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MINISTRY OF COMMERCE AND INDUSTRY

(Department of Commerce)

(DIRECTORATE GENERAL OF ANTI-DUMPTNG AND ALLIED DUTIES)

NOTIFICATION

New Delhi, the 12th August, 2002

Subject: Anti-dumping investigation concerning imports of Acrylic Fibre (below 1.5 denier)

originating in or exported from Italy—Final Findings.

No. 43/1 /2001-DGAD.—Having regard to the Customs Tariff Act, 1975 as amended in 1995 and

the Customs Tariff(Identification, Assessment and Collection of Anti-Dumping Duty on Dumped Articles

and for Determination of Injury) Rules, 1995, thereof.

PROCEDURE:

The procedure described below has been followed with regard to the investigations:—

(i) The Designated Authority (hereinafter referred to as Authority), under the above Rules, received

a written petition from the Forum of Acrylic Fibre Manufacturers, New Delhi on behalf of the

domestic industry duly supported by the following producers namely M/s. Indian Acrylic Ltd ,

Chandigarh, M/s Consolidated Fibre and Chemicals Ltd., Calcutta, M/s. Pasupati Acrylon Ltd ,

New Delhi alleging dumping of Acrylic Fibre (below 1.5 Denier) (hereinafter referred to as subject

goods) originating in or exported from Italy (hereinafter referred to as subject country):

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|PARI I—Sir, 1]

(ii)

The Authority notified the Embassy of Italy in India about the

receipt of petition made by the petitioners before proceeding to

initiate the investigation in accordance with sub rule (5) of Rule

5 supra;

(iii)

The Authority on the basis of information and evidence available

before it decided to initiate anti dumping investigations against

imports of subject goods from the subject country;

(iv)

The Authority issued a Public Notice dated the 28^(h August,

2001 published in the Gazette of India, Extraordinary, initiating

anti dumping investigations concerning imports of subject goods

from subject country, falling under Chapter Heading 5501.3000

6 5503.3000 of Schedule I of the Customs Tariff Act.

(v)

The Authority notified preliminary findings vide notification

dated 6^th December, 2001 on anti-dumping

investigation

concerning imports of subject goods from Italy and requested the

interested parties to make their views known in writing within

forty days from the date of its publication;

(vi)

The Authority 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 from

the date of its publication;

(vii) The Authority also forwarded a copy of the preliminary findings

to the Embassy of Italy in New Delhi with a request that the

exporters and other interested parties may be advised to furnish

their views on the preliminary findings in the time frame as

stipulated in (v) and (vi) above.

(viii) The Authority provided an opportunity to the interested

parties to present their views orally on 27.03.2002.

All

parties presenting views were requested to file written

submissions of their views expressed.

The parties were

advised to collect copies of the views expressed by the

opposing parties and offer rebuttals, if any;

(ix)

The Authority made available the public file to all interested

parties containing non-confidential version of evidence

submitted by various interested parties for inspection, upon

request;

(x)

Arguments made by the interested parties before announcing

the preliminary findings, which have been 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 these findings;

(xi)

In accordance with Rule 16 of the Rules supra, the essential

facts/basis considered for these findings were disclosed to

known interested parties on 10.5.2002 vide a disclosure

statement

and comments received on the same have also

been duly considered in these findings;

(xii) The investigation covered the period from 1^st April, 2000 to

31^sl March, 2001.

(xiii) ***** in this notification represents information furnished by

the interested putty on confidential basis and so considered

by the Authority under the Rules;

THE GAZETTE OF INDIA: EXTRAORDINARY

[PART I—SEC. 1]

VIEWS

PETITIONERS,

EXPORTERS,

IMPORTERS AND OTHER INTERESTED PARTIES

AND EXAMINATION BY 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 paragraphs herein

below to the extent these are relevant as per rules and have a

bearing upon the case.

The arguments raised by the

interested parties have been examined, considered and,

wherever appropriate, dealt in the relevant paragraphs herein

below. The Authority confirms, in the absence of any

response from the exporters in the form and manner

prescribed and having made the findings on the basis of the

best information available to it as per rule 6(8) supra.

