NOTIFICATION NO. 31/1/2001-DGAD DATE 11/09/2002

Anti-dumping investigation in the matter relating to review of anti-dumping duty imposed on imports of Thermal Sensitive Paper originating in or exported from EU - Final Findings
No. 31/1/2001-DGAD.-Having regard to the Customs Tariff-Act, 1975 as amended in 1995 and the Customs Tariff (Identification, Assessment and Collection of Anti-Dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995, thereof.

A. PROCEDURE:

2. The procedure described below has been followed with regard to the investigations:-

(i) The Designated Authority (hereinafter referred to as Authority), under Rules initiated the review of anti-dumping duty imposed on imports of Thermal Sensitive Paper (hereinafter referred to as subject goods) originating in or exported from European Union (hereinafter referred to as subject country/territory) pursuant to the final findings notification no. 25/1/98/ADD dated 3rd March, 2000. This review was initiated vide notification no. 31/1/2001/-DGAD dated 13.9.01.

(ii) The Designated Authority notified the initiation of the sunset review vide notification no. 31/1/2001/-DGAD dated 13.9.01 with regard to anti-dumping duties imposed on imports of Thermal Sensitive Paper originating in or exported from the subject country/territory. The Designated Authority forwarded a copy of the initiation notification to the known interested parties who were requested to furnished their views, if any, within 40 days from the date of the letter.

(iii) The Authority forwarded a copy of the public notice to the known industry association, the domestic industry and gave them an opportunity to make their views known in writing.

(iv) The Authority forwarded a copy of the public notice to all the known exporters and gave them an opportunity to make their views known in writing in accordance with the Rule 6(2). The Authority sent questionnaire to the following known exporters:-

Jujo Paper Co. Ltd., P.O. Box No. 92, PI - 55, 27501 Kauttua, Finland.

Japan Pulp & Paper GmbH, Immermannsirasse, 14-16, 402100, Dusseldorf, Germany.

Storta Spazialpapiere GmbH, Husumer Strasse 12, 29241, Flensburg, Germany.

Mitsubishi Hitek Paper Limited, Husumer Strasse 12, 24941, Flensburg, Germany.

(v) The Authority forwarded copy of the public notice to the following known importers and consumers of Thermal Sensitive Paper in India (whose details were made available by the petitioners in the original investigations) in accordance with Rule 6(5) and advised them to make their views known in writing within forty days from the date of the letter.

Cantronics Office Equipments Pvt. Limited, Mumbai-400007

Hindustan Sales, Delhi-110006.

VI Office Equipments Pvt. Limited, Mumbai-600006.

Rational Business Corporation, New Delhi-110052.

Hariti Papers Pvt. Limited, Jaipur Vardhman Paper Products, Aurangabad.

Vaishano Paper Products, Delhi-6

Sohan Lal Nem Chand Jain, Delhi-110006.

Alankar Stationery Mart, Delhi- 110006.

Modi Hospital Appliances Mfg. Co Limited, Chennai-93

Sohum Industries Pvt. Limited, Mumbai-400002.

Tokushu Menor Paper Mfg. Co., Chennai-600066.

Haryana Traders P. Limited, Delhi-110006.

Shyam Traders, Delhi-110006.

Varsha Traders, Mumbai.

Asian Coated Paper P. Ltd., New .Delhi.

The Embassy of Finland, New Delhi-110021.

Excell Mark, Chennai-600001.

All India Thermal Paper Dealers Association, New Delhi.

(vi) The Authority forwarded the initiation notification to the Embassies of the Federal Republic of Germany and Finland in India; 'the European Union, Delegation of the European Commission in India in accordance with Rule 6(2) with a request to advise the exporters/producers from their country to respond to the questionnaire within the prescribed time. A copy of the letter and questionnaire sent to the exporters was also sent to the concerned Embassies, along with a list of known exporters/producers

(vii) The Authority provided an opportunity to the interested parties to present their views orally in a public hearing on 1.3.2002. All parties presenting views were requested to file written submissions of their views expressed. The parties were advised to collect copies of the views expressed by the opposing parties and offer rebuttals, if any;

(viii) In addition to the known interested parties, responses/information was filed by the following interested parties during the investigation:

M/s. Papierfabrik August Koehler AG, Germany.

(ix) The Authority made available the public file to all interested parties containing non-confidential version of all evidence submitted by various interested parties for inspection, upon request;

(x) Arguments raised by the interested parties have been appropriately dealt in these findings;

(xi) In accordance with Rule 16 of the Rules supra, the essential facts/basis considered for these findings were disclosed to known interested parties on 2°d September, 2002 and comments received on the same have also been duly considered in these findings;

(xii) The period of investigation. (POI) for the present review is 1st April, 2000 to 31 S` March, 2001.

