[Federal Register: January 28, 1997 (Volume 62, Number 18)]
[Notices]
[Page 4029-4032]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
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DEPARTMENT OF COMMERCE
A-533-810
Stainless Steel Bar From India: Final Results of New Shipper
Antidumping Duty Administrative Review
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
EFFECTIVE DATE: January 28, 1997.
FOR FURTHER INFORMATION CONTACT:
Vincent Kane or Todd Hansen, Import Administration, International Trade
Administration, U.S. Department of Commerce, 14th Street and
Constitution Avenue, N.W., Washington, D.C. 20230; telephone (202) 482-
2815 or 482-1276, respectively.
SUPPLEMENTARY INFORMATION:
Applicable Statute and Regulations
Unless otherwise indicated, all citations to the statute are
references to the provisions effective January 1, 1995, the effective
date of the amendments made to the Tariff Act of 1930 (``the Act'') by
the Uruguay Round Agreements Act. In addition, unless otherwise
indicated, all citations to the Department's regulations are to the
current regulations, as amended by the interim regulations published in
the Federal Register on May 11, 1995 (60 FR 25130).
Summary
On October 22, 1996, the Department of Commerce (the Department)
published the preliminary results of the new shipper antidumping duty
administrative review of the antidumping duty order on stainless steel
bar from India (61 FR 54774). The review covers two manufacturers/
exporters of the subject merchandise for the period February 1, 1995
through July 31, 1995. These manufacturers/exporters are Akai Asian
Ltd. (``Akai'') and Viraj Impoexpo Ltd. (``Viraj''). The Department
gave interested parties an opportunity to comment on our preliminary
results. Based on our analysis of the comments received, we have found
no basis to modify our preliminary results. therefore, we have adopted
the preliminary results of this review to be the final results, as
well.
Scope of the Review
For purposes of this administrative review, the term ``stainless
steel bar'' 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. Stainless steel bar includes cold-
finished stainless steel bars 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 length flat-rolled products (i.e.,
cut 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 have 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 stainless steel bar subject to this administrative review is
currently classifiable under subheadings 7222.11.0005, 7222.11.0050,
7222.19.0005, 7222.19.0050, 7222.20.0005, 7222.20,0045, 7222.20.0075,
and 7222.30.0000 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 this order is dispositive.
Interested Party Comments
In accordance with 19 CFR 353.38, we gave interested parties an
opportunity to comment. We received written comments from petitioners
and both responding companies.
Comment 1
Petitioners claim that Viraj had only one small shipment during the
POR which, in petitioners' view, was intended to allow Viraj's U.S.
customer to test or evaluate the merchandise. According to petitioners,
the balance of the order was not to be shipped until the U.S. customer
indicated its approval of the initial shipment. Petitioners claim that,
in view of the circumstances surrounding this first shipment, it is
clear that it was not a normal commercial shipment. Therefore, because
Viraj made no other shipments during the POR, it does not qualify as a
new shipper.
Viraj claims that, because it was a new producer, U.S. buyers were
not familiar with its product. The first small shipment was made at the
customer's request to enable it to market the goods in the United
States. Viraj also states that during verification, no evidence was
found to indicate that the balance of the order was in any way
contingent on the U.S. customer's acceptance of the initial shipment.
DOC Position
While the purchase order did specify an initial shipment of limited
quantity, neither the purchase order nor the confirmation contained any
language indicating that the balance of the order was contingent on the
acceptability of the first shipment. An examination of correspondence
files during verification also revealed nothing that would indicate
such a contingency. Therefore, we view this shipment as a normal
shipment occurring during the POR pursuant to a sale made during the
POR.
Comment 2
Petitioners claim that Viraj did not have a sale during the POR
because a substantial quantity of the goods remained unshipped long
after the delivery date specified in the confirmation order.
Petitioners maintain that Viraj's failure to ship a substantial
quantity by the date specified in the confirmation order resulted in a
change in the delviery date and, consequently, in the date of sale.
They claim that the delivery date was one of the substantive terms of
sale as demonstrated by Viraj revising the delivery date at the time it
issued the confirmation order to the customer. Petitioners conclude
that, because a substantive term of sale was changed, the date of sale
must be changed accordingly. Consequently, Viraj no longer has a sale
within the POR and the Department has no basis for conducting a review.
