[Federal Register Volume 68, Number 246 (Tuesday, December 23, 2003)]
[Notices]
[Pages 74209-74214]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E3-00613]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-533-820]


Certain Hot-Rolled Carbon Steel Flat Products from India: 
Preliminary Results and Rescission in Part of Antidumping Duty 
Administrative Review

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

ACTION:  Notice of Preliminary Results and Rescission in Part of 
Antidumping Duty Administrative Review.

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SUMMARY:  In response to requests from Indian producers/exporters of 
the subject merchandise, the Department of Commerce (the Department) is 
conducting an administrative review of the antidumping duty order on 
certain hot-rolled carbon steel flat products (HRS) from India. The 
review covers one producer/exporter of subject merchandise during the 
period of review (POR), May 3, 2001, through November 30, 2002. The 
Department has preliminarily determined that no dumping margin exists 
for the manufacturer/exporter during the POR. If these preliminary 
results are adopted in our final results of administrative review, we 
will instruct U.S. Customs and Border Protection (CBP) to assess 
antidumping duties as appropriate. Interested parties are invited to 
comment on these preliminary results.

EFFECTIVE DATE: December 23, 2003.

FOR FURTHER INFORMATION CONTACT: Timothy P. Finn or Kevin Williams, AD/
CVD Enforcement, Office IV, Group II, Import Administration, 
International Trade Administration, U.S. Department of Commerce, 14th 
and Constitution Avenue, NW., Washington, DC 20230; telephone: (202) 
482-0065 or (202) 482-2371, respectively.

SUPPLEMENTARY INFORMATION:

Background

    On December 3, 2001, the Department published in the Federal 
Register the antidumping duty order on HRS from India. See Notice of 
Amended Final Antidumping Duty Determination of Sales at Less Than Fair 
Value and Antidumping Duty Order: Certain Hot-Rolled Carbon Steel Flat 
Products from India, 66 FR 60194 (December 3, 2001) (Amended Final 
Determination). On December 2, 2002, the Department published a notice 
of ``Opportunity to Request Administrative Review'' of the antidumping 
duty order on HRS from India. See Antidumping or Countervailing Duty 
Order, Finding, or Suspended Investigation; Opportunity to Request 
Administrative Review, 67 FR 71533 (December 2, 2002). On December 30 
and 31, 2002, Essar Steel Ltd. (Essar) and Tata Iron and Steel Company 
Ltd. (Tata), Indian producers/exporters of subject merchandise, 
requested administrative reviews of their entries during the POR. On 
January 15, 2003, the Department initiated an administrative review of 
Essar and Tata. National Steel Corporation, Nucor Corporation, and 
United States Steel Corporation, petitioners in this proceeding, did 
not request an administrative review. See Initiation of Antidumping and 
Countervailing Duty Administrative Reviews and Request for Revocation 
in Part, 68 FR 3009 (January 22, 2003).
    On January 3, 2003, the Department issued an antidumping 
questionnaire to Essar and Tata. The Department received Essar's 
responses to the questionnaire in January and February 2003. On January 
15, 2003, Essar requested that it be allowed to report cost and home 
market sales information for periods other than the POR. On February 
25, 2003, the Department allowed Essar to limit the reporting period 
for its home market sales to the period May 1, 2002, through January 
31, 2003. On March 5, 2003, Tata withdrew its request for an 
administrative review.

[[Page 74210]]

On April 29, 2003, the Department allowed Essar to expand the POR for 
cost reporting purposes to include the month of April 2001. The 
Department issued supplemental questionnaires to Essar in March, April, 
May, June and July 2003, and received timely responses. On June 27, 
2003, Essar requested that it be excluded from reporting sales from 
stockyards. On August 6, 2003, the Department granted Essar's request 
regarding its stockyard sales.
    On August 27, 2003 and November 4, 2003, the Department published 
in the Federal Register notices extending the deadline for issuing the 
preliminary results in this case until no later than November 3, 2003, 
and December 15, 2003, respectively. See Certain Hot-Rolled Carbon 
Steel Flat Products from India: Extension of Time Limit for Preliminary 
Results of Antidumping Duty Administrative Review, 68 FR 51557 (August 
27, 2003); also see Certain Hot-Rolled Carbon Steel Flat Products from 
India: Extension of Time Limit for Preliminary Results of Antidumping 
Duty Administrative Review, 68 FR 62430 (November 4, 2003).

