Federal Register / Vol. 60, No. 38 / Monday, February 27, 1995 / Notices 10545

been allocated by value, rather than

weight. In response to Carmiel’s

assertion that it followed the

Department’s instructions, we note that

the Department’s August 3, 1994

deficiency questionnaire, at page 4,

instructed respondent to allocate

expenses on the basis that they are

incurred. Since these expenses are

incurred by value, they should be

allocated on such basis. Accordingly,

we have reallocated marine insurance

and agents fees by value.

Comment 7

Petitioner states that the payment date

for one home market invoice should be

corrected based on findings at

verification.

Carmiel notes that, while several

payment dates were found to be

incorrect at verification, the payment

date problems were minor and resulted

from the fact that its records are not

computerized. Therefore, correcting the

payment dates will not have a

significant effect. Nonetheless,

respondent states that all of the verified

payment dates should be corrected.

DOC Position

We agree with both petitioner and

respondent. It would be inappropriate to

use payment dates which we know to be

incorrect for the final determination.

Therefore, we have corrected the

misreported payment dates on the

verified sales. We have used these

corrected payment dates to calculate the

home market credit adjustment.

Suspension of Liquidation

We are directing the U.S. Customs

Service to continue to suspend

liquidation of all entries of butt-weld

pipe fittings from Israel, as defined in

the ‘‘Scope of Investigation’’ section of

this notice, that are produced and sold

by Carmiel and that are entered, or

withdrawn from warehouse, for

consumption on or after October 4,

1994.

The Customs Service shall require a

cash deposit or the posting of a bond

equal to the estimated weighted-average

amount by which the foreign market

value of the subject merchandise

exceeds the United States price as

shown below. The suspension of

liquidation will remain in effect until

further notice. The weighted-average

dumping margins are as follows:

Manufacturer/producer/exporter Margin

(percent)

Pipe Fittings Carmiel, Inc. ........ 8.84

All Others .................................. 8.84

Adjustment of Deposit Rate for

Countervailing Duties

Article VI, paragraph 5 of the General

Agreement on Tariffs and Trade

provides that ‘‘[no] product * * * shall

be subject to both antidumping and

countervailing duties to compensate for

the same situation for dumping or

export subsidization.’’ This provision is

implemented by section 772(d)(1)(D) of

the Act. Since antidumping duties

cannot be assessed on the portion of the

margin attributable to export subsidies,

there is no basis to require a cash

deposit or bond for that amount.

Accordingly, the level of export

subsidies as determined in the final

affirmative determination in the

concurrent countervailing duty

investigation of certain carbon steel

butt-weld pipe fittings from Israel,

which was 2.26 percent, will be

subtracted from the margin for cash

deposit or bonding purposes. This

results in a deposit rate of 6.58 percent

for Carmiel and a deposit rate of 6.58

percent for all others.

ITC Notification

In accordance with section 735(d) of

the Act, we have notified the ITC of our

determination.

Notice to Interested Parties

This notice also serves as the only

reminder to parties subject to

administrative protective order (APO) of

their responsibility concerning the

return or destruction of proprietary

information disclosed under APO in

accordance with 19 CFR 353.35(d).

Failure to comply is a violation of the

APO.

This determination is published

pursuant to section 735(d) of the Act (19

U.S.C. 1673(d)).

Dated: February 16, 1995.

Barbara R. Stafford,

Acting Assistant Secretary for Import

Administration.

[FR Doc. 95–4725 Filed 2–24–95; 8:45 am]

BILLING CODE 3510–S–P

[A–533–811]

Notice of Final Determination of Sales

at Less Than Fair Value: Certain

Carbon Steel Butt-Weld Pipe Fittings

From India

AGENCY: Import Administration,

International Trade Administration,

Department of Commerce.

EFFECTIVE DATE: February 27, 1995.

FOR FURTHER INFORMATION CONTACT: Sue

Strumbel, Office of Countervailing

Investigations, Import Administration,

International Trade Administration,

U.S. Department of Commerce, 14th

Street and Constitution Avenue, NW,

Washington, DC 20230; telephone (202)

482–1442.

Final Determination

We determine that certain carbon

steel butt-weld pipe fittings from India

are being sold in the United States at

less than fair value, as provided in

section 735 of the Tariff Act of 1930, as

amended (the ‘‘Act’’). The estimated

margins shown in the ‘‘Suspension of

Liquidation’’ section of this notice.

Case History

Since the publication of the

preliminary determination in the

Federal Register on October 4, 1994 (59

FR 50562), the following events have

occurred:

On October 5, 1994, Sivanandha Pipe

Fittings Ltd. (Sivanandha) and Karmen

Steels of India (Karmen), requested that

the final determination in this case be

postponed. On November 14, 1994, the

Department published in the Federal

Register a notice postponing the

publication of the final determination in

this case until February 16, 1995 (59 FR

56461).

