Heavy Forged Hand Tools, Finished or Unfinished, With or Without Handles, from the People's Republic of China; Final Results of Antidumping Administrative Review

DEPARTMENT OF COMMERCE

[A-570-803]

Heavy Forged Hand Tools, Finished or Unfinished, With or Without

Handles, from the People's Republic of China; Final Results of

Antidumping Administrative Review

AGENCY: Import Administration, International Trade Administration,

Department of Commerce.

ACTION: Notice of Final Results of the Antidumping Duty Administrative

Review of Heavy Forged Hand Tools, Finished or Unfinished, With or

Without Handles, from the People's Republic of China.

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SUMMARY: On August 16, 1995, the Department of Commerce (the

Department) published in the Federal Register the preliminary results

of its administrative review of the antidumping duty orders on heavy

forged hand tools, finished or unfinished, with or without handles

(HFHTs) from the People's Republic of China (PRC) (60 FR 42516). This

review covers the period February 1, 1993, through January 31, 1994. We

gave interested parties an opportunity to comment on our preliminary

results. Based upon our analysis of the comments received, we have

changed the results from those presented in the preliminary results of

review.

EFFECTIVE DATE: April 4, 1996.

FOR FURTHER INFORMATION CONTACT: Tom Prosser or Maureen Flannery,

Office of Antidumping Compliance, Import Administration, International

Trade Administration, U.S. Department of Commerce, 14th Street and

Constitution Avenue, N.W., Washington D.C. 20230; telephone (202) 482-

4733.

Applicable Statute and Regulations

Unless otherwise stated, all citations to the statute and to the

Department's regulations are references to the provisions as they

existed on December 31, 1994.

SUPPLEMENTARY INFORMATION:

Background

On February 4, 1994, the Department published in the Federal

Register (59 FR 5390) a notice of opportunity to request administrative

reviews of these antidumping duty orders. On Februrary 28, 1994, in

accordance with 19 CFR 353.22(a), two resellers of the subject

merchandise to the United States, Fujian Machinery & Equipment Import &

Export Corporation (FMEC) and Shandong Machinery Import & Export

Corporation (SMC), requested that we conduct administrative reviews of

their exports of subject merchandise to the United States. We published

the notice of initiation of these antidumping duty administrative

reviews on March 14, 1994 (59 FR 11768). The notice of initiation was

amended on June 15, 1994 (59 FR 30770) and July 15, 1994 (59 FR 36160).

On August 16, 1995, the Department published in the Federal

Register the preliminary results of the administrative reviews of the

antidumping duty order on HFHTs from the PRC (60 FR 42516). A timely

request for a hearing was submitted by Woodings-Verona Tool Works, Inc.

(petitioner). The hearing was conducted on October 2, 1995. The

Department is conducting this adminstrative review in accordance with

section 751 of the Tariff Act of 1930, as amended (the Act).

Scope of Review

Imports covered by this review are shipments of HFHTs from the PRC

comprising the following classes or kinds of merchandise: (1) hammers

and sledges with heads over 1.5 kg (3.33 pounds) (hammers/sledges); (2)

bars over 18 inches in length, track tools and wedges (bars and

wedges); (3) picks/mattocks; and (4) axes/adzes.

HFHTs include heads for drilling, hammers, sledges, axes, mauls,

picks, and mattocks, which may or may not be painted, which may or may

not be finished, or which may or may not be imported with handles;

assorted bar products and track tools including wrecking bars, digging

bars and tampers; and steel woodsplitting wedges. HFHTs are

manufactured through a hot forge operation in which steel is sheared to

required length, heated to forging temperature, and formed to final

shape on forging equipment using dies specific to the desired product

shape and size. Depending on the product, finishing operations may

include shot-blasting, grinding, polishing and painting, and the

insertion of handles for handled products. HFHTs are currently provided

[[Page 15029]]

for under the following Harmonized Tariff System (HTS) subheadings:

8205.20.60, 8205.59.30, 8201.30.00, and 8201.40.60. Specifically

excluded are hammers and sledges with heads 1.5 kg (3.33 pounds) in

weight and under, hoes and rakes, and bars 18 inches in length and

under. This review covers two exporters of HFHTs from the PRC, FMEC and

SMC. The review period is February 1, 1993 through January 31, 1994.

