[Federal Register Volume 68, Number 45 (Friday, March 7, 2003)]
[Notices]
[Pages 11058-11065]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-5491]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-533-810]


Notice of Preliminary Results of Antidumping Duty Administrative 
Review: Stainless Steel Bar From India

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

ACTION: Notice of preliminary results.

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SUMMARY: In response to requests from interested parties, the 
Department of Commerce is conducting an administrative review of the 
antidumping duty order on stainless steel bar from India with respect 
to Isibars Limited; Mukand, Ltd.; Venus Wire Industries Limited; and 
the Viraj Group, Ltd. (Viraj Alloys, Ltd.; Viraj Forgings, Ltd.; and 
Viraj Impoexpo, Ltd.). This review covers sales of stainless steel bar 
to the United States during the period February 1, 2001, through 
January 31, 2002.
    We preliminarily find that, during the period of review, sales of 
stainless steel bar from India were made below normal value. If the 
preliminary results are adopted in the final results of this 
administrative review, we will instruct the Customs Service to assess 
antidumping duties on all appropriate entries. Interested parties are 
invited to comment on these preliminary results.

EFFECTIVE DATE: March 7, 2003.

FOR FURTHER INFORMATION CONTACT: Cole Kyle or Ryan Langan, Office 1, 
AD/CVD Enforcement, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW., Washington DC 20230; telephone (202) 482-1503 
or (202) 482-2613 respectively.

SUPPLEMENTARY INFORMATION:

Background

    On February 1, 2002, the Department published a notice in the 
Federal Register (67 FR 4945) of the opportunity for interested parties 
to request an administrative review of the antidumping duty order on 
stainless steel bar from India. In February 2001, the Department 
received timely requests for an administrative review from Carpenter 
Technology Corp., Crucible Specialty Metals Division of Crucible 
Materials Corp., Electralloy Corp., Slater Steels Corp., Empire 
Specialty Steel and the United Steelworkers of America (AFL-CIO/CLC) 
(collectively, ``petitioners'') and Viraj Group Ltd., an Indian 
producer of the subject merchandise. On March 11, 2002, the Department 
received a review request from Ferro Alloys Corp. Ltd. (``Facor''), an 
Indian exporter/producer of the subject merchandise. However, since 
Facor's review request was not timely filed in accordance with 19 CFR 
351.213(b)(2) (April 2001), we did not consider it when initiating this 
administrative review.
    In accordance with 19 CFR 351.221(b)(1), we published a notice of 
initiation of this antidumping duty administrative review on March 27, 
2002 (67 FR 14696) with respect to the following exporter/producers of 
the subject merchandise: Isibars Limited (``Isibars''); Mukand, Ltd. 
(``Mukand''); Venus Wire Industries Limited (``Venus''); and the Viraj 
Group, Ltd. (``Viraj''). The period of review (``POR'') is February 1, 
2001 through January 31, 2002.
    On March 27, 2002, the petitioners requested the Department to 
conduct verification in this review. On May 22,

[[Page 11059]]

2002, the Department issued antidumping duty questionnaires to Isibars, 
Venus, Viraj and Mukand. We received timely responses from Isibars, 
Venus and Viraj (collectively, ``respondents''). Mukand did not file a 
timely response to our questionnaire (see ``Facts Available'' section 
below for further details). We issued supplemental questionnaires to 
the respondents and received responses from September 2002 to February 
2003.
    On October 11, 2002, the petitioners submitted a timely allegation 
that Viraj made sales below the cost of production (``COP''). We found 
that the petitioners' allegation provided a reasonable basis to believe 
or suspect that sales in the home market by Viraj had been made at 
prices below the COP. On November 6, 2002, pursuant to section 773(b) 
of the Tariff Act of 1930, as amended effective January 1, 1995 (``the 
Act'') by the Uruguay Round Agreements Act (``URAA''), we initiated an 
investigation to determine whether Viraj made home market sales during 
the POR at prices below the COP, within the meaning of section 773(b) 
of the Act (see Memorandum from Team to Susan Kuhbach, Director, AD/CVD 
Enforcement Office 1, ``Allegation of Sales Below the Cost of 
Production for Viraj Impoexpo Ltd.,'' dated November 6, 2002). 
Accordingly, we notified Viraj that it must respond to Section D of the 
antidumping duty questionnaire.
    On October 16, 2002, the Department found that because several of 
the respondents in this proceeding had outstanding supplemental 
questionnaires and the Department required time to review and analyze 
the responses once they were received, it was not practicable to 
complete this review within the time allotted. Accordingly, we 
published an extension of time limit for the completion of the 
preliminary results of this review to no later than February 28, 2003, 
in accordance with section 751(a)(3)(A) of the Act and 19 CFR 
351.213(h)(2). See Stainless Steel Bar from India; Extension of Time 
Limit for the Preliminary Results of the Antidumping Duty 
Administrative Review, 67 FR 64870 (October 22, 2002).

Scope of the Order

    Imports covered by this review are shipments of stainless steel bar 
(``SSB''). SSB means articles of stainless steel in straight lengths 
that have been either hot-rolled, forged, turned, cold-drawn, cold-
rolled or otherwise cold-finished, or ground, having a uniform solid 
cross section along their whole length in the shape of circles, 
segments of circles, ovals, rectangles (including squares), triangles, 
hexagons, octagons, or other convex polygons. SSB includes cold-
finished SSBs that are turned or ground in straight lengths, whether 
produced from hot-rolled bar or from straightened and cut rod or wire, 
and reinforcing bars that have indentations, ribs, grooves, or other 
deformations produced during the rolling process.
    Except as specified above, the term does not include stainless 
steel semi-finished products, cut length flat-rolled products (i.e., 
cut length rolled products which if less than 4.75 mm in thickness have 
a width measuring at least 10 times the thickness, or if 4.75 mm or 
more in thickness having a width which exceeds 150 mm and measures at 
least twice the thickness), wire (i.e., cold-formed products in coils, 
of any uniform solid cross section along their whole length, which do 
not conform to the definition of flat-rolled products), and angles, 
shapes, and sections.
    The SSB subject to these reviews is currently classifiable under 
subheadings 7222.11.00.05, 7222.11.00.50, 7222.19.00.05, 7222.19.00.50, 
7222.20.00.05, 7222.20.00.45, 7222.20.00.75, and 7222.30.00.00 of the 
Harmonized Tariff Schedule of the United States (``HTSUS''). Although 
the HTSUS subheadings are provided for convenience and customs 
purposes, our written description of the scope of this review is 
dispositive.

