01-24752. Notice of Final Determination of Sales at Less Than Fair Value: Certain Hot-Rolled Carbon Steel Flat Products From India

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

EFFECTIVE DATE:

October 3, 2001.

FOR FURTHER INFORMATION CONTACT:

Timothy Finn or John Conniff at [phone] or [phone] respectively, AD/CVD Enforcement, Office 4, Group II, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 20230.

SUPPLEMENTARY INFORMATION:

The Applicable Statute and Regulations

Unless otherwise indicated, all citations to the Tariff Act of 1930, as amended (the Act), are references to the provisions effective January 1, 1995, the effective date of the amendments made to the Act by the Uruguay Round Agreements Act. In addition, unless otherwise indicated, all citations to Department of Commerce (the Department) regulations are to 19 CFR part 351 (April 2000).

Final Determination

We determine that certain hot-rolled carbon steel flat products from India are being sold, or are likely to be sold, in the United States at less than fair value (LTFV), as provided in section 735 of the Act. The estimated margin of sales at LTFV is shown in the Suspension of Liquidation section of this notice.

Case History

On May 3, 2001, the Department of Commerce (Department) published the preliminary determination of the antidumping duty investigation of hot-rolled steel from India. See Notice of Preliminary Determination of Sales at Less Than Fair Value and Postponement of Final Determination: Certain Hot-Rolled Carbon Steel Flat Products from India, 66 FR 22157 (May 3, 2001) (Preliminary Determination). The period of investigation (POI) is October 1, 1999, through September 30, 2000. We conducted verification of the questionnaire responses of the respondents, Ispat Industries Ltd., (Ispat) during the weeks of April 30, 2001 and May 8, 2001, and Essar Steel Ltd., (Essar) during the weeks of June 11, 2001, and June 18, 2001. We gave interested parties an opportunity to comment on our Preliminary Determination and our findings at verification. On August 1, 2001, the respondents, Ispat Industries Ltd. (Ispat) and Essar Steel Ltd. (Essar), and the petitioners,^[1] submitted case briefs; and on August 9, 2001, all parties submitted rebuttal briefs. The Department received requests for a public hearing from both petitioners and respondents which were later withdrawn; therefore no public hearing was held.

Although the deadline for this determination was originally September 17, 2001, in light of the events of September 11, 2001 and the subsequent closure of the Federal Government for reasons of security, the time frame for issuing this determination has been extended by four days.

The Department has conducted this investigation in accordance with section 731 of the Act.

Scope of Investigation

For purposes of these investigations, the products covered are certain hot-rolled carbon steel flat products of a rectangular shape, of a width of 0.5 inch or greater, neither clad, plated, nor coated with metal and whether or not painted, varnished, or coated with plastics or other non-metallic substances, in coils (whether or not in successively superimposed layers), regardless of thickness, and in straight lengths of a thickness of less than 4.75 mm and of a width measuring at least 10 times the thickness. Universal mill plate (i.e., flat-rolled products rolled on four faces or in a closed box pass, of a width exceeding 150 mm, but not exceeding 1250 mm, and of a thickness of not less than 4.0 mm, not in coils and without patterns in relief) of a thickness not less than 4.0 mm is not included within the scope of these investigations.

Specifically included within the scope of these investigations are vacuum degassed, fully stabilized (commonly referred to as interstitial-free (IF)) steels, high strength low alloy (HSLA) steels, and the substrate for motor lamination steels. IF steels are recognized as low carbon steels with micro-alloying levels of elements such as titanium or niobium (also commonly referred to as columbium), or both, added to stabilize carbon and nitrogen elements. HSLA steels are recognized as steels with micro-alloying levels of elements such as chromium, copper, niobium, vanadium, and molybdenum. The substrate for motor lamination steels contains micro-alloying levels of elements such as silicon and aluminum.

Steel products to be included in the scope of these investigations, regardless of definitions in the Harmonized Tariff Schedule of the United States (HTSUS), are products in which: (i) Iron predominates, by weight, over each of the other contained elements; (ii) the carbon content is 2 percent or less, by weight; and (iii) none of the elements listed below exceeds the quantity, by weight, respectively indicated:

1.80 percent of manganese, or

2.25 percent of silicon, or

1.00 percent of copper, or

0.50 percent of aluminum, or

1.25 percent of chromium, or

0.30 percent of cobalt, or

0.40 percent of lead, or

1.25 percent of nickel, or

0.30 percent of tungsten, or

0.10 percent of molybdenum, or

0.10 percent of niobium, or

0.15 percent of vanadium, or

0.15 percent of zirconium.

