•

[

—

]

(iv)

The Authority issued a Public Notice dated 28^th August, 2<

published in the Gazette of India, Extraordinary, initiating anti dump

investigations concerning imports of subject goods from subject country, fall

under Heading 5501.300 & 5503.30 of Schedule I of the Customs Tariff Act.

(v)The Authority notified preliminary findings vide notification dated

December, 2001 on anti-dumping investigation concerning imports of subj

goods from UK, Germany, Brazil and Bulgaria and requested the interes

parties to make their views known in writing within forty days from the date

its publication;

(vi)

The Authority forwarded a copy of the preliminary findings to

known interested parties, who were requested to furnish their views, if any,

the preliminary findings within forty days from the date of its publication;

(vii)

The Authority also forwarded a copy of the preliminary findings to

Embassies of UK, Germany, Brazil and Bulgaria in New Delhi and to

Delegation of the European Commission in India.

(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 8.8.2002 vide a disclosure statement and comments received on

the same have also been duly considered in these findings;

THE GAZETTE OF INDIA EXTRAORDINARY

[PART I—SEC. 11

(xii)

The Authority also provided an opportunity of one-to-one hearing to

the Associations of the user Industry.

(xiii)

The investigation covered the period from 1^st April, 2000 to 31^st

March, 2001.

(xiv)

***** in this notification represents information furnished by the

interested parties on confidential basis and so considered by the Authority

under the Rules;

B. VIEWS OF PETITIONERS, EXPORTERS, IMPORTERS AND

OTHER

INTERESTED

PARTIES

AND

EXAMINATION

AUTHORITY.

3. 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.

C. PRODUCT UNDER CONSIDERATION AND LIKE ARTICLE

4. The product under consideration in this investigation is Acrylic Fibre.

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. All the three forms are the subject matter of this

investigation. Acrylic Fibre is classified in chapter heading 55.01 and 55.03.

The product is classified under 5501.30 and 5503.30 under the Customs

Tariff Act at six digit levels and under 5501.3000 and 5503.3000 under ITC.

The present investigations were in respect of the product under consideration

irrespective of the classification under which they are imported. Customs

classification is indicative only and is in no way binding on the scope of the

present investigation.

Subsequent to the issue of disclosures Ludhiana

Spinners Association has argued that the Authority is considering Acrylic

Fibre, Tow and Tops for the investigation and the customs authorities do not

consider on similar lines. The Association has further prayed that before

considering all the three forms of Acrylic Fibre, the customs authorities may

also confirm that Acrylic Fibre can be Acrylic Fibre, Acrylic Tow and

Acrylic Top. Till such time this is done the anti-dumping duty may be

limited to Acrylic Fibre only.

The Authority finds that the Ludhiana

Spinners Association had not made any arguments on the product under

consideration in any of their earlier submissions after initiation of

investigation or after preliminary findings or after the oral hearing so that

submissions made by them could be made available by the Authority to the

other interested parties to offer their views or rebuttals. Therefore the

Authority views that these arguments have been made at a very delayed

stage. Nonetheless, the Authority holds that the arguments made by the

Ludhiana Spinners Association is not acceptable and confirms the

preliminary findings as regards product under consideration.

5. Like Article:

The petitioner claimed that the goods produced by them are like articles to

the goods originating in or'exported from subject counties. None of the

interested partiers who have responded to the investigation has disputed that

Acrylic Fibre exported by the subject countries and Acrylic Fibre produced

by the domestic industry are like article. Thus, the Authority confirms that

Acrylic Fibre being produced by the domestic industry is like article to the

product under consideration.

D. DOMESTIC INDUSTRY:

6. The petition has been filed by Forum of Acrylic Fiber Manufacturers,

New Delhi on behalf of the domestic industry. The following producers of

acrylic Fibre in India had specifically consented to participate in the present

Anti-dumping investigations.

a) Indian Acrylics Limited,

b) Consolidated Fiber and Chemicals Limited,

c) Pasupati Acrylon Limited,

The above-mentioned companies provided all information required for the

purpose of the present investigation and had offered themselves for

information and verification.

Views of Ludhiana Spinners Association:

7. It has been argued by Ludhiana Spinners Association that the production

figures for the domestic industry is distorted as it does not include production

of all the Indian producers.

