DGAD Revives Anti-dumping Duty on Tiles from China after Five Year Sunset of 2008 Measure

[DGAD Initiation Notification No.14/14/2014-DGAD dated 13^th October 2015]

Subject: Initiation of Anti Dumping investigation concerning imports of “Glazed/Unglazed Porcelain/Vitrified tiles in polished or unpolished finish with less than 3% water absorption”, originating in or exported from China PR.

Gujarat Granito Manufacturers Association and Sabarkantha District Ceramic Association (hereinafter also referred to as the applicants) have filed an application before the Designated Authority (hereinafter also referred to as the Authority) in accordance with the Customs Tariff Act, 1975 as amended from time to time (hereinafter also referred to as the Act) and 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) for initiation of anti-dumping investigation and imposition of anti dumping duty concerning imports of vitrified/porcelain tiles (hereinafter also referred to as the subject goods), originating in or exported from China PR (hereinafter also referred to as the subject country).

2. And whereas, the Authority prima facie finds that sufficient evidence of dumping of the subject goods, originating in or exported from the subject country, ‘injury’ to the domestic industry and causal link between the alleged dumping and ‘injury’ exist to justify initiation of an anti-dumping investigation; the Authority hereby initiates an investigation into the alleged dumping, and consequent injury to the domestic industry in terms of Rule 5 of the Rules, to determine the existence, degree and effect of alleged dumping and to recommend the amount of anti-dumping duty, which if levied, would be adequate to remove the ‘injury’ to the domestic industry.

Domestic Industry & Standing

3. The Application has been filed by Gujarat Granito Manufacturers Association and Sabarkantha District Ceramic Association, on behalf of domestic producers of the product under consideration. Information relevant to the present investigation has been provided on behalf of 24 participating producers, namely Ricasil Ceramic Industries Private Limited, Comet Granito Pvt. Ltd., Cengres Tiles Ltd, Sunshine Ceramics Co., Ltd, Sims Ceramic Pvt. Ltd., Wintel Ceramic Pvt. Ltd., Simpolo Vitrfied Pvt. Ltd., Zeal Top Granito Pvt. Ltd., Tocco Ceramic Pvt. Ltd., City Tiles, Sanford Vitrified Pvt Ltd, Red Stone Granito Ltd., Lexus Granito Pvt. Ltd., Silk Touch Vitrified Pvt Ltd, Qutone Granito Pvt Ltd, Simolex Vitrified Pvt Ltd, Olwin Tiles Pvt. Ltd., Coral Granito Pvt. Ltd, Duracon Vitrified Pvt. Ltd., Varmora Granito Pvt. Ltd., Metro City Tiles Pvt Ltd, Affil Vitrified Pvt Ltd, Sentosa Granito Pvt. Ltd. and Casa Tiles Pvt. Ltd.

The application has been supported by 13 other domestic producers of subject goods, namely, Clayris Ceramic Pvt Ltd, Ramoji Granite Limited, Icon Granito Pvt. Ltd., Lorenzo vetrified pvt. Ltd., New Pearl Vitrified Pvt. Ltd., Alliance Vitrified Pvt. Ltd., Famous Vitrified Pvt. Ltd., Blueart Granito Pvt. Ltd., Sun World Vitrified Pvt. Ltd., Senso, Siyaram Vitrified Pvt. Ltd., Savio Ceramica Pvt Ltd and Shubh Tiles Pvt. Ltd.

4. As per the evidence available on record, certain domestic producers namely Kajaria Ceramics Ltd, H & R Johnson (India), Somany Ceramics Ltd, Asian Granita India Limited, Silica Ceramica Private Ltd, Commander Vitrified Pvt Ltd, Vintage Tiles Pvt Ltd, Cosa Ceramic Pvt. Ltd, Acer Granito Pvt. Ltd., Jaxx Vitrified Pvt. Ltd, Antique Marbonite Pvt. Ltd., Oracle, RAK Ceramics Ltd, New Vardhman Vitrified Pvt Ltd., have been considered as ineligible domestic producers on account of significant imports made by them or their relationship with importers/exporters of subject goods. The production of the applicant industries along with the production of the eligible supporting industries constitutes “a major proportion” of the domestic production. The Authority, therefore, determines that the applicants constitute eligible domestic industry within the meaning of Rule 2 (b) of the Anti Dumping Rules and the application satisfies the criteria of standing in terms of Rule 5 (3) of the Rules supra.

