[Federal Register Volume 75, Number 49 (Monday, March 15, 2010)]
[Notices]
[Pages 12199-12206]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-5602]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-533-810]


Stainless Steel Bar from India: Preliminary Results of 
Antidumping Duty Administrative Review

AGENCY: Import Administration, International Trade Administration, 
Department of Commerce.
SUMMARY: The Department of Commerce is conducting an administrative 
review of the antidumping duty order on stainless steel bar from India. 
The period of review is February 1, 2008, through January 31, 2009. 
This review covers imports of stainless steel bar from two producers/
exporters: Ambica Steels Limited and Venus Wire Industries Pvt. Ltd. We 
preliminarily find that sales of the subject merchandise have been made 
below normal value. If these preliminary results are adopted in our 
final results, we will instruct U.S. Customs and Border Protection to 
assess antidumping duties on appropriate entries. Interested parties 
are invited to comment on these preliminary results. We will issue the 
final results no later than 120 days from the date of publication of 
this notice.

EFFECTIVE DATE: March 15, 2010.

FOR FURTHER INFORMATION CONTACT: Scott Holland, Seth Isenberg, or 
Austin Redington, AD/CVD Operations, Office 1, Import Administration, 
International Trade Administration, U.S. Department of Commerce, 14th 
Street and Constitution Avenue, NW, Washington DC 20230; telephone 
(202) 482-1279, (202) 482-0588, or (202) 482-1664, respectively.

SUPPLEMENTARY INFORMATION:

Background

    On February 21, 1995, the Department of Commerce (``Department'') 
published in the Federal Register the antidumping duty order on 
stainless steel bar (``SSB'') from India. See Antidumping Duty Orders: 
Stainless Steel Bar from Brazil, India and Japan, 60 FR 9661 (February 
21, 1995). On February 4, 2009, the Department published a notice in 
the Federal Register providing an opportunity for interested parties to 
request an administrative review of the antidumping duty order on SSB 
from India for the period of review (``POR'') February 1, 2008, through 
January 31, 2009. See Antidumping or Countervailing Duty Order, 
Finding, or Suspended Investigation; Opportunity To Request 
Administrative Review, 74 FR 6013 (February 4, 2009).
    On February 19, 2009, the Department received a timely request for 
review from Ambica Steels Limited (``Ambica''). On February 27, 2009, 
we received a timely request for review from Venus Wire Industries Pvt. 
Ltd. (``Venus Wire''). Also, on February 27, 2009, we received a timely 
request from domestic interested parties Carpenter Technology Corp.; 
Crucible Specialty Metals, a division of Crucible Materials Corp.; 
Electralloy Co., a G.O. Carlson, Inc. company; and Valbruna Slater 
Stainless, Inc. (collectively, ``Petitioners''), for a review of Venus 
Wire and its affiliates. On March 24, 2009, in accordance with section 
751(a) of the Tariff Act of 1930, as amended (``the Act''), we 
initiated an administrative review on Ambica and Venus Wire. See 
Initiation of Antidumping and Countervailing Duty Administrative 
Reviews and Requests for Revocation in Part, 74 FR 12310 (March 24, 
2009).
    On April 10, 2009, the Department issued antidumping duty 
questionnaires to Ambica and Venus Wire. Ambica submitted its responses 
to the antidumping questionnaire in May and June 2009. Venus Wire 
submitted its responses to the antidumping questionnaire in May, June, 
and July 2009. After analyzing these responses, we issued supplemental 
questionnaires to Ambica and Venus Wire to clarify or correct 
information contained in the initial questionnaire responses. We 
received responses to these supplemental questionnaires from Ambica in 
September, November, and December, 2009, and January and February, 
2010. We received responses to these supplemental questionnaires from 
Venus Wire in September, November, and December, 2009, and January and 
March, 2010.
    On February 17, 2010, the Department determined that the January 
25, 2010, Section D cost reconciliation submitted by Sieves 
Manufacturing (India) Pvt. Ltd. (``Sieves'') (an affiliated company 
collapsed with Venus Wire, see ``Affiliation'' section below) was filed 
after the established deadline and, in accordance with 19 CFR 
351.302(d)(i), the Department returned the submission to Sieves. See 
Letter from Susan Kuhbach to Sieves ``Rejection of Sieves' Section D 
supplemental response'' dated February 17, 2010. The Department later 
determined that it had previously granted a separate extension until 
January 25, 2010, for submission of Sieves' cost reconciliation. See 
Memorandum from Austin Redington, International Trade Compliance 
Analyst to the File entitled, ``Extension Request from Sieves,'' dated 
January 15, 2010. Thus, because it was timely filed, the Department 
requested that Sieves re-submit the Section D cost responses that the 
Department had previously returned. See Letter from Brandon Farlander, 
Program Manager to Sieves entitled ``Resubmission of Sieves' Section D 
supplemental response,'' dated February 24, 2010.
    On October 29, 2009, we extended the time limit for completing the 
preliminary results of this review to no later than March 1, 2010, in 
accordance with section 751(a)(3)(A) of the Act. See Stainless Steel 
Bar From India: Extension of Time Limit for the Preliminary Results of 
the Antidumping Duty Administrative Review, 74 FR 55814 (October 29, 
2009).
    As explained in the memorandum from the Deputy Assistant Secretary 
for Import Administration, the Department has exercised its discretion 
to toll deadlines for the duration of the closure of the Federal 
Government from February 5, through February 12, 2010. Thus, all 
deadlines in this segment of the proceeding have been extended by

[[Page 12200]]

seven days. The revised deadline for the preliminary results of this 
review is now March 8, 2010. See Memorandum to the Record from Ronald 
Lorentzen, DAS for Import Administration, regarding ``Tolling of 
Administrative Deadlines As a Result of the Government Closure During 
the Recent Snowstorm,'' dated February 12, 2010.

Period of Review

    The POR is February 1, 2008, through January 31, 2009.