PRODUCT UNDER CONSIDERATION AND LIKE

ARTICLE

Product under consideration in the present investigations is

Acrylic Fibre below 1.5 denier ( 1.65 DX). Acrylic Fibre is a

long chain of synthetic polymer composed of at least 90% by

weight of Acrylonitrile units. Acrylic fibre can be acrylic

staple fibre, acrylic tow or acrylic top. Acrylic staple fibre,

acrylic tow and acrylic top are known as acrylic fibre in the

commercial parlance. Acrylic Fibre is produced in various

grades, which are defined in terms of its Denier, however,

below

1.5

denier (1.65 DX) is the product

under

consideration in the present petition as 1.5 to 8.0 denier are

already attracting Anti Dumping Duty.

Denier is the international system to differentiate on Fibre

type to another and is used in describing acrylic Fibre, silk

and man-made filament yarn. Acrylic Fibre is an economical

substitute for expensive wool. Acrylic Fibre is classified

under Chapter 55 of the Custom Tariff Act under sub-heads

5501.3000, 5503.3000. Custom classifications are, however,

indicative only and are in no way binding on the scope of the

present investigation.

Like Article:

The petitioners have claimed that the

goods

produced by them is like articles to the goods

produced, originating in or exported from Italy. Therefore,

for the purpose of the present investigation, the goods

produced by the petitioners are being treated as 'like article'

of the product involved i.e. Acrylic Fibre (below 1.5 denier)

imported from the subject country within the meaning of the

Rules supra.

DOMESTIC INDUSTRY:

As per Rule 2(b) of the Anti Dumping Rules, "domestic

industry means the domestic producers as a whole engaged

in the manufacture of the like article and any activity

connected therewith or those whose collective output of the

THE GAZETTE OF INDIA: EXTRAORDINARY

[PART I—SEC. 1]

said article constitutes a major proportion of the total

domestic production of that article except when such

producers are related to the exporters or importers of the

alleged dumped article or are themselves importers thereof in

which case such producers shall be deemed not to form part

of domestic industry."

The definition of domestic industry given above is further

clarified by Article 5.4 of WTO Anti Dumping Agreement

which reads as follows:

The application shall be considered to have been

made 'by or on behalf of the domestic industry' if it is

supported by those domestic producers whose collective

output constitutes more than fifty percent of the total

production of the like product produced by that portion of the

domestic industry expressing either support for or opposition

to the application.

However, no investigation shall be

initiated when domestic producers expressly supporting the

application account for less than 25% of the total production

of the like product produced by the domestic industry. "

The petition has been filed by Forum of Acrylic Fibre

Manufacturers, New Delhi duly supported by the following

producers namely M/s. Indian Acrylic Ltd., Chandigarh, M/s.

Consolidated Fibre and Chemicals Ltd., Calcutta and M/s.

Pasupati Aery Ion Ltd., New Delhi, on behalf of the domestic

industry.

The examination of the production figures of

the petitioners by the Authority has determined that the

petitioners account for more than 50% proportion of total

Indian Production and therefore have a standing to file the

petition on behalf of domestic industry under the Rules

above said.

DUMPING

Normal Value : As brought out in the preliminary findings,

the Designated Authority sent questionnaires to known

exporter of the subject goods in Italy. The Authority wrote to

the Embassy of Italy in India also with a request to advise the

exporter from Italy to respond to the Authority. The exporter

from Italy did not respond to the Authority and has not

furnished any further information after preliminary findings

and the disclosure statement.

The Authority recalls its

preliminary findings as regards normal value. The exporter,

M/s. Monte Fibre, Italy had merely filed a statement showing

transaction-wise exports of the subject goods in the

investigation period. No information had been furnished in

respect of Annexures - 1, 3, 4, 5, 6, 7, 8, 9 & 10 of the

Exporter Questionnaire.

In the absence of

information

relating to sales of subject goods in the home market of the

exporter and whether such domestic sales are in the ordinary

course of trade, the Authority has to rely on the best available

information as per Rule 6 (8) of the Anti Dumping Rules.

