7. Views of M/s Meisol, South Africa, Mitsui & Co Ltd, Singapore, M/s Atul Ltd, M/s Foseco Ltd, M/s Kesar Petro, M/s MPCL, Mumbai, FMA, Mumbai , EU and Others

Safeguard duties are an emergency measure permitted pursuant to Article XIX of GATT. It is applied when domestic industry cannot compete with the sudden increase in imports. Prior to the imposition of safeguard duties, the Domestic Industry must be suffering from "serious injury’. This serious injury must have been caused by the sudden increase of imports.

Unlike in the Anti Dumping sphere, where the Authority may recommend duties to the full extent of the dumping margin, in the Safeguard sphere there is no such concept duties under safeguard sphere can be maximum to address the serious injury by the sudden increase in imports. Countervailing duties on the other hand are duties imposed in the exporting country. Countervailing duties are also country specific and exporter specific, as in the case of Anti Dumping Duties. In view of the jurisprudence above, it is conceivable that both countervailing duties and anti dumping duty may co-exist as the "material injury’ can be compensated in terms of the dumping margin and the subsidy margin, thus, it is possible to have duties simultaneously. However, in the case of safeguard duties, the only measure for imposition of duty is the serious injury to the domestic industry. It is a matter of consensus that the "serious injury" is far greater than ‘material injury and subsumes the latter. Clearly, it is inherent that there is an admission of serious injury being caused by the sudden increase in imports, thus, warranting the imposition of safeguard duty, there can be no imposition of anti dumping duties which require a causal link between the material injury and the dumping.

In view of the above, it is submitted that there can be no imposition of anti dumping duties and safeguard duties on the same product.

Safeguard duty is primarily protection granted to compensate for ‘serious injury’ brought about out by the technological state of the domestic industry of the Member state. It is for this precise reason that the WTO agreements provide for the payment of compensation to the affected Member States.

Thus, it is clear that the law in India precludes the imposition of both anti dumping duty/countervailing duty and safeguard duty

M/s Mitsui & Co has pointed out that as against the concept of ‘serious injury’ to the domestic injury to the domestic industry under the safeguard provisions, the Anti dumping Rules provide only for material injury. Thus, if sufficient duties have been recommended for removing material injury, which under the very same Act is a less serious situation. Thus, it is obvious that an anti dumping investigation cannot be initiated in a case where safeguard duties have been recommended taking into account almost the same period of investigation

The International Price of phenol during the POI for anti dumping has remained at the same at US $ 382 PMT as the price based on which SGD Protection for phenol was extended. Thus, extension of SGD was sanctioned on the ground that international price of phenol of $382 PMT and the price remain at the same level. Therefore, there is no justification for sanctioning additional protection in form of anti dumping duty.

It is to be further noted that the grounds on which this safeguard application was made exactly the same as the grounds mentioned in the present petition for imposition of anti dumping duty namely increase in imports from South Africa and Singapore from April 2001 and more particularly major increase in imports from July 2001.

While recommending Safeguard duty on phenol DG (Safeguard) had obtained commitment from phenol manufacturers that they would achieve cost reduction of Rs.6000/MT. Thus, profit of phenol must have gone up to the extent of saving per annum since such saving were not passed on to the customers.

In response to the disclosure, M/s Kesar Petroproducts Ltd, Mumbai submits that SGD must be considered for working out the landed value from subject countries. On the Issue of safeguard duty and Anti Dumping Duty, M/s Merisol RSA, has asked the Authority to verify that methodologies for calculating serious injury and material injury are synchronized and though the injury analysis is for different periods, practically the burden is on the consumer in two folds as duties are prospective. M/s Mitsui & Co has submitted that there is an over lapping of the POI for the Anti Dumping Investigations and safeguard investigations and the Authority has not addressed the issue of as to how the concept of material injury is different in scope than the scope of serious injury. EU, in response to the disclosure has submitted that concrete evidence must be provided to aall parties showing that double protection has been avoided.

Views by Domestic Industry

8. It can be argued that this is the first product wherein safeguard duty is in force and anti dumping duty has been recommended. However, there is no legal basis argued by any interested party to state that the two duties cannot run concurrently. Countervailing duty and anti dumping duty have a condition which prohibit simultaneous application of anti dumping duty and countervailing duty. More importantly, even when there is specific legal provision that anti dumping duty and countervailing duties can not be applied simultaneously, there is no legal provision that the safeguard duty and anti dumping duty can not be applied simultaneously. Thus, the entire argument of the other interested parties is without any legal basis. . Thus, strictly speaking, the safeguard duty regulation does not provide that anti dumping duty and safeguard duty can not be applied simultaneously against the same injury

It is a matter of common knowledge that Indian Exporters are suffering anti dumping duty and countervailing duties simultaneously against their exports to Other Countries. When other countries can impose the two duties simultaneously, it follows that the two duties can be imposed simultaneously.

