American Alloys, Inc. v. US, Court No. 91-10-00782.

• Decision Date: 11 January 1993
• Docket Number: Court No. 91-10-00782.
• Citation: 17 CIT 8,810 F. Supp. 1294
• Parties: AMERICAN ALLOYS, INC., et al., Plaintiffs, v. UNITED STATES, Defendant.
• Court: U.S. Court of International Trade

810 F. Supp. 1294

17 CIT 8

AMERICAN ALLOYS, INC., et al., Plaintiffs, v. UNITED STATES, Defendant.

Court No. 91-10-00782.

United States Court of International Trade.

January 11, 1993.

Baker & Botts, William D. Kramer, Charles M. Darling, IV, and Anne Talbot, Washington, DC, for plaintiffs.

Stuart M. Gerson, Asst. Atty. Gen., David M. Cohen, Director, Civil Div., Commercial Litigation Branch, U.S. Dept. of Justice, A. David Lafer, Robert E. Nielsen, Attorney-Advisor, Office of the Chief Counsel for Import Admin. U.S. Dept. of Commerce, Washington, DC, of counsel, for defendant.

OPINION AND JUDGMENT

CARMAN, Judge:

Pursuant to Rule 56.1 plaintiffs move for judgment upon the agency record. Plaintiffs challenge a portion of Final Determination of Sales at Less Than Fair Value: Silicon Metal from Argentina, 56 Fed. Reg. 37,891, 37,895 (Aug. 9, 1991), Pub. Doc. 157 (A.R. 2275, 2279), issued by the International Trade Administration, U.S. Department of Commerce (Commerce).

This action is brought pursuant to section 516A(a)(2)(A)(i)(II) of the Tariff Act of 1930, as amended, 19 U.S.C. § 1516a(a)(2)(A)(i)(II) (Supp.1991), and pursuant to 28 U.S.C. § 1581(c) (1988), which give this Court jurisdiction to review any negative part of a final affirmative antidumping duty determination by Commerce. The Court remands Commerce's determination for recalculation of the United States price adjustment and reserves decision on its review of this issue pending Commerce's remand results.

BACKGROUND

United States producers of silicon metal¹ filed a petition with Commerce in August of 1990 requesting that antidumping duties be imposed upon silicon metal imports from Argentina which plaintiffs alleged were being sold at less than fair value. Commerce initiated an investigation, and as a result of that investigation made an affirmative preliminary determination, and subsequently an affirmative final determination, that silicon metal from Argentina was being sold at less than fair value. Notice of Initiation of Investigation: Silicon Metal from Argentina, 55 Fed.Reg. 38,719 (Sept. 20, 1990); Preliminary Determination of Sales at Less Than Fair Value: Silicon Metal From Argentina, 56 Fed.Reg. 13,116, 13,118 (March 29, 1991), Pub.Doc. 117 (A.R. 1819-21); Final Determination, 56 Fed.Reg. 37,891, 37,895 (Aug. 9, 1991), Pub. Doc. 157 (A.R. 2275, 2279).

In the course of its investigation, Commerce presented an Antidumping Request for Information (Questionnaire) and a Deficiency Questionnaire to Electrometalurgica Andina, S.A.I.C. (Andina), an Argentine producer and exporter of silicon metal to the United States. In both its Questionnaire Response and its Deficiency Response, Andina claimed that it was entitled to adjustments to United States Price (U.S.P.), that would increase U.S.P., for certain national and provincial taxes either not collected on export sales or rebated upon exportation. Questionnaire Response, Sec. B at 8-10, Pub.Doc. 59 (A.R. 1004-06); Deficiency Response at 33-37. Pub.Doc. 72 (A.R. 1191-95). These claimed adjustments included a 12.5 percent increase in U.S.P. for a rebate of national taxes received under Argentina's "Reembolso" program. Deficiency Response at 33-37, Pub.Doc. 72 (A.R. 1191-95). Under this program, exporters are eligible for a rebate of certain domestic taxes on physically incorporated inputs of a product. Questionnaire Response, Sec. C at 8, Pub. Doc. 59 (A.R. 1018); Deficiency Response at 34, Pub.Doc. 72 (A.R. 1192). An exporter is eligible to receive a rebate of 12.5 percent of the net value of the exported silicon metal. Deficiency Response, Pub. Doc. 72 (A.R. 1192).

Andina listed the internal taxes imposed on silicon metal in the home market that it claimed provided the basis for the requested 12.5 percent adjustment under the Reembolso program. Deficiency Response, Attach. 10, Pub.Doc. 72 (A.R. 1268-70). The taxes which were listed and that are now at issue are the following:²

1. Bank Debits 2. Value Added 3. Mining License 4. Export Promotion Fund 5. Customs Dispatch 6. Letter of Credit 7. Currency Exchange Tax 8. Municipal Tax 9. Energy Purchases 10. Tax on Tires 11. Insurance 12. Truck Engines 13. Fuels 14. Lubricants 15. Retirement Fund 16. Public Works Fund 17. Social Assistance 18. Family Subsidies 19. National Housing Fund 20. Capital 21. Assets 22. Contribucion Solidarra 23. Provincial Real Estate 24. Municipal Real Estate

Commerce preliminarily determined that silicon metal from Argentina was being sold at less than fair value. Preliminary Determination, 56 Fed.Reg. 13,116, 13,118 (March 29, 1991), Pub.Doc. 117 (A.R. 1819-21). Commerce increased U.S.P. for the 12.5 percent Reembolso tax rebate, thus reducing the dumping margin on Andina's U.S. export sales. Id. Commerce did not conduct a tax pass through analysis on the Reembolso taxes which formed the basis of this adjustment. After all adjustments were made, including adjustments not presently at issue,³ Commerce preliminarily determined the less than fair value margin to be 2.16 percent ad valorem. Id.

