THbGAZETTt-Of INDIA bX TRAORDINARY

[PART I—Sec 1]

MINISTRY OF COMMERCE AND INDUSTRY

(Department of Commerce)

(DIRECTORATE GENERAL OF ANTI-DUMPING AND ALLIED DUTIES)

NOTIFICATION

New Delhi, the 7th October, 2002

FINAL FINDINGS

Subject; Anti-Dumping Investigation concerning imports of Caustic Soda from Qatar.

No. 55/1 /2001-DG AD.—Hav ing regard to the Customs Tariff Act 1975 as amended in 1995 and the Customs

TanfT(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 investigation

The Designated Authority (hereinafter also referred to as Authority), under the above

Rules, received a written application from M/s Alkali Manufacturers Association of

India (AMAI) (hereinafter referred to as petitioner) on behalf of M/s Grasim

Industries, M/s Gujarat Alkalies and Chemicals Ltd, M/s Search Chem Industries

Ltd m M/s DCW and M/s Indian Rayon and Industries Ltd who represented the

domestic industry, alleging dumping of Sodium Hydroxide commonly known as

Caustic Soda (hereinafter also referred to as subject goods) originating in or exported

from Qatar (hereinafter referred to as subject country) The petition was supported

by M/s Siel Chemicals Complex, Patiala, Punjab, M/s Bihar Caustic & Chemicals

Ltd Bihar , M/s Jayshree Chemicals Ltd, Orissa and M/s Andhra Sugars Ltd,

Saggonda unit subsequent to initiation

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

lii)

The Authority on the basis of sufficient evidence submitted by the petitioner decided

to initiate the investigation against imports of subject goods from Qatar The

authority notified the Embassy of Qatar in New Delhi about the receipt of 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 8.10.2001 published in the Gazette of

India, Extraordinary, initiating Anti-Dumping investigations concerning imports of

the subject goods classified under custom Code 281511 and 281512 of Schedule I of

the Customs Tariff Act, 1975 originating in or exported from Qatar.

The Authority notified preliminary findings dated 18.1,2002 and forwarded a copy of

the preliminary findings to the following interested parties, who were requested to

furnish their views, if any, on the preliminary findings within forty days of the date

of the letter:-

IMPORTERS/USER

M/s Abhey Chemicals Ltd., Baroda

M/s Albright Wilson Chemical Ltd., Mumbai

M/s Arvind Mills Ltd., Ahmedabad

M/s Birla Cellulose Ltd., Bharuch

M/s Central Pulp Mills Ltd., Delhi

M/s Deepak Nitrite Ltd., Nandesari

M/s Godrej Soaps Ltd., Mumbai

M/s Gujarat Electricity Board, Vadodara

M/s Gujara Narmada Fertilizers Co. Ltd., Bharuch

•v 10.

M/s Gujarat State Fertilizers & Chemicals Ltd.,Vadodara

11.

M/s Hindustan Lever Ltd., Mumbai

12.

M/s ICI India Ltd., Valsad

13.

M/s Indian Farmer Fertilizers Coop. Ltd., Gandhinagar

14.

M/s Indian Oil Corporation Ltd., Vadodara

15.

M/s Indian Petrochemicals Corporation Ltd., Vadodara

16.

M/s Jaysynth Dyechem Ltd., Mumbai

17.

M/s Link Pharma Ltd., Baroda

18.

M/s Meghmani Organics Ltd., Ahmedabad

19.

M/s Narmada Chematur Petrochemicals Ltd., Bharuch

20.

M/s Nirma Ltd., Ahmedabad

21.

M/s PAB Chemicals (P) Ltd., Baroda

22.

M/s Rama News Prints & Papers Ltd., Surat

23.

M/s Rubamin Ltd., Baroda

24.

M/s Torrent Gujarat Bio-tech Ltd,, Baroda

25.

M/s Transpek Industries Ltd., Vadodara

26.

M/s National Alumunium Ltd,, Bhubaneswar, Orissa

27.

M/s C.J. Shah and Company, Mumbai

EXPORTER

M/s Qatar Vinyl Company, Qatar

THE GAZETTE OF INDIA: EXTRAORDINARY

[PART 1—SEC. 11

pOMESTIC INDUSTRY

M/s Alkali Manufacturers Association of India

vi)

The Authority also forwarded a copy of the preliminary findings to the Embassy of

the subject country in New Delhi with a request that the exporters of subject goods

and other interested parties may be advised to furnish their views on the preliminary

findings within forty days of the date of the letter,

vii)

The Authority provided an opportunity to all interested parties to present their views

orally on 29.4.2002. 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.

(viii)

Submissions in response to the preliminary findings/public hearing were made by

the following interested parties:-

(i)

M/s Alkali Manufacturers Association of India

(ii)

M/s NALCO

(iii)

M/s Economic Laws Practice, Mumbai on behalf of M/s Qatar Vinyl Company Ltd.

ix)

The Authority kept available non-confidential version of the evidence presented by

various interested parties in the form of a public file maintained by the Authority and

kept open for inspection by the interested parties as pe: Rule 6(7).

(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. Kandla Port Trust was also requested for

details of shipment. Information on imports was received from Kandla Customs and

Kandla Port Authorities.

(xi)

Arguments raised 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 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 20.9.2002 and

comments received on the same have also been duly considered in these findings,

(xiii) Cost investigation was also conducted to work out optimum cost of production and

cost to make and sell the subject goods in India on the basis of Generally Accepted

Accounting Principles (GAAP) and the information furnished by the petitioner. The

cost data of the following domestic producers was provided and analysed:—

M/sDCW

Gujarat Alkalies and Chemicals Ltd., Vadodara

Search Chem Industries Ltd, Jagadhia

Indian Rayon & Industries Ltd., Veraval, Gujarat

M/s Grasim Industries

Siel Chemicals Complex, Patiala, Punjab

M/s Bihar Caustic & Chemicals Ltd,. Bihar

M/s Jayshree Chemicals Ltd, Orissa

M/s Andhra Sugars Ltd., Saggonda

(xiv) The Authority verified the information provided by the petitioners to the extent

considered necessary and also conducted on spot verification of the data furnished by

M/s Qatar Vinyl Company, Qatar on 10^th and 11^th September, 2002.

(xv)

****in this notification represents information furnished by an interested party on

confidential basis and so considered by the Authority under the Rules.

(xvi)

Investigation was carried^out for the period starting from 1st January, 2001 to 30^th

Sept, 2001 i.e. ,the period of investigation (POI).

VIEWS OF EXPORTERS, IMPORTERS AND OTHER INTERESTED

PARTIES

VIEWS OF M/S ALKALI MANUFACTURERS ASSOCIATION OF INDIA

(AMAI)

a).

STANDING

THE

PETITIONER.

PRODUCT

UNDER

CONSIDERATION AND LIKE ARTICLE

(i)

The petitioner have reiterated their submissions on product under consideration aiid

like article as also indicated in the preliminary findings.

In response to the disclosure, the following submissions have been made:-

The domestic industry have reiterated their submissions made earlier and have

mentioned that as there are no submissions to the contrary neither any objection on the

issue of product under consideration, like article and standing of the Domestic Industry,

they have requested to confirm the preliminary findings.

