Custom, Excise & Service Tax Tribunal
All India Laminated Fabric ... vs Designated Authority Directorate ... on 28 February, 2022
Author: Dilip Gupta
Bench: Dilip Gupta
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
NEW DELHI
PRINCIPAL BENCH-COURT NO.1
ANTI DUMPING APPEAL NO. 52173 OF 2021
[Arising out of Final Findings F No. 7/04/2021-DGTR dated 28.10.2021 of the
Designated Authority, Directorate General of Trade Remedies]
All India Laminated Fabrics Manufactures
Ii
Association ...Appellant
2nd Floor, Back Portion,
E-4, Mansarovar Garden
New Delhi-110015
Versus
1. Designated Authority, Directorate
General of Anti-Dumping and
Allied Duties
Ministry of Commerce & Industry
Parliament Street, Jeevan Tara
Building, 4th Floor, New Delhi-110001
2. The Union of India
Through the Secretary,
Ministry of Finance,
Department of Revenue,
North Block, New Delhi-110001
3. Pioneer Polyleathers Limited
B-46, Hosiery Complex Phase-2
Hosiery Complex Block B Rd, Noida
Uttar Pradesh 201305
4. Qrex Flex Pvt. Ltd.
GJ SH 186, Pipodara,
Gujarat 394110
5. SRF Limited
Block C, Sector 45,
Gurugram- 122 003, Haryana
India
6. China Embassy
50-D, Shantipath, Chanakyapuri,
New Delhi-110021
7. M/s Hytex Technical Textile
(Zhangjiagang)Co. Ltd.
32, Xinjian (Middle)Road,
Zhangjiagang Economic and
Development Zone
Jiangsu-215618
China
8. Haining Hengchuang Coated Fabric
Co Ltd.
No. 28 Jingbian Four Road, Industrials Garden
Haining City,
Zhejiang Province, China
2
AD/52173/2021
9. Navaratan Specialty Chemicals LLP
Sanand Viramgam Road,
Sanand, Dist, 383 170
Chharodi, Gujarat
10. Sunlex Fabrics Private Limited
8A, Nationals Highway,
Near Timbadi Patiya,
Morbi, Gujarat-363642
11. Addica Industries LLP
Survey No. 238/13, At Hirapur Village,
Tankara Latipar Road,
Tarkara, Gujarat-363650
12. Supersign Industries ...Respondents
E-4, Mansarover Garden New Delhi-110015 APPEARANCE:
Ms. Reena Khair, Mr. Rajesh Sharma, Ms. Shreya Dahiya, Advocates for the appellant Mr. Ameet Singh, Ms. Albina Wali, Advocates for the Designated Authority Mr. Devinder Bagia , Mr. Atul Gupta, Mr. Ankur Sharma, Mr. Jayant Raghu Ram, Ms. Shubhi Khare and Mr. Neeraj Chhabra, Advocates for Respondent No. 8 Mr. Nagendra Yadav, Authorised Representative for the Department CORAM:
HON'BLE MR. JUSTICE DILIP GUPTA, PRESIDENT HON'BLE MS. SULEKHA BEEVI C.S., MEMBER (JUDICIAL) HON'BLE MR. P.V. SUBBA RAO, MEMBER (TECHNICAL) Date of Hearing: February 18, 2022 Date of Decision: February 28, 2022 FINAL ORDER NO. 50171/2022 JUSTICE DILIP GUPTA :
The issuance of the notification dated 28.10.2021 containing the final findings of the designated authority recommending withdrawal of anti-dumping duty on the import of subject goods from the subject country, which anti-dumping duty had earlier been levied for a period 3 AD/52173/2021 of five years by customs notification dated 08.08.2016 issued by the Central Government on the basis of the final findings dated 30.06.2016 of the designated authority, has led to the filing of this appeal by All India Laminated Fabric Manufacturers Association, New Delhi 1 under section 9C of the Customs Tariff Act, 1975 2. The relief claimed in this appeal is that the aforesaid final findings dated 28.10.2021 notified by the designated authority may be modified and it be held that there is a likelihood of dumping and injury so that the anti-dumping duty on the subject goods from the subject country can be continued for a further period of five years.
2. Anti-dumping investigation concerning the imports of PVC Flex Film 3 from the China PR 4 was earlier initiated on 01.02.2010 by the designated authority on an application filed on behalf of the domestic industry. The designated authority ultimately recommended imposition of definite anti-dumping duties on imports of the subject goods from the subject country by a notification dated 29.07.2011 and thereafter, the Central Government issued the consequential notification dated 25.08.2011 imposing anti-dumping duty for a period of five years. The first sunset review investigation was initiated on 27.07.2015 at the behest of the appellant and a recommendation was made by the designated authority in the final findings, by a notification dated 30.06.2016, for continuation of anti-dumping duty. The Central Government issued the notification dated 08.08.2016 for continuance of the anti-dumping duty for a period of five years. It is before the
1. the appellant
2. the Tariff Act
3. the subject goods
4. the subject country 4 AD/52173/2021 expiry of the aforesaid period of five years that the appellant filed an application before the designated authority together with Pioneer Polyleathers Limited, Qrex Flex Private Limited and SRF Limited 5, who have been impleaded as respondent no's 3, 4 and 5 in this appeal, for initiation of a second sunset review investigation concerning imports of the subject goods originating in or exported from the subject country. PVC Flex Film is also known as PVC flex banners and PVC flex sheets for advertising signage, billboards and PVC flex tarpaulins. The products, namely, (i) PVC Films; (ii) PVC Rigid; (iii) Films Cotton/Canvas Tarpaulins; (iv) Self-adhesive Vinyl; (v) One way vision film/perforated window film; (vi) Coloured vinyl and (vii) Mesh Banner/Fabric were excluded from the scope of the product under consideration.
3. The designated authority, by a notification dated 24.03.2021, initiated the second sunset investigation to review the need for continued imposition of duties and to examine whether the expiry of such duty was likely to lead to continuation or recurrence of dumping and injury to the domestic industry. The period of investigation was notified to be from 01.10.2019 to 30.09.2020 and the injury investigation period was to cover the periods April 2017 to March 2018, April 2018 to March 2019, April 2019 to March 2020 as also the period of investigation. The designated authority also requested the Central Government for extension of the anti-dumping duty imposed by notification dated 08.08.2016 and the Central Government, by a notification dated 30.06.2021, in exercise of the powers conferred by sub-sections (1) and (5) of section 9A of the Tariff Act, directed for
5. the domestic producers 5 AD/52173/2021 continuance of the anti-dumping duty up to and inclusive of 31.01.2022, unless revoked, superseded or amended earlier.
4. The designated authority thereafter, issued a disclosure statement on 20.10.2021 in terms of rule 16 of the Customs Tariff (Identification, Assessment and Collection of Anti-dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995 6 and informed all the interested parties of the essential facts under consideration in order to enable the interested parties to offer their comments on the facts so gathered. It was also made clear that the designated authority will make the final determination on various aspects of the investigation on the basis of the comments received from the interested parties to the disclosure statement. The relevant portions of the disclosure statement under various heads are as follows:-
Determination of Dumping Margin:
"50. Considering the normal value and export price for the subject goods, the dumping margin for the subject goods from the subject country is proposed to be determined as follows:
SN Name of Normal Export Dumping Dumping Dumping
Producer Value Price Margin Margin Margin
(USD/MT) (USD/MT) (USD/MT) (%) (Range)
China PR
1 Heytex Technical *** *** *** *** 5-15
Textile
(Zhangjaingang)
Company
Limited
2 Non- *** *** *** *** 20-30
cooperative/
residual
exporters
6. the 1995 Rules
6
AD/52173/2021
Examination of Injury and Causal Link
53. The Authority has examined the arguments and counter arguments of the interested parties with regard to injury to the domestic industry. The injury analysis made by the Authority hereunder addresses the various submissions made by the interested parties.
