2010 (4) TMI 389 - AT - Customs

Anti Dumping duty- Sunset review- Government whether empowered to increase or decrease anti dumping duty while continuing levy after sunset review. Continuance of anti-dumping duty while continuing levy after sunset review. Continuance of anti-dumping duty imposed earlier on likelihood determination required under section 9A(5) of Custom Tariff Act, 1975 and increase or decrease duty level may be needed to eliminate current or likely injury. Government when empowered to continue levy also has incidental and ancillary power to increase or reduce the same to make it fully effective against dumping. Held that- good and sufficient reason indicated in finding if anti-dumping duty is varied on sunset review. In the light of detailed findings, hold that the appeal filed by the Appellant exporter has no merit and hence, the same is dismissed.

Issues Involved:
1. Inclusion of acrylic tows and acrylic tops within the scope of the product under consideration.
2. Inclusion of M/s. Vardhaman Acrylic Ltd. and M/s. Pasupathi Acrylon Ltd. in the "Domestic Industry."
3. Determination of the dumping margin and alleged unfair comparison.
4. Quantum of anti-dumping duty exceeding the dumping margin.
5. Causal link and likelihood of dumping and injury analysis.
6. Scope and methodology of sunset review under Section 9A(5) of CTA.

Detailed Analysis:

1. Inclusion of Acrylic Tows and Acrylic Tops:
The appellant argued that the Designated Authority (D.A.) wrongly included acrylic tows and acrylic tops within the scope of the product under consideration. The domestic industry countered by asserting that "Acrylic Fibre" includes all forms of Acrylic Fibre, namely, Acrylic Staple Fibre, Acrylic Tow, and Acrylic Top. The Tribunal upheld the inclusion, referencing the case of Oswal Woollen Mills Ltd. v. D.A., which held that a reference to Acrylic Fibre in the Anti-Dumping Notification means all forms of Acrylic Fibre. The Tribunal also noted that the anti-dumping notification did not specify any particular heading under Chapter 55, thus covering all forms of Acrylic Fibre.

2. Inclusion of M/s. Vardhaman Acrylic Ltd. and M/s. Pasupathi Acrylon Ltd.:
The appellant contended that these companies should not be included in the "Domestic Industry" due to their significant imports of the impugned goods. The domestic industry argued that the imports were insignificant compared to their production and sales and were made under advance license exclusively for the manufacture of export products, hence not entering the Indian market. The Tribunal found merit in this argument and upheld their inclusion in the domestic industry.

3. Determination of Dumping Margin:
The appellant claimed unfair comparison in determining the dumping margin due to non-adjustment for guarantee commission, incorrect daily exchange rates, and calculational errors. The domestic industry and the D.A. argued that the methodology used was justified and in line with the requirements of a sunset review, which focuses on the likelihood of recurrence of dumping or injury rather than the exact current dumping margin. The Tribunal supported the D.A.'s methodology, noting that the focus of a sunset review is on the likelihood of future dumping and injury, not on current dumping margins.

4. Quantum of Anti-Dumping Duty:
The appellant argued that the anti-dumping duty levied exceeded the dumping margin. The domestic industry and the D.A. contended that in a sunset review, the focus is on the likelihood of recurrence of dumping and injury, and the duty need not be limited to the dumping margin determined in the initial investigation. The Tribunal agreed, stating that the anti-dumping duty can be varied to eliminate current or likely injury, and there is no requirement under Section 9A(5) to limit the duty to the current dumping margin.

5. Causal Link and Likelihood of Dumping and Injury Analysis:
The appellant argued that no causal link was established in the second sunset review and that the analysis was not based on relevant facts or objective data. The domestic industry and the D.A. maintained that a causal link analysis is not required in a sunset review, as supported by WTO Appellate Body decisions. The Tribunal upheld this view, noting that sunset reviews focus on the likelihood of future dumping and injury, not on establishing a current causal link.

6. Scope and Methodology of Sunset Review:
The Tribunal discussed the scope of sunset reviews, noting that they are prospective in nature and focus on the likelihood of continuation or recurrence of dumping and injury. The Tribunal referenced various legal provisions and WTO guidelines, concluding that the D.A. is not required to determine dumping margin and injury in the same manner as in the initial investigation for a sunset review. The Tribunal also affirmed that the government has the power to vary the anti-dumping duty while continuing it after a sunset review, provided there is a good and sufficient reason indicated in the D.A.'s findings.

Conclusion:
The Tribunal dismissed the appeal, upholding the D.A.'s final findings and the Ministry of Finance's notification. The Tribunal found no merit in the appellant's arguments and supported the inclusion of all forms of Acrylic Fibre, the methodology used in determining the dumping margin, the inclusion of M/s. Vardhaman Acrylic Ltd. and M/s. Pasupathi Acrylon Ltd. in the domestic industry, and the continuation of the anti-dumping duty based on the likelihood of future dumping and injury.

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