Views of Indian Spinners Association

THE GAZETTE OF INDIA EXTRAORDINARY

[PART I—SFC 11

8. Indian Spinners Association has argued that while the petition for

imposition of anti-dumping duty may be filed by the requisite percentage of

the industry, the impact of imports has to be studied for all the domestic

producers taken together. The method of pick and choose followed by the

domestic producers is not fair and proper.

Examination by the Authority

9. The Authority finds that the share of three petitioner companies accounts

for 61% of total Indian production of subject goods including the production

of M/s. Vardhman Acrylics Ltd., who are an importer of subject goods.

After excluding the production of M/s. Vardhman Acrylics Ltd., from the

total Indian production, the share of the three petitioner companies is 73.85%

of the Indian production.

10. 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 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." As the petitioners account for a major proportion

of the total Indian production of subject goods, i.e. more than 50%, the

Authority is of the view that the petitioners be treated as 'domestic industry'

within the meaning of Rule 2(b) supra.

E. EXAMINATION OF ISSUES RELATED TO NORMAL VALUE,

EXPORT PRICE AND DUMPING

11.

Views of the domestic industry

The Designated Authority sent questionnaire to the known

exporters/producers in Brazil, Bulgaria, Germany and UK. A few exporters

responded to the Authority. However, responses filed by all exporters are

grossly insufficient and inadequate, as held by the Designated Authority in

the preliminary findings. None of the exporter have furnished any additional

information to the Designated Authority. Therefore, the responses of the

exporters should be rejected for the final determination. The Authority

would be justified in proceeding with the best available information in

accordance with the Rules.

12.

Views of Indian Spinners Association

Indian Spinners Association has expressed the following views:

(i)

Normal value determination on the basis of one transaction is not

correct. This could be unusual transaction.

(ii)

CRFIS situated in Brussels have informed that US $ 2.67 is price for

speciality product. This information should not be rejected.

(iii) Normal value for Germany US $ 1.66, if found as correct then normal

value in UK can not be US $ 2. 67 in any case. This shows false claim

by the domestic industry.

(iv)

Normal value for Germany is also determined on the basis of one

single transaction, which is not correct.

(v)

Information supplied by exporters from Bulgaria should be taken into

consideration as a guideline. The cost route adopted to arrive at

normal value is replete with guess work.

(vi)

As regards

Brazil, there is no clue, how petitioner worked out

conversion cost, power cost, labour cost and financial cost etc. and

therefore the calculation of normal value should not be accepted.

(vii) As regards export price the Authority has allowed standard

adjustments on account of freight, insurance, commission, inland

freight and port charges. The Authority should consider the incidence

of actual costs on account of these adjustments.

13.

Submissions made by Ludhiana Spinners Association:

(i) The contention of the domestic producers regarding dumping by exporters

from the four countries under reference is untenable as the goods have been

supplied by the producers from these countries at the normal price. The

price at which the exporters have supplied goods to importers in our country

is based on their huge modern plants, cost awareness and efficiency.

(ii)

For normal value determination solitary transaction should not form

the basis. The type of goods exported is also of better quality and not

of normal Acrylic Fibre.

(iii)

Normal value should not be determined on the constructed cost.

Authority may use services of Indian Missions in these countries

Examination by the Authority

2695 G1/2002—4

THE GAZETTE OF INDIA: EXTRAORDINARY

[PART I—SEC. 1]

14. Normal Value :

As brought out in the preliminary findings, the Designated Authority sent

questionnaires to known exporter of the subject goods in the subject countries.

The Authority had infonned the Embassies of subject countries in India with a

request to advise the exporters from these countries

to respond to the

Authority.. Respiases had been received from the following exporters/

exporters' organization:

(i)

AcordisUKLtd.,UK.

(ii)

M/s. Lukoil Oil Company, Bulgaria.

(iii)

DuPont Deutschland Holding GmbH & Co. KG,

Germany.

(iv)

Dralon GmbH - Bayerwerk, Germany,

(v)

International Rayon and Synthetic Fibres Committee

(vi)

(CIRFS), Brussels.

These responses had been dealt with appropriately at the preliminary findings

stage. The Authority had informed the Embassies of the subject countries and

the Delegation of the European Commission in India of the preliminary

findings.

15.

Subsequent to the preliminary findings following responses have been

received:

(i)

M/s Lukoil Bulgaria have reiterated that their export of Acrylic

Fibre to India has been done via a trader located in Great

Britain who actually sold the fibres to Indian end-users at prices

higher than those mentioned in their earlier response.

