New-Delhi, 16^th January, 2002

Subject: - Anti-Dumping investigation concerning imports of Certain Polyester Staple Fibres (PSF) originating in or exported from Korea R P, Malaysia, Taiwan and Thailand--- Preliminary Findings.

No.22/1/2001-DGAD– Having regard to the Customs Tariff (Amendment) Act 1995 and the Customs Tariff (Identification, Assessment and Collection of Anti-Dumping Duty on Dumped Articles and for Determination of Injury), Rules, 1995,(as amended) thereof:

A. PROCEDURE

1. The procedure given below has been followed with regard to the investigations:

i) The Designated Authority (hereinafter referred to as Authority), under the above Rules, received a written petition from M/s. Association of Synthetic Fibres Industry (ASFI) representing the Indian domestic PSF industry, alleging dumping of Certain Polyester Staple Fibres (PSF) originating in or exported from Indonesia, Korea R P, Malaysia, Taiwan and Thailand.

ii) The preliminary scrutiny of the application revealed certain deficiencies, which were subsequently rectified by the petitioner.

The petitioners in their petition had suggested the ‘period of investigation’ as ‘March 2000 to November 2000 ‘. It was explained that the November data is the most recent data available on the subject while March data has been included in the POI as the custom duties on PSF were reduced from 35% to 20% w.e.f. 1^st March 2000. Since the duties become effective immediately after the presentation of the Budget, the petitioners consider that the real effect of injury would be captured if the POI starts from 1^st March 2000. It was added that the importers as well as the exporters from the subject countries were fully aware of the reduction of duties as the same were brought down due to the Indo-US and Indo-EU MOU.

The authority considered the above views and instead suggested that the POI be revised emphasizing that the POI should be on quarter wise basis as that would help in making appropriate analysis. While considering the proposed POI, due regard was given to the various draft recommendations of the WTO’s Committee on Anti-dumping practices. Accordingly, the petitioner submitted a revised petition taking 1^st January 2000 to 30^th September 2000 as the ‘Period of investigation’. The petition was therefore considered as properly documented.

iii) The Authority on the basis of sufficient evidence submitted by the Petitioner decided to initiate investigations against alleged dumped imports of Certain Polyester Staple Fibres (PSF) originating in or exported from Korea R P, Malaysia, Taiwan and Thailand. The Petitioner decided to exclude Indonesia from the scope of these investigations, as imports of the subject goods were below the de-minimis level from Indonesia during the ‘POI’. The Authority notified the Embassies of the subject countries about the receipt of dumping allegation before proceeding to initiate investigations in accordance with sub rule 5(5) of the Rules;

iv) The Authority issued a Public Notice dated 25^th June, 2001, published in the Gazette of India Extraordinary initiating anti-dumping investigations concerning imports of Certain Polyester Staple Fibres (PSF) being cleared under Chapter 55 of the Customs Tariff Act, 1975, originating in or exported from Korea R P, Malaysia, Taiwan and Thailand. No specific data is available with DGCIS on the import and export of this product, as the subject goods constitutes only a part of the HS code 5503.20 at the 6-digit level.

v) The Authority forwarded a copy of the Public Notice to the Associations of manufacturers in the respective country of export (whose details were made available by the Petitioner) and gave them an opportunity to make their views known in writing within forty days from the date of the letter;

vi) The Authority forwarded a copy of the Public Notice to the known importers and the known users of Certain Polyester Staple Fibres (PSF) (whose details were made available by the petitioner) and advised them to make their views known in writing within forty days from the date of the letter;

vii) Request was made to the Central Board of Excise and Customs (CBEC) to arrange details of imports of Certain Polyester Staple Fibres (PSF);

viii) The Authority provided copies of the non-confidential version of the Petition to the known exporters and the Embassies of the subject countries in accordance with Rule 6(3) supra;

ix) The Authority sent a questionnaire, to elicit relevant information to the following Associations of manufacturers in the respective country of export, from the subject countries, in accordance with Rule 6(4);

Korea Chemical Fibers Association

9^th Floor, Chokson Hyundai Bldg.,

80 Chokson Dong, Chongno-ku,

Seoul- 110-756

Republic of Korea

Malaysian Textile Manufacturers Association

Box # 42, Wimsa Selangor Dredging,

9^th Floor, West Block, 142 C Jalan Ampang, 50450 Kuala Lumpur

Malaysia

Taiwan Man-Made Fiber Industries Association

9^th Floor, TTF Building, No. 22, Al Kuo E, Road,

Taipei, Taiwan.

The Thai Synthetic Fiber Manufacturers’ Association

9^th Floor, Suit M, Payatai Plaza Bldg.

128/111 Phayathai Road,

Rajihavee, Bangkok 10400

Thailand.

x) It may be mentioned that some of the interested parties approached the Hon’ble Karnataka High Court by way of a writ petition challenging, inter-alia, the issue of jurisdiction as well as certain other issues. On the directions dated 6.9.2001 of the Hon’ble High Court, the Authority granted hearing to the interested parties and passed its Order dated 15.10.2001. This Order was subsequently challenged which was disposed of vide Hon’ble High Court Order dated 4.12.2001. An appeal was filed before the Division Bench, which has been admitted without any interim relief to the petitioners.

xi) The Embassies of the subject countries were informed about the initiation of the investigation in accordance with Rule 6(2) with a request to advise the exporters/producers from their country to respond to the questionnaire within the prescribed time. A copy of the letter, petition and questionnaire sent to the exporters was also sent to them, along with a list of known Associations of manufacturers in the respective country of export.

xii) A questionnaire was sent to the following known importers/users of Certain Polyester Staple Fibres (PSF) in India calling for necessary information in accordance with Rule 6(4);

Importers & Users:

1. Banswara Syntex Ltd.

Industrial Area, Dohad Road

Banswara : 327 001

Rajasthan.

2. Bhaval Synthetics (India) Ltd

Village Beekakhera,

Near Fatehnagar, Tehsil Mavli

Udaipur,

Rajasthan

3. Bhilwara Spinners Ltd

Gandhi Nagar

Bhilwara : 311 001

Rajasthan

4. Bhoruka Textiles Ltd

Satuur, P.O. Rayapur

Dist: Dharwad : 580 002

Karnataka

5. Bombay Dyeing & Mfg Co Ltd

Spring Mills

G D Ambedkar Road

Dadar, Mumbai : 400 014

6. BSL Limited

26 Industrial Area

PO 17

Bhilwara : 311 001

7. Chenab Textile Mills

Kathua, Kothana

Jammu & Kashmir

8. Chiranjilal Spinners (P) Ltd

Attayampatti Road

Kakapalayam

Salem Dist : 637 043

9. Deepak Spinners Ltd.

Guna -Ashok Nagar Road

Village Pagara

Dist: Guna , Madhya Pradesh

10. Eastern Spg Mills & Ind Ltd

Eastern Spinning Mills Industries

Village: Pirgachha

PO: Kadamgachhi

Barasat

11. Gokak Mills

Gokak Falls

Belgaum District

Karnataka – Gokak

12. Hanil Era Textiles Limited,

Village: Vanivali

Taluk: Khalpur, Dist: Raigad

Maharashtra : 410 220

13. HEG Ltd (Unit: Rishab Deo Tex.)

P.O. Rishab Deo,

Dist: Udaipur,

Rajasthan

14. Hind Spinners

Division of Hind Syntex Ltd

Dewas Road,

Indore

15. Indian Rayon & Industries Ltd

Unit Jayashree Textiles,

P.O. Prabas Nagar,

Rishra, West Bengal : 712 249

16. Indocount Choongnam Textiles Ltd.

National Highway No.8

Near Mayur Park Hotel

AT: Lakodara, Taluka: Karjan

Distoda: Baroda, Gujarat

17. Kumaran Polytex

155 Mill Road

Gopichettipalayam : 638 476

Periyar District, Tamil Nadu

18. Loyal Textile Mills Ltd

21/4 Mill Street

Kovilpatti

19. Madura Coats Limited

Papanasam Mills Post

Ambasamudram : 627 422

Tirunelveli Dist, Tamil Nadu

20. Morarjee Gokuldas Spg & Wvg Co

Dr Ambedkar Road

Parel, Mumbai : 400 012

21. Nahar Fibres

Nahar Fibres (Prop. Nahar Exports Ltd)

Village: Jatwal Kalan

Teh: Malerkotla, Dist: Sangrur

Punjab

22. Pallipalayam Spinners

Trichy Main Road

Nilavarapati

Salem : 636 201

23. Parasrampuria International

(A Div of Parasrampuria Syn Ltd)

423-432 Sector III, Pitampur Area

Pithampur, Dist: Dhar

Madhya Pradesh

24. PSM Spinners Limited - Unit-I

Sadashivpet

Medak Dist

Andhra Pradesh State

25. R K Synthetics & Fibres P Ltd

Shree Krishna Woolen Mills Compound

L B S Marg

Sonapur, Near Asian Paints

Bhandup, West Mumbai : 400 078

26. Rajasthan Spg & Wvg Mills Ltd

Unit: Kharigram

Gulabpura : 311 021, Rajasthan State

27. Suryajyothi Spinning Mills Ltd

Burgul Village, Farookhangar

Mahabubnagar : 509 202

Mahabubnagar Dist., Andhra Pradesh

28. The Jamshri Ranjit Singhji Spg & Wvg Mills Co Ltd

Fatechand Damani Nagar Station

Solapur – 413 001

29. The Bombay Dyeing and Manufacturing Co Ltd

(Textile Mills)

Pandurang Budkar Marg, Mumbai : 400 025

30. The Hindoostan Spg & Wvg M Ltd

Jacob Circle

Mumbai

31. Vardhman Spg & Gen Mills Ltd (Unit-I)

Chandigarh Road

Ludhiana, Punjab

32. Vishnu Lakshmi Mills (P) Ltd

Trichy Road

Sulur PO

Coimbatore : 641 402

33 The Southern India Mills Association

Post Box No. 3783

44 Race Course

Coimbatore – 641 018

34 Madurai Small Spinners Association

2A/2, Valamji Mansion

Manur Road (Opp Madura Coats)

Madurai – 625 020

35 South India Small Spinner Association

"Chamber Towers"

8/732, Avanashi Road

Coimbatore – 641 018

36 Northern India Textile Mills Association

PHD House

Opp. Asian Games Village

New Delhi

37 Rajashtan Textile Mills Association

B-1 Nawalkha Apartment

Bharat Mata Path

Jamnalal Bajaj Marg, ‘C’ Scheme

Jaipur – 302 001

38 Indian Spinners Association

Elphinstone Building, 2nd Floor

10 Veer Nariman Road

Fort, Mumbai – 400 001

39 Indian Cotton Mills Federation

Elphinstone Building, 2nd Floor

10 Veer Nariman Road,

Fort, Mumbai – 400 001

40 Andhra Pradesh Spinning Mills Association

208, Nilgiri

Aditya Enclave,

Ameerpet, Hyderabad – 500 038

41 South India Mills Association (SIMA)

Flat No. 202, Metropalmgrow Apartments

Raj Bhawan Road

Somajiguda, Hyderabad – 500 082

Responses were received from the following:

1. Exporters: -

1. M/s Kangwal Polyester Co., Ltd., Thailand.
2. M/s Tuntex (Thailand) Public Co. Ltd., Thailand.
3. M/s Far Eastern Textile Ltd., Taiwan
4. M/s Teijin Polyester (Thailand) Ltd.
5. M/s Teijin (Thailand) Ltd.
6. M/s Penfibre SDN.BHD., Malaysia.
7. M/s Huvis Corporation, Seoul, Korea

Responses were received from the following amongst others.

1. M/s Rajasthan Spinning & Weaving Mills Ltd.
2. M/s Shree Rajasthan Texchem Ltd.
3. M/s APM Industries Ltd.
4. M/s Priyadarshini Spinning Mills Ltd.
5. M/s Sutlej Industries
6. M/s Bhoruka Textiles Limited
7. M/s Bhoruka Industries
8. M/s Visaka Industries Ltd.
9. M/s Deepak Spinners Ltd.
10. M/s Banswara Syntex Ltd.
11. M/s The Bombay Dyeing & Mfg. Co. Ltd.
12. M/s Madura Coats Ltd.
13. M/s Indian Rayon and Industries Limited(M/s Jaya Shree textiles)
14. Northern India Textiles Mills’ Association.
15. Indian Spinners Association
16. Southern India Mills’ Association

xiii) M/s Teijin Polyester (Thailand) Ltd., the Thai Synthetic Fiber Manufacturers’ Association, and M/s Penfibre SDN.BHD., Malaysia requested for extension of time to submit the responses. Keeping in view the time bound schedule, extension for a limited period, upon good cause shown, was allowed by the Authority.

xiv) Additional information regarding injury was sought from the petitioners, which was also received.

xv) The Authority made available the non-confidential version of the petition and the non-confidential version of views / evidence presented by various interested parties in the form of a public file kept open for inspection by the interested parties.

xvi) The Authority sought information from all parties concerned, deemed necessary for the investigation.

xvii) Cost investigations including spot verification (as deemed necessary) of the domestic industry were also conducted to work out optimum cost of production and cost to make and sell the subject goods in India on the basis of Generally Accepted Accounting Principles (GAAP) and the information furnished by the Petitioner.

xviii) *** in this notification represents information furnished by an interested party on confidential basis and so considered by the Authority under the Rules;

xix) Investigations were carried out for the period starting from 1^st January, 2000 to 30^th September, 2000 (the Period of investigation also referred to as the POI).