Analysis of Comments Received

We gave interested parties an opportunity to comment on the

preliminary results. We received case briefs and rebuttal briefs from

petitioner and from both respondents.

Comment 1: Petitioner contests the Department's use of a trading

company's reported purchase price for steel from a market-economy

country to value steel used by the factories to make HFHTs. Petitioner

asserts that this is inconsistent with past decisions, and argues that

Department practice forbids the use of prices for inputs purchased by

trading companies from a market economy to value factors of production

when the trading company did not manufacture the subject merchandise,

citing Final Determination of Sales at Less Than Fair Value: Coumarin

from the People's Republic of China, 59 FR 66895 (December 28, 1994)

(Coumarin) and Notice of Final Determination of Sales at Less Than Fair

Value: Certain Partial-Extension Steel Drawer Slides with Rollers from

the People's Republic of China, 60 FR 54472 (October 24, 1995) (Drawer

Slides) in support of its argument. Petitioner contends that these

cases establish that only the price the producer negotiated directly

with a market-economy supplier is acceptable to value the factors of

production. Petitioner asserts that there is no record evidence on how

much or in what currency the suppliers paid the trading companies.

Petitioner maintains that the Department's use of trading company

purchase prices is inconsistent with respondents' claim that the

producers are separate from the trading companies. Petitioner argues

that in a market economy the trading company would receive a profit for

its service in the form of a commission or mark-up on the steel price.

Petitioner asserts that if the Department uses these prices, then it

must increase them by the reasonable commission or markup that a

market-economy importer would charge for its services.

Finally, petitioner argues that the Department cannot assume that

the market-economy purchase price adequately reflects the value of the

factors of production because the respondents failed to demonstrate

which of the subject products, if any, contained market-economy steel.

Respondents argue that, because both Coumarin and Drawer Slides

determinations postdate this period of review, they are inapplicable to

this case. Respondents assert that the Department's policy at the time

of the review period was that enunciated in Oscillating Fans and

Ceiling Fans from the People's Republic of China, 56 FR 55271, 55275

(October 25, 1991) (Fans), in which the Department stated that

``[w]here we can determine that an NME [(non-market economy)]

producer's input prices are market-determined, accuracy, fairness, and

predictability are enhanced by using those prices.''

Respondents claim that until Coumarin, the Department did not

distinguish between who purchased an input and who produced merchandise

with that input. Respondents claim that this qualification is without

statutory or regulatory support and has not been judicially reviewed.

Further, citing Final Determination of Sales at Less Than Fair Value:

Chrome Plated Lug Nuts from the People's Republic of China, 56 FR 46153

(September 10, 1991)(Lug Nuts), respondents contend that the buyer/

producer distinction runs counter to the Department's view that in

NMEs, trading companies and factories are treated as one entity.

In response to petitioner's claim that respondents failed to

identify which products were produced with imported steel, respondents

claim that since the steel is fungible, no records were kept regarding

the source of the steel used to make specific tools. Respondents claim

that a record of steel purchases is maintained by the manufacturer and

that a ratio of imports to domestically sourced steel was provided.

Department's Position: We agree with the petitioner. It is the

Department's normal practice in NME cases to value the factors of

production using surrogate country input prices. The Department

normally allows for the valuation of inputs based on the actual

purchase price of the input only when the NME manufacturer purchases

the inputs from a market economy supplier and pays in a convertible

currency. See, e.g., Final Determination of Sales at Less Than Fair

Value: Saccharin from the People's Republic of China, 59 FR 58818

(November 15, 1994) (Saccharin), and Fans. In this case, the inputs

were purchased from market-economy countries by a PRC trading company,

which then transferred these inputs to the PRC manufacturer. Thus, the

manufacturer obtained the inputs from a PRC source. As noted by the

petitioner, there is no information on the record indicating how much

or in what currency the manufacturers paid the trading companies.

