ADD on imports of Cellophane Transparent Film exported From China PR

REGD. No. D. L.-33004/99 The Gazette of India CG-DL-E-12082024-256282 EXTRAORDINARY PART I-Section 1 PUBLISHED BY AUTHORITY No. 205] NEW DELHI, TUESDAY, AUGUST 6, 2024/ SHRAVANA 15, 1946 4956 GI/2024 MINISTRY OF COMMERCE AND INDUSTRY (Department Of Commerce) DIRECTORATE GENERAL OF TRADE REMEDIES NOTIFICATION New Delhi, the 6 th August, 2024 FINAL FINDINGS Case No. AD-OI-17/2023 Subject: Initiation of anti-dumping investigation concerning imports of 'Glufosinate and its salt' from China PR. F. No. 06/18/2023 - DGTR.- A BACKGROUND OF THE CASE 1. M/s Kesoram Rayon, a unit of Cygnet Industries Ltd. (hereinafter referred to as the "applicant" or the "petitioner") filed an application, in the form and manner prescribed before the Designated Authority (hereinafter also referred to as the "Authority") in accordance with the Customs Tariff Act, 1975 and the Anti- Dumping Rules, for initiation of an anti-dumping investigation and imposition of anti-dumping duty on imports of "Cellophane Transparent Film" (hereinafter also referred to as the "CTF" or "subject goods" or the "product under consideration") originating in or exported from China PR (hereinafter also referred to as the "subject country"). 2. The Authority had earlier conducted an anti-dumping investigation concerning imports of "Cellophane Transparent Film" originating in or exported from China PR which was initiated vide Notification no. 14/7/2005-DGAD dated 27th September, 2005. The Authority had recommended provisional anti-dumping duty on the imports vide Notification No. 14/7/2005-DGAD dated 3rd February, 2006. These provisional anti- dumping duties were imposed by the Ministry of Finance vide Customs Notification No. 31/2006-Customs (ADD), dated 3rd March, 2006. Subsequently, the Authority recommended imposition of definitive duty vide Notification no. 14/7/2005-DGAD, dated 28th July 2006. The Ministry of Finance thereafter imposed duties vide Customs Notification No. 94/2006-Customs (ADD), dated 7th September, 2006. The Authority in the previously conducted original investigation and its first sunset review investigation examined the existence of dumping, injury, causal link thereof and its effect on the domestic industry with respect to imports of subject goods from China PR. Following elaborate investigations, the Authority concluded a positive dumping margin as well as material injury to the domestic industry and recommended that there was a need for imposition of definitive anti-dumping duties. 3. The Authority later conducted the first sunset review investigation which was initiated vide Notification no. 15/15/2010-DGAD dated 1st December, 2010. The Authority notified the final findings recommending continuation of duty vide Notification no. 15/15/2010-DGAD dated 30th November., 2011. The Ministry of Finance continued duties vide Customs Notification No. 05/2012-Customs (ADD), dated 13th January, 2012. The Authority later initiated the second sunset review investigation vide Notification no. 15/18/2016-DGAD dated 12th January 2017. However, the investigation was terminated on 9th November., 2017. This investigation was terminated considering that there were no imports as per DGCI&S data during the injury period and the POI. 4. The applicant again approached the Authority, after over 5 years since expiry of anti-dumping duty, submitting that post expiry, the subject imports have again started to enter the Indian market at dumped prices in huge volumes and resultantly affected the performance of the applicant industry. The Authority, on the basis of sufficient prima facie evidence submitted by the applicant, issued a public notice vide Notification No. 06/18/2023- DGTR dated 30th September, 2023 published in the Gazette of India, initiating the subject investigation in accordance with Rule 5 to determine the existence, degree and effect of the alleged dumping and to recommend the amount of anti-dumping duty which if levied, would be adequate to remove the alleged injury to the domestic industry. PROCEDURE 5. The procedure described below has been followed with regards to the investigation: i) The Authority notified the embassy of the subject country in India about the receipt of the present anti-dumping application before proceeding to initiate the investigation in accordance with Rule 5(5) of the Rules. ii) The Authority, on the basis of sufficient prima facie evidence submitted by the applicant, vide notification no.6/18/2023-DGTR dated 30th September 2023 published a public notice in the Gazette of India, Extraordinary, initiating an anti-dumping investigation concerning imports of the subject goods from the subject country to determine the existence, degree and effect of alleged dumping of the subject goods and to recommend the appropriate amount of anti-dumping duties, which if levied, would be adequate to remove the alleged injury to the domestic industry. iii) The Authority forwarded a copy of the public notice along with the questionnaires to the embassy of the subject county in India, all known exporters, importers and users (whose details were made available by the applicant) and gave them the opportunity to make their views known in writing in accordance with Rule 6(2) of the anti- dumping rules. They were advised to reply within thirty days from the date of receipt of notice. iv) The Authority provided a copy of the non-confidential version of the application to the known exporters and the embassy of the subject country in accordance with Rule 6(3) of the anti-dumping Rules. A copy of the application was also provided to the other interested parties, as requested. v) The Authority sent questionnaire to elicit relevant information to the following known producers/exporters in the subject country in accordance with Rule 6(4) of the AD rules: +----+----------------------------------------------+ | SN | Producer/ Exporter | +====+==============================================+ | 1. | Hubei Chemical Fibre Hubei Xinyang Special | | | Fiber Co. Ltd. | +----+----------------------------------------------+ | 2. | MS Shaoxing Kede New Material Co. | +----+----------------------------------------------+ | 3. | Shandong Henglian New Material | +----+----------------------------------------------+ | 4. | Sinoright International Trade | +----+----------------------------------------------+ | 5. | Star Chemicals Far East Co. Ltd. | +----+----------------------------------------------+ | 6. | Weifang-Henglian Celloaphane Co. Ltd. | +----+----------------------------------------------+ | 7. | Yongkang Trunm Imp Exp Co. Ltd. | +----+----------------------------------------------+ | 8. | Yuyao Paper Mill | +----+----------------------------------------------+ | 9. | Zheijang Yao Paper Group | +----+----------------------------------------------+ | 10.| Zheijang Yuantal Special Film Co. Ltd. | +----+----------------------------------------------+ vi) Following producers/exporters from the subject country have filed the exporter's questionnaire response or made any submissions: +----+-------------------------------------------+ | SN | Responding Producer/ Exporter | +====+===========================================+ | 1. | Shandong Henglian New Materials Co. Ltd. | +----+-------------------------------------------+ | 2. | Shandong ICCAS-Henglian Biobased Materials| | | Co. Ltd. | +----+-------------------------------------------+ | 3. | Shaoxing Kede New Material Co. Ltd. | +----+-------------------------------------------+ vii) Questionnaires were also sent to the following known importers/users of the subject goods in India seeking necessary information in accordance with Rule 6(4) of the AD Rules: +----+-----------------------------+ | SN | Importer/ User | +====+=============================+ | 1. | Avivah India | +----+-----------------------------+ | 2. | Bright start agency | +----+-----------------------------+ | 3. | Ecartes Technology Pvt. Ltd.| +----+-----------------------------+ | 4. | Hari Agencies | +----+-----------------------------+ | 5. | Jawarimal Dalamchand | +----+-----------------------------+ | 6. | Mangilal & Co. | +----+-----------------------------+ | 7. | Navstar Impex | +----+-----------------------------+ | 8. | Quality Paper Mart | +----+-----------------------------+ | 9. | Shivananda Marketing Pvt. | | | Ltd. | +----+-----------------------------+ | 10.| SMB Marketing Pvt. Ltd. | +----+-----------------------------+ | 11.| Standard Fireworks (P) Ltd. | +----+-----------------------------+ | 12.| Suriya Impex | +----+-----------------------------+ viii) Salvonic, registered itself as an interested party in the present investigation, as a consumer of the subject goods. However, it has not filed any response to the importer's/ user's questionnaire response, or any submission. ix) Further, The Indian Fireworks Manufacturers Association (TIFMA) filed its representation before the Authority subsequent to the oral hearing held on 24th January 2024. TIFMA, however, did not register itself as an interested party in the present investigation or filed a response to the prescribed questionnaires. Contentions of the Association have been appropriately addressed wherever necessary. x) The period of investigation for the purpose of the present review is 1st April 2022 to 31st March 2023 (12 months) (hereinafter referred to as the "period of investigation” or “POI”). The injury analysis period included the period of investigation and the preceding years, 2019-20, 2020-21, 2021-2022. xi) The Authority vide para 7 of the initiation notification dated 30th September, 2023 granted an opportunity to the interested parties to present their comments on the scope of the product under consideration and product control number (PCN) within 15 days of initiation which ended on 15th October, 2023. None of the interested parties made any submissions with regard to the scope of the product under consideration or for the construction of PCN within the stipulated time period. Accordingly, the Authority vide notification published on 8th November., 2023 proceeded to confirm the scope of the PUC and not construct PCNs, as proposed in the initiation notification. xii) The Authority issued an economic interest questionnaire (EIQ) to all interested parties and the concerned ministry. Response to EIQ has only been submitted by the domestic industry. xiii) The information provided by the interested parties on a confidential basis was examined with regard to the sufficiency of such claims. On being satisfied, the Authority has accepted the confidentiality claims, wherever warranted and such information has been considered confidential and not disclosed to the other interested parties. Wherever possible, parties providing information on a confidential basis were directed to provide sufficient non- confidential version of the information filed on confidential basis. xiv) Further information was sought from the applicant to the extent deemed necessary. xv) Verification of the domestic industry was conducted to the extent considered necessary for the purpose of the present investigation. xvi) A list of all the interested parties was uploaded on the DGTR website along with the request to all of them to email the non-confidential version of their submissions to all the other interested parties along with the investigation team. xvii) The non-injurious price (hereinafter referred to as 'NIP') based on the cost of production and the cost to make and sell the subject goods in India based on the information furnished by the domestic industry, maintained as per Generally Accepted Accounting Principles (GAAP), has been worked out so as to ascertain whether the present anti-dumping duty is sufficient to remove injury to the domestic industry. xviii) In accordance with Rule 6(6) of the AD Rules, the Authority provided an opportunity to the interested parties to present their views during the oral hearing held on 24th January 2024. The interested parties were requested to submit their written submissions by 31st January 2024 and rejoinder submissions by 7th February 2024 at the latest. xix) Wherever an interested party has refused access to or has otherwise not provided necessary information during the course of the present investigation, or has significantly impeded the investigation, the Authority has recorded its observation on the basis of the facts available. xx) In accordance with Rule 16 of the Rules Supra, the essential facts were disclosed by the Authority on 23rd July 2024 to the concerned interested parties. Comments were requested by 29th July 2024. Comments received on the disclosure statement to the extent considered relevant by the Authority has been considered in this final finding. xxi) *** in this final finding represents information furnished by an interested party on confidential basis, and so considered by the Authority under the Rules. xxii) Exchange rate considered for the POI for conversion of USD to Indian Rupees is 1 USD = Rs. 81.06. PRODUCT UNDER CONSIDERATION AND LIKE ARTICLE 6. The product under consideration (hereinafter also referred to as the “PUC") as defined at the stage of initiation was as follows: “3. The product under consideration in the present investigation is “Cellophane Transparent Film” (CTF) (hereinafter also referred to as the “Product under Consideration” or the “subject goods”). The product is also globally known by other names like “Cellophane Transparent Paper”, “Cellophane Paper”, “Transparent Paper”, “Transparent Film”, “TP Film”, “CTP Film”, etc.”” 7. No comments on the scope of the PUC and PCN were received from the interested parties and accordingly, accordingly, it was clarified through the scope of the PUC and PCN Methodology Notification (hereinafter referred to as the "Scope Notification") dated 8th November, 2023, that the scope of the PUC as defined in the initiation notification was confirmed. C.1 Submissions by the other interested parties 8. The following submissions have been made by the other interested parties with regard to the scope of the product under consideration and like article: i) The applicant has an agreement with Futamura for selling certain product types not manufactured by the applicant. The Authority is requested to exclude such products from the scope of the PUC. ii) It is also submitted that the applicant does not produce coated CTF and CTF in reel form. Therefore, both coated CTF and reels should be outside the scope of the PUC. iii) That the reels produced by the applicant are not up to the standards used for automation work. Reels used in automation should also be excluded. C.2 Submissions by the domestic industry 9. The following submissions have been made by the domestic industry with regard to the scope of the product under consideration and like article: i) There are different forms of CTF having different GSM. However, consumers use the products interchangeably, regardless of the GSM. ii) The