[Federal Register Volume 68, Number 5 (Wednesday, January 8, 2003)]
[Notices]
[Pages 1040-1050]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-347]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-533-808]


Stainless Steel Wire Rods from India; Preliminary Results and 
Partial Rescission of Antidumping Duty Administrative Review

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

ACTION: Notice of Preliminary Results and Partial Rescission 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 stainless 
steel wire rods (``SSWR'') from India in response to a request by the 
Viraj Group, Limited (``Viraj Group''), and by petitioners, who 
requested a review of the following companies: Panchmahal Steel Limited 
(``Panchmahal''), Mukand Limited (``Mukand'') and Isibars Steel 
(``Isibars''). The period of review (``POR'') is December 1, 2000, 
through November 30, 2001.
    We have preliminarily determined that Mukand and the Viraj Group 
have sold subject merchandise at less than normal value (``NV'') during 
the POR. In addition, we have determined to rescind the review with 
respect to Isibars based on the withdrawal of the only request for 
review of the company. Lastly, we have preliminarily determined to 
apply an adverse facts available (``AFA'') rate to all sales and 
entries of Panchmahal's subject merchandise during the POR. If these 
preliminary results are adopted in our final results of this 
administrative review, we will instruct the U.S. Customs Service to 
assess antidumping duties on entries of subject merchandise during the 
POR for which the importer-specific assessment rates are above de 
minimis.
    We invite interested parties to comment on these preliminary 
results. Parties who submit arguments in this segment of the proceeding 
are requested to submit with the argument: (1) a statement of the 
issue, and (2) a brief summary of the argument.

EFFECTIVE DATE: January 8, 2003

FOR FURTHER INFORMATION CONTACT: For the Viraj Group contact Stephen 
Bailey at (202) 482-1102, for Panchmahal contact Marlene Hewitt at 
(202) 482-1385, for Mukand contact Jonathen Herzog at (202) 482-4271, 
and for Isibars contact Lilit Astvatsatrian at (202) 482-6412, or 
Robert Bolling at (202) 482-3434. AD/CVD Enforcement Group III, Office 
9, Import Administration, International Trade Administration, U.S. 
Department of Commerce, 14th Street and Constitution Avenue, N.W., 
Washington, D.C. 20230.

SUPPLEMENTARY INFORMATION:

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. In addition, unless otherwise 
indicated, all references to the Department's regulations are to the 
provisions codified at 19 C.F.R. Part 351 (2001).

Background

    On October 20, 1993, the Department published the final 
determination in the Federal Register that resulted in the antidumping 
duty order on certain stainless steel wire rod from India. See Final 
Determination of Sales at Less Than Fair Value: Certain Stainless Steel 
Wire Rods From India, 58 FR 54110 (October 20, 1993) (``Antidumping 
Duty Order''). On December 3, 2001, the Department published in the 
Federal Register a notice of opportunity to request an administrative 
review of this antidumping duty order. See Antidumping or 
Countervailing Duty Order, Finding, or Suspended Investigation; 
Opportunity To Request Administrative Review, 66 FR 60183, (December 3, 
2001) (``Opportunity to Request Administrative Review'').
    On December 27, 2001, the Viraj Group requested an administrative 
review of the antidumping duty order on certain stainless steel wire 
rods from India. See the Viraj Group's December 27, 2001 submission. On 
December 28, 2001, petitioners requested an administrative review of 
the antidumping duty order on certain stainless steel wire rods from 
India for Isibars, Mukand, and Panchmahal. See petitioner's December 
28, 2001 submission. In accordance with 19 C.F.R. 351.221(b), we 
published a notice of initiation of the review of Isibars, Mukand, 
Panchmahal and the Viraj Group on January 29, 2002. See Initiation of 
Antidumping and Countervailing Duty Administrative Reviews, 67 FR 4236, 
(January 29, 2002).
    On January 29, 2002, the Department issued a questionnaire to the 
Viraj Group, Panchmahal, Mukand, and Isibars. The Department initiated 
a cost of production inquiry and requested that Isibars and the Viraj 
Group respond to section D of the questionnaire in addition to sections 
A, B, and C.\1\
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    \1\ Because the Department disregarded certain Viraj Group sales 
made in the home market at prices below the cost of producing the 
subject merchandise in the most recently completed segment of this 
proceeding and excluded such sales from normal value, the Department 
determined that there are reasonable grounds to believe or suspect 
that the Viraj Group made sales in the home market at prices below 
the cost of producing the merchandise in this review. See Final 
Results; and section 773(b)(2)(A)(ii) of the Act.
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    Isibars, Mukand, and the Viraj Group submitted their Section A 
questionnaire responses on February 26, 2002. On March 15, and 20, 
2002, Panchmahal submitted its Section A questionnaire response in two 
submissions.
    On March 26, 2002, petitioners submitted comments regarding 
Isibars' Section A questionnaire response. On April 5, 2002, Isibars 
and Mukand submitted their Sections B and C questionnaire responses. On 
April 8 and 9, 2002, the Viraj Group submitted its Sections B, C, and D 
questionnaire responses, respectively. On April 9, 2002, Panchmahal 
submitted its Sections B and C questionnaire responses. On May 9, 2002, 
petitioners withdrew their request for an administrative review for 
Isibars.
    On April 23 and 25, 2002, petitioners submitted allegations that 
Panchmahal and Mukand were selling subject merchandise below their 
costs of production, respectively. See petitioners April 23, 2002 
submission at 2 and April 25, 2002 at 2. On May 30, 2002, the 
Department initiated a cost of production inquiry with respect to 
Mukand, and issued its Section D questionnaire to Mukand. On June 11, 
2002, the Department initiated a cost of production inquiry with 
respect to Panchmahal, and issued its Section D questionnaire to 
Panchmahal. On June 27, 2002, Mukand submitted its Section

[[Page 1041]]

