TaxTMI 
TaxTMI 
2006 (9) TMI 180
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....te at the market price of the electricity, while regarding electricity drawn from the captive power plant the appellant transfers electricity at the market rate to its PTA unit. 4. The appellant, M/s. Reliance Industries Ltd. filed an application dated 12-10-1998 seeking the imposition of Anti-Dumping Duty on PTA originating in, or exported from Japan, Malaysia, Spain and Taiwan. The Designated Authority (hereinafter referred to as 'the DA') in the Ministry of Commerce initiated investigations on the said application in April 1999. The investigations culminated in the findings of the DA dated 20-4-2000, and on that basis there was imposition by the Central Government of anti-dumping duty on PTA originating or exported from Spain at the rate of Rs. 521 per M.T. vide Customs Notification No. 82/2000 dated 30th May, 2000 of the Department of Revenue. However, no duty was imposed on exports from the other countries. 5. The appellant filed an appeal before the CEGAT under Section 9C of the Customs Tariff Act, 1975 against this Notification seeking enhancement of duty in the case of the exporter from Spain and imposition of duty on exports from the other countries mentioned in their pe....
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....ng the margin of dumping in relation to such article. Explanation. - For the purposes of this section, - (a) "margin of dumping", in relation to an article, means the difference between its export price and its normal value; (b) "export price", in relation to an article, means the price of article exported from the exporting country or territory and in cases where there is no export price or where the export price is unreliable because of association or a compensatory arrangement between the exporter and the importer or a third party, the export price may be constructed on the basis of the price at which the imported articles are first resold to an independent buyer or if the article is not resold to an independent buyer, or not resold in the condition as imported, on such reasonable basis as may be determined 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 meant for consumption in the exporting country or territory as determined in accordance with the rules made under sub-section (6); or (ii) when there are no sales of the like ....
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....iented undertaking", "free trade zone" and "special economic zone" shall have the meaning assigned to them in explanation 2 to sub-section (1) of Section 3 of the Central Excise Act, 1944 (1 of 1944). (3) If the Central Government, in respect of the dumped article under inquiry, is of the opinion that - (i) there is a history of dumping which caused injury or that the importer was, or should have been, aware that the exporter practices dumping and that such dumping would cause injury; and (ii) the injury is caused by massive dumping of an article imported in a relatively short time which in the light of the timing and the volume of imported article dumped and other circumstances is likely to seriously undermine the remedial effect of the anti-dumping duty liable to be levied, the Central Government may, by notification in the Official Gazette, levy anti-dumping duty retrospectively from a date prior to the date of imposition of anti-dumping duty under sub-section (2) but not beyond ninety days from the date of notification under that sub-section, and notwithstanding anything contained in any law for the time being in force, such duty shall be payable at such rate and from such....
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....ry little industrialization in India. 10. After India became independent in 1947, the Government of Independent India headed by Prime Minister Jawahar Lal Nehru decided to industrialize India as it was realized that the country cannot escape from poverty, unemployment and other social evils unless there is industrialization. It was also known to them that a country cannot be really independent in modern times unless it is industrialized. Hence, the Industrial Policy Resolution was adopted by the Indian Government in the early 1950s and encouragement was given to the growth of heavy industry and other industries so that India may become economically independent and a prosperous nation. 11. The result was that an industrial base was created in India after independence and this has definitely resulted in some progress. The purpose of Section 9A can, therefore, easily be seen. The purpose was that our industries which had been built up after independence with great difficulties must not be allowed to be destroyed by unfair competition of some foreign companies. Dumping is a well known method of unfair competition which is adopted by the foreign companies. This is done by selling good....
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....nd the fair selling (notional) price of the domestic manufacturer, which is usually called the Non-Injurious Price (for short 'NIP'). The NIP is determined by the DA on the basis of cost of production (less interest), Selling General and Administrative Expenses (SG&A), and a fixed rate of return on the capital employed of the domestic industry. 17. Anti-dumping duty can legally be levied up to the full extent of margin of dumping [Section 9A(1)] but in practice is restricted to the margin of injury if the injury is lower than the margin of dumping vide Section 9B(l)(b)(ii) and Rule 18(1). Section 9B(1) states : "(1) Notwithstanding anything contained in Section 9 or section 9A, - (a) …………….. (b) the Central Government shall not levy any countervailing duty or anti-dumping duty - (i) ……………... (ii) under sub-section (1) of each of these sections, on the import into India or any article from a member country of the World Trade Organization or from a country with whom Government of India has a most favoured nation agreement (hereinafter referred as a specified country), unless in accordance with the rules made under sub-section (2) of this section, a determin....
