[Federal Register Volume 72, Number 20 (Wednesday, January 31, 2007)]
[Notices]
[Pages 4483-4486]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-1575]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-533-809]


Certain Forged Stainless Steel Flanges From India; Preliminary 
Results of New Shipper Review

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.
SUMMARY: The Department of Commerce (the Department) is conducting a 
new shipper review of the antidumping duty order on certain forged 
stainless steel flanges (stainless steel flanges) from India 
manufactured by Kunj Forgings (Kunj). The period of review (POR) covers 
February 1, 2005, through January 31, 2006. We preliminarily determine 
that Kunj made sales of subject merchandise at less than normal value 
(NV) in the United States during the POR. If these preliminary results 
are adopted in the final results of this new shipper review, we will 
instruct U.S. Customs and Border Protection (CBP) to assess antidumping 
duties on entries of the subject merchandise for which the importer-
specific assessment rates are above de minimis.
    We invite interested parties to comment on these preliminary 
results. Parties who submit argument in these proceedings are requested 
to submit with the argument 1) a statement of the issues; 2) a brief 
summary of the argument; and 3) a table of authorities cited.

EFFECTIVE DATE: January 31, 2007.

FOR FURTHER INFORMATION CONTACT: Fred Baker or Robert James, AD/CVD 
Operations, Office 7, Import Administration, International Trade 
Administration, U.S. Department of Commerce, 14th Street and 
Constitution Avenue, NW, Washington, DC 20230, telephone (202) 482-2924 
or (202) 482-0649, respectively.

SUPPLEMENTARY INFORMATION:

Background

    On February 9, 1994, the Department published the antidumping duty 
order on stainless steel flanges from India. See Amended Final 
Determination and Antidumping Duty Order; Certain Forged Stainless 
Steel Flanges from India, 59 FR 5994 (February 9, 1994). On February 
28, 2006, we received requests for new shipper reviews from Kunj 
Forgings Pvt. Ltd. (Kunj), Micro Forge (India) Ltd. (Micro), Pradeep 
Metals Limited (Pradeep), and Rollwell Forge, Ltd. (Rollwell) for the 
period February 1, 2005, through January 31, 2006. We initiated the 
reviews on April 6, 2006. See Stainless Steel Flanges from India: 
Notice of Initiation of Antidumping Duty New Shipper Reviews 71 FR 
17439 (April 6, 2006). On September 29, 2006, we rescinded the reviews 
with respect to Micro, Pradeep, and Rollwell. See Certain Forged 
Stainless Steel Flanges from India: Notice of Partial Rescission of New 
Shipper Reviews, 71 FR 27468 (September 29, 2006).
    On October 3, 2006, we extended the time limit for the preliminary 
results of this new shipper review to no later than January 25, 2007. 
See Stainless Steel Flanges From India: Notice of Extension of Time 
Limit for the Preliminary Results of Antidumping Duty New Shipper 
Review, 71 FR 58372 (October 3, 2006).

Scope of the Order

    The products covered by this order are certain forged stainless 
steel flanges, both finished and not finished, generally manufactured 
to specification ASTM A-182, and made in alloys such

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

Verification

    As provided in section 782(i)(3) of the Tariff Act of 1930, as 
amended (the Tariff Act), from December 11, 2006, through December 14, 
2006, we verified information provided by Kunj. We used standard 
verification procedures, including the examination of relevant sales, 
cost, and financial records, and the selection of original 
documentation containing relevant information. Our verification results 
are outlined in the public version of the verification report, on file 
in the CRU located in room B-099 in the main Department of Commerce 
building.

Bona Fides Analysis

    Consistent with the Department's practice, we investigated the bona 
fides nature of the sales that Kunj made during the POR. Based on our 
investigation in the bona fide nature of the sales, the questionnaire 
responses Kunj submitted, and our verification thereof, as well as our 
preliminary determination that Kunj was not affiliated with any 
exporter or producer that had previously shipped subject merchandise to 
the United States, we preliminarily determine that Kunj's sales were 
made on a bona fide basis. For a complete discussion of our analysis, 
see the Department's January 25, 2007, memorandum to the file 
``Analysis of the Bona Fide Nature of Kunj's Sales During the Period of 
Review,'' on file in room B-099 of the Department of Commerce building.

