Custom, Excise & Service Tax Tribunal
Technova Imaging Systems P Ltd vs -Designated Authority Directorate ... on 13 April, 2023
Author: Dilip Gupta
Bench: Dilip Gupta
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
NEW DELHI
PRINCIPAL BENCH
ANTI DUMPING APPEAL No. 51425 OF 2022
(Arising out of Customs Notification No. 68/2021-Customs (ADD) dated 06.12.2021
issued by the Ministry of Finance read with Final Findings No. 6/27/2020-DGTR
dated 07.09.2021 by the Designated Authority)
Technova Imaging Systems ...Appellant
Private Limited
124, 1st Floor, AnsalBhawan, 16,
KG Marg, Barakhamba, New Delhi,
Delhi 110001
versus
1. The Union of India
Through the Secretary,
Ministry of Finance,
Department of Revenue,
North Block, New Delhi-110001
2. Designated Authority, Directorate
General of Trade Remedies,
Department of Commerce,
Ministry of Commerce & Industry,
4th Floor, Jeevan Tara Building,
Parliament Street, New Delhi-110001
3. Hindalco Industries Limited
Ahura Centre, 1st Floor, B wing,
Mahakali Caves Road,
Mumbai-400093
4. Aludecor Lamination Pvt. Ltd.
Martin Burn Building, Suite 52, Floor 5, 1, RN,
Mukherjee Road,
Kolkata - 700001, West Bengal
5. M/s. Alkraft Thermotechnologies
Pvt. Ltd.
35 A & B/1, Ambattur Industrial Estate,
Chennai 600058, Tamilnadu, India
6. Jiangsu Dingsheng New Materials
Joint-Stock Co.
Jingkou Industrial Park,
Zhenjiang, Jiangsu
7. Dingsheng Aluminum Industries
(Hongkong) Trading Co., Limited
Flat/RM 1405 Gloucester Road, Wanchai, HK
8. Hangzhou Dingsheng Import & Export Co., Ltd.
PingYao Zone, Yuhang Industrial Area,
Hangzhou, Zhejiang, 311115, China
2
AD/51425/2022
9. Inner Mongolia Liansheng New
Energy Material Co.
Xiaoshan Ganghui Center,
Hazgzhou City, Zhejiang Province
10. Indomax Industries
D19/3, Okhla Phase-2, New Delhi-110020
11. MAHLE Anand Thermal Systems Private Limited
Plot No. 3, Sector 41, Kasna Industrial Area,
201310 Greater Noida, Uttar Pradesh
12. Jindal (India) Limited
Jindal Centre, 12, Bhikaji Cama Palace,
New Delhi - 1100666
13. Raviraj Foils Limited
702, 7th Floor, Saffron, Panchvati,
Ambavadi, Ahmedabad, Gujarat 380006
14. Arconic (Kunshan) Aluminum Products Co., Ltd
No. 111 Yanhu Road Huaqiao Town,
Kunshan City, 215332, Jiangsu Province, China
15. M/s Granges Aluminium (Shanghai) Ltd. (GAS)
1111 Jiatang Highway Shanghai, China, 201807.
16. Aluminium Secondary Manufacturers Association
1/6B, Asaf Ali Road, New Delhi- 110002
17. ACP Manufacturer Association
2E/7, Jhandewalan Extension,
New Delhi-110055
18. Alutech Packaging Private Limited
DSM-315, DLF Tower,
Shivaji Marg, Moti Nagar, Delji - 110005, India
19. Greenberry Foils India Limited
Plot No. 6, Near Godrej Factory Valia,
GIDC Industrial Estate, Valia Rd,
Ankleshwar, Gujarat 393135
20. R.S. Foils Private Limited
Survey No. 54, Samlaya-Tundav Road,
Village - Moto Motipura,
Tal - Savli, Dist. - Vadodara
391770, Gujarat, India
21. Shree Venkateshwara Electrocast
Private Limited
Flat No. 204, Block - B,
Panchsheel Apartment, 493/B/1,
GT Road (S), Shibpur, Howrah,
Kolkata, WB, 711102
3
AD/51425/2022
22. Hanon Automotive Systems India ...Respondents
Pvt. Ltd.
