[Federal Register: March 8, 2004 (Volume 69, Number 45)]
[Notices]
[Page 10659-10666]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr08mr04-39]
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DEPARTMENT OF COMMERCE
International Trade Administration
A-533-813
Certain Preserved Mushrooms from India: Preliminary Results of
Antidumping Duty Administrative Review
AGENCY: Import Administration, International Trade Administration,
Department of Commerce.
ACTION: Notice of preliminary results of antidumping duty
administrative review.
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SUMMARY: In response to timely requests by three manufacturers/
exporters and the petitioner,\1\ the Department of Commerce is
conducting an administrative review of the antidumping duty order on
certain preserved mushrooms from India with respect to five companies.
The period of review is February 1, 2002, through January 31, 2003.
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\1\ The petitioner is the Coalition for Fair Preserved Mushroom
Trade which includes the American Mushroom Institute and the
following domestic companies: L.K. Bowman, Inc., Modern Mushroom
Farms, Inc., Monterey Mushrooms, Inc., Mount Laurel Canning Corp.,
Mushrooms Canning Company, Southwood Farms, Sunny Dell Foods, Inc.,
and United Canning Corp.
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We preliminarily determine that sales have been made below normal
value. Interested parties are invited to comment on these preliminary
results. If these preliminary results are adopted in our final results
of administrative review, we will instruct Customs and Border
Protection to assess antidumping duties on all appropriate entries.
EFFECTIVE DATE: March 8, 2004.
FOR FURTHER INFORMATION CONTACT: David J. Goldberger or Kate Johnson,
Office 2, AD/CVD Enforcement Group I, Import Administration-Room B099,
International Trade Administration, U.S. Department of Commerce, 14th
Street and Constitution Avenue, NW., Washington, DC 20230; telephone:
(202) 482-4136 or (202) 482-4929, respectively.
SUPPLEMENTARY INFORMATION:
Background
On February 19, 1999, the Department published in the Federal
Register an amended final determination and antidumping duty order on
certain preserved mushrooms from India (64 FR 8311).
In response to timely requests by three manufacturers/exporters,
Agro Dutch Foods Ltd. (Agro Dutch), Saptarishi Agro Industries, Ltd.
(Saptarishi Agro), and Weikfield Agro Products, Ltd. (Weikfield), as
well as the petitioner, the Department published a notice of initiation
of an administrative review with respect to the following companies:
Agro Dutch, Alpine Biotech, Ltd. (Alpine Biotech), Dinesh Agro
Products, Ltd. (Dinesh Agro), Flex Foods, Ltd. (Flex Foods), Himalya
International, Ltd. (Himalya), Mandeep Mushrooms, Ltd. (Mandeep
Mushrooms), Premier Mushroom Farms (Premier), Saptarishi Agro, and
Weikfield (68 FR 14399, March 25, 2003). The period of review (POR) is
February 1, 2002, through January 31, 2003.
On March 28, 2002, the Department issued antidumping duty
questionnaires to the above-mentioned companies. On April 7, 2003, the
petitioner timely withdrew its request for review with respect to
Alpine Biotech and Mandeep Mushrooms, and on July 14, 2003, the
petitioner withdrew its request for review of Himalya. In addition,
Flex Foods reported that it had no sales of the subject merchandise
during the POR, which we confirmed by reviewing data from Customs and
Border Protection (CBP) (see Memorandum to the File dated June 6,
2003). Accordingly, we published a Notice of Partial Rescission of
Antidumping Duty Administrative Review with respect to Alpine Biotech,
Mandeep Mushrooms, Flex Foods, and Himalya on August 18, 2003 (68 FR
49435). While Saptarishi Agro withdrew its request for a review on May
13, 2003, the petitioner did not withdraw its request for a review of
this company, therefore, we did not rescind the review with respect to
Saptarishi Agro.
We received responses to the original questionnaire during the
period May through July 2003 from Agro Dutch, Premier, and Weikfield.
We issued supplemental questionnaires in July, September, and October
2003, and received responses from these companies during the period
August through October 2003. We did not receive a response from either
Dinesh Agro or Saptarishi Agro.
On June 6, 2003, the petitioner made an allegation that Agro Dutch
sold certain preserved mushrooms in its third country market at prices
below the COP. On July 8, 2003, the Department initiated a cost
investigation of Agro Dutch's third country sales (see Petitioners'
Allegation of Sales Below the Cost of Production for Agro Dutch,
Memorandum to the File dated July 8, 2003 (Agro Dutch COP Initiation
Memo).
On July 15, 2003, the petitioner made an allegation that Premier
sold certain preserved mushrooms in its home market at prices below the
COP. On August 1, 2003, the Department initiated a cost investigation
of Premier's home market sales (see Petitioners' Allegation of Sales
Below the Cost of Production for Premier, Memorandum to the File dated
August 1, 2003 (Premier COP Initiation Memo)).
On October 3, 2003, the Department extended the time limit for the
preliminary results in this review until March 1, 2004. See Certain
Preserved Mushrooms from India and the People's Republic of China:
Notice of Extension of Time Limit for Preliminary Results in
Antidumping Duty Administrative Reviews and New Shipper Review, 68 FR
57424.
