Final findings

Subject: Anti-Dumping Investigation concerning imports of Aniline from European Union – Final Findings.

No.21/1/2000-DGAD.- The Government of India having regard to the Customs Tariff Act, 1975as amended in 1995 and the Customs Tariff (Identification, Assessment and Collection of Anti-dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995, thereof:

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

i. The Designated Authority (hereinafter referred to as Authority), notified Initiation of anti dumping investigation vide notification dated 29^thMay,2000 and Preliminary Findings vide notification dated 16^th November, 2000 and requested the interested parties to make their views known in writing within 40 days from the date of its publication.

ii. The Authority forwarded a copy of Preliminary Findings to the known interested parties who were requested to furnish their views, if any, on the preliminary findings within 40 days of the date of the letter

iii. The Authority also forwarded a copy of the preliminary findings to the Delegation of European Union in India with a request that exporters and other interested parties may be advised to furnish their views on the preliminary findings.

iv. The Authority provided an opportunity to all interested parties to present their views orally on 13.2.2001. Further, all the parties presenting views orally were requested to file written submission of the views expressed orally. The parties were advised to collect copies of the views expressed by the opposing parties and offer rebuttals, if any.

v. The Authority made available the public file to all interested parties containing non-confidential version of all evidence submitted by various interested parties. All interested parties who made request for inspection, in writing, were allowed to inspect the public file;

vi. 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 have been considered in the preliminary findings and/or these findings.

vii. In accordance with Rule 16 of the Rules supra, the essential facts/basis considered for these findings were disclosed to known interested parties and comments received on the same have also been duly considered in these findings.

viii. The period of investigations (POI) covered is 1^st April, 1999 to 31^st December 1999 ;

ix. *** in this notification represents the information furnished by an interested party on confidential basis and so considered by the Authority under the rules;

x. The country involved in the present investigations is European Union (also herein after referred to as subject country) and the period of investigation for the present investigation is 1^stApril,1999 to 31^st December,1999;

2.1 They have drawn the attention of Designated Authority that the claims of exporters, namely, M/s. BASF, Germany and Bayer AG, Germany have not exported Aniline to India during the period of investigation hence these companies attract new shipper revenue condition, as laid down under Rule 22 of Anti-dumping Rules.

2.2 On injury and causal link, the petitioners have stated that anti-dumping investigations against USA and Japan resulted in imposition of anti-dumping duty. Injury to the domestic industry and the adverse affects of dumped imports on the domestic industry is, therefore, required to be seen alongwith dumping in USA and Japan.

2.3 Import volumes from European Union increased during period of investigation. Though demand for Aniline increased, imports increased at significantly higher rates, which resulted in increase in share of imports from European Union in the demand of Aniline in India.

2.4 Production and sales of domestic industry increased. However, the domestic industry was forced to reduce selling prices in view of the dumped imports.

2.5 Raw material Benzene forms a major cost of production of Aniline. While the prices of raw material increased the industry could not effect legitimate price increase. Landed value of imported material was below the selling price of the domestic industry resulting in severe price undercutting.

2.6 Landed value of imported material was significantly below the cost of production.

2.7 As regards to imposition of duty they have requested that the duty may be recommended in terms of US $ only as in the Preliminary Findings.

The Petitioners have pointed out that the issue of dumping is not open to an importer. This issue can, at best, be raised by an exporter only. In fact, CEGAT has prevented an importer even from arguing on the issue of dumping margin. So far as the exporters are concerned, no objection has been raised by the exporters in this regard, which itself shows that there is dumping.

As regards to calculation Of Landed Value, petitioners have pointed out that while calculating landed value, the association has considered SAD 4% and port expenses for calculation of landed value, whereas for calculation of landed value, preliminary findings states as under:

SAD, which has been added by the association for calculation of landed value, can not be included to calculate landed value, as sales tax is also not included for the purpose of determination of net sales realization. Further, CEGAT has already held that port expenses can not be added for calculation of landed value.

