TMI Blog2020 (7) TMI 426X X X X Extracts X X X X X X X X Extracts X X X X ..... ounsel for the Respondents that in such a situation the Appellant should not be permitted to raise this issue in this Appeal - rule 7 of the 1996 Procedure Rules applies rule 10 of the 1982 Procedure Rules to anti-dumping appeals and rule 10 of the 1982 Procedure Rules provides that the Appellant shall not, except with the leave of the Tribunal, urge or be heard in support of any ground not set forth in the memorandum of appeal. The Appellant has not sought any leave of the Tribunal to urge or to be heard in support of this ground not taken in the memorandum of appeal. It, however, needs to be noted that the Designated Authority in the initiation Notification dated July 4, 2017 has recorded a categorical finding that a duly substantiated application had been filed by the Domestic Industry. The second submission advanced by learned Chartered Accountant for the Appellant is that the Designated Authority incorrectly computed the landed value of the dumped goods by considering the preferential rate of duty which was nil under the ASEAN Agreement - HELD THAT:- The landed value of the dumped imports is computed by taking the assessable value with the applicable basic duty of customs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gs of the Designated Authority, it is clear that for year 2016-17 the market share in demand of the Domestic Industry ( the applicant) is 52.19%, whereas the market share in demand of the remaining six producers is 47.37 %. It cannot, therefore, be said that applicant Domestic Industry is a monopoly since term monopoly envisages existence of a sole producer/seller in the market. This apart, the Appellant has not been able to substantiate that the Domestic Industry has been exploiting the Indian market or that its selling prices are higher than international prices - the submission cannot be accepted. The fifth submission advanced by learned Chartered Accountant for the Appellant is that non-disclosure of non-injurious price calculation sheet has resulted in denial of principles of natural justice and in this connection, reliance has been placed on the decision of the Gujarat High Court in NIRMA LIMITED VERSUS UNION OF INDIA 6 [ 2017 (2) TMI 1206 - GUJARAT HIGH COURT] - HELD THAT:- It is not possible to accept this submission of the Appellant. The non-injurious price computation is based on the confidential cost of production of the Domestic Industry. It would be a serious ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urrent dumping margin and injury margin in terms of section 9A of the Tariff Act - whether in a sunset review, where an affirmative order for extension of anti-dumping duty is made on the basis that there is a likelihood of recurrence of dumping and injury, the rigours of section 9A(1) of the Tariff would still apply? - HELD THAT:- The scope of a sunset review was examined by the Supreme Court in UNION OF INDIA AND ANOTHER VERSUS M/S. KUMHO PETROCHEMICALS COMPANY LIMITED AND ANOTHER [ 2017 (6) TMI 526 - SUPREME COURT] and by the Tribunal in THAI ACRYLIC FIBRE CO. LTD. VERSUS DESIGNATED AUTHORITY [ 2010 (4) TMI 389 - CESTAT, NEW DELHI] - The Supreme Court pointed out that in a sunset review, focus is on the issue whether withdrawal of anti-dumping duty would lead to continuation or recurrence of dumping and injury to the Domestic Industry - Tribunal in Thai Acrylic Fibre have also been reproduced in paragraph 27 of this order. The Tribunal observed that since a sunset review entails a likelihood determination, the present levels of dumping are not that relevant as the likelihood of continuance or recurrence of dumping. Further, since during the period of investigation, the anti du ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a Ms. Shreya Dahiya and Ms. Priyamvada Sinha, Advocates for the Respondent- 3 and 4. Ms. Reena Khair, Shri Rajesh Sharma, Ms. Shreya Dahiya and Ms. Priyamvada Sinha, Advocates for the Appellant. Shri Ameet Singh, Amar Anand and Ms. Albeena Walia, Advocates for Designated Authority. Shri Rakesh Kumar, Authorised Representative for the Revenue Shri Dinesh Aggarwal, Chartered Accountant and Shri Mayank Jain, Advocate for the Respondent. ORDER Anti-Dumping Appeal No. 53285 of 2018 has been filed by Magotteaux Co. Limited [foreign exporter] to assail the final findings Notification dated June 11, 2018 of the Designated Authority, by which a recommendation has been made for continuation of the anti-dumping duty on imports of Grinding Media Balls (excluding forged grinding media balls) [ subject goods] originating in or exported from China PR and Thailand, on a sunset review investigation initiated at the instance of the domestic producers, namely M/s AIA Engineering Limited and M/s Welcast Steels Limited [ Domestic Industry] . The Appellant has also assailed the Notification dated July, 13, 2018 issued by the Government of India imposing anti-dumping ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of the anti-dumping duty in force by Notification dated July 04, 2017. The Designated Authority considered the period from April, 2016 to March, 2017 as the period of investigation. The injury investigation period was considered as 2013-14, 2014-15, 2015-16 and the period of investigation. The known exporters in the subject country, the Government of subject countries through their Embassy in India, the importers and users in India known to be concerned with the product were separately asked