Assessment of demand/apparent consumption
55. It is seen that the demand for the subject goods has increased till 2019-20 and declined thereafter in the period of investigation.
Volume effect of the dumped imports
56. With regard to the volume of the dumped imports, the Authority is required to consider whether there has been a significant increase in dumped imports, either in absolute terms or relative to production or consumption in India. For the purpose of injury analysis, the Authority has relied on the transaction wise import data procured from DGCI&S. The import volumes of the subject goods from the subject country and share of the dumped import during the injury investigation period are as follows:
Particulars Unit 2017-18 2018-19 2019-20 POI Subject imports MT 2,329 836 341 202 Other imports MT 7,846 5,758 7,185 4,444 Total MT 10,175 6,594 7,527 4,647 Imports in relation to Domestic Production % 1.50% 0.54% 0.21% 0.19% Consumption % 1.66% 0.56% 0.22% 0.20% Total imports % 23% 13% 5% 4%
57. The Authority notes that the volume of imports of the product under consideration from the subject country declined from the base year to the period of investigation, both in absolute and relative terms. In relation to consumption and production in India, subject imports recorded a similar trend from the base year to the period of investigation.
Price effect of the dumped imports
60. It is noted that price undercutting is negative for the subject country in the period of investigation.7
AD/52173/2021
62. It is seen that cost of sales increased in 2018-19, remained almost constant in 2019-20 and increased in the period of investigation. While the selling price of the domestic industry has declined over the injury period, the landed price of imports has increased. The domestic industry has itself conceded that its cost was higher during the period of investigation due to plant shutdown as a result of Covid-19.
Economic Parameters of the domestic industry
65. The Authority notes that:
i. The capacity of the domestic industry increased over the period.
ii. Production and sales increased in 2018-19, declined in 2019-20 and thereafter, steeply in the period of investigation. The applicants have claimed that such decline can be attributed to the effects of Covid-19 pandemic.
iii. The capacity utilization has declined over the injury period.
67. It is seen that the market share of the domestic industry has reduced throughout the injury period. However, the market share of other Indian producers as a whole has increased, while the market share of subject imports has declined.
71. The Authority notes that the profits per unit, cash profits and return on capital employed declined throughout the injury period. However, the volume of imports is too low to compel the domestic industry to sell at lower profits. The domestic industry has conceded that this is a result of Covid-19
73. It is seen that number of employees of the domestic industry increased till 2018-19 but declined thereafter. Further, the productivity of the domestic industry has declined over the injury period. The wages increased over the injury period.
75. It is noted that both the volume and profitability parameters of the domestic industry has witnessed negative growth in the period of investigation. The applicants have claimed that such decline in the period of investigation is due to the impact of Covid-19 pandemic.
77. The Authority notes that the volume of imports during the period of investigation was insignificant, and therefore, did not create a strain on the prices of the domestic industry. Selling 8 AD/52173/2021 price of the domestic industry has not been affected by the subject imports.
78. It is noted that the subject goods are being dumped into India despite anti-dumping duties and the dumping margin is positive and significant.
79. From the above, it is evident that while the domestic industry has suffered a decline in performance, such decline is not due to the subject imports, which are negligible in volume.
Likelihood of Recurrence of Dumping and Injury
80. The present investigation being a sunset review investigation, the fact that the whether domestic industry is not suffering injury or not is not relevant to determine whether the duties may be continued or not. In a sunset review investigation, the Authority is required to analyze whether revocation of a measure is likely to result in continuation or recurrence of injury to the domestic industry, contrary to the determination of injury in an original investigation.
81. The applicants have claimed that the following factors demonstrate that the cessation of duty is likely to lead to recurrence of dumping and injury.
a. Decline in imports due to present duties
82. ***** b. Significantly low-priced imports
83. ***** c. Continued dumping and injury margin
84. ***** d. Third country dumping
85. ***** e. Significant excess capacities for the production of the subject goods
86. ***** f. High degree of export orientation of exporters in the subject country
87. ***** g. Decline in demand from downstream industries
88. ***** h. Significant inventories held by the producers in China PR 9 AD/52173/2021
89. ***** i. Decline in exports from the subject country due to Covid-19
90. ***** j. Data filed by the responding producer
91. ***** Magnitude of Injury Margin
93. The non-injurious price of the subject goods produced by the domestic industry as determined by the Authority in terms of Annexure III to the Rules has been compared with the landed value of the exports from the subject country for determination of injury margin during the period of investigation and the injury margin so worked out is as under:
S.N. Name of Non- Landed Injury Injury Injury
Producers injurious Price margin margin margin
price
(Rs/MT) (Rs/MT) (Rs/MT) (%) (Range)
China PR
1. Heytex Technical *** *** *** *** Negative
Textile
(Zhangjiagang)
Company
Limited
2. Non- *** *** *** *** Negative
Cooperative/
residual exporters
Non-Attribution Analysis
94. As per the Rules, the Authority, inter alia, is required to examine any known factors other than the dumped imports which at the same time are injuring the domestic industry, so that the injury caused by these other factors may not be attributed to the dumped imports. Factors which may be relevant in this respect include, inter alia, the volume and prices of imports not sold at dumped prices, contraction in demand or changes in the patterns of consumption, trade restrictive practices of and competition between the foreign and domestic producers, developments in technology and the export performance and the productivity of the domestic industry. It has been examined below whether factors other than dumped imports could have contributed to the injury to the domestic industry."10
AD/52173/2021
5. After the submissions of the comments, the designated authority issued the final findings on 28.10.2021 and the examination by the designated authority of the submissions made by the interested parties and the domestic industry are reproduced below:-
"97. The Authority notes that some of the submissions by the domestic industry and other interested parties are repetitive in nature. These submissions have already been examined at appropriate places in the Final Findings. Further, the Authority has examined the additional submissions of the interested parties as under:
98. The arguments on the scope of product under consideration have been addressed by the Authority. It is confirmed that the scope of product under consideration is the same as that in previous investigation.
99. The interested parties have contended that the information concerning production, sales and capacities of supporters have not been examined by the Authority. The Authority notes that as per the provisions of the Customs Tariff Act, 1975 read with Anti-Dumping Rules, the Authority is required to examine injury only in respect of petitioners. Besides, when the petitioners themselves have not claimed injury, a conclusion cannot be reached that the domestic industry has suffered material injury, even if performance of other non-petitioning producers shows decline.
100. With regard to the arguments concerning determination of normal value based on imports from Korea RP, the same have already been examined hereinabove.
The interested parties have not brought forth any new information to establish that the normal value determined is inappropriate. Regarding the argument that the difference in prices of imports from China PR and Korea RP suggests that the quality of the two is different, it is noted that no evidence has been put forth by the interested parties to demonstrate differences in quality. Merely because the prices are different does not imply difference in the quality.
101. Regarding the claim that the normal value cannot be determined on the basis of price of exports from a market 11 AD/52173/2021 economy third country to an individual country, the Authority notes that the provisions of para 7 allow determination of normal value based on exports from a market economy third country to other countries, including India. In the present case, it was not possible to determine the normal value based on exports to all countries, as the product does not have a dedicated code. The Authority, in the past also has determined normal value based on the price of exports from a market economy third country to India. This approach has been affirmed by the Tribunal, in the case of Kuitun Jinjiang Chemical Industry Co. Ltd. vs. Designated Authority as well.
102. The interested parties have contended that the injury caused due to other factors such as Covid-19 pandemic, inter-se competition, restrictions on sales of plastic and increased fixed cost should be segregated. In this regard, the Authority notes that the domestic industry itself has admitted that the injury has not been caused due to subject imports and therefore there is no need of segregating injury caused by other factors.
