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TMI Blog2020 (7) TMI 487X X X X Extracts X X X X X X X X Extracts X X X X ..... on import of Ductile Iron Pipes, DI Pipes originating in or exported from China PR. This application was rejected by the Designated Authority by the above said Final findings dated 01 April 2019. 3. It is a matter of record that the appellant is engaged in the business of manufacture of Ductile Iron Pipes and products. The appellant made an application under Rule 5 of the Anti-Dumping Rules, 1995 for initiation of Anti-Dumping investigation into imports of DI Pipes originating in or exported from China. In the beginning of 2006. the Designated Authority started investigation by issuing a notification dated 24 February, 2006 with respect to Import of DI pipes from China PR. The Designated Authority vide its Final findings dated 23 August, 2007 recommended imposition of Anti-Dumping Duty upon the imports of DI pipes from China PR for a period of five years. In pursuance to the recommendation of Designated Authority, the Ministry of Finance issued a Customs Notification dated 14 September 2007 levying Anti-Dumping Duty for a period of five years. 4. The appellant filed an application under Rule 23(1B) of Anti-Dumping Rules, 1995 for initiation of a sunset review investigation for co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e necessary follow up action of its judgement dated 26 September, 2018. After the orders of the Gujarat High Court, the Designated Authority vide Notification initiated the second sunset review investigation concerning imports of the DI pipes from China PR. It is a matter of record that in the meanwhile Ministry of Finance issued a Notification dated 09 October, 2018 whereunder the Anti-Dumping Duty was further extended on import of DI pipes from China PR for further period of six months up to 09 April, 2019. On 01 April, 2019, the Designated Authority issued Final findings concluding that the continuation of the existing anti-dumping duties on the subject goods was not warranted. 8. Being aggrieved by the said Final findings of the Designated Authority, the appellant again filed a Special Civil Application No. 6896 of 2019 before the Gujarat High Court. The High Court vide its two interim orders extended the imposition of Anti-Dumping Duty up to 23 June, 2019. Accordingly, the last notification was issued on 09 May, 2019 for continuation of Anti-Dumping Duty up to 23 June, 2019. 9. In the above background, the contention of the appellant is that the impugned Final findings dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the cost of production has been added to arrive at the constructed normal value. By adopting this method, the constructed normal value was determined. Present Sunset review Findings As part of the proceedings in this investigation, the Authority had sent questionnaires to the known exporters/producers from the subject country advising them to provide information in the form and manner prescribed. There has been no response to the questionnaire nor has there been any submission by any of the Chinese producers /exports. In the absence of cooperation from the Chinese exporters/producers, the Authority determines to construct the normal value on the basis of facts available. The constructed normal value so determined is as Rs.*** per MT (USD*** per MT) Submissions of the appellant The methodology used for the computation of normal value has not been disclosed to the petitioner as against the full disclosure of methodology in the earlier case. Determination of export price 1st Sunset review Findings The Authority notes that there are no exports of the subject goods to India from the subject country in the entire injury investigation period including the POI and the post POI. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rices. This proves beyond an iota of doubt that there is every likelihood that at these prices, if the excess capacity is diverted to India, injury to Domestic Industry would be imminent. Non-participation of Chinese Exporters 1st Sunset review Findings All other interested parties who could have given valuable information to the Authority have preferred not to cooperate with the Authority in the present investigations. The Authority notes that the relevant information from the interested parties is more important in sunset review investigations where an assessment of likelihood is required to be made. Present Sunset review Findings No such examination Submissions of the appellant Despite non-cooperation by Government of China and producers, exporters and importers, adverse inference has been drawn against domestic industry for absence of information. Likely export price 1st Sunset review Findings As regards the submission of SGPL that only the weighted average price to rest of the world should be taken into consideration for the purpose of estimating the likely export price to India, the Authority notes that even if w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... works export price of the exports from China PR is determined by the Authority by making appropriate adjustments to the likely net export price on account of inland freight and insurance, commission, port expenses, bank charges and VAT adjustment. After making these adjustments, the likely adjusted ex-factory export price determined is as US$*** per MT. Likely Dumping Margin during POI is. US$ (per MT) Normal Value *** Net Export Price *** Likely Dumping Margin *** Likely Dumping Margin% *** Likely Dumping 0-10 Margin% Range *** Present Sunset review Findings No such examination Submissions of the appellant Likely export price and likely dumping margin from China has not been computed in the impugned Final Findings though information the regarding the same was submitted by the petitioner. Likelihood of dumping injury. 