3133 G 1/02^5

THE GAZETTE OF INDIA: EXTRAORDINARY

fPARil-SEC.il

NORMAL VALUE. EXPORT PRICE AND PUMPING

DUMPING

While the exporter from Qatar has responded, the importers have not responded

which establishes our claim that importers/traders were well aware that the price at

which material has been imported is a dumped price. This is a fit case for imposition

of anti dumping duty on retrospective basis,

(ii)

The exporter has not filed the non-confidential summary of the questionnaire

response,

(iii)

The argument of exporter regarding no imports of caustic soda in India during POI is

misplaced since the relevant fact is that of fact of exports and not imports,

(iv)

The product can be considered as having been exported in various conditions like a

firm offer/order of purchase, invoices and offer of resale etc.

(v)

In the instant case, during the POI an offer of supply was made by the exporter to the

Indian trader.

(vi)

With regard to the normal value of exporter, the cost of production of the exporter

needs to be scrutinised in detail,

(vii)

The petitioner strongly submits that under no circumstances the cost of production for

the exporter can be lower since they have made a huge investment of 678 million

USD. The company has not provided the actual cost of production. The company has

not provided the balance sheet and profit and loss account and also the project report,

(viii)

The petitioners have cited the Hon'ble Supreme Court judgement in the Catalyst case

and have indicated that Rule 6(8) in view of the project report not having been

provided be applied,

(ix)

The petitioner has also requested that appropriate scrutiny pertaining to allocation and

apportionment of common expenses, appropriate cost of services and interest cost etc.

to be evaluated carefully,

(x)

As per the EU guidelines the evidence of export price may be obtained from the

individual invoice transactions or offers. Also in the US questionnaire with regard

the dumping, all those sales for which the supplies have not been completed till the

date of filing the response have to be included for the purpose of price determination,

(xi)

The interested parties have confused regarding the jurisdiction to determine the

dumping margin and the jurisdiction to collect the anti dumping duty. These two

issues are absolutely different issues,

(xii)

The argument regarding the imports is misplaced as the fact of dumping occurs upon

exports and such duty is leviable in future upon imports,

(xiii)

The Designated Authority has in the past considered offers made/orders places as

sufficient to invoke anti dumping action in case of PIB and Seamless Tubes,

(xiv)

The argument of NALCO regarding holding hearing prior to preliminary findings

deserves to be ignored in light of the judgement of High Court of Delhi and Supreme

Court in the matter of Newsprint,

(xv)

The various rules do not contemplate hearing prior to the preliminary findings

(xvi)

Even in case of Vitrified Tiles concluded recently, Ministry of Finance did not agree

for any hearing to the concerned parties.

(xvii) NALCO being an importer cannot raise the issue of dumping and dumping margin

and neither NALCO is privy to the factual information nor NALCO h is any actual

experience and knowledge about caustic soda production and sales.

In response to the disclosure, the following submissions ha*" ntxn myde;»

(iO

As regard dumping, the Domestic Industry has reitttrated their submissions regarding

the various forms of offers/documents pertaining to exports which could be

introduced into the country and have further reiterated the fact that the shipments

made during the investigation period is of little relevance.

(ii)

The petitioners have also mentioned that since the Normal Value has now been

determined by the Designated Authority after taking into account various submissions

made by the petitioners and reassessment of the cost of production, the proposed

determination should be confirmed.

INJURY. CAUSAL LINK A,ND QTF^FR ISSUES

(i)

The capacity of the exporter has been created considering various markets as the

potential markets which include India as well,

(ii)

The threat of material injury to the Domestic Industry from Qatar is required to be

seen in the context of the anti dumping duties already imposed from other countries,

(iii)

The capacity installed by exporter is 290000 MT far in excess of their domestic

demand,

(iv)

The company also admits that it intends to focus on GCC countries, Australia, South

East Asia and African markets. Indian market is lucrative to the exporter,

(v)

The Indian producers understands that the exporter has exported the naterial at USD

115/MT after September, 2001 also,

(vi)

The landed price on imports from Qatar is significant below the full cost of

production and fair selling price of the Domestic Industry,

(vii)

There has been price undercutting and price suppression and price depression on

account of the dumped imports,

(viii)

The Domestic Industry is making financial losses from the sale of caustic soda in the

Indian market,

(ix)

The petitioner companies have lost sales to a number of customers on account of

imports from Qatar,

(x)

In a short time of about 6 months, the exporter from Qatar has exported more than

10000 MT and that the anti dumping duties need to be levied from the retrospective

effect,

(xi)

The threat is not a conjecture but real and imminent since the exports are understood

to have been made at USD 115 per MT, The anti dumping duties should be levied in

the variable dollar form.

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[PARTI—SEC. 11

(xii)

In response to the submissions made by NALCO, the Domestic Industry has

indicated that the NALCO's demand is 100000 MT and that the Domestic Industry

has catered to the requirement of NALCO in the past,

(xiii)

As regards NALCO's argument on injury, it is mentioned that the claim of Domestic

Industry is not based on material injury but is based on threat of material injury,

(xiv)

The various parameters such as production, sales volume, capacity utilisation have

shown decline in the investigation period as imports have started arriving towards

the end of the investigation period,

(xv)

The Indian producers have taken up fleet of road tankers for supply of material to

NALCO as a longterm policy to sustain business with NALCO. Whenever import

prices have remained high, NALCO have conveniently placed order on the Domestic

Industry,

(xvi)

NALCO has been conveniently trying avoid providing information on its imports

and from the domestic sales for the past several years,

(xvii) With regard the the determination of injury both actual or potential imports should be

considered as also indicated in Rule 14(d)

In response to the disclosure, tfre following submissions have been made:-

(i)

The petitioners have reiterated that M/s QVC's entire production is meant for exports

and that there is a threat of material injury since after September, 2001, the prices

have come done to USD 115 PMT and that between October, 2001 and March, 2002

the exporter has exported 17000 MT of caustic soda as per DGCI&S data and as per

tneir market intelligence about 30000 MT materials has been exported by the

exporter.

(ii)

It has been mentioned that that threat of material injury under these circumstances is

real and imminent.

(iii)

The petitioners have also reiterated that the rate of growth of exports from Qatar is

too significant and that exporter from Qatar along constitutes 3% of the Indian

demand in a short time less than one year.

(iv)

Further the petitioners have mentioned that the threat has become imminent as per

the information relating to production, sales and capacity utilization after the

investigation period and upto June, 2002/

(v)

It has also been mentioned that the goods have been imported at prices as low as

USD 80-115 PMT.

(vi)

The petitioners have requested for duty in the variable dollar basis on account of the

low prices and drastic reduction in the export prices.

EXPORTER'S VIEWS

M/s Qatar Vinyl Company (QVC) Ltd.

