1. These three appeals and Misc. applications have been filed by M/s.
Alkali Manufacturers Association of India, M/s. Hindustan Lever Limited and M/s. National Aluminium Co. Ltd. 2. M/s Alkali Manufacturers Association of India (hereinafter referred to as AMAI) filed a petition before the Designated authority on behalf of the Domestic Industry alleging dumping of Sodium Hydroxide commonly known as Caustic Soda originated in or exported from people's republic of China & Korea PR. Public notice dated 14th May, 2002 was published in Gazette of India Extraordinary, initiating anti-dumping investigation concerning imports of Caustic Soda from the subject countries. Preliminary findings were notified by the Designated Authority under Notification dated 21st September, 2002 and the interested parties were requested to make their views known in writing.
A copy of the preliminary findings was also sent Page 279 to known exporters, importers and embassies of subject countries in India requesting them to advice the producers and exporters in their countries to respond to the Designated authority (hereinafter referred to as "JDA") to furnish their views. Opportunity of public hearing to interested parties was given on 18th February, 2003. Thereafter all parties were requested to file written submissions of their views. The authority made available the public file to all interested parties containing non-confidential version of evidence submitted by various interested parties for inspection, on request. In accordance with Rule 16 of the Customs Tariff (Identification, Assessment and collection of Anti-dumping Duty on dumped Articles and for Determination of Injury) Rules 1995, (hereinafter referred to as Anti Dumping Rules), the essential facts/basis considered were disclosed/made known to the interested parties on 14th July, 2003. The investigation covered the period from 1st April, 2001 to 31st March, 2002. On the basis of the preliminary findings of the Designated Authority dated 21st September, 2002, provisional anti-dumping duty was imposed under Notification No.142/2002-Cus dated 26th December, 2002. Final findings of the DA dated 4th August, 2003 were notified on 8th August, 2003. On the basis of the final findings of the Designated Authority, antidumping duty was imposed for imports from Korea RP (except from M/s. Hanwah Chemical Corporation) and China PR under Notification No. 142/2003 dated 23rd September, 2003) 3. In the present appeal by M/s. A.M.A.I., the findings of the Designated Authority not recommending imposition of Anti-dumping duty on M/s. Hanwah Chemical Corporation has been challenged whereas M/s.
National Aluminium Co. Ltd. and M/s. Hindustan Lever Ltd. have opposed imposition of anti-dumping duty on import of Caustic Soda.
4. It was pleaded for M/s. Alkali Manufacturers Association of India representing domestic industry that the finding of the Designed Authority on the imports made from M/s. Hanwah Chemical Corporation, Korea recommending the anti-dumping margin as de-minimis (minus 4.2 per cent) is not based on the correct appreciation of the facts. The normal value and the export price of Sodium Hydroxide (Caustic Soda) has not been correctly worked out in case of M/s. Hanwah Chemical Corporation as the data provided by the Corporation was not correct. The determination of normal value by the designated authority was challenged on the grounds that: (a) The value was based on sample evidence of invoices of M/s.
Hanwah Chemical Corporation. Transaction-wise value was neither kept in public file nor given to AMAI. (b) Transaction-wise inland freight was not considered and no evidence for the same was given. The inland freight was given on monthly basis without any evidence.
(c) Adjustments in discount inland freight, inland insurance and other deductions were not disclosed to M/s. AMAI. (a) While working out the normal value, the Designated Authority has not applied the test of ordinary course of sale by removing the abnormal transactions where the selling price in domestic market of exporting country was less than the cost of production by applying 80:20 principle as required under para 2(i) of Annexure-I to Anti-dumping Rules. The Designated authority has not worked out abnormal transaction below cost price by taking freight of each transaction but instead of this taken weighted average of freight.
There were 20,000 transactions during the period of Investigation for sale in domestic market but transaction-wise freight has not been shown separately by the Hanwah Chemical Corporation. The Designated Authority on the basis of total freight for the entire period determined per unit freight. The Designated Authority under letter dated 14th August, 2002 had informed M/s. Hanwah Chemical Corporation that they have claimed freight per MT on domestic sale, but there is no evidence of this under sample invoices provided by them. There is no information on freight paid for domestic transactions as indicated in the transaction-wise domestic sale information. M/s. Hanwah Chemical Corporation in response to the letter furnished month wise freight incurred on domestic sales paid during period of investigation. The total inland freight includes sea freight as well as tank lorry freight. By taking the average inland freight without taking transaction-wise freight, the normal value determined by the Designated Authority may not be correct.
Since the transaction-wise freight information was not given by M/s.
Hanwah Chemical Corporation even though it was called by the Designated Authority, M/s. Hanwah Chemical Corporation should be treated as non-cooperating exporter.
(b) The export price as defined in Section 9A(1)(b) of the Customs Tariff Act has not been correctly determined. In his case, there is no price from Korea to India as the Caustic soda was sold by M/s.
Tricon International of USA. When there is no price of export between India and Korea, there is no price available then it had to be reconstructed. M/s. Tricon participated in the tender and obtained order for supply of Caustic soda to M/s. NALCO. Caustic soda was sold by M/s. Hanwah Corporation, which is a selling arm of M/s. Hanwah Chemical Corporation to M/s Tricon. When there is no expert price available then the same has to be re-constructed.
Caustic Soda was first sold by M/s. Hanwah Chemical Corporation to M/s Hanwah Corporation, who in turn sold it to M/s. Trion. There are thus two local transactions before export. M/s. Hanwah Corporation did not produce financial statement as required under the Questionnaire, as they were making financial losses in 2001. Selling and general administrative (SGA) expenses of M/s. Haanwah Corporation were never examined and taken into account for calculation of the constructed export price by the Designated Authority. No officer of Designated Authority examined the records of M/s. Hanwah Corporation and M/s. Tricon. Both of these concerns have not given complete answers to the questionnaire. Hence they should be treated as non-cooperating parties and their value should be rejected. M/s. Hanwah Page 281 Chemical Corporation has not given proper indexed information. Compensatory arrangement of price between Hanwah Chemical Corporation, Hanwah Corporation and Tricon were not examined. Bank realisation charges were not deducted from export price. When entire response is not indicated but some gaps are left, then if these gaps are filled positive dumping margin will result.
(c) In the final findings, the Designated Authority has written that an adjustment was granted for $5/DMT but no mention in the preliminary finding was there on this account. Ex-factory export price was increased by $5 per DMT on account of supply of goods manufactured by the exporter under diaphragm technology.
(d) Adjustment of $4.57 per DMT was made in the export price for making up losses of M/s. Tricon suffered by them during previous transactions between M/s. Hanwah Chemical Corporation and M/s.