It has been argued that there is no dumping of Aniline from European Union. The Association has alleged present export price of US $ 650 pmt. It is clarified that the post investigation export price is not at all relevant to determination of the dumping in the investigation period.

Year	Loss
1996-97	100
1997-98	127
1998-99	221
Investigation period	620

As regards to initiation of anti dumping investigations, the opposing interested parties have mentioned that the investigation has been initiated on the basis of information contained in a trade magazine, which is not correct.

Petitioners have submitted that for the purpose of the initiation, the Designated Authority requires prima facie evidence of dumping. In the petition, the domestic industry has established dumping on the basis of information provided by a trade magazine, which was sufficient to establish prima facie dumping. Upon initiation, the Designated Authority has provided due opportunity to the exporters from European Union to respond and provide the information in the form and manner prescribed by the Designated Authority. No exporter from European Union has responded to the Designated Authority. Such being the case, the issue of dumping margin can not now be raised by importers or their Association.

They have reiterated that the issue of determination of normal value and dumping margin can not be argued by an importer or user Association, as they are not privy to the relevant information.

As regards to arguments with regard to domestic industry's inability to meet the demand, Petitioners have submitted that the statement of the association is factually incorrect as is evident from the table below. The demand of Aniline in India and capacities with the Indian industry were as under:

Particulars	1997-98	1998-99	POI	1999-00*
Imports from Subject Countries	251	172	2652	3536
Imports from Japan/USA	5298	5065	0	0
Imports from other Countries	259	41	43	57
Sales of domestic industry	38373	35820	31468	41957
Demand	44181	41098	34163	45550
Installed Capacity	48500	54100	40575	54100

It is evident from the above that the industry has sufficient capacity to meet the demand. Such being the case, it is not understood how the interested parties have argued that the domestic industry is not able to meet the demand of Aniline in India.

They have submitted that the industry is not required to be able to meet the demand of the product in the country before seeking the relief. The Designated Authority has notified anti-dumping duties on a number of the product wherein the demand of the product have been far higher than the capacities available in the country. Moreover, Imposition of anti-dumping duty does not restrict imports in any way. Such being the case, the users would be free to source their material as per their choice.

As regard to argument that the theory of price undercutting is false and untrue. Petitioners have submitted that the argument is factually incorrect and deserves to be ignored. The data submitted clearly show that there is significant price undercutting in the investigation period.

As regards to association argument that there were no imports of Aniline in Aug-Dec 99 and, therefore, there was no injury in that period, Petitioners have submitted that injury to the domestic industry has to be seen in whole of the investigation period and not in a month or a day. They have stated that the imports as well as other injury parameters are required to be seen in the investigation period as a whole. Ill effect of a large import consignment on the domestic industry is felt on a much longer period.

The association has stated that the petitioners’ allegation of dumping is against Germany only and, therefore, duty should be imposed against Germany only and not against European Union.

There are many producers of Aniline in the European Union. There is no custom boundary in European Union and the prices prevailing in the European Union are in the same region. The imposition of anti-dumping duty will not be effective without imposing duty against imports of Aniline from the European Union as a whole as other producers may start dumping Aniline (after imposition of anti-dumping duty) at prices at which it was exported in the investigation period, resulting in continued dumping in the Indian market. Even circumventing Anti-dumping duty by the exporters/producers would not be difficult. The Designated Authority is requested to impose anti-dumping duty against imports from the European Union, as has been done in many other cases.

Further, as also stated in the preliminary findings, producers who have responded to the Designated Authority have stated in their response stated that these producers have not exported Aniline to India in the investigation period. Evidently, there are other exporters in European Union who has exported Aniline to India. Thus, imposition of anti-dumping duty cannot be effective without imposing duty against European Union as a whole. Petitioners have requested the Designated Authority to confirm anti-dumping duty against European Union as a whole.

