[Federal Register Volume 61, Number 66 (Thursday, April 4, 1996)]
[Notices]
[Pages 15028-15033]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-8215]



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DEPARTMENT OF COMMERCE
[A-570-803]


Heavy Forged Hand Tools, Finished or Unfinished, With or Without 
Handles, from the People's Republic of China; Final Results of 
Antidumping Administrative Review

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.

ACTION: Notice of Final Results of the Antidumping Duty Administrative 
Review of Heavy Forged Hand Tools, Finished or Unfinished, With or 
Without Handles, from the People's Republic of China.

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SUMMARY: On August 16, 1995, the Department of Commerce (the 
Department) published in the Federal Register the preliminary results 
of its administrative review of the antidumping duty orders on heavy 
forged hand tools, finished or unfinished, with or without handles 
(HFHTs) from the People's Republic of China (PRC) (60 FR 42516). This 
review covers the period February 1, 1993, through January 31, 1994. We 
gave interested parties an opportunity to comment on our preliminary 
results. Based upon our analysis of the comments received, we have 
changed the results from those presented in the preliminary results of 
review.

EFFECTIVE DATE: April 4, 1996.

FOR FURTHER INFORMATION CONTACT: Tom Prosser or Maureen Flannery, 
Office of Antidumping Compliance, Import Administration, International 
Trade Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, N.W., Washington D.C. 20230; telephone (202) 482-
4733.

Applicable Statute and Regulations

    Unless otherwise stated, all citations to the statute and to the 
Department's regulations are references to the provisions as they 
existed on December 31, 1994.

SUPPLEMENTARY INFORMATION:

Background

    On February 4, 1994, the Department published in the Federal 
Register (59 FR 5390) a notice of opportunity to request administrative 
reviews of these antidumping duty orders. On Februrary 28, 1994, in 
accordance with 19 CFR 353.22(a), two resellers of the subject 
merchandise to the United States, Fujian Machinery & Equipment Import & 
Export Corporation (FMEC) and Shandong Machinery Import & Export 
Corporation (SMC), requested that we conduct administrative reviews of 
their exports of subject merchandise to the United States. We published 
the notice of initiation of these antidumping duty administrative 
reviews on March 14, 1994 (59 FR 11768). The notice of initiation was 
amended on June 15, 1994 (59 FR 30770) and July 15, 1994 (59 FR 36160).
    On August 16, 1995, the Department published in the Federal 
Register the preliminary results of the administrative reviews of the 
antidumping duty order on HFHTs from the PRC (60 FR 42516). A timely 
request for a hearing was submitted by Woodings-Verona Tool Works, Inc. 
(petitioner). The hearing was conducted on October 2, 1995. The 
Department is conducting this adminstrative review in accordance with 
section 751 of the Tariff Act of 1930, as amended (the Act).

Scope of Review

    Imports covered by this review are shipments of HFHTs from the PRC 
comprising the following classes or kinds of merchandise: (1) hammers 
and sledges with heads over 1.5 kg (3.33 pounds) (hammers/sledges); (2) 
bars over 18 inches in length, track tools and wedges (bars and 
wedges); (3) picks/mattocks; and (4) axes/adzes.
    HFHTs include heads for drilling, hammers, sledges, axes, mauls, 
picks, and mattocks, which may or may not be painted, which may or may 
not be finished, or which may or may not be imported with handles; 
assorted bar products and track tools including wrecking bars, digging 
bars and tampers; and steel woodsplitting wedges. HFHTs are 
manufactured through a hot forge operation in which steel is sheared to 
required length, heated to forging temperature, and formed to final 
shape on forging equipment using dies specific to the desired product 
shape and size. Depending on the product, finishing operations may 
include shot-blasting, grinding, polishing and painting, and the 
insertion of handles for handled products. HFHTs are currently provided

[[Page 15029]]
for under the following Harmonized Tariff System (HTS) subheadings: 
8205.20.60, 8205.59.30, 8201.30.00, and 8201.40.60. Specifically 
excluded are hammers and sledges with heads 1.5 kg (3.33 pounds) in 
weight and under, hoes and rakes, and bars 18 inches in length and 
under. This review covers two exporters of HFHTs from the PRC, FMEC and 
SMC. The review period is February 1, 1993 through January 31, 1994.

