[Federal Register Volume 65, Number 15 (Monday, January 24, 2000)]
[Notices]
[Pages 3662-3666]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-1661]


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DEPARTMENT OF COMMERCE

International Trade Administration

[A-533-810]


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

AGENCY:  Import Administration, International Trade Administration, 
Department of Commerce.

ACTION:  Notice of final results of antidumping duty new shipper review 
of stainless steel bar from India.

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SUMMARY:  On August 25, 1999, the Department of Commerce published the 
preliminary results of the 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.
    This review covers three producers/exporters of stainless steel bar 
to the United States during the period February 1, 1998, through July 
31, 1998.

EFFECTIVE DATE:  January 24, 2000.

FOR FURTHER INFORMATION CONTACT:  James Breeden or Melani Miller, 
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) 482-1174 or 482-0116, 
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 August 25, 1999, the Department published the preliminary 
results of the new shipper review of the antidumping duty order on 
stainless steel bar from India (64 FR 46350) (``Preliminary Results''). 
The manufacturers/exporters in this new shipper review are Jyoti Steel 
Industries (``Jyoti''), Parekh Bright Bars Pvt. Ltd. (``Parekh''), and 
Shah Alloys Ltd. (``Shah''). We verified information provided by Jyoti 
as discussed in the Verification section, below. We received a case 
brief from the petitioners \1\ on December 22, 1999. We received 
rebuttal briefs from Jyoti and Shah on January 7, 2000.
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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 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 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 review 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

[[Page 3663]]

convenience and customs purposes, our written description of the scope 
of this review is dispositive.

Verification

    As provided in section 782(i) of the Act, we verified information 
provided by Jyoti using standard verification procedures, including on-
site inspection of the manufacturer's facilities, the examination of 
relevant cost data and financial records, and selection of original 
documentation containing relevant information. Our verification results 
are outlined in the public and business proprietary versions of the 
verification report, dated December 13, 1999.

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 Shah, we used facts available as discussed in the 
Use of Facts Otherwise Available section, below.
    For Jyoti, we adjusted its direct material costs, internal taxes on 
direct material purchases, direct labor costs, variable overhead costs, 
general and administrative costs, interest expenses, and international 
freight expense based on information gathered at verification. See 
Memorandum to Susan H. Kuhbach: ``Jyoti Steel Industries Verification 
Report'' dated December 13, 1999 (``Verification Report'') and 
``Company-specific Calculation Notes for Final Results: Jyoti Steel 
Industries'' dated January 15, 2000.

Use of Facts Otherwise Available

    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, Shah 
failed to provide information explicitly requested by the Department; 
therefore, we have used facts otherwise available in determining Shah's 
dumping margin.
    However, pursuant to section 782(e) of the Act, in using the facts 
otherwise available we must determine whether information Shah 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.
    While Shah did respond to our original questionnaire and 
supplemental questionnaires, it refused our request to revise its 
constructed value (``CV'') using cost data relevant to the POR, or in 
the alternative, explain or document why the cost data it did submit 
was representative of the costs incurred during the POR. Because of 
Shah's refusal to respond to our requests for additional information, 
we did not verify the company as planned. Thus, pursuant to section 
782(e)(3), we found the information on the record so incomplete for the 
POR being examined that we determined that it could not serve as a 
reliable basis for calculating a dumping margin. Also, pursuant to 
section 782(e)(4), Shah failed to act to the best of its ability in 
providing the requested information. Consequently, we are not using any 
of the information submitted by Shah for our final 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 August 19, 1999, 
we issued a supplemental questionnaire to Shah, which instructed the 
company to either revise its CV database based on costs incurred during 
the POR or to submit supporting documentation as to why its fiscal year 
cost information accurately reflected the costs incurred by the company 
during the POR. In its supplemental questionnaire response, Shah failed 
to address either issue. We issued Shah another supplemental 
questionnaire on September 29, 1999, requesting that it submit CV data 
based on actual costs incurred during the POR. Shah responded in its 
October 16, 1999, supplemental questionnaire response that it was not 
revising its CV database and that it was continuing to provide CV 
information based on fiscal year 1998-1999 data.
    We find that by not providing necessary information specifically 
requested by the Department, Shah failed to cooperate to the best of 
its ability. Therefore, in selecting facts available, we have 
determined that an adverse inference is warranted. As adverse facts 
available, we have assigned a margin of 21.02 percent to Shah's sales 
of the subject merchandise.
    This margin, calculated for sales by Mukand Limited during the 
original less than fair value (``LTFV'') 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. 103-316, Vol. 1, 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

