Sichuan Changhong Electric Co. v. United States

Slip Op. 06-141
UNITED STATES COURT OF INTERNATIONAL TRADE
________________________________________
)
SICHUAN CHANGHONG ELECTRIC CO., LTD., )
)
Plaintiff, )
) Richard K. Eaton,
and ) Judge
)
PHILIPS ELECTRONICS NORTH AMERICA CORP.,) Consol.
APEX DIGITAL INC., PHILIPS CONSUMER ) Court No. 04-00265
ELECTRONICS CO. OF SUZHOU LTD., TCL )
CORP., )
Plaintiff-Intervenors, ) Public
) Version
v. )
)
UNITED STATES, )
)
Defendant, )
)
and )
)
INTERNATIONAL BROTHERHOOD OF )
ELECTRICAL WORKERS, FIVE RIVERS )
ELECTRONICS INNOVATION, LLC, KONKA )
GROUP CO., LTD., INDUSTRIAL DIVISION OF )
THE COMMUNICATION WORKERS OF AMERICA, )
PRIMA TECHNOLOGY, INC. )
)
Deft.-Intervenors )
________________________________________)

OPINION

Dated: September 14, 2006

[United States Department of Commerce’s Final Determination
sustained in part, remanded in part.]

Wiley, Rein & Fielding, LLP (Charles Owen Verrill, Jr.), for
plaintiff.

Hunton & Williams, LLP (Richard Preston Ferrin and William
Silverman), for plaintiff-intervenors Philips Electronics North
America Corp. and Philips Consumer Electronics Co. Of Suzhou Ltd.
Consol. Court No. 04-00265 Page 2

McDermott, Will & Emery, LLC (Raymond Paul Paretzky), for
plaintiff-intervenor TCL Corp.

O’Melveny & Myers, LLP (Veronique Lanthier), for plaintiff-
intervenor Apex Digital.

Peter D. Keisler, Assistant Attorney General, Civil
Division, United States Department of Justice; David M. Cohen,
Director, Commercial Litigation Branch, Civil Division, United
States Department of Justice; Jeanne E. Davidson, Deputy
Director, International Trade Section, Commercial Litigation
Branch, Civil Division, United States Department of Justice
(Michael David Panzera); United States Department of Commerce,
Office of Chief Counsel for Import Administration (Marisa Beth
Goldstein), of counsel, for defendant.

Kelley Drye Collier, Shannon PLLC, (Mary Tuck Staley), for
defendant-intervenors Five Rivers Electronics Innovation, LLC;
International Brotherhood of Electrical Workers; Industrial
Division of the Communication Workers of America.

White & Case LLP, (Adams Chi-Peng Lee), for defendant-
intervenor Konka Group Co., Ltd.

Willkie, Farr & Gallagher, LLP, (Daniel Lewis Porter), for
defendant-intervenor Prima Technology, Inc.

Eaton, Judge: Before the court is a consolidated action for

judgment upon the agency record.1 Plaintiff Sichuan Changhong

Electric Co., Ltd., (“Changhong” or “plaintiff”), and defendant-

1
On September 19, 2005, the court ordered the
consolidation of Sichuan Changhong Electric Co., Ltd., et. al.,
v. United States, number 04-00265 and IBEW v. United States,
number 04-00270 under the lead case, Sichuan Changhong Electric
Co., Ltd., et. al., v. United States, consolidated court number
04-00265.

Prior to consolidation, IBEW, Industrial Division of the
Communication Workers of America, and Five-Rivers Electronics
Innovation, LLC, were plaintiffs to the action, IBEW v. United
States, number 04-00270. Upon consolidation, however, the
original plaintiff-parties were designated as defendant-
intervenors.
Consol. Court No. 04-00265 Page 3

intervenor International Brotherhood of Electrical Workers,

(“IBEW” or “defendant-intervenors”) et. al., challenge aspects of

the United States Department of Commerce’s (“Commerce” or “the

Department”) Final Determination of Sales at Less Than Fair Value

and Negative Final Determination of Critical Circumstances:

Certain Color Television Receivers From the People’s Republic of

China. See Certain Color Televisions from the People’s Republic

of China, 69 Fed. Reg. 20,594 (Apr. 16, 2004) (“Final

Determination”), as amended by Notice of Amended Final

Determination of Sales at Less Than Fair Value: Certain Color

Television Receivers from the People’s Republic of China, 69 Fed.

Reg. 28,879 (May 19, 2004) (“Amended Final Determination”). The

court has jurisdiction pursuant to 28 U.S.C. § 1581(c) (2000) and

19 U.S.C. § 1516a(a)(2)(B)(iii) (2000). For the following

reasons, the court sustains the Final Determination in part, and

remands it in part.

BACKGROUND

On May 2, 2003, petitioners IBEW, Industrial Division of the

Communication Workers of America (“IUE-CWA”), and Five Rivers

Electronics Innovation LLC (“Five Rivers LLC”), filed an

antidumping duty petition with Commerce alleging that imports of

color television receivers (“CTRs”) from the People’s Republic of

China (“PRC”) were, or were likely to be sold at less than fair
Consol. Court No. 04-00265 Page 4

value in the United States. See Pet. for the Imposition of

Antidumping Duties (ITA May 2, 2003). On May 29, 2003, Commerce

initiated an antidumping investigation. See Notice of Initiation

of Antidumping Duty Investigations: Certain Color Television

Receivers from Malaysia2 and the People’s Republic of China, 68

Fed. Reg. 32,013 (May 29, 2003). The period of investigation

(“POI”) was October 1, 2002 through March 31, 2003.3 Id.

On June 16, 2003, Commerce issued antidumping questionnaires

to multiple Chinese companies and the Chinese Ministry of

Commerce. Because of the substantial number of respondents,

Commerce thereafter chose to limit its investigation to the four

largest (“the mandatory respondents”): Changhong; Konka Group

Company, Ltd.; Philips Consumer Electronics Co. of Suzhou Ltd.

(“Philips”); TCL Holding Company Ltd.; and Xiamen Overseas

Chinese Electronic Co., Ltd. See generally 19 U.S.C. § 1677f-

1(c)(2) (“If it is not practicable to make individual weighted

average dumping margin determinations . . . because of the large

2
Although part of the initial investigation, merchandise
from Malaysia is not the subject of this consolidated action.
3
Pursuant to 19 C.F.R. § 351.204(b)(1)(2005), the POI
for an investigation involving merchandise from a nonmarket
economy is the two most recent fiscal quarters prior to the month
of the filing of the petition, i.e., May 2002.
Consol. Court No. 04-00265 Page 5

number of exporters or producers involved in the investigation or

review, the administering authority may determine the weighted

average dumping margins for a reasonable number of exporters or

producers by limiting its examination to . . . exporters and

producers accounting for the largest volume of the subject

merchandise from the exporting country that can be reasonably

examined.”). Petitioners thereafter filed their “Critical

Circumstances Allegations” with Commerce, alleging that critical

circumstances4 existed with respect to imports of CTRs from

Malaysia5 and the PRC. See Letter from Mary T. Staley to Lou

Apple, et. al. of Oct. 16, 2003.

On November 28, 2003, Commerce published its affirmative

preliminary determination. See Notice of Preliminary

Determination of Sales at Less Than Fair Value, Postponement of

Final Determination, and Affirmative Preliminary Determination of

4
A finding of critical circumstances pursuant to 19
U.S.C. § 1673b(e), is an emergency measure to “provide prompt
relief to domestic industries suffering from large volumes of, or
a surge over a short period of imports.” H.R. Rep. No. 96-317 at
63 (1979). It is designed to deter “exporters whose merchandise
is subject to an investigation from circumventing the intent of
the law by increasing their exports to the United States during
the period between initiation of an investigation and a
preliminary determination by [Commerce].” Id; see Coalition for
the Preservation of Am. Brake Drum and Rotor Aftermarket Mfrs. v.
United States, 23 CIT 88, 112 n.38, 44 F. Supp. 2d 229, 252 n.38
(1999) (quoting S. Rep. No. 103-412) (1994).
5
On April 16, 2004, Commerce terminated its
investigation with respect to Malaysia.
Consol. Court No. 04-00265 Page 6

Critical Circumstances: Certain Color Television Receivers from

the People’s Republic of China, 68 Fed. Reg. 66,800 (ITA Nov. 28,

2003) (“Preliminary Determination”). On April 16, 2004, Commerce

published its Final Determination. See Final Determination, 69

Fed. Reg. 20,594. In its Final Determination, Commerce

reaffirmed its finding that all of the Chinese respondents had

sold merchandise in the United States at less than fair value.

Id. Commerce also found, however, that “for purposes of the

final determination, critical circumstances do not exist with

regard to imports of CTVs from the PRC.” See Id. at 20,596.

STANDARD OF REVIEW

When reviewing a final determination in an antidumping or

countervailing duty investigation, “[t]he court shall hold

unlawful any determination, finding, or conclusion found . . . to

be unsupported by substantial evidence on the record, or

otherwise not in accordance with law . . . .” 19 U.S.C. §

1516a(b)(1)(B)(i). “Substantial evidence is ‘such relevant

evidence as a reasonable mind might accept as adequate to support

a conclusion.’” Huaiyin Foreign Trade Corp. (30) v. United

States, 322 F.3d 1369, 1374 (Fed. Cir. 2003) (quoting Consol.

Edison Co. v. NLRB, 305 U.S. 197, 229 (1938)). “Substantial

evidence is more than a mere scintilla.” Consol. Edison, 305

U.S. at 229. The existence of substantial evidence is determined
Consol. Court No. 04-00265 Page 7

“by considering the record as a whole, including evidence that

supports as well as evidence that ‘fairly detracts from the

substantiality of the evidence.’” Huaiyin, 322 F.3d at 1374

(quoting Atl. Sugar, Ltd. v. United States, 744 F.2d 1556, 1562

(Fed. Cir. 1984)).

DISCUSSION

I. Plaintiff Changhong’s Challenges

A. Commerce’s Selection of Infodriveindia Data to Derive
Surrogate Value for Certain Inputs

The first issue presented for review concerns the valuation

of 25-inch Curved Picture Tubes (“CPTs”), and television Speakers

(“Speakers”). With the exception of these two inputs, Commerce

valued respondents’ factors of production, using import

statistics published in the Monthly Statistics of the Foreign

Trade of India (“MSFTI”), and the World Trade Atlas Trade

Information System (“World Trade Atlas”).6 Although noting that

import data from MSFTI was the Department’s usual source of

surrogate value data, Commerce valued the CPTs and the Speakers

using data obtained from Infodriveindia, a fee-based website

6
These sources compile and disseminate official import
statistics collected by the Government of India. The MSFTI is
published by the Directorate General of Commercial Intelligence
and Statistics of the Ministry of Commerce and Industry by the
Government of India, and is available in the World Trade Atlas.
See http://www.gtis.com/wta.htm (last visited August 18, 2006).
Consol. Court No. 04-00265 Page 8

reporting Indian customs data. Changhong contests Commerce’s use

of this data.7

a. Relevant Law

In an antidumping investigation, Commerce must determine

whether the subject merchandise is being, or is likely to be

sold, at less than fair value in the United States by comparing

the export price,8 with the normal value (“NV”) of the

merchandise. See 19 U.S.C. 1677b(a). The NV of subject

merchandise is “the price at which the foreign like product is

first sold . . . for consumption . . . in the usual commercial

quantities and in the ordinary course of trade . . . at the same

level of trade as the export price . . . .” See §

7
As a producer and exporter of CTRs covered by the
antidumping duty order, Changhong is an “interested party” within
the meaning of 19 U.S.C. § 1677(9)(A), and is thus entitled to
challenge Commerce’s determination. See 19 U.S.C. § 1516a(a)(2).

