Tax Management India. Com
                        Law and Practice: A Digital eBook ...

Category of Documents

TMI - Tax Management India. Com
Case Laws Acts Notifications Circulars Classification Forms Manuals SMS News Articles
Highlights
D. Forum
What's New

Share:      

        Home        
 

TMI Blog

Home List
← Previous Next →

2020 (2) TMI 642

..... Arabia and China PR - Whether the Designated Authority can give final findings contrary to the essential facts stated in the disclosure statement without even apprising the domestic industry? HELD THAT:- The foremost requirement is to understand the scope and object of the disclosure statement issued by the Designated Authority in terms of Rule 16 of Anti-Dumping Rules. This Rule mandates that the Designated Authority shall, before giving its findings, inform all interested parties of the “essential facts under consideration” which form the basis of its decision. In so far as the interpretation of Rule 16 of Anti-Dumping Rules is concerned, the WTO panel and appellate body of WTO decisions relating to interpretation of article 6.9 of the agreement on implementation of article VI of the general 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 shou .....

X X X X X X X

Full Text of the Document

X X X X X X X

..... e appellant, which facts did not form part of the disclosure statement and to which the appellant had no opportunity to deal with. The contention of the Appellant, therefore, has merit. Failure to make available to material on which the decision is based is clearly violation of principles of natural justice. It rather amounts to placing reliance on such data not made known to the party concerned. The matter is remanded to the Designated Authority for Issuing a fresh disclosure with complete details / data / information / methodology which may constitute essential facts under consideration; to afford an opportunity to the interested parties to submit their comments - appeal allowed by way of remand. - Anti Dumping Appeal No. 53579 of 2018 - Final Order No. 50231/2020 - 12-2-2020 - HON BLE MR. 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 Gupt .....

X X X X X X X

Full Text of the Document

X X X X X X X

..... ollows: S. No. Producer Dumping Margin Injury Margin Range Toray Polytech (Nantong)Company ltd. China 5-15 0-10 2 Hubei Gold Dragon Nonwoven Fabrics Co. Ltd. China (5-15) Negative 3 All others producers / exporters from China PR 15-25 10-20 4 Toray Polytech Jakarta, Indonesia 0-10 5-15 5 All other producers / exporters from Indonesia 15-25 5-15 6 All producers / exporters from Malaysia 15-25 20-30 7 Saudi German Co. for Nonwoven products, Saudi Arabia 0-10 0-10 8 All others producers / exporters from Saudi Arabia 5-15 0-10 9 Asahi Kasei Spunbond (Thailand) Co. Ltd. through Itochu Thailand Ltd. / Itochu India Ltd. 0-10 Negative 10 All other producers / exporters from Thailand 10-20 5. Comments to the said disclosure statement was submitted by the appellant. It is thereafter that the Designated 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 decide .....

X X X X X X X

Full Text of the Document

X X X X X X X

..... e enough to remove the injury on account of dumped imports and for a direction upon the Central Government to issue an appropriate notification imposing Anti-Dumping Duty. 9. We have heard 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) for the Revenue. Shri Dhruv Gupta and Ms. Greetika Francis, Advocates have appeared for the Respondent No. 3. 10. It is submitted on behalf of appellant that it set up a unit for the manufacture of non woven fabrics in Nashik, Maharashtra. The trial production started in February 2015, whereas commercial production started in July 2015. The application 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 Kase .....

X X X X X X X

Full Text of the Document

X X X X X X X

..... did not recommend for imposing duty at least with respect to imports from China nor has been imposed in the final findings. The observation of no causal link is contended to be absolutely false. The reasoning in this respect that volume of goods from China PR is extremely low and incapable of impacting the domestic industry is also contended to be a wrong finding. It has been submitted that findings cannot be supported by fresh reasons not contained in the order. Decision of the Supreme Court in Mohinder Singh Gill & Anr. Vs. The Chief Election Commissioner, New Delhi & Ors. (1978) 1 SCC 405 has been relied upon in this respect. It is impressed upon that as per Rule 14 (d) of Anti-Dumping Rules, the imports which are more than 3% of the total imports are actionable and dumping is required 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 up .....

X X X X X X X

Full Text of the Document

X X X X X X X

..... operative producers and exporters from EU, the highest domestic selling price of co-operative exporter without any adjustment has been taken into consideration for calculation of normal value. 16. It is submitted that as regards Malaysia, the response furnished by the exporter had been rejected by the Authority as unreliable as is evident from paragraph 53 of the final findings. Hence, no reliance could be placed thereon. The Malaysian exporter was found to have filed a malafide representation suppressing vital information from the Authority. Thus, the only material available to the Authority for determination of normal value and export price was the information submitted by the appellant (all the other exporters being non co-operative). Non-consideration of the submissions of the appellant by 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 .....