to submit relevant information in the form and manner prescribed to make their views known to Designated Authority. It was further provided that any information relating to the review and any request for hearing should be sent in writing so as to reach the Designated Authority not later than forty days from the date of publication of the Notification. It was also stated that in case any interested party refuses access to and otherwise did not provide necessary information within a reasonable period, or significantly impedes the investigation, the Designated Authority may declare such interested party as non-cooperative and record its findings on the basis of the facts available and make su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... *** a Total Indian Production MT 1,66,618 1,90,021 1,74,349 2,13,292 SN Name of unit UOM Share (%) 2013-14 2014-15 2015-16 POI 1 Petitioner Companies a AIA Engineering Ltd., % 61% 69% 73% 70% b Welcast Steels Ltd., % 23% 17% 12% 17% c Total of Petitioner companies % 84% 86% 85% 88% 2 Other Indian producers % ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... S No. Exporter/producer Normal value USD/MT Export Price USD/MT Dumping Margin USD/MT Dumping Margin (%) Range 1. M/s Magotteaux Co. Ltd. Thailand *** *** *** *** 30-40 2. All exporters/producers from Thailand *** *** *** *** 30-40 3. All exporters/ producers from China *** *** *** *** 0-10 (vi) In regard to the injury determination, the Designated Authority noted that the demand had shown increase over the injury period. In regard to the volume effect of dumped imports and impact on Domestic Industry, the Designated Authority prepared a table to summarize the factual position with regard to import volume and market share. On the basis of ab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds produced by the Domestic Industry with the landed value of the exports from the subject countries for determination of injury margin during the period of investigation. The injury margin so worked out is indicated in the table prepared by the Designated Authority: Table of Injury Margin. S. No Exporter/ producer NIP USD/ MT Landed value USD/MT Injury Margin USD/MT Injury Margin (%) Range 1. M/s Magotteaux Co Ltd., Thailand *** *** *** *** 0-10 2. All exporters/ producers from Thailand *** **** *** *** 0-10 3. All exporters/ producers from China *** *** *** *** 0-10 (ix) On the likelihood of continua ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... post disclosure submissions which were received from the interested parties and the relevant examination by the Designated Authority is reproduced below: 94. Regarding, the impact of the agreement between India and Thailand, the Authority has evaluated the Landed Value as per the applicable customs duties . The Authority notes that on the one hand the preferential trade agreements provisions might lower the landed value, but at the same time the exporters could leverage this to increase their export realisation by factoring the zero import duty advantage in export price as compared to other competitiors which would though increase the landed value to some extent on the one hand and also decrease the dumping margin due to increase in export price. Therefore, these aspects may also warrant an adjustment. Therefore, the Authority has adopted its consistent practice of evaluating the landed value with applicable customs duties. 95. The Authority observes that the exporter has contended that the exports have been made at a price higher than the DI price and at the same time it has contended that the Domestic Industry has earned high profit and the profitability thereof, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Authority clearly requires the exporters to provide separate information for different product types. Further, even during the table verification, such information was not provided readily and the same had to be called for through reminder . It is thus noted that exporter had made a conscious choice to not provide all relevant information to the Authority for grade wise determination. In the event of grossly inadequate exporter questionnaire response, the best available information had led the Authority to proceed on the basis of weighted averages . 99. As regard the contention that the volume of import is quite low in absolute terms or in relation to production and consumption, the Authority notes that in the present investigation petitioner itself has not claimed that imports are causing material injury. Nor has authority examined the case on the ground of continuation of injury. The present investigation has been conducted to determine whether dumping of the PUC is likely to cause injury to the domestic industry. Since the Authority is required to determine recurrence of injury in the present case, the actual volume of import in any case is not the sole relevant informati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... filed by the exporter from Thailand to assail the final findings of the Designated Authority as also the Notification issued by the Central Government. 11. Shri Dinesh Aggarwal, learned Chartered Accountant appearing for the Appellant, which is an exporter from Thailand, made the following submissions: (i) The application filed for initiation of investigation by Domestic Industry is not duly substantiated; (ii) The Designated Authority has incorrectly computed the landed value by considering the Preferential Rate of Duty (Nil Rate), as applicable under the ASEAN Agreement; (iii) The Domestic Industry is earning superlative profits and its Return on Capital Employed is in excess of 22% and, therefore, there is no need to continue the anti-dumping duty. In support of this contention, reliance has been placed on the following decisions. a. Alkali Manufacturers Association vs. Designated Authority [ 2006 (194) ELT 161 (Tri.