Koyo Seiko Co., Ltd. v. United States

Slip Op. 00-62

UNITED STATES COURT OF INTERNATIONAL TRADE

BEFORE: SENIOR JUDGE NICHOLAS TSOUCALAS
___________________________________
:
KOYO SEIKO CO., LTD. and KOYO :
CORPORATION of U.S.A., :
:
Plaintiffs, :
:
v. : Court No. 99-01-00001
:
UNITED STATES, :
:
Defendant, :
:
and :
:
THE TIMKEN COMPANY, :
:
Defendant-Intervenor. :
___________________________________:

Plaintiffs, Koyo Seiko Co., Ltd. and Koyo Corporation of
U.S.A. (collectively "Koyo"), move pursuant to USCIT R. 56.2 for
judgment upon the agency record challenging a single aspect of the
Department of Commerce, International Trade Administration's
("Commerce") final determination, entitled Tapered Roller Bearings
and Parts Thereof, Finished and Unfinished, From Japan, and Tapered
Roller Bearings, Four Inches or Less in Outside Diameter, and
Components Thereof, From Japan; Final Results of Antidumping Duty
Administrative Reviews, 63 Fed. Reg. 63,860 (Nov. 17, 1998).

Specifically, Koyo challenges Commerce’s use of entered value
to establish the assessment rate under 19 C.F.R. § 351.212(b)
(1998).

Commerce and defendant-intervenor, The Timken Company, respond
that Commerce’s use of entered value to calculate the assessment
rate under 19 C.F.R. § 351.212(b) was proper and in accordance with
law.

Held: Koyo’s motion is denied.

Dated: June 1, 2000
Court No. 99-01-00001 Page 2

Powell, Goldstein, Frazer & Murphy, LLP (Peter O. Suchman,
Neil R. Ellis and Elizabeth C. Hafner) for plaintiffs.

David W. Ogden, Acting Assistant Attorney General; David M.
Cohen, Director, Commercial Litigation Branch, Civil Division,
United States Department of Justice (Michelle D. Lynch); of
counsel: John F. Koeppen, Office of the Chief Counsel for Import
Administration, United States Department of Commerce, for
defendant.

Stewart and Stewart (Terence P. Stewart, William A. Fennell
and Patrick J. McDonough) for defendant-intervenor.

OPINION

TSOUCALAS, Senior Judge: Plaintiffs, Koyo Seiko Co., Ltd. and

Koyo Corporation of U.S.A. (collectively "Koyo"), move pursuant to

USCIT R. 56.2 for judgment upon the agency record challenging a

single aspect of the Department of Commerce, International Trade

Administration's ("Commerce") final determination, entitled Tapered

Roller Bearings and Parts Thereof, Finished and Unfinished, From

Japan, and Tapered Roller Bearings, Four Inches or Less in Outside

Diameter, and Components Thereof, From Japan; Final Results of

Antidumping Duty Administrative Reviews ("Final Results"), 63 Fed.

Reg. 63,860 (Nov. 17, 1998).

Specifically, Koyo challenges Commerce’s use of entered value

to establish the assessment rate under 19 C.F.R. § 351.212(b)

(1998).
Court No. 99-01-00001 Page 3

Commerce and defendant-intervenor, The Timken Company

(“Timken”), respond that Commerce’s use of entered value to

calculate the assessment rate was proper and in accordance with

law.

BACKGROUND

This case concerns an administrative review of the antidumping

duty order on tapered roller bearings and parts thereof imported

from Japan during the review period of October 1, 1996 through

September 30, 1997.1

Commerce reviewed and published the preliminary results on

July 10, 1998. See Tapered Roller Bearings and Parts Thereof,

Finished and Unfinished, From Japan, and Tapered Roller Bearings,

Four Inches or Less in Outside Diameter, and Components Thereof,

From Japan; Preliminary Results of Antidumping Duty Administrative

Reviews, 63 Fed. Reg. 37,344. On November 17, 1998, Commerce

published the final review at issue here. See Final Results.

