Anti-Dumping investigation on imports of Sodium Nitrate - Final findings

November 12, 2014 | Copy of | Notification | F.No. 15/1009/2012-DGAD Notification (Final Standings) Subject: Final findings in the anti-dumping investigation concerning imports of Sodium Nitrate originating in or exported from European Union, China PR, Ukraine and Korea RP-reg No.15/1009/2012-DGAG- Having regard to the Customs Tariff Act, 1975 as amended from time to time (hereinafter referred to as the Act) and the Customs Tariff (Identification, Assessment and collection of Anti-Dumping  Duty on Dumped Articles and for Determination of Injury) Rules 1995 thereof (hereinafter referred to as the Rules or the AD Rules). A.  Background of the case 1.    The Designated Authority received a written application from M/s Deepak Nitrite Limited, Pune, on behalf of the domestic industry, requesting the Authority to initiate anti dumping investigation into the alleged dumping of Sodium Nitrate originating in or exported from European Union, China PR, Ukraine and Korea RP causing injury to the domestic industry. B.  Procedure 2.    The Designated Authority (hereinafter referred to as the Authority) under the above Rules, after having received the written application from M/s Deepak Nitrite Limited, Pune, (hereinafter referred to as the applicant) on behalf of the domestic industry, alleging dumping of Sodium Nitrate (hereinafter referred to as the subject  goods SNA or the product) Originating in or exported from European Union, China PR, Ukraine and Korea RP (hereinafter referred to as the subject countries) causing injury to the domestic industry and on the basis of sufficient prima facie evidence submitted by the applicant justifying the initiation of the investigation, decided to initiate the investigation against imports of the subject goods from the subject countries. (ii)    The Authority notified to the Delegation of the European Union to India, New Delhi, as also the Embassies of China, Ukraine and Korea RP in India about the receipt of the application of dumping allegation before proceeding to  initiate the investigation in accordance with sub-Rule 5(5) of the AD Rules. (iii)    The Authority issued a public notice No 15/1009/2012-DGAD  dated 5th June 2013, published in the Gazette of India, Extraordinary, initiating anti-dumping investigation  concerning  imports  of  the  subject  goods from the subject countries. The Authority issued a corrigendum dated  6th July, 2013 to change the investigation period to October, 2011 – December, 2012. (iv)   The  Authority  forwarded   a  copy  of  the  public  notice  to  all  the  known exporters (whose details were made available in the application) and gave them opportunity to make their views known in writing within forty days from the date of  the  communication  about  the  initiation  of  the investigation in accordance with the Rule 6(2) of the AD Rules. (v)    The Authority also forwarded a copy of the said public notice to all the known importers/users of the subject goods in India and advised them to make their views known in writing within forty days from the date of the communication about the initiation of the investigation. (vi)   The Authority provided a copy of the non-confidential version of application to the known exporters, the Delegation of the European Union to India and the Embassies of China, Ukraine and Korea RP in India in accordance with Rule 6(3) of the AD Rules. A copy of the application was also provided to other interested parties wherever requested. (vii)  The  Authority  sent  questionnaires  to  the  following  known  exporters  in the subject  countries  (whose  details  were  made  available  in  the  application) including the market economy treatment questionnaire to the known exporters from  China  PR  to  elicit  relevant  information in accordance with Rule 6(4) of the AD Rules: a)  JSC “Concern Stirol”, Ukraine b)  Chemo Invest Trade Europe Kft, Hungary c)  Shanxi Calcrete Chemical Co., Ltd., China d)  Shandong Xinhao Chemicals Co., Ltd., China e)  Xiangyand Zedong Chemical Group Co., Ltd., China f)    Zigong Gold Way Chemicals Ltd., China g)  Shandong Hailand Chemical Industry Co Ltd., China h)  ST Chemical, S. Korea i)    Toto International, S. Korea j)    Metachem Corp, S. Korea k)  Siman Ltd., Bulgaria l)    Trade Success Ltd., Bulgaria   (viii)    None  of  the  exporters  /  producers  filed  any  questionnaire    response    or submissions. (ix)    The    Ministry    of    Economic    Development    and    Trade    of    Ukraine submitted its comments on the investigation through the Embassy of Ukraine in New Delhi. (x)    Questionnaires were sent to the following known importers/producers/users of subject goods in India (whose details were made available in the application) calling for necessary information in accordance with Rule 6(4) of the AD Rules: a)    Rajasthan Explosives & Chemicals Ltd., Dholpur, Rajasthan b)    Super Shiv Shakti Chemicals, Bhilwara, Rajasthan c)    Special Blast Ltd., Durg, Chhatish Garh d)    IDL Explosives Ltd., Hyderabad e)    Special Blast Ltd., Sidhi, M.P f)    Ideal Industrial Explosive Ltd., Secunderabad g)    Navbharat Explosive Ltd., Raipur, Chatisgarh h)    Solar Industries India Ltd., Nagpur i)    Mahanadi Metals & Chemicals  Pvt.  Ltd., Sundar  Garh, Orissa j)    Vetrivel Explosive Pvt Ltd., Thuraiyur, Salem k)    Keltech Energies Ltd., Bangalore l)    Grauer Weil (India) Ltd., Dadra m)    Indrajit Industries Ltd., Bangalore n)    Hardcastle Petrofer Pvt., Ltd., Umergaon, Valsad o)    Jaju Chemicals Pvt Ltd., Malegaon p)    Jagatjit Industries, Sahibabad, Dist. Ghaziabad q)    Schott Glass India Pvt Ltd., Bharuch, Gujarat r)    Pooja Glass Works, Firozabad, Uttar Pradesh s)    Saint Gobain Glass India Ltd., Sriperumbudur, Tamilnadu t)    Geeta Glass Works, Firozabad, Uttar Pradesh u)    ShriBal Kishan Agrawal Glass Ind Ltd.,Firozabad, Uttar Pradesh v)    Meera Glass Work, Firozabad, Uttar Pradesh w)    Bisazza India Pvt., Ltd., Budasan x)    Jagdamba Glass Works, Firozabad, Uttar Pradesh y)    Pragati Glass Works Ltd., Kosamba z)    Advance Glass Works, Firozabad, Uttar Pradesh aa)    Rashtriya Chemicals & Fertilizers Ltd, Mumbai bb)    National Fertilizer Ltd, Noida   (xi)    Only three importers/users, namely, Rajasthan Explosives & Chemicals Ltd., Dholpur,  Rajasthan;  Schott  Glass  India  Pvt.  Ltd,  Bharuch;  and  Sandeep Organics Pvt Ltd, Mumbai, responded to the initiation notification. They made some submissions but did not submit any importer questionnaire response. (xii)    The Authority made available non-confidential version of the evidence presented by various interested parties in the form of a public file kept open for inspection by the interested parties. (xiii)    Information provided by interested parties on confidential basis was examined by the Authority with regard to sufficiency of the confidentiality claim. On being satisfied, the Authority has accepted the confidentiality claims, wherever warranted, and such information has been considered confidential and not disclosed  to  other  interested  parties.  Wherever  possible,  parties  providing information  on  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 and other interested parties to the extent deemed necessary. (xv)   The non-injurious price has been worked out on the basis of the information furnished by the domestic industry based on its cost of production and cost to make and sell the subject goods in India, and further as per the guidelines under Annexure III of the AD Rules so as to ascertain whether anti-dumping duty lower than the dumping margin would be sufficient to remove injury to the Domestic Industry. (xvi)   Investigation  was  carried  out  for  the  period  of  investigation  (POI) starting from  October,  2011  to December,  2012.  The  examination  of trends,  in  the context  of  injury  analysis,  covered  the  financial  years  2009-10,  2010-11, 2011-12 and the POI. (xvii)   Request     was    made     to     the     Directorate     General     of     Commercial Intelligence  and Statistics  (DGCI&S)  to arrange  details  of imports  of subject goods for the past three years, including the period of investigation, and the said information was obtained from the DGCI&S. (xviii)  The Authority has examined the information furnished by the domestic producers to the extent possible on the basis of guidelines laid down in Annexure III to work out the cost of production and the non-injurious price of the subject goods in  India  so  as  to  ascertain  if  anti-dumping duty  lower than  the  dumping margin would be sufficient to remove injury to the domestic industry. (xix)   The  Authority,  having  regard  to  the  Act  and  the  AD  Rules,  recommended imposition of provisional Anti-Dumping duties concerning imports of Sodium Nitrate originating in or exported from European Union, China PR, Ukraine and Korea  RP,  vide  its  Preliminary  Findings  Notification  No  15/1009/2012-DGAD dated 06.01.2014. The recommendations made by the Designated Authority were accepted by the Ministry of Finance and interim duties were levied vide Notification No. 14/2014 dated 19th March, 2014 for a period not exceeding six months from the date of publication of the said notification. (xx)   In accordance with Rule 6(6) of the AD Rules, the Authority also provided opportunity to all interested parties to present their views orally in a public hearing held on 24th July, 2014. The parties, which presented their views in the public hearing, were requested to file written submissions of the views expressed orally. The arguments made in the written submissions/rejoinders received from the interested parties have been considered. (xxi)   The original date to complete the investigation was up to 04.06.2014. However, at the request of the Authority, this date was extended by the Ministry of Finance up to 04.12.2014. (xxii)   A Disclosure Statement containing the essential facts in this investigation which would have formed the basis of the Final Findings was issued to the interested parties  on  29.09.2014.  