The Customs, Excise and Service Tax Appellate Tribunal has, in judgement dated 5th August, 2002, upheld the findings issued by the Designated Authority in the new shipper review concerning anti-dumping duty on imports of “Melamine‟ originating or exported from China PR. The appeal had been filed by the Chinese producer, Kuitun Jinjiang Chemical Industry Co. Ltd. (“Kuitun”) and exporter, Foshan Kaisino Building Material (“Foshan”). The decision of the Tribunal has come in favour of the domestic industry, which was represented by Mr. Rajesh Sharma and Ms. Anoushka Singh from TPM Consultants. The case was argued by Ms. Reena Khair.
The facts leading to the appeal were that the Designated Authority had recommended imposition of anti-dumping duties on imports of melamine from China PR. The said duties were continuing since 2004 and were exporter-specific. Since Kuitun and Foshan were not exporting the product during the earlier investigations, they requested the Designated Authority to now accord an exporter-specific duty to them for future exports. Since China PR was considered a non-market economy, normal value could not be determined on the basis of the domestic prices in China PR. However, while the exporter did not suggest an appropriate basis for determination of normal value, the domestic industry suggested that the price of exports from Qatar may be considered in this regard. The Designated Authority, after examining the appropriateness of the claim of the domestic industry, accepted its claim and normal value was determined accordingly. On the basis of the same, the Designated Authority recommended anti-dumping duty of USD 319 per MT, for the Kuitun and Foshan. The said findings of the Designated Authority were challenged by the exporters before the Tribunal.
The Tribunal, in its final order, noted with regard to the contentions raised by the exporter as under:
- The exporter contended that final findings have been issued in violation of principle of natural justice as the fact that Qatar was selected as the surrogate country was disclosed by the Designated Authority for the first time in the Disclosure Statement. The exporter claimed that the surrogate country should have been selected at the stage of initiation itself, and the exporter should have been provided a hearing. The Tribunal held that the exporter should have itself informed the Designated Authority at the initiation stage, as to on what basis they are claiming normal value. The Tribunal emphasized that the burden for providing evidence regarding determination of normal value rested with the exporter. Since the exporter had failed to discharge this burden, its contention could not be accepted.
- The exporter contended that Qatar cannot be considered as an appropriate surrogate country for China PR, as it is not comparable to China PR in terms of having the “same level of development”. The Tribunal held that the level of development would be relevant only if the domestic sale price or cost of production of a market economy third country is adopted, since the level of development affects the price and cost. The price in international trade is a function of demand and supply in the international market and it is not affected by the level of development of the supplier country. The price to India is, therefore, the price meant for consumption in the Indian market. Thus, the relevant consideration is the volume of exports and that the country concerned should not be dumping during the period of investigation, since these parameters will affect the price comparability in the Indian market.
- Regarding the contention of the producer / exporter that the Designated Authority had erred in determining the export price on the basis of data provided by the producer, instead of the exporter; the Tribunal held that the exporter had substantially raised the price of the subject goods in order to reduce the anti-dumping duty. The ex-factory price of the producer would, therefore, be relevant for determination of export price.
Accordingly, the Tribunal found that there was no merit in the arguments of the producer / exporter, and dismissed the appeals filed.