TaxTMI 
TaxTMI 
2020 (8) TMI 114
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....e"[subject goods], originating in or exported from People‟s Republic of China[subject country] to India, the Government of India, in the Ministry of Finance (Department of Revenue), on an application filed by Gujarat State Fertilizers & Chemical Limited[Domestic Industry], issued a Customs Notification that was published in the Gazette of India on November 16, 2004 imposing anti-dumping duty on the subject goods for a period of five years. The anti-dumping duty so imposed was continued for a further period of five years by Customs Notification dated February 19, 2010 in the first sunset review that was initiated at the instance of the Domestic Industry. The anti-dumping duty was further continued for another period of five years by Customs Notification dated January 28, 2016 in the second sunset review initiated at the instance of the same Domestic Industry. A New Shipper Review contemplated under rule 22 of The Customs Tariff (Identification, Assessment and Collection of Anti-Dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995[the 1995 Rules] was initiated by a Notification dated January 01, 2018 at the instance of M/s Kuitun Jinjiang Chemical Indust....
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....Sunita Commercial Pvt Ltd.[the importer] in the aforesaid four appeals. 5. Anti-Dumping Appeal No. 52291 of 2019 has been filed by the producer and Anti-Dumping Appeal No. 52292 of 2019 has been filed by the exporter with identical prayers, which are as follows: "(a) Modify the Final Findings No. F No. 7/11/2017-DGAD dated 19.06.2019 rendered by Respondent No. 2 herein by incorporating individual dumping margin that ought to have been granted in Rule 22 investigation; and (b) Pass such other and further orders as this Hon‟ble Tribunal may deem fit and proper in the facts and circumstances of the case." 6. Anti-Dumping Appeal No. 50103 of 2020 has been filed by the Domestic Industry with the following prayers: "(a) Set aside the final findings and consequent notification no. 34/2019-Customs (ADD) dated 06.09.2019 qua the Kuitun Jinjiang Chemical Industry Co. Ltd. and Foshan Kaisino Building material Co. Ltd by holding that they are not entitled for individual dumping margin and relegate them to residual duty. (b) Any other relief as may be considered appropriate by this Hon‟ble Tribunal in the facts and circumstances of the present case." 7. Anti-Dum....
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....mine People‟s Republic of China Any country other than China PR M/s Kuitun Jinjiang Chemical Indsutry Co. Ltd. Any other than M/s Foshan Kaisino Building Material Co. Ltd. 331.10 MT 10. It would be seen from the above Table that if the subject goods were exported by a combination of the producer and the exporter, then the anti-dumping duty would be US$ 319.14 per metric ton but if export was made by the producer through any other exporter, then the anti-dumping duty would be US$ 331.10 per metric ton. 11. Shri Jitender Singh, learned Counsel appearing for the producer and the exporter made the following submissions: (i) Under the scheme of paragraphs 7 and 8 of Annexure-I to the 1995 Rules, the normal value for exporters from non-market economy country has to be determined in terms of paragraph7 only. It is only in the event that a claim is made for market economy treatment under the proviso to paragraph 8(2) that the Designated Authority would be obliged to determine the normal value in terms of paragraphs 1 to 6, subject to the fulfilment of the conditions of paragraph 8(3). Due to this presumption in paragraph 8(2), the provision cannot be read i....
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....nvestigation. The level of development of Qatar is not comparable to that of China nor the level of development of industry in Qatar and China are similar. The disclosure statement also does not contain any evidence indicating why Qatar would be an appropriate surrogate country. In the absence of such data and information, the producer and the exporter were prevented from offering any comments. The Designated Authority erroneously stated that the Qatar is a non-dumped source. (vi) The Designated Authority breached the principles of natural justice for the following reasons: a. No hearing was granted with respect to the issue of taking Qatar as a surrogate country. b. The calculation of the dumping margin was not provided. c. The DGCI&S data relied by the Designated Authority to compute normal value were not provided. d. Rejoinder of the Domestic Industry was not provided. (vii) The Designated Authority acted in contravention of section 9A of the Customs Tariff Act, 1975[the Tariff Act] by taking the export price of the producer, instead of the export price of the exporter. 12. Ms. Reena Khair, learned Counsel appearing for the Domestic Industry, however, made t....
