GOVERNMENT OF INDIA

MINISTRY OF COMMERCE & INDUSTRY

DEPARTMENT OF COMMERCE

(DIRECTORATE GENERAL OF ANTI-DUMPING & ALLIED DUTIES)

NOTIFICATION

New Delhi, the 4^th March 2005

Final Findings

(Mid-term Review)

Subject: Anti-Dumping (Mid-Term Review) investigations concerning imports of Hydroxyl Amine Sulphate (HAS) originating in or exported from EU, USA and Japan.

No. 15/23/2004- DGAD -  Having regard to the Customs Tariff Act, 1975, as 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:

A         PROCEDURE

1.         The procedure described below has been followed:

i)          The Designated Authority (hereinafter also referred to as the Authority) notified final findings vide Notification No. 59/1/2001- DGAD dated 01/3/2001 recommending imposition of anti-dumping duties on all imports of Hydroxyl Amine Sulphate (HAS) originating in or exported from EU,USA and Japan.

ii)         The original investigation in this proceeding was initiated on 03.3.2000.  The Preliminary findings was issued by the Designated Authority vide Notification No. 59/1/2001-DGAD dated 04.8.2000. Final findings of the Authority were issued by the Designated Authority vide Notification No. 59/1/2001-DGAD dated 01/3/2001 and the final duty was imposed on the subject goods vide Customs Notification No. 31/2001-Cus. dated 28.3.2001.

iii)         The Customs Tariff Act, 1975(as amended) and the Customs Tariff (Identification, Assessment and Collection of Anti-Dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995 made thereunder require the Authority to review from time to time, the need for the continued imposition of definitive anti dumping duty imposed by the Central Government.

iv)        The Designated Authority, received an application from the European Union for review of the antidumping duties levied on the subject goods, on the grounds of changed circumstances. On the basis of positive information submitted by the above-mentioned applicants the Designated Authority considered that mid-term review of the anti dumping duty in force would be appropriate in view of the changed circumstances brought to the notice to the Authority. Accordingly, a public notice dated 14^th September 2004, was issued and published in the Gazette of India, Extraordinary, initiating anti-dumping mid term review investigation under  Rule 23 of the Antidumping Rules read with Article 11.2 of the Agreement on Antidumping, in respect of the duty in force against the subject countries as above, to determine whether the continued imposition of the duty is required to offset dumping, and whether injury would be likely to continue or recur if the duty were removed or varied, or both.

v)         Having decided to review these final findings, the Authority initiated the present investigations vide Notification No. 15/23/2004-DGAD dated 14^th September 2004 to review the need for continued imposition of anti dumping duty on Hydroxyl Amine Sulphate from EU, USA and Japan  (hereinafter referred to as subject countries) in accordance with the Customs Tariff Act,1975(as amended) and the Customs Tariff (Identification, Assessment and Collection of Anti Dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995(hereinafter referred to as AD Rules).  This review covers all aspects of Notification No. 59/1/2001- DGAD dated 01/3/2001.

vi)        After initiation of the review the Authority sent questionnaires, alongwith the initiation notification, to the following known exporters/producers in the subject countries in accordance with the Rule 6(4), to elicit relevant information:

1.         Allied Signal Inc.

101, Columbia Road,

P.O. No. 1039, Solvay 3,

Morristown

New Jersy 07962 1039, USA

2.         BASF – Germany,

Josef Ritz Hugo Facus,

BASF Aktienguellsehaft,

Ludwigshafen, Germany

3.         DSM

P.O. Box 6500

6401 JH HERRLEN, THE NETHERLANDS

4.         UBE IND. Ltd.,

UBE Building

2-3-11 Higashi

Shingawa, Tokyo – 140-8633

Japan

5.         Toagosei Company Ltd.,

14-1, Nishi-Shimbashi, I-Chome,

Minato-Ku,

Tokyo – 105, Japan

6.         UBE Industries

3/11, Higashi-Shinagawa

2 Chome Shinagawa Ku

Tokyo – 140, Japan

7.         M/s. BASF Aktiengesselschaft

CARL – BOSCH – STRABE, 38

67056, LUDWIGSCHAFEN,

GERMANY

8.         M/s. Rhone Poulence Sa (Aventis)

Quai Paul Doumer, F-92408,

Courbevoie Cedex,

France

9.         M/s. BASF South East Asia Pte., Ltd.,

7, Temasek Boulevard,

35-01, Suntec Tower One,

Singapore – 038987

10.       Aventis Animal Nutrition Asia Pacific Pte. Ltd.,

1, Loyang Way 4, Singapore – 507028

11.       M/s. BASF (Thai) Ltd.,

23^rd Floor, Emporium Tower,

622, Sukhumvit Road,

Klongton, Klongtoey,

Bangkok – 10110, Thailand

12.       M/s. BASF Corporation,

Chemicals Division,

Washingtonsite,

Pleasantviesw & Perishing, Washington, NJ 07882

vii)        Notices were also sent to the domestic industry in India seeking relevant information in accordance with the Rules;

viii)       The Embassies/High Commissions/ Representatives of the subject countries in New Delhi were informed about the initiation of the investigation, in accordance with Rule 6(2), with a request to advise the exporters/producers in their respective countries to respond to the questionnaire within the prescribed time.

ix)        Questionnaires were sent to the following known importers and consumers of subject goods in India calling for necessary information in accordance with Rule 6(4),

1.                  M/s. Glaxco India Ltd., Mumbai,

2.                  M/s. Siris Ltd., Hyderabad,

3.                  M/s. Shasun Chemicals & Drugs Ltd., Chennai,

4.                  M/s. Aurobindo Pharma Ltd., Hyderabad,

5.                  M/s. Cheminor Drugs Ltd., Hyderabad,

6.                  M/s. Godavari Drugs Ltd., Secunderabad,

7.                  M/s. Virchow Labroratories Ltd.,

8.                  M/s. SOL Pharmaceuticals Ltd., Hyderabad,

9.                  M/s. Herren Drugs & Pharmaceuticals, Hyderabad,

10.              M/s. Hasmukh Ray & Co., Mumbai,

11.              M/s. Arihant Impex, Mumbai,

12.              M/s. BASF India Ltd., Mumbai,

13.              M/s. Priya International, Mumbai,

14.              M/s. URMI Chemicals, Mumbai,

15.              M/s. Manali Chemicals, Mumbai,

16.              M/s. Indian Drugs Mfrs. Assn., Mumbai,

17.              M/s. Fragrance & Flabours Association of India (FFAI), Mumbai

18.              M/s. Rubber Board of India, Kerala,

19.              M/s. Indian Medical Association (IMA), Mumbai,

20.              M/s. Indian Pharmaceutical Association (IPA), Mumbai,

21.              M/s. Deepak Nitrite Ltd., Nandesari

22.              Delegation of European Commission to India, New Delhi

23.              M/s. BASF India Ltd., New Delhi

24.              M/s. Chemox Laboratories Ltd., Mumbai

25.              M/s. Allied Signal India Pvt. Ltd., New Delhi,

26.              M/s. Indian Chemical Mfrs. Assn. New Delhi,

27.              M/s. Organisation of Pharmaceuticals Producers of India, Mumbai,

28.              M/s. Bulk Drugs Mfrs. Association (BDMA), Hyderabad,

29.              M/s. Pesticides Association of India (PAI), New Delhi

x)         Investigations were carried out for the period of investigation (POI) from 1^st April 2003 to 31^st March 2004 (12 months). However injury analysis have been carried out for the years April 2000 – March 2001, April 2001 – March 2002, April 2002 – March 2003 and the period of investigation.

