NOTIFICATION NO. 59/1/2001-DGAD DATE 31/01/2003

Anti-dumping investigation concerning import of Lead Acid Batteries originating in or exported fromTaiwan, Singapore and Hong Kong - Final Findings.
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 Procedure described below has been followed:

(i) The Designated Authority (hereinafter also referred to as the Authority) notified preliminary findings videNotification No. 59/1/2001-DGAD dated the 5th April, 2002 with regard to Anti Dumping investigationsconcerning imports of Lead Acid Batteries originating in or exported from Taiwan, Singapore and Hong Kongand requested the interested parties to make their views known in writing within forty days from the date ofits publication;

(ii) The Authority forwarded a copy of the Preliminary Findings to known interested parties, who were requestedto furnish their views, if any, on the Preliminary Findings within forty days of the date of the letter;

(iii) The Authority also forwarded copy of the Preliminary Findings to the Embassies/HighCommissions/Representatives of subject countries in New Delhi with a request to furnish their views on thePreliminary Findings;

(iv) The Authority held a public hearing on 22nd July 2002 to hear the interested parties orally, which wasattended by representatives of the domestic industry, importers and exporters from Taiwan. The partiesattending the public hearing were requested to file written submissions of views expressed orally. Thewritten submissions thus received from interested parties have been considered by Designated Authority inthis finding;

(v) The Authority made the public file available to all interested parties containing non-confidential version of theevidence submitted by various interested parties, for inspection, upon request;

(vi) Arguments raised by interested parties before announcing of Preliminary Findings, which have been broughtout in the Preliminary Findings notified earlier have not been repeated herein for sake of brevity. However,arguments raised by the interested parties have been appropriately dealt with in the Preliminary Findingsand/or these findings;

(vii) In accordance with Rule 16 of the Rules supra, the essential facts/basis considered for these findings weredisclosed to known interested parties and comments received on the same have also been duly consideredin these findings;

(viii) Investigation was carried out for the period starting from 1st October 2000 to 30th September 2001;

(ix) **** in the Notification represents information furnished by interested parties on confidential basis and soconsidered by Authority under the Rules.

B. VIEWS OF PETITIONERS, EXPORTERS, IMPORTERS AND OTHER INTERESTED PARTIES ANDEXAMINATION BY AUTHORITY:

2. VIEWS OF DOMESTIC INDUSTRY:

i. A number of parties who can not claim to be an interested party have been participating in the presentinvestigation. The preliminary findings nowhere discloses participation by these interested parties before thepreliminary findings were recorded

ii. Relief has been granted in the preliminary findings to M/s. Panasonic Industrial Asia Pte. Ltd., Singaporeand B B Battery Co. Ltd., Hong Kong, which is unjustified.

iii The provisions made under the Customs Tariff Act are uniformly applicable for all parties, whether domesticindustry, exporters, importers or others. Exporters have resorted to unjustifiable claims on confidentiality.

iv The responding exporters/producers have not provided full information and have suppressed vitalinformation from the Designated Authority. The action of the exporters tantamount to significantly impedingthe investigations. Moreover, the action of the exporters is deliberate, conscious and willful. Under thecircumstances, the Designated Authority is fully justified in disregarding the responses filed by the exportersand proceeding further on the basis of best available information.

v. The exporters are trying to prevent the petitioners from effectively defending its interests by resorting to filingdeficient information or claiming confidentiality to the information.

vi Petitioners have repeatedly demanded annual reports of the responding exporters. However, the same havenot been made available to the petitioners. Principles of equity and natural justice demand that all interestedparties should be provided the same level of defense. Petitioners have not been provided even completenon-confidential version of the responses filed by the exporters. Even letters filed by some of the partieshave not been made available to the petitioners for offering their comments

3. VIEWS OF EXPORTERS:

(a) M/S.PILOT BATTERY CO., LTD., TAIWAN:

i. The exporter has submitted that the sealed maintenance free (SMF) batteries and ordinary type aredifferent. There is no comparison between the two types. Accordingly both the types may be treated asseparate classifications and material injury needs to be determined individually for both types.

ii They produce about 50 types of industrial batteries, which are not made by the Domestic Industry.

iii 80% of the companies worldwide have reported lower profits so does it conclude that there is worldwidedumping on all product groups.

iv No separate data has been submitted by the petitioners regarding imports and production of sealedmaintenance free industrial batteries without which the material injury cannot be proved and thisinvestigation remains incomplete.

v With large scale imports of SMF batteries by one of the petitioners, it is proved beyond doubt that theDomestic Industry cannot cater to the demand in the market of this type of SMF battery and their claimof ‘material injury ‘ for this type of battery was false.

vi The anti dumping levies have been imposed on all types and sizes of industrial sealed maintenancefree batteries even though 85% of the international sizes are not manufactured in India.

(b) M/S CSB BATTERY CO. LTD., TAIWAN AND TAIWAN YUASA BATTERY CO., TAIWAN:

(i) ACCURACY AND ADEQUACY OF INFORMATION AT THE TIME OF INITIATION:

(a) Rule 5 (2) provides that an application under sub-rule (1) shall be in the form as may bespecified by the Designated Authority and the application shall be supported by evidence. Theapplication which by law is required to be submitted in the prescribed Proforma only, has to becomplete in all respects as the Proforma is prescribed under the Rules.

(b) Vital information had been kept as confidential in violation of the instructions and Rules.Essential information with regard to the volume of imports had not been furnished to theDesignated Authority. Further, the unit of measurement adopted by them was also not clarified.The comparative figures for the preceding years as well as the period of investigation werealso not supplied to the Designated Authority.

(c) Annexure I-9.1 though claimed to be enclosed was not been annexed to the application.

(d) The inadequacy of the data is further reflected by the fact that the exporters are not able tomake out from the non-confidential version of the petition as to what criterion has beenadopted for determining the import statistics. It appears that varying criteria have been used bythe domestic industry in the petition which clearly establishes that the petition was neitheradequate nor accurate for the Hon'ble Designated Authority to have started an anti-dumpinginvestigation.

