NOTIFICATION NO. 14/40/2002-DGAD DATE 21/11/2003

Anti-dumping investigation concerning imports of Borax Decahydrate originating in or exported from the Turkey and China PR
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:

1. The following procedure has been followed with regard to the subject investigation:

i) The Designated Authority (herein after referred to as Authority), under the Rules, received fully documented and revised petition from M/s Borax Morarji, Mumbai for and on behalf of domestic industry, alleging dumping of Borax Decahydrate originating in or exported from China PR and Turkey. The petitioner in their earlier petition alleged dumping from USA as well; however, the domestic industry could not substantiate import volume as well as dumping above de-minimus limits with regards to imports from USA.

ii) The Authority issued a public notice dated 25th November 2002 published in the Gazette of India, Extraordinary, initiating anti dumping investigations concerning imports of Borax Decahydrate originating in or exported from China and Turkey (hereinafter also referred to as subject countries) and classified it underheading 284019 of the-Custom Tariff Act.

iii) The Authority forwarded copy of the initiation notification, non-confidential petition filed by the domestic industry and questionnaire Proforma to known exporters, importers and embassy of subject country in India requesting them to advise the producers and exporters in their country to respond to the initiation notificationin the prescribed Proforma within the time limits prescribed.

iv) M/s ETI Bor, along with their holding company M/s. ETI Holdings, Turkey along with their exporter M/s. Borochemie International and M/s. Dashiqiao Huaxinchemie Co., China PR with their exporter M/s. Dalian Chem Import & Export Company Limited, China PR have responded the Authority from amongst the exporters to whom Exporters Questionnaire have been sent. The Embassy of China PR and Turkey, in NewDelhi 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. None of the exporters and producers other than those mentioned above has responded to the exporter's questionnaire and to the petition.

v) The Authority issued a public notice (Preliminary Findings) dated 26th March 2003 published in the Gazette of India, Extraordinary, recommending imposition of Anti Dumping Duty provisionally pending further investigation.

vi) The Authority forwarded a copy of the preliminary findings to the known interested parties who were requested to furnish their views, if any, on the preliminary findings within forty days of the date of the letter;

vii) None of the users/ importers has responded the importer questionnaire. However, some of the users/importers have submitted their views, which have been analysed in the appropriate headings.

viii) The Authority also forwarded a copy of preliminary findings to the Embassies of China and Embassy of Turkey, New Delhi with a request that exporters and producers in their country may be advised to furnish their views on the preliminary findings.

ix) The Authority provided an opportunity to all interested parties to present their views orally during 3rd July 2003. All parties presenting views orally were requested to file written submissions, of the views expressed orally. The parties were advised to collect copies of the views expressed by the opposing parties and offer rebuttals, if any.

x) Arguments raised by the interested parties before announcing the preliminary findings, which have been brought out in the preliminary findings notified have not been repeated herein for sake of brevity.

However, the arguments raised by the interested parties are being considered in Final Findings.

xi) Domestic verification as well as exporters verification of the data submitted by them were undertaken by the Authority.

xii) In accordance with Rule 16 of The Rule supra, the essential facts/ basis considered for these findings were disclosed to known interested parties on 31st October 2003 and comments received on the same 'are duly considered in Final Findings.

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

xiv) The Authority also conducted cost investigation and worked out optimum cost of production/ cost to make and sell in India on the basis of Generally Accepted Accounting Principles.

xv) The investigation covered the period 1st January 2002 to 30th September 2002 (9 Months)

xvi) Copies of initiation notice were also sent to FICCI, CII, ASSOCHAM etc., for wider circulation.

Product under Consideration and Like Article

2. Submissions by the Domestic Industry

The Product under consideration in the present investigation is Borax Decahydrate also known as Borax or Di-Sodium Tetra Borate Decahydrate. It is an inorganic chemical. It is produced in Technical and IP grades. It is produced in various physical forms such as granules, crystal and powder. Borax Decahydrate is classified under Chapter 28 of theCustoms Tariff Act. It is used in glass, textiles, leather, adhesives, detergents, polishes, ceramics etc. The information already on record shows that the subject goods are being cleared under other custom subheadings also. It is therefore, requested that the Anti Dumping duties may please be imposed on the subject goods irrespective of customs subheading. Further, the product is sold in the name of Sodium Borate also. Since Sodium Borate is nothing but Borax Decahydrate, it is requested that it may kindly be clarified in the final findings that anti dumping duty appliesto Sodium Borate also. Further, since the product can be imported as Sodium Borate, Crude Sodium Borate or Borex Decahydrate, it is requested that anti dumping duty may kindly be recommended on "Crude Sodium Borate" "Borax Decahydrate" or "Sodium Borate" irrespective of its custom classification.

