[Federal Register Volume 64, Number 249 (Wednesday, December 29, 1999)]
[Notices]
[Pages 73126-73131]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-33228]



[[Page 73125]]

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Part II





Department of Commerce





_______________________________________________________________________



International Trade Administration



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Final Determination of Sales at Less Than Fair Value and Final 
Affirmative Countervailing Duty Determination: Certain Cut-to-Length 
Carbon-Quality Steel Plate Products From India et al.; Notices

  Federal Register / Vol. 64, No. 249 / Wednesday, December 29, 1999 / 
Notices  

[[Page 73126]]



DEPARTMENT OF COMMERCE

International Trade Administration

[A-533-817]


Notice of Final Determination of Sales at Less Than Fair Value: 
Certain Cut-To-Length Carbon-Quality Steel Plate Products From India

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

ACTION: Notice.

-----------------------------------------------------------------------

EFFECTIVE DATE: December 29, 1999.

FOR FURTHER INFORMATION CONTACT: Timothy Finn or Nithya Nagarajan, 
Office 4, Group II, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW., Washington, DC 20230; telephone: (202) 482-
0065 or (202) 482-5253, respectively.

The 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 (``URAA''). In addition, unless 
otherwise indicated, all references are made to the Department's 
regulations at 19 CFR Part 351 (1999).

Final Determination

    We determine that certain cut-to-length carbon-quality steel plate 
products (``CTL plate'') from India are being, or are likely to be, 
sold in the United States at less than fair value (``LTFV''), as 
provided in section 733 of the Act. The estimated margins of sales at 
LTFV are shown in the ``Suspension of Liquidation'' section of this 
notice.

Case History

    Since the preliminary determination in this investigation 
(Preliminary Determination of Sales at Less Than Fair Value: Certain 
Cut-To-Length Carbon-Quality Steel Plate Products from India, 64 FR 
41202 (July 29, 1999)) (``Preliminary Determination''), the following 
events have occurred:
    In August, 1999, the Department issued two additional supplemental 
questionnaires to Steel Authority of India, Ltd.(``SAIL''), in response 
to which the respondent filed submissions on August 17, 1999. In 
September 1999, the Department conducted verification of SAIL, the sole 
respondent in the instant investigation. A public version of our report 
of the results of this verification is on file in the Central Records 
Unit (``CRU''), room B-099, of the main Department of Commerce 
building, under the appropriate case number. On November 18, 1999, a 
public hearing was held at the main Department of Commerce building and 
was attended by interested parties.

Scope of Investigation

    The products covered by the scope of this investigation are certain 
hot-rolled carbon-quality steel: (1) Universal mill plates (i.e., flat-
rolled products rolled on four faces or in a closed box pass, of a 
width exceeding 150 mm but not exceeding 1250 mm, and of a nominal or 
actual thickness of not less than 4 mm, which are cut-to-length (not in 
coils) and without patterns in relief), of iron or non-alloy-quality 
steel; and (2) flat-rolled products, hot-rolled, of a nominal or actual 
thickness of 4.75 mm or more and of a width which exceeds 150 mm and 
measures at least twice the thickness, and which are cut-to-length (not 
in coils). Steel products to be included in this scope are of 
rectangular, square, circular or other shape and of rectangular or non-
rectangular cross-section where such non-rectangular cross-section is 
achieved subsequent to the rolling process (i.e., products which have 
been ``worked after rolling'')--for example, products which have been 
beveled or rounded at the edges. Steel products that meet the noted 
physical characteristics that are painted, varnished or coated with 
plastic or other non-metallic substances are included within this 
scope. Also, specifically included in this scope are high strength, low 
alloy (HSLA) steels. HSLA steels are recognized as steels with micro-
alloying levels of elements such as chromium, copper, niobium, 
titanium, vanadium, and molybdenum. Steel products to be included in 
this scope, regardless of Harmonized Tariff Schedule of the United 
States (HTSUS) definitions, are products in which: (1) Iron 
predominates, by weight, over each of the other contained elements, (2) 
the carbon content is two percent or less, by weight, and (3) none of 
the elements listed below is equal to or exceeds the quantity, by 
weight, respectively indicated: 1.80 percent of manganese, or 1.50 
percent of silicon, or 1.00 percent of copper, or 0.50 percent of 
aluminum, or 1.25 percent of chromium, or 0.30 percent of cobalt, or 
0.40 percent of lead, or 1.25 percent of nickel, or 0.30 percent of 
tungsten, or 0.10 percent of molybdenum, or 0.10 percent of niobium, or 
0.41 percent of titanium, or 0.15 percent of vanadium, or 0.15 percent 
zirconium. All products that meet the written physical description, and 
in which the chemistry quantities do not equal or exceed any one of the 
levels listed above, are within the scope of these investigations 
unless otherwise specifically excluded. The following products are 
specifically excluded from these investigations: (1) Products clad, 
plated, or coated with metal, whether or not painted, varnished or 
coated with plastic or other non-metallic substances; (2) SAE grades 
(formerly AISI grades) of series 2300 and above; (3) products made to 
ASTM A710 and A736 or their proprietary equivalents; (4) abrasion-
resistant steels (i.e., USS AR 400, USS AR 500); (5) products made to 
ASTM A202, A225, A514 grade S, A517 grade S, or their proprietary 
equivalents; (6) ball bearing steels; (7) tool steels; and (8) silicon 
manganese steel or silicon electric steel.
    The merchandise subject to these investigations is classified in 
the HTSUS under subheadings: 7208.40.3030, 7208.40.3060, 7208.51.0030, 
7208.51.0045, 7208.51.0060, 7208.52.0000, 7208.53.0000, 7208.90.0000, 
7210.70.3000, 7210.90.9000, 7211.13.0000, 7211.14.0030, 7211.14.0045, 
7211.90.0000, 7212.40.1000, 7212.40.5000, 7212.50.0000, 7225.40.3050, 
7225.40.7000, 7225.50.6000, 7225.99.0090, 7226.91.5000, 7226.91.7000, 
7226.91.8000, 7226.99.0000.
    Although the HTSUS subheadings are provided for convenience and 
Customs purposes, the written description of the merchandise under 
investigation is dispositive.