(e) Crucial information about the volume and value has been withheld. In the event, thisinformation has been provided in the confidential version, the domestic industry ought to havegiven the non-confidential version of the same to them.

(f) The petitioners have not answered Question No. 5 of Part II by not giving the size, description,models, etc. of the batteries produced by them.

(g) In response to Question Nos. 7 & 8 of Part II, the petitioners have not provided adequateinformation. It needs to be appreciated that this information was absolutely essentialparticularly when the entire case has been made out on the basis of weight. Submissions ofthe domestic industry could not have been accepted on their face value in the absence ofadequate information or prima facie evidence in support thereof.

(h) The exporters have claimed that the non-confidential version of the petition was ambiguous.The copy of the petition made available to them appears to be on the basis of the data relatingto six countries whereas the initiation was done only for three countries. If the application madeavailable to them contains information in the context of six countries, then all their argumentsand submissions would be rendered meaningless. In the absence of clarification and the rightnon-confidential version of the petition, their interests were seriously prejudiced. It was clarifiedthat their request was only with respect to the non-confidential version of the petitioners andnot to the initiation notification or the preliminary findings.

(ii) CONFIDENTIALITY :

Anti-Dumping procedures require that at each and every stage of the investigation process, theparticipating parties with opposing interest are given an opportunity to comment upon andconfront other interested parties. In fact, Rule 6 and 7 enshrine this fundamental principle ofthe conduct of proceedings. The petitioners have been permitted to keep several crucialaspects of the investigation confidential without either putting an adequate summary in placeor an expressed ruling by the Honorable Designated Authority. In particular, the most glaringmisuse of this shroud of confidentiality is the product under consideration itself despite the factthat the domestic industry had the advantage of knowing the mind of the Designated Authorityby virtue of the preliminary findings in the LAB-I case against Japan, Korea, China andBangladesh.

(iii) ASSESSMENT ON THE BASIS OF WEIGHT:

i. The Authority has deemed it appropriate to recommend provisional anti-dumping duties on aweight basis in this particular case. The apparent reasons in support of this seem to be thatLead is a vital input and accurately reflects the cost of production of batteries and that theDGFT/DEPB practice is to provide incentive on weight basis.

ii. The approach is erroneous as the DEPB basis of providing incentives on a weight basiscannot provide the basis for justifying imposition of Anti-Dumping Duty on a weight basis. TheDEPB is an incentive scheme set up to promote exports from the Indian Industries and thesame is granted on weight basis as the sole purpose is to reimburse themanufactures/exporters for the duty on lead which is chargeable on weight basis. Furthermore,from a Value Basis, the DEPB incentive has migrated to a Quantity basis. Thus, incentives areprovided on a quantity basis. To extrapolate this in to calculations of normal value and landedprice in for anti-dumping purposes is inappropriate.

iii It would be pertinent to note that the Indian Standard Specifications for lead acid battery referto the voltage and ampere-hour of the batteries. Imposition of anti dumping duty on the basisof weight is not appropriate, as the battery is an accumulator of power. The amount of powercontained in a battery is expressed by its ampere hour capacity. A 12Volt 100Ah battery has ahigher power capacity than a 12Volts 65Ah battery. Since, it is a storehouse of power, theobvious question is how long (in hours) can the battery drive a particular load (current inamperes).This parameter is expressed as the rate of discharge over a specified period of timeand is referred as the discharge period.

(c) M/S AIK KOON TYRE & BATTERY CO. PTE. LTD., SINGAPORE:

M/s Aik Koon Tyre & Battery Co. Pte. Ltd., Singapore, have given their replies to the Designated Authorityand have stated that they have never exported Lead Acid Batteries to India before.

4. VIEWS OF IMPORTERS

Some of the importers and users such as M/s Union Sales Pvt. Ltd., M/s Monto Motors Ltd., M/s OrchidElectronics Ltd., M/s Kinetic Motor Co. Ltd., M/s Caterpillar India Pvt. Ltd., M/s Toyota Kirloskar Motor, M/s BirlaYamaha Ltd., and M/s Ashok Leyland Ltd., have responded to the questionnaire sent by the DesignatedAuthority. Some of the views given by them are as follows:

(i) India make batteries are not competitive in pricing as well as quality. It costs 30% to 40% more as comparedto batteries available in Thailand-comparison made is on landed cost basis. We did not make anycomparison of prices prevailing in Taiwan, Singapore and Hong Kong.

(ii) Indian battery makers need to improve the competitiveness both in terms of price and quality and to be morecompetitive in the International Market. Automobile market is subjected for severe competition globally andhence inputs need to be competitive also.

(iii) Domestic battery industry may get temporary relief or protection by way of imposing anti-dumping duty onimports, but in the long term will not help the industry. Such protection may not help to face globalcompetition.

(iv) Domestic battery industry should accept the competition and improve competitiveness for the survival andas not many players are in this field, volume should not be an issue for economic scale of operations.

C. VIEWS OF INTERESTED PARTIES ON DISCLOSURE STATEMENT ISSUED BY THE DESIGNATEDAUTHORITY:

5. VIEWS OF DOMESTIC INDUSTRY:

(a) Product under consideration is "Lead Acid Batteries" and therefore anti dumping duty is required to beimposed on any other form of lead acid batteries in addition to automotive and industrial types on whichduties have been recommended in the preliminary findings. Such residual duty has to be at the highest level,keeping in view the principle of residual duty being applied by the Directorate. The word "automotive" and "industrial" while being extensively used in commercial parlance, do not appear in the customs definition.Therefore, the meaning of these words need be clarified in the final findings in order to prevent any abuse ormisuse. No type of lead acid batteries is required to be excluded from the scope of anti dumping duty, as thedomestic industry is offering like article to what is being imported.