Notice of Intent Not To Revoke Order In Part

    On February 27, 2009, pursuant to 19 CFR 351.222(b)(2), Venus Wire 
requested that the Department revoke it from the antidumping duty order 
on SSB from India at the conclusion of this administrative review. A 
request for revocation of an order in part must be accompanied by three 
elements: (1) the company's certification that it sold subject 
merchandise at not less than normal value (``NV'') during the POR, and 
that in the future it would not sell such merchandise at less than NV; 
(2) the company's certification that it has sold the subject 
merchandise to the United States in commercial quantities during each 
of the past three years, and (3) the company's agreement to immediate 
reinstatement of the antidumping duty order, if the Department 
concludes that the company, subsequent to revocation, sold the subject 
merchandise at less than NV. See 19 CFR 351.222(e).
    Venus Wire's February 27, 2009, request for revocation was not in 
accordance with 19 CFR 351.222(e) because it was not accompanied by a 
certification that (1) Venus Wire had not sold the subject merchandise 
at less than NV for a three-year period, and would not do so in the 
future and (2) Venus Wire had sold the subject merchandise to the 
United States in commercial quantities during each of the past three 
years. The company provided a certification regarding commercial 
quantities on November 6, 2009. However, this submission was not filed 
with the Department within the anniversary month of the proceeding as 
required by 19 CFR 351.222(e). Venus Wire did not, at any point, 
provide a certification stating that it had sold the subject 
merchandise at not less than NV during the current review period and 
that it would not do so in the future.
    Because Venus Wire's request for revocation was incomplete, the 
Department notified Venus Wire that it was not being considered for 
revocation in the course of this administrative review. See Letter from 
Susan Kuhbach to Venus Wire Pvt. Ltd. ``Request for Revocation,'' dated 
February 16, 2010.

Bona Fide Analysis

    In their letter of May 29, 2009, Petitioners alleged that the U.S. 
transaction reported by Ambica during the POR was not a bona fide sale.
    We analyzed the transaction, comparing it to other sales of subject 
merchandise using data obtained from U.S. Customs and Border Protection 
(``CBP'') to determine whether it was a bona fide transaction. In terms 
of price and quantity, we found Ambica's U.S. sale to be within the 
range of sales of all imports of the subject merchandise, as well as 
within the range of sales of product in the same Harmonized Tariff 
Schedule (``HTS'') code measured over the entire POR. We also found 
Ambica's U.S. sale to be within the price range of sales for the same 
HTS code in the same quarter of the sale. We included this quarterly 
analysis because we are using quarterly costs. For our complete 
analysis of these and other relevant factors, see Memorandum from Seth 
Isenberg, International Trade Compliance Analyst to the File entitled, 
``Bona Fide Nature of Ambica Steels Limited's Sales in the Period of 
Review for Stainless Steel Bar from India,'' dated March 8, 2010, 
(``Bona Fide Memo'') on file in the Central Records Unit in room 1117 
of the main Department building (``CRU''). Based on our analysis, we 
preliminarily determine that Ambica's U.S. sale was a bona fide 
transaction.

Scope of the Order

    Imports covered by the order are shipments of SSB. SSB means 
articles of stainless steel in straight lengths that have been either 
hot-rolled, forged, turned, cold-drawn, cold-rolled or otherwise cold-
finished, or ground, having a uniform solid cross section along their 
whole length in the shape of circles, segments of circles, ovals, 
rectangles (including squares), triangles, hexagons, octagons, or other 
convex polygons. SSB includes cold-finished SSBs that are turned or 
ground in straight lengths, whether produced from hot-rolled bar or 
from straightened and cut rod or wire, and reinforcing bars that have 
indentations, ribs, grooves, or other deformations produced during the 
rolling process.
    Except as specified above, the term does not include stainless 
steel semi-finished products, cut-to-length flat-rolled products (i.e., 
cut-to-length rolled products which if less than 4.75 mm in thickness 
have a width measuring at least 10 times the thickness, or if 4.75 mm 
or more in thickness having a width which exceeds 150 mm and measures 
at least twice the thickness), wire (i.e., cold-formed products in 
coils, of any uniform solid cross section along their whole length, 
which do not conform to the definition of flat-rolled products), and 
angles, shapes, and sections.
    The SSB subject to this review is currently classifiable under 
subheadings 7222.11.00.05, 7222.11.00.50, 7222.19.00.05, 7222.19.00.50, 
7222.20.00.05, 7222.20.00.45, 7222.20.00.75, and 7222.30.00.00 of the 
Harmonized Tariff Schedule of the United States (``HTSUS''). Although 
the HTSUS subheadings are provided for convenience and customs 
purposes, our written description of the scope of the order is 
dispositive.
    On May 23, 2005, the Department issued a final scope ruling that 
SSB manufactured in the United Arab Emirates out of stainless steel 
wire rod from India is not subject to the scope of the order. See 
Memorandum from Team to Barbara E. Tillman, ``Antidumping Duty Orders 
on Stainless Steel Bar from India and Stainless Steel Wire Rod from 
India: Final Scope Ruling,'' dated May 23, 2005, which is on file in 
the CRU. See also Notice of Scope Rulings, 70 FR 55110 (September 20, 
2005).

Affiliation

Precision Metals

    In the 2005-2006 antidumping duty administrative review of SSB from 
India, the Department determined that Venus Wire and Precision Metals 
were affiliated within the meaning of section 771(33) of the Act, and 
also that the two companies should be treated as a single entity for 
the purposes of that administrative review. See Notice of Final Results 
and Final Partial Rescission of Antidumping Duty Administrative Review: 
Stainless Steel Bar from India, 72 FR 51595, 51596 (September 10, 
2007). In the 2007-2008 antidumping administrative review of SSB from 
India, the Department again determined that these two companies should 
be treated as a single entity. See Stainless Steel Bar From India: 
Final Results of Antidumping Duty Administrative Review, 74 FR 47198 
(September 15, 2009).
    During the current, 2008-2009 administrative review, the Department 
again examined Venus Wire's relationship with Precision Metals. Based 
on Venus Wire's representations that its corporate affiliation 
relationship with Precision Metals remained the same during the POR as 
during the 2005-2006, and 2007-2008 administrative reviews (see Venus 
Wire's May 19, 2009, Section A

[[Page 12201]]

questionnaire response (``AQR'') at A-2, 6-10), the Department hereby 
continues to treat Venus Wire and Precision Metals as a single entity 
in the current administrative review. See Memorandum from Erika 
McDonald to the File, ``Relationship of Venus Wire Industries Pvt. Ltd. 
and Precision Metals,'' dated September 15, 2009, which is on file in 
the CRU.

