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TMI Blog2022 (3) TMI 167X X X X Extracts X X X X X X X X Extracts X X X X ..... umping duty shall be effective for a period not exceeding five years from the date of its publication, but an exception has been culled out namely that the designated authority can extend the period provided the designated authority comes to a conclusion upon a duly substantiated request by the domestic industry that the expiry of the anti-dumping duty would likely lead to continuation or recurrence of dumping and injury to the domestic industry. It also provides that rule 11 of the 1995 Rules would also be applicable to sunset reviews and rule 11 of the 1995 Rules requires the designated authority to determine threat of injury to the domestic industry taking into account all relevant facts in accordance with the principles set out in Annexure II of the Rules. The designated authority is mandated to undertake a rigorous examination of all the following three factors before deciding to continue the anti-dumping duty: (i) There is a duly substantiated request made by the domestic industry which implies that the domestic industry has to provide cogent evidence to substantiate its claim; (ii) There is a likelihood of continuation or recurrence of dumping in case duties are revoked; and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed report. The burden of proof was on the appellant to provide tangible evidence in sunset review to substantiate that cessation of anti-dumping duty would lead to continuance or recurrence of anti-dumping. The appellant failed to discharge this burden. A perusal for the final findings of the designated authority reveal that the trend of import volumes and landed (import) prices, and its effect on the domestic industry together with the increase in capacity, production, sales of the domestic industry, its market share, along with negative price undercutting and negative injury margins led the designated authority to conclude that there was no likelihood of injury. It is for this reason that the designated authority recommended discontinuation of anti-dumping duties. The final findings of the designated authority, therefore, for all the reasons stated above, do not call for any interference in this appeal - Appeal disissed. X X X X Extracts X X X X X X X X Extracts X X X X ..... stic producers ], who have been impleaded as respondent no's 3, 4 and 5 in this appeal, for initiation of a second sunset review investigation concerning imports of the subject goods originating in or exported from the subject country. PVC Flex Film is also known as PVC flex banners and PVC flex sheets for advertising signage, billboards and PVC flex tarpaulins. The products, namely, (i) PVC Films; (ii) PVC Rigid; (iii) Films Cotton/Canvas Tarpaulins; (iv) Self-adhesive Vinyl; (v) One way vision film/perforated window film; (vi) Coloured vinyl and (vii) Mesh Banner/Fabric were excluded from the scope of the product under consideration. 3. The designated authority, by a notification dated 24.03.2021, initiated the second sunset investigation to review the need for continued imposition of duties and to examine whether the expiry of such duty was likely to lead to continuation or recurrence of dumping and injury to the domestic industry. The period of investigation was notified to be from 01.10.2019 to 30.09.2020 and the injury investigation period was to cover the periods April 2017 to March 2018, April 2018 to March 2019, April 2019 to March 2020 as also the period of investigation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r in absolute terms or relative to production or consumption in India. For the purpose of injury analysis, the Authority has relied on the transaction wise import data procured from DGCI&S. The import volumes of the subject goods from the subject country and share of the dumped import during the injury investigation period are as follows: Particulars Unit 2017-18 2018-19 2019-20 POI Subject imports MT 2,329 836 341 202 Other imports MT 7,846 5,758 7,185 4,444 Total MT 10,175 6,594 7,527 4,647 Imports in relation to Domestic Production % 1.50% 0.54% 0.21% 0.19% Consumption % 1.66% 0.56% 0.22% 0.20% Total imports % 23% 13% 5% 4% 57. The Authority notes that the volume of imports of the product under consideration from the subject country declined from the base year to the period of investigation, both in absolute and relative terms. In relation to consumption and production in India, subject imports recorded a similar trend from the base year to the period of investigation. Price effect of the dumped imports 60. It is noted that price undercutting is negative for the subject country in the period of investigation. 62. It is seen that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uffered a decline in performance, such decline is not due to the subject imports, which are negligible in volume. Likelihood of Recurrence of Dumping and Injury 80. The present investigation being a sunset review investigation, the fact that the whether domestic industry is not suffering injury or not is not relevant to determine whether the duties may be continued or not. In a sunset review investigation, the Authority is required to analyze whether revocation of a measure is likely to result in continuation or recurrence of injury to the domestic industry, contrary to the determination of injury in an original investigation. 81. The applicants have claimed that the following factors demonstrate that the cessation of duty is likely to lead to recurrence of dumping and injury. a. Decline in imports due to present duties 82. ***** b. Significantly low-priced imports 83. ***** c. Continued dumping and injury margin 84. ***** d. Third country dumping 85. ***** e. Significant excess capacities for the production of the subject goods 86. ***** f. High degree of export orientation of exporters in the subject country 87. ***** g. Decline in demand from downs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave been addressed by the Authority. It is confirmed that the scope of product under consideration is the same as that in previous investigation. 