Final Finding - Sunset Review Anti-Dumping Investigation

Dated October 12th, 2015 | Copy of | Notification Sl82 dt. 12/10/15 |

Subject: Sunset Review (SSR) anti-dumping investigation concerning imports of Cold Rolled Flat Products of Stainless Steel from the Peoples Republic of China, Republic of Korea, the European Union, South Africa, Chinese Taipei, Thailand and the United States of America.

F. No. 15/04/2014-DGAD: - Having regard to the Customs Tariff Act 1975 as amended from time to time (hereinafter referred 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, as amended from time to time (hereinafter referred as the Rules);

A. Background

1. Having regard to the Customs Tariff Act 1975, as amended from time to time (hereinafter also 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, as amended from time to time (hereinafter also referred to as the Rules) the Designated Authority, in the Ministry of Commerce and Industry, Department of Commerce, Govt. of India, appointed under the Rules supra, (hereinafter referred to as “the Authority”), vide Notification No. 14/06/2008-DGAD dated 25th November, 2008, initiated an anti-dumping investigation concerning import of Coldrolled Flat products of stainless steel of all series of ASTM A240/A480M, not further worked than Cold rolled (cold reduced), width of 600 mm upto1250mm (width tolerance of +30 mm for Mill Edge and +4mm for Trimmed Edge), with a thickness of up to 4mm, (hereinafter also referred to as the subject goods) from the Peoples Republic of China, Republic of Korea, the European Union, South Africa, Chinese Taipei, Thailand and the United States of America (hereinafter also referred to as the subject countries/territories).

2. Preliminary Findings were issued by the Authority, vide Notification No. 14/06/2008-DGAD dated 27th March, 2009 and provisional duty was imposed by the Central Government, vide Notifications No. 38/2009-Customs, dated 22nd April, 2009. The Final Findings were issued by the Authority vide Notification No. 14/06/2008-DGAD, dated 24th November, 2009. On the basis of the recommendations made by the Authority in the said final findings, definitive anti-dumping duties were imposed by the Central Government, vide Notifications No. 14/2010-Customs, dated 20th February, 2010 effective from the date of the imposition of the provisional anti-dumping duty i.e., 22nd April, 2009 on the imports of the of the above goods, originating in or exported from the subject countries/territories.

3. Before expiry of the said duty M/s Jindal Stainless Limited, (hereinafter referred to as ‘petitioner’ or ‘applicant’), the major domestic manufacturer of the subject goods in India, filed a duly substantiated application in January 2014 before the Authority, on behalf of the domestic industry, in accordance with the Act and the Rules, alleging likelihood of continuation or recurrence of dumping of the above goods, originating in or exported from subject countries/territories and consequent injury to the domestic industry in the event of cessation of duty, and requested for a review of the same for continuation and enhancement of the anti-dumping duties imposed on the imports of subject goods, originating in or exported from the subject countries/territories.

4. On the basis of duly substantiated application filed by the domestic industry, Authority, vide Notification No. 15/04/2014-DGAD, dated 17th April 2014, initiated a sunset review of the antidumping duty in force on import of subject goods, originating in or exported from the above named countries/territories to examine whether the expiry of the duty in force is likely to lead to continuation or recurrence of dumping and consequent injury to the domestic industry. Consequent upon initiation of the sunset review, vide Notification No. 20/2014- Customs (ADD) dated 12th May, 2014, the validity of the anti-dumping duty on the imports of the subject goods from the subject countries/territories, was extended by the Central Government up to and inclusive of 21st day of April 2015.

5. On the request of the Designated Authority, the Central Government extended the time for completion of the Investigation by six months, i.e., up to 15th October, 2015, in terms of Rule 17 of the AD Rules. 6. The scope of the present review covers all aspects of the original investigation concerning imports of the above goods, originating in or exported from the subject countries/territories.

B. Procedure

7. The procedure described below has been followed with regard to the subject investigation:

i. The embassies/missions of the subject countries/territories in New Delhi were informed about the initiation of the investigations in accordance with Rule 6(2).

ii. The Authority provided copies of the non-confidential version of the application to the known exporters and the embassies/missions of the subject countries/territories in accordance with Rules 6(3) supra. A copy of the non- confidential version of the application was also made available in the public file and provided to other interested parties, wherever requested.

iii. The Authority forwarded a copy of the public notice to the following known manufacturers/exporters in the subject countries (whose names and addresses were made available to the Authority) and gave them opportunity to make their views known in writing within (40) forty days from the date of the letter in accordance with the Rules 6(2) & 6(4):

1. M/s Shanghai Krupp Stainless, China 1. M/s Zhangjiagang POSCO Stainless Steel Co., Ltd., China 2. M/s. ALZ NV, Belgium 3. M/s Ugine (Division of Usinar), Immeuble Pacific, France 4. M/s Acerinox Europa SAU, Spain 5. M/s Acerinox SA, Italy 6. M/s ThyssenKrupp Nirosta GmbH, Germany 7. M/s ThyssenKrupp ACCAi Specialtereni SPA, Italy 8. M/s Outokumpu Stainless, U.K. 9. M/s Outokumpu Stainless, Finland 10. M/s Outokumpu Stainless AB, Sweden. 11. M/s A.K. Steel Corporation, USA 12. M/s Allegheny Ludlum, USA 13. M/s North American Stainless, USA 14. M/s J & L Specialty Steel, Inc., USA 15. M/s Yieh United Steel Corporation (YUSCO), Chinese Taipei 16. M/s Columbus Stainless (Pty) Ltd, South Africa 17. M/s POSCO, Korea 18. POSCO, Thainox, Thailand

iv. China being a Non-Market Economy country, a Market Economy Treatment (MET) questionnaire was also forwarded to all the known producers/exporters in China PR and the Embassy of China PR with the request to provide relevant information to the Authority within the prescribed time limit. While for the purpose of initiation of the review the normal value in China was estimated based on the cost of production of the subject goods in India, duly adjusted, the Authority informed the known producers/exporters from China PR that it proposes to examine the market economy claims of the responding exporters in the light of Para 7 and Para 8 of Annexure I of Anti-dumping Rules, as amended. The exporters/producers of the subject goods from China PR were, therefore, requested to furnish necessary information as mentioned in sub-paragraph (3) of paragraph 8 of Annexure I referred above to enable the Authority to consider whether market economy treatment can be granted to the cooperative exporters/producers in that country. However, no response has been received from any producer/exporter from China PR in this regard.

v. In response to the initiation notification the following exporters / producers from subject countries/territories have responded: a. M/s Acerinox Europa S.A.U, Spain b. M/s Columbus Stainless (PTY) Ltd., South Africa c. M/s POSCO, Korea d. M/s Daewoo International, Korea e. M/s Hyundai Corporation, Korea f. M/s Posco Thainox, Thailand

vi. The Authority forwarded copies of the public notice to the following known importers/consumers/associations of subject goods in India (whose names and addresses were made available to the authority) and advised them to make their views known in writing within forty (40) days from the date of issue of the letter in accordance with the Rule 6(4):

a. M/s Honest Enterprise Ltd., Vadodara b. M/s Kuber Steel Impex, Mumbai c. M.M. Enterprises, Raigadh d. Advance Metal Corporation, Mumbai e. Bhandari Foils Pvt. Ltd., Dewas f. Angel Pipes & Tubes Pvt. Ltd., Mumbai g. IDMC Ltd., Gujarat h. M.K. Steel Centre, Raigad i. Riddhi Siddhi Impex, Mumbai j. Salem Stainless Steel Suppliers, Chennai k. Western Metal (India), Mumbai l. Star Stainless Steel, Mumbai m. Advance Metal Corporation n. Arihant Steel Enterprises, Mumbai o. Jindutt Steel, Mumbai p. Madras Steel Agencies, Chennai q. Nobel Impex, Mumbai r. All India Stainless Steel Industries Association s. Stainless Steel Exporters Welfare Association t. Process Plant and Machinery Association of India

vii. Importer’s Questionnaire Response has been filed only by two importers namely:

a. M/s Posco India Chennai Steel Processing Centre Pvt. Ltd., (ICPC), Chennai

b. Posco India Delhi Steel Processing Centre Pvt. Ltd., (IDPC), Delhi

viii. However, submissions have been filed with regard to injury etc., by the following:

i. M/s All India Stainless Importer Association; ii. M/s MP Industries; iii. M/s Vinod Cookware; iv. M/s Meena Metal Impex Pvt. Ltd.

ix. The following other known domestic producers were also asked to provide information relevant to the investigation. However, none of these known producers have filed any information relevant to the investigation:

a. M/s Salem Stainless Steel, Chennai b. M/s Shah Alloys Ltd., Gujarat c. M/s BRG:-Corporate Office, West Bengal

x. Transaction-wise imports data procured from the Directorate General of Commercial Intelligence and Statistics (DGCI&S) has been relied upon for the analysis in present SSR investigation. Further, the Authority has also examined the Post-POI (January 2014 - June 2014) import data to analyze the trends for the purpose of likelihood assessment.

xi. Exporters, producers, importers and other interested parties, who have neither responded to the Authority nor supplied information relevant to this investigation, have been treated as non-cooperating interested parties by the Authority.

xii. Information provided by the interested parties on confidential basis have been examined with regard to reasonableness of the claim of confidentiality. On being satisfied, the Authority has accepted the confidentiality claims wherever warranted and such information has been considered as 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.

xiii. Non-confidential versions of the evidence presented by interested parties were made available in the form of a public file kept open for inspection by the interested parties as per Rule 6(7). Pursuant to the orders of the Hon’ble Delhi High Court in SanDisk matter, non-confidential version of the import data procured from DGCI&S has been kept in the public file open for inspection by the interested parties without prejudice to the appeal filed by the Authority before the Hon’ble Supreme Court of India in that matter.

xiv. The Authority has examined the information furnished by the domestic producer to work out the cost of production and determined the noninjurious price of the subject goods in India as per its consistent practices so as to ascertain whether anti-dumping duty, lower than the dumping margin, would be sufficient to remove injury to the domestic industry.

xv. 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 28.10.2014. The interested parties were requested to file written submissions of their views expressed orally. xvi. In view of the change in the Designated Authority a fresh public hearing was held on 18th August, 2015 to provide an opportunity to the interested parties to present their views on various aspects of the investigation.

xvii. In terms of Rule 16 of the Rules the Authority disclosed the essential facts of the case through a disclosure statement issued on 6th October, 2015 and the comments to the said disclosure received from the interested parties have been considered to the extent they are relevant. The submissions made by the interested parties during the course of the investigations and written submissions after the public hearings have been addressed in this disclosure to the extent they are relevant and backed by evidence.

xviii. Verification of the information and data submitted by the participating domestic producer as well as the responding exporters were carried out to the extent deemed necessary and feasible.

xix. Wherever an interested party has refused access to, or has otherwise not provided necessary information during the course of the present investigation, or has significantly impeded the investigation, the Authority has treated such parties as non-cooperative and has used "best information available" for the determinations to the extent required.

xx. In this finding **** represents information furnished by an interested party on confidential basis and so considered by the Authority under the Rules.

xxi. For the purpose of this investigation the period of investigation was taken as January 2013 to 31st December, 2013 (12 months) and for the purpose of injury investigation data was taken for the period 2010-11, 2011-12, 2012-13 and POI has been considered.

xxii. For the purpose of conversion of the transaction values in local currencies in the countries of exports the Authority has taken the exchange rates as reported by the cooperating/responding producers and exporters in their questionnaire response. For all other conversions, wherever the actual rate of conversion was not available, average exchange rate of US$ to Rupee for the POI has been taken as Rs.58.97 = 1 US$.

C. Scope of Product under consideration and like article

8. The product under consideration in the original investigation was Cold Rolled Flat Products of Stainless Steel. The Designated Authority in its final recommendations restricted the scope of the product on which duty was recommended to Cold Rolled Flat Products of Stainless Steel with widths upto and inclusive of 1250mm only with certain exclusions. The Central Government imposed the duties accordingly by defining the product in the Duty Table as follows:

“Cold Rolled flat products of stainless steel of width of 600 mm upto 1250 mm of all series further worked than Cold rolled (cold reduced) with a thickness of up to 4 mm.

The subject goods will have the following exclusions from the scope of the product:

i. Grade AISI 420 High carbon (0.28%-0.40%), Grade 420, Grade 430 BA supplied by M/s Thyssenkrupp Stainless International, Germany, Grade AISI 441 and Grade AISI 443;

ii. Duplex Stainless Steel grades 2205 (S31803), 2304 (S32304), EN 1.4835, 1.4547, 1.4539, 1.4438, 1.4318 and 1.4833 and Ferritic Grades EN 1.4509 and 1.4512;

iii. Product supplied under Indian Patent no. 223848 in respect of goods comprising Low Nickel containing chromium Nickel Manganese-Copper Austenitic Stainless steel and representing Grades YU 1 and YU 4, produced and supplied by M/s Yieh United Steel Corp (Yusco) of Chinese Taipei (Taiwan).”

9. Subsequently, the Domestic Industry filed a mid-term review, based on the application filed by the Domestic Industry and after following the due process of law, the Designated Authority recommended amendments to the original Customs Notification No. No. 14/2010-Customs dated 20th February, 2010 vide its Final Findings (Mid-term Review) No. 15/16/2009-DGAD dated 8.6.2011. Accepting the recommendations of the Designated Authority, the Central Government issued an amendment notification No. 86/2011-Customs dated 6.9.2011, inserting the following in the said notification, in para 1, after the Duty Table:-

“(a): Width tolerance of (+) 30mm shall apply to Mill edged, Cold-rolled flat products of stainless steel of specified width of 1000mm or more but not exceeding 1250 mm. (b):Width tolerance of (+) 4mm shall apply to Trim edged Cold rolled flat products of stainless steel of specified width exceeding 1000mm but not exceeding 1250mm.”

10. The Designated Authority carried out a mid-term review in terms of the directions of the Hon’ble Punjab & Haryana High Court as a consequence of which certain further amendments were made in the products earlier excluded from the purview of the anti-dumping duties vide Corrigendum dated 5.12.2011. The Central Government vide corrigendum notification dated 7.2.2012 accepted the revised Final Findings of the Authority. After the said review the followings were excluded from the purview of the product under consideration: i. The subject goods of width beyond 1250 mm (plus tolerances). ii. Grades AISI 420 high carbon, 443, 441, EN 1.4835, 1.4547, 1.4539, 1.4438, 1.4318, 1.4833 and EN 1.4509 iii. Product supplied under Indian Patent No. 223848 in respect of goods comprising Low Nickel containing Chromium-Nickel Manganese-Copper Austenitic Stainless steel and representing Grades YU 1 and YU 4, produced and supplied by M/s Yieh ;United Steel Corp (Yusco) of Chinese Taipei (Taiwan).

