MINISTRY OF COMMERCE & INDUSTRY
DEPARTMENT OF COMMERCE
(DIRECTORATE GENERAL OF ANTI-DUMPING & ALLIED DUTIES)

No.14/1/2002-DGAD - 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. The procedure described below has been followed with regard to the investigation:

1. The Designated Authority (hereinafter also referred to as Authority), under the above Rules, received a written application from M/s Albright & Wilson Chemicals India Limited, Mumbai (hereinafter referred to as petitioner) on behalf of domestic industry, alleging dumping of Sodium Tripoly Phosphate (STPP) (hereinafter also referred to as subject goods) originating in or exported from People’s Republic of China and Chinese Taipei (Taiwan) (hereinafter referred to as subject countries).
2. Preliminary scrutiny of the application filed by the petitioner revealed certain deficiencies, which were subsequently rectified by the petitioner. The petition was, therefore, considered as properly documented.
3. The Authority on the basis of sufficient evidence submitted by the petitioner decided to initiate the investigation against imports of subject goods from People’s Republic of China and Chinese Taipei(Taiwan). The authority notified the Embassies of the subject countries in New Delhi about the receipt of dumping allegation before proceeding to initiate the investigation in accordance with sub-Rule 5(5) of the Rules.
4. The Authority issued a public notice dated 15.2.2002 published in the Gazette of India, Extraordinary, initiating Anti-Dumping investigations concerning imports of the subject goods classified under custom Code 2835.31 of Schedule I of the Customs Tariff Act, 1975 originating in or exported from subject countries.
5. The Authority forwarded a copy of the public notice to the known exporters (whose details were made available by petitioner) and gave them an opportunity to make their views known in writing within forty days from the date of the letter in accordance with the Rule 6(2):
6. The Authority forwarded a copy of the public notice to all the known importers (whose details were made available by petitioner) of subject goods in India and advised them to make their views known in writing within forty days from the date of issue of the letter in accordance with the Rule 6(2).
7. Request was made to the Central Board of Excise and Customs (CBEC) to provide details of imports of subject goods made in India during the past three years, including the period of investigation.
8. The Authority provided a copy of the petition to the known exporters and the Embassies of the subject countries in accordance with Rules 6(3) supra. A copy of the non-confidential petition was also provided to other interested parties, wherever requested.
9. The Authority sent a questionnaire to elicit relevant information to the following known exporters/producers, in accordance with the Rule 6(4):

1. M/s Sinochem Hebei Qinhuangdao Imp & Exp Corp,, Tanggu Tianjin, PR China
2. M/s Chung Chemicals SON BHD, Kuala Lumpur, Malaysia
3. M/s China Petrochemical Development Corporation, Taiwan(Taipei Economic and Cultural Centre, New Delhi was requested for forward the questionnaire to this producer in Taiwan.

x) The Embassies of the subject countries in New Delhi was informed about the initiation of the investigation in accordance with Rule 6(2) with a request to advise all concerned exporters/producers from their country to respond to the questionnaire within the prescribed time. A copy of the letter, petition and questionnaire sent to the known exporter was also sent to the Embassies of the subject countries in accordance with Rule 6(3).

xi) A questionnaire was sent to the following known importers/user associations of the subject goods for necessary information in accordance with Rule 6(4):

1. M/s Neptune Overseas Ltd., Ahmedabad
2. M/s Frank Alkanes Ltd., Chennai
3. M/s Megavisa Marketing & Solution Ltd., Mumbai
4. M/s Nikiraj Industrial Impex (Pvt. Ltd., Mumbai
5. M/s Chemi Pharma, Madras
6. M/s Gormal Agriram Ltd., Noida
7. M/s Pee Cee Soap & Chemicals Ltd., Malanpur
8. M/s Pee Cee Soap & Chemicals Ltd., Agra
9. M/s Hindustan Lever Limited, Mumbai

xii) Extension of time for filing the response to the Initiation notification was granted to all the interested parties upto 19th April, 2002.

xiii) Response/information to the questionnaire/notification was filed by the following exporters/producers:-

1. M/s Yunnan Chengjiang Phosphate Chemical Industry General Company, PR China
2. M/s Chongqing Chuandong Chemical(Group) Company Limited, PR China
3. M/s Chung Chemical SDN BHD, Malaysia (exporter for producer at SI. No.2 above)

Response/information to the questionnaire/notification was filed by the following importers/user Associations.

1. M/s Neptune Overseas Ltd., Ahmedabad

2. M/s Chemi Pharma, Madras

xiv) 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 as per Rule 6(7).

xv) Cost investigation was also 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) and the information furnished by the petitioner.

