Custom, Excise & Service Tax Tribunal
M/S P.T. Asahimas Chemicals vs Designated Authority/ on 13 February, 2015
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL,
WEST BLOCK NO.II, R.K. PURAM, NEW DELHI-110066.
Date of Hearing:28.10.2014
Date of Order: 13/02/2015
AD/13/2009-CU[DB]
M/s P.T. Asahimas Chemicals Appellant
Vs.
Designated Authority/ Respondent
Ministry of Finance Appearance:
Present for the Appellant: Shri Sharad Bhansali, Shri Jitendra Singh Advocate Present for the Respondent: Shri Govind Dixit, DR Designated Authority: Shri Ameet Singh Advocate Domestic Inds.: Ms. Reema Khair Advocate and Shri Rajesh Sharma, Advocate Coram: Honble Mr. Justice G. Raghuram, President Honble Mrs. Archana Wadhwa, Member (Judicial) Honble Mr. R.K. Singh, Member (Technical) FINAL ORDER NO.50334/2015 Per: R.K.Singh By Notification No. 168/2003-Cus dated 14.11.2003, the Central Government imposed anti-dumping duties on the imports of caustic soda originating in EU (excluding France), Indonesia and Chinese Taipei (Taiwan) for a period of 5 years. Consequent to the midterm investigations, the Central Government modified the duties vide Notification No. 72/2006-Cus dated 10.7.2006. The present appeals have been filed by P.T Asahimas Chemicals (Indonesian exporter) under Section 9C of the Customs Tariff Act, 1975 against the sunset review Notification No. 48/2009-Cus dated 13.05.2009 of the Central Government read with Final Findings dated 26.3.2009 of the Designated Authority, in terms of which anti-dumping duty has been continued for a further period of 5 years on the imports of caustic soda from EU (Excluding France) and Indonesia, and discontinued on the imports from Taiwan
2. Based on an application filed by the Alkali Manufacturers Association of India, (domestic Industry), sunset review investigations were initiated by the Designated Authority on 7.3.2008 to ascertain the need for continued imposition of duties and whether the expiry of anti-dumping duties would lead to continuation or recurrence of dumping, injury or both. In respect of the appellant, the Authority held that the exports, had been made at a price above their normal value, that is at un-dumped prices but since the exports had been made only during a limited period, they were considered to be temporary and unreliable. On this basis, it was concluded that the likelihood of recurrence of dumping and injury can not be rules out. The exports by other exporters from Indonesia and EU were found to be dumped, that is at prices below their normal value. The Authority found that there was a likelihood of continuation or recurrence of dumping and injury both for Indonesia and EU(excluding France), were the duties to be revoked. The Authority accordingly recommended continuation of duties in respect of imports from Indonesia and EU (excluding France). Duties in respect of Taiwan were discontinued, as the Authority found that there was no likelihood of dumping or injury from the exports from Taiwan.
Arguments of Appellant Exporter
3. The challenge in the present appeal is to the extension of duties on the exports made by the appellant from Indonesia. The counsel for the appellant assailed the findings on the ground that the Authority had committed a serious error in continuing the duties, even though it found that the exports made by the appellant to India, were at un-dumped prices, that is above the normal value. The Authority also erred in considering their exports to India as unreliable, merely because they were at prices lower than those reflected in the World Trade Atlas. The appellant further submitted that the exports to India constituted a significant part of their overall exports during the period of investigation, and hence could not be considered as unreliable. The circumstance that the exports to India were only made during the period of Investigation (P.O.I.), also does not lead to any inference that the exports are temporary or contrived. The exports, being substantial, ought to have been taken into consideration for the likelihood analysis. The appellant also pointed out that adequate disclosure of the detailed calculations of normal value, export price and dumping margin had not been made to them by the authority, causing serious prejudice.
Argument of Respondent Domestic Industry
4. The counsel for the domestic industry submitted that the duties are country specific, and there is no legal requirement of determination of individual dumping margins for the appellant exporter in a sunset review. Absence of current dumping is not a sufficient and valid ground for revocation of duties. It was emphasized that in review proceedings, the likelihood of recurrence of dumping and injury and not current levels of dumping are to be seen. In this context, they relied upon the Tribunal decision in the case of Thai Acrylic Fibre Co. Ltd. Vs. Designated Authority reported in 2010 (253) ELT 564.
5. The counsel for the domestic industry further submitted that the dumping margin for the other exporters from Indonesia was positive, and therefore there was continued current dumping from Indonesia. Attention was also invited to the final findings, wherein the Authority had noted that the appellants exports to India were confined to a particular period, and that there were no exports either before or after the period of investigation. This fact gives a clear indication, that the exports were stage managed to get a negative dumping margin, and were not representative of the usual business practices of the appellant, as reflected in the WTA statistics. The Designated Authority rightly concluded that likelihood of recurrence of dumping and injury can not be ruled out in the event of revocation of duty. In response to the appellants argument that they were not given adequate details of the dumping margin, the domestic industry argued that no prejudice had been caused to them as the Authority had determined a negative dumping margin based on the details furnished by the appellant.
