[Federal Register Volume 69, Number 155 (Thursday, August 12, 2004)]
[Notices]
[Pages 49872-49877]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-18404]



[[Page 49872]]

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DEPARTMENT OF COMMERCE

International Trade Administration

[A-533-824]


Certain Polyethylene Terephthalate Film, Sheet and Strip 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 U.S. and Indian interested 
parties, the Department of Commerce (the Department) is conducting an 
administrative review of the antidumping duty order on polyethylene 
terephthalate film, sheet and strip (PET film) from India. The review 
covers one manufacturer/exporter of subject merchandise and the period 
December 21, 2001, through June 30, 2003. Based upon our analysis, the 
Department has preliminarily determined that a dumping margin exists 
for the manufacturer/exporter covered by this administrative review. 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 
of review.

EFFECTIVE DATE: August 12, 2004.

FOR FURTHER INFORMATION CONTACT: Jeff Pedersen or Drew Jackson, AD/CVD 
Enforcement, Office IV, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th and Constitution 
Avenue, NW., Washington, DC 20230; telephone: (202) 482-2769 or (202) 
482-4406, respectively.

SUPPLEMENTARY INFORMATION: 

Background

    On July 2, 2003, the Department published in the Federal Register a 
notice of ``Opportunity to Request Administrative Review'' of the 
antidumping duty order on PET film from India. See Antidumping or 
Countervailing Duty Order, Finding, or Suspended Investigation; 
Opportunity To Request Administrative Review, (68 FR 39511) (July 2, 
2003); see also Notice of Amended Final Antidumping Duty Determination 
of Sales at Less Than Fair Value and Antidumping Duty Order: 
Polyethylene Terephthalate Film, Sheet, and Strip from India, 67 FR 
44175 (July 1, 2002) (Amended Final Determination and Order). On July 
31, 2003, Garware Polyester Ltd., and Global PET films, Inc. 
(collectively, Garware), requested an administrative review of Garware. 
Garware withdrew its request for review on August 21, 2003. 
Additionally, on July 31, 2003, Dupont Teijin Films, Mitsubishi 
Polyester Film Of America, Toray Plastics (America), Inc., and SKC 
America, Inc., (collectively, the petitioners), requested an 
administrative review of Polyplex Corporation Ltd. (Polyplex). Finally, 
on July 31, 2003, Jindal Polyester Ltd. (Jindal) and Valencia Specialty 
Films (Valencia), a U.S. importer, requested an administrative review 
of Jindal.
    The Department initiated an administrative review of Jindal and 
Garware on August 19, 2003, and September 24, 2003, respectively. See 
Initiation of Antidumping and Countervailing Duty Administrative 
Reviews and Request for Revocation in Part, 68 FR 50750 (August 22, 
2003), and Initiation of Antidumping and Countervailing Duty 
Administrative Reviews, Request for Revocation in Part and Deferral of 
Administrative Review, 68 FR 56262 (September 30, 2003) (Garware was 
inadvertently not named in the August 19, 2003, initiation notice). The 
Department did not initiate an administrative review of Polyplex 
because this company was excluded from the antidumping duty order on 
PET film from India. See Letter from Thomas F. Futtner, Acting Office 
Director, to Lynn M. Fischer, counsel for the petitioners, concerning, 
Request for Administrative Review of Polyplex, dated August 6, 2003.
    On August 1, 2003, the Department issued its antidumping 
questionnaire to Jindal and Garware. Subsequently, the Department 
issued supplemental questionnaires to Jindal and Valencia. With the 
exception of Garware, which did not respond to the Department's 
questionnaire because it withdrew its request for review on August 21, 
2003, the other parties responded to the Department's questionnaires in 
a timely manner.
    On March 22, 2004, the Department extended the time limit for the 
preliminary results of this review until July 30, 2004. See Certain 
Polyethylene Terephthalate Film, Sheet and Strip from India: Extension 
of Time Limit for Preliminary Results of Antidumping Duty 
Administrative Review, 69 FR 17644 (April 5, 2004).
    The Department is conducting this administrative review in 
accordance with section 751 of the Tariff Act of 1930, as amended, (the 
Act).

