Custom, Excise & Service Tax Tribunal
Kuitun Jinjiang Chemical Industry Co ... vs Designated Authority Directorate ... on 5 August, 2020
Author: Dilip Gupta
Bench: Dilip Gupta
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CUSTOMS EXCISE & SERVICE TAX APPLELLATE
TRIBUNAL
PRINCIPAL BENCH, NEW DELHI
COURT NO. 1
Anti Dumping Appeal No. 52291 of 2019
[Arising out of final findings dated 19.06.2019 of Directorate General of Trade
Remedies and Customs Notification No. 34/2019 dated 06.09.2019]
Kuitun Jinjiang Chemical Industry
Co. Ltd. ...Appellant
No. 98 Kashi East Road, Kuitun City,
Yili Prefecture, Xinjiang Uygur
Autonomous Region- 833200
P. R. China
Versus
Union of India ...Respondent
Ministry of Finance, Department of Revenue, North Block New Delhi-110001 And 3 others Appearance Ms. Rupali Sharma and Shri Ajay Sharma Advocates - for the Appellant Shri Jitender Singh, Shri Akshay Soni Advocates and Shri Jinender Singhvi, Consultant - for the Respondent No. 3 and 4 Shri Ameet Singh Advocate - for the Designated Authority Shri Rakesh Kumar, Authorised Representative - for the Revenue With Anti Dumping Appeal No. 52292 of 2019 [Arising out of final findings dated 19.06.2019 of Directorate General of Trade Remedies and Customs Notification No. 34/2019 dated 06.09.2019] Foshan Kaisino Building Material Co., Ltd. .....Appellant 1610-1611, Floor 16B2, Jinying Green Islanang Town, Changchen District, Foshan-52800 Guangdong, China Versus Union of India ......Respondent Ministry of Finance, Department of Revenue, North Block New Delhi-110001 And 3 others 2 Appearance Shri Jitender Singh, Shri Akshay Soni Advocates and Shri Jinender Singhvi, Consultant
- for the Appellant Ms. Rupali Sharma and Shri Ajay Sharma Advocates for the Respondent No. 5 Shri Ameet Singh Advocate - for the Designated Authority Shri Rakesh Kumar, Authorised Representative - for the Revenue With Anti Dumping Appeal No. 50100 of 2020 [Arising out of final findings dated 19.06.2019 of Directorate General of Trade Remedies and Customs Notification No. 34/2019 dated 06.09.2019] Sunita Commercials Pvt Ltd. .....Appellant 1006, Jai Antariksh, Makwana Road, Marol Naka, Andheri (E), Mumbai-400059, Represented by its Authorised Signatory, Ashok Saraf, Director Versus Union of India .......Respondent Through the Secretary, Ministry of Finance, Department of Revenue, North Block New Delhi-110001 And 5 others Appearance Shri Jitender Singh, Shri Akshay Soni Advocates and Shri Jinender Singhvi, Consultant
- for the Appellant Ms. Rupali Sharma and Shri Ajay Sharma Advocates for the Respondent No. 5 Shri Ameet Singh Advocate - for the Designated Authority Shri Rakesh Kumar, Authorised Representative - for the Revenue And Anti Dumping Appeal No. 50103 of 2020 [Arising out of final findings dated 19.06.2019 of Directorate General of Trade Remedies and Customs Notification No. 34/2019 dated 06.09.2019] M/s Gujarat State Fertilizers & Chemicals Ltd. .....Appellant P. O. Fertilizernagar-391750, District Vadodara, Gujarat, India Versus Union of India .....Respondent Through the Secretary, Ministry of Finance, Department of Revenue, North Block New Delhi-110001 And 5 others 3 Appearance Ms. Reena Khair, Ms. Shreya Dahiya, Ms. Anoushka Singh ,Ms. Priyamvada Sinha and Shri Rajesh Sharma, Advocates - for the Appellant. Shri Jitender Singh, Shri Akshay Soni, Advocates and Shri Jinender Snghvi, Consultant
- for the Respondent No. 3 and 4.
Ms. Rupali Sharma and Ajay Sharma for Respondent No.6 Shri Ameet Singh, Advocate - for Designated Authority. Shri Rakesh Kumar, Authorized Representatives (DR) - for the Revenue CORAM: HON'BLE MR. JUSTICE DILIP GUPTA, PRESIDENT HON'BLE MR. D M MISRA, MEMBER (JUDICIAL) HON'BLE MR. C L MAHAR, MEMBER (TECHNICAL) Date of Hearing: February 20, 2020 Date of Decision: August 05, 2020 FINAL ORDER NO. 50740-50743/2020 JUSTICE DILIP GUPTA:
1. In the matter of import of "Melamine"1, originating in or exported from People‟s Republic of China2 to India, the Government of India, in the Ministry of Finance (Department of Revenue), on an application filed by Gujarat State Fertilizers & Chemical Limited3, issued a Customs Notification that was published in the Gazette of India on November 16, 2004 imposing anti-dumping duty on the subject goods for a period of five years. The anti-dumping duty so imposed was continued for a further period of five years by Customs Notification dated February 19, 2010 in the first sunset review that was initiated at
1. subject goods
2. subject country
3. Domestic Industry 4 the instance of the Domestic Industry. The anti-dumping duty was further continued for another period of five years by Customs Notification dated January 28, 2016 in the second sunset review initiated at the instance of the same Domestic Industry. A New Shipper Review contemplated under rule 22 of The Customs Tariff (Identification, Assessment and Collection of Anti-Dumping Duty on Dumped Articles and for Determination of Injury) Rules, 19954 was initiated by a Notification dated January 01, 2018 at the instance of M/s Kuitun Jinjiang Chemical Industry Co. Ltd.5 and Foshan Kaisino Building Material Co.6 of China for determination of individual margins of dumping for them.
2. Rule 22 permits a review to be carried out by the Designated Authority for determining individual margins of dumping for any exporters or producers who have not exported the product to India during the period of investigation provided these exporters or producers show that they are not related to any of the exporters or producers who are subject to anti-
dumping duties on the products. Margin of dumping, in relation to an article, means the difference between its export price and its normal value. Export price, in relation to an article, means the price of the article exported from the exporting country and
4. the 1995 Rules
5. the producer
6. the exporter 5 normal value, in relation to an article, means the comparable price, in the ordinary course of trade, for the like article when destined for consumption it the exporting country. The principles governing the determination of normal value, export price and margin of dumping are contained in Annexure-I to the 1995 Rules. Paragraph 7 of this Annexure-I deals with a non-market economy country and provides three methods for determination of the normal value. The Designated Authority determined the normal value in accordance of the second method that provides for determination of the normal value on the basis of the price from a market economy third country. Qatar was considered by the Designated Authority to be an appropriate market economy third country. The margin of dumping was, accordingly, determined. The Designated Authority, thereafter made a recommendation for imposition of the individual anti-dumping duties by Notification dated June 19, 2019.
3. On the basis of the final findings of the Designated Authority, Customs Notification dated September 06, 2019 was issued by the Government of India for the New Shipper Review that had been initiated, imposing US$ 319.04 per metric ton as individual anti-dumping duty on the exports made by the producer through the exporter and an individual anti-dumping duty of US$ 331.10 per metric ton for the exports made by the producer through any other exporter.
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4. This Customs Notification dated September 06, 2019 and the final findings dated June 19, 2019 of the Designated Authority have been assailed by the producer, the exporter, the Domestic Industry and Sunita Commercial Pvt Ltd.7 in the aforesaid four appeals.
