Imports of Poly Vinyl Chloride (PVC) Paste/Emulsion Resin from Korea Sl48

Dated 26th April, 2016 | Copy of | Notification Sl48 |

Government of India
Ministry of Commerce & Industry
Department of Commerce
(Directorate General of Anti-Dumping & Allied Duties)

FINAL FINDINGS

Subject: Sun Set Review of the Anti-Dumping Investigation concerning imports of "Poly Vinyl Chloride (PVC) Paste/ Emulsion Resin" originating in or exported from Korea RP, Taiwan, China PR, Malaysia, Thailand, Russia and European Union.

No 15/19/2014-DGAD:- 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) thereof;

A. Background of the case

1. Whereas in the matter of imports of Poly Vinyl Chloride Paste Resin also known as Emulsion PVC Resin (hereinafter referred to as the subject goods), falling under sub- heading 3904 22 10 of the Customs Tariff Act, 1975, originating in, or exported from, People's Republic of China, Republic of Korea, Malaysia, Russia, Taiwan and Thailand imported into India, the Designated Authority in its preliminary findings vide notification No.14/36/2009- DGAD, dated the 11th June, 2010, had recommended imposition of provisional anti-dumping duty on the imports of subject goods, originating in, or exported from, and whereas, on the basis of the aforesaid findings of the Designated Authority, the Central Government had imposed provisional anti-dumping duty on the subject goods vide notification No. 77/2010-Customs, dated 26th July, 2010. And whereas, the Designated Authority, issued its final findings vide notification No. 14/36/2009—DGAD, dated 2nd May, 2011 and the Ministry of Finance imposed definitive anti-dumping duty vide Notification No.66 /2011-Customs dated 26th July, 2011.

2. Separately, in another investigation, the Designated Authority vide notification No.15/27/2008-DGAD, dated the 31st March, 2009, had initiated sunset review in the matter of anti-dumping duty on imports of subject goods originating in or exported from European Union imposed vide notification of Government of India in the Ministry of Finance (Department of Revenue), No. 104/2004–Customs, dated the 7th October, 2004, and extended the same by notification No. 115/2009-Customs dated 6th October,2009. The Designated Authority vide notification No. 15/27/2008-DGAD, dated the 26th April, 2010, after conducting Sunset Review had recommended continued imposition of anti-dumping duty on imports of the subject goods, originating in, or exported from European Union, which was imposed by the Ministry of Finance vide Notification No. 70 /2010- Customs dated 25th June, 2010 and amendment notification no.8/2012 dated 16.01.2012.

3. And whereas, Leather Cloth and Plastics Manufacturers Association (LCMPA) filed an appeal before CESTAT, challenging the continued imposition of antidumping duty on imports of product under consideration recommended vide final findings dated 26th April, 2010 and imposed vide Customs Notification No.70/2010-Customs dated 25th June, 2010 and amendment vide notification no 8/2012 dated 16.01.2012. 6.

4. And whereas the Hon'ble CESTAT vide its order dated 6th July, 2012 set aside the final findings dated 26th April 2012 , the Customs notification No.70/2010- Customs dated 25th June, 2010 and amendment notification no.8/2012 dated 16.01.2012 and remanded the matter back to Designated Authority for fresh decision after granting opportunity of hearing to the interested parties.

5. The Designated Authority vide notification No. 15/27/2008-DGAD dated 4th April 2013, after granting opportunity of hearing recommended imposition of anti-dumping duty has recommended the continued imposition of definitive anti-dumping duty on all imports of the subject goods, originating in, or exported from the European Union; which was imposed by the Ministry of Finance vide Notification No. 15 /2013- Customs (ADD) dated 3rd July, 2013.

6. Whereas, M/s. ChemplastSanmar Ltd has filed a duly substantiated application before the Authority, in accordance with the Act and the Rules, contending likelihood of continuation or recurrence of dumping of the subject goods, originating in or exported from Korea RP, Taiwan, China PR, Malaysia, Thailand, Russia and European Union and consequent injury to the domestic industry and have requested for review, extension of period, modification of the existing anti dumping duties imposed on the imports of the subject goods, originating in or exported from the subject countries.

7. Whereas in view of the duly substantiated application filed and in accordance with Section 9A(5) of the Act, read with Rule 23 of the Anti-dumping Rules, the Authority initiated a Sunset review investigation vide Notification No 15/19/2014-DGAD dated 27th April, 2015 to review the need for continued imposition of the duties in force in respect of the subject goods, originating in or exported from the subject countries and to examine whether the expiry of such duty is likely to lead to continuation or recurrence of dumping and injury to the domestic industry

8. The present Sunset Review is initiated on imports of the subject goods from the exporting countries mentioned in Para (1) and (2) above i.e. People’s Republic of China, Republic of Korea, Malaysia, Russia, Taiwan, Thailand and European Union (herein after referred to subject countries).

9. In exercise of the powers conferred by sub-sections (1) and (5) of section 9A of the Customs Tariff Act and in pursuance of rule 23 of the said rules, the Central Government has extended the existing anti-dumping duty on "Poly Vinyl Chloride Paste Resin" levied vide notification No 15/2013-Customs (ADD) against imports from European Union, dated the 3rd July, 2013; upto 25th day of July, 2016 through a notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 26/2015-Customs (ADD), dated the 1st June, 2015 and Corrigendum dated 28th March, 2016. Separately, the Ministry of Finance extended the anti-dumping duty on "Poly Vinyl Chloride Paste Resin" against imports from Korea RP, Taiwan, People's Republic of China, Malaysia, Thailand and Russia imposed vide Notification No. 66/2011-Customs, dated the 26th July, 2011; upto 25th day of July, 2016 through a Notification No. 25/2015-Customs (ADD) dated 1st June, 2015

B. Procedure

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

i. The Authority sent copy of the initiation notification dated 27th April, 2015 to the embassy of the subject countries in India, known exporters from the subject countries and known importers, as per available information. The known interested parties were requested to file questionnaire responses and make their views known in writing within the prescribed time limit. Copies of the letter and questionnaires sent to the exporters were also sent to embassy of the subject countries along with a list of known exporters/producers, with a request to advise the exporters/producers from the subject countries to respond within the prescribed time.

ii. Copy of the non-confidential version of the application filed on behalf of the applicant was made available to the known exporters and the embassies of the subject country in accordance with Rule 6(3) of the Rules.

iii. The Authority forwarded a copy of the public notice initiating the sunset review to the following known producers/exporters in the subject countries and gave them opportunity to make their views known in writing within forty days from the date of the letter in accordance with the Rules:

a) Tianjin Chemical Plant, China PR
b) Tianjin Bohai Chemical Industries, China PR
c) Shenyang Chemicals Co. Ltd, China PR
d) Formosa Plastic Corporation, Taiwan
e) LG Chem Ltd., Korea RP
f) Hanwha Chemicals, Korea RP
g) Kaneka Paste Polymers SDN, Malaysia
h) Vinythai Public Company Limited, Thailand
i) OOO Polymer- Chemie, Russia
j) VistolitGmBH& Co, Denmark
k) EVC Business Centre, UK
l) VastoliteGmBH& Co, Germany
m) Solvin SA, Belgium
n) VinnolitGmbh& Co, Germany
o) Alscondel, Spain

iv. In response to the initiation of the subject investigation, following producers/exporters from the subject countries have responded by filing questionnaire response

a) M/s LG Chem, Korea RP (“M/s LG”) 

b) M/s Hanwa Chemicals, Korea RP (“M/s HCC”)

v. Further M/s RusVinyl, producer from Russia filed a letter dated 27th January, 2016 raising certain issues on the investigation. However, the company did not file the questionnaire response. The issues raised by the company are however considered in the present investigation to the extent found appropriate. An email dated 21st January, 2016 in continuation of its email of October, 2016 was also received at the belated stage of investigation from SCG Performance Chemicals Co Ltd, Thailand (“M/s SCG”), an exporter of the subject goods produced by its 100% subsidiary, i.e. M/s. TPC Paste Resin Co. Ltd., Thailand, requesting for a possible participation in investigation. The Authority in the disclosure had stated that both the above producer and exporter of the subject goods did not register themselves as an interested party as was required to be done. Neither did they file any submissions/data on normal value and exports made by them despite an extension in time provided with notice hosted on the Dept. of Commerce’s website. The exporter did therefore not avail opportunity provided to them in a timely manner. The Authority provided the disclosure statement to the exporter for their comments.

vi. Market Economy Treatment (MET) questionnaire was also forwarded to the known producers/exporters in China PR and the Embassy of China PR in India with the request to provide relevant information to the Authority within the prescribed time limit. While for the purpose of initiation, the normal value in China PR was considered 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 claim of the applicant 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/sufficient evidence as mentioned to enable the Authority to consider whether market economy treatment can be granted to the cooperative exporters/producers in China PR. However, none of the producers/exporters from China PR have filed MET questionnaire response rebutting the non-market economy treatment to China PR.

vii. Questionnaires were sent to the following known importers/users/associations of subject goods in India calling for necessary information in accordance with the Rules:

 viii. In response to the above notification, following importers filed questionnaire/ submissions

a) M/s MayurUniquoters Ltd
b) M/s Polynova Industries Ltd.
c) M/s Jasch Industries Ltd.

ix. Further, the M/s Leather Cloth and Plastics manufacturers’ Association (LCPMA)has filed response to the petition.

x. M/s Athena Associates also made submissions on behalf of M/s MayurUniquoters Ltd. M/s Polynova Industries Ltd., M/s Jasch Industries Ltd., LCPMA, M/s KPL International Ltd. and M/s Jasch Plastics India Ltd. after oral hearing held on 02.02.2016.

xi. One of the importers KlassikLamitex Private Ltd. (“M/s Klassik”) filed its response at the belated stage of the proceedings. The Authority has informed all the known importers mentioned in the domestic industry’s petition to file the questionnaire responses. Further the questionnaires and Initiation of the investigation was available on the website. As per the initiation notification, any party wishing to participate can get itself registered as an interested party.

xii. M/s. Klassic through letter dated 18.03.2015 had requested for non- imposition of existing anti- dumping duty in PVC resin after its expiry in June 2015, on the grounds that despite falling VCM prices globally, high prices for PVC resin prevailing in India, non- consideration dynamic cost structure of products globally, Foreign Exchange Rate factors including cross currency rates, advance impact on user industry especially employment, monopolistic protection to a few producers, emergence of inverted duty structure, under invoicing of imports by derived industry etc., prior to initiation of the sunset review.

xiii. The importer participated in the oral hearing held on 02.02.2016 and provided submissions and the imports data as per the questionnaire which has been appropriately correlated with the data provided by the producer/exporter from South Korea and the DGCI&S data. The submissions made by the importer earlier vide its letter date 18.03.2015 as stated above have been broadly repeated further emphasizing the high protection to Domestic Industry not based on global price data, the huge demand supply gap in the country, non- integrated facility of M/s. Chemplast leading to high cost and unreasonable quantum of anti- dumping duty which if was correct would have encouraged M/s Chemplast to export to countries having high domestic prices which is not the case.

xiv. The Authority notes that the submissions of the importer in its letter dated 18.03.2015 prior to the SSR initiation indicate his knowledge of the forth coming sunset review. Further, in view of questionnaires, and initiation being gazetted and available in public domain on website of Dept. of Commerce, submissions/data in the present ongoing sunset review could have been filed well by him within the stipulated time.

xv. Further M/s Bansal Chemical Ltd filed a letters dated 8th June 2015 stating that they have not imported the product under consideration since 2008 and will not import in future and therefore should not be considered as a leading exporter of product under consideration.

xvi. Exporters, producers and other interested parties who have not responded to the Authority nor supplied information relevant to this investigation, have been treated as noncooperating.

xvii. Request was made to the Directorate General of Commercial Intelligence and Statistics (DGCI&S) to arrange for details of imports of subject goods for the past three years, including the period of investigation, which was received by the Authority.

xviii. Optimum cost of production and cost to make & sell the subject goods in India based on the information furnished by the domestic industry on the basis of Generally Accepted Accounting Principles (GAAP) was worked out so as to ascertain if anti-dumping duty lower than the dumping margin would be sufficient to remove injury to Domestic Industry. The NIP has been determined by the Authority for various grades of the product under consideration in terms of the principles laid down under Annexure II to the Anti-dumping Rules.

xix. The period of investigation for the purpose of the present review is October 2013- September 2014 (12 months). However, injury analysis covered the periods April, 2011-12, 2012-13, 2013-14 and POI.

xx. In accordance with Rule 6(6) of the Anti-dumping Rules, the Authority provided opportunity to the interested parties to present their views orally in a public hearing held on 2nd February, 2016. The parties, who presented their views in oral hearing, were requested to file written submissions of the views expressed orally, followed by rejoinder submissions.

xxi. The submissions made by the interested parties during the course of this investigation have been considered by the Authority, wherever found relevant, in this finding.

xxii. Verification to the extent deemed necessary was carried out in respect of the information & data submitted by the domestic industry, cooperative exporters and one of the importer/ user industries.

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

xxiv. 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 considered such parties as non-cooperative and recorded the findings on the basis of the facts available.

xxv. In accordance with Rule 16 of the Rules supra, the essential facts were disclosed by the Authority on 15th April, 2016 to the known interested parties. Interested parties were requested to  file comments to the disclosure statement by 20.04.2016. However keeping in view the submission made by M/s KlassikLamitex and M/s SCG Performance Chemical Co. Ltd., the Authority has granted them one additional day, i.e. 21.04.2016 to file comments on the disclosure statement. Further, comments received on the disclosure statement, to the extent considered relevant by the Authority, have been considered in this final finding.

xxvi. The average exchange rate of 1US$ = Rs 61.65 prevailing during the POI has been adopted by the Authority in this finding.

xxvii. “***” represents information furnished by an interested party/ other party on confidential basis and so considered by the Authority under the Rules.

C. PRODUCT UNDER CONSIDERATION AND LIKE ARTICLE

11. The product under consideration, in the original investigation is Poly Vinyl Chloride Paste Resin” also called “Emulsion PVC Resin” and referred to as PVC paste resin (hereinafter also referred to as the subject product or the subject goods). There are primarily two types of PVC resins, namely PVC Paste Resin and PVC Suspension Resin. It was clarified in the initiation notification itself that PVC Suspension Resin is excluded from the ambit and scope of this investigation. The PVC Paste Resin is produced from Vinyl Chloride Monomer (VCM). VCM is produced using EDC, which in turn requires chlorine as one of the major products. The subject goods is produced and sold in the form of white/off-white powder. The properties of the subject goods are described in terms of K value, inherent viscosity, particle size retention, heat loss, initial BFB etc.

12. The subject goods fall under Chapter 39 of the Act under subheading no. 3904. However, the Customs classification is indicative only and is in no way binding on the scope of the present investigation

C.1 Views of Exporters, Importers, Consumers and other Interested Parties

13. Following submissions have been made by the exporters/importers/users/other interested parties/ other parties

a. The Authority should reconsider the scope of PUC and like article in the current investigation as apart from the original investigation and remove certain items not falling within the ambit of the PUC. It is within the prerogative of the DA to re-examine the PUC in an SSR investigation.

b. The DI does not manufacture any resin by emulsion process but only by suspension and micro-suspension process. Since resin manufactured by suspension process is admittedly out of the scope of PUC, what remains is only resin manufactured by micro-suspension process and not by emulsion process. DI is confusing the authorities by coining multiple names for the same products i.e. emulsion grade and paste resin.

c. The goods produced by petitioner are only a small sub set of products in respect of which duty is sought to be continued. Domestic industry manufactures only grades 124 (K Value 65), 120 (K Value 68) and 121 (K Value 77). None of the grades manufactured by Domestic Industry qualify as low fogging resin. In the specification sections of products, Chemplast does not talk about fogging properties at all.

d. Domestic industry itself on its website and also in its petition and through its product catalogue depicts that different grades of PVC paste resin manufactured by it has different properties and they are suitable for different uses and one grade cannot be substituted for another grade. Domestic industry itself sells these grades at different prices. This in itself a sufficient proof which DI cannot dispute that different grades are distinct products and they are technically and commercially not substitute of each other.

e. Domestic industry does not manufacture (1) PVC paste resin of High K Value and (2) PVC paste resin of low fogging especially for the automotive application.

f. leather cloth manufactured with resins manufactured by Chemplast has never passed the Fog test. All the grades of Chemplast resin have been found to be failing on fogging test and are nowhere near the standards as huge oil droplets are formed on the glass plates & hence not suitable for automotive Industry at all. It is therefore essential for LCPMA members that PVC resin with LOW FOG property has to be imported, without which the domestic supply to the entire automotive industry will come to a standstill.

g. Comparison with special grades like 373 ND and 375 MD imported from EU will clearly show that the subject goods produced by Chempast are not like article to the specialty grades like 373 ND and 375 MD imported from subject countries including EU and there is no justification for allowing low fogging grades within the scope of PUC and ambit of anti dumping duties. The Authority may note that the price variance in specialty grade and the general purpose PVC has been in the range of 20% to 28% this alone shows there is no justification for continued consideration of these grades in the PUC bucket. The Low Fog resins for automotive application in particular imported are neither technically nor commercially substitutable to the PVC grades produced by the domestic industry and Low Fog resins needs to be excluded from the scope of PUC.

h. The domestic Industry is manufacturing non plasticized PVC paste resin of K-value between 65 and 77 as evident from their own product catalogue. Further domestic industry is clearing its products under 39042110 and no other classification. Therefore for the purposes of review PUC should be non plasticized PVC paste resin of K-value between 65 and 77 falling under CTH 39042110.

i. The Automotive companies have adopted an international standard SAE J- 1756 to test the fogging property. The paste resin manufactured by the Domestic Industry fails all fogging tests and unsuitable to meet the specific requirements of the automotive manufacturers. Request made to compare the same with special grades from EU.

j. The DI is manufacturing non-plasticized PVC paste resin of K-value between 65 and 77. High K-value resin cannot be substituted by a low K-value resin. PVC paste resin of Kvalue higher than 77 should be excluded from PUC.