No.-1, Nelson Mandela Marg,
Shanti Kunj B Block, Anand Gram,
Vasant Kunj, New Delhi-110070
APPEARANCE:
Shri V. Lakshmikumaran, Shri Devinder Bagia, Shri Ankur Sharma, Shri Jayant
Raghu Ram, Shri Ashutosh Arvind Kumar, Advocates for the Appellant
Shri S. Seetharaman and Shri Darpan Bhuyan, Advocates for Respondent No.
3
Ms. Reena Asthana Khair and Ms. Shreya Dahiya, Advocates for Respondent
No.15
Shri Devesh Tripathi, Shri Rajesh Sharma, Ms. Roopali Sharma and Shri Nikhil
Sharma, Advocates for Respondent No.10 & 17
Shri Ameet Singh and Ms. Bhawna, Advocates for Designated Authority
Shri Viswajeet Saharan, Authorised Representative for the Central
Government
CORAM:
HON'BLE MR. JUSTICE DILIP GUPTA, PRESIDENT
HON'BLE MR. P.V. SUBBA RAO, MEMBER (TECHNICAL)
HON'BLE MS. RACHNA GUPTA, MEMBER (JUDICIAL)
Date of Hearing: 09.11.2022
Date of Decision: 13.04.2023
FINAL ORDER NO. 50471/2023
JUSTICE DILIP GUPTA:
Technova Imaging Systems Private Limited 1 has filed this
appeal to assail the final findings dated 07.09.2021 issued by the
designated authority and the consequential customs notification dated
06.12.2021 issued by the Central Government imposing anti-dumping
duty on „certain flat rolled products of aluminium‟2 from China PR. The
1. the appellant
2. the subject goods
4
AD/51425/2022
second relief that has been claimed is to grant exclusion to higher
width Lithograde Aluminium coils above 1150 mm width, which
are not commercially manufactured and supplied by the domestic
industry i.e., Hindalco Industries Ltd.3
2. During the hearing of the appeal, Shri V. Lakshmikumaran,
learned counsel for the appellant assisted by Shri Devinder Bagia,
Shri Ankur Sharma, Shri Jayant Raghu Ram and Shri Ashutosh Arvind
Kumar, restricted his submissions to the second prayer.
3. It transpires from the records that Hindalco Industries Limited,
which has been impleaded as respondent no. 3 in this appeal, had
filed an application before the designated authority on behalf of the
domestic industry under the provisions of the Customs Tariff Act,
1975 4 and the Customs Tariff (Identification, Assessment and
Collection of Anti-dumping Duty on Dumped Articles and
Determination of Injury) Rules, 1995 5 for initiation of anti-dumping
investigation on the imports of certain flat rolled products of
aluminium originating in or exported from China PR 6 . The
investigation was initiated by the designated authority by a
notification dated 08.09.2020 to determine the existence, degree and
effect of the alleged dumping and to recommend the amount of anti-
dumping duty, which, if levied, would be adequate to remove the
injury to the domestic industry. The investigation was conducted for
the period from 01.04.2019 to 31.03.2020 and the injury analysis
period was notified to be from 01.04.2016 to 31.03.2019 and the
period of investigation. The designated authority provided an
3. Hindalco
4. the Tariff Act
5. the 1995 Rules
6. the subject country
5
AD/51425/2022
opportunity to all the interested parties to present their submissions
orally in the hearing conducted on 25.05.2021 and the interested
parties who presented their views were advised to file written
submissions of the views expressed orally by them. The interested
parties were also provided an opportunity to file rejoinder
submissions to the views expressed by the opposing interested
parties. A disclosure statement containing the essential facts which
would form the basis for the final findings was issued to the
interested parties on 26.08.2021 and the interested parties were
allowed time upto 02.09.2021 to give their comments. The final
findings of designated authority were notified on 07.09.2021. The
conclusion and the recommendation made by the designated
authority in the final findings are as follows:
"L. CONCLUSION
127. After examining the submissions made by the
domestic industry and the other interested parties
and issues raised therein and considering the facts
available on record, the Authority concludes that:
a) Considering the normal value and export
price for the subject goods, dumping margin
for the subject goods from the subject
country has been determined, and the
margin is positive and significant.