NORMAL VALUE. EXPORT PRICE AND DUMPING

DUMPING

(i)

No imports have been made during the POI i.e. 1.1.2001 to 30.9.2001 and that the

imports were made after 18.10.2001. The exporters began production in June, 2001 and

that the first transaction for imports into India were finally negotiated only around

12.10.2001. Sample copy of the invoice dated 12.10.2001 and bill of lading dated

12.10,2001 are enclosed as evidence,

(ii)

Section 9A of the Customs Tariff Act, 1975 and Section 9B(b)(i) and (ii) mandates

the levy upon importation of goods into India at less than their normal value,

(iii) The entire analysis of dumping, injury, causal link and deminimis thresholds has to be

made within the period of investigation and in a situation where there are no imports, no

analysis can be made and levy would automatically fail,

(iv) Under Rule 4(1 )(a) of Customs Tariff (Identification, Assessment and Collection of

Anti-Dumping Duty on Dumped Articles and For Determination of Injury) Rules, 1995,

the duty of Designated Authority is to investigate into the existence, degree and effect

of an alleged dumping in relation to imports of any article and when there are no

imports, this duty cannot be discharged and there can thus be no levy of anti dumping

duty,

(v)

Under Rule 14 of Anti Dumping Rules, Designated Authority is statutorily mandated

terminate when there are no imports ar'i hence no dumping. De-minimis criteria cannot

be satisfied as per Rule 14© and 14(d).

(vi) The applicants have made contradictory and misleading statement on the issue of

importation indicating that exports have started and the shipment is shortly expected

and therefore under Rule 5 (3) (b) where the evidence is not accurate, the initiation of

the investigation is itself bad.

(vii) In the preliminary findings, the levy has been recommended on the basis of the

proforma invoice which under the Indian Contract Act cannot constitute an offer. The

various judgements of the Hon'ble Courts have been cited,

(viii) The oblique reference to some WTO provisions are not the

mandated agreements and

rules,

(ix) Section 9 and Section 9A of the Customs Tariff Act and, Rule 4, Rule 5, Rule 12, Rule

17 of the Rules, all mandate an examination and findings of dumping, injury and causal

link as regards imports.

This examination is for imports during the period of

investigation,

(x)

Section 9A(8) adopts the provisions of the Customs Act, 1962 inter alia for levy issues.

Section 2(23) of the Customs Act, 1962 defines "imports" as bringing into India from a

place outside India.

THE GAZETTE OF INDIA: EXTRAORDINARY

[PART I — S E C . 1]

(xi) Footnote 8 of the Anti Dumping Agreement provides 'date of sale' which is relevant to

calculate the rate of exchange only,

(xii) The Hon'ble Supreme Court in Garden Silk Mills Limited & Anr. Vs. Union of India &

Ors 1999(113) ELT 358(SC) have declared that imports commences when goods enter

the territorial water and is completed when goods are cleared into the Indian land mass,

(xiii) It is submitted that just because the importers/traders have not responded to the

Designated Authority, it cannot mean that they were well aware that the price at which

material was imported in India was a dumped price', On the contrary, the non-response

by the importers/traders is appropriate since there were no imports during the POI.

(xiv) It is a complete misunderstanding of the anti dumping provisions and an abuse of the

anti dumping jurisprudence to make a case on any alleged threat of exports,

(xv) Section 9A and Section 9B of the Customs Tariff Act clarify the levy of anti dumping

duty on dumped articles and also clarify regarding no levy under Section 9 and Section

9A.

(xvi) The Designated Authority is bound by the dictum of Hon'ble Supreme Court and even

the event of imports is clearly settled.

(xvii)M/s QVC wishes to take leave to file on record the balance sheet with the Designated

Authority.

(xviii)The project report is confidential document privy to the exporter and is not required in

the standard questionnaire of the Designated Authority and also the project report is

little if any thing at all is to do with the fixing of the normal value,

(xix) The petitioner should be put to strict proof regarding the reference made to EU and US

law.

(xx) As regards the normal value, the applicant proceeds on constructed cost based on Indian

cost of production whereas as per Rule 9(A)(c)(ii)(b) mandates consideration of costs in

the country of origin,

(xxi) 65% of the cost of production of caustic soda is on electricity which in India is 12 times

more than that in Qatar.

(xxii)The preliminary findings also proceed on constructed cost in India.

(xxiii)The only reasons to reject cost of production furnished by QVC is (a) balance sheet not

given as explained this was not possible as production begins in June, 2001 and no

balance sheet was available in December/January when asked for and (b) some claimed

difference in figures, which was minor and it was clarified that the figures of date

should be looked at.

In response to the disclosure, the following submissions have been made:-

Dumping

(i)

The fact that the importers have not responded has no bearing on the dumping, which

remains the function of the export price and normal value from Qatar,

(ii)

It is surprising to note that the domestic industry claims that no non-confidential

summary was filed. Without a non-confidential summary on record, the Designated

Authority could not have undertaken the verification visit.

(iii)

With reference to the statement that what is relevant is the fact of exports and not

imports. It is categorically stated that there were neither exports nor imports to India

during the Period of Investigation.

jjyj

It is vehemently denied that the product can be considered as having been exported

in various conditions like " a firm offer/order of purchase invoices and offer of resale

etc." This is completely contrary to the view taken by the Hon'ble Supreme Court.

This position is all the more untenable given the fact that the exporter is the only

manufacturer of the product under consideration in Qatar.

(y)

It is a undisputed fact that the Designated Authority have visited Qatar for verifying

the record which clearly proves that with reference to the details of the cost of

production and other pertinent information, it is a matter of record that all the

required information has been filed and verified in keeping with the law.

(vi)

With reference to the EU and US provisions on supplies not yet made, the same

cannot be used as the basis for imposing duties when no exports have been made at

all.

It might well be that as part of the overall investigation and the threat

assessment, authorities may look at offers etc. as part of overall analysis. To apply

that same rationale to a stand alone offer is without any basis in law and facts.

(vii)

With reference to the "confusion" on the jurisdiction to determine the dumping

margin and the jurisdiction to collect anti dumping duty, the same are intimately

linked as there can be no collection of any anti-dumping duties without the

determination of a dumping margin. In fact, as the law is, the power to collect the

anti dumping duties can only emanate from a determination of the dumping margin.

Section 9 A of the Customs Tariff Act is unequivocal in this regard.

(viii)

As regards the fact that the anti dumping duty is leviable for future imports, the

Domestic Industry itself admits that even for imposition of ami dumping duty in

future, "the fact of dumping occurs upon exports". Clearly there have been no

exports or imports during the Period of Investigation on the facts of this case.

Normal Value

(i)

With regard to normal value, it is submitted that while the domestic sales are

inadequate for the purposes of establishing the normal value, the export price to third

countries remains an option. While the Designated Authority has the discretion to

decide which basis to use (i.e. cost of production or export price to third countries)

the exercise of this discretion must bring with it a transparent exercise of this

discretion.

(ii)

The Designated Authority provides no reason for opting for the cost of production

over the export price to third countries.

(iii)

It is submitted that there are few steps in newly establish company when it goes from

project stage to industrial production. For QVC, the following were the benchmarks-

Performance Test completed

***

Lenders Reliability Test completed

***

Engineering and Project completion

***

THE GAZETTE OF INDIA: EXTRAORDINARY

[PART)—SEC. 1]

So therefore, the commercial production is slated to be commenced only in ***. The

Designated Authority should consider all this fact when considering the commercial

production,

(iv)

Since QVC was able to run the plan at 72% capacity at initial stage does not mean

commercial production. With reference to the capacity utilisation at 72% and the

Designated Authority accepting the same as the basis for determining the cosi of

production, the same is highly objectionable, as no plant, especially a new plant is set

up to operate at a capacity utilisation of less than ***. This is sound business

practice and by ignoring this the Designated Authority is disregarding commercial

realities of the economies of plant operations. At 72% capacity utilisation, making

of profits on a sustained basis is highly improbable.