(b) The Designated Authority in the previous investigations on this product as also in the Preliminary Findings inthe present investigations has recommended anti dumping duty on " automotive" and "industrial" batteries.However, even when anti dumping duty has been recommended on two types of lead acid batteries, no antidumping duty has been recommended on the product under consideration itself. It has been the practice ofthe Designated Authority to recommend anti dumping duty on the residual form of the product underconsideration in those cases where in the anti dumping duty is recommended on specific product types. It is,therefore, submitted that antidumping duty is required to be recommended on "residual" form of the productand such anti dumping duty is required to be kept at the highest level, keeping in view the principle ofresidual duty adopted by the Designated Authority.

(c) No anti dumping duty can be recommended in respect of trading companies. In any event, anti dumpingduty on the combination of producers and trader have to be given on the basis of "producers and trader"rather than " producers or trader". The decisions of the Directorate in other cases is relevant in this regard.

(d) Petition satisfies standing under the Rules. Opposing interested parties have, at best, made someunsubstantiated and unsupported claims, whereas the petitioners have established standing even afteradopting adverse propositions.

(e) The responses filed by CSB and Pilot have to be rejected given that the responses are incomplete andinformation filed inadequate. Under the present circumstances, the Designated Authority can not accept thecost of production claimed by the exporter and can not establish that the sales made were in ordinary courseof trade. More disturbing is the reasons advanced by the exporter for not providing relevant information.Neither the argument of the exporter can be accepted as a justified claim nor the exporter has accorded duerespect to the process being followed by the Designated Authority . In fact, the discourtesy extended to theDesignated Authority alone is sufficient to declare the exporter non- cooperative.

(f) From the Disclosure Statement , it is very clear that M/s Pilot Batteries have not fully cooperated with theDesignated Authority. The exporter has not furnished the data in the form and manner prescribed. The dataprovided, therefore, can not serve the purpose of determination of Normal Value. The exporter has notfurnished transaction-wise details clearly showing models involved in each transactions. Moreover, theexporter has not sufficiently substantiated its cost of production. Such being the situation, it can be statedthat the exporters has not sufficient cooperated with the Designated Authority and, therefore, the DesignatedAuthority is fully justified in rejecting the response of the exporter, particularly with regard to determination ofNormal Value.

(g) Various parameters relating to injury to the Domestic Industry collectively and cumulatively establish that theDomestic Industry has suffered material injury and further that the imports are posing a threat of materialinjury to the Domestic Industry.

(l) The Preliminary Findings granted exemption to Panasonic and National Trading in case these companiesexported batteries produced in China . Such exemption is illegal, as the Normal Value is now required to beascertained with reference to the price prevailing in Singapore and / or Hong Kong and not with reference tothe price prevailing in China. However, since these companies have not cooperated with the DesignatedAuthority, the Designated Authority cannot determine Normal Value in respect of these companies. Thus, ithas not been established by these companies that there was no dumping in respect of exports made bythese companies. Such being the situation, no exemption can be granted to these trading companies in thepresent investigations.

6 VIEWS OF IMPORTERS:

M/S. KINETIC MOTOR COMPANY LIMITED:

They have not imported the Lead Acid Batteries from the countries under investigation, i.e. Taiwan, Singaporeand Hong Kong. The decision in the present investigation may be taken considering justification to the DomesticIndustry.

7. VIEWS OF EXPORTERS:

(i) M/S. CSB BATTERY CO. LTD., TAIWAN:

(a) The observation of the Hon’ble Designated Authority to declare CSB as a not fully cooperative party isincorrect. The exporter has claimed they have submitted all the information in the prescribed formatfrom time to time to the Officers of the DGAD.

(b) The exporter has denied the contents of para 2.2 (a) of the Disclosure Statement by stating that thecosts claimed by them is based on actuals and only selling expenses, R&D, Admin cost, Finance andInterest cost are based on the percentage allocation of the budgeted sales. The exporter has furthersubmitted that the difference in the actual and budgeted cost are not apportioned to the respectiveheads but are adequately reflected in the annual financial statements under heading "OperatingExpenses". It is claimed by the exporter that so far as the raw material and manufacturing expenses areconcerned the statement supplied to the visiting team reflects the actual cost. The raw material breakup in terms of lead and lead alloys was indeed supplied to the visiting team. The exporter has furtherstated that since the entire investigation was carried out on the basis of weight of the battery and leadcontent, the information supplied by CSB would have served the purpose of carrying out the ‘ OrdinaryCourse of Trade’ test.

(c) The Authority has not informed the criteria adopted for determining the standing of the DomesticIndustry to file petition.

(d) The exporter has observed that M/s Exide has acquired 100 % of Chloride Batteries South Asia Pte,Ltd. in Singapore and it appears that this fact was suppressed from the Designated Authority. The saidCompany is admittedly a producer/exporter of the subject goods from Singapore, which is a countryunder investigation.

(e) The Designated Authority has not addressed the issues raised by CSB that the ratios of the leadcontent and the weight of the battery vary significantly from producer to producer due to technologicaldifferences.

(f) On the issue of weight, the Authority has completely failed to address our suggestion that theappropriate method would be to impose duties in terms of VAH (Volt X Ampere Hour) and not weight.

(g) No information has been provided till date regarding the details of the calculations and how the finalfigures have been arrived at in respect of Normal Value and the Export Price.

(h) It is incumbent upon the Hon’ble Designated Authority to carry out the injury analysis separately forindustrial, MF automotive, NMF automotive and motorcycle batteries.

(i) It has also been indicated that the rate of growth of imports of subject goods is more than the rate ofdomestic production. This analysis is not only irrelevant but is also not envisaged as one of the 15factors for injury analysis under para (iv) of Annexure II.

(j) From the balance sheet of Exide as well as Amara Raja, it is abundantly clear that both companies aredoing exceedingly well on almost all parameters of financial performance except that there is a marginalfall in gross profit for Exide.

(k) It may also be observed that Exide has increased new investments substantially in the year 2000-2001.It would, therefore, be commercially unacceptable for the Domestic Industry to expect a high or eventhe same rate of return in the first year of its new investments. The Authority has not considered thisaspect in the injury analysis.

