9911796707
TMI Blog2017 (3) TMI 633X X X X Extracts X X X X X X X X Extracts X X X X ..... by Customs Notification No. 38/2009 dated 22.04.2009 and thereafter extended through Customs Notification No. 61/2015 dated 11.12.2015 after sunset review. 2. The Petitioner, a private limited company is engaged, inter alia, in the business of importing and trading CRSS of width above 1250 mm from China, Japan and Malaysia and further, in manufacture and export of stainless steel products such as pipes, tubes etc. to various countries. On 25.11.2008 a notification was issued by the second respondent for initiating Anti-dumping investigation concerning alleged dumping of 600mm or more width cold rolled flat products of stainless steel (CRC) of all series viz. the Product Under Consideration ("PUC") originating in or exported from China PR, Japan, Korea, European Union, South Africa, Taiwan, Thailand and USA ("subject countries"). The period of investigation of the dumping was 01.01.2007 to 31.12.2007 in terms of the notification and the injury investigation period was specified as April 2004 to March 2007. On 27.03.2009 the second respondent (hereafter "DA") issued its preliminary finding in reference to the initiation notification. These findings concluded that (i) PUC was export ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s steel of the width of 600 mm upto1250 mm of all series further worked then Cold rolled (cold reduced) with a thickness of up to 4mm. However, the following were exclusions from the scope of the product: a) Grade AISI 4~0 High carbon (0.28%-0.40%), Grade 420, Grade 430 BA suppiied by M/s Thyssenkrupp Stainless International, Germany, Grade AISI 441 and Grade AISI 443. b) Duplex Stainless Steel grades 2205 (S31803), 2304(S32304), EN 1.4835, 1.4547, 1.4539, 1.4438, 1.4318 and 1.4833 and Ferritic Grades EN 1.4509 and 1.4512. c) Product supplied under Indian Patent no. 223848 in respect of goods comprising Low Nickel containing Chromium-Nickel Manganese-Copper Austenitic Stainless steel and representing Grades YU 1 and YU 4, produced and supplied by M/s Yieh United Steel Corp (Yusco) of Chinese Taipei (Taiwan)." 4. In the meanwhile Jindal had approached the Punjab and Haryana High Court by filing Writ Petition (bearing No. 6544 /2010). The High Court, by its Order dated 08.10.2010 disposed the aforesaid Writ Petition by directing that the challenge raised in the petition be also considered. Eventually, the proceedings culminated in the final findings of the Mid- Term Review da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and slit at very marginal cost. The Authority, however, notes that importing the product in higher width and then the process of slitting requires a complete operational setup calling for substantial investment on part of user industry, which is not commercially feasible for small and medium scale users as the same will result in wastages and higher costs. j. It is submitted by domestic industry that once Authority has considered the domestic product as "technically and commercially substitutable" like articles to imported products the question of actual production and supply does not arise. The Authority has noted as aforesaid that although it is technically possible for users to slit the higher widths it may not be commercially viable for the SME users in view of investment, wastages and higher costs involved. k. Further it is noted that while determining the like article, application of substitutability test has two dimensions. First, the substitutability should be both technical and commercial. Secondly, the substitutability should be both the ways. In the present case even though it is claimed by the domestic industry that slitting of higher widths into smaller width is t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d SDH cases and the available jurisprudence in the matter, the Authority confirms its original findings dated 24.11.2009 in regard to the exclusion of subject goods of higher widths, i.e. widths higher than 1250 mm, from the scope antidumping duty. Conclusion: 21. On the basis of examination of the issues raised by various interested parties including the petitioner in oral hearing held on 14.3.2011 followed by their written submissions and rejoinders and the evidence submitted by the petitioner vide their letters dated 23rd November 2009 and 14th July 2011 and on the basis of examination of post disclosure submission of interested parties the Authority has held that: a) The subject goods of width beyond 1250 mm were rightly excluded from the ambit of anti-dumping duty as held in the Authority's original findings No. 14/6/2008-DGAD dated 2411-2009. The said exclusion is maintained in view of the foregoing examination by the Authority." 5. In the above order, the DA accepted Jindal's arguments regarding inclusion of grades 420, 430BA, EN 1.4512, duplex grades 2205 and 2304 in the scope of the product under consideration for the purpose of imposition of anti-dumping duty as Ji ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gation. It has been further argued that the quintessential principle to define the scope of the PUC is whether the specific product is a "like article" to the product being imported or not. The underlying rationale of excluding certain product grades/types in the original investigation was that these products may not cause injury despite their being "like articles" on the premise that such products were not produced by the Domestic Industry. Now that the domestic industry produces and supplies these product types/grades/sizes continued exclusion of those product types/grades/sizes would adversely affect the domestic industry. 