No. 29/1/2001-DGAD - The Government of India having regard to the Customs Tariff Act, 1975 as amended in 1995 and the Customs Tariff (Identification, Assessment and Collection of Anti Dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995, thereof;

1. M/s. Reliance Spinning Mills Ltd., Distt. Sunsori, Nepal.
2. M/s. Reliance Spinning Mills Ltd., Kathmandu, Nepal.

1. M/s. Kaur Sain Traders, Ludhiana.
2. M/s. Goyal Agencies, Delhi.

3. The petitioners have made the following major points in their submissions:

4. The exporters have expressed following views in their response:

1. Under Indo-Nepal Treaty import of goods are to be allowed free of customs duty in India. Anti-dumping duty imposed under Section 9A of the Customs Tariff Act, 1975 has been held to be a Customs duty by the Hon’ble Supreme Court in the case of Hyderabad Industries Ltd. v Union of India. Therefore, no duty can be imposed on exports from Nepal;
2. The petitioners do not have the required standing as they do not represent even 25% of domestic Indian manufacturers of Acrylic Yarn. In the absence of standing, the initiation is bad in law and investigations should be terminated.
3. The net availability of Acrylic Fibre during the investigation period was 1,15,299.6 MT taking yarn realization from Fibre as 98%, the Acrylic Yarn production in India would therefore be 112, 993.6 MT. As against this, the production of the petitioners is only 19,883.2 MT and the share of the petitioners is thus only 17.59% and not 54% as claimed. The figure of 36.55 million kg production of Acrylic Yarn given in the petition is grossly understated. The Ludhiana Spinners Association is an interested party in the proceedings and therefore information may be collected from authentic sources;
4. There are factual errors in the petition as under:-
1. Their exports of Acrylic Yarn to India has been under the heading 55.09 and the petitioners statement that exports are taking place under different sub-heads of Chapter 54 and 55 is incorrect. The statement that the exporters of Nepal are misdeclaring the goods is totally false. In the petition no information has been given regarding the imports of Acrylic Yarn. The data provided in respect of other materials therefore does not indicate the volume or value of the exports of Acrylic Yarn from Nepal.
2. The statement that no other type of yarn is produced in Nepal is incorrect as there are number of manufacturers of polyester spun yarn/polyeter texturised yarn in Nepal, who, also export to India.
3. It is not correct to say that no customs duty are chargeable on the imports from Nepal, as additional duty (CVD) is collected on the imports from Nepal.
4. The spindle capacity of 21 million kgs in Nepal is highly exaggerated. It is incorrect to say that no viable substitute is there for Acrylic Yarn. Acrylic Yarn has been substituted mainly by Polypropylene Yarn and other types of yarn. Since the imposition of anti-dumping duty on Acrylic Fibre from Thailand, Korea and USA the cost of raw material in India has become very high. The Indian industry is deprived of a cheap source of raw material and as a consequence has become uncompetitive in the international market.
5. Due to emergence of viable substitutes there has been a contraction in the overall demand for Acrylic Yarn. It is incorrect to say that the production of petitioners has declined since the production has actually increased during the period of investigation.
6. It is incorrect to say that the cost of production in Nepal cannot be lower than the cost of production in India. The exporter in Nepal has access to cheap Acrylic Fibre available from Thailand. Therefore, the cost of manufacture in Nepal is at least Rs.15 to Rs.20 less than in India. The estimation of normal value by the petitioners is therefore wrong.
7. It is incorrect to state that the export price should be reduced by the amount of freight from the factory in Nepal to the destination of a customer in India. The freight amount to be deducted is only the freight up to the Indian border at Jogbani. No commission is paid to any agent and the goods are directly sold to traders in India.
8. The calculation of the anti-dumping margin in the petition is absolutely incorrect as both the normal value and export price calculations are erroneous.
9. The claim that petitioners have suffered injury is incorrect as their share in production has doubled during the period of investigation.
10. It is incorrect to say that the cost of production of the domestic industry has increased significantly as there has been no serious increase in the prices of raw material internationally during the period of investigation. The increase in the cost of the domestic industry is on account of imposition of duty and the consequent competitive advantage available to the exporter cannot be termed as dumping. This is a legitimate advantage available to them and therefore there is no basis for alleged dumping.
11. In the calculation of fair selling price the petitioners have shown 10% profit margin which is very high as compared to the industry level. The cost of production of the domestic industry is high on account of duty on fibre and also the petitioners operate inefficiently and are burdened with high financial cost. It is not correct to say that landed value of subject goods is below the cost of production of the petitioners.
12. There is a total absence of causal link between the exports from Nepal and injury, if any, to domestic industry. The injury, if any, is as a result of contraction in overall demand and the anti-dumping duty imposed on Acrylic Fibre.