(l) As regards the so-called increase in inventories, it has not been clarified whether the same haveincreased in terms of value, weight or piece basis.

(m) There is not even a whisper nor any indication in the Disclosure Statement about the market share ofthe imports or of the Domestic Industry which is an vital part of the injury analysis.

(n) It has been indicated in the Disclosure Statement that t here is threat of material injury for two reasons.First, during the period of investigation imports from the subject countries have increased at a significantrate. Second, there is also likelihood of substantially increased imports from these sources in view ofhuge production in these countries. Designated Authority is not permitted to make a casesimultaneously for material injury as well as threat of material injury in terms of the opening para ofAnnexure II.

(ii) M/S PILOT BATTERY CO. LTD., TAIWAN:

(a) It seems that the Authority had already decided that anti dumping duties must be imposed and does notwish to actually investigate the genuine grievances of the interested parties.

(b) Under Industrial batteries, Sealed Maintenance Free batteries has to be classified separately. It isdefinitely not a "Like Article". We would like the Authority to appoint an expert technical committee togive their opinion on this matter.

(c) The Petitioners and the Authority had directed all the investigations and notices regarding Taiwan onlyto CSB Battery Co. and Taiwan Yuasa Battery Co. The exports to India by Pilot were too negligible towarrant any action. They also gave unrestricted entry for the Authority to investigate all their books andwere subjected to very intense scrutiny in our Taiwan Office. It is not fair that the authority takesadvantage of their voluntary co-operation.

(d) The entire matter of ‘dumping’ arises from the low unit value of imports and not from any particularcountry. The petitioners are being shielded for no genuine reason.

(e) There are about 59 sizes of sealed maintenance free batteries produced by them , which are not in themanufacturing range of the petitioners. But unfortunately the Authorities have been led to believeotherwise by the petitioners. They request the Authorities and challenge the petitioners to publish actualproduction records/sales records of such sizes pertaining to the ‘ period of investigation’.

(f) The petitioners also claim that all sizes of SMF batteries are interchangeable. This is totally false. Theyare misleading the Authority. We request the Authority to kindly let us know which locally produced SMFbattery can be interchanged with a 2.3 ah-12 v or a 1.2 ah- 12 V battery used in a ‘heart-lung’machine.

(iii) M/S. TAIWAN YUASA BATTERY CO., TAIWAN:

If the Authority felt that the information provided was not as per the prescribed format the same could havebeen pointed out and they would have remedied the situation if an effective opportunity was provided. Wealso offer ourselves for verification by our team at any mutually convenient time. The information/evidenceprovided to this Hon’ble Designated Authority together with our reply to the petition, and rejoindersubmissions be taken into consideration before recording Final Findings. Taiwan Yuasa Battery Co., havenot dumped any of the subject goods to India. We are interested in fully cooperating with the DesignatedAuthority in this regard and are still ready and willing to supply any information required under the Rules.

8. EXAMINATION BY THE AUTHORITY:

The submission made by the exporters, importers, domestic industry and other interested parties have beenexamined and considered while arriving at these findings and wherever appropriate have been dealthereinafter. However, certain crucial issues raised by different interested parties have been examined asunder:-

(i) On the issue of confidentiality raised by the interested parties it is clarified that the information which is in thenature of confidential information can be claimed confidential. In line with the practice being followed by theAuthority such information which has been claimed as confidential has been, allowed and treated asconfidential information. Further information which has been claimed confidential and disclosure of whichcan cause significant adverse effect on the person supplying the information has also been treated asconfidential,.

(ii) With regard to the ambiguity of the non confidential version of the petition it is evident from the Initiationnotification that the petitioner have filed petition against a number of countries, however, the Authority foundthat the volume of imports from some of these countries was de minimus. Accordingly investigations werenot initiated against all those countries against which the petition was filed.

(iii) It is noted that statistics in the case of lead acid batteries are compiled in terms of number of units. Butdenoting the volume in terms of number of units may not be quite meaningful information because differentmodels/types of the batteries have different cost and prices. It was further stated that there is a correlationbetween the lead content and the weight of the battery and its associated costs, prices and performancecharacteristics such as power capacity, rate of discharge etc. Therefore, apart from denoting the product interms of unit and value, it will be useful to have the information on the product in terms of lead content andweight of the battery as there is a correlation between power and lead content of the battery which also getsreflected in terms of value or price. An almost direct relationship between the weight of the battery, its powerand the cost of production were other factors that led to the decision of taking the weight of the battery fordetermination of the reference price/value for the purpose of calculation of applicable anti dumping dutyrecommended by the Authority in the Preliminary Findings.

(iv) It has been argued that the standard practice in the battery industry is to classify lead acid battery in terms ofnumber of types/models on the basis of specifications such as dimension, number of plates, voltage,ampere hour (AH), length of life etc.. The specifications vary depending on AH rating, voltage, dischargecharacteristics, and discharge period. As the specification or capacity vary, so does the weight of the batteryincluding its lead contents. It has also been argued that this standard practice is followed by the petitionersalso in the commercial transactions and they have misguided the Designated Authority to assess the antidumping duty on weight basis. In making comparison between two batteries, the AH capacity, voltage,discharge period, discharge characteristics, charging characteristics, life of battery, climatic conditions andnature of use have to be taken into consideration. Further, it has been stated that the prices of batteries alsovary according to specifications and also cost per Kg. of automotive battery weight falls as the size(capacity) of a battery increases.

(v) As stated above, there are a large number of parameters effecting the cost, price and performance ofbatteries of different specifications. The interested parties have brought in about ten such parameters. Alsothere are a large number of types/models of automotive and industrial batteries having differentspecifications that are produced and sold. It is not possible to recommend duties separately for each ofthese types/models of the battery being produced or likely to be produced in future. However in the courseof investigation and verification of the facilities of the manufacturers, it was confirmed that lead weight andbattery weight are two important parameters for any battery which can be used as common denominatorsfor the purpose of comparison and calculation. Other criteria such as discharge characteristics, life of thebattery etc., are not easily quantifiable and have the problems of comparison. On the basis of the evidenceavailable before the Authority, the Authority holds that assessment of different types of batteries in terms ofweight for the purpose of imposition of duty is most appropriate and has decided to continue with its earlierdetermination on the basis of the weight.

