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Cus – ADD on Paracetamol – Conclusions by DA are diametrically opposed to the material on record, there is non-advertance to the material placed on record and non-compliance with principles of natural justice – Order quashed and set aside: HC

2019-TIOL-1847-HC-AHM-CUS

IN THE HIGH COURT OF GUJARAT

AT AHMEDABAD

R/Special Civil Application No. 5278 Of 2019

FARMSON PHARMACEUTICALS GUJARAT PVT LTD

Vs

UNION OF INDIA

S R Brahmbhatt & Dr A P Thaker, JJ

Dated: July 03, 2019

Appellant Rep by: Mr SN Soparkar For Gargi R Vyas (7983)
Respondent Rep by: 
Mr Ravi Prakash With Mr Devang Vyas (2794), Mr Nirzar S Desai (2117)

Cus – Anti-dumping duty – Impugned Final Finding recorded in the Notification No.7/16/2018-DGAD dated 29.01.2019, cannot be said to be strictly in accordance with the provision of Rule 23 of the Rules, as there is non-advertance to the material placed on record and there is non-compliance with the principle of natural justice as no requisite information was made available and the conclusions are diametrically opposed to the material on record – Therefore, Court is left with no other alternative, but to remand back the matter to the authority concerned after quashing and setting aside the same for reconsideration on the aspects which have been mentioned and record its finding and as the extended period of notification of anti dumping duty is ending, the same is also required to be extended for appropriate time so that assessing the material and recording the final findings afresh could be undertaken meaningfully and without jeopardizing the parties right and contentions and rendering it infructuous – respondent no.2 is directed to undertake the exercise of recording its final finding afresh in accordance with the observations made strictly in accordance with the provisions of Rule-23 of the Rules and after affording full opportunity to the parties and complying with the principles of natural justice and respondent no.1 shall appropriately issue notification extending the anti dumping duty on the product in question, till the final findings are rendered – The impugned final findings dated 29.01.2019 are hereby quashed and set aside – petition is allowed: High Court [para 29 to 31]

Petition allowed

Case laws cited:

Nirma Limited Vs. Union of India – 2017-TIOL-2183-HC-AHM-CUS…..Para 9.1 & 17

Reliance Industries Limited Vs. Designated Authority and others – 2006-TIOL-120-SC-AD…..Para 9.1, 17.1 & 28

Union of India and another Vs. Meghmani Organics Limited – 2016-TIOL-170-SC-CUS-LB…..Para 9.1, 17.2 & 28

DCW Limited Vs. Union of India, rendered on 11.06.2018 Special Civil Applications No.14202 of 2017…..Para 9.1

Rishiroop Polymers (P) Ltd. Vs. Designated Authority and Additional Secretary – 2006-TIOL-26-SC-AD…..Para 10.1

Indian Metal and Ferro Alloys Ltd. Vs. Designated Authority, Ministry – 2007-TIOL-682-HC-DEL-AD…..Para 10.1

Kanoria Chemicals and Industries Ltd Vs. Designated Authority, Directorate General of Allied Duties and others – 2015-TIOL-3019-CESTAT-DEL-LB…..Para 10.1

Designated Authority Vs. Sandisk International Ltd. – 2017-TIOL-78-SC-CUS…..Para 10.1 & 15

Jindal Poly Film Ltd. Vs. Designated Authority and others – 2018-TIOL-1970-HC-DEL-CUS…..Para 10.1 & 14

Suncity Sheets Pvt. Ltd. Vs. Designated Authority – 2017-TIOL-1553-HC-DEL-CUS…..Para 10.1 & 14

Spacewood Furnishers Vs. Designated Authority and others – 2010-TIOL-246-HC-MUM-AD…..Para 10.1 & 14

Shew Kumar Agarwal and Others Vs. Union of India, reported in (2002) 1 CALLT 588 HC…..Para 10.1 & 14

Union of India (UOI) and others Vs. Kumho Petrochemicals Company Limited and others, reported in AIR 2017 SC 3357…..Para 10.1

Eveready Industries India Ltd. Vs. Union of India, reported in 2019 SCC Online Del 7865…..Para 10.1

Sterlite Industries (India) Ltd. Vs. Designated Authority – 2003-TIOL-28-SC-AD…..Para 10.1

Fragrances Flavours Association of India Vs. Designated Authority – 2011-TIOL-1924-CESTAT-DEL…..Para 10.1

Huawei Tech. Co. Ltd. Vs. Designated Authority – 2011-TIOL-1547-CESTAT-DEL…..Para 10.1

Supreme Court Employees Welfare Association Vs. Union of India reported in (1989) 4 SCC 187…..Para 10.1

Census Commissioner and others Vs. R. Krishnamurthy, reported in (2015) 2 SCC 796…..Para 10.1

Kerala Colour Lab Association Vs. UOI – 2003-TIOL-19-HC-KERALA-ST…..Para 10.1

R. K. Garg Vs. UOI – 2002-TIOL-1706-SC-IT-CB…..Para 10.1

Rusom Cavasiee Cooper Vs. Union of India, reported in (1970) 1 SCC 248…..Para 10.1

Suresh Seth Vs. Commr., Indore Municipal Corporation reported in (2005) 13 SCC 287…..Para 10.1

Haridas Exports Vs. All India Float Glass Manufacturer Association and others – 2002-TIOL-669-SC-CUS-LB…..Para 10.1

JUDGEMENT

Per: Dr A P Thaker:

1. Heard learned counsels for the parties. As the counsels for the parties have exchanged their pleadings and argued the matter extensively for final disposal, this matter is being heard and disposed of finally.

2. The present petition has been preferred by the petitioners under Article 226 of the Constitution of India for the following prayers.

A. This Hon’ble Court be pleased to issue a writ of certiorari or a writ in the nature of certiorari, so as to quash and set aside Impugned Final Finding No.7/16/2018-DGAD dated 29.01.2019 along with Disclosure Statement dated 15.01.2019 issued by the Respondent no.2 and annexed at Annexure – G and H hereto; and

B. Pending admission, hearing and final disposal of this petition, this Hon’ble Court be pleased to direct Respondent No.3 not to refrain from taking any steps in furtherance of the Impugned Final Finding dated 29.01.2019 issued by it and annexed as Annexure – G and Annexure – H hereto;

C. Pending admission, hearing and final disposal of this petition, this Hon’ble Court be pleased to direct the Respondent nos.1 to 4 to ensure that subject goods that may be cleared are duly accounted for and further the importers be notified about pendency of the present petition before this Hon’ble Court and subject to the outcome of the same;

D. Ad-interim reliefs in terms of prayers (B) and (C) above;

E. Ex parte ad-interim reliefs in terms of prayer (D) above;

F. For cost; and

G. Such other and further orders as may be considered fit and expedient in the facts of the case be passed.

3. It is contended that the petitioner No.1 is a company incorporated under the provisions of the Companies Act, 1956 and is engaged in the business of manufacturing “Paracetamol” (hereinafter be referred to as “the subject goods) in the State of Gujarat and petitioner No.2 is a shareholder of petitioner No.1 and concerned with the day to day activities of the company. Whereas, respondent No.1 is the Ministry of Commerce, Government of India and control respondent No.2, the Designated Authority (DA) is functioning and respondent No.4 is a Central Board of Indirect Taxes and Customs is the Nodal National Agency Responsible for Administering Customs, GST, Central Excise, Service Tax and Narcotics in India. It is contended that respondent No.2 is the Designated Authority constituted under the provisions of Rule 3 of the Customs Tariff (Identification, Assessment and Collection of Anti- Dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995 (hereinafter be referred to as “the Rules”) and carried out its duties and functioning of a quasi judicial authority as provided under Rule 6 of the Rules.

3.1 It is contended by the petitioners that the India being a signatory to World Trade Organization and also a party to the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade, 1994 which provides the principles and procedure of determination and imposition of Anti-Dumping Duties and methodology for determination thereof etc. It is contended that Section 9A(1) of the Customs Tariff Act, 1975 (hereinafter be referred to as “the Act”) envisages the imposition of a duty namely Anti-Dumping Duty on the margin of dumping on an article exported to India where its export price is less than its normal value. It is contended that Section 9A(6) thereof also provides for determination of margin of dumping and imposition of such duty and necessity of conducting inquiry and duty. It is contended that Rules also provide for determining likelihood of continuation or recurrence of dumping and injury.

3.2 It is contended that the subject goods is a common analgesic and antipathetic drug that is used for the relief of fever, headache and other minor aches and pains. According to the petitioners, producers – exporters from China PR (hereinafter be referred to as “the subject country”) were exporting the subject goods to India for quite sometime and dumping intensified during 2001. Due to that Domestic Industry (hereinafter be referred to as “the DI”) requested imposition of Anti-dumping Duty (hereinafter be referred to as “the ADD”) on the imports of subject goods. Thereafter, on the basis of the inquiry conducted by respondent No.2, a Final Finding Notification No.60/1/2000-DGAD dated 22.01.2002 was issued recommending imposition of ADD. The definitive antidumping duties in the form of benchmark were imposed by respondent No.2. It is contended that at the end of 5th year, the DI filed an application for ‘sunset review” in the year 2006 whereupon investigation was initiated by respondent No.2 to examine whether the expiry of the duty would lead to continuation or recurrence of dumping and inquiry. Respondent No.3 vide its Notification No.83/2006 extended the definitive Anti-dumping Duties in terms of Section 9A(5) for a period of one year up to 05.09.2007.

3.3 It is contended by the petitioners that after conducting a detailed investigation, respondent No.2 issued final finding vide its Notification No.15/20/2006-DGAD recommending continuation of ADD. In pursuance thereof, respondent No.3 issued Notification No.99/2007-Customs (ADD) levying ADD for a further period of five years.

3.4 It is contended by the petitioners that despite imposition of ADD, the imports from China continued to enter market in dumped prices and, therefore, being aggrieved towards the end of the 5th year, again the representative of the Domestic Industry approached respondent No.2 in accordance with Section 9A(5) of the Act read with Rule23 of the Rules. Thereafter, being prima facie satisfied, the DA initiated a sunset review investigation vide Notification No.14/1009/2012-DGAD to review the need for continued imposition of duties in respect of the subject goods originating in or exported from the subject country and to examine whether the expiry of such duty is likely to lead to continuation or recurrence of dumping and injury to the DI and, thereafter, the validity of the anti-dumping duty on the imports of the subject goods from the subject country was extended upto 02.09.2013 by respondent No.3 vide Notification No.42/2012-Customs(ADD). That after conducting detailed investigation, respondent No.2 issued Final Finding No.14/1009/2012-DGAD recommending extension of duties in revised form changing from bench mark of duty to fix form of duty to provide adequate protection to the DI. In pursuance thereof, respondent No.1 issued Notification No.26/2013-Customs dated 28.10.2013 imposing fixed form of ADD for a period of another five years i.e. 27.10.2018.

3.5 According to the petitioners, despite the change in the form of ADD, the dumping continuous from subject country which forced the petitioners along with Shri Krishna Pharmaceuticals Ltd to again approached the authority with duly substantiated application on behalf of DI for extension of the ADD with prima facie evidence of likelihood of dumping and injury in accordance with law. It is contended by the petitioners that respondent No.2 provided preinitiation hearing to petitioner No.1 on 14.05.2018 and, thereafter, the DI filed detailed submission on 17.05.2018. Pursuant to that respondent No.2 initiated the sunset review vide Notification No.07/16/208-DGAD to review the need for continued imposition of the duties in force in respect of the subject goods originating in or exported from the subject country and to examine whether the expiry of such duty is likely to lead to continuation or recurrence of dumping and injury to the domestic industry. That pending such sunset review, the anti-dumping duties imposed earlier have been extended by respondent No.3 for a period of six months i.e. upto 26.04.2019 vide Notification No.29/2018-Customs (ADD) dated 20.08.2018. It is contended that on 29.08.2018, respondent No.2 granted public / oral hearing to all the interested parties to present their views orally and on 07.09.2018, petitioner No.1 submitted a detailed written submission justifying the need for the continuation of the duty.

3.6 It is contended by the petitioners that on 15.01.2019, respondent No.2 issued Disclosure Statement under the provisions of Rule 16 of the Rules, which require disclosure of essential facts received and interpreted by it which are under consideration for the purpose of arriving at a final conclusion. According to the petitioner, therefore, it filed its comments on the disclosure statement submitting that the disclosure statement is incomplete as it has not addressed the certain major submission made by petitioner No.1 and requested the authority to disclose the essential facts before issuing the Final Finding. However, respondent No.2, without appreciating the submission made by petitioner No.1 issued impugned Final Finding vide Notification F No.7/16/2018-DGAD where DA has finally decided not to continue the ADD and thereby rejected / ignored all the submissions made on behalf of petitioner No.1.

3.7 According to the petitioners, respondent No.2 i.e. DA has issued Disclosure Statement as follows.

i. Product under Consideration and Like Article : The product under consideration in the present Sunset Review investigation is Paracetamol and the goods produced by the Domestic Industry and imported from the subject country are like articles in terms of the Rule 2(d) of the Anti- Dumping Rules.

ii. Standing: M/s. Farmson Pharmaceuticals Gujarat Private Limited and M/s. Sri Krishna Pharmaceuticals Limited constitutes “a major proportion of total Indian production” and hence, satisfies the standing requirements for the subject goods under Rule 2(b) and Rule 5(3) of the AD Rule.

iii. Dumping : The dumping margins are significant for the cooperating exporters / producer and as well as for the country as a whole.

iv. Injury / Likelihood of injury: As regards the likelihood analysis, it is evident that there are surplus capacities in China and the Chinese producers are export oriented. China is highly export oriented country and in the event of cessation of ADD, there is probability that the exporters / producers would resort to dumping of subject goods to India.

v. Non-attribution analysis : Other known factors are not the factors contributing to or causing injury to the domestic industry.

3.8 It is contended that the petitioners herein have called for the following data and made submission in order to enable them to come to a meaningful conclusion before issuing the Final Finding:

i. The public at large is already well protected through a regulatory mechanism as Paracetamol is covered under National List of essential medicine in Pharmaceutical Policy, 2015.

ii. Paracetamol is one of the cheapest API available in the country.

iii. The production of product under consideration is quite limited globally. As, about 86% of global production is in India and China only and out of which 62% of the production is in China alone, while India commands the remaining 24%. Thus, any sickness in this industry would leave the Indian users at the mercy and monopoly of the Chinese producers.

iv. Adverse effect of first dumping and thereafter insufficient form of duty led to large-scale production suspension in the country, which was primarily in the last two decades (all these closures are more than 5 years old and are prior to previous extension of ADD).

v. As per 145th Parliamentary Standing Committee on Commerce which assessed the impact of Chinese goods on India industry, it is clearly stated that API sector needs protection from imports and the Government of India also endeavours to revive the API sector in India.

vi. Katoch Committee Report dated 24th September, 2015 on Active Pharmaceuticals Ingredients (APIs) specifically states that a long term strategy for strengthening API sector by involving Ministry of Commerce as well as other regulatory authorities is required which involves judicious and liberal use of measures like anti-dumping.

vii. FICCI report February 2018 edition on “Trends and Opportunities for Indian Pharma” highlights that dependence on China for API supplies exposes the pharma industry to raw material supply disruptions and price volatility.

viii. Office Memorandum dated 18th April, 2018 issued by the Government of India, Ministry of Chemicals and Fertilizers, Department of Pharmaceuticals, constituted a Tast force to formulate a road map for enhanced production of APIs in the country as there is need for concerted efforts to harness the opportunities in pharmaceutical sector.

3.9 It is contended by the petitioners that without providing such data and dealing with submissions of the petitioners, the DA has passed the impugned Final Findings on the basis of the following reasons.

i. Evidence on record do not indicate that the dumped imports from China will lead to injury to Domestic Industry.

ii. Import of the subject goods from China PR has remained at insignificant level throughout the injury period.

iii. Domestic Industry failed to substantiate its claim in relation to likelihood of injury to the domestic industry if the current ADD ceases to exist.

iv. The domestic injury has shown improvement in terms of all injury parameters and there is no injury to the Domestic industry. Furthermore, the production of subject goods by domestic industry is sufficient to cater to Indian demand.

v. The analysis of the price attractiveness by the Authority does not position India as price attractive for Chinese Exports so far as subject goods are concerned.

vi. The ADD was in force since September, 2001 and the condition of domestic industry has improved. Therefore, the ADD has served its intended purpose. P. Recommendation

127. The Authority notes that the investigation was initiated and notified to all interested parties and adequate opportunity was given to domestic industry, exporters, importers, users and other interested parties to provide relevant information on the aspect of dumping, injury and causal link. Having initiated and conducted the investigation into dumping, injury, causal link and likelihood of dumping post cessation of ADD in force in terms of the provisions laid down under the Anti Dumping Act and Rules, the Authority holds that Domestic Industry failed to provide any satisfactory evidence 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 due to reasons and/or analysis given above. Therefore, the Authority does not recommend continuation of the anti-dumping duty on the imports of subject goods from China PR.

4. Being aggrieved and dissatisfied with the aforesaid impugned Final Findings, the petitioners have challenged the same on the following main grounds.

(a) Inadequate disclosure of essential facts thereby violating the principles of natural justice and denying the domestic industry an opportunity to defend its interests.

(b) Impugned Final Finding is a non-speaking order and does not address all the issues and concerns raised by the domestic industry in violation of the requirements of reasoned explanation under Rule 17 of the Anti-Dumping Rules.

(c) Error on the part of respondent No.2 in considering import as insignificant which constituted 98% of the total import and 6% of consumption in India.

(d) Conclusions arrived at by respondent No.2 are contrary to the facts showing likelihood of injury to domestic industry in the event of revocation of duty.

(e) Current / continued injury to the domestic industry not a mandatory pre-condition in sunset review investigation conducted under Section 9A(%) of the Act read with Rule 23 of the Rules.

(f) In an anti-dumping investigation, once the domestic industry has provided prima facie sufficient evidence of likelihood of dumping and injury and the Designated Authority has initiated investigation then the onus to show absence of likelihood of dumping and injury is on the exporters.

(g) Failure on the part of respondent No.2 to note that the domestic industry is vulnerable due to price sensitivity of the product in Indian market.

(h) Failure on the part of respondent No.2 to consider the fact that the domestic industry is effectively protected for a period of last five years and not since September 2001.

(i) The impugned Final Finding has been issued in gross violation of the principles of natural justice and has prevented the petitioners from effectively defending its interests

(j) For a period of which anti-dumping is levied cannot be ground for the termination of Anti- Dumping Duties.

5. At the initial stage, this Court has passed the following order on 13.03.2019:-

Notice for final disposal, returnable on 27th March, 2019.

Learned counsel for the petitioner has invited our attention to the discloser statement and laid emphasis upon page No.206 and 207 to indicate that the columns which have been left blank or extract marks are provided, ordinarily ought not to have been left blank and therefore, this was specifically brought to the notice of the authority under the objection dated 22.1.2019. The authority without there being any decision thereon, rendered its final findings, which could be seen from the page No. 261 and 262. In view thereof the Court is of the view that as there is a prima-facie breach of principle of natural justice as the decisions have been rendered prima-facie without affording appropriate material to the concerned, the Court has issued Notice for final disposal and have been expected from the other side to file reply, if any, by the returnable date, in case if notice is served within a reasonable time from today.

Learned counsel further submitted that conclusions are diametrical opposite to the final findings recorded.

Direct service is permitted.

6. Thereafter, this Court has passed the following order on 11.04.2019:-

Leave to amend.

On 13.03.2019, this Court passed the following order:

Notice for final disposal, returnable on 27th March, 2019.

Learned counsel for the petitioner has invited our attention to the discloser statement and laid emphasis upon page No.206 and 207 to indicate that the columns which have been left blank or extract marks are provided, ordinarily ought not to have been left blank and therefore, this was specifically brought to the notice of the authority under the objection dated 22.1.2019. The authority without there being any decision thereon, rendered its final findings, which could be seen from the page No. 261 and 262. In view thereof the Court is of the view that as there is a prima-facie breach of principle of natural justice as the decisions have been rendered prima-facie without affording appropriate material to the concerned, the Court has issued Notice for final disposal and have been expected from the other side to file reply, if any, by the returnable date, in case if notice is served within a reasonable time from today.

Learned counsel further submitted that conclusions are diametrical opposite to the final findings recorded.

Direct service is permitted.”

Thereafter, time and again the matter has been adjourned.

Today, Shri Desai, learned advocate appears for the designated authority and submitted that the anxiety expressed on behalf of the petitioner that the anti dumping duty for extended period also would come to an end by 26.04.2019 and he is yet to receive instructions and reply, if any, for conducting the matter finally. In that view of the matter, he seeks time up to 22.04.2019 only. Learned counsel for the petitioner strongly opposes and apprehends that the period thereafter may not be sufficient to conduct the main matter and by efflux of time the entire matter may be rendered infructuous.

In that view of the matter, we are of the view that in case if the matter is not conducted on 22.04.2019, the appropriate orders, including directing the authority to extend the anti dumping duty at least for one month period may be considered to be issued. S.O. to 22.04.2019.

7. This Court has passed the following order on 24.04.2019:-

1. Ms. Vyas, learned cousenl for the petitioner mentioned this matter in the morning indicating that the matter was listed on 22.4.2019 and the same was requested for posting on the next day I.e. today. Inadvertantly instead of 24.4.2019 it was posted on 25.4.2019 and as there is an urgency the matter is requested to be taken up today with the intimation to all the parties and their counsels. Accordingly the Court granted permission and the matter listed today itself.

2. The learned counsel appearing for respondent No.2 states that he is in fact aware of the orders passed in this matter but he received softcopy of the reply to be filed and the same could be served upon the petitioner and hardcopy duly affirmed be placed on record by tomorrow I.e. 25.4.2019 as he has been informed that the affirmed copy is already dispachted.

3. The learned counsel appeairng for petitioner submited that in fact looking to the fact that the notification of 20.8.2018 would come to an end by 26.4.2019 in case if sometime is taken in filing rejoinder, if any, or the hearing of the matter is spilled over and not completed by then, the irretrivable situation may be created and, therefore, he urges the Court that the Court may by further interim direction direct the authorities to extend the antidumping duty for a further period of two months as it may take care of intervening summer vacation also and the matter be heard prior thereot and that would serve the interst of justice.

