1. These appeals are against the imposition of antidumping duty on aniline (imported from the European Union) by the Central Government vide Customs Notification No. 71/2001 dated 26.6.2001 pursuant to the final findings of the Designated Authority published in Notification dated 28.5.2001 (Ministry of Commerce & Industry). One of these appeals is by an association of domestic consumers of Aniline and the other is by an Indian importer of the item.
2. In the impugned proceedings, the Designated Authority (2nd respondent) recommended imposition of definitive antidumping duty @ USD 0.342 per Kg. On all imports of Aniline (an organic chemical essential for vital industries viz. manufacturers of dyes, drugs, rubber chemicals, photographic chemicals and other important chemicals such as MDI) falling under Customs Tariff sub-heading 2921.41 and originating in, or exported from, the European Union, and the Central Government (1st respondent) implemented the recommendation. The Designated Authority had made its recommendation on the basis of the following findings: a) Aniline originating in, or exported from, European Union was exported to India below normal value, resulting in dumping; c) The injury was caused to the domestic industry by the dumping of Aniline originating in, or exported from, European Union.
The above finding, notified on 28.5.2001, had been recorded at the end of an anti-dumping investigation initiated by the Designated Authority at the instance of the domestic industry represented by the 3rd, 4th and 5th respondents in these appeals.
In their joint petition of initiating such investigation, the domestic industry had relied on the trade journal "Chemical Week" dated 17.11.1999 (Valume 161, Number 43) to claim that the 'normal value' of Aniline in Europe was in the range of USD 880-925 PMT (CIF) and to allege that the exports of the goods from European Union to India during the period 1.4.99 to 31.12.99 were made at prices far below the normal value. For the 'export price' of the chemical for the said period, the petitioners had relied on the data reported by the directorate General of commercial Intelligence & Statistics [DGCI & S], Calcutta. The Designated Authority accepted the petitioners' claim as to normal value but, as to export price, chose to rely on the import data contained in the Customs Daily List, Kandla Port. The authority worked out the export price (ex-factory) from this data by allowing adjustments on account of ocean freight, commission, inland transportation and port handling charges. The authority accordingly found dumping against all Aniline exporters of European Union and determined the margin of dumping which worked out to 166.17% of the export price. The injury which was found to have been caused to the domestic industry by such dumping was also assessed by the authority, which, on that basis, decided to recommend anti-dumping duty on imports of Aniline from European Union.
3. In these appeals the main contentions raised against the Designated Authority's decision are (i) that, as, according to the data submitted by the domestic industry, there were imports of the product from European Union only from April to July 1999 (4 months out of the 9-month period of investigation), the authority should not have initiated investigation at all; (ii) that the authority acted contrary to natural justice as well as Rule 7 of the customs Tariff (Identification, Assessment and Collection of Duty or Additional Duty on dumped Articles and Determination of Injury) Rules, 1995 [hereinafter referred to as the Anti-Dumping Rules or the AD Rules] by treating the Kandla Port import data as confidential; (iii) that the reliance placed by the authority on the trade journal produced by an interested party for determining the normal value of the subject goods in European Union is country to the Supreme Court's ruling in the case of Designated Authority Vs. Haldor Topsoe [2000 (120) E.L.T. 11 (S.C.)]; (iv) that the authority failed to appreciate the fact that the data published in trade journals are often inaccurate, misleading and exaggerated; (v) that the authority should have considered the German market price of the goods provided by M/s. BASF, which was significantly lower than the prices reported by the trade journal; (vi) that the authority acted in violation of Rule 8 or the Anti-Dumping Rules by not examining the accuracy of the data furnished by the domestic industry; (vii) that the authority contravened the provisions of Rule 6 of the said Rules by denying to the domestic users of the goods an opportunity to examine the accuracy of the claim made by the domestic industry; and (viii) the authority neglected to consider the impact of anti-dumping duty (on Aniline) on the domestic consumers of the product.