D questionnaire response. On August 1, 2002, Panchmahal submitted its 
Section D questionnaire response.
    The Department issued its first Sections A, B, and C supplemental 
questionnaire to Mukand on July 3, 2002. The Department received a 
response to this questionnaire on July 17, 2002. The Department issued 
a second Sections A, B, C and a first Section D supplemental 
questionnaire to Mukand on August 7, 2002, and received a response to 
this questionnaire on August 23, 2002, with accompanying exhibits 
submitted on August 26, 2002. The Department issued its third 
supplemental questionnaire for Sections A, B, C and D to Mukand on 
September 9, 2002, and received a response on September 26, 2002. On 
October 4, 2002, the Department issued its fourth Sections A, B, C and 
D supplemental questionnaire to Mukand and received a response on 
October 11, 2002. On October 17, 2002, the Department issued a fifth 
supplemental questionnaire concerning Sections A and C to Mukand. The 
Department received a response to this questionnaire on October 21, 
2002. The Department issued a sixth supplemental questionnaire 
concerning Sections B, C, and D on November 26, 2002, to Mukand and 
received a response to this questionnaire on December 4, 2002. The 
Department issued a seventh supplemental questionnaire to Mukand 
concerning Section C on November 26, 2002, and received a response to 
this questionnaire on December 13, 2002.
    The Department issued a Section A supplemental questionnaire to 
Panchmahal on May 7, 2002. The Department received a response to this 
questionnaire on May 29 and 30, 2002. The Department issued to 
Panchmahal a Sections B and C supplemental questionnaire on July 16, 
2002, and received a response to this questionnaire on July 29, 2002. 
The Department issued to Panchmahal a Sections A, B, C, and D 
supplemental questionnaire on August 27, 2002, and received a response 
on September 19, 2002, with additional material and exhibits on 
September 23, 2002. The Department issued to Panchmahal a Section D 
supplemental questionnaire on September 12, 2002, and received a 
response on September 23, 2002. The Department issued to Panchmahal a 
Sections B, C, and D supplemental questionnaire on October 1, 2002, and 
received a response to this questionnaire on October 18, 2002. The 
Department issued to Panchmahal a Section D supplemental questionnaire 
on October 23, 2002, and received a response to this questionnaire on 
October 25, 2002. The Department issued to Panchmahal a Sections B, C, 
and D supplemental questionnaire on October 28, 2002, and received a 
response to this questionnaire on November 5, 2002. The Department 
issued to Panchmahal a Section D supplemental questionnaire on November 
7, 2002, and received a response to this questionnaire on November 12, 
2002.
    The Department issued its first Sections A, B, C, and D 
supplemental questionnaire to the Viraj Group on June 12, 2002. The 
Department received a response to this questionnaire on July 23, 2002. 
The Department issued a second Sections A, B, C, and D supplemental 
questionnaire to the Viraj Group on September 13, 2002, and received a 
response to this questionnaire from the Viraj Group on October 4, 2002, 
with the accompanying exhibits submitted on October 7, 2002. The 
Department issued a third supplemental questionnaire to Viraj for 
Sections B and C on September 20, 2002, in which we asked for a revised 
database for the home and U.S. markets. The Department received a 
response to this supplemental questionnaire on October 7, 2002. The 
Department issued a fourth supplemental questionnaire for Sections A, 
B, C, and D to the Viraj Group on November 18, 2002. The Department 
received a response to this questionnaire on December 2, 2002.
    On July 9, 2002, due to the reasons set forth in the Extension of 
Time Limit for the Preliminary Results of Antidumping Administrative 
Review: Certain Stainless Steel Wire Rod from India, 67 FR 45481, the 
Department extended the due date for the preliminary results. In 
accordance with section 751(a)(3)(A) of the Act, the Department 
extended the due date for the notice of preliminary results 60 days, 
from the original due date of September 2, 2002, to November 1, 2002. 
See Extension of Time Limit for the Preliminary Results of Antidumping 
Administrative Review: Certain Stainless Steel Wire Rod from India, 67 
FR 45481 (July 9, 2002).
    Additionally, on September 17, 2002, in accordance with section 
751(a)(3)(A) of the Act, the Department again extended the due date for 
the notice of preliminary results an additional 30 days, from the 
revised due date of November 1, 2002 to December 1, 2002. See Extension 
of Time Limit for the Preliminary Results of Antidumping Administrative 
Review: Certain Stainless Steel Wire Rod from India, 67 FR 58585 
(September 17, 2002).
    Further, on November 13, 2002, in accordance with section 
751(a)(3)(A) of the Act, the Department again extended the due date for 
the notice of preliminary results an additional 30 days, from the 
revised due date of December 1, 2002 to December 31, 2002. See 
Stainless Steel Wire Rod from India: Extension of Time Limit of 
Preliminary Results of Antidumping Duty Administrative Review, 67 FR 
68834 (November 13, 2002).

Period of Review

    The period of review (``POR'') is December 1, 2000, through 
November 30, 2001.

Scope of the Review

    The merchandise under review is certain SSWR, which are hot-rolled 
or hot-rolled annealed and/or pickled rounds, squares, octagons, 
hexagons or other shapes, in coils. SSWR are made of alloy steels 
containing, by weight, 1.2 percent or less of carbon and 10.5 percent 
or more of chromium, with or without other elements. These products are 
only manufactured by hot-rolling and are normally sold in coiled form, 
and are of solid cross section. The majority of SSWR sold in the United 
States are round in cross-section shape, annealed and pickled. The most 
common size is 5.5 millimeters in diameter.
    The SSWR subject to this review are currently classifiable under 
subheadings 7221.00.0005, 7221.00.0015, 7221.00.0030, 7221.00.0045, and 
7221.00.0075 of the Harmonized Tariff Schedule of the United States 
(HTSUS). Although the HTSUS subheadings are 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.

Verification

    As provided in section 782(i) of the Act, we verified sales and 
cost information provided by Mukand from October 21 through October 31, 
2002, using standard verification procedures, including an examination 
of relevant sales, cost, financial records, and selection of original 
documentation containing relevant information. Our verification results 
are outlined in the public version of the verification report and are 
on file in the Department's Central Records Unit located in Room B-099 
of the main Department of Commerce Building, 14th Street and 
Constitution Avenue, N.W., Washington, D.C.

Partial Rescission of Review

    Section 351.213(d)(1) of the Department's regulations provides that 
a party which requests an administrative

[[Page 1042]]

review may withdraw the request within 90 days after the date of 
publication of the notice of initiation of the requested administrative 
review. The Department may extend this deadline if it is reasonable to 
do so. On May 9, 2002, petitioners withdrew their request for an 
administrative review of Isibars. Although petitioners withdrew their 
request for the review after the 90-day period had expired, the 
Department is rescinding the administrative review of Isibars for the 
order on SSWR from India for the period December 1, 2000 through 
November 30, 2001, because the review for this company had not yet 
progressed beyond a point where it would have been unreasonable to 
allow the petitioners to withdraw their request for review, no other 
party requested a review of Isibars, and no party objected; it is 
therefore reasonable for the Department to rescind the review with 
respect to Isibars. This action is consistent with the Department's 
practice. See Frozen Concentrated Orange Juice From Brazil; Final 
Results and Partial Rescission of Antidumping Duty Administrative 
Review, 67 FR 40913 (June 14, 2002) and Antifriction Bearings and Parts 
Thereof From France, Germany, Japan, and the United Kingdom: Partial 
and Full Rescissions of Antidumping Duty Administrative Reviews, 67 FR 
65089 (October 23, 2002) where, pursuant to a request filed after the 
90 day deadline, the Department rescinded the review with respect to 
one respondent because the review of that respondent had not progressed 
beyond a point where it would have been unreasonable to grant the 
request for rescission. Therefore, in accordance with 19 C.F.R. 
351.213(d)(1) and consistent with the Department's practice, the 
Department is rescinding the review with respect to Isibars.

