C. EXAMINATION BY THE AUTHORITY12.1 Period of investigation : The period of investigation in the present investigation is from 1st January, 2000to 30th September, 2000. It has been argued by some of the exporters/importers that the POI is neither the mostrecent nor is it a period of 12 months or more corresponding to the accounting year of the petitioners. Further, it has been argued that the Authority has not explained as to how quarter-wise analysis of the information submitted by the petitioners has helped the Authority in making appropriate analysis when the information pertaining to POI which is comprised of 9 months is compared with two full years.
This issue had also been raised by some of the importers in the Civil Writ Petition No. 4629/2001 and 718/2002before the Hon'ble High Court of Rajasthan at Jodhpur. The Hon'ble High Court in its order dated 29.05.2002 hasheld that there is no illegality in the order of Initiation of investigation, much less the jurisdictional error and therefore, the Hon'ble Court did not consider it necessary to interfere with the Initiation Notification. The issue of POI has been dealt with under Para G7.1 and 7.2 of the Preliminary Findings. It is a common knowledge that lot of companies prepare quarterly reports of their working results. The Authority, considered it appropriate to select a POI comprised of three complete quarters of a year instead of a POI which began or ended in the mid of a quarter. Therefore, in the views of the Authority there is nothing improper in the selection of the POI as January-September, 2000.
12.2 Product Under Consideration and Like Article:a) The product under consideration in the present investigation is Certain Polyester Staple Fibre, generally knownas "PSF" in commercial market parlance conforming to the following description:
"Polyester Staple Fibre of various lusters, of Deniers ranging from 0.8 to 4.5, of round/circular cross sectionand of all cut lenthlstaple lengths (excluding speciality products, namely, Dope Dyed, Cationic Dyeable,Easy Dyeable, Low Pilling or Anti Pilling, Hollow PSF. Fire Retardant, Low Melt, Conjugate, Bicomponentand Fibrefill)"
b) It has been argued by the importers and exporters that the petitioners have made an incorrect statement that the petitioners'are like articles as compared to the product alleged to be dumped and that the alleged dumped imports are technically and commercially substitutable to the goods manufactured by the Domestic Industry. Further it has been argued that the petitioners did not clarify that the product under the general description of PSF fall under the three different categories i.e.(i) Fibre suitable for manufacture of high quality sewing threads and industrial textileswhich is of `Super High Tenacity'(SHT Fibre), (ii) Fibre suitable for manufacture of apparels fabrics which is of`Normal Tenacity'(NT Fibre) and (iii) Fibre –fill PSF mainly used as filling material. SHT and NT fibre are notinterchangeable and substitutable commodities. Therefore SHT fibre ought to have been excluded from the purviewof the investigation as it is a distinct and different commodity from the article subject to investigation.
c) M/s. Pen Fibre, Malaysia have argued that petition fails to set out the technical specification of the productmanufactured by the petitioners i.e. in terms of tenacity, elongation, number of crimp, degree of crimp, fibre lengthand TiO2 content. Further it has been argued that Pen Fibre's product are known by the specifications of super bright having a TIO2 content of Zero whereas the domestic industry products in variably have a TiO2 content.
d) The Authority observes that in the petition made by the Domestic Industry the description of the product underconsideration has been clearly given as :
"Polyester Staple Fibre of various lusters, of Deniers ranging from 0.8 to 4.5, of roundlcircular cross sectionand of all cut lengths/staple lengths (excluding specialty products, namely, Dope Dyed, Cationic Dyeable,Easy Dyeable, Low Pilling or Anti Pilling, Hollow PSF, Fine Retardant, Low Melt, Conjugate, Bicomponentand Fibrefill)"
Further, the petition also mentioned that the technical specifications of the subject goods are defined interms of their deniers, lusters like semi dull, bright, semi bright, full dull etc., colour, cross section and cutlength or staple length. It was also stated in the petition that the subject goods are used to spin yarn of104% PSF or in blends with natural, artificial and for synthetic stable fibres for manufacture of Apparel/House holds Textiles, 100 % Polyester Sewing thread, other industrial textiles and for manufacture ofwaddings.
e) The Authority finds that the description of the product as in the petition and the Initiation Notification did notexclude Super High Tenacity and Law Elongation Fibre. The Domestic Industry has adequate capacity to produceSHT and Low Elongation Fibre to meet the market demand. It has also been informed by the Domestic industry that; they are producing this product for a very long time of more than 15 years and selling the same to the domestic manufacturers of sewing thread for their domestic/export sales:
f) In the Disclosure Statement the Authority had proposed to confirm the description of the Product underinvestigation as per the Initiation Notification dated the 25.06.2001 and Preliminary Findings dated the 16.01.2002.There have been no arguments opposing the scope of the Product under consideration or on the issue of like Article in response to the Disclosure Statement. The Authority has also observed that the product under investigation and the product manufactured by the domestic industry are either alike or have characteristics closely resembling. The Authority therefore, confirms the Preliminary Findings under para E 5.1 as regards the product under consideration.The Authority also confirms the Preliminary Findings in para F 6.2 treating the subject goods produced by thedomestic industry as like article to the product exported from the subject countries, within the meaning of Rule 2(d).
