MINISTRY OF COMMERCE AND INDUSTRY

(Department of Commerce)

(DIRECTORATE GENERAL OF ANTI DUMPING AND ALLIED DUTIES)

FINAL FINDINGS

New Delhi, the 26th November, 2001

Subject: Anti-Dumping investigation concerning imports of Choline Chloride from territory of European Union and

Peoples Republic of China.

59/1/2000-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:

(i)

The Designated Authority (hereinafter also referred to as

Authority), under the above Rules, received a written

application from M/s Vam Organic Chemicals Ltd. (hereinafter

also referred to as petitioner) having registered office at

Plot No.l A, Sector-16A, Institutional Area, Noida - 201 301

on behalf of domestic industry, alleging dumping of Choline

Chloride (hereinafter also referred to as subject goods)

originating in or exported from territory of European Union

and People's Republic of China and USA.

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IPARI I—SF.C. 11

(ii)

Preliminary scrutiny of the application filed by the

petitioner revealed certain deficiencies, which were

subsequently rectified by the petitioner.

The petition

was, therefore, considered as properly documented.

(iii)

The Authority on the basis of prima-facie evidence as

received decided to initiate the investigation against

imports of subject goods from territory of European

Union

and People's Republic of China (hereinafter

referred to as subject countries).

As the petitioner

could not furnish prima-facie evidence on dumping of the

subject goods from USA, the Authority did not initiate

any proceedings against imports of subject goods from

USA.

The Authority notified the Delegation of the

European Commission and the Embassy of the People's

Republic of China in New Delhi(hereinafter also called

Embassies of the subject countries) about the receipt of

the dumping allegation before proceeding to initiate the

investigation in accordance with sub-Rule 5(5) of the

Rules.

(iv)

The Authority issued a public notice dated 6.12.2000

published in the Gazette of

India, Extraordinary,

initiating Anti-Dumping investigations concerning imports

of the subject goods classified under Custom Code

2309.9001 and 2923.1001 of Schedule I of the Customs

Tariff

Act, 1975 originating in or exported from

territory of European Union and

Peoples Republic of

China.

(v)

The

Authority

notified

preliminary

findings

dated

22.2.2001 and forwarded a copy of the preliminary

findings to the 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.

(vi)

The Authority also forwarded a copy of the preliminary

findings to the Embassy of the subject countries in New

Delhi with a request that the exporters/producers of

subject goods and other interested parties may be

advised to furnish their views on the preliminary findings

in the time frame as stipulated in (v) above.

(vii)

The Authority forwarded a copy of the public notice to

all the known exporters (whose details were made

available by petitioner) and industry/user associations

and gave them an opportunity to make their views known

in writing in accordance with the Rule 6(2).

(viii)

The Authority provided ar\ opportunity to all interested

parties to present their views orally on 27.4.2001. All

parties presenting views were requested to file written

submissions of the views expressed. The parties were

advised to collect copies of the views expressed by the

opposing parties and offer rebuttals, if any;

(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)

Request was made to the Central Board of Excise and

Customs (CBEC) to arrange details of imports of subject

goods made in India during the past three years,

including the period of investigation.

(xi)

Arguments raised by the interested parties before

announcing the preliminary findings, which have been

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[PART I—SEC. 11

brought out in the preliminary findings notified have not

been repeated herein for sake of brevity. However, the

arguments raised by the interested parties subsequently

have been appropriately dealt in the preliminary findings

and/or these findings;

(xii)

In accordance with Rule 16 of the Rules supra, the

essential facts/basis considered for these findings were

disclosed to known interested parties on 8.11.2001.

Request for extension was made by certain interested

parties

which was considered by the Authority and

extension was granted upto

16.11,2001. Comments

received on the same have also been duly considered in

these findings.

(xiii)

*** in this notification represents information furnished

by an interested party on confidential basis and so

considered by the Authority under the Rules.

(xiv)

The period of investigation {POX) considered is 1.4.1999

to 30.9.2000

VIEWS

OF DOMESTIC

INDUSTRY.

EXPORTERS.

IMPORTERS. USER ASSOCIATIONS

AND OTHER

INTERESTED

PARTIES

EXAMINATION

AUTHORITY

The views expressed by various interested parties have

been discussed in the preliminary findings and also in the

disclosure statement.

The views which have not been

discussed earlier in the preliminary findings and disclosure

statement and those now raised in response to the

disclosure statement are discussed in the relevant paras

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 paras herein

below.

C.I PRODUCT UNDER CONSIDERATION

The Authority notes that the following arguments have been

made by the various interested parties

on the product

under consideration :-

AA/s Nav Maharashtra Chakan Oil Mills Ltd

(\)

Choline Chloride a supplement not a feed:-

I t must be clarified that choline chloride is not a feed but a

supplement in the poultry feed.

Its main purpose is to

counter the alfo toxins produced thus reducing the load on

the chicken liver.

Domestic Industry

(i)

Whether Choline Chloride is a feed additive or a feed

supplement, it is clarified that the product under

consideration is Choline Chloride and the product being

produced by the domestic industry is a like article to the

product being imported. There is no dispute even on this

account. Such being the case, the distinction pointed out

by the importer is hardly of any consequence in the on-

going investigations.

