2019 (7) TMI 348
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....subject country") and (b) PX-13 (6PPD) (for short "subject goods") originating in or exported from China PR and Korea RP (for short "subject country") by way of communication/order dated 24.12.2018 with following prayers:- "27. ....... a) This Hon'ble Court be pleased to issue a writ of certiorari or a writ in the nature of certiorari so as to quash and set aside Impugned order dated December 24, 2018 issued by the Respondent no.2 and annexed at Annexure-A hereo; and b) This Hon'ble Court be pleased to issue a writ of mandamus or a writ in the nature of mandamus so as to direct the Respondent No.2 to initiate Sunset Review investigation under the provisions of Section 9A(5) of the Act read with Rule 23 (1B) of the Rules and further direct the Respondent No.3 to issue an appropriate notification in terms of 2nd proviso to Section 9A(5) of the Act for extension/continuation of the Duty imposed by way of Customs Notification no.35/2014-Customs dated 24.07.2014 for a period not exceeding 1 year pending the outcome of Sunset Review before the expiry of the period of original notification, that is, on or before July 23, 2019; c) Pending hearing of the ....
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....r 2008, the petitioner filed a petition before respondent no.2 for investigation and recommendation of anti-dumping duties on the aforesaid goods and on the basis of the said application, the respondent no.2 issued preliminary final finding on 28.2.2008 recommending provisional antidumping duty on imports of subject goods from subject countries. That on 5.5.2008, Ministry of Finance also issued Notification No.61/2008-Cus imposing provisional anti-dumping duty. Thereafter, respondent no.2 recommended imposition of definitive anti-dumping duty vide final finding and ultimately respondent no.3 issued customs Notification No.133/2008-Cus implementing the recommendation of respondent no.2. 2.3 It is also contended that on 5.8.2011, respondent no.2 conducted mid-term investigation pursuant to an application filed by the petitioner and recommended the enhancement of definitive anti-dumping duty in the mid-term review by way of final finding. That on 20.9.2011, the Central Government issued customs notification No.92/2011 imposing anti-dumping duty. It is also contended that thereafter on 26.12.2012/1.1.2013, respondent no.2 initiated sunset review and respondent no.3 issued customs no....
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.... practice injury to the domestic industry is likely to recur in the event of cessation of duty: i. The information provided shows that the dumping has continued despite the imposition of anti-dumping duty. The dumping is likely to cause injury to the domestic industry, in the event of cessation of anti-dumping duty. ii. Intensified dumping and consequent injury to the domestic industry is likely because Indian market is highly attractive to the foreign producers and exporters. iii. The subject producers hold huge surplus capacities and that the estimated Indian demand is a fraction of the available spare capacities of the subject producers. iv. Further capacity enhancements in China over the period further shows likelihood of injury. v. The subject exporters and producers are highly export oriented. vi. the imports from the subject countries have remained substantial over the years. The volumes were also in the same range throughout even in the presence of anti-dumping duties. vii. India is one of the leading consumption market and ranks 3rd for rubber consumption after China and Unites States. viii. India rank....
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....oduction by the domestic industry, (iii) inventories of exporters, (iv) worldwide over-capacity, (v) export orientation of the exporters and (vi) price attractiveness of the domestic market. xviii. Exports of product under consideration from China PR and Korea RP to third countries are also at dumped prices. The prices prevailing in the Indian market are quite attractive to the producers in subject countries, as is established by (a) current export price to India, and (b) current export price to rest of the world. xix. Significant investments in future production by the domestic industry in view of fair market condition. 2.9 On 24.12.2018, respondent no.2 issued the impugned letter, in a perfunctory manner and without appreciating the relevant material on record, deciding not to initiate the sunset review on the grounds that:- "The expression "cause of action" has acquired a judicial-settled meaning. In the restricted sense cause of action means the ircumstances forming the infraction of theIn view of aforementioned, the Authority notes that the information on record shows that the petitioner industry is neither suffering any injury nor there is any li....
