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Notice

Certain Lined Paper Products From India: Notice of Preliminary Results of Antidumping Duty Administrative Review

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AGENCY:

Import Administration, International Trade Administration, U.S. Department of Commerce.

SUMMARY:

The Department of Commerce (the Department) is conducting an administrative review of the antidumping duty order on certain lined paper products (CLPP) from India. For the period September 1, 2007, through August 31, 2008, we have preliminarily determined that U.S. sales have been made below normal value (NV) by Navneet Publications (India) Limited (Navneet) and Blue Bird India Ltd. (Blue Bird). Because Blue Bird is a selected mandatory respondent and was not responsive to the Department's requests for information, we have preliminarily assigned to Blue Bird a margin based on adverse facts available (AFA). If these preliminary results are adopted in our final results, we will instruct U.S. Customs and Border Protection (CBP) to assess antidumping duties based on the difference between the export price (EP) and NV. See “Preliminary Results of Review” section of this notice. Interested parties are invited to comment on these preliminary results.

DATES:

Effective Date: October 7, 2009

Start Further Info

FOR FURTHER INFORMATION CONTACT:

Stephanie Moore or Cindy Robinson, AD/CVD Operations, Office 3, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue, NW., Washington, DC 20230; telephone (202) 482-3692 or (202) 482-3797, respectively.

Background

On September 2, 2008, the Department issued a notice of opportunity to request an administrative review of this order for the period of review (POR) of September 1, 2007, through August 31, 2008. See Antidumping or Countervailing Duty Order, Finding, or Suspended Investigation: Opportunity To Request Administrative Review, 73 FR 51272 (September 2, 2008).

Pursuant to requests from interested parties,[1] the Department published in Start Printed Page 51559the Federal Register the notice of initiation of this antidumping duty administrative review with respect to 25 companies, including Navneet, Kejriwal Paper Limited (Kejriwal) and Blue Bird for the period September 1, 2007, through August 31, 2008. See Initiation of Antidumping and Countervailing Duty Administrative Reviews and Deferral of Administrative Review, 73 FR 64305 (October 29, 2008) (Initiation Notice).[2] On November 25, 2008, the Department selected Kejriwal and Blue Bird as companies to be individually examined in this, the second administrative review of the antidumping duty order on CLPP from India. See Memorandum to Melissa Skinner from George McMahon titled “Certain Lined Paper Products from India: Selection of Respondents for Individual Review” (Respondent Selection Memo), dated November 25, 2008. On December 4, 2008, the Department issued an antidumping questionnaire (original questionnaire) to Kejriwal and Blue Bird with a due date of January 12, 2009.

After two extension requests [3] to file its response to the original questionnaire, Blue Bird submitted its Section A questionnaire response on February 3, 2009. On February 10, 2009, Blue Bird requested a 13-week extension of time from February 16 to May 18, 2009, to respond to the Sections B, C, and D of the Department's original questionnaire. In light of the fact that the Department had previously granted two extensions and that the requested due date by Blue Bird, May 18, 2009, was only 15 days before the scheduled date of the preliminary results for this review, the Department granted Blue Bird a two-week extension until March 3, 2009. Nonetheless, Blue Bird failed to respond to the Department's Sections B through D questionnaire and had no further communication with the Department. See the Department's letter to Blue Bird dated February 13, 2009 (Extension 3). See also the “Application of Facts Available” section below for further details.

On December 22, 2008, both Kejriwal and petitioner timely withdrew their requests for a review of Kejriwal. On January 2, 2009, petitioner requested that, because Kejriwal was no longer a mandatory respondent, the Department select a second mandatory respondent. On January 9, 2009, after we determined that we would rescind the review with respect to Kejriwal, we selected Navneet as a mandatory respondent because we determined that it was practicable to individually examine two respondents, and issued a questionnaire to Navneet. Navneet submitted its Section A questionnaire response on March 3, 2009; its Sections B and C response on March 20, 2009; and its Section D response on March 31, 2009. The Department issued its first and second supplemental questionnaires to Navneet on April 30, 2009, and June 19, 2009, respectively. Navneet submitted its first and second supplemental questionnaire responses on May 26, 2009, and July 1, 2009, respectively.

On March 4, 2009, and March 24, 2009, petitioner submitted its comments on Blue Bird and Navneet's Section A responses, respectively. On April 21, 2009, petitioner submitted its comments on Navneet's Sections B and C responses. On June 11, 2009, petitioner submitted its comments on Navneet's Sections A through C supplemental responses. On July 11, 2009, petitioner submitted pre-verification comments.

On March 9, 2009, petitioner requested that the Department select another mandatory respondent in this review. On April 14, 2009, the Department declined to select another mandatory respondent because it was too late in the proceeding. See Memorandum to File from James Terpstra titled “Non-selection of addition respondent” dated April 14, 2009.

On May 4, 2009, petitioner made a submission requesting that the Department modify its model match methodology. On May 14, 2009, Navneet submitted a letter arguing that this change was submitted too late to be considered and that the proposed change was unwarranted. On May 19, 2009, petitioner submitted a letter arguing that it was not too late to propose this change and that the change was warranted.

On May 11, 2009, the Department published a notice of partial rescission with respect to Kejriwal and extended the time limit for issuing the preliminary results of this review by 120 days to September 30, 2009. See Certain Lined Paper Products from India: Notice of Partial Rescission of Antidumping Duty Administrative Review and Extension of Time Limit for the Preliminary Results of Antidumping Duty Administrative Review, 74 FR 21781 (May 11, 2009) (Rescission and Preliminary Extension Notice).

The Department conducted the cost verification from June 29, 2009, through July 3, 2009, and the sales verification from July 13, 2009, through July 17, 2009, in Mumbai, India. On July 27, 2009, the Department requested that Navneet provide an updated sales file to reflect the minor corrections presented to the sales verification team. On August 10, 2009, Navneet provided a revised U.S. sales file.

Period of Review

The POR is September 1, 2007, through August 31, 2008.

