MINISTRY OF COMMERCE
Sub: Anti ‑dumping investigation concerning
import of Acrylic Fibre from
32/1/97-ADD 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
I. The
procedure described below has been followed subsequent to the Preliminary
findings;
(a) The
Designated Authority (hereinafter also referred to as the Authority‑1ncjttifed
preliminary findings vide notification dated
the 20.10.98 with regard i.e.. anti‑dumping
investigations concerning import of Acrylic Fibre
from Japan. Portugal, Spain & Italy and requested the interested parties to
make their views known in writing within forty days from the date of its
publication,
(b) The
Authority forwarded a copy of the preliminary findings to the known interested
parties, who were requested to furnish their views, if any on the preliminary,
findings within forty days of the late of the letter;
(c) The
Authority also forwarded a copy of the preliminary findings to the Embassy of
the Japan, Portugal, Spain and Italy in New Delhi with a request that the
exporters and other interested parties may be advised to furnish their views on
the preliminary Findings;
(d)
The Authority provided an
opportunity to all interested parties to present their views orally on 3.12.98.
All parties presenting views orally were requested to file written submissions
of the views expressed orally. The parties were advised to collect copies of
the v yews expressed by the opposing parties and offer rebuttals, if any;
(e) The
Authority made available the public file to all interested parties containing
nun‑confidential version of all evidence submitted and arguments made by
various interested parties. All parties who made request for inspection, in
writing, were allowed to inspect the public file;
(f) Arguments
raised by the interested parties before announcing the preliminary findings,
which have been brought out in the preliminary findings notified have not been
repeated herein for sake of brevity. However, the arguments raised by the
interested parties have been appropriately dealt in the preliminary findings
and/or these findings;
(g) 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 same has been duly considered in these findings.
(h) ***In
this notification represents information furnished by an interested parry on
confidential basis and as considered by the Authority cinder the Mules.
B. PRODUCT UNDER
CONSIDERATION
2. The
product involved is Acrylic Fibre both in shrinkable
and non‑shrinkable form ranging from 1.5 denier
to 8.0 denier and is classified under custom code 5501.30 and 5503:30 of Custom
Tariff Act 1975, Acrylic Fibre is an economical
substitute of wool. Acrylic Fibre is produced either
through wet technology or dry technology. Acrylic Fibre
has application in day to‑day life i.e. apparel, household products and
some industrial uses.
Argument by
petitioner
3. Petitioner
has argued that tow and top are acrylic Fibre only.
In case the Fibre has 2.0 meter length, it is called
tow. In case it has variable length of less titan 2.0
meter, it is called staple fibre. Both tow and staple
can be used by a consumer in the same plant for the same purpose and thus
staple Fibre and tow have the same use. It is also
argued by the petitioner that in the earlier case of anti‑dumping
investigation from US, Korea and Thailand, duties were ferried also on tow, top
and staple. The gazette notification issued by the Designated Authority and
Ministry of Finance are public documents known to entire industry. Pleading at
this stage that the information furnished by a particular exporter is only for
staple Fibre and does not includes tow clearly shows
lack of understanding on the part of exporters. Thus tow and top are included
under the scope of investigation and Designated Authority should confirm it
preliminary findings with regard to scope of present investigations.
Argument by exporter/importer:
4. It is argued by exporter/importer that
the recommendation of Designated Authority with regard to imposition of duty on
“Tow” is without jurisdiction, arbitrary and bad in law. The petitioner had
petitioned for imposition of anti‑dumping duty on acrylic Fibre under customs code 5503.30 and initiation
notification was issued accordingly, Tow is a distinct commodity which falls
under tariff entry 5501.30. Tow was not a subject matter of investigation. By
not initiating an investigation against tow and imposing duty subsequently on
Tow, the Authority had not given a chance to submit necessary information on
Tow. Similar is the case with top. Hence these should be excluded from the
scope of investigation.
