Certain Forged Stainless Steel Flanges From India; Preliminary Results of New Shipper Review

AGENCY:

Import Administration, International Trade Administration, Department of Commerce.

ACTION:

Notice of preliminary results of new shipper review.

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 (A-533-809) manufactured by Metal Forgings Private Limited/Metal Rings and Bearing Races Limited (Metal Forgings). The period of review (POR) covers the period January 1, 2001 through July 31, 2001. We preliminarily determine that Metal Forgings made no sales of stainless steel flanges below the normal value (NV).

EFFECTIVE DATE:

September 27, 2002.

FOR FURTHER INFORMATION CONTACT:

Thomas Killiam, Mike Heaney, or Robert James, AD/CVD Enforcement, Group III, Import Administration, International Trade Administration, U.S. Department of Commerce, 14th Street and Constitution Avenue NW., Washington DC 20230, telephone (202) 482-5222, (202 482-4475, or (202 482-0649, respectively.

Applicable Statute and Regulations

All citations to the Tariff Act of 1930, as amended (the Tariff Act) are references to the provisions effective January 1, 1995, the effective date of the amendments made to the Tariff Act by the Uruguay Round Agreement Act (URAA), and all citations to the Department's regulations are to 19 CFR Part 351 (April 1, 2001).

SUPPLEMENTARY INFORMATION:

Background

On February 9, 1994, the Department published the antidumping duty order on stainless steel flanges from India (59 FR 5994). On November 29, 2001, in response to a timely request by Metal Forgings, the Department published the notice of initiation of this new shipper review of Metal Forgings covering the period January 1, 2001 through July 31, 2001 (66 FR 59568). A noted in the initiation notice, pursuant to 19 CFR 351.214(b), Metal Forgings certified in its August 31, 2001 submission that it did not export subject merchandise to the United States during the period of the investigation (POI) (July 1, 1992 through December 31, 1992), and that it was not affiliated with any exporter or producer of the subject merchandise to the United States during the POI. Metal Forgings submitted documentation establishing the date on which it first shipped this subject merchandise for export to the United States, the volume shipped, and the date of the first sale to an unaffiliated customer in the United States.

The POR has been defined so as to capture the dates of sale, shipment, and entry. On June 6, 2002, we extended the time limit for the preliminary results of this new shipper review to September 19, 2002 (67 FR 38932).

Scope of the Review

The products under review 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 stainless steel 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 subheadings are 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 review.

Period of Review

The POR is January 1, 2001, through July 31, 2001. We defined the POR so as to include the dates of sale, shipment, and entry.

Fair Value Comparisons

To determine whether sales of flanges from India were made in the United States at less than fair value, we compared the export price (EP) to the normal value (NV), as described in the “Export Price” and “Normal Value” sections of this notice. In accordance with section 777A(d)(1)(A)(i) of the Tariff Act, we calculated EPs and compared these prices to weighted-average normal values.

Export Price (EP)

Metal Forgings reported making only EP sales to the United States. In accordance with section 772 of the Tariff Act, we calculated an EP for each sale. Section 772(a) of the Tariff Act defines EP as the price at which the subject merchandise is first sold before the date of importation by the exporter or producer outside the United States to an unaffiliated purchaser in the United States, or to an unaffiliated purchaser for exportation to the United States. We calculated EP based on 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 C&F, CIF duty paid, FOB, or ex-dock duty paid prices to the first unaffiliated purchasers in the United States. We did not add amounts for duty drawback pursuant to section 772(c)(1)(B) of the Tariff Act because Metal Forgings failed to the demonstrate that the import duty and claimed rebate were directly linked to and dependent upon one another, and also failed to show that it made sufficient imports of the imported material to account for the duty drawback claimed for the export of the manufactured product. See Stainless Steel Round Wire From India; Final Determination of Sales at Less Than Fair Value, 64 FR 17319, 17320 (April 9, 1999), at comment 1. See also Final Results of Antidumping Duty Administrative Review: Oil Country Tubular Goods from Korea, 64 FR 13169, 13172 (March 17, 1999)). Concerning the Department's test for acceptable duty drawback adjustment claims and, in particular, the insufficiency of a mere reliance by the Department on the Indian Government's passbook rates for pre-determined import content, see Viraj Group v. United States 162 F. Supp.2d 656, 667-68 (CIT, 200;_).

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, ocean freight, and marine insurance.

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 (the viability criteria being whether 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 or subject merchandise during the POR), we compared the volume of home market sales of the foreign like product to the volume of U.S. sales of the subject merchandise. Since we found no reason to determine that quantity was not the appropriate basis for these comparisons, we did not use value as the measure. See 351.404(b)(2).