Sieves

    On September 2, 2009, the Department determined that Venus Wire and 
Sieves are affiliated within the meaning of section 771(33) of the Act, 
and also that the two companies should be treated as a single entity 
and collapsed for the purposes of the 2007-2008 administrative review. 
See Stainless Steel Bar From India: Final Results of Antidumping Duty 
Administrative Review, 74 FR at 47201. See Stainless Steel Bar From 
India: Preliminary Results of Antidumping Duty Administrative Review, 
74 FR 9787, 9792 (March 6, 2009). Accordingly, we announced our 
intention to treat Venus Wire and Sieves as a single entity and 
collapse them for the 2008-2009 administrative review. See Memorandum 
from Erika McDonald to the File, ``Relationship of Venus Wire 
Industries Pvt. Ltd. and Sieves Manufacturers (India) Pvt. Ltd.,'' 
dated September 15, 2009, which is on file in the CRU. We gave 
interested parties two weeks to provide comments on the collapsing of 
these two entities. No comments were received. Therefore, the 
Department continues to treat Venus Wire and Sieves as a single entity 
in the current administrative review.

Hindustan Inox (formerly Hindustan Stainless)

    Petitioners allege that Hindustan Inox, formerly known as Hindustan 
Stainless (``Hindustan''), should also be collapsed with Venus Wire. 
See Petitioners' June 12, 2009, and January 29, 2010, filings. 
Petitioners argue that Hindustan is a producer and exporter of SSB and, 
as a Venus Wire affiliate, Venus Wire should report Hindustan's sales 
and costs in its responses. However, Venus Wire and Sieves stated that 
Hindustan did not produce or export SSB during the POR and that 
Hindustan only did job works of SSB for Sieves. See Venus Wire's 
November 2, 2009, Section A supplemental questionnaire response 
(``ASQR'') at 5-6, and 8. See also Sieves' December 31, 2009, Section A 
supplemental questionnaire response (``ASQR'') at 4, 6. Sieves further 
reported that while Hindustan is in the process of setting up a 
facility to manufacture SSB, Hindustan did not start producing SSB 
until after the POR. See Sieves' October 19, 2009, Section A 
questionnaire response (``AQR'') at 8-9. After reviewing record 
information, we have determined that because Hindustan was not a 
producer/exporter of SSB during the POR, it should not be collapsed 
with Venus Wire in the current administrative review.
    The collapsed entity of Venus Wire, Precision Metals, and Sieves is 
hereafter referred to as ``Venus.''

Fair Value Comparisons

    To determine whether sales of SSB by Venus and Ambica to the United 
States were made at less than NV, we compared export price (``EP'') to 
NV. See ``Export Price'' and ``Normal Value'' sections of this notice. 
Pursuant to section 777A(d)(2) of the Act, we compared the EPs of 
individual U.S. transactions to the weighted-average NV of the foreign-
like product, where there were sales made in the ordinary course of 
trade, as discussed in the ``Cost of Production Analysis'' section, 
below.

Product Comparisons

    In accordance with section 771(16) of the Act, we considered all 
products sold by Ambica and Venus (``respondents'') in the comparison 
market covered by the description in the ``Scope of the Order'' 
section, above, to be foreign-like products for purposes of determining 
appropriate product comparisons to U.S. sales. In accordance with 
section 773(a)(1)(C)(ii) of the Act, in order to determine whether 
there was a sufficient volume of sales in the home market to serve as a 
viable basis for calculating NV, we compared the respondents' volumes 
of home market sales of the foreign-like product to the volumes of 
their U.S. sales of the subject merchandise. See the ``Normal Value'' 
section, below, for further details.
    We compared U.S. sales to monthly weighted-average prices of 
contemporaneous sales made in the home market based on the following 
criteria: (1) general type of finish; (2) grade; (3) remelting; (4) 
type of final finishing operation; (5) shape; and (6) size. This was 
consistent with our practice in the original investigation. See 
Preliminary Determination of Sales at Less Than Fair Value and 
Postponement of Final Determination: Stainless Steel Bar From India, 59 
FR 39733, 39735 (August 4, 1994); unchanged in the final, see Notice of 
Final Determination of Sales at Less Than Fair Value: Stainless Steel 
Bar from India, 59 FR 66915 (December 28, 1994). Where there were no 
home market sales of the foreign-like product that were identical in 
these respects to the merchandise sold in the United States, we 
compared U.S. products with the most similar merchandise sold in the 
home market based on the characteristics listed above, in that order of 
priority, made in the ordinary course of trade. Where there were no 
sales of identical or similar merchandise made in the ordinary course 
of trade in the comparison market, we compared U.S. sales to 
constructed value (``CV'').

Date of Sale

    Pursuant to 19 CFR 351.401(i), the date of sale is normally the 
date of invoice, unless satisfactory evidence is presented that the 
material terms of sale, price, and quantity are established on some 
other date. Accordingly, since no such evidence was provided in this 
proceeding, we have relied on the invoice date as date of sale for both 
the U.S. and home market sales by Ambica and Venus. See Ambica's June 
8, 2009, section B questionnaire response (``BQR'') and Ambica's 
November 14, 2009, section A, B, and C supplemental questionnaire (``A, 
B, & C SQR'') at 12-13. See also Venus Wire's AQR at A-18 and Annexure 
A-4.

Export Price

    Section 772(a) of the Act defines EP as the price at which the 
subject merchandise is first sold before the date of importation by the 
producer or exporter 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 Act. Section 772(b) of the Act defines constructed export price 
(``CEP'') as 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.
    Petitioners argue that Venus was affiliated with its U.S. customer, 
AMS Specialty Steel (``AMS''), during the POR by virtue of a principal-
agent relationship. Because of this alleged affiliation, Petitioners 
contend that Venus should have reported its sales through AMS as CEP 
sales, rather than as EP sales to AMS. See Petitioners' June 12, 2009 
filing at 11-15. Petitioners made an identical claim in the previous 
administrative review. See Stainless Steel Bar From India: Final 
Results of Antidumping Duty Administrative Review, 74 FR at 47199 and 
accompanying Issues and Decision Memorandum at Comment 2. Venus

