TMI Blog2018 (10) TMI 601X X X X Extracts X X X X X X X X Extracts X X X X ..... s and Tariff (Identification, Assessment and Collection of Anti-dumping Duty of Dumped Articles for Determination of Injury) Rules, 1995. Section 9A provides for imposition of anti-dumping duty and also stipulates that it shall remain in fore for a period of five years, unless revoked earlier. Sub-section (5) provides that the anti-dumping duty shall cease to have effect on the expiry of five years. The first proviso provides that if, the Central Government, in a review, is of the opinion that the cessation of such duty is likely to lead to continuation or recurrence of dumping and injury, it may from time to time, extend the period of such imposition for a further period of five years. Therefore, there is power to review the necessity of continuing the enforcement or period of anti-dumping duty on a review so initiated - Rule 23 of the Rules provides that the review, either can be on the Central Government’s own initiative or upon a request by any interested party who submits positive information substantiating the need for such review. Moreover, such an application has to be duly substantiated. What is evident from the facts on hand is that the antidumping duty was initially i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roducer from any country or territory (hereinafter 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 antidumping 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 subsect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e into India an anti-dumping duty on the basis of a provisional estimate 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 sub-section (1) and sub-section (2), a notification issued under sub-section (1) or any anti-dumping duty imposed under sub-section (2), shall not apply to articles imported by a hundred per cent, export-oriented undertaking unless, - (i) specifically made applicable in such notifications or such impositions, as the case may be; or (ii) the article imported is either cleared as such into the domestic tariff area or used in the manufacture of any goods that are cleared into the domestic tariff area, and in such cases antidumping duty shall be levied on that portion of the article so cleared or so used as was leviable when it was imported into India. Explanation. - For the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ral Government, after such inquiry as it may consider necessary and the Central Government may, by notification in the Official Gazette, make rules for the purposes of this section, and without prejudice to the generality of the foregoing, such rules may provide for the manner 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. ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of Anti Dumping Duty on Dumped Articles for Determation Of Injury) Rules, 1995 read as under: 3 . Appointment of designated authority. - (1) The Central Government may, by notification in the Official Gazette, appoint a person not below the rank of a Joint Secretary to the Government of India or such other person as that Government may think fit as the designated authority for purposes of these rules. (2) The Central Government may provide to the designated authority the services of such other persons and such other facilities as it deems fit. 4. Duties of the designated authority . - (1) It shall be the duty of the designated authority in accordance with these rules- (a) to investigate as to the existence, degree and effect of any alleged dumping in relation to import of any article; (b) to identify the article liable for anti-dumping duty; (c) to submit its findings, provisional or otherwise to Central Government as to- (i) normal value, export price and the margin of dumping in relation to the article under investigation, and (ii) the injury or threat of injury to an industry established in India or material retardation to the establishment of an indu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 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. 6. Principles governing investigations .- (1) The designated authority shall, after it has decided to initiate investigation to determine the existence, degree and effect of any alleged dumping of any article, issue a public notice notifying its decision and such public notice shall, inter alia, contain adequate information on the following:- (i) the name of the exporting country or countries and the article involved; (ii) the date of initiation of the investigation; (iii) the basis on which dumping is alleged in the application; (iv) a summary of the factors on which the allegation of injury is based; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e where an interested party refuses access to, or otherwise does not provide necessary information within a reasonable period, or significantly impedes the investigation, the designated authority may record its findings on the basis of the facts available to it and make such recommendations to the Central Government as it deems fit under such circumstances. 7. Confidential information- (1) Notwithstanding anything contained in sub-rules (2), (3) and (7) of rule 6, sub-rule (2) of rule 12, sub-rule (4) of rule 15 and sub-rule (4) of rule 17, the copies of applications received under sub-rule (1) of rule 5, or any other information provided to the designated authority on a confidential basis by any party in the course of investigation, shall, upon the designated authority being satisfied as to its confidentiality, be treated as such by it and no such information shall be disclosed to any other party without specific authorization of the party providing such information. (2) The designated authority may require the parties providing information on confidential basis to furnish non-confidential summary thereof and if, in the opinion of a party providing such information, such i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all of the production within such market. 12. Preliminary findings . - (1) The designated authority shall proceed expeditiously with the conduct of the investigation and shall, in appropriate cases, record a preliminary finding regarding export price, normal value and margin of dumping, and in respect of imports from specified countries, it shall also record a further finding regarding injury to the domestic industry and such finding shall contain sufficiently detailed information for the preliminary determinations on dumping and injury and shall refer to the matters of fact and law which have led to arguments being accepted or rejected. It will also contain:- (i) the names of the suppliers, or when this is impracticable, the supplying countries involved; (ii) a description of the article which is sufficient for customs purposes; (iii) the margins of dumping established and a full explanation of the reasons for the methodology used in the establishment and comparison of the export price and the normal value; (iv) considerations relevant to the injury determination; and (v) the main reasons leading to the determination. 