NOTIFICATION NO. 48/1/2001-DGAD DATE 08/10/2002
Pentaerythritol-Final Findings of Anti-Dumping of duty InvestigationAnti-Dumping Investigation concerning imports of Pentaerythritol from the Canada, Japan and Taiwan-Final Findings. 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
1. The procedure described below has been followed:-
i.) The Designated Authority (hereinafter referred to as Authority), under the above Rules, received a written petition from M/s Kanoria Chemicals & Industries Ltd., Ankaleshwar, Gujarat on behalf of the domestic industry, alleging dumping of Pentaerythritol (hereinafter referred to as subject goods) originating in and exported from Canada, Japan and Taiwan (hereinafter referred to as subject countries);
ii.) The Authority issued a Public Notice dated 21St November, 2001 published in the Gazette of India, Extraordinary, initiating anti dumping proceedings concerning imports of Pentaerythritol originating in or exported from the subject countries falling under Customs Sub-heading 2905.42 under Chapter 29 of the Customs Tariff Act, 1975.
iii) The Authority notified preliminary findings vide its Notification dated the 15th February, 2002 with regard to Anti-Dumping Investigations concerning imports of Pentaerythritol (Penta) originating in or exported from Canada, Japan & Taiwan and requested the interested parties to make their views known in writing within forty days from the date of its publication;
iv) The Authority forwarded a copy of the Preliminary Findings to known interested parties, who were requested to furnish their views, if any, on the Preliminary Findings within forty days of the date of the letter
v) The Authority also forwarded a copy of the Preliminary Findings to the Embassies/ High Commission of Japan and Canada in New Delhi, Taipei Economic and Cultural Center, New Delhi with a request to furnish their views on the Preliminary Findings;
vi) The Authority held a public hearing on 25.6. 2002 to hear the interested parties orally, which was attended by representatives of the Domestic Industry and other interested parties. The parties attending the public hearing were requested to file written submissions of views expressed orally. Designated Authority in this finding has considered the written submissions thus received from interested parties;
vii) The Authority made the public file available to all interested parties containing non-confidential version of the evidence submitted by various interested parties, for inspection, upon request.
viii) Arguments raised by interested parties before announcing of Preliminary Findings, which have been brought out in the Preliminary Findings notified earlier have not been repeated herein for sake of brevity. 'However, arguments raised by the interested parties have been appropriately dealt with in the Preliminary Findings and/or these findings;
ix) *** in this notification represents information furnished by the interested parties on confidential basis and so considered by the Authority under the Rules;
x) The investigation covered the period from 1st April, 2000 to 31st March, 2001 (12 months).
xi) The Authority conducted on-the-spot verification of the domestic industry to the extent considered necessary. Additional details regarding injury were sought from the petitioner, were also furnished.
xii) The cost of production of the domestic industry was also analysed to work out optimum cost of production and cost to make and sell the subject goods in India on the basis of Generally Accepted Accounting Principles(GAAP) based on the information furnished by petitioner so as to ascertain if anti dumping duty lower than dumping margin would be sufficient to remove injury to domestic industry.
xiii) The Authority in accordance with the Rules supra shall consider those exporters who are willing to give price undertaking, on request.
xiv) The Authority provided an opportunity to all interested parties to present their views orally. All parties presenting views orally were requested to file written submissions, of the views expressed orally. The parties were advised to collect copies of the views expressed by the opposing parties and offer rebuttals, if any.
xv) In accordance with Rule 16 of the Rules supra, the essential facts/basis considered for these findings was disclosed to known interested parties and comments received on the same would also be duly considered in Final Findings.