3. Borax Decahydrate can be produced using Borax Pentahydrate, Tincal, Kernite or Ulexite as the starting raw material. Whatever be the starting raw material used, the technology is largely similar. Manufacturing process is also more or less similar, except that the product falls through short manufacturing process in case the raw material used is Borax Pentahydrate, whereas the process is fairly longer in case the raw material used is Ulexite.

4. As regards like article there is no significant difference in Borax Decahydrate reduced by the domestic industry and imported from subject countries. Borax Decahydrate produced by the domestic industry and imported from subject countries are comparable in terms of physical characteristics, functions and uses, specifications, distribution andmarketing, pricing and tariff classification of goods. The consumer can use and are using Borax Decahydrate imported from the subject countries and Borax Decahydrate produced by the domestic industry interchangeably.

5. The exporter from Turkey has raised issue of difference in the technology. They submit that the difference in the technology adopted or difference in starting raw materials does not render the two products different. The product still remains like article within the meaning of the Rules. This is established by the fact that the two products are being technically and commercially substituted by each other. As regards the argument of some cost advantage in the natural process, the same is relevant for the purpose of dumping and does not render the product as unlike product.

Nor the issue is relevant for the purpose of injury

It is also relevant to point out that the Hon'ble Designated Authority and CEGAT has already held in a number of investigations that the domestic industry must be seen as it exists. It can not be seen under ideal conditions. We request the Designated Authority to confirm the preliminary finding in this regard.

Submissions by M/s Dalian Chem, China

6. The Hon'ble DA has wrongly noted that the present Investigation is against the product under consideration irrespective of the classification under which it is imported. Dalian states that it is unable to concur with the Hon'ble DA's views as the same is not consistent with the concept of Like Article and by taking the aforesaid view, the Hon'ble DA is broadening the scope of the present Investigation to cover Unlike Articles also. Further the Hon'ble DA has grossly erred in coming to the conclusion that Customs classification is only indicative and in no way binding on thescope of the present Investigation. It is submitted that tariff classifications must ordinarily be considered as binding, in the absence of conclusive evidence to the contrary, in view of the clear statutory stipulation that only `like articles' maybe the subject of anti-dumping investigations. The Hon'ble DA was therefore, incorrect in observing that the present Investigation is against the product under consideration irrespective of the classification under which it is imported.

7. It is submitted that the Hon'ble DA has wrongly found that the imported products and products manufactured by the domestic industry and the products sold in the market of both the exporting countries, i.e. China and Turkey are similar in their essential physical and technical characteristics and in their use and thus the subject goods produced by the domestic industry and those being imported from the subject countries are Like Articles within the meaning of the said Rules. It is respectfully submitted that there are a number of differences between the subject goods produced by the Petitioners and the subject goods exported by Dalian to India during the POI. In this regard, Rule 2 (d) of the said Rules framed in pursuance of the provisions of Section 9A (6) read with Section 9B (2) of the said Act inter alia, provides that:

" "like article" means an article ………….. closely resembling those of the articles under investigation;"

8. It is submitted that the subject goods exported to India during the POI by Dalian are of 2 grades, 95% and 99.5% and the like article would be only be the same grades if manufactured by the Petitioner. It is submitted that for the purpose of the present Investigation, the Hon'ble DA should exclude the grades that are not manufactured by the Petitioner. From the said Preliminary Findings, it is not clear as to which grade of the subject goods is manufactured by the Petitioner. It is further submitted that the said Initiation Notification defines the subject goods irrespective of raw materials, process, technical specifications and commercial applications. In view of the above, it is submitted that the Hon'ble DA has failed to appreciate that the subject goods produced by the domestic industry and those being imported from the subject countries are not LIKE ARTICLES within the meaning of the Rules. Following the disclosure statement the exporter has urged that in view of the verified low volume of exports of 95% grade borax decahydrate by Dalian and Dashiqiao to India during the period of investigation there can be no findings by the DA of volume effect orcausal injury by the 95% grade. They have further represented that no anti-dumping duty should be imposed on 95% grade of borax decahydrate exported by M/s. Dalian/Dashiqiao from China PR and these should be excluded from the purview of anti dumping duty.

