MINISTRY OF COMMERCE & INDUSTRY
(Department of Commerce)
(Directorate General of Anti Dumping & Allied Duties)
NOTIFICATION
New Delhi, the 20th November, 2002
PRELIMINARY FINDINGS
Subject : Anti-dumping
investigation concerning import of Float Glass originating in or exported
from Peoples’ Republic of China and Indonesia- Preliminary Findings.
No. 14/19/2002-DGAD - The Government of India having regard to the Customs Tariff Act, 1975 as amended in 1995 and the Customs Tariff (Identification, Assessment and Collection of Anti Dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995, thereof;
A. PROCEDURE
2. The procedure described below has been followed:-
(i) The Designated Authority (hereinafter referred to as Authority), under the above Rules, received a written petition from All India Flat Glass Manufacturers’ Association (AIFGMA), New Delhi on behalf of the domestic industry, alleging dumping of Float Glass (hereinafter referred to as subject goods) originating in and exported from Peoples’ Republic of China and Indonesia (hereinafter referred to as subject countries) ;
(ii) The following producers of Float Glass in India and members of the AIFGMA (hereinafter referred to as the petitioners) have specifically consented to participate in the anti-dumping investigations:
(a) M/s. Saint Gobain
Glass India Ltd., Kanchipuram, Tamil Nadu.
(b) M/s. Float Glass India Ltd., Mumbai.
Another domestic producer, viz., M/s. Gujarat Guardian Ltd., Dist. Bharuch, Gujarat has supported the petition.
(iii) The Authority notified the Embassies of Peoples’ Republic of China and Indonesia in India about the receipt of dumping application made by the petitioners before proceeding to initiate the investigation in accordance with sub-rule (5) of Rule 5 supra;
(iv) The Authority issued a Public Notice dated 5th July 2002 published in the Gazette of India, Extraordinary, initiating anti dumping proceedings concerning imports of Float Glass covered under Chapter heading/subheading 70.05 of Schedule I of the Customs Tariff Act.
(v) The Authority forwarded copy of the said public notice to the known exporters, importers and to the complainants and gave them an opportunity to make their views known in writing.
(vi) According to sub-rule (3) of Rule 6 supra, the Authority provided a copy of the petition to all the known exporters and Embassies of subject countries in India.
(vii) The Authority sent questionnaires, to elicit relevant information, to the following exporters: -
Qinhuangdao Huazhou Glass Co. Ltd.,
No.1 Xiafeng Road,
Haigang District,
Qinhuangdao,
China.
M/s. PT Mulia Industrindo,
Plaza Kuningan,
Menera Utara 10th Floor,
Jl. H.R. Rasuna Said Kav. C11-14,
Indonesia.
M/s. PT Tensindo,
Jalanraya,
Samarang,
Indonesia.
M/s. PT Abdi Rakyat Bakti,
JL. Gandhi. No. 130,
Medam 20214,
Indonesia.
(viii) The Embassies of subject countries in New Delhi were also informed about the initiation of investigation and requested to advise the exporters/producers from their countries to respond to the questionnaire within the prescribed time;
(ix) The questionnaire was sent to the following importers of subject goods:
1. Mahavir Mirror Industries
Chennai – 600 007
2. Renuka Enterprises
Chennai- 600 007
3. T.N. Glass Corp.
Chennai
4. Stella Mary Exports
Tuticorin
5. Impact Safety Glass Works (P) Ltd.
Bangalore
6. Sri Chakra Laminates
Bangalore
7. Liberty Glass House
Mumbai – 400 003
8. Kanch Ghar
Bombay – 400 056
9. Monica Exim (P) Ltd.
Pune – 411 001
10. Bharti Glass Co.
Calcutta – 700 001
11. Chinoy Chiblani & Co.
Calcutta – 700 001
12. G.S.C. Toughened Glass (P) Ltd.
Noida
13. Jolly Glass Industries
New Delhi.
14. S S Industrial
New Delhi.
15. Lakshmi Floatglass Limited
Kirti Nagar, New Delhi.
16. M/s T.L.Verma & Co.
Chandigarh.
17. M/s Noble Glass Impex
New Delhi – 110 055
18. Prashant Trading Co.
Mumbai – 400 007
19. Rajvi Enterprises/Samarth Industries
Mumbai – 400 007
20. Oceanic Offshores/Right Pulls & Lift
Mumbai – 400 003
(x) Additional information regarding injury was sought from the petitioners, which was also furnished;
(xi) The Authority kept available non-confidential version of the evidence presented by various interested parties in the form of a public file maintained by the Authority and kept open for inspection by the interested parties;
(xii) ***** in this notification represents information furnished by the interested parties on confidential basis and so considered by the Authority under the Rules;
(xiii) The investigation covered the period from 1st April 2001 to 31st December 2001;
(xiv) Copies of initiation notice were also sent to FICCI, CII, ASSOCHAM etc., for wider circulation.
B. PETITIONER’S VIEWS
3. The petitioners have made the following major arguments in their submissions:-
(i) The product under consideration in the present petition is Float Glass with following description: -
‘Float glass of thickness 2 mm to 12 mm (both thickness inclusive) of clear as well as tinted variety (other than green glass) but not including processed glass meant for decorative, industrial or automotive purposes’.
The product is covered under Chapter Heading 70.05 of First Schedule of the Customs Tariff Act, 1975.
(ii) The product finds major uses in construction, refrigeration, mirror and solar energy industries etc. The product is a superior quality of glass. Due to its inherent strength, high optical clarity, distortion free smooth surface etc., the application of the product has been increasing for different purposes.
(iii) The Petitioners’ accounts for 49.49% share of the total domestic production of Float Glass in India. Along with the production of the supporting producers, the share of the Petitioner becomes 82.09% of the total domestic production.