product under consideration is used by a large number of small-scale consumers in the country. The PUC is an ideal packing material. It is used in packing and wrapping of fireworks, sweets, fruits and food items, candies, confectionaries, gifts, soaps, incense sticks, silverware, etc. In the past, the demand of the PUC had declined. However, in the recent few years, new applications of the product have cropped up. iii) The applicant has an agreement with Futamura whereby it plans to represent their specialised product & to assess the market for such products. These are product types exclusive to Futamura. Neither the applicant nor the Chinese producers have the proprietary rights to manufacture these products. iv) As far as coated CTF is concerned, there is no demand for the same in the Indian market at present. It is neither being produced by the applicant not being imported. In any case, the applicant has the facility to produce coated CTF as well, which was being produced and supplied to the cigarette industry till late 1990's. Thereafter, there is no known demand for coated CTF. v) The applicant produces CTF reel form which is then cut into sheets as per the requirement of the customers. If any customer requires CTF in reel form, the domestic industry shall provide the same. As for reels suitable for automation work, the product is still majorly being used in the firecracker industry which is prohibited to use automation in view of fire hazard. vi) That the subject goods produced by the Indian industry and imported from China PR are comparable in terms of characteristics such as physical & chemical characteristics, manufacturing process & technology, functions & uses, product specifications, pricing, distribution & marketing, and tariff classification of the goods. These two are technically and commercially substitutable. The product produced by the domestic industry is a like article to the product under consideration. vii) Further, considering the history of the past investigation it would be seen that the Authority has consistently determined the same scope of product under consideration and like article, as the present investigation. Therefore, this issue does not require further deliberation and examination. viii) Analysis of import data shows that the product under consideration has been imported using several descriptions. The PUC is being imported under customs sub-headings 39207111 and 48239090 of the Customs Tariff Act, 1975. The Authority in its findings issued vide Notification No. 14/7/2005-DGAD had also noted that a large number of imports do not contain the classification meant for the PUC and have been imported under different customs classifications than what is applicable. C.3 Examination by the Authority 10. It is noted that the product under consideration in the present investigation is 'Cellophane transparent film' (CTF). The product is also globally known by other names like “Cellophane Transparent Paper", "Cellophane Paper", "Transparent Paper", "Transparent Film”, “TP Film”, “CTP Film" etc. 11. CTF is a re-generated cellulose film of glass clear transparency and sparkle. It is flexible yet tough. It shows outstanding machinability as well as dimensional stability. It is made of wood pulp. It is non-toxic, biodegradable and burns like any other paper leaving black ash. CTF can be coloured or white. It is available in sheet and roll forms. It is a packaging material and is majorly used in packing and wrapping of fireworks as it resists moisture hence avoiding misfire of crackers and is not a fire hazard due to its non-static properties and being sealable using simple adhesive. In addition to this, it is also used to pack and wrap sweets, fruits and food items, candies, confectionaries, gifts, soaps, incense sticks, silverware, etc. Further, with the ban imposed on single use plastic and rising awareness about eco-friendly products, new applications of the product have come up recently. 12. There are different forms of CTF having different GSM. The applicant has claimed that the consumers use the products interchangeably as there is no significant price difference in different grades and GSM of the PUC. Further the domestic industry has claimed that they produce the PUC in both reel and sheet forms and they have the facility for the production of coated cellophane which is idle. The same facility can be used for the production of coated CTF if there is a demand. Since there is no significant difference in the PUC of different GSMs or grades or quality, all types of CTF are within the scope of the PUC. Further it is observed that coated cellophane though imported but in very less quantity. The sales agreement entered between the petitioner and Futamura was shared with the Authority but without the list of products under the scope of agreement. Since, none of the interested parties refuted the claim made by the petitioner that there is no significant difference in the PUC of different GSMs or grades or quality or any types of CTF, so all types of cellophane are under the scope of the PUC. 13. The product under consideration in the present investigation is 'Cellophane transparent film' (CTF). The product is also globally known by other names like "Cellophane Transparent Paper", "Cellophane Paper", "Transparent Paper", "Transparent Film", "TP Film”, “CTP Film” etc. was identified based on the description of the product imported under customs sub-headings 39207111 and 48239090 of the Customs Tariff Act, 1975. 14. The Authority notes that the like article produced by the domestic industry and the product under consideration imported from the subject country is comparable in terms of physical and chemical characteristics, functions and uses, product specifications, pricing, distribution and marketing, and tariff classification of the goods. The goods produced by the domestic industry and imported from the subject country are like articles in terms of the Rules. The two are technically and commercially substitutable. The Authority holds that the subject goods produced by the domestic industry are like article to the product under consideration imported from the subject country within the scope and meaning of Rule 2(d) of the Anti-dumping Rules. SCOPE OF THE DOMESTIC INDUSTRY & STANDING D.1 Submissions by the other interested parties 15. No submission has been made by other interested parties with regard to the domestic industry and its standing. D.2 Submissions by the domestic industry 16. The applicant has made the following submissions with regard to the domestic industry and its standing: i) The application has been filed by M/s. Kesoram Rayon, a unit of Cygnet Industries Ltd. ii) There is no other producer in India, besides the applicant. In fact, the applicant is the only producer of the like article, not only in India but also in the whole of Southeast Asia. iii) The applicant has neither imported the subject goods from the subject country nor related to any importer in India or producer/exporter from the subject country. iv) The applicant is the sole producer of the like article in India, and therefore constitutes a 'major proportion' of the total Indian production and satisfies the requirements of Rule 2(b) and Rule 5(3) of the AD Rules. D. 3 Examination by the Authority 17. Rule 2(b) of the AD Rules defines the 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 such case the term 'domestic industry 'must be construed as referring to the rest of the producers" 18. The present application has been filed by M/s Kesoram Rayon, a unit of Cygnet Industries Ltd. The applicant has not imported the subject goods and are neither related to an importer or exporter thereof. The applicant company is an eligible domestic industry within the meaning of the Rule 2(b). 19. The applicant accounts for 100% of the Indian production. It is seen that the applicant accounts for a major proportion in Indian production. 20. The Authority thus proposes that the application satisfies the criteria of standing in terms of Rule 5(3) of the Rules. Further, the applicant, Kesoram Rayon is proposed to constitute the domestic industry within the meaning of the Rules. CONFIDENTIALITY E.1 Submissions by the other interested parties 21. The following submissions have been made by the other interested parties with regard to confidentiality: i) That the domestic industry did not disclose its agreement with Futamura where it is acting as an agent for Futamura. It is attempting to block material from all other sources. ii) That the domestic industry has not disclosed its memorandum of understanding with Futamura to explore a possible joint venture in India. Futamura is eyeing a 24% stake in the company. The domestic industry has also not disclosed its Technical Assistance agreement. iii) That the applicant industry should provide a proper non-confidential version of their information in accordance with applicable trade notices. E.2 Submissions by the domestic industry 22. The following submissions have been made by the domestic industry with regard to confidentiality: i) The domestic industry submitted that the agreements referred to by the respondent are confidential and not relevant to the proceedings of the present investigation. ii) The technical assistance agreement was referred to in the applicant's earlier letters but not discussed in detail due to confidentiality reasons. Further, the agreement with Futamura is to represent their exclusive products and to develop them for the Indian market. If there is demand for a sustainable volume of such products, the applicant shall proceed with an investment in the future. iii) The applicant is not trying to block material from any source. Imports may keep entering the Indian market from any source but at a fair price so that there is a level playing field. iv) The MoU with Futamura to explore a possible joint venture is at the level of discussion alone. No definitive agreement has been reached between the parties. E.3 Examination by the Authority 23. The Authority made available the non-confidential version of the information provided by the various parties to all the other interested parties as per Rule 6(7). 24. With regard to confidentiality of the information submitted by the interested parties, Rule 7 of the AD Rules provides as follows: “7. Confidential Information: (1) Notwithstanding anything contained in sub-rules (2), (3) and (7) of rule 6, sub-rule (2) of rule 12, sub- rule (4) of rule 15 and sub-rule (4) of rule 17, the copies of applications received under sub -rule (1) of rule 5, or any other information provided to the designated authority on a confidential basis by any party in the course of investigation, shall, upon the designated authority being satisfied as to its confidentiality, be treated as such by it and no such information shall be disclosed to any other party without specific authorization of the party providing such information. (2) The designated authority may require the interested parties providing information on confidential basis to furnish nonconfidential summary thereof and if, in the opinion of a party providing such information, such information is not susceptible of summary, such party may submit to the designated authority a statement of reasons why summarisation is not possible. (3) Notwithstanding anything contained in sub-rule (2), if the designated authority is satisfied that the request for confidentiality is not warranted or the supplier of the information is either unwilling to make the information public or to authorize its disclosure in a generalized or summary form, it may disregard such information." 25. The information provided by the interested parties on confidential basis was examined with regards to sufficiency of such claims. On being satisfied, the Authority has accepted the confidentiality claims, wherever warranted and such information has been considered confidential and not disclosed to the other interested parties. Wherever possible, the parties providing information on confidential basis were directed to provide sufficient nonconfidential version of the information filed on confidential basis. The Authority also notes that all interested parties have claimed their business-related sensitive information as confidential. 26. The Authority has in various paras of the notice of initiation extensively stated time limits to the interested parties to provide relevant information. At Para 27 of the notice of initiation the Authority, with regard to limit, stated that "If no information is received within the prescribed time limit or the information received is incomplete, the Authority may record its findings on the basis of the facts available on record in accordance with the Rules". Further, at Para 33 of the notice, the Authority prescribed a time limit of 7 days from receipt of the non- confidential version of the documents for the interested parties to offer their comments on the confidentiality claimed. 27. It is noted that the respondents did not make their comments on confidentiality within the prescribed period. Further, they failed to substantiate how the non-confidential version of the applicant's submissions were not in accordance with the Authority's Trade Notice on confidentiality. 28. In any case, the Authority examined the agreements, identified by the other interested parties, during the verification of the applicant's data. Following this examination, it was found that these agreements are not relevant to the present investigation. Further, while the applicant did acknowledge the existence of these agreements in their submissions, their disclosure was limited by the confidentiality clauses. 