Customs, Excise and Gold Tribunal - Delhi
Videocon Narmada Glass vs Designated Authority on 15 November, 2002
Equivalent citations: 2003(86)ECC317, 2003(151)ELT80(TRI-DEL)
ORDER
K.K. Usha, President
1. The appellant is a manufacturer of glass TV shells (panels and funnels) for colour picture tube and is having its plant at Bharuch, Gujarat According to the appellant, it is the only plant in India which is manufacturing the above product except Samcor who has recently started producing funnels. These products are purchased by BPL, JCT, LG, Samtel who make complete picture tube and sell the same to all colour TV manufacturers like Samsung, Phillips, Videocon etc. The appellant has been importing Strontium Carbonate, one of the chemicals used as basic raw material for the manufacture of its product. Under Notification No. 70/2001 dated 26-6-2001 Govt. of India imposed anti-dumping duty on Strontium Carbonate originating in and exported from China P.R. and imported into India @ US $ 213.37 PMT. This imposition of duty was pursuant to the recommendation of the Designated Authority in his final finding under Notification dated 15-6-2001. In the final finding the Designated Authority had come to the conclusion that (a) Strontium Carbonate in all forms originating in or exported from the People's Republic of China has been exported to India below its normal value (b). The domestic industry has suffered material injury by way of decline in its market share and financial losses on account of price depression caused by the low landed prices of the dumped Strontium Carbonate and (c) the injury has been caused to the domestic industry by dumping of the subject goods originating in or exported from People's Republic of China.
2. Background to the imposition of duty is that M/s. TCM Ltd. which is the only manufacturer of Strontium Carbonate in India filed a complaint on behalf of domestic industry against import of Strontium Carbonate from China P.R. and Germany. Based on the petition the Designated Authority initiated proceedings which ended in final finding as mentioned above.
3. The main contention raised by the appellant herein who is the importer of Strontium Carbonate from China P.R. and who is adversely affected by the imposition of anti-dumping duty, is that Strontium Carbonate which is being imported by the appellant is in granular form, the product of TCM is in powder form and if powder form of Strontium Carbonate is used, it will affect the quality of the appellants' final product. It is contended by the appellant that world wide TV glass shell (panels and funnels) part manufacturers use prilled/small granular Strontium. Carbonate for manufacture of glass shell and Strontium Carbonate in that form is not manufactured by TCM.
4. The appellants have explained that 16 different chemicals are used as basic raw material including Strontium Carbonate. In order to maintain the quality of picture colour tube the chemical composition of Strontium Carbonate with its impurities and other constituents should be strictly as per the specification. It is also required that physical size of the material should be in accordance with the specification. Any change in the specification would affect the quality of the final product leading to large scale rejection on grounds of quality. According to the appellant glass quality is affected when Strontium Carbonate in powder form is used in the following manner : -
"(a) after weighing out the constituents into a batch in the predetermined recipe the same is transferred to the furnace building via a series of conveyors and elevators. Powder form of any material has a tendency to form dust and at the transfer points the fine dusty materials tend to escape, thereby leaving the main batch starved of strontium. This affects the main glass composition with all the problems of low strontium being evident.
(b) When powder form of strontium carbonate is used the material does not flow easily with the result that the pockets of air get trapped within the fine particles. This phenomenon is not seen in the case of granular strontium. When the material with fine pockets of entrapped air get into the furnace the extremely small air bubbles lack the buoyancy to bubble out of the glass and become visible in the finished product. These air bubbles in the finished product are termed as blisters or seeds and render the product totally un-acceptable."
5. The appellant would further contend that the total production is of TCM only to the extent of 200-300 MT per year whereas the requirement of the appellant is to the extent of 6000 MT per year which is being increased to 12000 MT. The appellant would further contend that it was prepared to buy from the domestic industry if it could supply Strontium Carbonate in granular form. But, the domestic industry could not supply in that form. According to the appellant, the Strontium Carbonate in powder form produced by the domestic industry is usable in by ferrite and steel industries. Therefore, no injury is caused to the domestic industry due to import of Strontium Carbonate in granular form from China P.R. At any rate there cannot be a causal link between the import of Strontium Carbonate in granular form from China P.R. and the injury if any, suffered by the domestic industry which manufactures Strontium Carbonate in powder form, as glass TV shells industry cannot constitute a market for Strontium Carbonate in powder form.
