MINISTRY OF COMMERCE
Subject: Anti-dumping
investigation concerning imports of Low Carbon Ferro Chrome (LCFC) originating in or
exported from
47/ADD/94—Having
regard to the Customs form Act, 1975 as
amended 1995 and the Customs Tariff (Identification, Assessment and Collection of Anti
Dumping Duty, on Dumped Articles and for Determination of Injury) Rules, 1995-thereof.
2.
The Procedure described below has been followed:
(i)
The Designated Authority
(hereinafter referred to as the Authority) notified preliminary Findings vide Notification
No. 47/ADD/94 dated the 23rd May, 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
Russian and
(iv)
The Authority has concluded
the investigation within the extended time limit allowed by the Central Government
(v)
The Authority held a public
hearing on 11.10.96 to hear views orally. All the parties attending the public hearing
were requested to file written submission of the views expressed orally. The parties were
advised to collect copy of the views expressed by the opposing parties and were requested
to offer their rebuttals, latest by 24.10.96.
(vi)
In accordance to Rule 16 of
the Rules supra, the essential facts/basis considered for these findings were disclosed to
all known interested parties and comments received on the same have also been duly
considered in these findings.
3. The petitioner in response to the Preliminary Finding made the following submissions:
(i)
(ii)
The Authority should
consider factors prevailing during period of investigation and the latest prices of LCFC
are not relevant. It may also possible that the exporters have temporarily raised the
prices to give the impression that they are nor dumping.
(iii)
The custom duty has been
reduced from 50% at the time of filing petition to 27% at present. If the same is
considered the landed cost of the material stands further reduced.
(iv)
The amount of Anti-dumping
Duty recommended by the Authority is substantially and significantly less than what such
rate should have been, particularly in case of M/s. Derek Raphel
and Co. Ltd.,
(v)
It appears that the fair
selling price adopted by the Authority is less than the fair selling price submitted by
the petitioner. The rate of Anti dumping Duty in case of the two exporters mentioned in
the above para is lower by about Rs.
8000/-.
4. The
importers and exporters have expressed their views and the same are briefly mentioned
below:
(a) Exporters:
(i)
M/s. SYNCERT replied that
it was impossible to provide the information requested by the Authority in Rs. since rate of exchange kept on changing and was rather unstable.
The questionnaire sent by the Authority did not give exporters fair chance to respond.
(ii)
The
contention of the petitioner that the information with regard to Normal Value was not
available is unacceptable. Russian Ministry of Metallurgy published the price of LCFC on a
monthly basis for 1993 and 1994.
(iii)
(iv)
(v)
LCFC imported in
(vi)
Since the prevailing market
prices are much higher than the period of investigation, the whole issue is irrelevant.
(b) Importers and
Other Interested Parties:
(i)
The
Authority has not completed the investigation within the time limit prescribed under the
Rules, including the extended time period.
(ii)
Cost of Production worked
out by the Authority for the purpose of
(iii)
There is substantial price
difference in LCFC depending upon the carbon content in the Ferro Alloy. The Authority
should classify carbon content while calculating Normal Value.
(iv)
The imports
of LCFC have shown significant increase because of almost negligible imports in the
preceding years. The Steel industry faced recession resulting in decline in production.
The decline in production in case of petitioner is almost equivalent to the decline in
production of stainless steel for which LCFC is used.
(v)
A large number of consumers
have changed technology resulting in decline in demand for LCFC.
(vi)
Comparison of the prices of
HCFC and LCFC are nor irrelevant for the purposes of the investigation as observed by the
Authority in the Preliminary Findings. The price difference between the two in the
international market s Rs. 19/- per kg. Compared to Rs. 40/- per kg in case of
(vii)
The imposition of Anti
Dumping Duty would benefit only the monopoly producer.
(viii)
While disclosing the
essential facts in terms of rule 16 supra, the Authority has not disclosed the data on
which the cost of production is based. They have also desired to know the Normal Value and
the injury margin. It has been contended that the information sought by them would be
necessary for them to submit a reply.
5. The submissions made by the petitioner, exporters, importers and other interested parties have been examined and considered by the Authority while arriving at these findings and wherever appropriate, have been dealt hereinafter. The comments made subsequent to the disclosure of the essential facts have also been appropriately dealt with hereinafter.