29. Further, neither the existence of these agreements, the potential joint venture and nor the imposition of duties would serve as a barrier to the entry of the subject goods into the Indian market. As long as the subject goods are imported at an un-dumped price, they may continue entering the market. ASSESSMENT OF DUMPING AND DETERMINATION OF NORMAL VALUE, EXPORT PRICE, DUMPING MARGIN, NON-INJURIOUS PRICE AND INJURY MARGIN F.1 Submissions by the other interested parties 30. The other interested parties did not make any submissions with regard to the normal value, export price and dumping margin. F.2 Submissions by the domestic industry 31. The following submissions have been made by the domestic industry with regard to normal value, export price and dumping margin: i) China should be considered a non-market economy, in line with the position taken by the Authority in previous cases, and by the investigating authorities in other countries. Chinese producers' cost and price cannot be relied upon for determination of normal value. ii) The Authority shall follow Para 1 6 of Annexure I for the determination of normal value only if the responding Chinese companies establish that their costs and price information is such that individual normal value and dumping margin can be determined. If the responding Chinese companies are not able to demonstrate that their costs and price information can be adopted, the Designated Authority shall reject the claim of individual dumping margin. iii) Paragraph 1 to 6 of Annexure I of the Rules does not apply for computation of normal value for imports from China PR, unless a producer/exporter shows with sufficient evidence that he is operating under market economy conditions. As a result, normal value for China PR has to be determined in terms of Para 7 of Annexure I of the Rules. iv) Chinese producers are required to be treated as companies operating under non-market economy environment and the Authority may proceed to determine the normal value on the basis of Para 7 of Annexure-I. v) The applicant submitted information on the selling price of producer of the subject goods in UK, which was considered for determination of normal value. Besides this the applicant also proposed to consider import price of CTF in India from UK, as it constitutes 2.8% of total imports into India. vi) Lastly, the applicant also calculated normal value based on estimate of cost of production i.e. considering the costs of the domestic industry in India, duly adjusted to include selling, general and administrative costs of the domestic industry by adding reasonable profits, after addition for selling, general and administrative expenses and reasonable profits. vii) Export price has been determined considering the volume and value of imports for the proposed period of investigation as per the data procured from market intelligence sources in view of non-availability of DGCI&S data. Price adjustments have been claimed on a conservative basis for the purpose of fair comparison. viii) The applicant has requested verification of export volume and value provided by the responding exporters with the DGCI&S and DG Systems data under both, chapter 39 and 48. ix) The applicant further requested the Authority to consider that the exporters have reported all the expenses that have been incurred by them in exporting the product. Further, it must be noted that the exporters are required to report all expenses which address the differences between conditions and terms of sale between domestic and exported product. x) Considering the normal value calculations suggested, the dumping margins have been calculated. The dumping margins so calculated are not just above the de-minimis level but also quite significant. xi) It is also the contention of the applicant that in the Indian market of the subject goods, the ultimate consumer did not reap the benefit to the extent of price difference between the domestic and imported product. Almost entirety of the subject imports is being made by traders who are catering to the majority of the customers. These traders even after pocketing a huge margin for themselves are undercutting the prices of the domestic industry. None of the traders have participated in the present investigation. Non-participation of traders is a deliberate act as the importer questionnaire would require them to disclose their resale prices. F.3 Examination by the Authority 32. Under Section 9A(1)(c) of the Act, normal value in relation to an article means: i. the comparable price, in the ordinary course of trade, for the like article when meant for consumption in the exporting country or territory as determined in accordance with the rules made under sub- section (6); or ii. when there are no sales of the like article in the ordinary course of trade in the domestic market of the exporting country or territory, or when because of the particular market situation or low volume of the sales in the domestic market of the exporting country or territory, such sales do not permit a proper comparison, the normal value shall be either- (a) comparable representative price of the like article when exported from the exporting country or territory to an appropriate third country as determined in accordance with the rules made under sub-section (6); or (b) the cost of production of the said article in the country of origin along with reasonable addition for administrative, selling and general costs, and for profits, as determined in accordance with the rules made under sub-section (6): Provided that in the case of import of the article from a country other than the country of origin and where the article has been merely transhipped through the country of export or such article is not produced in the country of export or there is no comparable price in the country of export, the normal value shall be determined with reference to its price in the country of origin. 33. The Authority sent questionnaires to the known producers/exporters from the subject country, as well as to the appropriate diplomatic representative advising them to provide information in the form and manner prescribed by the Authority within the prescribed time limit. 34. At the time of the initiation of the investigation, the Authority determined the normal value considering information that was available and sufficient to initiate the investigation. However, after initiation the determination of normal value has been made after taking into account the responses received from the interested parties. 35. Following producers/exporters have filed questionnaire response in this investigation: a. M/s Shandong Henglian New Materials Co. Ltd. and its related party M/s Shandong ICCAS-Henglian Biobased Materials Co. Ltd. b. M/s Shaoxing Kede New Material Co. Ltd. 36. The normal value and export price for all producers/ exporters from the subject country have been determined as below. F.3.1 Normal value 37. Article 15 of China's Accession Protocol in WTO provides as follows: "Article VI of the GATT 1994, the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 ("Anti-Dumping Agreement") and the SCM Agreement shall apply in proceedings involving imports of Chinese origin into a WTO Member consistent with the following: "(a) In determining price comparability under Article YI of the GATT 1994 and the Anti-Dumping Agreement, the importing WTO Member shall use either Chinese prices or costs for the industry under investigation or a methodology, that is not based on a strict comparison with domestic prices or costs in China based on the following rules: (i) If the producers under investigation can clearly show that market economy conditions prevail in the industry producing the like product with regard to the manufacture, production and sale of that product, the importing WO Member shall use Chinese prices or costs for the industry under investigation in determining price comparability; (ii) The importing WTO Member may use a methodology that is not based on a strict comparison with domestic prices or costs in China if the producers under investigation cannot clearly show that market economy conditions prevail in the industry producing the like product with regard to manufacture, production and sale of that product. (iii) In proceedings under Parts II, III and V of the SCM Agreement, when addressing subsidies described in Articles 14(a), 14(b), 14(c) and 14(d), relevant provisions of the SCM Agreement shall apply; however, if there are special difficulties in that application, the importing WTO Member may then use methodologies for identifying and measuring the subsidy benefit which take into account the possibility that prevailing terms and conditions in China may not always be available as appropriate benchmarks. In applying such methodologies, where practicable, the importing WTO Member should adjust such prevailing terms and conditions before considering the use of terms and conditions prevailing outside China. (iv) The importing WTO Member shall notify methodologies used in accordance with subparagraph (a) to the Committee on Anti-Dumping Practices and shall notify methodologies used in accordance with subparagraph (b) to the Committee on Subsidies and Countervailing Measures. (v) Once China has established, under the national law of the importing WTO Member, that it is a market economy, the provisions of subparagraph (a) shall be terminated provided that the importing Member's national law contains market economy criteria as of the date of accession. In any event; the provisions of subparagraph (a)(ii) shall expire 15 years after the date of accession. In addition, should China establish, pursuant to the national law of the importing WTO Member, that market economy conditions prevail in a particular industry or sector, the nonmarket economy provisions of subparagraph (a) shall no longer apply to that industry or sector. " i) Para 7 of Annexure I of the Rules reads as under: In case of imports from non-market economy countries, normal value shall be determined on the basis of the price or constructed value in the market economy third country, or the price from such a third country to other countries, including India or where it is not possible, or on any other reasonable basis, including the price actually paid or payable in India for the like product, duly adjusted, if necessary, to include a reasonable profit margin. An appropriate market economy third country shall be selected by the designated authority in a reasonable manner, keeping in view the level of development of the country concerned and the product in question, and due account shall be taken of any reliable information made available at the time of selection. Accounts shall be taken within time limits, where appropriate, of the investigation made in any similar matter in respect of any other market economy third country. The parties to the investigation shall be informed without any unreasonable delay the aforesaid selection of the market economy third country and shall be given a reasonable period of time to offer their comments. 38. It is noted that paragraph 7 of Annexure-I to the AD Rules stipulate three methods of constructing the normal value for non-market economies: (a) on the basis of price or constructed value in a market economy third country; (b) export price from a third country to other countries, including India; and (c) on any other reasonable basis. The Authority notes that under the provisions of paragraph 7 of Annexure-I to the AD Rules, the normal value must first be determined on the basis of the price or constructed value in a surrogate country, or the price of the exports from such country to other countries, including India. However, when such basis is not possible, only then the Authority can determine the normal value on any other reasonable basis, including the price paid or payable in India. 39. It is noted that no verifiable information/evidence has been provided by the parties for the construction of the normal value on the basis of the first and the second methods. While the applicant did submit evidence of price prevailing in a market economy third country i.e., United Kingdom (UK), but the same was based on merely price quoted in a single invoice of a producer in UK i.e., Futamura Chemical UK Ltd. A single invoice is not representative enough for the Authority to use it as a reference to determine the normal value. 40. Further, the PUC is known to have been imported under at least two HS codes, as has already been examined herein above, therefore, extrapolating the export price of the subject goods from third country to other countries is not possible. There are no significant imports coming to India from third countries except the subject Country. There is also no public data available with the Authority to determine the normal value from the above two methods. Therefore, the Authority has constructed the normal value for all exporters/producers from China PR based on the third method, i.e., "on any other reasonable basis including the price actually paid or payable in India". The Authority has constructed the normal value on the basis of the price paid or payable in India as Rs. *** F.3.2 Export Price A) Shandong Henglian New Materials Co. Ltd. and Shandong ICCAS-Henglian Biobased Materials Co. Ltd. ("Shandong Group") 41. In this finding, Shandong Henglian New Materials Co. Ltd. and Shandong ICCAS-Henglian Biobased Materials Co. Ltd., together are referred to as "Shandong Group". Whereas Shandong Henglian New Materials Co. Ltd., is referred as "Shandong Henglian" and Shandong ICCAS-Henglian Biobased Materials Co. Ltd., is referred as "Shandong ICCAS". 42. Based on the information furnished in the exporter questionnaire response, the Authority notes that Shandong Henglian is a producer and exporter of the subject goods from China PR. Shandong Henglian has exported ***MT of CTF directly to its unrelated customers in India during the POI which were verified and found to be correct in quantity and value terms as per DG System data base. Its related party, Shandong ICCAS, has also submitted the exporter questionnaire response. Shandong ICCAS is also a producer of the subject goods from China; however, it has only sold the subject goods domestically, and has not exported the subject goods either to India or to third countries. 43. Shandong Henglian provided the relevant information in the form and manner required and has claimed adjustments on account of ocean freight, insurance, inland freight, port charges and Bank Charges. 