TMI Blog2020 (2) TMI 642X X X X Extracts X X X X X X X X Extracts X X X X ..... VI of the general agreement on Tariffs and Trade 1994 (ADA) needs to be examined. The said articles 6.9 stipulates that the Authority shall before a final determination is made, inform all interested parties of the essential facts under consideration which form the basis for the decision whether to apply definitive measures as prayed. Additionally article 6.9 also provides that such disclosure should provide sufficient time to the parties to defend their interest. In the Anti-Dumping investigation, since the Designated Authority has to find whether dumping, injury and causal link exist or not, the essential facts underlying the findings and conclusions relating to these elements shall form the basis of the decision under Rule 16 of the Anti-Dumping Rules. These essential facts are required to be disclosed to the domestic industry / interested parties. The word used in the Rule is essential facts under consideration , rather than essential facts that should reasonably be considered . Thus, the sole object of Rule 16 as well as of said article 6.9 is to allow parties to defend their interests. The meaning of word fact in various dictionaries is truth, reality and a thing k ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . MAHAR, MEMBER (TECHNICAL) AND HON BLE MS. RACHNA GUPTA, MEMBER (JUDICIAL) Ms. Reena Khair, Shri Rajesh Sharma, Ms. Rita Jha and Ms. Shreya Dahiya, Advocates for the appellant Shri Ameet Singh and Shri Amit Randev, Advocate and G. Pradha, Director (Cost) for the Designated Authority Shri Sunil Kumar, Authorised Representative (DR), Shri Dhruv Gupta and Ms. Greetika Francis, Advocates for the Revenue Respondent ORDER RACHNA GUPTA 1. The present appeal has been filed against the final findings dated 2 September 2017 issued by the Designated Authority. 2. The relevant facts in brief are that M/s. Jindal Poly Films Limited (Division Global Non Wovens), the appellant herein is a major producer of non woven fabrics made of polypropylene of GSM 25 or less. The appellant filed an application / petition dated 17 March 2016 before the Designated Authority under the Customs Tariff Act 1975, (hereinafter referred as the Act) and Customs Tariff (Identification, Assessment and Collection of Anti-Dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995 (referred as Anti-Dumping Rules hereinafter) praying for initiation of anti-dumping inves ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5-15 6 All producers / exporters from Malaysia 15-25 20-30 7 Saudi German Co. for Nonwoven products, Saudi Arabia 0-10 0-10 8 All others producers / exporters from Saudi Arabia 5-15 0-10 9 Asahi Kasei Spunbond (Thailand) Co. Ltd. through Itochu Thailand Ltd. / Itochu India Ltd. 0-10 Negative 10 All other producers / exporters from Thailand 10-20 5. Comments to the said disclosure statement was submitted by the appellant. It is thereafter that the Designated Authority issued the final findings dated 2 September 2017 concluding as follows: The Authority notes that there is no causal link between the dumped imports material injury to the domestic industry due to reasons given above. Therefore, in terms of Rule 14(b), (e) and Rule 17(1)(iii) read with Rule 11(2) and paragraph V of Annexure II of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e prayed for recommending imposition of anti-dumping duty, adequate enough to remove the injury on account of dumped imports and for a direction upon the Central Government to issue an appropriate notification imposing Anti-Dumping Duty. 9. We have heard Ms. Reena Khair, Shri Rajesh Sharma, Ms. Rita Jha and Ms. Shreya Dahiya, Advocates for the appellant, Shri Ameet Singh and Shri Amit Randev, Advocate and G. Pradha, Director (Cost) for the Designated Authority, Shri Sunil Kumar, Authorised Representative (DR) for the Revenue. Shri Dhruv Gupta and Ms. Greetika Francis, Advocates have appeared for the Respondent No. 3. 10. It is submitted on behalf of appellant that it set up a unit for the manufacture of non woven fabrics in Nashik, Maharashtra. The trial production started in February 2015, whereas commercial production started in July 2015. The application for initiating anti-dumping investigation was filed in March 2016. The investigation initiated w.e.f. June 2016 in respect to the subject countries for a period of 9 months (1 July 2015 to 31 March 2016) as a period of investigation. It is impressed upon that the disclosure statement dated 2 August 2017 disclosed the follo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ive evidence about the existence of dumping margin and material injury with respect to import from China PR, still did not recommend for imposing duty at least with respect to imports from China nor has been imposed in the final findings. The observation of no causal link is contended to be absolutely false. The reasoning in this respect that volume of goods from China PR is extremely low and incapable of impacting the domestic industry is also contended to be a wrong finding. It has been submitted that findings cannot be supported by fresh reasons not contained in the order. Decision of the Supreme Court in Mohinder Singh Gill Anr. Vs. The Chief Election