MINISTRY OF COMMERCE AND INDUSTRY
(DIRECTORATE GENERAL OF ANTI-DUMPING AND ALLIED DUTIES)
Sub:
Anti-Dumping investigations concerning Sunset Review of anti dumping duty on
imports of Catalysts viz. Hydrodesulpherisation, zinc Oxide Desulpherisation, High
Temperature Shift, Low Temperature Shift, Secondary Reforming and Methanation Catalysts
from
No. 27/1/2001-DGAD. – Having regard to the Section 9A(5)of
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
The procedure described below has been followed:
(i)
The Designated Authority (hereinafter also referred to as Authority), under the
above Rules as per Section 9A(5) of the Customs Tariff (Amendment) Act, 1995 and the
Customs Tariff (Identification, Assessment and Collection of Anti-Dumping Duty on Dumped
Articles and for Determination of Injury) Rules, 1995 initiated Sunset Review to review
the need for continued imposition of anti-dumping duty on imports of Catalysts as
indicated in the original preliminary findings of the Authority dated 7.5.1997 and
the Custom Notification No. 56 dated 20.6.1997 (hereinafter also referred to as subject
goods and subject catalysts) originating in or exported from Denmark (hereinafter referred
to as subject country).
(ii)
The Authority issued a public notice dated 17.1.2002 published in the Gazette of
India, Extraordinary, initiating Anti-Dumping investigations in respect of the above
mentioned investigation concerning imports of the subject goods classified under Chapter
38 and also under 98 of Schedule I of the Customs Tariff Act, 1975 originating in or
exported from Denmark.
(iii)
The Authority forwarded a copy of the public notice to all the known exporters
(whose details were available in view of investigations conducted earlier) and
industry/user associations and gave them an opportunity to make their views known in
writing in accordance with the Rule 6(2).
(iv)
The Authority forwarded a copy of the public notice to all the known importers
(whose details were available in view of investigations conducted earlier) of subject
goods in India and advised them to make their views known in writing within forty days
from the date of issue of the letter in accordance with the Rule 6(2).
(v)
Request was made to the Central Board of Excise and Customs (CBEC) to arrange
details of imports of subject goods made in
(vi)
The Authority provide a copy of the initiation notification to the known exporter
and the Embassy of the subject country/European
(vii)
The Authority sent a questionnaire to elicit relevant information to the following
known exporters/producers, in accordance with the Rule 6(4):
(i)
M/s. Haldor Topsoe A/s (HTAS),
Response/information to the questionnaire was
filed by the following exporters/producers:
(i)
M/s. Haldor Topsoe A/s (HTAS),
(viii)
The Embassy of the subject country in New Delhi and European Union, Delegation of
the European Commission, New Delhi were informed about the initiation of the investigation
in accordance with Rule 6(2) with a request to advise all concerned exporters/producers
from their country to respond to the questionnaire within the prescribed time. A copy of
the letter and questionnaire sent to the known exporter was also sent to the Embassy of
the subject country and European Union, Delegation of the European Commission,
(ix)
A questionnaire was sent to the known importers/user association of the subject
goods whose details were made available by the petitioner for necessary information in
accordance with Rule 6(4): -
Response/information to the questionnaire was filed by the following importers: -
(i)
M/s. Rashtriya Chemicals & Fertilizers
Ltd., Mumbai
(ii)
M/s. Indian Oil Corporation Ltd.,
(x)
Information regarding injury was sought from M/s. Project and Development India
Ltd. (PDIL) and M/s. Sud-Chemie India Pvt. Ltd. (SCIL), the domestic producers of the
subject goods. The cost of production/injury information was furnished by M/s. SCIL only.
M/s. PDIL however gave information regarding their production by various subject catalysts
in the POI.
(xi)
Request for extension was made by certain interested parties which was considered
by the Authority and extension was granted upto 20.3.2002. Comments received on the same
have also been duly considered in these findings.
(xii)
Cost investigation of M/s. SCIL was also conducted to work out optimum cost of
production and cost of make and sell the subject goods in
(xiii)
Additional information from M/s. HTAS, the only responding exporter from
(xiv)
An opportunity was provided to all interested parties to present their views orally
on 29.4.2002. All parties presenting views were requested to file written submissions of
the views expressed. The parties were advised to collect copies of the views expressed by
the opposing parties and offer rebuttals, if any;
(xv)
The Authority kept available non-confidential version of the evidence presented by
various interested parties in the form of public file maintained by the Authority and kept
open for inspection by the interested parties as per Rule 6(7).
(xvi)
In accordance with Rule 16 of the Rules supra, the essential facts/basis considered
for these findings were disclosed to known interested parties on 3.9.2002.
(xvii)
*** in this notification represents information furnished by an interested party on
confidential basis and so considered by the Authority under the Rules.
(xvii)
The period of investigation (POI) considered is 1.4.2002 to 30.9.2001.
B.
VIEWS OF THE DOMESTIC INDUSTRY, EXPORTERS, IMPORTERS, USER ASSOCIATIONS AND
OTHER INTERESTED PARTIES & EXAMINATION BY THE AUTHORITY
The views expressed by various interested parties have been discussed in the disclosure statement. The views which have not discussed earlier in the disclosure statement and those now raised in response to the disclosure statement are discussed in the relevant paras herein below 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 the relevant paras herein below.
