2016 (10) TMI 470 - AT - Customs

Quantification of ADD - carbon black used in rubber applications - import from China PR, Russia and Thailand - sunset review - Customs Notification No. 54/2015 - CUS (ADD) dated 18/11/15 - whether the DA should have arrived NIP on actual cost data submitted by DI instead of constructed costing based on best utilization of raw material/utilities by the DI? - was the best utilization principle to fix price correct? - Held that - India is following lesser duty rule for fixing anti dumping duty. Article 9 of the Agreement on Anti Dumping specifically provides that the amount of anti dumping duty should not exceed the margin of dumping under Article 9.3 and recommends imposition of lesser duty, if such lesser duty would be adequate to remove the injury to the Domestic Industry. The principles laid down in Annexure III for cost of production categorically state best utilization of raw material/utilities/production capacities are to be considered. The reason is mentioned in the said principles. This is to nullify injury, if any, caused to DI due to inefficiency. It is not necessary for the DA to specifically identify such inefficiencies while constructing cost in normal situation, and the cost construction has to be followed in terms of the principles laid down under para 4 of Annexure III. Wherever there is identified other causes which are causing injury to the DI, apart from dumping of subject goods, the cost construction has to be arrived at after applying the normation principle. The DA is bound by the principles laid down in the said Annexure as it is part of the statutory provisions of AD Rules, 1995. When the DA is following the statutory principles, the same cannot be faulted on the ground of perceived grievance. No specific empirical data has been pleaded by the appellant to challenge the correctness of cost construction by the DA. Rather, the challenge is on the principles laid down in Annexure III - no reason to interfere with the findings of the DA - appeal dismissed - quantification justified - decided against appellant.

Issues:
1. Calculation of Non-Injuries Price (NIP) for Domestic Industry (DI) in the context of Anti-Dumping Duty.
2. Interpretation of Annexure III to Anti-Dumping Rules, 1995 regarding the determination of NIP.
3. Application of best utilization principles for raw materials, utilities, and production capacities in cost construction for fixing anti-dumping duty.
4. Compliance with statutory provisions in the imposition of anti-dumping duties.
5. Justification for following best utilization principle in fixing prices to nullify injury to the Domestic Industry.

Detailed Analysis:

1. Calculation of Non-Injuries Price (NIP):
The appeal challenged the quantification of anti-dumping duties imposed on the import of carbon black used in rubber applications. The appellant argued that the method adopted by the Designated Authority (DA) to construct NIP based on best utilization of raw materials, utilities, and production capacities was incorrect. The appellant contended that the cost construction should be based on actual production costs unless there is a finding of inefficient utilization of resources by the Domestic Industry (DI).

2. Interpretation of Annexure III to Anti-Dumping Rules, 1995:
The DA and the Revenue supported the findings of the DA, emphasizing the statutory provisions outlined in Annexure III of the Anti-Dumping Rules, 1995. The DA argued that the principles of determining NIP, including best utilization of raw materials, utilities, and production capacities, are legally binding and must be adopted. The respondent representing the importer and user of subject goods supported the DA's calculation of NIP based on best utilization principles.

3. Application of Best Utilization Principles in Cost Construction:
The Tribunal noted that the principles laid down in Annexure III of the Anti-Dumping Rules, 1995 require the consideration of best utilization of resources to nullify any injury caused to the DI due to inefficiencies. The Tribunal highlighted that the DA is bound by these statutory principles and must follow them in determining NIP. It was emphasized that the principles aim to ensure fair competition and protect the interests of consumers of subject goods in India.

4. Compliance with Statutory Provisions:
The Tribunal reiterated that the DA is obligated to adhere to the principles laid down in Annexure III as part of the statutory provisions of the Anti-Dumping Rules, 1995. It emphasized that while the appellant can contest NIP with supporting evidence, the DA's adherence to statutory principles cannot be faulted based on perceived grievances. The Tribunal stressed the importance of following these principles for maintaining fair competition and consumer protection.

5. Justification for Following Best Utilization Principle:
The Tribunal concluded that in the absence of identified factors causing injury to the DI apart from dumping of subject goods, the best utilization principle for cost construction must be followed. It noted that the DA is required to consider best utilization of resources to nullify any injury to the DI due to inefficiencies. The Tribunal found no reason to interfere with the DA's findings, as the appellant did not provide specific empirical data to challenge the cost construction, and the challenge was based on the principles laid down in Annexure III.

In conclusion, the Tribunal dismissed the appeal and disposed of the matter, emphasizing the importance of following statutory provisions and principles for determining NIP in anti-dumping cases to ensure fair competition and protect the interests of the Domestic Industry and consumers.

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