Nsk Ltd. v. U.S.
| Decision Date | 17 June 1997 |
| Docket Number | Slip Op. 97-74.,Court No. 95-03-00239. |
| Citation | 969 F.Supp. 34 |
| Parties | NSK LTD. and NSK Corporation; Koyo Seiko, Co., Ltd. and Koyo Corporation of U.S.A.; NTN Bearing Corporation of America, American NTN Bearing Manufacturing Corp., NTN Corporation, NTN Driveshaft, Inc. and NTN-Bower Corporation, Plaintiffs and Defendant-Intervenors, Nippon Pillow Block Sales Co., Ltd. and FYH Bearing Units USA, Plaintiffs, v. UNITED STATES, Defendant, The Torrington Company, Defendant-Intervenor and Plaintiff, Honda Motor Co., Ltd., American Honda Motor Co., Inc., Honda of America Mfg., Inc. and Honda Power Equipment Mfg., Inc., Defendants-Intervenors. |
| Court | U.S. Court of International Trade |
Lipstein, Jaffe & Lawson, L.L.P. (Robert A. Lipstein, Matthew P. Jaffe and Grace W. Lawson), Washington, DC, for plaintiffs and defendants-intervenors NSK Ltd. and NSK Corporation.
Powell, Goldstein, Frazer & Murphy (Peter O. Suchman, Neil R. Ellis and Lee Ann Alexander), Washington, DC, for plaintiffs and defendants-intervenors Koyo Seiko Co., Ltd. and Koyo Corporation of U.S.A.
Barnes, Richardson & Colburn (Donald J. Unger and Kazumune V. Kano), Chicago, IL, for plaintiffs and defendants-intervenors NTN Bearing Corporation of America, American NTN Bearing Manufacturing Corp., NTN Corporation, NTN Driveshaft, Inc. and NTN-Bower Corporation.
Michael J. Brown, for plaintiffs Nippon Pillow Block Sales Co., Inc. and FYH Bearing Units USA.
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, Washington, DC, Michelle K. Behaylo, Grand Rapids, MI, 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.
Stewart and Stewart (Terence P. Stewart, James R. Cannon, Jr., William A. Fennel, Patrick J. McDonough and Timothy C. Brightbill), Washington, DC, for defendant-intervenor and plaintiff The Torrington Company.
Gibson, Dunn & Crutcher (Donald Harrison and Jerry S. Fowler, Jr.), Washington, DC, for defendants-intervenors Honda Motor Co., Ltd., American Honda Motor Corp., Inc., Honda of America Mfg., Inc. and Honda Power Equipment Mfg., Inc.
Plaintiffs and defendant-intervenors move this Court for judgment on the agency record pursuant to Rule 56.2 of the Rules of this Court. Plaintiffs and defendant-intervenors challenge the Department of Commerce, International Trade Administration's ("Commerce") final results of the fourth administrative review for antifriction bearings ("AFBs"), 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 (Feb. 28, 1995).
The fourth administrative review encompasses imports of AFBs entered during the fourth review 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 Japan.
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 (Feb. 28, 1994). On February 28, 1995, Commerce published the Final Results at issue. See Final Results, 60 Fed.Reg. at 10,900.
NSK Ltd. and NSK Corporation ("NSK") claims Commerce erred in: (1) failing to apply a tax-neutral methodology in computing the value-added tax ("VAT") adjustment; (2) treating NSK's return rebates and postsale price adjustments as indirect selling expenses; (3) denying NSK a direct adjustment to foreign market value ("FMV") for home market early payment discounts and distributor incentives; (4) rejecting NSK's lump sum post-sale price adjustments and stock transfer commissions as indirect expenses; (5) not using NSK's purchase prices for bearings purchased by NSK from related suppliers; (6) improperly calculating exporter's sales price ("ESP") for imported bearing parts further manufactured in the United States; (7) rejecting NSK's reported interest income offset to interest expense in the calculation of cost of production ("COP") and constructed value ("CV"); and (8) including zero-priced sample sales in the U.S. database.
