Trade Court OKs Use of AFA Related to Indian Exporter's Submissions Preventing Affiliation Analysis

The Commerce Department properly hit exporter Kumar Industries with a 13.61% adverse facts available dumping rate due to the respondent's "inadequate explanations" regarding one of its partners' ownership interest in two unnamed companies, companies A and B, the Court of International Trade ruled in a Nov. 22 opinion. Judge Timothy Stanceu sustained the rate as part of the first antidumping duty review on glycine from India, finding that Kumar "raised more questions than it answered" in its submissions, preventing Commerce from conducting a proper affiliate analysis.

During the review period, a substantial part of Kumar's home market sales was to Company A, while the exporter bought a substantial amount of its inputs from Company B. Commerce attempted to review whether the exporter was affiliated with the two companies.

Kumar, a partnership, said its partners sold their shares of the unnamed firms before the review period and submitted retirement deeds showing the sales. The court noted that the main issue in the case flows from one partner's income tax return for the 2020-21 Indian tax assessment year, which shows the partner received income from companies A and B as a partner.

While Kumar does not dispute the identified income sourced from companies A and B, the exporter said the amounts were listed in error and consisted of interest on the loans and payment of consideration for the transfer of the shares after the partner sold them.

"Notably, the record lacked the information needed to reconcile the record evidence of the termination of the ownership interests of Partner 2 in Companies A and B with the conflicting information presented by the 'draft computation' Kumar submitted for this partner in response to the third supplemental questionnaire," the opinion said. Stanceu ruled that he need not find whether substantial evidence backed the finding that the partner actually received income from the two unnamed companies but that it is enough that "information Commerce needed to reconcile the conflicting record information was not provided to it despite its inquiries."

(Kumar Industries v. U.S., Slip Op. 23-166, CIT # 21-00622, filed 11/22/23; Judge: Timothy Stanceu; Attorneys: Lizbeth Levinson of Fox Rothschild for plaintiff Kumar Industries; Kelly Geddes for defendant U.S. government)