01-2980. Stainless Steel Bar From India; Preliminary Results of Antidumping Duty Administrative Review and Partial Rescission of Administrative Review

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

ACTION:

Notice of preliminary results of 1999-2000 administrative review and partial rescission of administrative review of stainless steel bar from India.

SUMMARY:

In response to requests from interested parties, the Department of Commerce is conducting an administrative review of the antidumping duty order on stainless steel bar from India with respect to Panchmahal Steel Limited. This review covers sales of stainless steel bar to the United States during the period February 1, 1999, through January 31, 2000.

We have preliminarily determined that, during the period of review, Panchmahal Steel Limited made sales below normal value. If these preliminary results are adopted in our final results of administrative review, we will instruct the Customs Service to assess antidumping duties equal to the difference between the export price and the normal value.

Interested parties are invited to comment on these preliminary results. Parties who submit argument are also requested to submit (1) a statement of the issue and (2) a brief summary of the argument.

EFFECTIVE DATE:

February 5, 2001.

FOR FURTHER INFORMATION CONTACT:

Blanche Ziv or Ryan Langan, Office 1, AD/CVD Enforcement, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 20230; telephone [phone] or [phone] respectively.

SUPPLEMENTARY INFORMATION:

Applicable Statute

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 (“URAA”). In addition, all references to the Department of Commerce's (“the Department's”) regulations are to 19 CFR Part 351 (April 1999).

Background

On February 21, 1995, the Department published in the Federal Register (60 FR 9661) the antidumping duty order on stainless steel bar from India. The Department notified interested parties of the opportunity to request an administrative review of this order on February 14, 2000 (65 FR 7348). In February 2000, the Department received requests from the four respondents to conduct an administrative review. Thus, in accordance with 19 CFR 351.221(b)(1), we published a notice of initiation of this antidumping duty administrative review on March 30, 2000 (65 FR 16875), with respect to Chandan Steel Ltd. (“Chandan”), Isibars Limited (“Isibars”),Viraj Impoexpo Ltd. (“Viraj”), and Panchmahal Steel Limited (“Panchmahal”). The review covers the period February 1, 1999, through January 31, 2000.

On May 2, 2000, Chandan and Isibars withdrew their requests for review. Chandan and Isibars' withdrawal requests were timely and no other interested party requested a review of these companies. Therefore, in accordance with 19 CFR 351.213(d)(1), we are rescinding the review of Chandan and Isibars.

On June 20 and 29, 2000, the petitioners submitted allegations of sales made below the cost of production for Viraj and Panchmahal, respectively. Because the petitioners' allegations provided a reasonable basis to suspect that sales in the home market by Viraj and Panchmahal had been made at prices below the cost of production, the Department initiated sales below cost investigations of Viraj and Panchmahal on July 11 and 13, 2000, respectively.

On September 8, 2000, Viraj withdrew its request for review. Although, the respondent's withdrawal was received by the Department well after the deadline of June 28, 2000, section 351.213(d)(1) of the Department's regulations permits the Department to extend the deadline if “it is reasonable to do so.” Therefore, in accordance with 351.213(d)(1) of the Department's regulations, the Department extended the deadline to withdraw requests for review and rescinded the administrative review with respect to Viraj (see the September 26, 2000 memo, “Partial Rescission of Administrative Review with Respect to Viraj Impoexpo, Ltd.” from team to Susan Kuhbach).

The Department conducted verification of Panchmahal's cost and sales information in December 2000, at Panchmahal's corporate headquarters in Baroda, India, and at its production facility in Kalol, India. The Department issued the sales and cost verification report on January 4, 2001.

Scope of Reviews

Imports covered by these reviews are shipments of stainless steel bar (“SSB”). SSB means articles of stainless steel in straight lengths that have been either hot-rolled, forged, turned, cold-drawn, cold-rolled or otherwise cold-finished, or ground, having a uniform solid cross section along their whole length in the shape of circles, segments of circles, ovals, rectangles (including squares), triangles, hexagons, octagons, or other convex polygons. SSB includes cold-finished SSBs that are turned or ground in straight lengths, whether produced from hot-rolled bar or from straightened and cut rod or wire, and reinforcing bars that have indentations, ribs, grooves, or other deformations produced during the rolling process.

Except as specified above, the term does not include stainless steel semi-finished products, cut length flat-rolled products (i.e., cut length rolled products which if less than 4.75 mm in thickness have a width measuring at least 10 times the thickness, or if 4.75 mm or more in thickness having a width which exceeds 150 mm and measures at least twice the thickness), wire (i.e., cold-formed products in coils, of any uniform solid cross section along their whole length, which do not conform to the definition of flat-rolled products), and angles, shapes and sections.

The SSB subject to these reviews is currently classifiable under subheadings 7222.11.00.05, 7222.11.00.50, 7222.19.00.05, 7222.19.00.50, 7222.20.00.05, 7222.20.00.45, 7222.20.00.75, and 7222.30.00.00 of the Harmonized Tariff Schedule of the United States (“HTSUS”). Although the HTSUS subheadings are provided for convenience and customs purposes, our written description of the scope of these reviews is dispositive.

