Page 316 - MANUAL OF SOP

Manual of OP for Trade Remedy Investigations

11.7.33. While evaluating the capacity utilization, it may be noted that the actual
capacity utilization percentages may vary from industry to industry and from
company to company. Therefore, the team must look into the reasons for variations
and the likely impact of dumping as a cause for those variations. Further, the team
must verify whether there has been a capacity addition during the injury period.
This needs to be evaluated in light of the fact that the increase in capacity could
also be the reason affecting the DI, if it is not matched by an increase in demand.

11.7.34. The Rules require that the Authority consider the effect of the dumped
imports of the PUC in relation to the domestic production of the like article under
investigation. This is achieved by considering information relating to the PUC only
produced by the DI. However, it is possible that the same manufacturing facility
is used for the manufacturing of more than one product and not all of them are
covered in the definition of the PUC. In such cases, the production and capacity
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utilization should be analyzed on the overall basis both in respect of the PUC
as well as the NPUC, as capacity utilisations of individual sub products may vary
and be compensated against one another. This requires detailed qualitative and
quantitative analysis and an understanding of the business situation. This should
also be focused at the time of physical/on the spot verification of the manufacturing
facilities.

11.7.35. The parameter pertaining to the volume of inventory must be examined
with a view to compare the stock of inventory as a proportion of sales volume and
industry-specific average inventory norms. The injury may be determined only if
there is an increase /decrease in inventory levels relative to sales volume rather than
in absolute terms. Captive consumption of PUC may also need to be considered,
wherever relevant. In case of an increase in sales volume, the DI may increase its
average inventory level to ensure there is no shortfall and increase in inventory may
not be necessarily an indicator of injury on account of alleged dumped imports.

11.7.36. While evaluating the return on investments, it must be examined whether
there has been an increase in the capital employed by the DI in the injury period. If
there has been a sudden increase in the capital employed during the injury period,

9 In Final Finding in Anti-dumping investigation concerning imports of Viscose Filament yarn originating in or exported
from China PR and Ukraine, F.N.14/23/2004-DGAD dated April 4, 2006, the DI had sought ADD only on imports of
VFY below 150 deniers. The production facilities however are utilised for making different types of deniers; Initiation
of Anti-Dumping investigation concerning imports of “Coated Paper” originating in or exported from China PR,
European Union & USA, F.N. 6/42/2017- DGAD dated January 23, 2018.

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