B. PETITIONER'S VIEWS
2. The petitioners have made the following major points in their submissions:
i. They are four producers of the subject goods in India of which M/s Allied Resins Ltd., has suspended production. M/s Asian Paints produce the subject goods for captive consumption. The other producer is M/s Perstrop Aegies Chemicals Ltd. However, M/s Kanoria Chemicals & Industry Ltd., account for more than 25% of the production by the domestic industry as defined in the Anti Dumping Rules. Therefore, they have the standing to file the application on behalf of the domestic industry. Further, the petitioners are not related to any importer/exporter of the subject product.
ii. There is no known difference in Pentaerythritol produced by the Indian industry and that exported from subject countries. The subject goods produced by the Indian industry and imported from subject countries are comparable in terms of physical as well as chemical characteristics, product specifications, pricing, distribution & marketing arid tariff classification of the goods. The two are technically and commercially substitutable. The consumers are using the two interchangeably. Subject goods produced by the petitioners and imported from subject countries should be treated as like article in accordance with the antidumping Rules.
iii. The present petition filed by the domestic industry should be seen in the light of the severe injury suffered by the domestic industry due to indiscriminate dumping by the exporters. The performance of the domestic industry should also be seen in the light of severe dumping resorted by the exporters from the subject countries.
iv. It is evident that the quantum of import's from each of the subject country is more: than the de-minims limit. Cumulative assessment of the effects of imports is appropriate since the export prices from the subject countries directly compete with the prices offered by the domestic industry in the Indian market. The Authority is, therefore, requested to assess injury to the domestic industry cumulatively from the subject countries.
v. Material injury is being caused to domestic industry from imports. The domestic industry is producing for the past many years. The technology adopted by the domestic industry is comparable to the technology adopted by other players. It is submitted that the lowering of prices by the exporters from these countries is the sole reason for the present state of market in India.
C. VIEWS OF EXPORTERS, IMPORTERS AND OTHER INTERESTED PARTIES
3.1 M/s Mitsui Chemicals Inc., Japan
They have submitted that the company has made total sales of one hundred and ninety eight(108) metric tons of the subject goods to India from Japan during April 1, 2000 to March 31, 2001. They have made no sales of the subject goods during the specified period and after 1st April, 2001 to the present. Therefore, in response to the questionnaire they have nothing to comment on this matter at this time.
Views of Users:
3.2 M/s Indian Resin Manufacturers Association(IRMA)
They have stated that
(1) Pentaerythritol is an important raw material for resins. Average consumption of Penta in resins is of the order of 12-15% thereby contributing substantially to resin cost.
(2) The prices of paints in India are going down and resin manufacturers are unable to pass on the increased cost of resin to paint manufacturers;
(3) The petitioner had raised the price of Pentaerythritol once the provisional dumping duty was imposed which was neither desirable nor justified.
(4.) The Petitioner's claim that inspire of increase ion production, sales and sales price, they had incurred losses which could not be attributed to the so-called dumping of material from abroad.
(5) There is no justification in protecting just two or three Pentaerythritol manufacturing companies at the cost of full spectrum of resin and paint manufacturers;
(6) If resin prices go up due to increase in Pentaerythritol prices, there is every likelihood that the imported resin will flood the Indian market and around 300 resin manufacturing units will close down;
(7) The Petitioner should look at their operation and improve productivity to reduce costs rather than take the shelter of anti-dumping duty and increase Penta prices;
(8) The Petitioner should take into account the cyclical nature of international pricing of raw material i.e. methanol and should not consider only the few peak price for the purpose of costing the product;
(9) If domestic resin industry suffers, the domestic Pentaerythritol manufacturers would also suffer in long run;
3.3 M/s Indian Paints Association, ( M/s Berger Paints India Limited,)
The Association has submitted that:
i) The Petitioner company does not fulfill the requisite criteria to represent the 'domestic industry' under Rule 5;
ii) There is no injury to the domestic industry which is the necessary prerequisite for initiating an anti dumping investigation under the provisions of Rule 5(3)(b);
iii) The figures provided by the Petitioner company in the Application are false and incorrect with regard to the CIF value in USD of Pentaerythritol imported from Taiwan;
iv) The Petition made by the company was with regard to alleged dumping from Taiwan, Japan, European Union and United State of America. The preliminary findings however, have included Canada where there is not even a country subject to investigation;
v) The provisional anti dumping duty imposed is very high;
3.4 Comments of domestic industry with regards to issue raised by User industry
(a) As regards the User Industry's concern that with the imposition of anti dumping duties it has impacted the price levels of the products i.e. resins and in turn paints, the domestic industry has submitted that the cost of resin and paint, during the period of investigation has remained constant. The levy of anti dumping duty may result in increase in the cost of the product only to the extent of 0.8% which is marginal and should therefore not affect the resin or the paint market. Thus the concerns of the User Industry is unfounded and against the interests of the Domestic Industry.