Tricon. In arriving at ex-factory export price, the Selling and General Administrative (SGA) expenses of M/s. Hanwah Corporation were not considered. Addition of $5 per DMT and $4.57 per DMT has increased the export which is contrary to Rules. No figures were given in the non-confidential version of determination of export price. Indexation should have been done for export price and normal price. Compensatory arrangement between Hanwa Chemical Corporation, Hanwa Corporation and M/s. Tricon was not examined 4.1 It is further argued that, since the normal price was reduced and export price was enhanced by adopting incorrect method, the dumping margin was wrongly calculated without full response from Tricon and Hanwah Corporation. The Designated Authority could not have worked out export price at ex-factory level as deduction allowed for arriving at ex-factory price without checking the records of Tricon and M/s. Hanwah Corporation as both of these concerns had not given full response to questionnaire. For Hanwah Corporation and Hanwah Chemical Corporation a combined response was sent by Hanwah Chemical Corporation.
4.2 It is also contended that, the comparison of export price with normal price was not done correctly by the Designated Authority as the comparison was liable to be done on transaction-to-transition basis. If this is done, it will lead to positive dumping margin, which may be more than 2 per cent. The Designated Authority has referenced the normal value from December, 2001 to March, 2002 and took weighted average of two shipments ride from December, 2001 to March, 2002 and compared it with normal value. This was not correct. The D.A. should have taken transaction to transaction basis for comparison of normal value and export price as per para 6(i) of Annexure-I to Anti-Dumping Rules.
4.3 Finally, it was contended that, the methodology adopted by the Designated Authority for arriving at the cost of production was not disclosed. The Designated Authority was required to disclose al the reasonings for arriving at a conclusion. The data, which is not business related data was required to be disclosed.
5. On behalf of respondents, M/s. Hanwah Chemical Corporation, Hanwah Corporation and M/s. Tricon, it was pleaded that the domestic industry has raised a point that in the response of Hanwah Chemical Corporation, it is mentioned that they have sold the goods to M/s. Hanwah Corporation and Hanwah Corporation to Tricon. LC is in the name of Hanwah Corporation. Hanwah Chemical Corporation has shown the invoice value to Hanwah Corporation and Hanwah Corporation to Tricons. This suggests that there are two invoices in the chain but in the final findings of the D.A., only one invoice from Hanwah Chemical Corporation has been considered for arriving at ex-factory export price. On this issue, it was replied that the nature of transaction was disclosed to the Designated Authority. Tricons approached Hanwah Chemical Corporation through Hanwah Corporation for the goods. Hanwah Corporation is trading arm of Hanwah Chemical Corporation. Tricons brought the export orders and placed it on Hanwah Chemical Corporation through Hanwah Corporation for supply of goods. The goods were sold to importer (NALCO) by Hanwah Chemical Corporation through Hanwah Corporation. LC was opened in the name of Hanwah Corporation. However, money finally came to Hanwah Chemical Corporation, after giving commission to Hanwah Corporation. In view of this position, the question of taking into consideration SGA of middlemen i.e. Hanwah Corporation has nothing to do with ex-factory export price.
5.1 It was argued on behalf of Hanwah Chemical Corporation and Hanwah Corporation that standard of confidentiality in obtaining information from the domestic industry and cooperating exporters was not equally applied. The domestic industry was required to given only two years information of imported products but 10 years information was given without disclosing the source of information. Therefore, figures are not reliable. For the year 12001-2002, information was given only up to December, 2001 and the same was annualized. Thus, for 2001-2002, full information was not made available. The first export from Hanwah Corporation was on 30th December, 2001 and this was not aided in the figures up to December and in the final findings, the D.A. has held that Hanwah Chemical Corporation was only exporter. The examples were cited that before initiation of investigation, domestic industry did not give any relevant information in Form IV, V & VI, still D.A.initiated investigation. Cooperating exporter i.e. Hanwah Chemical Corporation were asked to submit more and more details. Non-submission of relevant information by domestic industry should have dissuaded the D.A. from initiating investigation.
5.2 It was further argued that, Injury Information Data of import from Korea given by the domestic industry is at variance than the actual data on value and volume of imports. It was not checked by the Designated Authority. He had simply taken into consideration the data given by the domestic industry. The export from Korea during POI is only 56 M.T. which is less than deminimus. There was no reason for initiating investigation against Korea as imports from Korea by India were only 56 M.T. No information was given in the petition for imports from Korea by the domestic industry. The import Page 283 of one lac M.T. shown in the petition was considered by the D.A. although from April to November, 2001, it is shown only 21,000 Kgs. in Annexure 2 of the Petition of the domestic industry. But in response to the public hearing, the domestic industry gave figures as 12569 M.T. during the POI. When the imports were not made by NALCO, manifestation of injury cannot there.
5.3 It was then contended that in India, chlorine gas which is produced during the manufacture of caustic soda is considered as by-product and allocation of cost to said product is faulty due to wrong costing of caustic soda. Non-injurious price was inflated as price of chlorine was taken Nil and all cost was loaded on caustic soda. Domestic industry in their petition never gave details of cost allocation to chlorine. D.A.has net taken costing of chlorine in to account. Whether chlorine should be taken as by-product or co-product depends upon the volume of production or realization of sale value. Hanwah Chemical Corporation has shown chlorine as co-product but verification report of Hanwah Chemical Corporation by the D.A. shows that this was not accepted and price of caustic soda was fixed on the basis of volume. Incorrect determination of NIP leads to exaggeration of injury which cannot be attributed to dumping. Therefore, cost of manufacture of chlorine needs to be examined according to law. The loss made on sale of chlorine cannot be attributed to cost of production of caustic soda. While working out NIP for caustic soda, different method was adopted for Hanwah Chemical Corporation for determining the price of caustic soda than in India. The apportionment of cost of caustic soda and chlorine has to be done at the point of separation of these products on the basis of volume of production. It was also pleaded that verification reports in respect of December transaction were not furnished to them.
(i) Non-confidential version of petition made available to interested parties is without any table under proforma IV A. (ii) Performa IVB is also incomplete as it does not show the price of indigenous industries.
(iii) Entire performa VI relating to costing information was not given. It was also not kept in public file.
(iv) Different standard was applied by the D.A. for domestic industry and exporters as proforma of export guarantee was supplied in the indexed form to the domestic industry.
(v) D.A. did not accept books of accounts for costing of caustic soda of Hanwah Chemical Corporation but domestic industry was allowed debiting cost of chlorine.
(vi) Appellant M/s. AMAI are not manufacturers but they are only supported by domestic manufacturers. Out of 39 manufactures supporting them only 11 has submitted response to the D.A. and verification was done only in 5 cases. Same standard should be adopted for exporters also.
(vii) Fixation of common non-injury price for caustic soda lye and flake is not proper as both have different prices.
5.4 It was also contended that DA has not given reasons in his finding and several information in the findings is contrary to information available in the file. D.A. is required to give reason for arriving at a proper conclusion. If the information kept in the file is different than the information disclosed in the final findings then such order is bad in law.
