[Federal Register Volume 66, Number 47 (Friday, March 9, 2001)]
[Notices]
[Pages 14127-14131]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-5916]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-533-809]


Certain Forged Stainless Steel Flanges From India; Preliminary 
Results of Antidumping Duty Administrative Review

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

ACTION: Notice of preliminary results of antidumping duty 
administrative review.

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SUMMARY: The Department of Commerce (the Department) is conducting an 
administrative review of the antidumping duty order on certain forged 
stainless steel flanges (stainless steel flanges) from India (A-533-
809) manufactured by Echjay Forgings Ltd. (Echjay), Isibars Ltd. 
(Isibars), Panchmahal Steel Ltd. (Panchmahal), Patheja Forgings and 
Auto Parts Ltd. (Patheja), and Viraj Forgings Ltd. (Viraj). The period 
of review (POR) covers the period February 1, 1999, through January 31, 
2000. We preliminarily determine that sales of stainless steel flanges 
have been made below the normal value (NV) for some of the respondents. 
If these preliminary results are adopted in our final results of 
administrative review, we will instruct the U.S. Customs Service to 
assess antidumping duties based on the difference between United States 
price and the NV. Interested parties are invited to comment on these 
preliminary results. Parties who submit argument in these proceedings 
are requested to submit with the argument (1) a statement of the issues 
and (2) a brief summary of the argument.

EFFECTIVE DATE: March 9, 2001.

FOR FURTHER INFORMATION CONTACT: Thomas Killiam, Steve Bezirganian, 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, DC 20230, telephone: 
(202) 482-5222, (202) 482-1131, or (202) 482-0649, respectively.
    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 (URAA). In addition, unless otherwise indicated, all 
citations to the Department's regulations are to 19 CFR part 351 (April 
1, 2000).

SUPPLEMENTARY INFORMATION:

Background

    On February 9, 1994, the Department published the antidumping duty 
order on stainless steel flanges from India (59 FR 5994). On February 
14, 2000, the Department published the notice of ``Opportunity to 
Request Administrative Review'' for this order covering the period 
February 1, 1999 through January 31, 2000 (65 FR 7348). In accordance 
with 19 CFR 351.213 (b)(1), Echjay requested a review of its sales, and 
the petitioners requested reviews of Isibars, Panchmahal, Patheja, and 
Viraj. The petitioners are Gerlin Inc., Ideal Forging Corporation, and 
Maas Flange Corporation. On March 30, 2000, the Department published in 
the Federal Register a notice of initiation of these antidumping duty 
administrative reviews covering the period February 1, 1999 through 
January 31, 2000 (65 FR 16875). The initiation notice also listed 
Pushpaman Exports: through subsequent correspondence with the company 
officials we determined that Pushpaman and Echjay are one and the same 
entity.
    On August 16, 2000, we published in the Federal Register our notice 
of the continuation of the antidumping duty order on stainless steel 
flanges from India (65 FR 49964), which referenced the findings of the 
Department and of the International Trade Commission with respect to 
the sunset review of this order.
    On November 2, 2000, we extended the time limit for the preliminary 
results of this administrative review to February 28, 2001 (65 FR 
65835).

Scope of the Reviews

    The products under review are certain forged stainless steel 
flanges, 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 Harmonized Tariff Schedule (``HTS''). Although the 
HTS 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.
    The POR is February 1, 1999, through January 31, 2000.

Verification

    As provided in section 782(i) of the Tariff Act, we verified 
information provided by Panchmahal and Viraj, using standard 
verification procedures, the examination of relevant sales and 
financial records, and selection of original documentation containing 
relevant information. Our verification results are outlined in the 
public versions of the verification reports, on file in Room B-099 in 
the main Commerce building.

Use of Facts Available

    Section 776(a)(2) of the Tariff Act provides that, ``if an 
interested party or any other person--(A) withholds information that 
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

[[Page 14128]]

