[Federal Register Volume 69, Number 45 (Monday, March 8, 2004)]
[Notices]
[Pages 10659-10666]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-5137]


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DEPARTMENT OF COMMERCE

International Trade Administration

A-533-813


Certain Preserved Mushrooms from India: Preliminary Results of 
Antidumping Duty Administrative Review

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

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

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SUMMARY: In response to timely requests by three manufacturers/
exporters and the petitioner,\1\ the Department of Commerce is 
conducting an administrative review of the antidumping duty order on 
certain preserved mushrooms from India with respect to five companies. 
The period of review is February 1, 2002, through January 31, 2003.
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    \1\ The petitioner is the Coalition for Fair Preserved Mushroom 
Trade which includes the American Mushroom Institute and the 
following domestic companies: L.K. Bowman, Inc., Modern Mushroom 
Farms, Inc., Monterey Mushrooms, Inc., Mount Laurel Canning Corp., 
Mushrooms Canning Company, Southwood Farms, Sunny Dell Foods, Inc., 
and United Canning Corp.
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    We preliminarily determine that sales have been made below normal 
value. Interested parties are invited to comment on these preliminary 
results. If these preliminary results are adopted in our final results 
of administrative review, we will instruct Customs and Border 
Protection to assess antidumping duties on all appropriate entries.

EFFECTIVE DATE: March 8, 2004.

FOR FURTHER INFORMATION CONTACT: David J. Goldberger or Kate Johnson, 
Office 2, AD/CVD Enforcement Group I, Import Administration-Room B099, 
International Trade Administration, U.S. Department of Commerce, 14th 
Street and Constitution Avenue, NW., Washington, DC 20230; telephone: 
(202) 482-4136 or (202) 482-4929, respectively.

SUPPLEMENTARY INFORMATION:

Background

    On February 19, 1999, the Department published in the Federal 
Register an amended final determination and antidumping duty order on 
certain preserved mushrooms from India (64 FR 8311).
    In response to timely requests by three manufacturers/exporters, 
Agro Dutch Foods Ltd. (Agro Dutch), Saptarishi Agro Industries, Ltd. 
(Saptarishi Agro), and Weikfield Agro Products, Ltd. (Weikfield), as 
well as the petitioner, the Department published a notice of initiation 
of an administrative review with respect to the following companies: 
Agro Dutch, Alpine Biotech, Ltd. (Alpine Biotech), Dinesh Agro 
Products, Ltd. (Dinesh Agro), Flex Foods, Ltd. (Flex Foods), Himalya 
International, Ltd. (Himalya), Mandeep Mushrooms, Ltd. (Mandeep 
Mushrooms), Premier Mushroom Farms (Premier), Saptarishi Agro, and 
Weikfield (68 FR 14399, March 25, 2003). The period of review (POR) is 
February 1, 2002, through January 31, 2003.
    On March 28, 2002, the Department issued antidumping duty 
questionnaires to the above-mentioned companies. On April 7, 2003, the 
petitioner timely withdrew its request for review with respect to 
Alpine Biotech and Mandeep Mushrooms, and on July 14, 2003, the 
petitioner withdrew its request for review of Himalya. In addition, 
Flex Foods reported that it had no sales of the subject merchandise 
during the POR, which we confirmed by reviewing data from Customs and 
Border Protection (CBP) (see Memorandum to the File dated June 6, 
2003). Accordingly, we published a Notice of Partial Rescission of 
Antidumping Duty Administrative Review with respect to Alpine Biotech, 
Mandeep Mushrooms, Flex Foods, and Himalya on August 18, 2003 (68 FR 
49435). While Saptarishi Agro withdrew its request for a review on May 
13, 2003, the petitioner did not withdraw its request for a review of 
this company, therefore, we did not rescind the review with respect to 
Saptarishi Agro.
    We received responses to the original questionnaire during the 
period May through July 2003 from Agro Dutch, Premier, and Weikfield. 
We issued supplemental questionnaires in July, September, and October 
2003, and received responses from these companies during the period 
August through October 2003. We did not receive a response from either 
Dinesh Agro or Saptarishi Agro.
    On June 6, 2003, the petitioner made an allegation that Agro Dutch 
sold certain preserved mushrooms in its third country market at prices 
below the COP. On July 8, 2003, the Department initiated a cost 
investigation of Agro Dutch's third country sales (see Petitioners' 
Allegation of Sales Below the Cost of Production for Agro Dutch, 
Memorandum to the File dated July 8, 2003 (Agro Dutch COP Initiation 
Memo).
    On July 15, 2003, the petitioner made an allegation that Premier 
sold certain preserved mushrooms in its home market at prices below the 
COP. On August 1, 2003, the Department initiated a cost investigation 
of Premier's home market sales (see Petitioners' Allegation of Sales 
Below the Cost of Production for Premier, Memorandum to the File dated 
August 1, 2003 (Premier COP Initiation Memo)).
    On October 3, 2003, the Department extended the time limit for the 
preliminary results in this review until March 1, 2004. See Certain 
Preserved Mushrooms from India and the People's Republic of China: 
Notice of Extension of Time Limit for Preliminary Results in 
Antidumping Duty Administrative Reviews and New Shipper Review, 68 FR 
57424.
    In November 2003, we conducted on-site verifications of Premier's 
and Weikfield's questionnaire responses, in accordance with 19 CFR 
351.307. The results of these verifications are described in Sales and 
Cost of

