TMI Blog2019 (7) TMI 356X X X X Extracts X X X X X X X X Extracts X X X X ..... its submissions, which have been reproduced hereinabove. On analysis of the same, it appears that while considering the import as insignificant which constituted 98% of the total import and 6% of consumption in India which more than insignificant as defined in Rule 14(d) of the Rules has not been properly considered by respondent No.2 - according to Rule 14(d), the percentage has been given in the import of the like product. Now, admittedly, in view of para-62 at page No.265, the imports are 5.84% which is above the insignificant import as per Rule 14(d). Thus, the observations made by the DA is misreading of the facts and the DA has not properly appreciated this very observation while reaching in the conclusion in Final Finding and this fact is corroborated from the Final Finding itself. Thus, according to Rule 14(d), the percentage has been given in the import of the like product. Now, admittedly, the imports are 5.84% which is above the insignificant import as per Rule 14(d). Thus, the observations made by the DA is misreading of the facts and the DA has not properly appreciated this very observation while reaching in the conclusion in Final Finding and this fact is corrobor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A. This Hon ble Court be pleased to issue a writ of certiorari or a writ in the nature of certiorari, so as to quash and set aside Impugned Final Finding No.7/16/2018-DGAD dated 29.01.2019 along with Disclosure Statement dated 15.01.2019 issued by the Respondent no.2 and annexed at Annexure G and H hereto; and B. Pending admission, hearing and final disposal of this petition, this Hon ble Court be pleased to direct Respondent No.3 not to refrain from taking any steps in furtherance of the Impugned Final Finding dated 29.01.2019 issued by it and annexed as Annexure G and Annexure H hereto; C. Pending admission, hearing and final disposal of this petition, this Hon ble Court be pleased to direct the Respondent nos.1 to 4 to ensure that subject goods that may be cleared are duly accounted for and further the importers be notified about pendency of the present petition before this Hon ble Court and subject to the outcome of the same; D. Ad-interim reliefs in terms of prayers (B) and (C) above; E. Ex parte ad-interim reliefs in terms of prayer (D) above; F. For cost; and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inor aches and pains. According to the petitioners, producers exporters from China PR (hereinafter be referred to as the subject country ) were exporting the subject goods to India for quite sometime and dumping intensified during 2001. Due to that Domestic Industry (hereinafter be referred to as the DI ) requested imposition of Anti-dumping Duty (hereinafter be referred to as the ADD ) on the imports of subject goods. Thereafter, on the basis of the inquiry conducted by respondent No.2, a Final Finding Notification No.60/1/2000-DGAD dated 22.01.2002 was issued recommending imposition of ADD. The definitive antidumping duties in the form of benchmark were imposed by respondent No.2. It is contended that at the end of 5th year, the DI filed an application for sunset review in the year 2006 whereupon investigation was initiated by respondent No.2 to examine whether the expiry of the duty would lead to continuation or recurrence of dumping and inquiry. Respondent No.3 vide its Notification No.83/2006 extended the definitive Anti-dumping Duties in terms of Section 9A(5) for a period of one year up to 05.09.2007. 3.3 It is contended by the peti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... need for continued imposition of the duties in force in respect of the subject goods originating in or exported from the subject country and to examine whether the expiry of such duty is likely to lead to continuation or recurrence of dumping and injury to the domestic industry. That pending such sunset review, the anti-dumping duties imposed earlier have been extended by respondent No.3 for a period of six months i.e. upto 26.04.2019 vide Notification No.29/2018-Customs (ADD) dated 20.08.2018. It is contended that on 29.08.2018, respondent No.2 granted public / oral hearing to all the interested parties to present their views orally and on 07.09.2018, petitioner No.1 submitted a detailed written submission justifying the need for the continuation of the duty. 3.6 It is contended by the petitioners that on 15.01.2019, respondent No.2 issued Disclosure Statement under the provisions of Rule 16 of the Rules, which require disclosure of essential facts received and interpreted by it which are under consideration for the purpose of arriving at a final conclusion. According to the petitioner, therefore, it filed its comments on the disclosure statement submitting t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e cheapest API available in the country. iii. The production of product under consideration is quite limited globally. As, about 86% of global production is in India and China only and out of which 62% of the production is in China alone, while India commands the remaining 24%. Thus, any sickness in this industry would leave the Indian users at the mercy and monopoly of the Chinese producers. iv. Adverse effect of first dumping and thereafter insufficient form of duty led to large-scale production suspension in the country, which was primarily in the last two decades (all these closures are more than 5 years old and are prior to previous extension of ADD). v. As per 145th Parliamentary Standing Committee on Commerce which assessed the impact of Chinese goods on India industry, it is clearly stated that API sector needs protection from imports and the Government of India also endeavours to revive the API sector in India. vi. Katoch Committee Report dated 24th September, 2015 on Active Pharmaceuticals Ingredients (APIs) specifically states that a long term strategy for strengthening API sector by involving Minist ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sal link and likelihood of dumping post cessation of ADD in force in terms of the provisions laid down under the Anti Dumping Act and Rules, the Authority holds that Domestic Industry failed to provide any satisfactory evidence that the expiry of the said anti-dumping duty is likely to lead to continuation or recurrence of dumping and injury to the domestic industry due to reasons and/or analysis given above. Therefore, the Authority does not recommend continuation of the anti-dumping duty on the imports of subject goods from China PR. 4. Being aggrieved and dissatisfied with the aforesaid impugned Final Findings, the petitioners have challenged the same on the following main grounds. ( a) Inadequate disclosure of essential facts thereby violating the principles of natural justice and denying the domestic industry an opportunity to defend its interests. ( b) Impugned Final Finding is a non-speaking order and does not address all the issues and concerns raised by the domestic industry in violation of the requirements of reasoned explanation under Rule 17 of the Anti-Dumping Rules. ( c) Error on the part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hout affording appropriate material to the concerned, the Court has issued Notice for final disposal and have been expected from the other side to file reply, if any, by the returnable date, in case if notice is served within a reasonable time from today. Learned counsel further submitted that conclusions are diametrical opposite to the final findings recorded. Direct service is permitted. 6. Thereafter, this Court has passed the following order on 11.04.2019:- Leave to amend. On 13.03.2019, this Court passed the following order: Notice for final disposal, returnable on 27th March, 2019. Learned counsel for the petitioner has invited our attention to the discloser statement and laid emphasis upon page No.206 and 207 to indicate that the columns which have been left blank or extract marks are provided, ordinarily ought not to have been left blank and therefore, this was specifically brought to the notice of the authority under the objection dated 22.1.2019. The authority without there being any decision thereon, rendered its final findings, which could be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e served upon the petitioner and hardcopy duly affirmed be placed on record by tomorrow I.e. 25.4.2019 as he has been informed that the affirmed copy is already dispachted. 3. The learned counsel appeairng for petitioner submited that in fact looking to the fact that the notification of 20.8.2018 would come to an end by 26.4.2019 in case if sometime is taken in filing rejoinder, if any, or the hearing of the matter is spilled over and not completed by then, the irretrivable situation may be created and, therefore, he urges the Court that the Court may by further interim direction direct the authorities to extend the antidumping duty for a further period of two months as it may take care of intervening summer vacation also and the matter be heard prior thereot and that would serve the interst of justice. 