8
The statute defines export price as:

the price at which the subject
merchandise is first sold (or
agreed to be sold) before the date
of importation by the producer or
exporter of the subject merchandise
outside of the United States to an
unaffiliated purchaser in the
United States or to an unaffiliated
purchaser for exportation to the
United States, as adjusted by
subsection (c) of this section.”

19 U.S.C. § 1677a(a).
Consol. Court No. 04-00265 Page 9

1677b(a)(1)(B)(i). It is usually determined by examining sales

of the subject merchandise in the exporter’s home market, or in a

third country. Id.

In cases involving exports from a nonmarket economy country

(“NME”),9 however, where “available information does not permit”

the calculation of NV using prices paid for factors of

production, 19 U.S.C. § 1677b(c) instructs Commerce to determine

normal value “on the basis of the value of the

factors of production10 utilized in producing the merchandise . .

9
19 U.S.C. § 1677(18)(A) defines a nonmarket economy
country as “any foreign country that the administering authority
determines does not operate on market principles of cost or
pricing structure, so that sales of merchandise in such country
do not reflect the fair value of the merchandise.”

In a market economy, prices are generally the result of
competitive forces of supply and demand. In a nonmarket economy,
however, supply and demand forces do not influence producers’
business decisions to the same extent. Costs, prices and
allocation of resources are frequently determined by government-
controlled entities, without regard to market forces. As a
result, NME prices do not reflect the fair value of the
merchandise. See Georgetown Steel Corp. v. United States, 801
F.2d 1308, 1315 (Fed. Cir. 1986).
10
The factors of production used in producing the subject
merchandise include, but are not limited to: (1) hours of labor
required; (2) quantities of raw materials employed; (3) amounts
of energy and other utilities consumed; and (4) representative
capital cost. See § 1677b(c)(3). Subsection 1677b(c)(1) further
directs Commerce to add to this value, an amount for general
expenses and profit plus the cost of containers, coverings, and
other expenses. See § 1677(b)(c)(1).
Consol. Court No. 04-00265 Page 10

. .”11 § 1677b(c)(1). In most investigations involving NMEs, the

factors of production are valued using surrogate values from a

market economy country. See Shakeproof Assembly Components, Div.

Of Ill. Tool Works, Inc. v. United States, 268 F.3d 1376, 1381

(Fed. Cir. 2001). The Federal Circuit, however, has recognized

that surrogate country values are “at best, an estimate” of “what

a non-market economy manufacturer might pay in a market-economy

setting.” See id. at 1382 (citing Lasko Metal Prods., Inc. v.

United States, 43 F.3d 1442, 1445–46 (Fed. Cir. 1994)).

Section 1677(b)(c) further requires that the valuation of

factors of production “be based on the best available information

regarding the values of such factors in a market economy country

. . . .” § 1677(b)(c)(1). The words “best available

information” are not statutorily defined. See Allied Pac. Food

(Dalian) Co., Ltd. v. United States, 30 CIT __, __, 435 F. Supp.

2d 1295, 1313 (2006) (“Congress did not define the term “best

available information” . . . [however,] [t]he Department’s

exercise of discretion . . . must be guided by the larger purpose

of the antidumping law. The [Tariff] Act sets forth procedures

11
Commerce has treated the PRC as an NME in all past
antidumping investigations. See, e.g., Final Determination of
Sales at Less Than Fair Value and Critical Circumstances: Certain
Malleable Iron Pipe Fittings From the People’s Republic of China,
68 Fed. Reg. 61,395, 61,396 (ITA Oct. 28, 2003). A country’s
designation as an NME remains in effect until it is revoked by
the Department. See 19 U.S.C. § 1677(18)(c)(i).
Consol. Court No. 04-00265 Page 11

in an effort to determine margins as accurately as possible. ”)

(internal citations and quotations omitted). Commerce’s exercise

of discretion is, of course, subject to judicial review. Where a

question arises concerning the time period from which surrogate

prices have been obtained, this Court has found:

While accuracy is of utmost importance, 19
U.S.C. § 1677b(c) fails to indicate the time
periods from which surrogate values are
supposed to be taken. This court, however,
has repeatedly recognized that Commerce’s
practice is to use surrogate prices from a
period contemporaneous with the period of
investigation. Accordingly, while the
standard of review precludes the court from
determining whether Department’s choice of
surrogate values was the best available on an
absolute scale, the court may determine the
reasonableness of Commerce’s selection of
surrogate prices.

See Citic Trading Co. Ltd. v. United States, 27 CIT __, __, slip

op. 03-23 at 16 (Mar. 4, 2003) (not published in the Federal

Supplement)(footnotes omitted).

b. Commerce’s Valuation of 25-inch CPTs

As an initial matter, Changhong argues that Commerce has

“explicitly rejected the use of Infodriveindia as a source of

information” in other investigations. Br. Pl. Sichuan Changhong

Electronic Co., Ltd. Supp. Rule 56.2 Mot. J. Ag. Rec. (“Pl.’s

Br.”) at 8. In response, the Department insists that “simply

because Commerce determines not to use a particular data source
Consol. Court No. 04-00265 Page 12

in one administrative proceeding does not preclude it from using

that same data source in another administrative proceeding

involving a different product and a different administrative

record.” Def.’s Mem. Opp. Mot. For J. Ag. Rec. (“Def.’s Resp.”)

at 15. Commerce further maintains that “selection of a data

source in a particular determination” does not “constitute[] a

‘practice’ forever binding Commerce to use that data source or

requiring explanation to justify use of any other data source.”

Id. at 15.

Here, plaintiff has produced no evidence demonstrating that

Commerce has an established practice of not using Infodriveindia

data. See Ranchers-Cattlemen Action Legal Fund v. United States,

23 CIT 861, 884-85 74 F. Supp. 1253, 1374 (1999)(“An action . . .

becomes an ‘agency practice’ when a uniform and established

procedure exists that would lead a party, in the absence of

notification of change, reasonably to expect adherence to the

established practice or procedure.”). Therefore, while Commerce

may have passed up opportunities to use Infodriveindia

information in the past, this alone is not a bar to its use to

value CPTs in this case.

Next, Changhong argues that Commerce erred in its use of the
Consol. Court No. 04-00265 Page 13

Infodriveindia data because there is “no sound reason” for

Commerce’s departure from, what Changhong characterizes as, its

“past practice of using official [MSFTI] import statistics as the

basis for surrogate values for 25-inch CPTs.” Pl.’s Br. at 7.

In support of its position, Changhong contends that not only has

Commerce consistently used MSFTI data in past determinations, but

it has used these statistics “even where the import categories

involved were basket categories containing a range of items.”

Id. at 9–10. It further argues that Commerce should have valued

all CPTs using a single value derived from merchandise imported

under Indian HTS number 8540.11.00, which it claims is “not even

truly a basket category as it contained only color picture

tubes,” and is therefore specific to the input to the 25-inch

CPTs. Pl.’s Br. at 11. The court finds Changhong’s contentions

unconvincing.

As an initial matter, despite Changhong’s arguments to the

contrary, information on the record indicates that Indian HTS

category 8540.11.00 includes not only 25-inch curved CPTs, but

also other types of picture tubes in other sizes. See Pet.’s

Addt’l Factual Info. (“IBEW Submission”) at 24. A review of

MSFTI data indicates that reported within category 8540.11.00,

are values reflecting curved and flat-screened, 14, 21, 24, 28,
Consol. Court No. 04-00265 Page 14

and 29-inch CPTs, none of which are within the scope of this

investigation. See id. at Attachment 3 (listing CPT import data

for category 8540.11.00). Indeed, an examination of this data

reveals that the majority of imports under HTS number 8540.11.00

are of 14-inch and 21-inch CPTs. Id. Thus, Changhong’s proposed

source is not specific to the merchandise at issue.

The Infodriveindia data, on the other hand, was

disaggregated into individual imports of specific size and type

of color picture tube. See Factors Valuation Mem. at Attachment

3 (displaying size-specific and type-specific examples of

Infodriveindia data for 29-inch flat CTRs). Commerce explained

that the product specificity of the data for this input was

particularly important in its source selection “because, as

Changhong concedes, color picture tubes . . . are important parts

of color televisions, and they constitute a [significant] percent

of the total value of materials used to produce televisions.”

Def.’s Resp. at 18 (citing Pl.’s Br. at 8.).

In addition, although the Department maintains preferences

for using particular data sources, courts have held that no one

source will always provide the best available information. See

Peer Bearing Co. v. United States, 22 CIT 472, 480, 12 F. Supp.
Consol. Court No. 04-00265 Page 15

2d 445, 455 (1998) (“Although Commerce expresses a strong

preference for obtaining all factor values from a single

surrogate source, both case law and Commerce’s determinations are

filled with instances in which Commerce used a blend of sources

and surrogates to determine FMV.”). Thus, Commerce is not bound

by its preference for a particular source, rather its charge is

to use the best available information. Based on the foregoing,

the court finds reasonable Commerce’s preference for

Infodriveindia data because that information was more product and

size specific than that preferred by plaintiff.

Next, Changhong contends that the Infodriveindia data “was

unreliable because Commerce lacked such basic information as:

where Infodriveindia obtained the underlying data; how the

information was collected; what was included and what was left

out,” inter alia. See Pl.’s Br. at 14.

Plaintiff’s contentions lack merit. First, to verify the

reliability of the data collection and the authenticity of the

information,12 Commerce contacted Infodrive India Pvt. Ltd., the

12
After a petitioner [[ ]] submitted a proposal to
use import statistics from Infodriveindia to derive surrogate
values, Changhong argued that the source was unreliable. See
IBEW Oct. 6, 2003 Submission at 4, 10; Changhong Nov. 6, 2003
Submission at 9.
Consol. Court No. 04-00265 Page 16

company responsible for maintaining the Infodriveindia website.

