To be published in the Gazette of India Extraordinary

Ministry of Commerce

Notification

New-Delhi, the 29^th November 2001

Subject: Anti-Dumping investigations concerning imports of Cold Rolled Flat Products of Stainless Steel originating in or exported from European Union, Japan, Canada and USA … Preliminary Findings.

No. 24/1/2001- DGAD – Having regard to the Customs Tariff Act 1975 and the Customs Tariff (Identification, Assessment and Collection of Anti-Dumping Duty on Dumped Articles and for Determination of Injury ), Rules 1995, thereof:

A. PROCEDURE:

1. The procedure given below has been followed with regard to the investigations:

1. The Designated Authority (hereinafter referred to as Authority), under the above Rules, received a written petition from M/s. Jindal Strips Ltd., Hisar, alleging dumping of Cold Rolled Flat Products of stainless steel originating in or exported from European Union, Japan, Canada and USA.
2. The preliminary scrutiny of the application revealed certain deficiencies, which were subsequently rectified by the petitioner. The petition was thereafter considered as properly documented.
3. The Authority on the basis of sufficient evidence submitted by the petitioner decided to initiate investigations against alleged dumping of imports of Cold Rolled Flat Products of stainless steel originating in or exported from European Union, Japan, Canada and USA. The Authority notified the Embassies of the subject countries/territory about the receipt of dumping allegation before proceeding to initiate investigations in accordance with sub-rule 5(5) of the Rules.
4. The Authority issued a Public Notice dated 21^st August 2001, published in the Gazette of India Extraordinary initiating anti-dumping investigations concerning imports of Cold Rolled Flat Products of stainless steel originating in or exported from European Union, Japan, Canada and USA classified under customs sub-heading nos. 7219.31, 7219.32, 7219.33, 7219.34, 7219.35 and 7219.90 of Chapter 72 of the Customs Tariff Act, 1975. The classification is however indicative only and in no way binding on the scope of the present investigations.
5. The Authority forwarded a copy of the Public Notice to the known exporters (whose details were made available by the petitioner) and industry associations and gave them an opportunity to make their views known in writing within forty days from the date of the letter.
6. The Authority forwarded a copy of the Public Notice to the known importers of Cold Rolled Flat Products of stainless steel (whose details were made available by the petitioner) and advised them to make their views known in writing within forty days from the date of the letter.
7. Request was made to the Central Board of Excise and Customs (CBEC) to arrange details of imports of Cold Rolled Flat Products of stainless steel originating in or exported from European Union, Japan, Canada and USA.
8. The Authority provided copies of the non-confidential Petition to the known exporters and the Embassies of the subject countries/territory in accordance with Rule 6(3) supra.
9. The Authority sent a questionnaire, to elicit relevant information to the following known exporters in European Union, Japan, Canada and USA in accordance with Rule 6(4);

European Union

• ALZ NV
  Swinnenwlierweg 5,
  Industriegebied Genk-Zuid,
  Zone 6A, Belgium

• Ugine (Division of Usinar)
  Immeuble Pacific,
  13 Cours Valmy, 92070 La Defense 7,
  Cedex, France

• Acerinox S.A.
  Santiago de Compostela 100,
  28035 Madrid, Spain

Japan

• Kawasaki Steel Corp
  Hibiya Kokusai Building,
  2-3 Uchisaiwaicho 2-chome,
  Chiyoda-ku, Tokyo 100-0011

• Nippon Metal Industry Co Ltd.,
  Shinjuku Mitsui Building, 2-1-1
  Nishi-shinjuku-ku, Tokyo 163-0470

Canada

• Atlas Speciality Steels
  One Centre Street, Welland,
  Ont L3B5R7, Canada

USA

• A.K. Steel Corporation
  703 Curtis
  Middletown, OH 45043

• Allegheny Ludlum
  An Allegheny Technologies Company
  1000 Six PPG Place
  Pittsburg, PA 15222-5479

• North American Stainless
  6870 Highway 42 East
  Ghent, KY 41045

• J&L Speciality Steel, Inc
  P.O. Box 3373
  Pittsburg, PA 15230-3373

The following exporters responded to the questionnaire:-

• M/s Acerinox S.A
  Santiago de Compostela, 100
  28035 Madrid, Spain

• M/s ALZ nv
  Swinnenwijerweg 5
  Industriegebied Genk-Zuid, Zone 6A
  B-3600 GENK, Belgium

• Kawasaki Steel Corporation,
  2-3, Uchisaiwaicho 2 chome,
  Chiyoda-ku,
  Tokyo 100 011, Japan

• North American Stainless,
  6870 Highway 42 East,
  Ghent, KY 41045, USA

The Delegation of the European Union in India and the Embassies of Japan, Canada and USA were informed about the initiation of the investigation in accordance with Rule 6(2) with a request to advise the exporters/producers from their countries/territory to respond to the questionnaire within the prescribed time. A copy of the letter, non-confidential petition and questionnaire sent to the exporters was also sent to them, alongwith the name and addresses of the exporters.

x) A questionnaire was sent to the following known importers of CR Flat Products of Stainless Steel in India calling for necessary information in accordance with Rule 6(4);

IMPORTERS

Ratna Guru Stainless,
International,
Mumbai-400 004

Alfa Laval (I) Ltd.,
PUNE – 411012

Bhandari Foils Pvt. Ltd.,
DEWAS (MP)-455001

Bharat Heavy Electricals,
BHOPAL – 462022

Bharat Heavy Electricals Limited,
HYDERABAD – 502032

Indian Dairy Machinery Co. Ltd.,
GUJARAT

Jay Bharat Maruti Limited,
GURGAON – 122C15 (Haryana)

M. Patwari Traders Pvt. Ltd.,
MUMBAI – 400020

Madras Steels & Tubes,
CHENNAI – 600001

Mahindra Intertrade Ltd.,
Mumbai – 400 018

Mark Auto,
GURGAON – 122001

Mysore Steel Suppliers,
BANGALORE – 560002

Ratnamani Metals & Tubes Ltd.,
Ahmedabad – 380013

Salem Stainless Steel Suppliers,
CHENNAI – 600003

Salem Stainless Steel Suppliers,
BANGALORE – 560002

Siddarth Sales Agencies,
CHENNAI – 600003

Suraj Stainless Road,
AHMEDABAD – 380009

Response was filed by the following:

• All India Stainless Steel Manufacturers Association
• Metals & Stainless Steel Merchants’ Association
• Indian Dairy Machinery Company Ltd.
• R.M. Creations, Inc. New York

xi) The Authority made available the non-confidential version of the evidence presented by various interested parties in the form of a public file kept open for inspection by the interested parties.

xii) Cost investigations were conducted to work out optimum cost of production and cost to make and sell the subject goods in India on the basis of Generally Accepted Accounting Principles (GAAP) on the information furnished by the petitioners so as to ascertain if anti-dumping duty lower than the dumping margin would be sufficient to remove injury to the domestic industry.

xiii) Some of the interested parties requested for extension in time to file their responses to the importers questionnaire which was granted upon due cause shown.