1
Since the administrative review at issue was initiated after
December 31, 1994, the applicable law is the antidumping statute as
amended by the Uruguay Round Agreements Act, Pub. L. No. 103-465,
108 Stat. 4809 (1994) (effective January 1, 1995) (“URAA”). See
Torrington Co. v. United States, 68 F.3d 1347, 1352 (Fed. Cir.
1995) (citing URAA § 291(a)(2), (b) (noting effective date of URAA
amendments)).
Court No. 99-01-00001 Page 4

The review arose from two antidumping proceedings: the

antidumping finding regarding tapered roller bearings, four inches

or less in diameter (“0-4" TRBs”), and components thereof, from

Japan, see Tapered Roller Bearings and Certain Components From

Japan, 41 Fed. Reg. 34,974 (Aug. 18, 1976), and the antidumping

duty order on tapered roller bearings (“over-4" TRBs”) and parts

thereof, finished and unfinished, from Japan. See Antidumping Duty

Order; Tapered Roller Bearings and Parts Thereof, Finished and

Unfinished, From Japan, 52 Fed. Reg. 37,352 (Oct. 6, 1987).

Although Commerce’s notice of opportunity to request a review

covered both antidumping proceedings, the antidumping finding

concerning the 0-4" TRBs and the antidumping duty order concerning

over-4" TRBs, Koyo only requested a review of the findings

concerning 0-4" TRBs.

JURISDICTION

This Court has jurisdiction over this matter pursuant to 19

U.S.C. § 1516a(a) (1994) and 28 U.S.C. § 1581(c) (1994).

STANDARD OF REVIEW

This Court will uphold Commerce's final determination in an

administrative review unless it is "unsupported by substantial
Court No. 99-01-00001 Page 5

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

19 U.S.C. § 1516a(b)(1)(B).

I. Substantial Evidence

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); see Timken Co. v. United States, 12 CIT 955, 962, 699 F.

Supp. 300, 306 (1988) ("It is not within the Court's domain either

to weigh the adequate quality or quantity of the evidence for

sufficiency or to reject a finding on grounds of a differing

interpretation of the record.") (citation omitted). Moreover,

"[t]he [C]ourt may not substitute its judgment for that of the

[agency] when the choice is 'between two fairly conflicting views,

even though the [C]ourt would justifiably have made a different

choice had the matter been before it de novo. . . .'" American

Spring Wire Corp. v. United States, 8 CIT 20, 22, 590 F. Supp.

1273, 1276 (1984) (quoting Penntech Papers, Inc. v. NLRB, 706 F.2d
Court No. 99-01-00001 Page 6

18, 22-23 (1st Cir. 1983) (quoting, in turn, Universal Camera, 340

U.S. at 488)).

II. Chevron Two-Step Analysis

In determining whether Commerce's interpretation and

application of the antidumping statute is "in accordance with law,"

the Court applies the two-step analysis prescribed by Chevron

U.S.A. Inc. v. Natural Resources Defense Council, 467 U.S. 837

(1984). Under the first step, the Court reviews Commerce's

construction of a statutory provision to ascertain whether

"Congress has directly spoken to the precise question at issue."

Id. at 842. To determine "whether Congress had an intention on the

precise question at issue, [the Court] employ[s] the 'traditional

tools of statutory construction.'" Timex V.I., Inc. v. United

States, 157 F.3d 879, 882 (Fed. Cir. 1998) (citing Chevron, 467

U.S. at 843 n.9). "The first and foremost 'tool' to be used is the

statute's text, giving it its plain meaning." Id. (explaining that

"a statute's text is Congress's final expression of its intent")

(citing VE Holding Corp. v. Johnson Gas Appliance Co., 917 F.2d

1574, 1579 (Fed. Cir. 1990)). If the statute's plain language

answers the question, "that is the end of the matter." Id. (citing

Muwwakkil v. Office of Personnel Management, 18 F.3d 921, 924 (Fed.

Cir. 1994)). Beyond the statute's text, the tools of statutory

construction "include the statute's structure, canons of statutory
Court No. 99-01-00001 Page 7

construction, and legislative history." Id.; but see Flora Trade

Council v. United States, 41 F. Supp. 2d 319, 323 n.6 (1999)

(noting that "[n]ot all rules of statutory construction rise to the

level of a canon, however.") (citing U.S. Steel Group v. United

States, 22 CIT __, 998 F. Supp. 1151, 1157-58 (1998) (rejecting the

use of the maxim expressio unius est exclusio alterius to discern

Congress's intent under Chevron step one)).

