[Federal Register Volume 64, Number 164 (Wednesday, August 25, 1999)]
[Notices]
[Pages 46350-46354]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-22083]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-533-810]
Stainless Steel Bar from India; Preliminary Results of New
Shipper Review
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
ACTION: Notice of preliminary results of new shipper review of
stainless steel bar from India.
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SUMMARY: In response to requests from Jyoti Steel Industries, Parekh
Bright Bars Pvt. Ltd., and Shah Alloys Ltd., the Department of Commerce
is conducting a new shipper review of the antidumping duty order on
stainless steel bar from India. This review covers these companies'
sales of stainless steel bar to the United States during the period
February 1, 1998 through July 31, 1998.
We have preliminarily determined that, during the period of review,
Parekh Bright Bars Pvt. Ltd. has made sales of subject merchandise
below normal value and that Jyoti Steel Industries and Shah Alloys Ltd.
have not made sales of subject merchandise below normal value. If these
preliminary results are adopted in our final results, we will instruct
the Customs Service not to assess antidumping duties.
Interested parties are invited to comment on these preliminary
results.
EFFECTIVE DATE: August 25, 1999.
FOR FURTHER INFORMATION CONTACT: Stephanie Hoffman, James Breeden, or
Melani Miller, Office 1, AD/CVD Enforcement, Import Administration,
International Trade Administration, U.S. Department of Commerce, 14th
Street and Constitution Avenue, N.W., Washington D.C. 20230; telephone
(202) 482-4198, (202) 482-1174, or (202) 482-0116, 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. In addition, all
references to the Department of Commerce's (``the Department's'')
regulations are to 19 CFR Part 351 (April 1998).
Background
On August 18 and August 31, 1998, the Department received requests
from Jyoti Steel Industries (``Jyoti''), Parekh Bright Bars Pvt. Ltd.
(``Parekh''), and Shah Alloys Ltd. (``Shah'') to conduct a new shipper
review of the antidumping duty order on stainless steel bar from India.
Our notice initiating the new shipper review of these companies was
published in the Federal Register, on October 30, 1998 (63 FR 58367).
The period covered by this review is February 1, 1998, through July 31,
1998.
Scope of Review
Imports covered by this review 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
[[Page 46351]]
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 this order is currently classifiable under
subheadings 7222.10.0005, 7222.10.0050, 7222.20.0005, 7222.20.0045,
7222.20.0075, and 7222.30.0000 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 this order is dispositive.
Use of Facts Otherwise Available
Parekh failed to respond to the Department's supplemental
questionnaire and request for cost information (i.e., Section D of the
original questionnaire). Section 776(a)(2)(A) of the Act provides for
the use of facts available when an interested party withholds
information that has been requested by the Department. As described in
more detail below, Parekh has failed to provide information explicitly
requested by the Department; therefore, we must resort to the facts
otherwise available.
In using the facts otherwise available, however, pursuant to
section 782(e) of the Act, the Department must determine whether
information Parekh already submitted for the record of this review may
be used in calculating a dumping margin. Section 782(e) of the Act
provides that the Department shall not decline to consider information
that is submitted by an interested party and that is necessary to the
determination but which 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.
Parekh did respond to the Department's original questionnaire and a
supplemental questionnaire. However, Parekh failed to respond to a
second supplemental questionnaire requesting clarification of deficient
information in Parekh's previous responses. Moreover, as explained in
the ``Normal Value'' section of this notice below, the Department has
preliminarily determined to base normal value on constructed value
(``CV'') for all three respondents. Parekh failed to provide requested
cost information necessary for the calculation of CV. Therefore, we
find the information already on the record so incomplete that it cannot
serve as a reliable basis for calculating a dumping margin.
Consequently, we are not using any of the information submitted by
Parekh for our preliminary results and are relying instead on facts
available.
In selecting from among the facts otherwise available, section
776(b) of the Act provides that the Department may use an inference
that is adverse to the interests of a party if it determines that party
has failed to cooperate to the best of its ability. On May 18, 1999,
the Department issued a second supplemental questionnaire to Parekh.
