Import Administration, International Trade Administration, Department of Commerce.
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 Hilton Forge (Hilton). The period of review (POR) covers February 1, 2004, through July 31, 2004. We preliminarily determine that Hilton 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 and 2) a brief summary of the argument.
August 3, 2005.Start Further Info
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.End Further Info End Preamble Start Supplemental Information
On February 9, 1994, the Department published the antidumping duty order on stainless steel flanges from India. See Amended Final Determination and Start Printed Page 44561Antidumping Duty Order; Certain Forged Stainless Steel Flanges from India, 59 FR 5994, (February 9, 1994). On August 31, 2004, Hilton requested that the Department initiate a new shipper review for the period February 1, 2004, through July 31, 2004. We initiated the review on October 6, 2004. See Stainless Steel Flanges from India: Notice of Initiation of Antidumping Duty New Shipper Review.
On March 28, 2005, we extended the time limit for the preliminary results of this new shipper review to no later than July 27, 2005. See Forged Stainless Steel Flanges From India: Extension of Time Limit for Preliminary Results of Antidumping Duty New Shipper Review, 70 FR 15615 (March 28, 2005).
For our analysis of the bona fides of Hilton's sales, see Memorandum to Richard Weible, Re: Bona Fide Nature of the Sale in the New Shipper Review of Hilton Forge, dated July 27, 2005, which is on file in the Central Records Unit (CRU), room B-099 of the main Commerce Building.
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 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.
As provided in section 782(i)(3) of the Tariff Act of 1930, as amended (the Tariff Act), we verified information provided by Hilton from June 6, 2005, through June 10, 2005, using standard verification procedures, the examination of relevant sales, cost, and financial records, and 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.
Comparisons to Normal Value
To determine whether sales of subject merchandise to the United States by Hilton 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.
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 Hilton in the home market, to be foreign like products for purposes of determining appropriate comparisons to U.S. sales. We determined that Hilton had sufficient sales of identical product in the home market; therefore, we did not need to resort to comparisons based on either sales of similar merchandise or constructed value. We made comparisons using the following five model match characteristics: (1) Grade; (2) Type; (3) Size; (4) Pressure rating; (5) Finish.
Export Price and Constructed 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 Hilton'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 the date of invoice as the date of sale. We based EP on the packed CIF 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 foreign inland freight, foreign brokerage and handling, international freight, marine insurance, and export inspection fees.
We denied Hilton's claimed adjustment for duty drawback. Section 772(c)(1)(B) of the Tariff Act provides that EP or CEP shall be increased by “the amount of any import duties imposed by the country of exportation which have been rebated, or which have not been collected, by reason of the exportation of the subject merchandise to the United States.” The Department determines that an adjustment to U.S. price for claimed duty drawback is appropriate when a company can demonstrate that there is (i) a sufficient link between the import duty and the rebate, and (ii) sufficient imports of the imported material inputs to account for the duty drawback received for the export of the manufactured product (the so-called “two-prong test”). See Rajinder Pipes, Ltd. v. United States, 70 F. Supp. 2d 1350, 1358 (Ct. Int'l Trade 1999); see also Viraj Group, Ltd. v. United States, 162 F. Supp. 2d 656 (Ct. Int'l Trade 2001) (Commerce's rejection of claimed adjustments to either price or cost for Indian duty drawback sustained; remanded on other grounds).
In a supplemental questionnaire the Department requested that Hilton establish its entitlement to the duty drawback adjustment by providing evidence that its duty drawback claim met the two-pronged test described above. See April 5, 2005 Supplemental Questionnaire at 4. Hilton's response in its April 21, 2005, submission failed to provide evidence of either point. Furthermore, the Department presented Hilton with another opportunity to establish its entitlement to this claim at the verification in June 2005, and Hilton again failed to do so. Therefore, we have denied the duty drawback adjustment in these preliminary results.
In order to determine whether there is sufficient volume of sales in the home market to serve as a viable basis for Start Printed Page 44562calculating 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 Hilton's volume of home market sales of the foreign like product to the volume of U.S. sales of the subject merchandise. (We found no reason to determine that quantity was not the appropriate basis for these comparisons, so value was not used. See section 773(a)(1)(C) of the Tariff Act and 19 CFR 351.404(b)(2).) Based on Hilton's reported home market and U.S. sales quantities, we determine that Hilton 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.
We based our comparisons of the volume of U.S. sales to the volume of home market sales on reported stainless steel flange weight, rather than on number of pieces. The record demonstrates that there can be large differences between the weight (and corresponding cost and price) of stainless steel flanges based on relative sizes, so comparisons of aggregate data would be distorted for these products if volume comparisons were based on the number of pieces.
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. We 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. Finally, 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 COS adjustments by deducting home market direct selling expenses and adding U.S. direct selling expenses.
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. Finally, 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 Hilton 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.
Hilton reported one channel of distribution and one LOT in the home market contending that all home market sales were to trading companies on a door-delivered basis. See Hilton's November 22, 2004, submission, pp. B-10 and B-19, and its April 21, 2005, submission, p. 7. After examining the record evidence provided by Hilton, we preliminarily determine that a single LOT exists in the home market.
Hilton further contends it provided substantially the same level of customer support on its U.S. EP sales to trading companies/importers as it provided on its home market sales to trading companies. This support included manufacturing to order, and making arrangements for freight and insurance. See Hilton's April 21, 2005 submission at 2. 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 Hilton 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 Hilton 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 Hilton.
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 0.89 percent exists for Hilton for the period February 1, 2004, through July 31, 2004.
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 35 days after the date of publication of this notice. 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 raised in any such written comments or at a hearing, within 120 days of publication of these preliminary results.Start Printed Page 44563
Upon issuance of the final results of this review, the Department shall determine, and the 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.
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 Hilton, 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.Start Signature
Dated: July 27, 2005.
Joseph A. Spetrini,
Acting Assistant Secretary for Import Administration.
[FR Doc. E5-4128 Filed 8-2-03; 8:45 am]
BILLING CODE 3510-DS-S