-Del.) ]. b. Merino Panel Products Ltd. vs. Designated Authority [ 2016 (334) ELT 552 (Tri.-Del.) ]. c. Qingdao Doublestar Tyre Industrial Co. Ltd. vs. Union of India [ 2018 (364) ELT 852 (Tri.-Del.) ]. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 22% that has been regularly adopted by the Designated Authority. The profits are also below 10%, which, therefore, cannot be termed as superlative . The decisions on which reliance has been placed by the Appellant on this issue are not relevant as they relate to original investigations, where the current injury is relevant for imposition of duty, whereas in a sunset review, the issue that has to be examined is the likelihood of recurrence of injury; (iv) The Domestic Industry is not a monopoly. There are eight producers of the subject goods in India, out of which two are the applicant industry. The remaining producers enjoyed 47.3 % of market share demand during the period of investigation, whereas the applicant Domestic Industry had 52.19% of market share. (v) The decision of the Gujrat High Court in Nirma Limited is not applicable since in that case the calculation was required to be disclosed to the Domestic Industry, on whose data the computation of non-injuries price was carried out. In the present, case the Designated Authority was justified in not disclosing the confidential costing information of the Domestic Industry, that formed the basis for determin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e imposition of anti-dumping duty, moved an application under section 9A(5) of the Tariff Act read with rule 23 (1B) of Customs Tariff (Identification, Assessment and Collection of Anti-Dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995 [1995 Rules ] for extending the period of imposition of duty by five years for the reason that there was a likelihood of continuation or recurrence of dumping and injury on the subject goods originating in or exported from the subject countries. The Designated Authority initiated the investigation by Notification dated July 4, 2017, as it found the application filed by the Domestic Industry to be duly substantiated. After examination of the comments submitted by the interested parties to the disclosure statement earlier issued by the Designated Authority, the Designated Authority gave its final findings on June 11, 2018 recommending continuation of imposition of anti-dumping duty and the Central Government, by Notification dated July 16, 2018, imposed anti-dumping duty on the subject goods for a period of five years. 17. In order to appreciate the contentions advanced by learned Counsel for the parties, it would be a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to continuation or recurrence of dumping and injury to the Domestic Industry. The relevant provisions of rule 23(1B) of 1995 Rules are reproduced below: 23 (1B)- Notwithstanding anything contained in sub-rule (1) or (1A), any definitive anti-dumping duty levied under the Act, shall be effective for a period not exceeding five years from the date of its imposition, unless the Designated Authority comes to a conclusion, on a review initiated before that period on its own initiative or upon a duty substantiated request made by or on behalf of the Domestic Industry within a reasonable period of time prior to the expiry of that period, 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. (2) xxx xxx xxx (3)- The provisions of rules 6,7,8,9,10,11,16,17,18,19 and 20 shall be mutatis mutandis applicable in the case of review 21. At this stage, it may also be appropriate to refer to the relevant provisions of Annexure-II to the 1995 Rules that deal with the Principles for Determination of Injury and clauses (ii) and (vii), which are relevant, are reproduced below: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es determine, in a review initiated before that date on their own initiative or upon a duly substantiated request made by or on behalf of the Domestic Industry within a reasonable period of time prior to that date, that the expiry of the duty would be likely to lead to continuation or recurrence of dumping and injury. The duty may remain in force pending the outcome of such a review. 23. In exercise of the powers conferred by sub-section (6) of section 129 C of the Customs Act, 1962, the CEGAT Countervailing Duty and Anti-Dumping Duty (Procedure) Rules, 1996 [ 1996 Procedure Rules ] have been framed by the Tribunal. Rule 7 applies certain provisions of the Customs Excise and Gold (Control) Appellate Tribunal (Procedure) Rules, 1982 [ 1982 Procedure Rules ] to the 1996 Procedure Rules. It is reproduced below: 7. The provisions of Rules 7, 8, 9, 10, 11, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 35, 38, 39, 40 and 41 of the Customs, Excise and Gold (Control) Appellate Tribunal (Procedure) Rules, 1982 shall be deemed to be a part of these rules. 