926 F.Supp. 1151 (CIT. 1996), 92-07-00483, Torrington Co. v. United States

Docket Nº:Court No. 92-07-00483.
Citation:926 F.Supp. 1151
Party Name:The TORRINGTON COMPANY, Plaintiff, Federal-Mogul Corporation, Plaintiff-Intervenor, v. UNITED STATES, Defendant, SKF USA Inc., SKF France S.A., SKF GmbH, SKF Industrie, S.p.A., SKF (U.K.) Limited and SKF Sverige AB; RHP Bearings and RHP Bearings Inc.; Koyo Seiko Co., Ltd. and Koyo Corporation of U.S.A.; GMN Georg Muller Nurnberg AG; NSK Ltd. and NS
Case Date:May 31, 1996
Court:Court of International Trade
 
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926 F.Supp. 1151 (CIT. 1996)

The TORRINGTON COMPANY, Plaintiff,

Federal-Mogul Corporation, Plaintiff-Intervenor,

v.

UNITED STATES, Defendant,

SKF USA Inc., SKF France S.A., SKF GmbH, SKF Industrie, S.p.A., SKF (U.K.) Limited and SKF Sverige AB; RHP Bearings and RHP Bearings Inc.; Koyo Seiko Co., Ltd. and Koyo Corporation of U.S.A.; GMN Georg Muller Nurnberg AG; NSK Ltd. and NSK Corporation; NTN Bearing Corporation of America, American NTN Bearing Manufacturing Corp., NTN Corporation and NTN Kugellagerfabrik (Deutschland) GmbH; NMB Thai Ltd., Pelmec Thai Ltd., NMB Singapore Ltd., Pelmec Industries Ltd. and NMB Corporation; FAG Kugelfischer Georg Schäfer KGaA, FAG Cuscinetti S.p.A., FAG (UK) Limited, Barden Corporation (UK) Limited, FAG Bearings Corporation and The Barden Corporation; Peer Bearing Company; Ina Walzlager Schaeffler KG and Ina Bearing Company, Inc., Defendant-Intervenors.

Slip Op. 96-85.

Court No. 92-07-00483.

United States Court of International Trade.

May 31, 1996

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Stewart and Stewart (Eugene L. Stewart, Terence P. Stewart, James R. Cannon, Jr., Wesley K. Caine, William A. Fennell, Washington, DC, John M. Breen, Troy, MI, Margaret E.O. Edozien, New York City, Robert A. Weaver, Wheaton, MD, Myron A. Brilliant, Geert De Prest, Lane S. Hurewitz, Margaret L.H. Png and Olufemi A. Areola), Washington, DC, for plaintiff.

Frederick L. Ikenson, P.C. (Frederick L. Ikenson, Washington, DC, Larry Hampel, Silver Spring, MD, Joseph A. Perna, V, Springfield, PA, and J. Eric Nissley, Washington, DC), for plaintiff-intervenor.

Frank W. Hunger, Assistant Attorney General, David M. Cohen, Director, Commercial Litigation Branch, Civil Division, U.S. Department of Justice (Velta A. Melnbrencis, Assistant Director, Marc E. Montalbine), of counsel: Stephen J. Claeys, Stacy J. Ettinger, Thomas H. Fine, Craig R. Giesze, Jeffrey

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M. Telep, Alicia D. Greenidge, Dean A. Pinkert, Edward Reisman and Mark A. Barnett, Attorneys, Office of the Chief Counsel for Import Administration, U.S. Department of Commerce, for defendant.

Howrey & Simon (Herbert C. Shelley, Alice A. Kipel, Juliana M. Cofrancesco, Thomas J. Trendl and Anne Talbot, Washington, DC), for defendant-intervenors SKF USA Inc., SKF France S.A., SKF GmbH, SKF Industrie, S.p.A., SKF (U.K.) Ltd. and SKF Sverige AB.

Covington & Burling (Harvey M. Applebaum, David R. Grace, Washington, DC, and Thomas A. Robertson, Belmont, NC), for defendant-intervenors RHP Bearings and RHP Bearings Inc.

Powell, Goldstein, Frazer & Murphy (Peter O. Suchman, Neil R. Ellis, T. George Davis, Robert A. Calaff, Lee Ann Alexander and Susan M. Mathews, Washington, DC), for defendant-intervenors Koyo Seiko Co., Ltd. and Koyo Corporation of U.S.A.

Ross & Hardies (Charles W. Petty, Jr., Washington, DC), for defendant-intervenor GMN Georg Muller Nurnberg AG.

Lipstein, Jaffe and Lawson, L.L.P. (Robert A. Lipstein, Matthew P. Jaffe and Grace W. Lawson, Washington, DC), for defendant-intervenors NSK Ltd. and NSK Corporation.

Barnes, Richardson & Colburn (Donald J. Unger, Robert E. Burke, Kazumune V. Kano, Chicago, IL, Peter Sultan, Washington, DC, and Diane A. MacDonald, Chicago, IL), for defendant-intervenors NTN Bearing Corporation of America, American NTN Bearing Manufacturing Corp., NTN Corporation and NTN Kugellagerfabrik (Deutschland) GmbH.

White & Case (Walter J. Spak, William J. Clinton, David E. Bond and Edmund W. Sim, Washington, DC), for defendant-intervenors NMB Thai Ltd., Pelmec Thai Ltd., NMB Singapore Ltd., and Pelmec Industries (Pte.) Ltd. and NMB Corporation.

Grunfeld, Desiderio, Lebowitz & Silverman (Max F. Schutzman, New York City, David L. Simon, Washington, DC, Andrew B. Schroth, Matthew L. Pascocello and Mark E. Pardo, New York City), for defendant-intervenors FAG Kugelfischer Georg Schafer KGaA, FAG Cuscinetti SpA, FAG (UK) Limited, Barden Corporation (UK) Limited, FAG Bearings Corporation and The Barden Corporation.