2. The designated authority shall issue a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment and also issue a public notice in this regard. The public notice shall, contain inter alia, the non-confidential part of the undertaking. (5) In cases where an undertaking has been accepted by the designated authority the Central Government may not impose a duty under subsection (2) of section 9A of the Act for such period the undertaking acceptable to the designated authority remains valid. (6) Where the designated authority has accepted any undertaking under sub-rule (1), it may require the exporter from whom such undertaking has been accepted to provide from time to time information relevant to the fulfilment of the undertaking and to permit verification of relevant data: Provided that in case of any violation of an undertaking, the designated authority shall, as soon as may be possible, inform the Central Government of the violation of the undertaking and recommend imposition of provisional duty from the date of such violation in accordance with the provisions of these rules. (7) The designated authority shall, suo moto or on the basis of any request received from exporters or importers of the article in question or any other interested party, review from time ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nation; and (v) the main reasons leading to the determination. (3) The designated authority shall determine an individual margin of dumping for each known exporter or producer concerned of the article under investigation: Provided that in cases where the number of exporters, producers, importers or types of articles involved are so large as to make such determination impracticable, it may limit its findings either to a reasonable number of interested parties or articles by using statistically valid samples based on information available at the time of selection, or to the largest percentage of the volume of the exports from the country in question which can reasonably be investigated, and any selection, of exporters, producers, or types of articles, made under this proviso shall preferably be made in consultation with and with the consent of the exporters, producers or importers concerned : Provided further that the designated authority shall, determine an individual margin of dumping for any exporter or producer, though not selected initially, who submit necessary information in time, except where the number of exporters or producers are so large that individual examinati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t by the exporter or producer under investigation, provided such records are in accordance with the generally accepted accounting principles of the exporting country, and such records reasonably reflect the cost associated with production and sale of the article under consideration. 2. Sales of the like product in the domestic market of the exporting country or sales to a third country at prices below per unit (fixed and variable) costs of production plus administrative, selling and general costs may be treated as not being in the ordinary course of trade by reason of price. The designated authority may disregard these sales, in determining normal value, provided it has determined that- (i) such sales are made within a reasonable period of time (not less than six months) in substantial quantities, i.e. when the weighted average selling price of the article is below the weighted average per unit costs or when the volume of the sales below per unit costs represents not less than twenty per cent of the volume sold in transactions under consideration, and (ii) such sales are at prices which do not provide for the recovery of all costs within a reasonable period of time. The s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing at margin of dumping, the designated authority shall make a fair comparison between the export price and the normal value. The comparison shall be made at the same level of trade, normally at the ex-factory level, and in respect of sales made at as nearly as possibly the same time. Due allowance shall be made in each case, on its merits, for differences which affect price comparability, including differences in conditions and in terms of sale, taxation, levels of trade, quantities, physical characteristics, and any other differences which are demonstrated to affect price comparability. (ii) In the cases where export prices is a constructed one, the comparison shall be made only after establishing the normal value at equivalent level of trade. (iii) When the comparison under this para requires a conversion of currencies, such conversion should be made by using the rate of exchange on the date of sale, provided that when a sale on foreign currency on forward markets is directly linked to the export sale involved the rate of exchange in the forward sale shall be used. Fluctuations in exchange rates shall be ignored and in an investigation the exporters shall be given at leas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... country that has been determined to be, or has been treated as, a non-market economy country for purposes of an anti-dumping investigation by the designated authority or by the competent authority of any WTO member country during the three year period preceding the investigation is a nonmarket economy country. Provided, however, that the non-market economy country or the concerned firms from such country may rebut such a presumption by providing information and evidence to the designated authority that establishes that such country is not a non-market economy country on the basis of the criteria specified in sub-paragraph (3). (3) The designated authority shall consider in each case the following criteria as to whether: (a) the decisions of the concerned firms in such country regarding prices, costs and inputs, including raw materials, cost of technology and labour, output, sales and investment, are made in response to market signals reflecting supply and demand and without significant State interference in this regard, and whether costs