26. While there is some merit in the arguments of the domestic industry in a scenario where the product definition remains wide but certain restriction or exclusion has been placed only for the application and collection of duty. A careful examination of the case reveals that that is not the case here. The scope of the product under consideration itself has been restricted after detailed deliberation before proceeding for various determinations and the dumping and injury investigations are with respect to those included product types/grades/sizes only. There ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arbitrary and illegal exercise of its powers and without jurisdiction, issued the Impugned Notification No.14/01/2014-DGAD dated 19.02.2016 initiating investigations into alleged circumvention of ADD on CRSS, stating that CRSS of more than 1250 mm width are being imported and thereafter are being slit down, to similarly use these slit down CRSS Flat products as that of width equal to or less than 1250 mm and this entire process in question is an attempt to circumvent the prevailing Anti-dumping Duty imposed under Notification 61/2015- Customs dated 11.12.2015. The Petitioner had filed a letter along with authorization seeking inspection of the public file. Further, the DA, by its letter, dated 06.04.2016, had extended the time for filing response to the Questionnaire and the last date for filing the same was 02.05.2016. 8. The DA, which is the second respondent, defends its jurisdiction to carry out the anti circumvention investigation. It states that in the sunset review investigations final findings F. No. 15/04/2014-DGAD, dated 12.10.2015, despite observing that the anti-dumping duties are being circumvented by bringing widths above 1250 mm for eventual slitting into narrow wid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed products as well as the incidence of anti-dumping duties on the viability of the slitting operations. Only on being prima facie satisfied that the cost of slitting widths above 1250 mm would have price advantage rather than importing widths below 1250 mm on payment of anti-dumping, the investigation was initiated. It is argued that the DA has appreciated that Rule 25 (1) requires that the circumvention have started, or increased after, or just prior to, the antidumping investigations. The DA examined the trade trend from 2008-09 onwards as the initial anti-dumping duties were levied by Customs Notification No. 14/2010 dated 20.02.2010. The impugned notification in paragraph 4 under existing measures recognizes the measures levied under both the original and sunset review investigations. 10. The initiation of investigation has not caused any prejudice to any of the parties including the petitioner as the determination in terms of Rule 27 would only be made after full data and material is obtained from all the parties. The Authority has no jurisdiction to recommend anti-circumvention duty on any of the importers including the petitioner if the Petitioner through the questionnaire ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t were subject to judicial scrutiny and have subsequently attained finality. It is contended that even in review proceedings, it is not open to the DA to extend the scope of goods that were the subject matter of the original proceedings; the impugned notice and proceedings are, therefore, without authority of law. 13. It is pointed out that the recourse to anti-circumvention procedure by Jindal is disingenuous given the fact that such proceedings are premised upon a very low threshold for initiation. Learned counsel points out that the DA's questionnaire not only requires cost and sale for width above 1250 mm but requires such information relating to PUC in earlier investigations, making it more burdensome than preparing for and filing of questionnaire in an anti-dumping investigation. Learned counsel also points that Rule 25 which the respondents relied on in the present case, can only be invoked upon fulfillment of specified conditions, i.e. firstly it should be in respect of an article that is subject to ADD; secondly that such article should be imported in unassembled, incomplete, unfinished or unassembled manner; thirdly, such operation of assemblage should have started or in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e PUC. It is a matter of common sense and logic that circumvention is not always through a simple method and that it involves resorting to indirect patterns of market behavior. Therefore, circumvention investigation is entirely different from enquiry and investigation into the PUC leading to imposition of an anti-dumping duty. It is furthermore argued that even though in the ADD proceedings, the DA concluded that it was technically and commercially unfeasible for the importers to use sheets of greater width over PUC, the significant change in the import pattern coupled with no significant change in the consumption requirements needed to be looked into closely, for which circumvention investigation was essential. Thus, there