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

15. Investigation was carried out for the period starting from Ist April, 2000 to 30^th June., 2001 i.e. the period of investigation (POI).

1. PRODUCT UNDER CONSIDERATION

• Purification of Phosphoric Acid.
• Precipitation of sodium silicon fluoride and separation by filtration.
• Neutralization and treatment of heavy metal to give dilute sodium orthophosphate
• Concentration of dilute orthophosphate solution.
• Drying and calcination.
• Cooling.
• Grinding.

1. Yellow Phosphorous route: Yellow Phosphorous is burnt to produce P2O5, which, is then absorbed as phosphoric acid. This is of high purity, which on neutralization directly produces pure orthophosphates, which are dried and calcined to produce STPP. In the Thermal Process, first an electric arc furnace is used to reduce the Rock Phosphates to Elemental (Yellow) Phosphorus.
2. Solvent Extraction Process: Solvent extraction process is again aimed to produce pure phosphoric acid from the acid produced in wet process with the help of suitable organic solvents which directly neutralized to produces pure orthophosphates which are dried and calcined to produce STPP. The investment involved in setting up a Solvent Extraction plant is significantly higher than the plants set up for manufacturing STPP by the other 2 processes.

(vii) STPP falls under Chapter 28 of the Custom Tariff Act. (Custom Head 2835.31). Various duties of Customs on import of STPP are 35% Basic, 16% CVD and 4% SAD. STPP has been under OGL at least for the last three years.

b) STANDING OF THE DOMESTIC INDUSTRY

c) LIKE ARTICLE

500. DUMPING

The above prices are CIF prices. According to the Anti DumpingProvisions and GATT Agreement on Anti Dumping, the comparison between the normal value and the export price should be done at the same level of trade, preferably at ex factory level. Therefore for arriving at ex-factory export price, adjustments on ocean freight, marine insurance, commission, inland transportation and port charges have to be made from the CIF export price.

e) INJURY & CAUSAL LINK

(i) Details of Import of STPP– from China are as under:-

(ii) Details of Import of STPP – from Chinese Taipei are as under:-

(iii) Details of Import of STPP from Other than PR China & Chinese Taipei are as under

For the period April 1998 To March 1999

 (iv) For the period April 1999 To March 2000

The volume of imports have not succeeded in capturing a large chunk of the Indian market, the only reason why this has not taken place is that the domestic Indian Industry has reduced its prices drastically. Given the fact that China is the single largest producer of STPP in the world, with substantial excess capacity, it is unlikely that the Petitioner and the other constituents of the Domestic Industry will not be able to sustain this price erosion much longer.

(v) Details of Import of STPP from countries other than China & Chinese Taipei

For the period April 2000 To June 2001 (During POI)

(vi)The exporters from China and Chinese Taipei are dumping in the Indian market. Annexure II (iii) to the Anti Dumping Rules provide that in case imports of a product from more than one country are being simultaneously subjected to anti dumping investigations, the Designated Authority will cumulatively assess the effect of such imports, in case it determines that:

The margin of dumping established in relation to the imports from each country is more than two percent expressed as percentage of export price and the volume of the imports from each country is three percent of the imports of the like article or where the export of the individual countries less than three percent, the imports cumulatively accounts for more than seven percent of the imports of like article.

(vii)The Cumulative assessment of the effect of imports is appropriate in light of the conditions of competition between the imported article and the like domestic articles.

(viii)The margins of dumping from each of the subject country are more than the limits prescribed above, as may be seen from the previous sections. The quantum of imports from each of the subject country is more than the de-minimus limits, considering both volume and value of imports. Cumulative assessment of the effects of import is appropriate since the export from the subject countries directly compete with the goods offered by the domestic industries in the Indian market. The authority is therefore, requested to assess injury to the domestic industry cumulatively from the subject counties.

(ix)The imports of STPP from the subject countries have increased in absolute terms.

1. Details of Import of STPP from Subject Countries are as under:-

As regards the Causal Link, the petitioner has submitted the following:-

1. PRODUCT UNDER CONSIDERATION AND STANDING OF THE DOMESTIC INDUSTRY

(i) The production of M/s Hind Lever Chemicals Ltd. (HLCL) is as under:-

2. The merchant sales figures of M/s Albright & Wilson Chemicals

India Ltd. are larger than M/s HLCL sales to this segment in India.

3. The long-term viability of the industry would be seriously endangered if artificially low priced Chinese/Taiwanese STPP continue to put pressure on the domestic selling prices.
4. Quality of STPP manufactured in India meets the international standards and the domestic capacity of STPP is more than adequate to meet the requirement.