[[Page 3664]]

circumstances indicating that this margin is inappropriate as facts 
available. Therefore, we find that the 21.02 percent rate is 
corroborated.
    In our Preliminary Results, we applied a total adverse facts 
available margin for Parekh. We have not changed this finding for these 
final results. For a detailed explanation of our reasons for applying 
adverse facts available, please see our Preliminary Results and the 
Department's response to Comment 1 below.

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 petitioners and rebuttal comments from Jyoti and Shah.

Comment 1: Use of Facts Available for Parekh and Shah

    The petitioners argue that the Department should rely on facts 
available for Parekh and Shah for purposes of the final results because 
each company failed to report critical information required for the 
calculation of dumping margins. With respect to Parekh, the petitioners 
note that the company failed to respond to the Department's 
supplemental request for information. Therefore, the petitioners argue 
that the Department should continue to rely on facts available when 
calculating Parekh's margin, as it did in the Preliminary Results. With 
respect to Shah, the petitioners argue that the Department has no 
choice but to apply the facts otherwise available because the company 
failed to report costs of production in a manner consistent with 
Department requirements and provided no explanation for its failure to 
do so. In support of their argument, the petitioners cite to the 
Department's December 17, 1999, memorandum which states that Shah's 
failure to comply with Department requests warrants the use of adverse 
facts available. See December 17, 1999, Memorandum from Team to Richard 
Moreland, ``Failure by Shah Alloys to Respond to Requests for 
Information.''
    Shah argues that the CV information it provided to the Department 
was the only cost data that it had available when it received the 
Department's requests. Therefore, Shah contends that it has cooperated 
to the best of its ability with the Department requests for 
information.
Department's Position
    We agree with the petitioners and have applied the facts otherwise 
available to both Shah and Parekh for the final results. As discussed 
in the Preliminary Results, we did not have the data necessary to 
calculate a dumping margin for Parekh, because Parekh failed to respond 
to the Department's supplemental questionnaire and request for cost 
information, and discontinued all communication with the Department. In 
light of this withholding of necessary information, pursuant to section 
776(a)(2)(A) of the Act, we found it necessary to apply the facts 
available. Furthermore, not only did Parekh fail to provide necessary 
information specifically requested by the Department and to discontinue 
its participation in this review, Parekh provided the Department with 
no explanation or reasons for its failure to participate. Based on 
these facts, pursuant to section 776(b) of the Act, we determined that 
Parekh failed to cooperate to the best of its ability; therefore, we 
used an adverse inference when selecting among the facts otherwise 
available.
    Moreover, we corroborated the facts available rate applied to 
Parekh as explained in the Preliminary Results. We have received no 
information that would call into question our corroboration of that 
rate and, therefore, continue to use it for our final results.
    As noted above in the Facts Otherwise Available section, Shah did 
not submit information requested by the Department and failed to 
cooperate by not acting to the best of its ability to comply with a 
request for information. As was stated in the Department's December 17, 
1999, memorandum, although Shah did submit cost information, that 
information was based on a time period that included eight months that 
were not included in the POR. We gave Shah numerous opportunities to 
explain why this data was representative of the costs incurred during 
the POR or to revise its data, opportunities that were declined by 
Shah. At the time the Department requested the cost information, Shah 
offered no explanation as to why it chose not to take advantage of the 
opportunities provided by the Department. It is only now, in its 
rebuttal brief, that Shah informs the Department that the cost data it 
had provided was the only cost data that it had available when it 
received the Department's requests. However, we find that this 
explanation is belated.
    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 explained in the Facts Otherwise 
Available section above and in our Preliminary Results, because we 
found that both Shah and Parekh withheld critical information that was 
requested by the Department, the use of facts otherwise available is 
appropriate.
    Furthermore, as is also noted above, in accordance with section 
776(b) of the Act, if the Department 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, the Department may use an inference 
that is adverse to the interests of that party in selecting from among 
the facts otherwise available. Because we found that neither Shah nor 
Parekh cooperated to the best of its ability, the use of an adverse 
inference is also appropriate for the final results for both Shah and 
Parekh.