Scope of the Review

    For purposes of this order, the products covered are all gauges of 
raw, pretreated, or primed PET film, whether extruded or coextruded. 
Excluded are metallized films and other finished films that have had at 
least one of their surfaces modified by the application of a 
performance-enhancing resinous or inorganic layer of more than 0.00001 
inches thick. Imports of PET film are currently classifiable in the 
Harmonized Tariff Schedule of the United States (HTSUS) under item 
number 3920.62.00. HTSUS subheadings are provided for convenience and 
customs purposes. The written description of the scope of this order is 
dispositive.

Verification

    As provided in section 782(i) of the Act, the Department verified 
the sales and cost information provided by Jindal, as well as 
information provided by Valencia, using standard verification 
procedures. Those procedures include an examination of relevant sales 
and financial records, and the selection of relevant source 
documentation as exhibits. Our verification findings are detailed in 
the following memoranda to the file from Jeffrey Pedersen and Drew 
Jackson: ``Export Price and Home Market Sales Verification Report for 
Jindal Polyester Limited (EP Verification Report); Constructed Export 
Price Sales Verification Report for Jindal Polyester Limited (CEP 
Verification Report); and Cost Verification Report for Jindal Polyester 
Limited (Cost Verification Report). The public versions of these 
memoranda are on file in the Central Records Unit (CRU), room B-099 of 
the Department's main building.

Period of Review

    The period of review (POR) is December 21, 2001, through June 30, 
2003.

Partial Rescission of Review

    19 CFR 351.213(d)(1) provides that the Department will rescind an 
administrative review, in whole or in part, if a party that requested a 
review withdraws its request within 90 days of the date of publication 
of the notice of initiation of the requested administrative review. 
Garware withdrew its request to be reviewed by the Department before 
the 90-day time period expired and no other parties requested an 
administrative review of Garware. Consequently, the Department is 
rescinding this administrative review with respect to Garware.

[[Page 49873]]

Affiliation

    During the POR, Jindal's affiliated U.S. reseller, Jindal America 
Inc. (Jindal America), ceased operations. Jindal employed Jindal 
America's president, Mr. Hotmer, to sell Jindal America's remaining 
inventory of PET film. At the same time, Jindal began selling PET film 
to Valencia, a company wholly owned by Mr. Hotmer.
    Section 771(33)(D) of the Act identifies an employer and its 
employee as affiliated persons. Jindal employed Mr. Hotmer during a 
portion of the POR. Although the word ``employee'' denotes a single 
person, the Court of International Trade has recognized that ``words 
importing the singular may {not{time}  extend and be applied to several 
persons or things * * * except where it is necessary to carry out the 
evident intent of the statute (emphasis added).'' See Ferro Union v. 
United States, 44 F. Supp. 2d 1310, 1325 (CIT, March 23, 1999) citing 
First Nat'l Bank in St. Louis v. Missouri, 263 U.S. 640, 657 44 S. Ct. 
213, 68 L. Ed. 486 (1924). Mr. Hotmer is the sole owner of, and 
performed the principal selling functions for Valencia, a small company 
that employed no more than three people during the POR. Thus, when 
Jindal engaged in business dealings with Valencia while it employed Mr. 
Hotmer, it was essentially dealing with its employee. The intent of the 
statute was to recognize such relationships. By treating Mr. Hotmer and 
Valencia as one for purposes of our affiliation analysis, we give 
effect to this intent. Therefore, the Department has preliminarily 
determined that Mr. Hotmer and Valencia were affiliated with Jindal 
during the portion of the POR that Jindal employed Mr. Hotmer. For a 
complete discussion of this issue, see the memorandum from Holly A. 
Kuga, Senior Director, Office IV, to Jeffrey A. May, Deputy Assistant 
Secretary, Group I, concerning, Affiliation and Use of Adverse Facts 
Available which is dated concurrently with this notice (Affiliation/AFA 
memorandum).

