M/s Perstorp Chemicals Gmbh And Anr. vs Designated Authority And Ors.

These are two appeals by M/s Perstorp Chemical Gmbh, a German company and Perstorp Chemicals (India) Pvt. Ltd., the Indian Importer. The

appeals are directed against Final finding dated 10.04.2012 of the Designated Authority, Directorate General of Anti Dumping and Allied Duties,

Ministry of Commerce and Industry and Customs Notification 33/2012-Cus(ADD) dated 20.06.2012 imposing AD duty on Pentaerythritol (subject

goods) originating in or exported from European Union, except Sweden. The first originating in or exported from European Union, except Sweden.

The first appellant is an exporter of subject goods affected by the AD duty and is challenging the said duty in the present appeal.

The brief facts of the case are that the Designated Authority received application from M/s Kanoria Chemicals and Industries Ltd., Gujarat (D.I.)

with request for AD duty on the subject goods imported from European Union except Sweden. The Designated Authority initiated the investigation in

January, 2011. After following procedure as set out under Customs Tariff (Identification, Assessment and Collection of Duty on Dumped Articles and

for Determination of Injury) Rules, 1995, the Designated Authority recommended imposition of AD duty on the subject goods originating in or

exported from European Union excluding Sweden. Customs Notification dated 20.06.2012 was accordingly issued imposing AD duty.

Ld. Counsel appearing on behalf of the appellants contested the findings of the Designated Authority on various grounds. His submission, may be

summarized as below:

(a) Price under selling has been exaggerated in view of assuming 22% return on capital employed, for domestic industry. The rate of return has

distorted the injury margin. The imports of subject goods is mainly attributable to huge demand-supply gap in India. The conclusion of the D.A. is that

even after the increase in market size in India, the D.I, could not increase its market share. This was considered as sign of injury to the Domestic

Industry. This conclusion is not correct as the D.I. has very small capacity and as such could not meet the full demand.

(b) The D.A. failed to examine the impact of imports from Saudi Arabia on the injury suffered by the D.I.

(c) The D.I. represented by M/s. Kanoria Chemicals had specific agreement with M/s Asian Paints. The inter-se competition between them has not

been analysed by the D.A.

(d) The price under cutting on the injury margin for the appellant exporter should have been determined based on resale price of the appellant

importer, not based on landed price.

The Ld. Counsel for the D.I. supported the findings of the D.A. It is submitted that D.I. provided sufficient information for initiating the

investigation. The appellants' plea that the D.I. has suffered injury on account of alleged un-dumped import from Saudi Arabia is not correct. As per

Annexure II para (v) of the A.O. Rules, the D.A. is required to segregate injury caused by the un-dumped imports. The Ld. Counsel submitted that

the Respondent No.3 (M/s Kanoria Chemicals) constituted D.I. as they hold a major portion of domestic production. Regarding the calculation of

return on capital employed, it is submitted that the 22% claimed by the D.I. is reasonable for calculation of NIP. None of the parties objected to this

claim during the investigation by the D.A. This is as per the consistent practice of adopting reasonable return. The D.A. has correctly examined the

inter-se competition with other domestic producer while analysing the injury. The Indian resale price of imported goods cannot be considered for injury

margin.

The Ld. Counsel for the D.A. supported the findings of the D.A. He submitted that none of the grounds now raised by the appellants have any

merit so as to interfere with the said findings. The procedure prescribed have been strictly followed before arriving at the conclusion.

The Ld. AR appearing for the Revenue supported the imposition of A.D. duty.

We have heard all the parties as above and examined the appeal records.

The appellants contended that the demand for subject goods in India is substantial and as such could not be met by Respondent No.3. The volume

affect of dumped imports have been examined by the D.A. It is seen that the demand for the subject goods has increased in the POI after a decline in

2008-2009. The imports also have increased. The sales of D.I declined significantly in 2008-2009 and thereafter increased during POI. We noticed

that the D.A. had examined the actual and potential production, capacity and capacity utilization sales of the subject goods. It is seen that the increase

in demand is higher than the increase in production/ sales of the D.I. In spite of improvements in production, sales and capacity utilization, the price

parameters of D.I. have significantly deteriorated during the POI. It is brought out in the final findings that the profitability of D.I. improved in 2007-

2008 as a result of A.O. duty imposed on imports from other dumped sources. After taking note of other factors which may impact the profitability of

the D.I., the D.A. concluded that the profitability deteriorated in POI due to dumping from other sources.

Regarding the return on investment, the appellants contended that the earlier period profits should be considered before arriving at a reasonable

return on investment. We find that the Tribunal in the Final Order No.53541 of 2015 dated 27.11.2015 in the case of Merino Penal Products Ltd. held

that the return on investment is adopted based on consistent practice followed by the D.A. and the claim made by D.I. The said claim was not

controverted with evidence at any stage nor was there any ground of reason to suspect any manipulation on the part of D.I. in that regard. We find

there is no specific point made by the appellant with supporting evidence to hold that the practice followed by the D.A. in arriving at return on

investment is patently wrong.

Regarding calculation of price under cutting and injury margin based on resale price of subject goods in India, we find that there is no legal basis

for such assertion. When pointedly asked, the Ld. Counsel for the appellant conceded that there is no legal basis to adopt the resale price of related

party in India for such calculation. We note that the landed price is to be as per Section 9(A)(1b) and the export price of appellant No. l is considered

correctly by the D.A.

Regarding the import of un-dumped imports from Saudi Arabia, we find that the D.A. examined the issue and recorded that it has not been shown

that the volume of imports not sold at dumped prices have had significant adverse impact on the D.I. Further, we find the D.A. has considered the

data for POI. Apparently. the data for different period cannot be compared. Further, the D.A. categorically recorded based on the analysis of data

that price under cutting exists. The D.I. suffered price depreciation. The significant adverse impact of dumped imports may be established in terms of

any one or more parameters listed as per the A.D. Rules. It is not necessary that the D.I. should have suffered injury in respect of all the injury

parameters. Similarly, it is not necessary that the D.I. should have suffered injury during the entire injury period. We also take note that inter-se

competition in D.I. has also been considered and the D.A. who concluded that the same is not principal cause of injury to the D.I.

After careful analysis of the points raised by the appellants and findings of the D.A., we find that there is no merit in the present appeals to

interfere with the impugned findings of the D.A. and the imposition of A.O. duty by the impugned Customs Notification. Accordingly, the appeals are

dismissed.

(Pronounced in the open Court on 30.08.2016)