11. In view of the aforesaid, the product under consideration for the purpose of this sunset review was defined as follows:

“Cold-rolled Flat products of stainless steel of width of 600 mm upto1250mm of all series not further worked than Cold rolled (cold reduced) with a thickness of up to 4mm (width tolerance of +30 mm for Mill Edged and +4mm for Trimmed Edged)”, excluding the following:

i. The subject goods of width beyond 1250 mm (plus tolerances). ii. Grades AISI 420 high carbon, 443, 441, EN 1.4835, 1.4547, 1.4539, 1.4438, 1.4318, 1.4833 and EN 1.4509 iii. Product supplied under Indian Patent No. 223848 in respect of goods comprising Low Nickel containing Chromium-Nickel Manganese-Copper Austenitic Stainless steel and representing Grades YU 1 and YU 4, produced and supplied by M/s Yieh United Steel Corp (Yusco) of Chinese Taipei (Taiwan)”.

12. As per the petition the subject goods are classified under Base Metals and Articles of Base Metals” in Chapter 72 of the Customs Tariff Act, 1975 and imported under tariff codes 7219.31, 7219.32, 7219.33, 7219.34, 7219.35 and 7219.90 as per Customs Classification. However, Customs classification is indicative only and is in no way binding on the scope of the present investigation.

13. The petitioner, in its submissions, has requested to remove the restriction placed on the final PUC indicated in the duty table for collection of duties as the sole ground for exclusion of the widths above 1250mm (plus tolerances) was the conclusion of the Designated Authority that the Domestic Industry had not actually supplied the exact sizes from their existing facility during the period of investigation in the original investigation. Since the domestic industry has now started producing and supplying the wider widths, there is no legal or logical reason to not to remove the restriction placed on the product under consideration.

C.1 Submissions made by the Producers/Exporters/Importers and Associations

14. The interested parties, other than the domestic industry, have argued that Petitioner domestic industry’s request to include those grades which were excluded in the original investigation should be rejected. It has been argued that in the initiation notice dated 17th April 2014, the Designated Authority has defined the product scope as defined in the original investigation as amended during the mid-term review. Therefore, the products/goods, which are not covered or explicitly excluded from the product scope earlier, are outside the purview of ‘the’ anti-dumping duty. Therefore, in view of proviso to Section 9A(5) of the Act, there cannot be any review (changed/sunset review) to examine the need to extend ‘the’ anti-dumping duty on any other products/goods outside the products scope in original investigation. It has been argued that it is an undisputed legal position that continuation or recurrence is possible of a thing/condition, if that was in existence in past. The products/goods, which were not found dumped and thus caused injury, cannot be examined for continuation and/or recurrence of dumping/injury.

15. It has also been submitted that Designated Authority being a quasi-judicial authority, cannot deviate from its earlier decisions and is bound to follow its earlier decisions for consistency and predictability, which controls arbitrariness. The Designated Authority had consistently, as a matter of practice, held that product scope cannot be enlarged in reviews. In view thereof it is requested that the Authority should not increased the scope of the product under consideration in the sunset review investigation.

16. Some of the interested parties have further submitted that the certain grades of subject goods, which are not manufactured by the domestic industry, need to be excluded from the purview of anti-dumping duty.

C.2 Submissions of the Domestic Industry

17. The domestic industry, in its submissions, has argued that they have not demanded for any fresh inclusion or expansion of scope of the Product under Consideration. They have only requested to remove the restriction placed on the final PUC indicated in the duty table for collection of duties. It has been further submitted that the Authority may recall that the sole ground for exclusion of the widths above 1250mm (plus tolerances) was the conclusion of the Designated Authority that the Domestic Industry had not actually supplied the exact sizes from their existing facility during the period of investigation in the original investigation. Since the domestic industry has now started producing and supplying the wider widths, there is no legal or logical reason to not to remove the restriction placed on the product under consideration.

18. The domestic industry has further submitted that they are producing and supplying all the grades with all the finishes. Moreover, certain grades which were not manufactured by the Domestic Industry during the original POI are being manufactured and supplied by the Domestic Industry.

19. Domestic industry further submitted that they are unable to appreciate the fact that the responding exporters are making a claim that PUC cannot be modified in sunset review on the one hand, while they themselves want to modify the PUC by seeking exclusions. The domestic industry submits that no fresh exclusions can be made as a part of this review. However, the Authority is certainly within its rights to extend the duties to those exclusions which were always an integral part of the PUC but were excluded for reasons of nonsupply during the original POI.

20. According to the Domestic Industry, inclusion of the excluded categories would not amount to alteration of the scope of the PUC. The domestic industry has argued that the Designated Authority had merely restricted the imposition of anti-dumping duties keeping in mind the interests of the particular users. The Domestic Industry further points out that the restrictions made by the Designated Authority in the original findings can be removed particularly if the circumstances leading to such restriction/exclusion have now changed. In support of this argument the domestic industry submits that the initiation notification for this review specifically mentioned that the scope of the review will cover all aspects of the Notification No. 14/2010-Customs dated 20.2.2014, Custom Notification No. 86/2011 dated 6.9.2011 and dated 7.2.2012.

C.3 Examination by the Authority

21. Petitioner has contended that the only reason for excluding certain product types in original investigation was due to the fact that they had not supplied those grades and now that the Petitioner has started to supply such excluded grades or product types as well exclusion of such grades is not warranted.

22. The Authority notes that initiation notification in the original investigation defined the product under consideration as follows:

“Cold-rolled Flat products of stainless steel of the width of 600 mm or more of all series further worked than Cold rolled (cold reduced) (hereinafter also referred to as subject goods). The product under consideration comprises of stainless steel coil, sheets and plates of above description. The subject goods are used for manufacturer of white goods, processed equipment, dairy equipment, automotive components, rail carts, metro coaches, architecture, building and construction, etc. The subject goods are classified under Chapter 72 of the Customs Tariff Act, 1975 under the Sub-heading 7219.31, 7219.32, 7219.33, 7219.34, 7219.35 and 7219.90. …”

23. After a very detailed examination of various issues raised during the course of the investigation the Authority adopted certain broad principles for the purpose of exclusion of products of certain grades/specifications from the scope of the PUC. One such principle was whether the specification/ grade/production process/production technology pleaded by the interested parties resulted in a different product in terms of physical characteristics and chemical composition whereby the distinctiveness of the product can be established with clarity and precision. The second principle was whether the domestic industry claimed through their product broacher as manufacturer of these grades and was manufacturing/supplying such distinctive items at all during the POI or prior to the POI. Thirdly, whether any technical evidence was available to establish that the product grades supplied by the domestic industry during the POI were equivalent to the grades proposed/considered for exclusion. After a very detailed deliberation the Authority re-defined the product under consideration in the final findings of the original investigation as follows:

“Cold-rolled Flat products of stainless steel of the width of 600 mm upto1250mm of all series further worked than Cold rolled (cold reduced) with a thickness of up to 4mm (hereinafter also referred to as subject goods).”

The subject goods (PUC) will have the following exclusions from the scope of the product on grounds as explained above:

a) Grade AISI 420 High carbon (0.28%-0.40%), Grade 420, Grade 430 BA supplied by M/s Thyssenkrupp Stainless International, Germany, Grade AISI 441 and Grade AISI 443.

b) Duplex Stainless Steel grades 2205 (S31803), 2304(S32304), EN 1.4835, 1.4547, 1.4539, 1.4438, 1.4318 and 1.4833 and Ferritic Grades EN 1.4509 and1.4512.

c) Product supplied under Indian Patent no. 223848 in respect of goods comprising Low Nickel containing Chromium-Nickel Manganese-Copper Austenitic Stainless steel and representing Grades YU 1 and YU 4, produced and supplied by M/s Yieh United Steel Corp (Yusco) of Chinese Taipei (Taiwan).

24. Subsequently, the product scope was further modified in the midterm reviews carried out in June 2011 and December 2011 on the behest of the domestic industry and the orders of the Hon’ble Punjab and Haryana High Court and took into account the edge tolerance and other inclusions/exclusions and the final product scope as it exists today and on which the duty was in force and for which the sunset review has been initiated is defined as follows:

“Cold-rolled Flat products of stainless steel of width of 600 mm upto1250mm of all series not further worked than Cold rolled (cold reduced) with a thickness of up to 4mm (width tolerance of +30 mm for Mill Edged and +4mm for Trimmed Edged)”, with the exclusions excluding the following:

i. The subject goods of width beyond 1250 mm (plus tolerances). ii. Grades AISI 420 high carbon, 443, 441, EN 1.4835, 1.4547, 1.4539, 1.4438, 1.4318, 1.4833 and EN 1.4509 iii. Product supplied under Indian Patent No. 223848 in respect of goods comprising Low Nickel containing Chromium-Nickel Manganese-Copper Austenitic Stainless steel and representing Grades YU 1 and YU 4, produced and supplied by M/s Yieh United Steel Corp (Yusco) of Chinese Taipei (Taiwan).

The product under consideration is classified under the category “Base Metals and Articles of Base Metals” in Chapter 72 of the Customs Tariff Act, 1975 and further under 7219.31, 7219.32, 7219.33, 7219.34, 7219.35 and 7219.90 as per Customs Classification. However, Customs classification is indicative only and is in no way binding on the scope of the present investigation. It is used for manufacture of White Goods, Process Equipment, Dairy Equipment, Automotive Components, Rail Cars, Metro Coaches, Architecture, Building, kitchen products & Construction etc.”

25. The Authority notes the arguments of the domestic industry regarding inclusion of certain products within the scope of the product under consideration on the grounds that domestic industry has now started manufacturing the same and the criterion of actual supply and production set in the original findings is now fulfilled. The domestic industry has, in effect argued that the exclusion of certain grades/types etc. from the PUC at the time of the Final Findings did not really alter the scope of the PUC or the investigation. It has been further argued that the quintessential principle to define the scope of the PUC is whether the specific product is a “like article” to the product being imported or not. The underlying rationale of excluding certain product grades/types in the original investigation was that these products may not cause injury despite their being “like articles” on the premise that such products were not produced by the Domestic Industry. Now that the domestic industry produces and supplies these product types/grades/sizes continued exclusion of those product types/grades/sizes would adversely affect the domestic industry.

26. While there is some merit in the arguments of the domestic industry in a scenario where the product definition remains wide but certain restriction or exclusion has been placed only for the application and collection of duty. A careful examination of the case reveals that that is not the case here. The scope of the product under consideration itself has been restricted after detailed deliberation before proceeding for various determinations and the dumping and injury investigations are with respect to those included product types/grades/sizes only. Therefore, it is not a case where the scope of the PUC continues to be broad but application of the duty is restricted as has been argued.

27. It is further observed that in this case, the review has been initiated for the scope of the product as defined in the final finding and as modified by subsequent reviews. The Domestic Industry did not file any application for the review of the scope of the product under consideration as it did in 2011. The information supplied by the Domestic Industry did not include information of excluded products. Even the cooperating interested parties were not asked to include the information relating to the excluded products. In view of this, the Authority cannot accept the arguments of the domestic industry for inclusion of the excluded grades within the scope of the product under consideration.

28. As regards the issue of exclusion of certain other grades as argued by the other interested parties, the Authority notes that as per the information submitted by the domestic industry they have manufactured and supplied those grades. Accordingly, claim of the interested parties regarding exclusion of certain grades has no merit and therefore not accepted by the Authority.

29. No other argument has been made by any interested party on the product under consideration and like article issue. The Authority therefore, confirms that the scope of the product under consideration in the present review remains the same as that of the original investigation (as amended) and as defined in para 24 above for the purpose of this investigation.

30. The Authority notes that the subject goods being exported from the subject countries are alike in all respect to the goods being manufactured by the domestic industry. Therefore, the domestic goods are being held as like articles to the subject goods being imported within the meaning of the Rules.

D. Domestic Industry and Standing

31. The current application for the sunset review has been filed by M/s Jindal Stainless Limited who commanded 83% share in Indian production of the subject goods during the Period of investigation. As per the information available with the Authority there are three other known producers of the product under consideration in the country i.e., M/s BRG, Salem Steel Plant of Steel Authority of India Ltd. and M/s Shah Alloys. There is no opposition to the domestic industry’s application from any other producer in the country in the present investigation. Therefore, the petitioners command the standing to file the application and also constitute the domestic industry within the meaning of the term as per the AD Rules for the purpose of injury examination. None of the producers/exporters/other interested parties has made any submissions with regard to scope and standing of the domestic industry.

E. Interested parties to this investigation

32. On the basis of questionnaire responses and other submissions filed by the responding producers/exporters and importers listed in sub para v, vii and viii in para-7 above, alongwith the Govt.s of the Countries named in this investigation and the domestic industry in India have been treated as interested parties to this investigation. F. Issues regarding Confidentiality claims

33. The opposing interested parties have made the following submissions with regards to the confidentiality claims of the domestic industry:

a. That the Petitioner has claimed excess confidentiality and also refrained from providing any meaningful summary of information provided by it on confidential basis. In addition, Petitioner has failed to provide a statement of reasons why information provided on confidential basis is not susceptible to summarization. This has restrained the Respondent from making complete analysis of injury claims in the petition.

b. The Petitioner has claimed confidentiality on the costing information at Section VI of the Petition. Even though the claim of the Petitioner that the disclosure of information may give a significant advantage to the competitors may be correct and not be disputed, yet in such cases, the Petitioner is required to furnish non-confidential summary of such costing information. The petitioner is not at liberty to respond to each question with respect to costing with same brush. Wherever it is possible to provide an indexed version of submission, the petitioner is bound to provide the same.

c. Petitioner also failed to provide Production Process, Purchase Policy, Sales Policy, Inventory and Quality Control Procedure etc.

34. The domestic industry has also made the following submissions with respect to the confidentiality claims and arguments of the interested parties:

a. That the domestic industry has claimed confidentiality on its business sensitive information with adequate reasons in accordance with the legal provisions and the guidelines prescribed by the Authority. The reasons and grounds for claiming confidentiality have been given in the non-confidential version of the application. Hence, the claim of certain interested parties alleging excessive confidentiality is without any substance.

b. That the exporters by putting [ ] or ***** at various places in their response have kept the vital information confidential without providing any reasons. The exporters have also not given any summary of the information on which confidentiality has been claimed due to which the Domestic Industry is not in a position to offer its comments and defend its interests.

c. That Product specifications and product coding system used by the exporters are kept confidential without providing any reasons.

d. That the volume related figures in all the Appendices have been kept as confidential by the responding exporters whereas the domestic industry has disclosed all volume related information in the non-confidential version.

e. That allocation of costs among different cost centers has been kept confidential by the exporters. Further, whether the inputs consumed for production are purchased or captively produced by the company itself has also not been disclosed in the non-confidential version.

f. That the exporters have not provided their complete sales and distribution channel. In this context, domestic industry expressed its apprehension that this information was specifically withheld to hide the complete supply chain. It is submitted by the Domestic Industry that had the complete supply chain been placed in the non-confidential version, they would have been able to make effective submissions and provide additional information to the Authority which could have led to the rejection of their entire response.

F.1 Examination of the issue

35. Various submissions made by the interested parties during the course of the present investigation with regard to confidentiality and considered relevant by the Authority are examined and addressed as follows:

36. With regard to confidentiality of information, Rule 7 of the Anti-dumping Rules provides as follows:- Confidential information:

(1) Notwithstanding anything contained in subrules and (7) of rule 6, sub-rule (2), (3) (2) of rule 12, sub-rule (4) of rule 15 and sub-rule (4) of rule 17, the copies of applications received under subrule (1) of rule 5, or any other information provided to the designated authority on a confidential basis by any party in the course of investigation, shall, upon the designated authority being satisfied as to its confidentiality, be treated as such by it and no such information shall be disclosed to any other party without specific authorization of the party providing such information.