Following this inquiry, the Department placed on the record, e-

mail correspondence between one of its analysts and a

representative from Infodriveindia, reflecting that the company:

“(1) obtains the information in question from official Indian

customs data; (2) receives daily customs data transmitted each

month from the Indian customs department; and (3) presents the

Indian customs data exactly as it is received, without additions

or deletions.” See Issues & Decision Mem. at 43.13 Plaintiff

has made no showing that seriously calls these representations

into question. Thus, the court finds that Commerce has

13
An example of the content of these emails is as
follows:

1) Does the information on infodriveindia
consist of any other source besides
official import statistics from the
Indian government (i.e., customs)? . . .

No this covers only official source. . . .

2) Do you delete/omit any information from the data
you receive from Indian customs before making it
available on your website? . . .

We don’t delete and add any information which
Indian Gov’t Publishes, we relicate [sic] exactly
the same information.

Memo to File regarding “Placing Information on the Record
Regarding Infodriveindia in the Antidumping Duty Investigation on
Color Television Receivers from the People’s Republic of China”
(“Infodriveindia Verification Letter) at 1–2.
Consol. Court No. 04-00265 Page 17

adequately addressed Changhong’s initial allegations of

unreliability.

Plaintiff next objects to what it calls the “unreliability

of the Infodriveindia data . . . [that] is highlighted by the

mystery regarding the country of origin of the tubes in question.

For 25" curved tubes . . . 538 of the 858 units reported by

Infodriveindia were shown as coming from Austria and France. Yet

. . . there was no production of curved picture tubes in either .

. . countr[y].” Pl.’s Br. at 14. Commerce, however, insists

that the country of origin is not relevant to its inquiry.

Rather, what matters for Commerce is that the CPTs were the

subject of a market economy sale. The Department cites 19 C.F.R.

§ 351.408 to bolster its argument. See 19 C.F.R. § 351.408(c)(1)

(“[W]here a factor is purchased from a market economy supplier

and paid for in market economy currency, the Secretary normally

will use the price paid to the market economy supplier.”). Thus,

for Commerce, § 351.408(c)(1) directs the use of prices derived

from market economy transactions, not that the merchandise be

produced in a market economy country. See Polyethylene Retail

Carrier Bag Comm. v. United States, 29 CIT __, __, slip. op. 05-

157 at 47 (Dec. 13, 2005) (not published in the Federal

Supplement) (“In past cases, Commerce has interpreted 19 C.F.R. §
Consol. Court No. 04-00265 Page 18

351.408(c)(1) as not disqualifying transactions based on the

goods’ country of origin.”). On this record it is reasonable to

assume that any price anomaly resulting from a sale by a

nonmarket economy producer in its home country has been corrected

by the subsequent market economy sale. Commerce was, therefore,

within its discretion in finding that even if Austria and France

did not produce CPTs, because they are market economy countries,

imports into the United States that have been the subject of a

sale in these countries are legitimate sources of surrogate value

data. Issues & Dec. Mem. at 51.

Changhong further contests the reliability of the

Infodriveindia data claiming that “none [of it] concerned imports

during the [POI],” and that the “imports reported by

Infodriveindia entered India up to eight months before the

beginning of the investigation.” Pl.’s Br. at 16 (“All of the

information upon which Commerce relied for surrogate values for

25" curved picture tubes was dated before the period of

investigation.”).

In defense of its findings, Commerce states that it

considered it sufficient that the Infodriveindia data was

“contemporaneous,” or from “a period very close to the beginning

or end of the [period of investigation] . . . .” Def.’s Resp. at
Consol. Court No. 04-00265 Page 19

21 (citing to Issues & Decision Mem. at 51). Specifically,

Commerce states that “the Infodriveindia data reflected data

beginning six months14 before the start of the [POI], but ending

one month before the close of the POI.”

Although the Department states that there was near

contemporaneity between the POI and the data contained in

Infodriveindia, it does not point to any record evidence

supporting its claim – nor has the court found any. In order for

the court to assess Commerce’s statements as to contemporaneity,

it must examine record evidence supporting them. Here, so far as

can be determined, absent from the record is any evidence

indicating if the Infodriveindia data fell within, or near the

POI. On remand, Commerce must provide record evidence indicating

when the imports reported in the Infodriveindia data entered

India. If indeed the imports entered before the beginning of the

POI, and Commerce wishes to continue to rely on these values, it

must explain how this information is most contemporaneous with

the POI, or why the non-contemporaneity is outweighed by other

aspects of the data making it the best available information.

14
Defendant itself is unclear as to whether the data is
six, seven, or eight months before the POI. While in its
response defendant claims that the data is six months before the
POI, Commerce, in its Issues and Decision Memorandum, indicates
that the data is seven months before the POI. Neither document
provides any citation establishing the actual dates for the
information.
Consol. Court No. 04-00265 Page 20

See Int’l Imaging Materials, Inc. v. United States, 30 CIT __,

__, slip op. 06-11 at 13 (Jan. 23, 2006) (not published in the

Federal Supplement) (“[An] agency must explain its rationale . .

. such that a court may follow and review its line of analysis,

its reasonable assumptions, and other relevant

considerations.”)(quoting Allegheny Ludlum Corp. v. United

States, 29 CIT __, __ 358 F. Supp. 2d 1334, 1344) (2005)

(alterations in original)) .

Changhong also contends that the Infodriveindia data did not

reflect “usable commercially significant entries,” and thus was

unreliable. Pl.’s Br. at 15. The Infodriveindia data at issue

consisted of four entries, comprised of sales of 858 units. See

Prelim. Factors Mem. at Attachment 6. In response to plaintiff’s

assertions, Commerce’s sole argument is that “there is no

information on the record . . . to show that the quantities shown

in the Infodriveindiadata do not represent commercial

quantities.” Issues & Decision Mem. at 51.

The Court has previously found that Commerce can rely on

import statistics as a basis for surrogate values only “after

[reasonably] concluding that [the import statistics] are based on

commercially and statistically significant quantities.”

Polyethylene, 29 CIT at 43 (internal quotations and citations
Consol. Court No. 04-00265 Page 21

omitted). While Commerce has stated its conclusion, it has

neither explained why its conclusion is reasonable, nor supported

its conclusion with record evidence. In order to rely on the

Infodriveindia statistics, on remand, Commerce must point to

record evidence supporting its conclusion that the quantities

shown in the Infodriveindia data represent commercial quantities,

and explain why its conclusion is valid. See, e.g., Shanghai

Foreign Trade Enters. Co. v. United States, 28 CIT __, __, 318 F.

Supp. 2d 1339, 1352–53 (2004).

c. Commerce’s Valuation of Speakers

Changhong also contests Commerce’s valuation of Speakers

using the Infodriveindia data. In reaching its determination,

Commerce placed on the record surrogate value information for

Speakers obtained from Infodriveindia for September 2002 and

April 2003 (“March 17th Infodriveindia data”). Commerce invited,

and Changhong submitted, comments on the use of this information.

See Issues & Decision Mem. at 57. Changhong and other Chinese

producers subsequently placed four invoices for purchases of

Speakers by television producers in India on the record. See

Issues & Decision Mem. at 57–58. Changhong urged Commerce to

rely upon its January 2003 invoice submission as the best

available information as to price. In an ancillary argument,

plaintiff further insists that the invoice is the best available

information because the January 2003 invoice is within the POI.
Consol. Court No. 04-00265 Page 22

See Pl.’s Br. at 19–20. This invoice reflected the sale of

100,000 speakers15 by an Indian company, Woodstock Electronics,

to Philips, a producer of color televisions in both India and

China in a purchase unrelated to the present investigation. See

Pl.’s Br. at 18 (citing Changhong Final PAI Submission, at 5 and

Exhibit 5). The date of the invoice was January 8, 2003; within

the October 1, 2002 – March 31, 2002 POI. Id.

In its Final Determination, Commerce considered Changhong’s

alternative data source, but concluded that it has a “clear

preference to use publicly-available prices, as opposed to

specific price quotes (or invoices), unless there is evidence on

the record of the [specific price quotes/invoices] demonstrating

that the input used in the production of subject merchandise is

of a specific type, which would not be accurately represented by

the more public data.” Issues & Decision Mem. at 62 (citing PVA

from the PRC at Comment 5). The Department then stated that it

relied upon the Infodriveindia data because it was “publicly-

available, representative of a range of prices, non-export

values, and tax-exclusive.” Id. Commerce concluded that “this

data represents the best information available for speakers,” and

15
According to plaintiff, the largest quantity of units
reported in Infodriveindia was 9,000 units. During the POI,
Changhong produced [[ ]] units of the subject CTVs for
export to the United States alone. See Pl.’s Br. at 20.
Consol. Court No. 04-00265 Page 23

further found “no persuasive evidence on the record demonstrating

that the speakers shown on Changhong’s invoices are more

representative of the speakers used by the respondents than those

referenced in the Infodriveindia data.” Id. at 63, 62. Commerce

also considered Changhong’s POI argument, weighed this aspect of

the proposed data source, but found it outweighed by the fact

that it was not publicly available and not indicative of the

industry as a whole.

In its response, Commerce reiterates its preference for

publicly-available prices by referencing the following language

contained in 19 C.F.R. § 351.408(c)(1): “The Secretary normally

will use publicly available information to value its factors.”

The next sentence of this provision further provides: “However,

where a factor is purchased from a market economy supplier and

paid for in a market economy currency, the Secretary normally

will use the price paid to the market economy supplier.” 19

C.F.R. § 351.408(c)(1). The import of this provision is that,

when a respondent itself makes a market economy purchase of an

actual input, that price is to be preferred as the best available

information. Here, however, Changhong merely placed upon the

record a non-public invoice for a market economy purchase

consummated between strangers to plaintiff’s transactions.
Consol. Court No. 04-00265 Page 24

The Court has consistently sustained Commerce’s preference

for publicly-available information representative of the industry

norm. See Zhejiang Native Produce & Animal By-Products Imp. &

Exp. Corp. v. United States, 28 CIT __, __, slip. op. 04-109 at

12, (Aug. 20, 2004) (not published in the Federal Supplement)

(affirming Commerce’s selection of surrogate data because it

represented, inter alia, published, publicly-available data); see

also Peer Bearing Co., 25 CIT at 1217, 182 F. Supp. 2d at 1307

(“Commerce’s goal is to use surrogate values that represent the

industry norm of the surrogate country, not company-specific

surrogate values. . . .”). The invoice submitted by Changhong is

representative only of the price paid by a single producer, and

has not been shown to be indicative of the entire industry. See

Zhejiang, 28 CIT at __, slip. op. at 12 (sustaining Commerce’s

decision to “reject the . . . price calculated from [the

processor’s] financial statement, on the grounds that the value

for [the subject merchandise] represents the value . . . as

experienced by a single processor [of the subject merchandise] in

a particular region of India.”). Commerce was, therefore,

justified in not considering plaintiff’s proffered data as

sufficient to constitute the best available information, when it

had available public information representing a range of prices

and transactions. See, e.g., See Polyethylene Retail Carrier Bag
Consol. Court No. 04-00265 Page 25

Comm. v. United States, 30 CIT __, __, slip. op. 06-94 at 8-9

(June 21, 2006) (not published in the Federal Supplement).

