TMI Blog2022 (3) TMI 167X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. The designated authority is mandated to undertake a rigorous examination of all the following three factors before deciding to continue the anti-dumping duty: (i) There is a duly substantiated request made by the domestic industry which implies that the domestic industry has to provide cogent evidence to substantiate its claim; (ii) There is a likelihood of continuation or recurrence of dumping in case duties are revoked; and (iii) There is likelihood of continuation or recurrence of injury to the domestic industry in case duties are revoked. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntiate that cessation of anti-dumping duty would lead to continuance or recurrence of anti-dumping. The appellant failed to discharge this burden. A perusal for the final findings of the designated authority reveal that the trend of import volumes and landed (import) prices, and its effect on the domestic industry together with the increase in capacity, production, sales of the domestic industry, its market share, along with negative price undercutting and negative injury margins led the designated authority to conclude that there was no likelihood of injury. It is for this reason that the designated authority recommended discontinuation of anti-dumping duties. The final findings of the designated authority, therefore, for all the reasons stated above, do not call for any interference in this appeal - Appeal disissed. - ANTI DUMPING APPEAL NO. 52173 OF 2021 - FINAL ORDER NO. 50171/2022 - Dated:- 28-2-2022 - MR. DILIP GUPTA, PRESIDENT, MS. SULEKHA BEEVI C.S., MEMBER (JUDICIAL) AND MR. P.V. SUBBA RAO, MEMBER (TECHNICAL) Ms. Reena Khair, Mr. Rajesh Sharma, Ms. Shreya Dahiya, Advocates for the appellant Mr. Ameet Singh, Ms. Albina Wali, Advocates for the Designated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and SRF Limited [ the domestic producers ], who have been impleaded as respondent no s 3, 4 and 5 in this appeal, for initiation of a second sunset review investigation concerning imports of the subject goods originating in or exported from the subject country. PVC Flex Film is also known as PVC flex banners and PVC flex sheets for advertising signage, billboards and PVC flex tarpaulins. The products, namely, (i) PVC Films; (ii) PVC Rigid; (iii) Films Cotton/Canvas Tarpaulins; (iv) Self-adhesive Vinyl; (v) One way vision film/perforated window film; (vi) Coloured vinyl and (vii) Mesh Banner/Fabric were excluded from the scope of the product under consideration. 3. The designated authority, by a notification dated 24.03.2021, initiated the second sunset investigation to review the need for continued imposition of duties and to examine whether the expiry of such duty was likely to lead to continuation or recurrence of dumping and injury to the domestic industry. The period of investigation was notified to be from 01.10.2019 to 30.09.2020 and the injury investigation period was to cover the periods April 2017 to March 2018, April 2018 to March 2019, April 2019 to March 2020 as al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Authority hereunder addresses the various submissions made by the interested parties. Assessment of demand/apparent consumption 55. It is seen that the demand for the subject goods has increased till 2019-20 and declined thereafter in the period of investigation. Volume effect of the dumped imports 56. With regard to the volume of the dumped imports, the Authority is required to consider whether there has been a significant increase in dumped imports, either in absolute terms or relative to production or consumption in India. For the purpose of injury analysis, the Authority has relied on the transaction wise import data procured from DGCI S. The import volumes of the subject goods from the subject country and share of the dumped import during the injury investigation period are as follows: Particulars Unit 2017-18 2018-19 2019-20 POI Subject imports MT 2,329 836 341 202 Other imports MT 7,846 5,758 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 witnessed negative growth in the period of investigation. The applicants have claimed that such decline in the period of investigation is due to the impact of Covid-19 pandemic. 77. The Authority notes that the volume of imports during the period of investigation was insignificant, and therefore, did not create a strain on the prices of the domestic industry. Selling price of the domestic industry has not been affected by the subject imports. 78. It is noted that the subject goods are being dumped into India despite anti-dumping duties and the dumping margin is positive and significant. 79. From the above, it is evident that while the domestic industry has suffere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... *** *** 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 export performance and the productivity of the domestic industry. It has been examined below whether factors other than dumped imports could have contributed to the injury to the domestic industry. 5. After the submissions of the comments, the designated authority issued the final findings on 28.10.2021 and the examination by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... termined 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 the position during post-POI is different from that prevailing during the period of investigation. Therefore, the Authority did not find any need for consideration of post-POI data. 6. The conclusion arrived at by the designated authority in the aforesaid final findings is that there was no justification for continuance of anti-dumping duty and it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Government issued a notification dated 24.01.2022, withdrawing the duty imposed by the notification dated 08.08.2016. 9. The present appeal was filed before the Tribunal on 23.12.2021 for modification of the final findings dated 28.10.2021 of the designated authority in such a manner that the anti-dumping duty could continue for a further period of five years. 10 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 or recurrence of dumping and injury; (iii) The settled jurisprudence is that a reduction or elimination of import after the imposition of anti- dumping duty is indicative of the fact that the exporters are unable to sell in India with the duties in force. It further indicates, that on the expiry of the duty, that there is a strong likelihood of an increase in the volume of import ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt 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 is incorrect. 14. Shri Devinder Bagia assisted by Shri Atul Gupta, Shri Ankur Sharma, Shri Jayant Raghu Ram, Ms. Shubhi Khare and Shri Neeraj Chhabra, learned counsel appearing for respondent no. 8 supported the impugned order and made the following submissions: (i) The purpose of anti-dumping duty has been served and the appellant has not been able to make out any case for further continuation of the anti-dumpi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ffect 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 that it was barred from sharing the market intelligence report due to the existence of the new Data Secrecy Law and, therefore, it cannot be permitted to raise this plea at the time of hearing of the appeal since permission to urge this ground has not been sought from the Tribunal; and (xii) The designated authority rightly disclosed essential facts under consideration in the disclosure statement as per rule 16 of the 1995 rules. 15. Shri Ameet Singh lea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 have effect on the expiry of five years from the date of such imposition. The first proviso stipulates that if the Central Government, in a review, is of the opinion that the cessation of such duty is likely to lead to continuance 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. 