TMI Blog2016 (3) TMI 514X X X X Extracts X X X X X X X X Extracts X X X X ..... a foreign country would be unreasonable at the stage more so because such details are normally in the exclusive knowledge of the foreign parties. The applicant can only be asked to bring before the Authority, evidence which is reasonably available to it for the purpose of initiation of investigation during the course of which other parties would bring all relevant facts before the Authority for making the final determinations. Here for the purposes of initiation, the journal has been used only for prima facie satisfaction. As DA has determined for the purposes of initiation the major factors that, the products of the applicants constitute a major proportion in Indian production, support of other domestic producers on account of more than 50% of production of the like products produced and application has been made by or on behalf of the domestic industry, it has satisfied itself as to the criteria of standing in terms of Rule 5 of the Rules. Therefore, initial investigations can be initiated by the designated authority on the application of Tejas. Rules 2(b) of the Anti-Dumping Rules - Eligibility of Tejas as domestic industry - Held that:- as per the definition of domestic in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inery provisions. Section 12 of Customs Act, 1962 has no applicability or relevance to the levy of the anti-dumping duty which is levied in terms of Section 9A of the Customs Tariff Act, 1975. As regards the valuation of goods/items which are imported as parts/components embedded in some other goods, it is pertinent to mention that the provisions of Customs Valuation Rules framed under Section 14 of the Customs Act, 1962 are clearly capable of valuing even such imported goods which are found lying unclaimed in the middle of nowhere even embedded in other goods, separate transaction value thereof, (i.e. of the PUC) will not be available but non-availability of transaction value does not in the least lead to failure of assessment of value because Customs Valuation Rules are clearly capable of dealing with such situations. The exporter can declare the transaction value for the SDH Equipment separately. If such declaration is not found to be true or the transaction value is simply not available, the Customs Authorities would resort to the Customs Valuation Rules for the item subject to levy of anti-dumping duty. Therefore, the contention of appellant do not sustain. Inclusion of sof ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a, Advocate, Ms. Rita Jha, Advocate, Mr. A Mathews, Advocate, Ms. Arpita, Advocate, Mr. VL Kumaran, Advocate, Mr. Atul Gupta, Advocate, Mr. S Seetharaman, Advocate, Ms. R Sharma, Advocate, Mr. Rohan Shah, Advocate, Mr. Anay Banhatti, Advocate, Mr. Udit Jain, Advocate, Mr. Saurabh Kansal, Advocate And Mr. Amit Singh, Advocate For the Respondent : Mr. Ankit Mallik, Advocate, Mr. Amresh Jain, DR, Ms. Reena Khair, Advocate, Mr. Rajesh Sharma, Advocate, Mr. Jitendra Singh, Advocate And Mr. Madhav Rao, Advocate ORDER Per Mr. R.K. Singh : Appeals are filed against levy of Anti-Dumping Duty on Synchronous Digital Hierarchy System (SDH) vide Notification No.125/2010-Cus, dated 16.12.2010 based on/read with the Designated Authority s Final Findings with regard thereto. Background in brief: 2. On 21.04.2009, the Designated Authority in the Ministry of Commerce initiated investigations against the imports of SDH Transmission Equipment from China PR and Israel ( subject countries ). The initiation was made pursuant to an application filed by M/s. Tejas Network Ltd, ( Tejas ) which claimed status as domestic industry. It was alleged in the application that the SDH prod ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... make its final determination, the Additional Secretary appointed as Designated Authority was transferred and a new incumbent came in his place. No fresh hearing was afforded to the parties by the New Designated Authority, while passing the final findings, recommending duties on the imports of SDH equipment and its parts and components. The Central Government notified final duties. 5. Against the final findings and notification of the Central Government, the exporters and importers including M/s. Huawei Technologies Co. Ltd (Huawei), VMCL, and M/s. Prithvi Solution Ltd (Prithvi) filed appeals before CESTAT. By an order dated 11.08.2011, CESTAT allowed the appeals by way of remand as under: 15. Accordingly we allow these appeals by remand to the DA for affording post-decisional hearing to the appellants and for making such modifications to the final findings as may be necessary as a result of such post-decisional hearing. The respondent-domestic industry and other interested parties, if any, shall also be allowed to participate in such post-decisional hearing. Any modifications made in the final findings would be considered by giving effect to the same by the Government by c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Andhra Pradesh High Court in Writ Petition No. 22155 of 2009 dated 22-1-2010 . 8. The prayer for interim relief in the appeals filed by the exporters and importers against the Final Order dated 11.08.2011 of CESTAT before the Supreme Court, was decided as under: Insofar as interim relief is concerned order dated 31-8-2012 be read as follows: We have heard learned counsel for the parties on the question of interim relief. Having done so, we direct that the appellants shall continue to deposit the Anti-Dumping Duty in terms of Notifications dated 16th December, 2010, 12th April, 2010, 31st December, 2007 and 7th July, 2010 in an Escrow Account to be opened in the State Bank of India, Parliament Street, New Delhi. Appropriate orders in relation to the disbursement of the amount in the said account shall be made at the time of final disposal of the appeals. It is agreed that complete details of the amount to be deposited in terms of this order shall be furnished to the Authority concerned. Rest of order dated 31-8-2012 would remain as it is. 9. In the meantime, the Designated Authority implementing the orders of CESTAT, concluded its investigati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , and treatment of Tejas as a producer of STM 64 on this basis is erroneous. He produced a letter of BSNL denying purchase of STM 64 from Tejas during the relevant period. In the Final Findings, Designated Authority has changed its stand, and stated that Tejas sold STM 64 to Quicktel, which according to the appellant was a non-existent and thus STM 64 was wrongly included in the investigations. (viii) Designated Authority exceeded his jurisdiction, by including STM 256, and DXC which had not been imported into India, from the subject countries, during the relevant period in-as-much-as anti-dumping duty is attracted on dumped imports, and can not cover items, which are not imported. Arguments on behalf of Alcatel-Lucent Shanghai Bell Co. Ltd 11. Ld. advocate for Alcatel-Lucent Shanghai Bell Co. Ltd., China contended that (i) the scope and extent of product under consideration had been altered in the course of investigations, which was not legally permissible. The import data considered during investigation was for SDH equipment, whereas in the final notification, SDH equipment for electrical copper medium and microwave medium is excluded. Determinations relating to injury ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ular Ltd. and M/s. Tata Teleservices Ltd. 12. Ld. counsel for these importers contended that (i) Section 9A ibid envisages, an enquiry in respect of an article and not multiple articles. (ii) Rule 4 of the Customs Tariff (Identification, Assessment Collection of Anti-Dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995 (hereinafter Anti-dumping Rules ) requires DA to identify the article liable for anti-dumping duty and so do Rules 6, 10 and 11 of the Anti-Dumping Rules. Thus, Designated Authority had erred in including within the scope of investigations more than one article . (iii) Where multiple articles are included within the scope of an investigation, there should be a domestic industry for each of such articles, and the applicant must demonstrate that it has a major proportion, in the production in India for each of such articles. A separate dumping margin, is required to be determined for each such article. The Authority has included within the scope of investigation articles, which are unlike each other. (iv) The investigations were liable to be terminated under Rule 14 of the Anti-dumping Rules. (v) Domestic industry, as defined in Rule ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under consideration. (v) On the issue of the meaning of production, attention was drawn to para 13 of the Final Findings dated 10.02.2012. (vi) On the issue of polling to be carried out in terms of Rule 5 of the Rules, attention was drawn to para 43 of the second final findings. Submissions of Domestic Industry 14. Ld. advocate for Domestic Industry pleaded/contended as under:- (i) Tejas Networks Ltd established in the year 2000, is a pioneering telecommunications company which has over 70% of its workforce deployed in R D. Tejas has won many awards for excellence and innovation. (ii) Apart from Alcatel Lucent, none of the exporters have disputed the fact of dumping, except to say that the scope of the product had not been appropriately defined, or that there was no properly constituted domestic industry. It is a settled legal position, in cases of dumping, duties must be imposed, subject to the existence of injury. (iii) Dumping is quantified as the difference between the export price to India, and the normal value for the product in China or Israel. The dumping margin in the present case, has been computed on an apple to apple comparison. The Authority has devised ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n if the imports of standalone components from China are considered to be product under consideration, Tejas would not be disqualified as a domestic industry. At all points of time, DA has had the discretion to exclude or not to exclude producers, who are themselves importers of the dumped article. The total imports from China are about 4% of the total cost of production of the like article, and less than 1% of total imports of the subject goods from China into India. The imports being insignificant, and the principal activity of Tejas not being one of import from China, Tejas retains its status as a producer, and the injury can not be said to be self inflicted. In this context, attention was invited to the decision of the Madras High Court, in the case of Nirma Ltd. Vs. Saint Gobain Glass India Ltd. [2012 (281) ELT 231 (Mad.)] and other decisions of the CESTAT referred to later. (ix) It is permissible for the Authority to include within the purview of the PUC, assemblies, sub-assemblies, parts and components, which if not included, would make the levy ineffective because otherwise the exporters could easily circumvent the duty by importing such items and assembling them in India ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the proprietary software, would be within the scope of levy, only if they are meant for SDH application. Submissions of Revenue 15. Ld. Departmental Representative appearing on behalf of Revenue supported the findings and the Notification, on the ground that the Designated Authority had examined the issue in depth and passed a speaking order. It was further submitted, that since the issuance of the notification, many cases of circumvention of duties had come to the notice of the Department, where the equipment was imported as parts, or sub-assemblies in CKD or SKD, intended for use as SDH equipment. In many of these cases, the importers had deposited the duties subsequently. It was further pointed out, that survival of the local telecom equipment manufactures was necessary in public interest, since cases of espionage had been detected in India and other countries. As regards inclusion of parts and components, it was submitted that SDH was a technology, and any part or component containing such technology was subject to the levy. He drew distinction between production and manufacture. He stated that R D required to manufacture a product will be part of the process of prod ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mping, (ii) injury, where applicable; and (iii) where applicable, a causal link between such dumped imports and the alleged injury, to justify the initiation of an investigation. 