[[Page 10660]]

Production Verification in Secunderabad, India of Premier Mushroom 
Farms, Memorandum to the File dated January 23, 2004 (Premier 
Verification Report), and Sales and Cost of Production Verification in 
Pune, India of Weikfield Agro Products, Ltd, Memorandum to the File 
dated December 23, 2003 (Weikfield Verification Report).
    As instructed by the Department, Weikfield and Premier submitted 
revised U.S. and home market sales data pursuant to verification 
findings on January 20, 2004, and February 6, 2004, respectively.
    On February 12, 2004, the petitioner submitted comments on Premier 
and Weikfield for purposes of the preliminary results. The petitioner 
submitted comments on Agro Dutch on February 13, 2004.

Scope of the Order

    The products covered by this order are certain preserved mushrooms, 
whether imported whole, sliced, diced, or as stems and pieces. The 
preserved mushrooms covered under this order are the species Agaricus 
bisporus and Agaricus bitorquis. ``Preserved mushrooms'' refer to 
mushrooms that have been prepared or preserved by cleaning, blanching, 
and sometimes slicing or cutting. These mushrooms are then packed and 
heated in containers including but not limited to cans or glass jars in 
a suitable liquid medium, including but not limited to water, brine, 
butter or butter sauce. Preserved mushrooms may be imported whole, 
sliced, diced, or as stems and pieces. Included within the scope of 
this order are ``brined'' mushrooms, which are presalted and packed in 
a heavy salt solution to provisionally preserve them for further 
processing.
    Excluded from the scope of this order are the following: (1) All 
other species of mushroom, including straw mushrooms; (2) all fresh and 
chilled mushrooms, including ``refrigerated'' or ``quick blanched 
mushrooms''; (3) dried mushrooms; (4) frozen mushrooms; and (5) 
``marinated,'' ``acidified'' or ``pickled'' mushrooms, which are 
prepared or preserved by means of vinegar or acetic acid, but may 
contain oil or other additives.
    The merchandise subject to this order is currently classifiable 
under subheadings: 2003.10.0127, 2003.10.0131, 2003.10.0137, 
2003.10.0143, 2003.10.0147, 2003.10.0153 and 0711.51.0000 of the 
Harmonized Tariff Schedule of the United States\2\ (HTS). Although the 
HTS subheadings are provided for convenience and customs purposes, our 
written description of the scope of this order dispositive.
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    \2\ Prior to January 1, 2002, the HTS codes were as follows: 
2003.10.0027, 2003.10.0031, 2003.10.0037, 2003.10.0043, 
2003.10.0047, 2003.10.0053, and 0711.90.4000.
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Use of Facts Available

    As noted above in the ``Background'' section, neither Dinesh Agro 
nor Saptarishi Agro submitted a response to the Department's 
antidumping questionnaire. Because of Dinesh Agro's and Saptarishi 
Agro's refusal to cooperate in this review, we determine that the 
application of facts available is appropriate, pursuant to section 
776(a)(2) of the Tariff Act of 1930 (the Act).
    Section 776(a)(2) of the Act provides that ``if an interested party 
or any other person (A) withholds information that has been requested 
by the administering authority; (B) fails to provide such information 
by the deadlines for the submission of the information or in the form 
and manner requested, subject to subsections (c)(1) and (e) of section 
782; (C) significantly impedes a proceeding under this title; or (D) 
provides such information but the information cannot be verified as 
provided in section 782(i), the administering authority shall, subject 
to section 782(d), use the facts otherwise available in reaching the 
applicable determination under this title.''
    Because these two companies refused to participate in this 
administrative review, we find that, in accordance with sections 
776(a)(2)(A), (B), and (C) of the Act, the use of total facts available 
is appropriate (see, e.g., Final Results of Antidumping Duty 
Administrative Review for Two Manufacturers/Exporters: Certain 
Preserved Mushrooms from the People's Republic of China, 65 FR 50183, 
50184 (August 17, 2000) (for a more detailed discussion, see 
Preliminary Results of Antidumping Duty Administrative Review for Two 
Manufacturers/Exporters: Certain Preserved Mushrooms from the People's 
Republic of China, 65 FR 40609, 40610-40611 (June 30, 2000)).
    Section 776(b) of the Act provides that, if the Department finds 
that an interested party ``has failed to cooperate by not acting to the 
best of its ability to comply with a request for information,'' the 
Department may use information that is adverse to the interests of the 
party as facts otherwise available. Adverse inferences are appropriate 
``to ensure that the party does not obtain a more favorable result by 
failing to cooperate than if it had cooperated fully.'' See Statement 
of Administrative Action (SAA) accompanying the URAA, H.R. Doc. No. 
103-316, at 870 (1994). Furthermore, ``an affirmative finding of bad 
faith on the part of the respondent is not required before the 
Department may make an adverse inference.'' See Antidumping Duties; 
Countervailing Duties: Final Rule, 62 FR 27296, 27340 (May 19, 1997).
    Section 776(b) of the Act authorizes the Department to use as 
adverse facts available information derived from the petition, the 
final determination from the less-than-fair-value (LTFV) investigation, 
a previous administrative review, or any other information placed on 
the record. Under section 782(c) of the Act, a respondent has a 
responsibility not only to notify the Department if it is unable to 
provide requested information, but also to provide a ``full explanation 
and suggested alternative forms.'' Neither company responded to the 
Department's request for information, thereby failing to comply with 
this provision of the statute. Therefore, we determine that Dinesh Agro 
and Saptarishi Agro failed to cooperate to the best of their ability, 
making the use of an adverse inference appropriate.
    In this proceeding, consistent with Department practice (see, e.g., 
Rescission of Second New Shipper Review and Final Results and Partial 
Rescission of First Antidumping Duty Administrative Review Brake Rotors 
From the People's Republic of China, 64 FR 61581, 61584 (November 12, 
1999), as adverse facts available, we have preliminarily assigned to 
exports of the subject merchandise produced by Dinesh Agro and 
Saptarishi Agro the rate of 66.24 percent, the highest rate calculated 
for any cooperative respondent in the original LTFV investigation or 
the three previous administrative reviews. The rates assigned to 
respondents in the previous segments of the proceeding range from de 
minimis for cooperative respondents to a petition rate of 243.87 
percent for non-cooperative respondents. The Department's practice when 
selecting an adverse rate from among the possible sources of 
information is to ensure that the margin is sufficiently adverse ``as 
to effectuate the purpose of the facts available rule to induce 
respondents to provide the Department with complete and accurate 
information in a timely manner.'' See Final Determination of Sales at 
Less than Fair Value: Static Random Access Memory Semiconductors from 
Taiwan, 63 FR