k. Members of LCPMA cannot execute orders of leather cloth with specifications using the PVC paste resin manufactured by the DI.

l. Orders for High K-value, low fogging paste resin were placed by members of LCPMA with the DI post-POI as well as before whom the DI was unable to supply. We have tried to manufacture the leather cloth with the grades supplied by DI and with the grades imported and got it tested. The one in which top coat is made with imported PVC of higher K value with low fogging passes the test and the one in which top coat is made with Chemplast PVC Resin fails the test.

m. It the discretion of the Authority, let the testing be done by any recognised and independent agency of Authority’s choice by giving emphasis to a correct sample testing process right from sample collection to credibility and facilities available with the testing agency to carry out the required tests. We are also ready to bear the expenses for such testing.

n. LCPMA members have placed orders for supply of (1) PVC paste resin of High K Value and (2) PVC paste resin of low fog which Chemplast is unable to supply and has not responded till date. It is already explained that LCPMA members cannot execute the orders for automotive industry with the existing graders manufactured by Chemplast and thus are constrained to import.

o. DI should be asked to provide K-value wise production and sale details as the interested parties are unaware of the grades the DI can actually manufacture and sell.

p. Miniscule requirements or lack of commercial volume is not an argument against supply of certain grades. Admittedly the demand for specialty grades is miniscule, but the same is substantial for the downstream users.

q. The product manufactured by domestic industry is not like article to imported products.

r. There is a need to review the scope of PUC as there is no justification for continued inclusion of High K Value resins and Low Fogging resins in particular for the auto motive sector from the scope of PUC which are not manufactured and supplied by the DI. DI tried to mislead the Authority by equating test of volatility to low fogging test when the resin produced by the DI could never pass the low fogging test and unfortunately the test conducted at IIT Delhi also talked about volatility and not low fogging properties. Thus, there is a case for reconsideration of scope of PUC and there is nothing in the Rule bars such a consideration by the Authority.

s. Volatility test and low fogging test are not the one and the same. Low fogging test is a different test all together as per international standards prescribed for automobile interiors and Delhi IIT did not even have the facility to test low fogging property.

t. A verification visit was undertaken to the premises of one of the users/importers i.e. MayurUniquoters, in Jaipur on 09-10 April, 2016 to verify the data/basis of their submissions. It was reiterated that the volatility content and fog property of PVC resin are two different properties and it cannot be concluded that PVC resin with volatile content less than 0.5% has low fogging characteristics. Further it was mentioned that different grades of PVC having different K volumes are used in coating of different layers in footwear, automatic and general applications. There are no known additives which can change K volume or fog characteristics. If plasticizer added to PVC paste resin is reduced to increase K value, it also reduces elongation/flexibility.

u. The Trade Representation of the Russian Federation in the Republic of India submitted that there is no import of the product under consideration from Russia into India during the  period of investigation from 2011 to 2014. There were two companies producing the subject goods in Russia namely “JSC Chimprom”, Volgograd and “Usolyechimprom Ltd.” Only the latter company dispatched the subject goods to India. Both companies have terminated their commercial activity in 2009 and 2014 respectively. Therefore, there is irrelevance of findings on Russian capacities of PVC production, as companies in Russia related to the production and export of the PVC products covered by the subheading 3904; however the only subject of investigation is the PVC Paste/Emulsion Resin, so the findings on capacities could be misleading and lead to incorrect conclusions on possibility of resumption of shipments of subject goods into India market. Russian producers of PVC suspension Resin, which is beyond the scope of the present investigation, are mainly focused on markets of CIS region, Middle East, the European Union, Africa.

C.2 Views of Domestic Industry

14. Thedomestic industry has made the following submissions with regard to the issue of the product under consideration

a. Since the present investigation is an SSR, the scope of the PUC is the same as that of original investigations.

b. PVC resin is broadly classified into two categories – PVC Paste Resin and PVC Suspension Resin. PVC Paste Resin is produced from Vinyl Chloride Monomer (VCM). The PUC is produced and sold in the form of white/off-white powder. It is offered in different grades by the DI and foreign producers which merely differ in terms of the associated properties, which are achieved through control on process parameters and use of specified additives. These different grades do not mean different products. All grades of PVC Paste Resin are within the scope of product under consideration.

c. The goods produced by DI are like article to the goods imported from subject countries. There is no material difference in the production process employed by the foreign producers and that employed by DI. However, every manufacturer fine-tunes its production process as per the necessities and available facilities.

d. DI manufactures the subject goods having a K-value as low as 61 and as high as 85 which is evidenced by the product brochures. After the due verification, the Authorityconcluded in the previous investigations that DI is capable of producing high, low and medium K value of PUC.

e. After testing the volatile content of the PUC produced by DI and those imported by the user association, LCPMA at IIT Delhi, the Authority concluded that both of them have similar volatile content. Further, internal lab tests conducted by DI showed that the sampled PUC manufactured by DI had K-values as low as 61 with a maximum of 82. Therefore, DI can produce a wide range of subject goods having extremely varying Kvalues.

f. DA has consistently adopted the same scope of PUC in the SSR investigations unless strong reasons for modifications are put forth by the interested parties along with credible evidence to substantiate the same. In the instant case, there have been four investigations with the same PUC. Therefore unless the opposing interested parties brings out credible evidences apart from those which the Authority has already examined in the previous investigations, the claim of modification of scope of PUC cannot be accepted. Nothing new has been brought out by the interested parties so there is no reason for altering the determination earlier reached.

g. The difference in manufacturing process does not render two products produced through two different processes as two different articles. The resin produced by DI using its process and resin produced by emulsion process are interchangeably used. PVC Paste resin that can be manufactured by either Emulsion Process or Micro suspension process is the PUC for the present investigation. Hence, PVC resin is also called as Emulsion resin or Micro suspension resin or Dispersion resin. That the same product is called by 4 different names does not make it four different products.

h. The grades manufactured by DI include 120, 121, 123, 124 and 128. The DA has examined about low fogging application in the earlier investigation and held that the grades manufactured by DI qualify as low fogging resin.

i. The PUC comprises of a number of product types which varies significantly in terms of associated properties. There is no requirement under the WTO Agreements or in Indian Laws that the PUC must be an internally homogenous product. The PUC can have various types, grades or forms, which differ significantly in terms of associated costs and prices. Different grades/ form/type of the product do not mean different products. Different grades of a product are alike as far as their essential physical and technical characteristics are concerned. They are also alike as far as their functions and uses are concerned. The fact that different product types are meant for different end applications does not mean that they constitute different article, particularly when different types of product perform the same functions.

j. Repeated investigation has shown that the goods supplied by DI are like article to the imported products.

k. DI has never declined supply of PUC if the orders are placed on a regular basis. If the demand for the PUC is so miniscule and pertinent, the consumers can import the product. There is no ban on imports.

C.3 Examination of the Authority

15. The Authority notes the submissions made and holds that product under consideration is ‘Poly Vinyl Chloride Paste Resin” also called “Emulsion PVC Resin” and referred to as PVC paste resin (hereinafter also referred to as the subject product or the subject goods). There are primarily two types of PVC resins, namely PVC Paste Resin and PVC Suspension Resin. All grades of Poly Vinyl Chloride Paste Resin”, also called “Emulsion PVC Resin” and referred to as PVC paste resin is subject matter of present investigation and are within the scope of product under consideration. However PVC Suspension Resin, PVC Blending Resin, copolymers of the PVC Paste Resin and Battery Separator Resins are excluded from the ambit and scope of this investigation as per the product under consideration in the original findings.

16. With regard to paste resin and emulsion resin being different products, it is noted that PVC Paste/Emulsion Resin can be produced through two processes i.e. micro suspension and emulsion polymerisation. While, the goods produced through these two processes are the same, there are some differences in the physical and chemical characteristics of different grades. The assumption that the scope of the product under consideration is restricted to PVC Paste Resin produced through a particular process is not correct. The PVC paste resin can though be produced through two different processes, the same does not imply that resultant product is different from the considered product under consideration. The domestic industry produces the subject goods by adopting the micro suspension process. The difference in the process employed does not lead to different products, unless the resultant grades of products themselves differ in terms of essential product properties. It is possible that each producer may have its own process to manufacture the product; but the difference in the production process would be immaterial as long as the resultant product's (comprising of various grades) properties for various grades are the same. In view of the same, the Authority holds that both PVC paste and PVC emulsion resin are covered in the scope of the product under consideration in the present investigations and both are within the scope of the product under consideration and measures. The aspect of variation in properties at grade level are appropriately considered while undertaking comparison for assessment of dumping and injury as feasible.

17. With regard to the contention of LCPMA that none of the grades manufactured by Domestic Industry qualify as low fogging resin, the matter was examined in the previous investigations and after taking into account the contention of the various interested parties comprising of domestic industry and LCPMA, it was earlier decided by the Designated Authority to examine their samples by lIT Delhi especially about the fact whether the domestic industry makes products belonging to K value higher than 78 and also if their products have low fogging characteristics.

18. Both the parties were asked to send the samples and based on sample results which was duly conveyed to both the parties, it was noted by the Designated Authority in the previous investigation that after examination of samples reports (including the conclusions given by the above institution) that domestic industry samples of subject goods included PVC paste resin carrying higher K value ( of more than 78) while none of the samples of the LCPMA had K values higher than 78, and all the samples (from both parties) had low fogging characteristics.

19. In view of the above, the Authority held in the previous investigation that the contention of LCPMA that the domestic industry does not produce those grades of PVC paste resin having K value above 78 and low fogging characteristics is not correct. IIT Delhi through its test results and further clarification confirmed that the domestic industry has produced those grades of PVC paste resin having low fogging characteristics and K value above 78.

20. The contending parties have argued that test of volatility and fogging are different tests and that the test done by IIT Delhi did not test the low fogging property. They have further contended that despite anti dumping duty, the users continue to import low fogging grade of product under consideration from European Union by paying anti dumping duty at much higher prices as this grade required as per specifications of automotive sector are not produced by the domestic industry. In this regard, test reports by producers in European Union of such grades have been submitted.

21. The Authority notes that the domestic industry has submitted internal lab tests conducted by the domestic industry in the month of December 2015 to show that the sampled subject goods manufactured by the Domestic Industry had K-values as low as 61 with a maximum of 82.

22. As no new findings of IIT Delhi modifying its earlier reports were brought by the opposing interested party to the Designated Authority, the Authority has not considered the claim of the interested parties to exclude PVC paste resin having K value above 78 and low fogging characteristics from the scope of the product under consideration. However, keeping in view that different intrinsic properties of a grade cannot be altered by a user by certain additives like plasticizer etc., a grade to grade comparison appears appropriate.

23. Regarding claim made that the domestic industry itself on its website through its product catalogue depicts that different grades of PVC paste resin manufactured by it has different properties and they are suitable for different uses; the Authority, on a perusal of the copies of the catalogues of three PVC paste resin grades, namely, 120, 121 and 124 being produced by M/s. ChemplastSanmar Limited, notes that the catalogues show that all the three grades are suitable for manufacturing leather cloth. Though these different grades have different properties but they do not constitute different articles within the meaning of Section 9A(1). It is therefore confirmed that the three grades differ in terms of associated technical (chemical/ physical) values of the product properties with the three grades being part of the basic product. The Authority notes that difference in associated values does not render them different articles from the product under consideration though specific properties of different grades make the usage more conducive for a particular type of application. It therefore merely implies a different form of an article. The Authority notes in this regard that different article within the meaning of Section 9A(1) implies distinctly different product characteristics, manufacturing process, production technology, functions & uses. Therefore, different forms of an article do not for the purposes of Section 9A(1) imply different articles  though there are variations in technical properties at the form/ grade level. Hence, the Authority holds that the contention of LCPMA that the three grades are three different articles within the meaning of Section 9A(1) is inappropriate, and all forms/ grades of the product under consideration are within the scope of investigation.

24. As regards custom classification, it is noted that in a situation where the product under consideration does not have dedicated customs classification, the Authority considers that it is necessary to provide wider scope of the HS code in order to ensure that the imports of the product under consideration are appropriately subjected to anti dumping duty and the anti dumping duty is not evaded by merely specifying the HS code. It is however clarified that this does not imply that any import reported under that HS code shall be subjected to anti dumping duty merely because the HS code has been specified under anti dumping duty table. For sake of abundant caution, it is clarified that anti dumping duty being recommended is on the product description and not on HS classification. Any imports of a product not within the scope of the product under consideration should not be subjected to anti dumping duty merely because the HS code has been specified under duty table. It was noted that product under consideration is imported under more than one customs subhead (8 digit). Having regard to the evidence on record, information provided by the interested parties, scope of the product under consideration in the present case and objective of specifying the HS codes, and in particular considering that the product under consideration does not have a dedicated HS code in the present case and is being imported under different ITC HS codes, the Authority has recommended anti dumping duty on imports of product under consideration falling under customs classification 3904.

25. In order to determine whether goods produced by the domestic industry in various grades can be considered like article to the goods produced and/or exported from the subject countries of various grades, it is noted that there is no known difference in the subject goods produced by the Indian industry and exported from subject countries in terms of physical & technical characteristics, manufacturing process & technology, functions & uses, product specifications, pricing, distribution & marketing and tariff classification of the goods. The two are technically and commercially substitutable, with the consumers using the two interchangeably at various grades level. The Authority, therefore holds that the subject goods produced by the domestic industry is like article to that imported or produced in subject countries within the meaning of the Rules.

D. SCOPE OF DOMESTIC INDUSTRY AND STANDING

D.1 Views of Exporters, Importers, Consumers and other Interested Parties

26. None of the parties raised any submissions with regard to domestic industry.

D.2 Views of domestic industry

27. Following submissions have been made by the domestic industry

a. The petition had been filed by ChemplastSanmar Limited. Apart from the Petitioner there is one more producer of PVC Paste Resin in India, i.e. M/s Finolex Industries Limited.

b. Petitioner Company has neither imported nor is related to any exporter/producers of subject goods in subject countries or importers in India.

c. Production of the Petitioner constitutes a major proportion in Indian production; domestic production of the petitioner account for significantly more than 50 percent of total Indian production of the like product; and the application has been made by or on behalf of the domestic industry. Further, the petitioner company constitutes “domestic industry” within the meaning of the Anti-Dumping Rules.

D.3 Examination of the Authority

28. The application for the sunset review has been filed by M/s. ChemplastSanmar Limited. There is one more producer namely M/s Finolex Industries Limited, of the subject product in India. As per the information available, the petitioner company is not related (neither directly nor indirectly) to any exporter in the subject countries or importer of product under consideration in India. The petitioner has not imported the subject goods from subject countries during period of investigation.

29. The Authority after examining the information on record has determined that the petitioner company constitutes domestic industry within the meaning of the Rule 2(b) and the petition satisfies the criteria of standing in terms of Rule 5 of the Rules supra.

E. Other Issues

E.1 Submissions made by the Exporters/Importers/ users/ other Interested Parties/ other parties

30. Following submissions have been made by the exporters/importers/users/other interested parties/ other parties

a. Previous findings show that in one of the Findings DGAD concluded that there are two producers/exporters from Korea RP and when both of them were found not to be dumping or causing injury to the Domestic Industry, investigation against Korea was terminated. On the contrary with same facts, investigation against Korea RP was not terminated despite the fact all exports from Korea RP were found undumped.

b. Findings issued in the original investigation clearly shows that three exporters of subject goods were found not to be dumping. Further all exports from Korea RP and Taiwan were established to be un-dumped. The Designated Authority should have terminated investigation against these three exporters and should have been excluded them specifically from the scope of the present investigation.

c. In Mexico-Anti-Dumping Measures on Rice, the Appellate Body rejected Mexico’s argument that Article 5.8 requires the termination of the investigation only when the “country-wide margin of dumping” is de minimis, and confirmed the Panel’s view that the term “margin of dumping” in Article 5.8 refers to the individual margin of dumping of an exporter or producer rather than to a country-wide margin of dumping, to be consistent with the use of the term “margins of dumping” in Article 2.4.2.

d. Inclusion of exporters of subject goods from Korea RP and Taiwan, who were found not dumping during the original investigation should not have been included in the present Sunset Review investigation and these exporters should be excluded from the present Sunset Review investigation.

e. The Designated Authority must examine the fact that in case the existing Anti-dumping Duty ceases to exist. This presupposes existence of Anti-dumping Duty. In case there is no Antidumping Duty in respect of some exporters no clause of cessation can be made applicable to them. The level of test of likelihood of recurrence of dumping and injury to these exporters should be different from those exporters who were found to be dumping in the original investigation.

f. Imports by HCC should not be a part of the current SSR investigations as the zero quantum of duty was recommended for the exporter in the previous investigation. Reliance was placed on Appellate Body report in Mexico – Beef and Rice and Section 9A(5) of the Customs Tariff Act, 1975.

g. Volume of imports of Hanwha should be excluded from the purpose of examination in the current investigation due to determination of de minimis dumping margin in the previous investigation. Therefore, there is no likelihood of continuation or recurrence of dumping and injury.

h. The DI to cover their claim of excessive confidentially has been raising a counter allegation.

i. The most appropriate form of duty, if any is recommended to be continued, is bench mark price in terms of Indian Rupees and no other basis as there are different grades out of which some are not manufactured by the Domestic Industry.

j. Anti-Dumping Duty, if any, may be calculated on ad-valoram basis as % of the import price like customs duty to take care in the volatility in crude and exchange rate and register our opposition to any other form of duty which will render our survival itself very fragile on Appellate Body report in Mexico – Beef and Rice and Section 9A(5) of the Customs Tariff Act, 1975.

g. Volume of imports of Hanwha should be excluded from the purpose of examination in the current investigation due to determination of de minimis dumping margin in the previous investigation. Therefore, there is no likelihood of continuation or recurrence of dumping and injury.

h. The DI to cover their claim of excessive confidentially has been raising a counter allegation.

i. The most appropriate form of duty, if any is recommended to be continued, is bench mark price in terms of Indian Rupees and no other basis as there are different grades out of which some are not manufactured by the Domestic Industry.

j. Anti-Dumping Duty, if any, may be calculated on ad-valoram basis as % of the import price like customs duty to take care in the volatility in crude and exchange rate and register our opposition to any other form of duty which will render our survival itself very fragile.