(xiii) * * * in this notification represents information furnished by the interested party on confidential basis and so considered by the Authority under the Rules;

B. VIEWS OF PETITIONERS, EXPORTERS, IMPORTERS AND OTHER INTERESTED PARTIES AND EXAMINATION ' BY AUTHORITY.

3. The views expressed by various interested parties in response to the initiation notification, subsequent to the oral hearing and in response to the disclosure statement are discussed in the relevant paragraphs herein below to the extent these are relevant as per rules and have a bearing upon the case. The arguments raised by the interested parties have been examined, considered and, wherever appropriate, dealt in the relevant paragraphs here-I below.

C. PRODUCT UNDER CONSIDERATION AND LIKE ARTICLE

4. Thermal Sensitive Paper is a paper coated with a special mix of chemicals for providing thermal sensitive properties to the base paper. Thermal Sensitive Paper is primarily used for recording messages for electronic equipments where the machine is used to record messages, reports through sensitivity of heat rays. It is primarily used in fax machines. It is also used in ECG Machines and other medical equipments, Seismographic machines, Airlines baggage tagging, tickets, boarding cards etc. TSP is classified under chapter 48 of the Customs Tariff Act. The product does not have a dedicated Customs Classification. However, it generally gets covered under sub-heading 4809.10 i.e. `Carbon or similar copying paper' of Schedule I of Customs Tariff Act. TSP is also cleared under different sub-headings of heading 4811 and 4816 of the Customs Tariff Classification. These Classifications are indicative only and are in no way binding on the scope of the present investigation.

5. The petitioners have stated that that subject goods are produced in a large number of sizes to meet specific end application. The petitioner largely produces the product in Jumbo rolls, which are then slit to the desired size, primarily by the companies in the market (known as slitters). There is significant price difference between the jumbo rolls and slitted small rolls for specific end use. The goods are imported both in jumbo rolls as also in finished slitted small rolls for specific end use. The product is not having a dedicated custom classification at six-digit level. Therefore, the data of DGCI&S or of the secondary sources is not sufficient to segregate the jumbo rolls with the slit rolls. While the jumbo rolls are invariably imported in the multiples of container loads, the imports of slit rolls are far lower in terms of weight. In view of significant difference in the prices of the jumbo rolls and slit rolls the petitioner has requested that the comparison may be done separately for the two types. The petitioner has further argued that in view of significant differences in the export price in terms of square meters, even for the same customer/country, the entire calculation may be done in terms of weight of the material.

6. The Authority notes that there are no submissions opposing the product under consideration. The Authority therefore confirms the product under consideration as Thermal Sensitive Paper.

7. It has been claimed by the petitioner that the Thermal Sensitive Paper being produced by the domestic industry and the Thermal Sensitive Paper exported from EU closely resemble in terms of various characteristics and are technically and commercially substitutable. There is thus no difference in the Thermal Sensitive Paper produced by the petitioner and the subject goods imported from EU. . No arguments have been raised by any interested party in this regard. The Authority therefore holds that the Thermal Sensitive Paper produced by the domestic industry is a Like Article to the product under consideration.

D. DOMESTIC INDUSTRY:

8. M/s. Shree Krishna Paper Mills and Industries Limited represent the domestic industry as they account for 100% of the Indian production of Thermal Sensitive Paper. There is no dispute as regards the standing of the petitioner. Therefore, the Authority holds that M/s. Shree Krishna Paper Mills and Industries Limited represent the domestic industry.

E. EXAMINATION OF ISSUES RELATING TO NORMAL VALUE, EXPORT PRICE AND DUMPING

9. The Authority sent questionnaires to all known exporters for the purpose of determination of normal value in accordance with section9A(1)(C) of the Act. Responses were received from the following exporters/importers.

Exporters:

i. M/s. Jujo Thermal Ltd., Finland.

ii. M/s. Japan Pulp and Paper GmbH., Germany.

iii. M/s. Papierfabrik August Koehler AG, Germany

iv. M/s. Mitsubishi Hitec Paper, Germany.

