Custom, Excise & Service Tax Tribunal
Mahle Anand Thermal Systems Private ... vs -Designated Authority Directorate ... on 13 April, 2023
Author: Dilip Gupta
Bench: Dilip Gupta
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
NEW DELHI
PRINCIPAL BENCH
ANTI DUMPING APPEAL NO. 51485 OF 2022
(Arising out of Final Findings F.No. 06/27/2020-DGTR dated 07.09.2021 of the
Designated Authority, Directorate General of Trade and Customs Notification No.
68/2021-Customs (ADD) dated 06.12.2021)
M/s. Mahle Anand Thermal ...Appellant
Systems Private Limited
VERSUS
1. Designated Authority, Directorate
General of Trade Remedies
Department of Commerce
Ministry of Commerce & Industry
Parliament Street, Jeevan Tara
Building, 4th Floor, New Delhi-110001
2. The Union of India
Through the Secretary,
Ministry of Finance,
Department of Revenue,
North Block, New Delhi-110001
3. Hindalco Industries Limited
3rd Floor, B Wing, S.K. Ahire Marg,
Worli, Mumbai 400030
4. Aludecor Lamination Pvt. Ltd.
Martin Burn Building, Suite 52, Floor 5, 1, RN,
Mukherjee Road,
Kolkata - 700001, West Bengal
5. Alkraft Thermotechonlogies Pvt. Ltd.
35A & B/1, Ambattur Industrial Estate,
Chennai 600058
6. Jiangsu Dingsheng New Materials Joint-Stock Co.
Jingkou Industrial Park,
Zhenjiang, Jiangsu Province, China
7. Dingsheng Aluminum Industries
Flat/RM 1405 14/F 88 Gloucester Road,
Wanchai, Hong Kong
8. Hangzhou Dingsheng Import & Export Co., Ltd.
Pingyao Village, Pingyao County,
Yuhang District,
China
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9. Inner Mongolia Liansheng New Energy Material Co.
B Zone, Huolinguole Industrial Park,
Tongliao City, Inner Mongolia
10. Indomax Industries
D-19/3, Okhla Industrial Area,
Phase-II, New Delhi - 110020
11. Technova Imaging Systems (P) Limited
E1/2/3, MIDC Industrial Area,
Taloja, District Raigad, Maharashtra, India
12. Jindal (India) Limited
NH No.-6, Mouza-Jangalpur,
PO: Argori, GP-Andul, Howrah: 711 302,
West Bengal, India
13. Raviraj Foils Limited
Survey No. 169, P.O. Chharodi Farm,
Opp. Tata Nano, Tal: Sanand Dist.
Ahmedabad
14. Arconic (Kunshan) Aluminum Products Co., Ltd
No. 111 Yanhu Road Huaqiao Town,
Kunshan City, 215332,
Jiangsu Province, China
15. M/s Granges Aluminium (Shanghai) Ltd.
1111 Jiatang Highway, Shanghai,
China, 201807.
16. Aluminium Secondary Manufacturers Association
1/6B, Asaf Ali Road, New Delhi- 110002
17. ACP Manufacturer Association
2E/7, Jhandewalan Extension,
New Delhi-110055
18. Alutech Packaging Private Limited
DSM-315, DLF Tower,
Shivaji Marg, Moti Nagar,
Delji - 110005, India
19. Greenberry Foils India Limited
Plot No. 6, Valia GIDC Industrial Estate Valia,
Ankleshwar, Bharuch, Gujarat 393135
20. R.S. Foils Private Limited
Rev No. - 811/1/3, Baroda Halol Express Road,
Nr. Liva Pharamaceutical Ltd.,
Village: Kotambi, Dist. Vadodara - 391510,
Gujarat
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21. Shree Venkateshwara Electrocast
Private Limited
Flat No. 204, Block - B,
Panchsheel Apartment, 493/B/1,
GT Road (S), Shibpur, Howrah,
Kolkata, WB, 711102
22. Hanon Automotive Systems India .....Respondents
Pvt. Ltd.
