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Safeguard investigation concerning imports of Hot-rolled flat products of non-alloy and other alloy Steel in coils of a width of 600 mm or more into India Final Findings

Customs - F.No. D-22011/26/2015/Pt-III - Dated:- 15-3-2016 - MINISTRY OF FINANCE (Department of Revenue) (OFFICE OF THE DIRECTOR GENERAL OF SAFEGUARDS CUSTOMS AND CENTRAL EXCISE) NOTIFICATION New Delhi, the 15th March, 2016 Subject: Safeguard investigation concerning imports of "Hot-rolled flat products of non-alloy and other alloy Steel in coils of a width of 600 mm or more" into India.-Final Findings. GSR 308 (E) - Having regard to the Customs Tariff Act, 1975 and the Customs Tariff .....

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t products of non-alloy and other alloy Steel in coils of a width of 600 mm or more", as increase in imports is causing and/or threatening to cause serious injury to the domestic producers. 2. The product under consideration is "Hot-rolled flat products of non-alloy and other alloy Steel in coils of a width of 600 mm or more" hereinafter referred to as 'PUC' (Product under consideration) classifiable under Chapter 72 of the Customs Tariff Act, 1975, under tariff heading 72 .....

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lly rolled or thermomechanically controlled rolled or controlled rolled. These products may have patterns in relief derived directly from rolling. These products may have been subjected to various processing steps like pickling, oiling, rewinding, temper rolling, heat treatment, etc. The following are not included in the scope of the product under consideration: a) Hot-rolled flat products of steel with nominal width less than 600mm; b) API grade steel; c) Silicon electrical steel; d) Hot-rolled .....

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he non-confidential version of verification report was kept in the public file. On being satisfied that the requirements of Rule 5 were satisfied, the Notice of Initiation of Safeguard investigation concerning imports of "Hot-rolled flat products of non-alloy and other alloy Steel in coils of a width of 600 mm or more" into India was issued under Rule 6 of the Customs Tariff (Identification and Assessment of Safeguard Duty) Rules, 1997 on 7th September, 2015 and was published in the Ga .....

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nd Assessment of Safeguard Duty) Rules, 1997. Questionnaires were also sent, on the same day, to all known domestic producers and importers and exporters and they were asked to submit their response within 30 days. 4.1 Domestic Producers a. M/s Essar Steel India Limited, b. M/s Steel Authority of India Limited, c. M/s JSW Steel Limited d. TATA Steel Limited, Mumbai e. M/s Jindal Steel & Power Limited, Gurgaon f. M/s Bhushan Steel Limited, New Delhi 4.2 Known Importers (M/s): a. Alstom India .....

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, Chennai m. Gamesa Wind Turbines P.Ltd, New Delhi n. Ganpati Enterprises, Jaipur o. Hindustan Shipyard Ltd., P.O. Gandhigram, Visakhapatnam p. Hindustan Construction Co. Ltd., Vikhroli(W), Mumbai q. IDL Explosives Limited PO Kukatpally, Hyderabad, r. IFB Automotive Private, Kolkata(W.B.) s. JBM Industries Ltd., New Delhi t. JCB India Limited, New Delhi u. Kalinga Fixtures Ltd. Parel, Mumbai v. Kalpataru Power Transmission Ltd., Gandhinagar , Gujarat w. Larsen & Toubro, Mumbai, Maharashtra x .....

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Shelf Drilling Offshore Services (India) Pvt.Ltd, Powai, Mumbai kk. Shree Chamunda Enterprises, Navi Mumbai ll. Superior Steel Industries, Mumbai mm. Tranter India Private Limited, Pune nn. TRF Limited, Jamshedpur oo. Viraj Impex Pvt.Ltd., Mumbai pp. Virgo Industries, Panchkula. qq. Welspun Corp Ltd., Dist-Kutch , Gujarat rr. Wudtools, Mumbai ss. Yatin Steels India Pvt. Ltd., Mumbai tt. YSI Automotive P Ltd, Chennai uu. Zyfix Tools Private Limited-II, Balanagar, Hyderabad 4.3 Known Exporters (M .....

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& steel, China s. Baotou Iron and Steel Group, China t. Jiangsu Shagang Group Company Limited, Jiangsu Province, PRC. u. Tonghua Iron Steel Group Corporation, China v. Angang Steel Company, China w. Nanjing Iron and Steel, Nanjing, People's Republic of China x. Tangshang Iron & Steel, Tangshan, Hebei. y. Wuhan Iron and Steel, China z. Tianjin Iron & Steel Group Co Ltd, China 4.4 Exporting country Government a. Embassy of Indonesia b. Embassy of Ukraine c. Embassy of the Russian .....

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azil, New Delhi i. Embassy of Turkey, New Delhi j. European Union Delegation to India, New Delhi k. Federation of Association of Maharashtra (FAM) l. Federation of Industries of India (FII), Delhi m. Hero Steels Limited, Hero Nagar, Ludhiana n. Honda Cars India Limited, GNOIDA, Distt. Gautam Budh Nagar (U.P.) o. Hyndai Steel Company, Seoul, Republic of Korea p. Japan Chamber of Commerce and Industry in India (JCCII), New Delhi q. Jawandamal Dhanamal Iron and Steel Merchants, Mumbai r. JFE Steel .....

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ta dd. Nippon Steel & Sumikin Pipe India Pvt. Ltd., Neemrana Dist. Alwar (Raj.) ee. Nippon Steel & Sumitomo Metal Corporation, Japan ff. Nisshin Steel Co. Ltd., Japan gg. POSCO India Delhi Steel Processing Centre Pvt. Ltd., Rewari hh. POSCO International Trade Affairs Group, POSCO Centre, Korea ii. Posco-Maharashtra Steel Pvt. Ltd., jj. Prabhat Steel Traders Pvt. Ltd., Mumbai kk. Ratnamani Metals & Tubes Ltd., Ahemdabad ll. RKB Global Pvt Ltd mm. RNV Industries Pvt. Ltd., Mumbai nn. .....

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di ww. Tube Investment of India, Chennai xx. Turakhia Ferromet Pvt. Ltd., Carnac Bunder, Masjit (E) Mumbai yy. V.K. Industrial Corporation Limited, Carnac Bunder, Mumbai zz. Van Bael & Bells, Belgium [on behalf of Metinvest Holding (Ukraine)] 6. All the above requests were accepted. Some of the interested parties requested for grant of extension for filing their reply to the notice of initiation. Their requests were accepted and they were granted extension. 7. The Domestic Industry has made .....

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examined and it was prima facie found that there exist critical circumstances which warranted imposition of provisional safeguard duty in order to provide interim relief to the domestic industry from suffering irreparable damage, which could have been difficult to repair. 9. Accordingly, the Preliminary Findings for Provisional safeguard duty was issued under Rule 9 (2) of the Customs Tariff (Identification and Assessment of Safeguard Duty) Rules, 1997 on 9th September, 2015 and was published i .....

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submissions at the time of Public hearing. In terms of sub rule (6) of rule 6 of the Custom Tariff (Transitional Product Specific Safeguard Duty) Rules, 1997, all the interested parties who participated in the public hearing were requested to file written submission of the views presented orally. 12. 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 .....

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d as under: Submissions by Embassies and Delegations from countries I. The Embassy of the Russian Federation and the Ministry of Industry and Trade of the Russian Federation a. Substantial increase of the export of commodity from the Russian Federation to India did not happen. b. In addition, the export of commodity from Russia to India is not the reason of Indian producers' damage. c. According to official data with the Russian Federation from its federal agency, export of the commodity fro .....

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. There is decline in the proportion of imports from the Russian Federation in total volume of imports of the commodity into India. v. There is insignificant effect due to share of sales of Russian manufacturers on the Indian market. vi. The investigation should be completed with respect to the Russian Federation without taking action. II. Embassy of the Republic of Indonesia a. As per the WTO Appellate Body Report in Argentina Import Footwear, WT/DS121/R, increased imports within the meaning of .....

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d measure as required by Article 6 of the Agreement on Safeguards since no increased import within the meaning of Article 2.1 of the Agreement on Safeguards has taken place. c. As per UN Comtrade data, the share of imports of the PUC originating from Indonesia in 2014 is less than 3%. Provisional safeguard duty has been imposed on a general heading of 7208, which includes both "coils and plates". This will cause loss to Indonesia's exporters, since Indonesia's share of imports .....

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;not in coil and/or hot-rolled plate". Therefore, it is clear that there is no export of the steel product with specific type of "in coils" from Indonesia. The Authority should issue an immediate clarification about the classification of the PUC on whether the type of not in coil and plate are also included under the PUC as the subject goods in this safeguard investigation. f. Since there is no import of the PUC under the classification of "not in coil and/or plate" orig .....

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ad increased import duty on flat steel product in 2015. i. Imposition of provisional safeguard measure is inconsistent with the Agreement, and it is requested that Indonesia should be excluded from imposition of safeguard duty. III. Embassy of the Republic of Korea a. There would be little negative impacts, if any, on the Indian domestic steel industry resulting from imports of HR steel products from Korea, since most of imported products are consumed for raw materials in Korean corporation, to .....

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substantial cause of serious injury or threat thereof. Korea believes that HR steel products imported from Korea are subject to this clause since the negative impact of the imports from Korea on the Indian domestic market is limited. c. Korean corporations' import of HR steel products from Korea is part of their contribution toward 'Make in India', as they are importing high quality HR steel products to provide to the Indian authorities. For instance, POSCO-Maharashtra Pvt. Ltd. pro .....

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ntribution to be a genuine partner of 'Make in India' and 'Invest in India' should be fully considered. POSCO, as one of the major Korean corporations in India, has invested more than USD 1 billion and is currently operating 6 plants in India. Especially, through its subsidiary company in India (POSCO-Maharashtra Pvt. Ltd.), POSCO recently completed the construction for 1.8 MTPA downstream steel plant in the State of Maharashtra to produce high quality steel products specially us .....

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downstream industries. In particular, 100% of the hot-rolled (HR) products exported by POSCO Korea are used for re-rolling in Indian steel mills (i.e. POSCO - Maharashtra), and pickling and oiling (P0) steel exported by Hyundai Steel Korea are used as intermediary products in Hyundai Motors India. h. Considering the public interest of India's downstream industries, particularly India's steel and automobile manufacturing industries, the levying of duties on Korean EIRC products may harm I .....

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Imports from developing countries that are members of the WTO and that are not major suppliers of the product concerned to India account for less than 9 percent of total imports. c. Because the Kingdom of Saudi Arabia is a developing country WTO member, its exports should be excluded from the scope of any safeguard measure India may decide to impose on imports of the product concerned further to the safeguard investigation. d. In line with the obligations under Article 9.1 of the Agreement on Sa .....

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orts from all sources, often limit legitimate market access to imports that are not causing injury. Increased imports b. While imports increased overall, a breakdown of imports by domestic is not provided in the report on preliminary findings. However, in relation to the unforeseen development, sources such as China, Russia and Ukraine are mentioned. As indicated above, in cases where imports increase mainly from one or several sources, the anti-dumping or anti-subsidy instrument would be more s .....

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ited choice, lesser quality and/or higher prices. Injury and causality d. The data for 2015-16 has been extrapolated based on 1st quarter only. This methodology is likely to lead to biased conclusions. An objective analysis should be based on comparative periods using actual figures. At the very least, the actual data for the second quarter should have been included. e. Even when taking into account the annualised data, the injury picture is not conclusive. Most injury indicators such as product .....

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it does not allow interested parties to have a clear picture of the situation. This should be clarified. h. In view of the above, it is difficult to argue that the domestic industry is suffering any serious injury. i. It is difficult to explain how the domestic industry's profits are very high and increasing when undercutting is high, with all indicators remaining stable. j. It seems that there are other factors that have had an impact on the situation of the domestic industry. Unfortunatel .....

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n market. l. An important element that should be taken into account is that other Indian producers increased not only their captive sales by 18%, but also their sales on the open market by 42%. Therefore, it is necessary to analyse the impact of the local competition on the situation of the domestic industry. Conclusion m. Analysis on the following issues is warranted: i. The development of the situation of the domestic industry for a longer period; ii. An in depth analysis of other factors, in .....

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eloping country members with less than 3% of import share collectively do not account for more than 9% of total imports of the product concerned. b. According to the International Trade Centre statistics, Turkey's individual share in India's subject merchandise imports in terms of quantity corresponds to levels under 3% (1.05% in 2014, 0% in 2013, 0.59% in 2012 and 0.18% in 2011). In addition, the collective imports share of developing countries with a ratio below 3% is far from reaching .....

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and coal to making and selling semi-finished and finished steel products. It has steel and mining production facilities in Ukraine, Europe and the US, as well as a sales network covering all key global markets. Metinvest Group produces a diversified range of semi-finished and finished steel products including slabs, billets, hot-rolled plates, hot-rolled coils, shapes and bars, rails, grinding balls, rail fasteners and large diameter pipes. There submissions are as below: a. Imposition of a saf .....

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to reflect a value for that variable on a yearly basis. It is therefore a projection of a future value based on the past. Such projection cannot be held to be a "fact" on which the Investigating Authority can establish its determination, especially when that annualisation is based on data from only the first quarter of the financial year 2015-16. iii. In particular, Article 4 1(b) of the AS provides even in relation to the determination of a threat of serious injury, a "future-or .....

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eseen developments or of any effect of relevant GATT 1994 obligations: i. The "unforeseen developments" and the effect of GATT 1994 obligations in Article XIX:1(a) of the GATT 1994 are both "circumstances" which must be demonstrated "as a matter of fact" in order for a safeguard measure to be applied consistently with the provisions of Article XIX of the GATT 1994. They constitute "prerequisites". ii. Consequently, the text of the first clause of Article X .....

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ion "on factors that may be attributing to increased imports" in the Application. iv. The central thread throughout the described developments is that (i) capacity in Russia, Ukraine and the People's Republic of China ("China") and(ii) demand in the US and the EU have decreased, and that (ii) the resulting excess capacity was primarily diverted to India. v. In contrast with the findings of the Preliminary Determination stating that "the United States and the European .....

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ave decreased by 50%. vii. Even assuming that the factual analysis provided in the Preliminary Determination is correct, the Preliminary Determination remains fundamentally inconsistent with the legal requirements set out above. viii. First, the events described in the Preliminary Determination do not at all establish how they have changed the competitive relationship between the domestic product concerned and the imported product concerned. There is no account of any development which could exp .....

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an unexpected event which led to an increase in imports. x. Third, the Investigating Authority has failed to establish any logical connection between the developments and the increase in imports. It is merely stated that "India, with relatively better demand prospects (domestic demand up by 3.1%) and high domestic prices, has remained an attraction for these steel surplus economies to channelize their excess capacities".24 This sentence only indicates that India has remained attractiv .....

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ns under GATT 1994 (for example, tariff concessions) with respect to the product concerned that have had the effect of precluding India from taking the measures necessary to prevent the change generated by the "unforeseen development", i.e. resulted in the increase in imports causing serious injury to the domestic industry. Indeed, as underlined by the Appellate Body, this is one of the "circumstances" included in the first clause of Article XIX:1(a) which "must be demon .....

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te explanation" of how the effect of these obligations resulted in the product being imported in such increased quantities and under such conditions as to cause or threaten to cause serious injury to the domestic industry. The Preliminary Determination fails to explain how these obligations have the effect of precluding India from taking measures, such as an increase in import duties, in order to prevent or remedy the change generated by the "unforeseen development" in the competi .....

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regard to the product concerned when it joined the WTO does not exonerate theInvestigating Authority from complying with the aforementioned requirements. xv. In conclusion, the failure to indicate the effect of the obligations incurred under the GATT 1994 renders the Preliminary Determination inconsistent with WTO law. c. There is no clear evidence of increased imports: i. In the present case, the Investigating Authority merely provided a table in its Preliminary Determination with absolute and .....

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t there is no increasing trend in imports in absolute terms. As stated by the Appellate Body, an end-point-to-end-point analysis, namely a comparison between financial year 2013- 2014 and financial years 2014-2015 and 2015-2016 (annualized) is not an analysis in accordance with the requirements under Article 2.1 of the AS and Article XIX:1(a) of the GATT 1994. iv. If the analysis is made in accordance with Article 2.1 of the AS and Article XIX:1(a) of the GATT 1994, it appears form Graph 1 below .....

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rease, followed by a recovery of the import levels, to a level comparable to the level prior to the decrease in imports. vi. With respect to the alleged increase in imports in relative terms, the clear decreasing trend is even more apparent. While the share of imports in total domestic production was 11% in the financial year 2011-12, it decreased to only 5% in the financial year 2013-14. While the share of imports in total domestic production indeed rose to 10% in the financial year 2014-15 thi .....

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dered to be wholly unexpected. The increase is therefore not "sudden" enough. ix. In addition, the imports cannot be held to be "sharp" enough. It must be emphasised that this factor should also be assessed in light of the historical context. x. In absence of an increase in imports that is sharp, sudden and significant enough as required pursuant to Article 2.1 of the AS and Article XIX.1(a) of the GATT 1994, the imposition of the provisional duty is manifestly unlawful. The .....

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age" means "physical harm that impairs the value, usefulness, or normal function of something" or "detrimental effects". The concept of "damage which it would be difficult to repair" suggests that the "circumstances" must be such as to warrant expeditious intervention in the form of a provisional safeguard duty in order to prevent any detrimental effects that would be difficult to repair. ii. The "critical circumstances" and the "damage .....

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; and the "damage which it would be difficult to repair" are not the equivalent of "serious injury" or "threat of serious injury" within the meaning of Article 4.1 of the AS, as the inclusion of these concepts in Article 6 of the AS would otherwise be redundant. The "critical circumstances" and the "damage which it would be difficult to repair" are therefore conditions in addition to serious injury or threat of serious injury, and these condition .....

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surprising, since there is no damage which it would be difficult to repair" to speak of. It appears from the complete data of the Application that the above-mentioned selective use of data provides an inaccurate picture of the state of the domestic industry, since most factors pertaining to any detrimental effect on the Applicants have changed insignificantly or have remained stable: - the market share of the Applicants is still 58% in Q1 of financial year 2015-2016 and the market share of .....

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circumstances "having the potential to become disastrous" and the alleged increase in imports has barely had an impact on the domestic industry. vii. It is therefore unequivocally clear that the condition of "critical circumstances, where delay would cause damage which it would be difficult to repair" has not been met and, as a result, the imposition of the provisional safeguard duty is flagrantly in violation of WTO law. e. The Applicants do not suffer serious injury or thre .....

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ssion. iii. Market share: If one were to consider the market shares during the complete, more relevant period of the investigation, he would note that import market share in fact decreased marginally from 11% in 2011-12 to 10% in 2014-15. What's also important is that market share of the domestic industry during the same period stayed almost flat, decreasing marginally from 40% in 2011-12 to 39% in 2014-15: iv. Profit/Loss: At the outset, it should be recalled that the Provisional Determinat .....

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year 2013-14. Moreover, despite the above-mentioned conclusions of the Investigating Authority with regard to domestic industry's profitability, JSW Steel Limited and Essar Steel India Limited, reported themselves that they enjoy a healthy and stable financial performance, especially on the domestic market. Although Steel Authority of India Limited reported negative profitability during the period concerned, it explicitly attributed it to factors other than imports from third countries. Fina .....

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, are taken into account, this will demonstrate that the domestic industry in India is not suffering serious injury or threat thereof. v. Price depression: In its Preliminary Determination the Investigating Authority notes that "the domestic industry was always under consistent pressure to either reduce their prices to match the import prices or to hold on to their prices". Apart from the relevant factors discussed above, it should be noted that the Investigating Authority didn't c .....

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he domestic market: The pricing strategies of the main steel producers in India did not correspond to the actual market situation, as there was no preconditions for increase in prices of steel products. This also had an impact on the performance of the domestic industry, which neither the Preliminary Determination, nor the Application accounted for. vi. Out of the eight injury factors mentioned above and which were considered by the Investigating Authority, five factors were reported as performi .....

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ppear to be duly supported by the facts at hand, nor by the adequate evaluation of the relevant factors. viii. Indeed, the production of the domestic industry, productivity, employment, capacity utilization and inventories remained flat and at healthy levels during the POI. On the other hand, it was demonstrated above that the profitability of the domestic industry in India reported by the Investigating Authority as negatively performing is in fact positive explanation, can result in an adequate .....

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f. There is no causal link between the alleged increase in imports and the alleged injury: i. The evolution of imports in absolute terms should be assessed in light of the rate and amount of such imports, in accordance with Article 4.2(a) of the WTO Safeguards Agreement and the interpretation given to this provision by WTO case law. ii. Metinvest submits and trusts that the Indian Investigating Authority will acknowledge that the decrease in imports by almost 10% between 2011-12 and 2014-15 in r .....

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d possibly cause any injury to the domestic industry (quod non), one would expect such injury to materialize in 2014-15, as compared to 2013-14 when imports increased almost 97% year-on-year. iv. However, an analysis of the injury indicators on the basis of figures provided in the Application, as well as from public sources, demonstrates that the situation of the domestic industry had in fact improved (or at least, remained stable) from 2011-12 to2014-15, despite the alleged increase in imports. .....

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ubmits that there is no coincidence in time between any alleged increase in imports and any alleged injury in the present case Indeed, as was demonstrated above, from 2013-14 to 2014-15, when the imports allegedly increased (even though not in a way which satisfies the requirements of Article XIX:1(a) of the GATT 1994 and Article 2.1 of the VVTO Safeguards Agreement), the injury indicators improved or remained stable. Clearly, this demonstrates that there is no causal link between the alleged in .....