Commissioner, New Delhi Ors. (1978) 1 SCC 405 has been relied upon in this respect. It is impressed upon that as per Rule 14 (d) of Anti-Dumping Rules, the imports which are more than 3% of the total imports are actionable and dumping is required to be redressed by imposition of duty. The final findings regarding the said import is in the range of less than 20% of the total imports and, therefore, much above the threshold given in Rule 14(d). The findings about such volume of imports to be still insignificant and as such to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ken into consideration while determining the dumping margin with respect to Malaysia as 15-20%. For all other non co-operative producers and exporters from EU, the highest domestic selling price of co-operative exporter without any adjustment has been taken into consideration for calculation of normal value. 16. It is submitted that as regards Malaysia, the response furnished by the exporter had been rejected by the Authority as unreliable as is evident from paragraph 53 of the final findings. Hence, no reliance could be placed thereon. The Malaysian exporter was found to have filed a malafide representation suppressing vital information from the Authority. Thus, the only material available to the Authority for determination of normal value and export price was the information submitted by the appellant (all the other exporters being non co-operative). Non-consideration of the submissions of the appellant by the Designated Authority and its silence as to the normal price, dumping margin and injury margin for Malaysian exporter is another reason for setting aside the final findings. 17. The Learned counsel, in addition, has also impressed upon that the test of material retarda ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... basis of comments filed by any of the party. 19. Appellant finally has objected to the locus of the non co-operative Malaysian exporter / respondent no. 3. It is submitted that since the representation filed by the Malaysian exporter was rejected by the Designated Authority in paragraph 53 of the impugned findings, the exporters stand excluded from investigation for all intents and purpose and would have no locus standi to participate in proceedings except by way of an appeal. It is impressed upon that participation of exporters, who rendered malafide representations in the investigation process, would only encourage non cooperation of various exporters / producers. Hence, no opportunity of being heard should be provided to the Malaysian exporter. As appeal has not been filed by him against the said representation, he has no locus standi to appear and submit before this Tribunal in this appeal. With these submissions, learned counsel prayed that the impugned final findings be modified to the extent of imposing the requisite Anti-Dumping duty. 20. While rebutting these arguments, it has been submitted on behalf of Designated Authority as follows: 20.1 From the data provided ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ttal, it has been submitted that though the capacity and sale of the appellant has increased, but still the appellant is not able to fetch a price above the cost price of its production. The Appellant is sustaining the continuous losses and such loss making sales will actually compel the appellant to shut down its unit, thereby fulfilling the objective of the exporters. It is also impressed upon that increased capacity utilisation and increased sale are rather sufficient to falsify the observation of Authority in the final findings that the injury is due to the teething problems. It is further impressed upon that had the issue been only of teething problems, the industry being at nascent stage, even capacity utilization and sale could not have increased. It is submitted that disclosure is clearly showing positive dumping, positive injury and link thereto with respect to all the exporters and even the final findings show the same with respect to two exporters namely Toray Polytech (Nantong) Company Limited, China and all other producers / exporters from China PR but still the final finding are silent about the imposition of anti-dumping duty. 23. Though the Authority has contende ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s rejected. 25. All the parties have been heard and the records have been perused. 26. The appellant herein, the domestic industry admittedly has set up its industry for manufacturing non woven fabrics in Nashik in January 2015 and conducted the trial production from February 2015. The Commercial production therein started in July 2015. It is eight months after the said commercial production that the appellant filed an application dated 17.3.2016 requesting for initiation of investigation under Rule 5(1) of Anti-Dumping Rules 1995 for determination of the existence, degree and effect of the significant dumping and injury, that materially retarded the establishment of the appellant. In furtherance whereof investigations were initiated by the Designated Authority vide notification dated 15.6.2016 issued in terms of Rule 5(3) of Anti-Dumping Rules. The Rule clarifies that the initiation notice shall be given after Designated Authority satisfies itself that the