Luoyang Bearing Factory v. United States

Slip Op. 03-41

UNITED STATES COURT OF INTERNATIONAL TRADE

BEFORE: SENIOR JUDGE NICHOLAS TSOUCALAS

________________________________________
:
LUOYANG BEARING FACTORY, :
:
Plaintiff and :
Defendant-Intervenor, :
:
v. : Consol. Court No.
: 99-12-00743
UNITED STATES, :
:
Defendant, :
:
and :
:
THE TIMKEN COMPANY, :
:
Defendant-Intervenor :
and Plaintiff. :
________________________________________:

[Commerce’s Remand Results are affirmed in part, remanded in part.]

Hume & Associates, PC (Robert T. Hume and Stephen M. De Luca)
for Luoyang, plaintiff and defendant-intervenor.

Robert D. McCallum, Jr., Assistant Attorney General; David M.
Cohen, Director, Commercial Litigation Branch, Civil Division,
United States Department of Justice (Lucius B. Lau); Susan H.
Kuhbach, Acting Assistant Secretary for Import Administration,
Elizabeth C. Seastrum, Senior Counsel, and Rina Goldenberg, of
counsel, Office of the Chief Counsel for Import Administration,
United States Department of Commerce, for the United States,
defendant.

Stewart and Stewart (Terence P. Stewart, Geert De Prest,
Wesley K. Caine, Amy S. Dwyer and Amy A. Karpel) for Timken,
defendant-intervenor and plaintiff.

Dated: April 14, 2003
Consol. Court No. 99-12-00743 Page 2

OPINION

I. Standard of Review

The Court will uphold Commerce’s redetermination pursuant to

the Court’s remand unless it is “unsupported by substantial

evidence on the record, or otherwise not in accordance with law.”

19 U.S.C. § 1516a(b)(1)(B)(i) (1994). Substantial evidence is

“more than a mere scintilla. It means such relevant evidence as a

reasonable mind might accept as adequate to support a conclusion.”

Universal Camera Corp. v. NLRB, 340 U.S. 474, 477 (1951) (quoting

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

Substantial evidence “is something less than the weight of the

evidence, and the possibility of drawing two inconsistent

conclusions from the evidence does not prevent an administrative

agency’s finding from being supported by substantial evidence.”

Consolo v. Federal Maritime Comm’n, 383 U.S. 607, 620 (1966).

II. Background

On October 1, 2002, this Court issued an opinion and order

directing the United States Department of Commerce, International

Trade Administration (“Commerce”), to:

(1) (a) examine whether or not the PRC trading
company import prices constitute the “best
available information” to value either all of
the subject merchandise at issue or a portion
of the subject merchandise purchased by
Luoyang through the trading company and used
Consol. Court No. 99-12-00743 Page 3

by Luoyang in the manufacture of TRB cups and
cones and, if Commerce concludes that the PRC
trading company import prices present the
“best available information” for the purpose
of such surrogate evaluation, to recalculate
Commerce’s determination not inconsistent with
this opinion; and

(b) examine if, and only if, Commerce finds
that the PRC trading company import prices do
not constitute the “best available
information,” whether or not Indonesian data
(that is, Indonesian import statistics and
export data from Japan to Indonesia)
constitute the “best available information”
over export data from Japan to India to value
the bearing quality steel bar used in the
production of TRB cups and cones, and to
explain, (if Commerce finds that export data
from Japan to India is the “best available
information,”) how the entire export data from
Japan to India falls within the range of
values in the United States category benchmark
range;

(2) exclude “consumption of traded goods” from
Commerce’s overhead, SG&A and profit rate
calculations and to recalculate the dumping
margins accordingly; and

(3) (a) explain, with reference to the record,
whether or not the PRC bearing producer’s
import data at issue was “meaningful”; and

(b) provide the Court with an explanation as
to why the PRC trading company data is not the
“best available information” for the purpose
of valuing either the entire FOP (that is,
both the directly imported FOP and the NME
sourced FOP) or the NME sourced FOP.

Luoyang Bearing Factory v. United States, 2002 Ct. Intl. Trade

LEXIS 117, at *108-09, Slip Op. 02-118 (Oct. 1, 2002).
Consol. Court No. 99-12-00743 Page 4

On December 31, 2002, Commerce submitted its Final Results of

Redetermination Pursuant to Court Remand (“Remand Results”).1 On

January 27, 2003, Luoyang submitted comments to this Court

regarding the Remand Results. See Comments on Final Results

Pursuant to Remand (“Luoyang’s Comments”). Subsequently, Timken

submitted a rebuttal to Luoyang’s comments and Commerce filed a

response to Luoyang’s comments.

