Certain Welded Carbon Steel Standard Pipes and Tubes From India; Preliminary Results of Antidumping Duty Administrative Review

DEPARTMENT OF COMMERCE

International Trade Administration

[A-533-502]

Certain Welded Carbon Steel Standard Pipes and Tubes From India;

Preliminary Results of Antidumping Duty Administrative Review

AGENCY: Import Administration, International Trade Administration,

Department of Commerce.

ACTION: Notice of preliminary results of antidumping duty

administrative review.

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SUMMARY: In response to requests from interested parties, the

Department of Commerce is conducting an administrative review of the

antidumping duty order on certain welded carbon steel standard pipes

and tubes from India. The review covers two manufacturers/exporters of

the subject merchandise. The period of review is May 1, 1996, through

April 30, 1997.

We have preliminarily determined that sales have been made below

normal value. If these preliminary results are adopted in the final

results of this administrative review, we will instruct the Customs

Service to assess antidumping duties based on the difference between

the constructed export price and normal value.

Interested parties are invited to comment on these preliminary

results. Parties that submit case briefs in this proceeding are

requested to submit with the argument (1) a statement of the issue and

(2) a brief summary of the argument.

EFFECTIVE DATE: February 9, 1998.

FOR FURTHER INFORMATION CONTACT: Davina Hashmi at (202) 482-5760 or

Robin Gray at (202) 482-4023, Import Administration, International

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

Constitution Avenue, N.W., Washington, D.C. 20230.

SUPPLEMENTARY INFORMATION:

Applicable Statute and Regulations

Unless otherwise indicated, all citations to the Tariff Act of

1930, as amended (the Tariff Act), are references to the provisions

effective January 1, 1995, the effective date of the amendments made to

the Tariff Act by the Uruguay Round Agreements Act (URAA). In addition,

unless otherwise indicated, all citations to the Department's

regulations are to the regulations, codified at 19 CFR Part 353 (April

1997).

Background

On May 2, 1997, the Department of Commerce (the Department)

published in the Federal Register an opportunity to request an

administrative review of this antidumping duty order for the period May

1, 1996, through April 30, 1997. See 62 FR 24082. On May 30, 1997, we

received a timely request for review from a respondent, Rajinder Pipes

Ltd. On May 30, 1997, the Department also received from the

petitioners, the Wheatland Tube Company, Allied Tube and Conduit, and

the Laclede Steel Company, a timely request for review of both Rajinder

and Lloyd's Metals & Engineers Ltd. On June 19, 1997, we initiated this

administrative review.

Scope of Review

The products covered by this review include circular welded non-

alloy steel pipes and tubes, of circular cross-section, with an outside

diameter of 0.372 inch or more but not more than 406.4 millimeters (16

inches) in outside diameter, regardless of wall thickness, surface

finish (black, galvanized, or painted), or end finish (plain end,

bevelled end, threaded, or threaded and coupled). These pipes and tubes

are

[[Page 6532]]

generally known as standard pipe, though they may also be called

structural or mechanical tubing in certain applications. Standard pipes

and tubes are intended for the low-pressure conveyance of water, steam,

natural gas, air and other liquids and gases in plumbing and heating

systems, air-conditioner units, automatic sprinkler systems, and other

related uses. Standard pipe may also be used for light load-bearing and

mechanical applications, such as for fence tubing, and for protection

of electrical wiring, such as conduit shells.

The scope is not limited to standard pipe and fence tubing or those

types of mechanical and structural pipe that are used in standard pipe

applications. All carbon-steel pipes and tubes within the physical

description outlined above are included in the scope of this order,

except for line pipe, oil-country tubular goods, boiler tubing, cold-

drawn or cold-rolled mechanical tubing, pipe and tube hollows for

redraws, finished scaffolding, and finished rigid conduit.

Imports of the products covered by this review are currently

classifiable under the following Harmonized Tariff Schedule (HTS)

subheadings: 7306.30.10.00, 7306.30.50.25, 7306.30.50.32,

7306.30.50.40, 7306.30.50.55, 7306.30.50.85, and 7306.30.50.90.

Although the HTS subheadings are provided for convenience and customs

purposes, the written description of the scope of this proceeding is

dispositive.

Verification

As provided in section 782(i) of the Tariff Act, we verified

information provided by Rajinder using standard verification

procedures, the examination of relevant sales and financial records,

and selection of original documentation containing relevant

information. We verified Rajinder's responses from December 16 to

December 19, 1997, at its factory in Kanpur, India. Our verification

results are outlined in the verification report (January 20, 1998),

public versions of which are available in the Central Records Unit of

the Department, room B-099.

No Shipments

Lloyd's reported no shipments or sales subject to this review and

the Department has confirmed these facts with the Customs Service.

Because Lloyd's did not make any sales or shipments to the United

States during the instant review period, we have not calculated an

antidumping duty margin for the preliminary results of review with

respect to this company.

