TMI BlogSafeguard investigation concerning imports of Dioctyl Phthalate (DOP) –Final findings under Rule 11 of Customs Tariff (Identification and Assessment of Safeguard Duty) Rules, 1997.X X X X Extracts X X X X X X X X Extracts X X X X ..... d (c) PCL Oil Solvent Ltd and (d) N.K. Polymers Additives Mfg .Co, seeking imposition of Safeguard Duty on imports of Dioctyl Phthalate (hereinafter referred to as DOP) into India alleging that increased imports of Dioctyl Phthalate was causing and/or threatening to cause serious injury to the domestic producers of Dioctyl Phthalate in India. The Notice of Initiation of safeguard investigation concerning imports of Dioctyl Phthalate into India was issued on 23rd May, 2012 and was published in the Gazette of India Extraordinary on the same day vide GSR 383(E). 2. A copy of the Notice of Initiation dated 23rd May, 2012 along with copy of non-confidential version of the application filed by the Domestic Industry were forwarded to the Central Government, in the Ministry of Commerce and other ministries concerned, Govts of exporting countries through their Embassies/ High Commission in New Delhi and all known interested parties listed below in accordance with Rule 6(2) and 6(3) of the Customs Tariff (Identification and Assessment of Safeguards Duty) Rules, 1997: Domestic Producers a. KLJ Plasticizers Limited, b. Payal Polyplast Pvt Ltd. c. PCL Oil Solvent Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aman aa. Poonam International, 195/2, Chikkanahalli Road, Bommanahalli, Bangalore 560068 bb. Royal Cushion Vinyl Products Ltd, Plot No. 55, Village, Garadhia, Taluka, Sayli, Distt Baroda, Gujarat cc. Viny Royal Plasticoats Ltd, Plot No. 319, Baroda, Godhra Road, Baska Village Halol, Panchmahal Exporters a. M/s. BASF Petronas Chemicals, SDN B DC 802, Central Tower, Wisma Conspant 1, Jalan SS16/4, Subang Jaya, 47500, Malaysia b. Chemcross Inc, Aisa, Yongsei Bldg; 4th Floor, Namdaeun Road, 5-KA, Chung-Ku, Seoul, South Korea c. Humade Corporation, Room No. 1505, Master Tower B/D 553, Dowha Dong, Mapo Gu, Seoul, 121-748, South Korea d. M/s Woori Pand Corporation, Rm. 905, Olympia Bldg. No. 196, Jamsilb On Dorg Sorgpa Gu, Seoul, South Korea e. The Normandy Group, S.A., Temple Financial Centre, P.O. Box 228, Leeward Highway, Providenciales, Turks and Cacos Islands, British West Indies, Netherlands f. Gulf Resources Development Corporation, P.O. Box 61283, Jebal Ali, Dubai, U.A.E. g. Petrochem Middle East FZE, P.O. Box 17028, Jabel Ali, Dubai, U.A.E. h. KASB Petroleum FZ Co., P.O. Box 117280, Dubai, U.A.E. i. UPC Technology Corporation, 5F, 20, Lane 478, Rueigua ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the public hearing were requested to file a written submission of the views presented orally in terms of sub rule (6) of rule 6 of the Customs Tariff (Identification and Assessment of Safeguard Duty) Rules, 1997 by 1 st October, 2012. Copy of written submissions filed by one interested party was made available to all the other interested parties. Interested parties were also given an opportunity to file rejoinders, if any, to the written submissions of other interested parties by 4th October, 2012. All the views expressed by the interested parties either in the written submissions or in the rejoinders were examined and have been taken into account in making appropriate determination. The Govt. of Taiwan and the Govt. of Republic of Korea filed post hearing written submissions through emails dated 25/9/12 and 1/10/12 respectively with no hard copies filed. M/s LCPMA also filed hard copy of post hearing written submissions on 5/10/12. M/s LCPMA also filed hard copy of post hearing rejoinder submissions on 5/10/12, i.e. after the due date. However, all these procedural lapse/delay have been considered and are condoned. 9. All the views expressed by the interested parties and ot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... industry is facing the problem of accumulated inventories due to decline in market share affecting production and capacity utilization. i. In order to sustain in the market, the domestic industry has to reduce its prices far lower than the cost of sales thereby suffering significant losses. At the same time, the profitability and consequently cash profits and return on investment have started declining in the most recent period, which had actually improved previously. j. Threat of serious injury is established by following factors. i. The price difference between domestic and imported product is significant; ii. The foreign producers are holding significant unutilized capacities. Resultantly, the foreign producers are looking for additional markets to the extent possible; iii. The major Chinese market has clogged for the export oriented producers of Korea and Taiwan, whereas the Indian market is quite strong; iv. There has been restriction in usage of DOP in Europe worsened by the crisis in Europe. Due to such restriction, the producers/exporters started looking for new markets for their products and India with its growing demand offered a better opportunity for them t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mestic