TMI Blog2005 (12) TMI 120X X X X Extracts X X X X X X X X Extracts X X X X ..... interested parties were requested to make their views known in writing. A copy of the preliminary findings was also sent to known exporters, importers and embassies of subject countries in India requesting them to advice the producers and exporters in their countries to respond to the Designated Authority (hereinafter referred to as 'DA') to furnish their views. Opportunity of public hearing to interested parties was given on 18-2-2003. Thereafter all parties were requested to file written submissions of their views. The authority made available the public file to all interested parties containing non-confidential version of evidence submitted by various interested parties for inspection, on request. In accordance with Rule 16 of the Customs Tariff (Identification, Assessment and Collection of Anti-dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995, (hereinafter referred to as Anti-dumping Rules), the essential facts/basis considered were disclosed/made known to the interested parties on 14-7-2003. The investigation covered the period from 1st April, 2001 to 31st March, 2002. On the basis of the preliminary findings of the Designated Authority dated 21-9- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aking freight of each transaction but instead of this taken weighted average of freight. There were 20,000 transactions during the period of investigation for sale in domestic market but transaction-wise freight has not been shown separately by the Hanwah Chemical Corporation. The Designated Authority on the basis of total freight for the entire period determined per unit freight. The Designated Authority under letter dated 14-8-2002 had informed M/s. Hanwah Chemical Corporation that they have claimed freight *** per MT on domestic sale, but there is no evidence of this under sample invoices provided by them. There is no information on freight paid for domestic transactions as indicated in the transaction-wise domestic sale information. M/s. Hanwah Chemical Corporation in response to the letter furnished month wise freight incurred on domestic sales paid during period of investigation. The total inland freight includes sea freight as well as tank lorry freight. By taking the average inland freight without taking transaction-wise freight, the normal value determined by the Designated Authority may not be correct. Since the transaction-wise freight information was not given by M/s. H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. Tricon suffered by them during previous transactions between M/s. Hanwah Chemical Corporation and M/s. Tricon. In arriving at ex-factory export price, the Selling and General Administrative (SGA) expenses of M/s. Hanwah Corporation were not considered. Addition of $ 5 per DMT and $ 4.57 per DMT has increased the export which is contrary to Rules. No figures were given in the non-confidential version of determination of export price. Indexation should have been done for export price and normal price. Compensatory arrangement between Hanwah Chemical Corporation, Hanwah Corporation and M/s. Tricon was not examined. 4.1 It is further argued that, since the normal price was reduced and export price was enhanced by adopting incorrect method, the dumping margin was wrongly calculated without full response from Tricon and Hanwah Corporation. The Designated Authority could not have worked out export price at ex-factory level as deduction allowed for arriving at ex-factory price without checking the records of Tricon and M/s. Hanwah Corporation as both of these concerns had not given full response to questionnaire. For Hanwah Corporation and Hanwah Chemical Corporation a combined respon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h Corporation. In view of this position, the question of taking into consideration SGA of middlemen i.e. Hanwah Corporation has nothing to do with ex-factory export price. 5.1It was argued on behalf of Hanwah Chemical Corporation and Hanwah Corporation that standard of confidentiality in obtaining information from the domestic industry and co-operating exporters was not equally applied. The domestic industry was required to given only two years information of imported products but 10 years information was give without disclosing the source of information. Therefore, figures are not reliable. For the year 2001-2002, information was given only up to December, 2001 and the same was annualized. Thus, for 2001-2002, full information was not made available. The first export from Hanwah Corporation was on 30-12-2001 and this was not added in the figures up to December and in the final findings, the D.A. has held that Hanwah Chemical Corporation was only exporter. The examples were cited that before initiation of investigation, domestic industry did not give any relevant information in Form IV, V VI, still D.A. initiated investigation. Co-operating exporter i.e. Hanwah Chemical Corpora ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a. The apportionment of cost of caustic soda and chlorine has to be done at the point of separation of these products on the basis of volume of production. It was also pleaded that verification reports in respect of December transaction were not furnished to them. Initiation of investigation is faulty on the following grounds : (i) Non-confidential version of petition made available to interested parties is without any table under proforma IVA. (ii) Performa IVB is also incomplete as it does not show the price of indigenous industries. (iii) Entire performa VI relating to costing information was not given. It was also not kept in public file. (iv) Different standard was applied by the D.A. for domestic industry and exporters as proforma of export quarantee was supplied in the indexed form to the domestic industry. (v) D.A. did not accept books of account for costing of caustic soda of Hanwah Chemical Corporation but domestic industry was allowed debiting cost of chlorine. (vi) Appellant M/s. AMAI are not manufacturers but they are only supported by domestic manufacturers. Out of 39 manufacturers supporting them only 11 has submi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es. They have given non-confidential summary where possible. Where it was not possible reasons for the same were given to DA. WTO Agreement on Anti-Dumping Duty gives full authority to DA for determining weighted average of freight. DA has verified each freight contract and weighted average was correctly taken. Averaging can be done by D.A. under Rule 17(3) of the Anti-Dumping provisions. December, 2001 to March, 2002 was the period of shipment which was taken by D.A. If date of sale is taken for dumping margin, then it will lead to different result but D.A. has exercised his discretion in this regard. Dumping can only be held if goods are introduced in the commerce of importing countries. It is relevant for initiating investigation. Investigations were initiated on the basis of tender which was to be executed. Therefore, initiation of investigation was wrong. 