(vi) With regard to the claim of M/s Taiwan Yuasa Battery Co., regarding submission of complete information,the Authority notes that the exporter has not submitted complete information as solicited in the exporter’questionnaire. The exporter not furnished information with regard transaction wise sale in the domesticmarket as also export to India required under Appendix 1 & 2 which is a pre condition to assess the NormalValue and Export Price and consequently the Dumping Margin. No information in Appendix 7 is provided.The cost of production provided in Appendix 8 was not in the prescribed format. Accordingly the Authorityholds that the information filed by the exporter is grossly insufficient an adequate to determine individualdumping margin and is constrained to treat the exporter as non cooperative.

(vii) With regard to the claim of M/s CSB Battery Co. Taiwan on submission of the cost data on actual basis tothe Authority and its verification by the visiting team the Authority holds that the statement is not based onfacts. From the responses received so far from the exporter it is not clear whether the exporter has furnishedcost information for the period of investigation or for the Annual Financial period which was different from theperiod of investigation. The exporter in its response has claimed that the selling exps, R&D, Admin cost,Finance and Interest are based on percentage allocation of the budgeted sales meaning thereby that thecost of these elements is not even based on actual sales. If the exporter has not absorbed and reflected thevariance between the actual cost and the cost based on budgeted sales to different models how it can beclaimed that the cost of different models is based on actuals. The exporter did not provide element wisebreak-up of different materials used in the manufacture of different models of batteries. The Material costand other elements of costs has been reflected only as a percentage of the sales realisation . It was nevershown to the investigation team how the costs so indicated in the cost sheet has been arrived at from thebooks of account / profit & loss account of the company. The exporter also could not provide satisfactoryreply to the verification team as to whether the cost claimed in the Appendix 8,9 and 10 is based on therecords for the period of investigation or based on the data for a different period. Mere statement at the endof the verification that the cost so indicated is based on actuals cannot conclude that the cost is so based asit is obligatory on the part of the exporter to get the same verified to the verification team from the books ofaccounts / profit & loss for the period of investigation. This was never done by the exporter during the courseof verification. In response to the Disclosure Statement the exporter has still not clarified that the cost soclaimed by him is for the period of investigation or not. In view of the reasons given above it is concludedthat the exporter has not co-operated with the Authority during the course of verification at their premisesand hence in the absence of basic cost data for the period of investigation the Authority could not assesswhether the sales made by the exporter in the domestic market was in ordinary course or not.

(viii) With regard to the observation of M/s. CSB regarding acquisition of Chloride Batteries South Asia Pte. Ltd,Singapore by M/s Exide the Authority holds that this issue has been raised by the exporter first time.Clarifications in this regard from M/s. Exide Industries Ltd. and M/s. Chloride Batteries show that althoughM/s. Chloride is a 100% subsidiary of M/s. Exide but the same has no manufacturing facility and have notexported any lead acid storage batteries to India since April, 2000 till today except two pieces of samplebatteries. Therefore the Authority holds that this affiliation does not debar M/s Exide from filing this petition

D. Product under consideration AND LIKE ARTICLES:

9. VIEWS OF DOMESTIC INDUSTRY:

(i) The product under consideration in the present investigation is "Lead Acid Batteries" irrespective of itscapacity, size, type etc. Further, the issue of product under consideration has already been discussed atlength by the Designated Authority in the previous investigations. Such being the case, there can not be anyargument on this issue.

(ii) Goods produced by the domestic industry are like article to the goods imported from the subject countries.

(iii) Exclusion of certain types demanded by Pilot is uncalled for as:

(a) some of these batteries have not been exported to India by the company in the investigation period;

(b) the domestic industry makes either identical or closely resembling models to the models exported byPilot in the investigation period;

10. VIEWS OF EXPORTERS:

M/S. CSB BATTERY CO. LTD., TAIWAN AND M/S. TAIWAN YUASA BATTERY CO., TAIWAN

a. The domestic industry has been wrongly allowed to define the product under consideration in the broadestpossible manner, without identifying the sub-grouping i.e., Industrial and Automobile (Maintenance Free andNon-maintenance Free) and Motorcycle

b. For the purpose of this anti dumping investigation, product under consideration and like article, each type ofbattery should be taken separately because "like product" means "identical product", "alike in all respects"which can be substituted in commercial transaction and in practical use. It has further been argued that forall practical purposes, each type of lead acid battery is a separate "product". The Authority has erred inaccepting the argument of the petitioners that the battery of all types should be amalgamated into onecategory of lead acid battery by calculating the lead content of the batteries and weight. By accepting alltypes of batteries which are not commercially substitutable there has been a serious error on law and on facton the part of the Designated Authority in determining the "product" under investigation and further that eachtype of battery within the broader category of automotive and industrial battery should have been takenseparately considering that each can not be commercially and technically substituted.

c. The case should have been made out separately for the replacement market as the replacement and the OEmarkets are two separate and distinct markets. Evidence was provided to show that the investigations havebeen done by other authorities in the world on the same basis.

d. The Hon'ble Designated Authority has consistently followed this practice that actual exports are requiredprior to imposing anti-dumping duties. A consistent approach in the law requires that a similar findings onbatteries not manufactured in India should also be made in the present case.

e. Accordingly, the scope of the present investigation be necessarily limited to the types of batteriesmanufactured in India and exported to India.

11. EXAMINATION BY THE AUTHORITY:

(a) The initiation notification issued on 02-11-2001 states as under:-

"the product under consideration is ‘lead acid batteries’. ........Lead Acid Batteries fall within Chapter 85 ofthe Custom Tariff Act under the sub-heading 8507. The batteries are described as electric accumulatorsunder the Customs Tariff Act and are classified under customs sub heading Nos. 8507.10 and 8507.20 ofthe Customs Tariff Act. The Custom classification is indicative only and not binding on the scope ofinvestigation".