[[Page 12202]]

denied Petitioners' claims and stated that it did not have a principal-
agent relationship with AMS and that its sales should not be reported 
as CEP, since Venus sold material to AMS as its first unaffiliated 
customer. Venus also presented further support, which cannot be further 
described here because of its proprietary nature. See Letter from Venus 
Wire, dated November 4, 2009 and Attachment. After reviewing the 
information presented by both Petitioners and Venus, we found that 
there is no evidence to substantiate Petitioners' allegations. 
Therefore, the Department continues to find that there is no principal-
agent relationship between Venus and AMS and will not treat Venus' 
sales to AMS as CEP sales.
    Petitioners argue that Ambica was affiliated with its U.S. customer 
during the POR by virtue of a principal-agent relationship. See 
Petitioners' May 29, 2009 filing. Petitioners base the allegation on 
the fact that the customer advertises itself as an exclusive agent for 
several unnamed international mills on its website and does not 
advertise on the site the specific type of bar it purchased from 
Ambica. Because of this alleged affiliation, Petitioners contend that 
Ambica should have reported its U.S. sale through its customer as a CEP 
sale, rather than as an EP sale.
    In the absence of an agency contract, ``the analysis of whether a 
relationship constitutes an agency is case-specific and can be quite 
complex; there is no bright line test.'' See Notice of Final 
Determination of Sales at Less Than Fair Value: Engineered Process Gas 
Turbo-Compressor Systems, Whether Assembled or Unassembled, and Whether 
Complete or Incomplete, from Japan, 62 FR 24394, 24403 (May 5, 1997). 
The Department's examination of allegations of an agency relationship 
has focused on a range of criteria, including (but not limited to) the 
following: (1) the foreign producer's role in negotiating price and 
other terms of sale; (2) the extent of the foreign producer's 
interaction with the U.S. customer; (3) whether the agent/reseller 
maintains inventory; (4) whether the agent/reseller takes title to the 
merchandise and bears the risk of loss; (5) whether the agent/reseller 
further processes or otherwise adds value to the merchandise; (6) the 
means of marketing a product by the producer to the U.S. customer in 
the pre-sale period; and (7) whether the identity of the producer on 
sales documentation inferred such an agency relationship during the 
sales transactions. See Stainless Steel Sheet and Strip From Taiwan; 
Final Results and Partial Rescission of Antidumping Duty Administrative 
Review, 67 FR 6682 (February 13, 2002) and accompanying Issues and 
Decision Memorandum, at Comment 23.
    As there was no agency contract, the Department examined the above 
factors. Applying the Department's analytical framework for determining 
principal-agent relationships, we find no evidence that Ambica has any 
knowledge of its customer's customers, or has had any involvement with 
its customers' sales. After reviewing the allegations and Ambica's 
responses, the Department finds that there is no principal-agent 
relationship between Ambica and its customer. See Bona Fide Memo.
    Therefore, for both Ambica and Venus, because the merchandise was 
sold prior to importation by the exporter or producer outside the 
United States to the first unaffiliated purchaser in the United States, 
and because CEP methodology was not otherwise warranted, we have based 
the U.S. price on EP. For both Ambica and Venus, we based EP on the 
packed, or delivered duty paid price to unaffiliated purchasers in the 
United States. We adjusted the reported gross unit price, where 
applicable, for early payment discounts and other discounts for weight 
shortages, short payments or quality claims. We made deductions for 
movement expenses in accordance with section 772(c)(2)(A) of the Act. 
These deductions included, where appropriate, freight incurred in 
transporting merchandise to the Indian port, domestic brokerage and 
handling, international freight, marine insurance, U.S. brokerage and 
handling, freight incurred in the United States, U.S. customs duties, 
and other transportation fees. See Ambica Preliminary Results 
Calculation Memorandum (March 8, 2010). See also Venus Preliminary 
Results Calculation Memorandum (March 8, 2010).

Duty Drawback

    Section 772(c)(1)(B) of the Act provides that EP or CEP shall be 
increased by among other things, ``the amount of any import duties 
imposed by the country of exportation which have been rebated, or which 
have not been collected, by reason of the exportation of the subject 
merchandise to the United States.'' The Department determines that an 
adjustment to U.S. price for claimed duty drawback is appropriate when 
a company can demonstrate that: (1) the ``import duty and rebate are 
directly linked to, and dependent upon, one another;'' and (2) ``the 
company claiming the adjustment can show that there were sufficient 
imports of the imported raw materials to account for the drawback 
received on the exported product.'' Rajinder Pipes Ltd. v. United 
States, 70 F. Supp. 2d 1350, 1358 (Ct. Int'l Trade 1999). Venus claimed 
a duty drawback adjustment based on its participation in the Indian 
government's Duty Entitlement Passbook Program.
    The Department finds that Venus has not provided sufficient 
evidence to establish the necessary link between the import duty and 
the reported duty drawback. Therefore, because Venus has failed to meet 
the Department's requirements, we are denying Venus' request for a duty 
drawback adjustment for the preliminary results. See Venus Preliminary 
Results Calculation Memorandum.

Normal Value

A. Home Market Viability

    Section 773(a)(1) of the Act directs that NV be based on the price 
at which the foreign-like product is sold in the home market, provided 
that the merchandise is sold in sufficient quantities (or value, if 
quantity is inappropriate) and that there is no particular market 
situation that prevents a proper comparison with the EP. Section 773 
(a)(1)(B)(ii)(II) of the Act contemplates that quantities (or values) 
will normally be considered insufficient if they are less than five 
percent of the aggregate quantity (or value) of sales of the subject 
merchandise to the United States.
    In order to determine whether there was a sufficient volume of 
sales in the home market to serve as a viable basis for calculating NV, 
we compared each respondent's volume of home market sales of the 
foreign-like product to its volume of U.S. sales of the subject 
merchandise, in accordance with section 773(a)(1)(C) of the Act.
    Both Ambica's and Venus' reported home market sales of SSB during 
the POR were more than five percent of their sales of SSB to the United 
States. See Ambica's AQR at 3-4 and Venus Wire's AQR at A-3. Therefore, 
Ambica's and Venus' home markets were viable for purposes of 
calculating NV.
    To derive NV for Ambica and Venus, we made the adjustments detailed 
in the ``Calculation of Normal Value Based on Home Market Prices'' 
section below.

