[Federal Register Volume 60, Number 72 (Friday, April 14, 1995)]
[Notices]
[Pages 19019-19021]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-9274]
[[Page 19019]]
DEPARTMENT OF COMMERCE
[A-122-057]
Replacement Parts for Self-Propelled Bituminous Paving Equipment
From Canada; Final Results of Antidumping Duty Administrative Review
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
ACTION: Notice of final results of antidumping duty administrative
review.
-----------------------------------------------------------------------
SUMMARY: On November 21, 1994, the Department of Commerce (the
Department) published the preliminary results of its administrative
review of the antidumping duty order on replacement parts for self-
propelled bituminous paving equipment from Canada (59 FR 59993). The
review period is September 1, 1990 through August 31, 1991. This review
involves one manufacturer/exporter of this merchandise, the Allatt
Paving Division of Ingersoll-Rand Canada Inc. (Allatt). After
considering the comments submitted by petitioner and respondent, we
determine the dumping margin for this period to be 6.86 percent.
EFFECTIVE DATE: April 14, 1995.
FOR FURTHER INFORMATION CONTACT: Gayle Longest or Kelly Parkhill,
Office of Countervailing Compliance, Import Administration,
International Trade Administration, U.S. Department of Commerce,
Washington, DC 20230; telephone: (202) 482-2786.
SUPPLEMENTARY INFORMATION:
Background
On November 21, 1994, the Department published in the Federal
Register the preliminary results of its administrative review of the
antidumping duty order on replacement parts for self-propelled
bituminous paving equipment from Canada (59 FR 59993) covering the
period September 1, 1990 through August 31, 1991. This review involves
one manufacturer/exporter of this merchandise, Allatt. The Department
has now completed this administrative review in accordance with section
751 of the Tariff Act of 1930, as amended (the Act).
Scope of the Review
Imports covered by this review are shipments of replacement parts
for self-propelled bituminous paving equipment, excluding attachments
and parts for attachments. This merchandise is currently classifiable
under Harmonized Tariff Schedule (HTS) item numbers 4016.93.10,
7315.11.00, 7315.89.50, 7315.90.00, 8336.50.00, 8479.99.00, 8481.20.00,
8482.10.10, 8483.90.90, 8539.29.20, 8544.20.00, 8544.41.00, 8544.51.80,
8544.60.20, and 9015.30.40. The HTS item numbers are provided for
convenience and Customs purposes. The written description remains
dispositive.
Analysis of Comments Received
We gave interested parties an opportunity to comment on the
preliminary results. We received comments from the petitioner, Blaw-
Knox, and from the Road Machinery Division of Ingersoll-Rand, which is
the successor to the respondent.
Comment 1: The petitioner claims that the Department improperly
made adjustments to foreign market value (FMV) for pre-sale home market
movement costs through a circumstance-of-sale adjustment and the
exporter's sales price (ESP) offset. Petitioner maintains that these
adjustments are prohibited by the decision of the Court of Appeals for
the Federal Circuit (the Federal Circuit) in Ad Hoc Committee of AD-NM-
TX-FL Producers of Gray Portland Cement v. United States, 13 F.3d 398
(Fed. Cir. 1994).
Respondent maintains that Ingersoll-Rand did not claim pre-sale
home market movement charges, and therefore that the issue is moot.
(See Supplemental Questionnaire Response dated December 2, 1993,
Section B-1 Format Sheets, p. 2).
Department's Response: We agree with the respondent. No pre-sale
home market movement charges were claimed and the Department did not
make any adjustment to FMV for these expenses.
Comment 2: The respondent argues that the Department incorrectly
adjusted the United States price (USP) to account for certain home
market taxes. The respondent maintains that the Department's current
methodology is the result of the decision of the Court of International
Trade (CIT) in Federal-Mogul Corp. v. United States, Slip Op. 93-194
(CIT 1993) (Federal-Mogul), in which the court ordered the Department
to adjust USP by the ad valorem tax rate at the same point in the chain
of commerce at which the tax is imposed in the home market. Thus, the
respondent claims that the first step of the Department's current tax
methodology, as mandated in Federal-Mogul, is to increase USP by
applying the home market tax rate to the price of U.S. sales at the
point at which the product would be taxed in the home market. According
to the respondent, the second step of the Department's tax methodology
involves making an additional deduction to USP and FMV by multiplying
each adjustment by the ad valorem tax rate. The respondent disagrees
with the second step of the Department's methodology because it
believes that the second round of adjustments does not conform with the
requirement that the Department calculate accurate margins.
Furthermore, even if these second step adjustments are warranted, the
respondent maintains that the Department has not applied the stated
methodology correctly.
