1. The appellant - importer has challenged the final findings dated 4.2.2003 by the Designated Authority and the impugned notification issued on 1.5.2003 under Section 9A(1) of the Customs Tariff Act imposing anti-dumping duty and has prayed for annulling the final findings and the notification imposing duties and seeking modification of the notification to the extent of the products manufactured by the domestic industry or to vary the anti-dumping duty corresponding to the different categories and grades.
2. On 6.8.2001, the designated authority initiated the investigation on the basis of the petition filed by M/s. SPL Ceramics Ltd., M/s. H&R Johnson India Ltd. and M/s. Murudeshwar Ceramics Ltd. The designated authority notified its preliminary findings by notification dated 3.12.2001 with regard to anti-dumping investigations concerning imports of vitrified/porcelain tiles originating in or exported from China PR and UAE. Public hearing was held on 2.7.2002 to hear the interested parties. The authority made the public file available to all interested parties containing non-confidential version of the evidence submitted by various interested parties for inspection upon their request.
Disclosure of essential facts, as required by Rule 16 of the Customs Tariff (Identification, Assessment and Collection of Anti-Dumping Duties on Dumped Articles and for Determination of Injury) Rules 1995, was made on 17.12.2003. In its final findings, the authority concluded that, vitrified/porcelain tiles were exported to India from UAE and China PR below its normal value resulting in dumping, the Indian industry had suffered material injury, and that the injury had been caused cumulatively by the imports from the subject countries.
3. It has been argued by the learned advocate appearing for the appellant that the basis of the imposition of anti-dumping duty on the imported product is faulty. It was submitted that when the provisional anti-dumping duty was imposed, it was on a variable form of duty and when the final duty was imposed it was in the form of fixed Antidumping duty. It is the contention that change in the form of imposition of duty has put the importer appellant in a great disadvantage. He further submits that the authority should have granted an opportunity to the importer appellant to put forth his views on changing of the form of levy of duty, as no reasons were provided for change of the imposition of duty by the authority in the final findings. It was also submitted that due to change from variable to fixed, if imports are at a higher rate then the importer has to pay a higher anti-dumping duty. It was argued that the authority while imposing the anti-dumping duty has not considered the necessity to look into the proper description of article imported into India, and the petition of the Domestic Industry also did not give proper description of the article. It was argued that the appellant importer has cooperated in the investigation, and there was no evidence placed in the public file regarding the specific sizes of the tiles on which antidumping duty is to be imposed. It is also contended that the importer appellant has imported of vitrified tiles of the sizes which were not manufactured by the Domestic Producers and the objections raised on commercial and technical points by them were overlooked by the Designated Authority. It was submitted that the final findings of the Designated Authority was flawed as the article "Mosaic Tiles", which was not under consideration, was also taken into account for calculating the dumping margin and subsequent calculation of the injury. It was argued that if the data of importation of the Mosaic Tiles is excluded from the total imports of the product under consideration, then there will be no dumping. It was submitted that the scheme of anti-dumping duty warrants that there should be a definitive duty.
4. The learned Advocate appearing on behalf of respondent - Domestic Industry submits that the Designated Authority has correctly imposed the anti-dumping duty on the product under consideration for the reason that the vitrified tiles are easily substitutable vis-a-vis Domestic Industry's product i.e. vitrified tiles. It was submitted that the appellant importer has not responded to the importer's questionnaire issued to him by the Designated Authority and hence all the arguments now raised are belated. It was submitted that since no importer had cooperated, the Designated Authority had no option but to work out the normal value and injury margin on the best available information placed before him. It was argued that the imposition of the variable duty at the time of preliminary findings and changing the same to fixed duty is not arbitrary, as the Designated Authority has the option to change the type of duty and the importer has to show that he is prejudiced which was not shown in this case. It was submitted that the Designated Authority has to grapple with the imposition of the duty as a product which is of multiple variation depending upon the patterns, sizes, hence the change of duty form from variable to fixed is right and unassailable.
5. The learned Advocate appearing for the Designated Authority submits that the Designated Authority has taken in to account the different types, patterns and sizes of the tiles while coming to final findings.
It was also argued that the Designated Authority has changed the duty form from variable to fixed on the A.D.D. is always based on the injury margin and Dumping Margin. It was submitted that, some importers have, themselves suggested that change of imposition of A.D.D. from variable to fixed type. It was also submitted, that, the Designated Authority has during the course of investigation has himself not considered the importation of the mosaic tiles and all the importation data has been excluded while arriving at the final findings of dumping.
6.1 The controversy centers around the question whether the goods imported by the appellants would get covered for imposition of Anti-Dumping Duty as per the final finding of the Designated Authority and subsequent imposition of Anti Dumping Duty vide notification dated 1st May, 2003.
6.2 The appellants importer imports vitrified/porcelain tiles. The Designated Authority on the petition of Domestic Industry initiated investigation in respect of "unglazed tiles in polished or unpolished finish and glazed porcelain/ceramic tiles both with less than 3% water absorption. (commonly known as vitrified/porcelain tiles)". The D.A.recommended the Anti Dumping Duty after following the elaborate procedure as contained in the provisions and Rules.
6.3 The question which arises in this case is whether the Designated Authority has followed the provision of Customs Tariff (Identification, Assessment and Collection of Anti Dumping Duty on Dumped Articles And for Determination of Inturn) Rules, 1995 (for brevity sake henceforth referred to as ADD Rules).
