2002 (10) TMI 305 - AT - Customs

Summary

Issues Involved:
1. Challenge to the final finding and notification imposing anti-dumping duty.
2. Deviation in the quantum of anti-dumping duty between preliminary and final findings.
3. Treatment of China as a non-market economy country.
4. Validity of data and investigation regarding the third respondent's cost of production.

Detailed Analysis:

1. Challenge to the Final Finding and Notification Imposing Anti-Dumping Duty:
The appellant, M/s. Universal Chemicals & Industries Ltd., challenged the final finding of the Designated Authority and the subsequent notification by the Ministry of Finance, Department of Revenue, which imposed anti-dumping duty on imports of Potassium Permanganate from China, Hong Kong, and Taiwan. The appellant sought anti-dumping duty to be levied and collected at $610 PMT as determined in the preliminary finding rather than the reduced amounts in the final finding.

2. Deviation in the Quantum of Anti-Dumping Duty:
The preliminary finding recommended anti-dumping duties of $610 PMT for all producers/exporters from China, $600 PMT from Hong Kong, and $620 PMT from Taiwan. However, the final finding significantly reduced these amounts, recommending $64 PMT for M/s. Yunnan Province Jianshui County Chemical Industry Factory and $440 PMT for other Chinese producers/exporters. The appellant contended that the reduction in duty for the third respondent was unjustified and inconsistent with the treatment of other producers/exporters from China.

3. Treatment of China as a Non-Market Economy Country:
The appellant argued that China should be treated as a non-market economy country, referencing Notification No. 44/99 and subsequent Notification No. 28/01-NT. According to these notifications, normal value for non-market economy countries should not be based on domestic cost of production but rather on prices or constructed values from market economy third countries. The appellant contended that the Designated Authority failed to apply these principles correctly and did not adequately consider whether the third respondent operated under market conditions.

4. Validity of Data and Investigation Regarding the Third Respondent's Cost of Production:
The Designated Authority treated the third respondent as cooperative based on their belated response to the questionnaire and conducted an investigation at their factory. However, the appellant argued that the data provided by the third respondent was for the financial year 1999, not the investigation period of 1-4-99 to 31-3-2000. The data was based on assumed costs rather than actual costs, undermining its reliability. The verification report indicated that the data was not on an actual basis and was insufficient for a meaningful investigation. Consequently, the Designated Authority should have rejected the third respondent's data and treated them as a non-cooperating exporter, applying the same duty rate as other Chinese exporters.

Conclusion:
The Tribunal found that the Designated Authority's reliance on the third respondent's data, which was not based on actual costs and was insufficiently verified, rendered the findings regarding normal value, dumping margin, and anti-dumping duty unreliable. The Tribunal ordered that the third respondent be treated as a non-cooperating exporter and that anti-dumping duty be imposed at the same rate as other Chinese exporters, amending Notification No. 113/2001-Cus. accordingly. The appeal was ordered in favor of the appellant, modifying the duty imposition to $440 PMT for all producers/exporters from China.