GOVERNMENT OF INDIA
MINISTRY OF COMMERCE & INDUSTRY
DEPARTMENT OF COMMERCE
(DIRECTORATE GENERAL OF ANTI-DUMPING & ALLIED DUTIES)

 NOTIFICATION

 New Delhi the 17th February, 2009

Final Findings

Subject: Anti Dumping Investigations concerning imports of Cathode Ray Colour Television Picture Tubes originating in or exported from Malaysia, Thailand, China PR and Korea RP.

No. 14/8/2007-DGAD : Having regard to the Customs Tariff Act, 1975 as amended in 1995 (hereinafter referred to as Act) and the Customs Tariff (Identification, Assessment and Collection of Duty or Additional Duty on Dumped Articles and for Determination of Injury) Rules, 1995 (hereinafter referred to as Rules);

 

Procedure

 

2.         Procedure described below has been followed with regard to this investigation by the Authority.

 

i)                    On 19th November 2007, the Designated Authority (hereinafter referred to as the Authority) issued an initiation  Notification, duly notifying the same in the Gazette of India, initiating an Anti-Dumping investigations concerning imports of the subject goods originating in or exported from Malaysia, Thailand, China PR and Korea RP (hereinafter referred to as subject countries)

 

ii)                  The Anti-dumping proceedings were initiated following an application received from M/s Samtel Color Limited and JCT Electronics Limited, (hereinafter referred to as the applicants) in respect of complete or incomplete cathode ray colour television picture tubes (hereinafter referred to as CPT) originating in or exported from Malaysia, Thailand, China PR and Korea RP, representing a major proportion of the domestic production of the said product. The application contains sufficient evidence of dumping of the said product from the subject countries and material injury resulting there from, which was considered sufficient to justify the initiation of the proceeding.

 

iii)                The Authority notified the Embassy of subject countries in India about the receipt of dumping application made by the applicants before proceeding to initiate the investigation in accordance with sub-rule (5) of Rule 5 supra;

 

iv)                The Authority sent copies of initiation notification dated 19th  November 2007 to the Embassy of the subject countries in India, known exporters from the subject countries, importers and the domestic industry as per the addresses made available by the applicants and requested them to make their views known in writing within 40 days of the initiation notification.

 

v)                  The Authority provided copies of the non-confidential version of the application to the known exporters and to the embassies of Malaysia, Thailand, China PR and Korea RP in accordance with Rule 6 supra.

 

vi)                The embassies of Malaysia, Thailand, China PR and Korea RP in India were informed about the initiation of the investigation in accordance with Rule 6 with a request to advise the exporters/ producers from their country to respond to the questionnaire within the prescribed time. A copy of the letters and questionnaire sent to the exporters/producers was also sent to them, along with the names and addresses of the exporters.

 

vii)              The applicant requested the Authority to treat China as a non-market economy country for the purpose of present investigations. For the purpose of initiation, the normal value in China PR was considered based on the price of the subject goods in Thailand, Korea RP or Malaysia as an appropriate market economy country for the purpose of establishing normal value in respect of China PR. The Authority informed the known exporters from China that it proposes to examine the claim of the applicant in the light of para (7) & (8) of Annexure-I of the Anti-Dumping Rules as amended. The concerned exporters / producers of the subject goods from China PR were therefore advised to furnish necessary information/ sufficient evidence, as mentioned in sub-paragraph (3) of paragraph 8 to enable the Designated Authority to consider whether market economy treatment should be granted to cooperating exporters/producers who could demonstrate that they satisfy the criteria stipulated in the said paragraph. A questionnaire for according market economy treatment was forwarded to all the known exporters/producers in China and the Embassy of the Peoples' Republic of China.

 

viii)            The Authority sent questionnaire, to elicit relevant information to the following known exporters in subject countries in accordance with Rule 6(4);

 

Malaysia

a)             Chunghwa Picture Tubes (M) Sdn. Bhd.

          Lot 1, Subang Hi-Tech Industrial Park,

          Batu Tiga, 40000 Shah Alam,

          Selangor, Malaysia

         

 b)       Samsung Sdi (Malaysia) Berhad

              Lot 635 & 660, Kawasan Perindustrian

              Tuanku Jaafar, 71450 Sungai Gadut,

              Negeri Sembilan Darul Khusus,  Malaysia        

 

 Korea RP

 c)         Samsung Corporation

               Samsung Plaza Bldg. 263 Seohyeon Dong,

               Bundang-Gu, Sungam Si,

   Gyeonggi Do,

   Korea 463-271

 

   Thailand

 

   d)      Mt Picture Display (Thailand) Co., Ltd.

               142 Moo 5, Bangkadi Industrial Park,

               Tivanon Rd., Tumbol Bangkadi,

               Amphur Muang, Pathumthani 12000

   Thailand

 

China PR

 

e)          Irico Group Electronics Co. Ltd.

               Irico Import And Export Company

               No. 1 Caihong Road,

               Xinyang, Shaanxi, P.C. 712021

 

 ix)     Following exporters/producers responded to the exporter’s questionnaire in a substantial manner and notice of initiation:

a.    Chunghwa Picture Tubes (M) Sdn. Bhd.

b.    Samsung Sdi (Malaysia) Berhad

c.    Irico Group Electronics Co. Ltd. China PR.

d.   Irico Display Devices Co. Ltd. China PR.

e.    LG Philips Shuguang Electronics Co Ltd. China PR.

f.     Beijing Matsushita Color CRT Co Ltd. China PR

g.    Shenzhen Samsung SDI Co., Ltd (SSDI) China PR.

h.    LPD Korea.

i.      Samsung (SDI) Hong Kong

j.      PIA Singapore

k.    TGDC-Thomson China 

Some of the responding exporters requested for extension of time for submissions to the exporters questionnaire (due by 29.12.2007) which was provided across the board to all responding exporters up to 31st of January 2008 for submission of their responses.

x)      Questionnaires were sent to following known importers and users of subject goods in India calling for necessary information in accordance with Rule 6(4).

 

 

a)  Dixon Utilities & Exports Limited

B-14, Phase – Ii,

Noida – 201305 (U.P.)

 

b)  LG Electronics India Pvt. Ltd.     

Plot No. 51, Udyog Vihar,

Surajpur-Kasna Road,

Greater Noida (U.P.)

 

c)  Panasonic Avc Networks India Co. Ltd.

C-52, Phase – Ii,

Noida – 201305 (U.P.)

 

d)  Mirc Electronics Limited

Onida House, G-1, Midc,

Mahakali Caves Road,

Andheri (East)

Mumbai – 400093

 

e)  Samsung India Electronics Pvt. Ltd.

B-1, Sector-81,

Phase – Ii,

Noida – 201305 (U.P.)

 

f)  Videocon International Ltd.

14 Kms. Stone,

Aurangabad-Paithan Road, Chitegaon,

Tq. Paithan,

Dist. Aurangabad - 431105

 

g)  Philips Electronics India Ltd.

Plot 80, Bhosari Indutrial Estate,

P.B.12,

Pune – 411026

 

xi)        In response to the above notification, M/s Dixon Technologies (India) Pvt. Ltd., Panasonic Avc Networks India Co. Ltd, Samsung India Electronics Pvt. Ltd, LG Electronics India Pvt. Limited and Mirc Electronics Limited responded and filed importer questionnaire response;  

xii)        Request was made to the Directorate General of Commercial Intelligence and Statistics (DGCI&S) to arrange details of imports of subject goods for the past three years and for the period of investigations;  

 

xiii) The Period of Investigation for the purpose of the present investigation is 1st July, 2006 to 30th June, 2007 (12 months). The examination of trends in the context of injury analysis covered the period from 1st April 2004 to the end of the POI.

 

xiv)      The Authority conducted on the spot investigation of the domestic industry. The cost of the production of the domestic industry was also analyzed to work out the cost of the production and cost to make and sell the subject goods in India on the basis of Generally Accepted Accounting Principles, based on the information furnished by the domestic industry, so as to ascertain if anti dumping duty lower than dumping margin would be sufficient to remove injury to the domestic industry

xv)     The Authority notified preliminary findings vide Notification no. 14/8/2007-DGAD dated 7th of May of 2008 and subsequent corrigendum notification No. 14/8/2007-DGAD, dated the 30th May, 2008, published in the Gazette of India, Extraordinary, Part I, Section 1, dated the 3rd June, 2008.

 

xvi)     The Central Govt. imposed the provisional duties vide Notification No. 90/2008 dated 24/7/2008.

 

xvii)     The following conversion rates for responding countries have been adopted based on the weighted average for the POI, for this investigation.

 

Country

USD

Currency

China

1 USD

7.807 RMB

Malaysia

1 USD

3.5583 Malaysian Ringgit

South Korea

1 USD

925.93 South Korean Won

Thailand

1 USD

34.94 Thai Bhat

 

 

xviii) The Authority held a public hearing on 15th July 2008 to hear the interested parties orally, which was attended to by representatives of the domestic industry, exporters of the subject goods from the subject countries. The parties attending the public hearing were requested to file written submissions of their views expressed orally. The written submissions received from interested parties have been considered and incorporated in the disclosure to the extent they are relevant and substantiated with evidence.

xix)      The Authority also verified the data of the cooperating exporters, to determine the normal value and dumping margin as per the Rules.

xx)       The Authority made available non-confidential version of the evidence presented by interested parties in the form of a public file kept open for inspection by the interested parties.

 

xxi)      The authority vide its publication dated 18.11.08 informed the interested parties about extension in the investigation period by another three months that is up to 18.02.09.

 

xxii)     The authority issued a detailed disclosure statement on 27.01.2009, with time up to 09.02.09 for submissions, to the interested parties giving thereby essential facts under consideration which may form the basis of final determination.

 

xxiii) *** In the statement represents information furnished by interested parties on confidential basis and so considered by the Authority under the Rules.

 

Product Under Consideration and Like Article

 

3.         The product under consideration is “complete or incomplete cathode ray colour television picture tubes”, more elaborately described as “thermionic, cold cathode or photo cathode valves and tubes such as vacuum or vapor or gas filled valves and tubes, mercury arc rectifying valves and tubes, also called cathode ray tubes, television camera tubes or cathode ray colour television picture tubes, or colour television picture tubes, or colour picture tubes etc.” and has been referred to as colour picture tubes or “CPT” or “CRT” in this notification. Video and computer monitor cathode ray tubes are beyond the scope of the present petition. 

 

4.         The subject goods fall under Chapter 85 of the Custom Tariff Act, 1975 under subheading no. 8540.11. The customs classification is indicative only and is in no way binding on the scope of the present investigation.

 

5.         The applicants have claimed that goods produced by them are like article to the goods originating or exported from Malaysia, Thailand, China PR and Korea RP. The imported product is also used by same category of consumers. The product contains the same basic technical properties and has the same functions & uses

 

Views of the exporter, importers, consumers and other interested parties.

 

Dixon Technologies (India) Pvt. Ltd. and Mirc Electronics Ltd.

 

6.         It has been pleaded that quality and reliability of the PUC manufactured by Domestic Industry is not guaranteed.  Further there are some products which are not manufactured by the domestic industry and the same should be excluded from the PUC. 

 

TCL India Holdings Pvt. Ltd.

 

7.         It has been submitted that the Authority need to reconsider the difference between 21” slim and or ultra slim tubes similar to other types of tubes on the basis of technical examination by a team of competent professionals as the domestic industry has not disclosed/produced before the authority any evidence to clarify that both the product are similar.  On the demand pattern it has been stated that main reason for increased supply of 21” slim and ultra slim tubes are the popular demand/subjected goods in India over the traditional tubes produced by domestic industry.  It has further been claimed that domestic industry is not producing 21 F and FST CTV tubes which is very popular and highly demanded by the Indian industry.  On 29” size they have submitted that domestic industry has failed to utilize its capacity due to idling of its plant for a long period besides all other technical reasons.  To sum up they have stated that both the aforesaid tubes must be out of the scope of examination and proposed measures. 

  

Samsung SDI (Malaysia), Shenzhen Samsung SDI (China) and Samsung India Electronics  PVT. LTD.

8.         CPT can be classified into three categories with variation and sizes which would include conventional CPT, Flat CPT and Slim and Vixlim CPT.  It has been stated that domestic industry is producing conventional CPT whereas they are not equipped with equip to manufacture the flat CPT and slim and Vixlim CPT.

9.         It has been pleaded that domestic industry does not manufacture slim and vixlim CPT  and is still in the process of producing commercially acceptable flat screen CPT and, therefore, the CPT which are not being manufactured by the domestic industry should be eluded from the scope of product under consideration as the same are not live articles to the models being exported by Samsumg, Malaysia and China.  It is further been stated the technology, size, cost, sales price and market perception of slim and vixlim CPT differs from the conventional and normal flat CPT as also that this is completing LCD and PDP market and not conventional CPT manufactured by the domestic industry.  It has thus been pleaded that the scope of PUC should be restricted to types/sizes in models manufactured by the domestic industry. 

LG Philips Displays Korea Co Ltd.

10.       CPT can be classified into three categories namely, conventional CPT , flat CPT, and slim CPT.  India industry does not manufacture slim CPT and is still in the process of producing commercially acceptable flat screen.  Therefore, all types of CPT which are not produced by Indian industry should be excluded from the scope of PUC.  