b) The domestic industry has suffered material
injury and the injury margin is positive. The
examination of the imports of the subject
product and the performance of the
domestic industry shows that the volume of
dumped imports from the subject country
has increased in both absolute and relative
terms. The volume of the subject goods has
increased by more than 60% whereas
demand has increased by only 18%. It is
also noted that the imports of the subject
goods from the subject country are
6
AD/51425/2022
suppressing the prices of the domestic
industry. The production and the sales of
the domestic industry have remained largely
stable in the period of investigation while
the capacity utilization remains suboptimal.
It is noted that the market share of
domestic industry has declined by 12% in
the period of investigation whereas market
share of the imports from the subject
country has increased by 35%. The
performance of the domestic industry has
significantly deteriorated in respect of
profits, cash profits and return on capital
employed. The domestic industry has
suffered financial losses, cash losses and
negative return on investments in the period
of investigation.
c) The material injury suffered by the domestic
industry has been caused by the dumped
imports.
M. RECOMMENDATION
128. The Authority notes that the investigation was
initiated and notified to all the interested parties and
adequate opportunity was given to the domestic
industry, the exporters, the importers and the other
interested parties to provide information on the
aspects of the dumping, the injury and the causal
link. Having initiated and conducted the investigation
into dumping, injury and causal link in terms of the
provisions laid down under the Rules, the Authority is
of the view that imposition of anti-dumping duty is
required to offset the dumping and the injury.
Therefore, the Authority recommends imposition of
the anti-dumping duty on the imports of subject
goods originating in or exported from the subject
country.
129. Having regard to the lesser duty rule followed
by the Authority, the Authority recommends
imposition of the anti-dumping duty equal to the
lesser of the margin of dumping and the margin of
injury so as to remove the injury to the domestic
industry. The Authority, therefore, considers it
7
AD/51425/2022
necessary to recommend imposition of the definitive
anti-dumping duty equal to the amount mentioned in
the column (7), on all imports of the subject goods
described at Column (3) of the duty table, originating
in or exported from China PR, from the date of
notification to be issued in this regard by the Central
Government."
4. The Central Government, thereafter, issued the notification
dated 06.12.2021 imposing anti-dumping duty on flat rolled products
of aluminium for a period of 5 years from the date of publication of
the notification. However, the following two products were excluded
from the scope of the subject goods.
"i. Can-body Stock-also includes Can End Stock
(CES) used to make aluminium cans.
ii. Aluminium Foil up to 80 microns."
5. The issue, therefore, that arises for consideration this appeal is
regarding exclusion of the higher width Lithograde Aluminium coils
above 1150 mm width from the product on which anti-dumping duty
has been imposed by the customs notification.
6. The case set out by the appellant is that it is a manufacturer of
Lithographic Digital Offset Printing Plate 7 . Aluminium offset
printing plates are photo sensitive digital plates used in the printing
industry for transferring data as an image onto paper or on non-
absorbent substrates like tin sheets or poly films. The use of
Aluminium offset printing plates in the printing process enables the
digital workflow to directly transfer the image from a computer to the
plate' using lasers, unlike the analog workflow that requires an
intermediary film to transfer the image. Aluminium offset printing
plates are manufactured from high purity lithograde aluminium coils,
7. Aluminium offset printing plates
8
AD/51425/2022
which is the principal raw material for its manufacture. The appellant
is the sole manufacturer of Aluminium offset printing plates in India
and, accordingly, is also the sole user of lithograde aluminium coils in
India. Hindalco is the only Indian manufacturer of certain lithograde
aluminium coils. The appellant claims that it buys the entire
production of Hindalco of lower width lithograde aluminium coils but
even at full capacity, Hindalco is unable to fulfil the demand of the
appellant for lithograde aluminium coils below 1150 mm as during the
period of investigation, the appellant had a demand more than
16,000 MT of lower width lithograde aluminium coils, out of which
only around 10,000 MT were supplied by Hindalco. Thus, the
appellant has to fulfil this demand of lower width lithograde
aluminium coils by importing the remaining quantities.