Scope of the Order

The scope of this order includes certain lined paper products, typically school supplies (for purposes of this scope definition, the actual use of or labeling these products as school supplies or non-school supplies is not a defining characteristic) composed of or including paper that incorporates straight horizontal and/or vertical lines on ten or more paper sheets (there shall be no minimum page requirement for loose leaf filler paper) including but not limited to such products as single- and multi-subject notebooks, composition books, wireless notebooks, loose leaf or glued filler paper, graph paper, and laboratory notebooks, and with the smaller dimension of the paper measuring 6 inches to 15 inches (inclusive) and the larger dimension of the paper measuring 83/4 inches to 15 inches (inclusive). Page dimensions are measured size (not advertised, stated, or “tear-out” size), and are measured as they appear in the product (i.e., stitched and folded pages in a notebook are measured by the size of the page as it appears in the notebook page, not the size of the unfolded paper). However, for measurement purposes, pages with tapered or rounded edges shall be measured at their longest and widest Start Printed Page 51560points. Subject lined paper products may be loose, packaged or bound using any binding method (other than case bound through the inclusion of binders board, a spine strip, and cover wrap). Subject merchandise may or may not contain any combination of a front cover, a rear cover, and/or backing of any composition, regardless of the inclusion of images or graphics on the cover, backing, or paper. Subject merchandise is within the scope of this order whether or not the lined paper and/or cover are hole punched, drilled, perforated, and/or reinforced. Subject merchandise may contain accessory or informational items including but not limited to pockets, tabs, dividers, closure devices, index cards, stencils, protractors, writing implements, reference materials such as mathematical tables, or printed items such as sticker sheets or miniature calendars, if such items are physically incorporated, included with, or attached to the product, cover and/or backing thereto.

Specifically excluded from the scope of this order are:

  • Unlined copy machine paper;
  • Writing pads with a backing (including but not limited to products commonly known as “tablets,” “note pads,” “legal pads,” and “quadrille pads”), provided that they do not have a front cover (whether permanent or removable). This exclusion does not apply to such writing pads if they consist of hole-punched or drilled filler paper;
  • Three-ring or multiple-ring binders, or notebook organizers incorporating such a ring binder provided that they do not include subject paper;
  • Index cards;
  • Printed books and other books that are case bound through the inclusion of binders board, a spine strip, and cover wrap;
  • Newspapers;
  • Pictures and photographs;
  • Desk and wall calendars and organizers (including but not limited to such products generally known as “office planners,” “time books,” and “appointment books”);
  • Telephone logs;
  • Address books;
  • Columnar pads & tablets, with or without covers, primarily suited for the recording of written numerical business data;
  • Lined business or office forms, including but not limited to: pre-printed business forms, lined invoice pads and paper, mailing and address labels, manifests, and shipping log books;
  • Lined continuous computer paper;
  • Boxed or packaged writing stationary (including but not limited to products commonly known as “fine business paper,” “parchment paper,” and “letterhead”), whether or not containing a lined header or decorative lines;
  • Stenographic pads (“steno pads”), Gregg ruled (“Gregg ruling” consists of a single- or double-margin vertical ruling line down the center of the page. For a six-inch by nine-inch stenographic pad, the ruling would be located approximately three inches from the left of the book), measuring 6 inches by 9 inches;

Also excluded from the scope of this order are the following trademarked products:

  • FlyTM lined paper products: A notebook, notebook organizer, loose or glued note paper, with papers that are printed with infrared reflective inks and readable only by a FlyTM pen-top computer. The product must bear the valid trademark FlyTM (products found to be bearing an invalidly licensed or used trademark are not excluded from the scope).
  • ZwipesTM: A notebook or notebook organizer made with a blended polyolefin writing surface as the cover and pocket surfaces of the notebook, suitable for writing using a specially-developed permanent marker and erase system (known as a ZwipesTM pen). This system allows the marker portion to mark the writing surface with a permanent ink. The eraser portion of the marker dispenses a solvent capable of solubilizing the permanent ink allowing the ink to be removed. The product must bear the valid trademark ZwipesTM (products found to be bearing an invalidly licensed or used trademark are not excluded from the scope).
  • FiveStar®AdvanceTM: A notebook or notebook organizer bound by a continuous spiral, or helical, wire and with plastic front and rear covers made of a blended polyolefin plastic material joined by 300 denier polyester, coated on the backside with PVC (poly vinyl chloride) coating, and extending the entire length of the spiral or helical wire. The polyolefin plastic covers are of specific thickness; front cover is 0.019 inches (within normal manufacturing tolerances) and rear cover is 0.028 inches (within normal manufacturing tolerances). Integral with the stitching that attaches the polyester spine covering, is captured both ends of a 1” wide elastic fabric band. This band is located 23/8” from the top of the front plastic cover and provides pen or pencil storage. Both ends of the spiral wire are cut and then bent backwards to overlap with the previous coil but specifically outside the coil diameter but inside the polyester covering. During construction, the polyester covering is sewn to the front and rear covers face to face (outside to outside) so that when the book is closed, the stitching is concealed from the outside. Both free ends (the ends not sewn to the cover and back) are stitched with a turned edge construction. The flexible polyester material forms a covering over the spiral wire to protect it and provide a comfortable grip on the product. The product must bear the valid trademarks FiveStar®AdvanceTM (products found to be bearing an invalidly licensed or used trademark are not excluded from the scope).
  • FiveStar FlexTM: A notebook, a notebook organizer, or binder with plastic polyolefin front and rear covers joined by 300 denier polyester spine cover extending the entire length of the spine and bound by a 3-ring plastic fixture. The polyolefin plastic covers are of a specific thickness; front cover is 0.019 inches (within normal manufacturing tolerances) and rear cover is 0.028 inches (within normal manufacturing tolerances). During construction, the polyester covering is sewn to the front cover face to face (outside to outside) so that when the book is closed, the stitching is concealed from the outside. During construction, the polyester cover is sewn to the back cover with the outside of the polyester spine cover to the inside back cover. Both free ends (the ends not sewn to the cover and back) are stitched with a turned edge construction. Each ring within the fixture is comprised of a flexible strap portion that snaps into a stationary post which forms a closed binding ring. The ring fixture is riveted with six metal rivets and sewn to the back plastic cover and is specifically positioned on the outside back cover. The product must bear the valid trademark FiveStar FlexTM (products found to be bearing an invalidly licensed or used trademark are not excluded from the scope).