1.
VIEWS EXPRESSED BY M/S
a)
PRODUCT UNDER CONSIDERATION & LIKE ARTICLE
(i)
In regard to LTS, HTAS has mentioned that they are supplying special
catalyst LSK. Both LSK and LK823 type catalysts have been manufactured and cannot be
manufactured in that way in
(ii)
HTAS resorts to offer catalysts with minor
modification and calls them proprietary by changing nomenclature.
(iii)
In regard to Methanation, there is nothing
revolutionary in introducing a pre-reduced catalyss. Domestic Industry can also
manufacture pre-reduced or active the catalyst before deliver. HTAS is trying to introduce
a new proprietary product by circumventing anti dumping duties.
(iv)
HTAS has supplies HDS catalyst from its market subsidiary which does not attract anti dumping duties. We request the anti
dumping duty to be put on this catalyst when supplied from
b)
DUMPING
(i)
NORMAL VALUE
(i)
The Domestic Industry has provided information on the actual prices received from
M/s. Mid-Chemie AG, German during the period of investigation for supply of subject
catalysts within the
(ii)
The Domestic Market of M/s. HTAS is not only is not only confined to
(iii)
M/s. HTAS have admitted to have supplied ZnODS and LTS catalysts into
(iv)
The dumping is relevant to the normal value and not to the cost of production and
that the normal value should be the price at which the HTAS supplied these catalysts in
the European Union. M/s. HTAS should make available these prices in the European Union to
the Designated Authority.
(ii)
EXPORT PRICE
(i)
M/s. SCIL has provided tender participation
details on six catalysts for the POI indicating the participation and award of tender to
various participants.
In response to the Disclosure, the following submissions have been made:-
(i)
We would like to reiterate her that the
Sunset Review the Designated Authority needs to take a broad view of the case to examine
whether M/s. HTAS will again resort to dumping their products in the absence of anti
dumping rules.
(ii)
The Designated Authority has examined the
case within the limited time frame of the period of investigation under this review. This,
while enough for the Designated Authority to examine if actual dumping is occurring and
the injury on Domestic Industry, is not large enough a time span to come to a conclusion
as to the long term intentions of any company.
(iii)
We would also like to bring to your
attention to our submission dated
(iv)
Keeping the fact of (iii) above and a larger
time frame in mind, we request the Designated Authority to continue with the Anti Dumping
Duty on HTS catalyst as, in the absence of the
Anti Dumping Duty, HTAS will once again resort to selling their catalyst at dumping
prices.
(v)
We request that in the event of finding
yourself unable to use information from outside the POI, you at least use the
Non-Injurious price worked out by you for the HTS catalyst and take an undertaking from
M/s. HTAS that they will not supply at prices below such NIP. We are confident that M/s.
HTAS will refuse to do so in the event of being asked further strengthening our contention
that their intention to dump at injurious prices remain.
c)
INJURY & CAUSAL LINK
(i)
We have been able to maintain our market
share and therefore there is no significant decline either in our production or in
capacity utilisation or in our employment levels. However, this has been achieved at the
cost of having to suppress our sales price in spite of our increase in production leading
to greater loss in profit as evidenced by the loss incurred in actual indigenous sales
turnover for the past six years.
(ii)
The catalysts-wise information and the
landed value clearly indicates that there is a causal link between our performance and the
existence of Anti Dumping Duty.
(iii)
Because of present anti dumping duty in case
of some catalysts, we have managed to benefit by increasing our market share as also our
capacity utilisation. However this alone has not been sufficient to remove injury caused
to us as can been seen from the sales price compared to our cost of production.
(iv)
Injury has persisted due to our having to
suppress or reduce our prices because of M/s. HTAS’s policy of negotiating down or
quoting the very low prices in their catalysts.
(v)
In case of ZnODS catalysts, HTAS continued
to dump and that the fall in existing duty, the dumping margin has increased. The
situation as now changed and we are being injured
by the dumping of ZnODS.
(vi)
The process of recovery has been slow for us
and that five years is too short a time for anti dumping duty to have effect on the market
to enable the prices to be increased. The majority of these five years have been consumed
in the legal process and there has been a stiff resistance for any increase in price.
(vii)
There has been
a significant effect of catalyst’s life which pertains from 5 years to 12
years depending on plant design and therefore 5 years period for anti dumping duty is not
sufficient to have its effect in the market.
(viii)
We are managing to retain our market share
provided that if the anti dumping duties are continued for a few more years so that we
will be able to increase our price in a manner which will be to our customer’s
satisfaction.
(ix)
The anti dumping duty as calculated on the
basis of our cost of production at 70% capacity utilisation is inadequate to redress the
actual market injury being suffered now by the Domestic Industry.
(x)
The basic Customs duty has decreased to 25%
which has meant the landed cost for exporter is now cheaper allowing him to further reduce
its price.
(xi)
HTAS’s strategy has been to quote very
low prices on non-proprietary catalysts and compensate the losses so incurred by selling
their proprietary catalysts namely Primary Reforming Catalyst and Ammonia Synthesis
Catalysts at high prices giving them unrealistic profits.
