[Federal Register Volume 68, Number 217 (Monday, November 10, 2003)]
[Notices]
[Pages 63758-63761]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-28225]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-533-809]


Certain Forged Stainless Steel Flanges 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 certain forged 
stainless steel flanges (stainless steel flanges) from India (A-533-
809) manufactured by Chandan Steel Ltd. (Chandan), Isibars Ltd. 
(Isibars), and Viraj Forgings Ltd. (Viraj). The period of review (POR) 
is February 1, 2002, through January 31, 2003. We preliminary determine 
that these respondents did not make sales of stainless steel flanges 
below the normal value (NV). In addition, we have determined to rescind 
the review with respect to Shree Ganesh Forgings Ltd. (Shree Ganesh). 
If these preliminary results are adopted in our final results of 
administrative review, we will instruct the U.S. Customs and Border 
Protection (CBP) to assess antidumping duties based on the difference 
between United States price and the NV. Interested parties are invited 
to comment on these preliminary results. Parties who submit argument in 
these proceedings are requested to submit with the argument (1) a 
statement of the issues and (2) a brief summary of the argument.

EFFECTIVE DATE: November 10, 2003.

FOR FURTHER INFORMATION CONTACT: Thomas Killiam or Mike Heaney, AD/CVD 
Enforcement, Group III, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW., Washington, DC 20230, telephone: (202) 482-
5222 or (202) 482-4475, respectively.

SUPPLEMENTARY INFORMATION:

Background

    On February 9, 1994, the Department published the antidumping duty 
order on stainless steel flanges from India (59 FR 5994). On February 
3, 2003, the Department published the notice of ``Opportunity to 
Request Administrative Review'' for this order covering the period 
February 1, 2002 through January 31, 2003 (68 FR 5272). In accordance 
with 19 CFR 351.213(b)(2), on February 28, 2003, Chandan, Isibars, 
Shree Ganesh, and Viraj requested a review. On March 18, 2003, we 
initiated this antidumping duty administrative review, and on March 25, 
2003, we published in the Federal Register a notice of initiation (68 
FR 14394).

Partial Rescission

    Pursuant to 19 CFR 351.213(d), the Department will rescind an 
administrative review if a party withdraws its request for review 
within 90 days of the publication of our Notice of Initiation. On April 
23, 2003, Shree Ganesh withdrew its request for review.

[[Page 63759]]

As Shree Ganesh withdrew its request for review within 90 days of our 
Notice of Initiation, and as no other party requested a review of Shree 
Ganesh, we hereby rescind the review with respect to Shree Ganesh.

Scope of the Review

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

Period of Review (POR)

    The POR is February 1, 2002, through January 31, 2003.

Fair Value Comparisons

    To determine whether sales of flanges from India were made in the 
United States at less than fair value, we compared the 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 section 
777A(d)(1)(A)(I) of the Tariff Act, we calculated EPs and CEPs and 
compared these prices to weighted-average normal values or CVs, as 
appropriate.

Export Price and Constructed Export Price

    In accordance with section 772 of the Tariff Act, we calculated 
either an EP or a CEP, depending on the nature of each sale. Section 
772(a) of the Tariff Act defines EP as the price at which the subject 
merchandise is first sold before the date of importation by the 
exporter or producer outside the United States to an unaffiliated 
purchaser in the United States, or to an unaffiliated purchaser for 
exportation to the United States. Section 772(b) of the Tariff Act 
defines CEP as the price at which the subject merchandise is first sold 
in the United States before or after the date of importation, by or for 
the account of the producer or exporter of the merchandise, or by a 
seller affiliated with the producer or exporter, to an unaffiliated 
purchaser, as adjusted under sections 772(c) and (d) of the Tariff Act.
    We calculated EP and CEP, as appropriate, based on prices charged 
to the first unaffiliated customer in the United States. We used the 
date of invoice as the date of sale. We based EP on the packed C&F, CIF 
duty paid, FOB, or ex-dock duty paid prices to the first unaffiliated 
purchasers in the United States. We added to U.S. price amounts for 
duty drawback, when reported, pursuant to section 772(c)(1)(B) of the 
Tariff Act. We also made deductions for movement expenses in accordance 
with section 772(c)(2)(A) of the Tariff Act, including: foreign inland 
freight, foreign brokerage and handling, bank export document handling 
charges, ocean freight, and marine insurance.
    In addition, for Viraj's CEP sales, in accordance with section 
772(d)(1) of the Tariff Act, we deducted from the starting price those 
selling expenses that were incurred in selling the subject merchandise 
in the United States, including direct selling expenses (i.e., credit), 
and imputed inventory carrying costs. In accordance with section 
772(d)(3) of the Tariff Act, we deducted an amount for profit allocated 
to the expenses deducted under sections 772(d)(1) and (2) of the Tariff 
Act.

