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Merck's anti-dumping petition rejected

CESTAT has rejected its plea against slapping of anti-dumping duty on import of 'mica pearl pigment'.

india Updated: Jun 16, 2006 17:44 IST

In a major setback to global pharma giant Merck, the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has rejected its plea against slapping of anti-dumping duty on import of 'mica pearl pigment'.

"The contentions raised on behalf of the appellant (Merck) against the notification are misconceived and can not be accepted," said Justice RK Abichandani, President of the CESTAT while rejecting appeal of Merck on the findings of the investigations.

"We find our self in full agreement with the reasoning and findings of the designated authority (DA) and there is no warrant for any interference with the impugned final finding and the notification," Justice Abichandani added.

The Ministry of Finance, on March 21, 2005, had imposed anti-dumping duty at a rate of USD 2.7 per kg on the MPP imported to India from Merck's Japanese division.

MPP, also known as titanium dioxide, is widely used by the industry for automotive, cosmetic and industrial use. It is also used to produce high-quality paints.

DA, under Ministry of Commerce, had initiated investigation after receiving a petition from the Sudarshan Chemicals Industries Ltd (SCIL) on behalf of domestic producers of MPP.

In its report, DA supported the claims made by the domestic industry that it was hurt by the below normal value imports of MPP from USA, EU, Japan and EU.

This was challenged before the CESTAT by Merck India Ltd, a 100 per cent owned company of Merck KGaA, Germany.

However, Merck India maintained that it was a subsidiary of the Merck International, so it was a natural party to it.

The pharma giant also contended that during the investigation the DA concentrated only at the industrial grade of the product. It overlooked the other grades of MPP. Product exported to India by its Japanese division was of high quality and could not be matched by the domestic product.

MOF, however, contended that not only Merck's imports were of similar quality, but it also directly competed the domestically produced MPP.

The CESTAT also observed that during the investigation Merck, Japan remained quiet on the characteristic of its product and did not respond properly.

"If the Merck itself had indicated that the quality of the exported good is of different quality...We found there was no indication in the invoices as to the quality of the product being of superior quality," said Justice Abichandani rejecting the appeal.