Allied Tube and Conduit Corp. v. United States

Slip Op. 01-03

UNITED STATES COURT OF INTERNATIONAL TRADE

___________________________________
:
ALLIED TUBE AND CONDUIT CORP., :
:
Plaintiff, :
:
v. :
: Court No. 99-11-00715
THE UNITED STATES, :
: Public
Defendant, : Version
:
and :
:
SAHA THAI STEEL PIPE CO., LTD., :
ET AL., :
:
Defendant-Intervenors. :
___________________________________:

[ITA’s antidumping determination affirmed in part and remanded in
part.]

Dated: January 18, 2001

Schagrin Associates (Roger B. Schagrin) for plaintiff.

David W. Ogden, Assistant Attorney General, David M. Cohen,
Director, Commercial Litigation Branch, Civil Division, United
States Department of Justice (Michele D. Lynch), Brian K. Peck,
Office of Chief Counsel for Import Administration, United States
Department of Commerce, of counsel, for defendant.

O’Melveny & Myers LLP (Peggy A. Clarke and Greyson Bryan)
for defendant-intervenors Saha Thai Steel Pipe Co., Ltd., Ferro
Union, Inc., and Asoma Corporation
Court No. 99-11-00715 Page 2

OPINION

RESTANI, Judge: This matter is before the court on a motion

for judgment on the agency record pursuant to USCIT Rule 56.2,

brought by Allied Tube and Conduit Corp. (“Allied Tube” or

“plaintiff”), the petitioner in the underlying antidumping

administrative review. Defendant-intervenors Saha Thai Steel

Pipe Co., Ltd. (“Saha Thai” or “respondent”), Ferro Union, Inc.,

and Asoma Corporation (collectively “defendant-intervenors”)

appear in order to support the determination of the United States

Department of Commerce (“Commerce” or the “Department”) in the

underlying administrative proceeding. At issue is Certain Welded

Carbon Steel Pipes and Tubes from Thailand, 64 Fed. Reg. 56,759

(Dep’t Comm. 1999) (final determ.) [hereinafter “Final Results”].

Allied Tube challenges two of the Department’s conclusions

from the Final Results: (1) that the date of sale on which

normal value is to be determined for Saha Thai’s sales is the

invoice date, and (2) that Saha Thai is entitled to a duty

drawback adjustment to its export price, at an amount quantified

based on the Department’s selection of facts available. Commerce

and defendant-intervenors urge this court to deny plaintiff’s

motion based on the following: (1) plaintiff’s challenge to the

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identification of invoice date as the date of sale cannot

overcome the agency’s regulatory presumption in favor of invoice

date, and (2) Saha Thai satisfied the Department’s two-prong test

for entitlement to duty drawback, notwithstanding certain of Saha

Thai’s inaccuracies, which were addressed in any event by

Commerce’s use of facts otherwise available.

JURISDICTION AND STANDARD OF REVIEW

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

(1994). In reviewing final determinations in antidumping duty

investigations, this court will hold unlawful those

determinations of Commerce 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) (1994).

DISCUSSION

I. Date of Sale

A. Facts

In response to the Department’s initial questionnaire

regarding the date of sale for Saha Thai’s U.S. sales, respondent

submitted to Commerce a representative group of sales documents.

See Supplement to Section A Questionnaire Response (July 1,

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1998), at Exh. 12, C.R. Doc. 3, Saha Thai App., Tab A. Saha Thai

reported invoice date as the date of sale. See Section C

Questionnaire Response (Aug. 3, 1998), at C-16 to 17, C.R. Doc.

7, Saha Thai App., Tab B, at C-16 to 17. Responding to an

additional request for information regarding date of sale, Saha

Thai reported that for sales to the company’s principal U.S.

customer, which accounted for two-thirds of U.S. sales,

the contract notes only the total quantity to be
ordered. The specific quantity for each product is set
subsequently. The exact quantity for each sale is not
determined until the merchandise is shipped.

Supplemental Questionnaire Response (Sept. 23, 1998), at 13, C.R.

Doc. 14, Def.’s App., Exh. 2, at 2.