4. This Court is of the view that while issuing the notice on 13.3.2019 an order was passed indicating therein that the notice was being issued for final disposal and it was made returnable on 27.3.2019 the Court did advert there into the requirement of issuing of notice for final disposal bearing in mind that the notification of 20.8.2018 would expire on 26.4.2019. The matter thereafter was required to be adjounred at the instance of respondent as could be seen from the order of 11.4.2019 wherein also the Court in fact had reproduced the earlier order only with a view to infuse the sense of urgency which appears to have worked but not to the fullest as though the reply has come but in a soft copy which cannot be placed on record and there is a justification on the part of the counsel for the petitioner with respect to the appropriate direction for extending the antidupming duty so that the subject matter of petiton may not be rendered infructuous and irretrivable situation may be avoided. The Court is, therefore, of the view that let there be a direction to respodnent No.1 that the antidumping duty as mentinon in Notification No.39-2018-Custom(ADD) for the product paracetamol dated 20.8.2018 at page 119 shall be extended for a further period of two months that would take care of hearing aspect as by then the pleading would be completed. The antidumping duty as mentioned in the notification dated 20.8.2018 be extended for a further period upto 24.6.2019. The matter may be posted for hearing on 12.6.2019 and the parties shall exchange their pleadings, if any, in the meantime so that on 12.6.2019 the matter can be taken up peremptorily.

5. It would be open for the petitioner to serve copy of the order to the Director, Tax Research Unit, Department of Commerce, Ministry of Finance for compliance.

Direct service today is permitted.

8. This Court has passed the following order on 20.06.2019:-

The learned counsel for the petitioners as well as learned counsel for the respondents have concluded their submissions today at around 5:00 p.m. Learned counsel for the respondent no.2 urges the Court to permit him to place on record the written submissions, if any on behalf of the respondent nos.1 and 2 both. The gist of the written submissions, if any, be placed by tomorrow i.e. 21st June 2019. At this stage Shri Soparkar, learned counsel for the petitioner submitted that the notification whereby the anti dumping duty is extended is expiring on 24th June 2019. He further urges that on account of the fact that anti dumping duty notification if ended that may render the entire hearing and proceedings infructuous in light of the observation of Supreme Court in case of Union of India and another Vs. Kumho Petrochemicals Company Limited and another, therefore at least till the Court pronounce the judgment and order let there be a direction to the concerned respondent no.1 for further extending the anti dumping duty so that these proceedings may not be rendered infructuous. We find substance in this matter as the arguments have been continuously going on and concluded only today. Besides, there is a request from respondent side to permit respondent no.1 to place on record the written submission. We have granted permission to respondent no.2 also to place written submission on record by 21st June 2019. In that view of the matter, casting an order and judgment may take some time therefore, it is observed that the respondent nos.1, 3 & 4 shall extend the anti dumping duty notification in respect of product in question at least till 9th July 2019 before the existing notification comes to an end. Put-up on 21st June 2019. Direct service permitted.

9. Learned advocate for the petitioners has placed on record the brief submissions, which verbatim reproduced as under:-

THE IMPUGNED FINAL FINDING HAS BEEN ISSUED IN GROSS VIOLATION OF HTE PRINCIPLES OF NATURAL JUSTICE AND HAS PREVENTED THE PETITIONERS FROM EFFECTIVELY DEFENDING THEIR INTERESTS :

1. Respondent no.2 has erroneously applied Rule 7 in the present investigations, in so far as it has failed to disclose the details of the Dumping Margin calculations to the petitioners no.1 in para 52 3 (a) (b).

Determination of Dumping Margin for china PR as a whole.

a) Comparing the normal value and export price at exfactory level for the country as a whole, the dumping margin for the subject country is determined as below:

Particulars US $/kg. Rs/kg (POI)US $/KgRs/kg
Normal value******
Net Export Price******
Dumping Margin******
Dumping Margin %******
Range %10-2010-20

b. After details analysis of DGCIS transaction wise data it has been observed that out of total imports of china PR i.e *** MT *** % imports are dumped and *** % are injurious.

2. The Dumping margin is the difference between the Normal Value and export price. In the facts of the present case, the Normal Value has been determined based on the information furnished by the petitioner, which has been disclosed to the petitioner. However, export price based on DGCI&S data which, are available in public domain ought to have been disclosed to the petitioners.

3. Similarly, injury parameters have been determined based on the information furnished by the petitioner no. 1 (para 60 to 80 of the Impugned Final Ending (page nos. 265 to 279) the respondent no. 2 ought to have disclosed these figures to he petitioners. Further conclusion based on these information cannot be kept confidential from petitioners as held int he following judgments:

i. Reliance Industries Ltd. Vs Designated Authority, (2006) 10 SCC 368 (Para 44) = 2006-TIOL-120-SC-AD.

ii. UOI vs. Union of India vs. M/s. Meghmani Organics Ltd. & Ors. (2016) 10 SCC (para 29) = 2016-TIOL-170-SC-CUS-LB and

iii. Nirma Limited Versus Union of India (2017 (358) E.L.T 146 (Guj.)] (Para-32.12) = 2017-TIOL-2183-HC-AHM-CUS (upheld by Hon’ble Supreme Court).

4. During the course of final hearing, respondent no. 2 has tendered a printout of alleged email sent to petitioner no.1 and contended that all the information has been shared with petitioner no.1. At the outset, it is submitted that such contention or a copy of the email have not by respondent no.2 in its affidavit-in-reply.

5. It is submitted that petitioner no.1 has received information only pertaining to construction of Normal Value and break down of non-injurious price (NIP) as is evident from the content of mail itself. However, it did not receive any information pertaining to injury parameters which was claimed confidential and asterisk mark were used int he disclosure statement and impugned final finding despite the fact that the information has been furnished by the domestic industry itself. the computation of the various factors referred in (para 60 to 80 of the impugned final finding (page nos 265 to 279)] has not been furnished to the domestic industry.

6. It was incumbent upon respondent no. 2 to furnish the relevant facts which have been used by it as the basis for arriving at its conclusion on the essential facts for the purpose of arriving at a decision as to whether or not the definitive measures are required to be applied. Non-disclosure of the essential facts is therefore, clearly in breach of the principles of natural justice.

II THE IMPUGNED FINAL FINDING IS BAD IN LAW AND PERVERSE AND BASED ON EXTRANEOUS FACTORS:

7. The present case being a sunset review investigation, the respondent no. 2 was required to examine the likelihood of continuation or recurrence of dumping or injury, as provided under proviso to Section 9A(5), extracted herein below:

“(5) The anti-dumping duty imposed under this section shall, unless revoked earlier, cease to have effect on the expiry of five years from the date of such imposition:

Provided that if the Central Government, in a review, is of the opinion that the cessation of such duty is likely to lead to continuation 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.

8. Respondent no. 2 has acted in violation of the provisions of section 9A (5) of the Act read with Rule 23 of the Rules in as much as it has lent unwarranted weight age to the fact that the petitioner No.1/Domestic Industry is allegedly not suffering injury during the current period. While issuing the impugned final finding, respondent no.2 stated that “the domestic injury has shown improvement in terms of all injury parameters and there is no injury to the Domestic industry”. [Para-126(3) of Impugned Final findings (page no. 281)].

9. 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 industry. Therefore, in a sunset review investigation respondent no. 2 needs to address the question as to whether the domestic industry is likely to be materially injured again, if duties are lifted. Respondent No. 2 has therefore, failed to appreciated the fact that if the antidumping duty has had the desired effect, the condition of the domestic industry is expected to have improved during the period anti-dumping duty was in force.

III THE IMPUGNED FINAL FINDING ARE DIAMETRICALLY OPPOSITE TO THE ESSENTIAL FACTS RECORDED INT HE DISCLOSURE STATEMENT AND FINAL FINDING:

10. Following are essential facts recorded in the impugned final findings which are diametrically opposite to conclusions reached by respondent :

Sr. NoFACTS RECORDED IN THE IMPUGNEDFINAL FINDINGSDIAMETRICALLY OPPOSITE CONCLUSION REACHED IN THE IMPUGNED FINAL FINDINGS
186.(a) A significant rate of increase of dumped imports into India indicating the likelihood of substantially increased importation.ParticularUnits2014-152015-162016-17POChinaMT4356193022052969OtherMT791153065TotalMT443420452235303487. The Authority notes that while there was a considered decline in the volume of imports compared to base year.88. An analysis of transaction wise data of the co-operative producers with their respective exporters so as to arrive at dumped and injurious imports of the co-operative producer of the present investigation is as follows :-a) M/s Anqiu Lu An Pharmaceutical Co. Ltd.b) M/s Anqiu Lu An Pharmaceutical Co. Ltd.The total exports to India by the said producer with trader of the subject goods are *** MT oput which *** MT are dumped imports and *** MT are injurious imports.c) M/s Lianyungang Kangle Pharmaceuticals Co. Ltd. Total exports to India by the said producer of the subject goods through its exporters is *** MT out which dumped imports constitute*** MT. No injurious imports were found for the said producer through its exporter.Import of the subject goods from China PR has remained at insignificant level throughout the injury period.[paragraph 126(2) (page no. 281).]
 d) M/s Hebei Jiheng (group) Pharmaceutical Co. Ltd. Total exports to India by the said producer of he subject goods is *** MT. All imports of the said producer are dumped and *** MT are injurious. [para no. 85-87 (page no. 273- 274). 
SUBMISSIONRespondent no. 2 erred in considering import as insignificant which constituted 98% of the total import and 6% of consumption in India (more than insignificant as define in Rule 14(d), Even otherwise Rule 14 of the Rules dealing with the termination of investigation on the basis of insignificant imports is explicitly excluded from Rule 23(3) and therefore issuance of the impugned final findings by respondent no. 2 in the present case on the basis of the volume of insignificant import are contrary to the mandate of law.* Imports are 5.84% (above diminimus level) (paragraph no.62 table at page no.265); and* Rule 14(d) at defines volume of significant import (page no.99)
1(b) Sufficient freely disposable, or an imminent, substantial increase in, capacity of the exporter indicating the likelihood of substantially increased dumped exports to Indian markets, taking into account the availability of other export markets to absorb any additional exports.89. The Authority evaluated the existing surplus capacities, capacity addition, if any, with the responding exporters, possibility of trade diversion from third countries to India, freely disposable production capacities with the responding exporters. The analysis shows as follows:a. Capacity, production, surplus capacities, exports to IndiaDomestic Industry failed to substantiate its claim in relation to likelihood of injury to the domestic industry if the current ADD ceases to exist.[paragraph 126(3) (page no.)]The analysis of the price attractiveness by the Authority does not position India as price attractive for Chinese Exports so far as subject goods are concerned.[paragraph 126(5) (page no.281)]
  Name of ProducerUnitsAnqiu Lu An Pharmaceutical Co. Ltd.Lianyungang Kangle Pharmaceutical Co. LtdHebei Jiheng (group) Pharmaceutical Co. Ltd.TotalCapacityMT************Production (POI)MT************Capacity utilisationMT************Domestic ConsumptionMT************Exports to IndiaMT************Exports to ROWMT************Total ExportsMT************% Exports OrientationRange %*********35-45 b. After analysis of the capacities of the cooperative exporters, the Authority notes that the capacities of the following noncooperative exporters / producers as per the data submitted by the petitioner and the information available in public domain.SNProducers in ChinaCapacity (MT perannum)1Anhui BBCA Likang Pharmaceutical100002Changshu Huagang Pharmaceutical80003Jiangsu World kindly Pharmaceutical100004Wenzhou Pharmaceuticals factory60005Jiangsu Guoheng Pharmaceutical Co. Ltd.25006Runqi trading Co. Ltd.120007Shanghai Bailion Chemicals Co. Ltd.500008Lianoyuan City Baikang Pharmaceutical5009Total capacity of non – cooperative entitles9900010Total capacity of cooperative producers7500011Total capacity of China PR17400012Indian demand51069c. However, it is observed from the analysis of the cooperating producers that the trading companies do not have their own production facilities and they quote the capacity of the producers on their websites.d. Considering the capacity utilisation and export orientation of the responding producers and evidence provided by the domestic industry, it is evident that there are surplus capacities in China and the Chinese producers are export oriented.(C) Inventories of the article being investigated90. The questionnaire response filed by the Chinese producer’s shows that level of inventories with the cooperative producers / exporters is quite significant.ProducerUnits201520162017PO/M/s. Anqiu Lu An Pharmaceutical Co. Ltd.MT************Lianyungang Kangle Pharmaceutical Co. Ltd.MT************Hebei Jihen (group) Pharmaceutical Co. Ltd.MT************TotalMT************(D) Price attractiveness of Indian mark91. Analysis of the China PR Custom data with regard to export from China PR to the rest of the world, indicate that with the revocation of ADD, the Indian prices would be attractive for the Chinese producers / Exporters to increase their exports to India and the same can be deducted from the table given below:CountryQuantity (kg)Value USDPrice US D/kgIndia (IN)*********Congo, DR*********Cuba (CU)*********Kenya (KE)*********Mauritius (MU)*********Indonesia (ID)*********S. Africa (ZA)*********Iraq (IQ)*********Zambia (ZM)*********Russia (RU)*********Iran (IR)*********Syrian (SY)*********Benin (BJ)*********Mozambique (MZ)*********United Arab Emirates (AE)*********Tanzania (TZ)*********Lithuania (LT)*********Source : China Custom92. The Authority notes that ***% total volume of exports to third countries is at a price lower than the price at which China exports to India. Whereas ***% of the total exports are exported are above the price at which China exports the subject goods to India.(E) Export Orientation of China PR93. As per the data of China Customs and other evidence filed by the Domestic Industry, the Authority notes that the producers in China are oriented towards exports globally.In the event of cessation of ADD, there is probability that the exporters / producers would resort to dumping of subject goods to India.[paragraph no.88 – 93 (page no.273-277)] 
SUBMISSION:Conclusions arrived by Respondent no.2 are contrary to the facts showing likelihood of injury to domestic industry in the event of revocation of duty. Despite the fact and evidences brought by the petitioner and examination of the evidences by Respondent no.2 clearly showing that likelihood of dumping and injury in the event of cessation of antidumping duty, the Respondent no.2 went beyond the evidence and information examined in the Impugned Final Finding and concluded volt face without any basis that there is inadequate evidence submitted by the domestic industry to substantiate the likelihood of injury.
3 The ADD was in force since September’2001 and the condition of domestic industry has improved. Therefore, the ADD has served its intended purpose.[paragraph 126(6) (page no.281)]
SUBMISSION:Duration of levy of anti-dumping is not a relevant parameter. Anti-dumping duty is required to be imposed so long as the investigation shows that the cessation of such duty is likely to lead to continuation or recurrence of dumping and injury. The Act and the Rules do not prescribe any time limit beyond which the Anti-dumping duty cannot be extended.

11. In light of the foregoing, the present petition and the prayers sought therein deserve to be allowed.

9.1 Learned advocate for the petitioners has relied upon the following decisions.

1. In the case of Nirma Limited Vs. Union of India, reported in 2017 (358) E.L.T. 146 (Gujarat) = 2017-TIOL-2183-HC-AHM-CUS.

2. In the case of Reliance Industries Limited Vs. Designated Authority and others reported in (2006) 10 SCC 368 = 2006-TIOL-120-SC-AD;

3. In the case of Union of India and another Vs. Meghmani Organics Limited reported in (2016) 10 SCC 28 = 2016-TIOL-170-SC-CUS-LB;

4. In the case of DCW Limited Vs. Union of India, rendered on 11.06.2018 by this Court in Special Civil Applications No.14202 of 2017 and allied matters.

10. Learned advocate for respondent No.3 has placed on record the written submissions which reproduced as under:-

Re: The Notification dated 16.04.2019 (Rescinding Notification) issued by the Department of Revenue is not impugned in the Writ by way of a formal amendment.

1. At the very outset, it is respectfully stated that the Notification dated 16.04.2019 (Rescinding Notification) which was issued by the Respondent No. 3, Ministry of Finance under Rule 18 of the Anti-Dumping Rules, 1995 have not been impugned in the present Writ Petition preferred by the Petitioner.

2. Albeit the Petitioner herein had filed an application, bearing No. IA No. 1 of 2019 in the present Writ Petition, praying for, inter alia, quashing the Rescinding Notification of the Respondent No. 3 as well staying the operation and effect thereof; it is pertinent that till date no formal amendment has been preferred in the present Writ Petition, impugning the said Rescinding Notification issued by Respondent No. 3 under Rule 18 of the Anti-Dumping Rules, 1995.

3. It is also noteworthy that the prayers in the Writ Petition (at page 87) only seek directions from this Hon’ble Court qua the Disclosure Statement dated 15.01.2019 and the Final Findings dated 29.01.2019, both of which have been issued by the Respondent No. 2 (Directorate General of Trade Remedies).

4. In view thereof, it is respectfully submitted that the present Writ Petition qua the Respondent No. 3 is wholly misconceived and ought to be dismissed, for reasons, inter alla, that the Rescinding Notification has not even been impugned in the Writ Petition (even vide an amendment), and as such, no prayers have been sought against the Respondent No. 3.

Re: The Petitioner has an alternate remedy in Customs Excise and Service Tax Appellate Tribunal (CESTAT)

5. Without prejudice to the aforesaid submission, It is stated that the Petitioner has erred in approaching this Hon’ble High Court in as much as it is an established principle of law that the writ jurisdiction of this Hon’ble High Court is an extraordinary jurisdiction, and ought not to be invoked till the statutory remedy has been exhausted.

6. It is submitted with due deference to this Hon’ble Court that the writ jurisdiction of this Hon’ble Court ought not to have been invoked by the Petitioner, in light of an alternative remedy available to the Petitioner under the provisions of the Custom Tariff Act, 1975. It is respectfully submitted that the appeal against the findings of the designated authority viz. Directorate General of Trade Remedies lies with the CESTAT under Section 9C of the Customs Tariff Act, 1975. Section 9C of the Custom Tariff Act, 1975 is reproduced below for ease of reference of this Court:

“SECTION 9C – Appeal –

(1) An appeal against the order of determination or review thereof regarding the existence, degree and effect of any subsidy or dumping in relation to import of any article shall lie to the Customs, Excise and Service Tax Appellate Tribunal constituted under section 129 of the Customs Act, 1962 (hereafter referred to as the Appellate Tribunal).

(1A)……

(3) The Appellate Tribunal may, after giving the parties to the appeal an opportunity of being heard, pass such order thereon as it thinks fit, confirming, modifying or annulling the order appealed against.

(4) The provisions of sub-section (1), (2), (5) and (6) or section 129C of the Customs Act, 1962 shall apply to the Appellate Tribunal in the discharge of its functions under this Act as they apply to it in the discharge of its functions under the Customs Act, 1962.

(5) Every appeal under sub-section (1) shall be heard by a Special Bench constituted by the President 0f the Appellate Tribunal for hearing such appeals and such Bench shall consist of the President and not less than two members and shall include one judicial member and one technical member.

7. In this regard, it may not be out of place to place reliance on the recent judgment of Designated Authority V. San Disk, reported in 2018 13 SCC 402 = 2017-TIOL-78-SC-CUS, wherein the domestic industry had raised similar issues, including without limitation that the Designated Authority had violated principles of natural justice and/ or that all material / information was not provided to it. In such similar circumstances as well, the Hon’ble Supreme Court was pleased to opine that in view of the statutory remedy provided under section 9C of the Customs Tariff Act. 1975, the writ petition under Article 226 would not be entertained. Several other High Courts in India, including without limitation the High Court of Delhi, Calcutta, Madras as well as Bombay have been pleased to direct the parties to invoke the statutory remedy of CESI’AT instead of invoking the extraordinary writ remedy under Article 226 of the Constitution.

8. In this context, it is stated with utmost humility and deference to this Hon’ble Court that in the recent decision of Hindustan Lever v. Union of India [2017 SCC Online Del 8354] = 2017-TIOL-963-HC-DEL-CU, the Division Bench of the High Court of Delhi has taken note of the decision of Nirma Ltd. v. Union of India (judgment dated 23rd February, 2017 in C/SCA/16426/201 = 2017-TIOL-2183-HC-AHM-CUS of the this Hon’ble High Court of Gujarat) and categorically dismissed the writ petition, on the ground of the alternative remedy available to the petitioners therein. The relevant extract of the aforementioned Hindustan Lever v. Union of India (supra) judgement is reproduced below for the ease of reference of this Hon’ble Court:

“6. The Court is unable to be persuaded to agree with the above conclusion reached by the DB of the Gujarat High Court 777 e reasons that weighed with the Gujarat High Court to conclude that it will not be possible for the party aggrieved to challenge the disclosure statement before the CESTAT is unable to be discerned from the above passage. If the Final Finding can be appealed against before the CESTA 7; there is no reason why the CESTA T cannot examine the correctness of the assertions made in the disclosure statement which constitutes the very foundation of the entire exercise leading up to the Final Finding by the DA. 7. The relevant portion of Section 9 C of the CTA reads thus:

8. Given the scope of the appellate power of the CESTAT as spelt out Section 9 C of the CTA, there is nothing to indicate that the CESTAT would be precluded from examining the validity of the disclosure statement issued under Rule 16 of the Rules. It is like saying that an appellate Court which Is in exercise of its powers under Section 96 of the Code of 0W Procedure 1908 (0°C) judicially reviewing a decree and judgment in a suit would be precluded ham examining the correctness of the assertions made in a plaint or a written statement. In the context of the proceedings before the DA, the disclosure statement would be comparable to a plaint. Consequently, the Court is not persuaded that the grounds urged in the writ petition cannot be urged before the CESTAT. It is not without significance that the Gujarat High Court makes no reference in the above passage in Nirma Ltd. v. Union of India (supra) to Section 9C of the CTA.

9. We Court is also not persuaded to take a view different the one it has in Alcatel-lucent India Ltd. v Designated Authority (supra); PTA Users Association v. Union of India (supra) and Balaji Action Buildwell v. Union of India (supra).

10. The question is not whether this Court can entertain the present writ petition. The question is whether, in the facts and circumstances, it should? The power under Article 226 of the Constitution is an extra-ordinary one and should not be exercised in a routine manner especially when the Petitioner has an efficacious and adequate alternative statutory remedy available. Otherwise, the Court would be supp/anting the functioning of the statutory appellate authority tasked specifically with reviewing the correctness of the orders of the subordinate statutory authorities. Therefore, while acknowledging that this Court does have the jurisdiction to entertain the writ petition, in the facts and circumstances of the present case the Court lines that no case has been made out to persuade it to exercise its jurisdiction under A/tic/e 226 of the Constitution to examine the correctness of the Fina/ Finding of the DA. 777e Court is of the firm view that every ground urged in the present writ petition can well be urged before the CESTAT.

11. The writ petition and applications are accordingly dismissed. However, this will not preclude the Petitioner from availing the statutory remedy of an appeal before the CESTAT in accordance with law and from urging all the grounds raised here, and any other ground it may have, to challenge the Final Finding of the DA. The Petitioner may request the CESTAT for an expedited hearing of its appeal .”