Arguments on behalf of the respondent Designated Authority
6. The learned counsel for the Designated Authority supporting the reasoning contained in the Final Findings and the validity of the impugned notification contended that since the appellant had made no exports after the levy of duties, except during the period of investigation, the negative dumping margin during the period of investigation can not be a basis for concluding that there is no likelihood of recurrence of dumping and injury. As regards the argument that there was non disclosure of detailed calculations relating to dumping margin, normal value, etc., it was submitted that a confidential disclosure was given to the exporter containing relevant details. In any case, in a sunset review, the likelihood of future dumping and not current dumping is to be seen.
Arguments on behalf of Revenue
7. Ld. Departmental Representative for Revenue supported the notification on the ground that it was based on valid legal considerations. He referred to the final findings, and the decision of the Gujarat High Court in the case of Alembic Ltd. reported in 2013 (291) ELT 327 (Guj.), on the point that the Central Government had implemented the recommendation for levy of duties as it was in the public interest.
Analysis and Finding
8. We have carefully considered the submissions made on behalf of the appellant foreign exporter, the domestic industry, DA and the Department of Revenue. The issue which arises for our consideration is whether the Designated Authority was correct in rejecting the exports made by the appellant during the period of investigation as being temporary and unreliable and proceeding to give its findings on the likelihood of dumping and injury on the basis of other exports from Indonesia. The appellant has also raised a grievance that dumping margin calculations were not provided to it.
9. Section 9A(5) of the Act ibid relating to reviews is reproduced below:
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 of 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 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. It is evident from the perusal of the above-quoted Section that unlike original investigations, sunset reviews are prospective in nature as they focus on the likelihood of the continuation or recurrence of dumping and injury in the event of revocation of duties. Sunset review entails a likelihood determination in which present levels of dumping are obviously not so relevant as is the likelihood of continuance or recurrence of dumping. In the case of Rishiroop Polymers Pvt. Ltd Vs. Designated Authority 2006 (196) ELT 385 (S.C.), the Supreme Court held as under:
Otherwise also, we are of the opinion that scope of the review inquiry by the Designated Authority is limited to the satisfaction as to whether there is justification for continued imposition of such duty on the information received by it. By its very nature, the review inquiry would be limited to see as to whether the conditions which existed at the time of imposition of anti-dumping duty have altered to such an extent that there is no longer justification for continued imposition of the duty. The inquiry is limited to the change in the various parameters like the normal value, export price, dumping margin, fixation of non-injury price and injury to domestic industry. The said inquiry has to be limited to the information received with respect to change in the various parameters. The entire purpose of the review inquiry is not to see whether thee is a need for imposition of anti-dumping duty but to see whether in the absence of such continuance, dumping would increase and the domestic industry suffer. The WTO Panel in the case of CRCS Flat Products from Japan vide WT/DS244/R dated 14.8.2003 (as quoted in CESTAT judgment in case of Thai Acrylic Fibre Co. Ltd Vs. Designated Authority [2020 (253) E.L.T. 564 (Tri-Del)] observed as under:
7.168. We thus do not believe that the substantive disciplines in Article 2 governing the calculation of dumping margins in making a determination of dumping apply in making a determination of likelihood of continuation of recurrence of dumping under Article 11.3. To hold otherwise would mean that a new and full determination regarding the existence of dumping since the imposition of the order would be necessary in a sunset review. We find no such obligation in the text of Article 11.3 nor in Article 2 of the Anti-dumping Agreement. In case of APAR Industries Ltd. Vs. Designated Authority 2006 (200) E.L.T. 34 (Tri-Del), Cestat also held as under:
It is to be borne in mind that the scope of the sunset review by the designated authority is limited. He has to satisfy himself as to whether there is justification for continued imposition of anti-dumping duty and that also based on the information received by him. It seems that the sunset review by its very nature, would be limited to see as to whether conditions which existed at the time of imposition of anti-dumping duty have altered to such an extent that there is no longer justification for continued imposition of duty or to ascertain that if such duty is revoked there is imminent danger of the material injury to the domestic industry. The inquiry is limited to the change in the various parameters like the normal value; export price, dumping margin, fixation of non-injurious price and injury to domestic industry. The sunset review is undertaken for the purpose of not for imposition of anti-dumping duty but to see whether the revocation of such anti-dumping duty, dumping would increase and whether the domestic industry will suffer. In the case of Borax Morarji Limited vs. Designated Authority - 2007 (215) E.L.T. 33 (Tri-Del) Cestat noted that Proviso to Section 9A(5) of Customs Tariff Act, 1975 primarily intends to undertake review to examine whether cessation of duty on the expiry of five years is likely to lead to continuance/recurrence of dumping and injury Expression likely to lead to recurrence would cover situation where dumping and injury may not exist at time of review due to continuance of anti-dumping duty. During the period of investigation, the anti-dumping duty would be in force and hence, the current level of dumping may be non-existent or minimal. The exporters under investigation may also sell at a non-dumped price during this period knowing fully well that a sunset review would be in progress. Hence, the criteria under Section 9A(1) that the anti-dumping duty should not exceed the dumping margin would have no practical application for continuance of the duty under Section 9A(5). There is also no such warrant in law under the said Section 9A(5) to do so.