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.'' Pursuant to section 776(a) of the Tariff Act, we 
have determined that the use of facts available is appropriate in 
determining the preliminary dumping margin for Patheja.
    Patheja failed to respond to our April 7, 2000 questionnaire, and 
our May 9 and July 11, 2000 queries. Consequently, Patheja has withheld 
requested information and significantly impeded this proceeding, 
warranting use of facts available under section 776(a). Moreover, as 
Patheja has supplied no information, sections 782(d) and (e) are 
inapplicable. By not responding to our requests, Patheja did not 
cooperate to the best of its ability. Section 776(b) of the Tariff Act 
provides that the Department may use adverse inferences, including 
information derived from the petition, in selecting facts otherwise 
available, if a party has failed to cooperate by not acting to the best 
of its ability to comply with a request for information. See also 
Statement of Administrative Action (SAA) accompanying the URAA, H.R. 
Rep. No. 103-316 at 829-831 and 870 (1994).
    Because we were unable to calculate margins for this respondent, we 
have assigned it the highest margin from any segment of this 
proceeding. See e.g., Certain Cased Pencils from the People's Republic 
of China; Preliminary Results and Rescission In Part of Antidumping 
Duty Administrative Review, 66 FR 1638, 1640, (January 9, 2001).
    The highest margin for flanges from India is 210 percent. See 
Amended Final Determination and Antidumping Duty Order; Certain Forged 
Stainless Steel Flanges from India, 59 FR 5994 (February 9, 1994) (the 
Order). This margin was based on the petition.
    Section 776(c) of the Tariff Act provides that when the Department 
relies on secondary information (such as the petition) in using the 
facts otherwise available, it must, to the extent practicable, 
corroborate that information from independent sources that are 
reasonably at its disposal. The SAA clarifies that ``corroborate'' 
means that the Department will satisfy itself that the secondary 
information to be used has probative value (see SAA at 870). The SAA 
also states that independent sources used to corroborate such evidence 
may include, for example, published price lists, official import 
statistics and U.S. Customs Service data, and information obtained from 
interested parties during the particular investigation (see SAA at 870. 
Thus, to corroborate secondary information, the Department will, to the 
extent practicable, examine the reliability and relevance of the 
information used.
    To assess the reliability of the petition margin, in accordance 
with section 776(c) of the Tariff Act, to the extent practicable, we 
examined the key elements of the calculations of export price and 
normal value upon which the petitioners based their margins for the 
petition. The U.S. prices in the petition were based on quotes to U.S. 
customers, most of which were obtained through market research. See 
Petition for the Imposition of Antidumping Duties, December 29, 1993. 
We were able to corroborate the U.S. prices in the petition by 
comparing these prices to publicly available information based on IM-
145 import statistics. See Memorandum from Thomas Killiam, Case Analyst 
to the File, Corroboration of Petition Rate for Use as Facts Available, 
February 14, 2001.
    The normal values in the petition were based on actual price 
quotations obtained through market research. The Department did not 
receive any useful information from Patheja or other interested parties 
and is aware of no other independent sources of information that would 
enable it to corroborate the margin calculations in the petition 
further. We note that four Indian manufacturers currently have a 210% 
rate under this order.
    The implementing regulation for section 776 of the Tariff Act, 
codified at 19 CFR 351.308(d), states, ``(t)he fact that corroboration 
may not be practicable in a given circumstance will not prevent the 
Secretary from applying an adverse inference as appropriate and using 
the secondary information in question.'' Additionally, the SAA at 870 
states specifically 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 in accordance 
with 776(c) of the Tariff Act, which discusses facts available and 
corroboration, we consider the margins in the petition to be 
corroborated to the extent practicable for purposes of these 
preliminary determinations (see CTL Plate from Mexico, 64 FR at 84).

U.S. Price

    For sales of all respondents in the United States, we used export 
price (EP) in accordance with sections 772(a) and 772(b) of the Tariff 
Act, as the merchandise was sold directly to the first unaffiliated 
purchaser prior to importation and constructed export price (CEP) was 
not otherwise warranted based on the facts of record. We based EP on 
the packed C&F, CIF duty paid, FOB, or ex-dock duty paid prices to the 
first unaffiliated purchasers in the United States. We added to U.S. 
price amounts for duty drawback, when reported, pursuant to section 
772(c)(1)(B) of the Tariff Act. We also made deductions for movement 
expenses in accordance with section 772(c)(2)(A) of the Tariff Act, 
including: foreign inland freight, foreign brokerage and handling, bank 
export document handling charges, ocean freight, and marine insurance.