12.3. Standing of petitioners as domestic industrya) The Association of Synthetic Fibre Industry (ASFI) representing the Indian domestic PSF industry has filed thepetition in the present investigation. The participating companies viz. M/s Reliance Industries Ltd. and M/s Indo Rama Synthetics (India) Limited account for more than 71% of the domestic production of the subject goods during the Period of investigation. Whereas the supporting companies, namely M/s India Polyfibres Ltd, M/s Orissa Polyfibres Limited and M/s Terene Fibres India (P) Limited account for over 12% of the domestic production during the Period of investigation. Thus, the petitioners along with supporting companies account for over 83 % of the total Indian Production of the subject goods. It has been argued by the exporters and importers that M/s. Reliance Industries Ltd. were importers of subject goods and were therefore deemed not to form part of domestic industry. They were thus ineligible to make the application by virtue of Rule 2(b) read with Rule 5(3) (a). Further it has been argued that M/s. Indo Rama Synthetics(l) Ltd. (IRSL) is related to M/s. PT Indo Rama Synthetics TBK, Indonesia, and lndo Poly (Thailand) Ltd. which is an exporter of PSF to India. IRSL does not have the standing to file the application by virtue of Rule 2(b) read with Rule 5(3)(a).
b) The Authority observes that the petition has support of domestic industry representing 83% of the total Indian,production of the subject goods. As regards the argument that M/s. RIL being an importer, should be excluded fromthe domestic industry, the Authority notes that RIL had made imports of subject goods during the period ofinvestigation. This issue had also been raised by some of the importers in the Civil Writ Petition No. 4629/2001 and718/2002 before the Hon'ble High Court of Rajasthan at Jodhpur. The Hon'ble High Court in its order dated29.05.2002 has held that there is no illegality in the order of Initiation of investigation, much less the jurisdictionalerror and therefore, the Hon'ble Court did not consider it necessary to interfere with the Initiation Notification.
c) As regards the argument to exclude IRSL from the Domestic Industry on account of being related to theexporters in Indonesia and Thailand, the Authority observes that since the exports from Indonesia are not covered by this investigation, the objection as regards relation to any Indonesian exporter is inconsequential and not relevant. As regards domestic producer IRSL related to lndo Poly (Thailand) Ltd., the Authority has observed from the rejoinder dated 12th August, 2002 of the Domestic Industry that they have categorically declared that IRSL does not directly or indirectly control the Thai company viz. Indo Poly (Thailand) Ltd. Further both the companies are not directly or indirectly controlled by a third person nor do they together directly or indirectly control a third person. Further, none of the said companies is legally or operationally in a position to exercise restraint or direction over the other. The Authority is therefore, of the view that IRSL is not related to Indo Poly (Thaiiand) Ltd., within the meaning of Rule 2(b).
d) The Authority therefore, holds the view that the Petitioners represent the Domestic Industry within the meaning of Rule 2(b) and further they have the standing to file the petition as per the Rule 5(3).
12.4 Confidentiality of Information:a) It has been argued by the importers and exporters that the non-confidential disclosure of petition does notcontain adequate information regarding data relating to constructed Normal value, consumption norms for PSF based on the report of Dewitt and Company, prices of key raw-materials, conversion cost, fixed costs, installed capacity, market demand etc. The Authority observes that the issue relating to claiming of confidentiality by the petitioners had been examined at the stage of Initiation of Investigation. The petitioners had claimed: confidentiality on certain information of the petition which was by nature confidential. Such confidential information was relating to prices, sales realization specific to products or product categories, normal value, specific adjustments and cost of production. Production figures in terms of volume and value for individual companies had been kept confidential as the disclosure of such information would reveal the details of the product mix and also the sales realization of the product under consideration. Indexed tables had, however, been provided to establish the standing of the petitioners to file the application on behalf of the domestic Industry. The petitioners had claimed confidentiality in accordance with the Rule 7. The authority had treated the information claimed as confidential by the petitioners to be confidential.
b) As regards the arguments made by various exporters/importers regarding non-disclosure of material informationby the petitioners, the authority is of the view that information relating to cost of production based on whichconstructed normal value had been claimed is information of confidential nature. Similarly information relating toprices, sales realization specific to products or product categories covered by the investigation is also information by nature confidential and is commercially sensitive. The authority considers it to be treated as confidential within Rule 7(1). The Authority also does not find any merit in the argument regarding non-disclosure of information relating to normal value and export price determination in respect of such exporters whose data relating to normal value and export price has been considered and accepted by the Designated Authority in the preliminary findings. The issue regarding claiming of confidentiality of certain information by the petitioners had also been dealt with by the Hon'ble High Court of Rajasthan in their judgment dated 29.5.02. The relevant extracts of the order read as under:
"45 ... . .. The petitioners have also halfheartedly challenged the validity of sub-rule (7) of Rule 6, whichpertains to confidentiality of the information. The Rule provides that any information provided to theDesignated Authority on a confidential basis by any party shall not be disclosed to any other party withoutspecific authorization of the party providing the information, if the Designated Authority is satisfied that it isconfidential…. The evidence relating to the normal value, export price, costing, profitability, specificadjustment in pricing etc. are examples of such information, which is usually accepted by the Authority asconfidential. Such a confidentiality being in the larger public interest, we do not find any illegality with thesaid provision. "
Therefore, the Authority does not find merit in the arguments put forth by various importers and exporters regarding non-availability of certain information claimed as confidential by a petitioners. The Authority also holds the view that in accordance with Rule 16, the Disclosure Statement contained the essential facts under consideration of the Authority which formed the basis for the Final Findings.
12.5 Time limit for completion of final findings:It has been argued by one of the exporters that one year from the date of initiation notification dated 25.6.2001 and therefore, the Designated Authority has failed to comply with the time limit prescribed in Rule 17 for completion of final findings. As such the Designated Authority does not have any jurisdiction to come to any final determination or to recommend the imposition of any anti dumping duty in the present investigation. Further it has been stated that the period of one year has not been extended by the Central Government. The Designated Authority confirms that in accordance with Rule 17, the Central Government has extended the time limit of the present investigation by six months i.e. up to 24.12.2002.
12.6 Examination of Claims regarding Normal value, Export price at Dumping Margin.As brought out in the preliminary findings, the Designated Authority sent questionnaires to known exporters of thesubject goods in subject countries. Responses were received from the following exporters:
(i) M/s Kangwal Polyester Co., Ltd., Thailand.
(ii) M/s Tuntex (Thailand) Public Co. Ltd., Thailand
(iii) M/s Far Eastern Textile Ltd., Taiwan
(iv) M/s Teijin Polyester (Thailand) Ltd.
(v) M/s Teijin (Thailand) Ltd.
(vi) M/s Penfibre SDN.BHD., Malaysia.