(ii)

M/s. Acordis UK informed that they are in the process of

submitting price undertaking. However, the Authority has not

received any complete price undertaking on the proforma sent

to the exporter mentioning the actual export price of subject

goods offered by the exporter in order to enable the Authority

to take a view in the matter.

(iii)

iv>/s Markische Faser AG, Germany have informed that they

iidve closed the production of Acrylic Fibre in September 2000.

(iv) The Embassy of the Federative Republic of Brazil has made

following submissions subsequent to their disclosures:

a) The Government of Brazil, as an interested party in the

investigation, would like to assert that the report divulged does not

contain the essential facts under judgment, which would

substantiate a decision by the investigating authority. Those facts

are equally absent from the report and the preliminary notification

of injury, issued on December 7^th 2001.

b) Those essential facts, as per article 69 of the WTO Anti-Dumping

Agreement, henceforth referred to as "WTO Agreement", should

have been determined by the Anti-dumping

investigation

undertaken to determine injury and causal relation.

c) As per Article 2 of WTO Agreement, the methodology employed

to determine normal value, export price and dumping margin,

should have been disclosed and so should the respective elements

and values.

d) The volumes per origin and the cumulative evaluation of the

effects of imports, as of convenience, are not to be found, and

neither is data concerning competition between imports from

different sources and the national production, as per articles 3.2,

3.3. and 5.8 of the WTO Agreement.

e) As per article 4 of the same agreement, accurate <? *,e on the

volume of production of the petitioner companies and those

supporting them should have been disclosed, as well as data

pertaining to factors and economic indicators rele¹¹ nt for the

establishment of injury, in accordance with article 3.4 of the WTO

Agreement.

f) Furthermore, relevant data should have included, among others, on

the following aspects:

(i)

Production and sales of the domestic industry and of the

national industry as compared to the volume of imports.

(ii)

Patterns of apparent demand in the Indian market.

(iii) Evolution of the utilization of the installed capacity.

(iv)

Price composition.

(v)

Evolution of employment and salaries in the industry.

(vi)

Patterns of industrial productivity.

(vii) Profit, investment returns and utilization of thf inrtfillec¹

capacity; factors that influence internal price*, real t>i

potentially negative effects on liquidity, growth and

capacity to increase capital and attract invest j^nts.

The mere presentation of comments, counter-

arguments and rejoinders of the interested parties do

not constitute, as the afore mentioned Report seems

to imply, the unique essential facts as per Article 6.9

of the WTO Agreement.

THE GAZETTE OF INDIA: EXTRAORDINARY

[PART I—SEC. 1]

The Brazilian Government sustains that there is no

characterization of injury to the domestic industry

by imports allegedly at dumped prices.

(viii) It has been further argued by the Brazilian Embassy

that the investigating authority has not considered the

information regarding production, sales, costs of the

other Indian domestic companies that did not sign the

petition. Further, factors like operating conditions of

the domestic industry as per the technology employed

and obsolescence of equipment, capacity of domestic

industry in meeting demand and evaluation of other

factors other than imports have not been considered by

the Authority.

(ix) In the light of their submissions, the Brazilian

Embassy has requested for closure of the investigation.

16.

The Authority recalls its preliminary findings as regards normal

value. None of the exporters from UK had filed complete response on the

questionnaire. Only M/s. Acordis, UK had responded and had offered a

price undertaking. However, the Authority has not received any complete

price undertaking on he proforma sent to the exporter mentioning the actual

export price of subject goods offered by the exporter in order to enable the

Authority to take a view in the matter. The Authority confirms, in the

absence of complete and sufficient response from the exporters from subject

countries in the form and manner prescribed, having made the findings with

regard to exports from UK on the basis of the facts available to it as per

rule 6(8) supra. The Authority has considered the views of various interested

parties as regards the basis of normal value adopted in respect of UK for the

preliminary findings.

The Authority finds that the domestic sales

transaction relied upon for the preliminary findings for normal value

determination appeared to relate to special Acrylic Fibre. The Authority has

also considered the constructed cost of production for Acrylic Fibre and is of

the view that this may form the basis for normal value in respect of UK and

therefore normal value for UK has been determined on the basis of

constructed cost of production as per information furnished by the

petitioner.

17. The Authority recalls its preliminary findings on normal value in respect

of Germany. No fresh evidence has been made available to the Authority. The

Authority has also considered the information on constructed normal value.

