9911796707
TMI Blog2020 (8) TMI 114X X X X Extracts X X X X X X X X Extracts X X X X ..... d from People‟s Republic of China[subject country] to India, the Government of India, in the Ministry of Finance (Department of Revenue), on an application filed by Gujarat State Fertilizers & Chemical Limited[Domestic Industry], issued a Customs Notification that was published in the Gazette of India on November 16, 2004 imposing anti-dumping duty on the subject goods for a period of five years. The anti-dumping duty so imposed was continued for a further period of five years by Customs Notification dated February 19, 2010 in the first sunset review that was initiated at the instance of the Domestic Industry. The anti-dumping duty was further continued for another period of five years by Customs Notification dated January 28, 2016 in the second sunset review initiated at the instance of the same Domestic Industry. A New Shipper Review contemplated under rule 22 of The Customs Tariff (Identification, Assessment and Collection of Anti-Dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995[the 1995 Rules] was initiated by a Notification dated January 01, 2018 at the instance of M/s Kuitun Jinjiang Chemical Industry Co. Ltd. [the producer] and Foshan Kaisin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aforesaid four appeals. 5. Anti-Dumping Appeal No. 52291 of 2019 has been filed by the producer and Anti-Dumping Appeal No. 52292 of 2019 has been filed by the exporter with identical prayers, which are as follows: "(a) Modify the Final Findings No. F No. 7/11/2017-DGAD dated 19.06.2019 rendered by Respondent No. 2 herein by incorporating individual dumping margin that ought to have been granted in Rule 22 investigation; and (b) Pass such other and further orders as this Hon‟ble Tribunal may deem fit and proper in the facts and circumstances of the case." 6. Anti-Dumping Appeal No. 50103 of 2020 has been filed by the Domestic Industry with the following prayers: "(a) Set aside the final findings and consequent notification no. 34/2019-Customs (ADD) dated 06.09.2019 qua the Kuitun Jinjiang Chemical Industry Co. Ltd. and Foshan Kaisino Building material Co. Ltd by holding that they are not entitled for individual dumping margin and relegate them to residual duty. (b) Any other relief as may be considered appropriate by this Hon‟ble Tribunal in the facts and circumstances of the present case." 7. Anti-Dumping Appeal No. 50100 of 2020 has been filed by the im ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rial Co. Ltd. 331.10 MT 10. It would be seen from the above Table that if the subject goods were exported by a combination of the producer and the exporter, then the anti-dumping duty would be US$ 319.14 per metric ton but if export was made by the producer through any other exporter, then the anti-dumping duty would be US$ 331.10 per metric ton. 11. Shri Jitender Singh, learned Counsel appearing for the producer and the exporter made the following submissions: (i) Under the scheme of paragraphs 7 and 8 of Annexure-I to the 1995 Rules, the normal value for exporters from non-market economy country has to be determined in terms of paragraph7 only. It is only in the event that a claim is made for market economy treatment under the proviso to paragraph 8(2) that the Designated Authority would be obliged to determine the normal value in terms of paragraphs 1 to 6, subject to the fulfilment of the conditions of paragraph 8(3). Due to this presumption in paragraph 8(2), the provision cannot be read in a manner that a party has to first claim market economy treatment and only when such a treatment is not claimed, that paragraph 7 shall get invoked; (ii) A plain reading of rule ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... does not contain any evidence indicating why Qatar would be an appropriate surrogate country. In the absence of such data and information, the producer and the exporter were prevented from offering any comments. The Designated Authority erroneously stated that the Qatar is a non-dumped source. (vi) The Designated Authority breached the principles of natural justice for the following reasons: a. No hearing was granted with respect to the issue of taking Qatar as a surrogate country. b. The calculation of the dumping margin was not provided. c. The DGCI&S data relied by the Designated Authority to compute normal value were not provided. d. Rejoinder of the Domestic Industry was not provided. (vii) The Designated Authority acted in contravention of section 9A of the Customs Tariff Act, 1975[the Tariff Act] by taking the export price of the producer, instead of the export price of the exporter. 12. Ms. Reena Khair, learned Counsel appearing for the Domestic Industry, however, made the following submissions: (i) The primary obligation in any investigation is on the foreign exporter to establish its normal value, export price and dumping margin, based on its records, and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rd country nor any other reasonable basis for computation of normal value, either during the course of the investigation or even in the memo of appeal. (iv) The submission that the third country was to be selected by the Designated Authority at the stage of initiation itself is incorrect. At the stage of initiation in a new shipper review, even the exports, which are the subject matter of investigation, have not taken place. It is only after the exports are completed and the responses to the Exporter questionnaire and Market Economy Treatment Questionnaires are filed that the Designated Authority effectively starts its investigation; (v) In view of the fact that the Chinese exporter had not furnished the relevant information to the Designated Authority in terms of section 9A(6A) of the Tariff Act read with rule 6(8) of the 1995 Rules and Annexure I to the 1995 Rules, the Designated Authority correctly exercised its powers in determination of the normal value on a reasonable basis, based on facts available on record. The only fact available on the record of the Designated Authority was the price of imports from an un-dumped source, that is Qatar, which the Designated Authority