TMI Blog2016 (2) TMI 477X X X X Extracts X X X X X X X X Extracts X X X X ..... ept itself alive to the language employed in Para 12 of Schedule III to the 1967 Rules which lays down the concept of "Equal Economic Importance" for the joint products. Held that:- the tribunal should have dwelled upon the said facet before it recorded the finding whether it is a co-product or a by-product. It is because the "Equal Economic Importance" has to be considered on a rational and pragmatic basis. It is the duty of the tribunal to see whether the DA had considered the said aspects or proceeded on hypothetical basis. The tribunal has the jurisdiction to appreciate the evidence in entirety and arrive at a conclusion and that having not been done and the entire judgment having been based on the application of M/s. Hanwha Chemical Corporation's case and the price rise in the price of Chlorine, we are constrained to dislodge the judgment and order of the tribunal. Appeals are allowed and the judgment and order passed by the tribunal are set aside and the tribunal is directed to decide the matter afresh keeping in view the observations made hereinabove. - Matter remanded back to tribunal. - Civil Appeal No. 2242/2006, Civil Appeal No.3481/2006 - - - Dated:- 7-1-2016 - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issued Notification No. 142 of 2002 on 26.12.2002 imposing preliminary anti-dumping duties. After hearing the interested parties and issuance of the disclosure statement, the DA issued its final findings in which it determined that the dumping margin for all exporters from Korea was 37.30%, except for HCC for which it determined a dumping margin of (-)4.2% (de minimis), and the dumping margin for all exporters from China was 84.05%, except for Chlor Shanghai for which it determined a dumping margin of 41.7%. The said order was passed on 04.08.2003 and a final Notification No. 142 of 2003 was issued by the Central Government on 23.09.2003. 2. Being aggrieved by the aforesaid Notification, the appellant in Civil Appeal No. 2242 of 2006 filed an appeal before the Customs, Excise and Service Tax Appellate Tribunal, Principal Bench, New Delhi (for short, the tribunal ) challenging the determination of the DA on anti-dumping duty. Two other companies, namely, M/s. National Aluminum Company Ltd. and M/s. Hindustan Lever Limited also preferred appeals challenging the imposition of anti-dumping duty on import of caustic soda. 3. Before the tribunal, it was contended by the complaint ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h if levied would remove the injury to the domestic industry and the date of commencement of such duty. The tribunal addressed the issue whether the allegation that in the case of HCC the normal value and export price had not been correctly determined as a consequence of which higher anti-dumping duty on HCC had been imposed and proceeded to hold thus:- 19.1 In case of M/s Hanwha Chemical Corporation, caustic soda was exported from Korea to India. The order for export was obtained by M/s Tricon who had filed the tender with M/s NALCO and whose tender was accepted. M/s Tricon for exporting caustic soda to M/s NALCO India placed order on M/s Hanwha Corporation to supply the goods to M/s NALCO and M/s Hanwha Corporation in turn obtained the goods from M/s Hanwha Chemical Corporation. We find that in this case the goods were exported from Korea to India irrespective of the fact that the tender was in the name of M/s Tricon, USA. Therefore, Designated Authority has to determine a definite CIF export price at which the goods were exported from Korea to India. When the CIF export price is available from Korea to India then it has to be taken as the export price. To reach the ex-facto ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dian demand, therefore, the investigation covers all other of imports whether by NALCO or others. 6. After so holding, the tribunal opined that in case of HCC cost had been correctly determined by the DA taking the chlorine as a co-product and separating its manufacturing cost during the process of manufacture of caustic soda at the stage of separation of chlorine and caustic soda on the basis of the value of production and the same principle should have been adopted by the DA in case of domestic industry. The tribunal opined that the identical treatment was not given to the domestic manufacturers and HCC. After so holding, the tribunal proceeded to deal with the non-injurious price and opined thus:- 22. While determining the non-injurious price for the like article for the domestic industry, the Designated Authority has used the actual verified cost of production of the subject goods to determine optimum cost of production for domestic industry taking into account the normatted base consumption norm of all the participating domestic industry and the actual price of raw material which are consumed for production of caustic soda during the period of investigation. We find ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... jurious price, and consequently anti-dumping duty. 23. We, therefore, set aside the impugned notification No. 142/2003-Cus dated 23rd September, 2003 and the final findings of the DA on non-injurious price and injury margin. We remand the case to the designated Authority for a fresh determination of non-injurious price and injury margin by reasonably and equitably distributing the cost of production between chlorine and caustic soda and issue final finding afresh on that basis in accordance with law and in the light of this judgment. 8. We have heard Mr. Basava Prabhu Patil, learned senior counsel for the appellant in Civil Appeal No. 2242 of 2006, Mr. Yashank Adhyaru, learned senior counsel for the appellant-Designated Authority in Civil Appeal No. 3481 of 2006, and Mr. S.K. Bagaria, learned senior counsel for respondent no. 7. 9. Mr. Basava Prabhu Patil, learned senior counsel, assailing the judgment and order passed by the tribunal has urged that the tribunal was not justified in comparing the normal value of a foreign exporter with the NIP of Indian producers and further there was no warrant to direct the DA to determine cost of production for foreign exporters and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ria, learned senior counsel appearing for the respondent no. 7, per contra, would contend that voluminous documents were filed by the said respondent as the appellant before the tribunal, and accordingly the tribunal had applied the principle in M/s. Hanwha Chemical Corporation's case and taken note of the market price of Chlorine at the relevant time and, therefore, the judgment and order passed by the tribunal are absolutely impeccable and do not warrant any kind of interference by this Court in appeal. It is further propounded by him that the determination of Equal Economic Importance , as envisaged in paragraph 12 of Schedule III to the 1967 Rules having not been defined, cannot be restricted or confined to the sale price as reflected in the books of accounts of a domestic company but there has to be other permissible enquiry, regard being had to the commercial use. To bolster the said submission, he has read out few passages from the monograph issued by the Institute of Costing Work Accounts of India. 