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....hinese exporter to put forward its objections. In any case, there is no prejudice to the Chinese exporter, as they have neither provided any material for selection of any other market economy third country nor any other reasonable basis for computation of normal value, either during the course of the investigation or even in the memo of appeal. (iv) The submission that the third country was to be selected by the Designated Authority at the stage of initiation itself is incorrect. At the stage of initiation in a new shipper review, even the exports, which are the subject matter of investigation, have not taken place. It is only after the exports are completed and the responses to the Exporter questionnaire and Market Economy Treatment Questionnaires are filed that the Designated Authority effectively starts its investigation; (v) In view of the fact that the Chinese exporter had not furnished the relevant information to the Designated Authority in terms of section 9A(6A) of the Tariff Act read with rule 6(8) of the 1995 Rules and Annexure I to the 1995 Rules, the Designated Authority correctly exercised its powers in determination of the normal value on a reasonable basis, bas....
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.... melamine from the New Shipper at a much higher price than the price which the other Chinese producers were offering. M/s Exim Incorporation is also named in DRI investigation as it was found to have been over invoicing. There appears to be a cartel of New Shipper (the producer & exporter) with these two Indian Importers to achieve their target to secure lower anti-dumping duty with manipulated and fictitious documents/billing; and (iv) The importer has been regularly importing melamine from China. The price difference in the melamine supplied by different Chinese suppliers is hardly 5 to 10 US$ per metric ton. The export price claimed by the exporter is fictitiously high as there is difference of more than 100 to 200 US$ per metric ton in the prices at which the exporter has exported the product to India and the price at which other Chinese suppliers have supplied the product to India market. However, there is no significant difference in the selling price of melamine in the Indian domestic market vis-à-vis the product of other exporters. Such a significant difference is unexplained and gives an impression of manipulation. 14. Shri Ameet Singh, learned counsel appeari....
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....on (6) shall be determined on the basis of records concerning normal value and export price maintained, and information provided, by such exporter or producer; and (vii) The price at which imports were much made by the importers from the applicant producer/exporter were much higher than the price of other importers from China. The Domestic Industry and other importers strongly disputed the price at which the imports were made, alleging established past history of over invoicing and DRI investigation. Since the import price from applicant producer/exporter from China were noted to be higher than the other importers, the Designated Authority adopted the fundamental approach of considering the price of goods from the producer to exporter to overcome this challenge. 15. The submissions advanced by the learned Counsel for the parties have been considered. 16. In order to appreciate the contentions advanced on behalf of the parties, it would be appropriate to refer to the relevant provisions of the Tariff Act and the 1995 Rules relating to anti-dumping duty and determination of margin of dumping. 17. Section 9A of the Tariff Act deals with anti-dumping duty on dumped articles....
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....ministrative, selling and general costs, and for profits, as determined in accordance with the rules made under sub-section (6): Provided that in the case of import of the article from 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." xxxxx xxxxx xxxxx (5) The anti-dumping duty imposed under this section shall, unless revoked earlier, cease to have effect on the expiry of five years from the date of such imposition: Provided that if the Central Government, in a review, is of the opinion that the cessation of such duty is likely to lead to continuation or recurrence of dumping and injury, it may, from time to time, extend the period of such imposition for a further period of five years and such further period shall commence from the date of order of such extension: Provided further that where a review initiated before the expiry of the aforesaid period of five years has not come to a con....
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....nitiation of the review." 20. Rule 10 of the 1995 Rules deals with determination of normal value, export price and margin of dumping and it is as follows: "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." 21. Annexure-I to the 1995 Rules deals with the principles governing the determination of normal value, export price and margin of dumping. Rules 1 to 6 deal with market economy countries, while rule 7 deals with non-market economy countries. Rules 7 and 8 are reproduced below: "7. In case of imports from non-market economy countries, normal value shall be determined on the basis of the price or constructed value in the market economy third country, or the price from such a third country to other countries, including India or where it is not possible, or on any other reasonable basis, including the ....
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....t distortions carried over from the former non-market economy system, in particular in relation to depreciation of assets, other write-offs, barter trade and payment via compensation of debts; (c) such firms are subject to bankruptcy and property laws which guarantee legal certainty and stability for the operation of the firms, and (d) the exchange rate conversations are carried out at the market rate by the firms. Provided, however, that where it is shown by sufficient evidence in writing on the basis of the criteria specified in this paragraph that market conditions prevail for one or more such firms subject to anti-dumping investments, the designated authority may apply the principles set out in paragraph 1 to 6 instead of the principles set out in paragraph 7 and in this paragraph. (4) Notwithstanding, anything contained in sub-paragraph (2), the designated authority may treat such country as market economy country which, on the basis of the latest detailed evaluation of relevant criteria, which includes the criteria specified in sub paragraph (3), has been, by publication of such evaluation in a public document, treated or determined to be treated as a market econo....