(emphasis supplied)

9. Further, there are no extraordinary circumstances pleaded by the Petitioner in the present case that warrant the invocation of Article 226 of the Constitution of India and there has been no violation of their fundamental right or any situation as grave as may have required imminent intervention of this Hon’ble High Court in extraordinary jurisdiction even while no cause of action had arisen.

10. In view of the aforesaid, it is most respectfully submitted that given the highly specialized nature of the subject, the statutory remedy would be a more appropriate course of action for an aggrieved party, and the Hon’ble High Court under their writ jurisdiction cannot don the mantle of an economic analyst to decide whether the DA adopted the correct approach; and therefore, as long as the final findings are in accordance with law, this Hon’ble High Court ought not to interfere under Article 226 of the Constitution.

Re: The Central Government is not empowered to review its own order / notifications

11. The Petitioner herein while challenging the Disclosure Statement and the Final Finding before this Hon’ble Court has failed to appreciate that the notification No. 35/2018Cus (ADD) dated 20.8.2018 was rescinded by way of the notification No. 19/2019-Cus (ADD) dated 16.4.2019 (Rescinding Notification). The said rescinding was undertaken after obtaining the approval of the Finance Minister,’ whereby the final finding of the DA was upheld.

12. Without prejudice to the aforementioned submissions, it is respectfully submitted that in view of the fact that Anti Dumping Duty on the ‘paracetamol’ has come to an end, owing to the Rescinding Notification dated 16.04.2019, this Hon’ble Court cannot revive the notification which is already dead in the eyes of law, and neither can the same be enforced. The Petitioner herein has failed to appreciate that in such a case (apart from preferring an appeal before CESTAT), the Petitioner is empowered under law to freshly initiate the process for levy of duty under the provisions of the Custom Tariff Act, 1975 and the Anti Dumping Rules, 1995; but once the Anti Dumping Duty has been rescinded in accordance with the provisions of law, neither can the said rescinding be suspended by the court, nor can the Anti Dumping Duty be extended without following the due process of law as provided in the Custom Tariff Act, 1975 and the Anti Dumping Rules, 1995.

13. In this regard, the second proviso to Section 9A (5) of the Customs Tariff Act, 1975 is instructive and reads as follows:

“Provided further that where a review initiated before the expiry of the aforesaid period of have 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.”

14. It is respectfully submitted that the plain reading of the above quoted section envisages that any notification imposing anti-dumping duty can only be extended pending the outcome of sunset review investigation. In the present case, the Designated Authority (DA) after initiating sunset review investigations recommended extension of anti-dumping duty till 26.04.2019 which was done vide notification No. 39/2018- Cus (ADD). Subsequently, DA issued their sunset review final findings and did not recommend continuation of anti-dumping duty. Thereafter vide notification No. 19/2019-Cus (ADD) dated 16th April, 2019 the same was rescinded with the approval of Finance Minister. Thus, extension of anti-dumping duty under these circumstances will be contrary to the provisions of Section 9A (5) of the Customs Tariff Act, 1975. It is an established principle of law that if the law directs something to be done in a particular way, it ought not to be done in any other way. In view of the above, and in the absence of any inherent power to review its own decision, the directions as prayed for by the Petitioner ought not be granted by this Hon’ble Court. Reliance is placed on the judgment of the Hon’bie Supreme Court in the case of Union of lndia (UOI) and Ors. V Kumho Petrochemicals Company Limited and Ors. [AIR 2017 SC 3357] in this regard.

15. In any event, if it is the case of the Petitioner that the Final Findings need to be set aside for reasons, inter alia, that there Is a violations of principles of natural justice, in that event also, the matter ought to be remanded to the DA to cure the alleged defect, and it is not open to this Hon’ble High Court to extend the notification to impose Anti-Dumping Duty and/or suspend the rescinding notification of the Central Government. The aforesaid submission is without prejudice to the legal assertion that principles of natural justice as applicable to investigation/inquiries against individuals, may not have a strict application to the investigation under the Anti-dumping Rules, 1995, and therefore the assertions of the Petitioner qua alleged non-compliance of the rules of natural justice by the DA are liable to be rejected. In any case, the Petitioner has failed to show how any prejudice has been caused to him due to the alleged non-compliance of the rules of natural justice by the DA, and as such In the absence of any prejudice to the Petitioners, its plea qua the alleged noncompliance ought to be rejected by this Hon’ble High Court.

16. Without prejudice to the aforesaid submissions, it is further respectfully submitted that it is well settled, the writ jurisdiction of the Hon’bIe High Court cannot be used to give a direction to the legislature or the subordinated legislature (as in the present case) to enact a particular law; and neither can the writ jurisdiction of the Hon’ble High Court be invoked to interfere in matters related to policy and economic matters. It is humbly stated that the issuance/ withdrawing/ rescinding of the notification is a policy decision and extending the period of the notification and keeping notification In abeyance cannot be interfered by the court unless the validity of such actions is challenged on its own merits before the court. In the present circumstances, the subject goods are in the category of generic and mass consumption medicines, which are being routinely consumed by the all sections of the population. Hence, India, which is a welfare state, is duty bound to provide the subject goods at an affordable price to its citizens. As submitted In the preceding paragraphs, the Imposition of the anti-dumping duty for 17 years has met Its objective and it is opportune time to allow free import of this essential drug without any extra duty. In view of this policy, the Answering Respondent deemed It appr0priate to affirm the Final Findings of the DA and rescind the duty on the Imported goods. It Is reiterated that if the member of the domestic industry Is aggrieved by the said findings, it may invoke the appeal provisions in law and/ or file a fresh application for imposition of Anti Dumping Duty, but is refrained from approaching this Hon’bie Court under Article 226 of the Constitution.

17. In view of above submissions, it is prayed that Petitioners have no case on merits or otherwise and hence, the present Petition deserves to be dismissed.

Re:List of Judgements

18. The Respondent annexes herewith an index of judicial pronouncements, sought to be relied upon by the Respondent No. 3 in support of its aforementioned contentions.

10.1 Learned advocate for respondent No.3 has relied upon the following decisions.

1. In the case of Rishiroop Polymers (P) Ltd. Vs. Designated Authority and Additional Secretary, reported in (2006) 4 SCC 303 = 2006-TIOL-26-SC-AD;

2. Indian Metal and Ferro Alloys Ltd. Vs. Designated Authority, Ministry, reported in (2008) 224 ELT 375 = 2007-TIOL-682-HC-DEL-AD;

3. M/s. Kanoria Chemicals and Industries Ltd Vs. Designated Authority, Directorate General of Allied Duties and others, reported in 2015 SCC Online CESTAT 284 = 2015-TIOL-3019-CESTAT-DEL-LB;

4. In the case of Designated Authority Vs. Sandisk International Ltd., reported in (2018) 13 SCC 402 = 2017-TIOL-78-SC-CUS;

5. Jindal Poly Film Ltd. Vs. Designated Authority and others, reported in 2018 (362) ELT 994 = 2018-TIOL-1970-HC-DEL-CUS;

6. Suncity Sheets Pvt. Ltd. Vs. Designated Authority, reported in 2017 SCC Online Del 9412 = 2017-TIOL-1553-HC-DEL-CUS;

7. Spacewood Furnishers Vs. Designated Authority and others, reported in 2010 (112) Bom L.R. 2045 = 2010-TIOL-246-HC-MUM-AD;

8. Shew Kumar Agarwal and Others Vs. Union of India, reported in (2002) 1 CALLT 588 HC;

9. Union of India (UOI) and others Vs. Kumho Petrochemicals Company Limited and others, reported in AIR 2017 SC 3357;

10. Eveready Industries India Ltd. Vs. Union of India, reported in 2019 SCC Online Del 7865;

11. Sterlite Industries (India) Ltd. Vs. Designated Authority, reported in 2003 (158) E.L.T. 673 (SC) = 2003-TIOL-28-SC-AD;

12. Fragrances Flavours Association of India Vs. Designated Authority, reported in 2011 (270) E.L.T. 733 = 2011-TIOL-1924-CESTAT-DEL;

13. Huawei Tech. Co. Ltd. Vs. Designated Authority, reported in 2011 (273) E.L.T. 293 (Tri.-Del.) = 2011-TIOL-1547-CESTAT-DEL;

14. Supreme Court Employees Welfare Association Vs. Union of India reported in (1989) 4 SCC 187;

15. Census Commissioner and others Vs. R. Krishnamurthy, reported in (2015) 2 SCC 796;

16. Kerala Colour Lab Association Vs. UOI, reported in 2003 (156) ELT 17 = 2003-TIOL-19-HC-KERALA-ST;

17. R. K. Garg Vs. UOI, reported in 1981 AIR 2138 = 2002-TIOL-1706-SC-IT-CB;

18. Rusom Cavasiee Cooper Vs. Union of India, reported in (1970) 1 SCC 248;

19. Suresh Seth Vs. Commr., Indore Municipal Corporation reported in (2005) 13 SCC 287;

20. Haridas Exports Vs. All India Float Glass Manufacturer Association and others, reported in (2002) 6 SCC 600 = 2002-TIOL-669-SC-CUS-LB;

11. Mr.Desai, learned advocate for respondent No.2 has vehemently opposed the present petition and has submitted that the petitioners has challenged the Final Finding and DA on the basis that the informations were not supplied to it. While inviting the attention of the Court to the email, Mr.Desai, learned advocate has submitted that the necessary informations have already been supplied to the petitioners by email and the other particulars which are available on public domain has also made available to the petitioners’ representative. While referring to extract of the page of register of the non-confidential informations public file, Mr.Desai has submitted that the representative of the petitioners has accessed the public file and, therefore, the question for non-furnishing of informations is devoid of merits. Regarding data available at DGCSI which was made used by DA, Mr.Desai, learned advocate has submitted that the data available on website is not accessible to everybody and one has to make payment of charge and, therefore, it cannot be treated as on public domain. While referring to Disclosure Statement, he has submitted that all facts were made available to concerned parties and the informations were supplied in spread sheet form through email. According to him, there was substantial compliance of providing informations to the petitioners and there is no breach of any Rules as to non-disclosure of the important facts and informations to the petitioners. He has contended that equal treatments have been given to everybody and any other confidential facts has not disclosure, however, the facts which are confidential for the petitioner itself are supplied to him.

11.1 While referring the Rules 16 and 17 of the Rules, Mr.Desai, learned advocate has submitted that the Final Finding be always based on the observation made in Disclosure Statement and there is hardly any further inquiry needed after disclosure statement and, therefore, it could be assailed on the ground of similarity in the Disclosure Statement and Final Finding. He has contended that the Disclosure Statement is always based on data and there is no any exercise is taken during the period between the Disclosure Statement and Final Finding. According to him, on the basis of the informations, after conclusion of the Disclosure Statement, the question remain is only regarding evaluation of the data, which is being carried out and on that basis, the Final Finding could be arrived at. He has submitted that there is no breach of any natural justice and there is no allegation in the pleadings of the petitioners as to perversity in the action of the DA.

11.2 Regarding maintainability of the petition on the ground of availability of alternative remedy, Mr.Desai, learned advocate has also submitted that the appeal can be preferred by the petitioners before the CESTATE and the question raised by the petitioners could be gone into by the said Tribunal and the methodology could also be tested by the CESTATE. According to him, this is not a forum for the petitioners to revoke the jurisdiction of this Court under Article 226 of the Constitution of India. While relying on the following decisions on the point of jurisdiction, Mr.Desai, learned advocate has requested the Court to relegate the petitioners to prefer alternative remedy of approaching the CESTATE.

1. In the case of Jindal Poly Film Ltd. Vs. Designated Authority, reported in 2018 E.L.T. 994 (Delhi); = 2018-TIOL-1970-HC-DEL-CUS

2. In the case of Kesoram Rayon Vs. Designated Authority, reported in 2018 (359) E.L.T. 475 (Delhi); = 2017-TIOL-2439-HC-DEL-CUS

3. In the case of Outokumpu Oyj Vs. Union of India, reported in 2018 (360) E.L.T. 679 (Delhi); = 2018-TIOL-71-HC-DEL-CUS

12. In rejoinder, Mr.Soparkar, learned senior advocate for the petitioners has vehemently submitted that though his clients have received email but no annexure has been received by them regarding information on spread sheet. He has submitted that the Disclosure Statement is dated 21.01.2019, whereas, the email in question has sent on 15.01.2019. According to him, this was the earlier information sent before the Disclosure Statement was issued. He has submitted that there is no email or information sent by the authority after 22.01.2019. While referring to the affidavit-in-reply filed by the respondent authority, Mr.Soparkar has also submitted that sending of informations to the petitioners by the Designated Authority has not been specifically mentioned in such affidavit and it is only oral submissions made during the course of arguments, which cannot be accepted at all.

12.1 Regarding public file, Mr.Soparkar, learned senior advocate has also submitted that this is a public file which can be inspected by anyone and it is not confidential. Regarding substantial informations, Mr.Soparkar has submitted that the question is to provide every information and there is no question of any percentage of data to be provided to the party concerned.

12.2 Regarding decisions relied upon by Mr.Desai, learned advocate on the point of jurisdiction, Mr.Soparkar, learned senior advocate has submitted that there is no bar to the High Court to entertain the writ petition under Article 226 of the Constitution of India considering the fact that there is non-compliance on the part of the Designated Authority in providing the informations to the petitioners and considering the fact that the conclusion arrived at in Final Finding is diametrically opposed to the reasons given in report itself as well as in the disclosure statement, this Court has jurisdiction to entertain the petition and pass necessary order. He has prayed to allow the petition.

13. The Court has heard learned counsels for the parties and perused the pleadings. Before adverting to the rival contentions of learned advocates for the parties, it would be most appropriate to set out hereinbelow few indisputable aspects emerging therefrom-

(i) This petition is in respect of the goods imports of paracetamol originating in or exported from China PR.

(ii) On 22.01.2002, respondent No.2, on the basis of the inquiry conducted, issued the Final Finding Notification No.60/1/2000- DGAD recommending imposition of Anti – Dumping Duty on paracetamol from China PR.

(iii) On 27.03.2002, respondent No.1 vide Notification No.29/2002 – Customs (ADD) recommended the definitive anti-dumping duties in the form of benchmark.

(iv) On 25.07.2006, at the end of 5th year on the basis of the duly substantiated application filed on behalf of the domestic inquiry, respondent No.2 initiated a ‘sunset review’ investigation to examine whether the expiry of the duty would lead to continuation or recurrence of dumping and injury.

(v) On 31.08.2006, respondent No.3 vide its Notification No.87/20067 extended the definitive Anti-Dumping Duties in terms of Section 9A(5) for a period of one year upto 05.09.2007.

(vi) On 23.07.2007, after conducting a detailed investigation, respondent No.2 issued Final Finding vide its Notification No. 15/20/2006 – DGAD recommending continuation of Anti- Dumping Duty.

(vii) On 03.07.2007, in pursuance of such recommendation, respondent No.3 issued the Notification No.99/2007-Customs (ADD) levying Anti-Dumping Duty for a further period of five years.

(viii) On 28.08.2012, respondent No.2 initiated a sunset view investigation vide Notification No.14/1009/2012-DGAD to review the need for continued imposition of duties.

(ix) On 19.09.2012, the Anti-Dumping Duty was extended upto 02.09.2013 by respondent No.3 vide Notification No.42/2012-Customs (ADD).

(x) On 26.08.2013, After due investigation, respondent No.2 issued Final Finding No. 14/1009/2012 – DGAD recommending extension of duties in revised form changing from benchmark form of duty of fixed form of duty.

(xi) On 28.10.2013, in pursuance of the aforesaid recommendation of respondent No.2, respondent No.1 issued the Notification No.26/2013-Customs imposing fixed form of Anti-Dumping Duty for a period of another five years.

(xii) In 2018, the petitioner along with other, again approached respondent No.2 with duly substantiated application for extension of Anti-Dumping Duty.

(xiii) On 14.05.2018, respondent No.2 provided pre-initiation hearing to petitioner No.1.

(xiv) On 17.05.2018, a detailed written submission was made by the Domestic Industry.

(xv) On 24.05.2018, respondent No.2 initiated the sunset view to review vide Notification No.07/16/2018-DGAD.

(xvi) On 20.08.2018, respondent No.3 extended the Anti-Dumping Duty for a period of six months i.e. upto 26.04.2019 vide Notification No.39/2018-Customs (ADD).

(xvii) On 29.08.2018, respondent No.2 granted public / oral hearing to all the interested parties.

(xviii) On 07.09.2018, petitioner No.1 filed a detailed written submission.

(xix) On 15.01.2019, respondent No.2 issued Disclosure Statement under the provisions of Rule 16 of the Rules as mentioned in pages starting from page No.187 to 226.

The relevant extract thereof is reproduced hereinbelow.

27. Submissions made by the interested parties with regard to confidentiality and considered relevant by the Authority are examined and addressed accordingly. Information provided by the interested parties on confidential basis was examined with regard to the need for treating them as confidential. On being satisfied, the Authority has accepted the confidentiality claims of all the parties and accordingly not disclosed such information to other interested parties. Wherever possible, parties providing information on confidential basis were directed to provide non-confidential summary of the information filed on confidential basis. The Authority made available the non-confidential version of the evidence submitted by various interested parties in the form of public file.

H. NORMAL VALUE, EXPORT PRICE AND DETERMINATION OF DUMPING MARGIN.

H.1 Views of the Domestic Industry

41. The following are the submissions made by the domestic industry, during the course of present investigation and considered relevant by the Authority:-

i. China needs to be treated as non-market economy for the reason that the costs and prices in China do not reasonably reflect the market forces. Para 8 to Annexure – I specifies the parameters which should be considered for grant of market economy status. This also implies that unless these conditions are not fulfilled / satisfied, the Chinese costs and prices cannot be adopted.

ii. Chines produces are required to be treated as companies operating under non-market economy environment and the Authority may proceed to determine the normal value on the basis of Para 7 of Annexure – I.

iii. The imports are entering the Indian market at dumped prices.

iv. There is difference in prices in different important transactions which mean that Chinese producers are selling very same product at a price which differs significantly even at the same time period and is not a peculiar phenomenon of POI, but extends to the entire injury period.

v. It is a fit case where wighted average normal value cannot be compared with weighted average export price. The Designated Authority is, therefore, requested to compute the weighted average normal value and compare the same with individual export price and in all those import transactions where the dumping margin is negative, the same are required to be excluded for determination of dumping margin.

vi. There can be no plausible reason/justification for such significant difference in the prices in respect of imports being reported at the same time.

H.2 Views of the interested parties

42. The submissions made by the producers / exporters / importers / other interested parties are as follows :-

i. Determination of the normal value for subject country in the current investigation as computed by the domestic industry is not in accordance with the legal provisions and therefore, the determination of dumping margin in the current investigation by the petitioners is flawed.

ii. Normal value for the companies in China PR in the current investigation may please be determined on the basis of their domestic sales and the cost of the subject goods.

iii. It is in view of the fact that the period of 15 years for disregarding the domestic prices or costs of Chinese producers not being on market economy conditions as provided in para 15(a)(ii) of the Protocol of Accession of the People’s Republic of China to WTO, has expired on 11th December 2016 in terms of para 15(d) and has become non-operational.

iv. At present, no provisions which enable the Hon’ble Authority for considering Chinese producers as operating on non-market economy principles for disregarding their domestic prices and costs and the normal value for China may be determined on the basis of their domestic prices and cost of the subject goods.

v. Any other methodology used for the determination of normal value for Chinese exporters would be in violation of the obligations of India under the WTO.

vi. Without prejudice to above submission it is submitted that determination of normal value for Chinese exporters on the basis of their records without following any additional procedure, domestic industry has arbitrarily determined the normal value for Chinese exporters without following the due procedure as laid down under the Indian Anti- Dumping Rules.

vii. The constructed normal value proposed by the domestic industry is based on the costs of production in India and considering the rate of profit at 5%. However, the item-wise cost details of the constructed normal value have not been provided.

viii. The methodology of relying upon the Indian costs and prices is to be followed only when it was not possible to construct the normal value on the basis of other alternatives prescribed in the opening sentence of Para 7.

ix. In terms of the provisions of Para 7, the market economy third country is required to be first identified for determination of normal value and only where it is not possible to obtain necessary data from such third country, the normal value can be determined on any other reasonable basis, including the price actually paid or payable in India for the like product, duly adjusted if necessary, to include a reasonable profit margin.

x. The domestic industry is under obligation to inform, without reasonable delay the selection of market economy third country to the parties concerned so as to provide an opportunity to respond to the same.

xi. Mandatory procedure prescribed by the law has not been followed, as the interested parties have not been put to notice about selection of the third country. Nor have the interested patties been requested to suggest and make necessary information available about the third country.

xii. In the absence of following the mandatory procedure, the present proceeding cannot continue in view of the decision of the Hon’ble Supreme Court in the case of Shenyang Matsushita 2005 (181) ELT 320 (SC).

xiii. The failure to follow the mandatory procedure of Para 7 has substantive implications on the determination of the normal value and resultantly the dumping margin.

Xiv. Therefore, the Hon’ble Authority is requested to follow the procedure prescribed in Para 7 of the Annexure I in the current investigation.

H.3 Examination b the Authority

a. Normal Value in China

43. Upon initiation, the Authority advised the producers / exporters in China to respond to the notice of initiation and provide information relevant to determination of normal value. The Authority sent copies of the Supplementary questionnaire to all the known producers / exporters for rebutting presumption of non-market economy in accordance with criteria laid down in Para 8(3) of Annexure-I to the AD Rules. The Authority also requested Government of China to advise the producers / exporters in their country to provide the relevant information. However, none of the Chinese producers filed any response to the Supplementary questionnaire issued by the Authority.

44. Accordingly, the normal value and export price for the all the producers / exporters from the subject country have been determined as below.

a. Determination of Normal Value for producers and exporters in China PR

45. As none of the producers from China PR have filed the Supplementary Questionnaire response, the normal value has been determined in accordance with Para 7 of Annexure – I of Anti-Dumping Rules. In the absence of sufficient information on record regarding the other methods as are enshrined in Para 7 of Annexure I of the AD rules, the Authority has determined the normal value by adopting the method “any other reasonable basis”.

