TMI Blog2013 (12) TMI 1246X X X X Extracts X X X X X X X X Extracts X X X X ..... t, the appeal is liable to be dismissed. If one person hears and other decides, then personal hearing becomes an empty formality. In the present case, admittedly, the entire material had been collected by the predecessor of the DA; he had allowed the interested parties and/or their representatives to present the relevant information before him in terms of Rule 6(6) but the final findings in the form of an order were recorded by the successor DA, who had no occasion to hear the appellants herein. In our opinion, the final order passed by the new DA offends the basic principle of natural justice. Thus, the impugned notification having been issued on the basis of the final findings of the DA, who failed to follow the principles of natural justice, cannot be sustained. It is quashed accordingly. The appellants cannot claim refund of duty already levied in as much as they have not specifically challenged the findings of the sunset review, and therefore, the findings in relation to the existence of dumped imports, material injury to domestic industry and causal link between dumped imports and material injury to domestic industry remain unchallenged - Following decision of AUTOMOTI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onfining his argument against mid-term review Notification No. 72/2006-Cus dated 10.07.2006 submitting that this appeal is independent of the levy of definitive anti-dumping duty made by customs Notification no. 168/2003 dated 14.11.2003 and there is no bar for the Tribunal to dispose the present appeal. Representative for Dept of Revenue, Ministry of Finance, learned advocate appearing for Designated Authority (D.A.) as well as domestic industry did not object to the above proposition. Accordingly hearing proceeded to dispose the present appeal confining our decision to the challenges made against mid term review notifications in this appeal. 4. It was noticed in the course of hearing that after the mid-term review, sunset review has also been made and final finding thereon has been notified by Notification No.15.11.2008 DGAD dated 26th March, 2009 recommending levy of Anti-Dumping duty on the subject goods originating in or exported from the subject countries. 5. Original levy (definite antidumping duty) was made against application dated 21.8.2002 filed by M/s. Alkali Manufacturers Association of India (AMAI) representing domestic industry complaining dumping of subject good ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ance of the levy was uncalled for. So also it was challenged that claiming excess confidentiality, the designated Authority did not provide relevant information to the appellant. 7.2. Submission of the appellant was that the composition of producers who formed domestic industry at the original investigation for imposition of definitive anti-dumping duty underwent change in mid-term review investigation. While 9 Members of Domestic Industry joined in the original investigation, 10 members joined in the mid-term review investigation. 6 parties among them were common in both the investigations. While 3 parties of the original investigation were not in mid-term review, 4 new parties joined in such review. Such composition of the producers of Domestic Industry was contrary to the provisions of Rule 2 (b) of the customs Tariff (Identification, Assessment and collection of Anti-Dumping only on dumped articles and for determination of Injury) Rules, 1995 (herein after referred to as the 1995 Rules) and that has ultimately disturbed the injury analysis giving rise to an erroneous conclusion in the final finding. The said Rule at the relevant print of time in so far as that is relevant for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been disturbed in the mid-term review, that does not give the real picture of the demand and supply for which the finding should not have been retuned recommending continuation of the levy. It is pertinent to mention that the appellant failed to justify its stand when demand and supply figures of subject goods were open for perusal from the public file as per information provided by domestic industry. 7.6 It was also submitted that duty should not vary in mid term review for no export from Taiwan. Original duty levied should have been continued without variation when there was no current dumping and no likelihood injury in absence of export from Taiwan. Argument of the appellant that for no export from Taiwan, change in duty structure was unwarranted was negated by DA on the ground that Formosa Plastics Corpn. (FPC) form china Taipei responded to the exporters questionnaire providing details of third country exports verifiable from Chlor Alkali Market report 2004 which provided basis for calculation of the volume effect of the imports warranting the levy to continue to set off injury to domestic industry. 7.7. It was further argued that Designated Authority followed inconsist ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... age 194). Citing Para 11 of the decision in Saudi Basic Industries vs. Designated Authority -2006 (200) ELT 488 (Tri.-Del.) it was submitted that there cannot be inconsistent practice. It may be stated that there is no quarrel to the proposition of law decided by Tribunal. But in respect of all the reviews stated above, parties thereto not being before us for Judicial review, it is not desirable to express any opinion thereon prematurely. Accordingly plea of inconsistent practice followed by DA is liable to be rejected without making parties not before us to become fate accompli. 7.11. Learned Counsel citing Para 14 of the decision of the Tribunal in B.P. Foam (supra) submitted that there should have been a finding that import from Taiwan shall not result in dumping and injury when exporters of Taiwan were dropped in review finding by DA. Only by a finding in this manner the Authority may not recommend duty in respect of the export from Taiwan. We notice that such submission has no legs to stand since export from 2005-06 were not material when POI comprised the period 1.1.2004 to 31.12.2004. 