Viraj claims that both the purchase of the goods and initial
shipment of goods occurred during the POR. It contends that this
purchase and initial shipment alone are sufficient for the Department
to conduct a new shipper review. Further, a subsequent shipment
pursuant to the purchase order was made at the prices specified in the
purchase order and confirmation. Thus, the date of sale for that later
shipment is also the date of the purchase order and confirmation.
Viraj also notes that it is the Department's long established
practice to consider price and quantity as the essential terms of sale.
Delivery terms, however, have not been typically viewed as an essential
term of sale. Thus, changes in the delivery date should not affect the
date of sale.
DOC Position
Viraj accepted and confirmed an order from its U.S. customer during
the POR.
[[Page 4030]]
The order and confirmation clearly and definitively established the
price and quantity of the sale, and we have determined in this case
that the date of sale was the date of the order and confirmation. The
fact that a change occurred in the delivery date specified in the order
confirmation does not mean that the date of sale must also change. We
have typically considered delivery terms to be nonessential terms of
sale and have not regarded changes in delivery terms as affecting the
date of sale. See, e.g., Final Determination of Sales at Less Than Fair
Value: Oil Country Tubular Goods from Argentina (60 FR 33539, 33542,
June 28, 1995). In the present review, nothing in the purchase order or
confirmation indicated that special significance should be attached to
the delivery terms of the sale. In fact, the purchase order allowed
considerable flexibility with respect to the delivery date. Thus, the
essential terms of this contract are clearly price and quantity and
these remained unchanged from the original order and confirmation.
Therefore, we consider the date of sale to be the original order and
confirmation date.
We note that a portion of the goods subject to Viraj's sale
remained unshipped as of August 30, 1996, the last day of verification.
Consequently, this review was based on the goods actually shipped. For
these goods, we found that shipments were made pursuant to the
essential terms of the sales contract under review. In addition, in its
responses to the antidumping questionnaire and three supplemental
questionnaires, Viraj provided the Department with complete information
on the sale and the shipments made to date pursuant to the sale.
Further, the Department verified the responses during on site
verification at Viraj's premises in Maharashtra, India. Therefore,
although a part of the sales quantity has yet to be shipped, we
nonetheless view the sale as a bona fide sale, which properly serves as
the basis for a new shipper review: the shipments made to date pursuant
to the sale support this finding. If, for some reason, the terms and
conditions for the unshipped portion of this sale were to change, we
would address these changes in a future administrative review, assuming
that a review was requested.
Comment 3
Petitioners claim that the third country sale reported by Viraj did
not occur during the POR because delivery of the goods pursuant to this
sale did not take place until long after the date specified in the
order confirmation. Petitioners claim that delivery date is a
substantive term of sale and a change in the delivery date changes the
date of sale. In this case, the change in delivery date results in a
date of sale which falls outside the POR.
DOC Position
We disagree with petitioners. As explained in the DOC Position in
response to Comment 2, we have typically considered delivery terms to
be nonessential terms of sale and have not regarded changes in delivery
terms as affecting the date of sale.
Comment 4
Section 773(a)(1)(C) of the Act provides that particular market
situations in the home market or in third country markets may prevent
the Department from using these markets as the basis for normal value.
Petitioners cite page 150 of the Statement of Administrative Action
(SAA), which describes a particular market situation that might prevent
the Department from using a market for comparison purposes. The
particular market situation referred to in the SAA concerns a home
market where a single sale constitutes five percent of the sales to the
United States. In the stated example, petitioners claim the Department
is not able to determine whether the sale is in the ordinary course of
trade or in normal commercial quantities. Petitioners claim that
Viraj's sale for export to Canada falls into this category.
DOC Position
Neither the information supplied in Viraj's responses nor the
information obtained during verification gives the Department reason to
suspect that the Canadian sale was made outside the ordinary course of
trade. Specifically, with regard to the quantity of the sale, we
concluded that it did not appear to be either so extraordinarily large
or small as to be outside normal commercial quantities, based on our
examination of sales quantities sold for export to third countries.