Examination of the Views

9. The product concerned is Borax Decahydrate, commonly known as Borax. The technical name of this product is Di-Sodium Tetra Borate Decahydrate. It falls under Chapter 28 of the Customs Tariff Act. This product is used in glass, textiles, leather, adhesives, detergents, polishes, ceramics etc. The domestic industry has represented that Borax decahydrate have been cleared under other customs subheadings such as 284011, 284020 and 284019 and also under chapter 25. There are arguments from various interested parties that borax decahydrate exported from China PR in the grades of 95% and 99.9% are not the same and hence may not be treated as like article. It has also been represented that there are substantial imports after the imposition of anti dumping duties from China in the name of Sodium Borate, Natural Sodium Borate and Crude Sodium Borate. The domestic industry has further informed thatsodium borate or natural sodium borate is nothing but borax decahydrate itself and have requested for imposition of duty on imports falling under Chapter 25 as well. After examining all records and submission made by various interested parties, the Authority determines that product under consideration is Borax Decahydrate, also commonlyknown as Borax, technically known as Di-Sodium Tetra Borate Decahydrate or Sodium Borate Decahydrate classified under tariff sub head 284019 (herein after also referred to as subject goods). As regards the request of the domestic industry to extend the scope of this investigation to chapter 25 so to cover subject goods, which are being imported under other tariff heads not attracting anti dumping duty, the Authority notes that these issues pertain to misdeclaration which are beyond the scope of the present investigation.

10. The Authority notes that borax decahydrate is basically used in terms of its B2O3 content and so long as this content is the same despite the different percentages of borax decahydrate, it can be used interchangeably. The exporter from China PR has not denied that borax decahydrate of grade 95% and 99% are not being usedinterchangeably and their end uses are different. The Authority notes after examining the transaction-wise data from DGCI&S and from secondary sources (IBIS, Mumbai) that this product is imported under various heads under the Chapters 25 and 28 into this country though this product is technically classifiable under the customs sub-heading 284019.

11. The Authority recognises that no single factor is conclusive in determining like goods. In determining like goods, the Authority generally considers physical characteristics, inter Changeability, channel sub- distribution, common manufacturing facilities and production process, customer perceptions and price. However, it should be noted that this Just relates to the horizontal approach to determine like goods (goods at the same stage of production cycle). Another approach to determine like goods is vertically approach (goods at different stage of the same production cycle, one is used to produce another). As goods in the investigation i.e. subject goods with 95% and 99% are at different stages of one production cycle, the vertical approach would appear more appropriate. In determining like goods in a vertical context, the following conditions are considered

a) The necessity for and cost for further processing,
b) The degree of inter-changeability of article at different stages of production,
c) Whether there significant independent uses or markets for the finished or unfinished article, and
d) Whether the subject goods at an earlier stage of production embodies or imparts to the finished subject goods and essential characteristics or function.

12. Based on the criteria above, the Authority considers all forms of borax decahydrate including 95% and 99% grades to be like products for the reasons that while there may be markets for each grade of the product, the market into which both the grades are sold involve sales to manufacturers who further process the product and compete in the same market and also while there are minor physical and chemical differences between the two grades, the active ingredient of 8203 (36.5%) imparts the essential characteristics or functions to the finished product .

13. As regards the claim of the domestic industry that the subject goods may be imported from tariff heads other than chapter under which it has been classified, the Authority notes that present investigation is against the product under consideration irrespective of the classification under which it is imported. Customs classification is indicative only and is in no way binding on the scope of the present investigation.

Standing Submissions by the Domestic Industry

14. The petition was filed by M/s. Borax Morarji Limited, Mumbai, for and on behalf of the domestic industry and supported by M/s Raj Industries and M/s. M. V. Steels. Petitioner is the major producer of the subject good in India and accounts for a major proportion of Indian production of the subject good. Petitioner, therefore, constitutes domestic industry within the meaning of the Rules.

Submissions by M/s Dalian

15. The standing claimed by the Petitioners is not accepted.

Examination by the Authority

16. The petition has been filed by M/s Borax Morarji Limited, Mumbai. The petitioner is the major producer of the subject goods in India and has accounted for 74.5%of the domestic production of the subject goods during the Period of Investigation. The Authority notes that M/s Northern Borates had supported the petitioner before the initiation of the investigations. However in a further communication, they have withdrawn their support. M/s M.V. Steels and M/s Raj Industries have given their support to the petitioner. The Authority notes the petitioner accounts for a major proportion of the total domestic production of the subject goods in- India under Rule 2(b) of the Anti Dumping Rules. Accordingly, the petitioner satisfies 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.

Submissions by other producers/other importers/users.

