ORDER
K. Sreedharan, J. (President)
1. These appeals arise out of final findings arrived at by the Designated Authority in the Anti-dumping investigation concerning import of Styrene Butadiene Rubber (hereinafter referred to as SBR) from Japan, Korea RP, Turkey, Taiwan, USA, Germany and France. Final findings were notified in the Gazette of India dated 2-6-1999. As per the final order anti-dumping duties were imposed on SBR of 1500 Grade, 1700 Grade and 1900 Grade at various rates.
2. M/s. Automotive Tyre Manufacturers Association challenged the correctness of findings arrived at by the Designated Authority in imposing anti-dumping duty by preferring Appeal C/264/99. Main argument advanced by the learned Counsel representing the appellants herein are that import of SBR of 1500 Grade, 1700 Grade and 1900 Grade has not gone to cause any material injury to the domestic industry and that no causal link between the dumped imports and the injury to the domestic industry has been established.
3. M/s. Rishiroop Polymers Pvt. Ltd., an authorised agent and representative of M/s. Korea Kumho Petrochemical Company Limited (hereinafter referred to as KKPC) is the appellant in Appeal C/332/99. They questioned the correctness of the finding arrived at by the Designated Authority in final order dated 2-6-1999 imposing anti-dumping duty on imports from KKPC through the appellant, namely, M/s. Rishiroop Polymers Pvt. Ltd. The question raised in this appeal is also identical to those raised in Appeal C/264/99, namely, that there is no material injury caused to the domestic industry and that there is no causal link between the alleged dumping and injury, if any, caused to the domestic industry.
4. Before proceeding with the appeals further, it is worthwhile to state that learned Counsel appearing in these appeals did not urge any ground before us at the time of final hearing other than that domestic industry has not suffered injury on account of the import of SBR from subject countries and that there is no causal link between the injury and import from subject countries. In other words, no argument was advanced before us on the ground that articles imported from subject countries are not “like articles” as manufactured by the domestic industry; that the fixation of normal value and the dumping margin was not correct. Nor was there any argument on the fixation of fair selling price of the articles manufactured by the domestic industry. Therefore, we are not going into the question as to whether the fixation of normal value and the dumping margin of the articles imported from subject countries are correct or not. Nor are we going into the question as to whether the normal selling price fixed by the Designated Authority is correct.
5. In the above circumstances, we dispose of these appeals by this common order.
6. First of all we will take up the issue as to whether any injury has been caused to the domestic industry. M/s. Synthetic & Chemicals Ltd. filed petition dated 9th September, 1997 before the Designated Authority constituted under the Customs Tariff Act and Customs Tariff (Identification, Assessment and Collection of Anti-dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995 (hereinafter referred to as the Rules). It was alleged therein that import of SBR from subject countries are causing injury to the industry manufacturing SBR. They furnished details regarding the normal value of the products in the subject countries and the margin of dumping. As a result of the dumped imports of SBR it was alleged that domestic industry, namely, M/s. Synthetic & Chemicals Ltd. are incurring heavy loss on its SBR activity. It was further alleged that in spite of the cost of production in the subject countries, exporters from there were reducing their export price consistently and that this has forced the domestic industry to reduce their selling price of various grades of SBR. It was the petitioner’s case that selling prices realised by them are so low that they are unable to recover even the cost of production. Domestic consumers insisted on getting more deductions from the list price and consequently effective sales realisation was reduced by 25% since January, 1997. The dumped materials have retarded the growth of domestic industry in spite of installation of new plant and machinery. The expansion programme could not be commissioned and dumped imports threatened to cause injury for future also due to sufficient freely disposable production capacities in the subject countries.
7. On the basis of the application submitted by M/s. Synthetic & Chemicals Ltd., domestic indsutry, the Designated Authority initiated investigation against the subject countries. Public Notice dated 7-4-1998 was published initiating anti-dumping investigation concerning imports of SBR classified under custom sub-heading 4002.19 of Schedule I of Customs Tariff Act, originating in or exported from the subject countries. The period of investigation was fixed by the Designated Authority as 1-4-1996 to 31-8-1997, a period of 17 months. On the basis of materials collected the Designated Authority published its preliminary finding as per Notification dated 21-1-1999. As per that Notification anti-dumping duties were imposed on different grades of SBR originating from subject countries at the rates mentioned in the notification. The Designated Authority further invited details and comments from all interested parties including the exporters from subject countries.