[[Page 10661]]

8909, 8932 (February 23, 1998). Consistent with the previous 
administrative reviews, we find the application of a rate of 66.24 
percent to Dinesh Agro and Saptarishi Agro to be sufficiently adverse 
in this case. Section 776(c) of the Act provides that where the 
Department selects from among the facts otherwise available and relies 
on ``secondary information,'' the Department shall, to the extent 
practicable, corroborate that information from independent sources 
reasonably at the Department's disposal. Secondary information is 
described in the SAA as ``{i{time} nformation derived from the petition 
that gave rise to the investigation or review, the final determination 
concerning the subject merchandise, or any previous review under 
section 751 concerning the subject merchandise.'' See SAA at 870 and 19 
CFR 351.308(c)(1). The SAA states that ``corroborate'' means to 
determine that the information used has probative value (id.). To 
corroborate secondary information, the Department will, to the extent 
practicable, examine the reliability and relevance of the information 
to be used. See 19 CFR 351.308(d).
    Unlike other types of information, such as input costs or selling 
expenses, there are no independent sources from which the Department 
can derive calculated dumping margins; the only source for margins is 
administrative determinations. In a previous segment of this 
proceeding, the Department determined that the petition rate of 243.87 
percent could not be corroborated and thus no longer had probative 
value for use as an adverse facts available rate with respect to 
Saptarishi Agro. We found that the next highest rate, the calculated 
rate of 66.24 percent from a respondent in a previous review, was 
sufficiently adverse and that there was no impediment for its 
application to Saptarishi Agro in that review. See Notice of Final 
Results of Administrative Review: Certain Preserved Mushrooms from 
India 67 FR 46172 (July 12, 2002), and accompanying Issues and Decision 
Memorandum at Comment 8.
    We preliminarily determine that the calculated margin of 66.24 
percent selected, as adverse facts available, is relevant, reliable, 
and has probative value because it is based on verified data from a 
respondent in a previous administrative review. Furthermore, although 
this margin is the highest in the range of calculated margins, there is 
no basis to conclude that it is aberrational or is inappropriate as 
applied to Dinesh Agro and Saptarishi Agro. The rate used is also the 
rate currently applicable to Saptarishi Agro. Accordingly, we determine 
that this rate is an appropriate rate to be applied in this review to 
exports of the subject merchandise produced by Dinesh Agro and 
Saptarishi Agro as facts otherwise available.

Duty Absorption

    On February 28, 2003, the petitioner requested that the Department 
determine whether antidumping duties had been absorbed during the POR. 
Section 751(a)(4) of the Act provides for the Department, if requested, 
to determine during an administrative review initiated two or four 
years after the publication of the order, whether antidumping duties 
have been absorbed by a foreign producer or exporter, if the subject 
merchandise is sold in the United States through an affiliated 
importer. Because this review was initiated four years after the 
publication of the order, and Agro Dutch, Premier, and Weikfield acted 
as importer of record for some or all of their U.S. sales, we must make 
a duty absorption determination in this segment of the proceeding 
within the meaning of section 751(a)(4) of the Act.
    On September 30, 2003, the Department requested evidence from the 
respondents that unaffiliated purchasers will ultimately pay the 
antidumping duties to be assessed on entries during the review period. 
In determining whether the antidumping duties have been absorbed by the 
respondents during the POR on sales for which they were importer of 
record, we presume that the duties will be absorbed for those sales 
that have been made at less than normal value (NV). This presumption 
can be rebutted with evidence (e.g., an agreement between the 
respondent/importer and unaffiliated purchaser) that the unaffiliated 
purchaser will pay the full duty ultimately assessed on the subject 
merchandise. None of the respondents responded to the Department's 
request for information. Accordingly, based on the record, we cannot 
conclude that the unaffiliated purchaser in the United States will pay 
the ultimately assessed duty. Therefore, we preliminarily find that 
antidumping duties have been absorbed by the producer or exporter 
during the POR on those sales for which the respondent was the importer 
of record. Premier was the importer of record for all of its sales to 
the United States, while Agro Dutch was the importer of record for 79.4 
percent of its U.S. sales, and Weikfield was the importer of record for 
71.7 percent of its U.S. sales. In addition, we find duty absorption 
for both Dinesh Agro and Saptarishi Agro on all of their sales, based 
on adverse facts available, because neither company responded to the 
Department's questionnaire.

