New Delhi, the 25^th October, 1996

No. 15/5/96- having regard to the Customs Tariff Act, 1975 as amended in 1995 and the Customs Tariff (Identification, Assessment and Collection of Anti-dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995 –thereof.

1. PROCEDURE

 2. The procedure described below has been followed:

1. The Designated Authority (hereinafter referred to as Authority), under the above Rules, received a written petition from M/s. Kesar Petroproducts Ltd., Mumbai on behalf of the domestic industry, alleging dumping of Bisphenol-A originating from Russia and Brazil;
2. The Authority during the course of investigation of allegations of dumping of Bisphenol-A against Russia and Brazil noticed that the exports of Bisphenol-A from USA prima facie also appeared to have been made a price lower than the domestic price in USA, necessitating further investigation in the matter;
3. The Authority notified the Embassy of USA before proceeding to initiate the investigation in accordance with Sub-Rule (5) of Rule 5 supra;
4. The Authority issued a Public Notice dated 20^th November, 1995 published in the Gazette of India, Extraordinary, initiating suo motu anti-dumping proceedings concerning imports of Bisphenol-A originating in or exported from USA classified under heading 2907.23 of Schedule I of the Customs Tariff Act, 1975 and No. 2907.23.00 under Indian Trade Classification (based on Harmonized Commodity Description and Coding System);
5. The Authority forwarded a copy of the said public notice to the known exporters, importers, industry associations and to M/s. Kesar Petroproducts Ltd., Mumbai and gave them an opportunity to make their views known in writing and to request for an oral hearing;
6. According to sub-rule (3) of Rules 6 supra, the Authority provided a copy of the information relied upon by the Authority for initiating the investigations to all known exporters and Embassy of USA;
7. The Embassy of USA in New Delhi was also formed about the initiation of investigation and requested to advise the exporters/producers their country to respond to the questionnaire the prescribed time;
8. The Authority sent questionnaires, to elicit relevant information to the known exporters, M/s. Mitsui & Co., (USA) inc., USA;
9. M/s. Kesar Petroproducts Ltd., Mumbai the domestic industry, was also requested to furnish the considered relevant for the investigation;
10. The questionnaire was sent to the following importers of Bisphenol-A in India:

M/s.

(a) Dr. EECK & Co. Ltd., Pune

(b) Parikh Resins & Polymer, Kanpur

(c) Uttamlal & Co., Mumbai

(d) Chimanlala Maganlal & Co., Mumbai

(e) Beta International, Mumbai

(f) Bharat Genl. Textile Industries, Calcutta

(g) Cibatul Ltd., Gujarat

(h) Parikh Chemical Industries, Kanpur

(i) Bengal Poly Resins Pvt. Ltd., Calcutta

(j) Speciality Chemicals, Mumbai

(k) Delta Indsutries Resins Pvt. Ltd., Mumbai

(l) Pragati Chemical Pvt. Ltd., Mumbai

(m) M.J. Exports Pvt. Ltd., Mumbai

11. DGCI&S, Calcutta, was requested to furnished of all the imports of Bisphenol-A into India from April 1993 to March 1995.
12. ASSOCHAM, CII and FICCI the trade associations were also informed about the said initiation.
13. A Public File was made available by the Authority for inspection by any of the interested parties.
14. The Indian Embassy in USA was requested to indicate names and addresses of the producers/exporters of Bisphenol-A in USA. prices of Bisphenol "A" in the domestic market in USA and the address of the Deptt. of Govt. of USA who is dealing with the export of Bisphenol-A in USA. The Embassy of India in USA furnished such details and distributors pricing for one of the producer/exporter. The price list was, however, effective from 6.1.1995 (i.e. post investigation period).
15. The Embassy of USA at New Delhi was quested vide letter dated 14.12.1995 to furnish the following information:-

1. Name(s) and addresses of the exporters and producers of Bisphenol-A in USA;
2. Name (s) and addresses of the concerned Government department in USA who are dealing with exports of goods in USA;
3. (c) No information, however, was received in this regard from the Embassy;

1. Name and addresses of the exporters/producers obtained from the Indian Embassy in USA vide letter dated 12.1.1996 were furnished to the Embassy of USA at New Delhi with a request to furnish detailed information regarding exports of Bisphenol-A made by these producers/exporters.
2. The Embassy of USA at New Delhi informed the Authority to communicate with the private US firms to solicit their cooperation vide letter date 16.1.1996.

