[Federal Register Volume 72, Number 146 (Tuesday, July 31, 2007)]
[Notices]
[Pages 41706-41710]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-14781]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-533-809]


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

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.
SUMMARY: The Department of Commerce (the Department) is conducting a 
new shipper administrative review of the antidumping duty order on 
certain forged stainless steel flanges (stainless steel flanges) from 
India manufactured by Micro Forge (India) (Micro Forge). The period of 
review (POR) covers February 1, 2006, through July 31, 2006. We 
preliminarily determine to apply an adverse facts available (AFA) rate 
to Micro Forge's U.S. sale. 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; and (2) a brief summary of the argument.

EFFECTIVE DATE: July 31, 2007.

FOR FURTHER INFORMATION CONTACT: Michael J. Heaney, 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) 482-4475 
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) (Amended Final 
Determination). On August 31, 2006, the Department received requests 
for new shipper reviews for the period February 1, 2006, through July 
31, 2006, from Micro Forge and Pradeep Metals Limited (Pradeep). On 
October 6, 2006, the Department published a notice initiating the 
requested reviews. See Stainless Steel Flanges from India: Notice of 
Initiation of Antidumping Duty New Shipper Reviews, 71 FR 59081 
(October 6, 2006). On March 23, 2007, we extended the time limit for 
the preliminary results of the new shipper reviews to July 26, 2007. 
See Stainless Steel Flanges from India: Notice of Extension of Time 
Limit for Preliminary Results of Antidumping New Shipper Review, 72 FR 
13746 (March 23, 2007). On March 30, 2007, we rescinded the review with 
respect to Pradeep. See Certain Forged Steel Flanges from India: Notice 
of Partial Rescission of New Shipper Review, 72 FR 15104, (March 30, 
2007).On October 13, 2006, the Department sent standard section A, B, 
C, and D questionnaires to Micro Forge. On October 28, 2006, Micro 
Forge filed its response to section A of our questionnaire. In its 
Section A response, Micro Forge indicated that it made no sales of the 
subject merchandise in either India (its home market) or in any third-
country market. See Micro Forge October 28, 2006, Section A response at 
page 4. On November 15, 2006, Micro Forge filed its response to 
sections C and D of our questionnaire. Micro Forge indicated that it 
filed a response to Section D of our questionnaire because it had no 
sales of subject merchandise in either India or in third countries 
during the period of review.
    In our analysis of Micro Forge's response to Sections A, C, and D 
of our questionnaire, the Department discovered serious deficiencies. 
Among other things, these deficiencies included Micro Forge's failing 
to 1) adequately describe how it produced flanges, 2) detail or explain 
the services that Micro Forge received from affiliated parties relating 
to the production and sale of flanges, 3) report the basis of its 
calculation for certain adjustments to the U.S. price, and to clarify 
whether these U.S. adjustments were reported in the original currency 
of transaction, 4) explain the basis for the calculation of direct 
materials (DIRMAT), labor (DIRLAB), variable overhead (VOH), fixed 
overhead (FOH), general and administrative expenses (GNA) and interest 
(INTEX) expenses that support its CV calculation. These deficiencies 
were such that the Department was unable to calculate a margin for 
Micro Forge. Therefore we sent a supplemental section A, C, and D 
questionnaire to Micro Forge on April 4, 2007, that requested the 
additional information necessary for us to complete our analysis. We 
established a due date of April 17, 2006, for Micro Forge to respond to 
our April 4, 2007, supplemental questionnaire.
    On April 17, 2007, Micro Forge sent an e-mail to the Department 
attempting to secure a one-month extension in which to respond to our 
April 4, 2007, supplemental questionnaire. As required by 19 CFR 
351.103, Micro Forge failed to file its April 17, 2007, request with 
the Department's Central Records Unit (CRU). Moreover, Micro

[[Page 41707]]

