notified by the designated authority on 3 November 2000 recommending imposition of definitive duties on imports of Sodium Nitrite which were notified by the Department of Revenue by a notification dated 19 December 2000. A sunset review was also carried out and the final finding was notified by the designated authority on 30 June 2011 recommending continued imposition of anti-dumping duty. The Central Government, thereafter, issued the notification dated 17 August 2011. A mid-term review was also conducted at the behest of the Appellant and the designated authority notified the final findings recommending change in the anti-dumping duty by notification dated 15....
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....ificantly lower than NIP determined for the domestic industry and determined the range of 'Injury Margin' to be 10 - 20%. 6. The designated authority, however, before giving its final findings informed all the interested parties of the essential facts under consideration which would form the basis for its decision. 7. In as far as the determination of the NIP is concerned, the following disclosure was made: "Price Underselling: The Authority notes that the price underselling is an important indicator of assessment of injury. Non injurious price has been worked out and compared with the landed value of the subject goods to arrive at the extent of price underselling. The non-injurious price has been determined considering the cost of production of the domestic industry for the product under consideration during the POI, in accordance with Annexure III of the anti-dumping Rules." 8. The domestic industry submitted its comments and the relevant comments on which emphasis has been laid by learned counsel for the Appellant during the course of hearing, relate to the NIP that was determined. These comments are contained in paragraphs 7, 8, 9, 10 and 11. The rele....
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....Nitro Sulphuric Acid (NSA) • Potassium Nitrate (KNA) • MAHCL c. The production equipment & plant are different for products produced in Nitrite Plnt, but the utilities, effluent treatment plant, office buildings, land, cooling towers and other facilities are common. d. DNL is capturing actual cost of Raw Material & Utilities based on the actual consumption & utilization. e. Other manufacturing expenses, Administrative Expenses & selling expenses and depreciation expenses are allocated based on the production volume of these products. f. Sodium Nitrite and Sodium Nitrate account for production volume of approx 189 MT per day in joint / co-product route, while MAHCL (Fine & Specialty Chemicals) production is only approx 4 MT per day. Other products account for production of approx 11 MT per day. From the above numbers, it can be said that more than 90% production is coming from SNI/SNA, other products are only 5-6% and MAHCL is only 1-2% of production volume. g. MAHCL is a specialized chemical which is manufactured for a particular product, for 100% export purpose and more than 95% of its quantity is sold to only ....
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....ke contract and trainee employees also, the total employee involvement in MAHCL are around 25. Secondly, in case MAHCL plant does not run, the employees can be utilized for SNI / SNA production. o. The table below shows the volume and value details for the POI period for the Nitrite Division. In terms of volume, MAHCL accounts for only 2% production and sales of the Nitrite Division. Product - POI Production Volume Sales Volume Sales Value MT % MT % Rs. Lacs % Sodium Nitrite 55,395 74.38 52,219 72.91 20,789.41 54.40 Sodium Nitrate 13,468 18.08 13,644 19.05 4,604.19 12.05 MAHCL 1,420 1.91 1,410 1.97 12,101.75 31.67 NSA / KNA 4,192 5.63 4,347 6.07 721.83 1.89 p. The maximum resources are deployed by the company for SNI / SNA production. q. Considering above facts, DNL is allocating all expenses on the basis of production quantity. r. Post filing of the petition and during the course of the investigation, no query whatsoever has been raised seeking information on appointment methodology adopted in the disclosure statement. The ....
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....unting principles provide for a number of methodologies." (emphasis supplied) 9. None of the producers / exporters / importers / other interested persons made any submissions to the disclosure statement made by the designated authority. 10. The post disclosure comments / submissions made by the domestic industry were then examined by the designated authority in paragraph 93 of the final findings and the same are reproduced below: "93. The Authority notes that post-disclosure comments / submission made by the domestic industry are mostly reiterations of earlier submissions, which have already been examined suitably and adequately and properly addressed in the disclosure statement or relevant paras of the present finding. The Authority further considers as follows with regard to fresh issues raised by the domestic industry: i) As regards the submissions of the domestic industry concerning determination of non-injurious price (NIP) the Authority notes that the detailed guidelines for computation of NIP is laid down under Annexure III of the anti-dumping Rules and the same has been adopted while determining NIP in the present investigation. ii) As re....
