Hornos Electricos De Venezuela, S.A. v. U.S., Slip Op. 03-112.

Decision Date29 August 2003
Docket NumberSlip Op. 03-112.,No. Court No. 02-00452.,Court No. 02-00452.
Citation285 F.Supp.2d 1353
PartiesHORNOS ELECTRICOS DE VENEZUELA, S.A. (HEVENSA), Plaintiff, v. UNITED STATES, Defendant, and Eramet Marietta, Inc., Defendant-Intervenor.
CourtU.S. Court of International Trade

Aitken Irvin Berlin & Vrooman, LLP (Bruce Edward Aitken), Washington, DC, for Plaintiff.

Peter D. Keisler, Assistant Attorney General, Civil Division, United States Department of Justice, David M. Cohen, Director, Commercial Litigation Branch, Civil Division, Reginal T. Blades, Jr., Senior Trial Counsel, Marisa Beth Goldstein, Office of the Chief Counsel for Import Administration, United States Department of Commerce, Of Counsel, for Defendant.

Piper Rudnick, LLP (William D. Kramer, Clifford E. Stevens, Jr.), Washington, DC, for Defendant-Intervenor.

OPINION

WALLACH, Judge.

I Introduction

This matter comes before the court on Plaintiff Hornos Electricos de Venezuela S.A.'s ("HEVENSA") Rule 56.2 Motion for Judgment Upon the Agency Record ("HEVENSA's Motion"), in which HEVENSA challenges certain aspects of the final determination of the United States Department of Commerce ("Commerce") in Notice of Final Determination of Sales at Less Than Fair Value; Silicomanganese from Venezuela, 67 Fed.Reg. 15,533 (Apr. 2, 2002) ("Final Determination"). The period of investigation ("POI") covered by the Final Determination was April 1, 2000 through March 31, 2001. Id. at 15,534. For the reasons that follow, HEVENSA's Motion is denied.

II Factual and Procedural Background

On April 6, 2001, Defendant-Intervenor Eramet Marietta, Inc., along with another petitioner, filed a petition with Commerce and the United States International Trade Commission ("ITC") requesting the imposition of antidumping duties on imports of silicomanganese from India, Kazakhstan, and Venezuela. See Notice of Initiation of Antidumping Duty Investigations: Silicomanganese From Kazakhstan, India and Venezuela, 66 Fed.Reg. 22,209 (May 3, 2001). On April 26, 2001, Commerce initiated antidumping investigations of silicomanganese from these countries. Id. On May 21, 2001, the ITC notified Commerce of its preliminary determination that there was a reasonable indication that an industry in the United States was materially injured by reason of imports of silicomanganese from India, Kazakhstan, and Venezuela. See Silicomanganese from India, Kazakhstan, and Venezuela, 66 Fed.Reg. 31,258 (June 11, 2001).

On November 9, 2001, Commerce published its preliminary determination of sales at less than fair value of silicomanganese from Venezuela. See Notice of Preliminary Determination of Sales at Less Than Fair Value; Silicomanganese From Venezuela, 66 Fed.Reg. 56,635 (Nov. 9, 2001) ("Preliminary Determination").

In its Preliminary Determination, Commerce determined, inter alia: (1) not to accept HEVENSA's claim for a duty drawback adjustment; (2) that no level of trade ("LOT") adjustment was warranted because only one LOT existed in HEVENSA's home market; (3) not to allow an adjustment to HEVENSA's cost of production ("COP") for a transformer failure that occurred during the POI; (4) that the date of invoice was the proper date of sale for all of HEVENSA's home market and U.S. sales; and (5) to use average shortterm lending rates calculated by the United States Federal Reserve (the "Federal Reserve") to calculate HEVENSA's home market imputed credit expenses. Id. at 56,636-638; see also Memorandum from Deborah Scott, Analyst, through Robert James, Program Manager, and Michael Heaney, Team Leader, to The File, Analysis of Data Submitted by Hornos Electricos de Venezuela, S.A. (HEVENSA) for the Preliminary Determination of the Antidumping Investigation of Silicomanganese from Venezuela (A-307-820) (Nov. 2, 2001) ("Preliminary Analysis Memo") at 2-8; Nonconfidential Appendix to Brief of Eramet Marietta Inc. in Opposition to HEVENSA's Motion for Judgment Upon the Agency Record ("Eramet Pub.App.") 2. Based on a comparison of HEVENSA's U.S. sales prices ("USP") to normal value ("NV") during the POI, Commerce found that silicomanganese from Venezuela was sold at less than fair value. Preliminary Determination, 66 Fed.Reg. at 56,635.

From November 28, 2001 through December 9, 2001, after publication of the Preliminary Results, Commerce "conducted a verification of the sales and cost questionnaire responses" submitted by HEVENSA and issued a sales verification report. Final Determination, 67 Fed.Reg. at 15,534. In its Final Determination, Commerce's determinations regarding these issues remained essentially unchanged, and the agency calculated a dumping margin for HEVENSA of 24.62 percent. Final Determination, 67 Fed. Reg. at 15,535.

