Stainless Steel Bar from India; Preliminary Results of New Shipper Review

DEPARTMENT OF COMMERCE

International Trade Administration

[A-533-810]

Stainless Steel Bar from India; Preliminary Results of New

Shipper Review

AGENCY: Import Administration, International Trade Administration,

Department of Commerce.

ACTION: Notice of preliminary results of new shipper review of

stainless steel bar from India.

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SUMMARY: In response to requests from Jyoti Steel Industries, Parekh

Bright Bars Pvt. Ltd., and Shah Alloys Ltd., the Department of Commerce

is conducting a new shipper review of the antidumping duty order on

stainless steel bar from India. This review covers these companies'

sales of stainless steel bar to the United States during the period

February 1, 1998 through July 31, 1998.

We have preliminarily determined that, during the period of review,

Parekh Bright Bars Pvt. Ltd. has made sales of subject merchandise

below normal value and that Jyoti Steel Industries and Shah Alloys Ltd.

have not made sales of subject merchandise below normal value. If these

preliminary results are adopted in our final results, we will instruct

the Customs Service not to assess antidumping duties.

Interested parties are invited to comment on these preliminary

results.

EFFECTIVE DATE: August 25, 1999.

FOR FURTHER INFORMATION CONTACT: Stephanie Hoffman, James Breeden, or

Melani Miller, Office 1, AD/CVD Enforcement, Import Administration,

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

Street and Constitution Avenue, N.W., Washington D.C. 20230; telephone

(202) 482-4198, (202) 482-1174, or (202) 482-0116, respectively.

SUPPLEMENTARY INFORMATION:

Applicable Statute

Unless otherwise indicated, all citations to the Tariff Act of

1930, as amended (``the Act''), 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, all

references to the Department of Commerce's (``the Department's'')

regulations are to 19 CFR Part 351 (April 1998).

Background

On August 18 and August 31, 1998, the Department received requests

from Jyoti Steel Industries (``Jyoti''), Parekh Bright Bars Pvt. Ltd.

(``Parekh''), and Shah Alloys Ltd. (``Shah'') to conduct a new shipper

review of the antidumping duty order on stainless steel bar from India.

Our notice initiating the new shipper review of these companies was

published in the Federal Register, on October 30, 1998 (63 FR 58367).

The period covered by this review is February 1, 1998, through July 31,

1998.

Scope of Review

Imports covered by this review are shipments of stainless steel bar

(``SSB''). SSB 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. SSB includes cold-

finished SSBs that are turned or ground in straight lengths, whether

produced from hot-rolled bar or from straightened

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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 having 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 SSB subject to this order 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.

Use of Facts Otherwise Available

Parekh failed to respond to the Department's supplemental

questionnaire and request for cost information (i.e., Section D of the

original questionnaire). Section 776(a)(2)(A) of the Act provides for

the use of facts available when an interested party withholds

information that has been requested by the Department. As described in

more detail below, Parekh has failed to provide information explicitly

requested by the Department; therefore, we must resort to the facts

otherwise available.

In using the facts otherwise available, however, pursuant to

section 782(e) of the Act, the Department must determine whether

information Parekh already submitted for the record of this review may

be used in calculating a dumping margin. Section 782(e) of the Act

provides that the Department shall not decline to consider information

that is submitted by an interested party and that is necessary to the

determination but which does not meet all the applicable requirements

established by the Department if--

(1) The information is submitted by the deadline established for

its submission,

(2) The information can be verified,

(3) The information is not so incomplete that it cannot serve as a

reliable basis for reaching the applicable determination,

(4) The interested party has demonstrated that it acted to the best

of its ability in providing the information and meeting the

requirements established by the Department with respect to the

information, and

(5) The information can be used without undue difficulties.

Parekh did respond to the Department's original questionnaire and a

supplemental questionnaire. However, Parekh failed to respond to a

second supplemental questionnaire requesting clarification of deficient

information in Parekh's previous responses. Moreover, as explained in

the ``Normal Value'' section of this notice below, the Department has

preliminarily determined to base normal value on constructed value

(``CV'') for all three respondents. Parekh failed to provide requested

cost information necessary for the calculation of CV. Therefore, we

find the information already on the record so incomplete that it cannot

serve as a reliable basis for calculating a dumping margin.

Consequently, we are not using any of the information submitted by

Parekh for our preliminary results and are relying instead on facts

available.