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....72.95 MT US$ 3 -Do- -Do- Any Country other than China China PR Any Any 72.95 MT US$ 12. The Ministry of Finance (Department of Revenue), thereafter issued a notification dated 25 August 2017 imposing anti-dumping duty as recommended by the designated authority. This notification was published in the Gazette of India - Extra Ordinary dated 25 August 2017. 13. Ms. Reena Khair, learned counsel for the Appellant, after placing the relevant provisions of the Act and the anti-dumping rules, made the following submissions: i) The Appellant had filed detailed comments to the disclosure statement in regard to the determination of NIP proposed by the designated authority, but the designated authority determined the NIP on 'turn over' basis instead of 'production quantity basis' without any discussion and without assigning any reason; ii) The incorrect determination of NIP has resulted in a lower injury margin and consequently the duty imposed is inadequate to address the injurious effect of dumping on the domestic industry. iii) The common expenses are to be apportioned in accordance with paragraph 4 (vi) of Annexure III to....
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....by the Ministry of Finance. The imposition of duty was reviewed from time to time and the second sunset review final finding recommending continued imposition of the anti-dumping duty on sodium nitrite was notified by a notification dated 17 August 2011. Before the expiry of period of five years for which the anti-dumping duty was continued, the Appellant moved an application for initiating another sunset review for extension of the anti-dumping duty on imports of sodium nitrite. Finding that there was sufficient evidence submitted by the Appellant to justify initiation of a sunset review investigation, the designated authority issued a public notice. The period of investigation for the purpose of review and investigation was April 2015 to March 2016. 18. In order to appreciate the contentions advanced by the learned counsel, it would be appropriate at this stage to refer to the relevant provisions of the Act and the Rules framed therein. 19. Section 9A of the Act deals with anti-dumping duty on dumped articles and is reproduced below: "ANTI-DUMPING DUTY ON DUMPED ARTICLES (1) Where any article is exported by an exporter or producer from any country or terri....
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....rom a country other than the country of origin and where the article has been merely transhipped through the country of export or such article is not produced in the country of export or there is no comparable price in the country of export, the normal value shall be determined with reference to its price in the country of origin." (emphasis supplied) 20. A perusal of the aforesaid section 9A of the Act indicates if any article is exported from any country to India at less than its normal value, then upon the importation of such article into India the Central Government can impose an anti-dumping duty not exceeding the margin of dumping. Margin of dumping has been defined to mean the difference between the export price and the normal value. The export price means the price of the article exported from the exporting country. Normal value has been defined to mean the comparable prices for the like article when destined for consumption in the exporting country. 21. Rule 3 of the 1995 Rules provides that 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 ....
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....ear from the date of initiation of the investigation, determine as to whether or not the article under investigation is being dumped in India and submit to the Central Government its final findings. Apart from various factors on which the final findings is to be given, the designated authority is also required to recommend the amount of duty which if levied would remove the injury to the domestic industry after considering the principles laid down in Annexure III to the 1995 Rules. For this purpose the designated authority has to determine the NIP of the like domestic product. Rule 17 is reproduced below: "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 mate....
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....to a conclusion, on a review initiated before that period on its own initiative or upon a duly substantiated request made by or on behalf of the domestic industry within a reasonable period of time prior to the expiry of that period, that the expiry of the said anti-dumping duty is likely to lead to continuation 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." 26. The main grievance of the Appellant is regarding the determination of NIP. It would, therefore, be relevant to reproduce the relevant provisions of the principles contained in Annexure III to the 1995 Rules and the relevant portions are as follows: "Principles for determination of non-injurious price: (1) The designated authority is required under sub-rule (1) of rule 17 to recommend the amount of anti-dumping duty which, if levied, would remove the injury where applicable to the domestic indu....
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....28. The Appellant contends that its plant at Nandeswari produces sodium nitrite, sodium nitrate, nitro sulphuric acid, potassium nitrate and MACHL. The production equipment and plant are different for the products produced but the utilities, effluent treatment plant, office buildings, land, cooling towers and other facilities are common. The manufacturing expenses like administrative expenses, selling expenses and depreciation expenses are based on the production volume of the products. Sodium nitrite and sodium nitrate account for production volume of approximately 189 MT per day while MAHCL production is 4 MT per day. The other products account for production of approximately 11 MT per day. It is, therefore, stated that more than 90% of production is of sodium nitrite and sodium nitrate, while that of MAHCL is only 1-2% of the production volume. It has also been stated that MAHCL is a specialised chemical which is manufactured for a particular customer for 100% export purpose and more than 95% of its quantity is sold to only one customer. The remaining 5% is sold to a second customer. It is, therefore, stated that hardly any sales activity is carried out for MAHCL since there are....
