[Federal Register Volume 65, Number 180 (Friday, September 15, 2000)]
[Notices]
[Pages 55942-55944]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-23795]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-533-809]


Certain Stainless Steel Flanges From India: New Shipper Review

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

ACTION: Preliminary results of new shipper review.

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SUMMARY: The Department of Commerce (the Department) is conducting a 
new shipper review of the antidumping duty order on certain forged 
stainless steel flanges from India in response to a request by an 
Indian exporter of subject merchandise, Bhansali Ferromet Pvt. Ltd. 
(Bhansali). This review covers shipments of this merchandise to the 
United States during the period of August 1, 1998 through July 31, 
1999.
    We have preliminarily determined that sales have been made below 
normal value (NV). If these preliminary results are adopted in our 
final results, we will instruct the U.S. Customs Service to assess 
antidumping duties on entries subject to this review. Interested 
parties are invited to comment on these preliminary results, and are 
requested to submit with the argument: (1) A statement of the issue; 
and (2) a brief summary of the argument.

EFFECTIVE DATE: September 15, 2000.

FOR FURTHER INFORMATION CONTACT: Thomas Killiam or Robert James, AD/CVD 
Enforcement Group III, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW, Washington, D.C. 20230, telephone: (202) 482-
5222 or (202) 482-0649, respectively.

SUPPLEMENTARY INFORMATION:   

Applicable Statute and Regulations

    Unless otherwise indicated, all citations to the Tariff Act of 
1930, as amended (the Tariff Act), are references to the provisions 
effective January 1, 1995, the effective date of the amendments made to 
the Tariff Act by the Uruguay Round Agreements Act. In addition, unless 
otherwise indicated, all references to the Department's regulations are 
to 19 CFR part 351 (1999).

Background

    The Department published an antidumping duty order on certain 
forged stainless steel flanges from India on February 9, 1994 (59 FR 
5994), received a timely request for a new shipper review from 
Bhansali, and initiated this review on (65 FR 8120; February 10, 2000) 
pursuant to section 751(a)(2)(B) of the Tariff Act and section 
351.214(b) of the Department's regulations. The Department extended the 
deadline for completion of the new shipper review on June 14, 2000 (65 
FR 37359). Bhansali provided responses to the Department's 
questionnaires on March 8, 2000 (Section A), April 5, 2000 (Sections B 
and C), May 15, 2000, and July 24, 2000 (supplemental questionnaires). 
The Department's analysis of Bhansali's data is presented in full in a 
Memorandum from the Case Analyst to the file, dated September 5, 2000, 
``Analysis of data of Bhansali Ferromet Pvt. Ltd. (Bhansali) for the 
preliminary results of the new shipper review of certain stainless 
steel flanges

[[Page 55943]]

from India, 8/1/98-7/31/99'' (Analysis Memo).

Scope of Review

    The products under review are certain forged stainless steel 
flanges (hereafter, ``flanges'') from India, both finished and not 
finished, generally manufactured to specification ASTM A-182, and made 
in alloys such as 304, 304L, 316, and 316L. The scope includes five 
general types of flanges. They are weld neck, used for butt-weld line 
connection; threaded, used for threaded line connections; slip-on and 
lap joint, used with stub-ends/butt-weld line connections; socket weld, 
used to fit pipe into a machined recession; and blind, used to seal off 
a line. The sizes of the flanges within the scope range generally from 
one to six inches; however, all sizes of the above-described 
merchandise are included in the scope. Specifically excluded from the 
scope of this order are cast stainless steel flanges. Cast stainless 
steel flanges generally are manufactured to specification ASTM A-351. 
The flanges subject to this order are currently classifiable under 
subheadings 7307.21.1000 and 7307.21.5000 of the HTSUS. Although the 
HTSUS subheading is provided for convenience and customs purposes, the 
written description of the merchandise under review is dispositive of 
whether or not the merchandise is covered by the review.

United States Price

    Bhansali reported as export price (EP) transactions sales of 
subject merchandise to unaffiliated U.S. customers prior to 
importation. We calculated EP in accordance with section 772(a) of the 
Tariff Act, because the merchandise was sold to the first unaffiliated 
purchaser in the United States prior to importation and constructed 
export price (CEP) methodology was not otherwise warranted, based on 
the facts of record. We based EP on the FOB price to unaffiliated 
purchasers in the United States. We adjusted the starting price by the 
amount Bhansali reported for early payment discounts, and movement in 
accordance with section 772(c)(2)(A) of the Tariff Act. See the 
Analysis Memo.