(xii)
In case of Methanation, no tender was
floated during the POI. As was if HTAS has not supplied this as dumped prices because
there is no demand for this catalyst.
(xiii)
In
case of Secondary Reforming Catalyst only one tender was floated during the POI and the
order was awarded to a foreign company i.e. M/s. Synthetic. HTAS did not participate in
this tender at all.
(xiv)
In case of HTS we found it difficult to
believe that HTAS who continued dumping in case or other catalysts will not take advantage
of the situation to recommence dumping of HTS if there were no anti dumping duties.
(xv)
Regarding price suppression, it has been
mentioned by HTAS that it has been on account of internal competition amongst domestic
producers. As pointed out by us, there is a definite causal link between HTAS’s
account of dumping and inability of the Domestic Industry to substantially increase its
prices. We deny HTAS’s contention that our injury is self-inflicted.
(xvi)
We re not only being injured by the attitude
of M/s. HTAS but also the injury has increased from past levels because of factors like
existing customs duties, cost of production, capacity utilisation etc. which are beyond
our control.
2.
IMPORTER’S VIEWS
The following
submissions have been made by M/s. Rashtriya Chemicals & Fertilizers Ltd., Mumbai and
M/s. Indian Oil Corporation Ltd.,
a)
EXPORT PRICE
(i)
The import prices of various non-subject catalysts have been provided by
M/s. Rashtriya Chemicals & Fertilizers Ltd., Mumbai and M/s. Indian Oil Corporation
Ltd.,
3. EXPORTRER’S VIEWS
A)
M/S. HALDOR TOPSOE A/S (HTAS),
a) PRODUCT UNDER CONSIDERATION & LIKE ARTCLE:
(i)
The allegation regarding circumventing anti dumping duty on LTS is incorrect
since LTS catalyst is subjected to anti dumping duty even after modification. There are no
catalysts being manufactured within
(ii)
As regards pre-reduced Methanation catalyst, we have not exported the same
and we have made submission that this catalyst has not been manufactured in
In response to
the Disclosure Statement, the following submissions have been made:
(i)
We agree with the Authority that the product under consideration is the six
Catalysts identified in the original investigation. In regard to the LTS Catalyst, we have
clearly stated that there is no attempt to circumvent the anti dumping duty on the said
Catalyst. In fact, we had categorically indicate that the modified LTS Catalysts has been
subjected to anti dumping duty. We had only pointed out that the modified LTS Catalyst is
not manufactured in
b) DOMESTIC INDSUTRY
In response to the disclosure, the following submissions have been made:
(i) We submit that SCIL and PDIL do not constitute the domestic industry. It is pertinent to note that the Sunset Review has been initiated by the Authority and not at the instance of the domestic industry. Consequent on the initiation, only PDIL has come forward to support the Review. Hence PDIL cannot be treated as forming part of the domestic industry. Our submission is also reinforced by the fact that the Authority had also examined only SCIL for the purpose of injury determination.
c)
DUMPING
(i)
NORMAL VALUE
(i) The exporter has indicate that there are no sales in the home market of the six catalysts during the Period of review.
(ii) The exporter has also provided the quantity of exports to other countries with reference to six catalysts.
(iii) The exporter has provided details on the cost of production for 6 catalysts during the period of investigation. The exporter has submitted that out of 4 catalysts have not been exported during the period of investigation and so there is no export price and hence the dumping margin cannot be determined.
(iv) The cost of production of ZnODS and LTS catalysts have been provided and these are supplied at prices which covered total costs including the overheads and hence have not been dumped.
(ii) EXPORT
PRICE
M/s. HTAS have provided FoB value of ZnODS and LTS catalysts and expenses incurred on account of ocean fright and pre-FOB expenses.
In response to
the Disclosure Statement, the following submissions have been made by the various
interested parties:-
(i) We agree with the stand taken by the Designated Authority that the Normal Value in respect of Methanation, Secondary reforming, HDS and HTS Catalysts need not be determined as these four Catalysts were not exported during the review period. Further, HTAS has not been participated in the tender process for two of the subject Catalysts. In any case, in the absence of export price, it is impossible to determine the Dumping Margin. Therefore, these four catalysts cannot be said to have been dumped during the period under review. The recurrence of the dumping of these four Catalysts is also a remote possibility, as has been correctly observed by the Designated Authority, as HTAS had not participated in the tender process/did not obtain any orders for these Catalysts during the period under review.
(ii)
We reiterate that the original investigation was initiated only against
(iii)
HTAS notes that the Authority has determined the normal value for the LTS
and ZnODS Catalyst on the basis of domestic selling prices in
(iv)
To the best of our information. Zinc Oxide Catalyst had not been sold within
B) EUROPEAN
COMMISSION, DELEGATION OF EUROPEAN COMMISSION,
a) DUMPING
The following submission have been made by European Union, Delegation of the
European Commission,
(i)
By using list prices in
(ii) Even if the Designated Authority was entitled to conclude that the Danish exporter had refused access to some information, it should not have disregarded the exporter’s cost information. By not explaining the reasons for the rejection of the information and not properly conducting a verification of the probative value of the complainant’s information which was used, the Designated Authority violated Article 6.8 and Annex II of the WTO Anti dumping Agreement.