In selecting from among the facts otherwise available, section

776(b) of the Act provides that the Department may use an inference

that is adverse to the interests of a party if it determines that party

has failed to cooperate to the best of its ability. On May 18, 1999,

the Department issued a second supplemental questionnaire to Parekh.

The Department did not receive a response to this questionnaire, nor

did it receive a request from Parekh for an extension of time to

respond. The Department made several efforts to contact Parekh

regarding the status of its questionnaire response, but was unable to

reach any of Parekh's personnel. Consistent with section 782(d) of the

Act, the Department sent a letter to Parekh on July 16, 1999, advising

the company that its lack of cooperation may result in the use of facts

otherwise available. Parekh did not respond to this letter.

Additionally, in the Department's May 18, 1999, letter to Parekh, the

Department informed Parekh that if it chose not to offer evidence

demonstrating why a particular market situation does not exist in the

home market, it should submit a response to section D of the original

questionnaire (i.e., cost information). Parekh did not submit any

information concerning the particular market situation, nor did it

submit cost information.

The Department finds that by not providing necessary information

specifically requested by the Department and discontinuing its

participation in this review, Parekh has failed to cooperate to the

best of its ability. Therefore, in selecting facts available, the

Department determines that an adverse inference is warranted. As

adverse facts available, we have preliminarily assigned a margin of

21.02 percent to Parekh's sales of the subject merchandise.

This margin, calculated for sales by Mukand Limited during the

investigation, represents the highest weighted-average margin

determined for any firm during any segment of this proceeding.

Information from prior segments of the proceeding constitutes secondary

information and section 776(c) of the Act provides that the Department

shall, to the extent practicable, corroborate that secondary

information from independent sources reasonably at its disposal. The

Statement of Administrative Action (``SAA'') provides that

``corroborate'' means simply that the Department will satisfy itself

that the secondary information to be used has probative value (see,

H.R. Doc. 316, Vol. 1, 103d Cong., 2d Sess. 870 (1994)).

To corroborate secondary information, the Department will, to the

extent practicable, examine the reliability and relevance of the

information to be used. However, unlike other types of information,

such as input costs or selling expenses, there are no independent

sources for calculated dumping margins. Thus, in an administrative

review, if the Department chooses as adverse facts available a

calculated dumping margin from a prior segment of the proceeding, it is

not necessary to question the reliability of the margin for that time

period. With respect to the relevance aspect of corroboration, however,

the Department will consider information reasonably at its disposal as

to whether there are circumstances that would render a margin

inappropriate. Where circumstances indicate that the selected margin is

not appropriate as adverse facts available, the Department will

disregard the margin and determine an appropriate margin (see, e.g.,

Fresh Cut Flowers from Mexico; Final Results of Antidumping Duty

Administrative Review, 61 FR 6812, 6814 (Feb. 22, 1996) (where the

Department disregarded the highest margin as adverse facts available

because the margin was based on another company's uncharacteristic

business expense resulting in an unusually high margin)).

As discussed above, it is not necessary to question the reliability

of a calculated margin from a prior segment of the proceeding. Further,

there are no

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circumstances indicating that this margin is inappropriate as facts

available. Therefore, we preliminarily find that the 21.02 percent rate

is corroborated.

United States Price

In calculating the price to the United States, we used export price

(``EP''), in accordance with section 772(a) of the Act, because the

subject merchandise was sold directly to the first unaffiliated

purchaser in the United States prior to importation into the United

States and use of constructed export price was not otherwise indicated.

We calculated EP based on the CIF price to the United States. In

accordance with section 772(c)(2) of the Act, we made deductions, as

appropriate, for foreign inland freight, international freight, marine

insurance, and brokerage and handling.

Normal Value

Viability: In order to determine whether Shah, Jyoti, and Parekh

made a sufficient volume of sales in the home market to serve as a

viable basis for calculating normal value (``NV''), we compared the

respondents'' volume of home market sales of the foreign like product

to the volume of U.S. sales of the subject merchandise in accordance

with section 773(a) of the Act. We found that each respondent's

aggregate volume of home market sales of the foreign like product was

greater than five percent of its respective aggregate volume of U.S.

sales of the subject merchandise. Even though this result would

normally indicate that NV should be based on home market sales, as

explained below, information on the record indicates that a

``particular market situation'' exists in the home market that renders

the otherwise viable home market an inappropriate basis for NV.

In a letter dated February 3, 1999, the petitioners stated that the

dates of the home market sale reported by Parekh and Shah were outside

the period of review. Lacking home market sales in the period of

review, the petitioners argued that both Parekh's and Shah's home

markets were not viable.