7.12. It was also argued by appellant that Designated Authority claiming excess confide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce injury determination is object of original investigation while likelihood determination thereof is an exercise done in mid term review. All that required in mid term review is to reach to a conclusion as to whether dumping and injury shall continue or recur if there is cassation of the levy. Review relates to prospective dumping. The DA had rightly opined taking into account interest of the domestic industry as a whole considering major proportion of the total domestic production which is one of the criteria prescribed by Rule 2(b) of 1995 Rules defining the term domestic industry . Statistics of number of productions is irrelevant when quantum of output taken into consideration constitute major proportion of the total domestic production of subject goods as an alternate criteria prescribed by law. When all producers of domestic industry do not join the investigation, the producers of major proportion of production have right to complain for initiation of investigation under section 9A of the Act and they constitute domestic industry under Rule 2 (b) of the 1995 Rules. 8.2 Citing report of the panel in respect of Argentina -definitive antidumping duties on poultry from Brazi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s a proved case that the producers producing a major proportion of total domestic production constituted domestic industry. That remained un-rebutted by appellant. 8.4 Placing reliance on Mexico anti-dumping investigation of high fructose corn syrup (HFCS) from United States panel reports WT/DS 132/R it was submitted by domestic industry that domestic industry is not only confined to all producers for definition thereof but the producers of the domestic industry contributing to the major proportion of the production equally qualify to constitute domestic industry. Therefore the likelihood injury analysis has dealt the suffering of domestic industry. That is not faulty. The authority has not made merely a Performa exercise following empty formality. But made substantial enquiry in to the dumping margin and made injury analysis with full proof of facts and figures making adequate disclosure thereof in the course of investigation to both sides. There was nothing hidden when fact and figures were available in public domain. 8.5 It was submitted that when the term major proportion appears in Rule 2(b) of 1995 Rules, that refers to the substantial quantum of output of domestic indu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l Value and Export price of subject goods exported form subject countries were determined in terms of Para 26 to 40 of the final finding correctly. Dumping margin which is the difference between these two was rightly worked out in para 41 of final finding. The dumping margins so worked out were 68.93% of export price in respect of Chinese Taipei, 165% in respect of Indonesia and 56.53% in respect of EU (except France). There was positive dumping margin and that had an adverse impact on domestic industry. Similarly third country export from Chinese Taipei was determining factor in absence of actual import from Taiwan during POI. DA has not committed any error in arriving at the dumping margin. 8.8 It was further submitted that arguments and submissions made by the interested parties were properly examined by learned D.A. and having regard to the information/evidence gathered by him and made available to him about the present and potential capacity, production, sales, imports, exports, domestic demand, the price levels in respect of domestic sales, exports to third countries, he made injury analysis correctly in accordance with municipal law as well as Anti Dumping Agreement of mem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ped goods in the past against orders placed by third country. Considering the level of capacity utilization achieved by the producers in the exporting countries in the past over the injury period and the capacity utilization achieved during the investigation period, the Authority determined unutilized capacities in Taiwan, Indonesia and EU (except France). It was noted that the unutilized capacities with the Indonesia producers were to the extent of 87000 MT, while the same was to the extent of 236000 MT in case of European producers. In other words, producers in these countries had capacity to readily offer their subject goods to such extent. As per information provided by Chlor Alkali Magazine market Report, the installed and supplies capacity of exporting countries were as under:- Taiwan surplus capacity 54,000 Taiwan Expansion planned 466,666 Total likely surplus of Taiwan 520,666 Indonesia surplus capacity 327,000 Europe surplus capacity 1,886,000 Total Surplus 2,733,666 Indian Demand: excluding captive consumption 18,74,596 including captive consumpt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... jury prescribed by the 1995 Rules established that domestic industry was yet to achieve financial stability which was struggling to get reasonable return considering investment made in caustic soda industry. Therefore, continuation of the levy was warranted. World wide production capacity of subject goods in 2004 was assessed as 65.41 million MT whereas the world demand thereof was only 52.89 million Mt. There existed surplus production of 12.52 million MT which was nearly 70% of production capacity. Due to low demand of the goods in producing countries, they were in an advantageous position to export the subject goods abroad. D.A. noticed that one of the subject countries i.e. Taiwan stopped export of subject goods soon after levy of definitive anti dumping duty. 8.18 Likely injury can be evaluated by several considerations. Existing injury is not necessity of a review proceeding nor mandate of law when first proviso to section 9A(5) of the Act is read. Cumulation of the parameters of injury enables the DA to reach to a conclusion whether there is a likelihood of dumping and injury to recommend continuation of levy. 8.19 Relying on the appellate bodys report in WT/DS 268/AB/R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs -AIR 2012 SC 264: (2011) 12SCC 695, where it was held that additional ground is not entertainable at the belated stage. 