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

xv) Investigations were carried out for the period 1^st April 2000 to 31^st December, 2000 (9 months).

B. PETITIONERS VIEWS

2. The petitioner has raised the following major issues in their petition and in their subsequent submissions:

i) The product under investigation in the present case is Stainless Steel Coils, Sheets and Plates of the following description:-

"Cold rolled Flat Products of stainless steel, of a width of 600mm or more, whether further processed or not of all grades/series."

The subject goods described as Cold rolled Flat Products of stainless steel, are classified under Customs sub-heading nos. 7219.31, 7219.32, 7219.33, 7219.34, 7219.35 and 7219.90 of Chapter 72 of the Customs Tariff Act, 1975. The classification is however indicative only and in no way binding on the scope of the present investigations.

ii) The petitioner has clarified the following:-

1. The grades produced by the domestic industry are commonly referred as 300 series. These are Austenitic Stainless Steel with high Nickel and these are expensive grades in the family of austenitic stainless steel. The 300 series material is used in different applications. The common grade is 304. It is used mainly for fabrication where corrosion resistance is required.
2. There are other varieties of austenitic stainless steel which are called AISI 200 series where the expensive nickel has been substituted by manganese, copper and nitrogen. This a cheaper variety of austenitic stainless steel and mainly used in domestic market in the utensil and tubing sector.
3. There are other varieties of stainless steel which are called 400 series which is normally ferritic and martensitic stainless steel. These are normally straight chromium stainless steel with some micro adjustment of other alloy elements. These are cheaper variety of stainless steel mainly used in cutlery, razor blade, automobile muffler, tubing and coinage industry.

All the grades of 200, 300 and 400 series of stainless steel are produced by the domestic industry. Apart from these 200, 300 and 400 series, there are other two varieties namely, precipitation hardness stainless steel and duplex stainless steel which are manufactured in India and around the world.

The normal series stainless steel contain two major elements:- chromium and nickel. The price of these elements are high and are subject to change.

iii) The subject goods are freely importable into India for several years and are also importable under the provisions of the Advance License Scheme. Exporters from the European Union, Japan, Canada and USA have been exporting the subject goods to India for last many years.

iv) The petitioner has stated that the production of Cold Rolled Stainless Steel Coils/Sheets has been as given below:-

v) The petitioner has neither imported the subject goods nor are they related to the exporters or importers of the alleged dumped article.

vi) The subject goods are being manufactured in India by SAIL and JSL. The production process for the said item uses the Electric Arc Furnace with refining facilities such as AOD/VOD, continuous casting and associated rolling facilities. There is no difference in the basic process of manufacture adopted by the petitioners and the exporters from the subject countries.

vii)The subject products produced by the petitioner and the subject products imported from the subject countries/territories namely, European Union, Japan, Canada and USA by Indian importers are being used interchangeably by the consumers in India. There are general similarities in physical characteristics, production process, end use in the subject products imported from the subject countries and that produced by the petitioner. The subject products compete directly with each other and with those imported from other countries and together compete with the domestic like product. Thus the subject products produced in the domestic industry and imported from the subject countries are commercially and technically substitutable and therefore, are "like articles" as envisaged under Anti-Dumping Rules.

Views given by the Ministry of Steel:-

1. As per the information of the Administrative Ministry, there are presently two large Cold Rolled Stainless Steel Coils, Sheets and Plates producers in India, namely Salem Steel Plant of SAIL and Jindal Strips Ltd., Hisar. Only Jindal Strips has captive steel making refining and hot rolling facility. SSP procures stainless steel slabs which is further hot rolled and thereafter cold rolled to produce CRSS coils, sheets and plates.The production capacity of the subject goods of SAIL and Jindal are as follows:-

Details of seven other small CRSS sheets and strips producers in the country have been given who are basically manufacturing the subject goods of width less than 600mm. The Authority notes that based on he information above the Petitioner represents 50.17% of the total Indian production in 2000-2001. Therefore, the petitioner satisfies the standing to file the present petition and constitutes the domestic industry under the Rules.

ii) The 300 series grades and 400 series grades have been developed for specific end-uses/applications and therefore, they are not to be substituted for each other. The optimum grade is selected by the end-user based on the end-use applications.

C. VIEWS OF IMPORTERS, EXPORTERS AND OTHER INTERESTED PARTIES

3. Importers views

(A) Submissions from All India Stainless Steel Manufacturers Association :

9. The petitioner has used vague terms as ‘width of 600 mm and more’ to blind issues on the ground reality. The fact remain that M/s Jindal Strips Ltd. and Salem Steel Plant can produce width ranging from 600 mm to 1250 mm only. The products in width range of 1250 mm to 2500 mm are more in demand which are not manufactured in India.

2. The petitioner has wilfully withheld the domestic capacity of production that is types and grades of production vis-à-vis the total demand of the country per annum. Both Jindal and Salem have been engaging themselves mostly in low nickel materials. If anti-dumping duty is imposed, scarcity is bound to take place especially in special grade material, which are used for special purposes by many industries including exports.
3. The petitioner has not stated why they export their best prime materials to the very subject countries at a lower price just at par with the price of second grade goods imported in India. The petitioner has not affirmed difference in quality involving finish, composition, test proof, etc. between domestic product and imports. Secondly, the petitioner does not produce goods beyond 1250 mm width and the goods which are mostly imported is between 1500 mm to 2500 mm width. So it is obvious that the goods produced by the petitioner are not ‘like goods’ imported.
4. The said countries treat the secondary/defective materials nearly as scrap and they are happy enough to sell them between USD 900-1000 per ton which is higher than the price of scrap at USD 600-1000. On the other hand developing nations need them to cater to the needs of poor people. Moreover, imports pay customs duty @ 35% + 4% SAD on such materials which gives a big chunk of revenue to the Government.
5. Small scale industries and small manufacturers whose contribution to the total export is significant need proven quality material at cheaper prices. Jindal and Salem cannot afford to meet the challenge. Anti-dumping duty on imports would lead to decrease in volume of exports making the Government lose both ways in terms of foreign exchange as well as import duty.