1st Sunset review Findings For the purpose of determining likelihood of dumping and injury, the Authority has analyzed the transaction wise export prices of Chinese producers to countries other than India as submitted by the Domestic Industry from HS International Inc (impexp.com) - Sydney, Australia. 76 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... basis of the information made available by the Domestic Industry from the websites of some producers/ exporters as also other reliable websites of some other producers/ex-porters, it is seen that the Chinese producers/exporters have ample production capacities with them. They are also exporting Ductile Iron Pipes around the world. No other interested, party has either controverted the information or provided any counter-factual information. Moreover, it is noted, that the interested parties have failed to give any additional factual information which they wanted the Authority to consider while determining the issue of excess capacities. Thus, there is ample evidence to conclude that the Chinese producers have substantial production capacities. These capacities are in themselves more than the total production capacity of the domestic industry. The importance of such huge production capacities and exports by the Chinese producers/exporters cannot, be ignored. Present Sunset review Findings In relation to the surplus capacity and the likelihood of its diversion to India in case of revocation of duties, it is noted that mere existence of surplus capacity does not establish t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e (Likely) **** Likely Under Selling Margin% **** Likely Under Cutting Margin% range 0-10 (iv) Further, by taking likely prices to India from the same data, the injury margin is also positive. (v) Based on the analysis of information on production capacity of the subject goods of the Chinese producers/ exporters; non-cooperation of the major Chinese producers/exporters in the investigation and the price attractiveness of the domestic market in India, there is every likelihood that if the duties are revoked, the volume of dumped and injurious exports from China to India is likely to increase and likely to cause injury to the domestic industry. Present Sunset review Findings No such examination Submissions of the appellant Despite submission of information regarding likely price undercutting and likely price underselling, no such procedure is followed in impugned Final Findings 12. It has been further pleaded by the appellant that there was no import of the subject goods to India from China PR in the entire injury investigation period including POI and post POI. In the absence of exports to India from any Chinese exporter, except a minor quantit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the major exporters of the subject product namely, DI Pipes to various countries such as Sri Lanka, Vietnam and Turkey and that these countries have similar developments level and infrastructure requirements. The price at which the goods were exported by manufacturers of China PR to these countries can reasonably be considered for calculating the dumping margin and injury margin taking into account all the export transaction from China to other countries for analysis of the price attractiveness to Indian market. It has further been submitted that it was established by the domestic industry by submitting documentary data to establish that 70% of the quantity exported from China to other countries are at price which would have positive injury margin and around 28% of the quantity sold to other countries are at dumped price. The learned advocate emphasised that this very factor goes beyond doubt that if Anti-Dumping Duty is not continued on imports from China on DI pipes, there is every likelihood that Chinese manufacturer/exporters to India will certainly again resort to dumping of product as they have been doing before levy of Anti-Dumping Duty. 14. The learned advocate has ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ument of availability of huge surplus capacity was rejected by the Designated Authority by only mentioning that the appellant has not proved "beyond doubt" that surplus capacities are going to find their way for export to India. The contention of the learned advocate is that this finding of the Designated Authority is contrary to the basic meaning of "likelihood" as provided in the Act and Rules. It has further been stressed that the slight improvement in the economic parameters of the domestic industries was primarily on account of Anti-Dumping Duty being in place on the import of DI pipes from China PR. It has vehemently been contended by the learned Advocate that injury is going to be faced by the domestic industry in case the Anti-Dumping Duty is removed. The little improvement in economic parameters which took place will immediately disappear and the basic purpose of likelihood assessment will get defeated if such an attitude is sustained and Anti-Dumping Duty levied on such products is allowed to be removed. 