GOVERNMENT OF INDIA

MINISTRY OF COMMERCE & INDUSTRY

(DEPARTMENT OF COMMERCE)

DIRECTORATE GENERAL OF ANTI DUMPING & ALLIED DUTIES

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NOTIFICATION

FINAL FINDINGS

New Delhi: 19th March 2004.

Subject: Anti-dumping investigation concerning import of Ammonium Nitrate originating in or exported from Russia and Iran - Final Findings.

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No. 14/36/2002-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;

A. PROCEDURE

1. The Procedure described below has been followed:

i)    The Designated Authority (hereinafter referred to as Authority), under the above Rules, received a petition filed by M/s. Gujarat Narmada Valley Fertilisers Company Ltd., (GNFC), M/s. National Fertilisers Ltd., (NFL) and M/s. Deepak Fertilisers and Petrochemicals Corporation Ltd., (DFPCL) on behalf of the domestic industry alleging dumping of Ammonium Nitrate originating in or exported for Russia and Iran (hereinafter referred to as subject countries). The petition has been further sujpported by M/s. Rastriya Chemicals and Fetilisers Ltd.

ii)    Preliminary scrutiny of the application filed by the petitioners revealed certain deficiencies, which were subsequently rectified by the petitioner. The petition was, therefore, considered as properly documented.

iii)    The Authority on the basis of prima-facie evidence submitted by the petitioner decided to initiate the investigation against imports of subject goods from Russia and Iran. The Authority notified the Embassies/High Commissions/Representatives of Russia and Iran in New Delhi about the receipt of the dumping allegation before proceeding to initiate the investigation in accordance with Sub-Rule 5(5) of the Rules.

iv)    The Authority forwarded a copy of the public notice to all the known exporters (whose details were made available by petitioner) and industry/user associations and gave them an opportunity to make their views known in writing in accordance with the Rule 6(2), 6(3) and 6(4).

v)    The Authority made available the public file as per Rule 6(7) to all interested parties containing non-confidential version of all evidence submitted by various interested parties for inspection, upon request. Also on request of certain interested parties regarding additional information from the interested parties for offering comments was also made available to the extent it was relevant feasible and permissible within the Rules.

vi)    Request was made to the Central Board of Excise and Customs (CBEC) to arrange details of imports of subject goods made in India during the past three years, including the period of investigation.

vii)    The Designated Authority (hereinafter also referred to as the Authority) notified preliminary findings vide Notification No. 14/36/2002-DGAD dated the 7th April 2003 with regard to Anti Dumping investigations concerning imports of Ammonium Nitrate originating in or exported from Russia and Iran and requested the interested parties to make their views known in writing within forty days from the date of its publication;

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

(viii) The Authority also forwarded copy of the Preliminary Findings to the Embassy/High Commission/Representative of subject countries in New Delhi with a request to furnish their views on the Preliminary Findings;

(ix) The Authority held public hearings on 03/12/2002, 13/01/2003, 24/02/2003 and 05/8/2003 to hear the interested parties orally, which was attended by representatives of the interested parties. The parties attending the public hearing were requested to file written submissions of views expressed orally. Designated Authority has considered the written submissions thus received from interested parties in these findings;

(x) Arguments raised by interested parties before announcing of Preliminary Findings, which have been brought out in the Preliminary Findings notified earlier have not been repeated herein for sake of brevity. However, arguments raised after the preliminary findings by the interested parties have been appropriately dealt in these findings wherever appropriate;

xi)    Optimum cost of production and cost to make and sell the subject goods in India was worked out on the basis of Generally Accepted Accounting Principles (GAAP) and by analyzing the cost information furnished by the petitioners.

xii)    The Authority verified the information provided by the petitioners to the extent considered necessary and also conducted on spot verification of the data furnished by M/s. JSC Nevinnomyssky Azot, Russia and M/s. IPCC, Tehran, Iran.

xiii)    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 paras herein below the extent these are relevant as per rules and have a bearing upon the case. The Authority has considered all views expressed by the interested parties to the extent they are relevant as per rules and have bearing on the case and have been appropriately considered in these findings at appropriate places.

(xiv) In accordance with Rule 16 of the anti dumping Rules supra, the essential facts/basis considered for these findings were disclosed on dated 1st March 2004 to known interested parties and comments received on the same have also been duly considered in these findings;

(xv) Investigation was carried out for the period starting from 1st April 2001 to 30th June 2002;

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

B. Product under consideration AND LIKE ARTICLES:

Views of the Domestic Industry

1. The product involved in the present investigation is "Ammonium Nitrate". It is produced in various forms such as melt, prills, crystal, granules, flakes and lumps, all having same chemical composition.

2. Petitioners wish to refer to and rely upon elaborate submissions made by them earlier in this regard, which is already on the record of the Authority. These submissions clearly establish that there is no merit in the argument of the consumers. The consumers had created a hype without basis and with a view to derail the present investigations with malafide and malicious intentions. The goods produced by the domestic industry are like article to the product under consideration and that is the sole legal requirement on this issue.

The fact is that:-

  1. petitioner companies produce HDAN:
  2. HDAN is produced by the petitioner companies in various forms, which include melt, prills, lumps, etc.;
  3. HDAN in various forms is nothing but one like product.

3. The consumers have claimed that various forms of AN are not interchangeable. The Statement of Supplies made establishes the fallacy of the argument by each of the petitioner companies. When the same customer has consumed in different forms, petitioners really wonder on what grounds the consumers are now arguing that they have not used the two product interchangeably.

4. In the matter of fused magnesia, in the absence of fused magnesia, sintered seawater magnesia has been held as like article to the imported product. If consumers wish to argue that identical article does not exist in India, another article, in its absence, is required to be considered by the Designated Authority for examination of like article. And if consumers agree that similar product exists in India, there is no basis for the argument repeatedly raised by the petitioner. In Caustic Soda, Caustic Soda Lye and Caustic Soda solid have been treated as one like product. It should be noted that even Solid Caustic Soda could have many forms – prills, flakes, granules, or any others. In Lead Acid Batteries, various types of Lead Acid Batteries have been treated as like article. In fact, within lead acid batteries, various types of maintenance free batteries have been treated as one like product and the Designated Authority has recommended one benchmark.

5. According to M/s. Stanbrook and Bentley, it will be very rare that the exported product is identical to the product manufactured by the community industry. Even in the case of a substance, which has the same chemical formula, there will usually be differences in the level of impurities. Thus in practical terms, the community Authorities have to examine whether the imported product has characteristics closely resembling those of the community product. In refectory chamottes from the People’s Republic of China, the community authorities refused to treat processed and unprocessed chamottes as a single product even though they were classified under the same customs headings. Their essential physical and technical characteristics; minor physical differences include such matters as whether the material used for a pocket lighter body was either plastic or nylon, differences in shape or levels of impurities, and provided that these do not affect end use will not prevent cumulation;

6. According to Edwon Vemulst and Paul Waer, minor differences in physical characteristics will not necessarily preclude a like product finding if the product nevertheless compete with each other in the market. There has therefore been gradual shift from an emphasis on the physical characteristics of the product to a focus on their end-uses and substitutability in the market place. The definition of the like product is in first instance in the hands of the EC industry because it mostly depends on the scope of the complaint. For the EC industry, it is extremely important to define the scope of the complaint as precisely as possible.

7. In the magnesite cases, a European importer argued that the differences between the exported Chinese products and the Greek products were so great as to prevent them from being considered like products. The commission examined the chemical composition and determined that, despite slight differences, the products were used in the same industries and the same purposes and therefore constituted like products.

8. The USITC in the matter of Ammonium Nitrate from Russia has considered the solid, fertilizer grade Ammonium Nitrate products with a bulk density equal to or greater than 53 pounds per cubic foot (equivalent to 0.849g/ml) as a product under consideration. With regard to the argument that the domestic product is not a like article to the imported product, it is submitted that the word HDAN is being used by the importers, with a view to show that the imported product is not "like article", and possibly to evade the legal complications involved in importing this material, even when their own specification sheet and test certificate do not mention any density.

9. The fallacy in the argument of the opposing interested parties is established by the fact that:-

  1. one of the petitioner companies produces Ammonium Nitrate in prill form also;
  2. ammonium nitrate in melt form and solid forms including prills, crystals, flakes, lumps, etc have been used interchangeably,
  3. Prilled Ammonium Nitrate is not a technical requirement. Solid Ammonium Nitrate is consumed eventually in liquid form. Solidification including in prill form is done more with a view to ensure ease in transportation.

10. Notwithstanding above, the definition of like article provides for (a) identification of an article, which is identical in all respects to the imported product; and (b) in the absence of identical article, another article that has characteristics closely resembling. Assuming though not admitting that the domestically produced product is not identical in all respect to the imported product, it can not be denied that the domestically produced does not have closely resembling characteristics to the imported product, particularly when the consumers are using the two interchangeably. It is important in this connection to note that there were hardly any imports of Ammonium Nitrate earlier. No new requirement of the product has been generated. Such being the case, the consumers of imported material were meeting their requirement from the domestic sources only. During last 6 months when imports have not taken place either due to Anti dumping case under finalisation or due to higher prices prevailing in Exporting countries. Consumers are merrily running their explosives manufacturing business with Domestic AN Melt and Solid in various forms as mentioned earlier.

11. Consumers once again made reference to the submissions made by Department of Explosives. Following fallacy in the argument of the Department of Explosives is worth highlighting:-

  1. when the consumers have admittedly consumed both LDAN and HDAN produced by Deepak, how the Deptt. of Explosives have stated that the consumers have discovered the advantages and suitability of the HDAN Prills over melts. Are the Indian consumers of the size and shape of IEL, IBP, Gulf Oil etc today wish to argue that they were unaware of the comparative advantages of HDAN prill over HDAN melt?
  2. The Department of Explosives stated in their comments that because of the closure of FCI and Rourkela Steel Plant Fertilizer Division, there was shortage of AN melt in the eastern region, which has been met by the imported product. The argument admits that the melt and the imported prill are like article.
  3. The Department of Explosives stated that the risk involved in handling melt and LDANP are higher than for HDAN prills. This statement does not mean that melt, LDANP and HDAN prills are not used interchangeably. One product type is preferred over other product type per se implies that two are comparable and hence like article.

12. It is stated by the Department of Explosives that imported product, i.e., HDAN Prill is preferred over melt and LDAN. This more than establishes that the two are like article. Preference of one product over other cannot be found for dislike products. In fact, one of the interested party has gone to the extent of stating that "....... the present investigation ..............." is nothing but taking advantage of the weakness in defining the like article in the anti dumping Law in India". Be as the case may be, the legal provisions contained under the Rules govern the Designated Authority. Suffice it would be to state that the legal provisions in this regard are quite comparable in all the countries (having dumping law) as also WTO Agreement.

13. Regarding the sales of HDAN prills, the petitioners have already furnished supplies made by each petitioner companies, which is already on the record of the Authority. The petitioners have sold HDAN prills to explosive manufacturers in India. The fact that one customer has consumed in different forms of AN supplied by imported and domestic sources clearly establishes that the two are substitutable and the two have been substituted and hence like article.

14. The domestic industry in their comments to the disclosure has stated that the scope of product under consideration has now been restricted HDAN from Ammonium Nitrate after excluding AN melt and LDAN. However even when the scope of product under consideration itself has been restricted to HDAN, scope of like article produced by the domestic industry has been kept as all forms of AN excluding LDAN and AN melt. At the same time the domestic industry has raised that whether the DA has not considered only prill form of AN solid (other than LDAN) produced by the domestic industry or all other forms of this AN solid such as AN lumps, crystals and prills. However petitioner note that the DA has restricted the scope of like article at the disclosure statement proceeds whether determination of standing, scope of domestic industry, by all the three forms of AN.

Views of Importers/user industries

M/s. IBP Co., Ltd.,

15. The only AN prill manufacturer in the country i.e., Deepak group claims to manufacture "Optiform" as AN prill. In all its annual reports and advertisements, they have represented themselves as manufacturers of LDAN prills in coated and uncoated form. The claim of density of Optiform at 0.855 g/cc through a test report is just to get inclusion as HDAN, whereas the actual density of both of their products varies from 0.75-0.85 g/cc. It is impossible to manufacture a prilled product with exact density of 0.855 g/cc as claimed by Deepak Fertilisers.

16. Major International Antidumping investigations against Ammonium Nitrate have specifically segregated the HDAN prills from LDAN prills and AN melt. Giving high reliance to factors such as technology and safety, the three products were never considered as like product by the major countries for the anti dumping investigations.