of major inputs substantially reflect market values; (b) the production costs and financial situation of such firms are subject to sig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re has been a significant price under cutting by the dumped imports as compared with the price of like product in India, or whether the effect of such imports is otherwise to depress prices to a significant degree or prevent price increase which otherwise would have occurred, to a significant degree. (iii) In cases where imports of a product from more than one country are being simultaneously subjected to anti-dumping investigation, the designated authority will cumulatively assess the effect of such imports, only when it determines that (a) the margin of dumping established in relation to the imports from each country is more than two per cent expressed as percentage of export price and the volume of the imports from each country is three per cent of the import of like article or where the export of individual countries less than three per cent, the imports collectively accounts for more than seven per cent of the import of like article and (b) cumulative assessment of the effect of imports is appropriate in light of the conditions of competition between the imported article and the like domestic articles. (iv) The examination of the impact of the dumped imports on the domes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... istence of a threat of material injury, the designated authority shall consider, inter alia, such factors as: (a) a significant rate of increase of dumped imports into India indicating the likelihood of substantially increased importation; (b) sufficient freely disposable, or an imminent, substantial increase in, capacity of the exporter indicating the likelihood of substantially increased dumped exports to Indian markets, taking into account the availability of other export markets to absorb any additional exports; (c) whether imports are entering at prices that will have a significant depressing or suppressing effect on domestic prices, and would likely increase demand for further imports; and (d) inventories of the article being investigated. 4. The petition arises under the following background of facts: 4.1 The Government Of India in the Ministry of Finance (Department Of Revenue), by a Notification dated 14/09/2007 imposed an anti-dumping duty on imports of ductile iron pipes originating in or exported from Peoples Republic of China. The anti-dumping duty was so imposed for a period of five years. By a notification dated 7/09/2012, a review had been initiat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... when the duty period is to expire, the designated authority shall conclude the review within a period not exceeding twelve months from the date of initiation of such review. 4.3 Since the extended duty period of the anti-dumping duty imposed by the Notification dated 10/10/2013 is to expire on 9/10/2018, by virtue of which the anti-dumping duty would cease and the protection to the domestic industry would cease, the petitioner filed such a Review Application before the designated authority on 31/3/2018, six months before it was to expire and by the impugned order dated 17/5/2018 the same has been rejected. 5. Mr Mihir Joshi, learned Senior Counsel appearing with Mr. Jitendra Singh and Mr. H.A Dave, learned advocates for the petitioner has drawn our attention to the Sunset Review Application so filed and annexed with the Paper Book and an additional application filed by the petitioner on 14/05/2018. By such application, the petitioner made out a case that the anti-dumping duty ought to be continued further. According to the petitioner, the cessation of duty is likely to lead to continuation or recurrence of dumping and injury. A request, therefore, to extend such imposition fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reciation, labor cost and other costs for the above subject country is taken based on the cost incurred by the domestic industry. A profit margin of 5% is added to cost to arrive at the normal value Normal Value Calculation :- Production Normal Value JSL 368508 ****** ECL 295581 ****** SKL 271779 ****** Wt. Average NIP 935868 48098 The dumping margin based on such computed normal value was also shown which is as follows: Dumping Margin The Dumping Margin based on the above computed normal value and the export price is as follows : Calculation of dumping margin Particulars Unit To India Turkey Vietnam Sri Lanka Normal Value Rs/MT ****** ****** ****** ****** Ex-Factory P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... RS MT 154268 44520 40502 42451 53638 It may be seen from the above that the prices of Chinese exports to India are completely out of sync as compared to the prevailing prices in India and their prices to similarly placed countries. In view therefore, any comparison of the landed value with selling price and cost of the Domestic Industry will not only reflect an incorrect picture but would also be grossly misleading. Domestic Industry is unable to appreciate that when the domestic producers are offering their products in the range of Rs. **** to **** per MT, then why would any prudent customer buy the Chinese products in price in the vicinity of ₹ 154000 per MT. It is absolutely inconceivable that any customer would buy the imported products at virtually more than **** times the prices offered by the Indian producers. The only conclusion that can be drawn is that the Chinese prices to India cannot be relied upon for any analysis. It is also important to note that the Indian producers have sufficient capacities to cater to the complete demand in India and, therefore, there are n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ttention was drawn to Rule 4 of the Rules especially Rule 4(e) thereof to suggest that a review when made on a duly substantiated application, the designated authority is to consider the need for continuance of the anti-dumping duty. When the earlier provisions of Rule 4 are read in context, it would suggest that the parameters for imposing the duty would have to be gone into to decide continuance thereof, which if the impugned order is read, suggest complete absence of examination of such parameters. 