(iii) By not disclosing to the Danish exporter crucial information used to calculated Normal Value and export prices and to determine the alleged injury, the Designated Authority violated Articles 6.2 an 6.4 of the WTO Anti dumping Agreement.
In response to
the Disclosure, the following submissions have been made:-
(i) Article 11(3) of the WTO Anti Dumping Agreement (ADA) requires that:-
“……..any anti dumping duty shall be terminated on a date not later than five years from its imposition ….unless the authorities determine, in a review ……, that the expiry of the duty would be likely to lead to continuation or recurrence of dumping and injury …..”
This provides pre-supposes the existence of an anti dumping duty on the product under review. However, in the case of catalyst ZnODS there was none. Therefore, it is not possible to use the tests of continuation and recurrence based on the expiry of a duty, which does not exist, to justify the imposition on a higher duty rate on this product. Indeed the very inclusion of this product in the review investigation at all is highly questionable.
The European
Commission submits that
(ii) The calculation of the Normal Value is clearly in breach of the WTO Anti-Dumping Agreement. The Agreement clearly states that where no domestic sales the authorities must use either “a comparable price of the like product when exported to an appropriate third country provided that this price is reasonable, or ….the cost of production in the country of origin….”
The Indian
authorities have stated there are no sales on the domestic market, which they have
identified as the European Union. However they then proceed to calculate normal value on
the basis of list price of a domestic producer in
d) INJURY & CAUSAL LINK
A)
M/S. HALDOR TOPSOE A/S (HTAS),
(i) M/s. HTAS has not been able to obtain any order for the 4 catalysts during the period of review because of the fluid situation on account of litigation during which the customers have always taken into account the existence of anti dumping duties in evaluating tenders on or after imposition of the provisional anti dumping duties.
(ii) The arguments that M/s. Sud-Chemie was not able to make any price increase because of uncertainty does not represent the correct picture.
(iii) The Submission of M/s. Sud-Chemie that they have not been able to retain or increase market price at ruinous price is again due to their own estimation while offering quotations. The injury, if any, as a result of obtained orders at these ruinous prices are self-inflicted and cannot be attributed to dumping.
(iv) As regards non-injurious price, depending on the optimum capacity utilisation of 70% within a period consistently adopted practice on determining NIP at optimal capacity utilisation. This practice has been followed in all cases.
(v) The injury to M/s. Sud-Chemie is because of the higher costs arising out of lower capacity utilisation even after imposition of anti dumping duty and it supports the contention that injury was due to reasons entirely extraneous to dumping.
(vi) Reduction in customs duty is a regular phenomena and that the exports have reduced price to the extent of fall in customs duty is incorrect. The fact that HTAS did not get even one order during the period illustrates that the reduction of customs duty has in no way benefited the exporter.
(vii) As regards proprietary catalysts referred to by M/s. Sud-Chemie, it is a normal practice for technology providers to specific certain pre-conditions such as design criteria, hardware including catalysts supplied in order to stand by the performance guarantee f the plant. These catalysts are not those under investigation and hence references to these are irrelevant.
(viii) The injury margins were higher in previous investigation because of inclusion of M/s. PDIL ad a Domestic Industry. Since PDIL has not cooperated in the present investigation, the NIP would be determined on the basis of cost of production of M/s. Sud-Chemie only and there would be no injury margin. Hence there is no continued injury nor can injury reoccur.
(ix) In a Sunset Review or Expiry Review, the Authority is required to evaluate the following two aspects:-
a) Whether the dumping and injury are continuing
Or
b) Whether dumping and injury are likely to recur if the duty is withdrawn
HTAS had supplied
two consignments of Low Temperature Shift Catalyst during the Period of review. One type
of this catalyst was a new catalyst which had a lower rate of methanol formation. This
catalyst is not being manufactured in
Further the attention of the Designated Authority is invited to the fact that in the original investigation there were two domestic producers viz. PDIL and SCIL. In the present investigation, which has been invited by the Authority on its own motion, PDIL has not extended its cooperation. SCIL is the only domestic producer whose injury recurrence is required to be analysed by the Authority. It is submitted that the fact that PDIL had not cooperated is significant and the recurrence of injury only to SCIL is required to be evaluated judicially. Since the recurrence of dumping and injury are to be not based on a mere conjecture or remote possibility ad PDIL has chosen not to cooperate, the Authority may return a negative verdict of recurrence of dumping and injury.
(x) It is also significant to note that SCIL had not approached the Authority with a request for initiation of the expiry review. It is because the Authority has initiated the review that they have chosen to take advantage of the situation. This is a significant aspect which shows the remote possibility of the continuation or recurrence of injury.
(xi) We also wish to bring to the notice of the Designated Authority the submission of SCIL that during the period when the anti dumping duty was in force, orders were obtained either by them or by PDIL and that the price of the catalysts had not moved significantly because of the imposition of anti dumping duties. This submission suggest that the prices prevalent in the domestic market are determined by internal competition and is uninfluenced by the price of HTAS. If at these prices, which were prevalent during the Period of review, SCIL had suffered losses (injury) then the causal link for that injury cannot be placed on HTAS. Hence, the recurrence of injury is again a mere conjecture. Injury if any, is self-inflicted and cannot be considered as continuation of the material injury or recurrence of the material injury which presupposes the existence of a causal link between the dumping and the material injury.