(vii) M/s Huvis Corporation, Seoul, Korea
12.7 Korea RP
a) Normal ValueNeither the Korea R P producers nor the exporters of Korea R P origin material, to India except M/s HuvisCorporation furnished any information in response to the initiation notice.
M/s Huvis Corporafiion stated that they haven't been exporting the product under consideration to India since it was established on 1st November 2000. No information has been received subsequent to the preliminary findings and in response to the Disclosure Statement. In view of non-submission of information, by producers /exporters from Korea R P, the Authority has treated the exporters from Korea RP as non-cooperative. The Authority has relied upon `facts available' as per Rule 6(8) with regard to the normal value and the normal value as determined for preliminary findings has been adopted for the final findings.
12.7(b) Export Price:As there is no complete response from any exporter from Korea RP, the Designated Authority confirms the exportprice as determined in preliminary findings in respect of exporters from Korea.
12.8 MALAYSIA:
a) Normal value : The response was received only from M/s Penfibre SDN. BHD. At the preliminary finding stagethe Authority had observed that the domestic sales were affected at a loss. Subsequent to the preliminary findingsM/s Penfibre has made following arguments regarding Normal value determination:
(i) While Designated Authority has accepted the cost of production including selling and administrativecosts given by M/s Penfibre, it has added an unknown percentage towards profit to arrive at a Normalvalue.
(ii) It has not been disclosed what the Normal value has been worked out.
(iii) It has been incorrectly observed that the domestic sales were affected at a loss.
(iv) The fact is that some part of the domestic sales were at a minor loss but major part of the sales were notat a loss.
M/s Penfibre in response to the Disclosure Statement. The Authority observed that for the preliminary findings theNormal value had been considered by provisionally accepting the cost of production including selling andadministration cost. The Authority has analyzed the data relating to domestic sales and has found that '"""% of total domestic sales are below the cost of production and selling, administration & general costs. As such sales are more than 20% of total domestic gales of subject goods, the remaining profit making sales have been considered for determining the Normal value in accordance with Anti-dumping Rules read with Annexure-I para-2. The weighted average sales price of these domestic sales is US$ *** which has been treated as the Normal value for M/s Penfibre SDN. BHD.
b) Export Price:The Authority had considered and accepted the information regarding exports to India as furnished by M/s Penfibre. The weighted average export price after allowing adjustments as claimed by the exporter had been considered as US$ *** for the preliminary findings. No comments have been received on the export price determination in response to the Disclosure Statement. The Authority confirms the same export price far the final findings.
c) Other exporters from Malaysia:There is no response from any other exporter from Malaysia. The Authority confirms the Normal value determined for other exporters in the preliminary findings that was based on the estimated cost of production of subject good The export price as defined for other exporters in the preliminary findings has been confirmed.
12.9 THAILANDThe responses were received from M/s Kangwal Polyester Co., Ltd.; M/s Teijin Polyester (Thailand) Ltd.; M/s Teijin(Thailand) Ltd.; and M/s Tuntex (Thailand) Public Co. Ltd., Thailand.
i) M/s Kangwal Polyester Co., Ltd.
M/s Kangwa! Polyester Co., Ltd. informed that they dad not export to PSF during the Period of investigation.
ii) M/s Teijin Polyester (Thailand) Ltd
The Authority recalls its preliminary findings. The data furnished was examined and it was observed that the exporter claims to have exported only Grade Super High Tenacity to India during the Period of investigation. The data submitted had been provisionally accepted for the preliminary findings.
The Authority has analyzed in detail the data furnished by the exporter regarding the domestic sales and found that ***% of the domestic sales are below the cost of production plus SGA as claimed by the exporter in appendix - 9. As these sales are more than 20% of the domestic sales of subject goods, the remaining profit making sales have been considered for determining the Normal value in accordance with Anti-dumping Rules read with Annexure-I para-2.This methodology had been informed to the exporter in the Disclosure Statement and no comments thereon havebeen received: The weighted average sales price of these domestic sales is US $ *** which has been treated as the Normal value for M/s Teijin Polyester (Thailand).Ltd.
iii) Export Price:
M/s Teijin Polyester (Thailand) Ltd. had furnished information regarding exports of 4357,500 kg PSF to India statingthat these are not direct sales to any customers in India. These sales are to an agent who in turn sells the articles to customers in India. As per the information in appendix -2 of the questionnaire the export price is indicated on FOB Bangkok basis. To arrive at the export price at ex-factory level the adjustment shown in appendix - 4 on account of handling and taxes had been considered. In response to the Disclosure Statement, the exporter has clarified that commission paid @ ***% to their agent and taxes of US$ *** per kg should be added back to the net export price. The Authority does not find any justification to add back the amount of commission payable to an agent as the authority is considering the net export price at ex-factory level. The exporter has not demonstrated nor made out a case that the agent’s commission is paid back to them. However, the, amount of taxes of: US$ *** per kg has been added back for determining the export price sit ex-factory level: The authority has thus determined the export price of US $ ***/kg for the final findings.
iv) M/s Teijin (Thailand) Ltd.
