[Federal Register Volume 60, Number 38 (Monday, February 27, 1995)]
[Notices]
[Pages 10545-10550]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-4723]
-----------------------------------------------------------------------
DEPARTMENT OF COMMERCE
[A-533-811]
Notice of Final Determination of Sales at Less Than Fair Value:
Certain Carbon Steel Butt-Weld Pipe Fittings From India
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
EFFECTIVE DATE: February 27, 1995.
FOR FURTHER INFORMATION CONTACT: Sue Strumbel, Office of Countervailing
Investigations, Import Administration, International Trade
Administration, U.S. Department of Commerce, 14th Street and
Constitution Avenue, NW, Washington, DC 20230; telephone (202) 482-
1442.
Final Determination
We determine that certain carbon steel butt-weld pipe fittings from
India are being sold in the United States at less than fair value, as
provided in section 735 of the Tariff Act of 1930, as amended (the
``Act''). The estimated margins shown in the ``Suspension of
Liquidation'' section of this notice.
Case History
Since the publication of the preliminary determination in the
Federal Register on October 4, 1994 (59 FR 50562), the following events
have occurred:
On October 5, 1994, Sivanandha Pipe Fittings Ltd. (Sivanandha) and
Karmen Steels of India (Karmen), requested that the final determination
in this case be postponed. On November 14, 1994, the Department
published in the Federal Register a notice postponing the publication
of the final determination in this case until February 16, 1995 (59 FR
56461).
From October 31 to November 5, 1994, we verified Sivanandha's and
Karmen's sales information in Madras, India.
We received case and rebuttal briefs on January 23 and January 30,
1995, respectively, from petitioner and respondents.
Scope of the Investigation
The products covered by this investigation are certain carbon steel
butt-weld pipe fittings having an inside diameter of less than fourteen
inches (355 millimeters), imported in either finished or unfinished
condition. Pipe fittings are formed or forged steel products used to
join pipe sections in piping systems where conditions require permanent
welded connections, as distinguished from fittings based on other
methods of fastening (e.g., threaded, grooved, or bolted fittings).
Butt-weld fittings come in a variety of shapes which include
``elbows,'' ``tees,'' ``caps,'' and ``reducers.'' The edges of finished
pipe fittings are beveled, so that when a fitting is placed against the
end of a pipe (the ends of which have also been beveled), a shallow
channel is created to accommodate the ``bead'' of the weld which joins
the fitting to the pipe. These pipe fittings are currently classifiable
under subheading 7307.93.3000 of the Harmonized Tariff Schedule of the
United States (HTSUS). Although the HTSUS subheading is
[[Page 10546]] provided for convenience and customs purposes, our
written description of the scope of this investigation is dispositive.
Karmen's Exports of Refurbished Pipe Fittings
Karmen reported that it has an arrangement with a Singaporean
company, under which the Singaporean company supplies Karmen with rusty
pipe fittings. Karmen reconditions and refurbishes these pipe fittings
and sends them to the Singaporean company's U.S. customer. Petitioner
and Karmen agree with the Department's preliminary determination that
these ``sales'' of refurbished pipe fittings are not subject to this
investigation.
For purposes of this final determination, we are continuing to
treat these ``sales'' as outside the scope of our investigation and,
hence, not subject to any potential antidumping order on butt-weld pipe
fittings from India. Karmen essentially performs a tolling service for
its Singaporean customer. Moreover, Karmen does not ``substantially
transform'' these pipe fittings.
Substantial transformation generally refers to a degree of
processing or manufacturing resulting in a new and different article.
Through that transformation, the new article becomes a product of the
country in which it was processed or manufactured. See Cold-Rolled
Steel from Argentina, 58 FR 37062, 37065 (1993) (Appendix I). Commerce
makes these determinations on a case-by-case-basis. See, e.g., Certain
Fresh Cut Flowers from Colombia, 55 FR 20291, 20299 (1990); Limousines
from Canada, 55 FR 11036, 11040 (1990).
