[Federal Register: June 24, 2004 (Volume 69, Number 121)]
[Notices]
[Page 35296-35312]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr24jn04-30]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-570-888]
Notice of Final Determination of Sales at Less Than Fair Value:
Floor-Standing, Metal-Top Ironing Tables and Certain Parts Thereof From
the People's Republic of China
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
ACTION: Notice of final determination of sales at less than fair value.
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DATES: Effective Date: June 24, 2004.
FOR FURTHER INFORMATION CONTACT: Paige Rivas or Sam Zengotitabengoa,
AD/CVD Enforcement, Office 4, Group II, Import Administration,
International Trade Administration, U.S. Department of Commerce, 14th
Street and Constitution Avenue, NW., Washington, DC 20230; telephone:
(202) 482-0651 or (202) 482-4195, respectively.
SUPPLEMENTARY INFORMATION:
Final Determination
We determine that floor-standing, metal-top ironing tables and
certain parts thereof (ironing tables) from the People's Republic of
China (PRC) are being sold, or are likely to be sold, in the United
States at less than fair value (LTFV), as provided in section 735 of
the Tariff Act of 1930, as amended (the Act). The estimated margins of
sales at LTFV are shown in the ``Final Determination of Investigation''
section of this notice.
Case History
On February 3, 2004, the Department of Commerce (the Department)
published the preliminary determination of sales at LTFV in the
antidumping duty investigation of ironing tables from the PRC. See
Notice of Preliminary Determination of Sales at Less Than Fair Value:
Floor-Standing, Metal-Top Ironing Tables and Certain Parts Thereof from
the People's Republic of China, 69 FR 5127 (February 3, 2004)
(Preliminary Determination). Since the preliminary determination, the
following events have occurred.
On February 3, 2004, Shunde Yongjian Housewares Co. Ltd.
(Yongjian), a mandatory respondent in this investigation, requested a
full postponement of the final determination. Accordingly, on February
19, 2004, the Department published the postponement of the final
determination from April 10, 2003, until June 13, 2004. See Floor-
Standing, Metal-Top Ironing Tables and Certain Parts Thereof From the
People's Republic of China: Postponement of Final Antidumping
Determination, 69 FR 8625 (February 25, 2004). From February 23, 2004,
through March 8, 2004, the Department conducted a sales and factors of
production verification of Yongjian and Since Hardware (Guangzhou) Co.,
Ltd. (Since Hardware), the other mandatory respondent in this
investigation. On March 4, 2004, the petitioner \1\ filed a request for
a public hearing in this investigation, but then withdrew its request
on May 5, 2004. Since Hardware and Yongjian filed publicly available
surrogate value information and data on March 29, 2004. The respondents
filed case briefs on April 29, 2004, and the petitioner filed its case
brief on April 30, 2004. The respondents filed rebuttal briefs on May
4, 2004, and the petitioner filed its rebuttal brief on May 5, 2004.
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\1\ The petitioner in this case is Home Products International,
Inc. (HPI).
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Due to the unexpected closure of the main Commerce building on
Friday, June, 11, 2004, the Department has tolled the deadline for this
final determination by two days to June 15, 2004.
Period of Investigation
The period of investigation (POI) is October 1, 2002, through March
31, 2003. This period corresponds to the two most recent fiscal
quarters prior to the month of the filing of the petition (i.e., June
2003). See 19 CFR 351.204(b)(1).
Scope of Investigation
For purposes of this investigation, the product covered consists of
floor-standing, metal-top ironing tables, assembled or unassembled,
complete or incomplete, and certain parts thereof. The subject tables
are designed and used principally for the hand ironing or pressing of
garments or other articles of fabric. The subject tables have full-
height leg assemblies that support the ironing surface at an
appropriate (often adjustable) height above the floor. The subject
tables are produced in a variety of leg finishes, such as painted,
plated, or matte, and they are available with various features,
including iron rests, linen racks, and others. The subject ironing
tables may be sold with or without a pad and/or cover. All types and
configurations of floor-standing, metal-top ironing tables are covered
by this investigation.
Furthermore, this investigation specifically covers imports of
ironing
[[Page 35297]]
tables, assembled or unassembled, complete or incomplete, and certain
parts thereof. For purposes of this investigation, the term
``unassembled'' ironing table means a product requiring the attachment
of the leg assembly to the top or the attachment of an included feature
such as an iron rest or linen rack. The term ``complete'' ironing table
means a product sold as a ready-to-use ensemble consisting of the
metal-top table and a pad and cover, with or without additional
features, e.g. iron rest or linen rack. The term ``incomplete'' ironing
table means a product shipped or sold as a ``bare board''--i.e., a
metal-top table only, without the pad and cover--with or without
additional features, e.g. iron rest or linen rack. The major parts or
components of ironing tables that are intended to be covered by this
investigation under the term ``certain parts thereof'' consist of the
metal top component (with or without assembled supports and slides)
and/or the leg components, whether or not attached together as a leg
assembly. The investigation covers separately shipped metal top
components and leg components, without regard to whether the respective
quantities would yield an exact quantity of assembled ironing tables.
Ironing tables without legs (such as models that mount on walls or
over doors) are not floor-standing and are specifically excluded.
Additionally, tabletop or counter top models with short legs that do
not exceed 12 inches in length (and which may or may not collapse or
retract) are specifically excluded.
The subject ironing tables were previously classified under
Harmonized Tariff Schedule of the United States (HTSUS) subheading
9403.20.0010. Effective July 1, 2003, the subject ironing tables are
classified under the new HTSUS subheading 9403.20.0011. The subject
metal top and leg components are classified under HTSUS subheading
9403.90.8040. Although the HTSUS subheadings are provided for
convenience and customs purposes, the written description of the scope
remains dispositive.
Analysis of Comments Received
All issues raised in the case and rebuttal briefs by parties to
this proceeding, and to which we have responded, are listed in the
Appendix to this notice and addressed in the Issues and Decision
Memorandum, which is hereby adopted by this notice. See Memorandum from
Holly A. Kuga, Acting Deputy Assistant Secretary for Import
Administration, Office II, to James Jochum, Assistant Secretary for
Import Administration, ``Issues and Decision Memorandum for the Final
Determination in the Antidumping Duty Investigation of Floor-Standing,
Metal-Top Ironing Tables and Certain Parts Thereof from the People's
Republic of China,'' dated concurrently with this notice, (Issues and
Decision Memorandum) on file in the Central Records Unit (CRU) located
in room B-099 of the Main Commerce Building.) and accessible on the
Internet at http://ia.ita.doc.gov. The paper copy and electronic
version of the Issues and Decision Memorandum are identical in content.
Non-Market Economy Country Status
The Department has treated the PRC as a non-market economy (NME)
country in all its past antidumping investigations. See Notice of Final
Determination of Sales at Less Than Fair Value: Certain Circular Welded
Carbon-Quality Steel Pipe from the People's Republic of China, 67 FR
36570, 36571 (May 24, 2002); and Notice of Final Determination of Sales
at Less Than Fair Value: Structured Steel Beams from the People's
Republic of China, 67 FR 35479, 35480 (May 20, 2000); and Notice of
Final Determination of Sales at Less Than Fair Value Certain: Folding
Metal Tables and Chairs from the People's Republic of China, 67 FR
20090 (April 24, 2002). In accordance with section 771(18)(C) of the
Act, any determination that a foreign country is an NME country shall
remain in effect until revoked. No party to this investigation has
sought revocation of the NME status of the PRC. Therefore, pursuant to
section 771(18)(C) of the Act, the Department will continue to treat
the PRC as an NME country. For further details, see the Preliminary
Determination.
Separate Rates
In our Preliminary Determination, we found that both mandatory
responding companies, Since Hardware and Yongjian, and three of the
four companies responding to Section A of the Department's
questionnaire, Forever Holdings Ltd. (Forever Holdings), Gaoming Lihe
Daily Necessities Co., Ltd. (Gaoming Lihe), and Harvest International
Housewares Ltd. (Harvest International), met the criteria for the
application of separate, company-specific antidumping duty rates. We
have not received any other information since the preliminary
determination which would warrant reconsideration of our separates
rates determination with respect to these companies. For a complete
discussion of the Department's determination that the respondents are
entitled to a separate rate, see the Preliminary Determination.
The PRC-Wide Rate
In all NME cases, the Department makes a rebuttable presumption
that all exporters located in the NME country comprise a single
exporter under common government control, the ``NME entity.'' See
Notice of Final Determination of Sales at Less Than Fair Value:
Bicycles From the People's Republic of China, 61 FR 19026, 19027 (April
30, 1996) (Bicycles from the PRC). Although the Department provided all
known PRC exporters of the subject merchandise with the opportunity to
respond to our initial questionnaire, only Since Hardware, Yongjian,
Forever Holdings, Gaoming Lihe, Harvest International, and Lerado
responded. However, because other PRC companies did not submit a
response to the Department's Section A quantity and value question, as
discussed above in the ``Case History'' section of the Preliminary
Determination, and did not demonstrate their entitlement to a separate
rate, we have implemented the Department's rebuttable presumption that
these exporters constitute a single enterprise under common control by
the PRC government. Accordingly, we are applying adverse facts
available to determine the single antidumping duty rate, the PRC-wide
rate, applicable to all other PRC exporters comprising this single
enterprise. See, e.g., Final Determination of Sales at Less Than Fair
Value: Synthetic Indigo from the People's Republic of China, 65 FR
25706, 25707 (May 3, 2000).
Surrogate Country
For purposes of the final determination, we continue to find that
India remains the appropriate surrogate country for the PRC. For
further discussion and analysis regarding the surrogate country
selection for the PRC, see the Preliminary Determination.
Verification
As provided in section 782(i) of the Act, we verified the
information submitted by the respondents for use in our final
determination. We used standard verification procedures including
examination of relevant accounting and production records, and original
source documents provided by the respondents. For changes from the
Preliminary Determination as a result of verification, see the
``Changes Since the Preliminary Determination'' section below.
[[Page 35298]]
Changes Since the Preliminary Determination
Based on our findings at verification and on our analysis of the
comments received, we have made adjustments to the calculation
methodologies used in the preliminary determination. These adjustments
are listed below and discussed in detail in the: (1) Issues and
Decision Memorandum; (2) Memorandum from Sam Zengotitabengoa,
International Trade Compliance Analyst, Group II, Office 4, to the
File, ``Surrogate Country Factors of Production Values in the Final
Determination of the Antidumping Duty Investigation on Floor-Standing,
Metal-Top Ironing Tables and Certain Parts Thereof from the People's
Republic of China,'' dated concurrently with this notice, (Surrogate
Factors Valuation Memo); and, (3) Memorandum from Sam Zengotitabengoa,
International Trade Compliance Analyst, Group II, Office 4, to the
File, ``Since Hardware's Margin Calculation Analysis for the Final
Determination in the Antidumping Duty Investigation of Floor-Standing,
Metal-Top Ironing Tables and Certain Parts Thereof from the People's
Republic of China,'' dated concurrently with this notice (Since
Hardware's Calculation Memorandum), and Memorandum from Sam
Zengotitabengoa, International Trade Compliance Analyst, Group II,
Office 4, to the File, ``Yongjian's Margin Calculation Analysis for the
Final Determination in the Antidumping Duty Investigation of Floor-
Standing, Metal-Top Ironing Tables and Certain Parts Thereof from the
People's Republic of China,'' dated concurrently with this notice
(Yongjian's Calculation Memorandum).
1. We revised the PRC labor rate. See Issues and Decision
Memorandum, at Comment 2.
2. We revised the calculation of inland truck freight. See Issues
and Decision Memorandum, at Comment 3.
3. We revised our surrogate value for PE septa. See Issues and
Decision Memorandum, at Comment 4-B.
4. We revised our surrogate value of stainless steel. See Issues
and Decision Memorandum, at Comment 4-C.
5. We revised our surrogate value of welding wire. See Issues and
Decision Memorandum, at Comment 4-D.
6. We revised our surrogate value of pigment. See Issues and
Decision Memorandum, at Comment 4-E.
7. We revised our surrogate value for silica gel parts. See Issues
and Decision Memorandum, at Comment 4-F.
8. We revised our surrogate value for cotton rope. See Issues and
Decision Memorandum, at Comment 4-H.
9. We revised our surrogate value for glue. See Issues and Decision
Memorandum, at Comment 4-J.
10. We revised our surrogate value for cotton fixing strips. See
Issues and Decision Memorandum, at Comment 4-K.
11. We revised our surrogate value for cold rolled steel. See
Issues and Decision Memorandum, at Comment 6 and Comment 6-A.
12. We revised our surrogate value for hot rolled steel. See Issues
and Decision Memorandum, at Comment 6-B.
13. We revised our surrogate value for steel wire rod. See Issues
and Decision Memorandum, at Comment 6-C.
14. We revised our surrogate value for powder coating. See Issues
and Decision Memorandum, at Comment 6-F.
15. We did not grant Since Hardware's billing adjustment. See
Issues and Decision Memorandum, at Comment 9.
16. We revised the surrogate financial ratios for overhead, SG&A,
and profit. See Issues and Decision Memorandum, at Comment 10.
17. We revised the data contained in Yongjian's factors of
production database, based on our findings at verification. See Issues
and Decision Memorandum, at Comment 11.
18. We revised the inland freight distances for the materials whose
values were either not reported or mis-reported at the preliminary
determination. See Surrogate Factors Valuation Memo.
Continuation of Suspension of Liquidation
In accordance with section 735(c)(1)(B)(ii) of the Act, we are
directing U.S. Customs and Border Protection (CBP) to continue
suspension liquidation of entries of subject merchandise from the PRC
that are entered, or withdrawn from warehouse, for consumption on or
after February 3, 2004 (the date of publication of the Preliminary
Determination in the Federal Register). We will instruct CBP to require
a cash deposit or the posting of a bond equal to the weighted-average
amount by which NV exceeds the U.S. price, as indicated in the chart
below. These suspension-of-liquidation instructions will remain in
effect until further notice.
Final Determination of Investigation
We determine that the following weighted-average percentage margins
exist for the period October 1, 2002, through March 31, 2003:
------------------------------------------------------------------------
Weighted-
average
Manufacturer/exporter margin
(percent)
------------------------------------------------------------------------
Since Hardware (Guangzhou) Co., Ltd........................ 6.60
Shunde Yongjian Housewares Co., Ltd........................ 113.80
Forever Holdings Ltd....................................... 52.04
Gaoming Lihe Daily Necessities Co., Ltd.................... 52.04
Harvest International Housewares Ltd....................... 52.04
PRC-Wide Rate.............................................. 113.80
------------------------------------------------------------------------
The PRC-wide rate applies to all entries of the subject merchandise
except for entries from Since Hardware, Yongjian, Forever Holdings,
Harvest International, and Gaoming Lihe.
International Trade Commission Notification
In accordance with section 735(d) of the Act, we have notified the
International Trade Commission (ITC) of our determination. As our final
determination is affirmative, the ITC will determine, within 45 days,
whether these imports are materially injuring, or threaten material
injury to, the U.S. industry. If the ITC determines that material
injury, or threat of material injury does not exist, the proceeding
will be terminated and all securities posted will be refunded or
cancelled. If the ITC determines that such injury does exist, the
Department will issue an antidumping duty order directing CBP officials
to assess antidumping duties on all imports of subject merchandise
entered for consumption on or after the effective date of the
suspension of liquidation.
