Koyo Seiko Co. Ltd. v. United States

• Decision Date: 20 July 2001
• Docket Number: No. 00-1500,DEFENDANT-APPELLEE,AND,DEFENDANT-APPELLE,PLAINTIFFS-APPELLANTS,00-1500
• Citation: 258 F.3d 1340
• Parties: (Fed. Cir. 2001) KOYO SEIKO CO., LTD. AND KOYO CORPORATION OF U.S.A.,, v. UNITED STATES,THE TIMKEN COMPANY,
• Court: U.S. Court of Appeals — Federal Circuit

Page 1340

258 F.3d 1340 (Fed. Cir. 2001)

KOYO SEIKO CO., LTD. AND KOYO CORPORATION OF U.S.A., PLAINTIFFS-APPELLANTS, v. UNITED STATES, DEFENDANT-APPELLEE, AND THE TIMKEN COMPANY, DEFENDANT-APPELLEE.

No. 00-1500

United States Court of Appeals for the Federal Circuit

July 20, 2001

Appealed from: U.S. Court of International Trade

Neil R. Ellis, Powell, Goldstein, Frazer & Murphy LLP, of Washington, DC, for plaintiffs-appellants. With him on the briefs were Elizabeth C. Hafner and Lisa A. Crosby. Of counsel was Susan M. Mathews.

Michele D. Lynch, Attorney, Commercial Litigation Branch, Civil Division, Department of Justice, of Washington, DC, for defendant-appellee United States. With her on the brief were David M. Cohen, Director, and Velta A. Melnbrencis, Assistant Director. Of counsel on the brief were John D. McInterney, Acting Chief Counsel, Elizabeth C. Seastrum, Senior Counsel, and John F. Koeppen, Attorney, Office of the Chief Counsel for Import Administration, U.S. Department of Commerce, of Washington, DC.

Terence P. Stewart, Stewart and Stewart, of Washington, DC, for defendant-appellee, The Timken Company. With him on the brief were William A. Fennell and Patrick J. McDonough. Of counsel was David Stanley Johanson.

Before Mayer, Chief Judge, Schall and Dyk, Circuit Judges.

Dyk, Circuit Judge.

Judge Nicholas Tsoucalas

This case presents the question whether the Department of Commerce's ("Commerce") regulation providing for the use of entered value of imported merchandise in the assessment rate formula (19 C.F.R. §§ 351.212(b)(1)) is consistent with the antidumping statute (codified in pertinent part at 19 U.S.C. §§ 1675) and, if so, whether it is reasonable. We conclude that Commerce's interpretation is not foreclosed by the statute, nor have the appellants shown that the interpretation is unreasonable. We accordingly defer to that interpretation under Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S 837 (1984), and we affirm the decision of the Court of International Trade in Koyo Seiko Co., Ltd. v. United States, 110 F. Supp. 2d 934 (Ct. Int'l Trade 2000).

BACKGROUND

This case concerns the determination of antidumping duties for imports of tapered roller bearings with an outside diameter of four inches or less and parts thereof from Japan ("0-4'' TRBs") by Koyo Seiko Co., Ltd., and its sole United States subsidiary, Koyo Corporation of U.S.A. (collectively, "Koyo"). ¹

Under the antidumping statute, Commerce is required to impose antidumping duties on imported merchandise that "is being, or is likely to be, sold in the United States at less than fair value" to the detriment of a domestic industry. 19 U.S.C. §§ 1673. Commerce determines those duties by first calculating the "dumping margin" for the subject merchandise, i.e., the total amount by which the price charged for the subject merchandise in the home market (the "normal value") exceeds the price charged in the United States (the "United States price"). 19 U.S.C. §§ 1677(35)(A). ² The statute obligates Commerce to use the dumping margin as "the basis for the assessment of countervailing or antidumping duties on entries of merchandise covered by the [antidumping] determination and for deposits of estimated duties." 19 U.S.C. §§ 1675(a)(2)(C).