According to the respondent, the Department states in its
preliminary results that the second step of the tax methodology is made
to avoid creating dumping margins where they would not exist if no
taxes were imposed, in accordance with Silicomanganese From Venezuela
(59 FR 31205) and Zenith Electronics Corp. v. United States, 988F.2d
1573 (Fed. Cir. 1993) (Zenith). The respondent argues that the
Department has misinterpreted the holding of the Zenith opinion. The
respondent claims that the Zenith decision does not require the
Department to make specific adjustments to avoid margin creation
resulting from the multiplier effect. Furthermore, the respondent
argues that the Department's current tax methodology actually increases
dumping margins, which is in conflict with the Department's duty to
calculate accurate margins. Despite the CIT's decision upholding the
Department's current tax methodology (see Independent Radionic Workers
of America v. United States, 862 F. Supp. 422, 426 (CIT 1994); see also
Torrington Co. v. United States, 866 F. Supp. 1434, 1436 (CIT 1994)),
the respondent claims that the statute does not authorize the second
step to the Department's tax methodology and that this methodology has
not yet been reviewed by the Federal Circuit.
In addition, the respondent argues that even if the Department's
tax methodology is valid under the law, the Department did not
correctly apply it in the preliminary results of this case. The
respondent maintains that the second step tax adjustment is made to
eliminate any residual tax that would have been included in the
ultimate USP or FMV as a result of movement costs that were included in
the tax base but were later deducted in deriving the ultimate
comparison price. See Silicomanganese from Venezuela (59 FR 31205). The
respondent claims that in the preliminary results the Department
incorrectly made tax adjustments for all price adjustments, including
other price adjustments that were not deductions.
Specifically, the respondent argues that the Department made a tax
[[Page 19020]] adjustment to both PP and ESP sales for the difference-
in-merchandise adjustment (difmer), which is incorrect because the
difmer is an independent statutory adjustment made to FMV to account
for differences in physical characteristics when a product sold in the
United States does not have an exact match with a product sold in the
home market. See 19 U.S.C. Sec. 1677b(a)(4)(C); 19 CFR 353.57.
According to the respondent, because the difmer is not an adjustment
for differences in circumstances of sale, pursuant to 19 U.S.C.
Sec. 1677(a)(4)(B), it should not affect the tax added to USP or FMV.
The respondent claims that the Department's tax adjustment for the
difmer is in conflict with the directive established in Daewoo
Electronics Co., Ltd. v. United States, 760 F. Supp. 200 (CIT 1991)
(Daewoo), in which it is stated that tax adjustments are appropriate
only to account for differences in the circumstances of sale. Thus, the
respondent claims, by making this inappropriate adjustment to the
difmer, the Department has increased the FMV unnecessarily, and thereby
increased any dumping margins in comparisons where the difmer was a
positive number.
Furthermore, the respondent does not agree with tax adjustments
that the Department made to FMV corresponding to adjustments that were
added to derive FMV. The respondent claims that tax adjustments made
for additions to FMV are in conflict with the Department's stated
policy of making tax adjustments only for costs which are deducted from
the USP on which the tax was calculated. Moreover, the respondent
argues that after the Department makes its tax adjustments
corresponding to deductions, USP and FMV no longer contain any residual
tax resulting from costs that were a part of the original tax base.
However, when the Department makes tax adjustments for costs that it
adds to FMV, these costs result in creating margins that the initial
adjustments were supposed to prevent. Thus, the respondent maintains,
the Department should only make adjustments for costs that are deducted
from the original tax base.
Department's Position: The tax methodology used in this
administrative review is the Department's current administrative
practice. See Federal-Mogul. In Federal-Mogul, the CIT rejected our
revised implementation of the Act's instructions on taxes and
prohibited us from applying a purely tax-neutral margin calculation
methodology. Accordingly, the Department changed its practice, as
instructed by the CIT, and adjusted USP for home market tax by
multiplying the home market tax rate by the USP at the point in the
chain of commerce of the U.S. merchandise that is analogous to the
point in the home market chain of commerce at which the foreign
government applies the home market consumption tax, and have added the
result to USP. In accordance with our tax methodology, we have also
deducted from the USP and FMV those portions of the respective home
market tax and the USP tax adjustments attributable to expenses
included in the foreign market and U.S. bases of the tax if those
expenses are later deducted to calculate FMV and USP. Specifically, we
are deducting the difference between home market selling expenses and
U.S. selling expenses, whether they are added to or deducted from FMV.
Furthermore, all adjustments to U.S. price are required to be
multiplied by the tax rate, including the difmer. These adjustments to
the foreign market tax and the U.S. price tax adjustment are necessary
to prevent the methodology for calculating the U.S. price tax
adjustment from creating antidumping duty margins where no margins
would exist if no taxes were levied upon foreign market sales.
The adjustment to avoid the margin creation effect is in accordance
with the Federal Circuit's holding that the application of the USP tax
adjustment under section 772(d)(1)(C) of the Tariff Act should not
create a dumping margin if pre-tax FMV does not exceed USP. See Zenith.