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level (both in absolute and in relative terms) and the evolution of the injury indicators, no causal link between them can be found. Consequently, the causation requirement laid down in Article XIX of the GATT 1994 and in Articles 2.1 and 4.2 of the WTO Safeguards Agreement is not met and no safeguard measures can be imposed. ix. Metinvest trusts that the Investigating Authority will carry out an in-depth non-attribution analysis in line with the requirements described above and that this analys .....

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igation, in India during the period concerned is an important factor for the viability of the domestic industry, which was not evaluated by the Investigating Authority.Second, the pricing policies of the main Indian producers didn't reflect the actual situation on the domestic market.Last, but not least, the apparent slowdown in economic growth of India in 2015 as compared to 2014 should also be taken into account in the evaluation of the alleged serious injury or threat thereof to the domes .....

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ina due to sluggish economy growth (projected to be below the government target of 7%) leads to increasing exports from this country to third country markets at low, depressed prices. xiii. Metinvest submits that targeting the injurious imports from China through a safeguard investigation is a wrong choice of trade defence instrument, since it punishes other reliable and historical suppliers of the product concerned to India, including Ukraine. g. Legal basis for choice of level and form of the .....

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ust be considered in their totality when making decision about the final measure. iii. Therefore, by imposing a safeguard measure a Member shall consider not only its level ("is commensurate"), but also its form in order to be "no more restrictive than is necessary to prevent or remedy' any alleged serious injury, be it a safeguard duty, a quantitative restriction, including quotas or tariff quotas, or any other forms restricting the imports from third countries. iv. Article 5 .....

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l be determined and imposed. v. It should also be added that Article XIII:2 of GATT further clarifies that in applying import restrictions to any product Members "shall aim at a distribution of trade in such product approaching as closely as possible the shares which the various contracting parties might be expected to obtain in the absence of such restrictions". vi. It follows from the above that India has an obligation to ensure that any safeguard measure to be imposed upon importati .....

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onal safeguard duty at a level of 20% and which can be potentially confirmed at a definitive stage, effectively bars Ukrainian imports of the product concerned into the Indian market, as producers in Ukraine will not be able to continue exporting to India with profit. ii. At the same time, as was mentioned above, the goal of the safeguard measure is not to ban imports from third countries altogether, but rather to allow the local domestic industry to remedy or prevent any alleged serious injury, .....

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-quota duty, thus shielding the domestic industry and allowing it to adjust accordingly. At the same time, tariff rate quota allows the historical suppliers having substantial interest in the product concerned, including Ukraine, to continue exporting to India within their historical in-quota amounts. v. Second, unlike anti-dumping and countervailing duties which are designed to sanction unfair trade practices (dumping and subsidizing, respectively), safeguard measures are imposed against fair t .....

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eguard measure if it doesn't reduce the quantity of imports below the average imports in the last three representative years. In other words, should the Investigating Authority in the present case decide to impose safeguard measures in the form of a tariff rate quota, which is set at a level reflecting the last three representative years, there will be no obligation on its part to provide detailed and substantial justifications for such decision. i. Current situation in Ukraine: i. The situa .....

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take part of the current export quantities, once the security and political situation in those areas normalizes. iii. Given the expected increase in domestic demand in Ukraine for the product concerned, as explained above, it can be concluded that any continued alleged increase of imports from Ukraine to third markets, including to India, is not to be expected. VIII. China Steel Corporation ("CSC"): CSC is a producer and exporter of the product under consideration based in Taiwan. a. T .....

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from the application of preliminary safeguard measure on hot-rolled steel plate. iv. United Nations: Taiwan was granted as developing country in: - The Economic and Social survey of Asia and Pacific, - UN Conference on Trade and Development (UNCTAD), - Organisation for Economic Co-operation and Development (OECD) and - The International Bank for reconstruction and development (IBRD) - Fifth Ministerial Conference: The Economic Minister of Taiwan pronounced that Taiwan is "newly acceded dev .....

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quality HSS. HSS are not available from the local mills and, as such, HSS needs of the Indian auto industry must be filled by imports from inter alia, Taiwan. e. There is inconsistency with Article 6 of agreement on safeguard as there are no critical circumstances where delay would cause damage which will be difficult to repair. The key economic indicators of the domestic industry, including domestic production, productivity and employment, capacity utilisation and inventory remained virtually .....

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njury. - Mere 4.35% increase in market share simply cannot be "share enough" or "significant enough" and hence cannot constitute "surge" by any count. - Profitability of the domestic industry, increased substantially during 2014-2015 from the preceding years 2013-14 i.e. from 100 to 135 by index. Given the positive movement on profitability of DI, and only a marginal decline in DI¡'s market share during the first two full references years, there is no crit .....

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eguard measures should be taken only in strong cases where there is no other alternative other than imposition of duty to save a dying industry. The Appellate Body in Korea ¡V Dairy held that safeguard measures are extraordinary remedies which should be adopted only in emergency situations. The present petition does not demonstrate an extraordinary or emergency situation and thus should be dismissed. c. The Supreme Court in Haridas Exports v. All India Float Glass Manufacturers Association .....

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e details or satisfying the requirements of a valid application under Rule 5. f. The provisional findings were issued in haste and there did not exist a situation so critical that any delay in imposing provisional measures would cause irreparable damages. The critical circumstances required for provisional measures have not been fulfilled. g. Paragraph 10 of initiation notification stated that interested parties were to be given 30 days to make their views known to the authorities but without wa .....

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ormal market fluctuation which every entrepreneur could have foreseen. The freeing of trade and the consequential increase in imports was expected an foreseen by Indian negotiators in GATT when countries were negotiating to ensure free and fair international trade by reducing tariff and non-tariff barriers. j. The Authority should take into account all relevant factors of an objective and quantifiable nature while evaluating whether the increased imports have caused or threatened to cause seriou .....

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erefore, losses are on account of interest burden and not due to import price as evidence from negative price undercutting. v. Inventory levels slightly increased from 100 points in 2013-14 to 103 points in 2015-16 (01) but the same was not considerable as significant. vi. The employment and productivity remained the same throughout the injury period. vii. There is negative price undercutting since 2014-15 (quarterly) till available data 2015-16(Q1) thereby the landed price was higher than the n .....

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e, in terms of both volume and price, no injury is apparent to the domestic industry, leave aside serious injury. l. Even if serious injury were assumed to the domestic industry, such injury was not because of the increased imports. Applicant has not provided evidence to establish that injury claimed is due to the increased imports. m. Injury to the domestic industry is due to the burden of interest cost and there is no influence of import prices as the price undercutting has been consistently n .....

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different laws. In Bihar v. Kameshwar Singh it was noted that expression "public interest" is not capable of precise definition and has not a rigid meaning and is elastic and takes its colours form the statute in which it occurs, the concept varying with the time and state for society and its needs. In an application filed by United Phosphorus in 1999 for safeguards duty imposition, the authority refused to impose a safeguard duty on the ground that imposition of the duty would not be .....

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ave serious impact on users which depend on imported hot rolled flat products. XI. Arcelor Mittal,Brasil(AM Brasil): The conditions required to initiate a safeguard investigation are not fulfilled in this case a. Indian authorities breached the right of defense of interested parties by imposing safeguard duty at abnormally early stage. b. There has been no increase of imports within the meaning of the WTO safeguard Agreement as interpreted by the WTO case-law. c. The Petitioner has not suffered .....

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015-2016 based on annualized data. Most recent data should only serve to confirm or infirm trends evidenced during the period of investigation. f. While imports increased quite significantly between 2013-14 and 2014-15, an end-to-end comparison shows that imports remained in fact stable during the whole period 2011-2015, and even decreased by 2,3% during the same period. In this respect, it should be noted that the WTO jurisprudence makes clear that in assessing whether an end-point-to-end-point .....

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ution of the production of the Indian domestic industry during a longer period seems to reverse the allegation of serious injury. Indeed, instead of remaining stable, the data contained in the complaint reveals an increase in production during the period 2011 - 2015. i. The Applicant's production increased by 26% over the analyzed period while the other producers increased their production by 57%, indicating that this is the internal competition that may limit the production and sales growth .....

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f the Indian industry. l. There is no causal link between the alleged serious injury (if any) and imports. There is hardly any evidence of coincidence of alleged increased imports and alleged serious injury and the existence of a causal link. m. The Indian authorities imposed provisional safeguard measures only 7 days after the initiation. Such an early imposition of provisional measures is exceptional in view of the practice of the Indian authorities in safeguard cases. n. AM brasil questions t .....

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r analysis, the Indian authorities breached their obligations under Article 3.1 of the WTO Safeguard Agreement. q. There is beach of Article 12(1) as a result of a failure to notify immediately. AM Brasil notes that the case was initiated on 7th September and was notified to the WTO Committee on Safeguards on 15th September, i.e., 8 days after the initiation of the investigation. r. There is breach of Article 12(4) as a result of a failure to notify before taking a provisional safeguard measure. .....

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sing serious injury or threatening to cause serious injury, the existence of critical circumstances is itself untenable. c. The product produced by the Domestic Industry is not a like product" as compared to the imported product. The Petitioner has not provided a coherent methodology for determination of the Product under Consideration. The DG Safeguards accepted the definition of the PUC without an objective assessment of the Conditions of Competition in the market. d. Products exported by .....

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ured by the domestic industry and must be excluded from the definition of the PUC. f. It is not clear as to how the DG Safeguards has verified the data with respect to the PUC as the PUC consists of denied and specific set of products and there is no evidence to show that the Petitioners maintain segregated data with respect to the PUC. g. The conditions for the application of a safeguard measure are not satisfied in the present case. The finding on 'unforeseen development' by the DG Saf .....

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. There is no serious injury or threat of serious injury to the domestic industry. There is no decline in production levels, employment, and capacity utilization during the POI. The market share of the Petitioners has decreased due to inter-se competition among the Indian producers and increase in captive consumption. Further, existing levels of production of DI are already high. k. The movement in profit/loss is not correlated with imports. Imports have increased in 2014-15 by 97% and during th .....

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f coal, problems in acquisition of raw material etc. m. High transportation costs and poor infrastructure are impacting Indian producers' efficiency. n. Injury caused by dumping of the PUC into India must be segregated from alleged injury due to increased imports. o. The adoption of safeguard measure is against public interest because Hot rolled flat products are not manufactured in sufficient quantities by the domestic industry and imports are necessary for downstream industrial users. As p .....

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quotas (TRQ) on HRCs for construction use, as the domestic industry does not produce these products in sufficient quantities. XIII. POSCO, Korea and POSCO Maharashtra Steel Private Limited filed submissions through their legal representative M/s. Shardul Amarchand Mangaldas & Co. a. The company has filed submissions in response to the petition filed by the Applicant. b. The Applicant has misrepresented the market share of other producers of the PUC and has shown the market share of domestic .....

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tal demand of the PUC is incorrect as sales of other producers have not been included. Therefore, as demand is more, the market share of imports would also decline. e. Imports have shown minor fluctuations with no significant increase the market share of the domestic industry has remained mostly constant with only minor variations. There has however been a significant rise in the market share of domestic supporters by approximately 6%. f. Applicants have experienced an increase in profits in the .....

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rket. h. There is no causal link between imports and injury or threat to the domestic industry as rise in imports has been negligible and the same is attributable to the inability of the domestic industry to meet domestic demand. Despite being unable to meet domestic demand has resorted to exporting part of its production outside India. i. The provisional duty imposed by the DG, Safeguards was without proper analysis of the facts and circumstances of the case. Further, interested parties were no .....

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e Agreement provides that safeguard actions taken under Article XIX may to the extent consistent with the obligations under the WTO Agreement, exclude imports of an originating good if such imports are not a substantial cause of serious injury or threat. Therefore, imports from Korea are covered under this clause. l. Safeguard measures are emergency actions to be imposed in special and exceptional circumstances intended to give the domestic industry only temporary and short term protection. m. A .....

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d to the increase of imports of the PUC into India. Applicant has stated that imports have risen due to various geo-political and economic conditions such as tensions between Ukraine and Russia as well as Europe and Russia, crises in the global steel market due to sluggish demand. p. Imports from Korea cannot be considered as an unforeseen development as it cannot be expected that the negotiators making the concessions could not foresee at the time when the concessions were negotiated that such .....

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ons must be based on objective facts and assertions, opinions and conclusions that are not based on factual evidence must be rejected. The period taken by the DG relating to merely 2013-14 to 2015-16 is artificial data of a microperiod. Data should be taken for atleast a five year data base commencing from 2010-11 to 2015-16. The period of 2013-14 cannot be taken as a base year as it was a rock-bottom year for the steel industry. XIV. Hyundai Steel Company, Korea (dated 08.11.2015): Hyundai Stee .....

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es that were offered by the domestic manufacturers in India and other foreign exporters. The quantity exported to India was at average during the past several years without any drastic increase. The other findings and observations in the notice also appear to be irrelevant to Hyundai Steel. c. For these reasons, Hyundai Steel asks the Director General to immediately terminate the safeguards investigation and the 20% provisional duty. As a result of this unexpected and inappropriate measure, a nu .....

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this investigation. These products are manufactured mainly for the production of Hyundai Motors automobiles. e. In addition, HSIL, an Indian entity by law, evidently generates important benefits to the domestic economy and general public in India. It is, therefore, not in public interest to impose such a measure. f. Continuation of this investigation and consideration to impose safeguard measure will damage the overall Indian economy and bring negative effects to hot-rolled coil importers, as we .....

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orts. In the imposition of safeguard duty, however, the investigating authority must review whether there is surge in imports, not surge in low priced product imports. iii. Causal Link: The investigating authority must provide a non-attribution analysis, which is required by law, to separate and distinguish the injurious effects of other possible factors. h. Principles of Natural Justice: The preliminary findings cannot be issued without offering opportunity to all interested parties and allow t .....

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ires the petitioners to build a comprehensive adjustment plan and explain that they need time and emergency relief to restructure their organisations. Simply put, the instant case is missing this requirement. k. Undue Protection: India is known to over-protect its domestic industries. This should risk their relations and future trade status with the Republic of Korea and the rest of the international community. l. Public Interest: The imports of subject goods from Hyundai Steel have contributed .....

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ed as raw material for its automobile production. These PO products are manufactured mainly and particularly for the production of Hyundai Motor automobiles. Hyundai Steel performs special testing and manufacturing process to produce the PO products for Hyundai Motors. They are, therefore, irreplaceable; they cannot be substituted with other merchandises. Doing so would cause a significant quality performance issue for Hyundai vehicle, which would result in risking the safety of automobiles driv .....

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nisation of trade associations of Maharashtra consisting of 1000 transport, small-scale and trade associations in Maharashtra. a. The steel sector is facing excessive debts and losses due to such factors are not attributable to import prices of steel in India. b. Quantities imported under advance authorisation cannot injure the Applicants. c. There has been undue haste in imposition of provisional safeguard duty in this case. d. The PUC only accounts for 9% of the capacity of the applicants. e. .....

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. Alleged surge in imports ('000 tonnes) Particulars 2011-12 2012-13 2013-14 2014-15 Imports (as per JPC) 1812 1871 1104 2006 Indexed 100 103 60 109 As per JPC data, the increase over the period of 4 years (which is a more logical period for a trend analysis) is only about 9%. While alleging surge in imports in 2014-15 over the period of 2013-14, a due thought has not been given to the fact that there was an abnormal drop of roughly 40% in the earlier year mainly due to the unprecedented dol .....

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increasing / stable trend in the annual sales in spite of the drop in the prices of the major raw materials such as iron ore, coaking coal and coke by almost about 40-60% i. For the same period, capacity utilization of JSW Steel Ltd. had surged from the base year of 2012-13 to the year 2014-15 by about 62% thereby achieving almost about 88% of productivity. j. Essar Steel India Ltd. on the other hand has underutilization of capacity which is basically attributable to financial indiscipline and .....

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ture as is seen in its financial statements. l. The profitability of these applicants, especially at the time when the entire steel industry globally is making the huge losses only demonstrates how the Indian consumers are being over-charged. m. It is submitted that from the above Applicants, there are some Applicants who are facing serious problems of financial indiscipline. These books of accounts of these Companies does not appear to be giving true and fair view of its state of affairs and ar .....

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ls have dropped between 40-60%. p. It is fairly logical that the selling prices of these subject goods be accordingly adjusted. However, it is interesting to note that in spite of that the sales of the applicants have been increasing. q. The subject goods which are used as raw materials for certain re-roller mills such as POSCO, Uttam Steel, National Steels, Asian Color Coated etc. it needs to be noted that PUC is a raw material and not a product for trade. In such cases, PUC is further worked u .....

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s of the subject goods in India over this period. In fact, local plants have declined POSCO to provide the subject goods due to their own inability to produce the required quality and quantity of those goods. The quantum of such imports of raw material may be around 35-40% of the total imports of PUC in India. s. The applicants have argued that the countries like Thailand and Malaysia had also taken recourse to these tariff barriers by imposing the safeguard and anti-dumping duties respectively. .....

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injury caused to the domestic industry due to the imports of alloy steel products and imposition of the Safeguard Duty in the absence of any threat of or serious injury to the domestic industry is violative of Article 14, 19 & 21 of the Constitution of India. v. The pre-requisites as prescribed under the Safeguard Rules does not exist and as such there is no significant overall impairment of domestic industry, in particular, the rate and amount of the increase in imports of the product conc .....

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ports on account of captive consumption which needs to be excluded for the computation of total imports. The Applicants have not excluded the imports under advance authorizations i.e. imports for exports which needs to be excluded for computation of total imports. There is no nexus between the imposition of safeguard duty in the absence of any emergency and the objective to be achieved by such imposition. The capacity utilization of the Applicants has reached its optimum well above the Internati .....

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to make windfall profits by seeking imposition of safeguard duty and should not be allowed misrepresent facts before the Authority. All the aforesaid aspects substantiate that there is no sudden or sharp increase in imports of alloy steel imports so as to cause or threaten to cause serious injury to the domestic industry. XVI. Purva Metal Sections Pvt. Ltd. a. We require HR coils as raw material for manufacturing Steel Pipes & Tubes. Imposition of safeguard duty will shoot up our raw materia .....

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ort of Steel pipes & tubes into India also. XVII. Bharat Chamber of Commerce a. Imposition of safeguard duty will seriously affect the automobile, construction and other industries which are consuming HR steel coil as raw material. b. Engineering industry will lose its competitiveness globally. c. Imposition of safeguard duty will affect the manufacturing industry and thus Make-in-India campaign will get affected. XVIII. Mitsui & Co. India Pvt. Ltd: Mitsui & Co. India Pvt. Ltd. have .....

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d duty, if implemented, would damage or destroy viability and growth potential of downstream industry. XIX. Nezone strips Limited and Nezone Tubes Limited: Nezone strips Limited and Nezone Tubes Limited are the producers of Black Pipes, C.R. Strips and Precision Tubes. Their submissions are as under: a. We have been importing HR coil in thickness 2.00 mm and below because our regular supplier M/s Tata Steel Ltd. had stopped supplying due to availability constraints. Therefore, we are forced to i .....

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view it in the light of the fact that domestic production have not increased to cater to higher demand. e. Steel material prices have fallen internationally due to fall in iron ore, coal and oil prices. Since basic raw material prices are witnessing a fall, there is no reason why the profitability of domestic industry should fall. f. The demand for H.R. Coil in India will diminish as all downstream products will be imported and thus defeating the very purpose of Safeguard Duty of protecting dom .....

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supply etc. Imports are not the reason of this condition of steel industry. b. JPC data shows export of approx. one million ton at prices lower than domestic prices which created a deficit which has been filled by the imports. c. Imposition of safeguard duty will lead to increase in import of finished goods making Indian manufacturers more non-competitive. d. In the increased imports figure, one of the largest constituent is has been the import quantity of POSCO and China Steel Corporation who .....

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estic market exported over 1 million tonnes of HR Coil well below the global prices in order to maintain shortage in the domestic market. b. Data examined should be based on 5 year data commencing from 2010-2011 to 2015-16. It may be pointed out that 2013-14 was one of the worst years for steel industry as the consumption and imports of steel were rock bottomed and it cannot be taken as base year for investigations. c. HR coil producers are already protected by 12.5% custom duty. Ocean freight o .....

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ufacturing industry and 'Make in India' mission. d. Imposition of safeguard duty will result in erosion of global competitiveness of the manufacturing sector. e. The past three Petitions were rejected by the Anti-Dumping directorate and Safeguard directorate as well as Calcutta and Delhi High court due to misrepresentation of the facts. f. Provisional duty should have been imposed after a public hearing to ascertain the facts. g. Petition is not based on authentic JPC data. Joint Plant C .....

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e norms to establish any trend. The POI should be extended to at least 5 years. i. At least 4 more grades should be added to the PUC exclusion list to ensure that heavy custom duty do not lead to import of manufactured goods instead of HR Coils. j. There is no injury to the domestic industry from excessive imports because the production of HR coils has increased. Moreover, neither there is any decline in the capacity utilization nor there is laying off of the workers k. Reduction in global price .....

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ncurred heavy debt mainly due to indiscreet and unproductive investments n. Domestic HR coils producers have not been able to match the global prices despite having captive iron ore and coal mines because of absence of technological and product development. XXII. Surya Roshni Limited a. If injury is found to be suffered by the HR coil producers, then all the downstream products including Cold Rolled, GP/GC Sheets/ Coil, MS ERW and Spiral Pipe, Color coated steel etc. should also be considered fo .....

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f engineering industry. a. Industries like automobile, transportation equipment, construction equipment, fabricated steel products etc. will be affected due to imposition of safeguard duty on HR Coil. b. The engineering industry consuming HR coil as raw material will become uncompetitive globally. Imports of the finished goods will increase thereby affecting the domestic manufacturing and Make in India initiative. XXIV. Sunil Tripathi a. There has already been two-stage rise in custom duty for t .....

