Imports of 2-Ethyl Hexanol (2-EH) from EU, Republic of Indonesia, Korea
MINISTRY OF COMMERCE & INDUSTRY DEPARTMENT OF COMMERCE (DIRECTORATE GENERAL OF ANTI-DUMPING & ALLIED DUTIES)
FINAL FINDING
Sub: Anti-Dumping Investigation involving import of 2-Ethyl Hexanol (2-EH) from the European Union, the Republic of Indonesia, the Republic of Korea, Malaysia, Kingdom of Saudi Arabia, Chinese Taipei & the United States of America.F.NO. 14/24/2014-DGAD:- Having regard to the Customs Tariff Act 1975 as amended in 1995 (hereinafter referred to as the Act) and the Customs Tariff (Identification, Assessment and Collection of Anti-Dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995, (hereinafter referred to as the Rules) thereof:
2. WHEREAS, The Andhra Petrochemicals Ltd. (hereinafter referred to as Petitioner), the sole domestic producer of 2-Ethyl Hexanol (hereinafter referred to as the subject goods) in India, has filed an application alleging dumping of the subject goods from the European Union (EU), the Republic of Indonesia, the Republic of Korea, Malaysia, Kingdom of Saudi Arabia, Chinese Taipei & the United States of America (USA) (hereinafter referred to as the "subject countries/territories") and consequent injury being caused to them and requesting for initiation of an antidumping investigation against the above countries/territories.
3.AND WHEREAS, the Authority, on the basis of sufficient prima fade evidence submitted by the applicants, issued a public notice dated 20th November 2014, published in the Gazette of India, Extraordinary, initiating this Anti-Dumping investigations concerning import of the subject goods, originating in or exported from the above countries, in accordance with the Rule 6(1) of the Rules, to determine the existence, degree and effect of alleged dumping and to recommend the amount of antidumping duty, which, if levied would be adequate to remove the injury to the domestic industry, if any.A. Procedure
4. Procedure described below has been followed with regard to this investigation.
I. In terms of sub-Rule 5 of Rule 5 the Authority notified the Embassies/representatives of the subject countries/territories in India about the receipt of the application from the domestic industry requesting for initiation of an antidumping investigation. The Govt. of the Republic of Korea was also informed, through its Embassy in India, about the receipt of the application in accordance with the provisions of Article 2.14 of the Comprehensive Economic Partnership Agreement (CEPA) between India and Korea RP.
II. The Embassies/representatives of the subject countries/territories in New Delhi were also informed about the initiation of the investigations in accordance with Rule 6(2).
III. The Designated Authority sent copies of initiation notifications dated 20th November 2014 to the embassies/representatives of the subject countries/territories in India, known exporters from the subject countries, known importers and other interested parties, as well as the domestic industry, as per the information available with it. Parties to this investigation were requested to file questionnaire responses and make their views known in writing within prescribed time limit. Copies of the letter, petition and questionnaire sent to the exporter, were also sent to the Embassies of subject countries along with a list of known exporters/ producers with a request to advise the exporters/producers from the subject countries/territories to respond to the questionnaire within the prescribed time.
IV. Copies of the non-confidential version of the petition filed by the domestic industry were made available to the known exporters and the Embassies/representatives of the subject countries/territories in accordance with Rules 6(3) supra.
V. Exporters’ Questionnaires were sent to the following known exporters from subject countries/territories in accordance with the rule 6(4) to elicit relevant information.
a) BASF Petronas Chemicals Sdn Bhd, Pahang, Malaysia b) BASF Petronas Chemicals Sdn Bhd, Selangor, Malaysia c) ZAK, Zak S.A UL, Poland d) EIF Atochem S.A, France e) Solvents Documentation Syntheses S.A, France f) Exxonmobil Chemical Holland BV, Rotterdam g) BASF, Wohlestrasse, Germany h) Saudi Basic Industries Corporation, ( SABIC), Saudi Arabia i) Perstorp Oxo AB, Sweden j) LG Chemicals, Korea k) Arkema, France l) Pt Petro Oxo Nusantara, (PT PON), Indonesia m) Nan Ya Plastics Corporation, Taiwan n) Vinmar International Ltd., USA o) ICC Chemical Corporation, USA p) BASF, USA q) Dow Chemicals, USA r) Eastman Chemical Co. USA
VI. The following producers/exporters, exporting the subject goods originating in or exported from the subject goods, have filed questionnaire responses:
(a) M/s PT Petro Oxo Nusantara, Indonesia (PT PON) (b) M/s Sojitz Asia Pte Ltd, Singapore (c) M/s Saudi Basic Industries Corporation, Saudi Arabia, (SABIC) (d) M/s Al-Jubail Fertilizer. Co Saudi Arabia (Albayroni) (e) M/s Oxea GmbH, Germany (Oxea) (f) M/s Petrochem Middle East FZE, Dubai (g) M/s BASF PETRONAS Chemicals Sdn Bhd, Malaysia (BPC) (h) M/s Hyundai Corporation, Korea RP (i) M/s LG Chem Ltd, Korea RP (LG Chem) (j) M/s Vinmar International Ltd., USA (k) M/s ICC Chemical Corporation, USA
VII. Questionnaires were sent to the following known importers and consumers of subject goods in India calling for necessary information in accordance with Rule 6(4):
1. C J Shah & Co, Mumbai. 8. Agsar Paints Pvt. Ltd. 2. Petrochem Middle East - (India) P. Ltd., Mumbai. Tuticorin 3. KLJ Resources & Group of Cos, New Delhi. 9. C A G Industries, Andhra Pradesh
4. Deepak Nitrite Ltd., Mumbai 10. C & E Limited, HARYANA
5. Lalitha Chem Industries Pvt. Ltd. Thane 11. Indian Institute of Chemical Technology, Telangana
6. Petchem Products – Guj, Mumbai 12. Kerox Chemicals Pvt. Ltd. Karnataka,
7. PCL Oil & Solvents Ltd. New Delhi 13. Raghunath Dye Chem Pvt. Ltd. KURNOOL
14. Salicylates & Chemicals Pvt. Ltd. Telangana 33. KLJ Plasticizers Ltd. (Unit 1 & 11), New Delhi 15. Ushodaya Paints, Andhra Pradesh 34. Kasturi Resins And Synthetics, Vijayawada 16. Sannidhi Chemical Industries, Telangana 35. Pasuparthy Polymers Pvt. Ltd., Andhra Pradesh 17. Laxminarain Visambharnath, Uttar Pradesh 36. Rhino Resins Pvt. Ltd. Telangana 18. Meghaaarika International Pvt. Ltd. New Delhi 37. Spectra Coats, Nellore 19. Nicholas Pigments & Inks, Kanpur 38. Srivatsa Industries, Andhra Pradesh 20. Nisha Dye Chem, Ahmdabad 39. Bansal Trading Company, New Delhi 21. Mody Enterprises, Maharashtra 40. Naq lobal (India), Maharashtra 22. Industrial Products Mfg. Co. Maharashtra 41. Maha Bhawani Chemicals, Rajasthan 23. Associated Dyestuff Pvt. Ltd. Gujarat 42. Neelam Aqua & Speciality Chem Pvt. Ltd., Rajasthan 24. Indocem (India) Pvt. Ltd. Gujarat 43. Meghmani Dyes And Intermediates Ltd., Ahmedabad 25. Shalimar Paints Ltd. West Bengal 44. Merck Limited, Maharashtra 26. Right Minerals Pvt. Ltd. West Bengal 45. Troix Chemicals Pvt. Ltd., Maharashtra 27. Jagadamba Chemicals, West Bengal 46. Jeevika Spakchem Pvt. Ltd., Maharashtra 28. Agarwal Sales Corporation West Bengal 47. Galaxy Surfactants Limited, Maharashtra 29. Payal Polyplast Pvt. Ltd. New Delhi 48. Premier Enterprises, West Bengal 30. Rachna Plasticizers, Mumbai 49. R.K.Trading, Cuttack, Odisha 31. Amar Industrial Services, Telangana 50. Krishna Traders, Kolkata, West Bengal 32. Indian Additives Limited, Chennai 51. Annex Chemicals, Kolkata, West Bengal 52. Indian Plasticizers Manufacturers Association, New Delhi VIII. Following importers/users of the subject goods have filed their responses: • Indian Plastisizers Manufacturers Association • M/s. KLJ Plasticizers Limited • M/s Rachana Plasticizers • M/s Payal Petrochem Pvt. Ltd • Payal Polyplast Pvt. Ltd. • M/s Deepak Nitrite Ltd. • M/s Amar Industrial Services IX. Request was made to the Directorate General of Commercial Intelligence and Statistics (DGCI&S) to provide transaction-wise details of imports of subject goods for the past three years, including the period of investigations; X. The Authority made available non-confidential versions of the evidences presented by various interested parties in the form of a public file kept open for inspection by the interested parties; XI. Optimum cost of production and cost to make and sell the subject goods in India, based on the information furnished by the petitioner, has been worked out, on the basis of Generally Accepted Accounting Principles (GAAP), so as to ascertain whether Anti-Dumping duty lower than the dumping margin would be sufficient to remove injury to the Domestic Industry; XII. The confidentiality claims of various interested parties, in respect of the data submitted by them have been examined. The information, which are by nature confidential or which have been provided on a confidential basis by the interested parties, along with non-confidential summary thereof, have been treated confidential. *** in this finding represents information furnished by the interested parties on confidential basis and so considered by the Authority under the Rules. XIII. In accordance with Rule 6(6) of the AD Rules, the Authority also provided opportunity to all interested parties to present their views orally in a public hearing held on 13.08.2015. The interested parties were requested to file written submissions of their views expressed orally. The submissions made by the interested parties during the course of the investigations and written submissions after the public hearings have been addressed in this disclosure to the extent they are relevant and backed by evidence. XIV. In terms of Rule 16 of the Rules the Authority disclosed the essential facts of the case through a disclosure statement issued on 8th February, 2016. The following parties have filed their comments on the disclosure statement and their comments have been considered to the extent they are relevant and not re-iteration of their earlier views on the subject: a) M/s TPM Consultants on behalf of the domestic industry b) M/s Lakhmikumaran and Sridharan on behalf of PT Petro Oxo Nusantara, Indonesia and Sojit Asia Pte. Ltd.; M/s Albayroni and SABIC, Saudi Arabia; M/s Perstorp Oxo AB, Sweden c) M/s EPL on behalf of Oxea GmbH and Petrochem Middle East FZE d) M/s BASF Petronas Chemicals, Malaysia e) M/s VishvaDeep & Co. On behalf of Deeepak Nitrite Ltd f) M/s Athena Law Associates on behalf of Indian Plasticizers Manufacturers Association and M/s KLJ Plasticizers; Payal Polyplast; Payal Petrochem; PCL Oil & Solvents; Lalitha Chem; Rachna Plasticizers g) The European Commission; and h) Directorate General of Foreign Trade, Government of Indonesia XV. Verification of the information and data submitted by the participating domestic producer as well as the responding exporters were carried out to the extent deemed necessary and feasible. XVI. Wherever an interested party has refused access to, or has otherwise not provided necessary information during the course of the present investigation, or has significantly impeded the investigation, the Authority has treated such parties as non-cooperative and has used "best information available" for the determinations to the extent required. XVII. Investigation was carried out for the period starting from April 2013- June 2014 (POI). However, the injury investigation covers the period 2010-11, 2011-12, 2012-13 and POI. XVIII. Wherever conversion of transaction values in the countries/territories of exporters were warranted the relevant daily or weighted average exchange rates as reported by the cooperating exporters in their respective questionnaire responses have been adopted. However, for the purpose of other conversions to Indian Rupee weighted average exchange rate for the POI (April 2013- June 2014) has been adopted at Rs Rs60.77 = 1US$ as per customs data for the said period. XIX. On the request of the Authority the Central Govt. has extended the time period for completion of this investigation till 19th Feb 2016 in terms of Rule 17 of the Rules. B. Product under consideration and ‘Like Article’ 5. The product under consideration in this investigation is “2-Ethyl Hexanol”. 2-Ethyl Hexanol (abbreviated as ‘2-EH’) is a basic organic chemical. It is a fatty alcohol, clear, mobile, neutral liquid with a characteristic odour. 2-EH is produced on a massive scale for use in numerous applications such as solvents, flavours, and fragrances and especially as a precursor for production of other chemicals such as emollients and plasticizers. Main application of 2-Ethyl Hexanol is as a feed stock in the manufacture of low volatility esters; the most important of it is Di-(2Ethyl hexyl) Phthalate (DOP or DEHP). The product under consideration is classified under Customs Tariff Heading No. 29051620. However, the said Customs classification is indicative only and in no way binding on the scope of the present investigation. 6. The subject goods exported from subject countries/territories are identical to the goods produced by the domestic industry in terms of essential product characteristics such as physical & chemical characteristics, manufacturing process & technology, functions & uses. Consumers can use, and are using the two interchangeably. No argument has been made by any interested party about the product under consideration or the like article. Therefore, the Authority holds that the imported goods and domestically produced subject goods are technically and commercially substitutable and hence treated as “like article ‟ under the AD Rules. C. Domestic Industry and Standing 7. The petition has been filed by The Andhra Petrochemicals Ltd. The Petitioner is the sole producer of the subject goods in India. Further, the petitioner has not imported the product under consideration, nor are they related to any importer or exporter of the product under consideration. Therefore, the petitioner satisfies the requirements of “standing‟ under Rule 5 of the AD Rules and constitutes “Domestic Industry‟ in terms of Rule 2(b) of the AD Rules. No argument has been made by any interested party regarding the stranding of the domestic industry. D. Countries Named, Volume of Imports and de minimis limits 8. The investigation was initiated against alleged dumped imports from the European Union (EU), the Republic of Indonesia, the Republic of Korea, Malaysia, Kingdom of Saudi Arabia, Chinese Taipei & the United States of America (USA). The product, i.e., 2-Ethyl Hexanol is classified under Chapter 29 of Customs Tariff at subheading no. 29051620. The domestic industry has contended that the major volume of imports of the subject goods takes place through Kandla Port. But there is significant data gap in the DGCI&S data on imports at Kandla port. The data obtained by them from Kandla port itself, for the injury investigation period, except 2010-11, far exceeds the import volumes reported in DGCI&S data. The domestic industry contends that apparently entire import transactions at Kandla Port have not been captured in DGCI&S data. 9.The data obtained from DGCI&S, Kandla Port Authorities and transaction data of the responding exporters have been examined in the light of the contentions of the domestic industry. It is noted that while significant volume of the subject goods have been imported through the Kandla Port, as per the responses of the responding exporters themselves, the transactions have not been clearly captured in DGCI&S data. Therefore, all these data have been reconciled to the extent possible for examination of volume of imports of the subject goods. The data used has also been placed in the public folder for the benefit of the interested parties. 10. Some of the interested parties, in their post disclosure submissions, have argued that the Authority should provide them soft copies of the impart data alongwith the reconciled statement and methodology adopted for identification of transactions. In this connection the Authority notes that entire data set used had been placed in the public folder and was available to the interested parties for their examination and comments. Therefore, these submissions of the parties are without any basis. 11. Volume of dumped imports from the subject countries, as per the above import data, is given in the table below. As per this data, share of imports from each of the subject countries/territories in total imports has been found to be above de minimus level.