(xii) We entirely agree with the questions posed to SCIL by the Designated Authority at the hearing regarding the number of tenders that SCIL lost and whether such tenders were lost of the Domestic Industry. Since the alleged dumping has been corrected by the existence of anti dumping duties, the inability of the Domestic Industry to make good use of the opportunity shows that their injury if any, was not at all due to the alleged dumping. I fact, this reinforces our submission right through that the injury, if any, was not at all due to HTAS.
In response to the disclosure, the following submissions have been made:-
(i) The CIF price in Dollar per Litre and Dollar per Kg fort the two Catalysts is tabulate below:
Catalyst |
FOB Price $ |
Ocean freight $ |
Ocean Insurance $ |
CIF $ |
Zinc Oxide |
3.162 /lit |
0.07 |
0.005 |
3.237 |
LTS |
5.12 /lit |
0.07 |
0.008 |
5.198 |
(ii) We request the Authority to use the above CIF figures for determining the landed value and to examine whether the Injury Margin is lower than the dumping margin.
(iii) The Disclosure states reproduces the submissions of SCIL, the delegation of the European Commission and HTAS. It is seen from para 4 – “Examination by Authority” that these submissions will be considered at for determination of injury to the Domestic Industry. In other words, there is no disclosure in regard to the existence or recurrence of injury. The Disclosure statement is flawed.
(iv) The Authority will recall that in the original investigation HTAS had pointed out that each of the six catalysts was a distinct like product. The catalysts are not substitutable and hence the injury should be determined separately for each of the six catalysts. The Authority did not accept this contention and had determined the injury by cumulating all the six catalysts together and had invoked Article 3.6 of the Agreement on Anti Dumping. In the present investigation period, 4 of the subject catalysts had not been exported. The Zinc Oxide Catalyst should not have been included in the investigation as the duty on the said catalyst was zero in the original investigation. Since there was no anti dumping duty for Zinc Oxide Catalyst the same cannot form part of the present Review. Proviso to Section 9A (5) provides for a Review on the premise that cessation of the duty is likely to lead to continuation or recurrence of dumping and injury. Cessation of duty presupposes the existence of anti dumping duty. There was no duty on Zinc Oxide Catalyst and hence there is no question of cessation of the duty on Zinc Oxide catalyst. Inclusion of Zinc Oxide Catalyst in the Sunset Review is incorrect.
(v) The injury analysis is, therefore required to be restricted only to the LTS catalyst. As the Authority had already held that it is not possible to determine injury separately for each catalyst, any injury analysis based on injury parameters for all the six catalysts would completely distort the injury analysis. The Authority cannot, therefore determine either the existence of or recurrence of injury to LTS/Zinc Oxide Catalyst. Consequently the review should result in termination of duty on all catalysts.
(vi) We entirely agree with the Authority, without prejudice to the foregoing, that the withdrawal of anti dumping duty on four Catalysts will not lead to recurrence of injury to the domestic injury. SCIL have argued that during the period of review they had suffered injury and that the said injury has been caused by the dumping. It is clear from their own submission that they have faced stiff resistance for any increase in price from customers. This is purely a commercial aspect and cannot be attributed to HTAS who not supplied four of these Catalysts.
(vii) The submission that the
reduction in the Customs duties had resulted in increase in dumping margin is totally
incorrect. The dumping margin is a function of normal value and export price at ex-works
level which are not at all dependent on the customs duty prevailing in
(viii) In view of the above, we request the Authority to re-examine the entire aspect of injury and casual link analysis and issue a revised disclosure. It is our submission that no injury has been caused to the domestic industry as a result of the export of the two Catalysts. Hence there is neither a present material injury nor the possibility of recurrence of material injury.
(ix) We request the Hon’ble Authority to terminate the Sunset Review by recommending withdrawal of anti dumping duties on all the six Catalysts.
B) EURPEAN
COMMISSION, DELEGATION OF EUROPEAN
(i) By not analyzing all factors having bearing on the states of the Domestic Industry as determined under Article 3.4 of the WTO Anti-Dumping Agreement the Designated Authority has violated the same article.
(ii) By not demonstrating a causal relationship between the alleged dumped imports and the alleged injury and by failing to examine other possible cause for adverse effects on the Domestic Industry, the Designated Authority violated Article 3.5 of the WTO Anti-dumping Agreement.
In response to the disclosure, the following submissions have been made:-
(i) The European Commission finds the injury analysis in this case to be very weak on a number of points:
Ø Of the two products for which injury was found, Catalyst ZnODS should not be included in the analysis for the reasons outlined under I) above.
Ø The Indian authorities have defined the ‘like product’ to be all six catalysts, despite the arguments of the Danish exporter. It would now appear, from the findings on injury in the review investigation that the investigation authorities have redefines the ‘like product’ without explicitly admitting it. The reasoning for this assumption, on our part, is that the injury analysis finds no injury in respect of four of the six products which should imply a separation of the various modes for the purpose of injury analysis.