Notification Regarding Administrative Protective Order
This notice also serves as a reminder to parties subject to
administrative protective order (APO) of their responsibility
concerning the disposition of proprietary information disclosed under
APO in accordance with 19 CFR 351.305. Timely notification of 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 determination is issued and published in accordance with
sections 735(d) and 777(i)(1) of the Act.
[[Page 35299]]
Dated: June 15, 2004.
James J. Jochum,
Assistant Secretary, for Import Administration.
Appendix--Issues and Decision Memorandum
Comment 1: Whether the Department Should Correct Alleged Ministerial
Errors in the Preliminary Determination
Comment 2: Whether the Department Should Use the Most Current Wage
Rate for China
Comment 3: Whether the Department Should Correct Surrogate Values
for Inland Freight and Brokerage and Handling
Comment 4: Whether the Department Should Use Different Harmonized
Tariff Classifications for Certain Material Inputs
Comment 5: Whether the Department Used the Best Available Data
Source To Value Certain Material Inputs
Comment 6: Whether the Department Used Aberrant Surrogate Values for
Certain Material Inputs
Comment 7: Whether the Department Should Accept Since Hardware's
Market Economy Purchases That Were Not Verified by the Department
Comment 8: Whether the Department Should Use the Market Economy
Price to Value Cold-Rolled Steel Inputs
Comment 9: Whether the Department Should Consider Billing
Adjustments in the Calculation of Since Hardware's U.S. Price
Comment 10: Whether the Department Selected the Proper Data Source
for its Calculation of Surrogate Overhead, SG&A, and Profit Ratios
Comment 11: Corrections Arising From Verification
A-570-888, Investigation, POI: 10/01/2002-3/31/2003, Public
Document, GIIO4:SZ.
Memorandum to: James Jochum, Assistant Secretary for Import
Administration.
From: Holly A. Kuga, Acting Deputy Assistant Secretary for Import
Administration, Office II.
Subject: Issues and Decision Memorandum for the Final Determination
in the Antidumping Duty Investigation of Floor-Standing, Metal-Top
Ironing Tables and Certain Parts Thereof From the People's Republic
of China.
Summary: We have analyzed the comments and rebuttal comments of
the interested parties in the antidumping duty investigation of
floor-standing, metal-top ironing tables and certain parts thereof
(ironing tables) from the People's Republic of China (PRC). As a
result of our analysis of the preliminary determination, we have
made changes in the margin calculations, including corrections of
certain inadvertent errors. We recommend that you approve the
positions we have developed in the ``Discussion of the Issues''
section of this memorandum for this final determination.
Below is the complete list of issues in this investigation for
which we received comments and rebuttal comments from Home Products
International, Inc. (the petitioner), and the respondents, Since
Hardware (Guangzhou) Co., Ltd., (Since Hardware), and Shunde
Yongjian Housewares Co., Ltd. (Yongjian):
Comment 1: Whether the Department Should Correct Alleged Ministerial
Errors in the Preliminary Determination
Comment 2: Whether the Department Should Use the Most Current Wage
Rate for China
Comment 3: Whether the Department Should Correct Surrogate Values
for Inland Freight and Brokerage and Handling
Comment 4: Whether the Department Should Use Different Harmonized
Tariff Classifications for Certain Material Inputs
Comment 5: Whether the Department Used the Best Available Data
Source to Value Certain Material Inputs
Comment 6: Whether the Department Used Aberrant Surrogate Values for
Certain Material Inputs
Comment 7: Whether the Department Should Accept Since Hardware's
Market Economy Purchases That Were Not Verified by the Department
Comment 8: Whether the Department Should Use the Market Economy
Price To Value Cold-Rolled Steel Inputs
Comment 9: Whether the Department Should Consider Billing
Adjustments in the Calculation of Since Hardware's U.S. Price
Comment 10: Whether the Department Selected the Proper Data Source
for its Calculation of Surrogate Overhead, SG&A, and Profit Ratios
Comment 11: Corrections Arising From Verification
Background
On February 3, 2004, the Department of Commerce (the Department)
published the preliminary determination in the less-than-fair-value
investigation of ironing tables from the PRC. See Notice of
Preliminary Determination of Sales at Less Than Fair Value: Floor-
Standing, Metal-Top Ironing Tables and Certain Parts Thereof from
the People's Republic of China, 69 FR 5127 (February 3, 2004)
(Preliminary Determination). The products covered by this
investigation are certain ironing tables. The period of
investigation (POI) is October 1, 2002, through March 31, 2003.
We invited parties to comment on the preliminary determination.
The respondents filed case briefs on April 29, 2004, and the
petitioner filed its case brief on April 30, 2004. The respondents
filed rebuttal briefs on May 4, 2004, and the petitioner filed its
rebuttal brief on May 5, 2004. On June 2, 2004, we received
additional comments from Yongjian. On June 10, 2004, we returned the
comments to Yongjian as untimely submitted and removed the
submission from the official record. Based on our analysis of the
comments received, as well as our findings at verification, we have
changed the weighted-average margins from those presented in the
preliminary determination.
Discussion of the Issues
Comment 1: Whether the Department Should Correct Alleged Ministerial
Errors in the Preliminary Determination
Since Hardware claims that in the Preliminary Determination, the
Department made two ministerial errors in the margin calculation
program that must be corrected for the final determination. See
Comments from Adams C. Lee, Counsel to Since Hardware, to the
Honorable Donald L. Evans, Secretary of Commerce, ``Since Hardware's
Case Brief,'' dated April 29, 2004 (Since Hardware's Case Brief), at
1-3.
First, Since Hardware contends that, in calculating the
deduction for domestic inland freight and brokerage and handling,
the Department inadvertently added the weight for the pads and
covers inputs to the reported WEIGHT variable. Since Hardware states
that, at verification, the Department confirmed that the total
weight of each product reported in the field WEIGHT includes both
the weight of the material inputs used for the metal ironing board
and, also, the inputs used to produce the ironing board pad and
cover. See Since Hardware's Case Brief, at 2, citing to Since
Hardware Factors of Production Verification Exhibits, Exhibit 5,
page 1, including handwritten notes from the Department's verifier
stating that the reported product weight for production code SFT28-
I-1454 is reported ``w/ pad, cover, string.'' Since Hardware urges
that the Department correct this error for the purposes of the final
determination.
Second, Since Hardware and Yongjian allege that the Department
improperly added the cost of packing materials to the total cost of
manufacturing prior to the application of the surrogate overhead
ratio. Since Hardware notes that it has been the Department's
practice to add packing costs in its normal value calculation after
the application of the surrogate financial ratios. See Since
Hardware's Case Brief, at 2 and 3; See Rebuttal Comments from
Francis J. Sailer, Counsel for Shunde Yongjian Housewares Co., Ltd.,
to the Honorable Donald L. Evans, Secretary of Commerce,
``Yongjian's Rebuttal Brief,'' dated May 4, 2004 (Yongjian's
Rebuttal Brief), at 3 and 4. Since Hardware and Yongjian urge that
the Department correct this error for the purposes of the final
determination.
In rebuttal, the petitioner claims that various errors alleged
by Since Hardware do not warrant correction by the Department. The
petitioner notes that the Department was justified in adding pad and
cover materials to Since Hardware's reported WEIGHT variable for
purposes of calculating adjustments for domestic inland freight and
brokerage and handling. The petitioner claims that the record does
not show that Since Hardware included the pad and cover weights in
the reported WEIGHT values. The petitioner points out that the only
product unit weight reference by Since Hardware with respect to the
factors of production data is the ``unit steel weight of each
product'' used to derive a steel consumption ratio and recovered
steel scrap figure. Id., at 45 and 46. Moreover, the petitioner
states that the Since Hardware Cost Verification Report does not
[[Page 35300]]
support Since Hardware's claim that the reported total weights
include the weight of pads and covers. In fact, the petitioner
claims that, with respect to component weights (not the reported
total product weight), the Since Hardware Cost Verification Report
states that the verifiers ``took apart the selected ironing boards
model * * * and weighed the actual weight of the above-mentioned
materials and compared the weights to the weights reported * * *.''
Therefore, the petitioner argues, the materials were weighed
separately and not included in the weight of the bare board.
According to the petitioner, Since Hardware's allegation of double-
counting the pad and cover weights should be disregarded. See
Comments from Roberta Kinsela Daghir, Counsel to Home Products
International Inc., to the Honorable Donald L. Evans, Secretary of
Commerce, ``Petitioner's Case Brief,'' dated April 30, 2004
(Petitioner's Case Brief).
Department's Position: We agree with the petitioner. In the
Preliminary Determination, the Department (1) properly added pad and
cover weights to Since Hardware's WEIGHT variable, in order to
achieve a proper full weight for purposes of calculating adjustments
for domestic inland freight and brokerage and handling, and (2)
appropriately added packing to each of the respondent's total cost
of manufacturing in the build up to normal value. Therefore, the
Department did not make two ministerial errors in the margin
calculation program.
In order to calculate the deduction for domestic inland freight
and brokerage and handling, the Department must use the total weight
of the merchandise being transported and handled. The record
indicates that ``Since Hardware has reported the weight of the bare
board product (i.e. without pad and cover) * * *.'' See Since
Hardware's Sections C and D Questionnaire Response, dated October
14, 2003, at 5. For the calculation of Since Hardware's margin in
the preliminary determination, the Department stated that Since
Hardware's WEIGHT field represents the ``bare weight of the ironing
board* * *.'' See Memorandum to the File from Sam Zengotitabengoa,
Import Compliance Specialist, to the File, ``Since Hardware's Margin
Calculation Analysis for the Preliminary Determination in the
Antidumping Duty Investigation of Floor-Standing, Metal-Top Ironing
Tables and Certain Parts Thereof from the People's Republic of
China,'' dated January 26, 2004. As a result of Since Hardware's
response that its WEIGHT variable includes only the bare weight of
the ironing board, the Department added the pad, cover, and packing
material weights to the WEIGHT variable. Therefore, by adding the
weight of the pad, cover, and packing materials to the weight of the
bare board weight reported in the field WEIGHT, the Department
obtained the total weight of the ironing board, which is required in
order to calculate the selling expense deductions for domestic
inland freight and brokerage and handling.
At verification, the Department's verifiers found no
discrepancies in Since Hardware's questionnaire response with regard
to the weight of the bare board reported in the field WEIGHT. See
Memorandum from Paige Rivas and Sam Zengotitabengoa, Import
Compliance Specialists, to Tom Futtner, Acting Office Director,
``Report on the Verification of the Questionnaire Responses of Since
Hardware,'' dated April 20, 2004. With respect to Since Hardware's
allegation that the verifiers' handwritten note confirms that the
weight reported in the field WEIGHT includes the pad and cover
weight, we disagree. The handwritten note does not verify that Since
Hardware's reported product weight for production code SFT28-I-1454
includes ``* * *pad, cover, string.'' In this note, the verifiers
were referring, instead, to the verifiers' methodology. The
verifiers measured the reported WEIGHT of the bare board, as well as
the other components associated with production code SFT28-I-1454.
The verifiers' note indicates that the pad, cover, and string were
also measured but the verified weights were not taken as an exhibit.
As the final verification report indicates, the Department's
verifiers noted no discrepancies in Since Hardware's bare board
WEIGHT questionnaire response. Therefore, for this final
determination, the Department will continue to calculate Since
Hardware's adjustment for domestic inland freight and brokerage and
handling by adding the pad and cover weights with the weight of the
bare board reported in the field WEIGHT.
Second, Since Hardware alleges that the Department mistakenly
added packing costs to the normal value calculation before the
application of the surrogate financial ratios. We disagree that this
methodology is incorrect. In this case, the Department was not able
to separately identify packing costs in the financial statements of
Godrej & Boyce Manufacturing Co., Ltd. (Godrej), the company used to
calculate the financial ratios used in our calculation of normal
value. Because it is reasonable to assume that all expenses are
included in any income statement, we know that packing costs are
included in the Godrej data. Although packing is not presented as a
separate line item within the Godrej's data, the primary line item
used by the Department in calculating the cost of manufacture is
``raw materials consumed.'' Furthermore, we note that Schedule T of
the income statement provides a list of the items that constitute
new materials consumed, one of which is titled ``others.'' Since
companies frequently include packing materials in the cost of
manufacturing, it is reasonable to assume that packing costs are
included in this line item. In the Preliminary Determination
calculation build up to normal value, the Department added the cost
of packing materials to the cost of manufacturing prior to the
application of the surrogate financial ratio in order to apply these
ratios in a manner consistent with how the ratios were calculated.
Therefore, for this final determination, the Department continues to
add packing to the cost of manufacturing in the calculation build up
to normal value.
Comment 2: Whether the Department Should Use the Most Current Wage Rate
for China
The petitioner contends that the data source used to derive the
PRC's labor wage rate was last updated on May 14, 2003, subsequent
to the Preliminary Determination. As such, for this final
determination, the petitioner urges the Department to value the wage
rate for the PRC by incorporating the most current and
contemporaneous data available. See Petitioner's Case Brief, at 11.
Department's Position: We agree with the petitioner. The
Department will value the PRC's labor wage rate using the most
current labor rate of USD 0.90/hr. See ``Expected Wages of Selected
Non-market Economy Countries, 2001 Income Data,'' Revised September
2003, as published by the Department at http://ia.ita.doc.gov/wages/01wages/01wages.html
.
Comment 3: Whether the Department Should Correct Surrogate Values for
Inland Truck Freight and Brokerage and Handling
Yongjian argues that the surrogates that the Department used to
value inland truck freight and brokerage and handling in the
Preliminary Determination are based on stale and unreliable data.
For this final determination, Yongjian urges the Department to use
the data it submitted in calculating the surrogate values for inland
truck freight and brokerage and handling. See Comments from Francis
J. Sailer, Counsel for Shunde Yongjian Housewares Co., Ltd., to the
Honorable Donald L. Evans, Secretary of Commerce, ``Yongjian's Case
Brief,'' dated April 29, 2004 (Yongjian's Case Brief), at 21 and 22.
Yongjian contends that, for the final determination, the
Department should value inland truck freight using data from
InFreight.com, rather than the 17 Indian freight company quotes, for
shipping tapered roller bearings, from November 1999 that were used
in the Preliminary Determination. Yongjian notes that the data from
InFreight.com were originally used by the Department in the
preliminary determination of Carrier Bags from the PRC. See Notice
of Preliminary Determination of Sales at Less Than Fair Value and
Postponement of Final Determination: Polyethylene Retail Carrier
Bags from the People's Republic of China, 69 FR 3544, 3546 (January
26, 2004) (Carrier Bags Prelim).