The Department conducted a verification of Saha Thai’s

questionnaire responses during the week of January 25, 1999. See

Verification Report (Feb. 25, 1999), at 1, C.R. Doc. 22, Saha

Thai App., Tab E, at 1. Commerce confirmed during verification

that Saha Thai’s business records identified invoice date as the

date of sale. See id. at 13, Saha Thai App., Tab E, at 13.

Respondent also produced exhibits, reviewed by the Department,

that included contracts, invoices and purchase orders for certain

U.S. sales. See Verification Exhs. 21, 22, 23, in Pl.’s App., at

74-108, 109-123, 124-135, respectively. In response to

Department questions about the export sales process, Saha Thai’s

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export manager noted that the sales contracts establish

quantities, but that customers submit purchase orders that

indicate specific quantities to be supplied for each product and

shipment. See Verification Report, at 20, Saha Thai App., Tab E,

at 20. The sales contracts allow for deviations from the

specified quantity of up to X %,1 measured against the total

quantity of goods in a purchase order (covering subject and non-

subject merchandise), not against the quantity for individual

products or shipments. See id. at 20, Saha Thai App., Tab E, at

20.

Based on its evaluation of Saha Thai’s sales documentation,

viewed in the context of the specific terms of respondent’s sales

contracts, the Department concluded that changes in material

terms of sale, particularly quantity, occurred between purchase

order date and invoice date. See Final Results, 64 Fed. Reg. at

56,768.

1
“X” represents the [ ]% tolerance figure specified
in the sales contracts.

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B. Analysis

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The Department’s date of sale determination is governed by

19 C.F.R. § 351.401(i) (2000).2 Section 351.401(i) provides that

Commerce will “normally” use the invoice date as the date of

sale. A party seeking to have the invoice date deemed the date

of sale is entitled to this regulatory presumption only if that

party records the invoice date as the date of sale in the

company’s “records kept in the ordinary course of business.” Id.

Once a party’s records reveal that it identifies the invoice date

as the date of sale, the party seeking to establish a date of

sale other than invoice date bears the burden of producing

sufficient evidence to “satisf[y]” the Department that “a

different date better reflects the date on which the exporter or

producer establishes the material terms of sale.” Id.

As elaborated by Department practice, a date other than

invoice date “better reflects” the date when “material terms of

sale” are established if the party shows that the “material terms

of sale” undergo no meaningful change (and are not subject to

meaningful change) between the proposed date and the invoice

2
Allied Tube also challenges the Department’s date of
sale regulation as ultra vires because it is inconsistent with
the antidumping statute and the Statement of Administrative
Action, accompanying H.R.Rep. No. 103-826(I), reprinted in 1994
U.S.C.C.A.N. 4040 (“SAA”). This argument has been considered and
rejected by this court in Allied Tube and Conduit Corp. v. United
States, No. 98-11-03135, Slip Op. 00-160, at 19-23 (Ct. Int’l
Trade Dec. 12, 2000).

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date. See, e.g., Issues & Decision Mem. to Certain Large

Diameter Carbon and Alloy Seamless Standard, Line and Pressure

Pipe from Mexico, 65 Fed. Reg. 39,358 (Dep’t Comm. June 2000)

(final determ.), at cmt. 2 [hereinafter “Issues Mem. to Pipe from

Mexico”]; Issues & Decision Mem. to Circular Welded Non-Alloy

Steel Pipe from Mexico, 65 Fed. Reg. 37,518 (Dep’t Comm. June

2000) (final determ.), at Hylsa cmt. 1. Whatever else may

constitute “material terms of sale,” agency practice makes clear

that price and quantity, at least, are such “material terms.”

See, e.g., Stainless Steel Sheet and Strip in Coils from the

Republic of Korea, 64 Fed. Reg. 30,664, 30,679 (Dep’t Comm. 1999)

(final determ.); Stainless Steel Sheet and Strip in Coils from

Taiwan, 64 Fed. Reg. 30,592, 30,609 (Dep’t Comm. 1999) (final

determ.). Therefore, if there is a change in price and/or

quantity after the proposed date, and the Department fails to

provide a rational explanation as to why such a change is not

meaningful for date of sale analysis, then Commerce is bound

under the regulation to employ invoice date as the date of sale.

