2006 (4) TMI 274 - AT - Customs

Anti-dumping duty - Sunset review - material injury test - discontinuation of anti-dumping duty on graphite electrodes (U.H.P.) exported to India from the subject countries and withdrawal of duty on graphite electrodes (N.P.G.) originating in and exported from China - Notification No. 101/2003-Cus. and Notification No. 102/2003-Cus. giving effect to the recommendation of the Designated Authority - HELD THAT - It is clear from the records, that the claim of the Domestic Industry that Designated Authority has not examined the parameters for sunset review which are different from material injury test, is not correct. The D.A. has taken into consideration the tests which are required to be applied u/s 9A(5) of the Customs Tariff Act. The Designated Authority has interpreted various factors meaningfully and their effect on likely injury in future. Thus, the Designated Authority has taken into consideration the possible threat to the domestic industry and resultant injury that may be caused to them on account of discontinuation of anti-dumping duty. We find that it has been argued by the Domestic Industry that the Designated Authority has given adjustment of 20% on account of quality difference without further examination of their quality during the period of investigation for review. While determining the normal value, the Designated Authority has considered that consumption of China electrodes is higher by 20% and therefore, the landed value of import is required to be increased by 20% or alternatively, cost of production is required to be reduced by 20% while comparing the domestic industry prices for determining the injury. We find that in the disclosure statement dated 27-12-2002, the D.A. has notified that electrodes of China s exporters continued to be inferior as was admitted by the Indian Producer at the time of oral hearing. Due to inferior quality, the consumption of China s electrodes is higher by 20% as compared with the electrodes produced by the Domestic Industry. The Authority has acknowledged this in the original investigation also. In response to this, no rebuttal was given by the Domestic Industry and Panchmahal Steel on whose letter now the appellants are placing reliance has only stated that they have not experienced any technical problem. The letter is silent on consumption pattern. On the other hand, M/s. Arihant Sinotech Corp. has stated that Chinese electrodes are inferior in quality and their consumption is 20% higher. Therefore, we find that in the absence of any evidence contrary to what was disclosed to the domestic industry in the disclosure statement, the Designated Authority has correctly given adjustment in the export price to the electrodes from China s exporters for determination of ex-factory price. The decisions relied upon by the domestic industry in the case of Automotive Tyre Manufacturers Association v. Designated Authority and D.S.M. Idemitsu Limited v. Designated Authority (Supra) are not relevant on the issue as these decisions are in respect of determination of like articles where quality does not make a difference in determining whether products are like articles or not. These decisions are not relevant for determination of ex-factory price where adjustment has been given in value due to inferior quality. We find that it is also challenged that u/s 9A(5) of the Customs Tariff Act, the Designated Authority can recommend cessation or continuation of the anti-dumping duty which was originally imposed. In case of U.C.A.R., since they were exporting only U.H.P. electrodes, therefore, even if they have not participated in the sunset review, the finding of the Designated Authority that there have been import of U.H.P. electrodes at a price higher than non-injurious price, the withdrawal of anti-dumping duty on U.H.P. graphite electrodes is also correctly applicable on U.C.A.R. also. Similar decision is mentionied in the E.C. Anti-Dumping Law - A Commentary on Regulation 384/96 by Dr. Wolf-Gang Meller, D.G.-I, E.C., Nicholas Kaan, Barrister, Legal Service, E.C. and Dr. Hans-Adolf Neumann, Director D.G.-I, E.C., 1998 Edition, where in the review proceedings, concerning silicon carbide from China, Norway, Poland, Russia ad Ukraine, were considered and Norwegian exporters did not co-operate but evidence available indicated that the Norwegian product was mostly present in the high quality market segment, where higher prices prevailed. It appeared unlikely that the expiry of the undertakings previously in force would lead to an imminent recurrence of dumped imports and injury resulting therefrom. The opposite conclusion was reached with regard to exporters in China, Poland, Russia and Ukraine, which significantly undercut prices charged by the Community. Therefore D.A. has correctly recommended the withdrawal of anti-dumping duty on imports of U.H.P. electrodes. Thus, we do not find merit in the appeal and the appeal is, accordingly, rejected.

Summary

Issues Involved:
1. Examination of parameters for sunset review.
2. Adjustment of 20% on account of quality difference.
3. Authority of Designated Authority to modify the quantum of duty.
4. Accuracy of information provided by exporters.
5. Separate duties for new exporters not involved in the original investigation.
6. Participation of U.C.A.R. in the sunset review.

Issue-wise Detailed Analysis:

1. Examination of parameters for sunset review:
The domestic industry argued that the Designated Authority (D.A.) failed to examine the parameters of sunset review, which differ from the material injury test. The D.A. should have focused on the likelihood of continuation or recurrence of dumping and injury, as per Section 9A(5) of the Customs Tariff Act and Article 11.3 of the WTO Agreement. The Tribunal found that the D.A. correctly examined various factors, including the change in production patterns, prices in exporting countries, and international markets. The D.A. concluded that the cessation of anti-dumping duty on U.H.P. graphite electrodes would not lead to continuation or recurrence of dumping and injury, as the landed value was higher than the non-injurious price.

2. Adjustment of 20% on account of quality difference:
The domestic industry contended that the D.A. failed to re-examine the quality difference of 20% during the review period. The D.A. had previously acknowledged that Chinese electrodes were inferior, leading to higher consumption. The Tribunal upheld the D.A.'s decision, noting that the domestic industry did not provide contrary evidence to challenge the 20% adjustment disclosed in the statement. The Tribunal found the adjustment justified based on the evidence provided.

3. Authority of Designated Authority to modify the quantum of duty:
The domestic industry argued that under Section 9A(5), the D.A. could only recommend continuation or cessation of duty, not modify its quantum. The Tribunal disagreed, stating that the D.A. could recommend an anti-dumping duty different from the original duty imposed, as long as it did not exceed the margin of dumping. The D.A. correctly recommended a duty of $234.54 per MT for Tianjin Jinghai Carbon Plant and Liaoning Jiayi Metals and Minerals Co. Ltd., which was legally valid.

4. Accuracy of information provided by exporters:
The domestic industry challenged the accuracy of information provided by M/s. S.G.L. Carbon regarding their prices. The Tribunal found this plea unacceptable, as the prices were disclosed to all interested parties, and no objections were raised. The D.A. was satisfied with the accuracy of the prices based on the information available and the lack of contrary evidence.

5. Separate duties for new exporters not involved in the original investigation:
The domestic industry argued against the recommendation of separate duties for new exporters from China not involved in the original investigation. The Tribunal found no bar against new exporters participating in the review proceedings and getting anti-dumping duty fixed based on their records. The D.A. correctly recommended separate duties for these new exporters.

6. Participation of U.C.A.R. in the sunset review:
The domestic industry argued that U.C.A.R.'s non-participation should have led to different findings. The Tribunal noted that U.C.A.R. was exporting only U.H.P. electrodes, and the D.A. found that imports of U.H.P. electrodes were at prices higher than the non-injurious price. The D.A. correctly recommended the withdrawal of anti-dumping duty on U.H.P. graphite electrodes, including those from U.C.A.R., based on the evidence available.

Conclusion:
The Tribunal upheld the D.A.'s findings and recommendations, rejecting the appeal by the domestic industry. The D.A. had correctly examined the relevant factors, justified the quality adjustment, had the authority to modify the duty, verified the accuracy of the information, and appropriately recommended duties for new exporters and the withdrawal of duty on U.H.P. electrodes. The appeal was dismissed, and the judgment was pronounced in the open court on 13-4-2006.