4. This Court is of the view that while issuing the notice on 13.3.2019 an order was passed indicating therein that the notice was being issued for final disposal and it was made returnable on 27.3.2019 the Court did advert there into the requirement of issuing of notice for final disposal bearing in mind that the notification of 20.8.2018 would e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n case of Union of India and another Vs. Kumho Petrochemicals Company Limited and another, therefore at least till the Court pronounce the judgment and order let there be a direction to the concerned respondent no.1 for further extending the anti dumping duty so that these proceedings may not be rendered infructuous. We find substance in this matter as the arguments have been continuously going on and concluded only today. Besides, there is a request from respondent side to permit respondent no.1 to place on record the written submission. We have granted permission to respondent no.2 also to place written submission on record by 21st June 2019. In that view of the matter, casting an order and judgment may take some time therefore, it is observed that the respondent nos.1, 3 4 shall extend the anti dumping duty notification in respect of product in question at least till 9th July 2019 before the existing notification comes to an end. Put-up on 21st June 2019. Direct service permitted. 9. Learned advocate for the petitioners has placed on record the brief submissions, which verbatim reproduced as under:- THE IMPUGNED FINAL FINDING HAS BEEN I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Reliance Industries Ltd. Vs Designated Authority, (2006) 10 SCC 368 (Para 44). ii.UOI vs. Union of India vs. M/s. Meghmani Organics Ltd. Ors. (2016) 10 SCC (para 29) and iii Nirma Limited Versus Union of India (2017 (358) E.L.T 146 (Guj.)] (Para-32.12)(upheld by Hon'ble Supreme Court). 4. During the course of final hearing, respondent no. 2 has tendered a printout of alleged email sent to petitioner no.1 and contended that all the information has been shared with petitioner no.1. At the outset, it is submitted that such contention or a copy of the email have not by respondent no.2 in its affidavit-in-reply. 5. It is submitted that petitioner no.1 has received information only pertaining to construction of Normal Value and break down of non-injurious price (NIP) as is evident from the content of mail itself. However, it did not receive any information pertaining to injury parameters which was claimed confidential and asterisk mark were used int he disclosure statement and impugned final finding despite the fact that the information has been furnished by the domestic industry itself. the computation of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly to be materially injured again, if duties are lifted. Respondent No. 2 has therefore, failed to appreciated the fact that if the antidumping duty has had the desired effect, the condition of the domestic industry is expected to have improved during the period anti-dumping duty was in force. III THE IMPUGNED FINAL FINDING ARE DIAMETRICALLY OPPOSITE TO THE ESSENTIAL FACTS RECORDED INT HE DISCLOSURE STATEMENT AND FINAL FINDING: 10. Following are essential facts recorded in the impugned final findings which are diametrically opposite to conclusions reached by respondent : Sr. No FACTS RECORDED IN THE IMPUGNEDFINAL FINDINGS DIAMETRICALLY OPPOSITE CONCLUSION REACHED IN THE IMPUGNED FINAL FINDINGS 1. 86.(a) A significant rate of increase of dumped imports into India indicating the likelihood of substantially increased importation. Parti cular Uni ts 201 4- 15 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5-87 (page no. 273- 274). SUBMISSION Respondent no. 2 erred in considering import as insignificant which constituted 98% of the total import and 6% of consumption in India (more than insignificant as define in Rule 14(d), Even otherwise Rule 14 of the Rules dealing with the termination of investigation on the basis of insignificant imports is explicitly excluded from Rule 23(3) and therefore issuance of the impugned final findings by respondent no. 2 in the present case on the basis of the volume of insignificant import are contrary to the mandate of law. * Imports are 5.84% (above diminimus level) (paragraph no.62 table at page no.265); and * Rule 14(d) at defines volume of significant import (page no.99) 1. ( 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 additiona ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Exp orts to Indi a MT *** *** *** *** Exp orts to RO W MT *** *** *** Tota l Exp orts MT *** *** *** *** % Exports Orie ntati on Range % *** *** *** 3 5 4 5 b. After analysis of the capacities of the cooperative export ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... c. However, it is observed from the analysis of the cooperating producers that the trading companies do not have their own production facilities and they quote the capacity of the producers on their websites. d. Considering the capacity utilisation and export orientation of the responding producers and evidence provided by the domestic industry, it is evident that there are surplus capacities in China and the Chinese producers are export oriented. ( C) Inventories of the article being investigated 90. The questionnaire response filed by the Chinese producer s shows that level of inventories with the cooperative producers / exporters is quite significant . Producer Uni ts 2 01 5 2 016 2017 Poi M/s.Anqi u Lu An Pharmac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Kenya (KE) *** *** *** Mauritius (MU) *** *** *** Indonesia (ID) *** *** *** S. Africa (ZA) *** *** *** Iraq (IQ) *** *** *** Zambia (ZM) *** *** *** Russia (RU) * ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spondent no.2 are contrary to the facts showing likelihood of injury to domestic industry in the event of revocation of duty. Despite the fact and evidences brought by the petitioner and examination of the evidences by Respondent no.2 clearly showing that likelihood of dumping and injury in the event of cessation of antidumping duty, the Respondent no.2 went beyond the evidence and information examined in the Impugned Final Finding and concluded volt face without any basis that there is inadequate evidence submitted by the domestic industry to substantiate the likelihood of injury. 3. The ADD was in force since September 2001 and the condition of domestic industry has improved. Therefore, the ADD has served its intended purpose. [paragraph 126(6) (page no.281)] SUBMISSION : Duration of levy of anti-dumping is not a relevant parameter. Anti-dumping duty is required to be imposed so long as the investigation shows that the cessation of such duty is likely to lead to continuation or recurrence of dumping and injury. The Act and the Rules do not prescribe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Notification has not even been impugned in the Writ Petition (even vide an amendment), and as such, no prayers have been sought against the Respondent No. 3. Re: The Petitioner has an alternate remedy in Customs Excise and Service Tax Appellate Tribunal (CESTAT) 5. Without prejudice to the aforesaid submission, It is stated that the Petitioner has erred in approaching this Hon ble High Court in as much as it is an established principle of law that the writ jurisdiction of this Hon ble High Court is an extraordinary jurisdiction, and ought not to be invoked till the statutory remedy has been exhausted. 6. It is submitted with due deference to this Hon ble Court that the writ jurisdiction of this Hon ble Court ought not to have been invoked by the Petitioner, in light of an alternative remedy available to the Petitioner under the provisions of the Custom Tariff Act, 1975. It is respectfully submitted that the appeal against the findings of the designated authority viz. Directorate General of Trade Remedies lies with the CESTAT under Section 9C of the Customs Tariff Act, 1975. Section 9C of the Custom Tariff Act, 1975 is reproduced below ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... [2017 SCC Online Del 8354], the Division Bench of the High Court of Delhi has taken note of the decision of Nirma Ltd. v. Union of India (judgment dated 23rd February, 2017 in C/SCA/16426/201 of the this Hon ble High Court of Gujarat) and categorically dismissed the writ petition, on the ground of the alternative remedy available to the petitioners therein. The relevant extract of the aforementioned Hindustan Lever v. Union of India (supra) judgement is reproduced below for the ease of reference of this Hon'ble Court: 6. The Court is unable to be persuaded to agree with the above conclusion reached by the DB of the Gujarat High Court 777e reasons that weighed with the Gujarat High Court to conclude that it will not be possible for the party aggrieved to challenge the disclosure statement before the CESTAT is unable to be discerned from the above passage. If the Final Finding can be appealed against before the CESTA 7; there is no reason why the CESTA T cannot examine the correctness of the assertions made in the disclosure statement which constitutes the very foundation of the entire exercise leading up to the Final Finding by the DA. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccordingly dismissed. However, this will not preclude the Petitioner from availing the statutory remedy of an appeal before the CESTA T in accordance with law and from urging all the grounds raised here, and any other ground it may have, to challenge the Final Finding of the DA . The Petitioner may request the CESTA T for an expedited hearing of its appeal . ( emphasis supplied) 9. Further, there are no extraordinary circumstances pleaded by the Petitioner in the present case that warrant the invocation of Article 226 of the Constitution of India and there has been no violation of their fundamental right or any situation as grave as may have required imminent intervention of this Hon ble High Court in extraordinary jurisdiction even while no cause of action had arisen. 