Torrington Co. v. U.S.

• Decision Date: 07 March 1997
• Docket Number: Court No. 95-03-00345.,Slip Op. 97-29.
• Citation: 960 F.Supp. 339
• Parties: The TORRINGTON COMPANY, Plaintiff and Defendant-Intervenor, v. The UNITED STATES, Defendant, SKF USA INC. and SKF SVERIGE AB, Defendants-Intervenors and Plaintiffs.
• Court: U.S. Court of International Trade

960 F.Supp. 339

The TORRINGTON COMPANY, Plaintiff and Defendant-Intervenor, v. The UNITED STATES, Defendant, SKF USA INC. and SKF SVERIGE AB, Defendants-Intervenors and Plaintiffs.

Slip Op. 97-29.

Court No. 95-03-00345.

United States Court of International Trade.

March 7, 1997.

COPYRIGHT MATERIAL OMITTED

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

Howrey & Simon (Herbert C. Shelley, Alice A. Kipel, Anne Talbot and Patricia M. Steele, Washington, DC), for defendants-intervenors and plaintiffs SKF USA Inc. and SKF Sverige AB.

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: Mark A. Barnett, Michelle K. Behaylo, Stacy J. Ettinger, Thomas H. Fine, Dean A. Pinkert and David J. Ross, Attorney-Advisors, Washington, DC, Office of the Chief Counsel for Import Administration, U.S. Department of Commerce, for defendant.

OPINION

TSOUCALAS, Senior Judge.

Plaintiff and defendant-intervenor The Torrington Company ("Torrington") moves this Court pursuant to Rule 56.2 of the Rules of this Court for judgment on the agency record challenging aspects of the final determination of the Department of Commerce, International Trade Administration ("Commerce"), of the fourth administrative review of antifriction bearings ("AFBs") from Sweden, entitled Antifriction Bearings (Other Than Tapered Roller Bearings) and Parts Thereof From France, et al.; Final Results of Antidumping Duty Administrative Reviews, Partial Termination of Administrative Reviews, and Revocation in Part of Antidumping Duty Orders ("Final Results"), 60 Fed.Reg. 10,900 (1995). Defendant-intervenors and plaintiffs SKF USA Inc. and SKF Sverige AB (collectively "SKF") also challenge the fourth administrative review of AFBs from Sweden.

Background

On May 15, 1989, Commerce published the antidumping duty orders on AFBs from Sweden. See Antidumping Duty Orders: Ball Bearings, Cylindrical Roller Bearings, and Parts Thereof From Sweden, 54 Fed.Reg. 20,907 (1989). The fourth administrative review encompasses imports of AFBs entered during the period of May 1, 1992 through April 30, 1993. See Final Results, 60 Fed. Reg. at 10,900. The present consolidated action concerns imports from Sweden.

On February 28, 1994, Commerce published the preliminary results of the fourth administrative review. See Antifriction Bearings (Other Than Tapered Roller Bearings) and Parts Thereof From France, Germany, Italy, Japan, Singapore, Sweden, Thailand, and the United Kingdom; Preliminary Results of Antidumping Duty Administrative Reviews, Partial Termination of Administrative Reviews, and Notice of Intent To Revoke Orders (in Part), 59 Fed.Reg. 9,463 (1994). On February 28, 1995, Commerce published the Final Results at issue. See Final Results, 60 Fed.Reg. at 10,900.

Torrington contests the following actions of Commerce: (1) refusing to apply the reimbursement regulation; (2) using below cost sales in its calculation of profit for constructed value; (3) resorting to constructed value where sales were made below cost without considering other similar models; and (4) adjusting foreign market value ("FMV") for pre-sale inland freight expenses.

SKF claims that Commerce erred in: (1) failing to apply a tax-neutral methodology in computing the value-added tax ("VAT") adjustment; (2) treating certain home market sales as related party sales; and (3) adopting an incorrect "all others" rate for ball bearings from Sweden.

On May 3, 1995, the Court granted Torrington's motion for a preliminary injunction enjoining the liquidation of the subject entries during the pendency of this litigation.