(B) Metals & Stainless Steel Merchants’ Association :

1. M/s Jindal Strips Ltd. and Salem Steel Plant can produce only width ranging from 600 MM to 1250 MM. The products in width range of 1250 MM to 2500 MM are imported mainly which are not manufactured in India. Such imports should not attract Anti-Dumping Duty at all. Any levy would seriously affect user units and affects countries export efforts and earnings. The basis of the petition appears to create domestic shortage of SS products so that Jindal would make profits.
2. Domestic demand for SS rolled materials are nearly 10 lakh tons of which 6 lakh tons and more is for low nickel and 3 lakh tons and more for high nickel I>E. special grade materials like 304/310/316/317/321. But M/S Jindal and Salem Plant make only low nickel materials. Hence anti dumping duty is not justified on special grade materials imported. Similarly, on CR sheets etc. of 1250 MM & more width used for home use and exports. Anti dumping duty would increase the cost of raw materials imported and affect stainless steel user industry and consumers. Jindals do not produce goods beyond 1250 MM width and such high width goods are mostly imported is between 1250 MM to 2500 MM width. It is obvious Jindals have no case to plead injury by import of goods not manufactured by them.
3. In the said countries, the secondary/defective materials have no demand and hence sell them between US $ 800-1000 per ton while the price of scrap is around US $ 600 PMT. Imports pay custom duty @ 35% + 40% said which brings good revenue to Govt. of India.
4. Further M/S Jindal is the main aspirant to take over Salem Steel Plant to achieve the status of monopoly. The intention of Jindal is to create unreal scarcity and earn huge profits.
5. We also understand that the landed cost import duty of second grade materials/price is higher than that of the domestic price of seconds/defectives of Jindal.
6. We respectfully pray the Designated Authority not to levy any provisional anti-dumping duty till a thorough investigation is conducted on the demand pattern (grade thickness width etc.) and their corresponding domestic production and their comparative prices.

(C) Submissions by Indian Dairy Machinery Company Ltd.

(i) Indian Dairy Machinery Company Ltd. is a wholly own subsidiary of National Dairy Development Board, Anand. They use imported Stainless Steel for captive consumption.

(ii) Details of product imported duty free (under advance licence, etc) is as follows:

(D) R.M. CREATIONS, INC. NEW YORK

1. In USA and Canada there is not much demand for defective seconds in SS Materials.
2. The percentage of Production of Defective is very small.
3. Demand for defective/seconds come mainly from developing countries in Africa, West Asia, SE Asia including Indian Sub Continent hence Exports to these countries.
4. Our Exports are of width 1500 mm mainly which is not produced by Jindal.
5. We also state that our CIF price plus Indian Import duty is higher than Jindal’s price of defective seconds material.
6. We also understand that our Exports to India are different in Quality, Grade, Thickness, Width etc. from one produced by M/S Jindal Strips and sold in India.

4. Exporters Views

(A) M/S Acerinox, S.A., Spain

This exporter has furnished a response to the questionnaire forwarded by the Authority and also furnished a non-confidential summary. The general submissions made are as follows:

(i)A meaningful non-confidential summary has not been made available by the petitioner.

(ii) Standing of the domestic industry is not clearly established.

(iii)No production in India for some of the items covered in the investigations.

(iv)Under para 2.5 of the petition, it is stated that the domestic industry can produce CR Coils upto a maximum a width of 1250mm. Therefore, the coils imported into India having a width of more than 1250mm should not be covered.

(v)Import prices from Saudi Arabia are substantially lower than that of the subject country.

(B) M/S Kawasaki Corporation, Japan

This exporter has furnished a response to the questionnaire forwarded by the Authority and also made available a non-confidential summary thereof. The following general submissions have been made:

(i) Kawasaki Steel Corporation produces and sells steel products, including cold-rolled stainless steel, to trading companies (Kawasho Corporation, Sumitomo Corporation and Nikko Boeki Kaisha Ltd. etc) in Japan on an FOB basis, or FAS basis as a case may be, and title to the steel products are transferred to trading companies in Japan. Trading companies, then, export steel products to foreign countries including India. Therefore Kawasaki steel corporation submits answer to exporters questionnaire to Ministry of Commerce together with trading companies.

(ii) During the POI, KSC did not export nickel based stainless steel including without limitation SUS 304.

(iii) KSC has exported only the following types to India during the period of investigation:

1. Type R409 L
2. Type R436 LT
3. Type SUS420 J1
4. Type SUS420 J2

a) Type R409 L is a highly specialized stainless steel used by the automobile industry for catalytic converters and exhause systems. In particular this product performs well under high temperatures and is resistant to oxidation. It complies with Japanese Standards SUH409 L

b) Type R436 LT is a chromium based product which has extra high resistance to auto exhause condensation. It is typically used for automobile mufflers.

c) Type SUS420 J1 is an improved wear resistance and hardened stainless steel where the carbon content is increased.

d) Similarly in SUS420 J2, the carbon is further increased compared to SUS 420 J1 to improve the wear resistance and hardened ability.

(iv) The fundamental issue is that the grade exported to India by KSC comprise a small percentage of the petitioners production and cannot cause injury to the domestic market. In fact, the steel exported by KSC have specialised application. The Indian market is largely given by a requirement for utensils (200 and 300 grade) which covers 75% of the market. KSC did not export these grades during the POI.

(v) The 200 series which caters for the lower end of the market (mainly household articles) accounts for over 75% of the petitioners volumes. (Source: www.indiainfoline.com-Exhibit 2).

(vi) In India 76% of the consumption is in the form of utensils. Industry segments account for 10-12%, pipes and tubes account for 3-4%, architecture and buildings with automotive, railways and transport account for just 1% of usage. (Source: www.indiainfoline.com-Exhibit 2).