Merchandise subject to this order is typically imported under headings 4810.22.5044, 4811.90.9050, 4811.90.9090, 4820.10.2010, 4820.10.2020, 4820.10.2030, 4820.10.2040, 4820.10.2050, 4820.10.2060, and 4820.10.4000 of the Harmonized Tariff Schedule of the United States (HTSUS). The HTSUS headings are provided for convenience and customs purposes; however, the written description of the scope of the order is dispositive.Start Printed Page 51561

Model Match Methodology

On May 4, 2009, petitioner requested that the Department modify its model match methodology. We determine that it would be inappropriate to make such a substantial change in the model match methodology at this late stage in the administrative review. The physical characteristics used in the model matching hierarchy were established during the LTFV investigation in this proceeding by the Department, in consultation with all parties.[4] The Department continued to use this model match methodology in the first review of this proceeding.[5] In order to modify the model match methodology, according to section 782(g) of the Tariff Act of 1930, as amended (the Act), the Department must allow “reasonable opportunity” for interested parties to comment. See Koyo Seiko, 516 F. Supp. 2d 1323 at 1333 (Ct. Int'l Trade 2007); see also Certain Frozen and Canned Warmwater Shrimp from India: Final Results of Administrative Review, and accompanying Issues and Decision Memorandum at Comment 4 (Shrimp from India), 74 FR 33409 (July 13, 2009). It is the Department's practice to allow sufficient time to solicit comments from all parties, consider the merits of the proposed revisions, including an opportunity for the Department to clarify aspects of the party's proposal and the information and basis that supports the proposal.[6] In the past, the Department has revised model match characteristics prior to the issuance of questionnaires.[7]

In this case, petitioner submitted its request for a change in model match methodology on May 4, 2009, which was six months after the initiation of this review and 29 days before the scheduled date of the preliminary results for this review. At the time of the request, the Department had already issued the original and first supplemental questionnaires to respondents based on the same model-match methodology established in the original investigation and the first administrative review. Even with a subsequent extension of the deadline for completing the preliminary results, the timing of the request did not allow the Department sufficient time to solicit comments from all interested parties, to finalize the specifics of the model match changes, and to issue a revised questionnaire to respondents in time for the preliminary results. Moreover, parties have already committed significant resources to preparing their questionnaire responses, and petitioner has commented on same, using the original model match methodology. To change the methodology at this time would require the collection of additional information and place an increased burden on respondents.[8] Therefore, consistent with the Department's practice, the Department agrees, in part, with Navneet that petitioner's request for changing the model match methodology in this review was submitted too late to be considered. For purposes of these preliminary results of this review, we have continued to rely on our established model matching methodology in this case. The Department will consider the petitioner's arguments if raised at an early date in the next proceeding.

Verification

As provided in section 782(i) of the Act, we have verified information provided by Navneet in the administrative review of the order on subject merchandise from India using standard verification procedures, including the examination of relevant sales and cost information, financial records, and the selection and review of original documentation containing relevant information. Our verification results are outlined in the public version of our verification report dated August 17, 2009, which is on file in the CRU.

During the sales verification, Navneet reported four minor corrections which the Department has accepted. In addition, the Department made findings with respect to bonus pack sales, retail merchandising, and market research selling activity in the United States. See the Department's Verification of Sales Responses of Navneet Publications (India) Ltd., in the Antidumping Review of Certain Lined Paper Products from India (Sales Verification Report), dated August 17, 2009, at page 2 for a full discussion.

Application of Facts Available

Section 776(a) of the Act provides that the Department will apply “facts otherwise available” if, inter alia, necessary information is not available on the record or an interested party: (1) Withholds information that has been requested by the Department; (2) fails to provide such information within the deadlines established, or in the form or manner requested by the Department, Start Printed Page 51562subject to subsections (c)(1) and (e) of section 782 of the Act; (3) significantly impedes a proceeding; or (4) provides such information, but the information cannot be verified.

As discussed in the “Background” section above, on November 25, 2008, the Department selected Kejriwal and Blue Bird as companies to be individually examined in this review, and on December 4, 2008, the Department issued its original questionnaire to Kejriwal and Blue Bird. See the Respondent Selection Memo and the Department's December 4, 2008, Letter to Kejriwal and Blue Bird. The review of Kejriwal has since been rescinded. See Rescission and Preliminary Extension Notice.

With respect to Blue Bird, the due date for the original questionnaire response was January 12, 2009. As noted in footnote 3 and in the “Background” section, above, Blue Bird made three extension requests (five-weeks, two-weeks, and 13-weeks, respectively) to respond to the original questionnaire. The Department granted a three-week and a two-week extension, respectively, in response to Blue Bird's first and second extension requests. In response to Blue Bird's third request for a 13-week extension, however, the Department determined that it could only grant a maximum extension of two additional weeks because (1) the Department had previously granted Blue Bird two extensions for a total of five weeks; and (2) Blue Bird's third extension request was impractical because the requested due date, May 18, 2009, was only 15 days before the original scheduled date of the preliminary results for this review.[9] The revised deadline for Blue Bird to respond to the Department's Sections B through D questionnaire was March 3, 2009. However, despite multiple extensions, Blue Bird never submitted any responses to the Department's Sections B through D questionnaire. By failing to respond to the Department's requests, Blue Bird withheld requested information and significantly impeded the proceeding. Therefore, pursuant to sections 776(a)(2)(A) and (C) of the Act, the Department preliminarily finds that the use of facts available for Blue Bird is appropriate.