If, after employing the first prong of Chevron, the Court

determines that the statute is silent or ambiguous with respect to

the specific issue, the question for the Court becomes whether

Commerce's construction of the statute is permissible. See

Chevron, 467 U.S. at 843. Essentially, this is an inquiry into the

reasonableness of Commerce's interpretation. See Fujitsu Gen. Ltd.

v. United States, 88 F.3d 1034, 1038 (Fed. Cir. 1996); see also

Matsushita Elec. Indus. Co. v. United States, 750 F.2d 927, 933

(Fed. Cir. 1984). Provided Commerce has acted rationally, the

Court may not substitute its judgment for the agency's. See IPSCO,

Inc. v. United States, 965 F.2d 1056, 1061 (Fed. Cir. 1992); see

also Koyo Seiko Co. v. United States, 36 F.3d 1565, 1570 (Fed. Cir.

1994) (holding that "a court must defer to an agency's reasonable

interpretation of a statute even if the court might have preferred

another."). The "[C]ourt will sustain the determination if it is

reasonable and supported by the record as a whole, including
Court No. 99-01-00001 Page 8

whatever fairly detracts from the substantiality of the evidence."

Negev Phosphates, Ltd. v. United States, 12 CIT 1074, 1077, 699 F.

Supp. 938, 942 (1988). In determining whether Commerce's

interpretation is reasonable, the Court considers the following

non-exclusive list of factors: the express terms of the provisions

at issue, the objectives of those provisions and the objectives of

the antidumping scheme as a whole.

DISCUSSION

I. Calculation of the Antidumping Duty Assessment Rate

A. Background

This case arises from the final results of the antidumping

duty order on tapered roller bearings and parts thereof

manufactured by a foreign manufacturer, Koyo Seiko Co., Ltd., and

imported from Japan by Koyo Corporation of U.S.A. (“KSU”), a

subsidiary of Koyo, which through its sales and distribution

division, Koyo Corporation of U.S.A.-Sales Division, was an

exclusive importer of merchandise produced by Koyo Seiko Co., Ltd.,

during the review period of October 1, 1996 through September 30,

1997. See Final Results, 63 Fed. Reg. at 63,860. In the subject

review, Commerce, following its usual practice in ascertaining cash

deposit rates and assessment rates, stated that “[t]he cash deposit

rate has been determined on the basis of the selling price to the
Court No. 99-01-00001 Page 9

first unaffiliated U.S. customer. For appraisement purposes, where

information is available, [Commerce] will use the entered value of

the merchandise to determine the assessment rate.” Final Results,

63 Fed. Reg. at 63,876.

Any of Commerce’s findings concerning assessment rates and

cash deposit rates is subject to 19 U.S.C. § 1675(a)(1)(B) (1994)

which provides that Commerce shall “review, and determine (in

accordance with paragraph(2)), the amount of any antidumping duty

. . . .” Paragraph two further states that the dumping margin

“shall be the basis for the assessment of . . . antidumping duties

on entries of merchandise . . . .” 19 U.S.C. § 1675(a)(2)(C).

The dumping margin (equal to the amount of antidumping duty

owed) is the amount by which normal value (“NV”) exceeds the export

price (“EP”) or constructed export price (“CEP”) on the subject

merchandise sold during the period of review (“POR”).2 See 19

U.S.C. § 1677(35) (1994).

NV is the comparable price for a product like the imported

merchandise when first sold (generally, to unaffiliated parties)

2
Because Koyo had only constructed export price (“CEP”) sales
during the period of review (“POR”), Koyo’s arguments address only
the calculation of the assessment rate for CEP sales. See Koyo’s
Reply Br. at 2 n.1. However, for the purpose of our analysis, the
outcome would be identical if Koyo had both export price (“EP”) and
CEP or only EP sales during the POR.
Court No. 99-01-00001 Page 10

“for consumption in the exporting country, in the usual commercial

quantities and in the ordinary course of trade and, to the extent

practicable, at the same level of trade as the export price or

constructed export price.” 19 U.S.C. § 1677b(a)(1)(B)(i) (1994).