industry. d. There has been an increase in production, capacity, capacity utilization and sales of domestic industry. Further, the domestic industry has excess capacity not in concurrence with the demand and hence imports are not causing any losses to domestic industry. e. Any loss of domestic industry is due to low capacity utilization of domestic industry which in turn is due to excess built up capacities and imports of domestic industry. f. Being the major users of DOP, its members would be the major affected parties in case of safeguard duty imposition, since its members product does not get any protection. g. Thus safeguard duty should not be imposed if it is against Public interest as held in Supreme Court in Food Corpn. of India v. Kamdhenu Cattle Feed Industries (1992 Indlaw SC 426), National Buildings Construction Corporation v. S. Raghunathan and Others reported in 1998 (7) SCC 66, United Phosphorous in 1999 for imposition of safeguard duty on white/yellow phosphorous, United Phosphorous v. Director General (Safeguards), 2000 (118) E.L.T. 326 (Del.), Phosphorous Ltd. Versus Director General (Safeguards) 2000 (118) E.L.T. 310 (S.C.), h. There is no unfore ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of safeguard duty. The duty is imposed to facilitate the positive adjustment planned/provided by the domestic industry. On submissions made by Government of Korea a. The actual data provided for the entire period 2011-12, comparison of which with the annualized data provided earlier would show that there is no significant difference between the annualized data and the actual data. b. It is reiterated that the imports of Dioctyl Phthalate have increased in absolute terms as also in relation to production and consumption. c. Individual country movements in imports are entirely irrelevant under safeguard investigations. d. As a result of decline in demand for the eventual end product in Europe and coupled with significant additions to capacities in China (for Phthalic Anhydride and DOP), procurement of DOP by the Chinese manufacturers declined very steeply. e. The domestic industry performance is not linked to safeguard duty on Phthalic Anhydride. F. Rejoinder by importers/user industry Leather Cloth and Plastics Manufacturers Association a. Stake of exporters to Indian market is very small and hence they have not participated. Non participation does not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uct under investigation: 5. The product under investigation is Dioctyl Phthalate (an organic compound) and abbreviated as DOP . It is also known as Bis (2-ethylhexyl) phthalate, commonly abbreviated DEHP. This product is a colorless viscous liquid, soluble in oil, but not in water. It possesses good plasticizing properties. Being produced on a massive scale by many companies, it has acquired many names and acronyms, including BEHP and di-2-ethyl hexyl phthalate. It is widely used as a plasticizer in manufacturing of articles made of PVC. Plastics may contain 1% to 40% of DEHP. It is also used as a hydraulic fluid and as a dielectric fluid in capacitors. DEHP also finds use as a solvent in glow sticks as it has suitable properties and the low cost. It has been used as a plasticizer in medical devices such as intravenous tubing and bags, catheters, nasogastric tubes, dialysis bags and tubing, and blood bags, transfusion tubing and air tubes. 6. Dioctyl Phthalate (DOP) is classified under Customs sub-heading No. 29173920 under the Customs Tariff Act, 1975. 7. The product under investigation is Dioctyl Phthalate (an organic compound) and abbreviated as DOP . It is also known a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... I) within the meaning of Section 8B(6)(b)(iii) of the Safeguard Duty Rules 1997. C. Period of Investigation (POI): 12. The Customs Tariff Act, 1975, Customs Tariff (Identification and Assessment of Safeguard Duty) Rules, 1997, Agreement on Safeguard and the relevant Article XIX of GATT do not specifically define what the Period of Investigation should be. From several case laws on safeguard measures, it is clear that neither the domestic laws on Safeguard nor Agreement on Safeguard and Article XIX of GATT provides specific guidelines on the period of investigation except the fact that the relevant investigation period should be sufficiently long to allow conclusion to be drawn on increased imports and serious injury. 