Arguments pertaining to no Exports during the Period of Investigation

(i)

The concept of "introduction into the commerce of the country" drawn upon from

Article 2.1 of the WTO Agreement by the Designated Authority is without any basis.

It is a matter of settled law that the

Municipal law prevails over any Treaty

provisions in India. The fact is that the relevant section calls for the Export of the

products under consideration during period of investigation to India. Furthermore,

the cases relied upon by the Designated Authority including the South Africa case

may have considered tender prices as one of the constituents to determine the export

price but certainly none of the cases referred to by the Designated Authority relied

upon a tender price. Furthermore, within the factual matrix of the case in hand, there

has been no tender during the period of investigation pursuant to which any supplies

were made.

INJURY, CAUSAL LINK AND OTHER ISSUES

(i)

All imports in October after the POI were under advance licencse and cannot cause

injury during the POI.

(ii)

The Application and the preliminary findings proceed on the basis of a threat of

material injury. The provisions of Rule 11(2) with para (vii) of Annexure II have

been relied upon,

(iii)

The proceedings on the basis of a threat of material injury are entirely on conjecture

and are entirely without jurisdiction. Even for threat of material injury, the essential

requirements of satisfying the fundamental pre-conditions are essential and as such

during period of investigation there are no imports,

(iv)

Harmoniously construed under Para (vii) of Annexure II there must be dumped

imports in the period of investigation and while there may be no injury in the period

of investigation, material injury must be threatened and imminent beyond the period

of investigation. Without dumping in the period of investigation, there can be no

sustainable case for a threat of material injury.

41-,

(v)

The petitioners are mutli-product company and that the petitioners are making super

profits in the manufacture of Chlorine and that the Designated Authority should

examine the claim of losses that petitioners have claimed

In response to the disclosure, the following submissions have been madc;-

On the issue of threat of material injury

(i)

Under Section 9B(ii) read with Rule 11 and read with Para (vii) of Annexure II to the

Rules are provisions which specify the threat of material injury all of which

empahsize that there must be dumping (within the period of investigation) and this

dumping must create an imminent threat of material injury. This is clearly brought

forth from Para (viii) above which states

"The change in circumstances which would create a situation in which the dumping

would cause injury must be clearly foreseen and imminent".

(ii)

The provision for threat of material injury does not water down or obviate the

essential requirements of satisfying the fundamental pre-conditions of establishing

(i)

Dumping

(ii)

Standing

(iii)

De minimis

(iii)

During the analysis period (Period of Investigation) in a situation where there are no

imports during the Period of investigation, the essential pre-condition for levy are not

satisfied. These essential pre-conditions cannot be given a go by in a proceeding

based on a threat of material injury. In the instant case, during the verification visit

made, a list of long term contract for the product under investigation were submitted

which covered ***% of the total production to other third countries were made

available, which clearly should be considered by the Designated Authority.

(iv)

Harmoniously constructed under Para (vii) of Annexure II there must be dumped

imports in the Period of Investigation and while there may be no injury in the Period

of Investigation, material injury must be threatened and imminent beyond the period

of investigation. Without dumping in the period of investigation, they can be no

sustainable case for a threat of material injury.

(v)

It is therefore submitted that the Designated Authority follows the judgement gives

effect to the judgement delivered by the Panel report in the case of Mexico-Anti

dumping investigation of High Fructose Corn Syrup (HCFS) from the United States,

at Para 7.131, where before the panel USA claimed that a determination of threat of

injury cannot be based only on examination of the factors set forth in Article 3.7 of

the Anti Dumping Agreement. A determination of threat of injury also requires an

assessment of the impact of imports on the Domestic Industry through a examination

of the relevant economic factors set forth in Article 3.4. Article 3.7 requires a

determination whether material injury would occur, Article 3.1 requires that a

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THE GAZETTE OF INDIA: EXTRAORDINARY

[PART I—SEC. 1]

determination of injury, including threat of injury, involve an examination of the

impact of imports, and Article 3.4 sets out the factors that must be considered,

among other relevant factors, in the examination of the impact of imports on the

Domestic Industry. Thus, in our view, the text of the Anti Dumping Agreement

requires consideration of the Articles 3.4 factors in a threat determination. Article

3.7 sets out additional factors that must be considered in a threat case, but does not

eliminate the obligation to consider the impact of dumped imports on the Domestic

Industry in accordance with the requirements of Article 3.4.

On the issue ?f injury

(i)

It is mandated in Annexure II to the Rules, that for a determination of injury " an

evaluation of all relevant economic factors and indices having a bearing on the state

of the industry must be examined unless the circumstances are exceptional it is not

possible to merely decide to determine the issue of injury on few economic negative

indices while ignoring other positive indices".

(ii)

In the case of European Commission - Anti Dumping Duties on imports of Cotton

Type Bed Linen from India -Report of the Panel -WT/DS141/R at Para 6.154 that

under Article 3.4, the ordinary meaning of the provision is that the examination of

the impact of dumped imports must include an evaluation of all the listed factors in

Article 3.4 of the WTO Agreement on Anti Dumping. In the Bed Linen case, India

asserted that all relevant injury factors must be evaluated. Therefore it was the

conclusion of the panel that "use of the phrase" shall include" in Article 3.4 that the

evaluation of the listed factors in that provision is properly interpreted as mandatory

in all cases.

(iii)

Therefore, since the above interpretation on all factors of injury to be evaluated was

suggested by India and accepted by the Panel, obligates the Designated Authority to

take into consideration all the injury parameters, through at the same time, it is an

accepted position in the preliminary findings which cannot be ignored, that

(i)

all indices such as sales, capital utilisation, production, net sales realisation

and demand have gone up.

(ii)

Imports have gone down

(iii)

All injury parameters are positive

(iv)

Thus, there is clearly no injury in the Period of Investigation. It is relevant that the

Domestic Industry has already had an anti dumping duty for over a year, which has

obviated any material injury to Domestic Industry. The aforementioned factors

establish inter alia that there is no causal link.

EMBASSY OF STATE OF QATAR, NEW DELHI

(i)

The Embassy of the State of Qatar has requested that the findings should be done in

accordance with the principles and procedures agreed upon in the WTO.

IMPORTER'S VIEWS

VIEWS OF M/S NATINAL ALUMINIUM COMPANY LTD. ( N A L C O )

NORMAL VALUE. EXPORT PRICE AND DUMPING

DUMPING

(i)

There have been no imports from M/s QVC during the POI. The billing of lading and

other materials indicate exports in October, 2001. There could be no dumping when

the actual imports of goods into India and that as per Section 9(A) (1) of the Customs •

Tariff Act, 1995 there could be no duty. Also as per Rules 4(1 )(a) since there is no

import, there could be no existence of dumping and therefore degree or dflfeet of

dumping cannot be investigated

(ii)

The word 'import' has been defined in the Customs Act and means ^ * actual bringing

into of goods at the customs frontiers

(iii)

Section 9(A)(l)(b) has defined the export price and it specifically means the price of

the article exported from the exporting country. '

(iv)

Actual import of goods is a condition precedent for imposition of anti dumping duty.

