TO BE PUBLISHED IN PART 1 SECTION 1 OF THE GAZETTE OF INDIA, EXTRAORDINARY

New Delhi, the 13^th July, 2001

No. 53/1/2000-DGAD – Having regard to the Customs Tariff Act, 1975 as amended in 1995 and the Customs Tariff (Identification, Assessment and Collection of Anti-Dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995, thereof.

1. PROCEDURE:

2. The procedure described below has been followed with regard to the investigations:-

1. The Designated Authority (hereinafter referred to as Authority), under Rules received information from reliable sources that dry batteries (hereinafter referred to as subject goods), originating in or exported from China PR (hereinafter referred to as subject country) are being dumped in India and are causing injury to the domestic industry;
2. The Authority on the basis of information and evidence available before it decided to initiate anti dumping investigations against imports of subject goods from the subject country;
3. In accordance with sub-rule 5(5) of the Rules, the Authority notified the Embassy of China PR in India about the receipt of information and evidence mentioned above before proceeding to initiate investigations;
4. The Authority issued a Public Notice dated the 20^th November 2000 published in the Gazette of India, Extraordinary, initiating anti dumping investigations concerning imports of subject goods from subject country, classified under custom sub-heading 8506.10 of Chapter 85 of the Schedule I of Customs Tariff Act 1975;
5. The Authority notified preliminary findings vide notification dated 24.1.2001 on anti-dumping investigation concerning imports of subject goods from China and requested the interested parties to make their views known in writing within forty days from the date of its publication;
6. The Authority forwarded a copy of the preliminary findings to the known interested parties, who were requested to furnish their views, if any, on the preliminary findings within forty days from the date of its publication;
7. The Authority also forwarded a copy of the preliminary findings to the Embassy of China in New Delhi with a request that the exporters and other interested parties may be advised to furnish their views on the preliminary findings in the time frame as stipulated in (v) and (vi) above.
8. The Authority provided an opportunity to the interested parties to present their views orally on 13.3.2001. All parties presenting views were requested to file written submissions of their views expressed. The parties were advised to collect copies of the views expressed by the opposing parties and offer rebuttals, if any;
9. The Authority made available the public file to all interested parties containing non-confidential version of all evidence submitted by various interested parties for inspection, upon request;
10. Argument raised by the interested parties before announcing the preliminary findings, which have been brought out in the preliminary findings notified have not been repeated herein for sake of brevity. However, the arguments raised by the interested parties subsequently have been appropriately dealt in these findings;
11. In accordance with Rule 16 of the Rules supra, the essential facts/basis considered for these findings were disclosed to known interested parties and comments received on the same have also been duly considered in these findings;
12. The period of investigation (POI) considered is 1.4.2000 to 30.9.2000;
13. ***** in this notification represents information furnished by the interested party on confidential basis and so considered by the Authority under the Rules;

3. The views expressed by various interested parties have been discussed in the preliminary findings and also in the disclosure statement. The views which have not been discussed earlier in the preliminary findings and disclosure statement and those now raised in response to the disclosure statement are discussed in the relevant paragraphs herein below to the extent these are relevant as per rules and have a bearing upon the case. The arguments raised by the interested parties have been examined, considered and, wherever appropriate, dealt in the relevant paragraphs herein below. The Authority confirms, the absence of any response from the exporters in the form and manner prescribed and having made the findings on the basis of the fact available to it as per rule 6(8) supra.

4 The product under investigation falls under custom heading 8506.10 and described as ‘dry cell batteries’ (more specifically primary pencil cells and batteries) especially R (AA) both in paper and metal (both heavy duty and super heavy duty) jacketed form and is used in tape recorders, toys, torches and other electronic and electrical gadgets. The goods manufactured by the domestic industry are ‘like articles’ to the goods imported from subject country within the meaning of Rule 2(d). The classification is indicative only and in no way binding on the scope of the present investigation.

5 It is clarified here that the present investigations relate to only pencil batteries, technically and commercially described as "AA", R6" or "UM3". Other types of batteries, such as rechargeable batteries, alkaline batteries, etc., are beyond the scope of the present investigation. There is no significant difference in the pencil batteries being produced by India and exported from China. They are comparable in terms of characteristics such as physical and chemical characteristics, manufacturing process and technology, functions and uses, product specifications, distribution and marketing and tariff classification of the goods. Batteries produced by the Indian industry are like articles to the batteries imported during POI from China in accordance with the anti dumping Rules.

6 There are five producers of the subject goods in India. They are –

Association of Indian Dry Cell Manufacturers are representing the interests of the various producers. As already determined in the preliminary finding, the Authority considers M/s Eveready Industries Ltd., M/s BPL Soft Energy System Ltd., M/s Matsushita Lakhanpal Battery India Ltd., and M/s Indo National Ltd., as domestic industry for the purpose of present investigation and these producers together are referred to as ‘domestic industry’ for the findings.

7. The Authority sent questionnaires to all known exporters for the purpose of determination of normal value in accordance with section 9A(1)(C). However, none of the exporters have responded to the Authority and have not furnished any information. The Authority, therefore, holds that none of the exporters from the subject countries have cooperated with the Authority as envisaged under the Rules.

8. Export Price : As stated in the preliminary findings, the import information published by the DGCIS cannot be relied upon for determination of export price of the subject product from China to India in view of inclusion of a very large type of batteries within the customs classification under which the subject product has been imported, which are not the subject matter of the present investigation. Further, even though there are different classifications for different types of batteries, clearance of different batteries under the customs classification meant for the subject product is also not ruled out. For instance, rechargeable batteries have been imported under the custom classification meant for the subject product. In view of the above the Authority is relying upon detailed transaction wise information with regard to imports of the subject goods, based on actual imports reports at various ports. The export price was determined on this basis. The Authority has determined export price on the basis of this information provided by the domestic industry.