Facts Otherwise Available

    Section 776(a)(2) of the Act provides that the Department shall 
apply ``facts otherwise available'' if, inter alia, a respondent (A) 
withholds information that has been requested; (B) fails to provide 
information within the deadlines established, or in the form or manner 
requested by the Department, subject to subsections (c)(1) and (e) of 
Section 782; (C) significantly impedes a proceeding; or (D) provides 
information that cannot be verified.
    Section 782(e) of the Act further provides that the Department 
shall not decline to consider information that is submitted by an 
interested party and that is necessary to the determination but does 
not meet all the applicable requirements established by the Department 
if (1) the information is submitted by the deadline established for its 
submission; (2) the information can be verified; (3) the information is 
not so incomplete that it cannot serve as a reliable basis for reaching 
the applicable determination; (4) the interested party has demonstrated 
that it acted to the best of its ability in providing the information 
and meeting the requirements established by the Department with respect 
to the information; and (5) the information can be used without undue 
difficulties.
    On May 22, 2002, the Department issued the antidumping duty 
questionnaire to Mukand. The first page of the questionnaire 
established a due date of June 28, 2002, for Mukand's response. In 
addition, the cover letter to the questionnaire instructed Mukand to 
formally request an extension of time in writing before the due date if 
it was unable to respond to the questionnaire within the specified time 
limit. On August 2, 2002, Mukand submitted a letter to the Department 
stating that it did not believe it was required to respond to the 
Department's questionnaire. Mukand's letter also stated that Mukand had 
made no shipments of the subject merchandise to the United States 
during the POR. However, the Department examined shipment data 
furnished by the Customs Service and found that there were U.S. 
shipments of subject merchandise from Mukand during the POR.
    Mukand's August 2, 2002 letter was the first and only communication 
the Department received from Mukand relating to this administrative 
review. Mukand did not request an extension of time to respond to the 
Department's questionnaires prior to the June 28, 2002 response 
deadline nor did Mukand, at any time, inform the Department that it was 
having difficulties submitting the requested information. (See section 
782(c) of the Act.) Lastly, Mukand's statement that it had no shipments 
of subject merchandise to the United States during the POR appears 
inconsistent with U.S. customs data; in addition, Mukand's letter was 
submitted well after the June 28, 2002 questionnaire response due date. 
Therefore, on August 21, 2002, the Department sent Mukand a letter 
explaining that its August 2, 2002 submission was being returned, that 
all other copies had been destroyed in accordance with 19 CFR 
351.302(d)(2), and that none of the information in the August 2, 2002 
submission would be considered in this administrative review (see 
Letter to Mukand Ltd., ``Administrative Review of Stainless Steel Bar 
from India,'' which is available in the Department's Central Records 
Unit, Room B-099).
    Because Mukand did not respond to the Department's antidumping duty 
questionnaire within the deadline for submission of such information, 
the use of facts otherwise available is appropriate and in accordance 
with section 776(a)(2)(B) of the Act. The Department applies adverse 
facts available ``to ensure that the party does not obtain a more 
favorable result by

[[Page 11060]]