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only, but it would be detrimental to the Steel users in the organized, as well as unorganized sector. b. The contribution made by steel user to the Ex-chequer by way of direct and indirect taxes is higher that of the Steel manufacturers. The employment generated by the Steel user's runs into millions, these factors should be considered by the Government, as both these factors have a direct impact on the economic growth. c. The 20% Safeguard Duty over and above the regular Customs Duty of 12% .....

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he Government may curb import from China and not restrict blanket import from other countries such as Japan. Korea, with whom we have existing Free Trade Agreements. f. Safeguard Duty will affect our relationship with ETA countries and our exports to these countries may be severely affected. g. Safeguard Duty and Customs Duty on H.R. Coils, aggregate to 32.5%, whereas the Customs Duty on finished goods is much lower (average 10 %) and hence imports of finished goods would increase, particularly .....

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at products of 600 mm width or more. XXVII. Automotive Component Manufacturers Association of India ("ACMA"): ACMA is an association of importers/ users of the subject goods: a. The cost of raw material price had major impact on the Steel Industry: i. HR prices declined in August- September 2014, October-November 2014, amid sluggish demand in China and rising Global surplus from Chinese exports. Prices dipped in December 2014-January 2015, due to weak demand from the US energy sector a .....

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urdened with high raw material price and declining profitability. v. At a time when the auto component industry is facing increased competition from countries having an FTA with India, it is imperative that the industry is insulated against such arbitrary increase in cost of raw material. vi. Unforeseen and sudden moves are against the India's "Make in India" programme. vii. The Automotive Mission Plan 2016-26 has a vision of the Indian automotive industry ranking among the top thr .....

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items in Nagaon. They contend that the imposition of safeguard duty will allow middle players to take the advantage of the situation and they will increase the price abnormally. XXIX. Asian Containers (Virat Industries): They are users of electrolytic tin plates for manufacture of aerosol cans. a. The local manufacturers of tinplate are not in a position to cater to our requirement both in quality as well as quantity. Unreasonable pricing make it difficult to cater to the consumer's budget a .....

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Human Rights Federation ("UHRF"): The UHRF is engaged in taking up various common problems of the peoples for redressal and engaged in safeguarding public interest. The submissions are based on the letter filed by Manufacturers Association of India (CORSMA). UHRF had also filed writ petition in the Hon'ble Supreme Court Writ Petition No. (Civil) No. 764 of 2015, against the decision of imposition of preliminary safeguard duty on the product concerned. The Supreme Court vide its ord .....

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n the misrepresentation of the applicant companies (M/s SAIL and others). b. The Notification dated 14.09.2015 as issued by the Directorate General of Safeguard has not followed as per the prescribed Customs Tariff Rules. The Director General (Safeguard) was appointed on 28.08.2015 and had taken charge on 07.09.2015 and issued the notice of initiation of safeguard investigation on 07.09.2015 and recommended the imposition of safeguard duty on09.09.2015, which indicates the decision is hastily ta .....

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on Director General Safeguard has taken, is from international Business Information Service that for the period 2013-14 and first quarter of 2015, though it is mentioned in the report that the same has been verified on the site visit, but no particular in the notification dated 09.09.2015 about which site has been visited. f. No urgency shown in the notification for imposition of safeguard duty. g. The Notification dated 14.09.2015 read with Notification dated 09.09.2015 the Director General Saf .....

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increase in duty drawback to exporters and with the domestic prices being influenced by such levies, the drawback rates should simultaneously go up. j. Neither the prescribed procedure nor the timelines pertaining thereto have been followed. k. There is no difference material difference in the production process between the applicant and the exporters from the subject country. l. The Notification completely ignores the views of the Domestic Market on the said subject goods, it also does not take .....

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y and hence, the said notification has been issued in breach of Customs Tariff Rules. p. There is no base in the Notification how exact 20% duty has been imposed as sought by the said applicants. There is a very significant drop in imports between 2009-10 and 2014-15, as per the data available. q. The undue haste with which whole process of imposing of exaggerated safeguard duty has been completed in gross violation of the procedure laid down in the Customs Tariff Act 1975 and Customs Tariff Rul .....

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hrough their companies Posco, Honda, Toyota and Suzuki etc, which are going to be affected by the levy. t. The applicants have mislead the Directorate General safeguard by providing incomplete data with a selfserving motive, and using only fiscal 2012-13 and 2013-14 as reference years to infer that there is huge surge in imports resulting in "serious injury" to them. u. The period of investigation should be at least six years. For this investigation the period of investigation should h .....

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been a significant rise in the profits of the said applicant during the period of investigation, whereas the indexed profit per ton has increased from ₹ 100/- in 2013- 14 to ₹ 135/- in 2014-15. They say that there has been drop in the profit per ton in the subsequent year, viz., 2015-16 annualized based on first quarter figures. This is largely on account of sales realisation, owing to depressed market conditions worldwide. x. The surge in inventory levels during the Period of Inves .....

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makes a mockery of the Central Government's avowed policy dictum of "Make in India". aa. The end users are not concerned about the source of hot rolled coils (whether Indian or imported) as long as the quality is not compromised, and the price is more competitive. bb. The said applicant do not produce a large range of certain special steel grades which end users are therefore compelled to continue to import, as they have been doing historically and those end users will be penalize .....

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s would have to pay 20% more to the local suppliers. This would in turn monopolized the business of local mills and lead to anti-competitive practices. ee. The petition filed was Laconic even on merits and his conclusions of irreversible damage were wrongly founded: i. There is inverse correlation between the inventory of the stock held by petitioners and rate of duty. While the rate of Customs Duty increased from 5 % in 2011-12 to 12.5% in 2015-16, the inventory held by the applicants went up f .....

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were expecting to gain substantially blocking imports and doing away with the international competition to secure gains for themselves. iv. No evidence to show that any country was cutting down its prices or was dumping its product in Indian market. v. 20% duty can eventually damage the economy by curbing competitiveness of its manufacturing sector which consumes Steel, an by increasing the cost of building infrastructure. vi. Safeguard duty will create monopoly for the applicants. vii. Safegua .....

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osts, political issues of raw material supply etc. b. There is clear evidence from JPC of the export of approx. One million ton at price in line with import price and globally prevailing price. These prices were lower than the domestic price and created a deficit, which is very much the gap, which has been filled by imports. c. This is against the "Make in India" concept of reducing tariff barriers ad making available competitive environment. d. The largest constituent has been the imp .....

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l compel them to shut down their operations. b. The imposition of safeguard duty is against the very purpose of "Make in India" campaign and would culminate the import of finished products. XXXIV. WhirlpoolIndia Limited: They are a user of the subject goods in India. a. There has been decline in the prices of Steel around the world in past one year: - 34% in China - 22% in USA - 10% in Europe - 10% in India b. India being the lowest, due to: - Slowdown in the global economy - Decline i .....

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pport from the government? e. The government should take cognizance of price trends of steel globally and compares steel price in India with those prevailing in other regions. f. The government should take assurances from steel industry that during the period for which the safeguard duty is applicable (200 days) there should be no increase in steel prices. XXXV. Maruti Suzuki India Limited: Maruti Suzuki India Limited is an importer of the subject goods in India. They contend the following: a. T .....

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8, - Swadeshi Cotton Mills vs. Union of India 1981 SCR (2) 533, - Automotive Tyre Manufacturers vs The Designated Authority &Ors. - 2011-TIOL-03-SC-CUS. b. The Directorate General of Safeguard in the present case was appointed on September 7, 2015. The reliance was placed on in Automotive Tyre Manufacturers vs The Designated Authority &Ors. Where-by it was stated that the new designated authority should have provided a separate hearing. c. India being member of Comprehensive Economic Par .....

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nt case no intimation has been provided to the Embassy/ Government of Japan regarding the initiation of the investigation proceeding regarding the import of the product under Consideration from Japan. The act of issuing a Preliminary Finding by the Authority, without providing any intimation or information to the Embassy/ Government of Japan, is an act of clear defiance of the provisions of the FTA. The reliance was placed on US- Underwear , Appellate Body Report, US-Underwear, where it was held .....

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ion with respect to the imported product has not been done by the petitioner. Therefore certain products identified by the petitioner in the petition and thereafter relied upon by the Authority in the Preliminary Finding for the import data are not correct and fall outside the scope of Product under Consideration. f. In the past also the Designated Authority in Anti-dumping investigation had excluded certain Colled Rolled Steel Products imported from China PR, Japan, Korea, European Union, South .....

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the import data of the Product under Consideration as provided by the Petitioner. i. The Authority has nowhere recorded the Product under Consideration with that of the products imported by the importers on the touchstone of the definition of "like product" as provided in the Rule 2 (e) of the safeguard Rules. - The Product from Korea and Japan is not like article in terms of the Rule 2(e) of the safeguard Rule and thus different from the product manufactured by the domestic producers .....

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Users Association vs. Designated Authority [2003 (157) ELT 150 (Tri-Del)], wherein was held that there is no justification in including those grades that are not manufactured in India. - The Product under Consideration are heterogeneous set of products imported and thus they cannot be included in the same grade for comparison with the products manufactured by the domestic producers/ petitioners. The reliance is placed upon Panel Report issued by WTO in DS 427- China- Anti Dumping and Countervai .....

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ave been procured from the above-named domestic producers, which also include two Petitioners. It is only the remaining 7% of the special kind of steel, the demand of which is not fulfilled by the Domestic industry, is imported from Japan and Korea by the respondent. Indian products are different from the products that are manufactured from these countries : - Imported products are manufactured by Japanese Industrial Standards, - Includes better making standard, chemical composition, Categorizat .....

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ct imported is manufactured by way of patented state of the Art technology and the same has distinct characteristics. l. The Petitioner have claimed excessive confidentiality and sufficient information is not supplied by them in order to determine the manufacturing, production and sales of the Domestic market. The petitioners did not provide any reasons for claiming the confidentiality on the information provided to the Authority. The Respondent have relied upon Sterlite Industries (India) Ltd. .....

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el of safeguard Duty recommended by the Authority. The Authority did not follow the principle laid down in Article XIX of GATT 1994. The initiation notice was silent on the unforeseen development that has led to increase of imports of Product under Consideration. The petitioner also failed to show factual or legal basis to demonstrate that unforeseen development exist in the present matter. o. There has been miniscule increase in the import data as provided in the petition. No justification prov .....

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the same level. The Authority has not substantiated as to what are the critical circumstances to warrant an issue of Preliminary Finding. The Authority has acted in contravention principles of safeguard investigation. q. No evidence provided by Petitioner to show serious injury. The Authroity has ignored in the Preliminary Finding that the requirement under Safeguard Rule is to initiate investigation only when there is "sufficient evidence" to suggest that the increased imports of the .....

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apacity for the Product under Consideration from total Capacity is still unclear. - Essar Steel India Limited has made complete Turn around and earned profits from operations. Particulars FY 2014-2015 (Rs. - Crores) FY 2013-2014 (Rs. - Crores) Gross Revenue 19,258.50 16,286.59 Net Revenue 17,162.39 14,348.55 Profit/(Loss) before exceptional items and taxation 334.29 (3,916.21) Profit/(Loss) before Taxation 1,008.96 (2,314.74) Earnings per share (diluted) ₹ 2.26 Rs. (5.70) s. JSW Profitabil .....

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ation of the Domestic Producers as per Para 25 (d) of the Preliminary Finding. - The Authority in Preliminary Finding has also not pointed out any possibility of likelihood of a sudden decline in the capacity utilisation of the Domestic producers. - The Authority has not corroborated any piece of information provided by the Petitioner and has without any recording any reasons assumed a prima facie case and initiated the investigation process. - The safeguard duty will have cascading effect on th .....

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of the total steel consumption in India. This is very small share of total market. b. Government has already given too many benefits to the steel mills. c. Importers are a very small percentage of total market and are catering small and medium sized business and startup companies which require goods on credit basis. Domestic manufacturers are unable to cater to such small requirements. d. Prices of raw material fell steeply. Thus domestic mills should also be able to decrease their prices. It is .....

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In India no manufacturer is available to supply above 4mm hot rolled skin passed pickled and oiled laser stabilized sheets. Skin passed is required to meet required flatness in our parts. b. No manufacturer is available in India to supply laser stabilized material. Our parts are manufactured in laser cutting for which stabilized material is required. c. Most of the items manufactured out of these sheets are functional components with precise tolerance. d. Imposition of safeguard duty will lead .....

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s and OEMs. The imposition of safeguard duty will increase the cost of raw material which will further increase the cost of vehicles. This will adversely impact the automotive industry. XXXIX. Neel Metal Products Limited a. A lot of special grade HR steel is imported by secondary mills, direst users and OEMs. The imposition of safeguard duty will increase the cost of raw material which will further increase the cost of vehicles. This will adversely impact the automotive industry. b. Neel Product .....

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ere not applied for advance authorization for import of raw material @ 0% duty, but it opted to get the export incentive under "All Industry Rate Draw Back Scheme' @1.9% of export FOB value. Due to provisional safeguard duty of 20%, cost of raw material of these equipment have risen. Larsen & Toubro requests DG Safeguards to waive the safeguard duty for imports of inputs required for manufacture of export products. XLI. Uttam Value Steels Ltd.: The Company extends full support for i .....

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G Safeguard should look at a fair floor price mechanism for imposition of safeguard duty for HR Coils. Moreover, CR/CRCA should also be considered along with HR for purpose of imposing safeguard duty. XLIII. Nippon Steel Pipe India Pvt. Ltd. (NPI) represented by AZB & Partners a. NPI imports 22 different specifications of PUC which are used for producing tubes for automobile manufacturing. Hot rolled flat products imported by NPI differ in chemical composition of components such as carbon, m .....

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ould affect NPI's supply chain adversely. This would decrease production volumes to the extent that customer demand stemming from the Indian automobile industry would not be able to be met. Further, in view of lower profitability as a company, NPI may also be forced to lay off employees. e. NPI requests DG Safeguards to exclude from the scope of the PUC, imports used for the production of Tortion beam, door impact beams, stabilizers in automobiles, front forks in motorbikes and other product .....

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tonnes at a price in line with the import price and globally prevailing price. These prices were lower than the domestic price. c. Existing barrier of 12.5% duty and high interest rates will lead to a situation of Indian manufacturers becoming non-competitive and will lead to imports of finished goods. d. One of the large constituent in import figures are the imports made by POSCO India and China Steel Corporation for captive consumption. If these figures are removed, so called trumpet of huge .....

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ifically authorized to collect and maintain such data. Further, the methodology used for sorting the product under consideration is a mere reproduction of the definition of the product under consideration and does not sort the product as claimed h. Applicants have misrepresented to the Authority by submitting that one of the uses of the subject goods is for automotive industry. Automotive industry relies on alloy steel products which has negligible domestic production i. If alloy steel productio .....

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ed from total imports. l. The Applicants have not excluded the imports under advance authorization i.e. imports for exports which needs to be excluded for computation of total imports. m. Decrease in market share of the Applicants is due to increase in market share of the 'supporters' to the Petition. n. The reasons of unforeseen developments specified are mere global scenarios of events which has no "India Only" impact. o. The Capacity utilization of the Applicants has reached .....

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alaysia is unsustainable and misleading as the surge in imports and other parameters were very critical in those countries. s. The Applicants have nowhere through the Petition specified the measures that the affected party is required to take to check and counter the perceived surge in imports. t. The Applicants intend to maintain higher prices in domestic market and create artificial shortage by resorting to exports which is evident from the price comparison of domestic prices vis a vis general .....

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, the Applicants have not shared the actual profits on ground of confidentiality although the information with regard to profits of a listed company cannot be subjected to confidentiality. x. The profitability and ROCE of the domestic industry has no bearing on the alloy steel products. Applicants have made a vague statement that imports during August 2015 is in the range of USD 320-350/MT. Applicants have not provided details of alloy steel imports as two distinct products cannot have the same .....

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s as per these standards with various steel mills globally, among which there are various Indian steel mills like Tata, JCAPCPL, JSW, POSCO. b. HCIL has been working to localise its raw material requirements to a large extent. However, even after lots of localisation, local steel mills have not been able to meet HCIL's entire steel grades requirement. To meet its requirements, HCIL is importing some of HR material either for direct application or as a raw material for cold-rolling by local m .....

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ntinue use of imported HR material directly or indirectly which will have a huge cost impact, and lead to increase in manufacturing cost of HCIL's cars. e. HCIL understands that the safeguard measure is being taken to curb excessive dumping of imported steel in Indian market to save interest of local steel mills, but considering that for some of the automotive grades, there are no appropriate substitutes available with local steel mills or local steel cannot be used due to technical reasons .....

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ick plates of ASTM 537 Class-I has been assessed by Mumbai Customs under BE No. 2699772 dated 24 September 2015 with 20% safeguard duty. Although Customs clearance of these plates was nil duty under Advance Authorisation No. 1110027559 for an export job, the bond value was debited with 20% safeguard duty and it is apprehended that safeguard duty of 20% may be imposed by Customs on subsequent imports. b. The domestic industry does not have capability to manufacture following category of carbon st .....

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ibed as flat products under CTH 7208. Moreover, the Plates, as indicated above are not manufactured by domestic industry and hence there is no need for levy of safeguard duty. d. It is requested that suitable amendment/instructions under Notification No. 02/2015 dated 14 September 2015 should be issued to avoid misinterpretation of safeguard provision and exempt import of Steel Plates (Flat Products) falling under CTH 7208 from imposition of 20% safeguard duty. C. POST-PUBLIC HEARING WRITTEN SUB .....

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PUC keeping in view the availability of API Grade Steel for Indian users. a. It is being observed by the domestic industry from various reports in media that some of the Indian importers / foreign exporters are trying to evade the provisional safeguard duty applicable on commercial / base grade structural steels (meant for conventional structural applications) in the guise of 'API 5L' grade, which is exempted from safeguard duty. Therefore, Domestic Industry requests DG Safeguards to ki .....

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her accounts for more than 50% of the total production of PUC in India and it represent a major proportion of Indian production of the product under consideration in the country. f. Imports have increased from 2,219,711 MT in the year 2011-12 to 4,167,886 MT in the year 2015-16 (Annualized). Further, imports have increased more than threefold during 2015-16 as compared to 2013-14. g. The average quarterly import during 2011-12 and 2012-13 was around 550,000 MT. From that level, average quarterly .....

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. Increased imports of the PUC are causing injury to the domestic industry and are having a significant impact on production, sales, capacity utilization and profits of the applicants. l. The market share of imports of the PUC has almost doubled in total demand including captive in 2014-15 from the previous year 2013-14. A similar trend is also visible for market share of the PUC in total demand excluding captive. The imports have taken away all the increase in demand of the PUC m. The quarterly .....

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ed out soon. n. During 2014-15, demand (excluding captive) increased by 1,158,614 MT compared to 2013-14. At the same time, sales of the applicant domestic industry decreased by 393,351 MT during the same period. The Domestic Industry has not been able to increase its sales commensurate with the increase in demand. o. The domestic industry has made significant investments during 2012-13 and 2013-14 in view of increasing demand of subject goods in India. However, capacity utilization of the Domes .....

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mports. If the Domestic Industry does not respond to imports by bringing down its prices, it will loose more customers and the injury would be more severe. s. Price underselling which was negative during the first two quarters of 2014-15, has turned positive during the last two quarters of 2014-15 due to the surging imports at alarmingly low prices. t. Following are such factors (Unforeseen developments) that may be attributed to the increased imports - Crisis in global steel market due to slugg .....

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se in imports of the subject goods and the serious injury being faced by the Domestic Industry. v. The landed value of the imports has been decreasing constantly. From April 2014 to September 2015, the landed value of imports has fallen by approx. 30%. w. During the month of October 2015, imports from Korea RP are coming into India at CIF value of US$ 224 per MT. This clearly shows that provisional safeguard duty imposed by Government of India has been absorbed by the exporters. Submissions by E .....

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Indian producers. d. The reduction of share of Russian import confirms the lack of intention of the Russian producers to extend their deliveries to India. The considerable part of it plays the fact that the Russian producers do not have significant export potential for delivery the hot-rolled flat products. e. The fact that regulations of WTO stipulates the possibility of pointed neutralization of unfair methods of competition with resort to antidumping or countervailing measures. Besides that, .....

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deliveries from China PR, Japan and Korea RP, remains at the same level. Investments level of Indian producers - shows increase. III. Federative Republic of Brazil a. Safeguard measures are emergency measures, these should be applied only after complying with the high standards set by the WTO Dispute Settlement Body. b. India failed to notify imposition of provisional safeguard measure prior to its imposition, India failed to satisfy the requirements under Article 12.4 of the SA. c. The Authori .....

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that the Indian Authority chose to ignore data for the period April 2011 to March 2012, despite the fact that such data was available with the Authority. This, according to Brazil is a violation of Article 4.2(a) of the SA. Brazil further argues that the period for examination of serious prejudice should be three years as per the recommendation of the WTO Anti-dumping Committee and the period of two years and one quarter in this case is not sufficient. Brazil argues that the period of investigat .....

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no causal link in this case, as an analysis of other factors indicates that injury to the domestic industry is not due to imports but other factors. f. Share of each exporting country has not been informed by the Authority and a list of developing countries has also not been provided. Brazil also argues that the period taken into account for calculation of the volumes imported from each source has not been specified. Due to lack of such essential information, Brazil argues that it has not been .....

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fluctuation which cannot be ruled as unforeseen. b. There are no critical circumstances within the meaning of Article 6 of the Agreement on Safeguards ("SA") that warranted imposition of provisional safeguard duty. c. There is no serious injury or threat thereof to the domestic industry. d. Imposition of safeguard duty is not in public interest as downstream industries such as automotive and consumer durables might suffer. e. Provisional safeguard duties should be immediately revoked. .....