In November 2003, we conducted on-site verifications of Premier's
and Weikfield's questionnaire responses, in accordance with 19 CFR
351.307. The results of these verifications are described in Sales and
Cost of
[[Page 10660]]
Production Verification in Secunderabad, India of Premier Mushroom
Farms, Memorandum to the File dated January 23, 2004 (Premier
Verification Report), and Sales and Cost of Production Verification in
Pune, India of Weikfield Agro Products, Ltd, Memorandum to the File
dated December 23, 2003 (Weikfield Verification Report).
As instructed by the Department, Weikfield and Premier submitted
revised U.S. and home market sales data pursuant to verification
findings on January 20, 2004, and February 6, 2004, respectively.
On February 12, 2004, the petitioner submitted comments on Premier
and Weikfield for purposes of the preliminary results. The petitioner
submitted comments on Agro Dutch on February 13, 2004.
Scope of the Order
The products covered by this order are certain preserved mushrooms,
whether imported whole, sliced, diced, or as stems and pieces. The
preserved mushrooms covered under this order are the species Agaricus
bisporus and Agaricus bitorquis. ``Preserved mushrooms'' refer to
mushrooms that have been prepared or preserved by cleaning, blanching,
and sometimes slicing or cutting. These mushrooms are then packed and
heated in containers including but not limited to cans or glass jars in
a suitable liquid medium, including but not limited to water, brine,
butter or butter sauce. Preserved mushrooms may be imported whole,
sliced, diced, or as stems and pieces. Included within the scope of
this order are ``brined'' mushrooms, which are presalted and packed in
a heavy salt solution to provisionally preserve them for further
processing.
Excluded from the scope of this order are the following: (1) All
other species of mushroom, including straw mushrooms; (2) all fresh and
chilled mushrooms, including ``refrigerated'' or ``quick blanched
mushrooms''; (3) dried mushrooms; (4) frozen mushrooms; and (5)
``marinated,'' ``acidified'' or ``pickled'' mushrooms, which are
prepared or preserved by means of vinegar or acetic acid, but may
contain oil or other additives.
The merchandise subject to this order is currently classifiable
under subheadings: 2003.10.0127, 2003.10.0131, 2003.10.0137,
2003.10.0143, 2003.10.0147, 2003.10.0153 and 0711.51.0000 of the
Harmonized Tariff Schedule of the United States\2\ (HTS). Although the
HTS subheadings are provided for convenience and customs purposes, our
written description of the scope of this order dispositive.
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\2\ Prior to January 1, 2002, the HTS codes were as follows:
2003.10.0027, 2003.10.0031, 2003.10.0037, 2003.10.0043,
2003.10.0047, 2003.10.0053, and 0711.90.4000.
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Use of Facts Available
As noted above in the ``Background'' section, neither Dinesh Agro
nor Saptarishi Agro submitted a response to the Department's
antidumping questionnaire. Because of Dinesh Agro's and Saptarishi
Agro's refusal to cooperate in this review, we determine that the
application of facts available is appropriate, pursuant to section
776(a)(2) of the Tariff Act of 1930 (the Act).
Section 776(a)(2) of the Act provides that ``if an interested party
or any other person (A) withholds information that has been requested
by the administering authority; (B) fails to provide such information
by the deadlines for the submission of the information or in the form
and manner requested, subject to subsections (c)(1) and (e) of section
782; (C) significantly impedes a proceeding under this title; or (D)
provides such information but the information cannot be verified as
provided in section 782(i), the administering authority shall, subject
to section 782(d), use the facts otherwise available in reaching the
applicable determination under this title.''
Because these two companies refused to participate in this
administrative review, we find that, in accordance with sections
776(a)(2)(A), (B), and (C) of the Act, the use of total facts available
is appropriate (see, e.g., Final Results of Antidumping Duty
Administrative Review for Two Manufacturers/Exporters: Certain
Preserved Mushrooms from the People's Republic of China, 65 FR 50183,
50184 (August 17, 2000) (for a more detailed discussion, see
Preliminary Results of Antidumping Duty Administrative Review for Two
Manufacturers/Exporters: Certain Preserved Mushrooms from the People's
Republic of China, 65 FR 40609, 40610-40611 (June 30, 2000)).
Section 776(b) of the Act provides that, if the Department finds
that an interested party ``has failed to cooperate by not acting to the
best of its ability to comply with a request for information,'' the
Department may use information that is adverse to the interests of the
party as facts otherwise available. 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 (SAA) accompanying the URAA, H.R. Doc. No.
103-316, at 870 (1994). Furthermore, ``an affirmative finding of bad
faith on the part of the 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).
Section 776(b) of the Act authorizes the Department to use as
adverse facts available information derived from the petition, the
final determination from the less-than-fair-value (LTFV) investigation,
a previous administrative review, or any other information placed on
the record. Under section 782(c) of the Act, a respondent has a
responsibility not only to notify the Department if it is unable to
provide requested information, but also to provide a ``full explanation
and suggested alternative forms.'' Neither company responded to the
Department's request for information, thereby failing to comply with
this provision of the statute. Therefore, we determine that Dinesh Agro
and Saptarishi Agro failed to cooperate to the best of their ability,
making the use of an adverse inference appropriate.