10. With respect to the injury determination, if the anti-dumping duty had the desired effect, the condition of the domestic industry would be expected to have improved during the period the anti-dumping duty was in effect. Therefore, the assessment whether injury will continue, or recur, would entail a counter-factual analysis of future events, based on projected levels of dumped imports, prices, and impact on domestic producers. Thus the D.A. has to address the question as to whether the domestic industry is likely to be materially injured again, if duties are lifted.
11. In the light the aforesaid legal position, we are of the view that the question to be addressed is not whether there is current dumping, but whether revocation of duty would result in recurrence of dumping and injury. In the peculiar facts of this case, the appellant chose to export only during a particular period (i.e. the period of investigation). The original duties were imposed on 27th March, 2003, and were due to expire on 26th March, 2008. The investigations were initiated on March 7, 2008 and the findings were rendered on March 26, 2009. From the findings, we note that there were no exports from March 2003 (when duties were imposed) till January 2007 nor any exports after December, 2007 by the appellant. The exports were made only during the period January to December 2007, which was known to be relevant for the sunset review investigations. No reason was given by the appellant as to why the exports were made to India only during this relatively short period. The fact that there were NO (i.e. Zero) exports prior to Jan. 2007 and after Dec. 2007 is certainly an occurrence which, besides being out-of-the-ordinary, has significant bearing for the decision whether these exports can be regarded as temporary and unreliable particularly when no good reasons are forthcoming from the appellant in this regard. The Authority has also found that the exports of the appellant to the world are at prices lower than those of other exporters in Indonesia. In these over all circumstances it has concluded that the appellants exports are unreliable and temporary and can not give any indication as to the likelihood of recurrence of dumping and injury in the future. The Designated Authoritys findings are set out in Paragraph 79 (ii) (of the Final Findings) as under:
In respect of exports from Indonesia, the Authority has taken note of the prices of the product reported in the WTA for exports made from Indonesia to the world and it has been noted that average exports prices by cooperating exporter i.e. M/s PT Asahimas Chemical Ltd. were reported lower than that of reported in WTA. (It has also matched with the data reported in the DGCI&S, though no exports have been reported by the cooperating exporter in the preceding years). The cooperating exporter has not reported any exports to India during the preceding years, however during the POI major quantity of the exports have been accounted for by the cooperating exporter in the total imports in India. During the POI exports have been made to be at un-dumped price, however, in view of the variation and lower prices by the exporter than the average prices reported in WTA it can not be safely concluded that M/s PT Asahimas would not resort to dumping in future particularly when M/s PT Asahimas has exported goods to India only during POI. Therefore, in view of the aforesaid, it appears that the export prices by M/s PT Asahimas are temporary and unreliable so that the dumping margin during the POI could be avoided though the same is not supported by the pattern of prices by the exporter. In view of the above, the Designated Authority has rejected the export price by the exporter as the likelihood of dumping cannot be ruled out. And hold that there is a likelihood of recurrence of dumping from Indonesia. In the light of the factual matrix discussed above, we find nothing unreasonable on the part of the Designated Authority in holding the appellants exports as unreliable and temporary.
12. Having found the exports of the appellant to be unreliable and temporary the Authority proceeded to determine the likelihood of dumping and injury based on the determination relating to other exports from Indonesia. The Authority found a positive dumping margin, in respect of other exports from Indonesia, as reflected in Paragraph 25 of the Final Findings. It is settled position that anti-dumping duties are required to be country specific and there is no legal requirement to determine the appellant-specific dumping margin in sun-set review. On the aspect of injury, although duties were in force, the domestic industry continued to be injured by the exports from Indonesia, as reflected in Paragraph 54 of the Final Findings. Thus the Authority rightly determined that there is a likelihood of dumping and injury, warranting continuation of duties from Indonesia.
13. As regards the grievance regarding inadequate disclosure, we find that the appellant has not clearly brought out the specific details, which were not provided to it. The Authority has disputed this. Even otherwise, the Authority has accepted all the information furnished by the appellant, and in respect of their exports determined a negative dumping margin based on the information furnished. Thus, they can not justifiably claim to have been prejudiced.
Order In the light of the foregoing, we do not find any infirmity in the findings of the Designated Authority. The appeal is therefore, dismissed.
(Justice G. Raghuram) President (Archana Wadhwa) Member (Judicial) (R.K. Singh) Member (Technical) K. Gupta 13