[Federal Register Volume 64, Number 164 (Wednesday, August 25, 1999)]
[Notices]
[Pages 46350-46354]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-22083]


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DEPARTMENT OF COMMERCE

International Trade Administration
[A-533-810]


Stainless Steel Bar from India; Preliminary Results of New 
Shipper Review

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

ACTION: Notice of preliminary results of new shipper review of 
stainless steel bar from India.

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SUMMARY: In response to requests from Jyoti Steel Industries, Parekh 
Bright Bars Pvt. Ltd., and Shah Alloys Ltd., the Department of Commerce 
is conducting a new shipper review of the antidumping duty order on 
stainless steel bar from India. This review covers these companies' 
sales of stainless steel bar to the United States during the period 
February 1, 1998 through July 31, 1998.
    We have preliminarily determined that, during the period of review, 
Parekh Bright Bars Pvt. Ltd. has made sales of subject merchandise 
below normal value and that Jyoti Steel Industries and Shah Alloys Ltd. 
have not made sales of subject merchandise below normal value. If these 
preliminary results are adopted in our final results, we will instruct 
the Customs Service not to assess antidumping duties.
    Interested parties are invited to comment on these preliminary 
results.

EFFECTIVE DATE: August 25, 1999.

FOR FURTHER INFORMATION CONTACT: Stephanie Hoffman, James Breeden, or 
Melani Miller, Office 1, AD/CVD Enforcement, Import Administration, 
International Trade Administration, U.S. Department of Commerce, 14th 
Street and Constitution Avenue, N.W., Washington D.C. 20230; telephone 
(202) 482-4198, (202) 482-1174, or (202) 482-0116, respectively.

SUPPLEMENTARY INFORMATION:

Applicable Statute

    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. In addition, all 
references to the Department of Commerce's (``the Department's'') 
regulations are to 19 CFR Part 351 (April 1998).

Background

    On August 18 and August 31, 1998, the Department received requests 
from Jyoti Steel Industries (``Jyoti''), Parekh Bright Bars Pvt. Ltd. 
(``Parekh''), and Shah Alloys Ltd. (``Shah'') to conduct a new shipper 
review of the antidumping duty order on stainless steel bar from India. 
Our notice initiating the new shipper review of these companies was 
published in the Federal Register, on October 30, 1998 (63 FR 58367). 
The period covered by this review is February 1, 1998, through July 31, 
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

[[Page 46351]]

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 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.

