2016 (10) TMI 663 - AT - Customs

Imposition of ADD - 2 Ethyl Hexanon - import from EU, Indonesia, Korea RPI Malaysia, Saudi Arabia, China Taipei and USA - N/N.10/2016-Customs (ADD), dated 28.3.2016 of Ministry of Finance - improper fixation of normal value by the DA - Held that - While determining the normal value, we note that the DA has discarded the sale of subject goods to related party in Indonesia and also sale to third country in China. We note that the related party transaction cannot be considered as sale in ordinary course of trade . The sale being above cost price by itself does not make it sale in ordinary course of trade. Further, China being non-market economy will have impact on the export price to that country also. These factors have been analysed and we do not find any reason to differ with the conclusion of the DA. Error in the data submitted by the exporter - Held that - data submitted by interested parties were considered due analyses was based on verification. If some party post disclosure denied certain data and claims error in earlier analyses, the same is not to be considered. Such course will call for further detailed verification post disclosure. It is neither viable nor admissible in view of time from within which the DA has to operate. Improper analyses of injury - Held that - DI suffered injury due to other factors and not due to dumping of the subject goods. In other words, the shut-down of unit of DI is attributable to the disruption in raw material supply. DA calculated the production capacity utilization of Domestic Industry assuming that there was no shut down in order to isolate plant shut-down as factor of injury. It was recorded that even if raw material supplies were not affected, the DI had reached only 62% of the operation. There is healthy growth in demand. While cost has increased, the prices were suppressed due to presence of significant volume of dumped imports. On this ground also we find no merit in the argument of the appellant. DA concluded the price of DI is significantly depressed because of increasing volume of dumped imports at a price below the cost of production, preventing DI from realising remunerative price to remain in production/ sale. He established causal link between dumping and injury suffered by DI - ADD rightly imposed - appeal disposed off - decided against appellant.

Summary

Issues:
Challenging imposition of anti-dumping duties on subject goods based on improper fixation of normal value and erroneous injury analysis by the Designated Authority.

Analysis:
1. Improper Fixation of Normal Value:
The appellants contested the imposition of anti-dumping (AD) duties on the subject goods, emphasizing two main points. Firstly, they argued that the Designated Authority (DA) did not properly determine the normal value of the subject goods as per Section 9A(1)(c) of the Customs Tariff Act, 1975. They claimed that the sale transaction to a related party in the exporting country should not be discarded as it is in the "Ordinary Course of Trade." Additionally, they pointed out errors in the data in the disclosure statements which were not considered. The DA had discarded the sale of subject goods to a related party in Indonesia and a sale to China, stating that related party transactions cannot be considered as sales in the ordinary course of trade. The DA's analysis considered the impact of China being a non-market economy on export prices, leading to the conclusion that the normal value was correctly determined.

2. Erroneous Injury Analysis:
The appellants and the Domestic Industry (DI) importer argued that the injury to the DI was not properly analyzed by the DA. They highlighted the existence of other factors disrupting the supply of raw materials, causing injury to the DI. The time lag between placing orders and receiving goods was also emphasized, suggesting that the comparison should have considered falling petroleum prices during this lag period. The DA defended its final findings recommending AD duties, stating that related party sales and international sales to China were not in the ordinary course of trade due to various factors. The DA's analysis considered shut-down periods of the DI due to non-supply of raw materials and unremunerative prices attributable to dumped imports. The DA concluded that the DI's prices were suppressed due to dumped imports, leading to injury suffered by the DI.

3. Conclusion:
After hearing all parties and examining the records, the Tribunal upheld the imposition of AD duties on the subject goods. The Tribunal found no reason to differ with the DA's conclusion on the normal value determination and injury analysis. It noted that the DA had correctly analyzed the impact of related party transactions and the non-market economy status of China on export prices. The Tribunal dismissed the appeals, stating that the DA had established a causal link between dumping and the injury suffered by the DI. The miscellaneous application and stay application linked to the main appeals were also disposed of. The judgment was pronounced on 16.09.2016.