TaxTMI 
TaxTMI 
TaxTMI 
2023 (6) TMI 15
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....entral Government imposing anti-dumping duty on 'certain flat rolled products of aluminium' [the subject goods] from China PR. The second relief that has been claimed is to grant exclusion to higher width Lithograde Aluminium coils above 1150 mm width, which are not commercially manufactured and supplied by the domestic industry i.e., Hindalco Industries Ltd. [Hindalco] 2. During the hearing of the appeal, Shri V. Lakshmikumaran, learned counsel for the appellant assisted by Shri Devinder Bagia, Shri Ankur Sharma, Shri Jayant Raghu Ram and Shri Ashutosh Arvind Kumar, restricted his submissions to the second prayer. 3. It transpires from the records that Hindalco Industries Limited, which has been impleaded as respondent no. 3 in this appeal, had filed an application before the designated authority on behalf of the domestic industry under the provisions of the Customs Tariff Act, 1975 [the Tariff Act] and the Customs Tariff (Identification, Assessment and Collection of Anti-dumping Duty on Dumped Articles and Determination of Injury) Rules, 1995 [the 1995 Rules] for initiation of anti-dumping investigation on the imports of certain flat rolled products of aluminium originating in ....
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....ic industry have remained largely stable in the period of investigation while the capacity utilization remains suboptimal. It is noted that the market share of domestic industry has declined by 12% in the period of investigation whereas market share of the imports from the subject country has increased by 35%. The performance of the domestic industry has significantly deteriorated in respect of profits, cash profits and return on capital employed. The domestic industry has suffered financial losses, cash losses and negative return on investments in the period of investigation. c) The material injury suffered by the domestic industry has been caused by the dumped imports. M. RECOMMENDATION 128. The Authority notes that the investigation was initiated and notified to all the interested parties and adequate opportunity was given to the domestic industry, the exporters, the importers and the other interested parties to provide information on the aspects of the dumping, the injury and the causal link. Having initiated and conducted the investigation into dumping, injury and causal link in terms of the provisions laid down under the Rules, the Authority is of the view that imposit....
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....is also the sole user of lithograde aluminium coils in India. Hindalco is the only Indian manufacturer of certain lithograde aluminium coils. The appellant claims that it buys the entire production of Hindalco of lower width lithograde aluminium coils but even at full capacity, Hindalco is unable to fulfil the demand of the appellant for lithograde aluminium coils below 1150 mm as during the period of investigation, the appellant had a demand more than 16,000 MT of lower width lithograde aluminium coils, out of which only around 10,000 MT were supplied by Hindalco. Thus, the appellant has to fulfil this demand of lower width lithograde aluminium coils by importing the remaining quantities. 7. The appellant further claims that for lithograde aluminium coils above 1150 mm width, Hindalco is unable to supply any commercial quantities to the appellant. Out of the total demand of such lithograde aluminium coils above 1150 mm, which was close to 10,000 MT during the period of investigation, Hindalco manufactured some trial quantities and could supply only around 2% of the total demand of appellant during the period of investigation but most of such higher width coils supplied by Hindalc....
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.... as follows: "C.2 Submissions made by the other interested parties 6. The following are the submission made by the other interested parties with regard to the product under consideration and like article: a to c ***** d. Exclusion requests: Following exclusions have been requested by the opposing interested parties: ***** i to xv ***** Lithograde Aluminium Cois above 1150 mm width xvi. Aluminium offset printing plates are manufactured from high purity litho-grade aluminium coils which is the crucial and principal raw material for its manufacturing. Litho-grade aluminium coils, which has been made a part of the current PUC, are a special grade of aluminium coils made from alloy of aluminium and lithium. xvii. TechNova requires litho-grade Aluminium coils of certain higher width ranges which goes up to 1600 mm which the domestic industry does not manufacture. The domestic industry is not commercially capable of supplying litho-grade aluminium coils beyond 1150 mm. Consequently, users have no other option but to import Lithograde aluminium coils beyond 1150 mm width into India. xviii. During the POI and 2020-21, 95%-100% of the Lithograde aluminium coils beyond w....