10. In view of the aforesaid, it is most respectfully submitted that given the highly specialized nature of the subject, the statutory remedy would be a more appropriate course of action for an aggrieved party, and the Hon ble High Court under their writ jurisdiction cannot don the mantle of an economic analyst to decide whether the DA adopted the correct appr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... present case, the Designated Authority (DA) after initiating sunset review investigations recommended extension of anti-dumping duty till 26.04.2019 which was done vide notification No. 39/2018- Cus (ADD). Subsequently, DA issued their sunset review final findings and did not recommend continuation of anti-dumping duty. Thereafter vide notification No. 19/2019-Cus (ADD) dated 16th April, 2019 the same was rescinded with the approval of Finance Minister. Thus, extension of anti-dumping duty under these circumstances will be contrary to the provisions of Section 9A (5) of the Customs Tariff Act, 1975. It is an established principle of law that if the law directs something to be done in a particular way, it ought not to be done in any other way. In view of the above, and in the absence of any inherent power to review its own decision, the directions as prayed for by the Petitioner ought not be granted by this Hon ble Court. Reliance is placed on the judgment of the Hon bie Supreme Court in the case of Union of lndia (U01) and Ors. V Kumho Petrochemicals Company Limited and Ors. [AIR 2017 SC 3357] in this regard. 15. In any event, if it is the case of the Petitioner th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this policy, the Answering Respondent deemed It appr0priate to affirm the Final Findings of the DA and rescind the duty on the Imported goods. It Is reiterated that if the member of the domestic industry Is aggrieved by the said findings, it may invoke the appeal provisions in law and/ or file a fresh application for imposition of Anti Dumping Duty, but is refrained from approaching this Hon bie Court under Article 226 of the Constitution. 17. In view of above submissions, it is prayed that Petitioners have no case on merits or otherwise and hence, the present Petition deserves to be dismissed. Re:List of Judgements 18. The Respondent annexes herewith an index of judicial pronouncements, sought to be relied upon by the Respondent No. 3 in support of its aforementioned contentions. 10.1 Learned advocate for respondent No.3 has relied upon the following decisions. 1. In the case of Rishiroop Polymers (P) Ltd. Vs. Designated Authority and Additional Secretary , reported in (2006) 4 SCC 303 ; 2. Indian Metal and Ferro Alloys Ltd. Vs. Designated Authority, Ministry , reported i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not supplied to it. While inviting the attention of the Court to the email, Mr.Desai, learned advocate has submitted that the necessary informations have already been supplied to the petitioners by email and the other particulars which are available on public domain has also made available to the petitioners representative. While referring to extract of the page of register of the non-confidential informations public file, Mr.Desai has submitted that the representative of the petitioners has accessed the public file and, therefore, the question for non-furnishing of informations is devoid of merits. Regarding data available at DGCSI which was made used by DA, Mr.Desai, learned advocate has submitted that the data available on website is not accessible to everybody and one has to make payment of charge and, therefore, it cannot be treated as on public domain. While referring to Disclosure Statement, he has submitted that all facts were made available to concerned parties and the informations were supplied in spread sheet form through email. According to him, there was substantial compliance of providing informations to the petitioners and there is no breach of any Rules as to non- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... joinder, Mr.Soparkar, learned senior advocate for the petitioners has vehemently submitted that though his clients have received email but no annexure has been received by them regarding information on spread sheet. He has submitted that the Disclosure Statement is dated 21.01.2019, whereas, the email in question has sent on 15.01.2019. According to him, this was the earlier information sent before the Disclosure Statement was issued. He has submitted that there is no email or information sent by the authority after 22.01.2019. While referring to the affidavit-in-reply filed by the respondent authority, Mr.Soparkar has also submitted that sending of informations to the petitioners by the Designated Authority has not been specifically mentioned in such affidavit and it is only oral submissions made during the course of arguments, which cannot be accepted at all. 12.1 Regarding public file, Mr.Soparkar, learned senior advocate has also submitted that this is a public file which can be inspected by anyone and it is not confidential. Regarding substantial informations, Mr.Soparkar has submitted that the question is to provide every information and there is no ques ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 03.07.2007, in pursuance of such recommendation, respondent No.3 issued the Notification No.99/2007-Customs (ADD) levying Anti-Dumping Duty for a further period of five years. ( viii) On 28.08.2012, respondent No.2 initiated a sunset view investigation vide Notification No.14/1009/2012-DGAD to review the need for continued imposition of duties. ( ix) On 19.09.2012, the Anti-Dumping Duty was extended upto 02.09.2013 by respondent No.3 vide Notification No.42/2012-Customs (ADD). ( x) On 26.08.2013, After due investigation, respondent No.2 issued Final Finding No. 14/1009/2012 - DGAD recommending extension of duties in revised form changing from benchmark form of duty of fixed form of duty. ( xi) On 28.10.2013, in pursuance of the aforesaid recommendation of respondent No.2, respondent No.1 issued the Notification No.26/2013-Customs imposing fixed form of Anti-Dumping Duty for a period of another five years. ( xii) In 2018, the petitioner along with other, again approached respondent No.2 with duly substantiated application for extension of Anti-Dumping Duty. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tus. This also implies that unless these conditions are not fulfilled / satisfied, the Chinese costs and prices cannot be adopted. ii. Chines produces are required to be treated as companies operating under non-market economy environment and the Authority may proceed to determine the normal value on the basis of Para 7 of Annexure I. iii. The imports are entering the Indian market at dumped prices. iv. There is difference in prices in different important transactions which mean that Chinese producers are selling very same product at a price which differs significantly even at the same time period and is not a peculiar phenomenon of POI, but extends to the entire injury period. v. It is a fit case where wighted average normal value cannot be compared with weighted average export price. The Designated Authority is, therefore, requested to compute the weighted average normal value and compare the same with individual export price and in all those import transactions where the dumping margin is negative, the same are required to be excluded for determination of dumping margin. vi. There can be n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and prices is to be followed only when it was not possible to construct the normal value on the basis of other alternatives prescribed in the opening sentence of Para 7. ix. In terms of the provisions of Para 7, the market economy third country is required to be first identified for determination of normal value and only where it is not possible to obtain necessary data from such third country, the normal value can be determined on any other reasonable basis, including the price actually paid or payable in India for the like product, duly adjusted if necessary, to include a reasonable profit margin. x. The domestic industry is under obligation to inform, without reasonable delay the selection of market economy third country to the parties concerned so as to provide an opportunity to respond to the same. xi. Mandatory procedure prescribed by the law has not been followed, as the interested parties have not been put to notice about selection of the third country. Nor have the interested patties been requested to suggest and make necessary information available about the third country. xii. In the absence of follo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 47. The Authority notes that below mentioned exporters from China PR have furnished information to the Authority, which was used for determination of export price and individual dumping margin. i. M/s. Anqiu Lu An Pharmaceutical Co., Ltd. ii. M/s.A.H.A. International Co., Ltd. iii. China Sinopharm International Corporation iv. Zhejiang Chemcials Import and Export Corporation v. Lianyungang Kangle Pharmaceutical Co., Ltd. vi. Zhejiang Kangle Pharmaceutical Col.,Ltd. vii. Hebei Jiheng (group) Pharmaceutical Co. Ltd. In view of the responses filed, the Authority has analysed the response made by the producers / exporters as follows:- M/s. Anqiu Lu An Pharmaceutical Co., Ltd. (Producer) and M/s.A.H.A. International Co., Ltd. China Sinopharm International Corporation and Zhejiang Chemicals Import and Export Corporation . 