Forge's April 17, 2007, e-mail failed to meet the format, service, and 
certification requirements stipulated at 19 CFR 351.303. These 
deficiencies notwithstanding, we placed Micro Forge's e-mail and our 
April 17, 2007, e-mail response to Micro Forge on the record of this 
proceeding. See April 16, 2007, e-mail from Mayur Joshi to Robert 
James. Also on April 17, 2007, we issued a letter to Micro Forge, 
granting Micro Forge an extension until April 27, 2007, in which to 
respond to our April 4, 2007, supplemental questionnaire. However, in 
granting the extension to Mico Forge we informed Micro Forge that in 
future filings it must adhere to our filing requirements. See April 17, 
2007, e-mail from Robert James to Mayur Joshi.
    The April 27, 2007, deadline passed with no response from Micro 
Forge. On May 7, 2007, Micro Forge submitted another e-mail in which it 
attempted to submit a response to our April 4, 2007, supplemental 
questionnaire. On May 11, 2007, Micro Forge filed with our CRU an 
undated response to our April 4, 2007, supplemental questionnaire. On 
May 14, 2007, we sent Micro Forge a letter indicating that ``your 
electronic mail submission fails to meet the filing format, service, 
and certification requirements required by 19 CFR 351.303.'' We further 
informed Micro Forge in our May 14, 2007, letter that we were 
cancelling the sales and constructed value verification of Micro Forge 
due to begin on May 21, 2007. We informed Micro Forge that we were 
cancelling this verification because of the company's ``failure to 
provide complete and timely response to the Department's original and 
supplemental questionnaires.'' On May 17, 2007, we issued a letter to 
Micro Forge in which we rejected Micro Forge's May 11, 2007, response 
as untimely. (Micro Forge filed its response two weeks past the April 
27, 2007, extended due date.) We further indicated in our May 17, 2007, 
letter that we were returning copies of Micro Forge's submission 
pursuant to section 351.302(d)(1) and (2) of the Department's 
regulations.

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 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.

Use of Adverse Facts Available

    In accordance with section 776(a)(2) of the Tariff Act of 1930, as 
amended (the Tariff Act), the Department has determined that the use of 
adverse facts available is appropriate for purposes of determining the 
preliminary dumping margin for the subject merchandise sold by Micro 
Forge. Pursuant to section 776(a)(2) of the Tariff Act the Department 
shall (with certain exceptions not applicable here) use the facts 
otherwise available in reaching applicable determinations under this 
subtitle if an interested party (A) withholds information that has been 
requested by the administrating authority; (B) fails to provide such 
information by the deadlines for submission of the information or in 
the form and manner requested, subject to subsections (c)(1) and (e) of 
section 782 of the Tariff Act; (C) significantly impedes a proceeding 
under this subtitle; or (D) provides such information but the 
information cannot be verified as provided in section 782(i). See 
Tariff Act section 776(a)(2). Moreover, section 776(b) of the Tariff 
Act provides, in relevant part, 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 or the 
Commission, the administering authority or the Commission (as the case 
may be), in reaching the applicable determination under this subtitle, 
may use an inference that is adverse to the interests of the party in 
selecting from among the facts otherwise available.
    The Department preliminarily determines that Mico Forge's 
questionnaire responses of October 28, 2006, and November 15, 2006, 
cannot serve as the basis for the calculation of Micro Forge's margin 
because we are unable to trust the reliability of the information 
conveyed in those questionnaire responses. The deficiencies identified 
in Micro Forge's October 28, 2006, section A response and in Micro 
Forge's November 15, 2006 section C and D responses are outlined in a 
July 24, 2007, Memorandum entitled ``Preliminary Results in the 
Antidumping Duty Administrative Review of Stainless Steel Flanges from 
India: Total Adverse Facts Available and Corroboration Memorandum for 
Company Rate'' (Corroboration Memorandum). These deficiencies are so 
substantial that the Department has no reliable basis upon which it can 
conduct a margin analysis. See Section 782(e) of the Tariff Act. 
Furthermore, in failing to provide information within a timely manner, 
Micro Forge has withheld information that has been requested and has 
significantly impeded this proceeding within the meaning of section 
776(a)(2)(A) and (C) of the Tariff Act. Moreover, Micro Forge failed to 
provide U.S. sales and CV information in a timely manner and this 
precluded us from proceeding with a planned verification of Micro 
Forge's sales and cost information. Therefore, we are basing Micro 
Forge's margin on the facts otherwise available, in accordance with 
sections 776(a)(2)(A) through (C) of the Tariff Act. See, e.g., Notice 
of Final Determination of Sales at Less Than Fair Value and Affirmative 
Final Determination of Critical Circumstances: Certain Orange Juice 
From Brazil, 71 FR 2183, 2184 (January 13, 2006). See also Notice of 
Final Determination of Sales of Less Than Fair Value and Final Negative 
Critical Circumstances: Carbon and Certain Alloy Steel Wire Rod from 
Brazil, 67 FR 55792, 55794-96 (August 30, 2002); Notice of Final 
Determination of Sales at Less Than Fair Value: Certain Cold-Rolled 
Flat-Rolled Carbon Quality Steel Products From Brazil, 65 FR 5554, 5567 
(February 4, 2000); Static Random Access Memory Semiconductors from 
Taiwan: Final Determination of Sales at Less than Fair Value, 63 FR 
8909, 8910 (February 23, 1998).
    Further, we find that an adverse inference is warranted pursuant to 
section 776(b) of the Department's Regulations. Micro Forge submitted 
substantially deficient respnses to the Department's original 
questionnaires. As previously noted, Micro Forge failed to (1) 
adequately describe how it produced flanges, (2) detail or explain the 
services that Micro Forge received

