9911796707
TMI Blog2022 (3) TMI 167X X X X Extracts X X X X X X X X Extracts X X X X ..... n the basis of the final findings dated 30.06.2016 of the designated authority, has led to the filing of this appeal by All India Laminated Fabric Manufacturers Association, New Delhi [the appellant ] under section 9C of the Customs Tariff Act, 1975 [the Tariff Act] The relief claimed in this appeal is that the aforesaid final findings dated 28.10.2021 notified by the designated authority may be modified and it be held that there is a likelihood of dumping and injury so that the anti-dumping duty on the subject goods from the subject country can be continued for a further period of five years. 2. Anti-dumping investigation concerning the imports of PVC Flex Film [the subject goods] from the China PR [the subject country] was earlier initiated on 01.02.2010 by the designated authority on an application filed on behalf of the domestic industry. The designated authority ultimately recommended imposition of definite anti-dumping duties on imports of the subject goods from the subject country by a notification dated 29.07.2011 and thereafter, the Central Government issued the consequential notification dated 25.08.2011 imposing anti-dumping duty for a period of five years. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essment and Collection of Anti-dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995 [the 1995 Rules] and informed all the interested parties of the essential facts under consideration in order to enable the interested parties to offer their comments on the facts so gathered. It was also made clear that the designated authority will make the final determination on various aspects of the investigation on the basis of the comments received from the interested parties to the disclosure statement. The relevant portions of the disclosure statement under various heads are as follows:- Determination of Dumping Margin: "50. Considering the normal value and export price for the subject goods, the dumping margin for the subject goods from the subject country is proposed to be determined as follows: SN Name of Producer Normal Value Export Price Dumping Margin Dumping Margin Dumping Margin (USD/MT) (USD/MT) (USD/MT) (%) (Range) China PR 1 Heytex Technical Textile (Zhangjaingang) Company Limited *** *** *** *** 5-15 2 Non- cooperative/ residual exporters *** *** *** *** 20-30 Examination of Injury and Causal Link 53. The A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iod. ii. Production and sales increased in 2018-19, declined in 2019-20 and thereafter, steeply in the period of investigation. The applicants have claimed that such decline can be attributed to the effects of Covid-19 pandemic. iii. The capacity utilization has declined over the injury period. 67. It is seen that the market share of the domestic industry has reduced throughout the injury period. However, the market share of other Indian producers as a whole has increased, while the market share of subject imports has declined. 71. The Authority notes that the profits per unit, cash profits and return on capital employed declined throughout the injury period. However, the volume of imports is too low to compel the domestic industry to sell at lower profits. The domestic industry has conceded that this is a result of Covid-19 73. It is seen that number of employees of the domestic industry increased till 2018-19 but declined thereafter. Further, the productivity of the domestic industry has declined over the injury period. The wages increased over the injury period. 75. It is noted that both the volume and profitability parameters of the domestic industry has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uthority in terms of Annexure III to the Rules has been compared with the landed value of the exports from the subject country for determination of injury margin during the period of investigation and the injury margin so worked out is as under: S.N. Name of Producers Non- injurious price Landed Price Injury margin Injury margin Injury margin (Rs/MT) (Rs/MT) (Rs/MT) (%) (Range) China PR 1. Heytex Technical Textile (Zhangjiagang) Company Limited *** *** *** *** Negative 2. Non- Cooperative/ residual exporters *** *** *** *** Negative Non-Attribution Analysis 94. As per the Rules, the Authority, inter alia, is required to examine any known factors other than the dumped imports which at the same time are injuring the domestic industry, so that the injury caused by these other factors may not be attributed to the dumped imports. Factors which may be relevant in this respect include, inter alia, the volume and prices of imports not sold at dumped prices, contraction in demand or changes in the patterns of consumption, trade restrictive practices of and competition between the foreign and domestic producers, developments in technology and the exp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the provisions of para 7 allow determination of normal value based on exports from a market economy third country to other countries, including India. In the present case, it was not possible to determine the normal value based