Ø The finding contradicts the original finding that these catalysts are one like product an the WTO Rules it clear that injury must be determined for the like product as a whole. This raise the question, whether, then two thirds of the types concerned are found to be non-injurious, how can injury be found for the remaining one third. In these circumstances, injury could only be deemed to exist if a detailed injury and causation analysis concluded, that the alleged injury by the two models concerned (in fact, only one if ZnODS is excluded) was material in the context of the whole product range. It is clear that no such analysis has been carried out.
Ø
A further point needs to be made in terms of the information
available to the European Commission from the disclosure document and the Danish exporter.
The latter has shown that its export prices to
In summary, therefore, the European Commission considered that the investigation does not fulfill the requirement of Article 11 of the WTO Agreement on Sunset Reviews. The evidence on the table, little that it is, would indicate that the anti dumping proceeding on catalysts should be closed forthwith.
C. EXMINATION BY AUTHORITY
The foregoing submissions made by the various interested parties, to the extent these are relevant as per Rules and have a bearing upon the case, have been examined, considered and dealt with at appropriate places in these findings.
1.
PRODUCT UNDER CONSIDERATION AND LIKE ARTICLE
The Authority notes that the present investigation is a review investigation regarding the product under consideration vis Catalysts, namely, Hydrodesulpherisation (HDS), Zinc Oxide Desulpherisation (ZnDOS), High Temperature Shift (HTS), Low Temperature Shift (LTS). Secondary reforming (SR) and Methanation Catalysts determination dated 5th January, 1998 (hereinafter called original investigations) and the recommendations of which were implemented vide Custom Notifications. The subject catalysts are classified under the Customs Tariff Classification 38.15 and are also review cleared under Chapter 98 as project imports. Since the present investigation is only a review under Section 9(5) of the Customs Tariff Act, 1975 as amended in 1995, the Authority holds that the scope of product under consideration is limited to the original investigation as indicated above.
The Authority
nothing the submissions mad by M/s. SCIL regarding circumvention of LTS Catalysts under
different nomenclature and the HDS Catalyst being supplied in different form USA holds
that the product under consideration has been clearly indicated with technical description
in the original investigation in Para E(5) to E9() of the provisional findings dated
7.7.1997 and that any catalyst conforming to
these technical details irrespective of the fact that it has a different commercial
nomenclature is with in scope of product under consideration. As regards the Catalysts
which has been exported from
2. DOMESTIC INDUSTRY
The Authority holds that in the original investigation M/s. United Catalyst India Limited (UCIL) (Now M/s. Sud-Chemie India Pvt. Ltd. (SCIL) and M/s. Project & Development India Limited (PDIL) represented the Domestic Industry. In the present review investigation, the Authority notes that M/s. HTAS has indicated that this investigation was a suo moto review and that it has not been supported by M/s. PDIL and that M/s. SCIL only should be considered as Domestic Industry. The Authority in this regard notes that M/s. PDIL has provided information on the production of various subject catalysts during the investigation and that M/s. SCIL in view of its share in the total domestic production during the period of investigation represents the Domestic Industry as per Anti Dumping Rule 2(b).
3. NORMAL VALUE AND EXPORT PRICE
(i) FOR ZnODS AND LTS CATALYSTS
The Authority notes that the submission made by various interested parties and the
response pf M/s. Haldor Topsoe (HTAS) indicating that the two catalysts viz. Zinc Oxide
Desulpherisation (ZnODS) and Low Temperature Shift (LTS) have only been exported during
the period of investigation. The Authority also notes that in respect of all the six
catalysts, the exporter has indicated that there have been nil sales in Denmark and that
the have provided the cost of production for the two catalysts exported to India and that
they are not at the dumped price. The Authority also notes that the submission made by the
European Union, Delegation of the European Commission, New Delhi who have indicated that
in the original investigation the list prices as referenced by the Authority were not
comparable since the Danish exporter M/s. HTAS filed evidence to show that M/s.
Sud-Chemie’s export prices were between 30% and the 52% below its list price. It has
also been submitted by the European Union, Delegation of the European Commission,
The Authority holds that in the Review the circumstances on no domestic sales in
The Authority further holds that even if the maximum discounting of 52% s submitted by the Delegation of European Commission is considered on the domestic sales prices of M/s. Sud Chemie AG, Germany as provided by M/s. SCIL, there is still a definitive dumping margin witnessed in respect of these two catalysts. However, no definitive information has been provided by the exporter either on their domestic selling prices in the Territory of European Union or to the third country, or else on the aspect of discounting on list prices to an extent of 30 to 52% as submitted by the Delegation of European Commission even in response to the disclosure statement. The Authority therefore holds that the methodology of determination of Normal Value is consistent in accordance with the original investigation Para F(6) of Findings dated 5.1.1998, which was also upheld by Supreme Court and also not challenged by the exporter.
Keeping in view the judgement of Supreme Court, the provisions of Section 9A(1)(c)of the Customs Tariff Act, Annexure 1 of the Anti Dumping Rules, the Authority also does not consider it appropriate to reference the cost of production details as provided by the exporter for determination of the Normal Value but rather adopts the information as provided by M/s. SCIL for Normal Value determination consistent with the original investigation.
The Normal Value for ZnODS and LTS comes to ****$/kg and ****$/kg respectively.
