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TMI Blog2023 (5) TMI 613X X X X Extracts X X X X X X X X Extracts X X X X ..... dings dated 07.09.2021 issued by the designated authority and the consequential customs notification dated 06.12.2021 issued by the Central Government imposing anti-dumping duty on 'certain flat rolled products of aluminium' [the subject goods] from China PR. The alternative relief that has been claimed is to grant exclusion to clad with compatible non-clad aluminium foil from the scope of the product on which anti-dumping duty has been imposed. 2. During the hearing of the appeal, Shri V. Lakshmi Kumaran, learned counsel for the appellant assisted by Shri Devinder Bagia, Shri Ankur Sharma, Shri Jayant Raghu Ram and Shri Ashutosh Arvind Kumar, restricted his submissions to the alternative prayer. 3. It transpires from the records that Hindalco Industries Limited [Hindalco], which has been impleaded as respondent no. 3 in this appeal, had filed an application before the designated authority on behalf of the domestic industry under the provisions of the Customs Tariff Act, 1975 [the Tariff Act] and the Customs Tariff (Identification, Assessment and Collection of Anti-dumping Duty on Dumped Articles and Determination of Injury) Rules, 1995 [the 1995 Rules] for initiation of anti-dum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e suppressing the prices of the domestic industry. The production and the sales of the domestic industry have remained largely stable in the period of investigation while the capacity utilization remains suboptimal. It is noted that the market share of domestic industry has declined by 12% in the period of investigation whereas market share of the imports from the subject country has increased by 35%. The performance of the domestic industry has significantly deteriorated in respect of profits, cash profits and return on capital employed. The domestic industry has suffered financial losses, cash losses and negative return on investments in the period of investigation. c) The material injury suffered by the domestic industry has been caused by the dumped imports. M. RECOMMENDATION 128. The Authority notes that the investigation was initiated and notified to all the interested parties and adequate opportunity was given to the domestic industry, the exporters, the importers and the other interested parties to provide information on the aspects of the dumping, the injury and the causal link. Having initiated and conducted the investigation into dumping, injury and causal link in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... high-strength aluminium alloy core material for use in engine cooling and air conditioner systems in automotive industry such as radiator, condenser, evaporator, intercooler, oil cooler and heater. Clad aluminium foil contains a number of metal constituents that make it adaptable to be used in heat exchangers for specific functions. According to the appellant, condensers, evaporators, radiators, engine cooling modules and HVAC systems are manufactured from clad coils as well as non-clad aluminium foil which are the crucial and principal raw materials used in manufacturing the above products. The present appeal concerns exclusion of clad with compatible non-clad aluminium foil from the scope of the product under consideration in the final findings and the customs notification. 7. The product has a history of anti-dumping investigations. The earlier investigations were on aluminium foil up to 80 micron thickness. The present investigation is on certain flat rolled products of aluminium. Aluminium foil is a subset of certain flat rolled products of aluminium. 8. The first anti-dumping investigation for the period April 2014 to March 2015 was initiated on 15.12.2015 on aluminium foil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... authority correctly did not exclude clad with compatible non-clad aluminium foil from the product scope. However, Shri M.V. Mukunda, learned counsel for the respondent no. 5 and Ms. Rupali Sharma, learned counsel appearing for the respondent no's. 10 and 17 supported case set out by the appellant. 14. It would, therefore, be necessary to appreciate what is clad with compatible non-clad aluminium foil and how it is used by the appellant to manufacture, radiators, evaporator, etc. A cladded coil is composed of three layers of flat rolled products of aluminium that are metallurgically bonded. The top and bottom layers are called Clad 1 and Clad 2 layers, which are aluminium-silicon alloy layers having silicon content in the range of 6.8% to 8.2%. The middle layer is the core layer with very high aluminium content (more than 95%) and other minor elements. These three layers are produced by rolling process and are independently flat rolled products of aluminium. Thereafter, all the three layers i.e. the clad layers and the core layer (which is unclad) are metallurgically bonded to form a cladded coil. All the three layers must be compatible with each other, which is why the descriptio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 23/2017-Customs (ADD) dated 16th May 2017 issued pursuant to the final findings dated 10th March 2017, notification no. F. No. 14/06/2015-DGAD. 14. However, the initiation notice does not mention the above exclusions. We request the Authority to exclude the above products from the product scope. 