Use of Facts Otherwise Available

    Parekh failed to respond to the Department's supplemental 
questionnaire and request for cost information (i.e., Section D of the 
original questionnaire). Section 776(a)(2)(A) of the Act provides for 
the use of facts available when an interested party withholds 
information that has been requested by the Department. As described in 
more detail below, Parekh has failed to provide information explicitly 
requested by the Department; therefore, we must resort to the facts 
otherwise available.
    In using the facts otherwise available, however, pursuant to 
section 782(e) of the Act, the Department must determine whether 
information Parekh already submitted for the record of this review may 
be used in calculating a dumping margin. Section 782(e) of the Act 
provides that the Department shall not decline to consider information 
that is submitted by an interested party and that is necessary to the 
determination but which does not meet all the applicable requirements 
established by the Department if--
    (1) The information is submitted by the deadline established for 
its submission,
    (2) The information can be verified,
    (3) The information is not so incomplete that it cannot serve as a 
reliable basis for reaching the applicable determination,
    (4) The interested party has demonstrated that it acted to the best 
of its ability in providing the information and meeting the 
requirements established by the Department with respect to the 
information, and
    (5) The information can be used without undue difficulties.
    Parekh did respond to the Department's original questionnaire and a 
supplemental questionnaire. However, Parekh failed to respond to a 
second supplemental questionnaire requesting clarification of deficient 
information in Parekh's previous responses. Moreover, as explained in 
the ``Normal Value'' section of this notice below, the Department has 
preliminarily determined to base normal value on constructed value 
(``CV'') for all three respondents. Parekh failed to provide requested 
cost information necessary for the calculation of CV. Therefore, we 
find the information already on the record so incomplete that it cannot 
serve as a reliable basis for calculating a dumping margin. 
Consequently, we are not using any of the information submitted by 
Parekh for our preliminary results and are relying instead on facts 
available.
    In selecting from among the facts otherwise available, section 
776(b) of the Act provides that the Department may use an inference 
that is adverse to the interests of a party if it determines that party 
has failed to cooperate to the best of its ability. On May 18, 1999, 
the Department issued a second supplemental questionnaire to Parekh. 
The Department did not receive a response to this questionnaire, nor 
did it receive a request from Parekh for an extension of time to 
respond. The Department made several efforts to contact Parekh 
regarding the status of its questionnaire response, but was unable to 
reach any of Parekh's personnel. Consistent with section 782(d) of the 
Act, the Department sent a letter to Parekh on July 16, 1999, advising 
the company that its lack of cooperation may result in the use of facts 
otherwise available. Parekh did not respond to this letter. 
Additionally, in the Department's May 18, 1999, letter to Parekh, the 
Department informed Parekh that if it chose not to offer evidence 
demonstrating why a particular market situation does not exist in the 
home market, it should submit a response to section D of the original 
questionnaire (i.e., cost information). Parekh did not submit any 
information concerning the particular market situation, nor did it 
submit cost information.
    The Department finds that by not providing necessary information 
specifically requested by the Department and discontinuing its 
participation in this review, Parekh has failed to cooperate to the 
best of its ability. Therefore, in selecting facts available, the 
Department determines that an adverse inference is warranted. As 
adverse facts available, we have preliminarily assigned a margin of 
21.02 percent to Parekh's sales of the subject merchandise.
    This margin, calculated for sales by Mukand Limited during the 
investigation, represents the highest weighted-average margin 
determined for any firm during any segment of this proceeding. 
Information from prior segments of the proceeding constitutes secondary 
information and section 776(c) of the Act provides that the Department 
shall, to the extent practicable, corroborate that secondary 
information from independent sources reasonably at its disposal. The 
Statement of Administrative Action (``SAA'') provides that 
``corroborate'' means simply that the Department will satisfy itself 
that the secondary information to be used has probative value (see, 
H.R. Doc. 316, Vol. 1, 103d Cong., 2d Sess. 870 (1994)).
    To corroborate secondary information, the Department will, to the 
extent practicable, examine the reliability and relevance of the 
information to be used. However, unlike other types of information, 
such as input costs or selling expenses, there are no independent 
sources for calculated dumping margins. Thus, in an administrative 
review, if the Department chooses as adverse facts available a 
calculated dumping margin from a prior segment of the proceeding, it is 
not necessary to question the reliability of the margin for that time 
period. With respect to the relevance aspect of corroboration, however, 
the Department will consider information reasonably at its disposal as 
to whether there are circumstances that would render a margin 
inappropriate. Where circumstances indicate that the selected margin is 
not appropriate as adverse facts available, the Department will 
disregard the margin and determine an appropriate margin (see, e.g., 
Fresh Cut Flowers from Mexico; Final Results of Antidumping Duty 
Administrative Review, 61 FR 6812, 6814 (Feb. 22, 1996) (where the 
Department disregarded the highest margin as adverse facts available 
because the margin was based on another company's uncharacteristic 
business expense resulting in an unusually high margin)).
    As discussed above, it is not necessary to question the reliability 
of a calculated margin from a prior segment of the proceeding. Further, 
there are no

[[Page 46352]]

circumstances indicating that this margin is inappropriate as facts 
available. Therefore, we preliminarily find that the 21.02 percent rate 
is corroborated.

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 use of constructed export price was not otherwise indicated.
    We calculated EP based on the CIF price to the United States. In 
accordance with section 772(c)(2) of the Act, we made deductions, as 
appropriate, for foreign inland freight, international freight, marine 
insurance, and brokerage and handling.