The  post  Disclosure  Statement  submissions  received have been considered, to the extent found relevant, in this Final Findings Notification. (xxiii)  The  submissions  made  by the  interested  parties  considered  relevant  by the Authority have been analyzed and addressed in this investigation. (xxiv) ***in this Final Findings Notification represents information furnished by the interested parties  on  confidential  basis  and  so  considered  by  the  Authority under the Rules. (xxv)  The exchange rate adopted for the POI is 1 US $ =Rs 53.23. C. PRODUCT UNDER CONSIDERATION AND LIKE ARTICLE C.1 Views of the Domestic Industry 3. The product under consideration in the present investigation is Sodium Nitrate, a chemical compound with the formula NaNO3. This salt, also known as Chile saltpeter or Peru saltpeter, is a white solid which is soluble in water. The mineral form is also known as nitratine, nitratite or soda niter. Sodium Nitrate is derived as a co-product in the manufacture of Sodium Nitrite. Ammonia is converted into nitrous oxide at high temperature in the presence of catalyst and the nitrous oxide is then absorbed in caustic soda to get Sodium Nitrite and Sodium Nitrate 4. There are no known grades of the produ Typical applications in which Sodium Nitrate can be used are Heat Transfer Salts and Flux; to manufacture various other Nitrate salts of Potassium & Barium; Agrochemicals; Bulk Intermediates; Manufacture of glass, Blasting powder, Slurry, Dynamite, Matches, FNS and Performance Chemicals, Leather Tanning Chemicals, Imaging and Colour Intermediates, Pharmaceutical Intermediates, Rubber Chemical Intermediates etc. Sodium Nitrate can also be used as a source of nitrogen in production of fertilizers. In fact, it is for this reason that the product is classified under Chapter 31025000 and attracts zero customs duty. There are a number of products available to fertilizer industry in the market which can be used as a source of nitrogen. This includes Urea and Ammonium Nitrate. However, the total cost of nitrogen nutrient in Urea and Ammonium Nitrate in 2012-13 which is Rs 20 per kg and Rs 52 per kg respectively, is much less in comparison to the total cost of nitrogen nutrient in Sodium Nitrate which is Rs 159.68 per kg. It would be seen that if Sodium Nitrate is used as a source of Nitrogen, it would mean eight times cost that would be incurred by a consumer if they use Urea as a source of Nitrogen. Given such a significant difference, it follows that no consumer in fertilizer industry would use Sodium Nitrate as a source of Nitrogen. It is also pointed out that Sodium Nitrate, as a product, is not covered under Fertilizer Control Order. Thus, even when Sodium Nitrate, in theory, can be used as a source of Nitrogen in Fertilizer industry, in fact, none of the fertilizer industry consumers are using Sodium Nitrate. Further, the petitioner does not sell Sodium Nitrate to consumers in fertilizer industry. Given that 59% of the demand for the product in the Country is met by the petitioner, had there been a consumption of Sodium Nitrate in Fertilizer industry, the petitioner would have certainly supplied a significant volume of the same to such consumers. 5.  Sodium Nitrate is classified under customs heading 31025000 under Chapter 31 of the Customs Tariff Act. The Customs classification is,  however, indicative only  and  in  no  way  binding  on  the  scope  of  the  present investigation. The imports  of  the  product  under  consideration  have  also  been  reported   under Chapter  28 under  subheading 2834  (Nitrites  and  Nitrates). There is no known difference in subject product produced by the domestic industry and the subject product exported from the subject territory/countries. Both, the subject product produced by the petitioner and that exported from the subject territory/countries to India have comparable characteristics in terms of parameters such as physical &  chemical  characteristics, manufacturing  process  & technology,  functions  & uses, product specifications, pricing, distribution & marketing and tariff classification, etc. The two are technically  and  commercially  substitutable.  The consumers have used and are using the two interchangeably. There is no significant difference between the goods produced by the domestic industry and imported from subject countries. The alleged difference in values of purity, or difference in colour or physical  forms  does  not  render  the  domestic  product as  dislike  to  the imported product. 6.  Petitioner has collected and referred to transaction-wise imports information from DGCI&S, wherein item description for each transaction is clearly given. There is no doubt about the correctness of the product identified in the transaction-wise import data. Since the petitioner has adopted transaction wise data, the fact that the customs heading for the investigations and proposed measures is broad is entirely immaterial. 7.  The rules require the Designated Authority to specify a description of the product which is sufficient for customs purposes. There is no dispute that the Designated Authority has specified the product description which is sufficient for customs purposes. The Designated Authority has specified customs classification only for customs convenience so that the ADD is appropriately collected. It is not the contention of any interested party that ADD is being collected on a product which is not covered under the product scope. C.2 Views of exporters, importers, consumers, users and other opposing interested parties 8. The opposing interested parties raised the following issues regarding the product under consideration and its scope: (i) There is difference in technical specification of material produced by Bulgaria, China and Ukraine and the domestic industry. The physical forms of the products ar e also different. Material from Bulgaria and China is Crystal form whereas domestic industry produces in powder form. Further, there is a difference in colour and purity of the product imported from these countries and domestically produced product. (ii) There are two Grades of Sodium Nitrate (NANO3) – Technical /Industrial & Fertilizer/Fertilizer Grade. There is difference in HS Code also and rate of VAT (Value added Sales Tax) also. There is also difference in Customs Duty  and  its  application.  HS  Code  of  Technical  /  Industrial  Grade  is 28341010. Sales Tax is 5% VAT. There is 7.5% Basic Duty, 2% Cess & 1% Higher Secondary Cess on Imports. It is not used in Fertilizer / Fertilizer Grade. HS Code of Fertilizer / Fertilizer Grade is 31025000.  Sales  Tax is 12.5% VAT. There  is no Basic Duty, Cess & Higher Secondary Cess. It is not used for Technical / Industrial purpose. (iii) The heading 2834 (nitrites and nitrates) is quite broad. Sodium Nitrate may be part of subheading 283429 (other nitrates), and consequently may fall within code 28342990 (other nitrates). (iv) Ukraine  side  insists  on  the  use  of  code  and  description  detailed  to  the maximum extent possible to identify the product. C.3  Examination by the Authority 9.  The  Authority  notes  that  none  of  the  opposing  interested  parties  filed  any response in the form of exporter's/importer’s questionnaire.  It  has  been claimed that  the  purity  of  the  product  imported  from  China,  Bulgaria  and Ukraine was   higher.   Further, the imported product and domestic product differs in physical forms. Whereas the imported product is in Crystal form, the domestic product is in powder form. It has been claimed that the colour of the imported material is different from the colour of the material supplied by the domestic industry. It is, however, noted by the Authority that no information with regard to  the  nature  of  customers  to  whom  the  imported  product  has been   sold was  provided   to  the   Authority,   nor  the  impact   of   difference   in physical forms  or  purity  or  colour  was  quantified.  On  the  other  hand,  the domestic industry has contended that difference in physical form or purity or colour  does not  render  the  domestic  product  different  from  the  imported product. The domestic industry has contended that the domestic product is a like article to the imported  product.  Further,  the  domestic  industry  has  contended  that  the opposing interested party making these comments should be considered as non- cooperating. 10. The Authority notes that it has not been established that difference in purity, physical form or colour renders domestic product as dislike to the imported product. Nor the interested parties have quantified the impact of the alleged difference on the costs and prices of the product. 11. The   Authority   notes   that   it   has   also   been   claimed   that   fertilizer   and technical/industrial grades are imported under different tariff codes and that whereas fertilizer grade attracts 0.0% basic customs duty, full customs duty is charged on imports reported under technical/industrial applications. The Authority notes that this information provided by the opposing interested parties is just of factual  nature  without  specifically  claiming  to  exclude  one type  or  the  other from   the   scope   of  the   product   under   consideration.    The  petitioner  has contended that though the product can be used as source of nitrogen in the fertilizer industry, they have neither consumed the product in fertilizer applications themselves nor sold to the consumers in India because it is not cost effective. 12. It    is    noted  that    Sodium  Nitrate  falls    under  dedicated  classifications  under 31025000 under Chapter 31. Further, it is observed from the transaction-wise import statistics that the imports of the product under consideration have also been   reported   under   Chapter   28   under   subheading   2834   (Nitrites   and Nitrates). 13. With regard to the contention that the product falls under the category of Other Nitrates, it is clarified that the DA has adopted transaction-wise import data from DGCI&S. Each and every transaction has been analyzed to cull out the product from the entire data. Therefore, the question of any other nitrate being included as product under consideration does not arise. 14. With regard to the use of code and description, it is clarified that the Rules provide for complete description of the product which is sufficient for customs purposes as well as relevant to determination of injury and dumping margin. 15. The Authority, thus, holds that the product under consideration in the present investigation  is Sodium Nitrate. Sodium Nitrate is a chemical compound  with the formula NaNO3. This salt, also known as Chile saltpeter or Peru saltpeter, is a white solid which is very soluble in water. The mineral form is also known as nitratine, nitratite or soda niter. Sodium Nitrate is derived as a co-product in the manufacture of Sodium Nitrite. Ammonia is converted into nitrous oxide at high temperature  in  presence  of  catalyst  and  the  nitrous  oxide  is  then absorbed in caustic soda to get Sodium Nitrite and Sodium Nitrate. Typical applications, therefore,  in  which  Sodium  Nitrate  can  be  used  are  Heat Transfer  Salts and    Flux,   to   manufacture   various   other   Nitrate   salts   of Potassium   & Barium,  Agrochemicals,   Bulk  Intermediates,   Manufacture  of glass,  Blasting powder,   Slurry,   Dynamite,   Matches,   FNS   and   Performance  Chemicals, Leather Tanning Chemicals, Imaging and Colour Intermediates, Pharmaceutical Intermediates, Rubber Chemical Intermediates etc. 16. Sodium Nitrate is classified under customs heading 31025000 under Chapter 31 of the Customs Tariff Act. Further, the imports of Sodium Nitrate have also been reported under Chapter 28 under subheading 2834 (Nitrites and Nitrates). The customs classification  is, however, indicative only and in no way binding on the scope of the present investigation. The Authority includes all imports of Sodium Nitrate whether reported under Chapter 28 or Chapter 31 in the scope of the product under consideration. Like Article 17. Rule 2(d) of the AD Rules defines like article as follows:“an article which is identical or alike in all respects to the article under investigation for being dumped in India or in the absence of such article, another article      which  although not alike in all respects, has the characteristics closely resembling those of the articles under investigation”. 