7. The appellant further claims that for lithograde aluminium coils
above 1150 mm width, Hindalco is unable to supply any commercial
quantities to the appellant. Out of the total demand of such lithograde
aluminium coils above 1150 mm, which was close to 10,000 MT
during the period of investigation, Hindalco manufactured some trial
quantities and could supply only around 2% of the total demand of
appellant during the period of investigation but most of such higher
width coils supplied by Hindalco failed to meet the technical
manufacturing requirements of the appellant. The said rejected coils
were returned to Hindalco and Hindalco acknowledged the
genuineness of such rejections by way of written communications to
appellant. Hindalco also acknowledges on its website that it can
manufacture lithograde aluminium coils only up to 1150 mm width.
Due to the inability of Hindalco to manufacture such coils above the
9
AD/51425/2022
width of 1150 mm in commercial quantities, the appellant had to
import the same to fulfil its demand.
8. It would be useful to reproduce the paragraphs of disclosure
statement of the designated authority that deal with product under
consideration.
9. The key submissions made by the domestic industry with regard
to product under consideration have been recorded by the designated
authority in the following manner:
"5. The following are the key submissions made
by the domestic industry with regard to the product
under consideration and the like article:
a. The product under consideration is "Flat
Rolled Products of Aluminium" (FRP). FRP is made in
the form of ALuminium Rolled Coils, or Aluminium
Rolled Sheets of various dimensions. FRP is made
from primary or secondary aluminium which may
undergo several processes such as melting &
allyoing, slab casting (slabs/concast), hot rolling,
cold rolling, and other finishing processes and used
for a variety of applications depending upon the
gauge, temper, alloy, width, finish etc.
*****
e. Exclusion requests: With regard to exclusion requests made by the interested parties, the domestic industry has submitted as follows:
(i) to (x) ***** Lithographic Aluminum Coils having a width above 1150mm xi. The domestic industry has supplied coils having width above 1150mm in the past to customers. Further, the quality of products provided by the petitioner meets all the specified requirements.
xii. No industry or manufacturer can supply products meeting all specifications at all times. 10
AD/51425/2022 Depending upon the industry and product in question, there will be some products in a batch or over multiple batches that may not meet all specifications. In such cases, those products are returned and amounts for the same are adjusted for future orders or refunded. This in itself cannot be a ground for exclusion."
10. The submissions made by the other interested parties on the product under consideration are as follows:
"C.2 Submissions made by the other interested parties
6. The following are the submission made by the other interested parties with regard to the product under consideration and like article:
a to c ***** d. Exclusion requests: Following exclusions have been requested by the opposing interested parties:
***** i to xv ***** Lithograde Aluminium Cois above 1150 mm width xvi. Aluminium offset printing plates are manufactured from high purity litho-grade aluminium coils which is the crucial and principal raw material for its manufacturing. Litho-grade aluminium coils, which has been made a part of the current PUC, are a special grade of aluminium coils made from alloy of aluminium and lithium.
xvii. TechNova requires litho-grade Aluminium coils of certain higher width ranges which goes up to 1600 mm which the domestic industry does not manufacture. The domestic industry is not commercially capable of supplying litho-grade aluminium coils beyond 1150 mm. Consequently, users have no other option but to import Lithograde aluminium coils beyond 1150 mm width into India.11
AD/51425/2022 xviii. During the POI and 2020-21, 95%-100% of the Lithograde aluminium coils beyond width 1150 mm have been imported, whereas, the domestic industry has been able to supply only 0%-5% of Lithograde aluminium coils above 1150 mm width.
xix. Most of these coils supplied by the domestic industry had been on a trial basis out of which many of them failed to produce the desired quality standards required and were liable to be rejected.
xx. Thus, the Authority is requested to exclude lithograde aluminium coils above 1150 mm width from the product scope."
