Sunset Review of Anti-dumping Duty imposed on imports of Viscose Staple

File No. 1S/9/2015-DGAD
GOVERNMENT OF INDIA
MINISTRY OF COMMERCE & INDUSTRY
DEPARTMENT OF COMMERCE
(DIRECTORATE GENERAL OF ANTI-DUMPING & ALLIED DUTIES)

(Final Findings)

Subject: Sunset Review of Anti-dumping Duty imposed on imports of Viscose Staple Fibre excluding Bamboo Fibre, originating in or exported from China PR and Indonesia

A. BACKGROUND

1. Whereas, the original anti-dumping investigation concerning imports of 'Viscose Staple Fibre excluding Bamboo fibre' (hereinafter also referred to as the subject goods), originating in or exported from China PR and Indonesia, was initiated by the Designated Authority (hereinafter also referred to as the Authority) vide Notification No. 14/6/2009- DGAD dated 19th March, 2009, leading to issue of preliminary findings vide Notification No. 14/6/2009-DGAD dated 5th August, 2009 and imposition of provisional duty.

2. Whereas, the original final findings were issued by the Authority, recommending imposition of definitive anti-dumping duties on the imports of the subject goods, originating in or exported from China PR and Indonesia. vide Notification No. 14/6/2009- DGAD dated 17th May, 2010. The definitive anti-dumping duty was imposed by the Central Government on the imports of the subject goods, originating in or exported from the subject countries vide Notification No. No.76/2010-Customs dated 26thJuly, 2010.

3. And whereas some interested parties filed appeals before the Hon'ble Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Principal Bench, New Delhi, challenging the Final Findings dated 17th May, 2010 and the Customs Notification No. 76/2010-Customs dated 26thJuly, 2010.The Hon'ble CESTAT, after extensively hearing the interested parties and the domestic industry, remanded the matter back to the Authority for affording post-decisional hearing to the appellants and other interested parties, if any, and for making such modifications to the Final Findings as might be necessary as a result of such post decisional hearing. The Authority, vide its Notification No 4/6/2009-DGAD dated 10th April 2012, issued its post decisional Final Findings confirming the Final Findings earlier notified vide Notification No. 14/6/2009-DGAD dated 17th May, 2010.

4. Whereas, the present petition was filed by Association of Man-Made Fibre Industry of India (hereinafter referred to as Petitioner), on behalf of the domestic industry for the product under consideration. One of its members, M/s Grasim Industries Ltd. is the sole producer (hereinafter referred to as Petitioner Company) and provided necessary information for the present purposes.

5. Having satisfied that the petitioner has substantiated the need for a sunset review, the Designated Authority considered it appropriate to initiate sunset review vide notification no. 15/9/2015-DGAD dated 22nd July, 2015. The validity of the antidumping duty on the imports of the subject goods from the subject countries was extended up to 25th July 2016 by the Central Government vide Notification No. 37/2015-Customs (ADD) dated 6th August, 2015.

B. PROCEDURE

6. The procedure described below has been followed in this investigation:

i. The Authority issued a Notification No. 15/9/2015-DGAD dated 22nd July, 2015, published in the Gazette of India, Extraordinary, initiating sunset review antidumping investigation concerning imports of the subject goods, originating in or exported from the subject countries on receipt of application to initiate the SSR investigation.

ii. The Authority sent a letter along with a copy of the notification to all known exporters and other interested parties/industry associations (whose details were made available by the domestic industry) in the subject countries and gave them opportunity to make their views known in writing within the prescribed time limits in accordance with the anti-dumping rules.

iii. The Authority provided a copy of the non-confidential version of the application to the known exporters of the subject countries in accordance with the Antidumping Rules. A copy of the application was also made available to other interested parties, upon request.

iv. Copy of the letter and the exporter questionnaires sent to the exporters/ producers in the subject countries were also sent to the embassy of the subject countries in India along with a list of known exporters / producers.

v. The Authority sent exporter’s questionnaires to elicit relevant information to the following known exporters in the subject countries in accordance with the Antidumping Rules:

1. P.T.South Pacific Viscose
2. PT. Indo Bharat Rayon
3. HebeiJigao Chemical Fiber Co., Ltd.
4. Hubei Chemical Fiber Group Co.,Ltd
5. Sateri (Jiangxi) Chemical Fibre Co., Ltd.
6. China Jiangsu Aoyang Technology Corporation Limited
7. ChtcHelon Co., Ltd
8. Xinjiang fulida fibre Co., Ltd
9. Tangshan Sanyou Chemical Industries Co.
10. Shandong Yamei Technology Co., Ltd

vi. Following companies have filed the exporter questionnaire response as a producer/exporter of the product under consideration in India:

1. Tangshan Sanyou Group Hong Kong International Trade Co. Ltd, China PR
2. Tangshan SanyouYaunda Fibre Co. Ltd, China PR
3. Tangshan Sanyou Group Xinda Chemical Fibre Co., China PR
4. Birla Jingwei Fibres Co. Ltd., China PR
5. P.T. Indo Bharat Rayon, Indonesia
6. P.T. South Pacific Viscose (SPV), Indonesia

vii. The Authority forwarded a copy of the notification to the following known Importers/Consumers/User Associations of subject goods in India and advised them to make their views known in writing within the prescribed time limit in accordance with the Rule 6(4) of Customs Rules, 1995:

1. Pallava Textiles
2. Pallipalayam Spinners,
3. ShriCheran Syn. India Ltd.
4. KesharMultiyarn Mill Ltd.
5. Ginni Filaments Ltd.
6. Gimatex Industries Pvt. Ltd.,
7. Pee Vee Textiles,
8. RSWM Ltd.
9. Suryalata Spinning Mills
10. Shree Rajasthan Syntex Limited,
11. Spentex Industries Limited (CLC)
12. Rajasthan Textiles Mills Association
13. Northern India Textiles Mill's Association
14. The Synthetic & Rayon Textiles Export Promotion Council (SRTPC)
15. Indian Spinners’ Association

viii. Following importers/users responded and filed importer questionnaire response:

1. Suryalata Spinning Mills Ltd.
2. RSWM Ltd.
3. Shree Rajasthan Syntex Ltd.
4. Pee Vee Textiles Ltd.
5. Gimatex Industries Pvt. Ltd.
6. Magnum Spinning Mills India Pvt. Ltd.
7. Indian Spinners’ Association

ix. The following importers/users of PUC have also filed submissions/letters during the course of investigation, though without a detailed questionnaire response. Submissions made by these parties have also been taken into account in the present determination.

1. Confederation Indian textile Industry (CITI).
2. Textile Consumer’s Foundation
3. The Synthetic & Rayon Textiles Export Promotion Council
4. Arbind Limited LalBhai Group
5. Spentex Industries Limited
6. Victory Spinning Mills Ltd
7. Chola Spinning Mills Private Limited
8. Pavathal Spinning Mills Private Limited
9. JPP Mills Private Limited
10. ArunachalaGounder Textile Mills Private Limited (AGT Mills )
11. APM Industries Limited

x. The period of investigation for the purpose of the present review is April 2014 – March 2015 (12 months). However, injury analysis covered the period April 2011 - March 2012, April 2012-March 2013, April 2013-March 2014 and the POI.

xi. Request was made to the Directorate General of Commercial Intelligence and Statistics (DGCI&S) to arrange details of imports of subject goods for the past three years, and the period of investigation, which was received by the Authority. Domestic industry procured import data from secondary source, namely, IBIS, Mumbai. The Authority has relied upon the DGCI&S imports data for computation of the volume & value of imports and injury analysis.

xii. The Authority made available non-confidential version of the evidence presented by interested parties in the form of a public file kept open for inspection by the interested parties as per Rule 6(7).

xiii. Optimum cost of production and cost to make & sell the subject goods in India based on the information furnished by the applicant on the basis of Generally Accepted Accounting Principles (GAAP) was worked out so as to ascertain if anti-dumping duty lower than the dumping margin would be sufficient to remove injury to the Domestic Industry.

xiv. The Authority held oral hearing on 19th January 2016 to provide an opportunity to the interested parties to present information orally in accordance with Rule 6(6).

xv. The parties presenting their views in the oral hearing were requested to file written submissions of the views expressed orally. The submissions made by the interested parties during the course of the investigation and the oral hearing, have been addressed in this final finding notification, to the extent considered relevant by the Authority.

xvi. The Authority examined the information furnished by the domestic producer to the extent necessary on the basis of guidelines laid down in Annexure III to work out the cost of production and the non- injurious price of the subject goods in India so as to ascertain if anti- dumping duty lower than the dumping margin would be sufficient to remove injury to the domestic industry.

xvii. Verification of the information and data submitted by the applicant was carried out to the extent deemed necessary. The information submitted by responding exporter and importers has been also examined in detail.

xviii. Information provided by the interested parties on confidential basis was examined with regard to sufficiency of the confidentiality claim. On being satisfied, the Authority has accepted the confidentiality claims wherever warranted and such information has been considered as confidential and not disclosed to other interested parties. Wherever possible, parties providing information on confidential basis were directed to provide sufficient non confidential version of the information filed on confidential basis.

xix. 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 recorded its finding on the basis of the ‘facts available'.

xx. A disclosure statement was issued on 27.06.2016 containing essential facts under consideration of the Designated Authority, which have formed the basis for this Final Finding Notification. Time up to 04.07.2016 was given to furnish comments, if any, on Disclosure Statement. The Authority has considered post disclosure comments received from interested parties appropriately.

xxi. The exchange rate for the POI has been taken by the Authority is USD = Rs. 61.69. xxii. *** in this final finding notification represents information furnished by interested parties on confidential basis and so considered by the Authority under the Rules.

C. SCOPE OF THE PRODUCT UNDER CONSIDERATION AND ‘LIKE ARTICLE’

Submissions by the Domestic Industry

7. Views of the domestic industry on product under consideration are as follows:

a. The product under consideration in the present investigation is ‘Viscose Staple Fibre excluding Bamboo Fibre’ which is widely used in textile industry, mainly in fashion wear, home furnishings and carpets, household textiles and for medical uses. It can broadly be divided into two forms - normal viscose fibre and modal fiber/micro modal fiber. Viscose fibre is produced in large number of deniers. However, cost and price of different deniers do not differ significantly.

b. Goods produced by the domestic industry are like article to the imported product in terms of parameters such as physical characteristics, manufacturing process & technology, functions & uses, product specifications, pricing, distribution & marketing and tariff classification. The two are technically and commercially substitutable.

c. The product under consideration is classified under Custom Headings 5504 10 00. Since the goods are imported under many other HS codes, the Customs classifications are indicative only.

d. The subject goods produced by the domestic industry and the subject goods imported from the subject countries are like articles within the meaning of the Anti-dumping Rules.

Submissions by the Opposing Interested Parties

8. The product under consideration should have been segregated into different types based on deniers etc. and then analysis for the purpose of dumping margin, price undercutting and injury margin analysis should have been carried out as per PCN types.

9. It has been submitted that none of the exporters from the subject countries are producing and/or supplying modal fiber/micro modal fiber to India or in the domestic market. Since the exports from the subject countries are not competing with the said products, the same cannot possibly be the cause of the alleged injury to the applicant industry. Therefore, modal fiber/micro modal fibres cannot be considered as “like articles” to the imported goods for the purpose of injury analysis.

Examination by the Authority

10. The product under consideration in the present investigation is “Viscose Staple Fibre excluding Bamboo Fibre". The product is classified under Chapter 55 of the Customs Tariff Act under Customs Sub-heading No. 550410. However, customs classification is indicative in nature and not binding on the scope of the investigation.

11. The present petition is for sunset review of the anti-dumping duty earlier imposed. The product under consideration considered by the Authority in the original final findings is as follows:

D. Product under Consideration and Like Article
“The product under consideration is “Viscose Staple Fibre (VSF) excluding Bamboo fibre”. Viscose Staple Fibre is described as “Viscose rayon staple fibre not carded/combed” under the Customs Tariff and is also known as “Rayon Fibre” in some markets. The product under consideration is classified under Custom Headings 5504.10.00. The Customs classification is indicative only and is in no way binding on the scope of the present investigation. Viscose Staple Fibre was the first man-made fibre, and unlike other man-made fibres, is not a synthetic fibre. It is made through wet spinning technology and is a regenerated cellulose fibre made from wood pulp, which is essentially cellulose extracted from a sustainable natural resource i.e. wood, by subjecting it to various chemical and mechanical processes. On account of its cellulosic base, viscose staple fibre properties are similar to those of natural cellulosic fibres than those of thermoplastic, petroleum based synthetic fibres such as nylon or polyester. Further, it has a distinct advantage of engineered specification and uniformity. Viscose Staple Fibre has silk-like aesthetic with superb drape, soft feel and retains rich brilliant colours. Fabrics made from it are moisture absorbent (even more than cotton), breathable, comfortable to wear, and easily dyeable in vivid colours. They do not build up static electricity, and are pill-resistant.

 Main strength of VSF is its versatility and ability to blend easily with nearly all other textile fibres to impart lusture, softness, absorbency and resulting comfort to the fabric made from such blends. Bamboo fibre, one of the types of Viscose Staple Fibre is excluded from the scope of this investigation. In the initiation notification, Designated Authority has specifically requested the interested parties to make their submissions with regard to exclusion of Bamboo Fibre. None of the interested parties had made any submissions in this regard.”

12. During the investigation, P.T. South Pacific Viscose (SPV), Indonesia had contended that the authority should have segregated different types of the product under consideration into different PCN (Product Control Number ) types for the purpose of dumping margin, price undercutting and injury margin analysis. However, at the time of spot verification at the premises of the exporter, the exporter was asked to justify its request for PCN wise analysis. The exporter was also asked whether the producer exporter maintains or can otherwise provide separate PCN wise cost of production details for different types of VSF produced and sold. The exporter however categorically clarified that the exporter does not maintain records which can segregate cost of production for different kinds of fibres. The exporter also claimed that the exporter does not consider that there were significant differences in the cost of production of different types of fibres.

13. The Authority has compared the regular (normal) Viscose Staple Fibre produced by the domestic industry compared with the normal imported fibres for dumping margin, price undercutting and injury margin determination. DI has clarified that only VSF Fibre was being produced in its Vilayat Plant during POI. The import of VSF waste has also not been considered for analysis purposes as it is not covered within the scope of PUC.

14. The Authority concludes that no substantive issue has been raised by any interested party regarding the scope of the product under consideration, and since the present investigation is a sunset review, the scope of the product under consideration in the present investigation remains the same as the scope of the product in the final finding of the original investigation.