Discussion

The Court's jurisdiction in this action is derived from 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) (1994). 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 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 Regulation

In the Final Results, Commerce refused to apply 19 C.F.R. § 353.26 (1995), the so-called "reimbursement regulation," for the following reasons:

We disagree with Torrington ... that the Department should deduct from ESP [exporter's sales price] antidumping duties allegedly reimbursed by foreign producers to their U.S. affiliates. In this administrative review neither party has identified record evidence that there was reimbursement of antidumping duties. Evidence of reimbursement is necessary before we can make an adjustment to USP [U.S. price]. This has been our consistent interpretation of 19 C.F.R. 353.26, the reimbursement regulation, and was upheld by the Court in Outokumpu Copper Rolled Products AB v. United States, 17 CIT 848, 829 F.Supp. 1371 (1993).

....

We also disagree with Torrington ... that the amount of antidumping duties assessed on imports of subject merchandise constitutes a selling expense and, therefore, should be deducted from ESP.

60 Fed.Reg. at 10,907.

Torrington argues Commerce erred by failing to apply the reimbursement regulation in all instances where (1) transfer prices between related exporters and importers were less than the cost of production plus profit, or, alternatively, cost of production, and (2) actual dumping margins were found. Torrington's Mem. Supp. Mot. J. Agency R. at 12-21. In the alternative, Torrington insists that Commerce should have at least further investigated the possible reimbursement. Id. at 21-22.

In response, Commerce states that there is no evidence in the administrative record that the exporter paid duties or reimbursed the related importer through alleged intra-company transfers. Commerce further argues that mere allegations that intra-company transfers were actually reimbursements of antidumping duties are insufficient to require Commerce to investigate the transfers. Commerce does request a remand, however, to explain the circumstances in which Commerce would apply the regulation in an ESP situation. Def.'s Partial Opp'n to Mots. J. Agency R. at 41-44.

The Court has already addressed this issue in previous cases dealing with the same administrative review. The Court found that Torrington failed to provide sufficient evidence of a link between intracorporate transfers and the reimbursement of antidumping duties to warrant requiring Commerce to commit resources to conduct an investigation. INA Walzlager Schaeffler KG v. United States, 21 CIT ____, ____ _ ____, 957 F.Supp. 251, 296-70 (1997); FAG Italia S.p.A. v. United States, 20 CIT ____, ____, 948 F.Supp. 67, 74-75 (1996); Torrington Co. v. United States, 20 CIT ____, ____, 944 F.Supp. 930, 933-34 (1996). The Court did grant Commerce a remand, however, to explain the circumstances in which it will apply the regulation in an ESP situation. INA Walzlager, 21 CIT at ____ _ ____, 957 F.Supp. at 269-70,; FAG Italia, 20 CIT at ____, 948 F.Supp. at 75; Torrington, 20 CIT at ____, 944 F.Supp. at 934.

Torrington's alternative argument lacks merit as well. Torrington demands an investigation of reimbursement based on evidence that is admittedly weak. In fact, Torrington acknowledges that the evidence it provided to Commerce related to "indirect" transfers. See Torrington's Reply to Opp'n to Mot. J. Agency R. at 7. The evidence submitted by Torrington amounts to no more than "mere allegations" that cannot support requiring Commerce to investigate the transfers between related parties. See Torrington Co. v. United States, 19 CIT ____, ____ _ ____, 881 F.Supp. 622, 631-32 (1995).

Accordingly, the Court sustains Commerce's decision not to apply the reimbursement regulation to adjust USP. The Court remands this issue to Commerce, however, to explain the circumstances in which it will apply the regulation in an ESP situation.

2. Calculation of Profit for Constructed Value

Torrington claims Commerce should not have included below-cost sales in calculating profit for constructed value. According to Torrington, the inclusion of such sales seriously distorts the statutory framework since below-cost sales are excluded when sales form the basis of FMV pursuant to 19 U.S.C. § 1677b(b) (1988). Torrington contends the same sales should be disregarded when constructed value serves as FMV. Torrington's Mem. Supp. Mot. J. Agency R. at 22-29.

In the alternative, Torrington argues that even if the Court concludes below-cost sales were properly included in the constructed value calculations, Commerce should have recomputed respondents' profits on the basis of the sample sales reported. Torrington submits that Commerce should have presumed profit based on sales of such or similar merchandise as reported by the respondents would be representative of the profit for the general class or kind of merchandise, and should have used the derived profit figures if they were higher than the statutory minimum of eight percent. Id. at 29-32.

Commerce responds that neither the definition of "constructed value" as provided in 19 U.S.C. § 1677b(e)(1)(B) (1988) nor the definition of "ordinary course of trade" contained in 19 U.S.C. § 1677(15) ...