In a situation wherein the import price were earlier fair but became unfair subsequently due to various reasons, it is obvious that the dumping of the product starts in subsequent period. In the instant case, there was no evidence that the imports (in 1999 and before) were at dumping prices. However, there is a positive evidence available now that the imports are at unfair and dumped prices. When the market situation and behavior of imports has changed, naturally, the domestic industry would be entitled to another remedy available. To put otherwise, dumping of the product has surfaced with the imposition of safeguard duty on the product. Naturally, the safeguard duty would is taking care of that part of the injury which is due to fairly priced imports and industry requires protection in terms of anti dumping duty when dumping has surfaced.

Review 2 was initiated by the Director General (Safeguards) on 22^nd October 2001. Though, the period investigation by the Director General (Safeguards) overlaps with the period being investigated by the Designated Authority, the scope of this review 2 was restricted to extension of safeguard duty to developing countries (which were not in the purview of the duty). The initiation notification of review 2 states as under in this regard.

The matter has been examined and it appears that prima facie the imports of Phenol from the aforementioned developing countries are more than de-minimus level stipulated under section 78B of the Customs Tariff Act 1975 and accordingly it has been decided to initiate review proceedings through this notice. The purpose of the review is to determine whether such notified developing countries are eligible to the exemption from payment of safeguard duty on imports of Phenol from these countries." (Emphasis added).

In response to the disclosure, on the issue of the adding of safeguard duty for the calculation of the landed value, the domestic industry submits that , while on the one hand safeguard duty has been included in the landed price of imports, the non-injurious price has been lowered for the domestic industry on account of optimization and normations. Should the safeguard duty be included in the calculations, there is then no justification for calculating optimum cost of production. The cost of production should then be taken at actual levels.

Examination by the Authority

9. It has been argued by various interested parties that since the safeguard duty has been imposed on the subject goods originating from the subject countries, there is no need for any Anti-Dumping duty as safeguard duty has addressed the issue of serious injury which is a part of material injury that Anti-Dumping duty addresses. There are also arguments that after having got the redressal by way of safeguard duty, the domestic industry can not have double benefit by the way of ant dumping duty also. It has been further argued that the cost savings measures that the domestic Industry was required to do has not been passed on to consumers. There are also arguments regarding the lack of enough Jurisprudence in this matter. It has also been pointed out that Indian Exporters are suffering anti dumping duty and countervailing duties simultaneously against their exports to Other Countries.

The Authority has examined the issues concerning this case where safeguard duty has been imposed prior to the initiation of anti dumping investigations and concludes that The POI in the safeguard investigation was different than the present investigation and hence the injury determination cannot be assumed to be the same and correlated. It has also been examined and confirmed by the Authority that the purpose of the second review in 2001 was to determine whether such notified developing countries are eligible to the exemption from payment of safeguard duty on imports of Phenol from these countries.

With regard to the argument that the DG, Safeguards has removed serious injury and the same implied removal of material injury also, the Authority notes that the nature of injury has changed with exporters now resorting to unfair pricing from a situation of fair pricing (safeguard duty). The Authority concludes that petitioner now needs the protection of anti dumping when the exporters have resorted to unfair pricing of their products. Hence, there is no merit in the argument raised by exporters/users regarding double protection being accorded to the petitioner. It has been claimed by the exporters and importers/users that imposition of anti dumping duty would amount to double protection to the domestic industry. On the other hand the domestic industry has submitted that the safeguard duty has been imposed on the imports of the subject goods to take into account injuries (serious injury) coming out of fair imports as against unfair imports for which anti dumping duty is required. The authority has carefully considered the issues in this regard and notes that the purpose of Anti dumping investigations is to examine whether the firm is undergoing any injury due to unfair imports from subject countries during POI. The Authority feels that occurrence of injury is common in anti dumping and safeguard investigations and the imposition of anti dumping and safeguard duty is to grant protection to the domestic industry for a limited timeframe against dumped/unfair and fair imports respectively. The authority concludes that while calculating injury margin, the safeguard duty would be taken into account in determining landed value of subject goods from the subject countries.