46. The Authority has, therefore, constructed the normal value for China PR on the basis of cost of production in India duly adjusted, including selling, general and administrative expenses. Accordingly, the constructed normal value for Chinese exporters is determined Rs.***** per Kg.

b. Determination of export price of China PR

47. The Authority notes that below mentioned exporters from China PR have furnished information to the Authority, which was used for determination of export price and individual dumping margin.

i. M/s. Anqiu Lu An Pharmaceutical Co., Ltd.

ii. M/s.A.H.A. International Co., Ltd.

iii. China Sinopharm International Corporation

iv. Zhejiang Chemcials Import and Export Corporation

v. Lianyungang Kangle Pharmaceutical Co., Ltd.

vi. Zhejiang Kangle Pharmaceutical Col.,Ltd.

vii. Hebei Jiheng (group) Pharmaceutical Co. Ltd.

In view of the responses filed, the Authority has analysed the response made by the producers / exporters as follows:-

M/s. Anqiu Lu An Pharmaceutical Co., Ltd. (Producer) and M/s.A.H.A. International Co., Ltd. China Sinopharm International Corporation and Zhejiang Chemicals Import and Export Corporation.

48. The Authority notes that M/s.Anqiu Lu An Pharmaceutical Co., Ltd has exported *** MT of the subject goods directly to India and *** MT through its traders M/s.A.H.A. International Co., Ltd. China Sinopharm International Corporation and Zhejiang Chemicals Import and Export Corporation. The Authority notes that whereas Anqiu Lu An Pharmaceutical Co has reported an export price of US$*(**/MT and A.H.A. International Co., Ltd., China Sinopharm International Corporation and Zhejiang Chemicals Import and Export Corporation have reported net export price of US$***, US$***/MT and US$***/MT respectively.

49. The producers-exporters have claimed price adjustments on account of inland freight, ocean freight, and marine insurance, credit cost, port expenses and VAT. Ex-factory export price has been determined for each producer/exporter. Weighted average export price of the said producer and its respective traders have thereafter been determined as US$***/MT considering the total volume of exports made by the said exporter.

M/s.Lianyungang Kangle Pharmaceutical Co., Ltd. (producer) and M/s. Zhejiang Kangle Pharmaceutical Co., Ltd.

50. The Authority notes that M/s.Lianyungang Kangle Pharmaceutical Co., has exported *** MT through its trader namely M/s. Zhejiang Kangle Pharmaceutical Co., Ltd. They have claimed price adjustments on account of inland freight, ocean freight, marine insurance, credit cost, port expenses and VAT. After adjustment of the expenses claimed by the producer / trader, the authority has determined the ex-factory export price as US$***/MT.

M/s.Hebei Jiheng (group) Pharmaceutical Co. Ltd. (producer)

51. The Authority notes that M/s.Hebei Jiheng (group) Pharmaceutical Co. Ltd have exported *** MT directly to India. The exporters have claimed price adjustments on account of inland freight, ocean freight, marine insurance, credit cost, port expenses and VAT. After adjustment of the expenses claimed by the producer / trader accordingly, the authority has determined the ex-factory export price as ***US$/MT.

c. Determination of Dumping Margin

Name of company (Producer) (POI)Name of the company (Exporter)CNV US$/ MTNEP US$/ MTDumping margin US$/MTDM%Range
M/s.Anqiu Lu An Pharmaceutical Co., Ltd.M/s.A.H.A. International Co., Ltd. China Sinopharm International Corporation************0-10
Zhejiang Chemicals Import and Export Corporation
Lianyungang Kangle Pharmaceutical Co., Ltd.Zhejiang Kangle Pharmaceutical Co., Ltd.************0-(10)
Hebei Jiheng (group) Pharmaceutical Co., Ltd.————************10-20

52. The dumping margin during the POI for all exporters/producers from the subject country has been determined as provided in the table below:-

Determination of Dumping Margin

a) Comparing the normal value and export price at ex-factory level for the country as a whole, the dumping margin for the subject country is determined as below:

Particulars US$ / Kg – Rs. / Kg. (POI)US$/KgRs./Kg
Normal Value******
Net Export Price******
Dumping Margin******
Dumping Margin %******
Range %10-2010-20

b) After details analysis of DGCIS transaction wise data it has been observed that out of total imports of China PR i.e. ***MT***% imports are dumped and ***% are injuries.

I. INJURY DETERMINATION AND EXAMINATION OF INJURY AND CAUSAL LINK

I.3 Examination of the Authority

55. According to Section 9(A) of the Customs Tariff Act, anti-dumping duty imposed 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.

(i) Assessment of Demand / Apparent Consumption

60. The Authority has defined, for the purpose of the present investigation, demand or apparent consumption of the subject goods in India as the sum of domestic sales of the India producers and imports from all sources. The demand for the product under consideration is given below:-

DemandUnit2014-152015-162016-17POI
Sales of Domestic IndustryMT************
Indexed 100104108108
Sales of other Indian ProducersMT************
Indexed 100114108110
Imports fromMT    
ChinaMT4,3561,9302,2052,969
Other CountriesMT791153065
Total Demand 48,25150,29549,60350,770

61. The Authority notes that the demand has shown increase over the injury period, even though it had marginally declined in 2016-17 as compared to the preceding year. The demand increased once again in the period of investigation as compared to both the preceding year and base year.

(ii) Volume Effect of Dumped Imports and impact on Domestic Industry: Import volume and Market Share.

62. With regard to 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. The table below summarizes the factual position with regard to import volumes and market share :-

ParticularsUnits2014-152015-162016-17POI
ChinaMT4,3561,9302,2052,969
Other CountriesMT791153065
Total importsMT4,4,342,04522353,034
Market Share in Demand     
Sale of Domestic Industry%************
Sale of other Indian Producers%************
Import from subject country%9%3.8%4.44%5.84%
Import from other countries%0.16%0.22%0.06%0.11%
Total Demand%100100100100

63. It is seen that the import volume declined till 2015-16 and increased thereafter. Also, the market share in demand of the domestic industry has remained more or less constant.

(iii) Price Effect of the Dumped Imports on the Domestic Industry.

a. Price Undercutting

64. With regard to the effect of dumped imports on prices, the Designated Authority is required to consider whether there has been a significant price undercutting by the dumped imports when 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. In this regard, a comparison has been made between the landed value of the product and the selling price of the domestic industry net of all rebates and taxes, at the same level of trade. The Authority has compared landed price of imports with the selling price of the domestic industry for the subject goods.

Price Undercutting

ParticularsUnitPOI
Landed price of imports from China PRRs./Kg250.06
Net Sales RealizationRs./Kg***
Price undercuttingRs./Kg(***)
Price undercutting%(***)
Range (0-10)

From the above, the Authority notes that there is no price undercutting.

65. The domestic industry submitted and opposing interested parties have not disputed that the entirety of the imports were made under advance license and therefore neither customs duty nor ADD was paid on these imports.

b. Price Suppression / Depression

66. In order to determine whether the dumped imports are suppressing or depressing the domestic prices and whether the effect of such imports is to suppress prices to a significant degree or prevent price increases which otherwise would have occurred to a significant degree, the Authority considered the changes in the costs and prices over the injury period. The position is shown as per the table below :-

ParticularsUnits2014-152015-162016-17POI
Cost of salesRs./Kg************
Trend 100898799
Selling priceRs./Kg************
Trend 1009389103
Landed price of importsRs./Kg265266238250
Trend 1001028794

67. The Authority notes that whereas the selling price has increased in the POI as compared to the base year, the cost of sales has marginally declined in POI. The landed value of imports from subject country has declined in POI as compared to the base year. The Authority notes that the domestic industry increased its selling price in proportion to increase in cost of sales throughout the injury period. Therefore, there is no price suppression or depression.

69. Accordingly, various economic parameters of the Domestic Industry are analyzed herein below :-

a) Production, Capacity, Capacity Utilization and Sales Volume

70. Production, sales, capacity & capacity utilization details are as follows:-

ParticularsUnits2014-152015-162016-17POI
CapacityMT************
TrendIndexed100100100100
ProductionMT************
TrendIndexed100103111126
Capacity utilization%************
TrendIndexed100103111126
Domestic Sales for PUCMT************
TrendIndexed100113116117

b) Demand

71. From the above information, the Authority notes the following:-

a) Capacity of the domestic industry has remained constant over the period.

b) The production, sales and capacity utilization of the Domestic Industry has increased over the injury period.

DemandUnit2014-152015-162016-17POI
Sales of Domestic IndustryMT************
Indexed 100104108108
Sales of other Indian ProducersMT************
Indexed 100114108110
Imports from     
ChinaMT4,3561,9302,2052,969
OtherMT791153065
Total DemandMT48,25150,29549,60350,770

c) Market Share in Demand

72. The details of market share of the Domestic Industry in demand are given in table below.

ParticularsUnits2014-152015-162016-17POI
Sale of Domestic Industry%************
Sale of other Indian Producers%************
Import from subject country%9%3.8%4.44%5.84 %
Import from other countries%0.16%0.22%0.06%0.11 %
Total Demand%100100100100

74. Performance of the Domestic Industry with regard to profits, return on investment and cash flow is as follows:-

ParticularsUnits2014-152015-162016-17POI
Profit / (Loss)Rs./Kg.************
TrendIndexed100375225325
Cash ProfitRs.Lacs************
TrendIndexed100240165255
Return on Capital Employed – NFA%************
TrendIndexed10017390136

75. It is seen from the above table that the profitability, cash profits and return on investments have increased in the POI when compared to he base year/.

80. The Non-injuries price of the subject goods produced by the domestic industry as determined by the Authority in terms of Annexure III to the AD Rules has been compared with the landed value of the exports from the subject country for determination of injury margin during the POI and the injury margin so worked out is as under.

SNParticularUOMChina (POI)
1Import VolumeMT2969
2Non Injurious PriceRs./KG***
3Landed PriceRs./KG***
4Injury MarginRs./KG(***)
5Injury Margin%(***)
 Injury Margin RANGE 0-(10)

J. LIKELIHOOD OF CONSTINUATION OR RECURRENCE OF DUMPING AND INJURY

J.1 Submissions by the Domestic Industry

82. Following are the submissions made by the Domestic Industry with regard to likelihood of continuation of dumping and consequent recurrence of injury –

i. A perusal of Article 11.1 of AD Agreement and Section 9A(5) of the Customs Tariff Act, clearly suggests that the main intent behind the legislation of Sunset Review investigation is to examine:-

a) Whether the dumping continued and if so, whether it is likely to continue;

b) In case where dumping did not continue, whether the dumping would recur in the event of revocation of anti-dumping duties;

c) Whether the Domestic Industry continued to suffer injury; and if so, whether injury to the domestic industry is likely to continue;

d) In case where the Domestic Industry has not suffered continued injury, whether injury to the Domestic Industry is likely to recur in the event of revocation of anti-dumping duties.

ii. The original investigation and the subsequent Sunset Review investigations also established the existence of significant dumping. The dumping margin in the previous as well as the first SSR was quite high.

iii. There is a long history of dumping of subject goods from China in domestic market as well as in other countries such as South Africa and Indonesia.

iv. The continued dumping was only reduced after the last concluded sunset review investigation. Prior to that, the domestic industry was suffering continued injury on account of significant dumped imports, as stated by the Authority in the final findings earlier notified in the review cases.

v. The significant level of these imports only started declining since 2015-16. However, it is pertinent to note that the domestic industry is still healing from the past injuries effects of dumping and thus is in a vulnerable state. Cessation of antidumping duties is likely to cause intensified injury to the domestic industry.

vi. It would appear that the domestic industry has enjoyed anti-dumping duty protection for the last 15 years, the fact is that the domestic industry has been effectively protected for only last five years. The Chinese producers continued dumping and the same caused injury to the domestic industry for one decade, despite the ADD being in force.

vii. The change in the form of duty from benchmark to fixed quantum has led to reduction in imports. Cessation of anti-dumping duly is likely to increase the imports as significant surplus capacities are available with the producers. The decline in the imports is because of existence of ADD.

viii. Due to continuous dumping several plants producing the PRODUCT UNDER CONSIDERATION have been closed down in the country namely :-

– M/s.Triton Labratories Ltd.

– M/s.Vamsi Labs Ltd.

– M/s.Srinivasa Agro Industries & Drugs Ltd.

– M/s. Pan Drug

– M/s.Alpha Drug

– M/s.Glaxosmithkline Pharmaceuticals Ltd.

– M/s.Thexa Pharma Pvt. Ltd.

– M/s.Vani Pharma Labs Ltd.

– Rohini Chemical

– Fortune Chemical

– Dinesh Pharmaceutical

– Dr. Jain’s Company

– Saboo Medichem

ix. The production of product under consideration is quite limited globally. About 86% of global production is in India and China. 62% of the production is in China alone, while India commands 24%. Thus, any sickness in this industry would leave the global demand at the mercy of the Chinese producers.

x. The questionnaire responses filed by the exporters, establish that there is import of subject goods from subject country at dumped price.

xi. The domestic industry in the present scenario is still reeling from the adverse effects of the dumping and has shown marginal growth in terms of its economic parameters. The same growth would be reversed if the Anti-dumping duty is ceased by the Authority.

xii. The only reason the domestic industry has not suffered further deterioration in its performance is that the volume of imports was low due to the duties in force. However, the producers in the subject country has significant idle capacities, which are sufficient to meet the entire demand in India. In the event of cessation of duty, the exports are likely to utilize these unutilized capacities and flood the Indian market.

xiii. The foreign producers are export oriented, in as much as their capacities are far more than the domestic demand in the subject country. The production of the subject goods in subject country is in the range of 1 lacs MT, as against 2.21 lac MT capacities; whereas the domestic demand for the product in China is far lower nearly 20,000 MT. This clearly shows that the exporters have built up capacities in excess of the demand in the subject country out of 1 lac MT production, about 80% are meant for exports.

xiv. The exporters have not only been dumping in India, but also in other countries. Further, the prices at which the goods have been supplied to these countries are lower than the non-injuries prices. It is, therefore, reasonable to conclude that the exporters are likely to sell at dumped and injurious prices in India as well in case the duty is revoked.

xv. The export price from subject country to various countries globally are far lower than the export price to India in respect of significant proportion of exports from subject country to various countries globally. The dumping margin and injury margin in these third countries exports are higher than the dumping margin and injury margin in respect of exports to India.

xvi. Since India is a more price attractive market as compared to third countries, the exporters would prefer to divert their goods from other countries to India in case of revocation of duty, in order to increase their profits and capture the market. Considering that the exporters have no commitments in these third country markets and the sole criteria for them to price their product is price received by them.

xvii. Decline in imports post imposition of duty and positive dumping margin in such imports implies likelihood of dumping in the event of withdrawal of duty and in itself justifies extension of anti-dumping duty.

J.2 Submission of exporters

83. There is no likelihood of recurrence of injury as per Article 9A(5) of the Customs and Tariffs Act.

i. The petitioners have not given the details of excessive capacity available with the Chinese producers and their likelihood of being exported to India, the petitioners have failed to make out a case of likelihood of dumping.

ii. This clearly indicates that there is no likelihood of injury to the domestic industry in the current investigation and the present investigation deserves termination.

J.3 Examination by the Authority

84. The Authority examined the likelihood of continuation or recurrence of injury considering the parameters relating to the threat of material injury in terms of Annexure II (vii) of the Anti-dumping Rules. The domestic industry has submitted the details of exports of China to third countries as per China customs which shows that ***% volume of exports to third countries are at a price lower than price at which China exports to India and ***% of the volume of exports to third countries are at a price above than price at which China exports to India.

85. The Authority has taken into consideration the submissions made by the domestic industry and the evidence presented in support of their submissions. The Authority has examined the likelihood of continuation of recurrence of injury under following heads:

a. A significant rate of increase importation; 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 increased dumped exports to India 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.

86 A significant rate of increase of dumped imports into India indicating the likelihood of substantially increased importation.

ParticularsUnits2014-152015-162016-17POI
ChinaMT4,3561,93022052969
OthersMT791153065
Total importsMT4,4342,0452,2353,034

*April 17 to Mar 18

87 The Authority notes that while there was a consistent decline in the volume of imports compared to base, year.

88. An analysis of transaction wise data of the cooperative producers with their respective exporters so as to arrive at dumped and injurious imports of the cooperative producer of the present investigation is as follows:-

a) M/s.Anqiu Lu An Pharmaceutical Co., Ltd.

The total exports to India by the said producer with trader of the subject goods are ***MT out which ***MT are dumped imports and ***MT are injurious imports.

b) M/s. Lianyungang Kangle Pharmaceutical Co., Ltd.

Total exports to India by th said producer of the subject goods through its exporters is ***MT out which dumped imports constitute ***MT. No injurious imports were found for the said producer through its exporter.

c) M/s.Hebei Jiheng (group) Pharmaceutical Co. Ltd.

Total exports to India by the said producer of the subject goods is ***MT. All imports of the said producer are dumped and ***MT are injurious.

(b) Sufficient freely disposable, or an imminent, substantial increase in, capacity of the exporter indicating the likelihood of substantially increased dumped exports to India markets, taking into account the availability of other export markets to absorb any additional export.

89. The Authority evaluated the existing surplus capacities, capacity addition, if any, with the responding exporters, possibility of trade diversion from third countries to India, freely disposable production capacities with the responding exporters. The analysis shows as follows:

a. Capacity, production, surplus capacities, exports to India and rest of the world, volume of exports to India.

Name of ProducerUnitsAnqiu Lu An Pharmaceutical Co. Ltd.Lianyungang Kangle Pharmaceutical Co., Ltd.Hebei Jiheng (group) Pharmaceutic al Co., Ltd.Total
CapacityMT************
Production (POI)MT************
Capacity utilisation%************
Domestic ConsumptionMT************
Exports to IndiaMT************
Exports to ROWMT************
Total ExportsMT************
% Exports OrientationRang e %*********35-45

b. After analysis of the capacities of the cooperative exporters, the Authority notes that the capacities of the following non-cooperative exporters/producers as per the data submitted by the petitioner and the information available in public domain.

S.NoProducers in ChinaCapacity (MT per annum)
1Anhui BBCA Likang Pharmaceutical10000
2Changhu Huagang Pharmaceutical8000
3Jiangsu World kindly Pharmaceutical10000
4Wenzhou Pharmaceuticals factory6000
5Jiangsu Guoheng Pharma Chemicals Co., Ltd.2500
6Runqi Trading Co., Ltd.12000
7Shanghai Bailion Chemicals Col., Ltd.50000
8Lianoyuan City Baikang Pharmaceutical500
9Total capacity of non- cooperative entitles99000
10Total capacity of cooperative producers75000
11Total capacity of China PR174000
12Indian demand51069

c. However, it is observed from the analysis of the cooperating producers that the trading companies do not have their own production facilities and they quote the capacity of the producers on their websites.

b. Considering the capacity utilisation and export orientation of the responding producers and evidence provided by the domestic industry, it is evident that there are surplus capacities in China and the Chinese producers are export oriented.

(C) Inventories of the article being investigated

90. The questionnaire response filed by the Chinese producer’s shows that level of inventories with the cooperative producers / exporters is quite significant.

ProducerUnits201520162017POI
M /s Anqiu Lu An Pharmaceutical Co., Ltd.MT************
Lianyungang Kangle Pharmaceutical Co., Ltd.MT************
Hebei Jiheng (group) Pharmaceutical Co. Ltd.MT************
TotalMT************

(D) Price attractiveness of Indian Market

91. Analysis of the China PR Custom data with regard to export from China PR to the rest of the world. Indicate that with the revocation of ADD, the Indian prices would be attractive for the Chinese producers / Exporters to increase their exports to India and the same can be deduced from the table give below:

CountryQuantityValuePrice
India (IN)*********
Congo, DR*********
Cuba (CU)*********
Kenya (KE)*********
Mauritius (MU)*********
Indonesia (ID)*********
S. Africa (ZA)*********
Iraw (IQ)*********
Zambia (ZM)*********
Russia (RU)*********
Iran (IR)*********
Syrian (SY)*********
Benin (BJ)*********
Mozambique (MZ)*********
United Arab Emirates (AE)*********
Tanzania (TZ)*********
Lithuania (LT)*********

Source : China Custom

92. The Authority notes that ***% total volume of exports to third countries is at a price lower than the price at which China export to India. Whereas ***% of the total exports are exported are above at price at which China exports the subject goods to India.

(E) Export Orientation of China PR

93. As per the data of China Customs and other evidence filed by the Domestic Industry, the Authority notes that the producers in China are oriented toward exports globally.

In the event of cessation of ADD, there is probability that the exporters/producers would resort to dumping of subject goods to India.

K. CASUAL LINK AND NON ATTRIBUTION ANALYSIS OF OTHERS KNOWN FACTORS

94. Having examined the existence of continued dumping, volume and price effects of dumped imports on the prices of the Domestic Industry, other indicative parameters listed under the Indian Rules and Agreement on Anti-Dumping have been examined herein below by the Authority to see whether any other factor, other than the dumped imports could have contributed injury to the Domestic Industry.

(xx) On 21.01.2019, the petitioners have submitted its submissions regarding Disclosure Statement, which starts from page No.227 to 243. The relevant extract thereof is reproduced hereinbelow.

A. Preliminary submissions

1. The petitioner requests the disclosure of following facts, in order to enable them to come a meaningful conclusion.

a Copy of the Communications sent by the Authority and copy of the replies filed by the interested parties. The Authority may kindly make available a copy of all the communications sent via mail or letter, to the opposing interested party and replies filed by the interested party. The applicant is not requesting any confidential information. The applicant is requesting only NCV of this information.

b Submissions by interested parties: A copy of all the communications filed by the interested parties. In case there is anything confidential, petitioner requests non confidential version of the same.

c Copy of the rejoinder submissions: Petitioner requests a copy of the rejoinde submissions filed by other interested parties. In case there is anything confidential, petitioner requests non confidential version of the same.

d Verification Report: Petitioner requests a copy of the verification report prepared by the Authority after due verification visits made for both the domestic industry. In case there is anything confidential, petitioner requests non confidential version of the same.

e Normal Value: Since it is based on the domestic industry date and information publicaly available/ used. In case there is anything confidential, petitioner requests non confidential version of the same.

f NIP breakdown:- showing therein expenses allowed and disallowed for the purpose of NIP computation, optimization of raw materials, utilities and overhead expenses in case the Designated Authority found that there were some inefficiencies in the same. This is all the more important, as (i) it appears that the NIP determined is unduly low, (ii) there appears an assumption with regard utilization of raw materials, utilities and production capacities.

g Actual data in injury assessment:- Since this data pertains to the domestic industry, petitioners request disclosure of this data to the petitioners on actual basis.

2. The above is vital for the domestic industry to offer their meaningful comments on the disclosure statement. However, pending such disclosure, the domestic industry hereunder makes following preliminary submissions to the Disclosure Statement. The domestic industry craves leave to make further submissions, as and when the above essential facts are disclosed.