Facts Available

    In the instant review, despite numerous requests and clarifications 
from the Department, Panchmahal failed to provide or withheld the 
information the Department requested. As explained in detail below, 
because the Department received inadequate responses to the 
questionnaire and multiple supplemental questionnaires from Panchmahal, 
the Department could not verify the incomplete information that 
Panchmahal did provide, which is necessary for the margin analysis.
    Section 776(a)(2) of the Act provides that, if an interested party: 
(A) withholds information that has been requested by the Department; 
(B) fails to provide such information in a timely manner or in the form 
or manner requested subject to sections 782 (c) and (e); (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) of the Act, the Department shall, subject to Section 
782(d), use the facts otherwise available in reaching the applicable 
determination.
    Section 782(c)(1) of the Act provides that, if an interested party 
promptly notifies the Department that it is unable to submit the 
information requested in the requested form and manner, together with a 
full explanation and suggested alternative forms in which such party is 
able to submit the information, the Department shall take into 
consideration the ability of the party to submit the information in the 
requested form and manner, and may modify such requirements to the 
extent necessary to avoid imposing an unreasonable burden on that 
party. Section 782(c)(2) of the Act similarly provides that the 
Department shall consider the ability of the party submitting the 
information and shall provide such interested party assistance that is 
practicable.
    Section 782(d) of the Act provides that, if the Department 
determines that a response to a request for information does not comply 
with the request, the Department will inform the person submitting the 
response of the nature of the deficiency and shall, to the extent 
practicable, provide that person the opportunity to remedy or explain 
the deficiency. If the person submits further information that 
continues to be unsatisfactory, or this information is not submitted 
within the applicable time limits, the Department may, subject to 
section 782(e) of the Act, disregard all or part of the original and 
subsequent responses, as appropriate.
    Pursuant to section 782(e) of the Act, notwithstanding the 
Department's determination that the submitted information is 
``deficient'' under section 782(d) of the Act, the Department shall not 
decline to consider such information if all of the following 
requirements are satisfied: (1) The information is submitted by the 
established deadline; (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; and 
(5) the information can be used without undue difficulties.
    In this investigation, Panchmahal failed to provide or withheld the 
information necessary to properly calculate a dumping margin, in the 
form and manner requested by the Department, which prevented the 
Department from conducting verification. Despite numerous requests and 
extra assistance from the Department, Panchmahal failed to provide cost 
reconciliations, that is, an explanation as to how it compiled its POR 
per-unit costs as derived from its cost accounting system/financial 
statements. Furthermore, Panchmahal is aware of the Department's 
requirements given that it has participated in other reviews in other 
proceedings in which the Department verified Panchmahal's cost and 
sales information. See Stainless Steel Bar From India; Preliminary 
Results of Antidumping Duty Administrative Review and Partial 
Rescission of Administrative Review 66 FR 8939, (February 5, 2001).
    The Department specifically requested the cost reconciliations in 
the original questionnaire sent to Panchmahal on January 29, 2002. The 
Department offered Panchmahal the opportunity to supplement its 
questionnaire response pursuant to section 782(d) of the Act to address 
the deficiencies and omissions of data which rendered its previous 
response inadequate for use in the preliminary determination. In 
particular, the Department issued six supplemental questionnaires for 
section D (i.e., August 27, 2002; September 12, 2002; October 1, 2002; 
October 23, 2002; October 28, 2002; and November 7, 2002). Five of 
these supplemental questionnaires requested that Panchmahal reconcile 
its reported POR per-unit costs to its financial statements. In the 
supplemental questionnaires, the Department also requested Panchmahal 
to calculate its cost of production figures based on actual costs 
incurred by Panchmahal during the POR. Moreover, in accordance with 
section 782(c) the Department also considered Panchmahal's difficulties 
in submitting the requested information and provided additional 
telephone and electronic-mail clarifications.
    Although Panchmahal eventually provided what it alleged were its 
reported cost data on a POR basis in the fifth supplemental 
questionnaire response, Panchmahal still failed to explain the 
methodology it used to derive its POR per-unit costs from its cost 
accounting system. See fifth Supplemental Questionnaire Response, 
received November 4, 2002. Panchmahal's failure to reconcile its 
financial statements to its POR per-unit costs as requested by the 
Department in its original and six supplemental questionnaires 
constitutes a failure because Panchmahal did not provide the required 
information without

[[Page 1043]]

explanation and because Panchmahal also withheld the information 
although it knew the requirements of the Department for cost 
verification based on its own previous experience and declined to 
comply to the best of its ability under sections 776(a)(2)(A) and (B). 
Most importantly, this failure to provide or withholding of the 
requested information by Panchmahal has resulted in an inadequate 
response that prevented the Department from conducting verification and 
using its data in the preliminary results. See Cancellation of 
Verification Memorandum to the File from Stephen Bailey to Edward Yang, 
dated November 18, 2002. Thus, pursuant to sections 776(a)(2)(A) and 
(B) of the Act, and having satisfied sections 782(c)(2), (d), and (e) 
of the Act, the Department must apply facts otherwise available in this 
case.
    In selecting from among the facts otherwise available, section 
776(b) of the Act provides that adverse inferences may be used in 
selecting from the facts available if a party has failed to cooperate 
by not acting to the best of its ability to comply with a request for 
information. Adverse inferences are appropriate ``to ensure that the 
party does not obtain a more favorable result by failing to cooperate 
than if it had cooperated fully.'' See Statement of Administrative 
Action (``SAA'') accompanying the Uruguay Round Agreements Act 
(``URAA''), H.R. Doc. No. 103-316, Citation No. (1994), at 870. 
Furthermore, ``an affirmative finding of bad faith on the part of the 
respondent is not required before the Department may make an adverse 
inference.'' See also Antidumping Duties, Countervailing Duties; Final 
Rule, 62 FR 27340 (May 17, 1997).
    In this case, Panchmahal has failed to cooperate by not acting to 
the best of its ability to comply with the request for information. As 
discussed above, despite the numerous requests by the Department, 
Panchmahal failed to provide or withheld requested information from the 
Department. In response to Panchmahal's request for assistance via a 
telephone call from Mr. Pratik of Panchmahal, the Department clarified 
to Panchmahal the Department's cost reconciliation requests both in the 
telephone conversation and in a follow-up e-mail. See Memorandum to the 
File dated November 1, 2002. Panchmahal was provided numerous 
opportunities and supplemental questionnaires to fully respond to the 
Department's request for a cost reconciliation and to correct response 
deficiencies, in accordance with section 782(d) of the Act. See 
Cancellation of Verification Memorandum to the File from Stephen Bailey 
to Ed Yang, dated November 18, 2002. However, despite the assistance 
offered and provided by the Department's staff, Panchmahal failed to 
submit a questionnaire response that addressed the most important 
deficiency identified by the Department in each of the six supplemental 
questionnaires, the cost reconciliation.
    Due to Panchmahal's failure to provide the necessary requested 
information that the Department had identified as necessary for the 
verification, the Department was precluded from conducting verification 
by the inadequacy of information on the record. Moreover, Panchmahal 
failed to provide a reasonable explanation for its failure to comply 
with these standard requests for information. Accordingly, the 
Department finds that Panchmahal did not act to the best of its ability 
to provide the information requested, despite the extensive assistance 
provided by the Department. As facts available, we have preliminarily 
assigned Panchmahal the all others rate of 48.80 percent.

Collapsing

    In the previous administrative review, the Department decided to 
collapse Viraj Forgings Limited (``VFL''), Viraj Alloys Limited 
(``VAL'') and Viraj Impoexpo Limited (``VIL'') because the companies 
were found capable, through their sales and production operations, of 
manipulating prices or affecting production decisions (of each other). 
See Stainless Steel Wire Rod From India; Final Results of Antidumping 
Duty Administrative Review, 67 FR 37391 (May 29, 2002). In this case, 
the Viraj Group reported that there were no operational or legal 
changes to the Viraj Group during this POR. See the Viraj Group's July 
23, 2002 submission at page 1. Based on the decision in the previous 
administrative review and because no information on the record deviates 
from the facts of the previous administrative review with respect to 
the factors which are used to determine collapsing, the Department will 
continue to treat VFL, VAL, and VIL as one entity for purposes of this 
administrative review, called ``Viraj Group.''

Normal Value Comparisons

    To determine whether Mukand's and the Viraj Group's sales of 
subject merchandise from India to the United States were made at less 
than normal value, we compared the export price (``EP'') and 
constructed export price (``CEP''), as appropriate, to the normal value 
(``NV''), as described in the ``Export Price/Constructed Export Price'' 
and ``Normal Value'' sections of this notice, below. In accordance with 
section 777A(d)(2) of the Act, we calculated monthly weighted-average 
prices for NV and compared these to individual EP and CEP transactions.

Product Comparisons

    In accordance with section 771(16) of the Act, we considered all 
products covered by the Scope of the Review section above, which were 
produced and sold by Mukand and the Viraj Group in the home market 
during the POR, to be foreign like products for purposes of determining 
appropriate comparisons to U.S. sales. Where there were no sales of 
identical merchandise in the home market to compare to U.S. sales, we 
compared U.S. sales to the next most similar foreign like product on 
the basis of the characteristics and reporting instructions listed in 
the Department's questionnaire.