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.... & uses, product specifications, distribution & marketing and tariff classification of the goods. 28. Interested parties have argued that the supply of these coils by domestic industry had been on a trial basis out of which many of them failed to produce the desired quality standards required and were liable to be rejected. 29. The Authority notes that if the government has prescribed certain standards of a product and the product supplied by the domestic industry conforms to such standards, the consumers cannot contend that the product type produced by the domestic industry does not meet the desired standards. It is also noted that nothing substantial has been provided by the interested parties to demonstrate the difference in the quality of the product supplied by the domestic industry and imported into India. 30. Therefore, the Authority holds not to exclude such a product from the scope of PUC." 12. On the basis of the comments submitted by the interested parties to the disclosure statement, the designated authority recorded the following final findings with regard the product under consideration: "I.3 Examination by the Authority 123. The analysis and the decision ....
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....um coils; (iii) The cheap dumped imports of lithograde aluminium coils from China PR have cannibalized the potential sales that can be realized by the domestic industry from the appellant which is the sole customer; (iv) If certain grades of the product under consideration are exempted on the basis that they cannot cater to the entire demand/requirement of that particular grade in India and cheap dumped imports at unfair prices are allowed to continue as they did before the imposition of anti-dumping duty through the customs notification, the domestic industry would never be able increase capacity with respect to such grades; (v) A supply demand gap cannot be the basis for not levying anti-dumping duty; (vi) Grant of exclusion to lithograde aluminium coils above 1150 mm will lead to circumvention of anti-dumping duty imposed on coils less than 1150 mm since for example 1400 mm coil can be rotated and cut into aluminium sheets of 700 mm to manufacture the Aluminium offset printing plates; and (vii) The contentions of the appellant regarding quality are misconceived, quality concerns cannot be a ground for exclusion of any particular grade/product type from the scope of the....
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....oduct from imposition of anti-dumping duty. 21. The issue of demand-supply gap would arise only if Hindalco was commercially producing and supplying lithograde aluminium coils above 1150 mm. This demand as supply gap may make sense for lithograde aluminium coils below 1150 mm because Hindalco was commercially producing the same even though it could not meet the entire demand of the appellant. 22. It needs to be noted that the Manual of Standard Operating Practices for Trade Remedy Investigations issued by the Directorate General of Trade Remedies, Department of Commerce, Government of India provides in Article 3.10 that provides that product under consideration should include only those items which are manufactured by the domestic industry. In fact, the product under consideration should preferably include those items, which are produced and commercially sold in the domestic market by the domestic industry. The relevant portions are as follows: "3.10. The PUC is defined to include those items only, which are manufactured by the DI. Mere competence without any production or merchant sales may not be sufficient to include an item in the definition of the PUC. Similarly, if an ite....
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....rds and thus, the issue of failing the testing requirements cannot be raised by the appellant. The designated authority has not made any specific reference to the BIS Standard that the product satisfies and neither the learned counsel for the Hindalco placed any particular standard, particularly when learned counsel for the appellant had specifically stated that there are no BIS Standard covering this product. 26. Learned counsel for Hindalco also submitted that giving exclusion to wider width coils will lead to circumvention of anti-dumping duty imposed on the coils of less than 1150 mm width. The contention is that since the coils are of several hundred feet in length, the appellant can cut the lower width coil taking the length as the breadth of the newly cut part and use it as wider width coil to manufacture wider width plates. This has been described by Hindalco in the following manner: 27. Elaborating this, learned counsel for Hindalco stated that coil of width 1400mm can be rotated, its length now taken as width, and be cut into aluminium sheets of 700mm to manufacture the aluminium offset printing plates, thus circumventing the duty. 28. Learned counsel for the appellant....
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....stomer required sizes. Packaging The Plates are collected from Conveyor Belt, wrapped in black polyethylene paper, boxed in a foldover & identified by label. Conditioning The plates are subjected to conditioning process. Post final inspection; the plates are released for dispatch to customer. 29. Learned counsel for the appellant also submitted that in the manufacturing of aluminium offset printing plates, the grain direction and rolling direction play an important role. The hot rolling and cold rolling process which is undertaken by Hindalco at its factory to produce the lithographich coils introduces a strong directional alignment in aluminium in the form of rolling lines and this directional alignment is called as 'grain direction'. 30. At its plant, the appellant subjects the lithographic coils to the 'electro-chemical graining' process for conversion into offset printing plates. Electro-chemical graining is a process by which the surface of the coil is evenly roughened to improve the adhesion of the coating layer to the coils which improves the water/ink balance of the printing by the printers through exposure and developing. Technically the electro graining can only b....