f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n over invoicing. There appears to be a cartel of New Shipper (the producer & exporter) with these two Indian Importers to achieve their target to secure lower anti-dumping duty with manipulated and fictitious documents/billing; and (iv) The importer has been regularly importing melamine from China. The price difference in the melamine supplied by different Chinese suppliers is hardly 5 to 10 US$ per metric ton. The export price claimed by the exporter is fictitiously high as there is difference of more than 100 to 200 US$ per metric ton in the prices at which the exporter has exported the product to India and the price at which other Chinese suppliers have supplied the product to India market. However, there is no significant difference in the selling price of melamine in the Indian domestic market vis-à-vis the product of other exporters. Such a significant difference is unexplained and gives an impression of manipulation. 14. Shri Ameet Singh, learned counsel appearing for the Designated Authority made the following submissions:- (i) It was for the New Shipper applicants to provide evidence for determination of the normal value. The application did not state that it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de by the importers from the applicant producer/exporter were much higher than the price of other importers from China. The Domestic Industry and other importers strongly disputed the price at which the imports were made, alleging established past history of over invoicing and DRI investigation. Since the import price from applicant producer/exporter from China were noted to be higher than the other importers, the Designated Authority adopted the fundamental approach of considering the price of goods from the producer to exporter to overcome this challenge. 15. The submissions advanced by the learned Counsel for the parties have been considered. 16. In order to appreciate the contentions advanced on behalf of the parties, it would be appropriate to refer to the relevant provisions of the Tariff Act and the 1995 Rules relating to anti-dumping duty and determination of margin of dumping. 17. Section 9A of the Tariff Act deals with anti-dumping duty on dumped articles. The relevant provisions contained in sub-sections (1), (5) and (6A) of section 9A are reproduced below:- "9 A. Anti -Dumping Duty on Dumped Articles (1) Where any articles is exported by an exporter or produce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... igin and where the article has been merely transhipped through the country of export or such article is not produced in the country of export or there is no comparable price in the country of export, the normal value shall be determined with reference to its price in the country of origin." xxxxx xxxxx xxxxx (5) The anti-dumping duty imposed under this section shall, unless revoked earlier, cease to have effect on the expiry of five years from the date of such imposition: Provided that if the Central Government, in a review, is of the opinion that the cessation of such duty is likely to lead to continuation or recurrence of dumping and injury, it may, from time to time, extend the period of such imposition for a further period of five years and such further period shall commence from the date of order of such extension: Provided further that where a review initiated before the expiry of the aforesaid period of five years has not come to a conclusion before such expiry, the anti-dumping duty may continue to remain in force pending the outcome of such a review for a further period not exceeding one year. xxxxx xxxxx xxxxx (6A) The margin of dumping in relation to an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shall be considered as being dumped if it is exported from a country or territory to India at a price less than its normal value and in such circumstances the designated authority shall determine the normal value, export price and the margin of dumping taking into account, inter alia, the principles laid down in Annexure-I to these rules." 21. Annexure-I to the 1995 Rules deals with the principles governing the determination of normal value, export price and margin of dumping. Rules 1 to 6 deal with market economy countries, while rule 7 deals with non-market economy countries. Rules 7 and 8 are reproduced below: "7. In case of imports from non-market economy countries, normal value shall be determined on the basis of the price or constructed value in the market economy third country, or the price from such a third country to other countries, including India or where it is not possible, or on any other reasonable basis, including the price actually paid or payable in India for the like product, duly adjusted if necessary, to include a reasonable profit margin. An appropriate market economy third country shall be selected by the designated authority in a reasonable manner, keep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s which guarantee legal certainty and stability for the operation of the firms, and (d) the exchange rate conversations are carried out at the market rate by the firms. Provided, however, that where it is shown by sufficient evidence in writing on the basis of the criteria specified in this paragraph that market conditions prevail for one or more such firms subject to anti-dumping investments, the designated authority may apply the principles set out in paragraph 1 to 6 instead of the principles set out in paragraph 7 and in this paragraph. (4) Notwithstanding, anything contained in sub-paragraph (2), the designated authority may treat such country as market economy country which, on the basis of the latest detailed evaluation of relevant criteria, which includes the criteria specified in sub paragraph (3), has been, by publication of such evaluation in a public document, treated or determined to be treated as a market economy country for the purpose of anti dumping investigations, by a country which is a Member of the World Trade Organization." 