11. The designated authority examined the product under consideration in the following manner:
"C.3 Examination by the Authority
7. Various interest parties have raised a number of issues with regard to the scope of the product under consideration in the present case. Interested parties have sought exclusion of certain products from the scope of the PUC on the grounds that the domestic industry is not capable of producing the product type or supply the product in the desired product type, or the quality of the product produced and supplied by the domestic industry is not satisfactory. The arguments of interested parties have been examined after calling relevant information from the parties and examined the same during the table verification and also taking into account the evidence submitted on record by the interested parties."
8 to 23 ***** Lithograde Aluminium Cois above 1150 mm width
24. Interested parties have submitted that the domestic industry is not commercially capable of supplying Lithograde Aluminium coils beyond 1150 12 AD/51425/2022 mm and up to 1600 mm width and that the domestic industry has been able to supply only 0% - 5% of Lithograde Aluminium coils above 1150 mm width.
25. On the other hand, the domestic industry has submitted that it has supplied coils having width above 1150 mm in the past to customers meeting all the specified requirements.
26. The Authority has verified the evidence submitted by the domestic industry and finds that the domestic industry has supplied Lithograde Aluminium coils beyond 1150 mm and up to 1600 mm width to one of the parties. Accordingly, this is included within the scope of the PUC.
27. The Authority notes that a possible demand- supply gap does not justify the exclusion of particular product types where they are comparable to the product under consideration in terms of characteristics such as physical & chemical characteristics, functions & uses, product specifications, distribution & marketing and tariff classification of the goods.
28. Interested parties have argued that the supply of these coils by domestic industry had been on a trial basis out of which many of them failed to produce the desired quality standards required and were liable to be rejected.
29. The Authority notes that if the government has prescribed certain standards of a product and the product supplied by the domestic industry conforms to such standards, the consumers cannot contend that the product type produced by the domestic industry does not meet the desired standards. It is also noted that nothing substantial has been provided by the interested parties to demonstrate the difference in the quality of the product supplied by the domestic industry and imported into India.
30. Therefore, the Authority holds not to exclude such a product from the scope of PUC."
13
AD/51425/2022
12. On the basis of the comments submitted by the interested parties to the disclosure statement, the designated authority recorded the following final findings with regard the product under consideration:
"I.3 Examination by the Authority
123. The analysis and the decision of the Authority on the issues raised above are as below:
(i) to (vi)*****
(vii) The arguments with respect to the exclusion of Lithograde Aluminium Coils above 1150 MM width have already been addressed by the Authority. First, the Authority has verified evidence of supply of Lithograde Aluminium coils beyond 1150 mm and up to 1600 mm width to one of the parties by the domestic industry. Secondly, a possible demand-
supply gap does not justify exclusion of the PUC. The interested parties are free to import the product and imports are not prohibited. Thirdly, if the products manufactured by the domestic industry conform to the standards prescribed by relevant governmental authorities, the consumers cannot contend that the product type produced by the domestic industry does not meet the desired standards. Quality issues, in any event, do not justify exclusion and there is no reason for the Authority to deviate from this."
13. Shri V. Lakshmikumaran, learned counsel appearing for the appellant made the following submissions:-
(i) The designated authority committed an error while defining the scope of product under the consideration to include even products not manufactured by the domestic industry;
(ii) The designated authority committed an error in not excluding higher width lithograde aluminium coils above 1150 mm width not commercially manufactured 14 AD/51425/2022 by domestic industry from the purview of the product under consideration; and
(iii) The designated authority incorrectly appreciated the facts and evidences presented during investigation leading to an incorrect reasoning on demand supply gap and quality parameters.