xi)        Request was made to the Directorate General of Commercial Intelligence and Statistics (DGCI&S) to arrange details of imports of subject goods for the past three years, and the period of investigations;

xii)        Copies of the initiation notification were also sent to FICCI, CII and ASSOCHAM for wider circulation.

xiii)       The Authority made available the public file to all interested parties containing non-confidential version of all evidence submitted by various interested parties for inspection, upon request.

xiv)       M/s. Deepak Nitrite Ltd, the domestic producer of the subject goods and the original petitioner in the original investigation submitted its responses opposing the review;

xv)       The Authority verified the information furnished by the domestic industry to the extent possible examine the injury suffered and 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 applicants so as to ascertain if Anti-Dumping duty lower than the dumping margin would be sufficient to remove injury to Domestic Industry;

xvi)       The Authority held a public hearing on 22^nd December 2004 to hear the interested parties orally, which was attended by representatives of the domestic industry, the applicant exporters of the subject goods from the European Union and other interested parties. The parties attending the public hearing were requested to file written submissions of views expressed orally. The written submissions received from interested parties have been considered by Designated Authority in this finding;

xvii)      The Authority made available the public file to all interested parties containing non-confidential version of all evidence submitted by various interested parties for inspection, upon request.

xviii) The views expressed by various interested parties in response to the initiation notification and subsequent to the public hearing are discussed in the relevant paragraphs  to the extent these are relevant as per rules and have a bearing upon the case.  The arguments raised by the interested parties have been examined, considered and, wherever appropriate, dealt in relevant paragraphs.

xix)       In accordance with Rule 16 supra, the essential facts/basis considered for these findings were disclosed on 2^nd January,2005 to known interested parties and comments received have been duly considered in these findings.

xx)       **** in this notification represents information furnished by an interested party on confidential basis and so considered by the Authority under the AD Rules.

B.        PRODUCT UNDER CONSIDERATION AND LIKE ARTICLE:

2.         The product involved in the original investigation and the current review is Hydroxyl Amine Sulphate (HAS) falling under heading No. 2825.1003 in Chapter 28 of the First Schedule to the said Customs Tariff Act and ITC HS Classification. This classification however, is indicative only and in no way binding on the scope of the present investigation.  This being a changed circumstances midterm review investigation, the investigation covers the product covered in the original investigation. No argument has been extended, by any interested party, on the issue of product under consideration or like article and therefore, the Authority holds that the product being manufactured by the domestic industry and the product being manufactured and exported from the subject countries are like articles as per AD Rules.

C.        DOMESTIC INDUSTRY:

3.         In the original investigation the application for anti-dumping investigation was filed by M/s. Deepak Nitrite Ltd., on behalf of the domestic industry.  They were the major producer of the subject goods in India and had the required standing to file the petition under AD Rules.  In this mid-term review M/s. Deepak Nitrite Ltd., is the sole producer of the subject goods in India and therefore accounts for total production of the subject goods and constitute domestic industry within the meaning of AD Rules.

D.        INITIATION OF THE REVIEW AND ARGUMENTS RAISED

D.1      VIEWS OF APPLICANTS

4.         Views of the applicant are summarized below

i)          The applicant has submitted since the  imposition of  anti-dumping duties there has been no direct sales of the subject goods except the exports by M/s. BASF under Advance Licence for re-exports of Sulphamethoxazole.  However if the direct sales of the subject goods were to resume, dumping margin would be de-minimis as ex-works domestic sales price works out as Euro ****/Kg. and ex-factory export price works out to be Euro ****/Kg.  On the basis of above export price and normal value the dumping margin of the subject goods exported from EU is negligible.

ii)         The applicant has argued that the AD measures in the original investigation have not led to any improvement in the market share of the domestic industry in total demand.  It is further submitted that the subject goods attracting anti-dumping duty has been replaced by dumped imports from other sources mainly Belarus.  The domestic industry could not improve its market position despite the anti-dumping duty in place which demonstrates that the injury has never been caused by exports from EU.

iii)         The applicant has submitted that the domestic demand of HAS has decreased due to imposition of AD measures.  They have further argued that due to intense competition from Chinese exporters the prices of end product i.e., Sulphamethoxazole has decreased and as a result of which the Indian domestic users of HAS is finding difficult to compete in the International market with the Chinese anti-biotic products.  The decline in demand has had a negative impact on the performance of the domestic industry.

iv)        The domestic industry has proceeded in 2002 with consolidation of two of its existing divisions of Sodium Nitrite and Sodium Nitro Aeromatics.  The consolidation of these two divisions have had affected the production and cost of subject goods.

v)         In view of the above, applicant has submitted that exports of subject goods from EU are not the cause of injury to the domestic industry, as the injury persisted inspite of AD measures.  In fact the exports from EU has been replaced by the sources non attracting anti-dumping duty and due to decrease in demand, the domestic industry could not improve its financial health even with the AD measures.

vi)        However, after initiation of the review investigation the applicant failed to file questionnaire response required for determination of degree and extent of dumping if any. Subsequently, the European Commission, through whom the application for review was filed, withdrew the first ground on which review was requested i.e. no dumping from the European Union. They have argued that the request for review could stand on the injury claim alone and the dumping aspect could very well be withdrawn without prejudicing in any way the legal compliance of the EU’s review request.  They have further argued that in the absence of the dumping investigation in the review request, a finding on injury would still have to be made and a negative finding have to result in the termination of the measures since this is mandatory under WTO rules. They have submitted that dumping and injury determinations are not interdependent and even in the presence of dumping the duty needs to be revoked if it is found that the domestic industry suffers no material injury. Therefore, they have argued that the obligation of the applicant to provide the information on dumping is immaterial to the injury investigation which has to primarily focus on the material injury which, in their view does not exist due to change in the market dynamics, irrespective of the price charged by the EC exporters.