17. The product under consideration was defined as ammonium nitrate. The only product imported during the period of investigation or thereafter is HDAN prills. The investigations regarding the dumping of ammonium nitrate can, therefore only be initiated on the basis of a petition by the manufacturers of such article, or in the absence thereof, of the like article.

M/s. Bharat Explosives Limited

18. In the preliminary findings, no consideration appears to have been given to the fact that each ammonium product is ideally suited for a particular application. The argument that there is an overall shortage of ammonium nitrate in the country has been misinterpreted to be an admission that the AN products are inter-changeable. It is a fact that the petitioners are not in a position to meet the domestic demand of ammonium nitrate products-that is of HDAN prills, LDAN prills, and melt. In applications, where HDAN prills are required, they must necessary be imported. The shortage of LDAN prills and melt, can to some extent be met by the imports, as HDAN prills can substitute for melt or LDANP. The reverse is however not true specially with regard to Safety and range of application. The argument that there is a shortage, which can be met by the imports, does not prove that LDANP and melt can substitute for HDANP. For a product to be considered a "like article", to another, there must exist technical and commercial interchangeability. Merely because HDAN can substitute for other forms of AN, would not satisfy the test of like article.

19. In the preliminary findings, it has been recognised that Melt, HDAN prills and LDAN prills are separate products, as separate duties have been recommended in respect thereof. Having held so, separate export price, normal value, dumping margin and injury margin ought to have been determined for each product. In the case of melt and LDAN prills, there can be no export price or normal value or dumping margin, since this product has never been imported into India. In the absence of any import, it is difficult to understand how the dumping margin has been arrived at for these two products. In the case of HDAN prills no doubt, there is an export price, normal value and presumably some dumping margin, there can not be any non-injurious price or injury margin since this product is not manufactured in India.

20. A claim has been made that HDAN is manufactured and sold in India in prill form by the petitioners, is not true. The users as well as the association of explosive manufacturers, who are the main customers for such products, have repeatedly denied this fact. This claim has been made by M/s. DFPCL, yet their annual reports, Web site, advertisement etc only mention production and sale of LDAN prills. Moreover, during the period of investigation none of the petitioners have either offered or sold to us HDAN prills manufactured by them.

21. The petitioners have stated that since HDAN prills, LDAN prills and melt have been used for manufacture of explosives, this implies interchangeability. The aforesaid products have different applications in the manufacture of explosives. The Ammonium Nitrate product to be used is dependent on the type of explosive to be prepared/manufactured. The selection is based on technological and safety considerations. Therefore, the explosives manufacturers do use different types of Ammonium Nitrate however not interchangeably.

22. The petitioners have rightly stated that the focus should be on the end use and substitutability in the market place as per Edwin Vemulst and Paul Waer. It is submitted that the user can only highlight the end uses of the products themselves. Since the various products have different applications for explosives, there is no substitutability in the market place. In fact the petitioners itself sells the products manufactured by it at very different prices suggesting that they are not substitutable. The difference in price is sometimes to the extent of 30% to 40%. If the products were substitutable, as stated by the petitioners, then all users would have been purchasing only the cheapest product i.e., melt. The users are purchasing the products as per their technical requirement for manufacture of explosive. The different prices confirm the lack of substitutability.

23. The petitioners have repeatedly stated that the use of LDAN prills and melt by explosive manufacturers implied interchangeability. This is not so, as the different products have separate applications in the manufacture of explosives. For example melt cannot be used for on site blasting (or deep-hold blasting) operations. Therefore, different explosives applications require different Ammonium Nitrate products. In fact, HDAN prills is the optimally suited product for technologically advanced explosive applications, and is also the safest raw material. The indigenous products can not substitute it. Therefore, in the absence of a like article, the investigations are liable to be terminated.

24. Initiation of investigation under Rule 5 is also bad because the Applicants are not a domestic industry in respect of HDAN prills which are not manufactured domestically. The same are also not like article. This being the factual position, domestic industries cannot allege any injury to them because of import of HDAN prills.

M/s. Indian Explosives Ltd., and M/s. Special Blast (P) Ltd.,

25. Under the Anti Dumping Rules and Section 9A of the Customs Tariff Act, product under consideration is defined as the imported product, which may have been dumped and caused resultant injury to the domestic industry. Since the during the period of investigation, only HDAN Prills have been imported, this should be defined as the product under consideration. Other ammonium nitrate products, such as LDAN prills, melt, etc. have not been imported during the POI, therefore they can not be included within the purview of product under consideration and no duty can be imposed thereon.

26. It is submitted that no reliance can be placed on the claims of petitioners like Deepak Fertilizers, who have resorted to gimmicks such as false declaration of the density of their product Optiform (Density quoted as = 0.855g/cc). The entire explosives industry has given a declaration that the product Optiform is sold as uncoated LDANP and has a density ranging from 0.75-0.85 g/cc. The most common value being 0.81 g/cc. Moreover, this company is having a license and capacity to manufacture only LDAN in prill from as per their own annual reports.

27. Ammonium Nitrate in its primitive / basic form exists as melt or solidified into lump or flakes. Advanced / processed forms of Ammonium Nitrate include AN prills and granules.

28. AN Prills and Granules can be further classified as:

  1. HDAN Prills (also known as Fertilizer Grade AN prills)
  2. LDAN prills (also known as Explosive Grade prills)
  3. AN granules

29. High Density Ammonium Nitrate Prills (HDANP) are thermally stablilized, free flowing, dispersible, and uniform sized with high static resistance and spherical shape. They have a density of >0.90 g/cc, because of their non-porous structure. They can be suitably coated externally to avoid caking for longer shelf life. It is an ideal product for BULK STORAGE and HANDLING because of its low detonation sensitivity. The product is termed as Fertilizer Grade because it passes the detonation sensitivity test in the European market and is considered safe for Bulk handling and Storage.

30. Low Density Ammonium Nitrate Prills on account of its high porosity, has density of 0.75 g/cc to 0.85 g/cc. The porosity is introduced to increase the detonation sensitivity. The ANFO explosives, produced from LDAN prills have very high initiation sensitivity and require a very small shock stimulus as compared to HDANP for initiation. The propensity of getting accidentally contaminated with liquid fuels because of its high absorption capacity in the pores makes it extremely dangerous to store. Stringent environmental regulations govern LDANP.

31. AN granules are in tabular form, thermally stabilized and coated with anticaking agents meant to be used for making ANFO explosives. Granules were manufactured by some manufacturers like CANPEX Chemicals and Explogel India on an experimental basis, but in the absence of proper technology, the product was not accepted by the user industry, and there is no production of granules for the last 10 years in India.

32. Ammonium Nitrate Melt is a primitive form of AN. It is produced by nitration of surplus ammonia meant for production of nitrogenous fertilizers such as ANP, Urea etc. and was sold as a by-product by leading fertilizer manufacturers such as NFL, GNFC and RCF, FCI and RSP. This melt is solidified in the crude form to make products such as AN Lumps, Crystals and Flakes. None of the above requires any specific technology. Melt is to be maintained at high temperature and is required to be stored and transported in stainless steel tankers and storage vessels. This leads to high risk and exorbitant capital infrastructure requirement. On the other hand solid products like lumps and crystals are associated with impurities; they are of irregular shape, difficult to break and handle, prone to thermal recycling, unsuitable for pumping and onsite applications, poor disposability and have a low shelf life.

33. Since the technology for manufacture of prills has been developed, the technology for the manufacture of explosives has also undergone a tremendous change, and new generation explosives can be made only with prills and not crystals, flakes or lumps. Use of any form, other than prills would mean taking back, the technology for manufacture of explosives. Prills are the optimum product, as they are free flowing, can be coated and have anti-caking and other beneficial properties.

34. Explosive manufacturing is a closely guarded technology and Quality Control Scientists test the various raw materials for the finer parameters with regard to the safety and quality of the explosive. There are various types of explosives such as Heat Resistant explosive, large diameter slurry explosive, site mixed slurry, permitted group of explosives, large diameter emulsion, bulk emulsion etc. whose applications are very different yet their chemical composition is substantially the same. With minor variations in the ingredients, the properties of the explosives are significantly changed making the product suitable for different applications. Therefore, the statement that ammonium nitrate with different densities and in different forms is like or similar is factually incorrect.

Views of exporter

M/s. JSC Nevinnomiyssky Azot, Russia

35. The product exported by us is a High Density Ammonium Nitrate prill, which is not manufactured in India. Products such as ammonium nitrate melt and low density ammonium nitrate are not like article to the product exported by us. In this regard, we had produced information regarding the technical and commercial parameters, which distinguish the various products. It is stated by the exporter that they do not manufacture LDAN and the there is no domestic or export sale of this product during the period of investigation. It is further clarified that AN melt is manufactured by us but it is used for captive consumption.

EXAMINATION AND FINDING BY AUTHORITY

36. The product under consideration in the present investigation was Ammonium Nitrate. It is produced in various forms such as melt, prill, crystal, granules, flakes and lumps. The product is first produced in melt form, which is the basic stage then solidified to obtain prills, flakes, lumps etc. Ammonium Nitrate is manufactured by synthesizing vapour Ammonia with Nitric Acid (60% concentration) in a circular type neutralizer. Then the Ammonium Nitrate solution (72 – 74% concentration) is sent to evaporator, concentrated (upto 82% for Ammonium Nitrate Melt and upto 96% for prilling) and stored in Melt tank. Thereafter AN melt is used for prilling/further process (prilling, pre drying, drying, cooling, condensing and bagging) to produce AN prills/other solid forms of AN.

With regard to density, Ammonium Nitrate is classified in two forms:-

37. Coating is another parameter. Ammonium Nitrate can be uncoated or chemically coated. Chemically coated and uncoated forms are like article, the only difference between the two being that of coating. Coating is done in order to minimize moisture pick-up during storage, in turn, avoid caking/hard lump formation.

38. It is an inorganic chemical and classified under chapter 31 of Customs sub- headings 3102.30 of the Customs Tariff Act 1975. The Custom classification is indicative only and not binding on the scope of investigation. Ammonium Nitrate is used in water jel/slurry explosives, emulsion explosives which have the following applications like open cast mining, under ground metalliferrous mining construction industries, project etc, where as low density Ammonium Nitrate(explosive grade) is preferred over granules/crystals/HDAN prills for making Ammonium Nitrate fuel oil (ANFO) which is used as blasting agents as well as emulsified (ANFO). However, production of solid form requires small incremental production process and extra cost. Production of low density Ammonium Nitrate of course requires further additional investment.

39. The exporters/importers have described the product as High Density Ammonium Nitrate/Ammonium Nitrate(Fertilizer Grade)/Ammonium Nitrate/ High Density Ammonium Nitrate(Fertilizer Grade) . USDOC in the anti dumping investigation concerning import of Ammonium Nitrate from Russia described AN with density higher than 53 pounds per cubic foot (equivalent to 0.849 gm/ml) is HDAN while AN with lower density is LDAN. The petitioner claims that they produce Ammonium Nitrate with density higher than 0.85 gm/ml to 1.39 gm/ml. Whereas interested parties have claimed the petitioners are producing only Low Density Ammonium Nitrate having density less than 0.85 gm/ml apart from AN prills. The interested parties have also admitted in their submissions that none of the other domestic industry except M/s. DFPCL produces Ammonium Nitrate prills but i.e., LDAN prills. The petitioner have claimed that M/s. DFPCL is the sole producer of both High and Low density Ammonium Nitrate prills and which are sold with the brand name Optiform (HDAN prills) and Optimix (LDAN prills). To this effect they have produced SGS test report stating that Optiform has a density of 0.85 gm/ml whereas the consumers have produced the SGS test certificate of unquoated Ammonium Nitrate prills having density less than 0.85 gm/ml as they claim that the domestic industry do not produce HDAN prills. The Authority notes that the documentary evidence furnished by the petitioner could not categorically establish that the Ammonium Nitrate prills sold as Optiform is identical to HDAN prills exported by Russian and Iranian exporters.

40. Petitioners have claimed that even though commercially Ammonium Nitrate is classified into two categories in terms of density, density as a technical parameter is not specified in most of the product specifications. Even the test reports of the material normally do not mention density of the material. The classification is more relevant in the market parlance rather than as a technical requirement. The interested parties have raised arguments at different stages of their submissions that the imported HDAN prills are not the like article to those being produced by the domestic industry. Interested parties have further stressed that domestic industry is producing all other forms of Ammonium Nitrate except HDAN prill. The Authority notes that the word HDAN was not in domestic commercial transaction practice prior to imports and during the domestic verification of manufacturing units it was observed from their sales/ supplies documents of various consumers that the producers have never described the product as HDAN prill rather supplied as AN prill (optimax and optiform) or AN melt.