The Authority finds that the normal value determined, on the basis of evidence

furnished by the petitioner regarding exports from Germany to a third country,

is lower than the constructed normal value. The Authority confirms, in the

absence of complete and sufficient response from the exporters from subject

country in the form and manner prescribed, having made the findings with

regard to exports from Germany on the basis of the facts available to it as per

rule 6(8) supra. Accordingly, the Authority confirms the normal value as

determined for the preliminary findings.

1£. In respect of Bulgaria the Authority had determined the normal value for

preliminary findings on the constructed cost of production as per information

furnished by the petitioner. No fresh evidence has been made available to the

Authority. The Authority confirms, m the absence of complete and sufficient

response from the exporters from Bulgaria in the form and manner prescribed,

having made the findings with regard to exports from Bulgaria on the basis of

the facts available to it as per rule 6(8) supra. Accordingly, the Authority has

constructed the normal value on the best available information.

19. There has been no response from any exporter from Brazil at any stage.

As regards the arguments put forward by the Brazilian Embassy in response to

the disclosure, the Authority finds that no submissions were made by any

exporter or the Brazilian Government immediately after the initiation or after

notification of preliminary findings. As regards the methodology employed

for determination of normal value the Authority holds the view that the

disclosures issued under the Rules have clearly stated that in respect of Brazil

the normal value is to be considered on the basis of constructed cost of

production. This is due to the fact that none of the exporters from Brazil

cooperated with the Authority in furnishing information to determine normal

value. The Authority confirms, in the absence of complete and sufficient

response from the exporters from Brazil in the form and manner prescribed,

having made the findings with regard to exports from Brazil on the basis of the

facts available to it as per rule 6(8) supra. Accordingly, the Authority has

constructed the normal value on the best available information. '

20. Export Price:

The Authority recalls its preliminary findings as regards the

export price determination. There has been no response from any exporter

giving more information/, evidence regarding the export price

or the

adjustments allowed. The authority therefore confirms the preliminary

determination of export price in respect of UK, Germany and Bulgaria. In

respect of Brazil the Authority had called more information on export

transactions from DGCI&S. No further transaction-wise information has

been received by the Authority. The Brazilian Embassy in their comments

THE GAZETTE OF INDIA: EXTRAORDINARY

[PART I—SEC 1]

on disclosures has not given any information relating to export prices, etc.

of the Brazilian exporter. In the absence of any fresh information relating to

Brazil exports the Authority is constrained to rely upon the best available

information, i.e. as per DGCI&S published data and therefore confirms the

export price as determined for the preliminary findings.

21.

Dumping Margin:

The principles governing the determination of normal value, export

price and the dumping margin are laid down in Annexure-I to the Rules. For

the purpose of the fair comparison between the normal value and export

price, the Authority has made calculations and comparisons at the same

level of trade. Normal Value at ex-factory level has been compared with the

export price at ex-factory level. Considering the normal value and export

price, determined as detailed above, the dumping margin comes as under:

S.No.

Country

Germany

Bulgaria

Brazil

Dumping Margin %

26.16%

10.29%

31.37%

185.58%

F. INJURY AND CAUSAL LINK

22. Rule 11 of Anti Dumping Rules reads as follows:

"Determination of Injury:

(i)

In the case of imports from specified countries, the designated

authority shall record a further finding that import of such article into

India causes or threatens material injury to any established industry or

materially retards the establishment of any industry in India;

(ii)

The designated authority shall determine the injury to domestic

industry, threat of injury to domestic industry, material retardation to

establishment of domestic industry and a causal link between dumped

imports and injury, taking into account all relevant facts, including the

volume of dumped imports, their effect on price in the domestic

market for like articles and the consequent effect of such imports on

domestic producers of such articles and in accordance with the

principles set out in Annexure II to these rules."

23.

The principles for determination of injury set out in Annexure-

II of the Anti- Dumping Rules lay down that:

(a) A determination of injury shall involve an objective examination

of both (a) the volume of dumped imports and the effect of the

dumped imports on prices in the domestic market for like article

and (b) the consequent impact of these imports on domestic

producers of such products.

(b)

While examining the volume of dumped imports, the said

Authority shall consider whether there has been a significant increase

in the dumped imports, either in absolute terms or relative to

production or consumption in India. With regard to the effect of the

dumped imports on prices as referred to in sub-rule (2) of Rule 18 the

Designated Authority shall consider whether there has been a

significant price under-cutting by the dumped imports as compared

with the price of like product in India, or whether the effect of such

imports is otherwise to depress prices to a significant degree or

prevent price increase which otherwise would have occurred to a

significant degree.