Keelakaranai Village, Malrosapuram Post
Chengalpatt 603204
Tamil Nadu, India
APPEARANCE:
Shri V. Lakshmi Kumaran, Shri Devinder Bagia, Shri Ankur Sharma, Shri
Jayant Raghu Ram and Shri Ashutosh Arvind Kumar Advocates for the
Appellant
Shri Ameet Singh, Ms. Bhawna and Ms. Nidhi, Advocates for Designated
Authority
Shri S. Seetharaman and Shri Darpan Bhuyan Advocates for the Respondent
No. 3
Ms. Reena Asthana Khair, Ms. Shreya Dahiya, Advocates for Respondent
No.15
Shri Devesh Tripathi, Shri Rajesh Sharma, Ms. Roopali Sharma and Shri
Nikhil Sharma, Advocates for Respondent No. 10 and 17
Shri M.V. Mukunda, Advocate for Respondent No. 5
Shri Nagendra Yadav, Authorized Representative for the Central Government
CORAM: HON'BLE MR. JUSTICE DILIP GUPTA, PRESIDENT
HON'BLE MR. P.V. SUBBA RAO, MEMBER (TECHNICAL)
HON'BLE MS. RACHNA GUPTA MEMBER (JUDICIAL)
Date of Hearing: 10.11.2022
Date of Decision: 13.04.2023
FINAL ORDER NO. 50470/2023
JUSTICE DILIP GUPTA:
Mahle Anand Thermal Private Limited 1 has filed this appeal to
assail the final findings 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
1. the appellant
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„certain flat rolled products of aluminium‟ 2 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 Limited3,
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 4 and the Customs Tariff (Identification, Assessment and
Collection of Anti-dumping Duty on Dumped Articles and Determination
of Injury) Rules, 19955 for initiation of anti-dumping investigation on
the imports of certain flat rolled products of aluminium originating in or
exported from China PR 6 . The investigation was initiated by the
designated authority by a notification dated 08.09.2020 to determine
the existence, degree and effect of the alleged dumping and to
recommend the amount of anti-dumping duty, which, if levied, would
be adequate to remove the injury to the domestic industry. The
investigation was conducted for the period from 01.04.2019 to
31.03.2020 and the injury analysis period was notified to be from
01.04.2016 to 31.03.2019 and the period of investigation. The
designated authority provided an opportunity to all the interested
2. the subject goods
3. Hindalco
4. the Tariff Act
5. the 1995 Rules
6. the subject country
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parties to present their submissions orally in the hearing conducted on
25.05.2021 and the interested parties who presented their views were
advised to file written submissions of the views expressed orally by
them. The interested parties were also provided an opportunity to file
rejoinder submissions to the views expressed by the opposing
interested parties. A disclosure statement containing the essential facts
which would form the basis for the final findings was issued to the
interested parties on 26.08.2021 and the interested parties were
allowed time upto 02.09.2021 to give their comments. The final
findings of designated authority were notified on 07.09.2021. The
conclusion and the recommendation made by the designated authority
in the final findings are as follows:
"L. CONCLUSION
127. After examining the submissions made by the
domestic industry and the other interested parties and
issues raised therein and considering the facts available
on record, the Authority concludes that:
a) Considering the normal value and export price for
the subject goods, dumping margin for the
subject goods from the subject country has been
determined, and the margin is positive and
significant.
b) The domestic industry has suffered material injury
and the injury margin is positive. The examination
of the imports of the subject product and the
performance of the domestic industry shows that
the volume of dumped imports from the subject
country has increased in both absolute and
relative terms. The volume of the subject goods
has increased by more than 60% whereas
demand has increased by only 18%. It is also
noted that the imports of the subject goods from
the subject country are suppressing the prices of
the domestic industry. The production and the
sales of the domestic industry have remained
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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 terms of the provisions laid
down under the Rules, the Authority is of the view that
imposition of anti-dumping duty is required to offset
the dumping and the injury. Therefore, the Authority
recommends imposition of the anti-dumping duty on
the imports of subject goods originating in or exported
from the subject country.