16. It has further been submitted that after the disclosure statement was given by the Designated Authority as per the provisions of Rule 16, the objections which were r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ces of the second sunset review investigation when compared to that of the previous sunset review investigation are not entirely similar. There are key difference between the previous sunset review investigation and the impugned sunset review investigation. They have been elaborated as follows: (a) Firstly, at the time of the previous sunset review investigation, anti-dumping duties against the subject imports were in force for five years. At the time of impugned sunset review investigation, anti-dumping duty was in force for more than 10 years. (b) Secondly, in the previous sunset review investigation, the economic parameters of the domestic industry had not improved and were weak. However, in the current sunset review investigation, the economic performance of the domestic industry had improved. (c) In the previous review, the domestic industry, was incurring losses, faced declining cash profits, low return on investment and had high levels of accumulated inventory. However, under the second sunset review there was growing profitability and increasing return on investments. (d) Thus, the appellant is not correct in asserting that the Designated Authority came to different ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... "The anti-dumping duty imposed under this section shall, unless revoked earlier, cease to have effect on the expiry of five years from the date of such imposition : Provided that if the Central Government, in a review, is of the opinion that the cessation of such duty is likely to lead to continuation or recurrence of dumping and injury, it may, from time to time, extend the period of such imposition for a further period of five years and such further period shall commence from the date of order of such extension : Provided further that where a review initiated before the expiry of the aforesaid period of five years has not come to a conclusion before such expiry, the anti-dumping duty may continue to remain in force pending the outcome of such a review for a further period not exceeding one year." 23. Rule 23 of Rules, 1995 is as follows: "(1) Any anti-dumping duty imposed under the provision of Section 9A of the Act, shall remain in force, so long as and to the extent necessary, to counteract dumping, which is causing injury. (1A) The designated authority shall review the need for the continued imposition of any anti-dumping duty, where warranted, on its own initiativ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... remote possibility. The change in circumstances which would create a situation in which the dumping would cause injury must be clearly foreseen and imminent. In making a determination shall consider, inter alia, such factors as: (a) A significant rate of increase of dumped imports into India indicating the likelihood of substantially increased importation; (b) Sufficient freely disposable, or an imminent, substantial increase in, capacity of the exporter indicating the likelihood of substantially increased dumped exports to Indian markets; (c) Whether imports are entering at prices that will have a significant depressing or suppressing effect on domestic prices, and would likely increase demand for further imports; and (d) Inventories of the article being investigated." 25. It had been established by the Designated Authority that there was dumping by the exporter which had resulted in injury to the domestic industry in the past and, therefore, they initiated detailed investigation and concluded in the year 2007 vide their Final Findings notified vide Notification dated 23 August, 2007 that there was dumping of subject goods namely, DI pipes from China PR, and accordingly, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IGNATED AUTHORITY are quasi-judicial, and it is well settled that a quasi-judicial decision, or even an administrative decision which has civil consequences, must be in accordance with the principles of natural justice, and hence reasons have to be disclosed by the Authority in that decision vide S.N. Mukherjee v. Union of India [(1990) 4 SCC 594 : 1990 SCC (Cri) 669 : 1991 SCC (L&S) 242 : (1991) 16 ATC 445]. 39. We do not agree with the Tribunal that the notification of the Central Government under Section 9A is a legislative act. In our opinion, it is clearly quasi-judicial. The proceedings before the Designated Authority are to determine the lis between the domestic industry on the one hand and the importer of foreign goods from the foreign supplier on the other. The determination of the recommendation of the Designated Authority and the government notification on its basis is subject to an appeal before CESTAT. This also makes it clear that the proceedings before the Designated Authority are quasi-judicial." (emphasis supplied) 27. The above view was also taken by the Tribunal in Thai Acrylic Fibre Ltd. vs. Designated Authority reported in [2010 (253) ELT 564 (Tri-Del)]. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore proceeding further it is appropriate to have a glance of the findings which have been given by the Designated Authority for non-continuation of Anti-Dumping Duty on the subject DI Pipes. "67. The examination of post-disclosure comments is as under: i. As regards the submission that the Authority has not carried out sufficient analysis on likelihood or recurrence of dumping and injury, it is noted that the Authority has carried out detailed analysis in this regard at appropriate places of the present findings. ii. The Authority notes that there have been negligible imports of the Product under Consideration during the period of investigation and therefore the price attractiveness analysis for the Indian market based on such miniscule import would be inappropriate. iii. The domestic industry has itself submitted that even in post-POI period there is no likelihood of any import of subject goods having taken place on account of (a) anti-dumping duty being in force and (b) the nature of the product, as no Chinese producer /exporter is understood to have participated in any contract for supply of ductile iron pie in India. Since the import of PUC has almost stopped during t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere reduced drastically and this provided a protective shield to the domestic industry. 