Home Market Viability

    In order to determine whether there is a sufficient volume of sales 
in the home market to serve as a viable basis for calculating NV (i.e., 
the aggregate volume of home market sales of the foreign like product 
is equal to or greater than five percent of the aggregate volume of 
U.S. sales), we compared Bhansali's volume of home market sales of the 
foreign like product to the volume of U.S. sales of the subject 
merchandise, in accordance with section 773(a)(1)(C) of the Tariff Act. 
Because Bhansali's aggregate volume of home market sales of the foreign 
like product was greater than five percent of its aggregate volume of 
U.S. sales for the subject merchandise, we determined that the home 
market was viable for Bhansali.

Level of Trade

    In accordance with section 773(a)(1)(B) of the Tariff Act, to the 
extent practicable, we determine NV based on sales in the comparison 
market at the same level of trade (LOT) as the EP or CEP transaction. 
The LOT in the home market is that of the starting-price sales in the 
comparison market or, when NV is based on constructed value (CV), that 
of the sales from which we derive selling, general and administrative 
(SG&A) expenses and profit. With respect to U.S. price for EP 
transactions, the LOT is also the level of the starting-price sale, 
which is usually from the exporter to the importer. For CEP, the LOT is 
the level of the constructed sale from the exporter to the importer.
    To determine whether NV sales are at a different LOT than EP or 
CEP, we examine stages in the marketing process and selling functions 
along the chain of distribution between the producer and the 
unaffiliated customer. If the comparison-market sales are at a 
different LOT and the difference affects price comparability, as 
manifested in a pattern of consistent price differences between the 
sales on which NV is based and home market sales at the LOT of the 
export transaction, we make a LOT adjustment under section 773(a)(7)(A) 
of the Tariff Act. Finally, for CEP sales, if the NV level is more 
remote from the factory than the CEP level and there is no basis for 
determining whether the difference in the levels between NV and CEP 
affects price comparability, we adjust NV under section 773(a)(7)(B) of 
the Tariff Act (the CEP-offset provision). See Notice of Final 
Determination of Sales at Less Than Fair Value: Certain Cut-to-Length 
Carbon Steel Plate from South Africa, 62 FR 61731 (November 19, 1997).
    Bhansali reported one customer category and one channel of 
distribution (i.e., sales to unaffiliated distributors) for its home 
market sales. Bhansali reported EP sales in the U.S. market. For EP 
sales, Bhansali also reported one customer category and one channel of 
distribution (i.e., direct sales to unaffiliated distributors). 
Bhansali claimed in its response that its EP sales were made at the 
same LOT as home market sales to unaffiliated distributors. For this 
reason, Bhansali has not requested a LOT adjustment to NV for 
comparison to its EP sales.
    In determining whether separate LOTs actually existed in the home 
market and U.S. market, we examined whether Bhansali's sales involved 
different marketing stages (or their equivalent) based on the channel 
of distribution, customer categories and selling functions. After 
reviewing the record evidence, we agree with Bhansali that its home 
market sales comprise a single LOT.
    In analyzing Bhansali's selling activities for its EP sales, we 
noted that the sales involved the same selling functions associated 
with the home market LOT described above. Based upon the record 
evidence, we have determined that there is one LOT for all EP sales and 
that it is the same LOT as that in the home market. Accordingly, 
because we find the U.S. sales and home market sales to be at the same 
LOT, no LOT adjustment under section 773(a)(7)(A) is warranted.

Price-to-Price Comparisons

    We calculated NV based on FOB prices to unaffiliated customers. 
Bhansali reported no movement expenses for home market sales of similar 
and identical merchandise. We made adjustments to NV for differences in 
costs attributable to differences in the physical characteristics of 
the merchandise, pursuant to section 773(a)(6)(C)(ii) of the Tariff 
Act. We made adjustments under section 773(a)(6)(C)(iii) of the Tariff 
Act for differences in circumstances of sale for imputed credit 
expenses. Bhansali reported having no packing costs in the home market. 
We added U.S. packing costs to NV in accordance with section 
773(a)(6)(A) and (B) of the Tariff Act. See the Analysis Memo.