Normal Value

A. Viability

    In order to determine whether there is 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 
during the POR is equal to or greater than five percent of the 
aggregate volume of U.S. sales of subject merchandise during the POR), 
for each respondent we compared the volume of home market sales of the 
foreign like product to the volume of U.S. sales of the subject 
merchandise. We found no reason to determine that quantity was not the 
appropriate basis for these comparisons, so value was not used. See 
351.404(b)(2).
    We based our comparisons of the volume of U.S. sales to the volume 
of home market and third country sales on reported stainless steel 
flange weight, rather than on number of pieces. The record demonstrates 
that there can be large differences between the weight (and 
corresponding cost and price) of stainless steel flanges based on 
relative sizes, so comparisons of aggregate data would be distorted for 
these products if volume comparisons were based on the number of 
pieces.
    Because the volume of Viraj's and Echjay's home market sales were 
less than five percent of the volume of their U.S. sales, we determined 
that the home markets was not viable for them. Based on Viraj's 
questionnaire response, we determined that Germany was the appropriate 
comparison market, given that the German market was viable and that the 
volume of sales to that market exceeded the volume of sales to any

[[Page 14129]]

other third country market. Based on Echjay's questionnaire response, 
we determined that the United Kingdom was the appropriate comparison 
market, given that the U.K. market was viable and that the volume of 
sales to that market exceeded the volume of sales to any other third 
country market.
    Isibars indicated that Austria was a viable comparison market, and 
submitted an Austria sales database. However, since the volume of POR 
sales in that sales file was less than five percent of the volume of 
sales Isibars reported in its U.S. sales file, Austria was not a viable 
comparison market. Consequently, pursuant to section 351.404(f) of the 
Department's regulations, for Isibars we based NV on constructed value 
(CV), as there does not appear to be a viable comparison market. 
Because Panchmahal's volume of home market sales of the foreign like 
product was less than five percent of its U.S. sales volume, pursuant 
to 19 CFR 351.404(f) we based NV on CV.

B. Arm's Length Sales

    Since no information on the record indicates any sales to 
affiliates, we did not use an arm's-length test for comparison market 
sales.

C. Cost of Production Analysis

    The petitioners in this proceeding filed timely sales-below-cost 
allegations with regard to Isibars, Panchmahal, and Viraj. See 
petitioners' letters of June 19, June 26, and July 6, 2000. The 
petitioners' allegations were based on the respondents' questionnaire 
responses. We found that petitioners' methodology provided the 
Department with a reasonable basis to believe or suspect that sales in 
the home market had been made at prices below the COP. Accordingly, 
pursuant to section 773(b)(1) of the Tariff Act, we initiated 
investigations to determine whether the three companies' sales of 
flanges were made at prices below COP during the POR. See memoranda 
from Thomas Killiam, Case Analyst, to Richard Weible, Office Director, 
Petitioners' Allegation of Sales Below the Cost of Production, dated 
July 6, 2000 (Viraj) and July 11, 2000 (Panchmahal, Isibars).
    Each respondent defined its unique products, and thus its costs, 
based on different product characteristics. We determined that only 
grade, type, size, pressure rating, and finish were required to define 
models for purposes of matching. To make the model definitions for the 
cost test identical to those in the model match, we used the above 
criteria to define models and recalculate costs. We performed these 
calculations for Isibars and Viraj, respondents subject to cost 
investigations or for which difference of merchandise adjustments and/
or use of CV might be required. We used the cost information provided 
by these respondents, and also, where necessary, we converted costs 
from a per-piece basis to a per-kilogram basis.
    No such cost recalculations were required for Echjay, because its 
U.S. sales matched identically to comparison market sales, and no cost 
investigation is being conducted for Echjay.
    No redefinition of models was required for Panchmahal because its 
models (CONNUMs) had been defined using the same five criteria listed 
above. See the Department's company-specific analysis memoranda for 
Echjay, Isibars, Panchmahal, and Viraj, dated concurrently with this 
notice and available in the Central Records Unit.
    In accordance with section 773(b)(3) of the Tariff Act, for Viraj 
we calculated COP based on the sum of the costs of materials and 
fabrication employed in producing the foreign like product, plus 
selling, general, and administrative expenses (SG&A) and packing. We 
relied on the home market sales and COP information provided by Viraj 
except where otherwise noted in this notice and in the Department's 
Preliminary Analysis Memoranda.
    After calculating COP, we tested whether home market sales of 
stainless steel flanges were made at prices below COP within an 
extended period of time in substantial quantities and whether such 
prices permit the recovery of all costs within a reasonable period of 
time. We compared model-specific COPs to the reported home market 
prices less movement charges, discounts, and rebates.
    Pursuant to section 773(b)(2)(C) of the Tariff Act, where less than 
20 percent of a respondent's home market sales for a model are at 
prices less than the COP, we do not disregard any below-cost sales of 
that model because we determine that the below-cost sales were not made 
within an extended period of time in ``substantial quantities.'' Where 
20 percent or more of a respondent's home market sales of a given model 
are at prices less than COP, we disregard the below-cost sales because 
they are (1) made within an extended period of time in substantial 
quantities in accordance with sections 773(b)(2)(B) and (C) of the 
Tariff Act, and (2) based on comparisons of prices to weighted-average 
COPs for the POR, were at prices which would not permit the recovery of 
all costs within a reasonable period of time in accordance with section 
773(b)(2)(D) of the Tariff Act.
    The results of our cost test for Viraj indicated that for certain 
comparison market models, less than 20 percent of the sales of the 
model were at prices below COP. We therefore retained all sales of 
these comparison market models in our analysis and used them as the 
basis for determining NV. Our cost test also indicated that within an 
extended period of time (one year, in accordance with section 
773(b)(2)(B) of the Tariff Act), for certain comparison market models, 
more than 20 percent of the comparison market sales were sold at prices 
below COP. In accordance with section 773(b)(1) of the Tariff Act, we 
therefore excluded these below-cost sales from our analysis and used 
the remaining above-cost sales as the basis for determining NV.
    As noted above, neither Isibars nor Panchmahal had a viable 
comparison market, and therefore we conducted no cost test for these 
companies.

