TaxTMI 
TaxTMI 
2023 (1) TMI 1059
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.... notification dated 11.11.2020 read with the final findings dated 20.08.2020. The submission is that its exports to India by Xinyi Energy are not at dumped prices, and the determination of the dumping margin by the designated authority in the final findings is erroneous for the reason that it is based on a faulty determination of the normal value and export price. 2. Anti-Dumping Appeal Numbers 50412 of 2021, 50413 of 2021, 50414 of 2021 and 50418 of 2021 have been filed by M/s. Asahi India Glass Ltd, M/s. Gold Plus Glass Industry Ltd., M/s. Saint Gobain India Pvt Ltd. and M/s. Sisecam Flat Glass India Pvt. Ltd.[ the domestic industry] , respectively, as domestic industry, with a prayer that Xinyi Energy should have been treated as a non-co-operating exporter by the designated authority and/or relegate Xinyi Energy to residuary antidumping duty for the reason that Xinyi Energy had consciously provided incorrect information to the designated authority and also suppressed material facts from the designated authority. 3. It transpires from the records that the domestic industry had filed an application before the designated authority for imposition of anti-dumping duty o....
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....ear Float Glass of nominal thicknesses ranging from 4mm to 12mm (both inclusive), the nominal thickness being as per BIS 14900:2000 Malaysia Malaysia Kibing Group (M) Sdn. Bhd. 273.12 United States Dollar Metric tonne 2. -do- -do- Malaysia Malaysia Xinyi Energy Smart (Malaysia) Sdn. Bhd. 272.87 United States Dollar Metric tonne 3. -do- -do- Malaysia Any Any other than S. Nos. 1 and 2 above 326.00 United States Dollar Metric tonne 4. -do- -do- Any country not attracting antidumping duties Malaysia Any 326.00 United States Dollar Metric tonne 7. The anti-dumping duty was to be effective for a period of five years from the date of publication of the notification in the official gazette. 8. Xinyi Energy, as a producer and exporter of the subject goods from Malaysia, has challenged the imposition of anti-dumping duty imposed upon it by the aforesaid notification dated 11.11.2020 issued by the Central Government. The domestic industry, at whose instance the anti dumping duty was imposed, has ....
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.... when because of the particular market situation or low volume of the sales in the domestic market of the exporting country or territory, such sales do not permit a proper comparison, the normal value shall be either - (a) comparable representative price of the like article when exported from the exporting country or territory to an appropriate third country as determined in accordance with the rules made under sub-section (6); or (b) the cost of production of the said article in the country of origin along with reasonable addition for administrative, 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." 11. A perusal of the aforesaid section 9A of the Tariff Act indicates if any article is exported from any country to....
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....e margin of dumping taking into account, inter alia, the principles laid down in Annexure I to these rules." 18. Rule 16 provides that the designated authority shall, before giving its final findings, inform all interested parties of the essential facts under consideration which form the basis for its decision. 19. Rule 17 provides for final findings. It stipulates that the designated authority shall, within one year from the date of initiation of the investigation, determine as to whether or not the article under investigation is being dumped in India and submit to the Central Government its final findings. Apart from various factors on which the final findings is to be given, the designated authority is also required to recommend the amount of duty which if levied would remove the injury to the domestic industry after considering the principles laid down in Annexure III to the 1995 Rules. For this purpose the designated authority has to determine the non-injurious price of the like domestic product. Rule 17 is reproduced below: "17. Final findings. - (1) The designated authority shall, within one year from the date of initiation of an investigation, determin....