B. Emerging essential facts flowing from the Disclosure Statement issued are as follows:

3. Following are the emerging essential facts flowing from the Disclosure Statement. Petitioner believes that the Authority has concluded the following and is making submissions under this belief. Further, petitioner is reproducing some of the facts presented by it earlier only as a matter of reiteration, despite these facts already having been established by the Designated Authority in favor of a positive final determination.

i Product under Consideration and Like Article: The product under consideration in the present Sunset Review investigation is Paracetamol and the goods produced by the Domestic Industry and imported from the subject country are like articles in terms of the Rule 2(d) of the Anti-Dumping Rules.

ii Standing: M/s Farmson Pharmaceuticals Gujarat Private Limited and M/s Sri Krishna Pharmaceuticals Limited constitutes “a major proportion of total Indian production” and hence, satisfies the standing requirements for the subject goos under Rule 2(b) and Rule 5(3) of the AD Rules.

iii Dumping: The dumping margins are significant for the cooperating exporters / producer and as well as for the country as a whole ,

iv Injury/Likelihood of injury: As regards the likelihood analysis, it is evident that there are surplus capacities in China and the Chinese producers are export oriented and China is highly export oriented country and in the event of cessation of ADD, there is probability that the exporters/producers would resort to dumping of subject goods to India

v Non attribution analysis: Other known factors are not the factors contributing to or causing injury to the domestic industry.

C. Information/ submission on which no disclosure of Authority’s Examination is made in the present disclosure statement:-

4. The disclosure statement has not addressed the following submission therefore the Authority is requested to disclose essential facts on the below mentioned information/submission before issued the Final Finding:-

By Domestic Industry:

i. The production of product under consideration is quite limited globally. As, about 86% of global production is in India and China only and out of which 62% of the production is in China alone, while India commands the remaining 24%. Thus, any sickness in this industry would leave the Indian users at the mercy and monopoly of the Chinese producers.

ii That due to the adverse effect of the insufficient form of duty there were large-scale production suspension in the country, which was primarily in the last two decades (all these closures are more than 5 years old and are prior to previous extensions of ADD).

iii As per 145th Parliamentary standing committee on commerce which assessed the impact of Chinese goods on Indian industry, it is clearly stated that API sector needs protection from import and the government of India also endeavors to revive the API sector in India.

iv Katoch Committee Report dated 24 September, 2015 on Active Pharmaceuticals Ingredients (APIs) specifically states that a long term strategy for strengthening API sector by involving Ministry of Commerce as well as other regulator authorities is required which involved judicious and liberal use of measures like anti-dumping.

v FICCI report February 2018 edition on “Trends and Opportunities for Indian Pharama” highlights that dependence on China for API supplies exposes the pharma industry to raw material supply disruptions and price volatility.

vi Office Memorandum dated 18th April, 2018 issued by the Government of India, Ministry of Chemicals and Fertilizers, Department of Pharmaceuticals, constituted a Task Force to formulate a road map for enhanced production of APIs in the country as there is need for concerted efforts to harness the opportunities in pharmaceutical sector.

vii The public at large is already well protected through a regulator mechanism as Paracetamol is covered under National List of essential medicine in Pharmaceutical Policy, 2015.

viii Paracetamol is one of the cheapest API available in the country.

By other Interested Parties:

i The anti-dumping duties against the import of subject goods are in existence for more than 17 years and the present case is not a special case where duties are required to be extended for a further period of 5 years. (Para. 54 ii)

ii The majority of imports to India from subject country are under duty free schemes such as advance license. DEPB etc. run by the Govt. of India which are not subject to duty.

iii Even if such imports are included for analysis of injury and likelihood of injury and anti-dumping duty is recommended, the imports made under said duty free schemes would not be subject to any anti-dumping duty and would continue to come to India.

iv The largest producer of the subject goods i.e. Granules India having sales of Rs. 579 Cores in the period of investigation in India have been abstained from all the 3 sunset review investigations and provided no injury information. Therefore. the analysis of injury and likelihood of injury on the basis of limited information in all the 3 SSR investigations cannot give the true picture of the state of the domestic industry and therefore, in the current case. there is no need to extend duty for another period of five years.

v The Authority while issuing the Final Finding concerning Dry Cell Batteries from China PR (Case No. 15/2/2011-DGAD & Final Findings dated 20th May 2013) has held that the anti-dumping duties beyond 10 years be imposed in Special cases only.

5. Petitioner has further following submissions:

D. Scope of Product under Consideration & Like Article

6. With regard to the scope of the product under consideration and like article the Designated Authority has rightly noted at Para. 13 and 17 of the Disclosure Statement that the product under consideration (PUC) and like article in the present Sunset Review investigation remains the same as that of the earlier investigations which is Paracetamol.

7 Paracetamol is also known as “acetaminophen” which is classified under Customs sub heading No 29222933 under chapter 29 of the Customs Tariff Act, 1975 and the same is however indicative only and not binding on the scope of the present investigation. Designated Authority has also correctly held that the goods produced by the domestic: industry are comparable to the PUC in terms of physical characteristics, manufacturing process & technology, functions & uses, product specifications and tariff classification of the goods. The two are technically and commercially substitutable since they are being used interchangeably by the consumers. Therefore, the goods produced by the Domestic industry and imported from the subject country are like articles in terms of the Rule 2(d) of the Anti-Dumping Rules.

E. Scope of the Domestic Industry& standing

8. With regard to the scope of the Domestic industry & Standing the Designated Authority has rightly at Para. 23 have noted that the petitioner companies are eligible domestic industry in terms of AD Rules. Further. production of the petitioner companies namely M/s Farmson Pharmaceuticals Gujarat Private Limited and M/s Sri Krishna Pharmaceuticals Limited constitutes “a majo proportion of total Indian production” and hence, satisfies the standing requirements for the subject goods under Rule 2(b) and Rule 5(3) of the AD Rules. it is further submitted that at Para.22 of Disclosure Statement the Authority has noted that M/s Bharat Chemicals has provided all the necessary information. However, the Authority has not considered the same as the Designated Authority considers that the same was filed at belated stage of investigation.

9. It is submitted that the Designated Authority at Para. 22 of the Disclosure Statement have noted that “in case of Sunset review it would be desirable to have the same composition of domestic industry as in original investigation”. However, it is submitted that there is no legal mandate under the provisions of Anti-dumping law which states that in all the subsequent investigation there should be same composition of the domestic industry as of the original investigation.

10. Para. 23 of the Disclosure statement contains confidential figures of the domestic industry hence, the Authority is requested to make it confidential before issuing the Final finding.

F. Determination of Normal Value Export Price And Dumping Margin

Normal Value

11. Para 45 of the Disclosure Statement clearly shows that post initiation Designated Authority has sent copies of the supplementary questionnaire to all the known producers / exporters and Government of China for rebutting presumption of non-market economy in accordance with criteria laid down in Para8(3) of Annexure-l to the AD Rules. However, none of the producers / exporter from China PR has filed the Supplementary Questionnaire response to claim market economy status. Therefore in the absence of sufficient information on record the Authority has rightly determined the normal value on the basis of cost of production in India for the like product, duly adjusted, including selling, general and administrative expenses, in terms of Rule 6(8) of the Rules.

Export Price

12. In the present case, as already submitted that the export price from subject country significantly differs in terms of time period and therefore it is a fit case where weighted average normal value cannot be compared with weighted average export price. The Designated Authority was requested to consider weighted average normal value and compare with individual export price and in all those import transactions where the dumping margin is negative, the same are required to be excluded for determination of dumping margin.

13. It is further submitted that the determination of export price by the in the present case is not consistent with the SOP manual issued which state as follows:

“12. 23.2 Alternatively, if it is established that the producer has exported through an unrelated exporter, then take the sale price of the subject goods from producer to first exporter and adjusted for ex-factory expenses to arrive at NEP. In this case it should be unrelated exporter should have made the exports at profits. In case exporter has posted losses (as verifies from appendix 5&9) then a reasonable profit has to be deducted for computation of ex factory export price”

14. Therefore in a case like present where the producers have exported the goods through unrelated trader and where it does not appear a case that the traders have made losses, the export price should be determined considering the selling price of the producer.

15. Even otherwise, the petitioners submit that the export price reported by the producers should be rejected and export price reported by the trader/exporter should be adopted only when it is found that the trader has sold the product at a lower price. As noted in the SOP manual, only in a case where the traders suffer a loss, the selling price of trader can be adopted. However, if traders earn profits. the selling price of producer should be adopted.

16. The export price determined is therefore not appropriate.

Dumping margin

17. Designated Authority at Para. 52 (b) has rightly noted that out of total imports of China PR i.e.*** MT “* % imports are dumped and” “% are injurious. This clearly shows that despite Anti dumping duty in force. subject goods are being dumped from subject country at significant level. Hence. there is need for continuation of Anti dumping duty and the Designated Authority is requested to consider the same.

G. Assessment of injury

18. The Designated Authority has noted at Para 61 of the disclosure statement that the demand of subject goods has shown increase over the injury period.

19. Designated Authority at Para. 63 has noted that the import volume decline till 2015-16 and increased thereafter however, it is submitted that there is a declined in the volume of import in 2015-16 and thereafter it increased significantly despite Anti dumping duty in force.

20. With the reference to issues regarding M/s Granules not providing the information in the present investigation. the petitioner earlier submitted that Granules ‘India is undertaking significant exports with some special arrangements with some buyer and therefore its production to that extent is not even available in the market. The company is not suffering injury to such an extent.

H. Economic Parameters of the domestic industry

21. As per the provisions of the Anti dumping Law unlike original investigation current injury to the Domestic industry in not required in a sunset review investigation (SSR). SSR are prospective in nature. as they focus on the likelihood of the continuation or recurrence of dumping and injury, in case cessation of anti dumping duties. Therefore the Designated Authority is requested to focus on as to whether the domestic industry is likely to be materially injured again, if duties are lifted.

22. The Designated Authority has noted as follows with regard to various economic parameters:

i At 71 of the Disclosure Statement Designated Authority note the fact that the production, sales and capacity utilization of the Domestic Industry has increased over the injury period. This however only shows absence of current injury and in itself insufficient to hold absence of likelihood.

ii At Para 75 of the Disclosure Statement Designated Authority has noted that profitability, cash profits and return on investments have increased in the POI when compared to base year. The Designated Authority is requested to consider the fact this improvement is due to anti-dumping duty in force. Further, this only shows absence of current injury and in itself insufficient to hold absence of likelihood.

iii At Para 77 of the Disclosure Statement Designated Authority has rightly noted that the average inventory level of the subject goods has shown an increasing trend.

Injury Margin

23. Without prejudice, it is submitted that injury margin is not germane to likelihood of dumping and injury analysis. NIP is determined only for the purpose of quantification of duty, and is not relevant for the determination regarding existence of injury or likelihood thereof. Rule 17(2) to the Rules also makes it evident that the question of quantum of injury shall arise only when the Designated Authority finds injury to the domestic industry:-

[(b) recommending the amount of duty which, if levied, would remove the injury whereapplicable, to the domestic industry after considering the principles laid down in the Annexure III to these rules]

24. Similar view has been held by the Hon’ble Court in matter of Nirma Ltd. v. Union of India 2017(358) E.L.T. 146 (Guj) = 2017-TIOL-2183-HC-AHM-CUS that injury margin and NIP is determined only for the purpose of quantification of duty, and is not relevant for the determination regarding existence of injury provided for in Annexure II” to the Anti dumping Rules. 1995. Relevant extract are reproduced below:

“Para. 34… It may be noted that injury margin is required to be determined when the designated authority comes to the conclusion that there is material injury requiring imposition of anti-dumping duty, whereupon the quantum of anti- dumping duty to be levied is based upon the injury margin. Therefore,determination of injury margin would come into play only in case the designated authority comes to the conclusion that determinative measures are required to be applied. Where the designated authority comes to the conclusion that no determinative measures are required to be imposed, as in the present case, the question of determining the injury margin would not arise.

“Para 34.1” However, for the purpose of rule 16 which requires the designated authority to disclose the essential facts under consideration which form the basis for its decision whether or not to apply determinative measure, determination of non-injurious price is irrelevant, as the same has no relevance so far as determination of injury is concerned. While the designated authority may compute the non-injurious price for the purpose of giving the panties an opportunity to make their comments in respect of such computation at the stage of disclosure statement, however, such non-injurious price cannot be taken into consideration for the purpose of determination of injury. Non-injurious price having no relevance insofar as determination of injury is concerned, would not form an essential fact for the purpose of arriving at a decision as to whether or not determinative measures are required to be applied. It is only after coming to the conclusion that there is injury necessitating imposition of or continuance of anti-dumping duty, that the designated authority is required to determine the injury margin, for which purpose it has to determine the non-injurious price as per the principles laid down in Annexure Ill to the rules for the purpose of fixing the quantum of anti-dumping duty to be imposed.”

25. It is submitted that the Designated Authority is required to determine injury margin only in those cases where the Authority finds that the imports are causing injury. However, if the Designated Authority does not find injury to the domestic industry, like in the present case, the Designated Authority is not required to and should not determine injury margin. In fact, when there is no injury, there can be no need for determining injury margin. And, a negative injury margin only shows that the domestic industry is not suffering current injury. Therefore, in a situation where the Designated Authority finds absence of injury, the Designated Authority is not required to determine injury margin and proceeds with the investigation and issue finding based on likelihood analysis. and confirm the same quantum of ADD, which is required to be done in the present case.

26. In the past also Designated Authority has not modified the quantum of ADD both in MTR and SSR when the Designated Authority found that the need for continuation/extension is based on likelihood of injury. Domestic industry refers to the following illustrative cases where the Designated Authority declined to modify the quantum of ADD and merely extended existing ADD. In some of these cases, the injury margin was found negative in the review investigation period.

SNNAME OF THE CASEINJURYDUTY IMPOSED
1Zinc Oxide from China PRNo InjuryContinuation of definitive anti dumping duty
2Front Axle Beam’ and “Steering Knuckles from China PRNo material injuryContinuation of definitive anti dumping duty
3Choloroquine phosphate from China PRZero imports in period of investig ation as well as injury periodContinuation of definitive anti dumping duty
4Diclofenac Sodium from China PRNegativ e dumping and injury margin in POIContinuation of definitive anti dumping duty
5Acetone originating in or exported from European Union, South Africa, Singapore and USANegativ e InjuryExtended the Anti dumping duty
6Polypropylene from SingaporeNegativ e Injury MarginContinuation of definitive anti dumping duty

I. Likelihood of continuation of Recurrence of Dumping and Injury

27. It is submitted that Article 11.1 of Anti Dumping Agreement and Section 9A (5) of the Customs Tariff Act, clearly suggests that the main intent behind the legislation of Sunset Review investigation is to examine:

i Whether the dumping continued and if so, whether it is likely to continue;

ii In case where dumping did not continue, whether the dumping would recur in the event of revocation of anti-dumping duties;

iii Whether the Domestic Industry continued to suffer injury; and if so, whether injury to the domestic industry is likely to continue;

iv In case where the Domestic Industry has not suffered continued injury, whether injury to the Domestic Industry is likely to recur in the event of revocation of anti-dumping duties.

28. The Authority has examined the likelihood of continuation or recurrence of injury considering the parameters relating to the threat of material injury in terms of Annexure II (vii) of the Anti-Dumping Rules at Para. 86-93 of the Disclosure statement.

29. The Designated Authority has noted as follows With regard to likelihood of injury in the present case

i For Cooperating exporter/producer Authority at Para. 89(d) has rightly noted that “Considering the capacity utilization and export orientation of the responding producers and evidence provided by the domestic industry, it is evident that there are surplus capacities in China and the Chinese producers are export oriented.

ii Capacities of the following Non-cooperative exporters/producers: Further at Para. 89(c) the Authority has noted that on the basis of analysis of the Co- operating producers that the trading companies do not have their own production facilities and they quote the capacity of the producers on their websites.

iii Authority at Para. 90 have noted that on the basis of “the questionnaire response filed by the Chinese producer’s shows that level of inventories with the cooperative producers/exporters is quite significant.

iv Authority at Para. 91 have noted that “..export‘ from China PR to the rest of the world indicate that with the revocation of ADD the Indian prices would be attractive for the Chinese producers/Exporters to increase their exports to India”

v As rightly noted by the Authority at Para. 93 of the Disclosure statement that “the producers in China are oriented towards exports globally. In the event of cessation of ADD there is probability that the exporters/producers would resort to dumping of subject goods to India”.

30. The above disclosure of various parameters clearly indicates that in a situation like present, the anti dumping duty needs to be extended.

J. Causal link and Non Attribution Analysis of Other Known Factors

31.Under the provisions of law the Designated Authority is required to undertake a non-attribution analysis, wherein, the authority is required to compulsorily examine other possible factors as listed under the law. This is akin to “rule out test” wherein a number of parameters listed under the law are required to be examined to ascertain whether the domestic industry has suffered injury on account 0t any of these factors. Even if none of the interested parties have pointed to possible existence of these factors, the authority is obliged to undertake analysis and rule out that the injury to the domestic industry is not primarily on account of these listed other factors. This is popularly known as “nonattribution analysis”.

32. It is submitted that at Para. 95-100 the Designated Authority has noted that listed known other factors have not caused injury to the domestic industry and if no other factor causing injury to the domestic industry has in fact been examined by the Authority, then, the only inference to be drawn is that dumped imports have caused injury to the domestic industry.

33. Without prejudice it is submitted that in case of a sunset review, Article 11.3 of the Anti Dumping Agreement only requires investigating authorities to determine whether the expiry of the duties would be likely to lead to continuation or recurrence of dumping and injury. Once it has been established that cessation of duties is likely to cause recurrence or continuation of dumping and injury to the domestic industry, there is no requirement to establish the existence of a causal link between the likely dumping and likely injury. As observed by the Appellate Body in the case of United States Anti-Dumping Measures on Oil Country Tubular Goods (OCTG) from Mexico [WT/DS282/AB/R], in a review investigation, it is determined whether expiry of duty is likely to lead to a continuation or recurrence of dumping or injury, and “it is reasonable to assume that, where dumping and injury continues or recurs. the causal link between dumping and injury, established in the original investigation, would exist and need not be established anew.” “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” and there is no requirement to establish a causal link between the likely dumping and the likely injury to the domestic industry.

K. NIP determined is too low leading to insufficient injury margin

34. The non injurious price determined is too low resulting into negative injury margin. The non injurious price has been reduced on account of number of factors. The domestic industry requests the authority to kindly consider the followings with regard to Capital Employed.

35. Capital employed should be determined considering present value of fixed assets, or at the least gross value of fixed assets. in any case, adoption of net fixed assets is highly inappropriate and. in fact. unfair to the domestic industry, considering that some of the investments are significantly old and therefore net fixed assets does not represent true value of investments. In fact, the most appropriate value for the purpose is present value of the investments.

L. Period for which Anti dumping is imposed is not relevant

36. As already submitted by the petitioner that anti dumping duty is required to be imposed so long as the investigation shows that the cessation of such duty is likely to lead to continuation or recurrence of dumping and injury. The Act and the Rules do not prescribe any time limit beyond which the anti dumping duty should not be extended. Section 9A(5) clearly provides that the antidumping duty imposed 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 cessation of such duty is likely to lead to continuation or recurrence of dumping and injury, in which case,the Central Govt. may, from time to time extend the period of such imposition for a further period of five years. Thus, the legal provision clearly is that the anti dumping duty can be extended further from time to time. if it is found that dumping and consequent injury to the domestic industry is likely in the event of cessation of anti dumping duty. Further, there is no requirement under the law that it should be a “special” case as argued by the other interested parties in view of Final Finding concerning Dry Cell Batteries from China PR (Case No. 15/2/2011-DGAD & Final Findings dated 20th May 2013), which is not applicable in the facts and circumstances of the present case.

Illustrative list of cases where Anti-dumping duties have been extended by India beyond 15 years

SNProductCountryDuty sinceTime period
 YearDays
1Acrylic Fibre (Still in force)Thailand & Korea3/31/19972182
2Vitamin C (Still in force)China3/11/19982087
3Vitamin E (Still in Force)China12/2/20031514
4Sodium Nitrite (Still in force)China4/6/2001880
5Nylon Tyre Cord Fabric (NTCF) (Still in force)China6/30/20041456
6Narrow Woven Fabrics (Still in force)China Taiwan6/9/20041462

Illustrative list of cases where Anti-dumping duties have been extended by global authorities even beyond 20-30 years

86. Table below shows statement of cases wherein USA has imposed Anti dumping duty pursuant to third sunset reviews also. It would be seen that Anti-dumping duties have been in operation in USA for much longer period.

SNProductCountryDuty sinceTime period
 YearDays
1Stainless Steel BarIndia2/21/19952392
2Sulfanitic AcidIndia3/2/19933590
3Pressure Sensitive Plastic TapeItaly10/21/19774127
4Prestressed Concrete Steel WireJapan12/8/19784014
5Silico manganeseUkraine10/31/19942424
6Circular Welded Non-alloy steel PipeKorea11/2/19922623
7Circular Welded Non-alloy steel PipeMexico11/2/19922623
8Clad Steel PlateJapan7/2/19962256
9Crawfish Tail MeatChina9/15/19922636
10Freesh GarlicChina11/16/19942419
11Furfuryl AlcoholChina6/21/19952360
12GlycineChina3/29/19952383
13Granular Polytetrafluoro ethylene ResinItaly8/30/19883041
14Gray Portland Cement & ClinkerJapan5/10/19912772
15Hammers & SledgesChina2/19/19912793
16Helical Spring Lock WasherChina10/19/19932527
17Helical Spring Lock WasherTaiwan6/28/19932558
18Potassium PermanganateChina1/31/19843499
19Petroleum Wax CandlesChina8/28/198563242
20Porcelain-on- steel Cooking WareChina12/2/19863215
21Iron Construction CastingCanada3/5/19863290
22Iron Construction CastingChina5/9/19863272
23Light-walled Rectangular PipeTaiwan3/27/19892984
24Paper ClipsChina11/25/19942417
25PastaItaly7/24/19962250

87. Canada has extended anti-dumping duties in following cases. It would be seen that some of these duties are in force for the past 20-25 years.

