70 F.Supp.2d 1350 (CIT. 1999), 98-07-02504, Rajinder Pipes Ltd. v. United States

Docket Nº:98-07-02504.
Citation:70 F.Supp.2d 1350
Party Name:RAJINDER PIPES LTD., Plaintiff, v. UNITED STATES, Defendant, and Allied Tube & Conduit Corp., Sawhill Tubular Division of Armco, and Wheatland Tube Co., Defendant-Intervenors.
Case Date:September 17, 1999
Court:Court of International Trade

Page 1350

70 F.Supp.2d 1350 (CIT. 1999)





Allied Tube & Conduit Corp., Sawhill Tubular Division of Armco, and Wheatland Tube Co., Defendant-Intervenors.

No. 98-07-02504.

Slip op. 99-97.

United States Court of International Trade.

Sept. 17, 1999

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Cameron & Hornbostel LLP (Dennis James, Jr.), Washington, D.C., for plaintiff.

David W. Ogden, Acting Assistant Attorney General of the United States; David M. Cohen, Director, Commercial Litigation Branch, Civil Division, United States Department of Justice (Reginald T. Blades, Jr.); Christine Savage, Office of the Chief Counsel for Import Administration, United States Department of Commerce, for defendant, of counsel.

Schagrin Associates (Roger B. Schagrin), Washington, D.C., for defendant-intervenors.


CARMAN, Chief Judge.

Pursuant to U.S. CIT Rule 56.2, plaintiff, Rajinder Pipes Ltd. (Rajinder), moves for judgment on the agency record arguing that the United States Department of Commerce's (Commerce) final determination in Certain Welded Carbon Steel Pipes and Tubes From India, 63 Fed.Reg. 32825 (Dep't Commerce 1998) (final admin. review) (Final Results), as amended by Certain Welded Carbon Steel Pipes and Tubes From India, 63 Fed.Reg. 39269 (Dep't Commerce 1998) (amended final admin. review) ( Amended Results I), as amended again by Certain Welded Carbon Steel Pipes and Tubes From India, 63 Fed.Reg. 66120 (Dep't Commerce 1998) (amended final admin. review) ( Amended Results II), is not supported by substantial evidence on the record, is unreasonable, and is otherwise not in accordance with law.

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Plaintiff does not dispute the corrections of clerical errors effectuated by Amended Results I and Amended Results II. Rather, plaintiff argues Commerce's determination in Final Results was unjustified and unreasonable in finding that Rajinder was unable to provide record evidence required for establishing the first prong of the two-prong test necessary for the grant of a duty drawback adjustment. 1 Rajinder also argues that Commerce was wrong in failing to apply the second prong of the test. Finally, Rajinder contends that Commerce improperly rejected the information submitted by Rajinder in January 1998 to satisfy the two-prong test.

Plaintiff requests that this Court find that Commerce's denial of an upward adjustment to Rajinder's export price for duties not collected was not supported by substantial evidence on the record, was unreasonable, and was otherwise not in accordance with law. Rajinder also requests this Court remand the matter to Commerce with instructions that the duty drawback adjustment be granted.

Defendant and defendant-intervenors, Allied Tube & Conduit Corporation, Sawhill Tubular Division of Armco, and Wheatland Tube Company (Allied), oppose plaintiff's motion, contending Commerce's determination should be sustained. Defendant and Allied argue that denial of drawback adjustment was proper due to Rajinder's failure to satisfy Commerce's test for eligibility. Also, defendant and Allied maintain that Commerce properly rejected Rajinder's submissions in January 1998 as untimely.

This Court has jurisdiction under 28 U.S.C. § 1581(c) (1994), and for reasons set forth below, denies plaintiff's Motion for Judgment Upon An Agency Record and sustains Commerce's determination in the Final Results, as amended by Amended Results I and Amended Results II.


On June 19, 1997, Commerce initiated a review of carbon steel pipes and tubes from India. See Initiation of Antidumping and Countervailing Duty Administrative Reviews, 62 Fed.Reg. 33394 (Dep't Commerce 1997). Rajinder claimed on Commerce's initial questionnaire that it was eligible for an upward adjustment to its export price for import duties not collected on account of its steel and zinc imports to India. Rajinder's claim was based upon 19 U.S.C. § 1677a(c)(1)(B) (1994) which directs Commerce to increase the price used to establish the export price and constructed export price 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."