Product under consideration

5. The product under consideration for the purpose of present investigation is imports of “Glazed/Unglazed Porcelain/Vitrified tiles in polished or unpolished finish with less than 3% water absorption”, originating in or exported from China PR. Vitrified/Porcelain tiles can be glazed or unglazed and are used primarily for coverings for floors as well as on walls. These tiles are used in buildings, homes, restaurants, cinema halls, airports, swimming pools, railway stations etc. Vitrified/Porcelain tiles are a kind of ceramic tiles, but are made with slightly different elements. These tiles are made after vitrification process. Product under consideration is mainly produced and sold in two sizes (i) 600 mmX600 mm (ii) 800 mmX800 mm. Imports are also mainly taking place in these two sizes.

6. Subject goods are classified under Chapter 69. The scope of the product under consideration in this case under CTA falls under 69.07, 69.08 or 69.14. Glazed porcelain tiles being imported under Chapter Heading 69.14 are substitutable with the unglazed tiles of Chapter Heading 69.07 in terms of properties, use, functions, distribution, channels etc. The customs classification is indicative only and in no way it is binding upon the product scope.

Like Article

7. The applicants have claimed that there is no known difference between the subject goods exported from subject country and that produced by the domestic industry. As submitted by the applicants, the product under consideration produced by the domestic industry and imported from subject country are comparable in terms of essential product characteristics such as physical & chemical characteristics, manufacturing process & technology, functions & uses, product specifications, pricing, distribution & marketing and tariff classification of the goods. Consumers can use and are using the two interchangeably. The applicants have further claimed that two are technically and commercially substitutable and, hence, should be treated as ‘like article’ under the Rules. Therefore, for the purpose of the present investigation, the Authority treats the subject goods produced by the applicants in India as ‘Like Article’ to the subject goods being imported from the subject country.

Country involved

8. The present investigation is in respect of alleged dumping of the product under consideration from China PR (referred to as the “subject country”).

Normal Value

9. Applicants have claimed that China PR should be treated as a nonmarket economy and determined normal value in accordance with Para 7 and 8 of Annexure I of the Rules. The applicants have claimed normal value for China PR on the basis of cost of production in India, duly adjusted. In terms of Para 8 in Annexure 1 to the Rules, it is presumed that the producers of the subject goods in China PR are operating under non market economy conditions. In view of the above non-market economy presumption and subject to rebuttal of the same by the responding exporters from china PR, normal value of the subject goods in China PR has been estimated in terms of Para 7 of Annexure 1 to the Rules.

Export Price

10. The applicants have submitted that the prices reported in the DGCI&S data do not reflect the actual import price of the product under consideration. There exists significant difference between prices reported by DGCI&S and the prices at which actual imports are made. The applicants have stated that the Customs authorities have fixed minimum import price for the subject goods and therefore the import price reported in DGCI&S data being assessable value of imports representing the price at which customs authorities have assessed the imports. They have therefore claimed that the price at which the goods are imported and the price at which the goods have been assessed for clearance are two different figures in the present case. Therefore, applicants have considered import price on the basis of imports made by certain major domestic producers, who are also major importers of the subject goods, for the purpose of determining export price. The Authority has accepted the argument of the applicants prima facie for the purpose of initiation of this investigation, subject to further investigation in due course. Price adjustments have been claimed on account of ocean freight, marine insurance, port expenses, inland freight, bank charges and VAT adjustment to arrive at the net export price.

Dumping Margin

11. The normal value has been compared with the export price at ex-factory level. There is sufficient prima facie evidence that the normal value of the subject goods in the subject country are higher than the ex-factory export price, indicating, that the subject goods are being dumped into the Indian market by the exporters from the subject country. The dumping margins are estimated to be above de minimis.

Injury and Causal Link

12. Information furnished by the applicants has been considered for assessment of injury to the domestic industry. The applicants have furnished evidence regarding the injury having taken place as a result of the alleged dumping in the form of increased volume of dumped imports, price undercutting, price underselling and consequent significant adverse impact in terms of decline in production, sales, capacity utilisation profits, return on capital employed, and cash flow during the POI, to the domestic industry. There is sufficient prima facie evidence of the ‘injury’ being suffered by the domestic industry caused by dumped imports from subject country to justify initiation of an antidumping investigation.