Verification exhibits revealed that the quantity of these third country
sales was generally in line with the quantity of the Canadian sale.
Comment 5
Petitioners claim that although there is no equity relationship,
the Department should determine that Akai's U.S. customer is an
affiliated company based on the fact that Akai did not receive payment
from this customer for a considerable period of time after shipment of
the goods. Also, petitioners claim that certain information from
verification leads to the conclusion that Akai is affiliated with this
U.S. customer.
DOC Position
Late payment is not an uncommon business practice and, in and of
itself, does not provide a sufficient basis for concluding that Akai is
affiliated with its U.S. customer. In addition, the information
petitioners refer to from verification is not grounds for supporting
the conclusion that these two companies are affiliated. During
verification, we checked the records establishing Akai's affiliations
with other companies. We found no indication that an affiliation exists
between Akai and its U.S. customer. Also, in reviewing the books and
records of the company generally, we found no basis to conclude that
the companies were affiliated.
Comment 6
Petitioners claim that the Department should determine that an
affiliation exists between Akai and both its raw materials supplier and
its processor. Their argument is based on the fact that Akai did not
pay these companies for a considerable period of time after the goods
and services were rendered.
DOC Position
We disagree with petitioners. As explained in the DOC Position to
Comment 5, late payment of debts does not establish that the debtor and
creditor are affiliated.
Comment 7
Petitioners argue that the cost of production data submitted by
Viraj are irrelevant to this proceeding. Petitioners contend that Viraj
has admitted that it did not produce commercial quantities of the
subject merchandise during the POR. Thus, cost data submitted by Viraj
relates to a period outside the POR. Petitioners point to instructions
in the Department's questionnaire, which clearly require that cost data
must be calculated over the POR.
Viraj counters that the Department's standard practice is to use
costs outside the POR when little or no production has occurred during
the POR. Viraj states that since production did not begin until the
last month of the POR, it is reasonable, and consistent with past
practice, to use cost data from after the POR.
DOC Position
We agree with respondent. The Department normally uses weighted
average production data based on costs incurred during the POR.
However, in
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this case, most of the relevant production occurred outside the POR.
Therefore, for purposes of gathering cost information, we have modified
the cost reporting period to include the period when the bulk of the
goods were actually produced. In view of the limited production by
Viraj during the POR, we found it appropriate to include cost data from
the two month period following the POR, as well. (See, e.g.,
Antifriction Bearings (Other Thank Tapered Roller Bearings) and Parts
Thereof from the Federal Republic of Germany: Final Results of
Antidumping Duty Administrative Review (56 FR 31692, July 11, 1991.)
Comment 8
Petitioners argue that costs of production are not reliable because
the quantity sold does not correlate with Viraj's production during the
cost reporting period.
DOC Position
At verification we saw that Viraj's production during the cost
reporting period exceeded shipments of the subject merchandise. Part of
the excess was accounted for by merchandise that had been packed and
was awaiting shipment. The remaining part was accounted for by finished
merchandise waiting to be packed. The amount of unshipped goods on hand
did not appear to be unusual, especially in view of the fact that Viraj
was a new producer bringing its productive capacity online for the
first time. Therefore, we find no reason to question costs reported by
Viraj, merely because a balance of production remained on hand at the
end of the POR.
Comment 9
Petitioners claim that the Department has calculated a constructed
value based on 1995 costs for products which had not yet been shipped
as of September 1996 and which, presumably, had not yet been produced.
Petitioners claim that the 1995 cost data is inappropriate for goods
not yet shipped or produced as of September 1996.
DOC Position
We agree with petitioners. For the preliminary results, we included
the unshipped portion of Viraj's sale in our margin calculations, using
the constructed value data and movement charges that applied to goods
already shipped. For the final results, we have limited margin
calculations to those goods which have already been shipped and for
which relevant cost and sales data were reported in Viraj's responses
to our antidumping questionnaires.
Comment 10
Petitioners argue that the Department erred in its calculation of
constructed value for Akai because the Department did not account for
the value of scrap retained by a subcontractor hired by Akai.