The importer has provided the details of imports made during the POI of the subject goods in PR China.

2. M/S HINDUSTAN LEVER LIMITED

STPP is used as an input material for the manufacture for detergent products. As the quality and availability of locally produced STPP is very goods, we have not imported any STPP from either People’s Republic of China or Chinese Taipei (Taiwan) during the investigation except 25 MT purely for trial purpose from People’s Republic of China.

a) STANDING OF THE DOMESTIC INDUSTRY

1. M/s Albright & Wilson Chemicals India Ltd. do not have the standing to file the petition. There is a variance in the data provided by the petitioner and the initiation notification since in the initial notification it is said that petitioner accounts for 25% of the total production whereas it is mentioned that 75% of the sales made by M/s Hind Lever Chemicals Ltd (HLCL) are within the group.
2. A thorough verification of M/s HLCL should be done regarding the parameters on production, proportion sold to M/s Hindustan Lever Ltd. (HLL), relationship of M/s Hindustan Lever Ltd. and M/s Hind Lever Chemicals Ltd. in reference to legal entity, wholly owned subsidiaries, mutual share holding pattern, commonality of shareholders, share of profits etc.
3. The decision in respect of Pig Iron & Manufacturers Association reported in 2000 (116) ELT, 67 does not apply in this case since the production of M/s HLCL has not been consumed by itself but by three categories of consumers.
4. M/s Hindustan Lever Ltd. has about 50% share holding in M/s HLCL and there is no share holding of M/s HLCL in M/s HLL. Therefore M/s HLCL has no control over M/s HLL. The two cannot be said to be related for the purpose of captive consumption.
5. There is no captive consumption by M/s HLCL as contended in the petition and therefore petitioner cannot be considered to have a major proportion of the total production of the said goods in India.
6. The petitioner is related to M/s Rhodia group of companies and it provides agency services to the holding companies in connection with sales to their producers in India. M/s Rhodia has 13 foreign offices in China and the petitioner should be excluded on this account.

The above views have also been submitted by M/s Neptune Overseas Limited, Ahmedabad and M/s Chongqing Chuandong Chemical(Group) Company Limited, PR China

b) DUMPING

1. The producer/exporter has provided information on the domestic sales of STPP during the POI and the export sales to India during the POI.
2. The producer/exporter have also provided cost of production and the installed capacity during the POI.
3. The producer/exporter have indicated that there is no subsidy for supply of utilities like water, power etc. and the same rate is charged to all industrial users and the power charged is at commercial rates.
4. The VAT on the raw materials used in the manufacture of finished product is refunded in case of exports whereas in case of local sales, the VAT on raw materials is set off against the VAT on the final products.

c) OTHER ISSUES

1. The petitioner does not account for a major proportion of the total domestic production of STPP in India and therefore the initiation under Section 9A and 9B read with Rule 2 and 5 is without jurisdiction. Also initiation lacks jurisdiction as the petitioner himself is an importer and should be excluded from the definition of domestic industry.
2. In the public notice/initiation notification adequate information has not been provided and that adjustments have been kept confidential to arrive ex-factory export price which is based on a public data obtained from Directorate General of Commercial Intelligence & Statistics (DGCI&S). Also the basis on which the cost of production of the subject goods have been determined have also not been provided to us. Since the cost of production in PR China is a notional cost estimated by the petitioner, it cannot be kept confidential, it is only an estimate.
3. The anti dumping duty as asked for by the petitioner would result in a burden of about Rs.450 crores on the user industry comprising of detergent and ceramic tiles manufacturers which are essential items being used by common man and construction of houses and it would finally result in a burden of more than Rs. 450 cores on the public at large.

The above views have also been submitted by M/s Neptune Overseas Limited, Ahmedabad and M/s Chongqing Chuandong Chemical(Group) Company Limited, PR China

4. INJURY

1. It has been stated that there is price undercutting resulting in loss of profitability and this has caused material injury. It has also been stated that there are disposable capacities in subject countries which indicate imminent threat of injury. In the application no evidence of price undercutting has been indicated.
2. It is submitted that no a single figure has been provided for sales volume, the selling prices of petitioner and how it compares with landed value. In the absence of any disclosure, in this regard it has not been established that their exists material injury on account of dumping.
3. The landed values of exporters from China is not a causal factor for injury to petitioner. China has an abundance of rock phosphate and other natural miners on account of which its raw material cost may be lower than that in India. The lower cost of the exporters in China cannot be seen as a phenomenon of dumping or injury. In fact it is a legitimate cost advantage which cannot be considered as dumping.
4. The petitioner is a multi-product company and it is not clear whether the poor financial performance is on account of imports or the lack of profitability in sales of other items.
5. Cost of production of petitioner is high on account of insufficiencies as there has been restructuring of human resources and pending of Rs.5.6 crores on voluntary retirement scheme declared by the petitioner.
6. There is no causal link between the exports and injury, if any, to the petitioner since the petitioner does not represent the domestic industry.

