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TMI Blog2014 (1) TMI 383X X X X Extracts X X X X X X X X Extracts X X X X ..... r which he initiated investigation on 7.9.206 against subject countries although the application for initiation of investigation was against US, EU, Singapore, Chinese Taipei and South Africa as well as South Korea. The Authority considered that the data provided by the domestic industry was for a period of nine months and that was inadequate to investigate into various aspects of the exports as per standard practice since POI normally comprises a period of twelve months. None of the findings of the DA appears to be without evidence or legal basis. Therefore, it is not possible to impeach the findings in absence of cogent evidence to the contrary brought to our notice by the appellant - when investigation against export from subject country was initiated, the exporters of all those countries were equally treated having their export above de minimus level. But exports from South Korea were below the de minimus level. That made the basis unequal, calling for separate treatment by a separate Notification and investigation. That was rightly done by DA following the basic principle that equals are equally treated. Therefore, the term ‘simultaneous investigation’ is to be read in the con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e injury was caused by the dumped imports from subject countries; 3. During currency of levy of definitive antidumping duty by the customs notification aforesaid, sunset review has also been initiated. 4.1. Hindustan Organic Chemicals Ltd. Mumbai and M/s Schenectady Herdiallia Ltd. Mumbai (Renamed as SI Group Ltd.) constituting domestic industry, producing 100% of total production of Acetone in India, made an application dated 27.02.2006 to the Designated Authority alleging dumping of subject goods originating in or exported from subject countries including South Korea. The said authority observing that the data provided by Domestic Industry related to a period of nine months and that was inadequate for conducting investigation, issued deficiency letters to the domestic industry to respond to the same for consideration. 4.2. In response to the deficiency letter, the domestic industry expressed difficulty in procuring import data as well as stated that dumping of subject goods from subject countries including from South Korea aggravated from October 2005. Prima facie, noticing that there was dumping of subject goods and injury was caused by such dumping, the DA took steps for ini ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d on the preliminary findings, provisional antidumping duty was levied by the Ministry of Finance by Customs Notification No. 77/2007-Cus dated 19/06/2007. 5. Subsequent to levy of provisional antidumping duty, detailed investigation was carried out by the DA. He considered the data/information of the following exporters from the subject countries to determine the dumping and dumping margin as well as to make injury analysis and noted submission of M/s Dow Chemicals to treat it as interested party even though that producer did not export subject goods during POI. 1. M/s Formosa Chemicals & Fibre Corporation, Taiwan 2. M/s Sasol Solvents, South Africa 3. M/s Taiwan Prosperity Chemicals Corporation, Taiwan 4. M/s Mitsui & Co. Ltd., Singapore 5. M/s Sumitomo Corporation, Singapore and M/s Petrochem Middle East, UAE. 6. The data/information of the following importers were used by DA to cross check the information provided by above exporters and outcome thereof was considered to arrive at the final findings :- 1. M/s National Organic Chemical Industries Ltd., Mumbai 2. M/s Ranbaxy Laboratories Ltd., Gurgaon 3. M/s Lanxess India Pvt. Ltd., Thane, Maharashtra 4. M/s Crescent Ch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant to exclude that company from purview of domestic industry did not get appreciation by DA. Both the producers constituted domestic industry. DETERMINATION OF NORMAL VALUE, EXPORT PRICE AND DUMPING MARGIN BY DA 10.1. No exporters of USA and EU responded to the initiation Notification. The DA taking the average price reported in ICIS LOR (US Gulf) and ICIS LOR (EUROPE) for the POI determined normal value of exports for these two countries. 10.2. In so far as normal value relating to exports from Singapore is concerned, when the DA found that M/s Mitsui & Co. Ltd., an exporter of Singapore although responded to initiation Notification was not a producer, but the export of Acetone to India from Singapore was by M/s Mitsui Phenol Singapore Pte Ltd., and no information was provided by that exporter. In absence of date from them, the D.A, resorted to Rule 6(8) of1995 Rule to determine normal value. 10.3. The DA also noticed that exports of subject goods were made from Singapore by Sumitomo Corporation of Singapore and Petrochem Middle East of UAE. But Sumitomo Corporation was not a producer of subject goods. It made export of subject goods to India. Sumitomo Corporation raised invo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... determined in the same manner as that was determined for USA. 11.2. Mitsui & Co. Ltd. of Singapore having provided transactions wise information relating to exports, those data were verified and making permissible adjustments towards certain expenses, Ex-factory price of bulk goods was determined accordingly. Sumitomo Corporation of Singapore having raised invoices on M/s Petrochem Middle East, UAE, transaction wise information provided by the said exporters was considered and export price of bulk goods was determined making necessary adjustments for UAE exports made to India in Para 35 of final finding. So far as non-cooperating exporters are concerned, their export price was determined taking data from data bank of DGCI&S for exports of bulk goods from Singapore, making necessary adjustments towards permissible expenses. 