6.4 As per the provisions of the ADD Rules the Designated Authority has to first identify the article liable for anti-dumping duty. In this case the Designated Authority has identified the "vitrified/porcelain tiles" as article liable for anti-dumping duty. It is also not in dispute that the vitrified/porcelain tiles come in different sizes/colours/types and patterns. The vitrified/porcelain tiles would have different patterns and colour shades depending upon the market demand. To arrive at a conclusion whether different types/sizes of vitrified/porcelain tiles have been dumped or not, was a difficult task for the Designated Authority. Visualizing this kind of situation may arise, the ADD Rules have provisions under Rule 2(d) in respect of 'like articles'. The definition under Rule 2(d) of the Rules is extracted below: 2(d) 'like article' means an article which identical or alike in all respect to the article under investigation for being dumped in India or in the absence of such an article, another article which although not alike in all respects, has characteristics closely resembling those of the articles under investigation.
From the above definition it can be seen that for imposing ADD the Designated Authority has to arrive at a conclusion that the article has to be identical or alike in all respects. In the case of vitrified/porcelain tiles it will be difficult for the authority to arrive at such conclusion, for the simple reason that vitrified/porcelain tiles come in different sizes, shades, types and patterns. Hence the Designated Authority had to rely upon the second limb of the definition which talks about the characteristics closely resembling those of articles under investigation.
6.5 The products imported by the appellant in this case are vitrified/porcelain tiles of different sizes. It cannot be said that because of the difference in size and patterns, the products imported by the appellant would not get covered under the category vitrified/porcelain tiles. The products which are imported are closely resembling the characteristics of those articles on which anti-dumping duty is sought to be imposed.
6.6. Under the scheme of the imposition of Anti Dumping Duty, the Designated Authority is required to determine whether the dumped products caused injury to the Domestic Industry. In this case it is evident that the products imported by the appellants can be substituted for the products manufactured by the Domestic Industries. The imported products viz. 2' x 2' vitrified/porcelain tiles can definitely replace the 1' x 1' vitrified/porcelain tiles manufactured by the Domestic Industry, in as much as the user will prefer to use the dumped low cost imported tiles of a bigger size to substitute his requirement of tiles of smaller size. The dumped imports of vitrified/porcelain tiles would be an efficient substitute for the vitrified/porcelain tiles manufactured by the D.I. A consumer would readily compromise on the size/pattern of tiles as long as it satisfies his need for vitrified/porcelain tiles. The products imported by the appellant would technically substitute the D.I's product of vitrified/porcelain tiles and commercially also the product imported would substitute the D.I.'s products. When there is a variety of grades available in vitrified/porcelain tiles, that would in itself, give a leverage to the consumer to substitute from one type/size/pattern to another type/size/pattern of vitrified/porcelain tiles. In technical terms a vitrified/porcelain tile of 1000 X 1000 mm will equivalent to four vitrified/porcelain tiles of size of 500 x 500 mm but the price of the 1000 x 1000 mm tiles will not be the price of four tiles of 500 x 500 mm. It would be lesser than the price of the four tiles of smaller size. Hence technically and commercially the dumped imports of different sizes may substitute the vitrified/porcelain tiles manufactured by D.I., even though the D.I. may not manufacture the particular size of tile which is dumped.
6.7. Since in this case the product under consideration has different varieties and different grades, the fixation of the different A.D.D.would be difficult and is likely to fail. As the product under consideration are known in the market in which they are traded with reference to the area covered by them i.e. per Sq. m., the imposition of anti-dumping duty on per Sq. m. basis is appropriate.
6.8. The Anti-dumping duty is recommended by the Designated Authority based on the referral price which it arrived at after considering the non-injurious price and dumping margin. During the course of preliminary investigation the authority would not have complete data from the importer or exporter and hence on the provisional finding that the products are dumped, the authority imposes Provisional Anti-dumping duty. In this case Anti Dumping Duty imposed is of variable nature based upon the referral price arrived at by the Designated Authority in the preliminary findings. On completion of the investigation it was found that the price variation per Sq. m. in the articles dumped depended upon the difference in size/grades. A single referral price for different sizes/grades vitrified/porcelain tiles would result in non-attraction of Anti-dumping duty to the articles which are imported above the referral price, even if dumped and Anti-dumping duty get attracted to the articles which are not dumped, but, imported at a lower price then the referral price. This situation could have created a dichotomy on the imposition of Anti Dumping Duty which was best avoidable. Where per unit price of the article varies depending upon the sizes/types/patterns, it would be more reasonable to fix the Antidumping duty on fixed basis. In this case the authority has done so in the final findings. Since the scheme of the Anti-dumping duty warrants that the injury caused to D.I. due to dumped imports be removed, it was well within the powers of the Designated Authority to recommend the provisional Anti-dumping duty on variable basis and change the same to fixed Anti-dumping duty at the time of final findings.
7. It is also noticed from the file produced before us that the Designated Authority has excluded the data of importation of the 'mosaic tiles' while arriving at the injury analysis and the appellants submission that the final findings are flawed due to this also fails.
For the foregoing reasons, the contentions raised on behalf of the appellants against the impugned notification are misconceived and cannot be accepted. The appeal is, therefore, dismissed.