From October 31 to November 5,

1994, we verified Sivanandha’s and

Karmen’s sales information in Madras,

India.

We received case and rebuttal briefs

on January 23 and January 30, 1995,

respectively, from petitioner and

respondents.

Scope of the Investigation

The products covered by this

investigation are certain carbon steel

butt-weld pipe fittings having an inside

diameter of less than fourteen inches

(355 millimeters), imported in either

finished or unfinished condition. Pipe

fittings are formed or forged steel

products used to join pipe sections in

piping systems where conditions

require permanent welded connections,

as distinguished from fittings based on

other methods of fastening (e.g.,

threaded, grooved, or bolted fittings).

Butt-weld fittings come in a variety of

shapes which include ‘‘elbows,’’ ‘‘tees,’’

‘‘caps,’’ and ‘‘reducers.’’ The edges of

finished pipe fittings are beveled, so

that when a fitting is placed against the

end of a pipe (the ends of which have

also been beveled), a shallow channel is

created to accommodate the ‘‘bead’’ of

the weld which joins the fitting to the

pipe. These pipe fittings are currently

classifiable under subheading

7307.93.3000 of the Harmonized Tariff

Schedule of the United States (HTSUS).

Although the HTSUS subheading is
10546 Federal Register / Vol. 60, No. 38 / Monday, February 27, 1995 / Notices

provided for convenience and customs

purposes, our written description of the

scope of this investigation is dispositive.

Karmen’s Exports of Refurbished Pipe

Fittings

Karmen reported that it has an

arrangement with a Singaporean

company, under which the Singaporean

company supplies Karmen with rusty

pipe fittings. Karmen reconditions and

refurbishes these pipe fittings and sends

them to the Singaporean company’s U.S.

customer. Petitioner and Karmen agree

with the Department’s preliminary

determination that these ‘‘sales’’ of

refurbished pipe fittings are not subject

to this investigation.

For purposes of this final

determination, we are continuing to

treat these ‘‘sales’’ as outside the scope

of our investigation and, hence, not

subject to any potential antidumping

order on butt-weld pipe fittings from

India. Karmen essentially performs a

tolling service for its Singaporean

customer. Moreover, Karmen does not

‘‘substantially transform’’ these pipe

fittings.

Substantial transformation generally

refers to a degree of processing or

manufacturing resulting in a new and

different article. Through that

transformation, the new article becomes

a product of the country in which it was

processed or manufactured. See ColdRolled Steel from Argentina, 58 FR

37062, 37065 (1993) (Appendix I).

Commerce makes these determinations

on a case-by-case-basis. See, e.g., Certain

Fresh Cut Flowers from Colombia, 55

FR 20291, 20299 (1990); Limousines

from Canada, 55 FR 11036, 11040

(1990).

In determining whether Karmen

substantially transformed these pipe

fittings, we examined whether the

degree of processing or manufacturing

resulted in a new and different article.

Karmen receives rusty pipe fittings from

Singapore, it removes the rust, paints

the fitting, and forwards it to the

Singaporean company’s customer. We

do not consider this refurbishing

process as substantially transforming

the subject merchandise because it

remains a pipe fitting after

refurbishment. Therefore, because

Karmen does not substantially transform

the merchandise, we do not consider it

as falling within the scope of this

proceeding.

Period of Investigation

The period of investigation (POI) is

September 1, 1993 through February 28,

1994, for Sivanandha and August 1,

1993 through February 28, 1994, for

Karmen. The preliminary determination

in this investigation provides an

explanation regarding the different POIs

for each company.

Such or Similar Comparisons

For Sivanandha, in making our fair

value comparisons, we first compared

merchandise identical in all respects in

accordance with the Department’s

standard methodology. If no identical

merchandise was sold, we compared the

most similar merchandise, as

determined by the model-matching

criteria contained in Appendix V of the

questionnaire (Appendix V) (on file in

Room B–099 of the main building of the

Department of Commerce (Public File)).

For the U.S. sales compared to sales of

similar merchandise, we made an

adjustment, pursuant to 19 CFR 353.57,

for physical differences in merchandise.

Karmen did not make home market or

third country sales of the subject

merchandise. Therefore, we based

foreign market value (FMV) on

constructed value (CV), in accordance

with section 773(a)(2) of the Act.

Fair Value Comparisons

To determine whether Sivanandha’s

and Karmen’s sales for export to the

United States were made at less than

fair value, we compared the United

States price (USP) to the FMV, as

specified in the ‘‘United States Price’’

and ‘‘Foreign Market Value’’ sections of

this notice.

We made revisions to Sivanandha’s

and Karmen’s reported data, where

appropriate, based on verification

findings.