103. With regard to the consideration of post-POI data, the Authority notes that none of the interested parties have brought forth any information to suggest that the position during post-POI is different from that prevailing during the period of investigation. Therefore, the Authority did not find any need for consideration of post-POI data."
6. The conclusion arrived at by the designated authority in the aforesaid final findings is that there was no justification for continuance of anti-dumping duty and it is as follows:
CONCLUSION "104. Having regard to the contentions raised, information provided, submissions made and facts available before the Authority as recorded in these findings and on the basis of the determination of dumping and consequent injury to the domestic industry made hereinabove, the Authority concludes that:
a. The volume of imports of subject goods from China PR has declined significantly both in absolute and relative terms. The imports of subject goods from China PR has 12 AD/52173/2021 been less than 1% of the Indian demand and Indian production from 2018-19 onwards.
b. The Authority notes that the decline in the performance of the domestic industry, therefore, is not attributable to the dumped imports, as admitted by the domestic industry itself too. c. The reliability and authenticity of the Report of Special Research and Investment Feasibility Assessment on China Polyvinyl Chloride Flexible Film/Sheet Market 2021-2025' relied upon by the domestic industry to establish the likelihood of continuation recurrence of injury is suspect because neither the name of the author/ publishing agency which has prepared this report has been mentioned nor is there any reference to the original source of data cited in the report. Therefore, any conclusion with regard to likelihood of continuation/recurrence of dumping and injury cannot be made on the basis of this report. d. Even though there is continued dumping of the subject goods from China PR, the likelihood of continuation/recurrence of injury to the domestic industry in the event of revocation of duty could not be conclusively established due to lack of sufficient independent corroborative evidence.
e. Therefore, based on examination of information on record, it is concluded that there is no justification for recommending continuation of anti-dumping duty in the present investigation.
(emphasis supplied)
7. Ultimately, the designated authority recommended for withdrawal of anti-dumping duty enforced by notification dated 08.08.2016, as further extended by notification dated 30.06.2021 upto 31.01.2022, and the recommendation is as follows:
RECOMMENDATION "105. In view of above, the Authority considers it appropriate to recommend withdrawal of antidumping duty on import of subject goods from the subject country recommended vide Notification No.15/13/2015-DGAD dated 30th June, 2016 and enforced vide Customs Notification No. 42/2016-
Customs (ADD) dated 8th August 2016 and further extended vide Customs notification No. 38/2021- Customs (ADD) dated 30th June 2021 till 31st January 2022."
13
AD/52173/2021
8. It needs to be noted that as the anti-dumping duty continued by the first sunset review notification dated 08.08.2016 was to end on 07.08.2021 but as the designated authority had initiated the second sunset review investigation by notification dated 24.03.2021 and the second sunset review had not concluded, the Central Government, by notification dated 30.06.2021, extended the anti-dumping duty upto an inclusive of 31.01.2022 unless it was revoked, superseded or amended earlier. After the issuance of the final findings dated 28.10.2021 issued by the designated authority, the Central Government issued a notification dated 24.01.2022, withdrawing the duty imposed by the notification dated 08.08.2016.
9. The present appeal was filed before the Tribunal on 23.12.2021 for modification of the final findings dated 28.10.2021 of the designated authority in such a manner that the anti-dumping duty could continue for a further period of five years.
10. Qrex Flex Pvt. Limited, however, filed a petition under article 226 of the Constitution before the Gujarat High Court (R/Special Civil Application No. 1622 of 2022). This Writ Petition was disposed of on 27.01.2022 with a direction to the Tribunal to decide the appeal within six weeks and the said direction is reproduced below:
"8. We dispose of this writ application with a direction that the Notification dated 24th January 2022 shall remain stayed from its operation for a period six weeks from today, and at the same time, the operation of the Notification dated 8th August 2016, as extended by the Notification dated 30th June 2021, shall continue for a period of six weeks. We direct the Tribunal to take up the appeals for hearing filed by the Association at any cost and decide them in accordance with law before the 14 AD/52173/2021 period of six weeks comes to an end. We expect the Union also to ensure that the Tribunal takes up the appeals for hearing and are decided in accordance with law before the expiry of six weeks."
11. The said order of the High Court was communicated by the appellant to the Tribunal only on 08.02.2022 and when the appeal was taken up on 14.02.2022, it was brought to the notice of the Bench that most of the respondents had not put in appearance. The hearing of the appeal was, therefore, adjourned and it was directed to be listed for hearing peremptorily at the top of the board on 17.02.2022.
12. Respondent no. 1, which is the designated authority, is represented by Shri Ameet Singh. Respondent no. 2, which is the Union of India, is represented by Shri Nagendra Yadav authorized representative of the Department. Respondent no's 3, 4 and 5 are the domestic producers who had filed the application for continuance of the anti-dumping duty together with the appellant. Respondent no. 6 is the China Embassy. Respondent no's 7 and 8 are the foreign importers. Respondent no. 7 is not represented despite service of notice but Shri Devinder Bagia, learned counsel has appeared on behalf of respondent no. 8. Respondent no's 9, 10, 11 and 12 are the domestic producers supporting the appellant.
13. Ms. Reena Khair assisted by Shri Rajesh Sharma and Ms. Shreya Dahiya, learned counsel appearing for the appellant made the following submissions:
(i) In a sunset review, if the Central Government is of the opinion that the cessation of duty is likely to lead to continuation or recurrence of dumping and injury, 15 AD/52173/2021 it may extend the duty for a further period of 5 years. The parameters relevant for a likelihood analysis have been examined by the Authority in paragraphs 80 to 92. Despite a positive finding on all the parameters related to likelihood of dumping and injury, the authority failed to recommend continuation of the anti-dumping duty;
(ii) The designated authority failed to appreciate that low volume of imports is not a relevant consideration in a sunset review. This is evident from the fact that rule 14 is conspicuously absent from rule 23(3) of the 1995 Rules. Thus, the fact that there were no imports or negligible imports was not a bar for continuation of duties in a sunset review as the test to be applied is the likelihood of continuation or recurrence of dumping and injury;
(iii) The settled jurisprudence is that a reduction or elimination of import after the imposition of anti-
dumping duty is indicative of the fact that the exporters are unable to sell in India with the duties in force. It further indicates, that on the expiry of the duty, that there is a strong likelihood of an increase in the volume of import.
(iv) In a sunset review, the condition of the domestic industry during the period when the duty is in force is not relevant. If the anti-dumping duty has the desired effect, the condition of the domestic industry would be expected to improve during the period the anti-dumping duty is in force. In the present case, the domestic industry remains vulnerable, and any benefit that it obtained will be eliminated if it is forced to compete with likely increased volumes of dumped imports.
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AD/52173/2021
(v) The authority rejected the market research report on the ground that neither the name of the author nor of the publishing agency was mentioned. The appellant had mentioned the relevant information from the report in the petition and furnished a copy of the report thereafter to the designated authority, on a confidential basis. The name, on the request of the agency, was not disclosed. The market research agency is based in China and is not permitted by law to disclose market information to persons outside China. The agency was apprehensive that Chinese Authority may initiate action against it, as this information was being used against the interests of producers and exporters in China;
(vi) Under the general provisions relating to secrecy, espionage and other laws, the Chinese Government could initiate action against such agencies. In 2021, the Data Security Law of the People's Republic of China was introduced, whereby under Article 36, domestic organization and individuals were prohibited from providing data stored within the mainland territory of China to the justice or law enforcement institution of a foreign country, without the prior approval of the competent authority. The market research agency had, therefore, cautioned the appellants regarding disclosure of its name in the public domain;
(vii) In terms of Article 6.5 of the Anti-Dumping Agreement, confidentiality can be claimed if disclosure of the information would have an adverse effect on the person from whom the information was acquired;
(viii) The designated authority did not at any stage prior to the final findings, raise any objection or query in 17 AD/52173/2021 this regard and accordingly, the appellant had no occasion to clarify this aspect. The appellant was under a bonafide belief that the designated authority was agreeable to proceed on the basis of the report. Had the authority called upon the appellant to disclose the name of the agency, the appellant would have done so on a confidential basis;
(ix) The provisions of paragraph 6 of Annex II to the Anti-Dumping Agreement further require the investigating authority to inform the interested party where the information or evidence provided is not accepted and provide an opportunity to the interested party to provide further explanations;
(x) Even if the report is not taken into consideration for the sake of argument, the remaining evidence points clearly to the likelihood of recurrence of dumping and injury. The Authority has not rendered any finding on the adequacy of the remaining material on record for coming to a conclusion on the issue; and
(xi) Finding on lack of independent corroborative evidence is incorrect.
