1. Legal Provision

 

In the ADA there is no specific definition of ‘Product’. However, Article 2.1 of  the  ADA  provides as follows:

 

“For the purpose of this Agreement, a product is to be considered as being dumped, i.e., introduced into the commerce of another country at less than its normal value, if the export price of the product exported from one country to another is less than the comparable price, in the ordinary course of trade, for the like product when destined for consumption in the exporting country”.

 

In addition, Article VI of the ADA refers to the word “Product” whereas the Customs Tariff Act, 1975 and the Rules use the word “Article” to indicate the “Product under Consideration” which is the matter of investigation. There is no specific definition or description of ‘Product Under Consideration’ (PUC) under the Rules, however, this is the single most important starting point of an investigation. The law only defines the “like article”, as “a product which is a like, or in the absence of like, most similar in characteristics and uses with, the article subject to     an investigation ...” (Discussed later in this chapter).

 

The anti-dumping investigation concerns the dumping of ‘a product’, and the margins of dumping to which Article 2.4.2 of the ADA refers to are the margins of dumping for a product. In addition, a product that is compared to the ‘like product’ is the PUC in an anti-dumping investigation.

 

2. Operating Practices

 

At the time of filing application, the applicant is required to include a detailed description of the product that will be covered under the investigation. This detailed description should include the scope of the product under investigation, the technical characteristics, uses of the PUC, and its HS Code number.

 

It should be the effort of the investigation team to ensure that the proposed ‘scope of the product’ is an accurate reflection of the product, for which the DI is seeking relief.

 

The team should undertake consultations, with the applicant industry or their representative legal counsel as soon as the complete application is received, for understanding the alleged dumped product which should be done before describing the PUC in the initiation notification.

 

A single investigation should normally involve a single article and its like product. However, in certain circumstances, there could be situations where multiple like products are considered in an investigation to avoid subsequent circumvention or to make the ADD measure more effective. This situation arises when products are generally manufactured together or traded together in normal commercial parlance or the value addition between these products is nominal or the product is traded in assembled/semi-assembled/unassembled form.

 

The PUC is defined to include those items only, which are manufactured by the DI. Mere competence without any production or merchant sales may not be sufficient to include an item in the definition of the PUC. Similarly, if an item is produced and consumed only captively (in-house) without any outside sales the DI’s request for an investigation against this product may be considered with caution. The PUC should preferably include those items, which are produced and commercially sold in the domestic market by the respective DI. An exception could be the cases where the applicant is a new industry, who has set up facility for a new product or could be an upstream product of an existing industry and the new industry is facing difficulty in capturing market on account of dumped imports of the product.

 

The team should also examine the fact whether the same product was ever investigated for any trade remedy measure at any point of time in the past.

 

The definition of the PUC is very important in any anti-dumping investigation. If the definition is not specific and is vague or generic, then there is a possibility that it may cover product types which the DI may not be producing or may not be capable of producing leading to overprotection of the DI. Whereas if the description of the PUC is too narrow, it may fail to give relief or protection to the DI. It may also result in ‘circumvention of the duties levied’.

 

The PUC should be defined accurately, and in a manner that it is discernible in terms of technical and measurable parameters distinguishable to the Customs Authorities at the time of importation. The product in all its forms, like liquid or solid, and in all different strengths/concentrations are to be covered in the PUC to avoid circumvention. All nomenclature/descriptions/ known names of the product should be included in the scope of the PUC. The PUC should be defined in terms of:

 

- physical, technical and other properties and characteristics;

- different models / grades / types;

- technical information which would facilitate the exact identification of the products at the time of collection of anti-dumping duties;

- tariff classification (even though the customs headings are for indicative purposes only). The PUC has to be frozen at the stage of initiation. Product scope can only be restricted during the course of the investigation but cannot be enhanced after the initiation. If there are any suggested changes by the interested parties regarding exclusions of some part, then this should be finalized within 3 months from the date of initiation. The changes could be made at the stage of the oral hearing, after receipt of written submissions and rejoinders with the specific approval of DG. No change should be done after this stage.

 

The details regarding the manufacturing process of the PUC and value addition by the DI must be obtained and examined for deciding the PUC at the time of initiation. It may not be justified to initiate any ADD investigation if it is an imported input which is sold in the domestic market without any material value addition.

 

The different grades/form/types/strengths/sizes of product may not mean different products. They are subsets of one product that is proposed to be investigated and hence is alike as far as their essential physical & technical characteristics are concerned, at best they can constitute PCNs (discussed in paragraphs below).

 

The levy and collection of anti-dumping duty are largely dependent on the HS Code of the PUC. Therefore, customs classification in each investigation must be clearly stated. The customs classification should be specified under which the subject goods are mainly imported, even if it is not dedicated. The entire customs heading need not necessarily be the PUC. It is allowed to initiate investigations against products, on a part or subset of any customs heading, or which run across different headings. However, the customs classification is only indicative and is in no way binding on the scope of the investigation.