United States Price

Because Sivanandha’s and Karmen’s

U.S. sales of subject merchandise were

made to unrelated purchasers prior to

importation into the United States, and

exporter’s sales price methodology was

not indicated by other circumstances,

we based USP on the purchase price

(PP) sales methodology in accordance

with section 772(b) of the Act.

We calculated Sivanandha’s USP

based on packed, CIF prices to unrelated

customers in the United States. We

made deductions, where appropriate,

for foreign inland freight,

containerization, ocean freight, and

marine insurance.

We recalculated Sivanandha’s marine

insurance expense, so it is allocated on

a value basis instead of a weight basis.

For Sivanandha, in accordance with

Section 772(d)(1)(B) of the Act, we

added the amount of import duties

imposed on inputs which were

subsequently rebated upon exportation

of the finished merchandise to the

United States.

We also made an adjustment for taxes

paid on the comparison sales in India,

in accordance with our practice,

pursuant to the Court of International

Trade (CIT) decision in Federal-Mogul,

et al v. United States, 834 F. Supp. 1993.

See, Color Negative Photographic Paper

and Chemical Components Thereof from

Japan, 59 FR 16177, 16179, April 6,

1994 for an explanation of this tax

methodology.

We calculated Karmen’s USP based

on packed, CIF prices to unrelated

customers in the United States. We

made deductions, where appropriate,

for foreign inland freight,

containerization, ocean freight, and

marine insurance. We recalculated

Karmen’s marine insurance expense, so

it is allocated on a value basis instead

of a weight basis.

Foreign Market Value

In order to determine whether there

was a sufficient volume of sales in the

home market to serve as a viable basis

for calculating Sivanandha’s FMV, we

compared the volume of home market

sales of subject merchandise to the

volume of third country sales of subject

merchandise, in accordance with

section 773(a)(1)(B) of the Act. Based on

this comparison, we determined that

Sivanandha’s home market was viable.

For Sivanandha, we calculated FMV

based on delivered prices, inclusive of

packing to home market customers.

From these prices, we deducted

commission, where appropriate.

In light of the Court of Appeals for the

Federal Circuit’s decision in Ad Hoc

Committee of AZ–NM–TX–FL Producers

of Gray Portland Cement v. United

States, 13 F. 3d 398 (Fed. Cir., January

5, 1994), the Department no longer can

deduct home market movement charges

from FMV pursuant to its inherent

power to fill in gaps in the antidumping

statute. Instead, we adjust for those

expenses under the circumstance-of-sale

(COS) provision of 19 CFR 353.56(a).

Accordingly, in the present case, we

adjusted for post-sale home market

movement charges under the COS

provision of 19 CFR 353.56(a). This

adjustment included home market

inland freight.

For Sivanandha, we also made COS

adjustments for differences in quality

inspection charges, and credit. In

accordance with 19 CFR 353.56(b)(1),

we added U.S. indirect selling expenses

as an offset to the home market

commission, but capped this addition

by the amount of the home market

commission. Finally, we deducted home

market packing expenses and added

U.S. packing expenses to Sivanandha’s
Federal Register / Vol. 60, No. 38 / Monday, February 27, 1995 / Notices 10547

FMV, in accordance with section

773(a)(1) of the Act.

For Karmen, because it sells the

subject merchandise only in the United

States, we used CV, pursuant to section

773(e) of the Act. We calculated CV as

the sum of the cost of materials,

fabrication, general expenses, U.S.

packing costs, and profit. We relied

upon the submitted CV data but made

the following changes where we

determined costs were not appropriately

quantified or valued: (1) We adjusted

the cost of manufacturing to include the

cost of excluded electricity expenses; (2)

we recalculated finance expense on an

annual basis as a percentage of cost of

goods sold; (3) we increased SG&A

expenses for excluded partner’s salary,

audit fees and bank charges and

recalculated SG&A expense on an

annual basis as a percentage of

fabrication cost of goods sold; (4) we

reduced the manufactured fittings per

unit of fabrication cost for amounts that

relate to the refurbished fittings; and (5)

we reduced the submitted indirect

selling expense for the verified

overstated amounts. In accordance with

section 773(e)(1)(B)(i) and (ii) of the Act,

we: (1) Included the greater of either

Karmen’s reported general expenses or

the statutory minimum of ten percent of

the cost of manufacture (COM), as

appropriate; and (2) used the statutory

minimum of eight percent of the sum of

COM and general expenses for profit

because actual profit was less than eight

percent.

In our preliminary determination, we

were unable to properly allocate labor

and variable manufacturing overhead

costs between refurbished pipe fittings

and new pipe fittings. However, based

on verified information, we are now

able to allocate the labor and variable

manufacturing overhead costs between

refurbished and new pipe fittings.

