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2020 (7) TMI 487 - AT - CustomsLevy of Anti-Dumping Duty - import of Ductile Iron Pipes, DI Pipes originating in or exported from China PR - initiation of a sunset review investigation for continuation of ADD - likelihood of dumping injury - HELD THAT - The Designated Authority has recommended that continuation of Anti-Dumping Duty on import of DI pipes from the subject country namely, China PR is no longer required. The Anti-Dumping Duty on the product under consideration namely, DI pipes has been levied since 14 September, 2007 vide Customs Notification dated 14 September, 2007. The appellant is before us as the Anti-Dumping Duty has not been continued after 9 October, 2018 on the expiry of the period mentioned in the Notification dated 10 October, 2013. It is appropriate to mention that levy of Anti-Dumping Duty on any goods is primarily to protect the domestic industry from unfair trade practices adopted by the foreign exporters who resort to export of goods at highly reduced prices with an intent to dump the goods in the domestic market so as to capture the major share of domestic demand resulting in causing grave economic injury to the domestic industry. The provisions of Customs Tariff Act, 1975 as well as rules framed thereunder are in consonance with the guidelines of World Trade Organisation. These guidelines ensure that in case there is any attempt to dump goods, the domestic industry is insulated from injury which may be caused by unscrupulous exporters. It had been established by the Designated Authority that there was dumping by the exporter which had resulted in injury to the domestic industry in the past and, therefore, they initiated detailed investigation and concluded in the year 2007 vide their Final Findings notified vide Notification dated 23 August, 2007 that there was dumping of subject goods namely, DI pipes from China PR, and accordingly, Anti-Dumping Duty on the subject goods imported from China PR was imposed by the notification in September, 2007 - It is also a matter of record that the Designated Authority considered it necessary to continue with the Anti-Dumping Duty in the first sunset review which took place in September, 2013 and accordingly the levy of Anti-Dumping Duty on subject goods was continued. Thus, it is apparent that in case of sunset review, the authority has to only see whether the cessation of Anti-Dumping Duty on the subject goods would lead to continuation or recurrence of dumping and injury to the domestic industry. It is obvious that the injury margin is likely to be positive in no uncertain terms if the Anti-Dumping Duty is not extended. The price undercutting would also be positive. In such a situation, withdrawal of Anti-Dumping Duty will certainly enable the manufacturers and exporters of the subject goods from China to freely dump the subject goods to the detriment of the Domestic Industry. Non-disclosure of dumping margin to the appellant by claiming shelter of Rule 7 is not justified and violates the principles of natural justice - it is convincing that if Anti-Dumping Duty on the import of DI pipes from China PR is not continued, it may result in likelihood of dumping of subject goods i.e. DI pipes in the Domestic market. The Anti-Dumping Duty on the subject goods namely, D.I. pipes needs to continue after the expiry of the period covered by the first sunset review - matter remanded to the Designated Authority for a limited purpose for re-determining the quantum of Anti-Dumping Duty, if so considered necessary, for the remaining period of five years - the Final Findings of the Designated Authority is set aside - appeal allowed.
Issues Involved:
1. Continuation of Anti-Dumping Duty on Ductile Iron Pipes (DI Pipes) from China PR. 2. Methodology for determining normal value and export price. 3. Likelihood of dumping and injury to the domestic industry. 4. Confidentiality of data and non-disclosure of dumping margin. 5. Examination of economic parameters and surplus capacities in China. Detailed Analysis: 1. Continuation of Anti-Dumping Duty on DI Pipes from China PR: The appellant, engaged in the manufacture of DI Pipes, sought the continuation of Anti-Dumping Duty under Rule 23(1B) of the Anti-Dumping Rules, 1995, which was initially imposed in 2007 and extended in 2013. The Designated Authority, however, concluded on 01 April 2019 that the continuation of the existing anti-dumping duties was not warranted, leading to the appellant's appeal against this decision. 2. Methodology for Determining Normal Value and Export Price: The appellant argued that the Designated Authority's methodology for calculating the normal value and export price was inconsistent and non-transparent compared to the first sunset review. The Authority had relied on constructed normal values due to non-cooperation from Chinese exporters. However, the methodology was not disclosed to the petitioner, which was a point of contention. 3. Likelihood of Dumping and Injury to the Domestic Industry: The appellant provided evidence of significant price undercutting and dumping margins in Chinese exports to countries like Sri Lanka, Turkey, and Vietnam. The Designated Authority, however, did not adequately consider these submissions. The Tribunal found that the Authority failed to analyze the likelihood of dumping and injury scientifically, noting that the domestic industry's economic parameters had improved due to the anti-dumping duty, and the cessation of such duty would likely lead to resumed dumping and injury. 4. Confidentiality of Data and Non-Disclosure of Dumping Margin: The Designated Authority's claim of confidentiality under Rule 7 of the Anti-Dumping Duty Rules was found unjustified. The Supreme Court in Reliance Industries vs. Union of India clarified that confidentiality claims should be made by the parties providing the information, not the Authority itself. The non-disclosure of the dumping margin to the appellant was deemed a violation of natural justice. 5. Examination of Economic Parameters and Surplus Capacities in China: The Tribunal noted that the Designated Authority did not properly consider the appellant's submissions regarding surplus capacities in China and their potential impact on the Indian market. The data showed that Chinese capacities were significantly higher than Indian demand and production, indicating a high likelihood of dumping if the anti-dumping duty was removed. Conclusion: The Tribunal set aside the Final Findings of the Designated Authority, directing the continuation of the Anti-Dumping Duty on DI Pipes from China PR. The matter was remanded to the Designated Authority for re-determining the quantum of the duty, if necessary, within two months. The current anti-dumping duty rate would continue until the new determination. Order Pronounced: The appeal was allowed to the extent indicated, with the order pronounced on 14th July 2020.
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