Subsequent to Commerce's Preliminary Determination, petitioners reiterated their argument that the taxes did not qualify as a basis for adjustment to U.S.P., and asked Commerce to verify that the Reembolso rebate covered taxes for which an adjustment to U.S.P. was made was proper. April 5, 1991 Verification Comments, Pub. Doc. 126 (A.R. 1841-44). In its Final Determination, Commerce retained the 12.5 percent adjustment to U.S.P. for the Reembolso program tax rebate and recalculated the dumping margin to be 8.65 percent ad valorem. 56 Fed.Reg. at 37,894-95, 37,899, Pub.Doc. 157 (A.R. 2278-79, 2283); Antidumping Duty Order: Silicon Metal from Argentina, 56 Fed.Reg. 48,779 (Sept. 26, 1991).

CONTENTIONS OF THE PARTIES

Plaintiffs argue that under the Tariff Act of 1930, 19 U.S.C. § 1677a(d)(1)(C) (1988), adjustments to U.S.P. for tax rebates are limited to indirect taxes imposed directly on the final stage product or its physically incorporated inputs. Plaintiffs contend that Commerce failed to determine that the rebated taxes claimed by Andina to provide a basis for adjustment to U.S.P. were indirect taxes directly imposed on silicon metal or inputs physically incorporated into silicon metal, and that this failure was contrary to law. Plaintiffs state further that pursuant to 19 U.S.C. § 1677e(b)(1) (1990), Commerce was required to, but failed to, verify that the rebated taxes were imposed on silicon metal or its components, the existence and incidence of the taxes, and the pass-through of the taxes in the home market price of silicon metal. 19 U.S.C. § 1677e(b)(1), provides as follows:

§ 1677e. Verification of Information

. . . . .

(b) Verification

The administering authority shall verify all information relied upon in making —

(1) a final determination in an investigation.

Defendant asserts that plaintiffs are seeking a countervailable subsidy inquiry in the context of an antidumping investigation. Defendant responds to plaintiffs' position by stating that neither the statutory language nor the legislative history of 19 U.S.C. § 1677a(d)(1)(C), requires Commerce to undertake a subsidy inquiry in the context of an independent antidumping investigation. Defendant suggests that plaintiffs seek relief under the countervailing duty statute if they believe that respondent is benefitting from alleged subsidies due to the over-rebate of indirect taxes paid on the exported merchandise or components "physically incorporated" therein.

Additionally, defendant contends that plaintiffs failed to raise the issue of tax pass-through in the underlying administrative proceeding and are thus precluded from raising this issue now. Regardless of whether this issue is now raised, defendant argues that the tax pass-through issue lacks merit because 19 U.S.C. § 1677a(d)(1)(C), does not legally require Commerce to measure the incidence of indirect taxes that are passed through to respondent's home market customers.

STANDARD OF REVIEW

This Court's jurisdiction to review the final results of an antidumping duty administrative review is limited to determining whether the final results are supported by substantial evidence on the administrative record and are otherwise in accordance with the law. 28 U.S.C. § 1581(c) (1988); 19 U.S.C. § 1516a(b)(1)(B) (1988). "Substantial evidence is something more than a `mere scintilla,' and must be enough reasonably to support a conclusion." Ceramica Regiomontana, S.A. v. United States, 10 CIT 399, 405, 636 F.Supp. 961, 966 (1986), aff'd, 5 Fed.Cir. (T) 77, 810 F.2d 1137 (1987) (citations omitted).

DISCUSSION

"The antidumping law is designed to protect domestic industries from sales of foreign merchandise at less than fair value which cause or threaten to cause material injury." Atcor, Inc. v. United States, 11 CIT 148, 152, 658 F.Supp. 295, 298 (1987). "To achieve this objective, the law requires the imposition of an antidumping duty in the amount by which foreign market value (FMV) exceeds USP." Id. To prevent dumping margins from arising due to the fact that the country of exportation assesses certain taxes on home market sales but not on export sales, the antidumping law provides for an offsetting adjustment in the calculation of United States price. The applicable statute, 19 U.S.C. § 1677a(d)(1)(C) (1988), provides:

(d) Adjustments to purchase price and exporter's sales price. — The purchase price and the exporter's sales price shall be adjusted by being —

(1) increased by —

. . . . .

(C) the amount of any taxes imposed in the country of exportation directly upon the exported merchandise or components thereof, which have been rebated, or which have not been collected, by reason of the exportation of the merchandise to the United States, but only to the extent that such taxes are added to or included in the price of such or similar merchandise when sold in the country of exportation.

Commerce argues that...