 

3. The Embassy of USA at New Delhi sought extension of time vide their letter dated 23.1.1996 and enclosed a letter from the United States Dept. of Commerce. This was agreed to by the Authority, and the last date was extended to 15.2.1996.
4. None of the exporters filed response to the questionnaire. Only one of the importers, viz M/s. Cibatul Ltd., filed response to the questionnaire, in the form and manner prescribed.
5. A Public Hearing was held by the Authority on 12^th March, 1996 in order to provide further opportunity to importers, exporters, domestic industries and Embassy of USA to defend their interest. The hearing was attended by the following.

1. SIP Industries Ltd., Mumbai

1. All the parties who attended the said public hearing were advised to present their submissions made in the public hearing in writing for obtaining counter comments from the other party(ies) to the investigation and the written submissions received from the party(ies) were made available to the other party(ies) for their counter comments.
2. The Authority sought and verified information deemed necessary for the investigation, and to this end investigations were carried out at the premises of the domestic industry’s head office and works.
3. The Authority also conducted cost investigation and worked out optimum Cost of production and cost to make and sell Bisphenol-A in India on the basis of Generally Accepted Accounting Principles and rule 6(8) of the Rules supra so as to ascertain as to whether anti dumping duty lower than the dumping margin would be adequate to remove the injury.
4. The investigation covered the period from 1^st April, 1994 to 30^th Sept., 1994.

3. The domestic industry made the following major points:

1. The investigation would be governed by the provisions brought into effect from 1.1.1995;
2. Once imports from Japan came down due to imposition of anti dumping duty, countries such as Russia, Brazil and USA started exporting Bisphenol-A at dumped prices to India;
3. The Authority may rely on the data already on record and the conclusions derived therefore from the investigations in regard to Brazil and Russia.;
4. Since there has been no response from the exporter on the issue of Normal Value, the facts brought out in the initiation notification, being un-rebutted may be adopted in determining anti dumping duty.;
5. Exports from USA have continuously been increasing and the same is significant both in absolute and relative terms;
6. The average sale realisation for the domestic industry was very low and unremunerative, resulting in losses;
7. The excess of fair selling price over the landed cost of imports from USA amounting to Rs. 31362 per MT may be imposed as anti-dumping duty to enable domestic industry to earn a reasonable return;

4. None of the exporters/producers have directly responded to Authority in the form and manner prescribed. One of the exporter, M/s. Mitsui & Co. (USA), Inc, declining the invitation to appear at the hearing scheduled for March 12, 1996 intimated that they have made only two insignificant shipments of off-spec product in 1992 and 1994 and that they did not believe it prudent to devote resources to the investigation. M/s. Ashland Chemical Company responded that they have had no sales of the product Bisphenol-A to India during investigation period. Some of the importers have enclosed a copy of the letter from M/s. First Intercontinental Corporation, USA who are said to be exporting Bisphenol-A to India. The exporters has stated that it shall not export Bisphenol-A directly or through an authorised agent below the prevailing export price in USA, depending upon quantity contracted for standard quality material.

D. IMPORTERS’ VIEWS

5. The major views expressed by the importers in the public hearing and reproduced in writing are as follows:

1. Since it has been mentioned in the Initiation Notification that imports of Bisphenol-A from USA alongwith imports from Brazil and Russia are causing injury to the Indian domestic industry and Anti Dumping Duty has already been imposed in respect of imports from Russia and Brazil, it cannot be said that imports of Russia and Brazil are causing injury any more. Under the circumstances, the imports from USA cannot be said to be causing any injury to the domestic industry.
2. Imports from USA during the period of investigation were only to the tune of 300 MT.
3. Import price of Bisphenol-A from USA was lower during the period on account of import of bulk quantities of off-spec material in jumbo bag packings. Enclosing a letter from an agency indicating that their principal had supplied inferior quality material at USD 650 per MT during 1994 and that the standard price of normal quality Bisphenol-A that time used to remain in the range of USD 900 to 980 pmt cif Bombay in standard packing, an importer viewed that it is not desirable to compare normal price with import price for sub standard material in packing of 1000 kgs against normal packing of 25 kg packs.
4. The imports during the period April 93 to March 95 attracted prices of USD 770 to 1067 pmt cif Bombay and was USD 770 pmt during the period of investigation.
5. Price adjustments on account of differential in quality, quantum of imports and packing in bulk quantities to the tune of USD 417 pmt being the difference of the highest import price during July 93 by another importer of the material and actual price of offspec grade imports during the period of investigation be made.
6. An amount of USD 105 to USD 110 pmt may be considered as adjustment towards freight, insurance and other charges for working out fob price in USA according to their practical experience.
7. The Normal value indicated in the Initiation Notification was for the period of April 94 to May 94. Apart from the fact that the price is only for a period, price of Bisphenol-A in USA at no point of time ruled as high as USD 3600 per MT.
8. M/s. Kesar Petroproducts Ltd. have stated, in a letter to the Authority, that their prices to local customers during April 93 to April 94 were USD 1875 per MT. Had the normal value of Bisphenol-A in USA been as high as USD 3600 per MT, the domestic industry could have made excellent profits by exporting to USA.
9. The price mentioned in the Chemical Market Reporter is a retail price for small quantities of one or half kg. One of the importer ha imported 300 mt in one single deal during the period.
10. Profitability of the domestic industry is improving and domestic industry is shortly increasing its capacity to 10,000 – 12,000 MT.