III. Contentions of the Parties

1. Luoyang’s Contentions

Luoyang limits its comments to Commerce’s decision to use

export data from Japan to India to value bearing quality steel bar

used by Luoyang to manufacture tapered roller bearing (“TRB”) cups

and cones2 and asserts that Commerce’s Remand Results do not

satisfy the Court’s remand order on this issue. See Luoyang’s

1
Luoyang was the only party to submit comments on the draft
results issued by Commerce on December 3, 2002. See Remand
Results at 2-3.
2
Luoyang states that:

Luoyang accepts without comment Commerce’s treatment in
the Remand Results of . . . the exclusion of “consumption
of traded goods” from direct input costs . . . [and]
whether the quantities of steel Luoyang imported directly
to produce cages were “meaningful.” Luoyang objects,
however, to Commerce’s treatment of . . . the selection
of the surrogate value for the steel for cups/cones.

Luoyang’s Comments at 4-5.
Consol. Court No. 99-12-00743 Page 5

Comments at 2, 4-18. In particular, Luoyang argues that rather

than evaluate whether or not the PRC trading company import prices

constitute the “best available information” to value either all of

the subject merchandise at issue or a portion of the subject

merchandise purchased by Luoyang through the trading company and

used by Luoyang in the manufacture of TRB cups and cones, Commerce

in the Remand Results, instead offered its “subsidy suspicion”

policy which amounts to a post hoc rationalization.3 See id. at 5-

9. Luoyang further argues that since the Court in Luoyang Bearing

Factory, 2002 Ct. Intl. Trade LEXIS 117, at *95 n.28, refused to

add information pertaining to a subsequent review to the record,

the Court now should likewise reject Commerce’s rationale in the

Remand Results because Commerce’s rationale constitutes new record

evidence. See Luoyang’s Comments at 7 n.20. Moreover, Luoyang

contends that “[b]oth the United States Supreme Court and this

Court have categorically rejected consideration of post

3
Luoyang contends that Commerce’s argument amounts to a post
hoc rationalization because Commerce in the Final Results of 1997-
1998 Antidumping Duty Administrative Review and Final Results of
New Shipper Review of Tapered Roller Bearings and Parts Thereof,
Finished and Unfinished, From the People’s Republic of China
(“Final Results”), 64 Fed. Reg. 61,837, 61,845 (Nov. 15, 1999),
“relied ‘solely on {its} policy of not using import prices paid by
PRC trading companies[,]’” Luoyang’s Comments at 6-7 (quoting
Remand Results at 6), whereas in “[t]he Remand Results, . . .
[Commerce] presented a new basis for disregarding the trading
company prices, namely that ‘there is sufficient evidence to
believe or suspect that the steel purchased by the PRC trading
company could have been subsidized.’” Luoyang’s Comments at 7.
Consol. Court No. 99-12-00743 Page 6

hoc rationalizations and arguments which are not on the record. .

. . Commerce’s ‘subsidy suspicion’ argument meets both criteria

for rejection.” Id. at 9 (emphasis omitted); see also id. at 8-9

(citing Burlington Truck Lines, Inc. v. United States, 371 U.S.

156, 168-69 (1962), and Hoogovens Staal BV v. United States, 22 CIT

139, 143, 4 F. Supp. 2d 1213, 1218 (1998)).

Next, Luoyang argues that Commerce’s acknowledgment that the

export data from Japan to India value of $871 per metric ton (“MT”)

does not fall within the United States benchmark range of $642/MT

to $834/MT and Commerce’s subsequent explanation that “its

intention ‘was to indicate that the [export data from Japan] to

India fell ‘within range’ of the values in the benchmark range’”

(that is, the export data from Japan to India value was reasonable

when compared to the values within the benchmark range) amounts to

a post hoc rationalization. Luoyang’s Comments at 10 (quoting

Remand Results at 11); see also Luoyang’s Comments at 5. Luoyang

further argues that “Commerce failed to give any example in the

Remand Results where it applied the ‘within range of the range’

methodology in any other case.” Luoyang’s Comments at 10-11.