D.2      VIEWS OF THE DOMESTIC INDUSTRY

5.         Views of the Domestic industry are summarized below

i).         The domestic industry, in its various submissions, has opposed the initiation of the review and has inter alia submitted as per Indian law any review shall apply both to dumping and injury; thus, the Indian Law does not have any provision for a partial review of either dumping or injury.

ii).        The domestic industry has further argued that certain Information are required to be furnished by the applicant for the review prior to initiation, which the applicants did not provide therefore, the Hon’ble Designated Authority ought not to have initiated the mid-term review on the basis of the information provided.

iii)         The domestic industry has submitted that the application for the review has been filed by the European Commission on behalf of the European exporters whereas it has been stated in the initiation notification that one of a exporters from EU i.e., M/s. BASF Ltd., Germany has filed a request through the European Commission for a change circumstances mid-term review of the anti-dumping duty.

iv)        The domestic industry has further argued that the applicant for the review have failed to provide the information, even after initiation of the review, in the form and manner prescribed. They argue that since the information on normal value and export prices are available with the applicant it is their primary responsibility to provide the same in the form and manner prescribed and the onus of proof in support of their claim lies with the applicant.

v)         In the view of the domestic industry the information concerning cost of production and normal value are solely within the purview of the exporter.  By withholding this fact, the exporter is interfering with the process of review and not acting to the best of its ability.  Therefore, the exporter first be required to carry the onus placed on them by law and natural justice.  The review should not have been initiated in the absence of complete evidence substantiating the claims of no dumping by the applicant exporter and no injury to the domestic industry and the burden of proof to substantiate the claim of no dumping solely lies with the applicant at the first instance before it shifts to the defending domestic industry to provide evidence of injury. They have further argued that as per the law, dumping and injury examinations are inseparable in a review and both have to be examined simultaneously to determine whether the there is a likelihood of dumping and injury recurring in the event of removal or variation of the duty.

D.3      EXAMINATION BY THE AUTHORITY

6.         The Authority has taken note of the arguments of the European Commission that the dumping and injury determinations, in a changed circumstances review are two separate and distinct examinations and can be determined in isolation. The domestic industry has argued that having made a request on the grounds of no dumping and injury it was incumbent upon the European Exporters and the EC to substantiate their claims on both the counts. The EC has also claimed that continuation of dumping or no dumping during the period of investigation has no bearing on the injury examination which is a stand alone investigation to be examined on the basis of the current status of the industry.

7.         Section 9A (5) read with Rule 23 of the Anti Dumping Rules provides that the Designated Authority shall from time to time review the need for continued imposition of anti dumping duty and shall, if it is satisfied on the basis of information received by it that there is no justification for the continued imposition of such duty, shall recommend to the Central Govt. for its withdrawal. 

8.         Article 11.2 of the Agreement provides that the Authorities shall review the need for the continued imposition of the duty, where warranted, on their own initiative or, provided that a reasonable period of time has elapsed since the imposition of the definitive anti dumping duty, upon request by any interested party which submits positive information substantiating the need for a review.  Interested parties shall have the right to request the authorities to examine whether the continued imposition of the duty is necessary to offset dumping, whether the injury would be likely to continue or recur if the duty were removed or varied, or both.  If, as a result of the review under this paragraph, the authorities determine that the anti dumping duty is no longer warranted, it shall be terminated immediately.

9.         The domestic industry has argued that the review should not have been initiated in the absence of complete evidence substantiating the claims of no dumping by the applicant exporter and no injury to the domestic industry and the burden of proof to substantiate the claim of no dumping solely lies with the applicant at the first instance before it shifts to the defending domestic industry to provide evidence of injury. They have further argued that as per the law, dumping and injury examinations are inseparable in a review and both have to be examined simultaneously to determine whether the there is a likelihood of dumping and injury recurring in the event of removal or variation of the duty.

10.       The applicants for the review have argued that dumping and injury determinations are not interdependent and even in the presence of dumping the duty needs to be revoked if the Authority determines that the domestic industry suffers no material injury. Therefore, the obligation of the applicant to provide the information on dumping is immaterial to the injury investigation which has to primarily focus on the material injury. 

11.       The Authority has examined these arguments and is of the view that the condition ‘satisfaction’ in Rule 23 refers to the satisfaction of the Authority of the need of continued imposition of duty after conducting a proper investigation and not for initiation of the review. What is required for initiating a review is positive information with the Authority on which the Authority can rely upon to decide whether a review is required to examine the need for continued imposition of the duty. In the instant case the applicant had filed positive information before the Authority in its review application and the review was initiated based on these positive information filed. Production of evidence to substantiate the claims and counter claims by various parties are the matter of investigation and are to be submitted by the parties including the party making a request for review during the course of investigation. The outcome of the review will however, depend upon the quality of evidence submitted by various parties to the review. Therefore, the Authority is of the view that the review has been correctly initiated on the basis of positive information available with the Authority which suggested that a review of the duty in force was warranted.

12.       However, on the issue of separation of the dumping and injury investigation and the onus of proof to substantiate the claim of no dumping is concerned, the arguments of the applicant have been examined with reference to the Article 11.2, Article 11.3 and Article 3.4 of the Agreement. Article 11.3 provides that as a result of a review the definitive duty can be extended for a period of another 5 years term if such review covers both dumping and injury. This by implication provides for partial review covering either dumping or injury, or a comprehensive review covering both. However, the question arises whether a review covering only injury can completely overlook the degree and extent of dumping.

13.       Referencing to Article 3 of the Agreement it appears that the parameters of injury to the domestic industry are to be examined with reference to the dumped imports. Article 3.1 provides that;

“A determination of injury for purposes of Article VI of GATT 1994 shall be based on positive evidence and involve an objective examination of both (a) the volume of the dumped imports and the effect of the dumped imports on prices in the domestic market for like products, and (b) the consequent impact of these imports on domestic producers of such products”.

Further Article 3.4 provides that “the examination of the impact of the dumped imports on the domestic industry concerned shall include an evaluation of all relevant economic factors and indices having a bearing on the state of the industry, including actual and potential decline in sales, profits, output, market share, productivity, return on investments, or utilization of capacity; factors affecting domestic prices; the magnitude of the margin of dumping; ………”

14.       Therefore, it appears from the above express provisions of the Agreement that any examination of the condition of the domestic industry in the context of an antidumping investigation has to take into account the underlying effects of the dumping and the magnitude of dumping both in terms of volume and margins.

15.       Article 11.2 of the AD Agreement enumerates that even if the express provisions of Article 11.2 are broken into two separate parts as has been interpreted by the EC, the second sentence of the proviso provides that the party can ask for a review and Authorities would examine “whether the injury would be likely to continue or recur if the duty were removed or varied”. This proviso requires the Authority to examine current injury if any and whether injury can recur if duties are removed. While considering the second part of the proviso the extent of dumping would be a very vital element to determine whether the domestic industry will be injured if the duties are removed even if it does not suffer any injury due the duty protection available.