48. The Authority notes that M/s.Anqiu Lu An Pharmaceutical Co., Ltd has exported *** MT of the subject goods directly to India and *** MT through its traders M/s.A.H.A. Inte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u Lu An Pharmaceutical Co., Ltd. M/s.A.H.A. International Co., Ltd. China Sinopharm International Corporation Zhejiang Chemicals Import and Export Corporation *** *** *** *** 0-10 Lianyungang Kangle Pharmaceutical Co., Ltd. Zhejiang Kangle Pharmaceutical Co., Ltd. *** *** *** *** 0-(10) Hebei Jiheng (group) Pharmaceutical Co., Ltd. *** *** *** *** 10-20 52. The dumping margin during the POI for all exporters/producers from the subject country has been determined as provided in the table below:- Determination of Dumping Margin a) C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... I Sales of Domestic Industry MT *** *** *** *** Indexed 100 104 108 108 Sales of other Indian Producers MT *** *** *** *** Indexed 100 114 108 110 Imports from MT China MT 4,356 1,930 2,205 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... *** *** *** Sale of other Indian Producers % *** *** *** *** Import from subject country % 9% 3.8% 4.44% 5.84% Import from other countries % 0.16% 0.22% 0.06% 0.11% Total Demand % 100 100 100 100 63. It is seen that the import volume declined till 2015-16 and increased thereafter. Also, the market share in demand of the domestic industry has remained more or le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ces over the injury period. The position is shown as per the table below :- Particulars Units 2014-15 2015-16 2016-17 POI Cost of sales Rs./Kg *** *** *** *** Trend 100 89 87 99 Selling price Rs./Kg *** *** *** *** Trend 100 93 89 103 Landed price of imports ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... *** *** Trend Indexed 100 103 111 126 Domestic Sales for PUC MT *** *** *** *** Trend Indexed 100 113 116 117 b) Demand 71. From the above information, the Authority notes the following:- a) Capacity of the domestic industry has remained constant over the period. b) The production, sales and capacity utilization of the Domestic Industry has increased over the injury period. Demand Unit 2014 - 15 2015 - 16 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... *** *** *** *** Import from subject country % 9% 3.8% 4.44% 5.84 % Import from other countries % 0.16% 0.22% 0.06% 0.11 % Total Demand % 100 100 100 100 74. Performance of the Domestic Industry with regard to profits, return on investment and cash flow is as follows:- Particulars Units 2014-15 2015-16 2016-17 POI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs./KG *** 4 Injury Margin Rs./KG (***) 5 Injury Margin % (***) Injury Margin RANGE 0-(10) J. LIKELIHOOD OF CONSTINUATION OR RECURRENCE OF DUMPING AND INJURY J.1 Submissions by the Domestic Industry 82. Following are the submissions made by the Domestic Industry with regard to likelihood of continuation of dumping and consequent recurrence of injury - i. A perusal of Article 11.1 of AD Agreement and Section 9A(5) of the Customs Tariff Act, clearly suggests that the main intent behind the legislation of Sunset Review investigation is to examine:- a) Whether the dumping continued and if so, whether it is likely to continue; b) In case where dumping did not continue, whether the dumping wou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... M/s.Vamsi Labs Ltd. * M/s.Srinivasa Agro Industries Drugs Ltd. * M/s. Pan Drug * M/s.Alpha Drug * M/s.Glaxosmithkline Pharmaceuticals Ltd. * M/s.Thexa Pharma Pvt. Ltd. * M/s.Vani Pharma Labs Ltd. * Rohini Chemical * Fortune Chemical * Dinesh Pharmaceutical * Dr. Jain s Company * Saboo Medichem ix. The production of product under consideration is quite limited globally. About 86% of global production is in India and China. 62% of the production is in China alone, while India commands 24%. Thus, any sickness in this industry would leave the global demand at the mercy of the Chinese producers. x. The questionnaire responses filed by the exporters, establish that there is import of subject goods from subject country at dumped price. xi. The domestic industry in the present scenario is still reeling from the adverse effects of the dumping and has shown marginal growth i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e dumping margin in such imports implies likelihood of dumping in the event of withdrawal of duty and in itself justifies extension of anti-dumping duty. J.2 Submission of exporters 83. There is no likelihood of recurrence of injury as per Article 9A(5) of the Customs and Tariffs Act. i. The petitioners have not given the details of excessive capacity available with the Chinese producers and their likelihood of being exported to India, the petitioners have failed to make out a case of likelihood of dumping. ii. This clearly indicates that there is no likelihood of injury to the domestic industry in the current investigation and the present investigation deserves termination. J.3 Examination by the Authority 84. The Authority examined the likelihood of continuation or recurrence of injury considering the parameters relating to the threat of material injury in terms of Annexure II (vii) of the Anti-dumping Rules. The domestic industry has submitted the details of exports of China to third countries as per China customs which shows that ***% volume of exports to third countr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , year. 88. An analysis of transaction wise data of the cooperative producers with their respective exporters so as to arrive at dumped and injurious imports of the cooperative producer of the present investigation is as follows:- a) M/s.Anqiu Lu An Pharmaceutical Co., Ltd . The total exports to India by the said producer with trader of the subject goods are ***MT out which ***MT are dumped imports and ***MT are injurious imports. b) M/s. Lianyungang Kangle Pharmaceutical Co., Ltd . Total exports to India by th said producer of the subject goods through its exporters is ***MT out which dumped imports constitute ***MT. No injurious imports were found for the said producer through its exporter. c) M/s.Hebei Jiheng (group) Pharmaceutical Co. Ltd . Total exports to India by the said producer of the subject goods is ***MT. All imports of the said producer are dumped and ***MT are injurious. ( b) Sufficient freely disposable, or an imminent, substantial increase in, capacity of the exporter indicating the likelihood of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... *** *** %Exports Orientation Rang e % *** *** *** 35-45 b. After analysis of the capacities of the cooperative exporters, the Authority notes that the capacities of the following non-cooperative exporters/producers as per the data submitted by the petitioner and the information available in public domain. S. No Producers in China Capacity (MT per annum) 1 Anhui BBCA Likang Pharmaceutical 10000 2 Changhu Huagang Pharmaceutical 8000 3 Jiangsu World kindly Pharmaceutical 10000 4 Wenzhou Pharma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al Co., Ltd. MT *** *** *** *** Hebei Jiheng (group) Pharmaceutical Co. Ltd. MT *** *** *** *** Total MT *** *** *** *** ( D) Price attractiveness of Indian Market 91. Analysis of the China PR Custom data with regard to export from China PR to the rest of the world. Indicate that with the revocation of ADD, the Indian prices would be attractive for the Chinese producers / Exporters to increase their exports to India and the same can be deduced from the table give below: Country Quantity Value Price India (I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... *** 92. The Authority notes that ***% total volume of exports to third countries is at a price lower than the price at which China export to India. Whereas ***% of the total exports are exported are above at price at which China exports the subject goods to India. ( E) Export Orientation of China PR 93. As per the data of China Customs and other evidence filed by the Domestic Industry, the Authority notes that the producers in China are oriented toward exports globally. In the event of cessation of ADD, there is probability that the exporters/producers would resort to dumping of subject goods to India. K. CASUAL LINK AND NON ATTRIBUTION ANALYSIS OF OTHERS KNOWN FACTORS 94. Having examined the existence of continued dumping, volume and price effects of dumped imports on the prices of the Domestic Industry, other indicative parameters listed under the Indian Rules and Agreement on Anti-Dumping have been examined herein below by the Authority to see whether any other factor, other than the dumped imports could have contributed injury to the Domestic Industry ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s request disclosure of this data to the petitioners on actual basis. 2. The above is vital for the domestic industry to offer their meaningful comments on the disclosure statement. However, pending such disclosure, the domestic industry hereunder makes following preliminary submissions to the Disclosure Statement. The domestic industry craves leave to make further submissions, as and when the above essential facts are disclosed. B. Emerging essential facts flowing from the Disclosure Statement issued are as follows: 3. Following are the emerging essential facts flowing from the Disclosure Statement. Petitioner believes that the Authority has concluded the following and is making submissions under this belief. Further, petitioner is reproducing some of the facts presented by it earlier only as a matter of reiteration, despite these facts already having been established by the Designated Authority in favor of a positive final determination. i Product under Consideration and Like Article: The product under consideration in the present Sunset Review investigation is Paracetamol and the goods prod ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ector needs protection from import and the government of India also endeavors to revive the API sector in India. iv Katoch Committee Report dated 24 September, 2015 on Active Pharmaceuticals Ingredients (APIs) specifically states that a long term strategy for strengthening API sector by involving Ministry of Commerce as well as other regulator authorities is required which involved judicious and liberal use of measures like anti-dumping. v FICCI report February 2018 edition on Trends and Opportunities for Indian Pharama highlights that dependence on China for API supplies exposes the pharma industry to raw material supply disruptions and price volatility. vi Office Memorandum dated 18th April, 2018 issued by the