11.3. The export price of Sasol Solvents, the appellant exporter from South Africa, was determined taking the data relating to bulk goods and packed goods provided by that exporter and ex-factory export price was determined making necessary adjustment for permissible expenses. In so far as non-cooperating exporters of South Africa is concerned, the export data ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies simultaneously and impact of dumping on domestic industry. Cumulative assessment of the injury caused due to dumping was made to make proper recommendation for levy of antidumping duty on the subject goods originating or exported form subject countries. According to the data gathered from DGCI&S, the DA noted that imports of subject goods from EU, South Africa, Singapore, Chinese Taipei and USA constituted 26.93%, 15.36%, 18.36%, 16.99% and 10.03% respectively and the imports from subject countries were more than de minims individually. So also the DA noted that the share of subject countries in imports was 89.55% in 2003-04 increased to 94.06% in 2004-05 before declining to 91.05% in 2005-06 and 87.68% in POI. The authority observed that the share of imports from other countries was 10.45% in 2003-04 declined to 5.94% in 2004-05 and increased to 8.95% in 2005-06, 12.32% in POI. The trend indicated that imports from the subject countries were facing competition from imports of other countries. 13.2. The market share and demand including captive consumption was examined by Designated Authority in Para 70 of the final finding and the trend was recorded in Para 71 & 72 as under:- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nitude of injury margin was determined in Para 102 of the final findings to recommend levy of definitive anti dumping duty. Amendment to the final findings dated 04.01.2008 was notified on 28.1.2008 to modify the duty table appearing under Para 106 of the said finding. Taking that into consideration, the Customs Notification levying definitive antidumping was issued vide Customs Notification No. 33/2008-Cus dated 11.3.208. ARGUMENTS ON BEHALF OF APPELLANT. 14.1. Customs Notification as well as the final finding was challenged on behalf of the appellant submitting that the subject goods originating or exported from South Korea and Russia were not subjected to initiation of investigation by Notification dated 7th September 2006. Such piecemeal initiation of the investigation did not comply to the rule of simultaneous investigation for which the final findings were vitiated. Further, investigation against exporters from above two countries although was initiated, investigation against Russian exporters was terminated on 14.3.2008. 14.2. Preliminary finding made by the Designated Authority by Notification dated 25.4.2007 did not cover exports from South Korea although by Notificatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that country. Injury analysis was therefore faulty. 14.7. Relying on para-82 of the Notification dated 9.5.2008 relating to Korean exports of Acetone, it was submitted by the appellant that there was gross violation of provisions of anti dumping law and provisions of Anti dumping agreement, by designated authority in terminating investigation against Russian exports. Termination of investigation against exports from that country should not have been made. 14.8. Without considering the Russian exports and South Korean exports, there was a break in causal link for which imposition of definite anti dumping duty was uncalled for. The appellant discharged its onus of proof bringing out the material facts for simultaneous investigation when export of subject goods from Russian and South Korean figured. Investigation should have been done along with the subject countries initiated by Notification dated 7th September 2006. 14.9. It is also the grievance of the appellant that no adequate disclosure was made although appellant was entitled to that. In absence of proper discharge of the duty, the DA committed an error to determine the dumping and injury. The DA failed to comply with Rule 7 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. Appellant had no right to oppose the levy without proving dumping and injury to the domestic industry. Any leniency to the appellant will retard growth of domestic industry. 15.3. The DA rightly acted under law to investigate simultaneously into the exports made by different countries under a common Notification of initiation. The exports of South Africa being below de minimus at the time of initiation of investigation as per data of domestic industry, separate investigation was initiated against exports of that country upon receipt of information from domestic industry in November 2006. 