Petitioners assert that if Akai had not allowed the subcontractor to
retain the scrap, the subcontractor would have demanded a higher
payment, and Akai's costs would have increased. Petitioners urge the
Department to include a cost for this scrap in Akai's constructed value
calculations.
Department's Position
By allowing the subcontractor to retain any scrap generated in the
subcontractor's conversion work, Akai has foregone a reduction in its
cost of materials in manufacturing the subject merchandise. By
including the gross weight of inputs into the production process in our
calculation of constructed value, we have accounted for all material
costs incurred by Akai. In other words, our calculations already
include the value of the scrap retained by the subcontractor since Akai
does not receive a reduction in its material costs associated with this
scrap.
Comment 11
Petitioners claim that the Department should include as part of
constructed value excise taxes paid in purchasing raw material, unless
those excise taxes have actually been rebated upon exportation of the
finished goods. Petitioners maintain that a portion of the merchandise
sold for export to the United States remained unshipped as of
verification. Therefore, the excise tax applicable to this portion of
the merchandise should be included as part of the constructed value
because it has not yet been rebated.
DOC Position
For these final results, we are doing antidumping calculations only
for merchandise which has actually been exported. (See Comment 9.)
During verification it was readily apparent that the excise tax on raw
materials was routinely rebated upon export of the finished product. An
examination of excise claim ledgers, excise duty credit registers, and
bank statements made it abundantly clear that the excise tax was
consistently rebated upon export. Therefore, in calculating constructed
value for merchandise actually exported, we did not include the excise
taxes paid in purchasing raw materials.
Final Results of Review
As a result of this review, we determine that the following
weighted-average dumping margins exist for the period February 1, 1995
through July 31, 1995:
------------------------------------------------------------------------
Manufacturer/exporter Margin
------------------------------------------------------------------------
Akai Asian.................................................... 4.83
Viraj......................................................... 0.00
------------------------------------------------------------------------
The results of this review shall be the basis for the assessment of
antidumping duties on entries of merchandise covered by the review and
for future deposits of estimated duties for the manufacturers/exporters
subject to this review. The posting of a bond or security in lieu of a
cash deposit, pursuant to section 751(a)(2)(B)(iii) of the Act and
section 353.22(h)(4) of the Department's regulations, will no longer be
permitted. The Department will issue appraisement instructions directly
to the Customs Service.
Furthermore, the following deposit requirements will be effective
for all shipments of the subject merchandise entered, or withdrawn from
warehouse, for consumption on or after the publication date of these
final results of this administrative review, as provided by section
751(a)(2)(C) of the Act: (1) the cash deposit rate for the reviewed
companies will be that established in the final results of this new
shipper administrative review; (2) for companies not covered in this
review, but covered in previous review or the original less than fair
value investigation, the cash deposit rate will continue to be the
company-specific rate published for the most recent period; (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 the most recent rate established for the manufacturer of the
merchandise; and (4) if neither the exporter nor the manufacture is a
firm covered in this or any previous review or the original
investigation, the cash deposit rate will be the ``all others'' rate of
12.45 percent established in the final determination of sales at less
than fair value. (59 FR 66915, December 28, 1994).
These deposit requirements will remain in effect until publication
of the final results of the next administrative review.
This notice also serves as a final reminder to importers of their
responsibility under 19 CFR 353.26 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
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antidumping duties occurred and the subsequent assessment of double
antidumping duties.
This notice also serves as a reminder to parties subject to
administrative protective orders (APOs) of their responsibility
concerning the disposition of proprietary information disclosed under
APO in accordance with 19 CFR 353.34(d)(1). Timely written notification
of the return/destruction of APO materials or conversion to judicial
protective order is hereby requested. Failure to comply with the
regulations and the terms of an APO is a sanctionable violation.
This administrative review and notice are in accordance with
section 751(a)(2)(B) of the Tariff Act (19 U.S.C. 1675(a)(2)(B)) and 19
CFR 353.22(h).
Dated: January 16, 1997.
Robert S. LaRussa,
Acting Assistant Secretary for Import Administration.
[FR Doc. 97-2053 Filed 1-27-97; 8:45 am]
BILLING CODE 3510-DS-M