E8-18028. Polyethylene Terephthalate Film, Sheet and Strip from India: Preliminary Results and Partial Rescission of Antidumping Duty Administrative Review

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

SUMMARY:

In response to timely requests for review by respondents, the Department of Commerce (the Department) is conducting an administrative review of the antidumping duty order on polyethylene terephtalate film, sheet and strip (PET Film) from India for the period of review (POR) July 1, 2006 through June 30, 2007. The review covers one respondent, Jindal Poly Film, Ltd. (Jindal).

The Department preliminarily determines that Jindal did not make sales at less than normal value (NV) during the POR. If these preliminary results are adopted in the final results of this administrative review, we will instruct U.S. Customs and Border Protection (CBP) to liquidate entries during the POR without regard to antidumping duties. The preliminary results are listed below in the section titled “Preliminary Results of Review.”

EFFECTIVE DATE:

August 6, 2008.

FOR FURTHER INFORMATION CONTACT:

Martha Douthit, AD/CVD Operations, Office 6, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW, Washington, DC 20230; telephone: [phone].

SUPPLEMENTARY INFORMATION:

Background

On July 1, 2002, the Department published in the Federal Register the antidumping duty order on PET Film from India. See Notice of Amended Final Antidumping Duty Determination of Sales at Less Than Fair Value and Antidumping Duty Order: Polyethylene Terephthalate Film, Sheet, and Strip from India, 67 FR 44175 (July 1, 20002). On July 3, 2007, the Department published in the Federal Register a notice of “Opportunity to Request Administrative Review.” See Antidumping or Countervailing Duty Order, Finding, or Suspended Investigation; Opportunity to Request Administrative Review, 72 FR 36420 (July 3, 2007). On July 30, 2007, the Department received timely requests for an administrative review from Jindal and MTZ Polyfilms, Ltd. (MTZ), manufacturers and exporters of PET film in India. On July 31, 2007, MTZ submitted a request for revocation of the antidumping duty order on certain PET Film produced and exported by MTZ.¹ The Department initiated an administrative review of the antidumping duty order on August 24, 2007 of Jindal and MTZ. See Initiation of Antidumping and Countervailing Duty Administrative Reviews and Requests for Revocation in Part, 72 FR 48613 (August 24, 2007). On September 14, 2007 the Department issued questionnaires to Jindal and MTZ.²

On October 19, 2007, Jindal submitted its section A response. On October 30, 2007, MTZ withdrew its request for review. On November 6, 2007, Jindal submitted sections B and C responses to the Department's questionnaire. On November 20, 2007, Jindal submitted its section D response. In accordance with section 751(a)(3)(A) of the Tariff Act of 1930, as amended (the Act), and 19 CFR 351.213(h)(2), on February 14, 2008, the Department extended the deadline for the completion of the preliminary results of this review. See Certain Polyethylene Terephthalate Film, Sheet, and Strip from India: Extension of Time Limit for Preliminary Results of Antidumping Duty Administrative Review, 73 FR 9768 (February 22, 2008).

On February 28, 2008, the Department issued a section A supplemental questionnaire to Jindal. On April 14, 2008, Jindal timely responded to the Department's section A supplemental questionnaire. On April 18, 2008, the Department issued sections B and C supplemental questionnaires. We received Jindal's responses to these supplementals on May 1, 2008. On May 20, 2008, the Department issued its section D supplemental questionnaire. On June 30, 2008, we received Jindal's response to the section D supplemental questionnaire.

Scope of the Order

The products covered by the order are all gauges of raw, pretreated or primed PET film, whether extruded or coextruded. Excluded are metalized films and other finished films that have had at least one of their surfaces modified by the application of a performance-enhancing resinous or inorganic layer of more than 0.00001 inches thick. Imports of PET Film are currently classifiable in the Harmonized Tariff Schedule of the United States (HTSUS) under item number 3920.62.90. Although the HTSUS subheadings are provided for the convenience and customs purposes, the written description of the scope of the order is dispositive.

Partial Rescission of Review

Pursuant to 19 CFR 351.213(d)(1), the Department will rescind an administrative review, in whole or in part, if a party that requested a review withdraws its request within 90 days of the date of publication of the notice of initiation of the requested administrative review. MTZ withdrew its request to be reviewed by the Department before the 90-day time period expired. MTZ was the only party to request an administrative review of its sales. Therefore, the Department is rescinding this administrative review with respect to MTZ.