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....India or materially retards the establishment of any industry in India. (2) The designated authority shall determine the injury to domestic industry, threat of injury to domestic industry, material retardation to establishment of domestic industry a causal link between dumped imports and injury, taking into account all relevant facts, including the volume of dumped imports their effect or price in the domestic market for like articles and the consequent effect of such imports on domestic producers of such articles and in accordance with the principles set out in Annexure-II to these rules. (3) The designated authority may, in exceptional cases, give a finding as to the existence of injury everywhere a substantial portion of the domestic industry is not injured, if - (i) there is a concentration of dumped imports into an isolated market, and (ii) the dumped articles are causing injury to the producers of all or almost all of the production within such market." 20. In the present case, the DA in his findings dated 20-4-2000 has found that there is dumping by the manufacturers from Japan, Malaysia and Spain. The margins of dumping for manufacturers from Japan was between 29% to 3....
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....submitted that the appellant used the market rate of electricity for determining the cost of production of PTA, but the DA was of the view that instead of taking the market price of electricity for determining the NIP of PTA, the appellant should have taken the actual cost of electricity produced in its captive power plant. 26. In our opinion, the DA has clearly erred in law because the Authority was required to carry out the determination of injury and computation of NIP for the domestic industry as a whole, and not in respect of any particular company or enterprise. The above is apparent from the definition of "domestic industry" under Rule 2(b) of the Anti-dumping Rules. Rule 2(b) states : "2(b) "domestic industry" means the domestic producers as a whole engaged in the manufacture of the like article and any activity connected therewith or those whose collective output of the said article constitutes a major proportion of the total domestic production of that article except when such producers are related to the exporters or importers of the alleged dumped article or are themselves importers thereof in which case such producers shall be deemed not to form part of domestic indu....
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....ual cost of the input is seen for individual units it will differ between units captively producing their inputs and those buying it from the market. This is clearly untenable. 31. In the present case, the DA has recorded a finding that the normal value is exporter specific. In our opinion this is contrary to the Supreme Court judgment in Designated Authority (Anti-dumping Directorate v. Haldor Topsoe A/S., 2000 (6) SCC 626. In page 635 of the said judgment, this Court observed : "With respect, we are unable to accept this finding of the Tribunal. From a careful reading of Section 9A of the Tariff Act and Rule 6 of the Rules, it is clear that the statute has nowhere put such a restriction on the investigating authority. On the contrary, a perusal of the said provisions clearly shows that the "normal value" will have to be determined with reference to comparable price, the words "comparable price" in the context can only be with reference to the price of similar articles sold under similar circumstances irrespective of the manufacturer. By holding anti-dumping duty to be export-specific, the Tribunal could not have restricted the scope of the investigation only to materials to be ....
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....rpose of apportionment of fixed costs. On the contrary, it was revealed during the hearing that the DA computes the NIP on the basis of the best capacity utilization achieved in the preceding three years. In fact, there is no established practice of the DA in this regard, and the level of capacity utilization taken into account by the DA varies from case to case leading to total arbitrariness and unguided use of power. In our opinion, there is no basis to adopt the best capacity utilization achieved in the past period as the industry is generally bound to achieve higher capacity utilization if it is not affected by injurious dumping. The apportionment of the fixed costs has to be necessarily done on the basis of actual production during the period of investigation and not an assumed level of capacity utilization to avoid all arbitrariness. Thus, in our opinion, the DA's approach is clearly incorrect inasmuch as it is not the determination of optimum capacity utilization of the domestic industry, but the actual capacity utilization which would be the correct approach. Even as a matter of principle the use of capacity or capacity utilization level in computing the cost of production ....
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....tion of the DA and the Government notification on its basis is subject to an appeal before the CESTAT. This also makes it clear that the proceedings before the DA are quasi-judicial. 39. In the present case, the NIP computed by the DA was much lower than that computed by the appellant, and the reasons for such variance and detailed calculations were not disclosed by the DA to the appellant. No good reasons were given for reducing the cost price of electricity supplied by the appellant produced in its captive power plant. This was clearly illegal. 40. The DA claimed confidentiality from the appellant about its finding on the data supplied by the appellant itself. In our opinion, there was nothing confidential in the matter, and hence reasons for not accepting the appellant's version should have been stated in the order of the DA. 41. Learned counsel for the respondent has relied on Rule 7 of the Customs Tariff (Identification, Assessment and Collection of Anti-dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995, which states as under : "7. Confidential informations. - (1) Notwithstanding anything contained in sub-rules (2), (3) and (7) of Rule 6, sub-rul....
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....f (Identification, Assessment and Collection of Anti-Dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995 the Designated Authority is treating all material submitted to it as confidential merely on a party asking that it be treated confidential. In our view, that is not the purport of Rule 7. Under Rule 7, the Designated Authority has to be satisfied as to the confidentiality of that material. Even if the material is confidential the Designated Authority has to ask the parties providing information, on confidential basis, to furnish a non-confidential summary thereof. If such a statement is not being furnished then that party should submit to the Designated Authority a statement of reasons why summarization is not possible. In any event, under Rule 7(3) the Designated Authority can come to the conclusion that confidentiality is not warranted and it may, in certain cases, disregard that information. It must be remembered that not making relevant material available to the other side affects the other side, as they get handicapped in filing an effective appeal. Therefore, confidentiality under Rule 7 is not something, which must be automatically assumed. Of cou....