Use of Facts Otherwise Available

Section 776(a) provides that the Department shall apply “facts otherwise available” if, inter alia, a respondent:

(1) Withholds information that has been requested;

(2) Fails to provide information within the deadlines established, or in the form or manner requested by the Department, subject to subsections (c)(1) and (e) of Section 782;

(3) Significantly impedes a proceeding; or

(4) Provides information that cannot be verified.

Section 782(e) of the Act provides further that the Department shall not decline to consider information that is submitted by an interested party and that is necessary to the determination but does not meet all the applicable requirements established by the Department if—

(1) The information is submitted by the deadline established for its submission;

(2) The information can be verified;

(3) The information is not so incomplete that it cannot serve as a reliable basis for reaching the applicable determination;

(4) The interested party has demonstrated that it acted to the best of its ability in providing the information and meeting the requirements established by the Department with respect to the information; and

(5) The information can be used without undue difficulties.

Thus, if any one of these criteria is not met, the Department may decline to consider the information at issue in making its determination.

We have preliminarily determined that the use of facts available is necessary in this review for Panchmahal. Our reasons are described below (see also the January 29, 2001 memo, “Application of Adverse Facts Available for Panchmahal Steel Ltd.” from team to Susan Kuhbach).

In its May 15, 2000 section A questionnaire response, Panchmahal reported the quantity and value of home market sales of the merchandise under review. Panchmahal's June 8, 2000 Section B questionnaire response, which included its home market sales database, indicated that “black bar,” or hot rolled bar was the only type of the merchandise under review sold in the home market during the POR. On September 6, 2000, we asked Panchmahal to confirm that it had reported all of its home market sales of the merchandise under review. In making this confirmation, we specifically instructed Panchmahal to ensure that sales of “bright bar,” or cold-rolled bar, and black bar were included in the reported data for the home market. On October 10, 2000, Panchmahal confirmed in its first supplemental questionnaire response that it had reported all home market sales of all types of the merchandise under review in the home market sales listed in its previous submissions.

At verification, we discovered that Panchmahal failed to report its home market sales of bright bar (see the January 4, 2001 sales and cost verification report), despite the fact that, as noted above, cold-rolled bar is included in the scope of the review. Moreover, the Department specifically asked for “bright bar” sales in its supplemental questionnaire. Panchmahal stated at verification that it has excluded these home market sales because it believed that the merchandise in question was not included within the scope of the review due to quality differences. However, we disagree with Panchmahal's interpretation of the scope of this proceeding and believe that Panchmahal should have reported its home market sales of bright bar. The description of the merchandise covered by the scope of this review does not make exceptions based on the quality of the merchandise. Furthermore, if Panchmahal was uncertain of its reporting requirements, it should have sought clarification from the Department about it. It did not do so despite having had ample opportunity.

In addition, Panchmahal did not prepare for verification as requested in the verification outline. Specifically, Panchmahal did not prepare any of the requested documentation for the pre-selected items for sales or costs. As a result, the verification process was significantly impeded and many reported items were left unverified. Specifically, packing costs, indirect selling expenses, commission expenses and level of trade adjustments were not verified with respect to home market sales. In addition, we were unable to verify the following expenses and adjustments for U.S. sales: Inland freight; international freight; credit; packing; indirect selling expenses; brokerage and handling; and inventory carrying costs. Regarding its costs, Panchmahal did not prepare documents demonstrating how the reported cost information reconciled to inventory, consumption, production, and accounting records and financial statements. Therefore, we were unable to verify the reported raw material, overhead, and bright bar cost data; labor costs were the only reported costs that were verified.

Despite having stated at the beginning of verification that all the documents required for verification were available at its sales office, Panchmahal was unable during verification to provide documents supporting production and costs data because they were stored at the production factory. Consequently, the documents available to the verifiers for the majority of cost and production data were limited to worksheets and summary sheets Panchmahal used to prepare the responses submitted to the Department, and monthly accounting ledgers.

In addition, Panchmahal officials were unavailable to participate in verification on numerous occasions and for extended periods of time. See, e.g., verification report at 8-10 and 14. The Department scheduled verification to last 5 full business days, but because Panchmahal officials were not available throughout this period, a significant amount of time was wasted and unproductive. Panchmahal officials' absence significantly impeded the Department's ability to conduct a complete sales and cost of production verification. (For a further discussion see, Memorandum to Richard Moreland dated Janaury 29, 2001, “Application of Facts Otherwise Available for Panchmahal Steel Ltd.,” which is available in the public records of the Department's Central Records Unit, Room B-099).

For these resaons, we find that Panchmahal's sales and cost information is substantially unverified and cannot serve as a reliable basis for calculating export price or normal value. Therefore, in accordance with section 776(a)(2) of the Act, we find that the use of facts otherwise available is warranted because Panchmahal withheld information requested by the Department, Panchmahal significantly impeded this proceeding, and Panchmahal's reported sales and cost information was unverifiable.