6. The
Authority confirms, in the absence of any direct response from the exporters 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
article, 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 investigation for dumping has been defined in para
10 of the preliminary findings, which is Low Carbon Ferro Chrome (widely known as LCFC)
having carbon content ranging between 0.03% to 0.20% and Chromium content ranging between
65% an 70%.
9. The
Authority notes that the articles produced by the domestic industry have characteristics
closely resembling those of article under investigation and therefore the criteria
prescribed in the definition under Rule 2(d) are adequately satisfied. The Authority also
notes that the articles imported originating from
10. The Authority confirms
paras 11-13 of the preliminary findings and confirms that LCFC
produced by the Domestic Industry is like article to the LCFC exported to
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 or 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 in the
exporting country or territory, or when because of the particular market situation or 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 country 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 or profits, as determined in accordance
with the rules made under sub-section (6):
Provided that in the case of
imports 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, the normal value shall be determined with reference to
its price in the country or origin.
12.
The Authority had sent exporters questionnaire 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 none of the exporters have co-operated with the Authority and no
information has been furnished in the form and manner prescribed. None of the exporters
has also offered itself for verification by the Authority.
13. The contention of M/s.
SYNCRET that it was impossible to provide information requested by the Authority in Indian
rupees is unacceptable. The Authority had asked for the information in US$ along with
applicable exchange rate. In view of the fact that the exporter never stated any
difficulty to the Authority before the preliminary findings, the contention of the
exporter is without any force.
14.
The contention of exporter that the information about prices being regularly
published by the Ministry of Metallurgy in Russia in 1993, 1994 remains unsubstantiated as
neither any of the exporters nor any other interested parties
have furnished any such published prices. The contention being unsubstantiated,
is rejected.
15. All the exporters have
merely transshipped the goods originating from Russia and Kazakhstan and therefore the
Normal Value has to be determined with reference to the country of origin i.e. Russia and
Kazakhstan in terms of proviso to sub-section 1(c) of section 9A.
16. The Authority notes
that in view of the market situation in Russia and Kazakhstan and in view of the
non-availability of relevant information, the Authority considers it appropriate to resort
to clause (c) (ii) of section 9A for determination of the Normal Value.
17. Under clause (c)(ii) of section 9A(i) the Authority has
the clear option of resorting either to sub-clause (ii) (a) or (ii) (b).
Since sufficient information is not available for working out normal Value in
accordance with sub-clause (ii) (a) because of non-co-operation from the exporters, 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.
The Authority has, therefore worked out normal value on the basis of cost of
production in the country or origin. None of the exporters has co-operated with the
Authority and furnished factual information with regard to cost of production, and the
information furnished by the importers is insufficient. The
Authority has worked out cost of production on the basis of the best information available
in accordance with the Rules which authorize the Authority to work out cost of production
in the country or origin on the basis of facts available with it. The Authority has,
therefore, worked out cost of production in Russia and Kazakhstan on the basis of cost
data on the Indian industry. However, since power rates are reported by the petitioner to
be much lower in Russia, the Authority has considered power rates prevailing in Zimbabwe
for constructing cost of production in Russia and Kazakhstan. The Normal Value has been
considered at US$ 163 per MT. The same level of Normal Value have
been considered for all the exporters.
18. Except as
detailed in the foregoing the Authority confirms the paras 14
to 18 of the Preliminary Findings with regard to Normal Value of LCFC for Russia and
Kazakhstan.
19. The
exporters have failed to furnish ex-works export price and the absence of any co-operation
from the exporters, the Authority notes that ex-works Export Prices have to be worked out
on the basis of the information made available by the petitioner in the form of
photocopies of Bills of Entry and Invoices 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 Russia and Kazakhstan.
20. Except as
detailed in the foregoing, the Authority confirms the paras 19
to 26 of the Preliminary Findings with regard to Export Price of LCFC.
21. The Authority confirms the paras 27 to 29 of the Preliminary Findings with regard to comparison of Export Price and Normal Value.
22. The
Authority had disclosed, in sufficient detail, parameters relating to material injury
suffered by the Domestic Industry. The interested parties had the opportunity to comment
on these parameters disclosed by the Authority in the Preliminary Findings.
23. The
Authority has worked out the fair selling price in the Preliminary Findings at an optimum
level of capacity utilization, thus nullifying the effects of declining demand, if any.