Comparisons to Normal Value

    To determine whether sales of subject merchandise to the United 
States by Kunj were made at less than NV, we compared the U.S. export 
price (EP) to the NV, as described in the ``Export Price'' and ``Normal 
Value'' sections of this notice, below. In accordance with section 
777A(d)(2) of the Tariff Act, we calculated monthly weighted-average 
prices for NV and compared these to the prices of individual EP 
transactions. We found that for all U.S. sales there were no 
contemporaneous home market sales that passed the Department's twenty 
percent difference-in-merchandise (difmer) test. (For an explanation of 
our difmer analysis, see the memorandum to the file, ``Analysis of Data 
Submitted By Kunj Forgings Pvt., Ltd., in the 2005-2006 New Shipper 
Review of Stainless Steel Flanges from India,'' dated January 25, 2007 
(analysis memorandum).) Therefore, we used constructed value (CV) as 
the basis for normal value. We describe below our calculation of NV, 
CV, and EP.

Product Comparisons

    In accordance with section 771(16) of the Tariff Act, we considered 
all products described by the Scope of the Order section, above, which 
were produced and sold by Kunj in the home market, to be foreign like 
products for purposes of determining appropriate comparisons to U.S. 
sales. We made comparisons using the following five model match 
characteristics: (1) Grade; (2) Type; (3) Size; (4) Pressure rating; 
(5) Finish.

Export Price

    In accordance with section 772(a) of the Tariff Act, EP is defined 
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 
of the subject merchandise outside of the United States to an 
unaffiliated purchaser in the United States, or to an unaffiliated 
purchaser for exportation to the United States. In accordance with 
section 772(b) of the Tariff Act, constructed export price (CEP) is the 
price at which the subject merchandise is first sold (or agreed to be 
sold) in the United States before or after the date of importation by 
or for the account of the producer or exporter of such merchandise or 
by a seller affiliated with the producer or exporter, to a purchaser 
not affiliated with the producer or exporter, as adjusted under 
subsections (c) and (d). For Kunj's sales to the United States, we used 
EP in accordance with section 772(a) of the Tariff Act because its 
merchandise was sold directly to the first unaffiliated purchaser prior 
to importation, and CEP was not otherwise warranted based on the facts 
of record.
    We calculated EP based on the prices charged to the first 
unaffiliated customer in the United States. We used invoice date as the 
date of sale. We based EP on the packed FOB Indian port prices to the 
first unaffiliated purchasers in the United States. We made deductions 
for movement expenses in accordance with section 772(c)(2)(A) of the 
Tariff Act, including domestic inland freight and domestic brokerage 
and handling.

Normal Value

A. Viability

    In order to determine whether there is sufficient volume of sales 
in the home market to serve as a viable basis for calculating NV (i.e., 
the aggregate volume of home market sales of the foreign like product 
during the POR is equal to or greater than five percent of the 
aggregate volume of U.S. sales of subject merchandise during the POR), 
we compared Kunj's volume of home market sales of the foreign like 
product to the volume of U.S. sales of the subject merchandise. See 
section 773(a)(1)(C)(iii) of the Tariff Act. Based on Kunj's reported 
home market and U.S. sales quantities, we determine that the volume of 
aggregate home market sales during the POR is equal to or greater than 
five percent of the aggregate volume of U.S. sales of subject 
merchandise during the POR. Accordingly, we find that Kunj had a viable 
home market. Therefore, we based NV on home market sales to 
unaffiliated purchasers made in the usual quantities and in the 
ordinary course of trade. See the January 25, 2007, analysis memorandum 
for a further discussion of home market viability.