18. The applicant has claimed that there is no known difference in subject product produced by the domestic industry and the subject product exported from the subject territory/countries. Both, the subject   product   produced   by     the petitioner and that exported from the subject territory/countries have comparable characteristics in terms of parameters such as physical & chemical characteristics, manufacturing process & technology, functions & uses, product specifications, pricing, distribution& marketing and tariff classification, e The two are technically and commercially substitutable. The consumers have used (and are using) the two interchangeably. 19. The Authority has examined the matter and notes that there is no known difference in subject goods produced by the domestic industry and that imported into India from the subject territory/countrie The subject goods produced by the domestic industry and that imported from subject territory/countries are comparable in terms of physical & chemical characteristics, manufacturing process & technology, functions & uses, product specifications, pricing, distribution & marketing and tariff classification of the goods. The two are technically and commercially substitutable. The consumers are using the two interchangeably. None of the opposing interested parties has raised any objection in this regard. In view of the same, the Authority holds that the subject goods produced by the petitioner company as domestic like article to the product under consideration imported from the subject territory/countries in accordance with the anti dumping Rules. D. SCOPE OF DOMESTIC INDUSTRY AND STANDING   20. 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’ may be construed as referring to the rest of the producers” D.1  Views of exporters/importers/users  and other opposing interested parties 21. None of the exporters/importers/users  or other opposing interested party has made  any  substantive  submissions  in  this  regard,  except  the  Ministry  of Economic Development and Trade of Ukraine who submitted its comments on the standing of the Domestic Industry as under: a. According to the petition of the domestic industry, the production of the domestic   industry   constitutes   approximately   81%   of   the   total   Indian production  of Sodium Nitrate; Rashtriya  Chem  and NFL being the other two  producers.  There  are  other  producers  such  as  Triveni  Chemicals, Suvidhi  Industries,  Peri  Nitrates  Private  Limited  and  Nikunj  Chemicals. The investigating authority may thus determine the degree of support for the Petition and whether the petition has been made by or on behalf of the domestic industry. 22. Rajasthan Explosives & Chemicals Ltd., Dholpur, Rajasthan did not comment on the scope of the domestic industry and its standing and submitted that they are  the  user  of  Sodium  Nitrate  and  during  the  period  2009-10,  2010-11  & 2011-12, had placed orders for the purchase of this material on different suppliers. They had given the details of the quantity ordered and sources of purchase. They further confirmed that they had not imported this item till 18th July, 2013 and purchased only from indigenous manufacturers and suppliers. D.2  Views of the Domestic Industry 23. The Domestic Industry has made the following submissions: (i)  The petition has been filed by M/s Deepak Nitrite Ltd, Pune. There are two  more  known  producers  of  the  product  during  the  POI  in  India, Rashtriya Chemicals & Fertilisers Ltd. and National Fertilizer Ltd. (ii) The production of the petitioner constitutes a major proportion in Indian production during the period of investigation. (iii) The petitioner constitutes domestic industry within the Rules. (iv) Petition  has  been  filed  by  Deepak  Nitrite  Ltd.,  whose  production constitutes a major share in Indian production. There is no opposition to the petition. None of the companies identified, in fact, are engaged in production of Sodium Nitrate. It is, however, possible that some of these companies are engaged in trading of the product under consideration. In any case, production of these companies cannot be so significant as to render the production of the petitioner so insufficient that the petitioner loses standing under the Rules. D.3  Examination by the Authority 24. M/s  Deepak  Nitrite  Limited  has  filed  the  application  in  the  instant  matter alleging  dumping  of  ‘Sodium  Nitrate’  originating  in  or  exported  from  the European Union, China PR, Ukraine and Korea RP and requested for imposition of  the  anti-dumping   duties.  The  company  has  not  imported  the product under   consideration    from  the   subject    territory/countries    or   any   other countries during  investigation  period  or  over  the  injury  period.  The petitioner is an eligible domestic industry within the meaning of the Rules. None of the interested  parties  has  commented   on  this  issue  except  the  Ministry  of Economic  Development  and  Trade  of  Ukraine  which  have  been  examined. The Government of Ukraine has identified a number of other companies as producers of the product under consideration. The domestic industry has submitted that all these companies may be dealing in Sodium Nitrate but are not producers of Sodium Nitrate. In this regard, the Authority noted that Government of Ukraine has not provided any documentary evidence to show that these other entities identified by them are in fact producer of Sodium Nitrate in India. However, the Authority had sought this information directly from these entities identified by the Government of Ukraine.  No one replied to the Authority except Nikunj Chemicals, Vadodara, who responded that they are not manufacturing this product. The Authority had sought relevant information about identities of Indian producers and their production/sales details of the product under  consideration from  the Administrative Ministry of  Chemicals and Fertilizers,  Government  of  India  as  well.  The  Ministry  of  Chemicals  and Fertilizers has also not responded identifying the entities producing Sodium Nitrate in the country. The Authority notes that it has not been established that the   other   companies   identified   by   Government   of   Ukraine   are   in   fact producers of the product under consideration. The evidence on record does not establish that these companies are domestic industry within the meaning of Rule 2(b). 25. Production  of  the  petitioner in  the  investigation  period  constituted 80% of Indian  production.  On  the  basis  of  information  on  record,  the  Authority determines that production of the applicant constitutes a major proportion in Indian production during the period of investigation and the petition has been made by the domestic industry. The Authority, after examining the facts, determines      that  the  petitioner  constitutes      domestic  industry  within   the meaning of Rule 2(b) of the Anti Dumping Rules, and the petition satisfies the criteria of standing in terms of Rule 5 of the Rules supra. E. MISCELLANEOUS ISSUES E.1 Views of the exporters/importers/users and other opposing interested parties 26. The Ministry of Economic Development and Trade of Ukraine raised the point that  the  periods  of  assessment  for  analysis  were  determined  as  2009-10, 2010-11, 2011-12 and the POI which is October, 2011-December, 2012. Since the POI is more than 12 months, so indices of POI should not be compared with indices of other years. Further, the petitioner has stated that “Petitioner has no exports of the product under consideration”. But according to International Trade Centre, there was export of Sodium Nitrate from India and Deepak Nitrite is one of the exporting companies. 27. Schott Glass India Pv Ltd. did not submit any questionnaire response but only made certain submissions that the petitioner M/s Deepak Nitrate Ltd is regularly increasing its prices of the subject goods and in the last three years, basic price was increased by Rs 900 per MT which is around 39% and if such price increase continues, Schott Glass India Pvt. Ltd will need to develop such product from other competitive markets (domestic/overseas) in order to keep their finish goods' competitiveness and affordability to the domestic pharmaceutical companies. Under the umbrella of anti dumping duty, the manufacturers will get the opportunity to increase their prices as well as the quality standards may deteriorate. The Authority may, therefore, verify as to what kind of counter measures have been taken by the domestic manufacturers to mitigate price increase. 28. Sandeep Organics Pv Ltd. has raised the point that NEOCHIM PLC is the manufacturer in Bulgaria. Fertical Cyprus Ltd is the exporter. Price of Bulgaria is USD 450 PMT CFR Nhava Sheva for 100% Advance Payment. 29. The Ministry of Economic Development and Trade of Ukraine raised the point that no duties shall be levied retroactively on products entered for consumption prior to the date the initiation of the investigation. Thus, the applicant’s claim concerning imposition of anti-dumping duties since the beginning of injury does not have a legal basis. 30. The Ministry of Economic Development and Trade of Ukraine also raised the point that the applicant’s statement that the companies do not take part in the investigation because of the dumping supplies is groundless and unsupported by evidenc Thus, Ukrainian exporters have no interest in this investigation because they did not supply the goods to India for a long period time. In particular, the Ministry was informed of above-said by Ukrainian JSC “Severodonetsk Azot” and JSC “Concern Stirol”. E.2 View of the Domestic Industry 31. The Domestic Industry has made the following submissions: (i)   Given that the investigation period is for 15 months, the petitioner has “annualized” the figures in order to enable comparison with the previous years. (ii) There is no response from the company in Bulgaria. Further, the information contained in the petition clearly shows that import price from Bulgaria is materially lower than the selling price of the domestic industry. (iii)   The  domestic  industry  considers  two  parameters  for fixation  of  its prices.  While  domestic  industry  makes  all  efforts  to  realign  its prices to the changes in costs on account of raw materials and utilities, the  domestic  industry  is  constrained  in  doing  so  from  the  prices offered  by  foreign  producers.  There has been significant increase in the costs  on account  of  raw materials  and  utilities  over  the  injury period  because   of  increase   in  the  prices   of  these   major  raw materials and utilities. Resultantly, the domestic industry was constrained to increase its prices for    the   product    under consideration.  