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

DEPARTMENT OF COMMERCE

International Trade Administration

[A-533-810]

Stainless Steel Bar from India; Final Results of Antidumping Duty

Administrative Review and New Shipper Review

AGENCY: Import Administration, International Trade Administration,

Department of Commerce.

ACTION: Notice of final results of 1997-1998 antidumping duty

administrative review and new shipper review of stainless steel bar

from India.

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SUMMARY: On November 12, 1998, the Department of Commerce published the

preliminary results of antidumping duty administrative review and new

shipper 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.

These reviews cover five producers/exporters of stainless steel bar

to the United States during the period February 1, 1997, through

January 31, 1998.

EFFECTIVE DATE: March 22, 1999.

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

Hoffman, Import Administration, AD/CVD Enforcement Group I, Office 1,

U.S. Department of Commerce, 14th Street and Constitution Avenue, NW,

Washington, D.C. 20230; telephone (202) 482-0189, 482-1174, or 482-

4198, respectively.

Applicable Statute and Regulations

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 (``URAA''). In addition,

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

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

SUPPLEMENTARY INFORMATION:

Background

On November 12, 1998, the Department published the preliminary

results of administrative review and new shipper review of the

antidumping duty order on stainless steel bar from India (63 FR 63288)

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

administrative review are Bhansali Bright Bars Pvt. Ltd. (``Bhansali'')

and Venus Wire Industries Limited (``Venus''). The manufacturers/

exporters in this new shipper review are Sindia Steels Limited

(``Sindia''), Chandan Steel Limited (``Chandan''), and Madhya Pradesh

Iron & Steel Company (``Madhya''). We received a case brief from Madhya

on December 18, 1998. We received case and rebuttal briefs from the

petitioners 1 and the other respondents in February.

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

Crucible Specialty Metals Division, Crucible Materials Corp.,

Electroalloy 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 these reviews 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 and cut rod or wire,

and reinforcing bars that have indentations, ribs, grooves, or

[[Page 13772]]

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.

Comparisons

We calculated export price and normal value based on the same

methodology used in the preliminary results, with the following

exceptions:

With respect to Bhansali, we conducted a cost investigation as

discussed in the Cost of Production Analysis section, below. Also, we

adjusted Bhansali's raw material inputs and scrap offset based on

differences in the production processes used by Bhansali in the

production of SSB (see Comment 5, below).

Cost of Production Analysis

Based on a cost allegation presented by the petitioners, the

Department found reasonable grounds to believe or suspect that sales by

Bhansali in the home market were made at prices below their respective

costs of production (``COP''). As a result, on October 30, 1998, the

Department initiated an investigation to determine whether Bhansali

made home market sales during the period of review (``POR'') at prices

below its COP, within the meaning of section 773(b) of the Act.

We conducted the COP analysis described below.

A. Calculation of COP

In accordance with section 773(b)(3) of the Act, we calculated the

weighted-average COP, by model, based on the sum of the cost of

materials, fabrication, selling, general and administrative expenses,

and packing costs.

B. Results of the COP Test

Pursuant to section 773(b)(2)(C) of the Act, where less than 20

percent of a respondent's sales of a given product are made at prices

below the COP, we do not disregard any below-cost sales of that product

because the below-cost sales were not made in ``substantial

quantities.'' However, where 20 percent or more of a respondent's sales

of a given product are made at prices below the COP, we disregard the

below-cost sales because such sales are being made within an extended

period of time in ``substantial quantities'' (see sections 773(b)(2)(B)

and (C) of the Act) and because, based on comparisons of price to

weighted-average COPs for the POR, we determine that the below-cost

sales of the product are at prices which would not permit recovery of

all costs within a reasonable period of time (see section 773(b)(2)(D)

of the Act).

We found that Bhansali made home market sales at below COP prices

within an extended period of time in substantial quantities. Further,

we found that these sales prices did not permit the recovery of costs

within a reasonable period of time. Therefore, we excluded these sales

from our analysis in accordance with section 773(b)(1) of the Act.

Interested Party Comments

In accordance with 19 CFR 351.309, we invited interested parties to

comment on our preliminary results. We received written comments from

the respondents and the petitioners and rebuttal comments from

Bhansali, Venus, Sindia, and Madhya.

