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

DEPARTMENT OF COMMERCE

International Trade Administration

[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.

ACTION: Notice of final results of new shipper antidumping duty

administrative review.

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SUMMARY: On January 23, 1998, the Department of Commerce published the

preliminary results of the new shipper administrative review of the

antidumping duty order on stainless steel bar from India. We gave

interested parties an opportunity to comment on the preliminary

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

certain changes for the final results.

This review covers two producers/exporters of stainless steel bar

to the United States during the period February 1, 1996, through

January 31, 1997. The review indicates no dumping margins during the

review period.

EFFECTIVE DATE: April 21, 1998.

FOR FURTHER INFORMATION CONTACT: Zak Smith or James Breeden, Import

Administration, AD/CVD Enforcement Group I, Office 1, U.S. Department

of Commerce, 14th Street and Constitution Avenue, NW, Washington, DC

20230; telephone (202) 482-1279 or 482-1174, respectively.

Applicable Statute and Regulations

The Department of Commerce (``the Department'') is conducting this

administrative review in accordance with section 751 of the Tariff Act

of 1930, as amended (``the Act''). 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 Act

by the Uruguay Round Agreements Act. In addition, unless otherwise

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

codified at 19 CFR Part 353 (April 1997).

SUPPLEMENTARY INFORMATION:

Background

On January 23, 1998, the Department of Commerce published the

preliminary results of the new shipper administrative review of the

antidumping duty order on stainless steel bar from India (63 FR 3536)

(``preliminary results''). The manufacturers/exporters in this review

are Panchmahal Steel Limited (``Panchmahal'') and Ferro Alloys

Corporation Limited (``Facor''). We received comments from Panchmahal

and rebuttal comments from the petitioners 1 (see,

Interested Party Comments, below).

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\1\ Al Tech Specialty Steel Corp., Carpenter Technology Corp.,

Crucible Specialty Metals Division, Crucible Materials Corp.,

Electralloy Corp., Republic Engineered Steels, Slater Steels Corp.,

Talley Metals Technology, Inc. and the United Steelworkers of

America (AFL-CIO/CLC).

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Scope of the Review

Imports covered by this review are shipments of stainless steel

bar. 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

[[Page 19713]]

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 these orders is currently

classifiable under subheadings 7222.10.0005, 7222.10.0050,

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 invited interested parties to

comment on our preliminary results. We received written comments from

Panchmahal and rebuttal comments from the petitioners.

Comment 1: Model Matches

Panchmahal disagrees with the Department's preliminary decision to

compare its U.S. sales of 304L grade bar to its home market sales of

316 grade bar. Rather, Panchmahal argues that the Department should

compare the U.S. sales of 304L grade bar to its home market sales of

304 grade bar.

The petitioners rebut that hot-rolled 304 grade bar and cold-

finished 304L grade bar are not comparable because of differences in

these grades' production costs. Furthermore, the petitioners assert

that the differences in variable costs between 304 grade bar and 304L

grade bar reported by Panchmahal are too low and thus must be flawed,

given the different production processes of the two grades.

Accordingly, the Department should use constructed value (``CV'') as

the basis for normal value.

Department's Position

We agree with Panchmahal. Based on its chemical composition, we

have determined that grade 304L bar is more appropriately matched to

grade 304 bar than grade 316 bar. Specifically, grade 304L bar and 304

bar are more comparable based on their chrome and nickel content.

Moreover, grade 316 bar contains molybdenum, while grades 304L and 304

bar do not.

In regard to petitioners' argument to use CV as a basis of normal

value, it is the Department's normal practice to use contemporaneous

home market sales of the foreign like product, before resorting to CV,

as a basis for normal value unless those sales fail the difference in

merchandise test. Because the home market bar sales are sales of

foreign like product that do not fail the difference in merchandise

test and that match to U.S. sales, use of constructed value would be

inappropriate. Based on our general knowledge of the production

processes involved, the reported differences in variable costs are not

unreasonable.