6. It was submitted on behalf of the Designated Authority that there was no reason to interfere with its finding that Strontium Carbonate in powder form and granular form is interchangeable and they are like articles within the meaning of Rule 2(d) of the Customs Tariff (Identification, Assessment and Collection of Anti-Dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995. It is also submitted that its final finding that domestic industry has suffered material injury on loss of market share and also from the profitability due to fall in net sales realisation on account of low priced dumped imports is based on relevant materials.
16. Even though at the initial stage there was representation from the domestic industry TCM Ltd. on subsequent dates of hearing nobody represented the company. But a letter dated 7-5-2002 has been addressed by the domestic industry to the Tribunal, the relevant portion of which reads as follows :-
"We wish to inform you that earlier there was producer of Strontium Carbonate in the country. TCM has developed this product through internal research & development. The company first produced this product in commercial volumes in the year 1995. While the company has successfully produced and supplied Strontium Carbonate in powder form to the consumers in India, the company has not been able to produce Strontium Carbonate in granule form. We have earlier approached the consumers of Strontium Carbonate granule form with an intention to supply them Strontium Carbonate in powder form. However, these consumers are not able to use powder form and have been insisting on granule form only. We are continuing our efforts to produce this product in the granule form. However, it is felt that the company may not be able to produce this product in commercial form in the near future.
Till such time the company undertakes commercial production of this product in granule form, we consider that revoking anti-dumping duty on granule form would not adversely affect us. We, therefore, do not oppose exclusion of Strontium Carbonate in granule form till such time we start producing the product in commercial volumes."
[Emphasis supplied] From the above letter it is clear that the domestic industry is not in a position to manufacture and supply Strontium Carbonate in granular form which is required by the appellant.
8. Rule 11 of the Customs Tariff (Identification, Assessment and Collection of Anti-Dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995, contains provision to be followed for determination of injury. Sub-rule (1) provides that "Designated Authority shall record a finding that import of such article in India causes or threatens material injury to any established industry in India or materially retards the establishment of any industry in India in the case of imports from specified countries." In Indian Refractory Makers Association v. Designated Authority 2000 (119) E.L.T. 319 (Tribunal), this Tribunal had occasion to hold that if dumped import of an article does not or is not capable of causing injury to the domestic industry, imposition of Anti-dumping duty is not warranted as it only increases the cost to the Indian importers without affording any protection to the Indian manufacturers of like article. In the above case, it was found that dead burnt magnesite (DBM) of less than 4% silica content imported by the appellant from PR China is a different grade/type of product from DBM produced in India. The imported DBM is also not in commercial competition with the domestically produced DBM. In the above background of facts, the Tribunal accepted the contention raised by the appellant that the import of DBM with less than 4% silica content by them, causes no material injury to the Indian DBM manufacturing industry and that there cannot be a causal link between the import of that grade DBM from PR China and injury, if any, experienced by the Indian DBM industry. Reliance was placed on an earlier decision of this Tribunal in Birla Peridase v. Designated Authority (Anti-Dumping), GOI -
9. In the present case, even if we accept the finding of the Designated Authority that Strontium Carbonate in granular form imported and Strontium Carbonate in powder form produced by domestic industry are like articles, we cannot hold that imported Strontium Carbonate in granular form is in commercial competition with the domestically produced Strontium Carbonate in powder form. Apart from the detailed arguments made by the appellant on its requirement of Strontium Carbonate in granular form for maintaining quality of its product, the domestic industry itself admits that it is not in a position to supply Strontium Carbonate in granular form which is required by the appellant and that "revoking of anti-dumping duty on granular form would not affect us. It is, therefore; clear that imported article is not capable of causing injury to domestic industry which would justify imposition of anti-dumping duty. Import of Strontium Carbonate in granular form from China PR does not cause any material injury to the domestic industry or at any rate there is no causal link between the import and the injury, if any, suffered by the domestic industry.
10. Since we are coming to the conclusion that for the above reason the imposition of anti-dumping duty on import of Strontium Carbonate from China PR is unjustified, we do not propose to go into all other contentions raised on normal value etc.
11. In view of our above stated finding it is ordered that imports of Strontium Carbonate in granular form shall not attract anti-dumping duty imposed under Notification No. 70/2001-Cus., dated 26th June, 2001.
12. The appeal stands allowed as above.