Comment 1: Treatment of Alleged Below-Cost Sales as Outside the

Ordinary Course of Trade

The petitioners state that the Department should exclude from its

analysis certain third country sales made by Sindia and Venus that are

allegedly below cost and, thus, outside the ordinary course of trade.

They assert that by including such below-cost sales in the preliminary

results, the Department erroneously made a negative determination of

dumping. Furthermore, the petitioners argue that a cost allegation is

not necessary because both Sindia and Venus submitted cost data that

indicates that certain third country market sales were made below the

cost of production. To correct this alleged error, the petitioners

argue that the Department should exclude those below-cost sales from

its analysis for the final determination.

Specifically, the petitioners argue that section 771(15) of the Act

states that below-cost sales are outside the ordinary course of trade

and, thus, should be excluded from the Department's analysis. The

petitioners cite to Mechanical Transfer Presses from Japan; Final

Results of Antidumping Duty Administrative Review and Revocation of

Antidumping Duty Administrative Order in Part, 63 FR 37331 (July 10,

1998) (``Mechanical Transfer Presses'') and Mitsubishi Heavy

Industries, Ltd. v. U.S., Slip Op. 98-82 (June 23, 1998) (``Mitsubishi

v. U.S.'') to support their argument. According to the petitioners, in

Mechanical Transfer Presses, the Department did not include sales that

were found to be below the cost of production when calculating

constructed value (``CV'') profit, even though no formal cost

investigation was initiated. In Mitsubishi v. U.S., the Court of

International Trade (``CIT'') upheld the Department's decision to

exclude below-cost sales in the calculation of selling, general, and

administrative expenses (``SG&A'') and profit, even though no below-

cost investigation was conducted. Furthermore, the petitioners argue

that, even if sales are not excluded on the basis of being made below

cost, they are still outside the ordinary course of trade because they

were made at aberrationally low prices.

The respondents, Venus and Sindia, argue that the cases the

petitioners rely upon are distinguishable from the present case. The

respondents note that, in the investigation underlying Mitsubishi v.

U.S., the petitioner provided a timely allegation of sales made below

cost, whereas, in the present case, the petitioners failed to make a

timely allegation (see Notice of Final Determination of Sales at Less

Than Fair Value: Large Newspaper Printing Presses and Components

Thereof, Whether Assembled or Unassembled, From Japan, 61 FR 38139

(July 23, 1996) (``LNPP'').

The respondents also note that the two cases cited by the

petitioners involved complex products and that the Department based

normal value on CV. Thus, despite the lack of a formal cost

investigation, the Department conducted an informal cost investigation.

According to the respondents, the products included in this antidumping

duty order are not complex in nature and there has not been a

suggestion that CV should be used for normal value when price-to-price

comparisons exist. Therefore, it is not necessary for the Department to

self-initiate a sales below-cost investigation. Furthermore, the

respondents note that in Mechanical Transfer Presses the Department had

found below-cost sales in a prior review and, thus, had reason

[[Page 13773]]

to believe that there were below-cost sales in the current review.

Again, the respondents note that they have never been found to have

made sales below cost and, thus, any comparison to Mechanical Transfer

Presses is inappropriate.

Lastly, the respondents argue that, in the present case, the

Department can only conduct a meaningful cost analysis if the

respondents submit a response to Section D (Cost of Production and

Constructed Value) of the original questionnaire. Barring such a

response, the respondents argue that the Department cannot determine

whether a respondent would be able to recover costs over an extended

period of time on the sales in question.

Department's Position: We disagree that these alleged below-cost

sales should be disregarded as outside the ordinary course of trade.