99. The interested parties have contended that the information concerning production, sales and capacities of supporters have not been examined by the Authority. The Authority notes that as per the provisions of the Customs Tariff Act, 1975 read with Anti-Dumping Rules, the Authority is required to examine injury only in respect of petitioners. Besides, when the petitioners themselves have not claimed injury, a conclusion cannot be reached that the domestic industry has suffered material injury, even if performance of other non-petitioning producers shows decline. 100. With regard to the arguments concerning determination of normal value based on imports from Korea RP, the same have already been examined hereinabove. The interested parties have not brought forth any new information to establish that the normal value determined is inappropriate. Regarding the argument that the difference in prices of imports from China PR and Korea RP suggests that the quality of the two is different, it is noted that no evidence has been put forth by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... demand and Indian production from 2018-19 onwards. b. The Authority notes that the decline in the performance of the domestic industry, therefore, is not attributable to the dumped imports, as admitted by the domestic industry itself too. c. The reliability and authenticity of the Report of Special Research and Investment Feasibility Assessment on China Polyvinyl Chloride Flexible Film/Sheet Market 2021-2025' relied upon by the domestic industry to establish the likelihood of continuation recurrence of injury is suspect because neither the name of the author/ publishing agency which has prepared this report has been mentioned nor is there any reference to the original source of data cited in the report. Therefore, any conclusion with regard to likelihood of continuation/recurrence of dumping and injury cannot be made on the basis of this report. d. Even though there is continued dumping of the subject goods from China PR, the likelihood of continuation/recurrence of injury to the domestic industry in the event of revocation of duty could not be conclusively established due to lack of sufficient independent corroborative evidence. e. Therefore, based on examination of i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8th August 2016, as extended by the Notification dated 30th June 2021, shall continue for a period of six weeks. We direct the Tribunal to take up the appeals for hearing filed by the Association at any cost and decide them in accordance with law before the period of six weeks comes to an end. We expect the Union also to ensure that the Tribunal takes up the appeals for hearing and are decided in accordance with law before the expiry of six weeks." 11. The said order of the High Court was communicated by the appellant to the Tribunal only on 08.02.2022 and when the appeal was taken up on 14.02.2022, it was brought to the notice of the Bench that most of the respondents had not put in appearance. The hearing of the appeal was, therefore, adjourned and it was directed to be listed for hearing peremptorily at the top of the board on 17.02.2022. 12. Respondent no. 1, which is the designated authority, is represented by Shri Ameet Singh. Respondent no. 2, which is the Union of India, is represented by Shri Nagendra Yadav authorized representative of the Department. Respondent no's 3, 4 and 5 are the domestic producers who had filed the application for continuance of the anti-dumping ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... author nor of the publishing agency was mentioned. The appellant had mentioned the relevant information from the report in the petition and furnished a copy of the report thereafter to the designated authority, on a confidential basis. The name, on the request of the agency, was not disclosed. The market research agency is based in China and is not permitted by law to disclose market information to persons outside China. The agency was apprehensive that Chinese Authority may initiate action against it, as this information was being used against the interests of producers and exporters in China; (vi) Under the general provisions relating to secrecy, espionage and other laws, the Chinese Government could initiate action against such agencies. In 2021, the Data Security Law of the People's Republic of China was introduced, whereby under Article 36, domestic organization and individuals were prohibited from providing data stored within the mainland territory of China to the justice or law enforcement institution of a foreign country, without the prior approval of the competent authority. The market research agency had, therefore, cautioned the appellants regarding disclosure of its n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imports in their favour, which is obvious from the remarkable improvement in financial parameters of the domestic industry along with an increase in capacity, production and sales; (iii) When the original investigation was initiated, there were a handful of domestic producers of the like article in India. However, towards the initiation of the second sunset review, there were around fifteen plus domestic producers of the like article in India. Further, as imports from China PR having trickled to miniscule quantities clearly shows that the purpose of anti-dumping duty has been served and that there is no need for further extension of anti-dumping duty; (iv) The domestic industry was admittedly not suffering any form of material injury. Injury, if any, has already been attributed by the appellant to the current COVID- 19 pandemic. Price undercutting is