The export price means the “price at which the subject

merchandise is first sold . . . by the producer or exporter of the

subject merchandise outside of the United States to an unaffiliated

purchaser,” while the constructed export price is the “price at

which the subject merchandise is first sold . . . in the United

States . . . [by] producer or exporter . . . to a purchaser not

affiliated with the producer or exporter . . . .” 19 U.S.C. §

1677a(a),(b) (1994).

Cash deposit is a provisional remedy. When Commerce directs

Customs to suspend liquidation upon a preliminary determination of

dumping, the importer must make a cash deposit of estimated

antidumping duties with Customs or post a bond or other security.

See 19 U.S.C. § 1675(a)(2)(B)(iii); accord General Agreement on

Tariffs and Trade, Oct. 30, 1947, 61 Stat. A-3, 55 U.N.T.S. 187

(“GATT 1947”). Commerce orders the posting of a cash deposit in an

amount equal to the estimated average amount by which the foreign

market value exceeds the United States price, that is, the dumping

margin. 19 U.S.C. § 1673b(d)(1)(B) (1994); see also 19 U.S.C. §

1673e(b) (1994) (applying similar calculation for Commerce’s final
Court No. 99-01-00001 Page 11

determination). Commerce then calculates the cash deposit rate by

dividing “‘the aggregate dumping margins by the aggregated United

States prices.’” See, e.g., National Steel Corp. v. United States,

20 CIT 743, 746, 929 F. Supp. 1577, 1581 (1996) (citing 19 C.F.R.

§ 353.2(f)(2) (1993)); accord 19 U.S.C. § 1677(35)(B) (stating that

“‘weighted average dumping margin’ is the percentage determined by

dividing the aggregate dumping margins . . . by the aggregate

export prices . . . .”). Commerce interprets the term “United

States price” as the sale price after Commerce has made all

adjustments as provided for by law. See National Steel, 20 CIT at

746, 929 F. Supp. at 1581 (citing 19 C.F.R. § 353.41(d)(iii)

(1993)).

When an antidumping duty is imposed upon imported merchandise,

Commerce calculates an assessment rate for each importer by

dividing the dumping margin for the subject merchandise by the

entered value of such merchandise for normal Customs purposes. See

19 C.F.R. § 351.212(b).

In promulgating 19 C.F.R. § 351.212(b), Commerce reasoned as

follows:

[Section] 351.212(b)(1) [deals] with the method that
[Commerce] will use to assess antidumping duties upon
completion of a review. . . . [Commerce] provided that
it normally will calculate an “assessment rate” for each
importer by dividing the absolute dumping margin found .
. . by the entered value . . . . [The rule] merely
Court No. 99-01-00001 Page 12

codified an assessment method that [Commerce] has come to
use more and more frequently in recent years.

Historically, [Commerce] (and, before it, the
Department of Treasury) used the so-called “master list”
(entry-by-entry) assessment method. Under the master
list method, [Commerce] would list the appropriate amount
of duties to assess for each entry of subject merchandise
separately in its instructions to the Customs Services.
However, in recent years, the master list method has
fallen into disuse for two principal reasons. First, in
most cases, respondents have not been able to link
specific entries to specific sales, particularly in CEP
situations in which there is a delay between the
importation of merchandise and its resale to an
unaffiliated customers. Absent an ability to link
entries to sales, [Commerce] cannot apply the master list
method. Second, even when respondents are able to link
entries to sales, there are practical difficulties in
creating and using a master list if the number of entries
covered by a review is large. Preparing a master list
that covers hundreds or thousands of entries is a time-
consuming process, and one that is prone to errors by
[Commerce] and/or Customs Service staff. . . .

Antidumping Duties; Countervailing Duties, 62 Fed. Reg. 27,296,

27,314 (May 19, 1997).