14. Shri Devinder Bagia assisted by Shri Atul Gupta, Shri Ankur Sharma, Shri Jayant Raghu Ram, Ms. Shubhi Khare and Shri Neeraj Chhabra, learned counsel appearing for respondent no. 8 supported the impugned order and made the following submissions:
(i) The purpose of anti-dumping duty has been served and the appellant has not been able to make out any case for further continuation of the anti-dumping duty. The anti-dumping duty has been in force for over 11 years and as a result of trade remedial measures, the economic parameters of the domestic 18 AD/52173/2021 industries have significantly improved over the injury period as a result of which the subject imports stood declined to a meager 202 MT in the period of investigation from 2011-12. This is in a stark contrast to subject imports from other countries at 4,444 MT, especially from Korea RP which exported 4,273 MT (~92% of the total imports) to India during the period of investigation;
(ii) The domestic industry has successfully used the decline in subject imports in their favour, which is obvious from the remarkable improvement in financial parameters of the domestic industry along with an increase in capacity, production and sales;
(iii) When the original investigation was initiated, there were a handful of domestic producers of the like article in India. However, towards the initiation of the second sunset review, there were around fifteen plus domestic producers of the like article in India.
Further, as imports from China PR having trickled to miniscule quantities clearly shows that the purpose of anti-dumping duty has been served and that there is no need for further extension of anti-dumping duty;
(iv) The domestic industry was admittedly not suffering any form of material injury. Injury, if any, has already been attributed by the appellant to the current COVID- 19 pandemic. Price undercutting is negative. Injury margin is negative. There is absence of price suppression or depression. The designated authority after considering all the relevant facts in the investigation, concluded that there is a "lack of sufficient independent corroborative evidence"
establishing the likelihood of continuation/recurrence 19 AD/52173/2021 of injury to the domestic industry in the event of revocation of duty;
(v) The imposition of anti-dumping duty should come to an end on the expiry of five years unless there exist circumstances that warrant further protection to the domestic industry;
(vi) The domestic industry is not suffering material injury and there is no likelihood of recurrence or continuation of material injury to the domestic industry upon cessation of anti-dumping duty;
(vii) The domestic industry suffered decline in cash profits during the period of investigation due to the COVID pandemic. However, if the effect of COVID-19 is segregated and the adjusted period of investigation data is analyzed, the domestic industry's profitability parameters show a sharp improvement;
(viii) The domestic industry is oriented towards exports and has been growing its business in the export markets quite profitably. Pioneer, in particular, is extremely focussed on Brazilian markets;
(ix) The designated authority could not have arrived at conclusions in the disclosure statement. The disclosure statement is only intended to record essential facts;
(x) The designated authority was correct in not relying on an unauthored market research report;
(xi) The appellant did not raise any plea before this Tribunal in the appeal memorandum that it was barred from sharing the market intelligence report due to the existence of the new Data Secrecy Law and, therefore, it cannot be permitted to raise this plea at the time of hearing of the appeal since 20 AD/52173/2021 permission to urge this ground has not been sought from the Tribunal; and
(xii) The designated authority rightly disclosed "essential facts under consideration" in the disclosure statement as per rule 16 of the 1995 rules.
15. Shri Ameet Singh learned counsel appearing for the designated authority also supported the impugned order and made the following submissions:
(i) Once the designated authority had conducted an objective examination of the facts after the considering the information available on record and made the recommendation for discontinuation of anti-dumping duty, the appellate Tribunal should normally not interfere with the exercise of such discretion;
(ii) The designated authority took into consideration the fact that the volume of imports of the subject goods from the subject country had declined from the base year to the period of investigation, both in absolute and relative terms and that the volume of imports was less than 1% of India demand and Indian production from 2018-19 onwards;
(iii) The price undercutting due to imports from the subject country was negative and that the selling price of the domestic industry declined over the injury period whereas the landed price of imports had increased;
(iv) The report on which reliance was placed by the appellant was correctly not taken into consideration by the designated authority since even the name of the author/agency that had prepared the report was not mentioned. In the absence of any reference to 21 AD/52173/2021 the original source of data, the report was suspicious; and
(v) The designated authority had to determine the continuance or recurrence of dumping and injury on the basis of facts and not merely on the bases of allegation, conjectures or remote possibility.
16. Shri Nagendra Yadav learned authorised representative appearing for the Union of India also supported the impugned order and made the following submissions:
(i) The decision taken by the designated authority does not suffer of any perversity and in this connection reliance has been placed on the following decisions:
(a) Eveready Industries India Ltd. vs. Union of India 7;
(b) Alembic Ltd. vs. Union of India 8; and
(c) Sales Tax Officer vs. Shree Durga Oil Mills 9;
17. The submissions advanced on behalf of the parties have been considered.
18. Section 9A of the Tariff Act deals with anti-dumping duty on dumped articles. It provides that if any article is exported by an exporter or producer from any country 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. 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
7. 2019 (367) E.L.T. 53 (Del.)
8. 2013 (291) E.L.T. 327 (Guj.)
9. 1998 (97) E.L.T. 202 (S.C.) 22 AD/52173/2021 country. Normal value has been defined to mean the comparable prices for the like article when destined for consumption in the exporting country.
19. Sub-section (5) of section 9A of the Tariff Act provides that anti- dumping duty imposed shall, unless revoked earlier, cease to have effect on the expiry of five years from the date of such imposition. The first proviso stipulates that if the Central Government, in a review, is of the opinion that the cessation of such duty is likely to lead to continuance 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.
20. Rule 23 of the 1995 Rules deals with review and it is reproduced below:
"Rule 23. Review (1) Any anti-dumping duty imposed under the provision of section 9A of the Act, shall remain in force, so long as and to the extent necessary, to counteract dumping, which is causing injury.
(1A) The designated authority shall review the need for the continued imposition of any anti-dumping duty, where warranted, on its own initiative or upon request by any interested party who submits positive information substantiating the need for such review, and a reasonable period of time has elapsed since the imposition of the definitive anti-dumping duty and upon such review, the designated authority shall recommend to the Central Government for its withdrawal, where it comes to a conclusion that the injury to the domestic industry is not likely to continue or recur, if the said anti-dumping duty is removed or varied and is therefore no longer warranted.23
AD/52173/2021 (1B) Notwithstanding anything contained in sub-rule (1) or (1A), any definitive anti dumping duty levied under the Act, shall be effective for a period not exceeding five years from the date of its imposition, unless the designated authority comes to a conclusion, on a review initiated before that period on its own initiative or upon a duly substantiated request made by or on behalf of the domestic industry within a reasonable period of time prior to the expiry of that period, that the expiry of the said anti-dumping duty is likely to lead to continuation or recurrence of dumping and injury to the domestic industry.
(2) Any review initiated under sub-rule (1) shall be concluded within a period not exceeding twelve months from the date of initiation of such review.
(3) The provisions of rules 6,7,8,9,10,11,16,17,18, 19, and 20 shall be mutatis mutandis applicable in the case of review."
