MINISTRY OF COMMERCE
NOTIFICATION
FINAL
FINDINGS
SUBJECT: - Anti-dumping investigation concerning imports of
Dead Burnt Magnesite (DBM) originating in or exported from the
People’s
2. The
Procedure described below has been followed: -
(i)
The Designated Authority (hereinafter referred to as the Authority) notified
Preliminary Findings vide Notification No. 7/2/94-ADD, dated the 10th June,
1996 and requested the interested parties to make their views known in writing within
forty days from the date of its publication;
(ii)
Forwarding a copy of the Preliminary Findings, all known interested parties were
requested to furnish their views, if any, on the preliminary findings within forty days of
the date of the letter;
(iii)
The Authority also forwarded a copy of the Preliminary Findings to the Embassy of
the People’s Republic of China (referred to as China PR hereinafter) in New Delhi
with a request that the exporters and the other interested parties in China PR may be
advised to furnish views on the Preliminary Findings:
(iv)
In accordance to Rule 16 of the Rules supra, the essential facts/ basis
considered for these findings were disclosed to all the known interested parties and
comments were sought on the same, which have also been duly considered.
3. The petitioner in response to the Preliminary Findings made the following submissions: -
(a)
The petitioner had requested for imposition of Anti-dumping Duty amounting to Rs. 5800/- per MT against which the Authority recommended
provisional duty ranging between Rs. 1333/- to 1925/- only.
(b)
The Authority should ensure that the landed price of DBM having MgO content greater than 92% is not less than the landed price of
the reference grade DBM. A floor price should be fixed below which Chinese DBM of any
quality should not be permitted to be imported into
(c)
The reduction in Customs Duty should be considered for recommending definitive
Anti-dumping Duty.
VIEWS OF EXPORTERS, IMPORTERS AND OTHER INTERESTED PARTIES:
4. The importers and exporters have expressed their views, and the same are briefly mentioned below: -
(a)
On “Like article”:
1. The
petitioner has failed to clearly describe the product.
2. The conclusion arrived at by the Authority at para 11 of the preliminary findings about like article is erroneous.
3. DBM is a generic term and has different grades, each having a particular purpose and is not inter-changeable.
4. DBM having 85.89% MgO content is not imported by the members of IRMA.
5. The classification of DBM with reference to MgO content only is erroneous, other important factors such as Silica content and bulk density should also be considered. In view of this and non-availability of DBM with less than 4% Silica content, the Government of India had earlier permitted imports at confessional duty.
6.
DBM produced in
7.
DBM having 90-92% MgO content and less than 4% Silica
content is not produced in
(b)
On
1. Normal Value of DBM with 90% MgO content was RMB 426.67 per MT (or US $ 40.64 per MT) on the basis of domestic prices prevailing in China PR, and the same corresponds to FOBT (Free on Board Transfer) price of exports to India and the same is evidenced from an invoice raised in the China PR.
2.
Fax message from Mineral Resources Company Ltd. shows that Normal Value in
3.
Export Price from China PR to
4.
The cost of production cannot be constructed for China PR in any other surrogate
Country due to the following reasons:
(i)
(ii)
The manufacturing process in
(iii)
The overburden ratio in China PR is approx. 1 : 2.5 as
against 1: 8/9 in
(iv)
Per capita production in China PR is much higher (212.5 MT) compared to
c.
On Export Price:
It is incorrect to work out FOB Export Price from CIF Export Price by deducting
ocean freight as the basis and principles of the two are different. Further it is grossly
incorrect to work out ex-works Export Price from
d.
On injury:
The major issues with regard to the issue of material injury to the Domestic
Industry are as under:
1.
The petitioner has not disclosed its production of reference grade DBM It is
difficult to comment on the injury suffered by the petitioner unless the production
figures are made known.
2.
The petitioner has failed to provide grade-wise installed capacity of its members.
3.