7.On behalf of NALCO it was contended that although non-injurious price (NIP) is not defined in the Customs Tariff Act or Anti-Dumping Rules, yet the sole purpose of fixing NIP is to fix Anti-Dumping duty to redress the injury to domestic industry. Therefore, the Designated Authority was required to find the correct price o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctive of what has been done by other authority under Companies Act or Act on Taxation. Para (vi) of Annexure-II to Anti-Dumping Rules makes it obligatory on Designated Authority to work out the cost attributable to Caustic Soda, this has not been done by the Designated Authority. This is clear from the methodology adopted by the Designated Authority for arriving at non-injurious price. The Designated Authority has taken unreasonable profit for Caustic Soda while determining the NIP. Such a unreasonable profit has not been accepted by this Bench of this Tribunal in the case of Indian Spinners Association v. Designated Authority - 2004 (170) E.L.T. 144. While disclosing the methodology the Designated Authority has not given the point-wise analysis for arriving at the non-injurious price. It was not disclosed whether chlorine was taken as a joint product or a bye-product while determining the cost of Caustic Soda. Cost of production of Chlorine and sodium hydroxide at lye stage should have been separated for arriving of the cost of production of caustic soda and the method of costing should have been disclosed in indexed form. Where the chlorine is used captively by the producers and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us, to meet their requirement they have necessarily to import the Caustic Soda. Majority of the domestic industry of Caustic Soda has not responded to NALCO tender then it cannot be said that there has been injury to domestic industry. None of the industries who have responded to tender have complaint of dumping. The imports made by NALCO were only of caustic soda lye but the enquiry was made for lye, flakes, prills and granules. It was pointed out that Caustic Soda lye and Caustic Soda flakes, prills and granules are not the identical goods. Lye is of 50% Caustic Soda whereas the solid form like flakes, prill and granules contained 100% Caustic Soda. Therefore, these are not comparable goods. Reliance was placed on the judgment of European Court of Justice dated 11-6-92. 7.2 It was also pointed out that for determining the Anti-Dumping duty on Korea and M/s. Hanwah Chemical Corporation, only the imports from M/s. Hanwah Chemical Corporation by NALCO was taken into consideration. There was no other exporter from Korea and then how the Designated Authority has fixed the Anti-Dumping duty for other exporters from Korea is also not explained. It was also pointed out that in the Noti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he application for initiation of investigation that NALCO has placed its order for 87,000 MT which is more than combined imports of caustic soda in a year in India, but no notice for initiation of investigation was issued by the Designated Authority to NALCO. According to Rule 6(1), if the Designated Authority has decided to initiate investigation to determine the existence, degree and effect of any alleged dumping of any article, it shall issue a public notice notifying its decision and such public notice shall, inter alia, contain adequate information namely; name of the exporting countries and the article involved; the date of initiation of the investigation; a summary of the factors on which the allegation of injury is based and the address to which representations by interested parties to be directed along with time limit allowed to interested parties. As per Rule 6(3) the Designated Authority is required to provide a copy of application for initiation of investigation of alleged dumping to the known-exporter or the concerned trade association, Government of the exporting countries and to other interested party who makes a request therefor in writing. For initiation of investi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is required on the basis of the evidence as adduced by the domestic industry to arrive at prima facie conclusion before initiating the investigation. Rule 5 requires satisfaction of the Designated Authority for initiating the investigation which was not there on the basis of evidence produced before him. Reliance was also placed on the following decisions :- (i) Pig Iron Mfrs. Assn. v. Designated Authority, 2000 (116) E.L.T. 67 (para 5.1) - where it was held that Designated Authority shall initiate investigation only upon receipt of written application by or on behalf of domestic industry withdrawal of support after initiation does not terminate proceedings. (ii) Commissioner of Income Tax v. GM Mittal Stainless Steel, (2003) 11 S.C.C. 441 (Para 6) - where it was held that power of the Commissioner under Section 263 of the I.T. Act must be exercised on the basis of materials that were available to him when he exercised the power. (iii) Sterlite Industries v. Designated Authority, 2003 (158) E.L.T. 673 (S.C.) - where it was held that it must be remembered that not making relevant material available to the other side affects the other side as they get handi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d on the basis of joint product