EXAMINATION BY AUTHORITY

The Authority notes the various submissions made by the

interested parties and also notes that even though choline

chloride is a feed supplement, it is known as choline chloride and

3664G1/2001 -3

THE GAZETTE OF INDIA : EXTRAORDINARY

[PART I—SEC, 1]

as such there is no dispute on this nomenclature. The Authority

noting that as there is no other dispute on the Product Under

Consideration and that none of the interested parties have raised

any issue in response to the disclosure statement, therefore,

confirms the product under consideration as clarified in para C(l)

of the preliminary findings as follows:

"The product under consideration in the present investigation is

Choline Chloride, a kind of animal compound feed, is a quaternary

ammonium compound, which is colourless, viscid and strongly

alkaline.

The product is generally referred to as B Complex Vitamin, which

basically poultry, feed supplement. The product is classified

under Chapter 23 (2309.9001) of the Customs Tariff Act and also

the Liquid Choline Chloride under Chapter 29 (2923.1001). The

manufacturing process is as under: -

The product is manufactured in three steps batch process, which

involves neutralization of Hydrochloric Acid with Trimethyl

Amine to form Trimethyl Amine Hydrochloride. Ethylene Oxide

is then added to Trimethyl Amine Hydrochloride to form Choline

Chloride solution.

The solution is then concentrated under

vacuum to a pre determined percentage solution. Dry Choline

Chloride is produced by blending in a mixer batch wise Liquid

Choline Chloride with solid carriers. This blend is then fed to a

Rotary Dryer where moisture is removed. This is then fed in

Rotary Cooler to bring down the temperature of the mass to

Atmospheric Temperature.

Finally the dry choline chloride is

Milled and filled in bags.

The carrier normally used is a Silica, corn Cob powder or

similar absorbent powder derived from agro-waste materials.

The carrier is used merely to carry the product, Choline chloride.

The commercial nomenclature of the product depends upon the

carrier used and the concentration of Choline.

In case the

carrier used is corn cob, the product is commercially called

Choline Chloride Corn Cob base. I f the earner used is vegetable,

it is known as Choline Chloride Vegetable base. The concentration

of Choline Chloride is also usually mentioned along with the

earner used. In case the concentration is 50% Choline Chloride, it

is called Choline Chloride 50% Corn Cob (or vegetable) base. The

various grades of Choline Chloride are Choline Chloride on Corn

Cob Carrier, Choline Chloride on Silica Carrier and Aqueous

Choline Chloride.

The product falls under O&L and attracts the basic duty of

35% with 10% surcharge. The present investigation coders all

types, forms and grades of Choline Chloride, regardless of its

concentration and the carrier used."

STANDING OF THE DOMESTIC INDUSTRY

The Authority notes that there are no submissions made on

the standing of the Domestic Industry in response to the

disclosure statement and "therefore recalls and confirms the

Para C(3) of the preliminary findings dated 22.2.2001 as indicated

below:-

The petition has been filed by M/s Vam Organic Chemicals

Ltd. , having registered office at Plot No.l-A, Sector-16 A,

Institutional Area, Noida-201301. The Authority holds that the

petitioner a major producer of subject goods in India accounts

for almost 70% of the total domestic production, and therefore,

satisfies the standing to file the petition on behalf of the

Domestic Industry as per Rule 5(a) and (b) and Rule 2(b).

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[PART 1—SEC. 1]

LIKE ARTICLE

The Authority notes that there is no dispute and no submissions

made on the issue of like article by any interested parties in response

to the preliminary findings or to the disclosure statement. The

Authority, therefore, recalls and confirms para

C(2) of the

preliminary findings as indicated below:-

The Authority notes that the petitioner has claimed that goods

produced by them and as classified by the Custom Tariff under the

Head 2309.9001 and 2923.1001 have no substitute and that there is no

significant difference in Choline Chloride produced by the Domestic

Industry and that exported from subject countries viza. Domestic and

those imported from the subject countries. The consumers of the

product are using both the products without making any changes in

their production process.

Also according to the petitioner's

information there is no significant difference in the production

process adopted by the petitioner and the producer in the subject

countries. The Authority further notes that the cooperative exporter

M/s Akzo Nobel Chemicals S.p.A. and the other interested parties viz.

importers/users who have responded have not raised any issues on

this. The petitioner has submitted that the domestic goods and the

imported goods from the subject countries be treated as Like Article.

The Authority, therefore, holds that the subject goods imported

from the subject countries and that manufactured by the Domestic

Industry are Like Article within the meaning of the Rule 2(d).

NORMAL VALUE & EXPORT PRICE

The following submissions have been made:

DOMESTIC INDUSTRY

(i)

Dumping margin for M/s Akzo Nobel Chemicals is significantly

on the lower side and that the response is incomplete and

insufficient. The exporter has not provided the details of the

cost of production.

The exporter has not claimed any

adjustment on credit cost which the Authority has allowed.

The whole response of exporters deserves to be rejected.

The dumping margin of M/s Akzo Nobel Chemicals be

determined as done for other exporters of European Union.

The Designated Authority has determined the dumping for

exporters/producers of Peoples Republic of China who have

not cooperated on the basis of best available information,

which is fully justified.