Contrary to the petitioners' assertion, the Act explicitly provides

that sales disregarded pursuant to a cost investigation are outside the

ordinary course of trade (see section 771(15) of the Act). In a cost

investigation, the Department not only considers whether sales are

below cost but also whether the below-cost sales are in substantial

quantities within an extended period of time and are not at prices

which permit the recovery of all costs within a reasonable period of

time. As the Department stated in the preamble to its regulations:

The statutory definition of ordinary course of trade * * *

provides that only those below-cost sales that are ``disregarded

under section 773(b)(1)'' of the Act are automatically considered to

be outside the ordinary course of trade. In other words, the fact

that sales of the foreign like product are below cost does not

automatically trigger their exclusion. Instead, such sales must have

been disregarded under the cost test before the Department will

exclude them. * * *

See Antidumping Duties; Countervailing Duties, 62 FR 27296, 27359

(May 19, 1997) (``Final Rule'').

We note that under the old law (i.e., prior to the amendments made

to the Act by the URAA), the Department's practice was not to exclude

below cost sales as outside the ordinary course of trade, regardless of

the results of the cost test. See, e.g., Antifriction Bearings (Other

Than Tapered Roller Bearings) and Parts Thereof from Thailand; Final

Results of Antidumping Duty Administrative Review and Revocation of

Antidumping Duty Order, 61 FR 33711, 33712 (June 28, 1996) (In

calculating CV profit, we stated that we were rejecting petitioner's

``suggestion that below-cost sales are per se outside the ordinary

course of trade); Antifriction Bearings from France, Germany, Italy,

Japan, Romania, Singapore, Sweden, Thailand, and the United Kingdom, 58

FR 39729 (July 26, 1993) (same); cf. Certain Fresh Cut Flowers from

Ecuador, 52 FR 2128 (January 20, 1987) (We rejected petitioner's

argument from its case brief that home market sales should be

disregarded as below cost by characterizing it as an untimely cost

allegation). This practice was upheld by the CIT. See The Torrington

Co. v. United States, 960 F. Supp. 339, 343 (CIT 1997).

This is in contrast to the new law, which provides explicitly that

sales that fail the cost test (i.e., those ``disregarded under section

773(b)(1)'' of the Act) are outside the ordinary course of trade. The

Act does not provide for automatic exclusion of a sale simply because

it is below cost. Therefore, consistent with the explicit requirements

of the post-URAA Act and the Department's long-standing practice, we

will not automatically exclude any of Venus' or Sindia's allegedly

below cost sales as outside the ordinary course of trade as none of

them have been disregarded pursuant to a cost investigation.

Furthermore, in FAG (U.K.) Ltd. v. United States, 24 F. Supp. 2d

297 (CIT 1998), the CIT stated that we may not initiate a cost

investigation without ``reasonable grounds to believe or suspect'' that

sales were made below the cost of production. According to the CIT,

reasonable grounds may include (1) a sufficient allegation of below

cost sales made by the petitioner; or (2) below cost sales disregarded

in the previous review.

In the present case, the petitioners did not make a timely below-

cost allegation and we have not found below-cost sales made by these

companies in a previous review. Indeed, the only ``reasonable grounds''

we would have to initiate a cost investigation would be the

petitioners' argument that the difference in merchandise (``difmer'')

cost data indicates that the respondents have made sales below cost.

However, this type of data is precisely the type of data that the

petitioners could have used to construct a cost allegation (see Final

Rule, at 62 FR 27335-273336). While the Department may consider whether

this data, included as part of a cost allegation, provides reasonable

grounds to initiate a formal cost investigation, to do so here would

circumvent the rule that the petitioners bring a below-cost allegation

within 20 days after the respondent files its comparison market

questionnaire response. See 19 CFR 351.301(d)(2). Therefore, because we

did not receive a timely below-cost allegation, and because we have not

disregarded sales from the respondents as a result of a cost test in

the most recent prior review, we find that we do not have reasonable

grounds to begin a cost investigation. Thus, as only below-cost sales

disregarded pursuant to a cost investigation may be disregarded as

outside the ordinary course of trade, and we are not conducting a cost

investigation, none of the respondents' alleged below-cost sales can be

found to be outside the ordinary course of trade based solely on their

below-cost status. As discussed in the next paragraph, the Department

may make exceptions under certain unique circumstances. However, no

such circumstances are present in this case.

The respondents are correct in stating that both LNPP and

Mechanical Transfer Presses are distinguishable from the present case.