13. The applicants in the instant case submitted import and injury data from 2009-10 to 2011-12 (upto Dec 2011) contending that year 2008-09 should be ignored and information should be considered from 2009-10 onwards for the present investigations, as the period 2008-09 was an abnormal period where industries both at domestic and international level, not only in the product under consideration, but in a large number of sectors, suffered due to global recessio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rified data has been taken into consideration for injury analysis. However, the data upto Q3 of 2011-12 has been updated for the entire year 2011-12, in respect of various economic parameters, as per certified cost statements furnished by the applicants. The IBIS import data for the year 2011-12 has been considered keeping in view the following facts- (a) DGCIS data for 2011-12 available with the Directorate is not for the complete financial year, in the absence of which it had to be annualized which would not have been appropriate, keeping in view the objections raised by one of the interested party namely Korean Govt against annualization of import data in their post hearing submissions. (b) IBIS data for 2011-12 is available for the whole year and is also transaction wise, which has also been demanded by one of the interested party namely LCPMA in their post hearing submissions. (c) Even the domestic industry has also questioned the accuracy of DGCIS data for the year 2011-12 on the ground that it does not reflect complete transaction wise import of Dioctyl Phthalate in the country which is crucial for the injury analysis. They have submitted transaction wise import data f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its evaluation of whether the investigation by the Argentine authorities demonstrated the required increase in imports under Articles 2.1 and 4.2(a), the Panel in Argentina-Footwear case 2 stated the following: the Agreement requires not just an increase (i.e., any increase) in imports, but an increase in "such quantities" as to cause or threaten to cause serious injury. The Agreement provides no numerical guidance as to how this is to be judged, nor in our view could it do so. But this does not mean that this requirement is meaningless. To the contrary, we believe that it means that the increase in imports must be judged in its full context, in particular with regard to its "rate and amount" as required by Article 4.2(a). Thus, considering the changes in import levels over the entire period of investigation, as discussed above, seems unavoidable when making a determination of whether there has been an increase in imports "in such quantities" in the sense of Article 2.1. (emphasis added) 23. With regard to the nature of the increase in imports, the Appellate Body in Argentina Footwear (EC) 3 , in contrast to the Panel, held that the increase in imports must have been recent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... extracts are as follows: 7.024 [W]e note that the Appellate Body in Argentina-Footwear Safeguard found that the phrase is being imported implies that the increase in imports must have been sudden and recent . According to Korea, the phrase is being imported in such increased quantities refers to the period immediately preceding the authority s decision . The word recent which was used by the Appellate Body in interpreting the phrase is being imported is defined as not long past; that happened, appeared, began to exist, or existed lately . In other words, the word recent implies some form of retrospective analysis. It does not imply an analysis of the conditions immediately preceding the authority s decision. Nor does it imply that the analysis must focus exclusively on conditions at the very end of the period of investigation. We consider that an analysis that compares the first semester of 1998 with the first semester of 1999 is not inconsistent with the requirement that the increase in imports be recent . 26. The analysis of the increased imports of Dioctyl Phthalate has been conducted in the light of the above mentioned evaluat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase, the imposition of safeguard duty will be made on a non-discriminatory basis and therefore any imports made, whether by domestic industry or otherwise, would be liable for payment of safeguard duty. 27. In view of the above, I have determined increased imports by excluding the imports made by the domestic producers themselves from the total imports of Dioctyl Phthalate for the POI. 28. It is determined that Dioctyl Phthalate has been imported into India (after excluding the imports made by domestic producers) in such increased quantities and under such conditions in absolute terms as well as compared to the domestic production and consumption as to cause or threaten to cause serious injury to the domestic industry which is as under: (a) Imports: Description Unit 2008-09 2009-10 2010-11 2011-12 Total Imports MT 40,608 35,210 35,346 41,632 Imports made by DI MT 13,312 13,726 12,798 2,665 Imports(excluding DI imports) MT 27,296 21,484 22,548 38,967 29. There is a surge in import both in ab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2011, it is noted that individual country movements in imports are entirely irrelevant under safeguard investigations because cumulative imports from various sources have been considered for surge in imports. G. Unforeseen Developments: 33. It is noted that there is no specific requirement either in Indian Rules or in WTO Agreement on Safeguards on the methodology that should be followed for analyzing unforeseen developments. The Agreement on Safeguard also does not make any prescription with regard to the methodology that should be followed or the parameters that must be met in deciding unforeseen developments. However, it is important to examine the circumstances which have led to increased imports. 