Views by M/s Foseco Ltd, FMA, Mumbai and Others

10. It is also stated that the period of investigation is not representative because apart from being a small period of 9 months it was abnormal period since there was major addition to supply of phenol in the world market due to commissioning of MPSL new plant of 2,00,000 MT capacity and depressed market demand. The phenol industry always under goes cyclic variations production, sales, closing stock and prices of finished product.

The petitioner has stated that dumping of phenol started since July 2001 and has submitted statistics up to Nov 2001 only. It is submitted that this period of 5 months is too short a period for taking a decision on long-term measure like imposition of Anti Dumping Duty.

Views of Petitioner

11. At one place, it has been stated that there is no bar or limitations on the power to the Designated Authority to pick any particular period as period of investigation. In the same paragraph, other statement states that six months period is too short for investigation.

We submit that the statement of the opposing interested parties is contradictory. When, there is no bar, the Designated Authority has discretion to choose any period as investigation period. Neither WTO agreement nor Indian Anti Dumping Rules provides any restrictions in this regard.

Examination of the Authority

12. The Authority has taken POI from 1^St April 2001 – 31^st December 2001 being the most recent period for the investigation when this case was initiated on 15^th February 2002. This period was also taken because of the closing of the quarters and the feasibility of getting the complete data. The Authority confirms that nine months time is adequate and just for Anti Dumping Investigation since it also synchronizes with the three quarters for which the relevant data could be available.

Views of M/s Atul Ltd, M/s Foseco Ltd, Government of Maharastra, Mumbai and Alta Labs, MPCL and Others

13. Without prejudice to our stand, that initiation of investigation is improper and further processing of the investigation should be discontinued, we suggest imposition of graded anti dumping duty if the authorities decide to go ahead with the imposition of anti dumping duty. As the calculations of injury and dumping margin are based on a price of US $ 360/- per MT we suggest imposition of AD duty in suitable slabs of CIF prices till the injury is taken care of beyond which there should not by any levy of anti dumping duty.

If it is still felt that Anti Dumping Duty is to be levied it should be based on import price of US $ 360 with reducing duty structure on increase in phenol price and at imports of US $ 450 there should be "zero" Anti Dumping Duty which should protect the domestic consumers and domestic industry, as domestic industry need protection between phenol price of US $ 360-450 PMT.

In response to the disclosure, M/s Kesar petroproducts Ltd, has requested that if at all such duty is to be considered then it should be linked such that no duty is levied for import price above US$ 450PMT.

Views of the Petitioner:

Examination by the Authority

Anti Dumping duty has to be the lower of the dumping margin and injury margin. Graded duty would imply that the test of lower of the dumping margin and injury margin would not be met.

15. Views of M/s Ficom Organics Ltd, Mumbai, Kesar Petroproducts, M/s Foseco, Pune, and Others

Various interested parties have commented on the fact that there is a large supply and demand gap and there is inadequate domestic indigenous domestic manufacturing capacity which is the major reason for the imports of Phenol. They have also highlighted the fact that M/s Mitsui Singapore Ltd (MPSL) set up a new plant with the latest technology which enabled it to sell phenol at a very competitive price. They have also highlighted on the net shortfall between the consumption and combined production capacity of the two domestic players in India.

In response to the disclosure. M/s Kesar petroproducts Ltd, have brought the attention of the Authority towards the demand & supply situation in the Indian market coupled with adverse duty structure for phenol users and internal problem of the petitioner. They have further highlighted the issue regarding the current price increase and supply constraint. M/s Ficom organics Ltd, M/s Ficom Organics Ltd, Mumbai, has highlighted the fact that there is an acute shortage of Phenol in the market and Indian Phenol manufacturers are not at all able to fulfill their contractual fulfillments on supply of Phenol. They have also informed of a price hike of more than 70% in a year of the subject goods and have requested that in the interest of the entire Industry, Anti Dumping duty on Phenol be removed with the immediate

Views of the Petitioner:

16. Public interest can not imply consumer interest. Imposition of anti dumping duty would be in public interest as it would help maintaining availability of wider choice to the consumers of subject goods, which is necessary for fair competition. In fact, Director General (Safeguards) has in particular held that imposition of safeguard duty was in the public interest. When safeguard duty was in the public interest, there is no basis or reasoning to argue that imposition of anti dumping duty would not be in the public interest.

It would also be relevant to point out that all the arguments on the issue of public interest are unsupported with the Rules.