Analysis of Comments Received

    We gave interested parties an opportunity to comment on the 
preliminary results. We received case briefs and rebuttal briefs from 
petitioner and from both respondents.
    Comment 1: Petitioner contests the Department's use of a trading 
company's reported purchase price for steel from a market-economy 
country to value steel used by the factories to make HFHTs. Petitioner 
asserts that this is inconsistent with past decisions, and argues that 
Department practice forbids the use of prices for inputs purchased by 
trading companies from a market economy to value factors of production 
when the trading company did not manufacture the subject merchandise, 
citing Final Determination of Sales at Less Than Fair Value: Coumarin 
from the People's Republic of China, 59 FR 66895 (December 28, 1994) 
(Coumarin) and Notice of Final Determination of Sales at Less Than Fair 
Value: Certain Partial-Extension Steel Drawer Slides with Rollers from 
the People's Republic of China, 60 FR 54472 (October 24, 1995) (Drawer 
Slides) in support of its argument. Petitioner contends that these 
cases establish that only the price the producer negotiated directly 
with a market-economy supplier is acceptable to value the factors of 
production. Petitioner asserts that there is no record evidence on how 
much or in what currency the suppliers paid the trading companies.
    Petitioner maintains that the Department's use of trading company 
purchase prices is inconsistent with respondents' claim that the 
producers are separate from the trading companies. Petitioner argues 
that in a market economy the trading company would receive a profit for 
its service in the form of a commission or mark-up on the steel price. 
Petitioner asserts that if the Department uses these prices, then it 
must increase them by the reasonable commission or markup that a 
market-economy importer would charge for its services.
    Finally, petitioner argues that the Department cannot assume that 
the market-economy purchase price adequately reflects the value of the 
factors of production because the respondents failed to demonstrate 
which of the subject products, if any, contained market-economy steel.
    Respondents argue that, because both Coumarin and Drawer Slides 
determinations postdate this period of review, they are inapplicable to 
this case. Respondents assert that the Department's policy at the time 
of the review period was that enunciated in Oscillating Fans and 
Ceiling Fans from the People's Republic of China, 56 FR 55271, 55275 
(October 25, 1991) (Fans), in which the Department stated that 
``[w]here we can determine that an NME [(non-market economy)] 
producer's input prices are market-determined, accuracy, fairness, and 
predictability are enhanced by using those prices.''
    Respondents claim that until Coumarin, the Department did not 
distinguish between who purchased an input and who produced merchandise 
with that input. Respondents claim that this qualification is without 
statutory or regulatory support and has not been judicially reviewed. 
Further, citing Final Determination of Sales at Less Than Fair Value: 
Chrome Plated Lug Nuts from the People's Republic of China, 56 FR 46153 
(September 10, 1991)(Lug Nuts), respondents contend that the buyer/
producer distinction runs counter to the Department's view that in 
NMEs, trading companies and factories are treated as one entity.
    In response to petitioner's claim that respondents failed to 
identify which products were produced with imported steel, respondents 
claim that since the steel is fungible, no records were kept regarding 
the source of the steel used to make specific tools. Respondents claim 
that a record of steel purchases is maintained by the manufacturer and 
that a ratio of imports to domestically sourced steel was provided.
    Department's Position: We agree with the petitioner. It is the 
Department's normal practice in NME cases to value the factors of 
production using surrogate country input prices. The Department 
normally allows for the valuation of inputs based on the actual 
purchase price of the input only when the NME manufacturer purchases 
the inputs from a market economy supplier and pays in a convertible 
currency. See, e.g., Final Determination of Sales at Less Than Fair 
Value: Saccharin from the People's Republic of China, 59 FR 58818 
(November 15, 1994) (Saccharin), and Fans. In this case, the inputs 
were purchased from market-economy countries by a PRC trading company, 
which then transferred these inputs to the PRC manufacturer. Thus, the 
manufacturer obtained the inputs from a PRC source. As noted by the 
petitioner, there is no information on the record indicating how much 
or in what currency the manufacturers paid the trading companies. 
Further, there is no information on the record indicating which models 
were produced with imported steel, and which models were not. As 
established in Coumarin, Drawer Slides, and Notice of Final 
Determination of Sales at Less Than Fair Value: Disposable Pocket 
Lighters from the People's Republic of China (Lighters), 60 FR 22359 
(May 5, 1995), it is the Department's practice to apply surrogate 
values to market economy inputs obtained from PRC trading companies. We 
disagree with respondents' claim that both Coumarin and Drawer Slides 
do not apply to this review because they postdate the period of review. 
Because those two determinations predate these final results, they are 
applicable.
    In addition to the above, we note that there is no information on 
the record indicating whether the price reported by the trading company 
for the market economy-sourced steel is representative of the grades, 
prices, and quantities of steel purchased by the trading company during 
the period of review. Therefore, for these final results, we have used 
surrogate values to value all inputs used in the production of HFHTs.
    Comment 2: Petitioner argues that the Department should use the 
Indian steel price quotation submitted by petitioner during the prior 
administrative review, or the 1993 Indian import value for steel bar, 
as the surrogate value for steel. Petitioner claims that the Indian 
price quotation is particularly appropriate as it represents a price 
for the grades, sizes, and shapes of steel used to produce HFHTs. 
Petitioner claims that there is precedent supporting the use of the 
price quotation to value the steel factor of production. Petitioner 
contends that in Notice of Final Determination of Sales at Less Than 
Fair Value: Furfuryl Alcohol from the People's Republic of China, 60 FR 
22544, 22548 (May 8, 1995) (Furfuryl Alcohol), and Coumarin, the 
Department used privately obtained price quotations to value factors of 
production and to determine whether specific information was aberrant. 
Arguing that the price quotation at issue has the added advantage of 
falling roughly in the middle of the range of steel prices available to 
the Department, the petitioner suggests that the Department use the 
Indian price quotation, adjusted for inflation, as its steel value for 
1992 and 1993. If the Department does not use the price quotation, then 
the petitioner argues

