Hebei Metals & Minerals Import & Export Corp., Slip Op. 05-32.

Decision Date10 March 2005
Docket NumberCourt No. 03-00442.,Slip Op. 05-32.
Citation366 F.Supp.2d 1264
PartiesHEBEI METALS & MINERALS IMPORT & EXPORT CORPORATION and Hebei Wuxin Metals & Minerals Trading Co., Ltd., Plaintiff, v. UNITED STATES, Defendant.
CourtU.S. Court of International Trade

Grunfeld, Desiderio, Lebowitz, Silverman & Klestadt LLP, (Bruce M. Mitchell, Mark E. Pardo, and Paul Figueroa), New York City, for plaintiff.

Peter D. Keisler, Assistant Attorney General, David M. Cohen, Director, Patricia M. McCarthy, Assistant Director, Commercial Litigation Branch, Civil Division, United States Department of Justice (David S. Silverbrand), Ada Bosque, Office of the Chief Counsel for Import Administration, United States Department of Commerce, for defendant, of counsel.

OPINION

RESTANI, Chief Judge.

In Hebei Metals & Minerals Imp. & Exp. Corp. v. United States, No. 03-00442, Slip Op. 04-88, 2004 WL 1615597 (CIT July 19, 2004) [hereinafter Hebei Metals I], the court remanded to the United States Department of Commerce two issues pertaining to its calculation of the antidumping duty margin for lawn and garden steel fence posts from the People's Republic of China ("PRC"), a country designated by Commerce as having non-market economy ("NME").1 Each issue involved the use of surrogate data from India because 19 U.S.C. § 1677b(c)(1)(B) (2000) requires that an antidumping duty on a product from a NME country be calculated using surrogate values from an appropriate market economy country or countries.

First, with regard to Commerce's use of Indian import data for surrogate coal value, Hebei Metals I instructed Commerce either to "provide further explanation based on record evidence" that the Indian import data was more accurate than the available Indian domestic data or to "conduct further investigations to determine whether Indian import or domestic data provides a value that more accurately reflects the coal consumption patterns of producers in the relevant industry." Hebei Metals I, 2004 WL 1615597 at *7-9. Second, with regard to the removal of internal consumption from the denominators but not the numerators of the surrogate financial ratios, the court issued a series of instructions that essentially required Commerce to explain its decision on the basis of record evidence or to adopt an alternative method for surrogate ratio calculations based on record evidence. Id. at 2004 WL 1615597, *17-18.

Now before the court is Commerce's remand determination, Final Results of Redetermination Pursuant to Remand, Hebei Metals & Minerals Imp. & Exp. Corp. and Hebei Wuxin Metals & Minerals Trading Co., Ltd. v. United States (Dep't Commerce Oct. 20, 2004) [hereinafter Remand Determination]. In the Remand Determination, Commerce discussed these two issues at greater length and redetermined that the surrogate coal value and the surrogate financial ratios had been calculated properly in the Final Determination.2 The explanations as to the calculation of the surrogate financial ratios are adequate. The Remand Determination, however, falls short of the requirements imposed on Commerce by statute as interpreted by the federal courts and articulated in Hebei Metals I with respect to the surrogate coal value. Accordingly, the court must remand again.

JURISDICTION AND STANDARD OF REVIEW

The court has jurisdiction over this case pursuant to 28 U.S.C. § 1581(c) (2000) and 19 U.S.C. § 1516a(a)(2)(B)(i). Commerce's antidumping duty calculation shall be sustained if it is supported by substantial evidence and is otherwise in accordance with law. See 19 U.S.C. § 1516a(b)(1)(B).

BACKGROUND
I. COMMERCE'S USE OF INDIAN IMPORT DATA FOR THE SURROGATE COAL VALUE
A. Commerce's Investigation and Determination

Coal is used in the production of the subject fence posts to generate heat that aids in the drying of coating materials. Decision Mem., at cmt. 4, Pls.' App., Ex. 2, at 11. Commerce's questionnaire asked Plaintiffs Hebei Metals & Minerals Import & Export Corporation and Hebei Wuxin Metals & Minerals Trading Co., Ltd. (referred to collectively hereinafter as "Hebei") to "[r]eport the energy used to produce one unit of the subject merchandise. If you used a fuel to generate electricity, please report the fuel actually used." Letter from Commerce to Grunfeld, Desiderio (July 15, 2002), attachment at sec. D, sixth page, P.R. Doc. 16 [hereinafter Questionnaire]. Hebei responded as follows:

The ... factory has reported the consumption of coal consumed, including the coal used by its subcontractor, in metric tons required to produce one metric ton of Fence Posts.... Coal usage was determined by allocating the coal consumed from the monthly workshop record for coal consumption to the products produced in the factory based on their respective weight.