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.... receiving official correspondence. The temporary office address was indicated on the website, in anticipation of approval to be granted by the Reserve Bank of India. Xinyi Glass was not concerned with the export of subject goods by Xinyi Energy during the period of investigation and this fact was accepted by the designated authority as no adjustment was made to the export price in the disclosure statement. Still, without any fresh evidence or information, the designated authority, in the final findings, concluded that Xinyi Glass is involved in the sale and marketing of subject goods in India during the period of investigation on behalf of its parent company, i.e. Xinyi Glass Holdings Ltd; (iii) Xinyi Glass India and Xinyi Energy do not have interse shareholding, but are subsidiaries of a common parent, i.e. Xinyi International Investment (Hong Kong). Merely because a group company has applied for a liaison office with the expectation of carrying out certain activities in India in the future does not justify the conclusion that Xinyi Glass was involved in selling or marketing of subject goods in the past, i.e. during the period of investigation; (iv) There is....
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....correct; and (x) Even otherwise, rule 6(8) of the 1995 Rules has no applicability to the present case, as the designated authority had never asked Xinyi Energy to provide the expenses incurred by Xinyi Glass. In fact, Xinyi Energy had no opportunity to provide such information, as it believed that its contention on this issue had been accepted by the designated authority. It came to know that such adjustment was going to be made only after issuance of the final findings. 21. Shri Ramesh Singh, learned senior counsel assisted by Shri Jitendra Singh, Shri Akshay Soni, Shri Anshuman Sahni and Shri Sharad Bhausali, learned counsel and Shri Jinendra Singhvi learned consultant for the domestic industry, made the following submissions: (i) The Questionnaire response of Xinyi Energy should have been rejected and Xinyi Energy should have been declared as non-cooperative, since it consciously provided incorrect information and suppressed material facts from the designated authority in order to not only deflate its cost of production to have a lower normal value, but also to inflate its export price; (ii) Incorrect information was provided by the exporter ....
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.... the domestic sales in Malaysia, added interest cost prevailing in Malaysia. 23. Shri Rakesh Kumar, learned authorized representative of the Department appearing for the Central Government supported the final findings of the designated authority and the notification issued by the Central Government for imposition of anti-dumping duty on the subject goods from Malaysia. 24. The submissions advanced by learned counsel for Xinyi Energy, learned senior counsel appearing for the domestic industry, learned counsel appearing for the designated authority and learned authorized representative appearing for the Central Government have been considered. 25. The submission advanced by the learned counsel for Xinyi Energy is that the export price of the subject goods to India by Xinyi Energy are not at dumped prices and the determination of the dumping margin by the designated authority is not correct as the normal value and export price have not been correctly determined. 26. In order to appreciate the submission, it would be appropriate at this stage to examine what was disclosed by the designated authority in the disclosure statement. 27. Regardi....
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....vided transaction wise details of sales made in home market in its Questionnaire Response. Detailed examination of the response was carried out on desk study basis. To determine the normal value, the Authority conducted the ordinary course of trade test to determine profit making domestic sales transactions with reference to cost of production of subject goods. 37. It has been claimed by the domestic industry that the exporter has obtained interest free loans from their group company. Further, it has procured of raw material/plant and machinery from a related company and natural gas in Malaysia at subsidized prices. The Authority noted that as per Audit Report for the year 2018, the company has obtained interest free loan of *** MYR from its holding company, namely Xinyi International Investments Limited, Hong Kong. This company has claimed that this loan has been obtained by the Holding Company from Bank of China (Hong Kong) Limited for investing in Xinyi Energy Smart (Malaysia) Sdn. Bhd., Malaysia at an Interest Rate of HIBOR+***% p.a. In support of the same copy of the agreement between Bank of China (HK) and Xinyi International Investments Limited, Hong Kong have been p....
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....nbsp; M/s Xinyi Energy Smart (Malaysia) Sdn. Bhd., Malaysia, has exported directly *** MT of the subject goods having invoice value *** MYR to Indian buyers. The producer/exporter has claimed adjustments on account of ocean freight, insurance, inland transportation, credit cost, bank charges. The Authority has not considered this adjustment while arriving at ex-factory domestic sales. The Authority has analyzed the post disclosure comments and after analyzing the same, found that the Xinyi Glass (India) Ltd is indeed involved in the soliciting business enquiries, and marketing of their group company's products which include subject goods manufactured by Xinyi smart. 41. It is also noted that the exporter has not provided any evidence / information to enable the Authority to deduct relevant expenses of the Xinyi Glass India. In order to make appropriate adjustments the Authority has deducted *** % from the export price of Xinyi Smart, based on selling and marketing costs only of the Xinyi Glass Holding Limited in accordance to the Rule 6(8). The net export price after these adjustments is given in the dumping margin table." (emphasis supplied) 30. T....