Yongjian also notes that, in the Preliminary Determination, the
Department relied on data derived from Certain Stainless Steel Wire
Rod from India: Final Results of Administrative Review and New
Shipper Review, 64 FR 856 (January 6, 1999) (Indian Wire Rod) to
calculate surrogate values for brokerage and handling. The surrogate
value from Indian Wire Rod is from 1997 and was obtained from an
Indian broker. Yongjian asserts there are two reasons to reject
these data in the final determination: (1) They are stale compared
to alternative and nearly contemporaneous data; and (2) they are
improper for use in this case since they are premised on a high
value product. Therefore, Yongjian urges the Department to use the
data it submitted, which the Department used in Carrier Bags Prelim,
to value brokerage and handling in the final determination. See
Yongjian's Case Brief, at 22.
Department's Position: We agree with Yongjian, in part.
With regard to inland truck freight, we agree with Yongjian that
the Department
[[Page 35301]]
should calculate the surrogate value using data obtained from
InFreight.com. According to the InFreight.com Web site, we note that
``InFreight.com is a privately held Limited Liability Company,''
which provides ``a vertical {business-to-business{time} portal that
covers all the critical aspects of the Indian road transport
industry* * *.'' See http://InFreight.com/. InFreight.com provides
publicly available Indian truck freight rates as a flat fee for
transportation between specified cities. Based on an InFreight.com
data query, we were able to obtain Indian inland freight rates from/
to six major Indian cities for the week of January 8, 2003. Because
the POI is October 2002 to March 2003, we find InFreight.com data is
contemporaneous with the POI whereas the 17 Indian freight company
quotes from November 1999 are not. Furthermore, the inland truck
freight surrogate value is used in our calculations to value the
freight for many different raw material inputs, in addition to
complete ironing boards. For this reason, we also find the truck
freight surrogate value from InFreight.com, which is not limited to
only a shipment of one product, to be the better surrogate value
than the November 1999 Indian freight company quotes, which are only
for shipments of tapered roller bearings. Therefore, for this final
determination, the Department will rely on the data from
InFreight.com to value inland freight. See ``Yongjian's Margin
Calculation Analysis for the Final Determination in the Antidumping
Duty Investigation of Floor-Standing, Metal-Top Ironing Tables and
Certain Parts Thereof from the People's Republic of China,'' dated
June 15, 2004.
With regard to brokerage and handling, we disagree with Yongjian
that the Department should value brokerage and handling based on the
surrogate value used in the Carrier Bags Prelim. In choosing the
appropriate surrogate value for the final determination, we examined
whether the surrogate data are both product-specific and
contemporaneous. The surrogate value used for brokerage and handling
in the Preliminary Determination is based on a 1997 brokerage and
handling charge for a shipment of stainless steel wire rod. See
Memorandum from Sam Zengotitabengoa, International Trade Compliance
Analyst, to the File, ``Surrogate Country Factors of Production
Values,'' dated January 26, 2004, at Exhibit 72, containing the
original source documentation. In Yongjian's surrogate value
submission, Yongjian suggests that the Department use the 1999-2000
surrogate value for brokerage and handling from the Carrier Bags
Prelim. However, in its submission, Yongjian did not include a copy
of its source documents that support its brokerage and handling
value. Without source documents that substantiate the surrogate
value advocated by Yongjian (e.g., source documents that identify
how the value was calculated and that confirm the reported units),
we find the surrogate value used in the Preliminary Determination to
be more reliable than Yongjian's suggested value. Furthermore,
although Yongjian claims that the surrogate value used in the
Preliminary Determination is inappropriate because it is based on
brokerage and handling charges for a shipment of stainless steel
wire rod, which is a high value product, Yongjian provided no
evidence to demonstrate that the surrogate value is based on ad
valorem charges. Therefore, we have continued to value brokerage and
handling using brokerage and handling charges reported in Indian
Wire Rod.
Comment 4: Whether the Department Should Modify Harmonized System
Tariff Classifications for Certain Material Inputs
A. Muriate of Potash
For the Preliminary Determination, the Department valued muriate
of potash using HS 2815.2000, the subheading for potassium hydroxide
(caustic potash). The petitioner alleges that potash muriate is
actually defined as potassium chloride. Therefore, the petitioner
urges the Department to value muriate of potash using HS 2827.3909,
the classification for other chlorides, not elsewhere specified.
In rebuttal, Since Hardware contends that there is no evidence
on the record to support the view that potassium hydroxide (caustic
potash) is not an appropriate surrogate for muriate of potash. Since
Hardware states that although the Department did not specifically
examine the type or grade of muriate of potash that it consumes in
the ordinary course of business, it is reasonable to assume from the
Department's overall verification findings that Since Hardware does
consume muriate of potash, as reported. Therefore, the surrogate
value used in the Preliminary Determination is a reasonable and
accurate basis on which to value Since Hardware's consumption of
muriate of potash for the final determination. See Rebuttal Comments
from Adams C. Lee, Counsel to Since Hardware, to the Honorable
Donald L. Evans, Secretary of Commerce, ``Since Hardware's Rebuttal
Brief,'' dated May 4, 2004 (Since Hardware's Rebuttal Brief), at 4-
7.
Department's Position: We agree with Since Hardware. We find
that HS 2815.2000, the subheading which covers potassium hydroxide
(caustic potash), is more appropriate for Since Hardware's
production process than the petitioner's suggested subheading HS
2827.3909, which covers other chlorides not elsewhere specified.
Throughout this proceeding, Since Hardware has consistently reported
HS 2815.2000 as the appropriate subheading to calculate the
surrogate value for its input labeled muriate of potash. We find,
via internet research, that one of the general uses of potassium
hydroxide (caustic potash), which is covered under HS 2815.2000, is
as a component of certain plating processes, which is consistent
with Since Hardware's manufacturing process. See Memorandum from
Paige Rivas to the File: ``Surrogate Valuation Research'' dated June
15, 2004 (Research Memo). On the other hand, the petitioner's
suggestion of HS 2827.3909, other chlorides, not elsewhere
specified, is not specific enough for the Department to make a
similar finding with respect to the general uses of the products
covered under that subheading. Therefore, we continue to find that
HS 2815.2000 is the most appropriate classification to value the
muriate of potash consumed by Since Hardware during the POI.
B. PE Septa
For the Preliminary Determination, the Department stated in the
surrogate value memorandum that it used HS 3907.6000, which covers
PE terephthalate (PET) in primary forms (limited to liquids and
pastes, including dispersions and solutions, and blocks of irregular
shape, lumps, powders, granules, flakes and similar bulk forms), to
calculate the surrogate value for PE septa. The petitioner contends
that PET in primary forms cannot serve as a septum or membrane.
However, while the Department states that it used HS 3907.6000, the
petitioner alleges that the Department based its calculations of the
surrogate value for PE septa using data from HS 3920.1001, the
classification for plastic sheets of PET. As such, the petitioner
urges the Department to continue to value PE septa using HS
3920.1001, the subheading for sheets of PE, for the final
determination. See Petitioner's Case Brief, at 14.
Since Hardware did not comment on this issue.
Department's Position: We agree with the petitioner. In the
Preliminary Determination, we mistakenly stated in the narrative of
the surrogate value memorandum that we used HS 3907.6000, which
covers PET in primary forms, to calculate the surrogate value for PE
septa. See Memorandum from Sam Zengotitabengoa to the File:
``Surrogate Country Factors of Production Values in the Preliminary
Determination of the Antidumping Duty Investigation on Floor-
Standing, Metal-Top Ironing Tables and Certain Parts Thereof from
the People's Republic of China,'' dated January 26, 2004 (Prelim
Factors Memo). However, in Exhibit 25 of the Prelim Factors Memo, we
actually used HS 3920.1001, which includes plates, sheets, film
consisting of PET, to calculate the surrogate value for PE septa.
In considering which HS subheading is appropriate, we find that
the definition of septa is a thin membrane or sheet. Therefore, it
is not appropriate to value PE septa with HS 3907.6000, which covers
PET in primary forms. Instead, the Department finds that HS
3920.1001, which covers other plates, sheets, film consisting of
PET, is the appropriate surrogate value for PE septa. Therefore, for
this final determination, we have continued to use HS 3920.1001 to
value PE septa.
C. Stainless Steel
For the Preliminary Determination, the Department classified
stainless steel using HS 7210.1202, the subheading for flat-rolled
products of iron or non-alloy steel, of a width of 600 mm or more,
clad, plated or coated, with tin, of a thickness of less than 0.5 mm
(tin plated stainless steel). The petitioner argues that there is no
evidence on the administrative record indicating that the stainless
steel used by the respondents is tin plated. Therefore, the
petitioner urges the Department to value stainless steel using HS
7220.1202, the subheading covering stainless steel in strips for
making pipes and tubes. Alternatively, on the basis of material
dimensions provided by Since Hardware and its chemical content,
including nickel and chromium, the petitioner urges the Department
to use the weighted average value for HS 7219.3401 and HS 7219.3402,
[[Page 35302]]
the subheadings covering flat-rolled products of stainless steel, of
a width equal to or greater than 600 mm, cold-rolled, of a thickness
equal to or greater than 0.5 mm but less than 1 mm. For the final
determination, the petitioner urges the Department to revise the
material input values according to the HS subheadings listed above.
See Petitioner's Case Brief, at 14 and 15.
In rebuttal, Since Hardware contends that there is no evidence
on the record to suggest that tin-plated stainless steel is not an
appropriate surrogate for stainless steel. In fact, Since Hardware
states that although the Department did not specifically examine the
type or grade of stainless steel that Since Hardware consumes in the
ordinary course of business, it is reasonable to assume from the
Department's overall verification findings that Since Hardware
consumes the type or grade of stainless steel that it reported,
which is close or identical to the stainless steel covered by HS
7210.1202. For the final determination, Since Hardware stresses that
the Department has no basis or justification for altering the
Preliminary Determination's surrogate value used to value Since
Hardware's consumption of stainless steel. See Since Hardware's
Rebuttal Brief, at 5 and 6.
Department's Position: We agree with the petitioner. A review of
the record indicates that there is no evidence that Since Hardware's
stainless steel input is plated. As a result, we find that a
surrogate value calculated from HS 7219.34 better represents Since
Hardware's stainless steel than subheading HS 7210.1202, which
covers plated or coated material. Moreover, subheading HS 7219.34
covers flat-rolled products of stainless steel, which are comparable
to the description in Exhibit 7 of the input materials being valued
in Since Hardware submission, dated January 12, 2004 (the actual
product description is business proprietary information). Because
there is no evidence on the record of the specific nickel and
chromium content of Since Hardware's stainless steel input, we have
not used a weighted-average of HS 7219.3401 and HS 7219.3402, as
suggested by the petitioner. Instead, we find that the broader HS
7219.34, which encompasses both HS 7219.3401 and HS 7219.3402, is
more appropriate given the lack of information on the record
concerning the chemical content of stainless steel. In addition, we
have not used the petitioner's suggested stainless steel in strips
subheading, HS 7220.1202, because it covers flat-rolled products of
stainless steel of a width of less than 600 mm and does not match
Since Hardware's product description of its stainless steel input.
Therefore, for this final determination, we find that HS 7219.34 is
appropriate to value the stainless steel consumed by Since Hardware
during the POI.
D. Welding Wire
For the Preliminary Determination, the Department classified
welding wire under HS 7408.1902, the subheading for copper wire.
However, the petitioner alleges that there is no evidence on the
record indicating that the welding wire used by Since Hardware is
made of copper. The petitioner urges the Department to value welding
wire using HS 8311.2000, the classification covering cored wire of
base metal for electric arc welding. For the final determination,
the petitioner urges the Department to revise the material input
values according to the HS subheadings provided. See Petitioner's
Case Brief, at 15 and 16.
In rebuttal, Since Hardware contends that there is no evidence
on the record to suggest that welding wire of copper is not an
appropriate surrogate for welding wire. In fact, Since Hardware
states that although the Department did not specifically examine the
type or grade of welding wire that Since Hardware consumes in the
ordinary course of business, it is reasonable to assume from the
Department's overall verification findings that Since Hardware
consumes the type or grade of welding wire that it reported, which
is close or identical to the welding wire covered by HS 7408.1902.
As such, for the final determination, Since Hardware stresses that
the Department has no basis or justification for altering the
Preliminary Determination's surrogate value used to value Since
Hardware's consumption of welding wire. See Since Hardware's
Rebuttal Brief, at 6 and 7.
Department's Position: We agree with the petitioner. A review of
the record indicates that there is no evidence that Since Hardware
uses welding wire made of copper. In fact, Since Hardware indicates
that the welding wire it uses is made out of a material other than
copper. See Since Hardware's fourth supplemental questionnaire
response, dated February 11, 2004, at Exhibit 2 (Since Hardware's
Fourth Supplemental). Based on that information, we find that HS
8311.2000, the subheading for cored wire of base metal for electric
arc welding, is more representative of Since Hardware's welding wire
than HS 7408.1902, the subheading for copper wire. Therefore, for
the final determination, we find that HS 8311.2000 is appropriate to
value the welding wire consumed by Since Hardware during the POI.
E. Pigment
For the Preliminary Determination, the Department classified
pigment under HS 3801.9000, the subheading for other graphite-based
preparations. However, Since Hardware alleges that this subheading
does not reflect the physical characteristics of the pigment that
Since Hardware consumes in the ordinary course of business. Instead,
Since Hardware urges the Department to use HS 2803.0009, the
subheading for carbon black, a form of pigment or dye used in common
manufacturing applications, to value pigment in the final
determination. See Since Hardware's Case Brief, at 3 and 4.
The petitioner claims that Since Hardware's criticisms of the
Department's choice of HS subheading for the valuation of pigment
are unwarranted. The petitioner notes that Since Hardware's
submissions, dated December 17, 2003, and January 12, 2004,
indicated that HS 3801.9000 is the classification applicable to
Since Hardware's pigment. In addition, the petitioner states that
Since Hardware's submission on surrogate values, dated March 29,
2004, was made subsequent to the Preliminary Determination. The
petitioner notes that the data submitted by Since Hardware were not
drawn from the period covered by the POI and were submitted with no
explanation as to the material which Since Hardware considered them
relevant.
Department's Position: We agree with Since Hardware. We find,
via internet research, that the carbon black covered under
subheading HS 2803.0009 is considered a common pigment. In addition,
our internet research indicates that graphite, which is covered by
subheading 3801.9000, can be used in paints and pigments but is not
used for its color. Instead, graphite is typically used as
lubrication to spread the pigment more quickly. See Research Memo.
In Since Hardware's Fourth Supplemental, Exhibit 1, Since Hardware
includes a description of its inputs that is more consistent with
carbon black (the specific product description is business
proprietary information). Therefore, for the final determination, we
have used HS 2803.0009 to value pigment using Indian import
statistics.
With respect to the petitioner's statement that Since Hardware's
March 29, 2004, submission was made after the Department's
Preliminary Determination, we note that Since Hardware's submission
was timely and in accordance with the Department's regulations.
According to section 351.301(c)(3)(i) of the Department's
regulations, parties have until 40 days after the publication of the
Preliminary Determination to submit publicly available information
to value factors of production. Since Hardware's submission was
within this 40 day time limit.
F. Silica Gel Parts
For the Preliminary Determination, the Department valued silica
gel parts using HS 2811.2200, the subheading for silicon dioxide.
