(ii)

We request the Authority to use the above CIF figures for determining the landed value and to examine whether the Injury Margin is lower than the dumping margin.

(iii)

The Disclosure states reproduces the submissions of SOIL, the Delegation of the European Commission and HTAS. It is seen from para 4 - "Examination by Authority" that these submissions will be considered at for determination of injury to the Domestic Industry. In other words, there is no disclosure in regard to the existence or recurrence of injury. The Disclosure statement is flawed.

(iv)

The Authority will recall that in the original investigation HTAS had pointed out that each of the six catalysts was a distinct like product. The catalysts are not substitutable and hence the injury should be determined separately for each of the six catalysts. The Authority did not accept this contention and had determined the injury by cumulating all the six catalysts together and had invoked Article 3.6 of the Agreement on Anti dumping. In the present investigation period, 4 of the subject catalysts had not been exported. The Zinc Oxide Catalyst should not have been included in the investigation as the duty on the said catalyst was zero in the original investigation. Since there was no anti dumping duty for Zinc Oxide Catalyst the same cannot form part of the present Review. Proviso to Section 9A (5) provides for a Review on the premise that cessation of the duty is likely to lead to continuation or recurrence of dumping and injury. Cessation of duty pre­supposes the existence of anti dumping duty. There was no duty on Zinc Oxide Catalyst and hence there is no question of cessation of the duty on Zinc Oxide Catalyst. Inclusion of Zinc Oxide catalyst in the Sunset Review is incorrect.

(v)

The injury analysis is, therefore, required to be restricted only to the LTS catalyst. As the Authority had already held that it is not possible to determine injury separately for each catalyst, any injury analysis based on injury parameters for all the six catalysts, would completely distort the injury analysis. The Authority cannot, therefore, determine either the existence of or recurrence of injury to LTS/Zinc Oxide Catalyst. Consequently the review should result in termination of duty on all catalysts.

(vi)

We entirely agree with the Authority, without prejudice to the foregoing, that the withdrawal of anti dumping duty on four Catalysts will not lead to recurrence of injury to the domestic injury. SCIL have argued that during the period of review they had suffered injury and that the said injury has been caused by the dumping. It is clear from their own submission that they have faced stiff resistance for any increase in price from customers. This is purely a commercial aspect and cannot be attributed to HTAS who had not supplied four of these Catalysts.

(vii)

The submission that the reduction in the Customs duties had resulted in increase in dumping margin is totally incorrect. The dumping margin is a function of normal value and export price at ex-works level which are not at all dependent on the customs duty prevailing in India. Similarly, their submission regarding low prices of non-proprietary catalysts and higher prices on proprietary catalysts is totally irrelevant to the issue and is without any basis or evidence. The provisional duty was imposed in June 1997 and the said duty had continued till today. In this scenario, it is difficult to understand the argument of SCIL that the alleged injury during the period 1997 to 2002 has been caused by HTAS. If SCIL had suffered injury during this period when four of these catalysts had not even been exported it could only mean that the injury is self-inflicted. In fact, SCIL had admitted that the injury has increased because of reduction is customs duty, increase in cost of production etc. These are the precise reasons which are required to be analysed by the Authority for determining whether the material injury was caused by reasons other than dumping. In fact, there should be a total termination of this investigation rather than withdrawal of anti dumping duty only on four catalysts.

(viii)

In view of the above, we request the Authority to re-examine the entire aspect of injury and casual link analysis and issue a revised disclosure. It is our submission that no injury has been caused to the domestic industry as a result of the export of the two Catalysts. Hence there is neither a present material injury nor the possibility of recurrence of material injury.

(ix)

We request the Hon'ble Authority to terminate the Sunset Rt riew by recommending withdrawal of anti dumping duties on all the six Catalysts.

B)

EUROPEAN COMMISSION, DELEGATION OF EUROPEAN UNION, NEW DELHI

(i)

By not analysing all factors having bearing on the states of the Domestic Industry as determined under Article 3.4 of the WTO Anti-Dumping Agreement the Designated Authority has violafd the same article.

(ii)

By not demonstrating a causal relationship between the alleged dumped imports and the alleged injury and by failing to examine other possible causes for adverse effects on the Domestic Industry, the Designated Authority violated Article 3.5 of the WTO Anti-dumping Agreement.

In response to the disclosure, the following submissions have been made:

(i)

The European Commission finds the injury analysis in this case to be very weak on a number of points:

• Of the two products for which injury was found, Catalyst ZnODS should not be included in the analysis for the reasons outlined under i) above.



• The Indian authorities have defined the `like product' to be all six catalysts, despite the arguments of the Danish exporter. It would now appear, from the findings on injury in the review investigation, that the investigation authorities have redefined the `like product' without explicitly admitting it. The reasoning for this assumption, on our part, is that the injury analysis finds no injury in respect of four of the six products which should imply a separation of the various modes for the purpose of injury analysis.



• The findings contradicts the original finding that these catalysts are one like product and the WTO Rules make it clear that injury must be determined for the like product as a whole. This raises the question, whether, then two thirds of the types concerned are found to be non-injurious, how can injury be found for the remaining one third. In these circumstances, injury could only be deemed to exist if a detailed injury and causation analysis concluded, that the alleged injury by the two models concerned (in fact, only one if ZnODS is excluded) was material in the context of the whole product range. It is clear that no such analysis has been carried out.



• A further point needs to be made in terms of the information available to the European Commission from the disclosure document and the Danish exporter.The latter has shown that its export prices to India in fact exceed it costs of production, i.e. they are not loss making. Clearly therefore any measure which is added to that price to achieve an Indian non-injurious price will identify the amount of the inefficiencies of the Indian domestic producers in comparison to their Danish counterparts. In the original investigation this ranged from 88% to 266%. With the Indian domestic producers being shown to require non-injurious prices so massively above the cost of production of the Danish exporter, it is difficult to believe that other factors are not responsible for the injury suffered to them.

C.

EXAMINATION BY AUTHORITY:

1.

PRODUCT UNDER CONSIDERATION AND LIKE ARTICLE

2.

DOMESTIC INDUSTRY

3.

NORMAL VALUE AND EXPORT PRICE

(i)

FOR ZnODSS and LTS .CATALYSTS

(ii)

OTHER CATALYSTS VIZ. HYDRODESULPHURISATION (HDS), HIGH TEMPERATURE SHIFT (HTS), SECONDARY REFORMING (SR) AND METHANATION (METH.)

4.

EXPORT PRICE

5.

DUMPING-COMPARISON OF NORMAL VALUE AND EXPORT PRICE

6.

INJURY AND CAUSAL LINK

7.

LANDED VALUE

D.

CONCLUSIONS:

Sd/-
L. V. Saptharishi
Designated Authority