34. In Argentina Footwear (EC) and Korea Dairy, the Appellate Body held that any Safeguard measure imposed after the entry into force of the WTO Agreement must comply with the provisions of both the Agreement on Safeguards and Article XIX of the GATT 1994. Article XIX of GATT 1994 states as follows:- 1. (a) If, as a result of unforeseen developments and of the effect of the obligations incurred by a contracting party under this Agreement, including tariff concessions, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... these producers are looking for other market for exports of DOP. The decline in exports of Dioctyl Phthalate in China from the major exporting countries can be seen from below: Korea Exports of Dioctyl Phthalate Period World China 2007 2,38,411 1,40,534 2008 2,11,208 1,08,002 2009 2,07,669 86,883 2010 1,85,132 68,172 2011 1,93,678 32,404 Source: Korea Customs Malaysia Exports of Dioctyl Phthalate Period World China 2007 75,954 18,262 2008 62,768 9,969 2009 68,026 16,689 2010 62,344 13,959 2011 37,409 3,224 Source: Malaysia Customs Taiwan Exports of Dioctyl Phthalate Period World China 2007 1,60,843 1,32,649 2008 1,08,075 81,115 2009 1,73,896 1,55,783 2010 84,597 70,212 2011 46,343 19,502 Source: Taiwan Customs b) Imports from these countries to India ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ices to a reasonable level, according to decisions made at the country's central economic work conference earlier this month. d) Whereas initially China, which was a net importer of DOP and Phthalic Anhydride, it started exporting to the Eurozone and other Countries given its excessive capacity and nil demand in domestic market post-Olympics. But in the light of Eurozone debt crisis the demand of DOP in those markets is unstable, leading DOP and upstream Phthalic Anhydride producers to dump their inventories at whatever price available. ICIS PRICING (PHTHALIC ANHYDRIDE), 16th December 2011 This means that PA producers could be in for a rough ride moving into 2012, as PA is one of the feedstock s used in the production of dioctyl phthalate (DOP). DOP is used heavily in the production of construction materials and consumer goods. The euro zone is a large importer of these products from both China and southeast. Regional traders, however, cautioned that the price rally could be short-lived, because of global economic uncertainty and the euro zone financial crisis. ICIS PRICING (PHTHALIC ANHYDRIDE), 23 December, 2011 Traders and buyers said that they were also con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in addition to a technical examination of all the listed factors and any other relevant factors, it is essential that the overall position of the domestic industry is evaluated, in light of all the relevant factors having a bearing on the situation of that industry. 42. In Argentina Footwear (EC) 6 , the Appellate Body discussed the relationship between the definition of serious injury in Article 4.1(a) and the requirement of an evaluation of all relevant factors in Article 4.2(a): [I]t is only when the overall position of the domestic industry is evaluated, in light of all the relevant factors having a bearing on a situation of that industry, that it can be determined whether there is a significant overall impairment in the position of that industry. Although Article 4.2(a) technically requires that certain listed factors must be evaluated, and that all other relevant factors must be evaluated, that provision does not specify what such an evaluation must demonstrate. Obviously, any such evaluation will be different for different industries in different cases, depending on the facts of the particular case and the situation of the industry concerned. An evaluation of ea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry is based on evaluation of the overall position of the domestic industry, in light of all the relevant factors having a bearing on the situation of that industry. 45. It is held that the increased imports of Dioctyl Phthalate have caused and are threatening to cause serious injury to the domestic producers of Dioctyl Phthalate as indicated by the following factors. a. Demand/consumption: 46. Demand or apparent consumption of the product in India has been determined as the sum of sales of Domestic Industry and imports from all sources (excluding imports made by domestic industry). It is noted that the demand of Dioctyl Phthalate has shown a positive trend throughout the period. Year Unit 2008-09 2009-10 2010-11 2011-12 Sales of Domestic Industry MT 58,880 67,959 72,035 65,221 Sales of other producers MT 3,532 4,759 7,121 1,905 Imports Volume MT 27,296 21,484 22,548 38,967 Total Demand/Consumption MT 89,708 94,202 101,704 106,093 47. It is seen that with the inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 2011-12 Sales Volume - Domestic MT 58,880 67,959 72,035 65,221 Sales Volume - Exports MT 1,326 1,892 4,274 10,023 Sales Volume - Total MT 60,206 69,851 76,309 75,244 52. It is seen that the domestic sales grew from 58,880 MT (2008-09) to 67,959 MT (2009-10) and were 72,035 MT in 2010-11. The domestic sales however, declined thereafter to 65,221 MT in 2011-12. The domestic sales of the domestic industry have declined in the most recent period. Even rise in exports did not improve the condition in 2011-12 when DI incurred losses and inventory kept piling up. e. Capacity Utilization: 53. Capacity utilization of the domestic industry was as follows Particulars Unit 2008-09 2009-10 2010-11 2011-12 Plant Capacity MT 155,750 155,750 155,750 190,750 Production of PUC MT 60,242 69,468 77,492 74,943 Capacity utilization % 39% 45% 50% 39% 54. It is seen that the capacity u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and return on investment. 