(b) In the Initiation Notification, it was also mentioned that the statistics in case of lead acid batteries arecompiled in terms of number of units and value. But denoting the volume in terms of number of units orvalue alone may not provide quite meaningful information because different models/types of the batterieshave different power capacity, rate of discharge, value, etc. It was further stated that there is a correlationbetween the lead content and the weight of the battery and its associated costs, prices and performancecharacteristics such as power capacity, rate of discharge etc. Therefore apart from denoting the product interms of number of units and value, it will be useful to have the information on the product in terms of leadcontent, weight and power capacity also. The information on the characteristics mentioned above will berequired for the purpose of calculation and comparison of various parameters.

(c) In the Preliminary Findings, the Authority has divided the batteries into two categories, i.e. automotive andindustrial. The automotive batteries were further sub-divided into three categories, viz. maintenance free,non maintenance free and motorcycle. However, as stated in the Para above that within automotive andindustrial batteries, there are large number of models/types but these types are comparable in terms ofphysical and electrical characteristics, manufacturing process, technology, functions and uses,specifications, distribution and marketing arrangements and tariff classifications and hence fall within thedefinition of ‘Like Article’. Even within the two broad categories of automotive and industrial batteries, in thecourse of verification at the premises of the manufacturers, it was found that in some cases the facilities formanufacture of industrial batteries were being used for production of automotive batteries in commercialvolumes. The Authority, therefore, has decided to continue with the description of product underconsideration as Lead Acid Battery as determined in the Preliminary Findings and also that the Lead AcidBatteries produced by petitioner companies are like articles to the Lead Acid Batteries being imported fromsubject countries within the meaning of the Rules.

(d) The petitioners had claimed that the goods produced by them are like article to the goods originating in orexported from subject countries. There is no argument to the contrary stating that the goods beingmanufactured in subject countries and imported into India from the subject countries are not substituting thelead acid batteries being produced by the domestic industry, except to the argument that certain types ofbatteries being produced by the exporters are not being produced by the domestic industry. On the basis ofevidence available, the Authority therefore determines that the lead acid batteries produced by thepetitioners are ‘like articles’ to lead acid batteries being imported from the subject countries within themeaning of the Rules.

(e) With regard to claim of exclusion made by certain interested parties, the Authority notes that the claim cannot be accepted as in case of certain types of lead acid batteries as claimed to be produced by theexporters, it was found that even though batteries meeting the same specification with regard to voltage andampere hours is being not produced by the domestic industry, yet, the domestic industry has producedanother types of batteries, which are comparable and are substitutable, technically and commercially.

(f) It is also noted by the Authority that in respect of certain types, the price at which the batteries wereimported in the investigation period were above the bench mark fixed by the Authority. At the same time,weighted average dumping margin in respect of the exporter is found more than de-minimus. Thus, theAuthority holds that it would not be appropriate to exclude any of these types from the purview of antidumping duty.

In view of the foregoing the Authority holds that product under consideration in the present investigations andproposed anti dumping duty is all types of "lead acid batteries", classifiable under Customs Tariff 8507. Thevarious types of lead acid batteries are classified into (a) automotive batteries; and (b) industrial batteries .While both the types of batteries have been further divided into maintenance free and non maintenance free,automotive batteries used in motorcycle have also been separately classified. It is clarified that " automotivebatteries" are those types of lead acid batteries which are used for starting piston engine, as defined undercustoms sub heading 8507.10.

E. DOMESTIC INDUSTRY:

(i) As per Rule 2(b) of the Anti Dumping Rules, "domestic industry means the domestic producers as a wholeengaged in the manufacture of the like article and any activity connected therewith or those whose collectiveoutput of the said article constitutes a major proportion of the total domestic production of that article exceptwhen such producers are related to the exporters or importers of the alleged dumped article or arethemselves importers thereof in which case such producers shall be deemed not to form part of domesticindustry."

(ii) The definition of Domestic Industry given above is further clarified by Rule 5 of Rules which reads asfollows:-

"----------------- the application shall be deemed to have been made by or on behalf of the domestic industry, ifit is supported by those domestic producers whose collective output constitute more than fifty percent of thetotal production of the like article produced by that portion of the domestic industry expressing either supportfor or opposition as the case may be to the application.

12. VIEWS OF EXPORTERS:

M/S. CSB BATTERY CO. LTD., TAIWAN AND M/S. TAIWAN YUASA BATTERY CO., TAIWAN

(a) The petitioners have tried to establish their standing on the basis of production volume as well as value. Ithas been stated that not only production volume but also the production value is an equally importantcriterion to decide standing of the Petitioners. Further, the Designated Authority has accepted value as acriterion for the purpose of determination of standing. It is submitted that methodology adopted to determinestanding of the petitioners is not supported by the legal provisions or the jurisprudence on the subject.Subsequent submissions with regard to standing will not cure the defect, which have occurred prior to or atthe time of initiation. In other words, standing of the domestic industry to initiate a case has to be judgedprior to initiation.

(b) The representative of the small scale battery manufacturers made a categorical statement that theyrepresent 48% of the total production of lead acid batteries in India. As per the petition submitted by thedomestic industry, Exide alone represents over 50% of the domestic production, which would imply that theother companies outside the small scale sector account for less than 2% of the total production in thecountry. Therefore, the figures supplied by the domestic industry with regard to their share in the totalproduction in India are clearly incorrect.

(c) On the determination of standing, since the Designated Authority has proceeded on the basis of thestatements made by the domestic industry in their application, it is abundantly clear that the Hon'bleDesignated Authority has been misled by the domestic industry in its determination of the standing of thedomestic industry to file the petition. Apparently, the Designated Authority did not have the information aboutthe production by the small scale sector (application is silent on this aspect) nor did it have the accurateinformation about the production by the petitioners. It is clear that the determination of the standing wasbased on incomplete and inaccurate information, and therefore, cannot be sustained. The Authority’s ownposition before various courts has been that the standing has to be determined prior to initiation of theinvestigation. This position has also been settled in several WTO panel decisions. Since this importantobligation under the Anti-dumping Rules has been violated, the case needs to be terminated on this groundalone.

