US Defends Decision to Not Grant CEP Offset to Indian Exporter in AD Suit

The U.S. on Nov. 1 defended the Commerce Department's decision on remand to not grant exporter Gujarat Fluorochemicals a constructed export price offset in the antidumping duty investigation on granular polytetrafluorethylene resin from India. The government said Gujarat failed to provide a quantitative analysis that would justify the offset (Daikin America v. United States, CIT # 22-00122).

The Court of International Trade in March sent back the decision to grant the offset in the investigation, which was only granted in the first place since Commerce said Gujarat didn't have a chance to remedy deficiencies in the exporter's initial submission (see 2403190037). The offset was preliminarily granted on the grounds that the normal value level of trade was at a "more advanced stage of distribution" than the level of trade for the constructed export price.

On remand, the agency dropped the offset after finding that Gujarat didn't show how indirect selling expenses vary by the different claimed levels of trade, as required by Commerce's questionnaire (see 2407120016).

Gujarat argued in response that an offset is warranted since there are "clear and substantial differences" in the selling activities between the home and the U.S. markets. Commerce said this was "irrelevant," since the agency must make its decision "on the record before it." The record shows that Gujarat "failed to provide a quantitative analysis based on verifiable financial data and documentation, e.g., selling expense information, account records, etc., to support the claimed levels of intensity for the selling activities reported in its selling functions chart," the brief said.

The exporter added that Commerce never requested additional information regarding the company's quantitative analysis, nor did it define the information expected in response to its request. The U.S. said in response that the "record belies" these claims, since Gujarat's response to both the initial and supplemental Section A questionnaires "only went to a qualitative analysis" and didn't provide "verifiable financial data and documentation."

If the exporter needed clarification, it was its responsibility to ask for it, the government said.

The U.S. also defended Commerce's decision made on remand to rely on Gujarat's allocated movement expenses, given its finding that it wasn't feasible for Gujarat to report transaction-specific movement expenses. The trade court questioned the basis for Gujarat's claim that it wasn't feasible to use transaction-specific expenses in light of claims from petitioner Daikin America, which said that Gujarat routinely associated product batch numbers with specific shipments.

The government said Commerce properly stuck with Gujarat's reported expenses, arguing that there's no indication on the record "of how the batch numbers are associated with specific shipments or sales of merchandise." While Daikin says batch numbers were linked with specific sales and shipments, "Commerce’s clear concern was with how batch numbers are associated with specific shipments or sales."

The U.S. added that, on remand, "Commerce considered the Export Customer Complaint Register, shipping and sales documents, and other documents from the sales and shipment chain, which the Court held Commerce had not considered in its final determination." The agency properly concluded that while certain documents have product batch numbers, the record doesn't indicate that the numbers are "tracked and recorded" by Gujarat "in the ordinary course of business such that it was feasible" for the company to report its expenses on a transaction-specific basis.