See Thai Pineapple Canning Indus. Corp., Ltd. v. United States,

No. 98-03-00487, 2000 WL 174986, at *2 (Ct. Int’l Trade 2000).

Plaintiff in this case failed to cite sufficient evidence to

compel a rejection of the regulatory presumption in favor of

invoice date as the date of sale. Respondent Saha Thai’s

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internal business records, as verified by the Department,

identified the date of sale to be the invoice date. See

Verification Report, at 13, Saha Thai App. Tab E, at 13. The

presumption in favor of the invoice date was further strengthened

by the changes in quantity observed by the Department between the

purchase order date and the invoice or shipment date.3 See Date

of Sale Memo (Aug. 11, 1999), at 3-4, C.R. Doc. 34, Pl.’s App.,

at 54-55.

Plaintiff emphasizes previous agency determinations

suggesting that the date of sale may be other than the invoice

date, notwithstanding changes in quantity, based on the fact that

such quantity changes fell within tolerance limits specified in

the relevant sales contracts. See Issues Mem. to Pipe from

Mexico, at cmt. 2; Certain Welded Carbon Steel Pipes and Tubes

from Thailand, 63 Fed. Reg. 55,578, 55,588 (Dep’t Comm. 1998)

(final determ.). These findings do not dictate a similar result

here, however, because plaintiff has not cited evidence

3
Plaintiff challenges the Department’s reliance on
changes in quantity as calculated from incomplete documentation
provided in Verification Exhibit 23, in particular, the absence
of a complete purchase order. See Verification Exh. 23, in Pl.’s
App., at 124-135. The type of documentation required varies from
investigation to investigation. Whether judged in hindsight a
different investigation would have been more enlightening, here
plaintiff has failed to establish that Commerce did not perform
its core investigatory duties adequately. See infra discussion
in text.

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establishing that the quantity changes between the purchase order

date and the invoice date in this case were within the sales

contracts’ tolerance limits. Calculating Saha Thai’s shipments

of individual products (i.e., subject merchandise) to be within X

% of the amount specified in the sales contracts and purchase

orders,4 plaintiff argues that the changes in quantity relied

upon by the Department are within the tolerance limits permitted

by the contracts and therefore should not be considered

meaningful changes for purposes of the agency’s date of sale

determination. The sales contracts, however, permitted shipments

within X % of the contractually-specified quantity, measured in

terms of all products in a purchase order (including subject and

non-subject merchandise), not in terms of quantity per shipment

of individual products.5 See Verification Report, at 20, Saha

Thai App., Tab E, at 20. Because plaintiff failed to establish

that the quantities shipped by respondent were within the

tolerance limits, when viewed against the aggregate quantity per

purchase order, plaintiff did not “satisf[y]” the Department that

4
See supra n.1.
5
Although the contracts covered subject and non-subject
merchandise, none of the parties has established that the
malleability of the contractual situation turned on the type of
merchandise covered.

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a date other than invoice date “better reflect[ed]” the date of

sale.

By placing on plaintiff the burden to cite to evidence

comparing the changes in quantity against the aggregate quantity

per purchase order, the court essentially may be requiring

plaintiff in this case to ensure that a complete set of invoices

for each sales contract is in the record. Such evidence,

understandably, is uniquely within the control of respondent.

The court recognizes that, in this case, plaintiff therefore

could not have placed the requisite evidence on record by its own

submissions. Nevertheless, plaintiff could have taken the steps

necessary to ensure the placement of such evidence on the record,

for example, by requesting the Department to obtain the

documentation from the respondents.