(2) The designated authority may require the parties providing information on confidential basis to furnish non-confidential summary thereof and if, in the opinion of a party providing such information, such information is not susceptible of summary, such party may submit to the designated authority a statement of reasons why summarization is not possible.

(3) Notwithstanding anything contained in sub-rule (2), if the designated authority is satisfied that the request for confidentiality is not warranted or the supplier of the information is either unwilling to make the information public or to authorise its disclosure in a generalized or summary form, it may disregard such information.

37. Information provided by the interested parties on confidential basis was examined with regard to sufficiency of the confidentiality claim. As regards the contention of the opposing interested parties with regard to non-disclosure of the costing information, the Authority notes that costing and price related information is confidential in nature and generally not amenable to summarization. Therefore, the claim of the interested parties regarding excessive confidentiality by the Domestic Industry is not valid and hence rejected. On the other hand, the Authority observes that the Domestic Industry has vehemently contended that exporters has not revealed certain basic information relating to their volume related information and that most of the appendices in the questionnaire response have not been indexed which could provide a meaningful understanding to the concerned parties. The Authority has accepted the confidentiality claims, wherever warranted, of the domestic industry and opposing interested parties 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. The Authority made available the non-confidential version of the evidences submitted by various interested parties in the form of public file. Accordingly, all the arguments of the parties regarding confidentiality claims and non-confidential disclosure issues have been disposed off.

G. Other issues raised by the interested parties

G.1 Submissions of Exporters/Importers and other interested parties

38. The exporters/importers and other interested parties, in their various submissions, have argued/submitted as follows:

(i) That the present sunset review cannot be conducted due to lack of jurisdiction and must be terminated immediately. Since the duty lapsed on 21st April, 2014 and the extension was only formalized vide Notification dated 12th May, 2014, the continuation of present sunset review is rendered otiose under law;

(ii) That the sunset review is required to be terminated because review proceedings cannot be carried on beyond one year period. Section 9A (5) read with Rule 23(2) empowers the Central Government to extend the levy of the anti-dumping duty for a period of one year only and the sunset review is to be concluded before the expiry of that period.

(iii) That the initiation of sunset review is not on suo motu basis but based on a request made by the Petitioner to DGAD. The information has been filed by the Petitioner but such insufficient and inaccurate information cannot be said to be ‘duly substantiated’ information in terms of Rule 23(1B) of AD Rules;

(iv) That in the Petition provided by the Petitioner, there is no explanation as to how Petitioner refined the import statistics from the raw import statistics procured by it. Petition also fails to disclose how Petitioner segregated subject product from non-subject product and what all product types has been included in the import statistics relied upon. There is also no mention about any other factors considered by the Petitioner while sorting the import data. Unless such information is made available, correctness of the information provided with respect to allegation of injury cannot be analyzed properly;

(v) That the domestic industry has not provided any evidence for the deductions made under the categories of ocean freight, marine insurance, port handling, inland freight, and sales commission, or bank charges in the petition to arrive at the net export prices;

(vi) That Jindal is practically the sole operator in the Indian market with more than 80% market share and enjoys unlimited supply and pricing power. There is no reason why Jindal should be enriched at the cost of thousands of user industries and at the cost of loss of Custom revenue.

(vii) That the imports from all the subject countries are below de minimus and therefore, there is no occasion for imposing anti-dumping duty.

(viii) That the anti-dumping duty should not be extended as this will create virtual monopoly for the domestic industry

(ix) That the Authority should determine the dumping and injury margin for each grades of subject goods bearing in mind the vast differences in technical characteristics as well as end use of various grades of subject goods.

(x) That the domestic industry has received adequate protection from DGAD since the imposition of provisional duty in the original investigation. Hence, antidumping duty should not be extended any further.

G.2 Submissions made by the Domestic Industry

39. The domestic industry, in its various submissions, has inter alia argued/submitted that:

(i) That the import data of the subject goods have been sorted out based on the description given in each transaction in the transaction-wise import data. Basis of compilation of the import data for PUC has been explicitly mentioned in the petition itself. Further, the source, period and tariff headings of the raw data have been indicated in the application itself. There is no legal requirement to provide the raw data so long as the entries pertaining to the PUC as well as the headings from which the same have been taken out are disclosed in the non-confidential version of the submissions. Further, the domestic industry has submitted that if the plea of the interested parties is accepted, then it would actually mean that the Domestic Industry would be required to file details even of those subheadings which have not been used for compiling the import data;

(ii) That the domestic industry has submitted all the evidence which is reasonably available to it. The domestic industry has claimed the adjustments to the export price as per its market intelligence, which is considered to be sufficient evidence for initiation of an investigation as per consistent practice of the Designated Authority.

(iii) That the costing data has been provided on per ton to facilitate proper comparison of costs and prices of the different grades/types of the product under consideration.

(iv) That the claim of the interested parties that sunset review is required to be terminated because review proceedings cannot be carried on beyond one year period, is without any legal or logical merit. In this context, reference has been drawn to the provisions of Section 9A (5) wherein the chapeau itself prescribes that the duties shall remain in effect for a period of five years from the date of its imposition. In terms of the first proviso, this period can be extended by another five years period subject to the satisfaction of the conditions mentioned therein. The second proviso allows collection of duties for another one-year period pending conclusion of the investigations. Accordingly, it is important to note that there is no specific bar, direct or indirect, on the investigations continuing beyond the six-year period though there may be a bar under the second proviso that duty may continue to remain in force not exceeding one year. Clearly, the term “not exceeding one year” could at best be read in the context of duty and not in the context of review investigation.

(v) Further, domestic industry has invited the attention of the Authority to Rule 17 of the Anti-dumping Rules, which allows a time period of upto 18 months to complete the investigations. Furthermore, Rule 23(3) clearly states that the provisions of rules 6, 7, 8, 9, 10, 11, 16, 17, 18, 19, and 20 shall be mutatis mutandis applicable in the case of review investigation. Accordingly, provisions of Rule 17 are applicable to a sunset review case also. First proviso to Rule 17(1) categorically states that the Central Government may extend further the period of one year by six months for the completion of the investigation.

(vi) Attention of the Authority was invited to recent decision of the Hon’ble Delhi High Court [NBR case of Kumho Petrochemicals Co. Ltd. V/s UOI] wherein the Authority was permitted to continue the investigations despite the fact that the anti-dumping duties beyond the period of five years was set aside. It is further submitted that the only harmonious interpretation of the provisions of Section 9A (5), Rules 23 and 17, would be to read the provision of collection of duty disjunct from the period permissible for the completion of the investigation proceedings. Any other interpretation would invariably violate the vested rights of the Domestic Industry provided in Section 9A (5) itself. In any case, Rule 23 cannot be read in a manner that it takes away rights vested by Legislature. It is settled principle of law that a Rule cannot be interpreted in a manner that it frustrates the object and purpose of the main Act. Therefore, it is amply clear that even in the sunset review case, proceedings can be carried on beyond one-year period and the embargo, at best, can be applied only to the collection of duties beyond a period of six years. Thus, there is no legal infirmity or lacuna in the proceedings before the Authority.

(vii) That the Authority has taken a consistent view that the purpose of antidumping duty is to create a level playing field and to provide relief to domestic industry due to injurious effect of dumped imports from the subject countries or the threat of likelihood of continuation/recurrence of dumping and injury once the duties are withdrawn.

(viii) That the apprehension of a monopoly being created is baseless as the domestic industry is not the only player in the Indian domestic market. Besides other domestic produces, domestic industry has to compete with the imported subject goods which are feely available in the market from subject countries as well as from other countries also. Therefore, the submissions of the interested parties are legally and factually untenable.

(ix) The de minimus criterion of imports does not apply in the sunset review investigations. The Domestic Industry submits that the reason for declining quantum of imports of subject goods from subject countries is because importers are bringing the higher widths i.e., widths above 1250MM only to circumvent anti-dumping duties. This was precisely the reason as to why the domestic industry, in the current proceedings as well as in the original investigations, pleaded before the Authority not to restrict the scope of the product under consideration on the basis of widths. (x) That the related importers of M/s Posco, Korea have not submitted the importer’s questionnaire response. Further, no reasons have been advanced by them as to why the importer’s questionnaire has not been filed by their related importers.

(xi) That the responses of exporters/ producers from Korea cannot be accepted as they have failed to provide complete value chain. All the exporters of Posco Korea, has not responded and participated in the investigation. Therefore, their responses cannot be said as complete and needs to be rejected.

G.3 Examination by the Authority

40. The Authority has examined the issues raised by the domestic industry and other parties in their various submissions. The interested parties have contended that anti dumping duty cannot be continued by Ministry of Finance after expiry of existing anti dumping duty. The Authority notes in this regard that the decision of Hon'ble Delhi High Court was challenged before Hon’ble Supreme Court and the Hon’ble Court has granted an interim stay on the operation of the orders of the Hon'ble Delhi High Court. In the present case, the investigation was initiated before expiry of the duty. The Authority also notes that in similar situations the Hon’ble Delhi High Court [NBR case of Kumho Petrochemicals Co. Ltd. V/s UOI] upheld initiation of the sunset review investigations and permitted to continue the investigations despite the fact that the anti-dumping duties beyond the period of five years was set aside.

41. The interested parties have also argued that review proceedings cannot be carried on beyond one year period and therefore the present sunset review is required to be terminated. The Authority notes that constructive interpretation of Section 9 A (5) of the Act and Rule 23 of the Rules indicates that there is no specific bar on the continuation of the review investigations beyond one year from the date of initiation. Further, the Authority notes that the issue has been agitated by various parties before the Hon’ble Courts and the Courts have not yet ruled against this interpretation. In view of the aforesaid, the Authority accepts the contentions of the Domestic Industry that the only harmonious way to read the various provisions mentioned above is to hold that sunset review proceedings can be carried on beyond one-year period without infringing upon any specific provision of law.

42. As regards the issue that the domestic industry has received adequate protection for last 5 years and continuation of the duty will adversely impact the user industry as the petitioners are using this protection to maximize their profits, the Authority notes that the purpose of anti-dumping duty is only to create a level playing field and to provide relief to domestic industry due to injurious effect of dumping. Further, it is also noted that the anti-dumping duty is not envisaged to provide undue protection to the domestic industry. Moreover, none of the interested parties has provided any evidence whatsoever, as to how the continuation of duties against imports from the subject countries would be detrimental to the larger interests of the economy or the country. However, the issues of undue protection, if any, has been examined in the relevant section so that the duty is not unduly imposed for a period beyond which it is required.

43. As far as adequacy of information submitted by the petitioner in its application for sunset review is concerned, the Authority notes that the prima facie evidence submitted by the petitioner was examined by the Authority before initiation of the investigation and being satisfied with the prima facie evidences the subject investigation was initiated. However, the actual determination is based on actual data of the responding exporters and importers and other facts available with the Authority. Therefore, the interests of the parties have not been compromised.

44. As regards, the submission of questionnaire responses by the exporters and related importers of POSCO, Korea is concerned, the Authority notes that the responses are in record and the issue has been addressed in determination of the dumping margin of this responding exporter/producer from Korea.

45. In their post disclosure submissions the domestic industry and the interested parties have reiterated their respective positions with regard to various aspects of the investigation. All other issues raised by the parties to the investigation have been dealt in the respective sections in this statement to the extent they are relevant and not repeated here for the sake of brevity.

46. In its post disclosure submissions the domestic industry has argued that nine of the cooperating exporters should be granted individual treatment as they have suppressed significant information with regard to their related parties involved in production and supply of the subject goods in various countries. It has been further argued that though two of the related importers of POSCO, Korea have filed importers’ questionnaire response, the third related importer and processor located at Pune has not filed questionnaire response, therefore the response of POSCO should be rejected. The domestic industry has quoted the decision of the Authority in a recent finding of the Authority where the responses of certain exporters were rejected on the grounds that the related companies of the responding exporters did not file questionnaire response. In this connection the Authority notes that the questionnaire responses filed by the producers and exporters in this case provide sufficient and complete information required for the determination to the extent relevant and necessary and the information flied have been verified to the extent required. Determinations in the present case have not been in any way affected by alleged non-participation of the related parties of the cooperating exporters in other countries. If some related party of the responding producer/exporter in a third country, involved in production or sale of the subject goods, has not filed questionnaire response, the said party will automatically be covered under the non-cooperating residual duties. Therefore, neither the determinations nor the interests of the domestic industry have been affected due to non-participation of the so called related parties of the cooperating exporters in other countries. In view of the above, the objections of the domestic industry in this regard have not been accepted.

47. The domestic industry has further argued that the data of the responding exporters should be reconciled with DG Systems data as has been done in other cases. In this connection the Authority notes that reconciliation with DG System data or any other data base is resorted to in certain cases where there is certain data discrepancy in exporter’s data or any prima facie evidence to that effect is available. It is neither a mandatory requirement, nor a general practice. No such specific discrepancy has been brought to the notice of the Authority during the course of the investigation necessitating such an exercise.

H. Determination of Normal Values, Export Prices and Dumping Margins

H.1 Legal Positions

48. Section 9A (5) of Customs Tariff Act, 1975 provides that:-

“The anti dumping duty imposed under this Section shall, unless revoked earlier, cease to have effect on the expiry of five years from the date of such imposition:

Provided that if the Central Government, in a review, is of the opinion that the cessation of such duty is likely to lead to continuation or recurrence of dumping and injury, it may, from time to time, extend the period of such imposition for a further period of five years and such further period shall commence from the date of order of such extension;

Provided further that where a review initiated before the expiry of the aforesaid period of five years has not come to a conclusion before such expiry, the Anti dumping duty may continue to remain in force pending the outcome of such a review for a further period not exceeding one year.” 49. Accordingly, a sunset review investigation is to examine:

 Whether the dumping continues after imposition of the antidumping duty and if so, whether it is likely to continue;

 In cases where dumping did not continue, whether the dumping would recur in the event of revocation of anti dumping duties;

 Whether the domestic industry continued to suffer material injury and if so, whether injury to the domestic industry is likely to continue if the duties are removed;

 In cases where the domestic industry has not suffered continued injury, whether injury to the domestic industry is likely to recur in the event of revocation of anti dumping duties.

50. Therefore, continuation of dumping and injury has been examined first before examining whether dumping is likely to continue or recur if the duties are revoked, and injury is likely to continue or recur in such a situation.

H.2 Examination of Continuation of Dumping: Determination of Normal Values, Export Prices and Dumping Margins

51. The investigation was initiated against the goods originating in or exported from Peoples Republic of China, Republic of Korea, the European Union, South Africa, Chinese Taipei, Thailand and the United States of America. In response to the initiation notification the following producers/exporters have filed their questionnaire responses:

i. M/s Acerinox Europa S.A.U, Spain ii. M/s Columbus Stainless (PTY) Ltd., South Africa iii. M/s POSCO, Korea iv. M/s Daewoo International, Korea v. M/s Hyundai Corporation, Korea vi. M/s Posco Thainox, Thailand

52. No response has been filed by any producer/exporter from Peoples Republic of China, Chinese Taipei, and the United States of America. Domestic industry has submitted that in the absence of response from these countries/territories normal values in these countries/territories should be constructed as per the best information available, including that of the domestic industry.