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e Director General to update the aforesaid notification so that Taiwan's economic status as a developing country is reflected correctly. VI. European Commission a. Safeguard instrument should be used in exceptional circumstances only and the present case is suitable for anti-dumping or anti-subsidy investigation. b. Certain specific grades of the subject goods should be excluded from product scope as the domestic industry may not be manufacturing them. c. Use of annualised figures for 2015-1 .....

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ndian producers have increased their open market sales by 42%. VII. Government of Indonesia a. Indonesia notes that levy of provisional safeguard duty would impact their exports to India. b. Imports have increased by 97% between 2013-14 and 2014-15 but the increase between 2014-15 and 2015- 16 (Annualised) was only 33%. Therefore, there is general decline in the level of increase and such imports should not be treated as sudden, sharp, significant and recent. c. There were no critical circumstan .....

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uently, imports from Indonesia cause no serious injury to the domestic industry. g. India has increased import duty on steel recently but imports from certain Asian countries are happening at low duty to bilateral trade under India-ASEAN FTA, India-Japan CEPA and India-Korea CEPA. VIII. Republic of Turkey a. Competent authorities are required by the WTO rules to identify the existence of "unforeseen developments" which have led to "increased imports" causing or threatening to .....

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2015-16 and disregarding 2011-13 periods raise questions and pave the way for misleading perceptions in analysing the effects of imports on the Indian domestic industry. d. Movement in injury parameters for period 2011-12 and 2012-13 should also be examined. Slight increases in imports in recent period should be regarded as routine. e. Upward movement of profitability in 2013-14 and 2014-15, and increases in sales during the injury analysis period do not indicate serious injury to the domestic i .....

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ould be excluded from the purview of safeguard duty in terms of Article 9.1 of the Agreement on Safeguards ("SA"), as it is a developing country. IX. Embassy of Ukraine a. Imports of the subject goods increased only by 14% in 2014-15, as compared to 2011-12. Such a slight increase in imports cannot be considered as significant enough to cause or threaten to cause serious injury. b. The Authority initiated the investigation based on forecasted data for 2015-16, which was annualised base .....

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imports into India decreased by 41% in 2014, when compared to 2010 levels. d. Consequently, there was no reason for India to initiate the investigation or impose provisional safeguard duty within the meaning of Article 2.1 of SA. e. Industry indicators show positive trends for domestic sales, production, market share, capacity, capacity utilisation when parameters are compared in 2014-15 vis-à-vis 2011-12. Therefore, there was no reason for India to come to a positive determination for se .....

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Exporters and Associations X. China Iron and Steel Association; Angang Group Hong Kong Co. Limited; Angang Steel Company Limited; Shanghai Meishan Iron & Steel Co., Limited; Angang Group International Trade Corporation; Baosteel Singapore Pte Ltd; Maanshan Iron & Steel Co., Ltd.; Benxi Iron & Steel (Group) International Economic & Trading Co., Ltd.; Jiangsu Shagang Group; Handan Iron & Steel Group Co., Ltd. represented by Athena Law Associates a. Safeguard measures are based .....

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an extraordinary or emergency situation and thus should be dismissed. b. The PUC selected is too wide and placed together heterogeneous products. As per Section 8B(1) of the Act read with Rule 4, a duty is cast upon the DG to specifically identify the article liable for safeguard duty. The PUC needs to be identified in singularity and there may be plurality of articles which can be called like articles. The Delhi High Court in Andhra Petrochemcials Ltd. v. Designated Authority supports this argu .....

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for a safeguard duty to be imposed are - sudden and sharp increase in imports; sudden increase should be on account of unforeseen developments; serious injury or threat of serious injury to the domestic industry; causal linkage between injury and increased imports; ability of domestic industry to adjust itself to meet competition after withdrawal of duty; and duty must not be against public interest. The above legal standards have not been met in the present investigation. d. There is no sudden .....

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the years and even a quarterly examination of imports during FY 2014-15 shows that there is no sudden and sharp increase in the imports in the recent period. Imports have rather declined in Q1 of FY2015-16 from 3.60 million MT in the previous quarter to 3.38 million MT. There were sharp increases between 2013-14 and 2014-15 but the domestic industry was in profit then. The increase, if any, was of a temporary nature with a strong reversal character as evident during FY 2015-16 (Q1). f. Article .....

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aims do not establish the existence of unforeseen developments concerning the product. Applicants claim that exports from Russia, Ukraine, China and EU have suddenly increased on account of geopolitical tensions, excess capacity and currency depreciation is a false statement. Imports from China diminished by almost 50% between FY 2014-15 and FY2015-16(Q1). Also there was a dip of 4.22% between 2011-12 and FY2015- 16(Q1). Therefore, there is no logical connection between the increase in imports a .....

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ant changes in the capacity of the Applicants. Even if the entire demand was met by the Indian producers, there would be excess capacity in India. The excess capacity is obviously targeted towards exports markets iii. Sales of domestic industry increased and that of other domestic producers is much higher. iv. Indian producers hold 88% of the Indian demand and only 12% is held by imports. v. ROCE has increased, particularly in FY2015-16 (Q1) over FY 2012-13. The decline in FY2015-16 (Q1) should .....

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roductivity and employment remain robust. h. Indian producers have participated selectively with companies such as Tata Steel, Bhushan Steel not giving injury data. Therefore, DG should examine injury data of the supporting producers as well to comprehensively examine the alleged injury situation of the domestic industry. i. The Applicant has not provided information to establish that it is suffering injury. Further, there is no causal link between alleged injury to the domestic industry and the .....

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ed that interested parties were to be given 30 days to make their views known to the authorities but without waiting for any response the authority issued the preliminary findings. m. Applicant do not qualify as domestic industry under Section 6(d) of the CTA as it cannot be concluded that the Applicants constitute 50% of total Indian production. n. The Applicant has claimed excessive confidentiality and does not allow a reasonable and meaningful understanding of the domestic industry's case .....

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laws. In an application filed by United Phosphorus in 1999 for safeguards duty imposition, the authority refused to impose a safeguard duty on the ground that imposition of the duty would not be public interest. XI. Metinvest Group represented by Van Bael Bellis Metinvest Group filed a summary of their contentions taken in the pre-hearing submissions, which have been comprehensively summarised earlier. The contentions are not repeated herein for the sake of brevity. XII. Dillinger Huttenwerke a. .....

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failed to examine the adequacy and accuracy of evidence in terms of Rule 5(3) of Safeguard Rules. b. The DG Safeguards has erred in issuing the preliminary findings in absence of critical circumstances in terms of Article 6 of the Safeguards Agreement and Rule 2(b) of the Safeguards Rules. c. Petitioner has not provided any coherent methodology in arriving at the product under consideration. HRC being imported are sued in a variety of downstream industries such as automobiles, home appliances, .....

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ts exported to India satisfy certain OEM required specifications high hole expansion rate, high formability, required tensile strength, conditions of surface, etc., which the domestic industry till date has not been able to produce successfully. The Indian customers rely exclusively on the hot-rolled steel coil supplied by certain Japanese mills, since it is critical for the structural application and no perfectly substitutable product is manufactured by any domestic manufacturer. g. The process .....

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imposition of safeguards, auto-manufacturers will need to continue use of imported HRC directly or indirectly, which will need to continue use of imported HRC directly or indirectly, which will lead to a significant increase in the manufacturing cost of automobiles. h. The DG Safeguards has clubbed all grades of hot-rolled coil products into a single PUC. It is not clear from the application and preliminary findings if the PUC excludes hot-rolled coil products which are exported by the Japanese .....

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show the correct picture. Market share of domestic industry has declined due to inter-se competition. Captive consumption by Petitioners has increased. There is no decline in productivity and employment, capacity utilisation, profits have increased in 2014-15 when imports have also increased in the same period. The domestic industry is already protected by the high customs duty of 12.5% on HR coils. k. There is no causal link in this case. The domestic industry has also failed to identify other .....

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f HR coils in order to maintain shortages and high prices in the domestic market. Shortage of supply of PUC in the domestic market is evident in the JPC data, which is maintained by the Ministry of Steel. Therefore, safeguard duty will not be in public interest and in particular detrimental to the Indian auto industry. It will also frustrate the aims and objectives of Make in India programme of the Government of India. Safeguard duty will also be detrimental to downstream producers of cold-rolle .....

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tigation period selected by the Indian authorities which also includes 2015-2016 based on annualized data. b. In fact, the situation of imports shows a significant decrease from 2011 until 2014: by 13% between 2011- 12 and 2012-13, and by 40% between 2012-13 and 2014-15. Between 2011 and 2014, imports decreased by almost 50%. c. The decrease in 2013-2014 was followed by a recovery of the imports levels to a level comparable to the level prior to the decrease and can hardly be viewed as "sha .....

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ased results. All the more that all other factors show stability or positive evolutions. g. Petitioners lost 5% market share when non petitioners gain 5% market share. It is an indication of a lack of coincidence between alleged injury and imports and that there is in fact an internal competition issue. h. While the domestic industry's sales remained stable throughout the period, its captive sales increased by 24%. It is against the demonstration of a serious injury? i. There is currently a .....

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tion a. The investigation process followed by the Directorate General (Safeguards) is totally contrary to the instructions given to all the interested parties with regard to filing of responses to the Initiation. b. The Directorate General (Safeguards) did not wait for the basic process to complete and in a hasty manner issued its Preliminary findings with thin 3 days of the initiation of the investigation. c. Trade Notice SG/TN/1/97 dated 06-09-1997 puts an obligation on the Directorate General .....

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e issued by Directorate e. The Domestic Industry had adopted base year as 2011-12 as base year but DG Safeguards has of its own has changed the base year.If DG Safeguards adopted 2011-12 as base year there would not have been any increase in imports rather market share of imports from China in total demand would have shown a decline from 20% to 12%. On the contrary the DG Safeguards has adopted a base year as 2012-13 to show an increase from 6% to 12%. This playing of numbers clearly shows that .....

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ilent on this issue. i. Taiwan is widely regarded as a developing country by multiple WTO members and international organizations and hence Imports from Taiwan must fall within the "developing country" clause. j. High-strength steels (HSS) used primarily by the Indian automobile industries, including, but not limited to, E34 SS4012A, JSH780RNN-22002OP, SAE 1005M, SAE 1006, SAE 1006M, SAE 1008, SAE 1040, SCM435, SPA-H , SS400, SS490, CUST-S235, JSH590RNN-22002OP,JSH780RNN-22002OP, SAE 1 .....

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preliminary safeguard duty. XVI. Hyundai Steel Company, Korea: M/s Hyundai Steel Company, Korea vide their e-mail informed that their earlier submission dated 08.11.2015 (summarized above) may be treated as their final submission in the matter. Submissions by Importers, Users and Associations XVII. Mitsui & Co., Ltd./Japan a. Mitsui has currently 23 joint ventures in India and one of them is M/s. Indian Steel Corporation (ISC) in Gujarat State. b. Currently ISC is suffering from SG duty. SG .....

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erious situation. As such, HRC from Japan for major re-rollers is based on MOU, a kind of long term understanding of supply & purchase. e. From foreign investor's point of view or as shareholder of ISC, if favoring HRC or raw material industry through safeguard duty only at the expense of steel user segments or manufacturing, it is hostile environment for growth of manufacturing industries, obstacle for foreign investment and "Make in India" vision. XVIII. Federation of Industr .....

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c. d. Safeguard duty imposed on HR Coil without imposing any duty on the downstream products has no meaning and this will finish the value adding downstream Industry in India. XIX. Nippon Steel & Sumikin Pipe India Co., Ltd. a. From a plain reading of Article 2(1) the SGA along with Rule 2 of the SG Rules, it is clear that safeguard measures cannot be imposed on imports that are not identical or alike in all respects to the products produced by the domestic industry. b. The Hot Rolled Coils .....

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cture of automotive pipes that Indian domestic steel manufacturers (i) are unable to supply HRCs of sufficient quality or (ii) have not obtained the approval from the ultimate end users (i.e., the automobile manufacturers). g. NPI is unable to use HRCs produced by the Domestic Industry because the Domestic Industry has not secured industrial user approval for their products. XX. Cold Rolled Steel Manufacturers Association in India (CORSMA) a. D.G. Safeguards in his Report dated 09th September 20 .....

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done to identify the reasons for the variations for remedial action for a rational decision on the Petition by the Govt. d. The statement made by the Petitioners in regarding surge in imports in April-July 2015 is entirely misleading and as it does not indicated reasons for rise in imports in April-July 2015 y.o.y., simple analysis shall reveal that imports rose from 4.71 lakh tonnes in April-July 2014 to 1.144 million tonnes in April-July 2015 by 6,73,000 tonnes due to decline in domestic produ .....

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t may be clarified that most of the Petitioners have their own captive Power Plants and the issue is the high Power consumption per tonne of Steel by around 30% vis a vis the global standards which needs reduction. h. The imports of Hot Rolled Coil were essential, diversified and at global prices to bridge the gap between the domestic availability and production both in terms of quantity and quality. i. The rise in imports in the first quarter of 2015-16 was due to the facts that while the domes .....

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et investments in India and abroad in Steel and other industries incurring debt and interest burden. l. The financial performance should be improved by sale of stake as held by RBI rather than destabilize the industrial and economic growth of the country by blocking Steel imports and monopolistic pricing by the domestic producer. m. The imposition of Provisional Safeguard duty on the imports of HR Coils has also led to inverted duty structure as while be total import duty on HR Coil the intermed .....

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tract and L/C was 30/09/2015 and the material was shipped on 29/09/2015 and 20% Safeguard Duty was imposed on 14/09/2015. c. This imposition resulted in huge unforeseen cost to them which is threatening their existence. d. All integrated plants also produces downstream products and capitally consume H.R. Coil as Raw material, hence are not in a position to supply H.R. Coil to the standalone downstream industries like them who consume H.R. Coil as Raw material. e. The other domestic industries i. .....

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long products like billets etc. for Re-rollers which in turn again suffers with the quality issues. i. The demand for H.R. Coil in India will diminish as all downstream products will be imported and thus defeating the very purpose of Safeguard Duty of protecting domestic industries. XXII. POSCO, Korea & POSCO Steel, Maharashtara a. A significant percentage of the PUC (almost 90%) has been imported for use exclusively by POSCO Maharashtra from POSCO Korea, as raw materials or their downstream .....

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ving the total demand of PUC in the market, they have excluded the captive consumption of domestic industry while calculating its % market share in domestic market. d. However, at the same, no such method has been adopted for calculation of % market share of imports as the volume of imports captively consumed (which is a major proportion) has been considered for calculating the % market share of imports in domestic market. e. Market share of other producers have increased from 25% (2011-12) to 3 .....

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due to: (a) underutilization; (b) high debt/finance cost (being a capital intensive industry); (c) PUC when exported by DI are those prevalent in the global market; (d) PUC when sold by DI in domestic market is much higher than the global/international prices. i. The analysis of injury has been done on the basis of first quarter of 2015-which is not a correct method for injury analysis and a significantly long period of time must be considered for this purpose. j. A news article dated 05.06.201 .....

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ustrial Corporation Limited a. The company is an importer and stocks flat steel products. b. Capacity utilization of domestic steel firms is 76% which is higher than the world average of 72.86%. There has been no decline in the capacity utilization. c. Production of domestic steel firms has increased proportionately to the increase in capacity. d. There have been no job losses in 2014-15 but instead it has increased by 0.2% e. There has been hardly any market loss for domestic manufacturers. Thr .....

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lowing reasons: i. High freight costs as logistics costs in India are very high. Global steel producers are located near the shore which reduces their costs. ii. The ban on iron ore mines in India has reduced iron ore production as a result the decline in iron ore prices in India was minimal. Not all domestic producers have captive iron ore mines and even those that have captive ore mines have higher costs due to royalties, duties and higher pricing bids. iii. Capital costs in India are very hig .....

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partners in deep losses. k. India thrives on exports of capital goods and steel is one of the main raw materials for production of these capital goods. Exporters of these products will therefore face very high production costs and become incompetent. Imposition of safeguard measures on steel will reduce capital goods export by 25% and increase costs by 15% compared to global competitors. l. The safeguard duty has disappointed many foreign investors and puts India's relationship with Korea i .....

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rnational markets and our exports will further come down. b. Most passenger car companies import Automotive Grade HR Coils for quality reasons, since the imported steel is required to have a delicate balance of "High Tensile Strength" and "Formability" (or ability to take shape). We will continue to import this grade, as safeguard duty will not be an incentive to us to shift our purchases from foreign sources to Indian mill makers. c. Automotive Grade Steel is imported at USD .....

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be excluded from the scope of the investigation. If this is not possible, the Authority may fix a reference price of USD 450 ¡V USD 500 per ton so that all imports above this price will be exempted from payment of safeguard duty. This will protect domestic industry without affecting genuine importers of high quality material and export volumes. XXV. Manaksia Steels Limited Manaksia Steels Limited is an importer of the subject goods in India. They have made the following submissions: a. The .....

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as raw material. d. The imposition of Safeguard Duty is against the concept of "Make in India". XXVI. Maruti Suzuki India Limited a. The Preliminary Finding was issued by the DG Safeguard within 2 days of initiation of Investigation, without providing an opportunity of being heard to the importers, exporters and other interested parties. There by violating the Principles of Natural Justice. The Authority has issued the preliminary finding in hustle. They have relied upon: - Siemens En .....

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e-by it was stated that the new designated authority should have provided a separate hearing. c. India being member of Comprehensive Economic Partnership Agreement needs to abide by Article 23 of the FTA. Which states that India needs to follow certain specific guidelines in case of safeguard investigations initiated under FTA. FTA provides for a different regime for the initiation of bilateral safeguard measures with additional mandatory requirements to be complied with. The Authority has compl .....

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of clear defiance of the provisions of the FTA. The reliance was placed on US- Underwear , Appellate Body Report, US-Underwear, where it was held that prior publication of a measure, as required under Article- X of GATT, could not in and of itself, justify the retroactive effects of applying import quotas with respect to imports during a period starting before the quota¡'s publication date. e. No methodology for determination of the product under Consideration as the subject product fo .....

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ll outside the scope of Product under Consideration. f. In the past also the Designated Authority in Anti-dumping investigation had excluded certain Colled Rolled Steel Products imported from China PR, Japan, Korea, European Union, South Africa, Taiwan (Chinese Taipei), Thailand and USA, from the scope of investigation for the reason that those were not considered to be like article within the meaning of the Safeguard Rules. g. In the instant case, the petitioner has sought inclusion of all grad .....

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uot;like product" as provided in the Rule 2 (e) of the safeguard Rules. - The Product from Korea and Japan is not like article in terms of the Rule 2(e) of the safeguard Rule and thus different from the product manufactured by the domestic producers. Product under Consideration imported by the Respondent from Japan and Korea are of superior quality. - The need for the import of Product under Consideration from Japan is because of the incapacity of the Domestic Producers to supply the high q .....

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products imported and thus they cannot be included in the same grade for comparison with the products manufactured by the domestic producers/ petitioners. The reliance is placed upon Panel Report issued by WTO in DS 427- China- Anti Dumping and Countervailing Duty Measures on Broiler Products from the United States. - The inclusion of the non- furnished Product under Consideration by the Authority is unjustified and not required as these products are imported in different volumes and are differe .....

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rea by the respondent. Indian products are different from the products that are manufactured from these countries : - Imported products are manufactured by Japanese Industrial Standards, - Includes better making standard, chemical composition, Categorization, Tensile strength, draw ability and wend ability of the Product. - Indian products have no mention of Hole Expansion Role - There is difference in quality level (formability, crack generation during rolling etc) for different steel makers fo .....

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ne the manufacturing, production and sales of the Domestic market. The petitioners did not provide any reasons for claiming the confidentiality on the information provided to the Authority. The Respondent have relied upon Sterlite Industries (India) Ltd. vs Designated Authority. m. The importers and the interested parties were not intimated by the Authority about the development regarding the examination and corroboration of the information provided by the Domestic Producers. Without corroborati .....

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nder Consideration. The petitioner also failed to show factual or legal basis to demonstrate that unforeseen development exist in the present matter. o. There has been miniscule increase in the import data as provided in the petition. No justification provided to show on which petitioners have annualised the imports for the entire year of 2015.There is gradual increase in the imports of the Product under Consideration and there is no "sharp", significant or "sudden" increase .....

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Petitioner to show serious injury. The Authroity has ignored in the Preliminary Finding that the requirement under Safeguard Rule is to initiate investigation only when there is "sufficient evidence" to suggest that the increased imports of the product has caused an injury to the Domestic Producers. r. The Authority has acted in contravention of Paragraph 1 and 2 of the Annexure to the Safeguard Rules. The Respondent relied upon the Appellate Body Report on US- Cotton Yarn. Following .....

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ss Revenue 19,258.50 16,286.59 Net Revenue 17,162.39 14,348.55 Profit/(Loss) before exceptional items and taxation 334.29 (3,916.21) Profit/(Loss) before Taxation 1,008.96 (2,314.74) Earnings per share (diluted) ₹ 2.26 Rs. (5.70) - JSW Profitability have increased Particular FY 2014-2015 (Rs - Crores) FY 2013-2014 (Ra- Crores) Growth % Gross Turnover 49,658 48,527 2% Net turnover 45,352 44,529 2% Operating EBIDTA 8,872 8,783 1% PAT 2,166 1,335 62% Earnings per share (diluted) ₹ 88.24 .....

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e Authority has not corroborated any piece of information provided by the Petitioner and has without any recording any reasons assumed a prima facie case and initiated the investigation process. - The safeguard duty will have cascading effect on the overall prices of vehicles and parts on the automobile industry. s. A number of automobile companies and OEMs are extensive importers of the subject products, and levy of any safeguard duty will affect the business interest of the said importers subs .....

