[Federal Register Volume 71, Number 73 (Monday, April 17, 2006)]
[Notices]
[Pages 19706-19714]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-5690]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-533-843]


Notice of Preliminary Determination of Sales at Less Than Fair 
Value, Postponement of Final Determination, and Affirmative Preliminary 
Determination of Critical Circumstances in Part: Certain Lined Paper 
Products From India

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.
SUMMARY: The U.S. Department of Commerce (``the Department'') 
preliminarily determines that certain lined paper products from India 
(``CLPP'') are being, or are likely to be, sold in the United States at 
less than fair value, as provided in section 733(b) of the Tariff Act 
of 1930, as amended (``the Act''). Interested parties are invited to 
comment on this preliminary determination. Pursuant to requests from 
interested parties, we are postponing for 30 days the final 
determination and extending the provisional measure from a four-month 
period to not more than six months. Accordingly, we will make our final 
determination not later than 105 days after publication of the 
preliminary determination.

EFFECTIVE DATE: April 17, 2006.

FOR FURTHER INFORMATION CONTACT: Christopher Hargett, Joy Zhang, or 
James Terpstra, AD/CVD Operations, Office 3, Import Administration, 
International Trade Administration, U.S. Department of Commerce, 14th 
Street and Constitution Avenue, NW., Washington, DC 20230; telephone 
(202) 482-4161, (202) 482-1168, or (202) 482-3965, respectively.

SUPPLEMENTARY INFORMATION:

Background

    On October 6, 2005, the Department of Commerce (``the Department'') 
initiated an antidumping duty investigation of certain lined paper 
products from India. See Initiation of

[[Page 19707]]

Antidumping Duty Investigations: Certain Lined Paper Products From 
India, Indonesia, and the People's Republic of China, 70 FR 58374 
(October 6, 2005) (``Initiation Notice''). The petitioner in this 
investigation is the Association of American School Paper Suppliers and 
its individual members (MeadWestvaco Corporation; Norcom, Inc.; and Top 
Flight, Inc.) (``petitioner'').
    The Department set aside a period of time for parties to raise 
issues regarding product coverage and encouraged all parties to submit 
comments within 20 calendar days of publication of the Initiation 
Notice. See Initiation Notice, 70 FR at 58374; see also Antidumping 
Duties; Countervailing Duties; Final Rule, 62 FR 27296, 27323 (May 
19,1997) (``Final Rule'').
    On October 31, 2005, the United States International Trade 
Commission (``ITC'') preliminarily determined that there is a 
reasonable indication that imports of CLPP from the People's Republic 
of China (``China''), India and Indonesia are materially injuring the 
U.S. industry and the ITC notified the Department of its findings. See 
Certain Lined Paper School Supplies from China, India, and Indonesia, 
Investigation Nos. 701-TA-442-443 and 731-TA-1095-1097 (Preliminary), 
70 FR 62329 (October 31, 2005) (``ITC Preliminary Report'').
    On November 8, 2005, the Department issued its antidumping 
questionnaire to the following three respondents: Aero Exports 
(``Aero''), Kejriwal Paper Limited (``Kejriwal''), and Navneet 
Publications (India) Ltd. (``Navneet''), specifying that the responses 
to Section A and Sections B-D would be due on November 29 and December 
15, 2005, respectively.\1\ We received responses to Sections A-D of the 
antidumping questionnaire and issued supplementary questionnaires as 
referenced below. On November 28, 2005, petitioner alleged that 
critical circumstances existed with regard to imports from Indonesia, 
China, and India.
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    \1\ Section A of the questionnaire requests general information 
concerning a company's corporate structure and business practices, 
the merchandise under investigation that it sells, and the manner in 
which it sells that merchandise in all of its markets. Section B 
requests a complete listing of all home market sales or, if the home 
market is not viable, of sales in the most appropriate third-country 
market. Section C requests a complete listing of U.S. sales. Section 
D requests information on the cost of production of the foreign like 
product and the constructed value of the merchandise under 
investigation. Section E requests information on further 
manufacturing.
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    On December 16, 2005 the Department received section A 
questionnaire responses from Aero, Kejriwal, and Navneet. The 
Department subsequently issued a supplemental questionnaire to Aero, 
Kejriwal and Navneet. See Section A-D Supplemental Questionnaire, dated 
January 27, 2006. On February 21, 2006, the Department received the 
first supplemental questionnaire responses for Sections A-D from Aero, 
Kejriwal and Navneet. On February 23, 2006, the Department issued a 
second supplemental questionnaire for Section D to Aero. On February 
24, 2006, the Department issued a second supplemental questionnaire for 
Section D to Kejriwal and Navneet. On March 29, 2006, the Department 
received the third Supplemental D questionnaire response from Aero, 
Kejriwal and Navneet.
    In its section A response, Kejriwal stated that it had neither home 
market nor third country sales during the period of investigation 
(``POI''). See Kejriwal's Section A Questionnaire Response, dated 
December 16, 2005, at 4. Kejriwal reiterated that it did not sell 
subject merchandise in the ordinary course of trade in its home market 
during the POI. See Kejriwal Exports Section A - D Supplemental 
Questionnaire Response, dated February 21, 2006, at Exhibit SB-1. As a 
result, the Department must use constructed value (``CV'') in its 
calculation of normal value (``NV''). For a discussion of the 
Department's calculation of CV, see the ``Constructed Value'' section 
below.

Period of Investigation

    The POI is July 1, 2004, to June 30, 2005. This period corresponds 
to the four most recent fiscal quarters prior to the month of the 
filing of the petition.