16.       All the above provisions of the Agreement imply that even if a partial review is required to be carried out to examine the condition of the domestic industry in order to decide whether the duty is required to be continued, by implication dumping examination becomes an integral part of the examination and in addition to the current status of dumping and current health of the domestic industry whereas the review has to examine whether a likelihood of recurrence of injury exists. Therefore, the contention of the EC that injury investigation under a changed circumstances review is a stand alone investigation and can be conducted irrespective of whether dumping continues or not, does not appear to be appropriate.

17.       The EC has also submitted that the dumping examination could very well be withdrawn from their review request and this would not prejudice in any way the legal compliance of the EC’s review request. In this connection it may be noted that once a review is initiated based on the positive information submitted by the interested parties, it is the responsibility of the contesting parties to put forward their respective claims and counter claims on various aspects, including dumping and injury. If the EC wishes to withdraw its claim of no-dumping and the domestic industry produces evidence of dumping by the EU producers, the Authority would have no option but to examine under the best facts clause in terms of article 6.8 of Anti Dumping Agreement.

18.       With response to the disclosure statement the domestic industry has submitted that during the course of investigation, the European Commission has filed additional submission in addition to initial petition filed by them.  In this respect the Authority would like to mention that the public file has been examined by the domestic industry which contains all the non-confidential submissions filed by the interested parties during the investigation. 

METHODOLOGY FOR CALCULATION OF DUMPING MARGIN:

E.         DUMPING DETERMINATION:   NORMAL VALUE, EXPORT PRICE AND DUMPMING MARGIN

E.1       THE EUROPEAN UNION

NORMAL VALUE

19.       The Authority sent questionnaires to all the known exporters for the purpose of determination of normal value in accordance with Section 9A(1)(c) of the Customs Tariff Act, 1975. None of the exporters / producers from EU has filed submissions for the determination of normal value in the form and manner required by the Authority.

20.       European Commission has submitted that its claim of no dumping should be treated as withdrawn and the Authority need to examine the injury aspect only irrespective of whether dumping is continuing or not. In the preceding section, it has been demonstrated that even in a partial review of continuation and likelihood of injury to the domestic industry in the event of withdrawal of duty, assessment of extent of dumping is a vital component of the determination. The domestic industry has argued that the applicant has not cooperated in these proceedings as required by law and only provided limited arguments on injury and causal link without evidence and conveniently chosen not to provide any information pertaining to their normal value.  This is contrary to the law and settled jurisprudence.  Therefore, in the absence of any other information, the information provided by the domestic industry has been considered as the basis of normal value for the purpose of assessment of extent of current dumping.  The domestic industry has submitted that it made best efforts to procure evidence of the domestic prices prevailing in the E.U but could not  procure prices for the period of investigation.

21.       Article 6.8 of the Agreement provide that in case any interested party refuses access to, or otherwise does not provide, necessary information within a reasonable period or significantly impedes the investigation, preliminary and final determinations, affirmative or negative, may be made on the basis of the facts available. Annex II to the Agreement further provides that such determination can even be made on the basis of information provided by the domestic industry.  Since none of the  exporters / producers from EU has filed the required information for determination of normal value , the normal value for all exporters / producers has been constructed based on facts available as per Rule 6(8) of AD Rules.  The normal value is therefore, constructed as US$****/Kg. for all exporters / producers from EU. 

EXPORT PRICE:

22.       The export price is determined on the basis of import statistics provided by DGCI&S. As per DGCI&S import statistics EU has exported 764 MT of  HAS during the POI. To arrive at ex-factory export price, adjustments have been considered as provided by the domestic industry. The ex-factory export price is determined as US$****/Kg. for all exporters / producers from EU.

E.2       USA

NORMAL VALUE

23.       The Authority sent questionnaires to all the known exporters for the purpose of determination of normal value in accordance with Section 9A(1)(c) of the Customs Tariff Act, 1975. None of the exporters / producers from USA has filed submissions in the form and manner required by the Authority. Article 6.8 of the Agreement provides that in cases any interested party refuses access to, or otherwise does not provide, necessary information within a reasonable period or significantly impedes the investigation, preliminary and final determinations, affirmative or negative, may be made on the basis of the facts available. Annex II to the Agreement further provides that such determination can even be made on the basis of information provided by the domestic industry.  Since none of the  exporters / producers from USA has filed the submissions for determination of normal value , the normal value for all exporters / producers has been constructed based on facts available as per Rule 6(8) of AD Rules. In absence of any other information, the information provided by the domestic industry has been considered as the basis of normal value for the purpose of assessment of extent of current dumping.  The domestic industry has submitted that it made best efforts to procure evidence of the domestic prices prevailing in the E.U but could not  procure prices for the period of investigation. The normal value is therefore, constructed as US$****/Kg. for all exporters / producers from USA. 

EXPORT PRICE:

24.       The export price is determined on the basis of import statistics provided by DGCI&S. As per DGCI&S import statistics USA has exported 1108 MT of HAS during the POI. To arrive at ex-factory export price, adjustments have been considered as provided by the domestic industry. The ex-factory export price is determined as US$****/Kg. for all exporters / producers from USA.

E.3    JAPAN

NORMAL VALUE

25.       The Authority sent questionnaires to all the known exporters for the purpose of determination of normal value in accordance with Section 9A(1)(c) of the Customs Tariff Act, 1975. None of the exporters / producers from Japan has filed submissions in the form and manner required by the Authority. Article 6.8 of the Agreement provides that in cases any interested party refuses access to, or otherwise does not provide, necessary information within a reasonable period or significantly impedes the investigation, preliminary and final determinations, affirmative or negative, may be made on the basis of the facts available. Annex II to the Agreement further provides that such determination can even be made on the basis of information provided by the domestic industry.  Since none of the  exporters / producers from Japan has filed the submissions for determination of normal value , the normal value for all exporters / producers has been constructed based on facts available as per Rule 6(8) of AD Rules. In absence of any other information, the information provided by the domestic industry has been considered as the basis of normal value for the purpose of assessment of extent of current dumping.  The domestic industry has submitted that it made best efforts to procure evidence of the domestic prices prevailing in the E.U but could not  procure prices for the period of investigation. The normal value is therefore, constructed as US$****/Kg. for all exporters / producers from Japan. 

EXPORT PRICE:

26.       With response to the disclosure statement the domestic industry has argued that the determination of dumping margin in respect of Japan is determined negative due to incorrect import transactions reported by DGCI&S.  The Authority has examined the transaction wise data during the POI received from DGCI&S, Kolkata and the same has been considered for determination of weighted average export price in absence of non-cooperation of the exporters / producers from Japan. As per DGCI&S import statistics Japan has exported 704 MT of HAS during the POI. To arrive at ex-factory export price, adjustments have been considered as provided by the domestic industry. The ex-factory export price is determined as US$****/Kg. for all exporters / producers from Japan. Based on the normal value and export price determined for the exporters/producers from Japan, the dumping margin is found negative as export price was more than normal value during the POI. Therefore, Japan has been excluded from the subject countries in this investigation and their volume of imports has been segregated from dumped imports for the purpose of injury examination. In view of the above, Japan have been excluded from the subject countries in this investigation. Henceforth, only EC and USA shall constitute as subject countries in this investigation wherever it is  referred.