Importers:

M/s. Rational Business Corporation, New Delhi

10. Submissions made by the Domestic industry;

i. Exporters from EU were earlier found to be dumping Thermal Sensitive Paper in the Indian market. The domestic industry was forced . to approach the Designated Authority for imposition of anti-dumping duty on imports from the EU. The Designated Authority recommended imposition of anti-dumping duty on imports from EU. However, after imposition of anti-dumping duty on imports from EU, the exporters have intensified their dumping. Further, due to increase in various input costs, the cost of production of the product has increased significantly, resulting in increased injury to the domestic industry. The anti-dumping duty earlier recommended is required to be enhanced against imports from the EU.

ii. The Designated Authority sent questionnaire to known exporters/producers in EU as also to the Delegation of EU in India. It appears that only one exporter M/s. Jujo Thermal Ltd., responded to the Authority, which also is incomplete. With regard to Koehler, it appears that the company has not filed any response in the present investigations.

iii. In its response, Jujo Thermal has stated that "as per the company's valid licence agreement with the license owners, the company's standard policy and for the reasons of maintaining confidentiality, the company does not part with or transmit the costing information". It clearly shows that the company has neither furnished cost of production nor the company is willing to furnish the same. The company has deliberately and consciously withheld this information. The cost of production is very crucial information, in the absence of which the whole response deserves to be rejected. Thus, there is no reason for the Designated Authority to even give another opportunity to the company to complete the deficiency.

iv. As regards exports from Finland, the normal value is required to be determined with reference to the selling price of the exporter in EU. Mere comparison with the prices in Finland would not be sufficient. In case the exporter has provided information on with regard to Finland, the information becomes insufficient on this account alone.

v. Mere existence of profits in respect of a company is insufficient. The sales in the home market must pass the 80:20 test as provided under Annexure I to the Rules.

vi. Since the exporters from EU have preferred not to cooperate with the Designated Authority, it is submitted that normal value may kindly be assessed on the basis of best information available, i.e. the data provided by the petitioner. The normal value has been assessed considering the normal value earlier claimed by the exporter from the EU and subsequent increases in the raw material prices, leaving aside other increases in the cost of production. Further, we have determined normal value in EU on the basis of estimates of cost of production. It is submitted that the cost of production after addition of SGA and profit can be considered as good indicator of normal value in EU.

vii. We have already provided detailed information which shows that after the period earlier investigated by the Designated Authority, the cost of production of Thermal Sensitive Paper has increased substantially due to steep increase in raw materials and fuel prices. We submit that the normal value is required to be calculated considering these cost increases.

viii. With regard to export price, as is already submitted by the domestic industry and accepted by the Designated Authority in other case relating to China, calculation of export price in terms of square meter would result in inappropriate calculation of export price. We reiterate that the export price can only be determined in terms of weight of the material. It is therefore requested that dumping margin and injury margin in this case may also be calculated in terms of weight of material only.

ix. Since the domestic industry largely sells in jumbo rolls and since the non-injurious price is determined for jumbo rolls, it is submitted that the export price is required to be calculated for jumbo rolls only. Any imports of other kinds of Thermal Sensitive Paper are required to be excluded for the purpose of export price and landed price calculations.

11. Submissions made by M/s. Papierfabrik August Koehler AG, Germany

(i) The petition of the domestic industry seeking review of anti-dumping duty is not directed against Koehler and the Koehler has not been named as known exporter in the Annexure `F' filed along with the said petition, therefore, the allegations contained in the petition are not directed against the Koehler and Koehler has not been identified by the domestic industry as guilty of dumping of Thermal Sensitive Paper.

(ii) The reliance of domestic industry is on secondary source and not on DGCI&S. The purported data collected from secondary source are manipulated, unauthenticated as no responsibility can be fixed on these secondary sources for mis-informations. Moreover, these purported data of secondary sources have also been made as confidential for no reasons.

(iii) In so far as Koehler is concerned the export price of Koehler's product is considerably higher than the hypothetical export price unilaterally determined by the petitioner.

(iv) Based on the profit and loss statement and other informations submitted by Koehler depicts that Koehler is making reasonable profits at their domestic selling price is less than the export price of the subject goods to India and there is no dumping of subject goods to India by Koehler.

(v) There is absolutely nothing to show in support of the allegation that material cost in EU (or world over) has increased.

(vi) The export price has been calculated by the domestic industry on the basis of a solitary invoice of an anonymous importer and this solitary invoice has been kept as confidential.

(vii) There is absolutely nothing, leave apart any reliable evidence to show that the raw material cost of the subject goods in EU has increased. Therefore, the normal value of the subject goods as construed by the petitioner, is wholly incorrect as it is not based on any prima facie evidence of increase in cost of raw materials in EU.

(viii) The comparison of Appendix-4 and Appendix-6 (confidential versions of Koehler) prima facie shows that export price of the subject goods to India have substantially increased during the period of investigation.

12. Submissions made by Jujo Thermal Ltd., Finland

(i) The. petitioner has in their complaint constructed the normal value based on their increased cost of production, which is contrary to the laws and rules. As the authority needs to determine the normal value based on the domestic sales price in the exporting country.

(ii) In the present case the normal value in case of Finland should be based on the domestic selling price of subject goods charged by the exporter during the period of investigation.

(iii) There was no association or compensatory arrangement between the exporter M/s. Jujo Thermal Ltd., Finland and M/s. Rational Business Corporation, importer in India for the subject goods.