In response to the disclosure, the domestic Industry submits that monopoly means a situation in which a producer can dictate the price. We reiterate that when there are more than a producer, there can not be monopoly and when a producer is in a position to dictate the price, there can not be a situation of dumping and injury.

Examination by the Authority

17. It has also been argued by some interested parties that HOCL, is the only producer of the subject goods in the country besides Herdillia which has been taken over by Schenectady and therefore, the present petition has been filed by them to avoid any competition. Further, the total capacity of the petitioner is short of the demand of Phenol in the country and the size of the plant is too small to cater to total demand of the in this country. It has also been argued that the technology used by the domestic industry is obsolete. Issues have also been raised regarding the poor quality of the goods produced by the domestic industry as well as the methodology adopted for apportionment of fixed costs, depreciation and overheads to the production of Phenol. It has also been stated that the prices of exports to India are at the prices prevailing in international market.

The Authority has examined the above issues. The purpose of anti dumping duty is to ensure that any injury caused to the domestic industry due to dumping is addressed adequately. The fact that there is a single producer of the subject goods in the country (apart from Herdillia which has been taken over by Schenectady) does not, in any way, restrict the right of the domestic producers to claim relief from the Designated Authority against the dumped imports under the Anti Dumping Rules. It has been the accepted position that anti dumping duty is in the nature and form of providing a remedy against the trade distorting practice of dumping. Further, anti dumping duties do not propose to restrict or block imports from any sources and therefore, the issue of the domestic supply being short of the total consumption in the country, has no relevance. Also since alternative sources of supply are available to the Indian industrial users, the apprehension of the petitioner company exercising monopoly position to exploit the customers is misplaced.

Views of M/s Kesar Petroproducts Ltd, and Others

18. Various interested parties have commented upon the fact that internal problems of the petitioner industry coupled with the long shut down period during the April- May 2001 with low closing stocks were the main reason for the injury to the domestic Industry and not the dumped imports. Few interested parties have also mentioned about the inefficient nature of the production of the domestic Industry. They have also referred to the fact that low closing stocks during May month prompted the user industries to go in for the imports.

In response to the disclosure, M/s Kesar Petroproducts Ltd, have reiterated its earlier submissions.

Views of the Petitioner

19. The petitioner has submitted that there is a direct correlation between production and sales volume of the product by the Indian manufacturer and imports from subject countries. Sales volume of the domestic Industry got adversely affected with consumers switching over to imports. In March 2001 i.e. juts prior to the period of the investigation, there was significant import bookings by the exporters, which landed in April and thereafter. Effect of these bookings were felt on the sales volume of the petitioner and consequently upon the production. In April 2001, the production and sales were **** and **** MT and considering the stock level of **** MT as also significant order bookings by the exporters, the domestic Industry decided to take a shutdown in the plant in May 2001. In spite of no production. the domestic industry continue, to meet the requirement and brought the inventory levels to realistic levels of *** MT. In June, July and August, production of the domestic industry was comparatively higher. However, availability of dumped material resulted into significant inventory pile up from *** MT in May to **** MT by August. This was higher than average monthly sales during that period. In September, the domestic industry restricted its production and made hard efforts to sell its produce at reduced prices. This resulted in higher sales volume and reduction in the inventory levels. The Company, therefore, once again increased its production in October, which was almost double than September. However, again due to arrival of significant dumped imports in the market, sales volume remained sluggish and inventories increased to a level of almost average monthly sales during that period. In November, company again restricted its production. However, it did not help the company in reducing inventories significantly as sales volumes did not pick up. In December 2001, production of the domestic industry was comparatively higher. Even after reducing selling price and offering material at loss, the company was not able to sell the material resulting into decline in sales volume and higher inventories.

In response to the disclosure, with regards to the low closing stocks, domestic industry submits that the statement is far away from facts. In all months of the period of investigation, the domestic industry had sufficient stocks to meet the demand of the product. Even at the time of shutdown, the domestic industry had sufficient stocks, which were sufficient to meet sales during the shut down periods.

Examination by the Authority

20. The Authority has verified the records of the company from the data supplied by them and it notes that due to the dumping of the subject goods from the subject countries, the domestic industry was not able to sell the subject goods resulting into decline in the sales volume and higher inventories.

Issue regarding Current Price Increase and Current Supply constraints

Views of M/s Foseco Ltd and Others

21. It may kindly be noted that plant set up by Mitsui Phenol Singapore Ltd. of 2,00,000 tone capacity is now being used solely for its own captive consumption for manufacturing BPA and they have stopped selling phenol totally. The sale by this plant in POI was thus a temporary event which should be ignored for deciding the matter.