Even though the Department and plaintiff were unaware until

verification that the tolerance limits were measured against the

total quantity on a purchase order, the Department is capable of

seeking additional information from respondents through requests

made during verification or supplemental questionnaires issued

after verification. See, e.g., Dynamic Random Access Memory

Semiconductors of One Megabit and Above (“DRAMs”) from Taiwan, 64

Fed. Reg. 56,308, 56,310 (Dep’t Comm. 1999) (final determ.) (two

supplemental questionnaires issued after sales verification);

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Stainless Steel Plate in Coils (“SSPC”) from the Republic of

Korea, 64 Fed. Reg. 15,444, 15,450 (Dep’t Comm. 1999) (final

determ.) (“During the course of verification, it is normal for

the Department to request additional information or documentation

from a respondent.”); Sulfanilic Acid from the People’s Republic

of China, 63 Fed. Reg. 63,834, 63,836 (Dep’t Comm. 1998) (final

determ.) (supplemental questionnaire issued after verification).

Plaintiff could have made the request for the desired information

in post-verification comments.6 Plaintiff does not claim that it

made such a request of the Department, and the court has found no

evidence of such a request in its review of the record. Although

the investigatory nature of the proceeding places the burden of

the core of the investigation on Commerce, the parties do guide

the process and must alert the agency to matters which they

believe require unusually detailed inquiry.

In any event, even if plaintiff were correct that quantity

changes under the sales contracts at issue should be evaluated

based on shipments of individual products, rather than on the

aggregate quantity of products per purchase order, invoice date

6
In fact, plaintiff in this case did submit such post-
verification comments on Saha Thai’s verification responses “in
anticipation of the Department’s preliminary results,” but
plaintiff’s comments did not include a request for additional
invoices. Petitioners’ Post-Verification Comments On Saha Thai,
at 1, C.R. Doc. 23.

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would remain the proper date of sale. A comparison of a purchase

order and corresponding invoice from Verification Exhibit 21

revealed a percentage change in quantity far in excess of the

contractually-specified tolerance limit.7 See Date of Sale Memo,

at 3, C.R. Doc. 34, Pl.’s App., at 54. Given the regulatory

presumption favoring the use of invoice date, the existence of

this one sale beyond contractual tolerance levels suggests

sufficient possibility of changes in material terms of sale so as

to render Commerce’s date of sale determination supported by

substantial evidence.

Accordingly, the court finds that the agency was entitled to

apply its regulation and allow date of invoice to constitute date

of sale.

II. Duty Drawback

A. Facts

Saha Thai claimed a duty drawback adjustment to export price

in its initial and supplemental questionnaire responses,

identifying its participation in a cash-based and a guarantee-

7
The Department identified a quantity change of [ ]%,
whereas, as discussed above, the contract permitted a variance of
only [ ]% from the quantities ordered. See Date of Sale Memo,
at 3, Pl.’s App., at 54.

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based duty drawback program in Thailand. See Section C

Questionnaire Response, at C-33, Saha Thai App., Tab B, at C-33;

Supplemental Questionnaire Response (Sept. 23, 1998), at 27-28,

Saha Thai App., Tab C, at 27-28. Respondent calculated the

drawback adjustment to which it claimed it was entitled by

dividing the total amount of drawback received for each invoice

by the number of tons exported. See Section C Questionnaire

Response, at C-33, Saha Thai App., Tab B, at C-33; Supplemental

Questionnaire Response (Sept. 23, 1998), at 28, Saha Thai App.,

Tab C, at 28. Supporting documentation submitted with the

original and supplemental questionnaire responses, including

import reports and export reports, identified the quantities of

inputs imported, duties paid thereon or exempted therefrom,

quantities of subject merchandise subsequently exported, and

total drawback amounts granted by the Thai Government. See

Section C Questionnaire Response, at Exh. C-3, Saha Thai App.,

Tab B-3; Supplemental Questionnaire Response (Sept. 23, 1998), at

Exh. SR2-23, Saha Thai App., Tab C-23.

At verification, reviewing import documentation related to

Saha Thai’s duty drawback claims, the Department identified

certain discrepancies between amounts claimed for cash drawback

and what was reported in the documentation presented. See

Verification Report, at 15, Saha Thai App., Tab E, at 15.

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Commerce also asked respondent at verification to provide

evidence of duties having been paid with regard to one particular

purchase of imported inputs, but Saha Thai offered multiple,

inconsistent responses during the course of verification. See

Duty Drawback Memo (Aug. 11, 1999), at 2-3, C.R. Doc. 35, Def.’s

App., Exh. 3, at 2-3.