Authority
Position
5. The
Authority refer to circular No. 29 CBEC dt. 23rd April, 98 issued by Govt. wherein it
was mentioned that on the basis of report that acrylic tow and top are sought
to be cleared without payment of anti‑dumping duty, Board in consultation
with MOC has decided that acrylic top and acrylic tow are also leviable to anti‑dumping duty and past clearance if
any may also be reviewed in light of this clarification.
6. The
Authority also notes that Tow is classified at custom tariff entry No. 5501.30
and Acrylic Fibre is classified at entry No. 5503.30,
At the time of initiation, it was also indicated in
the notification that the classification is indicative only and not binding on
the scope of investigation. Tow can be converted into acrylic Fibre by cutting the tow. Even some of the exporters have
included information on tow, while responding to the questionnaire and
subsequent submission without disputing that tow is a distinct product. Further
the Authority had recommended anti‑dumping duties on tow, top and staple Fibre, the same were levied by Central Government In view
of this, the Authority considers it appropriate to
recommend duties on tow, top and staple Fibre.
Argument raised
7. M/s
Asahi,
Authority
Position
8.
With regard to argument of Asahi
to include tow and top for determination of dumping margin, the Authority notes
that the exporter has not furnished information with regard to tow and top at
the time of initiation, nor the same was made available to the investigating
team at the time of verification. The information furnished subsequent to the
preliminary findings is unverified. Further, accepting information’ at this
stage may not be fair to the other cooperative exporters from the subject
countries and the petitioners. The exporter is, however, at a liberty to file
information separately and request separate assessment.
Argument raised
9.
Modacrylic should be
excluded from the scope of investigation as it do not
answer to the description of product under consideration. This Fibre is composed of about 50% of acrylonitrile
units by weight whereas acrylic Fibre is a co‑polymer
of more than 85% of acrylonitrile. Due to unique
feature of flame retardancy, mod acrylic Fibre can not be substituted by acrylic Fibre.
Authority Position
10. The authority agrees to the argument of exporter. The petitioner has not disputed the claim of exporter. The petitioner has also agreed that Indian Industry does not currently to manufacture modacrylic (self extinguishable) Fibre. In view of this the Authority excludes the modacrylic Fibre from the scope of investigations.
C. LIKE ARTICLE
11. Acrylic
Fibre produced and sold by the domestic industry has
characteristics closely resembling acrylic Fibre
imported from Japan, Portugal, Spain and Italy and are treated as Like articles
as per the definition in the antidumping rules.
Argument
by Exporter/Importer
12. The
arguments raised by the exporters and importers on like article are as under:
(a) GK
and K 75 are specialty Fibres having a special
proprietary technology which is not available in
(b) L‑2
Low shrink, V 86 and V 85 modified special surface finish, conjugate/bicomponent Fibre, H 525 are
other specialty Fibre which should be excluded from
scope of investigation, being not Like article.
Argument
by the petitioner
13.
Petitioner has argued that claim of
the exporter about exclusion of specialty Fibre is
not correct as the Indian industry has capability, technology, plant and
equipment to produce all type of Fibres. Indian
industry has license to manufacture all types of Acrylic Fibre,
except for modacrylic (self‑extinguishable),
V76 Mohair and V86. IPCL have been making all type of Fibre
including conjugate Fibres. Consolidated Fibre & Chemicals is licensed to produce all type of Fibre which Exlan‑Toyobo
can produce. Pasupati Acrylon
is producing Fibre with license from Snea of Italy. Indian Acrylics is producing Fibre by Dupont Technology from
Authority
Position
14.
