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2023 (1) TMI 1059
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....rts by Xinyi Energy are concerned by customs 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....
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.... Amount Currency Unit 1 2 3 4 5 6 7 8 9 1. 7005 Clear 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 ....
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....ned in accordance with the rules made under sub-section (6); (c) "normal value", in relation to an article, means - (i) the comparable price, in the ordinary course of trade, for the like article when destined for consumption in the exporting country or territory as determined in accordance with the rules made under subsection (6); or (ii) when there are no sales of the like article in the ordinary course of trade in the domestic market of the exporting country or territory, or 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 rule....
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....investigation to determine the existence, degree and effect of any alleged dumping. 17. The principles governing investigations are contained in Rule 6. Rule 10 provides for determination of normal value, export price and margin of dumping and is reproduced below: "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." 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 ....
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....e following submissions:- (i) The exports of Xinyi Energy to India are not at dumped prices, and the determination of the dumping margin by the designated authority in the final findings is erroneous as it is based on a faulty determination of the normal value and export price. The designated authority committed an error in making a deduction from the export price of Xinyi Energy to India on account of the proposed liaison office of the related company; (ii) The disclosure statement notes that Xinyi Glass (India) Ltd ,[ Xinyi Glass] a company registered in Hong Kong, had applied for opening of a liaison office in India, for which it established a temporary office for 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....
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....exporter to mention the address of its main corporate office and its office in India. As Xinyi Energy 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; (ix) In any case, 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 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 the Xinyi Energy was, therefore, factually 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 ....
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....interest free loans received by Xinyi Energy do not reflect the actual cost associated with the production and sale of the article under consideration and no information regarding the interest rates prevailing in Malaysia was provided by Xinyi Energy to the designated authority during the course of the investigation; and (v) The loan taken by Xinyi Hong Kong from a Bank situated in Hong Kong is not an international transaction, as the loan was taken by an entity situated in Hong Kong from a bank in Hong Kong under the rules and regulation made therein. Moreover, the transfer of loan from Xinyi Hong Kong to Xinyi Malaysia is an inter group transaction, which is not at arm's length. The designated authority, in order to compute the cost of production for the purpose of carrying ordinary course of trade test for 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....
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....ut prices and machinery price from related parties are not a fair price. Moreover, while analyzing the data submitted by the exporters, the Authority has also not found any inconsistency in the prices of the inputs from the related party. In view, thereof, the concerns of the Domestic industry relating to transfer pricing are adequately taken care of. (emphasis supplied) 28. The normal value for Xinyi Energy that was disclosed in the disclosure statement is as follows: "Normal Value for the Appellant 36. It is noted from the response that M/s Xinyi Energy Smart (Malaysia) Sdn. Bhd., Malaysia, during the POI, has sold *** MT of the subject goods having invoice value *** MYR to unrelated customers in the domestic market. It is noted that their domestic sales are in sufficient quantity in the domestic market. Xinyi Energy has provided 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 refer....
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.... normal value. Where profitable transactions are less than 80%, only profitable domestic sales are taken into consideration for the determination of normal value. Based on the ordinary course of trade test, only profit-making domestic sales have been taken for determination of normal value, since the profitable sales were found to be less than 80%. 39. M/s Xinyi Energy Smart (Malaysia) Sdn. Bhd., Malaysia, has claimed adjustments on account of ocean freight, insurance, inland transportation, credit and rebate. Accordingly, weighted average normal value for M/s Xinyi Energy Smart (Malaysia) Sdn. Bhd., Malaysia, has been determined, and the same is mentioned in dumping margin table." (emphasis supplied) 29. The designated authority also disclosed the export price for Xinyi Energy in the disclosure statement and it is as follows: "Export Price for the Appellant 40. 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 c....
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.... that their regional representative, based in Mumbai as Territory Manager in Xinyi Glass Holdings Ltd., to focus on marketing and sales of Xinyi Smart product in the Indian market, shows the level of involvement in the operations relating to sales of the product under consideration in India. In view thereof, the Domestic Industry reiterated its request to reject the claim of individual dumping margin of Xinyi Group. They also requested that the export price of the exporter should be appropriately adjusted to the extent of the expenses incurred by Xinyi Glass Holdings Ltd." 32. The submissions made by the producers/exporters/importers and the other interested parties to the disclosure statement were also noted by the designated authority as follows: "Submissions by producers/exporters/importers and other interested parties 98. It has been submitted that for opening up a Liaison Office local address in India with a local representative is required. To meet 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 loca....
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.... that it was only after the Domestic Industry pointed out the presence of the representative of Xinyi Glass (India) Ltd in the oral hearing as well as the fact that they are involved in the marketing and sales to India that the exporter provided additional information to the Authority to the extent that they only have a temporary office in India. From the submission of the exporter, it is also noted that the Xinyi glass (India) Ltd, are working with temporary office. However, the Authority also notes that the exporter has not provided any evidence/ information to enable the Authority to deduct relevant expenses of their working in India. It is noted that their India office is indeed engaged in soliciting enquiries and marketing on behalf of their parent company Xinyi Glass Holding Ltd for marketing of their group company's products which include subject goods manufactured by Xinyi smart. 105. In view of the above, it was considered appropriate to make appropriate adjustments by deducting ***% 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 Lim....