Period of Investigation

    The period of investigation (``POI'') is January 1, 1998, through 
December 31, 1998.

Facts Available

    Based on our analysis of the facts on the record of this 
investigation, we continue to find that SAIL failed to act to the best 
of its ability in reporting accurate and verifiable information to the 
Department. At the preliminary determination, we found that because of 
1) the problems with the electronic databases that SAIL submitted; 2) 
the lateness and incompleteness of narrative portions of the 
questionnaire responses; and 3) the lack of product-specific costs, 
SAIL's questionnaire response could not be used to calculate a reliable 
margin. As a result, we utilized adverse facts available as the basis 
of the preliminary margin.
    Section 776(a)(2) of the Act provides that ``if an interested party 
or any other person--(A) withholds information that

[[Page 73127]]

has been requested by the administering authority; (B) fails to provide 
such information by the deadlines for the submission of the information 
or in the form and manner requested, subject to subsections (c)(1) and 
(e) of section 782; (C) significantly impedes a proceeding under this 
title; or (D) provides such information but the information cannot be 
verified as provided in section 782(i), the administering authority * * 
* shall, subject to section 782(d), use the facts otherwise available 
in reaching the applicable determination under this title.''
    The Department has further determined that the use of facts 
available is appropriate for SAIL for purposes of the final 
determination, pursuant to section 776(a)(2)(A), (B), and (D) of the 
Act. With respect to subsection (A), at verification the Department 
discovered that SAIL failed to report a significant number of home 
market sales; was unable to verify the total quantity and value of home 
market sales; and failed to provide reliable cost or constructed value 
data for the products. See Home Market and United States Sales 
Verification Report (``Sales Report''), dated November 3, 1999; see 
also Cost of Production and Constructed Value Verification Report 
(``Cost Report''), dated November 3, 1999. With regard to subsection 
(B), SAIL was provided with numerous opportunities and extensions of 
time to fully respond to the Department's original and supplemental 
questionnaires, as well as ample time to prepare for verification. 
However, even with numerous opportunities to remedy problems, SAIL 
failed to provide reliable data to the Department in the form and 
manner requested.
    With respect to section 776(a)(2)(D) of the Act., we note that as a 
result of the widespread problems encountered at verification, SAIL's 
questionnaire responses could not be verified. See Sales Report and 
Cost Report. See Memorandum to the File: Determination of Verification 
Failure (``Verification Memo''), dated December 13, 1999.
    Section 782(d) provides certain conditions that must be satisfied 
before the Department may, subject to section 782(e), disregard all or 
part of the information submitted by a respondent. First, this section 
states that, if the Department determines that a response to a request 
for information does not comply with the request, it shall promptly 
inform the person submitting the response of the nature of the 
deficiency and shall, to the extent practicable, provide that person 
with an opportunity to remedy or explain the deficiency in light of the 
time limits established for the completion of the review. Section 
782(d) continues that, if the party submits further information in 
response to the deficiency and the Department finds the response is 
still deficient or submitted beyond the applicable time limits, the 
Department may disregard all or part of the original and subsequent 
responses.
    With respect to section 782(d), we gave SAIL numerous opportunities 
and extensions to submit complete and accurate data. As stated in the 
Preliminary Determination, SAIL's questionnaire and deficiency 
questionnaire responses were found to be substantially deficient and 
untimely for purposes of calculating an accurate antidumping margin. 
See Preliminary Determination. However, subsequent to the preliminary 
determination we issued two additional questionnaires and further 
extensions to SAIL presenting it yet additional opportunities to submit 
a complete and accurate electronic database. Nevertheless, the 
Department found at verification that the final submission was again 
substantially deficient (see the Department's Position below; see 
Verification Memo; and see Sales Report and Cost Report). Therefore the 
Department may ``disregard all or part of the original and subsequent 
responses,'' subject to subsection (e) of section 782.
    Section 782(e) of the Act states that the Department shall not 
decline to consider information deemed ``deficient'' under section 
782(d) provided that:

