Certain Preserved Mushrooms From India: Preliminary Results of Antidumping Duty Administrative Review, 64938-64941 [E6-18669]

Agencies

• DEPARTMENT OF COMMERCE
• International Trade Administration

[Federal Register Volume 71, Number 214 (Monday, November 6, 2006)]
[Notices]
[Pages 64938-64941]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-18669]


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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.
SUMMARY: In response to timely requests by Agro Dutch Industries, Ltd. 
(Agro Dutch) and the petitioner,\1\ the Department of Commerce (the 
Department) is conducting an administrative review of the antidumping 
duty order on certain preserved mushrooms from India with respect to 
Agro Dutch. The period of review (POR) is February 1, 2005, through 
January 31, 2006.
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    \1\ The petitioner is the Coalition for Fair Preserved Mushroom 
Trade which includes the following domestic companies: L.K. Bowman, 
Inc., Monterey Mushrooms, Inc., Mushroom Canning Company, and Sunny 
Dell Foods, Inc.
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    We preliminarily determine that sales have been made below normal 
value (NV). 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 U.S. Customs 
and Border Protection (CBP) to assess antidumping duties on all 
appropriate entries.

DATES: Effective Date: November 6, 2006.

FOR FURTHER INFORMATION CONTACT: Terre Keaton Stefanova or David J. 
Goldberger AD/CVD Operations, Office 2, Import Administration, 
International Trade Administration, U.S. Department of Commerce, 14th 
Street and Constitution Avenue, NW., Washington, DC 20230; telephone: 
(202) 482-1280 or (202) 482-4136, 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. See Notice of Amendment of 
Final Determination of Sales at Less Than Fair Value and Antidumping 
Duty Administrative Order: Certain Preserved Mushrooms from India, 64 
FR 8311 (February 19, 1999).
    In response to timely requests by a manufacturer/exporter, Agro 
Dutch, and the petitioner, the Department published a notice of 
initiation of an administrative review with respect to the following 
companies: Agro Dutch and Himalya International, Ltd. (Himalya), 71 FR 
17077 (April 5, 2006). The POR is February 1, 2005, through January 31, 
2006.
    On April 5, 2006, the Department issued antidumping duty 
questionnaires to the above-mentioned companies. We received responses 
to these questionnaires in May 2006.
    On July 10, 2006, the petitioner withdrew its request for review 
with respect to Himalya. Accordingly, we published a Notice of Partial 
Rescission of Antidumping Duty Administrative Review, 71 FR 42801 (July 
28, 2006), with respect to this company.
    We issued supplemental questionnaires to Agro Dutch in July and 
September 2006, and received responses in July, August and October 
2006.

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.

[[Page 64939]]

    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 (HTSUS). Although the 
HTSUS subheadings are provided for convenience and customs purposes, 
our written description of the scope of this order is dispositive.

Fair Value Comparisons

    To determine whether sales of certain preserved mushrooms by the 
respondent to the United States were made below 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 Tariff Act of 1930, as 
amended (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 respondent 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. 
Pursuant to 19 CFR 351.414(e)(2), we compared Agro Dutch's U.S. sales 
to sales made in the third-country market 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, container solution, and label type.

Export Price

    We used EP methodology, in accordance with section 772(a) of the 
Act, because the subject merchandise was sold directly by Agro Dutch to 
the first unaffiliated purchaser in the United States prior to 
importation and constructed export price (CEP) methodology was not 
otherwise indicated. We based EP on packed prices to unaffiliated 
purchasers in the United States.
    Agro Dutch reported its U.S. sales on a CIF or ex-dock duty paid 
basis. We made deductions from the starting price, where appropriate, 
for international freight, foreign inland freight, transportation 
insurance, foreign and U.S. brokerage and handling, and U.S. duty, in 
accordance with section 772(c)(2) of the Act and 19 CFR 351.402.
    Agro Dutch claimed a freight expense offset for some of the freight 
expenses associated with its export shipments to the United States and 
Israel, the third-country market upon which we based NV. Based on the 
information submitted for the record of this review and consistent with 
our findings in the previous administrative review, we did not make 
this adjustment because it is not contemplated by the Act or the 
Department's regulations. See Certain Preserved Mushrooms from India: 
Preliminary Results of Antidumping Duty Administrative Review, 70 FR 
67440, 67441 (November 7, 2005). These findings were upheld in the 
final results (see Certain Preserved Mushrooms from India: Final 
Results of Antidumping Duty Administrative Review, 71 FR 10646 (March 
2, 2006)).

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 Agro Dutch's 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.
    We determined that the home market was not viable for Agro Dutch 
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 used third-country sales as a basis for NV 
for Agro Dutch.

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. See 
Notice of Final Determination of Sales at Less Than Fair Value: Certain 
Cut-to-Length Carbon Steel Plate From South Africa 62 FR 61731, 61732 
(November 19, 1997) (Plate from South Africa). In order to determine 
whether the comparison sales were at different stages in the marketing 
process from 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) \2\, 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, 1314-15 (Fed. Cir. 
2001).
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    \2\ Where NV is based on constructed value (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 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, and where the difference affects price comparability, we 
make an 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, 62 FR at 61732-33.
    We obtained information from Agro Dutch regarding the marketing 
stages involved in sales to the reported comparison market and U.S. 
sales, including a description of the selling activities performed for 
each channel of distribution. Agro Dutch sold to importers/distributors 
through one channel of distribution in both the U.S.