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 article 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 clause (b) of sub-rule (3). (5) The designated authority shall notify the government of the exporting country before proceeding to initiate an investigation. The scope and extent of Rule 5 has bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s order dated 15-10-2001, commencing from para 50 onwards states, that the applicants have a standing to file an application and further says in its order, that based on the confidential and non-confidential evidence produced before it, the matter requires to be examined. This opinion requires to be framed by the designated authority based on the evidence made available and produced before it by the applicants. This Court normally in exercise of its judicial review would not disturb the opinion of the designated authority or the Central Government. This Court only looks into whether the opinion formed by the designated authority is in consonance with the provisions of the Act and the Rules framed thereunder. This Court also will not interfere with the opinion formed by designated authority or the Central Government unless that opinion is either wholly arbitrary or unreasonable or no reasonable person would come to such a conclusion or if it is in violation of statutory provisions. In my opinion, in the instant case, the designated authority rightly and correctly understanding the scope of Secs. 9A and 9B and also Rule 5(1) to 5(5) of the Rules, has initiated investigation proceedin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... excavated marble? We find that the High Court has gone into questions of fact to resolve this question. The resolution of questions of fact such as this should, we think, be best left to the fact finding authorities constituted under the relevant statue. The High Court should not have interfered, in a writ petition, at the stage of show cause notice to take over that fact finding investigation. 60. The same view has been taken by the Hon'ble Supreme Court in the case of CCE Vs. Charminar (supra) the at the writ petition against the show cause notice is not maintainable. 61. I am fully convinced with the submissions made on behalf of the respondents that it is a mere initiation notification, which is nothing but in the nature of show cause notice. In the case of Automotive Tyre Manufacturers Association Vs. Designated Authority, [2011 (270) ELT 727 (T)], CESTAT held as under:- As regards the challenge to the sufficiency of information for initiation of the anti-dumping investigation raised by the appellants, firstly it is rather too late to challenge the initiation when the final findings have been rendered, the same has been accepted by the Government and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is not in the nature of decision but merely a start of an investigation. The certainty on the existence of all the elements necessary to levy a duty is reached gradually as the investigations move forward. The evidence to be furnished for the purposes of initiation is that which is reasonably available to the applicants. The nature of evidence at the stage of initiation need not be of the same quality and quantity as required for final imposition of the Anti-Dumping duty. We find that the domestic industry submitted a detailed petition containing evidence regarding dumping, injury and causal link, a copy of which was submitted to us in the course of hearing. The petition mentions that there are 4 producers in India:- (i) Tejas Networks Ltd (ii) ORDYN Technologies Pvt Ltd (iii) Measurement and Controls Ltd and (iv) Bharat Electronics Ltd The share of Tejas during the POI has been given as 84.7%. CMAI (Communication Multimedia and Infrastructure) has given a letter to the Designated Authority stating as under: While the association does not maintain accurate information, with regard to production or supply by different companies or demand in India. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nguishable on facts, since in that case, the journal was used as a basis for determination of normal value in the Final Findings, whereas in the present case, a journal has been used only for prima facie satisfaction, for the purposes of initiation. DA has also dealt with this issue as under in the Second Final Findings: 42.The reasoning of the CESTAT in Dye Stuff Manufacturers Association vs. Designated Authority is not applicable to the present case. In the matter of Dye Stuff Manufacturers Association vs. Designated Authority, the magazine was not periodically reporting the price of Aniline. Instead the magazine had carried an article on Aniline and mentioned the price of Aniline in the market. In the instant case, however, the interested party agreed that Voice and Data magazine regularly mentions the relevant information. Further, the credibility of voice and data magazine gets established if information contained in the journal with regard to operations of Tejas are compared with the actual operations of Tejas. 20. Regarding this issue, the notice of initiation states that the application has been filed by Tejas, who is a major producer of the product in India. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2(b) domestic industry means the domestic producers as a whole engaged in the manufacture of the like article and any activity connected therewith or those whose collective output of the said article constitutes a major proportion of the total domestic production of that article except when such producers are related to the exporters or importers of the alleged dumped article or are themselves importers thereof in such case the term domestic industry may be construed as referring to the rest of the producers only. 46. Thus, Rule 2(b) of the AD Rules provides that domestic producers which are related to the exporters or importers or which are themselves importers of the allegedly dumped articles may be excluded when determining the domestic industry in certain situations. As the use of the word may in Rule 2(b) suggests, the two types of producers in question, i.e. related producers and producers importing the alleged dumped product, are not automatically excluded from being part of the domestic industry. Rather, it is the consistent practice of the investigating authorities that the exclusion of such producers must be decided on a case-by case basis, on reasonable and eq ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esign, coding, testing, simulation of the same. (iii) Embedded Software team does designing, coding, simulation, target testing, and regression of node software which is the integral part of the equipment for its functioning as various features offered in the products are captured here. (iv) Mechanical team does Mechanical design, development, simulation and proto testing of the products and modules. (v) Manufacturing team designs, develops the software, test-jigs used to test the product during mass production. (vi) Network Management System team does designing, coding, simulation, testing, regression of Element management system software (EMS) and Network management system software (NMS) which is used for managing SDH equipment centrally from a single terminal through Point and Click Provisioning by Graphical User Interface. A prototype of the SDH Equipment is produced in India, containing all required hardware and software. (c) Product Verification (In-House in Bangalore India) A core team of Product Verification personnel test both the Hardware and Software on the Product and after testing, approve the Product for final release for manuf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in India. (v) After completion of Testing, the boxes are packed and shipped to respective locations as specified by the Customer from India. (vi) On occasions, customers also visits the Tejas manufacturing facility for the testing and Acceptance of the boxes at the manufacturing facility in India. (f) Post Shipment Support, upgradation and Bug fixes Process (In-House in Bangalore and other customer support centers in India): Tejas as part of its process has made all efforts to provide full and comprehensive post shipment support to the Customers from India . 23. The above process flow clearly shows that substantial activities are being carried out by Tejas or by job workers on its behalf both in India and outside India. SDH is a technology product where the value arises on account of the knowhow contained in the product. This is evident from the fact that more than 70% of the cost is on account of Research, Design and Development expenses. Tejas has developed the knowhow and technology for the product in India. Based on the knowhow and technology a prototype is prepared. This prototype contains all the necessary hardware and software for SDH equipment. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... argued by ld. Departmental Representative with the substantial activities undertaken by Tejas, it is clearly covered within the scope of producer . 24. The second requirement under Rule 2(b) of the Anti-Dumping Rules is that the applicant must have a major proportion in the Indian production. CESTAT, in its judgement in the case of Lubrizol India Pvt. Ltd. Vs. Designated Authority [2005(187) ELT 402 (Tri - Del)], has dealt with the term major proportion as under: 15.1 We may note here that the words major proportion of the total production in Rule 2(b) defining the domestic industry are also capable of being construed so as to mean significant proportion or important part of the total production which may not necessarily exceed 50%. The word major , as per the Oxford Dictionary, means important, serious or significant . The word proportion , in the context, would mean share. Therefore, the expression major proportion would, in the context, of total production of domestic industry, mean significant or important share. Such an interpretation is clearly permissible and going by it, the share of the petitioner in the total domestic production, being more than 31%, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fficial website of Department of Commerce). Further they have admitted having imported components but have been silent on the issue of complete equipment as well, which came to the notice of the Authority during the verification of data of one of the responding exporters from China PR. To sum up, apart from seeking extension in time to file a response to the information sought by the Authority, which was allowed by the Authority, nothing of substance was provided to the Authority except repetition of what had been stated by them earlier from time to time. The Authority holds that all the issues raised by them earlier and repeated in their submissions dated 6th August have already been addressed in the paragraphs here-in before and need not be repeated. Extract of Second Final Findings 32. It has been alleged that although there are a number of other manufacturers, Tejas has been considered to have the necessary standing of constituting a major proportion of the total domestic production within the scope of Rule 2(b) of the AD Rules. In this context, the Authority notes that initially, after the initiation of investigation, apart from Prithvi and VMCL, no other so called ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of an article which is incomplete or unfinished but having the essential character of the complete or finished article (including blank , that is an article, not ready for direct use, having the approximate shape or outline of the finished article or part, and which can only be used, other than in exceptional cases, for completion into a finished article or a part), into complete or finished article shall amount to manufacture . Thus, mere fact of payment of excise duty would not entitle Prithvi and VMCL to sustain their claim for grant of status as domestic producer. No material was furnished by them to demonstrate the nature of activities carried out by them. They neither filed importer response nor domestic industry response in the prescribed format. They also did not respond to the specific request of DA for information in this regard. In these circumstances, Designated Authority cannot be faulted for not treating Prithvi and VMCL as domestic producers. 