Customs, Excise and Gold Tribunal - Delhi
Virchow Laboratories Ltd. vs Ministry Of Finance on 12 February, 2002
Equivalent citations: 2002(82)ECC190, 2002(141)ELT60(TRI-DEL)
ORDER
K.K. Usha, J. (President)
1. The appeal is directed against the imposition of anti-dumping duty vide Notification No. 31/2001-Customs, dated 28-3-2001 on Hydroxyl Amine Sulphate (HAS) imported from USA, Japan and European Union (EU) pursuant to the final findings of the designated authority published in the Ministry of Commerce Notification dated 1-3-2001.
2. In the impugned order the designated authority recommended imposition of definitive anti-dumping duties on all imports of Hydroxyl Amine Sulphate (HAS) falling under sub-heading 2825.1003 of the Customs Tariff Act, 1975 originating in or, exported from the subject countries/territory, as mentioned above. The anti-dumping duty has to be the difference between the amounts mentioned in Column 3 below and the landed value of imports in US $/MT :-
3. Hydroxyl Amine Sulphate is used in the manufacture of Sulphamethaxazole (SMX) commonly known as Septran , Bactovan and other antibiotics such as Ranatadine. Respondent No. 3 is the sole producer of Hydroxyl Amine Sulphate in India. On a petition filed by the domestic industry the Designated Authority vide its notification 3rd March, 2000 initiated the investigation for the imposition of anti-dumping duty on Hydroxyl Amine Sulphate. The Designated Authority in the final findings came to the conclusion that -
(a) Hydroxyl Amine Sulphate originating in or exported from USA, Japan, European Union had been exported to India below its normal value, thereby resulting in dumping;
(b) The Domestic Industry has suffered material injury; (c) The injury has been caused to the Domestic Industry by dumping of the subject goods originating in or exported from USA, Japan and European Union.
4. Above findings are under attack in this appeal at the instance of a Private Limited Company who claims to be a manufacturer of SMX in India. According to the 3rd respondent the appellant is an importer and not a manufacturer. The main grievance pressed before us by the learned Counsel for the appellant is against the choice of the period of investigation by the Designated Authority. According to the learned Counsel, the period of investigation which covered only six months from 1st July, 1999 to 31st December, 1999 is not consistent with the practice of the Designated Authority. The usual period is one year. Reference was made to the Guidelines-Cum-Application Proforma for Anti-Dumping Petition, where, in Clause 10, it is stated that the applicants are advised to consider time period for providing the information and the time period chosen for furnishing information should preferably be 12 months and it could be their accounting year. According to the learned Counsel, this is an indication that the investigation should extend to a period of 12 months. It is also contended that the discretion was exercised by the Designated Authority without any bona fides.
5. The learned Counsel for the petitioner who is the 3rd respondent in this proceeding contended that the choice of six months is in accordance with law. It is submitted that the petition was filed in November, 1999 and it was updated in February, 2000. The petitioner points out that the export price of HAS from subject countries was declining significantly from July, 1999 and, when that trend was found continuing the petition was filed in November, 1999. The notification regarding initiation was in March, 2000 and therefore, according to the petitioner, the choice of the period from July to December 1999 cannot be treated as unreasonable.
6. It is contended on behalf of the Designated Authority that there is no rule mandating the authority to take a period of 12 months for determination of dumping. The Designated Authority has observed that there was significant drop in the import price of HAS from the subject countries during six months. The price had dropped by over 50% and the landed price of the imports had been continuously declining in the last four years. There was no allegation of mala fides made against the authority in the matter of choice of the period by any one of the parties during the investigation proceedings.
7. There are no rules during the period of investigation as twelve months as contended by the appellant. On the other hand, the footnote to Part I Article 2.2.1 of Agreement on implementation of Article VI of the General Agreement on Tariff and Trade, 1994 would give a different indication. Article 2.2.1 provides that while determining normal value, the authority shall take into consideration sales which are made in an extended period of time in substantial quantities. Footnote to this clause explains that the extended period of time should normally be one year but shall in no case be less than six months. This would show that choice of a period of six months is not barred.