Specifically, while we indicated that in certain situations we do have

the authority to disregard below-cost sales absent a formal cost

investigation, we also explained that our normal practice is to

initiate a formal cost investigation before excluding below-cost sales

as outside the ordinary course of trade. We explained that the ``unique

circumstances'' of the cases required us to perform a cost analysis

even though we did not formally initiate a cost investigation. In both

cases, we found that the particular market situation did not permit

proper price-to-price comparisons and, therefore, normal value was

based on CV. When receiving the cost information for each sale, we were

readily able to determine that certain sales were below cost and, thus,

when calculating CV profit, we excluded those sales that would have

been disregarded, had a formal cost test been conducted, as outside the

ordinary course of trade. This review is in no way comparable to these

cases, as we do not consider each sale to involve a separate model and,

thus, extensive CV information has not been provided as a basis for

normal value.

The argument that we should exclude sales that are outside the

ordinary course of trade because they were made at aberrationally low

prices is in effect an argument that below-cost sales should be

excluded. The petitioners are making the same argument from a different

angle. We have addressed it through our discussion of the alleged

below-cost sales.

Therefore, as discussed above, and in accordance with the Act and

our practice, we are not disregarding alleged below-cost sales made by

Sindia and Venus in third country markets as outside the ordinary

course of trade

[[Page 13774]]

without having disregarded those sales pursuant to a formal cost

investigation.

Comment 2: Acceptance of Untimely Response

Madhya argues that the Department should accept its response to

Section D (Cost of Production and Constructed Value) of the original

questionnaire and to the Department's supplemental questionnaire,

despite the Department's rejection of the response as untimely. While

Madhya does not deny the fact that its response was untimely, it notes

that it had communication difficulties with its counsel and believed

that upon sending its submission, the response would be received by the

deadline. Madhya also argues that its untimely submission did not

impede the review, especially as the Department had a significant

amount of time to complete the review as evidenced by the continued

review and issuance of supplemental questions to Bhansali after the

preliminary results. Thus, Madhya states that the new shipper review

should proceed.

The petitioners argue that by failing to meet the Department's

deadlines, Madhya voluntarily terminated its participation in this

review and that the Department properly rejected Madhya's submission.

Department's Position: Section 351.302 of our regulations, among

other things, explicitly sets forth the procedures for requesting an

extension of time, the manner in which the Department will extend a

deadline, and the circumstances by which we will return untimely

submissions. Madhya was aware of these requirements, as they asked for

several extensions throughout the proceeding. In fact, in this

particular instance Madhya asked for three extensions. We granted the

first two but denied the last request, because we did not receive an

adequate explanation or reasoning as to why the extension was needed.

Nonetheless, Madhya submitted its responses on September 17, 1998.

However, because Madhya failed to meet an already extended deadline and

provided no explanation as to why it did not meet the extended

deadline, we rejected its response as untimely. Section 351.302(d) of

our regulations states that unless the Secretary extends the time for

submission, ``the Secretary will not consider or retain in the official

record of the proceeding: (i) Untimely filed factual information. * *

*'' While it may be true that Madhya had difficulties communicating

with its counsel, that Madhya intended to respond in a timely manner,

and that we had the administrative resources and time to conduct a full

review, such argumentation and statements do not change the fact that

Madhya missed the deadline to file its submission and that, in

accordance with our regulations, we properly rejected and have not

considered Madhya's untimely submission.

Comment 3: Application of Facts Available

Madhya argues that, because it has been cooperative and has not

impeded the review, the application of adverse facts available against

it in the preliminary results was inappropriate. Madhya cites AK Steel

Corp. v. U.S., 988 F. Supp. 594, 605 (CIT 1997) in support of its

proposition that adverse facts available may only be imposed if the

Department finds that a review has been impeded. With respect to the

petitioners' contention that the Department should use the most adverse

facts available, Madhya argues that the Department does not impose most

adverse facts available when the circumstances are such that the

respondent requested a review, the petitioner did not request a review,

and when the respondent submitted responses to Department

questionnaires (see Antifriction Bearings (Other Than Tapered Roller

Bearings) and Parts Thereof From France; et al.; Final Results of

Antidumping Duty Administrative Reviews, 57 FR 28360, 28391 (June 24,

1992).