X X X X X X X

Full Text of the Document

X X X X X X X

..... orter / respondent no. 3. It is submitted that since the representation filed by the Malaysian exporter was rejected by the Designated Authority in paragraph 53 of the impugned findings, the exporters stand excluded from investigation for all intents and purpose and would have no locus standi to participate in proceedings except by way of an appeal. It is impressed upon that participation of exporters, who rendered malafide representations in the investigation process, would only encourage non cooperation of various exporters / producers. Hence, no opportunity of being heard should be provided to the Malaysian exporter. As appeal has not been filed by him against the said representation, he has no locus standi to appear and submit before this Tribunal in this appeal. With these submissions, learned 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 fi .....

X X X X X X X

Full Text of the Document

X X X X X X X

..... e above the cost price of its production. The Appellant is sustaining the continuous losses and such loss making sales will actually compel the appellant to shut down its unit, thereby fulfilling the objective of the exporters. It is also impressed upon that increased capacity utilisation and increased sale are rather sufficient to falsify the observation of Authority in the final findings that the injury is due to the teething problems. It is further impressed upon that had the issue been only of teething problems, the industry being at nascent stage, even capacity utilization and sale could not have increased. It is submitted that disclosure is clearly showing positive dumping, positive injury and link thereto with respect to all the exporters and even the final findings show the same with 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 discl .....

X X X X X X X

Full Text of the Document

X X X X X X X

..... stry for manufacturing non woven fabrics in Nashik in January 2015 and conducted the trial production from February 2015. The Commercial production therein started in July 2015. It is eight months after the said commercial production that the appellant filed an application dated 17.3.2016 requesting for initiation of investigation under Rule 5(1) of Anti-Dumping Rules 1995 for determination of the existence, degree and effect of the significant dumping and injury, that materially retarded the establishment of the appellant. In furtherance whereof investigations were initiated by the Designated Authority vide notification dated 15.6.2016 issued in terms of Rule 5(3) of Anti-Dumping Rules. The Rule clarifies that the initiation notice shall be given after Designated Authority satisfies itself that 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 Author .....

X X X X X X X

Full Text of the Document

X X X X X X X

..... od as also the selling price. Further, selling price is far below the cost of sales. viii. The domestic industry has been suffering significant losses. The extent of cash loss is quite significant. The extent of cash losses suffered by the Domestic Industry increased over the period. ix. The Domestic industry is suffering negative return on capital employed throughout the period. x. Despite increase in production and sales, the losses suffered by the Domestic Industry increased. xi. Inventories of the Domestic Industry increased in the investigation period and even in the Post POI period. Further, the increase in inventories is despite the production restrictions employed by the Domestic Industry. xii. The growth of the Domestic Industry was positive with regard to volume parameters and negative 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 .....

X X X X X X X

Full Text of the Document

X X X X X X X

..... to the essential facts stated in the disclosure statement without even apprising the domestic industry. 32. To decide this issue, the foremost requirement is to understand the scope and object of the disclosure statement issued by the Designated Authority in terms of Rule 16 of Anti-Dumping Rules. This Rule mandates that the Designated Authority shall, before giving its findings, inform all interested parties of the essential facts under consideration which form the basis of its decision. In so far as the interpretation of Rule 16 of Anti-Dumping Rules is concerned, the WTO panel and appellate body of WTO decisions relating to interpretation of article 6.9 of the agreement on implementation of article VI of the general 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 .....

X X X X X X X

Full Text of the Document

X X X X X X X

..... interested parties are able to clearly understand what data the investigating authority has used and how this data and relevant facts were used to determine the margin of dumping. The disclosure statement, therefore, contains the intermediate findings and conclusions of the Designated Authority on the essential facts which would form the basis for the decision to apply or not to apply definitive measures in the final findings. The stage of disclosure under rule 16 and the final findings under Rule 17 are both after submission of evidence / information and the arguments / submissions of all the interested parties. Thus, the essential facts as contemplated under Rule 16, are not merely a replica of information received by the interested parties but are the analysis by the Designated Authority and, 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 conclusi .....

X X X X X X X

Full Text of the Document

X X X X X X X

..... notification is subject to an appeal before this Tribunal. This makes it clear that the proceedings before the Designated Authority are quasi judicial in nature. The Supreme Court further clarified that when a decision is not in consonance to the essential facts under consideration as were disclosed to the interested parties, including the domestic industry, it was incumbent upon the Designated Authority to specify the reasons for such diversion. Any additional data / information / submission or methodology used by the Designated Authority while coming to such a decision was required to be made known by Designated Authority to the interested parties, including the domestic industry prior to taking a final decision. 38. Absence of the requisite disclosure of information amounts to violation of 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 .....

X X X X X X X

Full Text of the Document

X X X X X X X

 

 

← Previous Next →

 

 

|| Home || About us || Feedback || Contact us || Disclaimer || Terms of Use || Privacy Policy || Database || Members || Refer Us ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.
|| Blog || Site Map - Recent || Site Map ||