B. Level of Trade

    Section 773(a)(1)(B)(i) of the Act states that, to the extent 
practicable, the Department will calculate NV based on sales at the 
same level of trade (``LOT'') as the EP. Sales are made at different 
LOTs if they are made at different marketing stages (or their 
equivalent). See 19 CFR 351.412(c)(2). Substantial

[[Page 12203]]

differences in selling activities are a necessary, but not sufficient, 
condition for determining that there is a difference in the stages of 
marketing. Id.; see also Notice of Final Determination of Sales at Less 
Than Fair Value: Certain Cut-to-Length Carbon Steel Plate From South 
Africa, 62 FR 61731, 61732 (November 19, 1997).
    In order to determine whether the comparison market sales were at 
different stages in the marketing process than the U.S. sales, we 
reviewed the distribution system in each market (i.e., the ``chain of 
distribution''),\1\ including selling functions,\2\ class of customer 
(``customer category''), and the level of selling expenses for each 
type of sale. Pursuant to section 773(a)(1)(B)(i) of the Act, in 
identifying LOTs for EP and comparison market sales (i.e., NV based on 
either comparison market or third country prices),\3\ we consider the 
starting prices before any adjustments. When the Department is unable 
to match U.S. sales to sales of the foreign-like product in the 
comparison market at the same LOT as the EP, the Department may compare 
the U.S. sale to sales at a different LOT in the comparison market. In 
comparing EP sales at a different LOT in the comparison market, where 
available data make it practicable, we make an LOT adjustment under 
section 773(a)(7)(A) of the Act.
---------------------------------------------------------------------------

    \1\ The marketing process in the United States and comparison 
market begins with the producer and extends to the sale to the final 
user or customer. The chain of distribution between the two may have 
many or few links, and each respondent's sales occur somewhere along 
this chain. In performing this evaluation, we considered the 
respondent's narrative response to properly determine where in the 
chain of distribution the sale occurs.
    \2\ Selling functions associated with a particular chain of 
distribution help us to evaluate the LOT(s) in a particular market. 
For purposes of these preliminary results, we have organized the 
common selling functions into four major categories: sales process 
and marketing support, freight and delivery, inventory and 
warehousing, and quality assurance/warranty services.
    \3\ Where NV is based on CV, we determine the NV LOT based on 
the LOT of the sales from which we derive selling expenses, general 
and administrative expenses (``G&A'') and profit for CV, where 
possible.
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    Ambica reported that its customer base in the home market consists 
of end users and trading companies, and in the U.S. market, it consists 
of a trading company. See Ambica's AQR at A-18-19. In addition, Ambica 
has reported five channels of distribution in the home market and one 
channel distribution in the U.S. market. See Ambica's AQR at A-15-19. 
In the home market, Ambica made sales: directly to end-users from the 
factory; directly to traders from the factory; directly to end-users 
via Ambica's distribution warehouses; directly to traders via Ambica's 
distribution warehouses; and by a consignment agent to end-users and/or 
traders. In Ambica's single channel of distribution to the U.S. market, 
Ambica made sales directly to the trader. Ambica reported that its 
prices did not vary based on channel of distribution and/or customer 
category. See Ambica's AQR at 22.
    Ambica reported a single LOT in both the home market and the U.S. 
market, and has not requested an LOT adjustment. See Ambica's BQR at 
21, and Ambica's June 8, 2009, section C questionnaire response 
(``CQR'') at 22; see also Ambica's A, B, & C SQR at 27.
    We examined the information reported by Ambica regarding the type 
and level of selling functions performed, and customer categories. 
Specifically, we considered the extent to which, sales process/
marketing support, freight/delivery, inventory maintenance, and quality 
assurance/warranty service varied with respect to the different 
customer categories and channels of distribution (i.e., distributors 
and processors) across the markets.
    We preliminary find the LOTs for the home market channels of 
distribution similar with regard to sales and marketing, inventory 
maintenance, and quality assurance/warranty service. Further, freight 
and delivery services were identical in all channels in the home 
market. Therefore, we consider the home market to constitute a single 
LOT. We compared the U.S. LOT to the LOT reported for sales in the home 
market. We found the LOT in the United States to be similar to the LOT 
in the home market. Thus, we preliminarily have compared U.S. sales to 
home market sales at the same LOT.
    Our LOT findings with regard to Venus are summarized below. Because 
Venus Wire and Sieves have reported their LOT information in separate 
responses, we have examined each response separately. However, our 
final LOT determination for the collapsed entity of Venus is a 
consolidated LOT determination of the collapsed entity of Venus Wire 
and Sieves.
    Venus reported one channel of distribution and a single LOT in both 
the home market and the U.S. market.
    Venus reported that it sells to trading companies, distributors, 
and end users at the same LOT in the home market. Also, Venus reported 
that it sells to distributors, trading companies, and end users at the 
same LOT in the U.S. market. See Venus Wire's CQR at 28 and December 
15, 2009, section B & C supplemental questionnaire (``B & C SQR'') at 
16. Venus reported that its prices did not vary based on channel of 
distribution and/or customer category. See Venus Wire's AQR at A-16.
    We examined the information reported by Venus regarding its sales 
processes for its home market and U.S. market sales, including customer 
categories and the type and level of selling activities performed. See 
Venus Wire's AQR at A-17-19. Specifically, we considered the extent to 
which sales process/marketing support, freight/delivery, inventory 
maintenance, and quality assurance/warranty service varied with respect 
to the different customer categories and channels of distribution 
across the markets. Because there was only one channel of distribution 
and because the selling functions were identical for all home market 
sales, we found that the home market channel of distribution comprises 
one LOT. Because there was only one channel of distribution and because 
the selling functions were identical for U.S. sales, we evaluated the 
U.S. channel of distribution and found that it also comprises one LOT. 
Next, we compared the U.S. LOT to the home market LOT. See id. Venus 
reported similar levels of freight/delivery in both the home market and 
U.S. market. See id. Further, Venus reported no inventory maintenance 
in either the home market or the U.S. market, and reported that it 
provided no warranty services in any of its channels of distribution. 
See id. The only minor difference that Venus reported was in relation 
to sales process/marketing support, where Venus indicated that it 
advertises and promotes its U.S. market sales, but not the home market 
sales. See id. Based on our examination of the selling functions 
performed in the single channel of distribution in the U.S. market, we 
find that Venus' U.S. sales were at a single LOT.
    Based on the foregoing, we preliminarily find that Venus' sales in 
the home market and the United States were made at the same LOT. Thus, 
we were able to match EP sales to sales at the same LOT in the home 
market and no LOT adjustment was necessary.