D. Product Comparisons

    We compared Echjay's U.S. sales with contemporaneous sales of the 
foreign like product in the United Kingdom; Isibars' and Panchmahal's 
U.S. sales with constructed value; and Viraj's U.S. sales with 
contemporaneous sales of the foreign like product in Germany. As noted, 
we considered stainless steel flanges identical based on the following 
five criteria: grade, type, size, pressure rating, and finish. We used 
a 20 percent difference-in-merchandise (difmer) cost deviation cap as 
the maximum difference in cost allowable for similar merchandise, which 
we calculated as the absolute value of the difference between the U.S. 
and comparison market variable costs of manufacturing divided by the 
total cost of manufacturing of the U.S. product.

E. 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 comparison market is that of the starting-price sales in 
the comparison market or, when NV is based on CV, that of the sales 
from which we derive SG&A expenses and profit. With respect to U.S. 
price for EP transactions, the LOT is also that of the starting-price 
sale, which is usually from the exporter to the importer. For CEP, the 
LOT is that of the sale from the exporter to the importer.
    To determine whether comparison market sales are at a different 
level of trade than U.S. sales, we examined stages in the marketing 
process and

[[Page 14130]]

selling functions along the chain of distribution between the producer 
and the unaffiliated customer. In analyzing the selling activities of 
the respondents, we did not note any significant differences in 
functions provided in any of the markets. Based upon the record 
evidence, we have determined that for each respondent there is one LOT 
for all EP sales, the same LOT as for all comparison market sales. 
Accordingly, because we find the U.S. sales and comparison market sales 
to be at the same LOT, no LOT adjustment under section 773(a)(7)(A) is 
warranted.

F. Comparison Market Price

    We based comparison market prices on the packed, ex-factory or 
delivered prices to the unaffiliated purchasers in the comparison 
market. We made adjustments for differences in packing and for movement 
expenses in accordance with sections 773(a)(6)(A) and (B) of the Tariff 
Act. In addition, we made adjustments for differences in cost 
attributable to differences in physical characteristics of the 
merchandise pursuant to section 773(a)(6)(C)(ii) of the Tariff Act, and 
for differences in circumstances of sale (COS) in accordance with 
section 773(a)(6)(C)(iii) of the Tariff Act and 19 CFR 351.410. For 
comparison to EP we made COS adjustments by deducting comparison market 
direct selling expenses and adding U.S. direct selling expenses.
    In accordance with section 773(a)(4) of the Tariff Act, we based NV 
on CV if we were unable to find a contemporaneous comparison market 
match for the U.S. sale. As noted, we recalculated the reported cost 
used for the determination of CV. We calculated CV based on the cost of 
materials and fabrication employed in producing the subject 
merchandise, SG&A, and profit. In accordance with 773(e)(2)(A) of the 
Tariff Act, we based SG&A expenses and profit on the amounts incurred 
and realized by the respondent in connection with the production and 
sale of the foreign like product in the ordinary course of trade for 
consumption in the foreign country. For selling expenses, we used the 
weighted-average comparison market selling expenses. Where appropriate, 
we made COS adjustments to CV in accordance with section 773(a)(8) of 
the Tariff Act and 19 CFR 351.410. We also made adjustments, where 
applicable, for comparison market indirect selling expenses to offset 
commissions in EP comparisons.
    As noted above, for Isibars and Panchmahal, we based NV on CV 
because there were no viable comparison markets. Because there was no 
viable comparison market upon which to base SG&A and profit expenses 
for these two respondents, we based SG&A, interest expense, and profit 
on the Echjay*s audited public financial statements for the year ended 
March 31, 1999, in accordance with section 773(e)(2)(B)(iii) of the 
Tariff Act.