5. Anti-Dumping Appeal No. 52291 of 2019 has been filed by the producer and Anti-Dumping Appeal No. 52292 of 2019 has been filed by the exporter with identical prayers, which are as follows:
"(a) Modify the Final Findings No. F No. 7/11/2017-DGAD dated 19.06.2019 rendered by Respondent No. 2 herein by incorporating individual dumping margin that ought to have been granted in Rule 22 investigation; and
(b) Pass such other and further orders as this Hon‟ble Tribunal may deem fit and proper in the facts and circumstances of the case."
6. Anti-Dumping Appeal No. 50103 of 2020 has been filed by the Domestic Industry with the following prayers:
7. the importer 7 "(a) Set aside the final findings and consequent notification no.
34/2019-Customs (ADD) dated 06.09.2019 qua the Kuitun Jinjiang Chemical Industry Co. Ltd. and Foshan Kaisino Building material Co. Ltd by holding that they are not entitled for individual dumping margin and relegate them to residual duty.
(b) Any other relief as may be considered appropriate by this Hon‟ble Tribunal in the facts and circumstances of the present case."
7. Anti-Dumping Appeal No. 50100 of 2020 has been filed by the importer with the following prayers:
"(a) Adjudge and declare that application filed before the Designated Authority was not maintainable once it is established that the export price claimed by the applicant was fictitiously high; and
(b) Set aside the final findings and Consequent notification no.
34/2019-Customs (ADD) dated 06.09.2019 qua the Kuitun Jinjiang Chemical Industry Co. Ltd. and Foshan Kaisino Building Material Co. Ltd. by holding that they are not entitled for individual dumping margin and relegate them to residual duty.
(c) Any other relief as may be considered appropriate by this Hon‟ble Tribunal in the facts and circumstances of the present case."
8. The anti-dumping duty that was imposed on the subject goods from the subject country for a period of five years in the second sunset review Customs Notification dated January 28, 2016 is as follows:
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S Tariff Description Country of Country of Producer Exporter Amount Unit No. item of goods origin export in US Dollars (1) (2) (3) (4) (5) (6) (7) (8) (9)
1. 2933 Melamine People‟s People‟s Any Any 331.10 MT 6100 Republic of Republic China of China
2. 2933 Melamine Any country People‟s Any Any 331.10 MT 6100 other than Republic those of China subjected to anti-
dumping duty
3. 2933 Melamine People‟s Any Any Any 331.10 MT 6100 Republic of country China other than those subject to anti-
dumping duty
9. The Customs Notification dated September 06, 2019 issued on the basis of the final findings in the New Shipper Review made the following amendments in the aforesaid Table of the Customs Notification January 28, 2016:
"(i) In the Table, after Serial number 3 and the entries relating thereto, the following serial numbers and entries shall be added, namely:-
4. 2933 Melamine People‟s China PR M/s Kuitun M/s 319.04 MT 6100 Republic of Jinjiang Foshan China Chemical Kaisino Indsutry Building Co. Ltd. Material Co. Ltd.
2933 Melamine People‟s China PR M/s Kuitun Any other 331.10 MT
5. 6100 Republic of Jinjiang than M/s China Chemical Foshan Indsutry Kaisino Co. Ltd. Building Material Co. Ltd.
2933 Melamine People‟s Any M/s Kuitun Any other 331.10 MT
6. 6100 Republic of country Jinjiang than M/s China other Chemical Foshan than Indsutry Kaisino China PR Co. Ltd. Building Material Co. Ltd.9
10. It would be seen from the above Table that if the subject goods were exported by a combination of the producer and the exporter, then the anti-dumping duty would be US$ 319.14 per metric ton but if export was made by the producer through any other exporter, then the anti-dumping duty would be US$ 331.10 per metric ton.
11. Shri Jitender Singh, learned Counsel appearing for the producer and the exporter made the following submissions:
(i) Under the scheme of paragraphs 7 and 8 of Annexure-I to the 1995 Rules, the normal value for exporters from non-market economy country has to be determined in terms of paragraph7 only. It is only in the event that a claim is made for market economy treatment under the proviso to paragraph 8(2) that the Designated Authority would be obliged to determine the normal value in terms of paragraphs 1 to 6, subject to the fulfilment of the conditions of paragraph 8(3). Due to this presumption in paragraph 8(2), the provision cannot be read in a manner that a party has to first claim market economy treatment and only when such a treatment is not claimed, that paragraph 7 shall get invoked;
(ii) A plain reading of rule 22 of the 1995 Rules goes to show that the applicant seeking initiation of a new shipper review is mandated to give prima facie information only on the pre-conditions mentioned to prove eligibility. There is no other requirement, either in law or in practice, for the purpose of initiation of a new shipper review. The new shipper was, therefore, not required to give any information 10 about normal value or export price at the time of making the application;
(iii) Even the formats of questionnaire response do not seek any information for any determination in terms of paragraph 7. The market economy questionnaire only seeks information to rebut the presumption contained in the proviso to paragraph 8(2) for those exporters who seek their individual dumping margin based on their own normal value after application of paragraphs 1 to 6. Thus, the Designated Authority is obligated in law to select the market economy third country, whenever deemed appropriate.
(iv) While initiating a new shipper review investigation, the Designated Authority is obliged, due to the presumption contained in paragraph 8(2), to seek views of parties on the approach that is proposed for determination of normal value for non-market economy country in terms of obligations contained in paragraph 7 of Annexure I. This obligation was tested in the case of Shenyang Matsushita S. Battery Co. Ltd. vs. Exide Industries Ltd.8 where the Supreme Court held that if there is a flaw in the procedure, the whole procedure has to start from scratch indicating thereby that the proposal about selection of market economy third country is required to be made in the initiation notification itself;
(v) In terms of the first part of paragraph 7 of Annexure I to the 1995 Rules, the Designated Authority could not have taken Qatar as a surrogate country for China as this determination did not fulfil the criteria
8. (2005) 3 SCC 39 11 provided in paragraph 7 of Annexure I. The approach adopted by the Designated Authority while selecting a surrogate country in the instant case cannot be said to be „reasonable‟ in terms of the Anti-dumping Agreement. Qatar could also not have been taken as a surrogate country at the fag end of the investigation. The level of development of Qatar is not comparable to that of China nor the level of development of industry in Qatar and China are similar. The disclosure statement also does not contain any evidence indicating why Qatar would be an appropriate surrogate country. In the absence of such data and information, the producer and the exporter were prevented from offering any comments. The Designated Authority erroneously stated that the Qatar is a non-dumped source.
(vi) The Designated Authority breached the principles of natural justice for the following reasons:
a. No hearing was granted with respect to the issue of taking Qatar as a surrogate country.
b. The calculation of the dumping margin was not provided.
c. The DGCI&S data relied by the Designated Authority to compute normal value were not provided.
d. Rejoinder of the Domestic Industry was not provided.
(vii) The Designated Authority acted in contravention of section 9A of the Customs Tariff Act, 19759 by taking the export price of the producer, instead of the export price of the exporter.
9. the Tariff Act 12
12. Ms. Reena Khair, learned Counsel appearing for the Domestic Industry, however, made the following submissions:
(i) The primary obligation in any investigation is on the foreign exporter to establish its normal value, export price and dumping margin, based on its records, and other information relevant for determination of normal value. In the event, the records and information is not provided or are found to be unreliable, the Designated Authority is at liberty to determine the margin of dumping, based on facts available to it. The obligation in a new shipper review is even greater than any other type of investigation, since the investigation is carried out at the instance of a new exporter who claims that the residual duty levied does not accurately represent the margin of dumping for its export to India. It was, therefore, necessary for the Chinese exporter to make a claim and to lead evidence in support of its claim for export price, normal value and dumping margin. Thus, it is in the application or in the course of investigation that the foreign exporter is required to make a specific claim as to its dumping margin.