24. Rule 10 of the 1982 Procedure Rules is reproduced below: 10. Grounds which m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ine the scope of a sunset review, and the relevant paragraphs are reproduced below: 13. Unlike original investigations, sunset reviews are prospective in nature, as they focus on the likelihood of the continuation or recurrence of dumping and injury, in case antidumping duties are removed. With respect to the question whether dumping is likely to occur in the event that the anti-dumping duties are removed, the D.A. has to consider relevant economic facts which might indicate that in the event the anti-dumping duty is removed, dumping will recur. With respect to the injury determination, if the anti-dumping duty has had the desired effect, the condition of the Domestic Industry would be expected to have improved during the period the anti-dumping duty was in effect. Therefore, the assessment whether injury will continue, or recur, would entail a counter-factual analysis of future events, based on projected levels of dumped imports, prices, and impact on domestic producers. Thus the D.A. has to address the question as to whether the Domestic Industry is likely to be materially injured again, if duties are lifted. 14. Sunset review entails a likelihood determination i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of five years from the date of the order of extension. The guideline for such review is ingrained in the first proviso to sub-section (5) of Section 9A and the test adopted, for extending the period of imposition beyond five years, is to form an opinion whether the cessation of such duty was likely to lead to continuation or recurrence of dumping and injury; in other words, if the duty period is not extended, both dumping and injury will continue or recur. The expression likely to lead to recurrence would take within its fold situation where the dumping and injury may not exist at the time of review due to the imposition and continuance of anti-dumping duty which, if allowed to cease to have effect on the expiry of five years, is likely to lead to recurrence of dumping and injury. The said two provisos do not specifically deal with the situation where the anti-dumping duty is revoked earlier than the period of its normal duration of five years. It is, however, clear that even for such earlier revocation the review has to be undertaken, and it is in this context that, the provisions of Rule 23 assume significance. As noted above, sub-section (6) of Section 9 in its opening part c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat any basic duty of customs was actually paid on the subject goods exported by the Appellant. The Designated Authority examined this aspect in paragraph 94 of the final findings and this paragraph has been reproduced in paragraph 6(x) of this order. A finding has been recorded that the Designated Authority adopted its consistent practice of evaluation of the landed value with the applicable customs duty. The applicable customs duty in the present case is nil in view of the ASEAN Treaty. 34. The Third submission of learned Chartered Accountant for the Appellant is that there is no necessity for continuation of anti-dumping duty since the Domestic Industry is earning superlative profits and its Return on Capital Employed is in excess of 22%. In support of this contention learned Counsel for the Appellant has placed the figures given in the Profit and Loss Account and the balance sheet of the Domestic Producers and the figures for Earnings before Interest Depreciation Taxes and Amortisation [ EBIDTA ] have been taken as reflection of the profit and return on capital employed. 35. Apart from the fact that EBIDTA is not one of the listed injury parameters in An ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o are the applicant domestic industry. From a perusal of the chart contained in paragraph 65 of the final findings of the Designated Authority, it is clear that for year 2016-17 the market share in demand of the Domestic Industry ( the applicant) is 52.19%, whereas the market share in demand of the remaining six producers is 47.37 %. It cannot, therefore, be said that applicant Domestic Industry is a monopoly since term monopoly envisages existence of a sole producer/seller in the market. This apart, the Appellant has not been able to substantiate that the Domestic Industry has been exploiting the Indian market or that its selling prices are higher than international prices. In Indian Graphite MFRS ASSCN, on which reliance has been placed by learned Counsel for the Appellant, the Tribunal made the following observations; 6 The Designated Authority has to frame opinion whether cessation of such duty is likely to lead to continuation or recurrence of dumping and injury. Thus, the test required for framing the opinion whether the cessation of anti-dumping duty is likely to lead to continuation or recurrence of dumping and injury, the relevant factors to come to such conclus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts could not have caused any injury to the Domestic Industry so as to warrant an extension of anti-dumping duty in the sunset review. 47. It is correct that the imports from Thailand had less than 1% market share and hence were negligible. It is under rule 14 of the 1995 Rules that this factor could have been considered, but rule 14 has not been made applicable to a sunset review under rule 23(1B) of the 1995 Rules, as is clear from rule 23(3) of the 1995 rules. Thus, even if there is a low volume of import of the subject goods, this would not be a relevant consideration in a sunset review. The test to be applied in a sunset review is the likelihood of continuation or recurrence of dumping and injury. This aspect has been considered by the Designated Authority in Paragraph 99 of the final findings. The Designated Authority has recorded a categorical finding that since it was required to determine recurrence of injury, the actual volume of import would not be relevant for analysis of likelihood of injury. It is, therefore, not possible to accept the sixth submission of the Appellant. 