11.       The authority should proceed on the basis of individual type to type comparison in order to ensure that there is correct apple to apple comparison.  The grouping together of very desperate versions models in the investigation leads to severe distortions of the dumping margins and to unlawful antidumping duty being recommended on models/versions that have admittedly not seen any injurious dumping.  Differences in production process should also be considered.  The domestic industry does not manufacture slim CPT and it is still in the process of producing commercially acceptable flat screen CPT for just two models and, therefore, all types of CPT which are not being manufactured by the domestic industry should be excluded from the scope of PUC.  This should also be done taking into consideration into fact that there are sufficient and significant technical and commercial differences between the respective versions and market segment for each version is clearly distinct. 

Panasonic AVC Networks India Co.Ltd. (importers/users)

12.       The authority should proceed on the basis of individual type to type comparison in order to ensure that there is correct apple to apple comparison.  The grouping together of very desperate versions models in the investigation leads to severe distortions of the dumping margins and to unlawful antidumping duty being recommended on models/versions that have admittedly not seen any injurious dumping.  Differences in production process should also be considered.  The domestic industry does not manufacture slim CPT and it is still in the process of producing commercially acceptable flat screen CPT for just two models and, therefore, all types of CPT which are not being manufactured by the domestic industry should be excluded from the scope of PUC.  This should also be done taking into consideration into fact that there are sufficient and significant technical and commercial differences between the respective versions and market segment for each version is clearly distinct. 

M/s Chunghwa Picture Tubes (Malaysia) SDN. BHD. (CPTM)

 

13.       The Designated Authority in paragraph 14 of the preliminary findings recorded a “provisional” conclusion that the two types of picture tubes are provisionally included within the scope of product under consideration.  Rule 12 of the Anti-dumping Rules does not provide any scope for any provisional determination of the “article under consideration” which has to attain finality at the time of initiation under Rule 6(1) itself. Rule 12 specifically empowers the Designated Authority to record preliminary findings with respect to dumping and injury only. The rationale of this restriction on the Designated Authority is wholly justified on the ground that the interested parties (including exporters from subject countries) ought to be told about the scope of investigation at the time of initiation itself so that they can defend their interests and make up their minds whether to participate in the investigations or not. 

14.       The Designated Authority failed to appreciate that no duties could have been recommended on certain types of CPT that were not produced in India. Certain CPT produced by the Domestic Industry cannot be substituted with the imported CPT. The Designated Authority failed to follow the law declared by the Appellate Tribunal in the case of Videocon Narmada Glass Vs. Designated Authority reported at 2003 (151) E.L.T. 80 (Tri. - Del.) which has been maintained by the Hon’ble Supreme Court in 2004 (164) E.L.T. A31 (S.C.).

 

15.       The Petitioners submit that CPT which are not being manufactured by the Domestic Industry should be excluded from the scope of the product under consideration and the entire analysis relating to dumping, injury and causal link has to be done only after excluding the products not manufactured in India. 

KEMENTERIAN PERDAGANGAN ANTARABANGSA DAN INDUSTRI MALAYSIA

16.       As stated in paragraph 7 of the Gazette, it had been pointed out by interested parties, including Samsung SDI, Malaysia that 21” slim and ultra slim CPT should not be included in the scope of investigation.  However, the DGAD provisionally concluded that it would not be appropriate to exclude the product because of the same basic technical properties and has similar functions and uses.  GOM is of the view that the conventional and slim CPT cater to different market segments because of the significant price differences and consumer preference and each requires n entirely different manufacturing technology.  Therefore, there is no satisfactory evidence that the 21” slim and ultra slim could cause injury to the domestically produced conventional CPT. 

17.       For the 29” CPT, production had only commenced in August, 2006.  Since the production of the 29” had only taken place towards the end of the injury determination period, it is not logical for the DGAD to conclude that the imports had competed with the locally produced CPT and caused injury to the domestic industry. 

18.       To sum up interested parties have argued at the time of oral hearing and subsequently filed their submission before the Authority that 21” slim picture tubes and 29” tubes should be excluded from the scope of the present investigations and proposed measures. The claim for exclusion of 21” slim is based on the ground that this type is not produced by the domestic industry and due to difference in Size, Cost, and Sales Price and Market perception. The claim of 29” tube is based on the ground that the domestic industry has only recently commenced commercial production and that 29” slim is not produced by the domestic industry and keeping product under consideration as provisional is in violation of Rule 12, Rule 12 does not provide any scope for any provisional assessment of product under consideration

 

19.       Response to disclosure statement

 

            Interested parties submitted their response to the disclosure statement. The same have been incorporated in a summarized manner without repetition of the points.

 

A.      M/S. MIRC ELECTRONICS INDIA LTD

 

1.             It is pleaded that the petitioners did not manufacture 21” slim/ultra slim CPT and were still in the process of producing commercially acceptable flat screen CPT in the investigation period and, therefore, the CPT which are not being manufactured by the petitioners should be excluded from the scope of product under consideration.

 

2.             It is further submitted that technology, size, cost, sales price and market perception of slim and ultra slim CPT differs from the conventional and normal CPT so much so that slim and ultra slim CPT are competing the LCD and PDP market and not conventional CPT manufactured by the domestic industry.

 

B.       CHUNGHWA PICTURE TUBES (M) SDN. BHD. (CPTM),

1.             The Authority in the disclosure statement has stated that flat and slim tubes are broadly similar and both are competing in the same market and commercially interchangeable. It is submitted that the different types of the tubes are different in sizes and cater to the different market and different needs. Moreover, where a 14” TV is to be used the other sizes cannot be used. Therefore, it cannot be said that all the tubes cater to the same market and are commercially substitutable. The exporter reiterates that no duties can be recommended on these types of CPT as the same are also not produced in India.

 

2.             It is submitted that CPT which are not being manufactured by the Domestic Industry should be excluded from the scope of the product under consideration and the entire analysis relating to dumping, injury and causal link has to be done only after excluding the products not manufactured in India. 

 

C.       SAMSUNG SDI MALAYSIA AND SHENZEN SAMSUNG SDI CHINA

 

It has also been proposed by the Designated Authority in para 19 of the Disclosure Statement that the physical characteristics of flat and slim are broadly similar barring the fact that in slim the funnel is shortened.  It has also been conceded by the Designated Authority that in slim CPT compressed funnel, more powerful yoke and an electron gun is used.  In case basic structure and main components of the products produced by the Domestic Industry and those exported by Samsung SDI are different they cannot be termed as like article. This clearly establishes that both Conventional and Slim CPT are different products and Domestic Industry does not  manufacture Slim and Vixlim CPT. Further Domestic Industry is still in the process of producing commercially acceptable flat screen CPT. This being the case it is submitted that all types of CPT which are not being manufactured by the Domestic Industry should be excluded from the scope of product under consideration as the same are not like article to the models being exported by SSDI and SDI(M). It is further submitted that the technology, size, cost, sales price and market perception of the Slim and Vixlim CPT differs from the conventional and normal flat CPT. This is competing in the LCD and PDP market and not the conventional CPT manufactured by the Domestic Industry in India. It is therefore submitted that the scope of the product under consideration should be restricted to the types/sizes and models manufactured by the Domestic Industry and should not include other types of CPT.  For the sake of brevity we are not reiterating our submissions made from time to time in this regard before the Hon’ble Designated Authority during the course of investigation and the same may be read as part hereof.

 

D.    THE MINISTRY OF INTERNATIONAL TRADE AND INDUSTRY, MALAYSIA

        (MITI)

 

MITI would like to reiterate that the 21” slim/ultra slim and 29” CPT should be excluded from the scope of investigation due to the reason that the 21” slim/ultra slim is not produced by the domestic industry while the production of 29” CPT had only commenced in August 2006.

 

EXAMINATION BY THE AUTHORITY

 

20.         The claims made by the interested parties have been examined in detail by the Authority considering the various legal provisions. The Authority notes that like article as defined in Rule 2(d) means “an article which is identical or alike in all respects to the article under investigation for being dumped in India or in the absence such an article, another article, which although not like in all respects, has characteristics close resembling those of the article under investigation”.  The authority notes that the products produced domestically may share most, but not all, of the characteristics of the imported product, and thus may not be like in all respect.  The authority evaluated the respective characteristics of any two products and their similarities to the imported products in question broadly based on following factors:   

 

·         Physical characteristics of the merchandise

·         Degree of commercial interchangeability of the products

·         Manufacturing methods and technologies used in production of the merchandise

·         The functions and end uses of the merchandise

·         Industry specifications

·         Pricing

·         Quality

·         Tariff classifications

·         Channels of distribution and marketing of merchandise

·         The presence of common manufacturing facilities of use of common employed in manufacturing of merchandise

·         Customers and productions perception of the products and

·         Commercial brand/commercial prestige

 

21.       The Authority has examined these details during the visit to the plants and notes that physical characteristics of flat and slim are broadly similar barring the fact that in slim the funnel is shortened.  There is a degree of commercial interchangeability of both these products as by bringing the slim in a referential price range of US$ 2 to 7 per piece as per landed value data, the flat can be commercially interchanged.  The authority further notes that manufacturing method of slim are broadly similar except for the use of compressed funnel, more powerful deflection yoke and electron gun.  The functions and end use of the product is common as both are competing in the same market.  The pricing at the market level is different, however, at the landed value level the price differential is in the range of US$ 2 to 7 per piece.  The channel of distribution and marketing of the products are similar and the manufacturing facilities / employees are common. The imported product is also used by same category of consumers. The product contains the same basic technical properties and has the same functions & uses.  The Authority notes that despite the essential disclosure, no substantial claims were put forwarded by the interested parties except reiteration of the submissions made earlier in this regard. In view of the above, the Authority holds that it would not be appropriate to exclude flat and slim types of picture tubes.  The goods produced by domestic industry are like article to the goods originating or exported from Malaysia, Thailand, China PR and Korea RP.

 

22. PERIOD OF INVESTIGATION

 

VIEWS OF RESPONDING EXPORTERS

 

KEMENTERIAN PERDAGANGAN ANTARABANGSA DAN INDUSTRI MALAYSIA

23.       With regard to the procedure of the investigation, there is a possibility of double counting through the selection of period of injury determination (April 04 – June 07) and the period of investigation (POI) (July 06 – June 07).  The resulting overlap (June 06-March 07) may lead to inaccurate assessment that affects injury determination. 

23.1     For example, the volume of imports into India in February 2007 is counted in column 2006-07 as well as in column POI.  This may lead to double counting of the imports and subsequently amplify the volume effects of the imports in this investigation.  In this regard, GOM seeks clarification and assurance that there is no double counting used in the injury analysis. 

M/s Chunghwa Picture Tubes (Malaysia) SDN. BHD. (CPTM)

 

24.       It is submitted that the Authority in the present investigation has not considered the information for the year 2003-04 for a proper analysis of injury to the domestic industry which is in contravention of DGAD’s Trade Notice No. 2/2004 dated 12.05.2004. As per the trade notice, the applicant domestic industry is required to give information for the POI and the previous three years whereas they have supplied the information only for POI, two full years (i.e. 2004-05 & 2005-06) and for a first quarter of 2006-07. There is an overlap of nine months in the POI and the year 2006-07. We would, therefore, request the Hon’ble Designated Authority to kindly ask the domestic industry to provide the information for the year 2003-04. The obvious reason for their not supplying the information for the year 2003-04 is that JCT Electronics, one of the constituents of the Domestic Industry, was declared a sick industry when there was no allegation of dumping in 2004 and continues to be sick during period of investigation. It is apparent that there was no causal link between dumping and injury to Domestic Industry.  Further, underutilization of the capacity was due to lockout at Mohali Plant of JCT and due to technical and other problems at Vadodra plant of JCT. We would request the Authority to kindly also obtain the data from the domestic industry for the year 2003-04 for injury analysis as has been done in many other cases.

25.       It appears that the preliminary findings have overlooked the importance of the words “previous three financial years” in the abovementioned Trade Notice.  It is submitted that the domestic industry is duty bound to give information for the complete “previous three financial years” and the period of investigation (POI).  It further lays down that there should be no gap but there can be overlap. The overlap envisaged in the Trade Notice does not in any way absolve the domestic industry from filing information for the full and complete “previous three financial years”.  Information with regard to the overlapping period is at best an additionality. In similar situation in the case of Nonyl Phenol, the information for the preceding full three years (in addition to the POI and the intervening period) was insisted upon and also taken into account.  It may also be noted that in that investigation the overlap was only for six months. The exporter is therefore not able to appreciate as to how the information for full previous three financial years is not taken into consideration in the present case even when there is overlap of 9 months in the figures of POI and the year 2006-07.  We request the Authority that the same practice be followed uniformly in all investigations.  It may be appreciated that the purpose of calling for the data for the previous years is to carry out a proper trend analysis. If nine months’ data is overlapping, the basic purpose is defeated as it would amount to the comparison of the POI data with itself when the overlap is as much as nine months.

26.       In view of the above, we would request the Hon’ble Authority to kindly ask the domestic industry to provide the information for the financial year 2003-04 in terms of the abovementioned Trade Notice and give us an opportunity to comment on the same without prejudice to the comments made by us regarding the inherent flaws in the application and the investigation procedure.  It may also be mentioned that in some other cases, the Authority has asked for and considered the information of extended previous years even during the course of investigations.