Fair Value Comparisons

    To determine whether sales of certain preserved mushrooms by the 
respondents to the United States were made at less than NV, we compared 
export price (EP), as appropriate, to the NV, as described in the 
``Export Price'' and ``Normal Value'' sections of this notice.
    Pursuant to section 777A(d)(2) of the Act, we compared the EPs of 
individual U.S. transactions to the weighted-average NV of the foreign 
like product where there were sales made in the ordinary course of 
trade, as discussed in the ``Cost of Production Analysis'' section 
below.

Product Comparisons

    In accordance with section 771(16) of the Act, we considered all 
products produced by the respondents covered by the description in the 
``Scope of the Order'' section, above, to be foreign like products for 
purposes of determining appropriate product comparisons to U.S. sales. 
We compared U.S. sales to sales made in the home market (Premier and 
Weikfield) or third country market (Agro Dutch) 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 in the comparison 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. In making the product comparisons, we matched 
foreign like products based on the physical characteristics reported by 
the respondents in the following order: preservation method, container 
type, mushroom style, weight, grade, container solution, and label 
type.
    Agro Dutch reported grade characteristics for its sales that 
departed from the criteria reported in previous reviews or by other 
respondents. Based on the explanations at pages 6 - 8 of the August 6, 
2003, supplemental questionnaire response, we are not persuaded that a 
departure from the methodology established throughout this proceeding 
is warranted as Agro Dutch failed to demonstrate any meaningful 
differences in physical characteristics to require five rather than 
three grade designations. Further, we note that some of the grade 
differences claimed by Agro Dutch are already

[[Page 10662]]

defined by the mushroom style characteristic. Therefore, we have 
reclassified the products reported by Agro Dutch and reassigned product 
control numbers (CONNUMs) according to the methodology set forth in our 
questionnaire. See Agro Dutch Preliminary Results Notes and Margin 
Calculation, Memorandum to the File dated March 1, 2004, (Agro Dutch 
Memo) for a further discussion.

Export Price

    For Agro Dutch, Premier, and Weikfield, we used EP methodology, in 
accordance with section 772(a) of the Act, because the subject 
merchandise was sold directly by the producer/exporter in India to the 
first unaffiliated purchaser in the United States prior to importation 
and CEP methodology was not otherwise indicated. We based EP on packed 
prices to unaffiliated purchasers in the United States.

Agro Dutch

    Agro Dutch reported its U.S. sales as sold on an FOB, C&F, or CIF 
basis. We made deductions from the starting price, where appropriate, 
for foreign inland freight, freight document charges, transportation 
insurance, foreign brokerage and handling, Indian export duty (CESS), 
and international freight in accordance with section 772(c)(2) of the 
Act and 19 CFR 351.402.

Premier

    Premier reported its U.S. sales as sold on an FOB Hyderabad basis. 
We made a deduction from the starting price, where appropriate, for 
brokerage and handling expenses, in accordance with section 772(c)(2) 
of the Act and 19 CFR 351.402.

Weikfield

    Weikfield reported its U.S. sales as sold on a FOB port Mumbai, 
delivered duty paid, or C&F basis. We made deductions from the starting 
price, where appropriate, for foreign inland freight, export inspection 
fees, foreign inland and marine insurance, foreign brokerage and 
handling expenses, CESS, international freight, and U.S. duty 
(including U.S. brokerage and handling expenses) in accordance with 
section 772(c)(2) of the Act and 19 CFR 351.402.

Normal Value

    In order to determine whether there was a sufficient volume of 
sales in the home market to serve as a viable basis for calculating NV, 
we compared the respondents' volume of home market sales of the foreign 
like product to the volume of U.S. sales of the subject merchandise, in 
accordance with section 773(a)(1)(C) of the Act.
    With regard to Premier and Weikfield, the aggregate volume of home 
market sales of the foreign like product was greater than five percent 
of the aggregate volume of U.S. sales of the subject merchandise. 
Therefore, we determined that the home market provides a viable basis 
for calculating NV for Premier and Weikfield.
    With regard to Agro Dutch, we determined that the home market was 
not viable because Agro Dutch's aggregate volume of home market sales 
of the foreign like product was less than five percent of its aggregate 
volume of U.S. sales of the subject merchandise. However, we determined 
that the third country market of Israel was viable, in accordance with 
section 773(a)(1)(B)(ii) of the Act. Therefore, pursuant to section 
773(a)(1)(C) of the Act, we have used third country sales as a basis 
for NV for Agro Dutch. However, in certain cases, Agro Dutch did not 
have sales of comparable merchandise to Israel that were 
contemporaneous with sales to the United States. In those instances, we 
calculated NV based on constructed value (CV) in accordance with 
section 773(e) of the Act 19 CFR 351.405.