SnProductCountryDuty sinceTime period
 YearDays
1Hot Rolled SteelChina27/10/19972114
2BicycleTaiwan12/11/19922612
3Whole potatoesUSA12/10/19972112
4Refined SugarUSA11/6/19952322

88. Similarly Brazil has also extended anti-dumping duties in following cases beyond 15 years.

SnProductCountryDuty sinceTime period
 YearDay
1Sacks and bags of juteBangladesh2/10/19922696
2Coated cardboardChina31/10/20011726
3Garlic, fresh or refrigeratedChina18/1/1196232
4Permanent magnets ferrite rings and discsChina8/6/19982047
5Vacuum flasksChina21/7/19991951
6PhenolEU16/10/20021627
7Sacks and bags of juteIndia2/10/19922696
8PhenolUSA16/10/20021627
9Polyvinyl chloride resinsUSA30/12/1992267
10Ethylene GlycolUSA11/10/20041420

89. It is further submitted that Domestic industry is vulnerable to injury from dumped imports at present. Current levels of import volumes and dumping margins from the subject country clearly shows that expiry of duty will result in intensified dumping of subject goods from the subject country. As earlier requested Authority should also consider followings

a. Limited production of the product globally : As earlier submitted petitioner again requests the Authority to consider that the production of product under consideration is quite limited globally. As, about 86% of global production is in India and China only and out of which 62% of the production is in China alone, while India commands the remaining 24%. Thus, any sickness in this industry would |eave the global demand only at the mercy and monopoly of the Chinese producers.

b. Large scale production suspension in India: As already submitted petitioner again requests the Authority to consider the fact that due to the adverse effect of the insufficient form of duty there were large scale production suspension in the country which was primarily in the last two decades (all these closures are more than 5 years old and are prior to previous extension of ADD),

c. Paracetamol formulation prices are covered under DPCO and NPPA therefore no adverse effect on the consumers The NPPA regulates the prices of Paracetamol formulation and therefore even Iife the product under consideration is not a formulation, considering that the cost of the product under consideration forms majority of the cost of Paracetamol formulation, there is an automatic; check on the prices at which the producers of the product under consideration can sell the product in the market. The Authority further notes that Paracetamol.is listed under National List of Essential Medicines and it is one of the cheapest pain killer being most widely used in the Country. Thus, while the price of both formulation and bulk drug are capped, the producers of Paracetamol have been selling the product at a price listed to regulated product.

d. Paracetamol is not a high cost medicine and therefore in any case there should be no concern with regard to possible adverse impact of the ADD on the consumers. In any case, impact of present ADD on the consumer is miniscule.

e. While the ADD has been in force for more than 15 years, the domestic industry was effectively protected only for last five years, which period has seen significant growth in the Country and the domestic industry requires protection for at least another five years, after which the domestic industry is expected to be fully viable

M. Prayer

37. In the light of the contentions raised. information provided and submissions advanced, the Authority may be pleased to conclude that

i Dumping has continued despite imposition of ADD

ii Dumping is likely to intensity in the event of cessation of ADD.

iii injury to the domestic industry is likely to recur in the event of cessation of ADD.

iv Recommend extension of anti-dumping duties already imposed on the imports of the subject goods originating in or exported from China PR.

v Fixed form of anti-dumping duty is required to be imposed for a further period of five years expressed in US/MT.

Submitted please,

(A.K. Gupta) For the Domestic Industry

(xxi) On 29.01.2019, respondent No.2 issued impugned Final Findings vide Notification F. No. 7/16/2018-DGAD whereby it has decided to discontinue the Anti-Dumping Duty rejecting/ignoring all the submissions on behalf of the petitioners. The relevant extract from the Final Findings set out hereinbelow.

C. LIKE ARTICLE

C.1 Submissions by the Domestic industry

15. The domestic industry has claimed that there is no known difference in subject goods exported from subject country and that produced by the Indian industry. Both the products have comparable characteristics in terms of parameters such as physical & chemical characteristics, manufacturing process & technology, functions & uses, product specifications and tariff classification etc.

C.2 Submissions by the exporters/importers/other interested parties

16. None of the interested patties have disputed the claims made by the domestic industry in this regard.

C.3 Examination by Authority

17. The Authority notes from the information available on record that the product under consideration produced by the Domestic Industry is like article to the goods imported from the subject country. Product under consideration produced by the Domestic Industry and imported from the subject country are comparable in terms of physical characteristics, manufacturing process & technology, functions & uses, product specifications and tariff classification of the goods. It is further noted that the Designated Authority had examined the issue of product under consideration and like article in the previous investigations, which mutatis mutandis is relied upon in the present review investigation. The goods produced by the Domestic Industry and imported from the subject country are like articles in terms of the Rule 2(d) of the Anti-Dumping Rules. The two are technically and commercially substitutable. The consumers are using the two interchangeably.

E. ISSUES RELATING TO CONFIDENTIALLY

E.1 Submissions by the Domestic industry

24. The domestic industry has made the following submissions:-

i. The exporter/producers have made unnecessary claims as to confidentially or provided incomplete information thereby handicapping the domestic industry in making meaningful comments with regard to the responses filed. The responses me not properly indexed or summarized.

ii. Information provided in non-confidential version is beyond understanding. The NCV does not provide clear understanding of the data and the domestic industry is unable to provide detailed comments on that for the same reason.

iii. Non – confidential version of the questionnaire responses is grossly inadequate incomplete. The concerned interested party has not disclosed all such information that they are obligated to disclose under the Rules and practice being followed by the Designated Authority in this regard.

E.2 Submissions by the exporters/importers/other interested parties

25. The exporters/importers/other interested parties have made the following submissions:

a. The petitioners have claimed excessive confidentiality without providing any legitimate reasons in violation of Rule 7 of the Customs and Tariffs Rules, 1995. The Petitioners ave not disclosed the following information in their petition:-

b. Soft Copy in excel file of transaction-wise and sorted import data, raw/original import data and list of excluded transactions from DGCI&S has not been provided.

c. The import data has not been provided for the whole POI and has been provided only for the 9 months.

d. The item-wise details of constructed normal value have been kept as confidential,

e. Company-wise production details of the petitioners, supporting producers and the domestic producers have been kept as confidential.

f. The annual repent of the companies for the P01 and the previous three years have not been provided. The domestic industry has simply stated that the same may be seen from the website of the petitioners. However, it may be seen that there are no annual reports available on the website of the petitioners.

g. In the application, it has been mentioned that Sri Krishna Pharmaceuticals Ltd. has imported the subject goods. However,the reasons have not been provided by the domestic industry.

h. The domestic industry has claimed adjustment from export price for ocean freight, marine insurance, port expenses, bank charges, inland transportation, commission and VAT adjustment. However, no evidence with regard to the aforesaid adjustments claimed have been provided by the domestic industry

i. Profit/loss and ROCE in percentage terms have been kept confidential,

j. The Hon’ble Authority may kindly direct the petitioners to disclose and provide the aforesaid information so as to enable the exporters/producers for making effective comments in this investigation..

E.3 Examination by the Authority

26. With regard to confidentiality of information, Rule 7 of Anti-dumping Rules provides as follows:

“7. Confidential informations:-

(1) Notwithstanding anything contained in sub rules (2), (3) and (7) of rule 6, sub-rule (2) of 12, sub-rule (4) of rule 15 and sub-rule (4) of rule 17, the copies of applications received under sub-rule (1) of rule 5, or any other information provided to the designated authority on a confidential basis by any party in the course of investigation, shall, upon the designated authority being satisfied as to its confidentiality, be treated as such by it and no such information shall be disclosed to any other party without specific authorization of the party providing such information.

(2) The designated authority may require the parties providing information on confidential basis to furnish non-confidential summary thereof and If in the opinion of a party providing such information, such information is not susceptible of summary, such party may submit to the designated authority a statement of reasons why summarization is not possible.

(3) Notwithstanding anything contained in sub-rule (2), if the designated authority is satisfied that the request for confidentiality is not warranted or the supplier of the information is either unwilling to make the information public or to authorize its disclosure in a generalized or summary form, it may disregard such information.

27. Submissions made by the interested parties with regard to confidentiality and considered relevant by the Authority are examined and addressed accordingly. Information provided by the interested parties on confidential basis was examined with regard to the need for treating them as confidential. On being satisfied, the Authority has accepted the confidentiality claims of all the patties and accordingly not disclosed such information to other interested patties. Wherever possible, patties providing information on confidential basis were directed to provide non-confidential summary of the information filed on confidential basis. The Authority made available the non-confidential version of the evidence submitted by various interested parties in the form of public file.

G. NORMAL VALUE EXPORT PRICE AND DETERMINATION OF DUMPING MARGIN

39. The Authority sent questionnaire to known exporters from subject country, advising them to provide information in the form and manner prescribed. The following producers and exporters front the subject country tiled the questionnaire response:

i. M/s Anqiu Lu An Pharmaceutical Co., Ltd.

ii. M/s A.H.A lntemational Co., Ltd.

iii China Sinophamt International Corporation

iv. Zhejiang Chemicals Import and Export Corporation.

v. Lianyungang Kangle Pharmaceutical Co., Ltd.

vi. Zhejiang Kangle Pharmaceutical Co., Ltd.

vii. Hebei Jiheng (group) Pharmaceutical Co. Ltd.

40. According to Section 9A (1) (c) of the Customs Tariff Act, 1975 ‘Normal Value’ in relation to an article means:-

“comparable price, in the ordinary course of trade. for the like article when meant for consumption in the exporting county or territory as determined in accordance with the rules made under sub-section (6); or

when there are no sales of the like article in the ordinary course 0ftrade in the domestic market of the exporting country or territory, or when because of the particular market situation or low volume of the sales in the domestic market of the exporting country or territory such sales do not permit a proper comparison. the normal value shall be either-

(a) comparable representative price of the like article when exported from the exporting country or territory or an appropriate third country as determined in accordance with the rules made under sub-section (6); or

The cost of production 0f the said article in the country of origin along with reasonable addition for administrative, selling and general costs, and for profits, as determined in accordance with the rules made under sub-section (6)-:

Provided that in the case of import of the article from a country other than the country of origin and where the article has been merely transhipped through the country of export or such article is not produced in the country of export or there is no comparable price in the country of export, the normal value shall be determined with reference to its price in the country of origin.

G.1 Views of the Domestic industry

41. The following are the submissions made by the domestic industry, during the course of present investigation and considered relevant by the Authority:-

i China needs to be treated as non-market economy for the reason that the costs and prices in China do not reasonably reheat the market forces. Para 8 to Annexure-I specifies the parameters which should be considered for grant of market economy status. This also implies that unless these conditions are not fulfilled/satisfied, the Chinese costs and prices cannot be adopted.

ii. Chinese producers are required to be treated as companies operating under non-market economy environment and the Authority may proceed to determine the normal value on the basis of Para 7 of Annexure-I.

iii. The imports are entering the Indian market at dumped prices.

iv. There is difference in prices in different import transactions which mean that Chinese producers are selling very same product at a price which differs significantly even at the same time period and is not a peculiar phenomenon of POI, but extends to the entire injury period,

v. It is a fit case where weighted average normal value cannot be compared wit weighted average export price. The Designated Authority is, therefore, requested to compute the weighted average normal value and compare the same with individual export price and in all those import transactions where the dumping margin is negative, the same are required to be excluded for determination of dumping margin.

vi. There can be no plausible reason/justification for such significant difference in the prices in respect of imports being reported at the same time.

G.2 Views of the interested parties

42. The submissions made by the producers/exporters/importers/other interested parties are as follows:-

i. Determination of the normal value for subject country in the current investigation as computed by the domestic industry is not in accordance with the legal provisions and therefore, the determination of dumping margin in the current investigation by the petitioners is flawed.

ii. Normal value for the companies in China PR in the current investigation may please be determined on the basis of their domestic sales and the cost of the subject goods.

iii. It is in view of the fact that the period of 15 years for disregarding the domestic prices or costs of Chinese producers not being on market economy conditions as provided in para 15(a) (ii) of the Protocol of Accession of the People’s Republic of China to WTO, has expired on 11th December 2016 in terms of para 15 (d) and has become non-operational.

iv. At present, no provisions which enable the Hon’ble Authority for considering Chinese producers as operating on non-market economy principles for disregarding their domestic prices and costs and the normal value for China may be determined on the basis of their domestic prices and cost of the subject goods.

v. Any other methodology used for the determination of normal value for Chines exporters would be in violation of the obligations of India under the WTO.

vi. Without prejudice to above submission it is submitted that determination of normal value for Chinese exporters on the basis of their records without following any additional procedure, domestic industry has arbitrarily determined the normal value for Chinese exporters without following the due procedure as laid down under the Indian Anti-dumping Rules.

vii. The constructed normal value proposed by the domestic industry is based on the cost of production in India and considering the rate of profit at 5%. However, the item-wise cost details of the constructed normal value have not been provided.

viii. The methodology of relying upon the Indian costs and prices is to be followed only when it was not possible to construct the normal value on the basis of other alternatives prescribed in the opening sentence of Para 7.

ix. In terms of the provisions of Para 7, the market economy third country is required to be first identified for determination of normal value and only where it is not possible to obtain necessary data from such third country, the normal value can be determined on any other reasonable basis, including the price actually paid or payable in India for the like product, duly adjusted if necessary, to include a reasonable profit margin.

x. The domestic industry is under obligation to inform, without reasonable delay the selection of market economy third country to the parties concerned so as to provide an opportunity to respond to the same.

xi. Mandatory procedure prescribed by the law has not been followed, as the interested parties have not been put to notice about selection of the third country. Nor have the interested parties been requested to suggest and make necessary information available about the third country.

xii. In the absence of following the mandatory procedure, the present proceeding cannot continue in view of the decision of the Hon’ble Supreme Court in the case of Shenyang Matsushita 2005 (181) ELT 320 (SC) = 2005-TIOL-35-SC-AD-LB.

xiii. The failure to follow the mandatory procedure of Para 7 has substantive implications on the determination of the normal value and resultantly the dumping margin.

xiv. Therefore, the Hon’ble Authority is requested to follow the procedure prescribed in Para 7 of the Annexure I in the current investigation.

G.3 Examination by the Authority

a. Normal Value in China

43. Upon initiation, the Authority advised the producers/exporters in China to respond to the notice of initiation and provide information relevant to determination of normal value. The Authority sent copies of the Supplementary questionnaire to all the known producers/exporters for rebutting presumption of nonmarket economy in accordance with criteria laid down in Para 8(3) of Annexure-I to the AD Rules. The Authority also requested Government of China to advise the producers/exporters in their country to provide the relevant information. However, none of the Chinese producers filed any response to the Supplementary questionnaire issued by the Authority.

44. Accordingly, the normal value and export price for all the producers/exporters from the subject country have been determined as below:

b. Determination of Normal Value for producers and exporters in China PR

45. As none of the producers from China PR have filed the Supplementary Questionnaire response, the normal value has been determined in accordance with Para 7 of Annexure I of Anti-Dumping Rules. In the absence of sufficient information on record regarding the other methods as are enshrined in Para 7 of Annexure I of the AD rules, the Authority has determined the normal value by adopting the method “any other reasonable basis”.

46. The Authority has, therefore, constructed the normal value for China PR on the basis of cost of production in India, duly adjusted, including selling, general and administrative expenses Accordingly, the constructed normal value for Chinese exporters is determined Rs. ***** per Kg.

c. Determination of export price of China PR

47. The Authority notes that exporters mentioned below from China PR have furnished information to the Authority, which was used for determination of export price and individual dumping margin.

i. M/s Anqiu Lu An Pharmaceutical Co., Ltd.

ii. M/s A.H.A international Co., Ltd.

iii. China Sinopharm international Corporation

iv. Zhejiang Chemicals Import and Export Corporation

v. Lianyungang Kangle Pharmaceutical Co., Ltd.

vi. Zhejiang Kanglc Pharmaceutical Co., Ltd.

vii. Hebei Jiheng (group) Pharmaceutical Co. Ltd.

In view of the responses filed, the Authority has analysed the response made by the producers/exporters as follows:

M/s Anqiu Lu An Pharmaceutical Co. Ltd. (Producer) and M/s A.H.A International Co. Ltd. China Sinopharm International Corporation and Zhejiang Chemicals Import and Export Corporation

48. The Authority notes that M/s Anqiu Lu An Pharmaceutical Co., Ltd. has exported *** MT of the subject goods directly to India and *** MT through it traders M/s A.H.A International Co., Ltd., China Sinopharm International Corporation and Zhejiang Chemicals Import and Export Corporation. The Authority notes that whereas Anqiu Lu An Pharmaceutical Co has reported an export price of US$ ***/MT and A.H.A international Co., Ltd., China Sinopharm International Corporation and Zhejiang Chemicals Import and Export Corporation have reported net export price of US$ ***, US$ ***/MT and US$***/MT respectively.

49. The producers-exporters have claimed price adjustments on account of inland freight, ocean freight, and marine insurance, credit cost, port expenses and VAT. Ex-factory export price has been determined for each producer/exporter. Weighted average export price of the said producer and its respective traders have thereafter been determined as US$ ***/MT considering the total volume of exports made by the said exporter.

M/s Lianyungang Kangle Pharmaceutical Co., Ltd. (produder) and M/s Zhejiang Kangle Pharmaceutical Co., Ltd.

50. The Authority notes that M/s Lianyungang Kangle Pharmaceutical Co. has exported *** MT through its trader namely M/s Zhejiang Kangle Phannaceutical Co., Ltd. They have claimed price adjustments on account of inland freight, ocean freight, marine insurance, credit cost, port expenses and VAT. After adjustment of the expenses claimed by the producer/trader, the authority has determined the ex-factory export price as US$ *** /MT.

M/s Hebei Jiheng (group) Pharmaceutical Co. Ltd.. producer

51. The Authority notes that M/s Hebei Jiheng (group) Pharmaceutical Co. Ltd have exported *** MT directly to India. The exporters have claimed price adjustments on account of inland freight, ocean freight, marine insurance, credit cost, port expenses and VAT. After adjustment of the expenses claimed by the producer/trader accordingly, the authority has determined the ex factory export price as **** USS/MT.

d. Determination of Dumping Margin

The dumping margin during the POI for all exporters/producers from the subject country has been determined as provided in the table below:

Name of company (producer) (POI)Name of the Company (Exporter)CNV US$/MTNEP US$/MTDumping margin US$/MTDM %Range
M/s. Anqiu Lu An Pharmaceutical Co. Ltd.M/s. A. H. A. International Co., Ltd. ———- China Sinopharm International Corporation ———– Zhejiang Chemicals Import and Export Corporation************0-10
Lianyungang Kangle Pharmaceutical Co., Ltd.Zhejiang Kangle Pharmaceutical Co. Ltd.************0-(10)
Hebei Jiheng (group) pharmaceutical Co. Ltd. ************10-20

e. Determination of Dumping Margin for China PR as a whole.

a) Comparing the normal value and export price at exfactory level for the country as a whole, the dumping margin for the subject country is determined as below:

Particulars US$/Kg-Rs./Kg. (POI)US$/KgRs./Kg
Normal Value******
Net Export Price******
Dumping Margin******
Dumping Margin %******
Range%10-2010-20

b) After detailed analysis of DGCIS transaction wise date it has been observed that our of total imports of China PR i.e. ***MT ***% imports are dumped and ***% are injurious.

Para H. INJURY DETERMINATION AND EXAMINATION OF INJURY AND CASUAL LINK

(II) Volume Effect of Dumped Imports and impact on Domestic Industry:

Import volume and Market Share.

62. With regard to volume of the dumped imports, the Authority is required to consider whether there has been a significant increase in dumped import either in absolute terms or relative to production or consumption in India. The table below summarizes the factual position with regard to import volumes and market share-:

ParticularsUnites2014-152015-162016-17POI
ChinaMT4,3561,93022052,969
Other CountriesMT791153065
Total importsMT4,4342,04522353034
Market Share in Demand     
Sale of Domestic Industry%************
Sale of other Indian Producers%************
Import from subject country%9%3.8%4.44%5.84 %
Import from other countries%0.16%0.22%0.06%0.11 %
Total Demand%100100100100

63. It is seen that the import volume declined till 2015-16 and increased thereafter. Also, the market share in demand of the domestic industry has remained more or less constant.

70. Production, sales, capacity & capacity utilization details are as follows:-

ParticularsUnit2014-152015-162016-17POI
CapacityMT************
TrendIndexed100100100100
ProductionMT************
TrendIndexed100103111126
Capacity Utilization%************
TrendIndexed100103111126
Domestic Sales for PUCMT************
TrendIndexed100113116117

From the above information, the Authority notes the following:-

a) Capacity of the domestic industry has remained constant over the period.

b) The production, sales and capacity utilization of the Domestic Industry has increased over the injury period.

b) Demand

DemandUnit2014-152015-162016-17POI
Sales of Domestic IndustryMT************
Indexed 100104108108
Sales of Other Indian ProducersMT************
Indexed 100114108110
Imports from     
ChinaMT4,3561,9302205296 9
OthersMT791153065
Total DemandMT48,25150,29549,60350,770

71. From the above information it is noted that

i) Sales of DI and other Indian producers have increased from the base year.

ii) Imports from China PR and others countries have declined from the base year despite increase in total demand during the same period.

c) Market Share in Demand

72. The details of market share of the Domestic Industry in demand are given in table below.

ParticularsUnit2014- 152015 -162016- 17POI
Sales of Domestic Industry%************
Sale of other Indian Producers%************
Import from subject country%9%3.8%4.44%5.84%
Import from other countries%0.16%0.22 %0.06%0.11%
Total Demand%100100100100

73. It is seen that the market share of Domestic Industry has marginally increased over the injury period.

a. Probability, return on investment and cash profits

74. Performance of the Domestic Industry with regard to profits, return on investment and cash flow is as follows:-

ParticularsUnit2014- 152015 -162016- 17POI
Sales of Domestic Industry%************
Sale of other Indian Producers%************
Import from subject country%9%3.8%4.44%5.84%
Import from other countries%0.16%0.22 %0.06%0.11%
Total Demand%100100100100

Para J.

82.

