2006 (9) TMI 33 - AT - Customs

Anti-dumping duty - Mid term review initiated by designated authority on request letter of importer/exporter and also on his appreciation of situation - Main purpose to get information of import prices and found that same has gone up substantially

Summary

Issues Involved:
1. Calculation of the dumping margin.
2. Verification of raw material costs.
3. Inland freight charges adjustment.
4. Packing cost deduction.
5. Validity of the mid-term review initiation.

Issue-wise Detailed Analysis:

1. Calculation of the Dumping Margin:
The Exporter and Importer challenged the calculation of the dumping margin, arguing that the designated authority erroneously considered non-existent data and did not account for their detailed comments. The authority had increased the normal value of NBR by adding VAT and transportation charges to the raw material cost, which the exporter contended was incorrect. The authority also reduced the export price by deducting inland freight charges and packing costs, which the exporter claimed was unjustified.

2. Verification of Raw Material Costs:
The designated authority had increased the cost of raw material by 10% towards VAT and transportation charges. The exporter argued that the raw material, Acrylonitrile, was transported through pipelines owned by the supplier, and no additional costs were incurred. The invoices showed no VAT payable as payments were made in foreign exchange. The authority's decision to enhance the raw material cost was deemed unwarranted and not in line with the principles of cost calculation.

3. Inland Freight Charges Adjustment:
The authority had calculated the export price by averaging the transportation costs, including domestic transportation, despite the exporter providing specific contracts for export transportation. The majority of exports were made through Ulsan port, which had lower transportation costs compared to Busan port. The authority's method of averaging the costs was found to be incorrect as it did not accurately reflect the actual transportation costs for exports.

4. Packing Cost Deduction:
The authority increased the packing cost deduction from the export price, assuming the goods were packed in wooden pallets instead of paper bags as claimed by the exporter. The export invoices and packing lists indicated that the goods were packed in paper bags. The authority's decision to enhance the packing cost was found to be unjustified as it did not consider the evidence provided by the exporter.

5. Validity of the Mid-term Review Initiation:
The domestic industry argued that the mid-term review was unwarranted and initiated without substantial evidence. The designated authority initiated the review based on an application by the exporter and an appreciation of the overall situation, including increased import prices. The initiation of the mid-term review was found to be valid as it was based on the designated authority's subjective satisfaction and objective data.

Final Order:
The appeals filed by the exporter/importer were allowed, and the anti-dumping duty was reduced from US$ 138.39 to US$ 38.73 per MT. The appeal filed by the domestic industry was dismissed. The Government of India was directed to amend the impugned notification accordingly.