8. As stated earlier, there is no challenge on the correctness of the normal value fixed by the Designated Authority on the various grades of SBR manufactured in the subject countries. Export price of those quantities to India have also been found correctly by the Designated Authority on the basis of acceptable and reliable documents by which they have been imported into India. The difference between the normal value and the export price is the dumping margin. Under Section 9A of the Act, Central Government can impose anti-dumping duty not exceeding the said dumping margin. The Designated Authority has to find out the normal selling price of the articles manufactured by the domestic industry so that it can save itself from any injury. The difference between the fair selling price and the landed value of the articles imported will be the injury margin. Anti-dumping duty must be imposed in such a manner as to cancel the injury margin. Even if injury margin is beyond the dumping margin, anti-dumping duty cannot exceed the dumping margin. So the dumping margin can be the maximum limit of dumping duty that can be imposed on articles imported from subject countries. Learned Counsel appearing on behalf of the appellants tried to impress upon us that the injury caused to the domestic industry is not on account of the import of SBR from subject countries but on account of their own mal-administration; disadvantageous location of the plant, difficulty in clearing inputs required for the manufacture of SBR at the Kandla Port, location of companies manufacturing tyres far away from their plant, etc. In a proceeding under the Act and the Rules with which we are concerned, the Designated Authority is not very much concerned with the drawbacks of the domestic industry which were highlighted by the learned Counsel appearing on behalf of the appellants. Domestic industry has to survive the impact of dumping of the articles from the subject countries. It is for the protection of domestic industry from unfair trading practices that anti-dumping duty is contemplated under the Act and the Rules. Domestic industry as it exists cannot be forced to close down on account of dumping of the articles at price lesser than the normal value. Normal selling price of the domestic industry was quantified by the Designated Authority by considering the optimum cost of production at optimum level of capacity. This means that the Designated Authority had fixed the cost of production taking into consideration the entire situation in which the domestic industry is placed. The said cost of production so fixed by the Designated Authority at optimum level of capacity cannot be faulted.
9. Another argument that was advanced by the learned Counsel representing the appellants is that domestic industry is carrying on profitably the manufacture of some of the products and so they are not injured by import of SBR from subject countries. We are not in a position to agree with this argument. Domestic industry has been defined under Section 2(b). It, inter alia, states that “domestic industry” means the domestic producers as a whole engaged in the manufacture of the like article. This means that in the case of an investigation under the Act and the Rules, the domestic industry is not a particular company as such but only that which manufactures the like article. The “like article” mentioned in the definition is important. If an industry like M/s. Synthetic & Chemicals Ltd. manufactures articles other than SBR and they initiate proceedings in relation to SBR and SBR only, the injury caused to M/s. Synthetic & Chemicals Ltd. in the manufacture of SBR alone is to be taken into consideration. The fact that they are making huge profit in the manufacture of other articles is no ground to throw away their petition on the ground that M/s. Synthetic & Chemicals Ltd. are not sustaining any loss. This aspect, we like to highlight by an example. Take a company engaged in the production and sale of cosmetics and hardwares. They complained to the Designated Authority that on account of dumping of hardwares from subject countries they are injured. Investigation initiated by the Designated Authority should proceed, to examine whether the alleged dumping of hardwares from subject countries causes injury to the petitioner domestic industry in hardware. The petitioner while suffering loss in hardware is making huge profit in its business in cosmetics. Taking into consideration the profit in the business of cos metics, it is not possible to say that the manufacturer has no difficulty; but as far as the other business in hardware is concerned they are suffering injury on account of the dumping of the like articles from subject countries. In such a situation the fact that the company is making profits otherwise cannot be urged before the Designated Authority to show that no injury is caused to the domestic industry. The “domestic industry” in a case should be understood with reference to the definition, namely, the industry which manufactures the like article.
10. In view of what has been stated above, we hold that the argument advanced by the learned Counsel representing the appellants that domestic industry is not sustaining injury cannot be accepted.
11. Similarly, the argument of the learned Counsel that the location of the factory of the petitioner, transportation charges for supply of SBR from their factory to the tyre manufacturers etc. are reasons for their reduction or loss in busines&cannot be accepted, for, the Designated Authority while fixing the fair selling price took into consideration the optimum cost of production at optimum level capacity.
12. Main argument advanced by the learned Counsel representing the appellants was that in assessing injury to the domestic industry in the case of certain parameters, the data relating to it for the year immediately preceding the period of investigation was taken into consideration and in relation to other parameters periods far anterior were taken into consideration. The argument was that the Designated Authority referred to data in relation to various periods to find out the most favourable ones for the domestic industry and found injury to it. In other words, the contention is that Designated Authority was not using same yardstick in evaluating the extent of injury in respect of various parameters. We went through the confidential data furnished to the Designated Authority and the work-sheet made out of those details. From those materials it is proved beyond doubt that while assessing the various parameters to find out the injury to domestic industry, Designated Authority made reference to the corresponding details for the year 1995-96. Even though data for 1994-95 was also noted in the work-sheet, assessments were made based on the data relating to the year 1995-96 only. Compared to 1995-96 there was noticeable increase in stock of various grades of SBR with the domestic industry; that there was considerable increase of imports from subject countries; there was loss in the profitability on the manufacture of SBR and in relation to average realisation. On going through those data we are convinced that the domestic industry suffered drastic decline in all the relevant parameters during the period of investigation compared to those of the immediately preceding financial year, namely, 1995-96. We do not find any justification for taking a different approach to the issue ignoring the data given by the Designated Authority, which is fully supported by materials furnished by the domestic industry, foreign importers and on the basis of data collected by the Designated Authority. We accept those data and conclusions arrived at by the Designated Authority on the question of injury.
