[Federal Register Volume 73, Number 44 (Wednesday, March 5, 2008)]
[Notices]
[Pages 11863-11866]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-4241]


-----------------------------------------------------------------------

DEPARTMENT OF COMMERCE

International Trade Administration

[A-533-809]


Certain Forged Stainless Steel Flanges From India; Preliminary 
Results of Antidumping Duty Administrative Review and Intent to Rescind 
Administrative Review in Part

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.
SUMMARY: The Department of Commerce (the Department) is conducting an 
administrative review of the antidumping duty order on certain forged 
stainless steel flanges (stainless steel flanges) from India 
manufactured by Shree Ganesh Forgings, Ltd. (Shree Ganesh) and 
Nakshatra Enterprises Pvt., Ltd. (Nakshatra). The period of review 
(POR) covers February 1, 2006, through January 31, 2007. We 
preliminarily determine that Shree Ganesh sold subject merchandise in 
the United States at less than normal value (NV) during the POR. We 
also preliminarily determine that Nakshatra's U.S. sales were not bona 
fide sales. Therefore, we intend to rescind the administrative review 
with respect to Nakshatra. We invite interested parties to comment on 
these preliminary results. Parties who submit written 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: March 5, 2008.

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) (Order). On 
February 2, 2007, the Department published the Notice of Opportunity to 
Request Administrative Review for this order covering the period 
February 1, 2006, through January 31, 2007. See Antidumping or 
Countervailing Duty Order, Finding, or Suspended Investigation; 
Opportunity to Request Administrative Review, 72 FR 5007 (February 2, 
2007). On February 28, 2007, we received requests for an administrative 
review from Nakshatra and Shree Ganesh.\1\ On

[[Page 11864]]

March 28, 2007, we initiated the administrative review. See Initiation 
of Antidumping and Countervailing Duty Administrative Reviews, 72 FR 
14516 (March 28, 2007).
---------------------------------------------------------------------------

    \1\ We also received requests for an administrative review from 
Echjay Forgings Pvt., Ltd., and Hilton Metal Forging, Ltd. However, 
both of these companies subsequently withdrew their requests for 
review in a timely manner. Therefore, we rescinded the 
administrative review with respect to these companies. See Partial 
Rescission of Antidumping Duty Administrative Review: Certain Forged 
Stainless Steel Flanges from India, 72 FR 41292 (July 27, 2007).
---------------------------------------------------------------------------

Nakshatra

    On March 28, 2007, the Department issued its initial questionnaire 
to Nakshatra. Nakshatra submitted its section A response on April 26, 
2007, and its section B and C responses on May 15, 2007. The Department 
issued a supplemental questionnaire on June 19, 2007, to which 
Nakshatra responded on July 17, 2007. We issued a second supplemental 
questionnaire on September 7, 2007, to which Nakshatra responded on 
October 3, 2007. We issued a third supplemental questionnaire to 
Nakshatra on October 25, 2007; Nakshatra filed its response on November 
19, 2007. We issued a fourth supplemental questionnaire to Nakshatra on 
December 18, 2007, to which Nakshatra responded on January 7, 2008. On 
January 11, 2008, we issued a questionnaire to Nakshatra's U.S. 
customer. We received a response from this company on January 22, 2008. 
In its response, the company stated that it did not intend to answer 
the questions we asked in the questionnaire.

Shree Ganesh

    The Department sent its questionnaire to Shree Ganesh on March 28, 
2007. Shree Ganesh submitted its response to the section A 
questionnaire on April 17, 2007. (The Department later sent this 
submission back to Shree Ganesh for rebracketing. Shree Ganesh 
submitted the rebracketed version on May 21, 2007.) It submitted its 
responses to sections B and C on May 1, 2007. The Department issued a 
supplemental section A, B, and C questionnaire to Shree Ganesh on June 
8, 2007. Shree Ganesh submitted its response to that supplemental 
questionnaire on July 5, 2007. (The Department later returned this 
submission to Shree Ganesh for rebracketing. Shree Ganesh submitted the 
revised version on November 13, 2007.) On August 16, 2007, the 
Department issued a second supplemental questionnaire to Shree Ganesh, 
to which Shree Ganesh submitted its response on September 7, 2007. On 
September 25, 2007, the Department issued a third supplemental 
questionnaire to Shree Ganesh, to which it responded on October 9, 
2007.