Ordinary Course of Trade

    Section 773(a)(1)(B) of the Act states, in part, that normal value 
(NV) is ``the price at which the foreign like product is first sold 
(or, in absence of a sale, offered for sale) for consumption in the 
exporting country, in the usual commercial quantities and in the 
ordinary course of trade.'' The purpose of the ordinary-course-of-trade 
provision ``is to prevent dumping margins from being based on sales 
which are not representative'' of the home market. Thai Pineapple 
Public Co. v. United States, 946 F. Supp. 11, 15 (CIT 1996) (quoting 
Laclede Steel Co. v. United States, Slip Op. 95-144 at 6 (CIT Aug. 11, 
1995)). Congress has not specified any criteria that the agency

[[Page 55944]]

should use in determining the appropriate ``conditions and practices.'' 
Thus, the Department, ``in its discretion, chooses how best to analyze 
the many factors involved in a determination of whether sales are made 
within the ordinary course of trade.'' Id. at 14-17. As an example of 
sales which would be considered outside the ordinary course of trade, 
the Department's regulations cite ``merchandise sold at aberrational 
prices.'' 19 CFR 351.102.
    Concerning whether all of Bhansali's home market sales were made in 
the ordinary course of trade, the record evidence indicates that in one 
case, Bhansali purchased merchandise the same week as it made its U.S. 
sale of the identical model, then re-sold the home market merchandise 
two months later at a significant loss, to the same party who had 
supplied it. We preliminarily determine that because of the exceptional 
circumstances surrounding this transaction, it was made outside the 
ordinary course of trade, and we therefore have excluded it from 
comparison with the U.S. merchandise. See the Analysis Memo.

Constructed Value

    In accordance with section 773(e) of the Tariff Act, we calculated 
CV based on the sum of Bhansali's cost of materials, SG&A, U.S. packing 
costs, and profits on home market sales. See the Analysis Memo.

Currency Conversion

    Pursuant to section 773A(a) of the Tariff Act, we made currency 
conversions into U.S. dollars based on the exchange rates in effect on 
the dates of the U.S. sales as certified by the Federal Reserve Bank.

Preliminary Results

    As a result of this review, we preliminarily determine that a 
dumping margin of 4.08% exists for Bhansali for the period August 1, 
1998 through July 31, 1999.
    The Department will disclose calculations performed within five 
days of the date of publication of this notice in accordance with 19 
CFR 351.224(b). A party may request a hearing within thirty days of 
publication. See 19 CFR 351.310(c). Any hearing, if requested, will be 
held 37 days after the date of publication, or the first working day 
thereafter. Interested parties may submit case briefs and/or written 
comments no later than 30 days after the date of publication. Rebuttal 
briefs and rebuttals to written comments, limited to issues raised in 
such briefs or comments, may be filed no later than 35 days after the 
date of publication. The Department will issue the final results of 
this new shipper review, which will include the results of its analysis 
of issues raised in the briefs, within 90 days of issuance of these 
preliminary results, unless the time limit is extended.
    Upon completion of this new shipper review, the Department shall 
determine, and Customs shall assess, antidumping duties on all 
appropriate entries. The Department will issue appraisement 
instructions directly to Customs. Bhansali did not report entered 
value; we will calculate Bhansali's duty assessment rate based on the 
ratio of the total amount of antidumping duties calculated for the 
examined sales, calculated as the difference between NV and EP, to the 
total quantity of examined sales. The rate will be assessed uniformly 
on all entries made during the POR. The Department will issue 
appraisement instructions directly to Customs.
    Furthermore, the following deposit requirements will be effective 
upon completion of the final results of this new shipper review for all 
shipments of flanges from India entered, or withdrawn from warehouse, 
for consumption on or after the publication date of the final results 
of this new shipper review, as provided by section 751(a)(1) of the 
Tariff Act: (1) The cash deposit rate for Bhansali will be the rate 
established in the final results of this new shipper review; (2) for 
merchandise exported by manufacturers or exporters not covered in this 
review but covered in the original less-than-fair-value (LTFV) 
investigation or a previous review, 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, or the 
original 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) if neither the exporter nor 
the manufacturer is a firm covered in this or any previous review, the 
cash deposit rate will be 162.14 percent, the ``all-others'' rate 
established in the LTFV investigation.
    These deposit requirements, when imposed, shall remain in effect 
until publication of the final results of the next administrative or 
new shipper review for a subsequent review period.
    This notice also serves as a preliminary reminder to importers of 
their responsibility under 19 CFR 351.402 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 new shipper review and notice are in accordance with section 
751(a)(1) of the Tariff Act (19 U.S.C. 1675(a)(1)) and 19 CFR 351.213 
and 351.214.

Troy H. Cribb,
Acting Assistant Secretary for Import Administration.
[FR Doc. 00-23795 Filed 9-14-00; 8:45 am]
BILLING CODE 3510-DS-P