25. It was also argued by the appellants that Tejas being an importer of subject goods from China was excluded from the purview of domestic industry. While the domestic industry contended that it had not import ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt to take note of the terms of the international agreements for the purpose of better appreciation of the term. 58. We, therefore, hold that the term domestic industry , as it was amended on 27-2-2010, has not taken away the discretionary power of the Designated Authority and the Designated Authority is entitled to proceed further. The Calcutta High Court in the case of State of Gujarat Fertiliser Chem. Ltd. Vs. Addl. Secretary D. A., [2012 (286) ELT 348 (Cal.)] held as under: - 13. Bearing aforesaid legal position it is incumbent for this Court to see what could be real and rational object for employing the definition of domestic industry and this could be gathered upon reading the object of the said Rule. The Supreme Court has explained why the aforesaid rule has been framed by the legislature. In case of Reliance Industries Ltd. v. Designated Authority and Others reported in (2006) 10 SCC 368 = 2006 (202) E.L.T. 23 (S.C.) in paragraph 48 it is clearly mentioned the object of framing this Rule. We cannot do better than to reproduce the paragraph 48 of the said report:- The anti-dumping law is, therefore, a salutary measure which prevents destruction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urations / capacities is appropriate and permissible under the Act and the international agreements. 27. Before dealing with the arguments and counter arguments, we note that the Supreme Court, in its recent decision in the case of G M Exports [2015 (324) ELT 209 (SC)] elucidating the broad principles of interpretation of a statute made to enforce a treaty obligation, held as under: 23. A conspectus of the aforesaid authorities would lead to the following conclusions: (1) ?Article 51(c) of the Constitution of India is a Directive Principle of State Policy which states that the State shall endeavour to foster respect for international law and treaty obligations. As a result, rules of international law which are not contrary to domestic law are followed by the courts in this country. This is a situation in which there is an international treaty to which India is not a signatory or general rules of international law are made applicable. It is in this situation that if there happens to be a conflict between domestic law and international law, domestic law will prevail. (2) In a situation where India is a signatory nation to an international treaty, and a statute is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uct because they were not all like each other. 7.45 According to Norway, the obligation to ensure that all categories making up the product under consideration are like each other follows as a logical consequence from what it argues is a requirement under Articles 2.1 and 2.6 for investigating authorities to ensure that any product category making up the like product must be individually like each and every separate product category making up the product under consideration. Thus, a threshold question for us is whether Norway's premise, that Articles 2.1 and 2.6 require all product categories making up the like product to be each individually like each and every separate product category making up the product under consideration, is correct. If it is not, then Norway's legal argument is incorrect, and we need not consider its contentions regarding the facts of this case. . . . . 7.47 Beyond stating that the language of Article 2.1 reveals that a determination of dumping can only be made through a comparison of the prices of an exported product referred to as the 'product under consideration' and a 'like product' , Norway prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3 In our view, even assuming Article 2.6 requires an assessment of likeness with respect to the product under consideration as a whole in determining like product, an issue which is not before us and which we do not address, this would not mean that an assessment of likeness between categories of goods comprising the product under consideration is required to delineate the scope of the product under consideration. Merely to say that the product under consideration must be treated as a whole in addressing the question of like product does not entail the conclusion that the product under consideration must itself be an internally homogenous product. We can see nothing in the paragraph from the Appellate Body Report in US Softwood Lumber V, relied upon by Norway, which would indicate otherwise. Treating the product under consideration as a whole means that a single dumping margin is calculated for that product, however defined, but says nothing about the scope of that product. . . . . 7.56 Norway's position would, in our view, require that any difference between sub-categories, or even individual goods, within a product under consideration would mean that each m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e a decision as to the scope of that investigation, and give notice of the product involved , we are not persuaded that either Article 2.1 or Article 2.6 of the AD Agreement establish a requirement for making an elaborated determination in that regard. 7.58 Essentially, Norway's argument raises an issue of policy, suggesting that the absence of limits on the scope of the product under consideration might result in erroneous dumping determinations by investigating authorities. Norway argues that, if products that are not like are treated as the product under consideration in a single investigation, a dumping determination cannot reveal whether some or all of those products are dumped. Norway gives, as an example, in investigation in which cars and bicycles are treated as one product under investigation. We are not persuaded by Norway's extreme example. Any grouping of products into a single product under consideration will have repercussions throughout the investigation, and the broader such a grouping is, the more serious those repercussions might be, complicating the investigating authority's task of collecting and evaluating relevant information and making det ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e averaging ), all such segments must belong to a group of products meeting the definition of likeness, citing in this respect, a statement by the Appellate Body in EC Bed Linen . . . . 