D. DOMESTIC INDUSTRY AND STANDING

Submissions by the Domestic Industry

15. Views and response of the domestic industry on domestic industry & standing are as follows:

a. The present petition was filed by Association of Man-Made Fibre Industry of India (AMFII) on behalf of the domestic industry. One of its members, M/s Grasim Industries Limited is the sole producer of the subject goods in India and may be considered as the domestic industry.

b. The fact that the petitioner is the sole producer of the product under consideration in India does not affect the standing of the petitioner as domestic industry.There is no other known producer of VSF in India and hence the production by petitioner constitutes 100% of the Indian production. Also, the Panel in the matter of imports of Cotton-type bed linen from India held that the plural form used in the AD agreement includes the singular case.

c. The applicant has affiliated companies in China PR, Indonesia and Thailand, producing & selling the product under consideration globally. The relationship amongst these entities is as below:-

d. The applicant has furnished the details of all related entities and the basis on which these companies are related. The affiliated producers are largely selling their products either in the respective domestic markets or exporting to third countries.

e. The affiliated company in China has not exported the PUC to India. The Indonesian Company has also not exported the PUC to India during POI but exported a small quantity of VSF waste to India, which is insignificant and not covered within the scope of PUC. Therefore, the Authority has rightly considered that the applicant should not be considered ineligible under the Rules, as was also established in the original investigation.

f. The domestic industry has a plant in Thailand which has exported one of the forms of the product under consideration to India called modal/micro modal fibre. Imports from non subject countries are in any case not relevant in order to determine whether a domestic producer qualifies as domestic industry in view of relationship with the foreign producer/exporters. CESTAT has held in the mattes of Birla Ericsson Ltd. v/s Designated Authority that the issue of relationship is required to be examined only in the context of subject countries. Thailand is not a subject country in the present case so the imports from Thailand are not relevant for the purpose of Rule 2(b). The import price from Thailand and Europe are much higher than the import price from China and Indonesia.

g. Domestic industry has provided complete details of exports from the three related companies PT Indo Bharat Rayon, Indonesia, Birla Jingwai Fibres Company Limited, China and Thai Rayon, Thailand to various parties in the domestic and international markets. PT Indo Bharat Rayon, Indonesia and Birla Jingwai Fibres Company Limited, China in particular have provided invoice by invoice details of their exports to Thailand and exports of VSF from Thailand to India

h. The use of the word ‘may’ in Rule 2(b) suggests that the two types of producers in question, i.e. related producers and producers importing the dumped product are not automatically excluded from being part of the domestic industry. Rather, it is the consistent practice of the investigating authorities that the exclusion of such producers must be decided on a case-by-case basis, on reasonable and equitable grounds, and by taking into consideration all the legal and economic aspects involved.

i. The production of petitioner constitutes a major proportion of total domestic production of subject goods in India. Thus, the present petition satisfies the standing requirement under the Rules to file the present petition and petitioner constitutes ‘domestic industry’.

j. Present petition is for sunset review. This being sunset review investigation, the Authority is not required to ascertain standing of the petitioner to file the present petition.

k. Responding to the contentions of other interested parties with regard to decision of the Designated Authority in other case, the domestic industry has submitted that in SDH transmission case, the Authority had to exclude Huawei for the reason that Huawei, China had exported the product to India and was thus related to Huawei India who claimed status of a domestic industry. In the present investigation, there are no exports by related entities in the subject countries to India in the present POI.In Soda Ash case (a) Tata chemicals was treated as ineligible domestic industry in view of exports made by related parties, (b) GHCL, Nirma and Saukem were treated as eligible domestic industry despite export made by related entity. Further, in Soda Ash case, the exports were by related parties from subject countries. In the instant case the exports are by related party in countries not under investigation..

l. In SDH transmission case, the Authority had to exclude Huawei India for the reason that Huawei, China had exported the product to India and was thus related to Huawei India who claimed relationship. In the present investigation, there are no exports by related entities to the related companies in the subject countries in the present POI.

m. WTO has clearly held in its judgement that even if there is one sole producer of PUC, the same shall constitute domestic industry. It has been held by WTO that in use of the word in plural form implies inclusion of the word in its singular form.

n. There is no legal requirement of disclosure of related parties in third countries. Third country imports are neither dumped imports nor under investigation. There is no attempt to circumvent the ADD imposed in India by the Thai related party. The imports from Thailand are of modal fibre, for which DI did not have sufficient capacities in the country during that period.

o. In Soda Ash case (a) Tata chemicals was treated as ineligible domestic industry in view of exports made by related parties, (b) GHCL, Nirma and Saukem were treated as eligible domestic industry despite export made by related entity. Further, in Soda Ash case, the exports were by related parties from subject countries. In the instant case the exports are by related party in countries not under investigation.

p. Domestic industry supplied material to a domestic customer who produced the product and exported the eventual product. All export benefits on such exports have been taken by the customer only. Also, domestic industry gave additional benefit to the consumer. If domestic industry were to sell the entire product at these prices for all domestic sales, they would have suffered significant financial losses. Domestic industry therefore charged differential price for such sales. To ensure that this mechanism is not misused by customers, domestic industry has evolved a system to ensure that the consumers get these special prices only for that production which is meant for exports. These sales are clearly domestic sales so in any case cannot be taken out from the calculations.

q. Neither there was any attempt to circumvent the anti dumping duty imposed in India, nor has the Thai related party exported the product in order to circumvent the anti dumping duty. In fact imports from Thailand are of modal fibre, for which domestic industry did not have sufficient capacities in the country.

r. Thai Rayon has not imported from Indonesia or China for export to India. This is mere allegation and conjecture.

Submissions by the Opposing Interested Parties

16. Views of the opposing interested parties on domestic industry & standing are as follows:

a. M/s Grasim Industries Ltd. does not have a standing as domestic industry for the present investigation as they have related entities in both China and Indonesia, namely PT Indo Bharat Rayon, Indonesia and Birla Jingwai Fibres Co. Ltd, China.

b. SPV has submitted that the applicant ought to be considered as ineligible Domestic Industry not only on account of their ownership structure but also on account of the fact that their inter-linkages allow them to manipulate the market in India. This is further proved by the fact that they have even shared their confidential data amongst themselves. SPV has also questioned the claim of confidentiality by the applicant industry as, according to them, confidentiality cannot be claimed qua individual parties. It is further submitted that the related entities of applicant industry in subject countries namely PT Indo Bharat Rayon (IBR), Indonesia and Birla Jingwei Fibers Company Limited, China are represented by common representative.

c. It has been further submitted that the fact that no submissions were made during the public hearing on behalf of related exporters of the applicant industry, despite there being a common representative, confirms the apprehension of SPV that the whole application has been cleverly managed to oust genuine competition and to provide a sanctuary market to the applicant’s own subsidiaries. They further requested the Authority that the commercial realities have to be recognized before the Authority exercises its discretion under Rule 2(b).

d. Further, it has been submitted that M/s Grasim Industries Ltd. should not be considered as domestic industry by virtue of being the sole producer of Viscose fibre in the country.

(i) Domestic industry has been defined to consider “domestic producers” in plurality to exclude a sole oligopolistic producer from it’s definition (Rule 2(b) of AD Rules). While defining domestic industry, the plural reference to domestic producers should not be construed for a single entity to be considered as domestic industry. Singularity on account of exclusion from domestic industry or exclusion for administrative purposes by the authorities or unavailability of data is an acceptable reason. But, where a single oligopolistic producer is considered to constitute domestic industry, this would void the provisions under rule 5(3)(a) and 5(3)(b).

(ii) Legal jurisprudence in Indian cases mentioned by the petitioners have not fully addressed this issue. The issue has been discussed further in EC-Bed Linen case Para 6.72 where a single producer can form DI by virtue of exclusion or non availability of data ONLY.

(iii) The intent of the law in defining domestic producers in “plurality” was to protect the industry at large and not grant a sole producer unfair pricing mechanism in India.

e. The fact of exploitation of domestic consumers by Grasim has been established in aJudgment of the Hon’ble CCI (WP(C) No.4159 of 2013Delhi (HC)).

f. Indian Spinners Association has submitted that Grasim must not be considered eligible “domestic producer” for the purposes of the AD rules because:

i. The domestic industry deliberately did not disclose full facts of a related exporter namely, Thai Rayon which is the sole producer of VSF in Thailand

ii. 100% of the imports from Thailand have been made from Thai Rayon (related manufacturer of Grasim).

iii. The related exporter has exported goods to India only after anti dumping duties were imposed on Indonesia and China. The quantum of imports from Thailand has increased slowly and steadily to reach 11% of total imports of subject products in India in 2014-15.

iv. Thai Rayon has purchased materials from related companies in Indonesia and China and exported fiber to India in the same accounting year.

v. The quantum of imports from Thai Rayon constitutes 1.25% of the total domestic sales of Grasim, which is deemed to be significant considering that the petitioner alleges that imports below 1% (from China) are significant in causing injury.

vi. The imports from Thai Rayon are at prices which prima facie indicate undercutting and dumping as compared to imports of similar products from Austria.

vii. Together with the fact that Grasim’s related company has exported subject products to India and that Grasim has been accused of controlling the domestic market by means of its dominant position in India to stifle competition within the country, exclusion under Rule 2(b) is warranted.

viii. ISA requests comparison of current position / operations of the petitioner against the rules laid down by DA in the original investigation for determination of eligibility of petitioner as DI. The Thai Rayon is controlled by a common Executive Director (Shri K.K Maheshwari) and common Chairman. It commands 11% of total imports of VSF into India during the period of injury, whereas imports of 0.25% from China are claimed significant by the petitioners. Grasim had stopped manufacturing of Modal VSF fiber in existing plants and turned to imports from Thai Rayon only. It envisages manufacturing of such fiber in Vilayat plant. Grasim has imported the product concerned through Thai Rayon as marketing and operations are headed by common director and Business Head. Thai Rayon’s CIF export prices into India are lower than the domestic prices of Modal fiber in India.

g. Similar exclusion of domestic producer has been made in case of Soda Ash from Kenya and 6 other countries (No 14/17/2010-DGAD), where 100% of the exports from Kenya were made by a related company of a domestic producer, imports ranging from 8 to 10% of total imports were considered significant. Another such example is the decision of the DA in case of Certain Tiles from China.

h. SPV has submitted that it is an admitted position of the Authority that they can reexamine the eligibility of the applicant industry even in the sunset review investigation. In this connection, they have relied on the counter affidavit filed by the DGAD before the Hon'ble High Court of Delhi on 29.8.2013 in the matter of Indian Council of Ceramics Tiles & Sanitary ware Vs Designated Authority &Anr. WP No. 4160/2013, wherein, the Authority has stressed the importance of reexamination of the eligibility of the applicant industry even in the sunset review investigation.

i. They further submitted that as per the current practice of the Authority, as revealed from some of the recent investigations, the Authority is rejecting those domestic producers who are related to importers or exporters. In this context, reliance has been placed on the investigations of Synchronous Digital Hierarchy Transmission Equipment against China PR wherein the authority rejected the claim of one of the domestic producer namely Huawei Telecommunications (India) Co. Pvt. Ltd. (Huawei India) as a domestic industry only because they are related to exporter and imported themselves. Further, in the case of Vitrified Tiles from China, the Authority has even excluded those domestic producers who have mere relationship with exporters or importers of the subject goods.

j. In view of the above, SPV submits that there is no legal or logical reason for the authority to treat applicant industry as eligible domestic industry. Accordingly, they have requested for termination of the investigation on this ground.

Examination by Authority

17. The various submissions made by the interested parties during the course of the present investigation with regard to standing of petitioner and considered relevant by the Authority are examined and addressed in terms of Rule 2 (b) of Anti-dumping Rules.

18. Rule 2 (b) of the AD rules defines domestic industry as under:

  “(b) “domestic industry” means the domestic producers as a whole engaged in the manufacture of the like article and any activity connected therewith or those whose collective output of the said article constitutes a major proportion of the total domestic production of that article except when such producers are related to the exporters or importers of the alleged dumped article or are themselves importers thereof in such case the term ‘domestic industry’ may be construed as referring to the rest of the producers”

19. The application was filed by Association of Man-Made Fibre Industry of India (AMFII) on behalf of the domestic industry. One of its members, M/s Grasim Industries Limited is the sole producer of the subject goods in India and submitted all relevant information for the petition.

20. It has been submitted by opposing interested parties that as per Rule 2(b), Grasim Industries doesn’t have a standing as domestic industry because they have related entities in China, Indonesia and Thailand. The authority notes that the question of excluding or including a domestic producer from the ambit and scope of the domestic industry is of practical importance. The root question is whether or not they are really part of the domestic industry in the sense of Rule 2(b) of the Anti-dumping Rules. The Rule 2(b) of the Anti-dumping Rules provides discretion to the Designated Authority which could be applied on case by case basis in such situations where one or more domestic producers have imported the product under consideration or is related to an importer or exporter of the product under consideration.

21. The authority recalls in this connection that at the time of original investigation, the issue had been dealt with in detail. The domestic industry was comprised of M/s. Grasim Industries Ltd. who had a related entity namely P.T. Indo Bharat Rayon, Indonesia, exporting the PUC to India during the then prevailing POI. After elaborate investigation, the authority concluded that Grasim Industries constituted domestic industry notwithstanding its relationship with one of the exporters in subject countries. The decision of the Designated Authority in that investigation has now attained finality. The authority had considered all facts in detail and found it in fitness of things to determine individual dumping margin and anti-dumping duties in respect of P.T. Indo Bharat Rayon and the company is at present attracting anti-dumping duties. The Authority noted that mere fact of relationship of a domestic producer with an importer or exporter or import by such a producer is insufficient to exclude such a producer from the scope of the domestic industry.

22. In the present review investigations, the facts have changed to the extent that there are no exports of the PUC by the related exporter in Indonesia to India. The Authority notes that the legal and relevant requirement in this regard is whether or not there are exports by the related entities in subject countries in the investigation period. Further, exports by related entities in subject countries made prior to the investigation period are also not relevant to disentitle such domestic producers from the scope of the domestic industry. Therefore, the Authority notes that mere fact of relationship of a domestic producer with an importer or exporter is insufficient to exclude such a producer from the scope of the domestic industry.

23. The Authority further notes that the exports made by related companies from non- subject countries are entirely irrelevant for present investigation. The CESTAT has held previously in the matters of Birla Ericsson Ltd. vs Designated Authority that the relationship with importer or exporter or imports by petitioner domestic industry is relevant (a) in the context of POI and (b) for imports from subject countries only. Imports from non-subject countries and imports prior to investigation period have no relevance in this regard.

24. The authority also notes that the Rule 2(b) in its relevant part provides that when such producers who are related to the exporters or importers of the alleged dumped article or are themselves importers thereof, such producers may be deemed not to form part of domestic industry. Thus, the Rule 2(b) clearly refers to "alleged dumped article", which can only mean product under consideration from subject countries only. Goods imported from countries not under investigation is not "alleged dumped article".

25. The Authority holds that as per the data furnished by the domestic industry, PT Indo Bharat Rayon, Indonesia, Birla Jingwai Fibres Company Limited, China, importers in India who filed Importer's questionnaire responses, DGCI&S data and investigations conducted by the authority, including spot verifications, there were no exports of the Viscose fibre by the related entity in China by PT Indo Bharat during the POI. There were small quantity of export of VSF waste from Indonesia to India during the POI, which is insignificant compared to total imports and also negligible with reference to Indian production, also VSF waste is beyond the scope of the product under consideration. Evidence on record shows that its import was cleared by the customs authorities without collection of anti-dumping duties, thus treating this as product not under consideration. Further, the volume of these imports is quite small.

26. As regards exports by Thai Rayon, Thailand, the authority notes that Thailand is not a subject country in the present case. As far as relationship of the petitioner with the Thai exporter is concerned, the submissions made by the interested parties are relevant only when the relationship is disputed. Relationship of the petitioner with the Thai exporter has not been disputed by the petitioner. However, there is no evidence on record to show that exports made from Thailand are at dumped prices. The information on imports contained in the petition, the DGCI&S data procured by the authority and information on exports from Thailand provided by the petitioner clearly shows that majority of these exports were of modal fibre and at a price much higher than the import price from China/Indonesia. The authority holds in this regard that mere fact of exports by related entities is wholly insufficient in this regard. In this regard the authority also recalls its elaborate determination in the original investigation wherein the authority has extensively examined the impact of relationship on scope of domestic industry under Rule 2(b).

27. Some interested parties have contended that the authority should re consider the standing and scope of domestic industry at the time of sunset review. Reference to submissions by the authority before Delhi High Court has been made in this regard. The authority holds in this regard that the authority has not stated that standing or scope of the domestic industry will not be examined in the present case. The authority has in fact examined standing requirements and has determined whether the petitioner company constitutes domestic industry in the present case.

28. Having regard to definition of Rule 2(b), past determinations made by the authority in other investigations and original investigation in the present case, decisions of the CESTAT and considering the facts on record of the present case, the Authority considers that there is no justification to consider Grasim Industries as ineligible domestic industry under Rule 2(b) of the Antidumping Rules.

29. An issue has been raised by the opposing interested parties that the petitioner being the sole producer cannot constitute domestic industry. The Authority notes that the placement of a word in plural form implies existence of more than one producer. The authority has routinely considered sole producer as domestic industry under the law. The authority also notes in this regard that the WTO Appellate Body in the matter of anti-dumping duties on the imports of Cotton-Type Bed Linen from India in particular held that a sole producer can constitute domestic industry.

30. The opposing interested parties have also contended regarding non-disclosure of full facts about Thai Rayon, Thailand which is a related entity to the domestic industry. The Authority notes that the only legal requirement in this regard is with regard to disclosure about related parties in subject countries. There is no such requirement for related parties in third countries. Third country imports are neither dumped imports nor under investigation and do not constitute alleged dumped product. It is also noted that the domestic industry has provided all relevant information in this regard. The domestic industry has also provided complete details of exports made by Thai Rayon, Thailand not only to India but also to third countries. The authority therefore does not consider that the Petitioner had any intentions to suppress the facts.