Additionally, Luoyang contends that “Commerce’s preference for

a single surrogate country does not trump the statutory requirement

to use the ‘best available information.’” Id. at 11. In
Consol. Court No. 99-12-00743 Page 7

particular, Luoyang argues that in Luoyang Bearing Factory, 2002

Ct. Intl. Trade LEXIS 117, at *26-27 n.8, “this Court rejected

Commerce’s argument that its primary surrogate country preference

overrides the statutory mandate to use the ‘best available

information[]’” and “[y]et, this is what Commerce claims in the

Remand Results by asserting again the primacy of its single

surrogate country policy.” Id. at 11-12. Luoyang maintains that

in the Remand Results Commerce’s only additional argument that is

offered to support Commerce’s preference policy “[is] the fact

[that] the policy was discussed in [Commerce’s] Antidumping

Manual.” Luoyang’s Comments at 12.4

2. Commerce’s Contentions

Commerce responds that pursuant to the Court’s opinion and

order in Luoyang Bearing Factory, 2002 Ct. Intl. Trade LEXIS 117,

at *46-47, 108, Commerce examined the PRC trading company import

price and found that it did not constitute the “best available

4
Luoyang also argues that “Commerce failed to disregard
aberrational data” in the Remand Results. Luoyang’s Comments at
16. The Court will not address this argument since it is outside
the scope of this remand redetermination and particularly since
this Court in Luoyang Bearing Factory, 2002 Ct. Intl. Trade LEXIS
117, at *48, held that “the Court disagrees with Luoyang that the
Court should order that Commerce exclude the values for January
1998 and March 1998 from the export data from Japan to India.
Luoyang may not usurp Commerce’s role as fact-finder and substitute
Luoyang’s analysis for the result reached by Commerce.”
Consol. Court No. 99-12-00743 Page 8

information” to value either all of the subject merchandise at

issue or a portion of the subject merchandise purchased by Luoyang

through the trading company and used by Luoyang in the manufacture

of TRB cups and cones because “the steel purchased by Luoyang from

the PRC trading company was manufactured in [a certain country] .

. . [and] [a]t the time of the . . . Final Results, [64 Fed. Reg.

61,837] there was reason to believe or suspect that [the certain

country’s] steel was subsidized.” Remand Results at 6.

Specifically, Commerce points out that “[it] found in [various

countervailing duty determinations that the certain country at

issue] maintains generally available subsidies that were greater

than de minimis [and] . . . based on the existence of generally

available subsidies, there is sufficient evidence to believe or

suspect that the steel purchased by the PRC trading company could

have been subsidized.” Id. at 8-9 (emphasis supplied); see also

id. at 21. Relying on the Omnibus Trade and Competitiveness Act of

1988, Pub. L. No. 100-418, 102 Stat. 1107 (1988), Commerce

maintains that the legislative history states that “‘in valuing .

. . {nonmarket economy . . .} factors, [Commerce] shall avoid using

any prices which it has reason to believe or suspect may be dumped

or subsidized prices . . . [and] [Commerce] is not required to

conduct a formal investigation to support a finding of ‘reason to

believe or suspect,’ but should instead base its decision on
Consol. Court No. 99-12-00743 Page 9

information that is generally available to it at the time it is

making its determination.” Remand Results at 6-7; see also id. at

20. Commerce further maintains that Commerce’s reference to

“general subsidies” in Final Results of Antidumping Administrative

Review of Certain Helical Spring Lock Washers From The People’s

Republic of China, 61 Fed. Reg. 66,255, 66,257 (Dec. 17, 1996),

means that “even if the importing surrogate country or NME does not

have a subsidies finding, it may be possible to infer that prices

of the input in question are subsidized.” Remand Results at 8.

Commerce, therefore, asserts that “in cases where the facts

developed in [United States] or third country countervailing duty

findings are sufficient to allow [Commerce] to infer that there are

broadly available subsidies, [Commerce] will consider that it has

reason to believe or suspect that prices of the input from that

country are subsidized.” Id.

Next, Commerce concedes that the export data from Japan to

India value of $871 per MT “does not fall ‘within the range of the

values’ in the [United States] benchmark category of $642/MT to

$834/MT.” Remand Results at 10. Commerce points out that in the

Final Results, 64 Fed. Reg. 61,837, Commerce “erroneously stated

that [Commerce’s] examination was focused on whether the potential

surrogate values fell ‘within the range of the values’ . . . in the

[United States] benchmark category” and that Commerce’s
Consol. Court No. 99-12-00743 Page 10

“intent[ion] was to indicate that the [export data from Japan] to

India value fell ‘within range’ of the values in the benchmark

range, i.e., that the [export data from Japan] to India value was

reasonable when compared to the values within the benchmark range.”