59. The trend in cost of production and selling price is also examined. It is seen that whereas both the cost of production and selling price increased, the increase in selling price is less than the increase in cost of production. Particulars Unit 2008-09 2009-10 2010-11 2011-12 Cost of Production Indexed 100 87 113 127 Selling price Indexed 100 93 120 126 (Source : Domestic Industry) 60. The reasons for increase in cost of production were also examined. It is noted that the major raw material for manufacture of Dioctyl Phthalate is Phthalic Anhydride(PAN) and 2 EHA. The price movement in Phthalic Anhydride 2 EHA prices is as follows: Particulars Unit 2008-09 2009-10 2010-11 2011-12 Cost of Production Indexed 100 87 113 127 Price of Phthalic Anhydride Indexed 100 94 100 129 Prices of 2EHA Indexed 100 100 148 169 Total Raw Material Cost ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the domestic industry contended, was due to global recessionary effect. The volume of imports both in absolute terms and in relation to production and consumption declined in 2009-10 after the recessionary effect was subsided. However, the imports surged thereafter significantly both in absolute terms and in relation to production and consumption in India. As a result of significant surge in imports, the domestic industry has suffered serious injury. Performance of the domestic industry improved upto 2010-11 in respect of production, capacity utilization, domestic sales and profits. Production, capacity utilization, domestic sales, profits however declined significantly in 2011-12. Market share of the domestic industry improved in 2009-10 and declined thereafter significantly. Inventories with the domestic industry declined in 2009-10 and increased thereafter. Thus, evaluation of the overall position of the domestic industry in light of all the relevant factors having a bearing on the situation of the domestic industry, shows a significant overall impairment . It is thus concluded that domestic industry has suffered serious injury as a result of increased imports of the product u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt future so as to ensure the prospective analysis which a threat determination requires. Therefore, we consider that, by basing its determination on events at the end of the investigation period (i.e., one year and nine months) rather than over the course of the entire investigation period, the USITC analysed sufficiently recent data for making a valid evaluation of whether significant overall impairment was imminent in the near future. By the same token, we also consider that, by basing its determination at all on data about events from the recent past, rather than relying exclusively on projections for the various industry indicators into the future, the USITC made its threat determination on the basis of objective and quantifiable facts, and not merely on allegation, conjecture or remote possibility 69. The Panel Report on US Lamb, in a finding subsequently not reviewed by the Appellate Body, which addressed the question whether once imports have increased to already cause some degree of injury, there is no requirement of additional increased imports in order to legitimately determine the existence of a threat of serious injury. The relevant extracts are as follows: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mand for PA will increase when it restarts its downstream 400,000 tonne/year dioctyl phthalate (DOP) plant at the same site on 5 December. 71. Furthermore, a significant impact on DOP market has been of floods in Thailand which grappled the buying trends in the country at zero level. This resulted in diversion of Chinese inventories to other viable markets. This situation persists in light of already existing capacities with Korean and Taiwanese producers which once were chief exporters of DOP to China. In fact, one Taiwanese producer is in process of starting up its under-construction facility in July 2013, comprising a 140,000 tonne/year Phthalic Anhydride plant and a 240,000 tonne/year DOP plant. ICIS PRICING (PHTHALIC ANHYDRIDE), 9th December 2011 Buyers in Thailand are buying only on a need-to basis, as most of their plants are not operating at full capacity. ICIS PRICING (PHTHALIC ANHYDRIDE), 16th December 2011 In Thailand, buying interest remains slow as the country is still grappling with clearing floodwaters from their factories. 