15.4. While dumping and dumping margin was rightly assessed by DA, he did not fail to make cumulative assessment of injury parameters prescribed by 1995 Rules in respect of injury caused by the dumped imports of subject goods from different countries simultaneously investigated covered by same initiation Notification. Therefore his assessments cannot be faulted nor can he be blamed when he acted in accordance with law. 15.5. Customs Notification having been issued on legal basis, that sustains and appeal fails for the baseless grounds therein as well as fallacious arguments advanced to derive ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der Rule 2(b) of 1995 Rules. It was also argued by domestic industry that if SI Group is excluded from the purview of domestic industry, even then, Hindustan Organic Chemicals Ltd (HOCL) shall constitute domestic industry within the frame work of law as laid down by Honble High Court of Madras in above reported decision. Further, HOCL being a BIFR company and a domestic producer is not barred under law to be a complainant unless any contrary intention thereto appears in law. Appellant failed to establish its stand that HOCL had no right to complain as a BIFR company. 16.6. There is no bar in law to exclude SI Group from the purview of domestic industry since it was also manufacturer of subject goods. To submit so, reliance was placed on the decision in Kasturi & Sons Ltd. Vs. CC - 2008 (22) ELT 161 (Del). It was further submitted that even the appellant supports the case of domestic industry in para 6 at page 56 of the paper book filed. 16.7. When price under cutting and price under-selling prevailed, that compelled the DA to impose anti dumping duty. Therefore, DA has not acted contrary to law. Accordingly appeal fails on this ground also in the absence of any evidence by appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. That bars the appellant to plead that the finding of DA and customs Notifications are unsustainable. 16.12. It was also argued on behalf of domestic industry that dumping and injury being important criteria to determine the levy of anti dumping duty and that having been demonstrated from exports of subject countries, any interference to the findings of designated authority shall result in frustrating justice. To submit so, the Appellant relied on the decision in the case of Sterlite Industries (India) Ltd. vs. Designated Authority reported in 2003 (158)ELT 673 (SC) (para 4). It was submitted that once dumping of the goods and injury to domestic industry is established, Tribunal cannot set aside findings of DA as well as Customs Notification imposing Anti-dumping duty. 16.13 Following the law laid down in Sterlite Industries (India) Ltd. vs. Designated Authority reported in 2003 (158)ELT 673 (SC), it was submitted that it is for the DA to decide whether a particular material is required to be kept confidential. Also where confidentiality is required, it will always be open for Tribunal to look into the relevant file. The DA made every information available in public file for pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ong in the cumulation effect of injury parameters worked out by DA in respect of imports from subject countries. Therefore findings of DA were not at all faulty when there was no departure to the rule of analysis of injury margin followed by the DA. Relying on Para 37 of the judgment in the case of Rajasthan Textile Mills Association Vs. Director General of Anti Dumping - 2002 (149) ELT 45 (Raj), it was submitted by the domestic industry that the proposal for initiation of investigation against export from subject countries was correct to prescribe levy of definitive antidumping duty. Exports from Korea being below de minimis, Domestic industry also relied on the decision in the case of Automotive Tyre Manufacturers Asscn. Vs. Designated Authority - 2011 (270) ELT 727 (Para 13) to support its contention above and prayed for dismissal of the appeal. SUBMISSIONS OF DA. 17.1 It was submitted on behalf of the Designated Authority that against the application dated 27th February, 2006 of the domestic industry; complaint against dumping and injury was examined thoroughly even though the data pertained to a nine month period. But South Korean exports being below limit, that country was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ea to gain sympathy which is liable to be dismissed. DA cannot be blamed by appellant without having any cogent evidence against its breach of duty brought on record. Appeal not showing any ground to raise plea of breach of duty is devoid of merit. 17.6 There was no challenge to the preliminary finding notified on 25.4.2007 by the designated authority nor further detailed investigation challenged by the appellant at any stage. No grievance of appellant is on record. All pleas raised before Tribunal are baseless. Definitive anti-dumping duty having been imposed following the due process of law, and sunset review being in progress, the appellant has no right to be enriched at the cost of domestic industry. 17.7 Both the domestic manufacturers constituted domestic industry being qualified to be so under Rule 2 (b) of 1995 Rules. Therefore they cannot be denied to lodge complaint against dumping and injury caused to them by export of subject goods by subject countries. Plea of industrial sickness by HOCL and import of subject goods by SI group for use in manufacture of final goods meant for export do not disqualify them to be producer of domestic industry. Therefore their complaint w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... basic principle has been laid down by the apex court in the case of Sterlite Indutries (I) Ltd. vs. DA - 2003 (158) ELT 673 (SC). Honble court held that once DA comes to the conclusion that there was dumping and that domestic industry was injured by such dumping; the anti dumping duty is leviable. These two conditions are sine qua non for initiation of anti dumping investigation. The domestic industries requiring protection against dumping cannot be sacrificed. 