    (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 be 
served as a reliable basis for reaching the applicable 
determination,
     (4) The interested party has demonstrated that it has acted to 
the best of its ability in providing the information and meeting the 
requirements established by the administering authority * * * with 
respect to the information, and
    (5) The information can be used without undue difficulties.

See Section 782(e) of the Act. In the instant investigation, record 
evidence supports the following findings:
    First, with respect to section 782(e)(1), as stated in the 
Preliminary Determination and the sales and cost verification reports, 
SAIL was given numerous extensions to submit accurate data which it 
failed to do. In fact the last submission of cost data filed on August 
18, 1999, was a database which contained unreadable electronic versions 
of SAIL's cost of production which did not include any constructed 
value information.
    Second, with respect to section 782(e)(2), we were not able to 
verify SAIL's questionnaire response due to the fact that essential 
components of the response (i.e., the home market and cost databases) 
contained significant errors.
    Third, with respect to section 782(e)(3), the fact that essential 
components of SAIL's response could not be verified resulted in 
information that was incomplete and unreliable as a basis for 
determining the accurate margin of dumping.
    Fourth, with respect to section 782(e)(4), SAIL, as stated in the 
home market sales verification report, did not sufficiently verify the 
accuracy and reliability of its own data prior to submitting the 
information to the Department, thereby indicating that it did not act 
to the best of its ability to provide accurate and reliable data to the 
Department.
    Finally, with respect to section 782 (e)(5), the U.S. sales 
database contained errors that, while in isolation were susceptible to 
correction, however when combined with the other pervasive flaws in 
SAIL's data lead us to conclude that SAIL's data on the whole is 
unreliable. As a result, the Department does not have an adequate basis 
upon which to conduct its analysis to determine the dumping margin and 
must resort to facts available pursuant to section 776(a)(2) of the 
Act.
    In selecting from among the facts otherwise available, section 
776(b) of the Act provides that adverse inferences may be used when a 
party has failed to cooperate by not acting to the best of its ability 
to comply with a request for information. See the Statement of 
Administrative Action (``SAA'') at 870. To examine whether the 
respondent ``cooperated'' by ``acting to the best of its ability'' 
under section 776(b), the Department considers, inter alia, the 
accuracy and completeness of submitted information and whether the 
respondent has hindered the calculation of accurate dumping margins. 
See e.g., Certain Welded Carbon Steel Pipes and Tubes From Thailand: 
Final Results of Antidumping Duty Administrative Review (``Pipes and 
Tubes from Thailand''), 62 FR 53808, 53819-53820 (October 16, 1997).
    In addition to repeated problems in the timeliness and completeness 
of submissions and the workability of computer tapes, verification 
revealed that SAIL's data was significantly inaccurate, incomplete or 
otherwise unreliable. Therefore, pursuant to 776(b) of the Act, we 
conclude that SAIL did not cooperate to the best of its ability during 
the course of this investigation and consequently we used an adverse

[[Page 73128]]

inference in selecting a margin as facts available. The Department has 
applied a margin rate of 72.49 percent, the highest of the margins 
alleged in the petition, as facts available.