In determining whether Karmen substantially transformed these pipe
fittings, we examined whether the degree of processing or manufacturing
resulted in a new and different article. Karmen receives rusty pipe
fittings from Singapore, it removes the rust, paints the fitting, and
forwards it to the Singaporean company's customer. We do not consider
this refurbishing process as substantially transforming the subject
merchandise because it remains a pipe fitting after refurbishment.
Therefore, because Karmen does not substantially transform the
merchandise, we do not consider it as falling within the scope of this
proceeding.
Period of Investigation
The period of investigation (POI) is September 1, 1993 through
February 28, 1994, for Sivanandha and August 1, 1993 through February
28, 1994, for Karmen. The preliminary determination in this
investigation provides an explanation regarding the different POIs for
each company.
Such or Similar Comparisons
For Sivanandha, in making our fair value comparisons, we first
compared merchandise identical in all respects in accordance with the
Department's standard methodology. If no identical merchandise was
sold, we compared the most similar merchandise, as determined by the
model-matching criteria contained in Appendix V of the questionnaire
(Appendix V) (on file in Room B-099 of the main building of the
Department of Commerce (Public File)). For the U.S. sales compared to
sales of similar merchandise, we made an adjustment, pursuant to 19 CFR
353.57, for physical differences in merchandise.
Karmen did not make home market or third country sales of the
subject merchandise. Therefore, we based foreign market value (FMV) on
constructed value (CV), in accordance with section 773(a)(2) of the
Act.
Fair Value Comparisons
To determine whether Sivanandha's and Karmen's sales for export to
the United States were made at less than fair value, we compared the
United States price (USP) to the FMV, as specified in the ``United
States Price'' and ``Foreign Market Value'' sections of this notice.
We made revisions to Sivanandha's and Karmen's reported data, where
appropriate, based on verification findings.
United States Price
Because Sivanandha's and Karmen's U.S. sales of subject merchandise
were made to unrelated purchasers prior to importation into the United
States, and exporter's sales price methodology was not indicated by
other circumstances, we based USP on the purchase price (PP) sales
methodology in accordance with section 772(b) of the Act.
We calculated Sivanandha's USP based on packed, CIF prices to
unrelated customers in the United States. We made deductions, where
appropriate, for foreign inland freight, containerization, ocean
freight, and marine insurance.
We recalculated Sivanandha's marine insurance expense, so it is
allocated on a value basis instead of a weight basis.
For Sivanandha, in accordance with Section 772(d)(1)(B) of the Act,
we added the amount of import duties imposed on inputs which were
subsequently rebated upon exportation of the finished merchandise to
the United States.
We also made an adjustment for taxes paid on the comparison sales
in India, in accordance with our practice, pursuant to the Court of
International Trade (CIT) decision in Federal-Mogul, et al v. United
States, 834 F. Supp. 1993. See, Color Negative Photographic Paper and
Chemical Components Thereof from Japan, 59 FR 16177, 16179, April 6,
1994 for an explanation of this tax methodology.
We calculated Karmen's USP based on packed, CIF prices to unrelated
customers in the United States. We made deductions, where appropriate,
for foreign inland freight, containerization, ocean freight, and marine
insurance. We recalculated Karmen's marine insurance expense, so it is
allocated on a value basis instead of a weight basis.
Foreign Market Value
In order to determine whether there was a sufficient volume of
sales in the home market to serve as a viable basis for calculating
Sivanandha's FMV, we compared the volume of home market sales of
subject merchandise to the volume of third country sales of subject
merchandise, in accordance with section 773(a)(1)(B) of the Act. Based
on this comparison, we determined that Sivanandha's home market was
viable.
For Sivanandha, we calculated FMV based on delivered prices,
inclusive of packing to home market customers. From these prices, we
deducted commission, where appropriate.
In light of the Court of Appeals for the Federal Circuit's decision
in Ad Hoc Committee of AZ-NM-TX-FL Producers of Gray Portland Cement v.
United States, 13 F. 3d 398 (Fed. Cir., January 5, 1994), the
Department no longer can deduct home market movement charges from FMV
pursuant to its inherent power to fill in gaps in the antidumping
statute. Instead, we adjust for those expenses under the circumstance-
of-sale (COS) provision of 19 CFR 353.56(a). Accordingly, in the
present case, we adjusted for post-sale home market movement charges
under the COS provision of 19 CFR 353.56(a). This adjustment included
home market inland freight.