It has been stated by the association that the imposition of anti-dumping duty on imports of Aniline will lead to increase in their cost of production, which may lead to increase in the imports of dyestuff from China.

Petitioners have submitted that the theory and practice of the Designated Authority is to save both interested parties. In case, there is any threat of injury to the downstream industry, they are free to approach the Designated Authority or any other appropriate authority and not in creating hurdles for the Aniline industry to get adequate protection of anti-dumping duty against dumping resorted by the producers and other exporters from European Union.

As regards to inadequate capacity of domestic industry to fill the gap between demand and supply, the petitioners have already represented that due to lack of demand, the domestic industry has been forced to operate their plant at reduced capacity and have carried substantial inventories during the period of investigation. They have reiterated that inability of domestic industry to meet the demand is no reason for not imposing anti-dumping duties as the imposition of anti dumping duty would merely bring prices to a fair level and would not restrict the imports into the country. Hence, the availability of product cannot suffer on this count.

As regards the arguments raised by GDMA that import of Aniline is inevitable due to export of various products, petitioners have reiterated that anti-dumping duty is not payable against imports for export production.

As regards to indication of present export price of Aniline at US $ 650 per MT it is reiterated that present export price is not relevant to decide the issue of dumping causing injury to the domestic industry in the investigation period.

As regards to argument that prices in Europe were about US $ 650-655 PMT during period of investigation, the export price to India during the same period were at an average of US$ 413 PMT(CIF). Considering the ocean freight and other expenses the Ex-factory realisation to the exporters were far lower than the price of US$ 650 PMT quoted by GDMA. This proves dumping.

The petitioners have also pointed out CEGAT rulings in a number of cases that the issue of dumping and dumping margin is not open for an importer to argue. The importer (user association) is no privy to the actual information required for assessment dumping and dumping margin. Hence the argument is required to be rejected on this count.

The petitioners have stated that the user industry’s claim that Dupont’s submission of US $ 150 PMT as the conversion cost of the product, there is no basis for this claim or the importer or the user association is privy to such data.

As regards to increase in prices of Aniline after the period of investigation the same is not relevant to raise the issue of dumping or injury in the investigation.

Referring to a meeting called by GDMA and Dyestuff Manufactures Association of India at Bombay on 21.3.2001 to discuss the offer made by M/s.NCPL at the instance of Designated Authority during the public hearing to exporter, the option of supplying material to the consumer at a fair value, the users have not shown very keen interest in such a meeting. The petitioners have reiterated that the purpose of seeking anti dumping duties were merely to remove the unfair advantages of dumping gained by the exporters and short term gains taken by the consumers.

As regards to M/s BASF, the company has not exported any material during the investigation period. Without any exports, no separate assessment could be done by the Authority. The companies, who have not exported any material in an investigation period are required to file an application for "New Shipper Review" before the Designated Authority.

Further, with regard to determination of normal value in European Union on the basis of response filed by the BASF, petitioners have submitted that the BASF has not exported any material in the investigation period to India. The exporter, who has exported in the investigation period, has not responded to the Designated Authority. Determination of normal value for non-cooperative exporters on the basis of response filed by the exporter will lead to a reward by the Designated Authority for their non-cooperation. Petitioners have submitted that the normal value for non cooperative exporters should not be determined on the basis of response filed by the exporter who has not exported any material to India in the investigation period and is entitled for a "New Shipper Review" under rule 22 of Indian Anti-Dumping Rules.

The producers of Aniline in Germany have stated that they have not exported Aniline during the period of investigation. However, they have furnished some information on sales in home market. M/s BASF has requested that the normal value be based on their information furnished.

They have stated that M/s. BASF during the Public Hearing, asserted that the normal value indicated by the petitioners may be prices charged for small volume drum lots and the regular prices should be lower for large bulk shipments.

M/s.BASF offered to submit information on normal value despite not having exported any production during POI.