(b) M/s Akzo Nobel Chemicals S.P.A.. Italy and M/s Akzo

Nobel Functional Chemical BV. Netherlands (Akzo Nobeh

have made the following submissions:-

(i)

M/s Akzo Nobel Chemicals strongly protests against the way

of determining selling price of Choline Chloride in European

Union on the basis of secondary source when M/s Akzo

Nobel Chemicals has provided evidence of its selling prices

and in its view the producer is the most reliable source to

determine the normal value.

(ii)

The source mentioned in this Article does not reveal any

information regarding the selling price of Choline Chloride in

the European Union i.e. reduction on the account of being a

wholesaler or other special arrangements.

(iii) As indicated in the notification credit cost for exports from

M/s Akzo Nobel to India have been referenced to the local

Indian rate of interest for domestic sales. We object to

this calculation since the cost of financing credit terms in

the European Union are far below the level in India.

required M/s Akzo Nobel will disclose their cost of financing

credit terms on a confidential basis. M/s Akzo Nobel asks

the Indian Ministry of Commerce <& Industry to disclose the

THE GAZETTE OF INDIA : EXTRAORDINARY

[PART I—SEC. 11

calculation for the determination of the credit cost to

compare it with its own calculations. This will allow

interested parties to make an objective judgment. M/s Akzo

Nobel has substantiated its adjustment in the selling price

to their customer in India on account of being a wholesaler.

M/s Akzo Nobel has clearly stated, in signed statement, the

pricing strategy to distributors in general. The rejection of

the adjustments for wholesalers not being substantiated,

cannot be accepted by M/z Akzo Nobel.

(iv)

M/s Akzo Noble has provided its pricing arrangement with

one of the customers in the domestic market.

M/s

Compound

Livestock

Feed

Manufacturers

Association. M/s Poultry Federation of India and M/s Nav

Maharashtra Chakan Oil Mills Limited

(i) M/s Nav Maharashtra Chakan Oils Mills Limited would like to

put on record that full and complete details have been

provided from Europe. The prices at which choline chloride is

being exported to India are comparable to global prices. The

landed prices of choline chloride in India are 50% higher than

the lower price at which it is available in the international

market.

(ii) I f for any reason, the Authority considers that this data is

not in compliance with the applicable law, it is submitted that

best available information as per Rule 6(8b) used.

(iii) M/s Nav Maharashtra Chakan Oils Mills Limited is not

condoning or in any way asking the Hon'ble DA to favour non-

cooperating exporters but since the law does not permit the

importer and user industry to provide information on normal

value, taking only the data provided by the petitioner is

unjust to the consuming industry or is also contrary to the

WTO provisions which calls upon the DA to be circumspect

while using the data filed by the domestic industry.

(iv) The decreasing international price is not on account of

dumping but rather the reducing cost of production of

choline chloride.

EXAMINATION BY AUTHORITY

NORMAL VALUE

M/s Akzo Nobel Chemicals S.P.A., Italy and M/s Akzo Nobel

Fucntional Chemical BV. Netherlands (Akzo Nobel)

The Authority notes the submission made above by various

interested parties. The Authority recalls that in Para 4(a) of the

preliminary findings, it has been indicated that the domestic

prices of the exporter M/s Akzo Nobel are being treated in the

ordinary course of trade for the purpose of preliminary

determination only, pending final determination. The Authority

had deputed a team of officers from the Directorate of Ant1

Dumping to verify the response filed by l^/s Akzo Nobel on

domestic selling price, cost of production and export price with

adjustments thereof.

The Authority on the basis of cost of

production of subject goods provided to the verification team

notes that the domestic selling price of subject goods in the

domestic market are in the ordinary course of trade. The

Authority also notes that l^/s Akzo Nobel has incurred credit

cost for 60 days credit on their domestic sales and have also

incurred a freight cost on their domestic sales. The Authority

has allowed the adjustments on credit cost and freight

to am

extent of US$****PMT and US$****PMT respectively.

The

Authority, however, notes that in the absence of no evidence

provided by the exporter in regard to any expense incurred on the

commission given to their agent in the domestic market, no

THE GAZETTE OF INDIA : EXTRAORDINARY

[PART I—SEC. H

adjustments can be granted on account of commission on the

domestic sales. The Authority has referenced the domestic selling

prices for the purpose of normal value. The normal value after

considering the above adjustments comes to US$****PMT.

As regards the export price, the Authority notes that on the

basis of the data given by the exporter, the weighted average CIF

price to India comes to US$****PMT. The Authority notes that

the exporter has incurred expenditure on freight (ocean freight,

inland freight and other port expenses), commission to their agent

in Delhi, ocean insurance and credit cost to an extent of 120 days

as indicated in their export invoices. The Authority has considered

and allowed adjustments on these elements to an extent of ***,

***, *** and *** $/MT respectively. The Ex-factory export selling

price after allowing these adjustments comes to US$****PAAT.

NON-COOPERATIVE EXPORTERS

response

to the Disclosure

Statement.

M/s Nav

Maharashtra Chakan Oil Mills and M/s Compound Livestock Feed

Manufacturers

Associationfhereinafter

referred

as the

Interested Opposing Parties) have made the following submissions.