In this proceeding, consistent with Department practice (see, e.g.,
Rescission of Second New Shipper Review and Final Results and Partial
Rescission of First Antidumping Duty Administrative Review Brake Rotors
From the People's Republic of China, 64 FR 61581, 61584 (November 12,
1999), as adverse facts available, we have preliminarily assigned to
exports of the subject merchandise produced by Dinesh Agro and
Saptarishi Agro the rate of 66.24 percent, the highest rate calculated
for any cooperative respondent in the original LTFV investigation or
the three previous administrative reviews. The rates assigned to
respondents in the previous segments of the proceeding range from de
minimis for cooperative respondents to a petition rate of 243.87
percent for non-cooperative respondents. The Department's practice when
selecting an adverse rate from among the possible sources of
information is to ensure that the margin is sufficiently adverse ``as
to effectuate the purpose of the facts available rule to induce
respondents to provide the Department with complete and accurate
information in a timely manner.'' See Final Determination of Sales at
Less than Fair Value: Static Random Access Memory Semiconductors from
Taiwan, 63 FR
[[Page 10661]]
8909, 8932 (February 23, 1998). Consistent with the previous
administrative reviews, we find the application of a rate of 66.24
percent to Dinesh Agro and Saptarishi Agro to be sufficiently adverse
in this case. Section 776(c) of the Act provides that where the
Department selects from among the facts otherwise available and relies
on ``secondary information,'' the Department shall, to the extent
practicable, corroborate that information from independent sources
reasonably at the Department's disposal. Secondary information is
described in the SAA as ``{i{time} nformation derived from the petition
that gave rise to the investigation or review, the final determination
concerning the subject merchandise, or any previous review under
section 751 concerning the subject merchandise.'' See SAA at 870 and 19
CFR 351.308(c)(1). The SAA states that ``corroborate'' means to
determine that the information used has probative value (id.). To
corroborate secondary information, the Department will, to the extent
practicable, examine the reliability and relevance of the information
to be used. See 19 CFR 351.308(d).
Unlike other types of information, such as input costs or selling
expenses, there are no independent sources from which the Department
can derive calculated dumping margins; the only source for margins is
administrative determinations. In a previous segment of this
proceeding, the Department determined that the petition rate of 243.87
percent could not be corroborated and thus no longer had probative
value for use as an adverse facts available rate with respect to
Saptarishi Agro. We found that the next highest rate, the calculated
rate of 66.24 percent from a respondent in a previous review, was
sufficiently adverse and that there was no impediment for its
application to Saptarishi Agro in that review. See Notice of Final
Results of Administrative Review: Certain Preserved Mushrooms from
India 67 FR 46172 (July 12, 2002), and accompanying Issues and Decision
Memorandum at Comment 8.
We preliminarily determine that the calculated margin of 66.24
percent selected, as adverse facts available, is relevant, reliable,
and has probative value because it is based on verified data from a
respondent in a previous administrative review. Furthermore, although
this margin is the highest in the range of calculated margins, there is
no basis to conclude that it is aberrational or is inappropriate as
applied to Dinesh Agro and Saptarishi Agro. The rate used is also the
rate currently applicable to Saptarishi Agro. Accordingly, we determine
that this rate is an appropriate rate to be applied in this review to
exports of the subject merchandise produced by Dinesh Agro and
Saptarishi Agro as facts otherwise available.
Duty Absorption
On February 28, 2003, the petitioner requested that the Department
determine whether antidumping duties had been absorbed during the POR.
Section 751(a)(4) of the Act provides for the Department, if requested,
to determine during an administrative review initiated two or four
years after the publication of the order, whether antidumping duties
have been absorbed by a foreign producer or exporter, if the subject
merchandise is sold in the United States through an affiliated
importer. Because this review was initiated four years after the
publication of the order, and Agro Dutch, Premier, and Weikfield acted
as importer of record for some or all of their U.S. sales, we must make
a duty absorption determination in this segment of the proceeding
within the meaning of section 751(a)(4) of the Act.
On September 30, 2003, the Department requested evidence from the
respondents that unaffiliated purchasers will ultimately pay the
antidumping duties to be assessed on entries during the review period.
In determining whether the antidumping duties have been absorbed by the
respondents during the POR on sales for which they were importer of
record, we presume that the duties will be absorbed for those sales
that have been made at less than normal value (NV). This presumption
can be rebutted with evidence (e.g., an agreement between the
respondent/importer and unaffiliated purchaser) that the unaffiliated
purchaser will pay the full duty ultimately assessed on the subject
merchandise. None of the respondents responded to the Department's
request for information. Accordingly, based on the record, we cannot
conclude that the unaffiliated purchaser in the United States will pay
the ultimately assessed duty. Therefore, we preliminarily find that
antidumping duties have been absorbed by the producer or exporter
during the POR on those sales for which the respondent was the importer
of record. Premier was the importer of record for all of its sales to
the United States, while Agro Dutch was the importer of record for 79.4
percent of its U.S. sales, and Weikfield was the importer of record for
71.7 percent of its U.S. sales. In addition, we find duty absorption
for both Dinesh Agro and Saptarishi Agro on all of their sales, based
on adverse facts available, because neither company responded to the
Department's questionnaire.