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....here it is not possible, on any other reasonable basis, including the price actually paid or payable in India for the like product, duly adjusted if necessary, to include a reasonable profit of margin. 25. An appropriate market economy third country for the purpose of paragraph 7 of Annexure-I to the 1995 Rules has to be selected by the Designated Authority in a reasonable manner. The parties to the investigation have also to be informed, without any unreasonable delay, the aforesaid selection of the market economy third country and they have to be given a reasonable period of time to offer their comments. 26. Paragraph 8 (2) provides that there shall be a presumption that any country that has been determined to be, or has been treated as, a non market economy country for the purposes of an anti-dumping investigation by the Designated Authority or by the Competent Authority of any World Trade Organization member country during the three year period preceding investigation is a non market economy country. However, such a presumption can be rebutted by providing information and evidence to the Designated Authority to establish that such a country is not a non-market economy cou....
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.... also undertook to provide the necessary information in the prescribed formats soon after the period of investigation fixed by the Designated Authority. 30. The Designated Authority, on being prima facie satisfied that the conditions set out in rule 22 of the 1995 Rules, were met by the New Shipper, decided to initiate New Shipper Review investigation by Notification dated January 1, 2018 for determination of individual dumping margin for the producer and the exporter. The period of investigation for the purpose of this New Shipper Review was notified to be from January 1, 2018 up to December 31, 2018. It was further stated that all information relating to the review should be sent in writing so as to reach the Designated Authority not later than 40 days from the date of completion of the period of investigation but if the information was not received within the prescribed time limit or the information received was incomplete, the Designated Authority could record its findings on the basis of the facts available before a Designated Authority in accordance with the 1995 Rules. It was also stated that any interested party could inspect the public file containing non-confidential v....
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....ider an appropriate normal value methodology. (iii) None of the Interested Parties including the producer/ exporter suggested a market economy third country for considering the price or constructed value in such a country. The producer/ exporter, while choosing not to claim market economy treatment, at the same time did not suggest any market economy third country to consider applying the first part of paragraph 7, either in the petition or when questionnaire was filed. (iv) It was only post oral hearing in February, 2019 that the producer/ exporter suggested adoption of constructed normal value methodology based on cost of production of India industry and the domestic Industry suggested adoption of imports from a third country i.e. Qatar for computing the normal value. (v) In a New Shipper Review, it is only after producer/ exporter and other interested parties file their submissions/ responses that the Designated Authority could have provided its approach on adoption of the methodology for determination of normal value. The Designated Authority disclosed its approach in the disclosure statement dated May 22, 2019 and on request of the producer/ exporter also extended tim....
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....e of the producer to the exporter. This would take care of the concern of the domestic industry and the importer regarding overpricing by the exporter." 34. The conclusions of the Designated Authority in the final findings are as follows: "32. Conclusions i. The Authority holds that quantity of export by the producer is quite reasonable to reference this sales to the exporter i.e M/s Foshan Kaisino Building Material Co., Ltd. (exporter) to evaluate the ex-factory price of export destined to India. ii. The producer has dumped the subject goods during the POI. iii. As per rule 22, the extent of dumping margin as stated above in para 30 is awarded to the producer i.e. M/s Kuitun Jinjiang Chemical Industry Co. Ltd. (Producer) as the Anti-dumping duty." 35. The Designated Authority, thereafter made recommendation for imposition of the same anti-dumping duties that are contained in the Table to Customs Notification, which is contained in paragraphs 8 and 9 of this order. 36. It needs to be noted that unlike in an original investigation or a sunset review carried out for determination of anti-dumping duty at the behest of the Domestic Industry, in a New Shipper Review....
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....that the subject country would be treated as a non-market economy country by the Designated Authority, then too they should have atleast indicated which specific criteria contemplated under paragraph 7 should be adopted by the Designated Authority for determination of the normal value with reasons but that was not done. 38. The records, however, reveal that even during the course of oral hearing on February 14, 2019, the producer / exporter did not suggest either of the three criteria set out in paragraph 7 of Annexure-I for the determination of the normal value. In fact, it is when the Domestic Industry in the submissions filed after the oral hearing suggested that the normal value should be determined under paragraph 7 on the basis of the price from a market economy country to other countries, including India that the producer and the exporter in their rejoinder submissions stated that the normal value should be determined on the basis of the cost of production of the subject goods in India, which is the third criteria stipulated in paragraph 7. 39. It is in such circumstances, that Designated Authority made the following statements in the disclosure; "a. xxxxxxxxxxx ....