In light of these difficulties at verification, Commerce

denied the duty drawback adjustment in the preliminary results.

See Certain Welded Carbon Steel Pipes and Tubes from Thailand, 64

Fed. Reg. 17,998, 18,000 (Dep’t Comm. 1999) (prelim. determ.).

Before publication of the final determination, Commerce reviewed

the additional documentation submitted by Saha Thai during

verification and with respondent’s case brief to the Department.

After this review, and in light of the agency’s familiarity from

previous reviews with respondent’s duty drawback adjustments and

the Thai duty drawback system in general, the Department granted

Saha Thai’s request for a duty drawback adjustment. See Final

Results, 64 Fed. Reg. at 57,761-63. Because of the

inconsistencies discovered during verification, however, Commerce

did not accept the drawback amount calculated by Saha Thai;

rather, the agency relied upon facts otherwise available in

calculating the precise amount of the duty drawback adjustment.

See id. The result of the Department’s application of facts

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available granted Saha Thai a larger duty drawback adjustment

than that derived from respondent’s proffered (and rejected)

data. See Def.’s Supp. Br. at 18.

B. Analysis

A respondent seeking a duty drawback adjustment may base its

claim on a foreign government program that either provides

respondent with a rebate for import duties, or grants to

respondent an exemption from import duties, for imported

merchandise that is subsequently exported. 19 U.S.C. §

1677a(c)(1)(B). In order to determine whether respondent is

entitled to a duty drawback adjustment, Commerce has employed a

two-prong test:

(1) Are the rebate and import duties dependent upon

one another, or in the context of an exemption

from import duties, is such an exemption linked to

the exportation of the subject merchandise?

(2) Did respondent establish a sufficient amount of

raw inputs imported to account for the level of

duty drawback received for the exported product?

See Carbon Steel Wire Rope from Mexico, 63 Fed. Reg. 46,753,

46,756 (Dep’t Comm. 1998) (final determ.); Certain Welded Carbon

Standard Steel Pipes and Tubes From India, 62 Fed. Reg. 47,632,

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47,635-36 (Dep’t Comm. 1997) (final determ.). As with all

favorable adjustments to normal value or export price, respondent

bears the burden of establishing both prongs of the test, and

therefore, its entitlement to a duty drawback adjustment. See

Fujitsu Gen. Ltd. v. United States, 88 F.3d 1034, 1040 (Fed. Cir.

1996) (“Commerce has reasonably placed the burden to establish

entitlement to adjustments on [respondent], the party seeking the

adjustment and the party with access to the necessary

information.”); Primary Steel, Inc. v. United States, 17 CIT

1080, 1090, 834 F. Supp. 1374, 1383 (1993) (“The burden of

creating a record from which the ITA could determine whether

[respondent] was entitled to a duty drawback adjustment rested

with [respondent], not Commerce.”).

1. Entitlement to Duty Drawback

Plaintiff initially contests the Department’s grant of a

duty drawback adjustment based on Saha Thai’s reliance on a cash-

based and a bank guarantee-based program of duty drawback.

Plaintiff concedes that the cash-based program satisfies the

first prong of the Department’s test. Plaintiff argues that the

description of the guarantee-based program provided by Saha Thai

in its original questionnaire responses, on the other hand, is

insufficient to satisfy the requirements of the first prong,

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particularly as key supporting documentation was not supplied by

respondent until after verification, in its case brief to the

agency.

Contrary to plaintiff’s suggestion, the Department is not

precluded from accepting and considering respondent’s post-

verification submission of additional detailed information

regarding the requirements for the duty drawback programs at

issue. Plaintiff effectively seeks to transform respondent’s

obligation to “creat[e] an adequate record,” Tianjin Mach. Import

& Export Corp. v. United States, 16 CIT 931, 936, 806 F. Supp.

1008, 1015 (1992), into a limitation on the scope of the record.