Koyo Seiko Co., Ltd. and Koyo Corporation of U.S.A. ("Koyo") contends Commerce erred in: (1) failing to apply a tax-neutral methodology in computing the VAT adjustment; (2) disallowing certain Koyo home market post-sale price adjustments that were not reported on an invoice-or product-specific basis; (3) investigating the cost of inputs obtained by Koyo from related party suppliers; (4) reclassifying Koyo's non-operating expenses and payments out of retained earnings as production expenses; and (5) committing certain clerical errors.
NTN Bearing Corporation of America, American NTN Bearing Manufacturing Corp., NTN Corporation, NTN Driveshaft, Inc. and NTN-Bower Corporation ("NTN") argues Commerce erred in: (1) failing to apply a tax-neutral methodology in computing the VAT adjustment; (2) including sample sales in the FMV calculation; (3) crossing levels of trade in comparing U.S. and home market sales; (4) refusing to grant NTN a price-based level of trade adjustment; (5) excluding NTN's home market sales to related parties in FMV calculation; (6) rejecting NTN's adjustment for interest on selling expenses; (7) reallocating NTN's U.S. selling expenses based on the sale price to the first unrelated party; (8) making improper adjustments to NTN's COP and CV data; and (9) treating home market discounts attributable to sales of subject merchandise as an indirect selling expense.
Nippon Pillow Block Sales Co., Ltd. and FYH Bearing Units USA ("NPB") asserts Commerce erred in resorting to best information available when NPB failed to report certain negative billing adjustments.
The Torrington Company ("Torrington") claims Commerce erred in: (1) incorrectly applying the "Roller Chain" and "knowledge" tests to exclude merchandise imported by Honda Motor Co., Ltd., American Honda Motor Co., Inc., Honda of America Mfg., Inc. and Honda Power Equipment Mfg., Inc. ("Honda"); (2) granting billing, post-sale price and warranty credit adjustments that were not linked to specific sales of in-scope merchandise; (3) accepting Koyo's U.S freight expenses where air and ocean freight charges were commingled and allocated to all U.S. sales without linkage to specific sales; (4) accepting Koyo's data regarding "efficiency variances" used in the calculation of cost of production contrary to its own verification; (5) failing to take into account certain related party commissions paid by NTN with respect to purchase price sales; (6) accepting NTN's designation of certain sales at the "aftermarket" level of trade and NSK's designation of certain distributor sales as destined to original equipment manufacturers ("OEMs"); and (7) committing certain clerical errors.
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). Substantial evidence is 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).
NSK, Koyo and NTN request a remand for Commerce to apply a tax-neutral amount, rather than rate, methodology in computing the VAT adjustment to U.S. price. NSK's Mem.Supp.Mot.J.Agency R. at 52-53; Koyo's Mem.Supp.Mot.J.Agency R. at 8-10; NTN's Mem.Supp.Mot.J.Agency R. at 47-48. Commerce consents to a remand so that it may apply a tax-neutral methodology. Def.'s Partial Opp'n to Mots.J.Agency R. at 7-10.
In light of Federal-Mogul Corp. v. United States, 63 F.3d 1572, 1580 (Fed.Cir.1995), requiring Commerce to apply a tax-neutral methodology, the Court agrees that remand is appropriate. This case is therefore remanded to Commerce to apply a tax-neutral methodology in computing the VAT adjustment to U.S. price for NSK, Koyo and NTN.
In calculating FMV and U.S. price, Commerce must determine the price actually charged by a respondent for the merchandise at issue, including discounts, rebates and price adjustments. See 19 U.S.C. §§ 1677a & 1677b (1988). Commerce believes the effect of allowing allocations for price adjustments that are averaged over all sales is to distort the actual price paid for each specific sale. Commerce has therefore primarily required respondents to provide transaction-specific information before allowing direct adjustments to FMV for discounts,...
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