Scope of the Review

    The products covered by the antidumping duty order are certain hot-
rolled carbon steel flat products of a rectangular shape, of a width of 
0.5 inch or greater, neither clad, plated, nor coated with metal and 
whether or not painted, varnished, or coated with plastics or other 
non-metallic substances, in coils (whether or not in successively 
superimposed layers), regardless of thickness, and in straight lengths, 
of a thickness of less than 4.75 mm and of a width measuring at least 
10 times the thickness. Universal mill plate (i.e., flat-rolled 
products rolled on four faces or in a closed box pass, of a width 
exceeding 150 mm, but not exceeding 1250 mm, and of a thickness of not 
less than 4.0 mm, not in coils and without patterns in relief) of a 
thickness not less than 4.0 mm is not included within the scope of the 
order.
    Specifically included within the scope of the order are vacuum 
degassed, fully stabilized (commonly referred to as interstitial-free 
(IF)) steels, high strength low alloy (HSLA) steels, and the substrate 
for motor lamination steels. IF steels are recognized as low carbon 
steels with micro-alloying levels of elements such as titanium or 
niobium (also commonly referred to as columbium), or both, added to 
stabilize carbon and nitrogen elements. HSLA steels are recognized as 
steels with micro-alloying levels of elements such as chromium, copper, 
niobium, vanadium, and molybdenum. The substrate for motor lamination 
steels contains micro-alloying levels of elements such as silicon and 
aluminum.
    Steel products to be included in the scope of the order, regardless 
of definitions in the Harmonized Tariff Schedule of the United States 
(HTSUS), are products in which: (i) iron predominates, by weight, over 
each of the other contained elements; (ii) the carbon content is 2 
percent or less, by weight; and iii) none of the elements listed below 
exceeds the quantity, by weight, respectively indicated:
    1.80 percent of manganese, or
    2.25 percent of silicon, or
    1.00 percent of copper, or
    0.50 percent of aluminum, or
    1.25 percent of chromium, or
    0.30 percent of cobalt, or
    0.40 percent of lead, or
    1.25 percent of nickel, or
    0.30 percent of tungsten, or
    0.10 percent of molybdenum, or
    0.10 percent of niobium, or
    0.15 percent of vanadium, or
    0.15 percent of zirconium.
    All products that meet the physical and chemical description 
provided above are within the scope of the order unless otherwise 
excluded. The following products, by way of example, are outside or 
specifically excluded from the scope of the order:
[sbull] Alloy hot-rolled steel products in which at least one of the 
chemical elements exceeds those listed above (including, e.g., American 
Society for Testing and Materials (ASTM) specifications A543, A387, 
A514, A517, A506).
[sbull] Society of Automotive Engineers (SAE)/American Iron & Steel 
Institute (AISI) grades of series 2300 and higher.
[sbull] Ball bearing steels, as defined in the HTSUS.
[sbull] Tool steels, as defined in the HTSUS.
[sbull] Silico-manganese (as defined in the HTSUS) or silicon 
electrical steel with a silicon level exceeding 2.25 percent.
[sbull] ASTM specifications A710 and A736.
[sbull] USS abrasion-resistant steels (USS AR 400, USS AR 500).
[sbull] All products (proprietary or otherwise) based on an alloy ASTM 
specification (sample specifications: ASTM A506, A507).
[sbull] Non-rectangular shapes, not in coils, which are the result of 
having been processed by cutting or stamping and which have assumed the 
character of articles or products classified outside chapter 72 of the 
HTSUS.
    The merchandise subject to the order is classified in the HTSUS at 
subheadings: 7208.10.15.00, 7208.10.30.00, 7208.10.60.00, 
7208.25.30.00, 7208.25.60.00, 7208.26.00.30, 7208.26.00.60, 
7208.27.00.30, 7208.27.00.60, 7208.36.00.30, 7208.36.00.60, 
7208.37.00.30, 7208.37.00.60, 7208.38.00.15, 7208.38.00.30, 
7208.38.00.90, 7208.39.00.15, 7208.39.00.30, 7208.39.00.90, 
7208.40.60.30, 7208.40.60.60, 7208.53.00.00, 7208.54.00.00, 
7208.90.00.00, 7211.14.00.90, 7211.19.15.00, 7211.19.20.00, 
7211.19.30.00, 7211.19.45.00, 7211.19.60.00, 7211.19.75.30, 
7211.19.75.60, and 7211.19.75.90. Certain hot-rolled carbon steel flat 
products covered by the order, including: vacuum degassed fully 
stabilized; high strength low alloy; and the substrate for motor 
lamination steel may also enter under the following tariff numbers: 
7225.11.00.00, 7225.19.00.00, 7225.30.30.50, 7225.30.70.00, 
7225.40.70.00, 7225.99.00.90, 7226.11.10.00, 7226.11.90.30, 
7226.11.90.60, 7226.19.10.00, 7226.19.90.00, 7226.91.50.00, 
7226.91.70.00, 7226.91.80.00, and 7226.99.00.00. Subject merchandise 
may also enter under 7210.70.30.00, 7210.90.90.00, 7211.14.00.30, 
7212.40.10.00, 7212.40.50.00, and 7212.50.00.00. Although the HTSUS 
subheadings are provided for convenience and customs purposes, the 
written description of the merchandise under investigation is 
dispositive.

