Stainless Steel Bar From India: Final Results of New Shipper Antidumping Duty Administrative Review

DEPARTMENT OF COMMERCE

A-533-810

Stainless Steel Bar From India: Final Results of New Shipper

Antidumping Duty Administrative Review

AGENCY: Import Administration, International Trade Administration,

Department of Commerce.

EFFECTIVE DATE: January 28, 1997.

FOR FURTHER INFORMATION CONTACT:

Vincent Kane or Todd Hansen, Import Administration, International Trade

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

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

2815 or 482-1276, respectively.

SUPPLEMENTARY INFORMATION:

Applicable Statute and Regulations

Unless otherwise indicated, all citations to the statute are

references to the provisions effective January 1, 1995, the effective

date of the amendments made to the Tariff Act of 1930 (``the Act'') by

the Uruguay Round Agreements Act. In addition, unless otherwise

indicated, all citations to the Department's regulations are to the

current regulations, as amended by the interim regulations published in

the Federal Register on May 11, 1995 (60 FR 25130).

Summary

On October 22, 1996, the Department of Commerce (the Department)

published the preliminary results of the new shipper antidumping duty

administrative review of the antidumping duty order on stainless steel

bar from India (61 FR 54774). The review covers two manufacturers/

exporters of the subject merchandise for the period February 1, 1995

through July 31, 1995. These manufacturers/exporters are Akai Asian

Ltd. (``Akai'') and Viraj Impoexpo Ltd. (``Viraj''). The Department

gave interested parties an opportunity to comment on our preliminary

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

no basis to modify our preliminary results. therefore, we have adopted

the preliminary results of this review to be the final results, as

well.

Scope of the Review

For purposes of this administrative review, the term ``stainless

steel bar'' means articles of stainless steel in straight lengths that

have been either hot-rolled, forged, turned, cold-drawn, cold-rolled or

otherwise cold-finished, or ground, having a uniform solid cross

section along their whole length in the shape of circles, segments of

circles, ovals, rectangles (including squares), triangles, hexagons,

octagons, or other convex polygons. Stainless steel bar includes cold-

finished stainless steel bars that are turned or ground in straight

lengths, whether produced from hot-rolled bar or from straightened and

cut rod or wire, and reinforcing bars that have indentations, ribs,

grooves, or other deformations produced during the rolling process.

Except as specified above, the term does not include stainless

steel semi-finished products, cut length flat-rolled products (i.e.,

cut length rolled products which if less than 4.75 mm in thickness have

a width measuring at least 10 times the thickness, or if 4.75 mm or

more in thickness have a width which exceeds 150 mm and measures at

least twice the thickness), wire (i.e., cold-formed products in coils,

of any uniform solid cross section along their whole length, which do

not conform to the definition of flat-rolled products), and angles,

shapes and sections.

The stainless steel bar subject to this administrative review is

currently classifiable under subheadings 7222.11.0005, 7222.11.0050,

7222.19.0005, 7222.19.0050, 7222.20.0005, 7222.20,0045, 7222.20.0075,

and 7222.30.0000 of the Harmonized Tariff Schedule of the United States

(``HTSUS''). Although the HTSUS subheadings are provided for

convenience and customs purposes, our written description of the scope

of this order is dispositive.

Interested Party Comments

In accordance with 19 CFR 353.38, we gave interested parties an

opportunity to comment. We received written comments from petitioners

and both responding companies.

Comment 1

Petitioners claim that Viraj had only one small shipment during the

POR which, in petitioners' view, was intended to allow Viraj's U.S.

customer to test or evaluate the merchandise. According to petitioners,

the balance of the order was not to be shipped until the U.S. customer

indicated its approval of the initial shipment. Petitioners claim that,

in view of the circumstances surrounding this first shipment, it is

clear that it was not a normal commercial shipment. Therefore, because

Viraj made no other shipments during the POR, it does not qualify as a

new shipper.

Viraj claims that, because it was a new producer, U.S. buyers were

not familiar with its product. The first small shipment was made at the

customer's request to enable it to market the goods in the United

States. Viraj also states that during verification, no evidence was

found to indicate that the balance of the order was in any way

contingent on the U.S. customer's acceptance of the initial shipment.

DOC Position

While the purchase order did specify an initial shipment of limited

quantity, neither the purchase order nor the confirmation contained any

language indicating that the balance of the order was contingent on the

acceptability of the first shipment. An examination of correspondence

files during verification also revealed nothing that would indicate

such a contingency. Therefore, we view this shipment as a normal

shipment occurring during the POR pursuant to a sale made during the

POR.