It may also be mentioned that recently there has been a major fire in Albama Plant in Texas, USA of 4 lacs MT capacity, which has affected the supply of phenol in the world market.

Views of the Petitioner:

22. Post period investigation facts have no relevance in the present investigation period. Without prejudice, the parameter can not be seen in isolation. Another factor of equal importance is the prices of associated raw materials and their impact on the cost of production. It would be worthy to mention here that crude oil prices in post investigation period have reached to more than double level. The relevant factor possibly is cost adjusted prices and a minimum period of six months (even though these interested parties have argued that even six months period is too short a period). Petitioner notes that while these interested parties argue that dumping should be seen over a period longer than six months, factors such as present temporary prices over a short period of 1-3 months are arguably sufficient to decide the present investigation.

Other Issues

M/s HOCL, Mumbai

Calculations of Landed Value of imports for determination of injury margin

23. It is found from the preliminary findings that the Designated Authority has included the safeguard duty in force for calculation of landed value of imports. The calculation is inconsistent with the practice being followed for determination of injury margin

24. Since the Designated Authority has considered it appropriate to determine separate duty for packed and loose phenol, domestic industry would like to provide information with regard to packing cost involved in case of packed phenol. It is requested that such information may kindly be taken into account while calculating non injurious price for packed phenol.

The statement of opposing interested parties that HOCL is the only producer is factually incorrect as it is a well known fact, known to opposing interested parties also that the HOCL is one of the three producers of Phenol in India.

The installed capacity of the petitioner is 40000 MT. At the time of making application for safeguard duty, the domestic industry has draw adjustment plan and accordingly necessary changes have been made. Accordingly, effective capacity of the domestic industry is 49000 MT.

Views expressed by M/s Schenectady Herdillia, Mumbai.

25. Our company has pioneered the manufacture of phenol in India by the synthetic route and have been manufacturing this product since 1968. Apart from this, for the last over a decade, we have been manufacturing derivatives of phenol as well. We have been exporting significant quantities of phenol derivatives for which we had imported phenol duty free. All our imports of phenol during the Investigation period were under DEEC Scheme/Advance License.

We have already the supported the application made by Hindustan Organic Chemicals Ltd. (HOCL) for levy of Anti Dumping duty on phenol imported from the subject countries.

The data provided by us is open for verification by the officers of your Honorable Directorate. The data provided by us for the investigation period clearly shows that we have suffered injury due to dumping.

Since major portion of phenol derivatives manufacture by us is exported, the captive consumption for our own phenol (for manufacture and sale of derivatives in domestic market) is a very small portion of our domestic production.

Our company has no objection for being included as a part of the domestic Industry. Likewise, our company has no objection to being excluded from the domestic industry for the purpose of said investigation.

We learn that M/s HOCL are praying for increase in Anti-Dumping Duty on phenol imported in packed condition. We support this prayer of HOCL.

M/s Merisol S.A South Africa

26. Use of data filed by Merisol at para43 page 37 of the Preliminary Findings, the Hon’ble Designated Authority has noted that the ‘the authority has, therefore, taken the port data furnished by Kandla Customs for imports of subject goods from EU and all bulk imports from South Africa. It is submitted that Merisol is the only exporter of this product under consideration from South Africa. The data filed by Merisol is true and complete representing all drum and bulk imports from South Africa, thus, it is submitted that the exporters data be accepted as full and complete and all calculations be made on this basis.

The petitioners cite the example of Polyol as a basis for the co-existence of Anti dumping duty and safeguard duties. However, it is clear from the sequence of events that at the time of discontinuance of safeguard duties, no anti dumping duty had come into force.

At the outset, it must be stated that the Hon’ble Designated Authority has erred by relying only on the information provided by M/s. HOCL and has ignored the data of M/s. Schenectady Herdillia by ruling them out of being domestic industry. It may please be noted that M/s HOCL has historically been an inefficient enterprise and basing all the injury calculations on the HOCL data is causing extreme hardship to the consuming industry.

M/s Mitsui &Co, Singapore

27. In para 35 of the preliminary findings, the information related to cost of production, net sales realization and profit and loss has been indexed with reference to the year 1998-99. In this connection, we wish to submit that the figures of the period of investigation cannot be compared to 1998-99 as a proper analysis would require that the comparisons are made with the immediately preceding period unless reasons to the contrary are demonstrated.