C. Cost Averaging Methodology

    The Department's normal practice is to calculate an annual 
weighted-average cost for the entire POR. See, e.g., Certain Pasta From 
Italy: Final Results of Antidumping Duty Administrative Review, 65 FR 
77852 (December 13, 2000), and accompanying Issues and Decision 
Memorandum at Comment 18, and Notice of Final Results of Antidumping 
Duty Administrative Review: Carbon and Certain Alloy Steel Wire Rod 
from Canada, 71 FR 3822 (January 24, 2006), and accompanying

[[Page 12204]]

Issues and Decision Memorandum at Comment 5 (explaining the 
Department's practice of computing a single weighted-average cost for 
the entire period). However, the Department recognizes that possible 
distortions may result if our normal annual average cost method is used 
during a period of significant cost changes. In determining whether to 
deviate from our normal methodology of calculating an annual weighted 
average cost, the Department evaluates the case-specific record 
evidence using two primary factors: (1) The change in the cost of 
manufacturing (``COM'') recognized by the respondent during the POR 
must be deemed significant; and (2) the record evidence must indicate 
that sales during the shorter averaging periods could be reasonably 
linked with the cost of production (``COP'') or CV during the same 
shorter averaging periods. See Stainless Steel Plate in Coils From 
Belgium: Final Results of Antidumping Duty Administrative Review, 73 FR 
75398, 75399 (December 11, 2008) (``SSPC from Belgium'') and 
accompanying Issues and Decision Memorandum at Comment 4; see also 
Stainless Steel Sheet and Strip in Coils from Mexico; Final Results of 
Antidumping Duty Administrative Review, 74 FR 6365 (February 9, 2009) 
(``SSSS from Mexico'') and accompanying Issues and Decision Memorandum 
at Comment 5.
1. Significance of Cost Changes
    In prior cases, the Department established 25 percent as the 
threshold for determining that the changes in COM are significant 
enough to warrant a departure from our standard annual costing 
approach. See SSPC from Belgium and accompanying Issues and Decision 
Memorandum at Comment 4; see also Stainless Steel Sheet and Strip in 
Coils From Mexico; Preliminary Results of Antidumping Duty 
Administrative Review, 73 FR 45708, 45710 (August 6, 2008), unchanged 
in SSSS from Mexico and accompanying Issues and Decision Memorandum at 
Comment 5. To determine whether the changes in production costs were 
significant, we analyzed, on a product-specific basis, the extent to 
which the total COM changed during the POR. We did this by analyzing, 
on a CONNUM-specific basis, the difference between the lowest quarterly 
average COM and the highest quarterly average COM, as a percentage of 
the lowest quarterly average COM. In the instant case, record evidence 
shows that Ambica and Venus experienced significant changes (i.e., 
changes that exceeded 25 percent) between the high and low quarterly 
COMs during the POR and that the change in COM is primarily 
attributable to the price volatility for stainless scrap and ferro-
alloys, major inputs consumed in the production of the merchandise 
under consideration. See ``Cost of Production and Constructed Value 
Calculation Adjustments for the Preliminary Results Ambica Steels 
Ltd.,'' from Stephanie C. Arthur to Neal M. Halper, dated March 8, 2010 
(``Ambica Cost Calculation Memorandum'') and ``Cost of Production and 
Constructed Value Calculation Adjustments for the Preliminary Results 
Venus Wire Industries Pvt. Ltd.,'' from LaVonne L. Clark to Neal M. 
Halper, dated March 8, 2010 (``Venus Cost Calculation Memorandum''). In 
examining company-specific purchase information for these inputs, we 
found that the prices changed dramatically throughout the POR and 
consequently directly affected the cost of the material inputs 
consumed. See Ambica Cost Calculation Memorandum and Venus Cost 
Calculation Memorandum. As a result, we have determined for the 
preliminary results that the changes in COM are significant enough to 
warrant a departure from our standard annual costing approach, as these 
significant cost changes create distortions in the Department's sales-
below-cost test as well as the overall margin calculation.
2. Linkage Between Cost and Sales Information
    As noted above, the Department preliminarily found cost changes to 
be significant in this administrative review; thus, the Department 
subsequently evaluated whether there is evidence of linkage between the 
cost changes and the sales prices during the POR. The Department's 
definition of linkage does not require direct traceability between 
specific sales and their specific production cost, but rather relies on 
whether there are elements which would indicate a reasonable 
correlation between the underlying costs and the final sales prices 
levied by the company. See SSSS from Mexico and accompanying Issues and 
Decision Memorandum at Comment 5; see also SSPC from Belgium and 
accompanying Issues and Decision Memorandum at Comment 4. These 
correlative elements may be measured and defined in a number of ways 
depending on the associated industry, and the overall production and 
sales processes.
    To determine whether a reasonable correlation existed between sales 
prices and their underlying costs during the POR, we compared weighted-
average quarterly prices to the corresponding quarterly COM for the 
five highest-volume home market CONNUMs. For Ambica, our comparison 
revealed that sales prices and costs trended consistently with each 
other for all of these five products, thereby establishing a reasonable 
link between the underlying costs and sales prices. See Ambica Cost 
Calculation Memorandum.
    While we were able to use data from Venus to establish the 
significance of cost changes discussed above, we did not have the 
necessary information from Venus to establish the linkage between cost 
and sales information. The Department requested the necessary 
information from Venus to perform the linkage analysis in supplemental 
questionnaires dated October 14, 2009; December 30, 2009; and March 1, 
2010. Because we have not yet received all of the necessary information 
from Venus to complete the linkage between sales prices and their 
underlying costs, we have relied on facts available for purposes of 
these preliminary results. Section 776(a) of the Act provides that the 
Department shall apply ``facts otherwise available'' if (1) necessary 
information is not on the record, or (2) an interested party or any 
other person (A) withholds information that has been requested, (B) 
fails to provide information within the deadlines established, or in 
the form and manner requested by the Department, subject to subsections 
(c)(1) and (e) of section 782 of the Act, (C) significantly impedes a 
proceeding, or (D) provides information that cannot be verified as 
provided by section 782(i) of the Act. Here, we lack information 
necessary to determine whether a linkage between Venus' sales prices 
and their underlying costs reasonably exists. Therefore, we must rely 
upon facts available. As facts available, we have relied on the 
determination that a reasonable linkage exists for Ambica, the other 
respondent to this proceeding. As noted in the Ambica Cost Calculation 
Memorandum, the Department determined that Ambica's quarterly-average 
price and cost changes appear to be reasonably correlated and that 
Ambica's average quarterly cost trended consistently with the change in 
the average quarterly sales prices. Therefore, as facts available, we 
have determined a reasonable linkage also exists between Venus's sales 
prices and its underlying costs. We plan to analyze this issue when the 
necessary data have been received from Venus. See Venus Cost 
Calculation Memorandum.
    For both Ambica and Venus, we found there to be a significant 
change (i.e., one that exceeded 25 percent) in COM between the high and 
low quarters, as well as a reasonable linkage

