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MINISTRY OF COMMERCE AND INDUSTRY

(Department of Commerce)

NOTIFICATION

New Delhi, the 2nd January, 2001

Preliminary Findings

** Subject:—Anti-Dumping Duties concerning imports of Sodium Hydrosulphite from

China RR.—Preliminary Findings.

No. 39/1/2000-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.

PROCEDURE:

The procedure described below has been followed with regard to the

investigations:-

(i)

The Designated Authority (hereinafter referred to as Authority), under Rules,

received written application from M/s, Transpek Industry Ltd..Gujarat and

M/s. Demosha Chemicals Limited, Mumbai alleging dumping of Sodium

Hydrosulphite (hereinafter .referred to as subject goods), originating in or

exported from China P.R. (hereinafter referred to as subject country);

(ii)

The Authority, on the basis of sufficient evidence submitted by the

petitioner, decided to initiate investigations against imports of Sodium

Hydrosulphite from the

subject country.

The Authority notified

the

Embassy of China P.R. about the receipt of dumping allegation before

proceeding to initiate investigations in accordance with sub-rule 5(5) of the

Rules;

(iii)

The

Authority issued a Public Notice dated the 3^rd November, 2000,

published in the Gazette of India, Extraordinary, initiating Anti-Dumping

investigations concerning imports of Sodium Hydrosulphite originating in or

exported from the subject country, classified under Custom sub-headings

2831.10 and 2832.10 under Chapter 28 of the Customs Tariff Act, 1975.

However, the petitioners have claimed that the product under consideration

is also being imported and cleared under Customs sub-heading 2932.10,

2932.19 and 2932.20 of Chapter 29 of the Customs Tariff Act, 1975

THE GAZETTE OF INDIA . EXTRAORDINARY

[PART I—SHC 11

(ivj

The Authority fo^yarded a copy of the Public Notice to the known exporters

(whose details were made available by the petitioners) and industry

associations and gave them an opportunity to make their views known in

writing in accordance with Rule 6(2);

(v)

The Authority forwarded a copy of the Public Notice to the known

importers of Sodium Hydrosulphite in India (whose details were made

available by the petitioners) and advised them to make their views known

in writing within forty days from the date of the letter;

(vi)

Request was made to the Central Board of Excise and Customs(CBEC) to

arrange details of imports of Sodium Hydrosulphite for the past three

years, including the period of investigations;

(vii)

The Authority provided a copy of the petition to known exporters and the

China PR in accordance with Rules 6(3) supra;

(viii) The Authority sent questionnaire, to elicit relevant information, to the

known exporters from China P.R., as mentioned below in accordance with

the rule 6(4):-

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M/s. Wuxi Chemical Industry Group Company Limited, China.

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M/s.Dazhong Chemical, China.

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M/s. Guangdong Zhongcheng Chemicals Company Limited, China.

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M/s. Hunan Zhuzhou Chemical Industry Corporation, China.

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M/s. Shangdong Ruixing Chemical Group Corporation, China.

M/s. Guangdong Zhongcheng Chemicals Company Limited, one of the

exporters have requested for grant of extension of time for submission of

data which has not been granted by the Authority since the anti dumping

investigations are time bound. However information submitted by them

within the time limit has been considered by the authority.

(ix)

The Embassy of China P.R. in New Delhi was informed about the

initiation of the investigations 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, petition and

questionnaire sent to the exporter was also sent to the Embassy of China

P.R., along with a list of known exporters/ producers.

(x)

A questionnaire was sent to the following known importers a

Consumers of Sodium Hydrosulphite in India calling for necesss

information in accordance with Rule 6(4):-

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The Arvind Mills Ltd., Ahmedabad.

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M/s. Bhiwani Textile Mills, Haryana.

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M/s. Sin's India Ltd., Hyderabad.

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M/s. Indian Dyestuff Industries Ltd., Bombay.

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M/s. Mafatlal Burlington Ind. Ltd., Navsari.

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M/s. Jaysynth Dyechem Ltd., Mumbai.

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M/s. Blue Blends India Ltd., Ahmedabad.

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M/s. K.G. Denim Ltd., Tamilnadu..