31. As regards the exclusion of domestic producer in the case of Soda Ash from Kenya, etc., the Authority is of the view that the facts of the cited case were completely different from the current investigation as far one of the domestic producers is concerned who was treated ineligible domestic industry. In Soda Ash case, (a) the exports were by related parties from subject countries in the POI, (b) in quite significant volumes as far as Tata Chemicals is concerned and (c) insignificant volumes as far as Nirma and Gujarat Heavy Chemicals are concerned. The authority treated Tata Chemicals as ineligible domestic industry and Nirma and Gujarat Heavy Chemicals as eligible domestic industry. In the instant case, the exports are by related party but from country not under investigation. Further, authority's decision in soda ash case with regard to Nirma and Gujarat Heavy Chemicals to treat them as eligible domestic industry further supports the contention of the petitioner that Grasim Industries cannot be treated as ineligible domestic industry in the present case.

32. As regards SPV contention that the applicant ought to be considered as ineligible Domestic Industry not only on account of their ownership structure but also on account of the fact that their inter-linkages allow them to manipulate the market in India, the authority holds that there is no substance in the contention. The fact that the Indonesian producer and Petitioner have shared their confidential data amongst themselves is entirely irrelevant to the present issue. The authority also notes that the facts in this regard in the present case are the same as facts that had prevailed at the time of original investigation.

33. As regards contention that the efforts of the applicant is to provide a sanctuary market to the applicant’s own subsidiaries, the authority notes that the exports made by the related producers in Thailand, Indonesia and China is without any specific evidence and tantamount to a conjecture. Moreover, the authority has made determination on nondiscriminatory basis and recommends anti-dumping duty on all sources wherever dumping causing injury is established.

34. Interested parties have referred to the decision of the CCI. The authority however notes that there is no final decision from the CCI. Moreover, the Hon'ble Supreme Court in the matter of Haridas Exports Versus All India Float Glass Mfrs. Association [2002 (145) E.L.T. 241 (S.C.)] held that the jurisdiction of the MRTP Commission is not ousted by the Anti-dumping provisions in the Customs Act and the two Acts operate in different fields and have different purposes. Even though the said decision is in the context of MRTP Act, the same is nevertheless guiding to the present case also. If there are any possible contraventions of the provisions of Competition Act, the provisions of the said act would prevail and it is for the appropriate authority to take appropriate action thereon. The jurisdiction of the Designated Authority is with regard to possibility of likelihood of continuation or recurrence of dumping of the product under consideration, whether the same is likely to cause injury to the domestic industry and whether anti-dumping duties are required to be extended.

35. The authority also notes that the documents on record show that investigation by the CCI was initiated on the basis of an allegation but the DG did not find any substance under Section 3 of the Competition Act, 2002

36. In light of the above, the Authority holds that the petitioner satisfies the requirement of standing to file the present petition and constitutes ‘Domestic Industry’ within the meaning of the AD Rules.

E. CONFIDENTIALITY ISSUES

Submission by the Domestic Industry

37. The DI has submitted all the relevant information as required and prescribed by the Authority. While dealing with issue of confidentiality, the interested parties conveniently ignore to refer to the submissions made by other interested parties. The Authority must compare the confidentiality claims by the domestic industry and the confidentiality claims made by the opposing interested parties in order to conclude regarding the issue of confidentiality.

Submissions by opposing interested parties

38. The submissions made by Indo Bharat Rayon, Indonesia &Birla Jingwai Fibres Company Limited, China do not provide sufficient details for providing a reasonable understanding of the non-confidential information submitted. For example the product flow chart, transaction wise domestic sales, details of waste exported to India, details of exports to third countries, sales of PUC by company, operating statistics, statement of capacity, production, sales and stock, statement of consumption of raw materials , statement showing raw materials consumption, allocation of expenditures, cost of production for export and domestic market and statement showing selling, general and administrative expenses were not provided in adequate details for comments by interested parties.

Examination by the Authority

39. Submissions made by the interested parties with regard to confidentiality and considered relevant by the Authority are examined and addressed as follows:

a. With regard to confidentiality of information, Rule 7 of Anti-dumping Rules provides as follows:-

Confidential information: (1) Notwithstanding anything contained in sub-rules (2), (3) and (7) of rule 6, sub-rule (2) of rule12, sub-rule (4) of rule 15 and sub rule (4) of rule 17, the copies of applications received under sub-rule (1) of rule 5, or any other information provided to the designated authority on a confidential basis by any party in the course of investigation, shall, upon the designated authority being satisfied as to its confidentiality, be treated as such by it and no such information shall be disclosed to any other party without specific authorization of the party providing such information.

(2) The designated authority may require the parties providing information on confidential basis to furnish non-confidential summary thereof and if, in the opinion of a party providing such information, such information is not susceptible of summary, such party may submit to the designated authority a statement of reasons why summarization is not possible.

Notwithstanding anything contained in sub-rule (2), if the designated authority is satisfied that their request for confidentiality is not warranted or the supplier of the information is either unwilling to make the information public or to authorize its disclosure in a generalized or summary form, it may disregard such information.

b. Information provided by the interested parties on confidential basis was examined with regard to sufficiency of the confidentiality claim. On being satisfied, the Authority has accepted the confidentiality claims, wherever warranted and such information has been considered confidential and not disclosed to other interested parties. Wherever possible, parties providing information on confidential basis were directed to provide sufficient non confidential version of the information filed on confidential basis. The Authority made available the non-confidential version of the evidences submitted by various interested parties in the form of public file.

c. As regards submission on non-disclosure of certain injury parameters, the Authority notes that the same were examined with regard to sufficiency of the confidentiality claim and upon being satisfied, the Authority has accepted the confidentiality claims. The domestic industry had provided indexed information of the injury parameters which could not be disclosed on actual basis. The authority notes that if an interested party is not obliged to publicly disclose some information and if such interested party considers that such information constitutes confidential business information, the authority cannot direct such party to nevertheless disclose such information.

F. MISCELLANEOUS ISSUES

Submissions by the domestic industry

40. Views of the domestic industry in this regard are as follows:

a. As regards difference in dumping margin in case of related entity and other producer at the time of original investigations, the dumping margin in those transactions is entirely immaterial for the purposes of present investigations. Exports made by the related entities were not in such volumes or under such conditions as to exercise the discretion and exclude the company as ineligible domestic industry. Also there is no export of PUC by related Indonesian party during the present injury period including the POI.

b. Indian Spinners’ Association cannot claim itself as an Association of consumers of PUC. Majority of the members of the Indian Spinners’ Association are consumers of other fibres such as Polyester and Cotton. They are not consumers of Viscose. In fact in overall context, consumption of VSF in the country is far lower than the consumption of Cotton and Viscose.

c. The DI is giving a variable price to the downstream industry depending on the end use of the material for domestic use or exports. Therefore, the manufacturer exporters are being offered a discounted price to keep their competitive edge intact.

Submissions by the opposing interested parties

41. Views of the opposing interested parties in this regard are as follows:

a. The dumping margin for the related exporter of the domestic industry is almost twice of the other cooperating exporter from Indonesia.Indian producer and its subsidiary in Indonesia have colluded to ensure that the other competitors are first forced to lower their prices and then the Indian arm brings an anti-dumping investigation with the sole objective of blocking fair competition in the Indian market.

b. Majority of the members of Indian Spinners’ Association are the consumers as well as importers of VSF. Also, Indian Spinners’ Association was an interested party in the original proceedings and since this is an SSR, ispo facto, Indian Spinners’ Association should be a party to the current investigations.

c. The members of Indian Spinners’ Association increased their capacity but relatively lower than Grasim in the past 4 years. It faces lack of competitiveness in international markets due to the higher prices of domestically procured VSF from Grasim and the continuous imposition of anti-dumping duty on imports of viscose yarn in India.

d. The petitioner is indulging in different pricing policy for overseas market and domestic market; they are also differentiating between customers who are manufacturers for domestic consumption and manufacturers exporters. This is causing hardship to everyone involved. The textile spinners are getting fibres at higher price as compared to overseas market thus taking away the competitive edge. On the other hand differential pricing is attracting ADD measures on Indian exporters as the investigations by importing countries prove that there are two different prices of raw material for domestic and export supplies.

Examination by the Authority

42. The specific submissions made by the opposing interested parties and considered relevant, are addressed by the Authority as below:

a. As regards to the submission of the opposing interested parties concerning the dumping margin for the related exporter of the domestic industry during original investigations, the Authority holds that the dumping margin is based on actual facts of a case. If the dumping margin for a party was found higher, the authority had recommended higher quantum of anti-dumping duty (subject to application of lesser duty law) accordingly. The authority however finds no merits in the argument that because the Petitioner is related to an Indonesian producer; the two have colluded to dump the product. The authority had considered this issue in the original investigation as well. During the present POI, there are no exports of PUC to India by the related exporters in subject countries. The exports made during original investigations are not relevant for the present review investigations.

b. As regards to the submission of the opposing interested parties concerning the issue regarding the locus standi of Indian Spinners’ Association as an interested party, the Authority is of the view that as the majority of the consumers of the Indian Spinners’ Association are spinners using fibers such as Polyester, Viscose and Cotton, the Authority admits the association as an interested party for the present investigation.

c. As regards to the submission of the opposing interested parties concerning non competitiveness of spinners in international market on account of expensive raw materials, the Authority notes that with regard to the adverse impact on exports, the Govt. of India has exempted imports for exports from the preview of anti dumping duty. Also the interested parties have not disputed the claim of the domestic industry that the domestic industry is offering a differential pricing for material meant for domestic consumption versus the material meant for export consignments. This takes care of the supplies at competitive prices for manufacture of export productions. The ADD investigations against Indian exporter in other countries is a phenomenon of dumped goods by the manufacturer exporters of finished goods and not caused by differential pricing which is a common practice in many countries across various sectors.

MARKET ECONOMY TREATMENT, NORMAL VALUE, EXPORT PRICE AND DUMPING MARGIN

G. Normal Value, Export Price and Dumping Margin

Normal Value

43. Under Section 9A(1)(c), normal value in relation to an article means:

(i) the comparable price, in the ordinary course of trade, for the like article when meant for consumption in the exporting country or territory as determined in accordance with the rules made under sub-section (6); or

(ii) when there are no sales of the like article in the ordinary course of trade in the domestic market of the exporting country or territory, or when because of the particular market situation or low volume of the sales in the domestic market of the exporting country or territory, such sales do not permit a proper comparison, the normal value shall be either-

(a) comparable representative price of the like article when exported from the exporting country or territory or an appropriate third country as determined in accordance with the rules made under sub-section (6); or

(b) the cost of production of the said article in the country of origin along with reasonable addition for administrative, selling and general costs, and for profits, as determined in accordance with the rules made under subsection (6):

Provided that in the case of import of the article from a country other than the country of origin and where the article has been merely transhipped through the country of export or such article is not produced in the country of export or there is no comparable price in the country of export, the normal value shall be determined with reference to its price in the country of origin.

CHINA PR

44. Views of the domestic industry on determination of normal value for China are as follows:

a. China PR should be treated as nonmarket economy country for the following reasons:

i. Market economy status cannot be given in a situation where one of the major shareholders is a State owned/controlled entity.

ii. Market economy status cannot be given unless the responding Chinese exporters establish that the prices of major inputs substantially reflect market values.

iii. Market economy treatment must be rejected in such situations where Chinese exporters are unable to establish that their books are consistent with International Accounting Standards (IAS). The requirement on insisting compliance with International Accounting Standards is to ensure accuracy and adequacy of revenues and expenses, assets and liabilities expressed in the annual report.

iv. Market economy status cannot be granted unless the responding Chinese exporters pass the test in respect of each and every parameter laid down under the rules. Contrarily, while examining material injury existence of a single parameter is considered sufficient to establish such injury. In other words, where one parameter is sufficient to establish existence of injury, failure to pass one single parameter is sufficient to reject the claim of market economy status.

v. It is not for the Authority to establish that the responding companies are operating under market economy environment and are entitled for market economy treatment. But it is for the responding Chinese exporters to establish that they are operating under market economy conditions.

vi. Market economy status cannot be granted unless the responding company and its group as a whole make the claim. If one or more companies forming part of the group have not filed the response, market economy status must be rejected.

vii. In a situation where the current shareholders have not set up their production facilities themselves but have acquired the same from some other party, market economy status cannot be granted unless process of transformation has been completely established through documentary evidence.

b. It has been submitted that the normal value for China in such a case can be determined only in accordance with the provisions of para 7 of the Annexure I to Anti-dumping Rules without invoking proviso to 8(2) in view of the aforementioned facts and circumstances.

c. The normal value in China can thus be determined on the basis of (a) import price from third country into India, (b) selling price in India, and (b) cost of production in India, duly adjusted, including selling, general and administrative expenses and profit. It is also submitted that since these options for determination of normal value are available, the Designated Authority may not kindly consider "any other basis" because this is required to be applied only when other basis listed under the law cannot be applied.

Examination of claim of MET for China PR

45. The various submissions made by the interested parties during the course of the present investigation with regard to determination of normal value and considered relevant by the Authority are examined and addressed in terms of 9A(1)(c) of Anti-dumping Rules.

46. The Authority notes that consequent upon the initiation notice issued by the Authority; the exporters from China namely, Tangshan Sanyou Group Hong Kong International  Trade Co. Ltd., Tangshan Sanyou Group Xinda Chemical Fibre Co., Tangshan SanyouYaundaFiber Co. Ltd., and Bharat Jingwei fibres Co. Ltd. responded. These parties have provided information in the form of manner prescribed in both the questionnaires prescribed for a sunset review. The responding Chinese exporters have not claimed market economy treatment and therefore have not filed market economy treatment questionnaire responses.

47. None of the exporters from China PR have filed the MET questionnaire response and therefore the Designated Authority could not consider whether a Chinese producer could be granted market economy treatment in accordance with para 8 of Annexure-I.

48. As per Paragraph 8 of Annexure I of the Customs Tariff (Identification, Assessment and Collection of Anti Dumping Duty on Dumped Articles and for determination of Injury) Rules, 1995, the presumption of a non-market economy may be rebutted, if the exporter(s) /producer(s) from China PR provide information and sufficient evidence on the basis of the criteria specified in sub paragraph (3) of Paragraph 8 and establish the facts to the contrary. The co-operating exporters/ producers of the subject goods from People’s Republic of China are required to furnish necessary information/ sufficient evidence as mentioned in sub-paragraph (3) of paragraph 8 in response to the Market Economy Treatment questionnaire to enable the Authority to consider the following criteria as to whether:-

i. The decisions of concerned firms in China PR regarding prices, costs and inputs, including raw materials, cost of technology and labour, output, sales and investment are made in response to market signals reflecting supply and demand and without significant State interference in this regard, and whether costs of major inputs substantially reflect market values;

ii. The production costs and financial situation of such firms are subject to significant distortions carried over from the former non-market economy system, in particular in relation to depreciation of assets, other write-offs, barter trade and payment via compensation of debts;

iii. such firms are subject to bankruptcy and property laws which guarantee legal certainty and stability for the operation of the firms and

iv. The exchange rate conversions are carried out at the market rate.

49. The authority notes that the questionnaire response has been filed by Tangshan Sanyou Group Hong Kong International Trade Co. Ltd, China PR claiming that the company is an exporter of the product under consideration produced by its related company M/s Tangshan Sanyou Group Xingda Chemical Fibre Co. Limited. The company has claimed export of the product under consideration to India during the investigation period. The data filed by the exporter in their questionnaire response was verified, the individual dumping margin has been determined by the Authority for Tangshan Sanyou Group. Hong Kong International Trade Co. Ltd is mentioned in dumping margin table below.

50. The authority notes that the questionnaire response has been filed by Tangshan Sanyou Group Xinda Chemical Fibre Co., China PR claiming that the company is a producer of the product under consideration and has exported the same to India through its related company namely Tangshan Sanyou Group Hong Kong International Trade Co. Limited.