9. Normal Value : The domestic industry has furnished information with regard to normal value, based on constructed cost of production. The normal value has been determined by the Authority on the basis of cost of production constructed for China PR in view of non-cooperation from the exporters from China PR.

10. The export price and normal value so determined have been considered as ex-works prices after making adjustments of ocean freight, insurance, etc..

11. Dumping Margin: Since none of the exporters from the subject country has responded to the Authority’s request for information, the Authority has not determined dumping margin for individual exporters. The Authority took into account the best information available for the purpose of fair comparison between the normal value and the export price and compared weighted average normal value with weighted average export price. The comparison shows dumping margin of 693% of net export price.

12. The Authority has taken into account all 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 its subsequent effect on domestic producers, production, capacity utilisation, profitability, net sales realisation etc. While determining the non-injurious price for the like article for the domestic industry, the Authority has considered the optimum cost of production for the domestic industry which would take into account the normated best consumption norms and would also take into account the actual price of the raw materials during the POI which go into the production of the product under consideration. Also, while arriving at the injury margin, the Designated Authority has taken into account optimum capacity utilisation for arriving at a fair selling or non injurious price.

13. As already stated in the preliminary finding, the most clear effect of the dumped imports has been on the prices. As against the retail selling prices of domestic industry in the range of Rs.** to Rs. ** per piece the Chinese batteries were being sold in retail market at a price of approximately Rs. 1.5 to Rs. 2.00 per piece, evidencing significant price undercutting. Even though there may not be an immediate adverse effect on the production and capacity utilisation because of the expanding domestic market, the dumped imports are causing lot of erosion in the market share of the domestic industry.

14. Increase in the share of imports: The imports from China, demand of subject goods in India and share of Chinese goods in Indian were as under :-

It is evident from the above that imports have increased significantly resulting in large presence of Chinese goods in India. It would be relevant here to point out that the imports of subject goods were placed under OGL w.e.f. April, 2000, and therefore imports in the previous period were quite regulated. The above increase in their demand is quite significant. The volume effect is also being felt in terms of inability of the domestic industry to increase its sales proportionate to the increase in the demand, thus resulting in decline in the market share of domestic industry in demand in India. As a result of significant price undercutting, the volume of imports is increasing, thus resulting in increase in the share of China in demand in India. As a direct consequence, the domestic industry has lost market.

15. Threat of injury to the domestic industry: In addition to the material injury which is already inflicted by the dumped imports on the domestic industry, the Authority has determined that imports were causing threat of material injury to the domestic industry. All the parameters relating to threat of material injury are present in the instant case, as brought out in detail in preliminary finding. The Authority has determined that –

1. There is a very significant increase in the imports in a relatively short time and there was a significant rate of increase in the dumped imports from China indicating the likelihood of further imports;
2. The imports were causing severe price undercutting in the market;
3. The exporters from China have significant freely available capacities;
4. The exporters are holding significant inventories of the subject products. Further, inventories of the subject product are rapidly increasing with the domestic industry and their stockists/dealers.

The dumped imports are thus causing threat of material injury to the domestic industry in addition to the material injury already caused to the domestic industry in the investigation period. The details regarding the increase in the volume of import and the extent of price under cutting have been discussed in the Preliminary Findings.

16. The substantial and steady increase in import of subject goods from China at abysmally low price which is not sufficient even to recover the cost of raw material of the domestic industry resulting in severe price undercutting clearly establishes the causal link between the injury already suffered as well as threat of injury being faced by the domestic industry with the phenomena of dumping of subject goods from China. The Authority, therefore, confirms its conclusion in preliminary findings that there is an obvious causal link between the dumping of subject goods from China and the injury being caused to the domestic industry during the period of investigation.

17. The Authority reiterates that the purpose of anti dumping duties in general is to eliminate dumping which is causing injury to the domestic industry and to re-establish a situation of open and fair competition in the Indian market which is in the general interest of the country.

18. The Authority again recognises that the imposition of anti dumping duties might affect the price levels of dry cell batteries in India. However, fair competition on the Indian market will not be reduced by the anti dumping measures. On the contrary, imposition of anti dumping measures would remove the unfair advantages gained by dumping practices, would prevent the decline of the domestic industry and help maintain availability of wider choice to the consumers of dry cell batteries. The Authority notes that the imposition of anti dumping measures would not restrict imports from China in any way, and therefore, would not affect the availability of the product to the consumers. The consumers could still maintain two or even more sources of supply.

19. After considering the foregoing the Authority concludes that -

1. Dry cell batteries of Chinese origin has been exported to India below its normal value;
2. the Indian industry has suffered material injury and is being threatened with further injury;
3. the injury has been caused by the imports from China.

20. The Authority proposes 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. For the purpose of determining injury, the landed price of imports is proposed to be compared with the non injurious selling price of the petitioner companies determined for the period of investigation.

21. The Authority recommends imposition of definitive anti dumping duty on all imports of dry cell batteries falling under Customs Code 8506.10 originating in or exported from China. The anti dumping duty shall be the difference between US $ 74.75 per 1000 pieces of dry batteries and landed value of import per 1000 pieces for all exporters/manufacturers from China.

22. Landed value of imports for the purpose shall be the assessable value as determined by the Customs under the Customs Act, 1962 and all duties of customs except duties under sections 3, 3A, 8B, 9 and 9A of the Customs Tariff Act,1975.

23. Subject to the above, the Authority confirms the preliminary findings dated 24.1.2001.

24. An appeal against this order shall lie before the Customs, Excise and Gold (Control) Appellate Tribunal in accordance with the Act, supra.

Back