Use of Partial Facts Available

Valencia's Sales

    The Department's antidumping questionnaire requires respondents to 
identify parties with whom they are affiliated, or potentially 
affiliated (see the definition of affiliated persons in Appendix I of 
the antidumping questionnaire which restates the criteria listed in 
section 773(33) of the Act). Specifically, section A of the 
Department's antidumping questionnaire requests respondents to describe 
all of their relationships with affiliated persons and any relationship 
with a person where the respondent is unsure whether the relationship 
may result in the person being considered an affiliate. Additionally, 
the antidumping questionnaire requests information regarding sales of 
subject merchandise made by parties in the United States that are 
affiliated with the respondent (i.e., constructed export price (CEP) 
sales, see the definition of CEP sales in Appendix I of the antidumping 
questionnaire). Despite the definitions and instructions contained in 
the Department's questionnaire, in its questionnaire response, Jindal 
did not identify Valencia as an affiliate or a potential affiliate, nor 
did it report Valencia's sales of Jindal's PET film during the time 
that Jindal employed Mr. Hotmer. After examining Jindal's questionnaire 
responses and comments filed by the petitioners, the Department 
determined that additional information was needed regarding Jindal 
America, Mr. Hotmer, and one of Jindal's customers, Valencia. 
Subsequently, on November 7, 2003, December 19, 2003, and April 7, 
2004, the Department issued supplemental questionnaires to Jindal 
requesting information regarding Jindal's relationship with Jindal 
America, Mr. Hotmer, and Valencia. Jindal's responses to these 
supplemental questionnaires contained conflicting and inaccurate 
information that was not clarified until verification. Thus, the 
Department did not have the information needed to make its 
determination regarding Jindal's affiliation with Valencia until late 
in this administrative review, and the record lacks sales information 
regarding Valencia's sales of Jindal's PET film during the period that 
Jindal employed Mr. Hotmer.
    Section 776(a)(1) of the Act provides that if the necessary 
information is not on the record the Department shall use, subject to 
section 782(d) of the Act, facts otherwise available in reaching the 
applicable determination. Section 782(d) of the Act requires the 
Department to inform a party that submits a deficient response of the 
nature of the deficiency and to give the party an opportunity to 
correct the deficiency; however, the Act does permit the Department to 
eventually cease issuing supplemental questionnaires if a respondent's 
responses continue to be inadequate and deficient. Jindal's 
questionnaire responses continue to be deficient because the record 
lacks Valencia's sales information. Therefore, pursuant to section 
776(a) of the act, we are resorting to the use of partial facts 
available in determining Jindal's dumping margin.
    In selecting from among the facts otherwise available, 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 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 sections 776(b)(1), (2), (3), and (4) of the Act.
    Adverse inferences are appropriate ``to ensure that the party does 
not obtain a more favorable result by failing to cooperate than if it 
had cooperated fully.'' See Statement of Administrative Action (SAA) 
accompanying the Uruguay Round Agreements Act (URAA), H. Rep. No. 103-
316 at 870 (1994); Borden, Inc. v. United States, 4 F. Supp. 2d 1221 
(CIT 1998); Mannesmannrohren-Werke AG v. United States, 77 F. Supp. 2d 
1302 (CIT 1999). The Court of Appeals for the Federal Circuit (CAFC), 
in Nippon Steel Corporation v. United States, 337 F. 3d 1373, 1380 
(Fed. Cir. 2003), provided an explanation of the ``failure to act to 
the best of its ability'' standard, holding that the Department need 
not show intentional conduct existed on the part of the respondent, but 
merely that a ``failure to cooperate to the best of a respondent's 
ability'' existed, i.e., information was not provided ``under 
circumstances in which it is reasonable to conclude that less than full 
cooperation has been shown.'' Id.
    During the course of the instant administrative review, Jindal 
initially failed to identify its relationship with Valencia, even 
though the Department's questionnaire requested such information, 
reported conflicting information regarding the relationship, and 
reported information regarding the relationship that was not clarified 
until verification. Thus, Jindal did not cooperate by acting to the 
best of its ability to comply with the Department's requests for 
information regarding its relationship with Valencia. Therefore, the 
Department has preliminarily determined that in selecting from among 
the facts available, an adverse inference is warranted. As partial 
adverse facts available, we assigned the highest dumping margin 
calculated in any segment of this proceeding to Jindal's sales to 
Valencia during the portion of the POR that Jindal employed Mr. Hotmer. 
For a complete discussion of