51. The authority notes that the questionnaire response has been filed by Tangshan SanyouYaunda Fibre Co. Ltd, China PR claiming that the company is a producer of the product under consideration. The company has claimed no export of the product under consideration to India during the period of investigation. Therefore, the Authority considers that there is no case to determine individual dumping margin for Tangshan SanyouYaunda Fibre Co. Ltd, China PR.

52. The authority notes that the questionnaire response has been filed by Bharat Jingwei fibres Co. Ltd, China PR, a related company of Grasim Industries Ltd. India, claiming that the company has not made any export to India during the POI or any period before and after that. Therefore, the Authority considers that there is no case to determine individual dumping margin for Bharat Jingwei fibres Co. Ltd, China PR

53. China has been treated as a non-market economy country by various authorities world over and in recent cases China has been treated as non-market economy country in India also. Therefore, the normal value for China is required to be determined as per the procedure described in Para 7 of the Annexure I to the Anti-dumping Rules, if none of the producers in China claim and establish their treatment as market economy company in terms of provisions of Para 8 of Annexure I. For the ready reference the provisions of Para 7 are quoted below:

“7. In case of imports from non-market economy countries, normal value shall be determined on the basis of the price or constructed value in the market economy third country, or the price from such a third country to other countries, including India or where it is not possible, on any other reasonable basis, including the price actually paid or payable in India for the like product, duly adjusted if necessary, to include a reasonable profit margin. An appropriate market economy third country shall be selected by the designated authority in a reasonable manner keeping in view the level of development of the country concerned and the product in question and due account shall be taken of any reliable information made available at the time of selection. Account shall also be taken within time limits, where appropriate, of the investigation if any made in similar matter in respect of any other market economy third country. The parties to the investigation shall be informed without unreasonable delay the aforesaid selection of the market economy third country and shall be given a reasonable period of time to offer their comments.”

54. Since China is being considered as Non Market Economy, the Rules provide that the normal value for China is required to be determined based on domestic selling prices in a market economy third country or the constructed value in a market economy third country or the export prices from such a third country to any other country, including India. However, if the normal value cannot be determined on the basis of the alternatives mentioned above, the Designated Authority may determine the normal value on any other reasonable basis including the price actually paid or payable in India for the like product duly adjusted to include reasonable profit margin.

55. In view of the fact that the exporter/producer from China PR has not claimed market economy treatment, the Authority has not granted the Market economy status to all the exporters/producers of China PR. Further, none of the interested parties have suggested a market economy third country as an appropriate third country for the present purposes. The opposing interested parties have also not provided any information or evidence to determine normal value on the basis of market economy third country. The Designated Authority has constructed the normal value in China on the basis of price actually paid or payable in India for the like product, duly adjusted, to include a reasonable profit margin. Accordingly, the Authority has determined the Normal Value for the subject goods exported by all exporters in China for each product type as below.

Normal Value for Indonesia

Normal value in case of Indonesia has been determined on the basis of prices in Indonesia.

PT. South Pacific Viscose (SPV)

56. PT. South Pacific Viscose filed a questionnaire response containing details of the domestic as well as exports sales of the subject goods manufactured and sold by them. For computation of Normal Value, the domestic sales of the subject goods were considered based on the verified data in Appendix -1. The respondent has furnished information relating to cost of production in Appendix 5 to 9. It was noted that there are some inconsistencies in the response with regard to the statement by SPV that they make direct exports to end users and traders in India. However, during verification it was clear that SPV is not doing marketing of subject goods in India, rather the parent company Lenzing AG has a marketing office in India who undertakes the marketing and after sales service and is paid commission on each and every transaction of SPV in India. Similarly, SPV had declared that the company had not purchased any raw material from its affiliated companies, however, it is clear from the statement in another submission that total quantity of wood pulp has been bought from their affiliated company viz. Pulp Trading GMBH. As regards the sales in the domestic market by the company, it was stated that ***% of the subject goods have been sold to the non-affiliated parties. It was verified that ***% of the domestic sales are profitable sales and the same have been considered for the purpose of determining the Normal Value. Adjustments namely Freight Expenses, and Credit Expenses, as claimed were allowed by the Authority. The Normal Value at exfactory level as worked out by the Authority taking into consideration the above factors is as below.

 PT. Indo Bharat Rayon

57. P T Indo Bharat Rayon from Indonesia has responded and provided information in the form and manner prescribed. The respondent has furnished information relating to domestic sales in Appendix 1. The respondent has furnished information relating to cost of production in Appendix 5 to 9 of the Questionnaire. The Authority notes that the respondent has made losses on overall basis on its domestic sales. The company has further claimed that no export of the product under consideration was made to India during the period of investigation. The facts were duly verified with the original documents. Therefore, the Authority considers that there is no case to determine individual dumping margin for P T Indo Bharat Rayon, Indonesia.

Normal Value for all other exporters from Indonesia

58. The Authority notes that no other exporter/producer from Indonesia has responded to the Authority in the present investigation. The Authority, therefore, has determined the normal value for the cooperating exporter from Indonesia, for all other exporters as well.

Export Price

Export price for the responding producers/exporters from Subject Countries

China PR

Tangshan Sanyou Group Hong Kong International Trade Co. Ltd, China PR

59. Based on the information furnished in the EQ responses, the Authority notes that Tangshan Sanyou Group Hong Kong International Trade Co. Ltd, China PR has exported subject goods to India produced by its related company M/s Tangshan Sanyou Group Xingda Chemical Fibre Co. Limited during the POI. Price adjustments have been made on account of ocean freight, inland freight, marine insurance, credit costs, commission, port expenses, VAT difference (only for China PR) and quantitative discount on the basis of the questionnaire response filed by the exporter and the related producers. After making the acceptable adjustments, the Authority has determined weighted average net export price during the POI as mentioned in the dumping margin table below.

Tangshan Sanyou Group Xinda Chemical Fibre Co., China PR

60. Based on the information furnished in the EQ responses, the Authority notes that Tangshan Sanyou Group Xinda Chemical Fibre Co., China PR is a producer as well as exporter of the subject goods to India during POI. Price adjustments have been made on account of ocean freight, inland freight, marine insurance, credit costs, commission, port expenses, VAT difference (only for China PR) and quantitative discount on the basis of the questionnaire response filed by the exporter and the related producers. After making the acceptable adjustments, the Authority has determined weighted average net export price during the POI as mentioned in the dumping margin table below.

Tangshan Sanyou YaundaFiber Co. Ltd, China PR

61. Based on the information furnished in the EQ responses, the Authority notes that Tangshan Sanyou Yaunda Fiber Co. Ltd, China PR did not export subject goods to India during the POI.

Bharat Jingwei fibres Co. Ltd, China PR

62. Based on the information furnished in the EQ responses, the authority notes that the Bharat Jingwei fibres Co. Ltd, China PR, a related company of Grasim Industries Ltd. India, has not made any export to India during the POI or any period before and after that. Therefore, the Authority has not determined any export price for them.

Indonesia

PT. South Pacific Viscose, Indonesia

63. Based on the information furnished in the EQ responses, the Authority notes that PT. South Pacific Viscose, Indonesia is a producer as well as exporter of the subject goods to India during the POI. Price adjustments have been made on account of ocean freight, inland freight, marine insurance, credit costs, commission, port expenses and quantitative discount on the basis of the questionnaire response filed by the exporter and duly verified. After making the acceptable adjustments, the Authority has determined weighted average net export price during the POI as mentioned in the dumping margin table below.

PT. Indo Bharat Rayon, Indonesia

64. Based on the information furnished in the EQ responses, the Authority notes that PT. Indo Bharat Rayon, Indonesia did not export subject goods to India during the POI. Therefore, the Authority has not determined any export price for them.

Export price for the Non-Co-operative producers-exporters from Subject countries

65. The Authority has determined the Export Price in respect of non-cooperative exporters from the subject countries as per facts available in terms of Rule 6(8) of the Antidumping Rules. Accordingly, after making the due adjustments, the weighted average net export price at ex-factory level in respect of all non-co-operative exporters from the subject countries is determined as mentioned in the dumping margin table below.

Dumping Margin

66. The dumping margin for various producers/exporters is as follows:

Dumping Margin

67. The dumping margins from Indonesia and China are positive.

H. ASSESSMENT OF INJURY AND CAUSAL LINK

Submissions by domestic industry

68. The submissions made by the Domestic Industry with regard to injury and causal link are as follows:

a. Imports of the product under consideration from Indonesia have shown significant increase in absolute terms and in relation to production and consumption in India. As far as imports from China are concerned, they have declined because of the imposition of anti-dumping duty.

b. Imports of the product under consideration from Indonesia and China are undercutting the prices of the domestic industry in the market.

c. Imports of the product under consideration are having significant depressing effect on the prices of the domestic industry in the market.

d. Performance of the domestic industry has shown improvement in terms of production and sales volume. However the domestic industry is unable to increase its sales in proportion to increase in demand and imports.

e. Profits of the domestic industry have declined significantly over the injury period. Return on investment and cash flow earned by the domestic industry has declined significantly over the injury period.

f. The inventories with the domestic industry have increased by almost the same quantum as the increase in imports from subject countries. Further, market share of domestic industry has declined. In fact, if market share of domestic industry in the injury period of the original investigation is compared with the market share of domestic industry in the present injury period, it would be seen that the domestic industry has lost market further to the market share loss suffered by the domestic industry at the time of original investigations. In other words, the market share of domestic industry is far lower than the market share that had prevailed at the time of injury period of original case, which clearly shows that cessation of antidumping duty shall lead to intensified injury to the domestic industry.

g. There is significant increase in market share of Indonesia even after imposition of anti-dumping duty only because of intensified dumping resorted by the producer in Indonesia. Even if market share of Thailand is added to the market share of domestic industry, the data will show that the market share of domestic industry has declined and that of Indonesia has increased.

h. No injury has been claimed on account of volume parameters. Domestic industry has claimed injury on account of deterioration in profits, return on investment, cash flow etc.

i. Comparison of the imports from Thailand with that from Indonesia clearly establishes that the import from Thailand were far lower than import from Indonesia. The domestic industry is supplying modal fibre from Thailand as they do not have modal fibre of the quantity and quality required by Indian consumers. The demand of modal fibre is of 3,700 MT, the domestic industry has a capacity of *** MT in Nagda. So, while setting up a new plant for VSF, domestic industry has setup production facilities for making modal fibre which can produce to the extent of *** MT. Pending full commercial production at this plant in Vilayat, the company has arranged modal fibre from Thailand. Also, modal fibre is not being produced by petitioners’ related entities in China or Indonesia, it is being produced only in Thailand.

j. No injury has been claimed on account of employment and wages.

k. Domestic industry has not sold such substandard product in the domestic market but only in export market.

l. 10% return on a 40 year old plant is not significant.

m. The domestic industry does not have significant sales to related parties.

n. The price undercutting is hugely negative in case of Thailand.

o. Cotton, polyester and VSF are not technically commercially substitutable product. They are at best alternative products in different market segments. The Authority is concerned with technical and commercial substitutability of product and not with consumer preferences.

p. It is indeed contradictory for the interested parties to contend that (a) the petitioner is exporting the product at a lower price and (b) is controlling supplies in the domestic market (where it is getting higher prices). If prices in the domestic market are better and if there is a demand in the domestic market, there is no reason why the petitioner would restrict the supplies in the domestic market and export the product at a lower price in export market.

q. The domestic industry has claimed adverse price effect of dumping and has submitted that if the present duties are allowed to cease, the petitioner would find difficulty in maintaining production and sales, which shall adversely affect capacity utilisation.

r. It’s the mere assumption of the interested parties that the petitioner has claimed reduction in production as the form of injury. The petitioner has not suffered loss of production in POI due to other factors.

s. Increase in input prices due to exchange improvement falls in the category of a situation where the domestic industry would increase its prices due to cost increases. The depreciation of rupee in any case would not have adversely affected the domestic industry for the reason that it fixes its prices linked to import price which follows that the depreciation of rupee in fact helps the domestic industry rather than adversely impacting. Also, cost on account of pulp constitutes only 50-52% of total cost of production and therefore while depreciation of rupee adversely affects the domestic industry to the extent of 28% of its cost of production, it supports to the extent of 14% of its cost of production.

t. While the price of pulp may have declined in terms of US$, the price has not been much affected in INR. Since the domestic industry incurs the costs in INR, the decline in pulp price in international price has not helped the domestic industry to proportionate extent. However, since the selling price of the domestic industry is linked to INR, the depreciation of INR has more than compensated for the impact on account of raw materials.

u. Domestic industry has done calculations by considering optimum production at Vilayat and Nagda plant and there is negligible impact on profits on this account. The plant at Nagda is already operating at 97% capacity utilisation.

v. 5% profit on cost of production is considered by the Authority as reasonable profit in case of non-cooperation from the exporters. Otherwise, Annexure-I refers to the actual profits that must be added to the cost of production.

w. Imposition of anti-dumping measures would remove the unfair advantage gained by dumping practices. Consumers could still maintain two or even more sources of supply. The Authority has repeatedly held 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. Cessation of anti-dumping duty will not make domestic industry more efficient. In fact, it will injure the domestic industry. As regards exports of VSF and fabric, the same are entirely different issues and are not at all linked to the proposed extension of anti-dumping duty. Imposition of anti-dumping duty shall not impact exports of yarn or fabric in any way. On the contrary, imposition of anti-dumping duty is in furtherance to the “Make in India” policy of GOI.

x. The comparison of cost of production in India with cost of production in Indonesia, Thailand and China shows that Indian industry is in fact efficient. So all allegations of inefficiencies of the domestic industry and the internal factors causing losses in the competitive economic conditions are strongly denied.

y. Any situation that implies segregating the domestic and export performance and does not imply that the Authority shall hold no injury to the domestic industry. Further, the mere fact that domestic industry is exporting at a lower price does not prejudice the present injury analysis. Since the petitioner has segregated export performance, the reported performance relates only to domestic performance and therefore is sufficient enough to allow Designated Authority to determine injury and causal link.