Further, there is no information on the record indicating which models

were produced with imported steel, and which models were not. As

established in Coumarin, Drawer Slides, and Notice of Final

Determination of Sales at Less Than Fair Value: Disposable Pocket

Lighters from the People's Republic of China (Lighters), 60 FR 22359

(May 5, 1995), it is the Department's practice to apply surrogate

values to market economy inputs obtained from PRC trading companies. We

disagree with respondents' claim that both Coumarin and Drawer Slides

do not apply to this review because they postdate the period of review.

Because those two determinations predate these final results, they are

applicable.

In addition to the above, we note that there is no information on

the record indicating whether the price reported by the trading company

for the market economy-sourced steel is representative of the grades,

prices, and quantities of steel purchased by the trading company during

the period of review. Therefore, for these final results, we have used

surrogate values to value all inputs used in the production of HFHTs.

Comment 2: Petitioner argues that the Department should use the

Indian steel price quotation submitted by petitioner during the prior

administrative review, or the 1993 Indian import value for steel bar,

as the surrogate value for steel. Petitioner claims that the Indian

price quotation is particularly appropriate as it represents a price

for the grades, sizes, and shapes of steel used to produce HFHTs.

Petitioner claims that there is precedent supporting the use of the

price quotation to value the steel factor of production. Petitioner

contends that in Notice of Final Determination of Sales at Less Than

Fair Value: Furfuryl Alcohol from the People's Republic of China, 60 FR

22544, 22548 (May 8, 1995) (Furfuryl Alcohol), and Coumarin, the

Department used privately obtained price quotations to value factors of

production and to determine whether specific information was aberrant.

Arguing that the price quotation at issue has the added advantage of

falling roughly in the middle of the range of steel prices available to

the Department, the petitioner suggests that the Department use the

Indian price quotation, adjusted for inflation, as its steel value for

1992 and 1993. If the Department does not use the price quotation, then

the petitioner argues

[[Page 15030]]

that the only viable option is to use the roughly equivalent 1993

Indian steel bar import value.

Petitioner argues that the record does not support the Department's

alternative of using the lower 1992 unit value for Indian steel bar

imports. Citing the Department's August 8, 1995 factor values

memorandum, the petitioner contends that the logic behind rejecting the

1993 value is circular, and that one could use the same logic to reject

the 1992 value. Petitioner adds that it believes the 1992 value is the

aberrational value.

Respondents argue that the prices proposed by the petitioner are

not consistent with other prices, particularly those submitted in the

Drawer Slides case. Respondents argue that petitioner's prices do not

reflect the prices paid for steel used for exports.

Department's Position: We disagree with the petitioner. The use of

import statistics as surrogate values is both reasonable and conforms

to established Department practice. See, e.g., Heavy Forged Hand Tools,

Finished or Unfinished, With or Without Handles, from the People's

Republic of China; Final Results of Antidumping Duty Administrative

Reviews, 60 FR 49251 (September 22, 1995). In addition, the price

quotation to which petitioner refers was submitted for the record of

the February 1, 1992 through January 31, 1993 administrative review and

is not on the record of this review.

We also disagree with petitioner's claim that the only viable

alternative to the price quotes is to use the 1993 Indian steel bar

import value. As explained in our August 8, 1995 factor values

memorandum, the total quantity of steel imported into India in 1992 and

1993 under HTS category 7214.50 (``Forged Bars and Rods Containing

0.25% or Greater But Less Than 6% of Carbon'') was small. Therefore,

the Department compared the 1992 and the 1993 unit values to other

contemporaneous steel prices to determine whether the Indian import

values were aberrational. The 1992 value was found to be comparable to

1992 U.S. and Indonesian import values. The 1993 value was not

comparable to the 1993 U.S. value, and because the 1993 Indonesian

value was not available, we compared the 1993 Indian value with the

1992 Indian value and found a substantial difference. Therefore, we

concluded that the 1993 Indian value was aberrational and used the 1992

Indian value, adjusted for inflation, to value steel for 1993.

Finally, there is no record support for petitioner's claim that the

1992 Indian steel import value is aberrational. We note that these same

1992 Indian steel import values were used in the prior review, and

petitioner supported their use.