Date of Sale

The Department's regulations at 19 CFR 351.401(i) state that “{i}n identifying the date of sale of the subject merchandise or foreign like product, the Secretary normally will use the date of invoice, as recorded in the exporter or producer's records kept in the ordinary course of business. However, the Secretary may use a date other than the date of invoice if the Secretary is satisfied that a different date better reflects the date on which the exporter or producer establishes the material terms of sale.” Jindal reported invoice date as the date of sale for sales in the home market and U.S. market. We examined Jindal's responses to the Department's questionnaire and preliminarily determine that invoice date is the appropriate date of Jindal's sales under review.

Comparisons to Normal Value

To determine whether Jindal's sales of subject merchandise to the U.S. were made at less than normal value (NV), we compared the export price (EP) of individual U.S. sales to the weighted average NV of sales of the foreign like product, as described in the “Export Price” and “Normal Value” sections of this notice in accordance with section 777A(d)(2) of the Tariff Act of 1930 (“the Act”).

Product Comparisons

In accordance with section 771(16) of the Act, we considered all products produced by Jindal that are covered by the description in the “Scope of the Order” section above, and that were sold in the home market during the POR, to be foreign like products for the purposes of determining appropriate product comparison to U.S. sales. Pursuant to 19 CFR 351.414(e)(2), we compared U.S. sales made by Jindal to sales made in the home market within the contemporaneous window period. Where there were no sales of identical merchandise in the comparison market made in the ordinary course of trade to compare to U.S. sales, the Department compared U.S. sales to sales of the most similar foreign like product made in the ordinary course of trade. In making the product comparison, the Department used the physical characteristics of the subject merchandise to match foreign like products to U.S. sales, according to specification (type/grade), thickness, microns, and surface. See Analysis Memorandum for Jindal Poly Film Limited for Preliminary Results of the Antidumping Duty Administrative Review of Polyethylene Terephthalate Film Sheet and Strip from India; 2006-2007 (Analysis's Memorandum), concurrently with this notice and on file in the Central Records Unit (CRU), room 1117, of the main Commerce building.

Export Price

In accordance with section 772(a) of the Act, we used export price (EP) in this review because the subject merchandise was sold prior to importation to unaffiliated purchasers in the United States, and constructed export price (CEP) methodology was not warranted based on the facts on the record. Jindal reported its U.S. sales on a Cost, Insurance, and Freight (CIF) basis. As such, in accordance with sections 772(a) and 772(c) of the Act, we calculated EP by using the prices that Jindal sold to its unaffiliated purchaser in the United States. We made deductions from the starting price, where appropriate, for foreign movement expenses, brokerage and handling, insurance, international freight, and marine insurance under section 772(c) of the Act. In accordance with section 772(c)(1)(C) of the Act, we have increased EP to account for countervailing duties attributable to export subsidies.

Normal Value

In accordance with section 773(a)(1)(B)(i) of the Act, we have based NV on the price at which the foreign like product was first sold for consumption in the comparison market, in the usual commercial quantities, in the ordinary course of trade, and, to the extent practicable, at the same level of trade (LOT) as the EP sale. See “Level of Trade” section below. After testing comparison market viability and whether comparison market sales were at below-cost prices, we calculated NV for Jindal as discussed in the following sections.

A. Home Market Viability

In order to determine whether there was a sufficient volume of sales in the home market to serve as a viable basis for calculating normal value (NV) (i.e., the aggregate volume of home market sales of the foreign like product is five percent or more of the aggregate volume of U.S. sales), we compared the volume of Jindal's home market sales of the foreign like product during the POR to the volume of U.S. sales of subject merchandise during the POR. See section 773(a)(1)(C) of the Act. Based on this comparison, we determined that Jindal's quantity of sales in the home market exceeded five percent of its sales of PET Film to the United States. Thus, in accordance with 19 CFR 351.404(b), Jindal's volume of sales in the home market during the POR was sufficient to serve as a viable basis for calculating NV.