The Authority recalls its preliminary findings. The data furnished was provisionally accepted for the preliminaryfindings. The Authority has analyzed in detail the data furnished regarding domestic sales by the exporter and found that ***% of the domestic sales are below the cost of production plus SGA as claimed by the exporter in appendix - 9.As these sales are more than 20% of domestic sales of subject goods, the remaining profit making sales have beenconsidered for determining the Normal value in accordance with Anti-durnping Rules read with Annexure-l para-2.This methodology had been informed to the exporter in the Disclosure Statement and no comments thereon havebeen received. The weighted average sales price of these domestic sales is US $ *** which has been treated as the Normal value for M/s Teijin (Thailand) Ltd.
v) Export price
M/s. Teijin (Thailand) Ltd. had furnished information regarding exports of 1587,076 kg PSF to India stating that these are not direct sates to, any customers in India. These sales are to an agent who in to customers in India. As per the information in -appendix -2 of the questionnaire the export price is indicated on FOB Bangkok basis. To arrive at the export price at ex-factory level the adjustment shown in appendix - 4 on account of handling and taxes had been considered. In response to the Disclosure Statement, the exporter has clarified that commission paid @ ***% to their agent and taxes of US$ *** per kg should be added back to the net export price. The Authority does not find any justification to add back the amount of commission payable to an agent as the authority is considering the net export price at ex-factory level. The exporter has not demonstrated nor made out a case that the agent's commission is paid back to them. However, the amount of taxes of US$ *** per kg has been added back for determining the export price at ex-factory level: The authority has thus determined the export price of US $ ***/kg for the final findings.
vi) M/s Tuntex (Thailand) Public Co. Ltd., Thailand
M/s. Tuntex (Thailand) Public Co. Ltd., Thailand. Infer-alia, stated that during the investigation period, their exports of PSF to India have been made to two companies.
At the preliminary finding stage M/s Tuntex (Thailand) had stated that one of these importers in India has cleared the same under Government of India’s Duty Exemption Scheme against Advance License without payment of duty. The other importer is an E.O.U. and is exempted from payment of customs duty on raw materials imported by them. Such imports do not also attract anti-dumping duty, wherever it has been introduced. Pursuant to that, they believe that exports of their company are out of the purview of the investigation. On the basis of the above, they submitted that their company, Tuntex (Thailand) Public Co., Ltd. should be excluded from this investigation.
While making the preliminary determination the Authority had noted that there are certain exemptions dependingupon the status of the users or the end-use of the imports, however, there is no provision for exclusion of the same while determining the individual dumping margins for the exporters. Thus; the data furnished was examined and provisionally accepted for the preliminary findings. The exporter has reiterated their earlier stand that since their exports during the investigation period were exempted from the payment of any duty so their exports may be kept outside the purview of the investigation. The Authority is of the view that the Anti-dumping Rules do not contemplate to exclude from investigation such imports which are cleared duty-free in India. Moreover, such imports in any case substitute the domestically produced goods. The Authority has analyzed in detail the data furnished by the exporter and found .that ***% of the domestic sates are below the cost of production plus SGA as claimed by the exporter in appendix - 9. As these sales are more than 20% of domestic sales of subject goods, the remaining profit making sales have been considered for determining the Normal value in accordance with Anti-dumping Rules read with Annexure-I para-2. In response to the Disclosure statement the exporter has stated that the weighted average of invoice price of all the transactions that are above the ex-factory cost (without adjustment) should be the normal value. According to the exporter, the method followed by the Authority to determine the profitable sales by reducing the invoice price of each transaction with adjustments does not seem to be appropriate. The Authority is of the view that the correct method to determine the profitable transactions under Anti-dumping Rules read with Annexure-I para-2 is to examine each domestic sale transaction with reference, to the cost of production at ex-factory level. These is thus nothing incorrect in the method followed by the Authority for determining the profitable domestic sales transactions. The weighted average sales price of the profit making domestic sales is US $ *** which has been treated as the Normal value for M/s Tuntex (Thailand) Public Co. Ltd.
vii) Export Price: - .
The Authority had considered and accepted the information regarding exports to India as furnished by M/s Tuntex.The weighted average export price after allowing adjustments as claimed by the exporter had been considered asUS$ *** for the preliminary findings. The Authority confirms the same export price for the final findings.
viii) Other exporters from Thailand:
There is no response from any other exporter from Thailand. The Authority confirms the Normal value determined for other exporters in the preliminary findings that was based on the estimated cost of production of subject goods in accordance with Rule 6(8). The export price as determined for other exporters in the preliminary findings has been confirmed.
12.10 TaiwanThe response was received only from M/s Far Eastern Textile, Ltd. Taiwan.
i) M/s Far Eastern Textile. Ltd. Taiwan
M/s Far Eastern Textile, Ltd. Taiwan had responded to the questionnaire but the Authority had found that theresponse was incomplete and deficient in several respects as stated in the preliminary findings. The Authority hadbeen constrained to rely upon `facts available' with regard to the normal value and export price for preliminaryfindings. The Normal value was determined on the basis of information provided by the petitioner on the basis ofestimated cost of production of subject goods. Subsequent to the preliminary findings the exporter has furnishedmore information and documents relating to export & domestic sales invoices, basis of adjustments claimed fromexport price, inland freight schedule and statements relating to cost of production etc. The Authority has alsoconducted, through a verification team, an on the spot verification at Taiwan of the information furnished.
a) PRODUCT CLASSIFICATION
M/s. Far Eastern has categorized the PSF exported to India into four categories based on length and brightness ofthe fibres. It is observed that the gradation/ classification of fibres on the basis of length is not appropriate as the only difference in cost and specification of the product is due to the brightness of the fibre. The basic raw materials and production process is the same irrespective of the size of the fibre. Same product of different cut length has common cost up to the point of cutting and the cost of cutting is so insignificant that it cannot term the product as different. Accordingly, the products have been classified in two categories on the basis of brightness i.e., semi-dull (AA & CC) and bright & optical (BB & DD) for the purpose of comparison of Normal Value and Export Price.
b) COST OF PRODUCTION:
M/s. Far Eastern Textiles Ltd. maintains quarterly Audited Accounts and calendar year is the accounting year for the company. The company furnished the Audited Accounts for the three quarters period i.e. January -Sept., 2000(period of investigation) so as to form the basis for calculation of cost of production.
