2016 (10) TMI 471 - AT - Customs

Imposition of Anti-Dumping Duty - Phenol - imported from South Africa - sunset review - mid term review - Notification No. 32/2015-Cus ADD dated 10.7.2015 - principles of natural justice - is injury caused to the DI due to import of subject goods? - closure of a manufacturing unit HOCL during post POI - violation of Rule 23 of AD Rules - return on investment - Held that - the DA determined the export price in respect of import from South Africa on the basis of best available information in accordance with Rule 6(8) of AD Rules. Dumping margin has been arrived at 40 - 50%. The DA has taken note of Rule 11 of AD Rules read with Annexure -Il while determining the injury to Domestic Industry. Volume of import during injury investigation grew by 70%. Demand grew by 33% . On the price effect the DA has noted that there is undercutting of price from the subject country with or without anti-dumping duty. The landed value of the subject goods from subject country is lowest compared to other countries. Performance of HOCL - they were operating at full capacity in 2010-11 and thereafter the production as well as sales declined. The lack of working capital was given as reason. This was attributed to the reason that dumping import affected realization of fair selling price in the domestic market. The injury margin has been calculated as per norms by the DA. There is no violation of Rule 23 in the present case - Hon ble Delhi High Court in Fairdeal Polychem LLP vs. UOI 2016 (1) TMI 287 - DELHI HIGH COURT held that Rule 23(2) of AD Rules has to be harmonized with Article 11.4 of WTO Agreement. On application of first proviso to Rule 17(1) with necessary changes period of 12 months can be further extended by Central Government in its discretion. As such no infirmity found in the investigation by the DA. Return on investment for the DI - 22% taken as per long standing practice in terms of agreed norms. ADD rightly imposed - appeal rejected - decided against appellant.

Summary

Issues:
Challenge to imposition of anti-dumping duty on imports of Phenol from South Africa.

Analysis:
The appeal challenged the final findings and Notification imposing anti-dumping (AD) duty on imports of Phenol from South Africa. The AD duty was recommended in 2003, with subsequent reviews and continuations. The present appeal arose from a sunset review initiated in 2013, where two Indian manufacturers alleged dumping continuation and requested AD duty enhancement. The Designated Authority (DA) recommended continuation of AD duty after following the prescribed procedure under the Customs Tariff (Identification, Assessment and Collection of Anti Dumping Duty on Dumped Articles) Rules, 1995.

The appellants contended that only two Indian units manufactured the subject goods, with one closing post-Period of Investigation (POI), a factor allegedly not examined by the DA. They argued a violation of Rule 23 of the AD Rules due to the review not completing within 12 months of initiation. Additionally, they challenged the consideration of a 22% return on investment for one of the Indian manufacturers.

The Domestic Industry (DI) countered that the appellant did not provide detailed questionnaire responses or supporting evidence, thus lacking standing as an "interested party." The DI argued against the appellant's participation in the investigation post-questionnaire filing.

The DA highlighted HOCL's operational challenges due to dumping effects, affecting plant capacity utilization. They defended the imposition of AD duty based on injury suffered by the DI.

The Tribunal considered submissions from all parties, noting the appellant's claim of no injury to the DI and HOCL's specific challenges. The DA's determination of export price, dumping margin, and injury to the DI was analyzed, finding no infirmity in the investigation process. The Tribunal upheld the 22% return on investment norm and rejected the appeal, affirming the imposition of AD duty on Phenol imports from South Africa.

In conclusion, the Tribunal found no merit in the appeal, upholding the DA's findings and the imposition of anti-dumping duty on the subject goods.