Comment 2

Petitioners claim that Viraj did not have a sale during the POR

because a substantial quantity of the goods remained unshipped long

after the delivery date specified in the confirmation order.

Petitioners maintain that Viraj's failure to ship a substantial

quantity by the date specified in the confirmation order resulted in a

change in the delviery date and, consequently, in the date of sale.

They claim that the delivery date was one of the substantive terms of

sale as demonstrated by Viraj revising the delivery date at the time it

issued the confirmation order to the customer. Petitioners conclude

that, because a substantive term of sale was changed, the date of sale

must be changed accordingly. Consequently, Viraj no longer has a sale

within the POR and the Department has no basis for conducting a review.

Viraj claims that both the purchase of the goods and initial

shipment of goods occurred during the POR. It contends that this

purchase and initial shipment alone are sufficient for the Department

to conduct a new shipper review. Further, a subsequent shipment

pursuant to the purchase order was made at the prices specified in the

purchase order and confirmation. Thus, the date of sale for that later

shipment is also the date of the purchase order and confirmation.

Viraj also notes that it is the Department's long established

practice to consider price and quantity as the essential terms of sale.

Delivery terms, however, have not been typically viewed as an essential

term of sale. Thus, changes in the delivery date should not affect the

date of sale.

DOC Position

Viraj accepted and confirmed an order from its U.S. customer during

the POR.

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The order and confirmation clearly and definitively established the

price and quantity of the sale, and we have determined in this case

that the date of sale was the date of the order and confirmation. The

fact that a change occurred in the delivery date specified in the order

confirmation does not mean that the date of sale must also change. We

have typically considered delivery terms to be nonessential terms of

sale and have not regarded changes in delivery terms as affecting the

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

Value: Oil Country Tubular Goods from Argentina (60 FR 33539, 33542,

June 28, 1995). In the present review, nothing in the purchase order or

confirmation indicated that special significance should be attached to

the delivery terms of the sale. In fact, the purchase order allowed

considerable flexibility with respect to the delivery date. Thus, the

essential terms of this contract are clearly price and quantity and

these remained unchanged from the original order and confirmation.

Therefore, we consider the date of sale to be the original order and

confirmation date.

We note that a portion of the goods subject to Viraj's sale

remained unshipped as of August 30, 1996, the last day of verification.

Consequently, this review was based on the goods actually shipped. For

these goods, we found that shipments were made pursuant to the

essential terms of the sales contract under review. In addition, in its

responses to the antidumping questionnaire and three supplemental

questionnaires, Viraj provided the Department with complete information

on the sale and the shipments made to date pursuant to the sale.

Further, the Department verified the responses during on site

verification at Viraj's premises in Maharashtra, India. Therefore,

although a part of the sales quantity has yet to be shipped, we

nonetheless view the sale as a bona fide sale, which properly serves as

the basis for a new shipper review: the shipments made to date pursuant

to the sale support this finding. If, for some reason, the terms and

conditions for the unshipped portion of this sale were to change, we

would address these changes in a future administrative review, assuming

that a review was requested.

Comment 3

Petitioners claim that the third country sale reported by Viraj did

not occur during the POR because delivery of the goods pursuant to this

sale did not take place until long after the date specified in the

order confirmation. Petitioners claim that delivery date is a

substantive term of sale and a change in the delivery date changes the

date of sale. In this case, the change in delivery date results in a

date of sale which falls outside the POR.

DOC Position

We disagree with petitioners. As explained in the DOC Position in

response to Comment 2, we have typically considered delivery terms to

be nonessential terms of sale and have not regarded changes in delivery

terms as affecting the date of sale.

Comment 4

Section 773(a)(1)(C) of the Act provides that particular market

situations in the home market or in third country markets may prevent

the Department from using these markets as the basis for normal value.

Petitioners cite page 150 of the Statement of Administrative Action

(SAA), which describes a particular market situation that might prevent

the Department from using a market for comparison purposes. The

particular market situation referred to in the SAA concerns a home

market where a single sale constitutes five percent of the sales to the

United States. In the stated example, petitioners claim the Department

is not able to determine whether the sale is in the ordinary course of

trade or in normal commercial quantities. Petitioners claim that

Viraj's sale for export to Canada falls into this category.