Mukand

    Mukand submitted information on the record which claimed that all 
of its grades should be treated as distinct grades for calculation 
purposes. See Mukand's July 17, 2002 submission at 2. To verify this 
claim, the Department requested that Mukand provide a chemical 
breakdown of each of its grades. After analyzing the data presented by 
Mukand, the Department has determined that there is insufficient record 
evidence to support Mukand's position that grade 304M is a distinct 
grade from 304, that grade 304LN is a distinct grade from 304L and that 
grade 420 is a distinct grade from grade 410. Therefore, the Department 
has preliminarily determined to combine the above grades; specifically, 
the Department has determined that grade 304M should be treated as 
grade 304, grade 304LN should be treated as grade 304L, and grade 420 
should be treated as grade 410.
    The grade chemistries provided on the record by Mukand indicate 
that grade 304M is a subset of grade 304, because they have similar 
chemistries and compositions; thus, Mukand's grades 304 and 304M have 
been treated by the Department as one grade for purposes of the model 
match program. Further, when the Department compared the chemistries of 
Mukand's grades 410 and 420 only slight differences existed, but when 
compared to the grade standards set out by the American Iron and Steel 
Institute (``AISI''), the reported chemistry for Mukand's grade 420 is 
more similar to the grade chemistry of AISI grade 410

[[Page 1044]]

than the grade chemistry for AISI grade 420; thus, Mukand's grades 420 
and 410 have been treated by the Department as one grade for purposes 
of the model match program. Finally, the chemistry ranges reported by 
Mukand for graded 304L and 304LN indicate that grade 304LN has a 
similar chemistry and composition to grade 304L; thus, Mukand's grades 
304LN and 304L have been treated by the Department as one grade for 
purposes of the model match program.
    It is the Department's practice not to create additional categories 
unless the physical characteristics are significantly different from an 
existing known category. See Certain Cold-Rolled Carbon Steel Flat 
Products From Korea: Final Results of Antidumping Duty Administrative 
Review, 63 FR 781 (January 7, 1998). Therefore, for the purposes of 
these preliminary results, the Department has combined the grades as 
follows in its model match program: grade 304M should be treated as 
grade 304, grade 304LN should be treated as grade 304L, and grade 420 
should be treated as grade 410.

Export Price and Constructed Export Price

    In accordance with section 772(a) of the Act, export price (``EP'') 
is the price at which the subject merchandise is first sold (or agreed 
to be sold) before the date of importation by the producer or exporter 
of the subject merchandise outside of the United States to an 
unaffiliated purchaser in the United States or to an unaffiliated 
purchaser for exportation to the United States. In accordance with 
section 772(b) of the Act, constructed export price (``CEP'') is the 
price at which the subject merchandise is first sold (or agreed to be 
sold) in the United States before or after the date of importation by 
or for the account of the producer or exporter of such merchandise or 
by a seller affiliated with the producer or exporter, to a purchaser 
not affiliated with the producer or exporter, as adjusted under 
subsections (c) and (d).
    For purposes of this review, Mukand has classified certain sales as 
EP sales and certain sales as CEP sales. Based on the information on 
the record, we are using both export price and constructed export price 
as defined in section 772(a) and (b) of the Act.
    For purposes of this review, the Viraj Group has classified all 
sales as CEP sales. Based on the information on the record, we are 
using constructed export price as defined in section 772(b) of the Act.

Mukand

    Mukand reported both EP and CEP sales during the POR in the United 
States. Mukand originally reported all of its U.S. sales as EP sales. 
Mukand explained that it had reported its sales as EP sales because in 
the ordinary course of trade, Mukand International Limited (``MIL''), 
Mukand's wholly-owned subsidiary, which was based in the United Kingdom 
during the POR, sells to one unaffiliated U.S. customer (``U.S. 
customer''), a trading company, prior to importation, thus meeting the 
definition of an EP transaction.
    At verification, the Department found that in an ordinary sale, the 
unaffiliated U.S. customer initiates a sale by sending a purchase order 
to MIL. See Sales and Cost Verification of Mukand Limited in the 
Antidumping Administrative Review of Stainless Steel Wire Rod from 
India (``Mukand Verification Report'') at page 32. MIL acknowledges the 
customer's order and then sends the order information on to Mukand. See 
Mukand Verification Report at 32. Mukand produces the subject 
merchandise and upon completion of the order, invoices MIL and MIL 
invoices the unaffiliated U.S. customer in a back-to-back transaction. 
See Mukand Verification Report at 32. Mukand then ships the subject 
merchandise to the unaffiliated U.S. customer. See Mukand Verification 
Report at 32. Mukand arranges for shipping from its production 
facilities in Mumbai, India, and MIL becomes the importer of record in 
the U.S. See Mukand Verification Report at 32. MIL plays no further 
role with regard to sales between the unaffiliated U.S. customer and 
its customers once the subject merchandise is entered into the U.S. See 
Mukand Verification Report at page 32.
    During the POR, however, the U.S. customer rejected several 
shipments, in full or in part, made pursuant to several purchase 
orders, because the merchandise was shipped late and therefore did not 
meet the terms of sale. Until this rejection, these sales had occurred 
in the manner described above. Upon further discussion between MIL and 
the U.S. customer, MIL cancelled the sales in its books and issued 
credit notes for the amount of merchandise rejected. See Mukand 
Verification Reportat page 31. In addition, MIL and the U.S. customer 
reached an agreement with unique terms whereby the U.S. customer would 
hold the rejected subject merchandise at its U.S. warehouse at no 
expense to MIL until the U.S. customer needed to purchase the 
merchandise from MIL. See Mukand Verification Report at page 30. See 
also Mukand's October 21, 2002 supplemental response at annexure 1.
    In accordance with this agreement, MIL's U.S. customer purchased a 
certain portion from the subject merchandise stored at the U.S. 
customer's U.S. warehouse during the POR. See Mukand Verification 
Report at page 30. The purchase was made in accordance with the 
agreement between MIL and the U.S. customer. See Mukand Verification 
Report at page 30. In its original response, Mukand reported these 
sales as EP sales, however, the Department sought clarification of 
whether Mukand was claiming that these sales were either EP or CEP 
sales. In response to the Department's questioning, Mukand reclassified 
the subject merchandise involved in these sales as CEP sales. Mukand 
reclassified these sales as CEP sales, because the sale of the subject 
material was made after its importation to the United States.
    The Department has determined that Mukand's EP sales are properly 
reported sales, because those sales were made in accordance with the 
definition of an EP sale. In addition, the Department has determined 
that Mukand properly reported the reclassified EP sales as CEP sales, 
because those sales were made after the importation of the subject 
merchandise into the United States to the unaffiliated U.S. customer.
    Based on the evidence on the record, the Department has 
preliminarily determined that those sales classified by Mukand as CEP 
sales should also be treated as consignment sales (with MIL's U.S. 
customer as the consignment agent) given the unique terms and 
circumstances of these sales; in particular, the existence of 
``consignment stock.'' Due to the proprietary nature of the information 
on the record please see the Department's memorandum, Antidumping Duty 
Investigation of Stainless Steel Wire Rod from India: Consignment Sales 
Analysis Memorandumdated December 3, 2002 (``Mukand Consignment 
Memorandum''), for a detailed explanation of our decision.
    On December 5, 2002, the Department formally informed Mukand of its 
decision to treat the CEP sales as consignment sales and requested 
Mukand to respond to the Department's November 26, 2002 supplemental 
questionnaire. See Department's Letter of December 5, 2002. Mukand 
provided its response to the Department's supplemental questionnaire on 
December 13, 2002, but failed to provide the requested information 
concerning costs incurred by its unaffiliated U.S. customer related to 
the downstream consignment sales that are necessary to