Fair Value Comparisons
To determine whether sales of certain preserved mushrooms by the
respondents to the United States were made at less than NV, we compared
export price (EP), as appropriate, to the NV, as described in the
``Export Price'' and ``Normal Value'' sections of this notice.
Pursuant to section 777A(d)(2) of the Act, we compared the EPs of
individual U.S. transactions to the weighted-average NV of the foreign
like product where there were sales made in the ordinary course of
trade, as discussed in the ``Cost of Production Analysis'' section
below.
Product Comparisons
In accordance with section 771(16) of the Act, we considered all
products produced by the respondents covered by the description in the
``Scope of the Order'' section, above, to be foreign like products for
purposes of determining appropriate product comparisons to U.S. sales.
We compared U.S. sales to sales made in the home market (Premier and
Weikfield) or third country market (Agro Dutch) within the
contemporaneous window period, which extends from three months prior to
the U.S. sale until two months after the sale. Where there were no
sales of identical merchandise in the comparison market made in the
ordinary course of trade to compare to U.S. sales, we compared U.S.
sales to sales of the most similar foreign like product made in the
ordinary course of trade. In making the product comparisons, we matched
foreign like products based on the physical characteristics reported by
the respondents in the following order: preservation method, container
type, mushroom style, weight, grade, container solution, and label
type.
Agro Dutch reported grade characteristics for its sales that
departed from the criteria reported in previous reviews or by other
respondents. Based on the explanations at pages 6 - 8 of the August 6,
2003, supplemental questionnaire response, we are not persuaded that a
departure from the methodology established throughout this proceeding
is warranted as Agro Dutch failed to demonstrate any meaningful
differences in physical characteristics to require five rather than
three grade designations. Further, we note that some of the grade
differences claimed by Agro Dutch are already
[[Page 10662]]
defined by the mushroom style characteristic. Therefore, we have
reclassified the products reported by Agro Dutch and reassigned product
control numbers (CONNUMs) according to the methodology set forth in our
questionnaire. See Agro Dutch Preliminary Results Notes and Margin
Calculation, Memorandum to the File dated March 1, 2004, (Agro Dutch
Memo) for a further discussion.
Export Price
For Agro Dutch, Premier, and Weikfield, we used EP methodology, in
accordance with section 772(a) of the Act, because the subject
merchandise was sold directly by the producer/exporter in India to the
first unaffiliated purchaser in the United States prior to importation
and CEP methodology was not otherwise indicated. We based EP on packed
prices to unaffiliated purchasers in the United States.
Agro Dutch
Agro Dutch reported its U.S. sales as sold on an FOB, C&F, or CIF
basis. We made deductions from the starting price, where appropriate,
for foreign inland freight, freight document charges, transportation
insurance, foreign brokerage and handling, Indian export duty (CESS),
and international freight in accordance with section 772(c)(2) of the
Act and 19 CFR 351.402.
Premier
Premier reported its U.S. sales as sold on an FOB Hyderabad basis.
We made a deduction from the starting price, where appropriate, for
brokerage and handling expenses, in accordance with section 772(c)(2)
of the Act and 19 CFR 351.402.
Weikfield
Weikfield reported its U.S. sales as sold on a FOB port Mumbai,
delivered duty paid, or C&F basis. We made deductions from the starting
price, where appropriate, for foreign inland freight, export inspection
fees, foreign inland and marine insurance, foreign brokerage and
handling expenses, CESS, international freight, and U.S. duty
(including U.S. brokerage and handling expenses) in accordance with
section 772(c)(2) of the Act and 19 CFR 351.402.
Normal Value
In order to determine whether there was a sufficient volume of
sales in the home market to serve as a viable basis for calculating NV,
we compared the respondents' volume of home market sales of the foreign
like product to the volume of U.S. sales of the subject merchandise, in
accordance with section 773(a)(1)(C) of the Act.
With regard to Premier and Weikfield, the aggregate volume of home
market sales of the foreign like product was greater than five percent
of the aggregate volume of U.S. sales of the subject merchandise.
Therefore, we determined that the home market provides a viable basis
for calculating NV for Premier and Weikfield.
With regard to Agro Dutch, we determined that the home market was
not viable because Agro Dutch's aggregate volume of home market sales
of the foreign like product was less than five percent of its aggregate
volume of U.S. sales of the subject merchandise. However, we determined
that the third country market of Israel was viable, in accordance with
section 773(a)(1)(B)(ii) of the Act. Therefore, pursuant to section
773(a)(1)(C) of the Act, we have used third country sales as a basis
for NV for Agro Dutch. However, in certain cases, Agro Dutch did not
have sales of comparable merchandise to Israel that were
contemporaneous with sales to the United States. In those instances, we
calculated NV based on constructed value (CV) in accordance with
section 773(e) of the Act 19 CFR 351.405.