20. Rule 23 of the 1995 Rules deals with review and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ped 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 referred to as injury and causal link between dumped imports and such injury, shall inter alia, take following principles under consideration (i) xxxxxxxxx (ii) While examining the volume of dumped imports, the said authority shall consider whether there has been a significant increase in the dumped imports, either in absolute terms or relative to production or consumption in India. With regard to the affect of the dumped imports on prices as referred to in sub-rule (2) of rule 18 the designated authority ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 anti-dumping duty, upon request by any interested party which submits positive information substantiating the need for a review. Interested parties shall have the right to request the authorities to examine whether the continued imposition of the duty is necessary to offset dumping, whether the injury would be likely to continue or recur if the duty were removed or varied, or both. If, as a result of the review under this paragraph, the authorities determine that the anti-dumping duty is no longer warranted, it shall be terminated immediately. 11.3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sment 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 dumping may be non-existent or minimal. The exporters under investigation may also sell at a non-dumped price during this period knowing fully well that a sunset review would be in progress. Hence, the criteria under Section 9A(1) that the anti-dumping duty should not exceed the dumping margin would have no practical application for continuance of the duty under Section 9A(5). There is also no such warrant in law under the said Section 9A(5) to do so. (emphasis supplied) 27. In Rishiroop Polymers (P) Ltd. vs. Designated Authority Additional Secretar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 likely to be materially injured again, if duties are lifted. 30. The Tribunal in M/s SI Group India Private Limited vs.Designated Authority and The Union of India [ Anti-Dumping Appeal No. 50430 of 2019 decided on 28.11.2019 ] also observed as follows: 12. Thus, the object and purpose of the sunset review as explained in the aforesaid judgments, precisely is to examine as to whether on removal of anti dumping duty, there is likelihood of recurrence of dumping and injury to the domestic industry. It has also been held that the degree and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esignated 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 mandated to undertake a rigorous examination of all the following three factors before deciding to continue the anti-dumping duty: (i) There is a duly substantiated request made by the domestic industry which implies that the domestic industry has to provide cogent evidence to substantiate its claim; (ii) There is a likelihood of continuation or recurrence of dumping in case duties are revoked; and (iii) There is likelihood of continuation or recurrence of injury to the domestic industry in case duties are revoked. 32. In t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 and from the report relied upon by the appellant to establish the likelihood of continuance or recurrence of injury no conclusion could be arrived at regarding likelihood analysis since the name of the author or the agency which prepared the report was not mentioned in the report nor the data source for the report was provided. The designated authority also concluded that though there was continued dumping of the subject goods from the subject country but the appellant had not provided sufficient independent evidence corroborating the likelihood of continuation or recurrence of injur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 was, therefore, submitted that since the appellant had 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, the appellant cannot be permitted to raise this plea. On merits, learned counsel submitted the designated authority was justified in not placing reliance on the report relied upon by the domestic industry to establish the likelihood of continuance or recurrence of dumping and injury for the reason that the report itself was suspect because neither the name of the author or the agency which had prepared the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 decision of the Tribunal in its entirety, which paragraph relates to the rejection of the report contained in the Trade Journal relied upon by the domestic industry, dismissed the appeal as it was satisfied with the analysis undertaken by the Tribunal. 43. It also needs to be noted that rule 7 of the 1995 Rules requires any interested party to provide non confidential summary of the confidential information to other interested parties or provide reason why such a summary cannot be provided. The appellant did not provide the non confidential summary of the report to other interested parties ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h 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 the provisions of Article 11.3 of the Agreement, which provision is also contained in rule 23(1B) of the 1995 Rules, and emphasised that it is necessary for an affirmative determination that there is proof of likelihood of continuation of recurrence of dumping and injury, when the duty expires. Though the nature of evidence required for such proof may vary with the facts and circumstances of each case, but the determination must rest on sufficient factual basis that allows the investigating authority to draw reasons and adequate conclusions . The relevant portion of the report is reproduced ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amination 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, permitting a Member to maintain the duty for the period during which the review is ongoing, regardless of the outcome of that review. This, too, suggests that the drafters of the Anti-Dumping Agreement saw the sunset review as a rigorous process that can take up to one year, involving a number of procedural steps, and requiring an appropriate degree of diligence on the part of the national authorities. 114 The Panel described Article 11.3 as imposing the following obligations on investigating authorities in a sunset review: The text of Article 11.3 contains an obligation to determine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cline 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 authority as the designated authority has merely recorded the submissions of the appellant. The findings on the aforesaid issues have been given by the designated authority in paragraph 94 of the final findings, which paragraph has been reproduced above. It needs to be noted that in terms of rule 16 of the 1995 Rules, the designated authority was only required to inform all interested parties of the essential facts under considerations which would form the basis of its decision and these facts were disclosed by the designated authority in the disclosure statement. 50. It is also not possibl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce 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 appearing for respondent no. 8. Respondent no. 8 had not exported the subject goods to India during the period of investigation or during the injury period. The final findings of the designated authority do not show that any objection was raised either by the designated authority or by the interested parties to the non filling of the Exporter Questionnaire - Part-II by respondent no. 8 and in fact respondent no. 8 had participated by filing the legal submissions for the purpose of opposing continuance of anti-dumping duty. This apart, if respondent no. 8 was not required to file the Main Questionnaire (Part-I), i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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