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TMI Blog2019 (4) TMI 396X X X X Extracts X X X X X X X X Extracts X X X X ..... al retardation of the domestic industry consequent upon the import of the product from Saudi Arabia. The refusal by the designated authority in the case on hand to look into any possible threat of injury or material retardation to the establishment of any industry in India therefore falls short of the statutory mandate. That apart, the specific conclusion of the designated authority was that the investigation had to be terminated in accordance with Rule 14(b) of the Rules of 1995. It is only when the designated authority does not find sufficient evidence of dumping or, where applicable, injury to justify the continuation of the investigation that it can terminate it. In the case on hand, as already noted supra, the findings recorded by the designated authority clearly demonstrated sufficient evidence of dumping within the short span of three months by the exporters/producers from Saudi Arabia and also the injury caused to the domestic industry thereby. Therefore, the designated authority could not have taken recourse to this clause for justifying the termination of investigation. In fact, none of the clauses in Rule 14, which deals with termination of investigation, had appl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Explanation to this sub-section states that for the purposes of Section 9A margin of dumping , in relation to an article, means the difference between its export price and its normal value. Export Price is defined under Clause (b) of the Explanation and normal value is defined under Clause (c) thereof. Generally, normal value in relation to an article, as defined in Clause (c) means the comparable price, in the ordinary course of trade, for a like article when destined for consumption in the exporting country or territory. When there are no sales of the like article in the ordinary course of trade in the domestic market of the exporting country, or when such sales do not permit a proper comparison because of the market situation or low volume of sales in such domestic market, the normal value is either the comparable representative price of the like article when exported from the exporting country to an appropriate third country or the cost of production of the said article in the country of origin along with reasonable addition for administrative, selling and general costs, and profit. Section 9A(3) empowers the Central Government, if it is of the opinion that there is a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with appointment of the designated authority and states that the Central Government may appoint a person not below the rank of a Joint Secretary to the Government of India or such other person as it may think fit as the designated authority for the purposes of the rules. Rule 4 sets out the duties of the designated authority : 4. Duties of the designated authority. - (1) It shall be the duty of the designated authority in accordance with these rules - (a) to investigate as to the existence, degree and effect of any alleged dumping in relation to import of any article; (b) to identify the article liable for anti-dumping duty; (c) to submit its findings, provisional or otherwise to Central Government as to - (i) normal value, export price and the margin of dumping in relation to the article under investigation, and (ii) the injury or threat of injury to an industry established in India or material retardation to the establishment of an industry in India consequent upon the import of such article from the specified countries. (d) to recommend to the Central Government - (i) the amount of anti-dumping duty equal to the margin of d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g anything contained in sub-rule (1) the designated authority may initiate an investigation suo moto if it is satisfied from the information received from the Commissioner of Customs appointed under the Customs Act, 1962 (52 of 1962) or from any other source that sufficient evidence exists as to the existence of the circumstances referred to in clause (b) of sub-rule (3). (5) The designated authority shall notify the government of the exporting country before proceeding to initiate an investigation. 3. Rule 6 details the principles governing investigations. Under Rule 6(1) the designated authority shall, after it has decided to initiate an investigation to determine the existence, degree of effect of any alleged dumping of any article, issue a public notice notifying its decision, containing adequate information on various parameters mentioned in clauses (i) to (vi) thereunder. Rule 7 deals with confidential information provided to the designated authority. Rule 8 requires the designated authority to satisfy itself as to the accuracy of information supplied, upon which its findings are based. Rule 9 entitles the designated authority to carry out investigation in the territori ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) it determines that the volume of the dumped imports, actual or potential, from a particular country accounts for less than three per cent of the imports of the like product, unless, the countries which individually account for less than three per cent of the imports of the like product, collectively account for more than seven per cent of the import of the like product; or (e) it determines that the injury where applicable, is negligible. 4. The final findings are to be rendered by the designated authority in terms of Rule 17 leading to levy of duty based thereon, if warranted, by the Central Government under Rule 18. It may be noted that under Rule 17, the designated authority is required within one year from the date of initiation of the investigation, extendable by six months in special circumstances by the Central Government, to determine as to whether or not the article under investigation is being dumped in India and submit to the Central Government its final findings as to the export price, normal value and the margin of dumping of the said article; whether import of the said article into India, in the case of imports from specified countries, causes or thre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y , while Annexure III deals with Principles for determination of Non-injurious Price . 