This claim can then be contested by the opposing parties and the Designated Authority can make a determination after examining all aspects of the matter. The Chinese exporter, however, maintained a deliberate silence on the dumping margin. The scope of investigation is, hence confined to the information supplied by the parties. Failure to supply the necessary information itself implies that the Chinese exporter is not at all entitled to individual dumping margin under rule 22 of the 1995 Rules. Even otherwise, having failed to provide the relevant 13 information, the Chinese exporter lost the right to contest the final findings on this aspect;
(ii) The Chinese exporter had neither offered information or evidence nor made any declaration or statement regarding its position vis-a-vis the different options available under paragraph 7 of Annexure I to the 1995 Rules. It is towards the end to the investigation that it made a whisper of a suggestion that the last option, namely determination of normal value on the basis of the cost of production of the subject goods in India may be adopted. Even this suggestion cannot be considered, as it is not supported by any information or evidence;
(iii) It is apparent from the facts and circumstances of the present case that the Designated Authority granted adequate opportunity to the Chinese exporter to put forward its objections. In any case, there is no prejudice to the Chinese exporter, as they have neither provided any material for selection of any other market economy third country nor any other reasonable basis for computation of normal value, either during the course of the investigation or even in the memo of appeal.
(iv) The submission that the third country was to be selected by the Designated Authority at the stage of initiation itself is incorrect. At the stage of initiation in a new shipper review, even the exports, which are the subject matter of investigation, have not taken place. It is only after the exports are completed and the responses to the Exporter questionnaire and Market Economy Treatment Questionnaires are filed that the Designated Authority effectively starts its investigation;
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(v) In view of the fact that the Chinese exporter had not furnished the relevant information to the Designated Authority in terms of section 9A(6A) of the Tariff Act read with rule 6(8) of the 1995 Rules and Annexure I to the 1995 Rules, the Designated Authority correctly exercised its powers in determination of the normal value on a reasonable basis, based on facts available on record. The only fact available on the record of the Designated Authority was the price of imports from an un-dumped source, that is Qatar, which the Designated Authority found to be representative of the price paid or payable in India for the subject goods. The export price of any other market economy third country would have been more detrimental to the producer or the exporter;
(vi) The submission that the level of development of Qatar is not similar to that of China is fallacious. The level of development is relevant only if the domestic sale price or cost of production of a market economy third country is adopted where the level of development affects the price and costs. The price in international trade is dependent on the demand and supply in the international market and is not affected by the level of development of the supplier country.
(vii) Neither was it permissible nor advisable for the Designated Authority to fix a prospective period of investigation as it gives the Chinese exporter an opportunity to stage manage the affairs. The fact that the entire exercise is stage managed, is evident from the fact that the importers in India have been indulging in mis-declaration of value. Further, the quantity exported is also not so significant so as to remove the risk of manipulation. The fixing of a prospective period of investigation was, therefore, 15 wholly unjustified, especially since the Chinese exporter had made exports in 2017, which exports have not been taken into consideration for determination of its dumping margin.
13. Shri Ajay Sharma & Ms. Rupali Sharma, learned Counsel appearing for the importer made the following submissions:-
(i) The Designated Authority should not have recommended a lower anti-dumping duty in the New Shipper Review since the genuineness/ bonafide of export price, invoice and conduct of the new shipper was under a cloud. In fact, the application submitted by the New Shipper applicant should have been rejected;
(ii) A higher export price was claimed by the New Shipper in the application in order to seek a lower or no anti-dumping duty. Infact, the product may not actually have been sold as „bills of entry‟ were not submitted by the exporter;
(iii) The Exporter has dealings with only two importers in India, namely, M/s Exim Incorporation and M/s Sanjay Chemicals, who imported melamine from the New Shipper at a much higher price than the price which the other Chinese producers were offering.
M/s Exim Incorporation is also named in DRI investigation as it was found to have been over invoicing. There appears to be a cartel of New Shipper (the producer & exporter) with these two Indian Importers to achieve their target to secure lower anti-dumping duty with manipulated and fictitious documents/billing; and 16
(iv) The importer has been regularly importing melamine from China. The price difference in the melamine supplied by different Chinese suppliers is hardly 5 to 10 US$ per metric ton. The export price claimed by the exporter is fictitiously high as there is difference of more than 100 to 200 US$ per metric ton in the prices at which the exporter has exported the product to India and the price at which other Chinese suppliers have supplied the product to India market. However, there is no significant difference in the selling price of melamine in the Indian domestic market vis-à-vis the product of other exporters. Such a significant difference is unexplained and gives an impression of manipulation.
14. Shri Ameet Singh, learned counsel appearing for the Designated Authority made the following submissions:-
(i) It was for the New Shipper applicants to provide evidence for determination of the normal value. The application did not state that it was forgoing its claim for the market economy treatment and it wanted the Designated Authority to determine the normal value on the basis of non-market economy;
(ii) The contention of the New Shipper that the Designated Authority should have chosen a surrogate country at the time of initiation of the investigation or prior to the oral hearing is only to cover up their failure or initial silence in not informing the Designated Authority that it was not claiming market economy treatment or suggesting a methodology for determination of normal value. The Designated Authority was, therefore, justified in disclosing the proposed normal value methodology at the first 17 opportunity when the disclosure statement was provided and a reasonable time was given to respond;
(iii) The Designated Authority had to choose an option available under paragraph 7 of Annexure-I of the 1995 Rules;
(iv) The Designated Authority had noted that the volume of imports from Qatar was next to China and other available options were not appropriate. Even if the submission of the New Shipper that Qatar cannot be assumed to be a non-dumped source is considered to be true, then too, this will not cause any prejudice to the New Shipper;
(v) The contention of the producer that it was not provided with the normal value computation is misleading. A disclosure on ex-factory export price was provided to the producer. The „normal value‟ computation was clearly mentioned in the disclosure statement to which the producer responded by submitting that adjustments of higher freight, adjusting anti-dumping duty on China and 1.5% commission be also considered. The information adopted by the Designated Authority was publicly available and could be accessed by any party. The import price from Qatar and all adjustments that were considered for determination of normal value were stated in the disclosure statement;
(vi) The methodology adopted by the Designated Authority for determination of export price is in accordance with section 9A(6A) of the Tariff Act which provides that the margin of dumping in relation to an article, exported by an exporter or producer, under inquiry under sub-section (6) shall be 18 determined on the basis of records concerning normal value and export price maintained, and information provided, by such exporter or producer;
and
(vii) The price at which imports were much made by the importers from the applicant producer/exporter were much higher than the price of other importers from China. The Domestic Industry and other importers strongly disputed the price at which the imports were made, alleging established past history of over invoicing and DRI investigation. Since the import price from applicant producer/exporter from China were noted to be higher than the other importers, the Designated Authority adopted the fundamental approach of considering the price of goods from the producer to exporter to overcome this challenge.
15. The submissions advanced by the learned Counsel for the parties have been considered.
16. In order to appreciate the contentions advanced on behalf of the parties, it would be appropriate to refer to the relevant provisions of the Tariff Act and the 1995 Rules relating to anti- dumping duty and determination of margin of dumping.