 

5. There is total absence of dumping in this case. As per the exporters, they do not have the resources to incur losses in exports to their only market which is India. They have not made any sales of Acrylic grey yarn in Nepal. Therefore, the domestic prices of grey yarn are not available.
6. There is a total absence of injury to the petitioner as it is evident that the production of the petitioners has increased during the period of investigation. There has been no price under-cutting in this case. The petitioners have shown very high cost of production which is inflated on account of high unit price of fibre, high interest cost, less number of man-hours per year and low productivity. Injury, if any, is not on account of the exports from Nepal.
7. There is no causal link between the exports and the injury if any to domestic industry. The Designated Authority is requested to examine any known factors other than the dumped imports which might be injuring the domestic industry.
8. The main cause for the injury to the Indian industry is the impact of anti-dumping duty on Acrylic Fibre. These duties have effectively deprived the Indian manufacturers access to cheap Acrylic Fibre. This has reduced the competitiveness of the Indian manufacturers.

5. The submissions made and the information provided by the exporters, importers and the domestic industry have been examined and considered while arriving at these findings and wherever appropriate have been dealt hereinafter. The Authority observed that the exporter has given information in respect of the questionnaire selectively. In the initial response the exporter chose not to give information on domestic sales in Appendix-I. Similarly, information about domestic market sales for current year and preceding two years as required in Appendix-3 was not given. The information about export sales data for preceding two years was also not given for April-March period for proper comparison and instead data was given for 17^th July to 16^th July period. Sales price structure for domestic sales (Appendix-5), factory cost and profit of domestic sales (Appendix-9) were not furnished. On being asked to clarify about information on domestic sales, the exporter gave information about domestic sales transactions on Appendix-1, however, other information as above has not been given. Therefore, the exporter gave selective information and did not make a complete response. The shortcomings in the response have also been dealt with in the findings wherever considered appropriate.

 6. The cases of new exporters or those stated to be willing to give price undertaking shall be considered, on request, by the Authority in accordance with the Rules supra.

8. The petitioners have claimed that the goods produced by them are like articles to the goods produced, originating in or exported from Nepal. The exporters had not raised any point on this issue in their initial response and had given selective information. However, when they were asked to clarify on the issue of domestic sales, they raised the point that grey and dyed Acrylic Yarn should be considered as separate products as they are not technically and commercially interchangeable. While doing so the exporters gave details of domestic sales of Acrylic dyed yarn as required under Appendix-1 of questionnaire. The Authority has examined the views expressed by the exporters as regards like article. The product involved in the present investigation is Acrylic Yarn as mentioned in the para 2 of the initiation notification dated 3.7.2001. Acrylic Dyed Yarn had not been excluded from the purview of the present investigation. The information regarding exports made by the exporter during the period of investigation also includes exports of Acrylic Dyed Yarn. The Authority considers that Acrylic Grey Yarn and Acrylic Dyed Yarn are technically same product except that grey yarn when dyed becomes dyed yarn. These are mutually substitutable. The Authority did not agree to the contention of the exporter to exclude Acrylic Dyed Yarn from the present investigation and therefore for the purpose of investigation, the goods produced by the petitioners are being treated as ‘like articles’ of the product involved, i.e. Acrylic Yarn imported from the subject country within the meaning of the Rules supra.

