TMI Blog2005 (8) TMI 412X X X X Extracts X X X X X X X X Extracts X X X X ..... d upto 605 mm diameter covered under Tariff Item 8455.30.00 of schedule to the Customs Tariff Act, 1975, imported into India from Russia, at the rate equal to the difference between the amount of US $ 2762.79 PMT and the landed value of the goods, w.e.f. 1-1-2003 being the date from which the provisional anti-dumping duty was earlier imposed. 2. On receiving an application from. M/s. Gontermann Peipers (India) for and on behalf of domestic industry, alleging dumping of induction hardened forged steel rolls originating in or exported from Russia, Ukraine and Korea RP and on being satisfied about the eligibility of the petitioner who was supported by the other domestic producer M/s. Heavy Engineering Corporation, Ranchi, the designated authority initiated anti-dumping duty investigation by a Public Notice dated 27th August, 2002. The designated authority sent questionnaire to elicit relevant information to the known exporters/producers in accordance with Rule 6(4) including the appellant. A questionnaire was also sent to the 17 known exporters/users association in accordance with Rule 6(4). 2.1 Out of the 4 known exporters to whom questionnaire was sent, response/information ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ia of standing to file the petition on behalf of the domestic industry in terms of Rule 5(3)(a) and was considered as domestic industry within the meaning of Rule 2(b) of the said rules. 4.1 The designated authority found that the imports were from Russia, Ukraine and Korea during the period of investigation (POI) i.e. from 1-4-2001 to 30-6-2002 was above de minimus level. None of the exporters from South Korea and Ukraine had responded by way of questionnaire response. In view of non-submission of data and non-co-operation by these countries, the designated authority constructed the normal value for all producers and exporters of South Korea and Ukraine on the basis of the best information as made available by the petitioner. The cost of production as provided by the petitioner with due adjustments was, therefore, referenced for the purpose of determination of normal value of the subject goods from these two countries. In view of non-co-operation from any of the exporters/importer, the information on export price from the secondary source made available by the petitioner was relied upon and after making adjustments on account of inland freight, port expenses, ocean freight and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th appropriate adjustments as per the said rules. 4.3 As regards the export price of the goods exported by the appellants, the designated authority relied upon the information furnished by the appellant for the subject goods during the period of investigation and referenced the export price, with adjustments on packaging, inland freight, storage, ocean freight, ocean insurance and documentation cost as provided by the appellant. 4.4 The designated authority took into account all the relevant parameters under the said rules while examining injury to the domestic industry. It took into consideration the contention of the appellant that duty determined for Russia at the rate of 79.91% was a consequence of an error and that it could not exceed the dumping margin which was 31.43%. According to the appellant, there was no dumping done by the appellant s goods during the period of investigation and that the imposition of anti-dumping duty was against the provisions of Item 1 of Clause 6 of General Agreement on Tariff (rates) and Trade . 4.5 On the basis of the relevant parameters and indices having a bearing on the state of industry and the cumulative assessment of the effect of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cial production during the period of investigation. However, significant dumping very adversely retarded the growth of the domestic industry as the petitioner found it extremely difficult to complete its planned investments on the product and the project in view of severe dumping, which the petitioner was facing in the market. The petitioner domestic industry was not able to fully utilize its planned investment and had serious marketing problems due to such dumping. The price at which the domestic producer was forced to sell the product did not permit recovery of reasonable cost of production and the petitioner- company was forced to face severe financial losses. 4.9 The designated authority further noted that the petitioner had set up new production facilities and commenced commercial production w.e.f. 1-4-2002. It was found that the petitioner domestic industry was not able to establish itself as a new producer of the subject goods in the face of the dumped imports being available in the market. The designated authority noted that the production and capacity utilization of the domestic industry was significantly lower than what the domestic industry could have achieved. It was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he landed value of imported goods. The authority after considering the responses of the interested parties including the appellant during the investigation, came to the conclusion that the subject goods originating in or exported from the subject countries were exported in India below the normal value resulting in dumping; that the Indian domestic industry had suffered material injury in terms of subject goods produced by it; that establishment of domestic industry was being materially retarded by the dumped imports, inasmuch as the domestic industry was trying to establish itself in the Indian market with the new subject product; that