spacer.gifsto247.gifspacer.gif Date of filing of ST-3 returns extended - returns for April to June, 2012 to be filed by 25th November, 2012 only.spacer.gifsto247.gifspacer.gif BREAKING NEWS : Service Tax half yearly ST-3 return to cover period from April, 2012 to June, 2012 only (ST Notification 47/2012)spacer.gifsto247.gifspacer.gif All Service Tax assessees are informed that they will not be able to file ST 3 returns in ACES now and have to wait until the modified version of ST 3 Form which is made available in a few weeks on aces.spacer.gifsto247.gifspacer.gif Penalty: Section 76: No delay in depositing service tax with Revenue: Penalty not imposable.spacer.gifsto247.gifspacer.gif Refund: Export of Services: Terminal Handling Charges also a port service.spacer.gifsto247.gifspacer.gif Penalty: Once the entire demand is set aside by Commissioner (A) and that order is not challenged by the department: Commissioner cannot impose penalty under Section 76 by passing a Review Order: Penalty set aside.spacer.gifsto247.gifspacer.gif Cargo Handling Service: The activity of transportation and stacking within the stockyard premises not covered: Demand set aside.spacer.gifsto247.gifspacer.gif Finance Act, 2012spacer.gifsto247.gifspacer.gifDefinitions introduced in Section 65C, Section 66B (Charge of Service Tax), Section 66C (Determination of Place of Provision of Service), Section 66D (Negative List), Section 66E (Declared Services), Section 66F (Bundled Services), Amendment to Section 67 (omitting of Explanation, Amendment to Section 68 (sharing of taxes between provider and receiver) would operate from 01.07.2012.spacer.gifsto247.gifspacer.gifThe notifications amending Cenvat Credit Rules, Valuation Rules, Service Tax Rules, Works Contract Composition Scheme have not been issued.spacer.gifsto247.gifspacer.gifSection 65, 65A, 66 & 66A would cease to operate from 01.06.2012spacer.gifsto247.gifspacer.gifThe clause (A), (B), (D) & (E) of Section 143 of the Finance Act,2012 will come into force from 01.06.2012 as per Notification No.18/2012 dated 01.06.2012spacer.gifsto247.gifspacer.gifNegative list based service tax will come into force from 1st july 2012spacer.gifsto247.gifspacer.gifFinance Bill, 2012; gets enacted on May 28, 2012 : Finance Act (No 23 of 2012)spacer.gifsto247.gifspacer.gif Aam aadmi becomes khaas aadmi spacer.gifsto247.gifspacer.gifCentral Excise and Service Tax returns combined into a one page form "EST-1"spacer.gifsto247.gifspacer.gifCentral Excise rates increased from 10 % to 12%spacer.gifsto247.gifspacer.gifService Tax Rate to be 12%  spacer.gifsto247.gifspacer.gif Date of filing of ST-3 returns extended - returns for April to June, 2012 to be filed by 25th November, 2012 only.spacer.gifsto247.gifspacer.gif BREAKING NEWS : Service Tax half yearly ST-3 return to cover period from April, 2012 to June, 2012 only (ST Notification 47/2012)spacer.gifsto247.gifspacer.gif All Service Tax assessees are informed that they will not be able to file ST 3 returns in ACES now and have to wait until the modified version of ST 3 Form which is made available in a few weeks on aces.spacer.gifsto247.gifspacer.gif Penalty: Section 76: No delay in depositing service tax with Revenue: Penalty not imposable.spacer.gifsto247.gifspacer.gif Refund: Export of Services: Terminal Handling Charges also a port service.spacer.gifsto247.gifspacer.gif Penalty: Once the entire demand is set aside by Commissioner (A) and that order is not challenged by the department: Commissioner cannot impose penalty under Section 76 by passing a Review Order: Penalty set aside.spacer.gifsto247.gifspacer.gif Cargo Handling Service: The activity of transportation and stacking within the stockyard premises not covered: Demand set aside.spacer.gifsto247.gifspacer.gif Finance Act, 2012spacer.gifsto247.gifspacer.gifDefinitions introduced in Section 65C, Section 66B (Charge of Service Tax), Section 66C (Determination of Place of Provision of Service), Section 66D (Negative List), Section 66E (Declared Services), Section 66F (Bundled Services), Amendment to Section 67 (omitting of Explanation, Amendment to Section 68 (sharing of taxes between provider and receiver) would operate from 01.07.2012.spacer.gifsto247.gifspacer.gifThe notifications amending Cenvat Credit Rules, Valuation Rules, Service Tax Rules, Works Contract Composition Scheme have not been issued.spacer.gifsto247.gifspacer.gifSection 65, 65A, 66 & 66A would cease to operate from 01.06.2012spacer.gifsto247.gifspacer.gifThe clause (A), (B), (D) & (E) of Section 143 of the Finance Act,2012 will come into force from 01.06.2012 as per Notification No.18/2012 dated 01.06.2012spacer.gifsto247.gifspacer.gifNegative list based service tax will come into force from 1st july 2012spacer.gifsto247.gifspacer.gifFinance Bill, 2012; gets enacted on May 28, 2012 : Finance Act (No 23 of 2012)spacer.gifsto247.gifspacer.gif Aam aadmi becomes khaas aadmi spacer.gifsto247.gifspacer.gifCentral Excise and Service Tax returns combined into a one page form "EST-1"spacer.gifsto247.gifspacer.gifCentral Excise rates increased from 10 % to 12%spacer.gifsto247.gifspacer.gifService Tax Rate to be 12%
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Normal Value