Government of India, Ministry of Chemicals and Fertilizers, Department of Pharmaceuticals, constituted a Task Force to formulate a road map for enhanced production of APIs in the country as there is need for concerted efforts to harness the opportunities in pharmaceutical sector. vii The public at large is already well protected through a regulator mechanism as Paraceta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der chapter 29 of the Customs Tariff Act, 1975 and the same is however indicative only and not binding on the scope of the present investigation. Designated Authority has also correctly held that the goods produced by the domestic: industry are comparable to the PUC in terms of physical characteristics, manufacturing process technology, functions uses, product specifications and tariff classification of the goods. The two are technically and commercially substitutable since they are being used interchangeably by the consumers. Therefore, the goods produced by the Domestic industry and imported from the subject country are like articles in terms of the Rule 2(d) of the Anti-Dumping Rules. E. Scope of the Domestic Industry standing 8. With regard to the scope of the Domestic industry Standing the Designated Authority has rightly at Para. 23 have noted that the petitioner companies are eligible domestic industry in terms of AD Rules. Further. production of the petitioner companies namely M/s Farmson Pharmaceuticals Gujarat Private Limited and M/s Sri Krishna Pharmaceuticals Limited constitutes a majo proportion of total Indian production ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ompare with individual export price and in all those import transactions where the dumping margin is negative, the same are required to be excluded for determination of dumping margin. 13. It is further submitted that the determination of export price by the in the present case is not consistent with the SOP manual issued which state as follows: 12. 23.2 Alternatively, if it is established that the producer has exported through an unrelated exporter, then take the sale price of the subject goods from producer to first exporter and adjusted for ex-factory expenses to arrive at NEP. In this case it should be unrelated exporter should have made the exports at profits. In case exporter has posted losses (as verifies from appendix 5 9) then a reasonable profit has to be deducted for computation of ex factory export price 14. Therefore in a case like present where the producers have exported the goods through unrelated trader and where it does not appear a case that the traders have made losses, the export price should be determined considering the selling price of the producer. 15. Even otherwise, the petit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... domestic industry is likely to be materially injured again, if duties are lifted. 22. The Designated Authority has noted as follows with regard to various economic parameters: i At 71 of the Disclosure Statement Designated Authority note the fact that the production, sales and capacity utilization of the Domestic Industry has increased over the injury period. This however only shows absence of current injury and in itself insufficient to hold absence of likelihood. ii At Para 75 of the Disclosure Statement Designated Authority has noted that profitability, cash profits and return on investments have increased in the POI when compared to base year. The Designated Authority is requested to consider the fact this improvement is due to anti-dumping duty in force. Further, this only shows absence of current injury and in itself insufficient to hold absence of likelihood. iii At Para 77 of the Disclosure Statement Designated Authority has rightly noted that the average inventory level of the subject goods has shown an increasing trend. Injury Margin 23. Without prejudice, it is submitted that inj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of determination of injury. Non-injurious price having no relevance insofar as determination of injury is concerned, would not form an essential fact for the purpose of arriving at a decision as to whether or not determinative measures are required to be applied. It is only after coming to the conclusion that there is injury necessitating imposition of or continuance of anti-dumping duty, that the designated authority is required to determine the injury margin, for which purpose it has to determine the non-injurious price as per the principles laid down in Annexure Ill to the rules for the purpose of fixing the quantum of anti-dumping duty to be imposed. 25. It is submitted that the Designated Authority is required to determine injury margin only in those cases where the Authority finds that the imports are causing injury. However, if the Designated Authority does not find injury to the domestic industry, like in the present case, the Designated Authority is not required to and should not determine injury margin. In fact, when there is no injury, there can be no need for determining injury margin. And, a negative injury margin only shows that the domestic indust ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Polypropylene from Singapore Negativ e Injury Margin Continuation of definitive anti dumping duty I. Likelihood of continuation of Recurrence of Dumping and Injury 27. It is submitted that Article 11.1 of Anti Dumping Agreement and Section 9A (5) of the Customs Tariff Act, clearly suggests that the main intent behind the legislation of Sunset Review investigation is to examine: i Whether the dumping continued and if so, whether it is likely to continue; ii In case where dumping did not continue, whether the dumping would recur in the event of revocation of anti-dumping duties; iii Whether the Domestic Industry continued to suffer injury; and if so, whether injury to the domestic industry is likely to continue; iv In case where the Domestic Industry has not suffered continued injury, whether injury to the Domestic Industry is likely to recur in the event of revocation of anti-dumping duties. 28. The Authority has examined the likelihood of continuation or recurrence of injury con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... suffered injury on account 0t any of these factors. Even if none of the interested parties have pointed to possible existence of these factors, the authority is obliged to undertake analysis and rule out that the injury to the domestic industry is not primarily on account of these listed other factors. This is popularly known as nonattribution analysis . 32. It is submitted that at Para. 95-100 the Designated Authority has noted that listed known other factors have not caused injury to the domestic industry and if no other factor causing injury to the domestic industry has in fact been examined by the Authority, then, the only inference to be drawn is that dumped imports have caused injury to the domestic industry. 33. Without prejudice it is submitted that in case of a sunset review, Article 11.3 of the Anti Dumping Agreement only requires investigating authorities to determine whether the expiry of the duties would be likely to lead to continuation or recurrence of dumping and injury. Once it has been established that cessation of duties is likely to cause recurrence or continuation of dumping and injury to the domestic industry, there is no r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of such imposition, provided that if the Central Government, in a review, is of the opinion that cessation of such duty is likely to lead to continuation or recurrence of dumping and injury, in which case,the Central Govt. may, from time to time extend the period of such imposition for a further period of five years . Thus, the legal provision clearly is that the anti dumping duty can be extended further from time to time. if it is found that dumping and consequent injury to the domestic industry is likely in the event of cessation of anti dumping duty . Further, there is no requirement under the law that it should be a special case as argued by the other interested parties in view of Final Finding concerning Dry Cell Batteries from China PR (Case No. 15/2/2011-DGAD Final Findings dated 20th May 2013), which is not applicable in the facts and circumstances of the present case. Illustrative list of cases where Anti-dumping duties have been extended by India beyond 15 years SN Product Country Duty since Time ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ess Steel Bar India 2/21/1995 23 92 2 Sulfanitic Acid India 3/2/1993 35 90 3 Pressure Sensitive Plastic Tape Italy 10/21/1977 41 27 4 Prestressed Concrete Steel Wire Japan 12/8/1978 40 14 5 Silico manganese Ukraine 10/31/1994 24 24 6 Circular Welded Non-alloy steel Pipe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 27 17 Helical Spring Lock Washer Taiwan 6/28/1993 25 58 18 Potassium Permanganate China 1/31/1984 34 99 19 Petroleum Wax Candles China 8/28/19856 32 42 20 Porcelain-onsteel Cooking Ware China 12/2/1986 32 15 21 Iron Construction Casting Canada 3/5/1986 32 90 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n following cases beyond 15 years. Sn Product Country Duty since Time period Year Day Day 1. Sacks and bags of jute Bangladesh 2 / 10 / 1992 26 96 2. Coated cardboard China 31 / 10 / 2001 17 26 3. Garlic, fresh or refrigerated China 18 / 1 / 1196 23 2 4. Permanent magnets ferrite rings and discs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... b. Large scale production suspension in India : As already submitted petitioner again requests the Authority to consider the fact that due to the adverse effect of the insufficient form of duty there were large scale production suspension in the country which was primarily in the last two decades (all these closures are more than 5 years old and are prior to