(ii) OTHER CATALYSTS VIZ. HYDRODESULPHURISATION (HDS), HIGH TEMPERATURE SHIFT (HTS) SECONDARY REFORMING (SR) AND METHANATION (METH).
With regard to the above four catalysts, the Authority notes that while there have been no exports by M/s. HTAS during the period of investigation and also in the preceding two years i.e. 1998-99 and 1999-2000 as well and that there have been no participation in the tender process for export s to India in respect of the Methanation and Secondary Reforming catalysts. In respect of High Temperature Shift catalyst, the Authority notes that on the basis of the information provided by M/s. SCIL, the price undercutting and suppression phenomena has been on account of internal competition from the other domestic producer and therefore there does not appear to be enough evidence to suggest that cessation of anti dumping duty would cause recurrence of injury and dumping. It is competition from players other than M/s. HTAS which have led to a situation of price depression. The Authority therefore holds that under such situation recurrence of dumping and injury on account of cessation of anti dumping duty is not in respect of these catalysts. As regards Hydrodesulpherisation catalyst the Authority notes that there has been participation by other exporter as well and the order granted to them in absence of M/s. HTAS’s participation and the fact that during the period of investigation M/s. HTAS has not been able to successfully get any order does not lead to conclusion that cessation of duty is likely to lead to recurrence of dumping and injury.
The Authority therefore does not consider it appropriate to evaluate the Normal
Value for this catalyst also. As regards the other two catalysts viz, Methanation ands
Secondary Reforming, as there has not even been any participation in the tender process
for exports to India by M/s. HTAS during the period of investigation, there also does not
appear to be a case where cessation of anti dumping duty would lead to recurrence of
dumping and injury and therefore the Authority does not propose to consider it appropriate
to evaluate the Normal Value for these catalysts. Also
the Authority holds that it is not feasible to evaluate the extent of dumping when there
is no participation by the exporter even in the tender process for exports to
4. EXPORT PRICE
The Authority has referenced FOB value of ZnODS and LTS as provided by the exporter as ***$/Litre and ***$/Litre respectively. The Authority also notes that the exporter has provided expenses incurred on account of Ocean Freight, Ocean Insurance and Port expenses. The Authority has evaluated the ex-factory Export Price by reducing the other port expenses from the FOB values and has evaluated the CIF price on the basis of the FOB price, Ocean Freight and Ocean Insurance as provided by the exporter. The Authority notes that response has also been filed by the importers viz. Rashtriya Chemicals and Fertilisers Limited, Mumbai and Indian Oil Corporation Limited, West Bengal which however have not provided the information pertaining to relevant catalysts in the POI to the extent the information has been received from the Customs Authorities, the same has been correlated with the information provided by the exporter.
The ex-factory Export Price for ZnODS and LTS comes to ****$/kg and ****$/kg, respectively.
5.
DUMPING COMPARISON OF
The rules relating to comparison provides as follows:
“While arriving at margin of dumping, the Designated Authority shall make a fair comparison between the export price and the normal value. The comparison shall be madder at the same level of trade, normally at ex-works level, and in respect of sales made at as nearly possible the same time. Due allowance shall be made I ach case, on its merits, for differences which affect price comparability, including differences in conditions and terms of sales, taxation, levels of trade, quantities, physical characteristics, and any other differences which are demonstrated to affected price comparability.”
The Authority has carried out comparison of weighted average normal value with the weighted average ex-factory export price for evaluation of dumping margin.
Based on the normal value and the ex-factory export price as determined above the authority has evaluated the dumping margin for the two catalysts exported to India as follows:-
Catalysts |
Normal Value $/Kg. |
Export Price $/Kg. |
Dumping Margin (%) |
Zinc Oxide Desulpherisation (ZnODS) |
*** |
*** |
146.7 |
Low Temperature Shift (LTS) |
*** |
*** |
240.7 |
The above dumping margins are above the de-minimus limits.
6.
INJURY AND CAUSAL LINK
The Authority notes that as per Section 9A(5) of the Customs Tariff Act, 1975 as amended in 1975 “the anti dumping duty imposed under this section shall, unless revoked earlier, cease to have effect on the expiry of five years from the date of such imposition.
Provides further that if the Central Government, in a review, is of the opinion that the cessation of such duty is likely to lead to continuation or recurrence of dumping and injury, it may, from time to time, extend the period of such imposition for a further period of five years and such further periods shall commence from the date or order of such extension.
Provided further that where a review initiated before the expiry of the aforesaid period of five years has not come to a conclusion before such expiry, the anti dumping duty may continue to remain in force pending the outcome of such a review for a further period not exceeding one year.”
Also under Rule 11 supra, Annexure-II, when a finding of injury is arrived at, such finding shall involve determination of the injury to the domestic industry, ‘….taking into account all relevant facts, including the volume of dumped imports, their effect on prices in the domestic market for like articles and the consequent effect of such imports on domestic producers of such articles…” In considering the effect of the dumped imports on prices, it is considered necessary to examine whether there has been a significant price undercutting by the dumped imports as compared with the price of the like articles in India, or whether the effect of such imports is otherwise to depress prices to significant degree or prevent price increases, which otherwise would have occurred, to significant degree.