[[Page 15030]]
that the only viable option is to use the roughly equivalent 1993 
Indian steel bar import value.
    Petitioner argues that the record does not support the Department's 
alternative of using the lower 1992 unit value for Indian steel bar 
imports. Citing the Department's August 8, 1995 factor values 
memorandum, the petitioner contends that the logic behind rejecting the 
1993 value is circular, and that one could use the same logic to reject 
the 1992 value. Petitioner adds that it believes the 1992 value is the 
aberrational value.
    Respondents argue that the prices proposed by the petitioner are 
not consistent with other prices, particularly those submitted in the 
Drawer Slides case. Respondents argue that petitioner's prices do not 
reflect the prices paid for steel used for exports.
    Department's Position: We disagree with the petitioner. The use of 
import statistics as surrogate values is both reasonable and conforms 
to established Department practice. See, e.g., Heavy Forged Hand Tools, 
Finished or Unfinished, With or Without Handles, from the People's 
Republic of China; Final Results of Antidumping Duty Administrative 
Reviews, 60 FR 49251 (September 22, 1995). In addition, the price 
quotation to which petitioner refers was submitted for the record of 
the February 1, 1992 through January 31, 1993 administrative review and 
is not on the record of this review.
    We also disagree with petitioner's claim that the only viable 
alternative to the price quotes is to use the 1993 Indian steel bar 
import value. As explained in our August 8, 1995 factor values 
memorandum, the total quantity of steel imported into India in 1992 and 
1993 under HTS category 7214.50 (``Forged Bars and Rods Containing 
0.25% or Greater But Less Than 6% of Carbon'') was small. Therefore, 
the Department compared the 1992 and the 1993 unit values to other 
contemporaneous steel prices to determine whether the Indian import 
values were aberrational. The 1992 value was found to be comparable to 
1992 U.S. and Indonesian import values. The 1993 value was not 
comparable to the 1993 U.S. value, and because the 1993 Indonesian 
value was not available, we compared the 1993 Indian value with the 
1992 Indian value and found a substantial difference. Therefore, we 
concluded that the 1993 Indian value was aberrational and used the 1992 
Indian value, adjusted for inflation, to value steel for 1993.
    Finally, there is no record support for petitioner's claim that the 
1992 Indian steel import value is aberrational. We note that these same 
1992 Indian steel import values were used in the prior review, and 
petitioner supported their use.
    Comment 3: The petitioner argues that the Department erred in using 
the imported value of a finished pallet to value pallets built by the 
factories under review. Petitioner argues that this represents a change 
from that used in the less-than-fair-value (LTFV) investigation and the 
previous administrative review. Petitioner further argues that it was 
not given fair notice of the intended change, thereby depriving it of 
its opportunity to participate in this proceeding because the deadline 
for submission of new information had passed. Petitioner asserts this 
denied it the opportunity to submit evidence that the existing 
methodology did not produce aberrations. Petitioner claims that the 
Department exacerbated this problem by providing no explanation of its 
decision to deviate from past practice. Petitioner argues that this 
effectively obstructs effective rebuttal of Departmental action. 
Petitioner cites several Court of International Trade decisions, 
claiming the Court held that the Department should provide due notice 
of methodological changes as well as the opportunity to comment 
thereon. Petitioner also contends that an administrative agency cannot 
depart from established methodology without an explanation for doing 
so, and it argues that the Department failed to provide such an 
explanation. Petitioner cites Hussey Copper Ltd. v. United States, 834 
F. Supp. 413, 418-419 (CIT 1993), and Krupp Stahl v. United States, 822 
F. Supp. 789, 795 (CIT 1993) in support of this contention.
    Finally, petitioner asserts that the methodological change violates 
the statute. Citing Furfuryl Alcohol and Coumarin, petitioner contends 
that the statute requires the Department to value each input at the 
point at which it enters the producer's production process. Petitioner 
contends that the Department may not shift its search for factor values 
to the level of finished or intermediate material, but claims that this 
is exactly what the Department did when it used the import value of 
completed pallets to represent the wood, nail, and packing labor costs 
borne by the producers. Petitioner asserts that the Department should 
base its packing cost calculation on the inputs actually used by the 
respondents.
    Respondents argue that the preliminary notice was adequate 
notification of the Department's methodological change. Respondents 
also argue that petitioner was afforded an opportunity to comment and 
that petitioner exercised its opportunity.
    Respondents disagree with petitioner's assertion that the 
Department's pallet valuation methodology is contrary to the statute. 
Respondent argues that nothing in the legislative history, the statute 
or the Department's regulations instructs the Department to undertake a 
constructed value for packing materials. Citing 19 U.S.C. Sec. 
1677b(c)(1), respondents argue that the Department is required to 
determine a foreign market value based on factors of production for the 
merchandise under review, but allows the Department to determine the 
cost, rather than a constructed value, for containers, coverings, and 
other expenses incidental to shipment to the United States.
    Department's Response: We agree with petitioner that we should 
value the pallets using factors and surrogate values for the wood, 
nails and packing labor, separately, rather than for the completed 
pallet. The information on the record at the time of the preliminary 
results indicates that the factories make the pallets from wood and 
nails rather than purchase the completed pallet. Therefore, we have 
changed our valuation accordingly.
    Comment 4: Respondents argue that the non-steel surrogate values 
were not adjusted to reflect the period of review. Respondents note 
that the Department used Indian import statistics for ten months--April 
1993 through January 1994--but they argue that the Department should 
have deflated the data to cover the first three months of the period of 
review. Respondents assert that a significant portion of the production 
of the subject merchandise occurred prior to April 1993, and that none 
of the imports during the period of review were produced after December 
1993.
    Department's Position: We disagree with the respondents. The Indian 
import data is contemporaneous with the period of review. See, e.g., 
Furfuryl Alcohol. In addition, the Indian import data on the record 
includes all of the data reported by the Indian government for period 
in question. As in the prior administrative review, we valued 
production input based on the year in which production occurred. Thus, 
1992 input production was valued using 1992 factor values, and 1993 
input production was valued using 1993 factor values. Because the 
Indian import data is both complete and contemporaneous, we have not 
made the requested adjustment.
    Comment 5: Respondents argue that the Department incorrectly valued 
steel