Level of Trade
Section 773(a)(1)(B)(i) of the Act states that, to the extent
practicable, the Department will calculate NV based on sales at the
same level of trade (LOT) as the EP or CEP. Sales are made at different
LOTs if they are made at different marketing stages (or their
equivalent). See 19 CFR 351.412(c)(2). Substantial differences in
selling activities are a necessary, but not sufficient, condition for
determining that there is a difference in the stages of marketing
(id.); see also Notice of Final Determination of Sales at Less Than
Fair Value: Certain Cut-to-Length Carbon Steel Plate From South Africa
(Plate from South Africa) 62 FR 61731, 61732 (November 19, 1997). In
order to determine whether the comparison sales were at different
stages in the marketing process than the U.S. sales, we reviewed the
distribution system in each market (i.e., the ``chain of
distribution''), including selling functions, class of customer
(``customer category''), and the level of selling expenses for each
type of sale.
Pursuant to section 773(a)(1)(B)(i) of the Act, in identifying
levels of trade for EP and comparison market sales (i.e., NV based on
either home market or third country prices\3\), we consider the
starting prices before any adjustments. For CEP sales, we consider only
the selling activities reflected in the price after the deduction of
expenses and profit under section 772(d) of the Act. See Micron
Technology, Inc. v. United States, 243 F. 3d 1301, 1314-1315 (Fed. Cir.
2001).
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\3\ Where NV is based on CV, we determine the NV LOT based on
the LOT of the sales from which we derive selling expenses and
profit for CV, where possible.
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When the Department is unable to match U.S. sales to sales of the
foreign like product in the comparison market at the same LOT as the EP
or CEP, the Department may compare the U.S. sale to sales at a
different LOT in the comparison market. In comparing EP or CEP sales at
a different LOT in the comparison market, where available data make it
practicable, we make a LOT adjustment under section 773(a)(7)(A) of the
Act. Finally, for CEP sales only, if an NV LOT is more remote from the
factory than the CEP LOT and there is no basis for determining whether
the difference in LOTs between NV and CEP affects price comparability
(i.e., no LOT adjustment was practicable), the Department shall grant a
CEP offset, as provided in section 773(a)(7)(B) of the Act. See Plate
from South Africa at 61731. We obtained information from the
respondents regarding the marketing stages involved in making the
reported foreign market and U.S. sales, including a description of the
selling activities performed for each channel of distribution. Company-
specific LOT findings are summarized below.
Agro Dutch
Agro Dutch sold to importers/traders through one channel of
distribution in both the U.S. and Israeli markets. As described in its
questionnaire response, Agro Dutch performs no selling functions in the
United States or in any of the third countries to which it sells,
including Israel. Therefore, these sales channels are at the same LOT.
Accordingly, all comparisons are at the same LOT for Agro Dutch and an
adjustment pursuant to section 773(a)(7)(A) is not warranted.
Premier
In the home market, Premier sold directly to small local
distributors that sell to retailers or local hotels. We examined
Premier's home market distribution system, including selling functions,
classes of customers, and selling expenses, and determined that Premier
offers the same support and assistance to all its home market
customers. Accordingly, all of Premier's home market sales are made
through the
[[Page 10663]]
same channel of distribution and constitute one LOT.
With regard to sales to the United States, Premier made only EP
sales to large distributors. We examined Premier's U.S. distribution
system, including selling functions, classes of customers, and selling
expenses, and determined that Premier offers the same support and
assistance to all its U.S. customers. Accordingly, all of Premier's
U.S. sales are made through the same channel of distribution and
constitute one LOT. This EP LOT differed considerably from the home
market LOT with respect to sales process, advertising, and inventory
maintenance. Consequently, we could not match the EP LOT to sales at
the same LOT in the home market. Since there was only one LOT in the
home market, there was no pattern of consistent price differences
between different LOTs in the home market, and we do not have any other
information that provides an appropriate basis for determining a LOT
adjustment. Accordingly, we have not made a LOT adjustment. See section
773(a)(7)(A) of the Act.
Weikfield
Weikfield's home market sales are made via two channels of
distribution: a) direct sales to large quantity end-users, and b) sales
to distributors and ``carrying and forwarding'' (C&F) agents, which
either resell the merchandise to small quantity end-users, or act as
Weikfield's agent in selling and distributing the merchandise to small
quantity end-users. We examined Weikfield's home market distribution
system, including selling functions, classes of customers, and selling
expenses, and determined that Weikfield offers the same support and
assistance to all its home market customers except with respect to
sales promotion activities. In the Indian states of Maharashtra and
Goa, Weikfield's affiliate WPCL includes Weikfield's preserved
mushrooms products in its market development activities to promote
sales.
With respect to such functions as sales negotiation, freight and
distribution services, and inventory maintenance, the two channels
involve the same services performed by Weikfield. With respect to sales
promotion activities, the level of sales promotion activities performed
by WPCL are not so extensive as to constitute a separate LOT.
Accordingly, we consider all of Weikfield's home market sales to
constitute one LOT.
With regard to sales to the United States, Weikfield made only EP
sales to importers/traders. We examined Weikfield's U.S. distribution
system, including selling functions, classes of customers, and selling
expenses, and determined that Weikfield offers the same support and
assistance to all its U.S. customers. Accordingly, all of Weikfield's
U.S. sales are made through the same channel of distribution and
constitute one LOT.
