2022 (5) TMI 1321 - AT - Customs

Levy of Anti Dumping Duty - likelihood of recurrence of dumping and injury in the event of expiry of duty - modification of Second Sunset Review - likelihood of recurrence of dumping and injury in the event of expiry of duty - Customs Notification No. 44/2021-Customs (ADD) dated 12.08.2021 - HELD THAT - Section 9A of the Tariff Act deals with anti-dumping duty on dumped articles. It provides that if any article is exported by an exporter or producer from any country to India at less than its normal value then upon the importation of such article into India the Central Government may by notification in the Official Gazette impose an anti-dumping duty not exceeding the margin of dumping in relation to such article. Margin of dumping has been defined to mean the difference between the export price and the normal value. The export price means the price of the article exported from the exporting country. Normal value has been defined to mean the comparable prices for the like article when destined for consumption in the exporting country - Sub-section (5) of section 9A of the Tariff Act provides that anti-dumping duty imposed shall unless revoked earlier cease to have effect on the expiry of five years from the date of such imposition. The first proviso stipulates that if the Central Government in a review is of the opinion that the cessation of such duty is likely to lead to continuance or recurrence of dumping and injury it may from time to time extend the period of such imposition for a further period upto five years and such further period shall commence from the date of order of such extension. What also transpires from the final findings is that continued dumping by the subject countries in India has continued despite the imposition of anti-dumping duty. The designated authority while examining the aspect of likelihood of injury recorded a finding that likelihood or recurrence of injury to the domestic industry was not strong enough to warrant continuation of duties beyond 11 years - What was required to be examined by the designated authority was whether withdrawal of anti-dumping duty would lead to continuance or recurrence of dumping as well as injury to the domestic industry. Mere continued levy of anti-dumping duty for 11 years cannot be made a ground to conclude that there is no requirement to continue anti-dumping duty. The applicant had requested for imposition of anti-dumping duty on a narrower scope of the product under consideration and had not made any claim for enlargement of the product under consideration in the sunset review proceedings. It is the prerogative of the domestic industry to make a claim for imposition of duty on the types of product and neither section 9A (5) of the Tariff Act nor rule 23 of the Anti-Dumping Rules bars the designated authority from restricting the scope of the product under consideration in a sunset review. No prejudice can be said to have been caused to the foreign exporters if the product under consideration is restricted in a sunset review and in fact the foreign exporters would benefit if the anti-dumping duty is not levied on the products excluded from the scope of the product under consideration. The inevitable conclusion therefore that follows from the aforesaid discussion is that the designated authority should re-examine whether the cessation of anti-dumping duty would likely lead to continuation or recurrence of injury so as to warrant imposition of anti-dumping duty for a further period of five years. It needs to be noted that the designated authority had recorded a categorical finding that cessation of anti-dumping duty would lead to continuation or recurrence of dumping and even with regard to the injury aspect the designated authority did hold that cessation of anti-dumping duty would lead to continuation or recurrence of injury but it further held that such injury was not strong enough to warrant continuation of anti-dumping duty for a further period of five years. Appeal is allowed to the extent that the designated authority shall re-examine and give a fresh finding as to whether cessation of anti-dumping duty would likely lead to continuation or recurrence of injury so as to warrant imposition of anti-dumping duty for a further period of five years. The final findings dated 30.07.2021 of the designated authority therefore stand modified to this extent.

Issues Involved:
1. Validity of the initiation and conduct of the second sunset review investigation.
2. Legality of altering the scope of the product under consideration in the sunset review.
3. Likelihood of continuation or recurrence of dumping and injury.
4. Relevance of findings by the Competition Commission of India.
5. Consideration of post-investigation period data.

Detailed Analysis:

1. Validity of the Initiation and Conduct of the Second Sunset Review Investigation:
The appeals challenged the initiation of the second sunset review, arguing that anti-dumping duties had lapsed, making the review invalid. However, the Tribunal rejected this argument, noting that the review was initiated based on a duly substantiated application by the Association of Man-Made Fibre Industry of India on behalf of Grasim Industries. The Tribunal emphasized that the association had the standing to file the application and appeal, as it represented the domestic industry.

2. Legality of Altering the Scope of the Product Under Consideration:
Several appeals argued that the designated authority erred by unilaterally altering the product scope during the sunset review. The Tribunal upheld the designated authority's decision, stating that it is within the authority's prerogative to narrow the product scope in a sunset review if requested by the domestic industry. The Tribunal found no prejudice to foreign exporters, as the exclusion of certain products would benefit them by reducing the scope of anti-dumping duties.

3. Likelihood of Continuation or Recurrence of Dumping and Injury:
The Tribunal focused on whether the cessation of anti-dumping duties would likely lead to the continuation or recurrence of dumping and injury. The designated authority concluded that while dumping would likely continue, the injury was not strong enough to warrant extending duties beyond 11 years. The Tribunal found this conclusion flawed, noting that the designated authority failed to consider crucial factors such as third-country export prices, surplus capacities, and the potential for diversion of exports to India. The Tribunal emphasized that the likelihood analysis should include a comprehensive examination of future events based on projected levels of dumped imports, prices, and their impact on domestic producers.

4. Relevance of Findings by the Competition Commission of India:
Respondents argued that the designated authority disregarded findings by the Competition Commission of India (CCI) against the domestic industry. The Tribunal dismissed this argument, stating that the CCI's findings on anti-competitive behavior were not relevant to the anti-dumping investigation. The Tribunal noted that the CCI's investigation covered a different period and that the designated authority's mandate was limited to assessing the likelihood of dumping and injury.

5. Consideration of Post-Investigation Period Data:
One appeal contended that the designated authority failed to consider post-investigation period data. The Tribunal found that the designated authority had, in fact, considered such data in its final findings, as evidenced by paragraph 143 of the final findings.

Conclusion:
The Tribunal allowed Anti-Dumping Appeal No. 51490 of 2021, directing the designated authority to re-examine whether the cessation of anti-dumping duties would likely lead to continuation or recurrence of injury, warranting further imposition of duties for five years. The final findings dated 30.07.2021 were modified to this extent, and the designated authority was instructed to submit fresh findings to the Central Government. All other appeals were dismissed.

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