E.2 Submissions made by Domestic Industry

31. Following submissions have been made by the domestic industry with regard to standing and scope of the domestic industry

a. Non-confidential version of questionnaire responses is grossly inadequate. Even information that is publicly available has not been disclosed. Further the interested parties have not filed proper and sufficient non confidential summary of the information claimed confidential. Blank formats have been given which is in direct violation to principles of natural justice.

b. Any claim to treat the information as confidential must be bona fide and germane to the rights and legitimate interests of the party.

c. The CESTAT stated that DA is not required to mechanically treat the information provided by a party as confidential merely because that party has desired it to be kept confidential. The rules confer discretion upon DA to consider the request for confidentiality made by a party and if it is satisfied that the same is not warranted or that the supplier of the information is unwilling to make information public or to authorize its disclosure in a generalized or summary form, it may disregard such information. 

d. LCPMA is the association of PVC Resin consumers and importers. It claimed to be an interested party in the current investigation. The user association has filed its submissions however, apart from two of its members; none of the members of the user association has filed any QR. The notice of initiation provides opportunities to interested parties to provide relevant information to the Designated Authority. The Association has not provided any information" whatsoever with regard to the present investigations.

e. Only two importer questionnaires were received in the current investigation and no other members of the importer association filed responses. Thus, to qualify as an interested party, members of the LCPMA were required to file separate questionnaire responses which they have failed to do.

f. Formosa Plastics, LG Chem and Hanwha Chemicals have been repeatedly investigated by DA for different products and it has been found that DM in their exports is deminimus. The products investigated are such that no producer is able to fetch a price materially different from other suppliers in Indian market. Thus, even when DA found significant DM in respect of exports made by other exporters in these products, the DA found that the DM is de-minimus. However, other investigating authorities such as China and Australia have found positive DM in respect of their exports.

g. Repeated instances of no dumping by these companies across the products imply that these companies pricing policy is to sell the product at one price, regardless of the market. Further, this is not for selling price, this is for ex-factory realization to the exporters after making of the adjustments. This is highly impossible situation and clearly points at grossly manipulated QR.

h. The product is attracting fixed quantum of ADD at present in case of Europe, where ADD was earlier imposed in the form of benchmark price and was later modified to fixed duty in review. The WTO Agreement on AD explicitly permit authorities to impose ADD in the form and manner requested.

i. The interested parties are comparing the Final Findings of 2004 with that of 2011. There is a long gap between the two findings and therefore the situation between the periods may have undergone a change. The exporters had a right to demand termination at the time of original investigation and thereafter had a right of statutory appeal. Having lost those opportunities, the exporters cannot now raise these concerns.

 j. India by practice does not conduct partial interim review or expedited sunset reviews. The midterm or sunset reviews conducted in India focuses on existence, degree and effect of dumping. It must be noted that the investigation process that is being undertaken by the DA is substantially different from other WTO member countries’ practices. Further, despite no obligation, the DA examines and renders elaborate findings on parameters such as injury and causal link.

k. It was earlier challenged before the DA and thereafter CESTAT that MTR is limited to withdrawal or reduction of ADD whereas scope of SSR is limited to mere extension to ADD. However, it was finally held that the DA is entitled to enhance the ADD in a MTR or SSR. Also, the DA conducts NSR, the scope of which is limited to determination of DM and therefore the DA recommends ADD to the extent of DM in NSR and does not even determine the IM. However the administrative review, the partial interim review and the SSR conducted by the US investigating authorities may not involve all the requirements laid down under Article 2 & 3 of the WTO Agreement.

l. The petition filed by DI was based on actual dumping during POI and actual injury to the DI during POI. The petition in case of Korea and Taiwan was based on actual dumping margin and actual material injury and further since the Authority is undertaking full investigation in respect of these imports consistent with requirements of Article 2 & 3 of the Agreement, it follows that the DA is fully entitled to recommend duties in respect of exempted companies from Korea and Taiwan.

m. The domestic industry has determined positive dumping margin with regard to exports by Hanwha.

n. Klassik should have exercised its right to seek a review or right to participate in the present investigation rather than making abusive statements. The party should in fact be declared as non cooperative importer.

o. DA issued a public notice and invited submissions from various parties. Nothing prevented the company for filing the submissions. Any party in India is free to file any kind of submissions. Also, the Authority provided adequate opportunity at the stage of initiation but the party preferred not to participate. The intention of party is clearly to hamper the process of investigation so no additional time should be given to such parties for filing QR.

p. The consumers are not going to be adversely impacted by imposition of duty. In the context of safeguard duty on DOP, the DG (safeguards) has investigated the impact of increase in price of DOP on the downstream industry and has concluded that the impact shall be negligible. Given that DOP and paste resin are consumed together, the conclusion drawn by the DG holds good for PUC as well. Also, the ADD merely addresses a practice of dumping which has caused injury to DI and so it’s impact on the consumer is not required to be determined.

q. Any producer is free to source the material from any party they wish to. The Authority has repeatedly held that the purpose of ADD is to eliminate injury caused to DI by the unfair trade practices of dumping to re-establish open and fair competition in the Indian market. Imposition of AD measures would not restrict imports from the subject countries.

E.3 Examination of Authority

32. The Authority has noted the submissions made by the domestic industry and interested parties and these issues have been examined under appropriate headings in this disclosure statement in accordance with the Rules.

33. The Authority notes that LCPMA, as an association of the Leather Cloth manufacturers, has made certain arguments in respect of various aspects of the investigation. Being a body representing the users of the product under consideration who are also importers of the subject goods, the association could have provided very useful information on entire imports to help the Authority in making its determination based on facts. However, notwithstanding the fact, in the interest of fairness and transparency, LCPMA’s submission with regard to the other aspects of the investigation examined along with the arguments made by other interested parties and have been addressed in these findings to the extent they are relevant with appropriate evidence.

34. The Authority holds that the purpose of imposing anti-dumping duties irrespective of demand- supply situation or number of domestic producers, 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. The consumers could still maintain two or even more sources of supply.

35. Some of the interested parties have raised the issue that those producers/exporters from the subject countries that were awarded zero duty in the original investigation should be excluded from the scope of these review investigations in view of the findings in WTO Appellate Body report Mexico-Beef and Rice. The domestic industry has contended that these producer/exporters cannot be excluded from the scope of the review. They have further contended that in India the sunset review includes a complete recalculation of the dumping and injury margins.

36. With regard to initiation notification, it is noted that the Authority initiated the investigation to review the need for continuation as well as to examine the request of domestic industry for enhancement of anti-dumping duties, in force. It is a consistent practice of the Authority to review all the aspects of the original investigation including scope of the domestic industry, dumping (including dumping margin), existence of injury to the domestic industry, injury margin. In addition to this, the Authority undertakes an examination of whether the expiry of such duty is likely to lead to continuation or recurrence of dumping and injury to the domestic industry. Interested parties can raise issues on any aspect with respect to any aspect of the case, including the existence of dumping, dumping margin, material injury to the domestic industry, injury margin, likelihood of continuation or recurrence of dumping and injury to the domestic industry in the event of revocation of duties, and causal link between the dumped imports and the injury to the domestic industry. During determination, the Authority considers whether a modification in the form of measures is required.

37. The domestic industry has claimed that Exporters which were awarded zero duty in the original investigation should not be excluded from the sunset review as India by practice conducts full midterm and full sunset reviews which focus on existence, degree and effect of dumping and the Authority determines dumping margin in respect of actual exports, and dumping margin and injury margin are calculated on the same lines as is done in the original investigations. The duty is varied depending on dumping margin and injury margin determined during the review period. It has also been contended by the petitioner that the petition in case of Korea and Taiwan is based on actual dumping and actual material injury and further since the Authority is undertaking full investigation in respect of these imports consistent with requirements of Article 2 & 3 of the Agreement, it follows that the Authority is entitled to recommend duties in respect of these companies. On the other hand, it has been contended by the other interested parties comprising exporters and importers that in case the dumping and injury does not exist, it cannot continue or recur. It has also been contended by them that in the original investigation carried out by the Authority, it was found that the three Exporters i.e. Hanwha Chemical Corporation Korea RP, LG Chem Korea RP and Formosa Plastic Corporation, Taiwan, were not dumping or causing injury to the domestic industry and these exporters should not come in the preview of present sunset review as investigations should have been terminated against them during original investigations. It has also been contended by them that the level of test of likelihood of recurrence of dumping and injury to these exporters should be different from those exporters who were found to be dumping in the original investigation.

38. The matter has been examined and it is noted that the WTO Appellate Body clarified in its report that Article 5.8 of the WTO ADA requires an investigative Authority to terminate the investigation in respect of an exporter found to have a de minimis margin in an original investigation and that the exporter consequently must be excluded from definitive antidumping measures and such exporters cannot be subject to administrative and changed circumstances reviews. The Authority notes that where an exporter awarded zero duty in an original investigation is found to be dumping and the same is found to be causing injury to the domestic industry, then duties must be imposed considering the dumping margin and injury margin found in the present review investigation period. Since the WTO Agreement on anti dumping (ADA) allows WTO members to impose duties to counteract dumping which is injuring the domestic industry, the Appellate Body decision in the aforementioned report needs to be construed as not permitting imposition of anti dumping duty on such exporters without a positive finding of dumping within the meaning of Article 2 of the ADA and injury to the domestic industry within the meaning of Article 3 of the ADA. Therefore, so long as the Authority has followed the relevant requirements of Article 2 and Article 3 of the ADA, even when the present investigation is a sunset review investigation, it is appropriate to recommend anti dumping duty on such exporters after following the requirements of Article 2 and 3 of ADA and by determining individual dumping margin and injury margin for the such exporters who are attracting zero anti-dumping.

39. Therefore, after examining the contentions of various interested parties it is held that it has been the practice of the Authority to conduct full investigation including determination of dumping margin injury and injury margin in respect of all the cooperating exporters including those who were earlier awarded de-minimis dumping margin or whose injury margin was negative. It is also noted that in those situations where the exporters were earlier awarded de-minimis dumping margin and have now been found to have de-minimis dumping margin or whose injury margin is negative, it is concluded that exports made by these companies are unlikely to be dumped and injure the domestic industry. Further, in those situations, where the dumping margin was de-minimis earlier, the Authority has considered the dumping margin now determined, for the purpose of likelihood of dumping and injury in the event of revocation of anti-dumping duty.

40. As regards confidentiality; the Authority notes that information provided by interested parties on confidential basis was examined with regard to sufficiency of the confidentiality claim as per its consistent practice and AD Rules. 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 nonconfidential version of the information filed on confidential basis.

41. As regards the form, quantum and currency denomination of the anti dumping duty, the Authority has followed its consistent practice in fixing appropriate level of the duty in US$ terms.

F. MARKET ECONOMY TREATMENT, NORMAL VALUE, EXPORT PRICE AND DUMPING MARGIN

F.1 Submissions made by exporters, importers and other interested parties/ other parties

42. Following submissions have been made by the exporters, importers and other interested parties/ other parties with regard to normal value, export price and dumping margin

a. The petitioner has treated even dumping margin as confidential.

b. Designated Authority should not take cognizance of the studies in various countries to ascertain the prices of the subject goods which are doctored and made to suit the requirements of the customer.

c. Domestic Industry has claimed different domestic prices of PVC Paste Resin in Korea RP for the same period. Even prices from same source differ. Study conducted by Domestic Industry shows prices almost 73% higher than what has been claimed to be issued by Harriman Chemsult. Even Harriman Consult has reported two different prices for the same period and variation is almost 20. Domestic Industry appear to be fabricated, concocted, manipulated and has been prepared to claim high dumping margins.

d. DI has not provided copies of report issued by Harriman Chemsult which is in violation of Trade Notice No. 1/2013 dated 9th Dec. 2013. Report relied upon by Domestic Industry is sourced from a private consulting firm. This report is publically available and can be obtained by any party after payment of fee. Under such circumstances Domestic Industry should be asked to provide copies of Report issued by Harriman to us so that we may file our comments on the same.

e. VCM and PVC Paste Resin prices in Europe as mentioned in the petition are unreliable. As per the petition VCM in Europe almost 50% higher than what has been appearing in rest of the world. In case domestic market in Europe is fetching almost 70% higher prices of PVS paste than rest of the world, all producer would like to sell the goods to Europe. There appears to be basic flaw in the claims of the Domestic Industry with regard to cost of VCM and domestic prices in exporting countries

f. Claims of the Domestic Industry with regard to dumping from subject countries is baseless inflated and needs to be rejected.

g. Claims of the Domestic Industry with regard to dumping from LG Chem Ltd., are baseless inflated and needs to be rejected.

h. Even though Hanwha Corporation is involved in the exports to India, it is only involved in handling invoices for HCC and receives commission for handling service. HWC has no role as a trading company for the export sales to India.

i. Hanwha Corporation does not purchase the product under investigation from Hanwha Chemical Corporation nor resell it to customer. It means Hanwha Corporation does not have any role as a trading company for the export sales to India.

j. Out of 74 exports transaction, only 16 transactions were made through HWC against the payment of handling charges. Further, out of 5305 MT of exports to India, 995 MT was sold through HWC, which is less than 20% of the total subject goods exported to India during POI. No exports were made through HWC after May’ 2014

k. In the recent sunset review finding of PVC Suspension resin, all the transaction of exports to India by HCC were made through HWC and this view was of joint submission was well accepted the Authority.

l. HCC records the inventory movement between the factories as transfer-in and transfer-out in its inventory ledger. The value is calculated by the weighted average unit price of beginning value and production value.

m. No deficiency letter received from the Authority by HCC. Since more than 7 months have elapsed, the company presume that the information is complete.

n. DI have claimed exorbitant levels of dumping margins which shows there are fallacies in the claim of normal value, export price and the method of comparison. Dumping margins should be based on the data filed by the exporters and not otherwise.

o. The cumulative assessment in regard to Russian import is unreasonable, as imports from Russia is insignificant and dumping margin de minimis. Such grounds as de minimis dumping margin and insignificance of import are usually a sufficient warranty for termination of investigation in regard of a subject country or for repealing the measure on goods originating from that country (ex: EU Council Regulation 1279/2007 on repealing the anti-dumping measures on certain iron and steel ropes and cables originating in Thailand and Turkey.

F.2 Submissions made by Domestic Industry

43. Following submissions have been made by the domestic industry with regard to standing and scope of the domestic industry

a. China is a non-market economy. It has been treated so by European Union and United States in the past. No country has granted market economy country status to China after following detailed evaluation procedure and examination. In India also, the Designated Authority has treated China as non-market economy. The Designated Authority has treated China as nonmarket economy in practically all the investigations initiated against China after the amendment dated 31st May, 2002.

 b. AD Rules have prescribed certain conditions that have to be satisfied in order to establish the claim of market economy treatment. Each and every condition must be fulfilled by an intending exporter in order to claim market economy treatment.

c. In the present case, Normal Value cannot be determined on the basis of price or constructed value in a market economy third country for the reason that the relevant information is not publicly available

d. Hanwha Chemicals (HCC) is not entitled for individual DM because they are not the exporter in the present case. The exporter in this case is Hanwha Corporation (HWC). Further, the response has stated that the commercial invoices in case of goods produced by HCC were issued by HWC so HWC is the exporter of PUC. So, individual DM cannot be assigned to HCC without QR of HWC.

e. HCC has claimed to have paid commission to HWC. If HWC is the exporter of the PUC, who has issued commercial invoice to Indian customers, there has to be sales and purchase transactions between HCC and HWC. There cannot be a commission in such cases. Commission to HWC could have been paid only when the commercial invoices for exports to India were issued by HCC and such sales were assisted by HWC. However, in the instant case, HWC has issued commercial invoice to Indian importers and therefore it must have purchased the goods from HCC and sold the same to Indian importers. In the final findings of SSR Investigation in PVC Suspension Grade from Taiwan, China PR, Indonesia, Japan, Korea RP, Malaysia, Thailand and USA, the Authority examined that HWC was raising invoice on Indian Exporters without purchasing the subject goods from HCC. However, during verification, it was found that the Korean customs authorities in that case named HWC as exporter and HCC as producer.

f. DI has referred to the prices quoted in the HarimanChemsult report for determining normal value of PUC in Korea RP and Europe. HarimanChemsult regularly reports the prices of PUC and such prices constitute reasonable, accurate and adequate information for determination of normal value. Therefore these prices may be considered for determination of normal value of Korea and Europe.

g. DI had earlier got a study done about the prices of PUC in the domestic market of Taiwan where they attempted to collect evidence of the prices in the domestic market of Taiwan. DI has been able to get the selling price in the domestic market of Taiwan for the period 2012-13. The petitioner has adjusted the VCM price for determination of normal value for the period of investigation.

h. Dumping margin has been determined considering the normal value and export price. The comparison made must be considered fair comparison. Both the normal value and export price have been determined at ex-factory level.

i. The normal value is determined on the basis of the cost of DI which is business sensitive information. So disclosure of DM would result is disclosure of normal value. Even the exporters have claimed information such as normal value and export price as confidential.

j. DI has sought protection only against dumped imports and ADD has been imposed only when the DA has found positive DM. In fact, DA did not recommend duty on exports made by number of companies in respect of Korea/Taiwan on finding that the DM is de-minimus.

k. DI has provided various methodologies for determination of normal value, study being one of them. All the methodologies proved dumping of PUC from subject countries. The study was used to determine normal value of Taiwan and Korea.

l. The Authority applies prevailing exchange rates for the purpose of determination of DM and IM. The exchange rate would have protected DI and would have resulted in improvement in profitability. On the contrary, the profitability of DI has declined, which shows that DI is suffering from dumping.

m. LG Chem, Korea and HCC, Korea have responded however, none has furnished information pertaining to related companies in other subject countries. HCC has a wholly owned subsidiary in China, Hanwha Chemical (Ningbo) Co. Ltd. which produces subject goods. Similarly, LG Chem has a subsidiary in China as well i.e. Tianjin LG DAGU Chemicals Co. Ltd. which also produces the subject goods. These producer/exporters have not filed QR in the present investigation. The current investigation being an SSR investigation, DA is required to determine whether cessation of ADD would lead to likely of dumping and injury to DI. Therefore, it is important for DA to determine likely dumping by an exporter. Even though the exporter has not exported PUC, it can be easily implied that this is due to ADD in force and in the event of cessation of ADD the exporter would in all likelihood resume its exports to India.

n. Two conditions precedent must be satisfied before DA can adopt the cost of production on the basis of records maintained by the company. Such conditions precedent includes a major condition that such costs should reasonably reflect the costs associated with production and sale of PUC.

o. None of the responding exporters have fully replied to the question with regard to valuation of VCM.

p. Hanwa didn’t provide information related to valuation of VCM and LG stated that they do not purchase inputs from any related parties. However, it is difficult to accept such response since the related party of LG namely Tianjin LG Bohai Chemicals Co Ltd, Chins is a manufacturer of VCM.

q. VCM is a tradable commodity and hence every VCM and PVC producer has option to either convert VCM to PVC or sell in the market as VCM.

r. There are vital defects in the QR and the exporter has cautiously decided not to provide relevant information. The DA is obliged to seek clarification only with regard to QR filed and if some minor clarifications are required. The opportunities for clarification or rectifying deficiencies cannot be used to file complete QR.

s. The legal submissions are filed by both Hanwha Chemical Corporation (HCC) and Hanwha Corporation (HWC) however; the QR is only filed by Hanwha Chemical Corporation. HWC has no role as a trading company for the export sales to India. DI fails to understand that if the opposing interested party claims Hanwha Corporation as not a trader and only invoice handling agency then how it is being treated as an interested party to file written submissions. As HWC has not filed a QR but has filed WS clearly indicated the unwillingness of the party to provide information and therefore should be considered as non cooperative.