For Sivanandha, we also made COS adjustments for differences in
quality inspection charges, and credit. In accordance with 19 CFR
353.56(b)(1), we added U.S. indirect selling expenses as an offset to
the home market commission, but capped this addition by the amount of
the home market commission. Finally, we deducted home market packing
expenses and added U.S. packing expenses to Sivanandha's
[[Page 10547]] FMV, in accordance with section 773(a)(1) of the Act.
For Karmen, because it sells the subject merchandise only in the
United States, we used CV, pursuant to section 773(e) of the Act. We
calculated CV as the sum of the cost of materials, fabrication, general
expenses, U.S. packing costs, and profit. We relied upon the submitted
CV data but made the following changes where we determined costs were
not appropriately quantified or valued: (1) We adjusted the cost of
manufacturing to include the cost of excluded electricity expenses; (2)
we recalculated finance expense on an annual basis as a percentage of
cost of goods sold; (3) we increased SG&A expenses for excluded
partner's salary, audit fees and bank charges and recalculated SG&A
expense on an annual basis as a percentage of fabrication cost of goods
sold; (4) we reduced the manufactured fittings per unit of fabrication
cost for amounts that relate to the refurbished fittings; and (5) we
reduced the submitted indirect selling expense for the verified
overstated amounts. In accordance with section 773(e)(1)(B)(i) and (ii)
of the Act, we: (1) Included the greater of either Karmen's reported
general expenses or the statutory minimum of ten percent of the cost of
manufacture (COM), as appropriate; and (2) used the statutory minimum
of eight percent of the sum of COM and general expenses for profit
because actual profit was less than eight percent.
In our preliminary determination, we were unable to properly
allocate labor and variable manufacturing overhead costs between
refurbished pipe fittings and new pipe fittings. However, based on
verified information, we are now able to allocate the labor and
variable manufacturing overhead costs between refurbished and new pipe
fittings. Therefore, for purposes of this final determination, Karmen's
CV includes only those costs allocable to new pipe fittings.
Currency Conversion
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. See 19 CFR 353.60.
Verification
As provided in section 776(b) of the Act, we verified information
provided by the respondent using standard verification procedures,
including the examination of relevant sales, cost and financial
records, and selection of original source documentation.
Interested Party Comments
Comment 1: Karmen and Sivanandha argue that they are not related
parties for purposes of this antidumping duty investigation. They
contend that, although one individual has a common interest in both
companies, in all other respects the two companies are separate.
Petitioner disagrees with respondents' argument. It states that,
although the Department verified that Karmen and Sivanandha are
separate legal entities, the relationship between the two companies
satisfies many of the criteria considered by the Department when
deciding whether to ``collapse'' companies.
DOC's Position: We agree with respondents. In general, Commerce
will not consider parties related where the ownership interest is less
than five percent. See, e.g., Certain Forged Steel Crankshafts from
Japan, 52 FR 36984 (1987). This is consistent with Commerce's ``general
practice not to collapse related parties except in certain relatively
unusual situations, where the type and degree of relationship is so
significant that we find there is a strong possibility of price
manipulation.'' Antifriction Bearings (Other Than Tapered Roller
Bearings: and Parts Thereof from Germany, 54 FR 18992, 19089 (1989).
Based on Karmen's supplemental response and our analysis at
verification, we confirmed that the ownership between Karmen and
Sivanandha is insignificant and that no other factors suggested a
strong possibility of price manipulation. (See the February 16, 1995,
Memorandum from Team to Barbara Stafford for a full discussion of our
analysis of this subject.)
Comment 2: Karmen argues that it should be allowed to reduce its
cost of manufacturing for the POI to account for the advance import
license it purchased from the Indian government. Karmen notes that it
originally purchased the license in order to import steel pipe for pipe
fittings at duty-free prices. Karmen maintains that it did not use the
import license but, instead, produced and exported the subject
merchandise using higher-priced domestic pipe inputs. Because it can
still import duty-free pipe under the license, Karmen argues that it
should be allowed to reduce its production costs by an amount
representing the estimated future savings on imported pipe used to
manufacture pipe fittings.