During the course of verification it was observed that the company had claimed cost of production of PSF coveredunder investigation based on cost of production of certain types of chips. The cost of virgin raw material andwastages used in the manufacture of those types of chips was found to be not appropriate. Accordingly the Authority adopted the average cost of chips of all categories to arrive at the cost of production of PSF. Detailed methodology adopted for determination of cost of production of chips and PSF covered by the investigation had been separately forwarded to the exporter on confidential basis along with the Disclosure statement. In response to the Disclosures the exporter has furnished detailed information relating to the SGA costs allocation to the subject goods covered by the investigation. The Authority has considered the same and found as appropriate. Accordingly based on the information verified by the Authority, the cost of production has been separately arrived at as NT $ ***Mt and NT$ ***/Mt for semi-dull PSF and bright & optical PSF respectively.
c) Normal Value determination
The company has furnished transaction wise details of sales made in the home market of all types of PSF coveredunder the investigation. The information was verified with the basic records of sales and invoices and found to becorrect. As per Para 2 of Annexure I of Rules the domestic sales of the product under consideration were comparedwith the cost of production plus selling administrative and general costs as determined above. It was observed that both in the case of semi dull and bright and optical PSF more than 201% of the domestic sales were found to be below the cost of production. The normal value has therefore been based on the remaining profit making sales of the two types of PSF. The Normal Value determined is NT $ *** per kg and NT $ *** per kg for semi dull PSF and optical & bright PSF respectively.
d) Export Price
The exporter has furnished invoice wise details of exports made to India during the period of investigation. Theinformation submitted was verified with the basic records and invoices and found to be in order. Adjustments claimed on account of ocean freight, insurance, commission, bank charges, inland freight, customs and harbor charges was verified and found to be in order. After considering the adjustments claimed and duly verified the ex-factory Export Price of semi-dull PSF and bright and optical PSF has been determined as NT$ *** per kg and NT$ *** per kg respectively.
ii) Other exporters from Taiwan:
There is no response from any other exporter from Taiwan. The Authority confirms the Normal value in respect ofother exporters as determined for the exporters from Taiwan in the preliminary findings that was based on theestimated cost of production of subject goods as per Rule 6(8). The export price as determined for other exporters in the preliminary findings is also confirmed.
13. Dumping Margin:Based on the normal value and export price determined as above, the dumping margin for the exporters has beendetermined as under:
| Country/Exporter | Normal Value | Export Price | Dumping Margin (%) |
| Korea-all exporters | *** | *** | 70.03% |
| Malaysia-M/s. Penfibre SDN | *** | *** | 41.02% |
| Thailand-M/s. Teijin Polyester (Thailand) Ltd. | *** | *** | 9.02% |
| Thailand-M/s Teijin (Thailand) Ltd. | *** | *** | 19.68% |
| Thailand-M/s. Tuntex (Thailand) Public Co. Ltd., Thailand | *** | *** | 16.36% |
| Thailand-Other exporters | *** | *** | 49.38% |
| Taiwan-M/s. Far Eastern Textiles Ltd. | *** | *** | 19.92% |
| Taiwan-All other exporters | *** | *** | 46.56% |
D. INJURY AND THREAT OF INJURY14. Rule 11 of Anti Dumping Rules reads as follows:
"Determination of Injury:
(1) In the case of imports from specified countries, the designated authority shall record a further finding thatimport of such article into India causes or threatens material injury to any established industry or materiallyretards the establishment of any industry in India;
(2) The designated authority shall determine the injury to domestic industry, threat of injury to domesticindustry, material retardation to establishment of domestic industry and a causal link between dumpedimports and injury, taking into account all relevant facts, including the volume of dumped imports, their effecton price in the domestic market for like articles and the consequent effect of such imports on domesticproducers of such articles and in accordance with the principles set out in Annexure II to these rules."
15. The principles for determination of injury set out in Annexure-II of the Anti- Dumping Rules lay down that:
a. A determination of injury shall involve an objective examination of both (a) the volume of dumped importsand the effect of the dumped imports on prices in the domestic market for like article and (b) the consequentimpact of these imports on domestic producers of such products.
b. While examining the volume of dumped imports, the said Authority shall consider whether there has been asignificant increase in the dumped imports, either in absolute terms or relative to production or consumptionin India. With regard to the effect of the dumped imports on prices as referred to in sub-rule (2) of Rule 18the Designated Authority shall consider whether there has been a significant price under-cutting by thedumped imports as compared with the price of like product in India, or whether the effect of such imports isotherwise to depress prices to a significant degree or prevent price increase which otherwise would haveoccurred to a significant degree.
16. Views of Exporters, Importers and Associations:The arguments raised by exporters, importers, Associations on injury have been stated in detail in earlier part ofthese findings and these are not being repeated here for sake of brevity.
17. Views of Domestic Industry:In addition to what had been stated by the domestic industry at the stage of Preliminary findings, the domesticindustry has made following arguments in their rejoinder:
a) Profits in the Balance Sheets of the Petitioner Companies:
Referring to the argument of the opposite parties that the petitioner companies are showing profit in their balancesheet and P& L Account for the year 2000-01 it has been stated by the domestic industry that under the Anti-dumping law; the authorities are required to examine the financial condition only with respect to the product under consideration and not with respect to the company as a whole.
b) Injury analysis based on annualized figures:
As regards the arguments of some of the exporters and importers that there is no need for annulization when theactual figures of imports for the year 2000-01 are available with the Authority, the domestic industry has contended that such an argument is not supported by the practice, jurisprudence and the law on the subject. As per the domestic industry it is common knowledge that the purpose of selecting a particular period of investigation is to freeze the period for which a detailed analysis is required to be carried out. If the period is not frozen for this detailed examination, the dumping margin as well as injury analysis would become an endless exercise as there would be no end to admission of fresh evidence throughout the investigation
c) Price under cutting:
The argument of Indian Spinners' Association (ISA) that there is no price under cutting as the landed value ofimported goods is less than the selling price of domestic industry is not correct. The argument of ISA is apparentlybased on incorrect assumptions. As they have taken into account the aggregate import price of all PSF whereas the investigation is only for certain types of PSF. ISA has taken the figures of the year 2000-01 whereas the POI isJanuary-September, 2000.
d) Price under selling:
It has been the case of domestic industry that there is considerable amount of price under selling due to which thedomestic industry has not been able to earn a fair return on its investments.
e) Threat of Injury:
It has been argued by ISA and others that the examination of the threat of injury has not been done properly by the Designated Authority. As per the domestic industry Para (VII) of annexure –ll of the Anti-dumping rules nowhere provide that each one of the factors indicated in the said Para should be satisfied individually. Further they have drawn attention to article 3.7 of the WTO agreement, which states as under:
“No one of these factors by itself can necessarily give decisive guidance but the totality of the factorsconsidered must lead to the conclusion that further dumped exports are imminent and that, unless protectiveaction is taken, material injury would occur”.
