Torrington Co. v. U.S., Slip Op. 96-163.

Decision Date03 October 1996
Docket NumberCourt No. 95-03-00350.,Slip Op. 96-163.
Citation944 F.Supp. 930
PartiesThe TORRINGTON COMPANY, Plaintiff and Defendant-Intervenor, v. UNITED STATES, Defendant, SKF USA Inc. and SKF France, S.A., Defendant-Intervenors and Plaintiffs.
CourtU.S. Court of International Trade

Stewart and Stewart (Terence P. Stewart, Wesley K. Caine, Geert De Prest and Lane S. Hurewitz), Washington, D.C., for plaintiff and defendant-intervenor, The Torrington Company.

Frank W. Hunger, Assistant Attorney General; David M. Cohen, Director, Commercial Litigation Branch, Civil Division, U.S. Department of Justice (Velta A. Melnbrencis); of counsel: Kira Alvarez, Michelle K. Behaylo and Dean A. Pinkert, Attorney-Advisers, Office of Chief Counsel for Import Administration, U.S. Department of Commerce, Washington, D.C., for defendant.

Howrey & Simon (Herbert C. Shelley, Alice A. Kipel, Anne Talbot and Patricia M. Steele), Washington, D.C., for defendant-intervenors and plaintiffs, SKF USA Inc. and SKF France, S.A.

OPINION

TSOUCALAS, Judge:

Plaintiff and defendant-intervenor, The Torrington Company ("Torrington"), commenced this action challenging aspects of the Final Results of the fourth antidumping administrative review of the antidumping duty orders, entitled Antifriction Bearings (Other Than Tapered Roller Bearings) and Parts Thereof From France, et al. ("Final Results"), 60 Fed.Reg. 10,900 (1995), as amended, Antifriction Bearings (Other Than Tapered Roller Bearings) and Parts Thereof From France ("Amended Final Results"), 60 Fed.Reg. 16,608 (1995). Defendant-intervenors and plaintiffs, SKF USA Inc. and SKF France, S.A. ("SKF"), also challenge aspects of the fourth review.

Background

The administrative review at issue was conducted by the Department of Commerce, International Trade Administration ("Commerce"), pursuant to section 751 of the Tariff Act of 1930, as amended, 19 U.S.C. § 1675 (1992), and concerns antifriction bearing ("AFB") imports entered during the fourth review period, from May 1, 1992 through April 30, 1993. Final Results, 60 Fed.Reg. at 10,901.

On February 28, 1994, Commerce published the preliminary results of its review. See Antifriction Bearings (Other Than Tapered Roller Bearings) and Parts Thereof From France, Germany, Italy, Japan, Singapore, Sweden, Thailand, and the United Kingdom, 59 Fed.Reg. 9,463 (1994). On February 28, 1995, Commerce published the Final Results at issue. See Final Results, 60 Fed.Reg. 10,900. After correcting the calculation of U.S. price ("USP"), Commerce published its Amended Final Results on March 31, 1995. Amended Final Results, 60 Fed.Reg. 16,608.

On July 31, 1995, the Court consolidated Torrington Co. v. United States, Court No. 95-03-00350, and SKF USA Inc., et al. v. United States, Court No. 95-04-00360, into this action, Consolidated Court No. 95-03-00350. Pursuant to Rule 56.2 of the Rules of this Court, Torrington and SKF both move for judgment on the agency record.

Torrington alleges that the following actions by Commerce were unsupported by substantial evidence on the agency record and not in accordance with law: (1) failing to apply 19 C.F.R. § 353.26 (1994), known as the "reimbursement regulation," in all instances where (a) transfer prices between related exporters and importers were less than cost of production plus profit, or, alternatively, less than cost of production, and (b) actual dumping margins were found; (2) taking sales below cost into account in calculating profit for constructed value ("CV"); (3) resorting to the use of constructed value where sales were made below cost without first determining whether there were other similar models that could serve as price-based comparisons; and (4) adjusting foreign market value ("FMV") for pre-sale inland freight expenses.

SKF claims that: (1) Commerce should have utilized a tax-neutral methodology for adjusting for value-added taxes; and (2) Commerce's computer program calculating U.S. price ("USP") contained a clerical error.

Discussion

The Court has jurisdiction over this matter under 19 U.S.C. § 1516a(a)(2) (1994) and 28 U.S.C. § 1581(c) (1994).

The Court must uphold Commerce's final determination unless it is "unsupported by substantial evidence on the record, or otherwise not in accordance with law." 19 U.S.C. § 1516a(b)(1)(B). Substantial evidence is "more than a mere scintilla. It means such relevant evidence as a reasonable mind might accept as adequate to support a conclusion." Universal Camera Corp. v. NLRB, 340 U.S. 474, 477, 71 S.Ct. 456, 459, 95 L.Ed. 456 (1951) (quoting Consolidated Edison Co. v. NLRB, 305 U.S. 197, 229, 59 S.Ct. 206, 216-17, 83 L.Ed. 126 (1938)). "It is not within the Court's domain either to weigh the adequate quality or quantity of the evidence for sufficiency or to reject a finding on the grounds of a differing interpretation of the record." Timken Co. v. United States, 12 CIT 955, 962, 699 F.Supp. 300, 306 (1988), aff'd, 894 F.2d 385 (Fed.Cir.1990).