failing to cooperate than if it had cooperated fully.'' Uruguay Round 
Agreements Act, Statement of Administrative Action, H.R. Doc No. 103-
316, vol. 1, at 870 (1994) (``SAA''). In determining the appropriate 
facts available to apply to Mukand, we preliminarily find that an 
adverse inference is warranted because Mukand failed to cooperate by 
not acting to the best of its ability to reply to a request for 
information from the Department under section 776(b) of the Act.
    As adverse facts available, we have assigned Mukand a margin of 
21.02 percent, the highest margin alleged in the petition, in 
accordance with section 776(b)(1). (This margin was also assigned to 
Mukand in the Notice of Final Determination of Sales at Less Than Fair 
Value: Stainless Steel Bar from India, 59 FR 66915 (December 28, 1994) 
(``LTFV Final'') as adverse facts available because it failed to 
respond to the Department's questionnaire.) Section 776(b) of the Act 
notes that an adverse facts available rate may include reliance on 
information derived from: (1) The petition; (2) a final determination 
in the investigation; (3) any previous review; or (4) any other 
information placed on the record. Thus, the statute does not limit the 
specific sources from which the Department may obtain information for 
use as facts available. The SAA recognizes the importance of facts 
available as an investigative tool in antidumping proceedings. The 
Department's potential use of facts available provides the only 
incentive to foreign exporters and producers to respond to the 
Department's questionnaires. See SAA at 868.
    Section 776(c) of the Act mandates that the Department, to the 
extent practicable, shall corroborate secondary information (such as 
petition data) using independent sources reasonably at its disposal. In 
accordance with the law, the Department, to the extent practicable, 
will examine the reliability and relevance of the information used.
    To corroborate the selected margin, we compared it to individual 
transaction margins for companies in this administrative review with 
weighted-average margins above de minimis. We found that the selected 
margin falls within the range of individual transaction margins and 
that there was a significant number of sales, made in the ordinary 
course of trade, in commercial quantities, with margins near or 
exceeding 21.02 percent. This evidence supports the reliability of this 
margin and an inference that the selected rate might reflect Mukand's 
actual dumping margin.
    With respect to the relevance aspect of corroboration, however, the 
Department will consider information reasonably at its disposal as to 
whether there are circumstances that would render a margin 
inappropriate. Where circumstances indicate that the selected margin is 
not appropriate as adverse facts available, the Department will 
disregard the margin and determine an appropriate margin (see, e.g., 
Fresh Cut Flowers from Mexico; Final Results of Antidumping Duty 
Administrative Review, 61 FR 6812, 6814 (Feb. 22, 1996) (where the 
Department disregarded the highest margin as adverse facts available 
because the margin was based on another company's uncharacteristic 
business expense resulting in an unusually high margin)). Therefore, we 
also examined whether any information on the record would discredit the 
selected rate as reasonable facts available for Mukand. No such 
information exists. In particular, there is no information, such as 
reliable evidence of Mukand's export prices, that might lead to a 
conclusion that a different rate would be more appropriate.
    Accordingly, we have assigned Mukand, in this administrative 
review, the rate of 21.02 percent as total adverse facts available. 
This is consistent with section 776(b) of the Act which states that 
adverse inferences may include reliance on information derived from the 
petition.
    Finally, we note that Mukand, Parek Bright Bars Pvt. Ltd. 
(``Parek'') and Shah Alloys, Ltd. (``Shah''), are currently subject to 
the 21.02 percent rate because they failed to respond to the 
Department's request for information in the LTFV Final or in prior 
administrative reviews. See LTFV Final, Stainless Steel Bar from India; 
Final Results of Antidumping Duty New Shipper Review, 65 FR 3662 
(January 24, 2000) and Stainless Steel Bar from India; Final Results of 
Antidumping Duty Review and New Shipper Review and Partial Rescission 
of Administrative Review, 65 FR 48965 (August 10, 2000).

Collapsing

Viraj

    In this administrative review, in past administrative reviews of 
stainless steel bar from India, and in other antidumping proceedings 
before the Department, the Viraj Group Ltd. has responded to the 
Department's questionnaires on behalf of the affiliated companies 
comprising the Viraj Group, Ltd. (i.e., VAL, VIL, and VFL). See 
Stainless Steel Bar from India; Final Results of Antidumping Duty 
Administrative Review, 67 FR 45956 (July 11, 2002) (``2001 AR Final''). 
See also Stainless Steel Wire Rod From India; Final Results of 
Antidumping Duty Administrative Review, 67 FR 37391 (May 29, 2002); 
Stainless Steel Wire Rod From India; Preliminary Results and Partial 
Rescission of Antidumping Duty Administrative Review, 68 FR 1040 
(January 8, 2003); and Certain Forged Stainless Steel Flanges From 
India; Preliminary Results and Partial Rescission of Antidumping Duty 
Administrative Review, 67 FR 10358 (March 7, 2002), affirmed in Certain 
Stainless Steel Flanges From India; Final Results of Antidumping Duty 
Administrative Review, 67 FR 62439 (October 7, 2002). In the 2001 AR 
Final, the Department collapsed VAL, VIL and VFL because the record 
evidence demonstrated that VAL and VIL were able to produce similar or 
identical merchandise (i.e., the merchandise under review) during the 
POR and could continue to do so, independently or under existing 
agreements, without substantial retooling of their production 
facilities. The Department also found that there was a significant 
potential for the manipulation of price and production among VAL, VIL 
and VFL. Because the record evidence in this review is consistent with 
the facts upon which the Department relied in past administrative 
reviews, we continue to find that VAL, VIL and VLF are affiliated and 
should be treated as one entity for the purposes of this administrative 
review (i.e., collapsed) pursuant to section 771(33) of the Act and 19 
CFR 351.401(f).

Isibars

    Isibars Limited responded to the Department's questionnaire in this 
administrative review on behalf of Isibars Limited and its affiliates, 
Zenstar Impex (``Zenstar'') and Isinox Steel, Ltd. (``Isinox'') 
(collectively, ``Isibars''). In the LTFV Final and in Stainless Steel 
Bar from India; Final Results of Antidumping Duty Administrative Review 
and New Shipper Review and Partial Rescission of Administrative Review, 
65 FR 48965 (August 10, 2000), the Department determined that Isibars 
Limited, Zenstar, and Isinox were affiliated, and should be collapsed 
and considered one entity pursuant to section 771(33) of the Act and 19 
CFR 351.401(f). Because Isibars and Zenstar share a common director and 
are dependent upon each other for procurement, production and sales 
purposes, we find that Isibars and Zenstar are affiliated persons in 
accordance with 771(33)(F) & (G) of the

[[Page 11061]]

Act. The record evidence in this administrative review demonstrates 
that Isibars and Isinox were able to produce similar or identical 
merchandise (i.e., the merchandise under review) during the POR and 
could continue to do so without substantial retooling of their 
production facilities. In addition, record indicates that there was a 
significant potential for the manipulation of price and production 
among Isibars, Isinox and Zenstar during the POR. Therefore, we find 
that Isibars, Isinox and Zenstar are affiliated and should be treated 
as one entity for the purposes of this administrative review (i.e., 
collapsed) pursuant to section 771(33) of the Act and 19 CFR 
351.401(f).

Fair Value Comparisons

    To determine whether sales of SSB from India to the United States 
were made at less than normal value, we compared export price (``EP'') 
or constructed export price (``CEP'') to the normal value (``NV''), as 
described in the ``Export Price and Constructed Export Price'' and 
``Normal Value'' sections of this notice. In accordance with 19 CFR 
351.414(c)(2), we compared individual EPs and CEPs to weighted-average 
NVs, which were calculated in accordance with section 777A(d)(2) of the 
Act.