Scope of Investigation

    The scope of this investigation includes certain lined paper 
products, typically school supplies,\2\ composed of or including paper 
that incorporates straight horizontal and/or vertical lines on ten or 
more paper sheets,\3\ including but not limited to such products as 
single- and multi-subject notebooks, composition books, wireless 
notebooks, looseleaf or glued filler paper, graph paper, and laboratory 
notebooks, and with the smaller dimension of the paper measuring 6 
inches to 15 inches (inclusive) and the larger dimension of the paper 
measuring 8-3/4 inches to 15 inches (inclusive). Page dimensions are 
measured size (not advertised, stated, or ``tear-out'' size), and are 
measured as they appear in the product (i.e., stitched and folded pages 
in a notebook are measured by the size of the page as it appears in the 
notebook page, not the size of the unfolded paper). However, for 
measurement purposes, pages with tapered or rounded edges shall be 
measured at their longest and widest points. Subject lined paper 
products may be loose, packaged or bound using any binding method 
(other than case bound through the inclusion of binders board, a spine 
strip, and cover wrap). Subject merchandise may or may not contain any 
combination of a front cover, a rear cover, and/or backing of any 
composition, regardless of the inclusion of images or graphics on the 
cover, backing, or paper. Subject merchandise is within the scope of 
this investigation whether or not the lined paper and/or cover are hole 
punched, drilled, perforated, and/or reinforced. Subject merchandise 
may contain accessory or informational items including but not limited 
to pockets, tabs, dividers, closure devices, index cards, stencils, 
protractors, writing implements, reference materials such as 
mathematical tables, or printed items such as sticker sheets or 
miniature calendars, if such items are physically incorporated , 
included with, or attached to the product, cover and/or backing 
thereto.
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    \2\ For purposes of this scope definition, the actual use of or 
labeling these products as school supplies or non-school supplies is 
not a defining characteristic.
    \3\ There shall be no minimum page requirement for looseleaf 
filler paper.
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    Specifically excluded from the scope of this investigation are:
 unlined copy machine paper;
 writing pads with a backing (including but not limited to 
products commonly known as ``tablets,'' ``note pads,'' ``legal pads,'' 
and ``quadrille pads''), provided that they do not have a front cover 
(whether permanent or removable). This exclusion does not apply to such 
writing pads if they consist of hole-punched or drilled filler paper;
 three-ring or multiple-ring binders, or notebook organizers 
incorporating such a ring binder provided that they do not include 
subject paper;
 index cards;
 printed books and other books that are case bound through the 
inclusion of binders board, a spine strip, and cover wrap;
 newspapers;
 pictures and photographs;
 desk and wall calendars and organizers (including but not 
limited to such products generally known as ``office planners,'' ``time 
books,'' and ``appointment books'');
 telephone logs;
 address books;

[[Page 19708]]

 columnar pads & tablets, with or without covers, primarily 
suited for the recording of written numerical business data;
 lined business or office forms, including but not limited to: 
preprinted business forms, lined invoice pads and paper, mailing and 
address labels, manifests, and shipping log books;
 lined continuous computer paper;
 boxed or packaged writing stationary (including but not 
limited to products commonly known as ``fine business paper,'' 
``parchment paper, `` and ``letterhead''), whether or not containing a 
lined header or decorative lines;
 Stenographic pads (``steno pads''), Gregg ruled,\4\ measuring 
6 inches by 9 inches;
    Also excluded from the scope of this investigation are the 
following trademarked products:
 FlyTM lined paper products: A notebook, notebook 
organizer, loose or glued note paper, with papers that are printed with 
infrared reflective inks and readable only by a FlyTM pen-
top computer. The product must bear the valid trademark 
FlyTM.\5\
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    \4\ ``Gregg ruling'' consists of a single- or double-margin 
vertical ruling line down the center of the page. For a six-inch by 
nine-inch stenographic pad, the ruling would be located 
approximately three inches from the left of the book.
    \5\ Products found to be bearing an invalidly licensed or used 
trademark are not excluded from the scope.
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 ZwipesTM: A notebook or notebook organizer made 
with a blended polyolefin writing surface as the cover and pocket 
surfaces of the notebook, suitable for writing using a specially 
developed permanent marker and erase system (known as a 
ZwipesTM pen). This system allows the marker portion to mark 
the writing surface with a permanent ink. The eraser portion of the 
marker dispenses a solvent capable of solubilizing the permanent ink 
allowing the ink to be removed. The product must bear the valid 
trademark ZwipesTM.\6\
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    \6\Products found to be bearing an invalidly licensed or used 
trademark are not excluded from the scope.
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 FiveStar[reg]TM: A notebook or notebook organizer 
bound by a continuous spiral, or helical, wire and with plastic front 
and rear covers made of a blended polyolefin plastic material joined by 
300 denier polyester, coated on the backside with PVC (poly vinyl 
chloride) coating, and extending the entire length of the spiral or 
helical wire. The polyolefin plastic covers are of specific thickness; 
front cover is .019 inches (within normal manufacturing tolerances) and 
rear cover is .028 inches (within normal manufacturing tolerances). 
Integral with the stitching that attaches the polyester spine covering, 
is captured by both ends of a 1'' wide elastic fabric band. This band 
is located 2-3/8'' from the top of the front plastic cover and provides 
pen or pencil storage. Both ends of the spiral wire are cut and then 
bent backwards to overlap with the previous coil but specifically 
outside the coil diameter but inside the polyester covering. During 
construction, the polyester covering is sewn to the front and rear 
covers face to face (outside to outside) so that when the book is 
closed, the stitching is concealed from the outside. Both free ends 
(the ends not sewn to the cover and back) are stitched with a turned 
edge construction. The flexible polyester material forms a covering 
over the spiral wire to protect it and provide a comfortable grip on 
the product. The product must bear the valid trademarks 
FiveStar[reg]AdvanceTM.\7\
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    \7\ Products found to be bearing an invalidly licensed or used 
trademark are not excluded from the scope.
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 FiveStar FlexTM: A notebook, a notebook organizer, 
or binder with plastic polyolefin front and rear covers joined by 300 
denier polyester spine cover extending the entire length of the spine 
and bound by a 3-ring plastic fixture. The polyolefin plastic covers 
are of a specific thickness; front cover is .019 inches (within normal 
manufacturing tolerances) and rear cover is .028 inches (within normal 
manufacturing tolerances). During construction, the polyester covering 
is sewn to the front cover face to face (outside to outside) so that 
when the book is closed, the stitching is concealed from the outside. 
During construction, the polyester cover is sewn to the back cover with 
the outside of the polyester spine cover to the inside back cover. Both 
free ends (the ends not sewn to the cover and back) are stitched with a 
turned edge construction. Each ring within the fixture is comprised of 
a flexible strap portion that snaps into a stationary post which forms 
a closed binding ring. The ring fixture is riveted with six metal 
rivets and sewn to the back plastic cover and is specifically 
positioned on the outside back cover. The product must bear the valid 
trademark FiveStar FlexTM.\8\
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    \8\ Products found to be bearing an invalidly licensed or used 
trademark are not excluded from the scope.
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    Merchandise subject to this investigation is typically imported 
under headings 4820.10.2050, 4810.22.5044, and 4811.90.9090 of the 
Harmonized Tariff Schedule of the United States (HTSUS).\9\ The tariff 
classifications are provided for convenience and customs purposes; 
however, the written description of the scope of the investigation is 
dispositive.
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    \9\ During the investigation additional HTS codes may be 
identified.
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Scope Comments