(C) M/S ALZ , Belgium

This exporter has furnished a response to the questionnaire forwarded by the Authority A non-confidential summary thereof has not been furnished. The following general submissions have been made:

(i) ALZ has coded second choice merchandise in its own system. ALZ classifies material that is rejected during quality control because of a bad surface a second choice material. This quality control is effected during the inspection of each coil at the finishing line (slitting and cutting). This determination is based on the appearance of any of the following "surface defects" – undulation, slight dents, scratches. Material may also be classified as second choice if the annealing process was interrupted, causing disturbance in the structural properties (strength, elongation, hardness) of the material.

(ii) Even for second choice, the chemical composition of the material should not differ from the standard.

(iii) Second choice is always sold from available stock based on what has been defined as second choice. Second choice material is only offered to customers that are specifically inquiring for this kind of material and who are not able or interested in buying first choice material at an higher price.

(D) M/S North American Stainless:

North American Stainless is a subsidiary of M/S Acerinox, S.A. This exporter has furnished an incomplete response to the questionnaire forwarded by the Authority and has not made available a non-confidential summary thereof. They have not furnished information on Price structures and sales arrangements in Appendices 4,5 and 6. Discounts/commissions (if any), and charges before and after fob on account of various costs in order to arrive at the domestic and export price at the ex-factory level are not known. The cost of production required to be furnished as per format in Appendix 8, 9and 10 does not state the ex-factory cost per unit. Information on Indian customers (Appendix-5) have not been provided.

(E) M/S Avesta Polarit Stainless, Finland:

This exporter has not furnished a response to the questionnaire forwarded by the Authority or made available a non-confidential summary thereof. The information furnished by them is confidential. Some of the general submissions are as follows:

(i)During the period of investigation Avesta Polarit despatched cold rolled coils of different thicknesses to India. All despatches to India were made by Avesta Polarit Thin Script Nyby in Sweden to the same customer in India.

(F) M/S Ugine, S.A., France

This exporter has stated that during the period of investigations, they had no sales, nor exported any subject merchandise to India. They have requested to be excluded from the scope of the Designated Authority’s investigations of cold rolled flat products.

(G) M/S AK Steel Corporation, 703 Curtis Street, Middletown, Ohio 45043-0001

This exporter has not provided a response to the questionnaire and has given the reasons thereof which are as follows:

1. During the POI, they have only made the following shipments of the subject goods to India. The total quantities and values are as follows:

(ii) The products covered by these shipments were 17-7 PH cold rolled strips and 15-7MO cold rolled strips (purchased for running a trial). AK Steel made no other shipments of the subject goods during the POI. No sales have been made in 2001.

(iii) The products shipped during the POI remained only temporarily in India. They underwent further manufacturing processes by Hewlett Packard in India and were subsequently re-exported to the United States. This small quantity which did not remain in India is not significant to the investigation.

(iv) Even if these products had remained in India, these are highly specialised products that are not manufactured in India. The average unit prices for these shipments were very far above typical US or Indians market prices for cold rolled flat products of stainless steel.

(H) M/S ACCIAI SPECIALI TERNI ("AST"), Italy

This exporter has not responded to the questionnaire but has submitted a representation through their counsel. AST is the manufacturer of stainless steel sheets and strips in Italy. They have not effected any exports to India in the last two years including the POI

(I) M/S Nippon Metal Industry Co. Ltd., Japan

This exporter has not furnished a response to the questionnaire but has made the following general submissions:

(i) Nippon Metal Industry Co. Ltd. is one of the stainless producers in Japan. Their main business is for the domestic market in Japan and there are some quantities for exports. However, their main market for export is South East Asia (ASEAN), China including Hong Kong. Also, there are some quantities for Europe, Australia.

(ii) During the period of investigation, they did not export any quantities to India. They also do not have any regular customer in India.

EXAMINATION OF THE ISSUES RAISED

5. The submissions made by the petitioner and importers to the extent they are relevant under the Rules and have a bearing upon the case, have been examined and dealt with at appropriate places hereunder.

D. PRODUCT UNDER INVESTIGATION

The product under investigation in the present case is Stainless Steel Coils, Sheets and Plates of the following description:-

"Cold rolled Flat Products of stainless steel, of a width of 600mm or more, whether further processed or not of all grades/series."

The subject goods described as Cold rolled Flat Products of stainless steel, are classified under Customs sub-heading nos. 7219.31, 7219.32, 7219.33, 7219.34, 7219.35 and 7219.90 of Chapter 72 of the Customs Tariff Act, 1975. The classification is however indicative only and in no way binding on the scope of the present investigations.

The Authority notes that the subject goods of stainless steel are normally classified into three categories depending upon their chemical composition and intended application viz.,

1. Austenitic Stainless Steel comprising of (i) chromium austenitic stainless steel and (ii) Low nickel austenitic stainless steel. The 200 and 300 series come under this category.
2. Martensitic Stainless Steel comprising of (i) high chromium grades under which comes the 400 series and (ii) low chromium grades under which comes the 500 series.
3. Ferritic Stainless Steel under which the 400 series is also covered.

Austenitic Stainless Steel with high Nickel are expensive grades in the family of austenitic stainless steel. Austenitic stainless steel with low nickel is a cheaper variety. Ferritic and martensitic stainless steel are other varieties of stainless steel which are normally straight chromium stainless steel with some micro adjustment of other alloy elements.

The grades in the 300 and 400 series have been developed for specific end-uses/applications and the optimum grade is selected by the end-user based on the end-use/applications.

E. LIKE ARTICLES

6. CR Flat products of stainless steel are produced and sold in different grades within the broad categories/series specified in para D of these findings. While the raw material composition of these various grades vary, there is no significant difference in terms of process, equipment or technology for the production of these various grades. In order to establish that CR Flat products of stainless steel of all grades/series produced by the domestic industry is a Like Article to that exported from the subject countries, characteristics such as technical specifications, manufacturing process, functions and uses and tariff classification have been considered by the Authority.