However, Since Hardware alleges that this subheading does not
reflect the physical characteristics of the silica gel parts that
Since Hardware consumes in the ordinary course of business. Instead,
Since Hardware urges the Department to use HS 3824.9015 to value
silica gel parts in the final determination. HS 3824.9015 is the
subheading for mixed PE glycols, which Since Hardware alleges are
chemicals commonly used in the production of rubber or plastic parts
used in manufacturing and assembly operations. See Since Hardware's
Case Brief, at 4.
The petitioner did not comment on this issue.
Department's Position: We agree with Since Hardware. We
confirmed via internet research that silica gel, which is a form of
silicon dioxide covered under HS 2811.2200, is commonly used as an
absorbent. Mixed PE glycols, covered by HS 3824.9015, on the other
hand, are materials that are used with plastic parts processing. See
Research Memo. In fact, PE is specifically identified as a component
of Since Hardware's plastic parts processing segment of its
production process in the Production Flowchart in Since Hardware's
section C and D questionnaire response at Exhibit 2, dated October
14, 2003
[[Page 35303]]
(Since Hardware's October 14, 2003, response). Therefore, for the
final determination, the Department will use HS 3824.9015 to value
Since Hardware's consumption of silica gel parts.
G. Cotton Thread
In the Preliminary Determination the Department valued cotton
thread using HS 5204.1101, the subheading for cotton thread. Since
Hardware claims that this subheading does not reflect the physical
characteristics of the cotton thread that Since Hardware consumes in
the ordinary course of business. Instead, Since Hardware urges the
Department to use HS 5204.2009, the subheading for other cotton
sewing thread offered for retail sale, to value cotton in the final
determination. See Since Hardware's Case Brief, at 4.
The petitioner claims that Since Hardware's criticisms of the
Department's choice of HS subheading for cotton thread are lacking
in merit. The petitioner states that the HS 5204.1101, the
subheading used by the Department in the Preliminary Determination
covers cotton sewing thread, containing 85 percent or more by weight
of cotton, not offered for retail sale. The petitioner notes that
the subheading advocated by Since Hardware as providing ``a more
appropriate basis'' covers other cotton sewing thread offered for
retail sale. The petitioner questions whether Since Hardware is
acquiring its cotton thread in a configuration offered for retail
sale, noting that the respondent has proffered no evidence to
support such an improbable claim.
Department's Position: We agree with the petitioner. We find
that HS 5204.1101 identifies cotton thread, containing 85 percent or
more of cotton, not offered for retail sale, to be an appropriate
subheading in calculating the surrogate value for cotton thread.
Since Hardware's suggested subheading, HS 5204.2009, covers other
cotton sewing thread offered for retail sale. Because Since Hardware
is a manufacturing company that purchases cotton thread as one of
many inputs used to produce ironing boards, it is reasonable to
assume that it purchases cotton thread in bulk from a wholesaler,
rather than purchasing this material at retail. In addition, Since
Hardware has provided no evidence that its reported cotton thread
input contains less than 85 percent by weight of cotton and does not
state why HS 5204.2009, the subheading for other cotton sewing
thread offered for retail sale, better reflects Since Hardware's
cotton thread input. Therefore, for the final determination, we
continue to find that HS 5204.1101 is the appropriate subheading to
value Since Hardware's consumption of cotton thread.
H. Cotton Rope
For the Preliminary Determination, the Department classified
cotton rope using HS 5604.9000, the subheading for other rubber
thread and cord. However, Since Hardware alleges that this
classification does not reflect the physical characteristics of the
cotton rope that Since Hardware consumes in the ordinary course of
business. Instead, Since Hardware urges the Department to use HS
5607.9002, the subheading for cordage, cable ropes, and twine of
cotton, to value cotton rope in the final determination. See Since
Hardware's Case Brief, at 5.
The petitioner claims that Since Hardware's criticisms of the
Department's choice of HS subheading for cotton rope are
unwarranted. The petitioner notes that Since Hardware's submissions,
dated December 17, 2003, and January 12, 2004, indicated that HS
5604.9000 is the subheading applicable to Since Hardware's cotton
rope. This is the subheading that the Department applied in its
Preliminary Determination. In addition, the petitioner states that
Since Hardware's March 29, 2004, submission, was made subsequent to
the Preliminary Determination. Furthermore, the petitioner notes
that the data submitted by Since Hardware were not drawn from the
period covered by the POI and were submitted with no explanation as
to the material which Since Hardware considered them relevant.
Department's Position: We agree with Since Hardware. The
subheading HS 5604.9000 that the Department used in the Preliminary
Determination covers rubber thread and cord, textile covered;
textile yarn and strip and the like of headings 5404 and 5405 (which
cover man-made materials), impregnated, coated, covered or sheathed
with rubber or plastics. The materials under this subheading appear
to be predominantly man-made. Item number HS 5607.9002, which covers
cordage, cable ropes, and twine of cotton, includes materials more
similar to the material reported by Since Hardware. As a result, we
find that HS 5607.9002 is appropriate for the valuation of cotton
rope in this final determination. For the timing of Since Hardware's
submission, see the Department's Position under comment 4-E.
I. Zinc Galvanized Iron Clips
For the Preliminary Determination, the Department valued zinc
galvanized iron clips using HS 7318.2400, the subheading for non-
threaded cotters and cotter pins. However, Since Hardware alleges
that this classification does not reflect the physical
characteristics of the zinc galvanized iron clips that Since
Hardware consumes in the ordinary course of business. Instead, Since
Hardware urges the Department to use HS 7210.4900, the subheading
for other products of iron/non-alloy steel otherwise plated/coated
with zinc, to value zinc galvanized iron clips in the final
determination. See Since Hardware's Case Brief, at 5.
The petitioner claims that Since Hardware's criticisms of the
Department's choice of HS subheading for galvanized iron clips are
unwarranted. The petitioner notes that Since Hardware's submissions,
dated December 17, 2003, and January 12, 2004, indicated that HS
7318.2400 is the subheading applicable to Since Hardware's zinc
galvanized iron clips. In addition, the petitioner states that Since
Hardware's March 29, 2004, submission was made subsequent to the
Preliminary Determination. Furthermore, the petitioner notes that
the data submitted by Since Hardware were not drawn from a period
covered by the POI and were submitted with no explanation as to the
material which Since Hardware considered them relevant. The
petitioner also states that in its January 15, 2004, submission, it
provided explanatory information on ``circlips,'' which might
describe the galvanized iron clips used by Since Hardware.
Department's Position: We agree with the petitioner. We find
that Since Hardware's surrogate value suggestion on HS 7210.4900 is
not appropriate to value zinc galvanized iron clips because
subheading HS 7210 refers to flat rolled steel products of iron or
nonalloy steel, of a width of 600 mm or more, clad, plated, or
coated. There is no indication that this subheading refers to any
type of clip, or any article employed in a clip-like application,
similar to that used in the production of ironing boards. In fact,
the width of 600 mm or more indicates that it is not used in an
application similar to a clip, but is much larger in size. HS
subheading 7318.2400 is a more appropriate surrogate for zinc
galvanized iron clips for the following reasons: (1) HS subheading
73 is the subheading for articles of iron or steel, some plated and
coated (a zinc galvanized iron clip is an article of iron); and (2)
HS subheading 7318 refers to screws, nuts, bolts, coach screws,
screw hooks, rivets, cotters, cotter pins, washers, and similar
articles of iron and steel. Although zinc galvanized clips are not
specifically mentioned, the above-listed items perform functions
similar to the function a clip performs, or at least are more
similar than a flat-rolled iron sheet. Therefore, the Department
continues to value zinc galvanized iron clips using HS 7318.2400.
For the timing of Since Hardware's submission, see the Department's
Position under comment 4-E.
J. Glue
For the Preliminary Determination, the Department valued glue
using subheading HS 3214.1000, the subheading for glaziers putty,
grafting putty, resin cements, and caulking. Since Hardware alleges
that this subheading does not reflect the physical characteristics
of the glue that Since Hardware consumes in the ordinary course of
business. Instead, Since Hardware urges the Department to use HS
3505.2000, the subheading for glues to value glue in the final
determination. See Since Hardware's Case Brief, at 5.
The petitioner claims that Since Hardware's criticisms of the
Department's choice of HS subheading for glue are unwarranted. The
petitioner notes that Since Hardware's submissions, dated December
17, 2003, and January 12, 2004, indicated that HS 3214.1000 is the
classification applicable to Since Hardware's glue. This is the
classification that the Department applied in its Preliminary
Determination. In addition, the petitioner states that Since
Hardware's March 29, 2004, submission was made subsequent to the
Preliminary Determination. Furthermore, the petitioner notes that
the data submitted by Since Hardware were not drawn from the period
covered by the POI and were submitted with no explanation as to the
material which Since Hardware considered them relevant.
Department's Position: We agree with Since Hardware. Upon
further review of the HS subheadings, we find that the subheading
[[Page 35304]]
initially suggested by the respondent, HS 3214.1000, does not
include glue or glue-like materials. The HS subheading suggested by
Since Hardware in its last surrogate value submission, HS 3505.2000,
however, does cover glue. Therefore, for the final determination, we
find that subheading HS 3505.2000 is appropriate for calculating a
surrogate value for glue. For the timing of Since Hardware's
submission, see the Department's Position under comment 4-E.
K. Cotton Fixing Strips
For the Preliminary Determination, the Department classified
cotton fixing strips using HS 5604.9000, the subheading for other
rubber thread and cord. Since Hardware alleges that this subheading
does not reflect the physical characteristics of the cotton fixing
strips that it consumes in the ordinary course of business. Instead,
Since Hardware urges the Department to use for the final
determination its market-economy purchase price for cotton fabric
or, alternatively, the surrogate value that the Department used in
the Preliminary Determination to value Yongjian's consumption of
cloth strip, HS 5208.1901. Since Hardware argues that Yongjian's
cloth strip is an input that is presumably identical to cotton
fixing strips. See Since Hardware's Case Brief, at 6.
The petitioner claims that Since Hardware's criticisms of the
Department's choice of HS subheading for cotton fixing strips are
unwarranted. The petitioner notes that Since Hardware's submissions,
dated December 17, 2003, and January 12, 2004, indicated that HS
5604.9000 is the subheading applicable to Since Hardware's cotton
fixing strips. In addition, the petitioner states that Since
Hardware's March 29, 2004, submission was made subsequent to the
Preliminary Determination. Furthermore, the petitioner notes that
the data submitted by Since Hardware were not drawn from the period
covered by the POI and were submitted with no explanation as to the
material which Since Hardware considered them relevant.
Department's Position: We agree with Since Hardware, in part.
Regarding Since Hardware's assertion that the Department should
value cotton fixing strips with its reported market economy price of
cotton fabric, Since Hardware does not claim that it uses the cotton
fabric it purchases from a market economy supplier as cotton fixing
strips. In fact, Since Hardware reports cotton fabric as a separate
material input altogether. See Since Hardware's Fourth Supplemental
at Exhibit 1. Therefore, we have not valued cotton fixing strips
with the market economy price it reported for cloth fabric.
However, with respect to Since Hardware's argument that we
should value cotton fixing strips using HS 5208.1901, we agree. In
the Preliminary Determination, the Department valued Since
Hardware's cotton fixing strips using HS 5604.9000, which covers
rubber thread and cord, textile covered; textile yarn and strip and
the like of heading 5404 and 5405 (which cover man-made materials),
impregnated, coated, covered or sheathed with rubber or plastics.
The materials under this subheading are predominantly man-made. The
name of the material input, cotton fixing strips, indicates that it
is a strip made out of cotton. Item number HS 5208.1901 covers other
fabrics of woven fabrics containing 85% or more by weight of cotton.
As a result, we find that HS 5208.1901 is appropriate for the
valuation of cotton fixing strips in this final determination. For
the timing of Since Hardware's submission, see the Department's
Position under comment 4-E.
Comment 5: Whether the Department Used the Best Available Data Source
To Value Certain Material Inputs
Yongjian notes that the Department relied on the Government of
India, Ministry of Commerce & Industry, Director General, Commercial
Intelligence and Statistics data, published in the WTA, to calculate
the values for hot-rolled steel, and cold-rolled steel. As an
alternative, Yongjian submitted various data taken from
InfodriveIndia.com that, according to Yongjian, reports official
Indian government import statistics on an entry by entry basis. See
Yongjian's Surrogate Value Submission, dated March 29, 2004.
Yongijian states that the Department in other proceedings used
certain data derived from InfodriveIndia.com. See, e.g., Memorandum
from the Team to the File, ``Certain Color Television Receivers from
the People's Republic of China: Preliminary Determination Factors
Valuation Memorandum,'' dated November 21, 2003. Therefore, for the
final determination, Yongjian urges the Department to use the data
it submitted from InfodriveIndia.com to calculate surrogate values
for certain material inputs. See Yongjian's Case Brief, at 2, 3, and
8.
The petitioner argues that Yongjian's position lacks merit and
should be dismissed by the Department. The petitioner notes that
Yongjian is the only party in this proceeding raising an objection
to the Indian import statistics. The petitioner claims that the
Department should continue to value Yongjian's material inputs on
the basis of WTA data (also referred to as Indian import
statistics). In addition, the petitioner states the only assistance
that Yongjian offered the Department with respect to the surrogate
valuation of inputs consisted of data based exclusively upon India's
official import statistics. The petitioner argues that the values
utilized by the Department in the Preliminary Determination have
been available to Yongjian throughout this proceeding and yet the
respondent offered no rebuttal to the petitioner's surrogate
valuation submission dated October 24, 2003, nor did Yongjian submit
any comment at any time in opposition to the WTA data.
In addition, the petitioner argues that Yongjian provides no
valid basis for a departure from surrogate valuation on the basis of
WTA data. The petitioner states that the Department has previously
used Indian import statistics published by the WTA for surrogate
valuation purposes in numerous nonmarket economy (NME) cases. The
petitioner argues that Yongjian provides no data that are superior
in reliability, nor does it provide any data that are usable as
benchmarks, which can be used to judge the WTA data. The petitioner
claims that the WTA figures are official government statistics
maintained by the Government of India, they are matched exactly to
the POI, and are based upon commodity descriptions detailed to an 8-
digit level of specificity. In addition, the petitioner states that
the WTA data are demonstrably internally consistent in terms of
economic and commercial logic. According to the petitioner, the
Department should continue to use the WTA data to value all of
Yongjian's material inputs because the Indian import statistics meet
the Department's criteria of availability, contemporaneity,
specificity and reliability.
The petitioner claims that Yongjian fails to demonstrate that
the surrogate values based upon the Indian import statistics used by
the Department are aberrant or unreliable. On the contrary, the
petitioner argues that the data relied upon by Yongjian are
inapposite or unreliable. The petitioner argues that Yongjian's
comparison sources for cold-rolled steel, InfodriveIndia.com is an
unofficial and non-governmental source and has been used only once
for the surrogate valuation of inputs. The petitioner further states
that, in that case, the Department states that its preferred source
of surrogate value data continues to be the WTA data because it
represents the best information available, but the Department would
not be precluded from turning to InfodriveIndia.com data where the
Indian import classification categories ``are overly broad.''
Concerning specificity, the petitioner argues that the HS categories
are extremely precise with respect to the inputs at issue in this
case.
