[Federal Register Volume 63, Number 15 (Friday, January 23, 1998)]
[Notices]
[Pages 3536-3539]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-1537]


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DEPARTMENT OF COMMERCE

International Trade Administration
[A-533-810]


Stainless Steel Bar from India: Preliminary Results of New 
Shipper Antidumping Duty Administrative Review

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

ACTION: Notice of preliminary results of New Shipper Antidumping Duty 
Administrative Review: Stainless Steel Bar from India.

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SUMMARY: In response to requests from M/s Panchmahal Steels, Ltd. and 
Ferro Alloys Corporation Limited, the Department of Commerce is 
conducting a new shipper administrative review of the antidumping duty 
order on stainless steel bar from India. This review covers M/s 
Panchmahal Steels, Limited's and Ferro Alloys Corporation Limited's 
sales of the subject merchandise to the United States during the period 
February 1, 1996 through January 31, 1997.
    We have preliminarily determined that M/s Panchmahal Steels, Ltd.'s 
sales have been made below normal value and that Ferro Alloys 
Corporation Limited's sales have not been made below normal value. If 
these preliminary results are adopted in our final results of new 
shipper administrative review, we will instruct the U.S. Customs 
Service to assess antidumping duties equal to the difference between 
the export price and the normal value.
    Interested parties are invited to comment on these preliminary 
results. Parties who submit argument are requested to submit with the 
argument (1) a statement of the issue and (2) a brief summary of the 
argument.

EFFECTIVE DATE: January 23, 1998.

FOR FURTHER INFORMATION CONTACT: Craig Matney or Zak Smith, Office 1,

[[Page 3537]]

Import Administration, International Trade Administration, U.S. 
Department of Commerce, 14th Street and Constitution Avenue, N.W., 
Washington D.C. 20230; telephone (202) 482-0588 or (202) 482-1279, 
respectively.

Applicable Statute

    Unless otherwise indicated, all citations to the statute are 
references to the provisions effective January 1, 1995, the effective 
date of the amendments made to the Tariff Act of 1930 (``the Act'') by 
the Uruguay Round Agreements Act.

SUPPLEMENTARY INFORMATION:

Background

    On February 24 and February 27, 1997, the Department of Commerce 
(``the Department'') received requests from respondents to conduct a 
new shipper administrative review of the antidumping duty order on 
stainless steel bar from India produced by M/s Panchmahal Steels, Ltd. 
(``Panchmahal'') and Ferro Alloys Corporation Limited (``Facor''), 
respectively. The Department published in the Federal Register, on 
March 28, 1997, a notice of initiation of a new shipper administrative 
review of Panchmahal and Facor covering the period August 1, 1996, 
through January 31, 1997 (62 FR 14886). On September 17, 1997, the 
Department published in the Federal Register a notice of extension of 
time limit for this new shipper administrative review (62 FR 48811). 
This notice extended the time for completion of these preliminary 
results to no later than January 14, 1998.

Scope of Review

    Imports covered by this review are shipments of stainless steel bar 
(``SSB''). SSB means articles of stainless steel in straight lengths 
that have been either hot-rolled, forged, turned, cold-drawn, cold-
rolled or otherwise cold-finished, or ground, having a uniform solid 
cross section along their whole length in the shape of circles, 
segments of circles, ovals, rectangles (including squares), triangles, 
hexagons, octagons, or other convex polygons. SSB includes cold-
finished SSBs that are turned or ground in straight lengths, whether 
produced from hot-rolled bar or from straightened and cut rod or wire, 
and reinforcing bars that have indentations, ribs, grooves, or other 
deformations produced during the rolling process.
    Except as specified above, the term does not include stainless 
steel semi-finished products, cut length flat-rolled products (i.e., 
cut length rolled products which if less than 4.75 mm in thickness have 
a width measuring at least 10 times the thickness, or if 4.75 mm or 
more in thickness having a width which exceeds 150 mm and measures at 
least twice the thickness), wire (i.e., cold-formed products in coils, 
of any uniform solid cross section along their whole length, which do 
not conform to the definition of flat-rolled products), and angles, 
shapes and sections.
    The SSB subject to these orders is currently classifiable under 
subheadings 7222.10.0005, 7222.10.0050, 7222.20.0005, 7222.20.0045, 
7222.20.0075, and 7222.30.0000 of the Harmonized Tariff Schedule of the 
United States (``HTSUS''). Although the HTSUS subheadings are provided 
for convenience and customs purposes, our written description of the 
scope of this order is dispositive.