DUMPING MARGIN

27.       It is noted that because of the typing mistake the dumping margin percentage were wrongly typed in the disclosure statement which has been corrected now.  Based on the normal value and export price as determined above, the Authority determined the dumping margin as under:

28.       In view of the above, Japan have been excluded from the subject countries in this investigation. Henceforth, only EC and USA shall constitute as subject countries in this investigation wherever it is referred. The Dumping Margin determined for the subject countries have been found to be significant.

METHODOLOGY FOR INJURY DETERMINATION AND EXAMINATION OF CAUSAL LINK

F.         INJURY DETERMINATION

F.1       CUMULATIVE ASSESSMENT OF INJURY

29.       As per annexure-II (iii) of Anti Dumping Rules, in cases where imports of a product from more than one country are being simultaneously subjected to Anti-dumping investigation, the Authority is required to cumulatively assess effect of such imports, only when it determines that (a) the margin of dumping established in relation to imports from each country is more than 2% expressed as percentage of export price and the volume of the imports from each country is 3% of the imports of like article  and (b) cumulative assessment of the effect of imports is appropriate in light of the conditions of competition between the imported article and the like domestic article.  The Authority has found that the margin of dumping in respect of each of the subject countries is more than 2%. The volume of imports from these subject countries collectively are 45.82% and individually it was more than 3% of the total imports.

30.       On examination of information, the Authority found that the subject goods coming from subject countries have been imported under the same tariff classification.  The user industry for the imported product and the domestic products were the same.   Same product has been sourced from different countries by users and used interchangeably. The channels of imports are also found to be similar.  The Authority has, therefore, found it appropriate to cumulatively assess the effect of imports of the subject goods on the domestically produced like article in the light of conditions of competition between the imported products and the conditions of competition between the imported products and like domestic product.  The Authority has considered to examine cumulatively the effect of injury by imports of subject goods from subject countries on the domestic industry.

F.2       CONTINUATION OF INJURY

F.2.1    VIEWS OF THE APPLICATIONS

31.       The applicant has submitted that the domestic industry has improved its performance and does not suffer any material injury. They have further submitted that the domestic industry which is represented by sole producer M/s Deepak Nitrite Ltd. has improved its profitability and not undercutting the domestic sales prices of the domestic industry.   Therefore, there is no likelihood of re-occurrence of injury to the domestic industry on export from EC. Therefore, there is no basis to allege that injury has been caused due to the imports from EU and therefore there is absence of causal link.

F.2.2     VIEWS OF  IMPORTER

32.       Views of M/s. Virchow Laboratories are summarized below

i)          Virchow Laboratories Limited, Hyderabad (Hereinafter referred to as Virchow Lab) has supported the application for the request for review by the European Commission on behalf of the EU exporters in the matter of Anti Dumping Duty imposed on the imports of Hydroxul Amine Sulphate (HAS) originating in or exported from EU, USA and Japan.

ii)         Virchow Laboratories Ltd., is the largest producer of Sulfamethoxazole in the world with an output of 4800 MT per annum.  HAS is an important raw material that it utilized in the manufacture of Sulfamethoxazole.

iii)         They have submitted that they have not bought HAS from the domestic industry.  The product that is manufactured by the domestic industry is significantly inferior in terms of quality.  In fact it is submitted that they have continued to import the product under investigation, and have paid the anti dumping duty on the product instead of buying it from domestic industry due to quality differences.

iv)        The prices that have been offered by the domestic industry are at a lower price than the landed cost of the imported product after the imposition of the anti dumping duties. The prices that have been offered by the domestic industry are far lower than the price of the product that is available for sale after the imposition of the anti dumping duties. The imposition of the anti-dumping duty has not served to benefit the domestic industry in any manner.  It is submitted that there were a number of units that were present in India which imported the product under consideration to manufacture the end product of SMX/SMZ or other drugs were forced to shut down due to the non viability of the HAS industry.

v)         The domestic industry has offered to sell the said material end users at a price in the range of Rs. 55/- to Rs. 60/-.  This price band is significantly lower than the price of the product that would be available after the imposition of the anti-dumping duty, which would be in the range of Rs. 80/- to Rs. 85/-, even the material imported under advance license, the landed value of the same is higher or in the same region as offered by the domestic industry.

vi)        Domestic industry is selling the material in the domestic market at far lower prices than the reference price and the current cost of production of the domestic industry is lower than the reference price already fixed, as the landed value of imported material is above the current non-injurious price hence, no price undercutting and price suppression has occurred.

vii)        They have submitted that anti-dumping duty has not helped of the domestic industry, stating that all the injury parameters of the domestic industry have improved because of the imposition of the anti dumping duty. The domestic industry has claimed that in the initial two years after the imposition of the anti-dumping duties, there was an improvement on all parameters of the domestic industry, however, during the current period of investigation, the production sales, selling price and profits have come down.  The contention of the domestic industry that the anti-dumping duty has helped the domestic industry improve on all injury parameters, then there are no reasons as to why during the period of investigation, the performance of the domestic industry has come down.  This clearly implies that there are some other factors causing injury to the domestic industry. The demand of HAS in the country is about 7000 MT.  The capacity of the domestic industry to product HAS is about 1,500 MT.  The clear market for domestic industry is about 2000 MT (excluding SMX demand).  Even after the imposition of anti-dumping duty, if the domestic industry is not able to achieve its capacity utilization upto 100%, there must be some other reasons apart from dumping.

viii)    The likelihood of recurrence of injury is not possible as the SMX producer were never the customer of domestic industry and in the near future also it does not seem that SMX producers can be catered by the domestic industry because of quality and capacity.  Hence, the quantum of imports will remain unchanged until unless the demand of HAS come down.