[[Page 1045]]

calculate a margin. See Mukand supplemental response dated December 13, 
2002 at 1 and 2. Although Mukand provided some pricing information (a 
few invoices) on these consignment sales, it failed to provide the 
relevant expense information related to these invoices and it failed to 
provide the requested and required database the Department needs to 
calculate a margin. Nevertheless, the Department issued a second 
supplemental questionnaire on December 17, 2002, requesting the prices 
and expenses incurred by MIL's unaffiliated U.S. customers relating to 
these consignment sales. See Supplemental Questionnaire dated December 
17, 2002.
    The Department has preliminarily determined that the use of facts 
available, in accordance with section 776(a)(2) of the Act, is 
warranted for the prices and expenses incurred for the unreported 
consignment sales in the U.S. market. Consistent with section 
776(a)(2)(A) and (B) of the Act, Mukand withheld information that had 
been requested by the Department and failed to provide such information 
in a timely manner, justifying the use of facts otherwise available in 
reaching the applicable determination.
    In this case, Mukand failed to provide price and expense 
information for its consignment sales through MIL's unaffiliated U.S. 
customer (the consignment agent). By not providing the consignment 
sales information requested by the Department in a database format that 
provides specific prices and expenses of these consignment sales, 
Mukand has prevented the Department from calculating an accurate 
antidumping duty margin, inclusive of the consignment sales.
    Given that Mukand provided the Department with some pricing 
information, but not the requested expense information and the 
requested database, the Department finds it appropriate to apply facts 
available to those sales the Department has determined to be 
consignment sales. As facts available, the Department has used the 
weighted-average U.S. price and the weighted-average expenses submitted 
by Mukand in lieu of the prices and expenses of the consignment sales 
through MIL's unaffiliated U.S. customer. Nippon Steel Corp. v. United 
States, 2001 CIT 136, Slip-Op at 6 (Oct. 12, 2001); Notice of Final 
Determination of Sales at Less Than Fair Value: IQE Red Raspberries 
from Chile; 67 FR 35790 (May 21, 2002); Notice of Preliminary Results 
of Antidumping Duty Administrative Review: Stainless Steel Sheet and 
Strip in Coils from France; 67 FR 51210, (August 7, 2002). The 
Department has determined that the weighted-average of prices and 
expenses of all U.S. sales by MIL to its unaffiliated U.S. customer 
during the POR is proper because the Department only recently formally 
requested that Mukand provide its consignment sales information and 
Mukand provided some invoices. See Department's Letter of December 5, 
2002. Additionally, the Department recently issued a supplemental 
questionnaire on these consignment sales. See Supplemental 
Questionnaire dated December 17, 2002. Further, the Department finds 
that the weighted-average is proper because the consignment sales are 
reflective of a variety of prices, quantities, and expenses. See 
Analysis for Mukand Steel Limited for the Preliminary Results of the 
Administrative Review on Stainless Steel Wire Rod from India for the 
period December 1, 2000 through November 30, 2001, December 31, 2002 
(``Mukand Analysis Memorandum'').
    The Department calculated CEP, in accordance with section 772(b) of 
the Act, based on the packed CIF prices to the first unaffiliated 
customer in the United States. The Department made deductions for 
movement expenses in accordance with section 772(c)(2)(A) of the Act; 
these included, where appropriate, brokerage and handling, inland 
freight, international freight, U.S. customs duties, and marine 
insurance. In accordance with section 772(d)(1) of the Act, we deducted 
those selling expense associated with economic activities occurring in 
the United States, including direct selling expenses (bank charges and 
credit expenses) and indirect selling expenses.
    We recalculated Mukand's inventory carrying cost factor to the 
total cost of manufacturing rather than the variable cost of 
manufacturing as reported in the questionnaire response. Finally, we 
recalculated Mukand's calculation of credit insurance to account for a 
decimal error found in Mukand's reported credit insurance. See Mukand 
Verification Report and Mukand Analysis Memorandum.
    We deducted the profit allocated to expenses deducted under 
sections 772(d)(1) and (d)(2) in accordance with sections 772(d)(3) and 
772(f) of the Act. In accordance with section 772(f) of the Act, we 
computed profit based on total revenues realized on sales in both the 
U.S. and home markets, less all expenses associated with those sales. 
We then allocated profit to expenses incurred with respect to U.S. 
economic activity, based on the ratio of total U.S. expenses to total 
expenses for both the U.S. and home market.
    For purposes of this administrative review, Mukand classified the 
remainder of its sales as EP sales, stating that it sold subject 
merchandise directly to an unaffiliated importer in the United States 
during the POR. Therefore, the Department is using EP as defined in 
section 772(a) of the Act because the merchandise was first sold, prior 
to importation, by Mukand's affiliate MIL, which was based in London 
during the POR, to an unaffiliated purchaser in the United States. The 
Department based EP on packed prices to unaffiliated purchasers in the 
United States. The Department made deductions for inland freight, 
marine insurance, and brokerage and handling in accordance with section 
772(c) of the Act. Finally, the Department recalculated Mukand's 
calculation of credit insurance to account for a decimal error found in 
Mukand's reported credit insurance. See Mukand Verification Report and 
Mukand Analysis Memorandum.
    As explained in the ``Duty Drawback'' section below, the Department 
is not making any adjustments for duty drawback for EP or CEP sales.

The Viraj Group

    For purposes of this review, the Viraj Group has classified all of 
its sales as CEP sales. Based on the information on the record, we are 
using constructed export price as defined in section 772(b) of the Act.
    The Viraj Group has classified those sales made by VIL and VFL 
through Viraj USA Inc. (``Viraj USA''), an affiliated reseller that is 
100% owned by VFL, as CEP sales. VIL and VFL make the shipment from 
India on a Cost Insurance Freight (``CIF'') and Ex-Dock Duty Paid 
(``EDDP'') basis to Viraj USA. Viraj USA clears the goods through 
customs and oversees customer delivery. Then Viraj USA sells the goods 
to the unaffiliated U.S. customer who makes payment to Viraj USA.
    Based on the evidence on the record, the Department preliminarily 
determines that VIL's and VFL's U.S. sales through Viraj USA were made 
``in the United States'' within the meaning of secton 772(b) of the 
Act, and thus have been appropriately classified by the Viraj Group as 
CEP transactions.
    The Department calculated CEP, in accordance with section 772(b) of 
the Act, based on the packed CIF or EDDP prices to the first 
unaffiliated customer in the United States. The Department made 
deductions for movement expenses in accordance with section 
772(c)(2)(A) of the Act; these included, where appropriate, brokerage 
and handling, inland freight, international freight, U.S. customs 
duties, marine

[[Page 1046]]

insurance, customs clearance and delivery arrangements. In accordance 
with section 772(d)(1) of the Act, we deducted those selling expense 
associated with economic activities occurring in the United States, 
including direct selling expenses (bank charges and credit expenses) 
and indirect selling expenses. As explained in the ``Duty Drawback'' 
section below, we are not making any adjustment for duty drawback.
    We deducted the profit allocated to expenses deducted under 
sections 772(d)(1) and (d)(2) in accordance with sections 772(d)(3) and 
772(f) of the Act. In accordance with section 772(f) of the Act, we 
computed profit based on total revenues realized on sales in both the 
U.S. and home markets, less all expenses associated with those sales. 
We then allocated profit to expenses incurred with respect to U.S. 
economic activity, based on the ratio of total U.S. expenses to total 
expenses for both the U.S. and home market.