Though the submissions have been made on 19.11.2001 after the

expiry of the last date i.e. 16.11.2001, the same have been

considered and appropriately dealt with.

Determination of

Normal Value in EU for Non-cooperative

exporters •-

At the outset, the interested opposing parties would like to

submit the pursuant to Rule 6(5) of the Anti Dumping Rules, the

interested opposing parties are permitted to give information on

interalia, dumping.

Based on this provision, the interested opposing parties submit

that if the Designated Authority is relying on Rule 6(8) of the

Anti Dumping Rules, then all relevant information available to the

Designated Authority needs to be considered, including that

provided by partially cooperating exporters.

I t is submitted that the Designated Authority should consider

the cost basis of M/s Akzo Nobel QS the basis for the

determining Normal Value for non-cooperating exporters from

the EU. A difference of o\/er 100% in the dumping margin for

cooperating

and

non-cooperating

exporters

penalizes

the

consuming industry.

Furthermore, under the best evidence Rule in 6(8), the cost of

the raw materials in the EU would not be the "raw material prices

at international level to the extent they are available and on the

production cost details adjusted on the basis of best practices as

provided by the Domestic Industry " as is stated by the

Designated Authority. In fact the raw material pricing as

available in EU with M/s Akzo Nobel and the manufacturing

practices adopted by them.

EXAMINATION BY AUTHORITY

As regards the other exporters/producers of territory of

European Union and all exporters/producers of PR China who have not

cooperated, the Authority has evaluated normal value and export price

as indicated in the preliminary finding by referencing the secondary

source information as provided by the petitioner and on the normal

value constructed on the basis of information by adopting the raw

material prices at international level to the extent they are available

and on the production cost details adjusted on the basis of best

practices as provided by the petitioner.

The Authority notes the

above submissions made by M/s Nav Maharashtra Chakan Oil Mills and

M/s Compound Livestock Feed Manufacturers Association, recalls the

3<i(v1 GI2UU1

THE GAZETTE OF INDIA : EXTRAORDINARY

[PART I—SEC. 11

provisions of Rule 22 in which any new exporter is permitted to apply

for a new shipper review if he has not been evaluated during the

investigation. In case of any non-cooperating exporter other than such

exporters, the Authority is well within the provisions of Anti Dumping

Rules to consider the best available information under Rule 6(8).

The Authority recalls and confirms the methodology as

illustrated in Para C(l) (ii) of preliminary findings dated 2.2.2001 and as

indicated below.:-

Non-cooperative exporters other than M/s Akzo Nobel

Chemicals S.p.A. Italy & M/s Akzo Nobel Functional Chemicals BV.

Netherlands

Normal Value

The Authority notes that the petitioner has provided a secondary

source evidence for the domestic selling prices in the European

Territory.

Since only one exporter has responded, the Authority

considers it appropriate to refer the secondary source for the purpose

of determination of the normal value for all exporters other than the

cooperative exporter.

The normal value for such exporters is

referenced at ****$/MT.

Ex-factory export price

The Authority notes that the petitioner has provided details of

the month-wise CIF export prices and quantitities to India of the

subject goods in the POI. The petitioner has sought adjustments on

ocean freight, ocean insurance, commission, inland freight, port

handling to an extent of ****, ****, ****, **** 6 ****$/MT

respectively. The weighted average ex-factory export price for the

non-cooperating exporters by considering the average CIF prices and

adjustments as indicated by the petitioner except ocean freight for

which data provided by the cooperative exporter has been referenced,

comes to ****$/MT.

B. NON-COOPERATIVE EXPORTERS/PRODUCERS OF PR CHINA

AA/s Yixinq Akzo Nobel Sanyuan Chemicals Co. Ltd. Dushan,

PR China

The Authority notes that the exporter has indicated that they

have not made any exports of the subject goods in the POI to India.

The Authority, therefore, notes that Rule 22 of the Anti-Dumping

Rules would be attracted for the above exporter. The exporter should

make application accordingly under the Rules. Till such time their case

is take up for review under Rule 22, they shall be covered under the

category of "all exporters/producers in Para (C) below.

All exporters/producers

Normal Value

The Authority notes that none of the exporters/producers has

responded to the questionnaire. The Authority in the absence of the

response from exporters/producers, considers it appropriate to

construct the normal value for such exporters/producers.

For the

purpose of construction of the normal value, the Authority has

referenced the best available information by considering the cost of

production of subject goods and by making appropriate adjustments on

capacity utiliation and bench marking best utilisation practices and

international raw material prices. The weighted average normal value

comes to ****$/MT.

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[PART I—Sue. 1]

Ex-factory export price

The Authority notes that the petitioner has provided the

weighted average CIF price of imports of subject goods from PR China

in POI. The petitioner has also claimed adjustments on ocean freight,

ocean insurance, commission, inland freight, port handling to ah extent

o f^****t^{**** ****^ ****} a n d^{****$/MT. The weighted average Ex-}

factory Export Price is considered at ****$/MT.

DUMPING-COMPARISON OF NORMAL VALUE AND EXPORT

PRICE

The rules relating to comparison provides as follows¹.