8.22 The Designated Authority took all facts into consideration which are normally considered for injury analysis and nothing contrary to proposition of law in Annexure-II of 1995 Rules, was followed by D.A. to do so. Every aspect of information in this regard was well known to both sides before filing written submission. Reliance was placed by domestic industry on the judgement in the case of Rishiroop Polymers Pvt. Ltd. vs. D.A., reported in 2006 (196) ELT 385 (SC). Citing Para 26 of the said judgement it was submitted that in changed circumstances duty levied earlier shall continue. Further, relying on a decision in the case of Acrylic Fibre vs. D.A., reported in 2010 (253) ELT 164 it was submitted by domestic industry that review is done to determine likelihood injury. Article 11.3 of Anti-dumping agreement does not require that injury is again to be determined in accordance with Article 3 in a review which was already determined at the initial stage. In that case Tribunal concluded that D.A. is not required to follow the provision of Article 3 of Anti Du ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whenever requested. Entire information was available in public record for inspection by appellant. Nothing specific was pleaded by appellant before DA at any time alleging claim of excess confidentiality by it. 9.3 The D.A. also sent questionnaire seeking relevant information to the government of subject countries including known exporters/producers, in accordance with the Rule 6(4) of the 1995 Rules. One of the exporters from Chinese Taipei M/s Formosa Plastics Corporation, Taiwan (FPC) filed response in the prescribed exporters questionnaire. That was considered. No Taiwan producers participated in the investigation. It was a proved fact that Taiwan had not made export of subject goods to India during POI. Questionnaire was also sent to the known importers/user and associations of the subject goods for necessary information in accordance with Rules 6(4) of the 1995 Rules. 9.4 The D.A. during the course of investigation was satisfied as to the accuracy of the information supplied by various interested parties upon which it made its final findings. The Authority also conducted verification of data of the foreign producer, domestic producers and consumers to the extent consider ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... margin was worked out to be 17% to 56% during that period. Various injury parameters as prescribed by the 1995 Rules were taken into consideration to make injury analysis. 9.10 It was further submitted by DA that it was conscious that price under selling was an important indicator of the assessment of injury in order to determine whether the exports were likely to depress the prices of domestic industry to significant degree. To reach to the conclusion, non-injurious price (NIP) was determined by D.A. considering reasonable return on investment @ 22% on capital employed by domestic industry enabling the domestic industry to manufacture and sell subject goods so that it would not complain injury. The NIP so determined was compared with the landed value of the imports to arrive at the extent of price under selling. Upon determination of injury, the authority in para 80 onwards examined the likelihood of recurrence of injury on the domestic industry and concluded that if levy of anti-dumping duty is revoked, there shall be likelihood of recurrence of injury to the domestic industry. 9.11 Causal link between dumping and injury was examined by the ld. Designated Authority in para 9 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Dept. of Revenue of Ministry of Finance examining recommendation of DA in midterm review considered proper to notify continuation of the levy. 10.2 Central Government making an overall assessment of health of domestic industry notified extension of tenure of levy rightly. The DA while making review exercise has acted in accordance with law. It was rightly opined that cessation of the levy was to result continuation and recurrence of dumping and injury. Recommendation of the DA for continuation of levy was therefore justified. That does not warrant interference. 10.3 Entire finding of DA was based on facts, evidence and accurate information as well as reliable facts and figures. Findings have been made granting fair opportunity of hearing to all interested parties including the importer appellant. All parameters of law were followed to determine likely injury and dumping for which action of DA cannot be assailed. It has not failed in its duty to enquire into quantum of dumping and potentiality of dumping and various implications thereof. So also the injury likely to ensue therefrom was examined. 