TaxTMI 
TaxTMI 
2020 (2) TMI 642
X X X X Extracts X X X X
X X X X Extracts X X X X
....ppellant filed an application / petition dated 17 March 2016 before the Designated Authority under the Customs Tariff Act 1975, (hereinafter referred as the Act) and Customs Tariff (Identification, Assessment and Collection of Anti-Dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995 (referred as Anti-Dumping Rules hereinafter) praying for initiation of anti-dumping investigation concerning imports of "non woven fabric made of polypropylene of GSM 25 or less" originating in or exported from Malaysia, Indonesia, Thailand, Saudi Arabia and China PR (referred as subject countries hereinafter). 3. On the said application / petition a notification dated 15 June 2016, published in Gazette of India, was issued for initiating the subject investigation in accordance with Rule 5 of the Anti-Dumping Rules to determine existence / degree and effect of alleged dumping of the subject goods, originating in or exported from the subject countries and to recommend the amount of anti-dumping duty which, if levied, would be adequate to remove the alleged injury to the domestic market. Keeping in view the history of production by domestic industries, the period of investigation....
X X X X Extracts X X X X
X X X X Extracts X X X X
....h (Nantong) Company Limited, China and Asahi Kasei Spunbound (Thailand) Co. Ltd. However, in some cases though the dumping margin was positive, the injury margin was negative. The Designated Authority also corrected the errors said to have inadvertently occurred in the calculation of dumping and injury margin in some cases. 7. It is thereafter that the appellant filed a writ petition bearing No. 8202/17 before the High Court of Delhi. However, the said writ petition was dismissed on 20 September 2018 holding that the writ petitioner (the appellant) had an efficacious alternate remedy to challenge the impugned order under section 9C of the Customs Tariff Act before the Appellate Tribunal and so liberty was given to file an appeal under Section 9C before this Tribunal. It was also observed that Appellate Tribunal will give due consideration to the time taken by the petitioner before the High Court. 8. Consequent thereto, the present appeal was filed mainly on the ground that the Designated Authority recorded completely positive disclosure statement stating that margin of dumping was more than de minimus in case of most of the exporters but still issued a negative final finding in a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....te increase in production and sales, the losses suffered by the domestic industry have increased. iv. The dumping margin is quite significantly high, and with such high magnitude of dumping margin, the imports are causing material injury to the domestic industry. v. There is a finding of material injury to the domestic industry. vi. The Authority found that there are no factors, other than the imports causing injury. 11. It is impressed upon that when the final findings dated 2 September 2017 were issued they were altered, without justification. The major alteration as impressed upon are as follows: i. The positive dumping margins in the disclosure are converted to de minimus dumping in the final findings, consequent to a correction of an alleged inadvertent error. ii. The positive injury margins underwent a dramatic change, on account of an inadvertent error. iii. In the disclosure statement, the Authority evaluated the injury parameters, on the basis of data for the POI (9 months) and the Post POI data (12 months), and came to a conclusion that there is material injury to the domestic injury. In the final findings, however, the Authority concluded that the period of ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s submitted that no specific teething problem has been pointed out by the Designated Authority in its final finding. The contention that there is no causal link is also alleged to be faulty. It is submitted that the causal link analysis is carried out by first excluding all other factors than the dumped imports which may be causing injury to the domestic industry. If after excluding the effect of all such other factors, the inescapable conclusion is that the injury is a result of dumped imports, the Authority would be justified in imposing Anti Dumping Duties. Learned counsel has relied upon Article 3.5 of WTO Appellate Body Report i.e. Anti Dumping Agreement. 14. Learned Counsel for applicant also submitted that the Designated Authority has failed to indicate the methodology for determination of the dumping margins, nor even for the residual category i.e. non co-operative exporters and producers. It is submitted that the methodology to be followed by the Authority for making its determination can never be confidential as it affords an opportunity to the effected parties to enable themselves to offer their comments. The non disclosure thereof is, therefore, contended to be in viol....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... benchmark for an evaluation about the performance of domestic industry to either have improved or deteriorated during the period of investigation. It was in the knowledge of the Designated Authority since beginning that the appellant is a new establishment for which there can be no data for past performance available. During the course of investigation, domestic industry information for further period of two months was also furnished. Thus the performance of appellant for a total period of 21 months i.e. 9 months of POI and 12 months post POI was available for being examined by the Designated Authority. It is the position of Authority itself in the final findings that in the case of nascent industries, the Authority is supposed to consider such shorter period for which the domestic industries existed. Yet, the final finding concluded by holding that the period of data collection is too short to come to a definitive conclusion towards injury suffered by the domestic industry. Learned Counsel has placed reliance upon the decision of this Tribunal in the case of Trinseo Euro GmbH vs. Union of India reported in 2019 (366) ELT 1065 (Tri-Del), wherein it was held that material injury is....