[Federal Register Volume 64, Number 54 (Monday, March 22, 1999)]
[Notices]
[Pages 13771-13777]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-6831]


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DEPARTMENT OF COMMERCE

International Trade Administration
[A-533-810]


Stainless Steel Bar from India; Final Results of Antidumping Duty 
Administrative Review and New Shipper Review

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

ACTION: Notice of final results of 1997-1998 antidumping duty 
administrative review and new shipper review of stainless steel bar 
from India.

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SUMMARY: On November 12, 1998, the Department of Commerce published the 
preliminary results of antidumping duty administrative review and new 
shipper review of the antidumping duty order on stainless steel bar 
from India. We gave interested parties an opportunity to comment on the 
preliminary results. Based on our analysis of the comments received, we 
have made certain changes for the final results.
    These reviews cover five producers/exporters of stainless steel bar 
to the United States during the period February 1, 1997, through 
January 31, 1998.

EFFECTIVE DATE: March 22, 1999.

FOR FURTHER INFORMATION CONTACT: Zak Smith, James Breeden, or Stephanie 
Hoffman, Import Administration, AD/CVD Enforcement Group I, Office 1, 
U.S. Department of Commerce, 14th Street and Constitution Avenue, NW, 
Washington, D.C. 20230; telephone (202) 482-0189, 482-1174, or 482-
4198, respectively.

Applicable Statute and Regulations

    Unless otherwise indicated, all citations to the Tariff Act of 
1930, as amended (``the Act''), are references to the provisions 
effective January 1, 1995, the effective date of the amendments made to 
the Act by the Uruguay Round Agreements Act (``URAA''). In addition, 
all references to the Department of Commerce's (``the Department's'') 
regulations are to 19 CFR Part 351 (April 1998).

SUPPLEMENTARY INFORMATION:

Background

    On November 12, 1998, the Department published the preliminary 
results of administrative review and new shipper review of the 
antidumping duty order on stainless steel bar from India (63 FR 63288) 
(``preliminary results''). The manufacturers/exporters in this 
administrative review are Bhansali Bright Bars Pvt. Ltd. (``Bhansali'') 
and Venus Wire Industries Limited (``Venus''). The manufacturers/
exporters in this new shipper review are Sindia Steels Limited 
(``Sindia''), Chandan Steel Limited (``Chandan''), and Madhya Pradesh 
Iron & Steel Company (``Madhya''). We received a case brief from Madhya 
on December 18, 1998. We received case and rebuttal briefs from the 
petitioners 1 and the other respondents in February.
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    \1\ Al Tech Specialty Steel Corp., Carpenter Technology Corp., 
Crucible Specialty Metals Division, Crucible Materials Corp., 
Electroalloy Corp., Republic Engineered Steels, Slater Steels Corp., 
Talley Metals Technology, Inc. and the United Steelworkers of 
America (AFL-CIO/CLC).
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Scope of the Review

    Imports covered by these reviews 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

[[Page 13772]]

other deformations produced during the rolling process.
    Except as specified above, the term does not include stainless 
steel semi-finished products, cut length flat-rolled products (i.e., 
cut length rolled products which if less than 4.75 mm in thickness have 
a width measuring at least 10 times the thickness, or if 4.75 mm or 
more in thickness having a width which exceeds 150 mm and measures at 
least twice the thickness), wire (i.e., cold-formed products in coils, 
of any uniform solid cross section along their whole length, which do 
not conform to the definition of flat-rolled products), and angles, 
shapes and sections.
    The SSB subject to this order is currently classifiable under 
subheadings 7222.10.0005, 7222.10.0050, 7222.20.0005, 7222.20.0045, 
7222.20.0075, and 7222.30.0000 of the Harmonized Tariff Schedule of the 
United States (``HTSUS''). Although the HTSUS subheadings are provided 
for convenience and customs purposes, our written description of the 
scope of this order is dispositive.

Comparisons

    We calculated export price and normal value based on the same 
methodology used in the preliminary results, with the following 
exceptions:
    With respect to Bhansali, we conducted a cost investigation as 
discussed in the Cost of Production Analysis section, below. Also, we 
adjusted Bhansali's raw material inputs and scrap offset based on 
differences in the production processes used by Bhansali in the 
production of SSB (see Comment 5, below).