All products that meet the physical and chemical description provided above are within the scope of these investigations unless otherwise excluded. The following products, by way of example, are outside or specifically excluded from the scope of these investigations:

• Alloy hot-rolled steel products in which at least one of the chemical elements exceeds those listed above (including, e.g., American Society for Testing and Materials (ASTM) specifications A543, A387, A514, A517, A506).
• Society of Automotive Engineers (SAE)/American Iron & Steel Institute (AISI) grades of series 2300 and higher.
• Ball bearing steels, as defined in the HTSUS.
• Tool steels, as defined in the HTSUS.
• Silico-manganese (as defined in the HTSUS) or silicon electrical steel with a silicon level exceeding 2.25 percent.
• ASTM specifications A710 and A736.
• USS abrasion-resistant steels (USS AR 400, USS AR 500).
• All products (proprietary or otherwise) based on an alloy ASTM specification (sample specifications: ASTM A506, A507).
• Non-rectangular shapes, not in coils, which are the result of having been processed by cutting or stamping and which have assumed the character of articles or products classified outside chapter 72 of the HTSUS.

The merchandise subject to these investigations is classified in the HTSUS at subheadings: 7208.10.15.00, 7208.10.30.00, 7208.10.60.00, 7208.25.30.00, 7208.25.60.00, 7208.26.00.30, 7208.26.00.60, 7208.27.00.30, 7208.27.00.60, 7208.36.00.30, 7208.36.00.60, 7208.37.00.30, 7208.37.00.60, 7208.38.00.15, 7208.38.00.30, 7208.38.00.90, 7208.39.00.15, 7208.39.00.30, 7208.39.00.90, 7208.40.60.30, 7208.40.60.60, 7208.53.00.00, 7208.54.00.00, 7208.90.00.00, 7211.14.00.90, 7211.19.15.00, 7211.19.20.00, 7211.19.30.00, 7211.19.45.00, 7211.19.60.00, 7211.19.75.30, 7211.19.75.60, and 7211.19.75.90. Certain hot-rolled carbon steel flat products covered by these investigations, including: vacuum degassed fully stabilized; high strength low alloy; and the substrate for motor lamination steel may also enter under the following tariff numbers: 7225.11.00.00, 7225.19.00.00, 7225.30.30.50, 7225.30.70.00, 7225.40.70.00, 7225.99.00.90, 7226.11.10.00, 7226.11.90.30, 7226.11.90.60, 7226.19.10.00, 7226.19.90.00, 7226.91.50.00, 7226.91.70.00, 7226.91.80.00, and 7226.99.00.00. Subject merchandise may also enter under 7210.70.30.00, 7210.90.90.00, 7211.14.00.30, 7212.40.10.00, 7212.40.50.00, and 7212.50.00.00. Although the HTSUS subheadings are provided for convenience and U.S. Customs purposes, the written description of the merchandise under investigation is dispositive.

Period of Investigation

The period of investigation (POI) is October 1, 1999, through September 30, 2000. This period corresponds to the four most recent fiscal quarters prior to the month of the filing of the petition (i.e., November 2000).

Analysis of Comments Received

All issues raised in the case and rebuttal briefs by parties to this proceeding and to which we have responded are listed in the Appendix to this notice and addressed in the “Issues and Decision Memorandum” (Decision Memorandum), dated September 21, 2001, which is hereby adopted by this notice. Parties can find a complete discussion of the issues raised in this investigation and the corresponding recommendations in this public memorandum which is on file in the Central Records Unit, room B-099 (B-099) of the main Department building. In addition, a complete version of the Decision Memorandum can be accessed directly on the Web at http://ia.ita.doc.gov. The paper copy and electronic version of the Decision Memorandum are identical in content.

Changes Since the Preliminary Determination

Based on our findings at verification, and analysis of comments received, we have made adjustments to the preliminary determination calculation methodologies in calculating the final dumping margins in this proceeding. These adjustments are discussed in detail in the Decision Memorandum and are listed below:

Ispat

(1) We revised Ispat's pay dates for certain U.S. sales to reflect the actual date of payment.

(2) We recalculated the reported home market commission amounts to reflect changes from verification.

(3) We adjusted expenses for two home market sales to reflect changes from verification.

(4) We included credit expenses (the variable CREDITH) in calculating selling expense for the COP test.

(5) We made other ministerial corrections to ferro alloy inputs (RHALLOYs).