1. Reimbursement of Antidumping Duties

Torrington claims that Commerce erred by failing to apply the "reimbursement regulation" where (a) transfer prices were less than cost plus profit (or cost), and (b) actual dumping margins were found. Torrington's Mem.Supp.Mot.J.Agency R. at 12-22. In particular, Torrington claims that when a foreign exporter (usually the manufacturer) transfers merchandise to a related U.S. importer at prices below the cost of production plus profit (or cost) and actual dumping margins are found, the artificially low transfer price is equivalent to a transfer of funds, and so, should be regarded as a "duty reimbursement." Id. at 14. Torrington contends that these alleged duty reimbursements should be deducted from the USP pursuant to 19 C.F.R. § 353.26(a)(1). In the alternative, Torrington claims that Commerce should have further investigated possible reimbursement. Id. at 21-22.

Torrington also challenges Commerce's determination that the reimbursement regulation does not apply to exporter's sales price ("ESP") situations. Torrington's Mem.Supp.Mot.J.Agency R. at 14-19.

Commerce maintains that such a "transfer of funds" is not evidence of a reimbursement and, consequently, no adjustment to USP is necessary. Def.'s Partial Opp'n to Pls.' Mots.J.Agency R. at 11. Commerce further responds that it was not required to conduct a further investigation of possible reimbursement of duties. Id. at 10-14. SKF agrees with the position taken by Commerce. SKF's Opp'n to Torrington's Mot.J.Agency R. at 11-20. However, Commerce consents to a remand to clarify its position regarding the circumstances under which it will apply the reimbursement regulation in an ESP situation. Def.'s Partial Opp'n to Pls.' Mots.J.Agency R. at 14.

This same issue was brought before the Court in Federal-Mogul Corp. v. United States, 20 CIT ___, ___, 918 F.Supp. 386, 393-94 (1996). In that case, the Court sustained Commerce's decision not to adjust USP based upon intracompany transfers because the plaintiffs failed to "establish a link between intracorporate transfers and the reimbursement of antidumping duties." Id. at 394. For the reimbursement regulation to apply, the Court has required evidence beyond a mere allegation that the foreign manufacturer either paid the antidumping duty on behalf of the U.S. affiliate importer, or reimbursed the U.S. affiliate importer for its payment of the antidumping duty. Torrington Co. v. United States, 19 CIT ___, ___, 881 F.Supp. 622, 631 (1995); see also Outokumpu Copper Rolled Products AB v. United States, 17 CIT 848, 863, 829 F.Supp. 1371, 1383 (1993) ("the court emphasizes that 19 C.F.R. § 353.26 (1992) permits adjustment to United States price only where the producer or reseller paid duties on behalf of the importer or reimbursed the importer"). As in Torrington and Federal-Mogul, Torrington has presented no such evidence in this case. Mere evidence of intracompany transfers does not constitute a reimbursement and does not require Commerce to adjust USP.

There is no statutory or regulatory support for Torrington's alternative assertion. Indeed, this Court previously addressed this issue in a challenge to the second review. In Torrington, the Court refused to remand the case for further investigation, stating that because plaintiff had failed to provide evidence of a link between intracorporate transfers and the reimbursement of antidumping duties, Commerce properly decided not to commit resources to conduct an investigation. 19 CIT at ___, 881 F.Supp. at 632. Similarly, in this case, Torrington has failed to provide such evidence. Hence, Commerce is under no duty to conduct a further investigation. The Court concludes that Commerce's decision not to adjust USP is supported by substantial evidence on the agency record and in accordance with law.

In deriving a USP to compare with FMV for dumping purposes, USP may be calculated on the basis of ESP (price at which a foreign manufacturer sells goods to a related U.S. importer), or purchase price (price at which a foreign manufacturer sells goods to an independent U.S. importer). 19 U.S.C. § 1677a(a)-(b) (1988). Commerce implied in the Final Results that it would never apply the reimbursement regulation in an ESP situation. See Final Results, 60 Fed. Reg. at 10,907. Commerce now states that such an implication does not represent its position, as it is inconsistent with the reimbursement regulation, and consents to a remand to clarify its position. Def.'s Partial Opp'n to Pls.' Mots.J.Agency R. at 14. This issue is remanded to Commerce to explain the circumstances in which it will apply the regulation in an ESP situation.

2. Inclusion of Below-Cost Sales in the Calculation of Profit for Constructed Value

Torrington further claims that Commerce improperly included below-cost sales in its calculations of profit for use in CV. Torrington's Mem.Supp.Mot.J.Agency R. at 22-29. Torrington contends...

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  • Timken Co. v. U.S., Slip Op. 97-164.
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    ...of a link between intracorporate transfers and the reimbursement of antidumping duties. See also Torrington Co. v. United States, 20 CIT ___, ___, 944 F.Supp. 930, 933-34 (1996); Federal-Mogul Corp. v. United States, 19 CIT ___, ___, 918 F.Supp. 386, 393-94 (1996). The Court of Appeals for ......
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    ...consents to a remand for this purpose. Def.'s Partial Opp'n to Pls.' Mots.J. Agency R. at 11; see also Torrington Co. v. United States, 20 CIT ___, ___, 944 F.Supp. 930, 936-37 (1996) (Commerce similarly consented to, and the Court granted, a remand for the same purpose). Hence, in accordan......
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