[[Page 15031]]
by inflating import values by the 1992 calendar year wholesale price 
index (WPI) rather than the index for April through December 1992.
    Department's Position: We agree with respondents and we have 
revised our inflator to reflect the period for which we have data 
(April 1992 through December 1992) rather than the 1992 calendar year.
    Comment 6: Respondents argue that the Department's reliance on 
contemporaneous Indian import statistics is arbitrary because the data 
was not available either when the merchandise was sold or when the 
request for review was submitted. Respondents suggest that using 1992 
Indian import values with a WPI adjustment would reduce such 
arbitrariness.
    Department's Position: We disagree with respondents' arguments that 
use of import statistics from the April-December 1992 period is unfair 
because they were not available when the merchandise was sold or the 
reviews requested. It is the Department's standard practice to use 
surrogate values from a time period which is contemporaneous to the 
period of investigation or the period of review. See, e.g., Furfuryl 
Alcohol, in which the surrogate value for furfuryl was selected because 
it was more contemporaneous than other sources, and the Preliminary 
Determination of Sales at Less Than Fair Value: Manganese Metal from 
the People's Republic of China, 60 FR 31282, (June 14, 1995), in which 
surrogate values within the period of investigation, or most 
contemporaneous with the period of investigation, were selected.
    Comment 7: SMC argues that the Department should not have resorted 
to using best information available (BIA) for those instances where SMC 
failed to provide factors-of-production data. SMC claims the use of BIA 
in this case penalizes SMC, and SMC cites Badger-Powhatan v. U.S., CIT 
1985, 608 F.Supp 653 (Badger-Powhatan), as support for its claim that 
the purpose of the law is to be remedial, not punitive.
    Department's Position: We disagree with the respondents. SMC failed 
to submit for the record of this proceeding factors-of-production data 
for one model, sales of which were first reported to the Department in 
SMC's supplemental questionnaire response. Since U.S. sales data for 
this model were submitted without the data necessary for the 
calculation of foreign market value (FMV), we must rely upon BIA, in 
accordance with section 776(1) of the Act, for these sales. As BIA, we 
are assigning a rate of 31.76 percent, which is the rate from the LTFV 
investigation for this class or kind of merchandise.
    In addition, respondents' reference to Badger-Powhatan is misplaced 
because, in that case, the Court was referring to the remedial nature 
of the Act as a whole rather than to the administering agency's 
authority to rely on BIA. See 608 F.Supp. 653, 656 (CIT 1985).
    Comment 8: Respondents argue that the packing cost percentages used 
by the Department (7.2 percent to 30 percent of production costs) are 
unreasonably high. First, respondents argue that the HTS categories 
used for Indian imports, by which the Department valued packing 
factors, are basket categories which combine low-value packing 
materials with high-value materials used for other purposes. Second, 
respondents argue that because the subject merchandise has minimal 
value added, the inflated values for packing materials represent a 
higher proportion of the value of the subject merchandise than do 
packing materials for most other products subject to antidumping duty 
administrative reviews. Respondents provide two examples of cases where 
products from NME countries required more extensive packing than HFHTs 
but where packing costs represent a smaller percentage (one to two 