M/s Atul Ltd, Mumbai

28. We wish to mention here that Atul Limited is a Rs.600 crore turnover company belonging to the Lalbhai group having diversified interests in various fields. Our Agrochemicals division manufacturers wide range of pesticides (herbicides and fungicides) and cater to domestic as well as export market. We are the major end user of phenol in pesticide industry and would severely be affected due to proposed imposition of anti dumping duty on phenol imports.

Authorities have already accepted in para 8 of part D that HCL is another major producer in the country and supports the petition. We submit that here that in all fairness, the same yardstick should be applied for interpreting various provisions of the act and the Authorities should reconsider their exclusion from the investigation.

Imposition of Anti Dumping Duty does not serve public interest:

This would lead to heavy losses and in turn closure of the units.

.Retrenchment of labour creating labour unrest/unemployment.

M/s Foseco

29. We are one of the largest speciality chemical supplier to the Foundry and steel industries, mainly consisting of automotive, general engineering, railways, valves and associated small foundry ancillaries, who are catering to the auto manufacturers. As you are aware, due to continuous recession and the slack in the economy in the above mentioned foundries (viz. automotive, general engineering, railways, valves) our customers are unable to bear the increase in the input cost with the result we are forced to absorb the increased cost since we are unable to recover the same from the end users.

High prices of phenol has made the operational cost of the phenol user industry non-viable and same units are closing down.

It may be noted that the fluctuation in selling prices of phenol is result of supply and demand of phenol in market at a given time and not due to dumping. It can be seen that prices of phenol have since been increased by phenol manufacturers by Rs.4000 pmt and prices of acetone have also been increased by Rs.3500 PMT though there has been no increase in cost of raw materials.

M/s Kesar Petroproducts

30. We are manufacturers of Bisphenol-A (BPA) having rated capacity of 5000 TPA. Our requirement of phenol is 0.966 MT per MT of BPA. We also require Acetone (0.303 MT per MT BPA) which is a joint product of phenol. Thus, we are fully dependent on phenol manufacturers of our production programme and have been buying our requirements of phenol and acetone from HOC. We have developed strong business relationship with HOC and have received highly satisfactory service from them in terms of deliveries, product information, terms of payment etc.

It is, however, experienced that price of phenol as well as acetone are very frequently revised upwards under a joint strategy followed by the two phenol manufacturers. For every increase of Rs.1000 in the price of phenol, the manufacturing cost of BPA goes up by Rs.1000 per MT. We are not able to pass on these increases in the cost of production to our customers since BPA is available in the international at a very competitive price and in order to retain our customers we have to absorb such increases which result in our operations becoming unprofitable.

M/s Ficom Organics

31.We were one of the largest manufacturers of Alkyl Phenols in India since 1983 to 1998 and were consuming large quantity of phenol from M/s. Hindustan Organics Chemicals Limited, (HOCL), Cochin. However, in the process of globalization, import duties have been reduced drastically from original level of 100% to 30% on Alkyl phenols thereby opening up the gates of cheaper imports of Alkyl phenols in to India from nearby countries. We could not compete them as we had no direct/indirect protection and also no control on phenol price as there were only two manufacturers of phenol.

We have not been able to operate the plant at full capacity as phenol supply from HOCL is erratic.

When Indian manufacturers are not able to meet domestic demand there is no alternative for the consumers of phenol but to import and if anti dumping duty is levied in such a situation, especially manufacturers like us who will be forced to once again shut their plant due to high cost of their finished goods.

International prices are currently ruling around US $ 750/MT. At such a high price coupled with local customs duty, safeguard duty, special additional duty and storage cost we do not see any justification of still to levy anti dumping duty as this will seriously affect the consumers of phenol who will be forced to import due to non-availability from domestic manufacturers. In such a situation dumping of phenol in India is just not possible.

At this juncture, we would also request you to make anti dumping duty applicable on range of Alkyl Phenols being produced in India as we also need equal protection from other countries against cheaper imports.

Govt of Maharastra, Department of Energy

32. A number of representations have been received from manufacturers of downstream products based on phenol in Maharashtra to the effect that imposition of such duties will be extremely harmful to them and many of them may have to discontinue or drastically reduced their production since they are already selling their products below cost of production due to international competition.

It is requested that the matter may be viewed very carefully in the longer interest of phenol manufacturers as well as phenol users which is required in the interest of long term growth of phenol and phenol based industry.

