2019 (6) TMI 864 - AT - Customs

Anti-Dumping duty - enhancement of Non Injurious Price determined in the sunset review - imports of Sodium Nitrite originating in or exported from China PR - Section 9A of Customs Act - HELD THAT - The anti-dumping duty on sodium nitrite was first imposed by a notification dated 19 December 2000 issued by the Ministry of Finance. The imposition of duty was reviewed from time to time and the second sunset review final finding recommending continued imposition of the anti-dumping duty on sodium nitrite was notified by a notification dated 17 August 2011. Before the expiry of period of five years for which the anti-dumping duty was continued, the Appellant moved an application for initiating another sunset review for extension of the anti-dumping duty on imports of sodium nitrite. Finding that there was sufficient evidence submitted by the Appellant to justify initiation of a sunset review investigation, the designated authority issued a public notice. The period of investigation for the purpose of review and investigation was April 2015 to March 2016. A perusal of the section 9A of the Act indicates if any article is exported from any country to India at less than its normal value, then upon the importation of such article into India the Central Government can impose an anti-dumping duty not exceeding the margin of dumping. 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. Determination of non-injurious price (NIP) - Principles of natural justice - HELD THAT - The principles of natural justice not only require the designated authority to grant an opportunity to the party to show cause but the order passed by the designated authority should also give reasons for arriving at conclusions and any violation of these two facets can vitiate the order. In the present case, neither was any information supplied to the Appellant in the disclosure statement nor do the final findings give any reason. The final findings of the designated authority notified in the Government Gazette dated 19 July 2017 in regard to the determination of NIP, therefore, cannot be sustained and are set aside - matter is remitted to the designated authority to re-determine the NIP, keeping in mind the observations made in this Order. Appeal allowed by way of remand.

Summary

Issues Involved:
1. Determination of Non-Injurious Price (NIP).
2. Apportionment of common expenses.
3. Compliance with principles of natural justice.
4. Validity of the methodology adopted by the designated authority.
5. Adequacy of anti-dumping duty imposed.

Issue-wise Detailed Analysis:

1. Determination of Non-Injurious Price (NIP):
The appellant argued that the NIP determined in the sunset review of anti-dumping duty on imports of Sodium Nitrite from China PR should be enhanced. The appellant contended that the NIP was not determined in accordance with the principles set out in Annexure III to the "Customs Tariff (Identification, Assessment and Collection of Anti-Dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995." The designated authority determined the NIP on a 'turnover' basis instead of a 'production quantity' basis, which the appellant claimed resulted in a lower injury margin and inadequate duty to address the injurious effect of dumping.

2. Apportionment of Common Expenses:
The appellant's main grievance was regarding the apportionment of common expenses. The appellant's plant produced multiple products, and common expenses were allocated based on production volume. The designated authority, however, apportioned common expenses on a 'sales value' basis without providing reasons for not accepting the 'production quantity' basis. The appellant argued that the 'production quantity' basis was reasonable, scientific, and consistently applied by domestic producers.

3. Compliance with Principles of Natural Justice:
The appellant contended that the designated authority did not provide reasons for adopting a different methodology for apportioning common expenses. The Supreme Court's decision in Mohinder Singh Gill and Another Vs. Chief Election Commissioner, New Delhi was cited, emphasizing that an order must be judged by the reasons mentioned in it and cannot be supplemented by fresh reasons during the appeal. The lack of reasons in the final findings violated the principles of natural justice, as the appellant was not informed of the basis for the decision.

4. Validity of the Methodology Adopted by the Designated Authority:
The designated authority's methodology for determining NIP was challenged. The appellant argued that the methodology should be based on 'production quantity' as it was reasonable and consistently applied. The designated authority, however, used 'sales value' as the basis without providing reasons. The Supreme Court in Reliance Industries Ltd. Vs. Designated Authority and others emphasized that the designated authority's proceedings are quasi-judicial and must provide reasons for its findings. The absence of reasons for changing the methodology rendered the final findings unsustainable.

5. Adequacy of Anti-Dumping Duty Imposed:
The appellant claimed that the incorrect determination of NIP resulted in a lower injury margin, leading to inadequate anti-dumping duty. The Supreme Court in Reliance Industries Ltd. highlighted that the purpose of anti-dumping duty is to redress injury and prevent material retardation of the domestic industry. The designated authority's failure to determine the correct NIP affected the adequacy of the duty imposed. The Tribunal set aside the final findings and remitted the matter to the designated authority to re-determine the NIP, keeping in mind the observations made in the order. The existing duty would continue until a fresh notification was issued by the Ministry of Finance.

Conclusion:
The Tribunal allowed the appeal to the extent indicated, setting aside the final findings regarding NIP determination and remitting the matter to the designated authority for re-determination. The imposition of duty in the notification dated 25 August 2017 would continue until a fresh notification was issued.