27.       The Ministry of International Trade and Industry, Malaysia (MITI):

             There is overlapping of nine months from June 2006 to March 2007 in POI  

 

Examination by the Authority

 

28.       The Authority has examined the issues raised above. In respect of the contention that there is an overlap in the period between the investigation period and the preceding year, the Authority refers to the aforesaid trade notice earlier issued which clearly provides that there should be no gap in the injury period. More so, when the injury examination has been carried out over a much longer period and the conclusion on injury is not based on a strict comparison between period of investigation and the preceding year, the issue as to how the injury findings have got distorted because of an overlap in the period of investigation and preceding year have not been brought out by the interested parties. The authority therefore upholds the preliminary determination in this regard and holds that there is no ambiguity and inconsistency so far as the selection of Period of Investigation and analysis of injury period is concerned.

 

Confidentiality

 

LG Philips Displays Korea Co. Ltd.

 

29.       Breach of confidentiality by the Authority in the preliminary findings is a serious violation of the provisions of A.6.4 and 6.5 of ADA.   There is no basis for not disclosing weighted averages, estimates relied on, source of data relied on and ROCE used for NIP determination which is a practice in another jurisdiction.  Similarly Anmnual Reports and Director’s reports of Indian industries have not been disclosed. 

 

The Economic and Commercial Councilors Office, Embassy of Peoples Republic of China

 

30.       It has been alleged that the DGAD in violation of article 6.5 of WTO antidumping agreement has disclosed important confidential information given by the responding company such as normal value and export price and thus cause adverse consequences to the companies and have further stated that they hope that DGAD makes up for losses related Chinese companies suffered and terminate the investigation.   It has also been stated that DGAD in the preliminary findings has not disclosed the significant factors such as normal value and dumping margin have been calculated and make it impossible for the responding companies to submit comments. 

 

M/s Chunghwa Picture Tubes (Malaysia) SDN. BHD. (CPTM)

 

31.       It is submitted that certain information which could not have been kept confidential has been kept confidential by the Domestic Industry.  There are also no reasons provided as to why the information on which confidentiality has been claimed and apparently allowed is not susceptible to summarization. Even for information which can be considered as confidential, by its very nature, no proper indexation has been done to permit a reasonable understanding of the substance of the information submitted in confidence.  Grant of confidentiality cannot be automatic and the Designated Authority must apply its mind to whether confidentiality is validly claimed.  If the Applicants are not willing to disclose such information on which confidentiality could not have been claimed, then the data and all such information ought to be rejected. We would request the Authority to first decide this important issue of confidentiality, and thereafter provide us an opportunity to make effective representation as envisaged under the Rules.  We would also like to submit that we are presently prevented from making appropriate submissions in view of excessive confidentiality claimed by the domestic industry. 

32.       The law on Rule 7 has been very well clarified by the Hon’ble Supreme Court in Sterlite Industries (India) Ltd. Vs. Designated Authority reported at 2003 (158) E.L.T. 673 (S.C.). Based on the decision of the Hon’ble Supreme Court, Hon’ble Appellate Tribunal has laid down the scope of Rule 7 in the case of H&R Johnson (India) Ltd. Vs. Designated Authority reported at 2005 (185) E.L.T. 125 (Tri. Del.)  It is now a settled law that the information provided to Designated Authority on confidential basis is not required to be treated as confidential merely because it is provided to the Designated Authority on a confidential basis.  Further, it has been clearly held that confidentiality is not a mere tool to deny disclosure to kill transparency, or to create a handicap for opposing parties.  It has been laid down that for the purpose of transparency, there is an obligation on the authority to require the parties to furnish non-confidential summaries which shall be in sufficient detail to permit a reasonable understanding of the substance of the information submitted in confidence.  The law itself states that if the authorities find that a request for confidentiality is not warranted and if the supplier of the information is either unwilling to make the information public or to authorize its disclosure in generalized or summary form, the authorities may disregard such information.

33.       It is submitted that the Designated Authority is under an obligation to reveal the methodology of computation of normal value and dumping margin to the concerned exporter,   which has not been done despite the specific ruling of the Hon’ble Supreme Court in the case of RIL Vs. Designated Authority wherein it has been held that Rule 7 does not envisage the claim of confidentiality by the Designated Authority.  Further, the approach is also in direct contravention to the express provisions of Rule 12.  This issue has been brought to the notice of the Designated Authority through our earlier communications but we are yet to receive any response whatsoever. We are genuinely at a loss as to how the cooperating exporter be expected to comment upon the preliminary findings when he is not even informed about his own dumping margin calculations.

34.       The exporter is deeply concerned to note that the Designated Authority contrary to its obligations under the WTO Agreement on Anti-dumping and the Indian Rules has disclosed confidential information of the exporter to all parties in Gazette copy of the preliminary findings dated 7th May 2008.  It is pertinent to note that the exporter had claimed confidentiality on such information in terms of Rule 7 and decided to participate under a bonafide belief that such information would be kept confidential. Even if the Designated Authority was not satisfied with the claims of confidentiality, then also the Authority has no right to disclose such information as the power given thereunder is only to disregard the information. The proceedings in view thereof are contrary to the express provisions of Indian Anti-dumping Rules as well as to India’s obligation under the WTO Agreement on Anti-dumping.   

KEMENTERIAN PERDAGANGAN ANTARABANGSA DAN INDUSTRI MALAYSIA

35.       Any information which is by nature confidential, or which is provided on a confidential basis by parties to an investigation shall, upon good cause shown, be treated as such by the authorities.  Such information shall not be disclosed without specific permission of the party submitting it.  Subsequently, the DGAd has also breached Rule 7 of the Customs Tariff (Identification, Assessment and Collection of Anti-Dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995 of India (AD Rules) which states :  

...be treated as such by it and no such information shall be disclosed to any other party without specific authorisation of the party providing such information. 

Panasonic AVC Networks India Co.Ltd. (importers/users)

36.       It has been submitted that authority has not applied its mind to the accuracy and adequacy of the evidence provided by the applicants as the information supplied in the application is not sufficient to justify the initiation as no information has been furnished on exports, likewise data, captive production/consumption debt / interest, ROC is requested as also other products etc. It has further been stated petition relies on a number of estimates which cannot act as a reasonable basis for initiation of the investigations as the authority has not given any supporting evidence to prove the reliability of estimated figures.  The applicants have kept confidential the import data sourced from the DGCI&S.  The authority has failed to disclose calculations made for purpose of fixing dumping margin.  They have further desired the public domain or estimates information relied upon to arrive at the normal value and desired the DI should disclose information i.e. NIP methodology for ROC as also indexed costing information. 

RESPONSE TO DISCLOSURE STATEMENT

37        M/S. MIRC ELECTRONICS INDIA LTD

1.             There was a serious lapse and breach of confidentiality by the Hon'ble Designated Authority in the preliminary findings. The provisions of Article 6.5 of the WTO Anti Dumping Agreement were violated by the Hon'ble Designated Authority when important confidential information given by the responding company was disclosed in the preliminary findings.

 

2.              The Ministry of International Trade and Industry, Malaysia (MITI)

 

3.              It is noted from the Disclosure that the DGAD has not addressed the serious breach of Article 6.5 of the WTO Anti-Dumping Agreement (WTO ADA).

 

Examination By the Authority

 

38.       The Authority has examined the issues raised by various interested parties as above in respect of confidentiality. The authority notes that the information disclosed was based on the yearly weighted average of different sizes / models for different customers. This appears not to be commercially sensitive information as the same related to past periods. Although it could have thrown some light on the possible trends, in view of constant technological improvements happening in CPT industry, constant change in the product mix due to the fast changing demands and the models offered by the companies and significant decline in prices after the period of the investigation, the authority is of the opinion that the information disclosed could not have adversely impacted the interests of the parties. Had this been true, the participating companies would have come forward with their specific claims with regard to dumping margins provisionally determined by the authority. Further, the authority noted that some of the interested parties, despite the alleged disclosure, claimed difficulties in responding  to the calculations of dumping margin in the preliminary findings by stating that they are not able to reconcile the calculations as Preliminary findings notified does not make it amply clear as to how and what adjustments have been made and approached the authority for providing calculations of Normal value, export price and the resultant dumping margin which was provided to these companies. The authority notes that in view of the submissions made by different interested parties in this regard, a corrigendum dated 30th May 2008 was issued blanking certain information.

 

38.1     In view of the above, the authority concludes that no adverse prejudice have been caused to any of the interested parties. Further the information required to be declared, wherever the same has been demanded by individual interested parties has been provided on demand by each of such interested party.

 

Domestic Industry

 

View of the domestic industry

 

39.     Rule 2(b) defines domestic industry as under:-

 

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

 

40.       The application has been filed by Samtel Color Limited and JCT Electronics Limited. The petitioner has provided information relevant to the present investigations. The subject goods are also produced by BPL Display Devices Limited. They have fully supported this petition filed by the two companies. It is claimed that due to heavy dumping they had to suffer huge financial losses which led to suspension of their production.  Production of the petitioner companies constitutes more than 50% and a major proportion of Indian production.

 

41.      After detailed investigations, the Authority notes that (a) production of the Samtel Color Limited and JCT Electronics Limited constitute a major proportion in Indian production (b) Production of the petitioners constitutes more than 50% of Indian production (c) the application was made by or on behalf of the domestic industry. Further, Samtel Color Limited and JCT Electronics Limited constitute domestic industry within the meaning of the rule 2(b) read with 2(d) for the purpose of the present findings.

Views of other interested parties

 

TCL India Holdings pvt. Ltd.

 

42.       It has been stated that JCT Electronics was declared a sick industrial company for the year 2004 and continued to be sick during POI.  It has been inherent weakness and technical problems of non utilization of capacity.  Similarly Samtel added two new lines of production – line 4 and line 5 to produce 29” and 21” at Delhi and these lines continued till the end of POI, while these lines suffered cost overrun and delayed stabilization besides other technical difficulties.   The third applicant BPL Display Devices only supported the petition but did not provide any supportive data to access the impact of import of subject goods.  They have thus desired that Authority must consider their financial and other relevant details to form their opinion on dumped imports. 

 

RESPONSE TO DISCLOSURE STATEMENT

 

43.       M/S. MIRC ELECTRONICS INDIA LTD

Domestic Industry/ Injury

1.              It is submitted that one of the Petitioners, ‘M/s JCT Electronics Limited’ was declared a sick industrial company for the year 2004 and continued to be sick during the Period of Investigation due to inherent weakness and technical problems of non utilization of capacity. The Petitioner has made its own policy errors and the consequential high costs yardstick of dumping and injury. Hence, injury if any is purely self-inflicted and affected by the alleged dumped imports.

 

2.              Samtel added two new lines of production during the injury period – line 4 and line 5 to produce 29” and 21” at Delhi and these lines continued till the end of Period of Investigation, while these lines suffered cost overrun and delayed stabilization besides other technical difficulties.

 

3.               Injury to Samtel is self-inflicted. Samtel was producing conventional CPT till 2005-06 on 3 production lines. The company added two more lines with investments of more than Rs. 310 crores – Line 4 at Kota to produce 29” and Line 5 at Delhi to produce 21”. These lines came in operation during the period of investigation. The Chairman of the company has confirmed that these lines have suffered cost overrun and delayed stabilization.

 

4.              That there is excessive confidentiality claimed by the Petitioning Industry which has affected the injury analysis to be conducted for the Industry as a whole.  Due to this conduct, the Hon'ble Designated Authority should terminate the investigations on the grounds of non-cooperation; 

 

 

44.       CHUNGWA MALAYSIA

 

1.             JCT Electronics, one of the constituents of the Domestic Industry, was declared a sick industry when there was no allegation of dumping in 2004 and continues to be sick during period of investigation. Further, under-utilization of the capacity was due to lockout at Mohali Plant of JCT and due to technical and other problems at Vadodra plant of JCT. However, the Authority has not given any analysis with respect to the above stated facts.

 

2.             Designated Authority contrary to its obligations under the WTO Agreement on Anti-dumping and the Indian Rules has disclosed confidential information of the exporter to all parties in Gazette copy of the preliminary findings dated 7th May 2008.

 

3.             It is submitted that the abovementioned fact disclosed by the Authority in the disclosure statement is completely incorrect as the information or details for the normal value, export price and dumping margin have not been provided to the exporter till date in spite of repeatedly writing letters to the Authority.

 

Examination by the Authority

45.       The issues relating to injury, disclosure of confidential information, cost overruns etc have been dealt with at relevant places. There are no issues raised contrary to the submissions made by the domestic industry on the standing.  In view of the above the Designated Authority confirms the preliminary finding on issue of standing and scope of the domestic industry.

46        Normal Value, export Price and Dumping Margin 

 

Claims of domestic industry

 

47.     The domestic industry has raised following arguments 

 

a.              Normal value in case of China should be determined in accordance with para-7 of Annexure-I.

 

b.             Normal value in case of other countries should be determined on the basis of constructed cost of production. The claims of these companies that they are making profits cannot be correct, considering the information in public domain where these companies have been claiming that their CRT businesses are in losses. The domestic industry has referred to the news release/reports with regard to these foreign producers, wherein these companies have reportedly stated that their CRT business is in losses.  

