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2020 (2) TMI 642

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..... neral agreement on Tariffs and Trade 1994 (ADA) needs to be examined. The said articles 6.9 stipulates that the Authority shall before a final determination is made, inform all interested parties of the essential facts under consideration which form the basis for the decision whether to apply definitive measures as prayed. Additionally article 6.9 also provides that such disclosure should provide sufficient time to the parties to defend their interest. In the Anti-Dumping investigation, since the Designated Authority has to find whether dumping, injury and causal link exist or not, the “essential facts” underlying the findings and conclusions relating to these elements shall form the basis of the decision under Rule 16 of the Anti-Dumping Rules. These “essential facts” are required to be disclosed to the domestic industry / interested parties. The word used in the Rule is “essential facts under consideration”, rather than “essential facts that should reasonably be considered”. Thus, the sole object of Rule 16 as well as of said article 6.9 is to allow parties to defend their interests. The meaning of word “fact” in various .....

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..... JUSTICE DILIP GUPTA, PRESIDENT, HON BLE MR. C.L. MAHAR, MEMBER (TECHNICAL) AND HON BLE MS. RACHNA GUPTA, MEMBER (JUDICIAL) Ms. Reena Khair, Shri Rajesh Sharma, Ms. Rita Jha and Ms. Shreya Dahiya, Advocates for the appellant Shri Ameet Singh and Shri Amit Randev, Advocate and G. Pradha, Director (Cost) for the Designated Authority Shri Sunil Kumar, Authorised Representative (DR), Shri Dhruv Gupta and Ms. Greetika Francis, Advocates for the Revenue Respondent ORDER RACHNA GUPTA 1. The present appeal has been filed against the final findings dated 2 September 2017 issued by the Designated Authority. 2. The relevant facts in brief are that M/s. Jindal Poly Films Limited (Division - Global Non Wovens), the appellant herein is a major producer of non woven fabrics made of polypropylene of GSM 25 or less. The appellant filed an application / petition dated 17 March 2016 before the Designated Authority under the Customs Tariff Act 1975, (hereinafter referred as the Act) and Customs Tariff (Identification, Assessment and Collection of Anti-Dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995 (referred as Anti-Dumping Rules hereinafter) praying for initiation of anti- .....

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..... Authority issued the final findings dated 2 September 2017 concluding as follows: The Authority notes that there is no causal link between the dumped imports material injury to the domestic industry due to reasons given above. Therefore, in terms of Rule 14(b), (e) and Rule 17(1)(iii) read with Rule 11(2) and paragraph V of Annexure II of the Anti Dumping Rules, the Designated Authority decides to terminate the present investigation which was initiated vide Notification no. 14/23/2015-DGAD dated 15.6.2016. 6. The Designated Authority also noted that in case of most of the participating exporters from subject countries, the dumping margin was de-minimus or negative except Toray Polytech (Nantong) Company Limited, China and Asahi Kasei Spunbound (Thailand) Co. Ltd. However, in some cases though the dumping margin was positive, the injury margin was negative. The Designated Authority also corrected the errors said to have inadvertently occurred in the calculation of dumping and injury margin in some cases. 7. It is thereafter that the appellant filed a writ petition bearing No. 8202/17 before the High Court of Delhi. However, the said writ petition was dismissed on 20 September 2018 .....

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..... for initiating anti-dumping investigation was filed in March 2016. The investigation initiated w.e.f. June 2016 in respect to the subject countries for a period of 9 months (1 July 2015 to 31 March 2016) as a period of investigation. It is impressed upon that the disclosure statement dated 2 August 2017 disclosed the following essential facts: i. Barring Hubei Gold Dragon, China and Asahi Kasei (Thailand), positive dumping margin was found for all exporters and for all countries. ii. The period of data collection was adequate for making a determination of injury, and that appellant was entitled to claim material retardation for establishment of domestic industry. iii. Despite increase in production and sales, the losses suffered by the domestic industry have increased. iv. The dumping margin is quite significantly high, and with such high magnitude of dumping margin, the imports are causing material injury to the domestic industry. v. There is a finding of material injury to the domestic industry. vi. The Authority found that there are no factors, other than the imports causing injury. 11. It is impressed upon that when the final findings dated 2 September 2017 were issued they we .....