"While arriving at margin of dumping, the Designated

Authority shall make a fair comparison between the export

price and the normal value. The comparison shall be made at

the same level of trade, normally at ex-works level, and in

respect of sales made at as nearly possible the same time.

Due allowance shall be made in each case, on its merits, for

differences which affect price comparability, including

differences in conditions and terms of sale, taxation, levels

of trade, quantities, physical characteristics, and any other

differences which are demonstrated to affect

price

comparability."

The Authority has carried out comparison of weighted

average normal value with the weighted average ex-factory

export price for evaluation of dumping margin.

The clumping margin for the producers/exporters of the

subject goods in the subject countries are as under:--

Exporter/producers

Territory of European Union

AA/s Akzo Nobel Chemicals

S.p.A. Italy & M/s Akzo Nobel

Functional

Chemicals

BV,

Netherlands

All other exporters/producers

PR China

All exporters/producers

Normal value

($/MT)

*****

rt***

* * * *

Export price

($/MT)

*****

****

Dumping

margin(7o)

19.09

49.46

81.86

The above dumping margins are above the de-minimus limits

INJURY AND CAUSAL LINK

Under Rule 11 supra, Annexure-II, when a finding of injury

is arrived at, such finding shall involve determination of the injury

to the domestic industry, "

taking into account all relevant

facts, including the volume of dumped imports, their effect on

prices in the domestic market for like articles and the

consequent effect of such imports on domestic producers of such

articles...." In considering the effect of the dumped imports on

prices, it is considered necessary to examine whether there has

been a significant price undercutting by the dumped imports as

compared with the price of the like article in India, or whether

the effect of such imports is otherwise to depress prices to a

significant degree or prevent price increases, which otherwise

would have occurred, to a significant degree.

THE GAZETTE OF INDIA : EXTRAORDINARY

[PART I—Sfcc. 1]

For the examination of the impact of the dumped imports on

the domestic industry in India, indices having a bearing on the

state of the industry as production, capacity utilisation, sales

quantum, stock, profitability, net sales realisation, the magnitude

and margin of dumping, etc. have been considered in accordance

with Annexure H(iv) of the rules supra.

The following submissions have been made by various

interested parties

(a)

DOMESTIC INDUSTRY

(i)

The Designated Authority has already acknowledged the

injury caused to the domestic industry from the dumped

imports from European Union and China. We have already

provided detailed information to the Designated Authority,

which is not being repeated herein for sake of brevity,

which shows that the domestic industry has suffered

material injury from the dumped imports.

(ii)

The following parameters summarize injury to the domestic

industry:

(a)

Imports from each of the subject countries are more

than de-minimus.

(b)

The imports were only from the subject countries in

the period April 99 to June 2000

(c)

The imports from the subject countries have

increased in absolute terms.

(d)

The imports from the subject countries have

increased related to consumption of choline chloride

in India.

Market share of subject countries in

imports as well as demand has increased significantly

(e)

Export price from subject countries have declined

significantly

(f)

Though the petitioner has been able to maintain its

production, sales and capacity utilization, its share in

demand has not increased proportionately.

(g)

The imports have forced the domestic industry to

reduce its prices in spite of increase in the cost of

production. The imports are causing severe price

undercutting in the Indian market. The landed value

of the imported material is significantly below the

selling prices of the domestic industry.

(h)

The landed value of the imported material was

significantly below the cost of production and fair

selling price of the domestic industry and has

prevented the industry from recovering its cost of

production.

(iii) AW parameters collectively and cumulatively establish that

the domestic industry has suffered material injury from the

dumped imports.

In view of the foregoing, it is submitted that the

preliminary findings is required to be confirmed with regard to

injury and causal link.

M/s AKZO NOBLE

I. M/s Akzo Nobel strongly questions the reliability of data

that has been used in some parts of investigation. I t has

THE GAZETTE OF INDIA : EXTRAORDINARY

[PAR. I—SEC. 1]

been stated that the imports from European Union have

increased from 1.22 mt in 1998-99 to 636 mt in the period

of investigation.

As indicated in our export statistics,

imports in 1998-99 from AA/s Akzo Nobel have been higher

than stated. This means that the increase in volume of

imports and its increase in market share are not correct.

Consequently the injury to the domestic industry is not as

substantial as indicated in the findings.

I I . Based on the remarks made we can only observe that the

decision to instigate anti-dumping duties on choline chloride

is based on non-reliable or even incorrect information.

I I I . For that reason M/s /\kzo Nobel requests the Indian

Ministry of Commerce & Industry to reconsider the

instigation of anti-dumping measures as announced. At the

same time M/s Akzo Nobel shall investigate its position in

this matter under the pertinent international treaties.

IV. However, to ascertain the true picture of the petitioner,

the

accounts

M/s

Anichem

all

other

companies/divisions manufacturing agri-feed prior to the

amalgamation will need to be analysed.

Injury is not

apparent from the financial accounts on the contrary, high

profits are. I t is respectfully submitted that the Hon'ble

DA investigates the same in detail.