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....in the final findings arrived at by the designated authority for determining the common expenses on 'sales value'. 30. To examine the said contentions, it is necessary to examine the contents of the disclosure statement made by the designated authority in regard to the determination of NIP. These are contained in paragraph 53 of the final findings given by the designated authority. What has been mentioned in paragraph 53 is that NIP has been determined considering the cost of production of the domestic industry for the product under consideration during period of investigation in accordance with Annexure III to the anti-dumping rules. 31. The Appellant had submitted detailed comments as to why NIP has to be determined considering "production quantity", which was not only a reasonable and scientific and basis but this method had also been applied consistently by the domestic producers. The comments on the said aspect of the disclosure statement have been examined by the designated authority in paragraph 93 of the order, which has also been reproduced above. All that has been stated is that the guidelines contained in Annexure III to the anti-dumping rules have been adopted whi....
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....d reliance on the decision of the Supreme Court in Mohinder Singh Gill and Another Vs. Chief Election Commissioner, New Delhi reported in (1978) 1 SCC 405. 34. The Supreme Court in Mohinder Singh Gill observed as follows: "8. The second equally relevant matter is that when a statutory functionary makes an order based on certain grounds, its validity must be judged by the reasons so mentioned and cannot be supplemented by fresh reasons in the shape of affidavit or otherwise. Otherwise, an order bad in the beginning may, by the time it comes to court on account of a challenge, get validated by additional grounds later brought ,out. We may here draw attention to the observations of Bose J. in Gordhandas Bhanji (1) "Public orders, publicly made, in exercise of a statutory authority cannot be construed in the light of explanations subsequently given by the officer making the order of what he meant, or of what was in Ms mind, or what he intended to, do. Public orders made by public authorities are meant to have public effect and are intended to effect the actings and conduct of those to whom they are addressed and must be construed objectively with reference to the language u....
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....ourt in Reliance Industries Ltd. In connection with the determination of NIP, the Supreme Court observed that the nature of proceedings before the designated authority are quasi judicial and reasons have to be recorded by the designated in support of its findings. The observations are: "38. We are of the opinion that the nature of the proceedings before the DA are quasi-judicial, and it is well-settled that a quasi-judicial decision, or even an administrative decision which has civil consequences, must be in accordance with the principles of natural justice, and hence reasons have to be disclosed by the authority in that decision vide S.N. Mukherjee v. Union of India, [1990] 4 SCC 594. 39. We do not agree with the Tribunal that the notification of the Central Government under Section 9A is a legislative Act. In our opinion, it is clearly quasi-judicial. The proceedings before the DA is to determine the lis between the domestic industry on the one hand and the importer of foreign goods from the foreign supplier on the other. The determination of the recommendation of the DA and the Government notification on its basis is subject to an appeal before the CESTAT....
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....the case, vitiate the order itself. Such rule being applicable to the administrative authorities certainly requires that the judgment of the Court should meet with this requirement with higher degree of satisfaction. The order of an administrative authority may not provide reasons like a judgment but the order must be supported by the reasons of rationality. The distinction between passing of an order by an administrative or quasi-judicial authority has practically extinguished and both are required to pass reasoned orders. In the case of Siemens Engineering and Manufacturing Co. of India Ltd. v. Union of India and Anr. [AIR 1976 SC 1785], the Supreme Court held as under :- "6.......If courts of law are to be replaced by administrative authorities and tribunals, as indeed, in some kinds of cases, with the proliferation of Administrative Law, they may have to be so replaced, it is essential that administrative authorities and tribunals should accord fair and proper hearing to the persons sought to be affected by their orders and give sufficiently clear and explicit reasons in support of the orders made by them. Then alone administrative authorities and tribunals exercising ....
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....isions based on relevant facts. This is virtually the Life blood of judicial decision making justifying the principle that reason is the soul of justice. (i) Judicial or even quasi-judicial opinions these days can be as different as the judges and authorities who deliver them. All these decisions serve one common purpose which is to demonstrate by reason that the relevant factors have been objectively considered. This is important for sustaining the litigants' faith in the justice delivery system. (j) Insistence on reason is a requirement for both judicial accountability and transparency. (k) If a Judge or a quasi-judicial authority is not candid enough about his/her decision making process then it is impossible to know whether the person deciding is faithful to the doctrine of precedent or to principles of incrementalism. (l) Reasons in support of decisions must be cogent, clear and succinct. A pretence of reasons or 'rubber-stamp reasons' is not to be equated with a valid decision making process. (m) It cannot be doubted that transparency is the sine qua non of restraint on abuse of judicial powers. Transparency in decision makin....