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....reme Court in this case has held that the territorial jurisdiction shall lie with the courts where the cause of action, in part of full, has arisen. This case also rules that mere existence of a head office in a particular place shall not ipso facto confer jurisdiction. The ratio decided by the Hon'ble Supreme Court in Adani's case it is submitted that part cause of action is an'sen at Gujarat as the Petitioner No.1 is having manufacturing operations at Gujarat. The part cause of action is available to the petitioners as the factory of the petitioner No.1 is situated at Gujarat. 3.5 The concept of cause of action has been explained in the case of Rajasthan High Court Advocate Association v. Union of India [2001 (2) SCC 294], wherein the Hon'ble Supreme Court has held as under: "The expression "cause of action" has acquired a judicial-settled meaning. In the restricted sense cause of action means the circumstances forming the infraction of the right or the immediate occasion for the action. In the wider sense, it means the necessary conditions for the maintenance of the suit. including not only the infraction of the right, but the infraction coupled with the righ....
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....red effect, the condition of the domestic industry is expected to have improved during the duty period. Therefore, in a Sunset Review investigation the Designated Authority needs to address the question as to whether the domestic industry is likely to be materially injured again, if duties are lifted which the Respondent No.2 has not done while considering the present petition. 3.12 In paragraph 4 (a) & (e) of the impugned order, Respondent no. 2 held that "duties imposed have played a positive impact on the performance of the Domestic Industry. The domestic industry is earning reasonable return. the demand of PUC over the injury period and P01 have increased and the sales of domestic industry has also increased. Moreover, the capacity utilization also shows a positive growth and this shows that there would not be injury to petitioner in the event of revocation of duties." Thus, the rejection of the petition is based on absence of current injury. However, Petitioner No.1 itself did not claim current injury and has in fact claimed likelihood of recurrence of injury. The Respondent no. 2 has not appreciated the mandate of sunset review and rejected the application on the assump....
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....ty in exports is worse than profitability in domestic market (the fact has even been recorded in Order dated 24th Dec., 2018). If the export profitability is adverse as compared to domestic, there is no reason why the Petitioner No. 1 will prefer exports and earn lower profits, rather than selling in the domestic market. The fact is that Petitioner No. l is forced to export in view of lack of demand for the products in the country due to dumped imports. In any case, the issue deserved initiation of investigations and not rejection of petition. 3.17 The Respondent No.2 has failed to appreciate the material on substantive application on likelihood test and its parameters, and has not considered essential facts such as the (a) surplus capacities in exporting countries, (b) inventories in exporting Countries, which may be diverted to India at dumped prices, (c) volumes of export by exporting countries to other countries, (d) price attractiveness of the Indian market. 3.18 While issuing the impugned order Respondent No.2 has failed to consider the material submitted by the Petitioner No. l which clearly demonstrated that there is a likelihood of dumping and injury in event of cess....
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....ubject countries are likely to undercut the prices of the Domestic Industry by forcing the Domestic Industry to reduce its prices further in the event of cessation of anti-dumping duty. viii Petitioner No.1 submitted the material showing that India commandsvii Petitioner No.1 has submitted that recently USA has imposed 15% duty sanctions its well in addition to the 10% customs duty on the subject goods due to which Chinese producers are likely to lose significant business market in the USA. Hence, there is strong likelihood of dumping of subject goods from subject countries. viii Petitioner No.1 submitted the material showing that India commands one of the 10 top positions in exports of subject rubber chemicals in subject countries. The current level of demand in India and the future likely imports show that India is one of the major buyers of the subject goods. ix. Petitioner No.1 submitted the material showing that Chinese producers are in the process of expanding their capacity, notwithstanding the existing surpluses with them and weakening demand in China. One of the producers of the subject goods in China i.e. Shandong Yanggu Huatai Chemical Co., Ltd....
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....ge process; as laid down in Kesoram (supra) is accepted, it completely supports the contention of the Petitioner No. 1 that the first stage in only for initiation of review based on duly substantiated application. 3.20 Petitioners submit that Judgment of this Hon'ble Court in the matter of Jindal Saw Limited v/s Directorate General of Anti-Dumping & Allied Duties reported in 2019 (365) ELT 81 (Guj) is directly applicable to the present case and would therefore be a binding precedent. In Jindal Saw (Supra), this Hon'ble Court held as under: "11. Examination of the impugned order in the background of these significant mandate as required under the Rules would suggest the absence of following factors: Nothing is evident to suggest that the designated authority called for information by supplying such copy of the application to known exporters or to the concerned trade associations, foreign producers, calling for information factors on which the allegations of injury were made by the Review Applicants. Nothing is evident to suggest that there was any determination of normal value. export price and margin of dumping and its assessment in accordance with the....