Cost of Production Analysis

    Based on a cost allegation presented by the petitioners, the 
Department found reasonable grounds to believe or suspect that sales by 
Bhansali in the home market were made at prices below their respective 
costs of production (``COP''). As a result, on October 30, 1998, the 
Department initiated an investigation to determine whether Bhansali 
made home market sales during the period of review (``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) of the Act, where less than 20 
percent of a respondent's sales of a given product are made at prices 
below the COP, we do not disregard any below-cost sales of that product 
because the below-cost sales were not made in ``substantial 
quantities.'' However, where 20 percent or more of a respondent's sales 
of a given product are made at prices below the COP, we disregard the 
below-cost sales because such sales are being made within an extended 
period of time in ``substantial quantities'' (see sections 773(b)(2)(B) 
and (C) of the Act) and because, based on comparisons of price to 
weighted-average COPs for the POR, we determine that the below-cost 
sales of the product are at prices which would not permit recovery of 
all costs within a reasonable period of time (see section 773(b)(2)(D) 
of the Act).
    We found that Bhansali 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 the recovery of costs 
within a reasonable period of time. Therefore, we excluded these sales 
from our analysis in accordance with section 773(b)(1) of the Act.

Interested Party Comments

    In accordance with 19 CFR 351.309, we invited interested parties to 
comment on our preliminary results. We received written comments from 
the respondents and the petitioners and rebuttal comments from 
Bhansali, Venus, Sindia, and Madhya.

Comment 1: Treatment of Alleged Below-Cost Sales as Outside the 
Ordinary Course of Trade

    The petitioners state that the Department should exclude from its 
analysis certain third country sales made by Sindia and Venus that are 
allegedly below cost and, thus, outside the ordinary course of trade. 
They assert that by including such below-cost sales in the preliminary 
results, the Department erroneously made a negative determination of 
dumping. Furthermore, the petitioners argue that a cost allegation is 
not necessary because both Sindia and Venus submitted cost data that 
indicates that certain third country market sales were made below the 
cost of production. To correct this alleged error, the petitioners 
argue that the Department should exclude those below-cost sales from 
its analysis for the final determination.
    Specifically, the petitioners argue that section 771(15) of the Act 
states that below-cost sales are outside the ordinary course of trade 
and, thus, should be excluded from the Department's analysis. The 
petitioners cite to Mechanical Transfer Presses from Japan; Final 
Results of Antidumping Duty Administrative Review and Revocation of 
Antidumping Duty Administrative Order in Part, 63 FR 37331 (July 10, 
1998) (``Mechanical Transfer Presses'') and Mitsubishi Heavy 
Industries, Ltd. v. U.S., Slip Op. 98-82 (June 23, 1998) (``Mitsubishi 
v. U.S.'') to support their argument. According to the petitioners, in 
Mechanical Transfer Presses, the Department did not include sales that 
were found to be below the cost of production when calculating 
constructed value (``CV'') profit, even though no formal cost 
investigation was initiated. In Mitsubishi v. U.S., the Court of 
International Trade (``CIT'') upheld the Department's decision to 
exclude below-cost sales in the calculation of selling, general, and 
administrative expenses (``SG&A'') and profit, even though no below-
cost investigation was conducted. Furthermore, the petitioners argue 
that, even if sales are not excluded on the basis of being made below 
cost, they are still outside the ordinary course of trade because they 
were made at aberrationally low prices.
    The respondents, Venus and Sindia, argue that the cases the 
petitioners rely upon are distinguishable from the present case. The 
respondents note that, in the investigation underlying Mitsubishi v. 
U.S., the petitioner provided a timely allegation of sales made below 
cost, whereas, in the present case, the petitioners failed to make a 
timely allegation (see Notice of Final Determination of Sales at Less 
Than Fair Value: Large Newspaper Printing Presses and Components 
Thereof, Whether Assembled or Unassembled, From Japan, 61 FR 38139 
(July 23, 1996) (``LNPP'').
    The respondents also note that the two cases cited by the 
petitioners involved complex products and that the Department based 
normal value on CV. Thus, despite the lack of a formal cost 
investigation, the Department conducted an informal cost investigation. 
According to the respondents, the products included in this antidumping 
duty order are not complex in nature and there has not been a 
suggestion that CV should be used for normal value when price-to-price 
comparisons exist. Therefore, it is not necessary for the Department to 
self-initiate a sales below-cost investigation. Furthermore, the 
respondents note that in Mechanical Transfer Presses the Department had 
found below-cost sales in a prior review and, thus, had reason