Corroboration

    Section 776(c) of the Act provides that where the Department 
selects from among the facts otherwise available and relies on 
``secondary information,'' such as the petition, the Department shall, 
to the extent practicable, corroborate that information from 
independent sources reasonably at the Department's disposal. The 
Statement of Administrative Action accompanying the URAA, H.R. Doc. 
No.103-316 (1994) (hereinafter, the ``SAA'') states that 
``corroborate'' means to determine that the information used has 
probative value. See SAA at 870.
    To corroborate the range of the margins alleged in the petition, we 
examined the basis of the rates contained in the petition. The petition 
margins were based on both price-to-price and price-to-constructed 
value comparisons. Petitioners' calculated export price was based on 
U.S. price offerings, with deductions taken for international movement 
charges. We compared this with information from U.S. Customs and found 
them consistent. Petitioners based normal value on prices for 
comparable products sold in the home market obtained from market 
research. Petitioners calculated constructed value based on their own 
production experience adjusted for known differences. With regard to 
the normal values contained in the petition, the Department is aware of 
no other independent sources of information that would enable us to 
further corroborate this information. We compared the petition 
information with reliable information obtained during the 
investigation, primarily SAIL's financial statements and other 
published materials from the questionnaire response and found them 
consistent. Finally, with respect to the relevance of the margin used 
for adverse facts available, the Department stated in Tapered Roller 
Bearings from Japan; Final Results of Antidumping Duty Administrative 
Review, 62 FR 47454 (September 9, 1997), that it will consider 
information reasonably at its disposal as to whether there are 
circumstances that would render a margin irrelevant. 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 also Fresh Cut Flowers from 
Mexico; Preliminary Results of Antidumping Duty Administrative Review, 
60 FR 49567 (September 26, 1995). We have determined that there is no 
evidence on the record that the selected margin is not appropriate. See 
Memorandum to the File: Corroboration of the Petition Data, dated July 
19, 1999, on file in the CRU.
    Finally, we note that the SAA at 870 specifically states that where 
``corroboration may not be practicable in a given circumstance,'' the 
Department may nevertheless apply an adverse inference. The SAA at 869 
emphasizes that the Department need not prove that the facts available 
are the best alternative information. Therefore, based on our efforts, 
described above, to corroborate information contained in the petition, 
and mindful of the legislative history discussing facts available and 
corroboration, we consider the petition margin we are assigning to SAIL 
in this investigation as adverse facts available to be corroborated to 
the extent practicable.

Interested Party Comments

Comment 1: Facts Available

    Respondent argues that the Department should determine that SAIL 
cooperated to the best of its ability to accurately report its export 
sales to the U.S., and as a result the Department should not base its 
final determination on total adverse facts available.
    SAIL argues that it responded in a timely manner to all of the 
Department's requests for information and also cooperated in the 
conduct of a 21-day verification to ensure the accuracy of its 
responses. SAIL admits that it had difficulties in verifying the 
accuracy of its home market sales, and cost of production data, but 
argues that its U.S. sales data were verified without significant 
problems and should be used as a basis for calculating the final 
antidumping duty margin in this determination. SAIL further argues that 
although it had difficulties in verifying the home market sales, the 
majority of these problematic sales would not have been used for 
comparison purposes as they were either of defective or off-grade 
merchandise or merchandise that would not be used for comparison 
purposes to the U.S. products. Accordingly, although SAIL's home market 
database lacks the degree of precision required by the Department, 
respondent argues that there is sufficient reliable information about 
the home market sales for the Department to evaluate and determine the 
``true'' picture of SAIL's home market sales. Finally, while 
acknowledging that there were problems associated with its cost of 
production data, SAIL contends that the Department verified the 
underlying accuracy of SAIL's books and records and also verified the 
plant-specific average plate costs. Therefore, the Department has a 
reliable basis from which to determine the relevant costs of the 
products sold to the United States. SAIL argues that extrapolating 
information from this reliable information, the Department could 
determine that SAIL's margin would be in the range of zero to 1 
percent. As a result, SAIL proposes that the Department compare the 
U.S. prices in the submitted Section C responses to the normal value 
and constructed value alleged in the petition, after comparing these 
figures to the home market prices from Section B responses, and cost of 
production data in the Section D responses to evaluate the reliability 
of the petition information.
    In SAIL's view, the Department cannot ignore the U.S. sales 
information submitted and verified and resort to total adverse facts 
available. SAIL relies on the premise that the ``basic purpose of the 
statute'' is to determine a margin as accurately as possible citing 
Rhone-Poulenc Inc, v. United States, 899 F.2d 1185, 1191 (Fed. Cir. 
1990). Furthermore, respondent argues that the Court of International 
Trade (``CIT'') has upheld the Department's use of best information 
available where the respondent's data was more accurate than the data 
in the petition and where the Department appeared to verify the data 
and make adjustments to it. See Micron Technology, Inc. v. United 
States, 893 F. Supp. 21, 35 (CIT 1995) (``Micron''). In the present 
determination, SAIL argues that the Department should not ignore SAIL's 
probative, accurate U.S. sales data and rely on less probative export 
information as facts available which would result in inaccurate dumping 
margins. SAIL repeats its claim that the Department has accurate and 
verified U.S. sales data; reliable home market sales data for the 
product most similar to the U.S. product; and average plant-specific 
costs sufficient to demonstrate that home market sales were not made 
below cost; and therefore, can make an accurate price comparison.
    SAIL's secondary argument is that the URAA requires the use of its 
timely and verified information on the record of this investigation. 
SAIL argues that, pursuant to section 782(e) of the Act, the Department 
must consider information if: (1) the information has been submitted in 
a timely manner; (2) the information can be verified; (3) the 
information can serve as a reliable basis for reaching the applicable 
determination; (4) the interested party