negative. Injury margin is negative. There is absence of price suppression or depression. The designated authority after considering all the relevant facts in the investigation, concluded that there is a "lack of sufficient independent corroborative evidence" establishing the likelihood of continuation/recurrence of injury to the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in absolute and relative terms and that the volume of imports was less than 1% of India demand and Indian production from 2018-19 onwards; (iii) The price undercutting due to imports from the subject country was negative and that the selling price of the domestic industry declined over the injury period whereas the landed price of imports had increased; (iv) The report on which reliance was placed by the appellant was correctly not taken into consideration by the designated authority since even the name of the author/agency that had prepared the report was not mentioned. In the absence of any reference to the original source of data, the report was suspicious; and (v) The designated authority had to determine the continuance or recurrence of dumping and injury on the basis of facts and not merely on the bases of allegation, conjectures or remote possibility. 16. Shri Nagendra Yadav learned authorised representative appearing for the Union of India also supported the impugned order and made the following submissions: (i) The decision taken by the designated authority does not suffer of any perversity and in this connection reliance has been placed on the following decision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for its withdrawal, where it comes to a conclusion that the injury to the domestic industry is not likely to continue or recur, if the said anti-dumping duty is removed or varied and is therefore no longer warranted. (1B) Notwithstanding anything contained in sub-rule (1) or (1A), any definitive anti dumping duty levied under the Act, shall be effective for a period not exceeding five years from the date of its imposition, unless the designated authority comes to a conclusion, on a review initiated before that period on its own initiative or upon a duly substantiated request made by or on behalf of the domestic industry within a reasonable period of time prior to the expiry of that period, that the expiry of the said anti-dumping duty is likely to lead to continuation or recurrence of dumping and injury to the domestic industry. (2) Any review initiated under sub-rule (1) shall be concluded within a period not exceeding twelve months from the date of initiation of such review. (3) The provisions of rules 6,7,8,9,10,11,16,17,18, 19, and 20 shall be mutatis mutandis applicable in the case of review." 21. It would be seen that in view of the provisions of rule 23(3), rule 11 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e existence of a threat of material injury, the designated authority shall consider, inter alia, such factors as: (a) a significant rate of increase of dumped imports into India indicating the likelihood of substantially increased importation; (b) sufficient freely disposable, or an imminent, substantial increase in, capacity of the exporter indicating the likelihood of substantially increased dumped exports to Indian markets, taking into account the availability of other export markets to absorb any additional exports; (c) whether imports are entering at prices that will have a significant depressing or suppressing effect on domestic prices, and would likely increase demand for further imports; and (d) inventories of the article being investigated. 23. It would be seen that the determination of threat of material injury to domestic industry is required to be based on facts and not merely on allegation, conjecture or remote possibility. The change in circumstances which would create a situation in which the dumping would cause injury must be clearly foreseen and imminent. 24. At this stage, it would also be pertinent to refer to the 'Agreement on Implementation of Article ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce and procedure shall apply to any review carried out under this Article. Any such review shall be carried out expeditiously and shall normally be concluded within 12 months of the date of initiation of the review. 11.5 The provisions of this Article shall apply mutatis mutandis to price undertakings accepted under Article 8." 25. It needs to be remembered that the nature of exercise to be undertaken in a 'sunset review' is different from the initial exercise that is undertaken for determining whether anti-dumping duty is to be levied or not. In a review, the focus is on whether withdrawal of anti- dumping duty would lead to continuance or recurrence of dumping as well as injury to the domestic industry. 26. In this connection reference can be made to a decision of the Tribunal in Thai Acrylic Fibre Ltd. vs. Designated Authority [2010 (253) E.L.T. 564 (Tri.-Del)] wherein it was observed: "13. Unlike original investigations, sunset reviews are prospective in nature, as they focus on the likelihood of the continuation or recurrence of dumping and injury, in case antidumping duties are removed. With respect to the question whether dumping is likely to occur in the event that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... limited to the information received with respect to change in the various parameters. The entire purpose of the review inquiry is not to see whether there is a need for imposition of anti- dumping duty but to see whether in the absence of such continuance, dumping would increase and the domestic industry suffer." (emphasis supplied) 28. In APAR Industries Ltd. vs. Designated Authority [2006 (200) E.L.T. 34 (Tri.