According to section 776(b) of the Act, if the Department finds that an interested party fails to cooperate by not acting to the best of its ability to comply with requests for information, the Department may use an inference that is adverse to the interests of that party in selecting from the facts otherwise available. See also India Lined Paper AR1 Final; Notice of Final Results of Antidumping Duty Administrative Review: Stainless Steel Bar from India, 70 FR 54023, 54025-26 (September 13, 2005); and Notice of Final Determination of Sales at Less Than Fair Value and Final Negative Critical Circumstances: Carbon and Certain Alloy Steel Wire Rod from Brazil, 67 FR 55792, 55794-96 (August 30, 2002). Adverse inferences are appropriate “to ensure that the party does not obtain a more favorable result by failing to cooperate than if it had cooperated fully.” See Statement of Administrative Action accompanying the Uruguay Round Agreements Act, H.R. Rep. No. 103-316, Vol. 1, at 870 (1994) (SAA), reprinted in 1994 U.S.C.C.A.N. 4040, 4198-99. Furthermore, “affirmative evidence of bad faith on the part of a respondent is not required before the Department may make an adverse inference.” See Antidumping Duties; Countervailing Duties; Final Rule, 62 FR 27296, 27340 (May 19, 1997); see also Nippon Steel Corp. v. United States, 337 F.3d 1373, 1382-83 (Fed. Cir. 2003) (Nippon).

In this case, the Department granted Blue Bird three extensions for a total of seven weeks. Despite the clear explanation in the Department's February 13, 2009, letter concerning its antidumping procedures and time limits imposed by the statute, and despite multiple extensions granted by the Department, Blue Bird never responded to the Department's Section B through D questionnaires. Not only did it not take the opportunity to respond to the Department's questionnaire, Blue Bird ceased to communicate with the Department after its third extension request. Therefore, we preliminarily find that Blue Bird did not act to the best of its ability in this proceeding, within the meaning of section 776(b) of the Act, because it failed to respond to the Department's requests for information and failed to provide any additional information. Thus, an adverse inference is warranted in selecting from the facts otherwise available with respect to Blue Bird. See Nippon, 337 F.3d at 1382-83.

Section 776(b) of the Act provides that the Department may use as AFA information derived from: (1) The petition; (2) the final determination in the investigation; (3) any previous review; or (4) any other information placed on the record. The Department's practice, when selecting an AFA rate from among the possible sources of information, has been to ensure that the margin is sufficiently adverse “as to effectuate the statutory purposes of the adverse facts available rule to induce respondents to provide the Department with complete and accurate information in a timely manner.” See, e.g., Certain Steel Concrete Reinforcing Bars from Turkey; Final Results and Rescission of Antidumping Duty Administrative Review in Part, 71 FR 65082, 65084 (November 7, 2006).

In order to ensure that the margin is sufficiently adverse so as to induce cooperation, we have preliminarily assigned a rate of 72.96 percent, which is the highest transaction-specific rate calculated for a respondent in this review. Since this is not secondary information, we do not have to corroborate this rate pursuant to section 776(c) of the Act. The Department finds that this rate is sufficiently high to ensure that the respondent does not benefit from its failure to cooperate and to encourage participation in future segments of this proceeding in accordance with section 776(b) of the Act. When the Department selects a transaction-specific margin to use as AFA it analyzes the underlying transaction to ensure that it is not aberrational. See, e.g., Magnesium Metal From the Russian Federation: Final Results and Partial Rescission of Antidumping Duty Administrative Review, 74 FR 39919 (August 10, 2009). For example, if the highest margin involves a transaction with an unusually small quantity, or involves an unusual product, the Department may reject it as aberrational. However, none of these factors are present for the margins in this review. See Selection of AFA Margin for Blue Bird for our analysis of the relevant transactions.

Product Comparisons

In accordance with section 771(16) of the Act, all products produced by Navneet covered by the description in the “Scope of the Order” section above and sold in India during the POR are considered to be foreign like products for purposes of determining appropriate product comparisons to U.S. sales. We have relied on eight criteria to match Start Printed Page 51563U.S. sales of subject merchandise to comparison market sales of the foreign like product: (1) Form, (2) paper volume, (3) brightness, (4) binding type, (5) cover material, (6) back material, (7) number of inserts, and (8) insert material. Where there were no sales of identical merchandise in the home market made in the ordinary course of trade to compare to U.S. sales, we compared U.S. sales to the next most similar foreign like product on the basis of the characteristics listed above.

For purposes of the preliminary results, where appropriate, we have calculated the adjustment for differences in merchandise based on the difference in the variable cost of manufacturing (VCOM) between each U.S. model and the most similar home market model selected for comparison.

Normal Value Comparisons

To determine whether sales of CLPP from Navneet to the United States were made at less than NV, we compared EP to the NV, as described in the “Export Price” and “Normal Value” sections of this notice. In accordance with section 777A(d)(2) of the Act, we calculated monthly weighted-average prices for NV and compared these to individual U.S. transaction prices. We used the information provide by Navneet, including certain minor changes from verification. See Sales Verification Report at page 2.

Export Price

For all U.S. sales made by Navneet, we used the EP methodology, in accordance with section 772(a) of the Act, because the subject merchandise was sold directly to the first unaffiliated purchaser in the United States prior to importation and constructed export price methodology was not warranted based on the facts of record. We based EP on packed prices to the first unaffiliated purchaser in the United States. Navneet reported that it did not offer any discounts or rebates in the U.S. market; therefore, the EP prices were not reduced to reflect discounts or rebates.

In accordance with section 772(c)(2)(A) of the Act, we made deductions, where appropriate, for movement expenses including foreign inland freight from plant/warehouse to the port of exportation, foreign brokerage and handling, and foreign bill of lading charges. In addition, we deducted the costs for the sales of non-subject merchandise that were included in the value pack sales, where appropriate. We also increased EP by an amount equal to the countervailing duty (CVD) rate attributed to export subsidies in the most recently completed countervailing duty administrative review of CLPP from India, in accordance with section 772(c)(1)(C) of the Act.

