TMI Blog2007 (6) TMI 326X X X X Extracts X X X X X X X X Extracts X X X X ..... s context, we may refer to the provisions of Rule 14, which contemplates termination of investigation immediately, if the designated authority determines that the margin of dumping is less than 2% of the export price under clause (c) of the said Rules. This clause reflects what is known as rule of de minimis. Therefore, upto 2%, the margin of dumping is to be ignored i.e. it will be taken as if there was no dumping margin for the purpose of the levy. In this context, an established negative margin of dumping of minus 1.38%, which was the figure given to us by both the sides as the correct figure, cannot be brushed aside or ignored. We therefore, find ourselves in agreement with the reasoning of the learned designated authority for concluding that there was no dumping margin for the subject goods established with regard to imports of Turkey and that there was no likelihood of continued dumping of the subject goods from Turkey. In fact, the designated authority had verified that the Indian importers had resold the imported goods at a significantly higher price than the price at which they were imported. The finding that there was no dumping was based on verification of the factual ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts, the CIF export price to India of the subject goods had increased and the landed value was higher than the reference price fixed. Customs duty on Borax decahydrate (BDH) had been reduced from 30% to 20% and that the normal value had come down significantly. The designated authority initiated the review proceedings by the Notification dated 21-11-2003. The investigation was carried out for the purpose of mid term review for the period starting from 1st January 2004 to 31st December 2004 (POI). The injury examination was conducted for the period from 2000-2001 to the end of the POI. The present appellant who was one of the domestic producers of the subject goods and the applicant in the original investigation opposed the review proceedings. However, the other domestic producer, namely M/s. Raj Industries, Valsar and Shakti Borax Pvt. Ltd. submitted that the imports from Turkey did not cause any injury to their production and sale of borax decahydrate and that imports from Turkey were not a threat to their operations. They stated that they had no objection if the anti-dumping duty was removed on imports of borax decahydrate into India from Turkey. Therefore, a portion of the domes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... try of export also carried the invoice amount in U.S. Dollars based on the exchange rate of the particular day of the sale. On this very basis, the normal value was determined in the initial imposition which resulted in the dumping margin of 12.44%. It was held that the same methodology was adopted for determining the domestic price for the period of review which had significantly fallen than the domestic price which was prevalent earlier for the original period of investigation. On this basis, the designated authority concluded that the mid term of anti-dumping duty imposed on borax decahydrate from Turkey had been correctly initiated. 5. In paragraph 15 of the final findings the designated authority gave its reasons for working out the normal value during the period of investigation. It was noted that ETI Maden (earlier name, ETI Maden Holdings AS) exported the subject goods to India during the period of investigation and the previous two years through Boro Chemi International Pvt. Ltd., Singapore. It did not export the product directly to India. As per their response to the questionnaire, the designated authority examined whether the total domestic sales of the subject goo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... age normal value at ex-factory level was worked out. 6. Examining the contentions of the domestic industry in connection with the export price, it was held that ocean freight, marine insurance, margin of Boro Chemi International, Singapore, inland freight in Turkey, port handling and port charges, had been reduced from the export price to arrive at the price at the ex-factory level. It was found that since Boro Chemi India was not responsible for selling the subject goods in India, the margin of Boro Chemi India was not relevant. It was also noted that the bank charges were covered as a part of SGA expenses of Boro Chemi International Singapore. The credit cost had not been taken into account since the transactions were CAD and D.P. at site basis. It was noted that as per the invoices of the Turkish producer, the subject goods were sold by Boro Chemi International, Singapore to Indian exporters directly. Therefore, the final export price to India was taken as per the invoices raised by Boro Chemi International, Singapore on the Indian exporter. From the said price, the designated authority deducted selling expenses like, on ocean freight and marine insurance and also SGA expenses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion in terms of U.S. Dollars and considering the adjustments made towards discounts, transport, insurance, handling, loading and other expenditure, to arrive at ex-factory export price the weighted net export price at factory level was worked out by the designated authority. The dumping margin was determined in accordance with the said rules on the basis of a comparison of weighted