17. Section 9A of the Tariff Act deals with anti-dumping duty on dumped articles. The relevant provisions contained in sub-sections (1), (5) and (6A) of section 9A are reproduced below:-
"9 A. Anti -Dumping Duty on Dumped Articles (1) Where any articles is exported by an exporter or producer from any country or territory (hereinafter in 19 this section referred to as the exporting country or territory) to India at less than its normal value, then, upon the importation of such article into India, the Central Government may, by notification in the Official Gazette, impose an anti-dumping duty not exceeding the margin of dumping in relation to such article.
Explanation- For the purpose of this section, -
(a) "margin of dumping", in relation to an article, means the difference between its export price and its normal value;
(b) "export price", in relation to an article, means the price of the article exported from the exporting country or territory and in cases where there is no export price or where the export price is unreliable because of association or a compensatory arrangement between the exporter and the importer or a third party, the export price may be constructed on the basis of the price at which the imported articles are first resold to an independent buyer or if the article is not resold to an independent buyer, or not resold in the condition as imported, on such reasonable basis as may be determined in accordance with the rules made under sub-section (6);
(c) "normal value", in relation to an article, means-
(i) the comparable price, in the ordinary course of trade, for the like article when destined for consumption in the exporting country or territory as determined in accordance with the rules made under sub-section (6); or
(ii) when there are no sales of the like article in the ordinary course of trade in the domestic market of the exporting country or territory, or when because of the particular market situation or low volume of the sales in the domestic market of the exporting country or territory, such sales do not permit a proper comparison, the normal value shall be either-
(a) comparable representative price of the like article when exported from the exporting country or territory to an appropriate third country as determined in accordance with the rules made under sub-section (6); or
(b) the cost of production of the said article in the country of origin along with reasonable addition for administrative, selling and general costs, and for profits, as determined in accordance with the rules made under sub-section (6):
Provided that in the case of import of the article from a country other than the country of origin and where the article has been merely transhipped through the country of export or such article is not produced in the 20 country of export or there is no comparable price in the country of export, the normal value shall be determined with reference to its price in the country of origin."
xxxxx xxxxx xxxxx (5) The anti-dumping duty imposed under this section shall, unless revoked earlier, cease to have effect on the expiry of five years from the date of such imposition:
Provided that if the Central Government, in a review, is of the opinion that the cessation of such duty is likely to lead to continuation or recurrence of dumping and injury, it may, from time to time, extend the period of such imposition for a further period of five years and such further period shall commence from the date of order of such extension:
Provided further that where a review initiated before the expiry of the aforesaid period of five years has not come to a conclusion before such expiry, the anti- dumping duty may continue to remain in force pending the outcome of such a review for a further period not exceeding one year.
xxxxx xxxxx xxxxx (6A) The margin of dumping in relation to an article, exported by an exporter or producer, under inquiry under sub-section (6) shall be determined on the basis of records concerning normal value and export price maintained, and information provided, by such exporter or producer:
Provided that where an exporter or producer fails to provide such records or information, the margin of dumping for such exporter or producer shall be determined on the basis of facts available. "
18. Rule 18(1) of the 1995 Rules deals with levy of duty and is reproduced:
"18. Levy of duty.-
(1) The Central Government may, within three months of the date of publication of final findings by the designated authority under rule 17, impose by notification in the Official Gazette, upon importation into India of the article covered by the final finding, anti-dumping duty not exceeding the margin of dumping as determined under rule 17."21
19. Rule 22 of the 1995 Rules deals with margin of dumping for exporters not originally investigated. It is reproduced below:
"22. Margin of dumping, for exporters not originally investigated.-
(1) If a product is subject to anti-dumping duties, the designated authority shall carry out a periodical review for the purpose of determining individual margins of dumping for any exporters or producers in the exporting country in question who have not exported the product to India during the period of investigation, provided that these exporters or producers in show that they are not related to any of the exporters or producers in the exporting country who are subject to the antidumping duties on the product.
(2) The Central Government shall not levy anti-dumping duties under sub-section (1) of section 9A of the Act, on imports from such exporters or producers during the period of review as referred to in sub-rule (1) of this rule:
Provided that the Central Government may resort to provisional assessment and may ask a guarantee from the importer if the designated authority so recommends and if such a review results in a determination of dumping in respect of such products or exporters, it may levy duty in such cases retrospectively from the date of the initiation of the review."
20. Rule 10 of the 1995 Rules deals with determination of normal value, export price and margin of dumping and it is as follows:
"10-Determination of normal value, export price and margin of dumping-
An article shall be considered as being dumped if it is exported from a country or territory to India at a price less than its normal value and in such circumstances the designated authority shall determine the normal value, export price and the margin of dumping taking into account, inter alia, the principles laid down in Annexure-I to these rules."
21. Annexure-I to the 1995 Rules deals with the principles governing the determination of normal value, export price and margin of dumping. Rules 1 to 6 deal with market economy 22 countries, while rule 7 deals with non-market economy countries. Rules 7 and 8 are reproduced below:
"7. In case of imports from non-market economy countries, normal value shall be determined on the basis of the price or constructed value in the market economy third country, or the price from such a third country to other countries, including India or where it is not possible, or on any other reasonable basis, including the price actually paid or payable in India for the like product, duly adjusted if necessary, to include a reasonable profit margin. An appropriate market economy third country shall be selected by the designated authority in a reasonable manner, keeping in view the level of development of the country concerned and the product in question, and due account shall be taken of any reliable information made available at the time of selection. Accounts shall be taken within time limits, where appropriate, of the investigation made in any similar matter in respect of any other market economy third country. The parties to the investigation shall be informed without any unreasonable delay the aforesaid selection of the market economy third country and shall be given a reasonable period of time to offer their comments.
8(1) The term "non-market economy country" means any country which the designated authority determines as not operating on market principles of cost or pricing structures, so that sales of merchandise in such country do not reflect the fair value of the merchandise, in accordance with the criteria specified in sub-paragraph(3).
(2) There shall be a presumption that any country that has been determined to be, or has been treated as, a non-market economy country for purposes of an anti-dumping investigation by the designated authority or by the competent authority of any WTO member country during the three year period preceding the investigation is a nonmarket economy country.
Provided, however, that the non-market economy country or the concerned firms from such country may rebut such a presumption by providing information and evidence to the designated authority that establishes that such country is not a non-market economy country on the basis of the criteria specified in sub-paragraph (3).
(3) The designated authority shall consider in each case the following criteria as to whether:
(a) the decisions of the concerned firms in such country regarding prices, costs and inputs, including raw materials, cost of technology and labour, output, sales and investment, are made in response to market signals reflecting supply and demand and without significant State interference in this regard, and whether costs of major inputs substantially reflects market values;
(b) the production costs and financial situation of such firms are subject to significant distortions carried over 23 from the former non-market economy system, in particular in relation to depreciation of assets, other write-offs, barter trade and payment via compensation of debts;
(c) such firms are subject to bankruptcy and property laws which guarantee legal certainty and stability for the operation of the firms, and
(d) the exchange rate conversations are carried out at the market rate by the firms.
Provided, however, that where it is shown by sufficient evidence in writing on the basis of the criteria specified in this paragraph that market conditions prevail for one or more such firms subject to anti-dumping investments, the designated authority may apply the principles set out in paragraph 1 to 6 instead of the principles set out in paragraph 7 and in this paragraph. (4) Notwithstanding, anything contained in sub-paragraph (2), the designated authority may treat such country as market economy country which, on the basis of the latest detailed evaluation of relevant criteria, which includes the criteria specified in sub paragraph (3), has been, by publication of such evaluation in a public document, treated or determined to be treated as a market economy country for the purpose of anti dumping investigations, by a country which is a Member of the World Trade Organization."