 

c.              Thai producer has suffered so significant losses that the company has closed operations.

 

d.             Samsung Korea is being investigated by Korean authorities for a number of illegal activities.

 

e.              The EC and the Canadian authorities are investigating a large number of CRT producers on allegations of price rigging by major CRT producers. The investigations are mainly directed against LG, Samsung, Chunghwa, etc

 

f.                     The responding Chinese companies cannot be granted market economy treatment at this stage, as they have not been able to establish that they pass all the necessary tests. Even if one of the conditions laid down under the Rules is not satisfied, market economy treatment cannot be given. 

 

g.             Chinese producers are not entitled for market economy treatment due to significant state interference. Domestic industry requests the Designated Authority to re-examine this aspect in detail.

 

h.             Normal value in case of responding companies highly understated. The petitioners submit that the dumping margin in the preliminary findings is significantly lower than the extent of dumping resorted by the foreign producers. It appears that the normal value assessed is grossly understated and the export prices determined are over stated.  Following are relevant in this regard:

 

i.                     Published financial results of the leading CRT producers show significant financial losses in the CRT business. Petitioners have shown from published statement that Samsung has publicly admitted making significant financial losses in CRT business.  It was claimed by Samsung in its questionnaire response and reiterated at the time of oral hearing that its Malaysian operations were profitable, meaning thereby, the company suffered losses in production and sale of CRT produced at other locations. While it is appreciated that the cost of production of the goods produced by the company at different locations in the world would not be identical; nevertheless, it cannot be argued that the same will be significantly different, particularly when Samsung has closed its operations at Germany, Hungary and Korea and is at present producing in Malaysia. Such being the case, the claim of profits at Malaysian operations and severe financial losses leading to closure at Germany, Hungary and Korea does not appear reasonable and justified. Evidently, the costs are highly under stated.

 

j.                      Chunghwa annual report clearly shows that the company has suffered significant financial losses in respect of its Malaysian operations. The company produces only CRT and CDT at this location.  Profitability in CDT in fact improved over the years.  It establishes that the CPT business had suffered losses as opposed to the claim of profits made by the company.

 

k.             Published news items clearly suggest that Korean Parliament investigated major financial irregularities having been committed by Samsung and consequently Books of Account of the company were under scrutiny. Such being the case, it is evident that Books of Accounts of the company are not credible and cannot be relied upon for determination of cost of production. It is important to note in this regard that cost of production for the present purpose is not restricted to cost of producer/exporter. The cost of production determined by the Authority must be representative of the costs associated with the production and sale of the article under investigation. The petitioner requests comparison of conversion cost claimed by different exporters in order to ascertain how reasonable and representative their claims are with regard to cost of production and sale of the article under investigation.

 

l.                      As per the questionnaire response, admittedly, administrative control of LG Korea is with bankruptcy trust. In other words, so significant were the financial losses of the company that it became bankrupt. It is thus evident that the export prices of the company were far below the cost of production.

 

m.           The petitioner understands that a number of major CPT producer produce CDT at the same location. Profitability of CDT is far higher than profitability of CPT. The petitioner apprehends possibility of disproportionate apportionment of costs to CDT as compared to CPT. The Designated Authority may, therefore, kindly ascertain that the claims of the exporters with regard to allocation/apportionment of cost on CPT and CDT.

 

n.             A number of sizes of CPT are produced by all the producers in the same plant.  While there are normally dedicated production lines for different sizes, however, one production line might be used for producing difference sizes. Possibilities of disproportionate allocation/ apportionment of costs between different sizes are not ruled out. It is important to note in this regard that most of the producers have provided information in the following manner:

 

(a)         Allocation and apportionment of costs between CPT and “other operations” have been shown in Appendix 7.

(b)        Appendix 8 contains average cost of production for all types of CPT;

(c)         Appendix 8(a) and 8(b) have been provided for the CPT sizes produced and sold in the domestic market and exports to India.

 

It is thus evident that information with regard to cost of production of total production of each size may not be on the record. Petitioners request the Designated Authority to kindly direct the responding exporters to provide information with regard to total production of each size of CPT, cumulatively totaling to total production of CPT. Unless, this is provided to the Designated Authority, there is no way the information provided in Appendix 7, 8 and 8A & 3B can be reconciled.

 

47.1     It is also argued that that the export price determined is also incorrect for the following reasons –

     

               i.                          Price need be constructed in case of sales to related parties – in all those cases where the Foreign Producers have exported the goods to their related parties in India, the export price is required to be constructed. There is no information from these Foreign Producers on record in this regard.

 

             ii.                          Export price of Samsung and LG must be constructed in view of relationship between the buyer and the seller. Samsung has a clear condition that it would buy from its related suppliers, unless prices offered by the Indian Producers are cheaper by at least US $ 2 per pc. for 21”. Therefore, the export price claimed by the exporter must be adjusted by US $ 2 per pc. on account of affiliation. In the absence of any claim by LG, the price of LG must also be adjusted by the same amount.

 

           iii.                          Price need be adjusted for “price preference” being given to the related parties – Petitioners have provided evidence establishing that some of the Foreign Producers are giving higher prices to Foreign Producers because of the relationship. Petitioners submit that all these export prices are required to be adjusted downward for the price preference given by the importers to their affiliated exporters. 

 

           iv.                          Price adjustment for different sizes for the same company are materially different – as would be seen from the paper book given at the time of oral hearing, price adjustments claimed by the exporters for higher size of CPT are lower than the price adjustments claimed for lower size of CPT. For example, ocean freight of 21” CPT cannot be lower than ocean freight for 20” or 14”/15” CPT. Evidently, the claims are highly unrealistic.

 

             v.                          Price adjustment claimed from same location are different – petitioners have shown in their paper book that expenses incurred for export of similar size of CPT by two producers at same location appear materially different. This cannot be true. Petitioners request the Designated Authority to verify critically price adjustments claimed by various producers.

 

           vi.                          Same packing cost claimed in domestic and exports – it appears that the exporters have claimed same packing costs in domestic and export product. This cannot be true. The packing costs in case of exports would be substantially higher than the packing costs in case of domestic operations.

 

         vii.                          Sales through related parties – grossly insufficient information – the questionnaire responses provided negligible information in those cases where the sales have been effected through related trading company. Petitioners submit that the questionnaire response cannot be considered complete until the exporters provide the following information in such cases –

 

       viii.                          Export price adjustments disclosed by LPD, Korea appear too low – The price adjustment claimed by LPD, Korea, as the percentage of export price appear quite low.  We request the Designated Authority to verify the claims thoroughly.

 

           ix.                          No adjustment made for credit cost. Foreign Producers are giving 90-180 days credit - A number of responding exporters have not disclosed any price adjustment on account of credit cost. It is, however, a matter of common knowledge that the foreign producers are offering 90-180 days credit to the buyers in India.  The export price must therefore be adjusted for the credit being given to the Indian purchasers.

 

Views of importers and other interested parties

 

LG Electronics India Pvt. Ltd.

 

48.       It is not justified in clubbing the case of LG with importers of CPT.  It is not permissible to consider Malaysia as an appropriate surrogate country for the NME companies in China on the basis of weighted average normal value of each size exported from China.   This eventually effected LG for the reasons of clubbing of its case with other importer, even though LPD is the supplier of CPT to LG from China.  The determination of normal value based upon the domestic selling prices of LG from China looks unviable to avoid adjusting on account of credit cost and it is also incorrect to exclude loss making sales.  Further it is not correct to take recourse to construction of normal in the case of LGE when such value could be easily determined on the basis of weighted average of domestic selling prices of exporters, producers without excluding loss making sales and also on the basis of third country export prices.  

 

TCL India Holdings Pvt. Ltd.

 

49.       It has been submitted that the treatment given by the Authority to the Chinese companies while calculating normal value export price and dumping margin is highly discriminatory and incorrect, some calculations having been taken on the basis of non market economic status and others on the basis of Malaysian economic parameters, the same claim to be totally wrong.  It has been alleged that principles governing the determination of normal value, export price and dumping margin as stated in annexure I of Rule 8 has not been followed.  It has further been stated that nearly some briefings are given to justify the normal value export price and dumping margin which are not sufficient to form the material decision of imposition of antidumping duty.  On the issue of LG Phillips and BMCC having been provisionally market economy status it has been stated that the same clearly implies that authority does not have proper data for completing the investigation.  They further questioned determination of different normal value and export price considering that these companies are from the same country. 

 

Views of the cooperating exporters 

 

M/s Chunghwa Picture Tubes (Malaysia) SDN. BHD. (CPTM)

 

50.       The Authority in the present case in the preliminary findings has taken an average normal value for each size for all the cooperating producers. In this context, we would like to submit in a product like Colour Picture Tubes, the components used, technical specifications, brand perception, etc. are different for different manufacturers.  Under the circumstances, it would not be appropriate to club the prices of various tubes made by different manufacturers merely on the basis of their size.  It may be seen from the detailed data already submitted by us that our pricing is dependent upon a number of variables besides the size and, therefore, the product codes are also different.  Even assuming but not accepting that the present interpretation of the Designated Authority of the Supreme Court’s decision in Reliance Industries Vs. Designated Authority is correct, the decision does not envisage a single normal value for products which are inherently dissimilar.

 

50.1     They have tried to rely upon PVC [Final Findings No. 14/08/2006-DGAD dated 26.12.2007] wherein the designated authority has resorted to computation of normal value and comparison based on the product codes despite the fact that the Designated Authority had specifically directed the exporters to file entire costing and price information separately based on their K Value.  In that case, the product of one manufacturer was identical to that of another for the same K value.  Despite this, the Authority determined individual normal value for each product code for each manufacturer. 

 

50.2     In the instant case, the tubes of the same size are physically and technically different for each manufacturer and a common normal value for the same size for different manufacturers cannot be determined. We are attaching a brief write-up explaining the major differences in CPT of the same size.  Therefore, in our humble submission, there is no reason for the Designated Authority to deviate from the established practice adopted in the PVC case. We would request the Authority to kindly determine the normal value for each size and each manufacturer separately.

 

LG Philips Displays Korea Co. Ltd.

 

51.       The normal value in the preliminary findings has been provisionally based on respective domestic selling prices wherever such domestic sales were in profit.  And after allowing actual adjustment claimed by the exporters.  In case of loss making sales the normal value has been based on the cost of production of respective sixes and adding profit based upon profitable domestic sales.  However, authority should determine normal value in accordance with general method as has been adopted by other countries including EC, China, and USA who are WTO members as single country normal value is a violation of article 9.1 of the Antidumping Act. 

 

52.       The recommending reference prices on the basis of models and not versions, the authority has unintentionally facilitating distortion including dumping of slim versions by exporters who were highly dumping directly competing cheaper conventional versions only in India during the POI and thus has a lower reference price. 

 

53.       Single country normal value determination is a breach of provisions of ADA.  In view of the capacity reduction and plant closure in Korea and rise in prices and focus on high and models/versions Korea are to be excluded on the basis of absence of threat of injurious dumping. 

 

54.       The dumping margin products not exported to India by LPD Korea during the POI must be zero and there should be no duty recommended on these.  Further without prejudice to the same, since there is sufficient verified data available on LPD Korea’s normal value for these products not exported to India during the POI, such data be treated as best information available instead of treating it as a non residual category.

 

KEMENTERIAN PERDAGANGAN ANTARABANGSA DAN INDUSTRI MALAYSIA

 

55.       A fair comparison shall be made between the export price and normal value.   Article 2.2.1 of the WTO ADA provides that sales below cost may be treated as not being in the ordinary course of trade. And may be disregarded i.e. excluded from the normal value calculation, only where the investigating authorities determine that such sales are made within an extended period of time in substantial quantities and at prices which do not provide for the recovery of all costs within a reasonable period of time.  Sales below cost are excluded where the weighted average selling price is below the weighted average per unit cost and where they represent more than 20% of the quantity of the total domestic sales.  No evidence could be found in the Gazette to show that the DGAD has fully satisfied these three requirements before excluding sales below cost of the Malaysian alleged companies. 

 

BMCC  China

 

56.       Even after granted MET faces a higher reference price as against a state owned exporter who was denied MET and also widely known to have lowest export prices, reveal inconsistencies and inaccuracies in the Preliminary finding.

 

RESPONSE TO DISCLOSURE STATEMENT

 

57.       Chungwa  Malaysia

 

1.            The exporter has raised issues about calculation of Normal value/ export price, details of OCT test  and as to what transactions; adjustments, percentage of profit, etc. and have been taken for calculating these values.

 

2.      The Authority in disclosure statement has taken an average normal value for each size for all the cooperating producers. In this context, we reiterate that in a product like Colour Picture Tubes, the components used, technical specifications, brand perception, etc. are different for different manufacturers. Under the circumstances, it would not be appropriate to club the prices of various tubes made by different manufacturers merely on the basis of their size.

 

3.           Export Price: The Authority in the disclosure statement has mentioned that the export price as claimed by the exporter has been allowed after verification.

 

58        Samsung Malaysia and Samsung China

 

a)              Interpretation of Supreme Court judgment in Reliance case for computation of country wide Normal Value  in the present case is totally illogical.

 

b)              In case of SSDI Sales to through SDI (HK) should be considered as part of domestic sales for computation of Normal Value.