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 
(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''), including selling functions, class of customer 
(``customer category''), and the level of selling expenses for each 
type of sale.
    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 activities reflected in the price after the deduction of 
expenses and profit under section 772(d) of the Act. See Micron 
Technology, Inc. v. United States, 243 F. 3d 1301, 1314-1315 (Fed. Cir. 
2001).
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    \3\ Where NV is based on CV, we determine the NV LOT based on 
the LOT of the sales from which we derive selling expenses and 
profit for CV, where possible.
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    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 an NV LOT is more remote from the 
factory than the CEP LOT and there is no basis for determining whether 
the difference in LOTs between NV and CEP affects price comparability 
(i.e., no LOT adjustment was practicable), the Department shall grant a 
CEP offset, as provided in section 773(a)(7)(B) of the Act. See Plate 
from South Africa at 61731. We obtained information from the 
respondents regarding the marketing stages involved in making the 
reported foreign market and U.S. sales, including a description of the 
selling activities performed for each channel of distribution. Company-
specific LOT findings are summarized below.

Agro Dutch

    Agro Dutch sold to importers/traders through one channel of 
distribution in both the U.S. and Israeli markets. As described in its 
questionnaire response, Agro Dutch performs no selling functions in the 
United States or in any of the third countries to which it sells, 
including Israel. Therefore, these sales channels are at the same LOT. 
Accordingly, all comparisons are at the same LOT for Agro Dutch and an 
adjustment pursuant to section 773(a)(7)(A) is not warranted.

Premier

    In the home market, Premier sold directly to small local 
distributors that sell to retailers or local hotels. We examined 
Premier's home market distribution system, including selling functions, 
classes of customers, and selling expenses, and determined that Premier 
offers the same support and assistance to all its home market 
customers. Accordingly, all of Premier's home market sales are made 
through the

[[Page 10663]]

same channel of distribution and constitute one LOT.
    With regard to sales to the United States, Premier made only EP 
sales to large distributors. We examined Premier's U.S. distribution 
system, including selling functions, classes of customers, and selling 
expenses, and determined that Premier offers the same support and 
assistance to all its U.S. customers. Accordingly, all of Premier's 
U.S. sales are made through the same channel of distribution and 
constitute one LOT. This EP LOT differed considerably from the home 
market LOT with respect to sales process, advertising, and inventory 
maintenance. Consequently, we could not match the EP LOT to sales at 
the same LOT in the home market. Since there was only one LOT in the 
home market, there was no pattern of consistent price differences 
between different LOTs in the home market, and we do not have any other 
information that provides an appropriate basis for determining a LOT 
adjustment. Accordingly, we have not made a LOT adjustment. See section 
773(a)(7)(A) of the Act.

Weikfield

    Weikfield's home market sales are made via two channels of 
distribution: a) direct sales to large quantity end-users, and b) sales 
to distributors and ``carrying and forwarding'' (C&F) agents, which 
either resell the merchandise to small quantity end-users, or act as 
Weikfield's agent in selling and distributing the merchandise to small 
quantity end-users. We examined Weikfield's home market distribution 
system, including selling functions, classes of customers, and selling 
expenses, and determined that Weikfield offers the same support and 
assistance to all its home market customers except with respect to 
sales promotion activities. In the Indian states of Maharashtra and 
Goa, Weikfield's affiliate WPCL includes Weikfield's preserved 
mushrooms products in its market development activities to promote 
sales.
    With respect to such functions as sales negotiation, freight and 
distribution services, and inventory maintenance, the two channels 
involve the same services performed by Weikfield. With respect to sales 
promotion activities, the level of sales promotion activities performed 
by WPCL are not so extensive as to constitute a separate LOT. 
Accordingly, we consider all of Weikfield's home market sales to 
constitute one LOT.
    With regard to sales to the United States, Weikfield made only EP 
sales to importers/traders. We examined Weikfield's U.S. distribution 
system, including selling functions, classes of customers, and selling 
expenses, and determined that Weikfield offers the same support and 
assistance to all its U.S. customers. Accordingly, all of Weikfield's 
U.S. sales are made through the same channel of distribution and 
constitute one LOT.
    We compared the EP LOT to the home market LOT and concluded that 
the selling functions performed for home market customers are 
sufficiently similar to those performed for U.S. customers because the 
same services are offered in both markets. Apart from the promotion 
activities conducted by WPCL on Weikfield's behalf in the home market 
which are not extensive, as discussed above, Weikfield does not perform 
different selling activities in either the U.S. or home markets. 
Weikfield's selling activities undertaken in both markets are limited 
to responding to infrequent product complaints and, in the home market, 
arranging for domestic freight on certain sales. Accordingly, we 
consider the EP and home market LOTs to be the same. Consequently, we 
are comparing EP sales to sales at the same LOT in the home market.