19. Domestic industry seeking protection of trade measure comprises producers thereof who are required to satisfy either of the conditions mentioned in Rule 2(b) of 1995 Rules to complain dumping and injury for the trade remedy measure. Record revealed that the applicants were the only producers of the subject goods in India and this remained un-refuted by appellant. When DA found that the applicant producers constituted domestic industry he was prima facie satisfied about veracity of the complaint against dumping and injury to the domestic industry. He was of the view that examination of the existence of dumping, degree thereof and effect of such dumping was substantial, for which he initiated investigation on 7.9.206 ag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... producing same material. Here we notice on fact 'of course going by the statement made in the complaint of the appellant made to the appropriate authority' that nearly 15% of its total production is imported by it and that too casually and to meet customers demand during the time when the production was disrupted, and this quantity of import is very insignificant portion of the total import from the same exporting countries. According to us realistic and logical meaning should be the person who is carrying on business of import exclusively for trading purpose is the importer under the said Rule. We have examined the object clause of the Memorandum of Association of the appellant and nowhere we find that it carries on business principally, of import of Melamine. It is carrying on business amongst other of manufacturing of heavy chemicals of every description, whether required for civil, commercial or military defence purposes. We record the learned Trial Judge did not decide with examination of object clause of Memorandum of Association. We think this exercise is paramount and without the same the appellant could not be held to be importer in the sense as it is intended by the sai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cular time subject to testing of de minimus level of export and prima facie conclusion of dumping and injury to domestic industry. Learned Counsel for appellant relied on the panel report in Guatemala report of the penal reported in WT/DSI56/R decided on 24th October, 2000 to submit that DA initiated investigation against export from South Korea differently has caused prejudice to the appellant. It may be stated that panel has made a finding that investigating authority must have before it evidence of threat of material injury as defined in Article 3 of the Anti-dumping Agreement. The panel also found that Guatemala has acted inconsistently with its obligations under Anti-dumping agreement. Such violation is fundamental in nature and pervasive. To reach to such conclusion the panel in Para 9.1 found various difficulties which led to conclude that there was inconsistent practice by Guatemala. The said Para reads as under: In light of the findings above, we conclude that Guatemala's initiation of an investigation, the conduct of the investigation and imposition of a definitive measure on imports of grey Portland cement from Mexico's Cruz Azul is inconsistent with the requirements in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ive measures' is consistent with Article 6.9 of the AD Agreement. (n) Guatemalas recourse to 'best information available' for the purpose of making its final dumping determination is inconsistent with Article 6.8 of the AD Agreement. (o) Guatemala's failure to take into account imports by MATINSA in its determination of injury and causality is inconsistent with Articles 3.1, 3.2 and 3.5 of the AD Agreement. (p) Guatemala's failure to evaluate all relevant factors for the examination of the impact of the allegedly dumped imports on the domestic industry is inconsistent with Article 3.4. [Emphasis supplied] Reading of the aforesaid conclusion, it is not possible to appreciate appellants plea that exclusion of South Korean exports from investigation was inconsistent practice followed by D.A. Investigation of separate investigation by DA is different from committing irregularities of aforesaid nature. Such defects not being present in the present appeal it cannot be said that DA followed inconsistent practice when export from South Korea was below de minimus level for initiation of investigation by a common Notification dated 07/09/2006. 23. DA examined relevant data provided by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would cause injury to trade competitors cannot be shared. Supply of information is to be kept confidential on case to case basis. It is therefore for the DA to decide whether particular information is required to be kept confidential. Even where confidentiality is claimed it is always open for the Tribunal to look into the relevant files. Appellant only pleaded no disclosure of information was made without showing denial thereof by DA for our scrutiny. Therefore such plea is not tenable which was made for the sake of argument. Accordingly appellants contention on this count fails. Reliance was placed by the appellant on the Apex Court decision in the case of Commissioner of Police, Bombay vs. Gordhandas Bhaiji, reported in AIR 1952 SC 16 to submit that public authority should act publicly. We have no difference to this proposition of law. D.A. has not acted privately. It made every information public on public record and entire information was available in public domain. Therefore, appellant's plea that it was deprived of information is inconceivable. 