B. Cost of Production Analysis

In the most recently completed administrative review of PET Film from India, the Department determined that Jindal sold certain foreign like product at prices below the cost of production and the Department excluded such sales from the calculation of NV. See Certain Polyethylene Terephthalate Film, Sheet and Strip from India: Final Results of Antidumping Duty Administrative Review, 70 FR 8072 (February 17, 2005). As a result, in accordance with section 773(b)(2)(A)(ii) of the Act, the Department determined that there are reasonable grounds to believe or suspect that Jindal sold foreign like product at prices below the cost of production during the instant POR. We have relied upon Jindal's cost of production (COP) and constructed value (CV) information from Jindal's submissions, except in the instances where the data presented was not appropriately quantified or valued. See Analysis's Memorandum. Accordingly, the Department required that Jindal provide a response to section D of the questionnaire. Thus, in accordance with section 773(b)(2)(A)(ii) of the Act, there are reasonable grounds to believe or suspect that during the POR, Jindal sold foreign like product at prices below the cost of production of the subject merchandise.

1. Calculation of Cost of Production

We have revised Jindal's consolidated financial expense rate to exclude interest income related to sales, dividends from investments, and profit on sales of investments. As a result, the financial expense rate was adjusted. See Calculation Memorandum for Jindal Poly Film Limited for Preliminary Results of the Antidumping Duty Administrative Review of Polyethylene Terephthalate Film Sheet and Strip from India; 2006-2007.

2. Test of Comparison Market Sales Prices

To determine whether sales were made at prices below the COP, on a product-specific basis, the Department compared Jindal's adjusted weighted-average COP to the prices of its home market sales of the foreign like product, as required under section 773(b)(3) of the Act. In accordance with sections 773(b)(1)(A) and (B) of the Act, in determining whether to disregard home market sales made at prices less than the COP, we examined whether such sales were made (1) within an extended period of time in substantial quantities, and (2) were not at prices which permit recovery of all costs within a reasonable period of time. The prices, here, were inclusive of billing adjustments and exclusive of any applicable movement charges, discounts and rebates, direct and indirect selling expenses, and packing expenses, revised where appropriate.

3. Results of the COP Test

Pursuant to section 773(b)(2)(C) of the Act, where less than 20 percent of a respondent's home market sales of a given product are at prices below the COP, the Department does not disregard any below cost of sales of that product, because the Department determines that in such instances the below cost of sales were not made and in “substantial quantities.” Where 20 percent or more of a respondent's sales of a given product are at prices below the COP, the Department disregards the below cost sales because they: (1) were in “substantial quantities,” in accordance with sections 773(b)(2)(B) and (C) of the Act; and (2) based on our comparison of home market prices to the weighted-average COPs for the POR, the below cost sales were at prices which would not permit the recovery of all costs within a reasonable period of time, in accordance with section 773(b)(2)(D) of the Act. Based on the results of our test, we found that, for certain products, more than 20 percent of Jindal's home market sales were at prices less than the COP. In addition, such sales did not provide for the recovery of costs within a reasonable period of time. We therefore excluded these sales and used the remaining sales of the foreign like product in the ordinary course of trade as the basis for determining NV, in accordance with section 773(b)(1) of the Act.

C. Calculation of Normal Value Based on Comparison Market Prices

In accordance with section 773(a)(1)(B)(i) of the Act, we based NV on the price at which the foreign like product was first sold for consumption in the home market, in the usual commercial quantities, in the ordinary course of trade, and, to the extent practicable, at the same level of trade as the export price or constructed export price. Pursuant to section 773(a)(6)(B)(ii) of the Act, we made deductions from normal value for movement expenses, including domestic inland freight, and domestic brokerage, as appropriate. In accordance with section 773(a)(6)(C)(iii) of the Act and 19 CFR 351.410(c) and 19 CFR 351.410(d), we deducted home market credit and added U.S. credit. Jindal reported that it did not pay commissions on U.S. sales, and that it paid commissions in the home market. Therefore, we made the appropriate adjustment for commissions paid in the comparison market pursuant to section 773(a)(6)(C)(iii) of the Act and 19 CFR 351.410(c). In accordance with 19 CFR 351.410(e), we made adjustments for indirect selling expenses incurred on comparison market or U.S. sales where commissions were granted on sales in one market but not in the other, the commission offset. Specifically, where commissions are incurred in one market, but not in the other, we will limit the amount of such allowance to the amount of either the selling expenses incurred in the one market or the commissions allowed in the other market, whichever is less. In accordance with sections 773(a)(6)(A) and (B)(i) of the Act, we deducted home market packing and added U.S. packing costs. We made an adjustment for other direct selling expenses, such as bank charges, because Jindal's supplemental responses demonstrate that these expenses consist of additional direct selling expenses that have not already been accounted for elsewhere.

