1. LEGAL PROVISIONS

 

Article 9.1 of the ADA provides as follows:

 

“The decision whether or not to impose an anti-dumping duty in cases where all requirements for the imposition have been fulfilled, and the decision whether the amount of the anti-dumping duty    to be imposed shall be the full margin of dumping or less, are decisions to be made by the authorities of the importing Member. It is desirable that the imposition be permissive in the territory of all Members, and that the duty be less than the margin if such lesser duty would be adequate to remove the injury to the domestic industry.”

 

Corresponding Rule 4 (1)(d)and Rule 17(1)(b) of the Anti-Dumping Rules 1995 read as under:

“Rule 4(1)(d): Duties of the designated authority. -

 

(1) It shall be the duty of the designated authority in accordance with these rules-

 

(a) to recommend to the Central Government –

 

(i) the amount of anti-dumping duty equal to the margin of dumping or less, which if levied, would remove the injury to the domestic industry, after considering the principles laid down in the Annexure III to these rules; and

 

(ii) the date of commencement of such duty;

 

“Rule 17(1)(b): Final Findings

 

Recommending the amount of duty which, if levied,    would remove the injury where applicable, to the domestic industry after considering the principles laid down in the Annexure III to rules.

 

The final finding, if affirmative, shall contain all information on the matter of facts and law and reasons which have led to the conclusion and shall also contain information regarding- the names of the suppliers, or when this is impracticable, the supplying countries involved; a description of the product which is sufficient for customs purposes; the margins of dumping established and a full explanation of the reasons for the methodology used in the establishment and comparison of the export price and the normal value;

 

Considerations relevant to the injury determination; and the main reasons leading to the determination.

 

(2) The designated authority shall determine an individual margin of dumping for each known exporter or producer concerned of the article under investigation:

 

Provided that in cases where the number of exporters, producers, importers or types of articles involved are so  large  as  to  make such determination impracticable, it may limit its findings either     to a reasonable number of interested parties or articles by using statistically valid samples based on information available at the time of selection, or to the largest percentage of the volume of the exports from the country in question which can reasonably be investigated, and any selection, of exporters, producers, or types of articles, made under this proviso shall preferably be made in consultation with   and with the consent of the exporters, producers or importers concerned:

 

Provided further that the designated authority shall, determine an individual margin of dumping for any exporter or producer, though not selected initially, who submit necessary information in time, except where the number of exporters or producers are so large that individual examination would be unduly burdensome and prevent the timely completion of the investigation.

 

(3) The designated authority shall issue a public notice recording its final findings.

 

2. OPERATING PRACTICES

The injury margin (IM) is calculated by comparing the exporting producer’s / country’s landed value (LV) of exports with the non-injurious price (NIP) of the DI. The resulting injury is expressed as a percentage of the Landed Value in order to obtain a %injury margin.

 

IM = NIP-LV

% IM = (IM/LV) X 100

 

The methodology and principles for calculation of Non-Injurious Price are provided in Chapter 9 of this Manual.

 

Landed Value for this purpose is calculated from the CIF price of imports of the subject goods or assessable value under the Customs Act including applicable duties of customs. CIF price includes all expenses incurred or due to be incurred like insurance, inland freight in exporting country, ocean freight etc. Landing charges used to be added to CIF @ 1%to arrive at an assessed value for imports cleared till September 2017. However, presently the assessable value includes all the applicable charges2. The applicable basic customs duties and cess (except CVD, SAD, and special duties) are added to the CIF price to arrive at the landed value.

 

A separate injury margin is calculated for each co-operating producer exporter by comparing the DI’s NIP with the landed price of relevant imports from such producer/exporter. In the case of product control numbers (‘PCN’), injury margin is determined PCN wise and subsequently,the margin is consolidated on the weighted average basis with relevant export quantities as the basis. A separate common injury margin is also to be worked out for non-responding and non-co-operative producer exporters, which is called the residual rate applicable to ‘others’.

 

Sometimes, especially when selling prices of PUC are volatile or vary significantly, NIP and Landed Value is computed month/quarter wise fora more accurate analysis. Injury margin in all such cases shall be worked out monthly/ quarterly. However, it must be ensured in all such cases that overall month/quarter wise weighted average injury margin should reconcile with the overall injury margin for the POI as a whole.