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 
subheadings are 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.

Date of Sale

    The preamble to the Department's regulations expresses a strong 
preference for the Department to choose a single date of sale across 
the full POR. See Antidumping Duties; Countervailing Duties: Final 
Rule, 62 FR 27296, 27349 (May 19, 1997). The Department normally uses 
the date of invoice as the date of sale. See 19 CFR 351.401(i); see 
also Allied Tube and Conduit Corp. v. United States, 132 F. Supp. 2d 
1087 (CIT 2001). However, the Department may use a date other than the 
date of invoice if that date best reflects the date on which the 
exporter or producer establishes the material terms of sale. See 19 CFR 
351.401(i). For these preliminary results, the Department used the 
purchase order date as the appropriate date of sale for Shree Ganesh in 
both the U.S. and home markets because information on the record 
indicates that no changes occurred with respect to the material terms 
of sale, such as price or quantity following Shree Ganesh's receipt of 
the purchase order. See Shree Ganesh's May 21, 2007, submission at 16 
and its November 13, 2007, submission at 14. Thus, the purchase order 
date represents the earliest date upon which the material terms of sale 
are set. We made no date of sale determination with respect to 
Nakshatra because we have preliminarily determined to rescind the 
review with respect to Nakshatra. See Intent to Rescind (below).

Normal Value Comparisons

    To determine whether Shree Ganesh's sales of subject merchandise to 
the United States were made at less than NV, we compared export price 
(EP) to the NV (as described in the ``Export Price and Constructed 
Export Price'' and ``Normal Value'' sections of this notice, below). In 
accordance with section 777A(d)(2) of the Tariff Act of 1930, as 
amended (the Tariff Act), the Department calculated monthly weighted-
average prices for NV and compared these to the prices of individual EP 
transactions.

Product Comparisons

    In accordance with section 771(16) of the Tariff Act, the 
Department considered all products described by the ``Scope of the 
Order'' section, above, produced and sold by Shree Ganesh in the home 
market to be foreign like products for purposes of determining 
appropriate comparisons to U.S. sales. We compared U.S. sales to sales 
made in the home market within the contemporaneous window period 
pursuant to 19 CFR 351.414(e)(1) based on the following product 
characteristics in the following order: Grade; type; size; pressure 
rating; and finish. The Department used a 20 percent difference-in-
merchandise (difmer) cost deviation cap as the maximum difference in 
cost allowable for similar merchandise, which we calculated as the 
absolute value of the difference between the U.S. and comparison market 
variable costs of manufacturing divided by the total cost of 
manufacturing of the U.S. product. See 19 CFR 351.411. Variable cost of 
manufacture consisted of the sum of material costs, direct labor, and 
variable overhead. Total cost of manufacture consisted of variable cost 
of manufacture plus fixed overhead.
    Where there were no sales of identical merchandise in the home 
market to compare to U.S. sales, we compared U.S. sales to the next 
most similar foreign like product on the basis of the characteristics 
and reporting instructions listed in the Department's questionnaire. 
Where there were no sales of identical or similar merchandise in its 
home market suitable for comparing to U.S. sales, the Department 
compared these U.S. sales to constructed value (CV), pursuant to 
sections 773(a)(4) and 773(e) of the Tariff Act.

[[Page 11865]]

Export Price and Constructed 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, as adjusted under 
section 772(c) of the Tariff Act. 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 Shree Ganesh'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 the record. We based EP on the packed, CIF U.S. port of destination 
prices to the first unaffiliated purchaser in the United States. We 
made deductions, where applicable, for movement expenses in accordance 
with section 772(c)(2)(A) of the Tariff Act, including domestic inland 
freight, domestic brokerage and handling, ocean freight, and marine 
insurance.