With regard to exclusion of
specialty Fibre and conjugate Fibre,
the Authority notes that the claim of the exporters that the domestic industry
does not have technology and plant & equipment to produce these Fibres is factually incorrect. IPCL has both the technology
and plant & equipment. Further, it is not denied that IPCL has been
producing these fibres. Whether these are produced
using wet process technology or dry process technology is also of little
consequence as the differences arising out of the same, if any, have also not
been substantiated. It is not necessary that each of the Indian producers
should be making such fibres. The claim of the
exporters is liable to be rejected on this account alone. Notwithstanding this
fact, the Authority notes that other Fibres being
produced by the domestic industry and those special fibers being imported from
the subject countries have also been used for the same purpose by the
consumers. Moreover, the exporters have not beer, able to substantiate their’
claim that these fibres are special fibres based on the pricing of these goods vis‑a‑vis ordinary Fibre.
The details of the prices at which goods have been exported to India does not
establish the claim of the exporters that these are special Fibre,
as the export price of ordinary Fibre and special Fibres are in the same region. The Authority notes that in
case these are special fibres, these should have
attracted higher prices in the Indian market. The Authority therefore hold that
acrylic Fibre produced and sold by the domestic
industry has characteristics closely resembling to the acrylic Fibres imported from Japan, Portugal, Spain and Italy and,
therefore, may be treated as like articles within the meaning of rules supra.
D. DOMESTIC INDUSTRY
15. The
petition is jointly filed by M/s Indian Acrylics Ltd., Chandigarh,
Pasupati Acrylon Ltd., New
Delhi, J.K. Synthetics Ltd.,
E. DUMPING
Argument of
exporter
16. M/s
Kaneka Corpn, Mitsui & Co. and
Authority’s
Position
17.
The Authority observes that Kaneka Corpn,
has claimed that they produce only Modacrylic Fibre bearing Kanecaron Brand and
Protex brand and export to
Argument by
petitioner
18. The
dumping margin assessed by Designated Authority are
significantly lower as compared to the information available with petitioner.
Authority
Position
19. The Authority has given the methodology
of calculating the dumping margin in preliminary findings. The dumping margin are based on facts and figures submitted lay the
exporters which has been verified by Authority to the extent necessary. The
petitioner has neither disputed the methodology adopted by the Authority to
calculate the dumping margin nor the facts and figures available in public file which were submitted
exporters. Thus the argument of the petitioner that dumping margin are significantly lower as compared to information available
with petitioner is too generic in nature and is not substantiated with facts.
Argument
raised
20. Calculation
of dumping margin should be done grade/denier wise by the Designated Authority
as done by Designated Authority in other case of import of acrylic Fibre from
Authority Position
21. The
Authority held at Para 11 of the preliminary findings that on the basis of the
facts available with the Authority, it is observed that the various deniers of
acrylics Fibres do not display any significant
difference in terms of the cost or prices and are in the same range. Moreover,
there is a considerable amount of substitutability among the different
varieties and therefore the Authority grouped all Fibres
(described as product under consideration) for these investigations. The
Authority notes that none of the interested parties lass disputed to the
observation of the Authority in
Argument
raised
22. The
exporters have argued that while; determining normal value and export price
certain adjustments have not been allowed by Authority in the preliminary
findings. These should be allowed. On this the petitioner has argued that Authority
has correctly disallowed the adjustments.
Authority
Position
23. The
Authority has dealt with adjustments in preliminary findings in detail. There
is no dispute by any interested party over the various adjustment allowed by
Authority. However, the exporters have argued over the adjustment
which have been disallowed. While disallowing the adjustment, the
Authority had explained the reasons for disallowing the claims.