 

A reference may be made to Tax Research Unit (TRU), Department of Revenue, immediately after initiation to seek their comments on the appropriateness of HS Codes along with the copy of initiation notification.

 

The scope of the PUC can be modified based on the information received by the Authority. However, the amended PUC should be the basis for determining the standing of the DI, dumping margin, injury margin etc.

 

Import data analysis is generally based on the data obtained from the Directorate General of Commercial Intelligence & Statistics (“DGCI &S”).

 

The Rules require the Authority to have authentic Import data for the purpose of issue of the Final Findings. Therefore DGCI&S and DG Systems, DOR, must be asked to provide data for the PUC by sending them Customs Classification Code (HS code), which could be under one heading (dedicated), or more than one headings.

 

3. Differentiation Of PUC In Product Code Numbers  (PCN)

 

The team should be conscious of the need to further dissect the PUC into various product types called Product Code Numbers (PCN). This is especially required in cases where the PUC is produced and traded in different specifications (e.g. grades, GSM, deniers, purity, strength denoted by chemical percentage, contents/ compositions, width, length, etc.).

 

PCNs should be defined taking into account the relevance and economic significance of respective PCNs. This is done with a view to have specific information on product types and to enable the Authority to do a fair comparison (apple to apple comparison).

 

The PCNs can be notified along with the identification of PUC at the time of initiation or at the post-initiation stage after receiving inputs from interested parties namely: the DI, other producers, exporters or importers. The notification of PCN, wherever required, should be done within 60 days from the date of initiation. In any case, it should be brought to the notice of the DG by submission of a file with the proposal that there is a need to notify PCN or that there is no need to notify PCN.

 

The team should attempt to ensure that all the product types are captured within a reasonable number of PCNs/Groups

 

The details of cases where PCN was notified and helped the Authority in finalizing the case are: (1) Hot-rolled flat products of alloy or non-alloy steel in coils of a width up to 2100mm and thickness upto 25mm, (2) Geogrid/Geostrips/ Geostraps made of Polyester or Glass Fiber in all its forms, etc. The cases where product types were not identified at the time of initiation, but differentiation of PUC was claimed by exporters, and Authority decided to notify PCNs after examination of such claims are (1) Elastomeric yarn, (2) Flax Yarn, (3) Aluminium Foil, etc. In a case of wooden flooring, it became imperative to identify PCNs to enable fair and just comparison.

 

Treatment Of Puc In Different Types Of  Investigations

 

Original Investigation

 

The complete process of defining and describing the PUC as mentioned above is carried out during the fresh/original investigation. It is the responsibility of the Investigating team (with the approval of the DG) to clearly and accurately define and describe the scope of the PUC concerned during the fresh/original investigation at the stage of consideration of initiation.

 

Mid-Term Review

 

The scope of PUC, which is defined during the fresh/original investigation, cannot be revised during MTR. However, in cases where it is petitioned that the DI has stopped production of some product types, one can consider narrowing down or exclusion of some product types from the scope of the original PUC. Mid- Term Review in terms of Rule 23(1A) of the Rules is to address the enhancement, reduction or removal of the prevalent antidumping duties.

 

Sunset Review

 

The application of sunset review, in terms of Rule 23(1B) of the Rules can only be brought against the defined scope of PUC in the original investigation. Neither the applicant nor the Authority on its own can alter the scope of the PUC during the sunset review. However, there may be a case for narrowing down the scope of existing Anti-dumping Duty.

 

New Shipper Review

 

The application of the new shipper review, in terms of Rule 22 of the Rules can only be brought against the defined scope of the PUC in the original investigation. Neither the applicant nor the Authority on its own can alter the scope of the PUC during the new shipper review.

 

Anti-Circumvention

 

The PUC remains the same. However, for identification of the product alleged to be circumventing the PUC attracting ADD, the alleged goods are termed as “Product Under Investigation (“PUI”)”. The Authority extends the duty on the PUI in terms of Rule 25 of the AD Rules, this does not alter or amend the scope of the PUC in the original investigation. As a result of positive findings, the duties applicable to PUC get extended to cover the PUI.

 

Countervailing Investigation

 

The complete process of defining and describing the PUC as mentioned above is carried out during the investigation. It is the responsibility of the Investigating team (with the approval of DA) to clearly and accurately define and describe the scope of the PUC concerned during the investigation at the stage of consideration of initiation.

 

Safeguard Investigation

 

The product involved in the investigation is identified from the application filed for the imposition of safeguard duty. It is the responsibility of the Investigating team (with the approval of DA) to clearly and accurately define and describe the scope of the PUC concerned during the investigation at the stage of consideration of initiation.

 

Quantitative Restriction

 

The goods involved in the investigation are as per the application filed for seeking quantitative restriction. It is the responsibility of the Investigating team (with the approval of DA) to clearly and accurately define and describe the scope of the PUC concerned during the investigation at the stage of consideration of initiation.

 

Source: Manual Of Operating Practices For Trade Remedy Investigations