Slip Op. 99-73 (July 30, 1999)
FINAL RESULTS OF REDETERMINATION
PURSUANT TO COURT REMAND
The Department of Commerce has prepared these final results of redetermination pursuant to the remand order from the Court of International Trade in Timken Company v. United States (Slip Op. 99-73, July 30, 1999). In accordance with the Court of International Trade's instructions, we have recalculated the margins for the respondents in Tapered Roller Bearings and Parts Thereof, Finished and Unfinished, From the People's Republic of China; Final Results and Partial Termination of Antidumping Duty Administrative Review, 62 FR 6173 (February 11, 1997) by (1) excluding the category "purchases of traded goods" from the Cost of Manufacture calculation used in the calculation of the surrogate overhead, profit, and SG&A ratios and (2) recalculating the marine insurance expense based on a value rather than weight basis. Based on these new factors, we recalculated the final dumping margins for each of the companies involved in the aforementioned review.
Also based on the Court's instructions, we further investigated the proper category to use in valuing the type of steel used to manufacture cages. Based on our investigation, we have determined that the Indian HTS category we used in the Administrative Review, 7209.42.00, is the proper category to use to value the cold-rolled steel sheet used to manufacture cages used in
tapered roller bearings. We, therefore, did not change our valuation of this factor.
On July 30, 1999, the Court of International Trade ("CIT") issued an order in Timken Company v. United States (Slip Op. 99-73, July 30, 1999) ("Timken") remanding to the Department of Commerce ("the Department") Tapered Roller Bearings and Parts Thereof, Finished and Unfinished, From the People's Republic of China; Final Results and Partial Termination of Antidumping Duty Administrative Review, 62 FR 6173 (February 11, 1997) ("Final Results"). This review covered the period June 1, 1994, through May 31, 1995. The Timken Company contested the Department's decision in the Final Results.
The CIT instructed the Department to make the following changes to its margin calculations for the Final Results: (1) eliminate from the Cost of Manufacture calculation the category "purchases of traded goods" and (2) recalculate marine insurance expense based on value rather than weight.
The CIT also instructed the Department to further investigate the proper category to use for the valuation of the type of steel used to manufacture cages. Therefore, on October 8, 1999, we sent out requests to each of the Defendant-Intervenors requesting submission of new information detailing the type of steel used by the respondents to manufacture cages. We received no new information with regard to the type of steel used by the respondents to manufacture cages from any of the Defendant-Intervenors. Upon re-examination of the record evidence, however, we found information supporting our original determination as to the proper categorization of the steel used to manufacture cages.
On November 29, 1999, we released our draft results of redetermination to Timken and to each of the three Defendant-Intervenors in this proceeding, L&S Bearing Company, Peer Bearing Company, and Shanghai General Bearing Company Ltd. We received no comments on the draft results from any of the parties involved in the proceeding.
Proper Category to Use for the Valuation of Cage Steel
In the Final Results, we used the Indian tariff classification 7209.42.00 to value the cold-rolled steel sheet used by Chinese producers to manufacture cages for Tapered Roller Bearings ("TRBs"). The petitioner objected to the use of this category because it does not specify carbon content, an element the petitioner argues is an essential characteristic of the type of steel used by the respondents to manufacture cages. The petitioner argued that Indian subheading 7211.41.00 is the proper category to utilize because it specifies carbon content. The respondents disagreed, stating that the Department should continue to use 7209.42.00, following its prior practice. The respondents pointed out that there are numerous differences between the category chosen by the Department and the one chosen by the petitioner, including the width and thickness of the steel in each of the categories. The respondents also noted that the category chosen by the petitioner, 7211.41.00, does not specify any of the other essential elements (such as sulphur, manganese, and silicon) that the companies listed as also being chemical elements of steel used to manufacture cages. Thus, the respondents provide that, because there is not enough information on the record to determine which would be the more appropriate category for use in valuing cage steel, the Department should continue to use the same category it used in the past several reviews, 7209.42.00.
In Timken, the Department acknowledged that it erred in rejecting the petitioner's suggested category on the basis that the category, 7211.41.00, includes solely hot-rolled steel and is not, therefore, an appropriate category for valuing cold-rolled steel sheet used to produce cages. In fact, the petitioner's suggested category also includes cold-rolled steel. Thus, in response to the Department's request, the CIT instructed the Department to further investigate and determine the appropriate category to use in valuing cold-rolled steel based on a further examination of the thickness, width, or carbon content issues argued by the petitioner and the respondents.
We first note that, in the Final Results, we incorrectly used the word "thickness" instead of "width" when referring to steel measurements of greater or less than 600 millimeters. According to the information specified in the HTS headings, "width" is the proper terminology to use when referring to dimensions that are less or more than 600 millimeters. The HTS category headings also specify that "thickness" refers to dimensions between one and three millimeters. Thus, we are using the term "thickness" to refer to steel that is one to three millimeters thick, and the term "width" to refer to steel that is more or less than 600 millimeters wide.
In determining the appropriate category for valuing the cold-rolled sheet used in the manufacture of cages, we requested that each of the three Defendant-Intervenors submit information on the width and thickness of the steel used to manufacture cages, as well as on the carbon content and chemical make-up of the steel in question. None of the three companies submitted information in response to our request. We also re-examined the record and found that several of the companies being reviewed reported that they purchased steel used in the manufacture of cages from a market economy supplier. One of the companies, [ ], submitted an invoice with its questionnaire response that listed the thickness, width, and length of the market economy steel that was used to manufacture cages. The invoice indicates that the width of the steel was, at minimum, [ ].