Commerce sent Rajinder a supplemental questionnaire in which it stated it was unclear how Rajinder had determined the duty drawback amounts and requested a step-by-step description of Rajinder's calculations. Commerce requested Rajinder:

explain and provide supporting evidence (a) demonstrating how the payment of import duties and the receipt of duty drawback are directly linked to and dependent upon one another, and (b) demonstrating that there were sufficient raw materials to account for the duty drawback you received on the final exported products. In addition, please provide a copy of the Advance License to which you subscribed.

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(Rajinder Supplemental Questionnaire, Plaintiff Rajinder Pipes Ltd.'s Appendix to Memorandum of Points and Authorities (PA) at 14.) Rajinder responded by providing a narrative explanation of the method it used to calculate the duty drawback adjustment amount and providing a copy of Rajinder's Advance Licences. 2

The Advance License documents submitted by Rajinder authorize it to import a specific amount of hot rolled carbon steel and zinc duty free, provided a conforming amount of galvanized steel pipes and tubes are exported within twelve months of the date of issue of the advance license. Furthermore, the license requires the material imported "be useable for the types of pipes and tubes exported." (Plaintiff's Motion for Judgment on the Agency Record Pursuant to Rule 56.2(RAJ) at 18.) If Rajinder fails to fulfill its export obligation, it must pay Indian Customs the import duty not collected by reason of the license which is proportionate to the quantity of pipes and tubes not exported under the license. In order to prove that it has met its obligations under the license, Rajinder must submit quarterly reports to Indian Customs that detail the goods imported, manufactured, and exported under the license.

On December 3, 1997, Commerce informed Rajinder it intended to verify Rajinder's factual submissions and forwarded a Verification Outline asking Rajinder to:

[P]rovide source documents demonstrating that the import duty and rebate are directly linked to, and dependent upon, on [sic] another and demonstrating that there were sufficient imported raw materials to account for the drawback received on the exported product.

(Verification Outline, PA at 43-44.) During verification, Commerce reviewed Rajinder's duty drawback calculations and verified the numbers finding no discrepancies. Commerce noted the numbers were subject to change as Indian Customs had not physically verified the quantity of steel coil. Commerce also learned Rajinder did not import any zinc during the period of review but expected a shipment of zinc after verification. Rajinder told Commerce that it would submit additional documentation for duty free imports of steel coil and zinc sometime prior to publication of the results of Commerce's preliminary review. In response, Commerce officials stated that the deadline for submitting new information for the record of the administrative review had passed, but Rajinder "should do what they feel is in their best interest and that the Department would make a decision accordingly." (Verification Report, PA at 46.)

On January 14, 1998, Rajinder submitted copies of the import pages from its Duty Exemption Entitlement Certificate (DEEC) book. 3 Rajinder claimed the

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pages demonstrated Rajinder imported zinc and steel coil. On January 26, 1998, Rajinder submitted additional documents related to the import of zinc.

In response to Rajinder's submissions, Commerce sent letters dated January 14 and 15, 1998 to Rajinder stating that, at verification, Commerce had expressly indicated that the deadline for the submission of new materials passed on December 16, 1997. Because Rajinder submitted new information after that date, Commerce rejected the information as untimely.

On February 9, 1998, Commerce issued the preliminary results of its administrative review, see Certain Welded Carbon Steel Standard Pipes and Tubes From India, 63 Fed.Reg. 6531 (Dep't Commerce 1998) (preliminary admin. review), denying Rajinder's duty drawback adjustment. Commerce explained in its Preliminary Results Memorandum that it denied Rajinder's claim because Rajinder failed to satisfy Commerce's two-prong test. Regarding the first prong, Rajinder failed to provide "record evidence" of the link between rebate and import duty. (Preliminary Results Memorandum (Memorandum), PA at 63 (emphasis omitted).) Regarding the second prong, Rajinder's attempt to supplement the record with January 1998 submissions was rejected as untimely. In June 1998, Commerce released the final results of its administrative review, denying Rajinder's arguments and stating Rajinder failed the test for duty drawback adjustments because it "did not establish a direct link between the import duty and the drawback Rajinder claimed it received." Final Results, 63 Fed.Reg. at 32829. On...

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