applicant is a domestic industry and after it examines the accuracy and adequacy of evidence as provided in the application and finds it to be sufficient evidence to its satisfaction regarding dumping, injury and a causal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nvestigation period and further in the post POI period. However, sales volumes are still materially below the total demand in the country. vii. The cost of sales has decreased over the investigation period as also the selling price. Further, selling price is far below the cost of sales. viii. The domestic industry has been suffering significant losses. The extent of cash loss is quite significant. The extent of cash losses suffered by the Domestic Industry increased over the period. ix. The Domestic industry is suffering negative return on capital employed throughout the period. x. Despite increase in production and sales, the losses suffered by the Domestic Industry increased. xi. Inventories of the Domestic Industry increased in the investigation period and even in the Post POI period. Further, the increase in inventories is despite the production restrictions employed by the Domestic Industry. xii. The growth of the Domestic Industry was positive with regard to volume parameters and negative with regard to price parameters. 28. Thus it is clear that the essential facts under consideration which would form the basis of final findings as disclosed in the disc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... N comparison but the said submission cannot be considered as this reason, or for that matter, no reason has been mentioned. 31. Thus, the issue stands restricted to a very narrow comparison namely: Whether the Designated Authority can give final findings contrary to the essential facts stated in the disclosure statement without even apprising the domestic industry. 32. To decide this issue, the foremost requirement is to understand the scope and object of the disclosure statement issued by the Designated Authority in terms of Rule 16 of Anti-Dumping Rules. This Rule mandates that the Designated Authority shall, before giving its findings, inform all interested parties of the essential facts under consideration which form the basis of its decision. In so far as the interpretation of Rule 16 of Anti-Dumping Rules is concerned, the WTO panel and appellate body of WTO decisions relating to interpretation of article 6.9 of the agreement on implementation of article VI of the general agreement on Tariffs and Trade 1994 (ADA) needs to be examined. The said articles 6.9 stipulates that the Authority shall before a final determination is made, inform all interested parties of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... losure is paramount for ensuring the ability of the parties concerned to defend their interest. 34. Though Rule 16 does not prescribe any particular form for disclosure of essential facts but it does require that the Designated Authority should disclose those facts in such a manner that the interested parties are able to clearly understand what data the investigating authority has used and how this data and relevant facts were used to determine the margin of dumping. The disclosure statement, therefore, contains the intermediate findings and conclusions of the Designated Authority on the essential facts which would form the basis for the decision to apply or not to apply definitive measures in the final findings. The stage of disclosure under rule 16 and the final findings under Rule 17 are both after submission of evidence / information and the arguments / submissions of all the interested parties. Thus, the essential facts as contemplated under Rule 16, are not merely a replica of information received by the interested parties but are the analysis by the Designated Authority and, therefore, the final findings must be based on an analysis expressed in the disclosure statement. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gnated Authority reported in (2006) 10 SCC 368 held that proceedings before the Designated Authority determine a lis between Domestic Industry on the one hand and the importer of foreign goods on the other. The determination of the recommendation of the Designated Authority and the subsequent Government notification is subject to an appeal before this Tribunal. This makes it clear that the proceedings before the Designated Authority are quasi judicial in nature. The Supreme Court further clarified that when a decision is not in consonance to the essential facts under consideration as were disclosed to the interested parties, including the domestic industry, it was incumbent upon the Designated Authority to specify the reasons for such diversion. Any additional data / information / submission or methodology used by the Designated Authority while coming to such a decision was required to be made known by Designated Authority to the interested parties, including the domestic industry prior to taking a final decision. 38. Absence of the requisite disclosure of information amounts to violation of the principles of natural justice as the Designated Authority is a quasi judicial ..... X X X X Extracts X X X X X X X X Extracts X X X X
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