 

c)              Due effect of Duty exemption benefit for exports sales should be considered to arrive at Export Price in case of SSDI.

 

d)             Normal Value in respect of 21IFN needs to be based on   the PCN and not the model as the model sold in domestic market is not in sufficient quantities to meet the sufficiency test.

 

e)              Dumping Margin in respect of both SSDI and SDI (M) needs to be reassessed based on the calculation summary provided in soft copies.

 

f)               In case impact of losses generated by these unstable lines is removed from the performance of the Domestic Industry, there is overall improvement in the performance of the Domestic Industry during the period of investigation as compared to the base year when there was no allegation of dumping.

 

g)              Share of the Domestic Industry in the domestic market has significantly improved during the period of investigation as compared to the base year.

 

h)               One of the constituents of the Domestic Industry, namely JCT, has been declared sick by BIFR during 2004. One of its plants is under lock out since 2002.and hence its adverse performance during the period of investigation cannot be attributed to alleged dumped imports.

 

i)                 Injury to the Domestic Industry is self inflicted and cannot be attributed to the alleged dumped imports. There are number of other reasons and not  alleged dumped imports which are causing injury to the Domestic Industry.

 

j)                 There is no price undercutting, price suppression or depression and hence causal link between alleged dumped imports and injury to the Domestic Industry cannot be established.

 

k)              Reference Price must be set on a CIF value basis, rather than landed value. otherwise, reference price must be recomputed in a timely manner to reflect the change in future import duty

 

59.          The Ministry of International Trade and Industry, Malaysia (MITI)

 

a.              The DGAD has not disclosed whether the method of conversion for sales transaction is in accordance with Article 2.4.1 of the WTO ADA which requires currency conversion to be made using the exchange rate on the date of sale

 

b.             MITI is of the opinion that this practice of cumulating the weighted average of normal value between exporters in order to arrive at the country specific normal value is against the WTO ADA.

 

            Domestic Industry

 

60.       It has been submitted that the dumping margin appears to be significantly low and the same may be reviewed. The Interest and SGA costs, credit costs etc have not been properly allocated by different responding exporters.   Some of the exporters are not independent companies and are part of much bigger companies. It has been the consistent practice of other investigating authorities to determine interest and SGA expenses on the basis of consolidated annual report of the parent companies.  These exporters have not provided the annual report of their parent companies, hence adverse inference be drawn and allocations on SGA and interest be made on the basis of information provided by the domestic industry.  The final duties may be recommended in benchmark form expressed in US $.

 

Examination by Authority

 

61.       The Authority has considered the views submitted by various interested parties and reiterates that exporter wise weighted average dumping margin have been calculated by adopting country specific normal value as per the Hon’ble Supreme Court’s judgment in the Reliance case.   The Normal value has been arrived at by doing model to model comparison under each PCN, after applying the OCT test and sufficiency test and as per the methodology prescribed under the rules.

 

Examination of Market economy claims

 

62.      The Authority notes that in the past three years, China PR has been treated as a non-market economy country in the anti-dumping investigations by other WTO Members. Therefore, in terms of para 8 (2) of the annexure 1 of AD rules, China PR has been treated as a non-market economy country subject to rebuttal of the above presumption by the exporting country or individual exporters in terms of the above Rules.

 

62.1       As per Paragraph 8, Annexure I to the Anti Dumping Rules as amended, the presumption of a non-market economy can be rebutted if the exporter(s) from China provide information and sufficient evidence on the basis of the criteria specified in sub paragraph (3) in Paragraph 8 and prove to the contrary. The cooperating exporters/producers of the subject goods from People’s Republic of China are required to furnish necessary information/sufficient evidence as mentioned in sub-paragraph (3) of paragraph 8 in response to the Market Economy Treatment questionnaire to enable the Designated Authority to consider the following criteria as to whether:-

 

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

 

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

 

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

 

d)       the exchange rate conversions are carried out at the market rate.

 

62.2       The Authority notes that several producers and exporters i.e. Irico Group Electronics Co. Ltd., Irico Display Devices Co Ltd, LG Philips Shuguang Electronics Co Ltd, M/s Beijing Matsushita Color CRT Co Ltd, Shenzhen Samsung SDI Co., Ltd; TGDC (Thomson) (response accepted for final determination only),  from China have responded to the questionnaire pertaining to market economy status and to the exporters’ questionnaire, consequent upon the initiation notice issued by the Authority and rebutted the non-market economy presumption. The questionnaire responses and the market economy responses of the responding producers and exporters were examined and deficiencies were issued. The questionnaire responses, market economy responses and deficiency replies, wherever received, have been examined for determination of normal value of the responding producers/exporter of the subject goods from the China PR as follows.  

 

Irico Group Electronics Co. Ltd. and Irico Display Devices Co Ltd (Subsidiary of Irico Group Electronics Co. Ltd)    


63.            The information submitted by the company was verified on 20th and 21st October 2008 at their premises. It was seen that the Company was having major representatives from  the State owned Assets Supervision and Administration of the State Council.  The other important functionaries also continued from the pre re-organization period.   The Company is regularly reporting in its Financial Statement about the nature of  the Company i.e. controlled by PRC Government.   Under the headings related party transactions, sales of goods and services, Board Meetings, declaration of interest etc., the Company is declaring under the relevant provisions i.e. HKAS 24 “Related Party Disclosure”. The inter-company transactions between related and State Controlled enterprises have been reported. The Group has taken short term bank borrowings amounting to RMB *** million secured by the group’s land use rights.    The Company was asked to provide details in this respect. As reported under Related Party Transactions, majority of the transactions under the Headings Sale of goods, purchase of goods and provision of services, year-end balances arising from sales/ purchases of goods / provisions of services etc., are with other State controlled enterprises. In view of the above, the authority treats these Companies to be operating under Non Market Economy conditions.

                                                                   

LG Philips Shuguang Electronics Co Ltd. China PR.

 

64.       Despite agreeing initially for the verification of their submissions at Plant, the producer/exporter company showed their inability (on two different occasions) for getting the proposed verification done due to some internal problems. Hence the claim of MET could not be verified.  The authority therefore holds the exporter as non-cooperative for the purpose of present investigation.

 

Beijing Matsushita Color CRT Co Ltd. (BMCC)China PR.

 

65.        The verification of the records of the producer/ exporter company was carried out on 22nd and 23rd October 2008 at China and that of their exporter M/s Panasonic Industrial Asia at their Singapore office on 24th October 2008. In a recent case of anti dumping proceedings concerning import of CRT (2006/781-EC) with the same producer/ exporter, the company was subject to verification by the EC authorities. The company provided a copy of the disclosure document issued by EC on the issue of Assessment of market economy treatment claims on confidential basis. Perusal of the document indicated the detailed assessment of the ME claims of this company, which has been relied upon by the authority for grant of ME status to this company. In view of this, the Authority treats this Company to be operating under Market Economy conditions.

 

Shenzhen Samsung SDI Co., Ltd (SSDI) China PR.     

 

66.       The verification of the records of the company was carried out on 12th and 13th December 2008 in their factory at Shenzhen and on 11th December 2008 at their related export company in Hong Kong. The documents in respect of organizational chart, portfolio review, Business license, certificate of approval and articles of Association with amendments of business terms and validity etc were shown. In view of the documentation shown, the Authority treats this company to be operating under Market Economy conditions.

 

Thomson Guangdong Display Company Limited (TGDC Guangdong Display Company Limited)

 

67.       The documents in respect of organizational chart, portfolio review, Business license, certificate of approval and articles of Association with amendments of business terms and validity etc were shown at the time of the verification and copies given. The company provided the raw material invoices, payment vouchers, basic invoice in respect of panel, funnel, mask, gun and yoke. The company provided the agreement on lease of the right to the use of land and building. Copy of China Industry land Investigation report indicating the land usage rates in various important cities of China for industrial/ commercial usage was also provided. The authority noted that more than 90% investment in this company have been made by an Indian group thru its foreign share holdings. In view of the above, the authority hold this company as operating under the Market Economy conditions.

 

Normal Value

Common methodology followed for calculating normal value

 

68.       While arriving at the normal value, separate comparison for different sizes/models of CPT has been made. Further, wherever the prices reported are not on CIF basis, the same have been converted into ex-factory after considering adjustments based on their verified response. For injury margin, these prices have been converted into CIF based on their responses or other cooperating exporters data (where information for certain adjustment for the exporter is not available) to arrive at CIF price.

 

 

CHINA: –

Irico Group Electronics Co. Ltd. and Irico Display Devices Co Ltd (Subsidiary of Irico Group Electronics Co. Ltd)

 

69.       The Authority has examined the Price Undertaking offered by M/s. Irico Display Devices Co Ltd.  The Authority notes that the prices offered in the Price Undertaking were based on the preliminary determination and benchmarked with another exporting country. The Authority also that a benchmark form of duty was recommended in the preliminary findings, which automatically takes care of the objective intended in an undertaking.    In view of the final determination of dumping and injury margins, the Authority feels that the price undertaking offered subsequent to the preliminary determination does not hold good.  Further,   the Authority notes that during the POI major exports were undertaken by M/s. Irico Group Electronics Co. Ltd.   It was informed by the Group Company that in future the sales will be contracted through M/s. Irico Display Devices Co. Ltd.   It is noted that the major exports were undertaken by M/s. Irico Group during the POI. It was also noted that these two companies belongs to the same Group, share the same production base, same purchase channel of raw materials, and same research & development technology and are subject to uniform management, but only for accounting and listing purpose these two companies are divided. In view of these submissions that the future exports will be undertaken by M/s Irico Display Devices co. ltd, the dumping margin has been determined only for this entity. However, in respect of the price undertaking submitted, the authority  considers that implementation of undertaking in this kind of complex product would be very difficult in view of constant technological developments leading to evolution of new product types. The Authority is therefore constrained to decline the request for acceptance of price undertaking in view of peculiar facts and circumstances of this case offered by M/s. Irico Display Devices Co. Ltd. as at present. The Authority has determined the Normal Value based on the facts available.

 

LG Philips Shuguang Electronics Co Ltd. China PR:

 

70.       The Authority notes that despite giving adequate notice of the intention to verify the details submitted by the exporter, the proposed visit got postponed twice at the request of exporter citing problems at the plant. In absence of verification, the authority   treats the exporter as non- cooperating for the purpose of present investigation.  

 

Beijing Matsushita Color CRT Co Ltd. China PR, Shenzhen Samsung SDI Co., Ltd (SSDI) China PR: and Thomson Guangdong Display Company Limited (TGDC Guangdong Display Company Limited)

 

71.       The normal value has been based on respective domestic selling prices after doing model to model comparison wherever such domestic sales were in profit and after allowing actual adjustments claimed by the exporters barring the adjustments on account of credit cost in some companies. In case of loss making sales, the normal value has been based on the cost of production of respective sizes and adding profit based on profitable domestic sales. In respect of M/s Samsung, China, the authority has considered the domestic sales excluding those made through Hong Kong. It has been submitted by the company that these sales should have been considered as home sales as the sales made through Hongkong were destined for China. The authority notes that such transactions resulted into actual export and reimport. Further, VAT claims available on export were duly obtained by the company and accounted for.  There being specific distinction between Home sales and Exports and specific accounting treatment in the accounts of the company, the authority has treated sales made in China only as Domestic sales. The duty treatment as claimed by the company has been allowed in this regard.  In case of BMCC, the normal value in case of one size has been determined based on the profitable sales in the domestic market and in case of another size based on the cost of production, the domestic sales for this size being loss making.

 

MALAYSIA:-

 

Chunghwa Picture Tubes (M) Sdn. Bhd. And Samsung SDI (Malaysia) Berhad

 

72.       The normal value has been based on respective domestic selling prices after doing model to model comparison wherever such domestic sales were in profit and after allowing actual adjustments claimed by the exporters barring the adjustments on account of credit cost in some companies. In case of loss making sales, the normal value has been based on the cost of production of respective sizes and adding profit based on profitable domestic sales. In absence of adequate evidence, the authority has disallowed adjustment claimed on account of differential in the cost of Deflection yoke in case of Chunghwa Picture Tubes (M) Sdn. Bhd. The authority has carried out OCT and sufficiency test to arrive at the Normal value in case of Samsung SDI (Malaysia) Berhad. The authority notes that submissions to the disclosure made by M/s Samsung Malaysia and China are based on their detailed examination of the working of the authority in respect of Normal value and export price for these respective countries.

 

KOREA:-

 

LPD, Korea

 

73.       The normal value has been based on respective domestic selling prices wherever such domestic sales were in profit and after allowing the actual adjustments claimed by the exporters. In case of loss making sales, the normal value has been based on the cost of production of respective sizes and adding profit based on profitable domestic sales. 

 

74.       EXPORT PRICE

 

CHINA:-

 

Irico Group Electronics Co. Ltd./ Irico Display Devices Co Ltd    (Subsidiary of Irico Group Electronics Co. Ltd), Beijing Matsushita Color CRT Co Ltd. China PR, Shenzhen Samsung SDI Co., Ltd (SSDI) China PR and Thomson Guangdong Display Company Limited (TGDC Guangdong Display Company Limited)China PR:

 

74.1       The export price has been allowed as claimed after verification.  Further, wherever the prices reported are not on CIF basis, the same have been converted after allowing adjustments based on individual response, wherever applicable, or based on other cooperating exporters data in order to determine landed price of imports. Individual adjustments from the export price, as claimed have been allowed. It was seen that in case of M/s Samsung SDI co. ltd., the exports have been made through their Hong Kong  affiliate Company. The expenses in respect of Hong Kong related activity have been taken as verified during the verification.