44. The Authority has undertaken desk verification of the information submitted by Shandong Henglian and examined Shandong Henglian's claims and accordingly, the claims have been allowed. Accordingly, the net export price at ex-factory level for Shandong Group has been determined after allowing the due adjustments and the same is mentioned in the dumping margin table below. B) Shaoxing Kede New Material Co. Ltd. 45. Based on the information furnished in the exporter questionnaire response, the Authority notes that Kede is a producer and exporter of the subject goods from China PR. Kede has exported ***MT of CTF directly to its unrelated customers in India during the POI but on verification it is observed that there is a significant mis-match in the values reported by the exporter and the DG System data. Therefore, data reported by exporter cannot be relied upon and the same has not been considered. C) Non-cooperating producers/exporters 46. The Authority has determined the export price for non-cooperating producers/exporters from China PR after considering the volume and value of imports based on the data of cooperating producers from China PR. Adjustments have been made for ocean freight, inland freight, insurance, handling charges, commission, and bank charges. The export price so determined is stated in the below – mentioned dumping margin table. F.3.3 Determination of Dumping margin 47. Considering the normal value and export price determined, as explained above, it is noted that the dumping margin is more than the de-minimis limit prescribed under the Rules. Dumping margin Table +-----------+--------+---------+-----------+-----------+---------+ | Company | Normal | Export | Dumping margin (1USD = 81.06) | | | value | price | | | | +-----------+--------+---------+-----------+-----------+---------+ | Unit | INR/KG | INR/KG | INR/KG | USD/KG | % of | | | | | | | Export | | | | | | | price | | | | | | | Range | +===========+========+=========+===========+===========+=========+ | Shandong | *** | *** | *** | *** | *** | | Group | | | | | 5-20% | +-----------+--------+---------+-----------+-----------+---------+ | Others | *** | *** | *** | *** | *** | | | | | | | 60-70% | +-----------+--------+---------+-----------+-----------+---------+ G. ASSESSMENT OF INJURY AND EXAMINATION OF CAUSAL LINK G.1 Submissions by other interested parties 48. The following submissions have been made by the other interested parties with regards to injury and causal link: i) The domestic industry has received significant protection from imports through imposition of ADD of 1.95 USD on imports of the PUC till 2017, i.e., for more than a decade. During this period, it continued enjoying a monopolistic position in the Indian market as it was the sole Indian producer of the PUC. ii) Despite being the sole producer, the domestic industry has not been able to generate profits even before the injury period. This reflects that the domestic industry is in a loss-making business because of its own inefficiencies. iii) The plant of the petitioner is very old having old technology adding to inefficiency in production causing injury to the firm, further it has entered into technology assistance agreement with the Futamura to improve the plant technology. iv) Kesoram faced multiple shutdowns in the years 2020-2021 and 2021-2022. This resulted in a significant decline in the domestic production of the PUC and an increase in imports. Despite this, Kesoram was able to significantly recover its market share during the POI. v) Kesoram's domestic sales have moved in tandem with the production quantity throughout the injury period. Since there was a halt in production during the year 2021-2022, the domestic sales also naturally declined. As soon as the production resumed, the domestic sales also increased. vi) Kesoram provided no data regarding price undercutting in the application, and the data submitted in the written submissions appears to be incorrect, as even though the landed price doubled in the POI, the price undercutting reported is unchanged. vii) The per unit average selling price of Kesoram has shown a significant improvement, even after the shutdowns in the years preceding the POI. Kesoram was able to increase its selling price, for both domestic as well as export sales. viii) With regard to the financial injury claim, Kesoram's own submissions in the application state that it does not directly compete with the exporters from the subject country, but with the traders in India, who are selling the PUC at a price 'marginally lower than' the domestic industry. This shows that Kesoram continues to drive the domestic price, and the traders sell in competition with the prices of Kesoram. The financial injury, if any, is not being caused by the subject imports. ix) Kesoram faced multiple shutdowns during the years 2020-2021 and 2021-2022. These shutdowns led to a halt in production of the PUC. Since Kesoram is the sole producer of the PUC, the user industries became x) entirely dependent on imports during these periods. Despite this, as soon as Kesoram resumed its production, it was able to increase its domestic sales in tandem with the production quantity. Kesoram has attributed the shutdown of its rayon plant to an absence of demand due to the pandemic. However, this is an unsubstantiated claim. Rayon is an essential raw material in the manufacturing of both the PUC and viscose filament yarn (VFY). The Authority may appreciate that in the anti-dumping investigation on VFY, the POI was 1st April 2021 to 31st March 2022, the same period in which Kesoram faced a major shut down, allegedly due to factors like declining demand and shortage of raw material. In this investigation, the Authority had noted that the demand increased after the POI. xi) The Authority's own findings show that there was neither a slump in demand of viscose filament yarn in the year 2021-2022, nor did the domestic producers face any adverse volume effects. xii) The rayon plant, which manufactures viscose filament yarn and the PUC, made negligible contributions to the humongous debt owed by the parent company, Kesoram Industries Limited. Hence, the shutdowns suffered by Kesoram were not solely because of the pandemic, but because the rayon plant was unable to generate profits. xiii) In its own submissions, Kesoram has stated that Travancore Rayon Limited, a company established in 1946, was the first company in Asia to manufacture the PUC. The company was however shut down in the 1980s. Further research shows that Travancore Rayon was unable to manufacture the PUC in a cost-efficient manner. xiv) To remain cost effective, Kesoram is making endeavors to upgrade its manufacturing process by inviting experts from Futamura, Japan, a leading global producer of the PUC. In 2019, Kesoram signed a “Technical Assistance Agreement" with Futamura, through which Futamura provides the technical know-how to Kesoram for upgradation of its manufacturing process. xv) Pulp for rayon and CTF is the same. Both the products are being manufactured by the applicant. The process to manufacture rayon is more complex than producing CTF, but former's prices are 30-40% less than CTF prices. Further, 2 other Indian producers of rayon in India are making profits. xvi) The industry's overhead costs are noted to be high compared to industry standards. xvii) The applicant has not given information regarding substitutes eating the market share of the subject goods. Products like BOPP films, PVC, paper, and biodegradable plastic have substituted the product under consideration. The applicant industry is limited to selling to sectors still using manual packing processes, while those employing automation are unable to use their products, indicating that any loss in sales cannot solely be attributed to imports from China. xviii) The applicant should provide segment-wise details of its sales. Applicant's 70% sales are direct, and rest is through traders. They cannot be unaware of the end use of their direct sales. They would also be aware of the sales made through their own dealers/ distributors. The domestic industry has also not disclosed its price list. They have separate rates for end customers and distributors. xix) That Kesoram's Rayon, transparent paper and chemical business undertaking were acquired by Cygnet Industries Limited in 2016, through a slum sale route for a consideration of ***. This acquisition was analyzed at length by the Authority in its final findings in the sunset review investigation concerning imports of viscose filament yarn originating in or exported from China PR dated 20th April, 2018, since Kesoram was an applicant in that investigation: a. It was found during the investigation that the value of fixed Assets (tangible assets) as on 31.03.2016 was *** as per certified balance sheet of M/s Kesoram Rayon. However, the balance sheet of M/s Cygnet Industries Limited shows the value of fixed assets as *** as on the same date. The subsequent details indicate that the value was determined by an independent valuation agency. Since Cygnet Industries is *** subsidiary of Kesoram Industries limited, revaluation of assets was not considered for return purpose, as it may amount to circumventing the Annexure-III of the Customs Tariff (identification, assessment and collection of anti-dumping duty on dumped articles and for determination of injury) Rules, 1955. b. Para 4 of Annexure-III states that a reasonable return on average capital employed for the product may be allowed for recovery of interest, corporate tax and profit. Net fixed assets of both the petitioner companies have been adopted without considering any revaluation. xx) That the industry's overhead costs are noted to be high compared to industry standards. Interested parties had made a request to Authority to meticulously review these costs and deduct variable expenses from claimed costs to ascertain the real cost. xxi) As regards the respondent's argument regarding applicant's efficiency and losses throughout the injury period, it is submitted that the imports weren't only causing injury in the POI alone but throughout the injury period. Import volumes started increasing right after the expiration of duty with a sharp increase in the POI. The applicant was in losses throughout the injury period, as the imports were significant throughout. The losses have intensified in the POI with significant increase in imports. xxii) As regards the respondent's argument regarding shutdown being cause of injury to the applicant and subsequent improvement in its performance, it is submitted that the shutdowns were due to government guidelines on Covid-19 in the previous years and subsequently because it was adversely impacted by restrictions placed on movement of non-essential commodities due to Covid 19. The period of shutdown is an abnormal period for which performance of the applicant needs to be normated. The applicant is not claiming injury due to shut down. Its performance in the POI needs to be compared to both normated performance in previous and the base year. The performance of the applicant has deteriorated in comparison to both, the base year and normated previous year. xxiii) As regards the respondent's argument regarding the imports increasing to fulfil demand supply gap during the period of the applicant's shutdown, it may be noted that even if the import volumes increased in 2021-22 to fulfil the demand supply gap, there was no reason for the imports to shoot up from 536MT to 1077MT in the POI when the applicant's production underwent no disruption. xxiv) Regarding the respondent's contention that the applicant drives price in the market, it is important to consider the difference between the import price and the resale price. The traders have pocketed huge profits and undercut the applicant's prices. Any increase in the applicant's selling price is due to an increase in its cost, which is much higher than the increase in selling price. At the same time, import price is a fraction of the cost of production. The applicant has to follow the prices that are being offered by its competitors i.e., the Chinese imports. xxv) As regards the respondent's argument regarding the concerned division of the applicant having made negligible contribution to the debt owed and the applicant being in losses, it is submitted that while the applicant has borrowed funds from both its parent company and financial institutions, it has never defaulted in paying interest on the borrowings. xxvi) The respondent has also made a comparison between Travancore Rayon Ltd., a producer of the subject goods that shutdown in 1980's, it is submitted that the adverse effects faced by Travancore Rayon Ltd. in 1983 cannot be directly applied to the present case. The exhibit relied upon by the respondents itself states that "The company continued to incur losses due to power cut ranging between 60 to 100%, recession in the industry and delay in installation of coal fired boiler." xxvii) As regards the respondent's argument regarding its selling price of rayon being lower that the selling price of CTF despite wood pulp being the main raw material for both, it is submitted that CTF and rayon yarn are two different products. Rayon prices are dependent on the denier of rayon. Certain low denier grades sell at prices equivalent to or even higher than the CTF prices. xxviii) As regards the respondent's argument that the market share of the subject goods has been taken by substitutes, it is submitted that substitutes are not eating up the market of the subject goods. There is no perfect substitute for the subject goods due to its inherent properties like being biodegradable, home compostable, free from static electric charge which would otherwise pose threat of fire. Further, the applicant is not suffering injury due to the availability of substitutes. Though owing to availability of BOPP at almost a quarter of the prices of the subject goods, plastic had taken away some of the demand in the past, with governments worldwide banning single use plastic and consumers becoming increasingly aware of the negative impact of plastics, the demand for CTF is rising again. The current injury is not on this account. xxix) The respondent has stated that substitutes include products like biodegradable plastics, it is submitted that while there have been instances where users have claimed to be using biodegradable plastic, in reality there is no plastic material like biodegradable plastic. Such material is also BOPP film which is only coated with biodegradable material. Hence, it is only the coating that is biodegradable and not the film itself. As for reels suitable for automation work, the subject goods are still majorly being used in the firecracker industry which is prohibited to use automation in view of fire hazard. xxx) The respondents have submitted that the applicant has sold majority of their product directly to the consumers and cannot be unaware of who the end consumer is. It is submitted that the applicant, in the POI, has sold only a fraction of its product directly to end consumer. Majority of its sales have been through dealers. Out of a total of *** MT sold by the applicant, in the POI, merely *** MT was sold directly. In any case, majority volumes of the subject goods are sold to the firecracker industry, which is bound to use CTF for packing and wrapping of firecrackers as it can be easily used to pack and wrap crackers using adhesives and would not pose fire/safety hazard that heat sealing of plastics would. xxxi) There is no revaluation of the applicant's assets. It was a slump sale, and the applicant has purchased its manufacturing facilities on payment of a consideration. In case of revaluation of assets, the legal entity remains the same and does not undergo any change. In case of sale-purchase, it is the purchase consideration that forms the basis for valuation of assets in the books of the accounts of the purchaser and the seller. In the previous investigations (2021 and 2023) involving Indian Rayon and Grasim, similar asset sales were accepted by the Authority. These investigations are more recent and relevant than the 2018 investigation. Further, there have been investigations where the parties purchased second hand machineries or imported entire manufacturing plants is and the Authority allowed purchase value of the assets. xxxii) It is also submitted that there are several investigations where the parties purchase second hand machineries. Sometimes, entire manufacturing plant is imported from Europe/Japan. The Authority never questioned such purchases and allowed purchase value of the assets. Therefore, the Authority is requested to consider that the applicant purchased the manufacturing facility and there was no revaluation of assets, in line with the principle followed in the recent investigations, i.e., the findings of 2021 and 2023, as referred above. G.3 Examination by the Authority 50. Rule 11 of the Rules read with Annexure II provides that an injury determination shall involve examination of factors that may indicate 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 the domestic producers of such articles. In considering the effect of the dumped imports on prices, it is considered necessary to examine whether there has been a significant price undercutting by the dumped imports as compared with the price of the like article in India, or whether the effect of such imports is otherwise to depress prices to a significant degree or prevent price increases, which otherwise would have occurred, to a significant degree. For the examination of the impact of the dumped imports on the domestic industry in India, indices having a bearing on the state of the industry such as production, capacity utilization, sales volume, inventory, profitability, net sales realization, the magnitude and margin of dumping, etc. have been considered in accordance with Annexure II of the Rules. 