F.2.3    VIEWS OF THE DOMESTIC INDUSTRY

33.       Views of Domestic industry are summarized below:

i)          Domestic industry has submitted that there are no direct exports for end use except against Advance License Scheme by M/s. BASF to India since the imposition of the anti-dumping duty.  They have further submitted that imposition of anti-dumping duty enabled the domestic industry to improve its profitability, cash flow and increase its market share in relation to demand.  Even though performance of the domestic industry was not satisfactory, domestic industry submits that this can not become a ground for premature revocation of present duty.  Domestic industry could not improve further because producers in other countries have resorted to dumping of subject goods.  Further, the consumers are taking undue advantage of the Advance License provisions and are resorting to imports beyond what is consumed in the ultimate product. In fact, market share of the domestic industry has increased.  Further, while it is true that the product is being dumped from Belarus, domestic industry submits that this can not become ground for revocation of present duty. 

ii)         They have submitted that domestic sales has increased upto the year 2001-2002 and declined thereafter in 2002-2003 and slightly increased during the POI.  The domestic industry has submitted that increase in sales volumes during the POI is due to reduction in the selling price of the subject goods.  Even the production and capacity utilization of the domestic industry has declined during the POI due to continued dumping of subject goods from subject countries.  The capacity utilization has declined from 76% during the 2001-2002 to 61% during the POI.

iii)         The domestic industry posted a profit upto 2002-2003 after recovering from a situation of financial loss.  However it has once again suffered financial loss during the POI primarily due to reduction in the selling price of the subject goods.  They have submitted that the costs of production of the subject goods has marginally declined, whereas selling price has declined far more than the decline in cost of production of the subject goods, force the industry to suffer financial loss.

iv)        Cash flow situation from the operating activities improved in 2002-2003 but declined in the period of investigation.  Similarly return on investment which was -19% in the year 2000-2001 and improved during 2001-2002 and 2002-2003, before becoming negative in the POI.

v)         Once again the productivity per employee has declined due to decline in production inspite of reduction in level of employment.  The domestic industry with an effort to improve its productivity and financial health reduced the number of employees at its Vadodara plant which have had an impact on the subject goods.  They have also submitted that inspite of reduction in wages during the POI the profits of the domestic industry declined.

vi)        The market share of the domestic industry has improved over the years when the market share of subject countries declined which shows that the domestic industry has improved its position due to existing anti-dumping measures. The domestic industry has argued that despite decline in domestic demand, share of the subject countries remained more than 50% in term of total demand.  Despite decline in demand, the market share of the domestic industry remained significant and rather increased. They have submitted that possible discontinuance of anti-dumping duty at this pre-mature stage would again result in loss of market share of the domestic industry.

vii)        The landed value of imports from subject countries are significantly below the cost of production and non-injurious price of the domestic industry which is resulting into severe price underselling.  Even the imports from the subject countries are severely undercutting the prices of the domestic industry as the landed value of the subject goods are much below the domestic selling price.

viii)       The average stocks of the subject goods with the domestic industry have been increasing over the period.  The growth of the domestic industry has been positive on a number of parameters upto 2002-2003 which has become negative during the POI.  In this scenario they have submitted that they could not make additional investments in the HAS plant in order to face competition with the dumped imports.

ix)        In general the performance of the domestic industry improved between 2000-2001 and 2002-2003 but detoriated once again in the POI and they have submitted that this detoriation is due to presence of dumped imports.

x)         The domestic industry has submitted that they have suffered with continued material injury from the dumped imports from subject countries and possible discontinuance of duty would result in further injury to the domestic industry as dumped imports will find the access in the domestic market.  They have further stated that changed situation in the POI compared to the preceding years that the domestic industry is vulnerable to injury if the measures were allowed to be removed or curtailed.

xi)        The market share of imports is significant the decline in market share during the injury period is due to the imposition of anti-dumping duty and imports were mostly under the duty exemption scheme.

xii)        The dumping margin from subject countries are more than the prescribed limits and are significantly higher.  In the original investigation also dumping margin was significant.

xiii)       The domestic industry submits that the injury to the domestic industry in the POI was caused by the dumped imports from the subject countries and if the anti-dumping duties are removed the anti-dumping duty will intensify the duty to the domestic industry.

xiv)       The domestic industry has submitted that the imports from Belarus are also causing injury to the domestic industry as these imports are also coming at the dumped prices.  The volume and value of imports from other sources are de-minimis.

xv)       The demand of the domestic industry showing a decline during the POI.  The domestic industry submits that the imports are mostly coming under the duty exemption scheme, if these imports are considered then the demand will show a progressive increase.

xvi)       The domestic industry is the sole producer of the subject goods in India, therefore trade restricted practices or conditions of competitions between the domestic producers cannot be a possible cause of injury.

xvii)      With response to the disclosure statement the domestic industry has submitted that the contention of EC that injury investigation under the changed circumstances review is a stand along investigation, without examination of dumping, does not appear to be appropriate. The Designated Authority has correctly examined both the dumping and injury determination as per the obligation under WTO Agreement. 

F.2.4    EXAMINATION BY THE AUTHORITY

34.       Rule 11 and Annexure II of the AD Rules requires the Authority to objectively examine the volume of dumped imports and the effect of dumped imports in the domestic market for like article and the consequent impact of these imports on the domestic producers of such products.  Since the imports from the subject countries/ territories have been treated as dumped imports, the Authority proposes to examine the volume and price effect of these dumped imports on the domestic industry and also analyse the injury parameters to determine whether the domestic industry is continuing to suffer material injury on account of such dumped imports.

VOLUME OF IMPORT AND IMPORT PRICES:

35.       DGCI&S data for the injury analysis period shows that imports have taken place from several sources including the subject countries/territories during the injury investigation period. Accordingly, the import as reported by DGCI&S are as follows:

36.       The above data shows that total volume of imports has declined in absolute nos from 3923 MT during 2000-2001 to 1910 MT during the POI whereas the imports from other countries has increased from 1018 MT during 2000-2001 to 1035 MT during the POI. It is noted that the share of imports in total imports from the subject countries in total imports has decreased from 74.05% in 2000-2001 to 45.82% during the period of investigation and the share of imports in total  imports from other countries has increased from 25.95% during 2000-2001 to 54.18% during the period of investigation .  As regards the prices, it has increased from Rs. 37248/MT during 2000-2001 to Rs. 42889/MT during the POI.

CAPACITY, OUTPUT AND CAPACITY UTILIZATION OF DOMESTIC INDUSTRY

37.       The performance of the domestic industry has also been examined with reference to its capacity, output and capacity utilization and impact of the dumped imports on these parameters, if any. The production of the domestic industry has declined from 1180 MT during 2000 -2001 to 952 MT during the POI. The production capacity of the domestic industry has remained the same during the injury period and the capacity utilisation has declined during the POI in the declining demand scenario during the POI.

DEMAND AND MARKET SHARES

38.       The total demand has been estimated based on the combined volume of domestic sales and imports from other countries, as well as imports made into the domestic market from the Subject countries.

39.       The demand of the subject goods has decreased significantly from 4942 MT during 2000-2001 to 2833 MT during the POI.  At the same time imports have also declined both in absolute numbers and in terms of market share.  The market share of  domestic industry has increased from 21% during 2000-2001 to 33% during POI whereas market share of dumped imports from subject countries has showing a trend of decline and it has declined by 29% during the POI. However, imports from non dumped sources have increased by 17% in total demand. Therefore, the data indicates that after imposition of duty the condition of the domestic industry has substantially improved in terms of its market share and  there is no volume effect of the dumped imports to the domestic industry.