 

The calculation of injury margin is comparatively simpler where there are no PCNs asonly one NIP and one landed value figure needs to be determined. However, when the product under consideration is sub-divided into PCNs, landed value and NIP is required to be determined for each of the PCNs individually for calculation of injury margins. This ensures a fair comparison of like articles.

 

As per the established practice in DGTR, weighted average injury margins are calculated based on the actual mix of PCNs exported by the respective exporters. In other words, DGTR does not consider the mix of PCNs actually produced by the DI and their quantities for calculation of injury margin.

 

The PCN wise NIP will be common for all responding producer exporters. The IM is calculated for individual PCNs based on their individual LV and NIP and then weighted average based on respective exporter’s quantity of exports. The landed value will have to be worked out separately with respect to each co-operating producer exporter based on their export price as per Appendix-2.

 

Based on PCN wise landed value and NIP, injury margins hall be worked out with respect to each PCN exported to India by the respective producer exporter. Thereafter, a producer exporter wise weighted average of IM is calculated based on the quantity of actual PCN mix of exports by the respective producer exporters to arrive at the figure of injury margin for each co-operative producer exporter. However, in some cases, an exception has been made and PCN wise duty has been recommended on the merits of the case

 

In a situation where export quantities include some of the PCNs, which have not been produced by the DI during the POI, the NIP4 is computed for those PCNs based on closest PCNs, as mentioned in the previous chapter, and this NIP is subsequently used for determination of injury margin for that PCN.

 

It may be clarified that even if the injury margin for certain PCNs is negative, the overall weighted average injury margin for all the PCNs exported by the respective Producer Exporter is to be considered for arriving at conclusion regarding the injury. No exemption or exclusion is allowed for any PCN, merely because a particular PCN has negative injury margin or dumping margin.

 

It is a clear position that dumping margin and injury margin is computed PCN wise, wherever applicable, for fair and accurate comparison which are kept as workings in the case file. Further, the weighted averages are calculated and they form the basis for recommendation of duty.

 

The illustration below explains the principles set out above:

S. N	PCN No.	The quantity exported by Pro- ducer Exporter	Quantity produced by DI	NIP	Landed Value	Injury Margin	Injury Margin %Age
1	ABC 1	50	500	18	12	6	50.00
2	ABC 2	60	350	20	10	10	100.00
3	ABC 3	-	400	28	-	0	0.00
4	ABC 4	15	500	14	16	-2	-12.50
5	ABC 5	40	300	18	13	5	38.46
6	ABC 6	100	250	15	10	5	50.00
7	ABC 7	45	500	14	14	0	0.00
8	ABC 8	100	-	16 (No- tional)	14	2	14.29
9	ABC 9	80	300	22	23	-1	-4.35
10	Total Qty. Exported/ AVG	490	3100	18.33	14.00	2.78	19.84
11	Weighted Average			17.17	13.94	3.45	24.74%

 

It may be noted that the simple averages of injury margin in row 10 are not relevant for analysis. Further, a weighted average of 24.74% as mentioned in row 11 calculated on the basis of export quantities of the relevant producer exporter is the relevant figure for the conclusion of the investigation.

 

It can be seen from above that even though PCNs viz. ABC4 and ABC9 have negative injury margin, the exports from the respective Producer Exporter will still be considered as causing injury because overall weighted average injury margin for all PCNs taken together is positive.

 

Similarly, PCN viz. ABC 8 is not being manufactured by DI, so NIP has been worked based on the closest product manufactured by DI (proxy PCN) which is ABC7, by adding the relevant additional cost based on the specifications.

 

3. Injury Margin in Case of Sampling

 

If there are a large number of responses, the Authority may resort to sampling in terms of Rule 17(3), as per the methodology explained in Chapter 8. In such a situation, the outcome of sampling for the respective subject country would be as under:

 

The sampled producer-exporters will be given an individual injury margin as per the methodology explained above;

 

The un-sampled producer-exporters will be given a weighted average (based on the export volume of sampled exporters) of the injury margin determined for sampled producers,

 

Another Residual injury margin will be determined for non-responding producers-exporters and non-cooperative responding producer- exporters on account of incomplete response as per the methodology explained in the next paragraph.