7.64 Article 3.6 is a provision about what information an investigating authority may evaluate in considering the effects of dumped imports for the purpose of determining injury to a domestic industry.244 It simply has no bearing on the question of product under consideration. Article 3.6 addresses a particular question about the data to be considered in an investigating authority's inquiry into the effects of dumping. This happens, in every investigation, after the product under consideration has been defined, the domestic like product has been determined pursuant to Article 2.6, and the relevant domestic industry has been determined pursuant to Article 4.1, which defines domestic industry for the purposes of the AD Agreement. Article 4.1 makes clear that the starting point for the identification of the domestic industry is the like product . Norway's argument, on the other hand, would entail a consideration of the production activities of the domestic industry in the definiti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8 14 91, 7318 14 99, 7318 15 59, 7318 15 69, 7318 15 81, 7318 15 89, ex 7318 15 90, ex 7318 21 00 and ex 7318 22 00. Fasteners are used to mechanically join two or more elements in construction, engineering, etc., and are used in a wide variety of industrial sectors, as well as by consumers. Based on their basic physical and technical characteristics and end uses, all fasteners are considered to constitute a single product for the purpose of the proceeding. Within the same national or international standards, fasteners should comply with the same basic physical and technical characteristics including notably strength, tolerance, finishing and coating. The Commission went on to consider, and reject, arguments by the parties, concerning the scope of the product under consideration. 7.263 Beyond noting that Article 2.1 requires that the comparison that must be made to determine whether there is dumping must be carried out between the export price of a product and the price for the like product ... in the exporting country , China does not address this provision in its arguments. We agree that Article 2.1 refers to a product as being dumped, but cannot see that it establishes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the product under consideration might result in erroneous dumping determinations by investigating authorities. China argues that, if products that are not like are treated as the product under consideration in a single investigation, a dumping determination would not reflect a comparison between a product's export price and the domestic price of its like product. China gives, as an example, an investigation in which apples and tomatoes are treated as one product under investigation. China argues that the investigating authority could compare the prices of the apples and find they are dumped, and could compare the prices of the tomatoes and find they are not dumped, but an anti-dumping duty would nonetheless be imposed on both apples and tomatoes, which would be an unfair result. 7.271 Moreover, we consider it noteworthy that, while the AD Agreement specifically defines like product by requiring a comparison between domestically-produced or foreign goods and the imported goods that are the product under consideration, there is no specific definition of product under consideration . In our view, the very fact that there is a definition of like product in the AD Agreeme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... our view, the determination of product scope by Designated Authority is sustainable. Regarding the contention that the scope of PUC has been altered during the course of investigations, Designated Authority is required to come to a final determination only after consideration of the contentions of all interested parties and in the process, the scope of PUC may get altered but that would not vitiate the proceedings so long as the principles of natural justice are complied with in respect of the interested parties which has been done in this case. 28. As regards the parts and components, it is contended by the appellants that there is no domestic industry for the part and components, and hence no duty can be imposed on their import. Ld. advocate for the domestic industry contended that (i) the course of production of SDH Equipment by Tejas, various parts, components and sub-assemblies come into existence. Tejas is a producer of all the items, which arise in the manufacturing process, even though these items are not produced for sale, but for captive consumption. (ii) DA has devised a PCN system, which enables determination of the dumping and injury margin, for each part, component ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d or removable, and they may be attached on opposite sides or on the same side of the lawn groomer. Lawn groomers designed to incorporate a hitch, but where the hitch is not attached to the lawn groomer, are also included in the scope of the investigation. Lawn sweepers consist of a frame, as well as a series of brushes attached to an axle or shaft which allows the brushing component to rotate. Lawn sweepers also include a container (which is a receptacle into which debris swept from the lawn or turf is deposited) supported by the frame. Aerators consist of a frame, as well as an aerating component that is attached to an axle or shaft, which allows the aerating component to rotate. The aerating component is made up of a set of knives fixed to a plate (known as a plug aerator), a series of discs with protruding spikes (a spike aerator ), or any other configuration, that are designed to create holes or cavities in a lawn or turf surface. Dethatchers consist of a frame, as well as a series of tines designed to remove material (e.g., dead grass or leaves) or other debris from the lawn or turf. The dethatcher tines are attached to and