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

1. The comparable price, in the ordinary course of trade, for the like article when meant for consumption in the exporting country or territory as determined in accordance with the rules made under sub-section(6); or
2. when there are no sales of the like article in the ordinary course of trade in the domestic market of the exporting country or territory, or when because of the particular market situation or low volume of the sales in the domestic market of the exporting country or territory, such sales do not permit a proper comparison, the normal value shall be either -

1. comparable representative price of the like article when exported from the exporting country or territory or an appropriate third country as determined in accordance with the rules made under sub-section (6); or
2. the cost of production of the said article in the country of origin along with reasonable addition for administrative, selling and general costs, and for profits, as determined in accordance with the rules made under sub-section (6);

12. Article 2.2 of the WTO Agreement on Anti-Dumping is relevant here. An explanation to the term ‘low volume of sales in the domestic market‘ has been provided as a footnote stating that "sales of the like product destined for consumption in the domestic market of the exporting country shall normally be considered a sufficient quantity for the determination of the normal value if such sales constitute 5% or more of the sales of the product under consideration to the importing member, provided that a lower ratio should be acceptable where the evidence demonstrates that domestic sales at such lower ratio are nonetheless of sufficient magnitude to provide for a proper comparison". The domestic sales of Acrylic Dyed Yarn constitute only 2.3% of the exports made by the exporter in this case. Therefore, these domestic sales are not treated as sufficient to provide for a proper comparison. As per the information furnished there are no exports made by the exporter to any other country. Therefore, section 9A(1)(c)(ii)(a) for determination of normal value on the basis of comparable representative price of the product when exported to a third country, is also not applicable in this case.

13. Therefore, for determination of normal value section 9A(1)(c)(ii)(b) becomes applicable, i.e. the normal value is to be determined on the basis of the cost of production of the said article in the country of origin along with reasonable addition for administrative, selling and general costs, and for profits, as determined in accordance with the rules made under sub-section (6). In accordance to Rule 10 and Principle 1 of the Annexure -1 of the Customs Tariff (Identification, Assessment and Collection of Anti Dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995, the element of costs referred to in the context of determination of normal value shall normally be determined on the basis of records kept by the exporter or producer under investigation, provided such records are in accordance with the Generally Accepted Accounting Principles of the exporting country, and such records reasonably reflect the cost associated with production and sales of the article under consideration. The period of investigation in this case is from 1^st April, 2000 to 31^st March, 2001. The exporter had sought extension of time for submission of response on various grounds and one of the grounds was that in Nepal the financial year is as per Hindu calendar starting from 17^th July, which is different from the POI and therefore they had to prepare the information keeping in view the investigation period. The Authority had allowed one-week extension for submission of reply. Even after this extension the exporter has not furnished complete information for the period of investigation. The financial information furnished by the exporter is incomplete as the balance sheet and profit and loss account for the period 16^th July 2000 to 13^th April, 2001 has been furnished which does not serve the requirement of proper verification of costing information for the product under consideration for the investigation period. The information on the factory cost and profit of domestic sales on the prescribed format has not been furnished. Sales price structure for domestic sales has also not been furnished. Therefore, the Authority disregards the costing information furnished. The claims made by the exporter in relation to various aspects of cost determination like cost of raw material, accounting of interest and financial expenses, allocation of costs per frame, dyeing and chemicals cost, etc. are subject to verification on receipt of complete information.

14. For the Preliminary determination the Authority therefore, determines the normal value on the basis of best available information. While doing so the Authority has considered the information furnished by the exporter as regards the cost of the raw material , i.e. Acrylic Fibre. The exporter had produced evidence of CIF Calcutta Price of the raw material Acrylic Fibre. However, the Authority has added Rs.*** towards freight and border clearance charges for the raw material till it reaches the factory of the exporter. The cost of production, selling, general and administrative expenses have been determined on the basis of best available information. According to the available information the normal value determined by the Authority for the product under consideration is Rs.***/Kg. US $***Kg. pending final determination.