However,  whereas  domestic  industry  should  have ideally increased its prices in proportion to the increase in costs on account  of  raw  materials,  the  domestic  industry  has  been prevented  from  increasing  its  prices  to  the  extent  of  increase  in costs on account of raw materials and utilities. In fact, the increase in price was much lower than the increase in costs on account of raw materials. (iv)  Regarding the point that no duties shall be levied retroactively on products entered for consumption prior to the date of initiation of the investigation, the petitioner has not made any such claim. Nor the Designated Authority has made any such recommendations. (v)        The contention that the exporters have not cooperated because they did not supply the goods to India for a long period of time has no merit in law. Under the Rules, the Designated Authority is required to treat exporters  non  cooperative,  if   they  have  not  filed  questionnaire response. This is not only legal position in India, but also the legal position globally. E.3  Examination by the Authority 32. The Authority has examined the above issues and notes that the contention of Government of Ukraine that POI is a period of more than 12 months, it is clarified that the Authority has compared the POI statistics with the preceding years after annualizing the data for POI.  This is the consistent practice followed by the Authority  in  those  situations  where  the  POI  is  more  or  less  than  twelve months. 33. Regarding,  the  claim  in  the  petition  that  “Petitioner  has  no  exports  of  the product under consideration”, the Authority notes that in Proforma IV-A of the petition, the petitioner has shown exports of the product under consideration in the injury period and the Authority has taken due notice of that. 34. With regard to increase  in price issue raised by Schott Glass India Pvt. Ltd and Sandeep Organics Pvt Ltd, it is noted that though the domestic industry has increased its selling price, the increase in its prices is due to increase in the  cost  of  production.  It  is  further  noted  that  the  increase in  the  cost  of production is due to increase is input prices. In fact, it is found that the price increases are not in proportion to increase in costs. It is noted that imports are suppressing the prices of the domestic industry in the market. 35. With regard to the contention on retroactive imposition of duties, the Authority notes that it is not the practice of the Authority to impose anti dumping duties on retrospective basis. 36. It  is  noted  that  the Authority  proceeds  on  the  basis  of  the  best  information available as per Rule 6(8). Since there is no response from any of the exporters/ producers to the exporters’ questionnaire, the Authority has conducted investigations on the basis of best information available. F.  ASSESSMENT OF DUMPING – METHODOLOGY AND PARAMETERS Methodology for Determination Of Dumping Margin F.1 Normal Value, Export Price and Dumping Margin 37. The  Authority  notes  that  none  of  the  exporters/producers  from  European Union, China PR, Ukraine and Korea RP has responded to the initiation notification   by   filing   exporter   questionnaire   in   the   manner   and   format prescribed and only the Ministry of Economic Development and Trade of Ukraine has made submissions in this regard. F.2 Views of the domestic industry 38. It  has  been  contended  by  the  domestic  industry  that  China  PR  should  be treated as a non-market economy country, inter alia, stating that: (i)  Market economy status cannot be given in a situation where one of the major shareholders is a State owned/controlled entity: The European Commission has consistently held that possibilities of State interference cannot be ruled out in cases where there is significant share of a State owned/controlled entity. It is not only the question of past interferences alone but also possibilities  of potential State interference  in the future after the imposition of anti dumping duties that is relevant for granting market economy treatment. (ii) Market economy status cannot be given unless the responding Chinese exporters establish that the prices of major inputs substantially reflect market values: The Domestic industry contends that “substantially reflect market  values” has been widely interpreted  to mean that the price  of these  inputs  must  be  comparable   to  the  prices  prevailing  in  the international market. The Domestic Industry contends that the fact that such prices are comparable to the price prevailing in China PR is grossly insufficient. (iii) Major  inputs  include  utilities:    The  Domestic  industry  contends  that production of the product concerned requires power and fuel as a major item  of  utility.  Admittedly, while  the  power  supplier  is  a  State  owned entity, insufficient information is available with regard to fuel supplier. It has  not  been  established by  the  exporters that  the  prices of  utilities reflect fair market values. (iv) Market economy status cannot be given unless the responding exporters establish that their books are audited in line with international accounting standards: The Domestic industry contends that Chinese exporters have repeatedly disputed the treatment of European Commission to reject market economy treatment in such situations where Chinese exporters are  unable  to  establish  that  their  books  are  consistent  with  Chinese GAAP. Chinese companies in such cases have been contending that the requirement of insisting on compliance with International Accounting Standards is beyond law. The European Commission has held that the requirement on insisting compliance with International Accounting Standards  is  to  ensure  accuracy  and  adequacy  of  revenues  and expenses, assets and liabilities expressed in the annual report. To quote the European Commission, reliability of the accounts is not established with   regard   to  this  aspect   unless   the   books   are   consistent   with International Accounting Standards. (v) Market economy status cannot be granted even if one of the parameters is not satisfied: The Domestic industry contends that the European Commission has repeatedly insisted that market economy status cannot be granted unless the responding Chinese exporters pass the test in respect of each and every parameter laid down under the Rules. (vi) Onus/obligations: The Domestic industry contends that it is not for the Authority   to   establish   that   the   responding   companies   are   indeed operating  under  market  economy  environment  and  are  entitled  for market  economy  treatment.  On  the  contrary, it  is  for  the  responding Chinese exporters to  establish that they are operating under market economy conditions. (vii)   Transformation:  The Domestic industry contends that in a situation where the current shareholders have not set up their production facilities themselves but have acquired the same from some other party, market economy status cannot be granted unless process of transformation has been completely established through documentary evidence. (viii)  Response from group as a whole: The Domestic industry contends that market  economy  status  cannot  be  granted  unless  the  responding company and its group as a whole make the claim. If one or more companies forming part of the group have not filed the response, market economy status must be rejected, regardless of the fact whether or not the other companies of the group are involved in production or sale of the  product  under  consideration.   It  has  been   contended   that   the Designated Authority has applied such a test in the matter of Vitrified Tiles cases where the whole group has filed response in order to seek market economy status. (ix) Failure  to  satisfy  a  number  of  conditions  mentioned  above  by  the responding Chinese exporters is sufficient to hold that market economy status cannot be granted to responding Chinese companies and, thus, the Normal value should be determined in accordance with Para-7 of the Rules. 39. It  has  been  contended  by  the  domestic  industry  that  Ukraine  should  be treated as a non-market economy country, inter alia, stating that: i)    Ukraine producers  were  not  granted  market  economy  status  in  the matter of soda ash. ii)    The basis for presumption of treating Ukrainian producers as companies not operating in market economy environment is different in India and in Europe.  In India, it must be established that a WTO member country has treated  such  country  as  market   economy  country  on  the  basis  of evaluation criteria prescribed under the Rules. iii) It has not been established that US or EU has granted market economy status  to  Ukrainian  producers  on  the  basis  of  evaluation  criteria  laid down under the law. iv) In any case, none of the producers in Ukraine has cooperated with the Authority nor the Ukrainian producers have established that market economy  status  is  required  to  be  given  to  them  in  the  present  case. Thus, the Designated Authority is not in a position to determine normal value on the basis of questionnaire response from Ukrainian producers. v)    It has been contended by the domestic industry that it could not collect any information/evidence  such  as  price  lists  or  quotations  of  producers  of subject goods in the domestic markets of European Union, Ukraine and Korea RP due to lack of relevant information in public domain and, therefore, it has constructed the normal value in the case of imports from European Union, Ukraine and Korea RP.    Further, none of the producers/exporters in the subject countries has responded in the course of investigations. vi)  It has not been established that Ukraine has been granted market economy status on the basis of specified evaluation criteria. Such being the case, the Designated Authority is not required to grant market economy status in the present case. vii) The Govt. of India has not amended the Rules. So long as the Rules are not amended, the Designated Authority is required to follow the present Rules. As regards the agreement referred by the Govt. of Ukraine, the same is not part of the records of the present investigations. Designated Authority cannot adopt information which is not part of the investigations. In any case, the domestic industry is required to be given opportunity to defend its interests. Petitioner hopes that the Designated Authority would not adopt some document without providing access to the domestic industry. This would, otherwise, be against the principles of natural justice. F.3 Views of the Ministry of Economic Development and Trade of Ukraine 40.  Ukraine is treated as non market economy in the current investigation. In the case of anti dumping investigations on imports of soda ash from Ukraine, the Ukrainian authorities had provided to the Indian side with materials confirming market economy status of Ukraine according to Indian law. In addition, since 30.12.2005,  the  European  Community  has  recognized  the  market  status  of the  Ukrainian  economy  according  to  the  Council  Regulation  of  the  EU  No 2117/2005 [published in the Official Journal of EU No L340/17 of 23.12.2005] and  Ukraine  was  excluded  from  the  list  of  non  market  economies.  Further, EU’s criteria of assessment of market economy are similar to those specified in Indian  law.  