Period of Review

    The POR is May 3, 2001, through November 30, 2002.

Final Partial Rescission of Review

    As provided in 19 CFR 351.213(d)(1), ``the Secretary will rescind 
an administrative review under this section, in whole or in part, if a 
party that requested a review withdraws the request within 90 days of 
the date of publication of notice of initiation of the requested 
review.'' Tata withdrew its request for an administrative review within 
90 days of the date of publication of the notice of initiation of the 
instant administrative review and no other party requested an 
administrative review of Tata. Therefore, the Department is rescinding 
the instant administrative review with respect to Tata.

Verification

    As provided in section 782(i) of the Tariff Act of 1930, as amended 
(the Act), the Department conducted a verification of the sales and 
cost information provided by Essar. The Department conducted this 
verification using standard verification procedures

[[Page 74211]]

including: on-site inspection of the manufacturer's facilities, 
examination of relevant sales, cost, production and financial records 
and selection of relevant source documentation as exhibits. The 
Department's verification findings are identified in the sales and cost 
verification memoranda dated December 15, 2003, the public versions of 
which are on file in the Central Records Unit (CRU), room B099 of the 
main Commerce building.

Use of Partial Adverse Facts Available

    Section 776(a)(2) of the Act provides that, if an interested party 
(A) withholds information requested by the Department, (B) fails to 
provide such information by the deadline for submission of the 
information, or in the form and manner requested, (C) significantly 
impedes an antidumping or countervailing proceeding, or (D) provides 
information that cannot be verified, the Department shall use, subject 
to section 782(d) of the Act, facts otherwise available in reaching the 
applicable determination. In selecting from among the facts otherwise 
available, section 776(b) of the Act provides that if the Department 
finds that an interested party failed to cooperate by not acting to the 
best of its ability to comply with a request for information, the 
Department may use an inference that is adverse to the interests of the 
party. The Act provides that an adverse inference may include reliance 
on information derived from the petition, a final determination in an 
antidumping investigation or review, or any other information placed on 
the record. See section 776(b)(1), (2), (3), and (4) of the Act.
    During the administrative review, Essar withheld certain 
information requested by the Department regarding its relationships 
with certain companies, and reported information regarding such 
relationships that does not agree with the Department's verification 
findings. Moreover, the record indicates that Essar significantly 
impeded the proceeding with respect to the issue of affiliation and did 
not cooperate by acting to the best of its ability to comply with the 
Department's requests for information regarding its relationships with 
the companies at issue. Therefore, as partial adverse facts available, 
the Department has preliminarily determined that Essar is affiliated 
with all of the companies in the Essar Group, as well as the companies 
identified in footnote 41 of Essar's 2001/2002 Annual Report. 
Additionally, we applied an adverse inference by determining that Essar 
did not engage in arm's-length transactions with the Essar Group 
companies and the footnote 41 companies that it failed to identify as 
affiliated parties. Specifically, we determined that the costs that 
Essar incurred as a result of its transactions with these companies are 
less than the costs it would have incurred had the transactions been 
conducted with unaffiliated parties. Transactions with these companies 