Essar

(1) We allowed the adjustment for duty drawback under the Advance License program.

(2) For U.S. Imputed Credit, we allowed adjustments based upon the actual pay date reported.

(3) For affiliated party inputs, we adjusted Essar's transfer price to reflect the market value for iron ore pellet because the transfer price for this product was below its market price.

(4) At verification, Essar reported, in accordance with the Department's policies, that it had failed to identify a small quantity of U.S. sales transactions that occurred during the POI.

There was key information concerning the transactions that was not included in the corrections Essar presented, thus we could not pursue the most accurate margin possible for these sales. Pursuant to 776(a)(2) of the Act, we have determined that it is necessary to use facts available for these transactions. There is no evidence on the record that Essar has not acted to the best of its ability. Therefore, we have assigned to these sales a neutral facts available rate based upon the weighted-average dumping margin calculated for Essar's remaining U.S. sales. See Decision Memorandum at Comment 10.

Verification

As provided in section 782(i) of the Act, we verified the information submitted by the respondent for use in our final determination. We used standard verification procedures including examination of relevant accounting and production records, and original source documents provided by the respondent.

Suspension of Liquidation

Pursuant to section 735(c)(1)(B) of the Act, we are instructing the U.S. Customs Service (Customs) to continue to suspend liquidation of all entries of hot-rolled carbon steel flat products from India that are entered, or withdrawn from warehouse, for consumption on or after May 3, 2001 (the date of publication of the Preliminary Determination in the Federal Register). Customs shall continue to require a cash deposit or the posting of a bond equal to the estimated amount by which the normal value exceeds the U.S. price as shown above. We will adjust the deposit requirements to account for any export subsidies found in the companion countervailing duty investigation. The suspension of liquidation instructions will remain in effect until further notice.

Manufacturer/ exporter	Margin (percent)
Ispat Industries Ltd	43.07
Essar Steel Ltd	29.35
All Others	33.17

ITC Notification

In accordance with section 735(d) of the Act, we have notified the International Trade Commission (ITC) of our determination. As our final determination is affirmative, the ITC will determine, within 45 days, whether these imports are causing material injury, or threat of material injury, to an industry in the United States. If the ITC determines that material injury, or threat of injury does not exist, the proceeding will be terminated and all securities posted will be refunded or canceled. If the ITC determines that such injury does exist, the Department will issue an antidumping order directing Customs officials to assess antidumping duties on all imports of the subject merchandise entered or withdrawn from warehouse for consumption on or after the effective date of the suspension of liquidation.

This determination is issued and published in accordance with sections 735(d) and 777(i)(1) of the Act.

Dated: September 21, 2001.

Faryar Shirzad,

Assistant Secretary for Import Administration.

Appendix—Issues in Decision Memorandum

Common Issues

1. Duty Drawback Adjustment—DEPB Program

2. The Appropriate Date of U.S. Sales

3. Inclusion of Excise Taxes in Reported Costs

Essar Steel Ltd.

4. Duty Drawback Adjustment—Verification

5. Duty Drawback Adjustment—Advance License Program

6. U.S. Imputed Credit Expenses Disallowed in the Preliminary Determination

7. Treatment of Pre-Operative Expenses

8. Treatment of Cost of Services Provided by an Affiliated Party

9. Use of the Revised Interest Expense Ratio

10. Unreported U.S. Sales

11. Use of Updated Credit Periods to Calculate Home Market Credit Expenses

Ispat Industries Ltd.

12. Capitalization of Production Costs

13. Start-Up Adjustment—Hot-Strip Mill

14. Exclusion of Costs Related to Start-Up

15. IMIL “Learning Curve”/Start-Up Adjustment

16. Overstated General and Administrative (G&A) Expenses

17. Scrap Revenue Offset to Costs

18. Proper Classification of Bad Debt Expense

19. Adjusting Home Market Price in the Cost Test for Imputed Credit Expense

20. Identifying the Proper Quality Characteristics

21. Calculating Credit Expenses Based on Home Market Price and Excise Tax

22. Verification Corrections

23. Ministerial Corrections

Footnotes

1.  The petitioners in this investigation are Bethlehem Steel Corporation, Gallatin Steel Company, IPSCO Steel Inc., LTV Steel Company, Inc., National Steel Corporation, Nucor Corporation, Steel Dynamics, Inc., U.S. Steel Group (a unit of USX Corporation), Weirton Steel Corporation, Independent Steelworkers Union, and United Steelworkers of America (collectively the petitioners).