(iv) There is no difference between the products manufactured by the domestic industry in India and the imported goods.
(v) There is no difference between the production process of the domestic industry in India and that of the imported goods.
Import data used for the Petition
(vi) The statistics published by the Directorate General of Commercial Intelligence and Statistics (DGCI&S) of the Ministry of Commerce, Calcutta, give combined details of all types of Float Glass and surface ground or polished glass imports into India from various countries in terms of volumes and value. However, the product for which this petition has been filed relates only to "Float Glass of thickness 2 mm to 12 mm (both thickness inclusive) of clear as well as tinted variety (other than green glass) but not including processed glass meant for decorative, industrial or automotive purposes" which are being dumped and causing injury to the domestic industry. This petition seeks to cover only "subject float glass" for which no dedicated heading exists nor is the data compiled by any agency (including DGCIS) in that manner.
In view of the fact that DGCI&S data is not available for the subject goods, we have collected and collated the same from Impex Data Services and the data available for ICD Delhi from BE Register.
On Dumping
(vii) We have tried to get information on prices of the subject goods in the domestic market of Indonesia. We have also made efforts to get price list of the exporters or price evidence for the export to other country. We submit that we have not been able to get any evidence either with regard to the prices of the subject goods in Indonesia or the price list of the exporters either for sale in Indonesia or for exports to other countries. Under such circumstances, constructed normal value is a good indicator of the normal value for the purpose of initiation of investigation. We request the Hon’ble Designated Authority to accept constructed normal value based on the cost of production in the country of origin. We have been able to obtain the annual report of M/s. Mulia Industries of Indonesia, who are an important producer and exporter of float Glass. We have based our calculations of normal value on the audited accounts of the company suitably adjusted for cost elements not accounted for in the audited accounts.
(viii) As regards China also, we would request the Authority to accept the normal value estimated by us on the same basis. Para 7 of Annexure I of the Anti-dumping Rules may also be referred to.
(ix) The export price for subject countries has been worked out on the basis of the import figures available with us along with the cif values. Adjustments have been made on account of Ocean Freight, Marine Insurance, Inland Transportation in the country of export, Port handing and Port charges to arrive at ex-factory export price.
On Injury
(x) The petitioner has given detailed information on injury and causal link which has been dealt with appropriately in the relevant part of these findings.
C. EXPORTERS’, IMPORTERS’, USERS’ AND OTHER INTERESTED PARTIES’ VIEWS
4. Responses have been received from the following exporters: -
5. The submissions made and/or the information provided by the above are as follows: -
(i) PT Mulia Glass, Indonesia : - The exporter has furnished detailed response giving information regarding domestic sales, exports to India, cost of production. Separate non-confidential version had not been submitted. However, the exporter had informed "these information which we deem confidential of nature are duly stamped ‘Confidential’, while those submitted without any marks/stamps are to be considered non-confidential". Accordingly, from the submissions made by the exporter, the information marked/stamped as "Confidential" has been removed and the remaining information/document have been treated as non-confidential and placed in Public File. The exporter has made following general comments in their submissions :-
(a) Volume of Exports to India during period
During the period 1 April 2001 upto 31 December 2001 total exports to India amounted to only 2,101 tonnes which translates into US$ 425,241 FOB.
(b) Evidence of Dumping
The AIFGMA submits that for the purpose of the investigation, their constructed normal value is a good indicator. This, in turn is based on the cost of production in the country of origin. We would like to insist that cost of production calculated on the basis of PT Mulia Industrindo’s Annual Report of year 2000 is not acceptable, for the following reasons :-
(c) Estimates of Export Price
In general, estimates for Export Price are not complete. There are no figures for ocean freight, marine insurance and port handling charges. It is also unacceptable to base inland transportation costs in Indonesia on the Indian experience, as geographically the two are quite different.
(d) Market share of Imports
Market share of imports from China and Indonesia collectively amounts only to 3.32% to total demand. We are of the opinion that such figure is too insignificant as an indicator of Domestic Injury.
(e) Other indicators of domestic injury
We are of the opinion that the figures submitted by the AIFGMA for indicators such as changes in market share, output/productivity & capacity utilization, sales, employment, wages etc. are either incomplete or irrelevant to the case.
(ii) PT Abdi Rakyat Bakti, Indonesia : - The exporter has furnished only one set of response with all information marked as confidential. No other set of non-confidential information has been furnished as required under the Rule 7(2). The exporter was also advised vide letter dated 6.9.02 to submit non-confidential version, which has not been furnished. The exporter has not furnished information relating to cost of production. They have also not furnished the Profit & Loss Account and Balance Sheet.
(iii) PT Tensindo, Indonesia: - The exporter has furnished details of domestic sales of float glass, export sales to India. The cost of production has been furnished month-wise and several element of costs have been mentioned in the Indonesian language and not in English. Financial statements containing profit and loss account and balance sheet for the period relating to investigation and previous two years (in English language) have also not been furnished. The non-confidential version furnished by the exporter is also inadequate as the summarised non-confidential information in respect of all the parts of the questionnaire also needs to be furnished.
(iv) M/s Qinhuangdao Huazhou Glass Co. Ltd., China
The company has stated that they are not dumping glass in India. Further, as per the company the current price of India CIF Indian port is lower than their domestic price. Their company’s glass price is on high side in Chinese glass market due to very good quality. The company stated that they will arrange evidence to be submitted by end October, 2002. Further, their exports of clear Float Glass to India are only 2.5% from their total production. They have not furnished response on the exporter’s questionnaire and are thus considered as non-cooperative.
(v) M/s Nanning Float Glass Co. Ltd., China
The company has informed to have not exported float glass during the period of investigation and so they have not filled the questionnaire response. They have started exporting to India in the year 2002.