B.2. PETITIONERS’ VIEWS

The petitioner companies have made the following major submissions in support of their case:

1.Section 9A of the Customs Tariff Act, 1962 (hereinafter referred to as the Act), refers to dumping as follows:

2. The above provisions of the Act clearly establish the right of the domestic industry to seek relief under the Act if the foreign exporters sell their goods below the "Normal Value".
3. The specific provisions to give effect to Section 9A are contained in the Customs Tariff (Identification, Assessment and Collection of Anti-dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995 (hereinafter referred to as the Rules). Rule 5 which specifically deals with the Initiation of investigation, reads as under:

"5. Initiation of investigation. - (1) Except as provided in sub-rule (4),  the designated authority shall initiate an investigation to determine the existence,  degree and effect of any alleged dumping only upon receipt of a written application by or on behalf of the domestic industry.

(2) An application under sub-rule (1) shall be in the form as maybe specified by the designated authority and the application shall be supported by evidence of –

(a) dumping

(b) injury, where applicable, and

(c) where applicable, a causal link between such dumped imports and alleged injury.

(3) The designated authority shall not initiate an investigation pursuant to an application made under sub-rule (1) unless -

(a) it determines, on the basis of an examination of the degree of support for, or opposition to the application expressed by domestic producers of the like product, that the application has been made by or on behalf of the domestic industry :

Provided that no investigation shall be initiated if domestic producers expressly supporting the application account for less than twenty five per cent of the total production of the like article by the domestic industry, and

(b) it examines the accuracy and adequacy of the evidence provided in the application and satisfies itself that there is sufficient evidence regarding-

  (i) dumping,

(ii) injury, where applicable; and

(iii) where applicable, a casual link between such dumped imports and the alleged injury to justify the initiation of an investigation.

Explanation. - For the purpose of this rule 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 per cent 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.

(4) Notwithstanding anything contained in sub-rule (1) the designated authority may initiate an investigation suo motu if it is satisfied from the information received from the Commissioner of Customs appointed under the Customs Act, 1962 (52 of 1962) or from any other source that sufficient evidence exists as to the existence of the circumstances referred to in clause (b) of sub-rule (3).

(5) The designated authority shall notify the government of the exporting country before proceeding to initiate an investigation."

4. It is clear from the above that the obligations of the domestic industry seeking protection from dumped goods are as follows:
1. There should be a written application by or on behalf of the domestic industry.
2. The Application shall be in accordance with the Rules and in the form as may be specified by the Designated Authority.
3. The application shall be supported by evidence of dumping, injury, where applicable, and a causal link between the dumped imports and the alleged injury
5. The domestic industry had meticulously completed all sections of the Application Proforma as are required to constitute a valid and fully documented application. Necessary evidence as prescribed in the Proforma was also supplied in accordance with the requirement. Further, the domestic industry also submitted additional information / clarification as asked for by the Designated Authority. Thus, it is clear that the requirements of Rule 5(1) and (2) were fully adhered to and the applicant domestic industry had fulfilled the obligations cast upon it by the Rules.
6. Rule 5(3) requires the Designated Authority to carry out the following before it initiates an investigation. Firstly, it has to determine whether the applicant domestic industry has the standing to file the application or not in accordance with the criteria specified in terms of Rule 5(3)(a) and the Explanation appended to the said sub-rule. Secondly, the Designated Authority has to examine the accuracy and adequacy of the evidence provided in the application. Thereafter, after satisfying itself that there is sufficient evidence with regard to dumping, injury and causal link to justify the investigation, the Designated Authority proceeds to investigate in accordance with the procedure prescribed under Rule 6.
7. In the instant case, the Designated Authority has examined the ‘standing’ of the petitioners and its determination has been mentioned in the Initiation Notification dated 25.6.2001. The Designated Authority has in para 3 of the initiation notification categorically come to a finding that the domestic industry was found to have the standing to file the application. While the opposing parties have vaguely questioned the ‘standing’ of the petitioner companies to file the petition, no justification/evidence has been advanced, to establish that the petition did not have the requisite support. There is an unsubstantiated and misdirected allegation that the Petitioner, viz. Reliance Industries, have themselves admitted that they are importers, in this behalf a reference is made to the response at query at Sr.No.6 of Proforma Annexure "C". The allegation is entirely untrue and inaccurate as a reference to the said query at Sr.No.6 of Annexure "C" indicates no such admission. It is also entirely untrue that the domestic industry has made any imports during the relevant period, viz: the period of investigation, whether as originally claimed or as modified by the Designated Authority. Thus, the initial determination by the Designated Authority that the petition had the support of units accounting for more than 83% of the production during the period of investigation, remains uncontroverted. It may not be out of place to mention that the averments of the opposing parties on this ground are absolutely frivolous as they themselves made statements during the course of the hearing that one of the petitioner companies is the market leader and the fifth largest producer in the world, having an alleged dominant market share.
8. During the hearing pursuant to the directions of the Hon'ble Karnataka High Court, the opposing parties challenged the initiation notification on the grounds that the petition filed by the domestic industry did not have sufficient evidence which could be considered as adequate and accurate. The learned advocate for M/s Madura Coats also questioned the jurisdiction of the Hon'ble Designated Authority on the grounds that the evidence available on record could not have led to the conclusion that the tests prescribed for initiation under Rule 5(3)(b) have been satisfied.
9. The opposing parties sought to challenge the initiation notification for lack of jurisdiction on the grounds that the evidence available was inadequate and inaccurate. While doing so, what was actually questioned was the assessment or judgment of the Hon'ble Designated Authority. It is respectfully submitted that for the purpose of initiation, the Designated Authority is only required to ensure that there is sufficient evidence with regard to dumping, injury and causal link to justify an investigation. It needs to be appreciated that the initiation notification is the beginning of the investigations, which thereafter proceed as per the prescribed statutory provisions.
10. The tests for sufficiency in Rule 5, have to be read in conjunction with the use of the words ‘to justify the initiation of an investigation’ in the last portion of the relevant rule. Kind attention is also invited to scope of Rule 12 (preliminary findings) and Rule 17 (final findings) which are quite in contradistinction to the language used in Rule 5. To elaborate, Rule 5 states "sufficient evidence regarding ……… to justify an investigation". Rule 12 (preliminary findings) states that "the Designated Authority ……. shall, in appropriate cases, record a preliminary finding regarding…". On the other hand, Rule 17 (final findings) categorically states that "The Designated Authority shall, within one year from the date of initiation of an investigation, determine as to whether or not ……… Extracts of the relevant rules are reproduced below:

"Rule 5(3): The designated authority shall not initiate an investigation pursuant to an application made under sub-rule (1) unless -

(a) it determines, on the basis of an examination of the degree of support for, or opposition to the application expressed by domestic producers of the like product, that the application has been made by or on behalf of the domestic industry :

Provided that no investigation shall be initiated if domestic producers expressly supporting the application account for less than twenty five per cent of the total production of the like article by the domestic industry, and …………."

"12. Preliminary findings. - (1) The designated authority shall proceed expeditiously with the conduct of the investigation and shall, in appropriate cases, record a preliminary finding regarding export price, normal value and margin of dumping, and in respect of imports from specified countries, it shall also record a further finding regarding injury to the domestic industry and……………."

"17. Final findings. - (1) The designated authority shall, within one year from the date of initiation of an investigation, determine as to whether or not the article under investigation is being dumped in India and submit to the Central Government its final finding………………."

11. The requirements of Rule 5(3) are two fold viz: (i) a determination prior to initiation is required to be done by the Designated Authority only with respect to the issue of ‘standing’ and not for dumping, injury or the causal link; (ii) an examination of the accuracy and adequacy of evidence, coupled with the satisfaction of the Designated Authority, as to the sufficiency of such evidence. The argument of the representatives of the opposing parties that there must be a complete determination as to all issues, is entirely contrary to the sequential basis of conducting such proceedings under the statutory provisions. As long as there is satisfaction as to the sufficiency of evidence, there is no further requirement of a final determination, as to the evidence at the stage of initiation.
12. The WTO panel decision in the case of Guatemala – Grey Portland cement from Mexico, supports the approach suggested in the context of the Indian Rules in the preceding paragraphs.

"8.35………. An anti-dumping investigation is a process where certainty on the existence of all the elements necessary in order to adopt a measure is reached gradually as the investigation moves forward. However, the evidence must be such that an unbiased and objective investigating authority could determine that there was sufficient evidence of dumping within the meaning of Article 2 to justify initiation of an investigation."

13. As regards the issue of injury, the domestic industry has submitted that the margins of dumping from each of the subject countries are more than the 2% limit expressed as % of export price. Also the volumes of imports from each of the country are more than de-minimis. Cumulative assessment of the effects of imports would be appropriate since the exports from the subject countries directly compete with each other and with the goods offered by the domestic industry in the Indian Market. The Authority was, therefore, requested to assess injury to the domestic industry from the subject countries cumulatively.
14. Sales Volume & Value: As regards the sales price, there is some apparent improvement over the last few years but it is stated that the increase in price is due to the increase in the cost of the raw materials. In fact, due to the sustained dumping from the subject countries, the petitioner companies have been suffering losses or have made abnormally low profits on the sale of the subject PSF despite the fact that our sales prices have gone up.
15. Changes in market share held by Indian producers: Market share for the domestic industry has fallen from 97.46% (as annualised) in the year 1999-2000 to 96.12% during the period of investigation (as annualised). At the same time, it may be seen that the imports from the subject countries have drastically gone up in relation to the domestic consumption, an increase of over 54% during the period of investigation as compared to the previous year. The complainants were threatened with a loss of market share through aggressive price under cutting followed by the exporters who have dumped the subject PSF into Indian market. Had the complainants chosen to hold on to non-injurious price, the loss of market share would have been severe. It would have also resulted in other consequential issues of increasing stocks, problems of storage, severe problems of cash-flow, blockage of working capital and may have led to forced reduction of throughput and drastic reduction of labour etc. The complainants, therefore, had no other option but to match the prices to the extent possible so as to protect its market share.

Further, the share of the imports from the subject countries has also significantly increased in relation to the imports from other sources i.e., from 79.77% in 1998-99 to 97.06% (as annualised) during the period of investigation. This trend clearly indicates that imports from subject countries have been able to capture a disproportionately higher market share due to its aggressive policy of price undercutting.

16. Output/productivity: The petitioners had to aggressively meet the threat of dumped imports and had to go all out to not only to protect its market share but also to lower its cost of production by going for higher throughput. This is reflected in higher capacity utilization. This was a necessary imperative for survival, otherwise the petitioners would have been forced to close down.

17. Production & Capacity Utilization: The demand for the subject goods has grown in the country at a healthy rate. However, the enhanced consumption has largely been appropriated by imports from subject countries. It is significant to note that our profitability has suffered due to incessant dumping despite the fact that we have been operating at fairly high levels of capacity utilization.

18. Selling Price / Profitability: Dumping by the subject countries has had a significant impact on the net sales realization by the domestic industry for the subject PSF. To hold on to its market share, the petitioners had to compete with low priced offers/imports of subject PSF from the subject five countries. Due to the large scale dumping by the subject countries, the domestic industry has suffered losses on their sales despite high level of capacity utilization. The landed value of the dumped imports also indicate that there is serious price under-cutting as well as price suppression taking place. This has adversely affected not only the profitability of the domestic industry but also their cash flows and working capital.

Different countries which have dumped subject PSF in India during the nine months of POI were offering their products at different prices. The customers/Users, however, tried to take advantage of the lowest offers under such a situation. The complainant domestic industry could not afford to have ignored any one of them. On a month to month basis, one exporter from each one of these subject countries was the lowest price supplier. Their relative pricing position kept on changing but the complainant domestic industry had to respond to the lowest quotes offered in the market place to protect the market share and to ensure that the customers do not go away.