4. We have heard counsel for the appellants (importers/users of Aniline in India), respondents 3 to 5 (domestic manufacturers of the product) and respondent No. 2 (Designated Authority) and have considered their submissions. It is not in dispute that, for determining the normal value of Aniline in the European Union, the 2th respondent relied exclusively on the 1999 November 17 issue of "Chemical Week"-a weekly magazine referred to as a 'trade journal' by both the sides. It is, again, undisputed-and indisputable-that any erroneous determination of normal value under the Anti-Dumping Rules read with Section 9A(1)(c) of the Customs Tariff Act would be the first and crucial ground of challenge against any finding of dumping recorded on the basis of such determination. Therefore, in the instant case, we shall straightaway proceed to examine the validity of normal value determination done by the 2nd respondent.
5. In this case, the two exporters M/s. BASF and M/s. Bayer AG (both, of Germany) who responded to the Designated Authority's queries in the anti-dumping investigation had not exported aniline to India during the period of investigation, but the former furnished some information to the authority regarding home market sale prices of the product. The Designated Authority has not considered this information. None of the exporters who actually exported Aniline to India during the period of investigation respondent to the investigative queries of the Designated Authority. The authority, for determining the normal value, chose to rely exclusively on the European prices of Aniline reported in Chemical Week dated 17.11.99 provided by the petitioners (domestic industry).
Shri Krishnan Venugopal, id counsel for the Designated Authority argued, in defence of this procedure, that the appellants, being neither exporters nor manufacturers of aniline, were not competent to challenge the normal value determined by the Designated Authority or the procedure adopted for such determination. In this connection, reliance was placed on the Tribunal's decisions in AIIGMA Vs.
Designated authority [2000 (119) E.L.T.333] and Virchow Laboratories Vs. Ministry of Finance [2002 (141) E.L.T.60]. The counsel for the appellants, who relied on Rule 6 (5) of the AD Rules, sought to distinguish the above cases by submitting that, in those cases, Rule 6 (5) had not arisen for consideration at all. It was mandatory for the designated Authority, under Rule 6(5), to provide opportunity to domesti industrial users of the product under consideration to furnish relevant information regarding dumping, injury and causality. Reliance was placed, in this context, on the Rajasthan High Court's decision in Rajasthan Textile Mills Assn. Vs. DGAD [2002 (149) E.L.T. 45 (Raj)].
The counsel for respondents 3 to 5 (domestic industry) submitted that, through these appeals, the importers of the product were indirectly challenging what they could not challenge directly. Relying on the Tribunal's decision in the AIIGMA case, he contended that they were not entitled to challenge the Designated Authority's findings on normal value of the product directly or indirectly. The counsel for the respondents heavily relied on the Supreme Court's decision in the Haldor topsoe case in support of their contention that, in the facts and circumstances of the instant case, it was open to the Designated Authority under Rule 6 (8) of the AD Rules to record its findings on the basis of the facts available to it and make such recommendations of the Central Government as it deemed fit under such circumstances. Where the exporters who actually exported the product to India during the period of investigation did not co-operate with the Designated Authority, the latter had the discretion to consider the facts which were made available by the domestic industry through the trade journal.
No material was supplied by the importers/consumers to controvert such facts. The Designated authority, therefore, resorted to "best judgment assessment" as contemplated under Rule 6 (8) and determined the normal value on the basis of the date published in the trade journal. The counsel for the domestic industry pointed out that, in the anti-dumping investigation against imports of Bishenol-A originating in or exported from the U.S.A., the Designated Authority vide Ministry of Commerce Notification No. 15/5/95/ADD dated 18.3.97 had determined normal value on the basis of the prices published in Chemical Market Reporter, a journal of the U.S. chemical industry. The counsel for the Designated Authority quoted from Joseph E. Pattison's "Antidumping and Countervailing Duty Laws" (Valume 3) to buttress the point that published data were reliable facts for purposes of Rule 6(8). He submitted that Chemical Week was a reputed journal which published only authenticated facts. The counsel for the appellants countered by pointing out that the Designated Authority itself had recognized the unreliability of trade journals in the case of anti-dumping investigations on Calcium carbide from China and Romania. He quoted from para 17 of the final Findings (Ministry of Commerce Notification No. 27/1/97-ADD) in the Calcium carbide case. It was further argued, with reference to Stroud's "Judicial dictionary of Words and Phrases" (Fourth Edition), that "facts did not cover statements made in broadcast on in the press". Without prejudice to these arguments, the appellants' counsel also submitted that Aniline was a petrochemical and, on account of the fact that petroleum prices were fluctuating almost day by day, the CIF prices of the product for one week were far from adequate to provide its normal value for the entire period (9 months) of investigation.