6. The following importers have responded:
7. Submissions made by M/s. Mahaveer Mirror Industries and M/s. T.L.Verma & Company (P) Ltd.
(i) The importers in their submissions have drawn attention to the provisions of Rule 7(1), 7(2) and 7(3) of the Anti Dumping Rules citing the same in the response. These are not being reproduced here for the sake of brevity.
(ii) The importers have further argued that guidance may be taken from WTO Anti Dumping Agreement Article 6.5.1 as to what a non-confidential summary should contain.
(iii) As per the importers the non-confidential version of the petition filed by the Domestic industry in this particular case miserably fails to meet the above stated legal requirement. It does not permit a reasonable understanding of the substance of the information submitted in confidence.
(iv) The basis of conversion of import quantity from square metre to MT has not been given in the NC version. The importance of import data in an anti-dumping investigation needs no emphasis. Crucial issues like de-minimis levels of imports, export price per unit, price undercutting, price under selling, etc. depend on volume of imports.
(v) It is apprehended that the column ‘thickness’ was not available in the import data but had been added by the petitioners. If that is so, the petitioners should have mentioned in the NC version of the petition, the basis of arriving at the thickness for each transaction as the volume of imports depends on thickness.
(vi) The petitioners state that they had calculated normal value based on the audited accounts of M/s. Mulia Industries, Indonesia after suitably adjusting for cost elements not accounted for in the audited accounts. The very statement is intriguing. Following comments have been made by these importers on claim of petitioner regarding normal value:-
(vii) The petitioner has claimed the normal value in respect of China "on the same basis ". It is not clear whether normal value estimate is based on the information for the Indonesian exporters or on any other different information.
(viii) The petitioner has not disclosed the adjustments claimed on account of ocean freight, marine insurance, inland transport and port handling and port charges from the export price. These adjustments are based on publicly available information and the Authority should not allow the petitioners to convert open information into company specific confidential information.
(ix) The petition only gives ** marks in respect of export price, normal value, net export realization. The last line entry, dumping margin percentage alone has been provided in the petition.
(x) The information on various injury parameters has been given with mere ** marks and does not give the interested party a reasonable understanding of the information submitted in confidence.
(xi) The importer has made a prayer that the petitioner be directed to provide proper non-confidential version of the petition before proceeding further in this case.
8. Submission made by M/s. Monika Exim International Ltd., Pune :
On Imports
vi. The petitioners claim that dumping has
aggravated during POI. The fact is, however, the imports have
rather shown decline over the years – in
spite of lifting of orders by MRTP Commission – thanks to the
predatory pricing and restrictive trade
practices adopted by the domestic industry. Gradual removal of the
importers from the market is a clear testimony
that the domestic industry has forced decline in imports, by
using all possible means.
vii. Imports were, under normal circumstances,
expected to have increased in proportion to the increase in the
demand level in India. On the contrary, imports
declined in relation to demands of the product in the
Country – for the simple reasons stated
hereinabove.
viii. Imports from China consists of mainly heat
reflective glasses and not subject items. The quantum of import
of subject item from China is negligible.
ix. The petitioners have shown the quantity of
import in MT for all the items and thickness of Float Glass
whereas the subject items are only small part
of the total imports and, therefore, the thickness-wise,
item-wise, colour-wise, with or without
reflective coating should have been segregated to arrive at the
actual quantities and value of the import
items.
On Domestic Industry
x. The petitioners do not
manufacture all kinds of tinted glass and the glass with coated layer reflective. One
of the petitioners, M/s Saint Gobain
Glass India Ltd. himself was an importer till the commencement of the
production in July 2000 and had imported
substantial quantity to eradicate his competitors.
xi. The petitioner no. 3 imports the Float
Glass with reflective layer by themselves and also through their
agents of their group company. The group
company M/s Glaverbel and Glavermas are part of Asahi group
of company and the said petitioner is part of
the same group.
xii. There are following other manufacturers of Float Glass in India who produce similar or substitutable items:
The petitioners have not admitted these companies as Indian producers. In case the product being produced by these companies is not a like product, the relevant issue would be whether the product being imported from Indonesia and China is a like product.
On POI
xiii. The petitioners have cleverly chosen POI
as April 2001 – December 2001 when they could get data for
the entire financial year upto 31st
March 2002. Choosing of nine months as POI is malafide and
malicious.
xiv. The imports from China are 1047 MT per
annum which is less than one-quarter percent of the total
production of domestic industry.
While it is not disputed that such low volume of imports are above
de-minimus limits, the relevant issue is
how these imports could have adverse price effect on the
domestic industry.
On Normal Value
xv. The constructed Normal Value in the
petition is misleading. It is based on the accounts of Mulia
Industrindo, who is a holding company and
not the producer of subject goods.
On Dumping Margin
xvi. The petitioners have taken the values per MT
consolidated for all the items with different thickness and
varieties of clear and tinted glass
whereas the Normal Value and Export Price will be different for different
thickness and varieties.
On Injury
xvii. The submissions of the importer
on injury have been dealt with in the relevant portion in subsequent
paragraphs.
9. M/s Liberty Glass House, Mumbai have furnished a response to the questionnaire giving details of imports made. However, they have not furnished any non-confidential summary of the response. Their response has, therefore, not been considered for the preliminary findings.