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Shri Renuga Soft-X Towels, Madurai, Tamilnadu.

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M/s. Century Denim,Dist. Khargone.

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M/s. E. Merck (India) Ltd., Mumbai.

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M/s. JCT Limited, Punjab.

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M/s. Soma Textiles & Industries, Ahmedabad.

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M/s. Morarjee Brembana Ltd., Maharashtra.

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M/s. Modern Denim Ltd., Gujarat.

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M/s. S. Kumars Ltd., Dewas, M.P.

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M/s.Orchid Chemicals & Pharmaceuticals Ltd., Tamilnadu.

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M/s. Madura Coats Limited, Tamilnadu.

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M/s. GSL (India) Limited, Gujarat.

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M/s. Gianchand Ramji Dass, New Delhi.

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M/s. Raymond Calitri Denim Ltd., Maharashtra.

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M/s. Indian Dyestuff Industries Ltd., Bombay.

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M/s. Reliance Textiles Ind. Ltd., Ahmedabad.

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M/s. Birla VXL Limited, Gujarat.

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M/s. Welspun Terry Towels, Village Vapi.

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M/s. Raymonds Limited, Maharashtra.

The response was, however, filed by the following importers of Sodiu

Hydrosulphite:

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M/s. Mafatlal Burlington tnd. Ltd., Navsari.

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M/s. K.G. Denim Ltd., Tamilnadu..

(xi)

Additional information regarding injury was sought from the petition*

which was also received;

(xii)

The Authority made available non-confidential version of the evidenc

presented by various interested parties in the form of a public file ke

open for inspection by the interested parties;

Contd...4

\8l6)tlux>f~3

THE GAZETTE OF INDIA : EXTRAORDINARY

[PART I—SHC. I]

(xiii)

Optimum cost of production and cost to make and sell the subject goods

in India based on the information furnished by the petitioner on the basis

of Generally Accepted Accounting Principles(GAAP) was worked out so

as to ascertain if Anti-Dumping duty lower than the dumping margin would

be sufficient to remove injury to Domestic Industry;

(xiv)

**** in this Notification represents information furnished by the petitioner

on confidential basis and so considered by Authority under the Rules;

(xvi) Investigation was carried out for the period starting from 1^st April, 1999 to

st March, 2000.

PETITIONER'S VIEWS:

The petitioners have raised the following issues in their petition:-

(a)

The export price of Sodium Hydrosulphite to India has been at a price

much below its Normal Value in the subject Country;

(b)

There has been significant increase in quantum of imports from subject

Country;

(c)

The dumped imports are significantly undercutting the price in the Indian

market, which has forced the domestic industry to reduce its selling prices.

(d)

The profits of the domestic industry have significantly eroded. The

petitioners have been forced to reduce their sales realisation inspite of

increase in the cost of production, which.has lead to significant losses to

the petitioners from a situation of profits.

(e)

The domestic industry has suffered material injury on account of increase

in quantum of losses.

VIEWS OF EXPORTERS. IMPORTERS AND OTHER INTERESTED

PARTIES:

M/S. GUANGDONG 2HONGCHENG CHEMICALS COMPANY LIMITED,

CHINA:

M/s. Guangdong Zhongcheng Chemicals Company Limited, China, one of

the exporters from the subject Country; has responded to th« Authorities

request soliciting for information. However they have not furnished the

complete details

in the prescribed proforma. M/s. Guangdong

Zhongcheng Chemicals Company Limited have stated in their reply to the

Contd...5/-

Questionnaire

that they have

sold

certain

quantities of Sodium

Hydrosulphite directly to Indian market and certain quantities wen

exported via its related company located in Hong Kong, which is a party t<

its joint venture company. In support of this they have furnished invoio

wise details of exports made directly

and

through

Hong Kong

M/s

Guangdong Zhongcheng

Chemicals

Company

Limited hav<

requested for grant of extension of time for submission of the remaining

data which has not been granted by the Authority since the anti dumpin

investigations are time bound.