15. M/s. Reliance Spinning Mills Ltd., Distt. Sunsori, Nepal has furnished information regarding their exports to India during the period of investigation. There are five consignments of exports of Acrylic Dyed Yarn in the statement of exports furnished and the remaining consignments relate to export of Acrylic 100% Grey Yarn. On the basis of the available information regarding dyeing cost, necessary adjustments have been made in the FOB value of exports. After making these adjustments the weighted average FOB export price of Acrylic Yarn to India works out to Rs.*** US $***per Kg. The exporter has shown adjustments of Rs.*** US $*** from the assessable value of export price on account of inland freight (up to Jogbani), insurance, certificate of origin, export duty, handling and forwarding. The exporter has claimed that freight from the Nepal border to the destination in Ludhiana is borne by the importers and the export invoices do not include this freight amount. The Authority finds that the export invoices do not show any terms of delivery i.e., FOB or CIF. As per the Bills of Entry furnished, assessable value is arrived at by adding amounts on account of freight(factory to Nepal border), insurance, certificate of origin charges, loading charges and Nepalese customs charges. As these charges are incurred up to the point of goods reaching the Nepal border and as the importer pays for the amount as per the export invoice only, it is considered appropriate to make adjustments on these accounts from the invoice value. Therefore, an adjustment of RS.*** US$***/Kg. has been made on these accounts from the weighted average export price. After making these adjustments the net export price has been worked out as Rs.***US $*** per Kg. for the period of investigation.

16. The principles governing the determination of normal value, export price and the dumping margin as laid down in the Custom Tariff Act and the Anti Dumping Rules are elaborated in Annexure I to the Rules. For the purpose of the fair comparison between the normal value and export price, the Authority has made calculations and comparisons at the same level of trade. Normal Value based on the constructed cost of production at ex-factory level has been compared with the weighted average export price. While doing so due allowance has been made for dyeing costs.

17. The normal value based on the constructed cost of production works out to Rs.*** per Kg. US$ ***/Kg. The net export price at ex-factory level worked out as above after making adjustments comes to Rs.*** /Kg Us$***/Kg. The dumping margin in respect of the exports of the subject goods by M/s Reliance Spinning Mills Ltd., Nepal comes to 45.9 % of the export price.

 18. Rule 11 of Anti Dumping Rules reads as follows:

1. In the case of imports from specified countries, the designated authority shall record a further finding that import of such article into India causes or threatens material injury to any established industry or materially retards the establishment of any industry in India;
2. The designated authority shall determine the injury to domestic industry , threat of injury to domestic industry, material retardation to establishment of domestic industry and a causal link between dumped imports and injury , taking into account all relevant facts, including the volume of dumped imports, their effect on price in the domestic market for like articles and the consequent effect of such imports on domestic producers of such articles and in accordance with the principles set out in Annexure II to these rules."

1. A determination of injury shall involve 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 like article and (b) the consequent impact of these imports on domestic producers of such products.
2. While examining the volume of dumped imports, the said Authority shall consider whether there has been a significant increase in the dumped imports, either in absolute terms or relative to production or consumption in India. With regard to the effect of the 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 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.

19. The Authority has examined the information regarding volume of imports during the period of investigation and the two preceding years, i.e. 1998-99 and 1999-2000. The Authority found that there is lot of variance in the volume of imports relating to these years as shown in various sources, viz., Directorate General of Commercial Intelligence & Statistics (DGCIS), the petitioners, the exporters, the importers and the Indian Embassy in Nepal. The DGCIS, in response to the initiation notification, sent data showing imports of Acrylic Yarn from Nepal under ITC Classification 5402.39/69, 5590.61/62/69 as 3436 MTs in 1999-2000 and 1165 MTs during (April 2000 – February 2001). Considering the wide variance in the import volumes of different sources, the Authority considers it appropriate to compare the trend of increasing imports on the basis of the information furnished by the exporters and importers. The information relating to preceding two years exports furnished by the exporter could not be useful as the exporters gave this information with reference to the Nepalese financial year, i.e. from 17^th July to 16^th July, whereas, the POI was 1^st April, 2000 to 31^st March, 2001. This did not allow a proper comparison. Based on the information furnished by the two importers, the imports grew from 4790 MT in 1998-99 to 7481 MT in 1999-2000 registering an increase of 56% and from 7481 MT in 1999-2000 to 9572 MT in 2000-01 an increase of 27%. The Authority finds that the volume of imports from Nepal have increased significantly during the last three years. The increase in the imports of the product involved during the period of investigation has been in absolute terms. There has also been a significant increase in imports in relation to the demand of the product in India from 6.53% in 1998-99 to 12.8% in 2000-2001.