Product Comparisons

    In accordance with section 771(16) of the Act, we considered all 
products produced and sold by the respondents in the home market during 
the POR that fit the description in the ``Scope of the Order'' section 
of this notice to be foreign like products for purposes of determining 
appropriate product comparisons to U.S. sales. We compared U.S. sales 
to sales of identical merchandise in the home market made in the 
ordinary course of trade, where possible. Where there were no sales of 
identical merchandise in the home market made in the ordinary course of 
trade to compare to U.S. sales, we compared U.S. sales to sales of the 
most similar foreign like product made in the ordinary course of trade. 
To determine the appropriate product comparisons, we considered the 
following physical characteristics of the products in order of 
importance: type, grade, remelting, type of final finishing operation, 
shape, and size.

Export Price and Constructed Export Price

    We calculated EP in accordance with Section 772(a) of the Act for 
those sales where the merchandise was sold to the first unaffiliated 
purchaser in the United States prior to importation by the exporter or 
producer outside the United States and the constructed export price 
methodology was not otherwise indicated. We based EP on packed ex-
factory, CIF, and delivered prices to unaffiliated purchasers in the 
United States. We identified the correct starting price by adjusting 
the reported gross unit price, where applicable, for interest revenue, 
taxes, and billing adjustments (see below). We made deductions from the 
starting price for movement expenses in accordance with section 
772(c)(2)(A) of the Act. These deductions included, where appropriate, 
domestic inland freight, brokerage and handling, international freight, 
marine insurance, U.S. customs duties, U.S. inland freight, and other 
U.S. transportation expenses.
    In accordance with Section 772(b) of the Act, we calculated CEP for 
those sales to the first unaffiliated purchaser that took place after 
importation into the United States. We based CEP on packed CIF and C&F 
duty-paid prices to unaffiliated purchasers in the United States. We 
identified the starting price and made deductions for movement 
expenses, including domestic inland freight, international freight, 
marine insurance, brokerage and handling, U.S. customs duties, and 
other transportation expenses, where appropriate, in accordance with 
section 772(c)(2)(A) of the Act. In accordance with section 772(d)(1) 
of the Act, we deducted those selling expenses associated with economic 
activities occurring in the United States, including direct and 
indirect selling expenses. Lastly, we made an adjustment for profit in 
accordance with section 772(d)(3) of the Act.
    To calculate the EP and CEP, we relied upon the data submitted by 
the respondents, except where noted below:

Isibars

    Isibars reported that it paid, upon shipment, excise taxes on 
subject merchandise exported to the United States. Isibars has not 
reported these taxes separately, as it claims they are subsequently 
rebated upon demonstration that the merchandise was exported. However, 
Isibars has failed to provide sufficient documentation showing that the 
tax was refunded upon export. Based on a review of Isibars, U.S. sales 
invoices provided in its October 28, 2002 submission, it appears that 
Isibars' reported gross unit prices include the excise tax. Therefore, 
pursuant to section 772(c)(2)(B), we used the tax rate reported by 
Isibars to calculate the transaction-specific tax and have deducted 
that amount from the starting price. See Memorandum to File ``Isibars 
Limited Preliminary Results Calculation Memorandum'' dated February 28, 
2003 (``Isibars Calculation Memorandum'').

Venus

    Venus reported discounts in its sales databases. However, the 
information on the record indicates that the discounts are actually 
billing adjustments (i.e., adjustments to price). Therefore, for the 
preliminary results, we have treated Venus' reported discounts as 
billing adjustments. See Memorandum to File ``Venus Wire Industries 
Limited Preliminary Results Calculation Memorandum'' dated February 28, 
2003 (``Venus Calculation Memorandum'').

Viraj

    For two sales, we revised Viraj's control numbers to reflect the 
reported model matching characteristics. See Memorandum to File ``Viraj 
Group, Ltd. Preliminary Results Calculation Memorandum'' dated February 
28, 2003 (``Viraj Calculation Memorandum'').

Duty Drawback

    Isibars, Venus and Viraj claimed a duty drawback adjustment based 
on their participation in the Indian government's Duty Entitlement 
Passbook Program. Such adjustments are permitted under section 
772(c)(1)(B) of the Act.
    The Department will grant a respondent's claim for a duty drawback 
adjustment where the respondent has demonstrated that there is (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 Pipe Ltd. v. U.S. 
(``Rajinder Pipes''), 70 F. Supp. 2d 1350, 1358 (Ct. Int'l Trade 1999). 
In Rajinder Pipes, the Court of International Trade upheld the 
Department's decision to deny a respondent's claim for duty drawback 
adjustments because there was not substantial evidence on the record to 
establish that part one of the Department's test had been met. See also 
Viraj Group, Ltd. v. United States of America and Carpenter Technology, 
Corp., et al., Slip Op. 01-104 (CIT August 15, 2001).
    In this administrative review, Isibars, Venus and Viraj have failed 
to demonstrate that there is a link between the import duty paid and 
the rebate received, and that imported raw materials are used in the 
production of the final exported product. Because they have failed to 
meet the Department's requirements, we are denying the respondents' 
requests for a duty

[[Page 11062]]

drawback adjustment. See, Isibars Calculation Memorandum, Viraj 
Calculation Memorandum, and Venus Calculation Memorandum for further 
details.

Normal Value

A. Home Market Viability

    In order to determine whether there is a sufficient volume of sales 
in the home market to serve as a viable basis for calculating NV (i.e., 
whether the aggregate volume of home market sales of the foreign like 
product is equal to or greater than five percent of the aggregate 
volume of U.S. sales), we compared each respondent's volume of home 
market sales of the foreign like product to the volume of U.S. sales of 
the subject merchandise, in accordance with 19 CFR 404(b)(2). Because 
each respondent's aggregate volume of home market sales of the foreign 
like product was greater than five percent of its aggregate volume of 
U.S. sales for the subject merchandise, we determined that the home 
market was viable.