Submissions by opposing interested parties

69. The submissions made by the opposing interested parties with regard to injury and causal link are as follows:

a. Modal and Tencel Fibre are also included in the import data which are not imported from Indonesia or China. These are mainly coming from Thailand and EU, bulk of which is coming from Thailand from the related company of the petitioner. After appropriate adjustments, the market share of domestic industry has increased in the POI. The domestic industry had admittedly shifted market of Modal Fibre to one of their related companies in Thailand and if same is added to the share of domestic industry they would be controlling significant portion of the Indian market. Domestic industry has deliberately concealed this fact from Authority.

b. The installed capacity, production, sales and capacity utilization continuously increased in the injury period so it cannot claim any injury on these parameters.

c. The demand of PUC has increased by 83,977 MT out of which 63197 MT i.e., around 80% has been taken by the domestic industry and remaining 20% is shared by subject countries and other countries including imports of Modal Fibre from Thailand from related entity other related entities from around the world. If the imports of Modal fibre from Thailand are subtracted from the demand, the share of domestic industry in increased demand will be significant. This in no way indicates any injury.

d. Employment and Wages have not been claimed by the domestic industry as factors causing injury because these factors also show improvement.

e. While analysing the impact of decline in domestic sales prices, domestic industry ignored the effect of sales of sub-standard product due to stabilization of production in their Vilayat plant, which admittedly fetched lower realization. This lower realization cannot be attributed to imports from the subject countries.

f. Considering the returns, the VSF industry is getting worldwide, return somewhere in the range of 10% (GFA) to 15 % (NFA), as in the instant case, appear to be very good and no injury can be alleged on this count. Even on the 40 year old depreciated machines they are earning return somewhere around 10% which is significant. Also, as per the financial presentations on their website, they have robust financial performance in the POI and even Post POI (first 6 months of the financial year 2015-16).

g. The petitioner supplies substantial quantities of PUC to its related entities.

h. The domestic industry has not provided any information regarding the surplus capacities and export orientation of the exporter from Indonesia. Moreover, no data has been provided by the DI substantiating their claim of likelihood of continuation and recurrence of injury and dumping to the DI in case the duty in force has been withdrawn.

i. The imports from Thai Rayon are at prices which prima facie indicate undercutting and dumping as compared to imports of similar products from Austria.

j. The import prices of Thai Rayon (CIF) indicate substantial price undercutting when compared with the domestic prices of Modal fiber in India.

k. The factors behind the decline in the sales realizations are International prices of VSF, price of cotton fiber and PSF and significant sales of off-grade materials. The price undercutting due to allegedly dumped imports from subject countries must be adjusted on account of non-attribution factors.

l. Grasim increased its production capacities by 79,030 MT (34.31%) by commencement of plant at Vilayat to control the domestic supply and prices by using the dominant position. The exporters cannot be blamed for a wrong business decision of the domestic industry.

m. Average capacity utilization of the domestic industry has been 94% to 96% during 2011-12 to 2014-15 which indicates a good demand and a healthy state of usage.

n. Reduction in production during the injury period is on account of shutdown of plants due to internal (water shortages)/ non-attributable factors.

o. The Cost of Production has increased due to

i. Increase in raw material prices

ii. Increase in fixed costs due to stabilization of Vilayat plant expansion.

iii. Burden of fixed costs on reduced production at Nagda Unit.

p. Grasim has been earning super normal profits during past 5 years as compared to the normal profits of 5% for the industry as claimed in the calculation of normal value in the petition.

q. Grasim had stopped manufacturing Modal VSF fiber and turned to imports from Thai Rayon only. It shifted its market share of highly profitable products to its related companies in Thailand. This decrease in market share is self inflicted by Grasim & is a non-attributable factor for injury evaluation.

r. The termination of duty would lead the domestic industry to become more efficient and price competitive as a result of direct competition. It will also give great boost to exports of viscose yarn and fabric manufactured in India and also promote the “Make in India” policy of the Government of India.

s. The imposition of anti-dumping duty has been used as a shield to cover the inefficiencies of the domestic industry and the internal factors causing losses in the competitive economic conditions.

t. The petitioner follows a different pricing policy to ensure that the export market is not lost. This has nothing to do with its performance in the domestic market which is the requirement of law. The domestic industry cannot take shelter of injury under alleged dumping when the so-called injury may have been caused due to its own pricing policies. Thus, there is clearly absence of causal link between alleged dumping and injury tothe petitioner.

u. No question of injury can arise to the domestic industry when it itself exports its production at a much lower price as compared to import prices from subject countries. There are no positive evidences in the applicationto indicate the causal link between the injury to the domestic industry and the imports from subject countries/threat of dumped imports from subject countries.

v. As per the pricing policy of the domestic industry, rebates are given for their supplies against deemed exports. The price charged for the supplies against deemed exports are much below the price charged for the domestic sales. This may be seen from the price lists of the domestic industry. It appears from the pricing strategy and policy of the domestic industry that certain sales made to customers for eventual exports have also been included under domestic sales for the purposes of injury analysis. The so-called injury as claimed by the domestic industry is self-inflicted due to its own pricing policy.

w. There are no positive evidences in the application to indicate the causal link between the injury to the DI and the imports from subject countries or threat of dumped imports from subject countries.

x. Premium charged by Grasim in India, as compared to International CFR prices, is between 16% to 22%. (As per corporate presentation 2011-2015, Grasim). Grasim has been found to recover higher prices for fiber consumed in domestic sales of yarn (as per CCI report) including the amount of anti-dumping duty levied on imports from non-Grasim producers.

y. The prices of VSF in the domestic market are higher than export prices sold by Grasim to rest of world. (Domestic prices are higher by at least 8%)

z. The reasons for decline in sales realization bring out 3 major factors that cause for significant decline the sales prices (a) International VSF Prices, (b) Prices of cotton fiber and PSF and (c) Significant sales of off-grade materials.

aa. These factors are internally reported by the highest level of management of Grasim and are to be relied on by the public at large for evaluation of VSF  business of Grasim. Source of these reasons is the investor presentations published by Grasim during the previous 4 years 2011 to 2015.

bb. Therefore, the DA must eliminate that part of the decline in domestic prices caused due to the decline in International Prices of VSF (indexed decline in 2014 is 12.97%, 2011 base) to consider the impact of decline due to imports of VSF from subject countries.

cc. While imports from Indonesia and China have declined or remained stable; the imports from Thailand through related company of Grasim have increased from 0% to 11% of total imports post imposition of anti-dumping duties.

dd. The imports from China are lower than 1% (0.25% of total imports) and yet being considered significant by the petitioners.

ee. The domestic industry has shifted it’s market share to related company in Thailand and therefore has increased it’s market share by 40% in the past 5 years.

ff. Increase in sales of VSF in Indian market by Aditya Birla Group companies from India and Thailand is 40% during 2009-2015.

gg. Domestic industry increased it’s production capacities for catering to the export market as their domestic demand increased substantially by 79,030 MT (increase of 34.31%).

hh. Average capacity utilization of the domestic industry has been 94% to 96% during the years 2011-12 to 2014-15

ii. Exports constitute nearly 20% of total production and increase in production capacity was aimed at increased exports.

jj. Reduction in production is on account of shutdown of plants due to internal / nonattributable factors;

 2011-12 – Shutdown of Nagda plant due to shortage of water

 2012-13 – Shutdown of Harihar plant and Kharach plant due to nonavailability of water

 2012-13 – Stoppage at Nagda plant due to revamping

 2013-14 – Decline in production of Nagda plant (shutdown due to water shortage)

kk. The DA must segregate the quantum of injury caused by the aforementioned production shutdowns, which is non-attributable to allegedly dumped imports from Indonesia and China.

ll. The major reasons of decline in profitability, as disclosed by Grasim in the investor presentations and annual reports are as follows:  Increase in raw material prices has been due to the depreciation of rupee (Caustic soda prices increased by 30%, pulp cost went up by 11% etc.)

 Increase in fixed costs due to stabilization of Vilayat plant expansion

 Increase in employee benefits due to change in interest rates

 Burden of fixed costs on reduced production at Nagda Unit

 increase in consumption of energy per tonne of VSF production by 3%

mm. The post POI results of the petitioner company have shown exceptional profits, increased volume of sales and above average dividend declarations. Petitioner’s VSF business has increased profits during the post investigation periods by 27% (from INR 2608 Crores to INR 3331 Crores). The EBITDA has increased by 146% (from INR 233 Crores to INR 575 Crores). The profitability numbers of the DI clearly indicate that there is no injury being caused to the DI. Any decline in profitability was solely due to the decline in international prices, where the DI was able to charge a premium to Indian consumers and earn super normal profits.

Examination by Authority

70. The injury analysis made by the Authority hereunder ipso facto addresses the various submissions made by the interested parties. However, the specific submissions made by the interested parties are addressed by the Authority as below:

a. As regards to the submission of the other interested parties concerning the imports from Thailand, the Authority notes that imports from Thailand are of modal/micro modal fibre and at a price much higher than the import price from China & Indonesia. There is no import of this type of fibre from China and Indonesia. It is noted that there is an increase in the market share of Indonesia during the POI as compared to 2012-13 and 2013-14.

b. The Authority notes that the total import from Thailand were far lower than imports from Indonesia. The domestic industry has contended that it is importing and supplying modal fibre from Thailand as they did not have modal fibre of the quantity and quality required by Indian consumers. The domestic industry submitted that the domestic industry has setup new production facilities for making modal fibre at their new plant at Vilayat. Pending full commercial production at the plant in Vilayat, the company has arranged modal fibre from Thailand. Also, modal fibre is not being produced by related producers in China and Indonesia. It is being produced only by the related producer in Thailand.

c. As regards to the submission concerning the absence of injury on parameters of installed capacity, production, sales and capacity utilization, employment and wages the Authority notes that the domestic industry has not claimed any injury on these parameters, nor existence of injury in each and every parameter is must under the Rules. The domestic industry has claimed injury on account of deterioration in profits, return on investment, cash flow etc.Further, the present investigation is a sunset review investigation, wherein the authority is required to examine whether cessation of anti-dumping duty is likely to lead to dumping and consequent injury to the domestic industry.

d. As regards to the submissions concerning the sales of sub-standard product, the domestic industry submitted that it has not sold any sub-standard product in the domestic market. There have been some exports from Indonesia of VSF waste which is at low prices, however it is a different category of item and not covered with in the scope of PUC. The VSF waste is being exported by the responding exporters as well it has a specialized usage by some specific users.

e. As regards to the submission concerning the return on investment, the Authority notes that while the domestic industry contended that the return on investment should be considered along with age of the plant and demanded higher rate of return to enable the domestic industry to get appropriate return on new investments, the interested parties have contended that the return on investment earned by the domestic industry was high. The authority notes that the requirement under the law is whether the performance of the domestic industry has improved or deteriorated in respect of return on investment. If the return on investment has declined, it must be concluded that the performance of the domestic industry has suffered. Despite repeated arguments of the domestic industry, the authority has determined NIP by allowing 22% return on capital employed, as per the established practice in the Directorate and prescribed in ADD Rules.

f. As regards supply of substantial quantities of PUC to its related entities, the Authority notes that domestic industry does not have significant sales to its related parties in India. Nor the interested parties have provided any specific details or evidence in support of their claim.

g. As regards possible price undercutting in imports from Thailand, the Authority notes that the price undercutting is significantly negative in the case of imports from Thailand. In any case, imports from Thailand are largely of modal fibre.

h. As regards submissions concerning the decline in the sales realization due to other types of fibres (cotton and polyester), the Authority notes that inter-se competition amongst different types of textile fibres is not a new phenomenon. Further, the price undercutting in case of imports of PUC from subject countries is significantly positive and demand has shown a positive trend. Therefore, the available market for the subject goods was not declining due to competition from other textile fibres. It is also noted that for the purpose of the present investigations, viscose, cotton and polyester are not technically and commercially substitutable products.

i. As regards possible abuse of dominant position by the domestic industry, the Authority notes that investigation has shown that imports of the product from Indonesia increased, price undercutting in case of imports from subject countries is positive, performance of the domestic industry deteriorated in respect of parameters such as profits, return on investment and cash profits. The authority also notes that the issue of possible abuse of dominant position is required to be considered by the Competition Commission. The authority is required to determine whether the cessation of the existing duty is likely to lead to continuation or recurrence of dumping and injury and whether the present anti-dumping duty is required to be extended further in order to address the likelihood of continuation or recurrence of dumping and consequent injury to the domestic industry.

j. As regards absence of injury in respect of capacity utilization, the Authority notes that the domestic industry did not claim that it is suffering from unutilised capacities because of dumping but has claimed adverse price effect of dumping.

k. As regards to the submission of the other interested parties concerning reduction in production during the injury period, the Authority notes that the production of domestic industry has increased. The Authority notes that the domestic industry has not claimed reduction in production as the form of injury.

l. As regards adverse effect of rupee depreciation on the cost of production, the Authority notes that the depreciation of rupee would not have adversely affected the domestic industry for the reason that it fixes its prices linked to import price and therefore depreciation of Rupee would have enabled the domestic industry to fetch better prices from the market. Since the domestic industry incurs the costs in INR, the decline in pulp price in international price has not helped the domestic industry to proportionate extent. However, since the selling price of the domestic industry is linked to INR, the depreciation of INR has more than compensated for the adverse impact on account of raw materials. It is further noted that the domestic industry has done calculations by considering optimum production at Nagda plant and there was no production of Modal Fiber in Vilayat Plant during POI. Therefore, there is no significant impact on profits on this account.

m. Interested parties have contended that Grasim is earning super normal profits. The investigation has however shown that profits earned by Grasim constitute 12% return on capital employed. It is also noted that the domestic industry has significant capacities which were deployed a long time back and net fixed assets value of these investments is quite low now. The information on record shows very significant difference in the per unit net fixed assets in the old and new investments made by the domestic industry. In any case, the authority has determined NIP after allowing 22% return on capital employed as per the usual established practice in the Directorate.

n. As regards shifting of the market share of the domestic industry to its related companies in Thailand, the Authority notes that the petitioner company has set up a new production facility in Vilayat and if the company were to shift its supplies to Thailand, then they would not have made significant investment in India on such a large commercial level.

o. Interested parties have contended that cessation of anti-dumping duty will make user industry more efficient. The Authority notes that the purpose of anti-dumping duty is to eliminate the unfair practice of dumping to the extent it is causing injury to the domestic industry. Fair competition in the Indian market will not be reduced by the anti-dumping measures. On the contrary, imposition of anti-dumping measures would remove the unfair advantage gained by dumping practices, would arrest the decline of the domestic industry and help maintain availability of wider choice to the consumers of subject goods. 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 products to the consumers. As regards exports of VSF and fabric, the same are entirely different issues and are not at all linked to the proposed extension of anti-dumping duty. Imposition of anti-dumping duty shall not impact exports of yarn or fabric in any way.

p. As regards submissions concerning the inefficiencies of the domestic industry, the Authority notes that no credible evidence has been on record to show that the Indian industry is inefficient as compared to other subject countries.

q. As regards low price exports by the domestic industry, it is clarified that the Authority has segregated the domestic and export performance. The domestic industry has provided information segregating its exports and domestic sales. The domestic industry has contended that faced with significant surplus capacities, the producers in subject countries are resorting to dumping in third countries as well. In any case, the mere fact that domestic industry is exporting at a lower price does not prejudice the right of the domestic industry to seek protection under the dumping law. The authority is required to segregate injury suffered by the domestic industry on account of possible deterioration in export performance. The authority has considered only domestic sales of the domestic industry. Further, profits, return on investment and cash flows are segregated for the domestic operations and only such segregated information has been considered for the present analysis.

r. As regards to the submission of the opposing interested parties concerning the rebates given by the domestic industry to the deemed exporter in downstream industry, the Authority notes that the domestic industry supplied the material to a manufacturer who consumed the product for production of downstream products for exports and all the associated export benefits were taken by the manufacturer exporter only. Also, domestic industry gave additional benefit to the consumer. Hence, the Authority holds that these sales are clearly domestic sales.

71. Rule 11 of the AD Rules read with its Annexure–II provides that an injury determination shall involve examination of factors that may indicate injury to the domestic industry, “….taking into account all relevant facts, including the volume of dumped imports, their effect on prices in the domestic market for like articles and the consequent effect of such imports on domestic producers of such articles….” While considering the effect of the dumped imports on prices, it is considered necessary to examine whether there has been a significant price undercutting by the dumped imports as compared with the price of the like article 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.

72. Rule 23 of the Rules provide that the provisions of Rule 6, 7, 8, 9, 10, 11, 16, 17, 18, 19, and 20 shall apply mutatis mutandis in case of a review. In case the performance of the domestic industry shows that the domestic industry has not suffered injury during the current period, the Authority shall determine whether cessation of the present duty is likely to lead to recurrence of injury to the domestic industry.

73. Annexure-II of the AD Rules provides for an objective examination of both, (a) the volume of dumped imports and the effect of the dumped imports on prices, in the domestic market, for the like articles; and (b) the consequent impact of these imports on domestic producers of such articles. With regard to the volume effect of the dumped imports, the Authority is required to examine whether there has been a significant increase in dumped imports, either in absolute term or relative to production or consumption in India. With regard to the price effect of the dumped imports, the Authority is required to examine whether there has been 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 the prices to a significant degree, or prevent price increases, which would have otherwise occurred to a significant degree.

74. As regards the impact of the dumped imports on the domestic industry, para (iv) of Annexure-II of the AD Rules states as follows:

“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 natural and potential decline in sales, profits, output, market share, productivity, return on investments or utilization of capacity; factors affecting domestic prices, the magnitude of margin of dumping actual and potential negative effects on cash flow, inventories, employment wages growth, ability to raise capital investments.”

75. For the examination of the impact of imports on the domestic industry in India, the Authority has considered such indices having a bearing on the state of the industry as production, capacity utilization, sales quantum, stock, profitability, net sales realization, the magnitude and margin of dumping etc. in accordance with Annexure II(iv) of the Rules supra.

Assessment of Demand

76. For the purpose of determining the demand, the Authority has considered sales of the Indian producers and imports from various sources. The demand of the product in India has been computed as the sum of domestic sales of the Indian producers and known imports from various countries. The demand so assessed is shown in the following table:

77. It is noted that the demand/apparent consumption of the subject goods increased throughout the injury period. Also there has been significant increase in demand for the product in the Country, thus establishing that imposition of anti-dumping duty has not adversely impacted the consumption of the product in the Country.