Petitioner argues that we should not reduce Karmen's production
costs by the potential savings on future duty free imports. Petitioner
states that in calculating constructed value, the Department uses the
cost of materials incurred at a time preceding the date of exportation
of the subject merchandise. Also, the Department's CV questionnaire
clearly states that the respondent is to report costs incurred during
the POI for purposes of constructed value. Petitioner further claims
that the advance license held by Karmen was not used during the POI
and, therefore, the future potential savings, if they are realized,
will affect costs after the date of exportation of the subject
merchandise. Finally, petitioner argues that if the license is used in
the future, the effect of the license on Karmen's costs of
manufacturing would be taken into account in a future administrative
review.
DOC's Position: We believe that the advance import license provides
a benefit to Karmen which accrued to the company during the POI due to
the fact that it met its export commitment under the license through
the use of domestically-purchased pipe inputs. In this case, the
benefit from the license relates directly to production and sale of the
subject fittings during the POI. Thus, in order to achieve an
appropriate matching of production costs and sales revenues for the
subject merchandise, we have offset material costs by an amount
representing the benefit obtained from the unused import license.
Comment 3: Petitioner argues that the Department should not adjust
Karmen's material costs by the income generated by sales of scrap,
because subcontractors to Karmen retain the scrap and presumably lower
their prices to Karmen to reflect the value of the scrap.
DOC's Position: The Department verified that Karmen permits its
subcontractors to keep all scrap generated from the production
processes they perform. Hence, Karmen did not sell any scrap during the
POI and is not entitled to the scrap adjustment it claimed. We agree
with petitioner that the value of the scrap is likely accounted for in
the price the subcontractors charge Karmen. Therefore, allowing the
adjustment claimed by Karmen would double count the value of scrap.
Comment 4: Regarding the salary of its director, Karmen argues that
since the director is an owner, his income is a partner's draw and
should not be included in Karmen's total salary expense. Respondent
also contends that if the Department determines that the draw must be
included in SG&A costs, the Department should only include the amount
of the draw that would be comparable to a reasonable salary for
management. [[Page 10548]]
Petitioner argues that the director's entire salary should be
included as a cost because it is treated as a cost by Karmen in its
financial statements and in calculating taxable income. Also,
petitioner contends that there is no factual basis by which the
Department can establish an amount that would be reasonable salary for
management.
DOC's Position: We agree with petitioner. During verification, we
discovered that Karmen did not include its director's salary in its
reported costs. Karmen's director is not a passive investor; he takes
an active role in the company's management. Moreover, the payments made
to him during the POI were classified as salary in Karmen's books and
records. There is no evidence on the record to indicate that these
payments were for anything other than salary. Accordingly, we included
the full amount paid to the director in SG&A costs for purposes of the
final determination.
Comment 5: Karmen argues that the Department should use verified
information to allocate Karmen's labor and variable overhead costs
between the pipe fittings it refurbishes and the pipe fittings it
manufactures. Respondent further contends that the Department should
allocate certain other costs, such as grinding and painting, to both
types of fittings since these costs were incurred on both types of pipe
fittings.
Petitioner agrees that allocation of a portion of verified costs to
refurbished fittings may be appropriate. However, petitioner disagrees
that the Department should allocate any expenses for grinding to
refurbished pipe fittings because Karmen has not previously indicated
that any grinding is involved in the refurbishing process. Petitioner
contends that grinding is associated with the beveling process, which
is a production step performed before Karmen acquires the rusty pipe
fittings.
DOC's Position: The Department verified that shotblasting,
punching, painting and grinding costs were incurred by Karmen to
refurbish certain of its pipe fittings. Therefore, the Department has
allocated a portion of these expenses to the cost of the refurbished
fittings.
Comment 6: Karmen argues that SG&A should be allocated to
refurbished and manufactured pipe fittings on the basis of weight.
Since there are no material costs associated with the refurbished pipe,
an allocation based on cost of goods sold would assign too great an
amount to manufactured pipe fittings.