Normal Value

A. Selection of Comparison Market

    In determining NV, the statute requires the Department to determine 
the price at which the foreign like product is first sold (or, in the 
absence of a sale, offered for sale) for consumption in the exporting 
country in the usual commercial quantities and in the ordinary course 
of trade and, to the extent practicable, at the same level of trade as 
the EP or CEP. See 773(a)(1)(B) of the Tariff Act. Furthermore, the 
Department determines the export market to be viable if it is satisfied 
that the sales of foreign like product in that country were of 
sufficient quantity to form the basis of NV. See 773(a)(1)(B) of the 
Tariff Act; see also 19 CFR 351.404(b)(1) and (2). The Department 
defines a viable market as one of ``sufficient quantity'' if the 
aggregate volume of the sales of foreign like product in that market 
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. 
See 773(a)(1)(B) of the Tariff Act. Therefore, in order to determine 
whether there was a sufficient quantity of sales in Shree Ganesh's home 
market to serve as a viable basis for calculating NV, the Department 
compared the volume of Shree Ganesh's home market sales of the foreign 
like product to the volume of its U.S. sales of the subject 
merchandise. Based on its comparison of shipment volumes, the 
Department found that Shree Ganesh had a viable home market and, 
therefore, based NV for Shree Ganesh on home market sales to 
unaffiliated purchasers made in the usual quantities and in the 
ordinary course of trade. See 773(a)(1)(B) of the Tariff Act.

B. Price-to-Price Comparisons

    The statute requires the Department to determine whether subject 
merchandise is being, or is likely to be, sold at less than fair value 
by making a fair comparison between the EP or CEP and NV under section 
773 of the Tariff Act. Where the Department found contemporaneous 
matches of either identical or similar merchandise that passed the 20 
percent difmer test, it based the margin on such matches, making 
adjustments for differences in packing costs between the two markets in 
accordance with section 773(a)(6)(A) of the Tariff Act, and where 
appropriate, for differences in merchandise between the products 
compared. We made no adjustments to NV for movement expenses because 
all of Shree Ganesh's home market sales were made on an ex-works basis. 
See Shree Ganesh's May 1, 2007, section B response at 8. The Department 
also adjusted NV for imputed credit to account 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.

C. Constructed Value

    In accordance with section 773(a)(4) of the Tariff Act, the 
Department bases NV on CV if it is unable to find a contemporaneous 
comparison market match for the U.S. sale. Section 773(e) of the Tariff 
Act provides that when the Department bases NV on CV, we calculate CV 
as the sum of the cost of materials and fabrication employed in 
producing the subject merchandise, SG&A, packing, and profit. In 
accordance with section 772(e)(2)(A) of the Tariff Act, the Department 
bases SG&A expenses and profit on the amounts incurred and realized by 
the respondent in connection with the production and sale of the 
foreign like product in the ordinary course of trade for consumption in 
the foreign country. For selling expenses, the Department uses the 
weighted-average comparison market selling expenses. Where appropriate, 
the Department makes COS adjustments to CV in accordance with section 
773(a)(8) of the Tariff Act and 19 CFR 351.410. For comparisons to EP, 
the Department makes COS adjustments by deducting home market direct 
selling expenses and adding U.S. direct selling expenses. For purposes 
of these preliminary results, we based NV for some U.S. sales on CV.

D. Level of Trade

    In accordance with section 773(a)(1)(B)(i) of the Tariff Act, to 
the extent practicable, the Department determines NV based on sales in 
the comparison market at the same level of trade (LOT) as EP or CEP. 
The NV LOT is that of the starting-price sales in the comparison market 
or, when NV is based on CV, that of the sales from which we derive SG&A 
expenses and profit. For EP, the U.S. LOT is based on the starting 
price of the sales to the U.S. market.
    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. See 19 CFR 351.412(c)(2). If the comparison 
market sales are at a different LOT and the difference affects price 
comparability, as manifested in a pattern of consistent price 
differences between the sales on which NV is based and comparison 
market sales at the LOT of the export transaction, we make an LOT 
adjustment under section 773(a)(7)(A) of the Tariff Act.
    In implementing these principles in this review, we obtained 
information from Shree Ganesh about the marketing stages involved in 
its U.S. and comparison market sales, including a description of the 
company's selling activities in the respective markets. Generally, if 
the reported LOTs are the same in the U.S. and comparison markets, the 
functions and activities of the seller should be similar. Conversely, 
if a party reports differences in LOTs, the functions and activities 
should be dissimilar.
    Shree Ganesh reported two customer categories in its home market 
(original equipment manufacturers (OEMs) and traders). See Shree 
Ganesh's November 13, 2007, submission at Exhibit 3 and its October 9, 
2007, submission at 4. It reported one customer category in its U.S. 
market (distributors). See Shree

[[Page 11866]]