51. The Authority has taken note of the submissions made by the interested parties and has examined various parameters in accordance with the Rules after duly considering the submissions made by the interested parties. The injury analysis made by the Authority hereunder addresses the various submissions made by the interested parties in relevant paras. 52. Anti-dumping duty was imposed on the subject goods in 2006 after determining that dumping was causing injury to the domestic industry. The duties were further extended as there was evidence of the likelihood of dumping and injury to the industry. It is noted that the applicant got relief from dumping and its performance improved after the imposition of duties. The duties were in force until 2017. It is noted that post expiration of duty, volumes of the subject imports started to increase and resultantly the applicant's performance was impacted. As regards the contention that the applicant has received sufficient protection, it is noted that the law does not prescribe a maximum duration for which measures may be imposed. In any case, the applicant has approached the Authority after over 5 years from expiration of previous duties stating that imports are making domestic production unsustainable. Further, anti-dumping duties are imposed as a remedy against unfair imports and not to provide undue protection to the domestic industry. 53. With regard to the percentage of the applicant's direct and indirect sales, the Authority, based on the break-up of sales provided by the applicant, notes that the applicant has sold majority of its products through traders as well as the majority of imports are also through the importing traders. Therefore, the end-use of the PUC can be best analysed or seen on the basis of regional presence of the traders. It can be seen from the below table that though imports have also increased in Tamil Nadu and West Bengal regions as well as in other regions during the base year till the POI (2022-23). If we see the regions as surrogate indicator of the PUC usage, it points towards the increased usage of PUC in firecracker as well as in non-firecracker industries. +-----------------------------+--------------+--------------+--------------+--------------+ | Year | 2019-2020 | 2020 - 2021 | 2021 - 2022 | 2022-2023 | +=============================+==============+==============+==============+==============+ | Grand total of imports in KG| 325,262 | 353,996 | 525,863 | 1,085,730 | +-----------------------------+--------------+--------------+--------------+--------------+ | Import in TN and WB | *** | *** | *** | *** | +-----------------------------+--------------+--------------+--------------+--------------+ | Imports in other regions | *** | *** | *** | *** | +-----------------------------+--------------+--------------+--------------+--------------+ | Other regions import share %| *** | *** | *** | *** | +-----------------------------+--------------+--------------+--------------+--------------+ 54. The submissions made by the interested parties with regard to injury and causal link. which have been considered relevant by the Authority are examined and addressed as under. G.3.1 Assessment of Demand/ Apparent Consumption 55. The Authority has defined, for the purpose of the present investigation, demand, or apparent consumption of the subject goods in India as the sum of domestic sales of the applicant and imports from all sources. The demand for the PUC is as follows: +-----------------------------+----------+-----------+-----------+-----------+---------+ | Particulars | Unit | 2019-20 | 2020-2021 | 2021-22 | POI | +=============================+==========+===========+===========+===========+=========+ | Applicant Domestic Sales | MT | *** | *** | *** | *** | +-----------------------------+----------+-----------+-----------+-----------+---------+ | Applicant domestic sales | % | *** | *** | *** | *** | +-----------------------------+----------+-----------+-----------+-----------+---------+ | Trend from base year | | 100 | 63 | 104 | 59 | +-----------------------------+----------+-----------+-----------+-----------+---------+ | Subject country Imports | MT | 324 | 350 | 518 | 1041 | +-----------------------------+----------+-----------+-----------+-----------+---------+ | Subject country Imports | % of | *** | *** | *** | *** | | | total | | | | | | | demand | | | | | +-----------------------------+----------+-----------+-----------+-----------+---------+ | Trend from base year | | 100 | 108 | 160 | 321 | +-----------------------------+----------+-----------+-----------+-----------+---------+ | Imports from other countries| MT | 1 | 3 | 7 | 30 | +-----------------------------+----------+-----------+-----------+-----------+---------+ | Imports from other countries| % | *** | *** | *** | *** | +-----------------------------+----------+-----------+-----------+-----------+---------+ | Trend from base year | | 100 | 3 | 7 | 30 | +-----------------------------+----------+-----------+-----------+-----------+---------+ | Total Demand | MT | *** | *** | *** | *** | +-----------------------------+----------+-----------+-----------+-----------+---------+ | Trend from base year | | 100 | 71 | 114 | 108 | +-----------------------------+----------+-----------+-----------+-----------+---------+ 56. From the above, it is seen that the demand of the PUC has increased over the injury period. The demand in the base year i.e., 2019 – 2020, was ***MT. While a decline in demand was registered only in the year 2020-21, the same is attributed to Covid-19 pandemic. Demand in the POI recovered and is seen to have increased. 57. It is also observed and as claimed by petitioner that majority of PUC produced by the petitioner caters to fire- cracker industry but the claims of other interested parties that the substitutes are eating the market of PUC were denied by the petitioner. Further the other interested parties have not provided any evidence/justification to substantiate their claim. Hence, it cannot be accepted that the substitutes are eating the market of PUC. 58. Although, the PUC is mainly used in manual packaging like fire-cracker industries, bangles etc., the imports are also mainly catering to the same market. G.3.2 Volume effect of dumped imports on domestic industry a) Imports in absolute and relative terms 59. With regard to the volume of the dumped imports, the Authority is required to consider whether there has been a significant increase in the dumped imports, either in absolute terms or in relation to production or consumption in India. For the purpose of the injury analysis, the Authority has relied upon the transaction-wise data of DGCI&S. The import volumes of the subject goods and share of the same during the injury investigation period are as follows: +-------------------------------------------+----------+---------+---------+---------+---------+ | Particulars | Unit | 2019-20 | 2020-21 | 2021-22 | POI | +===========================================+==========+=========+=========+=========+=========+ | Import Volume | | | | | | +-------------------------------------------+----------+---------+---------+---------+---------+ | Import from China PR | MT | 324 | 350 | 518 | 1041 | +-------------------------------------------+----------+---------+---------+---------+---------+ | Imports from other countries | MT | 1 | 3 | 7 | 30 | +-------------------------------------------+----------+---------+---------+---------+---------+ | Total imports | MT | 325 | 353 | 525 | 1071 | +-------------------------------------------+----------+---------+---------+---------+---------+ | Subject imports from subject countries in relation| | | | | | +-------------------------------------------+----------+---------+---------+---------+---------+ | Total imports | % | 99.69 | 99.15 | 98.67 | 97.20 | +-------------------------------------------+----------+---------+---------+---------+---------+ | Indian production | MT | *** | *** | *** | *** | +-------------------------------------------+----------+---------+---------+---------+---------+ | Indian production | % | *** | *** | *** | *** | +-------------------------------------------+----------+---------+---------+---------+---------+ | Indian demand | % | *** | *** | *** | *** | +-------------------------------------------+----------+---------+---------+---------+---------+ | Total demand (domestic sales) | MT | *** | *** | *** | *** | +-------------------------------------------+----------+---------+---------+---------+---------+ 60. It is seen that: a. Imports from China has increased throughout the injury period, especially in the POI. The volume of subject imports has increased by over 300% in the POI as compared to the base year. b. Imports from the subject country constitute almost the entirety of the total imports into India throughout the injury period and 97% in the POI. с. Imports remained significant over the injury period in relation to production and consumption in India. d. Imports of the PUC are significant and cater to approximately 50-60% of the demand of the subject goods in India. e. Subject imports have captured 50-60% of the Indian market despite the applicant having sufficient capacity to meet the entire domestic demand. The rise in Chinese imports was far sharper compared to the increase in demand. The increase in total demand is 5-15% in the POI compared to base year, whereas, total imports have increased by 300% from the base year. 61. It has been contended by the respondents that the imports during the period of shutdown of the applicant's operations were made to fulfil the demand supply gap in the country. However, the Authority notes that there was a further increase in import volumes from 524MT to 1071MT from 2021 – 2022 to the POI, when the applicant was in operation. 62. The Authority proposes to hold that the imports of the PUC in absolute terms besides remaining significant over the injury period, increased significantly in the POI. In terms of imports in relative terms the same is seen to have remained significant over the injury period. G.3.3. Price effect of dumped imports on domestic industry 63. In terms of Annexure II (ii) of the Rules, with regard to the effect of the dumped imports on prices, the Authority is required to consider 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 or prevent price increases, which otherwise would have occurred, to a significant degree. 64. Accordingly, the impact on the prices of the domestic industry on account of dumped imports of the subject goods from the subject country has been examined with reference to price undercutting and price suppression/depression, if any. For the purpose of this analysis the cost of sales and the net sales realization (NSR) of the domestic industry have been compared with the landed price of the subject imports from the subject country. a) Price undercutting 65. With regards to the effect of the dumped imports on prices, it is required to be analysed whether there has been significant price undercutting by the dumped imports as compared to the price of the like article in India, or whether the effect of such imports is otherwise to depress the price or prevent price increases, which otherwise would have occurred in the normal course. The same has been examined in the table below: +-------------------+-----------+-----------+-----------+-----------+---------+ | Particulars | Unit | 2019-20 | 2020-21 | 2021-22 | POI | +===================+===========+===========+===========+===========+=========+ | Landed value of | Rs/MT | *** | *** | *** | *** | | imports | | | | | | +-------------------+-----------+-----------+-----------+-----------+---------+ | Net Sales | Rs/MT | *** | *** | *** | *** | | Realisation | | | | | | +-------------------+-----------+-----------+-----------+-----------+---------+ | Price Undercutting| Rs/MT | *** | *** | *** | *** | +-------------------+-----------+-----------+-----------+-----------+---------+ | % of Landed Value | | *** | *** | *** | *** | +-------------------+-----------+-----------+-----------+-----------+---------+ | Range | | 150-200 | 50-150 | 0-50 | 50-150 | +-------------------+-----------+-----------+-----------+-----------+---------+ 66. It is seen that the price undercutting is positive and significant throughout the injury period. The average import prices went up from 2019-20 to POI. Nevertheless, throughout the injury period considered, the average import prices from the subject country concerned were consistently lower than Indian producer's prices. b) Price Suppression or Depression 67. For the purpose of analysing price suppression and depression effect of the dumped imports on the domestic industry, the Authority has compared the cost of sales & selling price of the domestic industry with the landed price of subject goods. +--------------------+-------+---------+---------+---------+---------+ | Particulars | Unit | 2019-20 | 2020-21 | 2021-22 | POI | +====================+=======+=========+=========+=========+=========+ | Cost of sales | Rs/MT | *** | *** | *** | *** | +--------------------+-------+---------+---------+---------+---------+ | Trend YoY | | 100 | 110 | 70 | 146 | +--------------------+-------+---------+---------+---------+---------+ | Net Sales Realisation| Rs/MT | *** | *** | *** | *** | +--------------------+-------+---------+---------+---------+---------+ | Trend YoY | | 100 | 100 | 97 | 143 | +--------------------+-------+---------+---------+---------+---------+ 68. It is seen that the cost of sales and selling price of the domestic industry increased over the injury period. However, the increase in cost was higher than the level of increase in selling price. Import price is less than half the cost of production in the POI. Subject import, priced even below cost, forced the domestic industry to keep its selling price much below cost. Imports are thus seen to have caused price suppression in the Indian market. G.3.4. Economic parameters of the domestic industry 69. Annexure II to the Rules provide that the examination of the impact of the dumped imports on the domestic industry should include an objective and unbiased evaluation of all relevant economic factors and indices having a bearing on the state of the industry, including actual and potential decline in sales, profits, output, market share, productivity, return on investments or utilization of capacity; factors affecting domestic prices, the magnitude of the margin of dumping; actual and potential negative effects on cash flow, inventories, employment, wages, growth and the ability to raise capital investments. Accordingly, various injury parameters relating to the domestic industry are discussed herein below. 