Period of Review

    This review covers two manufacturers/exporters, Panchmahal and 
Facor, and the period February 1, 1996 through January 31, 1997. The 
initiation notice incorrectly stated the period of review as August 1, 
1996 through January 31, 1997.

Date of Sale

    The Department's April 21, 1997, questionnaire instructed 
respondents to use the invoice date as date of sale. It further 
instructed respondent to contact the Department if the exporter 
believed that there was another situation present that would make using 
the date of invoice inappropriate. Facor made a written submission to 
the Department on June 9, 1997, claiming that the purchase order date 
was the appropriate date of sale, because that is the date on which the 
material terms of sale are set. On June 12, 1997, the Department agreed 
that Facor may report its sales to the United States based on purchase 
order date.
    Petitioners objected to the Department's date of sale decision. 
Petitioners claimed that our decision in Wire Rod from India (62 FR 
38976, July 21, 1997) allows only two exceptions (i.e., sales made on 
the basis of long-term contracts and sales made with a long lag time) 
to the rule of using invoice date as date of sale, and that Facor did 
not meet either one. We conducted a further analysis of the information 
on the record and concluded that the purchase order date is the 
appropriate date of sale because the material terms of sale were set at 
this time and no material changes occurred between the purchase order 
date and the invoice date (see, Memorandum to Richard W. Moreland from 
Susan Kuhbach, November 14, 1997).

United States Price

    In calculating the price to the United States, we used export price 
(``EP''), in accordance with section 772(a) of the Act, because the 
subject merchandise was sold directly to the first unaffiliated 
purchaser in the United States prior to importation into the United 
States and constructed export price was not otherwise indicated.
    We calculated EP based on either the CIF or cost and freight 
(``CFR'') price to the United States. In accordance with section 
772(c)(2) of the Act, we made deductions for foreign inland freight and 
international freight.
    Panchmahal claimed an upward adjustment to EP for a ``duty 
drawback'' program. In the preliminary results of the first 
administrative review of this order, we analyzed the functioning of 
this duty drawback program and found that it did not meet the 
Department's criteria for an upward adjustment to EP (see, 62 FR 10540 
at 10541, March 7, 1997). We maintained our position in the final 
results (see, 62 FR 37030, July 10, 1997). We have reexamined the 
program in regard to Panchmahal, and have found no reason to deviate 
from our previous decision. As stated in Certain Welded Carbon Standard 
Steel Pipes and Tubes from India (62 FR 47632 at 47635, September 10, 
1997), ``we determine whether an adjustment to U.S. price for a 
respondent's claimed duty drawback is appropriate when the respondent 
can demonstrate that it meets both parts of our two-part test. There 
must be: (1) A sufficient link between the import duty and the rebate, 
and (2) a sufficient amount of raw materials imported and used in the 
production of the final exported product.'' Because Panchmahal did not 
demonstrate a sufficient link between the import duty and the rebate, 
we have not made an adjustment to EP.

Normal 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 NV, 
we compared respondent's volume of home market sales of the foreign 
like product to the volume of U.S. sales of the subject merchandise, in 
accordance with section 773(a) of the Act. Because the aggregate volume 
of home market sales of the foreign like product was greater than five 
percent of the aggregate volume of U.S. sales of the subject 
merchandise, we determined that the home market provides a viable basis 
for calculating NV. Therefore, in accordance with section 
773(a)(1)(B)(i) of the Act, we based NV on the prices

[[Page 3538]]

at which the foreign like product was first sold to unaffiliated 
customers for consumption in the exporting country, in the usual 
commercial quantities and in the ordinary course of trade.