Constructed Export Price

We based our margin calculation on constructed export price (CEP)

as defined in section 772(b) of the Tariff Act because the subject

merchandise was first sold in the United States to a person not

affiliated with Rajinder after importation by Rajinder International

Inc. (RII), a seller affiliated with Rajinder.

We calculated CEP based on ex-warehouse prices from RII to the

unaffiliated purchasers in the United States (the starting price). We

made deductions for any movement expenses in accordance with section

772(c)(2)(A) of the Tariff Act. We made additional adjustments to the

starting price by deducting selling expenses associated with economic

activities occurring in the United States, including commissions,

direct selling expenses, expenses assumed on behalf of the buyer, and

U.S. indirect selling expenses. In accordance with section 772(d)(3) of

the Tariff Act, we deducted from the price an amount for profit to

arrive at the CEP.

Normal Value

In order to determine whether there was a sufficient volume of

sales in the home market to serve as a viable basis for calculating

normal value (NV), we compared Rajinder's volume of home-market sales

of the foreign like product to the volume of its U.S. sales of the

subject merchandise, in accordance with section 773(a)(1)(C) of the

Tariff Act. Since Rajinder's aggregate volume of home-market sales of

the foreign like product was greater than five percent of its aggregate

volume of its U.S. sales of the subject merchandise, we determined that

the home market was viable. Therefore, in accordance with section

773(a)(1)(B)(i), we based NV on the prices at which the foreign like

products were first sold for consumption in the exporting country.

Home-market prices were based on the packed, ex-factory or

delivered prices of the foreign like product to unaffiliated purchasers

in the home market. Where applicable, we made adjustments for movement

expenses in accordance with section 773(a)(6)(B) of the Tariff Act. We

also made adjustments for differences in costs attributable to

differences in physical characteristics of the merchandise pursuant to

section 773(a)(6)(C)(ii) of the Tariff Act and for differences in

circumstances of sale (COS) in accordance with section

773(a)(6)(C)(iii) of the Tariff Act. We made COS adjustments by

deducting direct selling expenses. We also made adjustments, where

applicable, for home market indirect selling expenses to offset U.S.

commissions.

We based NV on the price at which the foreign like product was

first sold for consumption in the exporting country, in the usual

commercial quantities, in the ordinary course of trade and at the same

level of trade as the CEP, to the extent practicable in accordance with

section 773(a)(1)(B)(i) of the Tariff Act.

No other adjustments were claimed and/or allowed.

Level of Trade

As set forth in section 773(a)(1)(B)(i) of the Act, to the extent

practicable, we calculate NV based on sales in the comparison market at

the same level of trade as the U.S. sale. The NV level of trade is that

of the starting-price sales in the comparison market.

To determine whether NV sales are at a different level of trade

than that of the U.S. sale, we examine stages in the marketing process

and selling functions along the chain of distribution between the

producer and the unaffiliated customer. If the comparison-market sales

are at a different level of trade, and the difference affects price

comparability, as manifested in a pattern of consistent price

differences between the sales on which NV is based and comparison-

market sales at the level of trade of the export transaction, we make a

level-of-trade adjustment under section 773(a)(7)(A) of the Act. See

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

Cut-to-Length Carbon Steel Plate from South Africa, 62 FR 61731

(November 19, 1997).

In implementing these principles in this review, we obtained

information from Rajinder about the marketing stages involved in the

reported U.S. and home market sales, including a description of the

selling activities performed by Rajinder for each channel of

distribution. We expect that, if claimed levels of trade are the same,

the functions and activities of the seller should be similar.

Conversely, if a party claims that levels of trade are different for

different groups of sales, the functions and activities of the seller

should be dissimilar.

Rajinder reported two channels of distribution in the home market:

(1) sales to government agencies, OEMs, and end-users (Channel One);

and (2) sales to local distributors and trading companies (Channel

Two). Based on the selling functions that occur between the two home-

market channels of distribution and other factors, such as the point in

the chain of distribution

[[Page 6533]]

where the relevant selling expenses occurred, we determined that the

two home-market channels of distribution constitute two different

levels of trade. See Memorandum from Analyst to File: Preliminary

Results of 1996-97 Administrative Review of Certain Welded Carbon Steel

Pipes and Tubes from India, (February 2, 1998).

Rajinder reported only CEP sales in the U.S. market. The CEP sales

were based on sales from the exporter to Rajinder's U.S. affiliate, a

local distributor. Because the CEP sales were made through one channel

of distribution, we determined that sales through this channel

constitute a single level of trade.