[[Page 41708]]

from affiliated parties relating to the production and sale of flanges, 
(3) report the basis of its calculation for certain adjustments to the 
U.S. price, and to clarify whether these U.S. adjustments were reported 
in the original currency of transaction, (4) explain the basis for the 
calculation of DIRMAT, DIRLAB, VOH, FOH, GNA, and INTEX expenses that 
support its CV calculation. In addition, Micro Forge's attempted 
response to the Department's April 4, 2007, supplemental questionnaire 
did not adhere to the filing deadline, already extended. Micro Forge 
submitted its response two weeks past the extended deadline of April 
27, 2007, and barely two weeks before the Department's scheduled 
verification. Micro Forge's belated and inadequate response to our 
April 4, 2007, letter thus left the Department inadequate time to 
analyze its response prior to conducting a verification of the 
information contained in Micro Forge's submissions. By declining to 
provide requested information in a timely fashion despite an extension, 
Micro Forge failed to cooperate to the best of its ability in that it 
did not put forth its maximum efforts to investigate and obtain the 
requested information from its records. Furthermore, despite repeated 
instructions and opportunities, Micro Forge failed to properly file its 
supplemental response with the Department. Consequently, the Department 
finds that an adverse inference is warranted in determining an 
antidumping duty margin for Micro Forge. As a result, we are basing 
Micro Forge's margin on the facts otherwise available, in accordance 
with section 776(a)(2)(A)(C) of the Act. See, e.g., Notice of Final 
Determination of Sales at Less Than Fair Value and Affirmative Final 
Determination of Critical Circumstances: Certain Orange Juice From 
Brazil, 71 FR 2183, 2184 (January 13, 2006). See also Notice of Final 
Determination of Sales of Less Than Fair Value and Final Negative 
Critical Circumstances: Carbon and Certain Alloy Steel Wire Rod from 
Brazil, 67 FR 55792, 55794-96 (Aug. 30, 2002); Notice of Final 
Determination of Sales at Less Than Fair Value: Certain Cold-Rolled 
Flat-Rolled Carbon Quality Steel Products From Brazil, 65 FR 5554, 5567 
(Feb. 4, 2000); Static Random Access Memory Semiconductors from Taiwan: 
Final Determination of Sales at Less than Fair Value, 63 FR 8909, 8910 
(Feb. 23, 1998).
    If the Department finds that an interested party ``has failed to 
cooperate by not acting to the best of its ability to comply with a 
request for information,'' the Department may use information that is 
adverse to the interests of the party as the facts otherwise available. 
See section 776(b) of the Tariff 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 
Agreement Act, H.R. Doc. No. 103-316 (1994) at 870. Under the statutory 
scheme, such adverse inferences may include reliance on information 
derived from 1) the petition; 2) a final determination in the 
investigation; 3) any previous review or determination; or 4) any other 
information placed on the record. See section 776(b) of the Tariff Act. 
The SAA authorizes the Department to consider the extent to which a 
party may benefit from its own lack of cooperation. Id. The 
Department's practice when selecting an adverse rate from among the 
possible sources of information is to ensure that the margin is 
sufficiently adverse to induce the respondents to provide the 
Department with complete and accurate information in a timely manner. 
See Notice of Final Determination of Sales of Less Than Fair Value and 
Final Negative Critical Circumstances: Carbon and Certain Alloy Steel 
Wire Rod from Brazil, 67 FR 55792, 55796 (August 30, 2002). Because 