(b) It was also alleged by the user industry that the sales volume was lower during the last quarter of the period of investigation, as the demand for the product is cyclic in nature. It is submitted that the investigation period covers the period of 12 months and therefore, has taken into consideration the entire cycle of the year. It is also important to note that this is not the volume, which has caused injury to the Petitioner, but the price under cutting and price under selling, which has caused injury to the Domestic Industry.
(c) They have submitted that the examination and levy of anti dumping duty is product specific, therefore profit made from other products manufactured by a Company in the context of the present proceedings is irrelevant. It is to be appreciated that the Petitioners are a Multi Product and Multi Location Company and that the profit for the Company has on a cumulative basis increased, but such is not applicable for the goods in question. In the preliminary findings, the Designated Authority after examining of the records, has accurately come to a finding that the Domestic Industry has suffered material injury.
(d) There were issues raised by the users, as to what price the subject goods are being sold in the export market. It is the contention of the Petitioners that the anti dumping investigation is an action initiated only when the subject goods imported into the domestic market / home market causes or threatens to cause material injury to a Domestic Industry in the importing country or materially retards the establishment of a Domestic Industry, The focus therefore is only as to imports made in the domestic market and it is therefore irrelevant to raise issues as to the price at which the same are sold in the export market.
3.5 Views of Domestic Industry on Other Issues:
i) The cost of resin and paint during the Period of Investigation has remained constant, and going as per the actual calculations, the anti dumping duty resulted in increasing the cost of the product only to the extent of 0.8% which is marginal and shall therefore not affect the resins or the paint market. Also, the purpose of imposing anti dumping duties 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 industry in question.
ii) In the present case the Designated Authority has recommended the preliminary levy of anti dumping duty on the basis of lesser of the dumping margin and injury margin and therefore it is fair and equitable.
iii) While the discretion vests with the Hon'bie Designated Authority, to impose duty, at the (ì) margin of dumping or (ü) margin of injury or (iii) at the lower of the two. Keeping in view the facts of tie present case, that the duty must be imposed at the level of margin of dumping.
iv) In the present proceeding, none of the exporters have chosen to participate. Further, the exporters have entirety omitted to furnish any information relevant to the present proceeding. The exporters are clearly, defaulters who have dumped their goods into India at approximately 25 to 33% of the normal value (cost of production). In a situation, where, the exporter is both a defaulter and is further recalcitrant and shies away from the proceeding, it is clear that the business objective is to cause as much harm to the Domestic Industry. In view of these facts the discretion of using the lesser duty rules ought not to be used and the duty in the preliminary findings should be enhanced to meet the margin of dumping.
v) It has been stated that subsequent to the imposition of the provisional levy, the cost of raw materials has increased to the extent of Rs. 9 per kilo whereas the corresponding increase in the sale price has been to the extent of Rs. 4.5 per kg. This indicates that even post the levy the position is such that the Petitioners have not sought to advantage themselves from the fact of the levy of Anti Dumping duty.
3.6 Authority's Position
i) As regards to issue raised by interested party on prices at which exports of Pentaerythritol are made by the petitioners, Authority notes that it is settled law that prices at which exports are made by the petitioners are not germane to a determination of the issue in the anti dumping investigation. The indices and criterion for examination and decision are prescribed in the Act and the Rules.
ii) As regards to Indian Paints Association argument that there is a serious lacuna in the preliminary findings with regard to determination of normal value and the export price in the preliminary findings. Authority notes that it is the exporter alone who has the locus stand to make submission on normal value. The exporters have chosen not to cooperate and respond to this investigation. The submissions of the Association/Berger Paints are entirely without the Authority of law as they have no locus standi in this behalf.
iii) As regards to disclosure of confidential information, Anti dumping Rules provides that, 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 authorisation of the party providing such information. The petitioners information with respect to costing of the subject goods which is commercially sensitive was claimed confidential and which the Authority has considered as such. The submission of Indian Paints Association / Berger Paints are directly contrary to the provision of Rule 7.
iv) Vide their petition dated 6.9.01, petitioners alleged dumping of Pentaerythritol from certain countries and this was not in the form and manner prescribed by the Authority. The fully documented petition was made on 12.11.01 for initiation of anti dumping investigation against dumping of Pentaerythritol from Canada, Japan and Taiwan. The Authority initiated the investigation vide Notification dated 22.11.2001.
