TMI Blog2017 (3) TMI 633X X X X Extracts X X X X X X X X Extracts X X X X ..... behavior – in the form of import of other products, which can be adapted or altered for use as the product or articles that are subject to ADD. Whilst the decisive nature of the observations of the DA in past instances is facially compelling for a court to hold that there should not be a fresh inquiry, yet one cannot be oblivious to the nuanced nature of the circumvention procedure. The power to resort to it should be based on objective material. In the present case, the information, which the respondents rely upon is the stagnancy in demand of the article which is subject to ADD, and the pattern of increase in import of CRSS that is wider than 1250 mm. The Petitioners” argument that the subject matter of the previous orders and observations are the same in circumvention proceedings, is unpersuasive to this court. A superficial analysis no doubt could lead one to conclude it to be so; however, for doing that, this court would have to assume that reduction of size from 1250 mm width to lower than that, is not a process of assembling or making of a new article. Petition dismissed - decided against petitioner. - W.P.(C) 3544/2016, C.M. NOS. 15209/2016 & 25402/2016 - - - Dated:- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rse of proceedings relating to the said preliminary findings, various exporters and interested parties objected, seeking exclusion of CRSS with width above 1250 mm. However, in the preliminary findings dated 27.03.2009, the DA specifically observed that subject to further verification for the purpose of Preliminary determination and duties, the CRSS Coil with width more than 1250 mm was not excluded from investigations. Accordingly, the DA recommended imposition of provisional Anti-Dumping Duty ( ADD ) equal to lesser of margin of dumping and margin of injury on PUC which included CRSS with width above 1250 mm also. However, the PUC excluded CRSS Coil with a combination of thickness above 2mm and width above 1500mm for use in fabrication, AISI 420 High Carbon (0.82%- 0.40%) grade. These preliminary findings were slightly modified by Notification 14/06/2008-DGAD dated 22.04.2009 to exclude CRSS of Grade 430 BA Silver Ice exported by ThyssenKrupp Stainless International, Germany. 3. Based on the recommendations of the DA, the Central Government issued Customs Notification No. 38/2009-Customs dated 22.04.2009 imposing provisional ADD on the PUC. In this background, on 24.11.2010, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entification, Assessment and Collection of Anti-Dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995 [ Anti-dumping Rules ] does not cover recommendation of duties on products on which no anti-dumping duty was imposed in the first instance and therefore, the addition of tolerance would enhance the PUC. In the final findings, the DA held that there is no enhancement of the PUC that is being undertaken by the aforesaid Review. The DA held that the review was only for clarification with regard to prescribing tolerances in respect of width of the product under consideration and that neither has Jindal requested for enhancement of scope of the product, nor was it being considered. The DA, after noting that CRSS cannot be produced to its exact dimension held that there is a need for tolerance. It therefore clarified its earlier Final Findings dated 24.11.2009 by adopting the international standard of width tolerance of +30mm on Mill edge products and + 4mm on Trimmed edge products. It also held that: The Domestic industry has submitted that they are manufacturing up to width of1250 mm because of the demand of product having width up to 1250 mm only. The domes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r widths by the process of welding. In this regard ,the authority notes that in critical and sensitive applications like high pressure/high temperature equipments used in sectors like oil gas, petrochemicals, fertilizers etc. welding of smaller widths into higher widths is not technically feasible in view of safety considerations. Further weld joints are also not acceptable to customers in view of their proneness to corrosion. Thus feasibility of welding of smaller widths into higher widths is not established. Therefore, even if one may accept the claim of substitutability of higher width for lower widths on the basis of domestic industry s argument of nominal slitting cost, the vice versa is not established. l. In regard to two way substitutability, the parameter has already been laid down by the Authority in its final findings concerning antidumping investigation in respect of Sodium Tripoly Phosphate(STPP) from China PR in the following terms: 39. The information on record does not show any grade of technical STPP which is not being produced/supplied by the domestic industry. Further, with regard to difference between Food grade STPP and Technical grade STPP, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Union of India also issued Customs Notification dated 07.02.2012. Later, in terms of Rule 23 of the ADD Rules and on the basis of the application filed by Jindal seeking continuance