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....rt price of the producer i.e. M/s Kuitun Jinjiang Chemical Industry Co. Ltd. at the same level of trade in accordance with the rule 6(i) of Annexure 1 of AD rules. The Authority proposes to consider adjustments on to an extent of ; Ocean freight (40$per metric ton), Ocean insurance (0.5% of CIF), Inland freight (1% of FoB), Port handling (1% of FoB), Credit cost/Bank charges (1% of FoB). The next in the hierarchy of the options as per para 7 is price actually paid or payable in India for the like product duty adjusted if necessary to include a reasonable profit margin, which the Authority notes needs to be considered only if the option stated above was not available. g. The Authority notes that as per para 7 of Annexure 1 of AD rules, reasonable opportunity is to be provided to the interested parties on selection of the third market economy country. The Authority notes that in the ongoing NSR investigation, the time limit to complete the case has been fixed as 30/6/2019 in view of the Hon'ble High Court's order in Writ Appeal No. 412 to 414 of 2018. The exporter was provided a prospective POI of 1 year till 31/12/2018. The questionnaire response was filed by the producer / expor....
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....development of Qatar were not provided and that the most suitable way of calculation of normal value in the New Shipper Review was to adopt the same methodology that was adopted by the Designated Authority for determination of the normal value in the original or the sunset review investigation in this case. It was also stated that the level of development of Qatar was not comparable to that of China. 42. Taking into consideration the comments filed by the parties to the disclosure statement, the Designated Authority determined the normal value on the basis of the second criteria contained in paragraph 7. 43. It is in the light of the aforesaid facts that the contentions of the producer / exporter regarding violation of the principles of natural justice has to be examined. It is by now well established that the principles of natural justice are not contained in a straight jacket and a litigant cannot complain of the violation of the principles of natural justice if the litigant himself fails to avail opportunity to bring the correct facts to the notice of the authority. 44. In the present case, it was the producer/exporter who had filed an application for determination of i....
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....ble on the DGCIS data. It noted that while China accounted for 30303 metric tons, which would be 44 per cent of the total imports of subject goods during the period of investigation, the next highest quantity of import were from Qatar to the extent of 16479 metric tons, constituting 24.20 per cent at an average of 1450.48 per metric ton. The Designated Authority also noted that neither anti-dumping duty was imposed on any import from Qatar nor an anti-dumping investigation was under way and, therefore, as import volume from Qatar was quite significant, the price from Qatar would be representative of price payable in India. 46. In this regard the contention of the producer and the exporter is that the third country should have been selected by the Designated Authority at the stage of initiation itself. This submission cannot be accepted because as noticed above, the producer or the exporter did not even indicate which of the three criteria stipulated in the paragraph 7 of the Annexure-I of the 1995 Rules should have been adopted for determination of the normal value. 47. There is also no error in the determination of the normal value by the Designated Authority by resorting to....
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....ice at which other Chinese exporters had supplied the product in the Indian market. These facts have not been explained by producer/ exporter. It is important to note that all the exports took place after the period of investigation and, therefore, there is substance in the contention of the domestic industry that the prices claimed by the exporter had been raised so as to lower the amount of anti-dumping duty. 50. It has also been contended on behalf of the producer/ exporter that the Designated Authority was not justified in determining the export price of the producer and not the exporter. This submission cannot be accepted for the reason that the exporter had substantially raised the price of the subject goods in order to reduce the anti-dumping duty. The ex-factory price of the producer would, therefore, be relevant for determination of export price. 51. The Chinese exporter had relied upon certain new shipper review cases mentioned in table below and had not only submitted before Designated Authority but also before the Tribunal during the course of hearing that the Designated Authority did not suggest a surrogate country in these cases and the normal value was computed....
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.... normal value was determined based on the Chinese exporter‟s data. 9 No. 15/10/2006-DGAD Vitrified/Porcelain Tiles 27.02.2009 Not on surrogate Country basis Exporter was granted Market economy treatment and normal value was determined based on the Chinese exporter‟s data. 10 No. 15/23/2008-DGAD Vitrified/Porcelain Tiles 25.04.2009 Not on surrogate Country basis Exporter has claimed MET treatment. Exporter was granted Market economy treatment and normal value was determined based on the Chinese exporter‟s data. 11 No. 15/29/2010-DGAD Vitrified/Porcelain Tiles 28.09.2012 Not on surrogate Country basis Exporter has claimed Market economy treatment and normal value was determined based on the Chinese exporter‟s data itself. 12 No. 15/20/2011-DGAD Vitrified/Porcelain Tiles 24.07.2013 Not on surrogate Country basis Exporter failed to file MET questionnaire but claimed MET during the verification process. The Authority rejected the same and consequently rejected the request for individual dumping margin as well. 13 No. 15/25/2011-DGAD Vitrified/Porcelain Tiles 28.03.2016 Not on s....