CIT Sends Back Commerce's Decision to Grant CEP Offset in AD Suit
The Court of International Trade in a decision made public March 19 sent back the Commerce Department's decision to grant respondent Gujarat Fluorochemicals a constructed export price offset in the antidumping duty investigation on granular polytetrafluorethylene resin from India, despite finding that the company failed to establish the amount and nature of the offset.
Commerce excused the respondent's failure by saying that Gujarat didn't have a chance to remedy any deficiency in its initial submission. Judge M. Miller Baker said he didn't understand this conclusion since Commerce solicited information from Gujarat in a supplemental questionnaire meant to correct "deficiencies, omissions, and areas where further clarification is needed." In issuing the supplemental questionnaire, Commerce requested documents supporting Gujarat's quantitative analysis used to report the levels of intensity of its selling functions to show how the expenses made at different intensity levels impact price comparability.
The respondent's response to this questionnaire gave it a chance "to remedy the insufficiency" where the relevant statute, 19 U.S.C. 1677m(d), "required any such opportunity," Baker ruled.
Baker added in a footnote that while he's not deciding the question of whether Section 1677m(d) even applies, the judge noted that it's "likely irrelevant here because it must be read in tandem with that provision's second sentence." The second sentence "governs when Commerce may 'disregard all or part of' a respondent's submissions and apply facts otherwise available." Baker said that there aren't facts available for Commerce to use "when a respondent fails to carry its burden of showing eligibility for a constructed export price offset.
"Instead, the agency’s duty is to simply deny the offset."
Baker also sent back Commerce's decision not to use facts otherwise available regarding Gujarat's calculation of shipping expenses. In the investigation, Commerce asked the respondent to report these expenses on a unit-cost basis. Instead, Gujarat submitted aggregated expense totals, which Commerce accepted. Petitioner Daikin America said that Gujarat "was able to routinely associate product batch numbers with specific shipments, such as when dealing with customer complaints."
In response, Commerce said that the record doesn't show how product batch numbers are linked with specific shipments, meaning it wasn't able to find that allocating movement expenses by batch number would lead to a "more transaction-specific cost" than Gujarat's aggregated reporting. Baker ruled that Commerce failed to address record evidence -- "the Export Customer Complaint Register" -- in making this finding, while also dismissing Daikin's claims that the respondent's reporting method "is distortive" without "any substantive analysis."
On remand, the agency must "reconsider whether it was feasible for Gujarat to report its shipping-related costs on a transaction-specific basis," and if Commerce finds that it wasn't feasible, it "must reconsider whether the company’s expenses were calculated on as specific a basis as possible" and "whether its reporting of those expenses does not cause inaccuracies or distortions," the court said.
(Daikin America v. United States, Slip Op. 24-32, CIT # 22-00122, dated 03/14/24; Judge: M. Miller Baker; Attorneys: Roger Schagrin of Schagrin Associates for plaintiff Daikin America; Brian Boynton for defendant U.S. government; Jessica DiPietro of ArentFox Schiff for defendant-intervenor Gujarat Fluorochemicals Limited)