In addition, the Federal Circuit specifically has held that an
adjustment should be made to mitigate the impact of expenses that are
deducted from FMV and USP upon the USP tax adjustment and the amount of
tax included in FMV. See Daewoo. However, the mechanics of the
Department's adjustments to the U.S. and foreign market tax amounts as
described above are not identical to those suggested in Daewoo. With
regard to the respondent's concern that this methodology expands the
margins, the Federal Circuit in Zenith held that ``[b]y engaging in
dumping, the exporters themselves are responsible for the multiplier
effect. The multiplier effect does not create a dumping margin where
one does not already exist.'' See Zenith at 1581-82. For the foregoing
reasons, we have not amended our treatment of U.S. and home market
taxes for these final results.
Comment 3: The respondent argues that in calculating the FMV for
ESP sales, the program was incorrect in that the U.S. packing costs
were multiplied by the absolute amount of tax rather than multiplied by
the tax rate. In addition, the respondent claims that when the
Department recalculated the U.S. credit expense for ESP and PP sales,
the Department applied the credit rate to the unit price, without first
subtracting discounts. Thus, the respondent maintains that corrections
should be made to the FMV calculation for ESP sales and to the U.S.
credit expenses.
Department's Position: We agree with the respondent. We have
corrected our calculations for these inadvertent errors.
Comment 4: The respondent maintains that there were two different
tax rates in Canada during the review period: the FST, which was a
value-added tax that was included in the price of the subject
merchandise until December 31, 1990, and the GST, a goods and services
tax levied after January 1, 1991, which is not included in the price
charged to the customer. The respondent argues that in Federal-Mogul
Corp. v. United States, Slip Op. 94-186, 8-9 (CIT, Dec. 7, 1994), the
CIT determined that such home market taxes should only be applied to
the part of the review period in which the tax was in effect. The
respondent argues that to prevent the tax rate change from distorting
the dumping margin, the Department should use the tax rate that would
be applied to the U.S. sale in comparisons where the tax rates differ
because the sale in one market occurred in 1990 and the sale in the
other market occurred in 1991.
Department's Position: We agree that the home market tax rate
should be adjusted to account for the differences in tax rates during
1990 and 1991; however, we disagree with respondent's proposal to use
the tax rate that would be applied to the U.S. sale in comparisons
where the tax rates differ. To account for the differences in the tax
rates during the two periods, the Department instead derived a
weighted-average tax rate for the period of review based on the volume
of home market sales made during 1990 and 1991. In our calculations for
these final results, we have used the home market weighted-average tax
rate specific to the period of review for all comparisons of home
market and U.S. sales.
Final Results of Review
We determine the following dumping margin to exist for the period
September 1, 1990 through August 31, 1991:
------------------------------------------------------------------------
Margin
Manufacturer/exporter (percent)
------------------------------------------------------------------------
Allatt (Ingersoll-Rand)................................... 6.86
------------------------------------------------------------------------
The Department will instruct the Customs Service to assess
antidumping duties on all appropriate entries.
[[Page 19021]] Individual differences between USP and FMV may vary from
the percentages stated above. The Department will issue appraisement
instructions directly to the Customs Service.
Furthermore, the following deposit requirements will be effective
upon publication of these final results of administrative review for
all shipments of the subject merchandise, entered, or withdrawn from
warehouse, for consumption as provided by section 751(a)(1) of the
Tariff Act: (1) The cash deposit rate for the reviewed company will be
the rate as listed; (2) for previously reviewed or investigated
companies not listed above, 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 prior review, or
the original less-than-fair-value 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) cash
deposits for all other manufacturers or exporters will be 20.12
percent. This is the ``new shipper'' rate established during the first
final results published by the Department in the Federal Register on
February 16, 1982 (47 FR 6681). We have determined that this rate is
the appropriate rate, because we are unable to ascertain the ``all
others'' rate from the Treasury less-than-fair-value investigation.
These deposit requirements shall remain in effect until publication of
the final results of the next administrative review.
This notice also serves as a final reminder to importers of their
responsibility under 19 CFR 353.26 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 subsequent assessment
of double antidumping duties.
This notice also serves as the only reminder to parties subject to
administrative protective order (APO) of their responsibilities
concerning the return or destruction of proprietary information
disclosed under APO in accordance with 19 CFR 353.34(d). Failure to
comply is a violation of the APO.
This administrative review and notice are in accordance with
section 751(a)(1) of the Act (19 U.S.C. 1675(a)(1)) and 19 CFR 353.22.
Dated: April 7, 1995.
Susan G. Esserman,
Assistant Secretary for Import Administration.
[FR Doc. 95-9274 Filed 4-13-95; 8:45 am]
BILLING CODE 3510-DS-P