In addition, we found that, based on the selling functions between

and customer categories of the CEP channel and Channel Two in the home

market, sales to Channel Two were made at the same level as the sales

to the United States. See Memorandum from Analyst to File: Preliminary

Results of 1996-97 Administrative Review of Certain Welded Carbon Steel

Pipes and Tubes from India (February 2, 1998). We therefore matched the

CEP sales to home-market sales made to Channel Two, to the extent

possible. Where we found no match at the Channel Two level of trade, we

matched at the Channel One level of trade and made a level-of-trade

adjustment because the difference in levels of trade affected price

comparability.

We determined whether there was a pattern of consistent price

differences between the different levels of trade in the home market by

comparing, for each model sold at both levels, the average net price of

sales made in the ordinary course of trade at the two levels of trade.

Because the average prices are higher at one of the levels of trade for

a preponderance of the models and sales quantities, we consider this to

demonstrate a pattern of consistent price differences. Therefore, when

comparing sales at different levels of trade, we adjusted NV downward

by the average percentage difference. See Final Results of Antidumping

Administrative Review: Antifriction Bearings (Other Than Tapered Roller

Bearings) and Parts Thereof from France, Germany, Italy, Japan,

Singapore, and the United Kingdom, 62 FR 2081, 2105 (January 15, 1997).

Currency Conversion

For purposes of the preliminary results, we made currency

conversions based on the official exchange rates in effect on the dates

of the U.S. sales as certified by the Federal Reserve Bank of New York.

Section 773A(a) of the Tariff Act directs the Department to use a daily

exchange rate in order to convert foreign currencies into U.S. dollars,

unless the daily rate involves a ``fluctuation.'' In accordance with

our practice, we have determined as a general matter that a fluctuation

exists when the daily exchange rate differs from a benchmark by 2.25

percent. The benchmark is defined as the rolling average of rates for

the past 40 business days. When we determine a fluctuation exists, we

substitute the benchmark for the daily rate. See Policy Bulletin 96-1:

Currency Conversions, 61 FR 9434 (March 8, 1996).

Preliminary Results of the Review

As a result of our comparisons of CEP with NV, we preliminarily

determine that the following weighted-average dumping margins exist for

the period May 1, 1996 through April 30, 1997:

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

Manufacturer/exporter Margin

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Rajinder Pipes Ltd........................................... 34.91

Lloyd's Metals & Engineers \1\............................... 0.00

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

\1\ This company claimed no shipments or sales subject to this review.

Rate is from the last segment of the proceeding in which the firm had

shipments/sales.

Parties to this proceeding may request disclosure within 5 days of

the date of publication of this notice. Any interested party may

request a hearing within 10 days of the date of publication of this

notice. A hearing, if requested, will be held 44 days from the date of

publication of this notice at the main Commerce Department building.

Issues raised in hearings will be limited to those raised in the

respective case briefs and rebuttal briefs. Case briefs from interested

parties are due within 30 days of publication of this notice. Rebuttal

briefs, limited to the issues raised in the respective case briefs, may

be submitted not later than 37 days of publication of this notice.

Parties who submit case briefs or rebuttal briefs in this proceeding

are requested to submit with each argument (1) a statement of the issue

and (2) a brief summary of the argument. The Department will

subsequently publish the final results of this administrative review,

including the results of its analysis of issues raised in any such

written briefs or hearing. The Department will issue final results of

this review within 120 days of publication of these preliminary

results.

The Department shall determine, and the Customs Service shall

assess, antidumping duties on all appropriate entries. The Department

will issue appraisement instructions directly to the Customs Service.

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

of antidumping duties on entries of merchandise covered by the

determination and for future deposits of estimated duties. For duty-

assessment purposes, we calculated, on an importer-specific basis, an

assessment rate by aggregating the dumping margins calculated for all

U.S. sales and dividing the amount by the total entered value of

subject merchandise sold during the period of review.

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 the

final results of this administrative review, as provided by section

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

reviewed company is the rate established in the final results of this

review; (2) for previously reviewed or investigated companies not

listed above, 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

less-than-fair-value (LTFV) investigation, but the manufacturer is, the

cash deposit rate will be the rate established for the most recent

period for the manufacturer of the merchandise; and (4) the cash

deposit rate for all other manufacturers or exporters will be 7.08

percent, the ``All Others'' rate made effective by the final

determination of sales at LTFV, as explained in the 1995/96 new shipper

review of this order. See Certain Welded Carbon Standard Steel Pipes

and Tubes From India; Final Results of New Shippers Antidumping Duty

Administrative Review, 62 FR 47632, 47644 (September 10, 1997).

These deposit requirements, when imposed, shall remain in effect

until publication of the final results of the next administrative

review.

This notice also serves as a preliminary 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 administrative review and notice are in accordance with

section 751(a)(1) of the Tariff Act and 19 CFR 353.22(h).

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Dated: February 2, 1998.

Robert S. LaRussa,

Assistant Secretary for Import Administration.

[FR Doc. 98-3213 Filed 2-6-98; 8:45 am]

BILLING CODE 3510-DS-P