B. Contentions of the Parties

1. Commerce’s Contentions

Commerce contends that the calculation of the assessment

rate pursuant to 19 C.F.R. § 351.212(b) by dividing the dumping

margin by the entered value of the subject merchandise was

reasonable and in accordance with law. See Def.’s Mem. In Opp’n

to Pls.’ Mot. J. Agency R. (“Def.’s Mem.) at 4-7.
Court No. 99-01-00001 Page 13

According to Commerce, the requirement of 19 U.S.C. §

1675(a)(2) that the amount by which NV exceeds CEP (or EP)“be the

basis for the assessment of . . . antidumping duties” is fully

satisfied by the methodology devised in 19 C.F.R. § 351.212(b)

because the first step of the calculation, the computation of the

dumping margin (the numerator) as the difference between NV and

Koyo’s CEP, supplies the statutorily-prescribed basis for the

entire formula set forth in 19 C.F.R. § 351.212(b). Id. at 5-6

(citing Koyo Seiko Co. v. United States, 16 CIT 539, 796 F. Supp.

1526 (1992)). Commerce further asserts that “[t]he purpose of

using entered value in the denominator [in the formula for an

assessment rate] is to allocate the dumping margin among the

importers of the merchandise.” Id. at 4.

2. Koyo’s Contentions

In response, Koyo asserts that Commerce unlawfully calculated

the antidumping duty assessment rate under 19 C.F.R. § 351.212(b)

because Commerce used the entered value for the subject merchandise

as the denominator in the formula. See Pls.’ Mem. Supp. Mot. J.

Agency R. (Pls.’ Mem.) at 6-8; Koyo’s Reply Br. at 2-6. Koyo

alleges that because 19 U.S.C. § 1675(a)(2)(A),(C) requires that

the dumping margin be calculated as the difference between NV and

CEP, and since NV and CEP are both price-based concepts, the logic

of the statute necessitates that the denominator used in the
Court No. 99-01-00001 Page 14

formula must also be a price-based concept, specifically, sales

value. See Koyo’s Reply Br. at 2, 4. Koyo, therefore, concludes

that Commerce’s use of entered value instead of sales value as the

denominator is either unreasonable or in violation of the statutory

language of 19 U.S.C. §§ 1675(a)(1)(B) and 1675(a)(2). Id.

Furthermore, Koyo maintains that because Commerce always uses

sales value as the denominator for calculating cash deposit rates,

Commerce must apply the same calculation method to the assessment

rates. See Pls.’ Mem. at 4. Koyo argues that Commerce’s use of

different denominators for cash deposit rates and assessment rates

creates a distinction between the two that conflicts with the

mandate of 19 U.S.C. § 1675(a)(2). See Koyo’s Reply Br. at 4.

Finally, Koyo notes that Commerce’s use of 19 C.F.R. §

351.212(b) is unreasonable as applied because all of Koyo’s

merchandise for the POR was imported solely by KSU and, therefore,

Commerce’s purpose of using entered value as the denominator in

order to “‘allocate the dumping margin among importers of the

merchandise produced’” has no relevance to Koyo’s situation. Id.

at 3.

Although Koyo concedes that this Court upheld Commerce’s

methodology for calculating the assessment rates in Koyo Seiko Co.

v. United States, 16 CIT 539, 796 F. Supp. 1526 (1992), vacated in
Court No. 99-01-00001 Page 15

part on other grounds, 806 F. Supp. 1008 (1992) (“Koyo 1992”), Koyo

asserts that the issue was not finally resolved by a determination

by the Court of Appeals for the Federal Circuit (“CAFC”). See id.

at 5-6; Pls.’ Mem. at 5.

3. Timken’s Contentions

Contrary to Koyo and in support of Commerce, Timken contends

that the language of 19 U.S.C. §§ 1675(a)(1)(B) and (a)(2) permits

Commerce’s methodology for calculating assessment rates because the

mere fact that the numerator is calculated as the difference

between NV and CEP satisfies the statutory requirement to use the

differential as the basis for the entire formula. See Timken’s

Resp. to Pls.’ Mem. Supp. J. Agency R. (“Timken’s Resp.”) at 4-5.

Timken also points out that, contrary to Koyo’s claim, there is

binding precedent by the CAFC upholding Commerce’s methodology for

purposes of calculating cash deposit rates and assessment rates.

Id. at 6-7 (citing Torrington Co. v. United States, 44 F.3d 1572

(Fed. Cir. 1995)).