They have stated that the contentions of the petitioners that the prices have been increased by marginal amount of Rs.1500 per ton after imposition of anti-dumping duties against EU in November does not hold water since price hikes have been regular and sustained in the past periods.

Injury to domestic industry has not been established in terms of volume, price realisation and profitability. Further causal link between dumping and injury has not been established.

As regards to price undertaking between producers and consumers of Aniline, M/s. NCPL preferred cost plus price arrangement and both interested parties may be given adequate time to discuss and arrive at mutually acceptable arrangement.

As regards to import statistics they have submitted that petitioners cannot claim confidentiality with regard to information collected by them from Kandla Port.

They have stated that assuming that the two manufacturers of Aniline in Germany referred to by the petitioners have been exporting Aniline to India does not establish that the same has caused or threatened to cause material injury to the petitioners.

The importers have stated that levy of anti-dumping duty has badly affected rubber chemicals, pigment and dyestuff manufacturing units.

Small scale producers who prefer to purchase raw material packed in barrels from indigenous manufacturers vis-à-vis imported Aniline if imported in barrels caused additional imports unviable.

The anti dumping duty on Aniline is harming very interest of the down stream units due to high cost of inputs.

They have stated that there is no dumping of Aniline by manufacturers/traders of European Union. The international price of suppliers from EU does not hurt the domestic manufacturers because the landed cost of Aniline imported is higher than price charged by the domestic industry.

They have stated that the domestic manufactures have continuously increased their prices of Aniline, which has affected the cost of various down stream products of Aniline consumers.

The price information based on Trade Magazine is not reliable and cannot be treated as a confidential information.

The aggregate capacity of domestic manufacturer is less than the demand in the country. Hence, there is bound to be imports of Aniline into the country.

Since the allegation of dumping are only in respect of two manufacturers in Germany the petitioners who seek imposition of duty of Aniline originating from Germany only and not anywhere from European union.

The importers have stated that coincidentally local prices of three products on which anti-dumping has been imposed namely, Aniline, Sodium Nitrite and Caustic Soda have increased substantially. The domestic industry has been increasing their prices at the cost of consuming industries.

M/s. GDMA had requested that grant of hearing to submit their case in the present anti-dumping investigations. The meeting was held on 20.3.2001. They have stated that they had submitted their objections and suggestions based on Gazette Notification dated 21.11.2000. However, they did not receive copies of rejoinders submitted by the domestic manufacturers in this regard. The import of Aniline is inevitable to bridge demand and supply gap.

They have stated that prices of Aniline have been increased in the domestic market during August 2000 to April 2001 by the petitioners.

They have stated that the domestic manufacturers of Aniline were not able to produce and supply the product Aniline due to their domestic and other problems faced by them. The international prices of Aniline have been low as raw material prices have also come down during the period.

3.1 As regards to imposition of anti-dumping duty against Japan and USA would naturally culminate in improvement of domestic prices of Aniline.

3.2 As regards to imports volumes shifted from Japan/USA to Europe it is clarified that the volumes from Japan/USA are nil during POI compared to increased volumes from European Union.

3.3 As regards to copy of non-confidential version of response from other interested parties the same has been placed in the Public File for inspection by any interested party.

3.4 As regards to representation from GDMA it is clarified that they had not responded to the investigations before the Preliminary Findings nor they attended the public hearing on 13.2.2001. However, on representation for request for grant of hearing, Authority permitted them to put their views and the same has been considered in the final findings.

3.5 As regards to some interested parties arguments that the annulisation of various data is wrong, it is clarified that the investigation period in the present investigation is nine months. In order to compare the imports in the investigation period with previous period, it could be in terms of monthly data or in terms of yearly data. For the purpose of uniformity the previous years data has been compared with annualized data for the period of investigation. Further, In so far as the issue of ratio is concerned, it need be appreciated that the ratio remains unchanged whether the annualized data is taken or the absolute data is taken.