Level of Trade

In accordance with section 773(a)(1)(B)(i) of the Act, to the extent practicable, the Department determines NV based on sales in the comparison market at the same level of trade (LOT) as the EP or CEP sales in the U.S. market (Jindal had only EP sales in the U.S. market). The NV LOT is based on the starting price of the sales in the comparison market. Where NV is based on constructed value (CV), the Department determines the NV LOT based on the LOT of the sales from which the Department derives selling, general, and administrative expenses, and profit for CV, where possible. See Notice of Preliminary Determination of Sales at Less than Fair Value and Postponement of Final Determination: Fresh Atlantic Salmon From Chile, 63 FR 2664-2670 (January 16, 1998)(unchanged in final determination). For EP sales, the U.S LOT is based on the starting price of the sales to the U.S. market.

To determine whether NV sales are at a different LOT than EP sales, the Department examines stages in the marketing process and level of selling function along the chain of distribution between the producer and the unaffiliated customer. See 19 CFR 412(c)(2). Substantial differences in selling activities are a necessary, but not sufficient, condition for determining that there is a difference in the stages of marketing. See id.; see also Notice of Final Determination of Sales at Less Than Fair Value: Certain Cut-to-Length Carbon Steel Plate From South Africa, 62 FR 61731, 61732 (November 19, 1997). When the Department is unable to match U.S. sales to foreign like product sales in the comparison market at the same LOT as the EP sale, the Department may compare the U.S. sales to sales at a different LOT in the comparison market. In comparing EP sales at a different LOT in the comparison market, where the differences affect price comparability, as manifested by a pattern of consistent price differences between comparison market sales at the NV LOT and comparison market at the LOT of the export transaction, the Department makes an LOT adjustment under section 773(a)(7)(A) of the Act. Because Jindal had only EP sales in the U.S. market, it is not necessary to apply the CEP methodology.

Because Jindal's U.S. sales during this POR are made through one single distribution channel, Jindal to an unaffiliated trading company, we preliminarily determine that one LOT exists in the U.S. market. For home market sales, Jindal reported two categories of customers through two channels of distribution, end users and trading companies. We reviewed information from Jindal's questionnaire responses regarding the marketing stages for the reported U.S. and home market sales, including a description of the selling activities performed for each channel of distribution. See Exhibit A-Questionnaire Response. We compared the selling functions performed by Jindal for the two home market distribution channels and found that Jindal performed similar selling activities in the home market for its customers in both channels of distribution. See Jindal's Analysis Memorandum dated July 30, 2008. We preliminarily determined that Jindal sold foreign like product in the home market at one LOT. We noted that the record of this review indicates that Jindal performs essentially the same sales functions for all its home market and U.S. sales. Thus, we determine that Jindal's home market sales were made at the same LOT as its U.S. sales. See Jindal's Analysis Memorandum dated July 30, 2008. Therefore, the Department preliminarily determines that no level of trade adjustment is necessary for Jindal.

Currency Conversion

In accordance with section 773A(a) of the Act, we made currency conversions based on the official exchange rates in effect on the dates of the U.S. sales as certified by the Federal Reserve Bank of New York.

Preliminary Results of Review

As a result of this review, we preliminarily find that the following weighted-average dumping margin exists for the period July 1, 2006 through June 30, 2007:

Manufacturer/Exporter	Margin (percent)
Jindal Poly Films Limited (Jindal)	0.47 (de minimis)

Cash Deposit Requirements

The following cash deposit requirements will be effective for all shipments of the subject merchandise entered, or withdrawn from warehouse, for consumption on or after the publication date of the final results of this administrative review, as provided by section 751(a)(2)(C) of the Act: (1) the cash deposit rate for the company listed above will be that established in the final results of this review, except if the rate is less than 0.50 percent, and therefore, de minimis within the meaning of 19 CFR 351.106(c)(1), in which case the cash deposit rate will be zero; (2) for previously reviewed or investigated companies not participating in this review, 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, or the original less than fair value (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 or exporters will continue to be 5.71 percent, the all-others rate made effective by the LTFV investigation, adjusted for the export subsidy rate found in the companion countervailing duty investigation. These cash deposit requirements, when imposed, shall remain in effect until further notice.