10. M/s Samarth Industries, Mumbai and M/s Rajvi Enterprise, Mumbai have furnished importer’s questionnaire information giving details of imports made from subject countries. The importers have not furnished any separate non-confidential summary of the questionnaire response. These confidential responses have, therefore, not been considered for the preliminary findings. However, M/s Samarth Industries has also made following general arguments in non-confidential manner : -
11. M/s. Impact Safety Glass Works Pvt. Ltd., Bangalore have furnished response on importer’s questionnaire and have also made arguments on the issues viz., product involved, domestic industry etc.. However, they have not furnished any non-confidential summary of their response and have also specifically stated to treat their letter as confidential. The authority had requested the said importer vide letter dated 6th September, 2002 to furnish non-confidential summary of their response. However, non-confidential response has not been furnished by the importer. Therefore, the Authority is constrained to disregard their submissions as per Rule 7 (3) of the Rules Supra.
12. M/s Chinoy Chablani & Company, Calcutta has informed that they have never dealt with Float Glass exported from People’s Republic of China and Indonesia during the period of investigation.
D. EXAMINATION AND FINDINGS BY THE AUTHORITY
13. The submission made by the petitioners, importers, exporters and other interested parties, to the extent filed before the Authority have been examined and considered while arriving at these findings and wherever appropriate have been dealt hereinafter.
14. The cases of new exporters or those stated to be willing to give price undertaking shall be considered, on request, by the Authority in accordance with the Rules supra.
Product Under Consideration And Like Article
15. The product under consideration in this investigation is ‘Float Glass of thickness 2 mm to 12 mm (both thickness inclusive) of clear as well as tinted variety (other than green glass) but not including processed glass meant for decorative, industrial or automotive purposes’ (hereinafter referred to as subject goods). The subject goods find major uses in construction, refrigeration, mirror and solar energy industries, etc. The product is covered under Customs heading 70.05 of Schedule I of Customs Tariff Act. This Custom classification is however, indicative only and is in no way binding on the scope of the present investigation.
Some of the importers have raised the issue regarding the scope of the product under consideration and have requested the Authority to restrict the investigations to the size of the Float Glass being manufactured by the domestic industry. No justifiable reason has been given by the opposing interested parties in support of their argument to restrict the investigation to the thickness or types being manufactured by the domestic industry. The Authority considers the Float glass manufactured by the domestic industry as having similar characteristics to those of the imported product.
The Authority reiterates that the investigation relates to the following specification of the Product Under Consideration: -
‘Float Glass of thickness 2 mm to 12 mm (both thickness inclusive) of clear as well as tinted variety (other than green glass) but not including processed glass meant for decorative, industrial or automotive purposes’.
Like Article
16. The petitioners have claimed that there is no difference between the products manufactured by the domestic industry in India and the imported products. There is evidence of imports from the subject countries in various thickness in the range of 2 mm to 12 mm both in clear and tinted variety of Float Glass. The Float Glass being imported from the subject countries is a commercial substitute for the domestically produced Float Glass. Thus, the Authority holds, for the purpose of preliminary determination, that Float glass being produced by the domestic industry is like article to the product under consideration.
De-Minimus Limits
17. As regards ascertaining that the imports from the subject countries during the period of investigation (POI) are above de-minimus levels, the Authority notes that DGCI&S data gives information about Float glass imports under Heading 70.05 of all types and thickness. The petitioner has collected and collated the import data of subject goods from Impex Data Services and the data available for ICD Delhi from BE register. The Authority notes that as per the information received from the Indonesian exporters and the importers the volume of imports from these countries almost corroborate with thiose given in the petition. Therefore, the Authority finds the data compiled by the petitioner on the basis of secondary source as fairly reliable. The imports of subject goods during POI as per the petition are as under:
Country Name |
Quantity (MT) during POI |
%age share in imports during POI |
Indonesia |
3621 |
79.27% |
China PR |
785 |
17.18% |
Thus, the Authority finds that the imports from the subject countries during the POI are above de-minimus levels.
Domestic Industry
18. The petition has been filed by All India Flat Glass Manufacturers Association (AIFGMA); through the member companies, viz., M/s. Saint Gobain Glass India Ltd., Kanchipuram, Tamil Nadu and M/s. Float Glass India Ltd., Mumbai. Another domestic producer, viz., M/s. Gujarat Guardian Ltd., Dist. Bharuch, Gujarat has supported the petition. The share of the two petitioner companies is more than 25% of the domestic production of subject goods. The two petitioner companies and the other domestic producer supporting the petition account for more than 50% of the total domestic production of subject goods and therefore, the petitioners satisfy the criteria of standing as domestic industry to file the petition in terms of Rule 5(3) (a) of the Rules supra.
19. One of the importers has raised an issue regarding the standing of the domestic industry on the ground that there are other producers of Float Glass in India. The Authority observes that M/s Haryana Sheet Glass Ltd., M/s Gujarat Borosil Ltd. and M/s IAG Company Ltd. are manufacturers of Sheet Glass. The other producer M/s Triveni Glass Ltd., who manufactures Float Glass, has already been shown as a manufacturer under ‘ Other Producers’ in the petition.
20. The petitioner companies account for a major proportion of the total Indian production of subject goods. Thus, the Authority holds that petitioners satisfy the criteria of standing to file the petition on behalf of the Domestic Industry in terms of Rule 5(3) (a) of the Rules supra.
Issue of insufficient non-confidential information
21. Some of the interested parties have raised issue regarding inadequate non-confidential version of the petition. The Authority observes that the petitioner had provided non-confidential version of the petition containing details of import data relied upon by them. A note on collation of import data has also been attached in the non-confidential version. The basis of conversion of the import quantity from square metre into MT has been sought by the importers. The product Float Glass is imported in various thickness and in ‘clear’ and ‘tinted’ varieties. The DGCI&S data does not give details of various thickness and type of Float Glass imports and therefore, the petitioner had furnished thickness and type-wise import data as collated from secondary sources. The Authority has received response from the exporters and has been able to arrive at normal value and export price in terms of MT for various thickness and colour or clear type of Float Glass. The Authority also observes that the non-confidential petition contains summary of the confidential information. The petitioner has provided indexed information of the market share of imports, output, productivity and capacity utilization, sales volume etc..