Along  with  this,  in  February 2006,  the  US  officially  granted market economy status to Ukraine according to criteria defined in Art.771.18 of the US Tariff Act of 1930. The decision  to grant market  economy status  to Ukraine was published in the Federal Register of the United States No 37 of 02.24.2006. Pursuant to the provision of Indian law, the competent authority has to consider Ukraine as a market economy country. 41. Information provided by Ukrainian side shows that most developed countries treat Ukraine as market economy country. 42. Within the framework of this investigation, Ukraine should be treated as a market economy country in accordance with the agreements reached during the fifth session of the Ukrainian-Indian intergovernmental commission on trade- economic, scientific-technical, industrial and cultural cooperation, and based on the studies presented by the Ukrainian side. F.4 Examination of Market Economy claims in respect of China PR and Ukraine by the Authority 43. Para 7 of Annexure I of the Rule provides that: “In case of imports  from non-market  economy  countries,  normal  value shall be determined on the basis of the price or constructed value in the market economy third country, or the price from such a third country to other  countries,  including  India  or  where  it is  not possible,  or on  any other reasonable basis, including the price actually paid or payable in India for the like product, duly adjusted 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” 44. Further,  the  relevant  provisions  laid  down  under  Annexure  I  to  the  Anti- dumping Rules are as follows: 8.  (1)  The  term  “non-market  economy  country”  means  any  country which the designated authority determines as not operating on market principles of cost or pricing structures, so that sales of merchandise in such  country  do  not  reflect  the  fair  value  of  the  merchandise,  in accordance with the criteria specified in sub-paragraph (3). (2)  There  shall  be  a  presumption  that  any  country  that  has  been determined  to  be,  or  has  been  treated  as,  a  non-market  economy country for purposes of an anti-dumping investigation by the designated authority  or  by  the  competent  authority  of  any  WTO  member  country during the three year period preceding the investigation is a nonmarket economy  country.  Provided,  however,  that  the  non-market  economy country or the concerned firms from such country may rebut such a presumption by providing information and evidence to the designated authority   that   establishes   that   such   country   is   not   a   non-market economy country on the basis of the criteria specified in sub-paragraph (3). (3) The designated authority shall consider in each case the following criteria as to whether: (a)  the  decisions  of  the  concerned  firms  in  such  country  regarding prices, costs and inputs, including raw materials, cost of technology and labour, output, sales and investment, are made in response to market signals reflecting supply and demand and without significant State interference  in this  regard,  and  whether  costs  of  major  inputs substantially reflect market values; (b) the production costs and financial situation of such firms are subject to   significant   distortions   carried   over   from   the   former   non-market economy system, in particular in relation to depreciation of assets, other write-offs, barter trade and payment via compensation of debts; (c)  such  firms  are  subject  to  bankruptcy  and  property  laws  which guarantee legal certainty and stability for the operation of the firms, and (d) the exchange rate conversions are carried out at the market rate. Provided, however,  that  where  it  is  shown  by  sufficient  evidence  in writing on the basis of the criteria specified in this paragraph that market conditions prevail for one or more such firms subject to anti-dumping investigations, the designated authority may apply the principles set out in paragraphs 1 to 6 instead of the principles set out in paragraph 7 and in this paragraph”. (4) Notwithstanding, anything contained in sub-paragraph (2), the designated   authority   may   treat   such   country   as   market   economy country which, on the basis of the latest detailed evaluation of relevant criteria, which includes  the criteria  specified  in sub paragraph  (3), has been, by publication of such evaluation in a public document, treated or determined to be treated as a market economy country for the purposes of anti dumping investigations, by a country which is a member of the World Trade Organization.” 45. The Authority notes that in the past three years China PR has been treated as a non-market economy country in anti-dumping investigations by India and other WTO Members. China PR has been treated as a non-market economy country subject  to  rebuttal  of  the  presumption by  the  exporting  country  or individual exporters in terms of the AD Rules. 46. The Authority notes that none of the producers/exporters of the subject goods from  China  PR has submitted  either  questionnaire  response  or response  to the market economy questionnaire   consequent   upon   the   initiation   notice issued by the Authority or has sought to rebut the non-market economy presumption. 47. As far as the contention of the Government of Ukraine to treat Ukraine as a market economy country is concerned, the Authority notes that no detailed documents  have  been  provided  by  the  Government  of  Ukraine  to  establish that any WTO member has granted market economy status to Ukraine after following the evaluation criteria laid down under Para 8(3) and by publication of such evaluation in a public document as required under Para 8(4) of the Annexure-I to the Anti-dumping Rules. Furthermore, none of the producers/exporters from Ukraine has cooperated and submitted the market economy  questionnaire response  in  rebuttal  of  non  market  economy presumption. In view of the same, the Authority has determined the normal value for Ukraine as per the relevant Rules on the basis of best available information. F.5 Determination of Normal Value for producers and exporters F.5.1 Determination of Normal value in respect of Exporters / Producers from China PR 48. In the absence of any response from any producer/ exporter from China PR, the  Authority  proceeds  to  determine  the  Normal  value  in  China  PR  on available facts basis in terms of second proviso of para 7 of Annexure 1 to the AD Rules. Accordingly, the ex-works Normal Value of the product under consideration has been determined based on constructed costs of production, duly adjusted to include selling, general & administrative costs and profits. The normal value so determined is *** US$/MT. F.5.2 Determination of Normal value in respect of Exporters / Producers from EU 49. As provided under the law, the Authority is required to consider selling price of the product when meant for consumption in the domestic market of EU for determining  normal  value  in   EU.   The   petitioner  claimed  that  there  is  no evidence of actual selling price prevailing in the domestic market of the EU. None   of   the   exporters   in   EU   has   cooperated   with   the   Authority   with questionnaire  response.  The  Authority  notes  that  in  the  absence  of  any response  from  any  EU  producer  in  the  form  and  manner  prescribed,  the normal value cannot be determined on the basis of questionnaire response of a producer in the EU. The Authority has, therefore, constructed normal value by considering estimates of cost of production, duly adjusted to include selling, general & administrative costs and profits. The normal value so proposed to be determined is *** US$/MT. F.5.3 Determination of Normal value in respect of Exporters / Producers from Ukraine 50. The petitioner has contended that Ukraine should be treated as a non-market economy country.  Further, the petitioner has claimed that there is no evidence of actual selling price prevailing in the domestic market of Ukraine. Also, none of the exporters in Ukraine has cooperated with the Authority with questionnaire response. In the absence of any response from any producer/ exporter from Ukraine, the Authority proceeds to determine the Normal value in Ukraine on available facts basis in terms of second proviso of para 7 of Annexure 1 to the AD Rules. The Authority has, therefore, constructed the normal value by considering estimates of cost of production, duly adjusted to include selling, general & administrative  costs and profits. The normal value so proposed to be determined is *** US$/MT. F.5.4 Determination of Normal value in respect of Exporters / Producers from Korea RP 51. As provided under the law, the Authority is required to consider selling price of the product when meant for consumption in the domestic market of Korea RP for determining normal value in Korea RP. The petitioner submitted that there is no evidence  of  actual  selling  price  prevailing  in  the  domestic  market  of Korea RP.  None  of  the  exporters  in  Korea  RP  has  cooperated  with  the Authority with  questionnaire  response.  The  Authority  notes  that  in  the absence of any response from any Korean producer in the form and manner prescribed, the normal value cannot be determined on the basis of questionnaire  response  of a  producer   in  Korea   RP.   The Authority has, therefore, constructed normal value by considering estimates of cost of production, duly adjusted to include selling,  general  &  administrative  costs  and  profits.  The  normal  value  so proposed to be determined is *** US$/MT. F.6 Determination of Export Price for producers and exporters 52. Since none of the exporters from any of the subject countries has responded to  the  Authority, the  Authority  has  determined Export  Price  in respect of imports from EU, China PR, Ukraine and Korea RP on the basis of best information  available  in  accordance  with  Rule  6(8)  of  the  AD  Rules.  The petitioner has claimed export price on the basis of imports of the product under consideration in India, as reported by DGCI&S published data.  The Designated Authority has also procured the transaction wise import data from the DGCIS. The Designated Authority has  considered the  data received from  DGCI&S and determined the export price considering all imports of the product under consideration in  India.  Price  adjustments have  been  made  on  the  basis  of claims made by petitioner domestic industry in view of non cooperation from the exporters from China, EU, Korea RP and Ukraine. T he  proposed export price has been determined at ex-factory level as stated in the below table. F.7 DUMPING MARGIN 53. Considering  the  normal  value  and  export  price  as  determined  above,  the proposed dumping margins have been determined as follows. It is seen that the dumping margins are more than de-minimis and significant.   