previous extension of ADD), c. Paracetamol formulation prices are covered under DPCO and NPPA therefore no adverse effect on the consumers The NPPA regulates the prices of Paracetamol formulation and therefore even Iife the product under consideration is not a formulation, considering that the cost of the product under consideration forms majority of the cost of Paracetamol formulation, there is an automatic; check on the prices at which the producers of the product under consideration can sell the product in the market. The Authority further notes that Paracetamol .is listed under National List of Essential Medicines and it is one of the cheapest pain killer being most widely used in the Country. Thus, while the price of both formulation and bulk drug are capped, the producers of Paracetamol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ters/importers/other interested parties 16. None of the interested patties have disputed the claims made by the domestic industry in this regard. C.3 Examination by Authority l7. The Authority notes from the information available on record that the product under consideration produced by the Domestic Industry is like article to the goods imported from the subject country. Product under consideration produced by the Domestic Industry and imported from the subject country are comparable in terms of physical characteristics, manufacturing process technology, functions uses, product specifications and tariff classification of the goods. It is further noted that the Designated Authority had examined the issue of product under consideration and like article in the previous investigations, which mutatis mutandis is relied upon in the present review investigation. The goods produced by the Domestic Industry and imported from the subject country are like articles in terms of the Rule 2(d) of the Anti-Dumping Rules. The two are technically and commercially substitutable. The consumers are using the two interchangeably. E. IS ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion, it has been mentioned that Sri Krishna Pharmaceuticals Ltd. has imported the subject goods. However,the reasons have not been provided by the domestic industry. h. The domestic industry has claimed adjustment from export price for ocean freight, marine insurance, port expenses, bank charges, inland transportation, commission and VAT adjustment. However, no evidence with regard to the aforesaid adjustments claimed have been provided by the domestic industry i. Profit/loss and ROCE in percentage terms have been kept confidential, j. The Hon'ble Authority may kindly direct the petitioners to disclose and provide the aforesaid information so as to enable the exporters / producers for making effective comments in this investigation.. E.3 Examination by the Authority 26. With regard to confidentiality of information, Rule 7 of Anti-dumping Rules provides as follows: 7. Confidential informations:- ( 1) Notwithstanding anything contained in sub rules (2), (3) and (7) of rule 6, sub-rule (2) of 12, sub-rule (4) of rule 15 and sub-rule (4) of r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ii. M/s A.H.A lntemational Co., Ltd. iii China Sinophamt International Corporation iv. Zhejiang Chemicals Import and Export Corporation. v. Lianyungang Kangle Pharmaceutical Co., Ltd. vi. Zhejiang Kangle Pharmaceutical Co., Ltd. vii. Hebei Jiheng (group) Pharmaceutical Co. Ltd. 40. According to Section 9A (1) (c) of the Customs Tariff Act, 1975 Normal Value in relation to an article means:- comparable price, in the ordinary course of trade. for the like article when meant for consumption in the exporting county or territory as determined in accordance with the rules made under sub-section (6); or when there are no sales of the like article in the ordinary course 0ftrade in the domestic market of the exporting country or territory, or when because of the particular market situation or low volume of 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve, the same are required to be excluded for determination of dumping margin. vi. There can be no plausible reason / justification for such significant difference in the prices in respect of imports being reported at the same time. G.2 Views of the interested parties 42. The submissions made by the producers/exporters/importers/other interested parties are as follows:- i. Determination of the normal value for subject country in the current investigation as computed by the domestic industry is not in accordance with the legal provisions and therefore, the determination of dumping margin in the current investigation by the petitioners is flawed. ii. Normal value for the companies in China PR in the current investigation may please be determined on the basis of their domestic sales and the cost of the subject goods. iii. It is in view of the fact that the period of 15 years for disregarding the domestic prices or costs of Chinese producers not being on market economy conditions as provided in para 15(a) (ii) of the Protocol of Accession of the People s Republic of China to WTO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... make necessary information available about the third country. xii. In the absence of following the mandatory procedure, the present proceeding cannot continue in view of the decision of the Hon ble Supreme Court in the case of Shenyang Matsushita 2005 (181) ELT 320 (SC). xiii. The failure to follow the mandatory procedure of Para 7 has substantive implications on the determination of the normal value and resultantly the dumping margin. xiv. Therefore, the Hon ble Authority is requested to follow the procedure prescribed in Para 7 of the Annexure I in the current investigation. G.3 Examination by the Authority a. Normal Value in China 43. Upon initiation, the Authority advised the producers/exporters in China to respond to the notice of initiation and provide information relevant to determination of normal value. The Authority sent copies of the Supplementary questionnaire to all the known producers/ exporters for rebutting presumption of nonmarket economy in accordance with criteria laid down in Para 8(3) of Annexure-I to the AD Rules. The Authority also requested Governm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xported *** MT of the subject goods directly to India and *** MT through it traders M/s A.H.A International Co., Ltd., China Sinopharm International Corporation and Zhejiang Chemicals Import and Export Corporation. The Authority notes that whereas Anqiu Lu An Pharmaceutical Co has reported an export price of US$ ***/MT and A.H.A international Co., Ltd., China Sinopharm International Corporation and Zhejiang Chemicals Import and Export Corporation have reported net export price of US$ ***, US$ ***/MT and US$***/MT respectively. 49. The producers-exporters have claimed price adjustments on account of inland freight, ocean freight, and marine insurance, credit cost, port expenses and VAT. Ex-factory export price has been determined for each producer/exporter. Weighted average export price of the said producer and its respective traders have thereafter been determined as US$ *** /MT considering the total volume of exports made by the said exporter. M/s Lianyungang Kangle Pharmaceutical Co., Ltd. (produder) and M/s Zhejiang Kangle Pharmaceutical Co., Ltd. 50. The Authority notes that M/s Lianyungang Kangle Pharmaceutical Co. has ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Capacity MT *** *** *** *** Trend Indexed 100 100 100 100 Production MT *** *** *** *** Trend Indexed 100 103 111 126 Capacity Utilization % *** *** *** *** Trend Indexed 100 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 30 65 Total Demand MT 48,251 50,295 49,603 50,7 70 71. From the above information it is noted that i) Sales of DI and other Indian producers have increased from the base year. ii) Imports from China PR and others countries have declined from the base year despite increase in total demand during the same period. c) Market Share in Demand 72. The details of market share of the Domestic Industry in demand are given in table below. Particulars Unit 2014- 15 2015 -16 2016- 17 POI Sales of Domestic Industry % *** *** ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 255 Return on Capital Employed-NFA % *** *** *** *** Trend Indexed 100 173 90 136 Para J. 82. J.1 Submissions by the Domestic Industry 82. Following are the submissions made by the Domestic Industry with regard to likelihood of continuation of dumping and consequent recurrence of injury- i. A perusal of Article 11.1 of AD Agreement and Section 9A (5) of the Customs Tariff Act, clearly suggests that the main intent behind the legislation of Sunset Review investigation is to examine:- a) Whether the dumping continued and if so, whether it is likely to continue; b) In case where dumping did not continue, whether the dumping would recur in the event o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a Agro Industries Drugs Ltd. M/s Pan Drug M/s Alpha Drug M/s Glaxosmithkline Pharmaceuticals Ltd. M/s Thexa Pharma Pvt. Ltd. M/s Vani Pharma Labs Ltd. Rohini Chemical Fortune Chemical Dinesh Pharmaceutical Dr. Jain s Company Saboo Medichem ix. The production of product under consideration is quite limited globally. About 86% of global production is in India and China. 