Eregli Demir VE Qelik Fabrikalari T.A.S v. Colakoglu Metalurji A.S., 102919 USCIT, 16-00218

Docket Nº:16-00218
Opinion Judge:Mark A. Barnett, Judge
Party Name:EREGLI DEMIR VE QELIK FABRIKALARI T.A.S, Plaintiff, v. UNITED STATES, Defendant, and COLAKOGLU METALURJI A.S. AND COLAKOGLU DIS TICARET A.S, Consolidated Plaintiffs, and STEEL DYNAMICS, INC., ETAL, Defendant-lntervenors. Slip Op. 19-135
Attorney:Matthew M. Nolan, Arent Fox, LLP, of Washington, DC, for Consolidated Plaintiffs Qolakoglu Metalurji AS. and Qolakoglu Dis Ticaret AS. Patricia M. McCarthy, Assistant Director, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, DC, for Defendant United States...
Judge Panel:Before: MarkA. Barnett, Judge
Case Date:October 29, 2019
Court:Court of International Trade
 
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EREGLI DEMIR VE QELIK FABRIKALARI T.A.S, Plaintiff,

and

COLAKOGLU METALURJI A.S. AND COLAKOGLU DIS TICARET A.S, Consolidated Plaintiffs,

v.

UNITED STATES, Defendant,

and

STEEL DYNAMICS, INC., ETAL, Defendant-lntervenors.

Slip Op. 19-135

No. 16-00218

Court of Appeals of International Trade

October 29, 2019

         [The U.S. Department of Commerce's Final Results of Redetermination Pursuant to Second Court Remand are Remanded.]

          Matthew M. Nolan, Arent Fox, LLP, of Washington, DC, for Consolidated Plaintiffs Qolakoglu Metalurji AS. and Qolakoglu Dis Ticaret AS.

          Patricia M. McCarthy, Assistant Director, Commercial Litigation Branch, Civil Division, U.S. Department of Justice, of Washington, DC, for Defendant United States. With her on the brief were Joseph H. Hunt, Acting Assistant Attorney General, and Jeanne E. Davidson, Director. Of counsel on the brief was Brandon J. Custard, Attorney, Office of the Chief Counsel for Trade Enforcement and Compliance, U.S. Department of Commerce, of Washington, DC.

          Paul C. Rosenthal, R. Alan Luberda, David C. Smith, and Joshua R. Morev. Kelley Drye & Warren LLP, of Washington, DC, for Defendant-lntervenor ArcelorMittal USA LLC.

          Stephen A. Jones and Daniel L. Schneiderman, King & Spalding, LLP, of Washington, DC, for Defendant-lntervenor AK Steel Corporation.

          Alan H. Price and Christopher B. Weld. Wiley Rein LLP, of Washington, DC, for Defendant-lntervenor Nucor Corporation.

          Roger B. Schagrin and Christopher T. Cloutier, Schagrin Associates, of Washington, DC, for Defendant-lntervenors Steel Dynamics, Inc. and SSAB Enterprises LLC.

          Thomas M. Beline and Sarah E. Shulman. Cassidy Levy Kent (USA) LLP, of Washington, DC, for Defendant-lntervenor United States Steel Corporation.

          Before: MarkA. Barnett, Judge

          OPINION AND ORDER

          Mark A. Barnett, Judge

         This matter is before the court following the U.S. Department of Commerce's ("Commerce" or "the agency") redetermination upon second court-ordered remand. See Final Results of Redetermination Pursuant to Second Court Remand ("2nd Remand Results"), ECF No. 133. Plaintiff Eregli Demir ve Qelik Fabrikalari T.A.S. ("Erdemir") and Consolidated Plaintiffs Qolakoglu Metalurji A.S. and Qolakoglu Dis Ticaret A.S. (together, "Qolakoglu") each challenged aspects of Commerce's final determination in the sales at less than fair value investigation of certain hot-rolled steel ¶at products from the Republic of Turkey. See Certain Hot-Rolled Steel Flat Products from the Republic of Turkey, 81 Fed. Reg. 53, 428 (Dep't Commerce Aug. 12, 2016) (final determination of sales at less than fair value; 2014-2015) ("Final Determination"), ECF No. 41-1, and accompanying Issues and Decision Mem., A-489-826 (Aug. 4, 2016), ECF No. 41 -3, as amended by Certain Hot-Rolled Steel Flat Products from Australia, Brazil, Japan, the Republic of Korea, the Netherlands, the Republic of Turkey, and the United Kingdom, 81 Fed. Reg. 67, 962 (Dep't Commerce Oct. 3, 2016) (am. final aff. antidumping determinations for Australia, the Republic of Korea, and the Republic of Turkey and antidumping duty orders), ECF No. 41-2.1 This is the court's third opinion addressing challenges arising out of Commerce's Final Determination.