[[Page 13773]]

to believe that there were below-cost sales in the current review. 
Again, the respondents note that they have never been found to have 
made sales below cost and, thus, any comparison to Mechanical Transfer 
Presses is inappropriate.
    Lastly, the respondents argue that, in the present case, the 
Department can only conduct a meaningful cost analysis if the 
respondents submit a response to Section D (Cost of Production and 
Constructed Value) of the original questionnaire. Barring such a 
response, the respondents argue that the Department cannot determine 
whether a respondent would be able to recover costs over an extended 
period of time on the sales in question.
    Department's Position: We disagree that these alleged below-cost 
sales should be disregarded as outside the ordinary course of trade. 
Contrary to the petitioners' assertion, the Act explicitly provides 
that sales disregarded pursuant to a cost investigation are outside the 
ordinary course of trade (see section 771(15) of the Act). In a cost 
investigation, the Department not only considers whether sales are 
below cost but also whether the below-cost sales are in substantial 
quantities within an extended period of time and are not at prices 
which permit the recovery of all costs within a reasonable period of 
time. As the Department stated in the preamble to its regulations:

    The statutory definition of ordinary course of trade * * * 
provides that only those below-cost sales that are ``disregarded 
under section 773(b)(1)'' of the Act are automatically considered to 
be outside the ordinary course of trade. In other words, the fact 
that sales of the foreign like product are below cost does not 
automatically trigger their exclusion. Instead, such sales must have 
been disregarded under the cost test before the Department will 
exclude them. * * *