(d) The standing of the domestic industry has been attempted to be established on the basis of conjectures andsurmises and on presumptions and assumptions. It is based on some calculation of the lead consumption inthe country which only the domestic industry is aware of. The legal requirement is that hard facts and figuresare required to be submitted which has not been done in the instant case.

13. EXAMINATION BY THE AUTHORITY:

(a) It was stated in the Initiation Notification that the petition has been filed by M/s. Exide Industries Limited,M/s. Amara Raja Batteries Limited and M/s Amco Batteries Limited on behalf of the domestic industry.However as per the records available before the Designated Authority M/s Amco Batteries Limited haveimported significant quantities of lead acid batteries from the countries against whom petition for initiation ofanti dumping investigation has been filed. The Authority, therefore, had decided to exclude M/s AmcoBatteries Limited from the definition of the Domestic Industry as per the Anti Dumping Rules.

(b) It was also argued that M/s Exide Industries Ltd. have made import of certain models of lead acid batteriesfrom China and, therefore, should be excluded from the purview of domestic industry. In this context thatAuthority notes that M/s. Exide has imported Lead Acid Batteries from China after the period of investigation.It is, further noted that China is not the subject country under investigation in the present case. In view of theabove, the imports from China by M/s. Exide after the period of investigation and date of initiation of thiscase does not debar the company from forming part of the Domestic Industry.

(c) It was recorded in the Initiation Notification that "it has been stated by the domestic industry that thestatistics in the case of lead acid batteries are compiled in terms of number of units. But denoting the volumein terms of number of units may be misleading because different models have different power capacity andvalue. Apart from denoting the product in terms of units and value, it will be useful to have the information onthe product in terms of lead content as there is a direct correlation between power and lead content of thebattery which also gets reflected in terms of value or price. The direct correlation between the lead content inthe battery and its associated costs and prices is also quite significant. It will, therefore, be meaningful toassess the volume, value as well as lead content of the product for the purpose of calculation andcomparison of various parameters".

(d) It has been stated that the arguments given by the petitioners for the purpose of determination of theirstanding to file the petition on behalf of the domestic industry, are erroneous and full of presumptions. It hasbeen stated that there is no relationship between lead production and consumption in India and the actualproduction of lead acid batteries in India. Also the petitioners may use or may not use domestic lead forbattery production, as lead produced in India may not be technically suitable for battery production. On thisbasis, it is argued that the petitioner relied on assumption, presumption and not reliable and verifiable dataand figures to qualify themselves as domestic industry in the anti dumping proceedings. Though argumentshave been made disputing this claim of standing of the petitioners on domestic industry, none of theinterested parties has come up with any evidence with justifiable data proving that the petitioner companiesdo not have the standing to file the petition. Here, it may be mentioned that the Authority has also used theinformation provided by sources other than the petitioner companies for arriving at a decision regarding thestanding of the petitioners to file the petition on behalf of the domestic industry. The information with regardto consumption of lead is not based on petitioners own data, but is provided by the petitioners fromindependent sources. Moreover, the Authority has correlated this information with the other publishedinformation, which further establishes that the claim of the petitioners on this account, at best, can bedescribed as conservative estimate. The Authority, therefore, determines that the petitioner companiesaccount for a major proportion of the domestic industry and have the requisite standing in terms of theprovisions of the Anti Dumping Rules.

F. NORMAL VALUE,EXPORT PRICE AND DUMPING MARGIN:

14. Under Section 9A(1)( c), 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 theexporting country or territory as determined in accordance with the rules made under sub-section(6); or

(ii) When there are no sales of the like article in the ordinary course of trade in domestic market of the exportingcountry or territory, or when because of the particular market situation or low volume of the sales in thedomestic 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 territoryor an appropriate third country as determined in accordance with the rules made under sub-section (6);or

(b) The cost of production of the same article in the country of origin along with reasonable addition foradministrative, selling and general costs and for profits, as determined in accordance with the rulesmade under sub-section(6);

Provided that in the case of import of the article from a country other than the country of origin andwhere the article has been merely transhipped through the country of export or such article is notproduced in the country of export or there is no comparable price in the country of export, the normalvalue shall be determined with reference to its price in the country of origin.

The Authority provided opportunity to the exporters from subject countries to furnish information relevant to theinvestigations and offer comments, if any, in accordance with the Section cited above. The Authority wrote to theEmbassies/High Commissions/Representative of subject countries in India also. The Authority sent questionnaires toall the known exporters for the purpose of determination of export price and normal value in accordance with Section 9A(1) (c) of the Custom Tariff Act. Responses were received from the following exporters from Taiwan:-

a. M/s CSB Battery Co. Ltd., Taiwan,

b. M/s Pilot Battery Co. Ltd., Taiwan,

c. M/s Taiwan Yuasa Battery Co. Ltd. Taiwan.

15. TAIWAN:

(a) M/S CSB BATTERY CO. LTD., TAIWAN:

NORMAL VALUE:

i In response to the questionnaire M/s. CSB Battery Co. Ltd., Taiwan has submitted invoice-wise details ofsales of different types of lead acid batteries in the domestic market. The exporter has also furnished thecost of production of different types of batteries as per Appendix –8,9 and 10 of the exporter questionnaire.Further, during the course of verification the exporters was asked to explain the cost of production indicatedin Appendix-8,9 and 10 and reconcile the same with the books of accounts/ profit and loss account for theperiod of investigation. The exporter was also requested to give the break up of the material and utility cost.
However, it was explained by the exporter that the cost of production so indicated in these appendices isbased on standards. The exporter could not substantiate the costs indicated under different heads asrequired under these Appendices. The exporter also explained that since the elements of raw materialsreflected in the total cost so determined by them is highly sensitive it will not be possible for them to disclosethe same to the investigating team. On being pointed out during the course of verification that the cost ofproduction claimed was not actual cost of production and was not for the investigation period, the exporterhas not denied the same.