The Department did not receive a response to this questionnaire, nor
did it receive a request from Parekh for an extension of time to
respond. The Department made several efforts to contact Parekh
regarding the status of its questionnaire response, but was unable to
reach any of Parekh's personnel. Consistent with section 782(d) of the
Act, the Department sent a letter to Parekh on July 16, 1999, advising
the company that its lack of cooperation may result in the use of facts
otherwise available. Parekh did not respond to this letter.
Additionally, in the Department's May 18, 1999, letter to Parekh, the
Department informed Parekh that if it chose not to offer evidence
demonstrating why a particular market situation does not exist in the
home market, it should submit a response to section D of the original
questionnaire (i.e., cost information). Parekh did not submit any
information concerning the particular market situation, nor did it
submit cost information.
The Department finds that by not providing necessary information
specifically requested by the Department and discontinuing its
participation in this review, Parekh has failed to cooperate to the
best of its ability. Therefore, in selecting facts available, the
Department determines that an adverse inference is warranted. As
adverse facts available, we have preliminarily assigned a margin of
21.02 percent to Parekh's sales of the subject merchandise.
This margin, calculated for sales by Mukand Limited during the
investigation, represents the highest weighted-average margin
determined for any firm during any segment of this proceeding.
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 simply that the Department will satisfy itself
that the secondary information to be used has probative value (see,
H.R. Doc. 316, Vol. 1, 103d Cong., 2d Sess. 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)).
As discussed above, it is not necessary to question the reliability
of a calculated margin from a prior segment of the proceeding. Further,
there are no
[[Page 46352]]
circumstances indicating that this margin is inappropriate as facts
available. Therefore, we preliminarily find that the 21.02 percent rate
is corroborated.
United States Price
In calculating the price to the United States, we used export price
(``EP''), in accordance with section 772(a) of the Act, because the
subject merchandise was sold directly to the first unaffiliated
purchaser in the United States prior to importation into the United
States and use of constructed export price was not otherwise indicated.
We calculated EP based on the CIF price to the United States. In
accordance with section 772(c)(2) of the Act, we made deductions, as
appropriate, for foreign inland freight, international freight, marine
insurance, and brokerage and handling.
Normal Value
Viability: In order to determine whether Shah, Jyoti, and Parekh
made a sufficient volume of sales in the home market to serve as a
viable basis for calculating normal value (``NV''), we compared the
respondents'' volume of home market sales of the foreign like product
to the volume of U.S. sales of the subject merchandise in accordance
with section 773(a) of the Act. We found that each respondent's
aggregate volume of home market sales of the foreign like product was
greater than five percent of its respective aggregate volume of U.S.
sales of the subject merchandise. Even though this result would
normally indicate that NV should be based on home market sales, as
explained below, information on the record indicates that a
``particular market situation'' exists in the home market that renders
the otherwise viable home market an inappropriate basis for NV.
In a letter dated February 3, 1999, the petitioners stated that the
dates of the home market sale reported by Parekh and Shah were outside
the period of review. Lacking home market sales in the period of
review, the petitioners argued that both Parekh's and Shah's home
markets were not viable.
In considering this argument, the Department notes that section
773(a)(1)(A) of the Act states that NV shall be based upon the price at
which the foreign like product is first sold in the usual commercial
quantities and in the ordinary course of trade ``at a time reasonably
corresponding to the time of the sale used to determine the export
price or constructed export price'' (emphasis added). Neither the
Department's regulations nor the SAA offer any further clarification of
the time period the Department should examine in determining market
viability.
However, the Department has developed a methodology for determining
contemporaneity for purposes of comparing NV with export price or
constructed export price. The Department's regulations at 19 CFR
351.414(e)(2) provide that if there are no sales of the foreign like
product in the month of the U.S. sale under consideration, the
Secretary will select as the contemporaneous month the most recent of
the three months prior to the month of the U.S. sale, and if there are
no sales of the foreign like product during any of these months, the
earlier of the two months following the month of the U.S. sale in which
there was a sale of the foreign like product. This methodology commonly
is referred to as the 90/60-day contemporaneity window.