Comment 3: The petitioner argues that the Department erred in using

the imported value of a finished pallet to value pallets built by the

factories under review. Petitioner argues that this represents a change

from that used in the less-than-fair-value (LTFV) investigation and the

previous administrative review. Petitioner further argues that it was

not given fair notice of the intended change, thereby depriving it of

its opportunity to participate in this proceeding because the deadline

for submission of new information had passed. Petitioner asserts this

denied it the opportunity to submit evidence that the existing

methodology did not produce aberrations. Petitioner claims that the

Department exacerbated this problem by providing no explanation of its

decision to deviate from past practice. Petitioner argues that this

effectively obstructs effective rebuttal of Departmental action.

Petitioner cites several Court of International Trade decisions,

claiming the Court held that the Department should provide due notice

of methodological changes as well as the opportunity to comment

thereon. Petitioner also contends that an administrative agency cannot

depart from established methodology without an explanation for doing

so, and it argues that the Department failed to provide such an

explanation. Petitioner cites Hussey Copper Ltd. v. United States, 834

F. Supp. 413, 418-419 (CIT 1993), and Krupp Stahl v. United States, 822

F. Supp. 789, 795 (CIT 1993) in support of this contention.

Finally, petitioner asserts that the methodological change violates

the statute. Citing Furfuryl Alcohol and Coumarin, petitioner contends

that the statute requires the Department to value each input at the

point at which it enters the producer's production process. Petitioner

contends that the Department may not shift its search for factor values

to the level of finished or intermediate material, but claims that this

is exactly what the Department did when it used the import value of

completed pallets to represent the wood, nail, and packing labor costs

borne by the producers. Petitioner asserts that the Department should

base its packing cost calculation on the inputs actually used by the

respondents.

Respondents argue that the preliminary notice was adequate

notification of the Department's methodological change. Respondents

also argue that petitioner was afforded an opportunity to comment and

that petitioner exercised its opportunity.

Respondents disagree with petitioner's assertion that the

Department's pallet valuation methodology is contrary to the statute.

Respondent argues that nothing in the legislative history, the statute

or the Department's regulations instructs the Department to undertake a

constructed value for packing materials. Citing 19 U.S.C. Sec.

1677b(c)(1), respondents argue that the Department is required to

determine a foreign market value based on factors of production for the

merchandise under review, but allows the Department to determine the

cost, rather than a constructed value, for containers, coverings, and

other expenses incidental to shipment to the United States.

Department's Response: We agree with petitioner that we should

value the pallets using factors and surrogate values for the wood,

nails and packing labor, separately, rather than for the completed

pallet. The information on the record at the time of the preliminary

results indicates that the factories make the pallets from wood and

nails rather than purchase the completed pallet. Therefore, we have

changed our valuation accordingly.

Comment 4: Respondents argue that the non-steel surrogate values

were not adjusted to reflect the period of review. Respondents note

that the Department used Indian import statistics for ten months--April

1993 through January 1994--but they argue that the Department should

have deflated the data to cover the first three months of the period of

review. Respondents assert that a significant portion of the production

of the subject merchandise occurred prior to April 1993, and that none

of the imports during the period of review were produced after December

1993.

Department's Position: We disagree with the respondents. The Indian

import data is contemporaneous with the period of review. See, e.g.,

Furfuryl Alcohol. In addition, the Indian import data on the record

includes all of the data reported by the Indian government for period

in question. As in the prior administrative review, we valued

production input based on the year in which production occurred. Thus,

1992 input production was valued using 1992 factor values, and 1993

input production was valued using 1993 factor values. Because the

Indian import data is both complete and contemporaneous, we have not

made the requested adjustment.

Comment 5: Respondents argue that the Department incorrectly valued

steel

[[Page 15031]]

by inflating import values by the 1992 calendar year wholesale price

index (WPI) rather than the index for April through December 1992.

Department's Position: We agree with respondents and we have

revised our inflator to reflect the period for which we have data

(April 1992 through December 1992) rather than the 1992 calendar year.

Comment 6: Respondents argue that the Department's reliance on

contemporaneous Indian import statistics is arbitrary because the data

was not available either when the merchandise was sold or when the

request for review was submitted. Respondents suggest that using 1992

Indian import values with a WPI adjustment would reduce such

arbitrariness.