Ganesh's November 13, 2007, submission at 14. Shree Ganesh further 
reported that it performs identical selling functions for all customers 
in the U.S. and foreign markets. See Shree Ganesh's November 13, 2007, 
submission at 4. These selling functions included exhibitions, sales 
promotions, advertisements, and technical/customer services. See Shree 
Ganesh's May 21, 2007, submission at 12. Further, Shree Ganesh reported 
that its selling activities do not vary by customer category, and it 
performs the same functions for all customers. See Shree Ganesh October 
9, 2007, submission at 5.
    After analyzing the data on the record with respect to these 
selling functions, we find no evidence of differences in the selling 
functions performed for different customer categories to support a 
determination that Shree Ganesh makes sales at more than one LOT. We 
therefore find that a single LOT exists for all of Shree Ganesh's sales 
to the United States and to its home market, and that no LOT adjustment 
is warranted.

Currency Conversions

    The Department made currency conversions into U.S. dollars in 
accordance with section 773A(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 of the United States.

Intent To Rescind

    As indicated above, we have preliminarily determined that 
Nakshatra's sales to the United States during the POR were not bona 
fide sales. We determined, based on the totality of circumstances, that 
Nakshatra's U.S. sales were not in accordance with commercial reality. 
See the Memorandum to the File, ``Bona Fide Nature of the Sale in the 
Administrative Review of Nakshatra Enterprises, Pvt., Ltd.,'' dated 
February 28, 2008, for a complete explanation of our analysis.

Preliminary Results of Review

    As a result of our review, the Department preliminarily finds the 
following weighted-average dumping margin exists for the period 
February 1, 2006, through January 31, 2007:

------------------------------------------------------------------------
                                                                Margin
                   Manufacturer/Exporter                      (percent)
------------------------------------------------------------------------
Shree Ganesh Forgings, Ltd.................................        40.38
------------------------------------------------------------------------

    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. Pursuant to 19 CFR 351.309(d), rebuttal briefs and 
rebuttals to written comments, limited to issues raised in the case 
briefs and comments, may be filed no later than five 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. 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

    Upon completion of this administrative review, the Department will 
determine, and CBP shall assess, antidumping duties on all appropriate 
entries. The Department intends to issue assessment instructions to CBP 
15 days after the date of publication of the final results of review.
    The Department clarified its ``automatic assessment'' regulation on 
May 6, 2003. See Notice of Policy Concerning Assessment of Antidumping 
Duties, 68 FR 23954 (May 6, 2003) (Assessment Policy Notice). This 
clarification will apply to entries of subject merchandise during the 
POR produced by Nakshatra and Shree Ganesh for which Nakshatra and 
Shree Ganesh, respectively, did not know that the merchandise it sold 
to an intermediary (e.g., a reseller, trading company, or exporter) was 
destined for the United States. In such instances, we will instruct CBP 
to liquidate unreviewed entries at the 162.14 percent all-others rate 
established in the original less-than-fair-value (LTFV) investigation, 
if there is no rate for the intermediary involved in the transaction. 
See the Assessment Policy Notice for a full discussion of this 
clarification.
    Furthermore, the following deposit requirements will be effective 
upon completion of the final results of this administrative review for 
all shipments of the subject merchandise entered, or withdrawn from 
warehouse, for consumption on or after the publication date of the 
final results of this administrative review, as provided by section 
751(a)(1) of the Tariff Act: (1) The cash deposit rate for Shree Ganesh 
will be the rate established in the final results of the administrative 
review (except that no deposit will be required if the rate is zero or 
de minimis, i.e., less than 0.5 percent); (2) for manufacturers or 
exporters not covered in this review, but covered in the original LTFV 
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, or the original LTFV investigation, but the manufacturer is, 
the cash deposit rate will be that established for the most recent 
period for the manufacturer of the merchandise; and (4) if neither the 
exporter nor the manufacturer is a firm covered in this review, any 
previous reviews, or the LTFV investigation, the cash deposit rate will 
be 162.14 percent, the all-others rate established in the LTFV 
investigation. See Order, 59 FR 5994, 5995.

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: February 26, 2008.
David M. Spooner,
Assistant Secretary for Import Administration.
[FR Doc. E8-4241 Filed 3-4-08; 8:45 am]
BILLING CODE 3510-DS-P