Earlier Complaints made by AIFGMA before The Designated Authority, Customs and MRTP Commission
22. The importers have argued that the petitioner has in the past unsuccessfully raised the issue of import of Float Glass before this Authority as well as Customs Authority and MRTP Commission. The Authority is of the view that the earlier complaints made by the petitioner in the year 1998 before the Customs Authority or before the DGAD may not have a bearing on the present investigation. The present investigation relates to the investigation period April 2001-December 2001 and the Authority proposes to conduct it within the ambit of the relevant Customs Tariff Act and the Rules framed there under.
23. As regards the matter relating to petitioners’ complaint before the MRTP Commission, the Authority has taken note of the judgement dated July 22nd, 2002 of the Hon’ble Supreme Court in the Civil Appeal No. 2330 of 2000 – M/s Haridas Exports vs All India Float Glass Manufacturers’ Association and Others. The Hon’ble Supreme Court has, inter-alia, made the following conclusions in the said Appeal :-
While making the above conclusions, among others, the Hon’ble Supreme Court has also, inter-alia, held in the said Order that "it is thus seen that the provisions relating to anti dumping contained in the Customs Tariff Act do not in any way affect the power of jurisdiction of the MRTP Commission. The Import Control Act and the Customs Tariff Act on the one hand and the MRTP Act on the other operate in different independent fields and the authority under one has no jurisdiction over the other. In other words, their paths do not cross each other. While the provisions of Anti dumping Act are concerned with the levy of anti dumping duty, the MRTP Act in the present case would be concerned with the agreements between the parties which relate to the restrictive trade practices. Therefore, it would be incorrect to say that the incorporation of the anti dumping provisions ousts the jurisdiction of the MRTP Commission to inquire and pass orders, inter alia, with regard restrictive trade practice in India."
24. The Authority thus observes that the Hon’ble Supreme Court has held that the Customs Tariff Act on the one hand and the MRTP Act on the other operate in different independent fields and the Authority under one has no jurisdiction over the other. In other words, the Authority does not find any merit in the contention of the importer M/s Monika Exim International Ltd., Pune that the petitioner has maliciously succeeded in getting simultaneous dual proceedings against the same imports. The present anti-dumping investigation under the Customs Tariff Act does not get restrained due to the ongoing complaint before the MRTP Commission.
E. DUMPING & EXAMINATION OF CLAIMS MADE ON NORMAL VALUE & EXPORT PRICES
Normal Value
25. Under Section 9A(1)(c) of the Customs Tariff (Amendment ) Act,1995 normal value in relation to an article means:
"(i) The comparable price, in the ordinary course of trade, for the like article when meant for consumption in the exporting country or territory as determined in accordance with the rules made under sub-section(6); or
(ii) when there are no sales of the like article in the ordinary course of trade in the domestic market of the exporting country or territory, or when because of the particular market situation or low volume of the sales in the domestic market of the exporting country or territory, such sales do not permit a proper comparison, the normal value shall be either –
(a) comparable representative price of the like article when exported from the exporting country or territory or an appropriate third country as determined in accordance with the rules made under sub-section (6); or
(b) the cost of production of the said article in the country of origin along with reasonable addition for administrative, selling and general costs, and for profits, as determined in accordance with the rules made under sub-section (6)";
26. The Authority sent questionnaire to all the known exporters for the purpose of determination of normal value in accordance with Section 9A(1)(c). The responses received from the exporters have been dealt as under:
Normal value determination for exporters from Indonesia
PT Mulia Glass
27. M/s PT Mulia Glass has submitted detailed information regarding domestic sales, exports to India, cost of production, sale price structure for exports and domestic sales, average domestic freight cost and exchange rate. The exporter has given information regarding domestic sales in terms of MT for different thickness and clear and dark grey types. Analysis of the domestic sales price prima facie indicates that more than 80% of these sales are in the ordinary course of trade. The Authority has therefore considered the domestic sales price for normal value determination. The weighted average sale price for different thickness has been considered as the basis and adjustments of 1.5% on account of discounts/commissions, packing costs as given by the exporter and freight amount of Rp*** have been made to arrive at normal value at ex factory level.
M/s PT Tensindo
28. M/s PT Tensindo, Indonesia has furnished details of domestic sales of float glass, export sales to India. The cost of production has been furnished month-wise and several element of costs have been mentioned in the Indonesian language and not in English. The authority notes that the following information as required in various Appendices of the Exporter’s Questionnaire has not been furnished:
Financial statements containing profit and loss account and balance sheet for the period relating to investigation and previous two years (in English language) have also not been furnished. The non-confidential version furnished by the exporter is also inadequate as the summarised non-confidential information in respect of all the parts of the questionnaire also needs to be furnished. In order to determine the domestic sales to be in ordinary course of trade, the furnished information relating to cost of production is neither sufficient nor in the prescribed proforma. The Authority is, therefore, constrained to rely upon the best available information for Normal Value determination. The Authority has, therefore, determined the Normal Value in respect of this exporter on the basis of information available in the case of M/s PT Mulia, Indonesia for the preliminary determination pending submission of complete information and verification thereof.
PT Abdi Rakyat Bakti, Indonesia
29. The exporter has furnished only one set of response with all information marked as confidential. No other set of non-confidential information has been furnished as required under the Rule 7(2). The exporter was also advised vide letter dated 6.9.02 to submit non-confidential version, which has not been furnished. The Authority finds that the exporter has not given satisfactory reason for not furnishing non-confidential version. The exporter has also not furnished information regarding cost of production and the Profit & Loss Account and Balance Sheet. The Authority thus holds that the exporter has not fully cooperated in the investigation. The Authority has, therefore, in terms of Rule 7(3) disregarded the information furnished by the exporter for the Preliminary Findings. The Authority has, therefore, been constrained to rely upon the best available information under Rule-6 (8) for Normal Value determination. The Authority has, therefore, determined the Normal Value in respect of this exporter on the basis of information available in the case of M/s PT Mulia, Indonesia for the preliminary determination pending submission of complete information and verification thereof.