Level of Trade

    In accordance with section 773(a)(1)(B) of the Act, to the extent 
practicable, we determine NV based on sales in the comparison market at 
the same level of trade (``LOT'') as the EP or CEP transaction. The NV 
LOT is that of the starting-price sales in the comparison market or, 
when NV is based on constructed value, that of the sales from which we 
derive selling, general and administrative expenses and profit. For EP, 
the U.S. LOT is also the level of the starting-price sale, which is 
usually from exporter to importer. For CEP, it is the level of the 
constructed sale from the exporter to the importer.
    To determine whether NV sales are at a different LOT than EP or 
CEP, we examine stages in the marketing process and selling functions 
along the chain of distribution between the producer and the 
unaffiliated customer. If the comparison-market sales are at a 
different LOT, and the difference affects price comparability, as 
manifested in a pattern of consistent price differences between the 
sales on which NV is based and comparison-market sales at the LOT of 
the export transaction, we make an LOT adjustment under section 
773(a)(7)(A) of the Act. Finally, for CEP sales, if the NV level is 
more remote from the factory than the CEP level and there is no basis 
for determining whether the difference in the levels between NV and CEP 
affects price comparability, we adjust NV under section 773(a)(7)(B) of 
the Act (the CEP offset provision). See, Notice of Final Determination 
of Sales at Less Than Fair Value: Certain Cut-to-Length Carbon Steel 
Plate from South Africa, 62 FR 61731 (November 19, 1997).
    In implementing these principles in this review, we reviewed 
information from each respondent regarding the marketing stage involved 
in the reported home market and U.S. sales, including a description of 
the selling activities performed by the respondents for each channel of 
distribution. Pursuant to section 773(a)(1)(B)(i) of the Act and the 
SAA at 827, in identifying levels of trade for EP and home market sales 
we considered the selling functions reflected in the starting prices 
before any adjustments. We expect that, if claimed levels of trade are 
the same, the functions and activities of the seller should be similar. 
Conversely, if a party claims that levels of trade are different for 
different groups of sales, the functions and activities of the seller 
should be dissimilar.
    Based on an analysis of the selling functions, class of customers, 
and level of selling expenses, we found that the marketing process in 
both the home market and the United States were not substantially 
dissimilar for either Panchmahal or Facor. Therefore, we have 
preliminarily found that sales in both markets are at the same LOT and 
consequently no LOT adjustment is warranted.

Cost of Production Analysis

    Based on a cost allegation presented by petitioners, the Department 
found reasonable grounds to believe or suspect that sales by Facor in 
the home market were made at the prices below their respective costs of 
production (``COPs''). As a result, the Department initiated an 
investigation to determine whether Facor made home market sales during 
the POR at prices below its COP, within the meaning of section 773(b) 
of the Act.
    We conducted the COP analysis described below.

A. Calculation of COP

    In accordance with section 773(b)(3) of the Act, we calculated the 
weighted-average COP, by model, based on the sum of the cost of 
materials, fabrication, selling, general and administrative expenses, 
and packing costs.

B. Results of the COP Test

    Pursuant to section 773(b)(2)(C), where less than 20 percent of a 
respondent's sales of a given product were made at prices below the 
COP, we did not disregard any below-cost sales of that product because 
we determined that the below-cost sales were not made in ``substantial 
quantities.'' Where 20 percent or more of Facor's sales of a given 
product were made at prices below the COP, we disregarded the below-
cost sales because such sales were found to be made within an extended 
period of time in ``substantial quantities'' in accordance with 
sections 773(b)(2)(B) and (C) of the Act. Moreover, based on 
comparisons of price to weighted-average COPs for the POR, we 
determined that the below-cost sales of the product were at prices 
which would not permit recovery of all costs within a reasonable period 
of time, in accordance with section 773(b)(2)(D) of the Act.
    We found that Facor made home market sales at below COP prices 
within an extended period of time in substantial quantities. Further, 
we found that these sales prices did not permit for the recovery of 
costs within a reasonable period of time. We therefore excluded these 
sales from our analysis in accordance with section 773(b)(1) of the 
Act.