Petitioner argues that the Department should deny Karmen's request
to allocate SG&A costs by weight instead of cost. Petitioner contends
that it is the Department's practice to calculate SG&A costs as a
percentage of cost of sales. Petitioner further contends that with
respect to the refurbished fittings, Karmen does not manufacture or
``sell'' these fittings. Because Karmen contributes so little value to
the refurbished fittings, using product weight to allocate SG&A is
plainly distorting.
DOC's Position: We have determined that SG&A expenses should be
allocated based on cost of sales rather than on the weight of finished
pipe fittings. However, since there are no material costs associated
with the refurbished fittings and hence, no material costs were
reflected in these ``sales'', we removed material costs related to the
manufactured fittings from cost of sales in order to establish an
equitable allocation.
Comment 7: Karmen claims that, although not mentioned in the CV
verification report, company officials demonstrated at verification
that certain indirect selling expenses had been overstated in the CV
calculations. Correct amounts were provided and verified.
Petitioner claims that there is no evidence of this on record, and
that the original amount should be used.
DOC's Position: Although we did not address this issue in our
verification report, respondent is correct in stating that we verified
Karmen's actual amount of indirect selling expenses for the POI.
Additionally, there is information on the record of this investigation
which supports Karmen's verified indirect selling expenses. The source
document supporting this expense is in Exhibit 10 of the CV
verification report.
Comment 8: Petitioner argues that the Department should use the
verified packing cost information for Karmen instead of the reported
amount for the final determination. Petitioner also argues that the
Department should use the best information available (BIA) for Karmen's
foreign inland freight expenses, since Karmen did not provide the
supporting documentation requested by the Department.
Karmen argues that although it did not produce supporting
documentation for its foreign inland freight expense, the Department
should not resort to BIA. Respondent contends that, because the general
accuracy of Karmen's responses was established at verification, the
Department should use the data ascertained at verification.
DOC's Position: As stated in the Fair Value Comparisons section of
this notice, we made revisions to Karmen's data, where appropriate,
based on verification findings. Therefore, we have adjusted Karmen's
data for packing costs based on verification.
Because Karmen did not provide source documentation for its foreign
inland freight expense, we have used as BIA, the highest Indian truck
freight rates as provided in a cable from the U.S. embassy in Bombay
dated August 3, 1993.
Comment 9: Petitioner claims that we should apply total BIA to
Sivanandha because the Department's verification revealed numerous
discrepancies in Sivanandha's responses. (The specific discrepancies
raised by petitioner are addressed in comments 10 through 17, below.)
Sivanandha refutes each of the discrepancies listed by petitioner
and argues that total BIA is inappropriate. (See, comments 10 through
17 for Sivanandha's counter arguments.)
DOC's Position: We have determined to accept Sivanandha's verified
information because the discrepancies discovered were minor in nature.
Overall, Sivanandha's responses were accurate and presented a true
picture of its manufacturing and selling processes.
Comment 10: Petitioner argues that certain home market sales
reported by Sivanandha as subject merchandise (i.e., seamless carbon
steel butt-weld pipe fittings), were sales of welded pipe fittings,
which are outside of the scope of this investigation. Petitioner
contends that sales of welded pipe fittings that were actually filled
with pipe fittings made of seamless pipe cannot be considered as
occurring in the ordinary course of trade.
Sivanandha argues that these sales were within the ordinary course
of trade and that it correctly reported all sales of the subject
merchandise.
DOC's Position: We verified that all of Sivanandha's home market
sales were produced using seamless carbon steel. Therefore, we agree
with Sivanandha that these sales are properly included in the home
market database. Although customers requested welded pipe, the orders
were filled with seamless pipe. Since we are investigating sales of
seamless pipe to the United States, the home market sales in question
should be included for comparison purposes. While we are authorized to
exclude sales not in the ordinary course of trade (e.g., trial sales or
sales of samples), there is no basis for treating Sivanandha's seamless
pipe sales as outside the ordinary course of trade.