7. These, broadly, are the parameters of the statutory scheme obtaining under the Rules of 1995. 8. The grievance of Andhra Pradesh Petrochemicals Limited, the petitioner company, is with regard to the Final Findings dated 28-11-2017 recorded by the Designated Authority, Directorate General of Anti-Dumping and Allied Duties, Ministry of Commerce and Industry, Department of Commerce, Government of India, terminating the investigation undertaken by him under the Rules of 1995. A direction is sought to set aside the said findings and to direct the said designated authority to recommend to the Central Government to levy anti-dumping duty on imports of normal Butanol or N-butyl Alcohol, originating in and exported into India from Saudi Arabia. 9. The petitioner company filed a substantiated petition seeking imposition of anti-dumping duty on dumped imports of normal Butanol or N-butyl alcohol originating in and exported into India from Saudi Arabia. According to the petitioner company, normal Butanol is a basic organic chemical and a primary alcohol which is an excellent solvent for acid-cu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e dumped imports from the subject country entered the Indian market in the period Jan.-Mar., 2016 (last 3 months of the POI) in such significant volumes that improvement in volume parameters seen in the performance of the domestic industry in the first 9 months of the POI (Apr.-Dec., 2015), was completely wiped off. There was significant difference between the prices offered by the domestic industry and the foreign producer. Thus, the domestic industry was unable to raise the prices above the costs as a result of dumping of the product in the country. Even when the domestic industry offered sub-optimal prices, it was losing sales. Thus, decline in sales volumes was a direct consequence of dumped imports from the subject country. The domestic industry was able to increase its sales at the cost of sub-optimal prices in the first 9 months of the POI (Apr.-Dec., 2015). However, the sales volumes declined drastically in the period Jan.-Mar., 2016 (last 3 months of the POI) even when the domestic industry offered still lower prices as fresh dumping from Saudi Arabia started in this period. Despite sub-optimal prices offered by the domestic industry, the imports were significa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n, it was not sufficient to evaluate the injury to the domestic market. (2) The designated authority was not justified in fixing the period of investigation when the imports were only in the last three months of such period and it could have sought extension of the investigation period either at the initial stage or subsequently, if it found that the three months period was not sufficient. (3) There is no mandate in the rules that imports must be during the entire period of investigation and even three months imports, evidencing the capturing of the Indian market share to the extent of 39%, would be sufficient for the designated authority to draw necessary inferences. There is no requirement that such imports should be at least for a period of six or twelve months, as the designated authority is not required to establish whether the exporters were habitually dumping the goods. (4) Having determined the normal value in terms of the provisions of the Rules of 1995, the designated authority could not have baldly stated that the normal value so determined was not a representative and realistic normal value. The petitioner company would allege that this conclusion c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubmit its findings as to the injury or threat of injury to an industry established in India or material retardation to the establishment of an industry in India consequent upon the import of such article from the specified countries and therefore, the designated authority failed to live up to the statutory mandate. Lastly, the petitioner company contended that its own performance and that of the domestic industry improved slightly during the first nine months of the period of investigation when there was dumping of imports from other countries but its performance and that of the domestic industry deteriorated steeply during the last three months of the period of investigation when exporters from Saudi Arabia resorted to unprecedented dumping, causing material injury in terms of volume parameters such as production, sales, market share and capacity utilization. The petitioner company also contended that injury was caused in terms of price parameters which intensified losses and negated returns on investment. It is on these grounds that the petitioner company sought invalidation of the impugned final findings of the designated authority and a consequential direction to the said autho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ial injury suffered by the domestic industry had to be established and there was a clear lack of such causal link in this case. He conceded that the investigation conducted by the designated authority was only for determination of material injury and not for evaluating threat of material injury or material retardation to the domestic industry. He contended that the petitioner company never requested in its petition that it wanted the designated authority to examine any threat of material injury and the same was filed only for examination of dumping and material injury. According to him, the designated authority could not have expanded the scope of the investigation beyond the request made by the petitioner company in its petition. He further alleged that the petitioner company had quoted a hypothetical figure of ₹ 36.24 ps. per kilogram as the export price from Saudi Arabia. As such, an export price calculation was not mentioned in the impugned final findings, being confidential in nature. He concluded by stating that the petitioner company was not entitled to any relief as it had failed to establish any grounds requiring interference with the impugned final findings and pray ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rters