Cf. 19 U.S.C. § 1516a(b)(2)(A) (identifying record upon which

judicial review is based as “a copy of all information presented

to or obtained by [the Department] during the course of the

administrative proceeding”). Saha Thai’s submission permitted

the agency and plaintiff sufficient opportunity to respond to and

rebut the information provided, if possible. This opportunity is

particularly available where, as here, the additional information

provided is not of a complex or technical nature, but is simply a

publicly-available statement of the Thai Government’s duty

drawback policy. See Thai Regulations Governing Drawback, Case

Brief of Saha Thai (May 14, 1999), at Attch. 2, P.R. Doc. 89,

Saha Thai App., Tab G-2. Such a statement issued by the foreign

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political organ responsible for the administration of that

country’s duty drawback program is sufficient, by itself, to

sustain the Department’s determination that the first prong of

its duty drawback test had been satisfied. See Huffy Corp. v.

United States, 10 CIT 214, 218-19, 632 F. Supp. 50, 54-55 (1986).

Plaintiff next contests the compliance of the cash-based and

guarantee-based programs with the second prong of the

Department’s duty drawback test. Plaintiff claims that

respondent provided insufficient evidence to substantiate the

quantification of its duty adjustments. In Exhibit C-3, attached

to Saha Thai’s Section C Questionnaire Response, respondent

provided an import report detailing the importation of certain

inputs used in the manufacture of the subject merchandise at

issue, particularly the amount of import duties paid. See

Section C Questionnaire Response, at Exh. C-3, Saha Thai App.,

Tab B-3; Supplemental Questionnaire Response (Sept. 23, 1998), at

Exh. SR2-23, Saha Thai App., Tab C-23.8 The same exhibit

included an export report that identified duty drawback amounts,

labeled according to whether the drawback was in the form of a

8
At the Department’s request, plaintiff re-submitted
with its September 23, 1998 Supplemental Questionnaire Response,
a more legible copy of the documents that had been provided in
Exhibit C-3 to the August 3, 1998 Section C Questionnaire
Response. See Supplemental Questionnaire Response (Sept. 23,
1998), at 27, Saha Thai App., Tab C, at 27.

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cash rebate (noted by a “C”) or a guarantee (noted by a “G”).

See id. The export report revealed a total amount in duty

drawback equal to the amount of import duties specified in the

import report. See id. Import and export reports provided by

respondent as verification exhibits are similarly reconciled,

establishing that the imported raw inputs give rise to sufficient

import duties to equal the documented duty drawback amounts.9

See Verification Exh. 9, in Pl.’s App., at 65, 69-70, 73. The

cash- and guarantee-based drawback programs thus satisfy both

prongs of the Department’s duty drawback test and entitle Saha

Thai to the corresponding adjustment in export price.

2. Amount of Duty Drawback: Facts Available

9
Plaintiff also argues that Saha Thai’s occasional
failure to meet the requirements of the cash-based program
warrants a presumptive finding that Saha Thai similarly fails
occasionally to meet the requirements of the guarantee-based
program. In the absence of data from which the Department could
conclude that Saha Thai always met its bank guarantee
obligations, urges Plaintiff, respondent should be found to have
failed to satisfy the second prong of the Department’s duty
drawback test. Plaintiff is correct to rely on this court’s
caselaw squarely placing on respondent the burden to establish
entitlement to a favorable adjustment. Respondent has satisfied
its initial burdens of production and persuasion here, however,
in light of the above-cited evidence matching the duties paid on
imports of inputs with the duty drawback amounts authorized by
the Thai Government upon export of the subject merchandise.
Given the evidence on record, therefore, the Department could
reject the presumption proposed by plaintiff to evaluate the
guarantee-based program.

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Notwithstanding the fact that both programs satisfied the

Department’s two-prong test, Commerce found insufficient data or

inaccuracies in the record that mandated the application of facts

otherwise available pursuant to 19 U.S.C. § 1677e(a)(2)(D).

Regarding the bank guarantee drawback claim, Saha Thai failed to

account for the fees the company must have paid to the bank in

return for assuming the risk of guaranteeing Saha Thai’s import

duties. See Duty Drawback Memo, at 4, Def.’s App., Exh. 3, at 4.

