Carlisle Tire & Rubber Co. v. US

• Decision Date: 16 March 1987
• Docket Number: Court No. 84-07-01058.
• Parties: CARLISLE TIRE & RUBBER CO., DIVISION OF CARLISLE CORP. et al., Plaintiffs, v. The UNITED STATES, Defendant, Dong-Ah Tire Ind. Co., Ltd., Defendant-Intervenor, Heung-Ah Tire Ind. Co., Ltd., Defendant-Intervenor.
• Court: U.S. Court of International Trade

657 F. Supp. 1287

11 CIT 168

CARLISLE TIRE & RUBBER CO., DIVISION OF CARLISLE CORP. et al., Plaintiffs, v. The UNITED STATES, Defendant Dong-Ah Tire Ind. Co., Ltd., Defendant-Intervenor Heung-Ah Tire Ind. Co., Ltd., Defendant-Intervenor.

Court No. 84-07-01058.

United States Court of International Trade.

March 16, 1987.

Frederick L. Ikenson, P.C. (Frederick L. Ikenson and J. Eric Nissley), Washington, D.C., for plaintiffs.

Richard K. Willard, Acting Asst. Atty. Gen., David M. Cohen, Director, Dept. of Justice, Commercial Litigation Branch (Sheila N. Ziff), Washington, D.C., for defendant.

Dow, Lohnes & Albertson (William Silverman, John C. Jost, and Margaret B. Dardess), Washington, D.C., for defendant-intervenor Dong-Ah Tire Ind. Co., Ltd.

Arnold & Porter (Richard A. Johnson and Stephan E. Becker), Washington, D.C., for

defendant-intervenor Heung-Ah Tire Ind. Co., Ltd.

MEMORANDUM OPINION AND ORDER

DiCARLO, Judge:

Plaintiffs, representing domestic producers of tire tubes, brought this action challenging the final negative dumping determination in Tubes For Tires, Other Than Bicycle Tires, From the Republic of Korea, 49 Fed.Reg. 26,780 (1984). The action was remanded to the Department of Commerce, International Trade Administration (Commerce) for recalculations in view of the Court's finding that merchandise adjustments under 19 U.S.C. § 1677b(a)(4) (1982) and drawback adjustments under 19 U.S.C. § 1677a(d)(1)(B) (1982) were made on the basis of inconsistent sets of tire tube weights. Carlisle Tire & Rubber Co. v. United States, 10 CIT ___, 634 F.Supp. 419 (1986). Specifically, the weights used for the merchandise adjustments were determined by randomly weighing sample tubes, while the generally higher weights used to determine drawback adjustments were reportedly taken from Korean packing lists which accompanied shipments of exported tubes. The remand order directed that Commerce either disregard the drawback adjustment entirely, or make both adjustments using a consistent set of weights. The Court previously held that merchandise weights verified by weighing sample tubes were supported by substantial evidence and in accordance with law. See Carlisle Tire & Rubber Co. v. United States, 9 CIT ___, ___, 622 F.Supp. 1071, 1082 (1985).

On remand Commerce chose to retain the drawback adjustments and to use the verified merchandise weights to make both adjustments. Commerce found that the drawback adjustment for Dong-Ah Tire Ind. Co., Ltd. (Dong-Ah) had been calculated using the weights specified on packing lists attached to Dong-Ah's drawback applications. Commerce therefore performed recalculations and reported a slight increase in the dumping margin for Dong-Ah. For Heung-Ah Tire Ind. Co., Ltd. (Heung-Ah), Commerce found that the drawback adjustment had originally been based on the merchandise adjustment weights, and that no recalculations were necessary. Determination of the Tube Weights Used to Calculate Duty Drawback Pursuant to Court Remand (April 29, 1986) (Remand Determination) at 2.

After reviewing Commerce's recalculations for Dong-Ah, the Court found that Commerce had not complied with the remand instructions. The statute authorizes a drawback adjustment in "the amount of any import duties imposed by the country of exportation which have been rebated, ... by reason of the exportation of the merchandise to the United States." 19 U.S.C. § 1677a(d)(1)(B) (1982). The statute does not authorize an adjustment in whatever amount is refunded by the exporting country. However, once Commerce determined the total weight of Dong-Ah's tubes exported to the United States during the investigation period and the total amount of drawback received by Dong-Ah during that time, it calculated actual drawback per kilogram, and allocated total drawback to individual United States sales based on the merchandise adjustment weights. Remand Determination at 15-17. By focusing only on the amount of duties refunded, Commerce made adjustments for drawback in the full amount of drawback received even though refunds by the Korean government were based on the generally higher packing list weights. Had Commerce first verified the amount of duties paid by Dong-Ah on imported raw materials used in the exported tire tubes, as required by the statute, the generally lower merchandise weights should have resulted in a lower total amount of drawback for which adjustments could be made under section 1677a(d)(1)(B) (statutory drawback).

The Court therefore directed that if Commerce were to use the merchandise weights, it should determine duties per kilogram paid by Dong-Ah and make adjustments in that amount if sufficient refunds were made, using total drawback per kilogram as a ceiling. Commerce was instructed that the adjustment for drawback could not exceed the lesser of the amount of duties paid or the amount of duty rebates received by Dong-Ah.

On January 12, 1987, Commerce reported the results of the recalculation for Dong-Ah:

The Department examined Dong-Ah's antidumping duty questionnaire response and determined the amount of duty and import taxes paid on raw materials imported to Korea, including the rubber. Then the amount of duty and import taxes Dong-Ah paid on a per kilogram basis was determined for each of the imported raw materials, including rubber, used by the company to make the tubes under investigation.

The Korean government's estimates for determining duty drawback of the quantities of the various materials used to manufacture a one-kilogram tube were used to calculate the import duty cost for one kilogram of raw material. This was done by multiplying the standard quantity of each imported material as determined by the Korean government by the duty paid per kilogram of the material. Adding these figures together, a total duty cost per kilogram of a manufactured tube was calculated. The cost per kilogram of tube was then multiplied by the actual weight of each tube model, as verified by the Department and used in the merchandise adjustments, to arrive at the total duty cost for each tube model and the drawback amount for the imported raw materials.

The Department then determined the drawback amount for the valves by determining from the record the import duties paid for certain valves. For those valves, it has assigned no drawback amount. The drawback amounts for the imported raw materials and the valve were added together for each specific tube to determine the duty drawback adjustment. This calculation has resulted in a weighted average less-than-fair-value margin of 0.017 percent.

The Court was unable to determine from Commerce's report whether the total duties paid by Dong-Ah on raw materials used to manufacture the exported tubes exceeded the amount of duty rebates received by Dong-Ah. Defendant...