Cost of Production Analysis

    As stated in the ``Background'' section of this notice, based on 
timely allegations filed by the petitioner, the Department initiated 
investigations to determine whether Agro Dutch's third country sales 
and Premier's home market sales were made at prices less than the COP 
within the meaning of section 773(b) of the Act. See Agro Dutch COP 
Initiation Memo and Premier COP Initiation Memo.
    In addition, the Department disregarded certain sales made by 
Weikfield in the 2001-2002 administrative review, pursuant to findings 
in that review that sales failed the cost test (see Notice of Final 
Results of Antidumping Duty Administrative Review: Certain Preserved 
Mushrooms from India, 68 FR 41303 (July 11, 2003). Thus, in accordance 
with section 773(b)(2)(A)(ii) of the Act, there are reasonable grounds 
to believe or suspect that Weikfield made sales in the home market at 
prices below the cost of producing the merchandise in the current 
review period.
A. Calculation of Cost of Production
    We calculated the COP on a product-specific basis, based on the sum 
of each company's respective costs of materials and fabrication for the 
foreign like product, plus amounts for selling, general and 
administrative (SG&A) expenses, interest expense, and all expenses 
incidental to placing the foreign like product in a condition packed 
ready for shipment in accordance with section 773(b)(3) of the Act.
    We relied on the COP information submitted by Agro Dutch, Premier, 
and Weikfield, except for the following adjustments:

Premier

1. We included certain expenses which were omitted from variable 
overhead expenses, as discussed at page 16 of the Premier Verification 
Report.
2. We revised the per-kilogram fixed overhead cost to correct errors in 
allocating shared depreciation expenses, as discussed at page 17 of the 
Premier Verification Report.
3. We revised the reported labor expense to account for the 
reallocation of labor expenses to head office and sales employees, as 
discussed at page 15 of the Premier Verification Report, and to fully 
account for certain year-end adjustments to the reported cost of 
manufacture, as discussed at pages 6 and 15 of the Premier Verification 
Report.
4. We revised the financial expense ratio by excluding bank charges 
from the numerator of the calculation, as discussed at page 23 of the 
Premier Verification Report.
5. We revised the G&A expenses to account for changes in the G&A 
expense ratio due to the reallocation of a portion of labor expenses 
made at the commencement of verification, as discussed at page 22 of 
the Premier Verification Report.

Weikfield

1. We revised the reported direct material costs to include an offset 
for sales of spent compost recorded as ``other income,'' as discussed 
at page 12 of the Weikfield Verification Report.
2. We revised the reported factory overhead expenses costs to reflect 
the revised depreciation expenses presented at the commencement of the 
verification and submitted for the record in the December 2, 2003, 
submission.
3. We revised the reported G&A expense to reflect the corrected ratio 
presented at the commencement of the verification and submitted for the 
record in the December 2, 2003, submission. In addition, we added the 
depreciation costs for ``idled assets'' excluded from Weikfield's 
reporting, as discussed at page 15 of the Weikfield Verification 
Report, to the G&A expense total, consistent with our treatment of 
these expenses in the previous review (see Final Results of Antidumping 
Duty

[[Page 10664]]

Administrative Review: Certain Preserved Mushrooms From India, 68 FR 
41303 (July 11, 2003) (AR3 Final Results), Issues and Decision 
Memorandum at Comment 10). See Weikfield Preliminary Results Notes and 
Margin Calculation, Memorandum to the File dated March 1, 2004, for a 
further discussion of these adjustments.
B. Test of Home or Third Country Market Prices
    For all three companies, on a product-specific basis, we compared 
the weighted-average COP to the prices of home market or third country 
market sales of the foreign like product, as required by section 773(b) 
of the Act, in order to determine whether these sales were made at 
prices below the COP. For purposes of this comparison, we used COP 
exclusive of selling and packing expenses. The prices (inclusive of 
interest revenue, where appropriate) were exclusive of any applicable 
movement charges, discounts, direct and indirect selling expenses and 
packing expenses, revised where appropriate as discussed below under 
``Price-to-Price Comparisons.'' In determining whether to disregard 
home market sales made at prices less than their 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, (2) in 
substantial quantities; and (3) at prices which did not permit the 
recovery of all costs within a reasonable period of time.
C. Results of COP Test
    Pursuant to section 773(b)(2)(C) of the Act, where less than 20 
percent of a respondent's sales of a given product were at prices less 
than the COP, we did not disregard any below-cost sales of that product 
because we determined that the below-cost sales were not made in 
``substantial quantities.'' Where 20 percent or more of a respondent's 
sales of a given product during the POR were at prices less than the 
COP, we disregarded the below-cost sales because we determined that 
they represented ``substantial quantities'' within an extended period 
of time, and were at prices which would not permit the recovery of all 
costs within a reasonable period of time, in accordance with section 
773(b)(1) of the Act.
    The results of our cost test for Weikfield indicated that less than 
20 percent of home market sales of any given product were at prices 
below COP. We therefore retained all sales in our analysis and used 
them as the basis for determining NV.
    The results of our cost tests for Agro Dutch and Premier indicated 
that for certain products more than 20 percent of home market sales 
within an extended period of time were at prices below COP which would 
not permit the full recovery of all costs within a reasonable period of 
time. See 773(b)(2) of the Act. In accordance with section 773(b)(1) of 
the Act, we excluded these below-cost sales from our analysis and used 
the remaining sales as the basis for determining NV.