    In the Initiation Notice, we set aside a period of time for parties 
to raise issues regarding product coverage and encouraged all parties 
to submit comments within 20 calendar days of publication of the 
Initiation Notice. See Final Rule.
    On October 28, 2005, Continental Accessory Corporation 
(``Continental'') submitted timely scope comments in which it argued 
that the Department should issue a ruling that the scope of this 
investigation does not cover ``fashion stationery,'' a niche lined 
paper product. Continental argued that fashion stationery is 
substantially different from subject commodity-grade lined paper 
products because of differences in physical appearance, production 
methods, costs, consumer expectations, and other factors. Continental 
also argued that none of the domestic petitioners has the capability of 
manufacturing fashion stationery in the United States.
    On November 16, 2005, petitioner submitted rebuttal comments. 
Petitioner argued that what Continental refers to as ``stationery'' and 
``fashion goods'' is actually nothing more than notebooks. Contrary to 
Continental's allegation, petitioner claimed that these ``fashion'' 
notebooks are ``substantially produced'' within the United States. 
Petitioner further asserted that the language of the scope includes 
certain lined paper products regardless of the material used for a 
front or back cover, regardless of the inclusion of material on the 
front and cover, and regardless of the binding materials. Petitioner 
also argued that Continental's claim that fashion notebooks ``are not 
intended to be included with covered merchandise'' is baseless. See 
letter from petitioner entitled ``Certain Lined Paper Products from 
India, Indonesia, and the People's Republic of China: Response to Scope 
Comments,'' dated November 16, 2005, at 2. Petitioner stated that 
Continental

[[Page 19709]]

had provided no evidence to demonstrate that the purchaser views 
fashion notebooks as a higher value product. Lastly, petitioner noted 
that the ITC had already rejected Continental's claims that its fashion 
books are not within the scope of the domestic like product or should 
be treated as a separate like product. See ITC Preliminary Report.
    As further discussed in the March 20, 2006, memorandum entitled 
``Scope Exclusion Request: Continental Accessory Corporation,'' on file 
in Import Administration's Central Records Unit, Room 1870, U.S. 
Department of Commerce, 14th Street and Constitution Avenue, NW, 
Washington, DC 20230 (``CRU''), we denied Continental's request that 
its ``fashion'' notebooks be excluded from the scope of the 
investigation.

Use of Facts Otherwise Available

    For the reasons discussed below, we determine that the use of 
adverse facts available (``AFA'') is appropriate for the preliminary 
determination with respect to Aero and Navneet.
A. Use of Facts Available
    Section 776(a)(2) of the Act provides that, if an interested party 
withholds information requested by the administering authority, fails 
to provide such information by the deadlines for submission of the 
information and in the form or manner requested, subject to subsections 
(c)(1) and (e) of section 782 of the Act, significantly impedes a 
proceeding under this title, or provides such information but the 
information cannot be verified as provided in section 782(i), the 
administering authority shall use, subject to section 782(d) of the 
Act, facts otherwise available in reaching the applicable 
determination. Section 782(d) of the Act provides that, if the 
administering authority determines that a response to a request for 
information does not comply with the request, the administering 
authority shall promptly inform the responding party and provide an 
opportunity to remedy the deficient submission. Section 782(e) of the 
Act further states that the Department shall not decline to consider 
submitted information if all of the following requirements are met: (1) 
the information is submitted by the established deadline; (2) the 
information can be verified; (3) the information is not so incomplete 
that it cannot serve as a reliable basis for reaching the applicable 
determination; (4) the interested party has demonstrated that it acted 
to the best of its ability; and (5) the information can be used without 
undue difficulties.
    As discussed in detail below, the Cost of Production (``COP'') 
questionnaire responses submitted by Aero and Navneet are not useable 
for purposes of calculating accurate less-than-fair-value (``LTFV'') 
margins. The original antidumping questionnaire was issued on November 
8, 2005. Since the issuance of the initial questionnaire to Aero and 
Navneet, we have granted both parties numerous extensions up to and 
including the submission of the third supplemental questionnaire 
response which was received on March 29, 2006. Over a five-month 
period, we have carefully and repeatedly identified the numerous 
significant deficiencies and errors where we needed more complete 
information in order to understand the reported information. Throughout 
this process, there has been a consistent pattern of non-responsiveness 
and confusing, incomplete, and inconsistent information provided by 
Aero and Navneet. As a result of numerous, serious deficiencies, we are 
unable to adequately determine whether the cost information contained 
in these responses reasonably and accurately reflects the costs 
incurred by these companies to produce the subject merchandise. Without 
this information, we cannot accurately calculate LTFV margins for these 
companies.

