Dumping
Investigation Initiated on SDH Transmission
Equipments from China and Israel
Subject: Initiation
of anti-dumping investigation concerning imports of SDH
transmission equipment originating in or exported from China PR and Israel.
[Ref: F.
No. 14/2/2009-DGAD dated 21st April 2009]
Whereas M/s. Tejas
Networks Limited, (herein after referred to as applicant) have filed an
application before the Designated Authority (hereinafter referred to as the
Authority), in accordance with the Customs Tariff Act, 1975 as amended in 1995
(herein after 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 (herein after referred to as the Rules),
alleging dumping of SDH Transmission Equipment
(herein after referred to as subject goods), originating in or exported from
the China PR and Israel (herein after referred to as “subject countries”) and
requested for initiation of Anti Dumping investigations for levy of anti
dumping duties on the subject goods.
2. AND
WHEREAS, the Authority finds that sufficient prima facie evidence of dumping of
the subject goods from the subject countries, injury to the domestic industry
and causal link between the dumping and injury exist, the Authority hereby
initiates an investigation into the alleged dumping and consequent injury to
the domestic industry in terms of the Rules 5 of the said Rules to determine
the existence, degree and effect of any alleged dumping and to recommend the
amount of antidumping duty, which, if levied, would be adequate to remove the
injury to the domestic industry.
Product under Consideration
3. Product
under consideration in the present petition is Synchronous Digital Hierarchy
Transmission Equipment, its accessories, associated software and its essential
parts and components, in assembled, CKD, and SKD form
or fitted with eventual broadband/cellular equipment. SDH
transmission equipments are also known as multiplexers, Add Drop Multiplexers
(ADM), Multiple Add Drop Multiplexer (MADM), digital
cross-connects
4. Populated
PCBs, power supply, lasers, chassis and software meant
for SDH transmission equipment, etc. consist of
essential parts of SDH transmission equipment and are
within the scope of the product under consideration. However, these components
are within the scope of the product under consideration only if the said
components are meant for SDH transmission equipment
application.
5. SDH transmission equipments can be bought either as
transmission equipment or forming part of another equipment e.g., broadband
and/or cellular (both GSM and CDMA) equipment. SDH transmission equipments forming part of broadband
and/or cellular equipment are also within the scope of the product under consideration.
6. The
product under consideration can be imported either as complete equipment, or in
SKD or CKD form. Further, a number of accessories are
required for connecting/installing SDH transmission
equipment in the network (E1 cables, PCM cables, power
cables, racks, workstations etc.). Software is an integral part of these
equipment, which may be bought either as a part of the equipment or separately.
These all are also within the scope of the product under consideration only if
imparted as part of SDH transmission equipment. The
product under consideration is classified under Chapter 85 of the Customs
Tariff Act, 1975. It is further classified under the heading 851762 of
schedule-I of Custom Tariff Act as per Indian Trade Classification. The classification
is, however, indicative only and is in no way binding on the scope of the
present investigation.
Domestic Industry Standing
7. The
application has been filed by Tejas Networks
Limited, Bangalore, who is the major producer of the subject product in
India. There are four other producers of the product in India. The petition is
supported by Measurement & Control Limited. The
Authority has determined that (a) production of the applicant constitutes a
major proportion in Indian production; (b) domestic producers expressly
supporting the application account for significantly more than 50 percent of
production of the like product produced by the domestic industry; and (c) the
application has been made by or on behalf of the domestic industry.
8. The Authority
after examining the above, determines that the applicant constitutes domestic
Industry within the meaning of the Rule 2 and the application satisfies the
criteria of standing in terms of Rule 5 of the Rules supra.
Countries Involved
9. The
countries involved in the present investigation are China PR and Israel, and
therefore will be referred to as Subject Countries for the purposes of present
investigation.
Like Article
10. The
applicant has claimed that there is no difference in the subject goods produced
by the domestic industry and the subject product imported from the subject
countries. The product is being imported by the importers and consumers. The
consumers are using the domestic and imported product interchangeably.
Applicant has claimed that the two are technically and commercially
substitutable. The products produced by the domestic industry and imported from
the subject country are identical in all essential characteristics and
therefore, are like articles within the meaning of the Rules. For the purpose
of the present investigation, the product produced by the applicant is being
treated as like article to the product imported from the subject countries
within the meaning of Rules supra.
Normal Value
11. The
applicant has claimed that China should be treated as non market economy and
the normal value in China may be based on cost of production in India. In case
of Israel, applicant has determined normal value in Israel based on constructed
cost of production, including SGA and profit.
12. Applicant
has suggested that subject product is produced and sold in USA and Europe and
these countries can be treated as surrogate country for China. Applicant has
furnished names and addresses of the producers in these countries. Interested
parties are invited to make their submissions in this regard.