affect Essar's general and administrative (G&A) expenses, financing 
expenses, and manufacturing overhead expenses. As adverse facts 
available, we recalculated the G&A ratio used by Essar using 
information contained in Ispat Industries Ltd.'s (Ispat) 2000-2001 
financial statements. We also adjusted Essar's manufacturing overhead 
expenses and financial expenses based on available information 
regarding the amount by which the costs that Essar incurred as a result 
of its transactions with affiliated parties are less than market 
prices. For a complete discussion of our use of adverse facts 
available, see the memorandum from Thomas F. Futtner, Acting Director, 
Office IV, to Holly A. Kuga, Acting Deputy Assistant Secretary, dated 
December 15, 2003 (Facts Available Memorandum), which is on file in the 
CRU.
    Section 776(c) of the Act provides that when the Department relies 
on secondary information rather than on information obtained in the 
course of an investigation or review, it shall, to the extent 
practicable, corroborate that information from independent sources that 
are reasonably at its disposal. The percentage used to increase Essar's 
manufacturing overhead and financial expenses is not considered 
secondary information because it is based on information obtained 
during the course of this review from Essar. Therefore, the Department 
is not required to corroborate this percentage. With respect to the G&A 
expenses, we obtained Ispat's 2000-2001 financial statements from the 
public record of the investigation of certain cold-rolled carbon steel 
flat products from India. See Certain Cold-Rolled Carbon Steel Flat 
Products From Argentina, Australia, Belgium, Brazil, France, Germany, 
India, Japan, Korea, the Netherlands, New Zealand, the People's 
Republic of China, the Russian Federation, South Africa, Spain, Sweden, 
Taiwan, Thailand, Turkey, and Venezuela; Notice of Initiation of 
Antidumping Duty Investigations, 66 FR 54198, 54207 (October 26, 2001). 
These financial statements cover the period April 1, 2000, through 
March 31, 2001, which predates the POR by one fiscal year. Publicly 
available data from independent sources that relate to the relevant 
time period are generally considered to be both relevant and reliable 
because they are contemporaneous with the period under consideration 
and not generated for purposes of the trade action. Because Ispat is an 
Indian producer of hot-rolled carbon steel flat products and its 2000-
2001 financial statements are publicly available and cover a period 
close in time to the POR, the Department considers these statements to 
have probative value, and therefore, to be corroborated.

Date of Sale

    Essar reported the invoice date for both its home market and U.S. 
sales to be the date of sale. Although the Department maintains a 
presumption that the invoice date is the date of sale (19 CFR 
351.401(i)), ``[i]f the Department is presented with satisfactory 
evidence that the material terms of sale are finally established on a 
date other than the date of invoice, the Department will use that 
alternative date as the date of sale.'' Antidumping Duties; 
Countervailing Duties: Final Rule, 62 FR 27296, 27349 (May 19, 1997) 
(Preamble). Because the record evidence does not indicate that the 
material terms of home market sales are finally established on a date 
other than the date of the invoice, consistent with the methodology 
employed with respect to Essar in the investigation, the Department is 
preliminarily using the invoice date as the date of Essar's home market 
sales. However, with respect to Essar's U.S. sales, the Department 
found no evidence of changes to the material terms of sale after the 
contract date (e.g., changes to the price, quantity, production or 
shipment schedules). Therefore, the Department is preliminarily using 
the contract date as the date of Essar's U.S. sales.