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.... 1 to issue an appropriate notification in terms of 2nd proviso to Section 9A(5) of the Act for extension/continuation of the Duty imposed by way of Customs Notification dated 18.04.2013 for a period not exceeding 1 year pending the outcome of Sunset Review before the expiry of the period of original notification, that is, on or before 17.04.2018." Respondent No.2 cannot be permitted to justify the impugned order, on the basis of reasons not given the impugned order. 3.22 Respondent no. 2 cannot be permitted to justify or improvise the Impugned Order, on the basis of reasons not stated therein. In this context, reliance is placed on the decision of the Apex Court in the case of Mohinder Singh Gill & Anr. Vs. The Chief Election Commissioner, New Delhi & Ors. (1978) 1 Supreme Court Cases 405, wherein it has been held as under: ".....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....
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....so contended that in absence of specific averments regarding jurisdiction of this Court and considering the facts that the application was made in Bombay and address has been given of Delhi and the order has been passed by the respondent at Delhi, no cause of action has arisen within the jurisdiction of this High Court. He has also contended that probability of manufacturing or manufacturing are different things. He has also submitted that this is a fiscal policy matter and, therefore, the Court may not entertain present petition. According to him, only the pleadings and petition are required to be looked into for finding out the cause of action and in absence of a specific pleading, it cannot be presumed that the cause of action or part thereof arose within the territorial jurisdiction of this High Court. The main plank of argument is that this Court has no jurisdiction to entertain present petition and there is alternative remedy available to the petitioner to approach CESTAT. While supporting the finding of Designated Authority and relying upon following decisions, he has prayed to dismiss present petition. (i) Bombay High Court in the case of Sachee Agro Trading Pvt. L....
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....e Apex Court has held in the case of Navinchandra N. Majithia that while considering as to whether the Court has cause of action or not, only pleadings in the petition are required to be looked into. Unfortunately, there are no pleadings in the present petition to show as to how this Court is of territorial jurisdiction and as to how the cause of action or a part of cause of action arose within the territorial jurisdiction of this Court. In spite of that, we have permitted Shri Gordey, learned senior Counsel to take us to averments made in the petition so as to examine as to whether any part of cause of action arises within the territorial jurisdiction of this Court." (ii) In the case of Alchemist Ltd. And Another v. State Bank of Sikkim and Others, reported in (2007) 11 SCC 335, Supreme Court observed as under:- "20. It may be stated that the expression 'cause of action' has neither been defined in the Constitution nor in the Code of Civil Procedure, 1908. It may, however, be described as a bundle of essential facts necessary for the plaintiff to prove before he can succeed. Failure to prove such facts would give the defendant a right to judgment in his f....
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.... decide matters that are litigated before it or to take cognizance of matters presented in a formal way for its decisions. Jurisdiction of a court may be classified into various categories; (i) territorial jurisdiction; (ii) pecuniary jurisdiction; (iii) jurisdiction as to subject matter etc. Every court has its own local or territorial limits beyond which it cannot exercise its jurisdiction. ....... 31. Viewed from the angle, the expression 'cause of action' means the bundle of facts which the petitioner must prove, if traversed, to entitle him to a judgment in his favour by the Court. Every fact, which, if traversed, would be necessary for the petitioner to prove in order to support his right to a judgment of the Court. It is a bundle of facts which taken with the law applicable to them gives the petitioner a right to relief against the respondents. In legal parlance the expression 'cause of action' is generally understood to mean a situation or state of facts that entitles a party to maintain an action in a Court or a tribunal; a group of operative facts giving rise to one or more bases for suing; a factual situation that entitles one person to obtain a ....
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....sdiction, notwithstanding that the seat of the Government or authority or the residence of the person against whom the direction, order or writ is issued is not within the said territories. The expression "cause of action" means that bundle of facts which the petitioner must prove, if traversed, to entitle him to a judgment in his favour by the Court. Therefore, in determining the objection of lack of territorial jurisdiction the court must take all the facts pleaded in support of the cause of action into consideration albeit without embarking upon an enquiry as to the correctness or otherwise of the said facts. Thus the question of territorial jurisdiction must be decided on the facts pleaded in the petition, the truth or otherwise of the averments made in the petition being immaterial." 17. It is seen from the above that in order to confer jurisdiction on a High Court to entertain a writ petition or a special civil application as in this case, the High Court must be satisfied from the entire facts pleaded in support of the cause of action that those facts do constitute a cause so as to empower the court to decide a dispute which has, at least in-part, arisen within its j....