[[Page 73129]]

demonstrated that it acted to the best of its ability; and (5) the 
information can be used without undue difficulties. See section 782(e) 
of the Act. Citing multiple prior Department determinations, SAIL 
argues that it has met all these criteria, therefore, the submitted 
U.S. sales data must be used to calculate the margin. (See Toyota Motor 
Sales, U.S.A. Inc. v. United States, 15 F. Supp. 2d 872 (CIT 1988); 
Koenig & Bauer-Albert AG v. United States, 15 F. Supp. 2d 834 (CIT 
1998); see also Stainless Steel Sheet and Strip in Coils from Mexico, 
64 FR 30790 (1999); Certain Preserved Mushrooms from Chile, 63 FR 56613 
(1998)). SAIL argues that it would be arbitrary and capricious for the 
Department to reject SAIL's accurate U.S. sales data in favor of an 
adverse facts available margin from the petition and that the 
Department must use SAIL's U.S. data and partial facts available for 
the other missing data in calculating SAIL's final dumping margin on 
the basis that SAIL cooperated to the best of its ability during the 
instant investigation. Citing Annex II of the Agreement on 
Implementation of Article VI of the GATT 1994 (``AD Agreement''), SAIL 
contends that where a party acts to the best of its ability, its 
information should not be disregarded even though the information is 
not ideal in all respects.
    Petitioners counter SAIL's arguments on the grounds that SAIL 
failed to act to the best of its ability. As support for their 
contention, petitioners cite to SAIL's omissions of both home market 
sales and cost data, and its selective compliance with the Department's 
instructions. Petitioners note that the Department attempted to 
accommodate SAIL in the course of the investigation and during 
verification; however, SAIL continued to fail to submit a full, 
readable, and complete database for use in the Department's 
investigation.
    Furthermore, petitioners argue that SAIL understates the gravity of 
the errors in its database. Petitioners cite to numerous factual 
discrepancies in the home market sales and cost databases including: 
(i) inability to reconcile total quantity and value; (ii) under-
reported sales values and over-reported quantities; (iii) omitted home 
market sales; (iv) double-counted transactions; (v) misreported gross 
unit prices, product characteristics, and taxes; (vi) misreported 
thickness and width values in the home market database; (vii) over and 
under-reported freight costs in the U.S. sales database; (viii) 
misreported product characteristics for U.S. sales; (ix) failure to 
provide a constructed value database; (x) problematic yield adjustments 
to reported costs; (xi) understated material costs; (xii) failure to 
provide a ratio analyses for the RSP plant; (xiii) failure to provide 
product-specific costs; (xiv) failure to report the conversion factor 
of theoretical to actual weights; and (xv) failure to explain the 
reason for transactions with an identical home market control number 
(``CONNUMH'') having different variable costs. As a result, petitioners 
argue that there was no reliable information on the record (as 
evidenced by the Department's verification reports) to enable the 
Department to calculate a margin. Petitioners cite Pipes and Tubes from 
Thailand, at 53814, in support of their contention that without 
reliable cost data there is no means of ensuring the accuracy and 
reliability of the home market sales data. In addition, petitioners 
also argue that the errors with the U.S. database (such as errors in 
reporting product characteristics of a majority of U.S. sales) render 
it deficient, incomplete, and inaccurate. As a result, the Department 
cannot calculate a margin and must resort to total adverse facts 
available.
    Petitioners also contest SAIL's invocation of Annex II of the AD 