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v) 16 MnCr5 vi) SAE 1006/1010 vii) ST 52.3 b. Floor price mechanism should be implemented to control cheaper imports. c. CR/CRCA should also be included along with HR for effecting safeguard duty. d. Quantity of subject goods already contracted as on the date of implementation of provisional safeguard duty should be excluded. XXVIII. Bombay Iron Merchants Association (BIMA) represented by M/s. MV Kini Law Firm a. Imports undertaken with respect of each of the products have to be confirmed to see .....

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kept the domestic prices much higher and increased exports at globally competitive prices. Applicants have decreased their export prices by almost 35% against a mere 4% decrease in domestic prices. d. Surge in imports in 2014-15 relates to import by POSCO (approx. 1 million tonnes) in 2014 to set up its plant in Maharashtra. If this import by POSCO is excluded, it would rather show a slump in imports. e. Major Applicants have shown a rise in sales turnover. Sales figures of JSW Steel Ltd. show a .....

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. Authenticity of the IBIS data relied by the Applicants is questionable as it reflects inflated figures when compared with the JPC data. i. Prices of major raw materials have dropped between 40-60% and the selling prices of the subject goods must be adjusted accordingly. j. Comparison with trade measures by countries like Thailand and Malaysia is unsustainable and misleading as the surge in imports and other parameters were very critical in those countries. k. Applicants are themselves importin .....

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ions: e. The steel sector is facing excessive debts and losses due to such factors are not attributable to import prices of steel in India. f. Quantities imported under advance authorisation cannot injure the Applicants. g. There has been undue haste in imposition of provisional safeguard duty in this case. h. The PUC only accounts for 9% of the capacity of the applicants. i. JPC is an officially empowered agency in India for the collection and maintenance of data, by the Ministry of Steel. Ther .....

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1104 2006 Indexed 100 103 60 109 As per JPC data, the increase over the period of 4 years (which is a more logical period for a trend analysis) is only about 9%. While alleging surge in imports in 2014-15 over the period of 2013-14, a due thought has not been given to the fact that there was an abnormal drop of roughly 40% in the earlier year mainly due to the unprecedented dollar volatility during that period. Moreover, the applicants took the advantage of this dollar volatility and increased i .....

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expense of the Indian consumers and infrastructure development in India and on the other hand, making windfall profits for themselves. The same is evident from JPC data. l. The subject goods which are used as raw materials for certain re-roller mills such as POSCO, Uttam Steel, National Steels, Asian Color Coated etc. it needs to be noted that PUC is a raw material and not a product for trade. In such cases, PUC is further worked upon and converted into cold rolled sheets / galvanized sheets / .....

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plants have declined POSCO to provide the subject goods due to their own inability to produce the required quality and quantity of those goods. The quantum of such imports of raw material may be around 35-40% of the total imports of PUC in India. n. The applicants have argued that the countries like Thailand and Malaysia had also taken recourse to these tariff barriers by imposing the safeguard and anti-dumping duties respectively. However, it is hereby submitted that the scenario of surge in i .....

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ports, changes in the levels of sales, production, productivity, capacity utilization, profits and losses and employment, none of these is adversely affected as misrepresented by the Applicants. p. The Applicants have not excluded the imports on account of captive consumption which needs to be excluded for the computation of total imports. The Applicants have not excluded the imports under advance authorizations i.e. imports for exports which needs to be excluded for computation of total imports .....

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raised by Petitioners in their petition, written submissions and during the course of this investigation should be deemed as part and parcel of this rejoinder and such contentions which are not repeated in the present submissions for the sake of brevity should not be held in prejudice to Petitioners. For all other issues raised by other interested parties, Petitioners provide their rejoinders below: a. Imports from developing countries that are below 3% should not be subject to safeguard duty: M .....

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iwan. However, Petitioners reiterate their contention here briefly. It is understood that a list of developing countries has been issued by the Government of India vide Notification No. 103/98-Cus dated 14 December 1998. It is pertinent to note that Taiwan's name does not feature in this list. Therefore, even if for the sake argument it is accepted that imports from Taiwan are below 3% and aggregate of imports from developing countries does not exceed 9%, Taiwan can still not be excluded fro .....

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t be subject to safeguard duty cannot be accepted either. b. No increase in imports within the meaning of Article XIX of GATT and Agreement on Safeguards ("SA"): Many interested parties have argued that imports of the subject goods are not sudden enough, sharp enough, significant enough and recent enough within the meaning of Article XIX of GATT and SA. Therefore, safeguard duty is not warranted in this case. Petitioners wholly object to this contention. Petitioners submit that the dat .....

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cluding captive) in 2013-14, which increased to 16% in 2014-15. This has further aggravated in 2015-16, where in Q1 of 2015- 16, imports were 19% in demand (excluding captive), which has now sharply increased to 24% in Q2 of 2015-16. If this does not qualify as a sudden, sharp, significant and recent increase in imports, then Petitioners do not know what else would constitute as a sudden surge in imports. The domestic industry is facing an emergency situation. Imports of the subject goods in the .....

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sion and depression. Imposition of safeguard duty alone can address the domestic industry's situation. c. Source of import data, methodology adopted in sorting import statistics and accuracy of information: Many interested parties have argued that import data from a private agency like IBIS is not authentic and tenable and the Authority should consider only JPC data. Interested parties further argue that a detailed methodology for determining product under consideration is not provided in th .....

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rity to procure DGCI&S data and compare the data with IBIS data to verify authenticity of the information. The Authority has the discretion to use IBIS or DGCI&S data. Further, Petitioners submit that JPC data cannot be used in this investigation because this data is only available at a broader level for the steel sector and not at PUC level, which is relevant for the purpose of this investigation. Further, interested parties have failed to clarify what kind of imports fall outside the s .....

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rovided by the domestic industry for treating them as confidential. Interested parties further argue that even the Authority has not recorded any reasons for granting confidentiality in the preliminary findings. Petitioners strongly object to the above contentions. Petitioners submit that they have exercised due caution while claiming confidentiality in the petition and have considered only such information as confidential disclosure of which could adversely affect the interest of Petitioners. F .....

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The domestic industry provided non confidential version of the application for safeguard measure as per the provisions of Safeguard Rules 1997 and Trade Notice No. SG/TN/1/97 dt. 06.09.1997. Further the domestic industry has submitted reasons for seeking confidentiality at the time of filing the application. 12. Rule 7 of the Safeguards Rules, 1997 and Art. 3.2 of WTO Agreement on Safeguards also provide for confidentiality. The applicant is not required to disclose such information which is co .....

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nterests of the domestic industry. In this regard, the Authority has adhered to Rule 7 of the Safeguard Duty Rules read with Article 3.2 of the SA to demonstrate compliance with the legal requirements. In accordance with the above, the Authority has granted confidentiality claims of Petitioners. Therefore, interested parties are wrong in arguing that the Authority has not provided any reasons while granting confidentiality claims of Petitioners. e. Deficiencies in the petition: Several intereste .....

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nnaire responses in both confidential and non-confidential versions along with the petition itself. Non-confidential versions of the questionnaire responses were also available in the public file. If interested parties failed to collect the questionnaire responses from the public file, then it shows negligence on their part. Further, all constituents of the domestic industry had provided a proper adjustment plan in their respective questionnaire responses. The Authority had also satisfied itself .....

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alify as domestic industry in this case. Interested parties rely on the table given under paragraph 25(b) of the preliminary findings and argue that market share of the domestic industry was 45% in 2013-14 and for Indian other producers, it was 51%. Similarly, it is argued that in 2014-15 as well as 2015-16 (Annualised), market share of other producers was 51%. Petitioners strongly object to this contention and submit that interested parties cannot be more wrong in advancing this contention. In .....

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a directly competitive article in India constitutes a major share of the total production of the said article in India. In terms of the above definition, Petitioners' production was 70% in total production during 2013-14, 68% in 2014-15 and 67% in Q1 of 2015-16. Thus, Petitioners clearly qualify as domestic industry in this case. Contentions of interested parties on standing of domestic industry are, thus, incorrect and should be rejected outright. g. Imports by domestic industry: Intereste .....

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s also supported by their data on record. Such miniscule imports were only for internal consumption and not for sales in open market. Therefore, the above contentions of interested parties are incorrect and should be rejected. h. Scope of the product under consideration: Several interested parties have raised issues on the product under consideration. All such issues are addressed below: i. HR Coil in thickness 2.00 mm and below: M/s Nezone Strips Ltd. and M/s Nezone Tube Ltd. argued that they h .....

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ndian manufacturer is not supplying to these companies, it cannot be a ground for exclusion of these products. Requirements of both the companies can be conveniently served by Indian steel manufacturers including Petitioners. Therefore, this specific product cannot be excluded from the product scope. ii. Automotive Grade of HR Coils: M/s Hyundai Motors India Ltd. argues that Korean Automotive Grade Steel should be exempted from safeguard duty as even after imposition of safeguard duty, they will .....

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oducers cannot supply this grade. Just because their R&D centre will not allow them to procure from elsewhere does not mean that the domestic industry should be allowed to suffer serious injury by exempting imports of this grade from safeguard duty. It is requested that M/s Hyundai Motors India Ltd. may be directed to specify the grade, along with chemical as well as physical parameters, for which they wish to claim exemption for subject to mutual discussion with the domestic industry. If th .....

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lability, quality issues and because TII has already identified and approved sources of supply which they cannot change now: a. SAE 1541 b. SAE 1020/1040/1045/1050/1055 c. SCM 435 d. Boron Steel e. 16 MnCr5 f. SAE 1006/1010 g. ST 52.3 TII's claims are baseless. They have failed to substantiate the availability and quality issues they are facing from domestic manufacturers. Further, if TII has approved their sources of supply, they can even approve domestic manufacturers for supply of the sam .....

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ited, which, in turn sells it to M/s Hyundai Motor India Limited. They argue that such imports are inevitable as stopping it would mean risking safety of passengers in automobiles. They argue that PO products should be kept outside the product scope. Petitioners strongly object to this contention and submit that Petitioners have proven capability to manufacture Auto Grade Steels including steels suitable for higher strength levels. The domestic industry can manufacture various categories of stee .....

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bile makers, their vendors and auto component manufacturers to which Petitioners supply the subject goods has been provided to the Authority. v. Hot-rolled coils based on narrowly defined customer specifications: M/s Nippon Steel & Sumikin Pipe India Co. Ltd. argues that hot-rolled coils based on narrowly defined customer specifications should be excluded from the product scope as these imports differ in tensile strength, steel cleanness, grain size and chemical composition. M/s Nippon Steel .....

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a position to make an appropriate response to the above contention. The Authority is requested to direct M/s Nippon Steel & Sumikin Pipe India Co. Ltd. to at least disclose specific grades, with chemical and physical characteristics, that this company imports so that Petitioners can appropriately examine and make comments. If M/s Nippon Steel & Sumikin Pipe India Co. Ltd. fails to disclose even this minimal information, their claim should be rejected outright, as Petitioners have been de .....

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uti Suzuki Ltd. admitted that they are trying to localise their procurement to the maximum extent. However, Petitioners submit that despite having proven capabilities to manufacture these grades, M/s Maruti Suzuki Ltd. hardly gives an opportunity to domestic manufacturers to supply these grades. This goes contrary to M/s Maruti Suzuki Ltd.'s claim that that they are trying to localise procurement of all raw materials. M/s Maruti Suzuki Ltd. should give an opportunity to domestic manufacturer .....

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0 and Grade JSH 590 from its parent company M/s Suzuki, Japan, then it would be in their interest to continue such imports from M/s Suzuki instead of sourcing them locally. Therefore, there claim that they are trying to localise procurement is nothing but misrepresentation before the Authority. It is understood that M/s Maruti Suzuki Ltd. has a long-term procurement agreement with M/s Suzuki, Japan to procure the above grades. However, such fact has not been disclosed to the Authority. In light .....

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teel constitutes only 7- 8% of total domestic production and more than 90% market share for non-alloy steel is with domestic units. FAM further argues that such low imports of non-alloy steel do not warrant imposition of safeguard duty. Petitioners strongly object to these claims. FAM is relying on JPC data which is not at PUC level. Therefore, the assumptions taken by FAM in their analysis are incorrect. Further, in the later part of this submissions, it can be seen that market share of imports .....

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summarise the issue briefly, it is submitted that imports which are characterised as alloy steel under tariff item 7225.30.90 actually have very minute quantities of boron due to which they get classified under this tariff item. These imports are disguised as alloy steel and are severely affecting the domestic industry, as these imports are technically and commercially substitutable with non-alloy flat products of hot-rolled steel in coils produced by the domestic industry. Due to this reason, P .....

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de used in automobile industry should be excluded from product scope. As stated earlier, Petitioners have proven capability to manufacture Auto Grade High Strength Steels (HSS) including higher strength levels. Therefore, HSS grade cannot be excluded from product scope. ix. Steel produced by Japanese Mills: M/s JFE Steel Corporation, M/s Nisshin Steel Co. Ltd., M/s Nippon Steel & Sumitomo Metal Corporation and M/s Kobe Steel Ltd. together argue that steel produced by Japanese mills should no .....

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have already substantiated that they produce automotive grades as well. i. Critical circumstances that justify levy of provisional safeguard duty: Several interested parties argue that there were no critical circumstances in the present case that warranted imposition of provisional safeguard measures. It is argued that the Authority also failed to demonstrate in their analysis that such critical circumstances existed. Petitioners strongly object to the above contentions and submit that the peti .....

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refore, it is argued that India should not have levied safeguard duty on imports of the subject goods from Korea RP and Japan as these imports have occurred due to low customs duty on imports from these countries. It is also argued that India could have explored bilateral mechanisms with these two countries under the respective FTAs rather than simply imposing general safeguard duty on Korea RP and Japan. Interested parties also argue that India- Korea CEPA provides that in the event imports fro .....

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hese imports are at unfairly low prices causing serious injury to the domestic industry. Further, it is the discretion of the Government of India to explore bilateral mechanisms under the respective FTAs or adopt a general safeguard measure in this case. Both the FTAs nowhere mention that India is obligated to explore bilateral mechanisms first and only after failure of such mechanisms can adopt a general safeguard measure. Further, these FTAs have specific provisions that allow India to impose .....

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nd coal have declined by 42% and 21% respectively in 2014-15 and consequently there is a fall in prices of the subject goods. Therefore, import prices cannot be considered as low and domestic industry should also translate the decrease in raw materials to their hot-rolled products. Interested parties further argue that the domestic prices of Petitioners are much higher than export prices. Petitioners strongly object to these contentions and submit that they have already decreased their prices in .....

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to note that during recent periods, landed value of imports of the subject goods have declined much more than the decline in raw material prices. Further, it should not be ignored that imports have come at grossly low prices and the domestic industry has been forced to match such low prices, to the extent that their prices have gone below the cost of production of the domestic industry. Petitioners would like to add that of late, exports are being made even below the marginal cost of production .....

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ic industry should also sell their products at suppressed prices in their domestic market as well. l. 2013-14 should not be considered as base year for injury examination: Interested parties argue that 2013-14 should not be considered as base year as it does not take into account the downward trend of imports between 2012-13 and 2013-14. Some interested parties argue that period of analysis should be 5 years and a shorter period is erroneous. Petitioners strongly object to these contentions. It .....

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ide information for the most recent period of three years (or longer) for which data is available. However, the Trade Notice also does not prescribe what should be the length of injury analysis period, which the Authority should examine. In light of the above, Petitioners submit that they have provided information from 2011-12 onwards to Q1 of 2015-16 in the petition, which is as close and recent to the initiation of the investigation. In Petitioners' written submission data has now been pro .....

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estic industry is suffering serious injury due to sudden, sharp, significant and recent increase in imports. m. Captive consumption of product under consideration: Several interested parties have argued that captive imports by downstream units should be exempt from safeguard duty. Mostly, these claims have been raised by companies like POSCO Korea and POSCO Maharashtra, and Hyundai Steel Korea and its Indian affiliates. Here the modus operandi is that the foreign steel producer is supplying the .....

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bmit that the subject goods manufactured by the domestic industry fully meets all the requirements that these companies are looking for. The only concern of these companies is that safeguard duty will prevent them from importing unfairly low priced subject goods from Korea RP. Petitioners submit that there is no provision under law that exempts goods imported for captive consumption from the purview of safeguard duty. Therefore, the above contentions by interested parties cannot be entertained. .....

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depreciation of Indian Rupee and local procurement by users offset unforeseen developments. Petitioners believe that none of the interested parties have actually perused the petition and preliminary findings in entirety. Such negligence on the part of interested parties is astonishing considering they seem to have made significant efforts to rebut Petitioners' claims. The petition documents in very precise terms the unforeseen developments that led to sudden, sharp, significant and recent in .....

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nts is concerned. o. Exclusion of imports made to related downstream industry: Some interested parties are of the view that imports made to related downstream industry in India should be excluded from the purview of safeguard duty by practice of market segmentation. Petitioners have heard of such practice for the first time in the context of safeguard investigations. It is irrelevant whether imports are to a related party or an unrelated party. The key here is that sudden, sharp, significant and .....

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downstream industry had not encouraged huge quantities of imports at unfairly low prices, this situation would have not arisen at all. It is because the domestic industry is now in such a precarious situation that even their survival is difficult, they have come before the Authority. Safeguard duty will only restore balance to market forces. Without safeguard duty, competition in the market will remain distorted and preferences of downstream industry would remain intact on unfairly low priced i .....

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l re-rollers, rather it is a measure to provide temporary protection to the domestic industry from low priced imports that are coming in increased quantities into India. q. Non-applicability of safeguard duty on those hot-rolled flat products in coil form for which contracts were entered into before levy of provisional safeguard duty: Some interested parties are of the view that for contracts for which LCs were recently opened before imposition of provisional safeguard duty or on the day such du .....

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sia cannot be compared: Interested parties argue that countries like Malaysia and Thailand have imposed anti-dumping duties and safeguard duties respectively, on the subject goods in a situation when there was a huge surge in imports to the extent of 1350%, which is not the case in the present investigation. Thus, interested parties argue that comparison with these countries is incorrect. Petitioners object to this contention and submit that if Indian domestic industry waits till imports rise to .....

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y the interested parties. Petitioners had argued in the petition that levy of anti-dumping duty and safeguard duty on the subject goods by Malaysia and Thailand respectively was an unforeseen event. Due to this unforeseen event, exporters could no longer export to these countries and started to export increased quantities to a country like India, which had and still has better demand. In light of the above, it is submitted that interested parties have simply failed to understand the context in w .....

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ce authorization/EPCG. Petitioners strongly object to such claims and submit that for the purposes of safeguard investigation, total imports are to be examined. Character of imports, whether for captive consumption, under advance authorization or EPCG is irrelevant. t. Cumbersome process of claiming duty drawback: M/s Hyundai Motor India Limited claims that the process for claiming duty drawback is very cumbersome in India and safeguard duty should not be imposed until this process is simplified .....

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ense, wherein subject goods are exempt from payment of safeguard duty. The above contention of interested parties is, thus, unacceptable and should be rejected. v. Safeguard duty would threaten employment and create monopoly: Many interested parties wrongly claim that imposition of safeguard duty would threaten employment in India. Petitioners humbly submit that if safeguard duty is not imposed, huge employment of domestic industry would be at stake. It is in public interest to impose safeguard .....

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dustry to correct the market distortion create by huge quantities of low priced imports of the subject goods into India. w. Other procedural issues in the investigation: Several interested parties are concerned that India failed to notify to the WTO about imposition of provisional safeguard duty before adopting such measure. Even exporters are concerned about India's non-compliance with such notification requirements. Further, a few interested parties are of the view that a list of developin .....

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of Article 12.4 of SA. Mere non-compliance with a procedural requirement such as late notification to the WTO does not compromise the substantive merits of the provisional safeguard duty. Further, exporters need not worry about such notification requirements by India. It is the prerogative of WTO member countries to bring such concerns to the Government of India and not foreign exporters. Petitioners further submit that the Authority already has data on record for volume of exports from each exp .....

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ys is a violation of natural justice. Petitioners, in their letter dated 27 July 2015 have provided instances where WTO member countries have imposed provisional safeguard duty on the same day on which the investigation was initiated. In this case, provisional safeguard duty was imposed after one full week of initiation of the investigation. This, in no event is a violation of any WTO provision. Further, Rule 9(1) of the Safeguard Duty Rules allows the Authority to proceed expeditiously with the .....

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parties on injury parameters Petitioners object to the submissions made by interested parties with respect to injury and causal link issues and would like to draw the attention of the Authority to the following key submissions in this respect: i) Injury indicators including sales, production, capacity, investment levels, inventories, employment have remained stable and some indicators show positive trend: Petitioners have provided updated information on all economic parameters with rejoinder. x .....

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ic industry has declined. Imports have taken away all the increase in demand of the subject goods. In 2014-15, while demand excluding captive increased by 1,158,614 MT and imports increased much more by 1,248,015 MT. This shows the aggressive manner in which imports of the subject goods are entering the Indian market. z. Further, POSCO Maharashtra has contended that the surge in imports in 2014-15 is mainly because of imports by them for setting up manufacturing facility and if the same is exclu .....

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due to imports of the subject goods, the capacity utilisation, production, employment and sales would have increased commensurate to the increase in demand in India. However, sales and employment of the domestic industry have remained stagnant over the period of investigation. bb. Capacity utilisation has come down from 77% in Q1 of 2014-15 to 67% in Q2 of 2015-16 as evident from the following table below: Particulars Unit 2014-15 Q1 2014-15 Q2 2014-15 Q3 2014-15 Q4 2015-16 Q1 2015-16 Q2 Capacit .....

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stic industry is unable to increase its production and sales which is leading to a situation of inventory accumulation over the injury period. Particulars 2011-12 2012-13 2013-14 2014-15 2015-16 Q1 2015-16 Q2 Inventory (MT) 331,101 583,311 636,879 648,290 657,099 871,440 Indexed 100 176 192 196 198 263 dd. It is, therefore, evident that the contentions of interested parties are wrong. Sales, production, capacity utilisation, investment levels, and employment are showing negative trend indicating .....