3.6 The association have argued that imposition of Anti Dumping Duty on imports of Aniline will adversely affect the down stream products industry, as it will lead to increase in the prices of Aniline in the Indian market, which will result in increase in cost of production of dye stuff industry.

3.7 While it is not disputed that the imposition of Anti Dumping Duty will result in increase in prices of Aniline in the Indian market, it is clarified that the issue of public interest as explained in para K on ‘Indian Industries Interest and Other Issues" of the findings.

3.8 As regards to M/s BASF, the company has not exported any material during the investigation period. Without any exports, no separate assessment could be done by the Authority. The companies, who have not exported any material in an investigation period are required to file an application for "New Shipper Review" before the Designated Authority.

3.9 As regards to M/s BASF furnishing information on normal value, Authority notes that when the company has not exported the good under consideration the assessment of normal value cannot be done and the information furnished is not relevant for assessing the normal value for other exporters who have not cooperated with the anti dumping investigation. In the circumstances the information furnished by M/s BASF has not been considered.

3.10 As per rules the determination of dumping margins are exporter specific. As M/s BASF have not exported product under consideration during the period of investigation, there is no question of determining dumping margin for them separately based on the information furnished by the company.

3.11 In the above circumstances, Authority notes that the company is required to file an application for "New Shipper Review" after completion of the present investigation.

4. The foregoing submissions made by the petitioner, exporters, importers and other interested parties, to the extent these are relevant as per Rules and to the extent these have a bearing upon the case, have been examined and considered and have been dealt with at appropriate places in these findings.

5. The product under consideration in the present investigation is aniline also known as Aniline oil. Aniline is a transparent, oily. Colourless to pale yellow liquid when freshly distilled. It darkens on exposure to light or air. Aniline is a primary amine compound and a basic organic chemical essential for vital industries such as drugs, pharmaceuticals, dyes and dye intermediates. Aniline is also used in some other industries such as rubber chemicals, explosives, resins etc.

Aniline is an intermediate for Rubber Chemicals (vulcanization, accelerators, antioxidants), Dyes, Drugs such as analgin, Sulpha drugs, Photographic chemicals (hydroquinone), Isocyanates (MDI or Methylene Diphenylene Di-Isocyanate). In India, 70% of the production of Aniline is used in rubber chemicals, drugs and drug intermediates and dye industries, whereas 80% of production of Aniline world-over is used in MDI.

Aniline is classified under Chapter 29 of the Customs Tariff Act, 1975, under custom sub-heading no. 2921.41. The classification is however indicative only and in no way binding on the scope of the present investigations.

"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 article, another article which although not alike in all respects, has characteristics closely resembling those of the articles under investigation."

6.2 Aniline is product and sold in specifications as per ISI standards, which depict the properties of the chemical. The quality of Aniline is described in terms of its purity. The standard quality of Aniline normally contains 99.8% purity by weight. There is however, no significant difference in terms of process, equipment or technology for the production of aniline.

6.3 The Authority finds that Aniline produced by the petitioners and the subject product imported from European Union are comparable in terms of characteristics such as physical and chemical characteristics, manufacturing process and technology, function and uses, products specifications etc. The two are technically and commercially substitutable.

6.4 In light of the foregoing, Authority concludes that Aniline produced by the petitioner is a Like Article to the Aniline imported from European Union.

7.0 M/s. Hindustan Organic Chemicals Ltd. (HOCL), M/s. Narmada Chematur Petro Chemicals Ltd. (NCPL), and M/s. Anirox Pigments Ltd., have jointly filed the petition. These three units are the only producers of Aniline in India. The petitioner companies, therefore, account for total domestic production and have the required standing to file the petition under the Rules.

7.1 In light of the foregoing, the Authority concludes that the petitioner has the standing to file the petition on behalf of the domestic industry under the rules.

(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 of 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 3)the cost of production of the said article in the country of origin alongwith 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 be determined with reference to its price in the country of origin".