Duty Drawback

The Viraj Group

    In the previous administrative review, the Department denied the 
Viraj Group's request for an upward adjustment to the U.S. starting 
price based on duty drawback pursuant to section 772(c)(1)(B) of the 
Act. See Stainless Steel Wire Rod from India; Final Results of 
Antidumping Duty Administrative Review, 67 FR 37391 (May 29, 2002) 
(``Final Results''). The Department denied the duty drawback adjustment 
because the reported duty drawback was not directly linked to the 
amount of duty paid on imports used in the production of merchandise 
for export as required by the Department's two-part test, which states 
there must be: (1) a sufficient link between the import duty and the 
rebate, and (2) a sufficient amount of raw materials imported and used 
in the production of the final exported product. See Rajinder Pipes 
Ltd. v. U.S. (``Rajinder Pipes''), 70 F. Supp. 2d 1350, 1358. The Court 
of International Trade upheld the Department's decision to deny 
respondent an adjustment for duty drawback because there was not 
substantial evidence on the record to establish that part one of the 
Department's test had been met. See Viraj Group, Ltd. v. United States 
of America and Carpenter Technology, Corp., et al., Slip Op. 01-104 
(CIT August 15, 2001).
    Similarly, in the current review, the Department finds that the 
Viraj Group has not provided substantial evidence on the record to 
establish the necessary link between the import duty and the reported 
rebate for duty drawback. The Viraj Group has reported that it received 
duty drawback in the form of duty entitlement certificates which are 
issued by the Government of India to neutralize the incidence of basic 
custom duty on the import of raw materials used in the production of 
subject merchandise, but has failed to establish the necessary link 
between the import duty paid and the rebate given by the Government of 
India. As in the previous review, the Viraj Group was not able to 
demonstrate that the import duty paid and the duty drawback rebate were 
directly linked. Therefore, the Department is denying a duty drawback 
credit for the preliminary results of this review.

Mukand

    The Department also finds that Mukand has not provided substantial 
evidence on the record to establish the necessary link between the 
import duty and reported rebate for duty drawback. Mukand has reported 
that it received duty drawback in the form of duty entitlement 
certificates which are issued by the Government of India to neutralize 
the incidence of basic custom duty on the import of raw materials used 
in the production of subject merchandise, but has failed to establish 
the necessary link between the import duty paid and the rebate given by 
the Government of India. In this review, Mukand was not able to 
demonstrate that the import duty paid and the duty drawback rebate were 
directly linked. See Mukand Verification Report at page 21. Therefore, 
the Department is denying a duty drawback credit for the preliminary 
results of this review.

Normal Value

    After testing home market viability, we calculated NV as noted in 
the ``Price-to-CV Comparisons'' and ``Price-to-Price Comparisons'' 
sections of this notice.
1. Home Market Viability
    In accordance with section 773(a)(1)(C) of the Act, to determine 
whether there was a sufficient volume of sales in the home market to 
serve as a viable basis for calculating normal value (``NV'') (i.e., 
the aggregate volume of home market sales of the foreign like product 
is greater than or equal to five percent of the aggregate volume of 
U.S. sales), we compared Mukand and the Viraj Group's volume of home 
market sales of the foreign like product to the volume of each of their 
U.S. sales of subject merchandise. Pursuant to sections 773(a)(1)(B) 
and (C) of the Act, because both Mukand and the Viraj Group'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 sales in the home market provide a 
viable basis for calculating NV. We therefore based NV on home market 
sales to unaffiliated purchasers made in the usual commercial 
quantities and in the ordinary course of trade.
    For NV, we used the prices at which the foreign like product was 
first sold for consumption in India, in the usual commercial 
quantities, in the ordinary course of trade, and, to the extent 
possible, at the same level of trade (``LOT'') as the EP or CEP as 
appropriate. After testing home market viability and whether home 
market sales were at below-cost prices, we calculated NV as noted in 
the ``Price-to-Price Comparisons'' and ``Price-to-Constructed Value 
(``CV'') Price Comparisons'' sections of this notice.
    Additionally, the Viraj Group reported the home market sales of 
VAL. Since we have preliminarily determined to collapse the companies 
of the Viraj Group, we included the home market sales of VAL as the 
basis of NV.
2. Cost of Production Analysis

Mukand

    Based on the information contained in a timely filed cost 
allegation by the petitioners on April 25, 2002, the Department found 
reasonable grounds to believe or suspect that Mukand's sales of the 
foreign like product in their respective comparison market were made at 
prices below the cost of production, pursuant to section 773(b)(1) of 
the Act based on allegations made by petitioners in this case. See 
petitioners' Allegation of Sales Below Cost of April 25, 2002. As a 
result, the Department initiated a sales below-cost investigation. See 
Letter of Initiation of Sales Below Cost Investigation dated May 30, 
2002.

The Viraj Group

    Because the Department disregarded certain Viraj Group sales made 
in the home market at prices below the cost of producing the subject 
merchandise in the most recently completed segment of this proceeding 
and excluded such sales from normal value, the Department determined 
that there are reasonable grounds to believe or suspect that the Viraj 
Group made sales in the home market at prices below the cost of 
producing the merchandise in this review. See Final Results; and 
section 773(b)(2)(A)(ii) of the Act. As a result, the Department 
initiated a cost of production inquiry in this case on

[[Page 1047]]

January 29, 2002, to determine whether the Viraj Group made home market 
sales during the POR at prices below their respective COPs within the 
meaning of section 773(b) of the Act.
3. Calculation of COP
    In accordance with section 773(b)(3) of the Act, we calculated COP 
based on the sum of Mukand's and the Viraj Group's respective costs of 
materials and fabrication for the foreign like product, plus amounts 
for home market selling, general and administrative expenses 
(``SG&A''), including interest expenses, and packing costs. The 
Department relied on the COP data submitted by Mukand and the Viraj 
Group in their original and supplemental cost questionnaire responses.
    For the purpose of these preliminary results, we revised the COP 
information submitted by Mukand as follows: 1) we recalculated Mukand's 
interest expense ratio to adjust the amount of interest expenses 
attributed to construction in progress and to eliminate SG&A and 
interest from the denominator used to determine the interest expense 
factor; and 2) we recalculated Mukand's general and administrative 
expenses (``G&A'') to account for errors in the allocation of expenses 
between indirect selling expenses and G&A. See Mukand Analysis 
Memorandum.
    For the purpose of these preliminary results, we revised the COP 
information submitted by the Viraj Group as follows: 1) we adjusted the 
Viraj Group's financial expenses to include all of the interest 
expenses reported in the audited financial statements of all of the 
Viraj Group companies; 2) we recalculated the Viraj Group's reported 
G&A to include all depreciation reported on its financial statements; 
and 3) we re-valued the Viraj Group's direct materials for CV based on 
the COP of control numbers (``CONNUM'') with identical grades rather 
then use the transfer price from collapsed entities in the calculation 
of CV. See Analysis for the Preliminary Results of Review for Stainless 
Steel Wire Rod from India for 2000-2001: The Viraj Group, Limited,dated 
December 31, 2002 (``Viraj Analysis Memorandum'').
4. Test of Home Market Prices
    We compared the weighted-average COP for Mukand and the Viraj 
Group's home market sales of the foreign like product as required under 
section 773(b) of the Act, in order to determine whether these sales 
had been made at prices below the COP. In determining whether to 
disregard home market sales made at prices less than the COP, we 
examined whether such sales were made: (1) in substantial quantities 
within an extended period of time; and (2) at prices which permitted 
the recovery of all cost with all costs within a reasonable period of 
time, in accordance with sections 773(b)(1)(A) and (B) of the Act. We 
compared the COP to home market prices, less any applicable billing 
adjustments, movement charges, discounts, and indirect selling 
expenses.
5. Results of the COP Test
    Pursuant to section 773(b)(2)(C) of the Act, where less than 20 
percent of Mukand's or the Viraj Group's sales of a given product were, 
within an extended period of time, at prices less than the COP, we did 
not disregard any below-cost sales of that product because we 
determined that the below-cost sales were not made in ``substantial 
quantities.'' Where 20 percent or more of Mukand's or the Viraj Group's 
sales of a given product were at prices less than the COP, we 
determined such sales to have been made in ``substantial quantities'' 
within an extended period of time, in accordance with sections 
773(b)(2)(B) of the Act and 19 C.F.R. 351.406(b). In such cases, 
because we used POR average costs, we also determined that such sales 
were not made at prices which would permit recovery of all costs within 
a reasonable period of time, in accordance with section 773(b)(2)(D) of 
the Act. We compared the COP for subject merchandise to the reported 
home market prices less any applicable movement charges. Based on this 
test, we disregarded below-cost sales. Where all sales of a specific 
product were at prices below the cost of production, we disregarded all 
sales of that product.