6. Replying to the contentions of the appellants against the exporters, it was argued that the D.A. has correctly done cost verification on the basis of the information given in exporters questionnaire. In determining export price, D.A. has correctly taken the price by giving adjustment intimated by Hanwah Corporation to Tricons in their fax dated 14th December, 2001. Last para of this fax shows that adjustment of $4.57 MT is only mere accounting facilitation and there is no compensatory arrangement. Hanwah Chemical Corporation sold the goods to Hanwah Corporation who sold to Tricons. Hanwah Corporation has several divisions and is doing business in several activities not only relating to caustic soda. Therefore, their balance sheet shows profit and loss of entire activities. Balance sheet obtained through internet by the appellant and produced to shows that the loss of Corporation is for all activities and not for caustic soda only. What is required to be taken into consideration is transactions for caustic soda only. It was held in the case of Auto Motive Tyres v. DA (T) that whole company is not to be seen for loss or gain but it should be seen only for the product. Loss of 13 Dollars is not to be taken for caustic soda alone.
6.1 On adjustment of 5 dollars in the value, it was submitted that less value was given due to perception of buyers. In domestic price, there is no distinction between diaphram and membrane cell method. According to para 6 of Annexure 1 to Anti Dumping Rules, the benefit of 5 dollars was required to be given.
6.2 It was further submitted that, the export questionnaire is on costing of product information. It is kept confidential and information in indexed from is supplied to DA as per Rule 7(2) of Anti Dumping Rules. They have given non-confidential summary where possible. Where it was not possible reasons for the same were given to DA. WTO Agreement on Anti Dumping Duty gives full authority to DA for determining weighted average of freight. DA has verified each freight contract and weighted average was correctly taken. Averaging can be done by D.A. under Rule 17(3) of the Anti Dumping provisions. December, 2001 to March, 2002 was the period of shipment which was taken by D.A.If date of sale is taken for dumping margin, then it will lead to different result but D.A. has exercised his discretion in this regard.
Dumping can only be held if goods are introduced in the commerce of importing countries. It is relevant for initiating investigation.
Investigations were initiated on the basis of tender which was to be executed. Therefore, initiation of investigation was wrong.
7. On behalf of NALCO it was contended that although non-injurious price (NIP) is not defined in the Customs Tariff Act or Anti Dumping Rules, yet Page 285 the sole purpose of fixing NIP is to fix Anti Dumping duty to redress the injury to domestic industry. Therefore, the Designated Authority was required to find the correct price of Caustic Soda to be taken for fixing non-injurious price. Rule 17(1)(b) makes it clear that purpose of fixing NIP is to remove injury and it is the duty of the Designated Authority as per Rule 4(1)(a) of the Anti Dumping Rules to investigate existence degree and effect of any alleged dumping in relation to import of any article. Injury based on low prices of chlorine cannot be the reason for injury due to import of Caustic Soda as has been done by the Designated Authority. Annexure-II to Anti Dumping Rules gives the principles for determining the injury. Para (V) and (VI) of the Annexure-II to Anti Dumping Rules makes it clear that it must be demonstrated that the dumped imports are through the effects of dumping, causing injury to domestic industry. The demonstration of the causal relationship between the dumped import and the injury to the domestic industry shall be based on examination of relevant evidence before the Designated Authority. The Designated Authority shall also examine any known factors other than the dumped imports which at the same time are injuring the diagnostic industry, and the injury caused by these other factors must not be attributed to the dumped imports.
The factors which may be relevant in this respect include, inter alia, the volume and prices of import not sold at dumping prices, contraction in demand or changes in patterns of consumption, trade restrictive practices of and competition between the foreign and domestic producers, development in technology and the export performance and productivity of domestic industry. The effect of dumped imports shall be assessed in relation to domestic production of the like article when available data permit these separate identification of that production is on the basis of such criteria as the production process, producers sales and profits. If such separate identification of that production not possible, the fact of dumbed imports shall be assessed by examination of production of the narrowest group of range of products, which includes the like product, for which the necessary information can be provided. Thus, while determining the NIP Designated Authority has not considered the chlorine prices as a known-factor as required under para (v) of Annexure-II to Anti Dumping Rules. The Designated Authority has to apply his mind independently to determine the cost of production and profit irrespective of what has been done by other authority under Company Act or Act on Taxation. Para (vi) of Annexure-II to Anti Dumping Rules makes it obligatory on Designated Authority to work out the cost attributable to Caustic Soda, this has not been done by the Designated Authority. This is clear from the methodology adopted by the Designated Authority for arriving at non-injurious price. The Designated Authority has taken unreasonable profit for Caustic Soda while determining the NIP. Such a unreasonable profit has not been accepted by this Bench of this Tribunal in the case of Indian Spinners Association v. Designated Authority . While disclosing the methodology the Designated Authority has not given the point-wise analysis for arriving at the non-injurious price. It was not disclosed Page 286 whether chlorine was taken as a joint product or a bye-product while determining the cost of Caustic Soda. Cost of production of Chlorine and sodium hydroxide at lye stage should have been separated for arriving of the cost of production of caustic soda and the method of costing should have been disclosed in indexed form. Where the chlorine is used captively by the producers and there is no sale, the Designated Authority should have disclosed the manner in which the fair price of chlorine has been taken. It was not disclosed by the Designated Authority that there was a significant variation in title prices of chlorine and caustic soda during the POI in the case of domestic industry. The Designated Authority should have disclosed this fact and the manner of treatment of sale realisation of chlorine in arriving at the correct value of NIP. The figures shown by each industry for prices of chlorine makes it clear that assumed figures were taken by each industry. The Designated Authority was required to take correct figures and the manner of arriving at such figures and disclosing the same in the disclosure statement. This position was pointed out to Designated Authority and in the preliminary findings the Designated Authority has observed that the authority after noting the above submissions holds that the non-injurious price has been evaluated for the various domestic producers by appropriately considering the sales realisation from the related products. Also in order to eliminate inefficiencies, the Authority has normatted and benchmarked the best practices on utilization of raw materials, utilities etc. This issue of taking the price of chlorine was again taken up by them but in the final finding it was ignored by the Designated Authority. From the Annual Report of Alkali Manufacturers Association of India it is clear that the entire quantity of chlorine produced by the domestic industry was utilized.
Therefore, it was necessary for the Designated Authority to apply the cost accounting Rules for caustic soda for apportioning the cost of production of caustic soda and chlorine. The Designated Authority should have also taken into account the obsolete machinery and high electrical cost while determining the NIP. The injury analysis done by the Designated Authority is faulty as cost of production of chlorine and factors like obsolete machinery and high cost of electricity were not considered for arriving at the NIP.7.1 For determining the injury, the entire case is based on the NALCO tender and only the figures of the tender for import of soda ash by NALCO were taken. It was submitted that in response to the NALCO tender for supply of Caustic Soda the domestic industry had not responded to supply of total quantity required by NALCO. Thus, to meet their requirement they have necessarily to import the Caustic Soda. Majority of the domestic industry of Caustic Soda has not responded to NALCO tender then it cannot be said that there has been injury to domestic industry. None of the industries who have responded to tender have complaint of dumping. The imports made by NALCO were only of caustic soda lye but the enquiry was made for lye, flakes, prills and granules.