B. Commerce’s Determination to Disregard Certain Market
Economy Purchases from Korea and Thailand

The next issue before the court is whether Commerce erred in

disregarding Changhong’s market economy purchases of certain

inputs used in the production of its CTVs. In Changhong’s Third

Supplemental Response, it stated that it had purchased numerous

inputs from the market economy countries of Korea and Thailand,

and that therefore, prices paid for these inputs should be used

to value the factors of production. See Pl.’s Br. at 24 (citing

Supplemental Response, at Exhibit SD3-1). Although Commerce may

rely on surrogate values, its regulations provide that values

based on actual purchases made by a respondent from market-

economy suppliers, paid for in market economy currency, are to be

preferred in valuing the factors of production. See 19 C.F.R. §

351.408(c)(1). Thus, in its Preliminary Determination, Commerce

indicated that, in valuing inputs purchased from market economy

suppliers, in most circumstances, it would use the actual price

paid for these inputs. See Preliminary Determination, 68 Fed.

Reg. 66,807–08. Commerce also stated, however, that where it has

reason to believe or suspect that the price of an input is

subsidized, it would select a surrogate value rather than use a

price that might be distorted. See 19 U.S.C. § 1677b. As a
Consol. Court No. 04-00265 Page 26

result, in its calculations, the Department declined to use

Changhong’s market economy purchase prices for inputs purchased

from Korea and Thailand because it found that those countries

maintained broadly-available, non-industry specific subsidies.

See Issues & Decision Mem. at 36–37. In its Final Determination,

Commerce affirmed its position. See id. at 38 (stating that

Commerce will disregard market economy purchases where they were

made from “countries [that] maintain broadly-available, non-

industry-specific subsidies which may benefit all exports to all

export markets.”).

Changhong argues that in declining to use its purchases from

the market economy countries of Korea and Thailand in the

calculation of normal value, Commerce did not act in accordance

with the precedent of this Court, or Commerce’s own practices.

See Pl.’s Br. at 25–27. Specifically, Changhong argues that

Commerce may disregard purchases made in market economy countries

only if there is “particularized evidence showing that the prices

paid . . . have been distorted by subsidies,” and that the record

did not support such findings in this case. Id. at 25. In

support of this claim, plaintiff cites Fuyao Glass Industrial

Group Co., Ltd. v. United States, 27 CIT __, __, slip op. 03-113

(Dec. 18, 2003) (not published in the Federal Supplement)(“Fuyao

I”), and Fuyao Glass Industrial Group Co. v. United States, 30

CIT __, __ slip op. 05-06 (Jan. 25, 2005) (not published in the
Consol. Court No. 04-00265 Page 27

Federal Supplement) (“Fuyao II”). Id. at 25-28.

The “reason to believe or suspect” standard first appeared

in the legislative history for 19 U.S.C. § 1677b, which states

that “in valuing such [nonmarket economy] factors, [Commerce]

shall avoid using any prices which it has reason to believe or

suspect may be dumped or subsidized prices.” See Omnibus Trade

and Competitiveness Act of 1988, H.R. Conf. Rep. No. 100-576 at

590 (1988), reprinted in 1988 U.S.C.C.A.N. 1547, 1623.

In Fuyao II, the Court found that Commerce has a reason to

believe or suspect that an input may be subsidized if it can

demonstrate by specific and objective evidence that:

(1) subsidies of the industry in question
existed in the supplier countries during the
period of investigation (“POI”); (2) the
supplier in question is a member of the
subsidized industry or otherwise could have
taken advantage of any available subsidies;
and (3) it would have been unnatural for a
supplier to not have taken advantage of such
subsidies.

Fuyao II, 29 CIT at __, slip op. 05-6 at 10. Commerce purported

to apply this three-prong test in declining to use Changhong’s

market economy purchases. See Def.’s Resp. at 26 (“[I]n

accordance with Fuyao, Commerce placed upon the record

‘particular, specific, and objective evidence’ of generally-

available non-specific export subsidies that the Thai [and]
Consol. Court No. 04-00265 Page 28

Korean . . . governments provide all exporters, regardless of the

product.”).

Commerce’s justification16 for excluding the market economy

purchases consists of selected portions of the Fuyao Glass Remand

Determination listing the export subsidy programs it found to be

available in Korea and Thailand: “For Korea the identified

programs include: Duty Drawback, Export Credit and Short-Term

16
Commerce also relied upon what it calls its general
policy, and a supporting memorandum, for disregarding subsidized
factor input prices from Korea and Thailand. See Issues &
Decision Mem. at 36–37; see also Def.’s Resp. at 25–27. In its
Issues and Decision Memorandum, Commerce stated that it has a
general policy of not including prices paid for inputs from Korea
and Thailand because it has reason to believe or suspect that
those countries maintain subsidy programs which distort export
price. See Issues & Decision Mem. at 36. As a basis for this,
Commerce pointed to a February 2002, memorandum entitled, “NME
Investigations: procedures for disregarding subsidized factor
input prices.” Id. Therein, Commerce stated the policy advising
that for “all non-market economy investigations, factor input
prices from Korea, [and] Thailand . . . should be disregarded . .
. . Each of these countries maintain broadly available, non-
industry specific export subsidies. In prior decisions, we have
found that the existence of these subsidies provides sufficient
reason to believe or suspect that export prices from these
countries are distorted.” Id. The policy relied upon by
Commerce includes general findings regarding broadly available,
non-industry specific export subsidies in the countries, but does
not explain the findings in any way.

The court notes that Commerce’s reliance on this general
policy in the context of a lawsuit is misplaced. This “general
policy” does not provide the court with the specific and
objective evidence necessary for Commerce to meet its burden.
Indeed, Commerce’s findings based on its policy appear to suffer
from the infirmities identified in Fuyao. See e.g., Fuyao II, 29
CIT at __, slip op. 05-6 at 22.
Consol. Court No. 04-00265 Page 29
Export Financing programs. For Thailand, the identified programs

include: Export Packing Credits, Duty Exemption for Raw

Materials, and Tax Certificate for Exporters subsidy programs.”

See Def.’s Resp. at 37 (citing Fuyao Glass Remand Redetermination

at 29–32)(indicating that “[b]ecause this list equally applies

here, we have placed it on the record of the instant

investigation.”) (internal citations omitted). A corresponding

memorandum is also referenced, in which Commerce provided a brief

description of each of the listed programs. See, e.g.,

Memorandum from Elizabeth Eastwood, Placing Information on the

Record Regarding Subsidy Programs In the Investigation of Certain

Color Television Receivers from the People’s Republic of China

(Apr. 12, 2004) (P.R. 544) (“Eastwood Memorandum”) at 29.17

17
An example of the information provided in Commerce’s
memorandum regarding the Korean subsidy program is presented in
full:

1) Korea
Among the many Korean subsidy programs
listed were Duty Drawback on Non-Physically
Incorporated Items and Excessive Loss Rates
(“Duty Drawback”), Export Credit Financing
from the Export Import Bank of Korea (“Korean
Export Credit”), and Short-Term Export
Financing.

The Duty Drawback subsidy program is
described in part, as: “The Government of
Korea establishes an authorized loss rate for
raw materials used in the manufacture of
exported goods. . . . The Government of Korea
reduces the amount of duty drawback received
on the exported product to account for the
sales of by-products produced from the excess
Consol. Court No. 04-00265 Page 30
Assuming that Commerce is able, on remand, to satisfy

prong-1 of the Fuyao test, the court finds that Commerce has

provided sufficient evidence to meet prong-2 of the test, i.e.,

“the supplier in question is a member of the industry or

otherwise could have taken advantage of any available subsidies.”

See Fuyao II, 29 CIT at __, slip op. 05-6 at 10.

raw materials used in the production of
exported goods.”

The Export Credit program is described,
in part, as: “The National Investment Fund
(NIF), which was established by the
Government of Korea in 1973, is a source of
funds for banks to loan. NIF funds are used
to finance development or to finance exports
on a deferred payment basis . . . Because
the loans are contingent upon export and the
rates of interest charged are less than that
on comparable financing, these loans confer
benefits which constitute export subsidies.”

The Short-term Export Financing program
is described, in part, as: “Under Article 16
of the Tax Exemption and Reduction Control
Act (TERCL), a domestic person engaged in a
foreign currency earning business can
establish a reserve amounting to the lesser
of one percent of foreign exchange earnings
or 50 percent of net income for the
respective tax year. . . . This program
constitutes an export subsidy because the use
of the program is contingent upon export
performance.

See Eastwood Mem. at 29–30 (omissions in original). Similar

descriptions were also included for Thailand. See id. at 30–32.
Consol. Court No. 04-00265 Page 31
In the Eastwood Memorandum, Commerce pointed to record

evidence indicating that the programs listed were non-product

specific and non-industry specific. See Eastwood Mem. at 31, 32

(“None of these programs in any of these three countries are

specific to any particular type of product. . . . Further, each

of these programs are available to any company engaged in export

activities.”). The contents of the memorandum, i.e., the listed

subsidy programs and their description and corresponding

explanation, are sufficient to demonstrate that the supplier in

question could have taken advantage of available subsidies. In

other words, because the described subsidy programs were non-

industry specific, they fulfill the requirements of prong-two.

Although being generally available and non-industry specific

provides some support of Commerce’s reasonable belief or

suspicion that the inputs may be subsidized in the instant

matter, this information alone is insufficient to demonstrate the

specific and objective evidence that the inputs may have been

subsidized.

First, Commerce has failed to show that the subsidies

existed in the supplier countries during the period of

investigation, as is demanded by prong one. Instead, Commerce

has established the existence, at some point in time, of the
Consol. Court No. 04-00265 Page 32
subsidy programs in the subject countries. With respect to

Korea, Commerce indicated only that certain of the subsidy

programs were established prior to the POI. See, e.g., id. at 30

(“The National Investment Fund (NIF) . . . was established by the

Government of Korea in 1973 . . . .”). No date information at

all was provided as to Thailand. Id. It is simply not

reasonable to assume that subsidy programs, once established,

exist in perpetuity. Because Commerce failed to indicate that

the subsidies existed during the October 1, 2002 - March 31, 2003

POI, it did not provide the specific and objective evidence

required under prong-one of the Fuyao test.