M/s. M.V. Steels Private Limited, New Delhi.

17. The manufacturer of the subject goods has submitted that they produce borax decahydrate from Borax Pentahydrate and sell it in the Northern part of India. They find that import of borax decahydrate is creating material injury to their production and sales in the market and hive requested to keep their letter on record as their support to the petition for the subject investigations.

M/s. Northern Borates Private Limited. Kanpur

18. M/s. Northern Borates Private Limited had pledged their support to the petitioner before the Initiation of the subject investigation. They had informed that they have ceased to manufacture borax decahydrate because of low price imports from China. On December 4, 2002, they had informed that they support the current investigationconcerning import of subject goods from China PR and Turkey. On another communication dated December 26, 2002 they had informed that they have withdrawn their support to the petition so far as anti dumping duty is to be imposed on Turkey.

M/s. Rai Industries, Valsad, Gujarat

19. The manufacturer of the subject goods has supported the petition filed by M/s. Borax Morarji Limited for anti dumping on import borax decahydrate from China PR & Turkey.

M/s. Indian Borax Baroda

20. M/s. Indian Borax has given a comprehensive submissions on the state of the borax industry in India. They have added that Borax Morarji Limited, Mumbai enjoyed the monopoly of borax decahydrate in India till 1989. Subsequent to 1989 the monopoly of the international supplier as well as Borax Morarji Limited were disturbed afterthe tariff concession was allowed to all crude sodium borate in place of Kernite and Resorite 46 in India. They have submitted that the petitioner who are already enjoying benefits of import duty concessions on raw material should not be given further protection of anti dumping duty.

M/s. Sun Borax Industry, Ahmedabad

21. M/s. Sun Borax Industries has represented that they have stopped their production in 1.996-97 since it was management decision. They have asked the Authority to make a note that they had not stopped production because of the import of subject goods from Turkey

M/s. Bhansali Chemicals, (Madras) Ltd., Chennai, M/s. Akshay Industries, Pondicherry. M/s. Borax India Limited, Pondicherry, Krishna Associates, Kolkata, M/s. Indo-Borax & Chemicals Lfimited, Mumbai.

22. The above importers have represented that no anti dumping duty should be levied on borax decahydrate from Turkey.

De Minimus Limits:

23. After examination of the import data from the subject countries for the POI, the Authority notes that the import of the subject goods from the subject countries during the POI is above de minimus levels.

Other Submissions made by ETI Bor, Turkey

Reference Price at CIF Level

24. The exporter has represented that the fixation of the reference price at the landed level in the present case results in the levy of the anti dumping duty in excess of the margin determined for Turkey, as in the event of reduction of customs duty on Borax decahydrate in the year 2003-04, the consignment would still be subjected to anti dumping duty even if it has, been exported at un-dumped price by the exporter. In view of this, the exporter submits that the Anti Dumping duty may be re-fixed at the CIF level in the Final Finding. The exporter has further represented following thedisclosure statement by the Authority that reference price should be fixed at the CIF level specially so where the dumping margin is much lower than the injury margin and the said dumping margin is not at all a function of customs duty prevalent in India. In view of this, they have requested that to discard the arguments made by the domestic industry.

Submission made by the Domestic Industry

25. The domestic industry submits that submission by the exporter is ill conceived, misplaced and is an attempt to dilute the whole purpose for which the Designated Authority resorted to the imposition of Anti Dumping Duty on variable basis. The domestic industry has represented that in all three kinds of duties, - fixed amounts, ad-valorum and variable (or floor pricing or reference pricing), the actual anti-dumping duty collected (in the post investigation period phase) may exceed the dumping margin assessed by the Designated Authority in investigation period in all the three situations. In case the actual duty collected exceeds the amount of dumping margin at the time of export (to repeat, this can exceed only the dumping margin at the time of export), the same calls for a review, as there would be a change in the period and hence the parameters. In case the current export price has to be taken, then current normalvalue is also required to be taken, which is subject matter of review investigation. The current export price can not be compared with historical normal value. Annexure II - para 6 (i) of Indian Anti Dumping Rules states as under in this regard.

(b) "The comparison shall be made at the same level of trade, normally at the ex-factory level and in respect of sales made at as nearly as possible the same time ".

Examination by the Authority

The Authority after examining the contention of various interested parties notes that comparison should be made between the dumping margin established for the POI and customs duty prevailing during the POI and therefore, does not agree with the submission of the exporter to fix the reference price at the CIF level.

Other Submissions by /s ETI Holdings- No need for residual duty for other exporters.