A scrutiny of the import data submitted would prove this point beyond any doubts. Few examples are quoted.

i)During January 2000, the lowest CIF offer was from Korea at Rs. 27.79/kg. During February, the lowest CIF offer was from Korea at Rs. 27.84/kg whereas in the month of May, the lowest CIF offer was from Taiwan at Rs. 38.53/kg. During August 2000, the lowest CIF offer was from Taiwan at Rs. 36.66/kg while Korea quoted higher prices. During September the lowest CIF offer was from Thailand at Rs. 37.31/kg.

ii)The landed cost of dumped imports was lower than the desired fair selling prices for the complainants. One of the petitioners, namely Reliance Industries Ltd., submitted a table showing the desired fair selling price, the landed cost of imports, the extent of undercutting and the injury margin.

The details also show how the petitioners were forced to keep their selling price far below the fair selling price and closer to the landed cost of import to maintain the market share. Thus, the dumped imports not only resulted in suppressing the domestic prices but also did not allow the complainant producers to realise the fair prices. Thus, the dumped imports had the undesirable impact of price undercutting, price suppression, price depression, price erosion and severe loss of profitability.

19. Evidence of lost contracts: The complainant domestic industry tried its best to hold on to the customers. Yet the fact that over 8000 MT of dumped imports arrived into India during POI is adequate evidence that it lost potential customers.

20. Employment: As the domestic complainant industry continues to operate its plants at its full capacity and followed a policy of aggressive marketing, it did not have any significant impact on the employment.
21. Actual and potential negative effect on cash flows and Ability to raise capital: As far as M/s Reliance Industries is concerned, it is a multi-product Company and integrated to a large extent. It borrows working capital for the Corporate body as a whole. However, in the case of M/s IndoRama Synthetics Limited the cash flow position was precarious. The company was forced to seek rescheduling of its loan repayments to avoid default to lending institutions.
22. Inventories:In case of one of the petitioners –M/s Reliance Industries the negative impact on the inventories was avoided by aggressive marketing policy. In the case of M/s Indorama Synthetics Limited, the company had accumulated stocks averaging 9164 MT per month during the period of investigation. This is nearly equivalent to one-month production of the company. The same had to be liquidated by exporting at negligible margins or at times even at a loss to improve the seriously strained cash position of the company.
23. Threat of Dumping from the Subject Countries: The data published by leading consultancy firms like Tecnon, PCI etc. clearly and conclusively proves that there is a massive surplus capacity of 14,85,000 MTs in these 4 countries. The growth of consumption in these countries is minimal compared to the huge excess capacity and huge excess production they cumulatively have. The huge surplus production capacity over consumption and huge actual production over consumption constitutes respectively 14,85,000 MTs/annum and 11,94,000 MTs/annum. This is 2.65 times and 2.13 times the annualized Indian consumption respectively during the POI. Thus, this huge over capacity is like a hanging sword over the applicant / petitioner Indian Industry. It has the capability not only to intimidate/affect the Indian industry materially, but also to obliterate Indian industry in total. In addition to the above, the significant increase in dumped imports as well as severe price underselling clearly indicate the threat of injury to the domestic industry.

C.3. VIEWS OF EXPORTERS, IMPORTERS AND OTHER INTERESTED PARTIES

3.1 Exporters’ Views: -

1. M/s Kangwal Polyester Co., Ltd.

M/s Kangwal Polyester Co., Ltd. informed that they did not export to India any PSF during the Period of investigation.

2. M/s Huvis Corporation, Seoul Korea.

3. M/s Tuntex (Thailand) Public Co. Ltd., Thailand.

M/s Tuntex (Thailand) Public Co. Ltd., Thailand. informed that during the investigation period, their exports of PSF to India have been made to the following two companies:

1. The Bombay Dyeing & Mfg. Co., Ltd.
2. Parasrampuria International, New Delhi.

It has been further stated that Bombay Dyeing has purchased goods from Tuntex (Thailand) and cleared the same under Government of India’s Duty Exemption Scheme against Advance License without payment of duty. While Parasrampuria International is an E.O.U. and is exempted from payment of customs duty on raw materials imported by them. Further, it is understood that import clearances in India under DEEC scheme or by EOU companies are permitted for raw material on duty free basis so that they (the license holder/EOU companies) are entitled to source their raw materials at international prices and remain competitive in international markets for their finished products. Such imports do not also attract anti-dumping duty, wherever it has been introduced. Pursuant to that, they believe that exports of their company are out of the purview of the investigation.

On the basis of the above it has been submitted that their company, Tuntex (Thailand) Public Co., Ltd. should be excluded from this investigation.

On injury analysis, the following issues have been raised:

1. It has been stated that the Petitioner’s Data is deficient as the data has been based on that collected and collated by some agency-Trade India Import Data, Mumbai, which is not an official agency and its credentials are unknown. The data given by this agency, in their view, cannot be relied upon, and that inadequacy of the data itself should rule the same out for any genuine and meaningful analysis and interpretation. Thus, the conclusion drawn by the complainant that imports of PSF have caused injury to the Indian industry is motivated and misleading. There is no Increase in import/drop in import volume and the same is below the threshold of de-minimis. M/s TUNTEX has relied upon data compiled by the Office of the Textile Commissioner, Department of the Ministry of Textiles, Government of India.
2. No Increase in Import / Drop in Import Volume: According to the data released by the office of the Textile Commissioner, imports of PSF in India during 1997-98 was 29766 MT; in 1998-99 17444 MT; in 1999-00 13830 MT and in 2000-01 7236 MT respectively. The volume of imports clearly points to a continued decline in imports over the last four years. The drop in import volume has been as much as 243% in 2000-01 when compared with imports in 1997-98.
3. Import vis-à-vis Production: Production of PSF in India has been ever-on-increase since its commencement, from 228,096 tons in 1995-96 to 438,616 tons in 1997-98, and 563,280 tons in 2000-01. The share of import volume at 7,236 tons in 2000-01 vis-a vis production is insignificant at 1.3%. Though, the import data submitted by the Complainant is deficient, notwithstanding that, on the basis of Petitioner’s data too, the share of import vis-à-vis production is insignificant at 1.44% in respect of Import from subject countries and 2% in respect of total import.

5. Below the Threshold of De Minimis: The share of PSF import vis-à-vis production as well as consumption in India is below the de minimis threshold of 3%. Hence, the Investigation should be terminated. It has been stated that there is no price undercutting and that imports have not caused Price depression. Further imports have not prevented price increase, as the price of PSF sourced from Subject countries during the period 1998-1999 to 2000-2001 is higher than the price of the Indian product. Further, since RIL and Indo Rama hold 94.70% of the total effective productive capacity for PSF in India Comparison has been made between their price and that of the imported PSF).
6. Imports have not caused Price Depression: The trend in price of PSF produced in India has been inclined upward as the price movement of PSF movement in the Indian market shows a significant gain from Rs. 56.55/Kg. in 1997-98 to Rs. 66.90/Kg. in January, 2000, then stabilizing at Rs. 63.34/kg during March- August 2000 period and later rising to Rs. 65.56/kg in September that year. Import of PSF, therefore has not caused a price depression. Thus, the imports have not prevented price increase.
7. Raw Material Price Fluctuations; The price of PSF largely the cost of its inputs, which accounts for about 72%. The fluctuations in the price of the inputs, therefore, have an important bearing on setting the price of PSF. An examination of data on price movement of the main inputs, such as PTA and MEG, as given below, shows a direct relationship between the cost of the said inputs and the end product- PSF. The erratic movement of price, if and when it takes place, is a consequence of that and has no bearing on the capacity of the producers to raise the price if the scope exists and earn a reasonable profit margin. Imports of PSF have, therefore, not handicapped them and prevented them from raising the price.
8. Insignificant share of imports: As is evident from above an insignificant share of PSF imports – 1.3% in production and 1.37%in consumption in Indian market, does not seem to have affected the capacity of the Indian producers to set their own price. It is also substantiated by the growth pattern of the Indian PSF industry. There has been a significant growth in consumption of PSF in India; substantial expansion in the production of PSF, and they have plans to enhance productive capacity.
9. Import Barriers and Logistical advantages: Besides the above, The Indian users of PSF will always opt for local product on account of the following:
10. High import duty on imports. The effective duty on imports of PSF is 47.76% comprised of a basic customs duty at 20% + countervailing duty at 18.4% and additional custom duty of 4%.
11. Logistical advantages – indigenous quality at par with imported PSF, door delivery at no extra cost, buy as and when required and in as much quantity as needed, credit facility, loyalty discount, technical service ready at hand etc. – of domestic supplies of PSF.

Factors Affecting Price of PSF produced in India.

12. Demand for the Product: Demand for PSF in India has been ever on increase since commencement of its production. The Indian producers have also forecasted strong growth in demand in future.
13. Quality of the Product: PSF produced in India is of international standard and meets all the technical specifications of the product required by the Indian consumers.
14. Resilience of the Indian producers: Resilience of the Indian producers to change the product according to the developments and changes in the end product. Besides the commodity line, the Indian producers are undertaking diversification of product in the area of specialty fibers to meet changing customer demands.
15. Productive efficiency: Producers are undertaking to enhance productivity, increase capacity utilization and achieve better operational efficiencies in order to maximize production and reduce cost.
16. Raw Materials at International Price: India is increasingly becoming self-sufficient in the production of Polyester Intermediates, such as PX, PTA and EG. RIL is the largest manufacturer of Polyester Intermediates in the country, meeting 80% of the demand. Consequently the price of Indian PSF is not expected to suffer from untoward global developments in the production and availability of those items.
17. Export: Export activity enables the producers to upgrade quality, introduce product changes, achieve better operational efficiencies and become price competitive. Pursuant to that the Indian producers of PSF have made exporting an integral part of their sales policy.
18. State of PSF Industry in India: The Indian productive capacities, Reliance Industries Ltd. and its Group Companies accounts for 68.2% and Indo-Rama Synthetics Ltd. account for 26.5%. Together they control 94.70% of the total effective capacity. Hence, the performance of these two companies would point out whether the alleged imports of PSF caused injury to the Indian producers.
19. Performance of Reliance Industries Ltd. (RIL) – Second Largest Producer in the World. On the basis of the analysis of the performance of RIL, it is established that the company performed extremely well; achieved the highest-ever capacity-utilisation. The cash flow position of the company has been extremely good. It is contemplating to expand its activities substantially. The company by acquiring additional productive capacities has consolidated its position as the market Leader. It has an excellent market capitalization record-the share price of the company has consistently out-performed the bench mark index, the BSE sensex, NSE Nifty and delivered high returns to domestic and international investors. The company enjoys global competitiveness and that the company achieved the highest ever price during the period under investigation.
20. PSF Production / Sales- No Threat of Import: The analysis of production and sales points out that RIL recorded continued growth over the last few year both in production and sales, except in the year 2001-01 when the performance suffered a slight set back form internal developments and in no way from imports, which the Company itself has claimed to be at marginal levels. The production of PSF during the last few years has been as follows (in 1998-1999 263,381 MT; in 1999-2000 313,129 MT; and in 2000-2001 302,429 MT) and sale in 1998-1999 268,957 MT worth Rs1285.86 crores; in 1999-2000 343,009 MT worth Rs 1774.16 crores; and in 2000-2001 302,429 MT. The Company has attributed decline in sales of / demand for PSF in 2001-01 to domestic reasons developed all of a sudden. The domestic developments that affected demand for PSF during the year 2001-01 also gave a set back to production. In addition, according to its Annual Report 2001-01, RIL engaged itself in developing specialty products accounting for 63% of its PSF production that restricted expansion in production to some extent.
21. Capacity Utilization: RIL and its controlled units, have the largest productive capacity in PSF in India. Its total productive capacity is 385,250 tons equal to 68.2% of the effective capacity in India. The high level of capacity utilization and excellent performance in respect of other economic factors do not point to any adverse pressure of import on the working of the company. The question of an insignificant quantity of imported PSF posing a threat to RIL in the matter of capacity utilization does not arise. RIL is the largest producer of PSF in India. Its production during the year 2000-01 was 317,000 tons with market share of 51 per cent. RIL, with its large productive capacity, has been the market leader in India and has always recorded the highest market share. With every expansion in its production its market share has grown from 47 per cent in 1999-00 to 51 per cent in 2000-01.
22. Financial Performance: Successive increase in profit after tax every year is an indication that there is no pressure on profit margin that is derived after charging all cost elements into income. The Financial Statements of the company indicate that it was not under pressure to reduce the price below cost. The company did not suffer from price depression.
23. The decline in market capitalization in 1998-99 was due to extremely depressed situation, which prevailed, in major stock exchanges in North America, Western Europe and Far East.
24. Productivity: Productivity has been one of the factors that have helped the company to raise the Operating Margin. The company improved the operating margin from 18.6 per cent to 20 per cent during the year 1990-00 as a result of gains from productivity, strong volume growth, higher product prices mitigating higher operational cost, cost control and operational efficiencies, higher degree of value addition, and rationalization of custom duties. The company kept up its activity with the same vigor with the operating margin remaining largely stable during the year 2000-01.
25. Cash Flow: RIL has continued to enjoy strong cash flow position over the year. During the year 1999-00 the company claimed that its cash flows, at current year’s levels, for less than two years, are adequate to extinguish its entire net debt. In the following year the company’s cash flows improved further and as stated in the Annual Report-2000-01, those at current year’s levels, for less then three years, are adequate to extinguish its entire debt at Rs. 10,135.79 crores.