It was pointed out that Caustic Soda lye and Caustic Soda flakes prills and granules are not the identical goods. Lye is of 50 per cent Caustic Soda whereas the solid form like flakes prill and granules contained 100 per cent Caustic Soda. Therefore, these are not comparable Page 287 goods. Reliance was placed on the judgment of European Court of Justice dated 11th June, 92.
7.2 It was also pointed out that for determining the Anti Dumping duty on Korea and M/s Hanwha Chemical Corporation, only the imports from M/s Hanwha Chemical Corporation by NALCO was taken into consideration.
There was no other exporter from Korea and then how the Designated Authority has fixed the Anti Dumping duty for other exporters from Korea is also not explained. It was also pointed out that in the Notification No. 14/10/2002-DGAD dated 4th August, 2003 in the final findings on page 92 margin of dumping has been fixed ranging from 37.3 per cent to 84.5 per cent giving such a finding is contrary to law as the margin of dumping should be for a country/exporter specific and product specific. Therefore, this finding of the Designated Authority is contrary to law and it requires to be set aside. If the de-minimus Anti Dumping duty for M/s Hanwha Chemical Corporation upheld then no Anti Dumping duty on other producers from Korea is imposable as no export from Korea other than of M/s Hanwha Chemical Corporation was considered by the Designated Authority. The normal value will be country specific and the injury has not been properly assessed by the Designated Authority.
7.3 For fixing the export price for export from China, the AMAI had given the export price from France for caustic soda flakes as comparable to China for initiating investigation. Only 65 tonne of flakes were exported from France, it cannot be considered as comparable to China. No evidence for export from China was produced and for determining the price of export and taking France as comparable surrogate country no price of export from China was submitted by the domestic industry for initiating investigation. According to Section 9A of Customs Tariff Act and Rule 5(2) of the Anti Dumping Rules for initiation of investigation evidence of dumping injury and causal link of dumped import has to be established. According to Rule 5(2) an application alleging dumping should be supported by the evidence of dumping, injury where applicable and a causal link between such dumped import and alleged injury where applicable. Rule 5(3)(b) makes it obligatory for the Designated Authority to examine the accuracy and adequacy of the evidence provided in the application and satisfy itself that there is sufficient evidence regarding dumping injury and causal link between such dumped import and alleged injury. The application for initiation of investigation filed by Alkali Manufacturers Association of India is for all forms of caustic soda namely in the form of lye, flakes, pills and granules. The domestic industry had given the volume of import in the country since 1980-81 whereas according to the Anti Dumping Rules and Performa for application they were required to give the figures of last three years. Even though it is mentioned in the application for initiation of investigation that NALCO has plated its order for 87,000 MT which is more than combined imports of caustic soda (in a year in India, but no notice for initiation of investigation was issued by the Designated Authority to NALCO. According to Rule 6(1), if the Designated Authority has decided to initiate investigation to determine the existence, degreed and effect of any alleged dumping of any article, it Page 288 shall issue a public notice notifying its decision and such public notice shall, interalia, contain adequate information namely; name of the exporting countries and the article involved; the date of initiation of the investigation; a summary of the factors on which the allegation of injury is based and the address to which representations by interested parties to be directed along with time limit allowed to interested parties. As per Rule 6(3) the Designated Authority is required to provide a copy of application for initiation of investigation of alleged dumping to the known-exporter or the concerned trade association, government of the exporting countries and to other interested party who makes a request therefore in writing.
For initiation of investigation there was no evidence of normal value given by the applicant's for China. The value was taken from the figures published in Chlor Alkali magazine but no figures for normal value from China was submitted in the application. The reasons given by the domestic industry to initiate investigation does not prima-facie establishes that there was dumping from China/Korea. Mere assertion cannot be the reason for initiation. There was no reason to go to France when no price from China was given. The complaint filed by AMAI was not sufficient for initiation of investigation in the absence of any proof of dumping. The complaint of domestic industry was manipulate as all forms of caustic soda were put together. There was no dramatic increase in the imports, production in India is 15.61 lakh MT during 2000-01 which is increasing as compared to 1998-99 and 1999-2000. The Designated Authority in working constructed export price did not disclose the freight, margin insurance port expenses, and inland freight in case of China.
7.4 It was also argued that the Designated Authority has abused the confidentiality clause by not showing the working of the constructed normal value. It was also pleaded that the imports summary shows import from China PR from April 2001 to November 2001 for a quantity of 6253800 kg. and value Rs. 93849530. This figure does not match with the figure given in the application filed by AMAI which shows the figure of import from China the quantity 65145199 Kg. and value Rs. 673583242. It was the duty of Designated Authority to get these figures verified. If the export price from China is taken at $2:15 from Chlor Alkali Magazine of February 2002 than worked out by the Designated Authority then there is no dumping. Reliance was placed on the decision in the case of S&S Enterprise v. Designated Authority and Ors.
. According to which the preliminary finding was not conclusive of conclusive of the matter and was subject to a final finding is unacceptable and is against the language of Rule 14(d). The proceedings for investigation under Rule 5 are initiated on a written application by the domestic industry. The application is required to be supported by evidence of (4) dumping; (b) injury where applicable; and (c) causal link between dumping of imports and the alleged injury. The Designated Authority is required on the basis of the evidence as adduced by the domestic industry to arrive at prima facie conclusion before init Page 289 acting the investigation. Rule 5 requires satisfaction of the Designated Authority for initiating the investigation which was not there on the basis of evidence prod iced before) him. Reliance was also placed on the following decisions:Pig Iron Mfrs. Assn. v. Designated Authority where it was held that Designated Authority shall initiate investigation only upon receipt of written application by or on behalf of domestic industry withdrawal of support after initiation does not terminate proceedings.Commissioner of Income Tax v. GM Mittal Stainless Steel - where it was held that power of the Commissioner under Section 263 of the I.T. Act must be exercised on the basis of materials that were available to him when he exercised the power.Sterlite Industries v. Designated Authority - where it was held that 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.
7.5 It was submitted that confidentiality under Rule 7 is not something which must be automatically assumed.
7.6 It was, therefore, pleaded that the proceedings initiated by Designated Authority were void ab initio on the following grounds: (a) Caustic soda lye and caustic soda flakes, prills and granules were taken as one product, although caustic soda lye is having only 50 per cent concentration of caustic soda whereas the solid form are having 100 per cent.
(b) The prices of flakes/prill/granules are higher, their use and market are different and cost of production is also higher.
Therefore, these cannot be equated with lye.
8. On behalf of M/s Hindustan Lever Limited it was pleaded that for determining the injury, figures of only a few members of AMAI were taken into consideration instead of considering the entire industry.