Normal Value

Selection of Comparison Market

To determine whether there was a sufficient volume of sales in the home market to serve as a viable basis for calculating NV, we compared Navneet's volume of home market sales of the foreign like product to the volume of its U.S. sales of the subject merchandise. Pursuant to sections 773(a)(1)(B) and 773(a)(1)(C) of the Act, because Navneet had an aggregate volume of home market sales of the foreign like product that was greater than five percent of its aggregate volume of U.S. sales of the subject merchandise, we determined that the home market was viable.

Level of Trade

In accordance with section 773(a)(1)(B) of the Act, to the extent practicable, the Department determines NV based on sales in the comparison market at the same level of trade (LOT) as the EP or CEP transactions. In order to perform the LOT analysis, we examine the selling functions provided to different customer categories to evaluate the LOT in a particular market. Specifically, we compare the selling functions performed for home market sales with those performed with respect to the EP or CEP transactions, after deductions for economic activities occurring in the United States, pursuant to section 772(d) of the Act and 19 CFR 351.412, to determine if the home market LOT constituted a different LOT than the EP or CEP LOT.

Consistent with 19 CFR 351.412, to determine whether comparison market sales were at a different LOT, we examined stages in the marketing process and selling functions along the chain of distribution between the producer and the unaffiliated (or arm's-length) customers. If the comparison market sales were at a different LOT and the differences affect 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 will make an LOT adjustment under section 773(a)(7)(A) of the Act.

Navneet reported that it has five channels of distribution or five LOTs in the home market (i.e., distributors with merchandising—full service; distributors with no merchandising—limited service; retail chain stores; institutional end-users who purchase materials for their own use; and schools that purchase customized products for their own use and for selling to students).

Section 351.412(c)(2) of the Department's regulations provides that the Department will determine that sales are made at different LOTs if they are made at different marketing stages (or their equivalent). Substantial differences in selling activities are a necessary, but not a sufficient, condition for determining that there is a difference in the stage of marketing. Some overlap in selling activities will not preclude a determination that sales are at different stages of marketing.

We disagree with Navneet that there are five LOTs in the home market. Our analysis of the selling activities for Navneet shows that Navneet performs similar selling activities for different customer categories, although some of the activities were at different levels of intensity. Moreover, some selling activities within the claimed LOT1 are at a higher level of intensity than the same selling activities in the claimed LOT2 through LOT5. In addition, there is overlap among the channels of distribution for the different customer categories between LOT1 and LOT2 through LOT5 customers. Although there are differences in intensity of selling activities among LOT2 through LOT5 customers, this, in and of itself, does not show a substantial difference in selling activities that would form the basis for finding distinct LOTs. See, e.g., Certain Frozen Warmwater Shrimp from Ecuador: Final Results of Antidumping Duty Administrative Review, 72 FR 52070 (September 12, 2007), and accompanying Issues and Decision Memorandum at Comment 4. The differences in Navneet's selling activities chart indicate that there are two LOTs in the home market: (1) LOT1 and (2) a combined LOT2, which is comprised of Navneet's reported LOT2 through LOT5. The selling activities in the combined LOT2 in the home market are comparable to the selling activities in the LOT in the U. S. market. Due to the proprietary nature of this issue, please refer to Navneet's Preliminary Calculation Memorandum for further discussion, dated September 30, 2009.

In the U.S. market, Navneet reported that its sales were made through one channel of distribution to one customer category, and therefore, at one LOT. The Department has determined that Navneet's home market sales in the combined LOT2 are at the same stage of marketing as the U.S. sales. We only compared home market sales in the combined LOT2 to the U.S. sales and determined that no LOT adjustment for Start Printed Page 51564Navneet's sales to the United States was necessary.

Cost of Production Analysis

A “sales-below-cost” analysis was conducted in the investigation with respect to Navneet, pursuant to section 773(b) of the Act, because there were reasonable grounds to “believe or suspect” that sales of the foreign like product have been made below the cost of production (COP). However, in the investigation, the Department found that Navneet failed to provide the required information in the manner requested and therefore determined that Navneet did not act to the best of its ability. Consequently, in selecting from among the facts otherwise available, the Department found that the use of AFA was warranted under section 776(a)(2) of the Act. See India Lined Paper Investigation Final. In the first administrative review, Navneet was a non-selected company. See India Lined Paper AR1 Final.

Because Navneet failed to act to the best of its ability in the only proceeding in which it was individually examined by the Department, we therefore have reasonable grounds to believe or suspect, pursuant to section 773(b)(2)(A)(ii) of the Act, that sales of the foreign like product under consideration for the determination of NV in this review may have been made at prices below COP. Thus, pursuant to section 773(b)(1) of the Act, we examined whether sales from Navneet in the home market were made at prices below the COP.

In accordance with section 773(b)(3) of the Act, we calculated a weighted-average COP based on the sum of the cost of materials and fabrication for the foreign like product, plus amounts for selling, general and administrative expenses (SG&A) and packing expenses. For these preliminary results, we have adjusted Navneet's reported cost of manufacturing to include common production costs not allocated to divisions and other common production costs of the stationery division not allocated to subdivisions. We have calculated the G&A expense for each control number (CONNUM) based on the G&A ratio submitted by Navneet in its May 26, 2009, COP/constructed value (CV) file. As Navneet did not incur net financial expense during fiscal year 2008, we excluded the interest expense (INTEX) field from the calculation of COP for each CONNUM. We calculated the COP and CV of all CONNUMs sold in the home market to exclude the central excise tax on raw material inputs. For further details, see the Memorandum to Neal M. Halper, Director, Office of Accounting, through Michael P. Martin, Lead Accountant, from Robert B. Greger, Senior Accountant, titled “Antidumping Duty Administrative Review of Certain Lined Paper Products from India: Cost of Production and Constructed Value Calculation Adjustments for the Preliminary Results—Navneet Publications (India) Ltd.,” dated September 30, 2009.