129. Having regard to the lesser duty rule followed by
the Authority, the Authority recommends imposition of
the anti-dumping duty equal to the lesser of the margin
of dumping and the margin of injury so as to remove
the injury to the domestic industry. The Authority,
therefore, considers it necessary to recommend
imposition of the definitive anti-dumping duty equal to
the amount mentioned in the column (7), on all imports
of the subject goods described at Column (3) of the
duty table, originating in or exported from China PR,
from the date of notification to be issued in this regard
by the Central Government."
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4. The Central Government, thereafter, issued the notification dated
06.12.2021 imposing anti-dumping duty on flat rolled products of
aluminium for a period of 5 years from the date of publication of the
notification. However, the following two products were excluded from
the scope of the subject goods.
"i. Can-body Stock-also includes Can End Stock
(CES) used to make aluminium cans.
ii. Aluminium Foil up to 80 microns."
5. The appellant is using certain flat rolled products of
aluminium including clad with compatible non-clad aluminium
foil to manufacture heat exchangers, condensers, evaporates,
radiators, HVAC systems and engine cooling modules at its units
located at Chinchwad (Maharashtra), Chennai (Tamil Nadu), Sanand
(Gujarat), Noida (Uttar Pradesh). The appellant supplies these
products to various customers including to some of the major
passenger and commercial vehicle manufacturers in India like Tata
Motors, Mahindra and Mahindra, Maruti Suzuki India Ltd. and Ashok
Leyland. The customers of the appellant use products in their vehicles,
and it plays an important part in manufacturing of vehicles across
India.
6. The appellant imports aluminium strip/coil which is clad with
compatible non-clad aluminium foil from China PR for use in
manufacture of the aforesaid products. Clad with compatible non clad
aluminium foil is a corrosion-resistant aluminium sheet formed from
aluminium surface layers metallurgically bonded to high-strength
aluminium alloy core material for use in engine cooling and air
conditioner systems in automotive industry such as radiator,
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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 from 5.5
micron to 80 micron from China PR based on the application by the
domestic industry including Hindalco. In the final findings issued on
10.03.2017 and the customs notification issued on 16.05.2017 clad
with compatible non-clad aluminium foil was excluded from the
product.
9. The second anti-dumping investigation for the period April 2019
to March 2020 was initiated on 20.06.2020 on aluminium foil of 80
micron and below from China PR, Indonesia, Malaysia and Thailand
based on the application by domestic industry including Hindalco. Clad
with compatible non-clad aluminium foil was excluded in the final
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findings dated 18.06.2021 and the customs notification dated
16.09.2021.
10. The third anti-dumping investigation (sunset review) for the
period of April 2020 to March 2021 was initiated on 23.09.2021 and
the exclusion on clad with compatible non-clad aluminium foil which
was granted in 2017 continued in the final findings of the sunset
review.
11. The present anti-dumping investigation for the period of April
2019 to March 2020 was initiated on 08.09.2020 on certain flat rolled
products of aluminium from China PR based on an application by
Hindalco. Domestic industry in its application excluded articles covered
by anti-dumping customs notification dated 16.05.2017 read with final
findings dated 10.03.2017, which were issued pursuant to the first
anti-dumping investigation. The final findings concerning the present
investigation were issued on 07.09.2021 and the customs notification
was issued on 06.12.2021. The product scope defined by the
designated authority includes clad with compatible non-clad aluminium
foil.
12. The contention of the learned counsel for the appellant is that
the designated authority incorrectly included clad with compatible non-
clad aluminium foil in the product scope holding that the domestic
industry can manufacture cladded coil, though there is no finding by
the designated authority that the domestic industry had actually
manufactured and made commercial supplies of clad with compatible
non-clad aluminium foil during the period of investigation.
13. Shri S. Seetharaman, learned counsel assisted by Shri Atul
Sharma and Shri Darpan Bhuyan for the respondent no. 3 and Ms.
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Reena Khair, learned counsel for the respondent no. 15, however,
support the final findings and the customs notification and submitted
that the designated 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
description is 'clad with compatible non-clad aluminium foil. Thus, a
cladded coil or clad with compatible non-clad aluminium foil is not a
simplicitor flat rolled product of aluminium, but it is a coil which has
been manufactured out of three flat rolled products of aluminium.
There can also be a cladded coil with clad layer on one side, where the
clad layer is metallurgically bonded with the core layer.