of the ADD imposed on the PUC, the DA by Notification No. 15/04/2014-DGAD dated 17.04.2014 issued Initiation Notification for Sunset Review to analyze the effect of dumping of the PUC upon removal of the then prevailing Anti-dumping Duty and the recurrence of dumping injury upon the Domestic Industry on the removal of the said Anti-dumping Duty. The POI for the said Sunset Review was fixed by the DA to be 01.01.2013 to 31.12.2013 and further, the injury investigation period was considered as 01.04.2009 to the end of the POI viz. 31.12.2013. After considering the issue, by Notification No.15/04/2014-DGAD dated 12.10.2015 the DA issued Final Findings to the Sunset Review , recommending that there exists an imminent likelihood of increase in the amount of supply of the CRSS which was the PUC and this would eventually cause further injury to the Domestic Industry due to the dumping of the PUC. During the proceedings in the Sunset Review, Jindal had requested the DA to remove the restrictions placed o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... served that in this case, the review has been initiated for the scope of the product as defined in the final finding and as modified by subsequent reviews. The Domestic Industry did not file any application for the review of the scope of the product under consideration as it did in 2011. The information supplied by the Domestic Industry did not include information of excluded products. Even the cooperating interested parties were not asked to include the information relating to the excluded products. In view of this, the Authority cannot accept the arguments of the domestic industry for inclusion of the excluded grades within the scope of the product under consideration. 6. Further, on the basis of the said Final Findings of the Sunset Review dated 12.10.2015, the Central Government issued Customs Notification 61/2015-Customs dated 11.12.2015 continuing the imposition of ADD on the PUC. 7. It is contended that in the above background and in the light of specific submissions of Jindal and the DA s findings, it is clear that 1250 mm and more width CRSS related issues for imposition of ADD was examined and had been specifically excluded from the scope of PUC by the Central Go ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rms of Section 9A(5) read with rule 23(lB) of the Anti-Dumping Rules. Reliance is placed on the Supreme Court s decision in Rishiroop Polymers [2006 (196) ELT 385 (S.C.)]. The Authority points out that in the sunset review investigation the information used related to imports of widths above 1250 mm to analyze likelihood of dumping and injury, which is a legal obligation under Section 9A(5), and not for circumvention. It is stated that the new Anti-circumvention rules provide remedy in situations where circumvention of an existing anti-dumping duty is taking place. Rule 25 of the Anti-Dumping Rules addresses the specific issues concerning articles that are subject to anti-dumping which are imported in unassembled, unfinished or incomplete form and are assembled, finished or completed in India subject to conditions specified therein and where (a) the operation started or increased after, or just prior to, the anti-dumping investigations and the parts and components are imported from the country of origin or country of export notified for purposes of levy of anti-dumping duty; and (b) the value consequent to assembly, finishing or completion operation is less than thirty-fiv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... el for the petitioner urged that the DA in its notification and final findings held that since the consumer would purchase the article/product in the desired width to minimize losses, Jindal s contention with respect to interchangeability or use of strips with a larger width with those of the smaller width was considered. It is pointed out that Jindal did not address the fact that if sheets with greater width are used in applications where small width sheets are required, the result would be higher costs at the consumer s end. On this basis, Jindal s contentions were substantially rejected as commercially unviable and technically unfeasible. Reliance is also placed upon the DA s findings dated 05.12.2011 where it was observed that importing products of higher width and slitting it required a completely different operational set-up, in turn calling for substantial investment by the user, which too was commercially unfeasible especially for small and medium scale users due to the wastages and higher costs involved. 