Therefore, for purposes of this final

determination, Karmen’s CV includes

only those costs allocable to new pipe

fittings.

Currency Conversion

We made currency conversions based

on the official exchange rates in effect

on the dates of the U.S. sales as certified

by the Federal Reserve Bank of New

York. See 19 CFR 353.60.

Verification

As provided in section 776(b) of the

Act, we verified information provided

by the respondent using standard

verification procedures, including the

examination of relevant sales, cost and

financial records, and selection of

original source documentation.

Interested Party Comments

Comment 1: Karmen and Sivanandha

argue that they are not related parties for

purposes of this antidumping duty

investigation. They contend that,

although one individual has a common

interest in both companies, in all other

respects the two companies are separate.

Petitioner disagrees with respondents’

argument. It states that, although the

Department verified that Karmen and

Sivanandha are separate legal entities,

the relationship between the two

companies satisfies many of the criteria

considered by the Department when

deciding whether to ‘‘collapse’’

companies.

DOC’s Position: We agree with

respondents. In general, Commerce will

not consider parties related where the

ownership interest is less than five

percent. See, e.g., Certain Forged Steel

Crankshafts from Japan, 52 FR 36984

(1987). This is consistent with

Commerce’s ‘‘general practice not to

collapse related parties except in certain

relatively unusual situations, where the

type and degree of relationship is so

significant that we find there is a strong

possibility of price manipulation.’’

Antifriction Bearings (Other Than

Tapered Roller Bearings: and Parts

Thereof from Germany, 54 FR 18992,

19089 (1989). Based on Karmen’s

supplemental response and our analysis

at verification, we confirmed that the

ownership between Karmen and

Sivanandha is insignificant and that no

other factors suggested a strong

possibility of price manipulation. (See

the February 16, 1995, Memorandum

from Team to Barbara Stafford for a full

discussion of our analysis of this

subject.)

Comment 2: Karmen argues that it

should be allowed to reduce its cost of

manufacturing for the POI to account for

the advance import license it purchased

from the Indian government. Karmen

notes that it originally purchased the

license in order to import steel pipe for

pipe fittings at duty-free prices. Karmen

maintains that it did not use the import

license but, instead, produced and

exported the subject merchandise using

higher-priced domestic pipe inputs.

Because it can still import duty-free

pipe under the license, Karmen argues

that it should be allowed to reduce its

production costs by an amount

representing the estimated future

savings on imported pipe used to

manufacture pipe fittings.

Petitioner argues that we should not

reduce Karmen’s production costs by

the potential savings on future duty free

imports. Petitioner states that in

calculating constructed value, the

Department uses the cost of materials

incurred at a time preceding the date of

exportation of the subject merchandise.

Also, the Department’s CV

questionnaire clearly states that the

respondent is to report costs incurred

during the POI for purposes of

constructed value. Petitioner further

claims that the advance license held by

Karmen was not used during the POI

and, therefore, the future potential

savings, if they are realized, will affect

costs after the date of exportation of the

subject merchandise. Finally, petitioner

argues that if the license is used in the

future, the effect of the license on

Karmen’s costs of manufacturing would

be taken into account in a future

administrative review.

DOC’s Position: We believe that the

advance import license provides a

benefit to Karmen which accrued to the

company during the POI due to the fact

that it met its export commitment under

the license through the use of

domestically-purchased pipe inputs. In

this case, the benefit from the license

relates directly to production and sale of

the subject fittings during the POI. Thus,

in order to achieve an appropriate

matching of production costs and sales

revenues for the subject merchandise,

we have offset material costs by an

amount representing the benefit

obtained from the unused import

license.

Comment 3: Petitioner argues that the

Department should not adjust Karmen’s

material costs by the income generated

by sales of scrap, because subcontractors

to Karmen retain the scrap and

presumably lower their prices to

Karmen to reflect the value of the scrap.

DOC’s Position: The Department

verified that Karmen permits its

subcontractors to keep all scrap

generated from the production processes

they perform. Hence, Karmen did not

sell any scrap during the POI and is not

entitled to the scrap adjustment it

claimed. We agree with petitioner that

the value of the scrap is likely

accounted for in the price the

subcontractors charge Karmen.

Therefore, allowing the adjustment

claimed by Karmen would double count

the value of scrap.

Comment 4: Regarding the salary of

its director, Karmen argues that since

the director is an owner, his income is

a partner’s draw and should not be

included in Karmen’s total salary

expense. Respondent also contends that

if the Department determines that the

draw must be included in SG&A costs,

the Department should only include the

amount of the draw that would be

comparable to a reasonable salary for

management.
10548 Federal Register / Vol. 60, No. 38 / Monday, February 27, 1995 / Notices

Petitioner argues that the director’s

entire salary should be included as a

cost because it is treated as a cost by

Karmen in its financial statements and

in calculating taxable income. Also,

petitioner contends that there is no

factual basis by which the Department

can establish an amount that would be

reasonable salary for management.

