Tosçelik Profil Ve Sac Endüstrisi A. v. United States, Slip Op. 19-166
| Decision Date | 18 December 2019 |
| Docket Number | Slip Op. 19-166,Consol. Court No. 17-00018 |
| Citation | 415 F.Supp.3d 1395 |
| Parties | TOSÇELIK PROFIL VE SAC ENDÜSTRISI A.S., Plaintiff, and Zekelman Industries, Consolidated Plaintiff, v. UNITED STATES, Defendant, and Zekelman Industries, Defendant-Intervenor. |
| Court | U.S. Court of International Trade |
David L. Simon, Law Office of David L. Simon, of Washington, D.C., for Plaintiff Tosçelik Profil ve Sac Endüstrisi A. S.
Elizabeth A. Speck, Senior Trial Counsel, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, D.C., for Defendant United States. With her on the briefs were Joseph H. Hunt, Assistant Attorney General, Jeanne E. Davidson, Director, Franklin E. White, Jr., Assistant Director, and Patricia M. McCarthy, Assistant Director. Of counsel was David W. Richardson, Attorney, Office of the Chief Counsel for Trade Enforcement and Compliance, U.S. Department of Commerce, of Washington, D.C.
Roger B. Schagrin and Paul W. Jameson, Schagrin Associates, of Washington, D.C., for Consolidated Plaintiff and Defendant-Intervenor Zekelman Industries.
This action arises out of the final results of the administrative review of welded carbon steel standard pipe and tube products from Turkey. See Welded Carbon Steel Standard Pipe and Tube Products From Turkey, 81 Fed. Reg. 92,785 (Dep't Commerce Dec. 20, 2016) (final results of administrative review; 2014-2015), as amended, 82 Fed. Reg. 11,002 (Dep't Commerce Feb. 17, 2017) (amended final results of antidumping duty administrative review; 2014-2015). Before the court are the Final Results of Redetermination Pursuant to Second Court Remand, May 30, 2019, ECF No. 67-1 ("Second Remand Results"). For the reasons discussed below, the Second Remand Results are remanded for further proceedings consistent with this opinion.
The court presumes familiarity with the facts and procedural history of this action. See Tosçelik Profil ve Sac Endüstrisi A.S. v. United States, 42 CIT ––––, 321 F. Supp. 3d 1270 (2018) (" Tosçelik I"); Tosçelik Profil ve Sac Endüstrisi A.S. v. United States, 42 CIT ––––, 375 F. Supp. 3d 1312 (2019) (" Tosçelik II"). In Tosçelik I, the court remanded to Commerce for reconsideration of Tosçelik's duty drawback adjustment and the circumstance of sale adjustment as to warehousing expenses. Tosçelik I at 1281.
After the first remand, Commerce recalculated Tosçelik's duty drawback adjustment by allocating import duties exempted by reason of export of finished product over total exports, as reported by Tosçelik. Tosçelik II at 1314. Because Commerce perceived an imbalance in its comparison between Tosçelik's export price and normal value, Commerce made an additional circumstance of sale adjustment. Id. Commerce also granted a circumstance of sale adjustment to Tosçelik for warehousing expenses. Id. at 1316-17. The court concluded that Commerce's modified calculation of Tosçelik's duty drawback adjustment was not in accordance with the law, but sustained Commerce's circumstance of sale adjustment for warehousing expenses. Id. at 1317. The court remanded to Commerce for further proceedings. Id.
In the Second Remand Results, Commerce "amended its duty drawback calculation methodology ... to ensure that [Commerce's] dumping calculation is duty neutral, meaning that the same amount of duties are accounted for on both sides of the dumping equation," by: "(1) making a per-unit adjustment to U.S. price in the full amount of the per-unit duty drawback granted on export, as claimed by Tos[ç]elik; and (2) making a circumstance of sale ... adjustment to [constructed value] and home market price to add the same amount of the per-unit amount of import duties added to U.S. price." Second Remand Results at 1-2.
Tosçelik filed comments on the Second Remand Results, Comments Pl. Tosçelik Profil ve Sac Endüstrisi A.S. Final Results Redetermination Pursuant to Second Remand, Jul. 31, 2019, ECF No. 82 ("Pl.'s Comments"). Zekelman filed comments in opposition. Def.-Intervenors' Comments in Opp'n to the Second Remand Redetermination, Jul. 31, 2019, ECF No. 81. Defendant responded. Def.'s Resp. to Comments on Second Remand Results, Aug. 30, 2019, ECF No. 85 ("Def.'s Reply"). The Parties filed a joint appendix. J.A., Sept. 12, 2019, ECF No. 87. The Parties filed supplemental briefing on December 6, 2019. Def.-Intervenors' Suppl. Br., Dec. 6, 2019, ECF No. 89; Pl.'s Suppl. Br., Dec. 6, 2019, ECF No. 90; Def.'s Suppl. Br., Dec. 6, 2019, ECF No. 91.