(v)

The oflfer or a profcrma invoice is not a concluded contract and there are various

judgements of courts ©» the WHWe Also proforma invoice is totally irrelevant since

there could be high* sea sates widen could divert the gooffls to some oth^eountry so

that it could not b&termtfd as imports.

(ti> i Designated i^tfeority ira the case ofPSF did not accept that the ^voice bating to the

subsequent imports took place by M/s Reliance which was ivithin the period of

• " • investigation and the actual import was outside the period of investigation.

(vii)

Tfefire is non-disclosure of information pertaining to cost of production for both the

domestic industry and the exporter and that this is denial ofnaturc ! justice. While

considering the cost of production for the petitioners, it should be borne in mind that

the Electro Chemical Unit (ECU) realisation price is wnportant.

(viii)

Is the prelirninary findings most of the information pertaining to Normal Value and

adjustments have been kept confidential and that NALCO submits that it should fir«t

be provided all the material for the purpose of natural justice and defence

(ist)

While constructing the cost of production of Caustic Soda in a foreign country like

Qatar, it is essential to consider the production of chlorine and the sales realisation

from chlorine also as has also been admitted by the petitioner during the oral hearing

that in foreign countries chlorine is the main product and caustic soda is the bye-

product.

(x)

The Authority should consider the fact that the exporter is not selling at a price less

than the Normal Value for the purpose of levy of anti dumping duty.

THE GAZETTE OF INDIA: EXTRAORDINARY

[PART I—SEC. 1 ]

INJURY, CAUSAL LINK AND OTHER ISSUES

(i)

Various judgements pertaining to interpretation of international law vis-a-vis

municipal law as have been indicated by NALCO for appropriate consideration.

(ii)

NALCO has also submitted that before the preliminary findings as per Section 12, a

hearing for the purpose of defence should been granted and that it is the pre-decisional

hearing prior to preliminary findings which is contemplated in the rules and not post-

hearing decision.

(iii)

Also the rules do not exclude a prior hearing before a preliminary findings.

(iv)

The cost of production in Qatar because of the cost of electricity is much lower and

that there could be no dumping.

(v)

The Rules and Acts does not admit to any conjectures and surmise but there has to be

sufficient evidence to show that dumping is taking place and secondly it has caused

material injury to the Domestic Industry.

(vi)

The price of caustic soda in India has been in accordance with the international price

of goods and has nothing to do with the price of imported goods.

(vii)

NALCO for its supply requirement had invited tenders for supply of caustic soda lye.

With present requirement of 2 lakhs MT of caustic soda lye (1 lakh MT of caustic

soda dry), the Indian manufacturers have offered quantities much lower than the

amounts required by NALCO making it unnecessary expensive for NALCO.

(viii)

The supplies are made by trucks carrying 10 MT only whereas normal shipment taken

by NALCO in the range of 5000 MT. The supplies made by the domestic suppliers

are of small quantities as compared to foreign suppliers and that the landed cost to

NALCO is higher in case of Indian suppliers. This adversely affects NALCO exports

ind competitiveness in the Indian market.

(ix)

There are fundamental errors in the preliminary findings. The analysis holds in

favour of no injury. It has been show that domestic sales, capacity utilisation,

production, net sales realisation have increased and that imports have decreased and

there are no imports in POI and that the demand has increased. Therefore all these

factors hold that there is no injury to the Domestic Industry. The Authority has been

totally arbitrary in holding that the net sales realisation in the POI has been below the

NIP. It is not clear as to how the NIP has been calculated.

(x)

The net sales realisation have noi taken into account the realisation from chlorine

EXAMINATION BY AUTHORITY

The foregoing submissions made by the exporter and the petitioner, to the extent

these are relevant as per Rules and have a bearing upon the case, have been examined,

considered and dealt with at appropriate places in these findings.

STANDING

OF THE PETITIONER.

PRODUCT

UNDER

CONSIDERATION AND LIKE ARTICLE

The Authority notes that there are no submissions made regarding the product under

consideration, like article and the standing of the Domestic Industry. The Authority,

therefore, proposes to confirm the findings on these aspects as indicated in the preliminary

findings dated 18.1.2002.

PRODUCT UNDER CONSIDERATION

The Authority recalls and reiterates Para C.I on the product under consideration of

the preliminary findings dated 18.1.2002 as under-

The product under consideration in the present investigation is Sodium Hydroxide

(chemical nomenclature NaOH), commonly known as Caustic Soda originating in or

exported from Qatar. Caustic soda is an inorganic, soapy, strongly alkaline and odourless

chemical and finds application in various fields like manufacture of pulp and paper,

newsprint, viscose yarn, staple fibre, aluminium, cotton, textiles, toilet and laundry soaps,

detergent, dyestuffs, drugs and Pharmaceuticals, petroleum refining etc.

Caustic soda is classified under chapter 28 of the customs Tariff Act, 1975 under

Customs Head 2815.11 and 2815.12. As per ITC Eight Digit classification, the product is

classified under the Custom Heading 2815.1101, 2815.1102 and 2815.1200. The

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

present investigation.

Caustic soda is produced in two forms, i.e. lye and solids by three technology

processes, i.e mercury cell process, diaphragm process and membrane process.

Caustic Soda can be imported under OGL and attracts a basic customs duty of 35%.

The present investigation covers all forms of caustic soda.

The Authority confirms the same in view of no submissions.

LIKE ARTICLE

The Authority recalls and reiterates Para C.2 on the Like Article of the preliminary

findings dated 18,1.2002 as under:-

The Authority notes that the petitioner has claimed that the goods produced by them

are like article to the goods produced, and exported from the subject country. Also both are

technically and commercially substitutable and the consumers are using the domestically

produced and imported goods interchangeably. It has been indicated that the Caustic soda

is processed by three processes viz.

Mercury cells process, diaphragm process and

membrane process world over. The difference in these processes does not mean difference

in product in terms of various characteristics. Also there is no significant difference in the

cost of production for the three processes. The petitioner has claimed that the goods

produced by them and those exported from Qatar are like article within the meaning of the

Rules.

THE GAZETTE OF INDIA: EXTRAORDINARY

[PART I—SEC. 1]

The Authority notes that the exporter from Qatar has submitted that the petitioners

have made certain assumptions about the cost and the manufacturing processes. The

exporter has indicated that as per their understanding there is a significant difference in the

power consumption for each of the three manufacturing processes and thus the costs

involved in each process. It has been submitted by the exporter that the Indian producers do

not have many outlets for Chlorine and that they consider Chlorine as a non-tradable

commodity and thus as a by-product while producing Caustic Soda. The exporter has

indicated that in their case Chlorine is the main raw material and they do not consider it as a

by-product. In fact Caustic is the by-product while producing Chlorine.

The Authority after noting the above submissions notes that while M/s QVC, the

exporter from Qatar has indicated the difference in costs for the three processess, there has

been no argument regarding any variation in the characteristics of the product exported by

them and that produced by the Domestic Industry. It is also not a claim by the exporter that

the goods exported by them and that produced by the Domestic Industry are not

interchangeable. The customers in India of the goods exported by M/s QVC have used the

exported goods and the goods produced by the Domestic Industry interchangeably being the

common customers.