1. From the analysis of the performance of Indo Rama it is established that the company has increased production over the years. Since it commenced operation the company has expanded its share in the domestic market. The company has been able to wipe out the losses accumulated prior to the period of investigation. The company enjoys comfortable cash flow position and it is in the process of carrying out expansion. The lenders are satisfied with the performance of the Company. The setback that the Company suffered from during the years 1997-98 and 1998-99, as explained by the management was on account of internal developments peculiar to that company. The Company has now overcome the causes of setback and looks forward to a promising future with achievement of improved productivity, production efficiency, cost reduction, diversification towards increased value-added products, higher sale volumes and bigger profit margin. The Company has based its projection on increased domestic demand and firming up of international prices of Polyester products. The Company plans to enhance productive capacity by around 10 per cent through de bottlenecking by the addition of balancing equipment. The diversification plans of the Company include production of Technical Textiles. All this indicates the Company’s ability to go in for additional capital expenditure as well as raise it. Indo Rama is the single largest dedicated polyester manufacturer in India, holding around 20 % market share. Its products include PSF, PFY, Polyester Chips, DTY and Yarn.
2. Production and Sales: Production in M/s Indo Rama is dominated by PSF, which has been ever increasing. Against its productive capacity of 132,300 tonnes for PSF, production was close to it, at 98.5 per cent in 1999-00 and 112 per cent in 2000-01. In tandem with production, sales, too, have been growing, which, by and large, outstripped production.
3. Market Share: Indo Rama started commercial production of PSF in 1995-96. During the short period of about six years it has attained capacity utilization of 112 per cent. Which is remarkable. As its production expanded, its market share too increased. The market share was 18 per cent in 1998-99, went up to 20 per cent in 1999-00 and continued at that level in 2000-01.
4. Productivity: The Company has achieved continued improvement in productivity. Through planned measures to improve productivity and control cost the Company attained a 116 per cent increase in operating profits to Rs.266.90 crores in 1999-00 from Rs.123.20 crores in 1998-99. The operating profit during the year 2000-01 was Rs.297.70 crores. According to the Annual Report 2000-01 of the Company, its sales per share capital have shown significant increase.
5. Profit: The Company, since commencement of its operation, has been doing well. The company has made profit-Rs.10.7 crores in 1992-93, Rs.21.4 crores in 1993-94, Rs.13.8 crores in 1994-95, Rs.1.1 crores in 1995-96 and Rs.1.8 crores in 1996-97. In subsequent years the Company incurred loss until 1999-00. As will be observed the profit margin of the Company dropped steeply in 1995-96 when it had not yet commenced production of PSF. Consequently, the loss that the Company suffered from in the subsequent years cannot be ascribed to the production and sale of PSF. As the Company, in due course, settled down in the production of PSF and the consumers became aware of the product quality and its service, the production, capacity utilization, and sales of the Company expanded. The period following that was a period of recovery. In1999-00 Indo Rama made a profit of Rs.152 crores. However, due to the loss of Rs.159.6 crores accumulated over the years the Company ended 1999-00 with a net of Rs.7.6 crores. In the following year the Company again made a profit of Rs.26.3 crores in 2000-01 but after adjustment against the carried forward loss of Rs.7.6 crores the net profit was reduced to Rs.18.7 crores during that year.
6. The set back that the Company suffered during the years 1997-98 and 1998-99 in its margins is not due to its entry into the field of PSF or on account of it. The Management of the Company assign the causes to " The large capital investment financed with term borrowings, a major part of which is in foreign currency, has resulted in a heavy outgo on debt servicing. This heavy interest burden, the Company could only meet partially and it was also unable to cover its depreciation which resulted in the year (1998-99) ending with a substantial net loss."
7. Cash Flow Position: The cash flow position of the Company is strong as will be observed from the following extract taken form the Company’s Annual Report 2000-20001. The Company has generated strong cash flow during the year 2000-20001 due to improved performance resulting into enhancement of company’s debt servicing capability substantially. Despite a high interest burden, the company has been able to pay off all its principal / interest over dues in line with re-schedulements already accepted and acted upon by all domestic and foreign lenders. The Report further states that with the prudent cash flow management the Company expects to reduce its dependence on fund-based working capital limits from banks, leading to lower borrowing costs. The Company has also initiated steps to manage its forex exposure to take maximum advantage of hedging opportunities and forex desk is in the process of being upgraded with better systems and skills."
8. Ability to raise Capital / Investments: The Company has successfully rescheduled its payments against borrowings form domestic and foreign lenders. This proves that the lenders to the Company has confidence in its operations and performance and are prepared to provide capital for future plans.
9. Material Injury – Inventory Position: The inventory position among the producers of PSF in India, indicates no undue load of stock. The level of inventory has been declining over the years from 1995-96 onwards, barring the year 1998-99 when the level increased on account of internal developments as explained elsewhere in this submission.
10. Thus, TUNTEX (Thailand) PLC believes that Indian producers of PSF have not suffered injury on account of imports of PSF. In fact, the above analysis of the state of the Indian PSF Industry and performance of individual producers point out that the Indian PSF industry suffers from no disabilities from imports and the complaint made by ASFI about injury to the Indian Industry is baseless. TUNTEX (Thailand) PLC humbly states that a healthy state of the Indian PSF industry over the last few years does not justify initiation of this investigation.

1. The rules are silent about the nature, quantum and type of evidence that is required to support an application seeking anti-dumping action. Article 5.2 of the AD Agreement provides that the application shall contain such information as is reasonably available to the applicant. In view of the above, it is clear that an applicant should furnish such information as is reasonably available to him but simple assertions unsubstantiated by relevant evidence cannot be considered sufficient. In the instant case, the application submitted by the domestic industry does not satisfy the above principle on the following counts:

1. Import statistics are not reasonably uptodate: The application gives import statistics upto 30^th September 2000 which is 9 months before the date of initiation. It is true that collection of import statistics takes some time yet, there is no warrant to rely on data that is three quarters behind. The petitioners have collected data from the Customs Daily Lists of Imports from just 5 ports upto September 2000. The data for the remaining period was very much available for the petitioners and they could have been furnished it without much difficulty. In any case, the applicants can not claim that the data for the remaining period was not reasonably available to them. It is clear that the applicants have failed to furnish import statistics, which was reasonably available to them.
2. No evidence regarding dumping: The application clearly states that they have not been able to get any evidence, which can be regarded as accurate and adequate either with regard to the prices of the subject goods in the subject countries or price list of the exporter either for sale in that country or for exports to other countries. The applicants have projected Normal value based on constructed cost methodology. In arriving at the constructed Normal value, they do not seem to have provided supporting evidence for any of the items of cost considered in the calculations. The constructed normal value is a simple assertion unsubstantiated by relevant evidence.
3. No evidence regarding certain injury parameters: The non-confidential version of the application does not provide any information, much less evidence, in respect of ‘changes in the market share held by Indian producers’ though it is the first item in Part IV of the application format prescribed by the authority. It is now well-settled law that each of the fifteen factors listed in the mandatory list of factors in Article 3.4 must be evaluated by the investigating authorities for assessing injury. There is no evidence in the application with regard to (a) productivity; (b) cash flow; (c) growth; and (d) ability to raise capital or investments.
4. From the above, it is clear that the applicants have failed to provide evidence regarding increase in imports as is reasonably available to them, have not provided any evidence regarding dumping and no information whatsoever with regard to certain parameters of injury.

1. The application alleges ‘threat of material injury’ also. The evidence required for threat of material injury is to be inferred from para (vii) of Annexure II to the Anti-Dumping Rules, 1995. The rules specifically provide that a determination of a threat of material injury shall be based on facts and not merely on allegation, conjecture or remote possibility. The application simply states that the alleged surplus production capacity in the subject countries, by itself, is a threat of material injury to the domestic industry. This is a mere allegation and conjecture and not at all substantiated by relevant facts.
2. Rule 5(3)(b) relating to adequacy and accuracy of evidence that is sufficient to initiate an investigation has been violated. As can be seen from the arrangement of the Rules, under Rule 5(2) the Authority is required to examine whether the application contains evidence regarding existence of dumping, injury and causal link, as well as the information reasonably available to the applicant on the relevant issues. Under Rule 5(3), the authority is required to examine the accuracy and adequacy of the evidence provided in the application, but in this instance, to determine whether there is sufficient evidence to justify the initiation of an investigation. This means that Rule 5(3) imposes on the Designated Authority an obligation that goes beyond determining whether or not an application meets the requirements of Rule 5(2). Rule 5(3) requires that, once it has been determined that the requirements of Rule 5(2) have been met, the authority must also examine whether there is sufficient evidence to justify the initiation of an investigation.
3. Although neither the Anti-Dumping Rules nor the WTO Anti-Dumping agreement define what is meant by ‘sufficient evidence’ to justify the initiation of an investigation, certain WTO Dispute Settlement Body Panel reports are indicative in this regard.
4. Insufficiency of evidence regarding dumping: The application takes the import data for the 9 months period January-September 2000 and arrives at an annualised projection for the 12-month period i.e. January – December 2000. The said projection for the calendar year 2000 is compared with the import data for the Financial Year 1999-2000 to show an increase of 17.3%. It is strange that the data for the first quarter of 2000 (i.e., January-March 2000) is common in both the periods of comparison. Based on such a comparison, the applicant claims that the dumped imports are increasing. Obviously, what is contained in the application can not be treated as ‘adequate’ evidence.
5. The projection is also not accurate as the simple linear projection methodology (9 months data projected for a twelve month period on a pro rata basis) can not be accepted unless the applicant provides evidence that the past trends in imports, indeed, follow a linear pattern throughout the year. In case the imports are bunched in the first three-quarters, then there may not be any imports at all in the fourth quarter. In such a scenario, the linear projection arbitrarily increases the total imports by as much as 33.33%.
6. The total imports of all grades of PSF are coming down year after year. From 15188 MT in the year 1998-99, it has come down to 8350 MT in the year 2000-2001. The fall was 22% in the year 1999-2000 and a further 29% in the year 2000-2001. When the total imports of all grades of PSF was 8350 MT for the year 2000-2001, the imports of the subject grades could not have been 10825 MT as projected in the application. Therefore, the projections are not accurate.
7. It is clear that the evidence with regard to increased imports was neither adequate nor accurate. The data fails the sufficiency test formulated in the United States Softwood Lumber case i.e. ‘sufficient evidence’ clearly had to mean more than mere allegation or conjecture, and could not be taken to mean just ‘any evidence’. What is contained in the application is nothing but mere allegation or conjecture. Based on an unbiased and objective examination of the import data provided in the application, the Designated Authority could not have determined that there is sufficient evidence to initiate the investigation. No doubt, the authority has erred in evaluating the evidence provided by the applicants.
8. With regard to other factors of dumping, the evidence appears to be non-existent. Not even an iota of evidence to support the figures taken in the calculation has been provided by applicants. Even the basis of arriving at those numbers and the assumptions underlying those numbers has not been provided. The non-confidential version does not even state that the basis and assumptions underlying the constructed Normal value have been provided in the confidential version. Under such circumstances, it is not clear as to the basis on which the Authority determined that there is sufficient evidence of dumping to initiate the investigation.
9. It may be argued that the authority could get this data at a later date during the course of the investigation. The DSB Panel in the case of Guatemala – Grey Portland Cement from Mexico examined these issues. It held as below:

"8.35…. An anti-dumping investigation is a process where certainty on the existence of all the elements necessary in order to adopt a measure is reached gradually as the investigation moves forward. However, the evidence must be such that an unbiased and objective investigating authority could determine that there was sufficient evidence of dumping within the meaning of Article 2 to justify initiation of an investigation."