Department's Position: We disagree with respondents' arguments that

use of import statistics from the April-December 1992 period is unfair

because they were not available when the merchandise was sold or the

reviews requested. It is the Department's standard practice to use

surrogate values from a time period which is contemporaneous to the

period of investigation or the period of review. See, e.g., Furfuryl

Alcohol, in which the surrogate value for furfuryl was selected because

it was more contemporaneous than other sources, and the Preliminary

Determination of Sales at Less Than Fair Value: Manganese Metal from

the People's Republic of China, 60 FR 31282, (June 14, 1995), in which

surrogate values within the period of investigation, or most

contemporaneous with the period of investigation, were selected.

Comment 7: SMC argues that the Department should not have resorted

to using best information available (BIA) for those instances where SMC

failed to provide factors-of-production data. SMC claims the use of BIA

in this case penalizes SMC, and SMC cites Badger-Powhatan v. U.S., CIT

1985, 608 F.Supp 653 (Badger-Powhatan), as support for its claim that

the purpose of the law is to be remedial, not punitive.

Department's Position: We disagree with the respondents. SMC failed

to submit for the record of this proceeding factors-of-production data

for one model, sales of which were first reported to the Department in

SMC's supplemental questionnaire response. Since U.S. sales data for

this model were submitted without the data necessary for the

calculation of foreign market value (FMV), we must rely upon BIA, in

accordance with section 776(1) of the Act, for these sales. As BIA, we

are assigning a rate of 31.76 percent, which is the rate from the LTFV

investigation for this class or kind of merchandise.

In addition, respondents' reference to Badger-Powhatan is misplaced

because, in that case, the Court was referring to the remedial nature

of the Act as a whole rather than to the administering agency's

authority to rely on BIA. See 608 F.Supp. 653, 656 (CIT 1985).

Comment 8: Respondents argue that the packing cost percentages used

by the Department (7.2 percent to 30 percent of production costs) are

unreasonably high. First, respondents argue that the HTS categories

used for Indian imports, by which the Department valued packing

factors, are basket categories which combine low-value packing

materials with high-value materials used for other purposes. Second,

respondents argue that because the subject merchandise has minimal

value added, the inflated values for packing materials represent a

higher proportion of the value of the subject merchandise than do

packing materials for most other products subject to antidumping duty

administrative reviews. Respondents provide two examples of cases where

products from NME countries required more extensive packing than HFHTs

but where packing costs represent a smaller percentage (one to two

percent) of production costs than do those the Department used for

HFHTs. See Certain Chrome-Plated Lug Nuts from the People's Republic of

China; Preliminary Results of Antidumping Duty Administrative Review,

60 FR 19719 (April 20, 1995) (Lug Nuts I), and a September 13, 1995

team concurrence memorandum regarding the final results of an

administrative review of the antidumping duty order on lock washers

from the PRC.

Petitioner asserts that each dumping case is fact-specific.

Therefore, the percentage cost of packing for lug nuts or lock washers

has no bearing on the packing costs for HFHTs.

Department's Position: We disagree with respondents. Rejecting

import values simply because they are high or low is potentially overly

subjective. See Final Determination of Sales at Less Than Fair Value:

Certain Helical Spring Lock Washers from the People's Republic of

China, 58 FR 48833 (September 20, 1993) (Lock Washers). Furthermore,

there is no record evidence that the HTS categories used by the

Department to value packing factors are inappropriate or that the

packing materials at issue are of disproportionately low value relative

to other products within those HTS categories.

It is the Department's standard practice to use surrogate values to

value packing costs. See, e.g., Notice of Preliminary Determination of

Sales at Less Than Fair Value and Postponement of Final Determination:

Certain Partial-Extension Steel Drawer Slides With Rollers from the

People's Republic of China, (60 FR 29571, June 5, 1995), and Notice of

Final Determination of Sales at Less Than Fair Value: Certain Cased

Pencils from the People's Republic of China, 59 FR 55625 (November 8,

1994) (Pencils), for which Indian import statistics were used to value

packing materials. Moreover, in Lock Washers, the Department valued

packing materials using Indian import statistics. For this review,

unlike in Lug Nuts I, the information needed to calculate packing costs

using surrogate values is on the record. Therefore, for these final

results, we have continued to value these packing inputs using

surrogate values. In addition, pursuant to our determination concerning

market economy-sourced inputs obtained from PRC trading companies (see

Comment 1), we have valued cartons using only Indian import values.