12. Imports from other countries are de minimus. Cumulative imports from the other countries is also less than 7% as imports from the subject countries account for about 96% of total imports during POI.
E Interested parties to this investigation 13. On the basis of questionnaire responses and other submissions filed by the responding producers/exporters and importers listed in sub para VI and sub para VIII in para-4 above, alongwith the Govt.s of the Countries named in this investigation and the domestic industry in India have been treated as interested parties to this investigation. No other party has contested this finding of the Authority. Therefore, the Authority confirms the above position. F. Miscellaneous Submissions of the Interested Parties 14. The interested parties in their various submissions have raised certain issues regarding various aspects of the investigation, including dumping and injury claims of the domestic industry. While the issues regarding dumping and injury determinations have been dealt in the respective sections in this finding, general procedural issues raised have been addressed hereunder. F.1 Issues regarding Confidentiality claims (a) Views of the other Interested Parties 15. The interested parties, in their various submissions, including their post disclosure submission, have inter alia raised the following issues with regard to the confidentiality claims of the domestic industry: a) That soft copy of transaction-wise import data relied upon by the Petitioner, as obtained from DGCI&S, has not been provided to the interested parties as no confidentiality can be sought on this information; b) That information on parameters in Performa IV A, such as, depreciation, interest expense, net fixed assets, working capital, capital employed, investments, net worth and capital investment for expansion has not been provided even in indexed form. c) That normal value has been constructed even for market economy countries, and no evidence and figures for international price of the major raw materials for calculating normal value has been provided in the petition. d) That indexed version of costing formats has not been provided. e) That range of injury margin and the methodology used for determining non-injurious price has not been disclosed. Further, the Petitioner has not disclosed the rate of return adopted and the basis (whether gross fixed assets or net fixed assets). The Petitioner has also not disclosed the basis for considering cost of credit for 270 days in determining non-injurious price, even when it is not permitted in the law. f) That Petitioner’s plant was shut down for some part of the POI and also faced severe constraint with respect to non-availability of raw material. The Petitioner has not disclosed these intrinsic factors and how the expenses during the shut- down period were accounted for in determination of non-injurious price. g) That effective submissions cannot be made in the absence of information relied up unless the same is provided to the interested parties. (b) Views of the Domestic industry 16. The domestic industry, in its submissions, has refuted the arguments of the interested parties. The domestic industry has submitted that they have provided a meaningful summary of the information claimed confidential in indexed form to the extent possible. Further the domestic industry has submitted valid reasons for inability to provide such information on non-confidential basis have been provided. The domestic industry has also claimed that the exporters and importers have also resorted to excessive confidentiality, thus, incapacitating the domestic industry to render any constructive comments. (c) Views of the Authority 17. The Authority has examined the confidentiality claims of the interested parties to the extent feasible. Confidentiality of the information, which is by nature confidential or wherever such confidentiality is warranted due to business sensitivity, has been allowed as per the consistent practices of the Authority. 18. The Authority also notes that that import data relied upon has been placed in the public folder and is available for the comments of the interested parties. Therefore, the comments of the interested parties, in this regard, are not valid. F.2 Other issues raised by the interested parties 19. M/s Laxmikumaran and Sridharan, representing M/s SABIC and Albayroni, Saudi Arabia, and M/s PT PON, Indonesia; M/s ELP, representing M/s Oxea GmbH and M/s Petrochem Middle East, Singapore; M/s Vishwadeep and Company, representing Deepak Nintrite Ltd.; M/s Athena Law Associates, representing Indian Plasticizers Manufacturers Associations and the importers; and other interested parties, including BASF Petronas, Malaysia, Directorate General for Trade, European Commissions (EU), and Malaysian Ministry of International Trade & Industry (MITI), in their respective submissions, have inter alia made the following general arguments regarding initiation and various aspects of this investigation: • That the Authority is required to satisfy itself that there is sufficient evidence with regard to dumping, injury and causal link to justify initiation in terms of Rule 5. The domestic industry has failed to fulfill the requirements of Rule 5 (1) and (2) concerning the tests of sufficiency, adequacy and accuracy of evidence as obligated by the Rules. • That the initiation and subsequent investigation is illegal as it fails to comply with various provisions of the Act and the Rules as the domestic industry has failed to disclose certain vital facts such as their plant closure and non-availability of raw material. • That the Initiation of the investigation does not meet the standards set out by Art. 12 of ADA and para. 6 of the Rules as the period of data collection has been extended beyond twelve months without giving any reasoning as to why the standard does not apply. As such extended POI should take into account particular circumstances. • That without providing evidence of normal value in the subject countries the petitioner has constructed the normal values for all market economic countries, which is not permissible under the law. Further, the petitioner has not disclosed the details of the export price adjustment and evidence thereof. • That the cost relating to plant shutdown, exorbitant credit cost and rate of return claimed by the petitioner makes the determination of non injurious price and injury margin doubtful. • That the petition did not provide adequate information on injury and causal link. The injury, if any, suffered by the petitioner, is due to its intrinsic reasons and there is complete absence of causal link. Annual Report of 2013-14 clearly states that the petitioner’s plant was shut down for a long period during the POI due to non availability of raw material. Therefore, the Authority should investigate whether material injury is caused by dumped imports or other reasons. F.3 Issues raised by the domestic industry 20. The domestic industry has opposed the submissions made on behalf of the association and consumers and has contended that the role of association and consumers cannot merely be limited to filing of comments on the petition filed by the domestic industry. The Association and the consumers hold obligation to provide relevant information to the Authority. Therefore, it is evident that a number of importers and consumers are non cooperative with regard to the present investigations. Further, the association has not provided any information with regard to present investigations, barring filing of comments from the petition filed by the domestic industry. 21. As regards the contention of other parties that the petition is not fully documented and substantiated, it is submitted that the DA is required to merely satisfy itself with regard to justification for initiation of investigation. F.4 View of the Authority 22. The Authority has noted the general issues raised by the interested parties with regard to the accuracy and adequacy of the information submitted by the petitioner at the time of initiation and the injury claims in the petition. 23. As far as the adequacy and accuracy of the information contained in the petition and examination by the authority is concerned, the authority notes that all the information with regard to import data, estimates of dumping and injury margins and injury information were duly examined on the basis on prima facie evidence submitted by the petitioner as was reasonably available with the petitioner and after being satisfied that there is a prima facie case of dumping, injury and causal link, requiring further investigation, the Authority initiated this investigation. The information available at the time of initiation may not be ideal or complete all respect. What is important at the stage of initiation is that the information provided should be sufficient as prima facie evidence as to existence of dumping, injury and causal link. Anti dumping investigations involve a continuous process of data collection and verification till the final determinations are made. Therefore, the issues raised by the interested parties with regard to inconsistencies and inadequacies in the data, if any, have been addressed based on the data received from various interested parties during the course of this investigation. As far as the arguments that the POI has been extended beyond 12 months without any adequate reasons the Authority notes that there is no mandatory requirement to restrict the POI to 12 months only. In the factual matrix of the case the data collection period is decided by the Authority keeping the period closer to the initiation. Therefore, the arguments of the opposing interested parties are not valid. 24. As regards the arguments of the interested parties that the petitioner failed to provide vital information regarding production loss and plant shutdown during the POI and attributed the entire injury to the dumped imports the Authority notes that the petition contained detailed information about loss of production in POI with reasons. The petitioner also mentioned in the said petition that they have excluded the idle time cost from the total cost incurred for working out injury margins. Therefore, the arguments of the interested parties are not valid. 25. As regards the issues raised by the interested parties regarding the transaction-wise imports data, the Authority notes that the transaction-wise import data relied upon was placed in the public file and was made available to the interested parties. 26. As far as the dumping determination is concerned, the Authority notes that the questionnaire response received from the participating exporters from the subject countries have vindicated the claims of the domestic industry about the dumping. However, for the purpose of final determinations data received from the exporters in their questionnaire responses have been used and therefore, the interest of the exporters and importers have not been compromised in any manner because of lack of complete information in the petition with regard to various adjustments etc. 27. As regards the objections raised by the domestic industry regarding the role of the associations and users in this investigation are concerned, the Authority notes that these parties have filed their comments on various aspects of the investigation without filing any questionnaire response. However, it is also noted that no questionnaire format has been prescribed for such parties to provide any specific information. Therefore, the information and comments filed by these parties have been considered to the extent they are relevant and backed by evidence. 28. The interested parties, including the Government of Indonesia and the European Commission, in their post disclosure comments, have mostly reiterated their respective stands on the above issues. The issues raised by the interested parties with regard to the claim of injury and injury margins have been dealt in a respective section in this finding and for the sake of brevity the same is not being repeated here. G. Determination of Dumping 29. The Authority notes that the following producers and exporters of the subject goods in the subject countries/territories have submitted Exporter’s Questionnaire Response to the initiation of anti dumping investigations: (a) M/s PT. Petro Oxo Nusantara, Indonesia (PT PON) (b) M/s Sojitz Asia Pte Ltd, Singapore (Sojitz) (c) M/s Saudi Basic Industries Corporation, Saudi Arabia (SABIC) (d) M/s Al-Jubail Fertilizer.Co, Saudi Arabia (Albayroni) (e) M/s Oxea GmbH, Germany (Oxea) (f) M/s Petrochem Middle East FZE, Dubai (g) M/s BASF PETRONAS Chemicals Sdn Bhd, Malaysia (BPC) (h) M/s Hyundai Corporation, Korea RP (i) M/s LG Chem Ltd, Korea RP (LG Chem) (j) M/s Vinmar International Ltd., USA (k) M/s ICC Chemical Corporation, USA30. The responding exporters and other interested parties, in their various submissions, have argued that the domestic industry, in its petition, has failed to provide adequate and accurate information/evidence with regard to the degree and extent of dumping. It has been further argued that given the fact that the petitioner’s plant was shut down for nearly 50% of the year the costs and conversion factors of the petitioner should not be accepted by the Authority to determine dumping margin as it is not in line with the requirements to conduct fair comparison.
31. It has been further argued that since the exporters from subject countries are fully participating and have filed their questionnaire responses, normal values and export prices should be determined based on the data submitted by them in terms of Section 9A (6A) of the Customs Tariff Act 1975 which provides that margin of dumping in relation to a producer or exporter shall be based on the records maintained by such producer or exporter.
32. The Authority notes that at the time of initiation the domestic industry had provided prima facie evidence of dumping based on information reasonably available to it and having satisfied itself about the existence of dumping form the subject countries/territories the Authority initiated the investigation. As regards the acceptance of the petitioner’s cost for determination of Normal value is concerned, the Authority has noted the fact that costs of the domestic industry was affected by plant closure and therefore, actual costs have not been accepted for any determination. The costs have been normated with appropriate level of production.