41. As regards the HDAN prill, the Authority has considered the view expressed by the petitioner, exporters, and importers/users. Rule 2 (d) of the Anti Dumping Rules defines the like article as,

"like article means an article which is identical or like in all respect to the article under investigation for being dumped in India or in the absence of such an article, another article which although not alike in all respects has characteristics closely resembling those of the articles under investigation."

42. As regards the arguments of exporters, importers /users that the imported product is not identical or alike in all respect to the article under investigation, the Authority notes that the petitioners have stated inter alia that there is a great amount of substitutability between the various forms of Ammonium Nitrates, there is a close resemblance in terms of characteristics of domestically produced Ammonium Nitrate and imported HDAN prill which is also used for production of explosives only. On the basis of evidence furnished both by the petitioners and interested parties the Authority is constrained to establish that Ammonium Nitrate produced by the domestic industry are not identical or alike in all respects to HDAN prills, one of the products under investigation. In the absence of an identical product the next parameter for determination whether the products being produced by the domestic industries which although not alike in all respects, is closely resembling to the articles under investigation or not. As per the admission by one of the interested parties that due to the closure/periodic shutdown of two of the manufacturing Ammonium Nitrate units mainly SAIL, Rourkela and Fertilizer Corporation of India, Sindhri, the Explosives Industries located in Eastern India have no other option but to resort to the imports which were comparatively cheaper and more user friendly compared to sourcing Ammonium Nitrate from other parts of India. The user industry has also admitted in their submissions that because of gap in demand and supply, they prefer the imported Ammonium Nitrate prills over the domestic supplies of Ammonium Nitrate Melt/solids due to it being cheaper and convenient in handling. One of the consumers has even admitted in his submissions that due to the difference in landed price of imported HDAN prills and sourcing Ammonium Nitrate melt/solids constitute a minimal difference of price. The Authority notes that domestically produced Ammonium Nitrate (excluding AN melt and LDAN prills) is substitutable to a great extent to the imported HDAN prill as per the admission of interested parties.

43. From the documentary evidence provided by the domestic industries regarding the sales of Ammonium Nitrate for the period April 2001 to February 2003 i.e., beyond the POI it is found that majority of Explosives Industries have sourced both AN melt and AN prills from these producers. During the course of verification of costing and sales information of the domestic industry it was established from their sales and excise register that Explosive Industry is using both AN melt/solids for manufacturing explosives. From consumers’ point of view, the consumers have also consumed the two sources interchangeably in a limited extent but substituting one another for different application of explosive manufacturing. During the course of verification at the premises of cooperative Russian and Iranian exporters it was found that they are also using the same technology as been used by the domestic industry for manufacturing of AN. The Authority believes that domestically produced Ammonium Nitrate (excluding AN melt and LDAN prills) is substitutable to a great extent to the imported HDAN prill, if not interchangeable.

44. It is important to note that there were hardly any imports of AN earlier. Consumers of imported material were meeting their requirement from domestic source only prior to imports. Even the Department of Explosive, Nagpur has informed that by using the imported product, the explosive manufacturers found it advantageous and switched to HDAN prills for some specialized application in explosives. The Authority holds the view expressed by DOE, Nagpur that both the imported HDAN prills and domestically produced Ammonium Nitrate have been used by explosive industry but certainly not for the same application. The DOE further stated that because of closure of FCI, Sindri and SAIL, Rourkela, the shortage of AN has been met by the imported HDAN Prills. Secondly, the risk involved in handling ANmelt and LDANprills are higher than the HDAN Prills. The Authority holds that preference of one form over the other per se implies that all forms are comparable therefore the Authority does not find merit in the argument of interested parties that HDAN prills cannot be covered as product under consideration i.e., domestically produced Ammonium Nitrate(excluding AN melt and LDAN prills).

45. The custom has classified the product under Chapter 31 of Customs Tariff Act 1975 under sub-heading 3102.30 describing the product as Ammonium Nitrate whether or not in aqueous solution. The Authority holds that HDAN prill which is being covered and cleared under the above Custom sub-heading, does substantiate the claim of the petitioner as HDAN prills being a like article to a great extent.

46. The petitioner has further claimed that Ammonium Nitrate is generally consumed in melt form only as emulsion explosives. Thus, conversion of Ammonium Nitrate into solid form is not a technical requirement rather is convenient for storage and handling. The interested parties have also admitted in their submissions that Solids forms of AN transported without specialized tanker whereas transportation of melt requires special tankers with controlled temperature to maintain its technical specification. Thus transportation of AN melt required higher expenditure due to specialized tankers which is commercially not viable for long distance deliveries.

47. The Authority notes that the use of HDAN Prills over domestically produced AN Prills may offer certain advantages however the basic chemical properties of both the material remains same as both are used for manufacturing explosives. The Authority further notes that manufacturing process and technology or consumption of different raw materials are same for both imported HDAN Prills and domestically produced AN Prills .

48. The Authority did visit the Russian and Iranian manufacturers of the goods exported to India and understands that the production process of AN is generally the same irrespective of origin. AN is produced by reacting ammonia with nitric acid. The reaction of Ammonia with nitric acid produces AN solution. The solution can solidified in either a prilling or a granulating process. Notwithstanding the imported HDAN prills is being used by importers/users in the manufacture of explosive emulsions and various other explosives. Several interested parties advised that it is not economically or logistically viable to import AN solution and LDAN prills for various reasons. The exporters have also claimed that they have not exported AN solution and LDAN prills. Special equipment and arrangements are necessary for the transport and storage of the AN solution and LDAN prill(known asexplosive grade) is being highly prone to explode, thereby the Authority believes that these two forms of AN is not viable for exports. These two forms have not been imported either in the POI or prior to the POI whereas HDAN prills is safe in storage and handling.

49. In case of Ammonium Nitrate density, form and state of the goods are physical characteristics that are significant and distinguishing attributes for the user in the explosive industry. These characteristics, specially the density is linked with the performance expectation of the product and is reflected in the related prices. Accordingly, the Authority considers that low density AN, high density AN and AN solution are not identical goods.

50. The Authority believes that there is a considerable degree of substitutability between the imported and the locally produced solid ammonium nitrate. It is possible though generally not the case the imported high density ammonium nitrate may be substituted for the domestically produced ammonium nitrate in the manufacture of explosives. On the basis of above analysis, the Authority considers that the domestically produced solid ammonium nitrate (excluding AN melt and LDAN prills) have characteristics closely resembling the product under consideration. Certain densities, states or forms of Ammonium Nitrate are technically more suited to manufacture the particular explosive product. Explosive companies do differentiate these distinctions in determining their required product mix of ANFO, heavy ANFO and bulk emulsion explosives. Notwithstanding, the Authority considers the essential characteristics of different Ammonium Nitrate product are not changed due to variation in density state or form. The majority of locally produced and imported AN is purchased for the purpose of making various types of explosives. Technically AN is used in explosives as an Oxygen source in the detonation process. The imported HDAN prills competes directly with the locally manufactured AN, though rarely in its original form rather it is used as a major component of explosive product.

51. The Authority notes that the submission made by various interested parties regarding the product under consideration that the subject goods imported from subject countries are not like article to the goods manufactured by the domestic industry. In the preliminary finding the Authority had taken a view that all forms of Ammonium Nitrate as a product under consideration and examined the subject goods in the light of definition of like article under Rule 2(d) that even if the imported HDAN is not identical or like in all respect to the article under investigation, it was considered on the analogy of the second part of the definition that in absence of such an like article another article which resembles closely to the article under investigation. The interested parties have argued that the different forms of Ammonium Nitrate are not like article in terms of its uses in the production process of various explosives grade required by the industry. At the same time they also argued since AN melt and LDAN are not imported into India, thereby not causing injury to the domestic industry. As regards the HDAN which is having a density more than 0.85 gm/ml which is not produced by the domestic industry and with the advancement of explosive technology it is of paramount necessity to use HDAN prills for manufacturing on site explosives grade materials and various other explosive application.

52. The Authority believes since AN melt and LDAN are not imported into India, thereby not causing injury to the domestic industry whereas imported HDAN which has been used by the consumers as there is technical and commercial substitutability of these goods with the domestically produced Ammonium Nitrate. The Authority after considering the views expressed by various interested parties believes to modify the product under consideration as Ammonium Nitrate excluding AN melt and LDAN having density less than 0.85 gm/ml. The Authority has considered the scope of product under consideration as all forms of ammonium nitrate excluding AN melt and LDAN having density less than 0.85 gm/ml. After understanding the production process of the product the Authority believes that AN melt is the basic stage from which all other forms are further required incremental processing and therefore the Authority holds that the product under consideration has been considered after the complete examination the views of the interested parties and manufacturing process involved in production of various forms of Ammonium Nitrate.

53. The Authority in view of submission made by the petitioners and other interested parties, thereby keeping in view of substitutability and uses by the same consumers of the subject goods, exported from subject countries and those produced by the domestic industry, considers the subject goods exported and domestically produced subject goods all grades/types of AN (excluding AN melt and LDAN having density less than 0.85 gm/ml) as like article under Rule 2(d) for the purpose of final findings.

C. DOMESTIC INDUSTRY

VIEWS OF DOMESTIC INDUSTRY

54. The petition was jointly field by M/s. Gujarat Narmada Valley Fertilizers Company Ltd., (GNFC), National Fertilizers Ltd., (NFL) and Deepak Fertilizers and Petrochemicals Corporation Ltd., (DFPCL). Petitioners are major producers of Ammonium Nitrate in India and thus satisfy the standing to file the application under Anti Dumping Rules. Further, the petition has been supported by Rashtriya Chemicals Fertilizers Ltd.

55. It was reiterated that Deepak Fertilizers is not eligible to file the present petition, as its affiliate has imported the subject goods. While the Designated Authority has already held in the preliminary findings that the company should be included within the purview of domestic industry, assuming though not admitting that Deepak’s affiliate has imported the material, it is submitted that the import under reference was in the period prior to the investigation period. What is relevant for the purpose of present investigations is imports under investigation period, as has already been held by the Designated Authority and CESTAT in a number of cases. Petitioners refer to and rely upon the decisions of Hon’ble CESTAT in the following cases:-

  1. in the matter of Hydroxyl amine sulphate the CESTAT treated the petitioner as domestic industry because they have not imported in POI.
  2. in the matter of Optical fibre, CESTAT treated the petitioner as domestic industry since imports made by petitioner were before POI.

56. Petitioners wish to refer and rely upon the decision of the USITC in the matter of Polyester Films from India, wherein the ITC held that"we generally apply a two-step analysis in determining whether to exclude a domestic producer from the domestic industry under the related parties provision. We consider first whether the company is a related party under section 771 (4) (B), and second, whether, in view of the producer’s related status there are "appropriate circumstances" for excluding the company in question from the definition of the domestic industry. The related parties’ provision is employed to avoid any distortion in the aggregate data bearing on the condition of the domestic industry that might result from including related parties whose operations are shielded from the effects of the subject imports." The ITC did not exclude the producers from the scope of domestic industry who have imported Pet Film from Japan and Korea during the period of investigation because their domestic operations do not appear to have been shielded from, or benefited by, the unfairly traded imports at issue.

57. The Applicant, M/s. Deepak Fertiliser and Petrochemicals Corporation Ltd., cannot be treated as domestic industry because it has imported through their Group Company the alleged HDAN prill and accordingly is disqualified under Rule 2 from being called as a domestic industry.

58. The petitioner have mentioned in their annual report that M/s. Smartchem is a group company, therefore, in our humble submission, they must be treated as a related company. Moreover, the petitioners i.e., DFPCL have earned handsome profits from sale of the imported product, therefore, the decision in the case of polyester film cited by the petitioners is of no relevance.

59. The petitioner has stated that the domestic industry should be seen and defined in the context of like article. Since the scope of the product under consideration has been redefined thereby the standing of the domestic industry may be accessed.

Views of importers/user industry

M/s. Indian Explosives Ltd., and M/s. Special Blasts Pvt. Ltd.,

60. It is denied that the petitioners have standing as domestic industry since the sales of the imported products have not been made during the period of investigation. Moreover, since the petitioners do not manufacture a like article to the imported product they do not satisfy the definition of domestic industry. The investigation is, therefore, liable to be terminated.