10. In the absence of anything to support their claim, the authority could not have examined them. Therefore, the initiation is not based on sufficient evidence and hence bad in law.
11. Insufficiency of evidence regarding Injury: With regard to injury, the capacity utilisation has not been affected. In fact the domestic industry has achieved 100.86% of the capacity during the POI selected by the applicants. It was 94.68% in 1998-99. It increased to 98.7% in 1999-2000 and during the POI, it is 100.86%. The sales volume is not stated to have come down. The applicants themselves state that the sale prices have gone up. The applicants have not stated that they are piling up inventory.
12. The Applicants have failed to provide data relating to fall in the market share of the domestic industry. The imports of all grades of PSF constitute roughly about 1% of the total domestic production. The actual figures relating to the subject grades alone should be available with the authority in the confidential version of the application. The trend would be more or less similar. It is improbable that such insignificant imports [which constitute just about 1% of the total domestic production] have caused not only material injury but also pose a threat of material injury to the domestic industry. It is not known how the authority came to the conclusion that such low level of imports could have caused material injury to the domestic industry. Either there is no evidence or the evaluation of evidence is not correct. In either case, the initiation is bad and hence to be withdrawn.
13. The only statement in the application that suggests injury is that they are earning abnormally ‘low profits’. Nothing has been given in the application as to what the applicant consider to be ‘abnormally low’. However, under the heading ‘profitability’, the application states that they suffered losses in the year 1998-99 and 1999-2000 but they made profits during the POI. For determining injury, the status as it exists during the POI is relevant. The past losses are of no consequence.
14. Interestingly, the application asserts that M/s. JK Synthetics and M/s. Swadeshi Polytex Ltd have been injured due to dumped imports. They are not the applicants in the petition before the authority. The application does not contain any evidence regarding injury to those companies. The applicant companies do not seem to have been injured. Under the above circumstances, it is obvious that with regard to injury, sufficient evidence is not available before the authority to justify initiation of investigation. Therefore, the initiation is bad.
15. Insufficiency of evidence with regard to threat of material injury: With regard to threat of material injury, the relevant provisions as contained in Paragraph (vii) of Annexure II to the Anti-dumping Rules that the application should contain details about all the four parameters stated in para 2.27 above, at least to some extent. The application does not provide any information or evidence with regard to items a, c and d mentioned above. With regard to item b, the application states that there is huge surplus capacity in the four countries. But it fails to provide any evidence regarding the availability of other export markets to absorb additional production/exports. Thus, even in respect of item b, the evidence is not adequate. Therefore, it is clear that the application contains no evidence regarding the threat of material injury. The claim is based not on facts, but on mere allegation and conjecture. Statements and assertions unsubstantiated by any evidence do not constitute sufficient evidence of threat of injury to justify the initiation of an investigation.
16. Insufficiency of evidence regarding Causal Link: The evidence required to support causal link, the third element in an anti-dumping investigation, is conspicuously absent in the application. A determination of causal link is made based on the examination of (a) volume effect; (b) price effect and (c) impact of the dumped imports on the domestic producers of such products. In the instant case, the imports have not increased. But the indigenous production has increased. Presumably the indigenous sales have also increased. Therefore, volume effect is ‘nil’. Admittedly, the sale prices of the domestic industry have gone up and therefore, there is no price effect. As stated earlier, the industry has made profits during the POI as stated by the applicants themselves. The past losses are of no consequence. There is, thus, no evidence of causal link.
17. The Designated Authority did not conduct a proper examination of the adequacy and accuracy of the evidence before it to satisfy itself as to the sufficiency of the evidence to justify the investigation. The non-confidential version of the application refers to annex 9 regarding import statistics in Page three and annex 11 regarding increase in sale prices of the domestic industry in Page 16. However, they are not attached to the application.

1. The application including the revised application filed seeking the Anti-Dumping Notification in question was incomplete, vague and ambiguous. The said application was and is not in accordance with the mandatory rules. It did not disclose relevant and material facts and these were intentionally suppressed.
2. In particular information in terms of the part VI as per the prescribed application proforma was completely withheld. In the absence of relevant information under Part VI as also otherwise, it is and was not possible for the Authority to take even a prima facie view on the application and particularly with respect to any alleged dumping activities or injury.
3. The commencement of investigation proceedings itself materially affects the rights of this objectors and other overseas exporters who are subjected to this investigation without due cause having been shown. It is, therefore, mandatory that the Authority duly applies its mind to an application made to it before coming to a prima facie decision to initiate an investigation and issuing an Initiation Notification.
4. As material documents and information have been suppressed and were not available on record, the Authority could not have and ought not to have come to the conclusion that there was prima facie any indication collectively and/or cumulatively that the domestic industry has suffered material injury on account of dumping. The said prima facie conclusion of the authority is without any basis or foundation as on 25^th June 2001, there was no material or information available on record for the Authority to have come to the conclusion. The material information and documents in terms of Part VI was not even submitted. The material submitted under other parts was also incomplete, vague and not sufficient to form a reasoned opinion.
5. The Authority acted mechanically and without application of mind. The complainants/applicants have sought to mislead the Authority into issuing the Notification in question for collateral purposes of gaining access to confidential information relating to the objectors and other overseas exporters and to secure the imposition of a duty unfairly and unjustifiable.
6. Relevant information and material and in particular in terms of Part VI if subsequently filed have not been communicated to the objectors. The information and material particulars have also not been filed by all concerned constituents of the domestic industry. The submission of such information and material If any and in terms of Part VI subsequent to the issue and publication of the Initiation Notification dated 25^th June, 2001 cannot validate the said Notice. The said Notice is therefore vague in law and liable to be recalled and cancelled as it has been issued arbitrarily and is prejudicial to the rights of the objectors and subjects them to an unfair and uncalled for investigation. In any event, the material on record does not disclose and does not support the finding that there is or was sufficient evidence regarding: Dumping; Injury and Causal Link between the alleged dumped imports and the alleged injury.
7. According to Rule 5, the Designated Authority shall not initiate an investigation pursuant to an application made under sub-rule (1) unless it determines on the basis of an examination that the application has been made by or on behalf of the domestic industry and it examines the accuracy and adequacy of the evidence provided in the application and satisfies itself that there is sufficient evidence regarding dumping, injury and causal link between such dumped imports and the alleged injury. Such satisfaction has to be determined objectively and is a condition precedent to deciding to initiate an investigation. Before so deciding it is incumbent upon the Designated Authority to assess the contents of the Application (unless the proceedings are suo motu which is not the case here) and order an investigation if, and only if, the material in such application contains the requisite material to establish dumping, injury and causal link between the two.
8. The application and the impugned notification are contrary to the rules and the WTO anti-dumping agreement. The application is not filed by the domestic industry. The petitioners submit that the applicants are not domestic industry as they are themselves importers of PSF which is evident from their averment in the application more particularly as answer to question no. 6(a) in Part II of the application.
9. The application does not annex copies of requisite documents to substantiate facts and figures. The application contains allegations and mere assertions, which are not substantiated by any relevant evidence or data.
10. It is submitted that in terms of the Customs Tariff Act, 1975 and the rules, evidence of dumping has to be provided with reference to the normal value and export price of the article alleged to be dumped. The applicants have furnished constructed normal value in their application, which is based on estimates of costs of production and fair margin. The applicants have requested the Designated Authority to consider evidence of dumping in relation to the said constructed normal value as according to the applicants they have not been able to get any accurate and adequate evidence with regard to normal value. The reliance on constructed normal value under such circumstances is contrary to the rules. The Designated Authority grossly erred in accepting the same as sufficient prima facie evidence and wrongly proceeded to initiate the investigation.
11. The applicants have not submitted any evidence of material injury being caused to the domestic PSF industry as a result of the alleged dumped imports of PSF from the subject countries. The total imports of PSF from subject countries in comparison to the total domestic production of PSF in India is a miniscule 2% and cannot conceivably cause any material injury to the domestic industry or their domestic production. The domestic production of PSF in India and the capacity utilisation has in fact been growing independent of the imports of PSF into India. The data furnished shows that while the imports have been declining the domestic production of PSF has been growing. The data furnished by the applicants in Part IVA of their application show that they control almost 88% of the PSF market share which is not declining. The applicants’ data therefore do not show any adverse impact on the production or market share of the domestic industry as a result of the meagre and declining imports of PSF from the subject countries.
12. The applicants have alleged that the share of imports from subject countries substantially increased compared to imports from other sources. Although the said comparison is wholly inappropriate and largely irrelevant, the data produced in the application shows a declining trend in the imports from subject countries compared to overall imports. The applicants do not demonstrate whether the said increase in imports has resulted in a higher share of the Indian domestic production for PSF being captured by the imports nor have the applicants assessed the alleged increase in imports in relation to the domestic consumption or production of like article. The imports of PSF from subject countries account for a mere 2% of the total domestic production of PSF in India. A significant portion of the said imports is by EOUs / EPZs and against advance licences. Such imports do not attract antidumping duties vide Section 9A(2A) of the Customs Tariff Act, 1975 and vide Customs notification no. 41/97-Cus dated 30.4.1997 and 75/99-Cus dated 11.6.1999 respectively.
13. The effective customs duty on imports of PSF is 26% comprised of a basic customs duty of 20%, a special additional duty of 4% and a countervailing duty of 16%. The domestic PSF industry does not require any further protection from the meagre imports of PSF in view of the high level of protection already available against such imports.
14. During 1996-97, the applicants increased their installed capacity steeply. Despite this, the applicants recorded a capacity utilisation of 104% in 1998-99, 121% in 1999-00 and 123% in 2000-01. As a result, the domestic production volumes of PSF increased from 1,99,012 MT in 1996-97 to 3,80,367 MT in 1998-99, 4,43,429 MT in 1999-00 and 4,50,849 MT in 2000-01. The sales volumes too registered handsome growth. The sales volume in case of RIL for the year 1999-00 recorded a 27% growth at 3,43,009 MT over 1998-99. For the subsequent period RIL has not disclosed sale volume data in its annual report. The sales volume in case of IRSL for the year 2000-01 grew 7% over 1999-00 and 24% in 1999-00 over 1998-99.
15. Admittedly, RIL is the biggest producer of PSF in India, enjoying a 55% share of the domestic production. According to the RIL annual reports it was the 5th largest producer of PSF in the world F.Y. 1999-2000 and had become the 2nd largest producer of PSF in the F.Y. 2000-01. Ex facie, RIL has suffered no injury whatever and if the predominant Indian producer suffered no injury it cannot possibly be contended that domestic industry as a whole suffered any injury.
16. In the application before the Authority, it has been admitted that there has been an increase in cost of raw material in the manufacture of PSF. The primary raw materials for production of PSF are PTA, DMT and MEG. PTA and DMT are alternative raw materials and substitute each other. RIL is country’s largest producer of PTA, MEG and PX and hence does not suffer from any increase in cost of main raw material. As regards other PSF manufacturers they have to depend largely on RIL for their PTA requirement. The meagre imports of PSF have had no impact on the increase in cost of raw material for manufacture of PSF.
17. While the applicants have alleged that dumping from subject countries has resulted in the domestic industry suffering losses or in making abnormally low profits, the annual reports of the applicants show they are profitable companies. RIL in its annual report of 1999-00 has stated that the Indian polyester industry is completely fragmented with large majority of producers lacking economies of scale and integration. It is stated that RIL is the only fully integrated producer with captive supplies of all key raw materials namely Paraxylene (PX), PTA and EG. It is also stated that they are presently the only profitable producers in the polyester business in India as structural and other weaknesses have led to chronic losses for almost all other producers. RIL in it annual report for 2000-01 has stated that the demand growth for PSF during the year was flat due to de-stocking of inventories, paralysis of business activities for 2 to 3 weeks following Gujarat earthquake, strike observed by the traders, weavers and texturisers as a result of excise duty structure and the general slow down in economy. RIL however expects a continued potential for strong demand growth in the future. It is stated by IRSL in its annual report for the year 2000-01 that over the next 4 years demand for PSF and other polyester products would grow at a CAGR of 7%. With no new capacity additions envisaged in the near future, both RIL and IRSL expect domestic demand to outstrip supply and the existing per capita average consumption of polyester in India of around 1.3 kg to more than double over the next decade. According to the applicants there will be a shortage of polyester products in the domestic market with the result the margins of polyester producers will improve further. The report of CRIS-Infac projects an increase in margins of PSF producers due to increase in domestic prices of PSF which is expected to be higher than the increase in raw material prices. The applicants admit in the application that demand for subject goods is showing a healthy growth and decline in demand is not a factor causing injury to the domestic industry. The petitioners therefore submit that the applicants have not submitted even a shred of evidence in support of their allegation of a causal link between alleged dumped imports of PSF and alleged injury being caused to the domestic industry. In addition the averments in their annual reports and the reports of CRIS-Infac suggest that there is not even a threat of injury to the domestic industry. It is therefore submitted that the Authority ought not to have initiated investigation in the absence of any evidence in the application regarding causal link or threat of material injury to the domestic industry.
18. The applicants have not submitted prior to the initiation of investigation Part VI of the application which contains crucial costing information. It is contended that the guidelines issued by the Designated Authority in this respect cannot have the effect of diluting the mandatory requirements of Rule 5 which are to be fulfilled prior to the initiation of investigation. As such an internal guideline of the Designated Authority contrary to the rules has no force of law. The Designated Authority grossly erred in initiating the investigation in the absence of crucial information required in Part VI of the application of the application proforma. It is indeed surprising that the Authority has entered definite findings in the impugned notification which can only be reached based on Part VI information which admittedly was not filed by the domestic industry prior to the initiation of investigation.
19. The non-confidential version of Part VI which has been submitted by the applicants only after the initiation of investigation has not been furnished to them. The Designated Authority was requested to furnish the non-confidential version of Part VI if submitted by the applicants and other constituents of the domestic industry after initiation of investigation to enable them to present their objections on the same.
20. The applicants have not disclosed or attached with the application source of information and copies of requisite documents to substantiate allegations made in the application. The applicants have produced only 7 annexures to their application while referring to Annexures IX and XI which are not part of the application at all. Part IV-A of the application which pertains to evidence of injury to the domestic industry, is not accompanied by balance sheets for the years 1998-99, 1999-2000 and January to September 2000 for all the companies comprising the domestic industry. The application does not contain supporting data/details to substantiate statements made in Part IV-B. In arriving at an estimated export price, no evidence has been furnished in respect of cost of export except to say that such costs are based on experience and general trade practice.
21. The certificate required to be signed by Chief Executive of the applicants or their director in conformity with format-F of the proforma is not attached to the application. The petitioners submit that in the absence of a fully and properly documented petition which is complete in all respects, the Designated Authority ought not to have initiated the investigation and should have rejected an incomplete and inadequate application.
22. There are several other unsubstantiated allegations made by the applicants, such as –