The Authority confirms the same in view of no submissions by any interested parties

and holds that domestically produced goods and those exported by M/s QVC are like article

as per Rule 2(d).

STANDING OF THE DOMESTIC INDUSTRY

The Authority recalls Para C.2 on the Standing of the Domestic Industry of the

preliminary findings dated 18.1.2002 as under:-

The petition has been filed by M/s Alkali Manufacturers Association of India on

behalf of the domestic industry. The petition has been supported by M/s DCW Limited

Mumbai, M/s Gujarat Alkalies & Chemicals Ltd, Gujarat, M/s Search Chem. Industries

Ltd, Mumbai, M/s Grasim Industries Ltd, Madhya Pradesh and M/s Indian Rayon &

Industries Ltd., Gujarat. None of the domestic producers has opposed the petition. Thft

Authority notes that the five domestic producers who have supported the petition constitute

32.6% of the total domestic production and therefore have the standing to file the petition on

behalf of the domestic industry as per Rule 5(a) and (b) of the Anti-Dumping Rules.

Subsequent to the intiation M/s Siel Chemicals Complex, Patiala, Punjab, M/s Bihar

Caustic & Chemicals Ltd.. Bihar , M/s Jayshree Chemicals Ltd, Orissa and M/s Andhra

Sugars Ltd., Saggonda unit

have also supported the petition and furnished injury

information.

The Authority notes that there is no opposition to the petition by any of the domestic

producers and therefore confirms the standing of the Domestic Industry in view of no

submissions, and holds that the petitioner satisfies the condition as per rule 5(3) (a) and (b)

and represents Domestic Industry as per Rule 2(b).

DUMPING MARGIN

NORMAL VALUE

The Authority recalls its observations on the Normal Value in the disclosure

statement that it has been indicated by M/s Qatar Vinyl Company (QVC) that there are no

domestic sales of the subject goods in their country. Also it has been indicated that the

constructed cost of production indicated for M/s QVC by the petitioner is not correct and

that there is no relevance of project report as far as exporter's response to the questionnaire

is concerned. The exporter has also indicated that there is a wide variation in the cost of

power in India and Qatar which is one of the major constituents for the production of

Caustic Soda.

The Authority after noting the above submissions by various interested parties had

carried out on spot verification of the exporter on 10^th and 11^th September, 2002 and has

appropriately considered the concerns of the interested parties while looking at the

submissions and the data provided by the exporter. The Authority in view of the various

submissions made by the Domestic Industry and the exporter on the determination of the

Normal Value had proposed to reference the cost of production of M/s QVC for Normal

Value so verified during the on site verification of the records of the exporter conducted by

the verification team on 10^th and 11^th September, 2002 at Doha, Qatar.

The Authority in disclosure had indicated that during the verification of M/s QVC at

Doha also noticed that there was no domestic sales during the POI for the subject goods in

Qatar. It was indicated by the exporter that there are certain sales of vary small quantities to

their shareholding company i.e M/s QAPCO which however were not at the market price

The Authority in view of these submissions and data so verified had proposed to reference

the cost of production of the subject goods during the POI for M/s QVC as ****$/MT and

with a reasonable profit margin has evaluated the Normal Value as ****$/MT.

The

Authority notes that during the verification the exporter indicated that during the POI they

were operating at a capacity utilisation of 72% which was a trial production stage and not

commercial production. The Authority had observed in the disclosure that such a level of

capacity utilisation cannot be termed as trial production and that the actual cost of

production during the POI has to be considered for the determination of the Normal Value

and had therefore indicated to consider the cost of production and the Normal Value on the

basis of the actual production during the POI.

The Authority notes that it has been indicated by the exporter that 72% of the

production during the POI was actually a trial production only and that the design of the

plant was such that 72% could be termed only as trial production. It has also been indicated

by the exporter that it is not clear as to why the Authority has not referenced the third

country exports as the basis of the normal value. The Authority also notes that the Domestic

Industry while reiterating its submissions on the Normal Value as made

earlier has

indicated

that the Authority may confirm the findings in view of the verification so

THE GAZETTE OF INDIA: EXTRAORDINARY

[PART I—SEC. 1]

conducted. The Authority after noting the above submissions reiterates that during the

period of investigation which has been so considered, it is the actual cost of production data

which is of relevance and which has therefore been considered for the purpose of evaluating

the normal value. The Authority also notes that during the on spot verification of the

exporter, the data pertaining to exports made to various countries during the POI was also

referenced. However for the purpose of referencing the third country exports, the Authority

notes that the appropriate third country in terms of quantity of exports and being in the

Asian region could be Malaysia. The representative , viable and in ordinary course of trade

export price to Malaysia during the POI also correlates

with the Normal Value so

constituted for the exporter. Also the Authority notes that even if the so called projected

capacity utilisation as per project report is referenced, then reasonable profit would be the

profit envisaged in the project report, the Normal Value then evaluated on the projected

profit mark up on the FOB sales would also co-relate with the Normp! Value so constructed

by the Authority. Therefore the Authority notes that the Normal Value constructed on the

basis of the actual cost of production during the POT is realistic as it correlates well with the

data on the third country exports and even as indicated in the project report.

The Authority has therefore referenced the Normal Value as ****$/MT,

EXPORT PRICE

The Authority recalls that in the disclosure it was indicated that the exporter has

provided the CIF export price contracted during the POI and the supplies made in pursuance

of this thereafter outside the POI as ****$/MT. The exporter had provided evidence

regarding various adjustments on CIF price on ocean freight, ocean insurance, marketing fee

to M/s Atofina, credit cost and port expenses to an extent of ****, ****, ****, **** and

**** respectively.

The ex-factory export price on the basis of the various adjustments was proposed to

be considered as ****$/MT. The Authority in view of no submission in this regard,

proposes to confirm the ex-factory export price as ****$/MT.

OTHER NON-COOPERATIVE EXPORTERS/PRODUCERS

As regards the other non-cooperative exporters/producers, the Authority had

proposed to consider in the disclosure the Normal Value as determined for M/s QVC for

these exporters/producers as well keeping in view the fact that there are no domestic sales

and that the cost of production in Qatar for M/s QVC would also be relevant for the other

exporters/producers.

As regards the ex-factory export price, the Authority had proposed to allow an

adjustment on account of inland freight on the export price for the non-cooperative

exporters/producers which led to an ex-factory export price of ****$/MT. The Authority in

view of no submissions confirms the ex-factory export price as ****$/MT.

Based on the above, the dumping margin comes to ****$/MT(47%).

Dumping-Comparison of Normal Value & Export Price

The Authority recalls that in disclosure statement it had indicated the views of the

various interested parties pertaining to no exports by M/s QVC made during the POI. The

Authority had indicated the submissions by the exporter regarding the definition of

dumping, relevant provisions of the Customs Tariff Act, Hon'ble Supreme Court

judgements cited, regarding the term 'imports' and contract and also the rule position

pertaining to duties of the Designated Authority to evaluate the incidence of dumping. It

was also indicated by the exporter that that in view of the no imports/exports during the POI,

there is no incidence of dumping and that the further tests pertaining to this cannot be

applied. The Authority in this regard had noted the submissions made by ihe Domestic

Industry regarding the practices of EU and US. The Authority also noted that in case of anti

dumping investigation of Catalyst from Denmark, a judgement upheld by the Hon'ble

Supreme Court, Authority had categorically held that the comparison for dumping margin

has to be made for sales and not for imports.