33. The Authority further notes that since the responding producers and exporters have filed questionnaire responses the same have been used for determination of dumping margins to the extent the responses are complete and duly documented. For non-cooperating exporters and countries not responding to the initiation, to the extent possible the data of the cooperating exporters have been used as best facts available for determination of various elements dumping margins thereby eliminating the possible distortion due to construction of normal values as argued by the responding exporters.
34. The questionnaire responses of the above producers and exporters were examined and supplementary information and clarifications were sought from them based on preliminary examination of the same. The information and data submitted by the responding exporters have been verified to the extent possible and verified data has been used for determination of dumping margins as follow:
G.1 European Union
35. As per the import data 39477 MTs of the subject goods have been imported from the European Union. Only one producing exporter from the European Union, i.e., M/s Oxea GmbH, has filed questionnaire response.
(a) M/s Oxea GmbH, European Union
36. M/s Oxea GmbH, Germany (Oxea), whose parent company is the Oman Oil Company S.A.O.C, Muscat, has filed a questionnaire response as the producer of the subject goods in the European Union. The Company produces Oxo-alcohols from Propylene and Syn gas. Propylene is procured from the merchant market through global contracts linked to Global Naphtha/Crude Price. The other building block for production of Oxo alcohols, i.e., Syn gas, is sourced externally from M/s [***], whose plant is located inside the factory premises of Oxea under a long term agreement. 37. Oxea sells the subject goods in the domestic market in Germany and other countries in the European Union which is a single European market and also exports to various countries outside the Union, including India. During the POI Oxea has exported the goods to India through three intermediary companies i.e., M/s Petrochem Middle East FZE, Dubai, M/s ICC Chemical Corporation, USA; and M/s Vinmar International, USA. M/s Petrochem Middle East FZE, Dubai functions as a distributor and M/s ICC Chemical Corporation, USA; and M/s Vinmar International, USA function as resellers. All these entities have filed their respective questionnaire responses. Supplementary information were sought from Oxea and its distributors/resellers wherever required and the same has been provided. The data submitted by Oxea GmbH was verified through an on-spot investigation at their plant and office in Germany to the extent possible. Due to constraints of time data submitted by the distributors/resellers could not be verified. However, for the purpose of this determination the verified data of Oxea and questionnaire responses filed by the distributor/resellers as above have been considered to the extent they are reconciled with the data filed by Oxea. Normal Value: Oxea 38. Oxea has provided its domestic sales details in Appendix 1 for determination of its Normal value in the European Union. As per App-1, during the POI Oxea has sold [***] MTs of the subject goods in the European Union. Only [***] MT have been sold in drums and rest have been sold in bulk form. The exports to India are only in bulk. Therefore, for the purpose of fair comparison only the bulk sales in the domestic market have been considered. 39. The goods have been sold to various unrelated customers in various countries on FOB/FCA/CPT/DDP terms with various credit periods. Accordingly, Oxea has indicated applicable adjustments to the domestic sales to arrive at exworks selling price in the domestic market. On the basis of verified cost to make and sale as reported in appendix 8 additional information was called for and the cost of production of the subject goods in bulk form has been determined as [Ero***/MT). Oxea has disputed the computation of the cost and has argued that the cost should have been determined on the basis of the cost maintained by the Company as per German GAAP. It has been argued that the adjustments reported by them are explicitly provided in German GAAP and confirmed by the authorised public accountant. Therefore, the Authority should not have rejected the cost as maintained by the Company as per the German GAAP without providing the reason of the same in the verification report. The Authority should re-calculate the Normal value taking into account the cost as maintained by them. 40. In this connection the Authority notes that the cost of production has been determined after taking into consideration various elements of cost as per the records of the Company as verified. However, certain negative figures i.e., sales related income and assets related income, included in ‘other expenditures’ have been removed as they resulted into reduction of expenditure and does not reflect the actual cost as the same principles is also followed to determine the NIP of the domestic Industry. 41. The domestic sales transactions have been subjected to ordinary course of trade test for determination of normal value. [***%] of the domestic sales were found to be profitable. Therefore, for the purpose of determination of normal value only profitable sales have been considered. Oxea has claimed adjustments towards inland freight and insurance wherever applicable as actual. The Company has also claimed an adjustment towards handling expenses @ Euro [***] /MT based on certain notional calculations. However, these claims are mostly towards order processing expenses and only a part of it is directly related to material handling expenses ex-works i.e., pumping and pipeline cost for the goods transported though the river jetty. The company has claimed that this notional adjustment should be made for all transactions, including export transactions, uniformly. The Authority notes that the expenses towards order processing are not valid claims for adjustment to arrive at ex-works prices for determination of Normal value. Since the intra-EU domestic sales as well as export sales are mostly from the river jetty all comparisons are proposed to be carried out at the jetty level and therefore, expenses towards the pumping and pipelines maintenance are not relevant and therefore, have not been adjusted. 42. Apart from these Oxea has also claimed adjustments towards the post supply credit cost on domestic sales as they involved varying credit periods. The credit expenses computed on the basis of the LIBOR+ spread applicable during the POI has been applied for such adjustment to arrive at the ex-jetty prices for the purpose of fair comparison. Accordingly, ex-jetty Normal Value of Oxea has been determined as follows:
Export Price: Oxea through M/s Petrochem Middle East FZE, Dubai, M/s ICC Chemical Corporation, USA; and M/s Vinmar International Ltd., USA
43. Oxea had exported [***] MTs of the subject goods to India through three unrelated distributors/resellers i.e., M/s Petrochem Middle East FZE, Dubai, M/s ICC Chemical Corporation, USA; and M/s Vinmar International, USA. All these entities have filed their respective questionnaire responses. Only one product type i.e., 50020050-2-ETHYLHEXANOL (in Bulk) has been exported to India during the POI. All the transactions are in FOB term. The payments have been realised against LC/TT with varying credit periods ranging from 60 to 90 days to the distributor/resellers. The distributor/resellers have resold the goods to the customers in India with similar terms.
44. The expenses towards internal transport and insurance have been provided and verified to work out ex-works prices. The exports have been from the river jetty alongside the plant. Since the intra-EU domestic sales are also from the jetty all comparisons have been made at the jetty level and therefore, no adjustment has been made towards pipeline maintenance and pumping cost.
45. Oxea has negotiated the LCs and realised the TT payments after varying credit period. The credit cost has been computed based on the number of days of credit and LIBOR+ Spread applicable during the period of investigation to adjust the export sales prices. In addition to the above the bank expenses incurred for negotiation of the LCs have also been adjusted to arrive at net export price at the jetty level. Accordingly, ex-jetty export price of Oxea has been determined as follows:
(b) All other Producer and Exporters from the European Union
47. For all other non-cooperating producers and exporters in the European Union the Normal value, export price and dumping margin have been determined on facts available basis taking into account the data of the cooperating exporter as follows:
G.2 Malaysia
48. As per the import data 26691MTs of the subject goods were imported from Malaysia during the POI. Only one exporter of the subject goods in Malaysia, i.e., M/s BASF, Petronas Chemicals Sdn Bhd., has submitted questionnaire response as the producer and exporter of the subject goods from Malaysia.
(a) BASF PETRONS Chemicals Sdn Bhd, Malaysia (BPC) – Producer & Exporter
49. BASF PETRONS Chemicals Sdn Bhd, Malaysia (BPC) is a Malaysian based joint venture between BASF SE, Germany and Petroliam National Berhad (PETRONAS), Malaysia, under its subsidiary PETRONAS Chemicals Group (PCG). BPC produces the subject goods from Natural Gas and Propylene. Major part of the Propylene is procured from Petronas, Malaysia through pipeline under long term pricing arrangement based on a formula which includes a combination of the US Gulf CFR contract price, European CFR Contract Price, and South East Asia CFR Spot Price with freight adjustments on contract term and the rates are revised from time to time. Company also procures Propylene from Mitsui & Co. Ltd. under similar terms. Natural Gas is also procured from Petronas at Govt. Regulated Price applicable to various sectors. Both the raw materials are received through pipeline and directly charged to the reactor.
50. BPC sells the goods in the domestic market as well as in the export markets, including India directly. On the basis of the questionnaire response filed, BPC was asked to provide additional information, which was submitted.The data submitted by BPC was also verified through an on-spot investigation carried out in Malaysia to the extent necessary. Accordingly, normal value and export prices of BPC have been determined based on the verified data as follows:
Normal Value: BPC
51. BPC had sold [***] MTs of the subject goods in the domestic market during the POI against [***] transactions for a total value of US$ [***]. All sales were directly to unaffiliated end users. Cost of productions of the producer was determined based on the verified cost data and additional information called for from the producer as US$[***] / MT. The domestic sales transactions were subjected to ordinary course of trade test against the above verified cost of sales of the subject goods for determination of normal value.
52. In their post disclosure submissions the exporter has disputed the determination of the cost of sales and has also pointed out certain error in the determination and Ordinary Course of Trade test. The Authority notes that cost of sales have been determined taking into account all verified accounting data of the producer. However, the error in computation of the normal value has been rectified and it was found that [***] % of the domestic sales are found to be profitable sales and in the ordinary course of trade. Therefore, all profitable domestic sale transactions have been considered for determination of normal value for this producing exporter.
53. The goods were sold on delivered basis to unrelated domestic customers and the supplies were in tankers (Iso-tanks). The invoicing to the domestic customers was mostly on monthly basis and payment is received upto the end of the second month of the invoicing month. Therefore, no credit expense is involved. Only inland freight expenses and miscellaneous expenses including bank charges and packaging are involved in domestic transactions for adjustments to arrive at ex-works prices.
54. Apart from these actual expenses the Company has also claimed level of trade adjustment to the domestic sales prices at the rate of [***] % of the invoice value on the grounds that the domestic sales are to direct end users whereas the export sales to India involve a commission of [***] % to BASF India which acts as their sales agent. However, it could not be substantiated as to how this affects the prices in the domestic market or export market and therefore, affects the price comparability. Therefore, this claim has not been accepted. Accordingly, the ex-works Normal Value of BPC has been determined as follows:
Export Price: BPC
55. During the POI the Company exported [***] MTs of the subject goods to unrelated customers in India against [***] transactions for a total value of US$ [***]. The sales are directly to unaffiliated customers in India who buy in bulk. The transactions are negotiated by BASF India and in turn a commission of [***] % of the invoice value is paid to BASF India against each transaction. Export sales transactions were in CIF term. The goods are directly pumped to the ship through the pipeline and jetty maintained by the Port Authority for which a user fee is charged and included in the port authority charges. Adjustments towards ocean freight and other expenses such as port authority charges/pipeline charges, surveyor charges, customs clearance charges, shipping agent charges etc. reported collectively as Inland charges were verified from the documents as well as the system. The Company also incurs marine insurance, bank charges, and customs fees etc. which have been collectively reported as other expenses.
56. The export sales to India are either on LC or DA terms with credit period of 60 days for which adjustment has been made at KLIBOR + spread of 1.75%. Against certain transactions additional credit period up to 180 days have been extended by BPC on payment of interests @ LIBOR rates. Therefore, for the extended period of credit with interest no adjustment has been made to arrive at net export price at ex-works level. Accordingly, the net ex-works export price works out as follows:
Dumping Margin: BPC
57. The Normal Value so determined at the ex-works level has been compared with the net ex-works export price to arrive at the dumping margins as follows:
(b) All other Producer and Exporters from Malaysia
58. For all other non-cooperating producers and exporters in Malaysia the normal value, export price and dumping margin have been determined on facts available basis taking into account the data of the cooperating exporter as follows:
Export Price: LG Chem with M/s Vinmar International Ltd., USA and M/s Hyundai Corporation, Korea
64. During the POI LG Chem exported [***] MT of the subject goods to India for a total value of US$ [***] against [***] Transactions. Out of these exports only [***] transaction involving [***] MT was sold through M/s Vinmar International, USA and rest of the quantity was sold through M/s Hyundai Corporation, Korea. LG has sold the goods to the respective traders/exporters on FOB term at port in Korea and all expenses upto the port have been incurred by LG Chem. The company has provided information on adjustments on account of Inspection Fee, Inland Freight, Handling Charges, Credit Expenses, Bank Charges, and Customs Agent Fee, wherever applicable. For the consignments directly pumped from the plant to the Port the Company has provided the cost of pumping which has also been taken into account for adjustment to the export price.
65. The Company has also claimed a positive adjustment towards Drawback received by it on exports based on total claims received and total exports made during the period. However, the Company could not provide the supporting documents for the drawback claimed for the exports to India and the basis for such claim. Therefore, adjustment claimed for drawback received has not been admitted. Accordingly, net ex-works export price for LG Chem and its exporters works out as follows:
(b) All other exporters in Korea RP
67. For all other non-cooperating producers and exporters in Korea RP the normal value, export price and dumping margin have been determined on facts available basis taking into account the data of the cooperating exporter as follows:
68. Neither LG Chem, nor any other interested party from Korea RP, has filed any comments to the disclosure statement and therefore, has not disputed the determination with respect to Korea RP. Therefore, the determination is confirmed.