53. The Authority has considered the responses submitted by various interested parties and have arrived at the determination based on these submissions after verification, wherever considered necessary and unless rejected summarily. The Normal value has been arrived at by doing grade to grade comparison under each series, after applying the (ordinary course of trade test) OCT test and sufficiency test and as per the methodology prescribed under the rules. The export price and adjustments claimed have been allowed on the basis of submissions and verification, wherever undertaken.

54. Basis of determination of Normal Values and Export Prices with respect to the cooperating exporters and other non-cooperating exporters in the subject countries/territories were disclosed by the Designated Authority in the disclosure statement issued on 6th October 2015. The comments received from the interested parties with regard to the methodology and accuracy of the data therein have been examined to the extent they are relevant and considered for this final determination. Accordingly, the determination of degree and extent of current dumping from the subject countries have been outlined in the following paragraphs.

a. China PR

55. The domestic industry has submitted that China being a non-market economy, normal value of the subject goods in that country cannot be determined on the basis of price prevailing in that country and therefore, needs to be constructed. With regard to determination of a normal value in China the domestic industry has inter alia argued that:

i. Market economy status cannot be granted unless the responding exporter/company and its group as a whole make a claim. In the present case, there is no claim for market economy treatment. None of the Chinese exporters have filed questionnaire response, nor claimed market economy treatment. ii. The normal value in China can be determined on the basis of (a) price in India, and (b) cost of production in India, duly adjusted, including selling, general and administrative expenses and profit as per procedure described in Para 7 of Annexure I and consistent practice being followed by the Authority in case when no response has been filed by the exporter. Normal Value in China should be determined based on the cost of production in India, duly adjusted. iii. The normal value in China may be constructed by considering international price of the raw material and adopting the consumption norms and conversion cost as per the best information available, including that of the domestic industry.

Normal Values: China PR

56. At the stage of initiation, the Authority proceeded with the presumption that China PR is a non-market economy country. Upon initiation, the Authority advised the producers/exporters in China to respond to the notice of initiation and provide information relevant to determination of their market economy status. The Authority sent copies of the MET questionnaire to all the known producers/exporters for rebutting presumption of non-market economy in accordance with criteria laid down in Para 8(3) of Annexure-I to the Rules. The Authority also requested Government of China to advise the producers/exporters in China to provide the relevant information. However, none of the Chinese producers/exporters has filed any response. The Authority notes that in the past several years China PR has been treated as a non-market economy country in anti-dumping investigations by India and other WTO Members.

57. In view of the above position and in the absence of rebuttal of non-market economy presumption by any Chinese exporting company, the Authority considers it appropriate to treat China PR as a non-market economy country in the present investigation and proposes to proceed with Para 7 of Annexure I to the Rules for determination of normal value in case of China PR.

58. Para 7 of Annexure I of the Anti-dumping Rules provide 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.”

59. The Authority has examined the possibility of determination of the normal value in China in terms of first and second options in Para 7 of Annexure I of the AD Rules. In this regard it is noted that none of the interested parties has provided any meaningful information for selection of an appropriate third country as a surrogate country for determination of the normal value on the basis of cost and prices in that country or price from such country to other countries, including India as the normal value in China as per the first two alternatives in the Para 7 referred above.

60. Therefore, the normal value in China has been determined as per the third alternative provided in the Rules referred above and normal value has been constructed on the basis of the cost of production of the efficient domestic producer/plant in India after making due adjustment for the international prices of major raw material. The Authority has also provided for reasonable profit as per its consistent practice. Accordingly, weighted average constructed normal values, for the grades/series of the goods originating in or exported from China PR, has been determined as follows:

exported from China PR

61. Weighted average export prices of the grades/series of the subject goods imported from China PR has been determined on the basis of the import data relied upon after adjusting the CIF price for ocean freight and insurance, inland freight and other handling expenses as per facts available, in the absence of cooperation from the exporters from China PR. The Authority also notes that the subject goods attract VAT refund @13%. Therefore, 4% VAT paid but not refunded has been adjusted to arrive at weighted average net ex-works export prices at series level as follows:

exported from China

62. The weighted average Normal values at series level have been compared with the weighted average net export prices to arrive at the dumping margins as follows:

Dumping Margins China PR

b. European Union

63. The Authority notes that as per the import statistics obtained from DGCI&S and analysed 2085 MTs of the subject goods have been imported from the European Union during the period of investigation covering 300 and 400 series. However, only one producing company located in the European Union i.e., M/s Acerinox Europa SAU, Spain, has filed its questionnaire response though questionnaires were sent to several producers in the European Union. Therefore, the Authority has determined the dumping margins for the exporters in the European Union based on the information provided by the cooperating exporter as well as facts available on record as follows:

Normal Values: Acerinox Europa , S A U, Spain (Acerinox)

64. Acerinox Group is one of the largest stainless steel producers in the world with their presence in Asia, Europe, Africa and America and produces both hot rolled and cold rolled stainless steel products. The questionnaire response filed by this cooperating producing exporter was verified through an on spot investigation. Acerinox, Spain produces and sells the subject goods in whole of European Union. For the purposes of this investigation, European Union being a single market, all sales to customers within EU countries have been considered as domestic sales. There were **** transactions of domestic sales within the European Union aggregating to **** MT of the subject goods. The company has produced three major grades of the subject goods in 300 and 400 series in the domestic market. The company had sold **** MT to unrelated parties in the domestic market compared to **** MTs sold to related parties in the home market. The average prices to related parties are found to be marginally higher compared to the prices to unrelated parties in the domestic market. Therefore, all sales in the domestic market has been considered for determination of Normal Value of this producing exporter.

65. The domestic sales transactions were subjected to ordinary course of trade test on the basis of verified grade-wise cost of production maintained by the Company for determination of Normal Values of individual grades for fair comparison with the respective grades in export transactions for determination of the dumping margins. Wherever the corresponding exported grades were not sold in the domestic market or the domestic transactions did not pass ordinary course of trade test the normal value has been determined on the basis of profitable sales transactions or verified cost of production plus reasonable profit of 5% to arrive at the normal value of that grade. The domestic selling prices have been adjusted for all selling expenses, as verified, to arrive at ex-works prices. Accordingly, the ex-works Normal Values of various Grades of the subject goods produced and exported by Acerinox, Spain to India during the POI have been first determined at the individual grade level and then consolidated at the series level as follows:

Grades of the subject goods produced1

Export Prices: Acerinox Europa S A U, Spain

66. The company had exported only two grades of the subject goods, covering 300 and 400 series, totaling to **** MT directly to the unrelated Indian customers during the POI. All direct selling expenses, including expenses towards logistics, insurance, bank charges, commission and credit costs etc. incurred on the export sales to India have been adjusted to arrive at ex-works export prices of the grades/series exported to India works out as follows:

Export Prices Acerinox Europa SAU Spain1

Dumping margin: Acerinox Europa S A U, Spain

67. The ex-works normal values and the net-ex-works export prices, so determined, have been compared to determine the dumping margin for the responding exporter as follows:

Dumping margin Acerinox Europa SAU Spain1

All other exporters from the European Union

68. The Authority notes that there are a number of other producers of the subject goods in the European Union who produce and export the subject goods and participated in the original investigation. However, none of them have participated in the current review investigation. Since none of the other producers and exporters in EU has submitted any evidence with regard to the Normal Values and export prices of the subject goods the dumping margin for the remaining non-cooperative producers / exporters is proposed to be determined based on best facts available, taking into account the information submitted by the cooperating exporter from the European Union and the information available in the petition. Accordingly, the dumping margins for the non-cooperating exporters from the European Union have been determined as follows:

All other exporters from the European Union1

c. South Africa

69. As per the DGCI&S data only **** MTs of the subject goods have been exported from South Africa during the POI. Only producing exporter in South Africa, i.e., by M/s Columbus Stainless (Pty) Ltd., South Africa, has filed the questionnaire response in this review investigation. The information submitted by this company was also verified in an on-spot investigation. The Authority has relied upon the information submitted by this cooperating producer/exporter for determination of their dumping margin as follows:

Normal Values: Columbus Stainless

70. The Company sold ****MT of the subject goods in the domestic market during the POI against **** transactions. All sales are to unrelated customers in South Africa. The domestic sales transactions were subjected to ordinary course of trade test on the basis of verified grade-wise cost to make and sale maintained by the Company for determination of Normal Values of individual grades for fair comparison with the respective grades in export transactions for determination of the dumping margins. Wherever the corresponding exported grades were not sold in the domestic market or the domestic transactions did not pass the ordinary course of trade test the normal value has been determined on the basis of profitable sales transactions only or verified cost of production plus reasonable profit of 5% to arrive at the normal value of that grade. All direct selling expenses have been deducted from the domestic transactions to arrive at the normal values at the ex-works level. Accordingly, the weighted average ex-works Normal Values of various Grades exported by Columbus to India during the POI have been first determined at the individual grade level and then consolidated at the series level as follows:

Normal Values Columbus Stainless1

Export Prices: Columbus

71. During the POI, Columbus had exported **** MT of the subject goods to India covering all three series to unrelated customers in India. All direct selling expenses including, expenses towards logistics, insurance, bank charges and credit costs incurred on export sales to India have been adjusted to arrive at ex-works export prices of the grades/series exported to India works out as follows:

Export Prices Columbus1

Dumping Margins: Columbus

72. The ex-works normal values and the net-ex-works export prices, so determined, have been compared to determine the dumping margin for the responding exporter as follows:

Dumping Margins Columbus

Other exporters from South Africa

73. For all other exporters from South Africa dumping margins have been determined on the basis of information available in the questionnaire response filed by the cooperating exporter in Korea RP as follows:

Other exporters from South Africa1

d. Korea RP

74. As per the DGCI&S import data analysed 2306 MTs of the subject goods were imported from Korea RP during the POI. M/s POSCO, Korea, who is a major producer and exporter of the subject goods in Korea has filed questionnaire response. During the POI POSCO has exported the subject goods to India through two Korean Trading Companies namely M/s Daewoo International and M/s Hyundai Corporation. POSCO has filed its questionnaire response as producer supported by the questionnaire responses of the above trading companies. The responses of POSCO and the trading companies named above were also verified in accordance with the procedure. The dumping margins of this Korean producer have been determined on the basis of the responses filed by them. Dumping margins for other non-cooperating producer/exporters from Korea have been determined on the basis of information filed by cooperating exporters and other facts available.

Normal Values: POSCO, Korea

75. POSCO is an integrated steel manufacturer and produces full range of carbon steel products, including hot-rolled coil and sheet, alloy steel, coldrolled coil and sheet, electrical coil, galvanized coil and sheet, plate, and wire rod, as well as various stainless steel coil and sheet products. POSCO sold **** MT of the subject goods of wide range of grades in the domestic market during the POI to both related as well as unrelated customers in Korea against **** transactions. POSCO has single channel of distribution and sold its product concerned to domestic customers directly from the factory or from the warehouses. The related party sales are about ****% of the total sales in the domestic market. However, only few grades have been exported to India and in case of grades sold to India the related party sales is about ****% and the average prices to related parties is higher compared to the average price to unrelated buyers in the domestic market. Therefore, all sales of the relevant grades exported to India, including related party and unrelated party sales have been considered for determination of Normal Value for POSCO for like to like comparison with the export transactions and determination of dumping margin. POSCO, Korea, in its comments to the disclosure statement, has pointed out certain errors in sorting of domestic sales transactions while determining the Normal Value. The errors have been rectified and the normal values have determined accordingly.

76. The domestic sales transactions have been subjected to ordinary course of trade test on the basis of verified grade-wise cost of production maintained by the Company for determination of Normal Values of individual grades for fair comparison with the respective grades in export transactions for determination of the dumping margins. Wherever the corresponding exported grades were not sold in the domestic market or the domestic transactions did not pass ordinary course of trade test the normal value has been determined on the basis of profitable sales transactions or verified cost of production plus reasonable profit of 5%. Domestic sales have also been adjusted for all selling expenses as verified. Accordingly, the weighted average ex-works Normal Values of various Graded exported by POSCO to India during the POI are proposed to be first determined at the grade level and then consolidated at the series level as follows:

Normal Values POSCO Korea1

Export Prices: POSCO, Korea

77. During the period of investigation POSCO sold **** MT of CR Coils, falling within the scope of the product under consideration, to two traders in Korea namely M/s Daewoo International and M/s Hyundai Corporation for exports to India. **** MTs were exported through the unrelated trader i.e., Hyundai Corporation. Balance **** MTs were sold to their related trading Company M/s Daewoo International for exports to India. The goods have however, been shipped directly to India from the production facility of POSCO to the customers of the trading companies, while the commercial invoices were raised by the trading companies on the Indian Customers. Hyundai Corporation and Daewoo International have also filed separate questionnaire responses. All the responses have been verified through on-spot investigations. Certain minor errors in calculation of the export prices as pointed out by the exporter, in its post disclosure comments, have also been taken into account in determination of the export prices.

(i) POSCO: through Hyundai Corporation

78. Hyundai Corporation has reported export of **** MTs of the subject goods manufactured by POSCO to unrelated customers in India. The export sales are on CIF terms. POSCO and Hyundai have provided the details of expenses towards logistics, handling, insurance cost, ocean freight and credit cost etc. to arrive at ex-works price. Accordingly, net ex-works prices of exports by POSCO through Hyundai Corporation works out as under:

POSCO through Hyundai Corporation1

(ii) POSCO: through Daewoo Corporation

79. Though POSCO had supplied **** MTs of the subject goods to Daewoo for exports to India Daewoo has exported 399.888MTs of stainless steel flat products conforming to the scope of Product Under Consideration and rest were slit by them in local service centre of POSCO to lower widths as per the requirements of the customer and exported to India as non-PUC. Daewoo has exported the goods to its related parties in India as well as unrelated customers. The related customers in India, i.e., POSCO India Delhi Steel Processing Centre PVT. Ltd. (IDPC) and POSCO India Chennai Steel Processing Centre Pvt. Ltd. (ICPC), as well as the trading Co. i.e., Daewoo International, have filed separate questionnaire responses. Therefore, all entities have been treated as a single entity for determination of the export price, which has been constructed in terms of Section 9A(1)(b) of the Act taking into account the price at which the goods have been first resold by IDPC and ICPC in India. Accordingly, constructed net ex-works export prices of POSCO exported through Daewoo International works out as under:

POSCO through Daewoo Corporation1

80. The domestic industry, in its post disclosure submissions, has submitted that the Authority should confirm deduction of all sales related expenses and profit margins of Daewoo and the related importers while arriving at the ex-works export price of the producer in view of the relationship of the parties involved in the transactions. In this connection the Authority notes that the intermediate related parties i.e., M/s Daewoo and IDPC and ICPC have sold the goods at sufficient margins to cover the sales related expenses and profit.