In determining the appropriate facts available to assign to Panchmahal, in accordance with section 776(b) of the Act, we find that Panchmahal failed to cooperate by not acting to the best of its ability to comply with requests for information throughout this administrative review (see Memorandum to Richard Moreland dated Janaury 29, 2001, “Application of Facts Otherwise Available for Panchmahal Steel Ltd.”). Therefore, we preliminarily determine that an adverse inference is warranted in selecting facts otherwise available. We also find that Panchmahal's sales and costs information does not meet the standards for consideration of information outlined in section 782(e) of the Act.

As adverse facts available, we have assigned a margin of 19.54 percent to Panchmahal. This margin was calculated for Ferroy Alloys Corporation Limited (“Facor”) during the 1998-1999 administrative review and represents the highest weighted-average margin determined for any firm during any segment of this proceeding (see Stainless Steel Bar from India; Final Results of Antidumping Duty Administrative Review and Partial Rescission of Administrative Review, 65 FR 48965, 48968 (Aug. 10, 2000)).

Information from prior segments of the proceeding constitutes secondary information and section 776(c) of the Act provides that the Department shall, to the extent practicable, corroborate that secondary information from independent sources reasonably at its disposal. The Statement of Administrative Action (“SAA”) provides that “corroborate” means that the Department will satisfy itself that the secondary information to be used has probative value (see H.R. Doc. 103-316 at 870 (1994)).

To corroborate secondary information, the Department will, to the extent practicable, examine the reliability and relevance of the information to be used. However, unlike other types of information, such as input costs or selling expenses, there are no independent sources for calculated dumping margins. Thus, in an administrative review, if the Department chooses as adverse facts available a calculated dumping margin from a prior segment of the proceeding, it is not necessary to question the reliability of the margin for that time period. With respect to the relevance aspect of corroboration, however, the Department will consider information reasonably at its disposal as to whether there are circumstances that would render a margin inappropriate. Where circumstances indicate that the selected margin is not appropriate as adverse facts available, the Department will disregard the margin and determine an appropriate margin (see, e.g., Fresh Cut Flowers from Mexico; Final Results of Antidumping Duty Administrative Review, 61 FR 6812, 6814 (Feb. 22, 1996) (where the Department disregarded the highest margin as adverse facts available because the margin was based on another company's uncharacteristic business expense resulting in an unusually high margin)).

The highest calculated margin in the history of this proceeding is 19.54 percent (see Stainless Steel Bar from India; Final Results of Antidumping Duty Administrative Review and Partial Rescission of Administrative Review, 65 FR 48965, 48968 (Aug. 10, 2000)). In this review, there are no circumstances indicating that this margin is inappropriate as facts available. There are no calculated margins in this review. Therefore, we find that the 19.54 percent rate is corroborated to the greatest extent practicable in accordance with section 776(c) of the Act.

Preliminary Results of the Reviews

We preliminarily determine the following weighted-average dumping margin:

Manufacturer/ exporter	Period	Margin (percent)
Panchmahal	2/1/98-1/31/99	19.54

Any interested party may request a hearing within 30 days of publication of this notice. A hearing, if requested, will be held 37 days after the publication of this notice, or the first business day thereafter. Interested parties may submit case briefs within 30 days of the date of publication of this notice. Rebuttal briefs, which must be limited to issues raised in the case briefs, may be filed not later than 35 days after the date of publication of this notice. The Department will issue the final results of this administrative review, which will include the results of its analysis of issues raised in any such comments, within 120 days of publication of these preliminary results.

Upon completion of this administrative review, the Department shall determine, and the Customs Service shall assess, antidumping duties on all appropriate entries. The Department will issue appraisement instructions directly to the Customs Service.

The following deposit requirements will be effective upon publication of the final results of this administrative review for all shipments of stainless steel bar from India entered, or withdrawn from warehouse, for consumption on or after the publication date, as provided for by section 751(a)(1) of the Act: (1) The cash deposit rate for the reviewed company will be the rate established in the final results of this review; (2) if the exporter is not a firm covered in this review, but was covered in a previous review or the original LTFV investigation, the cash deposit rate will continue to be the company-specific rate published for the most recent period; (3) if the exporter is not a firm covered in this review, a previous review, or the original LTFV investigation, but the manufacturer is, the cash deposit rate will be the rate established for the most recent period for the manufacturer of the merchandise; and (4) the cash deposit rate for all other manufacturers and/or exporters of this merchandise, shall be 12.45 percent, the “all others” rate established in the LTFV investigation (59 FR 66915, December 28, 1994).

These requirements, when imposed, shall remain in effect until publication of the final results of the next administrative review.

This notice also serves as a preliminary reminder to importers of their responsibility under 19 CFR 351.402(f) to file a certificate regarding the reimbursement of antidumping duties prior to liquidation of the relevant entries during this review period. Failure to comply with this requirement could result in the Secretary's presumption that reimbursement of antidumping duties occurred and the subsequent assessment of double antidumping duties.

This administrative review and notice are in accordance with sections 751(a)(1) and 777(i)(1) of the Act.

Dated: January 29, 2001.

Bernard T. Carreau,

Fulfilling the duties of Assistant Secretary for Import Administration.