Due to technological changes in the steel industry, demand for DBM having MgO content less than 90% is reducing.
e.
On Casual Link:
There is no causal link between imports from China PR and injury the Domestic
industry for the following reasons:
1.
DBM being imported from China PR has MgO content 90% or
above and therefore, cannot affect the Domestic Industry producing DBM having 85-89% MgO content.
2.
Production of DBM having 90-92% MgO content in the
Country in the Country is negligible.
3.
Reduction in production for the Domestic industry was due to recession in the Steel
industry and labour trouble in the mines.
f.
On other issues:
1.
Since DBM having MgO content of 90% and above is not
available in the country, the user industry would be adversely affected with the
imposition of Anti-dumping Duty.
2.
Levy of Anti-dumping Duty is not proper in view of the liberalization policy of the
Government.
3.
DBM is being imported to cover the shortfalls in indigenous supplies as the
indigenous sources have not been able to supply the ordered quantities.
4.
All the Indian manufacturers have increased prices by about Rs.
1,000 per MT in the month of July, 96.
5.
Although the product covered in the investigation relates to DBM having MgO content ranging between 85-92%. Govt. of
5. The submissions made by the petitioner and importers have been examined and considered by the Authority while arriving at these endings and, wherever appropriate, have been dealt hereinafter.
6.
The Authority confirms, in the absence of any direct response from the exporters
from China PR in the form and manner prescribed, having made these findings on the basis
of the facts available to it as per rule 6(8) supra.
7. Under Rule 2(d) “like article” means an article which is identical or alike in all respects to the article under investigation for being dumped in India or in the absence of such an articles, another article which although not alike in all respects, has characteristics closely resembling those of the articles under investigation.
8.
The product under consideration which has been investigated for dumping has been
defined in para 10 of the preliminary findings. Submissions
have been made by the exporters/ importers that the goods produced by the domestic
industry in India are not like articles as various important factors such as silica
content, bulk density etc. have not been taken into consideration by the Authority while
determining the scope of “like article” for the purpose of this investigation.
9.
The Authority notes that the articles produced by the domestic industry have the
characteristics closely resembling those of article under investigation and therefore the
criteria prescribed in the definition under Rule 2(d) are adequately satisfied. It is not
necessary that all characteristics features or properties of the product under
consideration should be matched particularly in view of the fact that the articles
imported from China PR have substituted the articles produced by the domestic industry
both commercially and technically.
10. The
Authority therefore confirms paras 9-13 of the Preliminary
Findings relating to the definition of like articles and confirms that the reference grade
DBM exported to India originating in or exported from China PR and produced by the
Domestic Industry are like articles within the meaning of the rules supra.
11. Under Section 9A(1) (c) normal value in relation to an article means:
(i)
the comparable price in the ordinary course of trade for the like article when
meant for consumption in the exporting country on territory as determined in accordance
with the rules made under sub-section (6) : or
(ii)
when there are no sales of the like article in the ordinary course of trade in the
domestic market of the exporting country or territory or when because of the particular
market situation low volume of the sales in the domestic market of the exporting country
or territory, such sales do not permit a proper comparison, the normal value shall be
either-
(a)
comparable representative price of the like article when exported from the
exporting country or territory or an appropriate third counter as determined in accordance
with the rules made under sub-section (6) ; or
(b)
the cost of production of the said article in the
country of origin along with reasonable addition for administrative selling and general
costs, and for profits as determined in accordance with the rules made under sub-section
(6).
Provided that in the case of import of the article from a country other than the
country of origin and where the article has been merely transshipped through the country
of export or such article is not produced in the country of export or there is no
comparable price in the country of export, the normal value shall bed determined with
reference to its price in the country or origin.
12. The
Authority had sent exporters questionnaires to all the known exporters for the purpose of
determination of normal value in terms of the section cited above. However, the Authority
notes that note of the exporters from China PR has cooperated with the Authority and no
information has been furnished in the form and manner prescribed. None of the exporters
from China has also offered itself for verification by the Authority.
