2020 (2) TMI 642 - AT - Customs

Initiation of anti-dumping investigation - imports of non woven fabric made of polypropylene of GSM 25 or less originating in or exported from Malaysia, Indonesia, Thailand, Saudi Arabia and China PR - Whether the Designated Authority can give final findings contrary to the essential facts stated in the disclosure statement without even apprising the domestic industry? HELD THAT - The foremost requirement is to understand the scope and object of the disclosure statement issued by the Designated Authority in terms of Rule 16 of Anti-Dumping Rules. This Rule mandates that the Designated Authority shall, before giving its findings, inform all interested parties of the essential facts under consideration which form the basis of its decision. In so far as the interpretation of Rule 16 of Anti-Dumping Rules is concerned, the WTO panel and appellate body of WTO decisions relating to interpretation of article 6.9 of the agreement on implementation of article VI of the general agreement on Tariffs and Trade 1994 (ADA) needs to be examined. The said articles 6.9 stipulates that the Authority shall before a final determination is made, inform all interested parties of the essential facts under consideration which form the basis for the decision whether to apply definitive measures as prayed. Additionally article 6.9 also provides that such disclosure should provide sufficient time to the parties to defend their interest. In the Anti-Dumping investigation, since the Designated Authority has to find whether dumping, injury and causal link exist or not, the essential facts underlying the findings and conclusions relating to these elements shall form the basis of the decision under Rule 16 of the Anti-Dumping Rules. These essential facts are required to be disclosed to the domestic industry / interested parties. The word used in the Rule is essential facts under consideration , rather than essential facts that should reasonably be considered . Thus, the sole object of Rule 16 as well as of said article 6.9 is to allow parties to defend their interests. The meaning of word fact in various dictionaries is truth, reality and a thing known for certain to have called or to be true and a thing assumed or alleged as a basis for inference and events or circumstances as distinct from their legal interpretations. Thus, the purpose of disclosure of essential facts under Rule 16, in our opinion, is to provide to the interested parties, the necessary information so as to enable them to comment on the completeness and correctness of the facts being considered by the Investigating Authority / Designated Authority. It includes providing additional information or to correct error and comment on or make arguments as to the proper interpretation of those acts. Thus, the essential facts referred to in Rule 16 are facts significant in the process of reaching a decision as to whether or not to apply definitive measures as well as those that are salient for a contrary outcome. In the instant case, the conclusion arrived at by the Designated Authority in the disclosure statement clearly shows that their exists positive dumping material injury to the domestic industry and also a causal link between the dumped imports and the said material injury. Still the conclusions arrived at by the Designated Authority in the final findings are not only at variance with the disclosure statement but are also contrary to what was stated in the disclosure statement - In the present case, the challenge to the final finding is principally based on the contention that the Designated Authority placed reliance upon certain material and facts for concluding the issue against the appellant, which facts did not form part of the disclosure statement and to which the appellant had no opportunity to deal with. The contention of the Appellant, therefore, has merit. Failure to make available to material on which the decision is based is clearly violation of principles of natural justice. It rather amounts to placing reliance on such data not made known to the party concerned. The matter is remanded to the Designated Authority for Issuing a fresh disclosure with complete details / data / information / methodology which may constitute essential facts under consideration; to afford an opportunity to the interested parties to submit their comments - appeal allowed by way of remand.

Summary

Issues Involved:
1. Validity of the anti-dumping investigation initiation and period of investigation.
2. Adequacy and correctness of the disclosure statement.
3. Contradictions between the disclosure statement and the final findings.
4. Methodology for determining dumping and injury margins.
5. Alleged violation of principles of natural justice.
6. Locus standi of the non-cooperative Malaysian exporter.

Issue-wise Detailed Analysis:

1. Validity of the anti-dumping investigation initiation and period of investigation:
The appellant, a major producer of non-woven fabrics, filed an application on 17 March 2016 for initiating anti-dumping investigation concerning imports from Malaysia, Indonesia, Thailand, Saudi Arabia, and China PR. The Designated Authority initiated the investigation on 15 June 2016, selecting the period from 1 July 2015 to 31 March 2016. The investigation was deemed valid as the appellant constituted a major proportion of the total production in India, satisfying the standing as a domestic industry.

2. Adequacy and correctness of the disclosure statement:
The disclosure statement dated 2 August 2017 indicated positive dumping margins for most exporters and concluded that the domestic industry suffered material injury due to dumped imports. The statement detailed the significant increase in imports, the domestic industry's increased production and sales but continued losses, and the causal link between dumped imports and injury. The disclosure statement was found to be adequate and correct at the time it was issued.

3. Contradictions between the disclosure statement and the final findings:
The final findings dated 2 September 2017 concluded that the dumping margin was de minimis for most exporters, the domestic industry's losses were due to teething problems, and the nine-month period was too short to judge the trend. These conclusions were contrary to the disclosure statement, which had indicated significant dumping margins and material injury. The Designated Authority's final findings were found to be inconsistent with the disclosure statement.

4. Methodology for determining dumping and injury margins:
The Designated Authority acknowledged an inadvertent error in the methodology used in the disclosure statement, which was corrected in the final findings by adopting a Product Control Number (PCN) to PCN comparison. However, this change in methodology was not disclosed to the domestic industry, violating Rule 16 of the Anti-Dumping Rules. The final findings failed to specify the inadvertent error or the corrected methodology, leading to a lack of transparency.

5. Alleged violation of principles of natural justice:
The appellant argued that the Designated Authority relied on facts not disclosed in the disclosure statement, depriving the appellant of an opportunity to respond. The Tribunal agreed, stating that failure to disclose essential facts under consideration violated principles of natural justice. The Supreme Court's decision in Reliance Industries Ltd. vs. Designated Authority emphasized the need for transparency and the right to defend one's interests.

6. Locus standi of the non-cooperative Malaysian exporter:
The non-cooperative Malaysian exporter, whose representation was rejected by the Designated Authority, was allowed to participate in the proceedings as a respondent. The Tribunal noted that Rule 5(2)(c) of CEGAT Procedure Rules 1996 permits any person who submitted representations during the investigation to be joined as a respondent.

Conclusion:
The Tribunal set aside the final findings and the notification issued by the Central Government, directing the Designated Authority to issue a fresh disclosure statement with complete details, afford an opportunity for comments, and provide fresh final findings. The Designated Authority was also given liberty to reconsider the status of the Malaysian exporter. The appeal was allowed, and the matter was remanded for re-evaluation in light of the directions provided.