injury was caused by imports of subject goods from the subject countries; that it was considered necessary to impose definitive anti-dumping duty on imports of subject goods originating in or exported from the subject countries; and that anti-dumping duty should be imposed equal to the margin of dumping or lower so as to remove the injury to the domestic industry that had resulted on account of dumping. The designated authority, therefore, proposed that definitive anti-dumping duty equal to the difference between an amount mentioned in Column 9 of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted value of the product in India. It was submitted that, the data furnished by the appellant constituted a reasonable basis on which the designated authority could have acted under Paragraph 7 for determining the normal value of the goods exported by the appellant during the period of investigation. It was submitted that data for fixing the normal value was contained in the appendices to the questionnaire which was responded to by the appellant and this was sufficient for determining the normal value. It was pointed out from appendix No. 3 to the questionnaire that the information disclosed therein showed that there was no dumping, because the export price to India was higher than the domestic market sale price in Russia of the subject goods during the POI. It was submitted that nothing turned on giving irrelevant information about domestic sales in appendix form No. 1 which was for the period prior to the period of investigation, because the information given in appendix No. 3 was in respect of the relevant period. It was also contended that, merely because information required to be given in form No. 7 (new form 4) was not furnished, the designated authority could not have ignor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion v. Designated Authority reported in 2004 (170) E.L.T. 144 in which it was held that existence of surplus production capacity cannot be taken as posing a clearly foreseen and imminent threat of injury (Para 18). Arguments on behalf of the contesting Respondents : 6. The learned Counsel appearing for the designated authority supporting the determinations made in the final findings submitted that the material information required for fixing the normal value of the subject goods exported by the appellant during the period of investigation to India was not provided, and, therefore, it was not possible to work out the cost of production of the appellant s goods. It was submitted that the information which was required to be given in appendix form No. 7 (new form No. 4) was crucial for verifying the correctness of other information. He submitted that the conduct of the appellant amounted to withholding of the vital information on the basis of which the normal value could be worked out. He pointed out, from the original record, to us and also to the appellant s consultant, that the communication dated 30-6-2003 was received by the designated authority on 3-7-2003 at 4.55 PM i.e. a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t in respect of the subject goods which was much lower, indicating a higher dumping margin in case of the appellant. The learned Counsel further argued that there were three alternatives on the basis of which the normal value could be determined in case of a non-market economy country under Paragraph 7 of Annexure-I to the rules. It was submitted that there was no market economy country suggested by the appellant, nor was there any response from any of the exporters which could have enabled the selection of a third market economy country. Therefore, it was reasonable on the part of the designated authority to rely on the normal value on the basis of constructed cost of production with appropriate adjustments as per Rule 6(8), as claimed by the petitioner domestic industry. It was submitted that since no data from any third market economy country was available, the designated authority rightly relied on the data furnished by the petitioner. It was also submitted that a mere look at Appendix/Form No. 7 to the questionnaire shows that there was nothing which could not be understood in that form or which required to be explained especially when all other forms were understood by the ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hough it occurred in Paragraph 7 of the Appendix-I to the rules which laid down the principles for determining the normal value in case of exports from such country, it came to be defined by Paragraph 8 which was inserted by the Amendment Rules, 2001, made by the Central Government under Sections 9A(2)(6) and 9B of the Customs Tariff Act, 1975. This paragraph 8 was later substituted by the Amendment Rules, 2002, made on 4-1-2002. Paragraphs 7 and 8 of Annexure-I which are relevant for our consideration, as they stood during the period in question, read as follows :- 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 a market economy country, or the price from such a third country to other countries, including India, or where it is not possible, 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 keeping in view the level of development of the country concerned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... operation of the firms; and (d) the exchange rate conversions are carried out at the market rate 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 investigations, the Designated Authority may apply the principles set out in Paragraphs 1 to 6 instead of the principles set out in Paragraph 7 and in this paragraph. 