14. Shri S. Seetharaman assisted by Shri Atul Sharma and Shri Darpan Bhuyan, learned counsel appearing for Hindalco made the following submissions:
(i) Higher width lithograde aluminium coils above 1150 mm are manufactured by the domestic industry. The designated authority had also verified that the domestic industry has produced and supplied higher width lithograde aluminium coils above 1150 mm;
(ii) As the appellant purchases the entire quantity of lithograde aluminium coils produced by the domestic industry it would mean that the domestic industry produces lithograde aluminium coils equivalent to the orders received by it from the appellant. This is for the reason that the appellant is the sole buyer and the user of lithograde aluminium coils;
(iii) The cheap dumped imports of lithograde aluminium coils from China PR have cannibalized the potential sales that can be realized by the domestic industry from the appellant which is the sole customer;
(iv) If certain grades of the product under consideration are exempted on the basis that they cannot cater to the entire demand/requirement of that particular grade in India and cheap dumped imports at unfair prices are 15 AD/51425/2022 allowed to continue as they did before the imposition of anti-dumping duty through the customs notification, the domestic industry would never be able increase capacity with respect to such grades;
(v) A supply demand gap cannot be the basis for not levying anti-dumping duty;
(vi) Grant of exclusion to lithograde aluminium coils above 1150 mm will lead to circumvention of anti-dumping duty imposed on coils less than 1150 mm since for example 1400 mm coil can be rotated and cut into aluminium sheets of 700 mm to manufacture the Aluminium offset printing plates; and
(vii) The contentions of the appellant regarding quality are misconceived, quality concerns cannot be a ground for exclusion of any particular grade/product type from the scope of the product under consideration.
15. Shri Ameet Singh, learned counsel appearing for the designated authority and Shri Vishwajeet Saharan, learned counsel for the Central Government, however, supported the findings recorded by the designated authority.
16. Shri Devesh Tripathi, learned counsel appearing for the respondent no‟s. 10 and 17 and Ms. Reena Khair learned counsel assisted by Ms. Shreya Dahiya, appearing for the respondent no. 15.
17. The submissions advanced by the learned counsel for the appellant and the learned counsel for the respondents have been considered.
18. The appellant as the sole manufacturer of Aluminium offset printing plates in India is also the sole user of lithograde aluminium 16 AD/51425/2022 coils in India. Hindalco is the only manufacturer of certain lithograde aluminium coils in India. The appellant claims that it buys the entire production of Hindalco of lower width lithograde aluminium coils which Hindalco manufactures and even this demand of lithograde aluminium coils below 1150 mm is not met by Hindalco as out of the total demand of 16,000 MT, only 10,0000 MT were supplied by Hindalco. The remaining demand of lower width lithograde aluminium coils is met by the appellant by importing.
19. The appellant also claims that Hindalco is unable to supply any commercial quantities to the appellant of lithograde aluminium coils above 1150 mm. Out of the total demand of lithograde aluminium coils above 1150 mm, which was approximately 10,000 MT during the period of investigation, Hindalco manufactured some trial quantities and could supply only around 2% of the total demand of the appellant during the period of investigation. However, most of such higher width coils supplied by Hindalco could not meet the technical requirements of the appellant and they were returned to Hindalco. It is for this reason that the appellant claims that it has to import lithograde aluminium coils above 1150 mm.
20. It is not denied by Hindalco that only 2% of the total demand of lithograde aluminium coils above 1150 mm were supplied to the appellant and nor has it been denied that 25% of such trial quantity were rejected by the appellant. In the final findings, the designated authority placed reliance on few invoices of supply of lithograde aluminium coils above 1150 mm by Hindalco and held that the possible demand-supply gap would not justify the exclusion of this product from imposition of anti-dumping duty. 17
AD/51425/2022
21. The issue of demand-supply gap would arise only if Hindalco was commercially producing and supplying lithograde aluminium coils above 1150 mm. This demand as supply gap may make sense for lithograde aluminium coils below 1150 mm because Hindalco was commercially producing the same even though it could not meet the entire demand of the appellant.
22. It needs to be noted that the Manual of Standard Operating Practices for Trade Remedy Investigations issued by the Directorate General of Trade Remedies, Department of Commerce, Government of India provides in Article 3.10 that provides that product under consideration should include only those items which are manufactured by the domestic industry. In fact, the product under consideration should preferably include those items, which are produced and commercially sold in the domestic market by the domestic industry. The relevant portions are as follows:
"3.10. The PUC is defined to include those items only, which are manufactured by the DI. Mere competence without any production or merchant sales may not be sufficient to include an item in the definition of the PUC. Similarly, if an item is produced and consumed only captively (in-house) without any outside sales the DI's request for an investigation against this product may be considered with caution. The PUC should preferably include those items, which are produced and commercially sold in the domestic market by the respective DI. An exception could be the cases where the applicant is a new industry, who has set up facility for a new product or could be an upstream product of an existing industry and the new industry is facing difficulty in capturing market on account of dumped imports of the product.