B. Price-to-Price Comparisons

    As indicated above, we compared U.S. sales with contemporaneous 
sales of the foreign like product in India. As noted, we considered 
stainless steel flanges identical based on the following five criteria: 
grade, type, size, pressure rating, and finish. As with EP, we used 
invoice date as the date of sale.
    In calculating the net unit price, we used the gross unit price as 
it appeared on the invoice for each sale, rather than Kunj's reported 
gross unit price which (as we first discovered at the verification) was 
net of various unexplained expenses. We also made an adjustment to 
gross unit price for Kunj's reported late delivery discounts. We

[[Page 4485]]

made adjustments for differences in packing costs between the two 
markets and for movement expenses in accordance with sections 
773(a)(6)(A) and (B) of the Tariff Act. We adjusted for differences in 
the circumstances of sale (COS) pursuant to section 773(a)(6)(C)(iii) 
of the Tariff Act and 19 CFR 351.410. We made these COS adjustments by 
deducting home market direct selling expenses and adding U.S. direct 
selling expenses. Home market direct selling expenses consisted of 
warranty expenses, bank charges, and imputed credit. U.S. direct 
selling expenses consisted of imputed credit and bank charges. Finally, 
we made adjustments, where appropriate, for physical differences 
between the U.S. models and the home market models to which it was 
being compared.

Constructed Value

    In accordance with section 773(a)(4) of the Tariff Act, we based NV 
on CV because, as indicated above under the section ``Comparisons to 
Normal Value,'' we were unable to find a contemporaneous comparison 
market match for any of the U.S. sales. We calculated CV based on the 
cost of materials and fabrication employed in producing the subject 
merchandise, SG&A, and profit, as required by 19 CFR 351.401(b)(1). In 
calculating the cost of materials, we denied Kunj's claim for an offset 
to material costs for revenue generated by sales of scrap because Kunj 
did not adequately support either the amount of the offset nor its 
means of valuing the scrap sales price. See verification report at 33. 
In accordance with section 772(e)(2)(A) of the Tariff Act, we based 
SG&A expenses and profit on the amounts incurred and realized by Kunj 
in connection with the production and sale of the foreign like product 
in the ordinary course of trade for consumption in the foreign country. 
For selling expenses, we used the weighted-average comparison market 
selling expenses. Where appropriate, we made COS adjustments to CV in 
accordance with section 773(a)(8) of the Tariff Act and 19 CFR 351.410. 
We made the COS adjustments by deducting home market direct selling 
expenses and adding U.S. direct selling expenses. The COS adjustments 
for CV were the same as those for price-to-price comparisons. See 
``Price-to-Price Comparisons'' (above).

Level of Trade

    In accordance with section 773(a)(1)(B)(i) of the Tariff Act, to 
the extent practicable, we determine NV based on sales in the home 
market at the same level of trade (LOT) as EP or CEP. The NV LOT is 
that of the starting-price sales in the home market or, when NV is 
based on CV, that of the sales from which we derive SG&A expenses and 
profit. For CEP it is the level of the constructed sale from the 
exporter to an affiliated importer after the deductions required under 
section 772(d) of the Tariff Act.
    To determine whether NV sales are at a different LOT than EP or 
CEP, we examine stages in the marketing process and selling functions 
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 a LOT adjustment under section 
773(a)(7)(A) of the Tariff Act. 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 under section 773(a)(7)(B) of 
the Tariff Act (the CEP-offset provision). See Final Determination of 
Sales at Less Than Fair Value: Certain Cut-to-Length Carbon Steel Plate 
from South Africa, 62 FR 61731, 61732-33 (November 19, 1997).
    In implementing these principles in this review, we obtained 
information from Kunj about the marketing stages involved in its U.S. 
and home market sales, including a description of its selling 
activities in the respective markets. Generally, if the reported levels 
of trade are the same in the home and U.S. markets, the functions and 
activities of the seller should be similar. Conversely, if a party 
reports differences in levels of trade the functions and activities 
should be dissimilar.
    Kunj reported one channel of distribution and one LOT in the home 
market contending that all home market sales were to end users. See 
Kunj's November 6, 2006, submission, at 18. After examining the record 
evidence provided by Kunj, we preliminarily determine that a single LOT 
exists in the home market.
    Kunj further contends it provided substantially the same level of 
customer support on its U.S. EP sales to distributors/importers as it 
provided on its home market sales to end users. This support included 
manufacturing to order, and making arrangements for freight and 
insurance. See Kunj's May 8, 2006, submission at A-13. The Department 
has determined that we will find sales to be at the same LOT when the 
selling functions performed for each customer class are sufficiently 
similar. See 19 CFR 351.412 (c)(2). We find Kunj performed virtually 
the same level of customer support services on its U.S. EP sales as it 
did on its home market sales.
    The record evidence supports a finding that in both markets and in 
all channels of distribution Kunj performs essentially the same level 
of services. Therefore, based on our analysis of the selling functions 
performed on EP sales in the United States, and its sales in the home 
market, we determine that the EP and the starting price of home market 
sales represent the same stage in the marketing process, and are thus 
at the same LOT. Accordingly, we preliminarily find that no level of 
trade adjustment is appropriate for Kunj.