Normal Value means the comparable price, in the ordinary course of trade, for the like Article when meant for consumption in the exporting country or territory.

A normal value may be determined where there are no sales of the like article in the ordinary course of trade in the domestic market of the exporting country or territory, such sales do not permit a proper comparison, the normal value shall be either-

1. comparable representative of the like article when exported from the exporting country or territory or an appropriate third country; or

2. the cost of production of the said article in the country of origin along with reasonable addition for administrative, selling and general costs, and for profits,

The phrase ‘normal value’ in relation to an article has been defined in Clause (c) to the Explanation to Section 9A(1) as meaning : -

(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 along with reasonable addition for administrative, selling and general costs, and for profits, as determined in accordance with the rules made under sub-section(6).

It is clear that the statute itself has given sufficient guidelines to the Authority to be adopted in the process of determining the ‘normal value’. To some extent, these guidelines have been placed in a preferential sequence. For example, if acceptable material is available in regard to the comparable price in the ordinary course of trade in the exporting country or territory itself then the normal value will have to be determined on that basis, if such material in regard to comparable price is not available then there is a choice under Section 9A(1)(c)(ii)(a) and (b). The said choice is between the comparable representative export price and cost of production in the country of origin of the goods.

Anti-Dumping rules mandates that if there are comparable sales of the like product in the ordinary course of trade in the domestic market of exporting country, then the authorities must use the domestic price as the measure of normal value. Thus the rule specifies the following conditions that require further examination:-

• There are sales of a like products in domestic market;

• Such sales are in the ordinary course of trade; and

• Such sale permits a proper comparison with export sales.

The use of the word ‘territory’ in Section 9A(1)(c) indicates that while determining the normal value, the comparable price of the like article in the exporting country or territory may be taken into consideration. The placement of this word ‘territory’ after the word ‘country’ indicates that the Legislature intended to use the word ‘territory’ with reference to a larger geographical area than the exporting country which geographical area or territory has some commercial similarity with the exporting country and the exporting country is a part of the said territory, though not in the political sense but in the economic sense of that word. DESIGNATED AUTHORITY Versus HALDOR TOPSOE A/S. [2000 (120) E.L.T. 11 (S.C.)]

The “normal value” will have to be determined with reference to comparable price, the words “comparable price” in the context can only be with reference to the price of similar articles sold under similar circumstances irrespective of the manufacturer. Such an interpretation of the statute is wholly contrary to the very scheme of the statute”.

Normal Value is determined qua an exporter (if he co-operates in the investigation) and qua a country if (if he does not co-operate in the investigation).
Normal value could be determined on the basis of price of similar article produced by others. Normal value may be determined irrespective of the manufacturer.

According to the definition of “normal value” in Section 9A(1)(C) of the Customs Tariff (Amendment) Act, 1995 (No. 6 of 1995), it can be the domestic selling price in the ordinary course of trade, export price to an appropriate third country or cost of product. Relevant Rules under Anti-Dumping duty Rules and Annexure-I to the said Rules make it clear that normal value should take in all elements of cost, both direct cost of production and cost of administration and sales. The determination of a fact like normal value is required to be done after consideration of data and material available from all sources. The normal price (undumped price) has to take in all elements of manufacturing, selling and administration costs. Only a price which includes all these elements can qualify to be the normal value. FIRMA CHEMICZNA DWORY S.A. POLAND Versus DESIGNATED AUTHORITY [2004 (165) E.L.T. 210 (Tri. - Del.)]