8.1 M/s BASF : They have stated that they have not exported Aniline during the Period of Investigation. They have also requested that the normal value be based on their information furnished in their home market and have indicated that they intend to export Aniline to India in near future.

8.2 M/s Bayer: They have stated that within the investigation period 1^st April to 31^st December, Bayer AG has not exported Aniline to India.

8.3 Authority notes that the Two exporters, viz. M/s BASF, Germany and M/s Bayers AG, Germany have stated that they have not exported Aniline during the POI and may request for separate assessment as a new shipper - Rule 22 supra.

8.4 As regards to M/s BASF furnishing information on normal value, and some interested parties claim that the determination of normal value for Germany to be based on the same, Authority notes that the information provided by the company is not sufficient to determine normal value. The company has furnished factory cost and profit of domestic sales for the period of investigation and exports to countries other than India, they have not furnished any details /working calculations linking to their audit and accounts which would demonstrate that the product was sold above cost of production. It also does not establish that they have sold the subject goods in their home market or to the countries other than India in ordinary course of trade. The Annual Report for 1999 seems to be consolidated one. Very little is reported about the product under consideration. The company has furnished some selective invoices with respect to their home sale in German language without corresponding English version. Authority further notes that when the company has not exported the good under consideration the assessment of normal value cannot be done and the information furnished is not relevant for assessing the normal value for other exporters who have not cooperated with the anti dumping investigation. In the circumstances the information furnished by M/s BASF with regard to normal value has not been considered.

8.5 In view of the non-submission of information to the questionnaire by any other producers/ exporters from EU, the Authority have been constrained to rely upon best available information with regard to normal value and export price as provided by the petitioners and the best information available with it.

8.6 The petitioners have provided evidence relevant to POI with respect to prices in Europe based on a Magazine Chemical Week UK which reported CIF prices of Aniline in European markets in the region of US $ 880 – 925 PMT. The Authority relies upon the claim made by the petitioner with regard to normal value as at ex-factory in European Union and as the best information on record. The normal value is determined at US $ *** PMT.

8.7 The petitioners have provided the export data as reported by Directorate General of Commercial Intelligence & Statistics (DGCI&S, Calcutta) for the period April-December, 1999. The volume of imports from EU is reported at 1251.7 MT and have claimed adjustments on account of Ocean freight, commission, inland transportation, port handling to arrive at ex-factory export price.

8.8 The import data as reported by Customs daily list, Kandla Port indicates the volume of 2652 MT from European Union during the POI, which is much higher than that reported by DGCI&S. The Authority has relied on the import data for POI as reported by Customs. The Authority has allowed adjustments on account of Ocean freight, commission, inland transportation, port handling charges and export price (ex-factory level) has been accordingly determined, at US $ *** PMT.

8.9 The Rules relating to comparison provides comparison of normal value and export price provides as follows:

"While arriving at margin of dumping Designated Authority shall make a fair comparison between the export price and the normal value. A comparison shall be made at the same level of trade, normally at ex-works level and in respect of sales made and as nearly possible the same time. Due allowance shall be made in each case on its merits, for differences which occur price comparability including differences in conditions and terms and sales, taxation, levels of trade quantities, physical characteristics and any other differences which are demonstrated to affect price comparability."

8.10 For the purpose of fair comparison between normal value and export price the Authority took into account the information furnished by the petitioner and other published information available with the Authority. The normal value and export prices determined as detailed above are at ex-works level. The comparison of normal value and export price works out to a dumping margin of ***PMT. The dumping margin expressed as a percentage of export price for EU works out to 166.17%.

