Custom, Excise & Service Tax Tribunal
M/S Automotive Tyre Manufacturer S ... vs Union Of India/Da on 5 September, 2016
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL West Block No. 2, R.K. Puram, New Delhi 110 066. Principal Bench, New Delhi COURT NO. I DATE OF HEARING : 30/08/2016. DATE OF DECISION : 05/09/2016. Anti Dumping Misc. Application No. 55879 of 2014 in Appeal No. 55371 of 2014 [Arising out of the Notification No. 35/2014-Customs (ADD) dated 24/07/2014 based on Final Findings of the Designated Authority, No. 15/01/2013-DGAD dated 29/04/2014.] M/s Automotive Tyre Manufacturers Association Appellant Versus Union of India/DA Respondent
Appearance Shri Ashish Chandra, Advocate for the appellant.
S/Shri Amit Singh, Advocate for DA and Govind Dixit, Authorized Representative (DR) for the Respondent.
For I.P. :
Ms. Reena Asthana Khair, Shri Rajesh Sharma and Ms. Rita Jha, Advocates for the appellant.
CORAM : Honble Shri Justice Dr. Satish Chandra, President Honble Mrs. Archana Wadhwa, Member (Judicial) Honble Shri B. Ravichandran, Member (Technical) Final Order No. 53366/2016 Dated : 05/09/2016 Per. B. Ravichandran :-
The appellant is the representative association of tyre manufacturers in India. The present appeal is against the Final Findings dated 29/4/2014 of the Designated Authority (the DA) Directorate General of Anti-Dumping and Allied Duties, Ministry of Commerce and Industry and Notification No. 35/2014 CUS (ADD) dated 24/7/2014 of Ministry of Finance imposing anti-dumping duty (AD duty) on certain rubber chemicals (subject goods).
2. The brief facts of the case are that M/s National Organic Chemicals Ltd. (NOCIL/DI) filed an application before the DA alleging continued dumping of subject goods originating in or exported from China PR and Korea RP. The AD duty on the subject goods were originally imposed on 12/12/2008 based on Final Findings of the DA dated 01/10/2008. In a mid-term review the AD duty on one of the subject goods [P x 1B (6 PPD)] was modified vide Notification No. 92/2011 dated 20/09/2011. The AD duty imposed was extended upto 04/5/2014 by the Central Government. The DA initiated sunset review on 30/4/2013. After following the procedure set out in Customs Tariff [Identification, Assessment and Collection of Anti-Dumping Duty on Dumped Articles and for Determination Injury] Rules, 1995, the DA recommended continuation of AD duties on the subject goods. The AD duties were notified by the impugned customs notification. The appellants representing Indian users are challenging the said continued imposition of AD duties.
3. The learned Counsel for the appellant submitted that :
(a) the principle of non-attribution as per para (v) of Annexure II of AD Rules has not been complied.
(b) the material injury analysis is inconsistent with the requirement of para (iv) of Annexure II of AD Rules.
(c) the DA erred in coming to conclusion that there is material injury in spite of the positive performance by the DI. The import data and the injury data does not support continuation of the AD duty on import of CBS. (one of the subject goods).
(d) there is no causal link between decline in profit and import from China PR.
(e) Customs Notification 35/2014 is inconsistent and ultravires of Section 9A (5) of the Customs Tariff Act, 1975 as it leads to imposition of AD duty for a period of 6 years.
4. The learned Counsel for the DI submitted that the appellants contention regarding application of para (v) of Annexure II to AD Rules is misleading and fallacious. She submitted that the safeguard duty and the AD duty are having specifically identified scope and application. The DG (SG) acts only when there is a surge/disruptive increase in import of any article. The DA acts when there is dumping causing injury to DI. In case there is determination of both the duties on a particular article (here PX 13) then one duty is deducted from the other to arrive at total duty impact on import. She submitted that SG duty on PX 13 was terminated in August, 2013, only AD duty is continuing. The DA has taken into consideration all the factors in analyzing the quantum of dumping and extend of injury to the DI.
5. Learned Counsel for the DA and learned AR for Revenue supported the Final Findings of the DA and the continued imposition of AD duty on subject goods. They specifically highlighted the various relevant factors as discussed in the Final Findings.
6. We have heard all the parties as above and carefully examined appeal papers and written submissions.
7. The continued imposition of AD duties on rubber chemicals consequent on sunset review by DA is under challenge. To begin with we note that there are six rubber chemicals which are subjected to AD duties. The appellants tried to make a case against such imposition in general as well as on specific chemicals.
8. The first point of the appellant is that when there was an investigation and imposition of safeguard duty on one of the subject goods then provisions of para (v) of Annexure II of AD Rules should been carefully examined and applied by the DA. In other words, this fact should have been considered as other factor impacting the DI. The AD duty was not justified on that chemical in such a situation. We note that there is no legal bar to have both AD duty and safeguard duty on a particular product at the same time. The only bar is that the DI should not be granted dual protection for the same injury. The AD duty imposed clearly stated that the quantum of AD duty shall be reduced from quantum of SG duty and only the difference shall be charged as SG duty. We find that the appellants claim on the ground that SG duty imposition is one of the other factor to be considered for injury has been dealt with by the DA. We have examined the claim of the appellant regarding error or inconsistently in arriving at the material injury. The DA has recorded that the growth of the domestic industry in terms of sales, production and capacity utilization was positive whereas growth in respect of profits, return on investment, cash profits and inventories was negative. This situation is in existence in spite of AD duty being in force.
9. We have examined the DAs analysis of injury to DI in respect of each of the rubber chemicals (para 93 of Findings). The appellant made strong plea regarding PX 13 and CBS. We have specifically studied the conclusion of the DA. We note that imports of PX 13 were significantly undercutting the prices of the DI even after adding customs duty, AD duty and SG duty. The performance of DI deteriorated over the injury period in respect of various parameters.
10. The import of CBS increased significantly in absolute terms. The imports were significantly undercutting the price of the DI as price could not be increased in proportion to increase in cost. The profitability and return on investment declined for DI during POI.
11. It is relevant to note that the subject countries have surplus disposable capacities for production of subject goods and in the event of withdrawal of AD duties there is likelihood of the surplus capacities being utilized to enhance exports at dumped prices. We have noted the data in para 101 of the Findings in this regard.
12. The causal link analysis has been made in respect of each one of the rubber chemicals. The magnitude of injury and injury margin has been arrived at after exhaustive analysis all the parameters. We find that the grounds raised by the appellant have all been dealt with by the DA and we find no legal or factual infirmity in the Findings of the DA.
13. Regarding the appellants plea on the validity of impugned customs notification we note that originally the AD duties were imposed vide Customs notification dated 12.12.2008/20.09.2011. The same were extended duly by the Central Government upto 4.5.2014. The present sunset review was initiated vide public notice dated 30/4/2013. The Final Findings were notified on 29/4/2014. The impugned customs notification was issued on 24/7/2014. The AD duty imposed therein is to be effective for a period of five years from that date. We find that the original notification extension and the impugned notifications are issued in exercise of specific powers vested under Section 9A of the Customs Tariff Act readwith AD Rules 18 and 23. We find no legal infirmity in exercise of such powers by the Central Government acting through the DA or the Department of Revenue.
14. On careful analysis of all points raised in appeal, we find no merit in the same and accordingly the appeal is dismissed.
(Order pronounced in the open court on 05/09/2016.) (Justice Dr. Satish Chandra) President (Archana Wadhwa) Member (Judicial) (B. Ravichandran) Member (Technical) PK ??
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