M/s. Bharat Explosives Limited

61. It is denied that the petitioners have standing as domestic industry since there is no like article to the imported product in India. Moreover, one of the associate companies of M/s. Deepak Fertilisers and Petrochemical Corporation Limited has imported the material and sold it in substantial quantities during the period of investigation. Hence, M/s. Deepak Fertilisers and Petrochemical Corporation Limited is liable to be excluded from the purview of domestic industry

EXAMINATION BY THE AUTHORITY:

62. The present petition has jointly been filed by Gujarat Narmada Valley Fertilizers Company Limited (GNFC), National Fertilizers Limited (NFL) and Deepak Fertilizers and Petrochemicals Corporation Limited (DFPCL). Production of the subject goods by the petitioners constitutes a major proportion of production of like article in India. Petitioners satisfy the standing to file the application under anti dumping Rules. Further the petition has been supported by Rashtriya Chemicals and Fertilizer Ltd,. The Authority believes that AN melt is the basic stage from which all other forms are further required incremental processing and therefore the Authority accessed the standing of the domestic industry accordingly.

63. Arguments have been raised by many interested parties that M/s. DFPCL is not eligible to file the present petition as its one of the affiliates has imported the subject goods and does not constitute the domestic industry. The Authority has examined the position with regard to standing of M/s. Deepak Fertilizer and Petrochemical Corporation Ltd., and holds that M/s. Smartchem Technology Ltd., an affiliate of M/s. DFPCL has imported the material prior to the period of investigation.

" domestic industry" means the domestic producers as a whole engaged in the manufacture of the like article and any activity connected therewith or those whose collective output of the said article constitutes a major proportion of the total domestic production of that article except when such producers are related to the exporters or importers of the alleged dumped article or are themselves importers thereof in which case (such producers may be deemed) not to form part of domestic industry.

64. As regards the standing of the domestic industry, the Authority has considered the view expressed by the petitioner, exporters and importers/users. Rule 2 (b) of the Anti dumping rules defines domestic industry means the domestic producers as a whole engaged in the manufacture of the like article and any activity connected therewith or those whose collective output of the said article constitutes a major proportion of the total domestic production of that article except when such producers are related to the exporters or importers of the alleged dumped article or are themselves importers thereof in which case such producers may be deemed not to form part of domestic industry."

65. The definition of Domestic Industry given above is further clarified by Rule 5 of Rules which reads as follows:-

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

66. The Authority notes that for the purpose of present investigations, the imports under investigation period are relevant, as already been held by the Designated Authority and CEGAT. The Authority notes that the petitioners constitute 58% of the production of the domestic industry. The Authority, therefore, believes that the petitioners constitute more than 50% of the total domestic production of the subject goods and, therefore, have the standing to file the petition on behalf of the domestic industry as per Rule 5 (3) (a) and (b) of the Anti-Dumping Rules and also represent Domestic Industry in terms of Rule 2(b).

D. NORMAL VALUE, EXPORT PRICE & DUMPING MARGIN

Views of Domestic Industry

67. The response filed by the Russian exporter is grossly insufficient and inadequate. The exporter has not furnished information regarding domestic sales in home market. Exporter has not provided sufficient evidence to claim Market Economy Treatment. The response filed by the exporter must be rejected.

68. Natural gas is the major raw material required for production of Ammonium Nitrate. Natural gas is controlled by the Govt. of Russia, as has been held by USA very recently in an investigation relating to imports of Urea Ammonium Nitrate. The Australian customs service also has held in the investigation related to Urea Ammonium Nitrate from Russia that Natural Gas prices are controlled by the Govt. of Russia. Prices of inputs and raw material, therefore, are controlled by the Govt. of Russia. Such being the case, the exporter can not even claim that it can be granted market economy treatment. It can not be said that prices of inputs reflect fair market value. It can not certainly be a situation that a company would be granted MET by one country and under identical circumstances, it would deny MET by another country. Normal value, under circumstances, has to be determined on the basis of principles governing non market economy.

69. The exporters from Russia have attempted to bypass their obligation to give information and evidence on MET by offering themselves for verification. At the time of oral hearing also, it was stated that the data relating to the exporter could be verified. However, petitioner have failed to appreciate how the data could be verified when the same is not yet complete and the exporter has not filed sufficient non confidential version of the response. It appears that the exporter is suggesting that the Designated Authority can depute a team of Officers to collect information and evidence. In other words, a verification visit can be undertaken to collect relevant data. Petitioners refer to and rely upon the decision of Hon’ble CESTAT in the matter of Potassium Permanganate, wherein the Tribunal has held that verification visits can not become data compiling visits. The exporter must first provide full information and evidence to justify that it can be granted MET.

70. Iran Petrochemical Commercial Co., (IPCC) from Iran has filed response. However, response filed by the exporter was also grossly deficient and inadequate. The exporter has provided only summary information in response to various appendices forming part of questionnaire. Further, the exporter has admitted that it is getting subsidies, details of which have not been provided, as required in the questionnaire. In any event, since entire transactions are based on subsidies received by the company from the Govt., the prices in the domestic market can not be regarded in the ordinary course of trade.

71. Petitioners submit that the clinching factor supporting the claim of the domestic industry is the natural gas prices in Russia. Admittedly, natural gas prices (which is the principal raw material required for production of the product under consideration) are controlled by the Govt. of Russia. Based on this ground alone, the Company can not be granted MET. It may be seen that Australian Authorities have treated Russia as non market economy solely on the ground that natural gas prices are controlled by the Govt. of Russia. It would also be seen that the Russian producers are getting natural gas as differential prices depending on the end use. If the end use is for production of fertilizer grade, the prices are much lower (which implies, if the end use is for production of explosive grades, the prices are much higher). Fertilizer grade and explosive grades are not different products.

72. With regard to submissions made by Iranian exporter, it is evident that the exporter is paying differential prices for natural gas, depending upon the end use. If the end use is fertilizers, the exporter gets a subsidy. Since the end use of the exports made to India was for production of explosive, the selling price in the home market as also cost of production for product meant for explosives only would apply.

VIEWS OF IMPORTERS/USERS

M/s. Bharat Explosives Limited

73. Russia is treated as a market economy by both European Union and USDOC. However, even if it is assumed that Russia is a non market economy, the cost of production (normal value) is to be calculated on the basis of production in surrogate country after providing due opportunity to the interested parties to comment on the selection of such country. There is nothing apparent from the preliminary findings as to which surrogate country has been selected and, whether the level of development of the surrogate country is at par with Russia.

74. Anti dumping duty is levied on article exported from an exporting country to India and is usually equivalent to the difference between its export price and its normal value. Since there has been no export by the exporting countries to India of AN melt, and, LDAN prills the export price as also normal price of the said articles cannot be determined. The law does not provide for presumption and levy of duty on anticipation that such an article would be imported and, such import would be injurious to domestic industries.

M/s. IBP Co., Ltd.,

75. Since most of the parameters considered for the imposition of preliminary duties are based on the constructed normal cost, non injurious price and the represented data by the petitioners, we request the designated authority to make a actual assessment of the parameters by verification of the associated facts with regards to cost, technology and safety for the explosives industry. The future development of the explosive industry largely depends on the decision taken by the Authority on the investigation.

76. A dumping margin of 90% has been arrived at for the Russian exporters by adoption of a constructed cost of production. This method has been resorted to by considering Russia as a non-market economy. It is submitted that there is no justification for treatment of Russia as a non market economy, especially in view of the market economy status granted by administrations such as USDOC.

M/s. Indian Explosives Ltd., & M/s. Special Blasts Pvt. Ltd.,

77. Market economy status should be granted to Russia and the margins should be determined on the basis of the information submitted. Even if a surrogate country was to be adopted, due opportunity was required to be given to interested parties to offer their comments in this regard. Moreover, the normal value should have been calculated keeping in mind the economies of scale of the exporters and the availability of natural gas at lower prices.

VIEWS OF EXPORTERS

M/s. JSC Nevinnomyssky Azot

78. In the Preliminary Findings of April 2003 it is said that "the Authority was constrained to accept the claim of market economy treatment in absence of sufficient information/documentary evidence provided by the exporter as desired in sub para 3 of the paragraph 8 of Annexure 1 of anti dumping rules. The exporter has not adduced sufficient information and evidence to establish that it operates under market conditions". But it is not mentioned how the information provided is insufficient for making a positive decision on recognition Russia a market-economy country. In addition to the original questionnaire we prepared answers to the supplementary questionnaire provided by the Indian side on April 17, 2003. All the questions were answered entirely and extensively by June 2003. However, in the Note dated July 15, 2003, the Ministry of External Affairs pointed to "inadequate response filed by the Russian exporters" and stated that "the responses were examined.... for purposes of extending the market economy status as per the relevant rules and found deficient". The information filed is sufficient and meets the requirements claimed for market economy status granting.

79. The dumping margin of 90% is totally incorrect, since it is based on an export price and normal value, which are not based on facts. We submit that there was no justification for the construction of a normal value, since we had provided voluminous information relating to the cost of production and market economy status.

80. We would also like to invite attention to Notification No. 101/2003 dated 10th November 2003 whereby a sub Rule (4) has been added in paragraph 4 of Annexure-1 to the Rules. This paragraph reads as follows:

"Notwithstanding anything contained in sub-paragraph (2), the Designated Authority may treat such country as market economy country which, on basis of the latest detailed evaluation of relevant criteria, which includes the criteria specified in sub paragraph (3), has been, by publication of such evaluation in a public document, treated or determined to be treated as a market economy country for the purpose of anti-dumping investigation, by a country which is a Member of the World Trade Organisation."

81. The aforesaid provision provides that the Hon’ble Designated Authority may grant market economy status to a country if it has been treated as a market economy country by a Member of the WTO based on the criteria specified in paragraph (3), Russia has been granted market economy status both by EU and USA, therefore, the amendment is clearly attracted in the present case.

82. It is submitted that the amendments made to the Rules vide Notification No. 101/2003-Customs (N.T), dated 10th November 2003 are applicable to pending investigation. The Hon’ble Tribunal in the case of Exide Industries Ltd., Vs. Designated Authority reported in 2003 (155) ELT 35 (T) considered the issue whether Notification dated 31.5.2001 amending the provisions relating to non-market economies was applicable to an investigation which was started on 12.1.2001 and concluded on 7.12.2001. The Hon’ble Tribunal held that the investigation was not held in accordance with the Rules, as it was carried out without any regard to the legal requirements under the notification.

83. Last year, after extensive analysis of the Russian economic system the Russian Federation was granted a market economy status by the European Union (on 07.11.2002) and the USA (06.06.2002). For purposes of anti-dumping investigations Russian companies are to be treated as companies operating in market economy starting 01.04.2002 for the US cases and starting 08.11.2002 for the EU investigation. This is an acknowledgement of the important progress achieved in Russia in respecting market economy principles.

84. In the submitted questionnaire we have provided information which meets the parameters and the given documentary evidence proves that the company Nevinnomyssky Azot is operating under market conditions. Our company is privately owned without ownership of the state. The sale prices of ammonium nitrate are fixed in accordance with the demand and supply. The prices are negotiated with the customers and the sale is made at a mutually acceptable price, which reflects the fair value of ammonium nitrate and fully covers its cost of production.

85. There is no state interference in the decision making of JSC Nevinnomyssky, as the company is free to purchase its raw material, labour etc at best available prices. There is also no interference of the state with regard to the quantity and prices at which the company sells the ammonium nitrate. The decisions of the company on all issues are free of any state interference since there is no state ownership in the company.

86. Our company is subjected to bankruptcy and property laws, which guarantee legal certainty and stability for the operation of the firms. In this regard, we invited reference to the Federal Law on insolvency and the Civil Code or Russia, which provide legal certainty and stability for the operation of the firms. Apart from the above, extracts were also enclosed, of the Federal Law on Joint Stock Company which provide that the company shall be a juridical person and have ownership in solitary property.

87. The exporter has drawn the attention towards the notification made in the rules vide notification No. 101/2003-Customs dated 10.11.2003 in this present pending investigation. It is further stated that Hon’ble Tribunal in the case of Excide Industries Ltd. Vs. Designated Authority reported in 2003 (155) ETL 35 (T) consider the application of a notification regarding NME during the course of investigation which has come after the initiation of anti-dumping investigation. The extracts of the judgment inter alia states "further, several months before the conclusion of the investigation and issue of final findings, notification dated 31.5.2001 had been issued naming China as one of the non-market economy countries. Still the investigation proceeded without satisfying the requirements under these notifications. We also note that this is not a case where the requirements of the notifications had been met in substance, and the final findings only failed to note the same. A perusal of the records of the Designated Authority leaves no room for doubt and the authority fails to conduct the normal value investigation in accordance with the rules applicable to non-market economy units".