26A. As there is only one producer of the subject goods in Turkey, it is not necessary to fix a dumping margin for all other exporters as the only producer has cooperated in the investigation.

Submission by the Domestic Industry

26B. M/s. ETI Holding at the outset, cannot lead that duty should not be recommended in respect of "other exporters". Not only that it is the consistent practice of the Designated Authority to recommend residual duty, but also possibility of exports by the other exporters, for goods produced by ETl Holdings or by other producers, are not ruled out. The benefit of lower dumping margin cannot be. passed on prospective exporters. Such being their, petitioner requests that residual duty at the highest rate may kindly be fixed.

Examination by the Authority

26C. The Authority has examined the contention of various interested parties and after careful examination, has agreed with the contention of the exporter with "regards to fixation of separate dumping margin for other exporters from Turkey.

Submissions made by M/s ETI Bor - Insufficient data for Initiation of the Investigations

27. It has been brought to the notice of the authority that the application did not contain acceptable evidence, amongst other things, in respect of normal value. The petition contained allegedly information showing volume and value of Borax Decahydrate [BDH] exported from Turkey to European Union. The only data available in the public domain is Eurostat data. Eurostat data is based on the HSN classification system. Under the HSN system, BDH falls under tariff item 2840.19.00 covering products other than anhydrous borax. However, this tariff item covers both BoraxDeca Hydrate (having 10 molecules of water) and Borax Penta Hydrate (having 5 molecules of water) [BPH]. The average prices shown in the Eurostat data under the tariff item 2840.19.00 covers both BDH and BPH: Thus, the prices submitted by the petitioners did not reflect the export price for the product under consideration i.e. BDH from Turkey to European Union. In fact, the Petitioner has misled the authority by claiming the price for both BDH and BPH as that of BDH to show prima facie' dumping. Non-submission of accurate, authentic and, reliable evidence with regard to normal value is a violation of the requirements of a valid application under Rule 5(2). In view of the above, the evidence in respect of normal value submitted along with the petition was not adequate and accurate enough to justify initiation of the investigation. Thus, the initiation is violative of rule 5(3). Therefore, the initiation is bad and the authority should have terminated the investigation immediately when it was pointed out.

Submissions made by Domestic Industry

28. HSN Classification of EC is enclosed with these submissions. It would be seen that there are three separate classifications, as reproduced below: It would thus be seen that there are separate custom classification for Borax Penta and Anhydrous Borax. As stated earlier the obligation of the petitioner is to provide information as is reasonablyavailable with the petitioner. As stated earlier, no better evidence of normal value was available with the petitioner. Such being the case, the petitioner cannot be denied the right to investigations, given severe injury caused by exports from China and Turkey.

ETI has assumed that the nature of information available in India and in Europe is the same. ETI in fact, has considered 8 digit classification under EC and 6 digit classification under Indian Custom Tariff Act. A copy of relevant Customs Tariff, ITC Classification and EC Classification are enclosed with this submission and the difference in the nature of information available in Indian Statistics and Eurostat is evident. With regard to disclosure of Eurostat data, it is submitted that the information has been provided to us on confidential basis, with a clear understanding that the same shall not be made public. Such being the case, petitioner is not in a position to disclose the information.
However, the difficulties of the exporter in procuring the information are not understood.

Examination by the Authority

29. The Authority notes that it had accepted the normal value at the time of initiation on the basis` of EUROSTAT data for the partner country TURKEY for the tariff Head 2840199Q which effectively defines subject goods as Di sodium tetraborate excluding Di sodium tetraborate pentahydrate (falling under 28401910 and anhydrous boratesunder tariff head 28401100). The Authority confirms that it had initiated the investigation after having sufficient evidence at its disposal with regards to Normal value and export price. However the Authority has accepted after onsiteverification of the exporter's information, the normal value submitted by the exporter and the Authority proposes to confirm the normal value information determined for exporter for the purpose of final findings.

Submissions made by Turkish Government

The Turkish government has raised some points relating to cumulation, other importers plea regarding the exclusion of Turkey from the investigations, and imports from USA.

Examination by the Authority

The Authority has appropriately analyzed and examined all issues in the final findings at appropriate headings.

NORMAL VALUE, EXPORT PRICE AMID DUMPING MARGIN

30. Under Section 9A(1) (c) of the Customs Tariff Act 1 975, 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 ire 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, thenormal 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).

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 transhipped 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.

TURKEY AND CHINA PR:

Submission by M/s. Dalian Chem Import and Export Group Co, PR China.