13. Normal
value has been determined separately for each model of the product under
consideration. There is sufficient evidence with regard to normal value to
justify initiation of an anti-dumping investigation in terms of the Rules.
Export Price
14. Export
price of the subject goods from the subject countries has been determined by
considering actual known imports of the product under consideration in India.
Price adjustments have been claimed @ 10% of the CIF import price. The
applicant has however claimed that even if price adjustments are not allowed,
the dumping margins are significantly high.
15. Export
price has been determined separately for each model of the product under
consideration. There is sufficient evidence with regard to Export Price to
justify initiation of an anti-dumping investigation in terms of the Rules.
Dumping Margin
16. Normal
values and export prices have been compared at ex-factory level, which shows
significant dumping margin in respect of the subject countries.
17. There is
sufficient evidence that the normal value of the subject goods in subject
countries is significantly higher than the ex-factory export price indicating,
prima facie, that the subject goods are being dumped by exporters from the
subject countries into the Indian market.
18. Applicant
has argued that the Authority should consider the orders placed by the
consumers on the Foreign Producers during the relevant period, against which
the supplies have not been completed during the relevant period, for the
purpose of determination of dumping margin. Applicant argued that these orders
placed represent “sale made” against which the supplies would be affected in
due course. Applicant has argued that material term of sale in this product is
the order placed by the consumers and the fact of supplies made subsequent to
the proposed period is of little consequence. The Authority has however at this
stage determined dumping margin only on the basis of orders placed by the
consumers and supplies known to have been effected during the relevant period.
The interested parties may make their submissions with regard to appropriateness
of including orders placed and supplies not completed for the purpose of
determination of dumping margin.
Injury and Causal Link
19. The
applicant has furnished information on various parameters relating to material
injury. Parameters such as decline in market share, significant imports in
absolute terms as also relative to production and consumption in India,
significant price undercutting leading to price depression in the market, price
underselling, decline in profitability, return on investments and cash flow
prima facie collectively and cumulatively indicate that the domestic industry
has suffered material injury on account of dumping of subject goods from
subject countries.
Initiation of Anti Dumping Investigations
20. The
Designated Authority, in view of the foregoing paragraphs, initiates
anti-dumping investigations into the existence, degree
and effect of alleged dumping of the subject goods originating in or exported
from the subject countries.
Period of Investigation (POI)
21. The
period of Investigation for the purpose of the present investigation is
April-Dec 2008 (9 months). The injury investigation period will, however, cover
the period 2005-06, 2006-07 2007-08 and the POI.
Imposition of Duty on Retrospective Basis
22. The applicant
has requested for retrospective imposition of duty on the grounds that there is
history of dumping, dumping margin determined are too significant, exporters
are well aware that they are resorting to dumping and imports are/should be
well aware that the exporters are dumping. There is massive imports volume in
relatively short period and injury to the domestic industry is aggravating.
23. On the
basis of the above, Authority considers that there is prima facie evidence
justifying imposition of retrospective duty. Interested parties are requested
to make submissions in this regard.
Submission of Information
24. The
exporters in the subject country, Governments through the Embassies, the
importers in India known to be concerned and the
domestic industry are being addressed separately to submit relevant information
in the form and manner prescribed and to make their views known to the
Designated Authority at the following address:
The
Designated Authority
Directorate General of Anti Dumping & Allied Duties,
Ministry of Commerce & Industry,
Department of Commerce,
Government of India,
Room No. 240, Udyog Bhavan,
New Delhi – 110011.
25. As per
Rule 6(5) of Rule supra, the Designated Authority is also providing opportunity
to the industrial users of the article under investigation and to
representative consumer organizations, who can furnish information relevant to
the investigation regarding dumping, injury and causality. Any other interested
party may also make its submissions relevant to the investigation within the
time limit set out below.
Time Limit
26. Any
information relating to the present investigation should be sent in writing so
as to reach the Authority at the address mentioned above not later than forty
days from the date of publication of this notification. The known exporters and
importers, who are being addressed separately, are however required to submit
the information within forty days from the date of the letter addressed to them
separately.
Submission of Information
27. In terms
of Rule 6(7) of the Rules, the interested parties are required to submit
non-confidential summary of any confidential information provided to the
Authority and if in the opinion of the party providing such information, such
information is not susceptible to summarization, a statement of reason thereof,
is required to be provided.
28. In case
where an interested party refuses access to, or otherwise does not provide
necessary information within a reasonable period, or significantly impedes the
investigation, the Designated Authority may record findings on the basis of
facts available and make such recommendations to the Central Government as
deemed fit.
Inspection of Public File
29. In terms
of Rule 6(7), the Designated Authority maintains a public file. Any interested
party may inspect the public file containing non-confidential version of the
evidence submitted by interested parties.