DOC Position

Neither the information supplied in Viraj's responses nor the

information obtained during verification gives the Department reason to

suspect that the Canadian sale was made outside the ordinary course of

trade. Specifically, with regard to the quantity of the sale, we

concluded that it did not appear to be either so extraordinarily large

or small as to be outside normal commercial quantities, based on our

examination of sales quantities sold for export to third countries.

Verification exhibits revealed that the quantity of these third country

sales was generally in line with the quantity of the Canadian sale.

Comment 5

Petitioners claim that although there is no equity relationship,

the Department should determine that Akai's U.S. customer is an

affiliated company based on the fact that Akai did not receive payment

from this customer for a considerable period of time after shipment of

the goods. Also, petitioners claim that certain information from

verification leads to the conclusion that Akai is affiliated with this

U.S. customer.

DOC Position

Late payment is not an uncommon business practice and, in and of

itself, does not provide a sufficient basis for concluding that Akai is

affiliated with its U.S. customer. In addition, the information

petitioners refer to from verification is not grounds for supporting

the conclusion that these two companies are affiliated. During

verification, we checked the records establishing Akai's affiliations

with other companies. We found no indication that an affiliation exists

between Akai and its U.S. customer. Also, in reviewing the books and

records of the company generally, we found no basis to conclude that

the companies were affiliated.

Comment 6

Petitioners claim that the Department should determine that an

affiliation exists between Akai and both its raw materials supplier and

its processor. Their argument is based on the fact that Akai did not

pay these companies for a considerable period of time after the goods

and services were rendered.

DOC Position

We disagree with petitioners. As explained in the DOC Position to

Comment 5, late payment of debts does not establish that the debtor and

creditor are affiliated.

Comment 7

Petitioners argue that the cost of production data submitted by

Viraj are irrelevant to this proceeding. Petitioners contend that Viraj

has admitted that it did not produce commercial quantities of the

subject merchandise during the POR. Thus, cost data submitted by Viraj

relates to a period outside the POR. Petitioners point to instructions

in the Department's questionnaire, which clearly require that cost data

must be calculated over the POR.

Viraj counters that the Department's standard practice is to use

costs outside the POR when little or no production has occurred during

the POR. Viraj states that since production did not begin until the

last month of the POR, it is reasonable, and consistent with past

practice, to use cost data from after the POR.

DOC Position

We agree with respondent. The Department normally uses weighted

average production data based on costs incurred during the POR.

However, in

[[Page 4031]]

this case, most of the relevant production occurred outside the POR.

Therefore, for purposes of gathering cost information, we have modified

the cost reporting period to include the period when the bulk of the

goods were actually produced. In view of the limited production by

Viraj during the POR, we found it appropriate to include cost data from

the two month period following the POR, as well. (See, e.g.,

Antifriction Bearings (Other Thank Tapered Roller Bearings) and Parts

Thereof from the Federal Republic of Germany: Final Results of

Antidumping Duty Administrative Review (56 FR 31692, July 11, 1991.)

Comment 8

Petitioners argue that costs of production are not reliable because

the quantity sold does not correlate with Viraj's production during the

cost reporting period.

DOC Position

At verification we saw that Viraj's production during the cost

reporting period exceeded shipments of the subject merchandise. Part of

the excess was accounted for by merchandise that had been packed and

was awaiting shipment. The remaining part was accounted for by finished

merchandise waiting to be packed. The amount of unshipped goods on hand

did not appear to be unusual, especially in view of the fact that Viraj

was a new producer bringing its productive capacity online for the

first time. Therefore, we find no reason to question costs reported by

Viraj, merely because a balance of production remained on hand at the

end of the POR.

Comment 9

Petitioners claim that the Department has calculated a constructed

value based on 1995 costs for products which had not yet been shipped

as of September 1996 and which, presumably, had not yet been produced.

Petitioners claim that the 1995 cost data is inappropriate for goods

not yet shipped or produced as of September 1996.

DOC Position

We agree with petitioners. For the preliminary results, we included

the unshipped portion of Viraj's sale in our margin calculations, using

the constructed value data and movement charges that applied to goods

already shipped. For the final results, we have limited margin

calculations to those goods which have already been shipped and for

which relevant cost and sales data were reported in Viraj's responses

to our antidumping questionnaires.

Comment 10

Petitioners argue that the Department erred in its calculation of

constructed value for Akai because the Department did not account for

the value of scrap retained by a subcontractor hired by Akai.