J.1 Submissions by the Domestic Industry

82. Following are the submissions made by the Domestic Industry with regard to likelihood of continuation of dumping and consequent recurrence of injuryi-

A perusal of Article 11.1 of AD Agreement and Section 9A (5) of the Customs Tariff Act, clearly suggests that the main intent behind the legislation of Sunset Review investigation is to examine:-

a) Whether the dumping continued and if so, whether it is likely to continue;

b) In case where dumping did not continue, whether the dumping would recur in the event of revocation of antidumping duties;

c) Whether the Domestic Industry continued to suffer injury; and if so, whether injury to the domestic industry is likely to continue;

(d) In case where the Domestic Industry has not suffered continued injury, whether injury to the Domestic Industry is likely to recur in the event of revocation of antidumping duties.

ii. The original investigation and the subsequent Sunset Review investigations also established the existence of significant dumping. The dumping margin in the previous as well as the first SSR was quite high.

iii. There is a long history of dumping of subject goods from China in domestic market as well as in other countries such as South Africa and Indonesia.

iv. The continued dumping was only reduced after the last concluded sunset review investigation. Prior to that, the domestic industry was suffering continued injury on account of significant dumped imports, as stated by the Authority in the final findings earlier notified in the review cases.

v. The significant level of these imports only started declining since 2015-16. However, it is pertinent to note that the domestic industry is still healing from the past injurious effects of dumping and thus is in a vulnerable state. Cessation of anti-dumping duties is likely to cause intensified injury to the domestic industry.

vi. It would appear that the domestic industry has enjoyed anti-dumping duty protection for the last 15 years, the fact is that the domestic industry has been effectively protected for only last the years. The Chinese producers continued dumping and the same caused injury to the domestic industry for one decade, despite the ADD being in force.

vii. The change in the form of duty from benchmark to fixed quantum has led to reduction in imports. Cessation of anti-dumping duty is likely to increase the imports as significant surplus capacities are available with the producers. The decline in the imports is because of existence of ADD.

viii. Due to continuous dumping, several plants producing the PRODUCT UNDER CONSIDERATION have been closed down in the country namely:

M/s Triton Labratories Ltd.

M/s Vamsi Labs Ltd.

M/s Srinivasa Agro Industries & Drugs Ltd.

M/s Pan Drug

M/s Alpha Drug

M/s Glaxosmithkline Pharmaceuticals Ltd.

M/s Thexa Pharma Pvt. Ltd.

M/s Vani Pharma Labs Ltd.

Rohini Chemical

Fortune Chemical

Dinesh Pharmaceutical

Dr. Jain’s Company

Saboo Medichem

ix. The production of product under consideration is quite limited globally. About 86% of global production is in India and China. 62% of the production is in China alone, while India commands 24%. Thus, any sickness in this industry would leave the global demand at the mercy of the Chinese producers.

x. The questionnaire responses filed by the exporters, establish that there is import of subject goods from subject country at dumped price.

xi. The domestic industry in the present scenario is still reeling from the adverse effects of the dumping and has shown marginal growth in terms of its economic parameters. The same growth would be reversed if the Anti dumping duty is ceased by the Authority.

xii. The only reason the domestic industry has not suffered further deterioration in its performance is that the volume of imports was low due to the duties in force. However, the producers in the subject country have significant` idle capacities, which are sufficient to meet the entire demand in India. In the event of cessation of duty, the exports are likely to utilize these unutilized capacities and flood the Indian market.

xiii. The foreign producers are export oriented. in as much as their capacities are far more than the domestic demand in the subject country. The production of the subject goods in subject country is in the range of l lac MT, as against 2.21 lac MT capacities; whereas the domestic demand for the product in China is far lower nearly 20,000 MT. This clearly shows that the exporters have built up capacities in excess of the demand in the subject country out of 1 lac MT production, about 80% are meant for exports.

xiv. The exporters have not only been dumping in India, but also in other countries. Further, the prices at which the goods have been supplied to these countries are lower than the non-injurious price. It is therefore, reasonable to conclude that the exporters are likely to sell at dumped and injurious prices in India as well in case the duty is revoked.

xv. The export price from subject country to various countries globally are far lower than the export price to India in respect of significant proportion of exports from subject country to various countries globally. The dumping margin and injury margin in these third countries exports are higher than the dumping margin and injury margin in respect of exports to India.

xvi. Since India is a more price attractive market as compared to third countries, the exporters would prefer to divert their goods from other countries to India in case of revocation of duty, in order to increase their profits and capture the market. Considering that the exporters have no commitments in these third country markets and the sole criteria for them to price their product is price received by them.

xvii. Decline in imports post imposition of duty and positive dumping margin in such imports implies likelihood of dumping in the event of withdrawal of duty and in itself justifies extension of anti-dumping duty.

J.2 Submission of exporters

83. There is no likelihood of recurrence of injury as per Article 9A (5) of the Customs and Tariffs Act.

i. The petitioners have not given the details of excessive capacity available with the Chinese producers and their likelihood of being exported to India, the petitioners have failed to make out a case of likelihood of dumping.

ii. This clearly indicates that there is no likelihood of injury to the domestic industry in the current investigation and the present investigation deserves termination.

J.3 Examination by the Authority

84. The Authority examined the likelihood of continuation or recurrence of injury considering the parameters relating to the threat of material injury in terms of Annexure II (vii) of the Anti-dumping Rules. The domestic industry has submitted the details of exports of China to third countries as per China customs which shows that ***% volume of exports to third countries are at a price lower than price at which China exports to India and ***% of the volume of exports to third countries are at a price above than price at which China exports to India.

85. The Authority has taken into consideration the submissions made by the domestic industry and the evidence presented in support of their submissions. The Authority has examined the likelihood of continuation or recurrence of injury under following heads:

a. A significant rate of increase importation; 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 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.

86. A significant rate of increase of dumped imports into India indicating the likelihood of Substantially increased importation.

ParticularsUnits2014-152015-162016-17POI
ChinaMT4356193022052969
OthersMT791153065
Total ImportsMT4434204522353034

* April 17 to March 18

87. The Authority notes that there was a consistent decline in the volume of imports compared to base year.

88. An analysis of transaction wise date of the cooperative producers with their respective exporters so as to arrive at dumped and injurious imports of the cooperative producer of the present investigation is as follows:-

a) M/s Anqiu Lu An Pharmaceutical Co., Ltd.

The total exports to India by the said producer with trade of the subject goods are *** MT out which *** MT are dumped imports and *** MT are injurious imports.

b) M/s Lianyungang Kangle Pharmaceutical Co. Ltd.

Total exports to India by the said producer of the subject goods through its exporters is *** MT out which dumped imports constitute *** MT. No injurious imports were found for the said producer through its exporter.

c) M/s Hebei Jiheng (group) Pharmaceutical Co. Ltd.

Total exports to India by the said producer with trader of the subject goods is *** MT. All imports of the said producer are dumped and ***MT are injurious.

(b) Sufficient freely disposable, or an imminent, substantial increase in, capacity of the exporter indicating the likelihood of substantially increased dumped exports to Indian markets, taking into account the availability of other export markets to absorb any additional exports.

89. The Authority evaluated the existing surplus capacities, capacity addition, if any, with the responding exporters, possibility of trade diversion from third countries to India, freely disposable production capacities with the responding exporters. The analysis shows as follows:

a. Capacity, production, surplus capacities, exports to India and rest of the world volume of exports to India

Name of ProducerUnit sAnqiu Lu An Pharmaceutic al Co., Ltd.Lianyungka ng Kangle Pharmaceut ical Co., Ltd.Hebei Jiheng (group) Pharmace utical Co. Ltd.Tota l
CapacityMT************
Productio n (POI)MT************
Capacity utilization%************
Domestic Consumpt ionMT************
Exports to IndiaMT************
Exports to ROWMT************
Total ExportsMT************
% Exports OrientationRag ne%*********35- 45

b. After analysis of the capacities of the co-operative exporters, the Authority notes that the capacities of the following non-cooperative exporters/producers as per the date submitted by the petitioner and the information available in public domain.

S. No.Producers in ChinaCapacity (MT per annum)
1.Anhui BBCA Likang Pharmaceutical10,000
2.Changshu Huagang Pharmaceutical8000
3.Jiangsu World kindlyPharmaceutical10000
4.Wenzhou Pharmaceuticals factory6000
5.Jiangsu Guoheng Pharma Chemicals Co. Ltd.2,500
6.Runqui trading Co. Ltd.12,000
7.Shanghai Bailion Chemicals Co. Ltd.50,000
8.Lianoyuan City Banking Pharmaceutical500
9.Total capacity of non-co-operative entitites99,000
10.Total capacity of co-operative producers75,000
11.Total capacity of China PR174,000
12.Indian Demand51,069

c. However, it is observed from the analysis of the cooperating producers that the trading companies do not have their own production facilities and they quote the capacity of the producers on their websites.

d. Considering the capacity utilization and export orientation of the responding producers and evidence provided by the domestic industry, it is evident that there are surplus capacities in China and the Chinese producers are export oriented.

(C) Inventories of the article being investigated

90. The questionnaire response filed by the Chinese producer’s shows that level of inventories with the cooperative producers/exporters is quite significant.

ProducerUnits201520162017POI
M/s. Anqiu Lu An Pharmaceutical Co. Ltd.MT************
Lianyungang Kangle Pharmaceutical Co., LtdMT************
Hebei Jiheng (group) pharmaceutical Co. Ltd.MT************
TotalMT************

(D) Price attractiveness of Indian market

91. Analysis of the China PR Custom data with regard to export from China PR to the rest of the world indicate that with the revocation of ADD, the Indian prices would be attractive for the Chinese producers/exporters to increase their exports to India and the same can be deduced from the table given below:

CountryQuantity (Kg)Value (USD)Price USD/kg
India (IN)*********
Congo, DR*********
Cuba (CU)*********
Kenya (KE)*********
Mauritius (MU)*********
Indonesia (ID)*********
S. Africa (ZA)*********
Iraw (IQ)*********
Zambia (ZM)*********
Russia (RU)*********
Iran (IR)*********
Syrian (SY)*********
Benin (BJ)*********
Mozambique (MZ)*********
United Arab Emirates (AE)*********
Tanzania (TZ)*********
Lithuania (LT)*********
    

Source: China Custom

92. The Authority notes that ***% total volume of exports to third countries is at a price lower than the price at which China exports to India. Whereas ***% of the total exports are exported are above the price at which China exports the subject goods to India.

(E) Export Orientation of China PR

93. As per the data of China Customs and other evidence filed by the Domestic Industry, the Authority notes that the producers in China are oriented towards exports globally.

In the event of cessation of ADD, there is probability that the exporters/producers would resort to dumping of subject goods to India.

K. CAUSAL LINK AND NON ATTRIBUTION ANALYSIS OF OTHER KNOWN FACTORS

94. Having examined the existence of continued dumping, volume and mice effects of dumped imports on the prices of the Domestic Industry, other indicative parameters listed under the Indian Rules and Agreement on Anti- Dumping have been examined herein below by the Authority to see whether any other factor, other than the dumped imports could have contributed injury to the Domestic Industry.

(xxii) Being aggrieved, the petitioners have preferred this petition wherein on 13.03.2019, this Court has allowed the draft amendment.

(xxiii) On 11.04.2009, the Court directed the authority to extend the Anti-Dumping Duty for a period of one month.

(xxiv) On 16.04.2019, respondents issued Notification decided not to extend Anti- Dumping Duty.

(xxv) On 24.04.2019, this Court issued direction of extension of Anti Dumping Duty upto 24.06.2019.

(xxvi) On 25.04.2019, the petitioners moved an application being IA No.1 of 2019 for seeking quashing and setting aside the Notification No.19/2019-Customs (ADD) dated 16.04.2019 whereby Anti-Dumping Duty was ordered to be rescinded.

(xxvii) On 26.04.2019, this Court has passed the order as referred to hereinabove, in initial part of the order, suspending the impugned Notification dated 16.04.2019.

(xxviii) On 08.05.2019, the petitioners filed I.A. No.2 of 2019 in this matter.

(xxix) On 09.05.2019, this Court directed the respondents to comply with the aforesaid order and directed issuance of extension of Notification extending the Anti-Dumping Duty as referred to above in initial part of the order.

(xxx) On 10.06.2019, Respondents No.1 to 3 have issued Notification No.22/2019-Customs (ADD) extending the Anti-Dumping Duty upto 24.06.2019.

(xxxi) On 11.06.2019, the petitioners did not press I.A. No.2 of 2019.

(xxxii) On 20.06.2019, a final hearing was conducted and this Court has passed order for issuance of Notification for extension of Anti-Dumping Duty till 09.07.2019.

14. The Court is called-upon to examine the rival contentions of the parties, which needs to be examined in light of the aforesaid indisputable aspects set-out hereinabove. The position of law in respect of the remedies on final findings is now clear. The respondents have relied on the following decisions for their contentions that the alternative remedy in terms of Section 9C of the Act may persuade this Court in not interfering with the final findings.

1. Designated Authority Vs. Sandisk International Ltd, (2018) 13 SCC 402 = 2017-TIOL-78-SC-CUS – the Supreme Court set aside the judgment of Delhi High Court allowing a Writ Petition and held that the final findings of the designated authority cannot be challenged under Article 226 of the Constitution.

2. Jindal Poly Film Ltd. Vs. Designated Authority and others, (2018) (362) ELT 994 = 2018-TIOL-1970-HC-DEL-CUS.

3. Suncity Sheets Pvt. Ltd. Vs. Designated Authority, (2017) SCC Online Del. 9412 = 2017-TIOL-1553-HC-DEL-CUS.

4. Spacewood Furnishers Vs. Designated Authority and others, 2010 (112) Bom.L.R. 2045 = 2010-TIOL-246-HC-MUM-AD.

5. Shew Kumar Agarwal and others Vs. Union of India, (2002) 1 Callt. 588 HC.

The similar question has arisen before this Court in the case of M/s. Jindal Saw Limited Vs Ministry of Finance in Special Civil Application No.6896 of 2019, wherein on 21.06.2019 this Court has observed in para-9 as under:

9. ……The judgments cited at the bar are of Delhi High Court and there cannot be any dispute to the proposition that the final finding in fact is amounting to determination or review regarding the existence, degree and effect of any dumping in relation to import of any article and hence, it may not have to await the formal order by the Central Government of accepting the same and issuing notification based thereupon. The learned counsel for the petitioner resisted the submission qua alternative remedy by inviting court’s attention to the provision of Section-9C of the Act, which reads as under.

SECTION 9C. Appeal. – (1) An appeal against the order of determination or review thereof regarding the existence, degree and effect of any subsidy or dumping in relation to import of any article shall lie to the Customs, Excise and Service Tax Appellate Tribunal constituted under section 129 of the Customs Act, 1962 (52 of 1962) (hereinafter referred to as the Appellate Tribunal).

(1A) An appeal under sub-section (1) shall be accompanied by a fee of fifteen thousand rupees.

(1B) Every application made before the Appellate Tribunal,-

(a) in an appeal under sub-section (1), for grant of stay or for rectification of mistake or for any other purpose; or

(b) for restoration of an appeal or an application, shall be accompanied by a fee of five hundred rupees.

(2) Every appeal under this section shall be filed within ninety days of the date of order under appeal :

Provided that the Appellate Tribunal may entertain any appeal after the expiry of the said period of ninety days, if it is satisfied that the appellant was prevented by sufficient cause from filing the appeal in time.

(3) The Appellate Tribunal may, after giving the parties to the appeal, an opportunity of being heard, pass such orders thereon as it thinks fit, confirming, modifying or annulling the order appealed against.

(4) The provisions of sub-sections (1), (2), (5) and (6) of section 129C of the Customs Act, 1962 (52 of 1962) shall apply to the Appellate Tribunal in the discharge of its functions under this Act as they apply to it in the discharge of its functions under the Customs Act, 1962 (52 of 1962).

(5) Every appeal under sub-section (1) shall be heard by a Special Bench constituted by the President of the Appellate Tribunal for hearing such appeals and such Bench shall consist of the President and not less than two members and shall include one judicial member and one technical member.

The counsel for the petitioner contended that sub-Section-3 of Section-9C of the Act does not provide any express authority and power or jurisdiction in the tribunal to issue direction to the Union of India for issuing notification extending the anti dumping duty. In other words, sub- Section-3 of Section-9C provides that the appellate tribunal may pass such orders as it thinks fit confirming, modifying or annulling the order appealed as against in an eventuality like present where the challenge is to the final findings on sunset review which does not require any issuance of further notification, if the final findings are in negative then, the provision of Section-9C(3) does not envisaged any further positive direction to the Union of India or the Central Government for extending the anti dumping duty notification. 10. The learned counsel for the petitioner further submitted that Section-9C of the Act even if is said to be an alternative remedy, but the same cannot be an alternative remedy so efficacious as to relegate the petitioner in a given case to the tribunal. The efficacy of the remedy is required to be adjudged in the light of the circumstances of a matter. In the instant case, looking to the time factors and the authorities reluctance in issuing even the requisite notification for commencing the sunset review and the fact that the anti dumping duty extension was come to an end on 09.04.2018 and the impugned final findings were rendered on 01.04.2019 leaving only 7 to 8 days’ time for availing the remedy in itself would be an indication that the appellate remedy as sought to be canvassed under Section-9C cannot be said to be efficacious remedy.

11. This Court is of the view that the Court at this stage need not go into the aspect of the tribunal’s power to issue direction to the Central Government in exercise of the power u/s.9C(3) for extending the anti dumping duty notification. The vital facts and time-line of the instant case are itself sufficient to indicate that the remedy of appeal in a present case could not have been said to be an efficacious remedy so as to give sufficient opportunity to the petitioner for seeking appropriate relief after availing the opportunity of putting forward their case. The Tribunal’s jurisdiction is required to be viewed wherein there is no express indication and provision for enabling the tribunal to grant any interim relief of such nature and in light of the observation of the Supreme Court in case of Kumho Petrochemicals Company Ltd., (Supra) the hiatus created on account of non-issuance of the notification of extending anti dumping duty would be viewed as fatal and therefore, in order to provide full opportunity and for compliance with the principle of natural justice, the Court is under obligation to issue appropriate direction at times interim direction for preventing any irretrievable situation jeopardizing the entire matter without adjudication. If one looks at from this angle, then one will have no other alternative but to accept the submission of learned counsel for the petitioner that the alternative remedy of appeal u/s.9C of the Act at-least in facts of the present case cannot be said to be so efficacious as to dissuade this Court from entertaining the petition and relegating the parties to the appellate forum.

15. In the case of Designated Authority Vs. Sandisk International Limited reported in (2018) 3 SCC 402 = 2017-TIOL-78-SC-CUS, the Supreme Court has held and observed in para-6 as under:-

“6. Though we would not deem it appropriate to lay down any inflexible proposition of law that in no case the final findings of the Designated Authority can be subject to challenge under Article 226 of the Constitution of India, we are of the view that in the facts of the present case the High Court was not justified in exercising its jurisdiction and in setting aside the final findings of the Designated Authority.”

16. Thus, there is no inflexible proposition of law that in no case, the final findings of the Designated Authority can be subject to challenge under Article 226 of the Constitution of India. It is well settled principles of law that in a given case even if there is alternative remedy available, the High Court under Article 226 of the Constitution of India has power to issue necessary order.

17. In the case of Nirma Limited Vs. Union of India (supra), this Court has held and observed in paras-31, 31.5, 32, 32.11, 32.12, 33.7 and 33.8 as under:-

31. While considering the first contention regarding the designated authority having failed to disclose the essential facts as contemplated under rule 16 of the rules, before embarking upon a discussion as to whether there is any failure to disclose essential facts, it would first be necessary to understand the meaning of the expression “essential facts” as appearing in rule 16 of the rules. Rule 16 of the rules, which deals with disclosure statement, mandates that the designated authority shall, before giving its final findings, inform all interested parties of the essential facts under consideration which form the basis of its decision.

31.5 Thus, while Article 6.9 does not prescribe a particular form for the disclosure of the essential facts, it does require in all cases that the investigating authority disclose those facts in such a manner that an interested party can understand clearly what data the investigating authority has used, and how those data were used to determine the margin of dumping. The disclosure statement, therefore, contains the intermediate findings and conclusions of the designated authority on the essential facts which would form the basis for the decision whether or not to apply definitive measures and not final conclusions on whether or not definite measures are required to be applied. In the opinion of this court, as rightly submitted by the learned counsel for the petitioners, the disclosure statement should contain the conclusions of the designated authority on those essential facts which would form the basis for its decision as to whether or not to apply definitive measures and not its conclusions on the basis of those essential facts. The conclusions on the basis of the essential facts are to be recorded in the final findings, viz., whether or not on the basis of such facts definitive measures are required to be applied. The contention that the disclosure statement is in the nature of a draft order, therefore, does not merit acceptance, inasmuch as, a draft order would also contain conclusions on whether or not definitive measures are required to be applied.

32. The next question that arises for consideration is whether or not the essential facts have been disclosed in the disclosure statement.

32.11 Thus, the designated authority has taken into consideration the aforesaid factors while coming to the conclusion as to whether or not definitive measures are required to be applied. In this regard, it may be noted that the designated authority has not disclosed the details of dumping margin calculations to the petitioner, viz., the difference between the Export Price and Normal Value. The designated authority has not disclosed the basis for determining Normal Value and Export Price and has also not disclosed the methodology and computation. The designated authority has considered the value of Cost of Sales and Selling Price based on the data submitted by the domestic industry, but has not disclosed what data has been used by it while determining the price suppression and price depression effect. While determining the price undercutting, the value for Net Sales Realisation is calculated on the basis of data provided by the domestic industry but the actual figures and methodology are not disclosed. The non-injurious price for the post POI has not been disclosed while determining the Price Underselling and the computation of the NIP has not been furnished for the POI as well as the post POI. The designated authority has used the data supplied by the domestic industry while determining data relating to inventories but has failed to disclose the same. While determining profits and actual and potential on cash flow, the figures of profit, return on investments, BPIT etc. are worked out on the basis of the information submitted by the domestic industry, but not disclosed to the domestic industry. While determining magnitude of injury and injury margin, the designated authority has failed to disclose post POI NIP as well as methodology and calculation.

32.12 As can be seen from the findings recorded by the designated authority on various parameters relevant for the purpose of coming to the conclusion as to whether or not definitive measures are required to be applied, it has placed reliance on certain information for the purpose of arriving at its findings which are essential facts. All the information which are relied upon by the designated authority to the extent the same is not protected by rule 7 of the rules, was in the nature of necessary information which should have been disclosed to the interested parties to enable them to comment on the completeness and correctness of the facts that were being considered by the designated authority, and to provide additional information or correct the perceived errors and comment on or make arguments as to the proper interpretation of those facts. The entire body of facts essential to the determinations that must be made by the designated authority before it can decide whether to apply definitive measures are required to be disclosed to the interested parties. A perusal of the tabular form regarding the data which are reproduced in the disclosure statement reveals that at various places instead of the relevant data the table contains asterisks which would indicate that such information is confidential. While it is true that the such information being confidential in nature, cannot be disclosed in the disclosure statement itself, it appears to be the general practice to provide the same to the parties separately. However, in the facts of the present case, despite the fact that the information has been furnished by the domestic industry itself, the computation of the various factors referred to hereinabove, has not been furnished to the domestic industry. In the opinion of this court, it was incumbent upon the designated authority to furnish the relevant facts which have been used by it as the basis for arriving at its conclusion on the essential facts necessary for the purpose of arriving at a decision as to whether or not the definitive measures are required to be applied. Non-disclosure of the essential facts is, therefore, clearly in breach of the principles of natural justice.