DOC’s Position: We agree with

petitioner. During verification, we

discovered that Karmen did not include

its director’s salary in its reported costs.

Karmen’s director is not a passive

investor; he takes an active role in the

company’s management. Moreover, the

payments made to him during the POI

were classified as salary in Karmen’s

books and records. There is no evidence

on the record to indicate that these

payments were for anything other than

salary. Accordingly, we included the

full amount paid to the director in

SG&A costs for purposes of the final

determination.

Comment 5: Karmen argues that the

Department should use verified

information to allocate Karmen’s labor

and variable overhead costs between the

pipe fittings it refurbishes and the pipe

fittings it manufactures. Respondent

further contends that the Department

should allocate certain other costs, such

as grinding and painting, to both types

of fittings since these costs were

incurred on both types of pipe fittings.

Petitioner agrees that allocation of a

portion of verified costs to refurbished

fittings may be appropriate. However,

petitioner disagrees that the Department

should allocate any expenses for

grinding to refurbished pipe fittings

because Karmen has not previously

indicated that any grinding is involved

in the refurbishing process. Petitioner

contends that grinding is associated

with the beveling process, which is a

production step performed before

Karmen acquires the rusty pipe fittings.

DOC’s Position: The Department

verified that shotblasting, punching,

painting and grinding costs were

incurred by Karmen to refurbish certain

of its pipe fittings. Therefore, the

Department has allocated a portion of

these expenses to the cost of the

refurbished fittings.

Comment 6: Karmen argues that

SG&A should be allocated to

refurbished and manufactured pipe

fittings on the basis of weight. Since

there are no material costs associated

with the refurbished pipe, an allocation

based on cost of goods sold would

assign too great an amount to

manufactured pipe fittings.

Petitioner argues that the Department

should deny Karmen’s request to

allocate SG&A costs by weight instead

of cost. Petitioner contends that it is the

Department’s practice to calculate SG&A

costs as a percentage of cost of sales.

Petitioner further contends that with

respect to the refurbished fittings,

Karmen does not manufacture or ‘‘sell’’

these fittings. Because Karmen

contributes so little value to the

refurbished fittings, using product

weight to allocate SG&A is plainly

distorting.

DOC’s Position: We have determined

that SG&A expenses should be allocated

based on cost of sales rather than on the

weight of finished pipe fittings.

However, since there are no material

costs associated with the refurbished

fittings and hence, no material costs

were reflected in these ‘‘sales’’, we

removed material costs related to the

manufactured fittings from cost of sales

in order to establish an equitable

allocation.

Comment 7: Karmen claims that,

although not mentioned in the CV

verification report, company officials

demonstrated at verification that certain

indirect selling expenses had been

overstated in the CV calculations.

Correct amounts were provided and

verified.

Petitioner claims that there is no

evidence of this on record, and that the

original amount should be used.

DOC’s Position: Although we did not

address this issue in our verification

report, respondent is correct in stating

that we verified Karmen’s actual amount

of indirect selling expenses for the POI.

Additionally, there is information on

the record of this investigation which

supports Karmen’s verified indirect

selling expenses. The source document

supporting this expense is in Exhibit 10

of the CV verification report.

Comment 8: Petitioner argues that the

Department should use the verified

packing cost information for Karmen

instead of the reported amount for the

final determination. Petitioner also

argues that the Department should use

the best information available (BIA) for

Karmen’s foreign inland freight

expenses, since Karmen did not provide

the supporting documentation requested

by the Department.

Karmen argues that although it did

not produce supporting documentation

for its foreign inland freight expense,

the Department should not resort to

BIA. Respondent contends that, because

the general accuracy of Karmen’s

responses was established at

verification, the Department should use

the data ascertained at verification.

DOC’s Position: As stated in the Fair

Value Comparisons section of this

notice, we made revisions to Karmen’s

data, where appropriate, based on

verification findings. Therefore, we have

adjusted Karmen’s data for packing

costs based on verification.

Because Karmen did not provide

source documentation for its foreign

inland freight expense, we have used as

BIA, the highest Indian truck freight

rates as provided in a cable from the

U.S. embassy in Bombay dated August

3, 1993.

Comment 9: Petitioner claims that we

should apply total BIA to Sivanandha

because the Department’s verification

revealed numerous discrepancies in

Sivanandha’s responses. (The specific

discrepancies raised by petitioner are

addressed in comments 10 through 17,

below.)

Sivanandha refutes each of the

discrepancies listed by petitioner and

argues that total BIA is inappropriate.