Id. at 10-11. In the Remand Results, Commerce explained the use of

Commerce’s benchmark range by stating:

As [Commerce] noted in the [Final Results of
Redetermination Pursuant to Court Remand in Timken Co. v.
United States, 26 CIT ___, 201 F. Supp. 2d 1316 (2002)],
the purpose of a benchmark is to test the reliability of
certain values under consideration as surrogate values.
For cups and cones, [Commerce] ha[s] repeatedly used
[United States] prices as a benchmark because the
Harmonized Tariff Schedule of the United States (“HTSUS”)
category is the only world market HS category of which
[Commerce] [is] aware that explicitly contains only
bearing quality steel, the type of steel used to
manufacture TRBs cups and cones. By using values from
this HTSUS category, [Commerce] [is] able to test whether
the broader surrogate country HS categories likely
reflect imports of bearing quality steel or whether they
likely reflect imports of other types of steel. The use
of the [United States] data for this purpose has been
upheld by the [Court of International Trade].

. . . As long as a surrogate value is reasonably
close to the benchmark value or range of benchmark
values, [Commerce] will not treat that surrogate value as
being aberrational.

If [Commerce] were to reject certain values simply
because they are above or below the benchmark or
benchmark range, [Commerce] would, in essence, be saying
that any data that is not exactly the same as the
benchmark data must be unreliable and abberrational. In
this instance, because the data being utilized as
benchmark data is [United States] data, by adopting a
policy that all surrogate values outside of the benchmark
range are unreliable, [Commerce] would essentially be
adopting the United States as a surrogate country. This
Consol. Court No. 99-12-00743 Page 11

would be contrary to the statute [that is, 19 U.S.C. §
1677b(c)(4) (1994)] because the United States is not
comparable to the PRC in terms of economic development.

Remand Results at 11-12 (citations omitted).5

Commerce, therefore, maintains that: (1) the average export

data from Japan to India value of $871/MT “is reasonable when

compared to the range of values in the [United States] benchmark

category of $642/MT to $834/MT[,]” id. at 13; (2) export data from

Japan to India is the best available information for valuing TRB

cups and cones because “the Japanese tariff category is the

narrowest category that could contain bearing quality steel and

because it is consistent with [Commerce’s] benchmark[,]” id.; and

(3) export data from Japan to India is the best available

information to value TRB cups and cones because “as discussed in

[Final Results, 64 Fed. Reg. 61,837], [Commerce] chose India as

5
Luoyang responds that Commerce “misapplied the [United
States] benchmark” because “using a range is not appropriate when
comparing Japanese export prices.” Luoyang’s Comments at 13. In
particular, Luoyang asserts that unlike in Timken Co. v. United
States, 25 CIT ___, 166 F. Supp. 2d 608 (2001), where “Commerce was
using the benchmark to evaluate ‘imports’ into Indonesia and
India[,]” in Final Results, 64 Fed. Reg. 61,837, “Commerce
evaluated Japanese export prices in a ‘basket category[]’ [and,
therefore,] [t]he [United States] prices of Japanese ‘bearing
quality steel’ . . . should be compared with Japanese exports to
Indonesia and India.” Id.; see also id. at 13-14 (citing Ex. 3).
Moreover, Luoyang argues that “[i]f Commerce concludes that
Japanese exports, rather than Indonesian imports, represent the
best ‘alternative’ surrogate value, then Commerce should select the
exports that are consistent with Japanese [bearing quality steel]
prices.” Luoyang’s Comments at 15.
Consol. Court No. 99-12-00743 Page 12

[Commerce’s] primary surrogate country and [Commerce] considers the

[export data from Japan] to India to be refined Indian data.” Id.

Finally, relying on 19 C.F.R. § 351.408(c)(2) (1998) and the

Court’s discussion of Commerce’s Antidumping Manual in Timken Co.,

25 CIT at ___, 166 F. Supp. 2d at 621-22, Commerce argues that

“[b]ecause [Commerce] ha[s] a reliable surrogate value [that is,

export data from Japan to India] from [Commerce’s] primary

surrogate country, India, and it is [Commerce’s] preference to

value surrogate values using a single surrogate country whenever

possible, [Commerce] need not further examine data from a secondary

surrogate country, specifically cups and cones data on Japanese

exports to Indonesia.” Remand Results at 14; see also id. at 13-

14, 22-23.