24.

Views of the domestic industry:

(i)The domestic industry suffered injury due to dumping in the investigation

period from various sources including subject countries, investigation

against which are either under progress or anti-dumping duty is already in

force. Thus, the injury to the domestic industry is required to be seen in the

light of existing duties and on-going investigations against other countries.

(ii)

The sales^qj^jme, of the domestic industry, which were increasing

till 1999-2000, declined in the investigation period.

(iii)

Given the level of price undercutting, the sales of the domestic

industry would have declined further, had the domestic industry not

compromised on the prices.

(iv)

The domestic industry is making losses year after year due to

continued dumping of acrylic fibre from one after another countries, which

includes subject countries also.

THE GAZETTE OF INDIA: EXTRAORDINARY

[PART I—SEC. 1]

(v)

Market share of imports from the subject countries is significant.

The share has increased over the years.

(vi)

The productivity of the domestic industry declined 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 for the domestic industry continues to

remain negative in spite of imposition of anti dumping duty on a number of

sources.

(viii)

The return on investment declined significantly in the investigation

period due to heavy losses faced by the domestic industry in this period.

(ix)

The capacity utilization has declined very significantly in the

investigation period due to decline in production.

(x)

The landed value of imported material from a number of countries

is significantly below the selling price of the domestic industry causing

severe price undercutting

(xi)

The landed value of the imported material is below cost of

production of the domestic industry causing severe price suppression and

depression.

(xii)

The dumping margin from the subject countries are not only more

than de-minimus but also very significant.

(xiii)

The cash flow was negative in 98-99, which became positive in 99-

00. However, the cash flow was again negative in 2000-01.

(xiv)

The level of stocks with the domestic industruincreased sharply in

spite of reduction in production by the domestic industry.

(xv)

The domestic industry has no other option but to increase the wages

for the employees due to the prevailing regulations.

(xvi)

The domestic industry has enhanced capacity by debottlenecking in

an effort to i-educe the incidence of fixed costs. However, this has also not

helped the domestic industry in reducing the losses.

(xvii)

The constituents of domestic industry had to undergo financial

restructuring some time back with lot of difficulties. The financial

institutions are not willing to lend funds to the domestic industry due to

continued losses.

(xviii) Dumping from Bulgaria, Brazil, Germany and UK has resulted in

injury to the domestic industry.

(xix)

The final duties may also be recommended in terms of US $ only

(in fixed amounts), so that erosion in the quantum of protection does not

take place on account of changes in the exchange rate.

25.

Views of Indian Spinners Association:

(i)lnjury should be seen for Indian industry as a whole and not for the

petitioners.

(ii)

The domestic industry should provide information with regard to all

producers. Method of pick and choose is not just and fair.

(iii)

Production and market share of domestic producers increased as per

data of the office of Textiles Commissioner.

(iv)

Capacity and its utilization has increased, hence, there is no injury

to the domestic industry.

(v)

Cost of production of the domestic industry increased by 38%

whereas selling price increased by 41 %.

(vi)

There is no dumping and no injury.

(vii)

The injury to the domestic industry if any is due to lack of cost

consciousness, insufficient scale of production, lack of R&D and poor

working.

26.

Views of Ludhiana Spinners Association

(i)We are largest consumer of acrylic fibre in the country, however, no

notice has been served to us before imposition of provisional duty.

(ii)

14 countries are attracting Anti Dumping Duty at present. No other

textile product attracts Anti Dumping Duty from so many sources.

(iii)

This is an attempt of the domestic industry to cover their

mismanagement, inefficiency and ultimate aim is to create monopoly in the

Indian market.

2695 G1/2002—5

THE GAZETTE OF INDIA .EXTRAORDINARY

[PART I—SEC. 11

(iv)

Production figures of the domestic industry is distorted as it does

not include production of all Indian producers.

(v)

Production of the Industry has gone up by 29% over previous year.

(vi)

Injury due to cyclone in Gujarat and earth quake in Gujarat is the

reason behind injury if any.

(vii)

Injury is due to reduction in customs duty in budget and not

imports.

(viii)

None of the domestic producers stated in their balance sheet that

their profitability is lower due to dumping from newer sources.