62% of the production is in China alone, while India commands 24%. Thus, any sickness in this industry would leave the global demand at the mercy of the Chinese producers. x. The questionnaire responses filed by the exporters, establish that there is import of subject goods from subject country at dumped price. xi. The domestic industry in the present scenario is still reeling from the adverse effects of the dumping and has shown marginal growth in terms of its economic parameters. The same growth would be reversed if the Anti dumping duty is ceased by the Authority. x ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... J.2 Submission of exporters 83. There is no likelihood of recurrence of injury as per Article 9A (5) of the Customs and Tariffs Act. i. The petitioners have not given the details of excessive capacity available with the Chinese producers and their likelihood of being exported to India, the petitioners have failed to make out a case of likelihood of dumping. ii. This clearly indicates that there is no likelihood of injury to the domestic industry in the current investigation and the present investigation deserves termination. J.3 Examination by the Authority 84. The Authority examined the likelihood of continuation or recurrence of injury considering the parameters relating to the threat of material injury in terms of Annexure II (vii) of the Anti-dumping Rules. The domestic industry has submitted the details of exports of China to third countries as per China customs which shows that ***% volume of exports to third countries are at a price lower than price at which China exports to India and ***% of the volume of exports to third countries are at a price above than price at whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s imports of the cooperative producer of the present investigation is as follows:- a) M/s Anqiu Lu An Pharmaceutical Co., Ltd. The total exports to India by the said producer with trade of the subject goods are *** MT out which *** MT are dumped imports and *** MT are injurious imports. b) M/s Lianyungang Kangle Pharmaceutical Co. Ltd. Total exports to India by the said producer of the subject goods through its exporters is *** MT out which dumped imports constitute *** MT. No injurious imports were found for the said producer through its exporter. c) M/s Hebei Jiheng (group) Pharmaceutical Co. Ltd. Total exports to India by the said producer with trader of the subject goods is *** MT . All imports of the said producer are dumped and ***MT are injurious. ( 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. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the Chinese producers are export oriented. ( C) Inventories of the article being investigated 90. The questionnaire response filed by the Chinese producer's shows that level of inventories\ with the cooperative producers/exporters is quite significant. Producer Units 2015 2016 2017 POI M/s. Anqiu Lu An Pharmaceutical Co. Ltd. MT *** *** *** *** Lianyungang Kangle Pharmaceutical Co., Ltd MT *** *** *** *** Hebei Jiheng (group) pharmaceutical Co. Ltd. MT *** *** ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... *** *** *** Syrian (SY) *** *** *** Benin (BJ) *** *** *** Mozambique (MZ) *** *** *** United Arab Emirates (AE) *** *** *** Tanzania (TZ) *** *** *** Lithuania (LT) *** *** *** Source: China Custom 92. The Authority notes that ***% total volume of exports to third countries is at a price lower than the price at which China exports to India. Whe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0.06.2019, Respondents No.1 to 3 have issued Notification No.22/2019-Customs (ADD) extending the Anti-Dumping Duty upto 24.06.2019. ( xxxi) On 11.06.2019, the petitioners did not press I.A. No.2 of 2019. ( xxxii) On 20.06.2019, a final hearing was conducted and this Court has passed order for issuance of Notification for extension of Anti-Dumping Duty till 09.07.2019. 14. The Court is called-upon to examine the rival contentions of the parties, which needs to be examined in light of the aforesaid indisputable aspects set-out hereinabove. The position of law in respect of the remedies on final findings is now clear. The respondents have relied on the following decisions for their contentions that the alternative remedy in terms of Section 9C of the Act may persuade this Court in not interfering with the final findings. 1. Designated Authority Vs. Sandisk International Ltd, (2018) 13 SCC 402 the Supreme Court set aside the judgment of Delhi High Court allowing a Writ Petition and held that the final findings of the designated authority cannot be challenged under Article 226 of the Constituti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of ninety days, if it is satisfied that the appellant was prevented by sufficient cause from filing the appeal in time. ( 3) The Appellate Tribunal may, after giving the parties to the appeal, an opportunity of being heard, pass such orders thereon as it thinks fit, confirming, modifying or annulling the order appealed against. ( 4) The provisions of sub-sections (1), (2), (5) and (6) of section 129C of the Customs Act, 1962 (52 of 1962) shall apply to the Appellate Tribunal in the discharge of its functions under this Act as they apply to it in the discharge of its functions under the Customs Act, 1962 (52 of 1962). ( 5) Every appeal under sub-section (1) shall be heard by a Special Bench constituted by the President of the Appellate Tribunal for hearing such appeals and such Bench shall consist of the President and not less than two members and shall include one judicial member and one technical member. The counsel for the petitioner contended that sub-Section-3 of Section-9C of the Act does not provide any express authority and power or jurisdiction in the tribunal to issue direction to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ra) the hiatus created on account of non-issuance of the notification of extending anti dumping duty would be viewed as fatal and therefore, in order to provide full opportunity and for compliance with the principle of natural justice, the Court is under obligation to issue appropriate direction at times interim direction for preventing any irretrievable situation jeopardizing the entire matter without adjudication. If one looks at from this angle, then one will have no other alternative but to accept the submission of learned counsel for the petitioner that the alternative remedy of appeal u/s.9C of the Act at-least in facts of the present case cannot be said to be so efficacious as to dissuade this Court from entertaining the petition and relegating the parties to the appellate forum. 15. In the case of Designated Authority Vs. Sandisk International Limited reported in (2018) 3 SCC 402 , the Supreme Court has held and observed in para-6 as under:- 6. Though we would not deem it appropriate to lay down any inflexible proposition of law that in no case the final findings of the Designated Authority can be subject to challenge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se essential facts which would form the basis for its decision as to whether or not to apply definitive measures and not its conclusions on the basis of those essential facts. The conclusions on the basis of the essential facts are to be recorded in the final findings, viz., whether or not on the basis of such facts definitive measures are required to be applied. The contention that the disclosure statement is in the nature of a draft order, therefore, does not merit acceptance, inasmuch as, a draft order would also contain conclusions on whether or not definitive measures are required to be applied. 32. The next question that arises for consideration is whether or not the essential facts have been disclosed in the disclosure statement. 32.11 Thus, the designated authority has taken into consideration the aforesaid factors while coming to the conclusion as to whether or not definitive measures are required to be applied. In this regard, it may be noted that the designated authority has not disclosed the details of dumping margin calculations to the petitioner, viz., the difference between the Export Price and Normal Value. The designated authorit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e required to be disclosed to the interested parties. A perusal of the tabular form regarding the data which are reproduced in the disclosure statement reveals that at various places instead of the relevant data the table contains asterisks which would indicate that such information is confidential. While it is true that the such information being confidential in nature, cannot be disclosed in the disclosure statement itself, it appears to be the general practice to provide the same to the parties separately. However, in the facts of the present case, despite the fact that the information has been furnished by the domestic industry itself, the computation of the various factors referred to hereinabove, has not been furnished to the domestic industry. In the opinion of this court, it was incumbent upon the designated authority to furnish the relevant facts which have been used by it as the basis for arriving at its conclusion on the essential facts necessary for the purpose of arriving at a decision as to whether or not the definitive measures are required to be applied. Non-disclosure of the essential facts is, therefore, clearly in breach of the principles of natural justice. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, it is manifest that while doing so, it has taken into consideration incorrect facts, inasmuch as, instead of considering the capacity of production of the exporters indicating the likelihood of substantially increased dumped exports to Indian markets, as contemplated under subclause (b), it has taken into consideration the capacity of production of the domestic industry; and instead of taking into consideration the existence of inventories of the dumped imports that could meet any increase or future demand for the imports, has taken into consideration the inventories of the domestic industry. Evidently therefore, the designated authority has failed to follow the procedure laid down under clause (vii) of Annexure-II to the rules for the purpose of determination of threat of material injury in the manner prescribed thereunder. 