SALES REALISATION OF THE DOMESTIC INDUSTRY

40.       The selling price of the domestic industry has reduced from 100 during 2000-2001 to 81 during the POI signifying a reduction of 19 % from 2000-2001 levels. There is also a significant reduction in the cost of production also during previous three years. The cost of production and net selling prices of the domestic industry as per the record maintained by it has been as follows:

Indexed data

41.       It is noticed that there is a  significant reduction in the cost of production from 100 during 2000-2001 to 76 during the POI and the corresponding decline in selling prices is of 19%. However, the drop in cost of production is much more compared to the selling prices of the domestic industry.  The domestic industry from a loss of -100 during 2000-2001 has improved its financial position during the injury period and reflecting a profit to the extent of 764 during the POI.  The profit per MT of the product after showing significant improvement after imposition of the duty but has shown a decline between 2002-03 and 2003-04 .

PRICE UNDERCUTTING

42.       A comparison for subject goods during the period under investigation was made between the weighted average landed value of dumped imports and the domestic selling price in the domestic market. The landed value of imports from the subject countries was lower than the net sales realization of the domestic industry for the subject goods during the POI thereby, undercutting the selling price of the domestic industry. The undercutting margin was in the range of 7% to 16% during the POI.

PRICE UNDERSELLING

43.       The price underselling is an important indicator of assessment of injury; thus, the Authority has worked out a non injurious price and compared the same with the landed value to arrive at the extent of price underselling. The non-injurious price has been evaluated for the domestic producer by appropriately considering the cost of production for the product under consideration during the POI. Also in order to eliminate inefficiencies, the capacity utilization has been normated. The analysis shows that the weighted average landed value of the subject goods from subject countries is less than the non injurious price determined for the domestic industry during the period of investigation. The underselling margin was  in the range of 5% to 15%  during the POI. 

44.       Further, the landed value of subject goods is lower than the domestic selling price of the domestic industry thereby, undercutting the domestic sales prices. However, it is noted that the domestic selling price is higher than the non injurious price determined for the domestic industry.

OTHER INJURY PARAMETERS

45.       After having examined the effect of dumped imports on the volumes and prices of the domestic industry and major injury indicators like volume and value of imports, capacity, output, capacity utilization and sales of the domestic industry as well as demand pattern with market shares of various segments in the earlier section, other economic parameters which could indicate existence of injury to the domestic industry have been analysed here as follows:

PROFITABILITY

46.       The profitability of the domestic industry has been analysed from the record of the company:

Indexed data

47.       The domestic industry’s profitability has improved from -100  during 2001-2001 to 764 during the POI.  It has certainly declined during the POI if compared with the immediate preceding years, however from a loss scenario of the domestic industry during the base year has entered into the profit.  It can be seen from the above table that the profits of the domestic industry have improved during the POI.

EMPLOYMENT

48.       The domestic industry has curtailed the number of employees as its production has dropped from 100 during 2000-2001 to 81 during the POI.  But the productivity per employee have just dropped above 2%, therefore it can not be the cause of injury to the domestic industry. The domestic industry has claimed that the number of employees have been reduced as a cost cutting measure to improve the productivity. It is noted that change in level of employment has not caused any   injury to the domestic industry.

WAGES

49.       The wages for the subject goods has increased from 100 during 2000-2001 to 122 during the POI, at the same time wages as percentage of sales has also shown a increase from 100 during 2000-2001 to 130.25 during the POI. The Wages and salary per employee of the domestic industry has increased  during the  period of investigation. However, it is observed that the domestic industry is earning a reasonable profit even after the increase in wages of the domestic industry. As such wages could not be a factor for injury to the domestic industry.

PRODUCTIVITY

50.       There is a marginal drop in productivity in terms of production per employee due to drop in output during this period. Productivity of the domestic industry, as reflected in terms of production per employee, has a drop of 2% during the POI whereas the production has dropped from 100 to 81 in the same period.  It can not, therefore, be said that the domestic industry  has suffered injury due to decline in productivity.

Indexed

INVENTORIES

51.       Inventory position of the Company shows significant improvement. The stocks of the domestic industry decreased from 100 during 2000-2001 to 16.31 during the POI and as a percentage of sales it has decreased from 100 during 2000-2001 to 16.31 during the POI.

                                                                                                Indexed

INVESTMENT AND RETURN ON INVESTMENT

52.       There has been no capacity addition or any marakable fresh investment by the applicants during the investigation period. The domestic industry has been consistently improving its profitability.  The domestic industry has achieved a positive ROCE during the POI from a negative return in the base year.

CASHFLOW

53.     The domestic industry is a multi-product company with multiple production plants, it could not be possible to determine the actual magnitude of cash-flow of the product. However it has been observed that the company has improved its cash-profit of the product substantially over the period of injury.

MAGNITUDE OF DUMPING

54.       Magnitude of dumping as an indicator of the extent to which the dumped imports can injure the domestic industry shows that the dumping margin determined for the subject countries during the POI, is substantial, even when the antidumping duty is in force.

FACTORS AFFECTING PRICES

55.       Change in cost structure if any, competition in the domestic industry and prices of competing substitutes have been examined for analyzing the factors other than dumped imports that might be affecting the prices in the domestic market. There is no viable substitute to this product and M/s Deepak Nitrite is the sole producer of the subject good in India. Therefore, domestic competition does not affect the prices.

EVIDENCE OF LOST CONTRACTS

56.       The domestic industry did not produce any evidence regarding loss of order or contract due to imports of subject goods from subject countries. As such loss of contract could not be a factor for injury to the domestic industry.

CONCLUSION

57.       On the basis of examination of injury factors, it is noted that the market share of the domestic industry in total demand has increased whereas the market share of dumped imports from subject countries has gone down. The total imports of subject goods has decreased roughly by 50% during the POI compared to the base year whereas the production and the domestic sales of the domestic industry has not declined in proportion to the decline in total demand of the subject goods. The profitability of domestic industry has improved during the POI. The cash profit of the domestic industry has also improved during the injury period. The inventory position of the domestic industry is also showing a growth during the POI and as a percentage of month’s sales it has also improved.  The dumped imports from subject countries are undercutting the selling price of the domestic industry but the domestic industry is realizing the selling price more than the non  injurious price determined for the domestic industry.

F.3       OTHERS KNOWN FACTORS

Volume and prices of imports from other sources

58.       During the POI, imports have taken place from many countries other than the subject countries, including Belarus .Total import from other sources  has increased from 1018 MT during 2000-2001 to 1035 MT during POI, however it is noted that 356 MT alone was exported from Belarus during POI. The Authority also noteed that  weighted average import price from these sources is more or less same as the dumped import prices from the subject countries. Therefore, the imports from the other sources also appear to have significant effect on the domestic industry, both in terms of volume and value. 

 Contraction in demand and / or change in pattern of consumption

59.       Total domestic demand of the product under consideration has declined from 4942MT during 2000-2001 to 2833 MT during the POI after a increase in 2001-2002 and declined subsequently in both years. The market share of domestic industry in the demand has shown a substantial increase in a decreasing demand scenario whereas the share of subject countries has decreased. At the same time share of imports from other sources has increased from 21% to 37% in total demand.