M/s MPCL

33.It may be considered that like the petitioner, the phenol users are also domestic industry which requires market conditions in which it can survive. Thus, a view has to be taken on how to protect the interest of the domestic industry as a whole and not only the interest of the petitioners who have much more financial strength than the downstream small and medium sector users of the petitioners product.

M/s Pragati Chemicals

34.They have pointed out towards high profitability of Phenol plant and also the fact that HOC was an importer of phenol earlier. They have also pointed out the fact that like the petitioners, phenol users are also domestic industry, which requires market conditions in which it can survive.

Alta Laboratories

35. We are manufacturers of Bulk Drugs & Fine Chemicals mainly Salicyclic Acid & its derivatives and phenol is our basic raw material. Prior to the year 1987 M/s. Herdillia Chemicals Ltd. was the sole manufacturer of phenol and we had to face all sorts of problems, which are inherent in a monopolistic supplier. With the advent of M/s. Hindustan Organic Chemicals Limited, we were optimistic that the situation would improve, but it was only an illusion.

Like petitioner we are also a domestic industry and we require market conditions in which we can survive. Our main product Aspirin is subject to statutory price control under DPCO and Govt. expects us to sale this drug at reasonable price. Aspirin contributes more than 60% of our sales turnover. Thus, a view has to be taken on how to protect the interest of the domestic industry as a whole and not only the interest of the petitioners.

All India Association of Industries

36.We like to bring to your notice that one of our members has been seriously affected by way of heavy increase in input cost of phenol imported Europe, Singapore and South Africa.

The Speciality chemical is supplied mainly to the Foundry and Steel Industries, mainly consisting of automotive, general engineering, railways, valves and associated small industry ancillaries, who are catering to the auto manufacturers.

Hence, for survival of the foundry industry and foundry chemical suppliers, it is requested that the anti dumping duty should not be imposed and look forward to your valued response.

European Union

37. In addition, the European Commission would like to draw your attention to what seems to be an incoherent use of information. When determining whether exports from the EU were below the De Minimis threshold, the Designated Authority has used data as submitted by the petitioner allegedly due to the incompleteness of published data from the DGCI&S.

The assertion by the DA that ‘the landed value of imports has been found to be significantly lower than the domestic industry’s net sales realization should led to an even more demanding analysis of all factors causing injury, as determined under Article 3.4 of the WTO AD Agreement

Given the above, it is submitted that the current anti dumping investigation must be terminated.

Examination by the Authority regarding Current Price Increase, Current Supply constraints and Other Issues raised

The response filed by Mitsui & Company states that the goods exported by the company were goods produced by Mitsui Phenol Singapore. This is in response to the question in the questionnaire with regard to identity of the producer. Followings are relevant in this regard: -

Since Mitsui & Company is not a producer of the subject goods, the company is not entitled for determination of dumping margin in isolation. At best, the company could seek fixation of anti dumping duty rate along with the concerned producer.

Since Mitsui & Company and Mitsui Phenol are affiliates, sales made by Mitsui & Company should be treated as sales made by Mitsui Phenol through its affiliates. Thus, Mitsui & Company is left with no sales which did not originate in Mitsui Phenol. Such being the case, Mitsui & Company could not have demanded a separate dumping margin.

The response filed by Mitsui Phenol is deficient to the extent that the company has not disclosed the fact that the exports to India were in fact carried out by Mitsui & Company. Thus, the same export transaction to India has been treated twice for determination of dumping margin - once as exports of Mitsui & Company and again as exports of Mitsui Phenol.

In response to the disclosure, the domestic industry on the issue of dumping from M/S Mitsui Phenol Singapore Ltd, maintains that the exporter has not furnished profit & loss statement of the company, which is very critical for determination of fair cost of production of the company (relevant for determination of whether the sales made in the domestic market of the exporting country were in ordinary course of trade. As regards Mitsui & Co, Designated Authority is fully justified in treating exporter as non-cooperative, as vital information has not been provided by the company though they maintain that There is no legal basis for the exporter to claim separate dumping margin in case the exporter is a trader. As regards M/s Merisol, since the exporter has not provided information desired by the Authority, it has been rightly held that the exporter has not cooperated in the investigations

41. The Authority sent questionnaire to all the known exporters for the purpose of determination of normal value in accordance with Section 9A(1)©. The Authority received responses from the following exporters and exporters association.

Mitsui Phenol Singapore Ltd(MPSL), Singapore.

Merisol RSA (pty) Ltd, South Africa.