The above views have also been submitted by M/s Neptune Overseas Limited, Ahmedabad and M/s Chongqing Chuandong Chemical(Group) Company Limited, PR China

a) LIKE ARTICLE

The exports made to India are of different grade for use in ceramic industry which may not be interchangeable with that used in various manufacturing and different processes

b) DUMPING

1. Our Malaysian buyer has started exporting some quantity of our STPP to India in the recent past from 1.4.2001. The relevant information being large and substantial, it would need considerable time to properly assimilate the data from the books of records of last 4 years with appropriate cross-verification of each data with the documentary data lying with our old records. Moreover the records are in Chinese which need to properly translated.
2. Our firm and other firms in China in manufacture of STPP are operating on market principles on costs and pricing structure and that this reflects fair value in accordance with the decisions regarding price, cost and inputs, raw materials, cost of labour, output, sales and investments and are made in response to market signals reflecting supply and demand and without State interference.
3. Our records are in accordance with the Generally Accepted Accounting Principles and these reasonably reflect the costs associated with production and sales of the product.
4. Sales prices is higher than the domestic price and the export price to third countries for STPP.
5. The producer/exporter has provided details of the sales made in the domestic market and that exported to India. The producer/exporter has also provided the cost of production of the subject goods.
6. The exporter from Malaysia M/s M/s Chung Chemical SDN BHD, Malaysia has provided the details on exports made and the domestic sales in Malaysia.

c) INJURY

The dumping of the subject goods is increasing significantly and total imports of STPP in India has increased during the POI but the share of China in total imports has decreased during the POI.

The foregoing submissions made by the exporters, importers and the petitioner, to the extent these are relevant as per Rules and have a bearing upon the case, have been examined, considered and dealt with at appropriate places in these findings.

1. PRODUCT UNDER CONSIDERATION

The product under consideration in the present investigation is Sodium Tripoly Phosphate (STPP) originating in or exported from People’s Republic of China and Chinese Taipei (Taiwan). STPP has various types viz. regular, normal temperature, high temperature rise, granular and hydrated. STPP in the regular form is a powdery product used in the Detergent and Ceramic industry. The use of STPP in detergents improves detergency by chelation of Ca++ and Mg++ ions thereby softening the water and preventing them from re-deposition on the fabric. In Ceramic industry, STPP is primarily used for deflocculation of the Ball Clay which is a raw material for manufacture of ceramic tiles. The chemical nomenclature of STPP is a5 P3010. STPP can be produced by yellow phosphorous route and the extraction process.

STPP is classifed under Chapter 28 of the Customs Tariff Act, 1975 under Customs Head 2835.31. The classification, is however, indicative only and is in no way binding on the scope of the present investigation.

STPP can be imported under OGL and attracts a basic customs duty of 35%. The present investigation covers all forms of STPP.

2. LIKE ARTICLE

The Authority notes that the petitioner has claimed that they can produce all types and grades of STPP. The petitioners have also claimed that there is no difference of the STPP produced by the industry and that exported from the subject countries which can have impact on price. STPP produced in the Indian industry and imported from the subject countries is comparable on all the relevant parameters such as physical and chemical characteristics, manufacturing process, technology functions and use. The two are technically and commercially substitutable and the consumers have used the two interchangeably. The petitioners have also indicated that they are not aware of the production process employed by the exporter and that they manufacture STPP from Phosphorous route and Soda Ash/Caustic Soda mode which is employed by most of the producers. The Authority also notes that one of the of the exporters viz. M/s Chongqing Chuandong Chemical (Group) Company Limited, PR China have indicated that they are exporting a different grade for use in ceramic industry which cannot be interchangeable for use in detergent manufacturing and that it has a different process having different cost of production/manufacturing.

The Authority notes that the submissions made by both the petitioner and exporters and observes that the petitioner is capable of producing various types of STPP including the grade used for the ceramic industry also. Therefore the goods exported by the exporter are like article to the goods manufactured by the petitioner and both can be interchangeably used by the user industry. The Authority, therefore, for the purpose of preliminary determination pending final determination holds that the goods produced by the domestic industry and those exported from the subject countries are like article within the meaning of the Rule 2(d).