The views expressed by other interested parties are as under:-

M/S. MAFATLAL BURLINGTON IND. LTD,. NAVSARI:

M/s. Mafatlal Burlington Ind. Ltd., Navsari. has furnished details of import

of the subject goods during the Period of investigation along with copies c

Invoices , bill of lading etc. They have also submitted details of purchase

of the subject Goods from domestic sources . However , M/s. Mafatk

Burlington Ind. Ltd., has not raised any other issues regarding like article

Normal Value etc.

M/S. K.G. DENIM LTD.. TAMILNADU

M/s. K.G. Denim Ltd., Tamilnadu has informed that they have not importe

Sodium Hydrosulphite during the period under investigation i.e

01.04.1999 to 31.3.2000.

EXAMINATION OF THE ISSUES RAISED:

The submissions made by the exporters, importers, petitioner and oth*

interested parties have been examined/considered and have been dea

with at appropriate places hereinafter.

PRODUCT UNDER CONSIDERATION:

The product involved in the present petition is Sodium Hydrosulphite (als

referred as subject goods hereinafter) originating in or exported froi

China P.R. Sodium Hydrosulphite is a white or grayish white crystallin

powder, free from visible foreign particles with pungent odour. Sodiui

Hydrosulphite

finds application in various fields like textiles,

soa|

molasses, glue and reducing agent disulphide of Metal ions to Metal

linkage in wool hair etc. Present investigation covers all forms of Sodiui

Hydrosulphite . Sodium Hydrosulphite

is classified under Customs su

'^I^ooi-H

THE GAZETTE OF INDIA . EXTRAORDINARY

[PART I—SEC 11

heading No. 2831.10 and 2832.10 under Chapter 28 of the Customs Tariff

Act, 1975.

However, the

petitioners

have

claimed

that

the

product under consideration is also being imported and cleared under

Customs sub-heading 2932.10, 2932.19 and 2932.20 of 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.

LIKE ARTICLES:

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 petitioners have, claimed that the Sodium Hydrosulphite produced and

sold by them and those imported from the subject Country, are being used

inter changeably by the customers in India. The process and technology for

manufacturing the product all over world is similar in terms of machinery,

raw materials, manufacturing process except for minor difference such as

additives. None of the interested parties have disputed the claims made by

petitioner.

In view of the same, the Authority holds that Sodium Hydrosulphite being

produced by the domestic industry and those being imported from the

subject Country can be used Interchangeably and thus are commercially

and technically substitutable and therefore, are like articles within the

meaning of the Rules.

DOMESTIC INDUSTRY:

The petition has been

jointly filed by M/s. M/s. Transpek Industry

Ltd.,Gujarat and M/s. Demosha Chemicals Limited, Mumbai. The

petitioner accounts for more than 50% of the Domestic production 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 the Rules. None of the interested parties has disputed the standing

of the petitioners to represent the Domestic industry.

NORMAL VALUE. EXPORT PRICE AND DUMPING MARGIN:

10.

The Authority has examined the Normal value

in relation to subject

goods in accordance with Rules 9 A(1)(c). Accordingly, the assessment

of Normal Value from subject Country is discussed below:-

(a)

NORMAL VALUE

(i)

The Authority provided opportunity to the exporters from China PR to

furnish information relevant to the investigations and offer

comments, if

any, in accordance with the Section cited above. The Authority wrote to

the Embassy of China P.R. in India also. M/s. Guangdong Zhongcheng

Chemicals Company Limited, one of the exporters have requested for

grant of extension of time for submission of data which has not been

granted by the Authority since the anti dumping investigations are time

bound. Information submitted by them after the time frame has not been

considered in Preliminary Findings because as the same is incomplete in

respect of many vital information / documents so as to arrive at authentic

Normal Value. In the meantime, M/s. Guangdong Zhongcheng Chemicals

Company Limited

is being advised to submit the complete/additional

information to the Authority. The complete information, if submitted, by

them will be considered in the Final Findings subject to further

investigation/ verification. None other exporter from

China P.R. has

furnished the requisite information in the prescribed proforma. None of

the

other interested parties furnished any information relevant for

determination of Normal Value. The claim made by the petitioner with

regard to the determination of Normal Value has also not been disputed

by any interested party(ies). The Authority has, therefore, proceeded on

the basis of Rule 6(8), i.e., best information available.