ii Since the exporter could not provide reconciliation of the cost of production with the books of accounts/ profit& loss account for the period of investigation it is not possible to assess whether the domestic sale of theexporter are in ordinary course of trade or not. Authority holds that consideration of actual cost of productionand for the investigation period is first and foremost requirement in examining whether the domestic salesare in the ordinary course of trade. Moreover, the argument of the exporter with regard to sensitivity ofinformation can not be appreciated by the Authority. Accordingly, Authority holds that the exporter has notfully cooperated with the Authority and has not provided all relevant information.

iii There is no other exporter from Taiwan who has cooperated with the Authority. Under these circumstancesthe only option available with the Designated Authority is to assess the normal value in case of this exporterbased on best available information in accordance with Rule 6(8) supra. The Authority has assessed theNormal Value as US $ **** per kg. of lead acid battery.

EXPORT PRICE:

In response to the questionnaire, the exporter has furnished invoice-wise/ model-wise details of exports madeto India during the period of investigation in Appendix-2. The exporter has also furnished sample copies ofinvoices in support of the same. The exporter has exported maintenance free lead acid batteries to India duringthe period of investigation. Adjustment in Appendix-4 have been claimed with regard to inland freight, storagehandling, insurance, shipping charges etc., have been considered and allowed to arrive at the ex-factory exportprice to India. The Authority has thus determined the ex factory export price as US $ **** /kg of lead acid batteryfor the Final Findings.

Considering the normal value and export price as detailed above, dumping margin has been determined.

(b) M/S PILOT BATTERY CO. LTD., TAIWAN

NORMAL VALUE:

i M/s Pilot Battery Co. Ltd., is manufacturing and exporting only the industrial lead acid batteries. During thecourse of verification it was observed the company has not furnished complete details (Invoice/ transactionwise)of domestic sales both for the batteries similar to batteries exported to India and for those batterieswhich were not exported to India. In the absence of same it was not possible to assess the ex-factorydomestic sales realisation of different batteries. The company has furnished monthly total of domestic sales,export to other countries and export to India of different types of batteries as per Appendix-3. The exporterhas also submitted the photocopy of their sale ledger for the period of investigation which reflectstransaction-wise/invoice-wise details of the sales but does not segregate the same in battery type wise fordomestic sales and exports etc separately. Further, during the course of investigation the exporters wasasked to explain the cost of production indicated in Appendix-8,9 and 10 and reconcile the same with thebooks of accounts/ profit and loss account for the period of investigation. It was explained by the exporterthat the cost of production so indicated in these appendices is based on standards and past experience ofthe management. The exporter could not reconcile the cost indicated under different heads as requiredunder these Appendices from the books of accounts/ profit & loss account. The exporter also explained thatsince the elements of raw materials reflected in the total cost so determined by them is highly sensitive it willnot be possible for them to disclose the same to the investigating team. However, the exporter vide theirletter dated 6th November, 2002 submitted the total cost of different models/sizes of batteries manufacturedby them during the period of investigation without giving duly reconciled the break up of the same with booksof accounts.

ii In view of the non submission of transaction wise details duly segregated into different models / types forexports to other countries and in the domestic market and reconciliation of the cost of production with thebooks of accounts/ profit & loss account for the period of investigation it is not possible to assess thedomestic sale of the exporter and whether those sales are in ordinary course of trade or not. Accordingly,Authority holds that the exporter has not fully cooperated with the Authority and has not provided all relevantinformation. There is no other exporter from Taiwan who has cooperated with the Authority. Under thesecircumstances the only option available with the Designated Authority is to assess the normal value in caseof this exporter based on best available information in accordance with Rule 6(8) supra. The Authority hasassessed the Normal Value as US $ **** per kg. of lead acid battery.

EXPORT PRICE:

In response to the questionnaire, the exporter has furnished invoice-wise/ model-wise details of exports madeto India during the period of investigation in Appendix-2. The exporter has also furnished sample copies ofinvoices in support of the same. The exporter has exported maintenance free lead acid batteries to Indiaduring the period of investigation. Adjustments as claimed by the exporter in Appendix-4 with regard to inlandfreight, storage handling, insurance, shipping charges etc. have been considered to arrive the ex-factoryexport price to India. The Authority has thus determined the ex factory export price as US $ **** /kg of leadacid battery for the Final Findings.

(c) M/S TAIWAN YUASA BATTERY CO. LTD. TAIWAN:

(i) In their submissions made to the Authority, the exporter has given details regarding total quantity and salesamount in last three years, cost of batteries and copy of invoices relating to exports to India in 2001. Theinformation required to be given as per the Exporter’s Questionnaire, in the prescribed format, was not beengiven. Also, non confidential summary of the submissions made to be placed on the Public File, has notbeen given.

(iii) Authority holds that the exporter has not fully cooperated with the Authority and has not provided all relevantinformation. There is no other exporter from Taiwan who has cooperated with the Authority.

(iv) With regard to the argument that the Authority has not disclosed dumping margin in respect of the exporterand the same was mandatory even if the exporter has not fully cooperated with the Authority, the Authoritynotes that the argument lacks merit. The disclosure statement issued by the Authority contained disclosureon the methodology adopted by the Authority for assessment of dumping margin. This disclosure has beenmade to all interested parties. In so far as the issue of disclosure of calculations of dumping margin isconcerned, the Authority notes that the exporter has not provided sufficient information both for normal valueand export price determination. Thus, the exporter has prevented the Authority in assessing its normal valueand export price based on data relating to the exporter. Such being the case, there was no individualcalculation of dumping margin in respect of the exporter which could be disclosed to the Authority.

(v) Under these circumstances the only option available with the Designated Authority is to assess the normalvalue and export price in case of this exporter based on best available information in accordance with Rule6(8) supra and at the same level as has been done in respect of other exporters from Taiwan. The Authorityhas assessed the Normal Value and export price as US $ **** per kg. of lead acid battery.

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