(ix)

The industry has old and outdated machinery, which is resulting

into injury to the industry.

(x)

The industry is not able to meet the present demand and future

demand.

27. Views of M/s Lukoil, Bulgaria

The result of the preliminary investigation makes it evident that our market

share is only 3%, which can not possibly affect the interests of the Indian

producers. Neither can it have any influence on price levels for the aforesaid

market.

Examination of Injury and Causal Link by the Authority :-

28. The Authority recalls its preliminary findings regarding injury analysis.

The domestic industry has furnished information on various economic

factors/indices relating to injury determination, viz., natural and potential

decline in sales, profits, market share, productivity, return on investments,

utilization of capacity, factors affecting domestic prices, profitability, return

on investments, effects on cash flow, employment, wages, etc. The

Authority has taken into account the aforesaid indices regarding injury

while doing the final determination. The Authority has examined the

submissions made by various interested parties, viz., domestic industry,

exporters, Indian Spinners Association, Ludhiana Spinners Association and

the Brazilian Embassy. The Authority is of the view that all the relevant

indices as per Annexure II of the Rules have been examined in respect of the

domestic industry for this investigation. While the Authority has examined

all parameters mentioned in Annexure II of the Rules, however, some of the

relevant parameters, which show injury, are discussed in detail as under:

29. As regards volume of imports The Authority has examined the

information regarding the volume of exports from the subject country during

the period of investigation and the preceding years. During the POI the

imports from the four subject countries taken together were of 4195 MT.

During the year 1999-2000 these imports were 2469 MT and 3739 MT

during 1998-99 (as per DGCI&S data). These imports account for a market

share of 3.35% in 1998-99, 2.18% in 1999-2000 and 3.73% during 2000-01.

When compared to the previous year 1999-2000 the share in the market had

shown an appreciable increase during the POI. However, in volume terms

the imports from the subject countries during POI showed an increase of

69% over the imports in the previous year. The increase in market share

though not very significant is however appreciable and the increase in

imports in absolute terms does hold a threat for the domestic industry. The

Authority has found that there has been an increase in the dumped imports

in absolute terms.

30.

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

product in India, or whether the effect of such imports is otherwise to depress

prices to a significant degree. The Authority has compared the landed value

of imports of subject goods from subject countries during the POI with the

net sales realization and has found that there has been a significant price

under-cutting by the dumped imports. The landed value of imports has been

found to be significantly lower than the domestic industry's net sales

realization. The imports were having significantly suppressing/ depressing

effect on the prices in the domestic market, as the domestic industry has not

been able to raise its selling price to earn a reasonable return in view of the

dumped imports

31. 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. The installed capacity of the three petitioner companies had

increased during the POI. However, the total production of the petitioner

companies declined during the POI in comparison to the previous year. The

production of the two other domestic producers, who have supported the

THE GAZETTE OF INDIA: EXTRAORDINARY

[PART I—SEC. 1]

petition but have not participated in the present investigation, may have

increased during the POL The argument of the Indian Spinners Association is

that the production of Acrylic Fibre has increased during POI. The petitioner

companies account for 61% share, i.e. a major proportion of the domestic

production of the subject goods during the POI and have been construed as

'Domestic Industry' in terms of Rule 2(b) supra. Therefore, the Authority

holds the view that the domestic industry has suffered injury on account of

decline in production and capacity utilization.

32. 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 i.e. by 16.25% in comparison to the

previous year. Further, the domestic industry has been selling its material at

a price, which do not permit recovery of even cost of production.

33. 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 in the investigation period from -100 (indexed) in 1997-98 to -373

(indexed) in the investigation period.

34.

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.

35.

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.

36. 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.

37. 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.

38. The domestic industry is being forced to resort to curtailment of

employment due to continued financial losses and negative cash flow.

39. Due to the prevailing regulations, the domestic industry has to increase

the wages causing further impact on profits.

40. 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.

41. All above parameters cumulatively show that the domestic industry has

suffered material injury from the dumping of subject goods from subject

countries.

42. Cumulative assessment of injury

As per annexure-II (iii), in cases where imports of a product from more than

one country are being simultaneously subjected to Anti-dumping

investigation, the Authority is required to cumulatively assess effect of such

imports, only when it determines that (a) the margin of dumping established

in relation to imports from each country is more than 2% expressed as

percentage of export price and the volume, of the imports from each country

is 3% of the imports of like article -~ and (b) cumulative assessment of the

effect of imports is appropriate in light of the conditions of competition

between the imported article and the like domestic article. The Authority

has found that the margin of dumping in respect of each of the subject

country is more than 2% and the volume of imports from each country is

also more than 3%.