88. Notification dated 15.7.1999 gave legal recognition to this difficulty and laid down a different basis. Notification dated 31.5.2001 recognised the changes taking place in non-market economy countries and provided market driven units in non-market economy countries an opportunity to prove that they were operating according to market principles. The investigation in the present case started on 12.1.2001 i.e. well after the issue of notification dated 15.7.1999. The investigations were concluded and final findings were issued on 7.12.2001 i.e. well after notification dated 31.5.2001 was issued. Still, the investigation was carried out without any regard to the legal requirements under the notifications.

89. In this regard, they have further drawn the attention to notification No. 101/2003 dated 10.11.2003 where by a sub rule (4) has been added in para 4 of the Annexure 1 of the rules. It states as "Notwithstanding anything contained in sub para (2), the Designated Authority may treat such country as Market Economy country which, on the basis of the latest detailed evaluation of relevant criteria, which includes the criteria a specified in sub para (3), has been, by publication of such evaluation in a public document, treated or determined to be treated as Market Economy country for the purpose of anti-dumping investigations, by a country which is a member of World Trade Organisation". Therefore, the exporter requested that Russia may be granted Market Economy status by virtue of this notification considering the information supply to the investigating authority to be examined as operating under the market conditions

Views of M/s. IPCC, Iran

90. The exporter has filed his comment on the disclosure to the essential fact on determination of dumping margin. They have stated that the domestic sales are in the ordinary course of trade so the normal value may not be constructed on the basis of cost of production. They have further requested to consider their domestic sales for determination of dumping margin.

Examination of Market Economy Conditions in respect of M/s. JSC Nevinnomyssky Azot, Russia

91. Petitioners have claimed that Russia is a non-market economy country as European Commission has treated Russia as non-market economy and United States is the past three years. Therefore, determination of normal value in respect of these countries is to be done in accordance with the Rules relating to non-market economies as contained in para 7 & 8 of Annexure –1 of Rules as amended vide Notification dated 4.1.2002. Accordingly, they have claimed that normal value in these countries can be determined on the basis of estimates of cost of production in India including selling, general and administrative expenses and profit.

92. The aforesaid Russian producer has claimed market economy treatment in this present investigation. According to the proviso to para 8(2) of Annexure-1 of the Rules, inter-alia, provides an opportunity for an exporter to rebut the presumption of NME on the basis of the criteria specified in sub-para 3 of para 8 of Annexure-1. The Authority is of the view that in so far as Rules relating to NME are concerned, the rules as contained in the National Law i.e., under para 7 & 8 of Annexure-1 to the Rules are relevant to this investigation.

93. The Authority notes that para 7 of Annexure 1 of Anti Dumping Rules, inter-alia, provides that:

"In case of imports from non-market economy countries, normal value shall be determined on the basis of the price or constructed value in the market economy third country, or the price from such a third country to other countries, including India or where it is not possible, or on any other reasonable basis, including the price actually paid or payable in India for the like product, duly adjusted it necessary, to include a reasonable profit margin ......."

94. Further para 8 of Annexure 1 of Rules Supra (as amended) provides that:

"8. (1) The term "non-market economy country" means any country which the designated authority determines as not operating on market principles of cost or pricing structures, so that sales of merchandise in such country do not reflect the fair value of the merchandise, in accordance with the criteria specified in sub-paragraph (3)

(2) There shall be a presumption that any country that has been determined to be, or has been treated as, a non-market economy country for purposes of an anti dumping investigation by the designated authority or by the competent authority or any WTO member country during the three year period preceding the investigation is a non-market economic country. The concerned firms in such countries, may, however, rebut such a presumption by providing information and evidence to the Designated Authority that establishes that such country is not a non-market economy on the basis of certain criteria.

95. The Russian exporter has claimed that:

    1. The decision Russian manufacturer with respect to prices, costs and inputs, including raw materials, cost of technology and labour, output, sales and investment, are made in response to market signals reflecting supply and demand and the costs of the inputs reflect market values. This is reflected in documents furnished and in the confidential data furnished by the respondents with the confidential response to the questionnaire which were verified during the on spot verification. It is found that there is neither any State regulation of costs or prices of these inputs in Russia or any system of administered prices.
    2. There is no distortion of production costs and financial situation as the respondents are entirely private companies as described in the questionnaire response and accompanying confidential information and further as the respondents have not converted former State assets, or distorted depreciation thereof, or engaged in barter trade or debt forgiveness or debt/equity swaps, or received the benefit of any write-off.
    3. The Russian manufacturer is subject to Russia’s regulations with respect to bankruptcy and property respectively.
    4. As in India the exchange rate is based on the market rate as determined by the Central Bank as is reflected in the confidential data furnished along with the said confidential questionnaire response.

96. M/s. Nevinomyssky Azot filed its submission to rebut this presumption by providing the relevant information, which has been verified during the on-spot verification.

"(a) The decisions of concerned firms in such country regarding prices, costs and inputs, including raw materials, cost of technology and labour, output, sales and investment, are made in response to market signals reflecting supply and demand and without significant State interference in this regard, and whether costs of major inputs, substantially reflect market values;"

97. The company is an open joint stock company. The company maintains accounts as per the general accounting principles and publishes a report giving information as per the balance sheet and profit and loss account. There is no specific state interference found with regard to the decision making.

98. The Company is found to operate on market principles with an objective to maximise sales and profits. The decisions as regards the sale prices for ammonium nitrate are also found in response to market signals. The sale prices reflect the fair value of ammonium nitrate and fully cover the cost of manufacture of this product. The existence of a range of prices for the products indicates that the price is determined solely on account of market conditions and not due to any state inference in this regard.

99. The principal raw materials for the manufacture of Ammonium Nitrate are natural gas, Magnesium Carbonate, Ground Brucite and Lilaminum. The natural gas is purchased from LLC Stavrpol Regional Gas Company. During the course of verification at the plant, copies of natural gas purchase bills for the relevant period have been verified and it is seen that the natural gas has been procured on demand- supply situation in the prevailing market condition. It is also noted that during the course of verification of the plant the price of natural gas has varied based on market conditions. The price of natural gas has varied from 472 roubles per thousand cubic meters to 592 rubles per thousand cubic meters.

100. Russia has the largest resources of natural gas in the world. The availability of natural gas exceeds the domestic demand and consequently natural gas is exported to various countries. In 2001, Russia has exported 6.7 trillion cubic feet making it the world’s largest natural gas exporter. Natural Gas is sold and marketed by Joint Stock Company Gazprom through other group / affiliated companies in Russia. LLC Stavrpol Regional Gas Company an open Stock company who has supplied natural gas is an affiliated company to Gazprom. Gazprom is a profitable company and its sales of natural gas yielded a profit which was privatized in 1993. 38.37% of the shares are owned by the State, foreign shareholders hold 10.31% of the statutory capital and the balance are owned by the public. The shares of this company are freely traded in the Russian Stock market. The Authority notes that the price of gas, is fixed in response to market signals reflecting supply and demand without State interference.

101. Gazprom is a company constituted under the federal law on joint stock companies. As mentioned above the majority of shares are held by persons other than the state and directors are elected by the stock holders and they do not act under the direction of Russian federation. The board of directors takes decision such as fixation of price of natural gas, the profit motive in mind. Moreover, Gazprom is operating on a huge profit, thereby the above facts lead to the conclusion that the prices of natural gas are determined in response to market signals.

102. As regards other raw materials the company procures the suppliers after negotiations relating to price and quantity. The Unified Energy System of Russia supplies the power, which is a joint stock company. This company has a holding company and various other subsidiaries and dependent companies which generate, transmit and distribute electric power in Russia. The shareholders of this company include Russian persons, legal entities and foreign persons. The tariffs for industrial consumers are higher than those for other consumers, indicate that the power charges to industrial consumers fully cover the cost of generation, transmission and distribution of power and reflect market values. The prices of power are fixed on market principles.

103. The employees are organized into two categories, i.e., workers participating in Ammonium Nitrate production and those not involved directly in the production. Contracts are entered into with each employee wherein the conditions of employment, such as working hours, salary, etc. are indicated. The employer has a right to terminate employment as per the contract, which normally requires a notice period of 2 to 4 weeks. Article 77 of the Labour Code of the Russian Federation provides the grounds for employee dismissal or termination of employment. The employment `may be terminated with the mutual consent of both parties in terms of Article 78. It may also be terminated on the expiry of the validity of the agreement or by virtue of termination at the initiative of the employee or employer (Article 80, 81). The employment may be terminated also on the refusal of the employee to continue work because of an alteration in the ownership of the employer company or due to alteration of the conditions in the labour contract. Other circumstances include refusal to accept transfer or violation of regulation of labour contact, conviction of the employee with a penalty, disability, death, etc.

(b)"the production cost and financial situation of such firms are subject to significant distortions carried over from the former non-market economy system, in particular in relation to depreciation of assets other write-offs, barter trade and payment via compensation of debts;"

104. The Authority did not find any evidence regarding receipt of any write offs, barter trade or payment via compensation of debt by the state or any other authority. There are no distortions found from the earlier non-market economy system. The process of privatization of the company started almost 10 years ago, in terms of the federal law on the privatization of stock and municipal property. In terms of Article 15 of the Act, a Commission shall be instituted which shall formulate the privatization scheme on the basis of the opinion of experts in the field of auditing, consulting, estimate making etc. The seller of the property is to take a decision of the starting price in view of the current market situation as envisaged in Article 17. It is also provided that the price shall be fixed keeping into account the area of the land on which the company is situated, characteristics of such company's realty and the existence of liabilities, obligation of such companies to the Federal Budget, range of the company's products, number of workers etc. This information is to be made available to all buyers as per law. In this regard the company is guided by the Federal Law on the privatization of state property and the principle of privatization of the municipal property in the Russian Federation.

"(c) such firms are subject to bankruptcy and property laws which guarantee legal certainty and stability for the operation of the firms and "

105. All firms and companies are subject to bankruptcy and property laws of Russia under Federal Law on Insolvency of January 8 1988, which guarantee, legal certainty and stability for the operation of the firms in Russia. Under Article 2 of this Act, bankruptcy has been defined as a debtor's inability as recognized by Arbitration Court or declared by the debtor to fully satisfy creditors claims with respect to monetary obligations and/or to perform an obligation to make compulsory payment within a specified period. This period has been defined as three months under Article 3 of the aforesaid law. The creditors are to approach an Arbitration Court, which is to determine the liability of the debtors if any, and its inability to discharge the debt. Under Article 24, a legal entity may declare its bankruptcy and voluntary liquidation in the manner specified by law. On such a declaration being made, the Arbitration Court has power to recognize a debtor as bankrupt and send appropriate information to banks and other credit organizations.

106. Under Article 137 the debtor enterprises may be sold for satisfying the creditors claim. Article 179 deals with the distribution of the proceeds and other issues. Therefore, the Authority notes that there is in a comprehensive law dealing with insolvency in Russia.

107. Under the Civil Code of Russia, concept of property, legal certainty and recognizing various types of legal entities has been provided. Article 66 provides that companies shall have authorized capital divided into shares. This property acquired by the company in the process of an activity shall belong to it by the rights of ownership.

108. The right to own private property is fundamental to the operation of a market economy, and the scope and extent of private sector involvement in the economy often is an indicator of the extent to which the economy is market-driven. The first formal stage of privatization in Russia commenced in 1992, with the implementation of the 1991 Law on Privatization of State and Municipal Enterprises, which established the legal and organizational basis for the sale of small-scale firms and businesses, as well as the mass privatization of medium-sized enterprises. In 2001, the government adopted chapter 17 of the Civil Code and passed a new land code that for the first time sets clear and well-defined rules on land privatization and transfers.