G.4 Indonesia 69. As per the import data 25,763 MTs of the subject goods were imported from Indonesia during the POI. M/s P. T. Petro Oxo Nusantara (PON), one of the major producers and exporters of the subject goods in Indonesia, has filed questionnaire response. During the POI this producer has exported the subject goods directly to India and also through M/s Sojitz Asia Pte Ltd. Singapore. M/s Sojitz Asia Pte Ltd. Singapore has also filed questionnaire response as the exporter of the subject goods. Therefore, these two parties have been examined for determination of their dumping margin. (a) PT. Petro Oxo Nusantara (PT PON) 70. M/s P. T. Petro Oxo Nusantara (PT PON), a public sector joint venture in Indonesia, is a major producer of the subject goods in Indonesia and supplies the goods to its related downstream producer in Indonesia and exports to various countries, including India. The major raw material i.e., Propylene is imported or/and indigenously purchased from unrelated suppliers on contractual terms or on spot basis and imported through tanker ships. Natural Gas is procured from the Govt. owned Company as well a private source. The data submitted by PT PON and Sojitz Asia were verified in an on-spot investigation carried out in the premises to the extent possible and found necessary and determination of normal value and export price of this producer and its exporter have been determined based on the verified data as follows: Normal Value: PT PON 71. PT PON sold [***] MT of the subject goods in the domestic market with a value of USD [***] against [***] transactions. The entire domestic sales of the Company during the POI are to two related companies in Indonesia i.e., M/s [***]; and M/s [***]. It has been submitted by the company that these two companies consume the subject goods for manufacture of other products such are plasticizers (Dioctyl Phthalate). It was pointed out that the related buyers consume the goods and are not re-selling the subject goods to any other company and therefore, the Normal Value cannot be determined on the basis of the re-sale prices of these related parties in the domestic market. Since the domestic sales are affected by relationship between the buyer and seller and there is no sales in the domestic market at arm’s length third country export transactions of PT PON were also examined. 72. PT PON sold [***] MTs of the subject goods in third country markets [***] % of which was to China. Exports China are at very low prices and China, being a non-market economy, have not been considered as an appropriate third country for determination of normal value based on the prices to that market. Apart from China they have sold [***] MT of the subject goods to Australia during the POI. Though the percentage of sales to Australia is insignificant compared to the total third country exports of the Company, the volume is significant compared to the exports to India. Australia, being a market economy, the Authority proposed to adopt the third country exports to Australia for determination of the Normal value in terms of Sec 9 A (1) (c) of the Act. 73. PT PON, in its post disclosure submissions, has argued that their domestic sales should have been considered for determination of its normal value as no evidence on record suggests that PT PON’s sales to its related company in the domestic market are not at arm’s length. Alternatively, PT PON’s cost of production should have been considered for determining its normal value as the same has been duly verified. It has been further argued that even if the Authority wishes to determine normal value based on PT PON’s sales to a third country, its exports to China should be considered for such determination as the exports to China are above the cost of production. The Authority has incorrectly disregarded exports to China PR for determination of normal value. It has been argued that the exports to Australia are insignificant in comparison to its exports to China PR and therefore, do not provide a comparative representative price and would not pass the sufficiency test for determination of Normal Value as these sales are less than 5% of exports to India. It has also been argued that the exports to Australia are not in bulk form and therefore, not comparable to Indian sales. 74. PT PON has also submitted that it appears that the DA has not taken all export transactions to Australia while determining the Normal value. It appears that four transactions made to Marchem Australia Pty Ltd., which were actually consigned to Australia, have been inadvertently taken as exports to Singapore and China. If all these transactions are considered dumping margin for PT PON would be either de minimis or nil. 75. The Authority notes that the disclosure clearly mentioned that since the entire domestic sales of the subject goods of PT PON are to the related parties in Indonesia, who in turn consume the same for downstream production, there was no means available to determine the Normal value by constructing the same from re-sell price in Indonesia. There is no other domestic sale in Indonesia which could have offered any basis for such a determination. Authority further notes that Art 2.2 of the ADA provides an implied hierarchy for determination of Normal value in a situation where normal value cannot be determined on the basis of the domestic sales. Therefore, the first alternative, i.e., third country exports of the company needs to be explored first before considering the second alternative of construction of the normal value based on cost of production of the producer. Therefore, third country sales were examined for such determination as this producing exporter has significant third country exports. Overwhelming exports are to China, which operates under non-market economy conditions. Therefore, China could not have been adopted as the ‘appropriate’ third country for the purpose of determination on normal value as the selling price to that country is likely to be affected by non-market economy condition in that country. 76. As regards the arguments of the exporter that the exports to Australia does not fulfil the sufficiency criteria the Authority notes that footnote 2 under Article 2.2 provides the flexibility and discretion to the Authority to accept a lower ratio where evidence demonstrate that such lower ratio are nonetheless of sufficient magnitude to provide for a proper comparison. Therefore, considering the volume of exports to Australia the same has been considered sufficient to provide for a meaningful comparison and determination of normal value. 77. The Authority has also examined the submissions of the exporter that some transactions to Australia have been inadvertently excluded for determination of normal value. It is noted that the exporter provided the third country transactions alongwith the names of countries to which they were consigned/exported, which showed 8 transactions to Australia. Post disclosure they have intimated that there were 4 more transactions to Australia against which the country of export was wrongly shown in their response as Singapore and China. They have now produced the invoices against these transactions at this late stage to prove that those transactions were to Australia. However, examination of these invoices indicates that though the country the freight components claimed against these transactions are unusually high compared to other transactions making the net prices much lower compared to the other transactions. There is no way in which these transactions and the claims for adjustment can be verified at this late stage. Therefore, the Authority is constrained not to accept these transactions for determination of the normal value for this producer/exporter at this stage. 78. PT PON has further argued that their exports to Australia are not in bulk and therefore, not comparable with the exports to India. However, examination of the invoices shows that these goods have been shipped in Iso-tanks and flexibags which are bulk form of sales, not in drums which are considered as packed goods. Therefore, the arguments of the exporter in this regard are not valid. 79. Accordingly, the third country sales transactions to Australia have been subjected to ordinary course of trade test with reference to the verified cost which has been determined as US$[***]/MT. All such sales are found to be profitable. Therefore, all transactions have been considered for determination of normal value. Export sales are on CFR/CIF terms with credit period upto 90 days. All exworks expenses towards ocean freight, insurance, jetty charges, surveyor fees and port handling charges and credit expenses have been adjusted to arrive at the ex-works Normal value as follows:
Export Price: PT PON with Sojitz Asia Pte Ltd (PON), Singapore as Exporter
80. During the POI, PT PON exported the subject goods through two sales channels i.e., (i) through unrelated trader, i.e., M/s Sojitz Asia Pte. Ltd., Singapore; and (ii) directly to unrelated Indian customers. M/s Sojitz Asia Pte. Ltd., a wholly-owned subsidiary of Sojitz, Japan, and a pure trading Company, has also filed a separate questionnaire response providing details of the goods exported by them to India during the POI. PT PON exported [***] MTs of the subject goods to India during the POI out of which [***] MTS were exported through Sojitz. Rest of the quantity has been exported directly. Sojitz Asia has a 100% subsidiary company in India – Sojitz India Private Ltd. However, Sojitz India is not involved in sales of the subject goods to India. Sojitz Asia, Singapore exports the subject goods directly after purchasing the same from PT PON.
81. PT PON sells the goods to India, directly or through Sojitz, on CIF/CFR terms. The payment terms are TT with varying credit period upto 90 days. For sales through Sojitz, Sojitz raises separate invoice on Indian customer on CFR/CIF terms against LC with credit periods varying from 60 to 180 days.
82. The export sales to India are in bulk and PT PON has provided details of expenses towards (i) Ocean freight, (ii) Overseas insurance, (iii) Credit cost, (iv) Bank charges, (v) Surveyor fees, (vi) Jetty Charges and (vii) port handling, customs broker fee, etc. to arrive at ex-factory price. Accordingly, export price of PON has been determined as follows:
Dumping Margin: PT PON with Sojitz Asia Pte Ltd (PON), Singapore as Exporter
83. The Normal Value, so determined at the ex-works level, has been compared with the net ex-works export prices to India to arrive at the dumping margins as follows:
(b) All other producers and Exporters in Indonesia 84. For all other non-cooperating producers and exporters in Indonesia the normal value, export price and dumping margin have been determined on facts available basis taking into account the data of the cooperating exporter as follows:
Export Price: Albayroni through SABIC
96. As per the information filed by the responding producer and exporter from Saudi Arabia, during the POI Albayroni exported [***] MT of the subject goods to India through SABIC. SABIC has a related company in India – SABIC India Pvt. Ltd., which gets commission for sales support as per agreement between SABIC and SABIC India. SABIC procures orders from Customers and directs Albayroni to effect delivery. Albayroni raises an invoice on SABIC at a provisional price. SABIC raises an invoice on the customer. Modifications to price, after sales, are adjusted through debit or credit notes on the customer. SABIC deducts a market fee and all delivery related expenses from the final price charged to the customer and the balance amount is paid to Albayroni. Negotiations are made with the customer on spot business and CIF basis. Adjustments for ocean freight, insurance, credit cost, bank charges and marketing fees have been made to see whether the net back paid by SABIC to Albayroni covers all expenses and reasonable profit. Albayroni receives the net back payment from SABIC after the credit period and also incurs certain expenses. Therefore, from the net back paid by SABIC to Albayroni the expanses of Albayroni, i.e., Inland transport and Surveyor fee as well as the credit cost of SABIC has been deducted to arrive at the net ex-factory price.
97. Because of significant variation in prices export prices have also been determined on monthly basis which work out as follows:
Dumping Margin: Albayroni with SABIC
98. Net ex-works Normal Value determined has been compared with the net ex-works export price to determine the dumping margin for the above producer and exporter as follows:
“As soon as possible after the initiation of the investigation, the investigating authorities should specify in detail the information required from any interested party, and the manner in which that information should be structured by the interested party in its response. The authorities should also ensure that the party is aware that if information is not supplied within a reasonable time, the authorities will be free to make determinations on the basis of the facts available, including those contained in the application for the initiation of the investigation by the domestic industry”.
102. Therefore, the Authority proposes to consider facts available for determination of Normal value in the USA. In this connection the Authority notes that significant volume of the subject goods have been imported into the USA from Saudi Arabia during the POI and the weighted average sales price from Saudi Arabia to USA is available. Since the goods are expected to be entering the domestic market at those prices this information has been used as the best facts available for estimating the normal value in the USA. Accordingly, the Normal value in USA has been determined as follows:
Dumping Margin: USA
104. Net ex-works Normal Value determined has been compared with the exworks export price to determine the dumping margin for all producer and exporter in the USA as follows:
Dumping Margin: Chinese Taiepi
109. Net ex-works Normal Value determined has been compared with the exworks export price to determine the dumping margin for all producers and exporters in Chinese Taipei as follows:
112. The dumping margins of the subject goods so determined are significant and above de minimis except for the goods originating in or exported from Saudi Arabia. The dumping margin of the goods exported from Saudi Arabia has been found to be de minimis. Therefore, the Authority drops the investigation against Saudi Arabia in terms of Rule 14 (b) of the Rules. Accordingly, further examination of injury and causal links have been carried out with respect to the rest of the countries/territories i.e., the European Union, USA, Malaysia, Indonesia, Korea RP and Chinese Taipei. Hereafter the term subject countries/territories shall refer to these countries/territories only.
113. In its post disclosure submissions the producer/exporter from Saudi Arabia have argued that since the dumping margin for the producers and exporters in Saudi Arabia has been found to be de minimis the investigation against Saudi Arabia should have been terminated by issue of a separate public notice without issuing a disclosure statement with regard to this. The Authority notes that the investigation could not have been terminated against one country without all interested parties, particularly the domestic industry, having been given an opportunity to comment upon it keeping in view the principles of natural justice.
H. Determination of Injury to the Domestic Industry
H.1 Cumulative assessment of Injury
114. Annexure II (iii) of the Anti Dumping Rules provides that in case imports of a product from more than one country are being simultaneously subjected to anti dumping investigations, the Designated Authority will cumulatively assess the effect of such imports, in case it determines that: -
(a) the margin of dumping established in relation to the imports from each country is more than two percent expressed as percentage of export price and the volume of the imports from each country is three percent of the imports of the like article or where the export of the individual countries is less than three percent, the imports cumulatively accounts for more than seven percent of the imports of like article, and;
(b) Cumulative assessment of the effect of imports is appropriate in light of the conditions of competition between the imported article and the like domestic articles.
115. The domestic industry, in its submissions, has argued that exporters from more than one country are dumping the subject goods in the Indian market and margins of dumping from each of the subject countries/territories are more than the limits prescribed above. Quantum of imports from each of the above countries is more than the de-minimis limits. Therefore, cumulative assessment of the effects of imports is appropriate since the exports from the subject countries/territories directly compete with the like goods offered by the domestic industry in the Indian market.