Trade restrictive practices of and competition between the foreign and domestic producers

60.       The subject goods are freely importable and there are no trade restrictive practices in the domestic market. The domestic industry is the sole producer of the subject goods in the country. Moreover, imports from other sources have sizable presence in the Indian market, which has grown substantially along with the imports from subject countries.

Development of technology and export performance

61.       Technology or technology related issues have not been raised by any interested party as cause of injury to the domestic industry. It is noted that the domestic industry has exported  a very small quantity  during the POI as a market entry move and that does not substantially affect the profitability of the company.

Productivity of the Domestic Industry

62.       Productivity of the domestic industry in terms of labour output and daily output has shown a marginal decline compared to the base year. However, it is noted that this marginal decline is negligible compared with the decline in production.

F.4       LIKELIHOOD OF RECURRENCE OF DUMPING AND INJURY

63.       Since the Authority has already determined that the subject goods are continuing to enter the Indian market at dumped prices from the subject countries, an analysis of recurrence of dumping is not required. However, looking at the non-cooperation of the exporters to provide credible evidence on the normal value of the product in the subject countries it can be reasonably concluded that the exports would continue to enter the market at dumped prices. But looking at the price level at which the product is entering the Indian market from all sources it is unlikely that further reduction of the export prices could take place immediately.

64.       Therefore, it is pertinent to examine whether injury to the domestic industry is likely to recur due to these dumped imports if the duty is removed or varied. It has already been established that the landed value of imports from the subject countries without the antidumping duty is below the selling price of the domestic industry and the NIP determined by the Authority for the domestic industry. However, the Authority notes that the net sales realization of the subject goods is more than the non injurious price determined for the domestic industry. Therefore, removal of the duty fixed in terms of reference price is not likely to materially affect the domestic industry.

65.       However, in addition to the examination of material injury, likelihood of recurrence of injury or threat of injury to the domestic industry has been examined by the Authority on the basis of the claims made by the domestic industry.

66.       The Domestic Industry has submitted that the threat of material injury should be examined in terms of Annexure II (vii) of the Rules, which states as under:

“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 imminent. In making a determination regarding the existence of a threat of material injury, the Designated Authority shall consider, inter alia, such factors and;

(a)            a significant rate of increase of dumped imports into India indicating the likelihood of substantially increased importation.

(b)            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.

(c)            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,

(d)            Inventories of the article being investigated.”

67.       Though the above provision do not provide appropriate parameters for examination of likelihood of recurrence of injury in a review investigation, in the absence of any express provision In this regards the Authority has examined some of these parameters to draw inference on the subject.

68.       In the instant case, the imports of the subject goods have decreased over the injury period and demand has also declined to attract more imports. It is noted that the domestic industry did not substantiate with evidence in support of its apprehension of imminent injury and in absence of substantiated evidence regarding threat of injury, the Authority did not find appropriate to recommend continuation of anti-dumping measures as current imports are not causing injury to the domestic industry. There is no evidence on record to show that the injury would recur if the duties are discontinued. However, it is  noted that the domestic selling price is higher than the non injurious price determined for the domestic industry.

G.        CAUSAL LINK:

69.       The submissions made by interested parties in respect of the issue of causal link have been examined. A detailed examination was made with regards to the issues pertaining to the material injury to the domestic industry and causal link between the material injury to the domestic industry and dumped imports. Paragraph (v) of Annexure II of the Anti-dumping Rules reads as under:

" It must be demonstrated that the dumped imports are, through the effects of dumping, as set forth in paragraphs (ii) and (iv) above, causing injury to the domestic industry. The demonstration of a causal relationship between the dumped imports and the injury to the domestic industry shall be based on an examination of relevant evidence before the designated authority. The designated authority shall also examine any known factors other than the dumped imports which at the same time are injuring the domestic industry, and the injury caused by these other factors must not be attributed to the dumped imports. Factors which may be relevant in this respect include, inter alia, the volume and prices of imports not sold at dumping prices, contraction in demand or changes in the patterns of consumption, trade restrictive practices of and competition between the foreign and domestic producers, developments in technology and the export performance and the productivity of the domestic industry."

70.       It is noted that market share of the domestic industry has increased in demand during the period of investigation from 21% in 2000-01 to 33% during the period of investigation. It is noted that the net sales realisation of the subject goods of the domestic industry is  above the non injurious price determined for the domestic industry during the period of investigation.  It is noted that the dumped imports from subject countries has decreased from 74.05% during 2000-01 to 45.82% during the POI of total imports whereas imports from other sources increased from 25.95% during 2000-01 to 54.18 % during the POI.  It is also found that volume and prices of imports from other sources which constitutes 54.18% may have adverse affect on domestic prices of the domestic industry.

71.       The Authority is of the view that domestic industry is not suffering material injury due to dumped imports from subject countries and it may not be appropriate to continue with the existing anti dumping measures. The examination of dumping and injury indicates that there is no current  injury to the domestic industry due to dumped imports and not likely to have injury due to dumped imports . The domestic industry argued that dumping is still continuing from the subject countries and causing injury to the domestic industry. The domestic industry has further submitted that withdrawal of existing anti-dumping duty may likely to lead a recurrence of dumping and injury to the domestic industry. It is noted that the domestic industry did not substantiate with evidence in support of its apprehension of imminent injury due to dumped imports from subject countries. In absence of substantiated evidence regarding threat of injury, the Authority did not find appropriate to recommend continuation of anti-dumping measures as current imports are not causing injury to the domestic industry. There is no evidence on record to show that the injury would recur if the duties are discontinued.  The Authority, therefore concludes that the discontinuation of the anti dumping duty may not likely to lead to recurrence of injury to the domestic industry.

H.        FINAL FINDINGS:

72.       The Authority after considering the foregoing, concludes that:

(a)          subject goods originating in or exported from subject countries have been exported to India below their normal value, resulting in  dumping;

(b)       the domestic industry has not suffered material injury due to dumped imports;

(c)        and discontinuation of anti-dumping duties on the subject goods from subject countries may not likely to lead to the recurrence of injury and dumping to the domestic industry;

(d)        In view of the above, the Designated Authority considers it appropriate to recommend discontinuation of the anti-dumping duties recommended earlier vide Notification No. 59/1/2001- DGAD dated 01/03/2001  and imposed on all imports of  Hydroxyl Amine Sulphate  (HAS) classified under  chapter 28 of the Customs Tariff Act, 1975 (as amended)  originating in or exported from EU,USA and Japan. 

(e)        An appeal against this order shall lie before the Customs, Excise and Service Tax Appellate Tribunal in accordance with the Customs Tariff Act,1975( as amended).

(Christy Fernandez)

Designated Authority

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