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Petitioners submit that the domestic industry has not only suffered losses in Q1 of 2015-16 but also in Q2 of 2015-16. It is to be noted that not only the profits of domestic industry have vanished rather substantial losses are being incurred thereby substantiating the claim of Petitioners to impose safeguard duty in such an extraordinary situation. Profit trends are shown in the following table: Particulars 2011-12 2012-13 2013-14 2014-15 2015-16 Q1 2015-16 Q2 Profits (INR crores) **** **** ** .....

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now facing losses of (90) indexed units during Q1 2015-16 and further losses of (227) indexed units during Q2 2015-16. gg. Quarter-wise analysis of 2014-15 and the first six months of 2015-16 shows a grim picture. Profits started declining in 2014-15 itself, and position of the domestic industry further worsened in Q1 and Q2 of 2015-16. In Q1 of 2014-15, profits were 100 indexed points, which sharply declined to 52 indexed points in Q4 of 2014-15. The domestic industry suffered severe losses in .....

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ed imports at reduced prices. If the same trend continues, the domestic industry fears that they would be forced to shut down their operations. If appropriate remedial measures are not put in place immediately, the domestic industry runs a risk of banks/financial institutions recalling their loans and thereby inflicting a sudden death to the domestic industry. iii) Market share of imports is not significant to cause injury ii. Many interested parties have argued that there is no sudden or sharp .....

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ea RP, Russia and Japan are insignificant to cause serious injury. jj. Petitioners wholly object to the above contentions of the interested parties that imports, being insignificant, are not causing injury to the domestic industry and that there is no sharp increase in imports of the subject goods. In fact, sudden increase in imports is the only reason of serious injury to the domestic industry. The quarterly trends for the recent period indicate that market share of imports in total demand incl .....

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quarter of 2014-15 and in Q1 and Q2 of 2015- 16. The share of imports in total demand (excluding captive) increased from 11% in Q1 of 2014-15 to 19% in the Q1 of 2015-16 and further to 24% in Q2 of 2015-16. If imports continue to increase at this pace, the domestic industry will be wiped out soon. kk. Further, regarding the submission that imports from Korea RP, Japan and Russia are insignificant, Petitioners strongly object the same and submit that the imports from the abovementioned countries .....

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61,511 6.11% Other 2,011,066 33.99% Grand Total 5,916,155 100.00% iv) Injury is caused due to internal problems and factors other than imports ll. Interested parties have submitted that injury being suffered by the domestic industry is due to their own internal factors including the following: - High interest cost, depreciation and fixed cost burden - High freight cost and poor infrastructure - Raw material crisis - Underutilised capacities - Inability to meet the quality requirements of specifi .....

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the subject goods. But now it is alleged that the domestic industry is facing losses due to abovementioned internal issues. If such internal issues actually existed, the domestic industry would not have done well in the past also. Therefore, the allegation that the domestic industry is facing losses due to the above internal problems is not correct. It is the sudden and significant surge in imports of the subject goods which have caused injury to the domestic industry. Moreover, interested parti .....

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cers have increased their open market sales by 42% (2,994,323 MT in 2013-14 to 4,263,888 MT in 2015-16(A)). Petitioners submit that share of other Indian producers is very small in absolute terms and therefore, rise in their open market sales is also limited in absolute terms. Financial Year Total Import (MT) Sales of DI (MT) Sales of other Indian Producers (MT) Captive sale of DI (MT) Captive sale of Others (MT) Total Demand (MT) Market Share (%) DI Import 2013-14 1292099 10342565 2994323 42740 .....

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. pp. Interested parties are trying to mislead the Authority by highlighting rise of 42% in sales of other Indian producers whereas a comprehensive study of the data shows that this rise in sales is trivial when compared with the demand in India. vi) Other Issues 1) Use of Q1 data for annualising 2015-16 figures qq. Interested parties have submitted that annualising the Q1 figures of 2015-16 in order to arrive at annualised figures of 2015-16 is not a correct method for injury analysis. They fur .....

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, SA, Section 8B of the Custom Tariff Act, 1975 and the Safeguard Duty Rules, the method of annualisation is given. The only legal requirement is to provide data for a period as recent as possible and the same has been complied with by the domestic industry. Further, in the written submissions post public hearing, Petitioners have provided data for both Q1 and Q2 of 2015-16. Now annualisation is done based on data of the first six months of 2015-16, which is sufficient enough for the purpose of .....

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serious injury or threat of serious injury to the domestic industry, then such imports need to be controlled by way of safeguard measures. Moreover, levy of safeguard duty would only provide a level playing field to domestic manufacturers. Imports can still happen subject to payment of appropriate duty. Also, it is not a permanent measure but a temporary protection for the domestic industry to ensure huge quantities of unfairly low priced imports of the subject goods do not distort competition i .....

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estic industry due to low priced imports. The Authority may invite views from the domestic industry if such a mechanism is required to be put in place. uu. In light of the above contentions, Petitioners submit that there is no merit in the contentions raised by interested parties. II. Rejoinder by Domestic Industry to the submissions of Federative Republic of Brazil post public hearing Petitioners provide rejoinder to the written submissions by the Federative Republic of Brazil ("Brazil&quo .....

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itioners agree with Brazil's general comments and submit that the Authority has complied with the requirements under Article XIX of GATT and the SA in the present case. The petition contains all the relevant information that merits imposition of safeguard duty. Such information has been duly examined by the Authority in line with the requirements under GATT, SA, Section 8B of the Customs Tariff Act, 1975 and Customs Tariff (Identification and Assessment of Safeguard Duty) Rules, 1997 (" .....

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by India to notify the measure to the WTO does not mean that imposition of provisional safeguard duty itself is per se inconsistent with provisions of SA. Mere non-compliance with a procedural requirement such as notification to the WTO does not compromise the substantive merits of the provisional safeguard duty. Brazil's contention cannot be accepted. b. Period of investigation of serious injury (and threat thereof) and increased imports: In paragraphs 9 to 16 of the written submissions, B .....

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d yet. Brazil further argues that the Indian Authority chose to ignore data for the period April 2011 to March 2012, despite the fact that such data was available with the Authority. This, according to Brazil is a violation of Article 4.2(a) of the SA. Brazil further argues that the period for examination of serious prejudice should be three years as per the recommendation of the WTO Anti-dumping Committee and the period of two years and one quarter in this case is not sufficient. Brazil argues .....

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investigation should be three years, however, the same requirement cannot be simply transposed in a safeguard investigation. Brazil is incorrect in arguing that in the present investigation, since the Authority has only considered data for a period of two years and one quarter, the Authority has failed to comply with the requirement of examining three years of data. There is no such requirement under GATT, the SA, the Act and the Safeguard Duty Rules that the Authority has to collect and examin .....

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y chose to extrapolate data of one quarter for the whole year does not mean that this itself violates any provision of GATT, the SA, the Act and the Safeguard Duty Rules. Petitioners have been regularly assisting the Authority during the course of this investigation and have been providing data on imports for recent quarters as well. Information on updated injury parameters up to the second quarter of 2015-16 has also been provided in Petitioners' written submissions. Interested parties have .....

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the preliminary findings but not in the petition. Petitioners reject Brazil's contention and submit that there is serious injury to the domestic industry and threat of serious injury thereof. This is evident from the data on record with the Authority, which has also been duly verified. Therefore, Brazil's contention should be rejected. d. Causal Link: In paragraphs 24 to 28 of the written submissions, Brazil argues that there is no causal link in this case, as an analysis of other factor .....

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nd Q1/Q2 2015-16 also shows that share of imports has been consistently on the rise in relation to production of the domestic industry. Market share of imports has also increased in total demand during 2015-16. The domestic industry is not able to increase its production and sales commensurate to increase in demand. Capacity utilisation, production, sales and profitability of the domestic industry has suffered. There is significant price depression, suppression, undercutting and underselling due .....

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to 31 of the written submissions, Brazil argues that share of each exporting country has not been informed by the Authority and a list of developing countries has also not been provided. Brazil also argues that the period taken into account for calculation of the volumes imported from each source has not been specified. Due to lack of such essential information, Brazil argues that it has not been able to exercise its right of defence under Article 3.1 of the SA. Petitioners object to these cont .....

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s of Article 3.1 of the SA. Further, since Brazil's share of imports is more than 3% in total imports as per the available data, it cannot be excluded from the purview of safeguard duty. f. Conclusion: In paragraphs 32 and 33 of the written submissions, Brazil argues that there is no serious injury or threat thereof to the domestic industry, and there is no causal link as well. Brazil further contends that formal requirements such as notification to the WTO and publication of essential infor .....

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sition of provisional safeguard duty itself is per se inconsistent with provisions of SA. Petitioners submit that all essential information has been published in this case which has enabled interested parties to exercise their right of defence. In light of the above contentions, Petitioners submit that there is no merit in Brazil's contentions. III. Rejoinder by Domestic Industry to the submissions of China PR post public hearing Petitioners object to all the contentions made by China PR. Ch .....

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findings comprehensively throw light on the critical circumstances that warranted imposition of safeguard duty in this case. China PR has failed to take notice of the same. The Authority has met the requirements of Article 6 of the SA in this case. c. The petition as well as the preliminary findings establish that there is a sudden, sharp, significant and recent increase in imports of the subject goods which has caused serious injury to the domestic industry and is also threatening to cause ser .....

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e wiped out. e. Provisional safeguard duty should not be revoked as there exist critical circumstances that warrant continued imposition of provisional safeguard duty for 200 days. In light of the above contentions, Petitioners submit that there is no merit in China PR's contentions. IV. Rejoinder by Domestic Industry to the submissions of Chinese Taipei post public hearing: Petitioners submit that the Authority may look into Taiwan's request for assistance to deem it as a developing cou .....

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ten submissions by the European Commission ("Commission") in subsequent paragraphs: a. The Commission has submitted in the introductory lines that safeguard instrument should be used in exceptional circumstances only and the present case is suitable for anti-dumping or anti-subsidy investigation. Petitioners object to this contention because at present the Indian steel industry is going through a very critical phase due to sudden, sharp, significant and recent increase in imports of th .....

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oduct scope as the domestic industry may not be manufacturing them, it is submitted that the Commission has failed to identify what all grades the domestic industry does not produce, for which exclusions are required. In the absence of information on specific grades, Petitioners cannot effectively rebut such vague contentions. The Commission should give clarifications on the grades of the subject goods that is concerned with, otherwise, the Authority should reject the Commission's above cont .....

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market share, production, capacity, utilisation rate, employment, profits, market share etc. are insufficient and these factors do not indicate injury and causality. Petitioners object to the arguments raised by the Commission. Serious injury and causality are clearly evident from the facts and figures given in the petition and written submission dated 16 November 2015. Petitioners have comprehensively established during the course of this investigation that imports of the subject goods had incr .....

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demand. Capacity utilisation, production, sales and profitability of the domestic industry has suffered. There is significant price depression, suppression, undercutting and underselling due to imports of the subject goods. Profitability and ROCE of the domestic industry have severely deteriorated during Q1 and Q2 of 2015-16. Inventories of the domestic industry have also increased. All of these factors clearly establish existence of serious injury and causal link in this case. There are no othe .....

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r Indian producers is very small in absolute terms and therefore, the rise in their open market sales is also limited in absolute terms. Moreover, imports have taken away all the increase in demand of the subject goods. In 2014-15, demand (excluding captive) increased by 1,158,614 MT and imports increased by 1,248,015 MT. When demand (including captive) increased to 25,423,206 MT and (excluding captive) increased to 15,787,601 MT in 2014-15, imports almost doubled to 2,540,114 MT. This shows the .....

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on's contentions. VI. Rejoinder by Domestic Industry to the submissions of Government of Indonesia post public hearing: Petitioners provide their rejoinder to Indonesia's contentions below: a. Imports were 7% in production of the domestic industry in 2013-14, which doubled to 14% in 2014-15. Quarter-wise analysis of 2014-15 and Q1/Q2 2015-16 also shows that share of imports has been consistently on the rise in relation to production of the domestic industry. Market share of imports has a .....

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onesia is incorrect as it does not represent data for the product under consideration. Any analysis based on such data would give an incorrect picture. d. The Indonesian company PT Krakatau Posco should provide complete data for its exports to India to substantiate that it did not export the subject goods to India. Further, Indonesia should also substantiate with the aid of concrete data its producers/exporters never exported the subject goods to India. Such data should also be provided to Petit .....

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duty. However, this is just factual information and Indonesia has not substantiated how this information is relevant in this case. VII. Rejoinder by Domestic Industry to the submissions of Russian Federation post public hearing: Petitioners provide their rejoinder to Russia's contentions below: a. Section 8B(1) of the Customs Tariff Act, 1975 clearly provides that no safeguard duty can be imposed on imports of an article from a developing country if the share of imports from that country doe .....

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ully submit that a WTO member country like Russia has no locus to tell domestic industry or the investigating authority of another country that anti-dumping or countervailing measures are more appropriate in a case than safeguard measures. Petitioners have suffered serious injury due to sudden, sharp, significant and recent increase in imports of the subject goods. The circumstances were critical and warranted immediate redressal of the situation by imposition of safeguard duty. Whether India sh .....

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in 2013-14, which doubled to 14% in 2014- 15. Quarter-wise analysis of 2014-15 and Q1/Q2 2015-16 also shows that share of imports has been consistently on the rise in relation to production of the domestic industry. Market share of imports has also increased in total demand during 2015-16. The domestic industry is not able to sell its production and sales commensurate to increase in demand. Capacity utilisation, production, sales and profitability of the domestic industry has suffered. There is .....

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goods. e. Provisional safeguard duty has been imposed only after thorough examination of the critical circumstances in this case. The Authority has taken a balanced view by initiating this investigation to safeguard the interests of the domestic industry. It is the practice of the Authority to examine public interest as well while examining the need of safeguard duty. Whether safeguard duty should be recommended or not will be decided only after taking into account views of all stakeholders. Th .....

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otified unforeseen developments that led to sudden, sharp, significant and recent increase in imports of the subject goods. The Authority has, thus, satisfied the requirements under Article XIX and the SA. b. India has notified to the WTO about the initiation and levy of provisional safeguard duty based on the notification requirements under the SA. It cannot be said that the notification did not contain a detailed examination of unforeseen developments. The notification expressly refers to the .....

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rter of 2015- 16. Petitioners have annualised data for the year 2015 on basis of six months' data for January - June 2015, which is on the record of this investigation. The Authority has also duly examined the same data during the course of this investigation. Petitioners have now provided data for the second quarter of 2015-16 as well in their written submissions dated 16 November 2015. Data has now been annualised based on the first six months data for 2015-16, which also shows existence o .....

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e; rather the increase is significant. Imports in 2014-15 almost doubled in comparison to 2013-14. Imports in 2015-16 are expected to almost double than 2014-15 levels based on the available data for the first six months of 2015-16. e. Profitability for 2013-14 and 2014-15 cannot be examined in isolation. Profitability figures have to be examined for recent periods as well. The domestic industry's profitability has sharply declined to (613) and (1,547) during the first two quarters of 2015-1 .....

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ioners without appreciating the surrounding circumstances would not give the correct picture. g. Petitioners have already put on record the detailed break-up of imports of the subject goods from all sources. The Authority can examine the same and take an appropriate view on whether Turkey should be excluded from application of safeguard duty or not. h. Turkey's contention that it should be excluded from the purview of safeguard duty as it is a developing country is incorrect. India does not .....

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d 2011- 12 vis-à-vis 2014-15. This kind of selective analysis leads to skewed observations. The WTO Panel in Dominican Republic - Safeguard Measures on Polypropylene Bags and Tubular Fabric has clearly noted that mere end-to-end analysis is not enough. As per the Panel report, an investigating authority should also consider year-on-year analysis to holistically examine variations in domestic industry's parameters. As all of Ukraine's submissions are based only on end-to-end analys .....

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on of the domestic industry in 2013-14, which doubled to 14% in 2014-15. Quarter-wise analysis of 2014-15 and Q1/Q2 2015-16 also shows that share of imports have been consistently on the rise in relation to production of the domestic industry. Market share of imports has also increased in total demand during 2015-16. b. The domestic industry is not able to sell its production and sales commensurate to increase in demand. c. Capacity utilisation, production, sales and profitability of the domesti .....

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d recent increase of imports of the subject goods. g. The petition as well as the preliminary findings comprehensively throw light on the critical circumstances that warranted imposition of safeguard duty in this case. Ukraine has failed to take notice of the same. The Authority has met the requirements of Article 6 of the SA in this case. h. The data from International Trade Centre relied upon by Ukraine is incorrect as it does not represent data for the product under consideration. Any analysi .....

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as submitted that the name of the company mentioned in the notice sent to them by the Authority is 'Dillinger and Salzitter' whereas the correct name is 'Dillinger Huttenwerke'. Further it is submitted that Dillinger is not engaged in production or exports to India of the subject goods. Dillinger has admitted on record that it is a producer of heavy steel plates. b. Petitioners request the Authority to examine the veracity of the above claims by Dillinger and also examine whether .....

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a. The Japanese Mills deny all the contentions averred in the DI's submissions and submit that no part of the rejoinder may be read to be or deemed to be an admission of the facts and contentions pleaded in the DI submissions, unless and insofar as specifically admitted in this rejoinder. b. The DI's post hearing submissions do not provide adequate evidence that is necessary for the initiation of a safeguard duty investigation on imports of the subject goods. c. The DI does not manufact .....

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ls are not like or directly competitive with the HRCs produced by the DI. The Authority should examine if the DI is manufacturing the specific grades of HRC exported by the Japanese Mills and accordingly, exclude the same from the scope of the product under consideration. e. There is no consistent trend of increase in imports. This is notwithstanding the fact that JSW Steel is importing about 150,000 MT of HRC into India from China to artificially inflate import figures. If there is any increase .....

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Market share of the DI has consistently increased in the years 2011-12, 2012-13 and 2013-14. The DI's market share has only decreased in the year 2014-15. The market share of the DI, excluding captive consumption, has only fallen from 66% in 2011-12 to 63% in 2014-15. Whereas there has been a significant increase in the market share of other producers from 15% in 2011-12 to 21% in 2014-15. g. Domestic sales of other domestic producers have also increased from 1,880,877 MT in 2011-12 to 2,994 .....

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orts, for instance imports fell from 153,500 MT in April 2014, to 98,192 MT in May 2014, and then rose to 277,891 MT in October 2014 only to fall again to 171,927 MT in November 2014. i. On an analysis of the data in the DI Written Submissions for 2011-12 to 2014-15, it is evident that there has been an increase in the sales of the DI in absolute terms. Moreover, any decrease in sales between 2013-14 and 2014 -15 can be attributed to the DI willfully diverting HRCs to be sold in the domestic mar .....

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lack of correlation between increased imports and domestic sales. k. The capacity utilization of the DI increased from 4,429,604 MT in Q4 2014-15 to 4,456,795 in Q1 2015-16. It is pertinent to note that JSW, which is one of the Petitioners in the present Petition/Applicants, topped the industry in capacity utilization. In the fourth quarter of 2014, it operated its plants at 90 per cent rated capacity. JSW's revenue run-rate clearly indicates that it had higher utilization levels compared t .....

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no corresponding increase in demand.The recent report of India Ratings and Research (Ind-Ra) which expects the capacity utilization of Indian steel manufacturers to decline, as close to 12-14 million tonnes of crude steel capacity will come on board by FY16 with no significant hike in consumption demand. The report found that the total Indian capacity for FY15, was 46 per cent higher than at FY10 ,whereas, the domestic steel consumption growth, which was a robust 11.9 per cent during FY11, had .....

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of raw material. o. The reasons for high operating expenditure can be attributed to reasons like handicaps in capacity building and generation, delayed implementation of their projects due to land acquisition and environmental clearances, less or no lending support by the Government, exposure to global price shocks, competitive products both in terms of price and quality from other countries, lower-quality iron ores which require more coal, and lower quality of coal. p. These are challenges tha .....

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y with respect to the inventories lying unsold with them. The DI has also not provided data on how long does the DI take to turn its inventory into sales, so as to ascertain the "Days Sales on Inventory" value. In light of the lack of data, the Authority is requested to put the DI to the strict proof of the same. r. The DI has provided indexed figures for profits, instead of actual figures despite the fact that all the companies are listed companies. s. ROCE of the DI has not only been .....

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"steel", as a whole, which is clearly not the PUC and not been able to address each specific product under the PUC. The alleged developments mentioned by the DI have a global scenario and as such their impact is not just "India specific". v. Imposition of safeguard duty is inconsistent with India's obligations under the India-Korea CEPA. It could severely strain the relations between the two countries and risk jeopardising any future investment from Japan into India. w. .....

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and specifications. XII. Rejoinder by Nippon Steel & Sumikin Pipe India Co., Ltd. (NPI) represented by M/s. AZB & Partners x. NPI reiterates its arguments contained in its submissions dated 9 November 2015 and 23 November 2015 and requests the Authority to read NPI's rejoinder in conjunction with these submissions y. The DI's post hearing submissions do not provide adequate evidence that is necessary for the initiation of a safeguard duty investigation on imports of the subject g .....

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competitive with the HRCs produced by the DI. The Authority should examine if DI is manufacturing the specific grades of HRC imported by NPI and accordingly, exclude the same from the scope of the product under consideration. bb. NPI's customers are original equipment manufacturers and Tier 1 parts makers' who supply parts to automobile manufacturers including ****. NPI's customers require highly customized products, which undergo different levels of testing mainly in Japan before b .....