Micro Forge currently has the ``All Others'' cash deposit rate of 
162.14 percent, the Department determines that assigning the highest 
margin from the original petition and investigation in this case, 
210.00 percent, will prevent Micro Forge from benefitting from its 
failure to cooperate with the Department's requests for information. 
See Amended Final Determination 59 FR at 5995.
    The rate selected as the adverse facts available rate of 210.00 
percent, as previously noted, originates from the final determination 
of the LTFV investigation and is based on secondary information (i.e. 
the petition). Section 776(c) of the Tariff Act requires the Department 
to corroberate secondary information, to the extent practicable. In 
order to corroberate secondary information, the Department will 
determine whether the information has probative value including whether 
the information is reliable and relevant. See 19 CFR 351.308(d).
    To assess the reliability of the petition margin, in accordance 
with section 776(c) of the Act, to the extent practicable, we examined 
the key elements of the calculations of export price and normal value 
upon which the petitioners based their margins for the petition. The 
U.S. prices in the petition were based on quotes to U.S. customers, 
most of which were obtained through market research. Petitioners 
calculation of FMV (the predecessor to NV) and U.S. price is described 
at pages 22-30 of the Petition. Those pages are attached as Exhibit 1 
of the Corroboration Memorandum. (See Petition for the Imposition of 
Antidumping Duties, December 29, 1993, (Petitition) at page 26.) 
Petitioners calculated a margin of 210 percent for a 6-inch 
150 304 weld neck flange. We were able to corroborate the U.S. 
prices in the petition, which were used as the basis of the 210.00 
percent rate (based on the highest rate in the original petition and 
antidumping duty order) by comparing these prices to publicly available 
information based on IM-145 import statistics from the U.S. 
International Trade Commission's Web site via dataweb for HTS number 
7307215000, i.e., the HTS item numbers corresponding to all of Micro 
Forge's U.S. sales. See Corroboration Memorandum at Exhibit 2. We noted 
the weighted average reported Customs unit value for HTS number 
7307215000 during the POR was $5.76/kg. Id. Moreover, the U.S. price 
per kilogram for the 6-inch 150 304 weld neck flange is $4.37. 
Based upon the foregoing, we determine that the U.S. Customs unit 
entered value of $5.76 per kilogram is proximate both to the range of 
prices outlined in the petition (which range from $4.01 to $7.76 per 
kilogram (Id. at 7-8) and to the $4.37 per kilogram price of the 6 inch 
150 304 weld neck flange (Id at 8.). We thus conclude that the 
Customs unit entered value of $5.76 continues to evince the reliability 
of the Petition. The NVs in the petition were based on actual price 
quotations obtained through market research. See Petition at 22, 
(Exhibit 1 of the Corroboration Memorandum). The Department is not 
aware of other independent sources of information that would enable it 
to corroborate the margin calculations in the petition further.
    With respect to the relevance aspect of corroboration, the 
Department will consider information reasonably at its disposal as to 
whether there are circumstances that would render a margin not 
relevant. Where circumstances indicate that the selected margin is not 
appropriate as adverse facts available, the Department will disregard 
the margin and determine an appropriate margin as in Flowers from 
Mexico, 61 FR at 6814. Further, in accordance with F. LII De Cecco Di 
Filippo Fara S. Martino S.p.A. v. United States, 216 F. 3d 1027, 1032 
(Fed. Cir.