31. The Hon'ble DA has wrongly concurred with the Petitioner's allegations that the exports of the subject goods in China are deemed to attract the provision of Paragraphs 7 and 8 of Annexure I to the said Rules with respect to Non Market Economy (hereinafter referred to as "NME"). However, it is submitted that in the said Preliminary Findings the Hon'ble DA has wrongly observed that Necessary information/Sufficient Evidence as, required in Paragraph 8(3) of Annexure I to the said Rules has not been furnished i.e. necessary information/sufficient evidence to successfully refute the non-market economy contention has not been furnished. It is submitted that the Hon'ble DA has wrongly excluded Dalian and the Producer: from being treated as companies operating under market conditions. It is submitted that it may be noted here that the borax business sector in China has not been found to be operating under nonmarket economy conditions in any anti-dumping investigation in any other jurisdiction It has been submitted that list of industries as circulated in the treaty of accession to the WTO does not mention Borax as the industry identified under state control and therefore it is further respectfully submitted that, in thecircumstances, there is, prima facie, no reasonable basis to assume that the borax business sector in China operates as a NME and thus Dalian and the Producer may be excluded from being deemed to be operating under NME conditions. In the light of the aforesaid, it is submitted with respect to the said criteria set out in sub-para (3) of paragraph 8 read with paragraph 7 of Annexure I to the said Rules, as follows:

(a) Dalian does not enjoy a monopoly on borax trade and that there is no State/Government control on pricing and costing of Dalian. The Producer purchases the raw materials and sell the finished products at market driven prices that are not regulated by the State/Government. In turn, Dalian exports Borax Decahydrate (hereinafter referred to as "the subjects goods", inter alia, to India during the said POI at higher market driven prices not influenced by the Government. Further, there is no equity holding by any State/Government owned entities in the Producer and no Directors or managers are nominated by the State/Government owned entities and there is no State/Government management control of the Producer or its prices and costs. Sample of Dalian's High Voltage Electric Power Supply Contract. Further Dalian has provided information with respect to its Internal Rules on Expenses, Expenses Accounting, Export Refund, Fixed Asset, Tax payment, and Inventories.

(b) It is submitted that the accounting system used by Dalian and the Producer is consistent with international norms in a market economy. Dalian does not receive any subsidies other than VAT reimbursement (approximately 88% of the VAT paid) that are levied on domestic sales and purchases its foreign exchange through the authorized dealer bank as in a market economy like India and maintains its accounts consistentlywith international norms. Filed along with the said Comments on the Preliminary Findings as is a sample VAT Invoices of Purchasing Power of the Producer

(c) It is also submitted that the prices paid in India for the subject goods exported by Dalian during the POI include a reasonable profit margin. It is submitted that the decisions of Dalian and the Producer in China with respect to prices, costs and inputs, including raw materials, cost of technology and labour, output, sales and investment, are made in response to market signals reflecting supply and demand and the costs of the inputs reflect market values. Further, there is no distortion of production costs and financial situation as the Producer as is clear from the Confidential Response and accompanying confidential information and further as the Producer has not converted former State assets, or distorted depreciation thereof, or engaged in barter tradeor debt forgiveness or debt/equity swaps, or received the benefit of any write-off. In turn, as is clear from the said Confidential Response Dalian has exported the subject goods to India during the POI consistent with the price at which the said subject goods were purchased from the private Producer and, in turn, at prices consistent with the domestic sales price and cost of production of the Producer. Thus, the Export Price of Dalian to India has been determined by market signals and commercial considerations and not by Government influence. The Producer and Dalian have also repaid any debt consistently as required.

(d) As in India the exchange rate is based on the market rate as determined the Central Bank as is reflected inthe confidential data furnished along with the said Confidential Response. Further Dalian and the Producerhave borrowed from the banks on market terms and repaid their respective loans as per schedule as in amarket economy Dalian and the Producer have acquired their respective land through market economymechanisms. A copy of sample Short term loan agreement of Dalian has been furnished by them. Dalian andthe Producer agree to verification of the same and the information furnished.