We based our comparisons of the volume of U.S. sales to the volume of home market sales or 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.

We determined that the home market was viable because Metal Forging's home market sales were greater than 5 percent of its U.S. sales based on aggregate volume by weight See 351.404(b) of the Department's regulations.

B. Arm's Length Sales

Since no information on the record indicates any comparison market sales to affiliates, we did not use an arm's-length test for comparison market sales.

C. Product Comparisons

We compared Metal Forgings U.S. sales with contemporaneous sales of the foreign like product in the home market. We considered stainless steel flanges identical based on grade, type, size, pressure rating and finish. We used a 20 percent difference-in-merchandise (DIFMER) cost deviation cap as the maximum difference in cost allowable for similar merchandise, which we calculated as the absolute value of the difference between the U.S. and comparison market variable costs of manufacturing divided by the total cost of manufacturing of the U.S. product.

D. Level of Trade

In accordance with section 773(a)(1)(B) of the Tariff Act, to the extent practicable, we determine NV based on sales in the comparison market at the same level of trade (LOT) as the EP. The LOT in the comparison market is that of the starting-price sales in the comparison market. With respect to U.S. price for EP transactions, the LOT is also that of the starting-price sale, which is usually from the exporter to the importer.

To determine whether comparison market sales are at a different level of trade than U.S. sales, we examined stages in the marketing process and selling functions along the chain of distribution between the producer and the unaffiliated customer. In analyzing the selling activities of the respondents, we did not note any significant differences in functions provided in any of the markets. We also noted that Metal Forgings sold to a similar customer base (OEMs and distributors) in both markets. Based upon the foregoing, we have determined that Metal Forgings made sales in both markets at the same LOT for its EP sales as for its comparison market sales. Accordingly, because we find the U.S. sales and comparison market sales to be at the same LOT, no LOT adjustment under section 773(a)(7)(A) is warranted.

E. Comparison Market Price

We based comparison market prices on the packed, ex-factory prices to the unaffiliated purchasers in the comparison market. We made adjustments for differences in packing, where applicable, in accordance with sections 773(a)(6)(A) and (B) of the Tariff Act. Metal Forgings reported no home market movement expenses.

Finally, we made an adjustment for differences between U.S. and home market credit expenses.

Preliminary Results of Review

As a result of our review, we preliminarily determine the weighted-average dumping margin for the period January 1, 2001 through July 31, 2001 to be as follows:

The Department will disclose calculations performed in connection with these preliminary results of review 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 and/or written comments no later than 30 days after the date of publication of these preliminary results of 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. The Department will issue the 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.

Upon completion of this administrative review, the Department will determine, and the Customs Service shall assess, antidumping duties on all appropriate entries. In accordance with 19 CFR 351.212(b)(1), we have calculated an exporter-specific assessment rate for merchandise subject to this review. The Department will issue appropriate assessment instructions directly to the Customs Service within 15 days of publication of the final results of review. If these preliminary results are adopted in the final results of review, we will direct the Customs Service to assess the resulting assessment rate against the entered customs values for the subject merchandise on each of the importer's entries during the review period.

In accordance with 19 CFR 351.212(b)(1), we will calculate assessment rates for the merchandise based on the ratio of the total amount of antidumping duties calculated for the examined sales made during the POR to the total quantity (in kilograms) of the sales used to calculate those duties. This rate will be assessed uniformly on all entries of merchandise of that manufacturer/exporter made during the POR.

Furthermore, the following deposit requirements will be effective upon completion of the final results of this administrative review for all shipments of stainless steel flanges from India entered, or withdrawn from warehouse, for consumption on or after the publication date of the final results of this administrative review, as provided by section 751(a)(1) of the Tariff Act: (1) The cash deposit rate for the reviewed company will be the rate established in the final results of administrative review; (2) for merchandise exported by manufacturers or exporters not covered in this review but covered in the original less-than-fair-value (LTFV) investigation or a previous review, the cash deposit will continue to be the most recent rate published in the final determination or final results for which the manufacturer or exporter received a company-specific rate; (3) if the exporter is not a firm covered in this review, or the original investigation, but the manufacturer is, the cash deposit rate will be that established for the manufacturer of the merchandise in the final results of this review, or the LTFV investigation; and (4) if neither the exporter nor the manufacturer is a firm covered in this review or any previous reviews, the cash deposit rate will be 162.14 percent, the “all others” rate established in the LTFV investigation (59 FR 5994) (February 9, 1994).

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.