48. The seventh submission advanced on behalf of the Appellant is that an erroneous find ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... around the world. For catering to the demand in North American market, the Appellant has plants in USA and Canada, plants in Brazil and Chile for the South American market, a plant in Belgium for the European market, and a plant in South Africa for the African market. The Thailand factory is, therefore, principally meant to cater to the demand of the Asian market. There are many large indigenous producers of subject goods in China, and therefore, the most attractive market for the Appellant, in the event of revocation of duty, would be India. (e) The Appellant is exporting to countries, other than India, at dumped prices. Any diversion of exports from third countries to India, would necessarily be at dumped prices, indicating the likelihood of future dumping. (f) The fact that the exports to India and third countries have been made at dumped prices, coupled with the unutilized capacity and substantial inventories, leaves no manner of any doubt that India is an attractive market for the Appellant (g) The Appellant has failed to provide transaction wise export information for third countries, which information was necessary to establish that the exports to other cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ountant for the Appellant is that the Designated Authority did not examine the causal link between the dumped imports and the injury to the Domestic Industry. 57. This submission of learned counsel for the Appellant cannot also be accepted. It is in an original investigation, where the determination is based on the existence of current dumping and current injury, that it is necessary for the Designated Authority to establish that the injury is not on account of any factors, other than the dumped imports. In fact, clause (v) of Annexure-II to the 1995 Rules gives a list of factors which are required to be examined for this purpose. In a sunset review the Designated Authority is required to examine the likelihood of recurrence of dumping and injury on the expiry of the anti-dumping duty. Thus, causal link in a sunset review is not required to be re-established, as the same had been established at the time of original investigation. 58. In this connection, it would be useful to refer to the report dated November 2, 2005 of the Appellate Body in United States- Anti-Dumping Measures . The said report refers to Article 3 and Article 11.3 of GATT. It needs to be remembered th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eview contemplated in Article 11.3 is a distinct process with a different purpose from the original investigation. The Appellate Body underlined that the nature of the determination to be made in a sunset review differs in certain essential respects from the nature of the determination to be made in an original investigation , and that the disciplines applicable to original investigations cannot, therefore, be automatically imported into review processes . 61. The Appellate Body then observed: As we stated earlier, in a sunset review determination under Article 11.3, the nexus to be demonstrated is between the expiry of the duty on the one hand, and the likelihood of continuation or recurrence of dumping and injury on the other hand. We note that Article 11.3, in fact, expressly postulates that, at the time of a sunset review, dumping and injury, or either of them, may have ceased, but that expiration of the duty may be likely to lead to recurrence of dumping and injury . Therefore, what is essential for an affirmative determination under Article 11.3 is proof of likelihood of continuation or recurrence of dumping and injury, if the duty expires. The nature ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all the relevant information in the form and manner prescribed by the Designated Authority. It has been submitted that the Designated Authority committed an error in treating the foreign exporter as cooperative despite excessive confidentiality claimed in the non-confidential version of the export questionnaire response and despite there being suppression of facts and misleading statements. 66. Shri Dinesh Aggarwal learned Chartered Accountant appearing for the foreign exporter has, however, submitted that the facts and circumstances did not warrant the foreign exporter to be treated as a non-cooperative exporter and the Designated Authority committed no ill-legality in not treating the foreign exporter as non-cooperative. 67. The principles governing investigations are contained in rule 6 of the 1995 Rules. Under rule 6(4), the Designated Authority issues a notice calling for information, in such form as may be specified by it, from the exporter, foreign producers and other interested parties and such information shall be furnished by such persons in writing within 30 days from the date of receipt of the notice or within such extended period as the Designated Authorit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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