Preliminary Results of Review

    As a result of our reviews, we preliminarily determine the 
weighted-average dumping margins for the period February 1, 1999, 
through January 31, 2000, to be as follows:

------------------------------------------------------------------------
                                                               Margin
                   Manufacturer/exporter                      (percent)
------------------------------------------------------------------------
Echjay....................................................          0
Isibars...................................................         24.05
Panchmahal................................................          0.81
Patheja...................................................        210.00
Viraj.....................................................         21.10
------------------------------------------------------------------------

    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). An interested party may request a hearing within 30 
days of publication. See CFR 351.310(c). Any hearing, if requested, 
will be held 37 days after the date of publication, or the first 
business day thereafter, unless the Department alters the date per 19 
CFR 351.310(d). Interested parties may submit case briefs and/or 
written comments no later than 30 days after the date of publication of 
these preliminary results of review. Rebuttal briefs and rebuttals to 
written comments, limited to issues raised in the case briefs and 
comments, may be filed no later than 35 days after the date of 
publication of this notice. Parties who submit argument in these 
proceedings are requested to submit with the argument (1) a statement 
of the issue, (2) a brief summary of the argument and (3) a table of 
authorities. Further, we would appreciate it if parties submitting 
written comments would provide the Department with an additional copy 
of the public version of any such comments on diskette. The Department 
will issue final results of these administrative reviews, including the 
results of our analysis of the issues raised in any such written 
comments or at a hearing, within 120 days of publication of these 
preliminary results.
    The Department shall determine, and the U.S. Customs Service shall 
assess, antidumping duties on all appropriate entries. In accordance 
with 19 CFR 351.212(b)(1), we will calculate assessment rates for the 
merchandise based on the ratio of the total amount of antidumping 
duties calculated for the examined sales made during the POR to the 
total quantity (in kilograms) of the sales used to calculate those 
duties. This rate will be assessed uniformly on all entries of 
merchandise of that manufacturer/exporter made during the POR. The 
Department will issue appropriate appraisement instructions directly to 
the Customs Service upon completion of the review.
    Furthermore, the following deposit requirements will be effective 
upon completion of the final results of these administrative reviews 
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 administrative review, as provided by section 
751(a)(1) of the Tariff Act: (1) The cash deposit rates for the 
reviewed companies will be the rates established in the final results 
of administrative review; (2) for merchandise exported by manufacturers 
or exporters not covered in these reviews but covered in the original 
less-than- fair-value (LTFV) investigation or a previous review, the 
cash deposit will continue to be the most recent rate published in the 
final determination or final results for which the manufacturer or 
exporter received a company-specific rate; (3) if the exporter is not a 
firm covered in these reviews, or the original investigation, but the 
manufacturer is, the cash deposit rate will be that established for the 
manufacturer of the merchandise in the final results of these reviews, 
or the LTFV investigation; and (4) if neither the exporter nor the 
manufacturer is a firm covered in these or any previous reviews, the 
cash deposit rate will be 162.14 percent, the ``all others'' rate 
established in the LTFV investigation (59 FR 5994, February 9, 1994).
    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' presumption that 
reimbursement of antidumping duties occurred and the subsequent 
assessment of double antidumping duties.
    We are issuing and publishing this notice in accordance with 
sections 751(a)(1) and 777(i)(1) of the Tariff Act. Effective January 
20, 2001, Bernard T. Carreau is fulfilling the duties of the Assistant 
Secretary for Import Administration.


[[Page 14131]]


    Dated: February 28, 2001.
Bernard T. Carreau,
Deputy Assistant Secretary, Import Administration.
[FR Doc. 01-5916 Filed 3-8-01; 8:45 am]
BILLING CODE 3510-DS-P