1. LEGAL PROVISIONS

 

Rule 17 of the Rules provides as follows:

 

Rule 17. Final findings. –

 

(1) The designated authority shall, within one year from the date of initiation of an investigation, determine as to whether or not the article under investigation is being dumped in India and submit to the Central Government its final finding –

 

(a) as to, -

    (i) the export price, normal value and the margin of dumping of the said article;

  (ii) whether import of the said article into India, in the case of imports from specified countries, causes or threatens material injury to any industry established in India or materially retards the establishment of any industry in India;

   (iii) a casual link, where applicable, between the dumped imports and injury;

   (iv) whether a retrospective levy is called for and if so, the reasons therefor and date of commencement of such retrospective levy:

 

   Provided that the Central Government may, in its discretion in special circumstances extend further the aforesaid period of one year by six months:

 

   Provided further that in those cases where the designated authority has suspended the investigation on the acceptance of a price undertaking as provided in rule 15 and subsequently resumes the same on violation of the terms of the said undertaking, the period for which investigation was kept under suspension shall not be taken into account while calculating the period of said one year,

 

(b) recommending the amount of duty which, if levied, would remove the injury where applicable, to the domestic industry after considering the principles laid down in the Annexure III to these rules.

 

(2) The final finding, if affirmative, shall contain all information on the matter of facts and law and reasons which have led to the conclusion and shall also contain information regarding:

   (i) the names of the suppliers, or when this is impracticable, the supplying countries involved;

   (ii) a description of the product which is sufficient for customs purposes;

  (iii) the margins of dumping established and a full explanation of the reasons for the methodology used in the establishment and comparison of the export price and the normal value;

   (iv) Considerations relevant to the injury determination; and

   (v) the main reasons leading to the determination.

 

(3) The designated authority shall determine an individual margin of dumping for each known exporter or producer concerned of the article under investigation:

 

Provided that in cases where the number of exporters, producers, importers or types of articles involved are so large as to make such determination impracticable, it may limit its findings either to a reasonable number of interested parties or articles by using statistically valid samples based on information available at the time of selection, or to the largest percentage of  the  volume  of  the  exports  from  the  country  in  question  which   can reasonably be investigated, and  any  selection,  of  exporters,  producers, or types of articles, made under this proviso shall preferably be made in consultation with and with the consent of the exporters, producers or importers concerned:

 

Provided further that the designated authority shall, determine an individual margin of dumping for any exporter or producer, though not selected initially, who submit necessary information in time, except where the number of exporters or producers are so large that individual examination would be unduly burdensome and prevent the timely completion of the investigation. 

 

(4) The designated authority shall issue a public notice recording its final findings.

 

2. OPERATING PRACTICES

 

The Final Findings should be issued as per the timelines indicated in Circular No.2 dated 27.2.2018 and revised vide O.M. No.4/7/2018 dated 12.4.2018, annexed herewith.

 

Time Period: Rule 17(1) of Anti-Dumping Rules provide that the Final Findings must be issued within one year from the date of initiation. The time limit can be extended further by 6 months under special circumstances as provided under the proviso to Rule 17(1). For an extension, a written request giving details, reasons and sufficient grounds should be submitted to Department of Revenue, Ministry of Finance. The request for extension should be made prior to the expiry of due date of issuance of Final Finding.

 

The power of granting extension of time beyond twelve months is a discretionary power of Department of Revenue, Government of India. Thus, only in special circumstances, can a request be made to Central Government for the extension of the date of issuance of the Final Finding. Some of the situations where extension can become inevitable are: change in the Director General (Designated Authority), where there has been a judicial order demanding repeat of the oral hearing4 or where the Hon’be Court/Tribunal has intervened.

 

The Final Finding notification must contain all the earlier facts plus all the comments received after issuance of Disclosure Statement and the examination of the same by the Authority to form the final recommendations. It must be ensured that all the issues raised by various interested parties are duly recorded and addressed appropriately in the Final Finding Notification.

 

The Final Finding notification is not a replica of the Disclosure Statement. It contains the contents of the Disclosure Statement and post disclosure comments. The comments which contain issues that have already been addressed may not be re-examined.

 

The Final Finding notification should contain the conclusion on dumping and injury, Indian Industry’s interest and categorical recommendations supported with reasons. The recommendations could be in the form of termination of the investigation or imposition of duty on the basis of Lesser Duty Rule. It may be added here that the application of lesser duty rules means the comparison of injury margin with the corresponding dumping margin and the lesser of the two is taken as the basis for recommendation of quantum of duty.

