841 F.Supp. 1290 (CIT. 1993), 92-01-00020, Mantex, Inc. v. United States
|Docket Nº:||Court No. 92-01-00020.|
|Citation:||841 F.Supp. 1290|
|Party Name:||MANTEX, INC., et al., Plaintiffs, v. UNITED STATES, Defendant, and Allied Tube & Conduit Corp., Defendant-Intervenor.|
|Case Date:||December 22, 1993|
|Court:||Court of International Trade|
[Copyrighted Material Omitted]
Wilkie Farr & Gallagher, William H. Barringer, Theodore C. Whitehouse, Daniel L. Porter, and Christopher S. Stokes, Washington, DC, for plaintiffs Mantex, Inc. and Tata Iron and Steel Corp.
Frank W. Hunger, Asst. Atty. Gen., of the U.S., David M. Cohen, Director, Commercial Litigation Branch, Civ. Div., U.S. Dept. of Justice, Marc E. Montalbine; Jeffery C. Lowe, Atty., Office of Chief Counsel for Import Admin., U.S. Dept. of Commerce, Washington, DC, of Counsel, for defendant.
Schagrin Associates, Roger B. Schagrin, R. Alan Luberda, and Gail S. Usher, Washington, DC, for defendant-intervenor Allied Tube & Conduit Corp.
Plaintiffs bring this consolidated action pursuant to 19 U.S.C. § 1516a(a)(2)(B)(iii) (1988) to contest the final determination by
the International Trade Administration, Department of Commerce (ITA or Commerce) in the 1987-1988, 1988-1989 administrative reviews of the antidumping duty order issued in Certain Welded Carbon Steel Standard Pipes and Tubes From India, 51 Fed.Reg. 17,384 (Dep't Comm.1986) (antidumping duty order). See Certain Welded Carbon Steel Standard Pipes and Tubes From India, 56 Fed.Reg. 64,753 (Dep't Comm.1991) (final admin. rev.) (Final Review). Plaintiffs seek judgment pursuant to USCIT R. 56.1. This Court has jurisdiction under 28 U.S.C. § 1581(c) (1988) and, for the reasons which follow, enters judgment for defendants.
The administrative reviews at issue in this case arise from the ITA's final determination in Certain Welded Carbon Steel Standard Pipe and Tube From India, 51 Fed.Reg. 9089 (Dep't Comm.1986) (final determ.) (Final Determination). In the Final Determination, Commerce found plaintiff Tata Iron and Steel Corp. (TISCO) was selling or was likely to sell standard pipe and tube from India in the United States at less than fair value (LTFV). 51 Fed.Reg. at 9090. The ITA also determined a weighted-average dumping margin of 7.08 percent for TISCO. Id. The International Trade Commission later found the imports at issue were materially injuring a United States industry. Certain Welded Carbon Steel Standard Pipes and Tubes From India, 51 Fed.Reg. 17,384 (Dep't Comm.1986) (antidumping duty order). Based on the LTFV and injury findings, Commerce issued an antidumping duty order incorporating the weighted-average antidumping duty margins set forth in the Final Determination. Id. at 17,384-85.
The ITA subsequently undertook two consecutive administrative reviews of imports of standard pipe and tube from India into the United States. Certain Welded Carbon Steel Standard Pipes and Tubes From India, 56 Fed.Reg. 26,650 (Dep't Comm.1991) (prelim. admin. review) (Preliminary Review). These reviews assessed imports made by TISCO during two consecutive periods which began on May 1, 1987 and ended on April 30, 1989. 1 Id. The first review covered shipments from May 1, 1987 through April 30, 1988 and the second review extended from May 1, 1988 through April 30, 1989. Id. Commerce preliminarily determined dumping margins of 77.94 percent for the first period and 86.71 percent for the second period. Id. at 26,652. In the Final Review, Commerce slightly revised these figures, establishing margins of 77.32 and 87.39 percent for the first and second periods, respectively. 56 Fed.Reg. at 64,763.
Four aspects of the Final Review are pertinent to the instant case. The first is the ITA's decision to deny TISCO a circumstances of sale (COS) adjustment for rebate payments that the company received under India's International Price Reimbursement Scheme (IPRS). Although Commerce had previously made a COS adjustment to TISCO's home market sales price for IPRS payments in the Final Determination, 2 Commerce reversed its position in the administrative reviews.
