2007 (8) TMI 512 - AT - Customs

Summary

Issues Involved:
1. Legitimacy of the new shipper review initiation.
2. Compliance with Rule 22 of the Customs Tariff (Identification, Assessment, and Collection of Anti-dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995.
3. Determination of normal value and export price.
4. Relationship between new shippers and existing exporters/producers.
5. Confidentiality claims by the new shippers.
6. Applicability of anti-dumping duties based on the new shipper review findings.

Issue-wise Detailed Analysis:

1. Legitimacy of the new shipper review initiation:
The appellant challenged the initiation of the new shipper review, arguing that the applicants (HWC, FLC, and ET) did not meet the necessary preconditions. The domestic industry contended that ET, through whom exports were made, came into existence only on 25-8-2004, after requesting the review on 24-7-2004. Additionally, HWC did not provide adequate information to prove its production since March 2003, and no contract or order placement details were furnished between the producer, trader, and exporter. The Tribunal found that the initiation of the review was contrary to Rule 22 as the applicants had neither produced nor exported the subject goods before applying for the review, making them ineligible for the new shipper review.

2. Compliance with Rule 22:
Rule 22 stipulates that new shippers must not be related to any exporters or producers subject to anti-dumping duties and must not have exported the product during the original investigation period. The Tribunal noted that the applicants did not meet these requirements, as they were not producing or exporting the subject goods before the application for the new shipper review. Additionally, the review period was improperly fixed after the initiation of the review, which distorted the purpose of the anti-dumping duty imposition. The Tribunal emphasized that the review should cover production and exports during the period preceding the review initiation.

3. Determination of normal value and export price:
The domestic industry argued that the normal value should be based on the prevailing domestic price in UAE, not China PR, as the goods were exported through UAE. The Tribunal clarified that since the goods were exported directly from China PR to India, the normal value should be based on the cost of production in China PR. The designated authority correctly constructed the normal value considering the cost of production in China PR, as the goods were shipped directly from China PR to India.

4. Relationship between new shippers and existing exporters/producers:
The appellant contended that the new shippers should demonstrate they are not related to any exporters or producers subject to anti-dumping duties. The Tribunal adopted the reasoning from a previous case, HR Johnson (I) Ltd. v. Designated Authority, stating that the relationship should be judged in the context of exporters who exported during the original investigation period. The Tribunal held that the relationship issue becomes meaningless if considered in the context of all exporters, irrespective of whether they exported during the initial period of investigation.

5. Confidentiality claims by the new shippers:
The domestic industry raised objections regarding excessive confidentiality claims by the new shippers. The designated authority examined the information claimed confidential and was satisfied with the claims, placing non-confidential summaries in the public file for inspection. The Tribunal did not find any fault with the designated authority's handling of confidentiality claims.

6. Applicability of anti-dumping duties based on the new shipper review findings:
The designated authority found that the new shipper had exported the subject goods above its normal value, resulting in a negative dumping margin. Consequently, it recommended no anti-dumping duty on imports of the subject goods produced by HWC and exported by Lungo through ET. However, the Tribunal declared the review proceedings illegal and non est, vitiating the final findings and the impugned notification. The Tribunal set aside the impugned notification and final findings, allowing the appeal.

Conclusion:
The Tribunal found that the initiation of the new shipper review was contrary to Rule 22, as the applicants did not meet the necessary preconditions. The review proceedings were declared illegal, and the impugned notification and final findings were set aside. The appeal was allowed, emphasizing the importance of adhering to the provisions of Rule 22 and ensuring the legitimacy of new shipper reviews.