The court has jurisdiction pursuant to 19 U.S.C. § 1516a(a)(2)(B)(iii) and 28 U.S.C. § 1581(c). The court shall hold unlawful any determination, finding, or conclusion found to be unsupported by substantial evidence on the record, or otherwise not in accordance with the law. 19 U.S.C. § 1516a(b)(1)(B)(i). The results of a redetermination pursuant to court remand are reviewed also for compliance with the court's remand order. See ABB Inc. v. United States, 42 CIT ––––, ––––, 355 F. Supp. 3d 1206, 1210 (2018).
If Commerce finds that merchandise is being sold at less than fair value, Commerce issues an antidumping duty order imposing antidumping duties equivalent to the amount by which the normal value exceeds the export price for the merchandise. See 19 U.S.C. § 1673 ; see also 19 U.S.C. § 1675. Export price, or U.S. price, is the price at which the subject merchandise is first sold in the United States. See id. § 1677a(a). A duty drawback adjustment is an adjustment to export price, specifically, an increase by "the amount of any import duties 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).
Generally, normal value represents the price at which the subject merchandise is sold in the exporting country. See id. § 1677b(a)(1)(A). When determining the appropriate price for comparison, Commerce may make certain price adjustments, such as a circumstance of sale adjustment. See id. § 1677b(a)(6). Under the statute, the price may be:
Id. § 1677b(a)(6)(C)(iii). The purpose of statutory adjustments to normal value is to "ensure[ ] that there is no overlap or double-counting of adjustments." H.R. Rep. No. 103-826, pt. 1, at 84-85 (1994), reprinted in 1994 U.S.C.C.A.N. 3773, 3857-58.
Pursuant to 19 C.F.R. § 351.410(b), "the Secretary will make circumstances of sale adjustments under section 773(a)(6)(C)(iii) of the Act [ 19 U.S.C. § 1677b(a)(6)(C)(iii) ] only for direct selling expenses and assumed expenses." 19 C.F.R. § 351.410(b). Direct selling expenses are "expenses, such as commissions, credit expenses, guarantees, and warranties, that result from, and bear a direct relationship to, the particular sale in question." Id. § 351.410(c). Assumed expenses are "selling expenses that are assumed by the seller on behalf of the buyer, such as advertising expenses." Id. § 351.410(d).
In the Second Remand Results, Commerce readdressed Tosçelik's request for a duty drawback adjustment pertaining to the Turkish IPR program, which is a duty exemption program. Second Remand Results at 16. Commerce explained that "since Tos[ç]elik never actually paid or recorded any duty costs associated with the [Turkish] IPR exemption program, there is no duty in [the] constructed value or home market price associated with this program, and no need to adjust Tos[ç]elik's cost of production," but, "[u]nder the IPR exemption program[,] ... an off the books liability was generated when inputs were imported under the IPR program and that liability was later reversed upon exportation of subject merchandise to the United States and other markets." Id. at 16-17 (internal quotation marks omitted). As a result, Commerce made "a per-unit adjustment to U.S. price in the full amount of the per-unit duty drawback granted on export, as claimed by Tos[ç]elik." Id. at 1-2. Tosçelik does not contest this duty drawback adjustment. Pl.'s Cmts. at 22.
Under 19 U.S.C. § 1677a(c)(1)(B), a duty drawback adjustment is an adjustment to export price, i.e., an increase by "the amount of any import duties 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." 19 U.S.C. § 1677a(c)(1)(B). Because Commerce's calculation and explanation of the duty drawback adjustment is in accordance with 19 U.S.C. § 1677a(c)(1)(B), the court concludes that Commerce's duty drawback adjustment to U.S. price is in accordance with the law.
On remand, Commerce made a circumstance of sale adjustment "to add the same per-unit duty amount to home market price and [constructed value] as that [was] granted [to] Tos[ç]elik for the full amount of duties that were drawn back or forgiven by virtue of the export of the merchandise to the United States under the IPR exemption program." Second Remand Results at 17. On remand, Commerce contends that this circumstance of sale adjustment "account[s] for the ... imbalance between the amount of the claimed duty drawback and the absence of any import duty costs included in normal value." Id. at 7. Commerce claims the circumstance of sale adjustment supports a fair comparison between the U.S. price and the constructed value because: (1) "the import duty program and drawback provision impose a different set of accounting and...
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