Aero

    In accordance with section 776 of the Act, the Department 
preliminarily determines that the use of total AFA is warranted with 
respect to Aero. Throughout the course of this investigation, Aero has 
repeatedly failed to submit information and data on the record of this 
proceeding in a timely and proper manner. Generous extensions of time 
were given to Aero to respond to our section D questionnaire. The 
Department provided several opportunities for Aero to submit critical 
information and the Department extended deadlines to allow Aero the 
time to respond completely to the Department's questionnaire and 
supplemental questionnaires. Three sets of supplemental questionnaires 
were issued, repeatedly asking the same detailed questions that 
remained unanswered from the previous supplemental questionnaire. After 
the issuance of the three supplemental questionnaires, the Department 
is left with critical information absent from the record. In addition, 
questions still remain unanswered as to the accuracy and reliability of 
the reported cost information. Because Aero has withheld requested 
information, failed to provide such information by the deadlines in the 
form and manner required, impeded this investigation, and reported 
information that could not be verified, the Department may resort to 
facts otherwise available, in reaching its preliminary determination, 
pursuant to sections 776(a)(2)(A),(B),(C) and (D) of the Act. Due to 
the fact that most of the reasons regarding the use of facts available 
for Aero are considered business proprietary information, please see 
the Memorandum from Sheikh M. Hannan to Neal Halper entitled ``Use of 
Adverse Facts Available for the Preliminary Determination - Aero 
Exports,'' dated April 7, 2006, on file in the CRU.

Navneet

    In accordance with section 776 of the Act, the Department 
preliminarily determines that the use of total AFA is warranted with 
respect to Navneet. The Department identified the major deficiencies 
with Navneet's submitted cost responses early in this proceeding and 
despite the Department's repeated requests, these deficiencies were not 
rectified by Navneet. As discussed in the memorandum mentioned below, 
Navneet failed to 1) provide various reconciliation schedules (i.e., 
the overall cost reconciliation, the overall quantity reconciliation, 
and the overall purchased paper reconciliation) and explanations of 
reconciling amounts; 2) provide a consistent explanation for its 
product cost calculation methodology that demonstrates the link between 
its reported costs and its normal books and records; and 3) provide 
complete supporting documentation for the matching product control 
number (``CONNUM'') cost build-up schedules. Without this information, 
the Department is unable to determine whether Navneet accounted for all 
its production costs relating to the merchandise under investigation. 
The Department is unable to rely on Navneet's submitted costs. 
Moreover, based on the statements made by Navneet and the exhibits 
provided in its questionnaire responses, it is apparent that Navneet 
departed from the product costs recorded in its normal books and 
records when calculating its reported product costs to the Department. 
Thus, the costs the Department should be using, the per-unit costs from 
its normal books and records, are not on the record of this proceeding. 
Section 773(f)(1)(A) of the Act requires that companies normally use 
their normal books and records in reporting costs for an antidumping 
investigation. Finally, we note that Navneet failed to provide the POI 
job order worksheet reconciliation,

[[Page 19710]]

which the Department requested to determine whether Navneet relied on 
its normal books and records and that its reported costs reconciled to 
those records. Because necessary information from Navneet is not 
available on the record, the use of facts available for the preliminary 
determination is warranted pursuant to section 776(a)(1) of the Act. 
Furthermore, because Navneet has withheld requested information, failed 
to provide such information by the deadlines in the form and manner 
required, impeded this investigation, and reported information that 
could not be verified, the use of facts available for the preliminary 
determination is warranted pursuant to sections 776(a)(2)(A),(B),(C) 
and (D) of the Act. For further discussion, please refer to the 
Memorandum from Oh Ji to Neal Halper, entitled ``Use of Adverse Facts 
Available for the Preliminary Determination - Navneet Publications 
(India) Ltd.,'' dated April 7, 2006, on file in the CRU.
B. Application of Adverse Inferences for Facts Available
    In applying adverse inferences to facts otherwise available, 
section 776(b) of the Act provides that, if the administering authority 
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 from 
the administering authority, in reaching the applicable determination 
under this title, the administering authority may use an inference 
adverse to the interests of that party in selecting from among the 
facts otherwise available. See, e.g., Notice of Preliminary 
Determination of Sales at Less Than Fair Value and Postponement of 
Final Determination: Certain Circular Welded Carbon-Quality Line Pipe 
From Mexico, 69 FR 59892 (October 6, 2004); see also Notice of 
Preliminary Determination of Sales at Less Than Fair Value, 
Postponement of Final Determination, and Affirmative Preliminary 
Determination of Critical Circumstances in Part: Prestressed Concrete 
Steel Wire Strand From Mexico, 68 FR 42378 (July 17, 2003).
    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 
accompanying the Uruguay Round Agreements Act, H. Doc. No. 103-316, at 
870 (1994) (``SAA''). Furthermore, ``{a{time} ffirmative evidence of 
bad faith, or willfulness, on the part of a respondent is not required 
before the Department may make an adverse inference.'' See Final Rule.
    Despite repeated requests for information concerning Aero and 
Navneet's costs, including extensions of time granted to submit the 
necessary information, neither company provided useable cost data. The 
series of supplemental questionnaire responses submitted by Aero and 
Navneet continued to remain inadequate where certain critical 
information questioned the accuracy and reliability of the reported 
cost information as well as a lack of various reconciliation schedules 
and explanations. The respondents were on notice as to the consequences 
of failing to adequately respond to the supplemental questionnaires. 
The Department finds that Aero and Navneet have failed to cooperate to 
the best of their ability because they continued to be non-responsive, 
despite repeated requests to provide critical data regarding their 
costs. Consequently, the Department has preliminarily determined that, 
in selecting from among the facts otherwise available, an adverse 
inference is warranted. See Section 776(b) of the Act; see also Notice 
of Final Determination of Sales at Less than Fair Value: Circular 
Seamless Stainless Steel Hollow Products from Japan, 65 FR 42985 (July 
12, 2000), where the Department applied total AFA because the 
respondents failed to respond to the antidumping questionnaire.
C. Selection and Corroboration of Information Used as Facts Available
    Where the Department applies AFA because a respondent failed to 
cooperate by not acting to the best of its ability to comply with a 
request for information, section 776(b) of the Act authorizes the 
Department to rely on information derived from the petition, a final 
determination, a previous administrative review, or other information 
placed on the record. See also 19 CFR 351.308(c) and SAA at 829-831. In 
this case, because we are unable to calculate a margin based on Aero's 
and Navneet's own data and because an adverse inference is warranted, 
we have assigned to Aero and Navneet the highest individual margin 
calculated in this proceeding based on the data reported by a 
respondent in this investigation, rather than the margins alleged in 
the petition. See Memorandum to the File from the Team entitled, 
``Preliminary Determination in the Antidumping Duty Investigation of 
Certain Lined Paper Products from India: Selection of Total Adverse 
Facts-Available Rate,'' (Corroboration Memo) dated April 7, 2006.
    When using facts otherwise available, section 776(c) of the Act 
provides that, when the Department relies on secondary information 
(such as the petition), it must, to the extent practicable, corroborate 
that information from independent sources that are reasonably at its 
disposal. The SAA clarifies that ``corroborate'' means the Department 
will satisfy itself that the secondary information to be used has 
probative value. See SAA at 870. The Department's regulations state 
that independent sources used to corroborate such evidence may include, 
for example, published price lists, official import statistics and 
customs data, and information obtained from interested parties during 
the particular investigation. See 19 CFR 351.308(d) and SAA at 870. For 
the purposes of this investigation, to the extent appropriate 
information was available, we reviewed the adequacy and accuracy of the 
information in the petition during our pre-initiation analysis. See 
Office of AD/CVD Operations Initiation Checklist, dated September 29, 
2005 (``Initiation Checklist''), on file in the CRU.
    In accordance with section 776(c) of the Act and to the extent 
practicable, for this preliminary determination, we examined record 
evidence in an effort to corroborate the margins in the Initiation 
Notice, i.e., to determine whether those margins have probative value. 
We find that the estimated margins we set forth in the Initiation 
Notice do not have probative value. See Corroboration Memo. Therefore, 
in selecting AFA with respect to Aero and Navneet, we have applied the 
margin rate of 110.43 percent, the highest individual rate calculated 
in this proceeding.