Petitioners assert that if Akai had not allowed the subcontractor to

retain the scrap, the subcontractor would have demanded a higher

payment, and Akai's costs would have increased. Petitioners urge the

Department to include a cost for this scrap in Akai's constructed value

calculations.

Department's Position

By allowing the subcontractor to retain any scrap generated in the

subcontractor's conversion work, Akai has foregone a reduction in its

cost of materials in manufacturing the subject merchandise. By

including the gross weight of inputs into the production process in our

calculation of constructed value, we have accounted for all material

costs incurred by Akai. In other words, our calculations already

include the value of the scrap retained by the subcontractor since Akai

does not receive a reduction in its material costs associated with this

scrap.

Comment 11

Petitioners claim that the Department should include as part of

constructed value excise taxes paid in purchasing raw material, unless

those excise taxes have actually been rebated upon exportation of the

finished goods. Petitioners maintain that a portion of the merchandise

sold for export to the United States remained unshipped as of

verification. Therefore, the excise tax applicable to this portion of

the merchandise should be included as part of the constructed value

because it has not yet been rebated.

DOC Position

For these final results, we are doing antidumping calculations only

for merchandise which has actually been exported. (See Comment 9.)

During verification it was readily apparent that the excise tax on raw

materials was routinely rebated upon export of the finished product. An

examination of excise claim ledgers, excise duty credit registers, and

bank statements made it abundantly clear that the excise tax was

consistently rebated upon export. Therefore, in calculating constructed

value for merchandise actually exported, we did not include the excise

taxes paid in purchasing raw materials.

Final Results of Review

As a result of this review, we determine that the following

weighted-average dumping margins exist for the period February 1, 1995

through July 31, 1995:

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

Manufacturer/exporter Margin

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

Akai Asian.................................................... 4.83

Viraj......................................................... 0.00

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

The results of this review shall be the basis for the assessment of

antidumping duties on entries of merchandise covered by the review and

for future deposits of estimated duties for the manufacturers/exporters

subject to this review. The posting of a bond or security in lieu of a

cash deposit, pursuant to section 751(a)(2)(B)(iii) of the Act and

section 353.22(h)(4) of the Department's regulations, will no longer be

permitted. The Department will issue appraisement instructions directly

to the Customs Service.

Furthermore, the following deposit requirements will be effective

for all shipments of the subject merchandise entered, or withdrawn from

warehouse, for consumption on or after the publication date of these

final results of this administrative review, as provided by section

751(a)(2)(C) of the Act: (1) the cash deposit rate for the reviewed

companies will be that established in the final results of this new

shipper administrative review; (2) for companies not covered in this

review, but covered in previous review or the original less than fair

value investigation, the cash deposit rate will continue to be the

company-specific rate published for the most recent period; (3) if the

exporter is not a firm covered in this review, a prior review, or the

original investigation, but the manufacturer is, the cash deposit rate

will be the most recent rate established for the manufacturer of the

merchandise; and (4) if neither the exporter nor the manufacture is a

firm covered in this or any previous review or the original

investigation, the cash deposit rate will be the ``all others'' rate of

12.45 percent established in the final determination of sales at less

than fair value. (59 FR 66915, December 28, 1994).

These deposit requirements will remain in effect until publication

of the final results of the next administrative review.

This notice also serves as a final reminder to importers of their

responsibility under 19 CFR 353.26 to file a certificate regarding the

reimbursement of antidumping duties prior to liquidation of the

relevant entries during this review period. Failure to comply with this

requirement could result in the Secretary's presumption that

reimbursement of

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antidumping duties occurred and the subsequent assessment of double

antidumping duties.

This notice also serves as a reminder to parties subject to

administrative protective orders (APOs) of their responsibility

concerning the disposition of proprietary information disclosed under

APO in accordance with 19 CFR 353.34(d)(1). Timely written notification

of the return/destruction of APO materials or conversion to judicial

protective order is hereby requested. Failure to comply with the

regulations and the terms of an APO is a sanctionable violation.

This administrative review and notice are in accordance with

section 751(a)(2)(B) of the Tariff Act (19 U.S.C. 1675(a)(2)(B)) and 19

CFR 353.22(h).

Dated: January 16, 1997.

Robert S. LaRussa,

Acting Assistant Secretary for Import Administration.

[FR Doc. 97-2053 Filed 1-27-97; 8:45 am]

BILLING CODE 3510-DS-M