C. Analysis

The issue presented by Koyo is whether 19 U.S.C. §§

1675(a)(1)(B) and (a)(2) require Commerce to calculate assessment

rates using sales value, rather than entered value.
Court No. 99-01-00001 Page 16

The Court’s analysis begins with an examination of the

relevant statutory provisions. Section 1675(a)(1)(B) provides that

Commerce shall “review, and determine (in accordance with

paragraph(2)), the amount of any antidumping duty . . . .”

Paragraph two states that the amount by which normal value exceeds

export price (or constructed export price) “shall be the basis for

the assessment of . . . antidumping duties on entries of

merchandise . . . .” 19 U.S.C. §§ 1675(a)(1)(B),(a)(2).

Koyo contends that this language indicates Congress has

directly spoken to the precise question at issue, dictating that

the sales value should be used as the denominator for the purposes

of calculating assessment rates. See Koyo’s Reply Br. at 4.

However, the plain language of the statute does not positively

speak to the question at issue. It merely provides that the

difference between NV and CEP (or EP) “shall be the basis” for the

assessment of duties. 19 U.S.C. § 1675(a)(2). In fact, there is

nothing in 19 U.S.C. §§ 1675(a)(1)(B) or (a)(2) which states that

Commerce is prohibited from using any concepts other than NV and EP

(or CEP) to devise the formula for assessment rates. If Congress

wanted to create a precise formula or exclude all other concepts

from any part of the calculation, it would have said so in clear

and unequivocal terms. See United States v. Int’l Bus. Machs.

Corp., 892 F.2d 1006, 1009 (Fed. Cir. 1989). Congress’ choice to
Court No. 99-01-00001 Page 17

designate just the first step in the calculation indicates that

Congress purposely left the task of devising the formula to

Commerce’s expertise.

Because the language of the statute is not dispositive, we

turn to the legislative history of 19 U.S.C. §§ 1675(a)(1)(B) and

(a)(2) to determine whether Congress has “directly addressed the

precise question at issue.” Chevron, 467 U.S. at 843; Suramerica

de Aleaciones Laminadas, C.A. v. United States, 966 F.2d 660, 667

(Fed. Cir. 1992). The language of 19 U.S.C. § 1675(a)(2) derives

from 19 U.S.C. § 1673(2)(B) (1994), which states that “there shall

be imposed upon . . . merchandise an antidumping duty . . . in an

amount equal to the amount by which the normal value exceeds the

export price (or the constructed export price) for the

merchandise.” Section 1673(2)(B) is, in turn, a result of

Congressional amendment to the antidumping laws by reason of the

URAA. See Sharp Corp. v. United States, 63 F.3d 1092, 1093 (Fed.

Cir. 1995). Although many of the statutory terms have been renamed

under the the URAA (e.g., "export price" replaced "purchase price,"

"constructed export price" replaced "exporters sales price," and

"normal value" replaced "foreign market value"), the substance of

these terms remained the same as it was before the amendments. See

Sharp, 63 F.3d at 1093 n.1. The URAA amendments, in turn, adopted

the standard definition of dumping employed by Article VI of GATT
Court No. 99-01-00001 Page 18

1947. See, e.g., RAJ BHALA, INTERNATIONAL TRADE LAW, CASES AND MATERIALS

649 (1996). Thus, the Congressional choice of language found in 19

U.S.C. §§ 1675(a)(1)(B) and 1675(a)(2) is a result of the evolution

of antidumping law. There is nothing in the history of GATT 1947,

the URAA, or 19 U.S.C. §§ 1675(a)(1)(B) and (a)(2) that indicates

any intent to designate a specific denominator for the assessment

rate formula. Therefore, the Court concludes that neither the

statute nor its legislative history provides an “unambiguously

expressed intent” with regard to the precise question at issue.

Chevron, 467 U.S. at 843.

In situations where Congress has not provided clear guidance

on an issue, the Chevron test requires us to defer to the agency’s

interpretation of its own statute as long as that interpretation is

reasonable. See Chevron, 467 U.S. at 845; Koyo Seiko, 36 F.3d at

1570; IPSCO, 965 F.2d at 1061. Therefore, we are to examine

whether Commerce’s promulgation of 19 C.F.R. § 351.212(b) was

reasonable under the statutory mandate.