18 Examination by the Authority:The Authority recalls its preliminary findings on injury. The arguments raised by exporters, importers,Associations and domestic industry on injury have been stated in detail in earlier part of these findings and these are not being repeated here for sake of brevity. The authority has examined all these submissions to the extent these are relevant to these findings.
19. The Authority has taken into account various indices regarding injury while doing the final determination.This involved all relevant facts viz., volume of dumped imports, their effect on price in the domestic market and itssubsequent effect on domestic producers, production, capacity utilisation, profitability, net sales realisation etc. Whiledetermining the non-injurious price for the like article for the domestic industry, the Authority has considered theoptimum cost of production for the domestic industry which would take into account the normated best consumptionnorms and would also take into account the actual price of the raw materials during the POI which go into theproduction of the product under consideration. Also, while arriving at the injury margin, the Designated Authority hastaken into account optimum capacity utilisation for arriving at a fair selling or non-injurious price.
20. Volume of ImportsThe volume of imports of subject goods from subject countries and their share in total imports is as under:
| | 1998-99 | 19992000 | Jan-Sep 2000 (POI) | POI Annualised |
| Imports from ,tries subject countries Qty. Mt | 10290 | 9228 | 8119 | 14202 |
| Total imports of subject goods (MT) | 12900 | 9625 | 8488 | 14847* |
| Share of imports from subject countries | 79.76% | 95.87% | 95.65% | 95.65% |
*Annualized on the same basis as for the imports from subject countries.
The Authority has taken note of the various arguments raised by the importers, exporters and. users 'Associations that. annualisation of the import data for comparison purposes not correct. It bad also been argued that when actual data is available for full year 2000-2001 then comparison should have been done with the data of full year 2000-01. The Authority notes that POI is January-September 2000 Therefore, use of data subsequent to the period of POI selectively 'for assessment of one injury parameter may not be appropriate. The Authority has also found that as per responses received from cooperative exporters from Thailand, Malaysia and Taiwan the total imports of subject goods during POI had been to the extent of 14009MT. There is every possibility of exports by some other non-cooperative exporters from these countries as well as by exporters from Korea RP. Thus the authority does not find the annualized figures of imports, of 14202 MT of subject goods from subject countries as unreasonable or inappropriate. There was an increase of 54% in imports of subject goods from subject countries during POI (annualized) over the year 1999-2000. The Authority thus notes that there has been a significant increase in the volume of imports of subject goods from the subject countries in absolute terms.
Production and capacity utilization of the domestic industry21. The production and capacity utilization of the domestic industry has been as under:-
Production: MTs
| | 1998-99 | 1999-2000 | POI |
| Production of petitioner companies* | 100 | 104.24% | 106:52% |
| Capacity utilization | 94.68% | 98.70% | 100.88% |
*Indexed figures
The Authority notes that there has been increase in the production of the petitioners in the POI in comparison to previous years, The rapacity utilization of the petitioner domestic industry has been higher than the installed capacity.
22. Sales Volume: As regards the sales volume of the domestic industry, it is noticed that the volume of sales (annualised) by the petitioner domestic industry declined by 2.05% during the period of investigation over the preceding financial year i.e., 1999-2000.
23. Mart ShareThe Authority has assessed the share of imports from, subject countries and the petitioner domestic industry. For this purpose, the demand had been assessed as total imports -of -subject goods and the domestic sales of the petitioner domestic industry. The Authority finds the share of the imports from subject countries and the petitiorter domestic industry as under
| | 1998-99 | 1999-2000 | POI Annualised |
| Share of Imports from subject countries | 3.37% | 2.60% | 4.03% |
| Share of Petitioner domestic industry | 95.72% | 97.25% | 95.77% |
The Authority finds that tie shire of petitioner domestic industry has declined during the POI in comparison to the previous year. Whereas the share of imports from subject countries in demand has increased.
24. Price Under cutting:The Authority finds that average net sales realization of the domestic industry during the POI has been Rs. "`** per kg. This has been compared with the average landed value of imports of the subject goods from subject countries (based on the information received from the cooperating exporters). The price under-cutting has been found to be in the range of Rs. *** per kg to Rs.***lkg. For the purpose of comparison of landed value with the net sales realization, the Authority has considered the landed value at the point of import of subject goods into India and the net sales realization value is taken without the, Excise Duty. The Authority finds that there is significant price undercutting by the dumped imports from the subject countries.
25. Price Suppression:The Authority finds that the domestic industry has been able to raise its selling price to Rs. *** per kg. during the POI from previous level of Rs. *** per kg. However, in view of dumped imports ,the domestic industry has not been able to raise the selling price to a level to recover its full cost of production and to achieve a reasonable return. The average landed value of imports of subject goods from subject countries is significantly lower than the non-injurious price of the domestic industry. This has prevented the domestic industry to raise its selling price" to a remunerative level. The Authority thus concludes that the dumped imports have caused price suppression of the like product produced by the domestic industry.
26. InventoryThe Authority notes that the inventories of the finished goods of the domestic industry have declined during the POI.
27. Demand of the Product:The Authority finds that the demand of the product has not decreased and has, therefore, not contributed to injury to the industry.
28. Profitability and return on investment:It has been claimed by the domestic industry that dumping by the subject countries has had a significant impact on the net sales realization by the domestic industry for the subject goods. To hold on to its market share, the petitioners had to compete with low priced offers/imports of subject goods from the subject countries. Due to the large scale dumping by the subject countries, the domestic industry has suffered losses on their sales despite high level of capacity utilization. The landed value of the dumped imports also indicates that there is considerable price suppression taking place. This has adversely affected not only the profitability of the domestic industry but also their cash flows and working capital.