1. The demand for PSF has grown in the country at a healthy rate. However, the enhanced consumption has largely been appropriated by imports from subject countries.
2. Dumping by the subject countries has had a significant impact on the net sales realisation by the domestic industry for the subject goods. To hold on to its market share, the petitioners’ had to compete with the low priced offers/imports of subject goods from the subject 4 countries. Due to the large scale dumping by the subject countries, the domestic industry has suffered losses on their sales despite high level of capacity utilisation. The landed value of the dumped imports also indicates that there is serious price under-cutting as well as price suppression taking place. This has adversely affected not only the profitability of the domestic industry but also their cash flows from PSF business.
3. The low priced offers/imports over the past few years have adversely affected the profitability of the domestic industry. The resultant poor cash flow, low capacity utilisation led to reference to BIFR and eventual closure/stoppage of business of two producers (J.K. Synthetics and Swadeshi Polytex Limited).
4. Continued price depression due to dumped imports of subject goods at low prices has been causing material injury to the domestic industry.
5. The huge over capacity is like a hanging sword over the applicant/petitioner industry. It has the capability not only to intimidate/affect the Indian industry materially but also to obliterate Indian Industry in total.
6. The Indian industry has thus not only suffered material injury at the hands of the subject countries, but dumping also continues to be a threat of material injury to the Indian industry.
7. Only the imports from subject countries are being made at dumped prices causing material injury to the petitioners.
8. The sharp increase of dumped imports at injurious price of subject goods has prevented the industry from realising a reasonable remunerative selling price in the domestic market.

There has been an earlier round of investigation where initiation notification was issued by the Designated Authority vide notification bearing no. 29/1/1998-DGAD dated 21/25.01.1999 concerning imports of subject goods from Indonesia, Korea RP, Thailand and Taiwan for the period January to December 1998. The Designated Authority submitted preliminary findings on 27.09.1999 recommending provisional duties against exporters from Korea RP and Thailand except Teijin Polyester (Thailand) Limited. The Central Government in exercise of its powers under the rules did not impose anti-dumping duty against any exporter or country. The Designated Authority later submitted final findings on 21.01.2000 recommending imposition of anti-dumping duty on PSF imported from Korea RP and Thailand except Teijin Polyester (Thailand) Ltd. and issued a corrigendum dated 23.02.2000 with respect to the final findings. Despite final findings on the subject, the Central Government did not pass order of determination regarding existence, degree and effect of dumping nor did it levy anti-dumping duty with respect to any country or exporter. The period for levy of such duty is three months from the date of publication of the final findings which time period has already expired. There has been no significant increase in imports of PSF and the financial health of the applicants has improved significantly. There is therefore, no justification in starting a fresh round of investigation on identical facts and circumstances, which do not establish dumping, or injury to domestic industry as a result of alleged dumped goods.

1. A similar exercise in 1999 was dropped, as the Government did not find any justification. In the last 2 years since 1999, the economic situation and performance of India Domestic PSF Manufacturers has improved significantly as evidenced by their published Annual Reports.
2. The imports of PSF constitute only 2% compared to 98% manufactured by domestic producers of PSF. This ratio speaks itself that there cannot be any injury to domestic producers of PSF.
3. There are several missing documents, annexures and evidences in support of certain averments, apart from the proforma prescribed by the Designated Authority is not completed in full by the applicants.
4. The Authority positively responded to the fact of connection of Indo Rama to their Indonesian associates that the Authority has not accepted so far to their contention in this regard. However the conspicuous omission of Indonesia in this context was specifically brought to the Authority’s attention.

e. RIL being the largest manufacturer of PTA, MEG and PX (all key raw materials for production of PSF, and because of anti-dumping duty thereby blocking import of PTA, the PSF industry has no other option of alternate source, except to buy from RIL. The price rise of PTA accounts 45% in the last 18 months. Any more on anti-dumping duty on PSF will give virtual monopoly to the applicants.

4.1 The foregoing submissions made by the petitioner, exporters, importers and other interested parties, to the extent these are relevant as per Rules and to the extent these have a bearing upon the case, have been examined and considered and have been dealt with at appropriate places in these findings.

4,2 It would be pertinent to mention here that the issues raised by some of the exporters, importers and other interested parties before the Hon’ble High Court of Karnataka, were adequately addressed by the Authority vide its order dated 15^th October 2001, which was necessitated as per the directions of the Hon’ble High Court of Karnataka.

5.1 The product under consideration in the present investigation is Certain Polyester Staple Fibre, generally known as "PSF" in commercial market parlance conforming to the following description:

b) TECHNICAL SPECIFICATIONS / QUALITY:

5.2 Technical specifications of the subject goods are defined in terms of their deniers, lustres like semi dull, bright, semi bright, full dull etc., colour, cross section and cut length or staple length. There are no standards, national or international, to the best of the information of the petitioners.

5.3 All man made staple fibres have been classified in Chapter 55 of the Customs Tariff Act. PSF is also classified under Chapter 55 of the Customs Tariff Act.

Complete description of Chapter 55 in so far as it relates to PSF as per Customs Tariff Act is as follows:

Source: ITC (HS) Classification of Exports and Import Rules

It may be mentioned that the product under consideration constitutes only a part of the HS code 5503.20 at the 6-digit level.

5.4 The classification is, however, indicative only and is in no way binding on the scope of the present investigation.

6.1 The subject goods are used to spin yarn of 100% PSF or in blends with natural, artificial and/or synthetic staple fibres for manufacture of Apparel / Household Textiles, 100% Polyester Sewing Thread, other Industrial Textiles and for manufacture of waddings.

6.2 No argument has been raised disputing that the Like Article produced by the domestic industry has characteristics closely resembling the imported subject goods and is substitutable both commercially and technically. Thus, the subject goods produced by the domestic industry have been treated as like article to the product exported from the subject countries, within the meaning of Rule 2(d).

7.1 The petitioners in their petition had suggested the ‘period of investigation’ as ‘ March 2000 to November 2000 ‘. It was explained that the November data is the most recent data available on the subject while March data has been included in the POI as the custom duties on PSF were reduced from 35% to 20% w.e.f. 1^st March 2000. Since the duties become effective immediately after the presentation of the Budget, the petitioners consider that the real effect of injury would be captured if the POI starts from 1^st March 2000. It was added that the importers as well as the exporters from the subject countries were fully aware of the reduction of duties as the same were brought down due to the Indo-US and Indo-EU MOU.

7.2 The authority considered the above views and instead suggested that the POI be revised emphasizing that the POI should be on quarter wise basis as that would help in making appropriate analysis. While considering the proposed POI, due regard was given to the various draft recommendations of the WTO’s Committee on Anti-dumping practices. Accordingly, the petitioner submitted a revised petition taking 1^st January 2000 to 30^th September 2000 as the ‘Period of investigation’.

8.1 The Association of Synthetic Fibre Industry (ASFI) representing the Indian domestic PSF industry has filed the petition. The participating companies viz. M/s Reliance Industries Ltd. and M/s Indo Rama Synthetics (India) Limited account for more than 71% of the domestic production of the subject goods during the Period of investigation. Whereas the supporting companies, namely M/s India Polyfibres Ltd, M/s Orissa Polyfibres Limited and M/s Terene Fibres India (P) Limited account for over 12% of the domestic production during the Period of investigation. Thus, the petitioners along with supporting companies account for over 83 % of the total Indian Production of the subject goods. Hence, the Petitioners have the standing to file the petition as per the Rules.

I. DUMPING, NORMAL VALUE AND EXPORT PRICE

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

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

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 -

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

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 transshipped 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.

9.2 The Authority sent questionnaires to the Associations of manufacturers in the respective country of export from the subject countries in terms of the section cited above. Some of the exporters from Korea R P, Malaysia, Taiwan and Thailand responded to the questionnaire.

9.3 The Petitioners in their petition have mentioned that they have tried to get information on prices of the subject goods in the domestic market of the subject countries and that they also made efforts to get price lists of the exporters or price evidence for their exports to other countries. However, they were not able to get any documentary evidence, with regard to the prices of the subject goods in the subject countries or price list of the exporters either for sale in that country or for exports to other countries. It has been submitted that constructed Normal Value in the subject countries is a good indicator of the Normal Value in the subject countries for the subject goods, particularly as the prices are determined on the basis of international prices of raw materials, and in view of the fact that there are no significant differences in the levels of technology or operations. They have, therefore, requested the Authority to accept Normal Value of the subject goods in the subject countries based on Constructed Values on the following basis.

1. Raw Material Cost: As PTA/DMT and MEG are the two major raw materials that go in for production of subject goods, the consumption norms for production of PSF as given in Pet Chain Strategic Analysis, 1996-2006, Dewitt & Co. Inc have been adopted to eliminate distortion due to inefficient producers. The prices for these items have been taken from the monthly report published by PCI (Xylene and Polyesters) Ltd., whose figures are internationally accepted. The average raw material prices during the POI i.e. January to September 2000, have been taken and relevant evidence produced.
2. Conversion Cost: Conversion Cost has been taken from the publication Pet-Chain Strategic Analysis, 1996-2006, Dewitt & Co. Incorporated; and relevant evidence produced
3. Other Fixed Costs: The basis of working as regards the Other Fixed Costs was provided to the satisfaction of the Authority.

9.4 The statistics published by the Directorate General of Commercial Intelligence and Statistics (DGCI&S) of the Ministry of Commerce, Calcutta, give combined details of all types of PSF imports into India from various countries in terms of volumes and value. However, the product under consideration relates only to some variants of the broader group of PSF, which are claimed to be dumped and causing injury to the domestic industry. As stated earlier, this investigation seeks to cover only "subject goods" for which no dedicated heading exists nor is the data compiled as such by any agency (including DGCIS).

In view of the fact that DGCI&S data is not available for the subject goods, the data collected and collated by the petitioners from Customs Daily Lists of Imports and that furnished by the exporters with respect to Export Price is being relied upon.

9.5 The petitioners have claimed adjustments on account of Ocean Freight, Inland freight, Load port expenses, Commission and Marine Insurance to arrive at the ex-factory prices. However, the Authority has accepted the adjustments on the basis of evidence/documents produced to that effect. Besides, as regards the Exporters who have cooperated, the adjustments claimed by them have been accepted provisionally subject to verification.

9.6 As regards the Normal value and the export price of the subject goods from Korea R P, neither the Korea R P producers nor the exporters of Korea R P origin material, to India except M/s Huvis Corporation furnished any information in response to the initiation notice.

9.7 M/s Huvis Corporation stated that they haven’t been exporting the product under consideration to India since it was established on 1^st November 2000.

9.8 Therefore, the Authority notes that by not providing the desired information, the exporters have not co-operated in the investigations and have prevented the Authority from analysing the normal value and export price.

9.9 In view of non-submission of information by producers /exporters from Korea R P, the Authority has been constrained to rely upon ‘facts available’ with regard to the normal value and export price.

9.10 Under the circumstances, Normal value under the rules is determined on the basis of ‘facts available’. Therefore, as per the information provided by the petitioner on the basis of the estimated cost of production of the subject goods has been taken as the basis for working out the Normal value of the product which works out as US $ *** per Kg in case of Korea R P

9.11 The weighted average c. i. f. price per kg. of exports of the subject goods effected during the period of investigation by all the exporters of Korea R P works out as US $ ***. The weighted average ex-factory export price has been determined after taking ***% as inland freight, ***% as ocean freight, ***% as commission amount, ***% as Marine insurance, and ***% as Load port expenses. After adjustments on these accounts for US $ *** per kg. against the total quantity of exports of 1,071,000 kg; the weighted average ex-factory export price works out to US $ *** per kg.

