Customs, Excise and Gold Tribunal - Delhi
Automotive Tyre Manufacturers ... vs Designated Authority on 6 November, 2000
Equivalent citations: 2000(122)ELT412(TRI-DEL)
ORDER C.N.B. Nair, Member (T)
1. The Central Government imposed anti-dumping duty at different rates on Nylon Tyre Cord Fabrics (NTCF) falling under sub-heading No. 5902.10 of the First Schedule to the Customs Tariff Act, 1975 exported from South Korea, Indonesia, Thailand and Taiwan into India under Notification No. 32/2000-Cus., dated 28th March, 2000. The present appeals are in regard to the duties so imposed. Association of Synthetic Fibre India seeks upward revision of the anti-dumping duty imposed while the other appellants seek quashing of the duty imposed.
2. After hearing the representatives of the appellant, Formosa Taffeta Co. Ltd. and the Designated Authority and perusal of records, we find that the appeal of Formosa Taffeta Co. can be disposed of on the ground of error in the method of computation of dumping margin alone. The grievance of Formosa Taffeta Co. is that there was no dumping by them and, therefore, no duty was required to be imposed in their case. From a perusal of the related documents containing calculation of dumping margin made available during the hearing, we find that there was negative dumping margin in respect of this exporter, i.e. export price was slightly higher than the normal value of the exported goods worked out on the basis of cost of production. Anti-dumping duty is attracted only in a case of exporting goods below normal value. Since export price in respect of this appellant is found to be marginally higher than normal value, there was no warrant for imposing the duty in respect of export to India by them. This position has also been conceded by the learned Counsel representing the Designated Authority. In these circumstances, the appeal of Formosa Taffeta Co. Ltd. (Appeal No. C/234/2000-AD) is allowed and the Antidumping duty imposed under notification No. 32/2000-Cus., dated 28th March, 2000 in respect of their exports of NTCF is set aside.
3. The Appeals of Thai Baroda Industries Ltd. (Appeal No. 233/2000-AD) and Automotive Tyre Manufacturers Association (Appeal No. C/194/2000-AD) challenged the imposition of duty on their exports/imports on the ground that the findings of the Designated Authority based on which the duty was imposed are not sustainable. The duty in the present case was imposed based on the final finding of the Designated Authority, which was notified on 22nd Feb., 2000. The appellants have submitted that there was no justification for imposition of Anti-dumping duty as the landed value of exports in question were not below the fair selling price of the Indian Domestic Industry. It has also been submitted that the Indian Industry had not suffered injury on account of the import of NTCF from the countries covered by the Investigation of the Designated Authority. The contention is that the imports are only meeting the demand which the domestic industry is not able to meet and that the lion share of the market was with the Domestic Manufacturers. Capacity utilisation of domestic industry was as high as 83.42% and the return earned on capital was also adequate. It has also been submitted that there is no causal link between export from the subject countries and the alleged injury to Indian Industry. It has also been submitted that the Indian Industry enjoys sufficient protection through 40% Customs Duty and 18% countervailing duty. They have further pointed out that the Indian Domestic Producers' prices for NTCF were lower than the prices of imported NTCF. They have, therefore, contended that the main reason for imports of the subject goods is the shortfall in the production of the Indian domestic Industry in comparison with the total demand for the subject goods and not dumping by foreign suppliers. The appellants have also submitted that one reason for imports of NTCF is that the imported goods are manufactured from "spin draw process" and the NTCF manufactured through such process has certain quality differences which necessitated imports.
4. The learned Counsel for the Designated Authority has rebutted these contentions and held that the findings of the Designated Authority clearly show that the charge of dumping is fully established and that dumping had caused injury to domestic industry. He specifically referred us to the finding that the appellant exporter (Thai Baroda) was exporting at much below cost of production. In fact the dumping margin was over 67%. He submitted that the recommendations have been made by the Designated Authority only after considering the case from various parameters of injury like quantum of imports, growth of imports, its impact on the market share, the profitability of domestic industry from production of subject goods, the sales volumes, sales realisation etc. and on a finding that analysis on these parameters indicated material injury to domestic industry. The Designated Authority had observed increasing imports from the countries covered by the investigation, both in terms of volume and percentage during the period of investigation. The market share of the domestic industry had declined during the period of investigation, and the profitability of the domestic industry had fallen. Their sale volumes had fallen, the closing stocks had increased and the profitability of the domestic industry had declined significantly. In this connection, Counsel for the Designated Authority drew our specific attention to the details of the findings on injury and causal link contained in the Preliminary Findings dated 15th October, 1999 of the Designated Authority.