21. It would be seen that in view of the provisions of rule 23(3), rule 11 of the 1995 Rules would be applicable to 'sunset reviews'. Rule 11 deals with determination of injury and sub-rule (2) of Rule 11 of the 1995 Rules is reproduced below:
"Rule 11:
(i) xxxxxxx
(ii) The designated authority shall determine the injury to domestic industry, threat of injury to domestic industry, material retardation to establishment of domestic industry and a causal link between dumped imports and injury, taking into account all relevant facts, including the volume of dumped imports, their effect on price in the domestic market for like articles and the consequent effect of such imports on domestic producers of such articles and in accordance with the principles set out in Annexure II to these rules."24
AD/52173/2021
22. Rule 11(2) refers to the principles set out in Annexure II to the 1995 Rules which deals with the principles for determination of injury and the relevant portion of the said Annexure is reproduced below:
Principles for determination of injury "The designated authority while determining the injury or threat of material injury to domestic industry or material retardation of the establishment of such an industry, hereinafter referred to as "injury" and causal link between dumped imports and such injury, shall inter alia, take following principles under consideration -
(i) xxxxxxxxx
(ii) While examining the volume of dumped imports, the said authority shall consider whether there has been a significant increase in the dumped imports, either in absolute terms or relative to production or consumption in India. With regard to the affect of the dumped imports on prices as referred to in sub-rule (2) of rule 18 the designated authority shall consider whether there has been a significant price under cutting by the dumped imports as compared with the price of like product in India, or whether the effect of such imports is otherwise to depress prices to a significant degree or prevent price increase which otherwise would have occurred, to a significant degree.
(iii) xxxxxxxxxx
(iv) xxxxxxxxxx
(v) xxxxxxxxxx
(vi) xxxxxxxxxx
(vii) A determination of a threat of material injury shall be based on facts and not merely on allegation, conjecture or remote possibility. The change in circumstances which would create a situation in which the dumping would cause injury must be clearly foreseen and imminent. In making a determination regarding the existence of a threat of material injury, the designated authority shall consider, inter alia, such factors as:
(a) a significant rate of increase of dumped imports into India indicating the likelihood of substantially increased importation;
(b) sufficient freely disposable, or an imminent, substantial increase in, capacity of the exporter indicating the likelihood of substantially 25 AD/52173/2021 increased dumped exports to Indian markets, taking into account the availability of other export markets to absorb any additional exports;
(c) whether imports are entering at prices that will have a significant depressing or suppressing effect on domestic prices, and would likely increase demand for further imports; and
(d) inventories of the article being investigated.
23. It would be seen that the determination of threat of material injury to domestic industry is required to be based on facts and not merely on allegation, conjecture or remote possibility. The change in circumstances which would create a situation in which the dumping would cause injury must be clearly foreseen and imminent.
24. At this stage, it would also be pertinent to refer to the 'Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 10'. Article 1 deals with principles, while Article 11 deals with duration and review of anti-dumping duties and price undertakings. These Articles are reproduced below:
"Article 1 Principles An anti-dumping measure shall be applied only under the circumstances provided for in Article VI of GATT 1994 and pursuant to investigations initiated and conducted in accordance with the provisions of this Agreement. The following provisions govern the application of Article VI of GATT 1994 in so far as action is taken under anti-dumping legislation or regulations.
Article 11 Duration and Review of Anti-Dumping Duties and Price Undertakings 11.1 An anti-dumping duty shall remain in force only as long as and to the extent necessary to counteract dumping which is causing injury.
10. 1994 Agreement 26 AD/52173/2021 11.2 The authorities shall review the need for the continued imposition of the duty, where warranted, on their own initiative or, provided that a reasonable period of time has elapsed since the imposition of the definitive anti-dumping duty, upon request by any interested party which submits positive information substantiating the need for a review. Interested parties shall have the right to request the authorities to examine whether the continued imposition of the duty is necessary to offset dumping, whether the injury would be likely to continue or recur if the duty were removed or varied, or both. If, as a result of the review under this paragraph, the authorities determine that the anti-dumping duty is no longer warranted, it shall be terminated immediately."
"11.3 Notwithstanding the provisions of paragraphs 1 and 2, any definitive anti-dumping duty shall be terminated on a date not later than five years from its imposition (or from the date of the most recent review under paragraph 2 if that review has covered both dumping and injury, or under this paragraph), unless the authorities determine, in a review initiated before that date on their own initiative or upon a duly substantiated request made by or on behalf of the domestic industry within a reasonable period of time prior to that date, that the expiry of the duty would be likely to lead to continuation or recurrence of dumping and injury. The duty may remain in force pending the outcome of such a review.
11.4 The provisions of Article 6 regarding evidence and procedure shall apply to any review carried out under this Article. Any such review shall be carried out expeditiously and shall normally be concluded within 12 months of the date of initiation of the review.
11.5 The provisions of this Article shall apply mutatis mutandis to price undertakings accepted under Article
8."
25. It needs to be remembered that the nature of exercise to be undertaken in a 'sunset review' is different from the initial exercise 27 AD/52173/2021 that is undertaken for determining whether anti-dumping duty is to be levied or not. In a review, the focus is on whether withdrawal of anti- dumping duty would lead to continuance or recurrence of dumping as well as injury to the domestic industry.
26. In this connection reference can be made to a decision of the Tribunal in Thai Acrylic Fibre Ltd. vs. Designated Authority11 wherein it was observed:
"13. 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 case antidumping duties are removed. With respect to the question whether dumping is likely to occur in the event that the anti- dumping duties are removed, the D.A. has to consider relevant economic facts which might indicate that in the event the anti-dumping duty is removed, dumping will recur. With respect to the injury determination, if the anti-dumping duty has 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.
14. Sunset review entails a likelihood determination in which present levels of dumping is obviously not so relevant as is the likelihood of continuance or recurrence of dumping. Moreover, during the investigation period, 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
11. 2010 (253) E.L.T. 564 (Tri.-Del) 28 AD/52173/2021 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."
(emphasis supplied)
27. In Rishiroop Polymers (P) Ltd. vs. Designated Authority & Additional Secretary 12, the Supreme Court observed as follows:
"36. 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 there 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."
(emphasis supplied)
28. In APAR Industries Ltd. vs. Designated Authority13, the Tribunal followed the aforesaid observations of the Supreme Court and held:
12. (2006) 4 Supreme Court Cases 303 29 AD/52173/2021 "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 antidumping 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."
(emphasis supplied)
29. In Borax Morarji Limited vs. Designated Authority 14, the Tribunal noted that:
"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 antidumping 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."
13. 2006 (200) E.L.T. 34 (Tri.-Del.) CESTAT
14. 2007 (215) E.L.T. 33 (Tri. - Del.), CESTAT 30 AD/52173/2021
30. The Tribunal in M/s SI Group India Private Limited vs. Designated Authority and The Union of India 15 also observed as follows:
"12. Thus, the object and purpose of the sunset review as explained in the aforesaid judgments, precisely is to examine as to whether on removal of anti dumping duty, there is likelihood of recurrence of dumping and injury to the domestic industry. It has also been held that the degree and extent of dumping and consequent injury to the domestic industry during the POI is not of much relevance.
13. The mandate or requirement under Section 9A(5) of CTA,1975 read with Rule 23 of Anti dumping Rules,1995 and Annexure-II (vii) is that the authority has to examine all relevant aspects to ascertain the likelihood of dumping and injury, once the present anti dumping duty is removed. It is obvious that such determination cannot be based on a guess work or on mere assumption & presumption, but definitely to rest on the past & present facts, influencing the trend of dumping, resultant injury, performance and other relevant economic and other factors relating to the domestic Industries as well as the exporting Industries/countries to analyse and arrive at a probable situation of continuation of dumping and injury in future to the domestic industry. There is no dispute or quarrel on the fact that it should be on the basis of some tangible evidence. Therefore, the procedure prescribed to address the interest of all interested parties for imposition of anti dumping duty are also applicable to the sun set review proceedings even though with different objective."