Normal value determination for China PR:
30. None of the exporters from China PR has given complete response to the questionnaire sent to them. The authority had informed the Embassy of China PR in India about the initiation of this investigation with advice to inform the exporters of the subject goods to furnish information on the questionnaire. M/s Qinhuangdao Huazhou Glass Co. Ltd., China, who has stated to have exported the subject goods during the POI, did not co-operate by furnishing the information as per the questionnaire. The company has stated that they are not dumping glass in India. Further, as per the company the current price of India CIF Indian port is lower than their domestic price . Their company’s glass price is on high side in Chinese glass market due to very good quality. Further, their exports of clear Float Glass to India are only 2.5% from their total production. They have not furnished response on the exporter’s questionnaire and are thus considered as non-cooperative. The other exporter M/s Nanning Float Glass Co. Ltd., China has informed to have not exported float glass during the period of investigation and so they have not filled the questionnaire response. The Authority confirms, in the absence of any complete response from the exporters from China PR in the form and manner prescribed, having made the findings with regard to exports from China PR on the basis of the facts available to it as per rule 6(8) supra. Accordingly, the Authority has determined the Normal Value in respect of China PR on the basis of constructed cost of production. While doing so, the Authority has considered the evidence regarding cost of production furnished by the domestic industry and has referenced the Normal Value with reference to actual cost of production of domestic industry after normating it at optimum efficiency level.
Export price in respect of Indonesia:
31. Export price in respect of M/s PT Mulia Glass has been determined on the basis of information furnished by the exporter. They have furnished details of exports of Float Glass ‘Clear’ and ‘Dark Grey’ in various thicknesses. The Authority has considered the export prices shown in the questionnaire response. The exporter has shown adjustments on account of packing, ocean freight, insurance, shipping charges, trucking costs, clearance and handling and fumigation charges. The Authority has allowed adjustments of $*** on these account as claimed by the exporter. The ex-factory export price comes to US$*** /MT.
32. Export price in respect of M/s PT Tensindo has been considered on the basis of the furnished information regarding sales to India. Similar adjustments as made in the case of M/s PT Mulia have been made from the CIF export price to arrive at the export price at ex-factory level.
33. Export price in respect of PT Abdi Rakyat Bakti, Indonesia has been considered on the basis of the furnished information regarding sales to India. Similar adjustments as made in the case of M/s PT Mulia have been made from the CIF export price to arrive at the export price at ex-factory level
Export price in respect of China:
34. There has been no response from any exporter from China. The Authority has therefore relied upon the data furnished in the petition for export price determination. As per this information the weighted average CIF export price comes to US$ ***. Adjustments have been made on account of ocean freight, insurance, inland freight, and port handling charges. The export price at ex-factory level comes to US$***/MT.
Dumping margin
35. The principles governing the determination of normal value, export price and the dumping margin are laid down in Annexure-I to the Rules. For the purpose of the fair comparison between the normal value and export price, the Authority has made calculations and comparisons at the same level of trade. Normal Value at ex-factory level has been compared with the export price at ex-factory level of similar type/thickness of Float Glass wherever the data is available. Considering the normal value and export price, determined as detailed above, the dumping margin comes as under:
S. No. |
Country |
Name of Exporter |
Dumping Margin % |
1. |
Indonesia |
M/s PT Mulia |
46.52 |
2. |
Indonesia |
M/s PT Tensindo |
54.88 |
3. |
Indonesia |
M/s PT Abdi Rakyat Bakti |
79.02 |
4. |
Indonesia |
All other exporters. |
79.02 |
5. |
China |
All exporters. |
43.82 |
F. INJURY
36. Rule 11 of Anti Dumping Rules reads as follows:
"Determination of Injury:
37. The principles for determination of injury set out in Annexure-II of the Anti- Dumping Rules lay down that:
38. Views of the petitioners
a) Increased imports from the subject countries
i) The imports from the subject countries in comparison to the total imports have increased drastically from 20.87% in 2000-2001 to 96.45% during the period of investigation. This drastic increase in imports, in absolute as well as relative terms, from subject countries is essentially because of imports coming at dumped price.
ii) Imports from the subject countries in comparison to the total demand in the country imports have also increased from 1.71% in 2000-2001 to 3.32% during the period of investigation.
iii) Imports from the subject countries have risen drastically even during the period of investigation. A quarter-wise analysis shows that the Oct-Dec 2001 quarter accounted for nearly 70% of the total imports from the subject countries during the period of investigation. It is apprehended by the domestic industry that the rate of increase has further aggravated in the subsequent period.
b) Changes in Market Share Held by the Indian Producers
The increase in the market share of the domestic industry has to be viewed in the context of the addition of the new capacity in the country and the fact that the share of the dumped imports from the subject countries have gone up drastically at the cost of imports from other countries.
c) Evidence of lost contracts
The complainant domestic industry tried its best to hold on to the customers. Yet the fact that 5874.67 MT (annualized) of dumped imports arrived into India during POI is adequate evidence that it lost potential customers.
d) Output / Productivity & Capacity Utilization
There has been a drop in the capacity utilization of the domestic industry to the extent of about 0.66% in the period of investigation over the preceding financial year. It would, therefore, be clear that the domestic industry’s position has not undergone any significant change particularly in view of the fact that there is a drop in the capacity utilization.