Further, from the preliminary findings, it is apparent

that the Hon'ble Designated Authority has not considered all the

parameters of the injury and causal link as per the Rules. The

WTO decision in the Bed Linen case is on point. I t is noteworthy

that the panel therein upheld the Indian Government view that all

the parameters contained in the Agreement on Dumping need to

consider in a finding of injury. I t is appropriate and just that the

Hon'ble Designated Authority follows the same even though it is

not binding upon the Designated Authority .

The

Authority after considering the above submissions

observes the following-

(i)

The Authority notes that the subject goods are imported

under customs tariff head 2309.1001 as "compound animal

feed" and under 2923.1001 as "Liquid Choline Chloride", The

nomenclature "compound animal feed" being a broad and

generic classification includes products other than subject

goods also. As there are only a few major importers of the

subject goods in the POI, the Authority has referenced the

export data as provided by M/s Akzo Nobel and port-wise

secondary source import data provided by the petitioner for

evaluation of total imports. In this regard the Authority

also notes that M/s Akzo Nobel in its response has

indicated that imports volume may be correlated with the

data provided by them.

(ii)

The Authority notes that the imports from China PR have

increased from 4 MT in 1998-99 to 25 MT (Annaulised-16.7

MT) in POI. The imports from territory of European Union

have increased from about 115 AAT in 1998-99 to about 343

MT (Annualised 228 MT) in POI. The percentage of imports

from Peoples Republic of China in the total imports

constitutes about 6.67% in POI whereas the imports from

territory of European Union constitutes about 83%

(iii)

The sales of the petitioner has increased from 852 MT

in 1997-98 to 3974 MT in POI (2650 MT annualised). The

market share of the petitioner has increased from

41.28% to* 62.6% in POI. The production has also

increased from 1196 MT in 1997-98 to 2792 MT in 1998-

99 and further 3874 MT in POI. The capacity utilisation

.1664 O1/20U1- 5

•

[

—

has also increased from 11.97% in 1997-98 to 33.15% in

POI.

(iv)

The demand of Choline Chloride has increased from

about 2064 MT in 1997-98 to about 6348 MT in POI.

Demand has, therefore not been a factor for cause of

injury to the Domestic Industry.

(v)

Though the market share, production and sales of the

petitioner have increased, the Authority notes that the

petitioner has been forced to sell the subject goods

below the Non Injurious Price (NIP) in the POI or\

account of price suppression caused by the dumped

imports from the subject countries, leading to un-

remunerative prices and consequentially financial losses.

The above factors collectively and cumulatively indicate

that the dumped imports have kept the domestic prices

depressed in the Indian market thereby causing injury to the

Domestic Industry by way of depressed Net Sales Realisation

leading to financial losses.

INDIAN INDUSTRY'S INTEREST & OTHER ISSUES

DOMESTIC INDUSTRY

The following submissions have been made:

(i)

STATE OF POULTRY FARM IN INDIA AND IMPACT OF

PROPOSED MEASURES

Whole argument made by the importer is related to

problems being faced by the poultry industry and threat of injury

to this industry from the recent liberalization step taken by the

Government. We submit that whole argument of the domestic

industry deserved to be ignored as the issue is beyond the scope

of the present investigations. The investigations In the present

case relate to Choline Chloride and not to the poultry farm

industry.

Notwithstanding above, we submit that imposition of anti-

dumping duty would not effect the poultry business, however, it

would lead to survival of whole Choline Chloride Industry as is

evident from the table below.

Recommended dose of Choline chloride / ton

of feed

Feed consumed during life cycle of chicken

Weight of chicken

Feed consumed per kg of chicken

Choline chloride consumed per Kg of chicken

Impact of anti dumping duty on the cost of

chicken (considering $ 272/ton on product

from European Union)

Cost of feed per Kg of chicken

Selling price of chicken

500

grams

3 kgs.

1.5 kgs

2 kgs.

lgm

Paise 1.2

Rs. 20

Rs.

40/Kg.

I t is evident from the above, impact of anti-dumping duty

would impact on Chicken for 1.2 paisa, which is minimal. Such

miniscule is the impact of the proposed measures that it can

hardly be argued that there could be any adverse impact on the

consumers.

(ii)

PUBLIC INTEREST:

With regard to public interest, it is submitted that the

prices of Choline Chloride in India were significantly higher

before VAM

came

into production. In fact, as argued in the

THE GAZETTE OF INDIA : EXTRAORDINARY

[PART I—SEC. 11

petition also, the export price declined as shown below:

Year

1997-98

1998-99

1999-00

2000-01*

US $ Per MT

. 734.99

699.34

606.44

570.11

The market price of Choline Chloride was as high as Rs. 70

per kg. before VAM came into production. The significant decline

in the export price is due to entry of V/\M in the production of

the subject goods. Thus, it is in the interests of the consumers

that unfair activities of the exporters are restricted so that VAM

continues to be in production and caters to the market.

Further, the Anti Dumping investigations being undertaken

by the Designated Authority are governed by the provisions made

under Customs Tariff Act, 1975 and Rules made thereunder. The

Designated Authority is not required to look into the issue of

public interest under these provisions. Moreover, in various

investigations, the Designated Authority held as under:

imposition of Anti Dumping Measures would remove

the unfair advantages gained by dumping practices, would

prevent the decline in petitioner

companies and maintain

availability of wider choice to the consumers of the product

under consideration. Imposition of Anti Dumping Duty would not

restrict

imports from the subject countries in any way, and,

therefore, would not affect the availability of the product to

the consumers".