81. POSCO, in its post disclosure comments, has argued that adjustment of duty drawback, as claimed by them, should have been allowed by the Authority as this adjustment is granted to neutralize the impact of duties and taxes paid on raw materials/inputs which are refunded / rebated in case of exports of goods. Differences in sales price due to difference in levels of taxation on inputs do not constitute unfair pricing behavior. The Authority notes that the claim of adjustment of duty drawback could not be adequately substantiated with clearly verifiable evidence directly linked to the product exported to India. Therefore, the claim could not be accepted.

Dumping Margins for POSCO and its exporters

82. The ex-works normal values and the net-ex-works export prices, so determined, have been compared to determine the dumping margin for the above responding producer and exporters as follows:

Dumping Margins for POSCO and its exporters1

All other exporters from Korea RP

83. For all other exporters from the Korea RP dumping margins have been determined on the basis of information available in the questionnaire response filed by the cooperating exporter in Korea RP as follows:

All other exporters from Korea RP1

e. Thailand

84. As per the DGCI&S import data analysed 1394 MTs of the subject goods were imported from Thailand during the POI. M/s POSCO, Thainox, who is a major producer and exporter of the subject goods in Thailand has filed questionnaire response.

POSCO, Thainox, Thailand

85. POSCO Thainox produces cold rolled products from the HR/black coils procured from other producers and carries out annealing & pickling, coldrolling and surface finishing. During the POI POSCO Thainox has exported the **** MTs of the subject goods to India. The Company has exported the subject goods to India directly as well as through Hyundai Corporation, an unrelated Trading Company, located in Korea RP. The Company exported **** MT of subject goods through Hyundai Corporation and rest was exported directly. M/s Hyundai Corporation has also submitted the information related to the exports of goods manufactured by POSCO Thainox. The responses of POSCO Thainox and its trading company named above were also verified in accordance with the procedure. Therefore, the dumping margin of this Producer-exporter from Thailand has been determined on the basis of the responses filed by the cooperating exporters and other facts available as follows:

Normal Values: Posco Thainox

86. Thainox had sold a total quantity of *** MT of the subject goods in the domestic market covering a wide range of grades. Out of total domestic sales only *** MT (***%) were sold to its affiliated companies in Thailand. However, against large number of grades sold in domestic market only 6 grades were exported to India during the POI. Therefore, for fair like to like comparison only grades exported to India have been considered for determination of normal value of this exporter. **** MTs of comparable grades were sold in the domestic market and 100% of the sales were to unrelated customers in Thailand. The domestic sales transactions have been subjected to ordinary course of trade test on the basis of verified grade-wise cost of production maintained by the Company for determination of Normal Values of individual grades for fair comparison with the respective grades in export transactions for determination of the dumping margins. Wherever the corresponding exported grades were not sold in the domestic market or the domestic transactions did not pass ordinary course of trade test the normal value has been determined on the basis of profitable sales transactions or verified cost of production plus reasonable profit of 5% to arrive at the normal value of that grade. The exporter has also provided the details of direct selling expenses in the domestic market to arrive at the ex-works prices which was also verified in onspot investigation. Accordingly, the ex-works normal values of this producing exporter have been determined as follows:

Normal Values Posco Thainox1

Export Prices: POSCO Thainox

87. M/s POSCO Thainox has exported ****MT of the subject goods under ****Transactions during POI for a total value of THB ****. The Company has exported the subject goods to India directly as well as through Hyundai Corporation, an unrelated Trading Company, located in Korea RP. The Company exported **** MT of subject goods through Hyundai Corporation and rest was exported directly. The goods have been shipped directly to India from the production facility of Thainox to the customers in India. In cases of the exports through the trading company only commercial invoices were raised by the trading company on the Indian Customers while goods were directly shipped by Thainox. Hyundai Corporation has also filed separate questionnaire responses covering these transactions.

88. The exports are on CIF and FOB terms and the payment has been received through L/Cs or TT. Thainox and Hyundai have provided the details of expenses towards logistics, handling, insurance cost, ocean freight wherever applicable, packing cost, bank charges and credit cost for the credit periods availed to arrive at ex-works price. Accordingly, net ex-works prices of exports by Thainox directly and through Hyundai Corporation works out as under

Export Prices POSCO Thainox1

Dumping Margin: Thainox and its exporters

89. The ex-works normal values and the net-ex-works export prices, so determined, have been compared to determine the dumping margin for the above responding producer and exporters as follows:

Dumping Margin Thainox and its exporters

All other Exporters in Thailand

90. For all other exporters from Thailand dumping margins have been determined on the basis of information available in the questionnaire response filed by the cooperating exporter in Thailand as follows:

All other Exporters in Thailand1

f. USA 91. The Authority notes that none of the producers of the subject goods in the United States of America has responded to the initiation notification or provided any information for determination of Normal Values and Export prices of the subject goods from that country though about 1014 MTs of the subject goods have been imported from this country as per the import data examined. Therefore, in the absence of any other information about the prices of the subject goods sold in the domestic market and exported to India the determination of dumping margins for the producers and exporters from this country have been determined on facts available basis as follows:

Normal Values: USA

92. In the absence of the domestic selling prices of the subject goods in USA, due to non-participation of any producer, Normal Value in that country has been determined in terms of second proviso of Sec 9A(1)(c) of the Act taking into account the cost of production of the said article in the country of origin alongwith reasonable addition for administrative, selling and general costs and for profit on the basis of facts available. For the purpose of this determination, to the extent possible, international costs of raw materials, consumption norms and conversion costs of the domestic industry has been adopted as best facts available and reasonable profit margin of 5% has been added to arrive at the normal values of the respective grades/series of the product exported to India, as per the information available in the imports statistics relied upon. Accordingly, weighted average normal values, at the series level, for all producers/exporters from USA works out as follows:

Normal Values USA1

Export Prices: USA

93. Weighted average export prices of the grades/series of the subject goods imported from USA are proposed to be determined on the basis of the import data relied upon after adjusting the CIF price for ocean freight and insurance, inland freight and other handling expenses, as per facts available, in the absence of cooperation from the exporters from this country, as follows:

Export Prices USA1

Dumping Margins: USA

94. The weighted average Normal values at series level have been compared with the weighted average net export prices to arrive at the dumping margins for all producers/exporters in USA as follows:

Dumping Margins USA1

g. Taiwan

95. The Authority notes that none of the producers of the subject goods in Taiwan has responded to the initiation notification or provided any information for determination of Normal Values and Export price of the subject goods from that country though about 322 MTs of the subject goods have been imported from this country as per the import data examined. Therefore, in the absence of any other information about the prices of the subject goods sold in the domestic market and exported to India the determination of dumping margins for the producers and exporters from this country have been determined on facts available basis as follows:

Normal Values: Taiwan

96. In the absence of the domestic selling prices of the subject goods in Taiwan due to non-participation of any producer, Normal Value in that country has been determined in terms of second proviso of Sec 9A (1)(c) of the Act taking into account the cost of production of the said article in the country of origin alongwith reasonable addition for administrative, selling and general costs and for profit on the basis of facts available. For the purpose of this determination, to the extent possible, international costs of raw materials, consumption norms and conversion costs of the domestic industry has been adopted as best facts available and reasonable profit margin of 5% has been added to arrive at the normal values of the respective grades/series of the product exported to India as per the information available in the imports statistics relied upon. Accordingly, weighted average normal values at the series level for all producers/exporters from Taiwan works out as follows:

Normal Values Taiwan1

Export Prices: Taiwan

97. Weighted average export prices of the grades/series of the subject goods imported from Taiwan have been determined on the basis of the import data relied upon after adjusting the CIF price for ocean freight and insurance, inland freight and other handling expenses as per facts available, in the absence of cooperation from the exporters from this country as follows:

export Prices Taiwan1

Dumping Margins: Taiwan

98. The weighted average Normal values at series level have been compared with the weighted average net export prices to arrive at the dumping margins for all producers/exporters in Taiwan as follows:

Dumping Margins Taiwan1

Dumping Margin Table: All Countries

Dumping Margin Table All Countries1

99. The Authority notes that the margins of dumping of the goods originating in or exported from each of the subject countries, as determined above are significant.

I. Examination of injury to the domestic industry and Causal Links

100. As noted earlier, in a sunset review investigation, with regard to injury examination, the Authority is required to examine:

 Whether the domestic industry continued to suffer material injury and if so, whether injury to the domestic industry is likely to continue in the event of revocation of anti dumping duties;

 In cases where the domestic industry has not suffered continued injury, whether injury to the domestic industry is likely to recur in the event of revocation of anti dumping duties.

101. The domestic industry has inter alia submitted that there is continued dumping of the product under consideration from the subject countries though the volume of dumped imports has declined as a result of current anti-dumping duties and dumping is likely to intensify should the current anti-dumping duties are revoked.

102. Therefore, the Authority has first examined whether the domestic industry continues to suffer material injury on account of dumped imports from the subject countries before proceeding to examine the likelihood of continuation or recurrence of injury to the domestic industry in the event of revocation of the duties from the subject countries. Examination of material injury to the domestic industry is in accordance with the Article 3 of the AD Agreement and Annexure II to the AD Rules, 1995.

103. Rule 11 of Antidumping Rules read with Annexure –II provides that an injury determination shall involve examination of factors that may indicate injury to the domestic industry, “…. Taking into account all relevant facts, including the volume of dumped imports, their effect on prices in the domestic market for like articles and the consequent effect of such imports on domestic producers of such articles….”. In considering the effect of the dumped imports on prices, it is considered necessary to examine whether there has been a significant price undercutting by the dumped imports as compared with the prices of the like article in India, or whether the effect of such imports is otherwise to depress prices to a significant degree or prevent price increases, which otherwise would have occurred, to a significant degree.

104. It is noted that the application for continuation of antidumping duty has been filed by M/s Jindal Stainless Limited, who command a major proportion of total production of the subject goods in India. In terms of Rule 2(b) of the Rules, the petitioners have been treated as the domestic industry for the purpose of this investigation. Therefore, for the purpose of this determination the cost and injury information of the petitioner, constituting the domestic industry as defined in Rule 2(b), has been examined.

I.1 Views of the responding Exporters and Importers on the injury claims of domestic industry

105. The exporters, importers and other interested parties, in their various submissions with regard to the injury and causal link, have argued as follows:

i. That as per the judgment of the Hon’ble Supreme Court of India in Rishiroop Polymers matter, the Designated Authority should examine the conditions which existed at the time of imposition of anti-dumping duty and compare such conditions with the present scenario to see whether the conditions have altered to such an extent that continuation of duty is no longer required.

ii. That at the time of the original investigation, the share of imports from all subject countries in demand was 34% and the share of domestic industry in demand was 42%. However, in the present POI, share of imports from subject countries have drastically fallen to 5.39% in demand, while the share of domestic industry has dramatically increased to 82%. In light of such low imports from the subject countries and the fact that the domestic industry is in a dominant position in the domestic market, the present review against the subject countries should be terminated

iii. That there is no injury on account of the subject imports as the volume of imports from the subject countries is very low in absolute term as well with respect to the demand in India.

iv. That during these 5 years the domestic industry had been providing subject goods at an exorbitant rate and thereby increasing their profits, without making any effort to improve the situation by offering the product at a competitive rate. Now the domestic industry wants to continue the levy so that it can continue to make profits at the cost of Indian consumers and Indian economy.

v. That the presumptions of the petitioner that the domestic price of the subject goods went down because of presence of dumped imports is incorrect considering the fact that pricing of CR Steel, especially 300 series depends largely on raw material prices.

vi. That the argument of the Applicant Domestic Producers that it is fixing its price based on import prices is an absolute falsity. As can be perused from the petition filed by the Applicant Domestic Producers, accounts for significant market share and imports from subject countries holds a market share of mere 3.85%. Compared to the miniscule share of imports from the subject countries, the domestic producers commands around 85% of the market share. The claim of domestic industry is mere rhetoric and needs to be rejected by the Authority.

vii. That due to the high cost of the local subject goods, the processing industry is facing the threat of extinction as customers are showing less interest to buy their goods. If this trend continues, the downstream industry will vanish from the scene and thousands of families will be out in the street due to unemployment.

viii. That the injury parameters do not show any injury to the domestic industry as domestic industry’s production and sales consistently improved during the injury analysis period. Moreover, from the very limited non-confidential information provided in the application, it can be clearly inferred that there is even no causal link between the imports from subject countries and performance of the domestic industry.

ix. That excess capacity, high interest cost and depreciation cost are causing injury to the domestic industry.

x. That the price undercutting and price underselling analysis provided in the petition pertain to POI and not for post POI period. Unless information with respect to post POI is examined, it cannot be said that there is a likelihood of injury to the domestic industry.

xi. That the profit & loss account of Petitioner Company for the last few years shows that during 2012-13 the domestic industry incurred a significant amount towards power and fuel expense, which was one of the critical reasons for losses to the Petitioner.

xii. That the likelihood determination under Article 11.3 entails an analysis of future events based on positive evidence available and as a result, the mere computation of a dumping margin will not discharge the burden required under Article 11.3. It is further contented that in the petition filed by the domestic industry, there is no post-POI data given.

xiii. That the interested parties requested the authority to direct the domestic industry to submit the Post-POI data in order to conduct likelihood determination by the authority and also provide the interested parties a copy of the same for their comments thereon.

xiv. That the evidences provided by the domestic industry in relation to freely disposable capacities in the subject countries are not fully substantiated.

xv. That the domestic industry has provided no evidence to establish the likelihood of recurrence of dumping. Moreover, there is no merit in the argument of domestic industry provided in relation to likelihood of recurrence of dumping.

xvi. That the domestic industry has determined non-injurious price and resultant price underselling based on some confidential consideration, without even disclosing the components included. It is very much likely that Petitioner has not determined non-injurious price based on principles enunciated under Annexure III of the AD Rules. The Authority should determine the non-injurious price keeping in view information brought forward by the interested parties and by applying the principles provided under Annexure III of the anti-dumping rules.

xvii. That DG Safeguards, in March 2015, in its investigation against import of Cold-Rolled Steel Products of 400 series, concluded that the domestic industry suffers injury due to intrinsic reasons such as high finance charges and depreciation charges leading to operational losses and not imports.