(iv) Since the domestic selling price charged by them for the subject goods is lower than the export price to India, there is no dumping by them.

(v) We are making reasonable profits on the sale of the subject goods in Finland which accounts for nearly 95% of our total turnover. The audited balance sheet and income statement of M/s. Jujo Thermal Ltd., shows that the company is making sufficient profits.

13. M/s. Japan Pulp and Paper GmbH

M/s. Japan Pulp and Paper GmbH, Germany have informed that they are sales agent of Jujo Thermal Oy, Finland and that they have not exported any direct thermal paper on behalf of the manufacturer during the investigation period.

14. M/s Mitsubishi Hitec Paper, Germany sought an extension for submission of response which was also allowed by the Authority. However, no response was received from the said exporter prior to the issue of disclosures. In response to the disclosures the exporter has made submissions regarding quality of Thermal Sensitive Paper produced by them. Other submissions made. by them are as under:-

(i) Thermal papers are used for a wide range of applications than mentioned in the submission. Not only fax but also increasingly non-fax thermal applications. Substitution of our papers by Shree Krishna is not possible. Maybe and only for the purpose of Fax -roll . and here we would even regard the papers uncomparable.

(ii) We still believe that MPF never supplied any thermal paper with dumping prices into India and we strongly oppose the submission by the petitioner to have intensified dumping.

(iii) Absolute Increase of imports are because of the increase of the usage of thermal papers in general. The worldwide market is growing by 5-10 % a year. Also Shree Krishna should have increased its sales due to the growing market.

(iv) The proposed amount of antidumping duty is extremely high and not seen in any other part of the world for thermal papers.

(v) The current ADD of 0,03842 US$/100m2 is already too high and not acceptable to us (especially considering that the import cost are, apart from the ADD, adding up to another approx. 60 already.

(vi) Thermal paper grades which are essential to India's way into future innovative technologies and applications will become so expensive, that India will not be able to adopt those technologies and advantages.

15. Submissions made by M/s. Rational Business Corporation, New Delhi

The petitioner has in their complaint constructed the normal value based on their increased cost of production, which is contrary to the laws and rules. It is only when the relevant domestic sales price in the exporting country are unavailable that the recourse for determination of the normal value may be had by other means as laid down under the rules.

16. Examination by the Authority

a) NORMAL VALUE

(i) M/s. Jujo Thermal Ltd., Finland have furnished information regarding their exports to India. However they have not furnished full details of transaction wise domestic sales as required in Appendix 1 and cost of production of subject goods as required in Appendix 8 to enable the Authority to determine whether the domestic sales are in the ordinary course of trade.

(ii) M/s Mitsubishi Hitec Paper, Germany sought an extension for submission of response which was also allowed by the Authority. However, no response was received from the said exporter prior to the disclosures. The exporter has made some general comments. They have not furnished information regarding exports sales to India, domestic sales, cost of production and sales price structure as required in the questionnaire. The Authority considers the exporter as non-cooperative to the investigation.

(iii) M/s. Papierfabrik August Koehler AG, Germany have furnished response giving information about domestic sales, export sales, annual accounts. However, they have not furnished the information on Appendices 4,5,6,8,9 and 10 as required by the questionnaire. The information regarding cost of production furnished is for the year ended 2000 whereas the period of investigation is 1 St April 2000 to 31 St March 2001. The exporter has also not given information regarding the sale price structure for export to India, export to other countries and for domestic sales as required in Appendix 4,5,6. The exporter also did not give detailed information regarding allocation of costs in the manufacture .of the said product as asked by the Authority. The Authority had called for all this information and some other information vide letter dated 29`" January 2002 but the exporter has not responded. The exporter was also required to furnish non-confidential version of the information furnished in respect of various appendices. The Authority finds that the exporter did not furnish the non-confidential information of various appendices of the questionnaire. This had been pointed out by the domestic industry in their submissions subsequent to the oral hearing held on 1St March 2002. The exporter has also not responded to the same. The Authority holds that the exporter has not fully cooperated in the investigation.

(iv) The Authority has therefore been constrained to rely upon the best available information as per Rule 6(8) with regard to Normal Value. In the circumstances the Authority has determined the normal value for all exporters in EU on the basis of -constructed cost of production on best available information as furnished by the domestic industry. While doing so the Authority has considered the cost of raw material at international prices, the cost of utilities and other expenses as per information furnished by the domestic industry and verified by the authority. The cost of production has been normated for the optimum level of production.

b) EXPORT PRICE

(i) M/s. Papierfabrik August Koehler AG, Germany have furnished information regarding export sales to India, ocean freight, commission on sales which have been considered. Information in respect of other adjustments has not been furnished which has been allowed as inland transport @2%, port expenses @2%, packing @ 1 % as claimed by the petitioner. Adjustment on account of 60 days' (average) credit @, 5% p.a. on export sales has been made as the export invoices show credit given to the Indian customers for different periods. The petitioners have stated that calculation of export price in terms of sq. mtr. Would result in inappropriate calculation and have requested for determination of export price in terms of weight. The Authority has considered the export price of the subject goods sales in jumbo rolls in terms of weight. The net export price determined for M/s. Papierfabrik August Koehler AG, Germany is DM* * * /kg.