D. EXAMINATION AND FINDINGS BY AUTHORITY
4. The submission made by the importers, exporters, users, domestic industry and other interested parties have been examined and considered while arriving at these findings and wherever appropriate have been dealt hereinafter.
E. PRODUCT UNDER CONSIDERATION
5. The product under consideration in the present petition is Pentaerythritol also known as PENTA (also referred to as subject goods hereinafter) originating in or exported from Canada, Japan and Taiwan. Pentaerythritol finds application in manufacture of Alkyd Resin, Rosin Esters, Plasticizers, Printing Inks, Synthetic Rubber, Stabilizers for Plastics, Modified drying oils, Detonators, Explosives, Pharmaceuticals, Core oils and Synthetic Lubricants. Pentaerythritol is classified under Customs sub heading No 2905 .42 under chapter 29 of the Customs Tariff Act, 1975. The classification is, however, indicative only and is in no way binding on the scope of the present investigation.
F. LIKE ARTICLE
6. Rule 2(d) of the Anti Dumping Rules specifies that "Like Articles" means an Article which is identical or alike in all respects to the product under investigation or in the absence of such an Article, another article, having characteristics closely resembling those of the articles under examination. The Authority holds that Pentaerythritol being produced by the domestic industry and that being imported from the subject countries can be used interchangeably and thus the two are commercially and technically substitutable and therefore, are like articles within the meaning of the Rules.
G. DOMESTIC INDUSTRY
7. Ws Kanoria Chemicals & Industries Ltd., Ankaleshwar, Gujarat has filed the petition. The petitioner accounts for more than 25% of the Domestic production during the Period of Investigation of the subject goods in India. Accordingly, the Authority holds that the petitioner fulfils the requisite criteria to represent the domestic industry, as required under Rule 5(a) and (b) and Rule 2(b).
Authority has received a letter of support from M/s Perstorp Aegis Chemicals Private limited, Delhi and stated that they have also deeply suffered on account of dumping of the material by subject countries both in terms of production and financial aspects. They have stated that they are supporting the anti dumping application as filed by M/s Kanoria Chemicals and Industries Ltd. for the imposition of anti dumping duty on Pentaerythritol being imported from subject countries.
The production Statistics of Petitioners and other producers are as under:
| | Production (MT) | % Share |
|---|
| Petitioners | 5657 | 40.0 |
| Supporting Company | 5772 | 40.0 |
| Other producers | 2873 | 20.0 |
| Total Indian Production | 14302 | 100.0 |
Accordingly, the Authority holds that the petitioner fulfils the requisite criteria to represent the domestic industry, as required under Rule 5(a) and (b) and Rule 2(b).
H. NORMAL VALUE, EXPORT PRICES & DUMPING MARGINS
8.0 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 sub-section (6);
8.1 Views of Domestic Industry
On Dumping
None of the exporters from three countries in question have responded, as per the law settled by the Tribunal in the case of Aiigma & Ors vs. Designated Authority reported at 2000 (37) RLT 593 (T), where a exporter does not respond, no other entity has the locus to make any submissions on normal value, export price and the margin of dumping.
The dumping margin for each of three countries in question is set out in the Preliminary Findings indicates a significant margin of dumping and irrefutable case of price undercutting.
8.2 The Authority sent questionnaires to all the known exporters for the purpose of determination of normal value in accordance with Section 9A(1)(c). However, none of the exporters from arty of the subject countries have furnished information to the Authority in the prescribed questionnaire format. The Authority, therefore, holds that none of the exporters from Canada, Japan and Taiwan have coop,-., rated with the Authority as envisaged under the Rules and Rule 6(8) supra, is attracted in their case,
Normal Value & Export Price:
8.3 The principles governing the determination of normal value, export price and the dumping margin as laid down in the Custom Tariff Act and the Anti Dumping Rules are elaborated in Annexure I to the Rules. As submitted by the petitioners at the time of initiation and also mentioned in the initiation notification, the normal value has been determined on the basis of the constructed cost of production separately for each country. Also regarding the export prices, since none of the interested parties other than the petitioners has provided information, the Authority has adopted the export prices based on information provided by Directorate General of Commercial Intelligence and Statistics( DGCI&S), Kolkata. For adjustments on account of Ocean freight, insurance, inland freight, port charges and commission on the exports sales, the information provided by the domestic industry has been used for arriving at net export price separately for each country.