Agreement. According to petitioners, SAIL's information was 
considerably less than ideal. Petitioners cite to the problems, listed 
above, with the home market sales, cost, and U.S. sales databases to 
counter SAIL's argument regarding the reliability of its information. 
Petitioners argue that the calculation of a margin comparing SAIL's 
U.S. sales information to the normal value (``NV'') and constructed 
value (``CV'') from the petition would lead to an untenable result that 
would encourage selective reporting in the future and undermine the 
statutory goal of calculating an accurate margin. Moreover, petitioners 
state that the premise of SAIL's argument relies on the belief that the 
U.S. sales database is without errors, which is not factually supported 
by the Department's findings at verification. See Sales Report.
    Finally, petitioners state that the standard set forth in section 
782(e) of the Act does not support the use of U.S. sales information 
upon the rejection of home market sales and cost of production 
information. Petitioners state that section 782(e) does not direct the 
Department to use part of response where essential components of the 
response are not otherwise useable. See Frozen Concentrated Orange 
Juice from Brazil, 64 FR 43650 (August 11, 1999). As a result of the 
data problems described above, as well as SAIL's inadequate review of 
its database for accuracy and completeness, petitioners argue that 
respondent clearly failed to act to the best of its ability to provide 
the Department with requested information, and therefore use of total 
adverse facts available is warranted for SAIL.
    Petitioners rely on two recent cases to demonstrate the 
Department's methodology for selecting total adverse facts available 
under circumstances similar to those in the present investigation. 
First, petitioners argue that the Department normally rejects a 
respondent's response in its entirety when price-to-price comparison is 
impossible due to a reporting failure on the behalf of the respondent. 
In Heavy Forged Hand Tools Finished or Unfinished, With or Without 
Handles from the People's Republic of China (``Tools from China''), 64 
FR 43659 (August 11, 1999), the Department rejected the response and 
used total adverse facts available when it discovered, at verification, 
that a significant portion of sales were missing for four months of the 
POR and that it could not ``successfully perform the completeness 
test.'' See Tools from China, 64 FR at 43663. Second, petitioners argue 
that total adverse facts available is warranted where the questionnaire 
response is extremely deficient in other respects such that the 
Department cannot reliably use the reported data to calculate a margin. 
See Notice of Final Determination of Sales at Less Than Fair Value: 
Steel Wire Rod from Germany (``Steel Wire Rod from Germany''), 63 FR 
8953 (February 23, 1998). In that case, the Department found that the 
response was deficient and an unreliable basis to calculate a margin as 
a result of ``numerous inconsistencies'' in the reported sales and cost 
data. Petitioners argue that the fact pattern of the present case is 
similar to both Tools from China and Steel Wire Rod from Germany; 
therefore, the Department's only choice is to apply total adverse facts 
available in determining the dumping margin for SAIL's transactions 
during the POI.
    SAIL takes issue in the petitioners' claim that the facts here are 
similar to those in Tools from China and argues that petitioners' 
reliance on Tools from China is misplaced, since there was a 
determination in that case that the respondents were withholding 
information and generally acting in ``bad faith.'' Contrary to the 
circumstances in that case, SAIL argues that there is no evidence of 
``bad faith'' on its part in the instant investigation.