Normal Value

    Viability: In order to determine whether Shah, Jyoti, and Parekh 
made a sufficient volume of sales in the home market to serve as a 
viable basis for calculating normal value (``NV''), we compared the 
respondents'' 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. We found that each respondent's 
aggregate volume of home market sales of the foreign like product was 
greater than five percent of its respective aggregate volume of U.S. 
sales of the subject merchandise. Even though this result would 
normally indicate that NV should be based on home market sales, as 
explained below, information on the record indicates that a 
``particular market situation'' exists in the home market that renders 
the otherwise viable home market an inappropriate basis for NV.
    In a letter dated February 3, 1999, the petitioners stated that the 
dates of the home market sale reported by Parekh and Shah were outside 
the period of review. Lacking home market sales in the period of 
review, the petitioners argued that both Parekh's and Shah's home 
markets were not viable.
    In considering this argument, the Department notes that section 
773(a)(1)(A) of the Act states that NV shall be based upon the price at 
which the foreign like product is first sold in the usual commercial 
quantities and in the ordinary course of trade ``at a time reasonably 
corresponding to the time of the sale used to determine the export 
price or constructed export price'' (emphasis added). Neither the 
Department's regulations nor the SAA offer any further clarification of 
the time period the Department should examine in determining market 
viability.
    However, the Department has developed a methodology for determining 
contemporaneity for purposes of comparing NV with export price or 
constructed export price. The Department's regulations at 19 CFR 
351.414(e)(2) provide that if there are no sales of the foreign like 
product in the month of the U.S. sale under consideration, the 
Secretary will select as the contemporaneous month the most recent of 
the three months prior to the month of the U.S. sale, and if there are 
no sales of the foreign like product during any of these months, the 
earlier of the two months following the month of the U.S. sale in which 
there was a sale of the foreign like product. This methodology commonly 
is referred to as the 90/60-day contemporaneity window.
    Although both Shah and Parekh's home market sales were made outside 
the period of review, we have preliminarily determined that, since both 
respondents' home market sales were within the 90/60-day 
contemporaneity window they would be used for comparison purposes. 
Because the time of these home market sales ``reasonably corresponds'' 
to the time of the sales used to establish EP, we have examined whether 
these sales constitute a viable home market for the purpose of 
determining NV.
    Particular Market Situation: On March 8, 1999, the petitioners 
alleged that Shah, Jyoti, and Parekh made home market sales identical 
to their U.S. sales, after making their U.S. sales, in order to 
artificially establish zero dumping margins. Consequently, the 
petitioners alleged that the home market constitutes a fictitious 
market within meaning of section 773(a)(2), and that the Department 
should not use the home market sales as the basis for normal value. In 
the alternative, the petitioners claimed that a particular market 
situation within the meaning of section 773(a)(1)(C)(iii) exists in the 
home market because all three respondents made a single sale in the 
home market that constituted five percent or more of sales to the U.S. 
market. The petitioners asserted that in light of this particular 
market situation, the Department was precluded from using respondents' 
home market sales for calculating normal value. See May 18, 1999, 
Memorandum to Laurie Parkhill, ``Home Market Viability, Fictitious 
Market, and Particular Market Situation Allegations'' (``May 18, 1999 
Memo'') and June 24, 1999, Memorandum to Richard Moreland, ``Particular 
Market Situation'' (``June 24, 1999 Memo'') for a detailed discussion 
of these issues.
    In considering the petitioners' fictitious market allegation, we 
have preliminarily determined that evidence on the record does not 
support a finding that Shah, Jyoti, or Parekh established a fictitious 
market. It is the Department's practice in proceedings involving 
fictitious market allegations to require that the petitioners provide 
some evidence on the record that establishes the occurrence of 
different movements in prices at which different forms of the foreign 
like product are sold before pursuing an allegation. See, e.g., 
Tubeless Steel Disc Wheels from Brazil; Final Results of Antidumping 
Duty Administrative Review, 56 FR 14085 (April 5, 1991) (``* * * before 
pursing a [fictitious market] allegation, the Department must have 
sufficient evidence that there have been different movements in the 
prices at which different forms of the subject merchandise have been 
sold in the home market.''). The petitioners have not provided such 
evidence and, therefore, we have not pursued an inquiry into the 
petitioners' fictitious market allegations. See May 18, 1999 Memo.
    With respect to the petitioners' allegation of a particular market 
situation, we preliminarily determine that a particular market 
situation does exist for Shah, Jyoti, and Parekh. According to section 
773(a)(1) of the Act, the Department may decline to use home market 
sales for determining normal value where ``the particular market 
situation in the exporting country does not permit a proper comparison 
with the export price or constructed export price.'' The SAA further 
discusses particular market situations, stating that a particular 
market situation may exist where a single sale in the home market 
constitutes five percent of sales to the United States. SAA at 152.
    In the instant review, we find that each respondent had a single 
sale in the home market which constituted more than five percent of the 
aggregate volume of its U.S. sales. In addition, we note that the 
subject merchandise is a commodity-type product that can easily be 
distinguished from a large capital good, such as a printing press, 
where one home market sale made during the period of review might be a 
normal situation. We further note that although we gave the respondents 
an opportunity to offer information demonstrating why a particular 
market situation does not exist in the home market, Jyoti and Shah (the 
two respondents who chose to