Price-to-Price Comparisons

Mukand

    For those products comparisons for which there were sales at prices 
above the COP, we based NV on the home market prices to the home market 
customers. We made adjustments, where appropriate, for physical 
differences in the merchandise in accordance with section 
773(a)(6)(C)(ii) of the Act. Additionally, in accordance with section 
773(a)(6)(A) and (b), we deducted home market packing costs and added 
U.S. packing costs. In accordance with the Department's practice, where 
all contemporaneous matches to a U.S. sale observation resulted in 
difference-in-merchandise adjustments exceeding 20 percent of the cost 
of manufacturing (``COM'') of the U.S. product, we based NV on CV. We 
calculated NV based on prices to unaffiliated home market customers. We 
applied Mukand's inventory carrying cost factor to the total cost of 
manufacturing instead of the variable cost of manufacturing as reported 
by Mukand in its questionnaire response. Finally, we revised Mukand's 
calculation of credit insurance to account for a decimal error found in 
Mukand's reported credit insurance calculation at verification. See 
Mukand Verification Report at 2 and Mukand Analysis Memorandum.

The Viraj Group

    For those product comparisons for which there were sales at prices 
above the COP, we based NV on the home market prices to the home market 
customers. We made adjustments, where appropriate, for physical 
differences in the merchandise in accordance with section 
773(a)(6)(C)(ii) of the Act. Additionally, in accordance with section 
773(a)(6)(A) and (B), we deducted home market packing costs and added 
U.S. packing costs. In accordance with the Department's practice, where 
all contemporaneous matches to a U.S. sale observation resulted in 
differences-in-merchandise adjustments exceeding 20 percent of the cost 
of manufacturing (``COM'') of the U.S. product, we based NV on CV. We 
calculated NV based on prices to unaffiliated home market customers. We 
made circumstances of sale adjustments for credit expenses, as 
appropriate.

Price-to-CV Comparisons

    In accordance with section 773(a)(4) of the Act, we based NV on CV 
if we were unable to find a home market match of identical or similar 
merchandise. We calculated CV based on the sum of Mukand's and the 
Viraj Group's cost of materials, fabrication employed in producing the 
subject merchandise, and SG&A, including interest expenses and profit. 
We calculated the COPs included in the calculation of CV as noted above 
in the ``Calculation of COP'' section of this notice. In accordance 
with section 773(e)(2)(A) of the Act, we based SG&A expense 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 India. For selling 
expenses, we used the actual weighted-average home market direct and 
indirect selling expenses. For CV, we made the same adjustments 
described in the COP section above.

[[Page 1048]]

Level of Trade

    In accordance with section 773(a)(1)(B) of the 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. See 
also 19 C.F.R. 351.412. The NV LOT 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. See 19 C.F.R. 
351.412(2)(iii). For EP, the LOT is also the level of the starting-
price sale, which is usually from the exporter to the importer. See 19 
C.F.R. 351.412(2)(i). For CEP, it is the level of the constructed sale 
from the exporter to the affiliated importer. See 19 C.F.R. 
351.412(c)(ii).
    To determine the LOT of a sale, we examine stages in the marketing 
process and selling functions along the chain of distribution between 
the producer and the unaffiliated customer. Substantial differences in 
selling activities are a necessary, but not sufficient condition for 
determining that there is a difference in the stage of marketing. See 
19 C.F.R. 351.412(C)(2). 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 comparison-market sales at the LOT of 
the export transaction, we make a LOT adjustment under section 
773(a)(7)(A) of the 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 differences in the levels between NV and 
CEP sales affect price comparability, we adjust NV under section 
773(A)(7)(B) of the Act (the CEP offset provision). See Notice of Final 
Determination of Sales at Less Than Fair Value: Certain Carbon Steel 
Plate from South Africa, 62 FR 61731 (November 19, 1997).
    In implementing these principles in this review, we obtained 
information from Mukand and the Viraj Group about the marketing stages 
involved in their respective U.S. and home market sales, including a 
description of the selling activities performed by Mukand and the Viraj 
Group for each channel of distribution. In identifying levels of trade 
for CEP, we considered only the selling activities reflected in the 
price after the deduction of expenses and profit under section 772(d) 
of the Act. See Micron Technology, Inc. v. United States, 243 F.3d 
1301, 1314-1315 (Fed. Cir. 2001). Generally, if the reported levels of 
trade are the same in the home and U.S. markets, the functions and 
activities of the seller should be similar. Conversely, if a party 
reports levels of trade that are different categories of sales, the 
functions and activities should be dissimilar.
    In the present review, while Mukand requested an LOT adjustment, 
the Viraj Group did not. To determine whether an adjustment was 
necessary, in accordance with the principles discussed above, we 
examined information regarding the distribution systems in both the 
United States and home markets, including the selling functions, 
classes of customer, and selling expenses.

Mukand

    In the home market (``HM''), Mukand reported three levels of trade. 
See April 5, 2002 Questionnaire Response from Mukand, at 18. Mukand 
sold through four channels of distribution in the HM. The Department 
has preliminarily determined that in each of these four channels of 
distribution, only minor differences in selling functions existed. See 
Antidumping Duty Review of Stainless Steel Wire Rod from India: Level 
of Trade Analysis(``LOT Memo''). Because the Department has 
preliminarily determined that only minor differences exist between 
selling functions in each of the four HM channels of distribution, we 
preliminarily determine that there is one LOT in the HM. See LOT Memo.
    For the U.S. market, Mukand reported one level of trade. See April 
5, 2002 Questionnaire Response from Mukand at 50. For its U.S. sales, 
Mukand reported two channels of distribution: EP sales made to order to 
an unaffiliated customer before importation; and CEP sales sold on 
consignment by an unaffiliated customer after importation. For details 
of this situation, See Mukand Consignment Memorandum. For its EP sales, 
MIL sold directly to an unaffiliated U.S. customer, and for its CEP 
sales, MIL sold through a U.S. customer, after importation, which sold 
the merchandise, or a consignment basis, to other unaffiliated 
customers in the United States. See Mukand Consignment Memorandum. All 
of Mukand's U.S. sales were made by its wholly-owned subsidiary MIL, 
which was based in London during the POR. We examined the claimed 
selling functions performed by MIL for all U.S. sales and have 
determined that MIL provided the same level of services for both its EP 
and CEP sales to the United States. See LOT Memo.
    For EP sales in the U.S. market, Mukand provided the same level of 
services for both EP and NV sales with only minor differences. See LOT 
Memo. Based on our analysis of the selling functions performed for 
sales in the HM and EP sales in the U.S. market, we preliminarily 
determine that there is not a significant difference in the selling 
functions performed in the home market and U.S. market, and that these 
sales are made at the same LOT. See LOT Memo.
    In order to determine whether NV was established at a different LOT 
than CEP, we examined stages in the marketing process and selling 
functions along the LOT between Mukand and its home market customers. 
We compared the selling functions performed for home market sales with 
those performed with respect to the CEP transactions, after deductions 
for economic activities occurring in the United States, pursuant to 
section 772(d) of the Act, to determine if the home market level of 
trade constituted a different level of trade then the CEP level of 
trade. Mukand did not request a CEP offset. Nonetheless, in accordance 
with the principles discussed above, we examined information regarding 
the distribution systems in both the United States and the Indian 
markets, including the selling functions, classes of customer, and 
selling expenses to determine whether a CEP offset was necessary. In 
identifying levels of trade for CEP, we considered only the selling 
activities reflected in the price after the deduction of expenses and 
profit under section 772(d) of the Act. See LOT Memo. Based on our 
analysis of the channels of distribution and selling functions 
performed for sales in the home market and CEP sales in the U.S. 
market, we preliminarily find that there is no significant difference 
in the selling functions performed in the home market and the U.S. 
market for CEP sales. See LOT Memo. Thus, we find that Mukand's NV and 
CEP sales were made at the same LOT, and no LOT adjustment or CEP 
offset need be granted.