The petitioner argues that InfodriveIndia.com information
submitted by Yongjian is not drawn from Indian customs entry forms
but from commodity descriptions appearing on bills of lading and/or
vessel manifests. The petitioner claims that these descriptions
reflect exporter subjectivity and the HS classifications associated
with them would be subject to no official verification and thus are
inherently unreliable. For example, the petitioner points out that
the InfodriveIndia.com printout identifies the ``Foreign Country''
only intermittently. According to the petitioner, Yongjian tells us
that it is able to identify shipments that would be excluded as
sourced from NME or export-subsidy countries on the basis of the
name of the exporter. The petitioner adds that the Department may
question whether such an approach is reliable or sustainable, or
whether it may be subject to inconsistency.
The petitioner contends that each of the values selected or
concocted by Yongjian for purposes of demonstrating that the value
used by the Department may be aberrant is: (1) Inapposite with
respect to the input at issue (with respect to the input-specific
value that Yongjian seeks to challenge), (2) inappropriate for the
purposes of valuation, (3) unreliable or patently inaccurate, or (4)
so generic as to have no utility in an input-specific context.
Department's Position: We agree with the petitioner. In the
Preliminary Determination, in accordance with past practice, we
utilized WTA data (more specifically, Indian import statistics) in
order to calculate surrogate values for many of Yongjian's material
[[Page 35305]]
inputs. In selecting the best available information for valuing
factors of production, in accordance with section 773(c)(1) of the
Tariff Act of 1930, as amended (the Act), we selected values which
are: (1) Non-export average values; (2) most contemporaneous with
the POI; (3) product-specific; and (4) tax-exclusive. See Manganese
Metal From the People's Republic of China; Final Results and Partial
Rescission of Antidumping Duty Administrative Review, 63 FR 12441,
12442 (Mar. 13, 1998). While we recognize that both Indian import
statistics and InfodriveIndia.com: (1) Represents import data; (2)
are contemporaneous with the POI; (3) are product-specific; and (4)
are tax exclusive, we find that Indian import statistics represent
the best available information in this case.
With regard to Yongjian's assertion that the Department has used
InfodriveIndia.com in previous cases, we note that the Department
has used this source only once in a final determination. See Notice
of Final Determination of Sales at Less Than Fair Value and Negative
Final Determination of Critical Circumstances: Certain Color
Television Receivers From the People's Republic of China, 69 FR
20594 (April 16, 2004) (CTVs from the PRC). For the inputs valued
using InfodriveIndia.com, we used this source because it provided
the most product-specific information available and not because
Indian import statistics were aberrational or unreliable. In
addition, we clearly stated in this case our preference for Indian
import statistics over InfodriveIndia.com except in instances where
the HS categories are overly broad. See CTV's from the PRC, Issues
and Decision Memorandum at Comment 9. In the current proceeding,
there is no evidence on the record that the HS subheadings used by
the Department to calculate surrogate values for cold-rolled steel
coil and hot-rolled steel coil are overly broad.
Regarding Yongjian's argument that the HS subheadings used to
value its steel inputs are too broad, we note that there is no
evidence on the record of this investigation to support that
contention. With respect to cold-rolled steel, in its October 15,
2003, section D questionnaire response, Yongjian states that it uses
cold-rolled steel sheet with a thickness of 0.8 millimeters and
cold-rolled steel sheet with a thickness of 1 mm to form meshes. In
its case brief, Yongjian claims that HS 7209.1700 is too broad. HS
7209.1700 covers flat-rolled products of iron or non-alloy steel, of
a width of 600 mm or more, cold-rolled, (cold-reduced), not clad,
plated or coiled; in coils, not further worked than cold-rolled
(cold-reduced) of a thickness of 0.5 or more but not exceeding 1 mm.
This description matches the cold-rolled steel characteristics of
the material input that Yongjian reported in its questionnaire
responses.
With respect to hot-rolled steel, in its October 15, 2003,
section D questionnaire response, Yongjian states that it uses hot-
rolled steel with a thickness ranging from 0.6 millimeters to 2.5
millimeters. In its case brief, Yongjian claims that HS 7208.3900,
used in the Preliminary Determination, is too broad. HS 7208.3900
covers flat-rolled products of iron or non-alloy steel, of a width
of 600 mm or more, hot-rolled, not clad, plated or coiled; in coils,
of a thickness less than 3 mm. This description matches the hot-
rolled steel characteristics reported of the material input that
Yongjian reported in its questionnaire responses.
As a result of verification, we found that Yongjian used cold-
rolled steel coil and hot-rolled steel coil instead of the cold-
rolled and hot-rolled steel sheet it reported in its section D
questionnaire responses. Therefore, for the final determination, we
have valued Yongjian's cold-rolled steel coil using HS 7209.1700 and
hot-rolled coil using HS 7208.3900. For additional discussion of
this issue, see Comments 7 and 12.
Although Yongjian states that the Department relied on data that
``clearly included further processed products from those used in
Yongjian's production * * *'' to calculate its surrogate value for
cold-rolled steel coil and hot-rolled steel coil, Yongjian provided
no information to indicate why it considered certain materials
listed in InfodriveIndia.com to be inappropriate for comparison to
the above-listed steel inputs. For example, for cold-rolled steel
coil, Yongjian suggests that automotive steel blanks are not
comparable to the steel coil used in ironing table production but
does not justify that assertion with evidence or facts. See
Yongjian's Case Brief at 24. With respect to hot-rolled steel coil,
Yongjian generally states that much of the materials imported under
HS 7208.3900, which the Department used to value hot-rolled steel
coil in the final determination, is of a semi-finished or otherwise
processed material. However, Yongjian fails to state in its case
brief which specific materials are semi-finished and otherwise
processed material and does not cite any evidence in support of its
claim. In addition, even if semi-finished or otherwise processed
materials are included in HS 7208.3900, Yongjian fails to
demonstrate why such materials do not reflect the same steel used in
Yongjian's production of ironing tables. The Department prefers to
use surrogate values that are representative of a range of prices in
effect during the period under consideration. Thus, using only a
portion of the imports under HS 7209.1700 and HS 7208.3900 to
calculate the surrogate values for cold-rolled and hot-rolled steel,
respectively, without evidence to support this approach, is
inconsistent with the criteria the Department uses to select
surrogate values.
As a result, the Department does not find that the HS
subheadings used in the final determination are overly broad and
continues to rely on WTA to calculate surrogate values for cold-
rolled and hot-rolled steel coil.
Comment 6: Whether the Department's Used Aberrant Surrogate Values for
Certain Material Inputs
Yongjian contends that it is Department practice that
unreasonable and aberrational surrogate values will not be used in
the calculation of normal value. See Refined Antimony Trioxide from
the PRC: Final Determination of Sales at Less Than Fair Value, 57 FR
6801, 6803 (February 28, 1992). Yongjian argues that although the
Department stated that ``the surrogate values employed in the
valuation of the factors of production were selected because of
their quality, specificity, and contemporaneity'' (See Preliminary
Determination, at 5131), the record evidence demonstrates the
aberrant nature of the surrogate values used in the Preliminary
Determination. See Yongjian's Case Brief, at 3-5.
A. Cold-Rolled Steel
For the Preliminary Determination, the Department relied upon
WTA data to calculate the surrogate value for cold-rolled steel
sheet. As discussed above, Yongjian asserts that the
InfodriveIndia.com data demonstrate that the majority of cold-rolled
steel imported under HS 7209.1700 is a semi-finished or otherwise
processed material that does not reflect the input used in the
production of ironing boards. Therefore, Yongjian contends that the
Department's Preliminary Determination surrogate value of cold-
rolled steel sheet is based on aberrant data as compared with
Yongjian's surrogate value filing of InfodriveIndia.com for cold-
rolled steel coil, Since Hardware's market value of cold-rolled
steel coil, CRU Monitor export prices of cold-rolled steel coil, and
the American Metal Market (AMM) price for cold-rolled steel coil.
See Yongjian's Case Brief, at 9 and 10. In addition, Yongjian
contends, in a footnote, that the surrogate value for cold-rolled
steel used by the Department in the Preliminary Determination for
Since Hardware also yields an aberrant value.
The petitioner argues that it is not aberrational but entirely
logical and predictable that cold-rolled steel coil would carry a
lower average value than steel that has been subjected to a capital-
intensive slitting process, like cold-rolled steel sheet. The
petitioner also notes that a comparison to Since Hardware's claimed
market economy purchases reflects an apple to oranges approach
because Since Hardware's inputs are vastly different from Yongjian's
inputs. With respect to Yongjian's AMM prices, the petitioner argues
that the sources provide no meaningful specificity whatsoever with
respect to the commodity addressed in relation to the input valued
by the Department and notes that Yonjian acknowledges the lack of
utility these prices have for valuation purposes. In addition, the
petitioner notes that the AMM does not disclose the quantities upon
which the reported average prices are based, which makes it
impossible to assess the breadth of the data sample.
Department's Position: We agree with the petitioner. Consistent
with the material reported in Yongjian's questionnaire responses,
the Department used HS 7211.2300, or cold-rolled steel sheet, to
calculate a surrogate value for Yongjian's cold-rolled steel inputs
in the Preliminary Determination. In its case brief, Yongjian
compares the cold-rolled sheet surrogate value to data using the
prices of cold-rolled coil, which is either listed as HS 7209.1700
or labeled cold-rolled steel coil to demonstrate that the sheet
prices are aberrational. However, as discussed above, the Department
found at verification that
[[Page 35306]]
Yongjian actually used cold-rolled coil in its production process
instead of the cold-rolled sheet it previously reported. See
Yongjian's sections C and D questionnaire response dated October 15,
2003. See also, Comment 11.
Consequently, for the final determination, we valued Yongjian's
cold-rolled steel input based on HS 7209.1700. The appropriate HS
subheading for cold-rolled steel coil is HS 7209.1700, and discussed
in Comment 5, we do not believe this HS subheading is overly broad.
However, we have re-examined the surrogate value data on the record
of this investigation for this HS subheading in order to determine
whether any of the data falling under this HS subheading are, in
fact, aberrational.
Based on this examination, we have excluded from our
calculations certain imports under this HS subheading which we
determined were aberrationally high in relation to the other Indian
import data contained in this HS subheading. See the June 15, 2004,
memorandum to the File from Sam Zengotitabengoa entitled, ``Final
Determination Factors Valuation Memorandum'' (Final Factors Memo).
Therefore, with these adjustments, for the final determination, we
have continued to use HS 7209.1700 to value cold-rolled steel coil.
B. Hot-Rolled Steel
For the Preliminary Determination, the Department relied on WTA
data to calculate the surrogate value for hot-rolled steel. As
discussed above, Yongjian asserts that the InfodriveIndia.com data
demonstrate that the majority of hot-rolled steel imported under HS
7208.3900 is a semi-finished or otherwise processed material that
does not reflect the input used in the production of ironing boards.
As such, Yongjian contends that the Department's Preliminary
Determination valuation of hot-rolled steel is based on aberrant
data as compared with Yongjian's surrogate value filing of
InfodriveIndia.com, Since Hardware's market economy prices of hot-
rolled steel coil purchases, Essar Steel home market price of hot-
rolled steel coil, CRU export prices, and AMM price. See Yongjian's
Case Brief, at 11 and 12.
The petitioner states that Yongjian's comparison of hot-rolled
steel values is faulty. The petitioner argues that Yongjian's
summary of a database submitted in another case by a single
respondent (Essar Steel) selected by Yongjian, providing only ranged
price and quantity data for a sampling of home market sales in a
non-contemporaneous period and for a product of undisclosed
description or specification cannot be taken seriously. In addition,
the petitioner states that Since Hardware's claimed market economy
purchase prices do not relate to Yongjian's input; therefore they
would not be appropriate for use in valuing Yongjian's inputs, while
other suitable surrogate value information is available. In this
instance, the petitioner continues, the Since Hardware value
detracts directly from Yongjian's assertion that its comparison
values represent ``export pricing that would have been available to
Indian and Chinese importers.'' The petitioner notes that, if this
were the case, and Yongjian's values had validity, one would expect
that Since Hardware would have purchased at the InfodriveIndia price
rather than at a higher cost.
Department's Position: We agree with the petitioner. Consistent
with the material reported in Yongjian's questionnaire responses,
the Department used HS 7211.1900, the subheading for hot-rolled
steel sheet, to calculate a surrogate value for Yongjian's hot-
rolled steel inputs in the Preliminary Determination. In its case
brief, Yongjian compares the hot-rolled steel sheet surrogate value
to data based on prices of hot-rolled steel coil, which is either
listed as HS 7208.3900 or labeled hot-rolled steel coil to
demonstrate that the sheet prices were aberrational. However, as
discussed above, the Department found at verification that Yongjian
actually used hot-rolled steel coil in its production process
instead of the hot-rolled steel sheet it previously reported. See
Yongjian's sections C and D questionnaire response dated October 15,
2003. See also, Comment 11.
Because the Department is using a surrogate value for hot-rolled
steel coil in the final determination, we examined imports under the
HS subheading to determine if any imports under this category were
aberrational. We also examined whether the Department's surrogate
value for hot-rolled steel coil, is aberrational as compared to
Yongjian's alternative pricing data contained in its case brief. We
find that the surrogate value used in final determination is not
aberrationally high. For the final determination, we have calculated
a surrogate value for hot-rolled coil of $.28/kg. In comparing the
surrogate value calculated by the Department to the range of prices
contained in Yongjian's case brief ($0.28/kg to $0.35/kg), we find
that the Department's surrogate value for hot-rolled steel coil is
appropriate for the final determination.
C. Steel Wire Rod
For the Preliminary Determination, the Department relied on WTA
data to calculate the surrogate value for steel wire.\1\ Yongjian
contends that the valuation of steel wire is based on aberrant data
as compared with the steel wire rod prices from InfodriveIndia.com,
Since Hardware's market economy purchase price, P.T. Ispat Indo's
home market price, and AMM prices. See Yongjian's Case Brief, at 12-
14.
---------------------------------------------------------------------------
\1\ We note that Yongjian reported steel wire in its section D
questionnaire responses. However, at verification, we found that
Yongjian consumed steel wire rod. For the final determination, we
are valuing this input as steel wire rod.
---------------------------------------------------------------------------
With respect to wire rod, the petitioner claims that Yongjian's
comparison is not reliable because Since Hardware's claimed market
economy purchase price of steel wire rod was at a price higher than
Yongjian's comparison prices from InfodriveIndia.com and AMM prices.
The petitioner contends that if such low prices of steel wire rod
were available, Since Hardware would have purchased steel wire rod
at that price. The petitioner also states that the comparison is not
meaningful because the material used by Yongjian is substantially
different from Since Hardware's steel wire rod input. In addition,
the petitioner claims that Yongjian's use of another case, in which
Yongjian summarized the public version of another respondent's home
market database, to compare to the Department's surrogate value for
steel wire rod in this investigation, is unacceptable because it
abandons contemporaneity and involves products of undisclosed
description and specification.