24. Exporter
wise claims are re‑considered as under:‑
I. Asahi Chemical
Industries Ltd.,
25. Adjustment
on account of storage cost which is claimed on the basis of inventories held by
the company was disallowed in the preliminary findings. The exporter clarified
subsequent to the preliminary findings that the storage costs is warehousing
costs for storage of goods before they are sold in the domestic market. These ~
costs are paid to outside warehousing companies. Goods are sold to different
customers from different warehouses. The Authority has adopted a consistent practice
to disallow any expenses of this nature. In view of the same, the Authority
considers it appropriate to disallow any expenses on this account. Since the
exports from
26. In
the preliminary findings, the Authority disallowed the claim made on account of
discounts based on turnover and end use as the incidence of such discounts:
rebate is not ascertainable at the time of pricing decisions. The Authority*
notes that while it is not established that both amounts payable are determined
and a‑reed to at the time of entering into the contract. In fact only the
terms and conditions under which such amounts are payable are known at the time
of entering into contract. The actual amounts payable are
known only after the completion of relevant period and largely depends
on the fulfillment of certain conditions during the period. The very fact that only
those customers who fulfil these conditions are
eligible to receive the amounts establishes that the total amount payable by
the company, is not known to the company at the
beginning of the period, which is an essential condition for claiming price adjustment
on account of differences in the expenses in the two market. In view of this
the claim is not allowed.
27. In
view of this, the Authority re‑determined the dumping margin, and the
same comes to 18.26 % of export price. Since the Authority has considered Yen
to Rs. exchange in case of Asahi, it is considered
appropriate to adopt the same exchange rates for the other producers from
II. Monte
Fibre
28. The
determination of dumping in case of Monte Fibre is as
under:
(a) Prompt
payment and quantity discount at 2% is claimed on estimates. It is claimed that
it varies from 1% to 4% and therefore an average of 2% is used to claim the
deduction. The Authority disallowed the claim as it was claimed on estimated.
It is now requested that as the minimum discount was 1%, it should be allowed.
The Authority agrees with the argument and prompt payment and quantity discount
at the minimum i.e. 1% is allowed.
(b) The
claim on account of R&D, promotion and advertisement, was disallowed as the
Authority did not find justification to allow these expenses in the absence of
evidence to establish that the benefit of these activities have been restricted
to domestic sales only. The exporter has requested to reconsider the claim on
the basis that R&D cost, technical services and promotion, as these are
only in respect of the Fibres sold in the domestic
market. The Authority notes that exporter has not submitted any additional
evidence and the claim is disallowed due to reasons
already given in the preliminary findings.
(c) The
exporter had requested, during verification, to allow a deduction equal to
weighted average commission paid to Indian agent, while determining the normal
value. The Authority had disallowed the claim in the absence of substantiation
by the exporter even at the time of verification visit. They have request to
reconsider the claim on the basis that export to India are through agents
whereas sales in the domestic market was on direct basis and thus there is a
difference in the level of trade. The Authority notes that the exporter has not
submitted any additional evidence and thus the claim is disallowed due to
reasons already given in the preliminary findings.
29. In
view of above, the dumping margin is revised to 22.90% of export price.
III. Courtlauds Espana.SA
30. The
exporter had requested, during verification, to allow a deduction equal to
weighted average commission paid to Indian agent, while determining the normal
value. The Authority had disallowed the claim in the absence of substantiation
by the exporter even at the time‑ of verification visit. The exporter has
now requested to reconsider the claim on the basis that exports to India are
through agents whereas sales in domestic market was on direct basis and thus
there is a difference in the level of trade. The Authority notes that the
exporter has not submitted any additional evidence and thus the claim is
disallowed due to reasons already given in the preliminary findings. In view of
this, there is no change in the dumping margin given in preliminary findings.
IV. Fisipe
Portugal
31. The
claim on storage charges was disallowed. The claim was made on account of
storage cost on the basis of excess inventory holding by the company. The
exporter has requested to reconsider the claim as no reason has been given by Authority
for rejecting the claim. The Authority notes that the claim was made in respect
of excess inventory which the exporter is keeping in respect of sales in
domestic market. The claim is on the basis of estimates and is, therefore,
disallowed. In view of this, there is no change in the dumping margin as given
in the preliminary findings.
32. Except
for the foregoing the Authority confirm preliminary
findings with regard to dumping and dumping margin in respect of other
exporters from the subject countries.
F. INJURY AND CAUSAL LINK
33.