Volume Effects of Dumped

Imports Import volumes & market share

78. The authority notes that the volume of import from subject countries reported in the petition is on the basis of IBIS which is lower than the volume of imports now established based on DGCI&S. The domestic industry has provided a communication from IBIS stating that the data compiled and provided by IBIS for the year 2011-12 did not match with the DGCI&S data because of non-reporting of data from tuticorin ports which has transacted substantial quantities.

79. The Authority notes that the imports of the subject goods from Indonesia declined in 2012-13 as compared to base year 2011-12 but have subsequently shown a continuous upward trend in absolute terms. The imports from China PR declined to nil levels in the year 2013-14 and picked up during the present period of investigation.

Price Effect

80. With regard to the effect of the dumped imports on prices, the Authority is required to consider whether there has been a significant price undercutting by the alleged dumped imports as compared to the price of the like products 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. The impact of dumped imports on the prices of the domestic industry has been examined with reference to the price undercutting, price suppression and price depression, if any.

Price undercutting

81. In order to determine whether the imports are undercutting the prices of the domestic industry in the market, the Authority has compared landed price of imports with net sales realization of the domestic industry. The following table shows the net selling price of the domestic industry, landed price of the dumped imports and the price undercutting.

82. It is noted that that the landed price of imports from both Indonesia and China PR were below the selling price of the domestic industry, thus resulting in significant price undercutting. The imports from subject countries are significantly undercutting the prices of the domestic industry.

Price suppression/depression

83. To examine the price suppression and depression effects of the dumped imports on the domestic prices, the trend of selling price of the domestic industry has been compared with the cost of production and landed price of imports as follows:

84. The Authority notes that the sale price of the product under consideration has been undergoing a steady decline since base year whereas the cost of sales has increased throughout the injury period. It is thus concluded that the imports are suppressing and depressing the prices of the domestic industry in the market.

I. ECONOMIC PARAMETERS AFFECTING DOMESTIC INDUSTRY

85. As per Annexure II to the AD Rules, the Authority is required to examine the impact of the dumped imports on the domestic industry concerned, which includes an evaluation of all relevant economic factors and indices having a bearing on the state of the industry, including natural 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. Accordingly, various economic parameters of the domestic industry have been analyzed as follows.

Production, Capacity, Capacity utilization, Sales

86. The performance of the domestic industry in respect of sales, capacity, production, and capacity utilization has been as follows:

87. The Authority notes that the domestic industry has enhanced its capacity over the period. The domestic industry has made huge investment in setting up new production facilities at Vilayat, which commenced commercial production in the year 2015. As claimed by the Petitioner domestic industry, the capacity has been enhanced in view of the consistent increase in demand.

88. The production of the domestic industry increased over the injury period, which is a natural consequence of additions to the capacities. Capacity utilisation has declined over the injury period. It is also noted that since there has been consistent increase in capacities, the decline in capacity utilisation could be due to fresh capacity additions. The domestic industry has not claimed injury on account of decline in capacity utilisation.

89. Sales of the domestic industry increased over the injury period. It is however noted that the inventories with the domestic industry increased, which clearly shows that the domestic industry could have sold more, had the exporters not reduced their prices further and absorbed anti-dumping duty.

Market Share

90. The effects of the dumped imports on the domestic sales and the market share of the domestic industry have been as below:

91. The Authority notes that whereas market share of Indonesia declined in 2012-13 and that of domestic industry increased, thereafter, the market share of the domestic industry has declined and that of Indonesia has increased. Market share of China declined till 2013-14 and picked up during the POI .

Profits, return on investment and cash flow

92. The cost of sales, selling price and profit/loss of the domestic industry has been analyzed as follows:

93. The Authority notes that the profit of the domestic industry has declined consistently and significantly throughout the injury period. Whereas the cost of production has increased throughout the injury period, the selling prices have declined throughout the injury period. The price suppression and depression caused by the imports have led to significant decline in profits of the domestic industry.

94. Cash profits and return on investment have followed the same trend as that of profits. The cash profit and return on investment earned by the domestic industry have declined consistently and significantly throughout the injury period.

95. The domestic industry contended that since its original investments are fully depreciated, the return on capital employed determined by considering net fixed assets as a basis is inappropriate and misleading. The domestic industry further submitted that if the profits earned in the POI are considered, the domestic industry would recover its fresh investments in Vilayat in 45 years. The domestic industry has requested the authority to consider present value of the investment to determine the return on investment earned by the domestic industry and to determine NIP for the purpose of injury margin determination. While recognising that a significant part of the investments made by the domestic industry are quite old and net fixed assets of the domestic industry in respect of these investments are now quite low thus leading to a situation of high return on investments figures, the authority notes that the authority is concerned with the trends in the injury parameters. Further, it has been consistent practice of the authority to allow 22% return on investments regardless of the age of these investments.

Inventories

96. The data relating to inventory of the subject goods are shown in the following table.

 97. It is seen that the inventories with the domestic industry increased over the injury period. The domestic industry contended that they would have not faced rising inventories in the absence of dumping in the Country.

Employment, Productivity and Wages

98. The position with regard to employment and wages is as follows:

99. The Authority notes that number of persons employed and wages paid by the domestic industry has increased over the period. Productivity of the domestic industry has also increased. The increase in employment is because of additions to the capacities. It is noted that despite improvements in productivity and number of employees in relation to capacity, profits of the domestic industry have steeply declined.

Magnitude of Dumping

100. Dumping margins determined for each of the subject countries are above de minimis and significant as can be seen from the table above relating to dumping margin determined by the authority. The dumping margins determined at the time of original investigation were also significant.

Growth

101. Growth of the domestic industry was positive in respect of parameters such as production, capacity, sales volumes. The growth of the domestic industry was however negative in respect of inventories, profits, return on investment, cash profits, market share, etc.

Conclusion on injury

102. In view of the above, it is concluded that imports of the product under consideration from Indonesia have shown an increase after 2012-13 in absolute terms and in relation to production and consumption in India whereas imports from China are concerned, it has declined. Imports are undercutting the prices of the domestic industry in the market, which has caused depressing and suppressing effect on the prices of the product under consideration in the market. The dumping margin and injury margin determined are positive. Performance of the domestic industry has deteriorated in terms of various economic parameters such as inventories, profits, return on investments and cash flow. Market share of domestic industry has declined. The landed price of imports is below the selling price, cost of production and non injurious price of the domestic industry in the POI. It is concluded that the domestic industry once again suffered injury from dumped imports. In such a scenario, cessation of the anti dumping duty is likely to adversely affect the prices of the domestic industry and is likely to result in significant price depression.

Magnitude of injury and injury margin

103. The Authority has determined the non-injurious price for the domestic industry, taking into consideration the cost of production of the domestic industry. The domestic industry contended that the authority should allow return on investment considering that significant investments are already depreciated and therefore either the authority should allow return on investment after considering market value of these investments or at least a higher rate of return. The authority has however followed its consistent practice of allowing 22% return on investment. This non-injurious price of the domestic industry has been compared with the landed value of the subject goods from the subject countries to determine the injury margin. The injury margin has been worked out as follows:

J. LIKELIHOOD OF CONTINUATION OR RECURRENCE OF DUMPING AND INJURY

Submissions by the domestic industry

104. The submissions made by the Domestic industry with regard to the likelihood of continuation or recurrence of dumping and injury are as follows:

a. The factors relevant to likelihood of dumping are relevant to the likelihood of injury as well in the present case.

b. Imports made into the domestic market have been made at dumped prices despite imposition of anti-dumping duty. There is huge probability of massive imports of dumped subject good in the event of cessation of anti dumping duty.

c. Producers in the subject countries have significant capacity which establishes that in the event of cessation of duties, exports to India will intensify.

d. The exporters from subject countries are exporting the product under consideration to third countries at dumped prices.

e. The dumping margin in the current POI is positive.

f. The price undercutting without prevailing anti-dumping duties is positive.

g. The import prices are materially below selling price of the domestic industry. The consumers would therefore switch to imported product in the event of cessation of anti-dumping duty which will lead to significant increase in imports of the product.

h. Significant volume of the dumped imports is at prices below cost of sales of the domestic industry and therefore is likely to lead to price suppression and depression in the market. In case of cessation of anti-dumping duty, the domestic industry shall have to reduce their selling price further to compete with dumped imports, driving it even below the cost of sales; leading to severe price injury.

Submissions by the opposing interesting parties

105. Submission made by various interested parties in respect of likelihood were made subsequent to disclosure statement have been dealt with appropriately in later paragraphs.

Examination by the Authority

106. All factors brought to the notice of the Authority have been examined to determine as to whether there is a likelihood of injury in the event of cessation of the duty. The Authority has determined whether injury to the domestic industry is likely to recur due to these imports if the duty ceases to exist.

107. The Authority has examined the contention of various interested parties. The Authority had called for additional information from the domestic industry for the period beyond the period of investigation. Further, the responding exporters have filed information in the form and manner prescribed by the authority with regard to likelihood analysis. As this is a sunset review, the post POI and third country exports data was analysed. Individual countries trade data has been considered for analysis of post POI data, Export to third country data submitted by the responding exporterfrom Indonesia has also been considered for likelihood analysis concerning Indonesia.

i. Level of current and past dumping margin

108. The level of dumping margin both in the original as well as present investigation is positive. Despite the domestic industry holding the capacity to meet the demand, the import of the subject goods from the subject countries still continue to take place at dumped prices. Given the level of price undercutting from subject countries during the review period, the volume of dumped imports is likely to increase further in the event of revocation of anti-dumping duty.

ii. Volume of imports over the injury period

109. It is noted that volume of imports from Indonesia are significant and have shown consistent increase from 2012-13 till POI and in the post POI period despite anti dumping duties in force. Even though imports from China have declined during the injury period, the same have suddenly increased in post POI period. The current volume of imports during the injury period and post injury period and its prices establishes that the domestic industry is still suffering injury as a result of dumping despite existing ADD. Given that the domestic industry has suffered injury and dumping has continued and the volumes have increased from 2012-13 onwards, these parameters per se establish that the cessation of ADD shall lead to further injury to the domestic industry.

Post POI Analysis (April- September 2015)

110. The data of import of PUC into India in post POI was provided by the petitioner and the co-operative exporters, the same has been analysed to see the trends in imports.

Volume of Imports from Subject Countries into India

111. The imports have increased during post POI from subject countries in spite of Antidumping duties in force. There is a huge jump in imports from China. In case of cessation of Anti-Dumping Duty the dumped imports would further intensify. The imports from Indonesia and China have shown positive dumping and injury during the POI, in fact it is very significant as far as China is concerned.

112. The likelihood of dumping and injury from Indonesia was further analysed for post POI period i.e. April 2015- September 2015.

Indonesian Exports to India - Dumping Margin

113. Since the weighted average selling price of exporters from Indonesia in the POI and Post POI is by and large same, the Authority considers it appropriate to adopt the cost of production as worked out in detail for the POI with 5% profits as the normal value for the post POI and third country exports as well, which has then been compared with price of exports to India and the other countries.

i. Dumping margin in respect to exports to third countries.

114. It is noted that the exports of product under consideration from subject countries to third countries are also at dumped prices. While the domestic industry has established dumping in third countries on the basis of exports from China and Indonesia to third countries, the questionnaire responses filed before the Designated Authority also shows that the exports to third countries are at dumped prices.

Indonesia - Third Country Exports Analysis in POI and Post POI

Dumping Margin in POI 

115. The normal value for third country exports has been taken based on cost of production as worked out in detail for the POI with 5% profits as the normal value for the exporters from Indonesia during post POI and third country exports as well. The table above shows that the exports to third countries are taking place at dumped prices. The above table shows that the cost of production for PT South Pacific Viscose and PT Indo Bharat Rayon are very different, even though they are at the same location and using the same technology. The processes of procurements and production are also the same; in fact both the companies are in losses during the POI as per their annual reports.

116. The detailed information furnished by DI, was examined by authority for the weighted average import price in India during POI and post POI, as per the table below:

117. It is seen that the volume of exports to India in post POI period of April-Sept., 2015 has increased, whereas the average import price to India has declined in case of Indonesia during the Post POI as compared to the base year.

118. The authority also examined exports from Indonesia to India and third countries during POI and post POI. Further, exports to third countries were examined cumulatively. The authority also examined pattern of exports from Indonesia to third country in individual transactions and segregated the volume of exports to third countries below the normal value and above the normal value.

119. Analysis of individual export transactions shows that the dumping margin in respect of export to third countries is higher than the dumping margin for India for a quantity of 63,717 MT during the POI. In post POI, 60,135 MT volumes of exports to third countries have dumping margin higher than dumping margin for India.

ii. Excess Capacities and Export Orientation of the Producers

120. As per the information provided by the petitioner on the basis of information in public domain and also information provided by co-operative exporters, it is clear that the producers in subject countries maintain huge capacities to produce subject goods. It is also noted that the producers are highly export oriented. As per the data furnished by the domestic industry; the producers from subject countries export to the range of as high as 26-47 percent of their total production. The export import statistic of product under consideration in Indonesia and China PR are as follows:

Indonesia

121. The exporters have substantial excess capacities and a very high export orientation in Indonesia. Considering significant surplus in Indonesia, should the quantum of present anti dumping duties be reduced, it is evident that those exports to third countries which are at a price lower than price to India would be diverted to Indian market. Thus, should the quantum of anti dumping duties be reduced from the existing levels to the new levels, it is evident that exports to India would significantly increase.

China

122. In case of China also there are huge production capacities in the country. The total Indian demand is in the range of 300,000 MT which is less than 10% of the total installed capacity in China. In case of cessation of Anti Dumping Duties, the Indian market will become very attractive to the exporters and there is every likelihood that imports at dumped prices from the subject countries will further intensify.

iii. Trade defence actions by other countries.

123. It is noted that the Brazilian government has earlier imposed anti-dumping duty on imports of Viscose Staple Fibre (VSF) from China, Thailand, Indonesia and Austria.

iv. Price attractiveness of the Indian market

124. The prices at which subject goods are being imported are substantially lower than the price at which the goods are being sold in the Indian market. Imports are undercutting the domestic industry prices. In case of cessation of duty, the consumers would find the imported product much cheaper than the domestic producers and the producers from the subject countries would further aggressively target the Indian market. Thus, the product is likely to enter in large volumes at dumped prices from the subject countries, should the present anti dumping duty be ceased.

Conclusion on Likelihood of dumping and injury

125. In view of the current volume of imports in the POI from the subject countries despite existence of anti-dumping duty, price undercutting, dumping margin & injury margin; the Authority concludes that there exists likelihood of continued dumping and consequent injury to the domestic industry in the event of cessation of anti-dumping duty. The import prices would further undercut the domestic prices and also have a significant suppressing effect on the domestic prices in the event of cessation of Anti-dumping duties. Surplus capacities available with the subject countries and high export orientation shows likelihood of increase in dumped imports from subject countries.

126. In view of the above, the authority concludes that should the present quantum of anti dumping duties be reduced to the levels of dumping margin and injury margin found in the present POI, the volume of imports shall increase further. The authority therefore concludes that the level of dumping margin and injury margin determined in the present POI in respect of exports to India is not sufficient to establish that dumping and injury in the event of cessation of anti-dumping duties is unlikely to increase. As the the dumping margin and injury margin in respect of individual export transactions to third countries clearly demonstrate that the dumping and consequent injury is likely to intensify in the event of cessation of anti-dumping duties. Thus, the pattern of exports in individual export transactions to third countries in POI and post POI period clearly establishes that it would not be appropriate to reduce the quantum of anti dumping duties to the level of dumping and injury margin established in the present POI. The authority also notes that the dumping margin and injury margin in POI are only one of the parameters for the purpose of determination of likelihood. These parameters in itself are not sufficient to decide the likelihood situation in the event of cessation of anti-dumping duties. Even in a situation where the dumping margin and/or injury margin in the POI are found to be negative, the anti dumping duties is required to be extended further in case it is found that the product is being exported to third countries at dumped and/or injurious price in the POI, or in case the dumping margin and/or injury margin in the post POI are found positive. Thus, in a situation where dumping margin and injury margin are likely to increase with the cessation of anti-dumping duties, as established by the pattern of export transactions to third countries during POI and exports to India and third countries in post POI, it would be appropriate to recommend the continuation of the existing quantum of anti dumping duties.