 

4. Residual Margin: Injury Margin for Non-Cooperating Exporters

 

The Anti-Dumping Rules do not mandate any particular methodology for the injury margin calculations for the residual category. The practice in the Directorate is as follows:

 

In case there is a co-operative exporter, the residual injury margin is determined by comparing the landed value, which is the lowest of the co-operative exporter of the relevant subject country, with the NIP of the DI. While working out the injury margin in case of the residual category, it may be ensured that margin for “others” is higher than the highest margin determined for any cooperating producer so that the non-cooperation is not rewarded. The Authority also has an option to take the LV from DGCI&S data. Case to case decision may be taken on the merits with the approval of DG.

In case no exporter has been declared co-operative or there is no response, the residual injury margin is to be determined by comparing the weighted average landed value calculated from DGCIS data with the NIP of the DI.

 

5. Disclosure of landed value to the respective producer exporter

 

Rule 16 of the Customs Tariff (Identification, Assessment and Collection of Anti-Dumping Duty on Dumped Articles and for Determination of Injury) Rules, 1995 regarding disclosure of information provides that the designated authority shall, before giving its final findings, inform all interested parties of the essential facts under consideration which form the basis for its decision. Since the LV workings are one of the essential facts based on data furnished by the respective exporter, the finally computed LV needs to be disclosed to the respective exporter. This provides them with an opportunity to submit their comments/views on the disallowances or the facts considered by the Authority in the determination of LV. However, the IM is not disclosed to the exporter/importers as the same shall lead to disclosure of NIP, which is confidential information of the DI. The detailed procedure for disclosure is explained in Chapter 16 of this manual.

 

6. TREATMENT OF INJURY MARGIN IN VARIOUS  TYPE OF   INVESTIGATIONS

 

Original Investigation

 

As India follows the lesser duty rule, it determines Dumping margin and Injury Margin5 for the purpose of recommending duty. For an original investigation determination of injury margin is mandatory. The Authority carries out the injury analysis as well as determines the injury margin based on the NIP of the DI and Landed Value of the producer exporter.

 

Mid-Term & Sun-Set Review Investigation

 

Normally the practice in the Directorate is to undertake a comprehensive review.In a review investigation in terms of Rule 23, the injury analysis is more important for the continuation of duty particularly in the cases where the extension is being sought on the likelihood of continuance or recurrence of the injury. NIP is calculated for analyzing the effect of underselling as well as to determine whether the exports from the subject country to the third country are at prices which are otherwise injurious for the Indian DI. Therefore, in the case of review investigations, injury analysis takes a higher significance than injury margin itself. Injury Margin is needed for computation of injury when duty has to be quantified for revision of the duty amount.

 

New Shipper Review

 

New Shipper Review investigation in terms of Rule 22, is filed by the producer exporters who had not exported during the period of investigation of the original investigation. In such a scenario the injury analysis and injury margin is not computed during the investigation. The duty at the end of an investigation is determined on the basis of fresh Dumping Margin or the original injury margin whichever is less. However, in those cases, where sampling methodology was used in case of an original investigation, it can be considered that the duty rates are given to the co-operative un-sampled exporter be extended to the NSR applicant with the approval of the Authority. Thus no fresh determination of IM is essential in an NSR.

 

Anti-Circumvention

 

The anti-circumvention investigation is to determine the existence and effect of any alleged circumvention of the anti-dumping duty levied under section 9A of the Act. The investigation has to identify the various modes of circumvention as provided in Rule 25 of the AD Rules. The Authority upon determination that circumvention of anti-dumping duty exists, may recommend imposition of anti- dumping duty to imports of articles found to be circumventing an existing anti- dumping duty or to imports of article originating in or exported from countries other than those which are already notified for the purpose of levy of the antidumping duty (details in Chapter 18). There is no fresh determination of duty in an anti- circumvention investigation meaning thereby no fresh IM determination is essential. The Authority extends the duty on the PUI, if it concludes that the PUI is being exported to India at dumped prices causing injury to the DI. In this scenario, the existing duty is extended to cover PUI.

 

Source: Manual Of Operating Practices For Trade Remedy Investigations