116. The responding exporters have argued that apart from the condition of competition between the imported products and the domestic like product, the conditions of competition between the imported products inter se needs to be assessed to satisfy the provision of Annex II (iii) of AD Rules as has been the practice of the Authority. By virtue of the ASEAN-India FTA and India-Malaysia CEPA, the applicable customs duties are different for imports from Malaysia and Indonesia as compared to other target countries such as EU, USA, Korea, Taiwan and Saudi Arabia. This difference in tariff rates has led to a fundamentally different development of imports from the two sets of subject countries. The duty preference allowed imports from Malaysia and Indonesia to increase at a higher rate as compared to imports from EU, US, Korea, and Saudi Arabia. As a consequence, the share in imports from countries that are amenable to preferential duties has increased by 27% (from 16% to 43%), as compared to imports from countries that are not amenable to preferential duties which decreased significantly by the same amount i.e. 27% (from 84% to 57%).
117. It has been further argued that the EU and Saudi Arabia are additionally singled out by the fact that they are the only two subject countries/territories not benefitting from the FTA. Their import shares have decreased significantly over the period under investigation. Accordingly, cumulative assessment of imports from the EU with the other subject countries is not appropriate in the present investigation since the conditions of competition between subject countries are not comparable
118. The domestic industry has submitted that there is no basis for the above argument. It has been argued that the Rules require three conditions to be specified and all are satisfied. Since the Designated Authority considers landed price of imports, cumulative assessment of import is appropriate despite different levels of customs duty. The consumers consider landed price of import and therefore, the applicable customs duty are applied. If the level of customs duty are different, the same does not imply that the imports are not competing interse. Petitioner also refers to the decision of the Supreme Court in the matter of Holder Topse which upheld the decision of the Designated Authority to determine different quantum of injury margin for the product falling under two different HS codes with two different customs duties.
119. The Authority notes that this investigation has been initiated against alleged dumping of the subject goods from the European Union, Indonesia, Korea RP, Malaysia, Saudi Arabia, Chinese Taipei & the USA. Determination of the margins of dumping in the previous section indicates that the margins of dumping for the subject goods from each of the countries mentioned herein above are more than the limits prescribed above, except the imports from Saudi Arabia where the dumping margin is de minimis and the investigation against this country has been dropped in terms of Rule 14 (b) of the Antidumping Rules. The volume of imports from each of the other subject countries is also more than the limits prescribed. The interested parties have raised the issue of differential duties against certain countries under FTAs leading to increased imports from those countries vis-a-vis other named countries in this investigation. The interested parties argue that this indicates that the imports are not competing inter-se and therefore, cumulative assessment of injury not appropriate in this case. The Authority notes that though the volume of imports from some of the countries enjoying preferential duties have increased the CIF price range and the landed values at which the goods are being imported from the subject countries indicates a clear inter se competition between the imports from these sources in the Indian market. Therefore, the arguments of the interested parties that there is no inter se completion between the imports from the subject countries/territories do not hold good.
120. The Authority also notes that the exports from the subject countries/territories are directly compete with the like goods offered by the domestic industry in the Indian market. Domestic producer and exporters from the subject countries/territories sell the like product to the same category of customers and both are competing in the same market. Both are being used by the consumers interchangeably. In view of the above position the Authority holds that cumulative assessment of the effects of imports is appropriate and accordingly, cumulative assessment of the effects of dumped imports from all dumped sources has been carried out to examine the injury and causal links.
H.2 Issues raised by the parties to the investigation
(a) Views of the other interested parties
121. The other interested parties, including the responding producers and exporters in the subject countries and territories; importers and user industry associations in Indian; and the Governments of some of the subject countries/territories, in their respective submissions have inter alia argued as follows:
• That even when there is a huge demand supply gap, the petitioner was closed for substantial time during the POI due to raw material supply issues and later the petitioner claimed injury on account of dumping which is untenable. Since the domestic industry was not in operation for reasons of raw material supply issues during the substantial part of POI, the users were left with no option but to import. Therefore, existence of material injury to the petitioner on account of alleged dumped imports during the POI when their plant was closed for minimum 212 days out of 455 days during the POI, on account of identified and admitted other reasons, needs to be substantiated;
• Domestic industry has provided an additional column in the proforma IVA related to POI under the heading performance ‘if there is no idle time’ without disclosing any methodology based on which such figures have been worked out by the petitioner. The petitioner has attempted to make up a case of ‘ideal injury’, thus, the petition suffers serious and irreparable infirmities. The claim of adjustment on account of loss of production has no legal or factual basis. The petitioner has not even elaborated on the detailed methodologies adopted;
• That the methodology for working out “if there is no idle time” column in Proforma IV A has not been disclosed. Further, the essence under AD act and rule is ‘material injury’ and not ‘ideal injury’.
• That the credit rating agency ICRA has revised and lowered the credit rating of the applicant in November, 2013 in view of the expected weakening of APL’s profitability and debt protection metrics during the current year owing to disruption in supply of its key raw material, Propylene. It further states that the outlook on long term rating continues to be negative on account of the uncertainty regarding timelines for resumption of stable supplies from HPCL;
• That there is no causal link between the alleged injury to the domestic industry and the imports of subject goods from subject countries in the present case making the entire investigation ab initio void and liable to be terminated immediately;
• That price undercutting of the imports are negative in respect of several countries implying lack of causal links. The injury margins are negative against most of the countries. Adjustment of credit costs claimed by the domestic industry is without any basis. The petitioner has fabricated the landed price and net sales realization to create positive price undercutting. The Authority should reject such baseless and self serving claims upfront.
• That demand of propylene, which is the major raw material for production of the subject goods, shows decreasing trend and will reach around 2% by FY 2016-17. It indicates that major Propylene manufacturers convert it to Polypropylene as they use Propylene in their captive consumption. It shows source of Raw Material 2-Ethyl Hexanol in India will be unavailable or less available so it is essential to import the 2-EH;
• Profitability to Polypropylene compare to 2-EH is higher by 100 USD/MT approx. 50%, which keep refiners interest more to manufacturing Polypropylene compared to manufacturing 2-EH;
• That HPCL is the only sole supplier of Propylene to APL. Propylene is in the gas form, it can be transported directly by pipeline. If either HPCL or APL plant is affected, it makes a question mark to availability of Raw Materials of Oxo-Alcohols(2-EH). Ideally at least there must be 2 or more supplier for Raw Materials for any organization. It makes a question mark to availability of Raw Materials of Oxo-Alcohols (2-EH). In case of HPCL intended to manufacture Polypropylene what other source APL has to cater the Indian Market of 2- EH? It will force all users of 2-EH to shut down their plants.
• That some of the consumers of the subject goods like Deepak Nitrite Limited manufacture Cetane Improver called 2- Ethylhexyl Nitrate(2-EHN) from 2- Ethyl Hexanol (2-EH), which is used by refineries in boosting Octane Number of Diesel. The customers of Cetane Improver are refineries in public sector undertakings like Indian Oil Corporation, BPCL, HPCL, and also in private sectors refineries like Reliance, Essar, HMEL and Shell. The supply contracts with customers are generally on fixed price term having penalty clause on monetary values, black listing and other legal consequences, in the event of delays or no supplies to these customers. Therefore, disruption of supplies by the domestic industry affect their production and commercial interests;
• That relevant extracts in the annual report 2013-14 of the petitioner clearly establish that the company operated at 110% of the designated capacity for a period of 1.5 months covering July – August 2013 after HPCL’s PRU commissioning post expansion. Therefore, claim of 39% capacity utilization during POI by the domestic industry is grossly incorrect;
• That the Petitioner has evidently not lost customers as it has operated at above 100% capacity utilization and had a production to sales ratio of close to or above 100% throughout the entire investigated period. Imports have merely taken up the portion of the market that the Petitioner could not supply to due to insufficient capacities;
• That the landed import price from subject countries has increased by 11.6% over the injury period, which is more than the increase in price by the Petitioner (8%) over the injury period;
• There is no injury to the applicant in terms of volume effect (production, sales volume & capacity utilization) or price effect (negative price undercutting). The Authority should reject the illegal computation of landed value, net selling price and resultant revised price undercutting determination.
• That Hon’ble CESTAT in Andhra Petrochemicals Ltd. v. Designated Authority – 2006 (201) E.L.T.481 (Tribunal) had earlier quashed the duty order on the grounds of lack of evidence of injury and causal link. Therefore, the Authority is required to terminate this case and initiate a new case considering new POI when the plant was in running condition;
• That India’s demand during POI was 1,18,000 MT, whereas the domestic industry has capacity to cater only about 48,000 MT. Local demand being more than 2.5 times the domestic production domestic users are dependent on imports from the Subject Countries;
• That even after operating at the rate of 104% of capacity utilization, the profitability of the domestic industry declined, which shows the degree of other reasons impacting the company.
• High and erratic cost due to internal reasons has been attributed to imports from subject countries. A comparison of the Petitioner's consumption of power and steam per unit produced clearly shows a substantial increase in 2013-14 because of inefficiencies resulting from the major shutdowns and subsequent restarts of the production equipment due to a key raw material supply shortage;
• That the Authority should take into consideration the loans taken by the Petitioner and only those loans that relate to or may be apportioned to subject product should be taken into account while determining non-injurious price;
• Designated Authority should strictly apply the principles laid down in Annexure III of the Rules for the purposes of determining non-injurious price. Exorbitant 26% return on Gross Fixed Assets claimed by the domestic industry is without any justification.
(c) Views of the domestic industry
122. The domestic industry, in its various submissions, has inter alia argued:
• That the dumped imports from the subject countries have increased significantly in absolute terms and in relation to production & consumption in India and the imports from the subject countries are undercutting the prices of the domestic industry to a significant extent;
• That the imports from the subject countries are suppressing the prices of the domestic industry and preventing the price increases that would have occurred in the absence of dumping;
• That the performance of the domestic industry has steeply deteriorated in terms of production, domestic sales, capacity utilization, inventories, market share, profits, return on investments, cash flow, and has reached negative levels;
• That the performance of the domestic industry was sub-optimal in respect of production and domestic sales. Decline in sales volumes has adversely affected the production and capacity utilization. However, decline in production and capacity utilization is partly due to dumped imports and partly due to unavailability of raw materials;
• That dumping margins of the imports from the subject countries are significant and import prices are significantly affecting the prices of the domestic industry resulting price suppression. Growth of the domestic industry is adverse in terms of a number of parameters;
• That considering the interest rate offered by the banks in India, importers, who are availing long credit periods from the exporters, are getting credit at much lower rate thereby making imports significantly cheaper as compared to domestic industry prices. That is one of the reasons for preference of imports. Therefore, suitable adjustment should be made accordingly to the net sales realization of domestic industry and landed price of imports;
• That the production in the POI declined on account of non-remunerative prices for some time and shortage in the supply of raw material for some time. Considering that the loss of production some period during the POI is due to other factors, the petitioner has made necessary adjustments for the idle time cost for the purpose of working out injury caused by dumped imports. It would be seen that even if the petitioner had achieved normal production in the POI, the selling price would have been below cost of production;
• That the Authority may either (a) eliminate the period when the plant was closed because of non-availability of raw materials from the entire injury data and examine the performance of the domestic industry thereafter; or, (b) consider the performance of the domestic industry as it would have been had the plant not suffered from raw materials non availability;
• That APL's Oxo Alcohols unit employs the latest and the best technology available globally with high efficiencies. It has established operations at high levels of production on a consistent basis, barring the Force Majeure situation;
• That the decline in profitability of the domestic industry during 2012-13 when the plant was operating at 104% clearly establishes that it is the dumping of the product which has caused injury to the domestic industry;
• That even when dumping in POI is limited to Jan, 2014 to June, 2014, the injury period is from April, 2010 to June, 2014 and the DA is required to determine whether the domestic industry has suffered injury by considering performance over the injury period;
• That the domestic industry need not be in a position to meet the demand for the product in the country as a legal pre-requisite for seeking relief under anti dumping law. This is borne out not only by repeated decisions of the Designated Authority but also decision of the CESTAT [in the matter of DSM Idemitsu Ltd. Vs Designated Authority 2000(119) ELT 308];
• That APL's production capacity is around 35% of Nation's demand for 2-EHA. The demand-supply gap is met through imports which will continue to be imported until the additional capacities are created in the country;
• That the selling prices reported by the domestic industry are on the basis of the prices of the imported product to the consumers. However, there is a significant time lag between placement of orders by the consumers on the foreign suppliers and the arrival of goods in India. By contrast, the domestic industry supplies the goods immediately;
• That since the selling price of the domestic industry is dependent on the import price prevalent in the international market petitioner submits that the price undercutting should not be determined by comparison of landed price of import with the selling price of the domestic industry. Instead, the Authority should compare the price at which orders have been placed by the consumers on the domestic industry and exporters. Petitioner refers to the issue of date of sale in this regard where extensive investigations are conducted globally;
• That since the domestic industry is negotiating its price on the basis of prices prevailing in the international market the price undercutting could alternatively be determined by adopting the price mentioned in the trade journals. This would clearly show that the price undercutting is significantly positive;
• That if the contention of the Association is that the Authority should not exclude the idle time cost, the Authority may proceed accordingly. Either way, the situation shall show far higher injury than the one claimed by the domestic industry;
• That deterioration in performance of the domestic industry clearly establishes that the domestic industry has suffered injury. Admittedly, there are three reasons for this injury to the domestic industry – (a) dumping of the product in the country and (b) inability of the domestic industry to produce the product for some time when the raw material was not available with the domestic industry and (c) decision of the domestic industry not to recommence the production despite availability of raw materials during the period Jan, 14 to June, 14 because of significant dumping in the country resulting in grossly unfair price available to the domestic industry;
• That despite achieving reasonable level of capacity utilization, the domestic industry is still suffering financial loss. This performance for the post POI period further establishes that the domestic industry is suffering significant adverse price effect in the form of financial loss, adverse return on capital employed and cash flow which is clearly due to dumping;
• That the decision of the CESTAT, referred to by the interested parties merely shows that the Authority should examine various factors of injury. The decision does not imply that merely because there are some other factors affecting the domestic industry the Authority cannot proceed with the case. Rules has provided for consideration of "a" causal relationship and not for consideration of "the" causal relationship. The placement of ‘a’ in place of ‘the’ is extremely significant in this regard and is clearly borne out by the decisions of the WTO. It is no longer res judicata that – (a) dumping need not be the sole cause of injury, (b) there may be other factors also which may at the same time be causing injury to the domestic industry; (c) presence of other factors does not imply that the Authority shall terminate the investigation;
• That in addition to consumption of power in the production plant, significant power consumption by the company is in various operations. Further, this also includes the element of power consumed in various administration facilities. The cost of utilities in the plant is normal and reasonable and has not increased significantly at all as has been argued by the interested parties;
• The reason for foreign producers to resort to dumping is the fact that in the global market capacities for consideration of PUC are significantly higher than the demand for the PUC. Thus, while association is considering the demand supply gap in India, the Association is conveniently hiding the fact very well known to their members that the product is significantly surplus in the global market;
• That production of EHA by the petitioner, since its inception, clearly shows that there is no erratic pattern in production by the petitioner. In fact, the petitioner has consistently produced and sold close to capacities and some time even beyond capacities;
• That disruption in Propylene supply is only for a short period i.e., 2 to 3 months which is a force meajure situation (i.e., fire accident). The Plant was stopped for a longer period due to non-remunerative selling prices which was much lower than marginal cost of production;
• That ICRA Report quoted by the interested parties is based on the consideration of total financials of the Company i.e., lower capacity utilization and loss incurred due to non-remunerative selling prices;
• That Propylene is a specialty product produced by Oil Refining companies and/or Hydrocarbon (mostly Naphtha/Natural gas) units. Propylene, in general, is a not commodity product and mostly the Refinery's Propylene is used for downstream products other than the Polypropylene due to lack of economies of scale for Polypropylene. Oxo Alcohols is one such product. Projects based on such single source of specialty product are not uncommon in the Industry;
• That petitioner has collected DGCI&S transaction wise data after initiation of investigation. The information on record shows there is no material difference between published and transaction wise data.
