2000 (2) TMI 242 - AT - Customs

Summary

Issues Involved:
1. Material injury to the domestic industry.
2. Causal link between dumped imports and injury.
3. Classification of Styrene Butadiene Rubber (SBR) under relevant tariff headings.
4. Fixation of anti-dumping duty in terms of US dollars instead of Indian Rupees.

Issue-wise Detailed Analysis:

1. Material Injury to the Domestic Industry:
The main argument by the appellants was that the import of SBR of 1500 Grade, 1700 Grade, and 1900 Grade did not cause any material injury to the domestic industry. The Designated Authority's investigation, initiated based on a petition by M/s. Synthetic & Chemicals Ltd., concluded that the dumped imports caused heavy losses to the domestic industry. The domestic industry had to reduce their selling prices due to the lower export prices from the subject countries, leading to a 25% reduction in sales realization since January 1997. The investigation revealed a noticeable increase in stock, imports, and loss in profitability compared to the financial year 1995-96, confirming the injury to the domestic industry.

2. Causal Link Between Dumped Imports and Injury:
The appellants argued that the injury to the domestic industry was due to factors like mal-administration, disadvantageous plant location, and transportation issues rather than the import of SBR. However, the Designated Authority determined that the injury was indeed due to dumped imports. The Authority fixed the cost of production considering the optimal level of capacity, and the injury margin was calculated as the difference between the fair selling price and the landed value of the imported articles. The Tribunal upheld the Designated Authority's findings, emphasizing that the domestic industry's survival against unfair trading practices necessitated the imposition of anti-dumping duties.

3. Classification of Styrene Butadiene Rubber (SBR) Under Relevant Tariff Headings:
A question arose regarding whether some grades of SBR should fall under Chapter Heading 3903.90 instead of 4002.00. The Designated Authority clarified that anti-dumping duty should apply to all grades of SBR, regardless of their classification under different headings of the Customs Tariff Act. The Tribunal noted a clerical omission in the final findings, which limited the duty to SBR under sub-heading 4002.19. It was corrected to include all grades of SBR, ensuring that customs authorities impose duties on all types of SBR irrespective of their classification.

4. Fixation of Anti-Dumping Duty in Terms of US Dollars:
The Tribunal emphasized the need to impose anti-dumping duty in US dollars to prevent erosion of the duty's effect due to fluctuations in the exchange rate. During the investigation period (1996-97), the exchange rate was Rs. 37 per US dollar, which had since increased to over Rs. 43. Fixing the duty in US dollars ensures that the anti-dumping duty remains effective despite changes in the exchange rate. The Tribunal varied the anti-dumping duty in terms of US dollars, setting specific amounts for different grades of SBR from various countries to protect the domestic industry.

Conclusion:
The Tribunal upheld the Designated Authority's findings on the injury to the domestic industry and the causal link with dumped imports. It corrected the classification issue and emphasized the need to fix anti-dumping duties in US dollars to maintain their effectiveness. The appeals were disposed of in these terms, with anti-dumping duties refixed accordingly.