Facts available were employed in determining the appropriate

adjustment under the cash-based program because certain

statements and representations made by Saha Thai employees

undercut the otherwise straightforward supporting documentation

placed on the record by respondent. See id. at 2-4, Def.’s App.,

Exh. 3, at 2-4. Even if Saha Thai were entitled to a duty

drawback adjustment, plaintiff argues, the Department erred

because it applied facts otherwise available improperly when

calculating the amount of adjustment for duty drawback.

Because of concerns as to the validity of the actual

drawback amounts provided by Saha Thai, the Department calculated

new drawback amounts using facts available. See id. at 4, Def.’s

App., Exh. 3, at 4. The Department began with figures provided

by Saha Thai that reflected duty drawback amounts per ton

calculated for each of [ ] invoices (i.e., those sales for

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which Saha Thai had claimed duty drawback). A simple average was

then taken of these [ ] numbers to produce an average duty

drawback per ton for the relevant sales. This average functioned

as the modified drawback adjustment to export price, replacing

the duty drawback amounts claimed by Saha Thai. See id. at 4 &

Attachment, Def.’s App., Exh. 3, at 4 & Attachment.

The antidumping statute mandates that the Department rely on

facts otherwise available where, inter alia, a party fails to

provide the agency with requested information in the time,

manner, or form specified. 19 U.S.C. § 1677e(a)(2)(B). “The

statutory directive that Commerce use [facts available] is

intended to serve ‘the basic purpose of the statute – determining

current margins as accurately as possible.’” D & L Supply Co. v.

United States, 113 F.3d 1220, 1223 (Fed. Cir. 1997) (quoting

Rhone Poulenc, Inc. v. United States, 899 F.2d 1185, 1191, reh’g

en banc denied, 1990 U.S. App. LEXIS 7144 (Fed. Cir. 1990)).

Consistent with the antidumping statute’s broader goal of

accuracy in margin calculation, the Department’s selection of

facts available must also “induce respondents to provide Commerce

with requested information in a timely, complete, and accurate

manner . . . .” Nat’l Steel Corp. v. United States, 18 CIT 1126,

1129, 870 F. Supp. 1130, 1134 (1994) (citation omitted). In

seeking the appropriate facts upon which the agency intends to

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rely, Commerce enjoys broad discretion, see Mannesmannrohren-

Werke AG v. United States, 120 F. Supp.2d 1075, 1088-89 (Ct.

Int’l Trade 2000) [“Mannesmann II”], which “is subject to a

rational relationship between data chosen and the matter to which

they are to apply.” Manifattura Emmepi S.p.A. v. United States,

16 CIT 619, 624, 799 F. Supp. 110, 115 (1992).

Although the Department was permitted to conclude, on the

basis of record evidence, that insufficient reliable data existed

to calculate a duty drawback adjustment, the agency’s solution

failed to address the concerns raised by the possibly inaccurate

record data. First, as acknowledged by Commerce, the average

that became the modified drawback adjustment “did not

specifically take into account whether the bank fees were

included in the guarantee-based drawback adjustment claims made

by Saha Thai.” Def.’s Supp. Br. at 16. Second, it is unclear

why the Department selected a simple average of the relevant

shipments rather than a weighted average, which undoubtedly would

have provided a more accurate representation of the drawback

amounts per ton. Commerce is correct that its selection of facts

available is not required to be the “best alternative

information.” SAA, at 869, reprinted in 1994 U.S.C.C.A.N. at

4198. Nevertheless, the agency must provide a reasoned

explanation why it chooses a simple calculation methodology that

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on its face appears less probative than an alternative, equally-

simple methodology.10 Cf. Nat’l Steel, 870 F. Supp. at 1136

(“Commerce’s actions may become unreasonable in nature if ‘the

agency . . . [has] . . . reject[ed] low margin information in

favor of high margin information that was demonstrably less

probative of current conditions.’” (quoting Rhone Poulenc, 899

F.2d at 1190)). Notwithstanding the court’s request for

supplemental briefing, the Department has also failed to explain

how its use of facts available mitigates the two possible

problems raised by reliance on Saha Thai’s information: (1)

