[Federal Register: January 31, 2007 (Volume 72, Number 20)]
[Notices]
[Page 4483-4486]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr31ja07-28]
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DEPARTMENT OF COMMERCE
International Trade Administration
[A-533-809]
Certain Forged Stainless Steel Flanges From India; Preliminary
Results of New Shipper Review
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
SUMMARY: The Department of Commerce (the Department) is conducting a
new shipper review of the antidumping duty order on certain forged
stainless steel flanges (stainless steel flanges) from India
manufactured by Kunj Forgings (Kunj). The period of review (POR) covers
February 1, 2005, through January 31, 2006. We preliminarily determine
that Kunj made sales of subject merchandise at less than normal value
(NV) in the United States during the POR. If these preliminary results
are adopted in the final results of this new shipper review, we will
instruct U.S. Customs and Border Protection (CBP) to assess antidumping
duties on entries of the subject merchandise for which the importer-
specific assessment rates are above de minimis.
We invite interested parties to comment on these preliminary
results. Parties who submit argument in these proceedings are requested
to submit with the argument 1) a statement of the issues; 2) a brief
summary of the argument; and 3) a table of authorities cited.
EFFECTIVE DATE: January 31, 2007.
FOR FURTHER INFORMATION CONTACT: Fred Baker or Robert James, AD/CVD
Operations, Office 7, Import Administration, International Trade
Administration, U.S. Department of Commerce, 14th Street and
Constitution Avenue, NW, Washington, DC 20230, telephone (202) 482-2924
or (202) 482-0649, respectively.
SUPPLEMENTARY INFORMATION:
Background
On February 9, 1994, the Department published the antidumping duty
order on stainless steel flanges from India. See Amended Final
Determination and Antidumping Duty Order; Certain Forged Stainless
Steel Flanges from India, 59 FR 5994 (February 9, 1994). On February
28, 2006, we received requests for new shipper reviews from Kunj
Forgings Pvt. Ltd. (Kunj), Micro Forge (India) Ltd. (Micro), Pradeep
Metals Limited (Pradeep), and Rollwell Forge, Ltd. (Rollwell) for the
period February 1, 2005, through January 31, 2006. We initiated the
reviews on April 6, 2006. See Stainless Steel Flanges from India:
Notice of Initiation of Antidumping Duty New Shipper Reviews 71 FR
17439 (April 6, 2006). On September 29, 2006, we rescinded the reviews
with respect to Micro, Pradeep, and Rollwell. See Certain Forged
Stainless Steel Flanges from India: Notice of Partial Rescission of New
Shipper Reviews, 71 FR 27468 (September 29, 2006).
On October 3, 2006, we extended the time limit for the preliminary
results of this new shipper review to no later than January 25, 2007.
See Stainless Steel Flanges From India: Notice of Extension of Time
Limit for the Preliminary Results of Antidumping Duty New Shipper
Review, 71 FR 58372 (October 3, 2006).
Scope of the Order
The products covered by this order are certain forged stainless
steel flanges, both finished and not finished, generally manufactured
to specification ASTM A-182, and made in alloys such
[[Page 4484]]
as 304, 304L, 316, and 316L. The scope includes five general types of
flanges. They are weld-neck, used for butt-weld line connection;
threaded, used for threaded line connections; slip-on and lap joint,
used with stub-ends/butt-weld line connections; socket weld, used to
fit pipe into a machined recession; and blind, used to seal off a line.
The sizes of the flanges within the scope range generally from one to
six inches; however, all sizes of the above-described merchandise are
included in the scope. Specifically excluded from the scope of this
order are cast stainless steel flanges. Cast stainless steel flanges
generally are manufactured to specification ASTM A-351. The flanges
subject to this order are currently classifiable under subheadings
7307.21.1000 and 7307.21.5000 of the Harmonized Tariff Schedule (HTS).
Although the HTS subheading is provided for convenience and customs
purposes, the written description of the merchandise under review is
dispositive of whether or not the merchandise is covered by the scope
of the order.
Verification
As provided in section 782(i)(3) of the Tariff Act of 1930, as
amended (the Tariff Act), from December 11, 2006, through December 14,
2006, we verified information provided by Kunj. We used standard
verification procedures, including the examination of relevant sales,
cost, and financial records, and the selection of original
documentation containing relevant information. Our verification results
are outlined in the public version of the verification report, on file
in the CRU located in room B-099 in the main Department of Commerce
building.