20. In considering the effect of the dumped imports on prices, it is considered necessary to examine whether there has been a significant price undercutting by the dumped imports as compared with the price of the like product in India, or whether the effect of such imports is otherwise to depress prices to a significant degree. The Authority finds that dumped imports from Nepal and more particularly from the exporter who has responded to the questionnaire, have increased significantly. During the period of investigation the imports grew by 27% over the previous year. Their share in the Indian demand for the product also grew from 6.53% in 1998-99 to 12.8% in 2000-01 which poses a serious threat of injury to the domestic industry.

21. The price under-cutting of imports have caused a significant depressing effect on the price of the domestic industry. The domestic industry has not been able to realize a fair selling price. During the period of investigation the average Net sales realization of the domestic industry for the product involved has been Rs.***/Kg. whereas the average landed value of imported product has been Rs.***/Kg. This clearly signifies price under-cutting.

22. The evidence of price under cutting demonstrates that the domestic industry has suffered material injury. The industry has not been able to realise a fair selling price on its production of the subject goods so as to recover its costs as well as to earn a reasonable profit.

23. Under Rule 11 supra, Annexure II, when a finding of injury is arrived at, such finding shall involve determination of the injury to the domestic industry, "…….taking into account all relevant facts, including the volume of dumped imports, their effect on prices in the domestic market for like articles and the consequent effect of such imports on domestic producers of such articles……". Further to above, regarding threat of injury, para (vii) of Annexure II of Rules supra, reads as under:-

24. The continuous dumped imports in large quantities has led to price suppression and the domestic industry has not been able to raise its price to the extent required to recover its cost and earn a reasonable profit. The volume of dumped imports has been significant during the period of investigation and the preceding year. There is every likelihood that imports may keep coming at dumped price in larger quantities causing serious threat of injury to the domestic industry. On the basis of the evidence available before it, the Authority therefore concludes that there is a serious threat of injury being caused to the domestic industry on account of dumped imports of subject goods from subject country.

25. As regards the impact of the dumped imports on the domestic industry the principle (iv) of Annexure-II of the Anti-Dumping Rules states:

26. It is the argument of the exporter that the cost of production as indicated by the petitioners is highly inflated on account of the high unit price of the fibre, high interest cost, less number of man-hours per year and low productivity. Injury, if any is not on account of the exports from Nepal. Further the fair selling price calculation as given on the petition is inaccurate and includes a number of hidden costs. The fair selling price should be determined after removing the impact of anti-dumping duty on fibre and the low efficiency of the petitioners. According to the exporters there is no dumping or injury and there is no causal link between the exports and the injury if any to domestic industry. The main cause for the injury to the domestic industry is the impact of anti-dumping duty on acrylic fibre. These duties have effectively deprived the Indian manufacturers of access to cheap acrylic fibre.

27. The petitioners have stated that cost of production in Nepal could not be different than the cost of production in India, subject to the difference in raw material costs due to the custom duties payable in India. As per own admission of the exporters producers in Nepal have cost advantage of at least Rs.15-20 per KG. As per the petitioners even by giving a benefit of RS. 17.50 (average of the claim of exporter) the exports by the Nepalese producers are at a price much lower than this difference of Rs. 17.50/ Kg. The petitioners argument is that the exporters in Nepal did not recover their cost of production and that there is suppression of vital information filed by the exporters.