Second, the court finds that Commerce failed to establish

the third-prong of the Fuyao test. The third prong requires a

relatively minimal showing by Commerce, i.e., that it “would have

been unnatural for a supplier not to have taken advantage of any

available subsidies.” See Fuyao II, 29 CIT at __, slip op. 05-6

at 10. Previously, this Court has found this prong satisfied by

a showing of “the competitive nature of market economy

countries.” Id. at 24. Contrary to Commerce’s insistence,

however, the burden with respect to this finding is not on

plaintiff. See Def.’s Resp. at 25 (“[T]he burden shifts to the

respondent to demonstrate that the supplier did not take

advantage of those subsidies.”). Indeed, prong three of the
Consol. Court No. 04-00265 Page 33
Fuyao test specifically requires that “Commerce must demonstrate

by specific and objective evidence that . . . it would have been

unnatural for a supplier to not have taken advantage of such

subsidies.” Fuyao II, 29 CIT at __, slip op. 05-06 at 10. In

the instant matter, Commerce has failed to do so.

Accordingly, the court finds that Commerce’s determination

not to include prices for inputs purchased by Changhong from

Korea and Thailand in the calculation of normal value, was

unsupported by substantial evidence. The court remands this

issue to Commerce with instructions to either use the prices for

inputs purchased from Korea and Thailand, or if it continues to

find that it has reason to believe or suspect that these prices

may be subsidized, to search the record for further probative

evidence; or to re-open the record and do a literature search18

to provide, if possible, additional evidence to support its

conclusions that: (1) the generally available subsidies were in

effect during the POI; and (2) it would be unnatural for a

supplier not to take advantage of these subsidies.

18
Commerce is not required to conduct a full-scale
investigation to determine that prices are subsidized. See Peer
Bearing Corp. v. United States, 27 CIT __, __ 298 F. Supp. 2d
1328, 1337 (2003)(“[T]he statute does not require Commerce to
conduct a formal investigation.”). Indeed, Commerce need only
conduct a search using the reference materials available to it.
Consol. Court No. 04-00265 Page 34
C. Commerce’s Computation of Financial Ratios

The next issue before the court involves Changhong’s

challenge to Commerce’s calculation of the financial ratios used

to determine normal value.

First, Changhong disputes Commerce’s removal of “Managerial

Remuneration” from the calculation of one of its relied upon

financial ratios. See Pl.’s Br. at 39. As previously discussed,

in constructing normal value in the NME context, Commerce

typically employs surrogate values. See § 1677b(c)(1). When

relying on surrogate values, Commerce calculates financial ratios

for the surrogate companies for the purpose of constructing

normal value.19 Id. In the Final Determination, Commerce

removed values for Managerial Remuneration from one of the

financial ratios’ denominators.20 See Pl.’s Br. at 39.

19
Once Commerce calculates these ratios, the results are
used in a formula aimed at deriving normal value. Specifically,
[f]inancial ratios are used to determine overhead, financial
and selling, general and administrative factors (“E”). The
denominator consists of the surrogate's material, labor, and
energy costs (“Y”). Consequently, if (1/Y x (surrogate
value)) = E, and (E + (surrogate value)) = normal value
(“NV”), then the greater Y is, the smaller NV becomes.

Anshan Iron & Steel Co., Ltd. v. United States, 27 CIT __,
slip op. 03-83 at 15 n.5 (July 16, 2003) (not published in the
Federal Supplement).
20
In its Final Determination, Commerce also removed
certain values for “Sitting Fees to Directors,” and “Remuneration
to Directors.” See Final Determination Factors Mem. at Attachment
(continued...)
Consol. Court No. 04-00265 Page 35
Changhong challenges the adjustment to Managerial Remuneration on

two separate grounds. Id.

Plaintiff initially claims that Commerce erred by failing to

refer to the source from which it derived the subtracted amount.

Id. at 39-40 (Commerce has not indicated “where in any of the

schedules the value can be found to have been reported.”). It

insists that Commerce’s “adjustment for Managerial Remuneration

does not appear in any of the schedules, the [surrogate]

company’s income statement, statement of cash-flows, or balance

sheet. Instead, Commerce appears to have plucked the value from

a table . . . .” Id. at 39–40.

Changhong further insists that Commerce made the adjustment

but “provided no justification for why the total value . . . was

subtracted from the calculation [of the financial ratio].” Id. at

20
(...continued)
5 (BPL calculation) (P.R. 545); see also Pl.’s Br. at 39.

Changhong, however, does not contest the source of the value
used for the adjustment to Director’s Remuneration. Rather, it
states that “Commerce identified the removal of the line item for
director’s remuneration and referred to the particular schedule
where the . . . value [used] was obtained.” See Pl.’s Br. at 39.
This action taken by Commerce is precisely what Changhong
maintains as error with respect to managerial remuneration.

Similarly, Changhong does not dispute the adjustment to
“Sitting Fees to Directors.” See id. at 39-40.
Consol. Court No. 04-00265 Page 36
40. In other words, Changhong maintains that Commerce provided

no explanation for the amount of its adjustment.

Finally, Changhong alleges that Commerce’s calculation of

its financial ratios resulted in double-counting. See id. at

39–40. Plaintiff asserts that Commerce’s calculation does not

properly reflect that “gross remuneration for certain of the

[surrogate] companys’ management may include items such as

certain managers’ compensation as members of [the surrogate

companys’] board of directors.” Id. at 40. Because “at least

three” of the surrogate companys’ managers also sit on the board

of directors, Changhong insists that “it is likely” that the

value for total executive compensation used by Commerce

erroneously “includes not only managerial pay, but also

director’s pay.” Id. This, Changhong maintains, “represents a

double counting of total executive compensation.” Id.

Commerce’s sole argument in opposition to Changhong’s claims

is that it is too late in raising its objections. Thus,

it disagrees with plaintiff’s characterization of its

allegations. See Def.’s Resp. at 31-33. The Department contends

that Changhong is not attacking its methodology, but rather is

raising ministerial errors in the application of its methodology.

Id. at 33. Commerce insists that any adjustments made (or not
Consol. Court No. 04-00265 Page 37
made) to its calculations were due to inadvertent clerical

errors. Id. Accordingly, it maintains that, because plaintiff’s

claims were not raised at the agency level, they were waived.

See id. (citing 28 U.S.C. § 2637(d))21 (“Changhong chose not to

object to the deduction of managerial remuneration from labor, or

raise how managerial remuneration could overlap with directors’

remuneration or sitting fees, as a ministerial error.”).

A ministerial error is “an error in addition, subtraction,

or other arithmetic function, clerical error resulting from

inaccurate copying, duplication, or the like, and any other

similar type of unintentional error which the Secretary considers

ministerial.” 19 C.F.R. § 351.224(f) (2004); see also 19 U.S.C.

§ 1671d(e). The Federal Circuit has defined the term “clerical

error” to be an error that “by [its] nature [is ] not [an] error

in judgment but merely [an] inadvertenc[y].” NTN Bearing Corp.

v. United States, 74 F.3d 1204, 1208 (Fed. Cir. 1995). Were all

of plaintiff’s challenges related solely to ministerial error

claims, they should have been raised within a reasonable time at

the agency level. Any such claims not raised within a reasonble

time during the investigation would be waived. See generally

IPSCO Inc. v. United States, 965 F.2d 1056, 1062 (Fed. Cir. 1992)

21
“[T]he Court of International Trade shall, where
appropriate, require the exhaustion of administrative remedies.”
28 U.S.C. § 2637(d).
Consol. Court No. 04-00265 Page 38
(citing H.R. Rep. No. 40, 100th Cong., 1st Sess., pt. 1 at 144

(1987) (“This provision allows for the correction of ministerial

errors in final determinations within a limited time period after

their issuance. . . . [As such, the court finds that] appellant

did not raise the alleged error within a reasonable time after

the original final determination.”).

To the extent that Changhong objects to Commerce’s failure

to provide the source from which it derived the subtracted

amount, it makes a clerical, and thereby ministerial error claim.

See 19 C.F.R. § 351.224(f). Indeed, Commerce’s failure to point

to the table or schedule reflecting the subtracted value is

properly viewed as an inadvertency. Because Changhong did not

raise this claim within a reasonable time, it was waived pursuant

to 19 U.S.C. § 1671d(f).

Changhong, however, does not take issue solely with

Commerce’s clerical errors; it additionally claims that Commerce

provided no rationale for excluding certain values from the

ratios, and that double counting may have been included in

Commerce’s remuneration calculation. The court finds that both

of these objections go to the methodology22 employed by Commerce,

22
It is possible that plaintiff’s double counting claim
could have been corrected as a ministerial error at the agency
(continued...)
Consol. Court No. 04-00265 Page 39
and thus are not waived. See Hebei Metals & Minerals Imp. & Exp.

Corp. v. United States, 28 CIT __, __, slip. op. 04-88 at 18

(July 19, 2004) (not published in the Federal Supplement) (“With

regard to the methodology Commerce uses to resolve an issue, the

exhaustion doctrine is inapplicable where a respondent did not

have the opportunity to challenge the methodology because

Commerce failed to articulate the methodology . . . .”). In the

first instance Changhong claims error in Commerce’s failure to

explain why it made the adjustments; and secondly, Changhong

contests Commerce’s methodology itself, i.e., why it took action

that might lead to double counting. Both of these claims involve

a challenge to Commerce’s judgment. As such, Changhong’s

challenges are not to ministerial errors, but to Commerce’s

methodology. Because these claimed errors were first raised in

its Motion for Judgment Upon Agency Record, Changhong had no

opportunity to challenge them at the administrative level and so

it is proper for this Court to hear them. See Carpenter

Technology Corp. v. United States, 30 CIT __, slip op. 06-134

(Sept. 6, 2006) (not published in the Federal Supplement).

It is apparent that Commerce has not articulated its

22
(...continued)
level. However, since Commerce makes no effort to explain its
actions, the court finds that they were the result of its
methodology.
Consol. Court No. 04-00265 Page 40
methodology with respect to the calculation of the financial

ratios. The United States Supreme Court has “frequently

reiterated that an agency must cogently explain why it has

exercised its discretion in a given manner.” See Motor Vehicle

Mfrs. Ass’n. v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 48

(1983). Accordingly, the issue of financial ratios is remanded

to Commerce with instructions to clearly set forth the

methodology used in the Final Results, and to justify its

conclusions. See Tourus Records, Inc. v. DEA, 259 F.3d 731, 737

(D.C. Cir. 2001).