[[Page 49874]]

our use of adverse facts available, see the Affiliation/AFA memorandum.
    Section 776(c) of the Act requires that the Department, to the 
extent practicable, corroborate secondary information from independent 
sources that are reasonably at its disposal. Secondary information is 
defined 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. The SAA clarifies 
that ``corroborate'' means that the Department will satisfy itself that 
the secondary information to be used has probative value. See SAA at 
870. As noted in Tapered Roller Bearings, Four Inches or Less in 
Outside Diameter, and Components Thereof, from Japan; Preliminary 
Results of Antidumping Duty Administrative Reviews and Partial 
Termination of Administrative Reviews, 61 FR 57391, 57392 (November 6, 
1996), to corroborate secondary information, the Department will, to 
the extent practicable, examine the reliability and relevance of the 
information.
    The AFA rate used in these preliminary results constitutes 
secondary information. However, unlike other types of secondary 
information, such as input costs or selling expenses, there are no 
independent sources of information from which the Department can derive 
calculated dumping margins; the only source for dumping margins is 
administrative determinations. The preliminary AFA rate was calculated 
in the investigative phase of this proceeding using verified 
information. Moreover, this rate reflects recent commercial activity of 
an Indian company that sold PET film to the United States. Therefore, 
we consider this rate to be both reliable and relevant.

U.S. Inland Freight Expense

    At verification, Jindal America was unable to substantiate the per-
unit inland freight expense reported for its U.S. sales of subject 
merchandise. See CEP Verification Report at 19. Section 776(a)(D) of 
the Act provides that the Department shall use the facts otherwise 
available in reaching the applicable determination if the information 
provided cannot be verified. Thus, for all CEP sales, we have based the 
per-unit U.S. inland freight expense on facts available. Although 
Jindal America attempted to support the reported U.S. inland freight 
expenses with available documentation, it was unable to definitively 
link invoices for U.S. inland freight to specific U.S. sales. However, 
there is no indication that Jindal or Jindal America failed to act to 
the best of their abilities in attempting to supply the documentation 
required to verify the per-unit U.S. inland freight expenses for the 
sales at issue. Therefore, for these preliminary results, we have not 
made an inference that is adverse to Jindal's interests in selecting 
from among the facts otherwise available. As partial, non-adverse facts 
available, the Department replaced the per-unit U.S. inland freight 
expense reported for CEP sales with a weighted-average, per-unit U.S. 
inland freight expense. The Department calculated this weighted-average 
freight expense by dividing Jindal America's total freight expense by 
the total quantity of PET film sold by Jindal during the POR and 
delivered to customers. For additional information on this partial 
facts available adjustment, see the Department's Calculation 
Memorandum, issued concurrently with this notice.