(emphasis supplied)
31. What transpires from the aforesaid discussion is that though the anti-dumping duty imposed under sub-section (1) of section 9A of the Tariff Act shall cease to have effect on the expiry of five years from the
15. Anti-Dumping Appeal No. 50430 of 2019 decided on 28.11.2019 31 AD/52173/2021 date of such imposition, but under sub-section (5) of section 9A, the Central Government, in a review, can extend the period of such imposition for a further period of five years if the Central Government is of the opinion that cessation of such duty is likely to lead to continuance or recurrence of dumping and injury. Rule 23 of the 1995 Rules provides that though the definitive anti-dumping duty shall be effective for a period not exceeding five years from the date of its publication, but an exception has been culled out namely that the designated authority can extend the period provided the designated authority comes to a conclusion upon a duly substantiated request by the domestic industry that the expiry of the anti-dumping duty would likely lead to continuation or recurrence of dumping and injury to the domestic industry. It also provides that rule 11 of the 1995 Rules would also be applicable to sunset reviews and rule 11 of the 1995 Rules requires the designated authority to determine threat of injury to the domestic industry taking into account all relevant facts in accordance with the principles set out in Annexure II of the Rules. Clause (vii) of Annexure II provides that a determination of a threat of material injury shall be based on facts and not merely on allegation, conjecture or remote possibility and that the change in circumstances which would create a situation in which the dumping would cause injury must be clearly foreseen and imminent. This has also been provided in the 1994 Agreement. It, therefore, follows that under the aforesaid statutory scheme, the designated authority is mandated to undertake a rigorous examination of all the following three factors before deciding to continue the anti-dumping duty: 32
AD/52173/2021
(i) There is a 'duly substantiated request' made by the domestic industry which implies that the domestic industry has to provide cogent evidence to substantiate its claim;
(ii) There is a likelihood of continuation or recurrence of dumping in case duties are revoked; and
(iii) There is likelihood of continuation or recurrence of injury to the domestic industry in case duties are revoked.
32. In the present case, the designated authority discontinued the anti-dumping duty since the first and third conditions were found on determination to be absent.
33. The nature of exercise to be undertaken in a 'sunset review' is also entirely different from the exercise that is required to be undertaken in the original investigation undertaken for levy of anti- dumping duty. The focus in a 'sunset review' is on whether the withdrawal of anti-dumping duty would lead to continuation or recurrence of dumping and injury to the domestic industry. The assessment whether injury will continue or recur would entail a factual analysis of future events based on projected levels of dumped imports, prices and impact on domestic producers. The determination in a sunset review cannot be based on guesswork or on mere assumption or presumption but it should be based on some tangible evidence.
34. In the present case, as noticed above, the designated authority concluded in the final findings that cessation of duty was not likely to lead to continuation or recurrence of dumping and injury and the conclusions are as follows:
"Conclusion on injury and likelihood of continuation or recurrence of dumping and injury 33 AD/52173/2021
94. The domestic industry has suffered a decline in performance due to the effects of Covid-19 pandemic. With regard to likelihood of dumping and recurrence of injury, the Authority notes as under:
i. The volume of imports of subject goods from China PR has declined significantly both in absolute and relative terms. The imports of subject goods from China PR has been less than 1% of the Indian demand and Indian production from 2018-19 onwards.
ii. To establish the likelihood of
continuation/recurrence of injury, the
domestic industry has furnished 'Report of Special Research and Investment Feasibility Assessment on China Polyvinyl Chloride Flexible Film/Sheet Market 2021-2025'. However, the name of the author/agency which has prepared this report has not been mentioned in the report. The data source for the report has been indicated as 'the project team statistical collation' but there is no reference to original source of data.The reliability and authenticity of this report therefore is suspect and thus no conclusion can be arrived at regarding likelihood analysis.
iii. Even though there is continued dumping of the subject goods from China PR, sufficient independent evidence corroborating the likelihood of continuation/recurrence of injury to the domestic industry in the event of revocation of duty is not available.
(emphasis supplied)
35. As noticed above, the designated authority concluded that though the domestic industry suffered a decline in performance but that was due to the Covid-19 pandemic effect. In regard to the likelihood of dumping and recurrence of injury, the designated authority concluded that the volume of imports of subject goods from the subject country declined sufficiently both in absolute and relative 34 AD/52173/2021 terms and from the report relied upon by the appellant to establish the likelihood of continuance or recurrence of injury no conclusion could be arrived at regarding likelihood analysis since the name of the author or the agency which prepared the report was not mentioned in the report nor the data source for the report was provided. The designated authority also concluded that though there was continued dumping of the subject goods from the subject country but the appellant had not provided sufficient independent evidence corroborating the likelihood of continuation or recurrence of injury to the domestic industry in the event duty was revoked.
36. It would be seen that to substantiate that cessation of anti- dumping duty, which had earlier been levied by notification dated 25.08.2011 for a period of five years and thereafter continued for another period of five years on the basis of notification dated 30.06.2016 in reference to the first sunset review, was likely to lead to continuation or recurrence of dumping and injury, the appellant placed strong reliance upon the 'Report of Special Research and Investment Feasibility Assessment on China Polyvinyl Chloride Flexible Film/Sheet Market 2021-2025'. The designated authority, in the final findings, did not consider it appropriate to place reliance on the said report for the reason that the name of the author or the agency which prepared the report was not mentioned nor the report made any mention of the original source of data.
37. Learned counsel for the appellant submitted that the designated authority committed an error in rejecting the market research report that had been submitted by the appellant before the designated authority. The submissions of learned counsel for the appellant is that 35 AD/52173/2021 though the appellant had not given the name of the market research agency, but if the designated authority had called upon the appellant to disclose the name of the agency, the appellant would have done so on a confidential basis. Learned counsel also stated that the reason why the appellant had not provided the name of the market research agency was that since the market research agency was based in China, it was not permitted by Data Secrecy Law to disclose the market information to persons outside China. In this connection reliance has been placed by the learned counsel for the appellant on WTO Panel Report dated 28.10.2011 in European Union Anti- Dumping Measures on Certain Footwear from China 16 and WTO Panel Report dated 24.07.2020 in European Union Cost Adjustment Mythology and Certain Anti-Dumping Measures 17.
38. Learned counsel appearing for the foreign exporter (respondent no. 8) however, submitted that the appellant did not raise any plea before this Tribunal in the Appeal Memorandum that it was barred from sharing the name of author or the agency that prepared the market intelligence report due to the existence of a new Data Secrecy Law that was enacted in September 2021 by the Government of China PR and infact the factum of existence of such a law is a new fact brought before this Tribunal for the first time at the time of hearing. Learned counsel also submitted that rule 7 of the CEGAT Countervailing Duty and Anti-Dumping Duty (Procedure) Rules, 1996 applies rule 10 of the Customs Excise and Gold (Control) Appellate Tribunal (Procedure) Rules, 1982 to anti-dumping appeals and rule 10
16. WT/DS405/R
17. WT/DS494/R 36 AD/52173/2021 provides that the appellant shall not, except with the leave of the Tribunal, urge or be heard in support of any ground not set forth in the memorandum of appeal. It was, therefore, submitted that since the appellant had not sought any leave of the Tribunal to urge or to be heard in support of this ground not taken in the memorandum of appeal, the appellant cannot be permitted to raise this plea. On merits, learned counsel submitted the designated authority was justified in not placing reliance on the report relied upon by the domestic industry to establish the likelihood of continuance or recurrence of dumping and injury for the reason that the report itself was suspect because neither the name of the author or the agency which had prepared the report was mentioned, nor there was any reference to the original source of data cited in the report. In this connection learned counsel for the respondent placed reliance upon the decision of the Tribunal in Dye Stuff Manufacturers Association of India vs. Govt. of India 18. Learned counsel also pointed out that the appeal filed by the department against the aforesaid decision of the Tribunal was dismissed by the Supreme Court on 26.03.2015.