 

LG Philips Shuguang Electronics Co Ltd. China PR:

 

74.2     The Authority notes that despite giving adequate notice of the intention to verify the details submitted by the exporter, the proposed visit got postponed twice at the request of exporters citing problems at the plant. In absence of verification, the authority   treats the exporter as non- cooperating for the purpose of present investigation.

 

MALAYSIA:-

Chunghwa Picture Tubes (M) Sdn. Bhd. And Samsung Sdi (Malaysia) Berhad

 

75.       The export price has been allowed as claimed. Individual adjustments from the export price, as claimed have been allowed after verification. In case of one of the exporters where sales have been made to both affiliated and unaffiliated customers, export price has been calculated based on sales to unaffiliated customers.

 

KOREA:-

LPD, Korea

 

76.       The export price has been allowed as claimed. Individual adjustments from the export price, as claimed have been allowed after verification.

 

Normal value, export price and dumping margin in case of Thailand

 

77.       No producers in Thailand have responded to the Authority, nor has any other information been made available to the Authority with regard to costs or prices in Thailand. Under the circumstances, the Authority has determined normal value in Thailand on the basis of estimates of constructed cost of production, duly adjusted to include a profit margin. Export price has been determined on the basis of imports information reported to the Customs. Normal value, export price and dumping margins have been determined separately for each type. Cumulative dumping margin has been determined considering the associated volumes.

 

DUMPING MARGIN

 

78.  The Authority has determined country specific normal value based on the domestic sales, wherever applicable and as per the prescribed methodology and export price at ex-factory level in respect of each cooperating exporter, separately for each size. Individual / Cumulative dumping margin has been determined considering the associated volumes. Thus, the Authority considers that the comparison made constitutes a fair comparison. 

 

 

 

 

78.1     Chungwa- Malaysia

 

Unit

 14"***

 15 ***

 20"***

21"***

29"***

Total

Quantity

Pcs

***

***

***

***

***

***

Normal Value

RM

***

***

***

***

***

***

Net Export Price

RM

***

***

***

***

***

***

Dumpin Margin

RM

***

***

***

***

***

***

Dumpin Margin

%

15-20

3-8

10-15

3-8

3-8

15-20

 

78.2     Samsung- Malaysia

 

 

Unit

14***

14***

15***

20***

21***

21***

21***

21***

Total

Quantity

Pcs

***

***

***

***

***

***

***

***

***

Normal Value

RM

***

***

***

***

***

***

***

***

***

Net Export Price

RM

***

***

***

***

***

***

***

***

***

Dumpin Margin

RM

***

***

***

***

***

***

***

***

***

Dumpin Margin

%

13-18

1-4

(5-10)

10-15

15-20

0.5-2

2-5

7-12

3-8

 

78.3     LPD- Korea

 

Unit

15"***

21"***

21"***

29"***

29“'***

29 ***

29”***

29"***

Total

Quantity

Pcs

***

***

***

***

***

***

***

***

***

Normal Value

KY

***

***

***

***

***

***

***

***

***

Net Export Price

KY

***

***

***

***

***

***

***

***

***

Dumpin Margin

KY

***

***

***

***

***

***

***

***

***

Dumpin Margin

%

5-10

5-10

5-10

14-19

2-6

2-7

5-10

12-17

5-10

  

78.4           Irico Group Electronics China

 

Unit

14'***

15"***

21 ***

Total

Quantity

Pcs

***

***

***

***

Normal Value

RMB

***

***

***

***

Net Export Price

RMB

***

***

***

***

Dumpin Margin

RMB

***

***

***

***

Dumpin Margin

%

30-35

40-45

35-40

30-35

 

78.5     Irico Display, China

 

Unit

21 ***

Quantity

Pcs

***

Normal Value

RMB

***

Net Export Price

RMB

***

Dumpin Margin

RMB

***

Dumpin Margin

%

52-57

 

 

78.6     Shenzhen Samsung SDI – China  through SDI Hongkong

 

Unit

21***

21***

29***

Total

Quantity

Pcs

***

***

***

***

Normal Value

RMB

***

***

***

***

Net Export Price

RMB

***

***

***

***

Dumpin Margin

RMB

***

***

***

***

Dumpin Margin

%

     5-10

      8-13

      5-10

      5-10

  

78.7     BMCC- China

 

Unit

14“***

15”***

Total

Quantity

Pcs

***

***

***

Normal Value

RMB

***

***

***

Net Export Price

RMB

***

***

***

Dumpin Margin

RMB

***

***

***

Dumpin Margin

%

20-25

30-35

20-25

  

78.8     Thomson Guandong Display Company Limited (TGDC Guandong Display Company Limited) 

 

Unit

21”

29”

Total

Quantity

Pcs

***

***

***

Normal Value

RMB

***

***

***

Net Export Price

RMB

***

***

***

Dumping margin

RMB

***

***

***

Dumping margin

%

30-35

5-10

20-25

   

78.09   BMCC China thru Panasonic Singapore

 

Unit

14“

15”***

Normal Value

RMB

***

***

Net Export Price

RMB

***

***

Dumpin Margin

RMB

***

***

Dumpin Margin

%

18-23

30-35

 

METHEDOLOGY FOR INJURY DETERMINATION AND EXAMINATION OF CAUSAL LINK

 

Views of the domestic industry

 

79.       The domestic industry has claimed to have suffered material injury in their post oral hearing submissions.

 

(a)     Production, sales volume and capacity of the domestic industry has increased in response to increase in demand. Even though production and sales of the domestic industry increased, the increase in the same was far lower than the increase in the demand. Resultantly, the capacity utilization suffered.

 

(b)     Foreign producers kept reducing their prices consistently over the injury period. Resultantly, the domestic industry was forced to reduce its prices consistently throughout the period.

 

(c)     Selling prices have been constantly declining. In fact, the declines in the selling prices have been more than declines in the cost of production. No producer of goods can sustain such kind of prices on long-term basis. The situation is bound to result in sickness unless checked and controlled. In view of such precarious situation, urgent action is required to be taken.

 

(d)     Profitability of the domestic industry has declined over the years. Not that the domestic industry was having good profitability earlier (imports have been competing with the domestic industry for past several years). However, at least it was surviving and growing (imports have all along been a constant threat to the industry). Situation has, however, gone completely out of control and beyond tolerable limits from the present period of investigation, when the domestic industry’s profitability steeply declined due to dumped import form the subject countries and the domestic industry was faced with huge financial losses. The selling prices of domestic industry throughout the injury period were so low that the contribution margin of the domestic industry deteriorated significantly. Contribution margin got affected due to the dumped imports from the subject countries.  

 

(e)     The productivity of the domestic industry increased. However, in spite of this positive situation, the domestic industry was faced with deteriorating financial performance. No industry can think of improving its plant operational performance only to face adverse financials situations.

 

(f)     The return on capital employed and cash flow deteriorated throughout the injury period. Further, whereas return on capital employed was positive upto 2005-06, the same became negative from 2006-07 and the position deteriorated further in the investigation period. The imports are adversely affecting the return on capital employed and cash flow of the domestic industry.

 

(g)     The average stocks of the domestic industry have increased. This is in spite of the fact that the production gets regulated on the basis of orders.

 

(h)    The employment of the domestic industry over the years has increased due to increase in capacity. Salary & wages paid to the employees have been increasing. Petitioners have, in fact, no other option but to afford wage increases.

 

(i)      Persistent adverse performance would adversely impact the ability of the domestic industry to raise fresh capital.

 

(j)      The dumping margin from the subject countries are not only more than de-minimus, but also quite significant.

 

(k)     Imports were significantly depressing the prices of the domestic industry in the market. As a result of significant price depression, contribution margin steeply declined. The domestic industry has been forced to reduce the price significantly higher than the decline in raw material costs. This has so significantly impacted the profitability of the domestic industry that the domestic industry faced huge financial losses, which kept increasing over the injury period.

 

(l)      Market share of domestic industry increased till 2005-06, but declined very steeply in proposed POI with significant increase in imports in that period.

 

(m)    Due to dumping of subject goods in India from subject countries, the domestic industry is not able to grow up to the mark. Even though there was positive growth in demand, sales, and production of the domestic industry, but due to dumping form subject countries, capacity utilisation, contribution margin, profitability, cash flow and return on investment deteriorated and growth therein was negative.

 

(n)     Injury to the domestic industry is established by decline in market share, selling prices, profit, return on investments and cash flow.

 

(o)     The domestic industry has been forced to reduce the selling price significantly because of consistent reduction in prices offered by foreign producers. It cannot be disputed that the selling price of the domestic industry is based on the import prices. All major TV manufacturers do their price negotiations based on the price at which they can import the material. Thus, domestic prices are benchmarked to import prices. The reduction in selling price is direct result of reduction in export prices by the foreign producers.

 

(p)     Some of the T.V manufacturers are sourcing material from their affiliated suppliers.  These companies have been giving price preferences to their own related companies. Resultantly, the domestic industry is forced to offer a price lower than the price offered by such related suppliers.

 

(q)     There is a significant difference in credit period offered by foreign suppliers and domestic industry.

 

(r)      Imports from subject countries were significantly depressing the prices in the market. Even though there had been some decline in raw material cost, the decline in selling prices was far more than decline in raw materials costs.

 

(s)      Performance of JCT Electronics deteriorated as would be seen from the information provided by the company. The company is under BIFR. Once the performance is adjusted as per BIFR rehabilitation, it would be seen that the performance of JCT shows much severe deterioration. Thus, operational performance of JCT deteriorated significantly.

 

(t)      JCT could not utilize its capacity at Mohali. However, even if this capacity was not considered, the data still show significant injury having suffered in terms of significant unutlised capacity. Capacity of Mohali was 1 million pieces, whereas unutilized capacity was to the extent of 27%.

 

(u)     In case of Samtel, the cost over run is with reference to the Board of Directors approval. Even if this cost over run is adjusted, it would seen that the performance shows significant deterioration. As regards delay in stabilization of production, it would be noted that the capacity utilization declined steeply after Dec., 2006. Capacity utilization of the company between Aug.-Dec., 2006 was more than 50%, which declined to 17% during Jan.-Dec., 2007 period, thus clearly establishing that this decline was due to lack of orders.

 

(v)     Opinion of Association of Indian Individual Investors is of no consequence/ relevance, given that these are individual opinions without having access to relevant information.

 

(w)    The fact that the new production plants were not operating even at cash break-even is not solely because of cost over runs. In fact, these are substantially due to significant price erosion in the market.

 

(x)     It is disputed that the cost overrun is required to be adjusted under the rules. Cost overruns are normal business phenomena and have invariably been allowed by the Authorities. In any event, the impact of cost overrun is only in terms of its adverse impact on interests and depreciation cost. Further, the very same report shows that the company had targeted a pay back period of entire investment as 3.3 years. The cost overrun is only with reference to the higher pre-operating or trial run production expenses at Line 4, which were incurred in view of the redesign in the product demanded by the customers. In case of Line 5, the company had originally planned a dedicated 14” line, which was converted into a flexi 14” and 21” line.

 

(y)     The Designated Authority is required to determine injury to the “domestic industry”. Individual performance of the constituents of the domestic industry is irrelevant.

 

(z)      Samsung has selectively referred to the annual reports. The very same reports referred by Samsung contain views of the company with regard various factors of injury.

 

(aa)    Export performance is not seen as a percentage of domestic or total sales. In any event, export performance has suffered because of dumping of the product by these producers in the global market and consequent injury suffered by Indian Producers in respect of their exports. Further, the company has provided separate information with regard to domestic and export operations and the claim of injury is clearly based on domestic operations. 

 

80.       Considering various injury parameters, it was claimed by the domestic industry that the performance of the domestic industry has declined over the injury period and the dumped imports of subject goods are causing severe material injury to the domestic industry. The deterioration in the performance during the current period is quite significant and material. Increase in imports led to increase in market share of imports. As a direct consequence, market share of domestic industry could not increase as a result of increase in demand. On the contrary, the market share of the domestic industry declined significantly in the POI. Further, significant decline in the market share in the proposed POI led to significant under utilization of production capacities. Decline in import price forced the domestic industry to reduce the prices, which in turn led to significant erosion in profit margin and consequent deterioration in profit/loss, return on investments and cash flow.

 

VIEWS OF OTHER INTERESTED PARTIES

 

81.       All the interested parties including LG Philips Displays Korea Co. Ltd., Samsung (SDI), Malaysia, Samsung (SDI), China, BMCC, China, IRICO, China, LG Electronics India Pvt. Ltd., Dixon Technologies India Pvt. Ltd., Chunghwa Picture Tubes, Malaysia, TCL Holdings Pvt. Ltd.  have commented on the injury to the domestic injury.  All these opposing interested parties have disputed that the domestic industry has suffered injury due to dumped imports. Their views are briefly summed up as follows –

 

(a)     There are 3 types of CPT – Conventional, Flat and Slim/Vix Slim/Super slim. The domestic industry has admittedly not produced 21” slim and 29” slim.  Since the domestic industry has not produced these types, the same should be excluded from the scope of the investigations. No injury could have been caused by these imports.