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(especially for the nitrogen, controlled range is much narrower than domestic one), all of which are tailored to meet the specifications prescribed by the end user. Due to the highly specific and specialized nature of each product type imported into India, even minor differences can lead to substantial differences in quality. ee. The DI does not manufacture all types of automotive-grade steel and that industrial users must import this steel in order to meet their requirements. Importation of th .....

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ecessary to ensure automobile safety and fuel efficiency through reduced weight of vehicles. The specifications in relation to the quality of these products are particularly strict. gg. These strict specifications pertain to formability, appearance and size of the relevant automotive parts. Nippon Steel & Sumitomo Metal Corporation ("NSSMC"), which is NPI's parent company and a producer and exporter of Hot-rolled Coils, is able to satisfy these specifications by precisely contr .....

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ard, it is submitted that once a supplier is selected by the end-customer, the supplier cannot be changed during the lifetime of the model to maintain consistency in product quality and the long term nature of supply contracts. If safeguard measures are imposed, the automotive user will continue to import the PUC at higher prices and be forced to pay higher prices which will be passed on to the customers. ii. The DI have not furnished any evidence of the actual manufacture of the specific type o .....

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imported by it are distinct from the products manufactured by the Domestic Industry. The products being imported by NPI differ from the products manufactured by the Domestic Industry in terms of their physical characteristics, chemical composition and end usage. Specifically, the HRCs imported by NPI differ in "Tensile strength", "Steel cleanness", "Grain size" and "Chemical composition" (especially for the nitrogen, the controlled range is much narrower .....

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ndustrial users of the PUC or have not yet been granted approval from OEMs. XIII. Rejoinder by China Iron and Steel Association; Angang Group Hong Kong Co. Limited; Angang Steel Company Limited; Shanghai Meishan Iron & Steel Co., Limited; Angang Group International Trade Corporation; Baosteel Singapore Pte Ltd; Maanshan Iron & Steel Co., Ltd.; Benxi Iron & Steel (Group) International Economic & Trading Co., Ltd.; Jiangsu Shagang Group; Handan Iron & Steel Group Co., Ltd. and .....

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g interested parties. c. Applicant is silent on a viable and creditable adjustment plan. Applicant has stated on page 39 of petition that an adjustment plan has been provided separately along with the producer questionnaire response but the producer specific questionnaire is not part of the petition but rather is a separate document. In addition, the producer specific questionnaires also do not have a creditable adjustment plan. In an application filed by United Phosphorus in 1999 for safeguards .....

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producers should also be required to provide injury information considering the disputable position of alleged injury to the Applicant. g. Alleged injury is self-inflicted on account of high interest burden, capacity pressures, dumping, FTA, raw material crisis, etc that have caused pressure on the performance of the Applicants as evident in their annual reports. h. The points below establish that the Applicant are not suffering serious injury or threat of serious injury: i. Major parameters su .....

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Selling price of domestic industry being lower than landed price is a prima facie indication of inter se competition between the Indian producers. i. Applicant has made certain claims on the methodology of calculation of landed price for computation of price undercutting/underselling which has no legal or factual basis. Landed value should be computed as per its consistent practice. j. Applicant has cited towards 4 instances for unforeseen developments and 3 of the instances are antidumping duti .....

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4.06% 28.65% 14.72% EU-27 15.82 10.38% 1.20% 0.67% 0.74% Japan 18.34% 29.25% 36.50% 30.79% 35.15% Korea 14.94% 18.53% 12.97% 25.70% 41.11% Russia 12.88% 10.56% 3.62% 5.55% 4.56% Ukraine 7.92% 0.67% 6.34% 3.08% 3.63% l. The above data shows that imports from China diminished by almost 50% between FY2014-15 and FY2015-16(Q1). Therefore, there is no sudden and sharp increase in imports from China due to unforeseen developments. m. Applicant has not established the reasons for which it was forced to .....

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egative, injury claimed in 2015-16 when imports were declining, imports increased in 2014-15 when domestic industry earned profits. Reasons for any alleged injury is solely other reasons and any such alleged injuries are not driven by any sudden and sharp surge in imports. XIV. Rejoinder by POSCO, Korea and POSCO Maharashtra Steel Private Limited represented by M/s. Shardul Amarchand Mangaldas& Co. d. The parties relied on all their earlier submissions. e. The data provided in the petition i .....

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the market share of imports. h. The Applicants consume almost 34% of the PUC captively for production of downstream goods and therefore the aforesaid quantity of the PUC does not compete in the domestic market and must be excluded from the total demand of PUC in the market. The Authority in the safeguards investigation concerning imports of Sodium di-Chromate terminated the investigation in similar circumstances. Domestic Sales Captive consumption % of PUC captively consumed 2013-14 10,342,565 M .....

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The findings in US-Certain Steel Products makes it clear that examination of increase in imports must not be restricted to mere end points but rather a wider examination of the facts must be done. l. The volume of PUC imported by POSCO should be excluded while evaluating a sudden surge in imports of PUC during the POI. POSCO Maharashtra captively consumes 90% of the PUC imported by it and are not competing in the domestic market. The import data must distinguish between imports offered for sale .....

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t share of imports and percentage market share of domestic industry in the preliminary findings. Captive consumption of domestic industry and domestic producers has been included while calculating total demand of the PUC in the market but captive consumption of domestic industry has been excluded while calculating its market share. Therefore, total demand is inflated by inclusion of captive consumption and market share has been deflated and distorted by exclusion of captive consumption. n. The m .....

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issues faced and the grades which do not meet quality requirements. p. Reasons for the alleged decrease in sales of domestic industry are due to: (a) underutilization; (b) high debt/finance cost (being a capital intensive industry); (c) PIC when exported by domestic industry are those prevalent in the global market; (d) PUC when sold by domestic industry is much higher than the global/international prices. q. The landed price of imports are higher than the prices of the domestic industry as evid .....

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n China, huge surplus capacities in China and Japan, trade measures by other countries, etc do not establish existence of unforeseen developments. There is no logical connection between the aforesaid circumstances and unforeseen developments. t. Imposition of the duty would be in direct contravention of the India-Korea CEPA. Article 22.7 in the CEPA mandates that a party taking a safeguard measure under Article XIX of GATT 1994 and the Safeguards Agreement may, to the extent consistent with the .....

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tries of India (FII) to the submissions of Domestic Industry post public hearing a. Import of HR Coil in thickness of 1.2mm, 1.4mm & 1.6mm as these thicknesses are either not produced by the domestic steel producers or are scarcely available, be place under exemption category in the Safeguard Duty Notification. b. HR Coils in grades such as SAE 1541, SAE 1020/1040/1045/1050/1055, SCM 435, Boron Steel, 16 MnCr5,SAE 1006/1010 & ST 52.3 imported for automobiles applications, the domestic av .....

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petition to prove injury. XVI. Rejoinder by Cold Rolled Steel Manufacturers Association of India (CORSMA) a. Prescribed procedure for preliminary investigation and soliciting views of all stakeholders for a rational decision in the matter was not adhered to by D.G. Safeguards and decision to impose the 20% duty taken within 3 days, ignoring even the information available with D.G. Safeguards that in the past 2 Petitions for the imposition of Anti-Dumping duty on imports of HR Coils were rejected .....

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the period of investigation to 2.5 year against the norm of 5 years, which is essential to establish the casual relationship between domestic production and imports, surge in imports and reasons thereof. c. The Petition is not based on data published by official data bank i.e. Joint Plant Committee/Ministry of Steel, which is utilized for policy decisions by the Ministries of Steel, Commerce and Industry and Finance but data from a private Agency. Besides, the data has been twisted and manipulat .....

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was 1.757 million tonnes as per JPC Report, necessitating imports of 1.852 million tonnes, including qualities, sizes not available from domestic sources and imports for export production. f. Allegation of cheap imports of Steel from China flooding the Indian market is also baseless as imports from China constituted only 28% of total imports in April-June 2015 while for HR Coils it was around 30% g. The allegation of surge in imports in April-July 2015 is entirely misleading and as it does not .....

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industrial development have not caused any injury to domestic industry. j. The Petitioners have alleged that the domestic producers have suffered an injury due to rise in inventories due the high imports but as per data published by JPC there has been no rise in inventories. k. It may be clarified that there have been no sudden and unforeseen developments in the global Steel industry in the year 2014-16. l. The imports essential for industrial and economic development of the country have not ca .....

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o offer higher incentives on the exports of Cold Rolled products. The Petitioners are also major producers of Cold Rolled products but always petition for hike in duties on HR Coils apparently to exploit monopolistic potential. n. Indian HR Coil producers are already over protected by customs duty of 12.5% or USD 40 per MT at the current global price of USD 300 PMT, overage ocean freight of USD 30 PMT, Port, Financial and incidental charges of USD 15 per MT adding up to USD 85 (Rs 5500) PMT. o. .....

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. p. The high prices of HR Coils have eroded the global competitiveness of downstream Cold Rolling and the manufacturing sector has led to imports of value added Steel and manufactured products including Engineering goods, Components and Spares, Plant and Equipment, hitting the Indian industry, particularly the SMEs, resulting in retrenchment of workers. q. The arbitrary hikes in customs duties after the Union Budget of 2015 and imposition of Provisional Safeguard duty in undue haste have destab .....

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40/1050/1055 and Steels for the production of Auto Beams etc. which are not available from domestic sources. t. Steel is a basic input and raw material for industrial and infrastructure development but it is presently subject to heavy Tax burden starting from levy of Royalty on Iron ore, levy of 12% Excise duty and Taxes by State Govts. and local bodies. It is necessary to reduce the Tax burden to stimulate industrial production and infrastructure development as well as higher consumption Steel .....

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d by their project authority and importer cannot assert any control over where the material is eventually utilised. c. DG Safeguards should not be interfering in customs issue as customs is well equipped to do so. d. Petitioner cannot decide the end use of a particular grade. The ultimate decision is of the user. The end use is always indicative in nature and not binding. It is preposterous to suggest that some of India's importers are importing PUC in guise of API. e. For the recent surge i .....

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el etc. g. Evaluation period of 2 to 3 years seems short. "Sudden and sharp" surge needs to be evaluated over such periods and not 1 or 2 quarters. h. Measures in US and Turkey have been of anti-dumping duty which is completely different from the situations required for safeguard duty. i. The Applicants have considered a cluster of products. To ascertain the necessity of the imposition of the safeguard duty, imports undertaken with respect to each of these products have to be confirmed .....

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ion of imposition of safeguard duty does not arise. In respect of non-alloy steel, Applicants cater to about 92-93% of the total market share of domestic demand. Thus, even this category of PUC does not require imposition of safeguard duty. l. If imports in 2014-15 are compared with 2011-12, the increase is only about 9% and cannot be regarded as surge. While alleging surge in imports in 2014-15 over 2013-14, a due thought has not been given to abnormal drop of roughly 40% during the period. m. .....

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rovided by IBIS, an unrecognized private agency ignoring the official JPC data available. q. Despite a drop in international raw materials, the prices in the domestic market have not reduced and are much higher than the export prices. r. The Applicants themselves are importing cheaper raw materials. s. The alleged surge in imports during July-Sept 2015 is on account of huge imports of the subject PUC by the applicants themselves, specifically, JSW Steel Ltd. t. In view of the timelines of events .....

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annot assert any control over where the material is eventually utilized. c. Petitioner cannot decide the end use of a particular grade. The ultimate decision is of the user. The end use is always indicative in nature and not binding. It is preposterous to suggest that some of India's importers are importing PUC in guise of API. d. For the recent surge in imports in Q2 of 2015-16, DG must obtain factual data for the period for which plants of the domestic industry were under maintenance or un .....

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one or two quarters g. Measures in US and Turkey have been of anti-dumping duty which is completely different from the situations required for safeguard duty. h. The problems faced by the Applicants are not related to increased imports but due to the factors such as high debts, oppression and mismanagement issues in case of Bhushan Steel, problems in procurement of raw materials in case of Essar Steel. i. Alloy steel is produced in negligible quantities in India, thus question of imposition of s .....

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ashtra are excluded, then it would rather show a slump in imports. l. The major applicants have shown a rise in turnover, thus the question of any alleged injury does not arise at all. There has been a consistent increase in the employment costs of the applicants. m. Raw material imported under advance license is used in manufacturing of the finished goods which are exported. Such imports could not impact the Indian domestic market. n. The applicants have relied on data provided by IBIS, an unre .....

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ase, it clearly shows an undue haste in the imposition of safeguard duty. XIX. Additional submissions by the Domestic Industry after Introduction of Minimum Import Price (MIP) by Ministry of Commerce After the introduction of MIP on Steel products by the Ministry of Commerce vide Notification No. 38/2015-2020 dated 5th February 2016, Domestic Industry, in response, have made the following additional submissions: - a. The domestic industry vide their letter dated 17/02/2016 stated as follows: - & .....

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. Though MIP addresses most of the concerns of the domestic industry, but it is in place only for six months or a lesser period. Once MIP expires, the domestic industry would be left without any protection from the surging imports at predatory prices. It is submitted that only safeguard duty is a more efficacious and long term remedy for protection of the domestic industry. In light of this, it is most respectfully requested that the DG Safeguards may be pleased to conclude the captioned investi .....

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users in India have also raised concerns that even if they import the subject goods at more than the fair prices (including special grade steels), they are still subject to 20% ad valorem duty. To address the concerns of both the domestic industry and users in India, it is requested that the DG Safeguards may be pleased to levy safeguard duty on reference price basis." E. EXAMINATION & FINDINGS OF DIRECTOR GENERAL (SAFEGUARDS) 14. I have carefully gone through the case records, the rep .....

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ntral Government on an article if the article is being imported into India in such increased quantities and under such conditions so as to cause or threaten to cause serious injury to the Domestic Industry. 16. The Customs Tariff (Identification and Assessment of Safeguard Duty) Rules, 1997 provides the manner and principles governing investigation. 17. The investigation has been conducted in accordance with the said rules and the Final Findings are recorded through this notification. A. The Pro .....

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non-prime condition having 'as-rolled' edge or 'trimmed' edge or 'slit' edge. These products may be pickled or non-pickled (with or without skin-pass or tempering), slit or non-slit and having nominal width of greater than or equal to 600mm. These products may be as-rolled or thermo-mechanically rolled or thermo-mechanically controlled rolled or controlled rolled. These products may have patterns in relief derived directly from rolling. These products may have been subje .....

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erwise plated or coated with zinc; and g) Hot-rolled flat products of stainless steel. 19. Domestic Industry has submitted that they have observed from various reports in media that some of the Indian importers / foreign exporters are trying to evade the provisional safeguard duty applicable on commercial / base grade structural steels (meant for conventional structural applications) in the guise of 'API 5L' grade. Therefore, Domestic Industry requested that inclusion of the following ex .....

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use material as permitted by their project authority and importer cannot assert any control over where the material is eventually utilized and also petitioner cannot decide the end use of a particular grade. The ultimate decision is of the user. The end use is always indicative in nature and not binding. It is preposterous to suggest that some of India's importers are importing PUC in guise of API. I observe that the scope of the PUC can not be enhanced at a later date after the issue of not .....

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ause their regular supplier M/s Tata Steel Ltd. had stopped supplying due to availability constraints. Therefore, they are forced to import this specific product and such products should be excluded from the product scope. I observe that the interested parties have not stated to have made any efforts to procure the same from the domestic market nor have they stated anywhere that other Domestic Producers can not supply them the goods. Therefore, their contention is not accepted. ii. Automotive Gr .....

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hat Indian steel producers cannot supply this grade. Just because their R&D centre will not allow them to procure from elsewhere does not mean that the domestic industry should be allowed to suffer serious injury by exempting imports of this grade from safeguard duty. I find no reason to disagree with the contention of the Domestic Industry. iii. Claims by Tube Investments of India Ltd. (TII): a) TII argues that the following grades should be excluded from the product scope due to limited av .....

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uct scope. I observe that merely because the interested party has an approved source of supply, it can not be a reason to exclude them from the Safeguard action. They can also start the process of approving the domestic sources of supply, as well. iv. Hot-rolled coil with pickling and oiling ("PO"): M/s Hyundai Steel Korea argues that PO products manufactured by them are sold to M/s Hyundai Steel India Limited, which, in turn sells it to M/s Hyundai Motor India Limited. They argue that .....

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s Hyundai Steel Korea is not accepted. v. Hot-rolled coils based on narrowly defined customer specifications: M/s Nippon Steel & Sumikin Pipe India Co. Ltd. argues that hot-rolled coils based on narrowly defined customer specifications should be excluded from the product scope as these imports differ in tensile strength, steel cleanness, grain size and chemical composition. M/s Nippon Steel & Sumikin Pipe India Co. Ltd. has, however, claimed confidentiality on the description and types o .....

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rgues that these two grades should be excluded from product scope as these are special grades of steel which are imported to meet requirements of customer safety and meeting emission norms. They argue that domestic manufacturers cannot meet the required quality standards and are inconsistent suppliers of raw material. Petitioners strongly object to the above contentions. I find that the Indian steel industry is sufficiently advanced and capable of supplying different grades of materials. vii. Al .....

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. I find that the main determining factor for a decision on imposition of safeguard duty is not the imports as a percentage of domestic production but whether the domestic industry is suffering serious injury because of the increased imports. So far as alloy steel is concerned, the product scope covers only one tariff item 7225.30.90 and not the entire alloy steel heading. It is further noted that domestic industry have already provided detailed reasons in their letter dated 8 August 2015 as to .....

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to this reason, domestic industry has included imports under the tariff item 7225.30.90 under the product scope. I accept the contention of the DI on this point. China Iron & Steel Association have also questioned why alloy steel falling under customs tariff heading 7225 has been included in product scope. The above analysis also addresses the contentions made by China Iron & Steel Association. viii. High Strength Steel ("HSS"): China Steel Corporation, Taiwan argues that HSS g .....

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ould not be subject to safeguard duty and should be excluded from product scope. However, they have not come out with any evidence to suggest that the same can not be supplied by the Indian industry. Hence the argument advanced by them is not accepted. 22. In view of above, it is confirmed that the product under investigation is "Hot-rolled flat products of non-alloy and other alloy Steel in coils of a width of 600 mm or more" classified under Customs Tariff sub-heading nos. 7208 and 7 .....

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lled or thermo-mechanically controlled rolled or controlled rolled. These products may have patterns in relief derived directly from rolling. These products may have been subjected to various processing steps like pickling, oiling, rewinding, temper rolling, heat treatment, etc. The following are not included in the scope of the product under consideration: a) Hot-rolled flat products of steel with nominal width less than 600mm; b) API grade steel; c) Silicon electrical steel; d) Hot-rolled flat .....

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to the imported product under investigation and that the domestically produced "Hot-rolled flat products of non-alloy Steel in coils of a width of 600 mm or more" is a like article to the imported "Hot-rolled flat products of non-alloy and other alloy Steel in coils of a width of 600 mm or more" (fully defined as PUC), within the meaning of Rule 2(e) of Customs Tariff (Identification and Assessment of Safeguard Duty) Rules, 1997. B. Domestic Industry (DI): 24. Section 8B(6)( .....

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arties rely on the table given under paragraph 25(b) of the preliminary findings and argue that market share of the domestic industry was 45% in 2013-14 and for Indian other producers, it was 51%. Similarly, it is argued that in 2014-15 as well as 2015-16 (Annualised), market share of other producers was 51%. In this regard, I find no merit in this objection as in the table under paragraph 25(b), market share given is a ratio of sales of domestic industry vis-à-vis domestic demand. Howeve .....

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ings. Accordingly, it is held that the applicant domestic producer constitutes and represents the Domestic Industry (DI) within the definition of DI under Sec 8B(6)(b) of the Customs Tariff Act,1975. C. Source of information: 27. The product under investigation is imported into India under Custom Tariff Heading 7208 and 72253090 of Chapter 72 of First Schedule to the Customs Tariff Act, 1975. The Safeguard investigation was initiated on the basis of import data of IBIS (International Business In .....

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oinder. Many interested parties have argued that import data from a private agency like IBIS is not authentic and tenable and the Authority should consider only JPC data and that a detailed methodology for determining product under consideration is not provided in the petition. Interested parties also argue that DGCI&S data should be used to verify the authenticity of IBIS data used in the petition. 28. It may be pointed out that IBIS data has earlier also been used in a number of investigat .....

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29. A few interested parties argue that no additional questionnaire was filed by the constituents of the domestic industry. Therefore, the Authority did not have complete information when preliminary findings were issued. They further argued that no creditable adjustment plan has been provided by the domestic industry and there is no mention of the same in the preliminary findings. In this regard it is observed that the domestic industry had filed their respective questionnaire responses in bot .....

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s not take into account the downward trend of imports between 2012-13 and 2013-14. Some interested parties argue that period of analysis should be 5 years and a shorter period is erroneous. In this regard it has been observed that neither the Customs Tariff Act, 1975, nor the Customs Tariff (Identification and Assessment of Safeguard Duty) Rules, 1997, specifically define 'period of investigation' or the minimum period to be considered for a Safeguard investigation. The WTO Agreement on .....

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he Agreement contains no requirements as to how long the period of investigation in a safeguards investigation should be, nor how the period should be broken down for purposes of analysis. Thus, the period of investigation and its breakdown is left to the discretion of the investigating authorities. In the case before us the period selected by the ITC was five years and six months, which is a period similar in length to the one used by the Argentine investigating authority in Argentina - Footwea .....

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t issue in Argentina - Footwear Safeguard). It analyzed the data regarding imports on a year-to-year basis for the 5 complete years, and also considered whether there was an increase in interim 1999 as compared with interim 1998. We are of the view that by choosing a period of investigation that extends over 5 years and six months, the ITC did not act inconsistently with Article 2.1 and Article XIX. This conclusion is based on the following considerations: first, the Agreement contains no specif .....