22. A perusal of section 9A of the Tariff Act indicates if any article is exported from any country to India, at less than its nor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of paragraph 7 of Annexure-I to the 1995 Rules has to be selected by the Designated Authority in a reasonable manner. The parties to the investigation have also to be informed, without any unreasonable delay, the aforesaid selection of the market economy third country and they have to be given a reasonable period of time to offer their comments. 26. Paragraph 8 (2) provides that there shall be a presumption that any country that has been determined to be, or has been treated as, a non market economy country for the purposes of an anti-dumping investigation by the Designated Authority or by the Competent Authority of any World Trade Organization member country during the three year period preceding investigation is a non market economy country. However, such a presumption can be rebutted by providing information and evidence to the Designated Authority to establish that such a country is not a non-market economy country on the basis of the criteria specified in sub paragraph (3) of paragraph 8. 27. It is in the light of the aforesaid provisions that the contentions advanced on behalf of the parties have to be examined. 28. As noted above, "melamine‟ originating or expo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were met by the New Shipper, decided to initiate New Shipper Review investigation by Notification dated January 1, 2018 for determination of individual dumping margin for the producer and the exporter. The period of investigation for the purpose of this New Shipper Review was notified to be from January 1, 2018 up to December 31, 2018. It was further stated that all information relating to the review should be sent in writing so as to reach the Designated Authority not later than 40 days from the date of completion of the period of investigation but if the information was not received within the prescribed time limit or the information received was incomplete, the Designated Authority could record its findings on the basis of the facts available before a Designated Authority in accordance with the 1995 Rules. It was also stated that any interested party could inspect the public file containing non-confidential version of the evidence submitted by the other interested parties. 31. The procedure followed by Designated Authority, after issuance of the initiation Notification, has been stated in the final findings of the Designated Authority. It has been mentioned that the Designated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ket economy treatment, at the same time did not suggest any market economy third country to consider applying the first part of paragraph 7, either in the petition or when questionnaire was filed. (iv) It was only post oral hearing in February, 2019 that the producer/ exporter suggested adoption of constructed normal value methodology based on cost of production of India industry and the domestic Industry suggested adoption of imports from a third country i.e. Qatar for computing the normal value. (v) In a New Shipper Review, it is only after producer/ exporter and other interested parties file their submissions/ responses that the Designated Authority could have provided its approach on adoption of the methodology for determination of normal value. The Designated Authority disclosed its approach in the disclosure statement dated May 22, 2019 and on request of the producer/ exporter also extended time to file comments till June 7, 2019. Thus, reasonable opportunity had been provided to the interested parties, including the producer/ exporter, to respond to the choice of methodology to determine the normal value. (vi) The objections of the producer/ exporter stated that the De ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at quantity of export by the producer is quite reasonable to reference this sales to the exporter i.e M/s Foshan Kaisino Building Material Co., Ltd. (exporter) to evaluate the ex-factory price of export destined to India. ii. The producer has dumped the subject goods during the POI. iii. As per rule 22, the extent of dumping margin as stated above in para 30 is awarded to the producer i.e. M/s Kuitun Jinjiang Chemical Industry Co. Ltd. (Producer) as the Anti-dumping duty." 35. The Designated Authority, thereafter made recommendation for imposition of the same anti-dumping duties that are contained in the Table to Customs Notification, which is contained in paragraphs 8 and 9 of this order. 36. It needs to be noted that unlike in an original investigation or a sunset review carried out for determination of anti-dumping duty at the behest of the Domestic Industry, in a New Shipper Review the individual margins of dumping are determined by the Designated Authority at the behest of such producers/ exporters who have not exported the product to India during the period of investigation in the original or sunset review. Thus, burden lies on such producers/ exporters and not on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons but that was not done. 38. The records, however, reveal that even during the course of oral hearing on February 14, 2019, the producer / exporter did not suggest either of the three criteria set out in paragraph 7 of Annexure-I for the determination of the normal value. In fact, it is when the Domestic Industry in the submissions filed after the oral hearing suggested that the normal value should be determined under paragraph 7 on the basis of the price from a market economy country to other countries, including India that the producer and the exporter in their rejoinder submissions stated that the normal value should be determined on the basis of the cost of production of the subject goods in India, which is the third criteria stipulated in paragraph 7. 