39. This market research report, according to the appellant, went to the heart of the issue of likelihood of continuance or recurrence of dumping and injury and it has been submitted that if the designated authority found that the report was unreliable, it should have granted an opportunity to the appellant to establish its reliability.
40. It is not possible to accept this contention of learned counsel for the appellant. In the first instance, as submitted by learned counsel for respondent no. 8, the appellant cannot be permitted to urge at this
18. 2003 (157) E.L.T. 154 (Tri.-Del.) 37 AD/52173/2021 stage that it was barred from sharing the name of the author/agency of the marketing intelligence report due to the Data Secrecy Law as this ground was not raised in the appeal memorandum nor any permission was sought from the Tribunal to raise this plea at the time of hearing of the appeal. This apart, this law was enacted in September 2021 after the report was shared with the designated authority and it is not the case of the appellant that this law had any retrospective application. In fact, the contention of the appellant is that in case the designated authority had asked, the appellant would have shared the name of the author with the designated authority even though, according to the appellant, it was prevented earlier to do so.
41. This issue was examined by the Tribunal in Dye Stuff Manufacturers Association. In this case the domestic industry had relied on a trade journal 'Chemical Week' to claim that the 'normal value' of Aniline in Europe was in the range of USD 880-925/MT and to allege that the exports of the goods from European Unit to India were made at a prices far below the normal value. The Tribunal held that when the source material was not disclosed nor the authenticity thereof established, it was not proper for the designated authority to have placed reliance upon the report. What was contained in the journal was only an article on Aniline industry and the same could not have provided 'judicially noticeable facts'. Infact, the contents of the article were nothing more than statements in the press. The Tribunal, therefore, held that the designated authority wrongly relied upon the report to determine the normal value.
38
AD/52173/2021
42. The department filed an appeal before the Supreme Court in Secretary (Revenue) Government of India & Anr. vs. Dyestuffs Manufacturers Association of India & Ors. 19. The Supreme Court, after reproducing paragraph 7 of the decision of the Tribunal in its entirety, which paragraph relates to the rejection of the report contained in the Trade Journal relied upon by the domestic industry, dismissed the appeal as it was satisfied with the analysis undertaken by the Tribunal.
43. It also needs to be noted that rule 7 of the 1995 Rules requires any interested party to provide non confidential summary of the confidential information to other interested parties or provide reason why such a summary cannot be provided. The appellant did not provide the non confidential summary of the report to other interested parties nor did it give any reason for not providing the same, though respondent no. 8 in the legal submissions had raised this issue.
44. As noticed above, what has to be determined in a sunset review is whether withdrawal of anti-dumping duty would lead to continuance or recurrence of injury to the domestic industry. This determination cannot be based on guess work or on mere assumption or presumption but should be based on some tangible and positive evidence. The designated authority has to conduct a rigorous examination in a sunset review before the exception that duty should be continued can apply. This requires an appropriate degree of diligence on the part of the designated authority. It cannot be urged that since after the imposition of anti-dumping duties, imports had
19. Civil Appeal Nos. 1788-1789 of 2004 decided on 26.03.2015 39 AD/52173/2021 declined and domestic production had increased, it is possible that after cessation of anti-dumping duty, the imports would increase and the domestic production would reduce. There has to be a strong explanation as to why this would happen as mere possibility of injury to domestic industry is not sufficient. This aspect was examined at length in the report of the Panel in "Pakistan-Anti-Dumping Measures on Biaxially Oriented Polypropylene Film From the United Arab Emirates" 20 and the relevant portion of the report is reproduced below:
"7.602. We recall that, under Article 11.3, an authority must determine that the continuation or recurrence of injury is likely, and not merely possible, and that this determination must be based on positive evidence and not on assumption.
7.603. We note that the NTC reasoned that, since after the imposition of anti-dumping duties imports had declined and domestic production had increased, it was likely that the opposite would happen if the duties were removed. While the fact that imports declined significantly and domestic production increased significantly after the imposition of the anti-dumping duties suggests that it is possible that the opposite could happen upon removal of the duties, the NTC did not explain why it considered these developments to be likely to occur (and not just possible). Given the absence of any further explanation in this regard, we are of the view that the NTC's finding that "termination of anti-dumping duties will likely result in an increase in imports of the product under review which will affect adversely ... the productions of the domestic like product was essentially conclusory in nature. We therefore find that the NTC failed to provide a reasoned and adequate explanation to support its finding that imports of BOPP film would likely increase in the event anti-dumping duties on these imports were to be removed."
(emphasis supplied)
20. WT/DS538/R decided on 18.01.2021 40 AD/52173/2021
45. It would also be useful to examine the Report of the Appellate Body in "United States-Anti-Dumping Measures on Oil Country Tubular Goods (OCTG) From Mexico" 21. The Appellate Body examined the provisions of Article 11.3 of the Agreement, which provision is also contained in rule 23(1B) of the 1995 Rules, and emphasised that it is necessary for an affirmative determination that there is proof of likelihood of continuation of recurrence of dumping and injury, when the duty expires. Though the nature of evidence required for such proof may vary with the facts and circumstances of each case, but the determination must rest on "sufficient factual basis"
that allows the investigating authority to draw "reasons and adequate conclusions". The relevant portion of the report is reproduced below:
"123. As we stated earlier, in a sunset review determination under Article 11.3, the nexus to be demonstrated is between "the expiry of the duty" on the one hand, and the likelihood of "continuation or recurrence of dumping and injury" on the other hand. We note that Article 11.3, in fact, expressly postulates that, at the time of a sunset review, dumping and injury, or either of them, may have ceased, but that expiration of the duty may be likely to lead to "recurrence of dumping and injury". Therefore, what is essential for an affirmative determination under Article 11.3 is proof of likelihood of continuation or recurrence of dumping and injury, if the duty expires. The nature and extent of the evidence required for such proof will vary with the facts and circumstances of the case under review. Furthermore, as the Appellate Body has emphasized previously, determinations under Article 11.3 must rest on a "sufficient factual basis" that allows the investigating authority to draw "reasoned and adequate conclusions"."
46. Article 11.3 of the 1994 Agreement also came up for interpretation before the Appellate Body in United States Sunset
21. WT/DS282/AB/R decided on 2 November 2005 41 AD/52173/2021 Review of Anti-Dumping Duties on Corrosion-Resistant Carbon Steel Flat Products from Japan 22. The appellate body placed emphasis upon the word 'unless' and observed that this would suggest that the designated authority would have to conduct a rigorous examination in a sunset review before resorting to the exception for continuance of the anti-dumping duty. The appellate body also observed that the sunset review requires an appropriate degree of diligence. It also agreed with the panel report that the requirement to make a 'determination' concerning the likelihood precludes the designated authority from simply assuming that likelihood exists. The observations are as follows:
"113. The Article 11.3 states that notwithstanding the provisions of Articles 11.1 and 11.2, anti-dumping duty shall be terminate not later than five years from its impositions "unless"
the authorities make an affirmative likelihood determination in a sunset review. This confirms that the mandatory rule in Article 11.3 applies in addition to, and irrespective of, the obligations set out in the first two paragraphs of article 11. This also suggests to us that authorities must conduct a rigorous examination in a sunset review before the exception (namely, the continuation of the duty) can apply. In addition, our view of the exacting nature of the obligations imposed on authorities under article 11.3 is supported by a consideration of the implications of initiating a sunset review. The last sentence of Article 11.3 allows the relevant duty to continue while the review is underway, and Article 11.4 contemplates that the review process may take up to one year. These provisions create an additional exception to the requirement that anti-dumping duties will be terminated after five years, permitting a Member to maintain the duty for the period during which the review is ongoing, regardless of the outcome of that review. This, too, suggests that the drafters of the Anti-Dumping Agreement saw the sunset review as a rigorous process that can take up to one year, involving a number of procedural steps, and
22. WT/DS244/AB/R decided on 15 December 2003 42 AD/52173/2021 requiring an appropriate degree of diligence on the part of the national authorities.