on exports to all countries, as the product does not have a dedicated code. The Authority, in the past also has determined normal value based on the price of exports from a market economy third country to India. This approach has been affirmed by the Tribunal, in the case of Kuitun Jinjiang Chemical Industry Co. Ltd. vs. Designated Authority as well. 102. The interested parties have contended that the injury caused due to other factors such as Covid-19 pandemic, inter-se competition, restrictions on sales of plastic and increased fixed cost should be segregated. In this regard, the Authority notes that the domestic industry itself has admitted that the injury has not been caused due to subject imports and therefore there is no need of segregating injury caused by other factors. 103. With regard to the consideration of post-POI data, the Authority notes that none of the interested parties have brought forth any information to suggest that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ification dated 08.08.2016, as further extended by notification dated 30.06.2021 upto 31.01.2022, and the recommendation is as follows: RECOMMENDATION "105. In view of above, the Authority considers it appropriate to recommend withdrawal of antidumping duty on import of subject goods from the subject country recommended vide Notification No.15/13/2015-DGAD dated 30th June, 2016 and enforced vide Customs Notification No. 42/2016- Customs (ADD) dated 8th August 2016 and further extended vide Customs notification No. 38/2021- Customs (ADD) dated 30th June 2021 till 31st January 2022." 8. It needs to be noted that as the anti-dumping duty continued by the first sunset review notification dated 08.08.2016 was to end on 07.08.2021 but as the designated authority had initiated the second sunset review investigation by notification dated 24.03.2021 and the second sunset review had not concluded, the Central Government, by notification dated 30.06.2021, extended the anti-dumping duty upto an inclusive of 31.01.2022 unless it was revoked, superseded or amended earlier. After the issuance of the final findings dated 28.10.2021 issued by the designated authority, the Central Governme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... half of respondent no. 8. Respondent no's 9, 10, 11 and 12 are the domestic producers supporting the appellant. 13. Ms. Reena Khair assisted by Shri Rajesh Sharma and Ms. Shreya Dahiya, learned counsel appearing for the appellant made the following submissions: (i) In a sunset review, if the Central Government is of the opinion that the cessation of duty is likely to lead to continuation or recurrence of dumping and injury, it may extend the duty for a further period of 5 years. The parameters relevant for a likelihood analysis have been examined by the Authority in paragraphs 80 to 92. Despite a positive finding on all the parameters related to likelihood of dumping and injury, the authority failed to recommend continuation of the anti-dumping duty; (ii) The designated authority failed to appreciate that low volume of imports is not a relevant consideration in a sunset review. This is evident from the fact that rule 14 is conspicuously absent from rule 23(3) of the 1995 Rules. Thus, the fact that there were no imports or negligible imports was not a bar for continuation of duties in a sunset review as the test to be applied is the likelihood of continuation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom whom the information was acquired; (viii) The designated authority did not at any stage prior to the final findings, raise any objection or query in this regard and accordingly, the appellant had no occasion to clarify this aspect. The appellant was under a bonafide belief that the designated authority was agreeable to proceed on the basis of the report. Had the authority called upon the appellant to disclose the name of the agency, the appellant would have done so on a confidential basis; (ix) The provisions of paragraph 6 of Annex II to the Anti-Dumping Agreement further require the investigating authority to inform the interested party where the information or evidence provided is not accepted and provide an opportunity to the interested party to provide further explanations; (x) Even if the report is not taken into consideration for the sake of argument, the remaining evidence points clearly to the likelihood of recurrence of dumping and injury. The Authority has not rendered any finding on the adequacy of the remaining material on record for coming to a conclusion on the issue; and (xi) Finding on lack of independent corroborative evidence i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e years unless there exist circumstances that warrant further protection to the domestic industry; (vi) The domestic industry is not suffering material injury and there is no likelihood of recurrence or continuation of material injury to the domestic industry upon cessation of anti-dumping duty; (vii) The domestic industry suffered decline in cash profits during the period of investigation due to the COVID pandemic. However, if the effect of COVID-19 is segregated and the