3. DOMESTIC INDUSTRY

The petition has been filed by M/s Albright & Wilson Chemicals India Limited, Mumbai on behalf of the domestic industry. The goods are also produced by M/s Hind Lever Chemicals Ltd. (HLCL) which is claimed to be within the group of M/s Hindustan Lever Limited (HLL). The Authority notes from the submissions made by M/s HLCL that out of their total production of 54555 MT of STPP in the Period of Investigation, 42934 MT of STPP has been sold by M/s HLCL to M/s Hindustan Lever Ltd. and to its processors and whereas only 13737 MT have been sold in the merchant market.

The Authority notes that some of the interested parties have submitted that the petitioners are related to Rhodia group of companies in PR China and that they have also imported the subject goods during the POI. The Authority notes that the exporter while forwarding this argument has not provided any specific evidence or parameter of the relationship of the domestic industry with the exporters in PR China. The Authority notes that the petitioners have also submitted that the Rhodia group in PR China is not in the STPP business and have no relationship with any of the STPP producers/exporters in PR China or Taiwan.

The Authority in view of no evidence being made available by the exporters on the issue of relationship of petitioners with exporters in PR China for the purpose of preliminary findings pending final determination holds that the petitioners on this account to represent the domestic industry within the meaning of Rule 2(b).

 The Authority also notes that the petitioners have imported *** MT of subject goods in POI which constitute a miniscule percentage (in fact less than 0.2%)of their total production in POI. The Authority holds that such miniscule imports are only for test purposes and not for commercial purposes and therefore on this account also holds that the petitioners satisfy the condition of the domestic industry as per Rule 2(b).

The Authority notes the submissions made by various interested parties contesting the issue of exclusion of sales of M/s Hind Lever Chemicals Ltd. to M/s Hindustan Lever Limited on account of treating these as captive consumption. The Authority notes that M/s HLL holds 50% of the shares of M/s HLCL. Also M/s HLCL have also indicated that long term viability of the domestic industry would suffer on account of dumping. The Authority after noting the above submissions holds that the petitioners have the requisite standing to file the petition and also represent the domestic industry as per Rule 5 (3) (a) and (b) and Rule 2(b) of Anti Dumping Rules.

Under Section 9A(1)(c), normal value in relation to an article means:

Provided that in the case of import of the article from a country other than the country of origin and where the article has been merely transshipped through the country of export or such article is not produced in the country of export or there is no comparable price in the country of export, the normal value shall be determined with reference to its price in the country of origin.

The Authority also notes the amended Anti Dumping Rules as notified vide Notification dated 15.7.99, 31.5.. 2001 and 4.1.2002 as also indicated in the Initiation Notification.

The normal value and ex-factory export price determination is illustrated below.

The Authority notes that the producer has provided the details on the sales of the subject goods during the Period of Investigation in the home market and have indicated that the domestic selling prices includes a VAT at the rate of ****%. The producer has also provided details on the installed capacity and cost of production of the subject goods in the Period of Investigation. The Authority notes that it has been mentioned by the producer that the firms in PR China in the field of manufacturing of STPP are operating on market principles of cost and pricing structure and that the subject goods reflect a fair value in accordance with the decisions regarding prices, costs and inputs including raw material, cost of labour, output, sales and investments which are made in response to market signals reflecting supply and demand and with no state interference. However the producer has also indicated that evidence on this would be submitted after the data is properly assimilated. The producer has also indicated that their records are in accordance with the Generally Accepted Accounting Principles. The Authority notes that as per Anti Dumping Rules as amended vide Notifications dated 15.7.99, 31.5.2001 and 4.1.2002, the exporting country would be presumed to be a non-market economy if the same has been treated as a non-market economy for the purpose of an anti dumping

investigation of the Designated Authority or by the competent authority of any WTO member country during the three years period preceding the investigation. Also in order to rebut such a presumption, the information and evidence pertaining to the following have to be provided by the exporting countries:

(i) the decisions of the concerned firms in such country regarding prices, costs and inputs, including raw materials, cost of technology and labour, output, sales and investment, are made in response to market signals supply and demand and without significant State interference in this regard, and whether costs of major inputs substantially effect market values;

(ii)the production costs and financial situation of such firms are subject go significant distortions carried over from the former non-market economy system, in particular in relation to depreciation of assets, other write offs, barter trade and payment via compensation of debts;

(iii)such firms are subject to bankruptcy and property laws which guarantee legal certainty and stability for the operation of the firms; and

(iv)the exchange rate conversions are carried out at the market rate.