average normal value with the weighted average export price. The dumping margin for the exports of the subject goods from ETI Maden was assessed as negative. On the basis of the information obtained from two importers in India in respect of quantities and values of the subject goods imported by them and the quantities and values of the subject goods sold by them to the independent exporters and users, and on examination of import invoices, as provided by Boro Chemi International and the sale invoices with respect to the Indian exporters to whom they had sold the subject goods during the period of investigation, it was found that the importers had sold the subject goods during the period of investigation at prices which were consistently higher than the prices at which the goods were imported after taking ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t there was no likelihood of continued dumping of the subject goods from Turkey. It was held that continued imposition of anti-dumping duty on the subject goods from Turkey was not necessary to off set dumping and injury to the domestic industry. It was further held that there was no justification for continuation of the duty against Turkey. Therefore, a recommendation for revocation of duty in force against Turkey was made under Rule 23 pursuant to which the impugned notification was issued by the Central Government under Section 9A(1) read with Rule 23 amending the notification dated 7-1-2004 by effecting the withdrawal of anti-dumping duty imposed on the subject goods originating in or exported from Turkey. 10. It was contended on behalf of the appellant, domestic industry by its learned counsel that if there was no sale by the producer ETI Maden from Turkey to India, export price was not ascertainable and the authority was, therefore, required to construct the export price based on the first sale of the imported article in India to an independent customer. It was contended that the methodology followed by the authority was not in accordance with Section 9A(1) of the Act. It w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i India, bank charges incurred by the Turkish producer and reasonable profit of Singaporean exporter, while determining the export price, is misconceived. It transpires from the record that, the entire actual profit margin of Boro Chemi International, Singapore, the exporter, which was worked out at 18.6%, had been deducted in arriving at the ex-factory price. Moreover, the Turkish producer ETI had not incurred any bank charges on realization of the export proceeds, as was verified by the designated authority. No deductions were, therefore, required to be made in connection with the bank charges which were not incurred. It also transpires from the record that Boro Chemi India was manufacturing boric acid powder in its own unit in India. On examination of the record and the documents of Boro Chemi India, the designated authority concluded that it was not concerned with the subject goods and that there was no question of deducting any expenses of Boro Chemi India from the export price of Boro Chemi International, Singapore. It was found that the advertisement expenses were in fact paid by Boro Chemi International, Singapore and not by Boro Chemi India, as per the invoices and payment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r to the questionnaire, it was sought to be pointed out that the minor changes in the export price and the normal value reflected from the indexed figures mentioned therein, did not justify reduction of margin of dumping from 12.4% to -1.38%. 12.1 In this context, we may note that, in the original investigation, while working out the anti-dumping margin of 12.44%, the Designated Authority had taken the view that since there was significant fluctuation in the exchange rate, each transaction in the domestic market should be converted into US Dollar at the exchange rate applicable on the date of the transaction. It was noticed during the verification that all the domestic sales invoices of the subject goods also carried the value of the goods in terms of US Dollars, based on the exchange rate on the particular day of the sale. The Designated Authority was, therefore, justified in adopting the same methodology, because the invoices of domestic sales during the period of investigation relevant to the mid-term review also reflected the value of the goods in terms of the US Dollars along with the price shown in the local currency. From the invoices on record, it appears that the exchang ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the rate of exchange on the date of invoice. Normally, the rate of sale contemplated in paragraph 6(iii) of Annexure 1 to the Rules would be the date of contract, purchase order, order confirmation, or invoice, whichever establishes material terms of sale. The invoices of the domestic sale in Turkey issued by the producer ETI incorporated the material terms of sale. Since conversion rate of Liras into US Dollars was mentioned in the said invoices, no question of considering fluctuations in exchange rate would arise in respect of these transactions. The export price was admittedly in US Dollars. Since the domestic price and export price both were available in terms of US Dollars, there was no need to convert the export price which was in US Dollars into Liras of Turkey. The impact of export price of subject goods imported in India