(See, comments 10 through 17 for

Sivanandha’s counter arguments.)

DOC’s Position: We have determined

to accept Sivanandha’s verified

information because the discrepancies

discovered were minor in nature.

Overall, Sivanandha’s responses were

accurate and presented a true picture of

its manufacturing and selling processes.

Comment 10: Petitioner argues that

certain home market sales reported by

Sivanandha as subject merchandise (i.e.,

seamless carbon steel butt-weld pipe

fittings), were sales of welded pipe

fittings, which are outside of the scope

of this investigation. Petitioner contends

that sales of welded pipe fittings that

were actually filled with pipe fittings

made of seamless pipe cannot be

considered as occurring in the ordinary

course of trade.

Sivanandha argues that these sales

were within the ordinary course of trade

and that it correctly reported all sales of

the subject merchandise.

DOC’s Position: We verified that all of

Sivanandha’s home market sales were

produced using seamless carbon steel.

Therefore, we agree with Sivanandha

that these sales are properly included in

the home market database. Although

customers requested welded pipe, the

orders were filled with seamless pipe.

Since we are investigating sales of

seamless pipe to the United States, the

home market sales in question should

be included for comparison purposes.

While we are authorized to exclude

sales not in the ordinary course of trade

(e.g., trial sales or sales of samples),

there is no basis for treating

Sivanandha’s seamless pipe sales as

outside the ordinary course of trade.

Comment 11: Petitioner claims that

the product weights were not verified

because Sivanandha used standard

weights instead of actual weights.

Petitioner argues that the standard
Federal Register / Vol. 60, No. 38 / Monday, February 27, 1995 / Notices 10549

weights were not acceptable because the

correlation between standard and actual

weights was no better than 93 percent.

Sivanandha argues that it was

appropriate to use standard weights

because most invoices did not list actual

weights. According to Sivanandha the

93 percent correlation between actual

and standard weights derived at

verification supports, rather than

undermines, the use of standard

weights.

DOC’s Position: We disagree with

petitioner that Sivanandha’s use of

standard weights was unreasonable. The

93 percent correlation between actual

and standard weights demonstrates the

reasonableness. Moreover, even if we

were to adjust for the seven percent

‘‘discrepancy’’ it would have no effect

on the amounts allocated to each size of

pipe fitting because Sivanandha used

the same methodology for both its home

market and U.S. sales.

Comment 12: Petitioner states that

Sivanandha did not provide

documentation for the cost of gunny

bags. Therefore, petitioner argues that

packing was not verified. Petitioner also

states that Sivanandha did not report

any labor costs for packing pipe fittings

sold in the home market.

Sivanandha claims that the cost of

gunny bags was verified. It also

contends that the failure to report the

cost of labor for packing home market

sales is to its detriment. As a practical

matter, Sivanandha points out that there

is virtually no labor cost for home

market packing since there is no crating

on home market sales.

DOC’s Position: Normally, the

Department applies BIA whenever

respondents are unable to support at

verification the information provided in

their responses. Although Sivanandha

failed to provide at verification

documentation supporting the cost of

gunny bags, the Department is not

compelled to apply BIA because the

company’s overall responses were

accurate and verified, and the plausible

cost of such bags is very low. Absent

alternative publicly available

information with respect to the cost of

gunny bags, the Department has used

the price reported by Sivanandha.

Comment 13: Petitioner lists the

following problems with the difference

in merchandise adjustment submitted

by Sivanandha: incorrect product codes,

standard versus actual weight of steel,

average price for steel versus price for

specific grades of steel, discrepancies in

the manner in which Sivanandha

reported its labor and variable overhead

expenses. Petitioner argues that these

problems led the Department to request

that Sivanandha resubmit its home

market and U.S. sales databases.

Sivanandha admits that it originally

did not understand the Department’s

methodology regarding this adjustment.

However, Sivanandha argues that the

information was corrected at

verification. Therefore, Sivanandha

argues that the Department should

accept these new verified databases.

DOC’s Position: At verification, we

discovered that the Sivanandha had not

understood the Department’s

adjustment for differences in

merchandise. However, the information

required to correct Sivanandha’s

adjustment was readily available and we

verified it. Sivanandha submitted new

section B and C databases after

verification, and we confirmed that they

were identical to the information

verified. Therefore, we are accepting

Sivanandha’s corrected databases.

Comment 14: Petitioner describes

other discrepancies pertaining to

adjustments for inland freight, credit,

bank guarantees, ocean freight, marine

insurance, foreign inland freight, and

containerization.

Sivanandha claims that many of the

costs were estimated because

Sivanandha had not yet exported the

merchandise to the United States. Also,

certain of the discrepancies listed by

petitioner were minute fractions of a

cent, due to rounding errors.

