ORDER
M.V. Ravindran, Member (J)
1. The appellant – Domestic industry has challenged the final findings dated 27th July 2004 and the impugned notification issued on 28th September 2004 under Section 9A(1) & (5) of the Customs Tariff Act imposing anti dumping duty on sunset review and has prayed for the modification of the notification dated 28th September 2004 on the ground that the said impost is inadequate.
2. Designated authority had initiated investigation against the imports of Styrene Butadiene Rubber (SBR) from Japan, Korea RP and United States of America and imposed definitive anti dumping duty on the SBR originating in or exported from the above said three countries. The designated authority conducted a mid-term review in July 2001 and it was concluded that the definitive anti dumping duty should be continued on SBR. The designated authority suo-moto by the powers granted under Proviso to Sub-section (5) of Section 9A of the Customs Tariff Act notified the initiation of Sunset Review on 30th July 2003 with regard to continuation of anti dumping duty on SBR originating in or exported from Japan, Korea RP and United States of America. The designated authority forwarded a copy of the public notice and questionnaire to all known exporters and industry associations, importers and consumers of SBR in India calling for necessary information in accordance with Rule 6(4). Public hearing was held on 7th June 2004 to enable the interested parties to submit their views orally on which day the authority made available the Public file containing the non-confidential version of the evidence submitted by various interested parties for inspection. After considering all the arguments raised by all and the evidence on record the authority concluded that there is dumping of SBR from the countries and the domestic industry may suffer if the definitive anti dumping duty is removed. The designated authority recommended anti dumping duty on the imports of SBR from the three countries.
Preliminary objection to the appeal
3. Learned advocate appearing for one of the respondent raised a preliminary objection submitting that the Appeal has been filed by only one of the manufacturer and not the domestic industry as such. It was his submission that the appellant has no locus-standi, in as much, the petition for imposition of anti dumping duty was filed by the domestic industry and not by the appellant in his individual capacity. It was argued that in the absence of support of the other petitioner this appeal is liable to be dismissed. He relied upon the provisions of Section 9C of the Customs Tariff Act and submitted that right to appeal has been granted to “any person” and such person should have been necessarily a party before the original authority. He also relied upon Rule 2 of the CEGAT (countervailing Duty and Anti-dumping Duty) Procedure Rules, 1996 for the proposition that the domestic industry and interested party shall have the same meaning as ascribed to these expressions in Rule 2(b) and Rule 2(c) of Anti-dumping Rules. It was also submitted that Rule 5 of the said Rules also indicate who can be joined as respondent and a plain reading of the same will indicate that the appellant cannot file an appeal in an individual capacity.
4. Opposing the preliminary objection the learned advocate appearing for the appellant submitted that the appellant has 60% of market share and is eligible as major market share holder to file an appeal under Section 9C. It was submitted that plain reading of the definition of the an ‘interested party’ would itself enable the Appellant to file an appeal. It was submitted that the second manufacturer who is a constituent of the domestic industry is also supporting the appeal. The learned advocate appearing for the second manufacturer files an affidavit in support of the contention. It was also the submission that since the appellant is now being supported by the second manufacturer the preliminary objection may be overruled.
Arguments on behalf of the appellant.
5. The learned advocate for the appellant argued that the designated authority has erred in imposing reduced anti dumping duty, but supports the continuation of the anti dumping duty on the imports of SBR. It was submitted that the working of the constructed normal value is faulty and the authority has not considered it necessary to look to the data given by the domestic industry. It is the contention that the authority has considered the DGCIS data for arriving at the cost of the raw material, while disregarding the more authentic data as submitted by the appellant. It was submitted that the authority should have considered the data submitted by the domestic industry and arrived at the normal value to impose anti dumping duty. It is the contention that the authority has erred in deducting the freight element from the cost of the raw material and that the conversion cost has been faultily arrived at. It is also the contention that finance cost like interest etc were also arrived by taking a faulty basis. The learned advocate strongly contends that the authority should have disregarded the data available with it and should have worked out the normal value based on the data submitted by the domestic industry, as the exporters were non-co-operative. It was submitted that since there was non-co-operation of the exporters the authority should have considered the data from the published magazines like Japan chemical weekly for arriving at the raw material cost when the data was showing that the basic raw material required for manufacture of SBR was showing trend of increase in prices. It was submitted that since the methodology adopted for arriving at the normal value is faulty, the anti dumping duty imposed is inadequate and should be revised.
Arguments on behalf of Respondent-exporter from Korea.
6. The learned advocate appearing on behalf of the respondent- exporter from Korea RP submits that the designated authority has considered the available information and worked out the normal value. It was submitted that the raw material cost has been considered after the deduction of the ocean freight and other costs, as these costs were for the raw materials imported in to India. As regards the SGA and Finance cost it was submitted that the authority has correctly applied the provisions of para 4 of the Annexure I to ADD rules. It was also submitted that the authority has considered the data actually available from the records and the profit element has been correctly worked out based on the balance sheet on record.
Arguments on behalf of the Designated Authority.