22. A perusal of section 9A of the Tariff Act indicates if any article is exported from any country to India, at less than its normal value, then upon the importation of such article into India, the Central Government can impose an anti-dumping duty not exceeding the margin of dumping. Margin of dumping has been defined to mean the difference between the export price and the normal value. The export price means the price of the article exported from the exporting country. Normal value has also been defined in Explanation (c) to section 9A(1) to mean interalia the comparable price for the like article when destined for consumption in the exporting country determined in accordance with the 1995 Rules. Under sub-section (5) of 24 section 9A, the anti-dumping duty shall, unless revoked earlier, cease to have effect on the expiry of five years from the date of such imposition. However, if the Central Government, in a review is of the opinion that the cessation of such duty is likely to lead to continuation or recurrence of dumping and injury, it may, from time to time extend the period of such imposition for a further period of five years.
23. The determination of normal value, export price and the margin of dumping is done in accordance with the principles laid down in Annexure I to the 1995 Rules. Paragraphs 1 to 6 enumerate the principles for determination of the normal value, export price and margin of dumping for a market economy country, while paragraph 7 deals with the determination of normal value in case of imports from a non-market economy country. The term „non market economy country‟ has been defined in paragraph 8 to mean any country which the Designated Authority determines as not operating on market principles of cost or pricing structures, so that the sales of merchandise in such country do not reflect the fair value of the merchandise in accordance with the criteria specified in sub- paragraph (3) of paragraph 8.
24. In the case of imports from a non market economy country, the normal value is determined in the following manner:
(a) On the basis of the price or constructed value in the market economy third country Or 25
(b) The price from such a third country to other country, including India.
Or
(c) Where it is not possible, on any other reasonable basis, including the price actually paid or payable in India for the like product, duly adjusted if necessary, to include a reasonable profit of margin.
25. An appropriate market economy third country for the purpose of paragraph 7 of Annexure-I to the 1995 Rules has to be selected by the Designated Authority in a reasonable manner. The parties to the investigation have also to be informed, without any unreasonable delay, the aforesaid selection of the market economy third country and they have to be given a reasonable period of time to offer their comments.
26. Paragraph 8 (2) provides that there shall be a presumption that any country that has been determined to be, or has been treated as, a non market economy country for the purposes of an anti-dumping investigation by the Designated Authority or by the Competent Authority of any World Trade Organization member country during the three year period preceding investigation is a non market economy country. However, such a presumption can be rebutted by providing information and evidence to the Designated Authority to establish that such a country is not a non-market economy country on the basis of the criteria specified in sub paragraph (3) of paragraph 8. 26
27. It is in the light of the aforesaid provisions that the contentions advanced on behalf of the parties have to be examined.
28. As noted above, „melamine‟ originating or exporting from China had been subjected to anti-dumping duty for a period of five years by Customs Notification dated November 16, 2004. This anti-dumping duty was continued for a further period of five years by Customs Notification dated February 19, 2010 in the first sunset review and thereafter for another period of five years by Customs Notification dated January 28, 2016 in the second sunset review. The producer (Kuitun Jinjiang Chemical Industry Co. Ltd.) from China and its exporter (Foshan Kaisino Building Material) from China filed an application under rule 22 of the 1995 Rules contending that they had not exported the product to India during the period of investigation and, therefore, the Designated Authority should carry out a review for the purpose of determining individual margins of dumping for them. In the said application dated June 12, 2017 it was stated that Kuitun Jinjiang Chemical Industry Co. Ltd was a producer of melamine from China and it had appointed Foshan Kaisino Building Material as its related exporter to export the product concerned to India. It was also stated that the producer or its related exporter had not exported the product to India during the original period of investigation or during the first sunset review investigation or the second sunset review investigation. After making reference to 27 rule 22 of 1995 Rules, the following prayer was made in the application:-
"(i) Initiate the New Shipper Review in terms of Rule 22 of Customs Tariff (Anti-dumping) Rules 1995 for the purpose of determining an individual dumping margin for the applicant exporter;
(ii) Consider 1st April, 2017 to 31st March 2018 as the period of investigation for the New Shipper Review. In case Authority decides to consider any other period as the period of investigation for the New Shipper Review, the same will be acceptable to us; and
(iii) Recommend Central Government for restoring to provisional assessment of the PUC exported by the applicant exporter based on the surety bond furnished by the importer till the conclusion of the New Shipper Review investigation."
29. The exporter also undertook to provide the necessary information in the prescribed formats soon after the period of investigation fixed by the Designated Authority.
30. The Designated Authority, on being prima facie satisfied that the conditions set out in rule 22 of the 1995 Rules, were met by the New Shipper, decided to initiate New Shipper Review investigation by Notification dated January 1, 2018 for determination of individual dumping margin for the producer and the exporter. The period of investigation for the purpose of this New Shipper Review was notified to be from January 1, 2018 up to December 31, 2018. It was further stated that all information relating to the review should be sent in writing so as to reach the Designated Authority not later than 40 days from the date of completion of the period of investigation but if the information was not received within the prescribed time limit or the 28 information received was incomplete, the Designated Authority could record its findings on the basis of the facts available before a Designated Authority in accordance with the 1995 Rules. It was also stated that any interested party could inspect the public file containing non-confidential version of the evidence submitted by the other interested parties.
31. The procedure followed by Designated Authority, after issuance of the initiation Notification, has been stated in the final findings of the Designated Authority. It has been mentioned that the Designated Authority forwarded a copy of the initiation notification to the New Shipper Review applicants with a copy of the exporter‟s questionnaire and gave them an opportunity to make their views known in writing, and to file the relevant data in the prescribed questionnaire after the expiry of the period of investigation. The Designated Authority also forwarded a copy of the initiation Notification to the Embassy of China and to the known domestic producers in India. It has also been mentioned that in response of the initiation notification, the questionnaire response was filed by the exporter and the producer but they did not claim market economy status. The Designated Authority held a hearing on February 14, 2019 to provide an opportunity to the interested parties to present information orally. The interested parties were also allowed time to present rejoinders on the views/ information provided in writing by the other interested parties. The disclosure statement was issued by the Designated Authority on May 22, 2019 and comments were 29 invited from the interested parties by June 3, 2019. However, in view of the request made, the time to file the comments on the disclosure statement was extended up to June 07, 2019. After examination of the comments, the Designated Authority made a recommendation for imposition of anti-dumping duties.
32. It would be necessary to reproduce the relevant portions of the final findings of the Designated Authority rendered in the New Shipper Review undertaken under rule 22 of the 1995 Rules under the various heads.
33. The Designated Authority computed the normal value in the final findings after a consideration of the comments submitted by the interested parties. They are summarised as follows:
(i) The producer/ exporter seeking New Shipper Review did not file the Market Economy Treatment questionnaire to claim Market Economy Status, even though the producer/ exporter had filed the application for grant of an individual dumping margin under rule 22.
(ii) Therefore, resort has to be taken to paragraph 7 of the Annexure-I of the 1995 Rules to consider an appropriate normal value methodology.
(iii) None of the Interested Parties including the producer/ exporter suggested a market economy third country for considering the price or constructed value in such a country.
The producer/ exporter, while choosing not to claim market economy treatment, at the same time did not suggest any market economy third country to consider applying the first part of paragraph 7, either in the petition or when questionnaire was filed.
(iv) It was only post oral hearing in February, 2019 that the producer/ exporter suggested adoption of constructed normal value methodology based on cost of production of India industry and the domestic Industry suggested adoption of imports from a third country i.e. Qatar for computing the normal value.