70. The performance of the applicant in the POI has been compared with its performance in the base year and its performance in the previous year due to 2020 – 2021 and 2021 – 2022 being abnormal periods due to Covid-19 and restrictions placed on movement on non-essential goods. a) Capacity, Production, Capacity Utilization and Sales 71. The performance of the domestic industry with regards to capacity, production, capacity utilization and sales is as follows: +---------------------+----------+---------+---------+---------+---------+ | Particulars | Unit | 2019-20 | 2020-21 | 2021-22 | POI | +=====================+==========+=========+=========+=========+=========+ | Capacity | MT | *** | *** | *** | *** | +---------------------+----------+---------+---------+---------+---------+ | Trend | | 100 | 83 | 100 | 100 | +---------------------+----------+---------+---------+---------+---------+ | Production | MT | *** | *** | *** | *** | +---------------------+----------+---------+---------+---------+---------+ | Trend | | 100 | 69 | 100 | 70 | +---------------------+----------+---------+---------+---------+---------+ | Capacity Utilisation| % | *** | *** | *** | *** | +---------------------+----------+---------+---------+---------+---------+ | Trend | | 100 | 82 | 100 | 70 | +---------------------+----------+---------+---------+---------+---------+ | Domestic Sales | MT | *** | *** | *** | *** | +---------------------+----------+---------+---------+---------+---------+ | Trend | | 100 | 63 | 104 | 59 | +---------------------+----------+---------+---------+---------+---------+ 72. It is seen that: a. Demand for PUC has increased over the injury period. b. The capacity of the domestic industry remained constant. The applicant has sufficient capacity to meet the entire demand for the subject goods in the country. с. Production and sales of the domestic industry has declined significantly in the POI as compared to both base year and previous year. b) Market Share in Demand 73. The market share is given in the table below: +-----------------------------+----------+---------+---------+---------+---------+ | Particulars | Unit | 2019-20 | 2020-21 | 2021-22 | POI | +=============================+==========+=========+=========+=========+=========+ | Applicant Domestic Sales | MT | 1,450 | 913 | 1,511 | 849 | +-----------------------------+----------+---------+---------+---------+---------+ | Applicant* | % | 82 | 72 | 74 | 44 | +-----------------------------+----------+---------+---------+---------+---------+ | Trend from base year | | 100 | 63 | 104 | 59 | +-----------------------------+----------+---------+---------+---------+---------+ | Subject country Imports | MT | 324 | 350 | 518 | 1041 | +-----------------------------+----------+---------+---------+---------+---------+ | Subject country Imports | % of | 18 | 28 | 25 | 54 | | | total | | | | | | | demand | | | | | +-----------------------------+----------+---------+---------+---------+---------+ | Trend from base year | | 100 | 108 | 160 | 321 | +-----------------------------+----------+---------+---------+---------+---------+ | Imports from other countries| MT | 1 | 3 | 7 | 30 | +-----------------------------+----------+---------+---------+---------+---------+ | Imports from other countries| % | 0.06 | 0.24 | 0.34 | 1.56 | +-----------------------------+----------+---------+---------+---------+---------+ | Trend from base year | | 100 | 3 | 7 | 30 | +-----------------------------+----------+---------+---------+---------+---------+ | Total Demand | MT | 1,775 | 1,266 | 2,036 | 1,920 | +-----------------------------+----------+---------+---------+---------+---------+ | Trend from base year | | 100 | 71 | 115 | 108 | +-----------------------------+----------+---------+---------+---------+---------+ 74. It is seen that the market share of the subject country has increased significantly over the injury period. Applicant's share in demand has continuously declined over the injury period as compared to base year 2019-20. Despite the applicant being the sole producer in India and holding sufficient capacity to cater to the existing demand, the domestic industry barely holds a share of *** % in the Indian market. 75. As regards the argument of the other interested parties, that the applicant significantly recovered market share in the POI despite shutdown in previous year, it is noted that the performance of the applicant has been compared to both the base year and previous year. As seen above the applicant's market share has deteriorated in comparison to both, the base year and the performance in the previous year despite a significant increase in demand in the POI. c) Profitability, Cash profits, and Return on Capital Employed 76. The profit, profitability, cash profits, profit before interest (PBIT), and return on investment of the domestic industry over the injury period has been analysed as follows: +-----------------------+-----------+-----------+-----------+-----------+---------+ | Particulars | Unit | 2019-20 | 2020-21 | 2021-22 | POI | +=======================+===========+===========+===========+===========+=========+ | Import price from China| Rs/MT | 126994 | 183344 | 243838 | 309441 | +-----------------------+-----------+-----------+-----------+-----------+---------+ | Cost of Sales | Rs/MT | *** | *** | *** | *** | +-----------------------+-----------+-----------+-----------+-----------+---------+ | Trend | | 100 | 110 | 70 | 146 | +-----------------------+-----------+-----------+-----------+-----------+---------+ | Selling price | Rs/MT | *** | *** | *** | *** | +-----------------------+-----------+-----------+-----------+-----------+---------+ | Trend | | 100 | 100 | 96 | 138 | +-----------------------+-----------+-----------+-----------+-----------+---------+ | Profit before tax (PBT)| Rs/MT | *** | *** | *** | *** | +-----------------------+-----------+-----------+-----------+-----------+---------+ | Trend | | -100 | -214 | 193 | -232 | +-----------------------+-----------+-----------+-----------+-----------+---------+ | PBT as % of cost | % | *** | *** | *** | *** | +-----------------------+-----------+-----------+-----------+-----------+---------+ | Trend | | -100 | -189 | 274 | -158 | +-----------------------+-----------+-----------+-----------+-----------+---------+ | Cash Profit | Rs/MT | -17955 | -53184 | 96778 | -37062 | +-----------------------+-----------+-----------+-----------+-----------+---------+ | Trend | | -100 | -296 | 539 | -206 | +-----------------------+-----------+-----------+-----------+-----------+---------+ | ROCE | % | *** | *** | *** | *** | +-----------------------+-----------+-----------+-----------+-----------+---------+ | Trend | | 100 | 29 | 301 | 4 | +-----------------------+-----------+-----------+-----------+-----------+---------+ 77. It is seen that: a. The applicant's cost of sales has increased significantly over the injury period, except in the year 2021-22, wherein the applicant's cost of sales significantly declined. However, cost of sales increased in the POI by as much as 46% compared to the base year. The applicant has been selling its product at prices much below its cost of sales since the base year except 2021-22. The applicant has explained that due to the presence of low-priced imports, the domestic industry has not even been able to recover even its cost of sales. The applicant has been experiencing losses since the base year. However, these losses have aggravated in the POI. b. The applicant incurred significant losses in 2019-20, and 2020-21 as well. In the base year while the import price was at its lowest, the cost of sales for the domestic industry was also the lowest in the injury period. Although landed value has improved in the POI as compared to 2019-20, it remains significantly below the cost of sales of the applicant. In fact, the difference in cost of sales to import price has been highest in the POI, thus resulting in such significant losses in the POI. The applicant's PBIT and cash profits have followed the same trend as profits. c. Despite there being an increase in demand over the injury period and the resultant increase in sales of the domestic industry, the cash profits and return on capital employed declined over the injury period. d) Inventory 78. The data relating to inventory position of the domestic industry over the injury period and POI is given in the table below: +-------------------+----------+---------+---------+---------+---------+ | Particulars | Unit | 2019-20 | 2020-21 | 2021-22 | POI | +===================+==========+=========+=========+=========+=========+ | Opening Inventory | MT | *** | *** | *** | *** | +-------------------+----------+---------+---------+---------+---------+ | Trend | | 100 | 32 | 14 | 10 | +-------------------+----------+---------+---------+---------+---------+ | Closing Inventory | MT | *** | *** | *** | *** | +-------------------+----------+---------+---------+---------+---------+ | Trend | | 100 | 45 | 30 | 336 | +-------------------+----------+---------+---------+---------+---------+ | Average Inventory | MT | *** | *** | *** | *** | +-------------------+----------+---------+---------+---------+---------+ | Trend | | 100 | 35 | 18 | 89 | +-------------------+----------+---------+---------+---------+---------+ 79. The Authority notes that level of inventories with the domestic industry has increased substantially from 2021- 2022 to the POI. Such increase in inventories is significant in the POI when import volumes have also shown a significant increase. Closing stock at the end of the POI was over ten times the opening stock in the POI. e) Employment, Wages and Productivity 80. The position with regard to employment, wages and productivity of the domestic industry is as follows: +---------------------+----------+---------+---------+---------+---------+ | Particulars | Unit | 2019-20 | 2020-21 | 2021-22 | POI | +=====================+==========+=========+=========+=========+=========+ | No of employees | Nos. | *** | *** | *** | *** | +---------------------+----------+---------+---------+---------+---------+ | Trend | | 100 | 79 | 22 | 80 | +---------------------+----------+---------+---------+---------+---------+ | Salaries & Wages | ₹ Lacs | *** | *** | *** | *** | +---------------------+----------+---------+---------+---------+---------+ | Trend | | 100 | 81 | 34 | 106 | +---------------------+----------+---------+---------+---------+---------+ | Productivity Per day| MT/Day | *** | *** | *** | *** | +---------------------+----------+---------+---------+---------+---------+ | Trend | | 100 | 69 | 100 | 70 | +---------------------+----------+---------+---------+---------+---------+ 81. The Authority notes that the number of employees of the domestic industry has decreased over the injury period. The salaries paid have registered an increase. Further, the productivity has also shown a decreasing trend in consonance with the movement of production. f) Growth 82. The information with respect to growth of the petitioner is given below: +-------------------+------+---------+---------+---------+ | Particulars | Unit | 2020-21 | 2021-22 | POI | +===================+======+=========+=========+=========+ | Capacity Utilization| % | -7.89 | 7.89 | -13.58 | +-------------------+------+---------+---------+---------+ | Production | % | -31 | 46 | -30 | +-------------------+------+---------+---------+---------+ | Sales | % | -37 | 65 | -44 | +-------------------+------+---------+---------+---------+ | Average Inventory | % | -65 | -48 | 388 | +-------------------+------+---------+---------+---------+ | Profit per unit | % | 114 | -190 | -220 | +-------------------+------+---------+---------+---------+ | Cash Profit | % | 86.47 | -401.07 | -121.52 | +-------------------+------+---------+---------+---------+ | ROI | % | -5.96 | 22.74 | -24.77 | +-------------------+------+---------+---------+---------+ 83. It is seen that the dumped imports have adversely affected the growth of the domestic industry in respect of both volume and price parameters. g) Magnitude of Dumping and Dumping Margin 84. It is seen that dumping margin is not only more than de-minimis but also significant. G.3.5 Examination of Causal Link NON-ATTRIBUTION ANALYSIS (OTHER FACTORS) 85. Para (v) of Annexure – II to the AD Rules, 1995 requires the Authority to establish that the domestic industry is suffering injury due to the dumped imports. At the same, the Authority is required to examine factors other than the dumped imports that could have impacted the performance of the domestic industry so that the injury caused by other known factors is not attributable to the dumped imports of the subject goods. The relevant factors in this respect include the volume of subject goods not sold at dumped prices, contraction in demand or changes in the pattern of consumption, trade restrictive practices, changes in technology, the export performance of the domestic industry and the productivity of the domestic industry. The aforementioned factors have been examined below: a) Volume and prices of imports from third countries 86. It is seen that almost entirety of the imports of the subject goods are entering India from the subject country. In any case, the volume of non-subject imports is not only miniscule in the POI but also priced much higher than the import price from China PR. Therefore, imports from other countries are not a cause of material injury suffered by the domestic industry. +--------------------------+----------+---------+---------+---------+---------+ | Particulars | Unit | 2019-20 | 2020-21 | 2021-22 | POI | +==========================+==========+=========+=========+=========+=========+ | Import Volume | | | | | | +--------------------------+----------+---------+---------+---------+---------+ | Subject Country | MT | 324 | 350 | 518 | 1041 | +--------------------------+----------+---------+---------+---------+---------+ | Other Countries | MT | 1 | 3 | 7 | 30 | +--------------------------+----------+---------+---------+---------+---------+ | Total | MT | 325 | 353 | 525 | 1071 | +--------------------------+----------+---------+---------+---------+---------+ | Subject Country (CIF Price)| ₹/MT | 1,26,994| 1,83,344| 2,43,838| 3,09,441| +--------------------------+----------+---------+---------+---------+---------+ | Other Countries (CIF Price)| ₹/MT | 8,15,266| 1,29,720| 8,64,738| 8,17,990| +--------------------------+----------+---------+---------+---------+---------+ b) Contraction in Demand 87. It is seen that, the demand increased over the injury period. Demand in 2020-21 and 2021-22 collapsed due to Covid 19 and the restriction in movement of non-essential goods. Thereafter, the demand increased in the POI. The demand is at its highest level in the POI during the injury period. 