26. Hon'ble Rajasthan High Court in the case of Rajasthan Textile Mills Association vs. Director General of Anti Dumping Duty -200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ously investigated exports of subject countries covered by a single and common initiation Notification. Appellant misconceived the concept of simultaneous investigation pleading that exclusion of exports from South Korea did not result in simultaneous investigation. Such plea is untenable because DA cannot postpone investigation into dumped exports above de minimus level awaiting such level to be achieved by the exports of another country as South Korean exports in the present case. Trade remedy measure is to be expeditiously provided without any loss of time when the DA is prima facie satisfied as to dumping and injury. 29. Price under cutting and price under selling appearing in Para 74 of the final finding along with the Table thereunder demonstrates how domestic industry was facing injury. The DA also brought out magnitude of injury in Para 102 of the final finding unerringly. All these statistical and material facts remain uncontroverted by the appellant, in absence of any cogent and credible evidence to the contrary, to disturb the final findings and Notifications prescribing levy of anti dumping duty required to set off injury. The Appellant itself proved that its exports r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of any such prohibition in Rule 2(b) of 1995 Rules. Similarly, erosion of funds of HOCL on account of accumulated losses does not support the contention of the appellant for exclusion of the said producer from the constitution of domestic industry, in absence of any contrary intention in law to exclude a loss making company who aspires to recover from the losses and seeks protection by the measure of Anti-dumping duty. Reliance was placed by the appellant on the decision of Thai Acrylic Fibre Co. Ltd - 2010 (253) ELT (Tri - Del) to submit that import under advance licence does not entitle an importer to become part of domestic industry. Reading of para 22 of the decision of the Tribunal throws light that in that case two importers imported insignificant quantity under advance license for export of products. Tribunal held that there was no justification to exclude those two producers from being included in domestic industry. We may say that in the case of State of Gujarat Fertilizers & Chem. Ltd. vs. Add. Secy. & Designated Authority -2012 (286) ELT 348 (Cal), Hon'ble High Court Calcutta elucidated meaning of domestic industry in Para 13 & 14 of the said judgement holding that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hed. The appellant relied on the decision of S & S Enterprises (supra) to submit that D.A. did not apply his mind to terminate Russia from its purview of investigation. It may be stated that the purpose behind imposition of antidumping duty is to curb unfair trade practice. In the judgment of S & S Enterprises (supra) it was held that if the import is below de minimus level investigation terminates. The appellant did not bring out any reason why investigation into Russian exports was terminated except contending that investigation from Russia was terminated. Therefore, we have no scope to look into the bald plea of the appellant. 37. The DA clearly brought out on record that while making final findings as Notified on 9th May, 2008 against South Korean exports, the investigation results appearing in the final findings relating to export from subject countries were considered at appropriate place to make injury analysis in respect of South Korean exports. Volume effect of South Korean exports was examined taking into consideration the volume effect of export from subject industries already notified by final finding dated 4.1.2008 relating to subject countries. Therefore, the plea of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation for investigation into export from those countries there was simultaneous investigation into such exports, by DA. He also examined the magnitude of injury margin under Para 102 read with Para 74 of final findings. The dumping margin table appears under Para 46 of final finding. The evaluation of the volume of imports and price effect of imports is relatable to cumulative assessment. The appellant misconceived that volume effect and price effect of South Korean export was not considered with export of subject countries and that shall amount to failure in making cumulative assessment. This is inconceivable since cumulation does not affect the data concerning the economic indicators concerning the performance and conditions of the domestic industry which has already suffered. When at the time of commencement of the investigation into the export of subject countries, the export of South Korea was below de minimus level; there is no substance in arguing that exclusion of South Korean export made the cumulation effect faulty. 41. The essential requirement of 1995 Rules is that investigation into dumped imports should be done where such import is above de minimus level and all such ..... X X X X Extracts X X X X X X X X Extracts X X X X
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