Fair Value Comparison

    In order to determine whether Essar sold HRS to the United States 
at less than normal value (NV), the Department compared the export 
price (EP) of individual U.S. sales to the monthly weighted-average NV 
of sales of the foreign like product made in the ordinary course of 
trade (see section 777A(d)(2) of the Act; see also section 
773(a)(1)(B)(i) of the Act). The methodology used to compare sales and 
to calculate EP and NV are described in the ``Comparison Methodology'', 
``Export Price,'' and ``Normal Value'' sections of this notice.

[[Page 74212]]

Comparison Methodology

    In accordance with section 771(16) of the Act, the Department 
considered all products within the scope of this review that Essar 
produced and sold in the comparison market during the POR to be foreign 
like products for purposes of determining appropriate product 
comparisons to HRS sold in the United States. The Department determined 
that the home market is the appropriate comparison market because the 
aggregate quantity of Essar's home market sales of foreign like product 
is more than five percent of the aggregate quantity of its U.S. sales 
of subject merchandise (see section 773(a)(1)(C) of the Act and the 
``Normal Value'' section of this notice, below). The Department 
compared U.S. sales to sales made in the home market within the 
contemporaneous window period, which extends from three months prior to 
the U.S. sale until two months after the sale. Where there were no 
sales of identical merchandise made in the home market in the ordinary 
course of trade, the Department compared U.S. sales to sales of the 
most similar foreign like product made in the ordinary course of trade. 
In making product comparisons, the Department selected identical and 
most similar foreign like products based on the physical 
characteristics reported by Essar in the following order of importance: 
painted or not painted; quality; carbon content; yield strength; 
thickness; width; cut-to-length or coil; tempered or not tempered; 
pickled or not pickled; edge trim; and with or without patterns in 
relief.

Level of Trade

    In accordance with section 773(a)(1)(B) of the Act, to the extent 
practical, the Department determined NV based on sales in the home 
market at the same level of trade (LOT) as the EP sales. The NV LOT is 
that of the starting-price sales in the home market. For EP sales, the 
U.S. LOT is also the level of the starting-price sale.
    To determine whether NV sales are at a different LOT than the EP 
sales, we examined stages in the marketing process and selling 
activities along the chain of distribution between the producer and the 
unaffiliated customer. If the home market sales are at a different LOT, 
and the difference affects price comparability, as manifested in a 
pattern of consistent price differences between the home market sales 
on which NV is based and the home market sales at the LOT of the export 
transaction, we make a LOT adjustment under section 773(a)(7)(A) of the 
Act.
    In determining whether separate LOTs exist, we obtained information 
from Essar about the marketing stages for the reported U.S. and home 
market sales, including a description of the selling activities 
performed by Essar for each channel of distribution. In identifying 
LOTs for EP and home market sales, we considered the selling functions 
reflected in the starting price before any adjustments. See 19 CFR 
351.412(c)(1)(i) and (iii). We expect that, if claimed LOTs are the 
same, the selling functions and activities of the seller at each level 
should be similar. Conversely, if a party claims that LOTs are 
different for different groups of sales, the selling functions and 
activities of the seller for each group should be dissimilar.
    In its questionnaire responses, Essar reported that during the POR, 
it sold the foreign like product in the home market through one channel 
of distribution and in the United States through one channel of 
distribution. We found that Essar engaged in similar selling activities 
for all home market sales. There are also no differences in the selling 
functions performed in the U.S. channel of distribution. Based on the 
similarity of the selling functions, we have determined that Essar sold 
HRS at one LOT in the home market and one LOT in the U.S. market. We 
also found that the selling activities performed by Essar in the home 
market are similar to those performed in the U.S. market. Specifically, 
Essar engaged in price negotiations, contacted customers, processed 
orders, made freight arrangements, collected payments and extended 
credit, and provided warranty services in both markets at similar 
levels of intensity. Therefore, we have preliminarily determined that 
the LOTs in the home and U.S. markets are the same LOT. Thus, a LOT 
adjustment is not required for comparison of U.S. sales to home market 
sales.