114 The Panel described Article 11.3 as imposing the following obligations on investigating authorities in a sunset review:
The text of Article 11.3 contains an obligation "to determine" likelihood of continuation or recurrence of dumping and injury. The text of Article 11.3 does not, however, provide explicit guidance regarding the meaning of the term "determine". The ordinary meaning of the word "determine" is to "find out or establish precisely" or to "decide or settle". The requirement to make a "determination" concerning likelihood therefore precludes an investigating authority from simply assuming that likelihood exists. In order to continue the imposition of the measure after the expiry of the five-year application period, it is clear that the investigating authority has to determine, on the basis of positive evidence, that termination of the duty is likely to lead to continuation or recurrence of dumping and injury. An investigating authority must have a sufficient factual basis to allow it to draw reasoned and adequate conclusions concerning the likelihood of such continuation or recurrence.
115 The Panel's description of the obligations of investigating authorities in conducting a sunset review closely resembles our own, and we agree with it."
(emphasis supplied)
47. In this view of the matter, the designated authority was justified in holding that there did not exist sufficient factual material to allow the designated authority to conclude that there was a likelihood of continuation or recurrence of injury in case of cessation of anti- dumping duty.
48. Learned counsel for the appellant also placed reliance upon paragraphs 80 to 92 of the final findings and submitted that the parameters relevant for likelihood of continuation or recurrence of dumping and injury had been examined by the designated authority 43 AD/52173/2021 and a positive finding was recorded, but despite such a finding the designated authority arrived at contrary finding.
49. It is not possible to accept this submission of the learned counsel for the appellant. What has been recorded in paragraphs 80 to 92 of the final findings are the submissions advanced on behalf of the appellant and this is clear from a perusal of paragraph 81 wherein it has been stated that 'the applicant have claimed that the following factors demonstrate that the cessation of duty is likely to lead to recurrence of dumping and injury'. Thus, what has been recorded in paragraphs 80 to 92 are not the findings but the contention of the appellant relating to various factors like decline in imports due to present duties, significantly low-priced imports, continued dumping and injury margin, third country dumping, significant excess capacities for the production of the subject goods, high degree of export orientation of exporters in the subject country, decline in demand from downstream industries, significant inventories held by the producers in the subject country are decline in exports from the subject country due to Covid-19. The appellant is, therefore, not justified in asserting that what has been recorded in the aforesaid paragraphs is a finding of the designated authority as the designated authority has merely recorded the submissions of the appellant. The findings on the aforesaid issues have been given by the designated authority in paragraph 94 of the final findings, which paragraph has been reproduced above. It needs to be noted that in terms of rule 16 of the 1995 Rules, the designated authority was only required to inform all interested parties of the essential facts under considerations which 44 AD/52173/2021 would form the basis of its decision and these facts were disclosed by the designated authority in the disclosure statement.
50. It is also not possible to accept the contention of learned counsel for the appellant that the designated authority should have given an opportunity to the appellant if it was not accepting the report. It was for the appellant to have made a duly substantiated request which means that the domestic industry had to provide cogent evidence to substantiate its claim. It was, therefore, the duty of the appellant to have provided the name of the author of the report. Even otherwise, as noticed above, the report does not give the source of the data contained in the report. Such a report could not, therefore, have been relied upon by the designated authority in view of the specific provisions in contained in rule 8 of the 1995 Rules that provides that the designated authority shall, during the course of investigation, satisfy itself as to the accuracy of the information supplied by the interested parties upon which its findings are based.
51. Learned counsel for the appellant placed reliance upon the Panel Report dated 08.10.2011 in "European Union Anti-Dumping Measures on Certain Footwear From China". This report deals with confidential treatment. The other report of the Panel dated 24.07.2020 relied upon by the learned counsel for the appellant also relates to confidential treatment. The issue in the present appeal is not regarding the confidentiality to be granted or not, but it is regarding the disclosure to the designated authority, even if it was considered to be confidential, the name of the author/publishing agency of the report in which even the data source was not indicated. 45
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52. Thus, the designated authority committed no illegality in not placing reliance upon the unauthenticated report. The burden of proof was on the appellant to provide tangible evidence in sunset review to substantiate that cessation of anti-dumping duty would lead to continuance or recurrence of anti-dumping. The appellant failed to discharge this burden.
53. Learned counsel for the appellant also questioned the absence of 'Exporters Questionnaire-Part II- Further Information Concerning the Sunset Review' response by respondent no. 8 before the designated authority in the 'sunset review' investigation being conducted.
54. Learned counsel appearing for the respondent no. 8 however submitted and it was not necessary for the said respondent to file a response to the aforesaid questionnaire since it had not exported the subject goods to India during the period of investigation or during the injury period and that it was allowed to participate by the designated authority when it submitted legal submissions for the purpose of opposing continuance of anti-dumping duty. Learned counsel for respondent no. 8 also submitted that it was not required to file the Supplementary or Additional Questionnaire (Part-II) since the Main Questionnaire (Part-I) was not applicable to the respondent.
55. There is considerable force in the submissions advanced by learned counsel appearing for respondent no. 8. Respondent no. 8 had not exported the subject goods to India during the period of investigation or during the injury period. The final findings of the designated authority do not show that any objection was raised either by the designated authority or by the interested parties to the non filling of the 'Exporter Questionnaire - Part-II' by respondent no. 8 and 46 AD/52173/2021 in fact respondent no. 8 had participated by filing the legal submissions for the purpose of opposing continuance of anti-dumping duty. This apart, if respondent no. 8 was not required to file the Main Questionnaire (Part-I), it cannot be urged that it was required to file (Part-II) of the Exporter Questionnaire. Nothing has also been brought on record by the appellant which may indicate that if Questionnaire (Part-I) is not required to be filed, it is still necessary to file (Part-II) of the Questionnaire.
56. Learned counsel for the appellant also submitted that volume of subject imports and present injury to the domestic industry were not relevant for the purpose of determining likelihood of continuance of dumping and injury.
57. It is seen that there is no specific provision either in the Tariff Act or the 1995 Rules that specifically governs how the designated authority should examine the likelihood. The designated authority has relied upon paragraph (vii) of Annexure-II to the 1995 Rules to examine the factors relevant for determining threat of material injury. The appellant themselves have relied upon factors (b) and (d) given in paragraph (vii) in connection with the likelihood of dumping and injury and the designed authority also appreciated all the factors while determining the likelihood, including the significant rate of decrease in dumped imports, imports entering India at prices which are not at all suppressing or depressing the domestic prices. This approach of the designated authority is supported by the decision of the Supreme Court in Rishiroop Polymers, which decision was followed by the Tribunal in APAR Industries.
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58. A perusal for the final findings of the designated authority reveal that the trend of import volumes and landed (import) prices, and its effect on the domestic industry together with the increase in capacity, production, sales of the domestic industry, its market share, along with negative price undercutting and negative injury margins led the designated authority to conclude that there was no likelihood of injury. It is for this reason that the designated authority recommended discontinuation of anti-dumping duties.
59. The final findings of the designated authority, therefore, for all the reasons stated above, do not call for any interference in this appeal.
60. The appeal is, accordingly, dismissed.
(Order pronounced on 28.02.2022) (JUSTICE DILIP GUPTA) PRESIDENT (SULEKHA BEEVI C.S.) MEMBER (JUDICIAL) (P.V. SUBBA RAO) MEMBER (TECHNICAL) Rekha/Shreya/JB