Sivanandha argues that company

officials made every effort to supply the

verification team with accurate

information.

DOC’s Position: We view the

discrepancies described by petitioner as

minor and are using the verified

information. We agree with Sivanandha

that the company cooperated fully with

the Department’s investigation and

verification.

Comment 15: Petitioner claims that

the sum of material, labor, and variable

overhead is incorrect in Sivanandha’s

database, and is concerned that there are

additional problems with the November

29, 1994 databases. Therefore, petitioner

argues that these databases should not

be used and that the Department should

use BIA.

DOC’s Position: The Department

noted that the data was correct, but the

program was missing one formula. The

Department entered the correct formula,

and the spreadsheet is accurate. The

Department is accepting these databases

for the final determination because we

have checked that they match the data

we verified.

Comment 16: The petitioner claims

that by using the new submission the

difference in merchandise adjustment

for several sales exceed the 20 percent

rule. Hence, for these sales, constructed

value should be used.

Sivanandha believes that the

petitioner’s claim is incorrect.

Moreover, according to Sivanandha,

petitioner’s allegation that the

Department should use CV in these

sales is untimely.

DOC’s Position: Using the November

29, 1994 databases, we have determined

that no difference in merchandise

adjustments exceeded 20 percent. This

issue is therefore moot.

Comment 17: Petitioner claims that

the circumstance of sale adjustment for

advertising in the home market should

not be allowed because the advertising

is aimed at Sivanandha’s customers, not

the customers’ customer. Petitioner also

argues that the adjustment for quality

inspections should not be allowed

because, even though the charge appears

on the invoice, it is separate from the

cost of the merchandise and, therefore,

not embedded in the price.

Sivanandha claims that it would be

inappropriate to ignore these

adjustments because these costs were

incurred solely on the home market

sales and, therefore, increased the price

of the home market sales. Additionally,

Sivanandha claims that the quality

inspections are performed only if the

customer requests the services. The

price charged is higher because the cost

of the inspection is included in the

price reported by Sivanandha.

DOC’s Position: We agree with the

petitioner that we should not adjust

Sivanandha’s home market sales for

advertising expenses because the costs

were not directed to the customers’

customer. However, we agree with

Sivanandha that we should make an

adjustment to its home market prices for

technical services when the inspection

was performed by a third party because

we verified that these costs were

included in Sivanandha’s price.

Continuation of Suspension of

Liquidation

We are directing the U.S. Customs

Service to continue to suspend

liquidation of all entries of butt-weld

pipe fittings from India, as defined in

the ‘‘Scope of Investigation’’ section of

this notice, that are entered, or

withdrawn from warehouse, for

consumption on or after October 4,

1994.

The Customs Service shall require a

cash deposit or the posting of a bond

equal to the estimated weighted-average

amounts by which the foreign market

values of the subject merchandise

exceed the United States prices as

shown below. The suspension of

liquidation will remain in effect until
10550 Federal Register / Vol. 60, No. 38 / Monday, February 27, 1995 / Notices

further notice. The weighted-average

dumping margins are as follows:

Manufacturer/

producer/exporter

Margin

(percent)

Deposit

(percent)

Karmen Steels

of India .......... 1.69 1.69

Sivanandha

Pipe Fittings,

Ltd ................. 13.99 10.83

All Other ........... 7.84 6.26

Adjustment of Deposit Rate for

Countervailing Duties

Article VI, paragraph 5 of the General

Agreement on Tariffs and Trade

provides that ‘‘[no] product * * * shall

be subject to both antidumping and

countervailing duties to compensate for

the same situation for dumping or

export subsidization.’’ This provision is

implemented by section 772(d)(1)(D) of

the Act. Since antidumping duties

cannot be assessed on the portion of the

margin attributable to export subsidies,

there is no basis to require a cash

deposit or bond for that amount.

Accordingly in this investigation,

because Sivanandha’s FMV is based on

home market sales, the antidumping

margin must be adjusted. In the

concurrent Final Affirmative

Countervailing Duty Determination:

Certain Carbon Steel Butt-Weld Pipe

Fittings from India, we determined that

Sivanandha’s export subsidy was 3.16

percent ad valorem, which will be

subtracted from the margins for cash

deposit or bonding purposes. This

results in a deposit rate of 10.83 percent

for Sivanandha. Since Karmen only has

U.S. sales, its FMV is based on CV

which reflects export subsidies. Because

the export subsidies were reflected in

both USP and FMV, the subsidies did

not affect the margin calculations using

CV.

The Customs Service shall require a

cash deposit or the posting of a bond

equal to the estimated preliminary

dumping margins, as shown above. The

suspension of liquidation will remain in

effect until further notice.

ITC Notification

In accordance with section 735(d) of

the Act, we have notified the ITC of our

determination.