Some interested parties have stressed on the quality differences between the prime and non-prime or secondary grades of the subject goods that are also imported and that manufactured by the petitioner. The Authority notes that the raw material composition and the production process are the same for prime and non-prime merchandise. When the quality of the finished products are not as per standards (due to the appearance of surface defects or change in mechanical properties), they are classified as non-prime material as per individual coding norms/technical standards of different manufacturers and not as per any standard gradation norms. The Authority notes that there are no firm physical attributes or technical distinctions that differentiate the prime material from the non-prime or secondary qualities of the subject goods.

The Authority concludes therefore for the purpose of these preliminary findings, that the basic manufacturing process, the applications and overall use of the imported product (in both prime and non-prime grades) and that manufactured by the petitioner are similar. There is a high degree of interchangeability and consequently of competition between the imported product in various grades/series and that manufactured by the petitioner being the subject matter of this investigation.

The Authority finds that there is no argument disputing that the subject goods produced by the domestic industry has characteristics closely resembling the imported material and is substitutable by CR flat products of stainless steel in in various grades/series imported from the subject countries/territory both commercially and technically. Cold rolled Flat Products of stainless steel of all grades/series produced by the domestic industry has been treated as Like Article to the product exported from European Union, Japan, Canada and USA., within the meaning of Rule 2(d).

F.DOMESTIC INDUSTRY

The petition has been filed by M/s. Jindal Strips Ltd., Hisar. The Authority notes that the petitioner accounts for 50.17%of the total Indian production in the period of investigation. The petitioner therefore satisfies the standing to file the present petition and constitutes the ‘domestic industry’ under the Rules.

G. DUMPING

7. The Authority sent questionnaires to the known exporters from the subject countries/territory in terms of section 9 A (1). The co-operative exporters who have responded to the questionnaire forwarded by the Authority have been listed at para A 1. ix) of these findings. For the non-co-operative exporters, there are no claims made with regard to Normal Value and Export Price. The Authority has therefore been constrained to rely upon best available information with regard to Normal Value and Export Price.

H. EXAMINATION OF NORMAL VALUE AND EXPORT PRICE

(A) NORMAL VALUE

(i) M/s Acerinox S.A., Spain

1. Normal Value has been claimed based on sales in the home market and information on sales in the home market have been furnished in Appendix 1 of the response. The exporter had furnished information pertaining to sales of the subject goods viz. exports to India, domestic market sales and exports to other countries as per Appendix 3. The information has been furnished for Aisi 304 Group, Aisi 310 S Group, Aisi 316 Group and Aisi 430 Group. However exports of 310 grade were not made during the period of investigation. It is seen that the information has been furnished for all qualities, viz., 1 quality, 2 quality, 3 quality, and 4 quality in respect of sales made in each of these grades. The factory costs and profit furnished in Appendix 8,9 and 10 has also been furnished for all grades combined and for qualities 1 to 4 individually. In Appendix 4 (sales price structure for exports to India), adjustments before and after fob have been claimed apart from commission. In Appendix 5 (sales price structure for domestic sales, EU) adjustments have been claimed on account of charges before and after fob. The exporter has also furnished sample invoices of export sales to India and domestic sale in EU. Annual reports have also been attached. It is seen from the Profit and Loss Accounts for the years ended 31 December 2000 and 1999 in the Annual Report, that the company has made profits.
2. The counsel for the exporter has subsequently stated that the subject goods are joint products which have emanated from a joint process. The joint products may consist of a number of independent products as in the case of a coke oven plant where in addition to coke the process also produces ammonium sulphate, light oil, tar and gas. Joint products may also consist of different grades of the same product where each grade has a separate market and the values are significantly different as in the case of stainless steel products. They have further clarified that joint products have relatively high sales value and are not separately identifiable as individual products until the split of points. The raw materials and other inputs that go into the production process remain the same and are inseparable. The total costs are to be apportioned amongst the joint-products. In the present case , the total costs incurred in the production of different grades of stainless steel products are apportioned to each grade based on the sales realisation value of each grade.

Examination by Authority

1. The Authority notes that in the present case there is only a single production process that has yielded the subject goods albeit in various qualities. The prime qualities have yielded a positive sales value and the non prime or secondary qualities of the same product /grade have had a relatively lower sales realisation as compared with the sales value of the prime grade material. As already noted, the raw materials and other inputs that go into the production process remain the same for the output and are inseparable. There are also no set or firm distinctions between the various qualities or ‘choices’of these individual grades of the subject goods which have been identified in the response either physically or technically. The cost of raw materials and other inputs cannot vary from the start to the end of the production process because the products that emerge are not different.

2.The Authority notes that the demarcation of ‘choices’ for sales made in the domestic market in EU has been made by the exporter without elaborating on the specific physical or technical attributes differentiating these ‘choices’. The Authority notes that for each of the grades sold, the cost of production of each quality (categorised as quality 1, quality 2, quality 3 and quality 4) has been separately provided. The combined cost of production of all qualities for each grade has also been given. It is seen that the cost of raw material and other inputs vary significantly between the choices/qualities of each grade.

3. As far as adjustments claimed in Appendix 5 (sales price structure for domestic sales in EU) are concerned, it is seen that the system of gradation in ‘choices’ has been followed with regard to adjustments claimed for each choice of material without assigning any reasons whatsoever. In the 304 Group, the selling prices shown for 1^st, 2^nd, 3^rd and 4^th choice material are ***E/kg, *** E/kg, *** E/kg and *** E/kg respectively.

4. For grade 304 the Authority has considered the claims of the exporter on account of handling and overseas freight bringing the total costs before and after fob to *** E/kg for all choices subject to verification. Similarly for 316 Group the claims of the exporter on account of handling and overseas freight has been considered by the Authority bringing the total costs before and after fob to *** E/kg for all choices subject to verification. Likewise, for grade 430 the Authority has considered the claims of the exporter on account of handling and overseas freight bringing the total costs before and after fob to *** E/kg for all choices (1^st, 2^nd and 4^th choice only) subject to verification.

5.After considering adjustments as given above, the domestic selling price at ex-factory level for each choice of material in the said grades sold in the EU are as given below:

E/kg

6.The quantities sold in the domestic market are as given below:-

Based on the quantities sold in the domestic market of EU as given above and the individual ex-factory selling prices of the different qualities/choices after considering adjustments claimed, the Authority has determined a weighted average ex-factory normal value of ***E/kg or USD ***/kg for the 304 grade, ***E/kg or USD***/kg for the 316 grade and ***E/kg or USD ***/kg for the 430 grade subject to verification at an average exchange rate of E.90=1USD as claimed by the exporter in their response. The Authority notes subject to verification that these values are above their respective costs of production as claimed by the exportersubject to verification.