B. Cost of Production

1. Calculation of COP
    In accordance with section 773(b)(3) of the Act, we calculated COP 
based on the sum of the cost of materials and fabrication for the 
foreign like product, plus amounts for general and administrative 
expenses (``G&A''), and interest expenses, and home market packing 
costs, where appropriate (see the ``Test of Comparison Market Sales 
Prices'' section below for treatment of home market selling expenses).
    For each respondent, we have implemented a change in practice 
regarding the treatment of foreign exchange gains and losses. The 
Department's previous practice was to have respondents identify the 
source of all foreign exchange gains and losses (e.g., debt, accounts 
receivable, accounts payable, cash deposits) at both a consolidated and 
unconsolidated corporate level. At the consolidated level, the current 
portion of foreign exchange gains and losses generated by debt or cash 
deposits was included in the interest expense rate computation. At the 
unconsolidated producer level, foreign exchange gains and losses on 
accounts payable were either included in the G&A rate computation, or 
under certain circumstances, in the cost of manufacturing. Gains and 
losses on accounts receivable at both the consolidated and 
unconsolidated producer levels were excluded from the COP and CV 
calculations.
    Instead of splitting apart the foreign exchange gains and losses as 
reported in an entity's financial statements, we will normally include 
in the interest expense computation all foreign exchange gains and 
losses. In doing so, we will no longer include a portion of foreign 
exchange gains and losses from two different financial statements 
(i.e., consolidated and unconsolidated producer). Instead, we will only 
include the foreign exchange gains and losses reported in the financial 
statement of the same entity used to compute each respondent's net 
interest expense rate. This approach recognizes that the key measure is 
not necessarily what generated the exchange gain or loss as opposed to 
how well the entity as a whole was able to manage its foreign currency 
exposure in any one currency. As such, for the preliminary results, we 
included all foreign exchange gains or losses in the interest expense 
rate computation. We note, however, that there may be unusual 
circumstances which may cause the Department to deviate from this 
general practice.
    We relied on the COP data submitted by the respondents, except 
where noted below:

Isibars

    Isibars claimed a startup adjustment for its new bar and rod mill.
    Section 773(f)(1)(C)(ii) of the Act authorizes adjustments for 
startup operations ``only where (I) a producer is using new production 
facilities or producing a new product that requires substantial 
additional investment, and (II) production levels are limited by 
technical factors associated with the initial phase of commercial 
production. For purposes of subclause (II), the initial phase of 
commercial production ends at the end of the startup period. In 
determining whether commercial production levels have been achieved, 
the administering authority shall consider factors unrelated to startup 
operations that might affect the volume of production processed, such 
as demand, seasonality, or business cycles.'' Moreover, the SAA at 836 
directs that attainment of peak production levels will not be the 
standard for identifying the end of the startup period because the 
startup period may end well before a company achieves optimum capacity 
utilization. In addition, the SAA notes that Commerce will not extend 
the startup period so as to cover improvements and cost reductions that 
may occur over the entire life cycle of the product. The SAA further 
instructs that a producer's projections of future volume or cost will 
be accorded little weight, as actual data regarding production are much 
more reliable than a producer's expectations. The SAA also notes that 
the burden is on the respondent to demonstrate its entitlement to a 
startup adjustment; specifically, the respondent must demonstrate that 
production levels were limited by technical factors associated with the 
initial phase of commercial production and not by factors unrelated to 
startup, such as marketing difficulties or chronic production problems.
    In this administrative review, Isibars stated that its new bar and 
rod mill started trial runs in June 1998. Isibars claims that it began 
initial commercial production on April 1, 2001, because it was required 
to do so by its lenders. Isibars notes that it complied with its 
lenders' requirement even though the plant had not been fully 
stabilized and it was not able to produce merchandise in commercially 
feasible quantities. Isibars submitted a startup adjustment based on 
the theoretical production capacity of the mill based on a 24-hour 
operation period. As noted above, the SAA directs that attainment of 
peak production levels will not be the standard for identifying the end 
of the startup period because the startup period may end well before a 
company achieves optimum capacity utilization. Based on the information 
submitted by Isibars, it appears that Isibars reached commercial levels 
of production prior to the start of the POR. For a more detailed 
discussion, see Memorandum from Nancy Decker through Michael Martin to 
Neal Halper, ``Isibars Cost of Production and Constructed Value 
Calculation Adjustments for the Preliminary Results'' memorandum dated 
February 28, 2003.
    In addition, we find that the problems reported by Isibars do not 
demonstrate that production levels were limited by technical factors 
associated with the initial phase of commercial production. Rather, we 
find that these problems primarily appear to be chronic production 
problems rather than technical factors associated with startup. For a 
more detailed discussion, see Memorandum from Nancy Decker through 
Michael Martin to Neal Halper, ``Isibars Cost of Production and 
Constructed Value Calculation Adjustments for the Preliminary Results' 
memorandum dated February 28, 2003. Because section 773(f)(1)(C)(ii) of 
the Act establishes that both prongs of the start-up test must be met 
before a startup adjustment is warranted, these findings demonstrate 
that Isibars has failed to meet the second prong of the test, which is 
sufficient to deny Isibars' claim for a startup adjustment.
    As discussed above, we adjusted Isibars'', Isinox's and Zenstar's 
interest expense, G&A expenses, and cost of

[[Page 11063]]

manufacturing (COM), where applicable, to account for our change in the 
treatment of foreign exchange gains and losses. We also revised 
Isibars' interest expense calculation methodology. We adjusted COM for 
Isibars to include certain lease and hire charges that were not 
included in reported costs. We adjusted G&A for Isinox to deduct 
certain selling expenses. We also adjusted COM for Zenstar to adjust 
for differences from the submitted reconciliation. As Isibars did not 
provide COP data for one product control number, we assigned that 
product control number the costs of a similar product. For a detailed 
discussion of the above-mentioned adjustments, see Memorandum from 
Nancy Decker through Michael Martin to Neal Halper, ``Isibars Cost of 
Production and Constructed Value Calculation Adjustments for the 
Preliminary Results' memorandum dated February 28, 2003.