**** 3.26. The complete process of defining and describing the PUC as mentioned above is carried out during the fresh/original investigation. It is the responsibility of the 18 AD/51425/2022 Investigation team (with the approval of the DG) to clearly and accurately define and describe the scope of the PUC concerned during the fresh/original investigation at the stage of consideration of initiation."
23. It is seen that for the period from Financial Year 2019-2020 to 2022-2023 Hindalco only supplied miniscule quantities, on trial basis to the appellant during the period of investigation but no supply of higher width coils was to the appellant made either pre or post period of investigation. In fact, only 2% of the requirement of the appellant of higher width coils were supplied on trial basis during the period of investigation and 25% of the supplies were rejected because they did not meet the technical manufacturing requirements. Even according to the Hindalco, only 74% of the supply of lithograde aluminium coils between 1150 mm to 1600 mm met the requirements.
24. It is, therefore, clear that Hindalco does not produce lithograde aluminium coils above 1150 mm on a commercial basis and it was only on a trial basis that this product was supplied to the appellant which also could not meet the technical requirements. The designated authority, therefore, committed an error in observing that Hindalco had supplied lithograde aluminium coils beyond 1150 mm and up to 1600 mm to the appellant when only miniscule supply had been made. In such a situation when commercial production had not been undertaken by Hindalco of this product, the issue of demand-supply gap would not arise.
25. The designated authority also noted that Hindalco is manufacturing lithograde aluminium coil as per the applicable BIS Standards and thus, the issue of failing the testing requirements cannot be raised by the appellant. The designated authority has not 19 AD/51425/2022 made any specific reference to the BIS Standard that the product satisfies and neither the learned counsel for the Hindalco placed any particular standard, particularly when learned counsel for the appellant had specifically stated that there are no BIS Standard covering this product.
26. Learned counsel for Hindalco also submitted that giving exclusion to wider width coils will lead to circumvention of anti- dumping duty imposed on the coils of less than 1150 mm width. The contention is that since the coils are of several hundred feet in length, the appellant can cut the lower width coil taking the length as the breadth of the newly cut part and use it as wider width coil to manufacture wider width plates. This has been described by Hindalco in the following manner:
--------------------
1400 mm (width) 700 mm (length) 1400 mm (width)
27. Elaborating this, learned counsel for Hindalco stated that coil of width 1400mm can be rotated, its length now taken as width, and be cut into aluminium sheets of 700mm to manufacture the aluminium offset printing plates, thus circumventing the duty.
28. Learned counsel for the appellant submitted that this submission is commercially and technically not correct. The appellant 20 AD/51425/2022 has descirbed the manufacturing process of aluminium offset printing plates in the following manner:
Mechanical The coils are loaded on coil car and un-coiler to feed the web Uncoiling to the line.
Jointing station The station is used to joint leading and trailing edge of metal to process.
Accumulator In order to attain continuous operation of the line there is an on-line coil storage mass. This permit joining operations without stopping the line.
Degreasing The web first passes through this process tank where it is treated with not chemical to clean of all oil, grease & dirt, thus making web clean for next treatment. Rinse 1 The degreased coil is then rinsed by spraying with water to remove excess surface chemical.
Electro-chemical The coil is grained/roughened in this tank by electrolysis Graining process.
Rinse 2 The grained coil is thoroughly washed off any residual electrolyte by multiple water sprays. Passivation The coil is neutralized for any process residue in this tank by chemical wash.
Rinse 3 The coil is washed by water to remove all traces of chemical from previous process.
Anodising The web is anodized (a layer of Aluminium oxide is formed) by electrolysis process.
Rinse 4 The coil is washed by multiple sprays of water to remove the entire residual chemical from previous Post Treatment The coil is thoroughly cleaned in this tank under mild acidic conditions.
Rinse 5 The coil is washed for the removal of residual chemical film using water sprays.
Drying The coil is dried completely before it is coated. Coating Heat sensitive coating is done in a dust free environment taking cognisance of all process application requirements.