Causal Link

127. Under Section 9A (5) of the Act, the Authority is required to examine the likelihood of dumping and injury and the need for continuation of duties. The investigation has shown that the imports were at dumped prices, the domestic industry has once again suffered injury and the volume is likely to increase if antidumping duty were allowed to be ceased. Notwithstanding, the Authority has examined whether other listed known factors could have caused or are likely to cause injury to the domestic industry.

a) Imports from third countries: - Imports from third countries are either negligible in volume or higher in prices. Third country imports are unlikely to cause injury to the domestic industry.

b) Demand for the product:- There is no contraction in demand for the product under consideration and therefore claimed injury to the domestic industry cannot be due to possible contraction in demand.

c) Changes in the patterns of consumption: - The pattern of consumption with regard to the product under consideration has not undergone any change. Change in the pattern of consumption is unlikely to contribute to the injury to the domestic industry.

d) Trade restrictive practices of and competition between the foreign and domestic producers: - There is no trade restrictive practice which can contribute to the injury to the domestic industry.

e) Developments in technology: - It is noted that the technology for production of the product has neither undergone any material change. Developments in technology, therefore, do not appear to be a possible factor of injury.

f) Performance of other products produced and sold by the domestic industry: - The domestic industry is a multi-product company. However, injury analysis has been made with respect to the product under consideration only.

g) Export performance: - the domestic industry has claimed injury only on the account of the domestic operations. The authority has segregated export performance at appropriate places.

K. Post Disclosure Submissions

Submissions by Domestic Industry

128. The submissions by the domestic industry have been summarized and are as below:

i. The product under consideration also includes Tencel fibre/ Lyocell fibre. These are being imported from third countries (Austria, UK, Germany and USA) and are being produced by Lenzing in its plants other than Indonesia and China. However, it is understood that Chinese producers have also started producing this fibre. The imports of this fibre are being reported under 5504.9090, it is understood that the Chinese are classifying this product under other HS code (5504.1090 and 5504.1029, 5504.90000, and 5504.1021). The authority may therefore clarify that Tencel fibre /Lyocell fibre are part of the product under consideration and have been included in imports from third countries.

ii. The full description of the product under consideration should be mentioned in duty table and it should be mentioned that antidumping duty is applicable on all these items irrespective of the custom classification.

iii. Petitioner has also established that there was no circumvention of anti dumping duty imposed on imports from China/Indonesia by routing products through Thailand.

iv. The exporters have resorted to excessive confidentiality - (i) as regards inputs, the same are from related party; (ii) as regards financing, the same are from related party; (iii) as regards sales, the same are by related party, (v) management fee which implies services being rendered by parent company towards the same.

v. The questionnaire response ought to be rejected for misleading and false statements 1) as regard to marketing of products produced by the company, 2) Purchase of Pulp from Market, 3) Services being rendered by the parent company with regard to machinery equipment and spare parts, 4) Sale of Fibre. The related party disclosure in the annual report clearly shows the above transactions are related partied transactions

vi. Petitioner is unaware whether the related party has provided any other services, including corporate services. Thus, neither the revenue nor the expenses of South Pacific Viscose are free from related party transactions and there would have been elaborate scrutiny of the exporter, had it truthfully come out before the Designated Authority with clean hands and had it truthfully disclosed all relevant facts in public version. South Pacific Viscose however had malafide intentions in suppressing such vital facts from the Petitioner and used confidentiality provisions for the purpose. Further, Petitioner has been prevented from defending its interests and effectively participating in the present investigations. Participation by the Petitioner in the present investigation with regard to dumping margin for South Pacific Viscose has been reduced to a mere procedural formality.

vii. The company has received grant from Govt. of Indonesia in connection with Govt. of Indonesia’s program to stimulate capital expenditure in the textile industry. These grants have been amortized by the company over a period of 12 years. This fact also has been suppressed by the exporter.

viii. In response to the questionnaire part II, SPV has stated that there is no other related firm that produces or has plans to produce the product in India or third countries. This is blatantly false statement, as SPV is a subsidiary of Lenzing AG and who has two plants in Austria, one plant in UK and one plant in USA. Such false and misleading statement has been made by the exporter.

ix. South Pacific Viscose has not established that its procurement price for inputs, including major raw materials (pulp) reasonably represent costs associated with production and sale of the product under consideration.

x. Analysis of the annual report of SPV shows that amounts payable to the related pulp supplying company have significantly increased, despite the fact that pulp prices had declined in this period. Further, the average outstanding amounts to the pulp supplying company are at reasonably high levels and represents at least more than 100 days of outstanding. This clearly implies significant interest costs that the company would have incurred in the absence of relationship with the pulp supplying company. Thus, there is a clear subsidisation by the related company to South Pacific Viscose.

xi. The company has obtained significant loans from its parent company. The interest on these is being charged at Libor plus 2.75%. However, there is no information given by the exporter to establish appropriateness of the interest rate. Had South Pacific Viscose raised loans in Indonesia, the company would have paid interest at @ around 13% per annum, the rate of interest applicable in Indonesia. The cost of production is required to be adjusted for these in order to reflect the costs reasonably associated with production and sale of the product under consideration. Further, in view of highly incomplete response, the authority should charge full interest on such loans provided by the related company by considering the rate of interest applicable in Indonesia.

xii. The marketing of the product has been undertaken by parent company's marketing arm, it is evident that all expenses relating to such marketing arms, including SGA and profit are required to be considered for determination of dumping margin.

xiii. The authority has determined dumping margin in the range of 1-10 % in the disclosure statement. The Petitioner has assessed dumping margin of the exporter as US$ 341 per MT based on the exporter’s annual report and export price to India. The difference in the dumping margin is TOO SIGNIFICANT.

xiv. In the final findings issued by the authority in the matter of circular weaving machine wherein the authority has adjusted export price for SGA and notional profit for the Indian arm of the holding company of the producer. The exporter has however provided no such information to the authority, the authority never examined these issues due to misleading statements by the exporter and the domestic industry never got opportunity unless recently to highlight these facts in view of suppression of facts and false & misleading statements by the exporter.

xv. The petitioner had earlier submitted in the petition that the exporter gives post invoicing discounts. The questionnaire response of the exporter is clearly indicative of the fact. The exporter has stated that it does not have a price list and the orders are procured based on negotiations. Such being the case, there should be no question of any discounts after procurement of orders. The exporter however has stated that the prices are negotiated depending upon market conditions and "discounts are inevitable". This clearly shows that the exporter indeed is giving discounts after procurement of orders. Petitioner submits that these post invoicing discounts were as high as US$ 100 pmt.

xvi. The annual report of the company shows that the exporter has suffered exchange losses. The amount in annual report is reported after adjusting the losses to the exchange gains. Gross amount of exchange losses are part of raw material costs whereas exchange gains are part of revenues. The petitioner therefore requests the authority to kindly consider the gross amount of exchange loss for determination of cost of production.

xvii. The petitioner has claimed reply to the question on treatment of byproduct/ wastage/scrap/damage/ sub-standard goods as confidential. Petitioner submits that this is malafide for the reason that the treatment of wastage/scrap/ damage/byproduct on one hand and sub-standard goods on the other hand is totally different under dumping law. As far as sub-standard goods are concerned, these are required to be considered as part of product. As far as wastage/scrap/ damage/by-product is concerned, since these are NPUC in the present case, production is required to be determined after adjusting the same for the production of wastage/scrap/ damage/byproduct. SPV claimed confidentiality in the reply in order to prevent domestic industry making appropriate submission, as the same may be disadvantageous to the exporter.

xviii. Annual report of Lenzing shows that Lenzing has resorted to "inventories write down of Euro 9.88 million. Petitioner submits that inventory write down forms part of cost of production in the same way as forex loss on raw materials is considered as a part of cost of production. Therefore, the inventory write down amounts should be added to raw materials costs to determine cost of production.

xix. Petitioner had raised the issue of significantly lower price reported in Indonesian customs at many times during the investigation. There is however no reply given by the exporter and never established by the exporter how its claim of export price corroborates with the Indonesian customs data. The export price claimed by South Pacific Viscose is required to be rejected on this ground alone.

xx. The petitioner submits that already annual report of SPV shows that the company has suffered financial losses. Given the claim of the exporter that its export price to third countries are comparable to the India, it follows that all sales transactions in the home market might become loss making. The petitioner thus submits that correct assessment of cost of production is very critical in the present case.

xxi. Petitioner further submits that the submissions now being made by the petitioner are not from non-confidential version of questionnaire response. In fact, SPV has claimed lot of this information confidential in its questionnaire response. Petitioner has made the submissions on the basis of documents now procured by the petitioner from its market intelligence.

xxii. At Harihar, the company has largely consumed its own pulp. The pulp has been transferred from pulp division to fibre division through financial accounts. The value of pulp adopted in VSF is on the basis of financial records maintained by the company. Since the valuation of captive pulp by the company is on the basis of records maintained by the company, the value adopted by the company is required to be allowed for the present purposes.

xxiii. There is HUGE difference in the NIP determined by the Designated Authority and NIP claimed by the domestic industry in its petition. Further, there is nothing stated in the disclosure why the NIP of the domestic industry has been SO DRASTICALLY REDUCED.

xxiv. Capital employed should be determined considering present value of fixed assets, or at the least gross value of fixed assets. In any case, adoption of net fixed assets is highly inappropriate and, in fact, unfair to the domestic industry, considering that some of the investments are significantly old and therefore, net fixed assets does not represent true value of investments. In fact, the most appropriate value for the purpose is present value of the investments for determination of NIP.

xxv. Petitioner submits that the raw materials utilization and utilities utilization should not be considered at the best achieved levels in the past for the reason that the cause of increase in the consumption is not inefficient utilization of such inputs.

xxvi. Under Annexure-III, only inefficient utilization of raw materials or utilities is required to be normated. Bonafide changes in the raw materials are not required to be normated. Therefore, the Designated Authority is requested to consider the actual consumption of inputs.

xxvii. Corporate expenses are allocated considering consolidated sales of the company (including overseas). However these corporate expenses relate only to Indian business.

xxviii. Research and development expenses have not been considered while calculating NIP. The expenses are incurred to improve the quality of the product. Excel, Nagda plant NIP has not been considered while determining weighted average NIP.

xxix. Imposition of anti dumping has led to improvement in the performance of the domestic industry in terms of production and sales. However, imports of the product under consideration increased in the POI in absolute terms, and have remained significant in relation to production and consumption of the subject goods in India. Increase in imports is much more than the increase in demand.

xxx. Subject imports hold significant market share despite anti dumping duty in existence. Price undercutting without anti dumping duty is significantly positive.

xxxi. It is evident from the questionnaire response of South Pacific Viscose and its annual report that they are claiming continued deteriorating market condition for year 2014 mainly on account of: excess capacities in China. The Capacity utilization of the exporter declined in the last quarter, which implies further likelihood of injury.

xxxii. The company reported that the market conditions during the year were "brutal" leading to negative profit before interest and taxes. The company expected continuation of very difficult market condition in 2015.The major reason for losses suffered by the company was pre-dominantly lower sales price.

xxxiii. The company has not paid any fees to PTG and LAG and only 50% commission to Erafista. Implications of these on cost of production are not clear.

xxxiv. There is insufficient information provided by South Pacific Viscose both for normal value and export price. Further, South Pacific Viscose has resorted to highly misleading information and has made false statement. Under the circumstances, the authority should not determine dumping margin for South Pacific Viscose based on their data. The authority should determine normal value on the basis of PT Indo Bharat and export price on the basis of Indonesian customs data and thereafter determine dumping margin.

xxxv. The quantum of anti dumping duty may therefore be enhanced to account for increase in dumping margin and injury margin. Without prejudice, should the authority continue to consider that the dumping margin for South Pacific Viscose is required to be determined based on their questionnaire response, despite these glaring differences, false & misleading information, the authority may consider extension of the existing quantum of anti dumping duty as was imposed in the original investigation. There is clear likelihood of dumping and injury in case of revocation of antidumping duty.

xxxvi. Petitioner has analysed dumping margin and injury margin in case of Indonesia by considering individual export transactions. Dumping & injury margin for third countries cumulatively is higher than dumping & injury margin in case of India. The volume of exports having dumping margin and injury margin higher than India is quite significant. The volume of dumped exports in case of South Pacific Viscose is higher than volume of dumped exports in case of Indo Bharat.

xxxvii. Petitioner has also analysed dumping and injury margin in case of Indonesia by considering post POI data as per Indian customs. The relevant calculations and import data is enclosed. It would be seen that export price has declined by US$ 72.84 pmt in the post POI period. Thus, even if the dumping margin given in the disclosure statement is considered, the dumping margin in the post POI is higher than the existing anti dumping duty.

xxxviii. Anti dumping duty may be imposed in fixed form in the unit of US Dollar.

xxxix. Petitioner submits that while the exporters in subject countries are already having significant surplus capacities, further fresh capacities are being set up in the subject countries.`

Submissions by Opposing Interested Parties

129. The submissions by all other interested parties have been summarized and are as below:

i. The Authority has not dealt with our submissions on the eligibility of the applicant Industry. The applicants have shared their confidential information among themselves and also represented by a common legal representative for the applicant industry and an exporter from both the subject countries. In disclosure statement, the Authority has simply stated that it is “entirely irrelevant” to the present issue without recording any reasons in support thereof.

ii. The Authority in the disclosure statement has stated that there is likelihood of dumping and injury from both the related entities of applicant industry. If it is the case, the only consequential finding that the Designated Authority ought to have recorded was to consider the applicant as ineligible domestic industry in terms of Rule 2(b). Further, the fact that there were no imports during the period of investigation is absolutely of no consequence in a sunset review investigation as the decision of the Authority is based on likelihood of dumping and injury.

iii. The Authority should re-examine the eligibility of the applicant industry. Further, the guidelines that are followed by the authority to decide whether to exercise discretion for inclusion or exclusion of industry in terms of Rule 2(b) if it is found to be related to an exporter or an importer or resorts to self imports. The conclusion of the Designated Authority that this issue has attained finality in view of its earlier Final Findings is factually not correct if tested on the touchstone of settled law on the subject. The earlier Final Findings of the Designated Authority were quashed by the Hon’ble Tribunal and remanded for fresh consideration. They could not be said to be effective as they were rendered in breach of natural justice declared by the Hon’ble Supreme Court in the context of anti-dumping law in the case of ATMA.

iv. The scope of the PUC cannot be changed in sunset review investigations. In view of the above, it is submitted that since “VSF waste” was not excluded in the original investigation and, therefore, very much covered within the product scope.

v. Disclosure statement records that there is only import of VSF Waste (non product under consideration) from Indonesia while the import data shows that there are several entries for product under consideration alone. Which entry according to Designated Authority is non-product under consideration needs to be clarified.

vi. In response of the paragraph 56 of the disclosure statement, , it is submitted that SPV are selling directly to users and traders and merely having marketing office of the related entity India does not change the channel of distribution. Further, in relation to purchase of raw material, all details relating to purchases from the related party along with detailed documentary evidence had indeed been submitted to the Authority.

vii. In relation to calculation of normal value for post POI period the Authority has, in an unprecedented manner, calculated the normal valve based on POI cost plus 5%.The Authority should consider the post POI Appendix-1 of the exporter for calculating normal value for the likelihood purpose which is already on record.

viii. The applicant industry is having differential pricing for domestic sales vis-à-vis utilization of downstream product for domestic consumption or for export purpose. In this context, the Authority is requested to kindly analyze and considered this factor while doing injury assessment. It may be appreciated that any lower realization due to lower selling price to users who ultimate export the goods cannot be attributed to imports from Indonesia.

ix. The Authority has not done any analysis after adding anti-dumping duties as per its consistent practice. The Authority is requested to kindly also analyze the injury parameters, price undercutting, price underselling after adding anti-dumping duties so that current position of the applicant industry is analyzed. Current analysis without adding anti-dumping duty tantamount to likelihood analysis only and cannot be considered as injury analysis for POI period.

x. In relation to increase in inventory of the applicant industry, the Authority in paragraph 88 has noted that “the inventories with the domestic industry increased, which clearly shows that the domestic industry could have sold more, had the exporters not reduced their prices further and absorbed anti-dumping duty”. The Authority should analyze the contribution of imports to increase in inventory.