Venus

    We made the following adjustments to Venus' reported costs: (1) We 
adjusted Venus' fixed overhead to account for the incorrect reporting 
period used for depreciation; (2) we adjusted direct material cost to 
eliminate the scrap realization amount because Venus could not explain 
the methodology behind the percentage used for the process loss 
calculation; (3) we adjusted Venus' interest expense ratio to include 
interest attributed to export invoices and our change in the treatment 
of foreign exchange gains and losses (as discussed above); (4) we 
adjusted G&A for Venus to include donations, prior year adjustments, 
and loss on sale of assets; and (5) we adjusted G&A for Venus to 
include all G&A costs after deduction of selling expenses. For a 
detailed discussion of the above-mentioned adjustments, see Memorandum 
from Margaret Pusey through Michael Martin to Neal Halper ``Venus Wire 
Industries Limited Cost of Production and Constructed Value Calculation 
Adjustments for the Preliminary Results' dated February 28, 2003.

Viraj

    We made the following adjustments to Viraj's reported costs: (1) 
VIL calculated its yield losses based on the quantity of scrap and 
wastage produced as a percentage of the quantity of bright bar output 
produced. We revised VIL's yield losses calculation to reflect the 
input quantity of raw material instead of the quantity of bright bar 
produced; (2) VAL excluded certain depreciation expense from the cost 
of sales (``COS'') which is used as denominator of the G&A expense rate 
calculation. We revised VAL's COS to include the depreciation expense. 
We then divided VAL's reported G&A expenses by the revised COS to 
calculate the revised G&A expense rate; (3) VIL excluded certain 
interest and bank charges from the reported financial expense rate 
calculation which it claims are reflective of the imputed finance 
charges used to adjust price. We revised VIL's financial expense to 
include the interest charges and bank charges. We then divided VIL's 
revised interest expense by the cost of sales to calculate the revised 
financial expense rate; (4) VAL calculated its financial expense rate 
to include all of the interest expenses and the COS of Viraj group 
companies. Because Viraj group companies do not prepare consolidated 
financial statements, we revised VAL's financial expense rate 
calculation to reflect only VAL's interest expense and the COS. In 
addition we revised VAL's interest expense to include waived interest 
expense. We then divided VIL's revised interest expense by the VAL's 
cost of sales to calculate the revised financial expense rate. For a 
detailed discussion of the above-mentioned adjustments, see Memorandum 
from Ji Young Oh through Michael Martin to Neal Halper, ``Cost of 
Production and Constructed Value Calculation Adjustments for the 
Preliminary Results' dated February 28, 2003. We also created temporary 
control numbers which include ranged sizes for cost matching purposes 
(see Viraj Calculation Memorandum).
1. Test of Home Market Prices
    On a product-specific basis, we compared the adjusted weighted-
average COP to the home market sales of the foreign like product during 
the POR, as required under section 773(b) of the Act, in order to 
determine whether sales had been made at prices below the COP. The 
prices were exclusive of any applicable movement charges, billing 
adjustments, commissions, discounts and indirect selling expenses. In 
determining whether to disregard home market sales made at prices below 
the COP, we examined, in accordance with sections 773(b)(1)(A) and (B) 
of the Act, whether such sales were made (1) within an extended period 
of time in substantial quantities and (2) at prices which did not 
permit the recovery of costs within a reasonable period of time.
2. Results of the COP Test
    Pursuant to section 773(b)(1) of the Act, where less than 20 
percent of a respondent's sales of a given product during the POR were 
at prices less than the COP, we do not disregard any below-cost sales 
of that product because we determine that in such instances the below-
cost sales were not made in ``substantial quantities.'' Where 20 
percent or more of a respondent's sales of a given product are at 
prices less than the COP, we disregard those sales of that product 
because we determine that in such instances the below-cost sales 
represent ``substantial quantities'' within an extended period of time 
in accordance with section 773(b)(1)(A) of the Act. In such cases, we 
also determine whether such sales were made at prices which would not 
permit recovery of all costs within a reasonable period of time, in 
accordance with section 773(b)(1)(B) of the Act.
    We found that, for each of the respondents, for certain specific 
products, more than 20 percent of the comparison market sales were at 
prices less than the COP and, thus, the below-cost sales were made 
within an extended period of time in substantial quantities. In 
addition, these sales were made at prices that did not provide for the 
recovery of costs within a reasonable period of time. We therefore 
excluded these sales and used the remaining sales, if any, as the basis 
for determining NV, in accordance with section 773(b)(1).
    For U.S. sales of subject merchandise for which there were no 
comparable home market sales in the ordinary course of trade (e.g., 
sales that passed the cost test), we compared those sales to 
constructed value (``CV''), in accordance with section 773(a)(4) of the 
Act.

C. Calculation of Constructed Value

    Section 773(a)(4) of the Act provides that where NV cannot be based 
on comparison-market sales, NV may be based on CV. Accordingly, when 
sales of comparison products could not be found, either because there 
were no sales of a comparable product or all sales of the comparable 
products failed the COP test, we based NV on CV.
    In accordance with section 773(e)(1) and (e)(2)(A) of the Act, we 
calculated CV based on the sum of the cost of materials and fabrication 
for the subject merchandise, plus amounts for selling expenses, G&A, 
including interest, profit and U.S. packing costs. We made the same 
adjustments to the CV costs as described in the ``Calculation of COP'' 
section of this notice. In accordance with section 773(e)(2)(A) of the 
Act, we based selling expenses, G&A and profit on the amounts incurred 
and realized by the respondent in connection with the production and 
sale of the foreign like

[[Page 11064]]

product in the ordinary course of trade for consumption in the foreign 
country.