8.4 The dumping margins determined by the Authority are as under:
| Country/Territory | Exporters/
Manufacturers | Dumping Margin
(%) |
|---|
| Canada | All exporters | 73.94 |
| Japan | All exporters | 65.82 |
| Taiwan | All exporters | 74.88 |
1. INJURY
9.0 For the examination of the impact on the domestic industry in India, indices having a bearing an the state of industry as production, sales, stock, profitability, net sales realization, the magnitude and margin of dumping, etc., have been considered in accordance with Annexure 11(iv) if the rules supra.
CUMULATIVE ASSESSMENT OF INJURY
9.1 Annexure II (iii) under Rule 11 supra further provides that " in case where imports of a product from mare than one country are being simultaneously subjected to Anti Dumping investigation, the Designated Authority wilt cumulatively assess the effect of such imports, only when it determines that the margin of dumping established in relation to the imports from each country is more than two percent expressed as percentage of export, rice and the volume of the imports from each country is three percent of the imports of the like article or where the export of the individual country is less than three percent, the imparts cumulatively accounts for more than seven percent of the imparts of like article and cumulative assessment of the imports is appropriate in light of the conditions of competition between the imparted article and the like domestic article".
9.2 The Authority notes that the margin of dumping and quantum of imports from subject countries are more than the limit prescribed above. Cumulative assessment of the effect of the imports from Canada, Japan and Taiwan are appropriate since the export prices from these countries were directly competing with the prices offered by the Domestic Industry in the Indian market and displacing domestic producers here.
9.3 The various factors relating to injury to domestic industry have been discussed in the preliminary findings and the same is proposed to be considered for final determination.
9.4 Views of Domestic lndustry
On Injury
(a) The quantum of exports and the share of imports have both significantly increased.
(b) Profitability has suffered and the Domestic Industry has suffered serious injury causing direct losses per unit of sale.
(c) The landed value of the imports has been examined and has been found that there is price undercutting taking place, the price undercutting is also manifest from the extremely high margin of dumping. On an examination of facts, price underselling has been found on a comparison of the fair selling price of the Domestic Industry with the landed value of the imports.
(d) It is settled law that injury could be found even on any one of the above factors in terms of Rule 11 and Annexure II of the Anti Dumping Rules. In the present case, however there are several enhanced factors as listed above, which would lead to the unequivocal conclusion of material injury. The factors of the claimed increase in production and domestic sale and selling price has to be viewed in the context of the facts that
(i) the increase in safe price is on account of the increase in the cost of raw materials, in fact increase in the cost of raw materials has been higher than the increase in the sale price, leading to further losses per unit of sale.
(ii) the increase in sale and production are on account of the compulsion to keep the production activities active and clearly all sales have been at prices far below the fair selling price in view of the dumped prices of the imports.
9.5 Views of M/s Indian Paints Association on Injury:
i) The Petitioner Company is feigning injury caused by imports which itself has exported 18000 Kgs of Pentaerythritol to Madagascar in November, 2001 at USD 873 Per Mt.