F.3 Examination of the Authority

44. Under section 9A (1) (c) normal value in relation to an article means:

(i) The comparable price, in the ordinary course of trade, for the like article, when meant for consumption in the exporting country or territory as determined in accordance with the rules made under sub-section (6), or

(ii) when there are no sales of the like article in the ordinary course of trade in the domestic market of the exporting country or territory, or when because of the particular market situation or low volume of the sales in the domestic market of the exporting country or territory, such sales do not permit a proper comparison, the normal value shall be either

(a) comparable representative price of the like article when exported from the exporting country or territory or an appropriate third country as determined in accordance with the rules made under sub-section (6); or

(b) the cost of production of the said article in the country of origin along with reasonable addition for administrative, selling and general costs, and for profits, as determined in accordance with the rules made under sub-section (6);

45. The Authority sent questionnaires to the known exporters and importers from the subject countries, and India, advising them to provide information in the form and manner prescribed. However, barring below mentioned producers, exporters and related importers, none of the producer/exporter from subject countries and importers from India have cooperated in this investigation by filing their Questionnaires’ responses. The questionnaire response has been filed by the following companies:

a. M/s LG Chem, Korea RP

b. M/s Hanwa Chemicals, Korea RP

DUMPING MARGIN DETERMINATION FOR PRODUCERS AND EXPORTERS FROM KOREA RP

46. The Authority notes that the product under consideration i.e. PVC paste resin comprises of various grades which have technical characteristics to suit to different applications. The cost and price variation band amongst different grades of co-operative producers/exporters in Korea RP were noted to be in range of almost 15-20%. Since information on specific grades on cost and price exported to India and identical ones sold in domestic market were available and verified, a grade to grade comparison to evaluate dumping margin has been undertaken and adopted in case of cooperative producers/exporters.

LG CHEM LTD., KOREA RP

47. M/s LG Chem Ltd., Korea RP, one of the producers/exporters of the subject goods has exported *** MT of 6 grades of the product under consideration during POI to India directly and *** MT through M/s Uniplas, UAE. As a separate response has not been filed by M/s Uniplas, UAE as an exporter of the subject goods, only direct exports of M/s LG Chem have been considered for individual determination.

48. Further PA1302 claimed as a grade of the subject goods sold in the domestic market and also exported to India has been excluded both from domestic and export sales as the same being a copolymer is not within the scope of the product under consideration.

Normal value

49. LG Chem Ltd., Korea RP has sold *** Kg (*** MT) of the subject goods during the POI in the domestic market, comprising of 15 grades, i.e. LK170, LP010F, LP090, LP170, LP170G, LP170L, LP170T, PB1120, PB1200, PB1202, PB1302, PB1752, PB900, PE1311 for a value of *** KRW. The total domestic sale of 6 grades of PUC exported to India is *** Kg (*** MT) for a value of *** KRW.

50. For computing the normal value, grade-wise, the sufficiency test is undertaken separately for all grades. The “ordinary course of trade” test has been carried out month-wise as well for grade to grade to determine the Normal Value of those 6 grades exported to India on the basis of grade wise cost of production. Wherever 80/20 test leads to less than 80% profitable sales, to calculate normal value only the profit making domestic sales have been considered or else the entire sales is considered if profitable transactions are more than 80%. The adjustments on account of freight expenses, credit expenses and packing expenses as verified have been considered. The weighted average adjustments considered are *** KRW/Kg, *** KRW/Kg and *** KRW/Kg respectively. The weighted average normal value of 6 grades has been computed as *** US$/MT.

Export Price

51. M/s LG Chem Ltd. has exported *** Kg (*** MT) of subject goods of 6grades (LP170, LP170G, PB1202, PB1302, PB1752 and PE1311) to India during POI. PA 1302 (*** Kg), which is a Non-PUC has not been considered for the dumping margin and injury margin determination. Out of total exports to India by LG Chem Ltd., excluding grade PA 1302, *** MT has been exported to India through M/s Uniplas International Est, UAE, which constitutes 1.6 % of total exports of PUC to India. M/s Uniplas International Est, UAE, has not filed Exporters Questionnaire response and therefore only direct exports by M/s LG Chem Ltd., have been considered for individual dumping margin determination.

52. The CIF prices of the above 6 grades of the subject goods exported during POI in unit “US$/MT” are ***, ***, ***, ***, ***, *** respectively, and weighted average CIF price is *** US$/MT. The adjustments on account of Inland Freight, Ocean Freight, Credit Expenses, Bank Charges, Overseas Insurance, Customs Agent Fee and packing Expenses have been verified and adjusted. The ex- factory export price of the above six grades of the subject goods in “US$/MT” comes ***, ***, ***, ***, *** and *** respectively and the weighted average ex- factory export price is computed as *** US$/MT.

Dumping Margin

53. The Authority notes that the product under consideration i.e. PVC paste resin comprises of various grades which have technical characteristics to suit to different applications. The cost and price variation band amongst different grades of co-operative producers/exporters in Korea were noted to be in range of 15-20 %. Since information on specific grades on cost and price exported to India and identical ones sold in domestic market were available and verified, a grade to grade comparison to evaluate dumping margin has been undertaken and adopted in case of cooperative producers/exporters. For residual/ non cooperative producers/exporters for Korea, the highest Normal Value as per cooperating producers/exporters response and least export price has been adopted.

54. The Dumping Margin for direct exports has been calculated grade-wise and month-wise on a transaction- to- transaction basis. The weighted average dumping margin has been computed as *** US$/MT (*** %).

HANWHA CHEMICAL CORPORATION (HCC), KOREA RP

Normal Value

55. M/s. Hanwa Chemical Corporation (HCC), the producer/exporter, during the POI has sold 12 grades of the subject goods i.e. (EL102, EL103, EM2070, EM3090, KH10, KH31, KH60, KL10, KL31, KL701, KM31 and KM60) in the domestic market for a total quantity of  *** MT and value of *** KRW (US$ ***). Out of these 12 grades i.e. 3 grades KH31, KL31 and EM3090 were exported to India for a total quantity of *** MT with a total CIF value of *** US$ during POI. The producer/exporter provided grade wise cost of production (monthwise) for POI of all the 12 grades. The domestic sales of 3 grades exported to India meet the sufficiency test separately during the POI. The OCT has been carried out grade wise and month wise on the basis of the grade wise verified cost of production undertaken by the verification team. Wherever 80/20 test leads to less than 80% profitable sales, to calculate normal value only the profit making domestic sales have been considered or else the entire sales is considered if profitable transactions are more than 80%. The ‘Normal Value’ has thus been computed grade wise and month wise. Adjustments on Inland Freight, Credit Expense and Packing Cost claimed were verified and allowed. The weighted average Normal Value of the 3 grades exported to India comes to ***$/MT (KH31), ***$/MT (KL31) and *** $/MT (EM3090) and the overall weighted average Normal Value being *** $/MT.

Ex-factory Export Price

56. The Producer/ Exporters has exported *** MT of 3 grades KH 31, KL 31 and EM 3090 to India during POI at a CIF value of *** USD. Adjustments an account of commission paid to Hanwha corporation, Inland Freight, Ocean Freight, Marine Insurance, Handling Charges, Domestic brokerage bank Charges, credit expense & packing cost have been claimed. The CIF of the above 3 grades is ***, *** and *** $/MT respectively. The ex-factory export price for the 3 grades is computed as ***, *** and *** $/MT respectively. Out of the total *** MT exported to India during POI, for *** MT document handling services of Hanwa Corporation have been used on an agreed fixed handling charge. The same has been also considered for adjustment on export price to evaluate ex-factory export price. The weighted average ex-factory export price comes to *** $/MT.

57. Dumping Margin the Authority has undertaken grade to grade comparison for evaluation of dumping margin on a monthly basis. The individual dumping margin for the 3 grades i.e. EM 3090, KH 31 and KL 31 is evaluated as ***, *** and *** $/MT respectively. The weighted average Dumping Margin is computed at *** $/MT (*** %).

DUMPING MARGIN FOR NON- COOPERATING PRODUCERS AND EXPORTERS FROM KOREA RP

58. For working out dumping margin in respect of subject goods for the residual producers and exporters from Korea RP, highest normal value and least export price as available from cooperative exporters from Korea RP have been adopted.

DUMPING MARGIN DETERMINATION FOR PRODUCERS AND EXPORTERS FROM CHINA PR, TAIWAN, MALAYSIA, THAILAND, RUSSIA AND EUROPEAN UNION

Normal Value

59. Para 7 of Annexure I of the AD Rules provides that

“In case of imports from non-market economy countries, normal value shall be determined on the basis of the price or constructed value in the market economy third country, or the price from such a third country to other countries, including India or where it is not possible, or on any other reasonable basis, including the price actually paid or payable in India for the like product, duly adjusted if necessary, to include a reasonable profit margin. An appropriate market economy third country shall be selected by the designated Authority in a reasonable manner, keeping in view the level of development of the country concerned and the product in question, and due account shall be taken of any reliable information made available at the time of selection. Accounts shall be taken within time limits, where appropriate, of the investigation made in any similar matter in respect of any other market economy third country. The parties to the investigation shall be informed without any unreasonable delay the aforesaid selection of the market economy third country and shall be given a reasonable period of time to offer their comments.”

60. TheAuthority notes that China has been treated as a non-market economy country subject to rebuttal of the presumption by the exporting country or individual exporters in terms of the AD Rules. As per Paragraph 8 of Annexure I of the AD Rules, the presumption of a non-market economy can be rebutted, if the exporter(s) from China PR provide information and sufficient evidence on the basis of the criteria specified in sub paragraph (3) of Paragraph 8 and establish the facts to the contrary. The co-operating exporters/producers of the subject goods from People’s Republic of China are required to furnish necessary information/sufficient evidence as mentioned in sub-paragraph (3) of paragraph 8 in response to the Market Economy Treatment questionnaire to enable the Authority to consider the following criteria as to whether:

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

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

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

 the exchange rate conversions are carried out at the market rate.

61. At the stage of initiation, the Authority proceeded with the presumption by treating China PR as 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 nonmarket 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 their country to provide the relevant information. However, none of the Chinese producers/exporters have filed any response.

62. The Authority notes that consequent upon the initiation notice issued by the Authority, none of the Chinese companies have filed exporter’s questionnaire response. Therefore, the Authority has not applied Para 8 of Annexure 1 to the Rules to the Chinese companies and has to proceed in accordance with Para 7 of Annexure- I to the Rules. According to these Rules, the normal value in China PR can be determined on any of the following basis:

a. On the basis of the price in a market economy third country, or

b. The constructed value in a market economy third country, or

c. The price from such a third country to other countries, including India.

d. If the normal value cannot be determined on the basis of the alternatives mentioned above, the Designated Authority may determine the normal value on any other reasonable basis including the price actually paid or payable in India for the like product duly adjusted to include reasonable profit margin.

63. The Authority notes that for determination of normal value based on third country cost and prices, the complete and exhaustive data on domestic sales or third country export sales, as well as cost of production and cooperation of such producers in third country is required. Since no information with regard prices and costs prevalent in these markets could be accessed and also the opposing interested parties have provided no information with regard to an appropriate market economy third country, the normal value in respect China PR has been worked out on other reasonable basis, in terms of second proviso of Para 7 of Annexure 1 to the Rules. Thus, the Authority has constructed the normal value for the product under consideration imported during the POI from all subject countries excluding Korea RP and excluding China PR as follows:

(a) The best utilisation norm of the raw materials based on the best information available has been considered.

(b) Cost of raw materials and utilities, i.e. power has been referenced on the basis of international prices available through secondary sources.

(c) Conversion cost, SGA expenses and interest have been considered on the basis of the best information available.

(d) 5% of cost of sales excluding interest has been allowed as a reasonable profit.

64. Accordingly, the Constructed Normal Value computed at ex-factory level for Taiwan, China PR, Malaysia, Thailand and Europe Union have been determined as *** US$/MT, *** US$/MT, *** US$/MT, *** US$/MT and *** US$/MT respectively.

Export Price

65. As none of the exporters from any of the subject countries except Korea RP has provided any information that can be used for determination of the export price, the Authority has determined the export prices for all exporters from these subject countries on the basis of CIF price of imports into India as per DGCI&S. Accordingly, export prices from the China PR are have been calculated on the basis of CIF price of product with applicable adjustments for Ocean freight, Marine insurance, Port expenses, Inland transportation and Bank Charges, have been made to arrive at the ex-factory export price. Accordingly, the net export price for Taiwan, China PR, Malaysia, Thailand and Europe Union are determined as *** US$/MT, *** US$/MT, *** US$/MT, *** US$/MT and *** US$/MT respectively.

66. Since none of the producers/exporters from these subject countries has responded by filing the questionnaire response and no grade wise information is available, the Authority does not find it feasible to undertake grade to grade comparison and therefore has not undertaken the same for comparison and evaluation of Dumping/Injury margin and therefore has adopted a weighted average approach by adopting constructed Normal Value and ex- factory export price evaluated as per DGCI&S data as mentioned in concerned paragraphs.

67. The Authority further notes that there have been no imports of the subject goods from Russia during POI and even Post POI. M/s. RusVinyl, Russia and the Government of Russsia have submitted the same and mentioned that subject goods in Russia are being largely catered to their domestic market and exports to India is very limited. Thus dumping margin for Russia has been treated as de minimis.

Determination of Dumping Margin

68. Considering the normal values and net export prices as determined above, the dumping margins have been determined as follows:

69. The above evaluation indicates that the subject goods continue to enter the Indian market, from subject countries, at dumped prices and that the margin of dumping is significant enough.