33.7 Thus, though most of the factors which are required to be taken into consideration for the purpose of determination of injury, namely, increase in volume, increase in dumping, increase in margin of dumping and price undercutting are all positive and only price suppression and price depression are absent, the designated authority, instead of relying upon the said factors for the purpose of basing his decision as to whether or not to continue with the determinative measures,has placed reliance upon an irrelevant factor, viz., injury margin, which is not required to be taken into consideration while considering the likelihood aspect under clause (vii) of Annexure II to the rules. Clause (vii) of Annexure II to the rules provides for four factors which are required to be taken into consideration, viz.:

(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 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.

Out of the above four factors, the designated authority has taken into consideration the factors prescribed under subclauses (a) and (c). However, insofar as sub-clause (c) is concerned, the designated authority has placed reliance upon incorrect facts, namely, though the price undercutting is positive, it has considered the same to be negative and drawn its conclusions accordingly.

33.8 Insofar as the factors prescribed under sub-clauses (b) and (d) of clause (vii) of Annexure II to the rules are concerned, it, however, has been contended on behalf of the respondents that the designated authority has also considered those factors. In this regard, a perusal of the disclosure statement shows that while the designated authority has taken into consideration the above two factors, it is manifest that while doing so, it has taken into consideration incorrect facts, inasmuch as, instead of considering the capacity of production of the exporters indicating the likelihood of substantially increased dumped exports to Indian markets, as contemplated under subclause (b), it has taken into consideration the capacity of production of the domestic industry; and instead of taking into consideration the existence of inventories of the dumped imports that could meet any increase or future demand for the imports, has taken into consideration the inventories of the domestic industry. Evidently therefore, the designated authority has failed to follow the procedure laid down under clause (vii) of Annexure-II to the rules for the purpose of determination of threat of material injury in the manner prescribed thereunder.

17.1 In the case of Reliance Industries Limited Vs. Designated Authority (supra), the Supreme Court has held and observed in paras-41, 43, 44 and 45 as under:-

“41. The DA claimed confidentiality from the appellant about its finding on the data supplied by the appellant itself. In our opinion, there was nothing confidential in the mater, and hence reasons for not accepting the appellant’s version should have been stated in the order of the DA.

43. In our opinion, Rule 7 does not contemplate any right in the DA to claim confidentiality. Rule 7 specifically provides that the right of confidentiality is restricted to the party who has supplied the information, and that party has also to satisfy the DA that the matter is really confidential. Nowhere, in the rule has it been provided that the DA has the right to claim confidentiality, particularly regarding information which pertains to the party which has supplied the same. In the present case, the DA has failed to provide the detailed costing information to the appellant on the basis of which it computed NIP, even though the appellant was the sole producer of the product under consideration, in the country. In our opinion this was clearly illegal, and not contemplated by Rule 7.

44. In this connection, this Court in Sterlite Industries (India) Ltd. v. Designated Authority observed thus: (SCC pp.286-87, para 3)

“3. In our view, it is not necessary for us to go into the merits of this matter as we propose to send the matter back to CEGAT after laying down certain guidelines. From what has been argued before us, it appears that in pursuance of Rule 7 of the Customs Tariff (Identification, Assessment and Collection of Anti- Dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995, the Designated Authority is treating all material submitted to it as confidential merely on a party asking that it be treated confidential. In our view, that is not the purport of Rule 7. Under Rule 7, the Designated Authority has to be satisfied as to the confidentiality of that material. Even if the material is confidential the Designated Authority has to ask the parties providing information, on confidential basis, to furnish a non-confidential summary thereof. If such a statement is not being furnished then that party should submit to the Designated Authority a statement of reasons why summarisation is not possible. In any event, under Rule 7(3) the Designated Authority can come to the conclusion that confidentiality is not warranted and it may, in certain cases, disregard that information. It must be remembered that not making relevant material available to the other side affects the other side as they get handicapped in filing an effective appeal. Therefore, confidentiality under Rule 7 is not something which must be automatically assumed. Of course in such cases there is need for confidentiality as otherwsie trade competitors would obtain confidential information, which they cannot otherwise get. But whether information supplied is required to be kept confidential has to be considered on a case-to-case basis. It is for the Designated Authority to decide whether a particular material is required to be kept confidential. Even where confidentiality is required, it will always be open for the Appellate Authority, namely CEGAT to look into the relevant files.”

45. In our opinion, excessive and unwarranted claim of confidentiality defeats the right to appeal. In the absence of knowledge of the consequences, grounds, reasoning and methodology by which the DA has arrived at its decision and made its recommendation, the parties to the proceedings cannot effectively exercise their right to appeal either before the Tribunal or this Court. This is contrary to the view taken by the Constitution Bench of this Court in S. N. Mukherjee case.

17.2 In the case of Union of India Vs. Meghmani Organics Limited (supra), the Supreme Court has held and observed in paras-14, 15, 16 and 19 as under:-

14. Elaborating his points further, learned senior counsel for the Union of India submitted that the very opening sentence of above quoted para 43 lays down an incorrect proposition of law that Rule 7 does not permit the DA to claim confidentiality and that right to make such a claim is vested only in a party who has supplied the particular information. The use of the term ‘any party’ in the opening sentence of Rule 7(1) in place of the expression ‘interested party’, according to learned counsel, indicates that the DA may receive in course of his suo motu action certain confidential informations and in such a situation if he is satisfied that the confidentiality of such information needs to be protected and should not be disclosed to any other party without specific authorisation, the DA may be justified in his action whereby he himself claims confidentiality in appropriate cases without any party exercising the right of confidentiality. 15. To buttress his aforesaid stand learned senior counsel placed emphasis upon Articles 6.2 and 6.5 of GATT 1994. By placing reliance upon paragraph 23 of the judgment in the case of Commissioner of Customs, Bangalore v. G. M. Exports [6] he submitted that in the light of Article 51(c) of the Constitution of India, in a situation where India is a signatory to an international Treaty or Agreement and a statute is made to enforce a treaty obligation, then in case of any difference between the language of such statute and a corresponding provision of the Treaty, the statutory language should be interpreted in the same sense as the language of the Treaty. In abstract the proposition is salutary and needs no caveat. Articles 6.2 and 6.5 have already been extracted earlier. In essence, Rules 6 and 7 of the Rules ensure the obligations flowing from Articles 6.2, 6.4 and 6.5. While interested parties are entitled to have full opportunity to defend their interests, such opportunities need to be hedged by the need to maintain confidentiality. Informations other than confidential must be shown to all interested parties whenever practicable in terms of Article 6.4. Any information which is by nature confidential or which is provided on a confidential basis is required to be treated as confidential by the authorities but only on being satisfied by good cause shown for the confidentiality claimed. No doubt the opening clause of Article 6.5 covers any information which is by nature confidential but the examples indicated therein clearly reveal that such information is required to be kept confidential because if revealed it would give significant advantage to a competitor or would have significant adverse effect upon the person supplying the information or his resource person from whom he acquired the information. The submission that DA is entitled to presume such effects without any claim being made by the party supplying the information is, however, not acceptable for reasons more than one. The examples are clearly meant to be only a guiding factor for the DA who cannot by exercise of discretion presume confidentiality and thereby restrict the rights of the interested parties to see relevant informations that may be used by the DA for the investigation. The DA, being a statutory investigator, cannot assume for himself the role of a party for the purpose of Rule 7 and to claim as well as accept on information to be confidential. 16. The other reason is provision of appeal under Section 9C of the Act. The appeal provided is against the order of determination or review thereof regarding the existence, degree and effect of any subsidy or dumping in relation to import of any article. It is one thing to use confidential information for the purpose of investigation on account of statutory provisions and not communicating the same. It is quite another, not to maintain transparent records of reasons as to why claim of confidentiality made by any party has been accepted by the DA. Where appeal is provided, the appellate authority will definitely be entitled to look into the records including the confidential information as well as into the correctness of the decision for accepting a claim of confidentiality. The situation is similar to one under the administrative law where a policy may exempt the authority from requirement of communicating its reasons for an administrative decision/order affecting rights and interests of parties but certainly reasons must exist in the records so as to justify the reasonableness and fairness of the decision if it has adverse effects upon any party. Any court or tribunal exercising judicial review is entitled to call for the records to satisfy itself as to the existence of reasons in appropriate cases involving a challenge to such order. In case the DA is conceded power to gather informations from sources other than interested parties, he must not treat such information as confidential unless the party which has supplied the information makes a request to keep the information confidential. Even in such a situation where an uninterested party claims confidentiality in respect of information supplied, as per Rule 7, the DA has to take all necessary precautions to decide the genuineness of such claim. In appropriate cases he must ask for summary of the information and if that is also not possible, the reasons as to why it is not possible should be supplied for scrutiny. The reasons of confidentiality must be discernible on scrutiny of records by the appellate authority because of mandate of Rule 7(3) that if the claim of confidentiality is not worthy of acceptance, or the supplier of the information is unwilling to make the information public without any good reasons, the DA has to disregard such information.

19. Looking at the contents of Rule 7 and the facts and issues involved in Reliance Industries case, we agree with the submissions of Mr. Patil that fact situation in that case was entirely different and the Court was not examining the provisions of Rule 7 in any detail but made rather scathing observations against the DA because the DA claimed confidentiality not in respect of any information but in respect of its findings based upon information supplied by the same party who was aggrieved by non-supply of the findings. The observations in Reliance Industries case must be understood in the fact situation of that case in view of well established proposition of law that the ratio decidendi consists in the reasons formulated by the court for resolving an issue arising for determination and not in what may logically appear to flow from observations on non issues. Reference in this regard may be made to law enunciated on this point by a Constitution Bench, in paragraph 20 of the judgment in the case of Krishena Kumar v. Union of India & Ors. [7] In the given facts, the observations in paragraph 43 in the case of Reliance Industries are fully justified and do not require any review. We are in agreement that Rule 7 does not postulate that the DA can claim confidentiality and that too not in respect of any information supplied by a party but in respect of its reasons or findings derived from information supplied by the same very party.

17. Considering the matter on merits, it is required to be noted, at this stage, that the submissions advanced on behalf of the petitioners, which have been set out herein above, have hardly been refuted by the respondents in proper manner. The respondents by and large have contended that the authority has observed principles of natural justice and afforded all the informations to the petitioners and afforded full opportunity for rendering final findings. It is the main contention of the petitioners that the conclusion reached in final finding is diametrically opposed in the observations made in the Disclosure Statement as well as the observations made in earlier part of final finding and the respondents have not provided any information after the Disclosure Statement. Considering the rival contention and on perusal of the material placed on record, it appears that the respondents have sent email with a statement that the necessary required information is attached with email. Now, the receipt of the email by the petitioners is not denied only facts of the receipt of the annexures therewith has been denied by the petitioners. At this juncture, it is pertinent to note that the respondent has, first during its submissions, submitted that the information has been provided but no such fact has been narrated in the affidavit-in-reply. Even no such fact has been taken in the pleadings itself. It appears that such information was supplied before issuance of Disclosure Statement. However, the fact remains that no information whatsoever as sought for has been supplied after Disclosure Statement.

18. The petitioners have shown how there is diametrical conclusion reached in the Final Finding from the particulars and objections in the earlier part of Final Finding as well as Disclosure Statement, in his conclusion reached in the Final Finding in its submissions, which have been reproduced hereinabove. On analysis of the same, it appears that while considering the import as insignificant which constituted 98% of the total import and 6% of consumption in India which more than insignificant as defined in Rule 14(d) of the Rules has not been properly considered by respondent No.2. The volume of insignificant import has been dealt with in Rule 14(d) which reads as under:-

RULE 14. Termination of investigation. The designated authority shall, by issue of a public notice terminate an investigation immediately if – (a) xxxx xxxx xxxx (b) xxxx xxxx xxxx (c) xxxx xxxx xxxx (d) it determines the volume of the dumped imports, actual or potential, from a particular country accounts for less than three per cent of the imports of the like product, collectively account for more than seven per cent of the import of the like product; or

(e) xxxx xxxx xxxx

Thus, according to Rule 14(d), the percentage has been given in the import of the like product. Now, admittedly, in view of para-62 at page No.265, the imports are 5.84% which is above the insignificant import as per Rule 14(d). Thus, the observations made by the DA is misreading of the facts and the DA has not properly appreciated this very observation while reaching in the conclusion in Final Finding and this fact is corroborated from the Final Finding itself.

19. It also appears from the record that the authority has made observations regarding likelihood of substantially increased dumped exports to Indian market, taking into account the availability of other export markets to absorb any additional exports from paragraph Nos.85, 90, 91, 92 and 93 at page Nos.273 to 277 and has specifically observed therein that –

(I) Considering the capacity utilization and export orientation of the responding producers and evidence provided by the domestic industry, it is evident that there are surplus capacities in China and the Chinese producers are export oriented.

(II) The questionnaire response filed by the Chinese producer’s shows that level of inventories with the cooperative producers / exporters is quite significant.

(III) Analysis of the China PR Custom data with regard to export from China PR to the rest of the world, indicate that with the revocation of ADD, the Indian prices would be attractive for the Chinese producers / Exporters to increase their exports to India.

(VI) The Authority notes that ***% total volume of exports to third countries is at a price lower than the price at which China exports to India. Whereas ***% of the total exports are exported are above the price at which China exports the subject goods to India.

(V) In the event of cessation of ADD, there is probability that the exporters / producers would resort to dumping of subject goods to India. Though all these facts have been narrated by the DA, ultimately, in his conclusion in paras 126(6) to 165, has observed that the DI has failed to substantiate its claim in relation to likelihood of injury to the domestic industry if the current ADD ceases to exist. It has also observed that –

Analysis of the price attractiveness by the Authority does not position India as price attractive for Chinese exports so far as subject goods are concerned.

20. The petitioners have shown how there is diametrical conclusion reached in the Final Finding from the particulars and objections in the earlier part of Final Finding as well as Disclosure Statement, in his conclusion reached in the Final Finding in its submissions, which have been reproduced hereinabove. On analysis of the same, it appears that while considering the import as insignificant which constituted 98% of the total import and 6% of consumption in India which more than insignificant as defined in Rule 14(d) of the Rules has not been properly considered by respondent No.2. The volume of insignificant import has been dealt with in Rule 14(d) which reads as under:-

RULE 14. Termination of investigation. The designated authority shall, by issue of a public notice terminate an investigation immediately if – (a) xxxx xxxx xxxx (b) xxxx xxxx xxxx (c) xxxx xxxx xxxx (di) it determines the volume of the dumped imports, actual or potential, from a particular country accounts for less than three per cent of the imports of the like product, collectively account for more than seven per cent of the import of the like product; or

(e) xxxx xxxx xxxx

Thus, according to Rule 14(d), the percentage has been given in the import of the like product. Now, admittedly, in view of para-62 at page No.265, the imports are 5.84% which is above the insignificant import as per Rule 14(d). Thus, the observations made by the DA is misreading of the facts and the DA has not properly appreciated this very observation while reaching in the conclusion in Final Finding and this fact is corroborated from the Final Finding itself.

21. It also appears from the record that the authority has made observations regarding likelihood of substantially increased dumped exports to Indian market, taking into account the availability of other export markets to absorb any additional exports from paragraph Nos.85, 90, 91, 92 and 93 at page Nos.273 to 277 and has specifically observed therein that –

(I) Considering the capacity utilization and export orientation of the responding producers and evidence provided by the domestic industry, it is evident that there are surplus capacities in China and the Chinese producers are export oriented. (II) The questionnaire response filed by the Chinese producer’s shows that level of inventories with the cooperative producers / exporters is quite significant. (III) Analysis of the China PR Custom data with regard to export from China PR to the rest of the world, indicate that with the revocation of ADD, the Indian prices would be attractive for the Chinese producers / Exporters to increase their exports to India. (VI) The Authority notes that ***% total volume of exports to third countries is at a price lower than the price at which China exports to India. Whereas ***% of the total exports are exported are above the price at which China exports the subject goods to India. (VI) In the event of cessation of ADD, there is probability that the exporters / producers would resort to dumping of subject goods to India. Though all these facts have been narrated by the DA, ultimately, in his conclusion in paras 126(6) to 165, has observed that the DI has failed to substantiate its claim in relation to likelihood of injury to the domestic industry if the current ADD ceases to exist. It has also observed that –

Analysis of the price attractiveness by the Authority does not position India as price attractive for Chinese exports so far as subject goods are concerned.

22. It appears from the Disclosure Statement as well as Final Finding that all the above facts are narrated therein, but without considering those facts and in diametrically opposed to the same, the DA has made conclusion. Thus, the submission of the petitioners that the DA has not properly appreciated the fact and has went beyond the evidence and information examined, is acceptable. It appears from the record that the conclusion arrived at by DA in Final Finding is not based on the observations made by him in Disclosure Statement as well as in Final Finding itself. Thus, there is lack of non-application of mind on the part of the authority concerned.

23. The DA has also made observation in para-126(6) that the ADD was in force since September 2001 and the condition of domestic industry has improved. But, this fact has no relevance for deciding likelihood injury if ADD is not extended. The ADD is required to be imposed so long as the investigation shows that the cessation of such duty is likely to lead to continuation or recurrence of dumping and injury.

24. The submission of Mr.Desai, learned advocate for respondent No.2 so far as it relates to the stand that DGCIS is not a public domain and everybody cannot have accessed to its data is concerned, the same is devoid of merits. Even if there is fee for charge is recovered, the persons who access such site of DGCIS then in that case also, it cannot be treated as a private or confidential data. Whenever any information is made available on website by any particular entity then it will amount to available on public domain which has been recorded by the DA from the data of DGCIS is also a breach of Rules and there is detailed information given to the petitioners herein.

25. It appears from the record that after Disclosure Statement, the petitioners herein have sought certain informations which are not confidential in nature, which have not been supplied by the DA to the petitioners and thus, there is also breach of principles of natural justice. Considering the facts narrated in the Disclosure Statement and Finding and ultimate conclusion, it clearly appears that the DA has not properly appreciated the material placed on record and has not averted all the facts of likelihood of dumping and injury to the DI and there is non-advertence to the requisite material placed on record and non-consideration of the facts recorded earlier and there is merely a foundation of reading to the conclusion in final finding, diametrically opposed to the facts observed in the Disclosure Statement and final findings, which render the final findings not tenable in the eye of law as the final findings are suffering from the aforesaid omissions and, therefore, it could be termed as perverse so as to render it unsustainable in the eye of law.

26. Mr.Ravi Prakash, learned advocate for respondent – Union of India has submitted that the Union of India cannot review its decision and cannot extend the notification which is non-existence in the eye of law. So far as the present petition is concerned, this matter was listed earlier before this Court and certain orders came to be passed, which are reproduced hereinabove, which reflects that pending this petition, respondent has diluted interim order of this Court and issued notification cancelling ADD. Therefore, when the matter was in session with the Court, whatever action is taken is subject to the result of the petition. As such, considering the peculiar facts and circumstances of the case, this Court is of the view that the stand taken by respondent – Union of India cannot be accepted and it is meritless, especially when it is found from the material placed on record that the DA has not taken into consideration the material placed on record, as conclusion in final finding is diametrically opposed to the observations made in the Disclosure Statement as well as in Final Findings and thus, as there is non-application of mind of the DA, this Court has power and jurisdiction to direct the concerned authority to extend the period of notification to impose ADD for a further period.

27. One of the submissions on behalf of the respondents as made by Mr.Desai, learned advocate for Union of India is that after Disclosure Statement and before passing of final order, nothing is required to be done and, therefore, there might be reproduction of facts and material which has been made in Disclosure Statement in the same in the Final Findings. This submission is devoid of merits. Had there been real intention of the legislature that nothing is required to be done after passing the Disclosure Statement, then the Act and Rules might have provided that the same may be treated as Final Findings. It is an admitted fact that after Disclosure Statement, the concerned parties are invited to submit their submissions and, thereafter, the Final Finding has to be arrived at. It shows that it is the duty of the concerned authority to eventuate, examine and appreciate the material placed by the concerned parties, which have been submitted by them after Disclosure Statement, in its proper perspective and, thereafter, the authority has to pass final finding order. This course has to be adopted with a view to afford proper opportunity to all the parties and to evaluate, examine and appreciate the material supplied by the concerned parties to the DA regarding Disclosure Statement and after making such exercise by DA, necessary Final Finding may be arrived at by DA either to positive opinion or negative one continuation.

28. The law in respect of the final findings and its justiciability is no more res-integra and one can say that under Article 226 of the Constitution of India when final findings are assailed on the grounds mentioned in the submissions viz. Omissions on the part of the authority in considering the detailed put forward by the petitioner, the High Court could interfere in the matter. The omission by the designated authority in disclosing the material which is not claimed to be confidential and the omission to follow the methodology in light of the decision in respect of Rule-7 as held by Supreme Court in case of Reliance Industries Ltd., Vs. Designated Authority reported in 2006 (10) SCC 368 = 2006-TIOL-120-SC-AD and Union of India Vs. Meghmani Organics Ltd., reported in 2016 (340) E.L.T. 449 = 2016-TIOL-170-SC-CUS-LB can be held to be sufficient material to persuade this Court to hold that the final findings cannot be said to be sustainable in eye of law.

29. In view of the aforesaid discussions, we are of the view that the impugned Final Finding recorded in the Notification No.7/16/2018-DGAD dated 29.01.2019, cannot be said to be strictly in accordance with the provision of Rule 23 of the Rules, as there is nonadvertance to the material placed on record and there is noncompliance with the principle of natural justice as no requisite information was made available and the conclusions are diametrically opposed to the material on record. Therefore, we are left with no other alternative, but to remand back the matter to the concerned authority after quashing and setting aside the same for reconsideration on the aspects which have been mentioned herein above and record its finding, and as the extended period of notification of anti dumping duty is ending, the same is also required to be extended for appropriate time so that assessing the material and recording the final findings afresh could be undertaken meaningfully and without jeopardizing the parties right and contentions and rendering it infructuous.

30. In that view of the matter, the respondent no.2 is hereby directed to undertake the exercise of recording its final finding afresh in accordance with the observations made herein above strictly in accordance with the provisions of Rule-23 of the Rules and after affording full opportunity to the parties and complying with the principles of natural justice and respondent no.1 shall appropriately issue notification extending the anti dumping duty on the product in question, till the final findings are rendered.

31. In view of the aforesaid discussion, the petition is allowed. The impugned final findings dated 29.01.2019 are hereby quashed and set aside.

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