The Authority notes that in cases of exports of Steel concrete reinforcing bars, by PR China to USA dated 22.6.2001, exports of Bicycles by China to EU dated 30.6.2001 and exports of non-frozen apple juice concentrate by China to EU dated 13.4.2000, PR China has been treated as a non-market economy. The submissions made by the exporter on market economy have not been substantiated and therefore on the basis of the submissions made, the Authority does not propose to treat China as a market economy in respect of the case under consideration. Therefore for the purpose of the preliminary determination pending final determination, the Authority proposes to consider China as a non-market economy in respect of the subject goods under investigation and proposes to construct the normal value on the basis of the cost of production details made available by the petitioner with appropriate adjustments. Instead of the domestic selling prices as provided by the exporter, the Authority has adjusted the major raw material costs at the international prices levels (which by and large also correlates with the data given by the exporter), and have normated the other cost elements including fixed costs by benchmarking best practices on consumption and capacity utilisation.

The Authority for the purpose of preliminary determination pending final determination has considered normal value as ****$/PMT.

The Authority notes that the producer has indicated that the subject goods manufactured by them have been exported to India by their Malaysian buyer since Ist April, 2001. The Authority notes that M/s Chung Chemicals SDN BHD, the exporter from Malaysia has also provided the details of the sales made by them. However the sales made by the Malaysian exporter have not been specifically indicated to have been made to India. The statement on exports does not categorically indicate that it is exclusively to India. Moreover the same does not co-relate with the information provided by the producer that exports to India have started only from 1.4.2001 since the invoices itself provided by the exporter in Malaysia are even for the year 2000. The Authority on the basis of the response filed by one of the importers M/s Neptune Overseas Limited, Ahmedabad notes that a few transactions indicated by M/s Neptune Overseas Ltd. of imports from Malaysia of the subject goods co-relates that the information as provided by the exporter from Malaysia. The Authority in view of this has considered the CIF export price of the subject goods during the Period of Investigation on the basis of the response given by the importer as also co-related of the data given by M/s Chung Chemicals SDN BHD, the exporter from Malaysia. In order to determine the ex-factory export price, the Authority notes the details of adjustments as provided by the producer from PR China who has indicated that they have exported about 300 MT to India during the Period of Investigation and have also indicated adjustments on packing, inland freight, insurance, , storage, handling, sales charges, overseas freight, overseas insurance, clearance and handing and port charges to an extent of ****, ****, ****, ****, ****, ****, ****, ****, **** and **** $/MT respectively. The Authority for the purpose of preliminary determination has considered the adjustments as claimed by the producer except that claimed on storage which has not been considered for ex-factory export price evaluation.

The ex-factory export price on the basis of the weighted average CIF and the adjustments as indicated above comes to ****$/MT.

The Authority notes that the producer has provided the details on the domestic sales of the subject goods during the Period of Investigation indicating the extent of VAT included in the domestic sales. The ex-factory domestic selling prices have been indicated as ****$/PMT. The Authority notes that China has been treated as a non-market economy in an investigation in respect of exports of Steel concrete reinforcing bars, by PR China to USA dated 22.6.2001, exports of Bicycles by China to EU dated 30.6.2001 and exports of non-frozen apple juice concentrate by China to EU dated 13.4.2000, Also the exporter has indicated that there is no subsidy for the supply of utilities like power, water, etc. and that the rate charged to all the industrial users is at the commercial rate. However in respect of the four parameters as indicated above the arguments have not been extended in respect of the claims to be treated as the market economy. Therefore for the purpose of the preliminary determination pending final determination, the Authority proposes to consider China as a non-market economy in respect of the subject goods under investigation and proposes to construct the normal value on the basis of the cost of production details made available by petitioner with appropriate adjustments instead of the domestic selling prices provided by the producer. The Authority has adjusted the major raw material costs at the international prices levels, and have normated the other cost elements including fixed costs by benchmarking best practices on consumption and capacity utilisation.

The Authority for the purpose of preliminary determination pending final determination has considered normal value as ****$/PMT.

The Authority notes that no adjustments on the various elements have been provided in the prescribed format. The Authority in event of non-availability of the adjustments considers it appropriate to reference the adjustments on the ocean freight, ocean insurance, commission, inland transportation, port handling and port charges as indicated by the petitioners and as also correlated with the data on adjustments provided by the other cooperative exporter. The adjustments have been considered to an extent of ****, ****, ****, ****, ****, **** and **** $/MT respectively.