(ii) M/s Jujo Thermal Ltd. , Finland have furnished information in respect of export sales, ocean freight, insurance which has been considered. Information on account of other adjustments is not supported with documentary evidence. Thus adjustments on account of inland transport @2%, port expenses @2%, packing @ 1 % and credit costs for 60 days @ 5% p.a. have been made. The net export price of subject goods in jumbo rolls determined for M/s Jujo Thermal Ltd is US$* * */kg.

(iii) In respect of other non-cooperating exporters from EU the Authority has considered the evidence of least export price and made all adjustments as above to arrive at the net export price.

c) Dumping Margin:-

The Authority followed the consistent policy of adopting the principles governing the determination of Normal Value, Export Price and Margin of Dumping as laid down in Annexure I of the anti-dumping rules. Dumping margin has been determined on the basis of a fair comparison of Export price with the Normal value in pursuance of the.principle laid down in para 6 of Annexure-I to the rules. The comparison is at the same level of trade, i.e. ex-factory level. The Authority has also considered the submissions made by M/s. Jujo Thermal Ltd. and M/s. Rational Business Corporation that anti-dumping duty be levied in terms of square meters only as the product is sold in square meters. The Authority finds that Thermal Sensitive Paper is produced in different GSM. Taking the unit of measurement in weight terms will take into account the different GSMs. Therefore, the Authority has considered it appropriate to determine the normal value and export price in terms of weight only. Based on the normal value and export price as determined above, the Authority assessed the dumping margin in case of exporters from EU as under:

S.No	Exporter	Dumping Margin %)
1.	M/s . Pa ierfabrik August Koehler AG, German	53.07%
2.	M/s Ju' o Thermal Ltd. Finland.	3 6.97%
3.	All other exporters of EU	103.97%

G. INJURY AND THREAT OF INJURY

17. Rule 11 of Anti Dumping Rules reads as follows:

"Determination of Injury:

(1) . In the case of imports from specified countries, the designated authority shall record a further finding that import of such article into India causes or threatens material injury to any established industry or materially retards the establishment of any industry in India;

(2) The designated authority shall determine the injury to domestic industry, threat of injury to domestic industry, material retardation to establishment of domestic industry and a causal link between dumped imports and injury , taking into account all relevant facts, including the volume of dumped imports, their effect on price in the domestic market for like articles and the consequent effect of such imports on domestic producers of such articles and in accordance with the principles set out in Annexure II to these rules."

18. The principles for determination of injury set out in Annexure-II of the Anti- Dumping Rules lay down that:

i. A determination of injury shall involve 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 like article and (b) the consequent impact of these imports on domestic producers of such products.

ii. While examining the volume of dumped imports, the said Authority shall consider whether there has been a significant increase in the dumped imports, either in absolute terms or relative to production or consumption in India. With regard to the effect of the dumped imports on prices as referred to in sub-rule (2) of Rule 18 the Designated Authority shall consider whether there has been a significant price under-cutting by the dumped imports as compared with the price of like product in India, or whether the effect of such imports is otherwise to depress prices to a significant degree or prevent price increase which otherwise would have occurred to a significant degree.

19. Views of the Domestic Industry:

a) Production, capacity utilisation and sales of the domestic industry have increased. However, it is required to be seen in the light of the fact that the domestic industry commenced commercial production only in March, 1997 and therefore the domestic industry has made dedicated efforts in improving its capacity utilization. Increase in production did help the domestic industry in reducing the unit cost of production. However, the domestic industry was not able to recover full cost of production and earn reasonable return. Thus the increase in production and sales volume have riot. 'helped the domestic industry in earning reasonable return on its investment.

b) Domestic industry was forced to increase its selling price in view of increase in the cost of production. However, the domestic industry was prevented from raising the prices to a level which would have provided full recovery of the cost of production and reasonable return on its investments.

c) The landed value of imported material is significantly below the selling price causing severe price undercutting in the Indian market.

d) The landed value of imported material is significantly below the cost of production and fair selling price of the domestic industry causing severe price suppression and depression ,fin the Indian market.

e) The stocks with the domestic industry have been increasing.

f) The return on investments were negative for the domestic industry.

g) The domestic industry has faced severe cash flow problems.

