United States Court of International Trade

Decision Remanded in Part in Welded Carbon Steel Case

In Tosçelik Profil Ve Sac A.S. v. United States and Zekelman Industries, Slip Op. 18-66, Court No. 17-00018 (June 6, 2018) the Court considered arguments regarding Commerce’s determinations in an administrative review of an antidumping duty order on welded carbon steel standard pipe and tube products from Turkey.  For the following reasons the Court sustains Commerce’s determinations in part and remands in part for further reconsideration.

The Court reviewed Commerce’s methodology for calculating the duty drawback adjustment given to plaintiff. “The purpose of a duty drawback adjustment is to ensure a fair comparison between normal value and export price.” Id. at 7.  Toscelik argued that the Department’s calculation did not account for computing exempted and rebated duties over total exports to the United States.  “Because the statute contemplates a drawback on duties that are rebated or exempted “by reason of” the exportation of the subject merchandise to the United States, Tosçelik contends that Commerce’s calculation of the duty drawback adjustment is contrary to the statute’s plain language in that the chosen methodology ignores the statute’s textual linkage between the adjustment and the act of exporting.” See id. at 9.  The determination was remanded for reconsideration.

The next issue was if Commerce’s use of actual weight versus theoretical weight was supported by substantial evidence. Commerce had not specified “whether respondents should provide information in either actual or theoretical weight, but rather that respondents should use the same unit of measure to report sales.” Id. at 13. Plaintiff had also notified Commerce of their “belief that the use of theoretical weight in this case may introduce unwanted distortions into the calculations.” Id. at 13. The Court concluded the determination was based on substantial evidence based on the record.

The final issue was whether Commerce’s sale adjustment for warehousing expenses for plaintiff was based on substantial evidence. Commerce’s “proclamation of “no evidence” clearly contradicts Tosçelik’s admission that the claimed warehousing expenses encompassed costs associated with both manufacturing and storing products for sale. The Department failed to give reasons and substantiate its decision to make a circumstance of sales adjustment for Tosçelik.” Id. at 17.   The Court held because Commerce granted a sale adjustment based on the warehousing expenses despite the evidence that the expenses included storage for local deliveries Commerce failed to take account all of the evidence in the record. The determination was remanded for reconsideration. 

Remanded Determinations in Multilayered Wood Flooring Case

In Jiangsu Senmao Bamboo and Wood Industry Co. Ltd., et. al. and Guangdong Yihua Timber Industry Co. Ltd., et. al. v. United States and Coalition for American Hardwood Parity, et. al. Slip Op. 18-67, Court No. 15-00225 (June 8, 2018) the Court heard numerous arguments regarding Commerce’s determinations in an administrative review of an antidumping duty order of certain multilayered wood flooring from China. Plaintiffs and defendant intervenor challenged many aspects of Commerce’s surrogate value selections from Thailand as a substitute for the non-market economy (“NME”) of China.  For the following reasons the Court remanded certain determinations to Commerce for reconsideration.

The first issue was if the surrogate value of input plywood was based on the best available information. Commerce based its determinations on the Global Trade Atlas data for Thai imports. Commerce calculated an average unit value (“AUV”) for the data and excluded data from countries where subsidies were provided. In the administrative review, defendant intervenors raised the issue to Commerce that the data on Thai imports from Taiwan and the U.S. also contained subsidies that resulted in the AUV being aberrationally low. However, this issue was never addressed by Commerce. “Commerce also has an obligation to address important factors raised by comments from petitioners and respondents.” Id at 15. Since Commerce never addressed the issue raised by defendant intervenors the Court remanded the determinations for reconsideration.

The Court also reviewed whether the surrogate value of input overlaying glue was based on best available information. In valuing the glue, Commerce classified the glue under HTS heading 3506. Plaintiffs argued the glue was properly classifiable under HTS heading 3909, therefore making Commerce’s determinations not based on the best information. The Court held that “because the record does not contain evidence to support a determination” that glue is properly classified under HTS heading 3506 the determination was not based on the best available information. On remand, Commerce must reconsider the classification.

Commerce must reconsider its decision to assign Fine Furniture an individual weighted-average dumping rate as a voluntary respondent. Commerce is required “to accept a qualifying voluntary respondent request if the number of exporters or producers who have submitted such information is not so large that individual examination of such exporters or producers would be unduly burdensome.” Id. at 43.  In interpreting this statute Commerce decided that the number “one is so large as to allow it to reject Fine Furniture’s voluntary respondent request, even though it was the only such request”. Id. at 47. The Court found the interpretation unreasonable because “Commerce may avoid reviewing any requestor of voluntary respondent status even if the number of requestors is as small as possible.” Id. at 48. Because the Court did not agree that Commerce could exercise its discretion based on misinterpretation of section 782(a)(2) before the amendment to the TPEA, Commerce’s decision to deny Fine Furniture’s voluntary respondent request was remanded.

The final major issue was whether a downward adjustment, based on a value added tax (“VAT”) Commerce made in determining the export price of plaintiff’s subject merchandise was unlawful. In determining dumping duties Commerce compares export price in the US to the normal value of goods in a home market. To achieve accurate figures various deductions are allowed including the deduction of VAT on goods. In this case, Commerce determined that there should be an 8% deduction to the export price of plaintiff’s goods based on an a 17 % Chinese VAT and 9% refund on goods at exportation. Based on this Commerce determined that a refund was only applicable to the 8% refunded VAT on exports for and not applicable to the normal value. However, the Court held that since the 17% VAT was paid on all goods, whether they were domestically used or exported both export price and normal value could be potentially receive deductions. The Court  said “Commerce lacked evidentiary support for its finding that under the PRC’s VAT system a producer of exported merchandise .. did not incur irrecoverable input VAT on domestic sales.” The issue was remanded for Commerce to reconsider the deduction of VAT.