Test of Comparison Market Prices

As required under section 773(b)(2) of the Act, we compared the weighted-average COP to the per-unit price of the comparison market sales of the foreign like product, to determine whether these sales were made at prices below the COP within an extended period of time in substantial quantities, and whether such prices were sufficient to permit the recovery of all costs within a reasonable period of time. We determined the net comparison market prices for the below-cost test by subtracting from the gross unit price any applicable movement charges, discounts, rebates, direct and indirect selling expenses and packing expenses which were excluded from COP for comparison purposes. In addition, we made an adjustment for excise taxes that were paid on certain inputs that were included in the price. See also excise tax discussion below.

Results of COP Test

Pursuant to sections 773(b)(2)(B) and (C)(i) of the Act, where less than 20 percent of sales of a given product during the POR were at prices less than the COP, we did not disregard any below-cost sales of that product because we determined that the below-cost sales were not made in “substantial quantities” within an extended period of time. Where 20 percent or more of Navneet's sales of a given product during the POR were at prices less than the COP, we determined such sales to have been made in “substantial quantities.” See sections 773(b)(2)(B) and (C) of the Act. Further, such sales were made within an extended period of time, in accordance with section 773(b)(2)(B) of the Act. In such cases, because we compared prices to POR-average costs, we also determined that such sales were not made at prices which would permit recovery of all costs within a reasonable period of time, in accordance with section 773(b)(2)(D) of the Act. Therefore, for purposes of this administrative review, we disregarded below-cost sales of a given product and used the remaining sales as the basis for determining NV, in accordance with section 773(b)(1) of the Act.

Calculation of Normal Value Based on Comparison Market Prices

We based home market prices on packed prices to unaffiliated purchasers in India. Where appropriate, in accordance with section 773(a)(6)(B) of the Act, we deducted from the starting price inland freight. Pursuant to 19 CFR 351.401(c), we deducted rebates and discounts. In accordance with sections 773(a)(6)(A) and (B) of the Act, we added U.S. packing costs and deducted comparison market packing, respectively. We also made adjustments for Navneet, in accordance with 19 CFR 351.410(e), for indirect selling expenses incurred in the home market or the United States where commissions were granted on sales in one market but not in the other, the (“commission offset”). Specifically, where commissions are incurred in one market, but not in the other, we will limit the amount of such allowance to the amount of either the selling expenses incurred in the one market or the commissions allowed in the other market, whichever is less.

In addition, for comparisons made to EP sales, we made adjustments for differences in circumstances of sale (COS) pursuant to section 773(a)(6)(C)(iii) of the Act and 19 CFR 351.410(b) by deducting direct selling expenses incurred for home market sales (credit expense) and adding U.S. direct selling expenses (credit, bank charges, and commissions directly linked to sales transactions). In accordance with section 773(a)(1)(B)(i) of the Act, we based NV on LOTH2 sales. See the “Level of Trade” section above.

Finally, consistent with section 773(a)(6)(B)(iii) of the Act, we made an adjustment for central excise taxes that Navneet paid on raw material inputs used to produce merchandise that was sold in the home market that were not paid on the same inputs used to produce merchandise that was exported from India. Under Indian law, Navneet was prohibited from charging this excise tax on sales of school supplies. In addition, the excise tax that Navneet paid on inputs into school supplies was not refunded and was not otherwise recovered by Navneet. Therefore, we find the tax is included in the price and adjustment is warranted. For products other than school supplies, Navneet reported home market selling prices net of the excise tax.

Currency Conversion

We made currency conversions into U.S. dollars in accordance with section Start Printed Page 51565773A(a) of the Act based on exchange rates in effect on the dates of the U.S. sales, as certified by the Federal Reserve Bank.

Non-Selected Rate

The statute and the Department's regulations do not directly address the establishment of rates to be applied to companies not selected for individual examination where the Department limited its examination in an administrative review pursuant to section 777A(c)(2) of the Act. However, the Department normally determines the rates for non-selected companies in reviews in a manner that is consistent with section 735(c)(5) of the Act. Section 735(c)(5)(A) of the Act instructs the Department to calculate an all-others rate using the weighted average of the dumping margins established for the producers/exporters individually examined, excluding any zero or de minimis margins or any margins based on total facts available.

In this review, Navneet is the only respondent for which the Department has calculated a company-specific rate that is based on the average of the margins calculated during the review, other than those which were zero, de minimis, or based on total facts available. Therefore, for purposes of these preliminary results, the 22 remaining non-selected companies subject to this review will receive the rate calculated for Navneet in this review. See also the “Suspension of Liquidation” section, below.

Preliminary Results of the Review

We preliminarily determine that weighted-average dumping margins exist for the respondents for the period September 1, 2007, through August 31, 2008, as follows:

Manufacturer/exporterWeighted average margin (percent)
Navneet Publications (India) Ltd.2.08
Blue Bird72.96

Review-Specific Average Rate Applicable to the 22 Non-Selected Companies Subject to This Review:

Manufacturer/exporterWeighted average margin (percent)
Agility Logistics Pvt. Ltd.2.08
Ceal Shipping Logistics Pvt. Ltd.2.08
Cello International Pvt. Ltd.2.08
Corporate Stationary Pvt. Ltd.2.08
Creative Divya2.08
Exel India Pvt. Ltd.2.08
FFI International2.08
Global Art India Inc.2.08
International Greetings Pvt. Ltd.2.08
Karim General Handmade Paper DIAR2.08
M/S Super ImpEx.2.08
Magic International2.08
Marigold ExIm Pvt. Ltd.2.08
Marisa International2.08
Pentagon Waterlines Pvt. Ltd.2.08
Pioneer Stationery Pvt. Ltd.2.08
Rajvansh International2.08
Riddhi Enterprises2.08
SAB International2.08
TKS Overseas2.08
Unlimited Accessories Worldwide2.08
V. Joshi Co.2.08

Public Comment

The Department will disclose calculations performed within five days of the date of publication of this notice to the parties to this proceeding in accordance with 19 CFR 351.224(b). Interested parties may submit case briefs no later than 30 days after the date of publication of these preliminary results of review. See 19 CFR 351.309(c)(ii). Rebuttal briefs are limited to issues raised in the case briefs and may be filed no later than five days after the time limit for filing the case briefs. See 19 CFR 351.309(d). Parties submitting arguments in this proceeding 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, in accordance with 19 CFR 351.309(d)(2). Further, parties submitting case and/or rebuttal briefs are requested to provide the Department with an additional electronic copy of the public version of any such comments on a computer diskette. Case and rebuttal briefs must be served on interested parties in accordance with 19 CFR 351.303(f).