 

The duty should be recommended for each co-operative producer6. Their responses should be verified to confirm that the respective producer exporter have submitted valid responses as explained earlier in Chapter 12, 13 and 14. It may be added that while 100% information with regard to exports through related exporters/traders is necessary, in case of the unrelated exporters, if the response constitutes less than 70% of the total volume of exports to India by the respective Producer, then the responding producer may be considered non-co-operative and entire response is liable to be rejected.

 

A residual duty margin must be indicated for non-co-operative and/or non- responding producers/exporters for each of the subject country under investigation.

 

Wherever, it is found that a co-operative producer exporter is not indulging in dumping or injury, “zero” duty should be mentioned against it in the duty table. Further, when it is determined that imports from any of the subject country are not causing dumping or injury to the domestic industry at all or are below de minimus, then the said country should not be included in the duty table and it should be clearly stated that investigation is being terminated against the said country.

 

It may be added here that any exporter whose margin of dumping is less than 2% of the export price shall be excluded from the purview of ADD even if dumping, injury as well as the causal link are established. Further, investigations against any country are required to be terminated if the volume of the dumped imports from a particular country is found to be below 3% of the total imports. However, countries whose volume of imports individually is less than 3% of total imports but cumulatively account for more than 7%, imports from all those countries may be cumulated while determining injury.

 

Since no Customs Notification is generally issued in case of termination of investigations, the final findings must include a paragraph in case of termination of investigations, specifying that the appeal against these findings lies in CESTAT, the Hon’ble Delhi High Court has given a ruling in this regard in Jindal Polyfilm Ltd. v. Designated Authority in W.P. (Civil) No. 8202/2017.

 

The recommendation of duty in the Final Finding notification should be indicated in the duty table indicating details regarding Tariff/ HS Code, description of PUC, specification, country of origin and/or export, producer, amount of duty and unit of measurement. The format of duty table is as below:

 

Duty Table
Sl. No	Tariff code	Description of Goods	Specifi- cation	Country of Origin and/or export	Pro- ducer	Duty Amount	UOM
(1)	(2)	(3)	(4)	(5)	(6)	(7)	(8)

 

The HS Codes must be specifically checked and re-checked in the duty table. Further, it may be mentioned at the end of the table that HS Codes (Custom classification) is only indicative and the determination of the duty shall be made as per the description of goods at the time of importation.

 

It shall also be mentioned that the specific duty rates mentioned above against each of the cooperative producers are for the goods produced by the respective producers in their own manufacturing facility. In case of trading by the named producers, the duty at residual rate shall be applied. Therefore, Customs should verify the fact of goods manufactured by the producer named above.

 

3. FORMS/TYPES  OF DUTIES

 

The Anti-Dumping duties imposed after the investigation can be expressed either on fixed basis, ad valorem or reference price basis. Specific/fixed duty is levied as a fixed monetary amount per unit of the PUC imported. Ad valorem duty is levied as a percentage of the value of the PUC imported. Under the reference price method, a reference price is fixed and the duty would be the difference between the landed value and the said reference price. If the landed value exceeds the reference price, no duty shall be payable.

 

The type of duty recommended in the final findings depends on facts, circumstances and merit of each case. The team should discuss with the Designated Authority by putting forward all the facts and reasons for different types of duties and seek approval for the imposition of a specific type of duty in each case.

 

Fixed Duties:

 

Fixed duty is appropriate in case of a homogenous PUC without wide variation in prices or where various PCNs are not showing steep price variations, as reflected in import price data and the NSR of the domestic industry.

 

Fixed Duty is also appropriate in circumstances where the subject goods are susceptible to undervaluation or manipulation of prices or there is likelihood of circumvention of duties.

 

As the duties are generally imposed for 5 years, the effect of a fixed duty diminishes in a market where prices are ascending over period while effect increases in a market where prices descend. Fixed duty may result in requests for reviews from either the Domestic Industry (in case of a rising market) or other interested parties (in case of a falling market).

 

A fixed duty may not be desirable where the Product under Consideration has a large number of variants in terms of their prices as the lower price variant will have a higher incidence of effective and vice versa for higher price variant. For example, if the anti-dumping duty is USD 200 per MT on different variants ranging from USD 1000 to USD 2000 per MT. In such a case, the effective impact on Variant A will be 20% while on Variant B, it will be only 10%. This impact may be unintended from the Authority’s point of view.

 

The Authority has to take a decision based on merit after taking into consideration the above mentioned factors for each case and also taking into account the effect of duty on the user industry.

 

If the fixed duty is recommended, then it should be preferably in US$ terms as it will protect the domestic industry from rupee depreciation also.

 

Ad Valorem Duties:

 

Ad Valorem duties are more appropriate where there are many grades or types within the PUC or there is a considerable price variation within the scope of the Product under Consideration or PCNs. Under this method, the lower as well as higher price goods bear the same level of effective duties over the entire period of imposition of ADD.