42. The Authority notes that M/s Mitsui & Company Ltd, Singapore Branch is a public company Incorporated and listed in Japan. They have exported to different importers in India during POI though they don’t have any domestic sales. On the other hand M/s Mitsui Phenol Singapore Pte ltd, Singapore has exported to India during the POI through trading houses and they have made domestic sales also during this period.

45. As regards determination of normal value for other non-cooperating exporters, the Authority has taken normal value as determined in the case of M/s Mitsui & Co. Singapore as mentioned in the preceding paragraph. As regards the export price the Authority has taken the lowest export price from Singapore to India during POI as the export price for non-cooperating exporters. The ex factory export price has been arrived after making adjustments towards commission, ocean freight and insurance. The authority has determined normal value as US$ **** per MT and Export price as US$**** per MT for non-cooperating exporters. The Dumping margin for Non-cooperating exporters comes to US$. **** Per MT or 91.70% of the export price.

46. M/s. Merisol RSA (pty), South Africa has responded to the questionnaire but has given incomplete information with regards to the different Annexure. As per the Appendix 1 they have submitted detailed information about the various sales in their domestic market by mentioning the invoice numbers, volume sold, sales value and rate per unit. They have also given invoice numbers of their domestic sales with quantity and rate per unit with respect to two principal grades, drum sales and bulk sales. In the Appendix 2 they have submitted an account of Phenol exports to India for the POI. They have backed this information by giving an account of sales to Indian customers by name giving a breakup of invoice values, ocean freight, insurance, commission, etc. In the Appendix 3 they have given an account of exports to India, sales to third countries and also sales in their domestic markets. They have submitted Appendix 4 and 5 giving sales price structure for exports to India and sales price structure for their domestic sales. However they have not given sufficient information regarding their other product’s quantity and value. However they have given an account of factory costs and profit of exports to India and for their domestic market with regards to their bulk and drum sales though they have not submitted required information about their financing and interests costs and they have not submitted net profit which they have added to their ex factory costs in the Appendix 8 and 9.

The Authority, after the public hearing, had asked the exporter to provide additional information especially relating to the costing and had also asked the exporter about their willingness to have the data submitted by them verified but the exporter has not replied to the Authority letter till date. The exporter was asked to furnish information relating to the basis of allocation of expenses to the product under consideration, basis of adjustments claimed in the various Appendices, copies of profit & loss and balance sheet for the POI and three years prior to that, net profit/loss before tax and unit selling price in the Appendix VIII and IX amongst others. As the exporter has not submitted the required data, the Authority has been constrained to determine the normal value as per the best information possible as per Rule 6(8). In this regards, the Authority has also accepted the data made available by the domestic industry with applicable adjustments and suitable normation. Normal Value for the bulk sales come to US$ **** per MT and US$ **** per MT from drum sales. As regards determination of export price, the Authority notes that the exporter has exported **** MT of subject goods to India for a value of US$ **** at the rate of US$ **** per MT for bulk sales and ***** for US$**** at the rate of US$**** per MT for drum sales. The export price has been determined at the ex factory level after making adjustments towards inland freight @ US$**** for bulk and US$**** for drum sales on per MT basis. Packing @ US$**** per MT in the case of drum phenol has been allowed by the Authority. Storage @ US$**** , handling, @ US$ ****, others, @ US$ ****, have been allowed for the bulk sales on per tonnage basis. As regards drum sales, commission has been allowed @ ****, inland freight @ US$ ****, handling @ US$ ****, others @ US$ ****, overseas freight @ US$ ****, overseas insurance @ US$**** and shipping charges @ US$ **** have been allowed on per tonnage basis. Thus after all adjustments, the export price has been worked out as US$**** for bulk sales and US$ **** for drum sales.

Dumping margin comes to US$ **** per MT or 74.14% of the export price for bulk sales and US$ **** per MT or 75.38 % of Export price for drum sales.

47. As regards the export price, the Authority has taken the lowest export price from South Africa to India during POI as the export price for non-cooperating exporters both for bulk as well as drum sales. The authority has determined normal value as US$**** per MT and US$**** per MT for bulk sales and drum sales respectively as has been done in the case of M/s Merisol Pty Ltd and Export price as US$ **** per MT and US$**** pre MT both for bulk sales and drum sales respectively for Non-cooperating exporters. Dumping margin comes to US$ ***** per MT or 146.87% of Export price and US$ **** per MT or 108.69% of export price for bulk and drum sales respectively.