9.0 Under Rule 11 supra, Annexure-II, When a finding of injury is arrived at, such finding shall involve determination of the injury to the domestic industry, "… taking into account all relevant facts, including the volume of dumped imports, their effect on price in the domestic market for like articles and the consequent effect of such imports on domestic producers of such articles…." In considering the effect of the dumped imports on prices, it is considered necessary to examine whether there has been a significant price undercutting by the dumped imports as compared with the price of the like 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;

Rule (iii) of the Annexure II to the Rules requires that in case imports of a product from more than one country are being simultaneously subjected to anti-dumping investigation, The Authority will cumulatively assess the effect of such imports. Such assessment can be, however, made only if it is determined that:

a) the margin of dumping established in relation to the imports from each country is more than two percent expressed as percentage of export price and the volume of the imports from each country is three percent of the import of the like article or where the export of individual countries less than three percent, the imports collectively accounts for more than seven percent of the import of Like Article and

b) cumulative assessment of the effect of imports is appropriate in light of the conditions of competition between the imported article and the like domestic articles.

9.1 The Authority notes that the margin of dumping and quantum of imports from subject country are more than the limits prescribed above. Cumulative assessment of the effects of imports is appropriate since the export prices from the subject country were directly competing with the prices offered by the domestic industry in the Indian market.

9.2 For the examination of the impact of imports on the domestic industry in India, the Authority has considered such further indices having a bearing on the state of the industry such as quantum of Imports production, capacity utilisation, sales quantum, stock, market share, profitability, net sales realisation, the magnitude and margin of dumping etc. in accordance with Annexure II (iv) of the rules supra.

As may be seen from the above, the volume of imports from EU which was 251 MTs during 1997-98 increased to 2652 MT (3536 MT Ann.) in 1999-2000. The share of European Union in total imports raised from 4.3% in 1997-98 to 98.4% in POI. The volume of imports from Japan,USA which was 5298 MT (97-98) reduced to Nil during POI. It is noted that the anti-dumping investigations for alleged dumping from Japan/USA were in progress before the initiation of the present investigation against EU.

While the market share in demand with respect to European Union have increased manifold from 0.6% (97-98) to 7.8% (POI). Market share with respect to domestic industry has also shown increase from 86.8% (97-98) to 92.1% (POI).

As seen the market share in demand for Japan/USA in previous years has been shared by major proportion by EU and to a small extent by a domestic industry during the POI.

It is observed that the production capacity, production and capacity utilization of the petitioner companies (viz., HOCL, NCPL and Anirox Pigments) were as under:

Year	Capacity (MT)	Production (MT)	Capacity Utilisation %
1996-97	48100	40435	84.06
1997-98	48500	47254	97.43
1998-99	49100	41780	85.09
POI(Apr-Dec)	36825	32768	88.98
Annualised	49100	43689	88.98

The production of domestic industry decreased from 47254 MT in 1997-98 to 43689 MT (Ann.) during the period of investigation. The capacity utilization which was 97.43% during 1997-98 decreased to 88.98 during POI.

1997-98	1998-99	POI	Annualised
38373	35820	31468	41957

The domestic industry has lost substantial sales in 1998-99. Though the sales have improved in the current year, the same is at the cost of substantial losses made by the individual units in respect of Aniline operations.

1997-98	1998-99	POI	Annualised
2226	2252	2881	3841

It may be observed that the closing stock of petitioners were 2226 MT during 1997-98 have increased to 2881 MT during POI.(April-Dec.99)

9.7 Price undercutting:- The landed price of imports from EU is significantly lower than the selling price of domestic industry. As such the domestic industry is selling at prices significantly below their cost of production. The imports from EU are thus causing severe price undercutting of the domestic industry.

	1997-98	1998-99	POI(Apr to Dec /99)
HOCL	100	93	88
NCPL	100	89	81
Anirox	100	98	87
Average for Domestic Industry	100	91	85

As seen from the above the domestic sales prices in terms of % have declined during POI compared to 1997-98. The Authority notes that imports were undercutting the prices of Indian industry to a significant degree. This has prevented the industry from increasing their selling prices.

9.10 The Authority, after considering the above, concludes the domestic industry has suffered material injury from imports of Aniline originating from EU.