In considering this argument, the Department notes that section

773(a)(1)(A) of the Act states that NV shall be based upon the price at

which the foreign like product is first sold in the usual commercial

quantities and in the ordinary course of trade ``at a time reasonably

corresponding to the time of the sale used to determine the export

price or constructed export price'' (emphasis added). Neither the

Department's regulations nor the SAA offer any further clarification of

the time period the Department should examine in determining market

viability.

However, the Department has developed a methodology for determining

contemporaneity for purposes of comparing NV with export price or

constructed export price. The Department's regulations at 19 CFR

351.414(e)(2) provide that if there are no sales of the foreign like

product in the month of the U.S. sale under consideration, the

Secretary will select as the contemporaneous month the most recent of

the three months prior to the month of the U.S. sale, and if there are

no sales of the foreign like product during any of these months, the

earlier of the two months following the month of the U.S. sale in which

there was a sale of the foreign like product. This methodology commonly

is referred to as the 90/60-day contemporaneity window.

Although both Shah and Parekh's home market sales were made outside

the period of review, we have preliminarily determined that, since both

respondents' home market sales were within the 90/60-day

contemporaneity window they would be used for comparison purposes.

Because the time of these home market sales ``reasonably corresponds''

to the time of the sales used to establish EP, we have examined whether

these sales constitute a viable home market for the purpose of

determining NV.

Particular Market Situation: On March 8, 1999, the petitioners

alleged that Shah, Jyoti, and Parekh made home market sales identical

to their U.S. sales, after making their U.S. sales, in order to

artificially establish zero dumping margins. Consequently, the

petitioners alleged that the home market constitutes a fictitious

market within meaning of section 773(a)(2), and that the Department

should not use the home market sales as the basis for normal value. In

the alternative, the petitioners claimed that a particular market

situation within the meaning of section 773(a)(1)(C)(iii) exists in the

home market because all three respondents made a single sale in the

home market that constituted five percent or more of sales to the U.S.

market. The petitioners asserted that in light of this particular

market situation, the Department was precluded from using respondents'

home market sales for calculating normal value. See May 18, 1999,

Memorandum to Laurie Parkhill, ``Home Market Viability, Fictitious

Market, and Particular Market Situation Allegations'' (``May 18, 1999

Memo'') and June 24, 1999, Memorandum to Richard Moreland, ``Particular

Market Situation'' (``June 24, 1999 Memo'') for a detailed discussion

of these issues.

In considering the petitioners' fictitious market allegation, we

have preliminarily determined that evidence on the record does not

support a finding that Shah, Jyoti, or Parekh established a fictitious

market. It is the Department's practice in proceedings involving

fictitious market allegations to require that the petitioners provide

some evidence on the record that establishes the occurrence of

different movements in prices at which different forms of the foreign

like product are sold before pursuing an allegation. See, e.g.,

Tubeless Steel Disc Wheels from Brazil; Final Results of Antidumping

Duty Administrative Review, 56 FR 14085 (April 5, 1991) (``* * * before

pursing a [fictitious market] allegation, the Department must have

sufficient evidence that there have been different movements in the

prices at which different forms of the subject merchandise have been

sold in the home market.''). The petitioners have not provided such

evidence and, therefore, we have not pursued an inquiry into the

petitioners' fictitious market allegations. See May 18, 1999 Memo.

With respect to the petitioners' allegation of a particular market

situation, we preliminarily determine that a particular market

situation does exist for Shah, Jyoti, and Parekh. According to section

773(a)(1) of the Act, the Department may decline to use home market

sales for determining normal value where ``the particular market

situation in the exporting country does not permit a proper comparison

with the export price or constructed export price.'' The SAA further

discusses particular market situations, stating that a particular

market situation may exist where a single sale in the home market

constitutes five percent of sales to the United States. SAA at 152.

In the instant review, we find that each respondent had a single

sale in the home market which constituted more than five percent of the

aggregate volume of its U.S. sales. In addition, we note that the

subject merchandise is a commodity-type product that can easily be

distinguished from a large capital good, such as a printing press,

where one home market sale made during the period of review might be a

normal situation. We further note that although we gave the respondents

an opportunity to offer information demonstrating why a particular

market situation does not exist in the home market, Jyoti and Shah (the

two respondents who chose to

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submit information) 1 failed to submit information

demonstrating why these single, isolated sales in the home market were

indicative of actual home market prices of the foreign like product.

Accordingly, we preliminarily determine that the respondents' home

markets should not be used for purposes of calculating normal value.