adjusted period of investigation data is analyzed, the domestic industry's profitability parameters show a sharp improvement; (viii) The domestic industry is oriented towards exports and has been growing its business in the export markets quite profitably. Pioneer, in particular, is extremely focussed on Brazilian markets; (ix) The designated authority could not have arrived at conclusions in the disclosure statement. The disclosure statement is only intended to record essential facts; (x) The designated authority was correct in not relying on an unauthored market research report; (xi) The appellant did not raise any plea before this Tribunal in the appeal memorandum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. Union of India [2019 (367) E.L.T. 53 (Del.)]; (b) Alembic Ltd. vs. Union of India [2013 (291) E.L.T. 327 (Guj.)]; and (c) Sales Tax Officer vs. Shree Durga Oil Mills [1998 (97) E.L.T. 202 (S.C.)]; 17. The submissions advanced on behalf of the parties have been considered. 18. Section 9A of the Tariff Act deals with anti-dumping duty on dumped articles. It provides that if any article is exported by an exporter or producer from any country to India at less than its normal value, then, upon the importation of such article into India, the Central Government may, by notification in the Official Gazette, impose an anti-dumping duty not exceeding the margin of dumping in relation to such article. Margin of dumping has been defined to mean the difference between the export price and the normal value. The export price means the price of the article exported from the exporting country. Normal value has been defined to mean the comparable prices for the like article when destined for consumption in the exporting country. 19. Sub-section (5) of section 9A of the Tariff Act provides that anti- dumping duty imposed shall, unless revoked earlier, cease to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ), rule 11 of the 1995 Rules would be applicable to 'sunset reviews'. Rule 11 deals with determination of injury and sub-rule (2) of Rule 11 of the 1995 Rules is reproduced below: "Rule 11: (i) xxxxxxx (ii) The designated authority shall determine the injury to domestic industry, threat of injury to domestic industry, material retardation to establishment of domestic industry and a causal link between dumped imports and injury, taking into account all relevant facts, including the volume of dumped imports, their effect on price in the domestic market for like articles and the consequent effect of such imports on domestic producers of such articles and in accordance with the principles set out in Annexure II to these rules." 22. Rule 11(2) refers to the principles set out in Annexure II to the 1995 Rules which deals with the principles for determination of injury and the relevant portion of the said Annexure is reproduced below: Principles for determination of injury "The designated authority while determining the injury or threat of material injury to domestic industry or material retardation of the establishment of such an industry, hereinafter referre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 24. At this stage, it would also be pertinent to refer to the 'Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 [1994 Agreement]'. Article 1 deals with principles, while Article 11 deals with duration and review of anti-dumping duties and price undertakings. These Articles are reproduced below: "Article 1 Principles An anti-dumping measure shall be applied only under the circumstances provided for in Article VI of GATT 1994 and pursuant to investigations initiated and conducted in accordance with the provisions of this Agreement. The following provisions govern the application of Article VI of GATT 1994 in so far as action is taken under anti-dumping legislation or regulations. Article 11 Duration and Review of Anti-Dumping Duties and Price Undertakings 11.1 An anti-dumping duty shall remain in force only as long as and to the extent necessary to counteract dumping which is causing injury. 11.2 The authorities shall review the need for the continued imposition of the duty, where warranted, on their own initiative or, provided that a reasonable period of time has elapsed since the imposition of the definitive ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 in which present levels of dumping is obviously not so relevant as is the likelihood of continuance or recurrence of dumping. Moreover, during the investigation period, the anti-dumping duty would be in force and hence, the current level of dump ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty or to ascertain that if such duty is revoked there is imminent danger of the material injury to the domestic industry. The inquiry is limited to the change in the various parameters like the normal value; export price, dumping margin, fixation of non-injurious price and injury to domestic industry. The sunset review is undertaken for the purpose of not for imposition of anti-dumping duty but to see whether the revocation of such anti-dumping duty, dumping would increase and whether the domestic industry will suffer." (emphasis