(v) In a New Shipper Review, it is only after producer/ exporter and other interested parties file their submissions/ responses that the Designated Authority could have provided its 30 approach on adoption of the methodology for determination of normal value. The Designated Authority disclosed its approach in the disclosure statement dated May 22, 2019 and on request of the producer/ exporter also extended time to file comments till June 7, 2019. Thus, reasonable opportunity had been provided to the interested parties, including the producer/ exporter, to respond to the choice of methodology to determine the normal value.
(vi) The objections of the producer/ exporter stated that the Designated Authority had not followed the established process to select surrogate country, which should have been done at the beginning of the investigation. The Designated Authority reiterates that New Shipper Review, being an investigation on a prospective period of investigation of 1 year and with completion period of 18 months, the count down starts only after the response is filed by the producer/ exporter. The suggestions on normal value computation were made both by producer/ exporter and the domestic industry post oral hearing which the Designated Authority examined, keeping in view the prescribed hierarchy in paragraph 7 of Annexure -1 of the 1995 Rules.
(vii) As regards Qatar not being an appropriate country for determination of normal value in view of the level of development being different, the Authority holds that Qatar exports to India are next to China in terms of quantum. The „level of development‟ comparison as stated in paragraph 7 assumes relevance if prices and constructed value in Qatar is considered. Qatar‟s export prices to India are not contingent on the level of development of Qatar but is established by benchmarking the price of the domestic industry and other exporting countries to India. The last portion of paragraph 7 also requires consideration of price paid or payable in India. As Qatar happens to be a non dumped source with volume next to the subject country which is subjected to the levy of anti-dumping duty to correct the unfair trade, its choice is appropriate as per paragraph 7 of Annexure 1 to the 1995 Rules.
(viii) The Designated Authority, therefore, confirms the methodology on normal value computation as stated in the disclosure and after allowing adjustments on ocean freight, port expenses, inland freight, credit cost, ocean insurance bank charges and additionally commission (1.5% of FOB) as submitted by the producer/ exporter as per its consistent practice The Designated Authority, therefore, confirms the normal value methodology by incorporating aforesaid adjustments.
(ix) The export price would be the ex-factory price of the producer to the exporter. This would take care of the concern of the domestic industry and the importer regarding overpricing by the exporter."
34. The conclusions of the Designated Authority in the final findings are as follows:
31
"32. Conclusions i. The Authority holds that quantity of export by the producer is quite reasonable to reference this sales to the exporter i.e M/s Foshan Kaisino Building Material Co., Ltd. (exporter) to evaluate the ex-factory price of export destined to India. ii. The producer has dumped the subject goods during the POI. iii. As per rule 22, the extent of dumping margin as stated above in para 30 is awarded to the producer i.e. M/s Kuitun Jinjiang Chemical Industry Co. Ltd. (Producer) as the Anti-dumping duty."
35. The Designated Authority, thereafter made recommendation for imposition of the same anti-dumping duties that are contained in the Table to Customs Notification, which is contained in paragraphs 8 and 9 of this order.
36. It needs to be noted that unlike in an original investigation or a sunset review carried out for determination of anti-dumping duty at the behest of the Domestic Industry, in a New Shipper Review the individual margins of dumping are determined by the Designated Authority at the behest of such producers/ exporters who have not exported the product to India during the period of investigation in the original or sunset review. Thus, burden lies on such producers/ exporters and not on the Domestic Industry to substantiate facts by evidence for determination of individual margins of dumping for the product that is already subjected to anti-dumping duty either because of the original investigation or the sunset review. The margin of dumping, in relation to an article, means the difference between its export price and its normal price. The producers / exporters, therefore, have to substantiate what would be the export price of the article and what would be its normal value so that the Designated Authority 32 can determine whether individual margins of dumping should be levied for the producers/ exporters. The principles for determination of normal value, export price and margins of dumping are contained in Annexure-I to the 1995 Rules. Paragraphs 1 to 6 of Annexure-I relate to determination of normal value in the case of a market economy country, while paragraph 7 relates to determination in the case of a non-market economy country.
37. The application under rule 22 of the 1995 Rules for initiation of a New Shipper Review was filed on June 12, 2017 by the producer. Though it does mention that the producer satisfies the conditions contained in rule 22 that the producer or its related exporter have not exported the product under consideration to India during the period of investigation of the sunset review and that the producer or its related exporter are not related to any of the producers / exporters in exporting country that were subjected to anti-dumping duties on the product under consideration and that the period of investigation should be April 01, 2017 to March 31, 2018, but there is no averment that the determination of individual margin of dumping should be done treating the subject country as a market economy country or a non- market economy country. The questionnaire that was filed by the producer / exporter at the end of the period of investigation on February 02, 2019 also does not mention whether the exporting country should be treated as a market economy country or a non-market country. Even if the 33 producer/ exporter were under an impression that the subject country would be treated as a non-market economy country by the Designated Authority, then too they should have atleast indicated which specific criteria contemplated under paragraph 7 should be adopted by the Designated Authority for determination of the normal value with reasons but that was not done.
38. The records, however, reveal that even during the course of oral hearing on February 14, 2019, the producer / exporter did not suggest either of the three criteria set out in paragraph 7 of Annexure-I for the determination of the normal value. In fact, it is when the Domestic Industry in the submissions filed after the oral hearing suggested that the normal value should be determined under paragraph 7 on the basis of the price from a market economy country to other countries, including India that the producer and the exporter in their rejoinder submissions stated that the normal value should be determined on the basis of the cost of production of the subject goods in India, which is the third criteria stipulated in paragraph 7.
39. It is in such circumstances, that Designated Authority made the following statements in the disclosure;
"a. xxxxxxxxxxx b. xxxxxxxxxxx c. xxxxxxxxxxx Para 7 lays down hierarchy for determination of normal value and provides that normal value shall be determined on the basis of the price or constructed value in a market economy third country, or the price from such a third country to other countries, including India, or where it is not possible, on 34 any other reasonable basis, including the price actually paid or payable in India for the like product, duly adjusted if necessary, to include a reasonable profit margin. Thus, the Authority notes that the normal value is required to be determined having regard to the various sequential alternatives provided under Annexure 7;
d. xxxxxxxxxxxxx e. There is no information provided by any Interested Party to consider application of the first proviso of para 7 nor any material is available with the Authority for the same. However as regards the next proviso in para 7, the Authority notes that information on import volume and prices of subject goods from countries other than China during POI is available from the DGCIS data. It is noted that while China accounts for 30303 MT, 44% of total imports of subject goods during POI, the next highest quantity of imports are from Qatar of 16479 metric ton constituting a share of 24.20% at a average CIF of 1450.48$ per metric ton. The imports from Germany, UAE, and Japan are 12% (CIF 1530$ per metric ton); 7%(CIF 1532$ per metric ton) and 3% (CIF1524$ per metric ton) respectively.