Preliminary Results of the Review

    As a result of our comparison of EP and NV, we preliminarily 
determine the following weighted-average dumping margins:

------------------------------------------------------------------------
                                                             Margin     
        Manufacturer/exporter              Period           (percent)   
------------------------------------------------------------------------
Panchmahal..........................    2/1/96-1/31/97              0.69
Facor...............................    2/1/96-1/31/97  ................
------------------------------------------------------------------------

    Parties to the proceeding may request disclosure within five days 
of the date of publication of this notice. Any interested party may 
request a hearing within 10 days of publication. Any hearing, if 
requested, will be held 44 days after the publication of this notice, 
or the first workday thereafter. Interested parties may submit case 
briefs within 30 days of the date of publication of this notice. 
Rebuttal briefs, which must be limited to issues raised in the case 
briefs, may be filed not later than 37 days after the date of 
publication of this notice. The Department will issue the final results 
of this administrative review, which will include the results of its 
analysis of issues raised in any such comments, within 90 days of 
issuance of these preliminary results.
    Upon completion of this new shipper administrative review, the 
Department shall determine, and the U.S. Customs Service shall assess, 
antidumping duties on all appropriate entries. Individual differences 
between EP and NV may vary from the percentages stated above. We have 
calculated an importer-specific duty assessment rate based on the ratio 
of the total amount of AD duties calculated for the examined sales made 
during the POR to the total value of subject merchandise entered during 
the

[[Page 3539]]

POR. In order to estimate the entered value, we subtracted 
international movement expenses (e.g., international freight) from the 
gross sales value. This rate will be assessed uniformly on all entries 
made during the POR. The Department will issue appraisement 
instructions directly to the Customs Service.
    The following deposit requirement will be effective upon 
publication of the final results of this new shipper antidumping duty 
administrative review for all shipments of stainless steel bar from 
India entered, or withdrawn from warehouse, for consumption on or after 
the publication date, as provided for by section 751(a)(1) of the Act: 
(1) The cash deposit rate for the reviewed companies will be the rates 
established in the final results of this review; (2) if the exporter is 
not a firm covered in this review, but was covered in a previous review 
or the original less-than-fair-value (``LTFV'') investigation, the cash 
deposit rate will continue to be the company-specific rate published 
for the most recent period; (3) if the exporter is not a firm covered 
in this review, a previous review, or the original LTFV investigation, 
but the manufacturer is, the cash deposit rate will be the rate 
established for the most recent period for the manufacturer of the 
merchandise; and (4) the cash deposit rate for all other manufacturers 
and/or exporters of this merchandise, shall be 12.45 percent, the ``all 
others'' rate established in the LTFV investigation (59 FR 66915, 
December 28, 1994).
    These requirements, when imposed, shall remain in effect until 
publication of the final results of the next administrative review.
    This notice also serves as a preliminary reminder to importers of 
their responsibility under 19 CFR 353.26 to file a certificate 
regarding the reimbursement of antidumping duties prior to liquidation 
of the relevant entries during this review period. Failure to comply 
with this requirement could result in the Secretary's presumption that 
reimbursement of antidumping duties occurred and the subsequent 
assessment of double antidumping duties.
    This administrative review and notice are in accordance with 
section 751(a)(1) of the Act (19 U.S.C. 1675(a)(1)) and 19 CFR 
353.22(h).

    Dated: January 13, 1998.
Robert S. LaRussa,
Assistant Secretary for Import Administration.
[FR Doc. 98-1537 Filed 1-22-98; 8:45 am]
BILLING CODE 3510-DS-P