For 2000-01, the production of domestic industry was 1561834 MT and this volume has increased over the last two years. Volume effect due to import is not there as during past years imports have been more than import during POI. The effect of import was required to be examined by the Designated Authority since there was no increase in volume of imports nor there was any injury due to volume of import. The 25th Annual Report of AMAI for the year 2001-02 shows decline in consumption and export of caustic soda. This was for the reason that there was no need of caustic soda as consumption has gone down. The prices of caustic soda were going down as shown in the 25th Annual Report of AMAI. This was not disclosed to the Designated Page 290 Authority. The entire Annual Report was available with the AMAI but they have not submitted the entire report to the Designated Authority and produced page 48 of the report for initiation of the investigation. The Designated Authority has not checked the cost of production of chlorine although it was joint product and it should have been taken into consideration. There was cost Variation for chlorine during POI ranging from Rs. 1000 PMT to Rs. 8000 PMT with such a wide variation in cost of chlorine, cost should have been apportioned at the point of separation between chlorine and caustic soda proportionately.
9. On behalf of the Designated Authority it was pleaded that the costs between chlorine and caustic soda were not apportioned on the basis of joint product but cost was taken on the basis of Performa "A" and "B" of Cost. Accounting Rules. At the relevant time Cost Accounting Records (Caustic Soda) Rules 1967 as amended from 1999 were applicable and according to Rule 3(3) of the said Rule every company to which these rules were applicable were required to maintain proper books of account containing particulars specified in Schedule 3 and Proforma "A" and "B" annexed to the schedule of these rules relating to the utilization of materials, labour and other items of cost in so far as they are applicable to caustic soda in any form. The manufacturers were maintaining these records in India. As per proforma "A" and "B" they were required to reduce the credits from chlorine while arriving at the cost of production of caustic soda as given at serial No. 12 of the proforma. They followed this as the industry was maintaining the records as per these Cost Accounting Records Rules. Para 12 of Annexure 3 although specified that where more than one product which is of equal economic importance arises from process, the cost up to the point of separation of products shall be apportioned to joint products on reasonable and equitable basis and shall be applied consistently. The basis on which such joint costs are apportioned to different products arising from the process shall be indicated in the cost records. It was pleaded that since in the cost records in Proforma "A" while determining the cost of caustic soda ye the credit from chlorine were required to be reduced, therefore, the Designated Authority has taken the value of credits shown in proforma "A". Since these records are audited under the Company Act, therefore, it was not necessary for Designated Authority to go into detail how these credits were taken for chlorine. Therefore, the Designated Authority has correctly gone on the basis of evidences produced in the form of proforma "A" while arriving at the cost of caustic soda. The Designated Authority has taken the credit of sale realisation and not the sale value. Sale realisation comes only when the goods are sold to other parties, but when it is internally consumed then cost of chlorine equal to sale value was taken into consideration by the Designated Authority.
9.1 It was submitted that while determining the normal value, the Designated Authority has taken into consideration weighted average of the freight which is permitted under the Rules. Reliance was placed on North Page 291 American Free Trade Area (NAFTA) Decisions in the case of Porcelain-on-Steel Cookware from Mexico (9th Administrative Review) - NAFTA Chapter 19 (USA 97 1904 07) [1999] NAFTA 2 (30 April 1999). In para F2 it was pleaded that the Designated Authority has taken due weighted average of the freight of entire period of POY. However, in the final findings it is wrongly mentioned that the weighted average was taken only for the quarter December 2001 to March 2002.
9.2 On taking profit of 22 per cent of the domestic industry for working out the non injurious price it was pleaded that the base for taking 22 per cent of capital investment as profit is uniformally adopted by the Designated Authority for all industries as the same profit has been standardized.
9.3 It was further contended for the Designated Authority that they have taken the figures of import as per DGCI&E and same figures were given by the domestic industry. The Designated Authority has not taken wrong figures. The Designated Authority has taken caustic soda as a single product instead of the various from in which it is available in the market or it is imported. Since the product is one and interchangeable with domestic product, its different form do not make it as a different product, therefore, the pleading of the appellants that there is no finding on the like articles given by the Designated Authority is baseless.
10. We have considered the submissions made by both the sides and our findings are as under: 11. It was alleged that the Designated Authority has not taken proper care to see that the application for initiation of investigation had not given the sufficient evidence for allegedly dumping and injury and evidence of causal link between the alleged dumped imports. It was obligatory for the Designated Authority to examine the accuracy and adequacy of evidence provided in the application and to come to the conclusion that there is sufficient evidence regarding the dumping, injury and causal link between the dumped imports and alleged injury.
11.1 We find that M/s AMAI on behalf of domestic industry had submitted the application for imposition of Anti Dumping duty before the Designated Authority. According to Rule 5(3) of Anti Dumping Rules, the Designated Authority shall not initiate any investigation pursuant to an application unless it determines on the basis of examination of the degree of support for or opposition to application expressed by the domestic procedures of like product that the application has been made on behalf of domestic industry. It examines the accuracy and adequacy of evidence provided in the application to satisfy itself that there is sufficient evidence regarding dumping, injury where applicable, a causal link between such dumped imports and alleged injury to justify the initiation of an investigation. We find that in the initiation notification dated 14th May, 2002, the Designated Page 292 Authority has indicated that: the petitioner has claimed normal value of subject goods in Korea R.P. on the basis of selling prices indicted in a secondary source which publishes prices of such goods. Normal value of subject goods in P.R. China has been claimed on the basis of constructed normal value with appropriate adjustment treating China as a non-market economy. The authority has prima-facie considered the normal value of subject goods in Korea R.P. on the basis of information in the secondary sources and that P.R. China on the basis of constructed normal value. The petitioners have indicated CIF prices on the basis of Data of Directorate General of Commercial Intelligence and Statistics, a secondary data source compiling custom data and the tender floated by M/s NALCO Ltd., one of the importer of Caustic Soda.
The Ex-factory export-price was evaluated by allowing adjustment on freight, ocean, insurance, commission, inland freight and port expenses. There was sufficient prima-facie evidence that normal value of subject goods in the subject countries was significantly higher than the price at which it has been exported to India indicating-prima-facie that the subject goods are being dumped by the exporter from the subject countries. Regarding injury and causal link the authority noted that the installed capacity and availability of sufficiently freely disposable subject goods by exporters in the subject countries couple with the export price of subject goods to India by subject countries have caused price under cutting and also pose a threat of material injury to domestic industry by way of price suppression and under cutting. For in tuition of investigation the information available before the Designated Authority was submitted by the applicant M/s AMAI. The information given by M/s AMAI was required to be verified by the Designated Authority for initiation: of the investigation with reference to the source from which the information has been furnished which has been done by the Designated Authority. He prima-facie came to the conclusion that there is dumping of the caustic soda from Korea P.R. and P.R. China. At the stage for initiation of the investigation the Designated Authority has only to examine the accuracy and adequacy of evidence provided in the application and the same has been done by the Designated Authority as is evident from the initiation notification. Therefore, it cannot be said that the Designated Authority has not applied his mind regarding accuracy and ad Jquacy adequacy. At the initiation stage all the details may not be available before the Designated Authority, therefore, he has only to examine the information submitted to him and its accuracy and adequacy and to come to a prima-facie conclusion that there is a need of initiation of investigation. The claim of the appellant M/s NALCO Ltd., that imports summary for April 2001 to November 2001 shows import from China PR a quantity of 6253800 Kg. valued at Rs. 93849530 this figure does not match with the figure given in the application filed by M/s AMAI which shows import from China of 65145199 Kg. valued at Rs. 673583242. We find that both the sets of figures are provided by M/s AMAI in their application and the sources has also been disclosed. The first set of figures is based on figures published by DGCI&S and the second set of figures are shown as available with AMIAI. Since the information before the Designated Authority is Provided by the applicant filing Page 293 application for initiation of the proceedings for imposition of Anti-Dumping duty, the Designated Authority has only to verify the accuracy and correctness of the information based on the source from which the information was submitted by the applicant industry or any other source, if such information is available with the Designated Authority. We find that prima-facie the accuracy of the information furnished by domestic industry would be correct as they have passed the information on the basis of the published figures of import of Caustic Soda from DGCI&S and these figures have been considered by DA. We do not find that there is any reason to say that the Designated Authority has not verified the information. The DA has taken the authentic figures published by DGCI&S into consideration. The claim of importer/exporter that domestic industry did not submit full information in form IV, V & VI is based on the information given to them by keeping the confidential information blocked. This cannot be the reason for a claim that full information was not given by domestic industry. Where information was not complete, it was called by DA.12. We also find that the Designated Authority has given a finding in the initiation notification dated 14th May, 2002 that the petition filed by M/s AMAI representing domestic industry is supported by ten domestic produces which represent 55.29 per cent of the subject goods production and have thus the standing to file the petition on behalf of domestic industry as per Rule 5(3)(a) and (1) of Anti-Dumping Rules.