3. Timken’s Contentions

Timken generally agrees with Commerce and maintains that

“Commerce fully complied with the Court’s remand instructions [and,

therefore,] Luoyang’s position is without merit and should be

rejected.” Rebuttal to Plaintiff Luoyang’s Comments on Final

Results Pursuant to Remand (“Timken’s Rebuttal”) at 2.

In response to Luoyang’s comments regarding Commerce’s

rejection of the PRC trading company data, Timken argues that: (1)
Consol. Court No. 99-12-00743 Page 13

“Luoyang’s contention that Commerce did not evaluate the PRC

trading company data is simply incorrect[,]” id. at 5; (2) “Luoyang

. . . misapplies the rule on post hoc rationalization to the

present circumstances[,]” id. (citing Mitsubishi Heavy Indus., Ltd.

v. United States, 24 CIT 275, 281 n.9, 97 F. Supp. 2d 1203, 1209

n.9 (2000), reh’g denied, 112 F. Supp. 2d 1170 (2000), aff’d 275

F.3d 1056, 1066 (Fed. Cir. 2001), and “[u]nder Luoyang’s fallacious

logic, . . . any explanation Commerce could have given as to what

examination of the PRC trading company data revealed would be ‘post

hoc[,]’” Timken’s Rebuttal at 7 (emphasis omitted); (3) Commerce’s

“subsidy suspicion policy” does not constitute new record evidence

because “as Commerce explained in [Commerce’s] Remand Results,

[Commerce] did not use new information from a subsequent

administrative review . . . [but] [r]ather . . . relied on its own

countervailing duty determinations (contemporaneous with the

underlying TRBs administrative review) regarding the subsidization

of steel in the country in question as published in the Federal

Register[,]” Timken’s Rebuttal at 8 (citing Remand Results at 8-9);

and (4) “Commerce’s decision on remand not to use the PRC trading

company data because [Commerce] had reason to believe or suspect

that such data reflected subsidized prices is not ‘new policy’” but

“[r]ather, Commerce’s decision rests on interpretation of its

statutory obligation to use the best available information in
Consol. Court No. 99-12-00743 Page 14

valuing factors of production . . . in conjunction with . . . clear

legislative history.” Timken’s Rebuttal at 8.

Next, Timken maintains that Commerce properly explained its

decision to use export data from Japan to India because the Court

in Timken Co., 25 CIT at ___, 166 F. Supp. 2d at 616, noted

Commerce’s preference for a single surrogate country when it

stated:

Commerce values as many FOPs as possible using
information obtained from the “primary” surrogate
country, that is, the country that Commerce considers to
be most comparable in economic terms to the NME country
being investigated, and that also produces merchandise
comparable to the subject merchandise. * * *
Additionally, if Commerce determines that suitable values
cannot be obtained from the data of the primary surrogate
country, Commerce resorts to the data from the second,
and sometimes the third, surrogate. * * *

Timken’s Rebuttal at 9-10 n.4 (emphasis omitted)(quoting Timken

Co., 25 CIT at ___, 166 F. Supp. 2d at 616).

IV. Analysis

As a preliminary matter, the Court finds that Commerce’s

explanation (i.e., its reason to believe or suspect that the steel

purchased by the PRC trading company could have been subsidized)

for disregarding the PRC trading company data to value either all

of the subject merchandise at issue or a portion of the subject

merchandise purchased by Luoyang through the trading company and
Consol. Court No. 99-12-00743 Page 15

used by Luoyang in the manufacture of TRB cups and cones does not

amount to a post hoc rationalization. See Mitsubishi, 24 CIT at

281 n.9, 97 F. Supp. 2d at 1209 n.9 (quoting Motor Vehicle Mfrs.