[[Page 64940]]

and Israeli markets. As described in its questionnaire response, Agro 
Dutch performs limited selling activities for its U.S. and third-
country sales. Furthermore, any selling activities performed (e.g., 
sales negotiation and transportation arrangement) do not vary by 
channel of distribution, type of customer, or market. Therefore, Agro 
Dutch's sales channels are at the same LOT. Accordingly, all sales 
comparisons are at the same LOT for Agro Dutch and an adjustment 
pursuant to section 773(a)(7)(A) of the Act is not warranted.

Cost of Production Analysis

    In the most recently completed administrative review as of April 5, 
2006, when the questionnaire was issued (i.e., the 2004-2005 review), 
we found that Agro Dutch had made sales below the cost of production. 
See Certain Preserved Mushrooms from India: Final Results of 
Antidumping Duty Administrative Review, 71 FR 10646 (March 2, 2006). 
Thus, in accordance with section 773(b)(2)(A)(ii) of the Act, there are 
reasonable grounds to believe or suspect that Agro Dutch made sales in 
the third country at prices below the cost of producing the merchandise 
in the current review period. Accordingly, we instructed Agro Dutch to 
respond to the section D (Cost of Production) questionnaire.

A. Calculation of Cost of Production

    We calculated the cost of production (COP) on a product-specific 
basis, based on the sum of Agro Dutch'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 and ready for shipment in accordance with section 773(b)(3) of 
the Act.
    We relied on the COP information submitted by Agro Dutch, except 
for the direct material cost. We adjusted the can costs portion of the 
direct material cost to reconcile the work-in-process inventory amount 
reported in the response to the work-in-process inventory amount in the 
audited financial statements. Because the reported general and 
administrative expense and interest expense amounts were based on an 
amount that included the unadjusted direct material costs, we 
recalculated these expenses to incorporate the adjustment to the can 
costs. For further details regarding this adjustment, see ``Cost of 
Production and Constructed Value Calculation Adjustment for the 
Preliminary Results--Agro Dutch Industries Limited.'' Memorandum from 
Michael Harrison, Senior Accountant, to Neal M. Halper, Director of 
Accounting.
    On a product-specific basis, we compared Agro Dutch's weighted-
average COP to the prices of 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 billing adjustments, 
movement charges, discounts, direct and indirect selling expenses and 
packing. In determining whether to disregard third-country 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 in substantial quantities; and (2) at 
prices which did not permit the recovery of all costs within a 
reasonable period of time.

B. Results of COP Test

    Pursuant to section 773(b)(2)(C) of the Act, where less than 20 
percent of the 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 the 
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 Agro Dutch indicated that, for one 
or more products, more than 20 percent of home market or third country 
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 section 773(b)(2) of the Act. Therefore, 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

    We based NV on the price at which the foreign like product is first 
sold for consumption in the third country market, in the usual 
commercial quantities and in the ordinary course of trade, and at the 
same LOT as EP, where possible, as defined by section 773(a)(1)(B)(ii) 
of the Act.
    Third country prices were based on FOB, CIF, and CFR Indian port 
prices. We reduced the starting price for billing adjustments and 
movement expenses, and increased the starting price for interest 
revenue, where appropriate, in accordance with section 773(a)(6)(B) of 
the Act and 19 CFR 351.401(c) and (e).
    We disregarded Agro Dutch's claimed freight expense offset for 
certain third country sales granted under the Indian government program 
discussed in the ``Export Price'' section above, because this type of 
adjustment to NV is not contemplated by section 773(a)(6) of the Act or 
the Department's regulations.
    We also reduced the starting price for packing costs incurred in 
the comparison market, in accordance with section 773(a)(6)(B)(i) of 
the Act, and increased NV to account for U.S. packing expenses, in 
accordance with section 773(a)(6)(A) of the Act. We made circumstance-
of-sale adjustments for credit expenses and bank fees, 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.

Currency Conversion

    We made currency conversions in accordance with section 773A(a) 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 margin for the period February 1, 2005, 
through January 31, 2006, is as follows:

------------------------------------------------------------------------
        Manufacturer/exporter                   Percent margin
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Agro Dutch Industries, Ltd                               0.61
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    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

[[Page 64941]]

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. Pursuant to 19 CFR 351.309, interested parties 
may submit written comments in response to these preliminary results. 
Unless the time period is extended by the Department, case briefs are 
to be submitted within 30 days after the date of publication of this 
notice, and rebuttal briefs, limited to arguments raised in case 
briefs, are to be submitted no later than five days after the time 
limit for filing case briefs. Parties who submit arguments in this 
proceeding are requested to submit with the argument: (1) A statement 
of the issues, and (2) a brief summary of the argument. Case and 
rebuttal briefs must be served on interested parties, in accordance 
with 19 CFR 351.303(f).
    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 intends to issue assessment instructions to CBP 15 days 
after the date of publication of the final results of review.
    With respect to Agro Dutch, 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. 
We will instruct CBP to assess antidumping duties on all appropriate 
entries covered by this review if any importer-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. 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) (Assessment Policy Notice). This clarification will apply to 
entries of subject merchandise during the period of review produced by 
companies included in these final results of reviews for which the 
reviewed companies did not know that the merchandise it sold to the 
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. See Assessment 
Policy Notice for a full discussion of this clarification.

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 rate for the reviewed 
company will be that 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 less-than-fair-value (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 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: October 31, 2006.
David M. Spooner,
Assistant Secretary for Import Administration.
[FR Doc. E6-18669 Filed 11-3-06; 8:45 am]
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