Section 1675(a)(2) provides that the dumping margin “shall be

the basis for the assessment . . . of antidumping duties on entries

of the merchandise . . . .” 19 U.S.C. § 1675(a)(2)(C). Koyo

argues that Commerce’s inclusion of the entered value in the

assessment rate formula is unreasonable in view of this language.

See Koyo’s Reply Br. at 2, 4. This Court disagrees. Congress’ use
Court No. 99-01-00001 Page 19

of the term “basis” does not manifest its intent to tie the minuend

and subtrahend of the dumping margin calculation to the denominator

used in the assessment rate formula.

The dictionary definition of “basis” is “the principal

component.” BLACK’S LAW DICTIONARY 151 (6th Ed. 1990). Congress’ use

of the term “basis” implies neither exclusivity of components nor

similarity among them. The statutory language simply means that

the dumping margin should be a principal component of the

calculation and Commerce fully satisfied this requirement. As this

Court has already stated, “Commerce did in fact calculate the

dumping margins as the difference between foreign market value and

the U.S. price, which was therefore the basis for the assessment of

dumping duties” in accord with the requirements of 19 U.S.C. §

1675(a)(2). Koyo 1992, 16 CIT at 541, 796 F. Supp. at 1529.

Commerce’s use of a figure different from NV or EP (or CEP) as the

denominator in the assessment rate formula is not unreasonable

under the statutory mandate.

Koyo maintains that Commerce’s use of the entered value was an

unreasonable choice “[b]ecause [when] the basic building blocks for

the margin calculation [,that is, NV and CEP,] . . . are all based

on price, . . . the only lawful ratio by which to establish the

assessment rates is one in which the denominator is also based on

sales value . . . .” Pls.’ Mem. at 8. In essence, Koyo alleges
Court No. 99-01-00001 Page 20

that among other choices, Commerce’s use of the “entered value”

concept as the denominator was in violation of the logic of the

statute because entered value is entirely divorced from sale.

Koyo’s Reply Br. at 2, 6. This claim is unwarranted.

Traditionally, the entered value of merchandise for normal Customs

purposes is equal to the invoice value of the subject merchandise

less freight, insurance premium costs and other applicable non-

dutiable charges. See Mitsubishi Int’l Corp. v. United States, 78

Cust. Ct. 4, C.D. 4686 (1977); Pistorino & Co. v. United States, 65

Cust. Ct. 387, C.D. 4110 (1970); S. Vollman & Sons v. United

States, 10 Cust. Ct. 532 (1943); Mitsui & Co. v. United States, 7

Cust. Ct. 598 (1941); United States v. Von Hamm Young Co., 1 Cust.

Ct. 597 (1938). The invoice value, in turn, is defined as the

purchase price of the subject merchandise or, “in the case of

merchandise not purchased or consigned for sale, a statement of the

fair retail value in the country of shipment.” 19 C.F.R. §

145.11(b) (1998). Therefore, the entered value of the subject

merchandise is an adjusted purchase price of the merchandise,

clearly a sales-related concept. If Koyo’s desire is to have a

sales-related concept for the denominator, the Court points out

that Commerce’s current methodology already satisfies Koyo’s wish.

Alternatively, Koyo alleges that Commerce’s methodology is

unreasonable as applied in view of the fact that (a) Koyo Seiko
Court No. 99-01-00001 Page 21

Co., Ltd. has only one importer of its merchandise, KSU, its

subsidiary, and (b) Commerce’s argument for using entered value as

the denominator is to “allocate the dumping margin among

[different] importers.” Koyo’s Reply Br. at 3. Koyo asserts that

the assessment rate formula is inapplicable to Koyo’s particular

situation. Id. The statement suffers from multiple flaws.

First, Koyo fails to observe that in addition to its desire to

allocate the dumping margin among importers, Commerce had other

valid motives for adopting entered value as the denominator, for

example, administrative ease, accuracy, promptness and efficiency.

See Antidumping Duties; Countervailing Duties, 62 Fed. Reg. at

27,314-315.

Second, this Court is not aware of any prohibition against

allocating the dumping margin among the merchandise of one

importer.