    See Antidumping Duties; Countervailing Duties, 62 FR 27296, 27359 
(May 19, 1997) (``Final Rule'').
    We note that under the old law (i.e., prior to the amendments made 
to the Act by the URAA), the Department's practice was not to exclude 
below cost sales as outside the ordinary course of trade, regardless of 
the results of the cost test. See, e.g., Antifriction Bearings (Other 
Than Tapered Roller Bearings) and Parts Thereof from Thailand; Final 
Results of Antidumping Duty Administrative Review and Revocation of 
Antidumping Duty Order, 61 FR 33711, 33712 (June 28, 1996) (In 
calculating CV profit, we stated that we were rejecting petitioner's 
``suggestion that below-cost sales are per se outside the ordinary 
course of trade); Antifriction Bearings from France, Germany, Italy, 
Japan, Romania, Singapore, Sweden, Thailand, and the United Kingdom, 58 
FR 39729 (July 26, 1993) (same); cf. Certain Fresh Cut Flowers from 
Ecuador, 52 FR 2128 (January 20, 1987) (We rejected petitioner's 
argument from its case brief that home market sales should be 
disregarded as below cost by characterizing it as an untimely cost 
allegation). This practice was upheld by the CIT. See The Torrington 
Co. v. United States, 960 F. Supp. 339, 343 (CIT 1997).
    This is in contrast to the new law, which provides explicitly that 
sales that fail the cost test (i.e., those ``disregarded under section 
773(b)(1)'' of the Act) are outside the ordinary course of trade. The 
Act does not provide for automatic exclusion of a sale simply because 
it is below cost. Therefore, consistent with the explicit requirements 
of the post-URAA Act and the Department's long-standing practice, we 
will not automatically exclude any of Venus' or Sindia's allegedly 
below cost sales as outside the ordinary course of trade as none of 
them have been disregarded pursuant to a cost investigation.
    Furthermore, in FAG (U.K.) Ltd. v. United States, 24 F. Supp. 2d 
297 (CIT 1998), the CIT stated that we may not initiate a cost 
investigation without ``reasonable grounds to believe or suspect'' that 
sales were made below the cost of production. According to the CIT, 
reasonable grounds may include (1) a sufficient allegation of below 
cost sales made by the petitioner; or (2) below cost sales disregarded 
in the previous review.
    In the present case, the petitioners did not make a timely below-
cost allegation and we have not found below-cost sales made by these 
companies in a previous review. Indeed, the only ``reasonable grounds'' 
we would have to initiate a cost investigation would be the 
petitioners' argument that the difference in merchandise (``difmer'') 
cost data indicates that the respondents have made sales below cost. 
However, this type of data is precisely the type of data that the 
petitioners could have used to construct a cost allegation (see Final 
Rule, at 62 FR 27335-273336). While the Department may consider whether 
this data, included as part of a cost allegation, provides reasonable 
grounds to initiate a formal cost investigation, to do so here would 
circumvent the rule that the petitioners bring a below-cost allegation 
within 20 days after the respondent files its comparison market 
questionnaire response. See 19 CFR 351.301(d)(2). Therefore, because we 
did not receive a timely below-cost allegation, and because we have not 
disregarded sales from the respondents as a result of a cost test in 
the most recent prior review, we find that we do not have reasonable 
grounds to begin a cost investigation. Thus, as only below-cost sales 
disregarded pursuant to a cost investigation may be disregarded as 
outside the ordinary course of trade, and we are not conducting a cost 
investigation, none of the respondents' alleged below-cost sales can be 
found to be outside the ordinary course of trade based solely on their 
below-cost status. As discussed in the next paragraph, the Department 
may make exceptions under certain unique circumstances. However, no 
such circumstances are present in this case.
    The respondents are correct in stating that both LNPP and 
Mechanical Transfer Presses are distinguishable from the present case. 
Specifically, while we indicated that in certain situations we do have 
the authority to disregard below-cost sales absent a formal cost 
investigation, we also explained that our normal practice is to 
initiate a formal cost investigation before excluding below-cost sales 
as outside the ordinary course of trade. We explained that the ``unique 
circumstances'' of the cases required us to perform a cost analysis 
even though we did not formally initiate a cost investigation. In both 
cases, we found that the particular market situation did not permit 
proper price-to-price comparisons and, therefore, normal value was 
based on CV. When receiving the cost information for each sale, we were 
readily able to determine that certain sales were below cost and, thus, 
when calculating CV profit, we excluded those sales that would have 
been disregarded, had a formal cost test been conducted, as outside the 
ordinary course of trade. This review is in no way comparable to these 
cases, as we do not consider each sale to involve a separate model and, 
thus, extensive CV information has not been provided as a basis for 
normal value.
    The argument that we should exclude sales that are outside the 
ordinary course of trade because they were made at aberrationally low 
prices is in effect an argument that below-cost sales should be 
excluded. The petitioners are making the same argument from a different 
angle. We have addressed it through our discussion of the alleged 
below-cost sales.
    Therefore, as discussed above, and in accordance with the Act and 
our practice, we are not disregarding alleged below-cost sales made by 
Sindia and Venus in third country markets as outside the ordinary 
course of trade

[[Page 13774]]

without having disregarded those sales pursuant to a formal cost 
investigation.

Comment 2: Acceptance of Untimely Response

    Madhya argues that the Department should accept its response to 
Section D (Cost of Production and Constructed Value) of the original 
questionnaire and to the Department's supplemental questionnaire, 
despite the Department's rejection of the response as untimely. While 
Madhya does not deny the fact that its response was untimely, it notes 
that it had communication difficulties with its counsel and believed 
that upon sending its submission, the response would be received by the 
deadline. Madhya also argues that its untimely submission did not 
impede the review, especially as the Department had a significant 
amount of time to complete the review as evidenced by the continued 
review and issuance of supplemental questions to Bhansali after the 
preliminary results. Thus, Madhya states that the new shipper review 
should proceed.
    The petitioners argue that by failing to meet the Department's 
deadlines, Madhya voluntarily terminated its participation in this 
review and that the Department properly rejected Madhya's submission.
    Department's Position: Section 351.302 of our regulations, among 
other things, explicitly sets forth the procedures for requesting an 
extension of time, the manner in which the Department will extend a 
deadline, and the circumstances by which we will return untimely 
submissions. Madhya was aware of these requirements, as they asked for 
several extensions throughout the proceeding. In fact, in this 
particular instance Madhya asked for three extensions. We granted the 
first two but denied the last request, because we did not receive an 
adequate explanation or reasoning as to why the extension was needed. 
Nonetheless, Madhya submitted its responses on September 17, 1998. 
However, because Madhya failed to meet an already extended deadline and 
provided no explanation as to why it did not meet the extended 
deadline, we rejected its response as untimely. Section 351.302(d) of 
our regulations states that unless the Secretary extends the time for 
submission, ``the Secretary will not consider or retain in the official 
record of the proceeding: (i) Untimely filed factual information. * * 
*'' While it may be true that Madhya had difficulties communicating 
with its counsel, that Madhya intended to respond in a timely manner, 
and that we had the administrative resources and time to conduct a full 
review, such argumentation and statements do not change the fact that 
Madhya missed the deadline to file its submission and that, in 
accordance with our regulations, we properly rejected and have not 
considered Madhya's untimely submission.