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....s (ADD) and revived the anti-dumping duty with retrospective effect and extended it upto 4th May 2014. (xi) On 29.4.2014, after following due process, respondent no.2 issued the final finding recommending continuation of anti-dumping duty on imports of the subject goods. (xii) On 24.7.2014, respondent no.3 implemented Final Findings of respondent no.2 and issued Customs Notification No.35/2014 imposing anti-dumping duty on the subject goods for five years. (xiii) On 26.7.2014, Forech India Limited and M/s.Kumho Petro Chemical Co. Ltd. filed Writ Petition (C) No.4810/2014 and Writ Petition No.4886/2014 respectively challenging the aforesaid Customs Notification No.35/2014 imposing anti-dumping duty on the subject goods before the High Court. (xiv) By common judgment dated 31.5.2018, Delhi High Court allowed the petition and set aside the Custom Notification No.35/2014 dated 24.7.2014, by which antidumping duty is imposed on the subject goods for five years. (xv) Against above order, the petitioners filed Special Leave Petitions on 18.6.2018. (xvi) On 9.7.2018, the Supreme Court issued notice. In view of the proceedings before the....
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.... 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 article exported from the exporting country or territory and in cases where there is no export price or where the export price is unreliable because of association or a compensatory arrangement between the exporter and the importer or a third party, the export price may be constructed on the basis of the price at which the imported articles are first resold to an independent buyer or if the article is not resold to an independent buyer, or not resold in the condition as imported, on such reasonable basis as may be determined in accordance with the rules made under sub-section (6); ....
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....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 antidumping 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 anti-dumping duty which has been collected as is in excess of the antidumping duty as so reduced. (2A) Nothwithstanding anything contained in sub-section (1) and sub-section (2), a notification issued under subsection (1) or any anti-dumping duty imposed under sub-section (2), shall not apply to articles imported by a hundred per cent, export-oriented undertaking unless, - (I) specifically made applicable in such notifications or such impositions, as the case may be; or (ii) the article imported is either cleared as such into the domestic tariff area or used in the manufacture of any goods that are cleared into the domestic tariff area, and in such cases anti-dumping duty shall be levied on that portion of the article so cleared or so used as was le....
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.... as referred to in sub-section (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 antidumping 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 antidumping duty. The margin of dumping in relation to an article, exported by an exporter or producer, under inquiry under subsection (6) shall be determined on the basis of records concerning normal value and export price maintained, and information provided, by such exporter or producer : (6A) Provided that where an exporter or producer fails to provide such records or information, the margin of dumping for such exporter or producer shall be determined on the basis of facts available. (7)....
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.... - (a) it determines, on the basis of an examination of the degree of support for, or opposition to the application expressed by domestic producers of the like product, that the application has been made by or on behalf of the domestic industry : Provided that no investigation shall be initiated if domestic producers expressly supporting the application account for less than twenty five per cent of the total production of the like article by the domestic industry, and (b) it examines the accuracy and adequacy of the evidence provided in the application and satisfies itself 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. 3 Substituted vide Customs Notification No. 44/99- Cus(NT) dated 15.7.1999 (Annexure - II) 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 tha....
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.... by it, from the exporters, foreign producers and other interested parties and such information shall be furnished by such persons in writing within thirty days from the date of receipt of the notice or within such extended period as the designated authority may allow on sufficient cause being shown. Explanation : For the purpose of this sub-rule, the notice calling for information and other documents shall be deemed to have been received one week from the date on which it was sent by the designated authority or transmitted to the appropriate diplomatic representative of the exporting country. (5) The designated authority shall also provide opportunity to the industrial users of the article under investigation, and to representative consumer organizations 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 designate....
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....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 dumping and injury and shall refer to the matters of fact and law which have led to arguments being accepted or rejected. It will also contain:- (i) the names of the suppliers, or when this is impracticable, the supplying countries involved; (ii) a description of the article 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. 2. The designated authority shall issue a public notice recording its preliminary findings. RULE 14.....