h) The Designated Authority has already acknowledged the injury caused to the domestic industry from the dumped imports from China and EU/Japan. We have provided detailed information to the Designated Authority clearly establishing that the domestic industry continues to suffer material injury from the dumped imports from EU, in spite of imposition of anti-dumping duty in case of imports from EU.

i) We have already given evidence to the authority showing that selling price of the importer is less than landed value of the imported material from EU which undoubtedly establishes that either (a) there was some compensatory arrangements between the exporter and the importer; or (b) the importers have resorted to misreporting of the import volumes.

j) Further, petitioner is the only producer of subject goods in India and imports were only from China and EU. Thus, the only reason for the inability of the domestic industry to increase the prices beyond Rs.109130/MT or Rs.6.98/sq. mtr. in the investigation period implies that the weighted average landed price of imports was below Rs.109130/MT or Rs.6.98/sq. mtr.

k) With regard to the argument that there is no compensatory arrangement between the exporter and Rational Business Corporation we request that M/s Rational Business Corporation be directed to provide full details of its sales of Thermal Sensitive Paper in India.

20. Submissions made by 1VI/s. Papierfabrik August Koehler AG, Germany

i. There is nothing on record to show any compensatory arrangement between the exporter and importer besides a mere unreliable allegation.

ii. There is no meaningful casual link existing between the material injury being suffered by the domestic industry and the alleged dumped imports shown by the domestic industry/petitioner.

iii. The basis of the allegation that there ought to be a compensatory arrangement between the exporter and importer is also the same alleged solitary invoice of an importer.

21. Submissions made by M/s Jujo Thermal Ltd.

The claim of the petitioner that the injury to them has further aggravated is based on only one factor that the domestic industry has not been able to increase their selling price in proportion to the increase in their cost of production. As already mentioned above, this claim of the petitioners is not borne out of the information and data submitted by them in the petition. Besides, none of the other injury parameters mentioned in the petition are supportive of this claim by the petitioner.

22. Submissions made by M/s Rational Business Corporation

(i) The complaint by the petitioners that the exporter has not increased their selling prices proportionately inline with the increase in cost of raw materials worldwide is not correct as the selling price charged by the exporters in the last two years and during the POI have increased considerably. During POI the increase in cost of production was less than 1 % whereas he CIF export price increased by 47%.

(ii) During the POI the domestic selling price increased by 2.49% over the last year as against an increase of less than 1% in their cost of production.

(iii) The petitioner has claimed that the imported product is sold at less than the landed cost of the importer, which has caused severe price suppression and depression in the Indian market.

(iv) A solitary instance indicating the sale of the subject goods in India at a lower price as compared to the price of procurement does not in itself prove that there does exist a compensatory arrangement between the exporter and the importer.

(v) We reiterate that we have had no such allegedly compensatory arrangement with any of the exporter of the subject goods.

(vi) The petitioner has calculated the dumping margin by following two different methods. Under the first method, the export price is based on the secondary sources data leading to the maximum dumping margin as 59.11 % which is lower than the dumping margin as determined by the authority in the original case, hence there is no increase in dumping margin.

(vii) Under the second method, the export price is calculated based on a solitary invoice of an importer alleging that the selling price is less than the landed cost of the subject goods. As already mentioned above, this method of arriving at the export price without establishing any association or compensatory arrangement between the exporter and importer is incorrect and against the provision of the Anti Dumping Rules. However based on the data submitted by us herewith it can clearly be discerned that the selling price charged for the subject goods during the period of investigation is not less than the landed cost. Hence this method of arriving at the export price even otherwise is not applicable in our case.

(viii) The claim of the petitioner that the injury to them has further aggravated is based on only one factor that the domestic industry has not been able to increase their selling price in proportion to the increase in their cost of production. As already mentioned above, this claim of the petitioners is not borne out by the information and data submitted by them in the petition. Besides, none of the other injury, parameters mentioned in the petition are supportive of this claim by the petitioner.

(ix) As such there is no dumping of subject goods, there is no injury to the domestic industry and there is no causal link between the two.