-Del.) CESTAT], the Tribunal followed the aforesaid observations of the Supreme Court and held: "It is to be borne in mind that the scope of the sunset review by the designated authority is limited. He has to satisfy himself as to whether there is justification for continued imposition of anti-dumping duty and that also based on the information received by him. It seems that the sunset review by its very nature, would be limited to see as to whether conditions which existed at the time of imposition of antidumping duty have altered to such an extent that there is no longer justification for continued imposition of duty or to ascertain that if such duty is revoked there is imminent danger of the material injury to the domestic industry. The inquiry is limited to the chang ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd injury in future to the domestic industry. There is no dispute or quarrel on the fact that it should be on the basis of some tangible evidence. Therefore, the procedure prescribed to address the interest of all interested parties for imposition of anti dumping duty are also applicable to the sun set review proceedings even though with different objective." (emphasis supplied) 31. What transpires from the aforesaid discussion is that though the anti-dumping duty imposed under sub-section (1) of section 9A of the Tariff Act shall cease to have effect on the expiry of five years from the date of such imposition, but under sub-section (5) of section 9A, the Central Government, in a review, can extend the period of such imposition for a further period of five years if the Central Government is of the opinion that cessation of such duty is likely to lead to continuance or recurrence of dumping and injury. Rule 23 of the 1995 Rules provides that though the definitive anti-dumping duty shall be effective for a period not exceeding five years from the date of its publication, but an exception has been culled out namely that the designated authority can extend the period provided the de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t it should be based on some tangible evidence. 34. In the present case, as noticed above, the designated authority concluded in the final findings that cessation of duty was not likely to lead to continuation or recurrence of dumping and injury and the conclusions are as follows: "Conclusion on injury and likelihood of continuation or recurrence of dumping and injury 94. The domestic industry has suffered a decline in performance due to the effects of Covid-19 pandemic. With regard to likelihood of dumping and recurrence of injury, the Authority notes as under: i. The volume of imports of subject goods from China PR has declined significantly both in absolute and relative terms. The imports of subject goods from China PR has been less than 1% of the Indian demand and Indian production from 2018-19 onwards. ii. To establish the likelihood of continuation/recurrence of injury, the domestic industry has furnished 'Report of Special Research and Investment Feasibility Assessment on China Polyvinyl Chloride Flexible Film/Sheet Market 2021-2025'. However, the name of the author/agency which has prepared this report has not been mentioned in the report. The data source for the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny mention of the original source of data. 37. Learned counsel for the appellant submitted that the designated authority committed an error in rejecting the market research report that had been submitted by the appellant before the designated authority. The submissions of learned counsel for the appellant is that though the appellant had not given the name of the market research agency, but if the designated authority had called upon the appellant to disclose the name of the agency, the appellant would have done so on a confidential basis. Learned counsel also stated that the reason why the appellant had not provided the name of the market research agency was that since the market research agency was based in China, it was not permitted by Data Secrecy Law to disclose the market information to persons outside China. In this connection reliance has been placed by the learned counsel for the appellant on WTO Panel Report dated 28.10.2011 in European Union Anti- Dumping Measures on Certain Footwear from China[WT/DS405/R ] and WTO Panel Report dated 24.07.2020 in European Union Cost Adjustment Mythology and Certain Anti-Dumping Measures [WT/DS494/R ]. 38. Learned counsel appearing fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... counsel for the appellant. In the first instance, as submitted by learned counsel for respondent no. 8, the appellant cannot be permitted to urge at this stage that it was barred from sharing the name of the author/agency of the marketing intelligence report due to the Data Secrecy Law as this ground was not raised in the appeal memorandum nor any permission was sought from the Tribunal to raise this plea at the time of hearing of the appeal. This apart, this law was enacted in September 2021 after the report was shared with the designated authority and it is not the case of the appellant that this law had any retrospective application. In fact, the contention of the appellant is that in case the designated authority had asked, the appellant would have shared the name of the author with the designated authority even though, according to the appellant, it was prevented earlier to do so. 41. This issue was examined by the Tribunal in Dye Stuff Manufacturers Association. In this case the domestic industry had relied on a trade journal 'Chemical Week' to claim that the 'normal value' of Aniline in Europe was in the range of USD 880-925/MT and to allege that the exports of the goods f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s would increase and the domestic production would reduce. There has to be a strong explanation as to why this would happen as mere possibility of injury to domestic industry is not sufficient. This aspect was examined at length in the report of the Panel in "Pakistan-Anti-Dumping Measures on Biaxially Oriented Polypropylene Film From the United Arab Emirates" [WT/DS538/R decided on 18.01.2021] and the relevant portion of the report is reproduced below: "7.602. We recall that, under Article 11.3, an authority must determine that the continuation or recurrence of injury is likely, and not merely possible, and that this determination must be based on positive evidence and not on assumption. 