8. While rejecting a similar contention in Final Order No. 22/2000-AD, dated 2-2-2000 [2000 (119) E.L.T. 157 (T)] the Tribunal has observed as follows :-
"We are not convinced with the arguments advanced on behalf of the appellants that assessment is arbitrary since the D.A. has chosen only 6 months i.e. October, 1994 to March, 1995 as period of investigation for the purpose of assessment. The D.A. is right in observing that there are no specific provisions in the Rules to suggest the period of investigation. There are, however, indirect references available to suggest that the period of investigations should not be less than six months. Our anti-dumping law is based upon agreement on implementation of Article VI of the General Agreement on Tariff and Trade (W.T.O. Agreement). Annexure 1.2(1) suggests and Note for of WTO (Article 2.2.1) suggests that the period of investigation should hot be less than six months. In the absence of prescription or restriction with reference to the period of investigation in the respective provisions of anti-dumping law, we do not find any flaw in the order in the course adopted by D.A, taking six months as period of investigation."
We, therefore, hold that the discretion exercised by the Designated Authority in choosing a period of six months is not in any manner vitiated.
9. Yet another contention raised on behalf of the appellant was that there are factors other than dumped imports which would have caused injury to the domestic industry in this case. According to the appellant, the product supplied by the petitioner is of poor quality and the technology adopted by them is outdated. The appellant submits that the Designated Authority has failed to appreciate the cost difference between the Hydrogenation process and Raschig's process. No one except the petitioner uses Raschig's process globally as it is costlier.
10. The Domestic Industry is producing Hydroxyl Amine Sulphate by Raschig's process and the other method of production for HAS is by hydrogenation of Nitric Oxide over platinum catalyst in presence of dilute sulphuric acid. HAS solution is then separated out by crystallizing and centrifuging. Domestic industry has stated that it was not aware of the method adopted by the producers in the subject countries/territory. Apart from making allegation that the process adopted by the domestic industry is less efficient, no material is made available to the Designated Authority to substantiate the allegation by making a comparative study of the different processes. Same is the position regarding the allegation that HAS produced by Domestic Industry is of inferior quality. It is significant to note that the appellant does not dispute that HAS exported from the subject countries /territories and HAS produced by the Domestic Industry are 'like article' within the meaning of Rule 2(d) of the Anti-Dumping Rules.
11. In Nippon Zeon Co. Ltd., Japan and Ors. v. Designated Authority [1997 (96) E.L.T. 126 (T)] this Tribunal has taken the view that while imposing anti-dumping duty the position that has to be considered is not in the context of ideal conditions but in the specific circumstances of the domestic industry. In DSM Idemitsu Limited v. Designated Authority [2000 (119) E.L.T. 308 (T)] this Tribunal upheld the finding of the Designated Authority that difference in quality is not relevant for considering whether the imported product and domestic product are like articles. In the facts of this case, we find no reason to accept the contention of the appellant that injury is caused to the Domestic Industry not due to dumping but due to the two factors mentioned above.
12. It is also contended by the appellant that, since the petitioner has imported HAS, the petition itself is not maintainable at its instance. We find from the records that the petitioner had to import 40 MT of HAS in May, 1999 since its plant had to be shut down during that period. This would show that during the period of investigation there was no import of HAS by the petitioner. Apart from the above, the definition of the term 'Domestic Industry' has undergone an amendment on 15-7-1999. Before the amendment the provision was that producers who are themselves importers shall be deemed not to form domestic industry. The word 'shall' has been replaced by 'may' under the amendment. It is much after that the amendment the investigation was initiated. For this reason also, the petitioner is not liable to be excluded.
13. The appellant further contended that the normal value was not properly fixed by the Designated Authority. It is to be noted that such a contention is not open to the appellant who is neither an exporter nor a manufacturer. In this case, the Designated Authority has followed the procedure prescribed under Customs Tariff (Identification, Assessment and Collection of Anti-Dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995. Normally the value fixed by the Designated Authority in the above manner can be challenged only by the exporter or manufacturer of the articles. It has been so held by this Tribunal in AIICMA v. Designated Authority - 2000 (119) E.L.T. 333 (T). We, therefore, reject the contention of the appellant.
14. We find no ground to interfere with the order passed by the Designated Authority and the notification impugned. Accordingly, the appeal is dismissed.