7. The learned advocate appearing for the Designated authority submits that the authority has taken in to consideration the facts that the raw material for manufacture of SBR is not manufactured in Korea and has worked out the cost based on the DGCIS data reducing the ocean freight element but loaded other costs. It was also submitted that the normal value was constructed considering the conversion cost, other materials cost based on the verified data of the domestic Industry. The SGA, finance cost and profit has been worked based on the balance sheet on records. It was submitted that the authority has worked out the normal value to arrive at the dumping margin based on the available information and it can be considered the best judgment method. The learned advocate produces the confidential version of the allocation of the cost for the perusal of the bench.
Reasons
8.1 We considered the submissions made by the contending sides and perused the records. It is seen from the record that the Domestic Industry filed the petition for imposition of anti dumping duty on SBR imported from Japan, Korea RP and United States of America. The constituents of the domestic industry comprised of M/s Apar Limited and M/s Apcotex Industries Limited. The designated authority on verification of the claim of the petitioners accepted the petition and imposed a definitive anti dumping duty on the imports of SBR.
8.2 It is true that the appeal was filed by Apar Limited, but M/s Apcotex Industries Limited are shown as Respondent in the appeal filed by Apar Limited. It is settled law that a respondent at any stage during the proceedings can support the appellant. In this case we find that M/s Apcotex Industries Limited a respondent has filed an application indicating that they are extending full support to the appeal filed by Apar Limited and that the said appeal may be held as maintainable. There is an affidavit also accompanying the application. As such, the preliminary objection raised has no substance.
9.1 The issue involved in this case is whether the anti dumping duty imposed by the designated authority after the sunset review, is adequate to remove the material injury that may be caused to the domestic industry due to dumped imports.
9.2 The question that arises in this case is whether the designated authority has followed the provisions of the Customs Tariff Act while imposing the anti dumping duty, on the sunset review. In order to appreciate the rival contention it is necessary to read the provisions of Section 9A(5) which are as under:
Section 9A. Anti-dumping duty on dumped articles. – (1) Where any article is exported from any country or territory (hereinafter in this section referred to as the exporting country or territory) 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.
Explanation. – For the purpose of this section –
(1) …
(2) …
(3) …
(4) …
(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 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:
Provided further that where a review initiated before the expiry of the aforesaid period of five years has not come to a 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.
9.3 Plain reading the above provisions indicate that the designated authority on his own, undertook a review, whether the cessation of the duty would lead to continuation or recurrence of dumping and injury. In order to arrive at such a finding the designated authority has to follow the procedure set out in Rule 23 of Customs Tariff (Identification, Assessment and collection of anti dumping Duty on dumped Articles And for Determination of injury) Rules, 1995 (for brevity sake henceforth referred to as ADD Rules). The said Rule 23 reads as under:
23. Review. – (1) The designated authority shall, from time to time, review the need for the continued imposition of the anti-dumping duty and shall, if it is satisfied on the basis of information received by it that there is no justification for the continued imposition of such duty recommend to the Central Government for its withdrawal.
(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 Rule 6, 7, 8, 9, 10, 11, 16, 17, 18, 19, and 20 shall be mutatis mutandis applicable in the case of review.
9.4 We find from the record, that, the designated authority for the purpose of ascertaining whether there was justification for continued imposition of anti dumping duty on SBR, had called for the relevant information from the domestic industry as well as other interested parties. The domestic industry supplied all the relevant material whereas the exporters did not co-operate with the authority during the sunset review. The designated authority has taken in to consideration all the information supplied by the domestic industry and has verified the data before coming to final findings. The designated authority has taken in to consideration all the relevant parameters and has applied the same for arriving at the normal value to ascertain whether there were dumped imports.
9.5 The designated authority has come to the conclusion that the exporters are non-cooperative and proceeded to construct the normal value of the SBR in their country. To work out the normal value the designated authority has to consider the raw material costs, other costs and profit. In this case the designated authority has taken the cost of the raw material based on the DGCIS data, and found that the information is regarding the receipt of the raw material in India from Korea RP. In order to arrive at the correct raw material cost the designated authority reduced the ocean freight that was included in the data given by DGCIS. The reasoning is very clear, as the ocean freight to bring the raw material to India may not be applicable, to procure the raw material in those countries. The designated authority has worked out costs of the other material based on the percentage of cost worked out for the Domestic industry. He has considered the percentage of the cost to the main raw material and allocated the same to constructed normal value. As regards the conversion cost the designated authority has allocated the cost as percentage of the materials cost based on the domestic industry norms. The designated authority, on the submission of the domestic industry allocated the SGA and finance cost based on actual figures in the balance sheet of the manufacturer. It is seen that based on the submissions made by the domestic industry worked out the constructed normal value to arrive the dumping margin.
9.6 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.
9.7 From the record produced by the authority we find that the authority has correctly worked out the constructed normal value of the dumped article in accordance with the rules and the conventions followed, and came to a valid conclusion that the anti dumping duty has to be continued, albeit, less than the first definitive anti dumping duty. The calculation of the constructed normal value by the authority cannot be faulted with, as this was the conclusion any prudent man could arrive at, given the circumstances and information on record.
Final order
10. For the foregoing reasons, the contentions raised on behalf of the appellants against the impugned notification are misconceived and cannot be accepted. The appeal is, therefore dismissed.
(Pronounced on 4th May 2006)