f. Qatar being a non subject country with no investigation of AD under way or AD measure in force and with import volume from Qatar being quite significant, the CIF price is thus representative of price payable in India. Also since import price of China is corrected by the existing ADD, the import price from Qatar is not impacted by any dumped price from China. The Authority notes that this option of para 7 to construct the normal value of subject goods is appropriate and is representative of normal value of the subject goods. To evaluate the normal value, the Authority would make appropriate adjustments on various elements like ocean freight, port expenses, inland freight, credit cost, marine insurance and bank charges as per its consistent practice adopting norms as is done consistently in similar/analogous situations for arriving at an ex-factory price. The same is proposed to be compared with exfactory export price of the producer i.e. M/s Kuitun Jinjiang Chemical Industry Co. Ltd. at the same level of trade in accordance with the rule 6(i) of Annexure 1 of AD rules. The Authority proposes to consider adjustments on to an extent of ; Ocean freight (40$per metric ton), Ocean insurance (0.5% of CIF), 35 Inland freight (1% of FoB), Port handling (1% of FoB), Credit cost/Bank charges (1% of FoB). The next in the hierarchy of the options as per para 7 is price actually paid or payable in India for the like product duty adjusted if necessary to include a reasonable profit margin, which the Authority notes needs to be considered only if the option stated above was not available.
g. The Authority notes that as per para 7 of Annexure 1 of AD rules, reasonable opportunity is to be provided to the interested parties on selection of the third market economy country. The Authority notes that in the ongoing NSR investigation, the time limit to complete the case has been fixed as 30/6/2019 in view of the Hon'ble High Court's order in Writ Appeal No. 412 to 414 of 2018. The exporter was provided a prospective POI of 1 year till 31/12/2018. The questionnaire response was filed by the producer / exporter on 8/2/2019. In the rejoinder submissions dated 28/2/2019, the producer / exporter stated that Authority may determine normal value on the basis of the cost of production of the subject goods produced in India methodology for constructing normal value for China while the Domestic Industry claimed market economy third country export price to India. The Authority undertook desk study of the applicant‟s questionnaire response to verify the data filed by the exporter and the producer. The Authority holds that in case of a NSR investigation which provides a prospective POI of 1 year, the time to respond to the option of market economy third country selection is quite reasonable with the case completion dated being 30/06/2019 as stated above.
(emphasis supplied)
40. The Domestic Industry filed comments to the disclosure statement of the Designated Authority. It was stated by it that by reason of prospective period of investigation, the applicant has been able to manipulate and doctor the petition by exporting to India at higher prices since the two importers importing the 36 material from the applicants have imported at relatively higher prices than other importers. It was also stated that the exports made by the applicants were merely 2 to 3 percent of the total imports from China to India, which clearly shows that these transactions were stage managed. The applicants had infact claimed individual dumping margin without any specific claim with evidence for determination of normal value and the Domestic Industry had no obligation to come to the rescue of the applicants for providing information relevant to determination of normal value. It was also clearly stated that since the applicants had made a request for determination of individual margins of dumping, the obligation was on the applicants to provide the relevant information for determination of the normal value with evidence. It was also stated that the Designated Authority had relied upon the Qatar import price to India as per the DGCIS data, which contained reliable information and was being consistently used by the Designated Authority.
41. The producer/ exporter also filed comments to the disclosure statement. It was stated that the Designated Authority had for the first time disclosed in the disclosure that Qatar would be considered as a third country market, but details of the level of development of Qatar were not provided and that the most suitable way of calculation of normal value in the New Shipper Review was to adopt the same methodology that was adopted by the Designated Authority for determination of the normal value in the original or the sunset review investigation in 37 this case. It was also stated that the level of development of Qatar was not comparable to that of China.
42. Taking into consideration the comments filed by the parties to the disclosure statement, the Designated Authority determined the normal value on the basis of the second criteria contained in paragraph 7.
43. It is in the light of the aforesaid facts that the contentions of the producer / exporter regarding violation of the principles of natural justice has to be examined. It is by now well established that the principles of natural justice are not contained in a straight jacket and a litigant cannot complain of the violation of the principles of natural justice if the litigant himself fails to avail opportunity to bring the correct facts to the notice of the authority.
44. In the present case, it was the producer/exporter who had filed an application for determination of individual margins of dumping for them since anti-dumping duty on the subject goods from the subject country had already been levied earlier in the original investigation and the two sunset reviews. The producer/exporter came out with a case that they had not exported the product to India during the original period of investigation or the sunset reviews and, therefore, instead of imposing the anti-dumping duty as was contained in the Customs Notification dated January 28, 2016 issued on the basis of the second sunset review, individual margins of dumping should be 38 determined for them. It was for the producer / exporter, as noticed above, to have at the initial stage itself not only informed the Designated Authority whether the normal value should be determined on the basis of a non- market economy country or market economy country and which of the three options available under paragraph 7 of Annexure-I to the 1995 Rules should be adopted by the Designated Authority, but for reasons best known to the producer/ exporters, such information was not divulged to the Designated Authority. In such circumstances it does not lie in the mouth of the producer/ exporter to contend that hearing should have been granted to the producer / exporter by the Designated Authority before the issue of the disclosure for taking Qatar as a surrogate country. The disclosure statement clearly indicates reasons for selecting Qatar and it was always open to the producer / exporter to raise grievance about it in response to the disclosure statement. Reference to the DGCIS data was made in the disclosure statement and therefore, such data could have been easily obtained by the producer / exporter. Though it is correct that a copy of the rejoinder submission should have been exchanged between the interested parties, but what is seen is that reference of the details of the rejoinder submissions have been provided in the disclosure statement. Therefore, no prejudice can be said to have been caused to the producer / exporter on this account.
45. The next issue that arises for consideration is regarding the determination of the normal value under the second option 39 provided for in paragraph 7 of Annexure-I to the 1995 Rules. The Designated Authority noted that the information on import volume and prices of such goods from counties other than China during the period of investigation was available on the DGCIS data. It noted that while China accounted for 30303 metric tons, which would be 44 per cent of the total imports of subject goods during the period of investigation, the next highest quantity of import were from Qatar to the extent of 16479 metric tons, constituting 24.20 per cent at an average of 1450.48 per metric ton. The Designated Authority also noted that neither anti- dumping duty was imposed on any import from Qatar nor an anti-dumping investigation was under way and, therefore, as import volume from Qatar was quite significant, the price from Qatar would be representative of price payable in India.
46. In this regard the contention of the producer and the exporter is that the third country should have been selected by the Designated Authority at the stage of initiation itself. This submission cannot be accepted because as noticed above, the producer or the exporter did not even indicate which of the three criteria stipulated in the paragraph 7 of the Annexure-I of the 1995 Rules should have been adopted for determination of the normal value.
47. There is also no error in the determination of the normal value by the Designated Authority by resorting to the second method mentioned in paragraph 7 of Annexure-I to the 1995 40 Rules as none of the parties had suggested applying the first criteria set out in paragraph 7. The Designated Authority noted that exports from Qatar are next to China in terms of quantum as China accounted for 30303 metric tons and Qatar accounted for 16479 metric tons. Details have been stated in the disclosure statement of the Designated Authority which has been reproduced above in paragraph 39. No anti-dumping duty was imposed on goods from Qatar nor any anti-dumping investigation was in process and, therefore, the normal value of subject goods was correctly constructed by the Designated Authority after making the necessary adjustments.
48. The producer / exporter is also not justified in asserting that Qatar could not have been taken as a surrogate country as the level of development is not similar to that of China. The level of development would be relevant only if the domestic sale price or cost of production of a market economy third country is adopted since the level of development affects the price and cost. The price in international trade is a function of demand and supply in the international market and it is not affected by the level of development of the supplier country. The price to India is, therefore, the price meant for consumption in the Indian market. When the second option under paragraph 7 is exercised for determination of the normal value, what is relevant is the volume of exports and the country concerned should not be dumping during the period of investigation, since these 41 parameters will affect the price comparability in the Indian market.