24. The
information relief upon by the Authority in paras 32 to 39 of
Preliminary Findings with regard to the injury to the Domestic Industry has also not been controverted.
25. It is
clarified that the Authority has not merely relief upon the submissions of the petitioner
regarding fair selling price. The Authority deputed a team consisting of Cost Accountants
for on-the-spot investigation and has worked out, in detail, the fair selling price of
LCFC 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.
26. After
considering the arguments raised by the interested parties the Authority confirms paras 30 to 40 of the Preliminary Findings relating to injury to the
domestic industry.
27. The
Authority has worked out Fair Selling Price for the Domestic Industry and therefore, the
effects of extraneous factors like recession in the Steel industry, if any, are nullified.
28. The
information relief upon by the Authority paras 30 to 40 of
Preliminary Findings with regard to the injury to the Domestic Industry has not been controverted.
29. The
Authority after considering all related issues, confirms para
41 of the Preliminary Findings with regard to causal link between dumping of LCFC
originating from Russia and Kazakhstan and material injury to the domestic industry.
30. The Authority notes that LCFC having varying carbon content result from the same identical production process, and does not require any special equipment, extra material, extra processing to produce LCFC of varying carbon content.
31. The
contention of the M/s. All India Induction Furnace Association (AIIFA) that the
investigation had not limit starts from the date of initiation and not from the date of
dumping allegation. In the instant case the investigation were initiated on and the final
findings are required to be notified by 5th December, 1996 as the period of 12
months was extended by a further 6 months as detailed in para
supra.
32. The
current rate of customs duty, changes in selling price of LCFC by the petitioner and any
other changes subsequent 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.
33. As regards
the argument that the producers in
34. With
regard to lower Anti Dumping Duty than requested by the petitioner, it is found that the
petitioner’s calculations are based on customs duty @ 30%. Custom duty during 1994-95
was @ 50% which was brought down to 30% in the following year.
35. It is
incorrect to say that petitioner is not producing LCFC having carbon content between 0.15% and 0.25%. it is clear even from he evidence attached by the AIIFA that FACOR is
quoting its prices for the said grades.
36. FACOR is
not a monopoly producer. AIIFA, who has raised the argument, it self has attached evidence
that the product is being produced by others also in
Moreover the purpose of anti-dumping duties, as detailed in paras
42 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
contention with regard to price difference of LCFC and HCFC is incorrect and irrelevant to
the present proceedings. The Authority has, however, not done a detailed investigation
with regard to HCFC, the same being an article beyond the scope of the present
investigation.
38. Decline in
demand for LCFC, if any, has been taken care of by considering fair selling price at
normative level of capacity utilization.
39. The
current national and international prices of LCFC are irrelevant for the present
investigation and, therefore the arguments in this regard are rejected.
40. It is
clarified that the Authority has worked out Normal Value, Export Price and fair selling
price for LCFC having 66.1% Cr. Content and distinction with regard to Carbon content has
been ignored.
41. Except as
detailed in the foregoing, the Authority confirmed the paras
19 to 26 of the Preliminary Findings.
42. The
Authority has, after considering the foregoing come to the conclusion that:
(i) LCFC
originating in or exported from
(ii) The
domestic industry has suffered material injury;
(ii)
The injury has been caused
to the Domestic Industry by the exports originating in or exported from
43. The Authority
therefore, confirms paras 47 to 49 of the Preliminary Findings
and recommends imposition of final anti-dumping duties on all imports of LCFC originating
in or exported from
S. No. |
Name of the Exporter and
Place |
Normal Value (US$/MT) |
I |
Country of Origin – Russian
|
|
Derek Raphael & Co.,
|
10,900 |
|
Norcalloys
SA, Luxemburg
|
17,400 |
|
Norcalloys
LP,
|
18,600 |
|
Societe Anonyme Des Minerals, Luxemburg
|
12,300 |
|
|
16,900 |
|
Exporters other than above
|
18,600 |
|
II. |
Country of Origin- Kazakhistan
|
|
Societe Anonyne Des
Minerals
Luxemburg
|
18,500 |
|
Exporters other than above
|
18,500 |
44. Subject to above, the
Authority confirms the preliminary findings dated 23.5.1996.
DIPAK CHATTERJEE, Designated Authority