Petitioner
Argument: The petitioner has suffered
material injury due to:
a.
Increase in
imports from subject countries
b.
Increase in
imports in absolute terms from all countries
c.
The
increase in market share of imports and consequent decline in market share of
petitioner
d.
Losses in
spite of more than 100% capacity utilization.
e.
Increase in
closing stock
f.
Price
undercutting by imports
g.
Inability
to raise funds
h.
Inability
to take up R&D activities to develop new applications of Fibre.
Arguments by
Exporter/Importer
34. Domestic
industry has not suffered any injury in view of the fact that ‑
a) The
production, capacity utilization, sales have increased during period of
investigation,
b) Selling
prices have come down due to reduction in cost of production,
c) Profitability
of the petitioners has increased and loss making units have started making
profits,
d) Plans
for expansion have been implemented,
e) Decline
in market share is due to increase in demand which domestic industry is unable
to produce,
f) Alleged
increase in inventories is one of the lowest in the world,
g) J
K Synthetics should be excluded for the purpose of injury analysis as they have
internal problems and has nothing to do with the alleged dumping,
h) The
price depression is exclusively attributable to imports from other countries.
AUTHORITY
POSITION
35. It
is appreciated that the production, capacity utilization, sales volumes, etc.
of domestic industry have increased. The Authority, however, notes that all
relevant parameters affecting domestic industry need not establish injury. As
noted by the Authority in the para L relating to
conclusion on injury in the preliminary findings also, material injury to the
domestic industry is evidenced from the factors such as increase in quantum of
imports from the subject countries in absolute terms and relative to
consumption of Acrylic Fibre in India, decline in the
market share of the petitioner companies, inability of the domestic industry to
sell at fair price, undercutting of the selling prices of the domestic industry
by the imports from subject countries, increase in the closing stock of
domestic industry, losses being incurred by the domestic industry, etc. With
regard to the reduction in selling prices due to decline in the prices of raw
material, the Authority notes that though prices of raw material might have
resulted in decline in the selling prices, yet the fact that the domestic
industry was prevented from earning reasonable profit has not been disputed.
Since .the Authority has excluded J K Synthetics while arriving at the fair
selling price for the domestic industry, the parameters affecting J K
Synthetics deserves to be ignored.
36. In
view of the above and in the light of the arguments raised by all interested
parties, the Authority observes that the domestic industry has suffered
material injury. Further, the material injury to the domestic industry has been
caused by the dumped imports.
G. OTHER
ARGUMENTS
Arguments
raised
37.
The Designated Authority has
initiated investigation against
Authority
Position
38. The
Authority decided to initiate the investigation against the countries which
were named in the petition and against which specific information on normal
value and export price were submitted. It is also observed that in the petition
filed, the petitioner had requested to initiate investigation against EU as
whole also. However vide their letter dt.
“The
investigation into the alleged dumping may please be initiated against the
named countries individually rather than collectively. You may consider our
petition accordingly and initiate investigation proceedings against
39. The
Authority had accordingly initiated the investigation against the specific
countries. Thus the argument of the
petitioner that they requested to initiate investigation against EU as a
whole is factually incorrect. The Authority is not in a position to consider
the request for inclusion of EU at this late stage.
Argument raised
40. Injury
is more severe in the post investigation period due to increase in imports,
increase its closing stock and decline in sales realizations.
Authority
Position
41. The
Authority do trot take into account the injury if any, during the post investigation
as the other interested parties are not given proper opportunities to comment
upon such injury incurred in the post investigation period.
Argument raised
42. The
Authority should clarify in the final findings that even though the invoice is
from a trading house, the anti‑dumping duty be levied based upon the
manufacturer of product and not on the trading house in whose name the invoice
appears.
Authority
Position
43. With
regard to separate assessment of the trading houses, the Authority notes that
by virtue of very nature of these they
are free to export goods of any producer,, no mechanism can be evolved can
establish linkage between the purchases tad sales made by these trading louses.