23. Examination by the Authority

For the examination of the impact of imports on the domestic industry in India, the Authority has considered such further indices having a bearing on the state of the industry as volume of dumped imports, their effect on prices in the domestic market, their share in the demand, the magnitude and margin of dumping, production, capacity utilisation, quantum of sales, closing stock, net sales realisation, cash flow, profitability, employment, wages etc. in accordance with Annexure II of the Rules supra.

i) Volume of imports

The Authority has considered the information regarding the imports of Thermal Sensitive Paper during the POI as received from various sources viz. the DGCI&S, Kolkatta, Customs Authorities, secondary sources besides the information received from the exporters and the sole importer. The Authority finds that no single source gives the complete and correct information about imports of TSP during the POI. After taking into account the information from various sources the Authority finds that imports from EU during POI were 366.57 Tonnes. The Authority finds that these imports are 86.53% of the total imports during POI. The imports of Thermal Sensitive Paper were as under:

(Imports in MT)

Country	1998-99	1999-2000	2000-2001 (POI)
European Union	4.28	260.54	366.57
China	0.00	0.00	32.63
Others	74.91	15 8.71	24.43
Total	79.19	419.25	423.63

Therefore, the Authority considers the volume of dumped imports from subject country/territory to be significant as there has been an increase in the dumped imports in absolute terms. The imports from subject country/territory increased by 40.69% during POI when compared with the imports during the previous year.

ii) Share in demand

Share in %	1998-99	1999-2000	2000-2001 POI
Domestic industry	91.07	71.70	76.89
EU	0.48	17.58	19.98
Others	1.48	10.72	3.13

iii) Production and Capacity utilization

The production and capacity utilization of the domestic industry has been as under:

1998-99	1999-00	2000-01*
Capacity	100	100	100
Production	100	140.17	196.24
Capacity utilization	100	140.17	196.24
Sales	100	131.54	174.6

* Note: Indexed figures considering 1998-99 as 100

iv) Closing stock

The closin stock of the domestic indust was found to be as under:

Year	Closin stock in MT
1998-99	100
1999-00	808.31
2000-01 (POI)	1466.97

* Note: Indexed figures considering 1998-99 as 100

v) Selling price

Selling price of the domestic industry has been as under:-

Year	Selling rice Rs./s . mtr.
1998-99	100
1999-00	144.28
2000-01 (POI)	147.88

* Note: Indexed figures considering 1998-99 as 100

vi) Price Under cutting

The Authority finds that the average net sales realization of the domestic industry during the POI when compared with the average landed value of imports of the subject goods from subject countries/territory do not show significant price undercutting. However, the Authority finds that a significant volume of the imports caused price undercutting as the landed value of these imports was significantly lower than the average sales realization of the domestic industry.

vii) Price Suppression:

The Authority finds that the domestic industry has been able to raise its selling price to Rs. * * * per kg. during the POI. However, it is seen that the domestic industry has not been able to raise the selling price to a level to recover its full cost of production and to achieve a reasonable return. The average landed value of imports of subject goods from subject countries/territory has been Rs. * * * per kg. which is significantly lower than the cost of production. The Authority finds the suppression of price to the extent of %.

viii) Profitability

The profitability position of the company has been as under:

Year	Cost of roduction	Selling price	Profit/loss
1998-99	100	100.	(-) 100
1999-00	117.25	144.28	(-) 64.32
2000-01 (POI)	118.23	147.88	(-) 60.17

* Note: Indexed figures considering 1998-99 as 100 (Rs./sq/mtr)

ix) Employment

The Authority finds that there has not been any significant change in the employment level of the domestic industry.

x) Wages

The Authority, finds that the wages of the employees have increased marginally.

xi) Cash flow

The Authority finds that the cash flow position of the domestic industry has been as under:

Year	Cash flow
1998-99	(-) 100
1999-00	(-) 131.7
2000-01 (POI)	(-) 83.84

* Note: Indexed figures considering 1998-99 as 100

24. The Authority has taken into account all indices regarding injury while doing the final determination. This involved all relevant facts viz., volume of dumped imports, their effect on price in the domestic market and its subsequent effect on domestic producers, production, capacity utilisation, profitability, net sales realisation etc. While determining the non-injurious price for the like article for the domestic industry, the Authority has considered the optimum cost of production for the domestic industry taking into account the normated best .consumption norms and the actual price of the raw materials during the POI which go into the production of the product under consideration. Also, while arriving at the injury margin, the Designated Authority has taken into account optimum capacity utilisation for arriving at a fair selling or non-injurious price.

25. After taking into account all the above indices the Authority has made following conclusions regarding injury while doing the final determination:

(i) There has been significant increase in the dumped imports in absolute as well in relation to the total demand.

(ii) The domestic industry has suffered price under-cutting from a significant volume of dumped imports from the subject country/territory.

(iii) The domestic industry has suffered Price Suppression as a result of dumped imports. The average landed value of imports of subject goods from subject country/territory were significantly lower than' the cost of production. This has prevented the domestic industry to raise its selling price to a remunerative level.

(iv) The petitioner held finished goods inventory of Thermal Sensitive Paper which was 81.53% higher than the inventory at the end of financial year 1999-2000. -The Authority finds that the domestic industry has also suffered material injury on account of higher inventory of Thermal Sensitive Paper at the end of POI.