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....f Xinyi Energy on account of liaison office. 37. It needs to be noted that in the disclosure statement the designated authority noted that Xinyi Glass is a company registered in Hong Kong and it had applied for opening a liaison office in India for which it had established a temporary office for receiving official correspondence. This temporary office was noted in the website in anticipation of the approval to be granted by the Reserve Bank of India. The designated authority accepted the contention of Xinyi Energy that Xinyi Glass was not concerned with the export of the subject goods by Xinyi Energy during the period of investigation and accordingly the designated authority did not make any adjustment to the export price. 38. The contention of the learned counsel for Xinyi Energy is that without any fresh evidence or information the designated authority in the final findings, concluded that Xinyi Glass was involved in the sale and marketing of the subject goods during the period of investigation on behalf of its parent company i.e. Xinyi Glass Holding Limited. In this connection, learned counsel referred to paragraphs 40, 41, 104 and 105 of the final findings of ....
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.... "Prohibition against a branch office or a liaison office or a project office or any other place of business in India No person resident outside India shall without prior approval of the Reserve Bank open in India a branch office or a liaison office or a project office or any other place of business by whatever naive called except as laid down in these Regulations." 42. Thus a, person who is not a resident of India can open a branch office or a liaison office only with the prior approval of the Reserve Bank of India and in accordance with the Regulations. Secondly, the liaison office cannot undertake any commercial/trading/industrial activity directly or indirectly. The domestic industry has not brought on record any evidence to suggest that Xinyi Glass carried out any commercial activity. In this connection, it would be pertinent to reproduce the communication dated 14.08.2020 submitted by Xinyi Energy to the designated authority for clarifying the factual position and it is: "3. In support of our submissions, we are hereby further submitting the following: a) Business License of Xinyi Glass (India) Limited [Exhibit-3], which cle....
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....(emphasis supplied) 43. It is, therefore, clear that Xinyi Energy by the communication dated 14.08.2020 informed the designated authority that the application filed by the Xinyi Glass before the Reserve Bank of India for granting approval to establish a liaison office in India was pending and that Xinyi Glass had not established any business operations in India. In fact, without obtaining the approval Xinyi Glass could not have started its activities. Xinyi Energy also informed that even otherwise liaison office cannot perform any business activity. 44. Learned senior counsel for the domestic industry, however, submitted that the website of the Xinyi Glass mentions India office under the heading 'sales network' and the address, email and the contact number is also provided in the website. This apart, one Mr. Rajesh Singh country head of Xinyi Glass India office attended the hearing before the designated authority on behalf of the exporter. Xinyi Glass is also listed as a supplier of the product under consideration i.e. 'float glass' on Trade India Website. Xinyi Glass is also listed as a supplier of the product under consideration on Just Dial Website. Thus, Ra....
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....on Implementation of Article VI of the General Agreement on Tariffs and Trade, 1994 [GATT] read as follows: "6.8 In cases in which any interested party refuses access to, or otherwise does not provide, necessary information within a reasonable period or significantly impedes the investigation, preliminary and final determinations, affirmative or negative, may be made on the basis of the facts available. The provisions of Annex II shall be observed in the application of this paragraph." 50. Paragraph 6 of Annexure II referred to an article 6.8 is relevant and is as follows: "6. If evidence or information is not accepted, the supplying party should be informed forthwith of the reason therefor, and should have an opportunity to provide further explanation with a reasonable period, due account being taken of the time-limits of the investigation. If the explanations are considered by the authorities as not being satisfactory, the reason for the rejection of such evidence or information should be given in any published determinations." 51. The question in the exporter Questionnaire reads as under: "Q N....
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....hority is about 40 times the total expenses incurred by Xinyi Glass in 2018 and 2019 in their annual report. Loading the Cost of Production 55. The second submission advanced by learned counsel for Xinyi Energy that the designated authority was not justified in making adjustment to the normal value by loading the cost of production. 56. The submission advanced by the learned counsel for Xinyi Energy is that the Xinyi Energy received advances from its parent Company i.e. Xinyi International Investment Ltd., a Company incorporated in Hong Kong and in the Audited Financial Statement for the year ended 31.12.2019 for Xinyi Energy, the advance has been reflected in the current liabilities of the company as an amount due to the immediate holding company. Learned counsel also pointed out that Note 15 to the Statement mentions that the amount due to the immediate holding Company represent advances which are unsecured, interest free and repayable on demand. 57. Learned senior counsel for the domestic industry, however, submitted that the 'elements of costs' referred to in paragraph 1 of Annexure I to the 1995 Rules can only be determined in relation to th....
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....chmark for lending and debt instruments issued in the Asian region. 63. Thus, the interest free advances received from the parent company are for expansion of the production facility and future production activity, and not relatable to the production and export of subject goods to India during the period of investigation. 64. However, even if the advances are to be treated as an interest free loan relatable to the subject goods, then too, the actual interest cost as per the loan agreement should be taken, but the designated authority took the interest cost based on a notional rate of interest prevailing in Malaysia, without rendering any finding as to why the actual interest cost is not acceptable for determining the interest foregone. 65. Learned senior counsel for the domestic industry also submitted that the loan agreement should be discarded because China is not a market company. 66. This submission cannot be accepted for the simple reason that the Bank of China (Hong Kong) Ltd. is incorporated under the Laws of Hong Kong and is not in main land China. Hong Kong has never been treated as a non-market economy and even otherwise, it is no....