Department's Position: We disagree with Yongjian and the
petitioner. Consistent with the material reported in Yongjian's
questionnaire responses, the Department used HS 7217.1001, the
subheading for steel wire, to calculate a surrogate value for
Yongjian's steel wire inputs in the Preliminary Determination. In
its case brief, Yongjian compares the steel wire surrogate value to
data using prices of steel wire rod, which is either listed as HS
7217.1001 or labeled steel wire rod to demonstrate that the sheet
prices are aberrational. However, as discussed above, the Department
found at verification that Yongjian actually used steel wire rod in
its production process instead of the steel wire it previously
reported. See Yongjian's sections C and D questionnaire response
dated October 15, 2003. See also Comment 11.
Because the Department is using a surrogate value for steel wire
rod in the final determination, we examined imports under the HS
subheading to determine if any imports under this category were
aberrational. Therefore, for the final determination, we have
calculated a surrogate value for steel wire rod based on HS
7213.9109.
D. Circular Pipe and Tube and Non-Circular (Rectangular) Pipe and
Tube
For the Preliminary Determination, the Department relied on WTA
data to calculate the surrogate value for circular and non-circular
(rectangular) cross-section pipe and tube. Yongjian contends that
the Department's valuation of circular and non-circular
(rectangular) pipe and tube in the Preliminary Determination is
based on aberrant data compared with net prices contained in the
home market databases for four companies that were respondents in
U.S. antidumping duty proceedings involving certain types of pipe
and tube from Mexico, Turkey, Thailand, and Taiwan. For circular
pipe and tube, Yongjian used prices from the publicly ranged home
market databases for two companies, Saha Thai from Thailand, and
Yieh Hsing from Taiwan. For non-circular pipe and tube, Yongjian
used prices from the publicly ranged home market databases from a
Mexican company, Regiomontana, and a Turkish company, MMZ. See
Yongjian's Case Brief, at 14 and 15. Although Yongjian provided the
Department with pricing information as a benchmark, it did not
suggest which surrogate value to use.
The petitioner argues that Yongjian relies solely upon
summarized, sampled data from selected respondents in other
antidumping cases. The petitioner also claims that the data obtained
from these other cases are not contemporaneous with the POI, and are
from markets having no economic comparability to
[[Page 35307]]
the PRC. In addition, the petitioner asserts that Yongjian fails to
explain how the respondents' production in these antidumping cases
involves merchandise comparable to the material inputs for ironing
tables.
Department's Position: We agree with the petitioner. For both of
these material inputs, we find that the WTA data used in the
Preliminary Determination are reasonable to use in the final
determination for the following reasons: (1) There is no evidence on
the record that the merchandise in the other antidumping cases cited
in Yongjian's case brief are more similar to the material inputs
used in this investigation by Yongjian; (2) gross prices are more
appropriate for comparison to Indian import statistics, not net
prices; and (3) the other respondents' data are not contemporaneous
to the POI.. We note that neither the respondents in this case nor
the petitioner is arguing the Department used incorrect HS
subheadings in the Preliminary Determination and we have no evidence
on the record that indicates that HS 7306.300 (circular pipe and
tube) or HS 7306.6000 (non-circular pipe and tube) are overly broad
or otherwise inappropriate subheadings for these material inputs. In
addition we examined imports under the HS subheading to determine if
any imports under these categories were aberrational and we do not
find that the information contained in these HS subheadings are
aberrational. Since the HS is not overly broad and the Indian import
statistics are not aberrant, we continue to find that the WTA data
represent the best available information for calculating surrogate
values for circular and non-circular pipe and tube for the final
determination.
E. Powder Coating
For the Preliminary Determination, the Department used WTA data
for HS 3208.1009 to calculate the surrogate value for powder
coating, the subheading for paints and varnishes (including enamels
and laquers), based on polyesters. However, Yongjian alleges that
this classification does not reflect the physical characteristics of
the powder coating that it uses to produce subject merchandise.
Instead, Yongjian asserts that the Department verified that the
powder coating used by Yongjian is not in liquid form, like standard
paint or varnish, but rather is in the form of a dry powder, and the
powder coating is not solely based on polyesters, but rather on a
1:1 mixture of polyester and epoxy resins. As such, for the final
determination, Yongjian urges the Department to use HS 3907.3001 and
HS 3907.9102 to value powder coating.
The petitioner states that it agrees with Yongjian that Indian
import statistics should be used to value powder coating but
questions why the respondent provided import data covering the whole
year rather than the POI. The petitioner argues that, in view of the
respondent's failure to provide data contemporaneous to the POI, the
Department should value powder coating as it did in the Preliminary
Determination as the best information available.
Department's Position: We agree with Yongjian. During
verification, we found that the powder coating Yongjian uses is a
dry mixture of polyester and epoxy resins. We are using HS
3907.3001, the subheading for epoxide resins, and HS 3907.9102, the
subheading for polyester resins, to calculate a surrogate value for
powder coating. However, we find that it is not appropriate to
calculate the surrogate value for this material input based on a
full year's data, as suggested by Yongjian. Therefore, we have
valued powder coating with surrogate values using data for the POI
based on HS 3907.3001 and HS 3907.9102 for the purposes of the final
determination. See Comment 11.
F. Cardboard Cartons
For the Preliminary Determination, the Department relied on
Indian import statistics for HS 4819.1009 to calculate the surrogate
value for cardboard cartons. Yongjian contends that this value is
aberrant compared with a domestic Indian price quote from Aakritee
Packaging, which was cited in the Carrier Bags Prelim, and Since
Hardware's market economy purchase price for cardboard cartons.
Yongjian claims that the Department has expressed a preference
for the use of domestic prices from the surrogate country rather
than import values. See, e.g., Pure Magnesium from the People's
Republic of China: Final Results of Antidumping Duty New Shipper
Administrative Review, 63 FR 3085, 3087 (January 21, 1998) (Pure
Magnesium). Moreover, Yongjian contends that the Department has
rejected Indian import statistics in favor of domestic prices based
on the relative specificity of the data to the input being valued.
See Certain Non-Frozen Apple Juice Concentrate from the People's
Republic of China: Final Results of 1999-2001 Administrative Review
and Rescission of Review, 67 FR 68987 (November 14, 2002), Issues
and Decision Memo at Comment 1. Therefore, Yongjian argues that
where the Department has the choice between domestic and import
prices, it should select the price derived from the source that is
more reliable and product-specific. See Yongjian's Case Brief, at
18-20.
The petitioner argues that there is nothing to indicate error in
the Department's valuation of this input. The petitioner contends
that the data sources that are used by Yongjian confirm that the
Indian import statistics are to be relied upon more heavily than
domestic price quotations. In this instance, according to the
petitioner, because the dimensions of the cardboard cartons are not
appropriate for a product similar to ironing boards, the domestic
sales price quote proposed by Yongjian could not have applied to an
input of the same size that is used by Yongjian. Therefore, the
Department should retain the surrogate value for cardboard cartons
that it used for the Preliminary Determination. The petitioner
states that Yongjian offers no valid reason to change the surrogate
value and the Department should retain the surrogate value it
employed for purposes of the Preliminary Determination.
Department's Position: We agree with the petitioner. In the
Preliminary Determination, we used HS 4909.1009, the subheading for
cartons, boxes and cases of corrugated paper or paperboard, to
calculate a surrogate value of cardboard cartons. There is no
information on the record of this investigation that indicates that
the domestic price from Aakritee Packaging \2\ is more reliable and
specific to the product being valued than the surrogate value
calculated using Indian import statistics. We acknowledge the fact
that the Department may have in a particular case expressed a
preference for domestic prices instead of Indian import statistics.
However, this is a case-by-case determination. In Pure Magnesium,
for example, the domestic prices that were selected were more
representative and closer in time to the period of review than other
sources. See Pure Magnesium. In this case, Yongjian does not provide
any evidence that the cardboard cartons sold by Aarkritee Packing
are the same or more similar to the type of cardboard carton used by
ironing board manufacturers than the cartons imported under HS
4909.1009. Therefore, we have continued to use the Indian import
statistics in the final determination.
---------------------------------------------------------------------------
\2\ Furthermore, we note that the Department did not use the
domestic price of Aakritee Packaging in the Carrier Bags Prelim.
Instead, the Department used a weighted-average of HS subheadings
4919.1001 and 4819.1009.
---------------------------------------------------------------------------
G. Filler Pads
For the Preliminary Determination, the Department calculated the
surrogate value for filler pads using Indian import statistics for
HS 4808.1000, which covers corrugated paper and paperboard, whether
or not perforated. Yongjian contends that the Department's
Preliminary Determination valuation of filler pads is based on
aberrant data as compared with Yongjian's surrogate value derived
from Indian import statistics under HS 4805.2901, which covered
cardboard and was used in the Carrier Bags Prelim. Yongjian claims
that the surrogate value calculated for HS 4805.2901 is corroborated
by Since Hardware's market economy purchase price of corrugated
paper. See Yongjian's Case Brief, at 20.
The petitioner states that Yongjian offers no support for its
claim that the filler pads are specific or even similar to the
specific input that Since Hardware uses. Moreover, the petitioner
argues that Yonjian selected the lower value, without justification,
of the two HS subheadings used to value filler pads in the Carrier
Bags Prelim. The petitioner states that Yongjian offers no valid
reason to change this surrogate value and the Department should
continue the surrogate value treatment it employed for purposes of
the Preliminary Determination.
Department's Position: We agree with the petitioner. Nowhere on
the record of this investigation has Yongjian stated that the filler
pads it used during the POI are similar to the separating corrugated
paper reported by Since Hardware or the products covered under HS
4805.2901, which the Department used in Carrier Bags from China to
value cardboard inserts as cited in Yongjian's March 29, 2004,
submission. Yongjian classifies filler pads as a part of its packing
materials but does not fully explain their use. HS 4808.1000, which
covers corrugated paper and paperboard, whether or not
[[Page 35308]]
perforated and HS 4805.2901, which covers cardboard, are two
distinct products and there is no evidence on the record that
indicates it is appropriate to compare the two products to determine
if the price of one is aberrational. We note that Yongjian has not
argued that the HS subheading that the Department used in the
Preliminary Determination is inappropriate to calculate a surrogate
value for filler pads. We have examined imports under the HS
subheading to determine if any imports under this category were
aberrational and found that they were not. Therefore, for the final
determination, we have continued to use HS subheading 4808.1000 to
calculate a surrogate value for filler pads.
H. Labels and Bar Code Labels
For the Preliminary Determination, the Department relied on the
Indian import statistics for HS 4821.9000, which covers paper labels
(not printed), self-adhesive or not, to calculate the surrogate
value for labels and bar code labels. However, Yongjian contends
that the labels and bar code labels used by Yongjian are printed,
some self-adhesive and some not. Yongjian contends that the
Department's Preliminary Determination valuation of labels and bar
code labels is excessive as compared with Yongjian's surrogate value
derived from Indian import statistics for the four-digit HS 4821,
which covers labels of paper or paperboard, printed or not. Yongjian
states that the surrogate value of HS 4821 is in line with Since
Hardware's ranged market economy purchase price for its manual
labels. See Yongjian's Case Brief, at 20 and 21.
Department's Position: We disagree with Yongjian. Despite
Yongjian's assertion in its Case Brief, there is nothing on the
record of this investigation that demonstrates that Yongjian uses
labels other than the paper labels (not printed), self-adhesive or
not, that are classified under HS 4821.9000. In addition, in stating
that the Department's surrogate value for labels and bar code labels
are aberrant compared to Since Hardware's market economy purchase
price of manual labels, we note that Yongjian made no effort to
document that the two types of labels are similar or are classified
under the same HS number. In fact, Since Hardware itself
distinguishes between the two types of labels that it purchases, one
type is valued with a market economy price (i.e., manual labels),
and the other type (i.e., marking label) is valued using the same HS
number used to value Yongjian's labels and bar code labels, HS
4821.9000. Therefore, for the final determination, the Department
has continued to value Yongjian's labels and bar code labels using
HS 4821.9000.
Comment 7: Whether the Department Should Accept Since Hardware's Market
Economy Purchases That Were Not Verified by the Department
The petitioner argues that for the Preliminary Determination the
Department erred by using market-economy purchase prices for cold-
rolled steel coil and hot-rolled steel coil used by Since Hardware.
See Petitioner's Case Brief, at 18-24. The petitioner states that it
submitted pre-verification comments to the Department where it
challenged the authenticity of certain market economy purchases
because (1) the material input prices appeared to be inconsistent
with regional commodity trends and (2) the HS codes submitted to
Chinese customs do not represent the materials that Since Hardware
claimed to have imported. These comments emphasized that all market
economy transactions warranted close scrutiny by the Department
during verification. The petitioner acknowledges that the Department
verified market economy purchases made in December 2002, but notes
that the Department did not verify transactions made in 2003.
Therefore, the petitioner urges the Department to reject Since
Hardware's 2003 purchase values of market economy materials as
unverified and inherently unreliable. See Petitioner's Case Brief,
at 18-24.
In rebuttal, Since Hardware states that the Department should
not revise any of the market-economy input pricing data reported by
Since Hardware in the Preliminary Determination. See Since
Hardware's Rebuttal Brief, at 9-11. Since Hardware contends that it
is the Department's practice to verify information contained in a
company's responses on the basis of the sampling of submitted data.
Since Hardware states that the Court of International Trade (CIT)
concluded that the Department ``has the discretion to choose which
items it will verify, and so long as Commerce has not uncovered
facts in the process of verification that point to an improper
accounting * * *. Commerce is not compelled to search further.'' See
PMC Specialities Group, Inc. v. United States, 20 C.I.T. 1130, 1134-
35 (1996). Since Hardware states that because the Department
verified Since Hardware's market-economy material purchases of cold-
rolled steel coil and hot-rolled steel coil and noted no
discrepancies, there was no evidence of improper accounting, or
evasion, and there was no reason for the Department to search
further. As such, Since Hardware urges the Department not to revise
any of the market-economy input pricing data reported by Since
Hardware for the final determination. See Since Hardware's Rebuttal
Brief, at 9-11.
Department's Position: We agree with Since Hardware. When
conducting verification, the Department is not required to test
every single sale or purchase reported by the respondent during the
course of an investigation. To do so would be an almost impossible
task. Instead, the Department verifies samples of submitted data.
The CIT has affirmed this approach, observing:
Verification is like an audit, the purpose of which is to test
information provided by a party for accuracy and completeness.
Normally an audit entails selective examination rather than testing
of an entire universe. Hence, evasion is a common possibility, but
only when audits uncover facts indicating the actuality thereof are
auditors compelled to search further * * * Commerce has the
discretion in choosing which items it will verify, and so long as
Commerce has not uncovered facts in the process of verification that
point to an improper accounting * * * Commerce is not compelled to
search further.''
See PMC Specialities Group, Inc. v. United States, 20 CIT 1130,
1134-35 (1996). See Certain Welded Carbon Steel Pipes and Tubes from
Thailand, 65 FR 60910 (October 13, 2000).