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15. It needs to be noted that the present investigation was only on
certain flat rolled products of aluminium and not on products that
are manufactured out of flat rolled products of aluminium.
16. It also needs to be noted that the designated authority in the
final findings dated 10.03.2017, in the context of the first anti-
dumping investigation, had defined clad with compatible non-clad
aluminium foil in the following manner:
"31. In view of the foregoing, the scope of product
under consideration for the purpose of present
investigation and proposed measures is as follows:
Aluminium Foil whether or not printed or backed with
paper, paper board, plastics or similar packing
materials of a thickness ranging from 5.5 micron to 80
micron excluding.
vii. Clad with compatible non clad Aluminium Foil: Clad
with compatible non clad Aluminium Foil is a corrosion-
resistant aluminium sheet formed from aluminium
surface layers metallurgically bonded to 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."
17. The radiator is a safety critical item which ensures engine cooling
of a vehicle. During movement of the vehicle at high speeds, the
radiator should not fall apart. Therefore, the brazing operation should
ensure that the fin perfectly join with the tubes, header plate and end
plate.
18. The domestic industry had excluded aluminium foil up to 80
microns by reference to customs notification dated 16.05.2017. In this
regard, the appellant made the following legal submissions before the
designated authority.
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"13. In the petition submitted by the domestic
industry, the following products were sought to be
excluded from the product scope:
a. Can-body Stock - also includes Can End Stock
(CES) used to make aluminium cans‟ and
b. Aluminium Foil up to 80 microns attracting anti-
dumping duty vide Customs Notification no.
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 foil,
the appellant had requested the designated authority to provide
detailed descriptions of the said exclusions mentioned in the said
customs notification rather than merely referring the customs
notification number for excluding the products.
20. In response to the specific request of the appellant, the domestic
industry admitted that they do not object to a clarification from the
designated authority with respect to the items that are excluded by
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customs notification dated 16.05.2017, but the domestic industry
submitted that clad with compatible non clad aluminium foil should be
included in the scope of the product. This statement of the domestic
industry is recorded in the final findings and as follows:
"e. Exclusion requests: With regard to exclusion
requests made by the interested parties, the domestic
industry has submitted as follows:
Aluminium Foil up to 80 micron with the Customs
Notification No. 23/2017 imposing anti-dumping duty
on Aluminium foil up to 80 micron.
i. the domestic industry does not object to a
clarification from the Authority with respect to the
items that are excluded under Customs Notification No.
23/2017-Customs (ADD) dated 16th May, 2017.
However, the domestic industry requests that such
clarification explicitly makes note of the fact that
"Aluminium composite panel stock" or "ACP mill finish"
and Clad with compatible non clad Aluminium Foil are in
fact included in the scope of this investigation......"
21. The domestic industry stated that it had supplied material to the
relevant interested parties in past in 2016 but had never received
orders in future. This has been recorded by the designated authority
and is reproduced below:
"Cladded coil for Tube, Header Plate and End Plate,
Unclad Finstock and Unclad Coil
xiii. The domestic industry can manufacture Unclad
Finstock, Unclad Coil and Cladded Coil for Header Plate
and End Plate. The domestic industry had in fact
supplied material to the relevant interested party with
the required specifications to users in the past (in
2016) but never received orders in the future. A one-off
complaint by a user cannot be a ground for exclusion.
This is particularly important in the case of trial and
commercial orders. Since trial orders are small and
made in different casts, it is possible that not all
batches will meet all specifications to the mathematical
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precision. That cannot 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 aluminium foil. It was imperative for the
designated authority to have examined whether the domestic industry
had made commercial supply of clad with compatible non-clad
aluminium foil during the period of investigation. The domestic
industry also failed substantiate that it had made commercial supplies
of clad with compatible non-clad aluminium foil in commercial
quantities during the period of investigation.