Date of Sale

    Section 351.401(i) of the Department's regulations states that the 
Department will normally use the date of invoice, as recorded in the 
producer's or exporter's records kept in the ordinary course of 
business, as the date of sale. However, the Department may use a date 
other than the date of invoice if the alternative better reflects the 
date on which the material terms of sales (e.g., price and quantity) 
are established.
    Kejriwal reported the date of invoice as the date of sale for the 
U.S. market, reflecting the Department's stated preference. Kejriwal 
stated that the invoice date is the only date entered in the accounting 
records.
    The Department is preliminarily using the invoice date as the date 
of sale for U.S. sales. We intend to examine this issue at 
verification, and will incorporate our findings in our analysis for the 
final determination, if we determine that another date, other than

[[Page 19711]]

invoice date, is the appropriate date of sale.

Fair Value Comparisons

    To determine whether Kejriwal's sales of CLPP from India to the 
United States were made at LTFV, we compared the export price (``EP'') 
to NV, as described in the ``Export Price'' and ``Normal Value'' 
sections of this notice. In accordance with section 777A(d)(1)(A)(i) of 
the Act, we compared POI weighted-average EP to CV. See discussion 
below.

Export Price

    Section 772(a) of the Act defines EP as the price at which the 
subject merchandise is first sold (or agreed to be sold) before the 
date of importation by the producer or exporter outside of the United 
States to an unaffiliated purchaser for exportation to the United 
States, as adjusted under subsection (c).
    During the POI, Kejriwal made direct sales to unaffiliated 
customers in the United Sates. Therefore, we have applied the EP 
methodology, in accordance with section 772(a) of the Act, for sales 
that were produced and exported by Kejriwal from India to the first 
unaffiliated purchaser in the United States prior to importation. We 
based EP on the packed price to unaffiliated purchasers in the United 
States. In accordance with section 772(c)(2)(A) of the Act, we made 
deductions for movement expenses, where appropriate, for foreign inland 
freight from the plant to the distribution warehouse, warehousing, 
foreign inland freight from plant/warehouse to the port of exportation, 
foreign inland insurance, foreign brokerage and handling, U.S. 
brokerage and handling, international freight, and U.S. inland freight 
from port to warehouse. In addition, we deducted billing adjustments 
and discounts from EP, where appropriate.

Normal Value

A. Home Market Viability and Comparison Market Selection
    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., 
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 Kejriwal's volume of home market sales of the 
foreign like product to the volume of U.S. sales of the subject 
merchandise, in accordance with section 773(a)(1)(C) of the Act.
    Section 773(a)(1)(C)(i) of the Act applies to the Department's 
determination of NV if the foreign like product is not sold (or offered 
for sale) for consumption in the exporting country. When sales in the 
home market are not viable, section 773(a)(1)(B)(ii) of the Act 
provides that sales to a particular third country market may be 
utilized if: (1) the prices in such market are representative; (2) the 
aggregate quantity of the foreign like product sold by the producer or 
exporter in the third country market is five percent or more of the 
aggregate quantity of the subject merchandise sold in or to the United 
States; and (3) the Department does not determine that a particular 
market situation in the third country market prevents a proper 
comparison with the U.S. price.
    Kejriwal reported that it made no sales to the home market and no 
sales to a third country. See Kejriwal's Section A Response, dated 
December 16, 2005 at 4; see also Kejriwal's Section A-D questionnaire 
responses, dated February 21, 2006, at SB-1. Therefore, for Kejriwal, 
we used CV as the basis for calculating NV, in accordance with section 
773(a)(4) of the Act, for all sales.
B. Level of Trade
    Kejriwal reported sales only to unaffiliated distributors in the 
U.S. market, and no sales to either the home or third country markets. 
In the U.S. market, they reported only one level of trade. The selling 
functions, customer category, and the level of selling expenses for 
each type of sale was consistent for all distributors in the U.S. 
However, all of Kejriwal's sales are compared to CV and a level-of-
trade adjustment is not necessary.
C. Calculation of Normal Value Based on Constructed Value
    In accordance with section 773(a)(4) of the Act, we based 
Kejriwal's NV on CV. In accordance with section 773(e) of the Act, we 
calculated CV based on the sum of Kejriwal's cost of materials and 
fabrication for the foreign like product, plus amounts for selling, 
general, and administrative expenses (``SG&A''), profit, and U.S. 
packing costs. We calculated the cost of materials and fabrication 
based on the CV information provided by Kejriwal in its section D 
response. We disallowed Kejriwal's claimed offsets for duty-free 
replenishment certificates and excise duty rebated. We have 
recalculated Kejriwal's general and administrative (``G&A'') expense 
ratio based on G&A expenses for the year ending March 31, 2005, 
incurred by Kejriwal Paper Ltd. only and not those of the Kejriwal 
Group. In doing so, we have removed the imputed cost of newsprint from 
Kejriwal's reported cost of goods sold denominator. We also added 
sundry expenses to our calculation of the G&A expense ratio. We 
recalculated Kejriwal's interest expense ratio to include sundry 
expenses in the cost of goods sold denominator and have removed the 
imputed cost of newsprint from the cost of goods sold denominator. 
Because Kejriwal does not have Indian sales of the foreign like product 
or third country sales, the Department does not have comparison market 
selling expenses or profit to use in its calculations, as directed by 
section 773(e) of the Act. As an alternative, the Department has used 
as selling expenses and profit for Kejriwal, data from the March 31, 
2005, financial statements of Kanoi Paper Industries Limited 
(``Kanoi''). Kanoi sells merchandise within the same general category 
of products as the foreign like product in the Indian market. See 
Memorandum from Laurens Van Houten to Neal Halper, Director, Office of 
Accounting, Cost of Production and Constructed Value Calculation 
Adjustments for the Preliminary Determination- Kejriwal, dated April 7, 
2006 (``COP/CV Memo'').