[[Page 41709]]

June 16, 2000), we also examine whether information on the record would 
support the selected rates as reasonable facts available.
    We find that the 210.00 percent rate which we are using for these 
preliminary results is relevant as applied to Micro Forge. The 210.00 
percent margin rate has been used recently in a prior administrative 
review of this proceeding. See Certain Forged Stainless Steel Flanges 
from India: Preliminary Results of Antidumping Duty Administrative 
Review, 68 FR 11361, 11365 (March 10, 2003) (in which the Department 
applied the 210.00 percent rate to Snowdrop as the basis of adverse 
facts available). See also, Certain Forged Stainless Steel Flanges from 
India: Preliminary Results of Antidumping Duty Administrative Review, 
71 FR 11379, 11380 (March 7, 2006) (in which the Department applied the 
210.00 percent rate to Paramount as the basis of adverse facts 
available). There is no evidence on the record of this proceeding which 
suggests that Micro Forge is sufficiently different from these 
producers such that the 210 percent rate should be inapplicable to 
Micro Forge. Furthermore, as discussed previously, the Indian imports 
under the HTS number corresponding to Micro Forge's U.S. sales have 
average unit values similar to those found in the petition. Thus, we 
conclude that we have corroberated the relevance of this rate as 
applied to Micro Forge to the extent practicable.
    The implementing regulation for section 776 of the Act, codified at 
19 CFR 351.308(d), states, ``(t)he fact that corroboration may not be 
practicable in a given circumstance will not prevent the Secretary from 
applying an adverse inference as appropriate and using the secondary 
information in question.'' Additionally, the SAA at 870 states 
specifically that, where ``corroboration may not be practicable in a 
given circumstance,'' the Department may nevertheless apply an adverse 
inference. The SAA at 869 emphasizes that the Department need not prove 
that the facts available are the best alternative information. 
Therefore, based on our efforts, described above, to corroborate 
information contained in the petition and in accordance with 776(c) of 
the Tariff Act, which discusses facts available and corroboration, we 
consider the margins in the petition to be corroborated to the extent 
practicable for purposes of this preliminary determination. See Certain 
Cut-to-Length Carbon Steel Plate from Mexico: Final Results of 
Antidumping Duty Administrative Review, 64 FR 76, 84 (January 4, 1999).

Preliminary Results of Review

    As a result of our review, the Department preliminarily finds the 
following weighted-average dumping margins exist for the period 
February 1, 2006, through July 31, 2006:

------------------------------------------------------------------------
               Manufacturer / Exporter                 Margin (percent)
------------------------------------------------------------------------
Micro Forge.........................................              210.00
------------------------------------------------------------------------

Disclosure and Public Comment

    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 of the preliminary results. 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 review. Parties may also submit rebuttal briefs or written 
comments. Pursuant to 19 CFR 309(d), rebuttal briefs and rebuttals to 
written comments are limited to issues raised in the case briefs, and 
may be filed no later than 5 days after the time limit for filing the 
case briefs. 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. 
See 19 CFR 351.309(c)(2). Further, the Department requests parties 
submitting written comments to 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 raised in any such 
written comments or at a hearing, within 120 days of publication of 
these preliminary results.

Assessment Rates

    The Department shall determine, and CBP shall assess, antidumping 
duties on all appropriate entries. The Department intends to issue 
appropriate instructions for Micro Forge directly to CBP within 15 days 
of publication of the final results of this review. The final results 
of this review shall be the basis for assessment of antidumping duties 
on entries of merchandise covered by the final results of this review, 
and for future deposits of estimated duties, where applicable.

Cash Deposit Requirements

    Bonding is no longer permitted to fulfill security requirements for 
shipments from Micro Forge of certain stainless steel flanges from 
India entered, or withdrawn from warehouse, for consumption on or after 
the publication date of these final results of new shipper review.The 
following deposit requirements will be effective upon completion of the 
final results of this new shipper review for all shipments of flanges 
from India entered, or withdrawn from warehouse, for consumption on or 
after the publication date of the final results of this administrative 
review, as provided by section 751(a)(1) of the Tariff Act: 1) the cash 
deposit rate for the reviewed company will be the rate established in 
the final results of this new shipper review; if the rate for a 
particular company is zero or de minimis (i.e., less than 0.50 
percent), no cash deposit will be required for that company; 2) for 
manufacturers or exporters not covered in this review, but covered in 
the original less-than-fair-value investigation or a previous review, 
the cash deposit will continue to be the most recent rate published in 
the final determination or final results for which the manufacturer or 
exporter received a company-specific rate; 3) if the exporter is not a 
firm covered in this review, a prior review or the original 
investigation, but the manufacturer is, the cash deposit rate will be 
that established for the most recent period for that manufacturer of 
the merchandise; and 4) if neither the exporter nor the manufacturer is 
a firm covered in this or any previous reviews, the cash deposit rate 
will be 162.14 percent, the ``all others'' rate established in the LTFV 
investigation. See Amended Final Determination 59 FR at 5995. These 
deposit requirements, 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

[[Page 41710]]

751(a)(2)(B) and 777(i)(1) of the Tariff Act and 19 CFR 351.221(b)(4) 
and 19 CFR 351.214.

    Dated: July 24, 2007.
David M. Spooner,
Assistant Secretaryfor Import Administration.
[FR Doc. E7-14781 Filed 7-31-07; 8:45 am]
BILLING CODE 3510-DS-S