METHODOLOGY FOR INJURY DETERMINATION AND EXAMINATION OF INJURY AND CAUSAL LINK

G.1 Submissions made by the exporters, importers and Other Interested Parties/ other parties

70. Following are the submissions made by exporters, importers and other interested parties/ other parties:

a. There is improvement in all the injury factors and economic parameters of the DI. The inference makes it crystal that there is no current or likely injury. The capacity, production, capacity utilization and sales of the domestic industry have increased. Productivity has improved.

b. Volume of imports from subject countries has declined over the injury investigation period. Also, we request the Authority to collect import information as per DGCI&S for the purpose of present investigation.

c. Market share of the petitioner has increased in the POI as compared to base year and that of the subject countries have declined

d. There is a huge demand supply gap for the subject goods in India. Even after the increase in capacity carried out by the DI, it is not sufficient to meet the needs of the domestic users. But having taken benefit of duties for so many years and nothing been done to meet even the substantial part of demand in the country, the DI shouldn’t be allowed to get away with this argument that they are not liable to take care of the demand supply gap situation in India

e. The inventory level appears to be of no nexus to the reality. Inventories increased in the POI when the market share of imports from subject countries has declined. Thus, in any case increase in inventory is not attributable to imports from subject countries.

f. There is no price injury on account of dumping. The injury to the DI has continued even after duties on various sources. If the injury were due to other sources like Norway and Mexico as contended by the DI, duty is imposed on such sources hence there is no justification for continuation of duties on subject countries in the present SSR. Price undercutting has been negative from China PR, Taiwan and Thailand during the POI meaning thereby no injury has been caused because of imports from these countries also. The major sources from countries like EU and Korea etc were at un-dumped rates as found by the Authority in the past.

g. Injury to the DI is being caused by other factors.

i. All major sources of imports are attracting AD duty but still DI claims injury being caused to it.

ii. Company is debt ridden and huge interest costs are borne by the company. Even though the petrochemical prices have heavily come down over the years, it couldn’t improve the situation

h. There is no continued injury to the petitioner nor is there any likelihood of injury on account of alleged dumping or alleged likelihood.

i. The only ground for likelihood of continuation and recurrence of dumping and injury by the DI is excess capacity in subject countries and attractiveness of the Indian market which has not been substantiated by evidence.

i. Price undercutting from China, Taiwan and Thailand has been negative. Imports from Russia has been nil throughout the injury period and POI.

ii. The third country export data relied upon by the DI to show a case of likelihood has some fundamental flaws in it which alone makes the data supplied by the unreliable. First of all, the data pertains to a wide range of products and subheading whereas the case of PUC in the present SSR is different. At least data pertaining to three subheadings i.e 390410, 390421 and 390422 have been relied upon. Secondly, the data pertains to an old period and the data have been picked as per the choice of the DI to suit their case, buttressing our argument that the price includes a wide range of PUC and non PUC items, the export price between countries abnormally varies.

iii. Imports from Russia has been nil throughout the injury period and POI. No justification for continuation of duties is established in such scenarios. This alone proves absence of likelihood red with past imports from Russia. Some information on export from Russia to world during 2013 is provided by the DI. The same is neither for POI nor for PUC as the data pertaining to 3 subheadings such as 390410, 390421 and 390422 have been relied upon by the DI.

iv. The world export data for subject countries are neither for POI nor for PUC and it has been provided selectively. Likelihood is falsely claimed on these bases and the same should be rejected by the Authority

j. the price of subject goods are amenable to crude/petrochemical prices and the crude prices have seen significant down falls in the past one year or so. This has resulted in reduction in prices of EDC which is the raw material for the subject goods. This has been to the huge benefit of Chemplast. However, no benefit of this has been passed on to the user industry since Chemplast enjoy a monopolistic market in India and Chemplast is misusing anti dumping

k. On the contrary, the US dollar has appreciated significantly and cheap imports are not any reality. Price of crude meaning thereby raw material price of subject goods have declined significantly. The decline has been there through the POI and during the period thereafter. There has been a highly disproportionate passing on of benefits in terms of reduction in raw material prices vis-à-vis reduction in price of finished goods by Chemplast.

l. the Authority to work out a mechanism to associate any anti dumping duties, if at all to be continued, on subject goods with the price of Crude and USD rates so that the interest of user industry is taken care of 

m. Basis of 22% ROCE designed in the year 1986 for a specific Pharma industry when all parameters like interest rate and corporate tax were different cannot be termed as reasonable after 25 years in the year 2011. Designated Authority should adopt ROCE earned by the Industry when there was no allegation of dumping as reasonable profit margin and not 22% ROCE. 22% Return on capital employed gives undue protection to the domestic industry. Hon’ble CESTAT in the case of Bridge Stone Tyre Manufacturing & others vs. Designated Authority and CESTAT in M/S Hyosung Co. vs. Designated Authority, clearly shows that adoption of 22% ROCE has coloured the injury determination. It has inflated the price underselling and injury margin.

n. There is a huge gap between demand and supply of PVC Paste/Emulsion Resin India. An import into India is imperative. Any move to impose Anti-dumping Duty on this product will adversely affect competitiveness of the downstream industries.

o. Indian producers are operating at more than 95% capacity utilization. There is no volume effect on the Domestic Industry.

p. There is no justification in claim of the Domestic Industry with regard to the losses during the Period of investigation. Audit Reports of the various constituents of the Domestic Industry show otherwise.

q. The Domestic Industry is able to earn the Non-injurious Price hence not adversely affected due to imports.

r. Assertion of the Domestic Industry that there is huge surplus capacity in the subject countries is totally illogical.

s. Further extension of Anti-dumping Duty will not be in Public Interest as the same will adversely affect the downstream industry.

t. Even after no imposition of antidumping duty, Hanwha never tries to capture the Indian market by dumping or any other unfair trade practice.

u. VCM prices have fallen in far east countries but the Korean producers have not passed on the reduction to Indian consumers

v. EU producers prices of PVC Resin are 20% cheaper than that of Korean producers. Due to Anti dumping duty we are unable to import from EU

w. The Designated Authority has not taken into account the continuous depreciation of Indian rupee vs USD.

x. Anti dumping duty does not account for cross currency rate changes. Indian rupee has appreciated which has resulted in increase in price of good manufactured by KlassikLamitex thereby affecting export obligations

y. Anti dumping duty has not taken into account cross currency rate fluctuations. The Designated Authority has failed to recognize the inverse ratio between USD and commodity prices. Protection of upto 70% has been accorded to Chemplast.

z. The Designated Authority has out way and assumed static input prices. Chemplast has woven a web of lies by declaring a huge range of input prices to confuse the Authority.

aa. No integrated producer is set up for selling ethylene alone and chemplast get this raw material only if there is surplus with someone. The high cost of buying coupled with poor financial strength is the mail cause of losses to Chemplast.

bb. Chemplast does not have capacity to meet the demand of the product.

cc. If Chemplast is making world class products then they should export to China, Thailand, Europeetc and earn 30%-70% additional profits if the prices determined by Authority for these countries are correct. The Authority is unduly favouring Chemplast for last 15 years and there is no trade barriers in any for the countries.

dd. PVC resin is a basic chemical important product for manufacturing sector and that is why the government of India has imposed lower than peak custom duty on the product. This has been totally distorted by Anti dumping duty Authority by imposing tariff of upto 70%.

ee. The Authority is approaching at a pre determined mind. If the base year is 2013-14 when oil was above USD 100 how can they come to a conclusion in a situation when crude oil is below USD 30 per barrel.

ff. Chemplast has been given protection for almost 15 years even on countries with no imports. Unless there is a gap of few years how can facts be established.

gg. PVC is a global commodity and international prices are quite transparent. Why would Korean and Taiwan producers sell PVC in India at lower prices when they can fetch higher prices in their domestic market? Totally baseless claim of Chemplast.

hh. The cost of PVC in Europe is lowest but due to Anti dumping duty the cost of importing it has become exorbitant. Since Korea and Taiwan producers are not attracting Anti dumpingduty, they are able to sell the product at huge profits because their competition has been priced out of the market due to Anti dumping duty.

ii. Increase in raw material prices has led to increase in price of final product manufactured by Klassik and it has hampered the growth in the export makets.

jj. No economic benefit behind imposition of Anti dumping duty. The Designated Authority has failed to distinguish between normal commercial pricing and dumping practices which has resulted in punishing normal business such as Klassik

kk. Poor financial situation of Chemplast. The company sells PVC paste on advance basis to Indian customers which are reflective that its debtors are 0.56 months of sales.

ll. Chemplast does not have more than one week inventories and it is borne out by the fact that Chemplast is not even able to supply one truck at week’s notice to Klassik.

mm. Despite being the largest importers, the Klassik was denied the opportunity to file importer questionnaire response and comments on the petition. Requested to give 40 days time from Oral hearng to inspect the public file and provide comments on the same.

nn. The claim of likelihood and recurrence of dumping and injury are merely based on conjectures and have no nexus to the reality of the facts of the case and we deny any charge of likelihood of recurrence of dumping and injury in the event of expiry of present duties

oo. There is no causal link between the alleged dumping and injury to the DI. The AD duties on various sources including the subject countries is prevalent for more than a decade now and the DI is still making losses meaning there by the reason for injury to the DI are not alleged dumping but self inflicted other reasons. Moreover, the DI is yet not supplying various grades of subject goods nor they can meet any substantial portion of domestic demand and the user industry is forced to import the same from other countries but after paying unwarranted AD duties.

pp. The sunset review considering Russian import should have been stopped and Russia should have excluded from the list of subject countries right after the analysis of the Petition because from the document consists no evidence of dumping and a lack of evidence of material injury caused by import of PVC from Russia.

G.2 SUMBISSIONS MADE BY THE DOMESTIC INDUSTRY

71. Following are the submissions made by the domestic industry in this regard:

a. The demand of the product in the Country shows a positive movement throughout the injury period.

b. Despite the imposition of ADD on the subject goods, imports continue to enter the Indian market in significant volumes from countries attracting ADDs.

c. The market share of the dumped imports has increased over the period.

d. The imports from the subject countries are undercutting the prices of DI. Price underselling by subject countries is very high, as landed price of imports is much below the NIP of DI.

e. The landed price of imports is significantly below the cost of production of DI, throughout the injury period. Whereas the cost of sales increased over the injury period by 12%, there is no increase in net selling price. DI had to lower its prices even below the cost of sales from 2012-13 to the current POI in order to compete with extremely low prices of dumped imports.

f. DI is suffering significant deterioration in profitability and huge losses due to price suppression. This is despite the existing ADD.

g. DI has not added fresh capacities over the injury period. However, there has been a reallocation of capacities from battery separator resin & suspension resin to PVC Paste thereby increasing effective capacity available for PUC.

h. Demand for PUC is higher than what DI can produce and sell. Therefore, DI does not have any difficulties in selling the goods so long as its prices are competitive vis-à-vis imports. Since DI kept its prices matching to the import prices, the sales volumes and consequently production and capacity utilization improved over the period with a marginal decline in capacity utilization of DI during POI.

i. The profits of DI improved after imposition of ADD. The profitability however plummeted and DI started suffering financial losses once again in 2012-13. Even when the extent of losses was already so high in 2012-13, the losses suffered by DI further increased in the POI.

j. The price depression and suppression has led to steep decline in profits and DI suffered financial losses in the 2012-13, 2013-14 and the POI.

k. Production of PUC is a continuous process which cannot be stopped. Furthermore, either DI must align its prices with the changes in the import prices, or must lose the order. Given highly matured market, significant knowledge with the consumers with regard to prevailing prices being offered by different suppliers, the impact of offer made by the foreign producers immediately comes onto DI’s prices.

l. Profit before interest also declined significantly after its recovery in 2011-12, with PBT on domestic sales plunging into negative values during POI.

m. The cash profits of DI declined significantly during POI after minor recovery from previous dumping. DI has been suffering cash losses since 2012-13.

n. ROI improved after imposition of ADD. However it steeply declined in the 2012-13 causing injury to DI. DI is faced with negative returns during the POI.

o. DI had recently suffered injury from previously dumped goods and was on the course of recovery. But it is once again suffering injury as a result of dumping in the Indian market. This is due to the ADD losing its relevance due to increase in dumping of subject goods from exporters in subject countries which are exempt from ADD.

p. Market share of DI has increased whereas that of imports has declined. However, despite ADD in existence, the market share of dumped imports remained significant.

q. Employment level of DI has increased. Wages have shown normal increases. Further, productivity has consistently increased. These parameters are dependent on a number of other parameters and not reflective of impact of dumping on the domestic industry. Hiring & firing of employees is the last resort situation for DI.

r. Growth in terms of the price parameters is negative and miniscule for the ROCE.

s. The performance of industry has been severely affected by dumped imports. Performance of DI has significantly deteriorated in respect of profit, cash profits and ROI. Persistent dumping has resulted in depression of domestic prices causing erosion of profits.

t. Decline in profits of DI should not be regarded as inconsequential or insignificant adverse impact. Whereas profits, cash profits and ROI should have improved, the same has rather declined. This alone clearly establishes that the performance of DI is getting very severely impacted and is adverse.

u. The various parameters relating to DI collectively and cumulatively establish that DI has suffered material injury. Further, dumping and consequent injury is likely to continue and intensify further, should the current ADD ceases.

v. The dumping margins with respect to the subject countries in original investigation was not only above de-minimus but also substantial. The dumping margin for the current investigation period is substantially high. In the event of cessation of ADD, these exporters will get a greater opportunity to dump PUC into India, taking away the market share of DI.

w. Dumping margin in respect of LG Chem Ltd. and Hanwha Chemical Corporation from Korea RP and Formosa Plastics Corporation from Taiwan were de-minimus and therefore ADD at the rate of nil were recommended in respect of exports from these sources. However, DM in respect of exports being made by these exporters at present is significantly high. The estimates of normal value and export price made for this period clearly show existence of significant dumping margin in this period.

x. The imports from subject countries are showing the increasing trend even in the presence of ADD so there is all the probability that the volume would increase in the event of revocation of ADD. Considering the pace of increasing volume of imports at present, there is no reason to believe that the volume will decline in the event of revocation of ADD.

y. Producers in subject countries maintain huge capacities to produce subject goods, which is evident from the IHS report on Vinyls for the year 2014.

z. With the revocation of ADD, the volume is bound to increase further. Moreover, this probability would further intensify when their other markets have closed down.

aa. The Chinese and Russian producers are exporting huge volume of subject goods to third countries at dumped prices. In the event of revocation of ADD, these volumes are likely to get diverted to India and that too at significant dumped prices causing injury to DI.

bb. The Indian market for the PUC is highly price sensitive. The consumers decide their source, with the price being the foremost consideration. Such being the case, availability of such low priced imports from subject countries in the market would definitely cause an adverse impact over DI.

cc. The market share of subject countries is quite significant in spite of the existing ADD. In fact the market share of the imports has increased over the years with a mild decline during POI.

dd. DI is already suffering huge financial losses, cash losses and negative ROI. It is likely to suffer further insurmountable material injury in the event of cessation of ADD.

ee. There is no contraction in demand of PUC. Material injury is being caused to DI from dumped imports. There is no significant difference in the manufacturing process.

ff. Listed known other factors do not establish that injury has been caused by these other factors. Such being the case, the only inescapable conclusion is that the injury to DI has been caused by the dumped imports from subject exporters and subject countries.

gg. The volume of imports from producers in subject countries has been increasing and is significantly high.

hh. Imports from subject countries in general, are undercutting the prices of DI.

ii. The starting points for DI to price its product are – cost of inputs and price offered by foreign producers. Thus, if price offers by the foreign producers are too low compared to the price that DI works out based on its cost changes, the only option with DI is to offer a sub-optimal price. Price undercutting being caused by the dumped imports is preventing the domestic industry from increasing its prices.

jj. Deterioration in profits, return on capital employed and cash profits is directly a result of dumped imports

kk. The growth of DI became negative with regard to a number of price parameters.

ll. DI never claimed volume injury. Imports from subject countries have increased substantially in absolute terms. Subject imports are undercutting and underselling the prices of DI to a significant extent. The price undercutting is in spite of low prices already kept by DI. Imports are preventing the price increases that would have occurred in the absence of dumped imports. DI industry has deteriorated in terms of profits, return on investments and cash flow.

mm. Despite the imposition of ADD, imports continue to enter the Indian market in significant volumes from countries attracting ADD.. The imports are entering the Indian market from China at artificially higher prices which appear to avoid ADD. The exports from China customs after adding freight shows prices significantly below the prices reported in the Indian customs. The import price reported in Indian customs is artificially higher and the price reported in China customs is relevant and reliable for the present purposes.

nn. Despite ADD in existence, the market share of dumped imports remained significant and in the event of cessation of ADD, the market share of the imports from subject countries would increase. Also, there is adverse price effect of dumping on DI.

oo. The fact that consumption in India is higher than the capacities with the Indian producers may justify imports per se but not the dumping.

pp. DI is forced to set its prices considering the price offers of the leading foreign suppliers and disregard its cost consideration. Since the foreign producers are resorting to dumping, DI is forced to follow such dumped prices.

qq. If the DI price is comparable to the import price, DI product gets a preference before the consumers. Since DI is forced to align its prices to import prices, dumping from subject countries and other countries have had an adverse price effect on DI, which is clearly established by deterioration in performance of DI in respect of profits, ROI and cash flow.

rr. The purpose of determining price undercutting is to assess whether such dumped imports are causing injury to DI. It is required to determine whether imports are undercutting the domestic prices or whether the effect of imports was to otherwise depress or suppress the prices of DI in the market. Therefore negative price undercutting does not necessarily means no injury to DI.

ss. Huge interest costs are part of business operations and are required to be addressed accordingly. In fact, the DA grants 22% ROCE and therefore whether the company has high interest or low interest, the NIP does not get impacted. If the interest cost is high, the profit shall be low. And if interest cost is low, profit shall be high

tt. Even in the event of low volumes of imports reported during the POI of a SSR investigation, ADD can be continued. There are a number of instances where foreign authorities have continued the duty in the first and subsequent sunset reviews.

uu. The crude price has declined only after POI and therefore movement of Crude has no relevance in the present investigation.

vv. Devaluation of Rupee does not selectively impact the finished product prices. It impacts the raw material prices as well. In fact, the CESTAT had modified the currency from INR to US$ only because of appreciation of US$. If appreciation of US$ was the reason for converting the duties to INR, the same cannot become a ground for converting duties to INR. Further, DA had declined to recommend duties in INR in the matter of digital plates wherein it was clearly established that the US$ duty was overprotecting the industry.

ww. The information regarding domestic prices of PVC Paste Resin is based on Harriman Chemsult to indicate the prices of PVC paste in subject countries. It is third party information.

xx. Hariman Consult reports are the third party information and DI is not authorized to disclose the same. The payment for the information itself limits its access to the person paying for the information with the obligation of not sharing it with anybody.

yy. VCM and PVC Paste Resin prices in Europe are much higher.

zz. For exporters having no ADD, the present volume and price itself is the biggest evidence of likelihood.

aaa. DA has been applying 22% consistently. Authority granted 22% in those cases also where the actual return was higher.

bbb. DI provided information segregated only in respect of PUC and domestic operations. So the performance reported in the Annual Report with regard to different product is entirely immaterial.

ccc. DI is not able to earn the NIP. It is suffering loses throughout the injury period.

ddd. DI has provided evidence regarding surplus capacities in subject countries.

eee. There was significant price decline because of dumped imports. Thus, the contention of the party is incorrect that there prices of PUC have not declined.

fff. The investigation period in the present case ended in September 2014 and therefore the present crude oil prices has no relevance. In any case, the crude oil price has no relevance to the cost of production of PUC as it is not the raw material for production of PUC.

ggg. The company does not hold inventories since holding inventories has its own cost. The company liquidates inventories to the extent possible. The relevant point is not the level of inventories created by company but the adverse impact of dumping on DI and the prices at which DI is forced to sell its product.

hhh. As far as the export obligations are concerned, ADD cannot have any adverse effect, as GOI exempts import for export purposes. Despite exemption of ADD for export, if the company is suffering in exports because of changes in exchange rate, etc., it is due to entirely different factors unrelated to the present issue.

iii. DA has recognized the cross currency rate fluctuations. ADD once imposed remains in force for the period of 5 years. It can be reviewed from time to time. Other countries have recently extended ADD and CVD on several products which are significantly higher than the present level of dumping and subsidization despite the fact that the present margins are much lower. It is thus evident that the ADD imposed once remains in force unless party establishes the need for review and revision of duty.

jjj. The Authority is required to consider DI as it exists, and not under ideal conditions.

kkk. The mere fact that DI cannot cater to entire demand in the country does not mean that the DI should suffer. The purpose of ADD is not to restrict imports but to provide level playing field to DI. The foreign producers could meet the Indian demand by selling the product at reasonable price. The foreign producers were not required to resort to dumping in order to meet the Indian demand.

lll. DI product is well accepted and no party has any complaints about the quality of the product. ADD is no favor to a company or an industry. It merely addresses unfair trade practices.

mmm. Majority of products in India are at present having customs duty below peak duties. The fact that the product is attracting less than peak duty do not imply that the foreign producers are given a license to dump the material. On the contrary, given that the GOI has reduced the customs duty, these producers are eligible to export at a higher price. They are not required to resort to dumping and cause injury to the Indian industry.

nnn. The ADD is not a protection.

ooo. The demand for PUC in Korean and Taiwanese market is far above the capacities with the producers in these countries. It is these surplus capacities created by the foreign producers which are forcing them to resort for dumping. While they are charging a higher price for the product in their home market, they are exporting the product in Indian market at a lower price.

ppp. Nothing prevents the consumers from importing from any source. Nothing prevents foreign producers for selling the product at a price which does not constitute dumping price. In fact, given demand-supply gap, it should be easier for these producers to sell at fair prices in the Indian market. If the producers have not resorted the dumping, the Govt. would have not impose the duties. And if the producers have resorted to dumping, the consumer cannot now blame for the duty imposed.

qqq. The ADD does not apply on imports for exports. Such being the situation, how the present ADD could not have adversely impacted the growth of the company in the export markets.

rrr. Chemplast chooses to sell on cash basis and it is no way an inappropriate business policy. Merely because Chemplast has a policy to sell on cash basis, it does not imply that the company is not entitled to protection. In fact, the company selling on cash basis will not have poor financial position. In fact, it would have better financial position.