Export Price

    In calculating U.S. price, the Department used EP, as defined in 
section 772(a) of the Act, because the merchandise was sold, prior to 
importation, by Essar to unaffiliated purchasers in the United States. 
We calculated EP based on the packed, delivered prices charged to 
unaffiliated customers in the United States. In accordance with section 
772(c)(2)(A) of the Act, we made deductions from the starting price, 
where applicable, for foreign movement expenses (including brokerage 
and handling and inland freight), international freight, U.S. duties 
and importer handling fees. In accordance with section 772(c)(1)(C) of 
the Act, we increased EP by the countervailing duty (CVD) rate 
attributable to the export subsidies found in the CVD investigation of 
HRS from India (the ongoing first administrative review of the CVD 
order has not yet been completed).
    Essar claimed an adjustment for duty drawback under the Duty Free 
Remission Scheme (DFRC). The Department applies a two-pronged test to 
determine whether to grant a respondent a duty drawback adjustment 
pursuant to section 772(c)(1)(B) of the Act. Specifically, the 
Department grants a respondent a duty drawback adjustment if it finds 
that: (1) Import duties and rebates are directly linked to, and are 
dependent upon, one another, and (2) the company claiming the 
adjustment can demonstrate that there are sufficient imports of raw 
materials to account for the duty drawback received on exports of the 
manufactured product. See Steel Wire Rope from the Republic of Korea; 
Final Results of Antidumping Duty Administrative Review, 61 FR 55965, 
55968 (October 30, 1996).
    However, Essar failed to demonstrate that it received a duty 
drawback from the Government of India (GOI) under the DFRC program. In 
fact, Essar indicated that its application for the DFRC program had not 
yet been approved. See Essar's April 22, 2003 supplemental 
questionnaire response at 62. At verification, company officials again 
reported that Essar had yet to receive approval of its application for 
the DFRC program. Because there is no evidence that Essar received duty 
drawback under the DFRC program, we have not increased U.S. price by 
the amount of drawback claimed by Essar.

Normal Value

    After testing home market viability, whether sales to affiliates 
were at arm's-length prices, and whether home market sales failed the 
cost test, we calculated NV as noted in subsection 4, ``Calculation of 
NV,'' below.

1. 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), see 19 CFR 351.404(b)(2), we compared Essar's 
volume of home market sales of the foreign like product to the volume 
of its U.S. sales of subject merchandise, in accordance with section 
773(a)(1) of the Act. Because Essar's aggregate volume of home market 
sales of the foreign like

[[Page 74213]]

product is greater than five percent of its aggregate volume of U.S. 
sales of subject merchandise, we determined that the home market is 
viable and have used the home market as the comparison market.

2. Affiliated-Party Transactions and Arm's-Length Test

    The Department may calculate NV based on a sale to an affiliated 
party only if it is satisfied that the price to the affiliated party is 
comparable to the price at which sales are made to parties not 
affiliated with the exporter or producer, i.e., sales at arm's-length. 
See 19 CFR 351.403(c). Sales to affiliated customers for consumption in 
the home market that were determined not to be at arm's-length were 
excluded from our analysis. Essar reported sales of the foreign like 
product to affiliated end-users and resellers. To test whether these 
sales were made at arm's-length prices, the Department compared the 
prices of sales of comparable merchandise to affiliated and 
unaffiliated customers, net of all rebates, movement charges, direct 
selling expenses, and packing. Pursuant to 19 CFR 351.403(c), and in 
accordance with the Department's practice, when the prices charged to 
an affiliated party were, on average, between 98 and 102 percent of the 
prices charged to unaffiliated parties for merchandise comparable to 
that sold to the affiliated party, we determined that the sales to the 
affiliated party were at arm's-length. See Antidumping Proceedings: 
Affiliated Party Sales in the Ordinary Course of Trade, 67 FR 69186 
(November 15, 2002). We included in our NV calculations those sales to 
affiliated parties that were made at arm's length prices.