Currency Conversion

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

All Others Rate

    Section 735(c)(5)(A) of the Act provides that, where the estimated 
weighted-average dumping margins established for all exporters and 
producers individually investigated are zero or de minimis or are 
determined entirely under section 776 of the Act, the Department may 
use any reasonable method to establish the estimated ``all others'' 
rate for exporters and producers not individually investigated. The 
``all others'' rate is derived exclusive of all de minimis margins and 
margins based entirely on facts available. Kejriwal is the only 
respondent in this investigation for which the Department has 
calculated a company-specific rate that is not based entirely on facts 
available. Therefore, for purposes of determining the ``all others'' 
rate and pursuant to section 735(c)(5)(A) of the Act, we are using the 
dumping margin calculated for Kejriwal, as referenced in the 
``Suspension of Liquidation'' section below.

[[Page 19712]]

Critical Circumstances

A. Aero, Navneet, and Kejriwal
    On November 28, 2005, petitioner requested that the Department make 
an expedited finding that critical circumstances exist with respect to 
CLPP from India. Petitioner alleged that there is a reasonable basis to 
believe or suspect that critical circumstances exist with respect to 
the subject merchandise. Petitioner based its allegation on evidence of 
retailers engaging in negotiations that would cause a surge of imports 
of subject merchandise into the United States from December 2005 
through February 2006 (in advance of the preliminary determination 
date) in order to avoid duties.
    Since this allegation was filed earlier than the deadline for the 
Department's preliminary determination, we must issue our preliminary 
critical circumstances determination not later than the preliminary 
determination. See 19 CFR 351.206(c)(2); see also Policy Bulletin 98/4 
regarding Timing of Issuance of Critical Circumstances Determinations, 
63 FR 55364 (October 15, 1998).
    Section 733(e)(1) of the Act provides that the Department will 
preliminarily determine that critical circumstances exist if there is a 
reasonable basis to believe or suspect that: (A) (i) there is a history 
of dumping and material injury by reason of dumped imports in the 
United States or elsewhere of the subject merchandise; or (ii) the 
person by whom, or for whose account, the merchandise was imported knew 
or should have known that the exporter was selling the subject 
merchandise at less than its fair value and that there was likely to be 
material injury by reason of such sales, and (B) there have been 
massive imports of the subject merchandise over a relatively short 
period.
    In determining whether the relevant statutory criteria have been 
satisfied, the Department considered: (i) the evidence presented in the 
petitioners' November 28, 2005, submission, (ii) exporter-specific 
shipment data submitted by Kejriwal on February 21, 2006, and (iii) the 
ITC Preliminary Report.
    To determine whether there is a history of injurious dumping of the 
merchandise under investigation, in accordance with section 
733(e)(1)(A)(i) of the Act, the Department normally considers evidence 
of an existing antidumping duty order on the subject merchandise in the 
United States or elsewhere to be sufficient. See Preliminary 
Determinations of Critical Circumstances: Steel Concrete Reinforcing 
Bars From Ukraine and Moldova, 65 FR 70696 (November 27, 2000). 
Petitioner makes no statement concerning a history of dumping of CLPP 
from India. Moreover, we are not aware of any antidumping order on CLPP 
from India in any other country. Therefore, the Department finds no 
history of injurious dumping of CLPP from India pursuant to section 
733(e)(1)(A)(i) of the Act.
    To determine whether the person by whom, or for whose account, the 
merchandise was imported knew or should have known that the exporter 
was selling the subject merchandise at less than its fair value, in 
accordance with section 733(e)(1)(A)(ii) of the Act, the Department 
normally considers margins of 25 percent or more for export price 
sales, or 15 percent or more for constructed export price transactions, 
sufficient to impute knowledge of dumping. See Preliminary 
Determination of Sales at Less Than Fair Value: Certain Cut-to-Length 
Carbon Steel Plate from the People's Republic of China, 62 FR 31972, 
31978 (June 11, 1997). For the reasons explained above, we have 
assigned a margin of 110.43 percent to Aero and Navneet. Based on this 
margin, we have imputed importer knowledge of dumping for Aero and 
Navneet. See Notice of Preliminary Determination of Sales at Less Than 
Fair Value and Affirmative Preliminary Determination of Critical 
Circumstances: Wax and Wax/Resin Thermal Transfer Ribbons from Japan, 
68 FR 71077 (December 22, 2003) (``TTR from Japan''). However, because 
the preliminary dumping margin for Kejriwal's EP sales is less than 25 
percent, we preliminarily determine that the knowledge criterion has 
not been met.
    In determining whether there is a reasonable basis to believe or 
suspect that an importer knew or should have known that there was 
likely to be material injury by reason of dumped imports, consistent 
with section 733(e)(1)(A)(ii) of the Act, the Department normally will 
look to the preliminary injury determination of the ITC. See Notice of 
Final Determination of Sales at Less Than Fair Value: Stainless Steel 
Sheet and Strip in Coils From Japan, 64 FR 30574, 30578 (June 8, 1999) 
(``Stainless Steel from Japan''). The ITC preliminarily found material 
injury to the domestic industry due to imports of CLPP from India, 
which are alleged to be sold in the United States at less than fair 
value and, on this basis, the Department may impute knowledge of 
likelihood of injury to these respondents. See ITC Preliminary Report. 
Thus, we determine that the knowledge criterion for ascertaining 
whether critical circumstances exist has been satisfied.
    Since Aero and Navneet have met the first prong of the critical 
circumstances test, according to section 733(e)(1)(A)(i) of the Act, we 
must examine whether imports from Aero and Navneet were massive over a 
relatively short period. Section 733(e)(1)(B) of the Act provides that 
the Department will preliminarily determine that critical circumstances 
exist if there is a reasonable basis to believe or suspect that there 
have been massive imports of the subject merchandise over a relatively 
short period.
    Section 351.206(h)(1) of the Department's regulations provides 
that, in determining whether imports of the subject merchandise have 
been ``massive,'' the Department normally will examine: (i) the volume 
and value of the imports; (ii) seasonal trends; and (iii) the share of 
domestic consumption accounted for by the imports. In addition, 19 CFR 
351.206(h)(2) provides that an increase in imports of 15 percent during 
the ``relatively short period'' of time may be considered ``massive.''
    Section 351.206(i) of the Department's regulations defines 
``relatively short period'' as normally being the period beginning on 
the date the proceeding begins (i.e., the date the petition is filed) 
and ending at least three months later. The Department's regulations 
also provide, however, that if the Department finds that importers, 
exporters, or producers had reason to believe, at some time prior to 
the beginning of the proceeding, that a proceeding was likely, the 
Department may consider a period of not less than three months from 
that earlier time.
    On February 21, 2006, Aero, Kejriwal, and Navneet filed company-
specific monthly import data for shipments of subject merchandise to 
the United States for January 2003 through January 2006. However, we 
are disregarding the information reported by Aero and Navneet because, 
as noted above, we are applying AFA to Aero and Navneet and their 
company-specific data will not be subject to verification. Therefore, 
the Department must base its determination on facts available. 
Moreover, because of Aero and Navneet's failure to cooperate to the 
best of their ability, we have made an adverse inference that there 
were massive imports from Aero and Navneet over a relatively short 
period. See TTR from Japan, 68 FR at 71077.
    In this case, the Department is unable to use information supplied 
by U.S. Customs and Border Protection (``CBP'') to corroborate whether 
massive imports occurred because the HTS numbers listed in the scope of 
the investigation