Comment 2: Duty Drawback

Panchmahal asserts that the Department, in Certain Welded Carbon

Standard Steel Pipes and Tubes from India (62 FR 47632 (September 10,

1997)) (``Pipes and Tubes''), has found that the Indian Passbook Scheme

is a proper duty drawback program. Thus, in this case, the Department

should allow an upward adjustment to U.S. price in the amount of the

duty drawback received on exports of the subject merchandise. The

respondent also states that it fully answered the Department's

supplemental questions regarding the duty drawback benefit under this

scheme; therefore, the Department's rejection of the adjustment in the

preliminary results is groundless. In particular, Panchmahal argues

that the Indian Passbook Scheme meets the criteria used by the

Department when analyzing duty drawback programs because the duty

drawback is based on duties paid with respect to imported inputs

actually used in the production of the subject merchandise.

The petitioners maintain that the Panchmahal's use of the Indian

Passbook Scheme fails the Department's two-part test for drawback

claims because the respondent did not provide documentation

establishing: (1) A direct link between the duties imposed and those

rebated, and (2) that the company imported a sufficient amount of raw

materials to account for the drawback received. The petitioners assert

that the evidence on the record supports the Department's decision to

reject Panchmahal's claimed duty drawback adjustment. Specifically,

petitioners argue that Panchmahal's claim for a duty drawback

adjustment is based merely on the existence of the Indian Passbook

Scheme. They state that the existence of a drawback program does not

guarantee acceptance of the adjustment by the Department; rather, the

company's specific utilization of the scheme must be examined.

According to the petitioners, the lack of a direct link between duties

paid on imported inputs and duties rebated on exported finished

products under the program, and the failure by Panchmahal to provide

any details on its imports should compel the Department to reject the

company's request for an upward adjustment to U.S. price.

Department's Position

When evaluating a duty drawback program, the Department considers

whether the import duty and duty drawback are directly linked to, and

dependent upon, one another and whether the company claiming the

adjustment can show that there were sufficient imports of the imported

raw materials to account for the drawback received on the exported

product (see, Pipes and Tubes, at 47634).

Panchmahal has not provided adequate documentation establishing a

sufficient link between import duties paid and duty drawbacks generally

received under the program. Moreover, there is no indication that

Panchmahal imported inputs in sufficient quantities to account for

rebates received under the program. Accordingly, as in the preliminary

results, no adjustment to the U.S. price for duty drawback has been

made.

Comment 3: Duty Drawback Adjustment to Material Costs

Panchmahal argues that its material costs should be reduced by the

amount of reported duty drawback. Panchmahal refers to Stainless Steel

Bar from India (62 FR 60482 (November 10, 1997)), in support of its

position.

Petitioners contend that since the Passbook Scheme does not require

direct linkage between import duties paid and rebates received on

exported products, the rebates cannot be linked to the material costs

incurred. Petitioners further argue that since Panchmahal has failed to

report the actual amount of import duties paid, the Department is

unable to ensure that the claimed adjustment to material input costs

does not exceed the amount of import duties paid.

Petitioners also assert that Panchmahal mischaracterized the

Department's determination in Stainless Steel Bar from India (62 FR

60482 (November 10, 1997)) (``Bar from India''), which states that the

Department offset the per unit direct materials cost to account for the

rebates received only on those sales where constructed value was the

basis for normal value. The petitioners maintain that since normal

value was not based on constructed value for Panchmahal, no adjustment

should be made to the reported materials costs.

Department's Position

Respondent's comment is moot because we did not use constructed

value as the basis for normal value.

[[Page 19714]]

Final Results of Review

As a result of this review, we find that the following margins

exist for the period February 1, 1996, through January 31, 1997:

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Margin

Manufacturer/exporter Period (percent)

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Panchmahal................................. 2/1/96-1/31/97 0

Facor...................................... 2/1/96-1/31/97 0

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Parties to the proceeding may request disclosure within five days

of the date of publication of this notice. 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. We have calculated an importer-specific duty assessment rate

based on the ratio of the total amount of antidumping duties calculated

for the examined sales made during the period of review (``POR'') to

the total value of subject merchandise entered during the POR. 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 new shipper administrative review, as provided by

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

reviewed companies will be the rates established in the final results

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

review, but covered in previous reviews 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 manufacturer 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 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 new shipper review and notice are in accordance with sections

751(a)(1) and 777(i)(1) of the Act (19 U.S.C. 1675(a)(1)), 19 CFR

353.22.

Dated: April 13, 1998.

Joseph A. Spetrini,

Acting Assistant Secretary for Import Administration.

[FR Doc. 98-10415 Filed 4-20-98; 8:45 am]

BILLING CODE 3510-DS-P