Price-to-Price Comparisons

    For Agro Dutch, Premier and Weikfield, we based NV on the price at 
which the foreign like product is first sold for consumption in the 
home market or third country market, in the usual commercial quantities 
and in the ordinary course of trade, and at the same LOT as EP, as 
defined by section 773(a)(1)(B)(i) of the Act.
    Home market or third country prices were based on ex-Hyderabad, FOB 
Indian port, or delivered prices. We reduced the starting price for 
discounts (Weikfield), credit notes (Premier), and movement expenses 
(Agro Dutch, Premier and Weikfield), and increased the starting price 
for interest revenue (Premier), where appropriate, in accordance with 
section 773(a)(6) of the Act and 19 CFR 351.401. We treated Premier's 
discounts as commissions. See Memorandum to the File dated March 1, 
2004, Preliminary Results Calculation Memorandum for Premier Mushroom 
Farms (Premier). We also reduced the starting price for packing costs 
incurred in the home market, in accordance with section 
773(a)(6)(B)(i), and increased NV to account for U.S. packing expenses 
in accordance with section 773(a)(6)(A). We made circumstance-of-sale 
adjustments for credit expenses, bank fees, and commissions, where 
appropriate, pursuant to section 773(a)(6)(C)(iii) of the Act and 19 
CFR 351.410. In addition, we made adjustments to NV, where appropriate, 
for differences in costs attributable to differences in the physical 
characteristics of the merchandise, pursuant to section 
773(a)(6)(C)(ii) of the Act and 19 CFR 351.411. For Premier and 
Weikfield, we made an adjustment to NV to account for commissions paid 
in the home market but not in the U.S. market, in accordance with 19 
CFR 351.410(e). As the offset for home market commissions, we applied 
the lesser of home market commissions or U.S. indirect selling 
expenses.
    During the POR, a number of Agro Dutch's shipments to the United 
States were rejected and returned to India. A large portion of these 
sales were resold to third country markets other than Israel. See page 
15 and Exhibit Supp. C-1 of Agro Dutch's August 6, 2003, supplemental 
questionnaire response, and Agro Dutch's December 15, 2003, letter. To 
account for these expenses, we included the expenses incurred to ship 
the rejected sales to the United States as an indirect selling expense 
for U.S. sales. In addition, we also included as an indirect selling 
expense for U.S. sales the expenses incurred to return the rejected 
sales to India, less an amount for merchandise resold to third country 
customers. See Agro Dutch Memo, for a further discussion of these 
expenses.
    We recalculated Premier's indirect selling expenses to include 
certain sales expenses incorrectly included in labor and G&A. See 
Premier Verification Report at page 26.
    Consistent with our treatment in the previous review, we have not 
considered Weikfield's commission payments to WPCL on home market and 
U.S. sales to be at arm's length, and instead have included the selling 
expenses incurred by WPCL on Weikfield's behalf as part of Weikfield's 
indirect selling expenses. See AR3 Final Results, Issues and Decision 
Memorandum at Comments 4 and 7.
    As discussed at page 22 of the Weikfield Verification Report, 
Weikfield was unable to demonstrate that it actually incurred a freight 
expense on sales made to customers near its production facility. Sales 
to these customers were shipped either by Weikfield's own trucks, or by 
local contractors for whom no payment records were maintained. 
Therefore, we did not deduct movement expenses from the starting price 
for these sales.
    We recalculated Weikfield's home market imputed credit expense 
based on the methodology used in its questionnaire response to account 
for revisions to prices, discounts and payment dates made to the sales 
data base as a result of verification findings, and to deduct freight 
expenses from the price base for sales made on a freight-collect basis, 
where the cost of freight was deducted on the invoice, but not from the 
price base used to calculate imputed credit.
    To calculate U.S. indirect selling expenses, we used the U.S. 
indirect selling expense ratio Weikfield calculated at verification 
because Weikfield did not include a U.S. indirect selling expense in 
its reported sales listing. See Weikfield Verification Report at page 
29.

[[Page 10665]]

Calculation of Constructed Value

    We calculated CV in accordance with section 773(e) of the Act, 
which indicates that CV shall be based on the sum of each respondent's 
cost of materials and fabrication for the subject merchandise, plus 
amounts for SG&A expenses, profit and U.S. packing costs. We relied on 
the submitted CV information except for the following adjustments:

Premier

    We made the same adjustments to the CV data as we made to the COP 
data, as discussed above under ``Calculation of Cost of Production.''

Weikfield

    We made the same adjustments to the CV data as we made to the COP 
data, as discussed above under ``Calculation of Cost of Production.''

Price-to-Constructed Value Comparisons

    For Agro Dutch, we based NV on CV for comparison to certain U.S. 
sales, in accordance with section 773(a)(4) of the Act. For comparisons 
to Agro Dutch's EP sales, we made circumstance-of-sale adjustments by 
deducting from CV the weighted-average direct selling expenses of Agro 
Dutch's above-cost third country sales, and adding the U.S. direct 
selling expenses, in accordance with section 773(a)(8) of the Act and 
19 CFR 351.410.