percent) of production costs than do those the Department used for 
HFHTs. See Certain Chrome-Plated Lug Nuts from the People's Republic of 
China; Preliminary Results of Antidumping Duty Administrative Review, 
60 FR 19719 (April 20, 1995) (Lug Nuts I), and a September 13, 1995 
team concurrence memorandum regarding the final results of an 
administrative review of the antidumping duty order on lock washers 
from the PRC.
    Petitioner asserts that each dumping case is fact-specific. 
Therefore, the percentage cost of packing for lug nuts or lock washers 
has no bearing on the packing costs for HFHTs.
    Department's Position: We disagree with respondents. Rejecting 
import values simply because they are high or low is potentially overly 
subjective. See Final Determination of Sales at Less Than Fair Value: 
Certain Helical Spring Lock Washers from the People's Republic of 
China, 58 FR 48833 (September 20, 1993) (Lock Washers). Furthermore, 
there is no record evidence that the HTS categories used by the 
Department to value packing factors are inappropriate or that the 
packing materials at issue are of disproportionately low value relative 
to other products within those HTS categories.
    It is the Department's standard practice to use surrogate values to 
value packing costs. See, e.g., Notice of Preliminary Determination of 
Sales at Less Than Fair Value and Postponement of Final Determination: 
Certain Partial-Extension Steel Drawer Slides With Rollers from the 
People's Republic of China, (60 FR 29571, June 5, 1995), and Notice of 
Final Determination of Sales at Less Than Fair Value: Certain Cased 
Pencils from the People's Republic of China, 59 FR 55625 (November 8, 
1994) (Pencils), for which Indian import statistics were used to value 
packing materials. Moreover, in Lock Washers, the Department valued 
packing materials using Indian import statistics. For this review, 
unlike in Lug Nuts I, the information needed to calculate packing costs 
using surrogate values is on the record. Therefore, for these final 
results, we have continued to value these packing inputs using 
surrogate values. In addition, pursuant to our determination concerning 
market economy-sourced inputs obtained from PRC trading companies (see 
Comment 1), we have valued cartons using only Indian import values.
    Comment 9: Respondents argue that the values used for pallets are 
unreasonably high. Respondents do not dispute the selection of HTS 
subcategory 4415.10, ``Cases, Boxes, Crates, Drums, and Similar Packing 
of Wood,'' to value the wood used to make the pallets, but they assert 
that the resulting values are not reasonable. Citing a substantial 
increase in the average value for this category from 1991 to 1993, 
respondents suggest that the increase was due to the product mix in 
this category rather than an increase in price of the wood. Respondents 
suggest that the Department examine the 1993 IM-145 U.S. import 
statistics for the above-noted HTS category to determine the 
reasonableness of the Department's pallet values.
    Petitioner argues that respondents' claim regarding the cause of 
the average value increase is sheer speculation and is not supported by 
record information. Petitioner notes that data concerning U.S. import 
values for pallets is not on the record.
    Department's Position: We disagree with respondents. See our 
response to Comment 8. Rejecting certain import values simply because 
they are high or low is potentially overly subjective. In addition, 
there is nothing on the record indicating that the pallets are of low 
value compared to other items within the same HTS category. Finally, as 
noted by the petitioner, data concerning U.S. import values for pallets 
is not on the record.