Comment 3: Application of Facts Available

    Madhya argues that, because it has been cooperative and has not 
impeded the review, the application of adverse facts available against 
it in the preliminary results was inappropriate. Madhya cites AK Steel 
Corp. v. U.S., 988 F. Supp. 594, 605 (CIT 1997) in support of its 
proposition that adverse facts available may only be imposed if the 
Department finds that a review has been impeded. With respect to the 
petitioners' contention that the Department should use the most adverse 
facts available, Madhya argues that the Department does not impose most 
adverse facts available when the circumstances are such that the 
respondent requested a review, the petitioner did not request a review, 
and when the respondent submitted responses to Department 
questionnaires (see Antifriction Bearings (Other Than Tapered Roller 
Bearings) and Parts Thereof From France; et al.; Final Results of 
Antidumping Duty Administrative Reviews, 57 FR 28360, 28391 (June 24, 
1992).
    Although the petitioners agree with the Department's use of adverse 
facts available in the preliminary results and our determination that 
Madhya was uncooperative, they disagree with our use of the ``all 
others'' rate established in the less-than-fair-value (``LTFV'') 
investigation as the adverse facts available rate. They argue that 
assigning Madhya this rate rewards the company for its failure to 
supply requested information because the ``all others'' rate is not the 
highest adverse rate. Thus, the petitioners state that the Department 
should assign the highest rate available for any respondent in the LTFV 
investigation, which was 21.02 percent applied to Mukand Ltd.
    Department's Position: As noted in our preliminary results, Madhya 
failed to submit its questionnaire responses on time and failed to 
provide adequate reasons for its delays. Thus, we preliminarily 
determined that Madhya failed to cooperate to the best of its ability 
to comply with a request for information under section 776(b) of the 
Act. The respondent's contention that we may only use adverse facts 
available when a review has been impeded does not comport with the 
plain language of the statute, which states, ``If the administering 
authority * * * finds that an interested party has failed to cooperate 
by not acting to the best of its ability to comply with a request for 
information from the administering authority * * *, the administering 
authority * * * may use an inference that is adverse to the interests 
of that party in selecting from among the facts otherwise available.'' 
See section 776(b) of the Act. There is no suggestion in the statute or 
in our regulations that the measurement of whether a party has not 
acted to the best of its ability depends on whether the review has been 
impeded.
    Thus, the issue is not whether Madhya impeded our review process, 
but rather if it failed to cooperate to the best of its ability. We 
gave Madhya ample opportunity to submit the information requested. 
However, instead of submitting the information by the third established 
deadline, its counsel requested yet another extension of the time limit 
because counsel had not yet heard from Madhya. Based on the above, 
Madhya failed to submit information in a timely manner. Consequently, 
the Department determined that Madhya did not cooperate to the best of 
its ability.
    With regard to the petitioners' argument that we should apply the 
LTFV's highest rate as adverse facts available, we note that the 
statute and regulations provide us with discretion when selecting an 
adverse rate. Above all, the decision on appropriate adverse facts 
available must be made on a case-by-case basis. In selecting a margin 
which would appropriately reflect our decision to use adverse facts 
available for Madhya, we have taken into consideration the fact that, 
as a first-time respondent, its ability to comply with our requests for 
information could be distinguished from, for example, the ability of a 
more experienced company. We also note that Madhya did make some effort 
to respond to our requests for information. See Certain Fresh Cut 
Flowers From Colombia; Final Results and Partial Rescission of 
Antidumping Duty Administrative Review, 62 FR 53287, 53291-53292 
(October 14, 1997) (in which we examined the efforts the respondent 
made to comply with requests for information, the respondent's relative 
experience, and the relative levels of available calculated margins 
when selecting the appropriate adverse facts available margin).
    In selecting a margin which would appropriately reflect our 
decision to use adverse facts available for Madhya, we examined the 
rates applicable to SSB from India throughout the course of the