xi. It is submitted that the likelihood analysis done by the Authority is incomplete and without any objective assessment. In the disclosure statement, the Authority has reached the likelihood analysis only on the basis of likely dumping, price attractiveness and export intensity of the exporters from subject countries. The dumping margin is barely above the de minimis limit and cannot be considered as significant or material.

xii. As regards price attractiveness, this is a hollow statement inasmuch as the prices to India and to the rest of the world are almost identical. Thus, there is no basis to suggest that Indian market is particularly price attractive.

xiii. In relation to the export intensity of the SPV, exports to India are more or less the same over the years. It is also a matter of fact that SPV is selling almost entirely to those customers who are not catered to or refused supplies by the applicant industry. Therefore, there is no occasion for SPV to increase its customer base. SPV is operating at 99% of their capacity and selling almost complete quantities in the market. Therefore, there is no surplus capacity available with SPV as indicated by the Authority in the disclosure statement further demolishing the myth of export intensity.

xiv. There is no legal or logical basis of extending duties against SPV on the basis of likelihood of injury and dumping. Since the Authority has not calculated the injury margin for post POI period and methodology for calculating post POI dumping is also erroneous, we humbly request the Authority to kindly do not consider any adverse inference of any likelihood analysis against SPV.

xv. MODAL/Micro MODAL fiber must be excluded from the scope of PUC based on the findings of the DA, the DI has neither produced any modal/micro fibers in India including it’s newly commissioned plant in Vilayat in March 2015. The domestic industry does not get unwarranted protection for products which are not produced in India nor have the capacity to produce these products in India.

xvi. The DA has disregarded the profitability of 5% on total cost, used by the petitioners themselves in application and considers allowing a return on capital employed of 22% without providing sufficient details of the methodology for calculation of such return to opposing interested parties to rebutt this assumption. The association claims that such super normal returns are not justified in the light of the fact that the petitioner is already charging a 16% to 22% premium over the International Fiber Prices and making super normal profits in domestic sales.

xvii. The DA has completely ignored the fact that the petitioner has continuously increased the prices of the PUC in the domestic market and charged a premium of 16% to 22% thereby establishing that the continued imposition of the duties will only shield the incorrect capital investment decision (to invest in capacities in the Vilayat plant) of the petitioner. Therefore, there is no causal link between the imports and injury and if duties continue the petitioner will continue to charge premium to the domestic consumers beyond the international prices of Viscose Fiber.

xviii. The DA has erred both in law and fact by including the sales not destined for consumption in India (deemed exports) as domestic sales whereby the actual domestic profit, ROI and price impact has been adversely affected. Exclude the sales destined for consumption outside India from the injury and causal link more particularly the calculation of profit, ROI, cash profit and non injurious price (after exclusion of discounts on such sales). Disregard such rebates and discounts as sales in the course of exports not destined for consumption in India for such purposes.

xix. Antidumping duty levied will deprive the Indian downstream industries of opportunity for low cost raw material and make them uncompetitive industry for export. Further the downstream industries are small, medium scale industry that cannot source international raw material for re-export. This is against the spirit of “MAKE IN INDIA”.

xx. Further, the importers/users who filed submission/letter without detailed questioner, clearly shows they have threatened by Petitioner Company to send such letter (It may be hated all such letters may be stero typed and mainly Companies in Namakkal District, Tamil Nadu). The companies do not have resources to import.

xxi. The Viscose Staple fibre has different end use and Petitioner company does not charge the same price to all the Consumers, there is different price for Non-woven 100% Viscose yarn I Viscose in Polyester yam, Viscose Cotton yam etc. and also for viscose in Export of Yarn.

xxii. Tangshan is vitally affected by the dumping margin determined in the Anti-Dumping investigation. The dumping margin is calculated with Proposed CNV and export value of Sanyou. The paragraph 2.4 of ADA requires: “A fair comparison shall be made between the export price and the normal value.” And investigating authority should take into consideration all export transactions involving all models exported by investigated producers in the dumping margin calculations. There are different specifications or models for the subject products in this case. But we can’t identify from the disclosure that whether the comparison are based on different products specifications or models.

xxiii. As per the Appendix 2 of questionnaire, the total volume of PUC of Sanyou is 267.5MT. However, from the disclosure we noted that the volume of import from China is merely 22 MT during the P01. There is no explanation for the consideration on such conflict.

xxiv. The Ex works export price of Sanyou offered by the Authority is different than the data submitted in questionnaire, the same may be revised accordingly.

xxv. During the POI, the USD-INR was not always stay at a stability number. Quite a long period, the data is higher than 61.69. So the exchange rate using by investigating authority to calculate the CIF price is not reasonable.

xxvi. When browsing consolidated ten year financial summary of the domestic products representation Grasim Industries Limited. We find that Grasim’s profit of VSF sale during the P0I is at a higher level.

xxvii. As pointed in the disclosure, modal fiber is not competing with the PUC in the same market due to the high price, special producing technology and use. Such evidences have been admitted by the petitioner and the Designed Authority. As per Article 2.6 of ADA, the modalfiber/micro modal fiber should be excluded from the scope of product under investigation.

Examination by the Authority

130. The points raised in the post disclosure submissions have already been dealt with in earlier paragraphs of this finding; however, they are being addressed point-wise as under

i. Authority clarifies that there is no change in the scope of product under consideration. The waste was not part of PUC in original investigation or in the present review investigation. The claim of exporter that they have been prejudiced in any way on this count is baseless.

ii. As regards information concerning channel of distribution in the questionnaire response by SPV, the authority notes that the questionnaire response of SPV did not explain the role of marketing office in India, nor any information has been provided by the company with regard to payments made to this marketing office and sufficiency thereof considering the expenses incurred by the Indian office of Lenzing.

iii. As regards purchase of raw material, SPV indeed claimed in its questionnaire response that all purchases of inputs were made form unrelated parties, whereas pulp in fact was purchased from related parties.

iv. As regards determination of normal value for post POI on the basis of cost of production after adding 5% profits, the authority notes that complete information required for determination of normal value for post POI period was not made available and therefore the authority has determined normal value on the basis of cost of production plus 5% profit.Moreover, since the weighted average selling price of PT South Pacific Viscose in the POI and Post POI is by and large same, the Authority considered it appropriate to adopt the cost of production, as worked out in detail for the POI with 5% profits as the normal value for the post POI and third country exports as well. With a view to ensure fair comparison of the normal value for the other exporter from Indonesia the same methodology has been adopted.

v. As regards certain sales made by domestic industry describing as deemed export sales, the petitioner clarified that they have not availed any export benefits on these sales, these sales have been made to the domestic consumers and the goods in these cases were destined for consumption within the Country. Export benefits in these cases have been availed by the consumers of the domestic industry.These sales are rightly treated as domestic sales.

vi. As regards assessment of price undercutting after adding anti dumping duties, the authority notes that selling price of the domestic industry is almost comparable to the landed price of imports after adding anti dumping duty. Further, since present investigation is a sunset review investigation, the authority is required to determine price undercutting and injury margin without adding anti dumping duty for likelihood purposes. Positive price undercutting without adding anti dumping duty and almost comparable domestic and imported product prices after adding anti dumping duty implies that in the event of cessation of existing anti dumping duty, the domestic industry shall be forced to reduce its prices. Further, the price underselling is also required to be considered alongwith price undercutting in order to ascertain the likely effect of dumped imports on the domestic industry.

vii. As regards increase in inventories, the authority notes that the domestic industry could have sold to the extent of inventories. It is noted that the inventories and imports undisputedly increased over the injury period.

viii. As regards quantum of dumping margin for the purpose of likelihood analysis, the authority notes that the dumping margin is only one of the parameters to undertake likelihood analysis. Existing quantum of anti dumping duty, surplus capacities with the exporters and volume of exports to third countries are also quite relevant and appropriate in this regard.

ix. SPV has contended that since volume of exports over the injury period is comparable, SPV does not have export intensity. Authority notes that there is increase in imports from Indonesia, after decline in 2012-13 despite existing anti dumping duties. Further, the mere fact that existing capacities are fully utilized does not mean that the exporter does not have freely disposable production capacities. Further, the current volume of exports from Indonesian is significant enough to establish likely adverse price effect in the event of cessation of anti dumping duty. It is noted in this regard that the annual report of the exporter itself has inter-alia stated as follows which clearly establishes that the exporter is facing the same competition in the market as is being faced by the petitioner.

x. Interested parties being contended that modal/micro modal fiber must be excluded from the scope of PUC. The authority, however, notes that modal/micro modal fiber has been produced by the domestic industry and, imported from third countries, even though not imported from subject countries. Since exporters from subject countries have not exported modal/modal micro fiber, the authority has determined NIP and injury margin after excluding cost of production of modal/micro modal fiber. However, as far as injury analysis is concerned, since modal/micro modal fiber is part of PUC, the same is included in the injury analysis.

xi. It has been contended that the domestic industry has consistently increased prices. Verified information however shows that there was consistent decline in the selling price over the injury period and the profitability of the domestic industry has also declined significantly over the period. The decline in the selling price is despite the increase in the cost of production.

xii. As regards disclosure of various figures such as normal value, export price, NIP etc, it is clarified that these information are confidential and therefore cannot be disclosed publicly. The export values for exporters from China has been calculated as per the established practices in the Directorate.

xiii. As regards contention that the authority should compare cost of production of exporters and the domestic industry, the authority notes that the objective of the present investigation is not to examine competitiveness of the petitioner domestic industry vis-à-vis exporters. The authority is required to examine whether cessation of anti dumping duty is likely to lead to continuation or recurrence of dumping and consequent injury to the domestic industry. Inter-se competiveness of domestic producer and foreign producer is irrelevant for the purpose.

xiv. The interested parties have contended that the exporter benchmark their prices on the basis of prices declared by the domestic industry. The investigation has however shown that the price undercutting is positive. This implies that the even if domestic industry is fixing its prices first, the exporter are selling their product at a price below the selling price of the domestic industry. This also establishes that the cessation of anti dumping duty shall lead to significant price undercutting and adverse price effect.

xv. As regards competitiveness of the downstream industry in export market, the authority notes that imports of a product for export production in any case do not attract anti dumping duty and therefore these exports shall not suffer as a result of proposed measures,

xvi. As regards submissions concerning disclosure of methodology and information concerning dumping margin, the authority notes that the disclosure statement explains in detail the methodology adopted for determination of normal value, export price, dumping margin. As far as confidential figures are concerned, the same could not be disclosed in view of the confidentiality provisions. It is, however, clarified that authority has undertaken a fair comparison between normal value and export price based on all parameters laid down under the law and has determined dumping margin after taking into account of known exports from China.

xvii. As regards differences in physical characteristics or specifications, the exporter has not provided any information in the questionnaire response nor made any claim whatsoever to show that there are significant differences in specifications or models and weighted average comparison would not be appropriate. In fact, on the spot verification revealed that in fact there was no significant difference in the cost of production of different product types.

xviii. As regards Para (xx) of the disclosure statement, the interested parties were intimated about inadvertent inclusion of this Para in the disclosure statement.

xix. As regards exchange rate, it is clarified that the authority has mentioned weighted average rate prevailing during POI in the procedure part of the disclosure. However, the import price is based on exchange rate prevailing during the relevant month as declared by the customs authorities.

xx. The authority notes that there is no bar on a legal consultant to represent a domestic industry and a foreign exporter, particularly when two are related entities. In any case, the rules do not proscribe that related parties should not participate in the investigation through a common counsel. Ultimately, the authority has made present determination on the basis of verified facts and after its own satisfaction with regard to information provided by the interested parties.

xxi. As regard contentions concerning eligibility of the Petitioner, the fact that two entities are related entities and the authority has found likelihood of continuation and or recurrence of dumping and injury, it does not imply that the authority should hold the petitioner as an ineligible domestic industry because of its relationship. The authority has in fact reassessed the standing of the petitioner as a domestic industry. The authority has not applied the original determination in this regard. However, the interested parties have failed to establish how the petitioner does not constitute domestic industry within the meaning of Rule 2(b). It is clarified that there are no exports of the product under consideration by such related producers in subject countries and therefore the relationship of petitioner with the producers in subject countries in any case does not attract Rule 2(b). The authority notes that the question of exclusion arises only in a situation where such related producers in subject countries have exported significant volumes in the POI. While in the present case, therelated Indonesian company has exportedonlr an insignificant quantity of waste in Indian market. The document provided by petitioner clearly shows that this import was cleared without payment of anti-dumping duty. This fact not only establishes that waste was not included within the scope of product under consideration at the time of original investigation, but also establishes that the related party has not exported PUC in India.

xxii. As regards analysis of ten years financial summary of the petitioner, authority notes that the present determination is based on verified information of the petitioner, which is for product under consideration. Further, profits and return on investment etc. have been determined only for domestic operations.

L. CONCLUSION

131. The Authority has, after considering the foregoing, come to the conclusion that:

a. The subject goods have been exported to India from the subject countries below its normal value;

b. The domestic industry has suffered injury;

c. There is a likelihood of recurrence of dumping and injury in case of cessation of Anti dumping duties.

d. Under the circumstances, the Designated Authority considers it appropriate to recommend existing quantum of anti dumping duties against imports of Indonesia and China. In case of China PR, there was no responding exporter during original investigation however, in the present review investigation one exporter has responded and provided information which has been considered by the Authority and individual dumping margin and injury margin was determined .

M. INDIAN INDUSTRY’S INTEREST AND OTHER ISSUES

132 The Authority recognizes that imposition of antidumping duties might affect the price level of product in India. However, fair competition in Indian market will not be reduced by the anti-dumping measures. On the contrary, imposition of anti-dumping measures would remove the unfair advantage gained by dumping practices, would arrest the decline of the domestic industry and help maintain availability of wider choice to the consumers of subject goods. Consumers could still maintain two or more sources of supply.

133.The Authority notes that the purpose of antidumping duties, in general, is to eliminate injury caused to the Domestic Industry by unfair trade practices of dumping so as to re- establish a situation of open and fair competition in Indian market, which is in the general interest of the country. 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 products to the consumers.

N. CONCLUSION AND RECOMMENDATION

134.Having regard to the contentions raised, information provided and submissions made by the interested parties and facts available before the Authority and on the basis of above analysis including analysis of likelihood of continuation or recurrence of dumping and injury and post Disclosure Statement submissions made by the interested parties, the Authority concludes that:

i. The subject goods from the subject countries continue to enter the Indian market at dumped prices. Dumping margin and injury margin are positive and significant.

ii. Performance of the domestic industry has deteriorated in terms of various economic parameters such as inventories, profits, return on investments and cash flow. Market share of domestic industry has declined. The landed price of imports is below the selling price, cost of production and non injurious price of the domestic industry in the POI.

iii. Price undercutting is likely to be significantly positive in the event of cessation of anti dumping duty.

iv. The fact that subject countries have significant surplus capacities, exporters from subject countries are highly export oriented, and exports made are at a price which is showing significantly positive dumping margin and injury margin, the Authority determines that in the event of withdrawal of the anti-dumping duties, there is likelihood of dumping and injury to the domestic industry.

v. Under the circumstances, the Designated Authority considers it appropriate to recommend existing quantum of anti dumping duties against imports of subject goods from Indonesia and China PR. In case of China PR, there was no responding exporter during original investigation however, in the present review investigation one exporter has responded and provided information which has been considered by the Authority and individual dumping margin and injury margin was determined. Accordingly, the duties for responding exporter and non cooperative exporter are as per the duty table below. The Authority, thus, in order to remove likely injury to the domestic industry, considers it necessary to recommend continuation of definitive anti dumping duty on all imports of the subject goods from the subject countries as per column 8 in the duty table below:

Duty Table

135.Landed value of imports for the purpose of this Notification shall be the assessable value as determined by the Customs under the Customs Act, 1962 (52 of 1962) and includes all duties of customs except duties under sections 3, 3A, 8B, 9 and 9A of the said Act.

136.An appeal against the order of the Central Government arising out of this final finding shall lie before the Customs, Excise and Service Tax Appellate Tribunal in accordance with the Customs Tariff Act.

(A.K.Bhalla)
Additional secretary & Designated Authority