Comment 9: Respondents argue that the values used for pallets are

unreasonably high. Respondents do not dispute the selection of HTS

subcategory 4415.10, ``Cases, Boxes, Crates, Drums, and Similar Packing

of Wood,'' to value the wood used to make the pallets, but they assert

that the resulting values are not reasonable. Citing a substantial

increase in the average value for this category from 1991 to 1993,

respondents suggest that the increase was due to the product mix in

this category rather than an increase in price of the wood. Respondents

suggest that the Department examine the 1993 IM-145 U.S. import

statistics for the above-noted HTS category to determine the

reasonableness of the Department's pallet values.

Petitioner argues that respondents' claim regarding the cause of

the average value increase is sheer speculation and is not supported by

record information. Petitioner notes that data concerning U.S. import

values for pallets is not on the record.

Department's Position: We disagree with respondents. See our

response to Comment 8. Rejecting certain import values simply because

they are high or low is potentially overly subjective. In addition,

there is nothing on the record indicating that the pallets are of low

value compared to other items within the same HTS category. Finally, as

noted by the petitioner, data concerning U.S. import values for pallets

is not on the record.

[[Page 15032]]

Comment 10: Respondents argue that incidental packing items (those

not directly involved as direct inputs of the subject merchandise, such

as plastic bags, iron wire, anti rust paper, anti-damp paper, and the

big iron button) should be disregarded because the individual values of

these items are de minimis and because the collective value of these

items is also de minimis.

Petitioner argues that the Department is required to calculate

margins as accurately as possible, citing Rhone Poulenc, Inc. v. United

States, 899 F.2d 1185, 1191 (Fed. Cir. 1990) as support. Petitioner

asserts that the Department's regulations allow insignificant data to

be ignored in calculating adjustments to prices, but the regulations do

not allow the exclusion of such data from constructed value, cost of

production, or the factors of production.

Department's Position: We disagree with respondents that certain

factor inputs should be eliminated from the analysis because of their

small value. The items identified by respondents as being incidental

items are all materials used to pack the subject merchandise, and, as

such, it is appropriate that we value them, absent a compelling reason

to the contrary.

Comment 11: Respondents assert that the Indian labor rates used by

the Department are overly narrow because they are based on a limited

survey. Respondents also argue that the rates used do not reflect the

values for the types of workers in the Chinese factories producing the

subject merchandise. Respondents note that the Department relied upon

the November 1992 and November 1993 editions of Investing, Licensing &

Trading Conditions Abroad: India (IL&T India). These reports are

published by a non-governmental organization which provides estimates

of Indian labor rates for various types of positions in India based on

available data. The Department adjusted these wages by 45 percent to

account for bonuses and fringe benefits, based on an estimated range in

IL&T India of 40-50 percent. The respondents maintain that the scope of

the survey on which these estimates were based is very narrow.

Respondents also argue that the resulting values do not conform with

Indian law. Respondents assert that the Department should revise the

adjustment for fringe benefits and bonuses to reflect rates required by

Indian law. Respondents maintain that the bonuses for unskilled and

semi-skilled workers should be much smaller, and that no bonus should

be added for higher wage positions.

Petitioner argues that while many labor laws in India cover only

unionized workers, there is no evidence that the data used by the

Department is based only upon unionized employers, or that unionized

employees earned higher wages than non-unionized employees, as implied

by respondents. Petitioner further argues that if the data did only

cover unionized employees, its usefulness would be increased because

the tool producers are collectively-owned enterprises controlled 100

percent by workers and managers.

Petitioner disagrees with respondents' assertion that the fringe

benefits and bonuses reported in IL&T India are inappropriate because

they exceed Indian legal minimums. Petitioner notes that in the

previous review the Department used data indicating that fringe

benefits and bonuses could exceed statutory minimums.