[[Page 13775]]

proceeding. Also, in accordance with the Statement of Administrative 
Action (``SAA''), we considered the extent to which Madhya may benefit 
from its own lack of cooperation in determining whether the use of the 
12.45 percent rate is sufficiently adverse under the circumstances of 
this case. See SAA, H. DOC No. 316, vol.1, 103d Cong., 2d Sess., at 870 
(1994). Given Madhya's level of participation in this segment of the 
proceeding, we determine that this rate is sufficiently adverse to 
encourage full cooperation in future segments of the proceeding. 
Therefore, as adverse facts available, we are continuing to use a rate 
of 12.45 percent, which reflects the ``all others'' rate from the LTFV 
investigation and is the rate which applied to Madhya prior to this 
review.

Comment 4: Duty Drawback

    The petitioners support the Department's preliminary determination 
that the respondents did not meet the Department's criteria for an 
upward adjustment to export price. The petitioners maintain that the 
respondents' use of duty drawback fails the Department's two-part test 
for drawback claims because the respondent did not provide 
documentation establishing: (1) A direct link between the duties 
imposed and those rebated, and (2) that the company imported a 
sufficient amount of raw materials to account for the drawback 
received.
    The petitioners also argue that because the respondents have failed 
to document that there were sufficient imports to account for the 
drawback claimed, the Department should not offset the respondents' 
material costs by the claimed duty drawback amounts. Specifically, the 
petitioners note that, given the lack of documentation, the Department 
has no way of ensuring that imported inputs were used in the production 
of SSB and, thus, any adjustment to material input costs may exceed the 
amount of import duties paid.
    The respondents argue that even if the Department does not grant an 
upward adjustment to the U.S. price for duty drawback, an adjustment 
should be made to reduce material costs. The respondents argue that the 
standards for evaluating the two different adjustments are not the same 
and that the Department has accepted the offset to material costs in 
past segments of this proceeding.
    Department's Position: When evaluating a duty drawback program, we 
consider whether the import duty and duty drawback are directly linked 
to, and dependent upon, one another and whether the company claiming 
the adjustment can show that there were sufficient imports of the 
imported raw materials to account for the drawback received on the 
exported product (see Certain Welded Carbon Standard Steel Pipes and 
Tubes from India, 62 FR 47632, 47634 (September 10, 1997)).
    None of the respondents have provided adequate documentation 
establishing a sufficient link between import duties paid and duty 
drawbacks generally received under the program. Moreover, there is no 
indication that any of the respondents imported inputs in sufficient 
quantities to account for rebates received under the program. In fact, 
Sindia stated that it did not import any goods under the credit it 
reported but instead transferred this credit to other parties. Venus 
stated that it is not possible to establish the link between import 
duties paid and duty drawbacks generally received because it often 
transferred its duty drawback license to other companies. Accordingly, 
as in the preliminary results, no adjustment to the U.S. price for duty 
drawback has been made.
    As CV is not the basis for normal value, we have not offset 
material costs.