[[Page 19713]]

are basket categories that include non-subject merchandise and, thus, 
do not permit the Department to make an accurate analysis. See 
Stainless Steel from Japan, 64 FR at 30585. In addition, the SAA states 
that, ``{t{time} he fact that corroboration may not be practicable in a 
given circumstance will not prevent the agencies from applying an 
adverse inference under subsection (b).'' See SAA at 870.
    Accordingly, we preliminarily find critical circumstances exist 
with respect to Aero and Navneet. In regard to Kejriwal, we examined 
Kejriwal's reported shipments, which show that this company only 
exported subject merchandise to the United States for the period of 
August 2004 - July 2005. Kejriwal reported that it made no shipments to 
the United States subsequent to the filing date of the petition. The 
data reported by Kejriwal does not show a surge and there is no data to 
compare the seasonal trends. See Kejriwal's Section A-C questionnaire 
response, dated April 3, 2006, exhibit SA-1, (revised). Therefore, we 
preliminarily find that critical circumstances do not exist for 
Kejriwal.
B. All Others
    It is the Department's normal practice to conduct its critical 
circumstances analysis of companies in the ``all others'' group based 
on the experience of investigated companies. See Notice of Final 
Determination of Sales at Less Than Fair Value: Certain Steel Concrete 
Reinforcing Bars from Turkey, 62 FR 9737, 9741 (March 4, 1997), where 
the Department found that critical circumstances existed for the 
majority of the companies investigated and concluded that critical 
circumstances also existed for companies covered by the ``all others'' 
rate. However, the Department does not automatically extend an 
affirmative critical circumstances determination to companies covered 
by the ``all others'' rate. See Stainless Steel from Japan, 64 FR at 
30585. Instead, the Department considers the traditional critical 
circumstances criteria with respect to the companies covered by the 
``all others'' rate.
    First, in determining whether there is a reasonable basis to 
believe or suspect that an importer knew or should have known that the 
exporter was selling CLPP at less than fair value, we look to the ``all 
others'' rate. See TTR from Japan, 68 FR at 71077. The dumping margin 
for the ``all others'' category, 22.53 percent, is less than the 25 
percent threshold necessary to impute knowledge of dumping consistent 
with 733(e)(1)(A)(ii) of the Act. Second, based on the ITC's 
preliminary material injury determination, we also find that importers 
knew or should have known that there would be material injury from the 
dumped merchandise consistent with 19 CFR 351.206. See ITC Preliminary 
Report.
    Finally, with respect to massive imports, we are unable to base our 
determination on our findings for Aero and Navneet because our 
determination for Aero and Navneet was based on AFA. Consistent with 
TTR from Japan, we have not inferred adverse facts, that massive 
imports exist for ``all others'' because, unlike Aero and Navneet, the 
``all others'' companies have not failed to cooperate to the best of 
their ability in this investigation. Therefore, an adverse inference 
with respect to shipment levels by the ``all others'' companies is not 
appropriate.
    Generally, the Department's approach is to examine CBP data on 
overall imports from the country in question to see if the Department 
could ascertain whether an increase in shipments occurred within a 
relatively short period following the point at which importers had 
reason to believe that a proceeding was likely. See Notice of Final 
Determination of Sales at Less Than Fair Value: Hot-Rolled Flat-Rolled 
Carbon-Quality Steel Products from Japan, 64 FR 24329 (May 6, 1999); 
see also Notice of Final Determinations of Sales at Less Than Fair 
Value: Certain Cold-Rolled Flat-Rolled Carbon-Quality Steel Products 
From Argentina, Japan and Thailand, 65 FR 5520, 5527 (February 4, 
2000). However, we are unable to rely on information supplied by CBP 
because in this investigation the HTS numbers listed in the scope of 
the investigation are basket categories that include non-subject 
merchandise. Lacking information on whether there was a massive import 
surge for the ``all others'' category, we are unable to determine 
whether there have been massive imports of CLPP from the producers 
included in the ``all others'' category. See TTR from Japan, 68 FR at 
71077.
    Consequently, the criteria necessary for determining affirmative 
critical circumstances have not been met. Therefore, we have 
preliminarily determined that critical circumstances do not exist for 
imports of CLPP from India for companies in the ``all others'' 
category.