109. Decentralized economic decision-making is a hallmark of market economies, where the independent investment, input-sourcing, output and pricing actions of individuals and firms in pursuit of private gain collectively ensure that economic resources are allocated to their best (most efficient) use. Prices in such economies tend to reflect both demand conditions and the relative scarcity of the resources used in production

110. Foreign Investment in Russia is regulated by the Law "On foreign investment in the Russian Federation". In terms of Article 11, foreign investors have the right to transfer beyond the bounds of the Russian Federation incomes, profits and other lawful received money, after payment of all taxes and fees stipulated by legislation of Russian Federation. Further any foreign investor has a right on free use of incomes and profits within the territory of the Russian Federation for reinvestment observing the provision of clause 2 article 4 of the present Federal Law or to other targets not contradicting to the legislation of RF, and on free transfer beyond the borders of the Russian federation of incomes, profits and other lawful received money in foreign currency resulting from previous investments, and namely:

111. A country's integration into world markets is highly dependent upon the convertibility of its currency. The greater the extent of currency convertibility, for both trade and investment purposes, the greater are the supply and demand forces linking domestic market prices in the country to world market prices. The greater this linkage, the more market-based domestic prices tend to be. The Russian government took early action to establish the prerequisites for a convertible currency that would form the basis for a market-based exchange rate. A presidential decree of November 1991 liberalizing foreign economic activity for Russian enterprises established a market-based exchange rate, determined on the basis of supply and demand at foreign currency auctions, exchanges, and the inter-bank market. To establish the supply and demand that determines Russia's market-based exchange rate, the 1992 Law on Currency Regulation and Currency Control, as amended, guarantees residents (individuals and companies) the right to hold, own and sell foreign currency, maintain foreign exchange accounts at authorized banks, and engage freely in current account transactions. The 1990 Law on the Central Bank, as amended, separates the functions and obligations of the state and the Central Bank of Russia (CBR). It gives the CBR primary responsibility for maintaining stability of the ruble, strengthening and developing the banking and settlement systems, managing the money supply, serving as creditor of last resort for banks, and setting currency and accounting regulations. The ruble has been fully convertible for current account purposes since 1996, when Russia agreed to assume IMF Article VIII obligations. Domestic and foreign companies and individuals are free to acquire, hold and sell foreign exchange, and foreign companies are free to repatriate capital and remit profits. The ruble is also convertible for capital account purposes. The ruble is convertible into foreign currencies for trade and investment purposes, giving rise to supply and demand on currency markets that determine the exchange rate.

112. The exporter’s request for extending the Market Economy treatment and determine the normal value as per para 1-6 of annex-I on the basis of domestic sales in their home market was examined by the Authority. The exporter furnished the information as desired under para 8 (3) of Annexure 1 of Anti Dumping Rules which have been verified during the on spot verification at their premises. The company was able to show to satisfaction of the Authority that management and control of the company regarding production, marketing and pricing were in the hands of the management which were fairly independent from the state intervention. However, the authority examined the facts brought by the Russian exporters and relevance of the notification No. 101/2003 dated 10.11.2003 in the light of the Hon’ble Tribunal judgment in the matter of Exide Industries Ltd. V/s. Designated Authority. In the light of above examination the Authority considered to grant Market Economy treatment to this exporter and determine normal value under para 1 to 6 of Annexure 1 to the Anti Dumping Rule.

113. Under Section 9A(1)(c), normal value in relation to an article means:

i) the comparable price, in the ordinary course of trade, for the like article when meant for consumption in the exporting country or territory as determined in accordance with the rules made under sub-section (6); or

ii) when there are no sales of the like article in the ordinary course of trade in the domestic market of the exporting country or territory, or when because of the particular market situation or low volume of the sales in the domestic market of the exporting country or territory, such sales do not permit a proper comparison, the normal value shall be either:-

(a) comparable representative price of the like article when exported from the exporting country or territory or an appropriate third country as determined in accordance with the rules made under sub-section (6); or

(b) the cost of production of the said article in the country of origin along with reasonable addition for administrative, selling and general costs, and for profits, as determined in accordance with the rules made under sub-section(6);

Provided that in the case of import of the article from a country other than the country of origin and where the article has been merely transhipped through the country of export or such article is not produced in the country of export or there is no comparable price in the country of export, the normal value shall be determined with reference to its price in the country of origin.

RUSSIA

M/s. JSC Nevinnomyssky Azot, Russia

Normal Value

114. The exporter claimed the Market Economy treatment and determination of the normal value as per the domestic sales in their home market. The Authority in view of information filed by the exporter on the issue of market economy, considered to take into account information furnished by the exporter. The Authority during the on-spot verification reconciled and verified the documents/information filed for their claim treatment as Market Economy. After the detailed examination the Authority considered to grant Market Economy treatment and determine normal value under para 1 to 6 of Annexure 1 to the Anti Dumping Rules.

115. The transaction wise domestic sales were provided in Appendix 1 of the exporters’ questionnaire which was verified from the records. They have also provided the cost of production which was reconciled from their books of account and profit and loss account. To examine whether the domestic sales are within the ordinary course of trade, the 80/20 test was conducted and it was found that the domestic sales in the home market were in the ordinary course of trade. The cost of raw materials, utilities, and other financial cost were also verified and reconciled from their accounts. The normal value was determined on the basis of domestic selling price in the home market after considering the adjustments claimed to arrive at ex-factory normal value. The adjustment claimed on account of credit charges and miscellaneous expenses were verified from their records and considered to arrive at normal value.

116. The normal value is therefore referenced as ****$/MT for M/s. JSC Nevinnomyssky Azot, Russia for the purpose of final determination.

Export Price

117. The Authority considered the information regarding the export price furnished by the exporter in Appendix 2. The exporter has claimed adjustments on account of Insurance, storage, inland freight, handling, forwarding, safety certification, custom duty on exports which have been allowed after verifying and reconciling form their records. The Authority considered these adjustments for the purpose for calculating the net export price of M/s. JSC Nevinnomyssky Azot, Russia. The ex-factory export price is referenced as US$ ****/MT for the purpose of final determination.

Other Exporters/Producers from Russia

Normal Value

118. The Authority notes that none of the exporters from Russia except M/s. JSC Nevinnomyssky Azot, Russia has responded with complete information. The Authority in view of non cooperation, has constructed the normal value for all other producers/exporters of Russia on the basis of best available information in accordance with Rule 6 (8) of anti dumping Rules.

119. The normal value is therefore referenced as ****$/MT for other exporters/producers of Russia for the purpose of final determination.

Export Price

120. The export price is determined on the basis of import statistics made available by DGCI&S. To arrive at ex-factory export price, adjustments before the FOB have been considered as claimed by the cooperative exporter whereas adjustments after the FOB have been considered on the basis of best available information as per Rule 6(8) of Anti Dumping Rules.

121. The ex-factory export price is referenced as ****$/MT for the purpose of final determination.

Iran

M/s. Iran Petrochemicals Commercial Company, Tehran

Normal Value

122. The Authority sent questionnaire to the all known exporter for the purpose of determination of normal value in accordance with Section 9 A (1) (C). M/s. IPCC rectified the deficiencies regarding the cost of production, profit and loss account, and documents regarding their claim of adjustments. They have cooperated during the course of investigation and furnished all required documents as per exporter’s questionnaire. The officials of the directorate under took the on-spot verification and reconcile the information furnished with the original records of the producer. The details of transaction wise sales were provided in Appendix 1 and during the course of verification it was found that the domestic selling price was much lower than the cost of production. Hence most of the domestic sales transactions were loss making transactions thereby the Authority disregarded the domestic selling price of subject goods in the period of investigation for determination of normal value as these are not in the ordinary course of trade. The raw material, utilities and other expenses were reconciled from their record to arrive at the cost of production. Since the domestic sale was not in the ordinary course of trade therefore, the Authority constructed the normal value as details provided by M/s IPCC in the exporters’ questionnaire.

123. The normal value is therefore referenced as ****$/MT for M/s. Iran Petrochemical Commercial Co. Ltd., Tehran for the purpose of final determination.

Export Price

124. The Authority considered the information regarding the export price furnished by the exporter in Appendix 2. The Authority considered the adjustments on account of insurance, handling, storage, inland freight. However the exporter has not shown adjustment on account of Commission and Ocean freight which have been taken from the details made available by one of the importers from Iran. The Authority considered these adjustments for final determination for arriving at the net export price at ex-factory level from Iran to India for M/S IPCC Tehran. The export price is determined as US$ ****/MT for the purpose of final determination.

Other Exporters/Producers from Iran

Normal Value

125. The Authority notes that none of the exporters from Iran except M/s. IPCC, Iran has responded. Since there were no other exporters/producers apart from the responding exporter in Iran therefore, the normal value was determined for the responding exporter has also been considered for other exporters/producers also.

126. The normal value is therefore referenced as ****$/MT for other exporters/producers from Iran for the purpose final determination.

Export Price

127. The entire exports were effected by M/s. IPCC which were co-related with the import statistical data of the DGCI&S. Since there were no other exporters/producers apart from the responding exporter therefore, the net export price was determined for the responding exporter has also been considered for other exporters/producers also.

128. The ex-factory export price is referenced as ****$/MT for the purpose of final determination.

Dumping, Comparison of Normal Value & Export Price

129. The rules relating to comparison provides as follows:

i) "While arriving at margin of dumping, the Designated Authority shall make a fair comparison between the export price and the normal value. The comparison shall be made at the same level of trade, normally at ex-works level, and in respect of sales made at as nearly possible the same time. Due allowance shall be made in each case, on its merits, for differences which affect price comparability, including differences in conditions and terms of sale, taxation, levels of trade, quantities, physical characteristics, and any other differences which are demonstrated to affect price comparability."

ii) The authority has carried out weighted average normal value comparison with the weighted average ex-factory export price in Period of Investigation, for evaluation of the dumping margin for all the exporter/producers of the subject country.

The dumping margin for exporter/producers comes as under:

Exporter/

Producer

(1) Russia

M/s. JSC Nevinnomyssky Azot

All other exporters/producers

 

 

2.Iran

M/s. IPCC, Tehran

All other Exporters/Producers

Normal value(NV) $/MT

 

****

 

 

****

 

****

 

****

 

Export Price(EP) $/MT

 

****

 

 

****

 

****

 

****

 

Dumping margin as % of EP

0.03%

 

 

65.27%

 

12.90%

 

12.90%

E. INJURY AND CAUSAL LINK:

Views of Domestic Industry

130. Petitioners have made detailed submissions in this regard, which is already on the record of the Authority. In fact, in a way, some of the interested parties have conceded that the selling prices of the domestic industry declined significantly, albeit after the investigation period. Petitioners submit that the sole reason for this decline in the selling prices was price undercutting suffered by the domestic industry as a result of imported material. One of the interested parties has compared landed price of imports with selling price of AN melt. Does this argument not imply that AN melt and imported product are like article. What, however, has been ignored by this interested party is the fact that a price allowance has to be made to take into account higher transportation cost involved in selling AN melt as compared to solids. Once the two prices are adjusted for associated transportation costs, it would be found that the landed price of imports was lower than the selling price of the domestic industry.

131. A hype is attempted to have been created by the consumers by stating that their viability would be seriously threatened in case the present anti dumping duties are confirmed. Notwithstanding the fact that the conjecture is unsupported with any evidence, it is a matter or record (and confession by these interested parties) that the prices of the product under consideration have not increased pre-imports levels. How were these companies then surviving in the past. And if the product under consideration becomes cheaper of expensive for all the consumers, how their competitiveness get affected.

132. Petitioners strongly submit that the reference price fixed in the preliminary findings is grossly on the lower side and would not be adequate to protect legitimate interests of the Indian producers. Petitioners, therefore, submit that the bench mark may kindly be suitably enhanced. The most fundamental issue appears to be the assessment that NSR of the domestic industry being higher than the non-injurious price of the domestic industry is not based on fair comparison of these two components. While the NSR is in respect of packed/bagged material excluding selling and distribution expenses while the non-injurious price is in respect of unpacked/unbagged material excluding selling and distribution expenses. The same methodology for fair comparison may be adopted for the purpose of for fair comparison either prilling cost may be added to AN melt non-injurious price or net sales realisation is required to be adjusted for the other two units apart from Deepak Fertilisers.

VIEWS OF IMPORTERS/USERS

M/s. IBP Co., Ltd.,

133. There is a total absence of injury as the petitioner units are enjoying hefty profits. The sales, profits, and capacity utilisation of petitioners have improved during the POI as per the preliminary findings itself.

134. Existence of injury has been found by comparing the Non-injurious price with the landed value of the imports. It is submitted that the NIP determined is highly exaggerated, since with such an NIP, the petitioners would have been operating with losses since a number of years. This appears highly unlikely for the reason that the profits of the petitioner appear to have been increasing with the passing of time. Units such as DFPCL are operating much above their installed capacity, diverting resources for manufacturer of AN instead of fertilizers. Such diversion would not have taken place, if manufacture of AN were not profitable. Moreover, DFPCL is in the process of increasing its production capacity for melt and LDANP. This conclusively proves that before, during and after POI, the petitioners are operating profitably. They are also having the ability to raise resources for further investment.

135. There is no causal link between the imports and injury if any, to the manufacturers of AN. The landed value of imports exceeds the price of melt, even prior to the imports. Therefore, the imports could not have depressed the sale price of melt as claimed. Moreover, melt prices have remained fairly consistent, both before and after the imports. Import of HDANP has also not affected the price of LDANP, since the use of the two products is for different applications. Therefore, the imports are not the cause of injury to the petitioners, if any.