32. For the purpose of analysing whether there is any likelihood of continuation of Anti-Dumping Duty, in case the Anti-Dumping Duty is removed from the import of DI pipes from China PR, it has to be noted that China is not only an exporter to India but it has also been exporting the subject goods to various other countries, such as Turkey, Vietnam and Sri Lanka. The appellant domestic industry had provided detailed data of price underselling, dumping margin etc. with regard to imports by China to these countries. It is relevant to examine the analysis carried and provided by the Domestic Industry with regard to price undercutting and dumping margin of exports of DI pipes by China PR to countries namely, Sri Lanka, Turkey and Vietnam. 33. The Domestic Industry has carried out the Price underselling analysis on the basis of the actual exports made by Chinese exporters to Turkey, Vietnam and Sri Lanka. The position which emerges is as follows: Sri Lanka Turkey Vietnam Landed Value RS/MT 44520 40502 42451 NIP Rs/MT 56359 56359 56359 Price underselling Rs/MT 11839 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he capacity of the subject goods in China is 3.36 times of the capacity of the Domestic Industry. Further, Chinese capacity of the subject goods is 5.1 times and 4.36 times of the demand in India and production of the Domestic Industry respectively. 39. Now referring to the provisions of Appendix II, which provides guidelines for making a determination with regard to the likely existence of dumping and material injury threat in likelihood analysis, the Designated Authority was required to consider the following factors: (A) a significant rate of increase of the dumped imports into India indicating the likelihood of substantially increased importation; (B) sufficient free disposable, or an imminent substantial increase in capacity of the exporter indicating the likelihood of substantial increased dumped exports to Indian markets, taking into account the availability of other export markets to absorb any additional exports; (C) Whether the imports were entering at prices that would have a significant depressing or suppressing effect on the domestic prices and would likely increase the demand for further imports and (D) inventory of article being investigated. 40. We underta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ainly not for decorative purpose but for export to other countries. Thus, this very fact satisfies criterion B of the Appendix II and establishes that as soon as the protective guard of Anti-Dumping Duty is removed, there would be a likelihood of dumping of these goods, i.e. DI pipes into the Domestic Indian market. 43. However, the Designated Authority in the Final findings has not considered all facts in a scientific and analytic manner. The finding of the Designated Authority that the cessation of Anti-Dumping Duty is not likely to lead further dumping of the subject product into domestic industry is contrary to the record and cannot be sustained. 44. We also take note that the dumping margin worked out by the Designated Authority has not been disclosed to the appellant Domestic industry by taking shelter of Rule 7 of Anti-Dumping Duty Rules, 1995. 45. It is apparent from a bare reading of Rule 7 that a claim of confidentiality can only be made by the participating companies / persons. It is not for Designated Authority to claim confidentiality under Rule 7. This position has been clarified by the Supreme Court in Reliance Industries. The relevant extract is reproduced below: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... illegal, and not contemplated by Rule 7." 46. Thus, non-disclosure of dumping margin to the appellant by claiming shelter of Rule 7 is not justified and violates the principles of natural justice. 47. In view of above discussion, we are convinced that if Anti-Dumping Duty on the import of DI pipes from China PR is not continued, it may result in likelihood of dumping of subject goods i.e. DI pipes in the Domestic market. 48. In view of above, we hold that the Anti-Dumping Duty on the subject goods namely, D.I. pipes needs to continue after the expiry of the period covered by the first sunset review. We however, remand the matter to the Designated Authority for a limited purpose for re-determining the quantum of Anti-Dumping Duty, if so considered necessary, for the remaining period of five years. This exercise shall be completed within a period of two months from the date of receipt of this order. However, in case the duty is being redetermined, then till the quantum of Anti-dumping Duty is redetermined, the present rate of Anti-dumping Duty shall continue on the subject DI pipes imported from China PR. 49. In view of the above, we set aside the Final Findings of the Designated ..... X X X X Extracts X X X X X X X X Extracts X X X X
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