(ii)

The Normal Value was determined at the time of initiation of the

investigations on the basis of the constructed cost of production of Sodium

Hydrosulphite in China P.R.

based on the conditions prevailing during

the Period of Investigation.

For this purpose the consumption of raw

materials has been adopted based on the norms of consumption, rates

of raw materials and conversion cost prevailing in the least cost unit in

India. A reasonable return has been allowed to work out the constructed

Normal Value of Sodium Hydrosulphite in China P.R. during the Period o1

Investigation.

Accordingly, the Normal Value of Sodium Hydrosulphite

for

exporters from China P.R. has been taken at US$ *"*

per Kg,

(Rs.**** per Kg.).

THE GAZETTE OF INDIA : EXTRAORDINARY

[PART I—SEC. 1]

(b)

EXPORT PRICE:

(ili)

M/s. Guangdong Zhongcheng Chemicals Company Limited, China in reply

to the Questionnaire has submitted invoice wise details of exports made to

India. The information submitted by the Exporter reveals that it has

exported substantial volumes to India through its joint venture company in

Hong Kong during the Period of Investigation. Since the goods in these

cases have originated in China, the Authority considers it appropriate to

include all these sales for determination of export price. The company

exported **** MT of

Sodium

Hydrosulphite

during the period of

investigation at an average CIF price of export sales to India.

The

company has incurred

expenses on Ocean freight,

Insurance,

Commission etc. The same has been considered by the Authority to

arrive at Ex-factory Export Price in case of exports from China P.R.

The weighted average Ex-factory Export Price works out to US$ **** per

MT of Sodium Hydrosulphite.

(Iv)

Based on the Normal Value and the Export price, as indicated above, the

Authority assessed the Dumping Margins in case of all exporters from

China P.R. as 80.10% of the export price.

INJURY:

II.

QUANTUM OF IMPORTS AND MARKET:

The information with regards to quantum of imports of Sodium

Hydrosulphite prior to Period of Investigation (POI) has been relied upon

by Designated Authority based on information furnished by DGCI&S,

Calcutta. Since the imports statistics provided by DGCI&S, Calcutta do

not cover the whole of the Period of Investigation, the Authority has relied

upon the information submitted by the Exporters. The information given

by one of the exporters reveals that it has exported substantial volumes of

subject goods to India through its joint venture company in Hong Kong.

Since the goods in these cases have originated in China, the Authority

considers it appropriate to include all these sales to assess the volume of

imports for the purpose of determination of injury. The Authority notes that

the market share of imports of the subject goods from China P.R. was

69.77% during 1997-98. The same has increased to 72.73% during

1998-99 and 74.15% during the Period of Investigation. The total imports

have increased by about 29% during the Period of Investigation over

1997-98.

12.

EXPORT PRICE:

The average export price of subject goods from China P.R. in 1997-98

was US$**** per

MT which has decreased to US$**** per MT during

the Period of Investigation, showing a decrease by about 5.5%.

13.

PRODUCTION:

The total production of petitioner companies of subject goods during 1997-

98 was 11510 MT increased to 15124 MT during the POI representing an

increase of 31%.

SALES VOLUME:

Total sales volumes of petitioner companies during 1997-98 were 10198

MT, which increased to 13730 MT during the Period of Investigation

showing an increase of 35%.

CAPACITY UTILIZATION:

The petitioners attained an average capacity utilisation of 67% in the year

1997-98, which increased to 88% during the POI.

16.

SALES REALISATION:

The average sales realisation of petitioner companies from sale of subject

goods in domestic market during the year 1997-98 was Rs. **** per MT,

which declined to Rs. **** per MT in 1998-99 representing a decline of

2.5%. The average sales realisation for domestic sales in the year 1999-

2000, was Rs.**** per MT.

This shows a decline of 7.25% during the

Period of Investigation over 1997-98.

PROFITABILITY:

It has been observed both M/s. Transpek Industry Limited and M/s.

Demosha Chemicals Limited were earning a net profit of Rs.**** per MT

and Rs.**** per MT respectively of subject goods during 1997-98. During

the Period of Investigation, both M/s. M/s. Transpek Industry Limited and

M/s. Demosha Chemicals Limited incurred a loss of Rs.**** per MT and

Rs.**** per MT respectively from the subject goods.