Verification

    As provided in section 782(i) of the Act, we intend to verify all 
information relied upon in making our final determination for Kejriwal.

Suspension of Liquidation

    In accordance with section 733(d)(2) of the Act, we are directing 
CBP to suspend liquidation of all entries of CLPP from India that are 
entered, or withdrawn from warehouse, for consumption on or after the 
date of publication of this notice in the Federal Register. 
Additionally, for Aero and Navneet, we are instructing CBP to suspend 
the liquidation of entries made on or after 90 days prior to the 
publication of this notice in accordance with section 733(e)(2) of the 
Act. We are also instructing CBP to require a cash deposit or the 
posting of a bond equal to the weighted-average dumping margin, as 
indicated in the chart below. These suspension-of-liquidation 
instructions will remain in effect until further notice.
    The weighted-average dumping margins are as follows:

------------------------------------------------------------------------
                                                       Weighted Average
                Manufacturer/Exporter                  Margin (percent)
------------------------------------------------------------------------
Aero Exports........................................              110.43
Kejriwal Paper Limited..............................               22.53
Navneet Publications (India) Ltd....................              110.43
All Others..........................................               22.53
------------------------------------------------------------------------

Disclosure

    We will disclose the calculations used in our analysis to parties 
in this proceeding in accordance with 19 CFR 351.224(b).

ITC Notification

    In accordance with section 733(f) of the Act, we have notified the 
ITC of the Department's preliminary affirmative determination. If the 
Department's final determination is affirmative, the ITC will determine 
before the later of 120 days after the date of this preliminary 
determination or 45 days after our final determination whether imports 
of CLPP from India are materially injuring, or threaten material injury 
to, the U.S. industry. Because we have postponed the deadline for our 
final determination to 105 days from the date of the publication of 
this preliminary determination, the ITC will make its final 
determination within 45 days of our final determination.

Public Comment

    Interested parties are invited to comment on the preliminary 
determination. Interested parties may submit case briefs to the 
Department no later than seven days after the date of the issuance of 
the final verification report in this proceeding. Rebuttal briefs, the 
content of which is limited to the issues raised in the case briefs, 
must

[[Page 19714]]

be filed within five days from the deadline date for the submission of 
case briefs. A list of authorities used, a table of contents, and an 
executive summary of issues should accompany any briefs submitted to 
the Department. Executive summaries should be limited to five pages 
total, including footnotes. Further, we request that parties submitting 
briefs and rebuttal briefs provide the Department with a copy of the 
public version of such briefs on diskette. In accordance with section 
774 of the Act, the Department will hold a public hearing, if 
requested, to afford interested parties an opportunity to comment on 
arguments raised in case or rebuttal briefs, provided that such a 
hearing is requested by an interested party. If a request for a hearing 
is made in this investigation, the hearing will tentatively be held two 
days after the rebuttal brief deadline date at the U.S. Department of 
Commerce, 14th Street and Constitution Avenue, NW, Washington, DC 
20230, at a time and in a room to be determined. Parties should confirm 
by telephone, the date, time, and location of the hearing 48 hours 
before the scheduled date.
    Interested parties who wish to request a hearing, or to participate 
in a hearing if one is requested, must submit a written request to the 
Assistant Secretary for Import Administration, U.S. Department of 
Commerce, Room 1870, within 30 days of the 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 the issues to 
be discussed. At the hearing, oral presentations will be limited to 
issues raised in the briefs.

Postponement of Final Determination and Extension of Provisional 
Measures

    Pursuant to section 735(a)(2) of the Act, on March 30, 2006, Aero, 
Kejriwal and Navneet requested that in the event of an affirmative 
preliminary determination in this investigation, the Department 
postpone its final determination by 30 days. At the same time, Aero, 
Kejriwal and Navneet requested that the Department extend by 30 days 
the application of the provisional measures prescribed under 19 CFR 
351.210(e)(2). In accordance with section 733(d) of the Act and 19 CFR 
351.210(b), because (1) our preliminary determination is affirmative, 
(2) the requesting exporter accounts for a significant proportion of 
exports of the subject merchandise, and (3) no compelling reasons for 
denial exist, we are granting their request and are postponing the 
final determination until no later than 105 days after the publication 
of this notice in the Federal Register. Suspension of liquidation will 
be extended accordingly.
    This determination is issued and published pursuant to sections 
733(f) and 777(i)(1) of the Act.

    Dated: April 7, 2006.
Joseph A. Spetrini,
Acting Assistant Secretaryfor Import Administration.
[FR Doc. E6-5690 Filed 4-14-06; 8:45 am]
BILLING CODE 3510-DS-S