10.0 The Authority notes that there have been no major fluctuations in demand for Aniline in India. The domestic industry is one of the smallest producers of Aniline in the world and the capacity of Indian industry is adequate to meet the demand for Aniline in India. The global prices of Aniline dropped significantly in 1998-99 and had an impact on the prices at which it was imported to India. This affected the operations and profitability of the domestic producers as aniline was dumped by major international manufacturers. During the period of investigation.

10.1 In establishing that the material injury to the domestic industry has been caused by the imports from the subject countries, the Authority holds that the increase in market share of imports from European Union resulted in reduced market share of the petitioners. The domestic industry failed to match the landed price of the imported product on account of the rise in prices of the inputs/feedstock required for the manufacture of aniline. Prices of petroleum, fuel oil and benzene started firming up from 1996 onwards. Imports from the subject countries undercut the prices of the domestic product forcing the domestic industry to sell at un-remunerative prices. Resultantly, the domestic industry incurred losses. The material injury to the domestic industry was, therefore, caused by the dumped imports from the subject country.

11.0 The purpose of anti-dumping duties, in general, is to eliminate dumping which is causing injury to the domestic industry and to reestablish a situation of open and fair competition in the Indian market, which is in the general interest of the country.

11.1 It is recognized that 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. However, fair competition in the Indian market will not be reduced by the anti-dumping measures, particularly if the levy of the anti-dumping duty is restricted to an amount necessary to redress the injury to the domestic industry. On the contrary, imposition of anti-dumping measures would remove the unfair advantages gained by dumping practices, would prevent the decline of the domestic industry and help maintain availability of wider choice to the consumers of aniline. Imposition of anti-dumping measures would not restrict imports from the subject countries in any way, and therefore, would not affect the availability of the product to the consumers.

11.2 To ascertain the extent of anti-dumping duty necessary to remove the injury to the domestic industry, the Authority relied upon reasonable selling price of Aniline in India for the domestic industry, by considering the optimum cost of production at optimum level of capacity utilization for the domestic industry.

It is considered necessary to impose anti-dumping duty, on all imports of Aniline originating in or exported from the subject country.

13.0 Authority considered to recommend the amount of anti-dumping duty equal to the margin of dumping or less, which if levied, would remove the injury to the domestic industry, and the date of commencement of such duty (clause (d) Rule 4 supra as amended).

14.0 It was decided to recommend the amount of anti-dumping duty equal to the margin of dumping or less, which if levied, would remove the injury to the domestic industry. Accordingly, it is proposed that definitive anti-dumping duty be imposed, on Aniline originating in or exported from European Union falling under Customs sub-heading 2921.41 of the Customs Tariff Act,. The anti-dumping duty shall be the amount mentioned in Col.3.

Country

Name of the Producer/Exporter

Amount of Duty

US $ per Kg

European Union

All exporters

0.342

15.0 Landed value of imports for the purpose shall be the assessable value as determined by the customs under the Customs Act, 1962 and all duties of customs except duties levied under Section 3, 3A,8B and 9, 9A of the Customs Tariff Act, 1975.

16.0 Subject to above, the Authority confirms the preliminary findings dated 14.08.2000 and corrigendum dated 6.11.2000.

17.0 An appeal against this order shall lie to the Customs, Excise and Gold (Control) Appellate Tribunal in accordance with the Act Supra.

	1997-98	1998-99	POI (Apr-Dec.99)	((Annualised)
Import from EU(MT)	251	172	*2652	(3536)
Share of EU in total import(%)	4.3	3.3	98.4
Imports from Japan / USA	5298	5065	0	(0)
From other countries(MT)	298	40	43	(57)
Total Imports (MT)	5847	5277	2695
Sales of Indian Producers(MT)	38373	35820	31468	(41957)
Total Demand in Country (MT)	44220	41097	34163	(45550)
Market Share in Demand
EU	0.6	0.5	7.8
Japan/USA	11.9	12.3	0
Others	0.7	0.1	0.1
Domestic Industry	86.8	87.1	92.1
	100.0	100.0	100.0