13. It is pleaded that the proceeding initiated by Designated Authority are void ab initio as caustic soda lye, caustic soda flakers, prills and granules have been taken as one product. We find that according to Rule 2(d), "like article" means an article which is identical or alike in all respects to article under investigation or being dumped in India or in the absence of such an article other article which although not alike in all respects but characteristics closely resembling those of articles under investigation. In the present case the application for imposing Anti-Dumping duty was in respect of Sodium Hydroxide commonly known as caustic soda. The goods produced by the domestic industry are like article to the goods produced, originating in or exported from the subject countries and both are used in interchangeably. Same technology is applied for production of caustic soda throughout the world.Therefore, irrespective of the form, the sodium hydroxide is one product and it has been correctly taken as one product by the Designated Authority. The investigation is for caustic soda falling under chapter 28 of the Customs Tariff Act. The sub-headings 28151101, 28151102 and 28151200 are for levy of customs duty. For the Anti-Dumping duty the form is immaterial as the Anti-Dumping duty was proposed on sodium hydroxide i.e. caustic soda irrespective of its form in the application filed by M/s AMAI on behalf of the domestic industry.
13.1 In the application for initiation of investigation it is clearly mentioned that the name of the product being dumped in the Indian market is sodium hydroxide generally known as caustic soda and chemically known as NaOH. It is an Inorganic Chemical classified under Chapter 28 of the Customs Tariff Act. Caustic Soda is a soapy, strongly alkaline odourless liquid widely Page 294 used in diverse industrial sectors, either as a raw material or as an auxiliary chemical. It is mainly produced in two form lye and solid, solids can be in the form of flakes, prills, granules or any other form. All forms of caustic soda are the subject matter of the present petition. Thus, it makes it clear that the application was for caustic soda in all the forms for imposition of Anti-Dumping duty. Therefore, the Designated Authority has correctly initiated the investigation in respect of caustic soda and correctly treated it as a like article as defined under Rule 2(d) of the Anti-Dumping Rules as the indigenous and imported goods are interchangeable and having same properties.
13.2 The Designated Authority has already given its finding for coming to the prima-facie conclusion that investigation is required to be initiated in the initiation notification dated 14th May, 2002 as already staged above. Thus, there was satisfaction of the Designated Authority for initiating the investigation based on the evidence produced by M/s AMAI representing the domestic industry. We find that in case of PIG Iron Mfrs. Association v. Designated Authority of the said decision it has been observed that "Rule 5 and 14 relate to initiation and termination of investigations. Rule 5(1) lays down that DA shall initiated an investigation "only upon" receipt of a written application by or on behalf of the domestic industry, except when the initiation is under Sub-rule 4 of Rule 5.
Sub-rule (3) of Rule 5 relates to requirement for support for initiation of investigation. RINIL had supported the levy at the early stage of proceedings. Therefore, the requirement for initiation had been met". In case of Commissioner of Income Tax v. Mittal Stainless Steel (P) Ltd. case, the Commissioner has not recorded any reason whatsoever for coming to the conclusion that the assessing officer was erroneous in deciding that the power subsidy was capital receipt.... The power of Commissioner under Section 263 of the Income Tax Act must be exercised on the basis of the material that was available to him when the exercised the power. At that time, there was no dispute that the issue whether the power subsidy should be treated as capital receipt had been concluded against the Revenue. The satisfaction of the Commissioner, therefore, was based on no material, either legal or factual which would have given him the jurisdiction to take action under Section 263 of the Income Tax Act." 13.3 We find that the above decisions are in no way supporting the appellant (NALCO) that Designated Authority has not applied his mind.
The application for initiation of investigation had furnished the sufficient information and evidence of dumping and therefore, the Designated Authority was correct in initiating the investigation as required under Rule 5 of the Rules.
14. It was claimed by M/s NALCO Ltd., that no notice for initiation of investigation was issued by the Designated Authority to NALCO. We find that the Designated Authority has forwarded copy of the public notice to all known importers (whose details were made available by the petitioner i.e. AMAI) of subject goods in India and advised them that to make their views known in writing within forty days from the date of issue of the letter in accordance with the Rule 6(2). The authority also provided a copy of petition to the known exporters and the Embassy of the subject countries in accordance with Rule 6(3). A copy of the non-confidential petition was also provided to other interested parties, wherever requested and questionnaire was sent to the importers/producers in accordance with the Rule 6(4) and this include M/s NALCO Ltd., Bhubaneswar, Orissa as is evident from para 1(v), (vi) and (xi) of preliminary findings. Therefore, the claim of M/s NALCO Ltd., that they were not given application for initiation of investigation is not correct. It can be given to those imports who request for the same in writing as required under proviso to Rule 6(3).
The Designated Authority received the response to the questionnaire/initiation notification, from three exporters and four-importers/user association. Information about injury was sought from the petitioners which was furnished by 11 manufacturing units. The Designated Authority kept available non-confidential version of evidence provided by various interested parties in the form of a public file maintaining by the authority and kept open for inspection by interested parties as per Rule 6(7) of the Rules.
15. The appellants have pleaded that during the course of investigation, the Designated Authority has not given them several non-confidential version of information and several papers were not kept in the public file. Non-availability of the information handicapped them to effectively represent their interest. It was argued that sever issues were raised by the appellants in their various letters addressed to the Designated Authority, but the Designated Authority in its preliminary findings or disclosure statement or the final finding has not given reasons how these were considered. If the Designated Authority was of the view that this information is not capable of being provided on a non-confidential basis in terms of Rule 7(3) of the Rules, it must disclose reasons for the same.