• That despite high level of capacity utilization the domestic industry suffered injury even in 2012-13. Even after achieving significant production in 2015-16, the domestic industry continues to suffer financial losses, which clearly establishes injury due to dumping from subject countries;
• That various expenses for the period of non production have already been excluded. Once these expenses are excluded, petitioner wonders why the data should still show loss. The negative growth in profits, return on investment and cash flow even after excluding expenses for the shut down period clearly establishes adverse effect of dumping on the domestic industry;
• That while employees were not retrenched during the period of "non production", salaries paid during this period have not been included in determining profits of the domestic industry;
• That the position of the company is very precarious and the sole hope that company now has is the protection through imposition of anti dumping duties on the subject goods.
• That significant interest free credit is being extended by the foreign producers to the importers directly making the domestic sales unviable as the petitioner is unable to extend any credits to the customers. On the other hand, petitioner is buying Propylene from public sector Hindustan Petroleum Limited on cash basis. This is leading to a minimum impact of 3% on the petitioner’s prices, which is very significant for its operations. Therefore, the import prices should be duly adjusted to neutralize the effects of credit benefits granted by the exporters for a fair comparison;
• That even when imports technically attract VAT, practically, the importers do not incur this cost. However, all supplies made by the domestic industry attract CST which is leading to a difference of 2% in the prices. As these are the taxes and levies imposed by the Government all business enterprises need to follow the same;
• That majority of the imports are happening at Kandla Port which is about 250- 300 Kms from the major consumers of these products. As opposed to this, the domestic industry has to transport the finished products by about 1000 kms, whereas the raw material is procured across the fence through pipeline incurring no cost. It is unfair to Indian manufacturing sector that the freight cost on finished product is treated as inadmissible cost item and freight cost on raw material is treated as part of cost. If the objective of the calculations is to determine "injury to the domestic industry", it must be calculated after taking into account all the factors that affected injury.
• That the methodology followed by the Directorate for determination of NIP is leading to grossly low quantum of anti dumping duty. (c) Examination of the issues by the Authority 123. The Authority has taken note of the specific issues raised by the interested parties with regard to various injury and causal link parameters and those concerns have been addressed in the succeeding paragraphs in this analysis. Some of the general issues regarding injury and causal links have been examined as under: 124. As regards the issue of self inflicted injury due to closure of the plant for an extended period during the POI and lack of causal links the Authority notes that the investigation reveals that the plant was shut down for 263 days during the POI (15 months period). Detailed examination indicates that Propylene supply was disrupted due to fire and other maintenance issues at HPCL’s end for a total period of 231 days. For the remaining period though Propylene was available APL failed to lift it due to un-remunerative prices of 2-EH and production facility of APL remained shut down for that period.
125. The interested parties have argued that the petitioner domestic industry has suffered because of dependence on a single supplier of the vital raw material. Investigation reveals that most of the production units of the subject goods are linked to the producers of Propylene across the fence and therefore, raw material linkage, in a manner in which the petitioner operates, is not uncommon in this product. As far as production loss and its impact on the cost of production is concerned, the issue has been addressed by identifying the idle costs and not attributing this cost to the cost of production and sales so that injury on account of the plant closure is not attributed to the dumped imports to establish the causal link between dumped imports and injury suffered by the domestic industry. To that extent the concerns of the interested parties have been adequately addressed.
126. Further examination of the monthly production and sales data of APL reveals that APL has operated well beyond rated capacity in certain moths. But the sales realization of the goods in those months shows that the prices have been bench marked against the landed values of imports from the subject countries and have not recovered the costs, giving credence to the argument of the domestic industry that they have been forced to shut down the plant due to un-remunerative prices even when propylene was available.
127. As regards the arguments of the interested parties that there is a significant shift in preference of refineries to produce Polypropylene in place of Propylene and thereby affecting availability of Propylene for production of 2-EH, the Authority notes that this would be true for all global producers and therefore, the petitioner domestic industry cannot be singled out for denying the protection from unfair trade practices as per the Rules.
128. As regards the concerns of some of the users that their contracts with their end-users are on fixed price terms with penalties for delayed deliveries and disruption of supplies from the domestic producer affects their operations and therefore, they have to depend on imports, the Authority notes that the purpose of the antidumping duty mechanism is to remove the distortions in the market due to unfair trade practices and create a level playing field for all the players in the domestic market. Therefore, import option, in the event of domestic supply disruption, is not closed for these users. It would be in the interest of the users of the subject goods to have a viable and efficient producer in the domestic market than being fully dependant on imports.
129. As regards the earlier decision of the CESTAT setting aside the earlier duty on the grounds of lack of evidence of injury and causal link, the Authority notes that it was a separate investigation and the CESTAT’s order in that case was on the basis of the factual matrix of the situation that existed at that point of time and the examination of the factors examined by the Authority in that finding, therefore, has no bearing on this investigation. Earlier decision of the CESTAT no way restricts the Authority from conducting a fresh investigation in the factual matrix of the situation as exists at this point of time. The Authority has objectively examined all the injury and causal link factors afresh as it existed during the current investigation period to arrive at the final decisions. Therefore, arguments of the interested parties in this regard are not tenable.
130. As regards the submissions of the interested parties that the Authority should not allow higher return on investment claimed by the domestic industry for determination of non-injurious price, the Authority notes that the principles laid down in Annex-III to the Rules are consistently followed in all investigation for determination of the NIP irrespective of the claims of the domestic industry.
131. The Authority notes that the domestic industry has sought several adjustments to the domestic selling prices and import prices for determination of price effects of the dumped imports and injury margins.
132. As regards the arguments of the domestic industry that the differential in domestic taxes paid by the domestic industry on supply of the material should be adjusted, the Authority notes that comparison of the ex-works domestic selling prices, net of all local taxes and levies is carried out with the landed value of imports which does not include such local levies. Therefore, the comparison is fair and no further adjustments on account of local levies are called for.
133. As regards the arguments of the domestic industry that the freight cost should be adjusted in price comparisons of domestic sales and imports due to significant freight difference, the Authority notes that all comparisons are made at a particular level. Ex-works prices of the domestic industry are compared with the entry point landed prices of imports, as they are considered as at the same level of trade for the purpose of price comparability. The geographical location of the producers and consumers may depend upon various factors, including availability of raw materials and ease of transportation of finished goods etc. Similarly, the importers may prefer to import the goods through a particular port depending upon the logistics involved. These are commercial decisions of the various players and these factors cannot be taken into consideration for price comparability.
134. As regards the arguments of the domestic industry seeking adjustments on account of credit being extended by the exporters to the importers, which distorts the price comparability, the Authority notes that the investigation reveals that the exporters extend two kinds of credits to the importers i.e., normal free usance period of 60-90 days (sometimes upto 180 days); and in certain cases additional credit period of 120 to 180 days on payment of interest at LIBOR rates which works out to about 2% per annum, whereas the domestic industry sales the goods on cash basis. The arguments of the domestic industry have been examined in this context. Normally, for the purpose of determination of Normal Value and Export Prices of the exporter the notional credit costs, worked out on the basis of short term credit costs denominated in local currency for domestic sales and foreign currency in export sales, are deducted from the invoice prices to arrive at the net ex-works prices for comparison as this is one factor that affects price comparability due to difference in domestic and foreign currency interest rates and also credit periods.
135. So far, for comparison with the ex-works net sales realization of the domestic industry in India, the CIF price of the imports paid by the importer to the exporter, after the credit period, is not being adjusted for the notional credit availed by the importer. This was on the premise that the domestic industry also extends certain credit period to its customers in normal business practice. However, in certain cases, as is the case here, the domestic industry sales the subject goods in cash whereas the exporters are extending and the importers are availing extended credit periods up to 270 days, part of which is free and part of which is paid at LIBOR rates whereas the domestic cost of credit for the similar terms are very high. Therefore, the importers are availing significant interest rate arbitrage by getting credit from the exporters at cheaper rates whereas the domestic cost of credit in India is high. It has been argued that this makes the imports cheaper to that extent and thereby significantly affects the price comparability in the importing country market for price effect analysis, particularly when the domestic industry sales the goods without any credit and the prices are generally discounted in such a situation.
136. The interested parties, during the public hearing, argued that any such adjustment to the domestic selling prices or the landed value of imports to account for the credit cost would affect the principles of injury margin determination as laid down in Annex-III to the Rules and such adjustments cannot be made without amending the Rules. The Authority notes that Annexure III only provides for principles for determination of the Non- Injurious Prices and does not deal with the methodology of comparisons for determination of injury margins. Therefore, any adjustments to domestic prices or import prices for price effect analysis or injury margin computation will not be hit by any provision of the law. Rather the principles for such adjustment emerge from the Agreement and Rules which allow adjustments for factors that affect price comparability.
137. In its post disclosure submissions the domestic industry has reiterated its arguments on various adjustments claimed by them and has argued that the Authority has rejected request of the petitioner for inclusion of freight for determination of injury margin without considering that (a) a company has to incur freight cost on raw materials and finished products; (b) any manufacturer optimizes between the two; (c) freight cost on raw materials is a part of NIP, there is no reason why freight cost on finished product should not form part of cost in determining injury margin. Merely because the Petitioner decided to avoid freight cost on raw materials, the Designated Authority should not penalize the domestic industry by disallowing the freight cost on finished product. It has been argued that Brazil has two methodologies for determination of injury margin – a comparison of ex-factory price with CIF import price and delivered price with DDP prices. It is evident that both methodologies are appropriate and are required to be considered. It has been further argued that the Authority has rejected the contention of the domestic industry for consideration of credit period for injury margin determination because there is lack of clarity on some issues. Domestic industry argues that the impact of credit can be seen either in terms of "cost to the exporter" or "benefit to the importer". Therefore, these adjustments should have been allowed.