Normal Value Comparisons

    To determine whether the respondent's sales of PET film to the 
United States were made at less than normal value (NV), we compared the 
export price (EP) and CEP, as appropriate, to the NV, as described in 
the ``Export Price,'' ``Constructed Export Price'' and ``Normal Value'' 
sections of this notice, below. We first attempted to compare 
contemporaneous U.S. and comparison-market sales of products that are 
identical with respect to the following characteristics, listed in 
order of importance for matching purposes: grade, thickness, and 
surface quality.\1\ Where we were unable to compare sales of identical 
merchandise, we compared U.S. sales to comparison-market sales of the 
most similar merchandise based on the above characteristics. Where 
there were no appropriate sales of foreign like product to compare to a 
U.S. sale, we compared the price of the U.S. sale to constructed value 
(CV).
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    \1\ These matching criteria, which differ from those used in the 
investigative phase of the proceeding, are based on comments from 
the petitioners and the respondent as well as findings at 
verification. For additional information on these matching criteria, 
see the Department's Calculation Memorandum issued concurrently with 
this notice.
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Export Price

    Except for sales through Jindal America, the Department based U.S. 
price on EP, as defined in section 772(a) of the Act, because the 
merchandise was sold, prior to importation, to unaffiliated purchasers 
in the United States, or to an unaffiliated purchaser for exportation 
to the United States, and CEP methodology was not otherwise warranted 
based on the facts on the record. We calculated EP based on the packed, 
delivered prices charged to unaffiliated customers in the United States 
or to unaffiliated customers for exportation to 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, and marine insurance. Where appropriate (see the 
``Duty Drawback'' section below), we added to the starting price duty 
drawback received on imported materials, pursuant to section 
772(c)(1)(B) of the Act. In accordance with section 772(c)(1)(C) of the 
Act, where appropriate, we increased U.S. price by the countervailing 
duty (CVD) rate attributable to the export subsidies found in the CVD 
investigation of PET film from India (the ongoing first administrative 
review of the CVD order has not yet been completed).

Constructed Export Price

    For Jindal's sales through Jindal America, we based U.S. price on 
CEP, as defined in section 772(b) of the Act, because the merchandise 
was sold, after importation, by Jindal's U.S. affiliate, Jindal 
America, to unaffiliated purchasers in the United States.\2\ We 
calculated CEP based on delivered prices to unaffiliated customers in 
the United States. We made deductions from the starting price, where 
appropriate, for foreign and U.S. brokerage and handling, foreign and 
U.S. inland freight, international freight, marine insurance, U.S. 
duties, and direct and indirect selling expenses to the extent that 
they are associated with economic activity in the United States in 
accordance with sections 772(c)(2)(A) and 772(d)(1)(B) and (D) of the 
Act. The direct selling expenses include credit expenses. In accordance 
with section 772(d)(3) of the Act, we made a deduction for CEP profit.
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    \2\ Although certain sales through Valencia should have been 
based on CEP, Jindal failed to report these sales and thus, as noted 
above, the Department is basing the margin for these sales on 
adverse facts available.
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    For both EP and CEP, pursuant to section 772(c)(1)(C) of the Act, 
we increased U.S. price by the amount of the export subsidy found in 
the countervailing duty investigation of PET film from India. See 
Notice of Final Affirmative Countervailing Duty Determination: 
Polyethylene Terephthalate Film, Sheet, and Strip (PET Film) From 
India, 67 FR 34905 (May 16, 2002). We note that the Department is 
currently conducting a

[[Page 49875]]

countervailing duty review of PET film from India, which will be 
completed before the Department issues the final results of this 
antidumping duty review. Hence, for the final results of this 
antidumping duty administrative review, we intend to adjust U.S. price 
to reflect any export subsidy found in the concurrent countervailing 
duty review of PET film from India.