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..... uired to be redressed by imposition of duty. The final findings regarding the said import is in the range of less than 20% of the total imports and, therefore, much above the threshold given in Rule 14(d). The findings about such volume of imports to be still insignificant and as such to have no causal link is, therefore, impressed upon to be contrary to the statute. 13. It is also impressed upon that final findings have actually not denied injury to the domestic market but the imposition of anti-dumping duty is denied on the ground that the said injury is due to the teething problems, the appellant manufacturing unit being at a nascent stage of production. It is submitted that no specific teething problem has been pointed out by the Designated Authority in its final finding. The contention that there is no causal link is also alleged to be faulty. It is submitted that the causal link analysis is carried out by first excluding all other factors than the dumped imports which may be causing injury to the domestic industry. If after excluding the effect of all such other factors, the inescapable conclusion is that the injury is a result of dumped imports, the Authority would be justif .....

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..... y the Designated Authority and its silence as to the normal price, dumping margin and injury margin for Malaysian exporter is another reason for setting aside the final findings. 17. The Learned counsel, in addition, has also impressed upon that the test of material retardation as provided for in section 9B of the Act read with rule 11 of the Anti-Dumping Rules has not been correctly applied by the Designated Authority. It is submitted that examination of material retardation can only be done for the period during which domestic industry exist and was making efforts for its establishment. There can be no past performance of domestic industry which can form a benchmark for an evaluation about the performance of domestic industry to either have improved or deteriorated during the period of investigation. It was in the knowledge of the Designated Authority since beginning that the appellant is a new establishment for which there can be no data for past performance available. During the course of investigation, domestic industry information for further period of two months was also furnished. Thus the performance of appellant for a total period of 21 months i.e. 9 months of POI and 12 .....

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..... earned counsel prayed that the impugned final findings be modified to the extent of imposing the requisite Anti-Dumping duty. 20. While rebutting these arguments, it has been submitted on behalf of Designated Authority as follows: 20.1 From the data provided by the appellant there is an increased production capacity as well as utilisation and that the per matrix losses kept decreasing. These findings were sufficient to falsify any apparent injury to the appellant, that too on account of dumping. There is no infirmity in the finding of the Designated Authority that though some losses were being suffered by the appellant, but they were due to the teething problems of the appellant, being a new manufacturer. With regard to the main grievance of the domestic industry about contradictions in the final findings and what was disclosed in the disclosure statement, it has been submitted by the learned counsel that the facts at the stage of final findings pointing dumping margin, injury and a causal link to injury were due to the methodology of taking highest export price and the lowest normal value at that stage. However, at the stage of disclosure statement, the error in the said methodolo .....

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..... respect to two exporters namely Toray Polytech (Nantong) Company Limited, China and all other producers / exporters from China PR but still the final finding are silent about the imposition of anti-dumping duty. 23. Though the Authority has contended that an error in disclosure statement crept in as PCN analysis was not carried out by making a PCN to PCN analysis comparison at the time of disclosure statement, the aforesaid inadvertent error was rectified, but the said PCN to PCN analysis is warranted only when a co-operative exporter makes a claim for a fair comparison. It is impressed upon that there is no material on record as to which PCN, the non co-operative exporters are selling in their home market or in India and therefore, the analysis has to be done for the product as a whole and not for the PCN. It is alleged that the methodology adopted is therefore inconsistent with the established practice of the Authority. The Authority otherwise also did not disclose as to whether the consistent methodology of adoption of highest normal value and lowest export price was followed in the final findings. The decision of Supreme Court in Union of India vs. Meghmani Organics Ltd. report .....