The domestic price should be representative enough to permit a proper comparison. Sales of the like product destined for consumption in the domestic market of the exporting country shall normally be considered a sufficient quantity for the determination of the normal value if such sales constitute 5 per cent or more of the sales of the product under consideration to the importing country, provided that a lower ratio should be acceptable where the evidence demonstrates that domestic sales at such lower ratio are nonetheless of sufficient magnitude to provide for a proper comparison.

Like products is defined as a product is identical i.e., alike in all respect, to the product under consideration, or, in the absence of such product, another product although not alike in all respect, has characteristics closely resembling the product under consideration.

THE CEGAT in the case of BIRLA PERICLASE Versus DESIGNATED AUTHORITY (ANTI-DUMPING), G.O.I. [2000 (116) E.L.T. 336 (Tribunal)] held that Sintered Magnesia manufactured by domestic industry and Fused Magnesia imported although not alike but having same chemical formula and chemical characteristics of both resembling each other, Sintered Magnesia and Fused Magnesia are ‘like articles’ under Rule 2(d) of Customs Tariff (Identification, Assessment and Collection of Anti-Dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995.

Caustic soda/Sodium hydroxide lye, flakes, prill and granules are like articles as they are used inter changeably and same technology applied for their production. ALKALI MANUFACTURERS ASSOCIATION OF INDIA Versus DESIGNATED AUTHORITY [2006 (194) E.L.T. 161 (Tri. - Del.)].

Alternative Methods:-

When there is no sale of the like products in domestic market or domestic market sales of the like product are made at per unit price which are less than the per unit cost price and

such sales are made in substantial quantities over an extended period and

the price of all domestic market sales of the like products do not provide for recovery of all cost within a reasonable period.

The domestic market sales of the like product are made to related party after exclusion of such sales, the remaining sale do not amount to 5% or more sales of the like product due to particular market situation and

sales in the domestic market do not permit proper comparison with export sale.
In such situation there are two alternative methods:-

The Normal value can be determined on comparable price of the like product when exported to third country. The normal value can be determined on the basis of comparable goods of a manufacturer in third country. Normal value can be determined on the basis of export price of like product in appropriate third country. This method is available if determination of normal value on the basis of domestic sale price exhausted. In India this method is rarely used. In the Para Hydroxy Phenyl Glycerine Base case, the designated authority treated Iran as an appropriate third country.

Secondly, the constructed value is an alternative method of determination of normal value. In a situation, foreign exporter not having any domestic market and withholding information as to export price to third country, the normal value can be determined on cost of production basis by producing selective evidence. The constructed cost has to be those such as cost of production incurred in the ordinary course of trade. The cost of production means all the cost of materials and manufactured of the product plus a reasonable amount for selling, general and administrative (SGA) expenses. The cost of material and manufacturing includes such fixed and variable cost as the cost of raw materials, semi-finished goods and component, wages and salaries, fuel and water charges, rents, building repairs, renewal charges etc. The constructed cost should be true cost and while determining the cost of individual items, the principle governing the determination of domestic sale price should be adhered to. For example the cost of raw material should be the cost at which it is available at arm’s length in the ordinary sale in the market. While determining the administrative cost, the entire ingredient should be determined so that there should not be any undue advantage. The constructed cost should be reasonable and free from all undue advantage due to cross subsidy, electricity at lower rate, free/subsidized infrastructure, etc.

Cost allocation should reasonably reflect the actual costs associated with the production and sale of various goods. A turnover based allocation does that. A reasonable profit margin should be added while determining the normal value on cost constructing method. SIMALIN CHEMICAL INDUSTRIES Versus DESIGNATED AUTHORITY [2003 (155) E.L.T. 51 (Tri. - Del.)]

In the case of PIG IRON MFRS. ASSCN. Versus DESIGNATED AUTHORITY, MIN. OF COMMERCE [2000 (116) E.L.T. 67 (Tribunal)], it is held that the economics of producers for captive consumption and of producers for sale are very different. The captive consumption producers and producers for marketing constitute different categories of producers. They could be dealt with as separate domestic industries. If full information about sales and cost of production during period of investigation not made available and there be a vast variation in cost of production among exporting companies, the prices will not be the economic market prices and thus, domestic sale price needs to be discarded. In such situation, the cost of production to be constructed on principle of Best Information available.

Identical treatment has to be given to domestic manufacturers and exporter. Same principles of production and methods of costing have to be applied to both. [2006 (194) E.L.T. 161 (Tri. - Del.)] ALKALI MANUFACTURERS ASSOCIATION OF INDIA Versus DESIGNATED AUTHORITY.

The definition of normal value emphasized that transaction should be in the ordinary course of trade. GATT presume the existence of free and open markets. The normal criteria for determination of Anti-Dumping duty will not be applicable for the countries which have centrally planned economics. The prices in such countries are controlled by the Government and in such situation adoption of normal criteria will not give the true picture. A distinction has to be made between Market Economic Company and Non Market Economic Company.