88. While there may have been a decline in the demand for the product in the previous investigations, due to BOPP and single use plastics eating up the market share of the subject goods, the demand is once again showing an increasing trend. The subject goods are primarily used in the firecracker industry but with the ban on single use plastic and increasing awareness about eco-friendly products, the demand in other segments is gradually maturing. c) Changes in pattern of consumption 89. It is seen that there are no changes in the pattern of consumption for the product under consideration over the injury period that could have caused injury to the domestic industry. 90. While other uses of the subject goods, like applications in food items, wrapping of soap and detergent, art and craft purposes, etc., have emerged in the recent few years, it is seen that the subject goods, whether domestic or imported, are primarily being used by the firecracker industry where it cannot be substituted with any other product. The firecracker industry is bound to use the subject goods as it can effectively be sealed using simple adhesive and does not pose a fire hazard unlike heat sealing of any plastics wrap. Hence, the firecracker industry is heavily reliant on the subject goods due to their functional and safety advantages, with no other suitable alternatives available. d) Conditions of competition and trade restrictive practices 91. None of the interested parties have argued or brought forth any evidence regarding any trade restrictive practices that could have impacted the domestic industry's performance. The Authority notes that the investigation has not shown any change in the conditions of competition or any trade restrictive practices. e) Developments in Technology 92. It is seen that there are no significant changes in technology. f) Export performance of the domestic industry 93. As compared to previous years, the applicant's exports have declined. It is noted, however, that the applicant's export sales have not been a significant portion of its total sales. Thus, the applicant's export performance has not impacted the applicant's domestic sales performance. g) Performance of other products 94. The domestic industry is the sole producer of the PUC, hence performance of other products is not relevant in the present investigation. FACTORS ESTABLISHING CAUSAL LINK 95. After examining the factors enumerated above, the Authority holds that the domestic industry has not suffered injury in the POI due to other factors. Further, the following factors show that the injury to the domestic industry is due to the subject imports: i) Imports of the subject goods have increased in absolute as well as relative terms, over the injury period, especially in the period of investigation. ii) Landed price is not only below the level of selling price but also below the cost of sales leading to price suppression in the market. iii) The capacities are grossly underutilised in view of imports. With increase in subject imports, the capacity utilisation of the domestic industry has declined to *** % in the POI. iv) The domestic industry has not been able to increase its production and sales commensurate with the increase in demand. In fact, production and sales in the POI have declined, despite an increase in demand. v) Market share of subject imports increased from *** % in the base year to *** % in the POI. Dumped imports, thus, hold a majority share in the total demand in India, while the applicant's share has decreased from *** % to *** % from the base year to the POI. vi) Inventories of the domestic industry have been significant, as the domestic industry has not been able to increase its sales in proportion to the increase in demand. Imports have been aggressively capturing the demand in India. vii) Subject imports, that are entering the market at prices below cost, are driving the prices in the market. The applicant is forced to sell at prices below its cost. Consequently, the domestic industry is in losses and its profitability and return on capital employed are drastically affected. 96. The above analysis indicates that the domestic industry is suffering material injury due to increasing dumped imports of PUC into India from subject country. There exists a strong causal relation between the increase in dumped imports of the subject goods originating in or exported from the subject country and the material injury suffered by the domestic industry. H. MAGNITUDE OF INJURY MARGIN 97. The Authority has determined the NIP for the domestic industry on the basis of principles laid down in the Rules read with Annexure III, as amended. The NIP of the product under consideration has been determined by adopting the information/data relating to the cost of production provided by the domestic industry for the POI. The NIP has been considered for comparing the landed price from the subject country for calculating the injury margin. For determining the NIP, the best utilisation of the raw materials and utilities has been considered over the injury period. Best utilisation of production capacity over the injury period has been considered. Extraordinary or non-recurring expenses have been excluded from the cost of production. A reasonable return (pre-tax @ 22%) on average capital employed (i.e., average net fixed assets plus average working capital) for the product under consideration was allowed as pre-tax profit to arrive at the NIP as prescribed in Annexure III to the Rules. 98. Based on the landed price and the NIP determined as above, the injury margin as determined by the Authority is provided in the table below. +-----------+--------+---------+-----------+-----------+---------+ | Company | NIP | Landed | Injury Margin (1USD = 81.06) | | | | Price | | | | +-----------+--------+---------+-----------+-----------+---------+ | Unit | INR/K G| INR/KG | INR/K G | USD/K G | % of | | | | | | | landed | | | | | | | price | | | | | | | Range | +===========+========+=========+===========+===========+=========+ | Shandong | *** | *** | *** | *** | *** | | Group | | | | | Negative| +-----------+--------+---------+-----------+-----------+---------+ | Others | *** | *** | *** | *** | *** | | | | | | | 30-40% | +-----------+--------+---------+-----------+-----------+---------+ I. INDIAN INDUSTRY'S INTEREST & OTHER ISSUES I.1 Submissions by other interested parties 99. The following submissions have been made by the other interested parties with regards to public interest: i) The applicant is attempting to block material from all other sources. ii) 70% of the subject goods is used for packaging of firecrackers. Imposition of duties could threaten the survival of small-scale firecracker manufacturers. Even if the imposition has a small impact on the overall cost of the downstream product, considering that the user base majorly comprises of small industries, this impact will be magnified. iii) Biodegradable transparent films are already more expensive than single use plastic. If the cost of procurement increases further, it will drive down the Government's initiative to promote the usage of the former. The PUC is in huge demand in promising segments like food packaging. However, applicant is not equipped to cater to it, since their product is outdated and suffers from significant quality issues. The PUC produced by them for the food segment is currently unavailable on its own website. Moreover, the customer reviews show that the applicant cannot cater to this segment due to its poor quality. iv) The tender documents submitted by the applicant industry need careful scrutiny. In many cases, supplies were sourced from the applicant industry itself rather than from imported sources as claimed. A copy of the analysis of the Authority should be provided to all the interested parties also. I.2 Submissions by the domestic industry 100. The following submissions have been made by the domestic industry with regards to public interest: i) It is in the interest of consumers to have a market with fairly priced products powered by a domestic industry that can compete with the imports. ii) Encouraging domestic manufacturing activities in India is essential to aid its role in becoming a manufacturing powerhouse. Domestic production will further boost employment and increase the GDP of the country. iii) Imposition of anti-dumping duties is essential to ensure a level playing field and prevent India from becoming solely import reliant on the product. The applicant is the sole producer of the subject goods in India. In case it collapses, the Indian market would become entirely reliant on imports to meet the demand of the subject goods, leading to issues such as high prices, disrupted availability, or trade deficits in a larger picture. iv) The applicant company is a multi-product company. If the performance of one of the business divisions of the applicant encounters severe setbacks, it will inevitably affect other divisions within the company as well. Therefore, the viability of this product is of utmost importance for the entire ecosystem of the applicant company. v) The ultimate consumer of the subject goods is not getting any benefits of the low-priced imports. The subject goods are imported by traders who ultimately sell it to the consumers. Such sales by traders are vi) made at prices that are slightly undercutting the prices of the domestic industry. Hence, it is only the traders who are pocketing a huge profit margin and gaining market share of the product. This is substantiated from the information available in public domain, where a public sector undertaking releases tenders for procurement of subject goods. The tender has been awarded to traders whose bid value is much higher than the import price. vii) The cost on account of cellophane transparent film for a consumer is miniscule. The downstream user of the subject goods are industries using Cellophane transparent film for packaging of firecrackers, sweets, silver, etc. The cost on account of cellophane transparent film on the selling price of end products is as low as 0.03%. Further, as per communications received from firecrackers of firecrackers that use cellophane transparent film to pack and wrap their product shows that on an average cellophane transparent film constitutes 2-3% of the cost of firecrackers. viii) The subject goods imported from China PR were previously subject to anti-dumping measures. There is no public information to show that the previously imposed measures on cellophane transparent film had any adverse impact on the end consumer. ix) Cellophane transparent film is made from wood pulp. Hence, it is non-toxic, biodegradable and environment friendly. It is a sustainable alternative to plastic films and thus, can help reduce the detrimental impact of plastic waste on the environment, wildlife and wellbeing of the population of the country. Further, with the rising awareness of the ill-impact of plastic and governments worldwide banning single use plastic, the demand for the subject goods is only going to increase. I.3 Examination by the Authority 101. The Authority notes that the purpose of imposition of anti-dumping duty, in general, is to eliminate injury caused to the domestic industry by the unfair trade practices of dumping so as to re-establish a situation of open and fair competition in the Indian market, which is in the general interest of the country. Imposition of anti-dumping measures does not aim to restrict imports from the subject country in any way. Trade remedial investigations are intended to restore equal competitive opportunities in the domestic market by ensuring a level playing field for domestic producers by the imposition of appropriate duties against trade distorting imports. At the same time, the Authority is aware that the impact of such duties is not limited to only the domestic producers of the PUC but also affects the users and consumers of the PUC. Moreover, the imposition of duties may introduce competition concerns domestically but can concurrently stimulate the emergence of new producers within the country. 102. The Authority issued initiation notification inviting views from all the interested parties, including importers, consumers and others. The Authority also prescribed a questionnaire for the users/ consumers to provide relevant information about the present investigation including any possible effects of anti-dumping duty on their operations. Information was sought on, inter-alia, interchangeability of the product supplied by various suppliers from different countries, ability of the domestic industry to switch sources, effect of anti-dumping duty on the consumers, factors that are likely to accelerate or delay the adjustment to the new situation caused by imposition of anti-dumping duty. 103. The Authority had prescribed an economic interest questionnaire which was sent to all the user industries of the investigation. 104. The opposing interested parties have not provided any quantifiable and/or verifiable information on the likely impact of anti-dumping duty on the downstream industry and end customers. 105. It is noted that there is no demand-supply gap in the country. The applicant is the sole producer of the subject goods in India but holds more than sufficient capacity to cater to the entire demand for the subject goods in the country. The applicant has a capacity of *** MT as against a demand of *** MT in the POI. 106. The impact on downstream user of the subject goods are the industries using cellophane transparent film for packaging of sweets, silver, firecrackers etc is given below: Sweets- Kaju Barfi of 1 kg Use of Cellophane as a Separator +---------------------------+------------+ | Quantity | Price (Rs.)| +===========================+============+ | 1 kg box | 800 | +---------------------------+------------+ | 1 piece of A4 sheet | 1 | +---------------------------+------------+ | % of Cost of uses of 1 A4 | 0.13% | | Sheets | | +---------------------------+------------+ Sliver Ornaments - 100 Gm Use of Cellophane as a Wrapper +---------------------------+------------+ | Quantity | Price (Rs.)