Bona Fides Analysis
Consistent with the Department's practice, we investigated the bona
fides nature of the sales that Kunj made during the POR. Based on our
investigation in the bona fide nature of the sales, the questionnaire
responses Kunj submitted, and our verification thereof, as well as our
preliminary determination that Kunj was not affiliated with any
exporter or producer that had previously shipped subject merchandise to
the United States, we preliminarily determine that Kunj's sales were
made on a bona fide basis. For a complete discussion of our analysis,
see the Department's January 25, 2007, memorandum to the file
``Analysis of the Bona Fide Nature of Kunj's Sales During the Period of
Review,'' on file in room B-099 of the Department of Commerce building.
Comparisons to Normal Value
To determine whether sales of subject merchandise to the United
States by Kunj were made at less than NV, we compared the U.S. export
price (EP) to the NV, as described in the ``Export Price'' and ``Normal
Value'' sections of this notice, below. In accordance with section
777A(d)(2) of the Tariff Act, we calculated monthly weighted-average
prices for NV and compared these to the prices of individual EP
transactions. We found that for all U.S. sales there were no
contemporaneous home market sales that passed the Department's twenty
percent difference-in-merchandise (difmer) test. (For an explanation of
our difmer analysis, see the memorandum to the file, ``Analysis of Data
Submitted By Kunj Forgings Pvt., Ltd., in the 2005-2006 New Shipper
Review of Stainless Steel Flanges from India,'' dated January 25, 2007
(analysis memorandum).) Therefore, we used constructed value (CV) as
the basis for normal value. We describe below our calculation of NV,
CV, and EP.
Product Comparisons
In accordance with section 771(16) of the Tariff Act, we considered
all products described by the Scope of the Order section, above, which
were produced and sold by Kunj in the home market, to be foreign like
products for purposes of determining appropriate comparisons to U.S.
sales. We made comparisons using the following five model match
characteristics: (1) Grade; (2) Type; (3) Size; (4) Pressure rating;
(5) Finish.
Export Price
In accordance with section 772(a) of the Tariff Act, EP is defined
as the price at which the subject merchandise is first sold (or agreed
to be sold) before the date of importation by the producer or exporter
of the subject merchandise outside of the United States to an
unaffiliated purchaser in the United States, or to an unaffiliated
purchaser for exportation to the United States. In accordance with
section 772(b) of the Tariff Act, constructed export price (CEP) is the
price at which the subject merchandise is first sold (or agreed to be
sold) in the United States before or after the date of importation by
or for the account of the producer or exporter of such merchandise or
by a seller affiliated with the producer or exporter, to a purchaser
not affiliated with the producer or exporter, as adjusted under
subsections (c) and (d). For Kunj's sales to the United States, we used
EP in accordance with section 772(a) of the Tariff Act because its
merchandise was sold directly to the first unaffiliated purchaser prior
to importation, and CEP was not otherwise warranted based on the facts
of record.
We calculated EP based on the prices charged to the first
unaffiliated customer in the United States. We used invoice date as the
date of sale. We based EP on the packed FOB Indian port prices to the
first unaffiliated purchasers in the United States. We made deductions
for movement expenses in accordance with section 772(c)(2)(A) of the
Tariff Act, including domestic inland freight and domestic brokerage
and handling.
Normal Value
A. Viability
In order to determine whether there is sufficient volume of sales
in the home market to serve as a viable basis for calculating NV (i.e.,
the aggregate volume of home market sales of the foreign like product
during the POR is equal to or greater than five percent of the
aggregate volume of U.S. sales of subject merchandise during the POR),
we compared Kunj's volume of home market sales of the foreign like
product to the volume of U.S. sales of the subject merchandise. See
section 773(a)(1)(C)(iii) of the Tariff Act. Based on Kunj's reported
home market and U.S. sales quantities, we determine that the volume of
aggregate home market sales during the POR is equal to or greater than
five percent of the aggregate volume of U.S. sales of subject
merchandise during the POR. Accordingly, we find that Kunj had a viable
home market. Therefore, we based NV on home market sales to
unaffiliated purchasers made in the usual quantities and in the
ordinary course of trade. See the January 25, 2007, analysis memorandum
for a further discussion of home market viability.