ii) That while Asian Paints (I) Ltd largely produces Pentaerythritol for captive consumption, there is cartel being operated by the Petitioner company and M/s that imports are the only genuine competition to this cartel in the Indian market;
iii) That while in the preliminary findings it is claimed that the petitioners domestic sales of Pentaerythritol was 5248 Mt however, as per the annual report for 2000-2001 states to have sales of 5601 Mt;
iv) That eventhough the total imports of Pentaerythritol into India from the countries of Taiwan, Japan and Canada amounts to about 60% of total imports into India, there was a need to consider the price at which Pentaerythritol is being imported from countries such as China, USA and Spain;
v) There is no evidence of significant decline in production, market share or sales volume of the Petitioner company during the period of investigation;
vi) During the period of investigation, M/s Asian Paints has reported Rs.9.15 crore profit on sale of Rs.47.67 crores, which can hardly be taken to be injurious. Therefore, there has been no injury to the domestic industry;
vii) It is impossible to hold that a minuscule 9.65% of imports could effect the price of Pentaerythritol in the domestic market and cause injury;
viii) The allegation of price undercutting and suppression and inability to increase the sale price by the Petitioner company are without basis or evidence;
ix) The effective rate of duty on Pentaerythritol imports into India was already at a high level of 43% and if even then the Petitioner company could compete with imported product;
9.6 Injury Assessment by the Authority
All economic parameters affecting the Domestic Industry such as Quantum of imports, production, capacity utilisation, sales volume etc., have been examined as under:-
a. Quantum and share of imports from subject countries:
The information with regard to quantum of imports of Pentaerythritol has been based on information published by DGMS, Calcutta. The Authority notes that the share of imports of the subject goods from the subject countries cumulatively as a percentage of total imports of the subject goods was 44.77% during 1999-2000. The same has increased to 60.10% during the Period of Investigation.
| Country | Share in Total Imports |
|---|
| Year | 1998-99 | 1999-00 | 2000-01 |
|---|
| Canada | 9.66 | 16.46 | 16.40 |
| Japan | 37.16 | 19.08 | 08.80 |
| Taiwan | 00.77 | 09.23 | 35.00 |
| Total | 47.59 | 44.77 | 60.10 |
| Others | 52.41 | 55.23 | 39.90 |
| Total | 100.0 | 100.0 | 100.0 |
b. Production and Domestic Sales:
The total production of petitioner company of subject goods during 1999-00 was 5503 MT which increased to 5657MT during the Period of Investigation. Also the domestic sales of the petitioner company during 1999-00 was 5228 MT which increased to 5248 MT during the Period of Investigation. However, quarter-wise comparison of the production and domestic sales during the period of investigation shows a clear trend of significant decline in the production and sales during the period of investigation. Quarter-wise production and domestic sales of petitioner company during the period of investigation are as follows
| Period | Production(MT) | Domestic Sales(MT) |
|---|
| April-June, 2000 | 1444 | 1540 |
| June-Sept. 2000 | 1564 | 1734 |
| Oct-Dec. 2000 | 1548 | 1143 |
| Jan-March, 2001 | 1101 | 831 |
| Total | 5657 | 5248 |
It has been observed that despite the overall marginal increase in the production and domestic sales of the petitioner company during the period of investigation, they have incurred losses due to poor price realization vis-a-vis its cost of production. It is, therefore, clear that the domestic industry could retain its customers and market share at the cost of suffering on the financial parameters. Thus, the apparent increase in production as well as domestic sales has to be seen in the context of the price effect of the dumped imports.
c. Productivity: The petitioner attempted to increase its production by debottlenecking the capacity. This resulted in increase its productivity. However, increased productivity did not help the domestic industry in earning reasonable return.
d. Selling Price: As regards the sales price, there is some improvement over the last year but it has been claimed by the domestic industry that there has been increase in the cost of the major raw materials. This is also reflected in the fact that the losses are being incurred despite increase in the sales prices. At the same time, it is the claim of the domestic industry that it has not been feasible for the domestic industry to increase their prices commensurate with the increase in the raw material prices precisely because of dumping. Thus, there is enough evidence of price suppression on account of dumping by the subject countries.
e. Profitability
An examination of the records of the domestic industry indicates that the domestic industry has suffered material injury in the form of direct losses per unit of sale. A month-wise comparison of the selling price and the cost of production per unit during the period of investigation clearly shows an increase in the loss per unit being suffered by the petitioner company. Thus, it is apparent that it is the price factor alone which can be considered to have led to injury to the domestic industry resulting in losses despite improvement in domestic sales as well as production.
f. Price Undercutting
The Authority notes that dumping by the subject countries has had a significant impact on the net sales realization by the domestic industry for the subject goods. To hold on to its market share, the petitioner had to compete with low priced and dumped imports of subject goods from the subject countries. The landed values of the dumped imports also indicate that there is price under-cutting taking place.
