Kajaria Iron Castings Pvt. Ltd. v. United States

RADER, Circuit Judge,

dissenting-in-part.

Because one aspect of Commerce’s methodology in this ease imposes on the producers a countervailing duty in excess of any subsidy, I must respectfully dissent. Commerce must publish a rate that “shall presumptively apply to all merchandise of such class or kind exported from the country investigated, except that ... if there is a significant differential between companies receiving subsidy benefits ... the order may provide for differing countervailing duties.” 19 U.S.C. § 1671e(a)(2)(A). However, title 19 only authorizes Commerce to impose a countervailing duty that is “equal to the amount of the net subsidy.” 19 U.S.C. § 1671(a) (emphasis added). The statute therefore sets a limit on the amount of duty Commerce may collect. In this case, Commerce’s presumptive rate imposes duties in excess of the net subsidy. Therefore, Commerce’s regulations, as applied in this case, ai’e an impermissible application of the statute.

In calculating a presumptive rate of 5.53%, Commerce included the net subsidy rates of three firms (Super Castings’ 41.75% rate, Kajaria’s 16.14% rate, and Dinesh Brothers’ 0% rate) that Commerce had determined had received significantly different subsidy benefits. In its order, Commerce assigned individual rates to the three significantly different firms and assigned the 5.53% presumptive rate to the other producers. Because, however, it included the significantly different rates in the calculation of the presumptive rate, Commerce imposed countervailing duties not equal to the amount of the subsidy. Rather, Commerce’s duties rise to approximately 130% of the net subsidy actually received from the government of India by the producers. Because the statute limits the duty to an amount equal to the subsidy, Commerce’s calculation of the presumptive rate is not reasonable.

Commerce cites Ipsco, Inc. v. United States, 899 F.2d 1192 (Fed.Cir.1990), as support for the averaging method used to calculate the presumptive rate in this case. In Ipsco, this court rejected Commerce’s presumptive rate because it excluded producers receiving no subsidy or only a de minimis subsidy. See id. at 1194. If this court had allowed Commerce to exclude producers with de minimis subsidization rates from the calculation, the resulting presumptive rate would likely have exceeded the actual net subsidy. This court stated that Commerce must calculate a presumptive rate that “bear[s] some relation to the approximate average rate of subsidization of the subject goods.” Id. at 1197. Therefore, this court reversed Commerce’s calculation in Ipsco.

Commerce argues that, because Ipsco requires it to include significantly lower rates in its calculations, it must also include significantly higher rates. I would agree-for the facts in Ipsco. This case, however, is not Ipsco. Here, subsidy rates are known for every producer potentially affected by the countervailing duty order. Therefore, the actual net subsidy can be determined. In this case, Commerce’s methodology, which is usually reasonable when the actual net subsidy is not known, results in the imposition of countervailing duty that is not equal to the net subsidy. Therefore, the principles of the statute and this court’s Ipsco opinion require a different calculation. The statute admittedly gives Commerce some latitude in choosing a method to calculate rates. It does not, however, excuse Commerce from the requirement that the countervailing duty must be “equal to the amount of the net subsidy.” 19 U.S.C. § 1671(a).

With respect to the other issues in this case, I join the court in stating that, under these circumstances, Commerce calculated the subsidy from the section 80HHC tax deduction in a manner that is inconsistent with the controlling statutes. Because a portion of the section 80HHC deduction is attributable to the CCS over-rebates and to the IPRS rebates, and because the Producers have identified the amounts so attributable, Commerce must take those amounts into account in calculating the “subsidy.” See 19 U.S.C. § 1677(5). Commerce’s failure to take those amounts into account results in the imposition of countervailing duties that *1182exceed the net subsidy actually provided and is therefore contrary to the statutory mandate. I therefore join parts I, II, and III of the opinion. It is also well established that Commerce may use the best information available to calculate the subsidy received by an uncooperative producer. Therefore, I join part V of the opinion. I dissent from part IV to emphasize the statutory limit on Commerce’s power to impose countervailing duties.