[[Page 12205]]

of sales prices and costs during the shorter cost averaging period. 
Accordingly, we have preliminarily determined that a quarterly costing 
approach would lead to more appropriate comparisons in our antidumping 
duty calculations. Therefore, we preliminarily used quarterly indexed 
annual-average direct material costs and annual weighted-average 
conversion costs in the COP and CV calculations for Ambica and Venus. 
For ferritic and martensitic products manufactured by Ambica, we have 
continued to use a single weighted-average total COM.

D. Cost of Production Analysis

    Because we disregarded sales of certain products made at prices 
below the COP in the most recently completed review of SSB from India 
(see Stainless Steel Bar From India: Final Results of Antidumping New 
Shipper Review, 72 FR 72671 (December 21, 2007) (Ambica) and Stainless 
Steel Bar From India: Final Results of Antidumping Duty Administrative 
Review, 74 FR 47198 (September 15, 2009) (Venus)), we had reasonable 
grounds to believe or suspect that sales of the foreign like product 
under consideration for the determination of NV in this review for 
Ambica and Venus may have been made at prices below the COP, as 
provided by section 773(b)(2)(A)(ii) of the Act. Pursuant to section 
773(b)(1) of the Act, we initiated a COP investigation of sales by 
Ambica and Venus. We relied on home market sales and COP information 
provided by Ambica and Venus in its questionnaire responses, except 
where noted below:

Ambica

    Using Ambica's quarterly cost information from the November 23, 
2009 response, for austenitic grades of product, we measured the cost 
changes, in terms of a percentage, to develop direct material indices 
for each quarter. We used these indices to calculate an annual 
weighted-average material cost for the POR and then restate that annual 
average material cost to each respective quarter on an equivalent 
basis. See Ambica Cost Calculation Memorandum.

Venus

    We relied on Venus' quarterly cost information from the January 11, 
13, and 25, 2010 responses and measured the cost changes, in terms of a 
percentage, to develop direct material indices for each quarter. We 
used these indices to calculate an annual weighted-average material 
cost for the POR and then restate that annual average material cost to 
each respective quarter on an equivalent basis. We revised Venus' 
calculation of its quarterly raw materials costs to exclude remelted 
material inputs because we currently do not have adequate information 
on the record to determine if these costs are under-stated or double-
counted. Further, we revised Venus' financial expenses to exclude an 
overstatement of net foreign exchange gain. See Venus Cost Calculation 
Memorandum.
    In determining whether to disregard home market sales made at 
prices below the COP, we examined, in accordance with sections 
773(b)(1)(A) and (B) of the Act, whether, within an extended period of 
time, such sales were made in substantial quantities, and whether such 
sales were made at prices which permitted the recovery of all costs 
within a reasonable period of time in the normal course of trade. As 
noted in section 773(b)(1)(D) of the Act, prices are considered to 
provide for recovery of costs if such prices are above the weighted 
average per-unit COP for the period of investigation or review. In the 
instant case, we have relied on a quarterly costing approach for 
certain merchandise produced by Ambica and merchandise produced by 
Venus. This methodology (1) restates the quarterly material costs in 
terms of the ``base period'' (i.e., the first quarter), (2) calculates 
an annual weighted-average cost for the POR, and (3) restates it to 
each respective quarter. We find that this quarterly costing method 
meets the requirements of section 773(b)(2)(D) of the Act.
    Where less than 20 percent of the respondent's home market sales of 
a given model were at prices below the COP, we did not disregard any 
below-cost sales of that model because we determined that the below-
cost sales were not made within an extended period of time and in 
``substantial quantities.'' Where 20 percent or more of the 
respondent's home market sales of a given model were at prices less 
than the COP, we disregarded the below-cost sales because: (1) They 
were made within an extended period of time in ``substantial 
quantities,'' in accordance with sections 773(b)(2)(B) and (C) of the 
Act; and (2) based on our comparison of prices to the weighted-average 
COPs for the POR, they were at prices which would not permit the 
recovery of all costs within a reasonable period of time, in accordance 
with section 773(b)(2)(D) of the Act.
    Our cost test revealed that, for home market sales of certain 
models, less than 20 percent of the sales of those models were at 
prices below the COP. We therefore retained all such sales in our 
analysis and used them as the basis for determining NV. Our cost test 
also indicated that, for home market sales of other models, more than 
20 percent were sold at prices below the COP within an extended period 
of time and were at prices which would not permit the recovery of all 
costs within a reasonable period of time. Thus, in accordance with 
section 773(b)(1) of the Act, we excluded these below-cost sales from 
our analysis and used the remaining above-cost sales as the basis for 
determining NV.
    Based on the additional information we plan to obtain after the 
preliminary results regarding the linkage between quarterly costs and 
sales, we plan to provide a post-preliminary analysis of COP for Venus.