Comment 2: The Department Should Apply Facts Available to Jyoti

    The petitioners argue that Jyoti has significantly impeded the 
proceeding by failing to report its sales to third country markets and, 
therefore, the Department should rely on facts available for Jyoti. 
Moreover, contrary to Jyoti's explanation at verification that it 
misunderstood the Department's reporting instructions, the petitioners 
allege that record evidence indicates Jyoti clearly understood the 
Department's instructions. Given that Jyoti has intentionally withheld 
information requested, the Department should disregard the constructed 
value information submitted by Jyoti as the basis for the calculation 
of normal value and assign an adverse facts available rate to Jyoti for 
the final results. In support of their argument, the petitioners cite 
Stainless Steel Sheet and Strip in Coils From Taiwan, Notice of Final 
Determination of Sales at Less than Fair Value, 64 FR 30592 (June 8, 
1999) (``Sheet and Strip from Taiwan''), in which the Department 
applied adverse facts available to a respondent company that failed to 
report all of its home market sales.
    Jyoti argues that it reported the sales that are identical to its 
U.S. sales. The company states that the merchandise it sold to third 
country markets is different in physical and chemical properties. Thus, 
according to Jyoti, those sales should not have been reported.
Department's Position
    As discussed in the Preliminary Results,Jyoti reported that it had 
a viable home market and no third-country market sales of the foreign 
like product. We agreed with Jyoti that it had a viable home market, 
but preliminarily determined that a ``particular market situation'' 
existed making it inappropriate to use home

[[Page 3665]]

market sales as a basis for normal value. Therefore, based upon our 
understanding at the time that Jyoti had no third country sales, we 
requested and received CV information from Jyoti and used it as the 
basis for normal value for the preliminary results. At verification, we 
discovered that Jyoti did make third-country sales of the foreign like 
product during the POR. However, as discussed in the verification 
report, we believe that the misreporting was based on a 
misunderstanding and that information was not intentionally withheld 
from the Department. See page 3 of the Verification Report.
    We do not agree that applying adverse facts available is 
appropriate in this situation. Unlike the situation in Sheet and Strip 
from Taiwan, in this instance we find that Jyoti has had difficulty 
understanding our reporting instructions. This situation is complicated 
by the fact that it is the first time the company is involved with an 
antidumping proceeding. Jyoti's misunderstanding was substantiated at 
verification when company officials expressed their confusion regarding 
the reporting of third-country sales. Jyoti's rebuttal comments also 
illustrate its continued misunderstanding. While we have not found that 
Jyoti fully complied with this request for information, we have not 
found that this error in reporting demonstrates Jyoti's failure to 
cooperate to the best of its ability. Rather, Jyoti's subsequent 
responses to our supplemental questions and its cooperation at 
verification are indicative of a cooperative respondent. In addition, 
the CV information was verified by the Department and can be used 
without difficulties. Moreover, the information is complete and can 
serve as a reliable basis for calculating an antidumping duty margin.

Comment 3: Jyoti's CV Reporting Methodology

    The petitioners contend that the information obtained by the 
Department at verification demonstrates that Jyoti's reporting 
methodology is flawed. Specifically, the petitioners argue that Jyoti's 
use of a single, average cost for all of its products fails to measure 
accurately the direct labor and overhead expenses allocable to the 
different bar sizes produced by Jyoti. The petitioners contend that 
Jyoti's failure to revise its allocation methodology, despite the 
requests made by the Department, warrants the use of facts available.
    Jyoti contends that the size and simplicity of its operations does 
not necessitate allocating labor and overhead costs differently across 
the various bar sizes it produces. Jyoti further argues that any 
deviations from the single, average cost it reported are marginal and 
do not have an impact on the calculation of CV.
Department's Position
    Although we found at verification that the allocation methodology 
used in Jyoti's questionnaire response contained certain errors, we 
agree with Jyoti that none of these errors was so significant as to 
warrant the rejection of Jyoti's data. In general, when we deem a 
respondent's data to be acceptable, our practice is to correct it for 
errors found at verification. Accordingly, we have reallocated Jyoti's 
direct labor and variable overhead expenses based on the information 
collected at verification for purposes of the final results.