Department's Position: We disagree with respondents. As noted by

petitioner, there could be benefit levels beyond what is statutorily

required. Historical data concerning fringe benefits and bonuses are

more indicative of fringe benefits and bonuses actually paid to workers

in India than are statutory minima. For this reason, we have continued

to rely on wage rates and fringe benefit and bonus rates used in the

preliminary results.

Comment 12: Respondents argue that the wage rates the Department

used in the preliminary determination were unreasonably high.

Respondents note that, in Lighters and Furfuryl Alcohol, the Department

used Indonesian wage rates of $0.27/hour for unskilled labor and $1.65/

hour for skilled labor, which are lower than those used by the

Department in the preliminary results of this review. Respondents

further note that the time period covered by these rates (December 1993

through May 1994) is contemporaneous with this review period.

Respondents further argue that both Indonesia and India are surrogate

countries for the PRC and that the wage rates in the two countries are

comparable. Respondents suggest that the Department review Foreign

Labor Trends, India, published by the U.S. Department of Labor.

Respondents argue that this report shows 1992 wage rates for factory

workers in Delhi to be much lower for skilled and unskilled workers

than rates used by the Department.

Petitioner argues that the cases cited by the respondents involve

different industries and a different surrogate country (Indonesia), and

do not offer a reliable benchmark for this review.

Department's Position: We disagree with respondents. The cases

cited by the respondents involve different industries, a different

surrogate country, and a different time period than is covered by this

review. It is the Department's practice to use, whenever possible, the

same surrogate for all elements of a factor valuation. Moreover, the

publication cited by respondents is not on the record of this

proceeding.

Comment 13: Respondents argue that the rail freight values used by

the Department are dated (the rates come from a 1989 cable from the

U.S. Embassy in Delhi) and should be replaced with more contemporaneous

data such as those provided in Doing Business in India--An Economic

Profile, published by the Indian Ministry of External Affairs.

Respondents aver that this data is superior to that used by the

Department because it is official Indian government data, it is more

current than the data used by the Department, and provides specific

rates on a per kilometer basis. Respondents add that rail rates from

non-contemporaneous periods could be adjusted using inflation factors.

Petitioner argues in favor of using the information gathered and

verified by the U.S. embassy in India. Petitioner favors this

information because it provides specific rates for particular ranges of

shipping distances, with long distances having a lower per kilometer

cost than short hauls. The petitioner argues against the use of an

average figure, such as that suggested by respondents, because it would

distort freight costs by overstating the per-kilometer cost for long

hauls and understating the cost for short hauls. Petitioner contends

that the figure suggested by respondents represents a guess, as no

source for the data was provided, and it includes no indication of how

the total distance shipped could affect the rate.

Department's Position: The rail freight rate suggested by the

respondents was submitted for the record of this review after the

preliminary results were issued, and therefore was returned as untimely

filed, pursuant to 19 C.F.R. 353.31(a)(3)(1994). Therefore, for these

final results, we have continued to use the cable data to value rail

freight.

Comment 14: Respondents argue that, for distances of 25 kilometers

or less, no freight charge, or a reduced freight charge, should be used

for 1993 truck freight. (This is freight for raw materials transported

from a railyard or port to the factory). Respondents contend that the

costs for these trucks are already reflected in the company's overhead

expenses, and the freight charge double-counts these costs. Respondents

argue that, if the Department does add a freight charge, it should not

arbitrarily assume that truck freight cost in India for 1 kilometer is

the same as for 25

[[Page 15033]]

kilometers. Rather, the Department should use the 1992 rate of 0.75 Rs/

MT for one kilometer plus an adjustment factor. This is the rate

reported to the Department in the June 1992 embassy cable for the Final

Determination of Sales at Less Than Fair Value: Sulfanilic Acid from

the People's Republic of China, 57 FR 29705 (July 6, 1992) (Sulfanilic

Acid), and used in the Final Determination of Sales at Less Than Fair

Value: Certain Helical Spring Lock Washers from the People's Republic

of China, 58 FR 48833 (September 20, 1993) (Lock Washers).