Normal Value

A. Viability

    In order to determine whether there is sufficient volume of sales 
in the home market to serve as a viable basis for calculating NV (i.e., 
the aggregate volume of home market sales of the foreign like product 
during the POR is equal to or greater than five percent of the 
aggregate volume of U.S. sales of subject merchandise during the POR), 
for each respondent we compared the volume of home market sales of the 
foreign like product to the volume of U.S. sales of the subject 
merchandise. Since we found no reason to determine that quantity was 
not the appropriate basis for these comparisons, we did not use value 
as the measure. See 19 CFR 351.404(b)(2).
    As in prior reviews, we based our comparisons of the volume of U.S. 
sales to the volume of home market sales on reported stainless steel 
flange weight, rather than on number of pieces; since flange sizes, 
prices and costs vary greatly across models, comparisons of aggregate 
data based on the number of pieces could be misleading.
    We determined that for Viraj, the home market was viable because 
Viraj's home market sales were greater than 5 percent of its U.S. sales 
based on aggregate volume by weight. Because Isibars reported no home 
market or third country sales, we based NV on CV, pursuant to section 
351.404(a) of the Department's regulations. For Chandan, pursuant to 
section 351.404(e), we used the United Kingdom as the comparison 
market, because it was Chandan's largest export market, Chandan's 
volume there exceeded five percent of its U.S. volume of subject 
merchandise in the POR, and there is no evidence on the record 
indicating the United Kingdom would be inappropriate to serve as the 
basis for NV.

B. Arm's Length Sales

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

C. Cost of Production Analysis

    In the most recently completed review, Viraj made sales which 
failed the cost test. Therefore, pursuant to section 773(b)(2)(A)(ii) 
of the Tariff Act, in this review we had a reasonable basis to believe 
or suspect that Viraj made sales in the home market below the cost of 
production (COP). See Certain Forged Stainless Steel Flanges From 
India: Final Results and Partial Rescission of Antidumping Duty 
Administrative Review 68 FR 42005 (July 16, 2003); for the cost test 
results in particular, which were unchanged in the final results, see 
Certain Forged Stainless Steel Flanges from India, Preliminary Results 
of Antidumping Duty Administrative Review, 68 FR 11361 (March 10, 
2003). Therefore, pursuant to section 773(b)(1) of the Tariff Act, in 
this review we initiated an investigation to determine whether Viraj's 
sales of flanges were made at prices below COP during the POR.
    We based product definitions for both model-matching and costs on 
grade, flange type, size, pressure rating, and finish. Where necessary, 
we converted costs from a per-piece basis to a per-kilogram basis. See 
the company-specific analysis memoranda, dated October 31, 2003 and 
available in the Central Records Unit.

[[Page 63760]]