We compared the EP LOT to the home market LOT and concluded that
the selling functions performed for home market customers are
sufficiently similar to those performed for U.S. customers because the
same services are offered in both markets. Apart from the promotion
activities conducted by WPCL on Weikfield's behalf in the home market
which are not extensive, as discussed above, Weikfield does not perform
different selling activities in either the U.S. or home markets.
Weikfield's selling activities undertaken in both markets are limited
to responding to infrequent product complaints and, in the home market,
arranging for domestic freight on certain sales. Accordingly, we
consider the EP and home market LOTs to be the same. Consequently, we
are comparing EP sales to sales at the same LOT in the home market.
Cost of Production Analysis
As stated in the ``Background'' section of this notice, based on
timely allegations filed by the petitioner, the Department initiated
investigations to determine whether Agro Dutch's third country sales
and Premier's home market sales were made at prices less than the COP
within the meaning of section 773(b) of the Act. See Agro Dutch COP
Initiation Memo and Premier COP Initiation Memo.
In addition, the Department disregarded certain sales made by
Weikfield in the 2001-2002 administrative review, pursuant to findings
in that review that sales failed the cost test (see Notice of Final
Results of Antidumping Duty Administrative Review: Certain Preserved
Mushrooms from India, 68 FR 41303 (July 11, 2003). Thus, in accordance
with section 773(b)(2)(A)(ii) of the Act, there are reasonable grounds
to believe or suspect that Weikfield made sales in the home market at
prices below the cost of producing the merchandise in the current
review period.
A. Calculation of Cost of Production
We calculated the COP on a product-specific basis, based on the sum
of each company's respective costs of materials and fabrication for the
foreign like product, plus amounts for selling, general and
administrative (SG&A) expenses, interest expense, and all expenses
incidental to placing the foreign like product in a condition packed
ready for shipment in accordance with section 773(b)(3) of the Act.
We relied on the COP information submitted by Agro Dutch, Premier,
and Weikfield, except for the following adjustments:
Premier
1. We included certain expenses which were omitted from variable
overhead expenses, as discussed at page 16 of the Premier Verification
Report.
2. We revised the per-kilogram fixed overhead cost to correct errors in
allocating shared depreciation expenses, as discussed at page 17 of the
Premier Verification Report.
3. We revised the reported labor expense to account for the
reallocation of labor expenses to head office and sales employees, as
discussed at page 15 of the Premier Verification Report, and to fully
account for certain year-end adjustments to the reported cost of
manufacture, as discussed at pages 6 and 15 of the Premier Verification
Report.
4. We revised the financial expense ratio by excluding bank charges
from the numerator of the calculation, as discussed at page 23 of the
Premier Verification Report.
5. We revised the G&A expenses to account for changes in the G&A
expense ratio due to the reallocation of a portion of labor expenses
made at the commencement of verification, as discussed at page 22 of
the Premier Verification Report.
Weikfield
1. We revised the reported direct material costs to include an offset
for sales of spent compost recorded as ``other income,'' as discussed
at page 12 of the Weikfield Verification Report.
2. We revised the reported factory overhead expenses costs to reflect
the revised depreciation expenses presented at the commencement of the
verification and submitted for the record in the December 2, 2003,
submission.
3. We revised the reported G&A expense to reflect the corrected ratio
presented at the commencement of the verification and submitted for the
record in the December 2, 2003, submission. In addition, we added the
depreciation costs for ``idled assets'' excluded from Weikfield's
reporting, as discussed at page 15 of the Weikfield Verification
Report, to the G&A expense total, consistent with our treatment of
these expenses in the previous review (see Final Results of Antidumping
Duty
[[Page 10664]]
Administrative Review: Certain Preserved Mushrooms From India, 68 FR
41303 (July 11, 2003) (AR3 Final Results), Issues and Decision
Memorandum at Comment 10). See Weikfield Preliminary Results Notes and
Margin Calculation, Memorandum to the File dated March 1, 2004, for a
further discussion of these adjustments.
B. Test of Home or Third Country Market Prices
For all three companies, on a product-specific basis, we compared
the weighted-average COP to the prices of home market or third country
market sales of the foreign like product, as required by section 773(b)
of the Act, in order to determine whether these sales were made at
prices below the COP. For purposes of this comparison, we used COP
exclusive of selling and packing expenses. The prices (inclusive of
interest revenue, where appropriate) were exclusive of any applicable
movement charges, discounts, direct and indirect selling expenses and
packing expenses, revised where appropriate as discussed below under
``Price-to-Price Comparisons.'' In determining whether to disregard
home market sales made at prices less than their COP, we examined, in
accordance with sections 773(b)(1)(A) and (B) of the Act, whether such
sales were made: (1) within an extended period of time, (2) in
substantial quantities; and (3) at prices which did not permit the
recovery of all costs within a reasonable period of time.
C. Results of COP Test
Pursuant to section 773(b)(2)(C) of the Act, where less than 20
percent of a respondent's sales of a given product 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.'' Where 20 percent or more of a respondent's
sales of a given product during the POR were at prices less than the
COP, we disregarded the below-cost sales because we determined that
they represented ``substantial quantities'' within an extended period
of time, and were at prices which would not permit the recovery of all
costs within a reasonable period of time, in accordance with section
773(b)(1) of the Act.