Currency Conversions

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

Preliminary Results of Review

    As a result of our review we preliminarily find that a weighted-
average dumping margin of 1.52 percent exists for Kunj for the period 
February 1, 2005, through January 31, 2006.
    The Department will disclose calculations performed within five 
days of the date of publication of this notice in accordance with 19 
CFR 351.224(b). An interested party may request a hearing within 30 
days of publication. See CFR 351.310(c). Any hearing, if requested, 
will be held 37 days after the date of publication, or the first 
business day thereafter, unless the Department alters the date per 19 
CFR 351.310(d).
    Interested parties may submit case briefs or written comments no 
later than 30 days after the date of publication of these preliminary 
results of new shipper review. Rebuttal briefs and rebuttals to written 
comments, limited to issues raised in the case briefs and comments, may 
be filed no later than 5 days after the date of submission of case 
briefs and written comments. Parties who submit argument in these 
proceedings are requested to submit with the argument (1) a statement 
of the issue, (2) a brief summary of the argument, and (3) a table of 
authorities. Further, parties submitting written comments should 
provide the Department with an additional copy of the public version of 
any such comments on diskette. The Department will issue final results 
of this administrative review, including the results of our analysis of 
the issues

[[Page 4486]]

raised in any such written comments or at a hearing, within 90 days of 
publication of these preliminary results.

Assessment Rates

    Upon issuance of the final results of this review, the Department 
shall determine, and CBP shall assess, antidumping duties on all 
appropriate entries. In accordance with 19 CFR 351.212(b)(1), we have 
calculated importer-specific assessment rates based on the total amount 
of antidumping duties calculated for the examined sales made during the 
POR divided by the total quantity (in kilograms) of the examined sales. 
Upon completion of this review, where the assessment rate is above de 
minimis, we shall instruct CBP to assess duties on all entries of 
subject merchandise by that importer. The Department intends to issue 
assessment instructions to CBP fifteen days after the date of 
publication of the final results of review.

Cash Deposit Requirements

    The following cash deposit rate will be effective upon publication 
of the final results of this new shipper review for shipments of 
stainless steel flanges from India entered, or withdrawn from 
warehouse, for consumption on or after the publication date, as 
provided by section 751(a)(2)(C) of the Tariff Act. For subject 
merchandise produced and exported by Kunj, the cash deposit rate will 
be the rate established in the final results of this review, except if 
the rate is less than 0.5 percent and, therefore, de minimis, the cash 
deposit rate will be zero. This cash deposit requirement, when imposed, 
shall remain in effect until publication of the final results of the 
next administrative review.

Notification to Interested Parties

    This notice also serves as a preliminary reminder to importers of 
their responsibility under 19 CFR 351.402(f) to file a certificate 
regarding the reimbursement of antidumping duties prior to liquidation 
of the relevant entries during this review period. Failure to comply 
with this requirement could result in the Secretary's presumption that 
reimbursement of antidumping duties occurred and the subsequent 
assessment of double antidumping duties.
    We are issuing and publishing this notice in accordance with 
sections 751(a)(1) and 777(i)(1) of the Tariff Act.

    Dated: January 25, 2007.
David M. Spooner,
Assistant Secretaryfor Import Administration.
[FR Doc. E7-1575 Filed 1-30-06; 8:45 am]
BILLING CODE 3510-DS-S