Comment 5: Application of Facts Available for Bhansali

    The petitioners argue that Bhansali did not properly revise its 
methodology to account for the two different production processes it 
uses to make SSB and, therefore, the Department should rely on facts 
available for Bhansali. The petitioners allege that Bhansali has 
significantly impeded the proceeding by not supplying this information. 
Specifically, the petitioners argue that Bhansali has failed to account 
for the different yield losses between the two production processes. 
The petitioners argue that Bhansali's failure to provide a complete and 
accurate response prevents the Department from accurately determining 
whether Bhansali's comparison market sales were below the cost of 
production and in substantial quantities. Moreover, the petitioners 
argue that Bhansali is attempting to control the review process through 
the submission of piecemeal information. Thus, Bhansali should receive 
the ``all others'' rate from the LTFV investigation. The petitioners 
cite Pistachio Group of the Association of Food Industries v. United 
States, 671 F. Supp. 31, 40 (CIT 1987) and Atlantic Sugar, Ltd. v. 
United States, 744 F. 2d. 1556, 1560 (CIT 1997) in support of their 
argument.
    Bhansali counters that it has responded to the Department's request 
to identify and quantify the differences between the two processes to 
the best of its ability. With respect to the yield loss ratio, the 
respondent argues that it does not track actual processing yield or 
losses in the production cycle in its accounting records and, 
therefore, it has reported the ratio it uses in its internal cost 
accounting and which it believes is the standard yield loss ratio for 
the industry. Furthermore, the respondent contends that the petitioners 
have not presented any evidence substantiating their argument that 
yield losses differ among the two production processes.
    Department's Position: After reviewing the petitioners' concerns 
regarding Bhansali's methodology for calculating the yield loss for its 
respective production processes, we found it necessary to seek 
additional information in order to ensure that our calculations are as 
accurate as possible. Therefore, we allowed interested parties the 
opportunity to submit information with respect to Bhansali's yield loss 
ratio. In response to our request, the petitioners submitted an 
affidavit from a domestic producer of SSB attesting to the various 
yield losses applicable to the different production processes used by 
the respondent. Bhansali was unable to provide information supporting 
the number used in its calculations on a process-specific basis. Thus, 
for purposes of the final results, as facts available, we are adjusting 
Bhansali's raw material inputs based on the information submitted by 
the petitioners. In addition, because the production processes in 
question generate different amounts of scrap, we are also adjusting the 
scrap offset to account for the change in the yield loss.
    We determine that, in accordance with section 776(a) of the Act, 
the use of facts available is appropriate because the necessary 
information on yield loss ratios was not available on the record. 
Specifically, while Bhansali did provide an estimated yield loss ratio 
it uses in its internal cost accounting in its normal course of 
business, it failed to provide information demonstrating how this 
estimate corresponds to actual yield loss attributable to the different 
processes it uses to produce SSB. Therefore, we find Bhansali's yield 
loss estimate does not reasonably reflect its differences in costs. 
Thus, when calculating the appropriate COP for each sale we applied, as 
facts available, a yield loss ratio that more reasonably conformed to 
the particular process used to produce the merchandise in question.

Comment 6: General and Administrative (``G&A'') and Interest 
Calculations

    The petitioners argue that Bhansali's reported calculations of G&A 
and

[[Page 13776]]

interest expenses are not based on its audited financial statements. 
The petitioners assert that it is the Department's long-standing policy 
to calculate the G&A and interest expense ratios based on the full-year 
G&A expense and net interest expense as reported in the audited 
financial statements that most closely corresponds to the POR. See 
Final Determination of Sales at Less Than Fair Value: Canned Pineapple 
Fruit From Thailand, 60 FR 29553, 29565 (June 5, 1995). Therefore, the 
Department should reject Bhansali's reported G&A and interest expenses 
and use the ratios that the petitioners calculated based on Bhansali's 
audited financial statements.
    The respondent argues that by including the total amount of 
interest expense listed in its financial statements, the petitioners 
are double-counting interest expense. The respondent contends all 
financial expenses have been accounted for in its sales databases and, 
therefore, should be excluded from the calculation of the interest 
expense ratio. Furthermore, the respondent notes that the petitioners 
have included in their calculation the line item ``bank charges, 
commission and interest.'' The respondent argues that these expenses 
are also sale specific and should not be included in the calculation of 
interest expense.
    The respondent further argues that the petitioners' calculation of 
the G&A expense ratio is erroneous because it double-counts 
depreciation expenses. The respondent notes that it included all 
depreciation expenses in the fixed overhead field. Therefore, Fixed 
overhead should be reduced by the amount of depreciation expenses 
allocated to G&A.
    The respondent also notes that the petitioners included an amount 
for the employer's contribution in its calculation of the G&A ratio. 
This expense was already included in the direct labor field.
    Department's Position: It is our standard practice to rely on a 
company's audited financial statements in calculating the G&A and 
interest expense ratios. Thus, we have recalculated the G&A and 
interest ratios using the profit and loss figures from the fiscal year 
that most closely corresponds to the POR. With respect to the 
calculation of the interest ratio, we included the total amount of 
interest expense listed in Bhansali's financial statements because we 
were unable to reconcile this amount to its specific sales. However, we 
did not include ``bank charges, commission and interest'' in this 
calculation, as the petitioners did, because the respondent reported 
these expenses in its sales listing. In addition, we did not include 
depreciation expenses or the employer's contribution in our calculation 
of the G&A ratio because the respondent accounted for these expenses in 
the fixed overhead and direct labor fields, respectively.