The Authority also noted the submission that it had categorically been indicated in this

case that it was the price contract which leads to price undercutting and that the supply being

made outside the POI was of no direct significance. The Authority noted that it has also in

the past in its various determinations which included Catalyst from Denmark, PIB from EU,

Singapore, Thailand, Japan, Brazil and Korea RP and Seamless Tubes

from

Austria,

Czech Republic, Russia and Ukraine has considered the aspect of tender prices for the

purpose of evaluation of export price and thereafter even for the purpose of levy of anti

dumping duty. The Authority also noted that South Africa in one of the cases of Antibiotics

against India had also considered the tender prices for the purposes of determination of the

export price. On perusal of the Article 2.1 of the WTO Agreement on Anti Dumping, the

Authority notes that the basic tenet of dumping is indicated to be introduction of the goods

into the commerce of the country. In view of the fact that the contracts/tender prices when

quoted lead to price undercutting and these are actually translated into shipment leading to

injury even though the dumped goods may be sent outside the period of investigation. The

Authority therefore notes that in case of M/s QVC, a letter of credit (LC) was opened with

one of the importers during the month of September, 2001 i e with the POI and the

correspondence which had led to a conclusion of this LC was even much prior to the date of

letter of credit. The process of negotiation of the dumped goods had therefore started well

within the period of investigation and therefore the impact of these offers on the prices

prevailing in the domestic market is what is relevant. The Authority notes that the argument

of the exporter regarding the proforma invoice not being a contract is negated by the fact

that their also exists a letter of credit during the period of investigation. The Authority notes

that as regards the judgements pertaining to imports being cited by the exporter, the

Authority considers it appropriate to reference the judgement in case of imports of Catalyst

from Denmark which was upheld by the Hon'ble Supreme Court and is of direct relevance

being an anti dumping investigation case judgement.

THEGAZETTEOFINDIA: EXTRAORDINARY

[PARTI—SEC. 11

The Authority notes that in response to the disclosure while Domestic Industry have

again reiterated their submissions, the exporter has mentioned that the confusion on the

jurisdiction to determine the dumping margin and the jurisdiction to levy the anti dumping

'uty is misplaced since the two issues are intimately linked as there can be no collection of

ay anti dumping duty without determination of a dumping margin. In fact the Section 9A

of the Customs Tariff Act has indicated as unequivocal in this regard. The Authority after

noting the above submissions holds that in case of Catalyst which has been upheld by the

Hon'ble Supreme Court the Authority had referenced the tender prices for determination of

the export price. It was clearly indicated in the determination that " the Authority has

observed that the majority of catalysts are sold through tenders. There is a considerable time

lag between the price contract and the date of actual delivery. The rules provides that

comparison is required to be made in respect of the "sales" and not imports. The rules

further provide that due allowance shall be made in each case, on its merits, for differences

which affect price comparability. The Authority observes that it is the price contract which

leads to price undercutting or underselling causing injury to the Domestic Industry, the fact

that the deliveries may be made outside the investigation period is of not direct

consequence". In view of the same, comparisons have been made between the Normal

Value and the export prices contracted during the investigation period without reference to

the period of actual import/deliveries.

The Authority also notes that in the past in the determinations of PIB from EU,

Singapore, Thailand, Japan, Brazil and Korea RP and Seamless Tubes from Austria, Czech

Republic, Russia and Ukraine the Authority has referenced the tender prices which were the

tender (quoted) prices and not the export prices of physical exports made during the POI.

Further the Authority also notes that during the verification of the exporter, a letter of credit

was identified which were opened with an Indian buyer for supply of the goods to India.

The Authority also notes that as per Annexure 1 of the Anti Dumping Rules in Sub-Rule

(6), the Authority has to determine the margin of dumping by making a fair comparison

between the export price and the Normal Value. The Authority therefore holds that in this

the export price is well established by the proforma invoice or the letter of credit whichever

is available in respect of the sales transactions to India.

The Authority has therefore

appropriately determined the dumping margin as indicated above.

The rules relating to comparison provides as follows:

"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 weighted average normal value comparison with the

weighted average ex-factory export price for the goods contracted for exports in Period of

Investigation, for evaluation of the dumping margin for all the exporter/producers of the

subject country.

The dumping margin for exporter/producers comes as under:

Exporter

OATAR

M/s

Qatar

Vinyl

Company

(QVC) Ltd.

All

other

exporters/

producers

Qatar

Normal

S/MT

*****

value(NV)

Export

S/MT

*****

Price(EP)

Dumping

margin

IT %0fEP

INJURY AND CAUSAL LINK

Under Rule 11 supra, Annexure-II, when a finding of inju»^ is arrived at, such

finding shall involve determination of the injury to the domestic incustry, "

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 impoi is 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.

For the examination of the impact of the dumped imports on the domestic industry in

India, we may consider such 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. in accordance with Annexure II(iv) of the rules

supra.

As regards the threat of injury, the Authority notes that the Anti-Dumping Rules

states as follows:

"A determination of a threat of material injury shall be based on facts and not merely

on allegation, conjecture or remote possibility. The change in circumstances, which would

create a situation in which the dumping would cause injury, must be clearly foreseen and

'1HEUA7FTTEOF INDIA-EXTRAORDINARY

| PAR i 1 - Sic. I]

imminent. In making a determination regarding the existence of a threat of material injury,

the DA shall consider, inter-alia, such factors and;

a significant rate of increase of dumped imports into India indicating the likelihood

of substantially increased importation;

sufficient freely disposable or an imminent, substantial increase in capacity of the

exporter indicating the likelihood of substantially increased dumped exports to

Indian market, taking into account the availability of other export markets to absorb

any additional exports;

whether imports are entering at prices that will have a significant depressing or

suppressing effect on domestic prices, and would likely increase demand for further

imports; and,

inventories of the article being investigated.

The Authority has also reexamined the injury data as provided by the petitioner and

observes the following economic parameters in the case of domestic producers who had

supported the petition initially and other domestic producers who have subsequently

supported and provided injury information after initiation:-

Capacity

Production

Capacity

utilisation

Sales (MT)

Net

Sales

Realisation

Cost

production

(Rs/MT)

Profitability

(Rs/MT)

Total imports

Imports from

Qatar

Market share

imports

from Qatar

Demand

(MT)

1998-99

723564

528367

73.02

450729

*•**

****

94452

1509061

1999-2000

729100

669488

91.82

530357

****

*•**

*+•*

86743

1461626

2000-01

729100

675681

92.67

536339

****

*•+*

73621

1496113

POI (1.1.2001

to 30.9.2001)

546825

492653

90.09

382758

****

29022

3202

11.03

1111110.345

Annualized

POI

729100

656871

90.09

510344

****

38696

4269

11.04

1481480

Market share

in demand

Imports as %

of demand

Participating

companies

share as % of

demand

Imports from

Qatar as % of

demand

6.26

29.87

0.00

5.93

36.29

0.00

4.92

35.85

0.00

2.61

34.45

0.29

2.61

34.45

0.29

The domestic sales has increased from 450729 MT in 1998-99 to 530357 MT in

1999-2000 and further to 536339 MT in 2000-2001. In the POI, the annualised

domestic sales has been 510344 MT.