E. Calculation of Normal Value Based on Home Market Prices

    We calculated NV based on ex-factory or delivered prices to 
unaffiliated customers in the home market. We made adjustments for 
differences in packing in accordance with sections 773(a)(6)(A) and 
773(a)(6)(B)(i) of the Act, and we deducted movement expenses 
consistent with section 773(a)(6)(B)(ii) of the Act. In addition, where 
applicable, we made adjustments for differences in cost attributable to 
differences in physical characteristics of the merchandise pursuant to 
section 773(a)(6)(C)(ii) of the Act, as well as for differences in 
circumstances of sale in accordance with section 773(a)(6)(C)(iii) of 
the Act and 19 CFR 351.410. We also made adjustments, in accordance 
with 19 CFR 351.410(e), for indirect selling expenses incurred on 
comparison market or U.S. sales where commissions were granted on sales 
in one market but not in the other. Specifically, where commissions 
were granted in the U.S. market but not in the comparison market, we 
made a downward adjustment to NV for the lesser of (1) the amount of 
the commission paid in the U.S. market, or (2) the amount of indirect 
selling expenses incurred in the comparison market. If commissions were 
granted in the comparison market but not in the U.S. market, we made an 
upward adjustment to NV following the same methodology. We did not make 
further adjustments to Ambica's or Venus' home market data.

Currency Conversion

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

[[Page 12206]]

Preliminary Results of the Review

    For the firms listed below, we find that the following weighted-
average percentage margin exists for the period February 1, 2008, 
through January 31, 2009:

------------------------------------------------------------------------
                Exporter/Manufacturer                       Margin
------------------------------------------------------------------------
Venus Wire Industries Pvt. Ltd. /Precision Metals/          5.54 percent
 Sieves Manufacturing (India) Pvt. Ltd..............
Ambica Steels Limited...............................        0.00 percent
------------------------------------------------------------------------

Public Comment

    The Department will disclose the calculations performed within five 
days of publication of this notice in accordance with 19 CFR 
351.224(b). Pursuant to 19 CFR 351.310(c), any interested party may 
request a hearing within 30 days of publication of this notice. Any 
hearing, if requested, will be held 42 days after the publication of 
this notice, or the first workday thereafter. Issues raised in the 
hearing will be limited to those raised in the case and rebuttal 
briefs. Pursuant to 19 CFR 351.309(c), interested parties may submit 
case briefs within 30 days of the date of publication of this notice. 
Rebuttal briefs, which must be limited to issues raised in the case 
briefs, may be filed not later than 35 days after the date of 
publication of this notice. See 19 CFR 351.309(d). Parties who submit 
case briefs or rebuttal briefs in this proceeding are requested to 
submit with each argument: 1) a statement of the issue, and 2) a brief 
summary of the argument with an electronic version included. The 
Department will publish the final results of this administrative 
review, including the results of our analysis of issues raised in the 
briefs, no later than 120 days after publication of these preliminary 
results.

Assessment Rates

    If these preliminary results are adopted in the final results, we 
will instruct CBP to assess antidumping duties on all appropriate 
entries. The Department will issue appropriate assessment instructions 
directly to CBP 15 days after publication of the final results of 
review in the Federal Register.
    Pursuant to 19 CFR 351.212(b)(1), for all sales made by the 
respondent for which it has reported the importer of record and the 
entered value of the U.S. sales, we have calculated importer-specific 
assessment rates based on the ratio of the total amount of antidumping 
duties calculated for the examined sales to the total entered value of 
those sales. Where the respondent did not report the entered value for 
U.S. sales to an importer, we have calculated importer-specific 
assessment rates for the merchandise in question by aggregating the 
dumping margins calculated for all U.S. sales to each importer and 
dividing this amount by the total quantity of those sales.
    To determine whether the duty assessment rates were de minimis 
(i.e., less than 0.50 percent) in accordance with the requirement set 
forth in 19 CFR 351.106(c)(2), we calculated importer-specific ad 
valorem rates based on the estimated entered value. Where the 
assessment rate is above de minimis, we will instruct CBP to assess 
duties on all entries of subject merchandise by that importer. Pursuant 
to 19 CFR 351.106(c)(2), we will instruct CBP to liquidate without 
regard to antidumping duties any entries for which the assessment rate 
is de minimis.
    The Department clarified its ``automatic assessment'' regulation on 
May 6, 2003. See Antidumping and Countervailing Duty Proceedings: 
Assessment of Antidumping Duties, 68 FR 23954 (May 6, 2003). This 
clarification will apply to entries of subject merchandise during the 
POR produced by the respondent for which it did not know its 
merchandise was destined for the United States. In such instances, we 
will instruct CBP to liquidate unreviewed entries at the all-others 
rate if there is no rate for the intermediate company(ies) involved in 
the transaction. For a full discussion of this clarification, see id.

Cash Deposit Requirements

    The following cash deposit requirements will be effective upon 
completion of the final results of this administrative review for all 
shipments of SSB 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 
Act: (1) the cash deposit rate for the reviewed companies will be the 
rate established in the final results of this administrative review 
(except no cash deposit will be required if its weighted-average margin 
is de minimis); (2) if the exporter is not a firm covered in this 
review, but was covered in a previous review or the original less than 
fair value (``LTFV'') investigation, the cash deposit rate will 
continue to be the company-specific rate published for the most recent 
period; and (3) if neither the exporter nor the manufacturer is a firm 
covered in this or any previous reviews, or the original LTFV 
investigation, the cash deposit rate will be the rate established for 
the most recent period for the manufacturer of the merchandise; and (4) 
the cash deposit rate for all other manufacturers and/or exporters of 
this merchandise, shall be 12.45 percent, the all-others rate 
established in the LTFV investigation. See Notice of Final 
Determination of Sales at Less Than Fair Value: Stainless Steel Bar 
from India, 59 FR 66915 (December 28, 1994). These deposit 
requirements, when imposed, shall remain in effect until further 
notice.

Notification to Importers

    This notice also serves as a preliminary reminder to importers of 
their responsibility under 19 CFR 351.402(f)(2) to file a certificate 
regarding the reimbursement of antidumping duties prior to liquidation 
of the relevant entries during this review period. Failure to comply 
with this requirement could result in the Secretary's presumption that 
reimbursement of antidumping duties occurred and the subsequent 
assessment of double antidumping duties.
    We are issuing and publishing these preliminary results of review 
in accordance with sections 751(a)(1) and 777(i)(1) of the Act.

    Dated: March 8, 2010.
Ronald K. Lorentzen,
Deputy Assistant Secretary for Import Administration.
[FR Doc. 2010-5602 Filed 3-12-10; 8:45 am]
BILLING CODE 3510-DS-S