D. Commerce’s Determination Not to Exclude Values for
Small Quantities of Imports

In its Preliminary Determination, with the exception of two

inputs,23 Commerce valued respondents’ factors of production,

using import statistics published by the MSFTI. Following the

publication of the Preliminary Determination, Changhong claimed

that, in calculating the average values from the MSFTI, Commerce

departed from its long-standing practice of omitting those import

values that were reported either: (1) in small quantities; and/or

(2) at aberrational prices. See Changhong Case Brief at 27–28

(“[T]he Department should remove from its import data any

23
As has been previously discussed, Commerce valued 25-
inch CPTs and Speakers using import data from Infodriveindia.
See Preliminary Determination, 68 Fed. Reg. at 66,808.
Consol. Court No. 04-00265 Page 41
aberrational unit values . . . and should remove . . . any import

values that are imported in such small quantities . . . .”). In

its Final Determination, Commerce stated that it is not its

normal practice to “automatically exclude imports of small

quantities of merchandise from the calculation of surrogate

values.” See Issues & Decision Mem. at 30. Rather, “the

Department’s practice is to exclude only data that is deemed to

be distortive.” Id. Thus, Commerce agreed that it should remove

from its calculations data representing aberrational values, but

declined to remove values “merely because certain of the

underlying import quantities were small.” Id. at 31. Commerce

then re-examined the surrogate value data on the record to

determine if any of the values cited by the respondents in their

case briefs appeared to be aberrational. As a result of this

examination the Department excluded from its calculations,

certain values used in the Preliminary Determination. See id.

With respect to Changhong’s small quantities claim, in its

Issues and Decision Memorandum, Commerce stated that its practice

has not been to exclude all small quantity purchases, but rather

“to exclude only data that is deemed distortive.” Id. at 30. The

Department then points to several determinations illustrating its

adherence to this methodology. See Id. at 30 (citing Notice of

Final Determination of Sales at Less Than Fair Value Saccharin
Consol. Court No. 04-00265 Page 42
From the People’s Republic of China, 68 Fed. Reg. 27,530, cmt. 1

(Dep’t of Commerce May 20, 2003)); see also Issues and Decision

Memorandum for the Administrative Review of Heavy Forged Hand

Tools from the People’s Republic of China at Comment 11,

accompanying Heavy Forged Hand Tools from the People’s Republic

of China, 66 Fed. Reg. 48,026 (Dep’t of Commerce Sept. 17,

2001)(final results). Indeed, the Court has previously approved

Commerce’s established practice “to disregard small-quantity

import data when the per-unit value is substantially different

from the per-unit values of the larger quantity imports of that

product from other countries,” and thereby distortive. See

Shakeproof Assmebly Components Div. Of IL Tool Works, Inc. v.

United States, 23 CIT 479 485, 59 F. Supp. 2d 1354, 1360 (1999)

(citing Heavy Forged Hand Tools, Finished or Unfinished , With or

Without Handles, from the People’s Republic of China, Final

Administrative Reviews, 62 Fed. Reg. 11813 (Mar. 13, 1997);

Tapered Roller Bearings and Parts Thereof, Finished or

Unfinished, from Romania, Final Results of Antidumping Duty

Administrative Review, 62 Fed. Reg. 37,194 (July 11, 1997)).

While Changhong asserts that Commerce has a practice of excluding

small quantity purchases from its import data, it has pointed to

nothing to prove its case. Thus, it is apparent that, despite

plaintiff’s arguments, Commerce has not had a longstanding

practice of omitting import values merely because they were the
Consol. Court No. 04-00265 Page 43
product of a small quantity of imported goods.

In a related claim, plaintiff challenges Commerce’s

methodology on the basis that it was internally inconsistent with

its policy with respect to actual market economy purchases. See

Pl.’s Br. at 35. Specifically, Changhong argues that Commerce’s

inclusion of inputs purchased in small quantities in the

calculation of surrogate values is inconsistent with its

exclusion of Changhong’s actual small-quantity purchases from

market economies. Id. at 33–35. Commerce insists, however, that

there is a distinction between a price obtained from a surrogate

country that is used to value a factor of production, and the

price actually paid by a NME producer to procure a factor of

production from a market economy supplier. Commerce states that

it employs a different methodology in each of these

determinations, and thus, that its behavior is not internally

inconsistent.

As has been previously noted, where Commerce values a factor

of production using a surrogate value, it is its practice to

disregard only small quantity values, that are aberrational in

price. See generally Luoyang Bearing Corp. v. United States, 28

CIT __, __ 347 F. Supp. 2d 1326, 1353. Where the Department

values a factor of production using actual market economy
Consol. Court No. 04-00265 Page 44
purchases, however, its practice is to disregard purchases that

are not large enough to be representative of the NME producer’s

purchases of the input during the POI. According to defendant,

such distinct treatment is reasonable because, with respect to a

respondent’s market economy purchases, there is greater potential

for manipulation of import data by a respondent. See Defendant-

Intervenors’ Resp. Br. (“Def-Int.’s Resp.”) at 34 (“Such a policy

is reasonable. First, as a practical matter, in a market

setting, small volume purchases would not generally reflect true

commercial values . . . and therefore it is appropriate to

disregard these transactions. These values for small volume

purchases of self-selected market economy purchases could be

manipulated by respondent.”).

The court finds that Commerce’s behavior is not internally

inconsistent because it is based on separate methodologies, i.e.,

when seeking a surrogate value, Commerce disregards insignificant

purchases that are distortive; when using actual prices paid it

excludes small quantity purchases as possible subjects of

manipulation. Moreover, these two separate methodologies are the

past practice of the Department, and have each been upheld as

such by the Court. See Shakeproof Assembly Components Div. Of IL

Tool Works Inc., v. United States, 24 CIT 485, 491, 102 F. Supp.

2d 486, 492 (2000), aff’d, 268 F.3d 1376 (Fed. Cir. 2001).
Consol. Court No. 04-00265 Page 45
Next, Changhong maintains that even if Commerce is allowed

to include small volume imports in its surrogate analysis, it

failed to revise fully its surrogates to adjust for all

aberrational values. See Pl.’s Br. at 35-37. Specifically,

Changhong objects to the inclusion of “five transformers valued

at Rs. 29,000 . . . 20 kilograms of varnish valued at Rs. 29,000"

from New Zealand, and “other surrogate values,” which it believes

are aberrational. Id. at 37.

With respect to this claim, the court finds that because

Changhong failed to raise its objection when alleging ministerial

errors following the Final Determination it has waived its

objection. See IPSCO, 965 F.2d at 1061–62. Changhong and other

respondents specifically complained of Commerce’s inclusion of

aberrational small-quantity imports following the Preliminary

Determination. Upon reviewing these objections, in its Final

Determination, Commerce removed certain aberrational values from

its calculation of several surrogate values. These revisions

were published in Attachment 2 of its Final Factors Memorandum,

and made available to all parties. Following the Final

Determination, IBEW, TCL Corp., and Konka Group Co. Ltd., made

ministerial error allegations concerning calculation of surrogate

values, and where appropriate, Commerce corrected these errors.

Changhong too had the opportunity to challenge the inclusion of
Consol. Court No. 04-00265 Page 46
these quantities at the administrative level, but made no

objection. Indeed, Changhong itself indicates that it was aware

of what it considered to be errors by Commerce following the

publication of the revisions. See Pl.’s Br. at 37 (“[A] review

of Commerce’s revision reveals that . . . Commerce failed to make

several required changes to its surrogate values.”).

Unlike its claims with respect to Commerce’s calculation of

financial ratios, here, plaintiff’s complaint relates to a

ministerial error. That is, Changhong complains about Commerce’s

failure to make, what it considers to be, required changes.

Thus, is alleges ministerial errors. The court finds that

Changhong failed to avail itself of the opportunity to raise its

objection within a reasonable time, and therefore has waived its

objections. See IPSCO, 965 F.2d at 1061–62. Accordingly, the

court will not entertain Changhong’s claim that Commerce failed

to fully revise its surrogates to adjust for all aberrational

values.

E. Commerce’s Valuation of Changhong’s Electricity
Utilization

The court next addresses whether substantial evidence

supports Commerce’s valuation of electricity. In its Preliminary

Determination, Commerce valued Changhong’s electricity

utilization based upon data from the International Energy
Consol. Court No. 04-00265 Page 47
Agency’s Key World Energy Statistics 2002 Report (“IEA Report”),

adjusted24 for the POI. See Preliminary Factors Valuation Mem.

at 5. Following the preliminary determination, Changhong placed

on the record, data obtained from the all-India average

electricity rate tariff published by the Power & Energy Division

of the Government of India’s Planning Commission (“P&ED Report”).

See Changhong Jan. 28, 2004 Factor Values Submission at 6. In

its case brief, Changhong argued that Commerce should rely on the

P&ED Report because it: (1) was an official government source

that has been published on a continuous basis for fourteen years;

(2) covered the fiscal year 2001 through 2002; and (3) had been

relied upon by Commerce in multiple recent administrative reviews

and investigations. See Changhong Case Br. at 29. In its Final

Determination, Commerce declined to use the P&ED Report average

tariff because it found that “this tariff does not represent the

best information available on the record of this investigation

because it is not an actual consumption rate, but rather is an

estimated or ‘AP’ (i.e., annual plan) rate.” Issues & Decision

Mem. at 31. Instead, Commerce based its surrogate value for

electricity on the 2000-01 Revised Estimate average rate (“RE”)

for industrial consumption published in the IEA Report. See id.

24
Commerce revised the reported price [[

]] See Preliminary Factors Valuation Mem. at 5, &
Attachment 7.
Consol. Court No. 04-00265 Page 48
Changhong argues that the Department’s decision to value

electricity based upon the IEA Report, instead of the P&ED

Report, was flawed. See Pl.’s Br. at 42–43. First, Changhong

insists that Commerce “failed to take into account deficiencies

in the IEA Report,” including that its data was not

contemporaneous with the POI. Id. at 42, 43 (“Commerce departed

from its normal practice by relying upon surrogate factors that

are not contemporaneous with the period under review.”).

In support of its decision to use the IEA Report, Commerce

states that “[t]he Department consulted a World Bank economist

with respect to the differences between ‘AP’ [Annual Plan Rate

proposed by Plaintiff] and ‘RE’ [Revised Estimate]. According to

the World Bank economist . . .[the IEA Report] figures tend to be

closer to the actuals as they contain adjustments to AP [Annual

Plan] figures [found in the P&ED Report] prepared the year

before.’” See Placement of Information on Record Re: Surrogate

Value (Apr. 12, 2004 Surrogate Value for Electricity Mem.) at ¶

IV. Based on the economist’s description, the Department

determined that the IEA Report 2000-01 rate was “more reliable”

than the P&ED Report 2001-02 rate because it updated the

estimated rate with actual usage information. See id. Thus,

Commerce weighed the non-contemporaneity of the IEA Report data

against the evidence indicating that its data was more accurate,
Consol. Court No. 04-00265 Page 49
and determined that the non-contemporaneity failed to overcome

the evidence that the IEA Report was the best available

information. Id. (citing administrative review of persulfates

from the PRC, for the proposition that the revised estimate were

preferable to the annual plan); see also Def.’s Resp. at 37 (IEA

Report data is the best available information “even though the

annual plan [P&ED Report data] was contemporaneous with the

period of review.”).

Commerce has pointed to record evidence indicating a greater

accuracy of the data contained in the IEA Report, i.e., that the

data was more accurate because it updated the estimated rate with

actual usage information. Because the selected information

appears to be more accurate, it cannot be said that Commerce was

unreasonable in choosing it over a more contemporaneous, but less

accurate alternative.