Drying The coating is dried in this section. Baking Baking process ensures that web dries effectively and makes coil ready for cooling process.
Cooling This process ensures that web is cooled before it could be handled at next process stage easily. Flattener The web is then passed through de-curl assembly to achieve required flatness.
Auto Inspection The web is inspected by Auto-inspection system. Defective plates are tabbed & segregated from the conveyor belt. 21
AD/51425/2022 Cutting/Slitting The auto-inspected web passes through edge, centre & cut-
to length stations, gets finished to customer required sizes. Packaging The Plates are collected from Conveyor Belt, wrapped in black polyethylene paper, boxed in a foldover & identified by label.
Conditioning The plates are subjected to conditioning process. Post final inspection; the plates are released for dispatch to customer.
29. Learned counsel for the appellant also submitted that in the manufacturing of aluminium offset printing plates, the grain direction and rolling direction play an important role. The hot rolling and cold rolling process which is undertaken by Hindalco at its factory to produce the lithographich coils introduces a strong directional alignment in aluminium in the form of rolling lines and this directional alignment is called as „grain direction‟.
30. At its plant, the appellant subjects the lithographic coils to the „electro-chemical graining‟ process for conversion into offset printing plates. Electro-chemical graining is a process by which the surface of the coil is evenly roughened to improve the adhesion of the coating layer to the coils which improves the water/ink balance of the printing by the printers through exposure and developing. Technically the electro graining can only be done in the direction in which the coil has been rolled by Hindalco. After undergoing graining, the coils then undergo, inter-alia, the processes of anodizing and coating to become lithographic plates.
31. When the manufactured plates are installed into the printing press, they get bent at their gripper ends of the printing rollers. In such a situation, bending of the plates takes place perpendicular to the graining direction of the plates. If they are bent parallel to the graining direction of the plates, they will crack during the high-speed printing causing serious accidents. The web printing presses are high 22 AD/51425/2022 speed machines with 40,000 to 80,000 impressions per hour speeds. The printing machine rollers exert high pressure on the plate cylinders and tension/stress on the plate edge which is bent for lockup in the gripper at both ends. Due to this reason, the length of the coated coil cannot be transposed as width of the plate while mounting in the press.
32. Thus, the contention of Hindalco that the wide width coil can be substitutes lower width coil which will ultimately lead to circumvention of the imposed anti-dumping duty is not only an afterthought as it was not a point taken before the designated authority, but it is also not tenable and technically not possible. In fact, the fact during the course of hearing learned counsel stated that Hindalco is setting up a new line for wide width coil to be produced at Hirakut in future. Any planned factory to produce and supply lithographic coils above 1150 mm at Hirakut also means that Hindalco is currently not able to supply wider width coils as required by the appellant.
33. In the material injury analysis, the anti-dumping law requires consideration of period of investigation data and not future commitments which is entirely subjective. The future expansion of scope of product is to be considered under a new investigation or a mid-term review provision under the 1995 Rules, once facts of manufacture and supply in commercial quantities are established. In any view of the matter, this submission was not raised by Hindalco before the designated authority.
34. The inevitable conclusion that follows from the aforesaid discussion is that Hindalco does not manufacture/produce lithograde aluminium coils above 1150 mm on a commercial basis. Thus, when the domestic industry does not manufacture/produce lithograde 23 AD/51425/2022 aluminium coils above 1150 mm on a commercial basis, this product would have to be excluded from scope of the product on which anti- dumping duty has been imposed under the customs notification dated 06.12.2021 issued by the Central Government on the basis of the final findings dated 07.09.2021 issued by the designated authority.
35. The customs notification dated 06.12.2021 is, accordingly, modified by excluding the „lithograde aluminium coils above 1150 mm‟ from imposition of anti-dumping duty. The appeal is, accordingly, allowed to the extent indicated above.
(Order Pronounced on 13.04.2023) (JUSTICE DILIP GUPTA) PRESIDENT (P.V. SUBBA RAO) MEMBER (TECHNICAL (RACHNA GUPTA) MEMBER (JUDICIAL) JB, Shreya