5.6 Rule 6 of the Rules provides for principles governing investigation, which a designated authority is mandated to follow. Rules 10 and 11 provide that an article shall be considered as being dumped if it is exported from a country or territory to India at a price less than its normal value and in such circumstances the designated authority shall determine the normal value,export price and margin of dumping. Similarly, the designated authority shall record a finding that the import of such article causes or threatens material injury or materially retards any establishment and also shall determine the injury to domestic market etc taking into account relevant facts. The procedure ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s where an order of the designated authority declining the request for initiating Sunset Review has been rejected. It is open for the court to issue directions for initiating Sunset Review and also issue interim directions for issuing a notification for extending and continuing anti-dumping duty. In the case on hand, Mr Joshi submitted that if such interim or final directions were not issued, the notification of anti-dumping duties would cease to be effective from 9/10/2018 and therefore the domestic market would be seriously affected, in the event of cessation of anti-dumping duty. Looking at the manner and the method in which the impugned order is made, this Court should exercise such powers and interim directions ought to be issued that the anti-dumping duty be extended and the Sunset Review be initiated, while quashing the order. That the perfunctory manner in which the decision is arrived is evident from the fact that on an additional application made on 14.05.2018, within three days a decision is taken on 17.05.2018 to refuse initiation of investigation on the application. 5.11 Mr. Joshi submitted that the petitioner, cannot approach the CESTAT, under Section 9C of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een made out for continued protection as the applicant failed to make out a case that China s capacities were in excess of its own demands. 7. Having considered the submissions of the learned advocates for the respective parties, the issue that arises for our consideration is, whether the impugned order dated 17.5.2018 refusing to initiate a Sunset Review, on an application made by the petitioner, stands the test of it being so passed within the prescribed legal parameters. 8. On facts, as is evident from the Notification dated 10/10/2013, that for the first time, anti-dumping duty on ductile pipes was imposed by a notification dated 14/09/2007. The Central Government had extended the anti-dumping duty on the subject goods i.e. ductile pipes originating in or exported from China for a further period of five years vide a notification dated 10/10/2013. This was done on an assessment of facts in exercise of powers under sub-sections (91) and (5) of Section 9 of the Customs Tariff Act, 1975 read with Rules 18 and 23 of the Customs and Tariff (Identification, Assessment and Collection of Anti-dumping Duty of Dumped Articles for Determination of Injury) Rules, 1995. 8.1 Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed is based: a summary of factors on which the allegation of injury is based: etc. The Rule further provides that shall also provide a copy of the application to the known exporters or to the concerned trade associations where the number of exporters is large and the government of the exporting countries. The designated authority may issue notice calling for information from the exporters, foreign producers and other interested parties. 10.1 Rule10 provides that an article shall be considered as dumped if it is exported from a country or territory to India at a price less than the normal value and the margin of dumping, the designated authority shall determine the normal value, export price and the margin of dumping taking into consideration principles laid out in Annexure I. 10.2 Rule 11 provides that in order to determine injury the designated authority shall record a further finding that the import of such article causes or threatens to cause material injury to any established industry or materially retards the establishment of such industry. All relevant facts will be taken into account including the volume of dumped imports, their effect on price and their effect in acco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o present their case and substantiate their claim for initiation of sunset review investigation as the examination of application had prima facie shown improvement of various economic parameters over the injury period and apparently there was no material injury to the domestic industry. 3. Whereas, the petitioners availed the opportunity of oral hearing before the Designated Authority on 15.05.2018 to present their case and make their submissions. The petitioner during the hearing made the following submissions: a) Significant exports have been made by subject country China to Vietnam, Sri Lanka and Turkey at fairly low prices (FOB prices ₹ 36616/MT, ₹ 37973/MT, and ₹ 34367/MT respectively). Even after adjustment of ocean freight, insurance, landing charges etc. the constructed landed value to India would be around ₹ 42451/MT, ₹ 44520/MT and ₹ 40502/MT respectively which are below the domestic selling price (Rs. 45,163/MT) of subject goods by the Domestic Industry in India and therefore in the event of cessation of duty, there is likelihood of subject goods getting diverted to India and hurting local industry. b) Producers in the subj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs. 5. In so far as the likelihood of recurrence of injury on cessation of anti-dumping duty is concerned, the Authority notes as under: i. The argument that there is likelihood of subject goods exported to Sri Lanka, Turkey and Vietnam getting diverted to India and hurting local industry on the premise that constructed landed value(s) are below the current selling price of the subjects by the Domestic Industry is not entirely valid on the following grounds: a) There is only marginal difference between the domestic selling price and the landed value constructed from the Sri Lankan prices. b) The exports to Vietname, Sri Lanka and Turkey taken together constitute only 27% of exports of the subject goods from China. c) Similarly, the constructed landed value to India of ₹ 42451/Mt, ₹ 44520/Mt and ₹ 40502/MT is based on average export prices for Vietnam, Sri Lanka and Turkey respectively whereas the price attractiveness would depend on volume of only those individual transactions which have values lower than the domestic selling price. ii. The submission made by the petitioner regarding surplus capacities also is incomplete/inconclusive because it n ..... X X X X Extracts X X X X X X X X Extracts X X X X
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