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2021 (3) TMI 404 - CESTAT NEW DELHILevy of countervailing duty [CVD] - Continuous Cast Copper Wire produced by Metrod Malaysia Sdn Bhd [the appellant] originating in Malaysia and exported from any country, including Malaysia, to India - computation of amount of subsidy - case of appellant is that Subsidy was incorrectly computed for “other program”, which was not countervailable as it granted exemption only in respect of import of that quantity of raw material which was required for export production - it is also alleged by appellant that no CVD could have been imposed on drawn Copper Wire manufactured by the appellant i.e. Copper Wire of less than 6mm manufactured by using drawing process and falling under CTH 74081990. If the “other program” is excluded from the subsidy margin determination, the appellant would fall below the de minimis level and, therefore, would be excluded from the purview of the impugned notification? - HELD THAT:- The appellant was granted exemption from import duty on raw materials used for the manufacture of finished products. The duty exclusion requirements on raw materials for manufacturing the finished product have been indicated in Appendix A, while the exemption period, storage of raw material and markets are set out in Appendix I. The conditions specified in Appendix I would indicate that the appellant had been granted full import duty exemption on import of Copper Rods to be used for producing Copper Wire for the export market. It also specifies that 1 MT : 1 MT input-output ratio has to be maintained, which means that for every 1 MT of Copper Rod imported duty free, 1 MT of Copper Wire is required to be exported. The Designated Authority was aware of claim made by the appellant that the subsidy on the import of raw material would not be countervailable, since the appellant had used the imported duty free Copper Rods for producing Copper Wire solely for export market but the Designated Authority did not raise any doubts on this aspect, either in the verification report or in the disclosure statement. The Designated Authority did not at any point express any view that the appellant had exported lesser quantity of Copper Wire than the quantity of Copper Rods imported by it duty free - In fact, in the verification report as also the disclosure statement, the Designated Authority took this subsidy program as “program 24” for which CVD has been recommended in the final findings as it provides exemption from import duty on raw material used for all kinds of manufacturing activity and not solely for the manufacture of export products. It also transpires from the records that the appellant made submissions in the comments to the disclosure statement regarding its claims that the duty free raw material imported was exclusively used for the production of goods that were exported but the Designated Authority, without seeking any further clarification from the appellant on the comments, determined the said program to be countervailable on the ground that the appellant failed to give sufficient evidence or step by step explanation of the verification mechanism followed by the Government of Malaysia for determining whether there was “excess remission” or not. It is not possible to accept the contentions advanced by the respondent that the appellant did not provide adequate evidence before the Designated Authority to substantiate that inputs were used exclusively for manufacturing goods and that adequate verification mechanism did not exist. The approval letter issued by MIDA did not merely mention that the imported goods, on which duty was exempted, were to be used exclusively for manufacturing products for exports but also provided a detail procedure to be adhered to in Appendix A and Appendix I to the letter - inevitable conclusion that follows from the discussion is that there was a step by step verification in place for ensuring that no excess remissions take place. It is not possible to sustain the CVD levied for “other program” and if this program is excluded from the subsidy margin determination, the appellant would fall below the de minimis level. The imposition of 2.47% CVD on the appellant at serial no. 8 of the notification dated January 8, 2020 is, therefore, liable to be set aside. “Copper Wire” manufactured by the appellant is not akin to “Continuous Cast Copper Wire Rods” and, therefore, no CVD could have been imposed on drawn “Copper Wire” manufactured by the appellant - HELD THAT:- Such being the position, it would not be necessary to examine the submission raised on behalf of the appellant that the drawn “Copper Wire” manufactured by the appellant is not akin to “Continuous Cast Copper Wire Rods”. The imposition of 2.47% CVD on the appellant at serial no. 8 of the notification dated January 8, 2020 is set aside - Appeal allowed - decided in favor of appellant.
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