32. In view of the aforesaid, it is submitted that Dalian and the Producer fulfill the criteria to be treated as marketeconomy firms/ companies. It is submitted that all domestic sales in China by the Producer during the POI were in the ordinary course of trade and the confidential data therefore has been filed along with the Confidential Response to the Questionnaire. It is submitted that in any case the said Export Price of Dalian is above the said domestic sales price in China of the Producer during the POI and is also at or above Dalian's third country export prices during the POI and also the cost of production of the Producer during the POI. From the dame and what is stated in the said Non Confidential Response and in the Comments to the Preliminary Findings, it is submitted that there was no dumping of the subject goods in India by Dalian during the POI. Thus it is submitted that the Hon'ble DA has also wrongly taken the view that it is unable to apply the principles set out in Paragraph 1 to 6 of Annexure 1 to the said Rules and is constrained to proceed on the basis of the facts available, as per Rule 6(8) of the said Rules.

33. Dalian states that they have exported to India during the POI the subject goods manufactured in China byDashiqiao and are the leading exporters of the subject goods to India from China and in a spirit of full co-operation with the present Investigation they have furnished confidential data for the POI, with respect to, respectively the domestic sales in China of the Producer and, of the export sales of the Exporter to India and third countries in the said Confidential Response to the Questionnaire. Further, it is submitted that the Hon'ble DA has compared the normal value and export price of 99.5% grade of the subject goods whereas Dalian only exports 95% and 99.5% grade-of the subject goods. Thus it is submitted that unlike article should be excluded from the preview of the present Investigation.

Submissions made by ETI A.S. Turkey

34. As has already been intimated to the Hon'ble Designated Authority, there is only one producer of the subjectgoods in Turkey (ETI A.S). The Borax Decahydrate produced by this producer is exported by ETI Holding. There is no other producer or exporter of the subject goods from Turkey. In view of this, it is not necessary to fix a separate dumping margin for "all other exporters", as the only producer has co-operated in the investigation. The Hon'ble Designated Authority is requested to delete the Dumping Margin and the dumping duty indicated against "all other exporters" in Turkey.

35. ETI Bor A.S has the mining rights for mining the mineral Tincal, which is the raw material for the manufactureof the product under consideration. The cost of mining this product becomes the starting point for the determination of the cost of production of BDH. This cost of production is subject to verification by the Designated Authority. Just because ETI Bor A.S is a Government company/State owned enterprise it does not alter the basic methodology. For, if that were so, all State owned enterprises (Public Sector Enterprises) in India would be required to prove that they are operating "in the ordinary course of business". Here, ETI Bor A.S is not getting the raw material Tincal from any affiliated party for the authority to determine the correctness of the Tincal's cost. ETI Bor A/S is mining the Tincal and hence its cost of production becomes the starting point. The allegation that the price at which the Company is getting Tincal is 'not in the ordinary course of trade' by reason of affiliation With the supplier of raw material is incorrect as the raw material is not being supplied by an affiliate. The raw material is being mined and used for the manufacture of different products including BDH. When a product is produced and used captively for the manufacture of another product, it is not required to value that raw material at the market value but only at its cost. Since there is no transfer of raw material, as has been misunderstood by the petitioner, the question of determining whether the transfer price represents the true market value of the inputs does not arise. There is no requirement that a product captively produced by a company should be priced at "fair market value" as has been sought to be made by the petitioner. Even if a portion of the Tincal is sold in Turkey or exported to any other country that price is not relevant.

Submissions by the Domestic Industry

36. With regards to normal value determination from China PR, the Domestic industry craves that all the aboveparameters are required to be examined by an exporter claiming normal value as per paragraphs 1 to 6 to Annexure I. Considering the above, the determination of dumping margin in respect of this Company as per the preliminaryfindings need be confirmed. With regards to imports from Turkey, they have represented that the major raw material for production of subject goods is Tincal. It is the claim of the exporter that the raw material is available in abundance and at very low price. At the same time, the Company is a State Owned Company. Such being the case, it is not clear how the petitioner has established that the price at which Tincal has been charged in the cost of production statement is just and fair. The prices at which the company is getting Tincal is not in the ordinary course of trade by reason for affiliation with the supplier of raw material and the petitioner wonders when the naturally occurring mined product has not been priced at its fair market value, how the company claims that it has transferred Tincal appropriately by considering the cost of production incurred by the company.

37. The domestic industry further states that in case of particular market situation, the normal value can not bebased on domestic sales. In the instant case, the circumstances under which the exporter is operating (the key raw material is being sourced in-house and such key raw material is being produced using a naturally occurring mined product, which is accessible to the exporter without any cost for the mining rights given to the Company by its own Govt., which owns such naturally occurring mined products), is a particular market situation. Such particular market situation can only be rectified by determining fair market value of such input. Following the Disclosure statement, the domestic industry has urged reversal of the MET treatment to the Chinese producer as they have still no submitted the required data and the producer has also not disclosed the complete costing in the information provided to the authority. As regards ETI Holdings, the domestic industry has urged the authority to consider the fair market value of the major raw material rather than the records kept by the exporter with regard to cost of -production. They have also disputed some of the price adjustments claimed by the exporter in order to arrive at the ex-factory price for the determination of normal value.