Although both Shah and Parekh's home market sales were made outside
the period of review, we have preliminarily determined that, since both
respondents' home market sales were within the 90/60-day
contemporaneity window they would be used for comparison purposes.
Because the time of these home market sales ``reasonably corresponds''
to the time of the sales used to establish EP, we have examined whether
these sales constitute a viable home market for the purpose of
determining NV.
Particular Market Situation: On March 8, 1999, the petitioners
alleged that Shah, Jyoti, and Parekh made home market sales identical
to their U.S. sales, after making their U.S. sales, in order to
artificially establish zero dumping margins. Consequently, the
petitioners alleged that the home market constitutes a fictitious
market within meaning of section 773(a)(2), and that the Department
should not use the home market sales as the basis for normal value. In
the alternative, the petitioners claimed that a particular market
situation within the meaning of section 773(a)(1)(C)(iii) exists in the
home market because all three respondents made a single sale in the
home market that constituted five percent or more of sales to the U.S.
market. The petitioners asserted that in light of this particular
market situation, the Department was precluded from using respondents'
home market sales for calculating normal value. See May 18, 1999,
Memorandum to Laurie Parkhill, ``Home Market Viability, Fictitious
Market, and Particular Market Situation Allegations'' (``May 18, 1999
Memo'') and June 24, 1999, Memorandum to Richard Moreland, ``Particular
Market Situation'' (``June 24, 1999 Memo'') for a detailed discussion
of these issues.
In considering the petitioners' fictitious market allegation, we
have preliminarily determined that evidence on the record does not
support a finding that Shah, Jyoti, or Parekh established a fictitious
market. It is the Department's practice in proceedings involving
fictitious market allegations to require that the petitioners provide
some evidence on the record that establishes the occurrence of
different movements in prices at which different forms of the foreign
like product are sold before pursuing an allegation. See, e.g.,
Tubeless Steel Disc Wheels from Brazil; Final Results of Antidumping
Duty Administrative Review, 56 FR 14085 (April 5, 1991) (``* * * before
pursing a [fictitious market] allegation, the Department must have
sufficient evidence that there have been different movements in the
prices at which different forms of the subject merchandise have been
sold in the home market.''). The petitioners have not provided such
evidence and, therefore, we have not pursued an inquiry into the
petitioners' fictitious market allegations. See May 18, 1999 Memo.
With respect to the petitioners' allegation of a particular market
situation, we preliminarily determine that a particular market
situation does exist for Shah, Jyoti, and Parekh. According to section
773(a)(1) of the Act, the Department may decline to use home market
sales for determining normal value where ``the particular market
situation in the exporting country does not permit a proper comparison
with the export price or constructed export price.'' The SAA further
discusses particular market situations, stating that a particular
market situation may exist where a single sale in the home market
constitutes five percent of sales to the United States. SAA at 152.
In the instant review, we find that each respondent had a single
sale in the home market which constituted more than five percent of the
aggregate volume of its U.S. sales. In addition, we note that the
subject merchandise is a commodity-type product that can easily be
distinguished from a large capital good, such as a printing press,
where one home market sale made during the period of review might be a
normal situation. We further note that although we gave the respondents
an opportunity to offer information demonstrating why a particular
market situation does not exist in the home market, Jyoti and Shah (the
two respondents who chose to
[[Page 46353]]
submit information) 1 failed to submit information
demonstrating why these single, isolated sales in the home market were
indicative of actual home market prices of the foreign like product.
Accordingly, we preliminarily determine that the respondents' home
markets should not be used for purposes of calculating normal value.
Moreover, because none of the respondents have made sales to third
countries during the POR, we determine that CV is the appropriate basis
for normal value. See May 18, 1999 Memo and June 24, 1999 Memo for a
more detailed analysis.