15. Furthermore, we also request the Authority to not give the exclusion with reference to the Customs Notification and Final Findings. In the Customs Notification referred above, various products have been excluded from the product scope and hence, these do not attract anti-dumping duty in terms of the said Notification. In case the exclusion is defined with reference to the Customs Notification and Final Findings, it may create a confusion that the products which do not attract duty under the said Notification, will be covered in the present investigation. In order to avoid any such ambiguity, we request the Authority to exclude the products by providing their detailed description and not by mere reference to the Customs Notification and Final Findings." 19. Since the customs notification 16.05.2017 already excluded several articles including clad with compatible non-clad aluminium ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not be a ground for exclusion. No metal manufacturers supply products at all times meeting all specifications. There are few rejections and there are processes to resolve and address such rejections." 22. The designated authority, thereafter, decided not to grant exclusion for clad coil and the relevant findings are as follows: "Cladded coil for Tube, Header Plate and End Plate, Unclad Finstock and Unclad Coil 31. The interested parties have argued that the domestic industry cannot provide high quality and technical products needed in the auto industry while the domestic industry has submitted that it can manufacture Unclad Finstock, Unclad Coil and Cladded Coil for Header Plate and End Plate. 32. With respect to the quality of products, the Authority reiterates that quality issues cannot be grounds for exclusion in an antidumping investigation. 33. Therefore, the Authority has determined not to exclude such a product from the scope of the PUC." 23. The contention of the learned counsel for the appellant is that the designated authority could not have rejected the product exclusion merely because the domestic industry can manufacture clad with compatible non-clad aluminiu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... everal places, extracts of which are given below: ii. Exclusion accepted by the domestic industry: c. Clad with Non Clad Aluminium - 'Aluminium - Manganese - Silicon based and/or clad Aluminium - Manganese - Silicon based alloys, whether clad or unclad : with post brazing yield strength greater than 35 MPA, falling under tariff heading 7607 for use in heat exchangers including radiators, charge air coolers, condensers, oil coolers, heater cores, evaporators, heat ventilation and air conditioning (HVAC) systems and parts thereof. d. Some interested parties require clad with compatible non clad aluminium foil which is used in heat exchangers used specifically only in radiators in vehicles and engines in cooling systems. This is excluded by petitioner. 6. Further, Para 79 clearly mention that the following is excluded from the scope of PUC. Aluminium - Manganese - Silicon based and/or clad Aluminium - Manganese - Silicon based alloys, whether clad or unclad: with post brazing yield strength greater than 35 MPA, falling under tariff heading 7607 for use in heat exchangers including radiators, charge air coolers, condensers, oil coolers, heater cores, evaporators, heat ven ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of defining and describing the PUC as mentioned above is carried out during the fresh/original investigation. It is the responsibility of the Investigation team (with the approval of the DG) to clearly and accurately define and describe the scope of the PUC concerned during the fresh/original investigation at the stage of consideration of initiation." 27. Thus, an item which has not been sold by the domestic industry in commercial quantities should not be included in the scope of the product under consideration by the domestic industry. 28. What, however, transpires is that the domestic industry could not demonstrate that it had made any commercial supplies of clad with compatible non-clad aluminium foil during the period of investigation and that clad with compatible non-clad aluminium foil cannot be considered as flat rolled products of aluminium since the cladded coil is made of several surface layers of flat rolled products of aluminium that are metallurgically bonded to high strength aluminium alloy core. 29. In view of the aforesaid, it is not possible to hold that clad with compatible non-clad aluminium foil should not be excluded from the scope of product under considera ..... X X X X Extracts X X X X X X X X Extracts X X X X
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