The Authority has also found it appropriate to

cumulatively assess the effect of imports of the subject goods from subject

countries on the domestically produced like article and has found that there

is a cumulative effect of injury by imports of subject goods on the domestic

industry.

43. While determining the non-injurious price for the like article for the

domestic industry, the Authority considered the optimum cost

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 went 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. 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

THE GAZETTE OF INDIA: EXTRAORDINARY

[PART I—SEC. 11

period of investigation. Verification at premises of the domestic industry

has been done to the extent required.

Causal Link:

44. As regards the impact of the dumped imports on the domestic industry

the principle (iv) of Annexure-II of the Anti-Dumping Rules states:

"The examination of the impact of the dumped imports on the domestic

Industry concerned, shall include an evaluation of all relevant economic

factors and indices having a bearing on the state of the industry, including

natural and potential decline in sales, profits, output, market share,

productivity, return on investments or utilisation of capacity; factors

affecting domestic prices, the magnitude of margin of dumping; actual and

potential negative effects on cash flow inventories, employment, wages,

growth, ability to raise capital investments."

45.

The Authority has examined all the relevant indices. Volume of

dumped imports from subject countries has increased in absolute terms. The

dumped imports have led to a significant price under-cutting effect on the

domestic industry's product. Due to the landed value of the dumped

imports the domestic industry has been selling its material at a price, which

do not permit recovery of even cost of production. The domestic industry

has not been able to realize a fair selling price on its product due to the

dumped imports resulting in financial losses. The domestic industry has

made losses. The return on capital investment has become negative. The

industry is having negative cash flow. Unsubstantiated claims have been

made by some interested parties that injury caused to the domestic industry

is due to other factors like poor R&D, inefficiency etc. The Authority does

not find any merit in these arguments. The Authority has thus come to

conclusion that material injury has been caused to the domestic industry

due to the dumped imports from the subject countries. Subject to these the

Authority confirms the preliminary findings as regards injury and causal

link.

INTEREST OF INDIAN INDUSTRY AND OTHER ISSUES:

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

the users of Acrylic Fibre should be taken into account while imposing anti

dumping duty. They have requested to reconsider the imposition of anti

dumping duty on Acrylic Fibre since the threat of imports serves as a check

on the prices of the local producers.

47. In this context the Authority reiterates 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 and consequently might have some

influence on

relative competitiveness of these products. However, fair

competition on the Indian market will not be reduced by the anti dumping

measures. On the contrary, imposition of anti dumping measures would

remove the unfair advantages gained by dumping practices, would prevent

the decline of the domestic industry and help maintain availability of wider

choice to the consumers of subject goods. The Authority notes that the

imposition of anti dumping measures would not restrict imports from subject

countries in any way, and therefore, would not affect the availability of the

product to the consumers. The consumers could still maintain two or even

more sources of supply.

FINAL FINDINGS

48.

The Authority has, after considering the foregoing, come to the

conclusion that:

(i)

Acrylic Fibre has been exported to India from subject

countries below its normal value;

(ii)

The Indian industry has suffered injury;

(iii)

The injury has been caused by the dumped imports

from subject countries;

49.

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 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.

THE GAZETTE OF INDIA: EXTRAORDINARY

[PART I—SEC. 1]

50.

The Authority recommends imposition of definitive anti dumping

duty on all imports of Acrylic Fibre from UK, Germany, Bulgaria and

Brazil falling under Sub Heading 5501.30 and 5503.30 of chapter 55 of

Schedule I of Customs Tariff Act. The anti dumping duty shall be as in

Col 3.in the following table:

Sl.No

(1)

Country

(2)

All producers/exporters from

All producers/exporters

from

Germany

All producers/exporters

from

Bulgaria

All producers/exporters

from

Brazil

Anti

Dumping

Duty US $ per Kg

0.33

0.14

0.38

1.03

51. Subject to the above, the Authority confirms the preliminary findings

dated 7* December, 2001.

52,

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

Printed by tha Manager, Govt. ot India Press, Ring Road. Mayapurl, Naw Delhl-110064

and Published by the Controller ot Publication*, Delhi-1100S4 — 2002