G. ASSESSMENT OF INJURY AND EXAMINATION OF CAUSAL LINK INJURY 54. The opposing  interested  parties  have  made  the  following  submissions  on injury to the domestic industry: (i)  The   Authority   should   take   note   of   the   fact   that   the   total   imports   of Sodium Nitrate to India declined on calendar year basis as per three sources, viz., International Trade Centre, UN COMTRADE and Ministry of Commerce & Industry of Republic of India. Total imports decreased by 48% in 2011-12 as compared to 2009-10. Imports from Ukraine declined by 82% in 2011-12 as compared to 2009-10. In 2010-11, there were no imports from Ukraine in India. Further, there is no supply of Sodium Nitrate from Ukraine to India in 2013. Thus, imports from Ukraine did not influence the Indian market in 2013. There was no significant  increase  in  imports  from  Ukraine  as  well  as  in  the  total imports in India. Further, it is seen that the cumulative imports of sodium nitrate from all countries concerned in the period 2008-2012 reduced by 62%. (ii) The petition states that “demand shows significant positive growth”. But there is a decreasing trend in demand. Decline in demand could be the reason  that influenced  the  volume  of  production  and  sales  of  the petitioner. (iii) The  petition  states  that  petitioner  has  no  exports  of  the  product  under consideration.  However, as per the website of International Trade Centre, the petitioner is one of the exporting companies. The petitioner tried to deceive the Authority by manipulating the statistical data (iv)Profits of the petitioner  had a positive  trend and  during the last  period they increased by 56%. Administrative expenses increased significantly by 2.7 times between Mar’09 and Mar’13. Such expenses should be considered as other factors   which   are   injuring  the domestic  industry.  Production  increased  by 23.3% in 2011-12 as compared to 2009-10. Capacity  utilization  increased  by 8% in 2011-12 as compared to 2009-10. Domestic sales increased by 24% in 2011-12 as compared to 2009-10. Productivity  per day increased  by 20% in 2011-12  as compared  to 2009-10.  Export  increased  by 24%  in  2011-12  as compared to 2009-10 and wages increased 2 times in 2011-12 as compared to 2009-10. (v) Considering    the  above,   imposition    of  anti  dumping    measures    against Ukrainian import of Sodium Nitrate to India will be unreasonable due to the absence of   sufficient   evidences   of   causal   relationship   between dumped import and injury to the domestic industry. (vi)There was a decrease in imports of sodium nitrate (with code 31025000) into the Republic of India from the countries concerned during the injury analysis period. (vii) According to Article 5 of the Agreement of 1994, there is no causal link between the imports of goods which are the subject of the investigation and injury to the Domestic Industry. The mere assertion unsupported by any evidence, cannot be considered sufficient for the imposition of definitive duties. 55. The domestic industry has submitted that: a) Subject imports have increased substantially in absolute terms. b) Subject  imports  have  increased    in relation    to    total    imports    and consumption and production in India. c) Subject  imports  are  undercutting  the  prices  of  domestic  industry  to  a significant extent. d) Price undercutting has prevented the domestic industry from increasing the prices. Imports are suppressing the prices of the domestic industry in the market. e) Performance    of  the  domestic  industry  has  deteriorated    in  terms of production,  domestic    sales,    capacityutilization,    market     share, inventories,  profits,  return  on  investment  and  cash  profits  to  a  very significant extent. f)  There is a threat of further increase in the volume of dumped imports, which would further aggravate the injury being caused to the domestic industry if anti dumping measures are not imposed. g) Given that the investigation period is for 15 months, the petitioner has “annualized” the figures in order to enable comparison with the previous years. h) Cumulative  assessment  of  injury  is  appropriate.  Import  volumes  were higher in some country in some period and lower from that country in some  other  period.  In  case  of  Ukraine,  the  share  of  Ukraine  in  total imports was high in 2009-10, while no imports were reported in 2010- 11.    Thereafter, share  of  imports from  Ukraine  has  increased in  the subsequent  two years. Thus, different countries  have been competing with each other in the Indian market. Further, in period of investigation, Ukraine  was  one  of  the  major  suppliers  of  the  product  in  the  Indian market.  In fact, imports from Ukraine individually constitutes single largest share in total imports of the product in the country. i)  The  Government   of  Ukraine   has  selectively  compared   increase   in production,  capacity  utilization,  domestic  sales,  productivity,  exports and wages in 2011-12 with 2009-10. It would be seen from the information submitted that production, capacity utilization, domestic sales and productivity first increased and then declined in the POI. j)  The figures of imports reported by the petitioner are based on transaction wise imports of the product in the country. Further, it appears that the information given by Govt. of Ukraine, in any case, is not useful for the reason that they have considered imports falling under Chapter 31 alone, whereas the transaction wise data clearly shows that the imports have been reported under Chapter 28 as well. It would be seen that it is permissible for an importer to adopt any of the above mentioned codes in order to clear the goods. Given  the fact that there  is more  than  one permissible classification for the product and the fact that, in fact, imports have been reported under more than one HS Code, it follows that the imports reported by Govt. of Ukraine are not representative of actual volume of imports. k) The preliminary findings notified by the Designated Authority adequately deals with causal link between dumping & injury to the domestic industry. Further, the petition and written submissions filed by the petitioner also adequate deals with causal link between dumping & injury to the domestic industry. It has not been established that any of the factors of causal link found by the Designated Authority are inappropriate or factually incorrect. Examination by the Authority 56. Annexure  II  para  (iii)  of  the  AD  Rules  requires  that  in  case  imports  of  a product  from  more  than  one  country  are  being  simultaneously  subjected  to anti dumping investigations, the Designated Authority will cumulatively assess the effect of such imports, if it determines that: - a.    the margin of dumping established in relation to the imports from each country is more  than two  per cent expressed  as percentage  of export price and the volume of the imports from each country is three per cent of the import of like article or where the export of individual countries is less than three per cent, the imports collectively accounts for more than seven per cent of the import of like article and b.    cumulative assessment of the effect of imports is appropriate in light of the conditions of competition between the imported article and the like domestic articles. 57. In this regard, the Authority notes that: a.    The margins of dumping from each of the subject countries are more than the limits prescribed under the Rules; b.    The volume of imports from each of the subject countries is more than the limits; and c.    It  is  appropriate  to  cumulatively  assess  the  effects  of  imports  of  the subject goods from European Union, China PR, Ukraine and Korea RP on the domestically produced like article in the light of conditions of competition between the imported article and the like domestic article. 58. Annexure-II of the AD Rules provides for an objective examination of both, (a) the  volume  of  dumped  imports  and  the  effect  of  the  dumped  imports  on prices,  in the domestic  market, for the like  articles;  and  (b) the  consequent impact of these imports on domestic producers of such articles. With regard to the volume effect of the dumped imports, the Authority is required to examine whether there has been a significant increase in dumped imports either in absolute term or relative to production or consumption in India. With regard to the price effect of the dumped imports, the Authority is required to examine whether there has been significant price undercutting by the dumped imports as compared to the price of the like product in India or whether the effect of such imports is otherwise to depress the prices to a significant degree or prevent price increases which would have otherwise occurred to a significant degree. 59. The   Authority   has   considered   the   views   of   the   interested   parties   and addressed the same appropriately in this investigation. 60. Government of Ukraine contended that imports have declined. The Authority notes that the volume of imports from Ukraine had in fact declined in 2010-11 and  2011-12  as  compared  to  the  base  year  2009-10;  but  the  annualized figures  in  the  period  of  investigation  show  that  the  volume  of  imports  from Ukraine increased in the period of investigation even when the demand had declined in the period of investigation. Further, Government of Ukraine has disputed  the  claim  of  the  petitioner  with  regard  to  injury  suffered  by  the domestic industry. It is noted that the Government of Ukraine has considered the performance of the domestic industry during the year 2011-12 and compared the same with the preceding year, thus, ignoring performance of the domestic industry in the period of investigation. The Authority notes that the purpose of fixation of the period of investigation is to determine dumping margin  during  the period  of  investigation and  thereafter  assess  whether  it could be concluded that  the  domestic  industry  has  suffered  injury  in  the  period  of  investigation, having regard to the performance of the domestic industry in preceding   period. Thus,    it  is  the  period  of  investigation    wherein    the performance of  the domestic industry must  be  considered.  The  preceding years serve as a basis for comparison. 61. It is noted that since the conditions specified under the rules for cumulative assessment of the injury are satisfied in the present case, the Authority has assessed injury to the domestic industry by cumulatively considering imports from the subject countries and not from Ukraine alone. 62. It  is  noted  that  market share in  demand in  the  POI  increased slightly as compared to the preceding year. The imports, however, increased significantly and  disproportionately.   Thereafter,   whereas   demand   declined   in  2011-12, imports increased. Further, whereas there was some increase in demand in the POI, the increase in imports was far more than the increase in demand. It is, thus, seen that after 2010-11, the imports have increased more than the increase in demand. 63. The argument advanced by Government of Ukraine with regard to existence of injury to the domestic industry and performance of the domestic industry as reflected in various economic parameters were also examined. It is noted that arguments  of  Government  of  Ukraine  with  regard  to  parameters  such  as profit/loss and administrative expenses are based on overall operations of the domestic  industry.  