39. It is in such circumstances, that Designated Authority made the following statements in the disclosure; "a. xxxxxxxxxxx b. xxxxxxxxxxx c. xxxxxxxxxxx Para 7 lays down hierarchy for determination of normal value and provides that normal value shall be determined on the basis of the price or constructed value in a market economy third country, or the price from such a third country to other countries, including Indi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d freight (1% of FoB), Port handling (1% of FoB), Credit cost/Bank charges (1% of FoB). The next in the hierarchy of the options as per para 7 is price actually paid or payable in India for the like product duty adjusted if necessary to include a reasonable profit margin, which the Authority notes needs to be considered only if the option stated above was not available. g. The Authority notes that as per para 7 of Annexure 1 of AD rules, reasonable opportunity is to be provided to the interested parties on selection of the third market economy country. The Authority notes that in the ongoing NSR investigation, the time limit to complete the case has been fixed as 30/6/2019 in view of the Hon'ble High Court's order in Writ Appeal No. 412 to 414 of 2018. The exporter was provided a prospective POI of 1 year till 31/12/2018. The questionnaire response was filed by the producer / exporter on 8/2/2019. In the rejoinder submissions dated 28/2/2019, the producer / exporter stated that Authority may determine normal value on the basis of the cost of production of the subject goods produced in India methodology for constructing normal value for China while the Domestic Industry claimed ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . It was also stated that the level of development of Qatar was not comparable to that of China. 42. Taking into consideration the comments filed by the parties to the disclosure statement, the Designated Authority determined the normal value on the basis of the second criteria contained in paragraph 7. 43. It is in the light of the aforesaid facts that the contentions of the producer / exporter regarding violation of the principles of natural justice has to be examined. It is by now well established that the principles of natural justice are not contained in a straight jacket and a litigant cannot complain of the violation of the principles of natural justice if the litigant himself fails to avail opportunity to bring the correct facts to the notice of the authority. 44. In the present case, it was the producer/exporter who had filed an application for determination of individual margins of dumping for them since anti-dumping duty on the subject goods from the subject country had already been levied earlier in the original investigation and the two sunset reviews. The producer/exporter came out with a case that they had not exported the product to India during the original p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of 1450.48 per metric ton. The Designated Authority also noted that neither anti-dumping duty was imposed on any import from Qatar nor an anti-dumping investigation was under way and, therefore, as import volume from Qatar was quite significant, the price from Qatar would be representative of price payable in India. 46. In this regard the contention of the producer and the exporter is that the third country should have been selected by the Designated Authority at the stage of initiation itself. This submission cannot be accepted because as noticed above, the producer or the exporter did not even indicate which of the three criteria stipulated in the paragraph 7 of the Annexure-I of the 1995 Rules should have been adopted for determination of the normal value. 47. There is also no error in the determination of the normal value by the Designated Authority by resorting to the second method mentioned in paragraph 7 of Annexure-I to the 1995 Rules as none of the parties had suggested applying the first criteria set out in paragraph 7. The Designated Authority noted that exports from Qatar are next to China in terms of quantum as China accounted for 30303 metric tons and Qatar acco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the prices claimed by the exporter had been raised so as to lower the amount of anti-dumping duty. 50. It has also been contended on behalf of the producer/ exporter that the Designated Authority was not justified in determining the export price of the producer and not the exporter. This submission cannot be accepted for the reason that the exporter had substantially raised the price of the subject goods in order to reduce the anti-dumping duty. The ex-factory price of the producer would, therefore, be relevant for determination of export price. 51. The Chinese exporter had relied upon certain new shipper review cases mentioned in table below and had not only submitted before Designated Authority but also before the Tribunal during the course of hearing that the Designated Authority did not suggest a surrogate country in these cases and the normal value was computed for non-market economy on the cost basis. 52. It has been pointed out by the Domestic Industry that in all the cases, except at serial no. 1, the Chinese exporter was either granted market economy treatment and normal value was determined on basis of the data given by the Chinese exporter or the request for indiv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed MET treatment. Exporter was granted Market economy treatment and normal value was determined based on the Chinese exporter‟s data. 11 No. 15/29/2010-DGAD Vitrified/Porcelain Tiles 28.09.2012 Not on surrogate Country basis Exporter has claimed Market economy treatment and normal value was determined based on the Chinese exporter‟s data itself. 12 No. 15/20/2011-DGAD Vitrified/Porcelain Tiles 24.07.2013 Not on surrogate Country basis Exporter failed to file MET questionnaire but claimed MET during the verification process. The Authority rejected the same and consequently rejected the request for individual dumping margin as well. 13 No. 15/25/2011-DGAD Vitrified/Porcelain Tiles 28.03.2016 Not on surrogate Country basis No examination of normal value, as the Authority rejected the request of individual dumping margin. 53. From the aforesaid, it is apparent that normal value for non market economy is dealt with on a case to case basis and the producer/ exporter is not justified in asserting that in the present case the Designated Authority should have also determined the normal value under the third condition contained in paragraph 7. 54. There ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