D. Level of Trade

    Section 773(a)(1)(B)(i) of the Act states that, to the extent 
practicable, the Department will calculate NV based on sales at the 
same level of trade (``LOT'') as the EP or CEP. Sales are made at 
different LOTs if they are made at different marketing stages (or their 
equivalent). See 19 CFR 351.412(c)(2). Substantial differences in 
selling activities are a necessary, but not sufficient, condition for 
determining that there is a difference in the stages of marketing. Id.; 
see also Notice of Final Determination of Sales at Less Than Fair 
Value: Certain Cut-to-Length Carbon Steel Plate From South Africa, 62 
FR 61731, 61732 (November 19, 1997). In order to determine whether the 
comparison sales were at different stages in the marketing process than 
the U.S. sales, we reviewed the distribution system in each market 
(i.e., the ``chain of distribution''),\1\ including selling 
functions,\2\ class of customer (``customer category''), and the level 
of selling expenses for each type of sale.
---------------------------------------------------------------------------

    \1\ The marketing process in the United States and home market 
begins with the producer and extends to the sale to the final user 
or customer. The chain of distribution between the two may have many 
or few links, and the respondents' sales occur somewhere along this 
chain. In performing this evaluation, we considered each 
respondent's narrative response to properly determine where in the 
chain of distribution the sale occurs.
    \2\ Selling functions associated with a particular chain of 
distribution help us to evaluate the level(s) of trade in a 
particular market. For purposes of these preliminary results, we 
have organized the common selling functions into four major 
categories: sales process and marketing support, freight and 
delivery, inventory and warehousing, and quality assurance/warranty 
services.
---------------------------------------------------------------------------

    Pursuant to section 773(a)(1)(B)(i) of the Act, in identifying 
levels of trade for EP and comparison market sales, (i.e., NV based on 
either home market or third country prices \3\) we consider the 
starting prices before any adjustments. For CEP sales, we consider only 
the selling expenses 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).
    When the Department is unable to match U.S. sales to sales of the 
foreign like product in the comparison market at the same LOT as the EP 
or CEP, the Department may compare the U.S. sale to sales at a 
different LOT in the comparison market. In comparing EP or CEP sales at 
a different LOT in the comparison market, where available data make it 
practicable, we make a LOT adjustment under section 773(a)(7)(A) of the 
Act. Finally, for CEP sales only, if a NV LOT is more remote from the 
factory than the CEP LOT and we are unable to make a level of trade 
adjustment, the Department shall grant a CEP offset, as provided in 
section 773(a))(7)(B) of the Act. See Notice of Final Determination of 
Sales at Less Than Fair Value: Certain Cut-to-Length Carbon Steel Plate 
from South Africa, 62 FR 61731 (November 19, 1997).
    Viraj reported that it sells to manufacturers and trading companies 
in the home market, and to distributors in the United States. Viraj 
reported a single level of trade and a single channel of distribution 
in the home market and has not requested a LOT adjustment. We examined 
the information reported by Viraj and found that home market sales to 
both customer categories were identical with respect to sales process, 
freight services, warehouse/inventory maintenance, advertising 
activities, technical service, and warranty service. Accordingly, we 
preliminarily find that Viraj had only one level of trade for its home 
market sales.
    For CEP sales, Viraj reported the same single level of trade and 
channel of distribution reported for home market sales. The CEP selling 
activities differ from the home market selling activities only with 
respect to freight and delivery. Therefore, we find that the CEP level 
of trade is similar to the home market LOT and a level-of-trade 
adjustment is not necessary. See section 773(a)(7)(A) of the Act.
    Isibars reported that it sells to end-users and trading companies 
in the home market, and to distributors in the United States. Venus 
reported that it sells to trading companies and end-users in the home 
market, and to distributors and end-users in the United States. Isibars 
and Venus reported the same level of trade and the same channel of 
distribution for sales in the United States and the home market, and 
neither company has requested a LOT adjustment.
    We examined the information reported by Isibars and Venus, and 
found that home market sales to both customer categories were identical 
with respect to sales process, freight services, warehouse/inventory 
maintenance, advertising activities, technical service, and warranty 
service. Accordingly, we preliminarily find that each company had only 
one level of trade for its home market sales. Isibars' and Venus' EP 
selling activities differ from the home market selling activities only 
with respect to freight and delivery. Therefore, we find that the EP 
level of trade is similar to the home market LOT and a level-of-trade 
adjustment is not necessary. See section 773(a)(7)(A) of the Act.

E. Calculation of Normal Value Based on Home Market Prices

    We calculated NV based on ex-factory or delivered prices to 
unaffiliated customers in the home market. We identified the starting 
price and made adjustments for billing adjustments, where appropriate 
(see below). We also made deductions for early payment discounts. In 
accordance with section 773(a)(6)(B)(ii) of the Act, we made deductions 
for inland freight. In addition, we made adjustments under section 
773(a)(6)(C)(iii) of the Act and 19 CFR 351.410 for differences in 
circumstances of sale for imputed credit expenses and commissions, 
where appropriate. We also made adjustments, where appropriate, in 
accordance with 19 CFR 351.410(e), for indirect selling expenses 
incurred in the home market or United States where commissions were 
granted on sales in one market but not in the other (the commission 
offset).
    Furthermore, we made adjustments for differences in costs 
attributable to differences in the physical characteristics of the 
merchandise in accordance with section 773(a)(6)(C)(ii) of the Act and 
19 CFR 351.411. We also deducted home market packing costs and added 
U.S. packing costs in accordance with section 773(a)(6)(A) and (B) of 
the Act.
    To calculate NV, we relied upon the data submitted by the 
respondents. However, for Isibars, we adjusted the quantities reported 
for several sales to account for returned merchandise (see Isibars 
Calculation Memorandum). For Venus, we used the date of the preliminary 
results as the payment date in the credit calculation for those sales 
for which payment dates were not reported. Venus also reported 
discounts in its sales databases. However, the information on the 
record indicates that the discounts are actually billing adjustments 
(i.e., adjustments to price). Therefore, for the preliminary results, 
we have treated Venus' reported discounts as billing adjustments. See, 
Venus Calculation Memorandum for further details.