Evidently, imposition of the proposed anti-dumping duty

would not be against the interests of the consumers and would not

be contrary to the public interest.

(iii) WRONGFUL PROTECT WOULD RESULT IN MONOPOLY:

I t is inappropriate to say that the imposition of anti-dumping

duty would result in monopoly to the petitioner. Firstly, we submit

that there are four producers of Choline Chloride in India.

Further, as also acknowledged by the Designated Authority in a

number of investigations so far, the purpose of imposition of Anti

Dumping Duty is not to restrict the imports. Its whole purpose is

to eliminate the dumping practice resorted by the exporters. In

various investigations, the Designated Authority held as under:

(iv) PUBLIC INTEREST IN WTO JURISPRUDENCE IN INDIA

I t is respectfully submitted that while the safeguard cases

are in no way binding upon the Hon'ble Designated Authority, it is

indicative of the analysis being made in this area of the law. With

utmost respect the dicta in the safeguard decision on phenol is

reproduced for the consideration of the Hon'ble Designated

Authority.

(ii)

Though the Designated Authority has already recommended

anti-dumping duty in terms of US$, it is submitted that the

final duties may also be recommended in terms of U5$ only,

so that erosion in the quantum of protection does not take

place on account of changes in the exchange rate.

(iii) The Designated Authority has clarified in the preliminary

findings

that

any

product

having

choline

chloride

concentration different from the specified concentration

would attract proportionate duty. However, it appears that

this aspect of the recommendation seems to have been

overlooked while imposing the duties. We request the

Designated Authority so suitably clarify to the Ministry of

Finance in this regard in the final findings.

THE GAZETTE OF INDIA ; EXTRAORDINARY

[PART I—SEC. 11

B. M/s Nav Maharashtra Chakan Oil Mills Ltd. Pune, M/s

Poultry Federation of India and M/s Compound Livestock Feed

Manufacturers

Association of India.

Bombay submits the

following:

(i)

I t is also a fact that most poultry farmers are in the

unorganized sector and cannot make their representations

in an organized manner, however, each one experiences the

pain of increasing cosis.

(ii)

Poultry farming is perhaps facing its most severe test in

India. Over capacity, coupled with the threat of low priced

imports coming in as a consequence of the recent

liberalization in import restrictions is putting severe

pressure on the industry.

(iii) The domestic Indian poultry farmer earns approximately

Rs.3 per chicken and 10 paisa per egg. The main cost

component for the Indian poultry farmer is the feed - it

amounts to over 70% of its cost. Maize, the main ingredient

of this fed has recently seen the customs duty increased in

the recent budget. With this grim situation, it is more than

likely that the feed supplements, which are dispensable in

comparison to the feed, will not be consumed.

(iv) I t is a matter of record that no new poultry farms have

come up in the past two years in the North of India. The

plight in the West and South is no better with 20/81

cooperative sector farms in Maharashtra having closed

down. Further, in the South there are severe worries about

the anticipated influx of imports of both chicken legs and

eggs. European countries are able to export eggs costing

Rs.3.5 to produce for Rs.1-1.50 to the Middle East.

(v)

The petitioner has already increased prices from Rs.38/- to

RS 48/- per kg after the imposition of preliminary duties in

this matter. The same is having a devastating effect on the

already burdened farmers.

(vi)

M/s Nav Maharashtra Chakan Oil Mills and M/s Compound

Livestock Feed Manufactures Association have indicated in

the submission in response to the disclosure statement that

submission on WTO jurisprudence in India has been

erroneously attributed to them.

(vii) In

response to the

disclosure

statement

M/s

Nav

Maharashtra Chakan Oil Mills and M/s Compound Livestock

Feed Manufactures Association have indicated that while

the Designated Authority appears to be sympathetic to the

plight of the consuming industry, by relying upon the

petitioner's data for non-cooperating exporters and thus

inflating the dumping margin, all possibility of no or low

duties on the allegedly dumped product will be impossible.

I t is respectfully submitted that not only must the lesser

duty rule be followed, the discretion vested in the

Designated Authority must be exercised in a manner which

although does not put a premium on non-cooperation, it does

not overly burden an already burdened consuming industry,

at the grass roots of the Indian economy.

(viii) M/s Nav Maharashtra Chakan Oil Mills and M/s Compound

Livestock Feed Manufactures Association have indicated in

response to the disclosure statement that they without

accepting the analysis on the impact on the industry made

by the petitioner, it would like to point out that the poultry

industry is going through a very trying period.

Poultry

farmers are faced with imports of chickens.

Profits on

chickens, as well as eggs are under tremendous pressure.

Any increase in costs will have a domino and spiraling effect

THE GAZETTE OF INDIA : EXTRAORDINARY

[PART I—SEC. 11

on the plight of the farmer. In fact other feed inputs of

the poultry industry have been subjected to Anti Dumping

Duty in this forum.

M/s Akzo Nobel. Netherlands has made the following

submissions:-

We would be interested in a price undertaking mechanism in

respect of this investigation.