138. However, the Authority notes that though the arguments of the domestic industry in this regard have some merit the extended credit period and interest rate arbitrage also carries the exchange rate risk and cost of risk cover is often high. As far as freight adjustment for comparison with the imported goods are concerned, as noted earlier, as per the consistent practice of the Authority all comparison are carried out at a particular level. Therefore, the Authority confirms its view that without complete information actual freight on domestic sales and exports against each transaction and on various risks attached to credit period availed and implications thereof it may not be appropriate to make any such adjustments to the import prices/landed values for the purpose of price undercutting and underselling analysis.
139. Other issues raised by the interested parties and the domestic industry have been addressed in the relevant parts in this finding.
H.3 Examination of Injury and Causal Links
140. Annexure II to the Anti Dumping Rules in its relevant part provides that the examination of the impact of the dumped imports on the domestic industry concerned, shall include an evaluation of all relevant economic factors and indices having a bearing on the state of the industry, including actual and potential decline in sales, profits, output, market share, productivity, return on investments or utilization of capacity; factors affecting domestic prices; the magnitude of the margin of dumping; actual and potential negative effects on cash flow, inventories, employment, wages, growth, ability to raise capital investments.
141. In accordance with the Rules all economic parameters affecting the Domestic Industry as indicated above have been examined as under: -
(a) Volume effects of dumped imports and impact on domestic industry
i. Import Volumes and share of dumped imports
142. With regard to the volume of the dumped imports, the Authority is required to consider whether there has been a significant increase in dumped imports, either in absolute terms or relative to production or consumption in India. As noted earlier transaction-wise import data as reported in DGCI&S data and data collected from Kandla Port has been used for this determination. As per this data the imports of the subject goods during the injury investigation are as follows:
143. The above data indicates that the total volume of imports have increased in absolute term by over 3 times on annualised basis over the injury investigation period. However, the dumped imports from the subject countries have increased by about 5.5 times in the POI Annualised, compared to the base year.
ii. Share of dumped imports
144. The share of dumped imports in total imports is as follows:
145. The above data shows a significant jump in the share of dumped imports from the subject countries from about 50% of total imports in the base year to about 83% in the POI indicating significant displacement of other country shares in the import basket.
iii. Assessment of Demand/Apparent Consumption
146. Demand or apparent consumption of the product in India has been estimated as the sum of domestic sales of the petitioner and imports from all sources. The demand so assessed is as follows:
147. The above data indicates that there is a healthy growth in demand for the subject goods in India and the demand has increased significantly over the injury period. However, while the demand growth is about 87% compared to the base year the increase in dumped imports is almost 550% during the same period and the sale of the domestic industry has declined significantly after a healthy increase in 2011-12 and 2012-13. Thus the dumped imports have increased significantly in absolute term as well as in relation to the domestic production and demand. The Authority takes note of the fact that a major part of the decline of the domestic sales of the petitioner is due to plant shut down for an extended period during the investigation period, partly because of unavailability of raw materials and partly because of other reasons, including un-remunerative prices as claimed by the petitioner.
(b) Price effect of dumped imports and impact on domestic industry
148. With regard to the effect of the dumped imports on prices, the Designated Authority is required to consider whether there has been a significant price undercutting by the dumped imports as compared to the price of the like product in India, or whether the effect of such imports is otherwise to depress prices to a significant degree or prevent price increases, which otherwise would have occurred, to a significant degree.
149. The impact on the prices of the domestic industry on account of imports of the subject goods from the subject countries have been examined with reference to price undercutting, price underselling, price suppression and price depression.
150. As noted in the previous paragraphs the domestic industry has argued that certain adjustments towards credit cost and transport cost should be made for price undercutting and price underselling analysis. However, this request has not been found to be acceptable in the absence of complete information on other risks involved and implications thereof. Therefore, the consistent practices of the Authority in these regards have been followed.
(a) Price undercutting effects of dumped imports
151. For the purpose of price undercutting analysis the net sales realization (NSR) of the domestic industry has been compared with landed value of imports from the subject countries. While computing the net sales realisation of the domestic industry all taxes, rebates, discounts and commissions have been deducted and sales realisation at ex-works level is determined for comparison with the landed value of the dumped imports. Accordingly, the price undercutting effects of the dumped imports from the subject countries work out as follows:
152. The above data shows that the landed values of imports form the subject countries did not undercut the prices of the domestic industry during the POI. However, the price undercutting may not be relevant if the domestic prices are already depressed or suppressed significantly. Therefore, the degree and extent of price suppression or depression, if any, has also been examined in addition to the price undercutting examination as above. The domestic industry, in its submissions, has argued that the price undercutting is negative largely because of significant credit being extended by the exporters.
(b) Price suppression/depression
153. As noted above, price suppression/depression effects of the dumped imports have also been examined to see if the dumped imports have significantly suppressed or depressed the domestic prices. To examine the price suppression effect of the dumped imports on the domestic prices the trend of net sale realization of the domestic industry has been compared with the cost of production of the domestic industry and the landed price of the dumped imports. The Authority notes the arguments of the interested parties that the production unit of the petitioner was shut down for an extended period of time during the POI and therefore, its costs would be significantly affected due to production loss. Therefore, the cost of production has been adjusted for such loss in production and the adjusted cost of the POI (assuming that there was no production loss and associated idle cost) has been considered for the price suppression and depression examination.
154. The above data indicates that the cost of production has been steadily increasing and has gone up significantly since 2012-13 and again in POI even after adjusting the cist for the production loss during the POI. While the adjusted cost, after adjusting the costs for the idle costs and production loss during the POI, was almost 33% higher compared to the base year, the selling prices of the domestic industry has increased only by about 7%. The Authority notes that even the normated cost during the POI considered for determination of NIP shows an increase of 21% as compared to the base year. Analysis of the prices of basis raw material i.e. propylene during the same period shows a significant increase of about 40% compared to the base year. The weighted average landed values of the imports have increased by only by about 9% during the same period. This indicates that the domestic industry is forced to keep the prices suppressed in order to retain its market in the presence of significant dumped imports.
155. The domestic industry could not achieve normal production in the POI partly due to shortage of raw material from the only supplier, i.e., HPCL for some time and partly due to non-remunerative prices for an extended period. The data above indicates that even if the domestic industry was able to achieve normal production in the POI, the cost would have been significantly higher than the selling prices at which they were able to sell in the domestic market due to the effects of presence of dumped imports in the same market. The domestic industry contends that the plant shutdown, even after resumption of supplies from HPCL, was to contain the losses as the prices were not-remunerative. Therefore, the domestic industry’s prices appear to be suppressed to retain market share to the extent they could produce and sell during this period and that explains the reasons for the negative price undercutting.
(c) Price underselling effects of dumped imports
156. For the purpose of examination of the price underselling effects the landed prices of imports from subject countries/territories have been compared with the Non-injurious selling price of the domestic industry determined for the POI in accordance with the norms prescribed in Annex-III to the Rules. Price underselling margins of dumped imports are as follows:
157. The data indicates that the dumped imports are below the non-injurious prices of the domestic industry though the underselling margins are in a narrow range.
H.4 Examination of Economic parameters relating to the domestic industry
(a) Actual and Potential Impact on Capacity, Production, Capacity Utilization and Sales
158. Information on capacity, production, capacity utilization and sales volume of the domestic industry is given in the table below. The Authority notes that out of total 455 days of the POI the plant was in operation for only 192 days. As per the records of the petitioner the plant had to be shut down due to non-availability of the basic raw material i.e., Propylene from HPCL because of a major fire in that plant and other maintenance related issues. Even after the raw material supply was restored and the plant was put to operation, due to poor price situation, because of increased presence of dumped imports, the production was suspended intermittently for about 118 days resulting in very low production and capacity utilisation. Therefore, production, capacity utilisation and sales have been projected assuming that there was no plant shut down, to isolate the plant shut down as a factor of injury, and see whether the petitioner would have been able to produce and sell significant quantities had the plant not been shut down due to raw material unavailability.
159. The data above shows that while there was about 10% capacity addition in 2011-12, in response to increase in the demand for the product under consideration, and the petitioner was achieving more than 100% capacity utilisation till 2012-13, there has been a significant production loss in the POI resulting in very low capacity utilisation and low sale volume.
160. The data above further indicates that even if the raw material supply was not affected and the plant was in operation for those 192 days the production and capacity utilisation would have reached only a level of 40742 MT and 68% respectively while the demand for the product shows a healthy growth during the same period. The petitioner has contended that the plant was shut down for remaining 118 days not because of the raw material supply disruption but because of un-remunerative prices due to dumped imports. While the costs had increased, the prices were suppressed due the presence of significant volume of dumped imports.
(b) Actual and Potential Impact on Profitability, Profits, return on investment and cash flow
161. Cost of production and other associated costs, as well as selling prices, of the domestic industry have been examined taking into account the arguments of the interested parties about the production losses of the petitioner during the POI. The profits earned by the domestic industry from the sales of the subject goods in the domestic market works out as follows: -
164. The data indicates that domestic industry had a dominant position in the Indian market till 2011-12 when it commanded over 52% of Indian demand. Thereafter the market share of the domestic industry has significantly declined whereas the dumped imports have significantly occupied that space. Even in 2012-13 when the industry was operating at almost full capacity it had lost market share to the dumped imports. Part of the loss in market share in POI is however, due to production loss on account of raw material supply disruption. Even after isolating that factor the loss in market share on account of dumped imports is significant and material. Even considering that had the raw material supply not been disrupted and the plant was in operation during this period the projected market share would have been of the order of about 30%. This indicates that the petitioner has lost a sizable market share to dumped imports during the POI.
(d) Actual and potential impact on Employment, Productivity and Wages
165. The Petitioner Company produces a number of products in the same production line. Therefore, the impact of dumped imports of the subject goods on employment may not be a very good indicator of injury. The Authority notes that the production was suspended during this period for a prolonged period for various reasons, including dumping. Therefore, the employment and wages and productivity parameters are not relevant as injury indicators in this case. However, the details are as follows:
166. The data indicates that keeping in line with the capacity increase and production volumes in 2011-12 the employment level and wages increased in 2012-13 and wage cost per unit remained almost constant during the first three years of the injury period. But due to significant production loss the wage cost per unit of production increased significantly in the POI. As far as productivity is concerned, per employee productivity was highest in 2011-12 when the unit achieved over 100% capacity utilisation. The productivity in the POI has fallen sharply due to low production during this period.
(e) Actual and potential impact on Growth
167. The data indicates that the industry was in the growth path upto 2012-13 with increase in capacity and production. But during the POI all physical and financial parameters show significant adverse trend. Growth, with regard to sales, production, market share, profits, return on investments and cash flow, has been significantly negative during the period of investigation.
(g) Factors affecting domestic prices
169. The preliminary examination indicates that there is a healthy demand in India for the subject goods which goes into a number of downstream products such as plasticizers. However, the domestic capacity is about 40% of the demand. Therefore, imports play a major role in the domestic prices. The data indicates that dumped imports from the subject countries/territories initially accounted for about 30% of the domestic demand which has gone upto about 70% of the demand. These imports are at dumped prices and below the cost of production of the domestic industry causing significant price suppression and makes the prices un-remunerative for the domestic industry.
(h) Ability to raise capital investments
170. The petitioner has made investments in 2010-11 to expand the capacity in order to meet the increasing demand. After a period of good performance upto 2012-13 the performance of the domestic industry deteriorated because of various reasons, including the impact of dumped imports. The profits of the domestic industry have steeply declined to a situation of financial losses. Therefore, the ability of the industry for further expansion or capacity addition appears to have been adversely affected.
(i) Level of dumping & dumping margin
171. The dumping margins as a indicator of potential injury to the domestic industry indicates that margins of injury from each of the subject countries/territories are above de-minimus and significant.
H.5 Conclusion on injury
172. The above examination indicates that imports from the subject countries/territories are entering the Indian market at significant volumes at dumped prices. The volume of imports and the prices at which they are being exported from the subject countries are causing both volume and price impact on the domestic industry which is reflected in decline in production, (even if the production loss due to supply disruption is accounted for) and significant decline in financial performance leading to losses in the period of investigation. Performance of the domestic industry has steeply deteriorated in terms of production, capacity utilization, sales, profits, return on investments and cash profits to a very significant extent. Therefore, the Authority concludes that the impact of the dumped imports on the domestic industry has been adverse and the domestic industry has suffered material injury.
H.6 Injury Margins
173. The Non-injurious price of the domestic industry has been determined as per the principles laid down in Annex-III to the Anti-dumping Rules. Landed prices of imports from various countries have been compared with the noninjurious price so determined for determination of the injury margins of the subject dumped goods imported from the subject countries/territories. The data indicates that the landed prices of imports from most of the subject countries/territories are substantially below the non- injurious prices calculated for the domestic industry.
I. Causal Links and Non-attribution Analysis
174. The above analysis indicates that domestic industry has suffered material injury. However, as recorded earlier, the interested parties have strongly argued that the injury, if any, suffered by the domestic industry is on account of other factors, including the disruption in supply of basic raw materials from their only supplier. The domestic industry has argued that dumping need not be the sole cause of injury. There may be other factors also which may at the same time be causing injury to the domestic industry. Presence of other factors does not imply that the Authority shall terminate the investigation or not find causal link between injury and the dumped imports.