B. Price-to-Price Comparisons
As indicated above, we compared U.S. sales with contemporaneous
sales of the foreign like product in India. As noted, we considered
stainless steel flanges identical based on the following five criteria:
grade, type, size, pressure rating, and finish. As with EP, we used
invoice date as the date of sale.
In calculating the net unit price, we used the gross unit price as
it appeared on the invoice for each sale, rather than Kunj's reported
gross unit price which (as we first discovered at the verification) was
net of various unexplained expenses. We also made an adjustment to
gross unit price for Kunj's reported late delivery discounts. We
[[Page 4485]]
made adjustments for differences in packing costs between the two
markets and for movement expenses in accordance with sections
773(a)(6)(A) and (B) of the Tariff Act. We adjusted for differences in
the circumstances of sale (COS) pursuant to section 773(a)(6)(C)(iii)
of the Tariff Act and 19 CFR 351.410. We made these COS adjustments by
deducting home market direct selling expenses and adding U.S. direct
selling expenses. Home market direct selling expenses consisted of
warranty expenses, bank charges, and imputed credit. U.S. direct
selling expenses consisted of imputed credit and bank charges. Finally,
we made adjustments, where appropriate, for physical differences
between the U.S. models and the home market models to which it was
being compared.
Constructed Value
In accordance with section 773(a)(4) of the Tariff Act, we based NV
on CV because, as indicated above under the section ``Comparisons to
Normal Value,'' we were unable to find a contemporaneous comparison
market match for any of the U.S. sales. We calculated CV based on the
cost of materials and fabrication employed in producing the subject
merchandise, SG&A, and profit, as required by 19 CFR 351.401(b)(1). In
calculating the cost of materials, we denied Kunj's claim for an offset
to material costs for revenue generated by sales of scrap because Kunj
did not adequately support either the amount of the offset nor its
means of valuing the scrap sales price. See verification report at 33.
In accordance with section 772(e)(2)(A) of the Tariff Act, we based
SG&A expenses and profit on the amounts incurred and realized by Kunj
in connection with the production and sale of the foreign like product
in the ordinary course of trade for consumption in the foreign country.
For selling expenses, we used the weighted-average comparison market
selling expenses. Where appropriate, we made COS adjustments to CV in
accordance with section 773(a)(8) of the Tariff Act and 19 CFR 351.410.
We made the COS adjustments by deducting home market direct selling
expenses and adding U.S. direct selling expenses. The COS adjustments
for CV were the same as those for price-to-price comparisons. See
``Price-to-Price Comparisons'' (above).
Level of Trade
In accordance with section 773(a)(1)(B)(i) of the Tariff Act, to
the extent practicable, we determine NV based on sales in the home
market at the same level of trade (LOT) as EP or CEP. The NV LOT is
that of the starting-price sales in the home market or, when NV is
based on CV, that of the sales from which we derive SG&A expenses and
profit. For CEP it is the level of the constructed sale from the
exporter to an affiliated importer after the deductions required under
section 772(d) of the Tariff Act.
To determine whether NV sales are at a different LOT than EP or
CEP, we examine stages in the marketing process and selling functions
along the chain of distribution between the producer and the
unaffiliated customer. If the comparison-market sales are at a
different LOT and the difference affects price comparability, as
manifested in a pattern of consistent price differences between the
sales on which NV is based and comparison-market sales at the LOT of
the export transaction, we make a LOT adjustment under section
773(a)(7)(A) of the Tariff Act. For CEP sales, if the NV level is more
remote from the factory than the CEP level and there is no basis for
determining whether the difference in the levels between NV and CEP
affects price comparability, we adjust NV under section 773(a)(7)(B) of
the Tariff Act (the CEP-offset provision). See Final Determination of
Sales at Less Than Fair Value: Certain Cut-to-Length Carbon Steel Plate
from South Africa, 62 FR 61731, 61732-33 (November 19, 1997).
In implementing these principles in this review, we obtained
information from Kunj about the marketing stages involved in its U.S.
and home market sales, including a description of its selling
activities in the respective markets. Generally, if the reported levels
of trade are the same in the home and U.S. markets, the functions and
activities of the seller should be similar. Conversely, if a party
reports differences in levels of trade the functions and activities
should be dissimilar.
Kunj reported one channel of distribution and one LOT in the home
market contending that all home market sales were to end users. See
Kunj's November 6, 2006, submission, at 18. After examining the record
evidence provided by Kunj, we preliminarily determine that a single LOT
exists in the home market.