Comment 4: Jyoti's Calculation of U.S. Credit Expense Is Incorrect

    The petitioners argue that Jyoti's calculation of U.S. credit 
expense does not take into account the correct number of days between 
the shipment of the merchandise and the receipt of payment from the 
customer. According to the petitioners, the Department should adjust 
this expense to reflect the correct number of days outstanding between 
shipment and customer payment.
    Jyoti argues that it has correctly used the number of days between 
the issuance of the invoice and receipt of payment from its bank.
Department's Position
    We disagree with the petitioners that the calculation of credit 
expense is incorrect. The Department's preference is to use actual 
credit cost information. As discussed in the Verification Report, Jyoti 
finances its exports accounts receivable by entering into a discount 
arrangement with its bank. See page 4 of the Verification Report. Jyoti 
has submitted on the official record bank documentation detailing the 
credit costs incurred in connection with its U.S. sale. This 
information was also reviewed at verification. Because the reported 
amount represents the actual credit expenses incurred by Jyoti, we have 
continued to use it for our final results.

Comment 5: The Department Should Reject Jyoti's Offsets to Constructed 
Value

    The petitioners argue that the Department should not allow an 
adjustment to constructed value for internal taxes on raw material 
purchases because Jyoti failed to provide evidence of rebates from the 
government. The petitioners note that it is the Department's practice 
to allow an adjustment for tax rebates only if a respondent can 
demonstrate a link between claimed rebates and its cost of manufacture. 
See Canned Pineapple Fruit From Thailand, Final Results and Partial 
Recession of Antidumping Duty Administrative Review, 64 FR 69481, 69485 
(December 13, 1999). According to the petitioners, Jyoti failed to 
provide such a link and, thus, the Department should not allow this 
cost adjustment.
    Jyoti contends that there is a direct link between the sales tax 
rebate and the cost of manufacture. However, Jyoti argues that this tax 
rebate is difficult to document because reimbursement occurs through 
the reduction of taxes payable to the government.
Department's Position
    We agree with the petitioners, in part. At verification, company 
officials were unable to provide supporting documentation with respect 
to the rebates received in connection with sales taxes paid on raw 
material purchases. Accordingly, we have not made an adjustment to 
Jyoti's CV data for these tax rebates. However, company officials were 
able to document the refund of excise duties paid on the raw materials 
used to produce subject merchandise. Therefore, we have offset Jyoti's 
CV data by the amount of excise duties refunded in connection with the 
purchase of the raw materials used in the production of the subject 
merchandise.

Final Results of Review

    As a result of this review, we find that the following margins 
exist for the period February 1, 1998, through July 31, 1998:

------------------------------------------------------------------------
                                                              Margin
                  Manufacturer/Exporter                      (percent)
------------------------------------------------------------------------
Jyoti...................................................            0.00
Parekh..................................................           21.02
Shah....................................................           21.02
------------------------------------------------------------------------

    The Department will disclose to a party to the proceeding 
calculations performed in connection with these final results 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 result 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

[[Page 3666]]

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 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 indicated above; (2) for companies not 
covered in this review, but covered in previous reviews or the LTFV 
investigation (59 FR 66915, December 28, 1994), 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 review 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.
    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 new shipper review and notice are in accordance with sections 
751(a)(2)(B) and 777(i)(1) of the Act.

    January 18, 2000.
Robert S. LaRussa,
Assistant Secretary for Import Administration.
[FR Doc. 00-1661 Filed 1-21-00; 8:45 am]
BILLING CODE 3510-DS-P