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..... hat the applicant is a domestic industry and after it examines the accuracy and adequacy of evidence as provided in the application and finds it to be sufficient evidence to its satisfaction regarding dumping, injury and a causal link between such dumped imports and the alleged injury to justify the initiation of an investigation. We find that in the impugned notification, the Designated Authority noted as follows: i. The production of the appellant constitutes a major proportion in the total production in India, and the appellant satisfies the standing as domestic industry. ii. The investigation was initiated in respect of Malaysia, Indonesia, Thailand, Saudi Arabia and China PR. iii. The evidence indicates prima facie that the subject goods are being dumped into India. iv. That there is prima facie evidence of dumping, injury and causal link between the dumping and injury to the domestic industry. v. The period of investigation was fixed from 1July 2015 to 31 March 2016. 27. Vide office memorandum dated 6.6.2017 time limit for completion of investigation upto 14.9.2016 was extended. Opportunity of public hearing thereafter was granted to interested parties on 10 May 2017. It is t .....

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..... ive with regard to price parameters. 28. Thus it is clear that the essential facts under consideration which would form the basis of final findings as disclosed in the disclosure statement established positive facts with regard to dumping of the product under consideration, injury to domestic industry and existence of causal link between dumping and injury in the manner as has been tabulated by the appellant in their arguments. The comments to the said disclosure statement were submitted by the appellant. It is thereafter that the Designated Authority issued final findings on 2.9.2017 holding as follows: i. The dumping margin becomes de minimis for most of the exporters. ii. The performance of the domestic industry could have been impacted by the start up operations. iii. The imports have increased because the domestic industry started production only in July 2015. iv. Nine months period is too small a period to judge the trend. v. The domestic industry is suffering losses, but it could be due to teething problems and not necessarily due to the dumped imports. vi. No duty is recommended as there is no causal link between the dumped imports and material injury to the dumped imports. .....

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..... rticles 6.9 stipulates that the Authority shall before a final determination is made, inform all interested parties of the essential facts under consideration which form the basis for the decision whether to apply definitive measures as prayed. Additionally article 6.9 also provides that such disclosure should provide sufficient time to the parties to defend their interest. In the Anti-Dumping investigation, since the Designated Authority has to find whether dumping, injury and causal link exist or not, the essential facts underlying the findings and conclusions relating to these elements shall form the basis of the decision under Rule 16 of the Anti-Dumping Rules. These essential facts are required to be disclosed to the domestic industry / interested parties. The word used in the Rule is essential facts under consideration , rather than essential facts that should reasonably be considered . Thus, the sole object of Rule 16 as well as of said article 6.9 is to allow parties to defend their interests. To render these provisions to be meaningful, the actual facts under consideration are the relevant facts, which facts have to be disclosed so as to afford an opportunity to the concer .....

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..... nd, therefore, the final findings must be based on an analysis expressed in the disclosure statement. 35. In the instant case, the conclusion arrived at by the Designated Authority in the disclosure statement clearly shows that their exists positive dumping material injury to the domestic industry and also a causal link between the dumped imports and the said material injury. Still the conclusions arrived at by the Designated Authority in the final findings are not only at variance with the disclosure statement but are also contrary to what was stated in the disclosure statement. 36. The Designated Authority, in its final findings, has also recorded that there was an inadvertent error in the disclosure statement with respect to the calculation of dumping and injury margin in some cases, which were corrected, but there is no explanation as to what the said inadvertent error was and how it was corrected. However, it has been explained in the submissions made during the course of hearing that in the disclosure statement PCN wise analysis was not carried out and the final findings are based on a PCN to PCN comparison and this inadvertent mistake that crept in the disclosure statement w .....

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..... the principles of natural justice as the Designated Authority is a quasi judicial authority. In Nirma Ltd. the Gujarat High Court held that if any additional data or information was to be used by the Designated Authority, it was incumbent upon the Designated Authority to put the parties to notice in respect of such additional information. The non sharing of the data on which reliance has been placed by the Designated Authority while recording final findings is a breach of the principles of natural justice. 39. In view of the above discussion, about the scope and object of the disclosure statement and the non compliance thereof results in violation of the principles of natural justice. It is, therefore, considered appropriate that the matter be dealt by the Designated Authority after disclosing complete essential facts under consideration to all the interested parties, including the appellant / domestic industry. The matter is remanded to the Designated Authority for: i. Issuing a fresh disclosure with complete details / data / information / methodology which may constitute essential facts under consideration ; ii. To afford an opportunity to the interested parties to submit their .....

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