Assessment Rates

Upon publication of the final results of this review, the Department shall determine, and CBP shall assess, antidumping duties on all appropriate entries. Pursuant to 19 CFR 351.212(b)(1), the Department calculates an assessment rate for each importer of the subject merchandise for each respondent. In accordance with 19 CFR 351.212(b)(1), we will calculate importer-specific assessment rates on the basis of the ratio of the total amount of antidumping duties calculated for the examined sales and the total entered value of the examined sales. For the period July 1, 2006 through June 30, 2007, we preliminarily determine the antidumping duty margin to be 0.47 percent ad valorem. This rate is less than 0.5 percent. Consequently, if these preliminary results are adopted in our final results of this review, the Department will instruct CBP to liquidate shipments of PET Film by Jindal entered or withdrawn from warehouse, for consumption from July 1, 2006 through June 30, 2007, without regard to antidumping duties. See 19 CFR 351.106(c)(2). The Department intends to issue appropriate assessment instructions directly to CBP 15 days after the date of publication of the final results of this review.

The Department clarified its “automatic assessment” regulation on May 6, 2003. See Antidumping and Countervailing Duty Proceedings: Assessment of Antidumping Duties, 68 FR 23954 (May 6, 2003) (Assessment Policy Notice). This clarification applies to entries of subject merchandise during the POR produced by any company included in the final results of review for which the reviewed company did not know that the merchandise it sold to the intermediary (e.g., a reseller, trading company, or exporter) was destined for the United States. In such instances, the Department will instruct CBP to liquidate un-reviewed entries at the all others rate if there is no rate for the intermediary involved in the transaction. See Assessment Policy Notice for a full discussion of this clarification.

For MTZ, for which this administrative review is rescinded, antidumping duties shall be assessed at rates equal to the cash deposit of estimated antidumping duties required at the time of entry, or withdrawal from warehouse, for consumption, in accordance with 19 CFR 351.212(c)(1)(I). The Department will issue appropriate assessment instructions to CBP 15 days after the publication of this notice.

Disclosure and Public Hearing

We will disclose the calculations used in our analysis to parties to this segment of the proceeding within five days of the public announcement of this notice. See 19 CFR 351.224(b). Interested parties who wish to request a hearing, or to participate if one is requested, must submit a written request to the Assistant Secretary for Import Administration, Room 1117, within 30 days of the date of publication of this notice. Requests should contain: (1) the party's name, address and telephone number; (2) the number of participants; and (3) a list of issues to be discussed. See 19 CFR 351.310(c).

Pursuant to 19 CFR 351.309, interested parties may submit written comments in response to these preliminary results. Unless the time period is extended by the Department, case briefs are to be submitted within 30 days after the date of publication of this notice in the Federal Register. See 19 CFR 351.309(c). Rebuttal briefs, which must be limited to arguments raised in case briefs, are to be submitted no later than five days after the time limit for filing case briefs. See 19 CFR 351.309(d). Parties who submit arguments in this proceeding are requested to submit with the argument: (1) a statement of the issues; (2) a brief summary of the argument; and (3) a table of authorities cited. Further, we request that parties submitting written comments provide the Department with a diskette containing an electronic copy of the public version of such comments.

Case and rebuttal briefs must be served on interested parties, in accordance with 19 CFR 351.303(f).

Unless extended, the Department will issue the final results of this administrative review, including the results of its analysis of issues raised in any written briefs, not later than 120 days after the date of publication of this notice, pursuant to section 751(a)(3)(A) of the Act.

Notification to Importers

This notice serves as a preliminary reminder to importers of their responsibility under 19 CFR 351.402(f)(2) 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.

The preliminary results of this administrative review and this notice are issued and published in accordance with sections 751(a)(1) and 777(i)(1) of the Act.

Dated: July 30, 2008.

David M. Spooner,

Assistant Secretary for Import Administration.

Footnotes

1.  As discussed infra, because the Department is rescinding the administrative review of MTZ, based upon MTZ's timely withdrawal of its review request, there is no review pertaining to MTZ in which to examine MTZ's revocation from the antidumping duty order.

2.  Section A of the questionnaire requests general information concerning a company's corporate structure and business practices, the merchandise under investigation that it sells, and the manner in which it sells that merchandise in all of its markets. Section B requests a complete listing all home market sales or if the home market is not viable, of sales in the most appropriate third-country market (this section is not applicable to respondents in non-market economy cases). Section C requests a complete listing of U.S. sales. Section D requests information of the cost of production of the foreign like product and the constructed value of merchandise under investigation.