The Viraj Group

    In accordance with the principles discussed above, we examined 
information regarding the Viraj Group's distribution systems in both 
the United States and Indian markets, including selling functions, 
classes of customers, and selling expenses for the Viraj group.
    The Viraj Group claimed only one level of trade in the home market. 
See the Viraj Group's April 8, 2002 submission at B-6 and October 7, 
2002 submission at 1. Additionally, the Viraj Group reported that it 
sold through one channel of distribution in the home market: directly 
to unaffiliated customers (trading companies and end-users). See Viraj 
Group's April 8, 2002

[[Page 1049]]

submission at B-6. For sales in the home market, the Viraj Group 
reported that all of its sales are sold ex-works. See the Viraj Group's 
April 8, 2002 submission at B-4. The Viraj Group reported that it 
performs the following selling functions in the home market: price 
negotiations, order processing, and customer communication. See the 
Viraj Group's October 7, 2002 submission at 1. Because there is only 
one channel of distribution in the home market and identical selling 
functions are performed for all home market sales, we preliminarily 
determine that there is one LOT in the home market.
    The Viraj Group claimed one level of trade in the U.S. market. See 
the Viraj Group's April 8, 2002 submission at C-4. The Viraj Group 
reported that it sold through one channel of distribution in the U.S. 
market, directly from its mill to its U.S. affiliate (i.e., Viraj USA). 
Id. We determined the LOT of the Viraj Group's CEP sales based on the 
CEP starting price, and adjusted for selling expenses identified in 
section 772(d) of the Act. We found that the selling functions (i.e., 
price negotiations, order processing, and customer communication) the 
Viraj Group performs after the section 772(d) adjustments are the same 
for all of its U.S. sales. See The Viraj Group's February 26, 2002 
submission at A-10. Therefore, we preliminarily determine that the 
Viraj Group has one LOT in the U.S. market based on its selling 
functions to the United States.
    In order to determine whether NV was established at a different LOT 
than CEP sales, we examined stages in the marketing process and selling 
functions along the chains of distribution between (1) the Viraj Group 
and its home market customers and (2) the Viraj Group and its 
affiliated U.S. reseller, Viraj USA, after deductions for expenses and 
profits. Specifically, we compared the selling functions performed for 
home market sales with those performed with respect to the CEP 
transaction, after deductions for economic activities occurring in the 
United States, pursuant to section 772(d) of the Act, to determine if 
the home market level of trade constituted a different level of trade 
than the CEP level of trade. The Viraj Group did not request a CEP 
offset. Nonetheless, in accordance with the principles discussed above, 
we examined information regarding the distribution systems in both the 
United States and Indian markets, including the selling functions, 
classes of customer, and selling expenses to determine whether a CEP 
offset was necessary. For CEP sales, we found that the Viraj Group 
provided many of the same selling functions and expenses for its sale 
to its affiliated U.S. reseller Viraj USA as it provided for its home 
market sales, including price negotiation, order processing, and 
customer communication. Based on our analysis of the channels of 
distribution and selling functions performed for sales in the home 
market and CEP sales in the U.S. market, we preliminarily find that 
there is not a significant difference in the selling functions 
performed in the home market and the U.S. market for CEP sales. Thus, 
we find that the Viraj's NV and CEP sales were made at the some LOT, 
and no LOT adjustment or CEP offset need be granted.

Currency Conversion

    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, in accordance with section 773A(a) of the 
Act.

Preliminary Results of Review

    As a result of our review, we preliminarily determine that the 
following weighted-average dumping margin exists for Panchmahal, 
Mukand, and the Viraj Group for the period December 1, 2000 through 
November 30, 2001:

------------------------------------------------------------------------
                                                              Weighted-
               Producer/Manufacturer/Exporter                  Average
                                                                Margin
------------------------------------------------------------------------
The Viraj Group, Limited...................................        0.82%
Panchmahal.................................................       48.80%
Mukand, Limited............................................       32.87%
------------------------------------------------------------------------

    The Department will disclose calculations performed for these 
preliminary results within five days of the date of publication of this 
notice to the parties of this proceeding in accordance with 19 C.F.R. 
351.224(b). Any interested party may request a hearing within 30 days 
of publication of these preliminary results. See 19 C.F.R. 351.310(c). 
Any hearing, if requested, will be held 37 days after the date of 
publication, or the first working day thereafter. See 19 C.F.R. 
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. See19 C.F.R. 351.309(c)(ii). 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. See 19 C.F.R. 351.309(d). Further, we would 
appreciate it if parties submitting written comments also provide the 
Department with an additional copy of those comments on diskette. The 
Department will issue the final results of this administrative review, 
which will include the results of its analysis of issues raised in any 
such comments, within 120 days of publication of these preliminary 
results, pursuant to section 751(a)(3)(A) of the Act.

Assessment

    Upon issuance of the final results of this review, the Department 
shall determine, and the U.S. Customs Service shall assess, antidumping 
duties on all appropriate entries. Pursuant to 19 C.F.R. 251.212(b), 
the Department has calculated an assessment rate applicable to all 
appropriate entries. We calculated importer-specific duty assessment 
rates on the basis of the ratio of the total amount of antidumping 
duties calculated for the examined sales to the total entered value, or 
entered quantity, as appropriate, of the examined sales for that 
importer. Upon completion of this review, where the assessment rate is 
above de minimis, we will instruct the U.S. Customs Service to assess 
duties on all entries of subject merchandise by that importer.

Cash Deposit

    The following cash deposit requirements will be effective upon 
publication of the final results of this administrative review for all 
shipments of the subject merchandise 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 Act: (1) the cash deposit rate for each of the 
reviewed companies will be the rate listed in the final results of 
review (except that if the rate for a particular product is de minimis, 
i.e., less than 0.5 percent, no cash deposit will be required for that 
company); (2) for previously investigated companies not listed above, 
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 prior 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 or exporters will continue to be the ``all others'' rate 
of 48.80 percent, which is 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 review.

[[Page 1050]]

Notification to Interested Parties

    This notice also serves as a preliminary reminder to importers of 
their responsibility under 19 C.F.R. 351.402(f)(2) 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 the antidumping duties occurred and 
the subsequent assessment of double antidumping duties.
    This notice also serves as a reminder to parties subject to 
administrative protective orders (APOs) of their responsibility 
concerning the disposition of the proprietary information disclosed 
under APO in accordance with 19 C.F.R. 351.305, that continues to 
govern business proprietary information in this segment of the 
proceeding. Timely written notification of the return/destruction of 
APO materials or conversion to judicial protective order is hereby 
requested. Failure to comply with the regulations and the terms of an 
APO is a sanctionable violation.
    This determination is issued and published in accordance with 
sections 751(a)(1) and 777(I)(1) of the Act.

    Dated: December 31, 2002.
Susan Kuhbach,
Acting Assistant Secretary for Import Administration.
[FR Doc. 03-347 Filed 1-7-03; 8:45 am]
BILLING CODE 3510-DS-S