is no bar to such an investigation. Analysis and Conclusions 15. It is common ground that ADD has been levied on CRSS with a width less than 1250 mm; that duty was maintained in final findings, review of such findings and sunset review proceedings. The petitioner (and interveners) complains that initiation of circumvention proceedings is factually unfounded and also legally indefensible. It is also common ground that anti circumvention measures can be taken u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the sales in the domestic market of the exporting country or territory, such sales do not permit a proper comparison, the normal value shall be either- (a) comparable representative price of the like article when exported from the exporting country or territory to an appropriate third country as determined in accordance with the rules made under sub-section (6); or (b) the cost of production of the said article in the country of origin along with reasonable addition for administrative, selling and general costs, and for profits, as determined in accordance with the rules made under sub- section(6): Provided that in the case of import of the article from a country other than the country of origin and where the article has been merely transhipped through the country of export or such article is not produced in the country of export or there is no comparable price in the country of export, the normal value shall be determined with reference to its price in the country of origin. (1A). Where the Central Government, on such inquiry as it may consider necessary, is of the opinion that circumvention of antidumping duty imposed under sub-section (1) has taken place, either by al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry to the domestic market. The levy of dumping duty is a method recognized by GATT, which seeks to remedy the injury and at the same time balances the right of exporters from other countries to sell their products within the country with the interest of the domestic markets. Thus the factors to constitute 'dumping', are (i) an import at prices which are lower than the normal value of the goods in the exporting country; (ii) the exports must be sufficient to cause injury to the domestic industry." Again, in Reliance Industries Ltd. v. Designated Authority & Ors (2006) 10 SCC 368 it was explained that industries built after independence with great difficulty should not be allowed "to be destroyed by unfair competition of some foreign companies. Dumping is a well-known method of unfair competition which is adopted by the foreign companies." The Court also said that: "The purpose of Section 9-A is, therefore, to maintain a level playing field and prevent dumping, while allowing for healthy competition. The purpose is not protectionism in the classical sense (as proposed by the German economist Friedrich List in his famous book 'National System of Political Economy' pub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f injury (that already stands established) and its extent. The uniqueness of the levy is that it is product, origin and even entity specific (if so required) and constitutes a calibrated, even a proportionate response by the State, having regard to the predatory export practices adopted in depressed pricing that would undermine or destroy the domestic market. The review and sunset proceedings highlight that only such response as is needed is in fact notified as a levy. Another unique feature of this levy is that unlike imposts that are not preconditioned by any natural justice or fairness requirement, this levy is the culmination of an elaborate procedure, triggered by notice, investigation, findings and finally a levy based on the Central Government's exercise of discretion. These provisions are (as noted by the Supreme Court) the result of the country's obligation to enact GATT and WTO compliant legislation. 21. Anti circumvention proceedings are part of the larger scheme of anti-dumping procedures. They are premised not only on the fact that there is an anti-dumping duty and the existence of injury, but that despite such levy, there is an attempt by some importers to thwart and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 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. That would involve interpretation of the relevant provisions of the Customs Tariff Act and the relevant entries to the schedule, which impose the duty. The inquiry of the process of slitting and cutting of a steel strip, as well as if it amounts to "assembling" a disassembled or incomplete article, would then become an issue in respect of which neither party addressed arguments on merits, nor presented the necessary facts. Given the fact that this would be the subject matter of inquiry and arguments before the competent forum, a ruling in this proceeding is neither desirable nor warranted having regard to the established limitations of judicial review under Article 226, which is confined to questions of legality, procedural regularity, fairness and a reasonable decision. 23. In view of the above observations and findings, the court is of the opinion that there is no merit in the petition, and it has to fail. All rights and contentions of the parties however, are reserved; no observation made in this judgment therefore, shall be ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