Kunj further contends it provided substantially the same level of
customer support on its U.S. EP sales to distributors/importers as it
provided on its home market sales to end users. This support included
manufacturing to order, and making arrangements for freight and
insurance. See Kunj's May 8, 2006, submission at A-13. The Department
has determined that we will find sales to be at the same LOT when the
selling functions performed for each customer class are sufficiently
similar. See 19 CFR 351.412 (c)(2). We find Kunj performed virtually
the same level of customer support services on its U.S. EP sales as it
did on its home market sales.
The record evidence supports a finding that in both markets and in
all channels of distribution Kunj performs essentially the same level
of services. Therefore, based on our analysis of the selling functions
performed on EP sales in the United States, and its sales in the home
market, we determine that the EP and the starting price of home market
sales represent the same stage in the marketing process, and are thus
at the same LOT. Accordingly, we preliminarily find that no level of
trade adjustment is appropriate for Kunj.
Currency Conversions
We made currency conversions into U.S. dollars in accordance with
section 773(a) of the Tariff Act, based on the exchange rates in effect
on the dates of the U.S. sales, as certified by the Federal Reserve
Bank.
Preliminary Results of Review
As a result of our review we preliminarily find that a weighted-
average dumping margin of 1.52 percent exists for Kunj for the period
February 1, 2005, through January 31, 2006.
The Department will disclose calculations performed within five
days of the date of publication of this notice in accordance with 19
CFR 351.224(b). An interested party may request a hearing within 30
days of publication. See CFR 351.310(c). Any hearing, if requested,
will be held 37 days after the date of publication, or the first
business day thereafter, unless the Department alters the date per 19
CFR 351.310(d).
Interested parties may submit case briefs or written comments no
later than 30 days after the date of publication of these preliminary
results of new shipper review. Rebuttal briefs and rebuttals to written
comments, limited to issues raised in the case briefs and comments, may
be filed no later than 5 days after the date of submission of case
briefs and written comments. Parties who submit argument in these
proceedings are requested to submit with the argument (1) a statement
of the issue, (2) a brief summary of the argument, and (3) a table of
authorities. Further, parties submitting written comments should
provide the Department with an additional copy of the public version of
any such comments on diskette. The Department will issue final results
of this administrative review, including the results of our analysis of
the issues
[[Page 4486]]
raised in any such written comments or at a hearing, within 90 days of
publication of these preliminary results.
Assessment Rates
Upon issuance of the final results of this review, the Department
shall determine, and CBP shall assess, antidumping duties on all
appropriate entries. In accordance with 19 CFR 351.212(b)(1), we have
calculated importer-specific assessment rates based on the total amount
of antidumping duties calculated for the examined sales made during the
POR divided by the total quantity (in kilograms) of the examined sales.
Upon completion of this review, where the assessment rate is above de
minimis, we shall instruct CBP to assess duties on all entries of
subject merchandise by that importer. The Department intends to issue
assessment instructions to CBP fifteen days after the date of
publication of the final results of review.
Cash Deposit Requirements
The following cash deposit rate will be effective upon publication
of the final results of this new shipper review for shipments of
stainless steel flanges from India entered, or withdrawn from
warehouse, for consumption on or after the publication date, as
provided by section 751(a)(2)(C) of the Tariff Act. For subject
merchandise produced and exported by Kunj, the cash deposit rate will
be the rate established in the final results of this review, except if
the rate is less than 0.5 percent and, therefore, de minimis, the cash
deposit rate will be zero. This cash deposit requirement, when imposed,
shall remain in effect until publication of the final results of the
next administrative review.
Notification to Interested Parties
This notice also serves as a preliminary reminder to importers of
their responsibility under 19 CFR 351.402(f) to file a certificate
regarding the reimbursement of antidumping duties prior to liquidation
of the relevant entries during this review period. Failure to comply
with this requirement could result in the Secretary's presumption that
reimbursement of antidumping duties occurred and the subsequent
assessment of double antidumping duties.
We are issuing and publishing this notice in accordance with
sections 751(a)(1) and 777(i)(1) of the Tariff Act.
Dated: January 25, 2007.
David M. Spooner,
Assistant Secretaryfor Import Administration.
[FR Doc. E7-1575 Filed 1-30-06; 8:45 am]
BILLING CODE 3510-DS-S