suspended from the frame. Lawn spreaders con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng is defined as a component housing the brush assembly, and consisting of a wrapper which covers the brush assembly and two end plates attached to the wrapper; 2) a sweeper brush; 3) an aerator or dethatcher weight tray, or similar component designed to allow weights of any sort to be added to the unit; 4) a spreader hopper; 5) a rotating spreader plate or agitator, or other component designed for distributing media in a lawn spreader; 6) dethatcher tines; 7) aerator spikes, plugs, or other aerating component; or 8) a hitch. b. Diamond Sawblades and Parts Thereof From China and Korea All finished circular sawblades, whether slotted or not, with a working part that is comprised of a diamond segment or segments, and parts thereof, regardless of specification or size, except as specifically excluded below. C. Gray Portland Cement and Cement Clinker from Japan; The products covered are cement and cement clinker. Cement is a hydraulic cement and the primary component of concrete. Cement Clinker, an intermediate material produced when manufacturing cement, has no use other than grinding into finished cement. d. Hand Trucks ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ority considered the arguments of the interested parties on exclusion of some of these types and holds as follows in this regard: i. STM-1, 4, 16 - There is no dispute that these products are rightly included within the scope of the product under consideration; ii. STM-64 - The interested parties argued that the petitioner has not offered STM-64 in commercial volumes. It has also been argued that largest Public Sector Company operator (BSNL) has not bought STM-64 from the petitioner. The Authority, however, holds that STM-64 is rightly within the scope of the product under consideration for the following reasons (a) Tejas has produced and sold STM-64 in Indian and overseas markets as was verified by the Authority through its investigating team; (b) Even if Tejas has sold some volumes in the export markets, the product type cannot be excluded, as the fact of like article produced by the domestic industry gets established (the Authority notes that rule 2(b) read with 2(d) implies that the domestic industry should have manufactured like article. It is unnecessary to require that the domestic industry should have sold like article in domestic market). On the spot ver ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the investigating team establishes that Digital Cross Connect of SDH technology has been produced and supplied by the petitioner during the investigation period. The cost and price information included in the injury information and injury margin assessment includes the production and sale of digital cross connect of SDH technology. The Authority, therefore, holds that digital cross connect of SDH technology are rightly within the scope of the product under consideration. However, since digital cross connects are produced in other technology as well, it is clarified as a matter of abundant precaution that digital cross connect of other technologies are beyond the purview of the product under consideration and present investigations. v. SKD/CKD form of SDH equipment Interested parties largely concede that SKD/CKD form of SDH is rightly within the scope of the product under consideration. As is seen from the production process, the product is an assembly of a number of cards, components, assemblies and sub-assemblies. It is quite possible that the product is transported in its SKD/CKD form. In fact, the product is in general invoiced in SKD/CKD form only. The producers do not r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt at the stage of implementation or might lead to demand for collection of duty even when the same may not be justified. The domestic industry on the contrary has sought inclusion of parts and components on the premise that their exclusion will leave a big scope for circumvention. They have pleaded that imports of components as raw material or inputs must be distinguished and differentiated with imports of SDH in component form (with IPR being supplied without customs check/control/clearance). They have further submitted that the domestic industry is not against imports of components as inputs. Domestic industry is against import of product in the form of components, using the same Chinese IPR and then assembling the product in India as this tantamounts to continued dumping in different form. The Authority has taken note of the fact that parts and components are not manufactured by the Domestic Industry, and the domestic industry for parts and components is not before the Authority. The Authority further notes that parts and components used in SDH equipment have multiple usages and do not have a dedicated usage in SDH equipment alone. The Authority, after going into the detail ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deration. 30. The appellants argued that the domestic industry has not offered STM-64, and therefore, it should be excluded from the scope of PUC, as the largest Public Sector Company (BSNL) has not bought STM-64 from Tejas. We note that the DA has found that Tejas has produced and sold STM-64 in Indian and overseas markets including to QuickTel, which is an Egyptian Telecom Company. The argument of the appellant that Quicktel is nonexistent is without basis as copies of the purchase order of Quicktel, as well as extracts from media reports concerning Quicktel were shown to us. 31. As regards STM256, it has been argued that this product was neither produced in India nor imported into India from the subject countries during the period of investigation. This in our view is not material as the investigation is qua the product, and not the types of the product. We agree with the counsel for the domestic industry that as long as the product is imported duty can be imposed on all types of such product provided such type is in commercial competition with the like article made in India and can cause injury on its import. STM 256 is a higher version of STM 64. STM256 if offered at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mercial