The response was received only from M/s Penfibre SDN. BHD.

9.12 M/s Penfibre SDN. BHD. in their response, inter-alia, stated that they have categorized the product involved in this investigation as a single grade namely High-Tenacity Polyester Staple Fibre and as far as they are concerned there are no direct sales to any customer in India. They sell the articles to their agent on an arm’s length basis, who in turn sells the articles on an arm’s length basis to customers in India. It was also stated that the majority of sales to the Indian market of the product involved during the relevant period were on F.O.B. term with the remainder on C&F term. It was further stated that exports to Madura Coats India were part of a larger business conducted between Penfibre and a global group of companies to which Madura Coats was affiliated. Penfibre’s relationship with Madura Coats were related to the level of relationship which Penfibre has with the multinational group. The Authority intends to go into the details of the relationship and its possible impact on the export prices before the Final Findings. From the data furnished, it was noticed that the domestic sales were effected at a loss.

9.13 However, in order to calculate the normal value, the cost of production including selling and administration costs as provided by the exporter has been provisionally accepted subject to verification and after adding ***% towards profits, the normal value of the subject goods works out as US $ *** per Kg.

9.14 The weighted average c. & f. price per kg. of exports of the subject goods effected during the period of investigation by M/s Penfibre SDN. BHD. works out as US $ ***. The weighted average ex-factory export price has been determined after taking ***% as discounts, ***% as commission amount, ***% as inland freight, and ***% as overseas freight. After adjustments on these accounts for US $ *** per kg. against the total quantity of exports of 3,095,000 kg; the weighted average ex-factory export price works out to US $ *** per kg.

9.15 In view of non-submission of information by all other producers /exporters from Malaysia, the Authority has been constrained to rely upon ‘facts available’ with regard to the normal value and export price.

9.16 Under the circumstances, Normal value under the rules is determined on the basis of ‘facts available’. Therefore, as per the information provided by the petitioner on the basis of the estimated cost of production of the subject goods has been taken as the basis for working out the Normal value of the product which works out as US $ *** per Kg.

Export price

9.17 The weighted average c. i. f. price per kg. of exports of the subject goods effected during the period of investigation by all other exporters of Malaysia works out as US $ ***. The weighted average ex-factory export price has been determined after taking ***% as inland freight, ***% as ocean freight, ***% as commission amount, ***% as Marine insurance, and ***% as Load port expenses. After adjustments on these accounts for US $ *** per kg.; the weighted average ex-factory export price works out to US $ *** per kg.

The response was received only from M/s Far Eastern Textile, Ltd. Taiwan.

9.18 M/s Far Eastern Textile, Ltd. Taiwan, responded to the questionnaire but did not furnish certain material information therein. The Authority notes that the response was incomplete and deficient in many respects such as evidence with respect to claims made relating to price adjustments from the Normal Value and Export price was not furnished. Besides, the exporter has not even submitted the sample copies of their invoices relating to their domestic sales or the export sales. Further, details as required under Appendix 7 of the Exporters’ questionnaire; details of each raw-material and its ratio in the final product as required vide Appendix 8,9 & 10 of the Exporters’ questionnaire as well as the basis of apportionment and the reasons for the sub-classification made in the subject goods exported, have not been indicated. It was stated that the exports to India are all made through trading companies. Some adjustments to the Normal Value and the Export price have been claimed but no evidence thereof has been produced as required under the Exporters’ questionnaire. In view of the above, the response filed was grossly deficient. The above deficiencies restrained the authority to appropriately analyse the data furnished. Thus, the Authority holds that by not responding appropriately as required under the Exporters’ questionnaire, M/s Far Eastern Textile, Ltd. has not cooperated with the Authority. The Authority has been constrained to rely upon ‘facts available’ with regard to the normal value and export price.

9.19 In view of non-submission of the information/ insufficient information filed by the producers /exporters from Taiwan, the Authority has been constrained to rely upon ‘facts available’ with regard to the normal value and export price as regards the exports from Taiwan.

9.20 Under the circumstances, Normal value under the rules is determined on the basis of ‘facts available’. Therefore, as per the information provided by the petitioner on the basis of the estimated cost of production of the subject goods has been taken as the basis for working out the Normal value of the product which works out as US $ *** per Kg.

Export price

9.21 The weighted average c. i. f. price per kg. of exports of the subject goods effected during the period of investigation by the exporters of Taiwan works out as US $ ***. The weighted average ex-factory export price has been determined after taking ***% as inland freight, ***% as ocean freight, ***% as commission amount, ***% as Marine insurance, and ***% as Load port expenses. After adjustments on these accounts for US $ *** per kg.; the weighted average ex-factory export price works out to US $ *** per kg.

9.22 The responses were received from M/s Kangwal Polyester Co., Ltd.; M/s Teijin Polyester (Thailand) Ltd.; M/s Teijin (Thailand) Ltd.; and M/s Tuntex (Thailand) Public Co. Ltd., Thailand.

9.23 M/s Kangwal Polyester Co., Ltd. informed that they did not export to India any PSF during the Period of investigation.

9.24 M/s Teijin Polyester (Thailand) Ltd., inter-alia, stated that as far as they are concerned there are no direct sales to any customer in India. They sell the articles to their agent on an arm’s length basis, who in turn sells the articles on an arm’s length basis to customers in India. The data furnished was examined and it was observed that the exporter claims to have exported only Grade Super High Tenacity to India during the Period of investigation. The data submitted has been provisionally accepted subject to verification.

9.25 Under the circumstances, Normal value under the rules is determined on the basis of the domestic sales made by M/s Teijin Polyester (Thailand) Ltd. Therefore, as per the information provided by the exporter the weighted average ex-factory Unit selling price has been taken as the basis for working out the Normal value of the subject goods which works out as US $ *** per Kg.

Export price

9.26 The weighted average c. & f. price per kg. of exports of the subject goods effected during the period of investigation by M/s Teijin Polyester (Thailand) Ltd. works out as US $ ***. The weighted average ex-factory export price has been determined after taking ***% as overseas freight, ***% as discounts/commission amount, ***% as handling expenses and *** % as taxes. After adjustments on these accounts for US $ *** per kg. against the total quantity of exports of 4,357,500 kg; the weighted average ex-factory export price works out to US $ *** per kg.

9.27 M/s Teijin (Thailand) Ltd., inter-alia, stated that as far as they are concerned there are no direct sales to any customer in India. They sell the articles to their agent on an arm’s length basis, who in turn sells the articles on an arm’s length basis to customers in India. The data furnished was examined and provisionally accepted subject to verification.

9.28 Under the circumstances, Normal value under the rules is determined on the basis of the domestic sales made by M/s Teijin (Thailand) Ltd. Therefore, as per the information provided by the exporter the weighted average ex-factory Unit selling price has been taken as the basis for working out the Normal value of the subject goods which works out as US $ *** per Kg.

Export price

9.29 The weighted average c. & f. price per kg. of exports of the subject goods effected during the period of investigation by M/s Teijin (Thailand) Ltd. works out as US $ ***. The weighted average ex-factory export price has been determined after taking ***% as overseas freight, ***% as discounts/commission amount, ***% as handling expenses and ***% as taxes. After adjustments on these accounts for US $ *** per kg. against the total quantity of exports of 1,587,076 kg; the weighted average ex-factory export price works out to US $ *** per kg.

9.30 M/s Tuntex (Thailand) Public Co. Ltd., Thailand., inter-alia, stated that during the investigation period, their exports of PSF to India have been made to the following two companies:

1. The Bombay Dyeing & Mfg. Co., Ltd.
2. Parasrampuria International, New Delhi.

It has been further stated that Bombay Dyeing has purchased goods from Tuntex (Thailand) and cleared the same under Government of India’s Duty Exemption Scheme against Advance License without payment of duty. While Parasrampuria International is an E.O.U. and is exempted from payment of customs duty on raw materials imported by them. Further, it is understood that import clearances in India under DEEC scheme or by EOU companies are permitted for raw material on duty free basis so that they (the license holder/EOU companies) are entitled to source their raw materials at international prices and remain competitive in international markets for their finished products. Such imports do not also attract anti-dumping duty, wherever it has been introduced. Pursuant to that, they believe that exports of their company are out of the purview of the investigation.

On the basis of the above, they submitted that their company, Tuntex (Thailand) Public Co., Ltd. should be excluded from this investigation.

9.31 In this regard, the Authority notes there are certain exemptions depending upon the status of the users or the end-use of the imports, however, there is no provision for exclusion of the same while determining the individual dumping margins for the exporters. Thus, the data furnished was examined and provisionally accepted subject to verification.

9.32 Under the circumstances, Normal value under the rules is determined on the basis of the domestic sales made by M/s Tuntex (Thailand) Public Co. Ltd. Therefore, as per the information provided by the exporter the weighted average ex-factory Unit selling price has been taken as the basis for working out the Normal value of the subject goods which works out as US $ *** per Kg.

Export price

9.33 The weighted average c. & f. price per kg. of exports of the subject goods effected during the period of investigation by M/s Tuntex (Thailand) Public Co. Ltd., works out as US $ ***. The weighted average ex-factory export price has been determined after taking ***% as overseas freight, ***% as Inland freight, ***% as commission amount, ***% as overseas Insurance and ***% shipping charges. After adjustments on these accounts for US $ *** per kg. against the total quantity of exports of 1,583,082 kg; the weighted average ex-factory export price works out to US $ *** per kg.

9.34 In view of non-submission of information by all other producers /exporters from Thailand, the Authority has been constrained to rely upon ‘facts available’ with regard to the normal value and export price.

9.35 Under the circumstances, Normal value under the rules is determined on the basis of ‘facts available’. Therefore, as per the information provided by the petitioner on the basis of the estimated cost of production of the subject goods has been taken as the basis for working out the Normal value of the product which works out as US $ *** per Kg.

Export price

9.36 The weighted average c. i. f. price per kg. of exports of the subject goods effected during the period of investigation by all the exporters of Thailand works out as US $ ***. The weighted average ex-factory export price has been determined after taking ***% as inland freight, ***% as ocean freight, ***% as commission amount, ***% as Marine insurance, and ***% as Load port expenses. After adjustments on these accounts for US $ *** per kg. ; the weighted average ex-factory export price works out to US $ *** per kg.

DUMPING MARGIN

9.37 The Rule relating to fair comparison provides comparison of Normal Value and Export Price as follows:

"While arriving at margin of dumping Designated Authority shall make a fair comparison between the Export Price and the Normal Value. A comparison shall be made at the same level of trade, normally at ex-works level and in respect of sales made and as nearly as 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 and sales, taxation, levels of trade, quantities, physical characteristics, and any other differences which are demonstrated to affect price comparability".

1. Korea R P

9.38 Considering the ex-factory normal value at US $ *** per kg and the ex-factory export price at US $ ***per kg after adjustments on account of ***as ocean freight, *** as marine insurance charges, *** as commission, *** as inland freight and as Load Port expenses; the dumping margin comes to US $ *** per kg (which is 70.03 % of export price).

9.39 Considering the ex-factory normal value at US $ *** per kg and the ex-factory export price at US $ ***per kg after adjustments on account of ***% as discounts, ***% as commission amount, ***% as inland freight, and ***% as overseas freight, the dumping margin comes to US $ *** per kg (which is 8.64 % of export price).

9.40 Considering the ex-factory normal value at US $ *** per kg and the ex-factory export price at US $ ***per kg after adjustments on account of ***as ocean freight, *** as marine insurance charges, *** as commission, *** as inland freight and as Load Port expenses; the dumping margin comes to US $ *** per kg (which is 41.02 % of export price).

9.41 Considering the ex-factory normal value at US $ *** per kg and the ex-factory export price at US $ ***per kg after adjustments on account of ***as ocean freight, *** as marine insurance charges, *** as commission, *** as inland freight and as Load Port expenses; the dumping margin comes to US $ *** per kg(which is 46.56 % of export price).

9.42 Considering the ex-factory normal value at US $ *** per kg and the ex-factory export price at US $ ***per kg after adjustments on account of ***as overseas freight, ***as discounts/commission, ***as taxes and ***as handling charges; the dumping margin comes to US $ *** per kg (which is 1.75 % of export price), which is below the de-minimis level.

9.43 Considering the ex-factory normal value at US $ *** per kg and the ex-factory export price at US $ ***per kg after adjustments on account of ***as overseas freight, ***as discounts/commission, ***as handling charges and ***as taxes; the dumping margin comes to US $ *** per kg (which is 13.21 % of export price).