Examination by the Authority

72. In consideration of the various submissions made by the interested parties in this regard, the Authority proceeds to examine the current injury, if any, to the domestic industry before proceeding to examine the likelihood aspects of dumping and injury on account of imports from the subject country.

73. Article 3.1 of the WTO Agreement and Annexure-II of the AD Rules provide for an objective examination of both, (a) the volume of dumped imports and the effect of the dumped imports on prices, in the domestic market, for the like products; and (b) the consequent impact of these imports on domestic producers of such products. With regard to the volume effect of the dumped imports, the 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.

74. As regards the impact of the dumped imports on the domestic industry Para (iv) of Annexure-II of the Anti-dumping Rules states as follows:

“The examination of the impact of the dumped imports on the domestic industry concerned, shall include an evaluation of all relevant economic factors and indices having a bearing on the state of the Industry, including natural and potential decline in sales, profits, output, market share, productivity, return on investments or utilization of capacity; factors affecting domestic prices, the magnitude of margin of dumping actual and potential negative effects on cash flow, inventories, employment, wages, growth, ability to raise capital investments.”

75. For the examination of the impact of the dumped imports on the domestic industry in India, indices having a bearing on the state of the industry such as production, capacity utilization, sales volume, stock, profitability, net sales realization, the magnitude and margin of dumping, etc. have been considered in accordance with Annexure II of the rules supra.

76. According to Section 9A (5) of the Customs Tariff Act, anti-dumping duty imposed 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.

77. The present investigation is a sunset review of anti-dumping duties in force. Rule 23 provides that provisions of Rule 11 shall apply, mutatis mutandis in case of a review as well. The Authority has, therefore, determined injury to the domestic industry considering, mutatis mutandis, the provisions of Rule 11 read with Annexure II. Further, since anti-dumping duties are in force on imports of the product under consideration, the Authority considers whether the existing anti-dumping duties on the imports of subject goods from subject countries are required to be considered while examining injury to the domestic industry. The Authority has examined whether the existing antidumping measure is sufficient or not to counteract the dumping which is causing injury.

Cumulative Assessment

78. Annexure II to the Anti Dumping Rules provides that in case the imports of a product from more than one country are being simultaneously subjected to anti-dumping investigations, the Designated Authority will cumulatively assess the effect of such imports, in case it determines that:-

"(a) the margin of dumping established in relation to the imports from each country is more than two percent expressed as percentage of export price and the volume of the imports from each country is three percent of the imports of the like article or where the export of the individual countries is less than three percent, the imports cumulatively accounts for more than seven percent of the imports of like article and (b) cumulative assessment of the effect of imports is appropriate in light of the conditions of competition between the imported article and the like domestic articles."

79. In this regard, the Authority notes that criteria for de minimis dumping margin and negligible volume of imports are not relevant for the purpose of determining likely hood of dumping margin from subject countries. However, for the purpose of cumulative assessment, undumped imports from producers from subject countries have been taken out for the purpose of injury analysis.

80. Further, the goods manufactured by the producers from the subject countries are like articles inter se and in comparison to the product manufactured by the domestic industry. A cumulative assessment of the effects of imports from the subject countries is appropriate since the exports from the subject countries directly compete with the like goods offered by the domestic industry in the Indian market. Commons parties are using the goods from the different sources and from the Indian domestic industry interchangeably, and the channels of sale are similar.

81. For the purpose of current injury analysis, the Authority has examined the volume and price effects of dumped imports of the subject goods on the domestic industry and its effect on the prices and profitability to examine the existence of injury and causal links between the dumping and injury, if any. The Authority has examined injury to the domestic industry by considering information relating to M/s. ChemplastSanmar Limited constituting domestic industry under the Rules. Accordingly, the volume and price effect of dumped imports have been examined as follows:

Volume Effect of dumped imports and Impact on domestic Industry

Volume Effect

Demand and market share

82. TheAuthority has considered the transaction-wise import data provided by DGCI&S for the assessment of volume and value of imports from the subject countries and other countries. Demand for the product under consideration has been determined as the imports of the product under consideration into India from all countries and sales of all domestic producers in India.

83. The Authority notes that demand for the subject goods has shown consistent increase over the injury period.

84. The market share in demand of domestic industry and imports from subject countries are as under

85. The above data indicates that the market share of the domestic industry has increased. The market share of subject countries increased in 2012-13 but declined thereafter.

Import volumes and share of subject country:

86. With regard to 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. Annexure II (ii) of the anti dumping rules provides as under:

“While examining the volume of dumped imports, the said Authority shall consider whether there has been significant increase in the dumped imports either in absolute terms or relative in production or consumption in India”

87. The import volumes for the injury period are as under:

88. From the above, the Authority notes that:

a. The imports from subject countries have increased since base year.

b. The share of imports of the product under consideration from subject countries out of the total imports is quite huge throughout the injury period including the POI.

c. Imports from subject country as a whole have remained significant in relation to consumption in India.

PRICE EFFECT

Price effect of dumped imports and impact on domestic industry

89. 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. For the purpose of this analysis, the cost of production, net sales realization (NSR) and the non-injurious price (NIP) of the domestic industry have been compared with landed value of imports from the subject country. A comparison for subject goods during the period of investigation was made between the landed value of the dumped imports and the domestic selling price in the domestic market. In determining the net sales realization of the domestic industry, taxes, rebates, discounts and commission incurred by the domestic industry have been adjusted. The price underselling is an important indicator of assessment of injury; thus, the Authority has worked out a non-injurious price and compared the same with the landed value to arrive at the extent of price underselling. The non-injurious price has been evaluated for the domestic industry in terms of Annexure III of the Anti-dumping Rules. The position is as follows:

Price Undercutting and Underselling

90. The Authority has made price undercutting and price underselling analysis without antidumping duty after evaluating the Landed Value of inputs under the duty free imports as below:

 

 91. The above data indicates price undercutting, without taking into account the antidumping duty in force, is significant. It is noted after the analysis that the prices of subject goods from subject countries as a whole are undercutting the prices of domestic industry during the injury period.

Price Underselling

92. The price underselling is an important indicator of assessment of injury; thus, the Authority has worked out non-injurious prices of the subject goods and compared the same with the landed values of the imported goods to arrive at the extent of price underselling. For examining the underselling effects of the dumped imports the landed value of imports, without taking into account the antidumping duty in force, has been compared with the Non Injurious Price determined

93. The Authority notes that during the POI, the price underselling was positive for all the subject countries.

Price suppression and depression effects of the dumped imports:

94. To examine whether the domestic prices are suppressed or depressed due to the presence of dumped imports from subject country the trend of weighted average sales realization of the domestic industry has been compared with the cost of sales and the landed values.

95. From the above information, the Authority notes that there was significant increase in cost of sales over the injury period. However, the domestic industry was unable to increase its selling price due to low price imports. Infact the domestic industry was forced to reduced its prices. This shows price suppression and price depression effect whereby the domestic industry has not been able to increase the selling price commensurate with increase in the cost of sales and infact had to reduce its selling prices despite increase in cost.

Examination of Economic Parameters relating to Domestic Industry

96. Annexure II to the Antidumping Rules requires that a determination of injury shall involve an objective examination of the consequent impact of these imports on domestic producers of such products. 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. The various injury parameters relating to the domestic industry are discussed below.

Capacity, production, capacity utilization and sales

97. Performance of the domestic industry with regard to production, sales, capacity and capacity utilization are as follows:

98. It is seen from the above table that the domestic industry enhanced capacities in the year 2013-14 and POI. The demand for the product under consideration in the Country has increased significantly over the injury period.

99. The production and sales of the domestic industry have increased throughout the period. Capacity utilization of the domestic industry has declined. The domestic industry explained that with the increase in the capacities, the domestic industry has targeted more production. It is noted that the demand for the product under consideration is higher than what the domestic industry can produce and sell. Therefore, the domestic industry does not have any difficulties in selling the goods so long as its prices are competitive vis-à-vis imports. The domestic industry has contended that since the domestic industry kept its prices matching to the import prices, the sales volumes and consequently production and capacity utilization improved over the period.

Inventories

100. From the information given below, the Authority notes that the inventory position of domestic industry has increased during period of investigation.

Profits, return on investment and cash flow

101. Performance of the domestic industry with regard to profits, return on investment and cash flow over the injury period was as follows:

102. From the above information, the Authority notes that Profit/Loss and profitability of domestic industry has deteriorated throughout the injury period. Whereas both cost of production and selling price increased over the period, the increase in the cost of production was more than the increase in selling price. Resultantly, the profitability of the domestic industry steeply deteriorated over the injury period. The domestic industry started suffering financial losses since 2012-13. Similarly, the cash profits and return on capital employed also followed the same declining trend.

Employment, wages and productivity

103. From the information given below, the Authority notes that the employment position of the domestic industry and wages paid have increased during period of investigation as compared to base year. Productivity in terms of production per day and production per employee has increased over the period.

Magnitude of dumping

104. The Authority notes that the dumping margin of the imports of the subject goods from the subject countries except Russia is not only positive but also significant.

Growth

105. The Authority notes that the growth of domestic industry in terms of sales, production, and market share was positive whereas growth in respect of profits, return on investment and cash profits was negative.

Ability to raise Capital Investment

106. The Authority notes that given rising demand of the product in the country, the domestic industry has made investments in enhancing capacity. However, despite these investments, the performance of the domestic industry has deteriorated considerably and further investment may get adversely affected.

107. Further, the above volume and injury parameters during POI are summarized and tabulated as below:

PVC Paste Injury Parameters

108. The Authority notes that though production, sales, Market share of Domestic Industry and capacity during the period of injury have increased, the capacity utilization has decreased. Profitability on account of ROI, PBIT, PBT, and cash profits has decreased. Also there has been adverse impact on other price parameters related to price suppression and depression. While price undercutting is Positive for Korea RP, Malaysia, Thailand, European Union, it is negative for Taiwan, China PR, however on cumulative assessment the price undercutting is positive. Further on comparison with NIP, the price underselling is noted to be positive for all countries individually and even collectively.

Conclusion on injury

109. It is thus seen that there has been a significant increase in the volume of dumped imports from subject countries in absolute terms. The imports have remained significant in relation to consumption and production of the product in India. Imports have thus increased both in absolute terms and in relation to production and consumption in India. The dumped imports are undercutting the prices of the domestic industry in the market. Dumped imports have had significant adverse price effect in terms of price suppression and depression. Effect of dumped imports has been to prevent price increase which otherwise would have occurred, to a significant degree. Imports have prevented the domestic industry from raising its prices in proportion to cost increases. The domestic industry is suffering significant price underselling. The dumping margin determined by the Authority is quite significant. With regard to consequent impact of dumped imports on the domestic industry, it is noted that dumped imports from subject countries have adversely impacted the performance of the domestic industry in respect of inventories, profits, cash profits and return on investment. Inventories with the domestic industry increased. Further, as a result of significant price undercutting and suppression, profitability of the domestic industry deteriorated so significantly that the domestic industry was suffering significant financial losses. Further, the domestic industrysuffered cash losses and negative return on investment during the POI. The Authority holds that the domestic industry has suffered material injury.

Causal Link

110. The Authority examined whether other known factors could have caused injury to the domestic industry as follows:

Volume and prices of imports from third countries

111. TheAuthority notes that during POI, imports of the subject goods from countries other than the subject country are either attracting anti-dumping duty or are de minimus.

Contraction of demand and changes in the pattern of consumption

112. TheAuthority notes that there is no contraction in the demand during injury period. Demand for the product has increased over the injury period.

Developments in technology

113. TheAuthority notes that none of the interested parties have furnished any evidence to demonstrate significant changes in technology that could have caused injury to the DI.

Conditions of competition and trade restrictive practices

114. TheAuthority notes that the subject goods are freely importable. The domestic industry is the sole producer of the subject goods.

Export performance of the domestic industry

115. The export performance of the domestic industry is not relevant since price and profitability in the domestic and export market has been segregated by the Authority for the purpose of assessing injury to the domestic industry.

Performance of other products

116. Claimed injury to the domestic industry is on account of product under consideration. The petitioner has provided information which pertains only to the product under consideration. Thus, the financial information provided with regard to product under consideration clearly shows the position of the domestic industry with regard to like article produced and sold by the domestic industry.

117. The Authority concludes that while the known other factors listed above do not appear to have caused the injury determined, the following parameters show that injury to the domestic industry is caused by the dumped imports in the event of cessation of anti dumping duty.

a. The volume of imports of the subject goods from the subject country is quite significant.

b. Imports of the subject goods from the subject countries are undercutting domestic industry’s prices.

c. Despite the existence of anti-dumping duties in force on the imports of the subject goods from the subject country, significant volume of dumped imports continues from this source. This indicates that should the measures be allowed to expire, dumping will intensify and cause further injury to the domestic industry.

d. Deterioration in profits, return on capital employed and cash profits is a direct consequence of dumped imports.

e. In case of cessation of anti dumping duties the subject country exporters shall be able to further capture the market in view of their high production capacities and low export prices.

Conclusion on Injury and Causation

118. The investigation has thus shown that the volume of dumped imports from subject countries except Russia has increased. With regard to the effect of the dumped imports on prices, there has been significant price undercutting and underselling effect by the dumped imports from subject countries except Russia as compared with the price of like product in India, and the effect of such imports was to suppress and depress prices to a significant degree. With regard to consequent impact of the dumped imports from subject countries on the domestic industry, the investigation has shown that performance of the domestic industry has deteriorated significantly in terms of parameters such as profits, cash profits and return on investment. The investigation has thus shown that the domestic industry has suffered injury from the dumped imports of subject goods from subject countries.

Magnitude of Injury and Injury Margin

119. As regards injury assessment, the Authority has evaluated grade wise noninjurious price for the Domestic Industry and also proposes to undertake grade to grade Injury Margin determination by comparing exported grades by LG Chemical and HCC from South Korea with the equivalent grades if not identical of the Domestic Industry. However assessment to undertake Injury Margin determination on a weighted average basis could be appropriately considered based on response regarding any determination issues faced in mapping equivalence of grades to this disclosure.

120. The non-injurious price of the subject goods produced by the domestic industry as determined by the Authority has been compared with the landed value of the exports from the subject country for determination of injury margin during POI. The equivalence of the grades exported by the cooperative exporters from South Korea and Domestic Injury are as under to enable grade wise Injury Margin determination.

121. The injury margin determined for subject country, during POI is as follows:

122. From the aforesaid information, the Authority notes that during POI, the injury margin in respect of subject countries is positive and significant. However, in respect of Russia, in view of available facts, the Authority does not note any threat of dumping and likely injury on possible imports from Russia and therefore discontinues the levy of anti- dumping duty on imports of the subject goods from Russia.

LIKELIHOOD OF CONTINUATION OR RECURRENCE OF DUMPING AND INJURY

123. The present investigation is a sunset review of anti-dumping duties imposed on the imports of subject goods from subject countries. Under the Rules, the Authority is required to determine whether continued imposition of antidumping duty is warranted. This also requires examination whether the duty imposed is serving the intended purpose of eliminating injurious dumping.

124. The Authority notes that in the present investigation, there is continuous dumping of the subject goods from subject countries except Russia, causing continued injury to the domestic industry, which ipso facto indicates likelihood of dumping and injury from subject countries. In  view of the above position and due to favorable market conditions prevailing in the Indian market as far as demand and price for the subject goods are concerned, the Authority holds that in the event of revocation/cessation of anti-dumping duties, dumping may intensify from subject countries. The following analysis shows the likelihood of continuation/intensification of dumping and injury to the domestic industry in the event of revocation of anti-dumping duties:

(i) Levelofcurrentandpastdumpingmargin

125. Thelevelofdumpingmarginin respect of subject countries in theearlieraswellaspresent investigations is significant. Given the level ofpriceundercutting and priceunderselling effects from the imports of subject goods from subject countries, the volume of dumped imports is likely to increase further in the eventofrevocationof anti-dumping duty. The dumping margin in the original investigation final findings were determined in the range of about 20%- 50% for subject countries other than cooperative exporters; and in the present determination, they are in the range of about 5%- 30% for subject countries other than cooperative exporters.