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basis of Q1) for the purpose of the present investigations. E. Confidentiality of information submitted: 32. Rule 7 of the Customs Tariff (Identification and Assessment of Safeguards Duty), Rules, 1997 and Article. 3.2 of WTO Agreement on Safeguards provides for confidentiality treatment to certain information. The rules provide that an Interested Party is not required to disclose such information on actual basis which is confidential information of the company and disclosure of which can cause .....

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lity in the preliminary findings. I find that the Domestic Industry provided confidential and non-confidential versions of the application for safeguard measure as per the provisions of Safeguard Rules 1997 and Trade Notice No. SG/TN/1/97 dated 06.09.1997. Further, the Domestic Industry claimed confidentiality of financial and costing data by way of hiding them in their non-confidential version, which I find appropriate. F. Increased Imports: 34. Section 8B of Customs Tariff Act, 1975 deals with .....

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as a basic prerequisite for the application of a safeguard measure. Thus, to determine whether imports of the product under consideration have "increased in such quantities" for purposes of applying a safeguard measure, the rules require an analysis of the increase in imports, in absolute terms or in relation to domestic production. 36. Rule 2 of the Customs Tariff (Identification and Assessment of Safeguard Duty) Rules, 1997 defines 'increased quantity' as follows: "(c) & .....

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#39;in such increased quantities' is met is not a merely mathematical or technical determination. In other words, it is not enough for an investigation to show simply that imports of the product this year were more than last year - or five years ago. Again, and it bears repeating, not just any increased quantities of imports will suffice. There must be 'such increased quantities' as to cause or threaten to cause serious injury to the Domestic Industry in order to fulfill this require .....

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.31 [Article XIX:1(a) of the GATT 1994 and Article 2.1[of the Agreement on Safeguards ("SA")] do not speak only of an 'increase' in imports. Rather, they contain specific requirements with respect to the quantitative and qualitative nature of the 'increase' in imports of the product concerned. Both Article XIX:1(a) of the GATT 1994 and Article 2.1 SA require that a product is being imported into the territory of the Member concerned in such increased quantities (absolut .....

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the above mentioned law and WTO jurisprudence. Increased Import in absolute terms: 40. The analysis of the trend in imports of PUC in the light of the above mentioned provisions has been done. PUC is imported into India from a number of countries including China PR, Russia, Ukraine, Japan and Korea. Interested parties raised objections that imports of the subject goods are not sudden enough, sharp enough, significant enough and recent enough within the meaning of Article XIX of GATT and SA and .....

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t increased from 1252441 MT during the period 2013-14 to 3524932 MT during 2015-16 (Annualised). Import in relation to Production: 43. The imports of product under consideration in India during the period of investigation have increased in relation to all Indian production. The import with respect to total production increased from 5% in 2013-14 to 13% in 2015- 16(A). Financial Year Total Imports (MT) All India Production (MT) % of import with respect to production 2013-14 1252441 25510777 5 201 .....

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irment in the position of a Domestic Industry; 46. Section 8B sub section 6(d) of Customs Tariff Act, 1975 provides as follows: "threat of serious injury" means a clear and imminent danger of serious injury. 47. The Paragraph 1 of Annex to Rule 8 of the Customs Tariff(Identification and Assessment of Safeguard Duty) Rules' 1997 provides as follows: "In the investigation to determine whether increased imports have caused or are threatening to cause serious injury to a domestic .....

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t in the position of the industry, the Appellate Body in Argentina-Footwear (EC),in contrast to the Panel, held that an evaluation of each listed factor will not necessarily have to show that each such factor is "declining" to justify a finding of serious injury. Relevant extract is as follows: "139. In our view, it 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 .....

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industry concerned. An evaluation of each listed factor will not necessarily have to show that each such factor is "declining". In one case, for example, there may be significant declines in sales, employment and productivity that will show "significant overall impairment" in the position of the industry, and therefore will justify a finding of serious injury. In another case, a certain factor may not be declining, but the overall picture may nevertheless demonstrate "s .....

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hreat of serious injury all factors, which are mentioned in the Rules as well as other factors which are relevant for determination of serious injury or threat of serious injury, have been considered. The determination of serious injury or threat of serious injury is based on evaluation of the overall position of the Domestic Industry, in the light of all the relevant factors having a bearing on the situation of that industry which are as under: a. Production: As seen from the table below, the p .....

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om the table below. There is not much variation in the level of sales. Financial Year Total Import (MT) Sales of DI (MT) Sales of other Indian Producers (MT) Captive sale of DI(MT) Captive sale of Others (MT) Total Demand (MT) Market Share (%) DI Import 2013-14 12,52,441 1,03,42,565 29,94,323 42,74,000 40,00,724 2,28,64,053 45 5 2014-15 26,44,911 99,49,214 32,98,273 50,19,741 46,15,864 2,55,28,003 39 10 2015-16(Q1) 8,81,233 25,89,929 10,65,972 13,21,497 11,80,681 70,39,312 2015-16(A) 35,24,932 1 .....

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013-14 23568996 75.9 2014-15 23568996 75.7 2015-16(Q1) 5884372 2015-16(A) 23537488 75.7 e. Employment & Productivity: The trend of employment and productivity has remained same over the injury period, as seen from the table below: Financial Year No. of Employees (Indexed) Productivity per employee(MT) (Indexed) 2013-14 100 100 2014-15 100 100 2015-16(Q1) 100 2015-16(A) 100 100 f. Profit & Loss (Indexed): The profitability of the Domestic Industry has declined sharply during 2015- 16 (Q1) .....

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ession: a. The landed price of imports has been calculated by taking in to consideration the customs duty @7.5% for the period from April, 2013 to March, 2015 & @10% (on average) for rest of the period on assessable value of import and then adding duties to CIF value of import which reveals that the domestic Industry was always under consistent pressure to either reduce their prices to match the import prices or to hold on to their prices. The penetration of increased imports at an unprecede .....

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36 (114) b. It is seen from above that while the Index of cost of sales come down from 100 to 94, the landed price of imports declined sharply from 100 to 78 leading to reduction in sales realization which declined from 100 to 83. While comparing the sales realization vis-à-vis cost of sales, it is observed that the sales realization declined much more sharply than the cost of sales. There was as substantial decline in profitability index from 136 in 2014-15 to (114) in 2015-16 (Q1). 50. .....

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including the following: - High interest cost, depreciation and fixed cost burden - High freight cost and poor infrastructure - Raw material crisis - Under utilised capacities - Inability to meet the quality requirements of specific downstream industry 52. These claims are very general and without any facts and figures to support. The fact that injury has been caused due to increased quantities of imports of the PUC in India has already been established above. I find that the domestic industry h .....

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rotection is sought and given and is provided for under SA is that the DI is unable to handle competition and can get some time to adjust to the International competition over a period of time. The main determining factor is that there should be a serious injury or threat of serious injury and there is a causal link with the increased imports. I observe that there is a significant increase in imports of the subject goods which have caused serious injury to the domestic industry which has been du .....

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ry nature is a raw material for the downstream industry and mostly has uses only for further manufacturing. So, POSCO's case is no different from other consumers of HRC and therefore, the imports made by them cannot be excluded from the total while determining the increased imports. 54. Captive consumption of product under consideration: Several interested parties have argued that captive imports by downstream units should be exempt from safeguard duty. Mostly, these claims have been raised .....

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uty on imports of the subject goods from Korea RP and Japan as these imports have occurred due to low customs duty on imports from these countries. It is also argued that India could have explored bilateral mechanisms with these two countries under the respective FTAs rather than simply imposing general safeguard duty on Korea RP and Japan. Interested parties also argue that India-Korea CEPA provides that in the event imports from Korea RP are not the reason of injury to the domestic industry, s .....

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Further, it is the discretion of the Government of India to explore bilateral mechanisms under the respective FTAs or adopt a general safeguard measure in this case. Both the FTAs nowhere mention that India is obligated to explore bilateral mechanisms first and only after failure of such mechanisms can adopt a general safeguard measure. The imports from non-FTA countries had also significantly increased, therefore, safeguard action under the FTA would have left the door open for non-FTA countri .....

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ports is below 9%. Korea RP and Japan do not fall under this exception, as both of them are developed countries. 56. From the above analysis it is seen that the demand for the PUC in India has increased in the injury analysis period. Despite increase in demand, the production, employment and sales of domestic industry have remained stagnant, while inventories have somewhat increased. Imports have taken away most of share of the increase in demand of the subject goods. In 2014-15, while demand ex .....

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ofitability of domestic industry is the increased imports at reduced prices. If the same trend continues, the domestic industry fears that they would be forced to shut down their operations. 57. The imports of the PUC have increased significantly in absolute terms and in relation to production and consumption in India. As a result of the significant surge in imports, the Domestic Industry has suffered serious injury. Domestic Industry has performed inversely to the imports, with deterioration in .....

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mports continues to increase, despite already being at high levels. The market share of imports has also substantially increased over the period. Considering the surplus production capacities available with the foreign producers, the imports will continue to increase, as is evident from the post POI analysis at Para-100 resulting in further injury to the domestic industry. The likelihood of further increased import leads to a conclusion that there is a threat of further serious injury to the dom .....

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rested parties are of the view that for contracts for which LCs were recently opened before the imposition of provisional safeguard duty should be exempted from safeguard duty as they are of the view that imposition of provisional safeguard duty was unforeseen and the impact of additional duty would be harsh. However, I find there is no provision under the law that allows such exemptions. 61. Other procedural issues in the investigation: A number of interested parties have expressed concern that .....

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oes not by itself compromise with the substantive merits of the provisional safeguard duty. 62. Rule 9(1) of the Safeguard Duty Rules allows the Authority to proceed expeditiously with the conduct of the investigation and in critical circumstances, record a preliminary finding regarding serious injury or threat of serious injury. As critical circumstances existed in this case, the preliminary findings were issued. Under such circumstances, it is not mandatory for the designated authority to cond .....

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omestic industry taking into account, inter alia, the principles laid down in Annex to the these rules". Further, paragraph 2 of the Annex requires the establishment of causal link between alleged increased imports and serious injury or threat thereof. The Paragraph 2 of Annex to Rule 8 provides as follows: The determination referred to in paragraph (1) shall not be made unless the investigation demonstrates, on the basis of objective evidence, the existence of the causal link between incre .....

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sidered by the national authority to demonstrate serious injury, have been caused by the increased imports. In its causation assessment, the national authority is obliged to evaluate all relevant factors of an objective and quantifiable nature having a bearing on the situation of that industry. In addition, if the national authority has identified factors other than increased imports which have caused injury to the domestic industry, it shall ensure that any injury caused by such factors is not .....

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factors." 65. For the purpose of determining causation, all relevant factors of an objective and quantifiable nature having a bearing on the situation of that industry have been evaluated. A comprehensive evaluation of parameters enumerated in preceding paras demonstrates that serious injury and threat of serious injury is being caused by increased imports. In the instant case, the following are relevant in this regard, when comparing the figures from 2013-14 to 2015-16 (annualized on the .....

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ate of increase in demand/consumption of product under consideration in India; v) The profitability of the Domestic Industry has declined sharply during 2015-16 (Q1) and domestic industry recorded losses due to increased imports. 66. In view of the above I find that there is a direct correlation between the increase in imports and serious injury suffered by the domestic industry as import in absolute term increased approximately three times during the year 2015-16(Annualised on the basis of Q1) .....

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positive adjustment to import competition". Further Article 7.1 of WTO Agreement on Safeguard provides that a member shall apply safeguard measure only to the extent necessary to prevent or remedy serious injury and facilitate adjustment. 68. The purpose of a definitive safeguard measure is to provide the domestic producers a limited period of time to restructure themselves for effectively competing with the imports. Section 8B(4) of the Customs Tariff Act, 1975 and Rule 16(2) of the Safeg .....

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al linkages to the plants for minimizing the landed cost and minimizing procurement cost of various items like stores and spares, refractories, rolls, lubricants, etc. iii. Improving the operating efficiency of available assets; iv. Reduction in coal blend cost by increase in usage of imported soft coking coal in each plant as a replacement of imported hard coking coal and maximize production/use of coking coal from captive washeries; v. Reduction in gross metallic input and enhancing concast pr .....

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ioning of multi fuel power plant at Hazira will help in reduction in costs by utilisation of surplus Corex gas and coal fines; ii. The high quality of iron ore fines from mines acquired under the government auction scheme will provide flexibility to enhance the quality of raw material and thereby improve the productivity and lower the cost; iii. Essar plans to acquire mines nearby its established beneficiation and pellet facilities located in Odisha and utilise slurry pipeline to transport the s .....

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proving hot blast temperature, increasing Eta CO; ii. Reduction in logistics cost by reduction in idle freight, extra movement from Goa & reduced movement from Mangalore Port, etc.; iii. Savings in LPG consumption by changing flare stack burners at SMS 1 from LPG to coke oven gas; iv. Improvement in HSM yield by reduction of cobbles and reduction in scale loss, salvage loss, and crop-end loss; v. Commissioning of new line from Steel Melt shop to Corex gas holder for better LD gas recovery; v .....

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find that the applicants have provided viable adjustment plans which focuses on cost reduction, optimum utilization and expansion of production capacities which will enable them to adjust to the international competition. K. Unforeseen developments: 71. The Agreement on Safeguards read with Article XIX of GATT obligates the national authorities to examine the "unforeseen developments" which led to the serious injury to the Domestic Industry. It is, therefore, considered important to ex .....

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73. The Appellate Body, in Argentina - Footwear (EC), then held that the requirement of "unforeseen developments" did not establish a separate "condition" for the imposition of safeguard measures, but described a certain set of "circumstances": 74. The panel on US- Steel Safeguards concluded that the confluence of several events can unite to form the basis of an unforeseen development: "The United States argues that the robustness of the US dollar was a develop .....

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ed countries that were traditionally the biggest importers of steel such as United States and the European Union have reduced their dependence on imported steel. This development adversely affected exports of steel from China PR, Russia, Ukraine etc. to developed countries. Manufacturers in these countries had to think of ways to dispose off their production. India being a growing economy happened to be one of the natural choice for these manufacturers to offload their excess capacity. 76. As pe .....

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All these developments are unforeseen. 77. As a result of political unrest in Ukraine due to Russia's intervention, there was a sharp depreciation of about 60% in the currency of Ukraine "Hryvnia'' during 2014 alone. This was an unforeseen development. Due to long period of unrest in Ukraine, its economy contracted and its currency sharply depreciated to US dollar. However, depreciation in Ukraine's currency helped its steel producers/exporters to leverage their low priced .....

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onsumer of steel in China PR is going through a slowdown. Manufacturers in China PR can no longer dispose off their production in the domestic market. As a result China has an excess capacity of a few hundred million tones. This situation is likely to remain unchanged in the short term and Chinese steel use will continue to record a negative growth of -0.5% in 2015 and 2016. As a result, exports to countries like India are a natural choice as demand of steel has been on the rise in India. Such i .....

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Some interested parties are of the view that depreciation of Indian Rupee and local procurement by users offset unforeseen developments. In this regard I find that the petition explains in detail all the unforeseen developments that led to sudden, sharp, significant and recent increase in imports of the PUC that caused or threaten to cause serious injury to the domestic industry. The preliminary findings and the present findings also discuss these unforeseen developments in sufficient detail wh .....

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XIX of the GATT. The Appellate Body has observed the following in this respect: The phrase "of the effect of the obligations incurred by a Member under this Agreement, including tariff concessions" means that it must be demonstrated, as a matter of fact, that the importing Member has incurred obligations under the GATT 1994, including tariff concessions… (WTO Appellate Body Report in Korea - Dairy) 81. In this regard, I find that India's bound rates on PUC as per its Schedul .....

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PUC, under the present circumstances and market conditions to actually increased in sudden, sharp, significant manner into India. 82. It is clear from the above discussion that as a result of unforeseen developments and as an effect of obligations under GATT including tariff concessions, imports of the PUC has increased in a sudden, sharp, significant and recent manner into India. L. Public Interest: 83. Article 3.1 of the Agreement on Safeguards states as follows: "A Member may apply a saf .....

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and to submit their views, inter alia, as to whether or not the application of a safeguard measure would be in the public interest. The competent authorities shall publish a report setting forth their findings and reasoned conclusions reached on all pertinent issues of fact and law." 84. Some interested parties are of the view that downstream industry would be hurt by imposition of safeguard duty. They have also contended that imposition of safeguard duty would result in increase in import .....

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oil without imposing any duty on the downstream products will impact the value adding downstream Industry in India. Imposition of safeguard duty will add to the cost of production of these goods. Further, Safeguard duty on raw materials alone, without giving a similar cover to the downstream industry creates an inverted duty structure that makes downstream products expensive and makes it relatively cheaper to import. This would be particularly true in case of industry where HR Coil is a major co .....

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there is no general rate of duty drawback that takes care of the impact of safeguard duties. This would render these exporters less competitive in the world market. 87. On the other hand, public investments of lakhs of crores in the steel industry is at the risk of becoming Non performing Assets. Therefore, adequate cover of protection to the DI is also desirable. If unattended, both the prices and market share of domestic industry will further decline, resulting in financial losses to the domes .....

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when the domestic industry is able to get some temporary support for the injury suffered due to the increased imports. It is in the interest of the public at large to have a strong, competitive Indian domestic industry. M. Developing Nations: 89. The percentages of imports from developing nations have also been examined for the period 2013-14, 2014-15 & 2015-16(Q1). Except China PR and Ukraine which constitutes 24% & 4% of total imports into India respectively, other developing nations .....

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ings, it was held that increased imports of PUC have caused and threatened to cause serious injury to domestic producers of PUC. It was also observed that critical circumstances existed, where any delay in application for safeguard measures would cause irreparable damage to the industry. Considering the serious injury suffered by domestic industry during the first quarter of 2015-16 in a number of injury parameters as explained in the paragraphs above, it is held that the provisional measures we .....

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No. 103/98-Cus dated 14th December 1998 does not recognise Turkey as a developing country. However, vide Notification No. 19/2016-Customs (N.T.) dated 05.02.2016, Turkey has been included in the list of developing country and its share being less than 3% of total imports into India during the period 2013-14 to 2015-16(Q1), imports of the product under consideration originating from Turkey will not attract Safeguard Duty in terms of proviso to Section 8B (1) of the Customs Tariff Act, 1975 w.e.f .....

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ountries notified vide Notification No. 103/98-Cus dated 14 December 1998 and requested to update the aforesaid notification so that Taiwan's economic status as a developing country is reflected correctly so that exemption available to developing countries is available to them. However, since Taiwan is not recognised as a developing country so far by Government of India under Notification No. 103/98-Cus dated 14-12-1998 read with Notification No. 19/2016-Customs (N.T.) dated 05.02.2016, the .....

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b) of the SA, as injury to the domestic industry is due to loss of market share to other domestic producers. In this regard, the contention of Ukraine is not accepted as the period of investigation has been taken from 2013-14 to 2015-16 (Annualised on the basis of Q1) and during this period the imports of PUC have shown an increasing trend, whereas, the domestic indicators like market share and profitability show negative trends as discussed in the foregoing paras. The question as to what is an .....

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this regard, I find, that at present, the Indian steel industry is going through a very critical phase due to sudden, sharp, significant and recent increase in imports of the subject goods. The Indian steel producers are suffering serious injury due to such imports as a result of unforeseen developments as discussed in the foregoing paras. I find that the safeguard duty has been correctly recommended and which has been done in order to protect them f from the sudden surge in imports. 96. With re .....

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estion of the Commission.. 97. The Commission argues that captive sales and sales by other domestic producers should be examined. The Commission further adds that other Indian producers have increased their open market sales by 42%. In this regard, I observe that the market share of other Indian producers has increased by 2% whereas, the market share of domestic industry has decreased by 2% during the period 2014-15 & 2015-16 (Q1). [Para-49(b) of the finding]. Moreover, imports have taken aw .....

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ve merits of the provisional safeguard duty. This issue has been discussed in detail in Para-61. 99. Brazil has raised the issue that the share of each exporting country has not been informed by the Authority and a list of developing countries has also not been provided. Brazil also argues that the period taken into account for calculation of the volumes imported from each source has not been specified. Due to lack of such essential information, Brazil argues that it has not been able to exercis .....

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imports has been determined to be not more than 3% in total imports during the period 2013-14, 2014-15 & 2015-16 (Q1), imports of PUC from Brazil is excluded from the purview of safeguard duty. P. Examination of Post POI data: 100. In the given circumstances, an attempt was made to analyse the trend in the period after the POI i.e. upto 2nd quarter of 2015-16 to draw a clear inference about the possibility of accentuation of the injury to the domestic industry. The domestic industry vide th .....

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8003 28157248 30268388 Market Share of Import(%) 5 10 13 15 Market Share of DI(%) 45 39 37 35 Inventory(MT) 636879 648290 657099 871440 Profit/ (Loss) (Indexed) 100 136 (114) (120) 101. On scrutiny of the above data it is observed that during the post POI i.e 2015-16(Q1+Q2)(Annualised), between the period Q1 to Q2, there is a increase in the imports by about 30%. The market share of imports have increased by about 2% as against the corresponding decline of the market share of the domestic indust .....

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imports is also quite significant in relation to total demand as well. ii. The investigation has indicated that the domestic industry has suffered serious injury, considering overall performance, on the basis of listed economic parameters such as market share, and profitability, which have sharply declined from the base year till 2015-16(Annualised) whereas market share of imports have increased during the same period. This has caused significant overall impairment to the domestic industry. Thi .....

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because it will aid in recovery of the domestic industry and ensure that end users get a stable supply of subject goods from the domestic industry. i. From the analysis of post POI data, it has been observed that the position of domestic industry further deteriorated on account of production, sales & market share. Thus, I conclude that serious injury/ threat of serious injury exists and further protection to the domestic industry is required to be extended. R. Recommendations: a. The increa .....

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