9.44 Considering the ex-factory normal value at US $ *** per kg and the ex-factory export price at US $ ***per kg after adjustments on account of ***as overseas freight, ***as overseas insurance, ***as commission, ***as inland freight and ***as shipping charges; the dumping margin comes to US $ *** per kg (which is 5.78% of export price).

9.45 Considering the ex-factory normal value at US $ *** per kg and the ex-factory export price at US $ ***per kg after adjustments on account of ***as ocean freight, *** as marine insurance charges, *** as commission, *** as inland freight and as Load Port expenses; the dumping margin comes to US $ *** per kg (which is 49.38 % of export price).

Comparing the Normal value and Export price, the dumping margin works out as under: -

9.46 For the purpose of fair comparison between Normal Value and Export Price the Authority took into account the information furnished by the Petitioner and other information available with the Authority. The Normal Value and Export Prices determined as detailed above are at ex-factory level.

I. INJURY

10.1 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 impact of these imports on domestic producers of such products…". While examining the volume of dumped imports, the authority considers whether there has been a significant increase in the dumped imports, either in absolute terms or relative to production or consumption in India. 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 increase, which otherwise would have occurred, to a significant degree.

10.2 Annexure II (iii) under Rule 11 supra further provides that in case where imports of a product from more than one country are being simultaneously subjected to anti-dumping investigation, the Designated Authority will cumulatively assess the effect of such imports, only when it determines that the margin of dumping established in relation to the imports from each country is more than two per cent expressed as a percentage of export price and the volume of the imports from each country is three per cent of the imports of the like article or where the export of the individual countries is less than three per cent, the imports cumulatively account for more than seven per cent of the imports of the like article, and cumulative assessment of the effect of imports is appropriate in light of the conditions of competition between the imported article and the like domestic article.

10.3 Analysis of injury to the domestic industry has been done on the basis of the information available on record and the verification done by the officials of the Directorate General of Anti-dumping & Allied Duties. For the examination of the impact of imports on the domestic industry in India, the Authority has considered such further indices having a bearing on the state of the industry as sales volume, changes in the market share, output productivity and capacity utilisation, inventories, sales price, profitability, return on Investment (Capital employed), actual and potential negative effect on cash flows and ability to raise capital, evidence of lost contracts, employment etc. in accordance with Annexure II (iv) of the rules supra.

10.4 The Authority notes that the margin of dumping and quantum of imports from the subject countries are more than the limits prescribed above except in the case of M/s Teijin Polyester (Thailand) Ltd. The cumulative assessment of the effect of imports of the subject goods is appropriate in light of the conditions of competition between the imported subject goods and the conditions of competition between the imported subject goods and the like domestic article.

1. Sales Volume: As regards the sales volume of the domestic industry, it is noticed that the volume of sales (annualised) by the domestic industry declined by 1.34 % during the period of investigation over the preceding financial year i.e., 1999-2000.
2. Changes in market share held by Indian producers: The domestic industry has furnished detailed information with regard to the share of the imports and its effect on the market share of the domestic industry. Market share for the domestic industry has fallen from 97.46% (annualised) in the year 1999-2000 to 96.12% (annualised) during the period of investigation. The total market demand has increased by almost 4% during the period of investigation as compared to the year 1999-2000 but the sales volume for the domestic industry has come down by about 2%. At the same time, the total imports have gone up from 9625 MT in 1999-2000 to 14632 (annualised for the period 2000-2001) while the imports from the subject countries have increased from 9228 MT to 14202MT (annualised for the period 2000-2001) over the same period, an increase of about 54%. It has also been argued by the domestic industry that due to the dumped prices of the subject countries, their share in the total imports stands at almost 96%. It has further been argued that the complainants were threatened with a loss of market share through aggressive pricing policies followed by the exporters from the subject countries that have dumped the subject goods into Indian market. Had the complainants chosen to hold on to non-injurious price, the loss of market share would have been more severe. The complainants, therefore, had no other option but to match the prices to the extent possible so as to protect its market share. The Authority finds considerable merit in the assertions made by the domestic industry and holds for the purpose of these preliminary findings that there has been an increase in the dumped imports, in absolute terms as well as relative to production and the demand in India, indicating that material injury has been caused to the domestic industry on this count.

6. Profitability: It has been claimed by the domestic industry that dumping by the subject countries has had a significant impact on the net sales realization by the domestic industry for the subject goods. To hold on to its market share, the petitioners had to compete with low priced offers/imports of subject goods from the subject countries. Due to the large scale dumping by the subject countries, the domestic industry has suffered losses on their sales despite high level of capacity utilization. The landed value of the dumped imports also indicates that there is considerable price suppression taking place. This has adversely affected not only the profitability of the domestic industry but also their cash flows and working capital.

It has also been argued that different countries which have dumped subject goods in India during the nine months of POI were offering their products at different prices. The customers/Users, however, tried to take advantage of the lowest offers under such a situation. The domestic industry could not afford to have ignored any one of them. On a month to month basis, one exporter from each one of these subject countries was the lowest price supplier. Their relative pricing position kept on changing but the complainant domestic industry had to respond to the lowest quotes offered in the market place to protect the market share and to ensure that the customers do not go away. In support of the above contentions, the domestic industry has submitted some evidence. However, the Authority is of the view that the same cannot be considered as conclusive indication of the argument advanced.

7. Return on Investment (Capital employed): The domestic industry has submitted adequate information to substantiate its claim that Return on Capital Employed (ROCE) has been negative during the period of investigation. The return has not been sufficient even to recover the full interest costs the companies had to bear. It has been claimed that the domestic industry is entitled to a fair return on its investment but due to the price effect of the dumped imports, the domestic industry has not been able to realize a fair price. The Authority has analysed the financial information provided by the domestic industry and has also got the verification done. It has been seen that the return on capital employed has been negative for the domestic industry, which is a critical aspect of the injury to the domestic industry.
8. Actual and potential negative effect on cash flows and Ability to raise capital: It has been argued that as far as M/s Reliance Industries Ltd. is concerned, it is a multi-product Company and integrated to a large extent. It borrows working capital for the corporate body as a whole. However, in the case of M/s IndoRama Synthetics Limited, it has been claimed that the cash flow position was precarious. The company was forced to seek rescheduling of its loan repayments to avoid default to lending institutions. The Authority is of the view that the ability to raise capital and the negative cash flows could be a function of several factors and therefore, these need not be considered as valid parameters for the purpose of these preliminary findings.
9. Evidence of lost contracts: It has been argued that the domestic industry tried its best to hold on to the customers. Yet the fact that over 8000 MT of dumped imports arrived into India during the period of investigation is adequate evidence that it lost potential customers. The domestic industry expressed its inability to furnish any evidence in this regard due to the nature of the market, which is not based on tenders, but the goods are sold through agents.
10. Employment: The Authority finds merit in the argument advanced by the domestic industry that it continues to operate its plants at full capacity and, thus, the impact on employment cannot be a relevant factor.
11. Threat of Dumping from the Subject Countries: Annex II to the Anti-dumping Rules provides for the assessment of threat of injury to the domestic industry. The relevant paragraph reads as under:

The domestic industry has submitted that the data published by leading consultancy firms like Tecnon, PCI etc. clearly indicates that there is a massive surplus capacity of 14,85,000 MTs in these 4 countries. The growth of consumption in these countries is minimal compared to the huge excess capacity and huge excess production they cumulatively have. The huge surplus production capacity over consumption and huge actual production over consumption constitutes respectively 14,85,000 MTs/annum and 11,94,000 MTs/annum. This is 2.65 times and 2.13 times the annualised Indian consumption respectively during the period of investigation. Thus, it has been argued that this huge over capacity is like a hanging sword over the applicant / petitioner Indian Industry. It has the capability not only to intimidate/affect the Indian industry materially, but also to obliterate Indian industry in total. In addition to the above, the significant increase in dumped imports and price underselling clearly indicate the threat of injury to the domestic industry.

The Authority has analysed the factors, which need to be considered for assessing whether there is any threat to the domestic industry from the alleged dumped imports. The Authority notes that there is ample evidence to show that there is surplus capacity available in the subject countries, which could be a matter of concern for the financial performance of the domestic industry. At the same time, the above analysis clearly indicates that due to the dumped imports from the subject countries, there has been a significant impact on the prices of the domestic industry. As far as the increase in imports is concerned, the following analysis would reveal that the rate of increase in imports has been quite significant during the period of investigation itself, indicating that the claim of threat of injury is claimed on a reasonable basis. The Authority notes that the quantum of imports during the first quarter of the period of investigation was only 16% while it increased to almost 34% and 50% in the second and the third quarters respectively. As regards the inventories, the Authority observes that the same have declined for the reasons as stated in para d above. The above analysis clearly indicates that the domestic industry has been able to demonstrate a case of threat of injury in accordance with the requirements of the relevant provisions of the Anti-dumping Rules.

J. CONCLUSION ON INJURY

11.1 In view of the foregoing it is observed that: -

1. the quantum of imports from the subject countries has increased in absolute as well as in relative terms;
2. the market share of the Petitioner Companies has gone down;

c) the domestic industry has been forced to sell at reduced prices that have resulted in losses;

4. imports are significantly depressing the prices of the domestic industry;
5. there has been significant decline in the Sales volume of the Petitioner Company
6. the domestic industry faces a threat of material injury from the alleged dumped imports.

The Authority therefore concludes that the domestic industry has suffered material injury and threat thereof.

12.1 In establishing that the material injury to the domestic industry has been caused by the imports from the subject countries, the Authority holds that the increase in market share of imports from Korea R P, Malaysia, Taiwan and Thailand resulted in decline in the market share of the petitioner domestic industry. These imports significantly depress the prices of the domestic product forcing the domestic industry to sell at unremunerative prices. Resultantly, the domestic industry incurred losses. The material injury and the threat thereof to the domestic industry was, therefore, caused by the dumped imports from the subject countries.

12.2 On the basis of the ‘facts available’, it is observed that the imports of the subject goods from "other countries " are below the de-minimis level during the period of investigation.

12.3 Contraction of demand is not apparent and no technological development in the industry or any other such factor which could have resulted in injury to the domestic industry has been noticed.

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

13.2 It is recognised that the imposition of anti-dumping duties might affect the price levels of the products manufactured using the subject goods and consequently might have some influence on relative competitiveness of these products. However, fair competition in the Indian market will not be reduced by the anti-dumping measures, particularly if the levy of the anti-dumping duty is restricted to an amount necessary to redress the injury to the domestic industry. On the contrary, imposition of anti-dumping measures would remove the unfair advantages gained by dumping practices, would prevent the decline of the domestic industry and help maintain availability of wider choice to the consumers of the subject goods. Imposition of anti-dumping measures would not restrict imports from the subject countries in any way, and therefore, would not affect the availability of the product to the consumers.

13.3 To ascertain the extent of anti-dumping duty necessary to remove the injury to the domestic industry, the Authority relied upon reasonable selling price of the subject goods in India for the domestic industry, by considering the optimum cost of production at optimum level of capacity utilisation for the domestic industry.

13.4 Since the fair selling price has been worked out on normative basis, injury to the domestic industry on account of other factors, if any, is nullified.

15.1. It is seen, after considering the foregoing, that:

The subject goods described under Para 5 originating in or exported from Korea R P, Malaysia, Taiwan and Thailand

1. has been exported to India below Normal value, resulting in dumping;

(b) the Indian industry has suffered material injury and threat thereof;

(c) injury has been caused by imports from the subject countries.

15.2. It is considered necessary to impose anti-dumping duty, provisionally, pending final determination, on all imports of the subject goods originating in or exported from the subject countries, pending investigations.

15.3 It is decided to recommend the amount of anti-dumping duty equal to the margin of dumping or less, which if levied, would remove the injury to the domestic industry (clause (d) Rule 4 supra as amended). The landed price of imports was also compared with the fair selling price of the domestic industry, determined for the period of investigation. Accordingly, it is proposed that provisional anti-dumping duties be imposed, from the date of notification to be issued in this regard by the Central Government, on the subject goods originating in or exported from the subject countries being cleared under Chapter 55 of the Customs Tariff Act, pending final determination. The anti-dumping duty shall be the difference between the amount mentioned in Col.3 below and the landed value of imports of the subject goods in US $ per KG.

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

16.1 The following procedure would be followed subsequent to notifying the preliminary findings:

16.2 The Authority invites comments on these findings from all interested parties and the same would be considered in the final findings;

16.3 Exporters, importers, petitioner and other interested parties known to be concerned are being addressed separately by the Authority, who may make known their views, within forty days of the dispatch of this notification. Any other interested party may also make known its views within forty days from the date of publication of these findings.

16.4 The Authority would provide opportunity to all interested parties for oral submissions;

16.5 The Authority would disclose essential facts before announcing the final findings.

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