Venable, Baetjer, Howard & Civiletti (John M. Gurley and Lindsay B. Meyer, Washington, DC), for defendant-intervenor Peer Bearing Company.

Arent Fox Kintner Plotkin & Kahn (Stephen L. Gibson and Eleanor Pelta, Washington, DC), for defendant-intervenors INA Walzlager Schaeffler KG and INA Bearing Company, Inc.

OPINION

TSOUCALAS, Judge:

Plaintiff, The Torrington Company ("Torrington"), challenges certain aspects of the Department of Commerce, International Trade Administration's ("Commerce") final results of redetermination entitled The Torrington Company v. United States, Slip Op. 95-54 (March 31, 1995), Final Results of Redetermination Pursuant to Court Remand (" Remand Results"), filed on August 14, 1995. The Remand Results concern Antifriction Bearings (Other Than Tapered Roller Bearings) and Parts Thereof From France; et al.; Final Results of Antidumping Duty Administrative Reviews (" Final Results"), 57 Fed.Reg. 28,360 (June 24, 1992).

Background

In Torrington Co. v. United States, 19 CIT 403, ----, 881 F.Supp. 622, 651 (1995), the Court remanded this case to Commerce to: (1) apply the rate of value added tax ("VAT") forgiven to United States price, calculated at the same point in the stream of commerce as where the VAT is applied for home market ("HM") sales, and to add the resulting amount to United States price ("USP") without a circumstance of sale ("COS") adjustment to foreign market value ("FMV"); (2) deny an adjustment to FMV for HM pre-sale freight expenses where FMV was calculated using purchase price ("PP"); (3) develop a methodology which removes post-sale price

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adjustments ("PSPAs") and rebates paid on sales of out-of-scope merchandise from any adjustments made to FMV for PSPAs or rebates, if no viable method could be developed, to deny such adjustments in calculating FMV; (4) add an amount for profit which is not less than the statutory eight percent minimum to FAG Cuscinetti SpA's ("FAG-Italy") cost of production ("COP") data and to make any adjustments to constructed value ("CV") that may be required as a result; (5) address the issues raised by plaintiff concerning the adjustment to FMV for NTN Bearing Corporation of America, American NTN Bearing Manufacturing Corporation, NTN Corporation and NTN Kugellagerfabrik (Deutschland) GmbH ("NTN") for inventory carrying costs and to set forth the basis for its determination on this issue; and (6) provide a reasonable explanation of why the treatment of "Route B" sales in the Final Results differs from that afforded these sales in the original less than fair value ("LTFV") investigation or, if no explanation can be given, to exclude "Route B" sales from the HM database.

Discussion

Commerce's final results filed pursuant to a remand will be sustained unless that determination is "unsupported by substantial evidence on the record, or otherwise not in accordance with law." 19 U.S.C. § 1516a(b)(1)(B) (1988). Substantial evidence is such "relevant evidence as a reasonable mind might accept as adequate to support a conclusion." Consolidated Edison Co. v. NLRB, 305 U.S. 197, 229, 59 S.Ct. 206, 216-17, 83 L.Ed. 126 (1938); Alhambra Foundry Co. v. United States, 12 CIT 343, 345, 685 F.Supp. 1252, 1255 (1988).

1. Value Added Tax

In Torrington, 19 CIT at ----, 881 F.Supp. at 637, the Court directed Commerce to "apply the rate of VAT forgiven to USP, calculated at the same point in the stream of commerce where the VAT is applied for home market sales, and add the resulting amount to USP, without a COS adjustment to FMV."

Commerce changed its VAT methodology to comply with the Court's instructions. Remand Results at 3. Under the new methodology, Commerce

added to USP the result of multiplying the foreign market tax rate by the price of the United States merchandise at the same point in the chain of commerce that the foreign market tax was applied to foreign market sales. [Commerce] also adjusted the USP tax adjustment and the amount of tax included in FMV. These adjustments deduct (or add) the portions of the foreign market tax and the USP tax adjustment that are the result of expenses that are included in the foreign market price used to calculate foreign market tax and are included in the United States merchandise price used to calculate the USP tax adjustment, which we later deduct to calculate FMV and USP (or which were excluded from the price, but later added). These adjustments to the amount of the foreign market tax and the USP tax adjustment are necessary to prevent our new methodology for calculating the USP tax adjustment from creating dumping margins where no margins would exist if no taxes were levied upon foreign market sales.

Id. Although Commerce has complied with the Court's instructions, a further remand is appropriate.

Recently, the United States Court of Appeals for the Federal Circuit ("CAFC") in Federal-Mogul Corp. v. United States, 63 F.3d 1572, 1580 (Fed.Cir. 1995), held that 19 U.S.C. § 1677a does not preclude use of a tax-neutral adjustment methodology. 1 Subsequently, Commerce elected to return to a tax-neutral administration of 19 U.S.C. § 1677a(d)(1)(C). In addition, the Court agrees with Commerce that recalculations

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were unnecessary for (1) INA Roulements S.A. ("INA-France") because its margins were based on best information available, and (2) NMB Singapore Ltd. and Pelmec Industries (Pte.) Ltd. ("NMB/Pelmec Singapore") because VAT was not levied on sales of subject merchandise in Singapore. See Remand Results at 4. Therefore, the Court remands this case to Commerce to employ a tax-neutral methodology for the VAT adjustment to USP which utilizes the amount of the foreign market tax rather than the tax rate in recalculating the weighted-average dumping margins for all bearings...

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