5. On a perusal of the records and the examination of the submissions made on behalf of both the sides, we find that the recommendations for imposition of duty were made by the Designated Authority after careful examination of relevant facts. The appellant Thai Baroda Industry has been found to be exporting goods much below their normal value. The export price has been found to be much lower than the cost of production. This is clear from the fact that the dumping margin, that is the difference between normal value (cost of production in their case) and export price, has been ascertained during the investigation to be more than 67%. The appellant was clearly dumping the goods in the Indian market. The Designated Authority had examined the effect of such dumping on the Indian Industry from all the relevant parameters like the share of dumped imports in the Indian Market, the effect of such imports on the domestic industry in India in respect of market share, sale realisation, off take of goods, closing stocks, profitability etc. The Authority had reached clear finding that Indian Domestic Industry had suffered injury and such injury is relatable to the dumped imports from the countries under investigation. Therefore, recommendation was made by the Designated Authority in favour of imposition of anti-dumping duties. The submissions that imported goods are manufactured through a different process and that the imported goods differ in quality also do not invalidate the findings. Process of manufacture is not a relevant factor under anti-dumping law. Quality difference is also not material. The imported goods and domestically produced goods have the same use and have been correctly held to be 'like article' by the Designated Authority. In these facts and circumstances the submissions made in these appeals have no merit. The appeals fail and are rejected.
6. The remaining appeal, namely C/195/2000-AD of Association of Synthetic Fibre Industries, seeks upward revision of the anti-dumping duty imposed and also imposition of duty on US Dollar terms. With regard to the rate of duty imposed, the submission is that duty imposed is the injury margin arrived at during investigation. Injury margin is the difference between the landed value of imported goods and fair selling price of indigenously manufactured goods. The appellant submits that landed value of imported goods has been computed erroneously and that has led to determination of injury margin at a lower amount. The error pointed out is that landed value has been arrived at by providing an unnecessary addition of 2% of the CIF price towards handling charges. The appellant has contended that there is no justification or need for allowing 2% handling charges. It has been submitted that handling charges remain included in the 1% landing charges allowed. They have pointed out that the addition of 2% is contrary to the final findings itself. In para 29, landed value of imports has been stated to be assessable value as determined by the Customs under the Customs Act, 1962 and all duties of Customs except the one mentioned in that paragraph. The duties of Customs are worked out on the assessable value as determined by the Customs Act, 1962. Such assessable value includes cost of the goods, freight and insurance incurred and 1% towards landing charges and there is no provision for addition towards handling charges. The Counsel for the appellant has also submitted that such an addition towards handling charges is contrary to the provisions contained in Customs Valuation Rules inasmuch as Proviso (ii) to Rule 9(2) states that the charges referred to in Clause 2(b) i.e. loading, unloading and handling charges associated with the delivery of the imported goods at the place of importation shall be 1% of the free on board value of the goods + cost of transport referred to in Clause (a) + the cost of insurance referred to in Clause 2. On this point, the learned Counsel for the Designated Authority has submitted that it has been the common practice till recently for the Designated Authority to allow 2% handling charges in addition to 1% landing charges while determining the landed value of imported goods.
7. No provision for the addition of 2% as handling charges is seen in the relevant anti-dumping duty provisions. Provisions in Customs Valuation Rules are against such an addition. The findings of the Designated Authority also give no valid reasons. The only explanation offered during the hearing was that it was the practice till recently. In these facts and circumstances it has to be held that there is no justification for such an addition while fixing landed value of imported goods. The appellant has valid grievance on this score. Therefore, injury margin is required to be revised after excluding handling charges from the landed value. Since anti-dumping duties imposed in these cases are injury margins, consequently, they also require revision.
8. The second grievance of the appellant is that duty is required to be imposed in dollar terms. We have accepted this submission in our earlier decisions in the cases of (1) Automotive Tyre Manufacturers' Association and Anr. v. Designated Authority 2000 (38) RLT 19 (CEGAT)] (2) Oswal Woollen Mills Ltd. and Anr. v. The Designated Authority 2000 (38) RLT 132 (CEGAT)] (3) Pig Iron Mfrs. Asscn. v. Designated Authority, Min. of Commerce [2000 (116) E.L.T. 67 (Tri.)]. Accordingly this submission of the appellants is also required to be accepted.
9. Consequent to the setting aside of the imposition of duty on exports by Formosa Taffeta Co. Ltd. and the acceptance of the appeal of Associations of Synthetic Fibre Industries in regard to exclusion of handling charges and imposition of the duty in dollar terms, as stated above, the duties imposed under Notification No. 32/2000-Cus. are revised as indicated in the table below :-
S. No. Name of the Country Name of the Exporter Amt. of duty (US$/MT) (1) (2) (3) (4)
1.
South Korea (a) M/s. Hyosung Corporation 161
(b) All other exporters 647
2. Indonesia (a) M/s. PTGT Petrochem Indus- 101
tries
(b) M/s. All other exporters 282
3. Thailand (a) M/s. Thai Baroda Industries 159
Ltd.
(b) All other exporters 739
4. Taiwan All exporters other than M/s. 543
Formosa Taffeta Co. Ltd.
10. All the apppeals are disposed of as indicated above.