2005 (8) TMI 411 - AT - Customs

Summary

Issues Involved:
1. Exclusion of exports from European Union and Thailand from the levy of anti-dumping duty.
2. Determination of causal link between dumped imports and injury to domestic industry.
3. Methodology for injury analysis and causal link determination.

Issue-wise Detailed Analysis:

1. Exclusion of Exports from European Union and Thailand:
The appellant, a manufacturer of Poly Iso Butylene in India, filed a petition alleging that the product was being dumped into India from several countries, causing injury to the domestic industry. The Designated Authority (DA) concluded that dumping was occurring and recommended anti-dumping duties, but excluded exports from the European Union and Thailand. The appellant challenged this exclusion. During the hearing, the appellant gave up the plea against Thailand due to lack of specific evidence, so the focus remained on the European Union.

2. Determination of Causal Link:
The DA's Final Finding stated that the average landed value of exports from the European Union and Thailand during the Period of Investigation was higher than the Non-Injurious Price (NIP) for the domestic industry, thus no causal link was established between these exports and the injury. The appellant contended that this analysis was erroneous, arguing that only imports below the NIP should be considered to determine the cause of injury. The appellant emphasized that the DA's method contradicted the "Principles for Determination of Injury" in Annexure-II of the Customs Tariff Rules, 1995, which require considering the effect of dumped imports on domestic prices.

3. Methodology for Injury Analysis and Causal Link Determination:
The appellant argued that the DA's reliance on average prices was flawed, as averages do not accurately reflect the impact of imports at different price levels. The appellant highlighted that very low-priced imports significantly affected domestic prices and should be the focus of the causal link analysis. The appellant also pointed out that the DA had previously acknowledged severe price undercutting due to dumped imports, which should have been considered in the causal link analysis.

The Counsels for the DA and the Interested Party (Importer) contended that the analysis should consider the overall effect of all dumped imports, not just low-priced ones. They argued that focusing solely on low-priced imports would lead to an invariable finding of injury in all cases. They also referenced a WTO Panel decision, which supported analyzing the effect of dumped imports as a whole.

Findings and Conclusion:
The Tribunal noted that the DA had accepted that imports from the European Union were at dumped prices and that the injury finding was based on the cumulative effect of all dumped imports. The Tribunal found that the DA's reliance on average prices in a volatile market situation was unreliable. It emphasized that the exclusion of the European Union was not justified, as significant quantities of low-priced imports from this region could not be ignored.

The Tribunal concluded that the DA's methodology for injury analysis and causal link determination was flawed and that the exclusion of imports from the European Union was incorrect. The Customs Notification No. 123/2002 should be modified to impose anti-dumping duty on imports of Poly Iso Butylene from the European Union.

Order:
The appeal was allowed, and it was ordered that the Customs Notification No. 123/2002 be modified to include anti-dumping duty on imports from the European Union.