| +===========================+============+ | 100 Gm @ Rs. 60000/Kg | 6000 | +---------------------------+------------+ | 1 piece of A4 sheet | 1 | +---------------------------+------------+ | % of Cost of uses of 1 A4 | 0.02% | | Sheets | | +---------------------------+------------+ 107. The number of sheets used in the packaging of one sweet box is limited to 1 and the overall percentage of cost in it is just 0.13% and in case of packaging of silver ornaments, it is 0.02%. Further, the major consumer of cellophane transparent film is firecracker industry and the cost on account of cellophane transparent film constitutes only 2 – 3% of cost of firecrackers as claimed by one of the downstream industries. The percentage of the product used in the industry and its costing is quite low and the impact of the price change of the PUC on the downstream industry is negligible. J. POST DISCLOSURE COMMENTS: J.1 Submission of Other Interested Parties: 108. The following submissions have been made by the other interested parties with regard to the public interest: i. The interested parties have no comments on the scope of Product Under Consideration (PUC). ii. The interested parties have no comments on the observations regarding the standing of the applicant as the domestic industry. iii. With regard to determination of individual anti-dumping duty rate it is submitted that the exporters have provided all necessary data and cooperated fully during the investigation, including desk verification and post-verification processes. iv. With regard to assessment of demand and absence of injury, it is submitted that the domestic industry is not facing injury from the imports of the PUC. There are discrepancies in the injury data submitted by the applicant and the losses are due to outdated manufacturing processes, not imports. v. The public interest and impact analysis lacks a price comparison between the PUC and single use plastic, as both these products cater to the same markets and for similar purposes. The analysis should consider lower prices of products and include a comparison between PUC and single-use plastic. vi. With regard to non-attribution analysis and Indian industry's interest, it is submitted by the interested parties that imposing anti-dumping duty would negatively affect small-scale industries using the PUC. Affordable availability of the PUC is crucial for promoting solar energy usage in India. J.2 Submission of Domestic Industry: 109. The following submissions have been made by the domestic industry with regards to public interest: i. Imports from the subject country have increased in absolute terms and are significant in relative terms. Demand has increased throughout the injury period. However, the increase in imports is much more than the increase in demand. ii. The landed value of imports is much below the cost of the domestic industry. The gap between the landed price and costs was the highest in the POI. Hence, not only are the subject imports undercutting the prices of the domestic industry but also undercutting its costs. iii. The injury to the domestic industry is not due to factors other than dumped imports. Imports from non- subject country form hardly 3% of the total imports into India. The demand for the subject goods has increased with increasing awareness about eco-friendly products. There has been no change in pattern of consumption or in the condition of competition. Further, there has been no change in technology. In fact, the applicant makes continuous efforts to remain updated and ensures that its facilities are at par with the global standards. iv. The subject goods were subject to anti-dumping duty in the past. However, there is no public information to show that such duties had any adverse impact on the end consumer. V. The subject goods form a very small portion of the overall cost of the downstream industry. An analysis of impact undertaken by the domestic industry shows that duties would have an impact of as low as 0.03% on the downstream industry. vi. The domestic industry has sufficient capacity to cater to the present demand in the country and also the projected increase in demand in the future. vii. While duties do not restrict imports from the subject country, apart from the applicant and producers in China PR, there are other producers of the subject goods in countries like Japan, UK and USA, the consumers can source subject goods from these countries as well. viii. Having a domestic source of supply is a step towards making India self-reliant and Atma-Nirbhar. It is important for the consumers to have a stable, healthy and reliant source of domestic supply. The Indian producer would prioritize the needs of the domestic consumers as opposed to foreign producers who might shift their focus to other countries for profit maximisation. ix. As regards the argument that the sole producer in India would have a monopolistic impact, the applicant has been the sole producer of the subject goods for decades and anti-dumping duty on subject imports was also in place in the past, however, there have been no allegation of abuse of duties or monopolistic attitude by the domestic industry. X. The Authority should recommend duty in terms of US$ for a period of 5 years, as is the general practice of the Authority. J.3 Examination by Authority: 110. The Authority has examined the post disclosure submissions made by the interested parties and notes that majority of the comments are reiterations which have already been suitably examined and adequately addressed in the relevant paras of the final findings. The same are not being repeated in the post-disclosure examination by the Authority for the sake of brevity. The issues raised for the first time in the post disclosure comments/submissions by the interested parties and considered relevant by the Authority are examined below. 111. The Authority provided detailed import data, including bills of entry (number and date), quantity, value, etc. to the exporter for cross-verification of this data with the data and supporting invoices submitted by the M/s Shaoxing Kede New Material Co. in their exporter questionnaire response (EQRs). The exporter was provided ample opportunities to reconcile the discrepancies between these data i.e., the exporter's data and DG Systems data. However, the examination revealed significant inconsistencies, some of the invoices submitted by the exporter were found to exist in DG system but with substantial value mismatches besides overall gross mismatch and some of the invoices submitted by the exporter were not found in the DG system. Given the exporter's inability to adequately justify these disparities, the Authority finds the provided information unreliable for determining individual dumping margins. 112. As regards the comparison of single-use plastic and the subject goods neither the interested parties nor the domestic industry provided any data for comparison. 113. The other interested parties have argued that imposition of anti-dumping duty would negatively impact small- scale industries using the PUC. This argument has already been addressed in the user-impact analysis. K. CONCLUSION 114. Having regard to the contentions raised, submissions made, information provided and facts available before the Authority as recorded above and on the basis of the above analysis of dumping and consequent injury to the domestic industry, the Authority concludes as follows: i) The scope of the product under consideration is “Cellophane Transparent Film” originating in or exported from China PR. ii) The subject goods are classified under the customs sub-headings 39207111 and 48239090. iii) The application has been filed by M/s. Kesoram Rayon, a unit of Cygnet Industries Ltd. The applicant is the only producer of the subject goods in India and constitutes domestic industry, under Rule 2(b) of the Rules and satisfies the criteria of standing in terms of Rule 5(3). iv) The subject goods exported from China PR and the article manufactured by the domestic industry are 'like article' to each other in terms of Rule 2 (d) of the AD Rules, 1995 v) The product under consideration has been exported to India at a price below the normal value, resulting in dumping. The dumping margin is not only above de-minimis level but also significant. vi) Imports from the subject country constitute almost the entirety of the imports into India throughout the injury period, and almost 98% in the POI. Further, the volume of the subject imports increased over the injury period, especially in the POI. vii) The subject imports have captured *** % of the Indian market despite the applicant having sufficient capacity to meet the domestic demand. The rise in Chinese imports was far sharper compared to the increase in demand. As the overall increase in consumption was by only 10% in the POI compared to base year, imports increased by 230% and the Indian producer's sales declined by 41%. viii) The average import prices went up from 2019-20 to the POI. Nevertheless, throughout the injury period, the average import prices from the subject country were consistently lower than the Indian producer's prices. Thus, the imports are undercutting the prices of the domestic industry. ix) The subject imports from China PR have a considerable suppressing impact on the prices of the domestic industry. In order not to lose market share, the domestic industry had no other option but to sell below cost. x) The production, capacity utilization and domestic sales volume have declined over the injury period. xi) The market share of the subject country has increased over the injury period. Consequently, the market share of the domestic industry declined. xii) Despite the applicant being the sole producer in India and holding sufficient capacity to cater to the existing demand, the domestic industry barely holds a share of *** % in the Indian market. xiii) The domestic industry has been in losses throughout the injury period. xiv) The average inventories of the applicant have increased during the POI as compared to the base year. xv) The number of employees of the domestic industry has decreased over the injury period. The salaries paid have registered an increase. Further, the productivity has also decreased in consonance with the movement of production. xvi) The dumped imports have adversely affected the growth of the domestic industry in respect of both volume and price parameters. xvii) The Authority has examined the submissions made by the other interested parties on any other factors which could have caused injury to the domestic industry. No other factor appears to have caused injury to the domestic industry. xviii) The Authority had prescribed an economic interest questionnaire which was sent to all interested parties to this investigation. None of the interested parties except the domestic industry have responded to the economic interest questionnaire. The domestic industry has also provided a quantification of the potential impact of the duty. The Authority has quantified the impact of anti-dumping duty on the consumers which is miniscule. L. RECOMMENDATIONS 115. After examining the submissions made by the interested parties and issues raised therein; and considering the facts available on record, the Authority concludes that: 116. The product under consideration has been exported to India from the subject country below their normal values. 117. The domestic industry has suffered material injury. 118. Material injury has been caused by the dumped imports of subject goods from the subject country. The Authority notes that the investigation was initiated and notified to all interested parties and adequate opportunity was given to the domestic industry, exporters, importers and other interested parties to provide positive information on the aspects of dumping, injury and the causal link. Having initiated and conducted an investigation into dumping, injury and causal link thereof in terms of the Anti-Dumping Rules and having established a positive dumping margin as well as material injury to the domestic industry caused by such dumped imports, the Authority is of the view that imposition of definitive anti-dumping duty is necessary to offset dumping and injury concerning the imports of subject goods originating in or exported from subject countries. Therefore, the Authority recommends imposition of definitive anti-dumping duty on imports of the subject goods originating in or exported from subject countries in the form and manner described hereunder for the period of 5 years from date of imposition. 119. Having regard to the lesser duty rule followed by the Authority, the Authority recommends imposition of Definitive anti-dumping duty equal to the lesser of the margin of dumping and the margin of injury on imports of subject goods originating in or exported from the subject countries, so as to remove the injury to the domestic industry. 120. Accordingly, definitive anti-dumping duty on the subject goods with sub Heading of Tariff Item in column (2), the description is specified in column (3), originating in the country as specified in the corresponding entry in column (4), exported from the country as specified in the corresponding entry in column (5), produced by the producers as specified in the corresponding entry in column (6) and imported into India, an anti-dumping duty at the rate equal to the amount as specified in the corresponding entry in column (7) of the Table below, is recommended to be imposed from the date of the Notification which may be issued by the Central Government in this regard. +-------+--------------+-----------------------+-----------------+---------------------+---------------------+-------------+ | SN. | Sub Heading | Description of Goods | Country of | Country of | Producer | Duty as | | | of Tariff | | Origin | Export | | USD/KG | | | Item | | | | | | +=======+==============+=======================+=================+=====================+=====================+=============+ | 1 | 2 | 3 | 4 | 5 | 6 | 7 | +-------+--------------+-----------------------+-----------------+---------------------+---------------------+-------------+ | 1 | 39207111 | Cellophane | China PR | Any country | Shandong Henglian | nil | | | and | Transparent Film | | including China PR | New Material | | | | 48239090 | | | | | | +-------+--------------+-----------------------+-----------------+---------------------+---------------------+-------------+ | 2 | 39207111 | Cellophane | China PR | Any country | Others | 1.34 | | | and | Transparent Film | | including China PR | | | | | 48239090 | | | | | | +-------+--------------+-----------------------+-----------------+---------------------+---------------------+-------------+ FURTHER PROCEDURE 121. An appeal against the orders of the Central Government that may arise out of this recommendation shall lie before the Customs, Excise and Service tax Appellate Tribunal in accordance with the relevant provisions of the Act. ANANT SWARUP, Designated Authority