    In accordance with section 773(b)(3) of the Tariff Act, we 
calculated COP for Viraj based on the sum of the costs of materials and 
fabrication employed in producing the foreign like product, plus 
selling, general, and administrative expenses (SG&A) and packing. We 
relied on the home market sales and COP information provided by Viraj. 
After calculating COP, we tested whether home market sales of stainless 
steel flanges were made at prices below COP within an extended period 
of time in substantial quantities and whether such prices permitted the 
recovery of all costs within a reasonable period of time. We compared 
model-specific COPs to the reported home market prices less movement 
charges, discounts, and rebates.
    Pursuant to section 773(b)(2)(C) of the Tariff Act, where less than 
20 percent of a respondent's home market sales for a model are at 
prices less than the COP, we do not disregard any below-cost sales of 
that model because we determine that the below-cost sales were not made 
within an extended period of time in ``substantial quantities.'' Where 
20 percent or more of a respondent's home market sales of a given model 
are at prices less than COP, we disregard the below-cost sales because 
they are (1) made within an extended period of time in substantial 
quantities in accordance with sections 773(b)(2)(B) and (C) of the 
Tariff Act, and (2) based on comparisons of prices to weighted-average 
COPs for the POR, were at prices which would not permit the recovery of 
all costs within a reasonable period of time in accordance with section 
773(b)(2)(D) of the Tariff Act.
    The results of our cost test for Viraj indicated that for certain 
comparison market models, less than 20 percent of the sales of the 
model were at prices below COP. We therefore retained all sales of 
these comparison market models in our analysis and used them as the 
basis for determining NV. Our cost test also indicated that within an 
extended period of time (one year, in accordance with section 
773(b)(2)(B) of the Tariff Act), for certain comparison market models, 
more than 20 percent of the comparison market sales were sold at prices 
below COP. In accordance with section 773(b)(1) of the Tariff Act, we 
therefore excluded these below-cost sales from our analysis and used 
the remaining above-cost sales as the basis for determining NV.

D. Product Comparisons

    We compared Viraj's U.S. sales with contemporaneous sales of the 
foreign like product in the home market, and Chandan's U.S. sales to 
its contemporaneous sales of the foreign like product in the United 
Kingdom. We considered stainless steel flanges identical based on 
matching grade, type, size, pressure rating and finish. We used a 20 
percent difference-in-merchandise (DIFMER) cost deviation limit as the 
maximum difference in cost allowable for similar merchandise, the 
DIFMER being defined as the absolute value of the difference between 
the U.S. and comparison market variable costs of manufacturing, divided 
by the total cost of manufacturing of the U.S. product.

E. Level of Trade

    In accordance with section 773(a)(1)(B) of the Tariff Act, to the 
extent practicable, we determine NV based on sales in the comparison 
market at the same level of trade (LOT) as the EP or CEP transaction. 
To determine whether comparison market sales are at a different level 
of trade than U.S. sales, we examined stages in the marketing process 
and selling functions along the chain of distribution between the 
producer and the unaffiliated customer. Chandan reported no difference 
in selling activities in the U.S. and comparison market, and made no 
claim for an LOT adjustment. We noted no significant differences in 
functions provided in either of Chandan's markets. Based upon the 
record evidence, we have determined that there is no difference in LOT 
between Chandan's U.S. market and third market sales, and therefore we 
made no LOT adjustment, per 19 CFR 351.412(c)(2).
    Viraj also claimed no LOT adjustment, and we noted no differences 
in selling services provided, in either its EP or CEP sales, between 
the U.S. and home markets. Therefore, based upon the record evidence, 
we have determined that there is no difference in level of trade 
between Viraj's U.S. market and home market sales, and no LOT 
adjustment is appropriate, per 19 CFR 351.412(c)(2).

F. Comparison Market Price

    For Chandan and Viraj, in the United Kingdom and India markets, 
respectively, we based comparison market prices on the packed, ex-
factory or delivered prices to the unaffiliated purchasers. We made 
adjustments for differences in packing and for movement expenses in 
accordance with sections 773(a)(6)(A) and (B) of the Tariff Act. In 
addition, we made adjustments for differences in cost attributable to 
differences in physical characteristics of the merchandise pursuant to 
section 773(a)(6)(C)(ii) of the Tariff Act, and for differences in 
circumstances of sale (COS) in accordance with section 
773(a)(6)(C)(iii) of the Tariff Act and 19 CFR 351.410. For comparison 
to EP we made COS adjustments by deducting comparison market direct 
selling expenses and adding U.S. direct selling expenses.
    In accordance with section 773(a)(4) of the Tariff Act, we based NV 
on CV if we were unable to find a contemporaneous comparison market 
match for the U.S. sale. We calculated CV based on the cost of 
materials and fabrication employed in producing the subject 
merchandise, SG&A, and profit. In accordance with 773(e)(2)(A) of the 
Tariff Act, we based SG&A expenses and profit on the amounts incurred 
and realized by the respondent in connection with the production and 
sale of the foreign like product in the ordinary course of trade for 
consumption in the foreign country. For selling expenses, we used the 
weighted-average comparison market selling expenses. Where appropriate, 
we made COS adjustments to CV in accordance with section 773(a)(8) of 
the Tariff Act and 19 CFR 351.410. We also made adjustments, where 
applicable, for comparison market indirect selling expenses to offset 
commissions in EP comparisons.