We note that the petitioner's pre-verification comments were
extensive and voluminous. In the limited amount of time allotted to
verification, the verifiers covered a vast portion of the
petitioner's concerns while still completing a full and detailed
verification following the procedures explained in the verification
outline. At verification, we looked at a number of market economy
purchases and found no discrepancies. For example, we examined cold-
rolled steel and hot-rolled steel market economy purchases. Based
upon the information gathered at verification, the Department has no
reason to question Since Hardware's reported market economy
purchases. The Department found no discrepancies in Since Hardware's
methodology in reporting market economy prices for its market
economy purchases. 19 CFR 351.307(b) and (d) provide for flexibility
in conducting verifications by permitting the examination of a
sample of expenses, adjustments, and other topics that we consider
relevant to factual information submitted. This reflects the fact
that verification is like a sampling exercise and is not intended to
be an exhaustive examination of every topic. See Certain Internal-
Combustion Industrial Forklift Trucks from Japan; Final Results of
Antidumping Duty Administrative Review, 62 FR 5592, 5602 (February
6, 1997). In this case, the Department followed its verification
procedures and thoroughly examined the market economy purchases of
cold-rolled and hot-rolled steel coil for certain months and found
no discrepancies.
However, we note that the petitioner's argument with respect to
the market economy purchase price of cold-rolled steel coil is moot.
For the final determination, we have continued to use a surrogate
value for Since Hardware's cold-rolled steel coil input. See Comment
8. With respect to Since Hardware's market economy purchase price
for hot-rolled steel coil, we do not think that the purchase price
is aberrationally low. According to Since Hardware's March 31, 2004
public version of ranged prices for its hot-rolled steel coil
purchases, Since Hardware's purchase price of hot-rolled steel coil
is $0.32/kg. By comparing Since Hardware's publicly ranged price of
$0.32/kg to the Department's surrogate value for hot-rolled steel
coil of $.028/kg, the Department finds that Since Hardware's market
economy purchase price is reasonable. Because Indian import
statistics are based on the sum of all imports into India during the
POI, we regard that figure as a reliable benchmark. Nowhere in this
investigation has the petitioner suggested that the WTA data that
the Department used in calculating the surrogate value for hot-
rolled steel coil is aberrational. Therefore, for the final
determination, we have continued to use Since Hardware's market
economy price to value hot-rolled steel coil.
[[Page 35309]]
Comment 8: Whether the Department Should Use the Market Economy Price
To Value Cold-Rolled Steel Inputs
Since Hardware urges the Department to use the actual market
economy prices paid to a Hong Kong supplier to value Since
Hardware's cold-rolled steel inputs. See Since Hardware's Case
Brief, at 6-10. Citing section 351.408(c)(1) of the Department's
regulations, Since Hardware states that ``where a factor is
purchased from a market economy supplier and paid for in a market
economy currency, the Secretary normally will use the price paid to
the market economy supplier'' to value the factors of production.
However, for the Preliminary Determination, Since Hardware alleges
that the Department disregarded the actual prices paid by Since
Hardware for Hong Kong purchases of cold-rolled steel. Instead,
Since Hardware asserts that the Department indicated that it had
``reason to believe or suspect that cold-rolled steel from the
country in question {was{time} being dumped,'' and thus the
Department ``disregarded prices for cold-rolled steel from this
country, and instead used the Indian surrogate value * * *.'' See
Preliminary Determination, at 5131. See Since Hardware's Case Brief,
at 6 and 7.
Since Hardware argues that while the cold-rolled steel it
purchased might have been manufactured in a country subject to a PRC
antidumping duty order, Since Hardware did not purchase the cold-
rolled steel directly from that country. Instead, Since Hardware
claims that it purchased the cold-rolled steel sheet directly from
its Hong Kong reseller supplier, that, in turn, may have purchased
the cold-rolled steel either directly or indirectly from a country
subject to the PRC antidumping duty order. See Since Hardware's Case
Brief, at 7 and 8.
Furthermore, Since Hardware notes that, in CTVs from the PRC,
the Department considered whether to accept the prices for inputs
purchased through Hong Kong trading companies that originated in a
country with broadly available non-industry-specific export
subsidies that might be distorted due to subsidies. In comparing
CTVs from the PRC to the current investigation, Since Hardware
explains that its cold-rolled steel supplier is located in Hong
Kong. Since Hardware states that this trading company was not
subject to any PRC government dumping investigation, and cannot be
presumed to have benefitted from any input price distortion caused
by dumping. Therefore, Since Hardware concludes that the Department
has no reason to believe or suspect that the sales prices from this
Hong Kong supplier to Since Hardware are distorted. Because there is
no record evidence that Since Hardware's Hong Kong supplier of cold-
rolled steel purchased the input at dumped prices, or that it
``passed'' any distortion on to Since Hardware, Since Hardware
contends that there is no reason for the Department to deviate from
its normal practice of using the prices paid to a market economy
supplier to value Since Hardware's factors of production. As such,
for the final determination, Since Hardware urges the Department to
follow its practice in CTVs from the PRC, and not reject prices of
goods purchased in Hong Kong based on the country of origin of the
goods. See Since Hardware's Case Brief, at 9 and 10.
The petitioner argues that Since Hardware's purchases of cold-
rolled steel produced in the market economy country should be valued
using surrogate prices. The petitioner states that Since Hardware's
suggestion in its Case Brief that it was not certain of the origin
of the cold-rolled steel that it purchased is hardly the case. The
petitioner notes that in Since Hardware's own questionnaire
response, Since Hardware acknowledged that it purchased the steel
from the market economy country subject to the PRC dumping case. In
addition, the petitioner points out that the sales confirmations,
which ultimately complete the contract of sale, clearly record the
country of origin of certain cold-rolled steel and it is undisputed
that cold-rolled steel from its market economy country is subject to
a Chinese antidumping order.
The petitioner states that Since Hardware's argument that there
is no evidence on the record to suggest that the prices paid by
Since Hardware's Hong Kong supplier, or paid by Since Hardware to
its Hong Kong supplier, for cold-rolled steel were distortive,
ignores the body of authority squarely against its position. The
petitioner argues that the existence of the PRC antidumping duty
order alone provides the Department with a reason to believe or
suspect that the input is being dumped and no formal investigation
into costs or pricing is required. The petitioner states that it can
in no way matter whether the dumped input is imported into the NME
country directly from the country of origin or, indirectly, through
a trading company in a third country: country of origin, not the
country of exportation, determines whether a product is subject to
an antidumping duty order.
Additionally, the petitioner disagrees with Since Hardware's
argument that the Department should accept its market economy prices
for cold-rolled steel because the Department chose to accept the
prices for inputs purchased through Hong Kong trading companies that
originated in a country with broadly available, potentially price-
distorting non-industry-specific export subsidies. See CTVs from the
PRC. The petitioner argues that CTVs from the PRC is directed
specifically at subsidies (based on information regarding general
availability), rather than at dumped inputs (based specifically on a
Chinese antidumping duty order). The petitioner notes that the
Department noted the difference between findings of dumping and
countervailable subsidies and it stated that it will disregard
market economy prices for imported inputs as dumped ``when the
importing country has an antidumping duty order in effect for the
products in question.'' See Final Determination of Sales at Less
than Fair Value: Folding Metal Tables and Chairs from the People's
Republic of China, 67 FR 20090 (April 24, 2002) (Folding Metal
Tables and Chairs). The petitioner points out that a subsidy finding
may not necessarily be based on an action taken in the importing NME
country, but could be based on a CVD order issued anywhere in the
world, or even simply information tending to show the existence of
generally available, non-industry specific export subsidies. See Id;
See also Automotive Replacement Glass Windshield from the People's
Republic of China, 67 FR 6482 (February 12, 2002). The petitioner
argues that, in this case, the importing country, China, conducted
an investigation and entered an antidumping order against the
product and Since Hardware offers no evidence, nor does it even
suggest that China would permit its trade remedies to be so easily
circumvented by excluding products subject to a dumping order from
dumping duties if they were shipped through a third country seller.
Finally, the petitioner states that, while the existence of the
Chinese antidumping duty order is sufficient to presume dumping or
distorted prices of products covered by that order, the record
contains evidence of distorted and aberrational pricing of the cold-
rolled steel purchased by Since Hardware. The petitioner claims that
the prices reportedly paid by Since Hardware during the POI for
cold-rolled steel from the market economy country are not comparable
to the product imported into China or produced in China or other
cold-rolled steel prices in the administrative record. The
petitioner states that the record shows that the prices paid by
Since Hardware are aberrational and unreliable and should not be
considered by the Department. The petitioner argues that the
Department should reject Since Hardware's alleged market economy
prices for cold-rolled steel sheet from the market economy country,
as it has done in the Preliminary Determination, and value this
input based on surrogate prices from India.
Department's Position: We agree with the petitioner. In this
case, Since Hardware reported that it purchased from a Hong Kong
reseller cold-rolled steel that was produced in the market economy
country (the name of the market economy country is business
proprietary information). See Since Hardware's Section C and D
questionnaire response at Exhibit 4, dated October 14, 2003.
However, in contrast to CTVs from the PRC, the Department has
generally available public information indicating that the PRC
government has imposed an antidumping duty order on cold-rolled
steel originating in Kazakhstan, the Republic of Korea, Ukraine,
Russia, and Taiwan (PRC Antidumping Order). See Memorandum from Sam
Zengotitabengoa, International Trade Compliance Analyst, to the
File, ``PRC AD Final Determination,'' dated January 26, 2003. The
country and products covered by the PRC Antidumping Order correspond
to the cold-rolled steel purchases made by Since Hardware during the
POI. Thus, we know that Since Hardware purchased cold-rolled steel
covered by a PRC Antidumping Order. The Department has said that
when an importing country has an antidumping duty order in effect
for the products in question, it will disregard the market economy
prices for these imported inputs as dumped. See Synthetic Indigo
From the People's Republic of China: Final Results of Antidumping
Duty Administrative Review, 68 FR 53711 (September 12, 2003) and
accompanying Decision Memorandum at Comments 4 and 8.
[[Page 35310]]
Regarding Since Hardware's argument that there is no evidence on
the record to suggest that the prices it paid for cold-rolled steel
were dumped or distorted, we find that no specific evidence is
necessary. The Department only needs to have a reason to believe or
suspect that this input is being dumped. See Final Determination for
the 1998-99 Administrative Review of Tapered Roller Bearings and
Parts Thereof, Finished and Unfinished, from the People's Republic
of China, 66 FR 1953 (January 10, 2001), Issues and Decision
Memorandum at Comment 1. In this case, the PRC Antidumping Order
provides the Department with a reason to believe or suspect that
cold-rolled steel produced in a covered market economy country may
be dumped. Therefore, for the final determination, we have continued
to use Indian import statistics to value Since Hardware's cold
rolled steel coil input.
Comment 9: Whether the Department Should Consider Billing Adjustments
in the Calculation of Since Hardware's U.S. Price
The petitioner argues that for the Preliminary Determination the
Department erred by granting Since Hardware a billing adjustment for
extra inland freight and origin receiving charges (ORCs) incurred on
behalf of Since Hardware's customers and for which Since Hardware
was reimbursed. See Petitioner's Case Brief, at 17 and 18. The
petitioner emphasizes that Since Hardware distinguishes these costs
from the ``general inland freight and port handling charges for all
sales of the subject merchandise.'' See Petitioner's Case Brief at
17. The petitioner states that because ``these fixed charges are
incurred at the request of the customer, are paid initially by Since
Hardware but are reimbursed directly by the customer, and quite
logically are not included in the price of the merchandise, there is
no need for the Department to devise an adjustment to account for
such ``extra costs''--but there also is no need for the extra costs
to be added, as billing adjustments, to the sales price (since they
are not any part of such price).'' See Petitioner's Case Brief, at
18. Instead, the petitioner believes that these extra charges should
be appropriately treated as a separate item, not affecting the price
of the subject merchandise. As such, for the final determination,
the petitioner urges the Department not to consider these extra
costs for purposes of a billing adjustment in the calculation of
Since Hardware's export value. See Petitioner's Case Brief, at 17
and 18.
In rebuttal, Since Hardware states that the Department should
not adjust the treatment of Since Hardware's claimed and verified
billing adjustment as incorporated in the Preliminary Determination.
See Since Hardware's Rebuttal Brief, at 7-9. In justifying the
billing adjustment, Since Hardware claims that the price used to
establish export price and constructed export price shall be ``(1)
increased by (A) when not included in such price, the cost of all
containers and coverings and all other costs, charges, and expenses
incident to placing the subject merchandise in condition packed
ready for shipment to the United States.'' See section 772(c) of the
Act. Since Hardware alleges that the Department has interpreted the
``charges'' as requiring that U.S. price be increased by the amount
of any freight, packing, and handling revenue that is charged to the
U.S. customer. See, e.g., Ball Bearings (Other Than Tapered Roller
Bearings) and Parts Thereof, From Germany: Preliminary Results of
New Shipper Antidumping Duty Administrative Review, 61 FR 4763, 4764
(February 8, 1996). See, also, Certain Hot-Rolled Carbon Steel Flat
Products from the Netherlands: Preliminary Results of Antidumping
Duty Administrative Review, 68 FR 68341, 68344 (December 8, 2003).
See, also, Wax and Wax/Resin Thermal Transfer Ribbons From the
Republic of Korea, 68 FR 71078, 71080 (December 22, 2003). In
addition, Since Hardware claims that the Department noted that
``where freight and movement charges are not included in the price,
but are invoiced to the customer at the same time as the charge for
the merchandise, the Department considers the transaction to be
similar to a delivered price transaction since the seller may
consider its return on both transactions in setting price.'' See
Stainless Steel Wire Rod from the Republic of Korea: Final Results
of Antidumping Duty Administrative Review, 69 FR 19153 (April 12,
2004) (Stainless Steel Wire Rod), at Issues and Decisions
Memorandum, Comment 9. For this final determination Since Hardware
urges the Department to add to the gross unit price Since Hardware's
ORC revenue associated with each sale (reported in ``BILLADJU''),
and subtract from the gross unit price the brokerage and handling
expense incurred by Since Hardware to ship the subject merchandise
to the United States. See Since Hardware's Rebuttal Brief, at 7-9.
Department's Position: We agree with the petitioner. In the
Preliminary Determination, the Department granted Since Hardware's
billing adjustment by adding the billing adjustment to the U.S.
gross unit price. At verification, the Department verified that
Since Hardware did, indeed, charge certain U.S. customers for an
expense incurred at the port called the ORC. This charge was
reported as a billing adjustment. However, we disagree with Since
Hardware's characterization of this expense as freight or handling
revenue. The amount that Since Hardware charged the U.S. customer is
merely a reimbursement for an expense Since Hardware incurred. In
this case, the customer elects to bear this extra cost when it
requests that Since Hardware ship merchandise out of certain ports
where the ORC is assessed. Since Hardware initially pays for this
expense on behalf of the customer and then charges the customer for
the fixed amount as a separate line item on the invoice. It is not
part of the negotiated price of the merchandise and there is no
indication that it is part of the surrogate value for brokerage and
handling.
Additionally, we note that Since Hardware's reliance on
Stainless Steel Wire Rod is misplaced. In Stainless Steel Wire Rod,
the delivery terms were part of the terms of sale and, hence, can be
expected to have a direct impact on the negotiated sales price.
However, in this case, Since Hardware clearly indicated that the ORC
charges are ``extra costs borne by Since Hardware's customers'' and,
as extra costs, are not a part of the delivery terms and should have
no impact on the negotiated sales price. Therefore, for the Final
Determination, we have not included the billing adjustment in the
calculation of export price.