The ex-factory export price comes to ****$/PMT.

C.ASSESSMENT OF NON-COOPERATING PRODUCERS/EXPORTERS FROM PR CHINA

For the non-cooperating producers/exporters other than M/s Chongqing Chuandong Chemical (Group) Company Limited and M/s Yunnan Chengjiang Phosphate Chemical Industry General Company from PR China, the Authority proposes to consider the constructed normal value. For the non-cooperative exporters, the Authority has considered the ex-factory export selling prices on the basis of weighted average CIF prices on the basis of the Directorate General of Commercial Intelligence & Statistics (DGCI&S) data after appropriately adjusting the export prices of the cooperating exporters and adjustments as indicated by the petitioner and correlated with the data given by the cooperating exporters. The normal value and ex-factory export price are referenced as *** $/MT and *** $/MT respectively.

The Authority notes the response of Embassy of Taiwan, New Delhi who have intimated that there are no producers/ exporters in Taiwan exporting STPP to India. The Authority in view of these submissions notes that the Rule 22 of Anti Dumping Rules enables an exporter who has not been originally investigated to seek a new shipper review. The Authority, however, notes that the DGCI&S data indicates exports from Taiwan and that there is no response from any producers/exporters from Taiwan.

The Authority therefore for the purpose of preliminary determination pending final determination proposes to construct the normal value for all producers/exporters in Chinese Taipei on the basis of the cost of production details as provided by the petitioner duly normating the same on the basis of best practices of capacity utilisation and raw material utilisation and also by referencing the international prices for the major raw materials.

The Authority has therefore for the purpose of preliminary determination pending final determination has referenced the normal value as ****$MT for the subject goods in Taiwan in the Period of Investigation.

The Authority notes that as per the DGCI&S data, the CIF export price from Chinese Taipei have been indicated as ****$/MT. The Authority notes that in event of no response from the producers/exporters of Chinese Taipei, the Authority proposes to reference the adjustments on various elements like ocean freight, ocean insurance, commission, inland freight and port expenses to an extent of ****, ****, ****, **** and **** $/MT respectively on the basis of the information provided by the petitioner, and on basis of best available information. The ex-factory export price is referenced as *** $/MT.

5. DUMPING-Comparison of Normal Value & Export Price

The rules relating to comparison provides as follows:

"While arriving at margin of dumping, the Designated Authority shall make a fair comparison between the export price and the normal value. The comparison shall be made at the same level of trade, normally at ex-works level, and in respect of sales made at as nearly possible the same time. Due allowance shall be made in each case, on its merits, for differences which affect price comparability, including differences in conditions and terms of sale, taxation, levels of trade, quantities, physical characteristics, and any other differences which are demonstrated to affect price comparability."

The authority has carried out weighted average normal value comparison with the weighted average ex-factory export price in Period of Investigation, for evaluation of the dumping margin for all the exporter/producers of the subject countries.

The dumping margin for exporter/producers comes as under:

Under Rule 11 supra, Annexure-II, when a finding of injury is arrived at, such finding shall involve determination of the injury to the domestic industry, "…..taking into account all relevant facts, including the volume of dumped imports, their effect on prices in the domestic market for like articles and the consequent effect of such imports on domestic producers of such articles…." In considering the effect of the dumped imports on prices, it is considered necessary to examine whether there has been a significant price undercutting by the dumped imports as compared with the price of the like article 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.

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

As regards the threat of injury, the Authority notes that the Anti-Dumping Rules states as follows:

"A determination of a threat of material injury shall be based on facts and not merely on allegation, conjecture or remote possibility. The change in circumstances, which would create a situation in which the dumping would cause injury, must be clearly foreseen and imminent. In making a determination regarding the existence of a threat of material injury, the DA shall consider, inter-alia, such factors and;

1. a significant rate of increase of dumped imports into India indicating the likelihood of substantially increased importation;
2. sufficient freely disposable or an imminent, substantial increase in capacity of the exporter indicating the likelihood of substantially increased dumped exports to Indian market, taking into account the availability of other export markets to absorb any additional exports;
3. whether imports are entering at prices that will have a significant depressing or suppressing effect on domestic prices, and would likely increase demand for further imports; and,
4. inventories of the article being investigated.