[[Page 15032]]

    Comment 10: Respondents argue that incidental packing items (those 
not directly involved as direct inputs of the subject merchandise, such 
as plastic bags, iron wire, anti rust paper, anti-damp paper, and the 
big iron button) should be disregarded because the individual values of 
these items are de minimis and because the collective value of these 
items is also de minimis.
    Petitioner argues that the Department is required to calculate 
margins as accurately as possible, citing Rhone Poulenc, Inc. v. United 
States, 899 F.2d 1185, 1191 (Fed. Cir. 1990) as support. Petitioner 
asserts that the Department's regulations allow insignificant data to 
be ignored in calculating adjustments to prices, but the regulations do 
not allow the exclusion of such data from constructed value, cost of 
production, or the factors of production.
    Department's Position: We disagree with respondents that certain 
factor inputs should be eliminated from the analysis because of their 
small value. The items identified by respondents as being incidental 
items are all materials used to pack the subject merchandise, and, as 
such, it is appropriate that we value them, absent a compelling reason 
to the contrary.
    Comment 11: Respondents assert that the Indian labor rates used by 
the Department are overly narrow because they are based on a limited 
survey. Respondents also argue that the rates used do not reflect the 
values for the types of workers in the Chinese factories producing the 
subject merchandise. Respondents note that the Department relied upon 
the November 1992 and November 1993 editions of Investing, Licensing & 
Trading Conditions Abroad: India (IL&T India). These reports are 
published by a non-governmental organization which provides estimates 
of Indian labor rates for various types of positions in India based on 
available data. The Department adjusted these wages by 45 percent to 
account for bonuses and fringe benefits, based on an estimated range in 
IL&T India of 40-50 percent. The respondents maintain that the scope of 
the survey on which these estimates were based is very narrow. 
Respondents also argue that the resulting values do not conform with 
Indian law. Respondents assert that the Department should revise the 
adjustment for fringe benefits and bonuses to reflect rates required by 
Indian law. Respondents maintain that the bonuses for unskilled and 
semi-skilled workers should be much smaller, and that no bonus should 
be added for higher wage positions.
    Petitioner argues that while many labor laws in India cover only 
unionized workers, there is no evidence that the data used by the 
Department is based only upon unionized employers, or that unionized 
employees earned higher wages than non-unionized employees, as implied 
by respondents. Petitioner further argues that if the data did only 
cover unionized employees, its usefulness would be increased because 
the tool producers are collectively-owned enterprises controlled 100 
percent by workers and managers.
    Petitioner disagrees with respondents' assertion that the fringe 
benefits and bonuses reported in IL&T India are inappropriate because 
they exceed Indian legal minimums. Petitioner notes that in the 
previous review the Department used data indicating that fringe 
benefits and bonuses could exceed statutory minimums.
    Department's Position: We disagree with respondents. As noted by 
petitioner, there could be benefit levels beyond what is statutorily 
required. Historical data concerning fringe benefits and bonuses are 
more indicative of fringe benefits and bonuses actually paid to workers 
in India than are statutory minima. For this reason, we have continued 
to rely on wage rates and fringe benefit and bonus rates used in the 
preliminary results.
    Comment 12: Respondents argue that the wage rates the Department 
used in the preliminary determination were unreasonably high. 
Respondents note that, in Lighters and Furfuryl Alcohol, the Department 
used Indonesian wage rates of $0.27/hour for unskilled labor and $1.65/
hour for skilled labor, which are lower than those used by the 
Department in the preliminary results of this review. Respondents 
further note that the time period covered by these rates (December 1993 
through May 1994) is contemporaneous with this review period. 
Respondents further argue that both Indonesia and India are surrogate 
countries for the PRC and that the wage rates in the two countries are 
comparable. Respondents suggest that the Department review Foreign 
Labor Trends, India, published by the U.S. Department of Labor. 
Respondents argue that this report shows 1992 wage rates for factory 
workers in Delhi to be much lower for skilled and unskilled workers 
than rates used by the Department.
    Petitioner argues that the cases cited by the respondents involve 
different industries and a different surrogate country (Indonesia), and 
do not offer a reliable benchmark for this review.
    Department's Position: We disagree with respondents. The cases 
cited by the respondents involve different industries, a different 
surrogate country, and a different time period than is covered by this 
review. It is the Department's practice to use, whenever possible, the 
same surrogate for all elements of a factor valuation. Moreover, the 
publication cited by respondents is not on the record of this 
proceeding.
    Comment 13: Respondents argue that the rail freight values used by 
the Department are dated (the rates come from a 1989 cable from the 
U.S. Embassy in Delhi) and should be replaced with more contemporaneous 
data such as those provided in Doing Business in India--An Economic 
Profile, published by the Indian Ministry of External Affairs. 
Respondents aver that this data is superior to that used by the 
Department because it is official Indian government data, it is more 
current than the data used by the Department, and provides specific 
rates on a per kilometer basis. Respondents add that rail rates from 
non-contemporaneous periods could be adjusted using inflation factors.
    Petitioner argues in favor of using the information gathered and 
verified by the U.S. embassy in India. Petitioner favors this 
information because it provides specific rates for particular ranges of 
shipping distances, with long distances having a lower per kilometer 
cost than short hauls. The petitioner argues against the use of an 
average figure, such as that suggested by respondents, because it would 
distort freight costs by overstating the per-kilometer cost for long 
hauls and understating the cost for short hauls. Petitioner contends 
that the figure suggested by respondents represents a guess, as no 
source for the data was provided, and it includes no indication of how 
the total distance shipped could affect the rate.
    Department's Position: The rail freight rate suggested by the 
respondents was submitted for the record of this review after the 
preliminary results were issued, and therefore was returned as untimely 
filed, pursuant to 19 C.F.R. 353.31(a)(3)(1994). Therefore, for these 
final results, we have continued to use the cable data to value rail 
freight.
    Comment 14: Respondents argue that, for distances of 25 kilometers 
or less, no freight charge, or a reduced freight charge, should be used 
for 1993 truck freight. (This is freight for raw materials transported 
from a railyard or port to the factory). Respondents contend that the 
costs for these trucks are already reflected in the company's overhead 
expenses, and the freight charge double-counts these costs. Respondents 
argue that, if the Department does add a freight charge, it should not 
arbitrarily assume that truck freight cost in India for 1 kilometer is 
the same as for 25

