Zenith Electronics Corp. v. United States

Opinion

RESTANI, Judge:

This matter is before the court following a remand order. See Zenith Elecs. Corp. v. United States, Slip Op. 94-146 (Sept. 19, 1994). The court ordered the United States Department of Commerce (“Commerce”) to (1) recalculate the value-added tax (“VAT”) adjustment to United States price (“USP”) according to its new methodology; (2) re-classify a credit rebate as a direct selling expense; and (3) reconsider the treatment of expenses for warranty-related fees, the use of best information available (“BIA”) for freight allowances, and the adjustment for merchandise and parts. Remaining at issue are the first two items, together with the BIA issue.

For reasons expressed in its remand order, the court did not allow Commerce to reconsider the first two items. Commerce has complied with the court’s order as to those items. As in Zenith Elecs. Corp. v. United States, Slip Op. 95-35, at 2 (March 9, 1995), plaintiffs challenge that aspect of Commerce’s new methodology that does not call for the USP adjustment to be capped by the absolute amount of the tax paid in the home market. For the reasons stated in Zenith, id., plaintiffs’ position is rejected. Earlier cases have imposed a cap related to Commerce’s prior methodology of adjusting for the absolute amount of the foreign market tax. See, e.g., Federal-Mogul Corp. v. United States, 862 F. Supp. 384, 395 (Ct. Int’l Trade 1994). More recently, however, the court has required that the VAT adjustment be made via application of the home market tax rate, to a tax base that is appropriately adjusted. See Zenith, Slip Op. 94-146, at 3. Commerce’s new methodology, which implements the court’s direction does not require the cap applicable to the prior methodology. See Federal-Mogul, 862 F. Supp. at 394-95.

*353As to the credit rebates at issue, Commerce is not required to explain its reason for granting direct selling expense treatment to the rebates. The reason was obvious. Commerce followed the Court’s specific direction, which gave Commerce no choice. Furthermore, the court rejects any attempt on the part of challengers to the remand determination to seek, at this time, correction of clerical errors made in 1988. The remand order was limited.

Finally, as to the BIA issue, at the request of both défendant and defendant-intervenors Samsung Electronics Co., Ltd., and Samsung Electronics America, Inc. (collectively “Samsung”), the court directed Commerce to reconsider whether it had given Samsung the opportunity to submit freight allowance discount information on a sales-specific basis. Zenith, Slip Op. 94-146, at 20. On remand, Commerce decided it had not given Samsung such an opportunity and reopened the record to allow Samsung to submit such data. Samsung, however, could not respond because it no longer had the data. On Samsung’s motion, this has been an open issue since 1988. Samsung has known since 1988 that Commerce wanted sales-specific information. Under these circumstances, Samsung was required to maintain specific documentation and cannot now rely on the simple allocation it submitted in 1988. When parties agree to the stay of a case, they must take steps to preserve documents relevant to that case or suffer the consequences.

Accordingly, Commerce’s remand determination is sustained.