Next, plaintiff maintains that the IEA Report is further

flawed because Commerce “did not abide by its statutory

requirements [in] utiliz[ing] a ‘fully-loaded’ tax-inclusive

electricity price in calculating normal value for Changhong’s

merchandise.” Pl.’s Br. at 43. Specifically, Changhong contests

the use of the data on the basis that “Commerce failed to note

the fact that the Indian electricity pricing that it collected
Consol. Court No. 04-00265 Page 50
from the IEA Report included various taxes and surcharges.” Id.

In earlier determinations, Commerce has expressed a

preference to use surrogate price data which is . . . tax

exclusive. See Taiyuan Heavy Mach. Imp. & Exp. Corp. v. United

States, 23 CIT 701, 711 (1999) (not published in the Federal

Supplement). The Court, however, has recognized Commerce’s

practice to remove sales and excise taxes from its calculation of

normal value only “when there is an affirmative indication of

their presence.” Taiyuan, 23 CIT at 711 (emphasis added). To

supply this affirmative indication, Changhong states that

“[a]ccording to Footnote (g) of the IEA printout, the electricity

for industry pricing is tax exclusive for only Australia and the

United States.” See Pl.’s Br. at 43 (citing Preliminary Factors

Mem. at Attachment 7) (emphasis added). An examination of

footnote (g), however, reveals no evidence, specific or

otherwise, reflecting that the IEA value for electricity is tax

exclusive for Australia and the United States. Rather, any

information regarding tax inclusion/exclusion is absent from the

cited source. See Prelim. Factors Mem. at Attachment 7

(reflecting data concerning HS Codes, product description,

quantity, value, AUV, [average unit value] unit, foreign port and

country). As such, Changhong has failed to point to specific

evidence showing an “affirmative indication” that the IEA Report
Consol. Court No. 04-00265 Page 51
surrogate values included tax. Commerce’s decision not to deduct

taxes from the surrogate values, therefore, is in accordance with

law. See Taiyuan, 23 CIT at 711 (“Since plaintiff did not

present information about a specific surrogate value containing

excise and sales tax, Commerce’s decision [not to deduct taxes

from its surrogate value] is based on substantial evidence and

otherwise is in accordance with law.”). Accordingly, Commerce’s

surrogate valuation of electricity is sustained.

II. Defendant-Intervenors’ Challenges

The court next turns to the issues presented for review in

one of the consolidated cases, IBEW v. United States. In their

complaint, IBEW, IUE-CWA, and Five Rivers LLC, the defendant-

intervenors, contest various aspects of Commerce’s Final

Determination. See Compl. of 07/30/04 (“Def.-Int.’s Compl.).

A. Commerce’s Negative Critical Circumstances
Determination

On October 16, 2003, IBEW alleged that critical

circumstances existed. A finding of critical circumstances

pursuant to 19 U.S.C. § 1673b(e), is an emergency measure to

“provide prompt relief to domestic industries suffering from

large volumes of imports, or a surge over a short period in,

imports.” H.R. Rep. No. 96-317 at 63 (1979). Following its

investigation, Commerce published its preliminary affirmative
Consol. Court No. 04-00265 Page 52
finding that dumping had occurred, and its preliminary

affirmative determination of critical circumstances. See

Preliminary Determination, 68 Fed. Reg. 66,800, 66,808–10.

Because of the affirmative critical circumstances determination,

Commerce ordered Customs to “suspend liquidation of all imports

of subject merchandise from the PRC entered . . . on or after 90

days prior to the date of publication of this notice in the

Federal Register.” Id. at 66,810; see also 19 U.S.C. §

1673b(e)(2).25 Thus, the suspension applied retroactively to

entries made from August 30, 2003 through November 27, 2003.

In the Final Determination, however, Commerce found that

critical circumstances did not exist and therefore issued a

negative determination on that issue. See Final Determination,

69 Fed. Reg. 20,594. Commerce then instructed Customs to

terminate the retroactive suspension of liquidation of entries.

Thereafter, defendant-intervenors filed their complaint

contesting the negative critical circumstances determination.

See Def.-Int.’s Compl. ¶¶ 9-13.

On August 30, 2004, defendant-intervenors filed a consent

25
Pursuant to § 1673b(e)(2), if Commerce determines that
affirmative critical circumstances exist, Commerce may order a
retroactive suspension of liquidation, applicable to imports of
subject merchandise, made 90 days prior to the publication of the
preliminary determination.
Consol. Court No. 04-00265 Page 53
motion for a preliminary injunction to enjoin the liquidation of

entries of CTRs produced or exported by Changhong. Defendant-

intervenors did not, however, contemporaneously file a motion for

a temporary restraining order (“TRO”). The next day, Changhong26

and Wal-Mart Stores, Inc. (“Wal-Mart”) each filed consent motions

to intervene; which motions were granted, respectively, on

September 8th and 9th, 2004. On September 2, 2004 defendant-

intervenors filed an amended motion for preliminary injunction,

but again made no request for a TRO. On September 9, 2004,

Changhong filed its opposition to the motion for preliminary

injunction. Wal-Mart filed its motion contesting the motion for

preliminary injunction on September 14, 2004. On October 25,

2004, the court, sua sponte, issued an order temporarily

enjoining Customs from “making or permitting liquidation of any

unliquidated entries of certain color television receivers, as

defined in the scope of the United States Department of

Commerce’s antidumping duty order on certain color television

receivers from the People’s Republic of China . . . entered by

Sichuan Changhong Electric Co., from August 30, 2003 through May

31, 2005. . . .” See TRO of 10/25/2004. On February 11, 2005,

following Oral Argument, the court issued a preliminary

injunction enjoining Commerce and Customs from “causing or

26
Changhong’s motion was filed prior to the consolidation
of the member cases addressed herein. See generally Order of
09/19/2005.
Consol. Court No. 04-00265 Page 54
permitting liquidation of the entries” made “on or after August

30, 2003 through May 31, 2005 . . . which remain unliquidated” as

of the date of service of the order. See Prelim. Inj. Order of

02/11/05.

There is controversy, however, as to the effect of the

injunction because the United States insists that the entries at

issue were deemed liquidated by operation of law, prior to the

issuance of either the TRO or the preliminary injunction. See

Def.’s Resp. Opp. Pl.’s Mot. J. Ag. Rec. (“Def.’s 04-270 Resp.”)

at 18. That is, defendant claims that the suspension of

liquidation occasioned by the affirmative preliminary

determination of critical circumstances, ceased upon the

publication of the negative final determination. As a result,

Commerce contends that on October 16, 2004, six months after the

April 16, 2004 Final Determination publication date, the entries

were liquidated by operation of law pursuant to 19 U.S.C. §

1504(d), and that the court’s October 25, 2004 TRO and February

11, 2005 preliminary injunction had no effect on the already

liquidated merchandise. See id. at 18; see also Prelim. Inj.

Order of 02/11/05. Thus, the Department contends that defendant-

intervenors’ challenge to Commerce’s negative critical

circumstances determination is moot. See Def.’s 04-270 Resp. at

17–19.
Consol. Court No. 04-00265 Page 55

Liquidation is the “final computation or ascertainment of

the duties . . . accruing on an entry.” 19 C.F.R. § 159.1; see

also Juice Farms, Inc. v. United States, 68 F.3d 1344, 1345–46

(Fed. Cir. 1995). In most circumstances, Commerce will order

Customs to liquidate entries within one year of the date of entry

or withdrawal of the subject merchandise. See 19 U.S.C. §

1504(a). There is, however, a statutory provision specifically

directing deemed liquidation (liquidation by operation of law),

if certain criteria are met. See 19 U.S.C. § 1504(d).

Section 1504(d) provides that, except in circumstances not

relevant here,27

When a suspension [of liquidation] required by statute
or court order is removed,28 the Customs Service shall
liquidate the entry . . . within 6 months after
receiving notice of the removal from the Department of
Commerce . . . . Any entry . . . not liquidated by the
Customs Service within 6 months after receiving such
notice shall be treated as having been liquidated at
the rate of duty . . . at the time of entry . . . .

19 U.S.C. § 1504(d). Thus, this section directs the deemed

liquidation of unliquidated entries six months after the order

27
Specifically, “unless liquidation is extended under
subsection (b) [the provision allowing for extension by request,
for good cause shown, by the importer of record] of this section
. . . .” See § 1504(d).
28
Pursuant to 19 U.S.C. § 1671d(c)(2)(A), if Commerce’s
final determination is negative, Commerce must terminate the
suspension of liquidation required by § 1671b(d)(2).
Consol. Court No. 04-00265 Page 56
suspending liquidation has been removed. Id. For this deemed

liquidation to occur, however, certain criteria must be met: “(1)

the suspension of liquidation that was in place must have been

removed; (2) Customs must have received notice of the removal of

the suspension; and (3) Customs must not liquidate the entry at

issue within six months of receiving such notice.” Koyo Corp. of

U.S.A. v. United States, 29 CIT __, __, 403 F. Supp. 2d 1305,

1308 (2005) (citing Fujitsu v. United States, 283 F.3d 1364, 1376

(Fed. Cir. 2002)). Pursuant to § 1504, if these criteria are

met, the entry is liquidated at the entered rate six months after

the suspension order is removed.29 See § 1504(d) (stating that

entries meeting the requirements of this subsection “shall be

treated as having been liquidated at the rate of duty, value,

quantity, and amount of duty asserted at the time of entry by the

importer of record.”).

Unsurprisingly, defendant-intervenors disagree with

Commerce’s position that the entries were liquidated by operation

of law and that their claims with respect to critical

29
At oral argument, counsel for defendant-intervenors
argued that if this court finds that the subject entries are
deemed liquidated, the court should, nonetheless, order
liquidation at “the bonding rate of 57 percent.” Oral Arg.
Trans. at 58. The court finds that, having found the entries to
be deemed liquidated, § 1504(d) clearly directs that the entries
be liquidated at the “rate of duty . . . asserted at the time of
entry by the importer of record.” § 1504(d).
Consol. Court No. 04-00265 Page 57
circumstances are moot. Defendant-intervenors argue that “the

court has jurisdiction to hear this claim because the preliminary

injunction currently in place prevented liquidation of the

entries regardless of whether the liquidation would be through

actual liquidation or liquidation by operation of law.” Pl.’s

Reply Br. Supp. Pl.’s R. 56.2 Mot. J. Ag. Rec. (“Def.-Int.’s

Reply”) at 2. Thus they contend that “the court-ordered

injunction prevents the liquidation of these entries regardless

of the type of liquidation. That is, the injunction prevents the

actual liquidation of these entries and prevents liquidation of

these entries by operation of law.” Def.-Int.’s Reply at 4. The

court finds defendant-intervenors’ argument unconvincing.