I.2 Submissions by the Domestic Industry

106. The domestic industry has made the following submissions with regard to the injury and causal link:

i. That the Authority may kindly appreciate the fundamental differences between the original and sunset review investigations. In original investigations, the Authority needs to establish whether dumping exists during the period of investigation and the relationship between dumped imports and injury caused to the domestic industry. On the other hand, dumping, current injury and their causal relationship are not relevant in a sunset review. This view and interpretation of the law has been adopted by the Appellate Body in relation to the nature and scope of the sunset review in several matters.

ii. That in a sunset review where only the likelihood of continuance or recurrence of dumping and injury are required to be determined, the importance of current imports into India recedes into background while reaching the conclusion on likelihood.

iii. That the arguments of the interested parties that the imports are de minimus is irrelevant as the principle of de minimus imports is not applicable in case of sunset review investigations. In this context, the domestic industry further submitted that the exporters from the subject countries have been circumventing the duties by bringing widths above 1250mm in India which were excluded from the purview of duties in the original investigations. It is due to this fact that the imports of the widths below 1250mm appear to be lower as the widths are interchangeably used.

iv. That grade-wise/series-wise analysis should be carried for all the subject countries for fair and proper comparison. The domestic industry also agrees with the proposition of the exporters insofar as it relates to price analysis including price undercutting, price underselling, etc. It is further submitted that Domestic Industry has already provided all the relevant data and analysis to the Authority in the manner prescribed by the Authority.

v. That the domestic industry has provided all the information as per the requirements of the law. Moreover, it is only after getting satisfied with all the evidence that the Authority has initiated the sunset review investigation. The domestic industry reiterates that the petition fulfills all the requirements of law in terms of Section 9A (5) of the Act read with Rule 23 of the Rules.

vi. That the exporters from the subject countries have not denied the allegation made by the domestic industry that the exporters continue to dump the subject goods. It is a settled principle that continued dumping is a very good indicator of the fact that there is every likelihood of continued dumping in the event duties are not extended.

vii. That the import data clearly establishes that the landed values from subject countries are seriously undercutting the prices of domestic industry. Further, due to presence of dumped and injurious imports, domestic industry’s prices of subject goods are significantly suppressed.

viii. That the exporters from the subject countries have not provided any volume related information and therefore, domestic industry is handicapped to make any submissions or to assist the Authority in relation to their claims and submissions.

ix. That the domestic industry has followed the guidelines issued and followed by the Authority while constructing and providing the non-injurious price in the application for the purpose of the initiation of the sunset review investigation. It may also be important to note that the Authority has examined the information supplied by the Domestic Industry thoroughly even at the time of initiation. Therefore, the arguments of the interested parties that the domestic industry has not followed principles followed laid down in Annexure III are wrong and contrary to the facts on record.

x. That the price underselling is significantly positive, and therefore, there is clear likelihood of increase in the imports of the subject goods in India at such injurious prices from the subject countries in the event Authority reaches a conclusion to withdraw the anti-dumping duty.

xi. That the injury margin and dumping margin are significantly positive which is also a clear indicator that the likelihood of continuation of dumped and injurious imports of the subject goods is imminent in the event the Authority reaches a conclusion to withdraw the Anti-dumping duty.

xii. That there is no change in the pattern of consumption with regard to the product under consideration.

xiii. That there is no trade restrictive practice which could have contributed to the injury to the domestic industry. xiv. That technology for production of the product has not undergone any change nor are there any likely changes in coming future. Developments in technology are therefore, not a factor of injury.

I.3 Examination by the Authority

107. The various submissions of the interested parties and the domestic industry on injury to the domestic industry have been taken note of and have been examined as per the information available on record in the relevant parts in this examination. All relevant issues concerning the facts and figures are addressed ipso facto in the injury analysis.

108. With regard to the scope of the sunset review, as argued by the interested parties, the Authority notes that the scope of original investigation, mid-term review and sunset review are materially different and have been well defined and settled by the various appellate forums. The Authority has been consistently following those settled principles and the same principles have been applied in this investigation also. While current level of imports, dumping margins and injury margins are also examined in a sunset review the focus is on the likelihood scenario to see what is likely to happen if the duties are removed. Therefore, while the current dumping and injury are guiding factors, they are not deterministic. Accordingly, the arguments of the interested parties that the volumes of imports are low or de minimis and therefore, investigation should be terminated are not tenable. The principles of de minimus limits are not applicable in case of sunset review investigations

109. With regard to the submissions made by interested parties that the Domestic Industry is exploiting the anti-dumping provisions to establish their monopoly in India, it is noted that the purpose of the anti-dumping law is to create a level playing field for production and consumption of the goods in the Indian market by protecting domestic production of the goods against unfair trade practices of producers from other countries. It is also noted that existence and sustainability of a domestic production base is important for general economic development which has to be protected against injurious dumping. In any case, imposition of anti-dumping duties does not create a situation of monopoly as the imports from other suppliers including those from the subject countries are not prevented from competing in the Indian market. However, the Authority has examined the cost and price behavior of the domestic producers in this finding in an objective manner to arrive at the conclusion on injury and causal link to address the concerns of the consumer industry.

110. As regards the data of the various parties the Authority notes that data and information as verified during the course of investigation, to the extent considered necessary and feasible, have been used in this investigation.

111. As regards the arguments of the interested parties that Post POI data should be considered for examination of the likelihood analysis, the Authority notes that Antidumping duties were in force for a substantial part of the post POI period and therefore, the data for this period may not provide a clear indication of the trends, Nevertheless the post POI data on various parameters have been adequately examined in the relevant sections of the likelihood analysis to the extent such data was available and considered necessary.

112. As regards the arguments of the interested parties that the injury suffered by the domestic industry due to high depreciation cost and fuel etc. the argument has been noted and appropriately addressed while computing the Noninjurious price of the domestic industry. Therefore, injury, if any, caused due to these factors have not been attributed to the dumped imports.

113. As regards the findings of DG Safeguards, with respect to its investigation against import of Cold-Rolled Steel Products of 400 series, is concerned, the Authority notes that the proceedings before that Authority is of a different nature and for a part of the product covered under this investigation. The current investigation is a sunset review of antidumping duty in force and the scope of this investigation is entirely different. The Authority, however, has noted the issues raised and has appropriately examined them in the factual matrix of the present case.

114. As regards the post POI data the Authority notes that post POI data has been adequately examined to analyse the likelihood of dumping and injury in the appropriate section in this disclosure. 115. All other issues raised by the parties to this investigation have been addressed in the appropriate places and therefore, not repeated here.

J. Examination of current Injury and Causal Link

116. 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.

117. For the examination of the impact of the dumped imports on the domestic industry in India, 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 or investments have been considered in accordance with Annexure II of the Rules. All economic parameters affecting the Domestic Industry as indicated above have been examined in the following paragraphs.

118. The Authority notes that this review investigation has been initiated to examine the alleged likelihood of continuation or recurrence of dumping of the subject goods from the Peoples Republic of China, Republic of Korea, the European Union, South Africa, Chinese Taipei, Thailand and the United States of America, and consequent injury to the domestic industry. In view of the fact that the goods are continuing to enter the Indian market from the subject countries at dumped prices and the conditions of inter se competition between the dumped imported articles and the like domestic articles exists cumulative assessment of the effects of imports is appropriate to examine the injury and causal links. Therefore, the Authority proceeds to examine the impacts of dumped imports accordingly.

(a) Volume Effects of Dumped imports

119. With regard to the volume of the dumped imports, the Authority is required to consider whether there has been a significant increase in dumped imports, either in absolute terms or relative to production or consumption in India.

(i) Import volumes & share in imports

120. The Authority has examined the volume of imports of the subject goods from the subject countries/territories and other countries based on the transactionwise import data provided by DGCI&S. Transaction-wise import data considered by the Authority has also been placed in the public file in view of the judgment of the Hon’ble Delhi High Court in SanDisk matter. The Authority notes that Cold Rolled Flat Products of Stainless steel, falling under Customs heading 7219, are being imported in various sizes of width whereas the product under consideration in this investigation covers width range 600 to 1250mm only. Therefore, the import data has been pruned on a reasonable basis for estimation of volume of imports for the product under consideration. Accordingly, volume of imports of the subject goods during the injury investigation period, as per the above analysis, are as follows:

Import volumes & share in imports1

121. The above data indicates that total imports from the subject countries have declined by about 21% in POI compared to the base year though imports from China PR has significantly increased by over four times. Major decline in imports is from Korea RP. However, the domestic industry has argued that the exporters in these countries have resorted to exports of higher widths or exported the PUC in slit conditions, as there is width restriction in the product under consideration. Therefore, while the import volume of product under consideration is low actual import of Cold Rolled Flat products would be much higher.

122. The Authority notes that the product under consideration in the original investigation was defined with width restrictions. Therefore, this review investigation has been restricted to these widths only. However, it is possible that significant exports are taking place beyond the widths specified and in certain instances it has been noted that the goods have actually been slit to lower widths and exported as per customer requirement. In fact the import data indicates that the volume of imports of the product outside the width ranges specified is significant as may be seen from the table below:

volume of imports of the product1

123. The above data indicates that though the imports of the Cold Rolled flat products, as a whole, from the subject countries, have increased significantly during the injury investigation period the import of product under consideration has declined while products outside scope of this investigation has increased by about 300% over the base year. In fact the transaction-wise data indicates that in certain product types/grades/ series the imports have completely shifted from the widths covered under the product under consideration to the widths outside the range giving credence to the arguments of the domestic industry.

124. In view of the above position the Authority notes that the arguments of the interested parties that the volume of imports of the subject goods are low and therefore, does not affect the domestic industry do not appear to be correct.

(ii) Demand & Market Share

125. Demand or apparent consumption of the product under consideration in the country has been estimated as the sum of domestic sales of the Indian producers and imports from all sources. The trend in demand and share of domestic industry and dumped imports in the total demand are as follows:

Demand & Market Share1

126. The above data indicates that there is a healthy growth in demand for the subject goods in the country and the demand has increased by about 60% during the injury investigation period. The market share of the domestic industry during the same period increased by about 5% in absolute term and share of the subject countries declined by about 6%. However, as noted above the imports of the subject goods from the subject countries/territories have declined whereas the goods outside the scope of the product under consideration have considerably increased. Since there is a significant shift in imports from the product with widths as defined in the PUC to products of higher width or lower widths the above demand and market share analysis based on the subject goods alone do not present the true volume impact of dumped imports on the domestic industry in terms of market share and the decline in market share of the dumped imports as argued by the interested parties does not appear to be correct.

(b) Price effect to dumped imports and impact on domestic industry

127. With regard to the effect of the dumped imports on prices, the Designated Authority is required to consider whether there has been a 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 prices to a significant degree or prevent price increases, which otherwise would have occurred, to a significant degree. Therefore, the impact on the prices of the domestic industry on account of imports of the subject goods from the subject countries have been examined with reference to price undercutting, price underselling, price suppression and price depression.

128. For the purpose of this analysis the weighted average cost of production, net sales realization (NSR) and the non-injurious price (NIP) of the domestic industry have been compared with the weighted average landed values of imports from the subject countries. In determining the net sales realization of the domestic industry, taxes, rebates, discounts and commission incurred by the domestic industry have been adjusted. The landed values of the imports have been determined taking into account corresponding grade-wise and series-wise import data from the subject countries.

i. Price Undercutting effects

129. For the price undercutting analysis the weighted average domestic selling prices of the subject goods have been compared with the weighted average landed values of the subject goods imported from the subject countries as stated above. The price undercutting of imports from all subject countries at cumulated level works out as follows:

Price Undercutting effects1

130. The above data indicates that the imports from the subject countries without application of antidumping duty are undercutting the prices of the Domestic Industry in the Indian market and the level of price undercutting has significantly increased over the injury investigation period though the quantities of imports decreased during the same period notwithstanding the overall increase in imports if the imports outside the defined width ranges are considered.

131. Though the injury is required to be analysed cumulatively, price undercutting of the imports from each of the subject countries/territories have also been examined to see the trends. At the individual country level the price undercutting margins work out as under when the weighted average landed values of imports from the individual countries are compared with the weighted average net sales realization of the domestic industry for the corresponding grades/series of the subject goods.

weighted average net sales realization1

132. The above data indicates that the landed values of imports from the subject countries/territories, without application of antidumping duty, continue to significantly undercut the domestic industry’s prices in the Indian market during the injury investigation period except the imports from USA for the POI. Even with application of antidumping duties imports from some of the countries are having positive undercutting margins.

ii. Price underselling Effects

133. The impacts of dumped imports on the domestic industry’s prices have also been examined with reference to the price underselling effects of the dumped imports. For the purpose of this analysis the weighted average landed values of imports of the subject goods based on grade-wise and series wise analysis of the import data as stated above has been compared with the weighted average of the non-injurious prices of the corresponding grades determined by the Authority as per the principles outlined in Annexure III to the Antidumping Rules by appropriately considering the cost of production for the product under consideration during the POI. The price underselling effects are as follows:

Price underselling Effects1

134. The above data indicates that the weighted average landed price of imports from the subject countries during the POI is significantly below the weighted average non-injurious prices of the domestic industry for the corresponding grades of the subject goods, resulting in significant price underselling. The price underselling is significantly positive during the POI. Even with application of the corresponding antidumping duties the overall underselling margin are significantly high.

135. As stated above underselling margins of the individual countries have also been examined to see the trends by comparing the weighted average landed values from each country with the weighted average NIP of the corresponding grades as follows:

weighted average NIP of the corresponding1

136. The above data indicates that the landed value of imports from each of the countries being investigated have remained significantly below the non-injurious price of the domestic industry during the POI. Even with antidumping duties the landed values are significantly below the NIP except for the imports from USA.

Iii, Price Suppression / Depression effects

137. To examine the price suppression or depression effects of the dumped imports on the domestic prices, the trend of net sales realization of the domestic industry has been compared with the cost of sales of the corresponding grades/ series of the subject goods manufactured and sold by the domestic industry as follows:

Price Suppression or Depression effect1

138. The above data indicates that the cost of sales of the domestic industry has increased by about 23% for 200 series, 17% for 300 series and 39% for 400 series over the injury investigation period but the selling prices have remained depressed and have not increased commensurate with the increase in its cost of sales during this period.

(c) Examination of Other Economic Parameters of the Domestic Industry

139. Annexure II to the Anti- dumping Rules requires that a determination of injury shall involve an objective examination of the consequent impact of these imports on domestic producers of like product. The 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. Various injury parameters relating to the domestic industry have been examined as follows:

i. Actual and Potential Impact on Capacity, Production, Capacity Utilization and Sales

140. The petitioner domestic industry originally had only one unit for at Hissar for production of cold rolled flat products. The second unit for production of cold rolled flat products in Odisha was added in 2011 which went into production w.e.f. January 2012. The capacities of the new unit have been gradually ramped up in the subsequent period. The plants do not have dedicated capacities for the product under consideration as the plants roll products up to 1690 mm while the product under consideration covers only upto1250mm. Therefore, the capacities for the product under consideration have been derived based on the ratio of PUC and Non-PUC rolled in these plants during the injury investigation period. Accordingly, the capacities, production and sales of the domestic industry has been shown below:

Actual and Potential Impact on Capacity1

141. The above data indicates that the capacities have increased by about 137% and the production has increased by about 84% in the POI compared to the base year. Therefore, there is a decline in capacity utilization compared to the base year. But capacity utilization has improved compared to the previous year.

142. The domestic sales of the domestic industry have increased by about 74% in the POI as compared to base year as there is increase in production as well as demand during the POI vis-à-vis base year. However, this increase in volume of sales has contributed to only 5% increase in market share of domestic industry while the demand increased by around 60%. Therefore, it appears that despite huge growth in demand and production capacity, domestic industry has been able to capture only 5% more share during injury investigation period.

143. However, as noted earlier the demand of the product is under-represented as substantial volume of imports have been shifted to the products of widths outside the scope of product under consideration. Therefore, capacity addition of the domestic industry appears to be in tandem with the increase in demand for the flat rolled products as a whole in the country.

ii. Actual and Potential Impact on Profitability, Profits, return on investment and cash flow

144. The financial performance of the domestic industry during the injury investigation period in terms of its return on investment and profit/loss before and after interest and cash profit are as shown in the table below:

Actual and Potential Impact on Profitability, Profits, return on investment

145. The above data indicates that while the weighted average cost of sales per unit has increased by about 15% in the POI compared to the base year the price realization per unit has dropped by about 3% during the same period resulting in net loss from a profitable situation in the base year. The profit before interest has also declined significantly in the POI as compared to the base year and has reached substantial negative levels in the POI. Cash profit and return on capital employed have also become negative in this period.