 Examination and Findings of the Authority

28. For the examination of the impact on the domestic industry in India, the Authority considered such further indices having a bearing on the state of industry as production, sales, market share, profitability, net sales realisation etc. All the economic parameters affecting the domestic industry mentioned above have been examined. The production of the four petitioners has been 20309 MTs in 1998-99, 22300 MTs in 1999-2000 and 22594 MTs during POI (April – March, 2001). There has been a slight increase in the total production. However, their share in the market has come down from 32.7 % in 1999-2000 to 30% in period of investigation(POI) due to increase in imports in absolute terms, whereas, the share of the imports from subject country increased from 6.5% in 1998-99 to 12.8% during the period of investigation. There was an increase in imports from subject country in absolute terms by 27% during POI. The cost of production of the domestic industry has gone up from Rs.***/ kg. to Rs.***/kg. during POI. The net sales realization has been Rs.***/Kg. during 1999-2000 and Rs.***/Kg. during POI. The net sales realization is found to be lower than the cost of production signifying suffering of losses on account of production and sale of the product involved. There is an evidence of significant price under-cutting as the landed value of the product involved is less than the net sales realization. The domestic industry has also suffered due to price suppression as the landed value of the imported product is significantly below the cost of production of the domestic industry causing price suppression and thereby preventing the domestic industry to raise its price to a level to earn reasonable profits.

29. The Authority finds that the production of the domestic industry has stagnated in the face of significant increase in the imports from the subject country. As the domestic industry was not able to realize a fair selling price to recover its cost of production and a reasonable profit the industry was prevented from augmenting its production. A slight growth in the volume of production of the domestic industry does not signify that there is an absence of injury. Rather the industry has been forced to produce below its optimum capacity. The average net sales realization of the industry are less than the cost of production of the product thereby causing severe injury to the industry. Due to the dumped imports the industry has been prevented from increasing its selling price to a level to recover the cost of production and to give a fair return on the investment. The injury on account of the non-realisation of a fair selling price has been the most severe affecting the profitability of the domestic industry.

30. In determining whether injury to the domestic industry was caused by the dumped import, the Authority has taken into account the factor that it is the increased dumped imports of subject goods at dumped prices in Indian market which has forced the domestic industry to reduce its prices to the levels not sufficient to recover the non injurious price. Therefore, the causal link between the dumped imports of subject goods from subject country and threat of injury being faced by the domestic industry is clear. The Authority therefore concludes that there is a causal link between the dumping of subject goods from the subject country and threat of injury being caused to the domestic industry during the period of investigation.

31. It has been argued by the exporters that the main cause for the injury to the domestic industry is the impact of anti-dumping duty on acrylic fibre. These duties have effectively deprived the Indian manufacturers of access to cheap acrylic fibre. The exporter has also attributed the injury to the domestic industry due to a contraction in overall demand for Acrylic Yarn.

32. The Authority has examined these arguments. While determining the Normal value the Authority has taken into account the fact that import of Acrylic Fibre in Nepal do not attract anti-dumping duty, whereas in India, imports of Acrylic Fibre from specified countries and exporters attract anti-dumping duty. Even while doing so the Authority has found dumping in import of subject product from the subject country. As regards the argument of the exporters that the injury to the domestic industry is due to contraction in overall demand of Acrylic yarn, the authority has found, pending final determination, that demand of Acrylic yarn in India has increased during the period of investigation. However, the share of the domestic industry reduced whereas, the share of the exporter grew from 6.5% in 1998-99 to 12.82% in the POI.