5. EXAMINTION AND FINDINGS BY AUTHORITY

6. The submissions made by the exporters, importers, domestic industry and other interested parties have been examined and considered while arriving at these findings and wherever appropriate have been dealt hereinafter.

7. The Authority confirms, in the absence of any direct response from the exporters in the form and manner prescribed, having made the findings on the basis of the fact available to it as per rule 6(8) supra.

8. The cases of new exporters or those stated to be willing to given price undertaking shall be considered, on request, by the Authority in accordance with the Rules supra.

6. LIKE ARTICLES

9. The product under consideration is Bisphenol-A. Bisphenol-A is an organic chemical and is manufactured out of Phenol and Acetone. There are two grades namely Epoxy grade and Polycarbonate grade. It is, however, noted that chemical names, molecular formula and other properties such as molecular weight, boiling point, mlting point, specific gravity, specific heat etc., are similar for the two grades. Major uses for the two grades are also similar except that polycarbonate grade can also be used for polycarbonate resins. In view of the above and after examining the various aspects with regard to like product, it is considered that both these grades are covered under the scope of these investigations and Bisphenol-A produced in India and imported from USA are like articles within the meaning of the rules.

10. Bisphenol-A is classified under Customs Tariff code No. 2907.23.00 and falls under Open General Licence (OGL) category. The classification is, however, mentioned for the sake of convenience and is not binding on the present investigation.

7. DOMESTIC INDUSTRY

11. Bisphenol-A is produced in India by (a) M/s. Kesar Petro Products Ltd., 7, Nagin Mahal, 2^nd Floor, Veer Nariman Point Road, Churchgate, Mumbai- 400 020 and (b) M/s. Cibatul Ltd., P.O. Atul- 396020, Dist. Valsad, Gujarat. It is, however, noted that M/s. Cibatul is an importer of the product and, therefore, cann’t be considered as a constituent of the domestic industry under the Anti-Dumping rules supra. It is, therefore, considered that M/s. Kesar Petroproducts Ltd. constitutes the domestic industry and has been referred to as domestic industry in these findings.

8. NORMAL VALUE

12. The Normal Value of Bisphenol-A in USA was considered at the time of initiation on the basis of prices published in a Magazine i.e. Chemical Marketing Reporter. The domestic industry had earlier during the course of investigation relating to Russia and Brazil provided photocopies of relevant pages of Chemical Marketing Reporter issues from 28.12.1992 till 30.5.1994 and the Normal Value was considered on the basis of price published between April 1994 to May 1994 and notified in the initiation notification.

13. During the course of on the spot investigation at the premises of domestic industry, the relevant information from 11.7.1994 till 11.12.95 was also collected. It is observed that the domestic prices reported by the magazine during 1994 remains almost at the same level except during a short period of March to May 1994, when steep increase of over 80% in prices of the product has been reported.

14. None of the exporters from USA, though some of them acknowledged having known the investigation, furnished any information regarding normal value of the product inspite of providing them adequate opportunity.

15. The Indian Embassy in USA furnished prices of Bisphenol-A in the domestic market in USA on the basis of distributors pricing for one of the producers in USA. Though it is found that the price list is effective from 6.1.95 i.e. the post investigation period, yet it leads to the conclusion that the increase in the prices shown in the Magazine for a short period from March, 94 is not justified.

16. Some of the importers argued that the prices mentioned in the Chemical Market Reporter was a retail price of small quantities of one or half kg. None of the importers could, however, substantiate their claim inspite of adequate opportunity provided to them. Similarly, none of the exporters from USA either provided any information on normal value of the product in USA or claimed any adjustments for working out ex-works normal value disclosed in the initiation notification.

17. The Authority considered all these factors and found that it would be appropriate to consider, for the purpose of these preliminary findings, normal value on the basis of the information available on record. Accordingly, ex-works normal value has been worked out on the basis of normal domestic prices, ignoring abnormal changes, reflected in the Magazine during the period of investigation.