Third, it would be unreasonable, if not anomalous, for

Commerce to devise an assessment rate formula for importers

enjoying exclusivity with manufacturers different from the formula

applied to all other importers. This approach would allow

manufacturers and importers to manipulate assessment rates by

changing the number of importers. It would also unfairly

disadvantage those importers who, because of contractual
Court No. 99-01-00001 Page 22

obligations, unfavorable fluctuations of market, or because they

are at the initial stages of business development and are faced

with financial constraints, are unable to engage in exclusive

import arrangements. Commerce is not expected to cater to Koyo’s

private circumstances based on Koyo’s preferences in doing

business, its corporate structure or business needs.

Finally, Koyo argues that the methodology for calculating

assessment rate is unreasonable because it differs from that used

for calculating cash deposit rates. See Pls.’ Mem. at 6-8; Koyo’s

Reply Br. at 4. Koyo claims the distinction is not authorized by

19 U.S.C. § 1675 (a)(2)(C). See Koyo’s Reply Br. at 4. Koyo is

incorrect. As Timken correctly points out, the issue was already

resolved by Torrington Co. v. United States, 44 F.3d 1572 (Fed.

Cir. 1995) where the CAFC held that:

Section 1675(a)(2) does not require the same method
of calculation for assessment rates and cash deposit
rates. Nor does it specify a particular [denominator]
when calculating either assessment rates or cash deposit
rates. Rather, the statute merely requires that [the
dumping margin], the difference between foreign market
value and United States price, serve as the basis for
both assessed duties and cash deposits of estimated
duties. . . . [The] use of different methods for
calculating these rates does not conflict with the
statute.

Id. at 1578.

Furthermore, § 1675(a)(1)(B) and (a)(2) do not state that the

assessment rates for each entry of subject merchandise must be
Court No. 99-01-00001 Page 23

identical to cash deposit rates. Had Congress wanted both figures

to be the same, it would have stated so in definite terms rather

than merely provide a basis for these two different calculations.

Commerce’s practice reflects the fact that cash deposits are

nothing but estimates of future dumping liabilities and, because

the Tariff Act merely requires that both the deposit rate and the

assessment rate be derived from the same dumping margin

differential, there could be no certainty that the cash deposit

rate would be equal to the actual assessment. See generally

Certain Hot-Rolled Lead and Bismuth Carbon Steel Products From the

United Kingdom; Final Results of Countervailing Duty Administrative

Review, 60 Fed. Reg. 54,841 (Oct. 26, 1995); Antifriction Bearings

(Other Than Tapered Roller Bearings) and Parts Thereof From France;

et al.; Final Results of Antidumping Duty Administrative Reviews,

57 Fed. Reg. 28,360 (June 24, 1992). A cash deposit rate may

differ from the assessment rate and, if actual duty levels exceed

the cash deposits, Commerce instructs the Customs Service to

collect the difference. See, e.g., Final Results of Antidumping

Duty Administrative Reviews and Revocation in Part of an

Antidumping Duty Order, 58 Fed. Reg. 39,729 (July 26, 1993).

CONCLUSION

In light of the above and the considerable discretion that

Congress afforded Commerce in §§ 1675(a)(1)(B) and (a)(2), the
Court finds Commerce’s methodology reasonable and sustains its

methodology for calculating the assessment rate. See ICC Indus.,

Inc. v. United States, 812 F.2d 694, 699 (Fed. Cir. 1987); Consumer

Prods. Div., SCM Corp. v. Silver Reed America, Inc., 753 F.2d 1033,

1039 (Fed. Cir. 1985).

_____________________________
NICHOLAS TSOUCALAS
SENIOR JUDGE

Dated: June 1, 2000
New York, New York
 Erratum

Slip Opinion 00-62

Koyo Seiko Co., Ltd. v. United States

On page 2, “Michelle D. Lynch” should read as follows: “Michele D. Lynch.”

June 2, 2000
 Errata

Slip Opinion 00-62

Koyo Seiko Co. v. United States, Court No. 99-01-00001

On page 7, line 1, “Flora Trade” should be “Floral Trade.”

On page 17, line 18, “under the the URAA” should be “under
the URAA.”

September 20, 2000