146. The interested parties have argued that the increase in cost of production and the consequent losses to the domestic injury is on account of the addition of capacity of the Odisha unit which was under ramp up operation during the injury investigation period. The Authority notes that the cost of production has been duly normated to account for the additional cost if any due to ramp up operation and under utilization of the Odisha plant for the purpose of determination of Non-injurious price. Even after normating the costs on account of these factors the cost of sales of the product under consideration remains significantly above the selling price during the period of investigation indicating the impact of the dumped imports.

iii. Actual and potential impact on Market Share

147. As indicated in the previous tables the market share of the domestic industry in demand of the product in India shows an increase of about 5% in absolute term over the base year while the demand has grown by about 60% during the same period indicating thereby the inability of the industry to significantly benefit from increase in demand though the capacities have been added and the antidumping duty protection is available.

iv. Actual and potential impact on Inventories

148. The data given in the table below shows that the inventory levels with the domestic industry have increased significantly by about 46% in the POI compared to the base year despite increasing demand.

Actual and potential impact on Inventories1

v. Actual and potential impact on Employment, Productivity and Wages

149. The performance of the domestic industry in terms of employment and wages and productivity as indicators of injury has been analysed as follows:

Actual and potential impact on Employment Productivity and Wages

150. The data indicates that the employment level of the domestic industry has doubled over the injury investigation period which is commensurate with the capacity added during this period. But the production has not kept pace with the capacity added leading to decline in per employee productivity. However, per day productivity has increased significantly. The increase in wages per employee is apparently due to normal increases in the wage levels.

vi. Actual and potential impact on Growth

151. Examination of various physical and financial parameters of the domestic industry indicates that there was negative growth of the domestic industry in terms of capacity utilization profits, cash profit as well as ROI in the POI as compared to the base year despite significant increase in demand and increase in production and sales. Growth in critical parameters are as follows:

Actual and potential impact on Growth1

152. The domestic industry has contended that with increase in capacity, the domestic industry had expected robust growth in profits, comfortable cash flow and increase in return on investments. However, the domestic industry was not able to achieve the same due to the presence of the continuous dumped imports, diversion of significant volume of imports to higher widths and price pressure from the subject countries.

vii. Ability to raise capital investments

153. The Authority notes that under antidumping duty protection against dumped imports from several countries and with a healthy growth in demand due to general macroeconomic conditions in the country leading to increase in consumption of the subject goods the domestic industry has added significant capacities during the injury investigation period at substantial capital investment. The domestic industry has submitted that all these investments would be financially jeopardized if the dumped and injurious imports from the subject countries are allowed to enter into the country without the anti-dumping duties. It will significantly affect the ability of the domestic industry to make further capital investment as the current return on capital invested is negative.

viii. Factors affecting domestic prices

154. The above analysis indicates that there is a healthy growth in demand. The dumped imports from the subject countries, though low in volume, are still entering the Indian market at prices much below the cost of production and selling prices of the domestic industry causing significant price undercutting and underselling in the Indian market. It is also noted that the imports from the subject countries of widths above 1250MM has increased while imports of the goods subjected to antidumping duty have declined. The domestic prices are thus affected by the combined effects of continued dumped imports from the subject countries as well as increased imports of goods not covered under the scope of the product under consideration.

ix. Level of dumping & dumping margins

155. The Authority notes that the dumping margins of the imports of the subject goods from the subject countries are positive and substantial though the volumes of imports from the subject countries were low due to the antidumping duty in force during this period.

K. Overall Assessment of current Injury and Causal Link

156. The above analysis of various factors indicate that physical performance of the domestic industry in terms of capacity, production and domestic sales of the subject goods improved during the injury investigation period with a healthy growth in demand. However, the financial performance of the domestic industry, in its domestic operations, has deteriorated during this period apparently because of the price pressure of dumped imports from the subject countries. Thus the domestic industry continues to suffer material injury in terms of financial losses and negative return on capital employed.

157. The interested parties have argued that this injury to the domestic industry is on account of other factors and has nothing to do with the imports from the subject countries as the volume of imports from these countries is very low. The Authority has examined other issues raised by the interested parties through the following non-attribution factors:

(i) Volume and prices of imports from other sources

158. The Authority notes that the subject goods are being imported from number countries, apart from the countries under investigation. The data below shows the volume of imports and their price trends:

Volume and prices of imports from other sources1

159. The above data clearly establishes that the prices of the imports from other countries are higher than that of Subject Countries. Therefore, import from other countries is not a factor affecting the performance of the domestic industry.

160. As noted earlier the imports from the subject countries have clearly shifted from the goods covered under the PUC to products with width beyond the scope of the product under consideration and the volume of such imports have significantly increased.

(ii) Contraction in demand and / or change in pattern of consumption

161. It is noted that the demand of the subject goods in the country has grown consistently from base year indicating a healthy demand situation in the country. None of the interested parties has made any submission about the change in the pattern consumption of the subject goods causing injury to the domestic industry. In fact, with the growth in general economic performance the consumption of the subject goods is expected to increase which is reflected in the healthy demand position. Therefore, contraction in demand or change in consumption pattern is not a factor affecting the performance of the domestic industry.

(iii) Trade restrictive practices of and competition between the foreign and domestic producers

162. The Authority notes that the petitioner domestic industry is the major producer of the subject goods in India. The goods are freely importable and the goods are being imported from several countries including the subject countries. No evidence of trade restrictive or anti-competitive practices has been produced by any interested party during the course of the investigation.

(iv) Development in Technology

163. The Authority notes that the investigation has not shown that there was any significant change in technology which could have caused injury to the domestic industry.

(v) Export performance of the domestic industry

164. The export performance of the domestic industry during the injury investigation period was as follows:

Export performance of the domestic industry1

165. The above data shows that the domestic industry has a very healthy export performance and the exports have grown significantly. However, export performance is not relevant here since the Authority has considered only the domestic performance of the Domestic Industry for injury analysis and injury if any due to the export performance of the domestic industry has not been attributed to the dumped imports.

166. In their post disclosure submissions the interested parties have argued that as per the data of domestic industry it can be observed that while imports are continuously decreasing, the losses suffered by domestic industry are increasing. Therefore, clearly there is no correlation between the trend of injury parameters of the Indian domestic producers and the volume and price of imports of the subject product. This demonstrates that there is no causal link between alleged dumped imports and alleged injury to the Indian domestic producers. In this regard, the Authority notes that though the volume of imports of the subject goods has decreased after imposition of antidumping duty the imports of the said products with higher widths have significantly increased clearly establishing the shifting of imports to outside the scope of duty thereby nullifying the impact of duty. Therefore, it cannot be said that there is no correlation between the imports and the losses suffered by the domestic industry.

L. Conclusion on current Injury and Causal Link

167. Examination of various injury parameters and the non-attribution parameters as outlined in the previous section indicates that there is a healthy increase in demand for the subject goods in India. The domestic industry has added capacity which is in line with the growing demand, and the production and sales of the domestic industry has also increased the petitioner domestic industry continues to suffer from low capacity utilization. The dumped imports from the subject countries continue to have significant price undercutting and underselling effect on the prices of the domestic industry and the prices of the domestic industry continue to be suppressed resulting in financial losses. The domestic industry is unable to realize remunerative prices to cover cost of production and sales due to the presence of dumped imports as well as diversion of large volume of imports to ranges outside the scope of the product under consideration as defined in the original investigation. Non-attribution analysis as above does not show any other factor that could have significantly contributed to the injury suffered by the domestic industry. Therefore, the Authority concludes that the domestic industry continues to suffer material injury due to continued dumped imports from the subject countries/ territories.

M. Examination of Likelihood of Continuation or Recurrence of Dumping and Injury

168. It is noted that the subject goods continue to enter the Indian market from the subject countries at substantially dumped prices though volume of imports have significantly declined after imposition of duties. Examination of the injury in the previous section also indicates that the domestic industry continues to suffer injury on account of imports at very low prices from subject countries against which anti-dumping duties are in force. The Rules require the Authority to examine if the dumping is likely to continue or recur and whether the injury to the domestic industry is likely to continue or recur if the duties are revoked.

M.1 Views of the Domestic Industry

169. The domestic industry, in its submissions, has argued that there is continued dumping of the products under consideration from the subject countries and though the volume of dumped imports has declined, the dumping margin is positive. It has been submitted that dumping of the product under consideration is likely to intensify from the subject countries should the current anti dumping duty be revoked. It has been inter alia submitted:

a. That the domestic industry is already suffering injury and revocation of anti-dumping duty shall lead to intensified injury to the domestic industry. Cessation of anti-dumping duty is likely to have significant suppressing and depressing effect on the prices of the product under consideration in the market.

b. That the producers in subject countries maintain huge capacities and spare capacities available shall be used to intensify dumping if the duties are revoked. In this regard, the domestic industry has submitted certain information from the published data from Stainless Steel Flat Products Market Outlook to substantiate the claim of surplus capacities of the subject goods in subject countries. it has been submitted that the capacities in these countries and their comparison with the domestic capacities, production, sales and demand in India give an insight into the potential danger of the dumped imports from the subject countries and the imminent likelihood of dumped imports into the country in large volumes. The estimated data on the capacities and production of the subject goods in the subject countries as provided by the domestic industry, is as follows:

Views of the Domestic Industry1

c. That the Indian demand is merely 1% of the consolidated capacity of subject goods from subject countries and in the event duties are not extended, there is every chance that they will continue to dump their production in Indian market.

d. That capacity in China increased by 93% in the POI to 11473 KMT as compared to 7114 KMT in the year 2009 when preliminary duties were imposed. In the post POI period i.e., by 2015, Chinese producers have added around 25% more capacity as compared to 2013. It is also submitted that during the same period their exports grew by 266% and that too when their average operating level was in the vicinity of 78% to 82%. In the event duties are not extended China can alone cater to our domestic market. It is further submitted that even if the subject goods produced from its idle capacity is diverted to India at current prices there is every likelihood that domestic industry will continue to suffer injury. In support of their claim the domestic industry has submitted the following information regarding the capacities and other details of the subject goods in China as follows:

subject goods in China1

e. That export orientation of the producers in Korea is significant and the exports from that country have increased by 63% from 2009 to 2013. During the said period the producers in Korea increased their capacity by 10%, however, they are only operating in the average range of 50% to 55%. It has been argued that with almost 40% of the idle capacity, exporters from Korea will definitely increase their volumes at the injurious and dumped prices if the duties are not extended against them. It has been further argued that the imports from Korea, in particular 400 series, is coming in the higher widths, which is outside the purview of the antidumping duty, at significantly dumped and injurious prices, which is a good indicator of their likely prices.

f. That the European Union is among those established and saturated markets where capacities and their utilization remain constant for their domestic consumption. Exports from EU grew by 52% and 74% when compared from 2009 to 2013 and 2015 respectively. This export orientation coupled with the fact that they have around 35% idle capacity, which translates into 1561KMT of production, is around 482% of Indian demand. If only part of this surplus capacity is diverted towards India at the current prices, it can adversely impact the financial performance of the domestic industry. It has been further argued that the exporters from EU are also suffering from dumped and injurious imports from China and Taiwan and looking for options in export market to dump goods so that at least they can cover fixed cost. In this situation, it is extremely important to extend the duties against EU to safeguard domestic industry, from continued dumped and injurious imports.

g. That the consumption of subject goods in South Africa is merely 29% of their capacity, which means around 71% of their capacity, is available for exports. In this context, it is also important to note that this 71% of the capacity translates into 387MT (in KT) which is more than the local demand in India. If this quantity is diverted towards India at current prices, it is imminent that the domestic industry will continue to suffer injury.

h. That Thailand is passing through very difficult times and their local consumption of subject goods is on a declining trend. Therefore, it is very likely that they will dump their production in Indian market which is growing at decent pace.

i. That since none of the producers/ exporters has participated from the Taiwan and USA the Authority has to determine the likelihood based on the information available in the public domain. The combined capacity of Taiwan and USA is almost 1372% of the Indian demand. It is also submitted that all the allegations made by the domestic industry in relation to Taiwan and USA remained unchallenged as even the concerned governments have not provided any information about likelihood or rebutted to the information provided by the domestic industry. In view of the above, the duties against Taiwan and USA should also be extended.

j. That a price sensitive market like India becomes more vulnerable to dumped and injurious imports in such economic scenarios in the global market. In such circumstances, withdrawal of anti-dumping duty in force will certainly lead to continuance or recurrence of dumping and injury to the Domestic Industry. Therefore, there is every likelihood of huge potential imports if the duties are lifted.

k. That from the above, it is clear that in case the of revocation of antidumping duties, the volume of imports of the subject goods is bound to increase further, which is also evident from the fact of continued dumped imports in spite of imposition of duty from the subject countries.

l. That decline in imports, post imposition of duty, and positive dumping margin in such imports implies likelihood of dumping in the event of withdrawal of duty and in itself justifies extension of anti-dumping duty.

m. That the volume of subject goods has shifted to widths above 1250MM and that too at prices lower than that of subject goods. The ratio of subject goods of widths 600MM to 1250MM and above 1250MM mix has changed from (71:29) to (15:85) respectively subsequent to the imposition of the anti-dumping duty. It is further submitted by the domestic industry that the 87% of the import of the grade EN 1.4512 in 2010-11 was in the widths of 600mm to 1250mm, when the said grade was not part of product under consideration liable for duties. However, after the issuance of the corrigendum dated 7.02.2012, wherein this grade EN 1.4512 was brought within the purview of dumping duties, the imports of this grade shifted to widths width 1250mm accounting for share as high as 99%. This fact clearly indicates that if duties are revoked, exporters will again bring the goods in the range of 1250MM only. Therefore, the duties should be extended.

n. That European Union has issued preliminary findings against China and Chinese Taipei, vide Commission Implementing Regulation (EU) 2015/501 of 24 March 2015 and imposed anti-dumping duty of 24.3% to 25.2% from China and 10.9% to 12% from Chinese Taipei. In such case, withdrawal of the anti-dumping in force will provide a free market access to the manufacturers/exporters in these countries to dump the subject goods and accordingly, there is very strong likelihood of continuation or recurrence of dumping and injury.

o. That there are positive and significant injury & dumping margins even when calculated based on the prices from the subject countries to countries other than India.

p. That there is every likelihood of continuation or recurrence of dumping and injury once the duties are withdrawn, as withdrawal of the anti-dumping duties will provide a free access to the manufacturers/exporters of the subject goods from the subject countries to dump the subject goods in India.