The category that has been used by the Department to value cage steel, 7209.42.00, includes steel that is more than 600 millimeters in width. The category suggested by the petitioner, however, is limited to steel that is less than 600 millimeters in width. Because the category the petitioner suggests we use, 7211.41.00, specifically states that it includes only steel of less than 600 millimeters in width, and because we have information on the record that indicates the width of the steel used by Chinese TRB manufacturers to make cages is more than 600 millimeters, we conclude that the petitioner's category is inappropriate for the valuation of steel used in the manufacture of cages for TRBs.
Conversely, because the subheading the Department used, 7209.42.00, specifically states that it includes all steel with widths greater than 600 millimeters and the cage steel invoice specifies that the width of the steel is at least [ ], this category is more appropriate for this valuation. Furthermore, the category description for 7209.42.00 states that it includes steel of a thickness of equal to or greater than one millimeter but not exceeding three millimeters. According to the invoice that is on the record, the steel used in the manufacture of cages falls within that range. Finally, after further examination of the most comprehensive list of Indian import classifications submitted for the record, we have determined that the issue of choosing a category that specifies carbon content is no longer relevant. Category 7211 is the only category that includes cold-rolled steel sheet that specifies carbon content in any of its
subcategory headings; however, as we have determined, category 7211 cannot be used to value cage steel because it includes steel of inappropriate width.
Accordingly, based upon this further investigation, we have determined that 7209.42.00 is the most appropriate category for use in valuing cold-rolled steel sheet used to manufacture cages. No changes to the margin calculations for the individual companies with regard to this particular factor are, therefore, necessary.
Elimination of "Purchases of Traded Goods" Category from the COM Calculation
In the Final Results, we included the line item "purchases of traded goods" as a material cost in the Cost of Manufacture ("COM") calculation, which is the denominator (or part thereof) used to calculate the SG&A, overhead, and profit ratios. In Timken, the CIT ruled that this category should not be included in the COM calculation. Accordingly, we have revised our COM calculation to exclude the category "purchases of traded goods." The new total COM is 22,810.60 rupees. Given the new COM calculation, our SG&A, overhead, and profit ratios changed to 12.82 %, 37.10 %, and 16.14 %, respectively. Our revised calculations based on these changes are included in a memorandum to the file which is dated November 29, 1999.
In following the CIT's directive, we note that the Department does not agree that it is appropriate for every ratio to exclude "purchases of traded goods." For example, in determining a company's profit ratio, the Department divides the company's total profits by the company's total goods produced and otherwise acquired and sold. Thus, the item "purchases of traded goods," which, according to the producer's financial statements, are goods the company purchases to fulfill its customer's demand for TRBs, would be part of such manufactured and otherwise acquired goods. Therefore, it would be inappropriate, in this example, to exclude this line item from the denominator of the profit ratio.
Marine Insurance Expense
In the Final Results, we calculated the marine insurance expense by multiplying a per-kilogram surrogate value by the per-unit net weight of the merchandise. In Timken, the CIT ruled that this methodology is improper and instructed us to recalculate marine insurance on a value basis instead of a weight basis. We have complied with the CIT's instruction. Our new calculation methodology, which is based on value rather than weight, is described in a memorandum to the file dated November 29, 1999. In order to comply with the CIT's instructions, as an attachment to the memorandum we have added to the record publicly available data from the April 10, 1992, Sulfur Dyes from India investigation petition and exchange rate and wholesale price index data from the International Monetary Fund's International Financial Statistics that was not part of the original record.
INTERESTED PARTY COMMENTS
In releasing the draft remand to parties, we invited parties to comment on two anomalies we discovered when recalculating the margins pursuant to the CIT's order. These anomalies were neither raised by any party during the review nor contested in Timken. First, in the normal value calculation, the category "rates and taxes" was included in both the overhead and the SG&A calculations in the Final Results, resulting in a double-counting of the expense. Second,
in the Final Results weighted-average margin calculations, we did not include data from one supplier when calculating one of the company-specific margins.
As noted above, we received no comments from any party involved in the proceeding. Because neither issue was raised in the course of the review or in Timken, and because no party commented on the errors, we have not taken them into account when recalculating the margins for these final results of redetermination. (1)
FINAL RESULTS OF REMAND
As a result of this remand, we have recalculated the company-specific margins for this review. The weighted-average percentage margins are as follows:
|Premier Bearing and Equipment, Limited||2.89|
|Guizhou Machinery Import and Export Corporation||17.65|
|Luoyang Bearing Factory||0.00|
|Liaoning Company, Limited||9.72|
|China National Machinery Import and Export Corporation||0.00|
|China Nat'l Automotive Industry Import and Export Corp.||25.66|
|Tianshui Hailin Import and Export Corporation||25.63|
|Zhejiang Machinery Import and Export Corporation||3.04|
|Xiangfan Machinery Foreign Trade Corporation, Hubei||0.00|
|East Sea Bearing Company, Limited||3.60|
The rates in this review for Jilin Machinery Import and Export Corporation and Wafangdian Bearing Factory, both 29.40 percent, are not affected by this remand, as both companies were
subject to the use of facts otherwise available in the Final Results. The "PRC-Wide" rate for this review, 29.40 percent, is also not affected by this remand redetermination.
This redetermination is in accordance with the order of the CIT in Timken Company v. United States (Slip Op. 99-73, July 30, 1999).
Robert S. LaRussa
for Import Administration
Date: December 13, 1999
1. Had we taken the factors into account, the company-specific margins would have been as follows: