TaxTMI 
TaxTMI 
2022 (3) TMI 167
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....08.2016 issued by the Central Government on the basis of the final findings dated 30.06.2016 of the designated authority, has led to the filing of this appeal by All India Laminated Fabric Manufacturers Association, New Delhi [the appellant ] under section 9C of the Customs Tariff Act, 1975 [the Tariff Act] The relief claimed in this appeal is that the aforesaid final findings dated 28.10.2021 notified by the designated authority may be modified and it be held that there is a likelihood of dumping and injury so that the anti-dumping duty on the subject goods from the subject country can be continued for a further period of five years. 2. Anti-dumping investigation concerning the imports of PVC Flex Film [the subject goods] from the China PR [the subject country] was earlier initiated on 01.02.2010 by the designated authority on an application filed on behalf of the domestic industry. The designated authority ultimately recommended imposition of definite anti-dumping duties on imports of the subject goods from the subject country by a notification dated 29.07.2011 and thereafter, the Central Government issued the consequential notification dated 25.08.2011 imposing an....
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....le 16 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] and informed all the interested parties of the essential facts under consideration in order to enable the interested parties to offer their comments on the facts so gathered. It was also made clear that the designated authority will make the final determination on various aspects of the investigation on the basis of the comments received from the interested parties to the disclosure statement. The relevant portions of the disclosure statement under various heads are as follows:- Determination of Dumping Margin: "50. Considering the normal value and export price for the subject goods, the dumping margin for the subject goods from the subject country is proposed to be determined as follows: SN Name of Producer Normal Value Export Price Dumping Margin Dumping Margin Dumping Margin (USD/MT) (USD/MT) (USD/MT) (%) (Range) China PR 1 Heytex Technical Textile (Zhangjaingang) Company Limited *** *** *** *** 5-15 2 Non- cooperati....
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....ost was higher during the period of investigation due to plant shutdown as a result of Covid-19. Economic Parameters of the domestic industry 65. The Authority notes that: i. The capacity of the domestic industry increased over the period. ii. Production and sales increased in 2018-19, declined in 2019-20 and thereafter, steeply in the period of investigation. The applicants have claimed that such decline can be attributed to the effects of Covid-19 pandemic. iii. The capacity utilization has declined over the injury period. 67. It is seen that the market share of the domestic industry has reduced throughout the injury period. However, the market share of other Indian producers as a whole has increased, while the market share of subject imports has declined. 71. The Authority notes that the profits per unit, cash profits and return on capital employed declined throughout the injury period. However, the volume of imports is too low to compel the domestic industry to sell at lower profits. The domestic industry has conceded that this is a result of Covid-19 73. It is seen that number of employee....
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....n demand from downstream industries 88. ***** h. Significant inventories held by the producers in China PR 89. ***** i. Decline in exports from the subject country due to Covid-19 90. ***** j. Data filed by the responding producer 91. ***** Magnitude of Injury Margin 93. The non-injurious price of the subject goods produced by the domestic industry as determined by the Authority in terms of Annexure III to the Rules has been compared with the landed value of the exports from the subject country for determination of injury margin during the period of investigation and the injury margin so worked out is as under: S.N. Name of Producers Non- injurious price Landed Price Injury margin Injury margin Injury margin (Rs/MT) (Rs/MT) (Rs/MT) (%) (Range) China PR 1. Heytex Technical Textile (Zhangjiagang) Company Limited *** *** *** *** Negative 2. Non- Cooperative/ residual exporters *** *** *** *** Negative Non-Attribution Analysis 94. As per the Rules, the Authority....
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....establish that the normal value determined is inappropriate. Regarding the argument that the difference in prices of imports from China PR and Korea RP suggests that the quality of the two is different, it is noted that no evidence has been put forth by the interested parties to demonstrate differences in quality. Merely because the prices are different does not imply difference in the quality. 101. Regarding the claim that the normal value cannot be determined on the basis of price of exports from a market economy third country to an individual country, the Authority notes that the provisions of para 7 allow determination of normal value based on exports from a market economy third country to other countries, including India. In the present case, it was not possible to determine the normal value based on exports to all countries, as the product does not have a dedicated code. The Authority, in the past also has determined normal value based on the price of exports from a market economy third country to India. This approach has been affirmed by the Tribunal, in the case of Kuitun Jinjiang Chemical Industry Co. Ltd. vs. Designated Authority as well. 102. ....
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....of this report. d. Even though there is continued dumping of the subject goods from China PR, the likelihood of continuation/recurrence of injury to the domestic industry in the event of revocation of duty could not be conclusively established due to lack of sufficient independent corroborative evidence. e. Therefore, based on examination of information on record, it is concluded that there is no justification for recommending continuation of anti-dumping duty in the present investigation. (emphasis supplied) 7. Ultimately, the designated authority recommended for withdrawal of anti-dumping duty enforced by notification dated 08.08.2016, as further extended by notification dated 30.06.2021 upto 31.01.2022, and the recommendation is as follows: RECOMMENDATION "105. In view of above, the Authority considers it appropriate to recommend withdrawal of antidumping duty on import of subject goods from the subject country recommended vide Notification No.15/13/2015-DGAD dated 30th June, 2016 and enforced vide Customs Notification No. 42/2016- Customs (ADD) dated 8th August 2016 and further extended vide Customs notification No. 38/2021-....
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....as directed to be listed for hearing peremptorily at the top of the board on 17.02.2022. 12. Respondent no. 1, which is the designated authority, is represented by Shri Ameet Singh. Respondent no. 2, which is the Union of India, is represented by Shri Nagendra Yadav authorized representative of the Department. Respondent no's 3, 4 and 5 are the domestic producers who had filed the application for continuance of the anti-dumping duty together with the appellant. Respondent no. 6 is the China Embassy. Respondent no's 7 and 8 are the foreign importers. Respondent no. 7 is not represented despite service of notice but Shri Devinder Bagia, learned counsel has appeared on behalf of respondent no. 8. Respondent no's 9, 10, 11 and 12 are the domestic producers supporting the appellant. 13. Ms. Reena Khair assisted by Shri Rajesh Sharma and Ms. Shreya Dahiya, learned counsel appearing for the appellant made the following submissions: (i) In a sunset review, if the Central Government is of the opinion that the cessation of duty is likely to lead to continuation or recurrence of dumping and injury, it may extend the duty for a further period of 5 years. The pa....
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....other laws, the Chinese Government could initiate action against such agencies. In 2021, the Data Security Law of the People's Republic of China was introduced, whereby under Article 36, domestic organization and individuals were prohibited from providing data stored within the mainland territory of China to the justice or law enforcement institution of a foreign country, without the prior approval of the competent authority. The market research agency had, therefore, cautioned the appellants regarding disclosure of its name in the public domain; (vii) In terms of Article 6.5 of the Anti-Dumping Agreement, confidentiality can be claimed if disclosure of the information would have an adverse effect on the person from whom the information was acquired; (viii) The designated authority did not at any stage prior to the final findings, raise any objection or query in this regard and accordingly, the appellant had no occasion to clarify this aspect. The appellant was under a bonafide belief that the designated authority was agreeable to proceed on the basis of the report. Had the authority called upon the appellant to disclose the name of the agency, the app....
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....i-dumping duty has been served and that there is no need for further extension of anti-dumping duty; (iv) The domestic industry was admittedly not suffering any form of material injury. Injury, if any, has already been attributed by the appellant to the current COVID- 19 pandemic. Price undercutting is negative. Injury margin is negative. There is absence of price suppression or depression. The designated authority after considering all the relevant facts in the investigation, concluded that there is a "lack of sufficient independent corroborative evidence" establishing the likelihood of continuation/recurrence of injury to the domestic industry in the event of revocation of duty; (v) The imposition of anti-dumping duty should come to an end on the expiry of five years unless there exist circumstances that warrant further protection to the domestic industry; (vi) The domestic industry is not suffering material injury and there is no likelihood of recurrence or continuation of material injury to the domestic industry upon cessation of anti-dumping duty; (vii) The domestic industry suffered decline in cash profits during the....
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....h reliance was placed by the appellant was correctly not taken into consideration by the designated authority since even the name of the author/agency that had prepared the report was not mentioned. In the absence of any reference to the original source of data, the report was suspicious; and (v) The designated authority had to determine the continuance or recurrence of dumping and injury on the basis of facts and not merely on the bases of allegation, conjectures or remote possibility. 16. Shri Nagendra Yadav learned authorised representative appearing for the Union of India also supported the impugned order and made the following submissions: (i) The decision taken by the designated authority does not suffer of any perversity and in this connection reliance has been placed on the following decisions: (a) Eveready Industries India Ltd. vs. Union of India [2019 (367) E.L.T. 53 (Del.)]; (b) Alembic Ltd. vs. Union of India [2013 (291) E.L.T. 327 (Guj.)]; and (c) Sales Tax Officer vs. Shree Durga Oil Mills [1998 (97) E.L.T. 202 (S.C.)]; 17. The submissions advanced on behalf of the parties hav....
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....ing contained in sub-rule (1) or (1A), any definitive anti dumping duty levied under the Act, shall be effective for a period not exceeding five years from the date of its imposition, unless 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 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." 21. It would be seen that in view of the provisions of rule 23(3), rule 11 of the 1995 Rules would be applicable to 'sunset reviews'. Rule 11 deals with determination of injury and sub-rule (2) of Rule 11 of the 1995 Rules is reproduced below: "Rule 11: (i) xxxxxxx ....
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....all consider, inter alia, such factors as: (a) a significant rate of increase of dumped imports into India indicating the likelihood of substantially increased importation; (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. 23. It would be seen that the determination of threat of material injury to domestic industry is required to be based on facts and not merely on allegation, conjecture or remote possibility. The change in circumstances which would create a situation in which the dumping would cause injury must be clearly foreseen and imminent. 24. At this stage, it would also be pertinent to refer to the 'Agreement on Implementation of Article VI....
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.... 11.4 The provisions of Article 6 regarding evidence and procedure shall apply to any review carried out under this Article. Any such review shall be carried out expeditiously and shall normally be concluded within 12 months of the date of initiation of the review. 11.5 The provisions of this Article shall apply mutatis mutandis to price undertakings accepted under Article 8." 25. It needs to be remembered that the nature of exercise to be undertaken in a 'sunset review' is different from the initial exercise that is undertaken for determining whether anti-dumping duty is to be levied or not. In a review, the focus is on whether withdrawal of anti- dumping duty would lead to continuance or recurrence of dumping as well as injury to the domestic industry. 26. In this connection reference can be made to a decision of the Tribunal in Thai Acrylic Fibre Ltd. vs. Designated Authority [2010 (253) E.L.T. 564 (Tri.-Del)] wherein it was observed: "13. Unlike original investigations, sunset reviews are prospective in nature, as they focus on the likelihood of the continuation or recurrence of dumping and injury, in case antidumping dutie....
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....ue, export price, dumping margin, fixation of non-injury price and injury to domestic industry. The said inquiry has to be limited to the information received with respect to change in the various parameters. The entire purpose of the review inquiry is not to see whether there is a need for imposition of anti- dumping duty but to see whether in the absence of such continuance, dumping would increase and the domestic industry suffer." (emphasis supplied) 28. In APAR Industries Ltd. vs. Designated Authority [2006 (200) E.L.T. 34 (Tri.-Del.) CESTAT], the Tribunal followed the aforesaid observations of the Supreme Court and held: "It is to be borne in mind that the scope of the sunset review by the designated authority is limited. He has to satisfy himself as to whether there is justification for continued imposition of anti-dumping duty and that also based on the information received by him. It seems that the sunset review by its very nature, would be limited to see as to whether conditions which existed at the time of imposition of antidumping duty have altered to such an extent that there is no longer justification for continued imposition of duty or to ascertai....
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....omic and other factors relating to the domestic Industries as well as the exporting Industries/countries to analyse and arrive at a probable situation of continuation of dumping and injury in future to the domestic industry. There is no dispute or quarrel on the fact that it should be on the basis of some tangible evidence. Therefore, the procedure prescribed to address the interest of all interested parties for imposition of anti dumping duty are also applicable to the sun set review proceedings even though with different objective." (emphasis supplied) 31. What transpires from the aforesaid discussion is that though the anti-dumping duty imposed under sub-section (1) of section 9A of the Tariff Act shall cease to have effect on the expiry of five years from the date of such imposition, but under sub-section (5) of section 9A, the Central Government, in a review, can extend the period of such imposition for a further period of five years if the Central Government is of the opinion that cessation of such duty is likely to lead to continuance or recurrence of dumping and injury. Rule 23 of the 1995 Rules provides that though the definitive anti-dumping duty shall be effe....
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....cur would entail a factual analysis of future events based on projected levels of dumped imports, prices and impact on domestic producers. The determination in a sunset review cannot be based on guesswork or on mere assumption or presumption but it should be based on some tangible evidence. 34. In the present case, as noticed above, the designated authority concluded in the final findings that cessation of duty was not likely to lead to continuation or recurrence of dumping and injury and the conclusions are as follows: "Conclusion on injury and likelihood of continuation or recurrence of dumping and injury 94. The domestic industry has suffered a decline in performance due to the effects of Covid-19 pandemic. With regard to likelihood of dumping and recurrence of injury, the Authority notes as under: i. The volume of imports of subject goods from China PR has declined significantly both in absolute and relative terms. The imports of subject goods from China PR has been less than 1% of the Indian demand and Indian production from 2018-19 onwards. ii. To establish the likelihood of continuation/recurrence of ....
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....Investment Feasibility Assessment on China Polyvinyl Chloride Flexible Film/Sheet Market 2021-2025'. The designated authority, in the final findings, did not consider it appropriate to place reliance on the said report for the reason that the name of the author or the agency which prepared the report was not mentioned nor the report made any mention of the original source of data. 37. Learned counsel for the appellant submitted that the designated authority committed an error in rejecting the market research report that had been submitted by the appellant before the designated authority. The submissions of learned counsel for the appellant is that though the appellant had not given the name of the market research agency, but if the designated authority had called upon the appellant to disclose the name of the agency, the appellant would have done so on a confidential basis. Learned counsel also stated that the reason why the appellant had not provided the name of the market research agency was that since the market research agency was based in China, it was not permitted by Data Secrecy Law to disclose the market information to persons outside China. In this connection rel....
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....ccording to the appellant, went to the heart of the issue of likelihood of continuance or recurrence of dumping and injury and it has been submitted that if the designated authority found that the report was unreliable, it should have granted an opportunity to the appellant to establish its reliability. 40. It is not possible to accept this contention of learned counsel for the appellant. In the first instance, as submitted by learned counsel for respondent no. 8, the appellant cannot be permitted to urge at this stage that it was barred from sharing the name of the author/agency of the marketing intelligence report due to the Data Secrecy Law as this ground was not raised in the appeal memorandum nor any permission was sought from the Tribunal to raise this plea at the time of hearing of the appeal. This apart, this law was enacted in September 2021 after the report was shared with the designated authority and it is not the case of the appellant that this law had any retrospective application. In fact, the contention of the appellant is that in case the designated authority had asked, the appellant would have shared the name of the author with the designated authority eve....
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....conduct a rigorous examination in a sunset review before the exception that duty should be continued can apply. This requires an appropriate degree of diligence on the part of the designated authority. It cannot be urged that since after the imposition of anti-dumping duties, imports had declined and domestic production had increased, it is possible that after cessation of anti-dumping duty, the imports would increase and the domestic production would reduce. There has to be a strong explanation as to why this would happen as mere possibility of injury to domestic industry is not sufficient. This aspect was examined at length in the report of the Panel in "Pakistan-Anti-Dumping Measures on Biaxially Oriented Polypropylene Film From the United Arab Emirates" [WT/DS538/R decided on 18.01.2021] and the relevant portion of the report is reproduced below: "7.602. We recall that, under Article 11.3, an authority must determine that the continuation or recurrence of injury is likely, and not merely possible, and that this determination must be based on positive evidence and not on assumption. 7.603. We note that the NTC reasoned that, since after the imposition of anti-d....
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....rence of dumping and injury". Therefore, what is essential for an affirmative determination under Article 11.3 is proof of likelihood of continuation or recurrence of dumping and injury, if the duty expires. The nature and extent of the evidence required for such proof will vary with the facts and circumstances of the case under review. Furthermore, as the Appellate Body has emphasized previously, determinations under Article 11.3 must rest on a "sufficient factual basis" that allows the investigating authority to draw "reasoned and adequate conclusions"." 46. Article 11.3 of the 1994 Agreement also came up for interpretation before the Appellate Body in United States Sunset Review of Anti-Dumping Duties on Corrosion-Resistant Carbon Steel Flat Products from Japan [WT/DS244/AB/R decided on 15 December 2003]. The appellate body placed emphasis upon the word 'unless' and observed that this would suggest that the designated authority would have to conduct a rigorous examination in a sunset review before resorting to the exception for continuance of the anti-dumping duty. The appellate body also observed that the sunset review requires an appropriate degree of diligence. It al....
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....to continue the imposition of the measure after the expiry of the five-year application period, it is clear that the investigating authority has to determine, on the basis of positive evidence, that termination of the duty is likely to lead to continuation or recurrence of dumping and injury. An investigating authority must have a sufficient factual basis to allow it to draw reasoned and adequate conclusions concerning the likelihood of such continuation or recurrence. 115 The Panel's description of the obligations of investigating authorities in conducting a sunset review closely resembles our own, and we agree with it." (emphasis supplied) 47. In this view of the matter, the designated authority was justified in holding that there did not exist sufficient factual material to allow the designated authority to conclude that there was a likelihood of continuation or recurrence of injury in case of cessation of anti- dumping duty. 48. Learned counsel for the appellant also placed reliance upon paragraphs 80 to 92 of the final findings and submitted that the parameters relevant for likelihood of continuation or recurrence of dumping and injury h....
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....he report. Even otherwise, as noticed above, the report does not give the source of the data contained in the report. Such a report could not, therefore, have been relied upon by the designated authority in view of the specific provisions in contained in rule 8 of the 1995 Rules that provides that the designated authority shall, during the course of investigation, satisfy itself as to the accuracy of the information supplied by the interested parties upon which its findings are based. 51. Learned counsel for the appellant placed reliance upon the Panel Report dated 08.10.2011 in "European Union Anti-Dumping Measures on Certain Footwear From China". This report deals with confidential treatment. The other report of the Panel dated 24.07.2020 relied upon by the learned counsel for the appellant also relates to confidential treatment. The issue in the present appeal is not regarding the confidentiality to be granted or not, but it is regarding the disclosure to the designated authority, even if it was considered to be confidential, the name of the author/publishing agency of the report in which even the data source was not indicated. 52. Thus, the designated authorit....