13. The subject under consideration by the Designated Authority was “Styrene Butadiene Rubber.” Chapter 40 of the Tariff Act deals with “Rubber and Articles Thereof”. Tariff Entry 4001.00 relates to :
“Natural Rubber, balata, gutta percha, Guayule, chicle and similar natural gums, in primary forms or in plates, sheets or strips.”
Tariff Entry 4002.00 reads –
“Synthetic rubber and factice derived from oils in primary forms or in plates, sheets or strip; mixtures of any product of Heading No. 40.01 with any product of this heading, in primary forms or in plates, sheets or strip.”
14. A question arises as to whether some grades of the article under consideration will fall under Chapter Heading 3903.90. 39.03 of the Tariff Entry deals with “Polymers of styrene, in primary forms”. Sub-heading 3903.90 refers to other categories of the above article.
15. Dealing with this issue, the Designated Authority in paragraph 7 of the final findings observed –
“The Authority thus holds that whereas it is not justified to coyer all items falling under the sub-heading 3903.90, for the purpose of imposing anti-dumping duty in present case the anti-dumping duty however is payable on Styrene Butadiene Rubber of specified series as stated, even if it is sought to be cleared under any other heading of the Customs Tariff Act. The Custom Authorities are at liberty and expected to classify the goods correctly, if the goods offered for clearance are not classified correctly.”
From this it is clear that the Designated Authority wanted to impose anti-dumping duty on all grades of Styrene Butadiene Rubber irrespective of whether it is put under Heading 39.03 or 40.02. But while concluding the final finding, Anti-dumping duty has been imposed on SBR falling under sub-heading 4002.19 only. This is a clerical omission which is required to be corrected. Thus, we make it clear that Anti-dumping duty is on all grades of SBR, whether falling under sub-heading 4002 or 3903. Customs Authorities have to impose duty on all types of SBR, irrespective of their classification.
16. In B.L.A. Industries & Others (Final Order Nos. 6-15/2000/AD, dated 21-1-2000, we took the view that Anti-dumping duty should be imposed on US $. Otherwise the effect of that duty will be eroded on account of the change in the exchange value of Rupee vis-a-vis US $. That situation is more conspicuous in this case. During the period of investigation, 1996-97, exchange rate was Rs. 37 per US $. As on today, 1 US $ costs more than Rs. 43. In international trade, price is fixed on US $. Anti-dumping duty should also be imposed on US $. Otherwise, by US $ becoming dearer vis-a-vis Indian Rupee, tax liability will become reduced. In order to safeguard the interest of the domestic industry, such reduction in Anti-dumping duty should not happen. Consequently, we vary the Anti-dumping duty in terms of US $. It is worthwhile to note here that injury found by the Designated Authority, namely, difference between fair selling price and the landed value of different grades of SBR imported from foreign countries is far greater than the dumping margin, namely, the difference between normal value and the export price. As per Section 9A of the Act, the maximum anti-dumping duty can only be the dumping margin. Accordingly, we fix the anti dumping duty in respect of various grades of SBR from various countries in the following manner :
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Sl. Country Producer/ Grade Amount ($ per
No. Exporter ton)
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1. USA All Exporters 1500 Series -
1700 Series 97.49
1900 Series 189.89
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2. Taiwan Taiwan Synthetic 1500 Series 62
Rubber Corpn. 1700 Series
1900 Series 90
Others 1500 Series 90
1700 Series -
1900 Series 90
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3. Turkey Petkim Petrokimya 1500 Series 232
1700 Series -
1900 Series 272.99
Others 1500 Series 297
1700 Series -
1900 Series 272.99
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4. Korea Korea Kumho 1500 Series 138.56
1700 Series 30.27
Other Exporters 1500 Series 204
1700 Series 30.27
1900 Series 204
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5. Japan JSR Corpn. 1500 Series 104.18
1700 Series 25.67
1900 Series 156.93
Others 1500 Series 104.18
1700 Series 25.67
1900 Series 156.93
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Anti-dumping duty fixed by the Designated Authority in relation to import of various grades of SBR from subject countries is refixed as stated above.
17. Appeals are disposed of in the above terms.