M.2 Views of the producers/exporters/importers/other interested parties

170. The interested parties, in their submissions, have argued:

a. That the domestic industry has not provided any evidence to prove that there is any likelihood or continuation of dumping and injury.

b. That the domestic industry has not provided post POI information in the petition, therefore, interested parties cannot comment on the post POI performance of the domestic industry.

c. Interested parties have disputed the claims of the domestic industry that there exist huge capacities in subject countries which would lead to a likelihood of recurrence of dumping from these countries and injury because of imports from subject countries. It has been argued that mere existence of huge capacity is not a ground for extension of antidumping duty as has been held by the Appellate Body. The petitioners should provide concrete evidence for the existence of huge capacities and mere conjecture must not be accepted by the DGAD.

M.3 Examination by the Authority

171. The Authority has noted the arguments of the domestic industry and other interested parties with regard to the likelihood of continuation or recurrence of dumping and injury. The present investigation is a sunset review of antidumping duties imposed on the imports of subject goods from subject countries. Under the Rules, the Authority is required to determine whether revocation of the anti-dumping duty would lead to continuation or recurrence of dumping and injury. It is noted that the volume of subject goods from subject countries declined in the POI, due to the presence of anti-dumping duties. However, it is observed from the import data that imports of subject goods of widths above 1250MM increased during the injury investigation period. Therefore, there is merit in the claims of domestic industry that imports of subject goods gets shifted to higher widths thereby artificially reducing the volume of imports of the goods covered under the scope of the product under consideration on which duties are in force. After examining the claims of all the interested parties the Authority has examined the issues to see whether there is a likelihood of continuation and recurrence of dumping and injury from subject countries during the injury investigation period. In this connection the following issues have been examined.

(i) Level of current and past dumping margins from the subject countries

172. The examination in the previous sections indicates that the levels of current dumping margins from subject countries/territories are significant in spite of the fact that duties are in force. The dumping margins in the original investigation were also significant. The Authority also notes that European Union has imposed antidumping duties on the same product from China and Taiwan and the dumping margins determined by that Authority is also significant. Therefore, the product seems to have a history of dumping.

(ii) Available capacities in the subject countries and global demand supply scenario

173. As per the latest report of Stainless Steel Flat Products Market Outlook, May 2015, The available as well as projected capacities and demand in the subject countries, and derived surplus capacities in these countries are as follows:

Available capacities in the subject countries and global demand supply

174. The data indicates that the producers in the subject countries/territories have huge surplus capacities, which is also corroborated by the information submitted by the responding producers in this investigation. As per this report the global CR demand is expected to drop by 3.5% while the capacities have increased rapidly creating a significant demand supply mismatch scenario. The Authority further notes that due to significant dumping of the goods from certain countries the product has been recently subjected to antidumping duties in various countries such as, the European Union (March 2015, China and Taiwan); Vietnam (Sept 2014: China, Taiwan, Indonesia and Malaysia; and Brazil (Oct 2013: China, Korea, Taiwan, Vietnam and Finland) thereby further affecting the demand supply scenario. In such a scenario growing Indian market would be attractive for the foreign producers to utilize their surplus capacities at marginal cost pricing. Such imports will have potential to adversely affect the performance of the domestic industry through volume as well as price effects, if imports continued to come at the current prices without anti-dumping duty.

(iii) Anti-dumping Investigation on Subject Countries

175. It is noted that the European Union has issued preliminary findings against China and Chinese Taipei vide Commission Implementing Regulation (EU) 2015/501 of 24 March 2015 and imposed anti-dumping duty of 24.3% to 25.2% from China and 10.9% to 12% from Chinese. This also shows the dumping behavior of the exports from these two countries. Apart from this, antidumping duties have been imposed by Brazil in Oct 2014 on CR Flat Products from China, Korea, Taiwan, Vietnam and Finland. Vietnam has also imposed antidumping duties on these products in Sept 2014. Therefore, there is an imminent likelihood of diversion of subject goods to India, from these countries, if the duties are revoked.

(iv)Price Attractiveness of the Indian Market and Demand scenario

176. Indian market for the subject goods continues to have a healthy demand for the product which is in line with the general economic growth. However, the price scenario of the past indicates that it would continue to remain a low price market and attractive for the global players with surplus capacity to export at marginal cost pricing. However, if the duties are removed the Indian market will become much more attractive as the exporters would be able to realize better prices to the extent of the duty absorption by them.

(v) Trend in imports in the post POI period

177. The POI in the instant case was January 2013 to December 2013 and the extended antidumping duty was valid till 20th April 2015. Therefore, during the first six months of the post POI period the duties were in place. Therefore, the post POI import data is also affected by the duties and would not provide any significant trend in volume and prices. Nevertheless, the data has been examined to see any significant trend, if any. 6 months import data beyond the POI has been examined to see the trends. The data on post POI imports given in the previous section indicates continuation of the same trends. In fact the volume of imports shows a significant increase in the post POI period.

(vi) Post POI price effects scenario

178. Comparison of post POI import prices with the selling prices of the domestic industry also shows that the prices continue to significantly undercut the prices of the domestic industry.

179. The import prices during the post POI period, when compared with the noninjurious prices, also indicates that if the duties are revoked and the price line holds at that level it will have significant price underselling effect on the domestic industry.

Post POI price effects scenario1

(vii) Post POI performance of the domestic industry

180. Though the domestic industry’s production and sales during the post POI has improved as per the data presented in the previous section, Post POI financial performance of the domestic industry shows deterioration. The losses have increased during the post POI period indicating that the industry would continue to suffer injury if the duties are revoked.

N. Post Disclosure comments of the interested parties

181. In their post disclosure comments the interested parties have mostly reiterated their arguments with regard to the likelihood of continuation or recurrence of dumping and injury. The responding exporters have further argued that product under consideration is only upto 1250mm width. If any other product beyond the scope of PUC is causing injury to domestic industry then this injury cannot be attributed to imports of subject goods. If authority wants to consider Non-PUC also, then it should be considered in totality. Merely considering volume of imports of Non-PUC for analysis is not acceptable. The authority should consider the price, demand, domestic sales and other economic parameters for goods beyond 1250 mm width. In this connection the Authority notes that without attributing any injury to such imports it was noted that the import data clearly establishes that the imports have shifted from the product ranges beyond the scope of the product on which duty was in force and therefore, the data on demand and consumption, market shares and prices of the PUC is affected to that extent. Therefore, the impact of shift in imports to wider widths cannot be ignored.

182. The responding exporters have further argued that it is a settled practice of the Authority to terminate an anti-dumping investigation against a subject country when the volumes of imports from that country are extremely low. It has been further argued that this principle is adopted the European Union also in its sunset reviews. In this connection the Authority notes that in a sunset review the focus is on the likelihood analysis. If the import during the injury investigation is low the principle highlighted by the responding interested parties is applied when there is no imminent likelihood of recurrence of dumping. When a clear likelihood is established on the basis of the facts of the case low volume of imports during the injury period is not relevant.

183. The domestic industry, in its submissions, has further requested the Authority to recommend the residuary duties on those particular series not exported by the participating exporters. Further, all those produces / exporters or combination of producer and exporter who had participated in the original investigation and failed to participate in the sunset review investigation should also be awarded residuary duty.

184. The responding exporters, in their post disclosure submissions, have also argued that the authority should apply the same dumping margin /antidumping duty determined for the grades exported during the POI for the grades not exported during POI as it should be presumed that dumping, if any, shall be of same level for those grades also which have not been exported during POI by cooperating producer/exporter. The authority should not apply the penal rates of antidumping duty to grades not exported during POI for cooperating exporters as the objective of penal rates is to punish the non-cooperating parties. Respondents have fully cooperated with the authority during the course of investigation and provided all the information requested by the authority. Therefore, authority should not apply penal rates of antidumping duty to grades not exported by the Respondents during POI.

185. The issues raised by the interested parties in their comments to the disclosure statement have been examined to the extent they are relevant.

O. Overall assessment of likelihood of continuation or recurrence of dumping and injury

186. Examination of the publicly available data on capacities and production of the subject goods in the subject countries/territories as well as overall global demand supply scenario for the subject goods as outlined above clearly establishes the fact that the subject countries/territories have significantly high spare capacities for production of the said goods. The global demand supply scenario is adversely affected due to several macro-economic factors and the situation is likely to continue as per the projections available in such reports. The product also faces trade remedial measure in several countries and some of the subject countries are facing such trade remedy measures in some of the major markets as detailed in the previous section. Therefore, there is an imminent possibility of large scale export of the subject goods from the subject countries if the duties are revoked. General price trend indicates that on the face of global slump in demand and trade remedial measures in major markets it would be attractive for the producers in the subject countries to increase their exports to India at marginal cost pricing to recover their fixed cost by utilizing the idle capacities. Therefore, there is an imminent likelihood of increase in dumped imports if the duties are revoked.

187. The Authority notes that though the volume of imports of the product under consideration has declined after imposition of antidumping duties the domestic industry is already faced with low capacity utilization due to continued dumped imports and diversion of a significant volume of imports to product ranges outside the scope of the product under consideration. Even at increased production and sales levels the domestic industry is already facing significant decline in its financial results because of the price effects of dumped imports. Therefore, further increase in imports from the subject countries/ territories at dumped prices, in the event of revocation of duty, will further affect the domestic industry’s capacity utilization and profitability. Therefore, injury to the domestic industry, which still continues to be affected because of dumped imports, is likely to be intensified if the duties are revoked.

P. Magnitude of injury and injury margin

188. Having regard to the lesser duty rule followed by the Authority margins of injury with respect to the importation of the subject goods from the subject countries/territories have also been determined. For determination of injury margin the Authority has determined the Non-Injurious Price (NIP) for the domestic industry as per the procedures laid down in Annexure III of the Anti Dumping Rules. For the purpose of like to like fair comparison the NIPs have been determined at the grade levels and consolidated at series level of respective grades of the subject goods. The Non-injurious prices, so determined at series level, have been compared with the corresponding landed values of the respective series of the product being imported from the subject countries, to arrive at the injury margins for each country. Accordingly, the NIP for the domestic industry and the margins of injury, for the products under consideration, have been determined for each of the subject countries.

189. The Authority notes that very negligible quantities of duplex grade has been imported from some of the countries during the period of investigation and the price information is not reliable. Therefore, that grade has not been considered for the injury margin calculations. Injury margins have been first determined at the grade/series level and then consolidated for the product as a whole taking into consideration the injury margins at the grade/series level for each producer. Accordingly, the NIP for the domestic industry and the margins of injury for the products under consideration have been determined for each of the subject countries as well as the responding exporters as follows:

Magnitude of injury and injury margin

Magnitude of injury1

  190. The above data indicates that the weighted average injury margins of the landed values of the dumped imports from the subject countries/territories at series levels are significantly below the Non-injurious prices of the subject goods of the corresponding series except for Thailand where the current injury margin for the product as a whole is negative.

191. The Authority notes that the margins of dumping at grade/series levels as well as for the product as a whole computed based on the current imports of the subject countries is significantly high and there is a clear likelihood of continuation of dumping from the subject countries. The Authority also notes that the margins of injury at grade/series levels as well as for the product as a whole is significant for all the subject countries except for the cooperating exporter from Thailand.

192. In case of POSCO Thainox, Thailand, it is noted that for the same grades the exports prices through the unrelated exporter is significantly different from the export prices when exported directly, resulting in significantly different dumping and injury margins for the same grades exported through different channels. The volumes of export through these two channels are also low. Since the producer has sold the same grades at differential prices during the POI, there is no reason to believe that the producer will not sell the goods at the lower prices at which the goods are sold during the PIOI if the duties are revoked. Therefore, for this producer from Thailand the Authority has determined the likely injury margin based on the prices at which the goods have been sold to India through its unaffiliated trading Company.

Q. Conclusions:

193. After examining the issues raised and submissions made by the interested parties and facts made available before the Authority, as recorded in this finding, the Authority concludes that there is continued dumping of the subject goods from the subject countries/territories though the volume of imports has declined after imposition of duties. The performance of the domestic industry has deteriorated in the current injury period due to the impact of the dumped imports from the subject country and diversion of imports to product ranges outside the scope of the product under consideration. The dumping is likely to continue and the performance of the domestic industry is likely to deteriorate, should the present anti dumping duty is revoked.

R. Indian industry’s interest & other issues

194. 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 re-establish a situation of open and fair competition in the Indian market, which is in the general interest of the country. Imposition of antidumping measures would not restrict imports from the subject country in any way, and, therefore, would not affect the availability of the subject goods to the consumers.

S. Recommendations:

195. The Authority notes that this sunset review 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 and verifiable evidence on various aspects of dumping, injury and causal links and likelihood of continuation of dumping and injury in the event of cessation of the duties. Having conducted the investigation as per the procedure prescribed and having established that dumping and injury are continuing and are likely to continue, or recur, if the duties are revoked, the Authority considers it necessary and appropriate to recommend extension of anti-dumping duty on imports of subject goods, from the subject countries/ territories, in the form and manner described hereunder.

196. Having regard to the lesser duty rules followed by the Authority, the Authority recommends extension of anti-dumping duty equal to the lesser of margin of dumping and margin of injury so determined in this finding for the period under investigation, so as to remove the injurious effects of the dumped imports on the domestic industry. Accordingly, antidumping duty as a percentage of the landed value of the goods, as indicated in Col 9 of the duty table given below, is recommended to be imposed on all imports of subject goods originating in or exported from the subject countries/territories for a further period of five years from the date of notification to be issued in this regard by the Central Government. Landed value of imports for this purpose shall be the assessable value as determined by the customs under the Customs Act. 1962 and all duties of customs except duties levied under Section 3, 3A, 8B, 9 and 9A of the Customs Tariff Act, 1975.

Recommendations

Recommendations12

Foot Note:

** “Cold-rolled Flat products of stainless steel of width of 600 mm upto1250mm of all series not further worked than Cold rolled (cold reduced) with a thickness of up to 4mm (width tolerance of +30 mm for Mill Edged and +4mm for Trimmed Edged)”, excluding the following:

i. The subject goods of width beyond 1250 mm (plus tolerances).

ii. Grades AISI 420 high carbon, 443, 441, EN 1.4835, 1.4547, 1.4539, 1.4438, 1.4318, 1.4833 and EN 1.4509

iii. Product supplied under Indian Patent No. 223848 in respect of goods comprising Low Nickel containing Chromium-Nickel Manganese-Copper Austenitic Stainless steel and representing Grades YU 1 and YU 4, produced and supplied by M/s Yieh United Steel Corp (Yusco) of Chinese Taipei (Taiwan).

The product under consideration is classified under the category “Base Metals and Articles of Base Metals” in Chapter 72 of the Customs Tariff Act, 1975 and further under 7219.31, 7219.32, 7219.33, 7219.34, 7219.35 and 7219.90 as per Customs Classification. Customs classification indicated herein is indicative only and is in no way binding on the scope of the application of duty if the products are imported under any other head of customs.”

197. An appeal against the orders of the Central Government that may arise out of this recommendation shall lie before the Customs, Excise and Service tax Appellate Tribunal in accordance with the relevant provisions of the Act.

198. The Authority may review the need for continuation, modification or termination of the definitive measure as recommended herein from time to time as per the relevant provisions of the Act and the Rules, and Public Notices issued in this respect from time to time. No request for such a review shall be entertained by the Authority unless the same is filed by an interested party as per the time limit stipulated for this purpose.

A. K. Bhalla Designated Authority

The Dollar Business Bureau - Oct 15, 2015 12:00 IST
 
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