 

(b)     The injury period is not as per the DGAD practice.  Since the period 2006-07 and period of investigation is almost similar, the same may not serve any fruitful purpose in assessing the injury to the domestic industry.  It was apprehended that during 2002-03 and 2003-04 the domestic industry might have suffered losses and they might have deliberately not submitted information for those period for this reason.

 

(c)     JCT Electronics was declared sick unit by BIFR for the year 2004 and continued to be sick during the period of investigation.  The company was sick even during the period when there was no allegation of dumping.  The sickness of the company is on account of other reasons and not due to alleged dumping.

 

(d)     JCT declared lockout at Mohali plant in March 2002 and has not been using this facilities. The main reason for non-utilization of capacity by JCT is lockout at Mohali plant.

 

(e)     In respect of Baroda plant, the Corporate Announcement dated 7.3.2007 stated that operations of this unit had not stabilized and capacity utilization was low. This clearly demonstrates that the company is having some technical/other problems, which are causing injury to it.

 

(f)     Injury to Samtel Colour is self-inflicted. 

 

(g)     Samtel was producing conventional CPT till 2005-06 on 3 production lines. The company added two more lines with investments of more than Rs. 310 cores – Line 4 at Kota to produce 29” and Line 5 at Delhi to produce 21”. These lines came up in operation during the period of investigation and remained unstable till the end of the period of investigation. The Chairman of the company has confirmed that these lines have suffered cost overrun and delayed stabilization.

 

(h)     Association of Indian Individual Investors also opined that the addition of line 4 and line 5 led to deep financial crisis for the company, resulting in losses.

 

(i)      Samtel has admitted in its quarterly results that it went into financial mess due to extension of two lines. These two lines were not operating even at cash break even.

 

(j)      The article published in Money Life- Personal Finance Magazine, while reviewing the performance of Samtel has also opined that Samtel is on continuous decline.

 

(k)     Samtel informed the National Stock Exchange that existing 3 lines were operating full capacity and line 4 and 5 operations were being stabilized.

 

(l)     Demand for CPT increased and the domestic industry could not supply the materials, thus leading to higher imports.

 

(m)    Samtel has admitted that several uncompetitive manufacturing units in the CPT sector in India have been decommissioned over the past few months, thus providing significant market share to the company, which increased from 36% to 46%.

 

(n)     There is no evidence of adverse volume effect as a result of increase in imports.

 

(o)     There is no evidence of adverse price effect. The price undercutting from subject countries is negative nor they is any evidence of price suppression or depression. 

 

(p)     Decline in price has been caused by decline in cost.

 

(q)     Samsung has been selling the product at much higher prices than selling by the domestic industry. Various economic parameters relating to domestic industry does not show injury.

 

(r)      The capacity utilization has suffered due to poor export performance. Delay in stabilization of new lines 4 and 5 set up by Samtel resulted in lower capacity utilization.

 

(s)      If inefficiencies in production are removed, the sales price will be above cost of production.

 

(t)      Increase in inventory does not show injury, as inventories have declined as a percentage of sales, percentage of production and number of days of production in stock.

 

(u)     The profitability position given also does not show injury. The domestic industry was making losses during 2004-05 and even during 2001-02. Losses during 2005-06 and 2006-07 and the period of investigation increased when the major constituents started implementing production at new lines. The erosion of profitability is due to line 4 and line 5 and not alleged dumped imports. 

 

(v)     Employment and wages also does not show injury.

 

(w)    Samtel had a positive cash flow during 2006-07. Cash flow situation of the domestic industry also does not show injury.

 

(x)     The non-injurious price should be determined after taking into account unstable production.

 

(y)     There is no evidence of causal link as well. Changes in the pattern of consumption from present TVs to LCD are a major factor for injury.  Further, developments in technology are another cause for injury to the domestic industry.

 

(z)     Export performance of the domestic industry has also suffered, thus leading injury to the domestic industry

 

(aa)    The claim of increase in productivity is also incorrect.

 

Response to the Disclosure statement.

 

81.1                 M/s IRICO Display China, IRICO Group China, BMCC China, Panasonic Singapore and LPD Korea have made almost similar submissions in respect of Injury to the Domestic Industry and calculation of Non Injurious Price.  M/s Thomson Guandong Display Company Limited have made their submissions in respect of self inflicted injury by the domestic industry. It has been mentioned that delayed stabilization of lines 4 and 5 in case of M/s Samtel led to higher costs coupled with large debt repayment obligations led to higher liquidity conditions for the company.  Further, lower than anticipated demand of 29” resulted in lower production and revenues from line 4.

 

Examination by the Authority

 

82.       The Authority has taken note of various arguments raised by various parties in their submissions and issue of injury to the domestic industry has been examined at appropriate places.  It is stated that Non Injurious Price have been arrived at as per the methodology and after making the adjustments for the cost overruns, wherever encountered. The Authority therefore, proceeds to examine the injury, if any, to the domestic industry on account of imports from the subject countries.

 

Cumulative Assessment

 

83.       Annexure II (iii) to the Anti Dumping Rules provides that in case imports of a product from more than one country are being simultaneously subjected to anti dumping investigations, the designated authority will cumulatively assess the effect of such imports, in case it determines that:

 

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

 

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

 

84.       The Authority considered whether it would be appropriate to cumulatively assess injury to the domestic industry. As stated below, it would be appropriate to assess injury to the domestic industry cumulatively from Malaysia, Thailand, China and Korea RP:-

 

i)     The margins of dumping from each of the subject countries are more than the limits prescribed,

 

ii)    The volume of imports from each of the subject countries is more than the limits prescribed,

 

iii)     Cumulative assessment is appropriate in view of the following factors :-

 

a.       The goods involved are like articles and are competing in the same market;

 

b.       The imported products are being sold through the same channel of distribution and to comparable category of customers;  

 

c.       Products from both the countries are undercutting the prices of the domestic industry in the market.

 

d.       Imports from both the countries are increasing.

 

85.       Article 3.1 of the ADA and Annexure II of the AD Rules provide for an objective examination of both, (a) the volume of dumped imports and the effect of the dumped imports on prices in the domestic market for the like products; and (b) the consequent impact of these imports on domestic producers of such products, with regard to the volume effect of the dumped imports. The authorities are required to examine whether there has been a significant increase in imports, either in absolute term or relative to production or consumption in the importing member. With regard to the price effect of the dumped imports, the authorities are required to examine whether there has been significant price undercutting by the dumped imports as compared to the price of the like product in the importing country, or whether the effect of such imports is otherwise to depress prices to a significant degree, or prevent price increase, which would have otherwise occurred to a significant degree.

 

86.       For the purpose of injury analysis the Authority has cumulatively examined effect of dumped imports of the subject goods on the domestic industry and its effect on production, capacity utilization, sales, prices and profitability to examine the existence of injury and causal links between the dumping and injury, if any.

 

87.       Since positive dumping margins have been established for the exports from the subject countries, therefore, entire exports from the subject countries have been treated as dumped imports for the purpose of injury analysis and causal links examination. 

 

VOLUME EFFECT:

 

Volume Effect of dumped imports and impact on domestic Industry

 

88.       The Authority has procured transaction wise imports information from the DGCI&S. Information provided by the responding exporters, importers/ consumers, DGCI&S information and information in the petition was correlated and the position is as follows –

                                                                                                            Pcs

 

                POI

As per exporter's responses

 

Malaysia

 

Chungwa

***

Samsung,

***

Korea

***

LPD

***

China

***

Samsung,

***

Irico Group

***

Irico display

***

 BMCC

***

TGDC

***

Total as per responses

4312696

 

 

As per importers' responses

 

LG, India

***

Samsung, India

***

Mirc India

***

 Dixon

***

 Panasonic

***

Total as per importers' responses

2776957

 

 

As per petition (based on imports

reported by DGCI&S and ICD, Dadri)

3834920

 

89.       The Authority notes that the actual volume of imports reported by the responding exporters is far more than the volume of imports reported in the statistics made available by the DGCI&S. The domestic industry submitted that the import data in respect of ICD, Tughlaqabad and Dadri were not fully available. The Authority has therefore considered the volume of imports on following basis –

 

i.          On the basis of responses filed by the exporters in case of Malaysia and Korea in view of the fact that all known exporters have filed responses,

 

ii.         On the basis of DGCI&S in case of Thailand, as none of the exporters have filed questionnaire responses

 

iii.       On the basis of responses filed by exporters of China though only BMCC, Samsung, Irico, Irico display, TGDC and LPD have filed the responses.

 

iv.       In case of importers, responses have been filed only by LG, Samsung, Mirc, Dixon, Panasonic, whereas there are a number of other companies as well who have also imported the subject goods according to the domestic industry, thus these figures have not been taken into account.

 

v.    The information made available by ICD, Dadri and DGCI&S shows that the imports reported at ICD, Dadri have not been reported in the DGCI&S information.

 

90.       The Authority is constrained to adopt import data reported by DGCI&S and ICD, Dadri for preceding years in view of the fact that the responding exporters have not provided information on uniform basis in respect of preceding years, nor the information covers entire injury period.

 

 

 

IMPORT VOLUMES AND SHARE OF SUBJECT COUNTRIES

 

91.        The volume of dumped imports of subject product from subject countries is given in the table below.

 In 000 Pcs.

            Particulars

2004-05

2005-06

2006-07

July 06 to June 07

Import volumes (in ‘000 pcs)

 

 

 

 

China

192

118

254

876

Korea South

640

804

986

1,178

Malaysia

993

848

1,047

2,467

Thailand

113

431

998

1,090

Total subject countries

1,938

2,200

3,284

5611

Other country

403

138

45

66

Total Imports

2,341

2,338

3,329

5677

Market Share in Imports (%)

 

 

 

 

China

8.20

5.04

7.64

15.43

Korea south

27.36

34.38

29.61

20.75

Malaysia

42.41

36.25

31.44

43.45

Thailand

4.84

18.44

29.96

19.20

Total sub country

82.81

94.11

98.65

98.83

Other Countries

17.19

5.89

1.35

1.17

Production

***

***

***

***

Subject Import in relation

to Production

***

***

***

***

Index

100

113

129

212

 

92.       The Authority proposed to hold that imports from subject countries increased significantly over the period in absolute terms, in relation to imports into India and in relation to production in India. At the same time, imports from other countries declined.

 

Demand and market shares

                                                                                                                        In 000 pcs

 

2004-05

2005-06

2006-07

POI

Demand in India

10181

10671

12481

15256

      Sales of domestic industry

***

***

***

***

      Sales of other Indian producer

***

***

***

***

      Imports from subject country

 

 

 

 

      China

192

118

254

876

      Korea south

640

804

986

1,178

      Malaysia

993

848

1047

2,467

      Thailand

113

431

998

1,090

      Total subject country imports

1938

2200

3284

5611

      Other countries imports

403

138

45

66

      Total Imports in India

2341

2338

3329

5677

Market Share

 

 

 

 

      Domestic industry

***

***

***

***

Index

100

106

140

121

      Other Indian producer

***

***

***

***

Index

100

94

31

19

      Subject country

 

 

 

 

      China

1.88

1.10

2.04

5.74

      South Korea

6.29

7.53

7.90

7.72

      Malaysia

9.75

7.94

8.39

16.17

      Thailand

1.11

4.04

7.99

7.14

      Total subject countries

19.04

20.62

26.31

36.78

      Other countries

3.95

1.29

0.36

0.43

 

93.       Demand of subject goods has been determined by addition of domestic sales of domestic industry and all imports from all countries. The Authority notes that demand for the subject goods had been growing from base year to POI. It grew by about 50% over injury period.

 

94.       The Authority proposes to hold that the market share of dumped imports increased significantly over the relevant period, resulting in decline in the market share of the Indian industry. The Authority proposed to hold that the dumped imports show adverse volume effect.  

 

PRODUCTION, SALES VOLUME AND CAPACITY UTILIZATION OF THE DOMESTIC INDUSTRY

 

95.       Factual position is as follows

                                                                                                In 000 Pcs

Particulars

2004-05

2005-06

2006-07

POI

Capacity

***

***

***

***

Index

100

125

156

170

Production

***

***

***

***

Index

100

100

131

138

Capacity utilization

***

***

***

***

Index

100

80

84

81

Sales

***

***

***

***

Index

100

111

171

181

Demand

10181

10671

12481

14696

 

 

96.       It is noted that capacity, production and sales volumes of the domestic industry increased in response to increase in demand. While the capacity increased by *** lacs pieces, production increased only by *** lacs pieces, even though demand increased by *** lac pieces. Domestic industry faced decline in capacity utilization in spite of existing demand in the Country.

 

97.       It has been represented by the interested parties that JCT capacity at Mohali should not be considered, as it is lying idle for quite some time. Therefore, the Authority has not considered production capacity of JCT at Mohali in the above analysis. It has also been represented that Samtel has not been able to utilize its new production line capacity in view of operational constraints. The Authority examined month wise production & capacity utilization at this line and noted that having achieved a plant utilization of more than 50% over a period of five months between Aug.-Dec., 2006, the capacity utilization has significantly fallen thereafter. It cannot certainly be a situation where the company could have reached upto this level and yet it faced such technical constraints that its utilization fell as low as 1.2% in Jan.-Dec., 2007 period.