e) Sales Volume & Value
The volume of sales by the petitioners went up during the period of investigation over the preceding financial year. This increase is almost entirely on account of production of Saint Gobain who started production in November 2000. It will be observed that the industry is realizing a higher price in the period of investigation as against the price in 2000-2001. However, because of the pressure on price from imports from subject countries, the domestic industry is not able to realize a fair price or a reasonable rate of return.
f) Inventories
The inventories have significantly increased from *** MT at the end of March 2001 to **** MT as on 31.12.2001, an increased of over 14%.
g) Employment
There has been no impact on the employment as we have made all attempts to sustain higher levels of production and capacity utilization. Further, injury to the domestic industry is not reflected in the employment figures as the Indian labour laws are rigid.
h) Wages
No impact for the reasons explained in para above.
i) Profitability
Dumping by China and Indonesia had a significant impact on the net sales realization by the domestic industry for the subject goods. To hold on to its market share, the petitioners had to compete with low priced offers / imports of subject goods from the subject countries. Due to the large scale dumping by the subject countries, the domestic industry while making some profits as a percentage of sales, has not been able to get any returns on its investments. It is significant to note here that float glass industry is highly capital intensive in nature and its profitability or otherwise can be best judged by the ROCE (Return on Capital Employed).
j) Return on Investment (Capital Employed)
It may be noted at the outset that float glass industry is highly capital intensive. The industry have invested an amount of Rs. **** per metric ton of installed capacity. This will require a minimum profit of over Rs. **** per metric ton at *****% level of operations whereas the current profit is as low as one seventh of the reasonable figure. A comparison of the cost of sales and sales realization per metric ton shows that despite best efforts, because of dumping by the subject countries, the industry is nowhere near the desired profit.
k) Price Underselling
Despite best efforts to cut costs and streamline their operations, the domestic industry is not in a position to realize a reasonable price for their products. The landed value of the product under consideration both from China and Indonesia are much lower than the prices of domestic industry ought to have realized on the sales of the subject goods.
The injurious effect of this high level of price underselling has had a direct and deleterious effect on the financial performance of the domestic industry.
l) Price Undercutting
The effect of the injury to the domestic industry due to dumped imports is further accentuated by the fact that not only the subject goods are being undersold, the exporters from the subject countries are also indulging in price undercutting. The landed value (i.e. the CIF price plus landing charges plus handling charges plus basic customs duty) of the dumped imports has been much below the selling price of the domestic industry during the period of investigation.
m) Actual and potential negative effect on cash flows
The domestic industry has not been able to earn even nominal returns on the capital employed. Hence, there is a considerable impact on cash flows-coupled with the fact that the inventory levels in this industry is quite high.
n) Growth
Due to the nominal returns in the industry and continued dumped imports, the domestic industry is not in a position to make any new investments for expansion. There is no scope for any FDI with such low rates of returns in a capital-intensive industry.
39. Views of exporters and importers:
Views of M/s. Monika Exim International Ltd., Pune (an importer):
Examination by the Authority:
40. The Authority has examined the information regarding various injury parameters as under:
Imports from subject countries:
The total imports from subject countries were 10272 MT in 1999-2000, 2036.11 in 2000-01 and 4406 MT during POI (9 months) or 5874 MT (annualized). Imports from subject countries grew by 188% during POI (annualized) over the previous year. There was overall decline in imports from subject countries during POI in comparison to year 1999-2000. However the share of imports from subject countries in the total imports grew to 96.45% during POI in comparison to the previous year share of 20.87% and in the year 1999-2000 of 67.75%. The Authority finds that there has been significant increase in the dumped imports from subject countries in absolute terms.
Market share:
Market share of imports from subject countries in the total demand for the subject goods has increased from 0.71% in 2000-01 to 1.67% during POI. Market share of the petitioner domestic industry in the total demand of subject goods has not declined during POI. It has increased from 38.37% during 2000-01 to 48.63% during the POI. However, the market share of imports from other countries in total demand has declined during the POI to 0.06% from 2.71% in year200-01.
Capacity Utilisation:
There has been a marginal decline of 0.66% in the capacity utilization of the domestic industry during the POI as reflected in the table below:
Year |
Capacity Utilization (%) |
1999-2000 |
76.48% |
2000-2001 |
79.09% |
April-December 2001 |
78.43% |
Annualized |
78.43% |
(Indexed)
Sales Volume:
Sales volumes of domestic industry increased from ** in 2000-01 to *** in POI. This showed an increase of about 17%over the year 2000-01.
Inventory:
The inventory of domestic industry has increased by 14% at the end of December, 2001 in comparison to the previous year closing on March, 2001.
Employment:
There has been no impact on the employment level in the domestic industry.
Wages:
There is no effect on the wages of the industry in view of the prevalent labour laws.
Profitability:
The authority finds that one of the domestic producers has made some profits while the other producer continues to make losses. Overall, the domestic industry has made some profits during the year ended March, 2002.
Return on capital employed:
The domestic industry has made some profits during the POI. However, the return on capital employed has been ***. This is considered very low considering the heavy investments of Rs.*** crores in the Float Glass Industry.
Price under selling:
The authority has compared the Non-injurious price of the domestic industry with the landed value of imports and has found that there is significant price under selling as a result of dumped imports.
China |
Indonesia |
|
NIP |
*** |
*** |
Landed value |
*** |
*** |
Under selling % |
***(+ve) |
***(+ve) |
Price under cutting:
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 product in India, or whether the effect of such imports is otherwise to depress prices to a significant degree. The Authority has compared the average net sales realization of the domestic industry with the landed value of imports and have found that there has been very significant price under cutting. The imports were having significantly suppressing/ depressing effect on the prices in the domestic market, as the domestic industry has not been able to raise its selling price in view of the dumped imports.