6. For the purpose or determining the normal value of Aniline in European Union, the Designated Authority invoked Rule 6 (8) or the AD Rules and relied on the European prices published in Chemical Week dated 17.11.99. Paragraphs (8.3) to (8.5) of its Final findings are reproduced below, to show as to how the authority fell back on what it considered as the "best available information" contained in the journal:- "8.3 Authority noted that the Two exporters, viz. M/s. BASF, Germany and M/s. Bayers AG, Germany have stated that they have not exported aniline during the POI and may request for separate assessment as a new shipper - Rule 22 supra.
8.4 As regards to M/s. BASF furnishing information on normal value, and some interested parties claim that the determination of normal value for Germany to be based on the same, Authority notes that the information provided by the company is not sufficient to determine normal value. The company has furnished factory cost and profit of domestic sales for the period of investigation and exports to countries other than India, they have not furnished any details/working calculations linking to their audit and accounts which would demonstrate that the product was sold above cost of production. It also does not establish that they have sold the subject goods in their home market or to the countries other than India in ordinary course of trade. The Annual Report for 1999 seems to be consolidated one. Very little is reported about the product under consideration. The company has furnished some selective invoices with respect to their home sale in German language without corresponding English version. Authority further notes that when the company has not exported the good under consideration the assessment of normal value cannot be done and the information furnished is not relevant for assessing the normal value for the exporters who have not cooperated with the anti-dumping investigation. In the circumstances the information furnished by M/s. BASF with regard to normal value has not been considered.
8.5 In view of the non-submission of information to the questionnaire by any other producers/exporters from EU, the Authority have been constrained to rely upon best available information with regard to normal value and export price as provided by the petitioners and the best information available with it." We are of the considered view that the circumstances spelt out by the Designated Authority in its Final findings (supra) were enough, under Rule 6 (8) of the AD Rules, for the authority to look out for whatever relevant facts were available to it. Rule 6 (8) reads as under:- "(8) In a case where an interested party refuses access to, or otherwise does not provide necessary information within a reasonable period, or significantly impedes the investigation., the designated authority may record its findings on the basis of the facts available to it and make such recommendations to the Central Government as it deems fit under such circumstances." The above rule has empowered the Designated Authority, in the circumstances contemplated thereunder, to reach a conclusion as to normal value of the product on the basis of the "facts available to it". This rule of "best judgment assessment" is, by now, well settled vide the Hon'ble Supreme Court's decision in the Haldor Topsoe case.
7. The question now is whether the prices of Aniline reported in the trade journal supplied by the domestic industry constituted relevant facts for the purpose of Rule 6 (8). What has been laid down by Rule 6 (8) read with the Haldor Topsoe ruling is that the available facts shall be the basis of a best judgment assessment of normal value of the product under consideration. It is a sine qua non inbuilt in this rule that the facts should, inter alia, be authentic and relevant to the subject country/territory as well as to the period of investigation.