Currency Conversion

    We made currency conversions in accordance with section 773A of the 
Act based on 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 
weighted-average dumping margins for the period February 1, 2001, 
through January 31, 2002, are as follows:

------------------------------------------------------------------------
                                                               Percent
                   Manufacturer/Exporter                        margin
------------------------------------------------------------------------
Agro Dutch Foods, Ltd......................................         8.41
Dinesh Agro Products, Ltd..................................        66.24
Premier Mushroom Farms.....................................        27.30
Saptarishi Agro Industries, Ltd............................        66.24
Weikfield Agro Products, Ltd...............................        12.45
------------------------------------------------------------------------

    We will disclose the calculations used in our 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 publication. See 19 CFR 351.310(c). If 
requested, a hearing will be scheduled after determination of the 
briefing schedule.
    Interested parties who wish to request a hearing or to participate 
if one is requested, must submit a written request to the Assistant 
Secretary for Import Administration, Room B-099, within 30 days of the 
date of publication of this notice. Requests should contain: (1) the 
party's name, address and telephone number; (2) the number of 
participants; and (3) a list of issues to be discussed. See 19 CFR 
351.310(c).
    Issues raised in the hearing will be limited to those raised in the 
respective case briefs. Case briefs from interested parties and 
rebuttal briefs, limited to the issues raised in the respective case 
briefs, may be submitted in accordance with a schedule to be 
determined. Parties who submit case briefs or rebuttal briefs in this 
proceeding are requested to submit with each argument (1) a statement 
of the issue and (2) a brief summary of the argument. Parties are also 
encouraged to provide a summary of the arguments not to exceed five 
pages and a table of statutes, regulations, and cases cited.
    The Department will issue the final results of this administrative 
review, including the results of its analysis of issues raised in any 
written briefs, not later than 120 days after the date of publication 
of this notice, pursuant to section 751(a)(3)(A) of the Act.

Assessment Rates

    The Department shall determine, and CBP shall assess, antidumping 
duties on all appropriate entries, in accordance with 19 CFR 351.212. 
The Department will issue appropriate appraisement instructions for the 
companies subject to this review directly to CBP within 15 days of 
publication of the final results of this review.
    For assessment purposes, we do not have the actual entered values 
for certain sales made by Weikfield because Weikfield was not the 
importer of record on some of its U.S. sales and it did not obtain the 
entered value data for those sales. Accordingly, we intend to calculate 
importer-specific assessment rates by aggregating the dumping margins 
calculated for all of Weikfield's U.S. sales examined and dividing the 
respective amount by the total quantity of the sales examined. To 
determine whether the duty assessment rates are de minimis, in 
accordance with the requirement set forth in 19 CFR 351.106(c)(2), we 
will calculate importer-specific ad valorem ratios based on export 
prices. With respect to Agro Dutch and Premier, we intend to calculate 
importer-specific assessment rates for the subject merchandise by 
aggregating the dumping margins calculated for all of the U.S. sales 
examined and dividing this amount by the total entered value of the 
sales examined.
    The Department will issue appropriate appraisement instructions 
directly to CBP upon completion of this review. We will instruct CBP to 
assess antidumping duties on all appropriate entries covered by this 
review if any importer- or customer-specific assessment rate calculated 
in the final results of this review is above de minimis (i.e., at or 
above 0.50 percent). See 19 CFR 351.106(c)(1). The final results of 
this review shall be the basis for the assessment of antidumping duties 
on entries of merchandise covered by the final results of this review 
and for future deposits of estimated duties, where applicable.

Cash Deposit Requirements

    The following cash deposit requirements will be effective for all 
shipments of the subject merchandise entered, or withdrawn from 
warehouse, for consumption on or after the publication date of the 
final results of this administrative review, as provided by section 
751(a)(1) of the Act: (1) the cash deposit rates for the reviewed 
companies will be those 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) for previously reviewed or 
investigated companies not listed above, the cash deposit rate will 
continue to be the company-specific rate published for the most recent 
period; (3) if the exporter is not a firm covered in this review, a 
prior review, or the original LTFV investigation, but the manufacturer 
is, the cash deposit rate will be the rate established for the most 
recent period for the manufacturer of the merchandise; and (4) the cash 
deposit rate for all other manufacturers or exporters will continue to 
be 11.30 percent, the ``All Others'' rate made effective by the LTFV 
investigation (see Notice of Amendment of Final Determination of Sales 
at Less Than Fair Value and Antidumping Duty Order: Certain Preserved 
Mushrooms From India, 64 FR 8311 (February 19, 1999)). These 
requirements, when imposed, shall remain in effect until publication of 
the final results of the next administrative review.

Notification to Importers

    This notice also serves as a preliminary reminder to importers of 
their responsibility under 19 CFR

[[Page 10666]]

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.
    This administrative review and notice are published in accordance 
with sections 751(a)(1) and 777(i)(1) of the Act and 19 CFR 351.221.

    Dated: March 1, 2004.
James J. Jochum,
Assistant Secretary for Import Administration.
[FR Doc. 04-5137 Filed 3-5-04; 8:45 am]
BILLING CODE 3510-DS-S