12. To appreciate the aforesaid submissions in proper perspective, we have carefully scrutinized the judgment rendered by the tribunal. On a perusal of the same, we find ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing country or territory) to India at less than its normal value, then, upon the importation of such article into India, the Central Government may, by notification in the Official Gazette, impose an anti- dumping duty not exceeding the margin of dumping in relation to such article. Explanation.-For the purposes of this section,- (a) margin of dumping in relation to an article, means the difference between its export price and its normal value; (b) export price , in relation to an article, means the price of the article exported from the exporting country or territory and in cases where there is no export price or where the export price is unreliable because of association or a compensatory arrangement between the exporter and the importer or a third party, the export price may be constructed on the basis of the price at which the imported articles are first resold to an independent buyer or if the article is not resold to an independent buyer, or not resold in the condition as imported, on such reasonable basis as may be determined in accordance with the rules made under sub-section (6); (c) normal value , in relation to an article, means (i) the compa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of such value and margin and if such anti- dumping duty exceeds the margin as so determined,- (a) the Central Government shall, having regard to such determination and as soon as may be after such determination, reduce such anti-dumping duty; and (b) refund shall be made of so much of the antidumping duty which has been collected as is in excess of the anti-dumping duty as so reduced. (2A) Notwithstanding anything contained in subsection (1) and sub-section (2), a notification issued under sub-section (1) or any anti-dumping duty imposed under sub-section (2), unless specifically made applicable in such notification or such imposition, as the case may be, shall not apply to articles imported by a hundred per cent export-oriented undertaking or a unit in a free trade zone or in a special economic zone. Explanation. - For the purposes of this section, the expressions hundred per cent export-oriented undertaking , free trade zone and special economic zone shall have the meanings assigned to them in Explanations 2 to sub-section (f) of section 3 of Central Excise Act, 1944. (3) If the Central Government, in respect of the dumped article under inquiry, is o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er in which articles liable for any anti-dumping duty under this section may be identified and for the manner in which the export price and the normal value of and the margin of dumping in relation to, such articles may be determined and for the assessment and collection of such anti-dumping duty. (6A) The margin of dumping in relation to an article, exported by an exporter or producer, under inquiry under sub- section (6) shall be determined on the basis of records concerning normal value and export price maintained, and information provided, by such exporter or producer: Provided that where an exporter or producer fails to provide such records or information, the margin of dumping for such exporter or producer shall be determined on the basis of facts available.; (7) Every notification issued under this section shall, as soon as may be after it is issued, be laid before each House of Parliament. (8) The provisions of the Customs Act, 1962, (52 of 1962) and the rules and regulations made thereunder, including those relating to the date for determination of rate of duty, assessment, non-levy, short levy, refunds, interest, appeals, offences and penalties shall, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... estic industry expressing either support for or opposition, as the case may be, to the application. (4) Notwithstanding anything contained in subrule (1) the designated authority may initiate an investigation suo motu if it is satisfied from the information received from the Collector 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 clause (b) of sub-rule (3). (5) The designated authority shall notify the government of the exporting country before proceeding to initiate an investigation. 16. Rule 11 deals with determination of injury. Rule 17 provides for final findings. To understand the import of the Section and the Anti-Dumping Rules, we may reproduce a passage from the S S Enterprise v. Designated Authority and others (2005) 3 SCC 337:- In our opinion, the interpretation of Rule 14(d) by Respondent No.1 and the Tribunal is incorrect and contrary to its language. The imposition of dumping duty is under Section 9A of the Customs Tariff Act, 1975 and the Rules and is the outcome of the General Agreement on Tariff and Trade (GATT) to whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... domestic manufacturers. Dumping, in the short term, may give some transitory benefits to the local cus- tomers on account of lower priced goods, but in the long run destroys the local industries and may have a drastic effect on prices in the long run. 18. Recently in Commissioner of Customs, Bangalore v. M/s G.M. Exports others 2015 (1) SCALE 169, while dealing with the concept of 'injury', a two-Judge Bench has observed:- It will thus be seen that the determination of material injury to domestic industry depends on a series of complex economic factors which are to be segregated from other factors which may also cause injury to the said industry. 19. It is pertinent to note that except M/s. Hanwha Chemical Corporation, the other exporters did not cooperate. However, it was the obligation of the complainant to establish that there was an injury to the domestic industry. For the said purpose, the endeavour was made to establish before the DA that it was a by-product and it succeeded in the said attempt. The tribunal, on being approached by the 7th respondent, has set aside the order and the notification. As is noticeable, the reversal has taken place on two c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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