72. The imports are entering the Indian market in increased quantities in absolute terms as well as in relation to production ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s in technology: Technology for production of the product has not undergone any change. Developments in technology are, therefore, not a factor of injury. 75. It is thus noted that possible other factors have not caused injury to the domestic industry. I. Causal Link between Increased Import and Serious injury or Threat of Serious injury: 76. A comprehensive evaluation of parameters as above demonstrates that serious injury and threat of serious injury is being caused by increased imports. For the purpose of determining causation, all relevant factors of an objective and quantifiable nature having a bearing on the situation of the industry have been evaluated. In the instant case, the imports are available at prices lower than the selling price of Domestic Industry. The consumers are increasingly switching over to imports due to which the Domestic Industry is faced with losing sales and rising inventory. The production, capacity utilization, profits, return on investment, all declined due to increased imports. The imports are undercutting the prices of the Domestic Industry. Consequently, the Domestic Industry has suffered decline in profits and return on investment. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther Cloth is 0.29%, on Copper cable is 0.02% and on PVC flexible pipe is 0.43% which is almost negligible. b) DOP has nil customs duty protection. Two major raw materials namely Phthalic Anhydride and 2EHA used in the production of the product under consideration have the same level of customs duty. However, these two have 2.5% duty protection respectively. c) In the past decade a number of producers have already shut down their operations. Moreover, if the injury to the domestic industry continues, it may lead to the closure of the remaining domestic producers, as a result of which, DOP an important chemical would not be manufactured in the Country thereby leaving the users of the DOP wholly dependent on the imports. 81. It is seen that the selling price of the domestic industry is significantly lower than the cost of sales. Considering the present profitability of the DOP industry, non-levy of safeguard duty can lead to closure of DOP industry. In any case, the producers of Dioctyl Phthalate does not have any duty protection which coupled with the fact that the many producers in the past have closed down their operation and the minimal impact of safeguard duty on con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... possible extension of measure if there is no evidence that the domestic producers are adjusting. 89. Following are the adjustments plan provided by the domestic industry essentially comprising of the following: d. Batch process to continuous process e. Automation of plants f. Waste Recovery g. Reduction in energy cost h. Stringent monitoring of the plant using IT i. Reduction in administrative expenses j. Effective inventory management k. Power saving by modernizing electrical equipments l. Use of better manufacturing practices m. Improvement in management practices 90. The restructuring plan submitted by the domestic industry focuses on cost reduction and optimum utilization of existing production capacity. It is noted that the adjustment plan of domestic industry is reasonable and feasible and viable which is likely to be implemented. 91. It is further noted that Domestic Industry has already started its efforts towards its cost reduction in terms of energy cost, administration overheads and other conversion cost etc, which is evident from the table below: Particulars Unit 2009-10 2010-11 2011-12 Cost ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the domestic industry/producers of DOP; and c. It has been established that injury to various economic parameters of the domestic industry like production, sale, inventory etc. has been caused by the increased imports of DOP; and d. It will be in the public interest to impose safeguard duty on imports of DOP from all countries, except originating from developing nations except Malaysia in terms of proviso to Section 8B of the Customs Tariff Act, 1975. N. Recommendation: 95. In terms of Rule 12 of the Customs Tariff (Identification and Assessment of Safeguard Duty) Rules 1997, after considering the average cost of production of Dioctyl Phthalate by the domestic producers, after allowing a reasonable return on capital employed, a Safeguard Duty on all import of Dioctyl phthalate, an organic compound and abbreviated as DOP falling under Chapter heading 29173920 under the Custom Tariff Act 75 and also known commonly as Bis (2-ethylhexyl) phthalate(di-2-ethylhexyl) phthalate, commonly abbreviated DEHP, also an organic compound with the formula C6H4(C8H17COO)2 is hereby recommended for imposition in the following manner: Period Rate of Safeguard duty ..... X X X X Extracts X X X X X X X X Extracts X X X X
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