Department Position:

    We disagree with respondent that total adverse facts available are 
not warranted for this determination. SAIL

[[Page 73130]]

has consistently failed to provide reliable information throughout the 
course of this investigation. At the preliminary determination we 
relied on facts available because widespread and repeated problems in 
SAIL's questionnaire response rendered it unuseable for purposes of 
calculating a margin. These problems recurred despite our numerous and 
clear indications to SAIL of its response deficiencies. Even though we 
rejected use of SAIL's questionnaire response at the preliminary 
determination, because the company was seemingly attempting to 
cooperate, albeit in a flawed manner, we continued to collect data 
after the preliminary determination in an attempt to gather a 
sufficiently reliable database and narrative record for verification 
and for use in the final determination. The Department also rejected 
petitioners' request that verification be cancelled in light of the 
response deficiencies. However, as evidenced by the summary below, SAIL 
was unable to provide the Department with useable information to 
calculate and determine whether sales were made at less than fair 
value.
    Throughout the responses to the Department's original questionnaire 
and supplemental questionnaires there were ongoing, serious problems in 
the areas of completeness, timeliness, and workability of computer 
tapes. Regarding completeness, the responses repeatedly made the 
statement that certain data were not available and would be supplied 
later (i.e., during verification). Instances of this unavailability 
included unreported home market sales, a substantial number of sales 
dates, product specifications, supporting documentation, and so forth.
    Regarding timeliness, on several occasions SAIL called requesting 
extensions past the already extended deadlines for its submissions. On 
other occasions SAIL submitted unrequested clarifications to previous 
responses and responses to questions after the required deadline, in 
effect providing itself with an extension to respond to the 
Department's questionnaires. In fact, several of SAIL's submissions 
were returned to it due to untimely filing. See Letter to Respondent's 
Counsel on July 7, 1999, Antidumping Duty Investigation of Certain Cut-
to-Length Carbon Quality Steel Plate (``CTL Plate'') from India.
    Regarding computer tapes, repeated technical problems with the 
submitted data resulted in our inability to load, run, and analyze the 
data, despite a significant amount of time and attention from the 
Department. Moreover, at verification we discovered that SAIL's last 
submission (made just prior to verification and to provide the 
Department with useable cost of production and constructed value data) 
was not only incomplete, but also riddled with inaccuracies to the 
point where SAIL's data remains unuseable. SAIL attempted to provide 
the Department with a new tape at verification containing revised cost 
of production and constructed value data which the Department rejected 
as untimely.
    Furthermore, at verification, we discovered that: SAIL had failed 
to report a significant number of home market sales; we were unable to 
verify the total quantity and value of home market sales; SAIL failed 
to report accurate gross unit prices; SAIL failed to reconcile costs of 
production to its audited financial statements; and SAIL failed to 
provide constructed value data on the costs of products produced and 
sold to the United States. See Sales Report and Cost Report.
    Furthermore, we disagree with SAIL's characterization of its U.S. 
sales as accurate, timely, and verified. In fact, the U.S. sale 
database contained certain errors, as revealed at verification. See 
Sales Report; see also Verification Memo. Moreover, we disagree with 
SAIL that we are required by the Act to use SAIL's reported U.S. 
prices. SAIL cites to Toyota Motor Sales, U.S.A., Inc., v. United 
States, 15 F. Supp. 2d 872 (CIT 1998); Koenig & Bauer-Albert AG v. 
United States, 15 F. Supp. 2d 834 (CIT 1998); Antidumping Duty 
Investigation on Sales at Less-Than-Fair-Value: Certain Cut-to-Length 
Carbon-Quality Steel Plate from Indonesia, 64 FR 40457 (July 19, 1999); 
Antidumping Duty Investigation on Sales at Less-Than-Fair-Value: 
Stainless Steel Sheet and Strip in Coils from Mexico, 64 FR 30790 
(1999), as support for the contention that the Department does not 
resort to total facts available if there are deficiencies in the 
respondent's submitted information. It is the Department's long-
standing practice to reject a respondent's questionnaire response in 
toto when essential components of the response are so riddled with 
errors and inaccuracies as to be unreliable. See Steel Wire Rod from 
Germany. SAIL's argument relies on a mischaracterization of our 
practice with respect to so-called ``gap-filler'' facts available. SAIL 
argues that the Department should fill in the record for home market 
sales, cost of production, and constructed value as if there were a 
mere ``gap'' in the response, as opposed to the entire record. Thus 
respondent's arguments and citations to these cases are inapposite. In 
each of the above-mentioned cases, the majority of the information on 
the record was verified and useable; there were only certain small 
areas of information which required the Department to facts otherwise 
available to accurately calculate a dumping margin. The Department's 
long-standing practice of filling in gaps or correcting inaccuracies in 
the information reported in a questionnaire response, often based on 
verification findings, is appropriate only in cases where the 
questionnaire response is otherwise substantially complete and useable. 
In contrast, in this case, SAIL's questionnaire response is 
substantially incomplete and unuseable in that there are deficiencies 
concerning a significant portion of the information required to 
calculate a dumping margin. To properly conduct an antidumping analysis 
which includes a sales-below-cost allegation, the Department must 
analyze four essential components of a respondent's data: U.S. sales; 
home market sales; cost of production for the home market models; and 
constructed value for the U.S. models. Yet SAIL has not provided a 
useable home market sales database, cost of production database, or 
constructed value database. Moreover, the U.S. sales database would 
require some revisions and corrections in order to be useable. As a 
result of the aggregate deficiencies (data problems and SAIL's 
responses), the Department was unable to adequately analyze SAIL's 
selling practices in a thorough manner for purposes of measuring the 
existence of sales at less than fair value for this final 
determination. See Sales Report and Cost Report.
    We also disagree with SAIL's reliance on the Micron decision in 
arguing that we should use its U.S. sales data as facts available. In 
the Micron case, the CIT affirmed the Department's use of respondent 
data as non-adverse facts available for a discrete piece of data which 
required adjustment. Specifically, the Department had concluded that a 
respondent used an improper methodology in reporting depreciation 
expenses. In selecting non-adverse facts available in order to properly 
adjust the depreciation expenses, the Department relied on calculations 
proposed by the respondent, which were specific to the subject 
merchandise, rather than calculations proposed by petitioner, which 
were based on broader assets. Thus, the facts of the Micron case are 
quite different from this case, where the Department must apply total 
adverse facts available because SAIL's data on the whole is unreliable.
    Respondent also cites to section 782(e) of the Act as support for 
its