No response

has been received from The international

Rayon & Synthetic Fibers committee by the name "COMITE

INTERNATIONAL DE LA RAYONNE ET DES FIBERS

SYNTHETIQUES' (CIFRS) after preliminary findings and

2516GI/2002—3

]8_

THE GAZETTE OF INDIA EXTRAORDINARY

|PAKTI—S&-. 1|

the disclosure statement. Thus the exporter from Italy has

preferred non- cooperation with the Designated Authority in

this case. Thus Rule 6(8) is attracted and the Designated

Authority is fully justified in proceeding with the best

information available. The Authority, therefore, holds that

the exporter from Italy has not cooperated with the Authority

as envisaged under the Rules. The domestic industry has

furnished information with regard to the normal value in

Italy based on the selling price at which subject goods have

been sold in the domestic market

the

exporter's

country.

view

non-cooperation/insufficient

information

produced

the exporter from Italy, the

Authority has determined normal value in Italy on the basis

of available information with regard to selling price in the

home market of the exporter.

Export Price: The exporter M/s. Monte Fibre, Italy has filed

information with regard to its exports to India. Analysis of

this information

shows that the information is reasonably

sufficient, at least for the purpose of arriving at export price,

even though the authority notes that the exporter has not

disclosed any adjustments with regard to inland freight and

port expenses.

The exporter has sold ***** MT Acrylic

Fibre of subject description in the investigation period at an

average CIF price of ••***. , The exporter has shown

adjustments on account of

ocean freight, insurance and

commission. The authority has determined ex-factory export

price on the basis of the information provided by the

exporter. Adjustments claimed by the exporter have been

allowed. Adjustment on account of inland freight @ 1% in

the Export Price have also been allowed.

Dumping

Margin:

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.

The normal value works out to US$ ***** per Kg. The net

export price worked out as above comes to US$ ****per Kg.

The authority confirms the preliminary findings regarding

determination of dumping margin for other non- cooperating

exporters based on the normal value assessed for the

responding exporter and the lowest export price admitted by

the exporter. The dumping margin for exports of the subject

goods from Italy in respect of M/s Montefibre comes to

25.07% and for all other exporters/producers from Italy

comes to 34.45%.

INJURY AND CAUSAL LINK

10.

The Authority took into account all indices regarding injury

while doing the final determination.

This involved all

relevant parameters viz., volume of dumped imports and

their effect on price in the domestic market

and

its

consequent

effect

domestic

producers in terms of

parameters mentioned in Annexure II para 4 of the Rules

such as natural and potential decline in sales, profits, output

market share, productivity,

return on investments

utilization of capacity; factors affecting domestic prices, the

magnitude of the margin of dumping; actual and potential

negative effects on cash flow inventories, employment,

wages, growth, ability to raise capital investments etc. While

determining the non-injurious price for the like article for the

_ _ _ _

THE GAZETTE OF INDIA: EXTRAORDINARY

[PART I—SEC lj

domestic industry, the Authority considered the optimum

cost of production for the domestic industry taking into

account, the normated best consumption norms and the

actual price of the raw materials during the POI which we"t

into the production of the product under consideration. Also,

while arriving at the injury margin, the Designated Authority

took into account optimum capacity utilization for arriving at

a fair selling or non-injurious price. Authority also holds that

analysis of various parameters affecting domestic industry

would be more appropriate by comparing performance in the

investigation period with reference to immediate preceding

years, particularly when the imports have started in the

investigation period itself. The Authority has carried out a

detailed examination of the domestic industry to arrive at non

injurious price. While arriving at non injurious price, the

Authority has done appropriate analysis of the relevant

factors such as usage of raw material and utilities, expenses

incurred by the domestic industry during the period of

investigation. Verification at premises of the domestic

industry has been done to the extent required.

With regard to injury to the domestic industry, the Authority

have examined detailed information provided by the

domestic industry during the course of the investigation,

which shows that the domestic industry has suffered material

injury from the dumped imports of the product under

consideration from Italy. While the Authority has examined

all parameters mentioned in Annexure II of the Rules,

however, some of the relevant parameters, which shows

injury are discussed in detail as under:

(i)

The capacity utilization of the domestic industry has

declined from 93.07% in 1999-2000 to 84.03% in the

investigation period due to decline in production.

