At, Customs Excise Service Tax Appellate Tribunal Principal Bench New Delhi
By, THE HONORABLE JUSTICE: DR. SATISH CHANDRA (PRESIDENT)
By, THE HONORABLE JUSTICE: S.K. MOHANTY
By, MEMBER AND THE HONORABLE JUSTICE: B. RAVICHANDRAN
For Petitioner: S. Seetharaman, Advocate And For Respondents: Ameet Singh, Albeenawali, Advocate and R.K. Majhi, Authorized Representative (DR)
1. These two appeals are by domestic producers of "colour coated/pre-painted flat products of alloy or non-alloy steel" in India (DI). The appellants are against final finding dated 30/08/2017 of the Designated Authority, Directorate General of Anti Dumping and Allied Duties (DA), Ministry of Commerce and Notification No. 49/2017-CUS (ADD) dated 17/10/2017 of Ministry of Finance imposing definitive Anti Dumping duty on "colour coated/pre-painted flat products of alloy or non-alloy steel" (subject goods) originating in or exported from China PR and EU. The appellants while supporting the imposition of AD duty contested the quantification of such duty.
2. The brief facts of the case are that both the appellants have jointly filed an application before the DA for initiation of anti dumping investigation concerning import of subject goods from China and EU. The DA issued Public Notification dated 29/06/2016 initiating anti dumping investigation. Preliminary findings were issued on 20/10/2016 recommending provisional anti dumping duty. The DA followed the procedure as stipulated under Customs Tariff (Identification, Assessment and Collection of Anti Dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995 and issued his final findings on 30/08/2017 recommending anti dumping duty on such imports. Accepting the said recommendations, Notification No. 49/2017-CUS (ADD) dated 17/10/2017 was issued by the Ministry of Finance imposing definitive anti dumping duty on the import of subject goods from the specified countries. The AD duty was to be fixed based on the reference landed value of the subject goods.
3. The learned Counsel appearing for both the appellants submitted that they have two main grievances against the impugned findings. The first one is with reference to fixation of non-injurious price (NIP) for domestic manufacturers. He submitted that JSW Steel are procuring raw material, HR Coil from their sister concern. Instead of arriving at the price of raw material by cost method, the DA followed transfer price as the basis. For M/s. Essar Steel India Ltd. the return on capital employed was not properly calculated. A number of exclusions of value of fixed assets were made without authority of law. Exclusion of interest cost before commercial production is not proper. Similarly, trial run expenditure and factors due to foreign exchange fluctuation have not been considered by the DA. The learned Counsel submitted that accounting standards as prescribed have not been followed for arriving at NIP. M/s. Essar had two plants - one gas based and another coal based. While the parameters for coal based plant were fully taken, for gas based plant, the DA incorrectly considered only reduced capital assets.
4. The second grievance of the appellant is with reference to quantification and method of determining the AD duty imposable on the subject goods. The learned Counsel submitted that AD duty should have been fixed on absolute terms without any reference value. He referred to the representatives made in this regard. The particulars of coking coal/met coke had increased substantially affecting the DI. The analysis of the DA in this regard is not proper and specific. No reasons were recorded for rejecting the concerns of the DI with reference to improper fixation of NIP and AD duty.
5. The learned Counsel for DA supported the findings recorded by the DA. While recommending the imposition of AD duty, he submitted that the DA followed the pricing of the raw material as it was done in cold rolled steel case resulting in final finding dated 10/09/2017. The DA in that case used transfer price, being a market price, for HR coils as input cost for CR coils manufactured by JSCPL. As such, JSCPL who did not challenge the said finding cannot challenge the method in the present proceedings.
6. Regarding grievance of M/s. Essar, it is submitted that in the final finding dated 10/04/2017 similar methodology was followed to arrive at the details regarding capital employed. In that case M/s. Essar did not contest the findings on these grounds. It is not open to them to raise such issue in the present proceedings.
7. Regarding expenses relating to finance charges, trial run expenditure and foreign exchange fluctuation, it is submitted that these are for earlier period and are in the nature of revenue expenses and were not allowed as part of capital employed. Finally, the learned Counsel for DA submitted that the quantum and method to impose AD duty is based on various factors and as long as the injury of the DI is addressed, the fixation of AD duty linked to a reference landed value cannot be contested. Such recommendations, including for steel products produced by the same appellant, have been made in the past also.
8. The learned AR for Revenue supported the findings of the DA and the customs notification imposing AD duty.
9. We have heard all the sides and perused the appeal record. The appellants are DI engaged in the production of subject goods. Regarding the valuation of raw material used by JSCPL, we note that the very same basis of adopting transfer price, being price for the raw material, has been followed by the DA in the appellant's own case in respect of cold rolled steel, subject matter of final finding dated 10/04/2017. No grievance or contest was raised against such method. Even otherwise, when there is an available admitted transfer price as a market price, we find no reason for the DA not to consider the same. In fact, we note that JSCPL is a separate legal entity though a subsidiary of JSW. The actual purchase cost (market price) of the raw material, as per the books of accounts maintained by the appellant, were considered for calculating NIP. We also note that in terms of para (iii) of Annexure III of AD Rules, the data of the Domestic Industry is to be used to calculate NIP. The DA has used the input cost data of JSCPL as per the books of accounts to compute NIP. The contention that the cost of production of JSW for manufacture of HR coil to calculate NIP for JSCPL is not in line with requirements of Annexure III to AD rules. JSW is not a part of DI in the present case.
10. Regarding the appeal by M/s. Essar, we note that for arriving at the capital employed, the DA followed the very same methodology in the earlier investigation dated 10/04/2017. The same was not contested by the appellant. We also note that the value of plant and machinery increased significantly without any increase in installed capacity. No valid reason was provided by the appellant in this regard. The data submitted by M/s. Essar vide their letters dated 20/03/2017 and 21/03/2017 pertain to three years only. The DA had noted that the said issue of abnormal expense appears to be for the earlier period also. We have also taken note of the submission made by the learned Counsel for DA with reference to trial run expenditure, interest charges, foreign exchange fluctuation etc. were in the nature of revenue expenses and were not allowed as part of capital employed. As such, we find no merit in the submissions made by the appellant.
11. The appellants were also aggrieved by fixation of AD duty linking it to a reference landed value of the subject goods at the time of import. We find no infirmity in such course of actio
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n. There is no mandate either in terms of WTO agreement or AD rules for the DA to recommend AD duty in a particular form. The DA will consider the facts and circumstances of each case during the course of investigation and recommend the AD duty accordingly. This can be based on reference price or fixed duty or ad-valorem. We also note that fixing AD duty based on reference landed value is one of the accepted method which has been followed in the past including for various steel products produced by the same appellants. As such, we find no merit in the appeals on this ground also. 12. In view of the above discussion and analysis, we find no merit in these appeals. Accordingly, the appeals are dismissed. The miscellaneous applications filed for amending the memo of parties is accepted and duly incorporated.