Comment 11: Petitioner claims that the product weights were not
verified because Sivanandha used standard weights instead of actual
weights. Petitioner argues that the standard [[Page 10549]] weights
were not acceptable because the correlation between standard and actual
weights was no better than 93 percent.
Sivanandha argues that it was appropriate to use standard weights
because most invoices did not list actual weights. According to
Sivanandha the 93 percent correlation between actual and standard
weights derived at verification supports, rather than undermines, the
use of standard weights.
DOC's Position: We disagree with petitioner that Sivanandha's use
of standard weights was unreasonable. The 93 percent correlation
between actual and standard weights demonstrates the reasonableness.
Moreover, even if we were to adjust for the seven percent
``discrepancy'' it would have no effect on the amounts allocated to
each size of pipe fitting because Sivanandha used the same methodology
for both its home market and U.S. sales.
Comment 12: Petitioner states that Sivanandha did not provide
documentation for the cost of gunny bags. Therefore, petitioner argues
that packing was not verified. Petitioner also states that Sivanandha
did not report any labor costs for packing pipe fittings sold in the
home market.
Sivanandha claims that the cost of gunny bags was verified. It also
contends that the failure to report the cost of labor for packing home
market sales is to its detriment. As a practical matter, Sivanandha
points out that there is virtually no labor cost for home market
packing since there is no crating on home market sales.
DOC's Position: Normally, the Department applies BIA whenever
respondents are unable to support at verification the information
provided in their responses. Although Sivanandha failed to provide at
verification documentation supporting the cost of gunny bags, the
Department is not compelled to apply BIA because the company's overall
responses were accurate and verified, and the plausible cost of such
bags is very low. Absent alternative publicly available information
with respect to the cost of gunny bags, the Department has used the
price reported by Sivanandha.
Comment 13: Petitioner lists the following problems with the
difference in merchandise adjustment submitted by Sivanandha: incorrect
product codes, standard versus actual weight of steel, average price
for steel versus price for specific grades of steel, discrepancies in
the manner in which Sivanandha reported its labor and variable overhead
expenses. Petitioner argues that these problems led the Department to
request that Sivanandha resubmit its home market and U.S. sales
databases.
Sivanandha admits that it originally did not understand the
Department's methodology regarding this adjustment. However, Sivanandha
argues that the information was corrected at verification. Therefore,
Sivanandha argues that the Department should accept these new verified
databases.
DOC's Position: At verification, we discovered that the Sivanandha
had not understood the Department's adjustment for differences in
merchandise. However, the information required to correct Sivanandha's
adjustment was readily available and we verified it. Sivanandha
submitted new section B and C databases after verification, and we
confirmed that they were identical to the information verified.
Therefore, we are accepting Sivanandha's corrected databases.
Comment 14: Petitioner describes other discrepancies pertaining to
adjustments for inland freight, credit, bank guarantees, ocean freight,
marine insurance, foreign inland freight, and containerization.
Sivanandha claims that many of the costs were estimated because
Sivanandha had not yet exported the merchandise to the United States.
Also, certain of the discrepancies listed by petitioner were minute
fractions of a cent, due to rounding errors. Sivanandha argues that
company officials made every effort to supply the verification team
with accurate information.
DOC's Position: We view the discrepancies described by petitioner
as minor and are using the verified information. We agree with
Sivanandha that the company cooperated fully with the Department's
investigation and verification.
Comment 15: Petitioner claims that the sum of material, labor, and
variable overhead is incorrect in Sivanandha's database, and is
concerned that there are additional problems with the November 29, 1994
databases. Therefore, petitioner argues that these databases should not
be used and that the Department should use BIA.
DOC's Position: The Department noted that the data was correct, but
the program was missing one formula. The Department entered the correct
formula, and the spreadsheet is accurate. The Department is accepting
these databases for the final determination because we have checked
that they match the data we verified.
Comment 16: The petitioner claims that by using the new submission
the difference in merchandise adjustment for several sales exceed the
20 percent rule. Hence, for these sales, constructed value should be
used.
Sivanandha believes that the petitioner's claim is incorrect.
Moreover, according to Sivanandha, petitioner's allegation that the
Department should use CV in these sales is untimely.