F. Calculation of Normal Value Based on Constructed Value

    For price-to-CV comparisons, we made adjustments to CV in 
accordance with section 773(a)(8) of the Act. We made adjustments to CV 
for differences in circumstances of sale in accordance with section 
773(a)(6)(C)(iii) of the Act and 19 CFR 351.410. In addition, we added 
U.S. packing costs.

[[Page 11065]]

Currency Conversion

    We made currency conversions into U.S. dollars in accordance with 
section 773A(a) of the Act based on the exchange rates in effect on the 
dates of the U.S. sales as reported by the Federal Reserve Bank.

Preliminary Results of Review

    We preliminarily find the following weighted-average dumping 
margins:

----------------------------------------------------------------------------------------------------------------
                 Exporter/manufacturer                             Weighted-average margin percentage
----------------------------------------------------------------------------------------------------------------
Isibars Limited.......................................                                                     11.26
Mukand, Ltd...........................................                                                     21.02
Venus Wire Industries Limited.........................                                          0.0 (de minimis)
Viraj Group, Ltd......................................                                         0.04 (de minimis)
----------------------------------------------------------------------------------------------------------------

Assessment Rates

    Pursuant to 19 CFR 351.212(b), the Department calculates an 
assessment rate for each importer of the subject merchandise for each 
respondent. Upon issuance of the final results of this administrative 
review, if any importer-specific assessment rates calculated in the 
final results are above de minimis (i.e., at or above 0.5 percent), the 
Department will issue appraisement instructions directly to the Customs 
Service to assess antidumping duties on appropriate entries. To 
determine whether the duty assessment rates covering the period were de 
minimis, in accordance with the requirement set forth in 19 CFR 
351.106(c)(2), for each respondent we calculate importer (or customer)-
specific ad valorem rates by aggregating the dumping margins calculated 
for all U.S. sales to that importer (or customer) and dividing this 
amount by the total value of the sales to that importer (or customer). 
Where an importer (or customer)-specific ad valorem rate is greater 
than de minimis, we calculate a per unit assessment rate by aggregating 
the dumping margins calculated for all U.S. sales to that importer (or 
customer) and dividing this amount by the total quantity sold to that 
importer (or customer). We have calculated a per unit assessment rate 
for CEP sales because we did not have reliable entered values to 
calculate an assessment rate. See, Viraj Calculation Memorandum for 
further details.
    All other entries of the subject merchandise during the POR will be 
liquidated at the antidumping duty rate in place at the time of entry.
    The Department will issue appropriate assessment instructions 
directly to the Customs Service within 15 days of publication of the 
final results of this review.

Cash Deposit Rates

    The following deposit requirements will be effective upon 
publication of the final results of this administrative review for all 
shipments of SSB from India entered, or withdrawn from warehouse, for 
consumption on or after the publication date, as provided for by 
section 751(a)(1) of the Act: (1) The cash deposit rates for the 
reviewed companies will be the rate established in the final results of 
this review, except if the rate is less than 0.50 percent, and 
therefore, de minimis within the meaning of 19 CFR 351.106(c)(1), in 
which case the cash deposit rate will be zero; (2) if the exporter is 
not a firm covered in this review, but was covered in a previous review 
or the original LTFV investigation, the cash deposit rate will continue 
to be the company-specific rate published for the most recent period; 
and (3) the cash deposit rate for all other manufacturers and/or 
exporters of this merchandise, shall be 12.45 percent, the ``all 
others'' rate established in the LTFV investigation (see 59 FR 66915, 
December 28, 1994).
    These requirements, when imposed, shall remain in effect until 
publication of the final results of the next administrative review.

Public Comment

    Any interested party may request a hearing within 30 days of 
publication of this notice. A hearing, if requested, will be held 37 
days after the publication of this notice, or the first business day 
thereafter. Interested parties may submit case briefs within 30 days of 
the date of publication of this notice. Rebuttal briefs, which must be 
limited to issues raised in the case briefs, may be filed not later 
than 35 days after the date of publication of this notice. 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 the preliminary 
results.

Notification to Importers

    This notice also serves as a preliminary reminder to importers of 
their responsibility under 19 CFR 351.402(f) to file a certificate 
regarding the reimbursement of antidumping duties prior to liquidation 
of the relevant entries during this review period. Failure to comply 
with this requirement could result in the Secretary's presumption that 
reimbursement of antidumping duties occurred and the subsequent 
assessment of double antidumping duties.

Notification Regarding APOs

    This notice also serves as a reminder to parties subject to 
administrative protective orders (``APO'') of their responsibility 
concerning the disposition of proprietary information disclosed under 
APO in accordance with 19 CFR 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 administrative review and notice are in accordance with 
sections 751(a)(1) and 777(i)(1) of the Act.

    Dated: February 28, 2003.
Faryar Shirzad,
Assistant Secretary for Import Administration.
[FR Doc. 03-5491 Filed 3-6-03; 8:45 am]
BILLING CODE 3510-DS-P