8.2 Russia was named amongst the non-market economy countries earlier in the note to Paragraph 8 of Annexure-I to the rules which was inserted by Customs Notification No. 28/01 (N.T.), dated 31-5-2001. The said note listing non-market economy countries was removed when the above paragraph was substituted by the amending Notification No. 1/02-Cus. (N.T.), dated 4-1-2002, and instead, a presumption was raised as per sub-paragraph (2) of Paragraph 8, that any country that has been determined to be, or treated as, non-market economy by the designated authority or the competent authority of any WTO member country during the three year period preceding the investigation, is a non-market economy. 8.3 The pres ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e designated authority to examine the matter in the light of the criteria specified in sub-paragraph (3) of Paragraph 8. The Learned Authorized representative for the appellant tried to place reliance on the communication dated 30-6-2003 for urging that the requisite information was forwarded thereunder to the designated authority in the context of the criteria laid down in sub-paragraph (3) of Paragraph 8 which was ignored by the designated authority. On verification of the original record which was made available in the Court, it, was pointed out by the learned Authorized Representative for the designated authority that the said communication was received by the designated authority on 3-7-2003 at 4.55 PM, i.e. after the Notification of the final findings was issued on 2-7-2003. We have carefully gone through the said letter and are satisfied that while some information was forwarded thereunder, which unfortunately reached the office of the designated authority after the final findings were issued, the vital information required to be furnished in Appendix/Form-7 (new form No. 4) was not still furnished by the appellant. The appellant even in this communication asserted that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Form at Appendix-7 of the exporters questionnaire was of a statement showing licensed capacity, installed capacity, production and sales of the appellant firm. The information regarding the product under investigation as well as other products of the appellant, was to be given in that form. The licensed capacity, opening stock, production during the relevant year, sales during the relevant year, and closing stock were to be shown. There was nothing in the form which may not be understood. The letters Q and V were explained at the bottom as quantity and value. Even after the discussion with the designated authority, the appellant did not furnish the required information. In absence of the information regarding the installed capacity and other products, the working out of the cost of the product in question during the period of investigation was impossible. We, therefore, find ample justification for the designated authority in holding that the response to the exporters questionnaire by the appellant was incomplete; that the information required under Appendix-I was provided for the year 2000 and not for the period of investigation; that the appellant had not provided informati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the rules that the principles for determination of normal value reflected in Paragraphs 1 to 6 are not required to be followed in case of non-market economy countries unless the presumption is rebutted. Therefore, the designated authority was bound to follow the principles laid down in Paragraph 7 for determining the normal value. The designated authority admittedly did not select the market economy third country in the present case. As noticed hereinabove, out of the three known-exporters who responded, Ukraine was itself a non-economy country, and, therefore, there was no question of selecting that country for the purpose of determining the normal value in case of appellant under Paragraph 7. As regards Korea, since it did not give any response to the questionnaire, it could not have been selected as a market economy country. Admittedly, there was no suggestion by any of the parties to treat any country as a market economy third country. Since no other exporter had responded to the questionnaire, there was absolutely no scope for selecting any market economy third country in the present case. The designated authority was, therefore, free to act on any other reasonable basis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the injury parameters for determining that the dumped imports resulted in injury to the domestic industry. Though there was some increase in sales during the period of investigation, it was noticed that goods could be sold with lot of difficulty, as the prices offered to the petitioner were very unremunerative. The petitioner was not able to produce optimally in the absence of firm orders which resulted in lower productivity. The production of the subject goods was normally made against specific requirements of the customers. The material on record disclosed that the landed value of imports from the subject countries was considerably lower than the selling price of the domestic industry resulting in price under-cutting. The domestic industry had no option but to accept the orders at low prices which were not remunerative and did not permit recovery of even cost of production to the domestic industry. It is because of the lower prices of imported product that the domestic industry was forced to sell its product at prices below the cost of production. The material on record justifies the conclusion reached by the designated authority that significant dumping was retarding the growth ..... X X X X Extracts X X X X X X X X Extracts X X X X
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