[[Page 15033]]
kilometers. Rather, the Department should use the 1992 rate of 0.75 Rs/
MT for one kilometer plus an adjustment factor. This is the rate 
reported to the Department in the June 1992 embassy cable for the Final 
Determination of Sales at Less Than Fair Value: Sulfanilic Acid from 
the People's Republic of China, 57 FR 29705 (July 6, 1992) (Sulfanilic 
Acid), and used in the Final Determination of Sales at Less Than Fair 
Value: Certain Helical Spring Lock Washers from the People's Republic 
of China, 58 FR 48833 (September 20, 1993) (Lock Washers).
    Petitioner argues that there is no evidence that the percentage 
used by the Department included company-owned freight services. 
Petitioner contends that the Department's decision to use the rate for 
25-100 kilometers for distances under 25 kilometers is both reasonable 
and logical. Petitioner notes that rail shippers in India pay the same 
rate for all shipments of less than 500 kilometers, and concludes that 
the grouping of all truck shipments under 100 kilometers is reasonable. 
Petitioner also notes that on short hauls the fixed costs of loading 
and unloading will form a higher proportion of the total cost than on 
long hauls, so minor differences in the distance shipped should not 
have a significant effect on the total cost.
    Department's Position: We disagree with respondents that certain 
truck costs should be considered as factory overhead. There is nothing 
on the record to indicate that factory-owned trucks are used to pick up 
raw materials from the rail yards. In addition, there is no record 
evidence that the Department's grouping of all truck freight under 100 
kilometers is inappropriate or unreasonable. As the petitioner 
correctly points out, the fixed costs of loading and unloading short 
hauls will form a higher proportion of the total cost than long hauls, 
so minor differences in the distance shipped should not have a 
significant effect on the total cost. For these reasons, we have 
continued to value truck freight for these final results as we did for 
the preliminary results.