3. Cost of Production (COP) Analysis

    In the investigation of HRS from India, the most recently completed 
segment of this proceeding, the Department disregarded Essar's home 
market sales that failed the cost test. See Notice of Preliminary 
Determination of Sales at Less Than Fair Value and Postponement of 
Final Determination: Certain Hot-Rolled Carbon Steel Flat Products From 
India, 66 FR 22157 (May 3, 2001) (a portion of Essar's home market 
sales continued to be disregarded in the final determination). 
Accordingly, pursuant to section 773(b)(2)(A)(ii) of the Act, the 
Department, initiated a COP investigation of Essar for purposes of this 
administrative review. We conducted the COP analysis as described 
below.
A. Calculation of COP
    In accordance with section 773(b)(3) of the Act, we calculated the 
weighted-average COP, by model, for the POR based on the sum of 
materials and fabrication costs, G&A expenses, and packing costs. We 
relied on Essar's cost data, as submitted, except as noted below:
1. Essar purchased iron-ore pellets, an input used to manufacture the 
merchandise under review, from an affiliated party, Hy-Grade Pellets 
Limited (Hy-Grade), at a price below Hy-Grade's COP. Pursuant to 
section 773(f)(3) of the Act, we adjusted the reported per-unit cost of 
iron-ore pellets to reflect Hy-Grade's COP.
2. We disallowed Essar's reported scrap offset because the offset was 
based, in part, on sales of scrap to affiliated parties.
3. As indicated in the ``Use of Partial Adverse Facts Available'' 
above, we based Essar's G&A expenses on adverse facts available and 
made an adverse adjustment to Essar's manufacturing overhead expenses 
and financial expenses. See Facts Available Memorandum.
    For further information regarding each of the above adjustments, 
see the calculation memorandum from Timothy P. Finn, Senior Import 
Compliance Specialist, to the File, dated December 15, 2003, on file in 
the CRU.
B. Test of Comparison Market Sales Prices
    As required under section 773(b) of the Act, we compared the 
adjusted weighted-average COPs to home market sales of the foreign like 
product, in order to determine whether these sales had been made at 
prices below the COP within an extended period of time in substantial 
quantities, and whether such prices were sufficient to permit the 
recovery of all costs within a reasonable period of time. On a model-
specific basis, we compared the adjusted COPs to home market prices, 
less any applicable movement charges and direct and indirect selling 
expenses.
C. Results of the COP Test
    Pursuant to section 773(b)(2)(C) of the Act, if less than 20 
percent of Essar's sales of a given product were made at prices below 
the COP, we did not disregard any below-cost sales of that product 
because the below-cost sales were not made in ``substantial 
quantities.'' If 20 percent or more of Essar's sales of a given product 
during the POR were made at prices below the COP, we determined that 
such sales were made in substantial quantities within an extended 
period of time (i.e., a period of one year). Further, because we 
compared prices to POR-average costs, we determined that the below-cost 
prices would not permit recovery of all costs within a reasonable time 
period, and thus, we disregarded the below-cost sales in accordance 
with sections 773(b)(1) and (2) of the Act.
    We found that for certain products, Essar made home market sales at 
prices below the COP within an extended period of time in substantial 
quantities. Further, we found that these sales prices did not permit 
the recovery of costs within a reasonable period of time. Therefore, we 
excluded these sales from our analysis in accordance with section 
773(b)(1) of the Act.
D. Calculation of CV
    In accordance with section 773(e)(1) of the Act, we calculated CV 
by adding together Essar's materials, fabrication, selling and G&A 
expenses and interest expenses and profit. In accordance with section 
773(e)(2)(A) of the Act, we based selling and G&A expenses and profit 
on the amounts incurred by Essar in connection with the production and 
sale of the foreign like product in the ordinary course of trade, for 
consumption in the home market.

4. Calculation of NV

    We calculated NV from ex-factory prices to unaffiliated customers 
in the home market. These prices include charges for packing. We made 
deductions from the starting price, when appropriate, for discounts and 
rebates, and movement expenses and domestic brokerage and handling. See 
section 773(a)(6)(B)(ii) of the Act. In accordance with section 
773(a)(6)(A) and (B) of the Act, we added U.S. packing costs to, and 
deducted home market packing costs from, the starting price. In 
addition, in accordance with section 773(a)(6)(C)(iii) of the Act, we 
made circumstance of sale (COS) adjustments to the starting price by 
deducting direct selling expenses incurred on home market sales from 
the starting price and adding U.S. direct selling expenses to the 
starting price.