EXAMINATION BY AUTHORITY

The Authority notes the submissions made by the user

associations on the likely impact on the poultry industry. The

Authority in this regard notes that the incidence of cost of the

subject goods in the overall feed cost is quite low and therefore

the impact of anti dumping duty on the user industry would not be

significant. Moreover the Authority has recommended levy of

definitive anti dumping duty on the basis of the injury margin

wherever it was lower than the dumping margin. Therefore it is

only the extent of injury on account of dumping which has been

redressed by the Authority. The Authority notes that after l^/s

Akzo Nobel, the exporter of the subject goods for from

Netherlands had indicated desire to file a price undertaking, it

was provided an opportunity to offer the same in the disclosure

statement.

The exporter has not filed any response to the

disclosure statement. Despite the impact of anti dumping duty on

the price levels as indicated above, the Authority holds that the

purpose of anti-dumping duties, in general, is only 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.

The Authority recognises that the imposition of anti-

dumping duties might affect the price levels of the products

which manufactured/produced with the usage of the subject

goods and consequently might have some influence on relative

competitiveness and price levels of these products. However, fair

competition in 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 the

dumping practices and would prevent the decline of the domestic

industry and help maintain availability of wider choice of the

subject goods to the user industry and the

consumers.

Imposition of anti-dumping measures would also not restrict

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

would not affect the availability of the products to the

consumers.

LANDED VALUE

The landed value has been determined for the subject

goods after adding on weighted average CIF export price, the

applicable level of custom duties (except duties levied under

Section 3, 3/\, 8B, 9, 9/\) and one percent towards landing

charges.

3664C',!'2O01

THE GAZETTE OF INDIA : EXTRAORDINARY

[PART 1—SEC. 1]

CONCLUSIONS:

I t is seen, after considering the foregoing that:

(a)

The subject goods in all forms originating in or exported

from the subject countries have been exported to India

below its normal value.

(b)

The domestic industry has suffered material injury by way

of depressed Net Sales Realization (NSR) on account of

price suppression caused by low landed prices of the dumped

subject

goods from the subject

countries

leading to

financial losses.

(c)

The injury has been caused to the domestic industry by

dumping of the subject goods originating in or exported

from the subject countries.

The authority recommends

anti-dumping duty on imports of all forms/concentration of

subject goods falling under Chapter 23 and 29 originating in

or exported from the subject countries.

(d)

I t was considered to recommend the amount of anti-

dumping duty equal to the margin of dumping or less so as to

remove the injury

caused to the domestic

industry.

Accordingly, it is proposed that definitive anti dumping

duties as set out below be imposed, by the Central

Government on all forms, grades and concentration of

subject goods originating in or exported from territory of

European Union and Peoples Republic of China falling under

Chapter 23 and 29 of the Customs sub-heading 2309^001

and 2923.1001 of the Customs Tariff.

SI.

No..

Name of the

exporter/producer

Territory of European

Union

M/s Akzo Nobel Chemicals

S.p.A, Italy and m/s Akzo

Nobel Fucntional Chemical

BV. Netherlands

All other

exporters/producers

PR China

All exporters/producers

Product

Choline chloride 60%

concentration on any carrier

Chloline chloride 100%

concentration on any carrier

Chloline chloride 50%

concentration on any carrier

Chloline chloride 70%

concentration on any carrier

Choline chloride 60%

concentration on any carrier

Choline chloride 100%

concentration on any carrier

Choline chloride 50%

concentration on any carrier

Choline chloride 70%

concentration on any carrier

Choline chloride 60%

concentration on any carrier

Choline chloride 100%

concentration on any carrier

Choline chloride 50%

concentration on any carrier

Choline chloride 70%

concentration on any carrier

Amount of

Duty

(US$/MT))

102.9

171.5

85.75

120.05

208.1

346.8

173.4

242.8

293.6

489.33

244.7

342.5

(e)

As noted by the Authority in foregoing para C(l), the subject

goods are available on different carriers with different

concentration. The anti-dumping duties as

set out in Para D(d) are

THE GAZETTE OF INDIA : EXTRAORDINARY

[PART I—SEC. 11

recommended for 50%, 60%, 70% and 100% concentration of

subject goods in any form and on any type of carrier viz. corn

cob base, vegetable base or silica base. The amount of anti

dumping duty would be determined proportionately for any other

extent of concentration of the subject goods i.e. 40% Choline

Chloride would attract duties of 68.6$/MT, i.e. 40% of the duty

prescribed for 100% Choline Chloride in respect of M/s Akzo

Nobel Chemicals S.pA, Italy and to/s Akzo Nobel Fucntional

Chemical BV, Netherlands.

(f)

Subject to above, the Authority confirms the preliminary

findings dated 22.2.2001

(#-) An appeal against this order shall lie to the Customs, Excise,

Sold (Control) Appellate Tribunal in accordance with the Act

supra.

L. Y- SAPTHARISHI. Designated Authority and Addl. Secy.

Printed by the Manager, Govt. ot India Press, Ring Road, Mayapurl, New Delhi-110064

and Published by the Controller of Publications, D»lhl-110054 — 2001