Examination by the Authority- Normal value for M/s Dashiqiao, China PR

38. The Authority provided opportunity to the known exporters from China PR to furnish information relevant to theinvestigations and offer comments, if any, in accordance with the Section 9A(i)(c). The Authority also communicated to the known exporters and to the Embassy of China in India that it proposes to examine the claim of the petitioner in the light of para 7 & 8 of the Annexure I of the Anti Dumping rules as amended. Only one of the exporters from China PR i.e. M/s. Dalian Chem Import and Export Group Co, PR China and the producer M/s Dshiquiao have responded to the Authority. It has been observed that M/s. Dalian Chem. Import and Export Group Co, PR, the exporter, China PR has obtained the data and support from M/s Dashiqiao Huaxin Chemi Co. (hereafter M/s Dashiqiao) Liaoning. Province China PR, who is a producer of the subject goods during the P01. IM Dalian Chem has no domestic sales during the POI though the producer of the subject goods does have some domestic sales during the POI. The Chinese exporter M/s Dalian Chem and their producer M/s Dashiqiao 'which replied to the Authority's exporters questionnaire requested Market economy treatment on the basis of the submissions made in the above paras. In examining the merits of the claim, the Authority sought to verify whether the producer/exporter which cooperated in the proceedings enjoyed a degree of legal and factual independence from the state, comparable to that which would prevail in a market economy country and which would justify the authority in proceeding with determination of the normal value as per para 1-6 of the Annexure I of the Anti Dumping Rules, thereby justifying itself in accepting the rebuttal in terms of paragraph 7 and 8 of the Annexure I of the Anti Dumping rules. To this end detailed questions regarding the ownership, management control, determination of commercial and business policies were addressed to the exporter/producer and also to MOFCOM, Beijing. None of the producers with the sole exception of the M/s Dalian Chem/Dashiqiao and MOFCOM responded to the Authority, that their operations were sufficiently independent from the Chinese Authorities to qualify for the market economy treatment.

39. M/s Dashiqiao is a legal entity incorporated in the CHINA PR with no equity holdings from the state/government. The Authority carried out on the spot verification at the premises of the company in order to examine the circumstances under which it operated and its relations with the state and a meeting with MOFCOM wasalso arranged to ascertain state laws and market economy issues especially with regards to questionnaire it had sent to them earlier. In particular, the company was able to slow, to satisfaction of the Authority that management and the control of the factory, both in terms of production, marketing and pricing was clearly in their hands and their operations were sufficiently independent from the state.

40. In view of the above, it was considered possible to grant market economy treatment to the cooperating exporter and consequently proceed to determine Normal value vide paragraphs I-6 of the Annexure I to the Anti Dumping Rules.

41. In order to establish normal value for only cooperating exporter/producer M/s. Dashiqiao, it was first determined that whether the total domestic sales of the subject goods by the producer was representative when compared to their total sales of the subject goods concerned sold in the exporting country and whether their sales are under ordinary course of trade in terms of Rule 2 of the annexure I to the anti dumping rules. The authority notes thatthe domestic sales of the co-operating exporter was representative sales. In order to find whether these are underordinary course of trade, the Authority analysed the cost of the production of the subject goods and compared with it to the transaction wise information submitted by the cooperating exporter with regard to the domestic sale prices of the subject goods. The Authority further verified the cost of production of the subject goods as per the records kept by the co-operating exporter in his book of accounts and discovered that various cost elements did not reflect the actual costs of various inputs and the utilities as laid down under Rule 1 of the Annexure I of the Anti Dumping rules and therefore the Authority proceeded to construct the cost of the production of the subject goods after apportioning the costs of the inputs and the utilities as per the normal accounting principles. The Authority discovers that all the domestic sales transactions of the cooperating exporter are not in the ordinary course of trade as per Rule 2 of the Annexure I to the Anti Dumping Rules. The Authority, therefore, proceeded to determine the Normal value as per the Section 9A(i)(c) (ii)(b) of the Customs Tariff Act.

42. In view of the above the Normal value determined by the Authority for M/s Dashiqiao/Dalian Chem Import &Export Group Co, PR China comes to US$ ****/MT. The confidential copy of Normal value, export price and dumping margin determination is annexed (for cooperating exporter only).

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