It  is  noted  that  the  domestic  industry  is  a  multi  product company  and  has  been  engaged  in  production  and  sale  of  a  number  of products. The Authority is required to consider information only relating to the product  under  consideration.   Overall  performance of  the  domestic  industry which is reflective of the situation of domestic industry cumulatively for various products is not relevant to decide the consequence impact of the dumped imports on  the  domestic  industry.  It  is  also  noted  that  the  Government of Ukraine has compared performance of the domestic industry between 2009 and 2011- 12 and has ignored the performance of the domestic industry during the present period  of  investigation.  It is  noted  that  the  Authority  has fixed  the  period  of investigation in order to determine dumping margin and injury margin that was prevailing   in   respect   of   imports   made   into   India   during  the  period   of investigation. Further, the Authority is required to examine performance of the domestic  industry  in  the  period  of  investigation  vis-à-vis the  previous years. The  information for  the  previous period in  this  regard serves as a benchmark to decide whether performance in the period of investigation could be described as injurious. 64. With regard to the contention that there was a decrease in imports of sodium nitrate (with code 31025000), it is noted that the transaction-wise import information collected from DGCI&S for the product under consideration shows an increase in imports of the subject goods from the subject countries in the period of investigation. 65. With regard to the contention that there is no causal link between the imports of goods which are the subject of the investigation and injury to the Domestic Industry, it is noted that the Authority has conducted detailed investigations of the injury information provided by the domestic industry and the analysis of this investigation is given in the subsequent paragraphs of this section. G.1  Volume Effect of dumped imports and Impact on domestic Industry a)  Assessment of Demand and Market Share 66. The Authority has determined  demand  as the sum of domestic sales of the domestic industry, sales of other Indian producers and imports of the subject goods in India from all sources (as per DGCIS data). The demand so assessed can be seen in the table below:   67. It is seen from the above table that demand for the subject goods has declined in the POI as compared to the base year. However, the same has increased during the POI as compared to previous year. The Authority further notes that the market share of the subject countries in demand has declined up to 2011- 12 and increased thereafter in the POI. On the other hand, market share of the domestic industry increased in 2010-11, remained at the same level in 2011-12 and then declined in the period of investigation. It is noted that while the market share of the domestic industry during the POI has increased as compared to the base year, the market share of the imports from the subject countries declined marginally in the POI as compared to the base year. b) Volume Effects of Dumped Imports:  Import volumes  and market shares 68. Volume of imports and imports in relation to production and consumption in India are given in the table below:   69. It is noted that from the above table that there were no imports from Korea RP in  2009-10.  However,  there  were  significant  imports  from  EU,  China  and Ukraine in this year.  Imports from China PR were significant during 2009-10 and increased in 2010-11. The same has declined thereafter till 2011-12 and again increased during the period of investigation. There were no imports from Korea RP in 2009-10, but the same has increased till 2011-12 and declined during the POI. The imports from EU declined in 2010-11 and increased thereafter till the period  of  investigation. The imports from Ukraine were significant in 2009-10, and declined to NIL in 2010-11, then increased thereafter till period of investigation. The imports from Ukraine during the POI increased as compared to the base year and significantly in comparison to the previous year. It is further noted that the volume of imports cumulatively from the subject countries declined till 2011-12 and then increased significantly during the POI. Overall, there was a decline in the POI on annualized basis. G.2  Price Effect of the Dumped imports on the Domestic Industry a)  Price Undercutting and Price Underselling 70. With regard to the effect of the dumped imports on prices, Annexure II (ii) of the Rules lay down as follows "With regard to the effect of the dumped imports on prices as referred to in sub-rule (2) of rule 18 the Designated Authority shall consider whether there has   been   a   significant   price   undercutting   by   the   dumped imports  as compared with the price of like product in India, or whether the effect  of  such  imports  is  otherwise  to  depress  prices  to  a  significant degree or prevent price increase which otherwise would have occurred to a significant degree. 71. With  regard  to  the  effect  of  the  dumped  imports  on  prices,  the  Authority examined 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. In this regard,   a   comparison   was   made   between   the landed   value  of  the  product concerned and the average selling price of the domestic   industry.   This   comparison   showed   that   during   the   period   of investigation, the subject goods originating in or exported from the subject countries were imported in the Indian market at prices which were lower than the domestic industry selling prices. It is, thus, noted that imports of subject goods were undercutting the domestic prices. 72. The price undercutting is determined as below: China PR                                      EU 73. The Authority notes from the above that the landed prices of the subject goods were below the selling price of the domestic industry showing significant price undercutting being caused by the dumped imports from the subject countries. 74. The price underselling is determined as below: b)  Price Suppression and Depression 75. In  order  to  determine   whether  the  dumped  imports  are  suppressing   or depressing the domestic prices and whether the effect of such imports is to suppress  prices  to  a  significant  degree  or  prevent  price  increases  which otherwise   would   have   occurred   to   a    significant   degree,   the   Authority considered  the changes  in the costs  and  prices  over  the  injury period. The trends in this regard are summarized below: 76. It is noted that the net sales realization during the injury period has increased except in 2010-11. However, it is lower than the increase in the cost of sales during the  same period.   The  landed value during the  injury period except 2010-11 has  also  increased.   However, the  increase in  landed value  is  far lower than the increase in the cost and selling price.   Thus, dumped imports are causing suppressing effect on the prices of domestic industry. G.3  Economic Parameters of the Domestic Industry 77. Annexure II to the Anti-dumping  Rules requires that the determination of injury shall involve an objective examination of the consequent impact of these imports on domestic producers of such products. With regard to consequent impact  of these  imports  on  domestic  producers  of  such  products,   the   Anti- dumping Rules  further   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, ability to raise capital investments.  The various injury  parameters  relating  to  the  domestic  industry  are  discussed herein below: a)  Capacity, Production, Capacity Utilization and Sales 78. Information on capacity, production, capacity utilization and sales volumes of the domestic industry has been as under:-

*SNI – Sodium Nitrite, SNA - Sodium Nitrate

79. The Authority notes that the product under consideration is jointly produced with sodium nitrite. Since the production facilities are common and the products are co- produced, capacity utilization has been examined by considering combined production of sodium nitrite and sodium nitrate. The petitioner has claimed that the capacity of 44,000  MT is combined  capacity of both  Sodium  Nitrite  and Sodium  Nitrate.  Therefore,  for  the  purpose  of  evaluation  of  utilization  of production capacities, the  Authority has  considered production of  both  Sodium Nitrite and Sodium Nitrate and determined capacity utilization. 80. It is noted from the above table that the domestic sales, production and capacity utilization of the domestic industry increased up to 2010-11 and declined thereafter. b) Profits, Return on Capital Employed and Cash Profit 81. The profits, return on investment and cash flow of the domestic industry have been examined as under: 82. The Authority notes from the above as under: (i)  Both  the  net  selling  price  and  cost  of  sales  of  the  domestic industry increased over the injury period. However, the increase in cost of sales of the domestic industry was much higher than the increase in the selling price. The profitability of the domestic industry declined throughout the injury period. (ii) As a result of decline in profits, the return on investment and cash profits declined  significantly  during  the  POI  as  compared  to  the base year as well as previous year. It is noted that the domestic industry incurred losses, cash losses and negative return on capital employed during 2011-12 and the POI. c)  Employment and Wages 83. The status of employment  levels and wages of the domestic industry has been as under:\ 84. It is noted from the above that the employment level increased in 2010-11 and then declined and again increased in POI. It is further noted that there was increase in wages up to 2011-12 which declined in the POI. The wage per unit increased up to 2011-12 and declined in the POI. d) Productivity 85. The productivity of the domestic industry is given in the following table: 86. The Authority notes that the productivity per employee and the productivity per day increased in 2010-11 and thereafter declined. e)  Inventories 87. The  Authority  has  examined  the  inventory  level  of  the  domestic  industry which is given in the following table:- 88. It is noted from the above  table  that the inventory  of the domestic  industry increased up to 2011-12 and declined in the POI. f)  Magnitude of Dumping 89. Magnitude  of  dumping  as  an  indicator  of  the  extent  to  which  the  dumped imports  can  cause  injury  to  the  domestic  industry  shows  that  the  dumping margin  determined  against  the subject  countries  are above  de minimis and significant. g) Factors Affecting Domestic Prices 90. Consideration  of  the  import  prices  from  the  subject  countries  and  other countries,  change  in the  cost  structure,  competition  in  the  domestic  market, factors other than dumped imports that might be affecting the prices of the domestic industry in the domestic market show that the landed value of imported material from the subject countries is below the selling price of the domestic industry causing significant price undercutting in the Indian market. Cost of production of the subject goods is increasing as a result of increase in the costs on account of raw materials.   