13. M/s.
Sima Resources Gmbh, an exporter
from Germany (referred to as Sima, Resources hereinafter) has
submitted relevant information to the Authority in the prescribed form and manner, Sima Resources has merely transshipped the goods originating from
China PR and therefore the Normal Value has to be determined with reference to the country
of origin i.e. China PR informs of proviso to sub-section 1© of section 9A. It has
submitted to a copy a price contract (in Chinese language) through its authorised agent M/s. Magus Marketing Private Ltd., Calcutta. The
Authority observes that the invoice produced by the said exporter is totally
incomprehensible and does not provide any indication whatsoever to enable the Authority to
arrive a comparable price in the ordinary course of trade in terms of clause (c)(i). Moreover, in view of the particular
market situation in China PR its being a non-market economy and in the view of the
non-availability or relevant information, the Authority has no option but to resort of clause (c)(ii0
of section 9A for the determination of the Normal Value.
14. Under
clause (c)(ii) of section 9A(i),
the Authority has the clear option of resorting either to sub-clause (i)(a)
or (ii) (bb), Sima Resources has supplied a copy of their proforma invoice for supply of
DBM to Egypt. There is not other information or evidence made available to the Authority
for determination of normal value under sub-clause (ii) (a). The Authority considers that
the solitary proforma invoice can neither be considered as
comparable nor representative price of the like article. Under the circumstances, the
Authority considers it appropriate to determine the normal value in terms of sub-clause
(ii) (b) on the basis of cost of production
with appropriate adjustments.
15. The
Authority conducted cost investigation on the premises of the two of the petitioner
companies after preliminary determination and based on facts collected, normal value has
been reworked out. The Normal Value has been considered at US$ 163 per MT. The Normal
Value has been reduced compared to Preliminary Findings as the cost of production
constructed by the Authority for China PR has come down after full verification of the
data furnished by the petitioner.
16. Except
as detailed in the foregoing, the Authority confirms the paras
16 to 19 of the Preliminary Finding with regard to Normal Value of reference grade DBM
from China PR.
17. Sima Resources filed response in the form and manner prescribed by
the Authority. The Authority has therefore, worked out ex-works
Export Price for Sima Resources on the basis of data is
furnished by it. Since the exporter has furnished as purchase price ex-Bayuquan, the same have been treated as ex-works in the absence of
further information with regard to the expenses upto the port.
18. The
exporters other than Sima Resources have failed to furnish
ex-works export price and in the absence of any co-operation from the exporters, The Authority notes
that ex-works Export Price have to be worked on the basis of the difference in the FOB and
CIF quotations, as furnished by the one of the importers. M/s. Burn
Standard Company, in accordance with the principle of best available information.
The Authority has treated FOB Export Price as ex-works Export Price in the absence of any
evidence on the inland freight in China PR.
19. Except as detailed in the foregoing, the Authority confirms the paras 20 to 24 of the Preliminary Findings with regard to Export Price of reference grade DBM from China PR.
20. The
Authority confirms the paras 25 to 26 of the, preliminary
findings with regard to comparison and export price and normal value.
21. The
Authority had disclosed, in sufficient detail, parameters (including production of
reference grade DBM by the petitioner) relating to the material injury suffered by the
Domestic Industry. The contention with regard to disclosure of reference grade DBM
production figures is, therefore, not acceptable. The interested parties had the
opportunity, to comment on the production figures disclosed by the Authority in the
Preliminary Findings, but no such submissions were made.
22. The
Authority has worked out the fair selling price in the Preliminary Findings at an optimum
level of capacity utilizations, thus nullifying effects of declining demands, if any.
23. The
Authority notes that the petitioner Companies were not required to furnish grade wise
installed capacity of its members in the non-confidential version of the petition, as the
product under investigation is the reference grade DBM
and therefore, the petitioner was required to furnished details for the product
under investigation as a whole. Moreover, the Authority had in the Preliminary Findings,
disclosed in sufficient detail, factual information relating to capacity utilisation by the petitioner, which is directly related to
installed capacity of the petitioner.