17.1 In the case of Reliance Industries Limited Vs. Designated Authority (supra) , the Supreme Court has held and observed in paras-41, 43, 44 and 45 as under:- 41. The DA claimed confidentiality from the appellant about its finding on the data supplied by the appellant itself. In our opinion, there was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble to the other side affects the other side as they get handicapped in filing an effective appeal. Therefore, confidentiality under Rule 7 is not something which must be automatically assumed. Of course in such cases there is need for confidentiality as otherwsie trade competitors would obtain confidential information, which they cannot otherwise get. But whether information supplied is required to be kept confidential has to be considered on a case-to-case basis. It is for the Designated Authority to decide whether a particular material is required to be kept confidential. Even where confidentiality is required, it will always be open for the Appellate Authority, namely CEGAT to look into the relevant files. 45. In our opinion, excessive and unwarranted claim of confidentiality defeats the right to appeal. In the absence of knowledge of the consequences, grounds, reasoning and methodology by which the DA has arrived at its decision and made its recommendation, the parties to the proceedings cannot effectively exercise their right to appeal either before the Tribunal or this Court. This is contrary to the view taken by the Constitution Bench of this Court in S. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ential or which is provided on a confidential basis is required to be treated as confidential by the authorities but only on being satisfied by good cause shown for the confidentiality claimed. No doubt the opening clause of Article 6.5 covers any information which is by nature confidential but the examples indicated therein clearly reveal that such information is required to be kept confidential because if revealed it would give significant advantage to a competitor or would have significant adverse effect upon the person supplying the information or his resource person from whom he acquired the information. The submission that DA is entitled to presume such effects without any claim being made by the party supplying the information is, however, not acceptable for reasons more than one. The examples are clearly meant to be only a guiding factor for the DA who cannot by exercise of discretion presume confidentiality and thereby restrict the rights of the interested parties to see relevant informations that may be used by the DA for the investigation. The DA, being a statutory investigator, cannot assume for himself the role of a party for the purpose of Rule 7 and to claim as well ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mation. 19. Looking at the contents of Rule 7 and the facts and issues involved in Reliance Industries case, we agree with the submissions of Mr. Patil that fact situation in that case was entirely different and the Court was not examining the provisions of Rule 7 in any detail but made rather scathing observations against the DA because the DA claimed confidentiality not in respect of any information but in respect of its findings based upon information supplied by the same party who was aggrieved by non-supply of the findings. The observations in Reliance Industries case must be understood in the fact situation of that case in view of well established proposition of law that the ratio decidendi consists in the reasons formulated by the court for resolving an issue arising for determination and not in what may logically appear to flow from observations on non issues. Reference in this regard may be made to law enunciated on this point by a Constitution Bench, in paragraph 20 of the judgment in the case of Krishena Kumar v. Union of India Ors. [7] In the given facts, the observations in paragraph 43 in the case of Reliance Industries are fully justified and do not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich more than insignificant as defined in Rule 14(d) of the Rules has not been properly considered by respondent No.2. The volume of insignificant import has been dealt with in Rule 14(d) which reads as under:- RULE 14. Termination of investigation . The designated authority shall, by issue of a public notice terminate an investigation immediately if - ( a) xxxx xxxx xxxx ( b) xxxx xxxx xxxx ( c) xxxx xxxx xxxx ( d) it determines the volume of the dumped imports, actual or potential, from a particular country accounts for less than three per cent of the imports of the like product, collectively account for more than seven per cent of the import of the like product; or ( e) xxxx xxxx xxxx Thus, according to Rule 14(d), the percentage has been given in the import of the like product. Now, admittedly, in view of para-62 at page No.265, the imports are 5.84% which is above the insignificant import as per Rule 14(d). Thus, the observations made by the DA is misreading of the facts and the DA has not properly appr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re Statement, in his conclusion reached in the Final Finding in its submissions, which have been reproduced hereinabove. On analysis of the same, it appears that while considering the import as insignificant which constituted 98% of the total import and 6% of consumption in India which more than insignificant as defined in Rule 14(d) of the Rules has not been properly considered by respondent No.2. The volume of insignificant import has been dealt with in Rule 14(d) which reads as under:- RULE 14. Termination of investigation . The designated authority shall, by issue of a public notice terminate an investigation immediately if - ( a) xxxx xxxx xxxx ( b) xxxx xxxx xxxx ( c) xxxx xxxx xxxx ( di) it determines the volume of the dumped imports, actual or potential, from a particular country accounts for less than three per cent of the imports of the like product, collectively account for more than seven per cent of the import of the like product; or ( e) xxxx xxxx xxxx Thus, according to Rule 14(d), the percenta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e attractive for Chinese exports so far as subject goods are concerned. 22. It appears from the Disclosure Statement as well as Final Finding that all the above facts are narrated therein, but without considering those facts and in diametrically opposed to the same, the DA has made conclusion. Thus, the submission of the petitioners that the DA has not properly appreciated the fact and has went beyond the evidence and information examined, is acceptable. It appears from the record that the conclusion arrived at by DA in Final Finding is not based on the observations made by him in Disclosure Statement as well as in Final Finding itself. Thus, there is lack of non-application of mind on the part of the authority concerned. 23. The DA has also made observation in para-126(6) that the ADD was in force since September 2001 and the condition of domestic industry has improved. But, this fact has no relevance for deciding likelihood injury if ADD is not extended. The ADD is required to be imposed so long as the investigation shows that the cessation of such duty is likely to lead to continuation or recurrence of dumping and injury. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is subject to the result of the petition. As such, considering the peculiar facts and circumstances of the case, this Court is of the view that the stand taken by respondent Union of India cannot be accepted and it is meritless, especially when it is found from the material placed on record that the DA has not taken into consideration the material placed on record, as conclusion in final finding is diametrically opposed to the observations made in the Disclosure Statement as well as in Final Findings and thus, as there is non-application of mind of the DA, this Court has power and jurisdiction to direct the concerned authority to extend the period of notification to impose ADD for a further period. 27. One of the submissions on behalf of the respondents as made by Mr.Desai, learned advocate for Union of India is that after Disclosure Statement and before passing of final order, nothing is required to be done and, therefore, there might be reproduction of facts and material which has been made in Disclosure Statement in the same in the Final Findings. This submission is devoid of merits. Had there been real intention of the legislature that nothing is requ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... diametrically opposed to the material on record. Therefore, we are left with no other alternative, but to remand back the matter to the concerned authority after quashing and setting aside the same for reconsideration on the aspects which have been mentioned herein above and record its finding, and as the extended period of notification of anti dumping duty is ending, the same is also required to be extended for appropriate time so that assessing the material and recording the final findings afresh could be undertaken meaningfully and without jeopardizing the parties right and contentions and rendering it infructuous. 30. In that view of the matter, the respondent no.2 is hereby directed to undertake the exercise of recording its final finding afresh in accordance with the observations made herein above strictly in accordance with the provisions of Rule-23 of the Rules and after affording full opportunity to the parties and complying with the principles of natural justice and respondent no.1 shall appropriately issue notification extending the anti dumping duty on the product in question, till the final findings are rendered. 31. In v ..... X X X X Extracts X X X X X X X X Extracts X X X X
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