Moreover, because none of the respondents have made sales to third

countries during the POR, we determine that CV is the appropriate basis

for normal value. See May 18, 1999 Memo and June 24, 1999 Memo for a

more detailed analysis.

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\1\ Parekh did not submit any information concerning the

particular market situation issue.

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Constructed Value: In accordance with section 773(e)(1) of the Act,

we calculated CV for Shah and Jyoti based on the sum of the respective

respondent's cost of materials (net of import duty credits earned on

its U.S. sale), labor, overhead, G&A, profit, and U.S. packing costs.

(As discussed in the ``Facts Available'' section above, we could not

calculate CV for Parekh because it failed to respond to our request for

necessary cost information.) With respect to G&A, we used the amounts

reported by Shah and Jyoti in their 1997-1998 audited financial

statements, and, in accordance with our normal practice, adjusted these

amounts to capture those expenses associated with the production of the

subject merchandise.

With respect to amounts for profits, section 773(e)(2)(A) of the

Act states that CV should include an amount ``incurred and realized by

the specific exporter or producer being examined in the investigation

or review * * * for profits, in connection with the production and sale

of a foreign like product, in the ordinary course of trade, for

consumption in the foreign country * * *'' In this case, the actual

amounts incurred and realized by Shah and Jyoti for profits, in

connection with their sales of the foreign like product, are based on

Shah and Jyoti's respective single home market sales. However, as

discussed above, we have determined that these home market sales are

not an appropriate basis for normal value because a particular market

situation exists. Accordingly, these sales are not an appropriate basis

for calculating CV profit. Therefore, as no other actual profit amounts

realized by Shah and Jyoti in connection with sales of the foreign like

product are available, we have used an alternative calculation method.

The decision to use an alternative method to determine profit and

the selection of the appropriate method depends on the facts of each

case. Therefore, the decision to use alternative CV profit data must be

made on a case-by-case basis. Based on the facts of the present case,

in accordance with section 773(e)(2)(B)(i) of the Act, we calculated

the respondents' respective profit based on the respondents' sale of

merchandise that is in the same general category of products as the

subject merchandise. That is, we calculated profit based on the

respondents' respective total sales of all merchandise produced, as

reflected in the companies' 1997-1998 audited financial statements.

Preliminary Results of Review

As a result of our comparison of EP and NV, we preliminarily

determine the following weighted-average dumping margins:

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Manufacturer/Exporter Period Margin (percent)

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Jyoti............................... 2/1/98-7/31/98 0.00

Parekh.............................. 2/1/98-7/31/98 21.02

Shah................................ 2/1/98-7/31/98 0.00

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Parties to the proceeding may request disclosure within five days

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

request a hearing within 30 days of publication. Any hearing, if

requested, will be held 2 days after the deadline for filing rebuttal

briefs unless the Secretary alters the date. Interested parties may

submit case briefs within 30 days of the date of publication of this

notice. Rebuttal briefs, which must be limited to issues raised in the

case briefs, may be filed no later than 5 days after the deadline for

filing case briefs. The Department will issue the final results of this

new shipper review, which will include the results of its analysis of

issues raised in any such comments, within 90 days of issuing these

preliminary results.

Upon completion of this new shipper review, the Department shall

determine, and the Customs Service shall assess, antidumping duties on

all appropriate entries. 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 to the total entered

value of the examined sales. In order to estimate the entered value, we

subtracted international movement expenses (e.g., international

freight) from the gross sales value. This rate will be assessed

uniformly on all entries made during the POR. The Department will issue

appraisement instructions directly to the Customs Service.

The following deposit requirement will be effective upon

publication of the final results of this new shipper review for all

shipments of stainless steel bar from India 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 rate

for the reviewed companies will be the rates established in the final

results of this review; (2) if the exporter is not a firm covered in

this review, but was covered in a previous review or the original less-

than-fair-value (``LTFV'') 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

previous review, or the original 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 and/or exporters of

this merchandise, shall be 12.45 percent, the ``all others'' rate

established in the LTFV investigation (59 FR 66915, December 28, 1994).

These 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 351.402(f) 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

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occurred and the subsequent assessment of double antidumping duties.

This new shipper review and notice are in accordance with sections

751(a)(2)(B) and 777(i)(1) of the Act.

Dated: August 18, 1999.

Bernard Carreau,

Acting Assistant Secretary for Import Administration.

[FR Doc. 99-22083 Filed 8-24-99; 8:45 am]

BILLING CODE 3510-DS-P