Ass’n v. State Farm, 463 U.S. 29, 50 (1983) (“‘[T]he courts may not

accept appellate counsel’s post hoc rationalizations for agency

action. . . . It is well-established that an agency’s action must

be upheld, if at all, on the basis articulated by the agency

itself’”)). As Timken correctly notes, if Luoyang’s argument is

taken to its logical conclusion, any explanation offered by

Commerce to comply with this Court’s opinion and order in Luoyang

Bearing Factory, 2002 Ct. Intl. Trade LEXIS 117, at *46-47, 108,

would be deemed a form of post hoc rationalization.6

6
The Court also finds that Commerce’s acknowledgment that
export data from Japan to India was not within the United States
benchmark range and Commerce’s subsequent explanation that
Commerce’s intention was to indicate that the export data from
Japan to India value (that is, $871 per MT) fell within range of
the values in the benchmark range (that is, $642 per MT to $834 per
MT) does not amount to a post hoc rationalization. Moreover, the
Court rejects Luoyang’s assertion that using a range is not
appropriate when comparing Japanese export prices. In particular,
with respect to Luoyang’s assertion that “[t]he [United States]
prices of Japanese ‘bearing quality steel’ . . . should be compared
with Japanese exports to Indonesia and India[,]” Luoyang’s Comments
at 13, the Court’s “duty is not to weigh the wisdom of, or to
resolve any struggle between, competing views of the public
interest, but rather to respect legitimate policy choices made by
the agency in interpreting and applying the statute.” Suramerica
de Aleaciones Laminadas, C.A. v. United States, 966 F.2d 660, 665
(Fed. Cir. 1992).
Consol. Court No. 99-12-00743 Page 16

However, the Court remands Commerce’s decision to disregard

the PRC trading company data to value either all of the subject

merchandise at issue or a portion of the subject merchandise

purchased by Luoyang through the trading company and used by

Luoyang in the manufacture of TRB cups and cones for a different

reason. In particular, the Court finds that Commerce’s explanation

that the PRC trading company import data did not constitute the

“best available information” because “the steel purchased by

Luoyang from the PRC trading company was manufactured in [a certain

country] . . . [and] [a]t the time of the . . . Final Results, [64

Fed. Reg. 61,837] there was reason to believe or suspect that [the

certain country’s] steel was subsidized[,]” Remand Results at 6,

is not supported by substantial evidence. The Court is not

satisfied with Commerce’s reliance on various countervailing duty

determinations to support Commerce’s reason to believe or suspect

that the steel purchased by the PRC trading company at issue could

have been subsidized because the various countervailing duty

determinations relied upon by Commerce do not include the hot-

rolled bearing quality steel bar, the steel product at issue in

this case. See Luoyang Bearing Factory, 2002 Ct. Intl. Trade LEXIS

117, at *14 n.3. Although the Court is aware of the Omnibus Trade

and Competitiveness Act of 1988's language stating that Commerce

shall avoid using any prices which it has reason to believe or
Consol. Court No. 99-12-00743 Page 17

suspect may be subsidized and that Commerce is not required to

conduct a formal investigation, the Court remands this case to

Commerce to point to specific evidence demonstrating that the type

of steel at issue (i.e., hot-rolled bearing quality steel bar)

purchased by the PRC trading company was subsidized. See generally

China National Machinery Import & Export Corp. v. United States,

2003 WL 648879, at *10 (CIT Feb. 13, 2003) (“[Commerce] must

demonstrate particular, specific, and objective evidence to uphold

its reason to believe or suspect that the prices [the PRC

plaintiff] paid the supplier for the inputs were subsidized”).

Next, the Court finds that Commerce failed to examine whether

or not Indonesian data (that is, Indonesian import statistics and

export data from Japan to Indonesia) constitute the “best available

information” over export data from Japan to India to value the

bearing quality steel bar used in the production of TRB cups and

cones. See Luoyang Bearing Factory, 2002 Ct. Intl. Trade LEXIS

117, at *49-50, 108-09. In the Remand Results, Commerce stated

that export data from Japan to India is the best available

information to value TRB cups and cones because “as discussed in

[Final Results, 64 Fed. Reg. 61,837], [Commerce] chose India as

[Commerce’s] primary surrogate country and [Commerce] consider[s]

the [export data from Japan] to India to be refined Indian data.”

Remand Results at 13. Additionally, Commerce stated:
Consol. Court No. 99-12-00743 Page 18

Because [Commerce] ha[s] a reliable surrogate value [that
is, export data from Japan to India] from [Commerce’s]
primary surrogate country, India, and it is [Commerce’s]
preference to value surrogate values using a single
surrogate country whenever possible, [Commerce] need not
further examine data from a secondary surrogate country,
specifically cups and cones data on Japanese exports to
Indonesia.