7.603. We note that the NTC reasoned that, since after the imposition of anti-dumping duties imports had declined and domestic production had increased, it was likely that the opposite would happen if the duties were removed. While the fact that imports declined significantly and domestic production increased significantly after the imposition of the anti-dumping duties suggests that it is possible that the opposite could happen upon removal of the duties, the NTC did not explain why it consid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions under Article 11.3 must rest on a "sufficient factual basis" that allows the investigating authority to draw "reasoned and adequate conclusions"." 46. Article 11.3 of the 1994 Agreement also came up for interpretation before the Appellate Body in United States Sunset Review of Anti-Dumping Duties on Corrosion-Resistant Carbon Steel Flat Products from Japan [WT/DS244/AB/R decided on 15 December 2003]. The appellate body placed emphasis upon the word 'unless' and observed that this would suggest that the designated authority would have to conduct a rigorous examination in a sunset review before resorting to the exception for continuance of the anti-dumping duty. The appellate body also observed that the sunset review requires an appropriate degree of diligence. It also agreed with the panel report that the requirement to make a 'determination' concerning the likelihood precludes the designated authority from simply assuming that likelihood exists. The observations are as follows: "113. The Article 11.3 states that notwithstanding the provisions of Articles 11.1 and 11.2, anti-dumping duty shall be terminate not later than five years from its impositions &q ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it to draw reasoned and adequate conclusions concerning the likelihood of such continuation or recurrence. 115 The Panel's description of the obligations of investigating authorities in conducting a sunset review closely resembles our own, and we agree with it." (emphasis supplied) 47. In this view of the matter, the designated authority was justified in holding that there did not exist sufficient factual material to allow the designated authority to conclude that there was a likelihood of continuation or recurrence of injury in case of cessation of anti- dumping duty. 48. Learned counsel for the appellant also placed reliance upon paragraphs 80 to 92 of the final findings and submitted that the parameters relevant for likelihood of continuation or recurrence of dumping and injury had been examined by the designated authority and a positive finding was recorded, but despite such a finding the designated authority arrived at contrary finding. 49. It is not possible to accept this submission of the learned counsel for the appellant. What has been recorded in paragraphs 80 to 92 of the final findings are the submissions advanced on behalf of the appellant and this is clear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mation supplied by the interested parties upon which its findings are based. 51. Learned counsel for the appellant placed reliance upon the Panel Report dated 08.10.2011 in "European Union Anti-Dumping Measures on Certain Footwear From China". This report deals with confidential treatment. The other report of the Panel dated 24.07.2020 relied upon by the learned counsel for the appellant also relates to confidential treatment. The issue in the present appeal is not regarding the confidentiality to be granted or not, but it is regarding the disclosure to the designated authority, even if it was considered to be confidential, the name of the author/publishing agency of the report in which even the data source was not indicated. 52. Thus, the designated authority committed no illegality in not placing reliance upon the unauthenticated report. The burden of proof was on the appellant to provide tangible evidence in sunset review to substantiate that cessation of anti-dumping duty would lead to continuance or recurrence of anti-dumping. The appellant failed to discharge this burden. 53. Learned counsel for the appellant also questioned the absence of 'Exporters Questionnaire-Part II- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e appellant themselves have relied upon factors (b) and (d) given in paragraph (vii) in connection with the likelihood of dumping and injury and the designed authority also appreciated all the factors while determining the likelihood, including the significant rate of decrease in dumped imports, imports entering India at prices which are not at all suppressing or depressing the domestic prices. This approach of the designated authority is supported by the decision of the Supreme Court in Rishiroop Polymers, which decision was followed by the Tribunal in APAR Industries. 58. A perusal for the final findings of the designated authority reveal that the trend of import volumes and landed (import) prices, and its effect on the domestic industry together with the increase in capacity, production, sales of the domestic industry, its market share, along with negative price undercutting and negative injury margins led the designated authority to conclude that there was no likelihood of injury. It is for this reason that the designated authority recommended discontinuation of anti-dumping duties. 59. The final findings of the designated authority, therefore, for all the reasons stated abov ..... X X X X Extracts X X X X X X X X Extracts X X X X
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