Duty Drawback

    Jindal reported that it received duty drawback under both the 
Advance License program and the Duty Entitlement Passbook Scheme 
(DEPS). The Advance License program allows Indian companies to import 
specified materials duty-free if such materials are used to produce a 
product that is exported by the company. According to information on 
the record, each advance license limits the quantity of each material 
that may be imported duty-free. No customs duties are paid on the 
imported materials; however, there is a contingent liability for the 
unpaid duties. This contingent liability is extinguished by exporting 
finished products containing the types of materials covered by the 
advance license. Under the DEPS program, Indian companies are granted a 
credit which is equivalent to 14 percent of the free-on-board (FOB) 
value of their exports. These companies then use this credit to offset 
the customs duty paid on imported materials used to manufacture 
exported products.
    Before increasing a respondent's reported U.S. sales prices by the 
amount of duty drawback, pursuant to section 772(c)(1)(B) of the Act, 
the Department's practice is to examine whether: (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).
    With regard to Jindal's experience under the Advance License 
program, the Department has preliminarily determined that import duties 
and rebates are directly linked and dependent upon one another and 
Jindal imported sufficient quantities of raw materials to account for 
the duty drawback granted. Accordingly, the Department has added an 
amount for duty drawback to EP and CEP.
    With regard to the DEPS program, the Department has preliminarily 
determined that Jindal failed to demonstrate that import duties and 
rebates are directly linked and dependent upon one another. The DEPS 
program does not require a company to link the DEPS credit granted on 
the exported merchandise to the import duties paid on the types of raw 
materials used to manufacture the exported product. In fact, at 
verification, the Department found that Jindal may apply the DEPS 
credit toward the payment of import duties on any type of material 
(other than illegal or dangerous materials listed by the GOI) or simply 
sell the DEPS credit. See the ``DEPS'' section of the EP Sales 
Verification Report. While the Department does not require a respondent 
to link a specific entry of materials on which duties were paid (or 
which was imported duty-free) to a specific export of finished product 
on which the rebate is based, it does require the respondent to 
demonstrate that the imported materials are of the same type used to 
produce the exported product. Further, the Department will only grant a 
duty drawback adjustment if the rebated import duty is on materials 
used to produce subject merchandise. Jindal made no attempt to link the 
quantity of materials imported under the DEPS program with the quantity 
of materials consumed in producing exported PET film. See the ``DEPS'' 
section of the EP Sales Verification Report. Based on the foregoing, 
the Department has not increased Jindal's reported U.S. sales prices by 
the amount of duty drawback granted under the DEPS program.

Level of Trade (LOT)

    In accordance with section 773(a)(1)(B) of the Act, to the extent 
practicable, we determine NV based on sales in the comparison market at 
the same LOT as the EP or CEP sales. The NV LOT is that of the 
starting-price sales in the comparison market or, when NV is based on 
CV, that of the sales from which we derive selling, general, and 
administrative (SG&A) expenses and profit. For EP sales, the U.S. LOT 
is also the level of the starting-price sale. For CEP sales, it is the 
level of the constructed sale from the exporter to the importer. The 
Department adjusts the CEP, pursuant to section 772(d) of the Act, 
prior to performing the LOT analysis, as articulated by the 
Department's regulations at section 351.412. See Micron Technology, 
Inc. v. United States, 243 F.3rd 1301, 1315 (Fed. Cir. 2001).
    To determine whether NV sales are at a different LOT than the EP or 
CEP sales, we examine stages in the marketing process and selling 
activities along the chain of distribution between the producer and the 
unaffiliated customer. If the comparison-market sales are at a 
different LOT, and the difference affects price comparability, as 
manifested in a pattern of consistent price differences between the 
sales on which NV is based and comparison-market sales at the LOT of 
the export transaction, we make an LOT adjustment under section 
773(a)(7)(A) of the Act. Finally, for CEP sales, if the NV level is 
more remote from the factory than the CEP level and there is no basis 
for determining whether the difference in the levels between NV and CEP 
affects price comparability, we adjust NV as provided under section 
773(a)(7)(B) of the Act (the CEP offset provision). See Notice of Final 
Determination of Sales at Less Than Fair Value: Certain Cut-to-Length 
Carbon Steel Plate from South Africa, 62 FR 61731 (November 19, 1997).
    In determining whether separate LOTs exist, we obtained information 
regarding the marketing stages for the reported home market and U.S. 
sales, including a description of the selling activities performed by 
Jindal and Jindal America for each channel of distribution. We 
generally 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. Based on our comparisons of Jindal's 
direct sales to unaffiliated customers and its sales through Jindal 
America, we have determined that the U.S. sales are at two different 
LOTs.
    Jindal reported home market sales to two categories of customers 
through two channels of distribution. However, the record indicates 
that the sales processes for all home market sales are essentially the 
same. Therefore, we have preliminarily determined that, during the POR, 
Jindal sold foreign like product in the home market at one LOT.
    The Department then compared the LOT of Jindal's home market sales 
to the LOT of its direct sales to unaffiliated U.S. customers. Based on 
this comparison, the Department has determined that Jindal's home 
market sales were made at the same LOT as its direct sales to 
unaffiliated U.S. customers. Therefore, the Department has 
preliminarily determined that no LOT adjustment for Jindal's sales to 
unaffiliated U.S. customers is warranted.
    Additionally, we have preliminarily determined that Jindal's sales 
to its unaffiliated customers in the home