Id. at 14; see also id. at 23 (citing Timken Co., 25 CIT at ___,

166 F. Supp. 2d at 621-22).

In Luoyang Bearing Factory, 2002 Ct. Intl. Trade LEXIS 117, at

*26-27 n.8, this Court stated:

The Court shall not entertain Commerce’s statement
[that is, Commerce’s statement that Commerce’s
regulations give preference to the use of one surrogate
country to value all factors of production] since the
Court is not aware of any particular preference which
trumps the general requirement for precision that
underlines the antidumping law. See Timken [Co.], 25 CIT
at __, 166 F. Supp. 2d at 621 (stating that “[t]he
statute permits Commerce to draw surrogate value
information from more than one market economy country,”
citing 19 U.S.C. § 1677b(c)(1); and quoting Chemical
Prods. Corp. v. United States, 10 CIT 700, 706, 650 F.
Supp. 178, 182 (1986)(which provides that “‘[t]he
regulation [relied upon by Commerce] is silent concerning
whether Commerce may use data from a country other than
its designated surrogate when Commerce finds that a
comparison of one element of foreign market value in the
surrogate would yield an unrealistic result’”).

Moreover, this Court in Luoyang Bearing Factory found that “it was

illogical for Commerce to utilize export data from Japan to India

and then to subsequently fail to review analogously structured

export data from Japan to Indonesia.” Luoyang Bearing Factory,

2002 Ct. Intl. Trade LEXIS 117, at *49.
Consol. Court No. 99-12-00743 Page 19

The Court again finds Commerce’s reasoning in the Remand

Results illogical and unreasonable. In particular, in the case at

bar, Commerce determined that Indian import data (that is, primary

surrogate data) was unreliable. See Luoyang Bearing Factory, 2002

Ct. Intl. Trade LEXIS 117, at *17 (citing Final Results, 64 Fed.

Reg. at 61,840). When Commerce used export data from Japan to

India and treated that data as “refined” Indian data, Commerce

illogically and unreasonably failed to review Indonesian import

statistics and export data from Japan to Indonesia prior to

ultimately resorting to export data from Japan to India as the

“best available information” in valuing the bearing quality steel

bar used to produce the TRB cups and cones at issue.7 See Timken

Co., 26 CIT at ___, 201 F. Supp. 2d at 1329 (“[T]he Court finds

that Commerce’s reasoning for rejecting the export data from Japan

to India as a surrogate value was not sufficiently explained. To

the contrary, on the basis of the explanation supplied by Commerce

one may conclude that it was illogical for Commerce to utilize

export data from Japan to Indonesia in order to ‘refine’ the

7
The Court’s finding is not inconsistent with Timken Co., 25
CIT at ___, 166 F. Supp. 2d at 621-22. In Timken Co., the Court
stated “[b]ecause the statute [19 U.S.C. § 1677b(c)(4)] and the
manual [Commerce’s Antidumping Manual] both suggest that Commerce
should rely on data from the ‘first choice surrogate country’ only
to the extent possible, it is logical to conclude that, where it is
not possible, Commerce is entitled to rely on data from other
surrogate countries.” Timken Co., 25 CIT at ___, 166 F. Supp. 2d
at 621.
Consol. Court No. 99-12-00743 Page 20

Indonesian data and then to subsequently reject analogously

structured export data from Japan to India”).

Based on the foregoing, the Court again remands to Commerce,

to examine if, and only if, Commerce finds that the PRC trading

company import prices did not constitute the “best available

information,” whether or not Indonesian data (that is, Indonesian

import statistics and export data from Japan to Indonesia)

constitute the “best available information” over export data from

Japan to India to value the bearing quality steel bar used in the

production of TRB cups and cones.

V. Conclusion

The Court remands this case to Commerce to: (a) point to

specific evidence demonstrating that the type of steel at issue

(i.e., hot-rolled bearing quality steel bar) purchased by the PRC

trading company was subsidized; and (b) examine if, and only if,

Commerce finds that the PRC trading company import prices do not

constitute the “best available information,” whether or not

Indonesian data (that is, Indonesian import statistics and export

data from Japan to Indonesia) constitute the “best available

information” over export data from Japan to India to value the

bearing quality steel bar used in the production of TRB cups and

cones. The other aspects of Commerce’s Remand Results are
Consol. Court No. 99-12-00743 Page 21

uncontested and, upon a review of the results, the Court finds them

supported by substantial evidence on the record and in accordance

with law.

______________________________
NICHOLAS TSOUCALAS
SENIOR JUDGE

Dated: April 14, 2003
New York, New York