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... problems of the appellant, being a new manufacturer. With regard to the main grievance of the domestic industry about contradictions in the final findings and what was disclosed in the disclosure statement, it has been submitted by the learned counsel that the facts at the stage of final findings pointing dumping margin, injury and a causal link to injury were due to the methodology of taking highest export price and the lowest normal value at that stage. However, at the stage of disclosure statement, the error in the said methodology was detected that Product Control Number (hereinafter called as PCN) wise analysis was not carried out at the earlier stage. It, being an inadvertent error, the same was rectified at the stage of final findings by making a PCN to PCN comparison. It is however, acknowledged that this change of methodology was not disclosed to the domestic industry. It has also been acknowledged that the final findings are silent about adopting the PCN to PCN methodology comparison. However, it is impressed upon that since the methodology adopted at the stage of disclosure statement was merely an inadvertent error, no prejudice has been caused to the domestic industry ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n co-operative exporters are selling in their home market or in India and therefore, the analysis has to be done for the product as a whole and not for the PCN. It is alleged that the methodology adopted is therefore inconsistent with the established practice of the Authority. The Authority otherwise also did not disclose as to whether the consistent methodology of adoption of highest normal value and lowest export price was followed in the final findings. The decision of Supreme Court in Union of India vs. Meghmani Organics Ltd. reported in 2016 (340) ELT 449 (SC) has been relied upon wherein it was held that "when two competing public interest are involved, one is to supply all relevant information to the parties concerned except for the confidential information. It was clarified that the proper course of action would be to leave in favour of public action, that is least respective of individual rights." 24. With respect to respondent no. 3, it is submitted that though a representation was filed by respondent no. 3, but the same was rejected with a finding that the documents provided by respondent no. 3 have not disclosed complete information. Infact, it was found that there was....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ia, Thailand, Saudi Arabia and China PR. iii. The evidence indicates prima facie that the subject goods are being dumped into India. iv. That there is prima facie evidence of dumping, injury and causal link between the dumping and injury to the domestic industry. v. The period of investigation was fixed from 1July 2015 to 31 March 2016. 27. Vide office memorandum dated 6.6.2017 time limit for completion of investigation upto 14.9.2016 was extended. Opportunity of public hearing thereafter was granted to interested parties on 10 May 2017. It is thereafter that the disclosure statement as required under Rule 16 of Anti-Dumping Rules was issued on 2.8.2017. A perusal of the said disclosure statement shows that the Designated Authority noted the following essential facts: i. Non injurious Price was fixed in terms of Annexure III to the Anti-Dumping Rules. ii. The injury analysis has been done on the basis of quarter to quarter comparison of actual performance and projected estimates / targets. iii. The volume of imports from subject countries is very significant in absolute terms as well as in relation to total imports and the overall demand in the country. The imports hav....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... The dumping margin becomes de minimis for most of the exporters. ii. The performance of the domestic industry could have been impacted by the start up operations. iii. The imports have increased because the domestic industry started production only in July 2015. iv. Nine months period is too small a period to judge the trend. v. The domestic industry is suffering losses, but it could be due to teething problems and not necessarily due to the dumped imports. vi. No duty is recommended as there is no causal link between the dumped imports and material injury to the dumped imports. 29. A comparison of the findings in the disclosure statement and the final findings reflects that: i. High magnitude of dumping margin as reflected in the disclosure statement was reduced to de minimis for most of the exporters at the stage of final findings. ii. The Designated Authority outrightly ignored the disclosure statement regarding positive under selling. iii. It ignored the disclosure statement that sale of domestic industry was still materially below the total demand. iv. The Designated Authority held that negative profitability, negative cash flow and negative return on inves....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e elements shall form the basis of the decision under Rule 16 of the Anti-Dumping Rules. These "essential facts" are required to be disclosed to the domestic industry / interested parties. The word used in the Rule is "essential facts under consideration", rather than "essential facts that should reasonably be considered". Thus, the sole object of Rule 16 as well as of said article 6.9 is to allow parties to defend their interests. To render these provisions to be meaningful, the actual facts under consideration are the relevant facts, which facts have to be disclosed so as to afford an opportunity to the concerned parties to challenge omissions or use of incorrect facts, if any. 33. The meaning of word "fact" in various dictionaries is truth, reality and a thing known for certain to have called or to be true and a thing assumed or alleged as a basis for inference and events or circumstances as distinct from their legal interpretations. Thus, the purpose of disclosure of essential facts under Rule 16, in our opinion, is to provide to the interested parties, the necessary information so as to enable them to comment on the completeness and correctness of the facts being considered b....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e statement. 36. The Designated Authority, in its final findings, has also recorded that there was an inadvertent error in the disclosure statement with respect to the calculation of dumping and injury margin in some cases, which were corrected, but there is no explanation as to what the said inadvertent error was and how it was corrected. However, it has been explained in the submissions made during the course of hearing that in the disclosure statement PCN wise analysis was not carried out and the final findings are based on a PCN to PCN comparison and this inadvertent mistake that crept in the disclosure statement was rectified. The Supreme Court has emphasised that the order cannot be defended on grounds not mentioned in the order. It would, therefore, not be appropriate to consider this explanation. This apart, there is no material on the record, to indicate as to which PCN were adopted by the Designated Authority for making a comparative study. Otherwise also, PCN wise analysis would be applicable only in case of cooperative exporters and not for the residual category. Above all, a change of methodology was mandatorily to be disclosed to the interested parties including the ....