An interested party may request a hearing within 30 days of publication of these preliminary results. See 19 CFR 351.310(c). Any hearing, if requested, ordinarily will be held two days after the due date of the rebuttal briefs in accordance with 19 CFR 351.310(d)(1). The Department will issue the final results of this administrative review, which will include the results of its analysis of issues raised in any such comments, or at a hearing, if requested, within 120 days of publication of these preliminary results, unless extended. See section 751(a)(3)(A) of the Act, and 19 CFR 351.213(h).

Assessment Rate

Upon completion of the final results of this administrative review, the Department shall determine, and CBP shall assess, antidumping duties on all appropriate entries. Pursuant to 19 CFR 351.212(b)(1), the Department will calculate importer-specific assessment rates for each respondent based on the ratio of the total amount of antidumping duties calculated for the examined sales to the total entered value of those sales. Where the respondent did not report the entered value for U.S. sales, we have calculated importer-specific assessment rates for the merchandise in question by aggregating the dumping margins calculated for all U.S. sales to each importer and dividing this amount by the total quantity of those sales. To determine whether the duty assessment rates were de minimis, in accordance with the requirement set forth in 19 CFR 351.106(c)(2), we calculated importer-specific ad valorem rates based on the estimated entered value. Where the assessment rate is above de minimis, we will instruct CBP to assess duties on all entries of subject merchandise by that importer. Pursuant to 19 CFR 351.106(c)(2), we will instruct CBP to liquidate without regard to antidumping duties any entries for which the assessment rate is de minimis (i.e., less than 0.50 percent). The Department intends to issue assessment instructions directly to CBP 15 days after publication of the final results of this review.

The Department clarified its “automatic assessment” regulation on May 6, 2003. See Antidumping and Countervailing Duty Proceedings: Assessment of Antidumping Duties, 68 FR 23954 (May 6, 2003). This clarification will apply to entries of subject merchandise during the POR produced by the respondents subject to this review for which the reviewed companies did not know that the merchandise which it sold to an intermediary (e.g., a reseller, trading company, or exporter) was destined for the United States. In such instances, we will instruct CBP to liquidate unreviewed entries at the all-others rate if there is no rate for the intermediary involved in the transaction. For a full discussion of this clarification, see id.

Cash Deposit Requirements

To calculate the cash deposit rate for Navneet, we divided its total dumping margin by the total net value of its sales during the review period. For the responsive companies which were not selected for individual review, we have calculated a cash deposit rate based on the simple average of the cash deposit Start Printed Page 51566rates calculated for the companies selected for individual review. In this instance, there is only one non-AFA rate which we applied.

The following deposit rates will be effective upon publication of the final results of this administrative review for all shipments of CLPP 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 Act: (1) The cash deposit rate for companies subject to this review 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, no cash deposit will be required; (2) for previously reviewed or investigated companies not listed above, the cash deposit rate will continue to be the company-specific rate published for the most recent final results for a review in which that manufacturer or exporter participated; (3) if the exporter is not a firm covered in this review, a prior review, or the original less-than-fair-value (LTFV) investigation, but the manufacturer is, the cash deposit rate will be the rate established for the most recent final results for the manufacturer of the merchandise; and (4) if neither the exporter nor the manufacturer is a firm covered in this or any previous review conducted by the Department, the cash deposit rate will be 3.91 percent, the all-others rate established in the LTFV investigation. See Lined Paper Orders.[10] These cash deposit requirements, when imposed, shall remain in effect until further notice.

Notification to Importers

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.

These preliminary results of administrative review are issued and published in accordance with sections 751(a)(1) and 777(i)(1) of the Act and 19 CFR 351.221(b)(4).

Start Signature

Dated: September 30, 2009.

Ronald K. Lorentzen,

Acting Assistant Secretary for Import Administration.

End Signature End Further Info End Preamble

Footnotes

1.  On September 29, 2008, the Department received a timely request for an administrative review filed on behalf of Kejriwal Paper Limited and a timely request for an administrative review filed on behalf of Navneet. On September 30, 2008, the Department received a timely request for an administrative review of the following 25 companies, filed on behalf of the Association of American School Paper Suppliers (the Association or Petitioner), a domestic interested party: Agility Logistics Pvt. Ltd., Blue Bird, Ceal Shipping Logistics Pvt. Ltd., Cello International Pvt. Ltd., Corporate Stationary Pvt. Ltd., Creative Divya, Exel India Pvt. Ltd., FFI International, Global Art India Inc., International Greetings Pvt. Ltd., Karim General Handmade Paper DIAR, Kejriwal Exports, M/S Super ImpEx., Magic International, Marigold ExIm Pvt. Ltd., Marisa International, Navneet Publications (India) Ltd., Pentagon Waterlines Pvt. Ltd., Pioneer Stationery Pvt. Ltd., Rajvansh International, Riddhi Enterprises, SAB International, TKS Overseas, Unlimited Accessories Worldwide, and V. Joshi Co.

We inadvertently listed Kejriwal Paper Limited and Kejriwal Exports separately in our notice of initiation of this review. However, in Kejriwal Paper Limited's response to the Department's questionnaire, Kejriwal Exports was identified as a division of Kejriwal Paper Limited, and not as a separate company. Therefore, Kejriwal Exports should not be assigned a separate rate. Accordingly, the Department's initiation is on Kejriwal Paper Limited and Kejriwal Exports, (collectively Kejriwal Paper Limited). See Initiation Notice.