The domestic industry has increased its prices. However, the price increases are less than cost increases.  It  is  further  noted that  imports  of  subject  goods  from  other countries are at much higher prices. Thus, the principal factor affecting the domestic prices is the dumped imports of the subject goods from the subject countries. h) Ability to raise capital 91. The  Authority  notes  that  the  domestic  industry  is  a  multi-product  company. The  Petitioner  has  argued  that  given  the  current  state  of  affairs  where  the product is consistently not performing well because of persistent dumping, any fresh investment is not envisaged. i)    Growth 92. With regard to the growth of the domestic industry, the position is as under: 93. The Authority notes that the production, sales volume, profits and the return on investment of the domestic industry show negative growth over the injury period. Overall growth of the domestic industry over the injury period was adverse. G.4  Other Known Factors and Causal Link 94. As per the AD Rules, the Designated  Authority is, inter alia, required to examine any known factors other than the dumped imports which at the same time are injuring the domestic industry, so that the injury caused by these other factors must not be attributed to the dumped imports. Factors which may be relevant in this respect include, inter alia, the volume and prices of imports not sold at dumping   prices,   contraction   in   demand   or   changes   in   the   patterns   of consumption, trade restrictive practices of and competition between the foreign and domestic producers, developments in technology,  export  performance  and the  productivity  of  the  domestic industry. The Authority has examined whether other factors listed under the AD Rules could have contributed to injury to the domestic industry. 95. The examination of causal link has been done as follows: (a) Imports from third countries and other known factors 96.The Authority notes that the volume of imports from the countries other than the subject countries has been insignificant in the injury period. (b) Contraction in demand and / or change in the pattern of consumption 97.There has been some decline in demand over the injury period. However, the domestic industry suffered injury primarily on account of dumped imports than on  account  of  any  change  in  the  demand.  From the available information, it is noted that the volume of dumped imports increased even when the demand declined. (c) Trade    restrictive    practices    of    and    competition    between    foreign    and domestic producers 98.It is noted that there is a single market for the subject goods where dumped imports from the subject countries compete directly with the subject goods supplied by the domestic  industry. It is also noted that the imported  subject goods and domestically produced goods are like articles and are used for similar applications/end uses. There is no evidence of trade restrictive practices of and competition  between  the  foreign  producers  and  domestic  producers  causing injury to the domestic industry. (d) Developments in Technology 99. There is no allegation of developments   in technology,   nor has the investigation so  far shown  that  possible  injury to  the  domestic  industry could  have  been caused by developments in technology. (e)    Export performance 100. The  Authority  notes  that  the  volume  of  exports  of  the  petitioner  company forms nearly 10% of  the  total  sales of  the  product.   However, the  injury information pertains to the domestic performance of the petitioner company. Therefore, the losses to the domestic industry during the injury period and the period  of  investigation  cannot  be  attributed  to  possible  deterioration  in the export performance of the domestic industry. (f) Productivity of the domestic industry 101. The Authority notes that the decline in productivity is attributed to decline in production caused by increase in the volume of dumped imports. 102. The  Authority  notes  that  while  listed  known  other  factors  do  not  show  that injury  to  the  domestic  industry  has  been  caused  by  these  factors,  the following parameters show that injury to the domestic industry has been caused by the dumped imports. (a) There has been a significant increase in the volume of dumped imports from the subject countries at  the absolute level. The   market   share   of dumped imports   from   the   subject   countries   in   total   imports   of   subject goods is nearly 100% in the POI. (b) The imports were significantly undercutting the domestic prices. (c) Resultantly,  the  price  undercutting  created  price  pressures  on  the  domestic industry. Resultantly, profitability of the domestic industry deteriorated. (d) The dumped imports have had significant adverse price effect in terms of price suppression. As a result of significant price difference and inability of domestic industry to raise its prices in proportion to cost increases, the performance of the domestic industry deteriorated in terms of profits, cash profits and return on investments. Thus, the deterioration in performance of the domestic industry in respect of profits, cash flows and return on investment is due to dumping of the product in the country. (e) Growth  of  the domestic  industry  became  negative  in  respect  of volume and price parameters. (f) Whereas  volume  of  imports  and  its  market  share  increased  in  2010-11 and the investigation period, the domestic industry lost market share. Consequently, production, sales, capacity utilization of the domestic industry deteriorated. H.   Magnitude of injury and injury margin 103.    The  Authority  has  determined  non-injurious  price  for  the  domestic  industry taking into consideration the cost of production of the domestic industry. This non-injurious  price  of  the  domestic  industry  has  been  compared  with  the landed values of the subject imports from the subject countries to determine injury margin. The injury margins have been worked out as follows: Injury Margin 104.    The   level   of   dumping   margins   and   injury  margins,   as   determined,   are considered significant. I.    INDIAN INDUSTRY’S INTEREST & OTHER ISSUES 105.    The Authority notes that the purpose of anti-dumping duties, in general, is to eliminate injury caused to the domestic industry by the unfair trade practices of dumping so as to reestablish 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 would not restrict imports from the subject countries in any way and, therefore, would not affect the availability of the product to the consumers. 106.    It  is  recognized  that  the  imposition  of  anti-dumping  duties  might  affect  the price levels of the product manufactured using the subject goods and consequently might have some influence on relative competitiveness of this product. However, fair competition in the Indian market will not be reduced by the anti-dumping measures, particularly if the levy of the anti-dumping duty is restricted  to  an  amount  necessary  to  redress  the  injury  to  the  domestic industry. On the contrary, imposition of anti-dumping measures would remove the unfair advantages gained by dumping practices, would prevent the decline in the performance of the domestic industry and help maintain availability of wider choice to the consumers of the subject goods. G. POST   DISCLOSURE   STATEMENT   SUBMISSIONS   BY   THE   INTERESTED PARTIES G.1 Post Disclosure Statement submissions by the opposing Interested Parties 107. None  of  the  opposing  interested  parties  filed  the  post  Disclosure  Statement submissions. G.2 Post Disclosure Statement submissions by the Domestic Industry 108. Following  are  in  brief  the  post  Disclosure  Statement  submissions  made  by  the domestic industry: (a)    Non-injurious  price  may  be  re-determined  confirming  to  AD  Rules  and  past methodology applied by the Authority in this regard. (b)    Product under consideration is exported to India below its normal value resulting in dumping from each of the subject countries. (c)    Both  dumping  margin  and  injury  margin  in  the  Period  of  Investigation  are significant and positive from each of the subject countries. (d)    Domestic Industry has suffered material injury. (e)    The anti dumping duty is required to be imposed definitively in fixed form and the duty expressed in US$ terms. G.3  Examination by the Authority 109. The Authority has reached to the conclusion that the above arguments of the domestic industry are repetitive and have already been dealt with by the Authority in the Disclosure Statement earlier and have also been dealt with again in the Final Finings Notification under appropriate headings. J.  CONCLUSION 110. After examining the submissions made by the interested parties and issues raised therein; and considering the facts available on record, the Authority concludes that the product under consideration, Sodium Nitrate, has  been  exported  to  India from  the  European  Union,  China,  Ukraine  and Korea RP below its associated normal value, thus, resulting in dumping of the product.  The  domestic  industry has suffered material injury in respect of the subject goods. The material injury has been caused by the dumped imports from the European Union, China PR, Ukraine and Korea RP. K. RECOMMENDATIONS 111. The  Authority  notes  that  the  investigation  was  initiated  and  notified  to  all interested parties and adequate opportunity was given to the 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 the causal link thereof in terms of the AD Rules and having established positive dumping margins 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 required to offset dumping and consequent injury equal to the lesser of margin of dumping and margin of injury, so as to remove the injury to the domestic industry. For the purpose of determining injury margin, the landed value of imports of product under consideration has been compared with the non-injurious price of the domestic like product produced by domestic industry determined for the period of investigation. 112. 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 so as to remove the injury to the domestic  industry.  Accordingly,  anti  dumping  duty  as  per amount specified in the table below is recommended to be imposed from the date of the Notification to be issued by the Central Government on all imports of the subject  goods originating  in  or  exported  from  the  European  Union, China PR, Ukraine and Korea RP.   Duty Table 113.    Landed  value  of  imports  for  the  purpose  of  this  Notification  shall  be  the assessable value as determined by the Customs under the Customs Act, 1962 (52 of 1962) and includes all duties of customs except duties under sections 3, 3A, 8B, 9 and 9A of the said  Act. 114.    An appeal against the order of the Central Government arising out of this finding shall lie before the Customs, Excise and Service Tax Appellate Tribunal in accordance with the Customs Tariff Act.