24. The
Authority notes that the petitioners were not getting remunerative prices for their
produce during the period of investigation, as detailed in the Preliminary Findings, and
were forced to sell at prices mush lower than the cost of production, which could have
resulted in its inability to supply the ordered quantities. Moreover, inability to supply
goods does not debar the petitioner from claiming relief under the rules.
25. The
information relied upon by the Authority in paras 29 to 37 of
Preliminary Findings with regard to the injury to the Domestic Industry has also not been controverted.
26. It
is clarified that the Authority has not merely relied upon the submission of the
petitioner regarding fair selling price. The Authority deputed a team consisting of Cost
Accountant for on-the-spot investigation and has worked out, in detail, the fair selling
price of reference grade DBM in India for the domestic industry. Since the same is based
on confidential data furnished by the petitioner the Authority refrains from discussing
the details.
27. After
considering the arguments raised by the interested parties the Authority confirms paras 27 to 39 of the Preliminary Findings relating to injury to the
domestic industry.
28. The Authority has considered imports of DBM having 85-92% MgO content and has excluded DBM having above 92% MgO content.
29. The
Authority has considered production of reference grade DBM by the petitioner and the same
is not negligible.
30. The
Authority has worked out Fair selling price of the Domestic Industry and therefore, the
effects of extraneous factors like recession in the Steel Industry and or labour trouble in the mines, if any, are nullified.
31. the
information relied upon by the Authority in paras 29 to 37 of
Preliminary Findings with regard to the injury to the Domestic Industry has also not been controverted.
32. The Authority after considering
all related issues, confirms para 40 of the Priliminary Findings with regard to causal link between dumping of
DBM from China PR and injury to the domestic industry.
33. The
increase in selling prices by DBM producers in the month of July 1996 is a factor beyond
the scope of present investigation, as the period of investigation considered by the
Authority is 1.4.93 to 31.3.94. However, in case the facts and circumstances have
materially changed after the period of investigation, an interested party can approach the
Authority with a review request.
34. The
Authority had recommended in its Preliminary Findings imposition of anti dumping duty on
DBM having MgO content between 85-92% and not on all type of
DBM. The Authority has considered imports of reference grade DBM and not grade-wise
imports. Further more injury to the domestic industry has been assessed for the reference
grade DBM.
35. It
is reiterated that the current rate of customs duty change in selling price of reference
grade DBM by petitioner and other changes consequent to the investigation period are
outside the scope of this investigation. However, any party to the investigation may
request the Authority for review of the present findings, in accordance with the Rules
supra.
36. The
purpose of anti-dumping duties as detailed in paras 41 to of
the Preliminary Findings, is to remove dumping which has caused injury to the domestic
industry and to re-establish a situation of fair competition and not to restrain imports
from any specific source.
37.
The Authority has, after considering the foregoing come to the conclusion that:
(i) The reference grade DBM of Chinese origin has been exported to India below its normal value.
(ii) The
domestic industry has suffered material injury.
(iii)
Injury has been caused to the Domestic Industry by imports from China PR
38. The
Authority therefore, confirms paras 47 to 49 of the
Preliminary Findings an recommends the imposition of final
Anti-Dumping Duties on all imports of reference grade DBM originating in or exported from
China PR at the rates specified below:
Name of the
Exporter |
Amount of Duty (Rs. per MT) |
China Metal Imports
and Exports Corpn, China |
705 |
Sima
Resources Gmbh, Germany |
1264 |
China Soungang International Trade and Engg. Corpn., China |
1150 |
Exporter other than
above |
1264 |
39.
Subject to above, the
authority confirms the preliminary findings notified on 10.6.1996.
DIPAK
CHATTERJEE, Designated Authority