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2.  See also Initiation of Antidumping and Countervailing Duty Administrative Reviews, 73 FR 70964 (November 24, 2008) at footnote 1, in which the Department states, “{w}e note that the Department erred by inadvertently including the manufacturer/exporter name: “Ria ImpEx Pvt. Ltd.” in the prior initiation notice under case number A-533-843 for the period of review: 9/1/07-8/31/08.” See 73 FR 64305 (October 29, 2008). The Department did not receive a timely request to review Ria ImpEx Pvt. Ltd. for case number A-533-843, therefore, the Department retracts its initiation of an administrative review of the antidumping order with respect to Ria ImpEx Pvt. Ltd. for the POR.

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3.  On January 9, 2009, in response to Blue Bird's January 8, 2009, letter requesting a five-week extension until February 16, 2009, to file a response to the Department's original questionnaire, the Department, due to time constraints, granted a three-week extension until February 3, 2009 (Extension 1). Subsequently, on January 29, 2009, in response to Blue Bird's January 23, 2009, letter requesting a two-week extension until February 16, 2009, to file a response to Sections B through D of the Department's original questionnaire, the Department granted a full extension to Blue Bird to respond to Sections B through D until February 16, 2009 (Extension 2).

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4.  See, e.g., Notice of Preliminary Determination of Sales at Less Than Fair Value, Postponement of Final Determination, and Affirmative Preliminary Determination of Critical Circumstances in Part: Certain Lined Paper Products from India, 71 FR 19706 (April 17, 2006), unchanged in the Final Determination of Sales at Less Than Fair Value, and Negative Determination of Critical Circumstances: Certain Lined Paper Products from India (India Lined Paper Investigation Final), 71 FR 45012 (August 8, 2006).

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5.  See Certain Lined Paper Products from India: Preliminary Results of the First Antidumping Duty Administrative Review, 73 FR 58548 (October 7, 2008), unchanged in the Notice of Final Results of the First Antidumping Duty Administrative Review (India Lined Paper AR1 Final) 74 FR 17149 (April 14, 2009).

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6.  See also Honey From Argentina: Final Results of Antidumping Duty Administrative Review, 69 FR 30283 (May 27, 2004), and accompanying Issues and Decision Memorandum at Comment 15 (declining to address arguments for changing the model matching methodology raised for the first time in the case brief); Certain Small Diameter Carbon and Alloy Seamless Standard, Line, and Pressure Pipe From Romania: Final Results of Antidumping Duty Administrative Review and Final Determination Not To Revoke Order in Part, 70 FR 7237 (Feb. 11, 2005), and accompanying Issues and Decision Memorandum at Comment 10 (stating that arguments on the model matching methodology should be presented early in the case).

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7.  Structural Steel Beams from Korea: Notice of Final Results of Antidumping Duty Administrative Review, 70 FR 6837 (Feb. 9, 2005), and accompanying Issues and Decision Memorandum at Comment 1 (noting that parties were invited to comment prior to the issuance of questionnaires in the third administrative review on model matching changes which initially had been raised too late in the second administrative review).

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8.  This process often takes a significant amount of time, and may span more than one review period before being implemented. See, e.g., Antifriction Bearings and Parts Thereof from France, Germany, Italy, Japan, Singapore, and the United Kingdom: Final Results of Antidumping Duty Administrative Reviews, Rescission of Administrative Reviews in Part, and Determination To Revoke Order in Part (Ball Bearings), 69 FR 55574 (September 15, 2004), and accompanying Issues and Decision Memorandum at Comment 2. The Department declined to consider the issue of making a fundamental change to the model match methodology when it was first raised in the 2002-2003 administrative review. Instead the Department decided to allow further time for comment and analysis of the issue in the context of the next administrative review and to ensure that all parties in the companion bearings cases were provided ample opportunity to consider and provide comment on the proposed change to the model match methodology. See the accompanying memorandum titled “Ball Bearings (and Parts Thereof) From France, Germany, Italy, Japan, Singapore, and the United Kingdom—Model-Match Methodology” to James J. Jochum, Assistant Secretary for Import Administration, from Jeffrey A. May, Deputy Assistant Secretary for Import Administration, dated December 3, 2003, which is being placed on the record of this segment of the proceeding in the Central Records Unit (CRU) in room 1117 of the Department's main building. See also Certain Pasta from Italy: Notice of Preliminary Results of Twelfth Antidumping Duty Administrative Review (Pasta from Italy) 74 FR 39285 (August 6, 2009), and the accompanying memorandum, titled “Antidumping Duty Administrative Review of Certain Pasta from Italy: Preliminary Model Match Clarification on Pasta Wheat Code Classifications” to John M. Andersen, Acting Deputy Assistant Secretary, through Melissa Skinner, Office Director, AD/CVD Operations 3, from James Terpstra, Program Manager, AD/CVD Operations 3 for Antidumping and Countervailing Duty Operations, dated July 31, 2009, which is being placed on the record of this segment of the proceeding.

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9.  In its letter to Blue Bird dated February 13, 2009, the Department further stated that it could only grant a two-week extension rather than a 13-week extension because “prior to issuing the preliminary results, the Department must have complete, reliable, and accurate sales and costs information submitted by Blue Bird. In addition, the Department must have adequate time to review and analyze such sales and costs information and issue and analyze responses to any necessary supplemental questionnaires prior to issuance of the preliminary results. Further, because Blue Bird has not been reviewed previously, the Department planned to conduct verification in this segment of the proceeding. Therefore, it is impracticable for the Department to grant Blue Bird a three-month extension until May 18, 2009, which comes 15 days before the scheduled date for issuance of the preliminary results.”

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10.  See Notice of Amended Final Determination of Sales at Less Than Fair Value: Certain Lined Paper Products from the People's Republic of China; Notice of Antidumping Duty Orders: Certain Lined Paper Products from India, Indonesia and the People's Republic of China; and Notice of Countervailing Duty Orders: Certain Lined Paper Products from India and Indonesia, 71 FR 56949 (September 28, 2006) (Lined Paper Orders).

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[FR Doc. E9-24210 Filed 10-6-09; 8:45 am]

BILLING CODE 3510-DS-P