Although the petitioners agree with the Department's use of adverse

facts available in the preliminary results and our determination that

Madhya was uncooperative, they disagree with our use of the ``all

others'' rate established in the less-than-fair-value (``LTFV'')

investigation as the adverse facts available rate. They argue that

assigning Madhya this rate rewards the company for its failure to

supply requested information because the ``all others'' rate is not the

highest adverse rate. Thus, the petitioners state that the Department

should assign the highest rate available for any respondent in the LTFV

investigation, which was 21.02 percent applied to Mukand Ltd.

Department's Position: As noted in our preliminary results, Madhya

failed to submit its questionnaire responses on time and failed to

provide adequate reasons for its delays. Thus, we preliminarily

determined that Madhya failed to cooperate to the best of its ability

to comply with a request for information under section 776(b) of the

Act. The respondent's contention that we may only use adverse facts

available when a review has been impeded does not comport with the

plain language of the statute, which states, ``If the administering

authority * * * finds that an interested party has failed to cooperate

by not acting to the best of its ability to comply with a request for

information from the administering authority * * *, the administering

authority * * * may use an inference that is adverse to the interests

of that party in selecting from among the facts otherwise available.''

See section 776(b) of the Act. There is no suggestion in the statute or

in our regulations that the measurement of whether a party has not

acted to the best of its ability depends on whether the review has been

impeded.

Thus, the issue is not whether Madhya impeded our review process,

but rather if it failed to cooperate to the best of its ability. We

gave Madhya ample opportunity to submit the information requested.

However, instead of submitting the information by the third established

deadline, its counsel requested yet another extension of the time limit

because counsel had not yet heard from Madhya. Based on the above,

Madhya failed to submit information in a timely manner. Consequently,

the Department determined that Madhya did not cooperate to the best of

its ability.

With regard to the petitioners' argument that we should apply the

LTFV's highest rate as adverse facts available, we note that the

statute and regulations provide us with discretion when selecting an

adverse rate. Above all, the decision on appropriate adverse facts

available must be made on a case-by-case basis. In selecting a margin

which would appropriately reflect our decision to use adverse facts

available for Madhya, we have taken into consideration the fact that,

as a first-time respondent, its ability to comply with our requests for

information could be distinguished from, for example, the ability of a

more experienced company. We also note that Madhya did make some effort

to respond to our requests for information. See Certain Fresh Cut

Flowers From Colombia; Final Results and Partial Rescission of

Antidumping Duty Administrative Review, 62 FR 53287, 53291-53292

(October 14, 1997) (in which we examined the efforts the respondent

made to comply with requests for information, the respondent's relative

experience, and the relative levels of available calculated margins

when selecting the appropriate adverse facts available margin).

In selecting a margin which would appropriately reflect our

decision to use adverse facts available for Madhya, we examined the

rates applicable to SSB from India throughout the course of the

[[Page 13775]]

proceeding. Also, in accordance with the Statement of Administrative

Action (``SAA''), we considered the extent to which Madhya may benefit

from its own lack of cooperation in determining whether the use of the

12.45 percent rate is sufficiently adverse under the circumstances of

this case. See SAA, H. DOC No. 316, vol.1, 103d Cong., 2d Sess., at 870

(1994). Given Madhya's level of participation in this segment of the

proceeding, we determine that this rate is sufficiently adverse to

encourage full cooperation in future segments of the proceeding.

Therefore, as adverse facts available, we are continuing to use a rate

of 12.45 percent, which reflects the ``all others'' rate from the LTFV

investigation and is the rate which applied to Madhya prior to this

review.

Comment 4: Duty Drawback

The petitioners support the Department's preliminary determination

that the respondents did not meet the Department's criteria for an

upward adjustment to export price. The petitioners maintain that the

respondents' use of duty drawback 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 also argue that because the respondents have failed

to document that there were sufficient imports to account for the

drawback claimed, the Department should not offset the respondents'

material costs by the claimed duty drawback amounts. Specifically, the

petitioners note that, given the lack of documentation, the Department

has no way of ensuring that imported inputs were used in the production

of SSB and, thus, any adjustment to material input costs may exceed the

amount of import duties paid.