For the examination of the impact of the dumped imports on the domestic industry in India, indicates having a bearing on the state of the industry as production, capacity utilisation, sales quantum, stock profitability, net sales realisation, the magnitude and margin of dumping etc have been considered in accordance with Annexure II(iv) of the rules supra.
Since under the present investigation it is to be evaluated as to whether cessation of anti dumping duties would lead to continuance or recurrence of dumping and injury, the Authority has considered appropriate injury parameters as indicated in Annexure II(iv) of the Rules supra to evaluate this aspect.
The Authority observes the various economic parameters pertaining to the six catalysts for the Domestic Industry as under:-
(a)
1998-99 |
1999-2000 |
POI |
POI (Annualized) |
|
Production (Kg) |
804373 |
556606 |
947561 |
631707.3 |
Domestic Sales (Kg) |
738444 |
396531 |
950668 |
633778.7 |
Imports
from |
236225 |
36950 |
180880 |
120586.7 |
Minimum known demand (kg) |
974669 |
433481 |
1273548 |
849032 |
% share
of imports from |
24.24 |
8.53 |
14.21 |
14.21 |
(b) The catalyst-wise exports by M/s. HTAS are as follows:-
(in Kgs)
Catalysts |
1998-99 |
1999-2000 |
POI (18 months) |
HDS |
0 |
0 |
0 |
ZnODS |
164170 |
36950 |
110620 |
SR |
0 |
0 |
0 |
HTS |
0 |
0 |
0 |
LTS |
72055 |
0 |
70260 |
Meth |
0 |
0 |
0 |
Total |
236225 |
36950 |
180880 |
(c) The Authority notes that the Net Sales Realistion in Rs./kg. of the subject catalysts has been below the NIP in Rs./kg during the POI.
(d) The Authority notes that in respect of ZnODS catalyst since in the original investigation there was no anti dumping duty imposed under Chapter 38 and also under Chapter 98 category. The arguments made by exporter viz. M/s. HTAS and EU regarding the fact that the Sunset Review presupposes the existence of anti dumping duty holds merit especially when all the six catalysts are not interchangeable and substitutable and therefore the Authority holds the test of cessation of anti dumping duty which presupposes the existence of anti dumping duty cannot be applied for this catalyst and therefore does not recommend imposition of any new anti dumping duty on this catalyst.
(e) As regards LTS catalyst, the Authority holds that as per the evidence made available by the Domestic Industry, the imports of this catalyst have taken place under Chapter 38 category only. The % share of LTS in total known demand was 7.4% in 1998-99 which decreased to 5.52% in POI. The Authority has evaluated landed value in Rs./Kg for this catalyst as also requested by M/s. SCIL. This landed value when compared with the Non-Injurious Price in $/Kg., implies that there is no price undercutting on account of dumped imports of this catalysts and therefore the Authority holds that in this case, the cessation of anti dumping duty would not lead to continuance and recurrence of injury. The Authority therefore does not recommend continuance of anti dumping duty on this catalyst.
(f) As regards the other four catalysts, viz HDS, HTS, Meth and ST, the Authority notes that there has either been no participation by M/s. HTAS viz. in case of Meth. And SR and as regards the other two catalysts viz HDS and HTS, the price undercutting has been on account of players other than M/s. HTAS thus therefore does not imply any causal link between the phenomena of price undercutting and the participation by the exporter in the tender process. The Authority notes that it has been mentioned by M/s. SCIL that 39 tenders were evaluated pertaining to the supply of subject catalysts by the user industry during the period of investigation of which 19 were obtained by M/s. SCIL, 8 by M/s. PDIL and 12 by foreign suppliers including 8 by M/s. HTAS. The Authority also notes that in respect of HDS catalyst, M/s. Synetix had obtained an order when there was no participation by M/s. HTAS. Also in respect of HTS, the orders were placed on M/s. PDIL when M/s. HTAS did not participate. The Authority notes that there are no exports of these 4 catalysts during the period of investigation and also in the proceding two years i.e. 1998-99 and 1999-2000.
(g) The above economic indicators imply that the cessation of anti dumping duty on the subject catalysts will not lead to continuance or recurrence of dumping and injury to the Domestic Industry and therefore the Authority recommends discontinuance of the anti-dumping duty on all the subject catalysts.
7.
LANDED VALUE
The landed value has been determined for the subject goods after adding on weighted average CIF export price, the applicable level of custom duties (except duties levied under Section 3,3A, 8B, 9, 9A) and one percent towards landing charges.
D.
CONCLUSIONS:
It is seen, after considering the foregoing that:
(a)
The catalysts viz. ZnODS and LTS in all forms originating in or exported from the
subject country have been exported to
(b) The various economic indicators and injury that the cessation of anti dumping duty on the subject catalysts will not lead to continuance or recurrence of dumping and injury and therefore the Authority recommends discontinuance of dumping duty on all the six catalysts viz. Hydrodesulpherisation (HDS), Zinc Oxide Desulpherisation (ZnODS), High Temperature Shift (HTS), Low Temperature Shift (LTS), Secondary Reforming (SR) and Methanation (Meth.) exported to India from Denmark.
(c) An appeal against this order shall lie to the Customs, Excise, Gold (Control) Appellate Tribunal in accordance with the Act supra.
L.V. SAPTHARISHI, Designated Authority
and Addl. Secy.