g. Price Underselling
The Authority has also examined the claim of the domestic industry that the domestic industry is suffering on account of direct losses. The Authority notes that price underselling is an important indicator to make an assessment of injury. The Authority has worked out a fair selling price and compared the same to the landed value to arrive at the extent of price underselling.
h. Return on investment & Ability to raise capital
The rate of return on the investment during the period of investigation for the product under consideration has been negative for the domestic industry as a result of which the domestic industry has not been able to raise fresh capital or plan new investment in this product
i. Employment
The employment levels of domestic industry have not undergone any significant change during the period of investigation.
j. Inventories
The petitioner company had the largest stock ever towards the end of the period of investigation and had to suspend production far two weeks to liquidate the stacks.
Conclusion
9.7 On examination of the evidence, it has been found that there is marginal increase in production and domestic sales of the domestic industry. However, the quarter-wise comparison within the period of investigation shows a clear decline in the production and domestic sales of the petitioner company. The petitioner company is suffering losses an account of law priced dumped imports from the subject countries. The most significant parameter evidencing injury is the price undercutting and price underselling as per the evidence available with the Authority. Can the basis of tire evidence available before the Authority, it is determined that the domestic industry has suffered material injury.
J. CAUSAL LINK
10.0 In determining whether material injury to the domestic industry was caused by the dumped imports, the Authority took into account the following facts:-
a. The Authority observes that there is a single market for the subject goods where dumped imports compete directly with the goods produced by the domestic industry. Decline in demand is not a factor causing injury to the domestic industry. The imported subject article and the domestically produced goods are like articles and are used for the same applications/end uses. Thus, pricing becomes the most important factor determining purchase of the article from either imported sources or domestic sources.
b. The imports from subject countries suppressed the price of the product in the Indian market to such an extent that the domestic; domestic &as prevented from recovering its full cost of production and' earn a reasonable profit from the sale of subject goods in India.
c. Dumped imports of subject goods from subject countries at dumped prices especially in latter part of POI has resulted in substantial losses to the domestic industry.
H. INDIAN INDUSTRY'S INTEREST & OTHER ISSUES:
11.1 The purpose of anti dumping duties 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.
11.2 The Authority recognizes that the imposition of anti dumping duties might affect the price levels of the products manufactured using subject goods and consequently might have some influence on relative competitiveness of these products. 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 countries 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.
L CONCLUSIONS
12.0 It Would be seen, after considering the foregoing, that:
(a) Pentaerythritol originating in or exported from Canada, Japan and Taiwan have been exported to India below Normal Value, resulting in dumping;
(b) the Indian industry has suffered material injury from exports of subject goods from Canada, Japan and Taiwan;
(c) The injury has been caused cumulatively by the dumped imports from Canada, Japan and Taiwan. It is considered necessary to impose definitive anti dumping duty, on all imports of Pentaerythritol originating in or exported from Canada, Japan and Taiwan.
13.0 It was considered whether a duty lower than the dumping margin would be sufficient to remove the injury. The average landed value of the imports, for the purpose, was compared with the non-injurious price for the petitioner company, determined for the period of investigations. Wherever the difference was less than the dumping margin, a duty lower than the dumping margin is recommended.
14.0 Accordingly, the Authority recommends definitive Anti-dumping duty as indicated in column 3 below be imposed by the Central Government on all imports of Pentaerythritol originating in or exported from Canada, Japan and Taiwan falling under the Chapter 29 of the Custom Tariff Act.
| Sl. No. | Exportes/Producers | Amount of Anti-Dumping Duty
Recommended (US $ per MT) |
|---|
| 1 | 2 | 3 |
|---|
| Canada | All exporters | 122.40 |
| Japan | All exporters | 183.60 |
| Taiwan | All exporters | 267.60 |
15.0 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 Additional duty of Customs levied under section 3, 3A, 8B, 9 and 9A of the Customs Tariff Act, 1975.
16.0 Subject to above, the Authority confirms the preliminary findings dated 15th February, 2002.
17.0 An appeal against this order shall lie to the Customs, Excise and Gold(Control) Appellate Tribunal in accordance with the Act supra.
Sd/-
L. V. Saptharishi,
Presented by eximkey.com