AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2026 (5) TMI 23
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.... Rx Lab Private Limited, Kolkata And Delta Lens (P) Ltd., M/s. Yash Optics & Lens Pvt. Ltd., Mumbai And Rayban Sun Optical India Pvt. Ltd., Gurugram And Lenstech Opticals Pvt. Ltd., Maharashtra And Techtran Polylenses Limited, Telangana And Daejeon Daemyung Optical (Hangzhou) Co. Ltd., Hangzhou And Conant Optics (Jiangsu) Co. Ltd., Shanghai Conant Optics Co., Ltd., Zhejiang Weixing Optical Co. Ltd., Shanghai Weixing Optical Technology Co., Ltd., Carl Zeiss, China PR And M/s Indian Optics Pvt. Ltd., Central Delhi Shri V. Lakshmikumaran, Shri Darpan Bhuyan, Ms. Pareesha Gupta, Shri Yashovarham Singh, Advocates for the Appellant Shri Ameet Singh, Shri Manav Bharti and Shri Anuvrat Bhatnagar, Advocates for Directorate General of Trade Remedies Ms. Reena Asthana Khair and Ms. Shreya Dahiya, Advocates for the Domestic Industry Shri Nikhil Mohan Goyal, Authorized Representative for the Central Government ORDER JUSTICE DILIP GUPTA: Essilorluxottica Asia Pacific Pte Ltd. [the appellant] (formerly known as Essilor Amera Pte Ltd.) has filed Anti-Dumping Appeal No. 53193 of 2023 to assail the final findings dated 29.09.2022 issued by the designated authority to the extent ....
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....gin can be determined for Essilor group." (emphasis supplied) 4. The designated authority also held that there were three related entities within Essilor Group in China PR, namely, Jiangsu Wanxin Optical Co. Ltd., Jiangsu Creasky Opticals Co. Ltd., and Jiangsu Governor Dragon Opticals Co. Ltd. but this fact was not disclosed to the designated authority. The designated authority, therefore, observed: "99. Thus, Essilor Group did not provide necessary information to the Authority in the questionnaire response and the Authority had to obtain relevant information from Annual reports, web research and information available in public domain. In anti-dumping investigations, it is necessary that names of are related parties engaged in production of subject goods in the subject country are provided to the Authority so that Authority can examine independently which of these related parties are engaged in production and or export of subject goods to India the investigation. 100. When the fact regarding non-disclosure of other related entities engaged in production/sales of subject goods was brought to the notice of Essilor Group, they accepted that Jiangsu Creaksy Opti....
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.... (i) The designated authority has wrongly treated Essilor Group as non-cooperative and has imposed anti-dumping duties despite the fact that the exports prices of Essilor Group were non-injuries to the domestic industry. The Non-Injurious Price [NIP] of the domestic industry which was disclosed was Rs. 72 per piece whereas the overall landed import price of Essilor Group as per the verified figures by the designated authority was Rs. 161.83 per piece. Had Essilor Group been considered as cooperative, it would have resulted in negative dumping and injury margin to Essilor Group and as such nil rate of anti-dumping duty would have been imposed; (ii) The designated authority has considered irrelevant facts to draw an adverse inference under rule 6(8) of the 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 treated Essilor Group as non-cooperative; (iii) Existence of the Pledge Agreement is an irrelevant fact to determine relationship because a pledge does not vest any legal or operational control on a pledgee. Even otherwise, the Pledge Agreem....
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....ing and export behavior; (iv) The appellant failed to provide any cogent commercial justification as to why it would purchase subject goods from an allegedly "unrelated" entity (Danyang ILT) at a higher price, only to resell them at a loss to its own subsidiary; (v) As the appellant refused to provide the Annual Reports of Danyang ILT, the designated authority was prevented from fully examining the terms, conditions and true nature of this relationship and thus, it determined the fact regarding relationship between Danyang ILT and Essilor Group based on evidence available before it; (vi) The appellant is not correct in asserting that it was not required to disclose details regarding Jiangsu Wanxin Optical Co. Ltd., Jiangsu Creasky Opticals Co. Ltd., and Jiangsu Governor Dragon Opticals Co. Ltd. because related entities allegedly did not export the subject goods to India during the period of investigation; (vii) The questionnaire does not grant the appellant the liberty to unilaterally decide which related producers are "relevant" and withhold the rest. The disclosure of all related producers is an absolute necessity in anti-dumping proceedings to....
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....ssive) type with different refractive indexes, segment styles and sizes." The following types of products are excluded from the scope of product under consideration: (i) Semi-finished ophthalmic lenses having refractive index higher than 1.60. (ii) ***** (iii) ***** (iv) ***** (v) *****" (emphasis supplied) 10. The reasons given by the designated authority for treating the Essilor Group as non-cooperative shall be considered separately. DANYANG - treated as a related party 11. It transpires from the record that Essilor Group sold the shares of Danyang ILT to Danyang Shoushi Glasses Co., Ltd. [DYSS] which were pledged to Essilor Group through a Pledge Agreement dated 13.07.2018 which was registered on 16.11.2018. This was to secure repayment of loans amounting to RMB 28,500,000 it had rendered to Danyang ILT prior to 2018 when they were related parties. A perusal of the Pledge Agreement shows that it does not constitute control or ownership, either direct or indirect, of Essilor Group over Danyang ILT since it explicitly provides sole ownership of the pledged equity to DYSS only. 12. The designated authority took n....