         On March 22, 2018, the court remanded the Final Determination with respect to Erdemir's home market date of sale; the denial of Qolakoglu's duty drawback adjustment; and the rejection of Qolakoglu's corrections to its international freight expenses. See Eregli Demir ve Çelik Fabrikalari T.A.S v. United States ("Erdemir I"), 42 CIT ___, 308 F.Supp.3d 1297 (2018). The court sustained Commerce's Final Determination in all other respects. See id. at 1304. On remand from Erdemir I, Commerce revised its date of sale determination for Erdemir's home market sales in a manner favorable to Erdemir; granted Qolakoglu's duty drawback adjustment but revised its method of calculating the adjustment; and provided additional evidence and explanation supporting its rejection of Qolakoglu's corrections to international freight expenses. See Confidential Final Results of Redetermination Pursuant to Remand ("1st Remand Results") at 1, 5-24, ECF No. 105.[2], n response to Qolakoglu's challenges to Commerce's method of calculating the duty drawback adjustment and continued rejection of its freight expense corrections, on December 27, 2018, the court remanded the former determination and sustained the latter. See Eregli Demir ve Çelik Fabrikalari T.A.S v. United States ("Erdemir II"), 42 CIT__, __, 357 F.Supp.3d 1325, 1332-34, 1336 (2018).3

         On June 3, 2019, Commerce filed its second remand results. See 2nd Remand Results. Therein, Commerce again revised its method of calculating Qolakoglu's duty drawback adjustments to U.S. price and made a circumstance of sale ("COS") adjustment to normal value to increase it by the same amount as the duty drawback adjustment. Id. at 2, 6-16, 21-28. The changes made by Commerce increased Qolakoglu's weighted-average dumping margin from 5.70 percent to 6.27 percent. Id. at 16.

         Colakoglu filed comments opposing Commerce's use of a COS adjustment. See Consol. Pis. Qolakoglu Metalurji A.S. and Qolakoglu Dis Ticaret A.S.'s Comments on Remand Redetermination ("Qolakoglu's Cmts."), ECF No. 135. Defendant United States ("the Government") and Defendant-lntervenors filed comments in support of the 2nd Remand Results. See Def.'s Resp. to Comments on Second Remand Redetermination ("Gov't's Reply Cmts."), ECF No. 138; Def.-lnts.' Comments in Supp. of 2nd Remand Results ("Def.-lnts.' Reply Cmts."), ECF No. 139.4

         The court recently remanded Commerce's decision to make a COS adjustment to normal value in the same amount as the duty drawback adjustment to U.S. price. See generally Haba§ Sinai ve Tibbi Gazlar Istihsal Endustrisi, A.S. v. United States, Slip Op. 19-130, 2019 WL 5270152 (CIT Oct. 17, 2019). For the reasons discussed in Habas and herein, the court sustains Commerce's duty drawback adjustment as applied to export price and remands Commerce's decision to make a COS adjustment in the same amount.

         Jurisdiction and Standard of Review

         The court has jurisdiction pursuant to § 516A(a)(2)(B)(i) of the Tariff Act of 1930, as amended, 19 U.S.C. § 1516a(a)(2)(B)(i) (2012), 5 and 28 U.S.C. § 1581(c).

         The court will uphold an agency determination that is supported by substantial evidence and otherwise in accordance with law. 19 U.S.C. § 1516a(b)(1)(B)(i). "The results of a redetermination pursuant to court remand are also reviewed for compliance with the court's remand order." SolarWorld Ams., Inc. v. United States, 41 CIT, _, 273 F.Supp.3d 1314, 1317 (2017) (citation and internal quotation marks omitted).

         Discussion

         I. Duty Drawback and Circumstance of Sale Adjustments

         A. Commerce's Duty Drawback Calculation Methodologies Prior to Erdemir II

         To determine whether the subject merchandise is being sold at less than fair value, Commerce compares the export price or constructed export price6 of the subject merchandise to its normal value. See generally 19 U.S.C. §§ 1673 et seq. Generally, an antidumping duty is the amount by which the normal value of a product-typically, its price in the exporting country-exceeds export price, as adjusted. See id. § 1673. One of the adjustments Commerce makes to export price pursuant to 19 U.S.C. § 1677a(c) is known as the "duty drawback adjustment." Specifically, Commerce is to increase export price by "the amount of any import duties imposed by the country of exportation which have been rebated, or which have not been collected, by reason of the exportation of the subject merchandise to the United States." Id. § 1677a(c)(1)(B). This statutory adjustment is intended to prevent the dumping margin from being increased by import taxes that are imposed on inputs used to produce subject merchandise, if those import taxes are rebated or exempted from payment when the subject merchandise is exported to the United States. See Saha Thai Steel Pipe (Public) Co. Ltd. v. United States, 635 F.3d 1335, 1338 (Fed. Cir. 2011); Wheatland Tube Co. v. United States, 30 CIT 42, 60, 414 F.Supp.2d 1271, 1286 (2006), rev'd on other grounds, 495 F.3d 1355 (Fed. Cir. 2007). The adjustment accounts for the fact that imported inputs remain subject to the import duties when consumed in the production of the foreign like product, "which increases home market sales prices and thereby increases [normal value]." Saha Thai, 635 F.3d at 1338.

         "Until recently, Commerce calculated the duty drawback adjustment to U.S. price ... by dividing rebated or exempted duties by total exports and adding the resultant per unit duty burden to the export price." Erdemir II, 357 F.Supp.3d at 1330. When producers were exempt7 from the...

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