[[Page 46353]]

submit information) 1 failed to submit information 
demonstrating why these single, isolated sales in the home market were 
indicative of actual home market prices of the foreign like product. 
Accordingly, we preliminarily determine that the respondents' home 
markets should not be used for purposes of calculating normal value. 
Moreover, because none of the respondents have made sales to third 
countries during the POR, we determine that CV is the appropriate basis 
for normal value. See May 18, 1999 Memo and June 24, 1999 Memo for a 
more detailed analysis.
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    \1\  Parekh did not submit any information concerning the 
particular market situation issue.
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    Constructed Value: In accordance with section 773(e)(1) of the Act, 
we calculated CV for Shah and Jyoti based on the sum of the respective 
respondent's cost of materials (net of import duty credits earned on 
its U.S. sale), labor, overhead, G&A, profit, and U.S. packing costs. 
(As discussed in the ``Facts Available'' section above, we could not 
calculate CV for Parekh because it failed to respond to our request for 
necessary cost information.) With respect to G&A, we used the amounts 
reported by Shah and Jyoti in their 1997-1998 audited financial 
statements, and, in accordance with our normal practice, adjusted these 
amounts to capture those expenses associated with the production of the 
subject merchandise.
    With respect to amounts for profits, section 773(e)(2)(A) of the 
Act states that CV should include an amount ``incurred and realized by 
the specific exporter or producer being examined in the investigation 
or review * * * for profits, in connection with the production and sale 
of a foreign like product, in the ordinary course of trade, for 
consumption in the foreign country * * *'' In this case, the actual 
amounts incurred and realized by Shah and Jyoti for profits, in 
connection with their sales of the foreign like product, are based on 
Shah and Jyoti's respective single home market sales. However, as 
discussed above, we have determined that these home market sales are 
not an appropriate basis for normal value because a particular market 
situation exists. Accordingly, these sales are not an appropriate basis 
for calculating CV profit. Therefore, as no other actual profit amounts 
realized by Shah and Jyoti in connection with sales of the foreign like 
product are available, we have used an alternative calculation method.
    The decision to use an alternative method to determine profit and 
the selection of the appropriate method depends on the facts of each 
case. Therefore, the decision to use alternative CV profit data must be 
made on a case-by-case basis. Based on the facts of the present case, 
in accordance with section 773(e)(2)(B)(i) of the Act, we calculated 
the respondents' respective profit based on the respondents' sale of 
merchandise that is in the same general category of products as the 
subject merchandise. That is, we calculated profit based on the 
respondents' respective total sales of all merchandise produced, as 
reflected in the companies' 1997-1998 audited financial statements.

Preliminary Results of Review

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

------------------------------------------------------------------------
        Manufacturer/Exporter              Period       Margin (percent)
------------------------------------------------------------------------
Jyoti...............................    2/1/98-7/31/98              0.00
Parekh..............................    2/1/98-7/31/98             21.02
Shah................................    2/1/98-7/31/98              0.00
------------------------------------------------------------------------

    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 30 days of publication. Any hearing, if 
requested, will be held 2 days after the deadline for filing rebuttal 
briefs unless the Secretary alters the date. 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 no later than 5 days after the deadline for 
filing case briefs. The Department will issue the final results of this 
new shipper review, which will include the results of its analysis of 
issues raised in any such comments, within 90 days of issuing these 
preliminary results.
    Upon completion of this new shipper review, the Department shall 
determine, and the Customs Service shall assess, antidumping duties on 
all appropriate entries. 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 made to the total entered 
value of the examined sales. 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 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 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

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occurred and the subsequent assessment of double antidumping duties.
    This new shipper review and notice are in accordance with sections 
751(a)(2)(B) and 777(i)(1) of the Act.

    Dated: August 18, 1999.
Bernard Carreau,
Acting Assistant Secretary for Import Administration.
[FR Doc. 99-22083 Filed 8-24-99; 8:45 am]
BILLING CODE 3510-DS-P