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....hus clear that a pledge is the delivery or goods by the pledgor to the pledgee by way of security upon a contract that they shall when the debt is paid or the promise is performed, be returned or otherwise disposed of according to the directions of the pledgor. A pledge would, therefore, create an estate which vests in the pledgee, which is distinguishable from ownership since an owner owns (a) the right of possession (b) the right of enjoyment and (c) the right of disposition. But a pledgee does not have the right of ownership though he has the rights of a pledgee which include only the right of possession but not the fight of enjoyment. A pledgee has the right of disposition which is limited to disposition of pledgee fights only and of a sale only after notice and subject to certain limitations as is dear from the various provisions of the Indian Contract Act. The distinction between pledge and ownership assumes importance when we consider the difference between pledge and mortgage. I am dealing with it later on." (emphasis supplied) 17. The judgment of the Andhra Pradesh High Court was upheld by the Supreme Court in PTC India Financial S....
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.... contention of the learned counsel for the designated authority that as the appellant had initially suppressed the Equity Pledge Agreement, the Essilor Group could not claim cooperative status. 19. It has, therefore, to be held that the existence of pledge between DYSS and Essilor did not result in any ownership rights in favour of Essilor Group and neither did it confer any control of Essilor group over Danyang ILT. 20. It is also seen that based on the publicly available data on China National Enterprise Credit Information Publicity System and Qichacha, the designated authority acknowledged the fact of sale of stake of Essilor Group in Danyang ILT as of November, 2018 and that 100% of the shareholding now resides with DYSS. It cannot, therefore, be said that Essilor Group and Danyang ILT were related parties in terms of rule 2(2) of the 2007 Valuation Rules. 21. Trade Notice No. 09/2018 read with rule 2(2) of the 2007 Valuation Rules and Note to rule 2(b) of the 1995 Rules clarifies the definition of "related" in Anti-Dumping Investigation Questionnaires. The existence of control, either legal or operational, by Essilor Group in Danyang ILT is a pre-requisite to ascertai....
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.... 1995 Rules. 25. The designated authority could not have compelled performance of an impossible task to seek production of a document not within the possession and control of Essilor Group. An adverse inference could have been drawn only if Essilor Group was in possession of or in a position to provide the Annual reports of Danyang ILT. 26. In this connection, reference can be made to the judgment of the Supreme Court in State of Madhya Pradesh vs. Narmada Bachao Andolan & Anr. [(2011) 7 SCC 639] It was held that where the performance of formalities prescribed by a statute is impossible because of circumstances over which the interested person has no control, the same is a valid excuse. Whether information relating to Danyang ILT and the three entities within the Essilor Group in China PR were irrelevant for the purpose of determination of dumping margin for Essilor Group. 27. The next issue that arises for consideration is whether information relating to Danyang ILT, Jiangsu Wanxin Optical Co. Ltd., Jiangsu Creasky Opticals Co. Ltd., and Jiangsu Governor Dragon Opticals Co. Ltd. was irrelevant for the purpose of determining dumping margin for Essilor Group. 28. At t....
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....uction under consideration when exported from the exporting country of origin along with reasonable addition for administrative, selling and general costs, and for profits. 35. For a non-market economy country, however, the normal value for producers is determined in terms of paragraph 7 of Annexure I to the 1995 Rules. Paragraph 7 provides that in case of imports from non-market economy countries, normal value shall be determined on the basis of either (i) price or constructed value in a third country; or (ii) the price from such country to other countries; or (iii) when it cannot be determined by the previous two methodologies, any other reasonable basis. 36. In the present case, as the Essilor Group is based in a non-market economy country, namely, China and has not claimed market economy status, the designated authority determined the normal value on the basis of the cost of production of the domestic industry along with reasonable adding of selling, general and reasonable profit margin. 37. Such construction of Normal Value for a non-market economy country does not require any information to be submitted in connection with non-exportin....
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.... extent of dumping. 43. Essilor Group producers and related intermediaries had filed information relating to all exports of the subject goods made by the Essilor Group to India. 44. Therefore, complete information with respect to the Normal Value and Export Price was available with the designated authority in order to calculate individual dumping margin for the Essilor Group. The nonparticipation of Danyang ILT (un-related producer) or Jiangsu Wanxin Optical Co. Ltd., Jiangsu Creasky Opticals Co. Ltd., and Jiangsu Governor Dragon Opticals Co. Ltd. (related parties not exporting product under consideration to India) is, therefore, of no consequence and can be considered as irrelevant for the purposes of determining the dumping margin of product under consideration produced and exported by Essilor Group. 45. The exporting producers within the Essilor Group and related entities forming the supply chain under the Essilor Group did cooperate and submitted questionnaire responses to enable Essilor Group to be granted an individual dumping margin and rate of anti-dumping duty. The Essilor Group had provided all the relevant information with respect to the related party. 46. Th....