Currency Conversion

    Pursuant to section 773A(a) of the Act, we converted foreign 
currencies into U.S. dollars using the exchange rates in effect on the 
dates of the U.S. sales as certified by the Federal Reserve Bank.

Preliminary Results of Review

    As a result of this review, we preliminarily determine that the 
following weighted-average percentage

[[Page 74214]]

margin exists for the period May 3, 2001, through November 30, 2002:

------------------------------------------------------------------------
                                                                 Margin
                    Manufacturer/Exporter                      (percent)
------------------------------------------------------------------------
Essar Steel Ltd..............................................       0.00
------------------------------------------------------------------------

    The Department will disclose the calculations used in its analysis 
to parties to this proceeding within five days of the publication date 
of this notice. See 19 CFR 351.224(b). Any interested party may request 
a hearing within 30 days of the publication date of this notice. See 19 
CFR 351.310(c). If requested, a hearing will be held 44 days after the 
date of publication of this notice, or the first workday thereafter. 
Interested parties may submit case briefs within 30 days of the date of 
publication of this notice. See 19 CFR 309(c). Rebuttal briefs, limited 
to issues raised in the case briefs, may be filed not later than 7 days 
after the deadline for filing case briefs. See 19 CFR 309(d). Parties 
who submit written arguments are requested to submit with each 
argument: (1) a statement of the issue, (2) a brief summary of the 
argument and (3) a table of authorities. Further, we request that 
parties submitting written comments provide the Department with an 
additional copy of the public version of any such comments on a 
diskette. The Department will publish the notice of the final results 
of this administrative review, which will include the results of its 
analysis of issues raised in any written comments or hearing, within 
120 days from the publication date of this notice.

Assessment Rate

    Upon completion of this administrative review, the Department will 
determine, and CBP shall assess, antidumping duties on all appropriate 
entries. In accordance with 19 CFR 351.212(b)(1), we have calculated an 
importer-specific assessment rate for merchandise subject to this 
review. If the importer-specific assessment rate is above de minimis, 
we will instruct CBP to assess the importer-specific rate uniformly on 
all entries made during the POR. The Department will issue appropriate 
assessment instructions directly to the CBP within 15 days of 
publication of the final results of review. If these preliminary 
results are adopted in the final results of review, we will direct CBP 
to assess the resulting assessment rates against the entered customs 
values for the subject merchandise on each of the importers' entries 
during the review period.

Cash Deposit Requirements

    The following cash deposit requirements will be effective upon 
publication of these final results for all shipments of the subject 
merchandise entered, or withdrawn from warehouse, for consumption on or 
after the publication date of these final results of administrative 
review, as provided by section 751(a)(1) of the Act: (1) The cash 
deposit rate for the reviewed company will be the rate established in 
the final results of this review (except that if the rate is de 
minimis, i.e., less than 0.5 percent, no cash deposit rate will be 
required); (2) for previously investigated or reviewed 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 
less than fair value (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 38.72 percent, which is the ``all 
others'' rate established in the LTFV investigation.\1\ See Amended 
Final Determination. These deposit requirements, when imposed, shall 
remain in effect until publication of the final results of the next 
administrative review.
---------------------------------------------------------------------------

    \1\ The ``all others'' cash deposit rate, applied by CBP, is 
reduced to account for the export subsidy rate found in the 
countervailing duty investigation. The adjusted ``all others'' rate 
is 23.87 percent.
---------------------------------------------------------------------------

Notification to Interested Parties

    This notice also serves as a preliminary reminder to importers of 
their responsibility under 19 CFR 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 administrative review and this notice are in accordance with 
sections 751(a)(1) and 777(i)(1) of the Act.

    Dated: December 15, 2003.
James J. Jochum,
Assistant Secretary for Import Administration.
[FR Doc. E3-00613 Filed 12-22-03; 8:45 am]
BILLING CODE 3510-DS-S