The ITC notified Commerce of its final affirmative injury determination on May 16, 2002. See Silicomanganese from India, Kazakhstan, and Venezuela, 67 Fed. Reg. 35,832 (May 21, 2002). On May 23, 2002, Commerce published the antidumping duty order on silicomanganese from Venezuela. See Notice of Amended Final Determination of Sales at Less Than Fair Value and Antidumping Duty Orders: Silicomanganese From India, Kazakhstan, and Venezuela, 67 Fed.Reg. 36,149 (May 23, 2002).

III Jurisdiction and Standard of Review

Jurisdiction lies pursuant to 28 U.S.C. § 1581(c) (1994). The court must sustain Commerce's determination in an antidumping investigation unless it is "unsupported by substantial evidence on the record, or otherwise not in accordance with law." 19 U.S.C. § 1516a(b)(1)(B)(i) (1999). Substantial evidence is defined as "such relevant evidence as a reasonable mind might accept as adequate to support a conclusion." Consol. Edison Co. v. Labor Bd., 305 U.S. 197, 229, 59 S.Ct. 206, 83 L.Ed. 126 (1938). To be in accordance with law, Commerce's actions must be "reasonable under the terms of the relevant statute." Shakeproof Assembly Components Div. of Ill. Tool Works, Inc. v. United States, 102 F.Supp.2d 486, 489 (CIT 2000). This court must defer to Commerce's reasonable interpretation of the statute. See Koyo Seiko Co. v. United States, 36 F.3d 1565, 1570 (Fed.Cir.1994). This deference is based upon the recognition that "Commerce's special expertise in administering the anti-dumping law entitles its decisions to deference from the courts." Ta Chen Stainless Steel Pipe, Inc. v. United States, 298 F.3d 1330, 1335 (Fed. Cir.2002).

IV Analysis

On appeal, HEVENSA argues that

(a) a duty drawback adjustment should have been allowed; (b) two, rather than one, levels of trade should have been recognized; (c) a cost of production adjustment should have been permitted due to the transformer meltdown as this was the equivalent of a force majeure event; (d) contract date, rather than invoice date, should have been used as a date of sale; and (e) actual home market credit expenses should have been used ....1

HEVENSA's Motion at 3.

A Commerce's Decision to Deny HEVENSA's Claim for an Upward Duty Drawback Adjustment to HEVENSA's Export Prices is Supported by Substantial Evidence and in Accordance with Law

19 U.S.C. § 1677a(c)(1)(B) provides for an upward adjustment to export price for import duties that are "imposed by the country of exportation which have been rebated, or which have not been collected, by reason of the exportation of the subject merchandise to the United States." Id. § 1677a(c)(1)(B) (1999). The purpose of a duty drawback adjustment is to prevent dumping margins from arising because the exporting country rebates import duties and taxes for raw materials used in exported merchandise. Far East Mach. Co. v. United States, 688 F.Supp. 610, 12 CIT 428, 430 (1988). In other words, a duty drawback adjustment takes into account any difference in the prices for home market or normal value and export sales accounted for by the fact that such import duties have been paid on inputs used to produce the merchandise sold in the home market, but have not been paid on inputs used to make the merchandise exported to the United States.

"A respondent seeking a duty drawback adjustment may base its claim on a foreign government program that either provides respondent with a rebate for import duties, or grants to respondent an exemption from import duties, for imported merchandise that is subsequently exported." Allied Tube & Conduit Corp. v. United States, 132 F.Supp.2d 1087, 1093 (CIT 2001). In order to determine whether respondent is entitled to a duty drawback adjustment, Commerce has employed a two-prong test that determines whether: (1) the import duty paid and rebate payment are directly linked to, and dependent upon, one another; and (2) there are sufficient imports of the imported raw materials to account for the duty drawback on the exports of the manufactured product. Federal-Mogul Corp. v. United States, 862 F.Supp. 384, 410 (CIT 1994) (citing U.S. Int'l Trade Admin., U.S. Dep't of Commerce, "Study of Antidumping Adjustments Methodology and Recommendations for Statutory Change" 26 (1985) ("1985 Adjustment Study")). This court has held that to satisfy the first prong of Commerce's duty drawback test, the party claiming the adjustment must establish that "import duties are actually paid and rebated, and there is a sufficient link between the cost to the manufacturer (import duties paid) and the claimed adjustment (rebate granted)." Far East Mach. Co., 699 F.Supp. 309, 12 CIT at 976 (quoting Huffy Corp. v. United States, 632 F.Supp. 50, 53 (CIT 1986)).

Commerce rejected HEVENSA's claim for a duty drawback adjustment based on two grounds. First, Commerce explained that although HEVENSA "described the duty drawback program in which it participated as an `exemption program,' the regulations it provided in its original questionnaire response described a `refund program.'" Preliminary Analysis Memo at 7. Second, Commerce charged that HEVENSA "failed to provide certain documentation requested by the Department." Id. Specifically,...

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