(v) The capacity utilization of the domestic industry has increased from 53.74% in 1999-2000 to 75.23% during- POI and the production has also increased. However, the domestic industry has been prevented from utilization of higher capacity due to dumped imports.

(vi) The share in demand of the imports from subject country/territory was 19.98%, that of the domestic industry 76.89% and of imports from other countries 3.13% during the POI. The share of the domestic industry was71.70% and that of the subject country/territory 17.58% during the previous year 1999-2000. The Authority observes that there was significant increase in the market shgre by the imports from subject country/territory.

(vii) The domestic industry has continued to .suffer losses in the production and sale of subject goods since the sales realization have been lower than the cost of production.

(viii) The domestic industry continues to have negative cash flow.

(ix) The demand of the product has not decreased and has, therefore, not contributed to injury to the industry.

26. Threat of Injury

The Authority has examined the threat of injury to the domestic industry as per para (vii) of Annexure II of Rules supra, and concludes that the imports from subject country grew in absolute terms and also as a share of demand from 17.58% during the previous year to command a.19.98% share in the total imports. The Authority finds the dumped price of these imports from the subject country to hold a significant threat in depressing the price of the like product in India. There is every likelihood that imports may keep coming at dumped price in larger quantities causing serious threat of injury to the domestic industry. On the basis of the evidence available before it, the Authority therefore concludes that there is a serious threat of material injury being caused to the domestic industry on account of dumped imports of subject goods from subject country/territory.

H. CAUSAL LINK:

27. The Authority holds. that the substantial increase in import of subject goods from EU at dumped price has led to price undercutting and severe price suppression of the subject goods produced by the domestic industry. This has resulted in the building up of inventory of finished goods with the domestic industry. The domestic industry has suffered losses due to its net sales realization being lower than the cost of production. This clearly establishes the causal link between the injury suffered by the domestic industry with the dumping of subject goods from EU. The Authority finds that there is a causal link between the dumping of subject goods from EU and the injury being caused to the domestic industry during the period of investigation.

I. INDIAN INDUSTRY'S INTEREST AND OTHER ISSUES

28. The Authority reiterates that the purpose of anti dumping duties in general is to eliminate dumping which is causing injury to the domestic industry and to,re-establish a situation of open and fair competition in the Indian market which is in the general interest of the country.

29. The Authority recognises that the imposition of anti dumping duties might affect the . price levels of the product in India. However, fair competition on the Indian market will not be reduced by the anti dumping measures. On the contrary, imposition of anti dumping measures would remove the unfair advantages gained by dumping practices, would prevent the decline of the domestic industry and help maintain availability of wider choice to the consumers of subject goods. The Authority notes that the imposition of anti dumping measures would not restrict imports from subject country in any way, and therefore, would not affect the availability of the product to the consumers. The consumers could still maintain two or even more sources of supply.

J. FINAL FINDINGS

30. After considering the forgoing. the Authority concludes that -

(i) thermal Sensitive Paper has been exported from European Union to India below its normal value;

(ii) the Indian industry continues to suffer material injury on account of price undercutting, price suppression, significant increase in the volume of dumped imports, increased inventory, financial losses as a result of dumped imports from subject . country/territory and is being threatened with further injury; and

(iii) the injury has been caused to the domestic industry by the dumped imports from the subject country/territory.

31. The Authority considers it appropriate to recommend the continuation of anti-dumping duty in force on imports of Thermal Sensitive Paper originating in or exported from EU. The amount of anti-dumping duty shall be equal tó the margin of injury, being lesser than the dumping margin, which if levied, would remove the injury to the domestic industry. For the purpose of determining injury margin, the landed price of imports has been compared with the non injurious selling price of the-petitioner company determined for the period of investigation.

32. The anti dumping duty shall be on all imports of Thermal Sensitive Paper falling under Customs heading 4809.10 or under heading 48.11 or 48.16 of first Schedule to the Customs Tariff Act originating in or exported from the European Union. The anti dumping duty shall be the difference between the amounts mentioned in column 3 below and the landed value of imports in US$/MT.

Sl. No:	Country	Amount (US$/MT)
1.	2	3
1	M/s . Papierfabrik August Koehler AG, German	2947.92
2	M/ s Ju'o Thermal Ltd. Finland.	2947.92
3	All other ex rters of EU	2947.92

33. Landed value of imports for the purpose shall be the assessable value as determined by the Customs under the Customs Act, 1962 and all duties of customs except duties levied under, sections 3, 3A, 8B, 9 and 9A of the Customs Tariff Act, 1975.

34. An appeal against this order shall lie before the Customs, Excise and Gold (Control) Appellate Tribunal in accordance with the Act, supra.

Sd/-
L. V Saptharishi,
Designated Authority

Issued by:

Government of India
Ministry of Commerce & Industry
(Department of Commerce), New Delhi

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