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....this requirement Xinyi Glass (India) Ltd., Hong Kong has appointed a country representative and hired a cabin of 110 sq. ft in Gurugram, Haryana to meet the requirement of local representative and local address. They also submitted Xinyi Glass (India) Limited, Hong Kong, has filed an application before RBI for approval to establish a Liaison Office in India, and the said application is still pending as the required approval from RBI has not been granted, and Xinyi Glass (India) Limited cannot start its operations till the approval from RBI is granted. It is further submitted that Xinyi Glass (India) Ltd. is not authorised to open any bank account in India without approval for establishment of Liaison Office from RBI, all its expenses including Rent for Office and salary to its only staff member is directly paid by the Group Company. In view of the above facts, it is submitted that there is no related company operational in India of Xinyi Energy Smart. Claim of the Domestic Industry with regard to Xinyi Glass (India) Ltd. is totally incorrect and needs to be rejected." 33. After having considered the post disclosure comments, the designated authority proceeded to record its e....
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....*% from the export price of Xinyi Smart, for determining net export price taking into account selling and marketing costs of the their parent company ie Xinyi Glass Holding Limited in accordance to the Rule 6(8) of the Rules. 108. With regard to the argument of Xinyi Energy Smart (Malaysia) SDN BHD with regard to the notional interest rate charged in respect of loans from principal shareholder, it is found that the cost was understated to the extent of the impact of interest of such loans and the Authority has duly adjusted the same by imputing notional interest cost." (emphasis supplied) 34. The conclusions recorded by the designated authority are as follows: "J. Conclusion 115. Having regard to the contentions raised, information provided, and submissions made by the interested parties and facts available before the Authority as recorded in these final findings and on the basis of the above analysis, the Authority concludes that: a. The product under consideration has been exported to India from the subject country below its associated normal value, thus resulting in dumping. b. The Domestic Industry has suffered material injury du....
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....ding Limited. In this connection, learned counsel referred to paragraphs 40, 41, 104 and 105 of the final findings of the designated authority. 39. The finding that Xinyi Glass is involved in the marketing and sales of the subject goods in India, during the period of investigation is based on the following: a) Application filed by Xinyi Glass to the Reserve Bank of India for opening a liaison office. b) Taking on rent an office admeasuring 110 Sq. feet (referred to as Cabin 1) for receiving official correspondence after the period of investigation. c) Mention of this office address on Company website. d) Public hearing attended by Mr. Rajesh Kumar, sole employee of Xinyi Glass in India. 40. It is seen that all these facts were before the designated authority before it issued the disclosure statement. There is nothing on the record which may indicate that any fresh evidence was led by the domestic industry, after the issuance of the disclosure statement, which could have persuaded the designated authority to form an opinion regarding involvement of Xinyi Glass in the export of subject goods by Xinyi Energy during the period of investigat....
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....a) Limited [Exhibit-3], which clearly shows that Xinyi Glass (India) Limited is registered in Hong Kong and not in India. b) We are also enclosing herewith an email received from ICICI Bank, India, who is processing their application for approval from Reserve Bank of India for establishment of Liaison Office about the status of such application 'Exhibit-4. The application for such approval has been filed through ICIC Bank India. The email issued by ICICI Bank clearly shows that: * Xinyi Glass (India) Limited, Hong Kong, has filed an application before RBI for approval to establish a Liaison Office in India. * The said application is still pending as the required approval from RBI has not been granted. * Xinyi Glass (India) Limited cannot start its operations till the approval from RBI is granted. 4. From the email received from ICCI Bank it is clear that no approval has been granted by Government of India for start of Liaison Office in India. In absence of such approval Xinyi Glass (India) has not established any business operations in India. It has also been clarified that Xinyi Glass (India) Ltd. cannot start its activities without obtaining approval for....