15.1 During hearing of appeal the non-confidential information was exchanged and all parties got the necessary information to present their case. However, it is necessary for us to bring to the notice of DA the issue of maintenance of proper public file by the Designated Authority. The Designated Authority is required to maintain the public file/files with file number/numbers in which all the responses from the interested parties importers/exporters should be kept and property page numbered arid indexed. Date of filing the document in the public file should be indicated in the index. When any interested party examines the public file a proper dated acknowledgment should be obtained so that the interested parties may not claim that they have not been provided with the information in the public file or the document was not available in the public file. These acknowledgements should be made available when the appeals against Page 296 the final finding of the Designated Authority come up for hearing in appeal before the Tribunal Where interested party wants copy of documents it should be allowed as per Rules. On confidentiality of documents, detailed guidelines have been given by this Tribunal in various decisions. The interested parties should not be denied the basis on which decision has been arrived at by the Designated Authority. Reasons cannot be confidential, only the data or figures which may harm the party Claiming confidentiality in their business dealings are to be kept confidential.
But the reasons for arriving at a conclusion or reason for accepting or rejecting my ground in the representation made by other interested parties cannot be the confidential and proper reasons for accepting or rejecting the point of view or the information furnished should be given by the Designated Authority in his order.
15.2 On the pleading that standard of confidentiality in accepting information from domestic industry and cooperating exporters not equally applied, we find that designated authority has to get complete information from domestic as well as cooperating exporters to reach to a conclusion. The disclosure of such information depends on the claim of supplier of information for keeping it confidential and such claim being accepted by D.A. This has been done by D.A. and no differentiation has been made. It was pleaded that the domestic industry has not furnished the complete information. The Designated Authority has also taken the imports from Korea as 12569 MT during POI, although these imports were made by NALCO, we find that the point raised by appellants is not correct. The Designated Authority has taken the imports from all exporters of Korea PR, which has taken place during the POI and the information which was furnished to other interested parties was in the indexed form either blocked or being business related information for which confidentiality was claimed.
Therefore, it was not necessary for Designated Authority to disclose the confidential information supplied to him by the domestic industry.
16. Taking France as surrogate country was not objected to by China.
There was no response from exporter from China except Chlor Shanghai Chemical Co. Ltd. They have not objected adopting France as surrogate country. The importer has no basis to contest this fact which is not being objected to by exporters of China whose business is effected by imposing anti-dumping duty.
17. The main duty of Designated Authority is to determine existence degree and effect of alleged dumping in relation to import of any article and to submit its finding provisionally or finally to the Central Government regarding normal value, export price and margin of dumping in relation to the article under investigation and the injury or threat of injury to an industry established in India or material retardation to the establishment of industry in India consequent upon imports of Such articles from specified countries and to recommend levy of Anti-dumping duty equal to the margin of dumping or less which if levied would remove the injury to the domestic industry and the date of commencement of such duty. For doing so, the Designated Authority has to determine the normal value export price and Page 297 margin of dumping and also to determine the injury to the domestic industry. It was pleaded before us by the domestic industry that in case of Hanwha Chemical Corporation the normal value and export price has not been correctly determined which has lead to non-imposition of duty on M/s Hanwha Chemical Corporation whereas M/s NALCO Ltd., and M/s Hindustan Lever Limited have pleaded that the Designated Authority has not correctly determined the non-injurious price and this has lead to imposition of higher Anti-Dumping duty on caustic soda. In order to find out whether the normal value export price and non injurious price has been correctly determined or not, we have to examine the legal provisions contained in Customs Tariff Act and Anti-Dumping Rules in respect of each of the factor.
18. According to explanation (c) to Section 9A(1) normal value in relation to an article means: (i) the comparable price, in the ordinary course of trade, for the like article when meant for consumption in the exporting country or territory as determined in accordance with the rules made under Sub-section (6); or (ii) when there are no sales of the like article in the ordinary course of trade 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 to an appropriate third country as determined in accordance with the rules made under Sub-section (6); or (b) the cost of production of the said article in the country of origin alongwith reasonable addition for administrative, selling and general costs, and for profits, as determined in accordance with the rules made under Sub-section (6).
18.1 M/s. Hanwha Chemical Corporation, Korea R.P. in their response to questionnaire submitted transaction-wise details of the domestic selling price for the POI. They claimed adjustment on the domestic sales on account of discount, inland freight inland insurance and other. The normal value has been determined on the basis of records kept by exporter for sale of product in the domestic market at ex-factory level in ordinary course of trade. For determining the normal value the Designated Authority has follower para 2(i) of Annexure-1 to the Anti-Dumping Rule where the volume of sales below per unit cost represent not less than 20 per cent volume sold in transaction under consideration is to be excluded for determining the normal value. During the POI the number of transactions were 20,000 and the transactions where the goods were sold below per unit cost were in all 1.96 per cent. The quantity of the goods sold was also not substantiated; therefore, the Designated Authority correctly did not remove these Page 298 transactions while arriving at the normal value.
Therefore, the plea of the domestic industry on this count is rejected.
During the period of investigation there were 20,000 transactions of sale in domestic area but transaction-wise freight has not been shown separately by the exporter M/s Hanwha Chemical Corporation. When details were called, M/s. Hanwha Chemical Corporation have enclosed details of inland freight paid during the POI month-wise. The D.A. has got verified each freight contract and ex-factory price was determined on the basis of records kept in accordance with the generally accepted accounting principal of exporting country and determined the normal value on the basis of price in ordinary course of sale when meant for consumption in the exporting country. The method adopted by Designated Authority is correct and does not require any modification. The plea that Designated Authority has called for freight information from M/s Hanwha Chemical Corporation and instead of supplying transaction-wise freight they supplied monthly figures of freight paid, hence, they should be taken as non-cooperate exporter cannot be accepted as they produced all records for verification.