 

Ad valorem duty is not desirable if the subject goods are susceptible to undervaluation or manipulation of prices or there is likelihood of circumvention of duties. In fact, ad valorem duty can induce errant importers to indulge in under invoicing of imports.

 

Reference Price based Duty:

 

This duty is more appropriate when the Authority is convinced that there is a need to protect the interests of the downstream industry while taking care of the concerned Domestic Industry. Sometimes, the Reference Price may need to be recommended when the user industry imports specific grades of PUC, which is not available in the country or DI is manufacturing only certain price range of goods but the same cannot be distinguished as a separate product. Reference Price in such cases ensures fair selling prices for the domestic industry for the PUC.

 

This form of duty may not lead to price increases in imports if they are being imported at fair prices.

 

This form of duty acts as a disincentive for the exporters to decrease their prices as the decrease in the landed value would correspondingly increase the applicable anti-dumping duty.

 

It suffers from the possibility of abuse where the unscrupulous exporters/ importers may artificially increase their prices to avoid the anti-dumping duties but resell in the Indian market at lower prices, thus creating false import data base.

 

It is not desirable where major raw materials are liable to significant price fluctuations. For instance, it is possible that the import prices rise mainly on account of the fact that the price of the principal raw material has gone up. In such a case, the Domestic Industry may not be effectively protected as the rise in the raw material prices will also increase their costs. Conversely, if the price of the principal raw material have declined, then domestic industry gets extra protection and exporters/importers get unnecessarily penalized even though they may not be indulging in dumping or causing injury.

 

This form of duty suffers from the vice of being inflexible inasmuch as this duty becomes ineffective in a rising market and overly protective perhaps punitive in a falling market.

 

This form of duty may not suit the situation where there are many grades or types of the subject goods with significantly different prices.

 

Period of Duty Recommended

 

The provision indicates that maximum validity of the duty at one instance in an original investigation could be 5 years, however, minimum time period of validity is not mentioned.

 

It is the practice of the Directorate to normally recommend duty for 5 years, however, there have been few cases where duty was recommended for less than 5 years.

 

In case of Sunset Review Investigation, the provision clearly provides imposition of duty for further period of 5 years, therefore extension should be done for 5 years only.

 

In case of Mid-Term Review Investigation and Anti-Circumvention investigation, the recommendations are co terminus with the validity of duties in the original notification.

 

4. APPEAL PROVISION

 

The last paragraph of the final finding notification, should mention the appeal provision. It should be stated that “an appeal against the order of the Central Government arising out a Final Finding shall lie before the Customs, Excise and Service Tax Appellate Tribunal in accordance with the Customs Tariff Act”. The appeal provision is available pursuant to the decision of Delhi High Court8 in those cases also where the Authority recommends termination of investigation.

 

5. TERMINATION  OF INVESTIGATION

 

Rule 14 of the Rules provides as follows:

 

The designated authority shall, by issue of a public notice, terminate an investigation immediately if:

 

(a) it receives a request in writing for doing so from or on behalf of the domestic industry affected, at whose instance the investigation was initiated;

 

(b) it is satisfied in the course of an investigation, that there is not sufficient evidence of dumping or, where applicable, injury to justify the continuation of the investigation;

 

(c) it determines that the margin of dumping is less than two per cent of the export price;

 

(d) it determines that the volume of the dumped imports, actual or potential, from a particular country accounts for less than three per cent of the imports of the like product, unless, the countries which individually account for less than three per cent of the imports of the like product, collectively account for more than seven per cent of the import of the like product; or

 

(e) it determines that the injury where applicable, is negligible.

 

The conditions mentioned in Rule 14 are applicable for an original investigation.

 

6. NOTIFICATION

 

The Final Finding has two versions, confidential and non-confidential. The Final Findings have to be translated in Hindi as it is mandatorily to be issued bilingual in English and Hindi. All the Final Finding notifications have to be signed by the Director General of Trade Remedies in original. The confidential version is for the records of the Directorate. Two copies of non-confidential version in Hindi and three copies of non-confidential version in English should be prepared for signatures of DG.

 

One set of Non-Confidential Version of Final Finding Notification in English and Hindi signed in original are required to be sent to the government press on the same day it is approved and signed by DG, alongwith a soft copy by email. As soon as the notification is accepted by the Government Press, NCVersion in English is to be sent to the Ministry of Finance with a DO letter from DG requesting TRU to take further necessary action. Thereafter, Final Finding notification must be uploaded on the DGTR website.

 

Source: Manual Of Operating Practices For Trade Remedy Investigations