 

PRICE EFFECT OF THE DUMPED IMPORTS ON THE DOMESTIC INDUSTRY

 

98.       With regard to the effect of dumped imports on prices as referred to in sub-rule (2) of rule 18, the Designated Authority shall consider whether there has been a significant price undercutting by the dumped imports as compared to the price of like product in India or whether 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.

 

99.       The impact on the prices of the domestic industry on account of the dumped imports from the subject countries have been examined with reference to the price undercutting, price underselling, price suppression and price depression, if any. For the purpose of this analysis the weighted average cost of production, weighted average Net Sales Realization (NSR) and the Non-injurious Price (NIP) of the domestic industry have been compared with the landed cost of imports from the subject countries.

 

100.       The interested parties have argued that the price undercutting by the imports is negative. In other words, the domestic industry is selling the product at a price below the landed price of imports. It has however not been disputed by any interested party that the domestic industry fixes its prices on the basis of the prices offered by foreign producers. Domestic industry has represented that the price negotiations with all major customers are on the basis of the prices offered by the foreign producers. Domestic industry has also represented that the major cause for unprecedented fall in the prices over the injury period has been the price reductions resorted to by these foreign producers.

 

EVALUATION OF PRICE OVER PERIOD UNDER CONSIDERATION

 

101.       The Authority examined the trend of import prices over the injury period, separately for each size and cumulatively for subject countries. The relevant information is as shown below –

 

 CIF import price

2004-05

2005-06

2006-07

POI

Decline  in prices

14 complete tube

***

***

***

***

27%

15"

***

***

***

***

17%

20" conventional

***

***

***

***

19%

21" conventional

***

***

***

***

31%

21" flat

***

***

***

***

36%

21" slim

***

***

***

***

9%

29" flat

***

***

***

***

22%

 

102.       CIF import price of the subject goods from the subject countries have declined over the injury period. The price declines have ranged from 9% to 36%. In respect of high volume types (14” and 21” flat) the prices declined by 27% and 36% respectively.

 

103.       The Authority examined whether the above price decline could be linked to the decline in cost of production. The Authority notes that whereas the exporters have not provided relevant information in this respect, the domestic industry has provided information for the entire period. It is noted that even though there were declines in cost of production as well, the above declines are far more than the declines in cost of production.

 

PRICE UNDERCUTTING

 

104.       In order to determine price undercutting, Authority examined the responses filed by the exporters and importers/users. Price undercutting have been separately determined for each responding exporter. For the purpose, each type of CPT has been compared separately. Price undercutting for each type and thereafter weighted average for CPT as a whole has been determined. The analysis shows as follows –

 

Undercutting table

 

Average of all types

 

Price undercutting

Volume

Rs/Pc.

Chungwa-Malaysia

***

(7.79)

Samsung, Malaysia

***

(58.55)

LPD, Korea

***

(157.25)

Beijing Matsushita

***

12.03

IRICO Group-China

***

14.85

IRICO Display-China

***

165.07

Samsung, China

***

(390.34)

Thomson

***

(47)

Responding Exporters

***

(65.79)

Thailand

***

(20.63)

 

105.       The Authority notes that the price undercutting is negative. However, it has been claimed by the domestic industry that in view of the typical market conditions for this product, the Indian Producers are bound to link / fix their prices on the basis of import prices. For this purpose, Indian Producers have provided their pricing formula in respect of some of the major customers in India. These pricing formulae clearly provide for fixation of prices on import parity basis or linkage thereof. Further, the Authority notes that the Rules require the Authority to examine “whether there has been a significant price under cutting by the dumped imports as compared with the price of like product 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”. The Authority thus notes that in a situation where the price undercutting is negative, the Designated Authority is required to consider whether the imports are depressing the prices of the domestic industry to a significant degree. As noted in the para below, the performance of the domestic industry clearly shows that the imports were depressing the prices of the domestic industry in the market.

 

106.       The domestic industry has further argued that 4% special additional duty was payable on imports, which was cenvatable against sales tax payable by the consumers on their sales. However, sales tax payable by the domestic industry was not cenvatable. Since the consumers decide their prices on the basis of landed cost to them, this 4% additional costs to the domestic industry is resulting in lower net sales realization to the domestic industry vis-à-vis imports.

 

107.       The Authority notes that wherever the domestic industry is selling identical models, the prices of the exporters and Indian Producers are quite comparable. Wherever the domestic industry is not selling significantly high volume of a particular model, the price difference between the domestic and import product is much higher (the imports are expensive). It is also noted that import prices of size 29” are higher than those of the domestic industry. Domestic industry stated that their prices of 29” were lower than imports in view of the fact that some of the exporters were selling to their related importers and therefore the importers were giving price preference to their related exporter. Additionally, in so far as 29” is concerned, since the domestic industry has started offering its product only from 2006, the consumers were willing to pay a price lower than imports, considering that the domestic industry had introduced new type. Domestic industry further argued that the relevant consideration under the Rules is whether the prices of the domestic industry are getting benchmarked by the imports. So long as the imports were the primary factor for the benchmark pricing being resorted to by the domestic industry, it should be held that the reasons for decline in prices was imports and these imports have forced the domestic industry to sell at prices below associated cost of production.

 

108.       The domestic industry has also pointed out that the followings are relevant parameters for fixation of prices –

 

a.       The price at which the consumers have placed orders for supply of material is their starting basis for price fixation.

 

b.      A number of customers whose affiliates are producing the subject goods outside India clearly require a price lower than the prices quoted by their affiliates. If prices are comparable, these customers prefer to buy from their related foreign supplier.

 

c.       Whereas the prices for the domestic industry immediately become effective, the supplies of the exporters come much later.

 

d.      Whereas the domestic industry has credit period of 0-20 days, exporters have given credit as high as 90/225 days. A credit of 90 days @ 12% interest rates has about 2% price impact.

 

e.       Exporters have to carry much higher inventory carrying cost as compared to domestic industry. Inventory carrying cost is built in the prices.

 

109.       In view of the above, the Authority hold that selling price of the domestic industry have declined over the period, reasons for which is decline in the landed price of imports.

 

Price suppression and depression effects of the dumped imports:

 

110.       In order to examine whether the imports were depressing or suppressing the prices of the domestic industry, the Authority has examined the trends in raw material costs and selling price. The relevant position is as follows –

 

 

2004-05

2005-06

2006-07

POI

Raw materials costs

 

 

 

 

14 complete tube

***

***

***

***

Index

100

74

72

73

15"

 

 

***

***

Index

 

 

100

107

20" conventional

***

***

***

***

Index

100

83

82

81

21" conventional

***

***

***

***

Index

100

88

85

85

21" flat

***

***

***

***

Index

100

74

65

65

29" flat

 

 

***

***

Index

 

 

100

105

Selling price

 

 

 

 

14 complete tube

***

***

***

***

Index

100

85

74

70

15"

 

 

***

***

Index

 

 

100

91

20" conventional

***

***

***

***

Index

100

84

76

74

21" conventional

***

***

***

***

Index

100

82

73

72

21" flat

***

***

***

***

Index

100

78

62

60

29” flat

 

 

***

***

Index

 

 

100

95

Landed price of

Imports

 

 

 

 

14 complete tube

***

***

***

***

Index

100

84

72

65

 

 

 

 

 

15"

***

***

***

***

Index

100

86

79

76

20" conventional

***

***

***

***

Index

100

83

79

75

21" conventional

***

***

***

***

Index

100

83

69

66

21" flat

***

***

***

***

Index

100

77

64

61

29" flat

***

***

***

***

Index

100

82

77

75

 

111.       The selling prices of the domestic industry have declined in the same direction and to the same extent as that of landed price of imports. The price declines have been significant forcing the domestic industry in selling the product significantly below the cost of production during the proposed investigation period.

 

112.       Considering the above, the Authority proposed to hold that there has been a significant increase in the dumped imports, both in absolute terms and relative to production and consumption in India. With regard to the effect of the dumped imports on prices, the Authority notes that there has been significant decline in the landed price of imports. As a direct consequence, the selling price of the domestic industry declined significantly over the injury period. Even though there were declines in raw materials costs, the declines in the selling prices were far more than declines in the raw materials costs. The imports thus forced the domestic industry to reduce the prices. Such price declines were significant and material.

 

EXAMINATION OF OTHER INJURY PARAMETERS

 

113.       After having examined the effect of dumped imports on the volumes and prices of the domestic industry and injury indicators like volume and value of imports, capacity, output, capacity utilization and sales of the domestic industry as well as demand pattern with market shares of various segments in the earlier section, other economic parameters which could indicate existence of injury to the domestic industry have been analyzed hereunder. 

 

PROFITS                                                                                                                        

 

2004-05

2005-06

2006-07

POI

Average cost of sales (Rs/Pc)

***

***

***

***

Index

100

87

85

84

Average selling price  (Rs/Pc)

***

***

***

***

Index

100

85

73

69

Profit & Loss per pc (Rs/Pc )

***

***

(-***)

(-***)

Index

100

68

(-80)

(-123)

Total profit/ loss from

domestic sales (Rs Lacs)

***

***

(***)

(***)

Index

100

75

(137)

(222)

 

114.       It is seen that profitability of the domestic industry has severely declined over the years. Not that the domestic industry was having good profitability earlier (imports have been competing with the domestic industry for past several years). However, situation has significantly deteriorated over the injury period, when the domestic industry’s profitability steeply declined due to dumped import form the subject countries. Resultantly, the domestic industry faced significant financial losses. 

 

115.       It was argued by some of the interested parties that the performance of the domestic industry deteriorated due to other factors and not due to dumped imports. It has been claimed that JCT was BIFR company even before and the company has been forced to suspend production at its Mohali plant due to other factors not related to dumping. With regard to Samtel, it has been argued that the company has faced significant losses primarily due to cost overrun and commercialization of new production line. Considering the arguments of these interested parties, the Authority therefore examined impact of these other factors. It was noted in case of Samtel that the company made a profits of  Rs***lacs in 2004-05, whereas its financial loss in the POI was Rs ***lacs. The Authority notes that even when profit before tax may decline due to incidence of higher interest & depreciation expenses, profit before interest & depreciation would be unaffected by cost and time overrun. Therefore, the Authority ascertained profit before interest & depreciation for the company. The factual position is as follows.

                                                                                                                        Rs. In lacs

Particulars

2004-05

2005-06

2006-07

POI

Profit before tax

6296.61

4716.11

(8642.41)

(13993.6)

Index

100

75

(137)

(222)

Interest

2917.9

3281.6

4996.62

5880.54

Index

100

112

171

202

Depreciation

3840.0

4401.0

5948.0

5696.0

Index

100

115

155

148

Total of interest & depreciation

6757.90

7682.6

10944.62

11576.54

Increase in interest & depreciation

(as compared to 2004-05)

 

924.7

3262.02

631.92

Profit before interest & depreciation

***

***

***

(***)

Index

100

95

18

(19)

Decline in profit before interest

& depreciation (as compared to

2004-05)

 

***

***

***

 

116.       It is seen from the above that even if interest & depreciation costs of the company would have been same as in the base year, its profits would have significantly declined. It is also seen from the above that profit before interest & depreciation showed a marked decline over the injury period (which could not have been affected due to cost overrun or higher incidence of costs due to new plant).

 

117.       In order to further examine the profitability of the domestic industry and impact of dumping on the domestic industry, the Authority examined contribution margin over the injury period. Contribution margin for the purpose has been considered as the difference between selling price and costs on account of raw material. The relevant information shows as follows –

                                                                                                                  Rs/Pc

 

2004-05

2005-06

2006-07

POI

Raw materials costs

 

 

 

 

14 complete tube

***

***

***

***

Index

100

74

72

73

15"

 

 

***

***

Index

 

 

100

107

20" conventional

***

***

***

***

Index

100

84

76

74

21" conventional

***

***

***

***

Index

100

82

73

72

21" flat

***

***

***

***

Index

100

78

62

60

29" flat

 

 

***

***

Index

 

 

100

95

Selling price

 

 

 

 

14 complete tube

***

***

***

***

Index

100

85

74

70

15"

 

 

***

***

Index

 

 

100

91

20" conventional

***

***

***

***

Index

100

84

76

74

21" conventional

***

***

***

***

Index

100

82

73

72

21" flat

***

***

***

***

Index

100

78

62

60

29" flat

 

 

***

***

Index

 

 

100

95

Contribution

 

 

 

 

14 complete tube

***

***

***

***

Index

100

108

78

64

15"

 

 

***

***

Index

 

 

100

55

20" conventional

***

***

***

***

Index

100

87

63

60

21" conventional

***

***

***

***

Index

100

70

50

46

21" flat

***

***

***

***

Index

100

89

51

44

29" flat

 

 

***

***

Index

 

 

100

57

Sales volumes domestic

 

 

000’Pcs

14 complete tube

***

***

***

***

Index

100

108

195

234

15”

 

 

***

***

Index

 

 

100

357

20” conventional

***

***

***

***

Index

100

89

107

95

21” conventional

***

***

***

***

Index

100

77

91

87

21” flat

***

***

***

***

Index