The results of our cost test for Weikfield indicated that less than
20 percent of home market sales of any given product were at prices
below COP. We therefore retained all sales in our analysis and used
them as the basis for determining NV.
The results of our cost tests for Agro Dutch and Premier indicated
that for certain products more than 20 percent of home market sales
within an extended period of time were at prices below COP which would
not permit the full recovery of all costs within a reasonable period of
time. See 773(b)(2) of the Act. In accordance with section 773(b)(1) of
the Act, we excluded these below-cost sales from our analysis and used
the remaining sales as the basis for determining NV.
Price-to-Price Comparisons
For Agro Dutch, Premier and Weikfield, we based NV on the price at
which the foreign like product is first sold for consumption in the
home market or third country market, in the usual commercial quantities
and in the ordinary course of trade, and at the same LOT as EP, as
defined by section 773(a)(1)(B)(i) of the Act.
Home market or third country prices were based on ex-Hyderabad, FOB
Indian port, or delivered prices. We reduced the starting price for
discounts (Weikfield), credit notes (Premier), and movement expenses
(Agro Dutch, Premier and Weikfield), and increased the starting price
for interest revenue (Premier), where appropriate, in accordance with
section 773(a)(6) of the Act and 19 CFR 351.401. We treated Premier's
discounts as commissions. See Memorandum to the File dated March 1,
2004, Preliminary Results Calculation Memorandum for Premier Mushroom
Farms (Premier). We also reduced the starting price for packing costs
incurred in the home market, in accordance with section
773(a)(6)(B)(i), and increased NV to account for U.S. packing expenses
in accordance with section 773(a)(6)(A). We made circumstance-of-sale
adjustments for credit expenses, bank fees, and commissions, where
appropriate, pursuant to section 773(a)(6)(C)(iii) of the Act and 19
CFR 351.410. In addition, we made adjustments to NV, where appropriate,
for differences in costs attributable to differences in the physical
characteristics of the merchandise, pursuant to section
773(a)(6)(C)(ii) of the Act and 19 CFR 351.411. For Premier and
Weikfield, we made an adjustment to NV to account for commissions paid
in the home market but not in the U.S. market, in accordance with 19
CFR 351.410(e). As the offset for home market commissions, we applied
the lesser of home market commissions or U.S. indirect selling
expenses.
During the POR, a number of Agro Dutch's shipments to the United
States were rejected and returned to India. A large portion of these
sales were resold to third country markets other than Israel. See page
15 and Exhibit Supp. C-1 of Agro Dutch's August 6, 2003, supplemental
questionnaire response, and Agro Dutch's December 15, 2003, letter. To
account for these expenses, we included the expenses incurred to ship
the rejected sales to the United States as an indirect selling expense
for U.S. sales. In addition, we also included as an indirect selling
expense for U.S. sales the expenses incurred to return the rejected
sales to India, less an amount for merchandise resold to third country
customers. See Agro Dutch Memo, for a further discussion of these
expenses.
We recalculated Premier's indirect selling expenses to include
certain sales expenses incorrectly included in labor and G&A. See
Premier Verification Report at page 26.
Consistent with our treatment in the previous review, we have not
considered Weikfield's commission payments to WPCL on home market and
U.S. sales to be at arm's length, and instead have included the selling
expenses incurred by WPCL on Weikfield's behalf as part of Weikfield's
indirect selling expenses. See AR3 Final Results, Issues and Decision
Memorandum at Comments 4 and 7.
As discussed at page 22 of the Weikfield Verification Report,
Weikfield was unable to demonstrate that it actually incurred a freight
expense on sales made to customers near its production facility. Sales
to these customers were shipped either by Weikfield's own trucks, or by
local contractors for whom no payment records were maintained.
Therefore, we did not deduct movement expenses from the starting price
for these sales.
We recalculated Weikfield's home market imputed credit expense
based on the methodology used in its questionnaire response to account
for revisions to prices, discounts and payment dates made to the sales
data base as a result of verification findings, and to deduct freight
expenses from the price base for sales made on a freight-collect basis,
where the cost of freight was deducted on the invoice, but not from the
price base used to calculate imputed credit.
To calculate U.S. indirect selling expenses, we used the U.S.
indirect selling expense ratio Weikfield calculated at verification
because Weikfield did not include a U.S. indirect selling expense in
its reported sales listing. See Weikfield Verification Report at page
29.
[[Page 10665]]
Calculation of Constructed Value
We calculated CV in accordance with section 773(e) of the Act,
which indicates that CV shall be based on the sum of each respondent's
cost of materials and fabrication for the subject merchandise, plus
amounts for SG&A expenses, profit and U.S. packing costs. We relied on
the submitted CV information except for the following adjustments:
Premier
We made the same adjustments to the CV data as we made to the COP
data, as discussed above under ``Calculation of Cost of Production.''
Weikfield
We made the same adjustments to the CV data as we made to the COP
data, as discussed above under ``Calculation of Cost of Production.''