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....s Representative of Xinyi Energy in India. 45. In the present case, there is nothing on the record which may indicate that the said information relates to the period of investigation i.e. from 01.04.2018 to 31.03.2019. This apart till 14.08.2020 approval had not been granted by the Reserve Bank of India to Xinyi Glass to open a liaison office and there was only one employee of Xinyi Glass in India who was merely looking after the registration process of the liaison office. It would, therefore, not be appropriate to examine the information referred to by the learned senior counsel to determine whether Xinyi Energy had a liaison office in India. 46. Thus, the expenses, if any, incurred by Xinyi Glass would have no bearing or impact on the price at which the goods were exported. Section 9A(1)(b) of the Tariff Act which deals with the definition of 'export price' provides for a construction of an export price where either on account of relationship between exporter and importer or a third party, the export price to India becomes unreliable. The present is a case where the exporter and importer are not related parties and the sale price to the Indian importer represe....
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....ndia, if any. Provide their telephone, fax numbers and E-mail address. State name, address, telephone, fax numbers and Email address of the principal contact person (or representative/legal representative in India or elsewhere for the purpose of Anti-Dumping proceedings)." 52. The question required Xinyi Energy to mention the address of its main corporate office and its office in India. Xinyi Energy claims that as it did not have any office in India, it correctly indicated the address of its Corporate Office in Hong-Kong. The question did not require the exporter to mention the addresses of offices in India of all its related entities. In any case, as noted above, Xinyi Glass did not have an office in India, either during the period of investigation or at the time of filing of the Questionnaire response. The fact that Xinyi Glass, a related company, had applied to the Reserve Bank of India for permission to open a liaison office was not required to be mentioned in response to this question. The response given by Xinyi Energy was, therefore, factually correct. 53. Even otherwise, rule 6(8) has no applicability to the present case, as the designated authority had never ....
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....ould mean that in the event of non-arm's length transactions between related parties, the designated authority would be forced to consider the element of cost for a third country, which is not under examination, for which even verification is not envisaged in the scheme of the 1995 Rules. 58. It would be seen that the amount given by the holding Company is an infusion of capital by the parent Company in the form of advances. The funds for these advances were obtained by the parent Company from the Bank of China (Hong Kong) Ltd. This is a bank based in Hong Kong and incorporated under the Laws of Hong Kong. It is not a bank incorporated in China PR nor is it subject to laws of China PR. 59. The Bank of China (Hong Kong) Ltd. extended the loan for the project company, which has been defined as under in the Loan Agreement: " 'Project Company' means Xinyi Energy Smart (Malaysia) Sdn Bhd (the subsidiaries of the Borrower's group in Malaysia." 60. The purpose of the loan has been described as under: "Loan Purpose: To finance the Borrower's group for capital expenditure in Malaysia (including (i) acquisition and / or expansion of the factories, (ii....
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....y was, therefore, not justified in holding that the cost of the product under consideration was understated to the extent of the impact of interest of such loans and, therefore, was required to be adjusted by imputing notional interest cost. 67. Learned senior counsel for the domestic industry also submitted that even regarding this aspect, false information had been submitted by Xinyi Energy in response to the exporter Questionnaire. 68. It is not possible to accept this contention of learned senior counsel of the domestic industry. 69. Question 8 (j) of Section G is as follows: "j. Explain the basis of interest costs charged for the product concerned. In case the company is a larger group, provide the basis of charging interest." 70. The financial statement did mention about the advances and since these advances were stated to be for future expansion they would not form part of the production cost, which information was sought in section G. The advances received from the holding Company were also shown in the audit reports which had been filed by Xinyi Energy. Xinyi Energy also claims that it had explained this fact to the Costing Team during the des....