The respondents argue that even if the Department does not grant an

upward adjustment to the U.S. price for duty drawback, an adjustment

should be made to reduce material costs. The respondents argue that the

standards for evaluating the two different adjustments are not the same

and that the Department has accepted the offset to material costs in

past segments of this proceeding.

Department's Position: When evaluating a duty drawback program, we

consider 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 Certain Welded Carbon Standard Steel Pipes and

Tubes from India, 62 FR 47632, 47634 (September 10, 1997)).

None of the respondents have 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 any of the respondents imported inputs in sufficient

quantities to account for rebates received under the program. In fact,

Sindia stated that it did not import any goods under the credit it

reported but instead transferred this credit to other parties. Venus

stated that it is not possible to establish the link between import

duties paid and duty drawbacks generally received because it often

transferred its duty drawback license to other companies. Accordingly,

as in the preliminary results, no adjustment to the U.S. price for duty

drawback has been made.

As CV is not the basis for normal value, we have not offset

material costs.

Comment 5: Application of Facts Available for Bhansali

The petitioners argue that Bhansali did not properly revise its

methodology to account for the two different production processes it

uses to make SSB and, therefore, the Department should rely on facts

available for Bhansali. The petitioners allege that Bhansali has

significantly impeded the proceeding by not supplying this information.

Specifically, the petitioners argue that Bhansali has failed to account

for the different yield losses between the two production processes.

The petitioners argue that Bhansali's failure to provide a complete and

accurate response prevents the Department from accurately determining

whether Bhansali's comparison market sales were below the cost of

production and in substantial quantities. Moreover, the petitioners

argue that Bhansali is attempting to control the review process through

the submission of piecemeal information. Thus, Bhansali should receive

the ``all others'' rate from the LTFV investigation. The petitioners

cite Pistachio Group of the Association of Food Industries v. United

States, 671 F. Supp. 31, 40 (CIT 1987) and Atlantic Sugar, Ltd. v.

United States, 744 F. 2d. 1556, 1560 (CIT 1997) in support of their

argument.

Bhansali counters that it has responded to the Department's request

to identify and quantify the differences between the two processes to

the best of its ability. With respect to the yield loss ratio, the

respondent argues that it does not track actual processing yield or

losses in the production cycle in its accounting records and,

therefore, it has reported the ratio it uses in its internal cost

accounting and which it believes is the standard yield loss ratio for

the industry. Furthermore, the respondent contends that the petitioners

have not presented any evidence substantiating their argument that

yield losses differ among the two production processes.

Department's Position: After reviewing the petitioners' concerns

regarding Bhansali's methodology for calculating the yield loss for its

respective production processes, we found it necessary to seek

additional information in order to ensure that our calculations are as

accurate as possible. Therefore, we allowed interested parties the

opportunity to submit information with respect to Bhansali's yield loss

ratio. In response to our request, the petitioners submitted an

affidavit from a domestic producer of SSB attesting to the various

yield losses applicable to the different production processes used by

the respondent. Bhansali was unable to provide information supporting

the number used in its calculations on a process-specific basis. Thus,

for purposes of the final results, as facts available, we are adjusting

Bhansali's raw material inputs based on the information submitted by

the petitioners. In addition, because the production processes in

question generate different amounts of scrap, we are also adjusting the

scrap offset to account for the change in the yield loss.

We determine that, in accordance with section 776(a) of the Act,

the use of facts available is appropriate because the necessary

information on yield loss ratios was not available on the record.

Specifically, while Bhansali did provide an estimated yield loss ratio

it uses in its internal cost accounting in its normal course of

business, it failed to provide information demonstrating how this

estimate corresponds to actual yield loss attributable to the different

processes it uses to produce SSB. Therefore, we find Bhansali's yield

loss estimate does not reasonably reflect its differences in costs.

Thus, when calculating the appropriate COP for each sale we applied, as

facts available, a yield loss ratio that more reasonably conformed to

the particular process used to produce the merchandise in question.

Comment 6: General and Administrative (``G&A'') and Interest

Calculations

The petitioners argue that Bhansali's reported calculations of G&A

and

[[Page 13776]]

interest expenses are not based on its audited financial statements.