Price-to-Constructed Value Comparisons
For Agro Dutch, we based NV on CV for comparison to certain U.S.
sales, in accordance with section 773(a)(4) of the Act. For comparisons
to Agro Dutch's EP sales, we made circumstance-of-sale adjustments by
deducting from CV the weighted-average direct selling expenses of Agro
Dutch's above-cost third country sales, and adding the U.S. direct
selling expenses, in accordance with section 773(a)(8) of the Act and
19 CFR 351.410.
Currency Conversion
We made currency conversions in accordance with section 773A of the
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 this review, we preliminarily determine that the
weighted-average dumping margins for the period February 1, 2001,
through January 31, 2002, are as follows:
------------------------------------------------------------------------
Percent
Manufacturer/Exporter margin
------------------------------------------------------------------------
Agro Dutch Foods, Ltd...................................... 8.41
Dinesh Agro Products, Ltd.................................. 66.24
Premier Mushroom Farms..................................... 27.30
Saptarishi Agro Industries, Ltd............................ 66.24
Weikfield Agro Products, Ltd............................... 12.45
------------------------------------------------------------------------
We will disclose the calculations used in our analysis to parties
to this proceeding within five days of the publication date of this
notice. See 19 CFR 351.224(b). Any interested party may request a
hearing within 30 days of publication. See 19 CFR 351.310(c). If
requested, a hearing will be scheduled after determination of the
briefing schedule.
Interested parties who wish to request a hearing or to participate
if one is requested, must submit a written request to the Assistant
Secretary for Import Administration, Room B-099, within 30 days of the
date of publication of this notice. Requests should contain: (1) the
party's name, address and telephone number; (2) the number of
participants; and (3) a list of issues to be discussed. See 19 CFR
351.310(c).
Issues raised in the hearing will be limited to those raised in the
respective case briefs. Case briefs from interested parties and
rebuttal briefs, limited to the issues raised in the respective case
briefs, may be submitted in accordance with a schedule to be
determined. Parties who submit case briefs or rebuttal briefs in this
proceeding are requested to submit with each argument (1) a statement
of the issue and (2) a brief summary of the argument. Parties are also
encouraged to provide a summary of the arguments not to exceed five
pages and a table of statutes, regulations, and cases cited.
The Department will issue the final results of this administrative
review, including the results of its analysis of issues raised in any
written briefs, not later than 120 days after the date of publication
of this notice, pursuant to section 751(a)(3)(A) of the Act.
Assessment Rates
The Department shall determine, and CBP shall assess, antidumping
duties on all appropriate entries, in accordance with 19 CFR 351.212.
The Department will issue appropriate appraisement instructions for the
companies subject to this review directly to CBP within 15 days of
publication of the final results of this review.
For assessment purposes, we do not have the actual entered values
for certain sales made by Weikfield because Weikfield was not the
importer of record on some of its U.S. sales and it did not obtain the
entered value data for those sales. Accordingly, we intend to calculate
importer-specific assessment rates by aggregating the dumping margins
calculated for all of Weikfield's U.S. sales examined and dividing the
respective amount by the total quantity of the sales examined. To
determine whether the duty assessment rates are de minimis, in
accordance with the requirement set forth in 19 CFR 351.106(c)(2), we
will calculate importer-specific ad valorem ratios based on export
prices. With respect to Agro Dutch and Premier, we intend to calculate
importer-specific assessment rates for the subject merchandise by
aggregating the dumping margins calculated for all of the U.S. sales
examined and dividing this amount by the total entered value of the
sales examined.
The Department will issue appropriate appraisement instructions
directly to CBP upon completion of this review. We will instruct CBP to
assess antidumping duties on all appropriate entries covered by this
review if any importer- or customer-specific assessment rate calculated
in the final results of this review is above de minimis (i.e., at or
above 0.50 percent). See 19 CFR 351.106(c)(1). The final results of
this review shall be the basis for the assessment of antidumping duties
on entries of merchandise covered by the final results of this review
and for future deposits of estimated duties, where applicable.
Cash Deposit Requirements
The following cash deposit requirements will be effective for all
shipments of the subject merchandise 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 Act: (1) the cash deposit rates for the reviewed
companies will be those established in the final results of this
review, except if the rate is less than 0.50 percent, and therefore, de
minimis within the meaning of 19 CFR 351.106(c)(1), in which case the
cash deposit rate will be zero; (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
period; (3) if the exporter is not a firm covered in this review, a
prior review, or the original LTFV investigation, but the manufacturer
is, the cash deposit rate will be the rate established for the most
recent period for the manufacturer of the merchandise; and (4) the cash
deposit rate for all other manufacturers or exporters will continue to
be 11.30 percent, the ``All Others'' rate made effective by the LTFV
investigation (see Notice of Amendment of Final Determination of Sales
at Less Than Fair Value and Antidumping Duty Order: Certain Preserved
Mushrooms From India, 64 FR 8311 (February 19, 1999)). These
requirements, when imposed, shall remain in effect until publication of
the final results of the next administrative review.
Notification to Importers
This notice also serves as a preliminary reminder to importers of
their responsibility under 19 CFR
[[Page 10666]]
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.
This administrative review and notice are published in accordance
with sections 751(a)(1) and 777(i)(1) of the Act and 19 CFR 351.221.
Dated: March 1, 2004.
James J. Jochum,
Assistant Secretary for Import Administration.
[FR Doc. 04-5137 Filed 3-5-04; 8:45 am]