The ITA refused to make a COS adjustment for the IPRS payments for three reasons. First, the ITA did not find the payments to be " bona fide circumstance[s] of sale" because they did not allow TISCO to provide "its customers with something of value other than the standard pipe subject to the sales transaction." Id. at 64,757. Commerce based its finding on the fact it "did not find that the price differential between sales of such or similar merchandise was 'due in any way to greater direct selling expanses [sic] or to value in addition to the physical article itself being conveyed to purchasers in the higher-priced market.' " Id. (citing Cyanuric Acid and its Chlorinated Derivatives from Japan Used in the Swimming Pool Trade, 49 Fed.Reg. 7424, 7427 (Dep't Comm.1984) (final determ.)).
In addition, even assuming the IPRS payment were a bona fide circumstance of sale, Commerce declined to grant a COS adjustment because it found the payments were not "directly related" to TISCO's United States sales. Id. at 64,757-58 (citing Negev Phosphates, Ltd. v. United States, 12 CIT 1074, 699 F.Supp. 938 (1988); Industrial Phosphoric Acid from Israel, 52 Fed.Reg. 25,440 (Dep't Comm.1987) (final determ.)). Because the payments "are merely predicated upon the act of exportation," Commerce indicated the payments were "tied to" sales rather than "directly related" to sales. Id. In addition, Commerce emphasized the fact that the IPRS enabled TISCO to receive benefits on United States sales that it did not receive on comparable home-market sales. Id. at 64,758.
The final reason Commerce cited for denying the COS adjustment is that the IPRS payments stem from production costs rather than from TISCO's marketing practices. Id. (citing Spun Acrylic Yarn from Italy, 50 Fed.Reg. 35,849 (Dep't Comm.1985) (final admin. review)). In sum, because the IPRS payments result from decisions pertaining to raw material input rather than from marketing practices, the ITA concluded the payments did not permit a COS adjustment. Id.
The second aspect of the Final Review at issue in the instant case is the ITA's refusal to grant TISCO a COS adjustment to reflect a trademark premium the company allegedly realized on its home market sales. Commerce denied TISCO a COS adjustment for the claimed trademark premium because the company failed to provide "the Department with credible information, based on generally accepted trademark valuation techniques, which would indicate what portion, if any, of the home-market price is due to the alleged trademark premium." Id. at 64,759. According to the ITA, TISCO's proposed valuation methodology, which relies on price differentials between its product and a competitor's product, is improper "since any number of factors could explain why one manufacturer's prices for standard pipe are different from those of another manufacturer." Id. Although Commerce found TISCO "provided some information showing that the prices it charges for pipe and tube are higher than the prices charged by its competitors for comparable products," Commerce concluded "TISCO has not provided sufficient evidence nor has it proved what portion of the differential ... is attributable to the trademark premium, let alone quantified any such premium precisely." Id.
The third pertinent aspect of the Final Review is the ITA's decision to exclude TISCO's home market sales of American Society of Testing Materials (ASTM) pipe in determining the company's home market price. The ITA decided to exclude TISCO's home market sales of ASTM pipe because it found the company did not make the sales in the ordinary course of trade. Id. at 64,755. After considering several factors, Commerce concluded "sales of ASTM pipe were not normal in terms of the domestic market for standard pipe in India." Id.
Although Commerce had previously found such sales to be in the ordinary course of trade, Commerce reversed its position in the Final Review. The ITA indicated its finding in the original investigation did not preclude a different result in a subsequent administrative review, citing PPG Indus., Inc. v. United States, 13 CIT 297, 301-02, 712 F.Supp. 195, 199 (1989). Id. at 64,756. Commerce explained that deficiencies in information submitted by TISCO in the original investigation prevented Commerce from assessing whether the company's ASTM home market sales were in the ordinary course of trade. Id. According to Commerce, it was not until the instant administrative reviews that certain facts emerged on the record that raised legitimate questions as to whether TISCO's ASTM sales were in the ordinary course of trade. Id.
In particular, the Department found during verification that, whereas IS pipe for sale in India receives only minimal packing and is stamped with the "TATA" trademark, the ASTM pipe sold in India was packed for export and unstamped, lending credence to petitioners' allegation that sales of ASTM standard pipe in India were actually production overruns or returns on export sales.
Id. Commerce also indicated other information concerning the different channels of trade that TISCO used to market ASTM and IS pipe and the company's divergent pricing practices for the different pipes permitted Commerce to consider whether the ASTM sales were outside the ordinary course of trade. Id.
In determining whether TISCO's sales of ASTM pipe were outside the ordinary course of trade in the Indian domestic market, Commerce assessed four factors. First, it "considered the differences in standards and product uses between ASTM and [Indian Standard or] IS pipe." Id. at 64,755. Commerce emphasized the fact that "[t]he use of ASTM pipe in the Indian domestic market is drastically limited because this pipe is measured in inches and fractions thereof.... [And a]s a consequence, ASTM pipe...
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