Commerce uses the dumping margin to assess antidumping duties on merchandise imported during the review period, and also to calculate "cash deposits of estimated duties for future entries" of the subject merchandise. Torrington Co. v. United States, 44 F.3d 1572, 1575 (Fed. Cir. 1995). A calculational problem arises, however, in the determination of antidumping duties. Although the "dumping margin" is calculated on "sales" during the review period, the duty is imposed upon "entries," i.e., imports during the review period. Since sales and imports are typically not the same during any particular review period, a method for determining the dumping duty on imports is required. Commerce has adopted two different calculational approaches -one for cash deposits and one for final duties. Commerce requires importers to make cash deposits in an amount based, in pertinent part, on the "estimated weighted average dumping margin" for the merchandise. 19 U.S.C. §§ 1673b(d)(1)(B). Commerce calculates this "estimated weighted average dumping margin," i.e., estimated duty, by "dividing the aggregate dumping margins determined for a specific exporter or producer [here, Koyo] by the aggregate export prices or constructed export prices of such exporter or producer." 19 U.S.C. §§ 1677(35)(B). In other words, the cash deposit rate is calculated "as a percentage of United States [sales] price." Torrington Co., 44 F.3d at 1576. This rate is then applied to estimated imports ("estimated entries").

Commerce has devised a different methodology for use in calculating the final amount of the duties to be imposed on merchandise already imported into the United States. "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 [here, the 0-4'' TRBs] by the entered value of such merchandise for normal Customs purposes." Koyo Seiko Co., 110 F. Supp. 2d at 938. ³ This methodology has been codified in a regulation that states, in pertinent part, that:

[T]he Secretary [of Commerce] normally will calculate an assessment rate for each importer of the subject merchandise covered by the review. The Secretary [of Commerce] normally will calculate the assessment rate by dividing the dumping margin found on the subject merchandise examined by the entered value of such merchandise for normal customs duty purposes. 19 C.F.R. §§ 351.212(b)(1). ⁴

The assessment rate is then applied "uniformly on all entries each importer made during the [period of review.]" 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, 63,875 (Nov. 17, 1998) ("Final Results"). In other words, the assessment rate is calculated "as a percentage of entered value" of the subject merchandise sold in the United States during the review period. Torrington Co., 44 F.3d at 1576. That rate is then applied to the merchandise imported ("actual entries") during that review period.

In simple terms, the formula for cash deposit rates uses sales during the review period as the denominator; the formula for the final duty uses imports as the denominator. Both formulae use sales figures in the numerator. Both apply the formula to imports ("entries"). ⁵

Commerce has recognized that the methodology for calculating the final duty (assessment rate) allows Commerce to collect only a "reasonable approximation" of the duties that would be imposed if it had calculated the specific duties due on particular sales of merchandise imported during the review period. In Tapered Roller Bearings and Parts Thereof, Finished and Unfinished, From the People's Republic of China; Preliminary Results of 1996-1997 Antidumping Duty Administrative Review and New Shipper Review, 63 Fed. Reg. 37,339 (July 10, 1998) ("Tapered Roller Bearings"), for example, Commerce stated in pertinent part that:

While [Commerce] is aware that the entered value of sales during the [review period] is not necessarily equal to the entered value of entries during the [review period], use of entered value of sales as the basis of the assessment rate permits [Commerce] to collect a reasonable approximation of the antidumping duties which would have been determined if [Commerce] had review[ed] those sale of merchandise actually entered during the [review period].

Id. at 37,344.

Commerce's methodology for calculating the assessment rate was applied in the present case. In November 1997, Commerce initiated an antidumping administrative review of the antidumping duties on 0-4'' TRBs covering the period from October 1, 1996, through September 30, 1997. See Initiation of Antidumping and Countervailing Duty Administrative Reviews and Request for Revocation in Part, 62 Fed. Reg. 63,069 (Nov. 26, 1997). ⁶

On July 10, 1998, Commerce issued the preliminary results of its administrative review, assigning to Koyo a 7.62% dumping margin for 0-4'' TRBs for the review period. 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, 37, 348 (July 10, 1998) ("Preliminary Results").

On November 17, 1998, Commerce issued the final results of its administrative review, once again assigning to Koyo a 7.62% dumping margin for 0-4'' TRBs for the review period. Final Results, 63 Fed. Reg. at 63,875. In those Final Results, Commerce stated in pertinent part that:

In accordance with 19 CFR 351.212(b)(1), we will calculate importer-specific ad valorem assessment rates for the merchandise based on the ratio of the total amount of antidumping duties calculated for the examined sales made during the [period of review] to the total customs value of the sales used to calculate those duties [i.e., the entered value]. This rate will be assessed uniformly on all entries each importer made during the [period of review].

Id. at 63,875 (emphasis in original).In other words, Commerce used the entered value of the subject merchandise sold during the period of review as the denominator when calculating an importer-specific assessment rate. The issue on appeal is whether it was proper for Commerce to do so, or whether it was required to use the sales value of merchandise imported during the review period in the denominator, as is done for the cash deposit calculation.

Koyo appealed the assessment...