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....nless the designated authority comes 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 to 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." 9. The principles for determination of injury has been provided in Annexure-II under Rule 11 (2). The relevant portion thereof is abstracted herein below:- "(iv) The examination of the impact of the dumped imports to the domestic industry concerned, shall include an evaluation of all relevant economic factors and indices having a bearing on the State of the industry, including natural and potential decline in sales, profits, output, market share, productivity, return o....
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....n; (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." 9.1 At the same time, principles for determination of noninjurious prices under Rule 17 (1) are required to be taken note of, which are abstracted herein below:- "(4) The following elements of cost of production are required to be examined for working out the noninjurious price, namely:- (i) The best utilization of raw materials by the constituents of domestic industry, over the past three years period and the period of investigation, and at period of investigation rates may be considered to nullity injury, if any, caused to the domestic industry by inefficient utilization of raw materials. (iv) The Propriety of all....
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....- PVI in the China PR is only 75% of the total capacities in China PR. - MBT in the China PR is only 93% of the total capacities in China PR. - CBS in the China PR is only 70% of the total capacities in China PR. TMT in the China PR is only 58% of the total capacities in China PR." 12. Regarding subject country's export to third countries, while providing information in tabular form as specifically stated in para 109 as follows:- "109. It would be seen that: a. The total exports of PX-13, in terms of volume, made by China PR to the world are about 15 times of the volume exports made to India, in the POI. Further, about 5 times of the exports to the rest of the word were exported at a price lower than the price at which the product is exported to India. b. The total exports of PX-13, in terms of volume, made by Korea RP to the rest of the world are about 12 times of the volume of exports made to India, in the POI. Further, about 4 times of the exports to the rest of the word were exported at a price lower to India lower than that on which the product is exported to India. c. The total exports of TDQ and PVI, in terms ....
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....Majority of the products under consideration consumption is in tyres. Further, about 13 companies constitute about 90% of tyre production, Given large size of these companies, each of these companies are equipped with professional purchase department, who are well aware of day to day developments in the market. Typical tyre companies consider contract pricing, which are valid for three months. These contracts are placed after elaborate negotiations and counter-negotiations with various suppliers. Further, despite quarterly contracts, the purchases keep swinging their volumes depending on the additional discounts/benefits that the exporters may offer on top of the low prices mat are already offered, negotiated and settled. Such being the case, availability of such low priced subject imports in the market would definitely cause an adverse impact onto the Domestic Industry. 125. In the event of cessation of current anti-dumping duty, the domestic industry will have to either reduce the selling price by the amount of ADD or the domestic industry would lose sales volumes. In either case, domestic industry will suffer injury. 126. Further, in the event of cessation of c....
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....is also noted that the current imports are necessary to fulfill the demand and supply gap. Moreover, the current prices of imports (without antidumping) is not injuring the applicant industry and therefore, possibility of their injuring applicant industry in the event of cessation of duties is also unlikely. (c) It is also noted that there is no reason to suspect the current landed value of subject goods from subject countries. This shows that in the event anti-dumping duties are revoked goods will still come at the current landed value only. Further, the Authority has also analyzed the likely profitability situation of the petitioner industry and noted that at current levels of landed value, petitioner industry will make positive returns. This also shows that if the duties are revoked, any injury to the petitioner industry is unlikely. (d) The petitioner is unable to explain why they are exporting the subject goods despite having demand of the same in the domestic market. It is further noted that the price realization from the export market is lower than the price realized in the domestic market, except TMT. (e) The demand of PUC over the injury period a....
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.... data has been called for from exporting countries. A casual finding refusing to initiate sunset review investigation is recorded by stating that the applicant has failed to provide sufficient and satisfactory evidence in support of its prayer to initiate sunset review investigation. The order therefore fails the test of having considered the application, as required under the mandate of the Section I.e. Section 9A(5) read with the Rules thereunder." 20. It appears that the competent authority has rejected the application for sunset review based on absence of current injury. This assumption is not proper. Impact of likelihood of injury is required to be looked into by the Designated Authority. Further one of the grounds is regarding the gap of demand and supply in the country. This is also not proper. Where gap of demand and supply exists, the imports are inevitable but that is not a justification for imports coming into India at unfair and dumped prices. In view of the information made available by the petitioner to the authority, it is clearly found that there is continuous dumping, in the present case and, therefore, the demand and supply gap is not the basis for all....
TaxTMI