Notice to Interested Parties

This notice also serves as the only

reminder to parties subject to

administrative protective order (APO) of

their responsibility concerning the

return or destruction of proprietary

information disclosed under APO in

accordance with 19 CFR 353.35(d).

Failure to comply is a violation of the

APO.

This determination is published

pursuant to section 735(d) of the Act (19

U.S.C. 1671(d)).

Dated: February 16, 1995.

Barbara R. Stafford,

Deputy Assistant Secretary for Investigations.

[FR Doc. 95–4723 Filed 2–24–95; 8:45 am]

BILLING CODE 3510–DS–P

(A–557–808)

Notice of Final Determination of Sales

at Less Than Fair Value: Certain

Carbon Steel Butt-Weld Pipe Fittings

From Malaysia

AGENCY: Import Administration,

International Trade Administration,

Department of Commerce.

EFFECTIVE DATE: February 27, 1995.

FOR FURTHER INFORMATION CONTACT:

Thomas McGinty, Office of

Countervailing Investigations, Import

Administration, International Trade

Administration, U.S. Department of

Commerce, 14th Street and Constitution

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

telephone (202) 482–5055.

Final Determination

The Department of Commerce (the

Department) determines that certain

carbon steel butt-weld pipe fittings

(‘‘pipe fittings’’) from Malaysia are

being, or are likely to be, sold in the

United States at less than fair value, as

provided in section 735 of the Tariff Act

of 1930, as amended (the Act) (19 U.S.C.

1673d). The estimated margins are

shown in the ‘‘Suspension of

Liquidation’’ section of this notice.

Scope of Investigation

The merchandise covered by this

investigation are certain carbon steel

butt-weld pipe fittings (‘‘pipe fittings’’)

having an inside diameter of less than

fourteen inches (355 millimeters),

imported in either finished or

unfinished condition. Pipe fittings are

formed or forged steel products used to

join pipe sections in piping systems

where conditions require permanent

welded connections, as distinguished

from fittings based on other methods of

fastening (e.g., threaded, grooved, or

bolted fittings). Butt-weld fittings come

in a variety of shapes which include

‘‘elbows,’’ ‘‘tees,’’ ‘‘caps,’’ and

‘‘reducers.’’ The edges of finished pipe

fittings are beveled, so that when a

fitting is placed against the end of a pipe

(the ends of which have also been

beveled), a shallow channel is created to

accomodate the ‘‘bead’’ of the weld

which joins the fitting to the pipe. These

pipe fittings are currently classifiable

under subheading 7307.93.3000 of the

Harmonized Tariff Schedule of the

United States (‘‘HTSUS’’).

Although the HTSUS subheading is

provided for convenience and customs

purposes, our written description of the

scope of this proceeding is dispositive.

Period of Investigation

The period of investigation (POI) is

September 1, 1994, through February

28, 1994.

Case History

Since the announcement of the

preliminary determination on

September 27, 1994, the following

events have occurred.

On October 4, 1994, we published the

notice of preliminary determination in

the Federal Register (59 FR 50560). On

October 20, 1994, White & Case

submitted a notice of appearance on

behalf of the Government of Malaysia.

On November 14, 1994, we published

the postponement of final determination

in the Federal Register (59 FR 56461).

Petitioner was the only interested

party to file a case brief in this

investigation. Petitioner did so on

January 23, 1995.

Best Information Available

In accordance with section 776(c) of

the Act, we have determined that the

use of best information available (BIA)

is appropriate for Malaysia Mining

Corporation Pipe & Fitting Sdn Bhd

(MMCPNF), the Malaysian company

identified by both petitioner and the

U.S. Embassy in Malaysia (by cable to

the Department) as the primary exporter

of the subject merchandise to the U.S

during the POI. Given that MMCPNF

did not respond to the Department’s

questionnaire, we find the company has

not cooperated in this investigation.

Our BIA methodology for

uncooperative respondents is to assign

the higher of the highest margin alleged

in the petition or the highest rate

calculated for another respondent.

Accordingly, as BIA, we are assigning

the highest margin among the margins

alleged in the petition, adjusted for

methodological errors as explained in

the Department’s initiation notice. See

Final Determination of Sales at Less

Than Fair Value: Antifriction Bearings

(Other Than Tapered Roller Bearings)

and Parts Thereof From the Federal

Republic of Germany (54 FR 18992,

19033, May 3, 1989). The Department’s

methodology for assigning BIA has been

upheld by the U.S. Court of Appeals of

the Federal Circuit. (See Allied Signal

Aerospace Co. v. United States, 996

F.2d 1185 (Fed. Cir. 1993)); see also

Krupp Stahl, AG et al. v. United States,

822 F. Supp. 789 (CIT 1993)).