The Authority notes and observes the following economic parameters: in the case of domestic industry:-

1. The domestic sales has increased from 16151 MT in 1998-99 to 17881 MT in 1999-2000 and but decreased in POI to 16150 (Annualised)
2. The capacity utilisation has increased from 69% in 1998-99 to 76% in 1999-2000 and thereafter reduced to 65% in POI.
3. The production has increased from 17280 MT in 1998-99 to 18984 MT in 1999-2000 but decreased to 16216 MT in POI (Annualised)
4. The imports of the subject goods have increased from 386 MT in 1998-99 to 522 MT in 1999-2000 and further to 1883 MT in POI (Annualised 1506 MT). The imports from PR China has been incresed from 294 MT in 1998-99 to 322 MT in 1999-2000 and further to 913 MT in POI (Annualised 732 MT). The imports from Chinese Taipei in 1999-99 and 1999-2000 were nil which have increased to 106 MT in POI (Annualised 85 MT). The Authority notes that the DGCI&S data indicates imports from Taiwan as 106 MT in the Period of Investigation whereas Embassy of Taiwan, New Delhi have indicated that there has been no exports from Chinese Taipei. The Authority notes that the DGCI&S data indicates imports as mentioned above and therefore for the purpose of preliminary determination pending final determination, the Authority has considered imports from Taiwan as above the deminimis level.
5. The imports of subject goods from PR China and Taiwan in POI have been above the de-minimis level.
6. The market share of the petitioner has decreased from 58.7% in 1998-99 to 57.24% in POI thus evidencing volume effect. The market share of PR China and Taiwan have increased from .98% and 0% in 1998-99 to 2.55% and .02% in POI respectively.
7. The Authority notes that the exporters in PR China have sufficient disposable capacity of STPP and with the present price undercutting in the domestic market due to dumped subject goods, the exports from PR China are an imminent threat to the domestic producers of the subject goods in India.
8. The demand of the subject goods has been 30045 MT in 1998-99 and 35816 MT in POI (Annualised 28652 MT) and therefore demand has not been a factor causing injury to the Domestic Industry. Also while evaluating NIP, the cost of production data of the subject goods in the POI for the petitioner has been normated in terms of best utilisation norms of raw materials, utilities and capacity utilisation thereby eliminating any inefficiencies in the manufacturing process who could also be a cause of injury to the petitioner.

The above factors collectively and cumulatively indicate that the dumped imports have kept the domestic prices depressed in the Indian market thereby causing injury to the Domestic Industry by way of market share, production and loss of sales.

The Authority holds that the purpose of anti-dumping duties, in general, is to eliminate injury caused to the Domestic Industry by the unfair trade practices of dumping so as to re-establish a situation of open and fair competition in the Indian market, which is in the general interest of the country.

The Authority also recognises that though 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 these anti-dumping measures. On the contrary, imposition of anti-dumping measures would remove the unfair advantages gained by the dumping practices and would prevent the decline of the domestic industry and help maintain availability of wider choice of the subject goods to the consumers. Imposition of anti-dumping measures would also not restrict imports from the subject country in any way, and, therefore, would not affect the availability of the products to the consumers.

8. LANDED VALUE

The landed value of imports for the purpose shall be the assessable value as determined by the customs under Customs Tariff Act, 1962 and applicable level of custom duties except duties levied under Section 3, 3A, 8B, 9, 9A of the Customs Tariff Act, 1975.

4. CONCLUSIONS:

1. The subject goods in all forms originating in or exported from the subject countries have been exported to India below its normal value.
2. The domestic industry has also suffered material injury by way of financial losses due to depressed Net Sales Realisation (NSR) on account of price depression caused by low landed prices of the dumped subject goods.
3. The injury has been caused to the domestic industry by dumping of the subject goods originating in or exported from the subject countries.
4. The Authority recommends anti-dumping duty on imports of subject goods falling under Chapter 28 originating in or exported from the subject countries.
5. It was considered to recommend the amount of anti-dumping duty equal to the margin of dumping so as to remove the injury to the domestic industry accrued on account of dumping. Accordingly, it is proposed that provisional anti dumping duties equal to the difference between the reference amount in Column 3 below and the landed value be imposed, from the date of notification to be issued in this regard by the Central Government, on all imports of subject goods originating in or exported from People’s Republic of China and Chinese Taipei under Chapter 28 Customs sub-heading 2835.31, pending final determination.

In event of M/s Chongqing Chuandong Chemicals (Group) Company Limited, PR China exporting directly or through any other exporter, it would fall under category at SI. No. 3 as indicated above.

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 from the date of the despatch of the letter. 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 conduct verifications to the extent deemed necessary;
4. The Authority would provide opportunity to all interested parties for oral submissions, for which the date and time shall be communicated to all known interested parties separately;
5. The Authority would disclose essential facts before announcing final findings.

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