China |
Indonesia |
|
NIP |
*** |
*** |
Landed value |
*** |
*** |
Under cutting % |
***(+ve) |
***(+ve) |
Actual and potential negative effect on cash flows:
The domestic industry has not been able to earn even nominal returns on the capital employed. Therefore, there is a considerable impact on the cash flows of the domestic industry.
Growth:
Due to very nominal returns on the investment and continued dumped imports, the domestic industry is finding it very difficult to make any new investment for expansion.
Cumulative assessment of injury:
41. As per annexure-II (iii), in cases where imports of a product from more than one country are being simultaneously subjected to Anti-dumping investigation, the Authority is required to cumulatively assess effect of such imports, only when it determines that (a) the margin of dumping established in relation to imports from each country is more than 2% expressed as percentage of export price and the volume of the imports from each country is 3% of the imports of like article --- and (b) cumulative assessment of the effect of imports is appropriate in light of the conditions of competition between the imported article and the like domestic article. The Authority has found that the margin of dumping in respect of each of the subject country is more than 2% and the volume of imports from each country is also more than 3%. The Authority has also found it appropriate to cumulatively assess the effect of imports of the subject goods on the domestically produced like article in the light of conditions of competition between the imported products and the domestically produced goods. The Authority has found that there is a cumulative effect of injury by imports of subject goods from subject countries on the domestic industry.
G. CAUSAL LINK
42. As regards the impact of the dumped imports on the domestic industry the principle (iv) of Annexure-II of the Anti-Dumping Rules states:
"The examination of the impact of the dumped imports on the domestic Industry concerned, shall include an evaluation of all relevant economic factors and indices having a bearing on the state of the industry, including natural and potential decline in sales, profits, output, market share, productivity, return on investments or utilisation of capacity; factors affecting domestic prices, the magnitude of margin of dumping; actual and potential negative effects on cash flow inventories, employment, wages, growth, ability to raise capital investments."
Examination and Findings of the Authority:
43. The Authority has considered the views expressed by the petitioners and other interested parties as regards the causal link, which have been mentioned, in the preceding paragraphs. After examining the various economic parameters as above the Authority has come to the following conclusions:
i) There has been an increase in imports of subject goods from subject countries in absolute terms.
ii) The market share of the dumped imports from the subject countries has increased.
iii) The selling price of the domestic industry increased during the POI as compared to year 2000-01. However, the same has been below the non-injurious price (NIP) on account of dumped imports.
iv) The industry has suffered financial losses due to price undercutting by the dumped imports.
v) The domestic industry has suffered injury due to price suppression. They have not been able to raise their selling price so as to realize a fair return on the investments as the landed value of the dumped imports has considerably depressed the selling price of the domestic industry.
vi) The Authority concludes that the most significant cause of injury to the domestic industry has been the price under cutting and price under selling. As a result of lower landed value of imports of subject goods from subject countries, the domestic industry has not been able to realize a fair and reasonable price for its products. This has led to very marginal return on investment. The investments in the Float glass Industry are quite heavy and the low return achieved on the investment by the industry reflects the injury suffered by the industry.
vii) The above economic parameters cumulatively and collectively establish that domestic industry has suffered material injury on account of dumping.
H. INDIAN INDUSTRY'S INTEREST
44. 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.
45. The Authority recognizes that the imposition of anti dumping duties might affect the price levels of the user-industry using subject goods and consequently might have some influence on relative competitiveness of these products. However, fair competition on the Indian market will not be reduced by the anti dumping measures. 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 of subject goods. The Authority notes that the imposition of anti dumping measures would not restrict imports from subject countries in any way, and therefore, would not affect the availability of the product to the consumers.
I. CONCLUSIONS
46. The Authority has, after considering the foregoing, come to the conclusion that:
47. The Authority considers it necessary to impose an anti dumping duty provisionally, pending final determination, on all imports of subject goods from subject countries in order to remove the injury to the domestic industry. The margin of dumping determined by the Authority is indicated in the paragraphs above. The Authority proposes to recommend the amount of anti dumping duty not exceeding the margin of dumping or the margin of injury whichever is lesser and which if levied, would remove the injury to the domestic industry. For the purpose of determining injury, the landed value of imports has been compared with the non-injurious selling price of the petitioner companies determined for the period of investigation.
48. Accordingly, the Authority recommends that provisional anti dumping duties be imposed from the date of notification to be issued in this regard by the Central Government on all imports of ‘Float Glass of thickness 2 mm to 12 mm (both thickness inclusive) of clear as well as tinted variety (other than green glass) but not including processed glass meant for decorative, industrial or automotive purposes’ falling under Chapter Heading 70.05 of Schedule I of Custom Tariff Classification originating in or exported from Indonesia and Peoples Republic of China pending final determination. The anti dumping duty shall be as in column 4 in the following table.
S. No. (1) |
Country (2) |
Name of Exporter (3) |
Anti-dumping duty US$/MT (4) |
1. |
Indonesia |
M/s PT Mulia |
67.34 |
2. |
Indonesia |
M/s PT Tensindo |
78.99 |
3. |
Indonesia |
M/s PT Abdi Rakyat Bakti |
81.82 |
4. |
Indonesia |
All other exporters. |
81.82 |
5. |
China |
All exporters. |
82.18 |
49. Landed value of imports for the purpose shall be the assessable value as determined by the Customs under the Customs Act, 1962 and all duties of customs except duties under sections 3, 3A, 8B, 9 and 9A of the Customs Tariff Act, 1975.
J. FURTHER PROCEDURE
50. The following procedure would be followed subsequent to notifying the preliminary findings:-
L.V. SAPTHARISHI
Designated Authority