The capacity utilisation has increased from 73.02% in 1998-99 to 91.82% in 1999-

2000 and to 92.67% in 2000-2001. In the POI, the capacity utilisation has been

90.09%.

The production has increased from 528367 MT in 1998-99 to 669488 MT in 1999-

2000 and further to 675681 MT in 2000-2001. In the POI, the annualised production

has been 656871 MT.

The Net Sales Realisation has been **** Rs/MT in 1998-99 which has increased to

**** Rs/MT in 1999-2000 and to Rs. •**+ Rs/ MT in 2000-2001. In the POI, the

Net Sales Realisation has been to **** Rs/ MT.

The Net Sales Realisation in the POI has been below the Non-Injurious Price thus

leading to financial losses.

The imports of the subject goods have decreased from 94452 MT in 1998-99 to

86743 MT in 1999-2000 and to 73621 MT in 2000-2001. The imports of the subject

goods have further decreased to 29022 MT in POI (Annualised 38696 MT).

The imports from Qatar were Nil till 2000-2001. Exports of 3202 MT were quoted

by the exporter in the POI which constitute 11.04% of the total imports of the

subject goods in POI. These exports from Qatar which were indicated by proforma

invoice are significant as compared to earlier periods and are above the de-minimus

level of 3%.

The Authority also notes that the exporter in Qatar has set up a plant primarily for

the purposes of export as the demand in the home market of Qatar is not significant.

TlirOA/hnCOrINDIA FXI'RAORDINARY

[PAKI I—Src. 11

by the recent dumped imports, the Authority holds that the exports from Qatar are an

imminent threat to the domestic producers of the subject goods in India

The Authority notes that the capacity of the exporter M/s Qatar Vinyl Company from

Qatar is of an order of ****$/MT which was verified during the on site verification

The Authority also notes that this capacity is significant in view of the fact that there

is no available demand in Qatar and that the exporter is primarily into international

business and is exporting the subject goods to various countries including India The

Authority notes that as per Annexure II of the Ami Dumping rules one of the

parameters pertaining to threat of material injury is to examine as to whether there is

a significant rate of increase of dumped imports into India which indicate the

likelihood of substantial increased importation

The Authority in this regard notes

that during the on site verification, exporter M/s QVC had indicated that their long-

term contract for supply to countries other than India The Authority notes that the

contracts which have been committed over a period of 3 to 5 years by M/s QVC are

not for the entire capacity and that even after consideration of such long-term

contracts, there is surplus disposable capacity which is available with the exporter for

sales to other non-contracted countries The Authority in this regard has also noted

the submissions made by the Domestic Industry in response to the disclosure that as

per DGCI&S between October, 2001 and March, 2002 there have been exports of an

order of 17000 MT of subject goods to India from Qatar Also it has been indicated

that from the other secondary sources in 2002 about 30000 MT material has been

exported by the exporter and that the prices have been significantly lower

The

Authority therefore notes that while only 3202 MT which were contracted during the

POI, the exports subsequent to the POI from October, 2001 to March, 2002 have

been to an order of 13633 MT which represents a significant increase. The Authority

therefore holds that there being sufficient non-contracted quantity of subject goods

for the next three years with M/s QVC and that there has been significant rate of

increase of dumped goods beyond the POI thereby implying that the likelihood of

substantial increased importation is imminent and to. a great extent has also become

real in view of the substantial post-POl imports Also the average prices at which

the imports have taken place during the post-POI period imply that these imports are

significantly depressing and suppressing the domestic prices

Thus the authority

holds that the dumped goods are a threat of material injury to the Domestic Industry

INDIAN INDUSTRY'S INTEREST & OTHER ISSUES

The Authority notes that M/s NALCO have indicated that their requirement is of

much higher quantities and that the truck supplies made by the Domestic Industry are

insufficient It has also indicated that the landed cost to M/s NALCO is much higher in case

of the Indian suppliers It has also been further indicated by M/s NALCO that on account of

the anti dumping duty, their export pricing and competitiveness would get affected in the

international market

The Authority after noting the above submissions holds that the

comparison for the purpose of injury is being done at the ex-factory level which does not

include the element of freight

The aspect of dumping is also to be evaluated at the ex-

factory level. The Non-Injurious Price (NIP) considered for the Domestic Industry during

the POI is done with the landed value as defined in Para 6 of this determination Thus it is

only the ex-factory level which the Authority considered for the purpose of determining the

extent of injury as per its consistent practice.

The Authority also holds that the purpose of anti-dumping duties, in general, is to

eliminate injury caused to the Domestic Industry by the unfair trade practices of dumping so

as 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 also recognises that though the imposition of anti-dumping duties

might affect the price levels of the products manufactured using the subject goods and

consequently might have some influence on relative competitiveness of these products in

export market as submitted by M/s NALCO, however, fair competition in the Indian market

will not be reduced by these 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 consumers. Imposition of anti-dumping measures

would also not restrict imports from the subject country in any way, and, therefore, would

not affect the availability of the products to the consumers. The Authority also notes that

there are specific schemes available under the Export-Import policy under which M/s

NALCO could import for the purpose of export production.

LANDED VALUE

The landed value of imports for the purpose shall be the assessable value as

determined by the customs under Customs Tariff Act, 1962 and applicable level of custom

duties except duties levied under Section 3, 3A, 8B, 9, 9A of the Customs Tariff Act, 1975.

CONCLUSIONS:

It is seen, after considering the foregoing, that:

The subject goods in all forms originating in or exported from the subject country

have been exported to India below its normal value.

The significant disposable capacity for export purposes available with the exporter

since there is very low home consumption demand in Qatar and the recent dumped*

imports have caused price depression and is an imminent threat to the domestic

producers of the subject goods in India in view of recent increased imports.

The domestic industry has also suffered material injury by way of financial losses

due to depressed Net Sales Realisation (NSR) on account of price depression caused

by low landed prices of the dumped subject goods

The injury has been caused to the domestic industry by dumping of the subject goods

originating in or exported from the subject country.

I HC GAZETTE OF INDIA EXTRAORDINARY

[PAKTI— SEC 11

The Authority recommends anti-dumping duty on imports of subject goods falling

under Chapter 28 originating in or exported from the subject country

It was considered to recommend the amount of anti-dumping duty equal to the

margin of dumping so as to remove the injury to the domestic industry accrued on

account of dumping Accordingly, it is proposed that anti dumping duty equal to the

difference between the amount as indicated in Column 3 of the Table below and the

landed value in $/MT be imposed, by the Central Government, on all imports of

subject goods originating in or exported from Qatar under Chapter 28 Customs sub-

headiqgj.2815 11 and 2815 12 of the Customs Tariff

SI. No.

Name of the exporter/producer

Qatar

M/s Qatar Vinyl Company(QVC) Ltd.

All other exporters/producers in Qatar

Amount (USS/MT)

267.82

271.10

Subject to above, the Authority confirms the preliminary findings dated 18 1 2002

An appeal against this order shall lie to the Customs, Excise, Gold (Control)

Appellate Tribunal in accordance with the Act Supra

LV SAPTHARISHI, Designated Authority &Addl Secy.

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