The TRO issued on October 25, 2004, halted the liquidation

of unliquidated entries from that date forward. In like manner,

the preliminary injunction entered on February 11, 2005, by its

terms, had no effect on entries liquidated before the date of its

issuance. See Prelim. Inj. Order of 02/11/2005 (“This Order

applies to any and all of the following entries. (1) Entries . .

. that were; (2) entered . . . on or after August 30, 2003

through May 31, 2005; and (3) remain unliquidated . . . after the

date on which this order is . . . served.”) (emphasis added).

This is the case whether liquidation is made by action of the

Customs Service or by operation of law. Because defendant-
Consol. Court No. 04-00265 Page 58
intervenors did not make an application for a TRO when they filed

their motion for a preliminary injunction, no order was entered

to stop the impending deemed liquidation. Therefore, on October

16, 2004, pursuant to § 1504(d), the entries were deemed

liquidated – not by some action of the Customs Service, but

rather by statute.30 See Gerdau Ameristeel Corp. v. United

States, 30 CIT __, __, __ F. Supp. 2d __, __, slip. op. 04-00608

at 4 (August 10, 2006) (finding that “without an injunction

[covering the unliquidated entries] liquidation means an

interested party will forever lose its statutory right to

challenge an administrative review.”) (internal citations and

quotations omitted).

The preliminary injunction, upon which defendant-intervenors

rely, cannot undo the deemed liquidation of the subject entries.

Once liquidation occurs, it moots the underlying agency decision

because “the statutory scheme does not authorize this court to

30
The TRO enjoining liquidation was not issued until
after the expiration of this date, i.e., on October 25, 2004, and
was entered sua sponte. See TRO. This TRO was a measure taken
by the court, and covered all “unliquidated” entries. Id. At
the time of issuance, however, the entries at issue here had been
liquidated by operation of law, and thus were outside the purview
of the order.

Although the entries are deemed liquidated by operation of
law as of October 16, 2004, pursuant to the preliminary
injunction, the United States has not performed the ministerial
functions related to that liquidation. Nonetheless, the entries
have been deemed liquidated.
Consol. Court No. 04-00265 Page 59
order a reliquidation of entries once they are liquidated . . .

.” Chr. Bjelland Seafoods A/S v. United States, 19 CIT 35, 46

slip. op. 95-5 (Jan. 18 1995)(not published in the Federal

Supplement). Indeed, “the statutory scheme has no provision

permitting reliquidation and once liquidation occurs, a

subsequent decision by the trial court on the merits . . . can

have no effect on the dumping duties assessed on [subject]

entries.” Mitsubishi Elecs. Am. v. United States, 18 CIT 167,

180, 848 F. Supp. 193, 203 (1994)(citing Zenith Radio Corp. v.

United States, 710 F.2d 806, 810 (Fed. Cir. 1983))(internal

quotations omitted).

In the instant matter, the entries at issue meet the

requirements of § 1504(d) and therefore, were liquidated by

operation of law. The April 16, 2004 publication of Commerce’s

negative final determination removed the suspension of

liquidation resulting from the preliminary affirmative

determination. See Final Determination 69 Fed. Reg. at 20,597

(“[B]ecause we find that critical circumstances do not exist . .

. we will instruct the CBP [Customs & Border Protection] to

terminate the retroactive suspension of liquidation . . .

instituted due to the preliminary affirmative critical

circumstances finding.”); see also Int’l Trading Co v. United

States, 412 F.3d 1303, 1308 (Fed. Cir. 2005) (“[t]he date of
Consol. Court No. 04-00265 Page 60
publication provides an unambiguous and public starting point for

the six-month liquidation period . . . .”). During this six-

month period, Customs did not liquidate the entries at issue.

Accordingly, this court finds that the entries at issue were

liquidated by operation of law on October 16, 2004, six months

from the date of publication of the notice of removal of the

suspension of liquidation order.

Because of this deemed liquidation, the court concludes that

any dispute over Commerce’s negative critical circumstances

determination is moot. See Gerdau Ameristeel, 30 CIT at __, __

F. Supp. 2d at __, slip. op. 04-00608 at 2 (Aug. 10, 2006)

(“Because all of the subject entries at issue have been

liquidated this Court lacks jurisdiction to hear this matter.”).

Mootness has been described as “the doctrine of standing set in a

time frame: The requisite personal interest that must exist at

the commencement of litigation (standing) must continue

throughout its existence (mootness).” United States Parole

Comm’n v. Geraghty, 445 U.S. 388, 397 (1980) (internal quotations

and citations omitted). “Simply stated, a case is moot when the

issues presented are no longer live or the parties lack a legally

cognizable interest in the outcome.” Powell v. McCormack, 395

U.S. 486, 496 (1969) (internal quotation marks omitted).

This Court has held that “liquidation renders moot any
Consol. Court No. 04-00265 Page 61
pending court challenge to the underlying agency determinations

regarding those entries . . . .” Chr. Bjelland Seafoods, 19 CIT

at 46. It has long been settled that a federal court has no

authority “to give opinions upon moot questions . . . .” Church

of Scientology v. United States, 506 U.S. 9, 12 (1992); see also

Mills v. Green, 159 U.S. 651, 653 (1895). Accordingly,

defendant-intervenors’ challenge to Commerce’s negative critical

circumstances determination in its Final Determination is

dismissed as moot.

B. Valuation of 29-inch CPTs

In its Preliminary Determination, Commerce valued

Changhong’s production of 29-inch CPTs using import data reported

on Infodriveindia. See Preliminary Determination, 68 Fed. Reg.

66,808. In its Final Determination, however, Commerce found that

it was no longer appropriate to value CPTs using this data based

on its examination of information relating to Changhong’s market

economy purchases of CPT’s. See Issues & Decision Mem. at 52,

56. At verification, Commerce confirmed that Changhong purchased

a significant quantity of CPTs from Mexico, a market economy

country, approximately three weeks after the POI. Thus, in the

Final Determination, Commerce valued the 29-inch CPTs using

Changhong’s market economy purchases. Id. at 56.
Consol. Court No. 04-00265 Page 62
Defendant-intervenors contend that in the Final

Determination, the “Department inexplicably amended the value

assigned to Changhong’s consumption of 29-inch, curved color

picture tubes in the preliminary determination. See Def.-Int.’s

Mem. at 28. They argue that the Department committed error in

relying on post-POI purchases and, in doing so, deviated from

“Commerce’s longstanding policy of not relying on . . . purchases

. . . that occur outside of the POI.31 Id.

Plaintiffs’ contentions are without merit. First, unlike

Changhong’s claims concerning contemporaneity, infra, here there

is no question as to the actual dates of the transactions. In

31
In its reply, defendant-intervenors contend that the
“Department has an established practice of not relying on an NME
producer’s purchases from market economy suppliers that occur
outside of the POI . . . .” Def.-Int.’s Reply at 16. Although
defendant-intervenors maintain that Commerce “has discussed this
approach and applied it in numerous cases,” they point to only
one example: Certain Automotive Replacement Glass Windshields
from the People’s Republic of China, 67 Fed. Reg. 6482, 6485
(Dep’t Commerce Feb. 12, 2002)(final determination). Id. This
determination is not on point. Although, in that investigation,
Commerce indicated that “consistent with its practice,” it would
continue not to use market economy inputs “if they are
insignificant or purchased outside of the period of
investigation” the matter itself did not involve pre- or post-POI
inputs. 67 Fed. Reg. at 6485. Instead, the issue there was
whether the purchase of market economy inputs was “meaningful.”
See e.g., Shakeproof Assembly Components Div. of Ill. Tool Works
Inc. v. United States, 268 F.3d 1376, 1382 (Fed. Cir. 2001)
(recognizing that the “factors of production for domestically
purchased merchandise may be obtained by extrapolating the market
economy import price only when a ‘meaningful amount of
merchandise is imported.”).
Consol. Court No. 04-00265 Page 63
addition, while preferring information that is contemporaneous

with the POI, Commerce also has a longstanding preference for

using prices paid by NME producers for inputs purchased from a

market economy country. See Sparklers from the People’s Republic

of China, 56 Fed. Reg. 20,588, 20,590 (ITA May 6, 1991)(final

determination)(listing in preferential order, information used to

value factors of production in NME cases: “(1) prices paid by the

NME manufacturer for items imported from a market economy; (2)

prices in the primary surrogate country of domestically produces

or imported materials . . . .”); see also Oscillating Fans and

Ceiling Fans from the People’s Republic of China, 56 Fed. Reg.

55,271 (1991) (final determination) (“Where an input was sourced

from a market economy country and paid for in a market economy

currency, we have used the actual price paid for the input in

calculating FMV.”). Indeed, when valuing factors of production

in an NME country, like China, “[t]he cost for raw materials from

a market economy supplier, paid in convertible currencies,

provides Commerce with the closest approximation of the cost of

producing the goods in a market economy country.” Lasko Metal

Prods. v. United States, 16 CIT 1079, 1081, 810 F. Supp. 314, 317

(1992).

In determining which value to base its final determination

upon, Commerce had two options: (1) value factors of production
Consol. Court No. 04-00265 Page 64
using surrogate import values during the POI; or (2) value

factors based upon actual market economy purchases made by

respondent approximately three weeks outside of the POI. In its

Issues and Decision Memorandum, Commerce explained why it no

longer found it appropriate to base the value for 29-inch CPT’s

on data from Infodriveindia. See Issues & Decision Mem. at 56.

Commerce indicated that “at verification we examined information

related to Changhong’s market-economy purchases of this input

from Thomson Mexico.” Id. As a result, the Department

determined that the market economy purchases represented “a

significant quantity of Changhong’s overall purchases of this

input, and thus found that they were significant” and

consequently “meaningful” as is required by law, and the

Department’s practice. See Issues and Decision Mem. at 56;

accord Shakeproof, 268 F3d at 1382. Thus, Commerce took into

account the circumstances of the purchases, i.e.,: (1) the volume

of the purchase; (2) that the supplier was a market economy

entity; and (3) that the purchase was in market economy currency.

See id. at 55. Given Commerce’s justifiable preference for

market economy purchases, it determined that these aspects

overcame the fact that purchases were modestly outside of the

POI.

It is apparent that no fault can be found with the

Department’s choice of market prices when valuing 29-inch CPTs.
Consol. Court No. 04-00265 Page 65
Commerce properly preferred the post-POI, market economy

purchases over NME import data within the POI. That these

purchases were slightly outside the POI cannot be said to

materially diminish their reliability.

CONCLUSION

In accordance with the foregoing, the court sustains in

part, and remands in part, Commerce’s Final Results. Commerce’s

remand results are due on December 13, 2006, comments are due on

January 12, 2007, and replies to such comments are due on January

23, 2007.

/s/ Richard K. Eaton
Richard K. Eaton, Judge

Dated: September 14, 2006
New York, New York