It is largely the practice of the
investigating authority that only the producers are assessed for separate
duties. Moreover, the thing houses are not deprived of business by not being
assessed separately.
Argument raised
44.
As represented by the exporters
fixing reference price is contrary to the antidumping rule that anti‑dumping
duty shall not be greater than the injury margin and fixing of anti‑dumping
duty with reference to a reference price in the present case is discriminatory when
compared to the exporters from other countries against whom
“fixed duties” were imposed. It has been argued by the petitioner that the
duties should be recommended on variable basis, as was done at the time of
preliminary findings. It has also been argued by the exporters that the
recommendations of Authority should be for a minimum price subject to a maximum
duty equal to dumping margin determined for each exporter.
Authority’s
Position
45. The
Authority considers it appropriate to recommend anti‑dumping duty on
variable basis having reference price with a condition of certain minimum
duties. The Authority does not consider that the duties recommended are
discriminatory when compared to the exporters from other countries.
46.
It has not been established by any
interested party how the recommendations of variable duties with provision for
certain minimum amounts are inconsistent with the provisions of the Rules.
Further, these minimum duties are required to be recommended so as to avoid any
possible circumvention. In case it is felt by an exporter that the current
dumping margin is lower than the duties being collected; an exporter can
request review in accordance with the Rules.
Argument
raised
47. It
is not correct and proper to put at par wet spun and dry spun fibres as production, technology, processing and end use
are altogether different.
Authority
Position
48. The
Authority notes that there are two well acknowledged technology for production
of acrylic fibre ‑ the wet spun and the dry spun.
None of the interested parties have been able to establish with evidence any
significant variation in the fibre produced by the
two technology. Moreover, domestic industry produces fibres using both the technologies and the fibres produced
using both the technologies are being consumed interchangeably by the
consumers.
Argument raised
19. The
DGCIS statistics show that the prices of imports from the countries which are
not dumping are lower than the price of the allegedly dumped imports. Thus the
imports from the other countries at a lower price had caused the price under
cutting/depression if any during the period of investigation. The quantity of
such low price imports is also significant.
Authority
Position
50.
The Authority observed that total
imports of acrylic fibre during the period of
investigation were 21114
51. It
is observed that some exporters have represented that they had not exported
acrylic fibre during the period of investigation and
therefore, no anti‑dumping duty be levied of their product/export. The
Authority notes that since these exporters have not exported during the period
of investigation, they attract rule 22 and may accordingly request for separate
assessment.
Argument raised
52. Embassy
of
Authority
Position
53. The
Authority notes that according to import statistics and information furnished
by
M/s Courtlauds
H. FINAL FINDINGS
54. The Authority after
considering the foregoing, concludes that:
(a) Acrylic fibre has been
exported from
(b) The domestic industry has suffered material
injury;
(c) The causal link between dumping and injury
is established.
5. The
Authority confirms the preliminary findings with regard to imposition of Anti‑dumping
duty and recommends imposition of definitive anti‑dumping duties on all
imports of acrylic fibre falling under custom sub‑heading
nos. 5501.30 and 5503.30 of the Customs Tariff Act as specified under para relating to product under consideration originating in
or exported from
S.no. Country Name of the producer Amount Amount
1 2 3
Rs. Per kg. Rs. per kg.
4 5
1. Japan Asahi Chemical Industries
Ltd. 81.36 7.63
Mitsubishi
Rayon
Toyobo
Any
other exporter 81.36 7.63
2.
3.
4.
56. 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
levied under Section 3, 3A, 8B, 9 and 9A of the Customs Tariff Act, 1975.
57. Subject
to above, the Authority confirms the preliminary findings dated 20.10.1998.
58. An
appeal against this order shall lie to the Customs. Excise
and Gold (Control) Appellate Tribunal in accordance with the Act Supra.
RATHI VINAY JHA
Designated
Authority & Addl. Secy.