(ii) M/s Kawasaki Corporation, Japan

The exporter has furnished the non-consolidated statement of income for the years ended March 31, 2001 and 2000. It is seen that in 2001 they have made an ordinary profit of *** millions of yen. The exporter has furnished information on sales in the home market in Appendix 1 and information regarding sale of the subject goods (exports to India, domestic market sales and exports to other countries) in Appendix 3. The information has been furnished for different grades sold in the period of investigation which are as follows:-

The exporter has stated that consumption tax incurred for sales to consumers is tax tentatively collected by companies from consumers before being paid to the Government. The prevailing rate of consumption tax is ***%. Payment for purchase excluding consumption tax is accounted in the ledger and consumption tax amount is separately accounted. In the Sales price structure for domestic sales (Appendix 5), the exporter has claimed adjustments on account of inland freight, insurance, and storage. It is seen that the freight varies between different grades. Hence a uniform average freight/ton of USD ***/MT has been adopted for the purpose of these preliminary findings. After allowing adjustments on account of the above mentioned charges, the ex-factory price for various grades sold are as follows subject to verification:-

Information on Factory Cost and profit of domestic and export sales to India has been furnished in the relevant appendices.

(iii) ALZ, Belgium

The exporter has made the following submissions in their response to the questionnaire and subsequently:-

(a) They have stressed the importance of the difference of the product mix sold in India compared to the product mix sold in the domestic market and other export market. During the POI 95.5% of the ALZ sales in India are second choice material and only 4.5% of the sales are prime first choice material. On the home market of ALZ 3.3% of ALZ sales are second choice while 96.7% of the sales are prime first choice material. On the export market besides India 5.4% of the ALZ sales are second choice while 94.6% of the sales are prime first choice material.

(b) ALZ has coded second choice merchandise in its own system. ALZ classifies material that is rejected during quality control because of a bad surface as second choice material. Even for second choice material, the chemical composition of the material should not differ from the standard.

(c) The Authority’s position in the matter has been given under Para I (A) (I ) above.

(d) In the Profit and Loss Account in the Annual Report for the year 2000, the consolidated profit for the year 2000 is ***EUR against a consolidated loss of ***EUR for the year 1999.

(e) The exporter has furnished information on sales in the home market in Appendix 1 and information regarding sale of the subject goods in the domestic market, exports to India and exports to other countries in Appendix 3. The information has been furnished for different grades sold in the period of investigation which are as follows:-

In the Sales price structure for domestic sales (Appendix 5), the exporter has claimed adjustments on account of commissions, bonus, packing, overall transport and overall insurance. After allowing adjustments on account of the above mentioned charges, the ex-factory price for various grades sold are ***E/kg or USD***/kg for Cr grade; ***E/kg or USD ***/kg for CrNi grade and ***E/kg or USD ***/kg for CrNiMo grade at an exchange rate of .90E=1USD subject to verification. The Authority notes subject to verification that these values are above their respective costs of production as claimed by the exporter in Appendix 9 of their response subject to verification.

(iv) M/S North American Stainless

The exporter has sold second quality coils in the domestic market and has furnished information on such sales in Appendix 1 and 3. The information has been furnished for Grade 304 (304L , 304DQ, 304DDQ) sold in the period of investigation. A quantity of ***lbs or ***kg of a value of USD***was sold at a unit value of USD ***/lbs or USD ***/kg.. As already noted, information on price structures and sales arrangements in Appendices 4,5 and 6 have not been furnished. Discounts/commissions (if any), and charges before and after fob on account of various costs in order to arrive at the domestic and export price at the ex-factory level are not known. The cost of production shown in Appendix 9 for domestic sales does not state the per unit ex-factory cost. The exporter however has shown losses incurred on domestic sales. An amount of *** (USD) has been stated as the cost of domestic sales. Considering the quantity of ***lbs or ***kg sold in the domestic market, the per unit cost of production works to USD ***/lbs or USD ***/kg. The domestic selling price per unit is therefore less than the cost of production. As per Annexure I of the Anti-Dumping Rules, the Designated Authority may disregard the sales of the like article in the domestic market of the exporting country in determining normal value when the weighted average selling price of the article is below the weighted average per unit costs. Accordingly, after adding a reasonable return @ ***% on the cost of production submitted by the company for the period of investigation, the constructed normal value has been worked out which is USD ***/lbs or USD ***/kg for the purpose of these preliminary findings and subject to verification.

(v) Canada

The Authority notes that no producer/exporter from Canada has responded to the questionnaire in the prescribed format and have not furnished information relating to normal value, export price, and dumping margin. There is therefore no information from concerned exporters regarding the normal value of the subject goods prevailing in the domestic market in Canada. The Authority therefore considers all such exporters to be non-cooperative and has proceeded on best available information.

In the circumstances the Authority has been constrained to determine the normal value which has been derived considering the fact that the NAFTA is also working towards the free movement of goods and member countries have tariff (and not quantitative) barriers between them. The petitioners have submitted an extract of customs tariffs prevailing in Canada from where it is seen that the MFN rate on customs heading 7219 is 4%. The constructed normal value determined for USA is USD ***/MT based on the response of the exporter from USA. After considering the MFN rate the normal value in Canada has been considered to be USD ***/MT.

(B) Export Price

1. M/s Acerinox S.A., Spain

The exporter had furnished information pertaining to sales of the subject goods viz. exports to India, domestic market sales and exports to other countries as per Appendix 3. The information has been furnished for Aisi 304 Group, Aisi 310 S Group, Aisi 316 Group and Aisi 430 Group. It is seen that the information has been furnished for all qualities, 1 quality, 2 quality, 3 quality, and 4 quality in respect of sales made in each of these grades. The factory costs and profit furnished in Appendix 8,9 and 10 has also been furnished for all grades combined and for qualities 1 to 4 individually. In Appendix 5 (sales price structure for domestic sales, EU) adjustments have been claimed on account of charges before and after fob.

Examination by Authority

1.The Authority notes that the demarcation of ‘choices’ has been made by the exporter without elaborating on the specific physical or technical attributes differentiating these ‘choices’. The Authority notes that for each of the grades exported to India, the cost of production of each quality (categorised as quality 1, quality 2, quality 3 and quality 4) has been separately provided. The combined cost of production of all qualities for each grade has also been given. It is seen that the cost of raw material and other inputs vary significantly between the choices/qualities of each grade.

2.As far as adjustments claimed in Appendix 4 (sales price structure for exports to India are concerned, it is seen that the system of gradation in ‘choices’ has been followed with regard to adjustments claimed for each choice of material without assigning any reasons whatsoever. In the 304 Group, the selling prices shown for 1^st, 2^nd, 3^rd and 4^th choice material are ***E/kg, ***E/kg, ***E/kg and ***E/kg respectively.

3.The Authority notes that the overseas freight varies between the different choices/qualities of each grade although the same has been shown in terms of E/kg. The Authority has therefore adopted an average uniform overseas freight of *** E/kg for each choice in all the grades exported. For grade 304 the Authority has considered the claims of the exporter on account of commission, handling charge, overseas insurance bringing the total costs before and after fob (including an average overseas freight of *** E/kg for all choices) to ***E/kg, ***E/kg, ***E/kg and ***E/kg for 1^st, 2^nd, 3^rd and 4^th choice material respectively subject to verification. For 316 Group, the Authority has considered the claims of the exporter on account of commission, handling charge and overseas insurance bringing the total costs before and after fob (including an average overseas freight of *** E/kg for all choices) to ***E/kg, ***E/kg, ***E/kg and ***E/kg for 1^st, 2^nd, 3^rd and 4^th choice material respectively subject to verification. Likewise, for 430 Group, the Authority has considered the claims of the exporter on account of commission, handling charge and overseas insurance bringing the total costs before and after fob (including an average overseas freight of ***E/kg for all choices) to ***E/kg, ***E/kg, ***E/kg and ***E/kg for 1^st, 2^nd, 3^rd and 4^th choice material respectively subject to verification.

4. After considering adjustments as given above, the export price at ex-factory level for each choice of material in the said grades exported to India are as given below:

E/kg

5. The export quantities to India are as given below:-

Based on the quantities exported to India as given above and the individual ex-factory export prices of the different qualities after considering adjustments claimed, the Authority has determined a weighted average ex-factory export price of ***E/kg or USD ***/kg for the 304 grade, ***E/kg or USD***/kg for the 316 grade and ***E/kg or USD ***/kg for the 430 grade for the purpose of these preliminary findings and subject to verification.

(ii) M/s Kawasaki Corporation, Japan

In Appendix 3 the exporter has furnished the following information regarding exports made to India:-

The exporter has stated that consumption tax levied on steel products is reimbursed when such steel products are exported. However, this is not an incentive given on export sales but implementation of the policy of Consumption Tax Act of Japan. In the Sales price structure for exports to India (Appendix 4), the exporter has claimed adjustments on account of inland freight, insurance, handling and overseas insurance. It is seen that the freight varies between different grades. Hence a uniform freight/ton has been adopted for both inland and overseas freight. The break-up of costs claimed under ‘others’ which vary between different grades is also not known. After adjustments as claimed, the ex-factory export price for 409L is USD ***/MT; USD ***/MT for 436LT; USD ***/MT for 420J1 and USD ***/MT for 420J2 for the purpose of these preliminary findings and subject to verification..

(iii)M/s ALZ, Belgium

In Appendix 3 the exporter has furnished the following information regarding exports made to India:-

In the Sales price structure for exports to India (Appendix 4), the exporter has claimed adjustments on account of commissions, bonus, packing, overall transport and overall insurance. After allowing adjustments on account of the above mentioned charges, the ex-factory price for various grades sold are ***E/kg or USD ***/kg for Cr grade; ***E/kg or USD ***/kg for CrNi grade and ***E/kg or USD ***/kg for CrNiMo grade for the purpose of these preliminary findings and subject to verification.

(iv) M/S North American Stainless

In the costs and profits of exports to India (Appendix 8) the total costs of exports to India is stated to be USD***. Considering the quantity of ***lbs or ***kg exported to India, the per unit cost works out to ***/lbs or USD ***/kg. The exporter has shown losses incurred on export sales. Second quality coils have been exported to India to India and information on quantities of the subject goods exported to India has been furnished in Appendix 3. From the information submitted, it is seen that a quantity of ***lbs or ***kg was exported of a value of USD***. The per unit export price works out to USD ***/lbs or USD ***/kg which is adopted for the purpose of these preliminary findings subject to verification.

The exporter has not furnished any information on costs incurred before and after fob as per Appendix 4 of the questionnaire. The Authority has therefore relied upon best available information as available in the petition. After considering ocean freight at USD ***/kg, insurance @***%, transportation costs at USD ***/kg, the ex-factory export price works out to USD ***/kg which is adopted for the purpose of these preliminary findings.

(iv) Canada

The Authority has relied upon DGCIS data in the absence of information from the producers/exporters in Canada. The total quantity exported during Apr-Nov 2000 is ***kg of a value of Rs ***bringing the cif value to Rs ***/kg or USD ***/kg at an average exchange rate of Rs 45.62=1USD during the POI.

The exporters in Canada have not furnished any information on costs incurred before and after fob as per Appendix 4 of the questionnaire. The Authority has therefore relied upon best available information as available in the petition. After considering ocean freight at USD ***/kg, insurance @***%, transportation costs at USD ***/kg, the ex-factory export price works out to USD ***/kg which is adopted for the purpose of these preliminary findings.

(C) Dumping margin

Based on the ex-factory normal values and ex-factory export prices as shown above, the dumping margins for each co-operative individual producer/exporter for the grades exported by them and for others are as follows:-

I. Non-cooperative exporters:-

8. The Authority observes that the other producers/exporters from the subject countries have not responded to the questionnaire in the prescribed format and have not furnished information relating to normal value, export price, and dumping margin. The Authority therefore considers all such exporters to be non-cooperative and has proceeded on best available information with regard to normal value and export price in the subject countries.

J. INJURY

9. The Authority notes that the margin of dumping and quantum of imports from the subject country are more than the limits prescribed in Rule 11 Supra.

