Slip Op. 19-41
UNITED STATES COURT OF INTERNATIONAL TRADE
TOSÇELIK PROFIL VE SAC
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v.
Before: Jennifer Choe-GrovesJudge
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Consol. Court No. 17-00018
Defendant
and
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Defendant-Intervenor.
OPINION AND ORDER
[Sustaining in part and remanding in part the U.S. Department of Commerce’s remand
redetermination in the 2014–2015 administrative review of the antidumping duty order on
welded carbon steel standard pipe and tube products from Turkey.]
Dated: April 1, 2019
David L. Simon, Law Office of David L. Simon, of Washington, D.C., for Plaintiff Tosçelik
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Elizabeth A. Speck, Senior Trial Counsel, Commercial Litigation Branch, Civil Division, U.S.
Department of Justice, of Washington, D.C., for Defendant United States. With her on the brief
were Joseph H. Hunt, Assistant Attorney General, Jeanne E. Davidson, Director, and Franklin E.
White, Jr., Assistant Director. Of counsel on the brief was Catherine D. Miller, Attorney, Office
of the Chief Counsel for Trade Enforcement and Compliance, U.S. Department of Commerce, of
Washington, D.C.
Roger B. Schagrin and Paul W. Jameson, Schagrin Associates, of Washington, D.C., for
Consolidated Plaintiff and Defendant-Intervenor Zekelman Industries. Christopher T. Cloutier
and Elizabeth J. Drake also appeared.
Consol. Court No. 17-00018 Page 2
Choe-Groves, Judge: This case involves steel products from Turkey. Plaintiff Tosçelik
3URILOYH6DF(QGVWULVL$ù (“Tosçelik”) and Consolidated Plaintiff and Defendant-Intervenor
Zekelman Industries (“Zekelman”) initiated this action contesting the final results of the
administrative review of welded carbon steel standard pipe and tube products from Turkey, in
which the U.S. Department of Commerce (“Commerce” or “Department”) found that the
products at issue are being, or are likely to be, sold in the United States at less-than-fair value.
See Welded Carbon Steel Standard Pipe and Tube Products From Turkey, 81 Fed. Reg. 92,785
(Dep’t Commerce Dec. 20, 2016) (final results of administrative review; 2014–2015), as
amended, 82 Fed. Reg. 11,002 (Dep’t Commerce Feb. 17, 2017) (amended final results of
antidumping duty administrative review; 2014–2015) (collectively, “Final Results”). Before the
court are the Final Results of Redetermination Pursuant to Court Remand, Oct. 4, 2018, ECF No.
62-1 (“Remand Results”), filed by the Department as directed in the court’s prior opinion. See
7RVoHOLN3URILOYH6DF(QGVWULVL$ùY United States, 42 CIT __, 321 F. Supp. 3d 1270 (2018)
(“Tosçelik I”). For the reasons discussed below, the court concludes that Commerce’s modified
calculation of Tosçelik’s duty drawback adjustment is not in accordance with the law and
sustains Commerce’s explanation of Tosçelik’s circumstances of sale adjustment for
warehousing expenses. The Remand Results are remanded for further proceedings consistent
with this opinion.
PROCEDURAL HISTORY
The court presumes familiarity with the facts of this case. See Tosçelik I. The court
remanded the Final Results for Commerce to reconsider (1) its calculation of Tosçelik’s duty
Consol. Court No. 17-00018 Page 3
drawback adjustment and (2) its grant of a circumstances of sale adjustment to Tosçelik for
warehousing expenses. See id. at __, 321 F. Supp. 3d at 1281.
Commerce filed its Remand Results under protest on October 4, 2018. See Remand
Results at 2. Commerce recalculated Tosçelik’s duty drawback adjustment by allocating import
duties exempted by reason of export of finished product over total exports, as reported by
Tosçelik. See id. at 14. Because Commerce perceived an imbalance in its comparison between
Tosçelik’s export price and normal value, Commerce made an additional circumstances of sale
adjustment. See id. at 12, 14. Commerce explained also its grant of a circumstances of sale
adjustment to Tosçelik for warehousing expenses. See id. at 14–17. Pursuant to Commerce’s
modified calculations, Tosçelik’s weighted-average dumping margin changed from 3.40% in the
Final Results to 3.33% in the Remand Results. Id. at 39.
Tosçelik filed comments on the Remand Results. See Comments Pl. Tosçelik Profil ve
6DF(QGVWULVL$ù Final Results Redetermination Pursuant Remand, Nov. 4, 2018, ECF No. 64
(“Pl.’s Comments”). Defendant filed a response to Tosçelik’s comments. See Def.’s Resp.
Comments Remand Redetermination, Dec. 19, 2018, ECF No. 68 (“Def.’s Resp.”). Zekelman
also filed a response to Tosçelik’s comments. See Def.-Intervenor Zekelman Industries’ Reply
Comments Tosçelik Final Results Redetermination Pursuant Remand, Dec. 19, 2018, ECF No.
67.