49. At this stage it is important to take note of the submissions made by the domestic industry that a higher export price was claimed by the producer/ exporter in the New Shipper Review in order to seek a lower or no anti-dumping duty. It has been contended that not only important documents were not produced, but the exporter was dealing with only two importers in India, namely M/s Exim Incorporation and M/s Sanjay Chemicals. The prices at which these two importers had actually purchased the subject goods from the exporter were much higher than the prices which other Chinese exporters were offering. In fact, it was stated that the export price claimed by the exporter was more than 100 to 200 US$ per metric ton of the price at which other Chinese exporters had supplied the product in the Indian market. These facts have not been explained by producer/ exporter. It is important to note that all the exports took place after the period of investigation and, therefore, there is substance in the contention of the domestic industry that the prices claimed by the exporter had been raised so as to lower the amount of anti-dumping duty.
50. It has also been contended on behalf of the producer/ exporter that the Designated Authority was not justified in determining the export price of the producer and not the exporter. This submission cannot be accepted for the reason 42 that the exporter had substantially raised the price of the subject goods in order to reduce the anti-dumping duty. The ex-factory price of the producer would, therefore, be relevant for determination of export price.
51. The Chinese exporter had relied upon certain new shipper review cases mentioned in table below and had not only submitted before Designated Authority but also before the Tribunal during the course of hearing that the Designated Authority did not suggest a surrogate country in these cases and the normal value was computed for non-market economy on the cost basis.
52. It has been pointed out by the Domestic Industry that in all the cases, except at serial no. 1, the Chinese exporter was either granted market economy treatment and normal value was determined on basis of the data given by the Chinese exporter or the request for individual dumping margin was rejected. The factual position has been explained by the Domestic Industry in the following manner:
Sr File NO. Particulars Date Computation of Comments by the No. Normal Value Domestic Industry.
1 F No. New/unused 2.5.2019 Not on surrogate Not on surrogate country
7/8/2018- pneumatic Radial country basis basis
DGAD Tyres
2 F No. Lead Acid 1.4.2004 Not on surrogate Exporter has claimed
14/26/2002- Batteries country basis MET treatment.
DGAD Exporter was granted
Market economy
treatment and normal
value was determined
bases on the Chinese
exporter‟s data
3 F No. Lead Acid 27.04.2004 Not on surrogate Exporter has claimed
14/30/2002- Batteries country basis MET treatment. Exporter
DGAD was granted Market
43
economy treatment and
normal value was
determined basis on the
Chinese exporter‟s data.
4 No. Vitrified/Porcelain 23.05.2003 Not on surrogate This is initiation
15/2/2003- Tiles Country basis notification wherein no
DGAD third country was
suggested.
5 No. Vitrified/Porcelain 30.12.2005 Not on surrogate Exporter has claimed
15/2/2003- Tiles Country basis MET treatment and
DGAD Exporter was granted
Market economy
treatment and normal
value was determined
based on the Chinese
exporter‟s data.
6 No. Vitrified/Porcelain 29.12.2005 Not on surrogate Exporter has claimed
15/15/2004- Tiles Country basis MET treatment.
DGAD Exporter was granted
Market economy
treatment and normal
value was determined
based on the Chinese
exporter‟s data.
7 No. Vitrified/Porcelain 28.03.2008 Not on surrogate Exporter has claimed
15/14/2006 Tiles Country basis MET treatment.
Exporter was granted
Market economy
treatment and normal
value was determined
based on the Chinese
exporter‟s data.
8 No. Vitrified/Porcelain 14.02.2008 Not on surrogate Exporter has claimed
15/23/2006- Tiles Country basis MET treatment.
DGAD Exporter was granted
Market economy
treatment and normal
value was determined
based on the Chinese
exporter‟s data.
9 No. Vitrified/Porcelain 27.02.2009 Not on surrogate Exporter was granted
15/10/2006- Tiles Country basis Market economy
DGAD treatment and normal
value was determined
based on the Chinese
exporter‟s data.
10 No. Vitrified/Porcelain 25.04.2009 Not on surrogate Exporter has claimed
15/23/2008- Tiles Country basis MET treatment.
DGAD Exporter was granted
Market economy
treatment and normal
value was determined
based on the Chinese
exporter‟s data.
11 No. Vitrified/Porcelain 28.09.2012 Not on surrogate Exporter has claimed
15/29/2010- Tiles Country basis Market economy
DGAD treatment and normal
value was determined
based on the Chinese
exporter‟s data itself.
12 No. Vitrified/Porcelain 24.07.2013 Not on surrogate Exporter failed to file
15/20/2011- Tiles Country basis MET questionnaire but
DGAD claimed MET during the
verification process. The
Authority rejected the
same and consequently
rejected the request for
individual dumping
margin as well.
44
13 No. Vitrified/Porcelain 28.03.2016 Not on surrogate No examination of
15/25/2011- Tiles Country basis normal value, as the
DGAD Authority rejected the
request of individual
dumping margin.
53. From the aforesaid, it is apparent that normal value for non market economy is dealt with on a case to case basis and the producer/ exporter is not justified in asserting that in the present case the Designated Authority should have also determined the normal value under the third condition contained in paragraph 7.
54. There is, therefore, no substance in any of the submissions advanced on behalf of the producer/ exporter and the appeals filed by the producer and the exporter deserve to be dismissed.
55. The Domestic Industry has filed Anti-Dumping Appeal No. 50103 of 2020 for setting aside the final findings and the consequent Customs Notification for the reason that they are not entitled to individual dumping margin. It has been submitted that the exporter failed to submit any information regarding the determination of normal value since it did not provide any information either at the time of filing of the application before the Designated Authority or during the course of hearing. Thus, the New Shipper failed to discharge the burden cast upon it to provide the relevant information for computation of new dumping margin.
56. It is seen from the factual discussion above that the exporter made no attempts to provide information to the Designated Authority for the purpose of determining individual 45 margins of dumping for the producer and the exporter.
However, the Designated Authority proceeded to determine the individual margins of dumping in accordance with paragraph 7 of Annexure-I to 1995 Rules. Section 9 (6A) of the Tariff Act stipulates that the margin of dumping in relation to an article, exported by an exporter or producer shall be determined on the basis of records concerning normal value and export price maintained, and information provided, by said exporter or producer but where an exporter or producer fails to provide such records or information, the margin of dumping for such exporter shall be determined on the basis of facts available. When the Designated Authority proceeded to determined the margin of dumping in relation to an article on the basis of the facts available on record, it will not be prudent to set aside the final findings of the Designated Authority or the Customs Notification merely for the reason that the producer/ exporter did not apprise the Designated Authority at the initial stages about the method to be adopted for determination of normal value. The appeal filed by the Domestic Industry, therefore, also deserves to be dismissed.
57. The importer has also filed Anti-Dumping Appeal No. 50100 of 2020 with a prayer that the application filed by the producer before the Designated authority under rule 22 of the 1995 Rules was not maintainable for the reason that the export price claim by the applicant was fictitiously high and so the final findings of 46 the Designated Authority and the Customs Notification should be set aside.
58. The export price that has been calculated by the Designated Authority is not the price of the exporter, which as noticed above, was increased substantially in order to lower the anti-dumping duty, but on the basis of the ex-factory price of the producer. There is, therefore, no merit in this appeal.
59. Thus, for all the reasons stated above, all the four Anti Dumping Appeals bearing nos. 52291 of 2019, 52292 of 2019, 50100 of 2020, 50103 of 2020 are dismissed.
(Order pronounced on August 05, 2020) (JUSTICE DILIP GUPTA) PRESIDENT (D M MISRA) MEMBER (JUDICIAL) (C L MAHAR) MEMBER (TECHNICAL) Tejo