13. The applicants have claimed that imports from the subject country have increased during Oct.14-March’15 period with imposition of anti dumping duty by Brazil and decline in imports in Brazil. Applicants have submitted imposition of anti dumping duty on subject country by Brazil, significant increase in imports in short period of time, decline in import price, significant surplus capacity with the producers in subject country and weak demand prevailing in subject country as grounds for claiming threat of material injury to the domestic industry from subject imports.

Period of Investigation (POI)

14. The period of investigation for the present investigation is from 1st April, 2014 to 31st March 2015 (12 months). The injury investigation period will however cover the periods Apr’11-Mar’12, Apr’12-Mar’13, Apr’13-Mar’14 and the period of investigation.

Retrospective imposition of duties

15. The applicants have requested for retrospective imposition of duty as the injury is claimed to be caused to the domestic industry by a history of massive dumping of subject product. They have further submitted that considering the huge volume of such imports and threat of material injury to the domestic industry, unless duty is recommended retrospectively, the desired remedial measures of anti-dumping duties may not be accomplished. The interested parties may make their submissions in this regard.

Submission of information

16. The known exporters in the subject country, the Government of the subject country through their embassy in India, the importers and users in India known to be concerned with the product are being addressed separately to submit relevant information in the form and manner prescribed and to make their views known to the Authority at the following address:

The Designated Authority,

Directorate General of Anti-Dumping & Allied Duties,

Ministry of Commerce & Industry, Department of Commerce

4th Floor, Jeevan Tara Building, 5 Parliament Street,

New Delhi -110001.

17. Any other interested party may also make its submissions relevant to the investigation in the prescribed form and manner within the time limit set out below.

Time limit

18. Any information relating to the present investigation and any request for hearing should be sent in writing so as to reach the Authority at the address mentioned above not later than forty days (40 Days) from the date of publication of this Notification. If no information is received within the prescribed time limit or the information received is incomplete, the Authority may record its findings on the basis of the facts available on record in accordance with the Anti-dumping Rules.

19. All the interested parties are hereby advised to intimate their interest (including the nature of interest) in the instant matter and file their questionnaire responses and offer their comments to the domestic industry’s application regarding the need to continue or otherwise the Antidumping measures within 40 days from the date of initiation of this investigation.

Submission of Information on Non-Confidential basis

20. In case confidentiality is claimed on any part of the questionnaire’s response/submissions, the same must be submitted in two separate sets (a) marked as Confidential (with title, index, number of pages, etc.) and (b) other set marked as Non Confidential (with title, index, number of pages, etc.). All the information supplied must be clearly marked as either “confidential” or “non-confidential” at the top of each page.

21. Information supplied without any confidential marking shall be treated as non confidential and the Authority shall be at liberty to allow the other interested parties to inspect any such non-confidential information. Two (2) copies of the confidential version and five (05) copies of the non confidential version must be submitted by all the interested parties.

22. For information claimed as confidential; the supplier of the information is required to provide a good cause statement along with the supplied information as to why such information cannot be disclosed and/or why summarization of such information is not possible.

23. The non-confidential version is required to be a replica of the confidential version with the confidential information preferably indexed or blanked out /summarized depending upon the information on which confidentiality is claimed. The non-confidential summary must be in sufficient detail to permit a reasonable understanding of the substance of the information furnished on confidential basis. However, in exceptional circumstances, parties submitting the confidential information may indicate that such information is not susceptible to summarization; a statement of reasons why summarization is not possible must be provided to the satisfaction of the Authority.

24. The Authority may accept or reject the request for confidentiality on examination of the nature of the information submitted. If the Authority is satisfied that the request for confidentiality is not warranted or the supplier of the information is either unwilling to make the information public or to authorize its disclosure in generalized or summary form, it may disregard such information.

25. Any submission made without a meaningful non-confidential version thereof or without a good cause statement on the confidentiality claim may not be taken on record by the Authority. The Authority on being satisfied and accepting the need for confidentiality of the information provided; shall not disclose it to any party without specific authorization of the party providing such information.

Inspection of Public File

26. In terms of rule 6(7) any interested party may inspect the public file containing non-confidential versions of the evidence submitted by other interested parties.

Non-cooperation

27. In case any interested party refuses access to and otherwise does not provide necessary information within a reasonable period, or significantly impedes the investigation, the Authority may declare such interested party as non-cooperative and record its findings on the basis of the facts available to it and make such recommendations to the Central Government as deemed fit.