would be on the basis of the rupee equivalent of the export price expressed in US Dollars and therefore, the comparison between the normal value in Turkey in terms of US Dollars as already expressed in the domestic sales invoice of ETI with the export price also expressed in US Dollar, was apposite and fair, in the facts of the present case. No question of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... poses. The rest of the tincal was used in their plant for production of other Boron products. On verification of the record, it was found by the designated authority that tincal consumed and captively produced in the manufacture of borax decahydrates was valued at actual cost of production. The authority also verified the actual cost of production of the subject goods by taking into account the cost of the tincal and its freight cost to the plant at Bandirma. The domestic sales quantity of the subject goods and their prices during the period of investigation were also verified. All the domestic sales transactions were examined with reference to the cost of production of the subject goods in order to determine whether the domestic sales were in the ordinary course of trade or not. It was noted that the weighted average sales price of the product was higher than the cost of production of the subject goods. On carrying out of 80 : 20 tests, it was found that more than 20% of total sales made in the domestic market were below the cost. Therefore, only profitable transactions were taken into consideration as per the rules, for the determination of the normal value. The ratio of the deci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ountries other than India during the period of investigation and in the preceding two years. The domestic sales in Turkey had marginally increased during the second-half of the POI and the domestic market remained very high throughout the POI and two years prior to that. The facts indicated that the domestic demand for the subject goods in Turkey would be increasing in the foreseeable future. The exports to other countries had grown and were more than six times the exports to India. The spare production capacity of the producer in Turkey had declined since the original investigation and there was less freely disposable capacity of the exporter, which indicated the unlikelihood of substantially increased dumped imports to the importing members markets, taking into account the availability of other export markets to absorb additional exports. The facts noted by the designated authority indicated that there was a high demand for the product in other countries and there was less likelihood of recurrence dumping into India. The reasoning of the designated authority, based on the material on record, clearly indicated negative dumping margin of -1.38% and the facts on record showed that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le 23, which did not contain such language and merely provided that the designated authority shall review the need for the continued imposition of duties and if it is satisfied, on the basis of the information received by it, that there is no justification for continued imposition thereof he shall recommend its withdrawal. 16.2 Section 9A(1) contemplates imposition of anti-dumping duty, which does not exceed the margin of dumping and sub-section (6) of Section 9 contemplates that such margin of dumping, as is referred to in sub-section (1) or in sub-section (2) of Section 9A, shall from time to time be pertained and determined by the Central Government after such enquiry, as it may consider necessary. However, as per sub-section (5) of Section duration of anti-dumping duty imposed under Section 9A is to be of unless revoked earlier. If the anti-dumping duty imposed is not revoked earlier and no review is undertaken before the expiry of the five years, it would cease to have effect by efflux of the statutory period. If, however, the review is undertaken as per the first proviso to sub-section (5) of Section 9A for extending the period of such imposition beyond five years, i.e., fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the continued imposition of duty will also cover a situation where the question of earlier revocation is required to be considered during the currency of the period of five years of the impost. The satisfaction of the designated authority that there is no justification for the continued imposition of such duty has to be reached on some objective basis, germane to the provisions warranting the imposition of anti-dumping duty, and it cannot be a mere arbitrary subjective satisfaction. It can safely be said that when there is likelihood of it continuation or recurrence of dumping and injury in the absence of anti-dumping duty which is imposed, there would obviously be a justification for the continued imposition of such duty. There is no warrant for contending that likelihood of continuance of dumping and injury contemplated by the first proviso to sub-section (5) of Section 9A is alien to the provisions of Rule 23. 16.3 As held by this Tribunal in Kalyani Steel Ltd. v. Designated Authority, reported in 2006 (203) E.L.T. 418, power of mid-term review under Rule 23 flows from the provisions of the parent Statute [Section 9A(5)], as denoted by the expression unless revoked earlier . ..... X X X X Extracts X X X X X X X X Extracts X X X X
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