[[Page 49876]]

market were not made at an LOT that is more advanced than its sales to 
its U.S. affiliate, and therefore, a CEP offset adjustment is not 
warranted.\3\ See Memorandum to the file from the Team to the File, 
concerning, Level of Trade Analysis: Jindal Polyester Limited which is 
dated concurrently with this notice.
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    \3\ Jindal stated in its response to section A of the 
Department's questionnaire that it was not requesting a CEP offset.
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Normal Value

    After testing home market viability, whether home market sales to 
affiliates were at arm's-length prices, and whether comparison-market 
sales failed the cost test, we calculated NV as noted in the 
subsections, ``Price-to-Price Comparisons'' and ``Price-to-CV 
Comparisons,'' below.

Home Market Viability

    In order to determine whether there is a sufficient volume of sales 
in the home market to serve as a viable basis for calculating NV (i.e., 
whether the aggregate volume of home market sales of the foreign like 
product is equal to or greater than five percent of the aggregate 
volume of U.S. sales), we compared the respondent'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 the respondent's aggregate volume of home market sales 
of the foreign like 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 for the respondent, and have used the 
home market as the comparison-market.

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 prices at which sales are made to parties not 
affiliated with the producer, i.e., sales at arm's-length. See section 
773(f)(2) of the Act; 19 CFR 351.403(c). Where the home market prices 
charged to an affiliated customer were, on average, found not to be 
arm's-length prices, sales to the affiliated customer were excluded 
from our analysis. Jindal reported one sale of the foreign like product 
to an affiliated end-user. To test whether this sale was made at an 
arm's-length price, the Department compared the price of this sale to 
sales of comparable merchandise to 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 prices. See Antidumping Proceedings: Affiliated 
Party Sales in the Ordinary Course of Trade, 67 FR 69186 (November 15, 
2002). We included in our NV calculations all sales to an affiliated 
party if sales to the affiliate were made at an arm's-length price.