M/s. Bharat Explosives Limited

136. The volume and market share of the petitioners admittedly increased during the period of investigation. The profitability has also improved during the period of investigation as compared to the previous period. Production and capacity utilization have increased by about 2%, whereas there is a very substantial increase in the sales volume. Therefore, from the preliminary findings, it seems that the petitioners were much better off during the period of investigation as compared to the earlier period.

137. As per the preliminary findings, the cost of production has declined during the period of investigation. Such decline, if passed on to the customer, would have resulted in decline in prices. Therefore, there was no requirement for increase in price. Prior to the imports, the petitioners were operating profitability and if those price are taken as the non injurious price, it would be seen that there is absolutely no injury or price under cutting as found in the preliminary findings. The financial position of the petitioner appears to have improved during the POI.

138. The petitioners had been increasing their sale prices of AN melt consistently, upto the period of investigation, although their cost of production was coming down. During the POI, the landed value of imports was higher than the selling price of melt, and the imports did not have any negative impact, on the melt manufacturers. All the petitioner other than DFPCL have not in any way been affected by the imports since their sale volumes have increased and the prices have remained unaffected. The only manufacturer of prills i.e., DFPCL is also not suffering any injury as is evident from its Annual Reports.

139. There is a finding that imports depressed the domestic sale prices. It is submitted that the non injurious price appears to have been calculated on the higher side. If such cost of production (NIP) is taken to be correct, it would appear that the petitioners have along been making losses. If the sale price of the petitioners even prior to the imports was such that they were incurring losses then, such loss can not be attributed to the imports and must be as a result of factors other than the imports.

140. The manufactures of Ammonium Nitrate are basically fertilizer units and manufacture of Ammonium Nitrate only about 2-5% of their total sales. The levy of duty is going to make the manufacture of Ammonium Nitrate more profitable leading to the diversion of capacities and natural gas to non priority sectors such as Ammonium Nitrate. It is also a fact that the manufacture of Ammonium Nitrate in India is restricted on account of the limited availability of natural gas. Levy of duty can not, therefore, curtail the imports since the gap between the demand and supply of Ammonium Nitrate is only going to grow greater and greater with time. The Hon’ble Authority has failed to consider the impact of the levy on the company as a whole and the small scale units engaged in the manufacture of explosives.

M/s. Indian Explosives Ltd., and M/s. Special Blasts Pvt. Ltd.,

141. Since the market shares of these companies have increased, there is no natural and potential decline in sales but in fact there is an increase. Although the imports have increased in absolute terms, the market share of imports is insignificant and has not had any injurious effect on the petitioners. The imports are not undercutting the domestic sale price since the landed value of HDAN prills is higher than the sale price of melt. LDAN is a product having a higher cost of production therefore; its price can not be a basis for arriving at the injury margin.

The claim of injury by the petitioners is totally false as:

  1. the petitioners have increased their sale and capacity utilization of Ammonium Nitrate during POI and after POI.
  2. Deepak fertilisers could not fully supply the required quantities by the Explosive Industry during 2002-03 leading to partial shutdown of explosives manufacturing units requiring prills.
  3. Deepak group has enhanced Ammonium Nitrate manufacturing capacity by acquiring fertiliser unit of Rourkela steel plant and also increased their existing capacity to manufacture Ammonium Nitrate prills.
  4. The inventories remained insignificant during the investigation period.
  5. The Chemical Division (comprising of Ammonium Nitrate) of most of the Fertiliser manufacturing units are showing increased profits and margins in the Annual Report of 2002-2003.

142. Since most of the parameters considered for the imposition of preliminary duties are based on the constructed normal cost, non injurious price and the represented data by the petitioners, we request the designated authority to make a actual assessment of the parameters by verification of the associated facts with regards to cost, technology and safety for the explosives industry. The future development of the explosive industry largely depends on the decision taken by the authority on the investigation.

EXAMINATION BY THE AUTHORITY

143. Under Rule 11 supra, Annexure-II, when a finding of injury is arrived at, such finding shall involve determination of the injury to the domestic industry, "…..taking into account all relevant facts, including the volume of dumped imports, their effect on prices in the domestic market for like articles and the consequent effect of such imports on domestic producers of such articles…." In considering the effect of the dumped imports on prices, it is considered necessary to examine whether there has been a significant price undercutting by the dumped imports as compared with the price of the like article in India, or whether the effect of such imports is otherwise to depress prices to a significant degree or prevent price increases, which otherwise would have occurred, to a significant degree.

144. For the examination of the impact of the dumped imports on the domestic industry concerned, shall include an evaluation of all relevant economic factors and indices having a bearing on the state of the industry including natural and potential decline in sales, profit, output, market share, productivity, return on investments or utilisation of capacity; factors affecting domestic prices; the magnitude of margin of dumping; actual and potential negative effects on cash flow, inventories, employment, wages, growth, ability to raise capital investments in accordance with Annexure II(iv) of the rules supra.

145. The Authority has taken into account all indices regarding injury while doing the final determination. While determining the non injurious price for the like article under product under consideration for the domestic industry, the Authority consider the optimum cost of production for the domestic industry which would take into account the normated best consumption norms and would also take into the actual price of raw material utilities etc. which will go into the production under consideration in order to nullify the inefficiency of the industry.

Cumulative Assessment

146. The exporters/producers from Russia and Iran are dumping Ammonium Nitrate in the Indian market. Annexure II (iii) to the Anti Dumping Rules requires that in case imports of a product from more than one country are being simultaneously subjected to anti dumping investigations, the designated authority will cumulatively assess the effect of such imports, in case it determines that:-

(a) The margin of dumping established in relation to the imports from each country is more than two percent expressed as percentage of export price and the volume of the imports from each country is three percent of the imports of the like article or where the export of the individual countries less than three percent, the imports cumulatively accounts for more than seven percent of the imports of like article, and;

(b) Cumulative assessment of the effect of imports is appropriate in light of the conditions of competition between the imported article and the like domestic articles.

(c) The margins of dumping from each of the subject countries are more than the limits prescribed.

147. The Authority notes that the quantum of imports from each of the subject countries are more than the de-minimus limits. Cumulative assessment of the effects of imports is appropriate since the exports from the subject countries directly compete with one another and with the like goods offered by the domestic industry in the Indian market.

148. There is no difference in the product supplied by Iran and Russia which has been verified during the course of verifications of both domestic industry and exporters from Russia and Iran. Product imported from Russia and Iran has been substituted by the consumers in the end use. Further, these have been consumed and substituted with the goods produced by the domestic industry. The Consumers who were buying from the petitioners switched over to the imported product from subject countries. Thus, the consumers have been with limited interchangeablity (substituting for one-another) using the goods supplied by the domestic industry and the producers in the two countries;

149. Products supplied by producers in subject countries are being marketed in India during the same periods through comparable sales channels and under similar commercial conditions;

150. After the investigation period, the consumers have switched over to imports from Ukraine, which further substantiates that the producers in various countries are competing with each other;

151. The product imported from various countries has similar price levels. In fact, the sole reason due to which the consumers switch between the domestic product and between various Foreign Producers in subject countries is the price;

152 The users have purchased the subject goods from Russia and Iran. The sole criterion for purchase is the price offered by the producers in various countries;

153. Imports from both the countries are individually undercutting the prices of the domestic industry;

154. The domestic producer and exporters in the subject countries are selling the product to the same category of consumers.

155. Under the circumstances, the Authority believes that the conditions of competition exist between the domestic product and imported product as also amongst imported products.

Volume and market share of dumped imports

156. The Authority has considered the statistics of imports of subject goods made available by the Director General of Commercial Intelligence and statistics (DGCI&S), Kolkata and export details provided by cooperative exporters. The Authority has relied upon the DGCI&S data and export details provided by the exporters/importers for analysing the import trend from the subject country and injury caused to the domestic industry on this account.

 

Imports(MT)

1999-00

2000-01

POI(Annual)

2001-02

2002-03(Q-1)

Russia

0

60

22136

7759

19911

Iran

0

0

9600

0

12000

Sub. Countries

0

60

31736

7759

31911

Others

0

0

32.8

41

0

Total

0

60

31768.8

7800

31911

157. It is evident from the above table that during the POI (April 2001 – June 2002) 39670 MT of ammonium nitrate were exported by Iran and Russia. The imports of ammonium nitrate have increased significantly in absolute terms. During the period 2001-2002 imports have increased significantly over the imports of 2000-2001. The imports during the POI (annualized) have also increased significantly compared with the preceding year. There is a very significant imports during the last quarter of POI i.e., 31911 MT. The average CIF price of import from subject countries decreased in the POI and the major import of the POI from the subject countries has arrived in the last quarter.

 

1998-99

1999-00

2000-01

POI Annualized

2001-02

Q-1

(2002-03)

Share in Demand (%)

           

Merchant production

(D.I)

8.05

14.69

17.49

26.01

25.92

20.13

Imports from subject countries

0

0

0.01

6.14

1.47

20.84

Other Indian producers

22.49

21.16

27.42

19.09

18.64

16.12

Demand including captive consumption

584517

546492

542596

516934

529417

153089

Merchant Sales

47070.61

80272

96985

134444.64

137246.06

30809.22

158. The share of volume of imports in total demand has increased from 0.1% in 2000-2001 to 6.14% during the POI (annualized) whereas the market share in demand of domestic industry has also increased from 17.49% during 2000-2001 to 26.01% during the POI (annualized). It may be seen that the merchant sales has not decreased whereas share of import from subject countries has increased from .01% to 6.14% in the period of investigation annualized but in the last quarter of the POI its share increased to 20.84. The share of other Indian producers has reduced from 27.42% to 19.09% in the period of investigation annualized. Therefore, the authority believes that the loss of share to the other Indian producers in general is taken over by the subject countries whereas domestic industry has increased its market share.

Demand excluding captive consumption

1998-99

1999-00

2000-01

POI Annualized

2001-2002

Q-1

(2002-2003)

Merchant Demand (MT)

178557

195913

245824

274533

255775

87391

Domestic industry (%)

26.36

40.97

39.45

50.76

56.32

35.25

Other producer (%)

73.64

59.03

60.52

37.26

40.50

28.23

Imports from subject countries

   

0.02

11.98

3.18

36.52

Other Countries

0

0

0

0.01

0.02

0

159. The share of import from subject countries in Merchant Demand has increased from 0.02% in 2000-01 to 11.98% during the POI (annualized), whereas share of domestic industry has also increased from 39.45% in 2000-2001 to 50.76% during the POI (annualized). The share of other Indian producers has decrease from 73.64% during 1998-99 to 37.26% during the POI annualized. Both the domestic industry and subject countries have increased its market share in the POI (Annualized) whereas other Indian industries have lost substantial share.

Price Undercutting/ Price Depression/Price Underselling:

Country

Landed Value

Selling price

Undercutting

Russia

****

****

****

Iran

****

****

****

 

Country

Landed Value

NIP

Underselling

Russia

****

****

****

Iran

****

****

****

160. In considering the effect of the dumped imports on prices, it is considered necessary to examine whether there has been a significant price undercutting by the dumped imports as compared with the price of the like product in India, or whether the effect of such imports is otherwise to depress prices to a significant degree. The Authority has compared the landed value of imports of subject goods from subject countries during the POI with the net sales realization and has found that there has been a significant price undercutting by the dumped imports. The landed value of imports has been found to be significantly lower than the domestic industry’s net sales realization. The Authority notes that the price underselling is an important indicator to make an assessment of the injury. The Authority has worked out the non injurious price for the product under consideration and compared the same with the landed value to arrive at the extent of price underselling. The analysis shows a significant level of incidence of price underselling. The Authority has determined the extent of price undercutting and price underselling during the POI and holds that dumped imports is the cause of significant price undercutting and price underselling during the POI. The authority notes that the landed value of dumped imports from the subject countries undercuts the selling price of the domestic industry in the range of 15% to 24%. The under selling has also been examined by the authority and found that the landed value of dumped imports under sales the fair selling price of domestic industry in a range of 7% to 20%.

Profitability

Domestic industry

1998-99

1999-00

2000-01

POI Annualized

Unit cost of production

****

****

****

****

Trend

100

123.48

132

124.92

Unit selling price

****

****

****

****

Trend

100

109.17

123.78

118.15

Unit profit/loss

****

****

****

****

Trend

-100

-289.50

-227.36

-202.12

161. The cost of production of the domestic industry has declined in the POI whereas selling price has also declined. The cost of production has not declined to the extent decline in the selling price of AN. The cost of production has increased from 100 to 124.74 in the POI annualized whereas the selling price has increase only to 118.25 in the POI annualized during the injury period. The authority believes the increase in selling price is not proportion to the increase in the cost of production. It may be stated that the loss position has improved marginally in the annualized POI. The domestic industry is incurring the loss due to the fact that the domestic industry is not able to recover the cost of sales but loss position has improved in the POI (Annualized).