(ii)

Acrylic Fibre is being dumped in India by a number of

countries, which includes Italy. The Authority is

conducting

investigation

against

Italy,

separate

investigation against UK, Germany,

Brazil and

Bulgaria and Sunset review investigation against USA,

Korea RP and Thailand. The investigation period in

these three investigations is same. Annexure II of the

Rules clearly provide about cumulation of Injury in

case, the injury to the domestic industry is being

caused from more than one source at the same time,

therefore, the injury is being examined cumulatively in

accordance to the Rules.

(iii)

Till 1999-2000, sales volume of the domestic industry

has been increasing. However, sales volume declined

from 70591 MT in 1999-00 to 59119 MT in the

investigation period. Further, the domestic industry has

been selling its material at a price, which do not permit

recovery of even cost of production.

(iv)

Since last few years, the domestic industry has not

been able to make profits due to dumping of the

product from one after another countries, which

includes subject countries also. The losses of the

domestic

industry

steeply

increased

the

investigation period from -100 (indexed) in 1997-98 to

-373 (indexed) in the investigation period.

THE GAZETTE OF INDIA EXTRAORDINARY

[PART I—She. 1]

(v)

The imports shown from all countries are imports of

below 1.5 denier as well as above 1.5 denier. The

domestic

industry

had

earlier complained

about

dumping from Italy, which resulted in imposition of

anti dumping duty on imports from this Country. This

resulted in decline in the import volumes from Italy.

However, with the imposition of anti dumping duty on

acrylic fibre above 1.5 denier, dumping of acrylic fibre

below 1.5 denier has started which resulted in increase

in market share again from 0.55% (99-00) to 1.03%

(2000-01). The entire imports from Italy are now that of

acrylic fibre below 1.5 deniers to circumvent the duty.

(vi)

The productivity per employee declined in comparison

to previous year, in the investigation period due to steep

decline in the production, in spite of reduction in the

number of employees.

(vii) The return on investment declined in the investigation

period due to losses faced by the domestic industry in

this period. The return on investment for the domestic

industry continues to remain negative in spite of

imposition of anti dumping duty on a number of

sources.

(viii) The landed value of imported material from various

sources including Italy is significantly below the selling

price of the domestic industry causing severe price

undercutting in the Indian market. The domestic

industry has been forced to match the lowest price of

imports in the market

(ix)

The landed value of the imported material is below

cost of the domestic industry causing severe price

suppression and depression in the Indian market.

(x)

The cash flow was negative in 98-99 which became

positive in 99-00 . However, the cash flow was again

negative in the investigation period.

(xi)

The level of stocks with the domestic industry

increased during POI in comparison to previous year

in spite of reduction in production by the domestic

industry.

(xii) The domestic industry is being forced to resort to

curtailment of employment due to continued financial

losses and negative cash flow.

(xiii) Due to the prevailing regulations, the domestic

industry has to increase the wages causing further

impact on profits.

(xiv) Enhancement of capacity by de-bottlenecking with a

view to reduce the incidence of fixed costs has not

helped the domestic industry during the period of

investigation.

All above parameters cumulatively show that the domestic

industry has suffered m^erial injury from the dumping of

subject goods from Italy.

THE GAZETTE OF INDIA: EXTRAORDINARY

[PART I—SEC 1J

12.

Causal Link : In determining whether material injury to the

domestic industry was caused by the dumped imports, the

Authority took into account the following facts:-

(i)

Exports of Acrylic Fibre below 1.5 denier after imposition of

Anti dumping Duty on imports of acrylic Fibre above 1.5

denier indicates an attempt to continue dumping in the Indian

market even after imposition of Anti Dumping Duties.

(ii)

Significant increase in imports of subject goods from Italy at

dumped prices, coupled with dumped exports from Other

Countries being investigated by the Authority, prevented the

domestic industry from effecting legitimate price increases,

resulting in significant increase in losses in the investigation

period.

(iii)

Exports of acrylic Fibre from Other Countries are also at low

prices. However, the Authority is separately investigating

these exports to examine whether these were also at dumped

prices and caused material injury to the domestic industry.

There is no other parameter other than dumped imports from

Subject Countries and Other Countries brought to the notice

of the Authority which would have caused material injury to

the domestic industry.