19. It was contended before us that the export price has not been correctly determined in case of M/s Hanwha Chemical. We find that export price is defined under explanation (b) of Section 9A(1) of the Customs Tariff Act as under: (b) export price", in relation to an article, means the price of the article exported from the exporting country or territory and in cases where there is no export price or where the export price is unreliable because of association or a compensatory arrangement between the exporter and the importer or a third party, the export price may be constructed on the basis of the price at which the imported articles are first resold to an independent buyer or if the article is not resold to an independent buyer, or not resold in the condition as imported, on such reasonable basis as may be determined in accordance with the rules made under Sub-section (6); 19.1 In case of M/s Hanwha Chemical Corporation, caustic soda was ex sorted from Korea to India. The order for export was obtained by M/s Tricon who had filed the tender with M/s NALCO and whose tender was accepted. M/s Tricon for exporting caustic soda to M/s NALCO India placed order on M/s Hinwha Corporation to supply the goods to M/s NALCO and M/s Hanwha Corporal ion in turn obtained the goods from M/s Hanwha Chemical Corporation. We find that in this case the goods were exported from Korea to India irrespective of the that the tender was in the name of M/s Tricon, USA. Therefore, Designated Authority has to determine a definite CIF export price at which the goods were exported from Korea to India. When the CIF export price is available from Korea to India then it has to be taken as the export price. To reach the ex-factory export price, the deduction of ocean freight, ocean insurance, port charges, commission paid to the middleman namely M/s Hanwha Corporation and inland freight Page 299 and inland insurance, etc. has to be deducted to reach the ex-factory price for export. This has been done, therefore, there is no relevance of taking into consideration the SGA expanses of M/s Hanwha Corporation. We also find that deduction of $5 per DMT was also not permitted by the Designated Authority for caustic soda produced by diaphram technology as there is no difference in caustic soda when manufactured by membrain technology or diaphram technology. It is immaterial whether M/s Hanwha Chemical Corporation and M/s Hanwha Corporation were running in loss, we have only to see whether the export price has been correctly determined or not. We find that the Designated Authority in his final finding has observed that the authority for the purpose off final finding considered the adjustment as claimed by the customer on discount adjustment in terms of sale as per NALCO tender and adjustment of previous transaction sale to M/s Tricon. Thus addition of $4.57/MT was correctly done. Thus, Designated Authority has correctly determined the export price for caustic soda and it was normatted for other exporters from Korea. This normatted export price was taken and normal value was determined on the basis of published figures of domestic sale in Chlor Alkali Magazine.
The domestic industry has raised various points with regard to M/s Hanwha Chemical Corporation like insufficient/dismal disclosure, incorrect cost of production data, lack of information of affiliation, illegal adjustment of US $5 PMT claimed citing NALCO tender and issue of contract and physical export. The Designated Authority had examined and verified at the plant site corporate office of M/s Hanwha's Chemical Corporation relevant cost record, financial records and production records for determining the cost components, domestic sale price, export price, pricing policy and transfer pricing to M/s Tricon.
The English version of balance sheet was also prodded to domestic industry apart from other non-confidential information as and when asked for.
19.2 The Designated Authority has observe that the investigation is not NALCO's centric although NALCO consumes sizable quantity, but the consumption of NALCO just 6 to 7 per cent of Indian demand, therefore, the investigation covers all other of imports whether by NALCO or others.
20. For arriving at dumping in relation to an article the Designated Authority is required to make a fair comparison between the export price and the normal value. The comparison is required to be made at the same level of trade at ex-factory level, and in respect of sales made at as nearly possible the some time. Due allowance shall be made in each case on its merits for differences which affect price comparability including differences in conditions and terms of sale, taxation, level of trade, quantities, physical characteristics, and any other differences which are demonstrated to affect price comparability.
On the basis of this principle, the Designated Authority has compared the ex-factory export price and normal value and accordingly determined the margin of dumping for M/s Hanwha Chemical Corporation as - 4.2 per cent. For other producers and exporter of Korea, who have not co-operated, the dumping margin was determined on the basis of normatted export price and normal value was determined after allowing normal Page 300 deductions on the basis of domestic prices published in Chlor Alkali Magazine. Therefore, the margin of dumping for Hanwah Chemical Corporation is different from the margin of dumping for other non co-operative exporters from Korea PR 21. In determining whether injury to domestic industry was caused by the dumped imports, the Designated Authority is required to look into any known factors other than the dumped import, which at the same time are injuring the domestic industry and injury caused by these other factors must not be attributable to the dumped imports. The factor which may be relevant in this regard include, inter alia, the volume and prices of imports not sold at dumping prices, contraction in demand or changes in the patterns of consumption, trade restrictive practices of and competition be been the foreign and domestic producers, developments in technology and the export performance and the productivity of the domestic industry. It was argued that the Designated Authority should have also taken into account of the obsolete machinery and high electrical cost while determining the non-injurious price. We find that these factors have been taken into account by the Designated Authority while determining the non-injurious priced The technology which is being used is same throughout the world, therefore, it cannot be state that India is using obsolete machinery.
21.1 As discussed above, we have observed that in case of Hanwah Chemical Corporation cost has been correctly determined by the Designated Authority taking the chlorine as co-product and separating its manufacturing cost during the process of manufacture of caustic soda at the stage of separation of chlorine and caustic soda on the basis of the volume of production. The same principle should have been adopted by the Designated Authority in case of domestic industry.
Therefore, identical treatment was not given to domestic manufacturers and Hanwah Chemical Corporation.
22. While determining the non-injurious price for the like article for the domestic industry, the Designated Authority has used the actual verified cost of production of the subject goods to determine optimum cost of production for domestic industry taking into account the normatted base consumption norm of all the participating domestic industry and the actual price of raw material which are consumed for production of caustic soda during the period of investigation. We find that Cost Accounting Records (Caustic Soda) Rules 1967 as amended from 1999 provide for maintenance of proper books of accounts containing particulars in Schedule III and proforma "A" and "B" mentioned in the said schedule annexed to the rules relating to utilization of materials labour and other items of cost as far as these are applicable to caustic soda in any form. We find that during the POI, the cost of chlorine was varying and it has been treated as a bye-product by the Designated Authority. When cost of chlorine is substantial then it should not be taken as bye-product but it should be treated as a co-product Page 301 as per para 12 of Annexure-III to Cost Accounting Records (caustic soda) Rule 1967. In such a situation, DA should have apportioned the cost upto point of separation on reasonable and equitable basis. He should have taken caustic soda and chlorine as co-product and up to the stage of separation the common cost should have been allocated on the basis of volume of production. In case of M/s Hanwha Chemical Corporation the Designated Authority has done this.
Therefore, two different methods cannot be adopted for costing of the same product for comparison with cost of M/s Hanwha Chemical Corporation. A uniform practice should have been adopted for both.
22.1 It was also argued that the Designated Authority has erroneously taken 22 per cent of the capital investment of the domestic industry as profit for working out the non-injurious price. It was clarified for the DA that this has been taken on the basis of the standard adopted, and same standard is adopted in all other cages. No body will invest money for manufacture if one does not get reasonable profit on capital investment. No evidence was produced that margin of profit is unreasonable. Therefore, profit taken is reasonable.
22.2 We are, therefore, of the view that the non-injurious price was not correctly determined by the Designated Authority. In case of M/s.
Hanwah Chemical Corporation, the appellant had separated the cost of production between Caustic soda and Chlorine at the point of separation of the Chlorine and Caustic soda. The same principle should be applied for domestic industry for reasonable and equitable distribution of cost of production between chlorine and caustic soda. Since this has not be, en been done and this has lead to incorrect fixation of non-injurious price, and consequently anti-dumping duty.
23. We, therefore, set aside the impugned notification No. 142/2003-Cus dated 23rd September, 2003 and the final findings of the DA on non-injurious price and injury margin. We remand the case to the designated Authority for a fresh determination of non-injurious price and injury margin by reasonably and equitably distributing the cost of production between chlorine and caustic soda and issue final finding afresh on that basis in accordance with law and in the light of this judgment.
All the appeals and miscellaneous applications stand disposed of accordingly.