10.4 When likely injury was found to be due to dumping, tenure of the levy was bo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. Section 9A (5) contemplates revocation of anti-dumping duty even earlier than the period of its expiry after five years from the date of imposition. Therefore, it contemplates not only a sunset review, but also a mid-term review and as per the first proviso, the period of imposition could be extended for five years, if in a review, the central government is of the opinion that the cessation of such duty was likely to lead to continuation or recurrence of dumping and injury. Therefore, dumping and injury are two important aspects which are required to be kept in mind by the designated authority while deciding whether cessation of duty is likely to lead to continuation or recurrence of dumping and injury [Emphasis supplied]. Rule 23 dealing with review of levy and exemption of duty from time to time read as under: Review -23. (1) The designated authority shall, from time to time, review the need for the continued imposition of the anti-dumping duty and shall, if it is satisfied on the basis of information received by it that there is no justification for the continued imposition of such duty recommend to the Central Government for its withdrawal. (2) Any review initiated und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A (5) to do so. [ Emphasis supplied] 11.3 Thus review is an examination of post levy situation to ascertain whether cessation of the levy is likely to lead continuation or recurrence of dumping and injury. Such exercise is undertaken depending on the facts and circumstances of each case which is not equated with the initial investigation made while levying antidumping duty u/s 9A (1) of the Act against complaint of domestic industry or suo-moto by the DA under Rule 5(4) of the 1995 Rules. 11.4 While provisions of Rule 6, 7, 8, 9, 10, 11, 16, 17, 18, 19 20 of the 1995 Rules are mutatis mutandis applicable to review, Rule which deals with initial initiation of investigation for levy of definitive Anti dumping duty. Rule 6 deals with the principles governing investigation. Rule 7 deals with the confidential information. Rule 8 deals with Accuracy of the information. Rule 9 deals with investigation in the territory of other specified countries. Rules 10 deals with determination of normal value, export price, margin of dumping. Rule 11 deals with determination of injury. Rule 16 deals with disclosure of information. Rule 17 deals with final finding. Rule 18 deals with levy of duty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation. Explanation:- For the purpose of this rule the application shall be deemed to have been made by or on behalf of the domestic industry, if it is supported by those domestic producers whose collective output constitute more than fifty per cent of the total production of the like articles produced by that portion of the domestic industry expressing either support for or opposition, as the case may be, to the application. (4) Notwithstanding anything contained in sub-rule (1) the designated authority may initiate an investigation suo-moto if it is satisfied from the information received from the Commissioner of Customs appointed under the Customs Act, 1962 (52 of 1962) or from any other source that sufficient evidence exists as to the existence of the circumstances referred to in clauses (b) of sub-rule (3). [Emphasis Supplied] 11.6 Reading of aforesaid sub-Rules of Rule 5 make clear that while investigation is an outcome of complaint of dumping and injury by domestic industry in terms of, section 9A(1) of the Act, Review under Rule 23 is a post investigation evaluation of the situation to ascertain likelihood of dumping and injury. When the question of investigation at t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... continuation or cessation thereof is examined by Review exercise. Review is post levy event, mandated by first proviso to section 9A (5) of the Act. It is immaterial whether 10 members or 9 members constituted the domestic industry when producers of major proportion of output of domestic industry participated in review exercise explaining injury to larger interest of domestic industry due to dumping. All producers of subject goods in India were members of Alkali Manufacturers Association of India (AMAI). A number of manufacturers of such goods producing major proportion of domestic output provided accurate and reliable information relevant to dumping, injury, costing, returns on investment, sales price etc. There was no basis of law for appellant to argue that composition of domestic industry in mid term review should have remained the same as that was in the original investigation. It is quite probable that some new producer members may have entered into domestic industry after levy of definitive antidumping duty due to protection granted and some may have gone out of industry for various economic or financial reasons. Appellants challenge to the constitution of the domestic ind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -moto investigation under sub rule (4) of Rule 5 is also regulated by sub-Rule. So far as the review governed by Rule 23 of 1995 Rules is concerned that does not warrant re-examination of constitution of domestic industry which was already known to both parties at the initial investigation stage of levy. 12.4 When mid term review application was made by the appellant, it was expected that the applicant was aware of producers of the subject goods in the domestic industry and their number when the appellant was also a party in the original investigation of levy of anti-dumping duty. Performance of producers of domestic industry, quantum of output manufactured by them and their financial affairs was also expected to be within the knowledge of the appellant when review was sought by it on the ground of change in circumstances. It cannot plead innocence or unawareness of essential facts relating to domestic industry for a misplaced sympathy that goes to the root of the matter touching the interest of such industry. Burden of proof is on the applicant to show that its assertions are correct and based on evidence and there is neither dumping nor injury. Plea of ignorance of relevant fac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act. None of the exporter/producers from Indonesia and EU (Excluding France) made response to the same. Only Formosa Plastic Corporation (FPC) from Chinese Taipei responded. Taiwanese exporters did not export the subject goods to India during the POI which was verified from DGCI S import statistics. Appellants