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THE GAZETTE OF INDIA : EXTRAORDINARY

[PART I—SEC. 1]

CAUSAL LINK:

18.

The Authority notes that there has been significant increase in quantum of

exports of subject goods from China PR. The market share of subject

country in the total imports has also increased. The Sodium Hydrosulphite

has been exported to India from subject Country at a price

below

its

Normal Value.

The export price in US$ terms from China P.R. has significantly declined.

In spite of increase in production and capacity utilisation, the petitioner

companies suffered a decline in sales prices inspite of increase in cost of

production. The petitioner companies were able to sell the subject goods

in domestic market only at a substantial losses. All these parameters

cumulatively

indicate that the petitioner companies have suffered

material injury and the injury to petitioner companies has been caused

due to dumped imports of subject goods.

INDIAN INDUSTRY'S INTEREST & OTHER ISSUES:

19.

The purpose of Anti Dumping Duties, in general, is to eliminate dumping

which is causing injury to the petitioner companies and to re-establish a

situation of open and fair competition in the Indian market, which is in the

general interest of the country.

It is recognised that the imposition of Anti Dumping Duties might affect

the price levels of the products manufactured using the 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, particularly if the levy of the

Anti Dumping Duty is restricted to an amount necessary to redress the

injury to the petitioner companies. On the contrary, imposition of Anti

Dumping measures would remove the unfair

advantages gained by

dumping practices, would prevent the decline of the petitioner companies

and help maintain availability of wider choice to the consumers of

Sodium Hydrosulphite imposition of Anti Dumping measures would not

restrict imports from the subject countries in any way, and, therefore

would not affect the availability of the product to the consumers.

CONCLUSIONS:

20.

It would be seen, after considering the foregoing, that:

(a)

Sodium Hydrosulphite originating in or exported from China PF

have been exported to India below Normal Value, resulting ir

dumping;

(b)

The Indian industry has suffered material injury;

(c)

The injury has been caused cumulatively by the imports from th«

subject Country.

21.

It is considered necessary to impose Anti-Dumping Duty, provisionally

pending final determination, on all imports of Sodium Hydrosulphit*

originating in or exported from China P.R., pending investigations. It i;

clarified that the proposed anti Dumping duty would apply to those import!

of the subject goods also which are routed through Hong Kong, providet

the country of origin in these cases is China P.R.

22.

It was considered whether a duty lower than the dumping margin would b<

sufficient to remove the injury. The average landed price of the imports

for the purpose, was compared with the Non-injurious

price of thi

petitioners companies, determined

for the period of investigations

Wherever the difference was less than the dumping margin, a duty lowe

than the dumping margin is recommended.

Accordingly, it is propose

that provisional Anti Dumping Duty of US$ 271.67 per MT be imposec

pending final determination on all imports of Sodium Hydrosulphite fallin

under Chapter 28 or any other Chapter of the Customs Tariff Act, 197*

originating in or exported from China P.R.

23.

Landed value of imports for the purpose shall be the assessable value s

determined by the customs under the Customs Act, 1962 and all duties <

customs except Additional duty of Customs levied under Section 3, 3/

8B, 9 and 9A of the Customs Tariff Act, 1975.

FURTHER PROCEDURE:

24.

The following procedure would be followed subsequent to notifying tt

preliminary findings:*

(a)

The Authority invites comments on these findings from all interest*

parties and the same would be considered in the final finding;

2 6

THE GAZETTE OF INDIA : EXTRAORDINARY

[PAR: I—SEC 1]

(b)

Exporters, importers, petitioner and other interested parties known to be

concerned are being addressed separately by the Authority, who may

make known their views, within forty days from the date of the dispatch of

the letter. Any other interested party may also make known its views

within forty days from the date of publication of these findings;

(c)

The Authority would conduct further verification to the extent deemed

necessary;

(d)

The

Authority would disclose essential facts before announcing final

findings.

LV. SAPTHARISHI, Designated Authority

Pnnled by the Manager, Govt of India Press. Ring Road, Mayapuri, New Delhi-110064

and Published by the Controller of Publications, Delhi-110054.