The term “non-market economy country” means any country which the designated authority determines as not operating on market principles of cost or pricing structures, so that sales of merchandise in such country do not reflect the fair value of the merchandise, in accordance with the criteria specified in sub-paragraph. [Rule 8]

For India, the non market economy countries are Albania, Armenia, Azerbaijan, Belarus, Peoples’ Republic of China, Georgia, Kazakstan, North Korea, Kyrghyzstan, Moldova, Mongolia, Russia, Tajikistan, Turkmenistan, Ukraine, Uzbekistan and Vietnam. [Notification No. 28/2001-Cus. (N.T.), dated 31-5-2001]

The following methods of determining the normal value is available in the case, the exporters are from NME countries.

The domestic price in a market economy on the third country.

The price of exports from such a third countries to other countries including the investigating country or the constructed value in such third country
If above methods are not applicable, the price actually paid or payable subject to suitable adjustment.

In case of imports from non-market economy (NME) countries, normal value shall be determined on the basis of the price or constructed value in a market economy third country, or the price from such a third country to other countries, including India, or where it is not possible, on any other reasonable basis, including the price actually paid or payable in India for the like product, duly adjusted if necessary, to include a reasonable profit margin. An appropriate market economy third country shall be selected by the designated authority in a reasonable manner and due account shall be taken of any reliable information made available at the time of the selection. Account shall also be taken within time limits; where appropriate, of the investigation if any made in similar matter in respect of any other market economy third country. The parties to the investigation shall be informed without unreasonable delay the aforesaid selection of the market economy third country and shall be given a reasonable period of time to offer their comments. [Notification No. 44/99-Cus. (N.T.), dated 15-7-1999]

Paragraphs 1 to 6 of Annexure I to Customs Tariff (Identification, Assessment and Collection of Anti-dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995 to be followed in case of non-market economy unless such presumption rebutted

In the case of H & R JOHNSON (INDIA) LIMITED Versus DESIGNATED AUTHORITY [2007 (218) E.L.T. 273 (Tri. - Del.)], it is held that country of origin of goods was not UAE but China as there was no domestic sale there either of those goods or comparable goods. In such case, the cost of production with reasonable addition for administrative, selling and general expenses along with profits, would give the normal price of those goods.

In SHENYANG MASTSUSHITA S. BATTERY CO. LTD. Versus EXIDE INDUSTRIES LTD. [2005 (181) E.L.T. 320 (S.C.)], it is held that the goods produced in non-market economies like China, exception to individual units in such economies to prove that they were operating according to market principle applies to all exporters there- from. This exception has been provided to the rule of uniform normal value for all exporters in non-market economy countries.

A verification of company accounts would be meaningful only if fully audited and certified books of accounts are presented in a language understood by the verification team. UNIVERSAL CHEMICALS AND INDUS. LTD. Versus DESIGNATED AUTHORITY [2002 (146) E.L.T. 449 (Tri. - Del.)].

THE CEGAT in the case of JAI CORPORATION LTD Versus DESIGNATED AUTHORITY 2002 (140) E.L.T. 283 (Tri. - Del.) held that if the Exporter/Appellant withholds data regarding cost of production of goods alleged to be dumped in the country by the domestic petitioner before Designated Authority, that authority can go to other sources, including information supplied by petitioners themselves, in determining normal value of goods, Such course of action by Designated Authority is in conformity with, and sustainable under, Anti-dumping Rules for, in Anti-dumping proceedings, it is for exporter to establish through disclosure of all relevant data that export price is not less than the normal value as per Section 9A of Customs Tariff Act, 1975 read with Rule 10 of Customs Tariff (Identification Assessment and Collection of Anti-dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995. Mere assertion that appellant making profits from domestic sale price of goods and hence that price would be the normal value, no substitute for requirement of disclosure of relevant data as per Rule 10 of Customs Tariff (Identification, Assessment and Collection of Anti-dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995. Cost of production of a unit located in Kazakhastan cannot be adopted in determining normal value of goods of another unit located in Russia, when the two have very different corporate structures, their common membership of CIS Countries notwithstanding - Rule 10 of Customs Tariff (Identification, Assessment and Collection) of Anti-dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995. When the object of Anti-dumping proceedings is to see whether there is dumping of goods from the alleged foreign country, data acceptable of some manufacturers from that country could legitimately he applied to other manufacturers of that country also - Rule 10 of Customs Tariff (Identification, Assessment and Collection of Anti-dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995.

             
 
              
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