DOC's Position: Using the November 29, 1994 databases, we have
determined that no difference in merchandise adjustments exceeded 20
percent. This issue is therefore moot.
Comment 17: Petitioner claims that the circumstance of sale
adjustment for advertising in the home market should not be allowed
because the advertising is aimed at Sivanandha's customers, not the
customers' customer. Petitioner also argues that the adjustment for
quality inspections should not be allowed because, even though the
charge appears on the invoice, it is separate from the cost of the
merchandise and, therefore, not embedded in the price.
Sivanandha claims that it would be inappropriate to ignore these
adjustments because these costs were incurred solely on the home market
sales and, therefore, increased the price of the home market sales.
Additionally, Sivanandha claims that the quality inspections are
performed only if the customer requests the services. The price charged
is higher because the cost of the inspection is included in the price
reported by Sivanandha.
DOC's Position: We agree with the petitioner that we should not
adjust Sivanandha's home market sales for advertising expenses because
the costs were not directed to the customers' customer. However, we
agree with Sivanandha that we should make an adjustment to its home
market prices for technical services when the inspection was performed
by a third party because we verified that these costs were included in
Sivanandha's price.
Continuation of Suspension of Liquidation
We are directing the U.S. Customs Service to continue to suspend
liquidation of all entries of butt-weld pipe fittings from India, as
defined in the ``Scope of Investigation'' section of this notice, that
are entered, or withdrawn from warehouse, for consumption on or after
October 4, 1994.
The Customs Service shall require a cash deposit or the posting of
a bond equal to the estimated weighted-average amounts by which the
foreign market values of the subject merchandise exceed the United
States prices as shown below. The suspension of liquidation will remain
in effect until [[Page 10550]] further notice. The weighted-average
dumping margins are as follows:
------------------------------------------------------------------------
Margin Deposit
Manufacturer/producer/exporter (percent) (percent)
------------------------------------------------------------------------
Karmen Steels of India........................ 1.69 1.69
Sivanandha Pipe Fittings, Ltd................. 13.99 10.83
All Other..................................... 7.84 6.26
------------------------------------------------------------------------
Adjustment of Deposit Rate for Countervailing Duties
Article VI, paragraph 5 of the General Agreement on Tariffs and
Trade provides that ``[no] product * * * shall be subject to both
antidumping and countervailing duties to compensate for the same
situation for dumping or export subsidization.'' This provision is
implemented by section 772(d)(1)(D) of the Act. Since antidumping
duties cannot be assessed on the portion of the margin attributable to
export subsidies, there is no basis to require a cash deposit or bond
for that amount.
Accordingly in this investigation, because Sivanandha's FMV is
based on home market sales, the antidumping margin must be adjusted. In
the concurrent Final Affirmative Countervailing Duty Determination:
Certain Carbon Steel Butt-Weld Pipe Fittings from India, we determined
that Sivanandha's export subsidy was 3.16 percent ad valorem, which
will be subtracted from the margins for cash deposit or bonding
purposes. This results in a deposit rate of 10.83 percent for
Sivanandha. Since Karmen only has U.S. sales, its FMV is based on CV
which reflects export subsidies. Because the export subsidies were
reflected in both USP and FMV, the subsidies did not affect the margin
calculations using CV.
The Customs Service shall require a cash deposit or the posting of
a bond equal to the estimated preliminary dumping margins, as shown
above. The suspension of liquidation will remain in effect until
further notice.
ITC Notification
In accordance with section 735(d) of the Act, we have notified the
ITC of our determination.
Notice to Interested Parties
This notice also serves as the only reminder to parties subject to
administrative protective order (APO) of their responsibility
concerning the return or destruction of proprietary information
disclosed under APO in accordance with 19 CFR 353.35(d). Failure to
comply is a violation of the APO.
This determination is published pursuant to section 735(d) of the
Act (19 U.S.C. 1671(d)).
Dated: February 16, 1995.
Barbara R. Stafford,
Deputy Assistant Secretary for Investigations.
[FR Doc. 95-4723 Filed 2-24-95; 8:45 am]
BILLING CODE 3510-DS-P