Final Results of Review

    As a result of our review, we have determined that the following 
margins exist:

------------------------------------------------------------------------
                                                                Margin  
    Manufacturer/exporter              Time period            (percent) 
------------------------------------------------------------------------
Fujian Machinery & Equipment                                            
 Import & Export                                                        
 Corporation:                                                           
    Axes/Adzes..............  2/1/93-1/31/94...............        19.15
    Bars/Wedges.............  2/1/93-1/31/94...............        41.21
    Hammers/Sledges.........  2/1/93-1/31/94...............        25.74
Shandong Machinery Import &                                             
 Export Corporation:                                                    
    Bars/Wedges.............  2/1/93-1/31/94...............        57.03
    Hammers/Sledges.........  2/1/93-1/31/94...............        23.17
    Picks/Mattocks..........  2/1/93-1/31/94...............        80.32
------------------------------------------------------------------------

    The Department shall determine, and the Customs Service shall 
assess, antidumping duties on all appropriate entries. Individual 
differences between United States price and foreign market value 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 this notice of final results of reviews for all 
shipments of HFHTs from the PRC 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 rates for the 
reviewed companies named above which have separate rates will be the 
rates for those firms as stated above for the classes or kinds of 
merchandise listed above; (2) for picks/mattocks from FMEC and axes/
adzes from SMC, which are not covered by this review, the cash deposit 
rates will be the rates established in the most recent review of those 
classes or kinds of merchandise in which those companies recieved 
separate rates--that is, the February 1, 1992 through January 31, 1993 
review; (3) for all other PRC exporters, the cash deposit rates will be 
the PRC rates established in the LTFV investigation; and (4) the cash 
deposit rates for non-PRC exporters of the subject merchandise from the 
PRC will be the rate applicable to the PRC supplier of that exporter. 
The PRC rates established in the LTFV investigations are 45.42 percent 
for hammers/sledges, 31.76 percent for bars/wedges, 50.81 percent for 
picks/mattocks, and 15.02 percent for axes/adzes. These deposit 
requirements shall remain in effect until publication of the final 
results of the next administrative review.
    This notice serves as a final reminder to importers of their 
responsibility under section 353.26 of the Department's regulations to 
file a certificate regarding the reimbursement of antidumping duties 
prior to liquidation of the relevant entries during this review period. 
Failure to comply with this requirement could result in the Secretary's 
presumption that reimbursement of antidumping duties occurred and the 
subsequent assessment of double antidumping duties.
    This notice also serves as a reminder to parties subject to 
administrative protective order (APO) of their responsibility 
concerning the disposition of proprietary information disclosed under 
APO in accordance with section 353.34(d) of the Department's 
regulations. Timely notification of return/destruction of APO materials 
or conversion to judicial protective order is hereby requested. Failure 
to comply with the regulations and the terms of an APO is a 
sanctionable violation.
    This administrative review and notice is in accordance with section 
751(a)(1) of the Act (19 U.S.C. 1675(a)(1)) and section 353.22 of the 
Department's regulations.

    Dated: March 27, 1996.
Susan G. Esserman,
Assistant Secretary for Import Administration.
[FR Doc. 96-8215 Filed 4-3-96; 8:45 am]
BILLING CODE 3510-DS-P