JURISDICTION AND STANDARD OF REVIEW
The court has jurisdiction pursuant to Section 516A(a)(2)(B)(i) of the Tariff Act of 1930,
as amended, 19 U.S.C. § 1516a(a)(2)(B)(i), and 28 U.S.C. § 1581(c). The court shall hold
unlawful any determination, finding, or conclusion found to be unsupported by substantial
Consol. Court No. 17-00018 Page 4
evidence on the record, or otherwise not in accordance with the law. 19 U.S.C.
§ 1516a(b)(1)(B)(i).
ANALYSIS
I. Duty Drawback Adjustment
If Commerce finds that merchandise is being sold at less than fair value, Commerce
issues an antidumping duty order imposing antidumping duties equivalent to the amount by
which the normal value exceeds the export price for the merchandise. See 19 U.S.C. § 1673.
Export price, or U.S. price, is the price at which the subject merchandise is first sold in the
United States. See id. § 1677a(a). A duty drawback adjustment is an adjustment to export
price—specifically, an increase by “the amount of any import duties imposed by the country of
exportation which have been rebated, or which have not been collected, by reason of the
exportation of the subject merchandise to the United States.” Id. § 1677a(c)(1)(B). The purpose
of the adjustment is to correct an imbalance and prevent an inaccurately high dumping margin by
increasing export price to the level it likely would be absent a duty drawback.
Normal value represents, on the other hand, the price at which the subject merchandise is
sold in the exporting country. See id. § 1677b(a)(1)(A). When determining the appropriate price
for comparison, Commerce may make certain price adjustments, such as a circumstances of sale
adjustment. See id. § 1677b(a)(6). The price may be:
(C) increased or decreased by the amount of any difference (or lack thereof)
between the export price or constructed export price and the price described in
paragraph (1)(B) (other than a difference for which allowance is otherwise
provided under this section) that is established to the satisfaction of the
administering authority to be wholly or partly due to--
(iii) other differences in the circumstances of sale.
Consol. Court No. 17-00018 Page 5
Id. § 1677b(a)(6)(C)(iii). The purpose of statutory adjustments to normal value is so Commerce
can “ensure[] that there is no overlap or double-counting of adjustments.” H.R. Rep. No. 103-
826, pt. 1, at 84–85 (1994), reprinted in 1994 U.S.C.C.A.N. 3773, 3857–58.
On remand, Commerce continued to grant Tosçelik a duty drawback adjustment, but
calculated the amount based on Tosçelik’s reported duties exempted by reason of export of
finished product over total exports. See Remand Results at 14. Tosçelik does not contest this
aspect of the recalculation. See Pl.’s Comments 2. Tosçelik challenges Commerce’s subsequent
circumstances of sale adjustment. Tosçelik argues that this increase to normal value nullifies the
duty drawback adjustment. See id.
In the Remand Results, Commerce added to Tosçelik’s normal value the difference
between Tosçelik’s claimed per-unit amount of duty drawback adjustment and the per-unit
amount of import duties reported in Tosçelik’s cost of production. See Remand Results at 12. In
substantiating the additional circumstances of sale adjustment, Commerce continued to rely on a
reading of Saha Thai Steel Pipe (Public) Co. Ltd. v. United States, 635 F.3d 1335 (Fed. Cir.
2011) (“Saha Thai”), that the court disapproved of in Tosçelik I. See Remand Results at 6–12.
Both the Remand Results and Defendant’s comments in support of the Remand Results rely on
language from Saha Thai discussing why export price, cost of production, and constructed value
“should be increased together, or not at all” in order to achieve a “duty-neutral” comparison. See
Remand Results at 8, 11 n.36; Def.’s Resp. 7–8. This reference to Saha Thai is taken out of
context. As explained by the court before, the quoted passage in Saha Thai relates “to an
adjustment to normal value with respect to the particular facts, exemption program, and
recordkeeping practices presented in Saha Thai, and should not be expanded to encompass all
Consol. Court No. 17-00018 Page 6
duty drawback adjustment calculations made by Commerce.” Tosçelik I, 42 CIT at __, 321 F.
Supp. 3d at 1277. When viewed in this context, Saha Thai “does not support Commerce's
methodology in the instant matter before this court.” Id. at 1278. Commerce’s explanation for
the additional circumstances of sale adjustment is unreasonable in light of the court’s previous
interpretation of Saha Thai.
The court reiterates that Commerce’s reliance on Saha Thai is misplaced. Saha Thai
concerned Commerce’s separate calculations of U.S. price and of cost of production and
constructed value. Generally, Commerce makes a duty drawback adjustment to a respondent’s
U.S. price to account for duties rebated and exempted by reason of exportation of the finished
product to the United States. Commerce makes a separate adjustment to a respondent’s cost of
production and constructed value to reflect import duties incurred when the finished product is
sold in the home market. See, e.g., +DEDú6LQDLYH7LEEL*D]ODU,VWLKVDO(QGVWULVL$ùY
United States, Slip Op. 19-10, 2019 WL 413800, at *3–4 & n.8 (distinguishing Commerce’s duty
drawback adjustment to U.S. price, which the opinion refers to as the “sales-side adjustment,”
and Commerce’s adjustment to cost of production and constructed value, which the opinion
refers to as the “cost-side adjustment”). Saha Thai sustained Commerce’s utilization of these
two corresponding adjustments but did not hold that the two adjustments should be “equal” or
“duty neutral,” as Commerce and Defendant continue to espouse here. Saha Thai does not
support Commerce’s Remand Results.