9. EXPORT PRICE

18. None of the exporters furnished information on export price nor cooperated with the Authority inspite of the fact that one of the exporters admitted to have exported offspec material during the period of investigation to India. One of the importers furnished details of imports of the product, but the same cannot be described as complete. The export price has to be, therefore, worked out in accordance with the best available information.

19. The importer who have furnished the details of their imports as per the questionnaire prescribed by the Authority, imported more than 95% of the total known imports during April, 1993 to September, 1994 (The importer is being referred to as major importer hereinafter). None of the other importers has furnished the details of the imports made by them. Recognizing that imports made by the major importer reflects the prices at which Bisphenol-A has been exported to India, the Authority adopts the actual cif import price of the product during period of investigation of the major importer as the cif export price for the exporters in USA.

20. The major importer claimed that import price of Bisphenol-A from USA was lower during the period of investigation on account of import of bulk quantities of offspec material in jumbo bag packaging. Enclosed a letter from an agency indicating that their principal had supplied inferior quality material at USD 650 per MT during 1994 and that the standard price of normal quality Bisphenol-A that time used to remain in the range of USD 900 to 980 pmt cif Bombay in standard packing , the importer viewed that it is not desirable to compare normal price with import price for sub-standard material in packing of 1000 kg against normal packing of 25 kg packs.

21. The importer has furnished supporting evidence with regard to its contention of poor quality in the form of its laboratory report and analytical report of the material which indicates that the Apha of the material (which decides the color and hence quality of the Bisphenol-A ) was very high. The exporter from USA and their Indian agent also supported the fact of having exported offspec product to India during the period of investigation. The importer has also submitted documentary evidence in support of their claim of having imported the material in bulk quantity in jumbo bags of around 1000 kg approx.

22. None of the other importer have cooperated with the Authority and it is not known whether the material imported by them was also Off-specs.

23. During the course of spot verification at the premises of domestic industry this aspect was investigated in detail and it was found that the selling prices of Bisphenol-A for the domestic industry also greatly varies depending upon quantum of sales and /or Color.

24. Under the circumstances, in spite of non-cooperation from the exporters, it is considered appropriate to allow adjustments claimed by the major importer on account of bulk sales, sub-standard quality an Jumbo packing size. Since the major importer furnished the cif price of good quality Bisphenol-A in small quantities imported from USA by other importers, it is appropriate to consider the same as a base, for the purpose of preliminary findings, for adjustments on account of the above claimed factors.

25. The Authority, in view of the above facts, therefore, has adjustment the cif export price of Bisphenol-A by an amount equivalent to the difference between the import price of good quality Bisphenol-A imported in small quantities by the other importers from USA during the period of investigation and the actual cif import price of the sub-standard quality of bulk purchase in jumbo bags imported by the major importer to arrive at the adjusted cif export price.

26. For fair comparison, cif export price is to be appropriately adjusted to work out ex-works export price. Since none of the exporter has cooperated with the Authority, fob export price is to be derived from cif export price on the basis of fact available with the Authority. One of the importers, in its reply indicated that adjustment of an amount of USD 171.50 per metric tonne, as suggested by the domestic industry, towards freight insurance and other charges for working out fob price in USA is not correct. It further indicated that according to their practical experience, it is in the region of USD 105 to USD 110 pmt. Though documentary evidence in support of the said claim has not been made available by the importer, the Authority, for the preliminary findings, made the adjustment towards ocean freight, insurance etc. to the extent claimed by the importer to estimate the fob export price. The fob export price estimated is considered as ex-works export price in the absence of any further information made available in this regard.

10. COMPARISON

27. For the purpose of fair comparison between the normal value and the export price, the Authority took into account the information furnished by the domestic industry, importer and the best information available with the Authority in the absence of any direct response in the prescribed form and manner from the exporters. The Authority has compared normal value with weighted average export price, both at ex-works level, for the known exporter and has arrived at following dumping margins:

Name of the Exporter	Dumping Margin (US$ per MT)
Mitsui & Co. (USA) Inc.	1253

28. The Authority recognizes that the normal value and export price during the investigation period only are relevant for deciding dumping, and the export price from India or third countries and that the current export price to India or prices prevailing in India or international prices are not relevant for the purpose.

11. INJURY

29. 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 udnercutting by the dumped imports as compared with the price of the like product in India, or whether the effect of such imports is otherwise to depress prices to a significant degree or prevent price increases, which otherwise would have occurred, to a significant degree.

30. For the examination of the impact on the domestic industry in India, the Authority considered such further indices having a bearing on the state of industry as production, capacity utilization sales, stock, profitability, net sales realisation, etc.