12. Sh.Tarun Gulati, learned counsel appearing for interveners in support of the petitioners, next submitted that as far as the question of change in the pattern of tra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... value consequent to such assembly, finishing or completion etc. should be less than 35% of the cost of the assembly, finished or completed article. Sh. Gulati submitted that none of these preconditions are met in this case because the product, i.e. CRSS with width greater than 1250 mm has entirely different commercial usage that was specifically excluded from levy of ADD; they are not unfinished or unassembled or incomplete, and in any event, the alleged portion of completion or finishing was not started just after or prior to the ADD investigations. In fact, the period claimed by Jindal for alleged circumvention was considered during the initial investigations and later during the sunset review. Furthermore, the DA, in the earlier findings conclusively held that it is commercially unfeasible to undertake slitting of CRSS to width greater than 1250 mm. 14. Learned counsel for the respondents argued that this Court should not intervene in writ proceedings given the nature of jurisdiction under Rule 25 and the preliminary stage at which the DA armed it. Learned counsel reiterated the submissions made in the counter affidavit of the UOI and pointed out that the pattern of imports ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n, rather, to its unwarranted exercise, given what according to the petitioners is, the history of the case. The petitioners rely on the observations- repeated at least in two proceedings, by the DA, about the technical and commercial unviability of importing 1250 mm or more wide CRSS and then cutting or slitting it to smaller width for use in India. 16. Section 9A of the Customs Tariff Act, 1975, which is relevant for a decision in this case, reads as follows: Section 9A. Anti - dumping duty on dumped articles (1) Where any article is exported by an exporter or producer from any country or territory (hereafter in this section referred to as the exporting 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, mea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch anti-dumping duty or by import of such article in an unassembled or dissembled form or by changing the country of its origin or export or in any other manner, whereby the anti-dumping duty so imposed is rendered ineffective, it may extend the anti-dumping duty to such article or an article originating in or exported from such country, as the case may be. (2) The Central Government may, pending the determination in accordance with the provisions of this section and the rules made thereunder of the normal value and the margin of dumping in relation to any article, impose on the importation of such article into India an anti-dumping duty on the basis of a provisional estimate of such value and margin and if such antidumping 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 anti- dumping duty which has been collected as is in excess of the anti-dumping duty as so reduced. (2A) Notwithstanding anything contained in sub-section (1) and sub-section (2), a notification issued u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... air trade practices. The 1995 Amendment to Section 9A was apparently made in pursuance to Article VI of the General Agreement on Tariffs and Trade 1994 (GATT 1994) which permitted anti-dumping measures as an instrument of fair competition. The concept of anti-dumping is founded on the basis that a foreign manufacturer sells below the normal value in order to destabilise domestic manufacturers. 18. An anti-dumping proceeding, leading to a determination as to whether any injury exists and if so, its margin, involves (through Rule 11 of the Annexure to the Anti-dumping Rules and other provisions under such rules) examination of the causal relationship between the dumped imports and the injury to the domestic industry . In this regard, the DA has to examine known factors other than the dumped imports which at the same time are injuring the domestic industry, and the injury caused by these other factors must not be attributed to the dumped imports. Factors which may be relevant in this respect include, inter alia, the volume and prices of imports not sold at dumping prices, contraction in demand or changes in the patterns of consumption, trade restrictive practices of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... levy (on the product, by resorting to other methods). Rules 25 to 28 of the Rules were introduced, by the Customs Tariff (Identification, Assessment and Collection of Anti-dumping Duty on Dumped Articles and for Determination of Injury) Amendment Rules, 2012. Under Rule 26, the DA is empowered upon receipt of application disclosing particulars regarding circumvention practices (that are covered by Rule 25) to investigate into the matter. Rule 26 (3) empowers the DA to suo motu assume jurisdiction to inquire if, and to what extent, there is circumvention. The procedure that is to be followed is the same ( mutatis mutandis ) as the procedure involved before levying anti-dumping duty. 22. The petitioner is correct in contending that the DA had gone into the question, and returned specific findings with respect to the improbability of importation of CRSS strips wider than 1250 mm and their size reduction for use as articles that are the subject of ADD. However, the nature of the inquiry that led to those findings (and observations) were in the context of likelihood of injury. The period covered in respect of those proceedings were 2009-2015. The nature of materials considered d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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