The petitioners assert that it is the Department's long-standing policy

to calculate the G&A and interest expense ratios based on the full-year

G&A expense and net interest expense as reported in the audited

financial statements that most closely corresponds to the POR. See

Final Determination of Sales at Less Than Fair Value: Canned Pineapple

Fruit From Thailand, 60 FR 29553, 29565 (June 5, 1995). Therefore, the

Department should reject Bhansali's reported G&A and interest expenses

and use the ratios that the petitioners calculated based on Bhansali's

audited financial statements.

The respondent argues that by including the total amount of

interest expense listed in its financial statements, the petitioners

are double-counting interest expense. The respondent contends all

financial expenses have been accounted for in its sales databases and,

therefore, should be excluded from the calculation of the interest

expense ratio. Furthermore, the respondent notes that the petitioners

have included in their calculation the line item ``bank charges,

commission and interest.'' The respondent argues that these expenses

are also sale specific and should not be included in the calculation of

interest expense.

The respondent further argues that the petitioners' calculation of

the G&A expense ratio is erroneous because it double-counts

depreciation expenses. The respondent notes that it included all

depreciation expenses in the fixed overhead field. Therefore, Fixed

overhead should be reduced by the amount of depreciation expenses

allocated to G&A.

The respondent also notes that the petitioners included an amount

for the employer's contribution in its calculation of the G&A ratio.

This expense was already included in the direct labor field.

Department's Position: It is our standard practice to rely on a

company's audited financial statements in calculating the G&A and

interest expense ratios. Thus, we have recalculated the G&A and

interest ratios using the profit and loss figures from the fiscal year

that most closely corresponds to the POR. With respect to the

calculation of the interest ratio, we included the total amount of

interest expense listed in Bhansali's financial statements because we

were unable to reconcile this amount to its specific sales. However, we

did not include ``bank charges, commission and interest'' in this

calculation, as the petitioners did, because the respondent reported

these expenses in its sales listing. In addition, we did not include

depreciation expenses or the employer's contribution in our calculation

of the G&A ratio because the respondent accounted for these expenses in

the fixed overhead and direct labor fields, respectively.

Comment 7: Scrap Sales

The petitioners allege that Bhansali's reported scrap income offset

is overstated because it includes scrap sales outside the POR.

Therefore, this figure should be adjusted downward.

The respondent argues that its calculation of scrap income offset

is based on its most recently completed fiscal year and allocated to

total raw materials consumed over the same period. The respondent

further argues that its methodology represents a reasonable lag between

production and scrap sales.

Department's Position: It is our standard practice to allow a

company to report COP and CV figures based on its fiscal year if the

company's fiscal year ends within three months of the POR. Given that

Bhansali's most recently completed fiscal year ends two months after

the POR, we find that the respondent's methodology for calculating the

scrap income offset is reasonable.

Final Results of Review

As a result of these reviews, we find that the following margins

exist for the period February 1, 1997, through January 31, 1998.

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

Margin

Manufacturer/Exporter (percent)

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

Bhansali..................................................... 0.00

Venus........................................................ 0.23

Sindia....................................................... 0.19

Chandan...................................................... 0.00

Madhya....................................................... 12.45

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

Parties to the proceeding may request disclosure within five days

after the date of announcement or, if there is no public announcement,

within five days after the date of publication of this notice. See 19

CFR 351.224. The results of these reviews shall be the basis for the

assessment of antidumping duties on entries of merchandise covered by

the reviews and for future deposits of estimated duties for the

manufacturers/exporters subject to these reviews. 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 to the

total value of those sales examined. 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 and new shipper 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 these reviews; (2) for companies not covered in these

reviews, but covered in previous reviews or the 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 these reviews, 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 these reviews 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 LTFV investigation (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 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 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 351.305(a)(3). 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 new shipper review and notice

are in accordance with sections 751(a)(1), 751(a)(2)(B), and 777(i)(1)

of the Act.

[[Page 13777]]

Dated: March 12, 1999.

Robert S. LaRussa,

Assistant Secretary for Import Administration.

[FR Doc. 99-6831 Filed 3-19-99; 8:45 am]

BILLING CODE 3510-DS-P