175. The Authority notes that while the domestic industry might be getting injured because of several factors simultaneously affecting it, it is important to establish whether the dumped imports, through their volume and price effects, are affecting the performance of the domestic industry, without attributing the injury caused by the other factors to the dumped imports. The examination in the previous section indicates that the dumped imports have significant adverse volume impact on the domestic industry. The prices of the dumped imports have caused significant price suppression for the domestic industry. Therefore, there is a positive causal link between the dumped imports and the injury suffered by the domestic industry ever after isolating injury suffered due to the production loss on account of non-availability of raw materials. Having established that, the Authority has examined other mandatory parameters to see if other factors, other than the dumped imports from the subject countries, are the cause of injury to the domestic industry as has been argued by the interested parties. In this context the following mandatory factors have been examined alongwith the factors brought out by the interested parties in their submissions as follows:
(i) Volume and prices of imports from other sources
176. The import data analysed above indicates that the volume of imports from the other sources is very small compared to the total imports as well as in comparison to the dumped imports.
K.3 Submissions of Other Interested parties
188. The Authority notes that the interested parties have essentially re-iterated their views on various aspects of injury claims of the domestic industry and made similar comments on the injury and causal link claims of the domestic industry and analysis of the Authority. Therefore, comments of the interested parties have been summarized as follows:
(a) Indian Plasticizer Manufacturers’ Association and other importers
i. That there is no causal link between the injury and the alleged dumped imports. It has been argued that in its annual report the domestic industry has accepted the fact that the losses during this period was mainly due to non availability of Propylene for a long period resulting in 212 days production loss.
ii. That the Appellate Body in US- Hot – rolled Steel, held that an authority is required to separate and distinguish the effect of dumped import, from the effects of any other factor, on the domestic industry producing the like product. In the present investigation, the domestic industry, itself has mentioned in its petition that that had loss of production due to other factors. However, cleverly, the domestic industry has failed to mention the actual idle time during the POI and presented the petition based on assumptions best suitable to them. Therefore, the Authority should undertake the process of assessing appropriately, and separating and distinguishing, the injurious effects of dumped imports from those of other known causal factors, before arriving at the conclusion with regard to impact of dumped imports, if any.
iii. That it seems the Authority was searching for a normal period as it was awkward to use the data of POI which was adversely affected by extended period of shut down. It would have been more reflective to use the capacity utilisation till 2012/13 if a potential decline is sales and other indicators was to be calculated;
iv. That in Afga Gevaert A.G. Vs. Designated Authority 2001 (130) E.L.T. 741 the Tribunal held that besides, Interest of the users of the subject goods must be treated at par with that of the Domestic Industry. Interests of consumers being vital for the country the role of the user industry and importers is equally paramount.
v. That Diesel is the basic/pioneer subsidize product which runs Indian Economy. Indian economy depends on Petroleum products major Approx. 80 % Crude in India is imported. Considering Nation's interest first it is essential to import 2-EH as it is a raw material to manufacture 2-EHN which is one of the most essential ingredient of Diesel as a cetane booster to avoid Diesel Deficiency in India. APL is the only soul producer of 2-EH in India in case if supply interrupts domestic users of 2-EH has to shut down their units (as import will take 7 to 8 weeks lead time) to as there is no alternative current supplier is available to domestic 2-EH users as it is essential to import 2-EH. Therefore, the investigation should be terminated.
(b) Comments of the Exporters and the Governments of the subject countries
189. These interested parties, in their respective submissions, have made the following observations on the injury and causal links:
i. That the disclosure statement has failed to demonstrate that the material injury, if any, is caused by alleged dumped imports;
ii. That the injury caused by other factors other than dumped imports have been disregarded as no evidence has been placed on record to show how the production loss of 212 days did not allegedly lead to self inflicted injury but the imports did;
iii. That the annual report of the domestic industry clearly mentions certain ‘operational constraints’ affecting their performance during the POI which has not been addressed by the Authority;
iv. That the injury is self inflicted due to raw material issues and the disclosure has not stated how the cost of the petitioner has been computed taking into account plant shut down;
v. That there is no price effect as the undercutting was negative and the landed prices were higher by about Rs5000/ MT which could not have prevented domestic industry to increase its prices. The reason for such un-remunerative price should be some other reason as the landed prices were never in competition with the domestic prices;
vi. That despite negative price undercutting the petitioner increased its sales price only by 8% in response to a 20% increase in cost of sales which means that the petitioner cannot claim that undercutting by subject imports have prevented them from increasing the sales price;
vii. That the findings of price suppression due to alleged dumped imports are not substantiated as the cost of sales of the petitioner has increased on account of higher absorption of fixed costs which reflects lesser production quantity as the capacity was not optimally utilized;
viii. That the imports of the subject goods increased during the POI only to bridge the gap in demand and supply in India. Domestic industry was unable to produce and sale due to non-supply of the raw material;
ix. That certain presumptions made by the Authority, with regard to the production and market share of the domestic industry, if it had remained in production for the entire POI, are without any basis;
x. That any segregation of the injury would have to consider normal production period and not POI itself as the POI was adversely affected. Therefore, determination of impact of price underselling on the production and sale volume is erroneous. It has been further argued that the impact of increase in prices of raw material on the cost of the product under consideration has not been analysed;
xi. That the disclosure statement fails to provide any explanation regarding the methodology to calculate the projected numbers. Any weighted average projection based on previous years data is not appropriate because of the trends between 2010-13;
xii. That increase in cost of sales the domestic industry is the main factor of injury. Unavailability of raw material and resultant plant shutdown is a factor which, even taken in isolation, breaks the causal link;
xiii. That Indian user industry would be adversely affected if the duties are imposed; xiv. That the duty, if any, should be in Indian Rupees
K.4 Examination by the Authority
190. The Authority notes that most of the submissions of the interested parties with regard to the injury and causal links analysis are repetitive and re-iteration of their respective views expressed earlier. However, the issues have been examined and addressed as follows:
i. As regards the arguments of the interested parties that the Authority has failed to recognise the fact that injury is self inflicted due to factors which are not related to dumped imports, such as supply disruption and therefore, break of causal link, the Authority notes that the analysis clearly recognises the fact that the domestic industry’s performance during the period of investigation was significantly affected by the supply disruption of the major raw material for an extended period during the POI. This factor has also been recognised in the Annual report of the Company as one of the factors for the poor performance of the petitioner during this period. While there is no disagreement on this factual position the investigation also establishes that after the supply was restored the domestic industry was not able to go back into regular or full scale production due to un-remunerative prices because of the presence of dumped imports in significant volumes. The investigation clearly reveals that some of the producers/exporters in the subject countries, who did not export the subject goods earlier, had resorted to significant volumes of dumped imports with significant credit terms taking advantage of the situation in the domestic market. That has apparently caused significant price suppression and the petitioner was unable to raise its prices to cover its full cost. Therefore, the arguments of the interested parties that the injury is entirely self inflicted is not valid.
ii. Some of the interested parties have argued that price suppression due to alleged dumped imports are not substantiated as the cost of sales of the petitioner has increased on account of higher absorption of fixed costs which reflects lesser production quantity as the capacity was not optimally utilised. Therefore, the Authority examined the cost of production of the domestic industry assuming a normal production cycle to neutralise the effects of the higher fixed costs on account of idle time of the plant and even at this normated cost the price was found to be suppressed as the petitioner had lost significant market share, first due to raw material disruption, and then their inability to get back to normal production due to the presence of significant dumped imports. Therefore, the arguments of the interested parties in these regards are not valid.
iii. Injury of the domestic industry in antidumping investigations is assessed with reference to the POI as is existed and not on the basis of an ideal period. The analysis of data for the previous years is carried out to examine the trends and not to look for an ideal period as has been contended by some interested parties. While the domestic industry may be getting affected by several other factors, including the raw material issues, as is the case in the instant matter, as long as dumping is one of the proximate causes of injury the domestic industry is entitled for protection upto the extent the injury is caused by dumping. Normation of the non-injurious price ensures that self inflicted injury caused by factors internal to the industry such as plant shut down because of reasons other than dumping are not attributed to the dumping.
iv. The Non Injurious Price has been worked out based on the optimum figure of POI and previous 3 years for capacity utilisation, Raw material cost, utility cost, etc. Following the NIP rule the cost has been optimised and has no impact on idle capacity. In fact low capacity utilization in the POI has resulted in lower NIP. Therefore, contentions of the interested parties that self inflicted injury has been attributed to the dumped imports have no merit;
v. Further, the Authority examined the physical and financial performance of the petitioner assuming that plant was in operation for those 212 days for which it remained closed due to raw material supply disruption based on the performance for the period in the POI when there was no disruption to see the volume and price impact of dumped imports and arrived at a positive impact outcome as discussed in the disclosure statement. Therefore, the arguments of the interested parties that the authority has failed to address the self inflicted injury and causal link are without any basis and the interests of these parties have not been compromised in any manner;
vi. In view of the above the Authority holds that there is sufficient evidence to conclude that the domestic industry suffered material injury and the said injury has been caused due to the cumulative effects of dumped imports from the subject countries and disruption of raw-material supply from its lone supplier because of certain force majeure conditions. Accordingly, the arguments of the interested parties in this regards stand disposed off;
vii. As far as the arguments of the importers that the duty should be imposed in Rupee term the Authority notes that as a consistent practice the duties are being denominated in US$ term as most of the imports are also denominated in that currency. No specific argument has been made by these parties as to why the duty in this case should be denominated in Indian Rupees. Therefore, the Authority does not find any merit in this submission.
L. Conclusions
191. After examining the issues raised and submissions made by the interested parties and facts made available before the Authority, as recorded in this finding, the Authority concludes that:
(i) The subject goods have entered the Indian market from the European Union, United States of America, Korea RP, Chinese Taipei, Malaysia and Indonesia at prices less than their normal values and the dumping margins of the dumped imports from these countries are substantial and above de minimis;
(ii) The dumping margin of the imports of the subject goods from Saudi Arabia is found to be de minimis and therefore, the investigation against this country has been terminated;
(iii) The domestic industry has suffered material injury; and
(iv) The material injury has been caused by the volume and price effects of dumped imports from the countries named at (i) above coupled with disruption in raw material supply during a significant part of the period of investigation;
M. Indian industry’s interest & other issues
192. As noted earlier the user industry has raised concern regarding the ability of the domestic producer to meet the demand in the country and also its vulnerability due to dependence on single source of supply for its critical raw materials. It has also been argued that the subject goods are critical in certain types of industries and disruption of supply from the sole domestic producer in India will significantly affect their operations and downstream users. The Authority notes that the purpose of anti-dumping duties, in general, is to eliminate injury caused to the Domestic Industry by the unfair trade practices of dumping so as to re-establish a situation of open and fair competition in the Indian market, which is in the general interest of the country. The Authority further notes that existence and survival of domestic producer, in a fair market environment, is essential keeping the critical nature of the product for certain critical applications. Imposition of anti-dumping measures would not restrict imports from the subject countries in any way, and, therefore, would not affect the availability of the subject goods to the consumers. Therefore, the interests of the user industry will not be significantly affected if antidumping duties are imposed on this product.
N. Recommendations
193. The Authority notes that this investigation was initiated and notified to all interested parties in accordance with the provisions of the Antidumping Rules and adequate opportunity was given to the exporters, importers and other interested parties to provide positive information and verifiable evidence on various aspects of dumping, injury and causal links for determination of degree and extent of dumping and injury. Having conducted the investigation as per the procedure prescribed and having established that dumping has taken place from the subject countries/territories and the domestic industry has suffered material injury on account of the dumped imports, the Authority considers it necessary and appropriate to recommend imposition of definitive duties duty on imports of subject goods, from the subject countries/territories, in the form and manner described hereunder.
194. Having regard to the lesser duty rules the Authority recommends imposition of definitive anti-dumping duties equal to the lesser of margin of dumping and margin of injury so determined in this finding, so as to remove the injury to the domestic industry. Accordingly, definitive antidumping duties equal to the amount indicated in Col 8 of the duty table given below is recommended to be imposed, for a period five (5) years from the date of its imposition, by a notification to be issued in this regard by the Central Government, on all imports of subject goods originating in or exported from the subject countries/territories.
Duty Table
* the tariff classification is indicative only and not binding for the purpose of duty collection
O. Further Procedures
195. An appeal against the orders of the Central Government that may arise out of this recommendation shall lie before the Customs, Excise and Service tax Appellate Tribunal (CESTAT) in accordance with the relevant provisions of the Act. 196. The Authority may review the need for continuation, modification or termination of the definitive measure as recommended herein from time to time as per the relevant provisions of the Act and the Rules, and Public Notices issued in this respect from time to time. No request for such a review shall be entertained by the Authority unless the same is filed by an interested party as per the time limit stipulated for this purpose.
A. K. Bhalla Designated Authority
to success.