Then only the facts can be held to be an acceptable basis for normal value determination. In the instant case, the prices of aniline in Europe were reported in Chemical Week of 17.11.99 as "USD 880-925/m.t.
cif list". The sources of this report were indicated as "SRI International (Menlo Park, CA)" and "company reports". But the source materials have not been disclosed, nor the authenticity thereof established, by the Designated Authority. This apart, the aniline prices shown in page 41 of the journal of 17.11.99, wherefrom the Designated Authority claims to have obtained the best available information in terms of Rule 6(8) ibid, do not appear to be any trade data published for the week. They are, ex facie, part of an article on Aniline, which mainly gives an account of the global trends in aniline industry. The article also briefly mentions the technology of the industry, gives a graphic account of the global capacity shared by Europe and other parts of the world and provides a list of the major aniline-Producers of the world. We have also seen the next page [42] of the same magazine. This page appears to contain the weekly report of U.S. and European prices of a number of chemicals and polymers. But aniline is nowhere in this price list. We have also seen a similar price report in page 31 of the 1999 October 6 issue of Chemical Week produced by the counsel for the appellants. Aniline does not figure in this list either. It is also, incidentally, noticed that any such article on Aniline as above is conspicuously absent in this issue of the journal. The only conclusion that can be drawn from these observations is that the learned Designated Authority was misled by Chemical Week of 17.11.99 into the wrong notion that page 41 thereof provided facts relevant to normal value determination. The authority failed to realize that what was contained in the said page of the journal was only an article on aniline industry and the same could not have provided judicially noticeable facts. The contents of the article were nothing more than statements in the press. The meaning of "Facts" given in Stroud's Judicial Dictionary of World and phrases-that "facts" do not cover statements made in the press-is quite apposite in this context. We are thus convinced of the fact that the prices of Aniline mentioned in the above article in the journal do not belong to the realm of relevant facts for purposes of Rule 6(8) of the AD Rules. Yet another reason for rejecting the above prices would be that those prices are ex facie a range of prices of Aniline for the whole of Europe and do not relate exclusively to the European Union. One cannot lose sight of the fact that, in Europe, there are also countries which are outside the European Union, and this fact also would render the journal prices irrelevant to the anti-dumping investigations against European Union Exporters.
8. The excerpts from Joseph Pattison's commentaries on ntidumping and Countervailing Duty Laws, produced by the learned counsel for the Designated Authority, have also been perused and, in relation to published data, they are found to favour the position that official publications in the country of exportation can be accepted as a source of "best information" in antidumping investigations. It is stated, for instance, that the minimum price guidelines published under the Davignon Plan of the European Coal and Steel Community were utilized to show home market prices of products in Belgium, France and the U.K.another instance is that, in an investigation in Sugar from France, Belgium and Germany, the prices published in the Official Journal of the European Communities were relied on. Joseph Pattison does not provide anything to support the counsel's plea that the Designated Authority has had the "best information" of European Union home market prices of Aniline from Chemical Week, not claimed to be an official publication. On the other hand, it quotes a judicial authority vide Tianjin Machinery Import & export corporation Vs. United States, 806 F.Supp.1008, 14 I.T.R.D. 2149 (C.I.T. 1993) to state the long settled law that "best information available" is a rule of reasonable adverse inference against non-cooperating exporters. We have already found that the journal data in question do not constitute "facts" and are irrelevant to the subject investigation in Aniline. Such data can be no reasonable basis for adverse inference in this case.
9. In the result, we hold that the Designated Authority has determined normal value of Aniline in the European Union for the period of investigation on a grossly erroneous basis and, consequently, its finding of dumping against European Union exporters of Aniline for the said period is not sustainable. The error does not get obliterated by arguments (as advanced by the counsel for the 2nd respondent) such as that the dumping margin would have been higher than 166.17% of the export price if the normal value has been determined in any other mode than the journal route. On the other hand, it becomes more patent if tested with the Designated Authority's own touchstone framed in its Final findings in the Calcium Carbide case, wherein the learned authority held: "The Authority connot determine the normal value on the basis of a few invoices or on the basis of trade journals wherein it is not clear wheather the prices at the point of sale are of producers or traders, whether they are at ex-factory level or otherwise, what is the credit period involved and terms of trade and whether they are in the ordinary course of trade or not. To this extent the Authority considers the information as incomplete and therefore normal value cannot be determined on the basis of incomplete information." 10. For the reasons recorded hereinbefore, we set aside the anti-dumping duty imposed under Customs Notification No 71/2001 dated 26.6.2001 and allow these appeals.