excessive drawback adjustment because the claimed drawback

amounts may have improperly included the bank guarantee fees, and

10
In this regard, the facts of this case stand in
contrast to those present in Mannesmann II, where the court
upheld the agency’s facts available methodology. The Department
in the underlying proceeding at issue in Mannesmann II applied
facts available to calculate a more accurate figure for U.S.
duties paid by respondent when respondent was shown to have
underreported the requested data. See 120 F. Supp.2d at 1080-81.
For shipments that had been verified, Commerce took a simple
average of the differences between the respondent’s
(under)reported U.S. duties paid and what was found to have been
the actual U.S. duties paid. See id. at 1088. That average was
added to U.S. duties reported by respondent for sales not
verified by the Department. See id. at 1081. Unlike the case
here, however, the Department in Mannesmann II consciously
decided not to use a weighted average and provided an explanation
for its refusal to do so, and there does not seem to have been an
issue as to the incentive prong of the facts available purpose.
See id. at 1088 (citing Remand Determination at 18). See infra
discussion in text.

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(2) drawback adjustment exceeding the actual amounts rebated (or

exempted from import duties). In the absence of such an

explanation, the Department has failed to establish a “rational

relationship” between the adjustment data it calculated and the

accurate duty drawback amounts that should be added to Saha

Thai’s export price. Manifattura Emmepi, 16 CIT at 624, 799 F.

Supp. at 115. Finally, without rationally explaining how its

selection of facts available will result in a more accurate duty

drawback adjustment, the Department cannot fulfill its

responsibility under the second prong of its duty drawback test

to limit rebate adjustments to the actual amount of charges

rebated (or exempted from import duties). See Far East Mach. Co.

v. United States, 12 CIT 972, 974-75, 699 F. Supp. 309, 312

(1988); Carlisle Tire & Rubber Co. v. United States, 11 CIT 168,

172, 657 F. Supp. 1287, 1290 (1987).

The error in Commerce’s selection of facts available is also

evidenced by the more favorable outcome granted to Saha Thai as a

result of the Department’s facts available analysis than Saha

Thai would have gotten had the Department accepted the company’s

proffered drawback amounts. According to the Department’s own

calculations, the agency’s facts available methodology “increased

the total amount of duty drawback claimed by Saha Thai by [

]%.” Def.’s Supp. Br. at 18. Such a beneficial outcome for a

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respondent, in light of its failure to provide sufficiently

complete and reliable data upon the agency’s request, controverts

the incentives that are intended to be generated by the

Department’s reliance on facts available. See Gourmet Equip.

(Taiwan) Corp. v. United States, No. 99-05-00262, 2000 WL 977369,

at *2 (Ct. Int’l Trade 2000) (“The use of facts available

provides the ‘only incentive to foreign exporters and producers

to respond to Commerce questionnaires’ in antidumping and

countervailing duty proceedings.” (quoting SAA, at 868,

reprinted in 1994 U.S.C.C.A.N. at 4198)). The Department’s facts

available analysis, therefore, is unsupported by substantial

evidence on the record.

Conclusion

Because plaintiff failed to cite to sufficient evidence to

overcome the regulatory presumption favoring invoice date as the

date of sale, the Department’s date of sale determination is

upheld. Commerce also properly recognized Saha Thai’s

entitlement to a duty drawback adjustment, but the Department’s

selection of facts available in calculating the amount of

respondent’s duty drawback adjustment is not supported by

substantial record evidence. This matter is therefore remanded

to Commerce to explain (1) why the Department’s simple average

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calculation should be used instead of a weighted average

calculation, (2) how the simple average calculation adequately

addresses the accuracy concerns raised by the data submitted by

Saha Thai, and (3) how the simple average calculation serves the

dual objectives of the facts available provision to promote

accuracy in margin calculation and to provide respondents with

incentive to report information completely, accurately, and in a

timely manner. Alternatively, the Department may calculate on

remand a new duty drawback adjustment using facts available,

provided that its methodology also responds to the concerns

raised by respondent’s submitted data and is consistent with the

objectives of the facts available provision.

_______________________
Jane A. Restani
Judge

DATED: New York, New York
This 18th day of January, 2001

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