Commerce reasoned in the Remand Results that the additional circumstances of sale
adjustment was necessary to correct a perceived imbalance in the dumping margin calculation.
Consol. Court No. 17-00018 Page 7
See Remand Results at 11–12. Commerce again departs from the legislative purpose of 19
U.S.C. § 1677a(c)(1)(B). As stated in the court’s previous Opinion and Order:
The purpose of a duty drawback adjustment is to ensure a fair comparison
between normal value and export price. Under a duty drawback program,
a producer may receive an exemption or rebate from their home government
for duties on imported inputs used to produce merchandise that is
subsequently exported to the U.S. As a result, producers are still required
to pay import duties for domestically-sold goods, which leads to an increase
in normal value. A duty drawback adjustment corrects this imbalance,
which could otherwise lead to an inaccurately high dumping margin, by
increasing [export price] to the level it likely would be absent the duty
drawback.
Tosçelik I, 42 CIT at __, 321 F. Supp. 3d at 1275 (internal citations and quotations omitted).
The upward adjustment to export price contemplated by 19 U.S.C. § 1677a(c)(1)(B) aids
Commerce’s statutory duty to make a fair comparison between normal value and export price in
antidumping duty investigations. Commerce’s action on remand here negates the statutory duty
drawback adjustment that Tosçelik earned by exporting its finished product to the United States
and impinges on the agency’s ability to make a fair comparison. The court concludes that the
Remand Results are not in accordance with the law and remands this case for a second
redetermination.
Tosçelik also contends that the Remand Results are not supported by substantial
evidence. Defendant argues that because Tosçelik failed to raise this issue in administrative
proceedings before Commerce, it cannot assert it before the court under the doctrine of
exhaustion of administrative remedies. Because the court remands the Remand Results to
Commerce for a second redetermination, the court need not reach this argument.
Consol. Court No. 17-00018 Page 8
II. Circumstances of Sale Adjustment for Warehousing Expenses
Commerce granted Tosçelik a circumstances of sale adjustment for Tosçelik’s
warehousing expenses in the Final Results. Zekelman argued that Commerce’s decision was
unsupported by substantial evidence because Commerce failed to address contrary evidence on
the record allegedly showing that Tosçelik overstated its warehousing expenses in its
questionnaire responses. The court agreed with Zekelman and remanded the Final Results for
Commerce to “adequately address contrary evidence on the record and provide clear and
discernable reasons for its decision.” Tosçelik I, 42 CIT at __, 321 F. Supp. 3d at 1281.
On remand, Commerce continued to grant Tosçelik a circumstances of sale adjustment
for warehousing expenses. See Remand Results at 16–17. Relying on Tosçelik’s September 28,
2015 Section B Questionnaire Response and March 28, 2016 Supplemental Questionnaire
Response, Commerce found that Tosçelik did not overstate its warehousing expenses. See id. at
16. Tosçelik’s requested adjustment was based on data reflecting “the greatest level of detail
maintained in Tosçelik’s accounting records.” Id. at 15. The accounting records showed the
total quantity of goods shipped at the warehouse. See id. Tosçelik removed scrap generation
expenses that related exclusively to cut-to-length services, which do not qualify as warehousing
expenses, from its requested adjustment. See id. Commerce reasonably relied on Tosçelik’s
questionnaire responses, and therefore the court concludes that Commerce’s grant of
circumstances of sale adjustment is supported by substantial evidence. Commerce’s grant of
circumstances of sale adjustment for warehousing expenses is sustained.
Consol. Court No. 17-00018 Page 9
CONCLUSION
For the aforementioned reasons, the court concludes that Commerce’s modified
calculation of Tosçelik’s duty drawback adjustment is not in accordance with the law, and
remands the Remand Results for a second redetermination. The court sustains Commerce’s
explanation of Tosçelik’s circumstances of sale adjustment for warehousing expenses.
Accordingly, it is hereby
ORDERED that the Remand Results are remanded to Commerce for further
proceedings; and it is further
ORDERED that Commerce shall file the second remand redetermination by May 16,
2019; and it is further
ORDERED that Commerce shall file the administrative record on the second remand
redetermination by May 30, 2019; and it is further
ORDERED that comments in opposition to the second remand redetermination shall be
filed by June 17, 2019; and it is further
ORDERED that comments in support of the second remand redetermination shall be
filed by July 17, 2019; and it is further
ORDERED that the joint appendix for the second remand redetermination shall be filed
by August 16, 2019.
/s/ Jennifer Choe-Groves
Jennifer Choe-Groves, Judge
Dated: April 1, 2019
New York, New York