24. In regard to the notification dated 16.05.2017 issued by the
Central Government for the first anti-dumping investigation, the
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Bombay High Court in Mahle Anand Thermal Systems Private
Limited vs. The Union of India, through Join Secretary, Ministry
of Commerce, Department of Commerce & Ors. 7, after noting the
clarification issued by the Directorate General of Anti-Dumping and
Allied Duty on 01.02.2018, allowed the Writ Petition and the relevant
paragraphs are reproduced below:
"5. ***** Petitioner's representation and
explanation that both clad as well as unclad/non-
clad aluminium foil were expressly excluded from
the scope of the investigation and final findings of
Respondent No.5 at the request of the domestic
industry itself as there was no injury caused to
the domestic market went unheeded. This is
despite a clarification issued by Respondent No.5
by a letter dated 1st February, 2018 in effect
confirming the stand of Petitioner. Paragraphs 4, 5, 6
and 7 of the said letter dated 1st February, 2018 reads
as under :-
"4. In the aforesaid final findings read with the
customs notification, eight (8) exclusions have been
granted from the product scope. The exclusion (vii)
as given in the aforesaid notification is worded as
follows :-
Clad with compatible non clad Aluminium Foil :
Clad with compatible non clad Aluminium Foil is a
corrosion-resistant aluminium sheet formed from
aluminium surface layers metallurgically bonded
to 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.
5. The aforesaid exclusion was granted as the
domestic industry had admitted that it could
not produce the above products, namely
i) clad aluminium; and
7. 2022 (8) TMI 844 - Bombay High Court [Writ Petition No. 604 of 2021
decided on 10.08.2022]
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ii) compatible unclad aluminium. This is also
recorded in the final findings at several 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 ventilation and air
conditioning (HVAC) systems and parts thereof.
7. The Final Finding is Comprehensive and the
exclusion is candidly mentioned in relevant
portions of the Final Findings.
*****
13. Subsequently, there is a clarification issued by the Directorate General of Anti-Dumping and Allied Duties on 1st February, 2018 which is quoted earlier. Therefore, it is quite clear that clad as well as clad with compatible non-clad or unclad aluminium foil has been excluded from anti- dumping duty. Respondent No.4 therefore was not justified in insisting on payment of anti-dumping duty 17 AD/51485/2022 for clearance of unclad or non- clad consignment of aluminium foil, more so, when the same product is allowed to be imported from other ports without insisting on payment of levy of anti-dumping duty."
(emphasis supplied)
25. In the aforesaid judgment of the Bombay High Court, reliance has been placed on the letter dated 01.02.2018 issued by the Directorate General of Trade Remedies in connection with the final findings dated 10.03.2017 regarding the exclusion granted to clad with compatible non-clad aluminium foil.
26. It needs to be noted that the Manual of Standard Operating Practices for Trade Remedy Investigations issued by the Directorate General of Trade Remedies, Department of Commerce, Government of India provides in Article 3.10 that mere competence without any production or merchant sales may not be sufficient, to include an item in the definition of the product under consideration. The relevant portions are as follows:
"3.10. The PUC is defined to include those items only, which are manufactured by the DI. Mere competence without any production or merchant sales may not be sufficient to include an item in the definition of the PUC. Similarly, if an item is produced and consumed only captively (in-house) without any outside sales the DI's request for an investigation against this product may be considered with caution. The PUC should preferably include those items, which are produced and commercially sold in the domestic market by the respective DI. An exception could be the cases where the applicant is a new industry, who has set up facility for a new product or could be an upstream product of an existing industry and the new industry is facing difficulty in capturing market on account of dumped imports of the product.18
AD/51485/2022 **** 3.26. The complete process 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 consideration as has been contended by learned counsel for some of the respondents for the reason that the imported article is a like article under investigation or that Hindalco has the capability and has produced and sold clad with compatible non-clad aluminium foil.
30. For the reasons stated above, clad with compatible non-clad aluminium foil has to be excluded from the product under consideration and, accordingly, the customs notification dated 06.12.2021 is modified to exclude clad with compatible non-clad 19 AD/51485/2022 aluminium foil from the scope of product under consideration. The Anti-Dumping Appeal is, accordingly, allowed to the extent indicated above.
(Order Pronounced on 13.04.2023) (JUSTICE DILIP GUPTA) PRESIDENT (P.V. SUBBA RAO) MEMBER (TECHNICAL) (RACHNA GUPTA) MEMBER (JUDICIAL) Shreya