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\1\ Parekh did not submit any information concerning the
particular market situation issue.
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Constructed Value: In accordance with section 773(e)(1) of the Act,
we calculated CV for Shah and Jyoti based on the sum of the respective
respondent's cost of materials (net of import duty credits earned on
its U.S. sale), labor, overhead, G&A, profit, and U.S. packing costs.
(As discussed in the ``Facts Available'' section above, we could not
calculate CV for Parekh because it failed to respond to our request for
necessary cost information.) With respect to G&A, we used the amounts
reported by Shah and Jyoti in their 1997-1998 audited financial
statements, and, in accordance with our normal practice, adjusted these
amounts to capture those expenses associated with the production of the
subject merchandise.
With respect to amounts for profits, section 773(e)(2)(A) of the
Act states that CV should include an amount ``incurred and realized by
the specific exporter or producer being examined in the investigation
or review * * * for profits, in connection with the production and sale
of a foreign like product, in the ordinary course of trade, for
consumption in the foreign country * * *'' In this case, the actual
amounts incurred and realized by Shah and Jyoti for profits, in
connection with their sales of the foreign like product, are based on
Shah and Jyoti's respective single home market sales. However, as
discussed above, we have determined that these home market sales are
not an appropriate basis for normal value because a particular market
situation exists. Accordingly, these sales are not an appropriate basis
for calculating CV profit. Therefore, as no other actual profit amounts
realized by Shah and Jyoti in connection with sales of the foreign like
product are available, we have used an alternative calculation method.
The decision to use an alternative method to determine profit and
the selection of the appropriate method depends on the facts of each
case. Therefore, the decision to use alternative CV profit data must be
made on a case-by-case basis. Based on the facts of the present case,
in accordance with section 773(e)(2)(B)(i) of the Act, we calculated
the respondents' respective profit based on the respondents' sale of
merchandise that is in the same general category of products as the
subject merchandise. That is, we calculated profit based on the
respondents' respective total sales of all merchandise produced, as
reflected in the companies' 1997-1998 audited financial statements.
Preliminary Results of Review
As a result of our comparison of EP and NV, we preliminarily
determine the following weighted-average dumping margins:
------------------------------------------------------------------------
Manufacturer/Exporter Period Margin (percent)
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Jyoti............................... 2/1/98-7/31/98 0.00
Parekh.............................. 2/1/98-7/31/98 21.02
Shah................................ 2/1/98-7/31/98 0.00
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Parties to the proceeding may request disclosure within five days
of the date of publication of this notice. Any interested party may
request a hearing within 30 days of publication. Any hearing, if
requested, will be held 2 days after the deadline for filing rebuttal
briefs unless the Secretary alters the date. 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 no later than 5 days after the deadline for
filing case briefs. The Department will issue the final results of this
new shipper review, which will include the results of its analysis of
issues raised in any such comments, within 90 days of issuing these
preliminary results.
Upon completion of this new shipper review, the Department shall
determine, and the Customs Service shall assess, antidumping duties on
all appropriate entries. We have calculated an importer-specific duty
assessment rate based on the ratio of the total amount of antidumping
duties calculated for the examined sales made to the total entered
value of the examined sales. In order to estimate the entered value, we
subtracted international movement expenses (e.g., international
freight) from the gross sales value. This rate will be assessed
uniformly on all entries made during the POR. The Department will issue
appraisement instructions directly to the Customs Service.
The following deposit requirement will be effective upon
publication of the final results of this new shipper 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 companies will be the rates 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 less-
than-fair-value (``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
[[Page 46354]]
occurred and the subsequent assessment of double antidumping duties.
This new shipper review and notice are in accordance with sections
751(a)(2)(B) and 777(i)(1) of the Act.
Dated: August 18, 1999.
Bernard Carreau,
Acting Assistant Secretary for Import Administration.
[FR Doc. 99-22083 Filed 8-24-99; 8:45 am]
BILLING CODE 3510-DS-P