but cost was taken on the basis of proforma 'A' and 'B' of Cost Accounting Rules. At the relevant time Cost Accounting Records (Caustic Soda) Rules, 1967 as amended from 1999 were applicable and according to Rule 3(3) of the said Rule every company to which these rules were applicable were required to maintain proper books of account containing particulars specified in Schedule 3 and Proforma 'A' and 'B' annexed to the Schedule of these rules relating to the utilization of materials, labour and other items of cost in so far as they are applicable to caustic soda in any form. The manufacturers were maintaining these records in India. As per proforma 'A' and 'B' they were required to reduce the credits from chlorine while arriving at the cost of production of caustic soda as given at serial No. 12 of the proforma. They followed this as the industry was maintaining the records as per these Cost Accounting Records Rules. Para 12 of Annexure 3 although specified that where more than one product which is of equal economic importance arises from process, the cost up to the point of separation of products shall be apportioned to joint products on reasonable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or it is imported. Since the product is one and interchangeable with domestic product, its different form do not make it as a different product, therefore, the pleading of the appellants that there is no finding on the like articles given by the Designated Authority is baseless. REASONS : 10.We have considered the submissions made by both the sides and our findings are as under :- INITIATION : 11.It was alleged that the Designated Authority has not taken proper care to see that the application for initiation of investigation had not given the sufficient evidence for alleged dumping and injury and evidence of causal link between the alleged dumped imports. It was obligatory for the Designated Authority to examine the accuracy and adequacy of evidence provided in the application and to come to the conclusion that there is sufficient evidence regarding the dumping, injury and causal link between the dumped imports and alleged injury. 11.1 We find that M/s. AMAI on behalf of domestic industry had submitted the application for imposition of Anti-Dumping duty before the Designated Authority. According to Rule 5(3) of Anti-Dumping Rules, the Designated Authority shall not initia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... applicant M/s. AMAI. The information given by M/s. AMAI was required to be verified by the Designated Authority for initiation of the investigation with reference to the source from which the information has been furnished which has been done by the Designated Authority. He prima facie came to the conclusion that there is dumping of the caustic soda from Korea P.R. and P.R. China. At the stage for initiation of the investigation the Designated Authority has only to examine the accuracy and adequacy of evidence provided in the application and the same has been done by the Designated Authority as is evident from the initiation notification. Therefore, it cannot be said that the Designated Authority has not applied his mind regarding accuracy and adequacy. At the initiation stage all the details may not be available before the Designated Authority, therefore, he has only to examine the information submitted to him and its accuracy and adequacy and to come to a prima facie conclusion that there is a need of initiation of investigation. The claim of the appellant M/s. NALCO Ltd., that imports summary for April, 2001 to November, 2001 shows import from China PR a quantity of 6253800 Kg. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under investigation or being dumped in India or in the absence of such an article other article which although not alike in all respects but characteristics closely resembling those of articles under investigation. In the present case the application for imposing Anti-Dumping duty was in respect of Sodium Hydroxide commonly known as caustic soda. The goods produced by the domestic industry are like article to the goods produced, originating in or exported from the subject countries and both are used in interchangeably. Same technology is applied for production of caustic soda throughout the world. Therefore, irrespective of the form, the sodium hydroxide is one product and it has been correctly taken as one product by the Designated Authority. The investigation is for caustic soda falling under Chapter 28 of the Customs Tariff Act. The sub-headings 2815 11 01, 2815 11 02 and 2815 12 00 are for levy of customs duty. For the Anti-Dumping duty the form is immaterial as the Anti-Dumping duty was proposed on sodium hydroxide i.e. caustic soda irrespective of its form in the application filed by M/s. AMAI on behalf of the domestic industry. 13.1 In the application for initiation of in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... receipt.........The power of Commissioner under Section 263 of the Income-tax Act must be exercised on the basis of the material that was available to him when he exercised the power. At that time, there was no dispute that the issue whether the power subsidy should be treated as capital receipt had been concluded against the Revenue. The satisfaction of the Commissioner, therefore, was based on no material, either legal or factual which would have given him the jurisdiction to take action under Section 263 of the Income-tax, Act". 13.3 We find that the above decisions are in no way supporting the appellant (NALCO) that Designated Authority has not applied his mind. The application for initiation of investigation had furnished the sufficient information and evidence of dumping and therefore, the Designated Authority was correct in initiating the investigation as required under Rule 5 of the Rules. 14.It was claimed by M/s. NALCO Ltd., that no notice for initiation of investigation was issued by the Designated Authority to NALCO. We find that the Designated Authority has forwarded copy of the public notice to all known importers (whose details were made available by the petition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sue of maintenance of proper public file by the Designated Authority. The Designated Authority is required to maintain the public file/files with file number/numbers in which all the responses from the interested parties importers/exporters should be kept and properly page numbered and indexed. Date of filing the document in the public file should be indicated in the index. When any interested party examines the public file a proper dated acknowledgement should be obtained so that the interested parties may not claim that they have not been provided with the information in the public file or the document was not available in the public file. These acknowledgements should be made available when the appeals against the final findings of the Designated Authority come up for hearing in appeal before the Tribunal. Where interested party wants copy of documents it should be allowed as per rules. On confidentiality of documents, detailed guidelines have been given by this Tribunal in various decisions. The interested parties should not be denied the basis on which decision has been arrived at by the Designated Authority. Reasons cannot be confidential, only the data or figures which may h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lished in India or material retardation to the establishment of industry in India consequent upon imports of such articles from specified countries and to recommend levy of Anti-dumping duty equal to the margin of dumping or less which if levied would remove the injury to the domestic industry and the date of commencement of such duty. For doing so, the Designated Authority has to determine the normal value export price and margin of dumping and also to determine the injury to the domestic industry. It was pleaded before us by the domestic industry that in case of Hanwha Chemical Corporation the normal value and export price has not been correctly determined which has lead to non-imposition of duty on M/s. Hanwha Chemical Corporation whereas M/s. NALCO Ltd., and M/s. Hindustan Lever Limited have pleaded that the Designated Authority has not correctly determined the non-injurious price and this has lead to imposition of higher Anti-Dumping duty on caustic soda. In order to find out whether the normal value export price and non-injurious price has been correctly determined or not, we have to examine the legal provisions contained in Customs Tariff Act and Anti-Dumping Rules in respec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ansactions of sale in domestic area but transaction-wise freight has not been shown separately by the exporter M/s. Hanwha Chemical Corporation. When details were called, M/s. Hanwha Chemical Corporation have enclosed details of inland freight paid during the POI month-wise. The D.A. has got verified each freight contract and ex-factory price was determined on the basis of records kept in accordance with the generally accepted accounting principal of exporting country and determined the normal value on the basis of price in ordinary course of sale when meant for consumption in the exporting country. The method adopted by Designated Authority is correct and does not require any modification. The plea that Designated Authority has called for freight information from M/s. Hanwha Chemical Corporation and instead of supplying transaction-wise freight they supplied monthly figures of freight paid, hence, they should be taken as non-co-operate exporter cannot be accepted as they produced all records for verification. EXPORT PRICE : 19.It was contended before us that the export price has not been correctly determined in case of M/s. Hanwha Chemical. We find that export price is defined ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or not. We find that the Designated Authority in his final finding has observed that the authority for the purpose of final finding considered the adjustment as claimed by the customer on discount adjustment in terms of sale as per NALCO tender and adjustment of previous transaction sale to M/s. Tricon. Thus addition of $ 4.57/MT was correctly done. Thus, Designated Authority has correctly determined the export price for caustic soda and it was normatted for other exporters from Korea. This normatted export price was taken and normal value was determined on the basis of published figures of domestic sale in Chlor Alkali Magazine. The domestic industry has raised various points with regard to M/s. Hanwha Chemical Corporation like insufficient/dismal disclosure, incorrect cost of production data, lack of information of affiliation, illegal adjustment of US $ 5 PMT claimed citing NALCO tender and issue of contract and physical export. The Designated Authority had examined and verified at the plant site/corporate office of M/s. Hanwha Chemical Corporation relevant cost record, financial records and production records for determining the cost components, domestic sale price, export pri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ents in technology and the export performance and the productivity of the domestic industry. It was argued that the Designated Authority should have also taken into account of the obsolete machinery and high electrical cost while determining the non-injurious price. We find that these factors have been taken into account by the Designated Authority while determining the non-injurious price. The technology which is being used is same throughout the world, therefore, it cannot be state that India is using obsolete machinery. 21.1 As discussed above, we have observed that in case of Hanwah Chemical Corporation cost has been correctly determined by the Designated Authority taking the chlorine as co-product and separating its manufacturing cost during the process of manufacture of caustic soda at the stage of separation of chlorine and caustic soda on the basis of the volume of production. The same principle should have been adopted by the Designated Authority in case of domestic industry. Therefore, identical treatment was not given to domestic manufacturers and Hanwah Chemical Corporation. NON-INJURIOUS PRICE : 22.While deterjmining the non-injurious price for the like article f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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