(ii) Price undercutting, suppression, depression in the absence of measures

126. The prices at which subject goods are being imported from subject countries are substantially lower than the price at which the goods are being sold in the domestic market. Therefore, in the event of revocation/cessation of the anti-dumping duties, it is likely that exporters from these countries may channelize their sales in the Indian market in view of the significant capacities being held by them.

(iii) Huge productioncapacityinthe subject country

127. The evidence provided by the domestic industry, shows existence of excessive capacities with the exporters/producers in subject countries.

(iv) Dumping margin in respect of exports to third countries

128. The evidence submitted by the domestic industry on record shows that the producers/ exporters from subject countries are exporting huge volume of subject goods to third countries at dumped prices. The Authority has examined this post POI and third countries price behaviour as well.

Comments on Disclosure

Comments by Domestic Industry

129. The domestic industry has submitted the following comments to the disclosure:

 Questionnaire response of Hanwha Chemical Corporation should be rejected.

 Hanwha Chemicals Corporation is not entitled for individual dumping margin for the reason that the exporter in the present case is not Hanwha Chemicals Corporation. The exporter in this case is Hanwha Corporation. Further, the response has stated that the commercial invoices in case of goods produced by Hanwha Chemicals Corporation were issued by Hanwha Corporation. Since commercial invoice for exports were issued by Hanwha Corporation, Hanwha Corporation is the exporter of the product concerned. Further, if Hanwha Corporation is the exporter concerned for all the exports made to India, individual dumping margin cannot be assigned to Hanwha Chemical Corporation without questionnaire response of Hanwha Corporation. Since there is no questionnaire response by Hanwha Corporation, Hanwha Chemical Corporation is not entitled for individual dumping margin. Petitioner requests accordingly.

 It is also pointed out that Hanwha Chemicals Corporation has claimed to have paid commission to Hanwha Corporation. If Hanwha Corporation is the exporter of the product concerned, who has issued commercial invoice to Indian customers, there has to be sales and purchase transactions between Hanwha Chemical Corporation and Hanwha Corporation. There cannot be a commission in such cases. Commission to Hanwha Corporation could have been paid only when the commercial invoices for exports to India were issued by Hanwha Chemical Corporation and such sales were assisted by Hanwha Corporation. However, in the instant case, Hanwha Corporation has issued commercial invoice to Indian importers and therefore Hanwha Corporation must have purchased the goods from Hanwha Chemical Corporation and sold the same to Indian importers.

 In the final findings of SSR Investigation in PVC Suspension Grade from Taiwan, China PR, Indonesia, Japan, Korea RP, Malaysia, Thailand and USA, the Authority examined that HWC was raising invoice on Indian Exporters without purchasing the subject goods from HCC. However, it is pertinent to note that theAuthority in this investigation found during verification that the Korean customs authorities in that case named HWC as exporter and HCC as producer. The Authority observed:

“On the issue of HWC raising invoice on Indian exporters without purchasing the subject goods from HCC and therefore no separate dumping margin should be determined for exports to India by HCC through HWC, it has been reported that the transaction of exports made by HCC to India through HWC is in the nature of an agent acting on behalf of the principal for a commission. However, HWC is not registered with the Korean Government as Commission Agent. During the on the spot verification, it was shown to the verification team that in respect of the subject goods exported to India by HWC, HWC received the commission from HCC for handling the sales documents and covering the marine insurance and bank charges. The Customs Authorities of Korea have named HWC as exporter and HCC as producer. When the domestic industry raised the issue that HWC could not have exported the goods unless it has purchased the goods from HCC, HCC submitted a certificate from their statutory auditors stating that the transaction between HCC and HWC are not treated as sales and purchases and they are treated as the services for a price rendered by HWC to HCC. The Authority has assessed the net exfactory export price of HCC treating the transactions between HCC and HWC as one of purchase and sale. If it is treated as a sale and purchase transactions, the dumping margin reportedly comes to (-) ***% of the net export price.”

 It is thus evident that the Authority has assessed the net ex-factory export price of HCC treating the transactions between HCC and HWC as one of purchase and sale. In other words, the Authority determined dumping margin for HCC without a questionnaire response from HWC. The situation continues to be same in the present case as well.

 Thus, Hanwha Chemicals is not entitled for individual dumping margin for the reason that in the present case the exporter is not HCC but HWC as commercial invoices are issued by it. Therefore, individual dumping margin cannot be assigned to HCC without questionnaire response of HWC.

 The legal submissions are filed by both Hanwha Chemical Corporation (HCC) and Hanwha Corporation (HWC). However, the questionnaire response was filed only by Hanwha Chemicals Corporation. The interested party argued that even though Hanwha Corporation is involved in the exports to India, it is only involved in handling invoices for HCC and receives commission for handling service. HWC has no role as a trading company for the export sales to India. The domestic industry fails to understand that if the opposing interested party claims Hanwha Corporation as not a trader and only invoice handling agency then how it is being treated as an interested party to file written submissions. This clearly shows the interest of  Hanwha Corporation on the anti-dumping duty investigation in India which no agency receiving commission would have.

 HWC has not filed a questionnaire response but has filed written submissions. This clearly indicated the unwillingness of the party to provide information and therefore should be considered as non cooperative.

 In the current case, responses were received from LG Chem, Korea and HCC, Korea. However, they have not furnished information pertaining to related companies in other subject countries. HCC has a wholly owned subsidiary in China, Hanwha Chemical (Ningbo) Co. Ltd. which produces subject goods. Similarly, LG Chem has a subsidiary in China as well i.e. Tianjin LG DAGU Chemicals Co. Ltd. which also produces the subject goods. These producer/exporters have not filed questionnaire response in the present investigation. It was argued during the hearing that the related parties have not exported and therefore have not filed questionnaire response. Petitioner submits that current investigation being a sunset review investigation, the Authority is required to determine whether cessation of anti-dumping duty would lead to likely of dumping and injury to the domestic industry. Therefore, it is important for the Authority to determine likely dumping by an exporter. Even though the exporter has not exported the product under consideration, it can be easily implied that this is due to anti-dumping duty in force. In the event of cessation of anti-dumping duty, the exporter would in all likelihood resume its exports to India.

REPEATED CLAIMS OF NO DUMPING BY LG CHEM AND HANWHA CHEMICALS

 LG Chem and Hanwha Chemicals have repeatedly being investigated by the Designated Authority in India for different products and it has been found that dumping margin in their exports is de-minimus. Past investigations where the Designated Authority has investigated these exporters and has found no or negligible dumping are listed below (in fact, de-minimus dumping margin in all cases, barring one exception of low dumping margin):-

1. Hanwha – 9 cases (including present case)

a. Caustic soda – three investigations – all showed no dumping

b. PVC suspension resin two cases – no dumping

c. Sodium cyanides – no dumping in original case, 3.71% in sunset review

d. PVC Paste Resin – no dumping

2. LG Chem – 4 cases (including present case)

a. PVC suspension resin original case – no dumping

b. PVC Paste resin – no dumping

c. Phenol review case – no dumping

3. Formosa – 4 cases (including present case)

a. PVC suspension resin original case – no dumping

b. PVC Paste resin – no dumping

c. Caustic soda sunset review – no dumping

 Products listed above are such that no producer is able to fetch a price materially different from other suppliers in Indian market. Thus, even when Designated Authority found significant dumping margin in respect of exports made by other exporters in these products, the DA found that the dumping margin in respect of these companies are de-minimus. This is all the more surprising considering that other investigating authorities such as China and Australia have found positive dumping margin in respect of their exports.

 Repeated instances of no dumping by these companies across the products and the determination made by the Designated Authority that dumping margin in these companies are very close to zero implies that these companies pricing policy is to sell the product at one price, regardless of the market. Further, this is not for selling price, this is for ex-factory realization to the exporters after making of the adjustments, as have been claimed in the questionnaire responses. This is highly impossible situation and clearly points at grossly manipulated questionnaire responses having been filed by these companies.

 Elements of costs even though might be based on the records kept by the exporter, nevertheless does not imply that the Designated Authority is bound to adopt the cost of production of the exporter without satisfaction whether the same reasonably reflect the cost associated with production and sale of the product under consideration. Two conditions precedent must be satisfied before the Designated Authority can adopt such cost of production on the basis of records maintained by the company. Such conditions precedent includes a major condition that such costs should reasonably reflect the costs associated with production and sale of the product under consideration.

 In discharge of this requirement/obligation, the Designated Authority has prescribed as follows in the exporter’s questionnaire.

   “……… (g) In case any material is purchased from related supplier or captively produced, please state the basis of pricing of the material considered. Elaborate how you consider that the pricing considered is reflective and representative of a fair market price. Provide purchase prices from independent parties for an identical or comparable input product. Also provide cost of production of the item procured captively or from an affiliated supplier.

 It would be seen that the foreign producer is required to provide the following information in case any material is purchased from related supplier or captively produced –

i. the basis of pricing of the material considered

ii. how exporter considers that the pricing considered is reflective and representative of a fair market price

iii. provide purchase prices from independent parties for an identical or comparable input product.

iv. provide cost of production of the item procured captively or from an affiliated supplier.

 It is important to note the replies filed by the responding exporters in this regard. Following are the relevant extracts from the some of the questionnaire responses of the responding exporters.

a. Hanwa Chemical Corporation

As stated above, the major input, VCM is captively produced by HCC. Therefore, this question is not applicable

b. LG Chem

As explained above answer (e) none of the material are purchased from related parties. Therefore the question is not applicable.

 It would be seen from the responses filed by the exporters/producers that

a. they have intentionally avoided the information sought by the Designated Authority. In fact, none of the responding exporters have fully replied to the question with regard to valuation of VCM. The Authority may kindly direct the responding exporters to provide such information or otherwise hold that the responding exporters have not supplied the relevant information and apply best available information.

 b. Hanwa has avoided providing information related to valuation of VCM. LG on the other hand stated that they do not purchase inputs from any related parties. However, it is difficult to accept such response since the related party of LG namely Tianjin LG Bohai Chemicals Co Ltd, Chins is a manufacturer of VCM.

 VCM is a tradeable commodity and hence every VCM and PVC producer has option to either convert VCM to PVC or sell in the market as VCM. The petitioners request the Authority to take note of that and consider market price of VCM while determining elements of cost for computing normal value.  Referring to Article 11.1 of AD Agreement and Section 9A(5) of Customs Tariff Act, 1975, the domestic industry submitted that sunset review investigation is to examine the following results of the anti dumping duty in force:

 Whether dumping continues, if so, whether it is likely to continue on the revocation of anti dumping duties;

 In case 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 injury and if so, whether injury to the domestic industry is likely to continue;

 In case 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.

 In the present case, imports from Russia in the POI are nil. The domestic industry submitted that even where the dumping margin is zero, anti-dumping duty needs to be continued in view of clear likelihood of dumping from Russia. Following parameters were referenced in order to prove that the cessation of anti-dumping duty would recurrence of dumping and injury

 Dumping margin determined in all previous investigations relating to the product

 No exports to India

 Freely disposable present and potential capacities with the foreign producers

 Dumping margin in respect of exports to third countries

 The DesignatedAuthority has in the past continued anti-dumping duty despite the fact that imports were nil on the ground that there was likelihood of dumping. The following cases were referenced on this point.

 Sodium Formaldehyde Sulphoxylate (SFS)

 Zinc oxide

 Ductile iron pipes

 The domestic industry has suffered continued injury despite anti-dumping duty in existence as can be seen from the following

 There is the likelihood of continuation or recurrence of dumping and injury.

 Anti dumping duty may be imposed only as fixed quantum of anti dumping duty (fixed form of duty) as per the consistent practice of the Authority so that ADD does not become futile. For this claim, following decisions were cited:

in the case of NBR from Korea, the Hon’ble CESTAT modified variable anti-dumping duty recommended by Designated Authority to fixed duty based on the appeal filed by an exporter, M/s. Kumho Petro-Chemicals Co. Ltd. (2004(170)E.L.T. 274)

in the case of Metcoke, the CESTAT, vide their decision 2000(116) E.L.T. 67 modified the anti-dumping duty from variable to fixed.

in the case of Vitrified files, the CESTAT upheld the decision of the Designated Authority to impose fixed quantum of duty.

decision of the CESTAT in the matter of Metcoke from China.

Comments by Interested Parties:

130. Following are the comments of interested parties to the disclosure statement:

I. Hanwha Chemical Corporation, Korea

 DGAD accepted the reporting method of Hanwha Corporation’s function and its related expenses in the final finding issued on December 26, 2007. The relevant sentence is attached below (page 36-37 of final finding:

“ b.2) Export Price-Hanwha Chemical Corporation

During the POI, M/s Hanwha Chemical Corporation (HCC) has exported ****** MT of the subject goods to India against ****** transactions. During the POI, HCC has sold only three grades of PVC Suspension. All exports to India are on CIF term and LC at sight or usance basis. All sales except two transactions are through its affiliated trader viz. M/s Hanwha Corporation (HWC).

HWC acts as a commission agent between HCC and Indian Customers against payment of fixed commission on the shipments to India under a service contract between the parties. The Commission amount takes care of documentation and negotiation of shipping documents, ocean insurance expense and sub-agent’s commission less than US$ ****** per MT. The unit price to the Indian customer is the invoice price of HWC. HCC raises the invoice to HWC excluding the HWC commission.

Against the export transactions, the exporter has incurred inland transport expenses, ocean freight expenses and port handling expenses, and commission paid to HWC which were verified from the records of the company. Ocean insurance and subagent’s commissions are included in HWC’s commission and hence no deduction is required from the invoice value.”

 The above reporting method was also accepted by the DGAD for PVC Paste Case (The final finding released on May 2, 2011)

 In some of the export transactions of subject goods made to India, Hanwha Chemical Corporation (HCC) has paid handling of document charges to Hanwha Corporation (HWC).

 Even though Hanwha Corporation involved in the exports to India, please note that Hanwha Corporation is just responsible for handling invoice for Hanwha Chemical Corporation and receives commission for document handling service. It may be noted that Hanwha Corporation does not purchase the product under investigation from Hanwha Chemical Corporation nor resell it to customer. It means Hanwha Corporation does not have any role as a trading company for the export sales to India.

 Document handling charges of *** USD per MT includes following services provided by HWC to HCC:

i. Preparation of documents related to exports out of Korea, RP

ii. Charges/expenses for overseas insurance

iii. Banking Charges related to inward remittances against export receipts.

HWC only receives the export remittances on behalf of HCC and remits exactly the same to HCC. It will be pertinent to note that the Export Invoice, Packing List as well as Bill of Lading were in the name of HCC. Further, the Bill of Entries cleared at Indian Ports also shows the name of exporter as HCC. Hence, there cannot be iota of doubt about the status of HCC as Producer as well as exporter.

 Factually, out of 74 exports transaction, only 16 transactions were made through HWC against the payment of handling charges. Further, out of *** MT of exports to India, *** MT was only sold through HWC, which is even less than ***% of the total subject goods exported to India during POI. It will also be pertinent to note that no exports were made through HWC after May’ 2014. HCC has also provided the information related to POST POI exports to India, wherein, no transaction of exports has been made through HWC.

 Additionally, at the time of verification, it was demonstrated to the Authority that HWC is making more than reasonable profits by charging *** USD per MT from HCC against documents handling charges. It was further demonstrated that if the transactions through HWC were ignored that it will only result in enhancement of negative dumping margin. Therefore, there cannot be any malafide reason for the purposes of Anti Dumping Investigation.

 In view of the above, it is requested to consider all the 74 exports transactions for computation of Dumping Margin of HCC. II. Comments on behalf of Leather Cloth and Plastics Manufacturers Association (LCPMA), Polynova Industries Ltd, MayurUniquoters, KPL International Ltd, Jasch Plastics India Ltd and Jasch Industries Ltd.:

 The disclosure as it appears would lead to continued inclusion of certain non PUC items in the scope of anti- dumping duties if the present measures are continued. The IIT Delhi Report is disputed and the Authority is requested to conduct another test for confirming product issue in question. Following points may kindly be once again perused by the Authority;

 The domestic industry does not manufacture the following products;

i. PVC paste resin of high K Value;

ii. PVC paste resin of low fogg values especially for automotive application with a fogging characteristics (gravimetric) of less then 0.5 mg by testing by test method din-75201 / iso-6452.

PVC paste resin high k value

 K value of PVC resin determines the mechanical properties of PVC leather cloth relating to specifications required by Final customer such as OEM manufacturers of various seat covers for vehicles, furniture upholstery, footwear and other products.

 As K-value increases in the PVC leather cloth formulations the toughness of PVC leather also increases. There are various types of specifications in leather cloth such as Taber abrasion for specific Types of wheels, weights and number of cycles; Wyzenbeek abrasion using # 8 Duck cloth; Martindale abrasion test; Flexibility tests such as 2,00,000 cycles of Bally flex, Satra Flex test 5,00,000 cycles.

 Increase in Mechanical properties such as Breaking Strength, Tear strength and reduction in Elongation at break etc are influenced by increase by K value of the PVC resin.

 The High K value of PVC Resin is required to be processed at higher degree of temperature in comparison to low K value. The low K Value PVC resin cannot achieve the same Mechanical properties as high K Value resin in PVC formulation. There are no additives that can convert low K value PVC in to High K Value PVC in Leather cloth formulation. For example breaking strength can be increased to some level by reducing plasticizer in formulation with low K value PVC but the product will fail in Elongation/ Flexibility. Note: K Value is a representation of Molecular weight of PVC resin. There no such known additive that will increase the molecular weight of PVC resin from 67K Value to 77 and therefore these Resins of difference K values are not interchangeable.