competition with like article and can cause injury to the domestic producer they can be covered by the scope of levy. The decision in the case of Andhra Petrochemicals Ltd. Vs. Designated Authority (supra) relied upon by the appellants is distinguishable on facts. In that case, CESTAT found that the product under consideration or article, had not been correctly defined, and that each Acyclic Oxo-alcohol was a separate article, for which separate dumping and injury was required to be examined. It is in that context that CESTAT held that an article, which has not been imported, can not be subject to levy. CESTAT decision in the case of Andhra Petrochemicals Ltd. Vs. Designated Authority (supra) is not applicable here as in the present case, STM256 is not a distinct or separate product, but one type of SDH equipment, that is PUC. 32. The appellants also contended that Section 12/14 ibid deal with the levy of duty and valuation of goods imported and not with the parts/components constituting those goods and therefore levy of anti-dumping duty would fail in respect of goods not imported (e.g. STM 256) or SDH equipment which came embedded in the goods imported. In this regar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exporter can declare the transaction value for the SDH Equipment separately. If such declaration is not found to be true or the transaction value is simply not available, the Customs Authorities can/would resort to the Customs Valuation Rules for the item subject to levy of anti-dumping duty. We do not therefore, find any merit in the contention of the appellants. D. Other issues:- 33. The appellants also pleaded that the post decisional hearing was a mere formality and in violation of the direction of the Tribunal. In this context, we note that in the original (first) investigations, hearing was held before one officer and order was passed by another and therefore the matter was remanded by CESTAT for affording hearing to all the parties. In terms of Rule 6(6) of the Anti-Dumping Rules, what is orally presented before the Designated Authority is to be taken into consideration only when the same is subsequently reproduced in writing. We find that the arguments raised in the original proceedings as well as in the remand proceedings were essentially the same. None of the appellants brought to our notice any new facts or grounds presented in the second round which were not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its export sales statement a number of times. As brought out in the verification report sent to the company, the export sales information of the company remained un-verified. The Authority is unable to accept the argument that the product coding system followed by the Authority was too complicated and prevented the company from providing the desired information. Indeed, a number of producers in subject countries have participated in the present investigations and have 69 provided information without expressing the kind of difficulties expressed by the company. Notwithstanding, the Authority had clearly stated while informing product coding system to the interested parties that the exporters were free to modify product coding system or use their own system, should they find the system proposed by the Authority is insufficient/ inadequate or cumbersome. In any case, nothing prevented the exporter from providing information on both the basis - the product coding system followed by the Authority and product coding system followed by the company. 112. The product under consideration is essentially an assembly of a number of electronic cards and sub-assemblies. In fact, the produce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he subject exporter have already been explained in the disclosure statement as well as in these findings. Consequently it has also not been possible for the Authority to determine the individual DM and IM for the subject exporter. Moreover, the product under consideration is not a simple homogeneous product but a complex one with a number of variants. Therefore the Authority holds that such an undertaking, proposed by them is impractical; Rule 15(3)) refers. Given such non-cooperation on the part of Huawei as recorded by Designated Authority, it cannot be faulted for rejecting the undertaking. 36. As regards the contention that market economy treatment was wrongly denied to Alcatel Lucent Shanghai Bell Co. Ltd and normal value was incorrectly determined. We find that DA has dealt with this aspect in Paragraph 93 of the findings: - 93. The Authority notes that, the company, during the course of verification submitted that the decision making is not affected or influenced by the government nominees on the Board. However the Authority also notes that the company has, since inception, significant Govt. presence through share holdings by State departments. Over a period of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as to avoid circumvention as far as possible plugging the possible/obvious loopholes which can lead to circumvention. 38. According to the appellants, the notification is liable to be set aside on the ground of vagueness and they argued that the expression like for SDH application only is too vague to be acceptable in a taxing statute or exemption notification. We are unable to agree with this contention because expression for SDH application only is quite comprehensible and there is nothing too esoteric about it. In our view there is nothing so vague or incomprehensible about expressions like for SDH application only as to make it impossible or impractical to implement the anti-dumping notification. 39. The appellants also argued that software downloaded electronically cannot be subjected to anti-dumping duty due to absence of mechanism to levy and collect duty as has been held by CESTAT in the case of Oracle India Pvt. Ltd. Others Vs. C.C.(Export), New Delhi. (supra). We agree with the contention and find it pertinent to add that as no duty can be levied and collected on such downloads (as has been held by CESTAT in the case of Oracle India Pvt. Ltd.), the appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X
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