It has also been argued that exporters from different countries, which have dumped subject goods in India during the nine months of POI, were offering their products at different prices. The customers/Users, however tried to take advantage of the lowest offers under such a -situation. The domestic industry could not afford to have ignored any one of them. On a month to .month basis, one exporter from each one of these subject countries was the lowest price supplier. Their relative pricing position kept on changing but the complainant domestic industry had to respond to the lowest quotes offered in the market place to protect the market share and to ensure that the customers do not go away. In support of the above contentions, the domestic industry has submitted some evidence. However, the Authority is of the view that the same cannot be considered as conclusive indication of the argument advanced.
29. Return on Investment (Capital employed):The domestic industry has submitted adequate information to substantiate its claim that Return on Capital Employed (ROCS) has been negative during the period of investigation. The return has not been sufficient every to recover the full interest costs the companies had to bear. It has been claimed that the domestic industry is entitled to a fair return on its investment but due to the price effect of the dumped imports, the domestic industry has not been able to realize a fair price. The Authority has analysed the financial information provided by the domestic industry and has also got the verification done. It has been- seen that the return on capital employed has been negative for the domestic industry, which is a critical aspect of the injury to the domestic industry.
30. Wages:The authority finds that there was no impact on wages as it is not feasible under the existing situation to vary the wages in line with the financial performance of the company.
31. Sales Prices:The Authoriy notes that there is improvement in the sales prices over the last few years. It has been claimed by the domestic industry that the increase in price is due to the increase in the cost of the raw materials. The Authority finds that the increase in domestic prices was predominantly on account of increased cost of production.
32. Actual and potential negative effect on cash flows and Ability to raise capital:It has been argued that as far as M/s Reliance Industries Ltd. is concerned, it is a multi-product Company and integrated to a large extent. It borrows working capital for the corporate body as a whole. However, in the case of M/s Indo Rama Synthetics Limited, it has been claimed that the cash flow position was precarious. The company was forced to seek rescheduling of its loan repayments to avoid default to lending institutions. The Authority is of the view that the ability to raise capital and the negative cash flows could be a function of several factors and therefore, these have not been considered as valid parameters for the purpose of these Findings.
33. Evidence of host contracts:It has been argued that the domestic industry tried its best to hold on to the customers. Yet the fact that over 8000 MT of dumped imports arrived into India during the period of investigation is adequate evidence that it lost potential customers. The domestic industry expressed its inability to furnish any evidence in this regard due to the nature of the market, which is not based on tenders, but the goods are sold through agents.
34. Employment:The Authority finds merit in the argument advanced by the domestic industry that it continues to operate its plants at full capacity and, thus, the impact on employment cannot be a relevant factor.
35. Threat of Injuryi) Annex II to the Anti-dumping Rules provides for the assessment of threat of injury to the domestic industry.
The relevant paragraph reads as under:
"(vii) A determination of a threat of material injury shall be based on facts and not merely on allegation, conjecture or remote possibility. The change in circumstances which would create a situation in which. the dumping would cause injury must be clearly foreseen and imminent. In making a determination regarding the existence of a threat of material injury, the designated authority shall consider, infer olio, such factors as
(a) a significant rate of increase of dumped imports into India indicating the likelihood of substantially increased importation;
(b) sufficient freely disposable, or an imminent, substantial increase in, capacity of the exporter indicating the likelihood of substantially increased dumped exports to Indian markets, taking info account the availability of other export markets to absorb any additional exports;
(c) whether imports are entering at prices that have a significant depressing or suppressing effect on domestic prices, and would likely increase demand for further imports; and (d) inventories of the article being investigated."
ii) The Authority recalls its Preliminary Findings as regards threat of material injury. It has been argued by the exporters and importers that there is no threat of material injury as claimed by the petitioners and all the factors enshrined under the Rules were not present. The domestic industry has argued that para vii of Annex II of the Rules nowhere provide that each of the factors stated should be satisfied individually.
iii) The domestic industry has submitted that the data published by leading constancy firms like Tecnon, PCI etc. clearly indicates that there is a massive surplus capacity of 14,85,000 MTs in these 4 countries. The growth of consumption in these countries is minimal compared to the huge excess capacity and huge excess production they cumulatively have. The huge surplus production capacity over consumption and huge actual production over consumption constitutes respectively 14,85,000 MTs/annum and 11,94,000 MTs/annum. This is 2.65 times and 2.13 times the annualised Indian consumption respectively during the period of, investigation. Thus, it has been argued that this huge over capacity is like a hanging sword over the applicant/petitioner Indian Industry. It has the capability not only to intimidate/affect the Indian industry materially, but also to obliterate Indian industry in total. In addition to the above, the significant increase in dumped imports and price underselling clearly indicate the threat of ijury to the domestic industry.
iv) The Authority has analysed the factors, which need to be considered for assessing whether there is any threat to the domestic industry from the alleged dumped imports. The Authority notes that there is ample evidence to show that there is surplus capacity available in the subject countries, which could be a matter ofi concern for the financial performance of the domestic industry. There is also evidence of increased imports from the subject countries during POI in comparison to previous year. There is also every likelihood of substantially increased imports from these sources in view of huge production in these countries. At the same time, the above analysis clearly indicates that due to the dumped imports from the subject countries, there has been a significant impact on the prices of the domestic industry. The dumped imports have led to price under-cutting, price suppression of the domestically produced subject goods. The Authority is of the view that the domestic industry has been able to demonstrate a case of threat of injury in accordance with the requirements of the relevant provisions of the Anti dumping Rules.