supplied) 29. In Borax Morarji Limited vs. Designated Authority [2007 (215) E.L.T. 33 (Tri. - Del.), CESTAT], the Tribunal noted that: "10. With respect to the injury determination, if the anti- dumping duty had the desired effect, the condition of the domestic industry would be expected to have improved during the period the antidumping 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 li ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... riod not exceeding five years from the date of its publication, but an exception has been culled out namely that the designated authority can extend the period provided the designated authority comes to a conclusion upon a duly substantiated request by the domestic industry that the expiry of the anti-dumping duty would likely lead to continuation or recurrence of dumping and injury to the domestic industry. It also provides that rule 11 of the 1995 Rules would also be applicable to sunset reviews and rule 11 of the 1995 Rules requires the designated authority to determine threat of injury to the domestic industry taking into account all relevant facts in accordance with the principles set out in Annexure II of the Rules. Clause (vii) of Annexure II provides that a determination of a threat of material injury shall be based on facts and not merely on allegation, conjecture or remote possibility and that the change in circumstances which would create a situation in which the dumping would cause injury must be clearly foreseen and imminent. This has also been provided in the 1994 Agreement. It, therefore, follows that under the aforesaid statutory scheme, the designated authority is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch and Investment Feasibility Assessment on China Polyvinyl Chloride Flexible Film/Sheet Market 2021-2025'. However, the name of the author/agency which has prepared this report has not been mentioned in the report. The data source for the report has been indicated as 'the project team statistical collation' but there is no reference to original source of data.The reliability and authenticity of this report therefore is suspect and thus no conclusion can be arrived at regarding likelihood analysis. iii. Even though there is continued dumping of the subject goods from China PR, sufficient independent evidence corroborating the likelihood of continuation/recurrence of injury to the domestic industry in the event of revocation of duty is not available. (emphasis supplied) 35. As noticed above, the designated authority concluded that though the domestic industry suffered a decline in performance but that was due to the Covid-19 pandemic effect. In regard to the likelihood of dumping and recurrence of injury, the designated authority concluded that the volume of imports of subject goods from the subject country declined sufficiently both in absolute and relative terms an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated 28.10.2011 in European Union Anti- Dumping Measures on Certain Footwear from China[WT/DS405/R ] and WTO Panel Report dated 24.07.2020 in European Union Cost Adjustment Mythology and Certain Anti-Dumping Measures [WT/DS494/R ]. 38. Learned counsel appearing for the foreign exporter (respondent no. 8) however, submitted that the appellant did not raise any plea before this Tribunal in the Appeal Memorandum that it was barred from sharing the name of author or the agency that prepared the market intelligence report due to the existence of a new Data Secrecy Law that was enacted in September 2021 by the Government of China PR and infact the factum of existence of such a law is a new fact brought before this Tribunal for the first time at the time of hearing. Learned counsel also submitted that rule 7 of the CEGAT Countervailing Duty and Anti-Dumping Duty (Procedure) Rules, 1996 applies rule 10 of the Customs Excise and Gold (Control) Appellate Tribunal (Procedure) Rules, 1982 to anti-dumping appeals and rule 10 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. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssue was examined by the Tribunal in Dye Stuff Manufacturers Association. In this case the domestic industry had relied on a trade journal 'Chemical Week' to claim that the 'normal value' of Aniline in Europe was in the range of USD 880-925/MT and to allege that the exports of the goods from European Unit to India were made at a prices far below the normal value. The Tribunal held that when the source material was not disclosed nor the authenticity thereof established, it was not proper for the designated authority to have placed reliance upon the report. What was contained in the journal was only an article on Aniline industry and the same could not have provided 'judicially noticeable facts'. Infact, the contents of the article were nothing more than statements in the press. The Tribunal, therefore, held that the designated authority wrongly relied upon the report to determine the normal value. 