(iv) The landed price of imports from Italy was below the selling

price of the domestic industry. As a direct consequence, the

domestic industry was forced to reduce the prices.

The imports from Italy forced the domestic industry to sell

the product at prices below its cost of production and non-

injurious price.

vi)

The price undercutting which the domestic industry has faced

from the dumped imports has directly resulted in significant

financial losses to all domestic industry.

vii)

Demand of the product has not shown a declining trend.

Further, no arguments with regard to technological

upgradation, etc. have been brought out by any opposing

interested party.

13.

The substantial increase in import of subject goods from Italy

at low price which is not sufficient to recover full cost of

production resulting in severe price undercutting clearly

establishes the causal link between the injury already

suffered as well as threat of further injury being faced by the

domestic industry with the phenomena of dumping of subject

goods from Italy in a very short period. The Authority,

therefore, confirms its conclusion in preliminary findings that

there is an obvious causal link between the dumping of

subject goods from Italy and the injury being caused to the

domestic industry during the period of investigation.

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THE GAZETTE OF INDIA: EXTRAORDINARY

| PART I—Srv 1|

INTEREST OF INDIAN INDUSTRY AND OTHER

ISSUES:

14.

It has been argued by some of the importers and users that the

interest of the users of Acrylic Fibre (below 1.5 denier) should

be taken into account while imposing anti dumping duty. They

have requested to reconsider the imposition of anti dumping

duty on Acrylic Fibre (below 1.5 denier) from Italy since the

threat of imports serves as a check on the prices of the local

producers.

15.

In this context the Authority reiterates paragraphs 30 and 31 of

its preliminary findings wherein it is stated that the purpose of

anti dumping duties in general is to eliminate dumping which

is causing injury to the domestic industry and to re-establish a

situation of open and fair competition in the Indian market

which is in the general interest of the country. The Authority

recognizes that the imposition of anti dumping duties might

affect the price levels of the products manufactured using

Acrylic Fibre (below 1.5 denier) 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 Italy

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.

_27

16.

Evidently, imposition of anti dumping duty would not

adversely affect the consumers/users of Acrylic Fibre (below

1.5 denier) in India in the long run. It would rather lead to

survival of domestic industry and keep wider choice to the

consumers in India. The very purpose of the imposition of

anti dumping duty is to create situation of fair competition in

the Indian market in which both domestic producers and

foreign producers can compete. Imposition of anti dumping

duty would not lead to restriction on imports in any way.

FINAL FINDINGS

17.

The Authority has, after considering the foregoing, come to

the conclusion that:

(i)

Acrylic Fibre (below 1.5 denier) has been exported to

India from Italy below its normal value;

(ii)

The Indian industry has suffered injury;

(iii)

The injury has been caused by the dumped imports

from Italy;

18.

The Authority proposes to recommend the amount of anti-

dumping duty equal to the margin of dumping or less, which

if levied, would remove the injury to the domestic industry.

For the

purpose of determining injury,

the landed

price of imports has been compared with the non injurious

THE GAZETTE OF INDIA , EXTRAORDINARY

[PART I—SEP. 1J

selling price of the petitioner companies determined for the

period of investigation.

Landed value of imports for the

purpose has been determined as the assessable value as

determined by the Customs under the Customs Act, 1962 and

all duties of customs except duties under sections 3, 3A, 8B,

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

19.

The Authority recommends imposition of definitive anti

dumping duty on all imports of Italy Acrylic Fibre (below

1.5 denier) from Italy

falling under Custom Heading 55.

The anti dumping duty shall be as in Col 3.in the following

table:

Sl.No Exporter/Producer

Anti

Dumping

Duty US $ per Kg

(1)

(2)

(3)

Montefibre, Italy

0.32 US $ per Kg.

All

Other

Exporters/ 0.41 US $ per Kg.

producers from Italy

20.

Subject to the above, the Authority confirms the preliminary

findings dated 6^th December, 2001.

21.

An appeal against this order shall lie before the Customs,

Excise and Gold (Control) Appellate Tribunal in accordance

with the Act, supra.

L V SAPTHARISHI, Designated Authority

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