THE GAZETTE OF INDIA : EXTRAORDINARY

[PART II—SEC. 3(i)l

OFFICE OF THE DIRECTOR GENERAL (SAFEGUARDS)

NOTICE OF REVIEW OF SAFEGUARD DUTY IMPOSITION

New Delhi, the 1st January, 2001

Sub : Review of Safeguard Duty imposition on imports of Phenol into India.

[Under Kuie 18 read with Rule 6 of the Customs Tariff (Identification and Assessment of

Safeguard Duty) Rules, 1997]

G.S.R. 13(E).—An application has been filed before me under Rule 18 of the Customs

Tariff (Identification and Assessment of Safeguard Duty) Rules, 1997 (hereinafter referred

to as the SGD Rules) by Hindustan Organic Chemicals Ltd. (HOC), Mumbai and Herdillia

Chemicals Ltd. (HCL), Mumbai for review of Safeguard Duty imposed on imports of Phenol

into India to protect the domestic producers of Phenol against continued serious injury caused

by the increased imports of Phenol into India.

The notice initiating investigation concerning import of Phenol into

India was issued on 02.02.99 under Rule 6 of the SGD Rules. Final findings

were issued under Rule 11(1) of the said Rules, (published in the Gazette of

India (Extraordinary) Part II-Section-3-Sub-section (i)) on 11,06.99,

recommending safeguard duty to be imposed @ of 22% advalorem (faring

the 1^st year and @ of 15% advalorem during the 2^nd year on imports ot

Phenol into India being the minimum necessary for the protection of the

domestic industry from the serious injury threatened to be caused by the

increased imports of Phenol. In exercise of powers conferred by sub section

(1) of section 8B of the Customs Tariff Act, 1975(51 of 1975) tead with

Rules 12 and 14 of the SGD Rules and based on the final findings of the

Director General (Safeguards), the Central Government vide Notification

No.82/99-Customs dated 30^th June, 1999 imposed on Phenol, falling under

sub-heading number 2907,11 of the First Schedule to the said Customs

Tariff Act, when imported into India, a safeguard duty at the rate of;

(a) 22% when imported upto and inclusive of the 29^th day of

February, 2000; and

(b) 15% when imported from the 1^st of March, 2000 to 29^th day of

June, 2001 (both days inclusive).

The aforesaid domestic producers have submitted that

(i) Phenol is being imported into India primarily from Belgium, Chinese

Taipei, Germany, Italy, Japan, Korea DPR, Korea RP, the Netherlands,

Russia, Singapore, South Africa, U.K. and USA. The imports have shown

an increasing trend in absolute terms as well as compared to domestic

production. The imports and domestic production of Phenol during 1994-95

to 1999-2000 have been as under;

Year

1994-95

1995-96

1996-97

1997-98

1998-99

1999-2K

Domestic production

(MI)

57780

63719

57466

69281

66210

69961

Import

(Ml)

6664

21752

19545

15352

26670

28992

Imports as %age of

domestic production

11.53

34.14

34.01

22.16

40.28

41.44

The imports during the first eight and halt

months i.e. Apnl to

December (first half) 2000 - have been reported to be 18247 MT. They have

stated that the imports have been increasing sharply in November and

December 2000.

ta&[/jL*T>t-£

THE GAZETTE OF INDIA : EXTRAORDINARY^^

[PART II—SEC. 3(i)l

(ii)

The capacity utilisation of domestic producers to meet with the

domestic demand which increased from 85% in 1996-97 to 89% in 1999-

2000 declined to 83% in the first 8 months of 2000-01.

(iii) The market share of domestic producers of Phenol in the total domestic

consumption of Phenol which increased from 74.3% in 1996-97 to 80.25%

in 1997-98 declined to 71.13% and 70.75% in the year 1998-99 and 1999-

2000 respectively, as indicated from the table below:

(InMT)

Year

1995-96

1996-97

1997-98

1998-99

1999-2K

2(XXM>1

(Upto

Nov.2000

3448

3323

3248

2464

2885

1517

)

Production

63719

57466

69281

66210

69961

45848

3323

3248

2464

2885

1517

900

Exports

2354

1006

7675

1184

Domestic sales

(2M3H4)-(5)

(in^'Hftiut

captive

consumption)

61490

56535

62390

65703

70145

46465

Apparent domestic

consumption

imports

83242

76081

77742

92373

99137

64712

Snare of

domestic

production

in apparent

domestic

(677x100%)

73.86

74,3

80.25

71.13

70.75

71.80

The domestic producers have also stated mat they are facing

depressed conditions of performance in spite of imposition of safeguard duty

on Phenol.

The domestic producers have requested for continued imposition of

safeguard duty on imports of Phenol for a further period of 3 years from July

2001.

The application has been examined and it appears that prima facie the

imports of Phenol continue to cause threat of serious injury to the domestic

producers of Phenol and accordingly it has been decided to initiate review

proceedings through this notice for continued imposition of Safeguard Duty

on imports of Phenol.

The purpose of the review is to determine whether the safeguard

measure is still needed in order to remedy the serious injury caused by the

imports and whether the industry is adjusting so as to compete with imports

by the end of the proposed period. The initiation of the review for the

purposes of extending the safeguard measure will enable an assessment of

present needs so that the domestic industry can complete its restructuring

process to stay competitive vis-a-vis imports of Phenol into India.

All interested parties may make their views known by 09.02.2001 to:

The Director General (Safeguard)

5^th Floor, 'D' Block,

Indraprastha Bhawan,

New Delhi-110 002

India.

All known interested parties are also being addressed separately.

Any other party to these proceedings who wishes to be considered as

an interested party may submit its representation so as to reach the

Directorate General (Safeguards) within 21 days from the date of this notice.

[F. No. SG/INV/2/98 (Rev.)]

R. K. GUPTA, Director General

Printed by Iho M«nag«, Govt of Indii Prew, Ring Ro«d, Miyapuri, New Delhi-110064

and Published by the Cootroller of PubHoitioiw, Dolhi-110034.