1. Volume and Market Share of Dumped Imports:

31. Imports of Bisphenol-A from USA, prorata increased to more than three fold during the period of investigation compared to 1993-94 as per the facts available, resulting in sharp increase in the volume of imports in absolute terms. Further, the volume of dumped imports from USA in relation of the total imports reported by DGCIS of the product and its salt exceeds the limit prescribed in rule 14 of the Rules supra.

32. The sharp increase in imports in absolute terms consequently resulted in increased market share of the imports from USA in the total demand of the product in the Country.

b. Export prices from USA:

33. The CIF export Price of the product from USA declined by about 13 percent during the period of investigation as compared to 1993-93 and by about 24% as compared to 1992-93.

2. Production and Capacity Utilisation:

34. Production of the domestic industry increased about 25 percent during the period of investigation as compared to prorata production in previous year (though that year was not normal due to dumping by Japan), resulting in increased capacity utilization during the corresponding period. It is however, noted that the domestic industry has been exporting Bisphenol-A in substantial quantities and also producing the same on job work basis. Manufacturing of Bisphenol-A involves continuous process technology and, therefore, domestic industry has been able to continuously improve its production and capacity utilisation, in spite of dumping by Japan, Russia, Brazil and USA.

35. The domestic industry has been able to increase its sales consistently since commercialization of production in October 92 and the same increased by an average of over 67 per cent during the period of investigation as compared to 1993- 94. It, however, appears that the said increase in sales quantum is a direct consequence of fall in the selling prices of the domestic industry.

36. The unit sales realisation from domestic sales declined by about 15% during period of investigation as compared to 1993-94 and by more than 35% in relation to 1992-93. The authority observed that the average sales realisation during the period of investigation was lower than optimum cost of production resulting in losses to the domestic industry.

37. Stocks of Bisphenol-A with the domestic industry declined from 1052 MT (1992-93) to 824 MT (1993-94) and 803 MT (September 1994), it is, however, noted that decline in inventory would be a result of reduction in selling prices by the domestic industry, undertaking export activities, job work and imposition of anti dumping duty on Japan.

38. The Authority finds that the exports from USA alongwith the exports from Russia and Brazil were undercutting the prices of Bisphenol-A in the Indian market and the domestic industry was forced to reduce its prices gradually and continuously in view of dumped imports from USA, Russia and Brazil.

39. The Authority finds that decline in the export prices by the exporter from USA over the previous year resulted in a situation of price suppression in the Indian market, which prevented the domestic industry to adjust its prices commensurate with the increase in its cost of production.

1. Profit/Loss:

40. The domestic industry has been incurring losses since inception including the period of investigation and the same is because of selling prices being far lower than cost of production.

41. The Authority is led to conclusion that all the relevant factors, cumulatively and collectively establish that the domestic industry has suffered material injury during the period of investigation.

12. CAUSAL LINK

42. In determining whether material injury to the domestic industry was caused by the dumped imports, the Authority took into account the following facts:

1. The imports of the product from USA increased significantly in absolute terms and relative to the production and consumption of the product in India. The share of USA in the total imports also increased significantly. As a direct consequence, the domestic industry lost its market share to a significant level.

43. The Authority thus arrived to the conclusion that the material injury to the domestic industry was caused by the dumped imports from USA alongwith the dumped imports Russia and Brazil.

50. The Authority has, after considering the foregoing, come to the conclusion that:

• Bisphenol-A originating from or in USA has been exported to India below its normal value.
• The Indian industry has suffered material injury.
• The injury has been cumulatively caused by the imports from USA alongwith Russia and Brazil.

51. The Authority, having already recommended imposition of anti dumping duty on imports originating in or from Russia and Brazil vide notification No. 9/11/94/ADD dated 20^th November, 1995, considers it necessary to impose an anti dumping duty provisionally, pending final determination, on all imports of Bisphenol-A originating from USA in order to remove in to the material injury to the domestic industry.

52. The Authority considered whether a duty lower than the dumping margin would be sufficient to remove the injury. The weighted average landed price of the imports for the exporter, for the purpose, was compared with the fair selling price of the domestic industry, determined by the Authority for the period of investigation. The difference being less than the dumping margin, a duty lower than the dumping margin is considered. Accordingly, the Authority recommends that provisional anti dumping duties as set out below be imposed from the date of notification to be issued in this regard by the Central Government on all imports Bisphenol-A falling under custom code 2907.23.00 originating from USA, pending final determination.

53. The known exporters/producers, importers, domestic industry and other interested parties are being separately addressed by the Authority, who may make known their views to the Authority. Any other interested party may also make its views known to the Authority within forty days from the date of its publication.

Designated Authority