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

(a) Quantum of Imports

As per DGCIS
Quantity (kg)

The total imports of CR Flat Products increased by 134% in 99-2000 over that of 98-99. The increase in the total imports of the subject goods from the subject countries was 142.49% in 99-2000 over the level of 1998-99. However, the quantum of imports came down during the period of investigation as per the provisional data compiled by DGCIS for Apr-Nov 2000.

(b) Production and Capacity Utilisation

The production capacity, actual production and capacity utilisation of the petitioners was as follows: -

The petitioners production and capacity utilisation have declined.

(c) Sales and Market Share

The quantum of sales made by the petitioners and the value thereof were as follows:-

As regards sales price the apparent improvement has been attributed to the increase in the cost of the major raw materials. The LME prices of nickel have gone up from USD ***/MT in Jan-March’99 to USD ***/Mt in the POI. The apparent increase in the sales price is not real and not adding to the net sales realisation of the petitioner. The increase does not cover the direct increase in the raw material prices.

The demand of CR Flat products of stainless steel was approximately 36,690 MT, 58,486 MT and 47,686 MT in 98-99, 99-2000 and the POI respectively. The annualized demand for the POI is 63,582 MT. The share of total imports in demand was 72.69%, 61.20% and 47.07% in 98-99, 99-2000 and the POI respectively. The share of dumped imports from the subject countries in demand was 49.72%, 44.45% and 33.43% in 98-99, 99-2000 and the POI respectively. The share of the domestic industry was 27.30 %, 38.79 % and 52.9% in 98-99, 99-2000 and POI respectively.

(d) Closing Stocks

The closing stocks of the petitioners were as given in the table below:-

The petitioners closing stocks have increased.

(e) Price undercutting and price depression

The landed prices of the imported material as per DGCIS data are below the non-injurious price of the domestic industry .

Rs/MT

(f) Profitability:-

The domestic industry has been forced to reduce its selling prices below its cost of production, resulting in substantial financial losses. The petitioner has incurred losses of Rs ***lacs in 1999-2000 and Rs *** lacs in the POI. The injury to the domestic industry is evident from the per unit profit/loss made by the industry from sales in the domestic markets, as shown below:-

K. CONCLUSION ON INJURY

10. In view of the foregoing it is observed that:-

1. the quantum of imports from the subject countries have declined but are coming in at dumped prices;
2. the market share of the petitioners would have been better but for dumped imports which have under cut their prices;
3. the petitioners have been forced to match import prices that are below their non-injurious price resulting in losses;
4. the domestic industry is left with substantial closing stocks.

L. CAUSAL LINK

11. The Authority notes that the market share of the domestic industry would have been better but for dumped imports. The domestic industry has been incurring losses on the sale of the subject goods and this is directly attributed to the low priced imports from the subject countries which has forced them to sell at suppressed prices. In the absence of dumped imports the petitioner would have been able to realise its non-injurious price.

The reduction in the export price resulted in low landed price followed by reduction in sales realisation of the petitioners. The domestic industry in its attempts to match the dumped import prices was forced to sell below its non-injurious price which resultantly, the domestic industry was unable to recover. The Authority therefore holds that the material injury to the domestic industry was caused by the dumped imports from the subject countries/territory.

M. INDIAN INDUSTRY’S INTEREST & OTHER ISSUES

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

13. It is recognised that the imposition of anti-dumping duties might affect the price levels of the products manufactured using the subject goods and consequently might have some influence on relative competitiveness of these products. However, fair competition in the Indian market will not be reduced by the anti-dumping measures, particularly if the levy of the anti-dumping duty is restricted to an amount necessary to redress the injury to the domestic industry. On the contrary, imposition of anti-dumping measures would remove the unfair advantages gained by dumping practices, would prevent the decline of the domestic industry and help maintain availability of wider choice to the consumers. Imposition of anti-dumping measures would not restrict imports from the subject countries/territory in any way, and therefore would not affect the availability of the product to the consumers.

14. To ascertain the extent of anti-dumping duty necessary to remove the injury to the domestic industry, the Authority relied upon reasonable selling price of Cold Rolled flat products of stainless steel in India for the domestic industry, by considering the optimum cost of production at optimum level of capacity utilisation for the domestic industry.

N. LANDED VALUE

15. The landed value of imports is determined on the basis of export price of cold rolled flat products of stainless steel of various grades determined as detailed above in the para relating to dumping, after adding the prevailing level of customs duties and one per cent landing charges.

O. CONCLUSIONS

16. It is seen after considering the foregoing that:

(a) cold rolled flat products of stainless steel described under para D originating in or exported from the subject countries/territory have been exported to India below normal value, resulting in dumping;

(b) the domestic industry has suffered injury;

(c)injury has been caused by imports from the subject countries/territory.

It was decided to recommend the amount of anti-dumping duty equal to the margin of dumping or less, which if levied, would remove the injury to the domestic industry. The landed price of imports was also compared with the non-injurious price of the domestic industry, determined for the period of investigation. The weighted average landed values for the 300 series exported by M/a Acerinox, Spain and M/s ALZ Belgium when compared with the NIP determined for the domestic industry for the said series did not indicate any price injury. However, the weighted average landed values for the 400 series exported by M/s Kawasaki, Japan when compared with the NIP determined for the domestic industry for the said series indicated price injury. Accordingly, it is proposed that provisional anti-dumping duties be imposed, from the date of notification to be issued in this regard by the Central Government, on Cold rolled Flat Products of stainless steel, of a width of 600mm or more, whether further processed or not of all grades/series classified under Customs sub-heading nos. 7219.31, 7219.32, 7219.33, 7219.34, 7219.35 and 7219.90 of Chapter 72 of the Customs Tariff Act, 1975, pending final determination. The anti-dumping duty shall be the amount mentioned in Col.4.

P. FURTHER PROCEDURE

17. The following procedure would be followed subsequent to notifying the preliminary findings:

1. The Authority invites comments on these findings from all interested parties and the same would be considered in the final findings;
2. Exporters, importers, petitioner and other interested parties known to be concerned are being addressed separately by the Authority, who may make known their views, within forty days of the despatch of this notification. Any other interested party may also make known its views within forty days from the date of publication of these findings.
3. The Authority would provide opportunity to all interested parties for oral submissions.
4. The Authority would disclose essential facts before announcing the final findings.

L.V.SAPTHARISHI
DESIGNATED AUTHORITY