Preliminary Results of Review

    As a result of our review, we preliminarily determine the weighted-
average dumping margins for the period February 1, 2002, through 
January 31, 2003, to be as follows:

------------------------------------------------------------------------
        Manufacturer/exporter                  Margin (percent)
------------------------------------------------------------------------
Chandan.............................  0
Isibars.............................  0
Viraj...............................  0.04 (de minimis)
------------------------------------------------------------------------

    The Department will disclose calculations performed in connection 
with these preliminary results of review within five days of the date 
of publication of this notice in accordance with 19 CFR 351.224(b). An 
interested party may request a hearing within 30 days of publication. 
See CFR 351.310(c). Any hearing, if requested, will be held 37 days 
after the date of publication, or the first business day thereafter, 
unless the Department alters the date per 19 CFR 351.310(d). Interested 
parties may submit case briefs no later than 30 days after the date of 
publication of these preliminary results of review. Rebuttal briefs, 
limited to issues raised in the case briefs, may be filed no later than 
35 days after the date of publication of this notice. Parties who 
submit argument in these proceedings are requested to submit with the 
argument (1) a statement of the issue, (2) a brief

[[Page 63761]]

summary of the argument and (3) a table of authorities. The Department 
will issue the final results of this administrative review, including 
the results of our analysis of the issues raised in any such written 
comments or at a hearing, within 120 days of publication of these 
preliminary results.

Duty Assessment and Cash Deposit Requirements

    The Department shall determine, and CBP shall assess, antidumping 
duties on all appropriate entries. In accordance with 19 CFR 
351.212(b)(1), we will calculate assessment rates for the merchandise 
based on the ratio of the total amount of antidumping duties calculated 
for the examined sales made during the POR to the total quantity (in 
kilograms) of the sales used to calculate those duties. This rate will 
be assessed uniformly on all entries of merchandise of that 
manufacturer/exporter made during the POR. The Department will issue 
appropriate appraisement instructions directly to CBP upon completion 
of the review.
    Furthermore, the following deposit requirements will be effective 
upon completion of the final results of this administrative review for 
all shipments of flanges from India entered, or withdrawn from 
warehouse, for consumption on or after the publication date of the 
final results of this administrative review, as provided by section 
751(a)(1) of the Tariff Act: (1) The cash deposit rates for the 
reviewed companies will be the rates established in the final results 
of administrative review; (2) for merchandise exported by manufacturers 
or exporters not covered in this review but covered in the original 
less-than-fair-value (LTFV) investigation or a previous review, the 
cash deposit will continue to be the most recent rate published in the 
final determination or final results for which the manufacturer or 
exporter received a company-specific rate; (3) if the exporter is not a 
firm covered in this review, or the original investigation, but the 
manufacturer is, the cash deposit rate will be that established for the 
manufacturer of the merchandise in the final results of this review, or 
the LTFV investigation; and (4) if neither the exporter nor the 
manufacturer is a firm covered in this review or any previous reviews, 
the cash deposit rate will be 162.14 percent, the ``all others'' rate 
established in the LTFV investigation (59 FR 5994) (February 9, 1994).
    This notice also serves as a preliminary reminder to importers of 
their responsibility under 19 CFR 351.402(f) to file a certificate 
regarding the reimbursement of antidumping duties prior to liquidation 
of the relevant entries during this review period. Failure to comply 
with this requirement could result in the Secretary's presumption that 
reimbursement of antidumping duties occurred and the subsequent 
assessment of double antidumping duties.
    We are issuing and publishing this notice in accordance with 
sections 751(a)(1) and 777(i)(1) of the Tariff Act.

    Dated: October 31, 2003.
James J. Jochum,
Assistant Secretary for Import Administration.
[FR Doc. 03-28225 Filed 11-7-03; 8:45 am]
BILLING CODE 3510-DS-P