Inventory/Stock

 

1998-99

1999-00

2000-01

POI Annualized

Opening stock (MT)

293.2

293.2

108.07

358.61

Trend

100

101.03

36.86

122.31

Closing stock (MT)

296.43

107.97

358.61

463.78

Trend

100

36.42

120.98

109.18

Average stock(MT)

294.865

202.1

233.19

411.19

Trend

100

68.54

79.08

115.69

162. The Authority notes that the inventory has increased from 107.97 MT in 1999-2000 to 358.61 MT in 2000-2001 and it has decreased to 323.65 MT in the POI (annualized). The average stock is showing a increasing trend from 202.1 MT in 1999-2000 to 233.19 MT in 2000-2001 which has further increased to 341.13 MT during the POI(Annualized) which is less than 1% of the production. The petitioners submits that the AN solid being highly Hygroscopic in nature, has a limitation to its self life because of this reason they don’t keep high inventories. In the case of AN melt since the material is stored in insulated storage tank at a temperature around 130 degree C, thus the plant operate at bare minimum inventories. Therefore the Authority notes that even inventory at minimum levels regulate production volumes on availability of sales contracts still, it can not be conclusively stated that this trend indicates injury to the domestic industry.

Production & Capacity Utilisation

MT

1998-99

1999-00

2000-01

POI Annualized

2001-02

Q-1

(2002-03)

Capacity

563587

563587

563587

563587

563587

140869.8

Production

453034

430663

394007

406083

411053

96551.21

Capacity utilisation (%)

80.38

76.41

69.91

72.06

72.94

68.58

Domestic sales

47070

80272

96985

134444

137246

30809

Captive

405960

350579

296772

242449

273661

65698

163. The production has decreased in 2000-2001 but showing a increase of 3% during the POI (annualised). The capacity utilisation has also increased a little more than 1% in POI compared to preceding year 2000-2001. The domestic sale is also showing a increasing trend due to the increase in demand. The petitioners did not provide sufficient evidence for its claim of increase in sales due to closure of M/s. SAIL Rourkela and M/s. FCI Sindhri, as these units are closed for production of Ammonium Nitrate.

164. The Designated Authority believes that the petitioner companies are having substantial captive consumption of the product for the purpose of manufacturing urea. At the same time, petitioner companies have significant merchant sales of the product in the domestic market. The product being consumed captively and product being sold in the merchant market has entirely different end use. It does not appear that performance of the domestic industry in the captive and merchant markets are linked or affect relative competitiveness of the two separate and distinct markets. Neither there are imports of the product for production of urea nor does the market for urea seem to be affected with changes in the merchant market of the subject goods.

165. The Authority considered the views of the domestic industry that the NIP and NSR should be equated at the same level. As discussed earlier also that through out the investigation AN melt has been considered as the basic stage from which all additions whether in the form of prilling cost and additional selling expenses and bagging have been taken into account for determination of NSR for a fair comparison. The incremental additions for the NSR calculation have been worked out along with the selling expenses and bagging in line with product under consideration. In the determination of Non-injurious price for domestic industry, the Authority has examined and analyzed in detail all the relevant factors including cost of raw material used in the production of subject goods, the consumption thereof, the cost of utilities such as power, water etc., interest cost, cost of labour, depreciation cost, and selling and administrative expenses. The factors such as investments made in plant and the capacity utilization have also been examined in the cost analysis. All these factors have been determined with reference to the basic books of accounts and production and financial statements.

Other Economic parameters of domestic industry

Year

1998-99

1999-00

2000-01

POI (annualized)

Wages

100

105.12

115.40

127.66

Cash flow

100

81.21

124.40

19.93

Production per day

100

95.06

86.97

89.64

Growth %

41.36

17.23

27.86

29.33

Employment

100

97.13

93.64

94.98

Return on capital employed

-100

-132.02

-99.05

-107.09

(a) The employment trend of the domestic industry has not undergone any significant change during the POI but it has gone down from 100 to 94.98. The employment level of the domestic industry has declined during the entire injury period which has also resulted in the level of production per day and the authority did not find reasons for causing injury on account of this factor.

(b) The domestic industry is multi product Group Company; thereby the authority could not decisively determine the cash flow pertaining to the product under consideration. Therefore, the authority notes that the injury on account of this factor is not established.

(c) The wages of the domestic industry in the period of investigation was increased from 100 to 127.66 during the POI which may be the reason for increase in the cost of production in the POI. The increase in wages is regulated as per the national law and the domestic industry is guided by the existing law of the land.

(d) The production per day of the domestic industry has decreased in every consecutive year. The growth in sales volume has declined from 41% in 1998-99 to 27.86% in the POI(Annualized) but increased from 17.23% in 2000-01. The return on the capital employed is negative due to the losses incurred by the domestic industry throughout the injury period, therefore did not plan any expansion.

Threat of Injury

166. As regards the threat of injury, the Authority notes that the Anti-Dumping Rules states as follows:

167. "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 DA shall consider, inter-alia, such factors and;

  1. a significant rate of increase of dumped imports into India indicating the likelihood of substantially increased importation;
  2. sufficient freely disposable or an imminent, substantial increase in capacity of the exporter indicating the likelihood of substantially increased dumped exports to Indian market, taking into account the availability of other export markets to absorb any additional exports;
  3. whether imports are entering at prices that will have a significant depressing or suppressing effect on domestic prices, and would likely increase demand for further imports; and,
  4. inventories of the article being investigated.

168. (i) The Authority examined the contention of the Petitioners regarding threat of injury and noted that many countries have already imposed anti dumping duty on imports of Ammonium Nitrate from Russia. This has resulted in increased pressure on Russian Exporters to sell more in Indian market as they have a huge production base. It is evident from the import statistics of DGCI&S that during the last three months period of POI(April-June’02) 19911MT of AN were exported by the Russian Exporters , compared to 19786 MT in 2001-2002. Further 37926.3 MT of Ammonium Nitrate were exported by Russian exporter during July – September 2002 (post POI) as per import statistics available from DGCI&S Kolkata.

ii) The imports are undercutting the prices in the domestic market.

iii) On examination of installed capacity vis-a-vis production it is found that the stocks available with the exporter is less than 1% of the total production both in case of Russian and Iranian exporters. The authority believes that these manufacturers do not have surplus available with them.

iv) The trend of imports in the post investigation period is significant but its share of the domestic industry has not declined in the total demand for the product under consideration in the annualised period.

v) On the basis of above examination the Authority could not find sufficient reasons to conclude evidence of threat of material injury to the domestic industry.

169. It has been argued that the number of interested parties that the Authority did not satisfy itself about the adequacy and accuracy of information submitted by the domestic industry and the petition filed was not in the form and manner prescribed. It has also been argued that the vital information have been kept confidential by the interested parties depriving the opposing interested parties of the right to challenge the information and make meaningful submissions to the Authority. However regarding the information being made available to the opposite interested parties a provisions regarding confidentiality have been kept in mind. The Rule 7 of Anti Dumping Rules provides for submission of information by the interested parties on confidential basis subject to the condition laid down therein. The non-confidential summary of the information submitted on the confidential basis is placed in the public file, which is available for inspection, by all interested parties in terms of Rule 6 (7) of the Anti Dumping Rules. In this case also non-confidential summary of the confidential submissions made was placed in the public file accessible to all the interested parties.

Causal Link

170. The authority has carefully examined the submissions made by various interested parties in respect of the issue of causal link. Subsequent to the preliminary findings, a detailed examination was made by the Authority with regards to the issues pertaining to the material injury to the domestic industry and causal link between the material injury to the domestic industry and dumped imports. Paragraph (v) of Annexure II of the Anti-dumping Rules reads as under:

"(v) It must be demonstrated that the dumped imports are, through the effects of dumping, as set forth in paragraphs (ii) and (iv) above, causing injury to the domestic industry. The demonstration of a causal relationship between the dumped imports and the injury to the domestic industry shall be based on an examination of relevant evidence before the designated authority. The designated authority shall also examine any known factors other than the dumped imports which at the same time are injuring the domestic industry, and the injury caused by these other factors must not be attributed to the dumped imports. Factors which may be relevant in this respect include, inter alia, the volume and prices of imports not sold at dumping prices, contraction in demand or changes in the patterns of consumption, trade restrictive practices of and competition between the foreign and domestic producers, developments in technology and the export performance and the productivity of the domestic industry."

171. The Authority notes that the petitioners had significant market share of the subject goods and it is increased in the period of investigation. With the exception of Russia and Iran which account for 76.81% and 23.1900% of the total imports of the subject goods, all other subject countries cumulatively account for.01% of the total imports and are therefore de-minimus. Hence the allegedly dumped imports from other countries had no volume effect on the domestic industry. In examining the price effect, that is, whether the dumped imports have significantly undercut the price of the like product in India, the Authority notes that the landed values of the subject goods from the subject countries/territory were lower than the net selling price of the petitioners but the non-injurious price determined for the domestic industry during the period of investigation is less than the net selling price of the domestic industry. Therefore the question of material injury to the petitioner from the dumped imports does not arise.

172. Closure of other two industries producing the subject goods was also examined. The authority on the basis of records available cannot conclusively determine that these two industries have closed down operations because of dumping from subject countries. The Authority could not find any evidence of contraction of demand. However, the authority has verified the submissions made by the exporters/importers/user industry in terms of the technical characteristics of the subject goods, which are now in demand, by the user industry of the subject goods. On the basis of the foregoing; the authority notes that there is a change and convenience in the pattern of consumption. The authority thus, believes that even after the minor change in the pattern of consumption the domestic industry did not lose its share in demand. The Authority holds that the increasing quantum of imports from subject countries did not affect much the market share of the petitioner and the demand has also increased. However, import of HDAN prill has resulted in curtailment of sales contract of other producers of AN, not of the petitioners.

173. The export performance of the domestic industry has slightly improved during the POI but, that is less then 1% of the total production and roughly 2.5% of the merchant sales of the domestic industry. Therefore, the authority believes that the material injury suffered by the domestic industry is not the result of export performance of the domestic industry. Factors such as trade restrictive practices of and competition between the foreign and domestic producers, developments in technology, export performance or the productivity of the domestic industry do not appear to have caused injury to the domestic industry. Nor any quantified evidence suggesting injury to the domestic industry on these accounts been brought to the knowledge of the Designated Authority during the course of the investigations

174. In determining whether injury to the domestic industry was caused by the dumped imports, the Authority examined the impact of all known factors and their consequences on the situation in the Industry in the above para. The known factors other than dumped imports, which could at the same time, have injured the domestic industry, were also examined to ensure that the possible injury caused by these other factors was not attributed to the dumped imports. The authority also examined the effects of other known factors of the domestic industry and believes that the material injury suffered by the domestic industry is not due to the other known factors. However, the Authority notes that the market share, production, capacity utilization, sales volume of the domestic industry has increased during the POI and the net sales realization is more than the non injurious price for the product under consideration for the domestic industry.

175. The Authority therefore holds that the material injury to the domestic industry has not been caused either by the dumped imports from the subject countries or by other known factors. In view of the above, the Authority notes that the petitioners have not been able to provide sufficient evidence of material injury and threat of material injury to the domestic industry from the imports of the subject goods in terms of the requirements stipulated under the Anti-Dumping Rules. Therefore, the authority believes that the dumped imports has not caused material injury and threat of material injury to the domestic industry within the meaning of the anti Dumping Rules.

F. CONCLUSIONS:

176. The Authority after considering the foregoing, concludes that

i) The subject goods have been exported to India below its normal value resulting in dumping except M/s. JSC Nevinnomyssky Azot, Russia

ii) The domestic industry has not suffered material injury during the POI due to dumped imports from subject countries;

iii) It is therefore considered necessary to withdraw the anti-dumping duties recommended provisionally, vide notification No.14/36/2002-DGAD dated 7th April 2003 on imports of Ammonium Nitrate classified under Customs sub heading No. 3102.30 of chapter 31 of Customs Tariff Act being the subject matter of this investigation originated in or exported from Russia and Iran.

iv) In view of the above, the Designated Authority recommends withdrawal of the provisional duties in terms of the provisions of Rule 18, sub rule (4).The provisional duties already imposed or collected, if any, shall be refunded.

v) An appeal against this order shall lie before the Customs, Excise & Service Tax Appellate Tribunal in accordance with the Act, supra.

(ABHIJIT SENGUPTA)
DESIGNATED AUTHORITY

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