840 F.Supp. 141 (CIT. 1993), 93-01-00053, Chang Tieh Industry Co., Ltd. v. United States

Docket Nº:Court No. 93-01-00053.
Citation:840 F.Supp. 141
Party Name:CHANG TIEH INDUSTRY CO., LTD., Plaintiff and Defendant-Intervenor, Avesta Sheffield, Inc., Bristol Metals, Inc., Damascus Tube Division, Damascus-Bishop Tube Co., Trent Tube Division of Crucible Materials Corporation, and the United Steelworkers of America (AFL-CIO/CLC), Plaintiffs and Defendant-Intervenors, v. The UNITED STATES, Defendant.
Case Date:December 09, 1993
Court:Court of International Trade
 
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Page 141

840 F.Supp. 141 (CIT. 1993)

CHANG TIEH INDUSTRY CO., LTD., Plaintiff and Defendant-Intervenor,

Avesta Sheffield, Inc., Bristol Metals, Inc., Damascus Tube Division, Damascus-Bishop Tube Co., Trent Tube Division of Crucible Materials Corporation, and the United Steelworkers of America (AFL-CIO/CLC), Plaintiffs and Defendant-Intervenors,

v.

The UNITED STATES, Defendant.

Court No. 93-01-00053.

United States Court of International Trade.

Dec. 9, 1993

Page 142

[Copyrighted Material Omitted]

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Grunfeld, Desiderio, Lebowitz & Silverman, David L. Simon and Jeffrey S. Grimson, Washington, DC, for plaintiff and defendant-intervenor Chang Tieh Industry Co., Ltd.

Collier, Shannon, Rill & Scott, David A. Hartquist, Jeffrey S. Beckington and Kathleen W. Cannon, Washington, DC, for plaintiffs and defendant-intervenors Avesta Sheffield, Inc., et al.

Frank W. Hunger, Asst. Atty. Gen., David M. Cohen, Director, Commercial Litigation Branch, Civ. Div., U.S. Dept. of Justice, Cynthia B. Schultz, Marguerite E. Trossevin, Atty. Advisor, Office of the Chief Counsel for Import Admin., U.S. Dept. of Commerce, of counsel, Washington, DC, for defendant.

OPINION

RESTANI, Judge:

In this case, the domestic industry and a foreign manufacturer both challenge an antidumping duty determination by the United States Department of Commerce, International Trade Administration ("ITA"). ITA's determination excluded the foreign manufacturer Chang Tieh Industry Co., Ltd. ("Chang Tieh") from an antidumping order on certain conditions. Certain Welded Stainless Steel Pipes from Taiwan, 57 Fed.Reg. 53,705, 53,709 (Dep't Comm.1992) (final determ. of sales at less than fair value) (requiring Chang Tieh's consent to conditions) (" Final Results "); Certain Welded Stainless Steel Pipe from Taiwan, 57 Fed.Reg. 62,300, 62,301 (Dep't Comm.1992) (amended final determ. & antidumping duty order) (excluding Chang Tieh after having received its consent to conditions) (" Amended Final Results "). Among these conditions was Chang Tieh's acquiescence to the immediate application of the antidumping order if ITA subsequently found that Chang Tieh "has sold or is likely to sell subject merchandise to the United States at less than its foreign market value." Id.

Chang Tieh moves for judgment on the agency record on the ground that the conditional exclusion was an inappropriate exercise of ITA's power. Avesta Sheffield, Inc. ("Avesta"), representing the domestic industry, argues that the court has no jurisdiction over Chang Tieh's challenge of the agency determination. Avesta also moves for judgment on the agency record, contending that data concerning Chang Tieh's sales do not support its exclusion from the antidumping order.

In resolving Avesta's motion, the court will address the following issues: 1) whether Chang Tieh's sales data were unrepresentative or not bona fide and should have been disregarded, 2) whether ITA should have determined that the foreign market value ("FMV") was duty-inclusive before granting a duty drawback, 3) whether ITA should have adjusted either U.S. price or FMV to account for value-added taxes ("VAT"), and 4) whether ITA properly allocated Chang Tieh's labor and overhead costs. ITA's determination will be sustained if it is supported by substantial evidence on the record and is otherwise in accordance with law. 19 U.S.C. § 1516a(b)(1)(B) (1988).

BACKGROUND

On November 18, 1991, Avesta and other representatives of the domestic steel pipe industry ("petitioners") filed with ITA petitions alleging dumping by Chang Tieh and other foreign manufacturers. Certain Welded Stainless Steel Pipes from the Republic of Korea and Taiwan, 56 Fed.Reg. 65,043, 65,043 (Dep't Comm.1991) (init. of antidumping duty investigations). Based on petitioners' submissions, ITA initiated an antidumping duty investigation on December 13, 1991. Id. at 65,044.

The United States International Trade Commission ("ITC") reached an affirmative preliminary determination of injury in January 1992. Certain Welded Stainless Steel

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Pipes from the Republic of Korea and Taiwan, USITC Pub. 2474, Inv. Nos. 731-TA-540 and 541 (Jan. 1992) (prelim. determ.). ITC found a reasonable indication that the domestic industry was materially injured due to imports of Korean and Taiwanese stainless steel pipe, which were allegedly sold at less than fair value ("LTFV"). Id. at 1. ITA subsequently issued an affirmative preliminary determination of LTFV sales, calculating Chang Tieh's dumping margin to be zero. Certain Welded Stainless Steel Pipes from Taiwan, 57 Fed.Reg. 27,735, 27,738 (Dep't Comm.1992) (prelim. determ. of LTFV sales & postponement of final determ.).

On July 1, 1992, petitioners informed ITA of their suspicion that Chang Tieh had sold its merchandise in intentionally small volumes and at artificially inflated prices inconsistent with commercial reality for the purpose of avoiding antidumping duty liability. See Final Results, at 53,706. Petitioners' preverification comments, submitted on July 2, alleged collusion between Chang Tieh and its U.S. importer and compared Chang Tieh's prices to those of other importers in an attempt to show that Chang Tieh had priced its goods above market value. Appendix to Memorandum of Points and Authorities in Support of Motion by Plaintiffs Avesta Sheffield, Inc., et al., for Judgment Upon the Agency Record ("Avesta's Appendix"), Doc. 6, at 2-4. Approximately two weeks later, ITA received a confidential two-page affidavit repeating petitioners' allegations with regard to collusion. Id., Doc. 7, Attachment 1. ITA granted anonymity to petitioners' sources of information on September 2, 1992. Final Results, at 53,706.

Petitioners filed additional affidavits on September 10 and 21 without providing redacted versions. Id. Officials at ITA spoke with the affiants on September 22 in order to confirm their identities and their knowledge of information contained in the affidavits. Avesta's Appendix, Doc. 5, at 1. On September 23, petitioners prepared redacted versions of the affidavits, but refused to serve them on other interested parties. Final Results, at 53,706. ITA made several subsequent requests for public versions that could be released pursuant to the administrative protective order. Id. Public versions were finally submitted on November 3. Id.

Despite the delay in issuing public versions of the additional affidavits, Chang Tieh received notice of petitioners' concerns and a copy of the first affidavit detailing their allegations in July 1992. Avesta's Appendix, Doc. 3, at 4 (certificate of service on Chang Tieh); id., Doc. 7, Attachment 1, at 3 (certificate of service on Chang Tieh). In late September and early October, ITA sent inquiries to Chang Tieh and its U.S. importer, who both provided ITA with arguments and data to rebut the allegations. Final Results, at 53,706; Avesta's Appendix, Docs. 17 & 19.

On November 12, ITA issued a final affirmative determination of LTFV sales, finding a zero dumping margin for Chang Tieh. 1 Final Results, at 53,722. ITA adjusted Chang Tieh's U.S. price upward for duty drawback on raw materials imported into Taiwan and then converted into steel pipe for export. Id. at 53,709-10. Rather than tracing the raw materials from import to export as finished goods, ITA confirmed that the manufacturer had imported sufficient raw materials to make the quantity of goods eventually exported to the United States. Id. at 53,710. ITA...

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