from Saudi Arabia was determined on the basis of best available information by referencing the least ex-factory export price amongst the co-operating producers/exporters as depicted in the said dumping margin table. The dumping margin for M/s. Sadara Chemical Company, a co-operating producer from Saudi Arabia, was determined at 85-95% while the dumping margin for M/s. Saudi Acrylic Acid Company, another co-operating producer from Saudi Arabia, was determined at 35-45%. The dumping margin for two other exporters was determined at 35-45% and for last producer/exporter at 85-95%. Though the designated authority noted that imports from Saudi Arabia had occurred only in the last quarter of the period of investigation i.e., from January to March, 2016, the volume of such exports from Saudi Arabia were recognized to have marked a significant increase in imports in absolute terms from the said country. The imports from Saudi Arabia constituted 15% of the total import of the subject goods from countries with anti-dumping measures and other countries. 19. Be it noted that imports from countries with anti-dumping measures stood at 50,606 metric tonnes while from other countries, othe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t period of investigation. Performance in respect of the parameters of sales, production and capacity utilization deteriorated in the last quarter of the period of investigation, i.e., January to March, 2016, as fresh imports from Saudi Arabia started. During the first nine months of investigation, the designated authority found that the domestic industry s market share was 22% while other countries, contracting anti-dumping duty, had a market share of 78%. Positive price undercutting was established only from Malaysia but the price depreciation effect was quite significant. In relation to the last three months of the period of investigation, January to March, 2016, the designated authority noted that price undercutting was positive for all major countries, including Saudi Arabia, excepting the European Union which was negatived even during the earlier nine months. The price depreciation was found to be slightly less as compared to the previous nine months but the market share of the domestic industry fell from 22% to 3%. Injury parameters in terms of market share were set out by the designated authority in a tabular form at page 41 of the final findings. The domestic industry s ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rdation to Domestic Industry, a reasonable duration of period is warranted to capture the price and volume trend from Saudi Arabia and to analyse impact of factors other than dumped imports to exclusively establish a causal link between dumping and consequential injury. The 3 months of exports from January - March, 2016 is not sufficient enough in this case to conclusively establish a causal link between exports from Saudi Arabia and injury to Domestic Industry. The Authority holds that post Pol data cannot be referenced for the above analysis as for the current investigation PoI is fixed as 1st April, 2015 to 31st March, 2016, for determining material injury to Domestic Industry on account of dumping during this period. (vi) ............ (vii) ............ 22. It is on the strength of this reasoning that the designated authority returned its conclusions and recommendations in para 94, as set out supra. 23. It may be noted that though the designated authority seems to have proceeded under the assumption that the scope of the investigation was circumscribed by the prayer of the petitioning domestic industry, the petitioner company, the Rules of 1995 do not support su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng or, where applicable, injury to justify the continuation of the investigation; (c) .... (d) .... (e) .... 24. It is evident from the aforestated provision that it is only when the designated authority does not find sufficient evidence of dumping or, where applicable, injury to justify the continuation of the investigation that it can terminate it. In the case on hand, as already noted supra, the findings recorded by the designated authority clearly demonstrated sufficient evidence of dumping within the short span of three months by the exporters/producers from Saudi Arabia and also the injury caused to the domestic industry thereby. Therefore, the designated authority could not have taken recourse to this clause for justifying the termination of investigation. In fact, none of the clauses in Rule 14, which deals with termination of investigation, had application whereby the designated authority could have taken such a step. 25. Significantly, the purport of anti-dumping law is not to protect any particular industrial company in India but to safeguard national interest by preventing foreign exporters/producers from extinguishing domest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... required in the context of the Rules of 1995 for ascertaining or evaluating the injury to the domestic industry by dumping of like products by exporters/producers from foreign countries, but all through, the designated authority linked the three months period, January to March, 2016, to justify his termination of the investigation, which is wholly unsustainable. 27. On the above analysis, this Court finds that the designated authority, having recorded findings in support of the injury sustained by the domestic industry by dumping of like products by exporters/producers from Saudi Arabia, failed to carry through on the same note and strangely did a volte face, when it came to the final recommendation. This was on the strength of his misconceived notion that a three month span of dumping was insufficient for recording a finding. As we have already noted that there is no such mandate in the Rules of 1995, the Final Findings dated 28-11-2017 are set aside and the matter is remitted to the designated authority for consideration afresh, taking into account the scheme and structure of the Rules of 1995 and the observations made hereinabove. This exercise shall be completed expeditiousl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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