E. CONCLUSION ON INJURY36. In view of the foregoing it is observed that: -
a) the quantum of imports from the subject countries has increased in absolute as well as in relative terms;
b) the market share of the Petitioner Companies has gone down;
c) the domestic industry has been forced to sell at reduced prices that have resulted in losses;
d) imports are significantly depressing the prices of the domestic industry;
e) dumped imports have led to significant price under-cutting of the domestically produced subject goods;
f) there has been decline in the Sales volume of the Petitioner Companies;
g) the decline in profitability of domestic industry has adversely affected on the returns of the investments;
h) the domestic industry faces a threat of material injury from the dumped imports;
i) the Authority therefore concludes that the domestic industry has suffered material injury and threat thereof.
F. CAUSAL LINK37. In establishing that the material injury to the domestic industry has been caused by the imports from the subject contries, the authority holds that the increase in market share of imports from Korea R P, Malaysia, Taiwan and Thailand resulted in decline in the market share of the petitioner domestic industry. The volume of imports from these countries increased significantly during the POI in absolute as well as relative terms. These imports significantly depress the prices of the domestic product forcing the domestic industry to sell at unremunerative prices. The dumped imports have also led to significant price under-cutting of the domestic industry. Resultantly, the domestic industry incurred losses. The material injury and the threat thereof to the domestic industry was therefore, caused by the dumped imports from the subject countries.
37.1 On the basis of the ‘facts available’, it is observed that the imports of the subject goods from “other countries” are below the de-minimis level during the period of investigation.
37.2 Contraction of demand is not apparent and no technological development in the industry or any other such factor which could have resulted in injury to the domestic industry has been noticed.
G. INDIAN INDUSTRY’S INTEREST & OTHER ISSUES38. The purposes of anti-dumping duties, in general, is to eliminated dumping which is causing injury to the domestic industry and to re-establish a situation of open and fair competition in the Indian market, which is in the general interest of the country.
39. It is recognized that the imposition of anti-dumping duties might affect the price levels of the products manufactured using the subject goods and consequently might have some influence on relative competitiveness of these products. However, fair competition in the Indian market will not be reduced by the anti-dumping measures, particularly if the levy of the anti-dumping duty is restricted to an amount necessary to redress the injury to the domestic industry. Oh the contrary, imposition of anti-dumping measures would tenlove the unfair advantages gained by dumping practices, would prevent the decline of the domestic industry and help maintain availability of wider choice to the consumers of the subject goods. Imposition of anti-dumping measures would not restrict imports from the subject countries in any way, and therefore, would not affect the availability of the product to the consumers.
40. To ascertain the extent of anti-dumping duty necessary to remove the injury to the domestic industry, the Authority relied upon reasonable selling price of the subject goods in India for the domestic industry, by considering the optimum cost of production at optimum level of capacity utilization for the domestic industry.
41. Since the fair selling price has been worked out on normative basis, injury to the domestic industry on-account of other factors, if any, is nullified.
42. Imposition of Anti Dumping Duty in US Dollar It has been argued by some of the interested parties that recommendations of Anti Dumping Duty in US Dollars are beyond the purport of the law. The Authority notes that in the light of earlier orders of Hon'ble CEGAT Anti-dumping Duty have been imposed in US Dollar terms only.
43. Inclusion of SAD in Landed value calculation:
It has been argued by some of the interested parties that SAD should be included for landed value calculation. The Authority is of the view that it has been a consistent practice to determine the landed value as the assessable value as determined under the Customs Act, 1962 and all duties of customs except duties levied under Section 3, 3A, 8B, 9 and 9A of the Customs Tariff Act, 1975. The landed value of imports is compared with the Non-injurious price of the domestic industry for assessing injury margin. While computing the NIP for the domestic industry the element of sales tax is not included. Therefore, the comparison is at the same level. The authority thus does not find appropriate the request for inclusion of SAD for landed value calculation.
H. CONCLUSIONS44. It is seen, after considering the foregoing, that:
The subject goods described under Para 12 originating in or exported from Korea R P, Malaysia, Taiwan and Thailand
(a) have been exported to India below Normal value, resulting in dumping;
(b) the Indian industry has suffered material injury and threat thereof;
(c) injury has been caused by dumped imports from the subject countries,
45. It is considered necessary to impose definitive anti-dumping duty on all imports of the subject goods originating in or exported from the subject countries:
46. It is decided to recommend the amount of anti-dumping duty equal to the margin of dumping or less, which if levied, would remove the injury to the domestic industry (clause (d) Rule 4 supra as amended). The landed price of imports was also compared with the non-injurious price of the domestic industry, determined for the period of investigation. Accordingly, it is proposed that definitive anti-dumping duties be imposed, from the date of notification to be issued in this regard by the Central Government on the subject goods originating in or exported from the subject countries being cleared under Chapter 55 of the Customs Tariff Act. The anti-dumping duty shall be the difference between the amount mentioned in Col.3 below and the landed value of imports of the subject goods in US $ per KG.
| Countries | Name of the Producers/Exporters | (US $/, Kg-) |
| 1. | 2. | 3. |
| Korea R P | All Exporters | 1.196 |
| Malaysia | M/s Penfibre SDN.BHD., Malaysia | 1.143 |
| Malaysia | All other Exporters | 1.196 |
| Taiwan | M/s Far Eastern Textile Ltd. | 1.196 |
| Taiwan | All other Exporters | 1.196 |
| Thailand | M/s Tuntex (Thailand) Public Co. Ltd., Thailand. | 1.131 |
| Thailand | M/s Teijin Polyester (Thailand) Ltd. | 1.118 |
| Thailand | M/s Teijin (Thailand) Ltd. | 1.093 |
| Thailand | All other Exporters | 1.196 |
47. Landed value of imports for the purposes shall be the assessable value as determined under the Customs Act, 1962 and all duties of customs except duties levied under Section 3, 3A, 8B, 9 and 9A of the Customs Tariff act, 1975.
48. Subject to the above, the Authority confirms the preliminary findings dated 16th January, 2002.
49. An Appeal against this order shall lie before the Customs, Excise and Gold (Control Appelate Tribunal in accordance with the Act, supra.
Sd/-
L.V. Saptharishi, Designated Authority
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