[[Page 73131]]

argument that the Department should utilize the verified U.S. sales in 
calculating a dumping margin in the instant investigation. Section 
782(e) of the Act states that the Department shall not decline to 
consider information deemed ``deficient'' under section 782(d) provided 
that subsections (1), (2), (3), (4), and (5) of section 782(e) are met. 
In the instant investigation, record evidence supports the finding that 
SAIL did not meet these requirements (see, Facts Available section 
above).
    With regard to each respective subsection of 782(e): (1) SAIL did 
not provide information in a timely manner; (2) the information 
submitted could not be verified; (3) essential components of the 
information (e.g., home market sales and cost information) are so 
incomplete that it cannot be used as a reliable basis for reaching a 
determination; (4) SAIL did not act to the best of its ability in 
providing the information and meeting the requirements established by 
the administering authority; and (5) the information cannot be used 
without undue difficulties. Accordingly, we are applying a margin based 
on total facts available to SAIL in the final determination. See, Facts 
Available section above.
    Accordingly, pursuant to section 776(a)(2) of the Act, the 
Department has determined that the information on the record is 
unusable and is not a reliable basis upon which to calculate a margin 
in this investigation. Moreover, because we determine that SAIL has not 
acted to the best of its ability, pursuant to 776(b) of the Act, we 
used an adverse inference in selecting a margin as facts available. The 
Department has applied a margin rate of 72.49 percent, the highest 
margin alleged in the petition, as facts available.

Continuation of Suspension of Liquidation

    In accordance with section 735(c)(1)(B) of the Act, we are 
directing the Customs Service to continue to suspend liquidation of all 
entries of subject merchandise from India that were entered, or 
withdrawn from warehouse, for consumption on or after July 29, 1999 
(the date of publication of the Department's preliminary determination) 
for SAIL. The Customs Service shall continue to require a cash deposit 
or posting of a bond equal to the estimated amount by which the normal 
value exceeds the U.S. price as shown below. These suspension of 
liquidation instructions will remain in effect until further notice. 
The weighted-average dumping margins are as follows:

------------------------------------------------------------------------
                                                              Weighted-
                                                               average
                   Exporter/manufacturer                        margin
                                                              percentage
------------------------------------------------------------------------
SAIL.......................................................        72.49
All others\1\..............................................       72.49
------------------------------------------------------------------------
\1\ The Act normally prohibits inclusion in the ``All Others'' rate of
  any margins determined entirely on the basis of facts available,
  pursuant to section 776. However, where the estimated weighted-average
  margin is based entirely on facts available, we must use any
  reasonable method to establish the estimated ``All Others'' rate for
  exporters and producers not individually investigated. See section
  733(d)(1)(ii); 735(c)(5)(B). In this case, we have determined that a
  reasonable method is to use 72.49 percent, the highest margin alleged
  in the petition, which was also the source of our facts available
  margin for SAIL. This is consistent with the Department's practice.
  See, e.g., Notice of Final Determination of Sales at Less Than Fair
  Value: Steel Wire Rod from Venezuela, 63 FR 8946, 8948 (1998).

ITC Notification

    In accordance with section 735(d) of the Act, we have notified the 
International Trade Commission (``ITC'') of our determination. Because 
our final determination is affirmative, the ITC will, within 45 days, 
determine whether these imports are materially injuring, or threatening 
material injury to, the U.S. industry. If the ITC determines that 
material injury, or threat of material injury does not exist, the 
proceeding will be terminated and all securities posted will be 
refunded or canceled. If the ITC determines that such injury does 
exist, the Department will issue an antidumping duty order directing 
Customs officials to assess antidumping duties on all imports of the 
subject merchandise entered, or withdrawn from warehouse, for 
consumption on or after the effective date of the suspension of 
liquidation.
    This determination is issued and published in accordance with 
sections 735(d) and 777(i)(1) of the Act.

    Dated: December 13, 1999.
Robert S. LaRussa,
Assistant Secretary for Import Administration.
[FR Doc. 99-33228 Filed 12-28-99; 8:45 am]
BILLING CODE 3510-DS-P