 In case these resins have interchangeability there was no need for M/s. Chemplast to manufacture Resin Grade 124 with 65k, grade 120 of 68k and grade 121 of 77k and wide range of different k value by the overseas manufacturers. Therefore M/s. Chemplast can reply better why they manufacture three different grades of Resins with different k values if they are interchangeable.

Pvc Resin Of Low Fogg Value Specifically For Automotives

 Leather cloth manufactured with resins manufactured by Chemplast has never passed the Fog test. All the grades of Chemplast resin have been found to be failing on fogging test and are nowhere near the standards as huge oil droplets are formed on the glass plates & hence not suitable for automotive Industry at all as the product do not pass under their Test method SAEJ1756 for fogging values .

 It is therefore essential for LCPMA members that PVC resin with LOW FOG property as per above test method are to be imported, without which the domestic supply to the entire automotive industry will come to a standstill.

 This is evident that LCPMA members have imported these Resins during POI at above USD 1800.00 / MT while the general purpose PVC Resin prices were at the range of USD 1200.00 / MT. This shows that specialty PVC Resin prices are higher by 50% than general purpose and such imports under any circumstance can cause any injury to domestic industry. These resins for automotive application in particular imported are neither technically nor commercially substitutable to the PVC grades produced by the domestic industry and Low Fog resins needs to be excluded from the scope of PUC.

 The original manufacture of these resin M/s. Solvay and M/s.Vinnolit got the testing of these resins in their lab as well as by independent agency with Test method ISO-6452 and DIN- 75201 and test results shown are as under;

 During previous investigation the Designated Authority had send the samples of specialty grades of PVC Resin for examination to IIT, New Delhi but the report issued by IIT New Delhi was incomplete and incorrect which was protested by LCPMA vide letter dated 14.2.2013 as well as by European manufacturers.

 This issue is still open and we request before you for a review (copy of letter and correspondence with IIT, New Delhi already submitted with our submission and meeting with the Authority). The Authority may extend the investigations to conduct such required test to avoid serious injustice to the users of the subject goods.

 The domestic industry has submitted as per disclosure point C 2 (h) that the grade manufactured by them are log fogging resins for suitable for automotive industry, which is totally incorrect and false. It is requested to please obtain a re-confirmation with affidavit and test report from M/s Chemplast that the resins manufactured by them meet the low fog properties of FOGGING CHARACTERSTICS (GRAVIMETRIC) OF LESS THEN 0.5MG BY TESTING BY TEST METHOD DIN-75201 / ISO-6452 as required by automotive industries and to confirm that these grades are equivalent to imported grades 373 ND and 375 MD or these resins can be sent for Re-Testing to any test laboratory equipped with testing equipment to undertake the test of fog properties with test method ISO-6452 and DIN-75201 (Like SGS India) to verify the correctness of the statement of M/s Chemplast.

 It will be a great hardship to the domestic manufacturers of PVC Leather cloth if this aspect is not correctly investigated and concluded to exclude the specialty grades of PVC Resin being not manufactured by M/s. Chemplast and are essentially required to be imported from Europe for manufacture of PVC Leather Cloth as required by Automotive Industry. This will be also against the laws of Natural Justice.

 These both aspects were verified during the visit of a team from the Authority in the plant of one of the member of LCPMA. However if due to any reason the low fog resin for automotive are not excluded from the product under consideration, we request the Authority to kindly make a reference price equivalent to non-injurious price to domestic industry and the Low fog PVC Reins of price higher than the reference price to be excluded from the Anti- Dumping duty.

Hardship Due To Non Participation Of European Manufacturers

 The domestic manufacturers of PVC Leather cloth are suffering with great hard ship and losses due to nonparticipation of EU manufacturers of PVC Resin in investigation as they do not consider India as their major market.

 Since the data is not provided by EU manufacturers, dumping margins are calculated by third party data which not fully reliable and an average is taken of different prices of different grades including nonstandard grades which gives very lower average price and results in undue hardship to actual users.

 It is requested to consider the actual import data of different grades of PVC Resin separately as provided by member importers for the calculation of dumping margin of each grade rather than third party data.

 Solvay has lately filed price of subject goods which may kindly be used by the Authority for the grade wise prices. The information provided by the exporter and data of our imports would show that the DI can never get impacted by such high priced products imported from subject countries.

Volatility In Prices Of Pvc Resin Due To Volatile Crude Prices And Ex. Rate Of Indian Rupee

 The prices of PVC Resin (International as well as Domestic) are linked to the movement of crude prices.

 The Anti Dumping duty is calculated based on prices prevailing in POI which has changed a lot during current period as above. This will have similar trend in next five years during the period of A.D.D.

 It is noted at point B10-XXVI exchange rate of USD is adapted as INR 61.65 as prevailing during POI. The current exchange rate is INR 67.50 (As per Customs Notification No.48/2016 dated 7.4.2016 for imports). This increase in exchange rate directly increase the amount of Anti Dumping duty and therefore and this requested shows the need to consider Anti dumping duty, if any, in INR or as the percentage of basic price (As ad valorum and to save the hard ship of under incident of duty due to volatility in crude prices and Exchange rate).

High Cost Of Production Of ChempalstSanmar

 M/s. Chemplast is producing PVC Resin with very old technology and their cost of production is higher than international manufactures and it is really unfortunate that this aspect cannot be verified due to nonparticipation of EU manufactures and we have to suffer losses due to ADD therefore it is humbly requested to kindly arrange to verify the cost of production of another domestic manufacturer of PVC Paste Resin M/s. Finolex Industries Ltd.

 When M/s. Finolex Industries Ltd. does not have the injury and losses due to imports then why only Chemplast has this injury and suffers the loss?

M/s. ChemplastSanmar Do Not Fulfill The Requirements Of Actual Users And Manufacturers Of PVC Leather Cloth In India

 Small scale industry manufacturing PVC Leather cloth in India has to buy PVC Resin from local market through traders paying hefty premiums as the domestic industry do not fulfill the demand of actual users. This premium is not part of this investigation and may please be considered.

 The total consumption of PVC Paste Resin in India is about 12,50,000.00 MT Annually while the capacity of domestic industry is just about 50% and rest of PVC Resin is to be imported with high cost of ADD and in spite of that the M/s. Chemplasthas refused to supply material as required by actual users due to short supply. This is a great hardship to the local manufactures of PVC Leather cloth.

 Your attention is drawn at Point No.92 of Disclosure reads as “The production and Sales of domestic industry has increased in the throughout the period. Capitalisation of Domestic industry has declined. At one place they are showing decline in capacity utilization and other place they write capacity utilization has increased over the period. But infect DI always have scarcity of material and refused to supply to actual users the required quantities which affect the production of domestic industry of PVC Leather cloth. We have enclosed evidences in support of this with the copies of mails exchanged by our members with M/s. Chemplast in our submissions.

There is no likelihood of dumping and injury in the event of revocation of present duties.

 DI of PVC paste resin is not vulnerable to dumping and injury and the duties are required to be discontinued. The continued imports of the subject goods are due to two predominant reasons a) there is demand supply gap thus imports are essential, b) certain speciality grades are not produced by DI, thus, they are forced to import such special grades. It is also needs to be seen that such speciality grades are imported at much higher prices. The injury any to DI could be due to self-inflicted reasons and continuation of present AD duties is not the solution to it. Thus, we request the Authority to recommend discontinuation of existing AD duties on subject goods from subject countries.

The Authority should reject the request of the DI for any fixed form of AD duty in the present case, if at all the duties have to be continued.

 A serious issue as far as the consumers of the subject goods in India raised throughout this investigation and also in the past is the need for exclusion of certain speciality products from the scope of PUC and the same is not yet done which has weakened the position of users in the competitive market. It is already shown to the Authority that the speciality grades like low fog for automotive and high k value have been imported at a price more 50% higher than the regular grade.

 Still the users were subjected to very hefty AD duties. Since the DI is not manufacturing they are not concerned in any manner what so ever about the imports of such grades which are not interchangeable to the grades produced by the DI by any figment of imagination.

 In view of the above the proposition of the DI for a fixed duty is disputed if the duties are required to be continued. We humbly submit any decision for a fixed form of duty will render the user industry completely uncompetitive and price differences inter se grades will not be taken into consideration under such form of duty in no manner. Reference forms of duty were earlier imposed on PUC from subject counties and we request the Authority to recommend only reference form of duty in this SSR also, if at all the Authority finds it essential to continue the AD duty.

 Prayer:

a. there is no continued injury to the applicant on account of continued imports from subject countries nor has the applicant been able to prove any likelihood of continuation or recurrence of injury in the event of expiry of present measures;

b. The inclusion or continued inclusion of PVC Paste resin of High K Value (77 and above) and Low Fogging specification in particular for the automotive industry which are not manufactured by the DI is of no justification and such grades needs to be excluded from the scope of PUC;

c. DI confirmed that they do not make Low Fog PVC Resin for Automotive applications. These PVC Resin’s are made with special technology and DI does not have this technology and only 3-4 leading makers in the world can make these types of PVC. These are manufactured mainly with Emulsion production process and DI does not have this production process. The cost of manufacturing these grades is different than the cost of manufacturing general purpose grade as high technology is required for manufacturing of Low Fog –automotive grade PVC Resin and this is evident from the import data submitted by importer that the price of speciality grade is US$ 1800 while the general purpose is much less than that. DI does not have such grade in their production /sales records. So such grades as regularly imported should be excluded from PUC.

d. We have seen the large volatility and price movements in crude from POI to current period as well as in the Exchange Rate of INR and this directly impact the cost of raw materials required for manufacturing of PVC. Therefore the ADD should be considered as a BENCHMARK IN INR to avoid such great hardship to the Domestic USER Industry and manufacturers of PVC Leather cloth.

e. Alternatively an Anti-Dumping Duty, if any, may be calculated on ad-valoram basis as % of the import price like customs duty to take care in the volatility in crude and exchange rate and register our opposition to any other form of duty which will render our survival itself very fragile.

III. INOVYN Belgium S.A.

 M/s. INOVYN Belgium S.A. in the capacity of an exporter of the subject goods to India from EU through letter dated 11.04.2016 has contested that volatile content and fogging are two different properties.

 Further a statement on total exports of the subject goods with unit price has been provided at an extremely belated stage with no evidence etc.

IV. SCG Performance Chemicals Co. Ltd. (“SCG”)

 M/s. SCG Performance Chemicals Co. Ltd. commented that M/s. Hanwha and M/s LG cut M/s SCG’s prices and sell lower than M/s SCG’s prices by at least USD 50/MT. M/s SCG has lost many orders against dumping prices of M/s. Hanwha and M/s LG and yet there is no ADD on M/s. Hanwha and M/s LG.

V. The Authority has not followed principles of natural justice, has depended upon the data of chemplast only and not referenced the DGCIS data independently. Issues like cash discounts by chemplast, non inclusion of basic custom duty to determine landed value, fall in crude prices, non export by chemplast if prices in exporting countries are high, high purchase cost of chemplast have not been addressed.

Examination by Authority

131. As regards the test on volatility and low fogging characteristics the Authority holds that the producers/exporters of the said grades did not participate in the investigation contesting on the aspect of PUC, dumping or injury. Further the users need to have contested the test report of IIT earlier before CESTAT, the appellate body. The report of IIT has clarified the aspect of low volatility and low fogging characteristics and the PUC includes the low fogging grade of subject goods also.

132. The Authority notes the submissions made by the domestic industry as well as by M/s HCC on the data submitted by M/s HCC in the capacity as a producer/ exporter of the subject goods. The Authority notes that HCC is mentioned as an exporter in the commercial invoice, bill of lading and export permit issued by Korean Customs. However, in the current sunset review, for *** MT out of *** MT of exports by M/s HCC in POI,M/s Hanwha Corporation’s services have been utilised, and an adjustment of *** $/MT as commission has been considered to arrive at ex- factory export price as also done earlier in the original findings dated 2nd May, 2011, wherein also, the Authority had provided such an adjustment to arrive at the ex- factory export price with a similar arrangement between M/s HCC and M/s Hanwha Corporation. Further, in respect of the above transactions wherein Hanwha Corporation has handled the letter of credit, the DG Systems data identify HCC as an exporter. For the transactions related to *** MT involving M/s Hanwa Corporation, despite the adjustment of commission for ex-factory export price the dumping margin continues to be de minimis. The Authority has therefore determined the dumping margin/ injury margin with HCC both as producer and exporter of the subject goods, and for any other channel of exports adopted by HCC, residual category of ADD has been recommended. The valuation of VCM was carefully examined during the visit to the producer/exporters of PVC Paste Resin in South Korea. The cost of production of VCM as reflected in the books of accounts has been considered for evaluating ex-factory cost of PVC Paste Resin, as per relevant ADD rules.

133. As regards difference in grades of PUC, the Authority holds that the PUC which is differentiated in various grades on the basis of certain intrinsic technical parameters, and applications have difference in cost and price. In case of cooperative exporters in South Korea, this difference in cost and price is noted in the range of 15-20%. The Authority therefore has undertaken grade to grade analysis for evaluation of dumping margin for cooperative exporters, which is realistic and appropriate. In view of equivalence of various grades as illustrated in the disclosure, the comparison has been undertaken on grade to grade basis for injury margin as well. The Authority notes that Domestic Industry has mentioned that in respect of grades manufactured by them, the cost difference is low. In such a case also the Authority holds that grade to grade analysis is not unrealistic.

134. As regards form and denomination of ADD, the Authority considers that fixed duty in dollar from has been consistently recommended and levied keeping in view ease of implementation and efficacy.

135. As regards price fluctuation of raw materials, the Authority holds that all variation in costs and prices of various elements viz raw materials/subject goods are captured in the POI appropriately for different aspects of investigation. The Authority in respect of issues related to crude price fall , high cost of production of chemplast, determination of landed value and DGCIS data adoption holds that Chemplast fulfills the requirement as domestic industry as per AD rules. NIP has been determined during POI as per relevant rules addressing cost inefficiencies issues as per Authority’s consistent practice. The Normal value of non cooperative exporters has been determined as per relevant AD rules as detailed in relevant paras . Landed value has been determined by applying basic custom duty on weighted average import prices based on DGCIS data fornon cooperative exporters as the same is comprehensive and the best available information in view of no response from exporters and limited response from importers . The NSR has been determined at ex factory level net of discounts and taxes.

136. As regards the comments of M/s SCG Performance Chemicals Co. Ltd. on the dumping by exporters from Korea RP with their prices being lower than that from Thailand, the Authority notes that the dumping margin determined specifically for an exporter is based on that exporter’s normal value and export price. The same is done for cooperative exporters from Korea RP.

137. As regards likelihood of dumping and injury, the Authority notes that there are no imports from Russia during the POI and post POI. However as per the World Trade Atlas data, a small quantity of exports is reflected to India in 2015 under the Customs classification of 390422. The average prices of exports under this head to countries other than India during POI do not establish a likelihood of injury to the domestic industry in the event of its diversion to India.

138. The Authority further notes that in post POI the prices of the subject goods to 3rd countries show a decline of 13.42% as compared to that in POI. The prices of main raw material i.e. VCM also show a decline by 21% to 3rd countries during this corresponding period. Therefore a global decline of both subject goods and raw materials prices is evident. Under such situation, exporter specific analysis under a review may be warranted rather than the continuance of anti- dumping duties. Therefore the Authority holds that the above facts and the price trend do not establish the likelihood of continuance of dumping and consequential injury from Russia.

Conclusion

139. Having regard to the contentions raised, information provided and submissions made by the interested parties and facts available before the Authority as recorded in this finding and on the basis of the above analysis of the state of continuation of dumping and consequent injury and likelihood of continuation/recurrence of dumping and injury, the Authority concludes that:

i. There is continued dumping of the product concerned from the subject countries except Russia, and M/s LG Chemicals and M/s HCC from Korea RP, both in absolute terms and in relation to production/consumption in India causing injury to the domestic industry.

ii. Imports are significantly undercutting the prices of the domestic industry. Further, imports are suppressing and depressing the domestic prices.

iii. The performance of the Domestic Industry has deteriorated in terms of profits, return on investments, cash flow and inventories.

iv. The dumped imports from the subject countries except Russia, and M/s LG Chemicals and M/s HCC from Korea RP continue to cause injury to the domestic industry.

v. Dumping of the product under consideration from the subject countries except Russia, and M/s LG Chemicals and M/s HCC from Korea RP is likely to continue/intensify should the current antidumping duty be revoked.

Recommendations

140. Having concluded as above, the Authority is of the view that the anti-dumping measures are required to be continued in respect of the subject countries except Russia, and M/s LG Chemicals and M/s HCC from Korea RP. Therefore, Authority considers it necessary to recommend continued imposition of the following definitive anti-dumping duty on imports of subject goods from the subject countries in the form and manner as described in the duty table given below.

141. Having regard to the lesser duty rule followed by the Authority, the Authority recommends imposition of anti-dumping duty equal to the lesser of the margin of dumping and the margin of injury, on the imports of the subject goods, originating in or exported from the subject countries except Russia, and M/s LG Chemicals and M/s HCC from Korea RP so as to remove the injury to the domestic industry. Accordingly, the anti-dumping duty equal to the amount indicated in Col. 8 of the table below is recommended to be imposed by the Central Government on the imports of the subject goods, originating in or exported from subject countries.

DUTY TABLE

 

142. Landed value of imports for the purpose of this Notification shall be the assessable value as determined by the Customs under the Customs Act, 1962 (52 of 1962) and includes all duties of customs except duties under sections 3, 3A, 8B, 9 and 9A of the said Act.

Further Procedure

143. An appeal against the order of the Central Government arising out of this Final Findings Notification shall lie before the Customs, Excise and Service Tax Appellate Tribunal in accordance with the Customs Tariff Act.

AK Bhalla
Additional Secretary & Designated Authority