contention that there was export by Taiwan from 2005-06 to 20-11-2012 was baseless since such export relates to post investigation period. In absence of export price, from Chinese Taipei, no current dumping margin was determined for which that was determined taking third country export price. DETERMINATION OF NORMAL VALUE AND EXPORT PRICE 14.1 DA determined normal value and export price of Chinese Taipei in respect of prospective exports in accordance with 1995 Rules and WTO agreement on Anti Dumping. Export data provided by FPC to third countries during POI as is depicted in Para 28 of Final Finding was considered by DA. It was noticed by him that there were sales to Australia, USA and Singapore in major volume. So also he considered sale of subject goods to both affiliated and unaffiliated countries in home market and exports made to a number of countries other t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 15.1 The Domestic Industry submitted before Designated Authority that FPC was undertaking significant expansion to the tune of 466000 M.T. (evidence from Website of FPC). That guided the DA to arrive at the potential capacity of production of significant volume of additional quantity for export of subject goods to India when exports were at a level that was depressing the price in domestic market in India. It was also noticed by the DA that landing prices of the exports were below the benchmark recommended by that authority and those were at dumped price. It is quite obvious that if export price is below benchmark that causes injury to domestic industry. The D.A. found that Indian market was more attractive to Taiwans producers than the third country market if the levy is waived or withdrawn. Such finding remained un-rebutted by the appellant. 15.2. The Designated Authority further noticed that price of the subject goods in Australia, Singapore and USA were much lower than the prices in Indian market. In the past, FPC committed sale of 150000 M.T. materials to various traders for eventual supply to Indian customers and was in-fact awarded an order for supply of 86000 MT materi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tries (such as USA and Singapore), which were also simultaneously subject to anti-dumping duty under a separate notification was more than 90%. In a sunset review, the D.A. is examining a scenario which is already affected by the existing anti-dumping regime in force. It is bound to be different from the scenario at the time of original examination. In the sunset review, he has to do a likelihood determination as to whether there will be continuance or recurrence of injury if the anti-dumping duty is removed. In such a determination, the percentages fixed under Rule 11 read with Annexure-II (iii) cannot be of relevance as the anti-dumping duty would have brought down volume of dumped imports. For a likelihood determination under the sunset review which is prospective in nature, there cannot be any objection to cumulation of imports to determine likelihood of injury. In the instant case, even though the volume of imports from the subject countries were less than 7% the dumping margins were 41.73%, 65.31% and 50.70% from China PR, Korea RP and Chinese Taipei respectively. We do not, therefore, find any reason to upset the findings of the D.A. arrived in sunset review merely because h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry to domestic industry. 15.9 The non-injurious price calculated by DA remained un-assailed by the appellant failing to show the ground in that respect in the Memorandum of Appeal even though four weeks time was allowed by the Tribunal for the same. Therefore domestic industry is right to plead, that following the ratio laid down by Apex Court in the case of National Textile Corporation V. Naresh Kumar Badrikumar Jagad and ors AIR 2012 SC 264: (2011) 12SCC 695 nothing can be pleaded without any ground in the memo of appeal nor an additional ground can be entertainable at a belated stage. 15.10 The volume of increase in inventory was noticed in the year 2003-04 while there was a decline during the period of investigation. The authority therefore opined that inventory level may increase in case anti-dumping duty is withdrawn because such withdrawal would lead to increase in importation of subject goods resulting in declining of sale volume of the domestic products causing injury. Such conclusion of DA is correct and based on evidence. 15.11 Growth of domestic industry was due to levy of definitive anti-dumping duty proving withdrawal thereof shall hamper growth of the Industry. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... law making every material fact available on public record meant for inspection. 16.3 The non-confidential version submitted by domestic industry was well within the notice of the appellant being a matter of record. Disclosure statement depicted entire facts and figures. Nothing is apparent to have been concealed or suppressed by the DA. Allegation of claim of excessive confidentiality by the Designated Authority is ill founded. Quantum of output manufactured by domestic industry, its capacity and utilisation thereof was not out of reach of the appellant to know when it sought review on the ground of changed circumstances. Similarly, Chlor Alkali market reports were available to know performance of exporter and their exporting potentiality. Contention of Appellant that the Designated Authority claimed excessive confidentiality does not merit consideration for the reason that the appellant was an applicant for review and has burden of proof to support its application. But it failed to prove. It is legitimate expectation that the applicant is aware of health of domestic industry when it claimed no duping and no injury to the domestic industry. It failed to establish that neither dum ..... X X X X Extracts X X X X X X X X Extracts X X X X
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