Comment 7: Scrap Sales

    The petitioners allege that Bhansali's reported scrap income offset 
is overstated because it includes scrap sales outside the POR. 
Therefore, this figure should be adjusted downward.
    The respondent argues that its calculation of scrap income offset 
is based on its most recently completed fiscal year and allocated to 
total raw materials consumed over the same period. The respondent 
further argues that its methodology represents a reasonable lag between 
production and scrap sales.
    Department's Position: It is our standard practice to allow a 
company to report COP and CV figures based on its fiscal year if the 
company's fiscal year ends within three months of the POR. Given that 
Bhansali's most recently completed fiscal year ends two months after 
the POR, we find that the respondent's methodology for calculating the 
scrap income offset is reasonable.

Final Results of Review

    As a result of these reviews, we find that the following margins 
exist for the period February 1, 1997, through January 31, 1998.

------------------------------------------------------------------------
                                                                 Margin
                    Manufacturer/Exporter                      (percent)
------------------------------------------------------------------------
Bhansali.....................................................       0.00
Venus........................................................       0.23
Sindia.......................................................       0.19
Chandan......................................................       0.00
Madhya.......................................................      12.45
------------------------------------------------------------------------

    Parties to the proceeding may request disclosure within five days 
after the date of announcement or, if there is no public announcement, 
within five days after the date of publication of this notice. See 19 
CFR 351.224. The results of these reviews shall be the basis for the 
assessment of antidumping duties on entries of merchandise covered by 
the reviews and for future deposits of estimated duties for the 
manufacturers/exporters subject to these reviews. We have calculated an 
importer-specific duty assessment rate based on the ratio of the total 
amount of antidumping duties calculated for the examined sales to the 
total value of those sales examined. The Department will issue 
appraisement instructions directly to the Customs Service.
    Furthermore, the following deposit requirements will be effective 
for all shipments of the subject merchandise entered, or withdrawn from 
warehouse, for consumption on or after the publication date of these 
final results of this administrative review and new shipper review, as 
provided 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 these reviews; (2) for companies not covered in these 
reviews, but covered in previous reviews or the 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 these reviews, a prior review, or the original 
investigation, but the manufacturer is, the cash deposit rate will be 
the most recent rate established for the manufacturer of the 
merchandise; and (4) if neither the exporter nor the manufacturer is a 
firm covered in these reviews or any previous review or the original 
investigation, the cash deposit rate will be the ``all others'' rate of 
12.45 percent established in the LTFV investigation (59 FR 66915, 
December 28, 1994).
    These deposit requirements will remain in effect until publication 
of the final results of the next administrative review.
    This notice also serves as a final reminder to importers of their 
responsibility under 19 CFR 351.402(f) to file a certificate regarding 
the reimbursement of antidumping duties prior to liquidation of the 
relevant entries during this review period. Failure to comply with this 
requirement could result in the Secretary's presumption that 
reimbursement of antidumping duties occurred and the subsequent 
assessment of double antidumping duties.
    This notice also serves as a reminder to parties subject to 
administrative protective orders (``APOs'') of their responsibility 
concerning the disposition of proprietary information disclosed under 
APO in accordance with 19 CFR 351.305(a)(3). Timely written 
notification of the 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 new shipper review and notice 
are in accordance with sections 751(a)(1), 751(a)(2)(B), and 777(i)(1) 
of the Act.


[[Page 13777]]


    Dated: March 12, 1999.
Robert S. LaRussa,
Assistant Secretary for Import Administration.
[FR Doc. 99-6831 Filed 3-19-99; 8:45 am]
BILLING CODE 3510-DS-P