Petitioner argues that there is no evidence that the percentage

used by the Department included company-owned freight services.

Petitioner contends that the Department's decision to use the rate for

25-100 kilometers for distances under 25 kilometers is both reasonable

and logical. Petitioner notes that rail shippers in India pay the same

rate for all shipments of less than 500 kilometers, and concludes that

the grouping of all truck shipments under 100 kilometers is reasonable.

Petitioner also notes that on short hauls the fixed costs of loading

and unloading will form a higher proportion of the total cost than on

long hauls, so minor differences in the distance shipped should not

have a significant effect on the total cost.

Department's Position: We disagree with respondents that certain

truck costs should be considered as factory overhead. There is nothing

on the record to indicate that factory-owned trucks are used to pick up

raw materials from the rail yards. In addition, there is no record

evidence that the Department's grouping of all truck freight under 100

kilometers is inappropriate or unreasonable. As the petitioner

correctly points out, the fixed costs of loading and unloading short

hauls will form a higher proportion of the total cost than long hauls,

so minor differences in the distance shipped should not have a

significant effect on the total cost. For these reasons, we have

continued to value truck freight for these final results as we did for

the preliminary results.

Final Results of Review

As a result of our review, we have determined that the following

margins exist:

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

Margin

Manufacturer/exporter Time period (percent)

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

Fujian Machinery & Equipment

Import & Export

Corporation:

Axes/Adzes.............. 2/1/93-1/31/94............... 19.15

Bars/Wedges............. 2/1/93-1/31/94............... 41.21

Hammers/Sledges......... 2/1/93-1/31/94............... 25.74

Shandong Machinery Import &

Export Corporation:

Bars/Wedges............. 2/1/93-1/31/94............... 57.03

Hammers/Sledges......... 2/1/93-1/31/94............... 23.17

Picks/Mattocks.......... 2/1/93-1/31/94............... 80.32

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

The Department shall determine, and the Customs Service shall

assess, antidumping duties on all appropriate entries. Individual

differences between United States price and foreign market value may

vary from the percentages stated above. The Department will issue

appraisement instructions directly to the Customs Service.

Furthermore, the following deposit requirements will be effective

upon publication of this notice of final results of reviews for all

shipments of HFHTs from the PRC entered, or withdrawn from warehouse,

for consumption on or after the publication date, as provided for by

section 751(a)(1) of the Act: (1) the cash deposit rates for the

reviewed companies named above which have separate rates will be the

rates for those firms as stated above for the classes or kinds of

merchandise listed above; (2) for picks/mattocks from FMEC and axes/

adzes from SMC, which are not covered by this review, the cash deposit

rates will be the rates established in the most recent review of those

classes or kinds of merchandise in which those companies recieved

separate rates--that is, the February 1, 1992 through January 31, 1993

review; (3) for all other PRC exporters, the cash deposit rates will be

the PRC rates established in the LTFV investigation; and (4) the cash

deposit rates for non-PRC exporters of the subject merchandise from the

PRC will be the rate applicable to the PRC supplier of that exporter.

The PRC rates established in the LTFV investigations are 45.42 percent

for hammers/sledges, 31.76 percent for bars/wedges, 50.81 percent for

picks/mattocks, and 15.02 percent for axes/adzes. These deposit

requirements shall remain in effect until publication of the final

results of the next administrative review.

This notice serves as a final reminder to importers of their

responsibility under section 353.26 of the Department's regulations to

file a certificate regarding the reimbursement of antidumping duties

prior to liquidation of the relevant entries during this review period.

Failure to comply with this requirement could result in the Secretary's

presumption that reimbursement of antidumping duties occurred and the

subsequent assessment of double antidumping duties.

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 section 353.34(d) of the Department's

regulations. 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 administrative review and notice is in accordance with section

751(a)(1) of the Act (19 U.S.C. 1675(a)(1)) and section 353.22 of the

Department's regulations.

Dated: March 27, 1996.

Susan G. Esserman,

Assistant Secretary for Import Administration.

[FR Doc. 96-8215 Filed 4-3-96; 8:45 am]

BILLING CODE 3510-DS-P