Cost of Production Analysis

    On October 15, 2003, the petitioners alleged that, during the POR, 
Jindal made home market sales of PET film at prices below the cost of 
production (COP). After finding that the petitioners' allegation 
provided reasonable grounds to initiate a COP investigation, the 
Department, pursuant to section 773(b) of the Act, initiated a COP 
investigation of Jindal. 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, SG&A expenses, and packing costs.
B. Test of Home Market Sales Prices
    As required under section 773(b) of the Act, we compared the 
weighted-average COPs to the home market sales prices 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 product-specific basis, we compared the COP to home market sales 
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, where less than 20 
percent of Jindal'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.'' Where 20 percent or more of Jindal's sales of a given 
product 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, Jindal 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.
    Price-to-Price Comparisons. Where it was appropriate to base NV on 
prices, we used the prices at which the foreign like product was first 
sold for consumption in India, in the usual commercial quantities, in 
the ordinary course of trade, and, to the extent possible, at the same 
LOT as the comparison EP or CEP sale.
    We determined price-based NVs for Jindal as follows: we calculated 
NV based on packed, delivered and ex-factory prices to home market 
customers. Where appropriate, we increased the starting price for 
interest revenue. We made deductions from the starting price for 
foreign inland freight, where appropriate, pursuant to sections 
773(a)(6)(B)(ii) of the Act. Pursuant to section 773(a)(6)(C)(iii) of 
the Act and 19 CFR 351.410(c), we made circumstance-of-sale adjustments 
to the starting price, where appropriate, for differences in credit and 
bank expenses.
    We deducted home market packing costs from, and added U.S. packing 
costs to, the starting price, in accordance with sections 773(a)(6)(A) 
and (B) of the Act. Where appropriate, we made adjustments to NV to 
account for differences in the physical characteristics of the 
merchandise sold in the U.S. and home market, in accordance with 
section 773(a)(6)(C)(ii) of the Act and 19 CFR 351.411. In accordance 
with the Department's practice, where all contemporaneous matches to a 
U.S. sale resulted in difference-in-merchandise adjustments exceeding 
20 percent of the cost of manufacturing (COM) the U.S. product, we 
based NV on CV.
    Price-to-CV Comparisons. In accordance with section 773(a)(4) of 
the Act, we based NV on CV when we were unable to compare the U.S. sale 
to a home market sale of an identical or similar product. For each 
unique PET film product sold by the respondent in

[[Page 49877]]

the United States during the POR, we calculated a weighted-average CV 
based on the sum of the respondent's materials and fabrication costs, 
SG&A expenses, including interest expenses, packing costs, and profit. 
In accordance with section 773(e)(2)(A) of the 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 
India. We based selling expenses on weighted-average actual home market 
direct and indirect selling expenses. In calculating CV, we adjusted 
the reported costs as described in the COP section above.
    Currency Conversion. Pursuant to section 773A(a) of the Act, we 
converted amounts expressed in foreign currencies into U.S. dollar 
amounts 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 
following weighted-average dumping margin exists for the period 
December 21, 2001, through June 30, 2003:

------------------------------------------------------------------------
                                                                Margin
                   Manufacturer/exporter                      (percent)
------------------------------------------------------------------------
Jindal Polyester Ltd.......................................         9.59
------------------------------------------------------------------------

    We will disclose the calculations used in our analysis to parties 
to this proceeding within 10 days of publicly announcing the 
preliminary results of review. 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 are invited to comment on the 
preliminary results. The Department will consider case briefs filed by 
interested parties within 30 days of the date of publication of this 
notice. Also, interested parties may file rebuttal briefs, limited to 
issues raised in the case briefs. The Department will consider rebuttal 
briefs filed not later than five days after the deadline for filing 
case briefs. Parties who submit 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 ask that parties 
submitting written comments provide the Department with a copy of the 
public version of any such comments on a diskette. Unless extended, the 
Department will issue the final results of this administrative review, 
which will include the results of its analysis of issues raised in any 
written comments, 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), when possible, we 
calculated an importer-specific assessment rate for merchandise subject 
to this review. Where the importer-specific assessment rate is above de 
minimis, we will instruct CBP to assess the importer-specific rate 
uniformly on the entered customs value of all entries of subject 
merchandise made by the importer during the POR. When it was not 
possible to calculate an importer-specific assessment rate because the 
importer was not known, we calculated an exporter-specific ad valorem 
assessment rate. The Department will issue appropriate assessment 
instructions directly to CBP within 15 days of publication of the final 
results of review.

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 the instant 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 
(except that if the rate is de minimis, i.e., less than 0.5 percent, no 
cash deposit 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 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 5.71 percent, which is the 
``all others'' rate established in the LTFV investigation, adjusted for 
the export subsidy rate in the countervailing duty investigation. See 
Amended Final Determination and Order. These deposit 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 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: July 30, 2004.
James J. Jochum,
Assistant Secretary for Import Administration.
[FR Doc. 04-18404 Filed 8-11-04; 8:45 am]
BILLING CODE 3510-DS-P