Letter from Grunfeld, Desiderio (Sept. 11, 2002), at Part B, p. 15, P.R. Doc. 88 [hereinafter Questionnaire Response]. Shortly thereafter, Hebei submitted publicly available surrogate coal data but did not state that it used a particular category and grade of coal. In the main text of the Hebei First Surrogate Data Submission, the brief discussion of coal refers initially to "steam coal" and then to "non-coking steam coal:"

Steam Coal should be valued using data from the Teri Energy Data Directory & Yearbook for 2000/2001. The value is derived from price for non-coking steam coal as of April 20, 2000. These steam coal prices are based on grades for non-coking coal that are determined by coals UHV ("Useful Heat Value"). The UHV is measured by a range of kcal/kg. The average values for non-coking steam coal are as follows:

                GRADE A (UHV over 6200 kcal/kg.) 1109.26 RS/MT
                GRADE B (UHV 5600-6200 kcal/kg.) 1017.89 RS/MT
                GRADE C (UHV 4940-5600 kcal/kg.)  870.42 RS/MT
                GRADE D (UHV 4200-4940 kcal/kg.)  742.95 RS/MT
                

Source documents for these surrogate values have been provided in Exhibit 9. Letter from Grunfeld, Desiderio (Sep. 18, 2002), at 6, P.R. Doc. 67, Def.'s App., Tab 7 [hereinafter Hebei First Surrogate Data Submission]. Exhibit 9 to the Hebei First Surrogate Data Submission provides pages from the Tata Energy Research Institute's Energy Data Directory & Yearbook for 2000/2001, P.R. Doc. 67, Ex. 9, at 44, Def.'s App., Tab 7 [hereinafter "TERI data"]. The TERI domestic statistics submitted by Hebei provide prices for seven grades and three categories of non-coking coal in all Indian states other than Assam, Arunachal Pradesh, Meghalaya, and Nagaland. Id.

In its preliminary determination, Commerce stated only that it valued coal using import prices for an "others" basket of coal corresponding to article code "27011909" as published in the 2001-2002 Monthly Statistics of Foreign Trade of India Volume II: Imports [hereinafter "Indian Import Statistics"]. See Memorandum Regarding Factors of Production Valuation for the Preliminary Results (Dep't Commerce Nov. 27, 2002), at 5 — 6 and Ex. Y, at 113-15, P.R. Doc. 104, Def.'s App., Tab 12 [hereinafter Preliminary FOP Mem.]; Preliminary Determination of Sales at Less Than Fair Value and Postponement of Final Determination: Lawn and Garden Steel Fence Posts from the People's Republic of China, 67 Fed.Reg. 72,141, 72,145 (Dep't Commerce Dec. 4, 2002) [hereinafter Preliminary Determination], amended by Correction: Preliminary Determination of Sales at Less Than Fair Value and Postponement of Final Determination: Lawn and Garden Steel Fence Posts from the People's Republic of China, 68 Fed.Reg. 8,737 (Dep't Commerce Feb. 25, 2003) (correcting the scope of the investigation to correspond with the International Trade Commission's preliminary determination). In the subsequent comment period, Hebei challenged Commerce's use of the Indian import price for imported coal. See Br. from Grunfeld, Desiderio to Commerce (Mar. 13, 2003), at 9 — 11, P.R. Doc. 147.

In the Final Determination, Commerce continued to use the "others" data from the Indian Import Statistics. Decision Mem., at cmt. 4, Pls.' App., Ex. 2. Commerce rejected Hebei's contention that coal should be valued using Indian domestic prices for four grades of "steam coal" as listed among the many prices contained in the TERI data. Commerce supported its choice on the grounds that the Indian Import Statistics data was contemporaneous and "free of taxes and duties," Id., while, in comparison, Hebei failed to supply evidence showing that "steam coal, which is suitable for use in boiler generating steam and most often used for electricity generation, was used in the production process;" and failed to "demonstrate the `useful heat value' (UHV) of the coal used in the production." Id.

B. Hebei Metals I

Hebei Metals I, recognizing the normal practice and conditional presumption in favor of domestic prices, concluded that "Commerce used the Indian import price for the surrogate coal value, but failed to provide substantial evidence demonstrating why imported coal yielded a more accurate surrogate value than domestic coal." 2004 WL 1615597 at *1. Commerce did not explain why an Indian manufacturer would pay for imported coal. The court reached its conclusion in Hebei Metals I despite the deficiencies in the alternative value offered by Hebei. The court instructed that, on remand, "Commerce must either provide further explanation based on record evidence or conduct further investigations to determine whether Indian import or domestic data provides a value that more accurately reflects the coal consumption patterns of producers in the relevant industry." 2004 WL 1615597 at *7-9.

C. The Remand Determination

In the Remand Determination, Commerce again used the "others" coal provision from the Indian Import Statistics. Commerce supported its position on the grounds that: (1) Commerce found the value submitted by Hebei to be "more distorted and less accurate than the coal value in the Indian import statistics which the Department used in the original investigation," Remand Determ. at 10; and (2) the use of import data assures that...

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