33. As per the exporter anti-dumping duty cannot be imposed on imports from Nepal as India and Nepal have entered into an agreement of co-operation in matters of trade and transit. As per clause 5 of the Treaty, Indian Government has to provide access to the Indian market free of customs duty for articles manufactured in Nepal. According to the exporter, anti-dumping duty levied under Section 9(A) of the Customs Tariff Act, 1975, is a duty and therefore cannot be levied under the Indo-Nepal Treaty. As per the Indo-Nepal Treaty document of 1996, the Article V states that "The Government of India will provide access to the Indian market free of customs duties and the quantitative restrictions for all articles manufactured in Nepal." The certificate of origin annexed to the said Article V makes the issue clear as the title of the certificate of origin states "For exports free of Basic and Auxiliary duties under the treaty of trade between His Majesty’s Government of Nepal and Government of India". Therefore, the treaty refers to the exemption from levy of Basic and Auxiliary Duties and not all types of customs duties. By the own admission of the exporter, Additional custom duty (commonly known as CVD) is charged under Section 3 of the Customs Tariff Act on the imports from Nepal. The exporter has cited the case of Hyderabad Industries Ltd. v. Union of India wherein the Hon’ble Supreme Court has made observations regarding the different types of customs duty under the different Acts or Rules. Among the various kinds of duties mentioned in the said orders of the Hon’ble court, Additional custom duty chargeable under Section 3(3) of the Customs tariff Act is also included. In case the argument of the exporter is that no custom duty is chargeable on the imports from Nepal, then by their own admission Additional Custom duty under Section 3 of the Custom Act is charged on the imports from Nepal. Therefore, even if assuming that Anti dumping duty is a kind of custom duty, the same is chargeable on the imports from Nepal as the Indo-Nepal treaty does not give a blanket immunity from imposition of any kind of custom duty (or more specifically anti-dumping duty) on imports from Nepal. In another case relating to anti-dumping investigations into imports of Zinc Oxide from Nepal into India, the Designated Authority had recommended imposition of anti-dumping duties to the central government vide Notification No. 7/1/2001-DGAD dated 6^th August 2001. Ministry of Finance has since implemented the recommendation by issuing Customs notification 93/2001 dated 12^th September 2001 imposing anti dumping duty on imports of Zinc Oxide from Nepal. Therefore, the Authority does not find the contention of the exporter acceptable on this account.

As no other exporter/producer has provided information, the Authority proposes to adopt the Normal Value as determined in respect of M/s Reliance Spinning Mills Ltd. The Normal value for the subject goods is considered as Rs.***/Kg/ or US$***/Kg.

The Authority proposes to adopt the lowest export price from the information submitted to it for arriving at the export price in respect of other exporters/producers. After making the adjustments on account of inland freight (up to Jogbani), insurance, certificate of origin, export duty, handling and forwarding to an extent of Rs.***/Kg.US$***/KG. the ex-factory export price comes to Rs.***/Kg. or US$***/kg.

The dumping margin in respect of the other exporters/ producers who have not given information comes to 61.76%.

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

38. The Authority recognises that the imposition of anti dumping duties might affect the price levels of the products manufactured using Acrylic yarn and consequently might have some influence on relative competitiveness of these products. However, fair competition on the Indian market will not be reduced by the anti dumping measures. On the contrary, imposition of anti dumping measures would remove the unfair advantages gained by dumping practices, would prevent the decline of the domestic industry and help maintain availability of wider choice to the consumers of subject goods. The Authority notes that the imposition of anti dumping measures would not restrict imports from Nepal in any way, and therefore, would not affect the availability of the product to the consumers. The consumers could still maintain two or even more sources of supply.

39. The Landed Value has been determined for the subject goods after adding on the weighted CIF export price, the applicable level of custom duty(except duties levied under Section 3, 3A,8B,9,9A) and one percent towards landing charges for the purposes of preliminary determination pending final findings.

40. The Authority has, after considering the foregoing, come to the conclusion that:

1. Acrylic yarn has been exported to India from Nepal below its normal value;
2. the Indian industry has suffered material injury and is being threatened with further injury;
3. the injury has been caused by the dumped imports from Nepal.

42. Accordingly, the Authority recommends that provisional anti dumping duties as set out below be imposed from the date of notification to be issued in this regard by the Central Government on all imports of Acrylic Yarn falling under Customs Heading 5402 and 5509 originating in and/or exported from Nepal pending final determination. The anti dumping duties shall be as follows:-

43. The following procedure would be followed subsequent to notifying the preliminary findings:-

1. The Authority invites comments on these findings from all interested parties and the same would be considered in the final findings;
2. Exporters, producers, importers, petitioner and other interested parties known to be concerned are being addressed separately by the Authority, who may make known their views, within forty days from the date of despatch of the letter. Any other interested party may also make known its views within forty days from the date of publication of these findings;
3. The authority would provide opportunity to all the interested parties for making oral submissions, which have to be rendered thereafter in writing. The date and time for the oral hearing shall be communicated to all known interested parties subsequently;
4. The Authority would conduct further verifications to the extent deemed necessary;
5. The Authority would disclose essential facts before announcing the final findings.

Designated Authority