Comment 10: Whether the Department Selected the Proper Data Source for
its Calculation of Surrogate Overhead, SG&A, and Profit Ratios
The petitioner contends that the administrative record does not
contain information from a producer of merchandise identical or
comparable to the producer of the subject merchandise. As such, the
petitioner urges the Department to calculate the surrogate ratios
for factory overhead, selling, general, and administrative (SG&A)
expenses, and profit (collectively financial ratios) by using data
published in the Reserve Bank of India Bulletin (RBI Bulletin).
Specifically, the petitioner urges the Department to use the data
for 997 companies, as published in the April 2004 RBI Bulletin,
because these are the most contemporaneous data of companies that
have a paid-up capital that are similar to the capitalization of the
respondents. See HPI's Case Brief, at 2-11.
Since Hardware contends that in the Preliminary Determination,
the Department erred in using the data for 2,024 companies, as
published in the October 2003 RBI Bulletin, to calculate the
financial ratios. Since Hardware asserts that the Department will
normally use non-proprietary information gathered from producers of
identical or comparable merchandise in the surrogate country to
calculate financial ratios. See 19 CFR 351.408(c)(4). Since Hardware
alleges that the Department has a preference for using data from
individual producers of identical or comparable merchandise rather
than data having a more generalized industry-wide basis. See Notice
of Final Determination of Sales at Less Than Fair Value: Non-
Malleable Cast Iron Pipe Fittings from the People's Republic of
China, 68 FR 7765 (February 18, 2003), Issues and Decision
Memorandum, at Comment 4. Moreover, Since Hardware suggests that the
Department rely on Import Administration's Policy Bulletin 04.1,
``Non-Market Economy Surrogate Country Selection Process''
(Surrogate Country Selection Policy Bulletin), dated March 1, 2004,
as a guide to determine what is identical or comparable merchandise.
Since Hardware states that Godrej & Boyce Manufacturing Co.,
Ltd. (Godrej) is a company that produces metal-fabricated cabinets,
shelves, and wardrobes. Since Hardware contends that Godrej produces
products that are comparable to the subject merchandise because: (1)
They have similar physical characteristics, and use the same
material inputs (e.g. steel/cold-rolled steel); (2) the production
processes for ironing tables and the metal-fabricated shelving and
cabinets are similar in that both involve relatively simple metal-
fabrication and assembly production processes; and (3) in terms of
end uses, ironing tables are comparable to the metal-fabricated
shelving
[[Page 35311]]
and cabinets in that both are finished consumer goods. Since
Hardware contends that data published in the RBI Bulletin are based
on a broad spectrum of Indian manufacturers, agricultural companies,
and service providers. Moreover, Since Hardware claims that the
Department has rejected RBI data when data from a producer of
comparable merchandise were available. See, e.g., Lawn and Garden
Fence Posts from the People's Republic of China, 67 FR 72141
(December 4, 2002); Glycine from the People's Republic of China:
Final Results of New Shipper Administrative Review, 66 FR 8383
(January 31, 2001) (Glycine), 66 FR 8383 (January 31, 2001); and
Final Results and Partial Rescission of Antidumping Duty
Administrative Review: Certain Cased Pencils from the People's
Republic of China, 67 FR 48,612 (July 25, 2002) (Cased Pencils), and
accompanying Issues and Decision Memorandum, at Comment 5. In
addition, Since Hardware alleges that the CIT has acknowledged that
the RBI data are not an appropriate surrogate value source because
of their generalized nature. See Shanghai Foreign Trade Enterprises
Co., Ltd. and Shanghai Pudong Malleable Iron Plant, v. the United
States and Anvil International, Inc. and Ward Manufacturing, Inc.,
No. 03-00218, Slip Op. 04-33 (CIT April 9, 2004) (Non-Malleable
Remand); and Yantai Oriental Juice Co. v. United States, Slip Op.
02-56, at 27 (CIT June 18, 2002) (Yantai Oriental). Lastly, since
the Department previously accepted Godrej financial data to
calculate surrogate financial ratios in Folding Chairs, Since
Hardware urges the Department to also accept the Godrej financial
data in this investigation given the nearly identical physical
characteristics shared by folding metal tables and chairs and
ironing boards. As such, Since Hardware contends that the data
published in the RBI Bulletin cannot be more appropriate than the
Godrej data for purposes of calculating the financial ratios. As
such, Since Hardware urges the Department to use the financial data
from Godrej. See Since Hardware's Case Brief, at 10-15; See Since
Hardware's Rebuttal Brief, at 1-4.
Yongjian contends that the valuation of financial ratios needs
to be based on the experience of market economy producers of
``identical or comparable merchandise.'' See Section 351.408(c)(4)
of the Department's regulations. Yongjian asserts that to determine
whether merchandise is identical or comparable to the subject
merchandise, the Department should consider ``whether the products
have similar physical characteristics, end uses, and production
processes. When evaluating production processes, the Department
[should consider] the complexity and duration of the processes and
types of equipment used in production.'' See Cased Pencils, Issues
and Decision Memorandum, at Comment 5. Yongjian asserts that in
Glycine the Department states that it is its ``practice to use
financial data that are more narrowly limited to a producer of
comparable merchandise than data based on a wider range of products
when the former data are available. In addition, Yongjian claims
that in the Notice of Final Determination of Sales at Less Than Fair
Value: Bulk Aspirin from the People's Republic of China, 65 FR 33805
(May 25, 2000) (Bulk Aspirin), Issues and Decision Memorandum, at
Comment 4, the Department states that ``because we seek information
that pertains as narrowly as possible to the subject merchandise,
the Department, in most cases, has used the producer-specific data
since industry-specific data available to the Department tends to be
broad in terms of the merchandise included. This, however, does not
mean that we would always prefer the producer-specific data, if we
were presented with industry and producer data that were equally
specific in terms of the merchandise produced.'' Id.
Yongjian alleges that Godrej's fabricated metal merchandise and
the subject merchandise are two slightly different classes of
fabricated metal products that are comparable to one another because
they are: (1) Made of steel sheet, flat steel products, metal
fasteners and the like, probably steel pipe/tube (as garment hanging
rods in wardrobes), various plastic and rubber components, and oven
baked luster enamel coatings; and (2) joined together with the same
general production process (i.e., welding and assembly of moving
parts). Yongjian asserts that the data published in the RBI Bulletin
are insignificantly impacted by the fabricated metal products
companies. In addition, Yongjian points out that the gross profits
and profits after tax in 2002-2003 were negative for the fabricated
metal products industry. As such, Yongjian contends that, because
the data published in the RBI Bulletin are too generic to withstand
serious scrutiny in view of the Department's stated policy, its
specific regulation, and recent and consistent pronouncements of the
CIT, the Department should use the financial data from Godrej, that
allegedly operates in the same fabricated metals industry as ironing
table producers, to calculate the surrogate financial ratios. See
Yongjian's Case Brief, at 25-32; Yongjian's Rebuttal Brief, at 2 and
3.
Yongjian summarizes that in the Notice of Final Determination of
Sales at Less Than Fair Value: Creatine Monohydrate from the
People's Republic of China, 64 FR 71,204 (December 20, 1999)
(Creatine Monohydrate), Issues and Decision Memorandum, at Comment
1, the Department ``eschewed'' the use of data published in the RBI
where information relating to a narrower category of comparable
products was available. As prior examples of how the Department
analyzed comparability, Yongjian points to the following notices:
Notice of Final Determination of Sales at Less Than Fair Value: Urea
Ammonium Nitrate Solutions from the Russian Federation, 68 FR 9977
(March 3, 2003) (Urea Ammonium Nitrate Solutions), Issues and
Decision Memorandum, at Comment 6, where the Department considered
ammonium nitrate and urea to be comparable to the urea ammonium
nitrate solutions under investigation; Cased Pencils, Issues and
Decision Memorandum, at Comment 5, where the Department considered
wooden cabinets, doors, and handicrafts to be comparable to the
cased pencils under review. In Cased Pencils, Yongjian cites that
the Department ``did not have industry sector-specific RBI data for
an industry more comparable to pencil production.'' Id.; Glycine,
Issues and Decision Memorandum, at Issue f, where the Department
considered phenylglycine to be comparable to the glycine under
investigation, because the products appeared to have similar raw
materials, similar production equipment, and similar production
processes; Notice of Final Determination of Sales at Not Less Than
Fair Value: Pure Magnesium in Granular Form from the Russian
Federation, 66 FR 49,347 (September 27, 2001) (Pure Magnesium),
Issues and Decision Memorandum, at Comment 1, where the Department
determined zinc to be comparable to the pure magnesium under
investigation. See Yongjian's Case Brief, at 25 and 27; Synthetic
Indigo from the People's Republic of China: Notice of Final
Determination of Sales at Less Than Fair Value, 65 FR 25,706 (May 3,
2000) (Synthetic Indigo), Issues and Decision Memorandum, at Comment
6, where Yongjian first states that the Department considered
general chemical and hydrogen peroxide not to be comparable to the
synthetic indigo under investigation (See Yongjian's Case Brief, at
26, footnote 44) but then states that the Department found that
phenylglycine and synthetic indigo used some of the same raw
materials and had similar production processes (See Yongjian's Case
Brief, at 28). See Yongjian's Case Brief, at 25 and 27-28.
In rebuttal, the petitioner explains that Godrej is a
conglomerate of companies that does not produce merchandise that is
identical or comparable to the subject merchandise. Instead, the
petitioner argues that Godrej's data are based upon so diverse a
product mix that they cannot reflect data from a producer of ironing
tables. The petitioner also contends that the Godrej financials are
not as contemporaneous as the data published in the RBI Bulletin.
Furthermore, the petitioner argues that Godrej's 2003 financial data
is aberrational and distortive because of Godrej's changes in
structure and operations, as well as changes in accounting methods
that affect the surrogate financial ratios. Lastly, the petitioner
contends that Godrej's 2002-2003 performance represents an extreme
divergence from the preceding year and is an outlier with respect to
all of the Godrej data on this record. Moreover, the petitioner
argues that the data published in the RBI Bulletin represent a year-
to-year reliably stable source for surrogate financial ratios.
Comparatively, the petitioner argues, Godrej's aggregate ratios vary
widely, with year-to-year performances exceeding 10 percentage
points between single years which can hardly be viewed as reliable.
As such, the petitioner claims that the Department turned to data
published in the RBI Bulletin well within its authority.
In its rebuttal, Since Hardware argues that the Department's
regulations and practice do not recognize the level of
capitalization as a determinant for selecting appropriate surrogate
value information. See Bulk Aspirin, Issues and Decision Memorandum,
at Comment 4, (where the Department states that ``[r]egarding the
petitioner's arguments
[[Page 35312]]
about capacity, we do not believe that size or capacity of the
surrogate producer always poses a necessary consideration. In this
case, unlike Sigma v. United States, 117 F. 3d 1401, 1414 (Fed. Cir.
July 7, 1997) (Sigma), we have no evidence demonstrating that
overhead rates vary directly with the scale or capacity of Indian
aspirin (or other chemical) producers.''). See Since Hardware's
Rebuttal Brief, at 1-3.
Department's Position: We agree with the respondents. The
Department's regulations directs the Department to ``normally * * *
use non-proprietary information gathered from producers of identical
or comparable merchandise in the surrogate country.'' See 19 CFR
351.408(c)(4). To determine whether merchandise is identical or
comparable to the subject merchandise, the Department compares
physical characteristics, end uses, and production processes between
the merchandise produced by a company and the subject merchandise.
See Cased Pencils, Issues and Decision Memorandum, at Comment 5. If
the record contains reliable and contemporaneous data from a company
that produces merchandise that is identical or comparable to the
subject merchandise, then the Department will use that company's
financial data to calculate the surrogate financial ratios.
In this instance, Godrej's 2002-2003 Annual Report indicates
that Godrej manufactures a variety of products, a significant
portion of which is steel furniture. See Information from Keir A.
Whitson, to the Honorable Donald L. Evans, Secretary of Commerce,
``Publicly Available Information,'' dated March 29, 2004, at exhibit
2 ``Godrej's Annual Report & Accounts for the Year Ended 31st March,
2003.'' We find that steel furniture is more comparable to ironing
boards than the broad industry groupings provided in the RBI
Bulletin, which reflect an unknown, but likely substantially
smaller, portion of comparable merchandise. The Department uses
broader industry averages as published in the RBI Bulletin when no
usable financial data from producers of comparable merchandise are
available. In this case, the Department does not need to rely upon
surrogate information derived from broader industry groupings (i.e.
data published in the RBI Bulletin) to calculate surrogate financial
ratios. Instead, in accordance with section 351.408(c)(4) of the
Department's regulations, we find that Godrej's 2002-2003 Annual
Report provides non-proprietary information gathered from a producer
of comparable merchandise in the surrogate country that is suitable
for purposes of calculating surrogate financial ratios.
In response to the petitioner's argument that Godrej's financial
data is aberrational and distortive, we disagree. Godrej's 2002-2003
Annual Report states that Godrej acquired two companies and
accounted for them in accordance with ``auditing standards generally
accepted in India * * * and relevant requirements under the
Companies Act of 1956.'' See Godrej's 2002-2003 Annual Report, at 12
and 29. Notwithstanding Godrej's acquisitions, the 2002-2003 Annual
Report states that steel furniture sales increased significantly
from the previous year, and that steel furniture sales remain at the
top of Godrej's product mix. Therefore, although we recognize that
Godrej did undergo a change in corporate structure, we find that the
change did not substantially impact the production or sales of steel
furniture.
Because data published in the RBI Bulletin represents the
average experience of companies from broad industry groupings, we
find that Godrej's financial statements offer more product-specific
financial information than RBI data. Although Grodrej manufactures
other products besides steel furniture, we are able to discern that
a significant portion of its production is devoted to steel
furniture. In contrast, we are unable to find whether or not
comparable merchandise represents a significant portion of the data
published in the RBI Bulletin.
Therefore, for the reasons mentioned above, and consistent with
prior practice, the Department is relying on Godrej's 2002-2003
financial information to calculate surrogate financial ratios.
Comment 11: Corrections to Yongjian's Database Presented at
Verification
Yongjian noted that at verification it presented the Department
with a revised factors of production chart containing corrections
and clarifications for cold-rolled steel, hot-rolled steel, steel
wire, and powder coating. Yongjian states that these corrected
materials should be used in the calculation of Yongjian's normal
value. See Yongjian's Case Brief, at 6 and 7.
The petitioner did not comment on this issue.
Department's Position: On the first day of verification,
Yongjian provided the Department with a list of minor corrections.
During the course of verification, we reviewed these corrections and
verified that they were accurately submitted. See Yongjian's FOP
Verification Exhibits, Exhibit 1. Therefore, we have included
Yongjian's corrections in the final determination.
Recommendation: Based on our analysis of the comments received,
we recommend adopting all of the above positions and adjusting all
related margin calculations accordingly. If these recommendations
are accepted, we will publish the final determination in this
investigation and the final weighted-average dumping margins in the
Federal Register.
Agree------------------------------------------------------------------
Disagree---------------------------------------------------------------
Dated: June 15, 2004.
James Jochum,
Assistant Secretary for Import Administration.
[FR Doc. 04-14360 Filed 6-23-04; 8:45 am]