42. The department filed an appeal before the Supreme Court in Secretary (Revenue) Government of India & Anr. vs. Dyestuffs Manufacturers Association of India & Ors. [Civil Appeal Nos. 1788-1789 of 2004 decided on 26.03.2015]. The Supreme Court, after reproducing paragraph 7 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... happen if the duties were removed. While the fact that imports declined significantly and domestic production increased significantly after the imposition of the anti-dumping duties suggests that it is possible that the opposite could happen upon removal of the duties, the NTC did not explain why it considered these developments to be likely to occur (and not just possible). Given the absence of any further explanation in this regard, we are of the view that the NTC's finding that "termination of anti-dumping duties will likely result in an increase in imports of the product under review which will affect adversely ... the productions of the domestic like product was essentially conclusory in nature. We therefore find that the NTC failed to provide a reasoned and adequate explanation to support its finding that imports of BOPP film would likely increase in the event anti-dumping duties on these imports were to be removed." (emphasis supplied) 45. It would also be useful to examine the Report of the Appellate Body in "United States-Anti-Dumping Measures on Oil Country Tubular Goods (OCTG) From Mexico" [WT/DS282/AB/R decided on 2 November 2005]. The Appellate Body examined th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated authority from simply assuming that likelihood exists. The observations are as follows: "113. The Article 11.3 states that notwithstanding the provisions of Articles 11.1 and 11.2, anti-dumping duty shall be terminate not later than five years from its impositions "unless" the authorities make an affirmative likelihood determination in a sunset review. This confirms that the mandatory rule in Article 11.3 applies in addition to, and irrespective of, the obligations set out in the first two paragraphs of article 11. This also suggests to us that authorities must conduct a rigorous examination in a sunset review before the exception (namely, the continuation of the duty) can apply. In addition, our view of the exacting nature of the obligations imposed on authorities under article 11.3 is supported by a consideration of the implications of initiating a sunset review. The last sentence of Article 11.3 allows the relevant duty to continue while the review is underway, and Article 11.4 contemplates that the review process may take up to one year. These provisions create an additional exception to the requirement that anti-dumping duties will be terminated after five years, permit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng. 49. It is not possible to accept this submission of the learned counsel for the appellant. What has been recorded in paragraphs 80 to 92 of the final findings are the submissions advanced on behalf of the appellant and this is clear from a perusal of paragraph 81 wherein it has been stated that 'the applicant have claimed that the following factors demonstrate that the cessation of duty is likely to lead to recurrence of dumping and injury'. Thus, what has been recorded in paragraphs 80 to 92 are not the findings but the contention of the appellant relating to various factors like decline in imports due to present duties, significantly low-priced imports, continued dumping and injury margin, third country dumping, significant excess capacities for the production of the subject goods, high degree of export orientation of exporters in the subject country, decline in demand from downstream industries, significant inventories held by the producers in the subject country are decline in exports from the subject country due to Covid-19. The appellant is, therefore, not justified in asserting that what has been recorded in the aforesaid paragraphs is a finding of the designated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ew to substantiate that cessation of anti-dumping duty would lead to continuance or recurrence of anti-dumping. The appellant failed to discharge this burden. 53. Learned counsel for the appellant also questioned the absence of 'Exporters Questionnaire-Part II- Further Information Concerning the Sunset Review' response by respondent no. 8 before the designated authority in the 'sunset review' investigation being conducted. 54. Learned counsel appearing for the respondent no. 8 however submitted and it was not necessary for the said respondent to file a response to the aforesaid questionnaire since it had not exported the subject goods to India during the period of investigation or during the injury period and that it was allowed to participate by the designated authority when it submitted legal submissions for the purpose of opposing continuance of anti-dumping duty. Learned counsel for respondent no. 8 also submitted that it was not required to file the Supplementary or Additional Questionnaire (Part-II) since the Main Questionnaire (Part-I) was not applicable to the respondent. 55. There is considerable force in the submissions advanced by learned counsel app ..... X X X X Extracts X X X X X X X X Extracts X X X X
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